Loomis Aktie

Ladies and gentlemen, welcome to the Loomis Quarter 1, 2026 Conference Call. I'm Lorenzo, the Chorus Call operator. [Operator Instructions] At this time, it's my pleasure to hand over to Aritz Uribiarte, President and CEO. Please go ahead.

Thank you very much. Good morning, everyone, and welcome to the First Quarter 2026 presentation for Loomis. My name is Aritz Uribiarte, and I'm the CEO of Loomis. And with me here today, I have our CFO, Johan Wilsby, and Jenny Bostrom, our Head of Sustainability and Investor Relations. I'll start by providing a quick summary of our first quarter before opening for questions.

Let's start the presentation by turning to Slide #2, We delivered a strong first quarter with revenues close to SEK 7.5 billion despite an 11.6% negative impact from changes in exchange rates. Currency adjusted growth reached 9.7 -- sorry, 9.3% with both strong organic growth and contribution from acquisitions.

During the quarter, we saw very strong growth within the International and FXGS business lines, driven by increased trend for the movement of precious metals, partly due to geopolitical uncertainties. We also continued to deliver strong growth in our Automated Solutions business line.

We increased our EBITDA margin by 1 percentage point year-over-year to 12.6%. This represents our highest first quarter margin to date, and I'm pleased to see that the restructuring and efficiency initiatives we have implemented support the margin expansion.

We delivered another quarter of strong operating cash flow with a cash conversion of 95% over the rolling 12 months. On a quarterly basis, cash flow was slightly impacted by higher working capital but remained at a solid level with 84% conversion. This robust cash flow enables us to continue investing in the business while also delivering attractive returns to our shareholders.

I'm also proud that we have been the first in our industry to have our climate targets validated by the Science Based Targets initiative. I will come back to this later in the presentation.

Yesterday, the Annual General Meeting approved the ordinary dividend of SEK 15 per share and the extraordinary dividend of SEK 5 per share. This means we will distribute over SEK 1.3 billion to shareholders next week. I would also like to highlight that today is the ex-dividend date.

Finally, earlier this week, we announced that we had entered into a share tender agreement with, among others, CVC Capital for their shares in Hermes Transportes Blindados, marking our entry into Peru. The transaction will be carried out through a public tender offer. I will spend some time on this acquisition after summarizing the first quarter performance.

Turning to the next slide to go through Europe and Latin America. Our Europe and Latin American segment delivered a strong performance in the quarter with revenues of SEK 3.6 billion. We achieved organic growth of 6.6%, which was particularly strong, considering the communicated revenue decline in the ATM business line.

The uncertainty of political climate has increased global demand for secure logistics and the management of physical assets such as precious metals. This has positively impacted both our International and FXGS business lines, with International business line growing by over 30% in the quarter compared to prior year.

We also achieved double-digit growth within our Automated Solutions. The operating margin increased close to 1 percentage points to 10.2%, demonstrating that our focus on operational efficiency yield positive results.

Let's move on to the next slide to talk about the U.S. The U.S. segment delivered another strong quarter. Adjusting for currency impact, the U.S. achieved record high revenues. Organic growth was 5.3%, and the acquisition of Burroughs contributed positively to overall growth.

International business line, in particular, delivered strong performance, which was driven by an increased demand of cross-border movement of precious metals. As you know, we have had double-digit growth -- organic growth within Automated Solutions for many quarters in a row. And this trend continued also in the first quarter with an organic growth in the mid-teens.

We also saw that price indexation related to higher fuel costs in March following developments in Iran contributed positively to revenue in the first quarter. Despite significant currency headwinds of 15.2%, the business achieved record high operating profit of over SEK 700 million. The operating margin reached 17.9%, marking a new record for us.

Our operational efficiency initiatives continue to deliver results, enabling us to grow the business without increasing headcount. At the same time, we have maintained a high service quality and strong customer satisfaction. The volume growth, combined with improved efficiency, contributed to the expansion of the operating margin.

The precious metal storage facility in Canada acquired at the end of 2025 has been successfully integrated during the quarter and contributed positively to profitability. In addition, the sale of a facility and relocation to a new leased site had a slightly positive and nonrecurring impact on the margin.

Let's turn to the next page and talk about SME/Pay. Revenues in the SME/Pay segment increased to SEK 72 billion in the quarter. More than 45% of this revenue now comes from new small- and medium-sized customers, demonstrating that our strategic focus on SMEs is driving both growth and improved operating results.

A reduction in the operating loss compared to the previous year is in line with the segment's strategic priorities. The migration to new POS platforms enables Loomis Pay to focus on larger SME customers across additional verticals. As part of this process, Loomis Pay has chosen not to migrate nonprofitable customers, which has some impact on settled transaction volumes.

Let's now move to the next slide where I'll share a few updates on our sustainability progress. We continue to make solid progress against our carbon emissions reduction plan. During the first quarter, our use of biofuel HBO increased by 10% compared to the same period last year. Today, 40% of the group's total electricity consumption comes from renewable sources, reflecting our ongoing efforts to transition to cleaner energy.

Year-over-year, our combined Scope 1 and Scope 2 emissions have increased slightly, primarily due to the acquisitions completed in 2025. However, when compared to the fourth quarter of 2025, we have achieved a meaningful reduction with Scope 1 and 2 emissions down by 3%.

Safety remains an equally important priority for Loomis. We have set a target to reduce our recordable work-related injury rates by 10% by 2027 compared to 2024 levels. On a rolling 12-month basis, we are performing slightly better than this target level. Protecting our employees and further reducing workplace injuries remain a key priority for the company, and we will continue to maintain strong focus on both safety and continuous improvement.

Let's move to the next slide. where I'm pleased to share that the Science Based Targets initiative has validated our new emissions reduction targets. Our new targets address both our direct emissions and indirect emissions across our value chain, reflecting a comprehensive and responsible approach to climate action.

With this, we cemented our role as the industry leader within sustainability, showing that it is possible to reduce our environmental footprint and deliver critical infrastructure at the same time. We have now taken a leading role in transforming the industry towards a more sustainable future.

Now let's turn to the income statement slide, where I'll begin by noting that despite the significant negative impact from exchange rate headwinds, we achieved both strong currency adjusted growth and organic growth. Our net financial items have improved compared to the previous year, driven by lower financial expenses as interest rates have declined. Our strong performance has resulted in record high earnings per share despite the currency headwinds.

I would also like to highlight that our net debt-to-EBITDA ratio is stable and well below our target of staying under 2x. With the acquisition of Hermes, net debt-to-EBITDA is expected to temporarily exceed 2x following completion. However, this increase is short term and leverage is expected to come down within 6 months. We remain fully committed to maintaining our investment-grade credit rating.

Now let's move on to the next slide to review our performance in a historical context. As we can see, we have a stable and resilient business model that continues to deliver. Looking at the rolling 12 months, we have achieved a record high operating margin of 12.9%. Despite significant currency headwinds, we have maintained revenues at SEK 30 billion. Currency adjusted growth for the rolling 12 months was 7.2%, slightly above our growth target for the strategic period.

Moving to the next slide before opening for Q&A, I want to spend some time on the intended acquisition of Hermes Transportes Blindados. Earlier this week, we announced the intention to acquire Hermes, marking our entry into Peru. For many years, Loomis has operated in Argentina and Chile, and we have continuously explore opportunities to expand our business in Latin America.

As you know, this is one of the strategic priorities we presented at our Capital Markets Day in 2024. And Peru is one of the countries we have been closely monitoring. It's an attractive market for Loomis, one of the fastest-growing economies in the region with high cash usage and a stable macroeconomic framework.

Hermes is a market leader in secure transportation and cash management in Peru with around 50% market share and a diversified base of approximately 1,000 clients and about 3,200 employees.

The transaction values the business at an enterprise value of SEK 1,450 million with an adjusted EBITDA multiple of 6.6x. We have entered into a tender offer agreement with CVC Capital Partners and other minority shareholders, who together hold 99.5% of the shared capital. Loomis will conduct a public tender offer to acquire up to 100% of the company's shares.

We expect to launch the tender offer during Q2 or Q3 with closing of the acquisition during Q3. From an earnings perspective, the acquisition is expected to be immediately accretive to earnings per share.

Overall, this acquisition strengthens our position in Latin America and is a strong strategic fit for Loomis. It aligns well with our growth ambitions within both Automated Solutions and International business line.

This concludes my summary of the quarter. Operator, we are now ready for questions.

[Operator Instructions] The first question comes from the line of Jonsson, Simon from ABG Sundal Collier.

Good morning, everyone. Thanks for questions. I want to start off with the International business here. Very strong growth again. But I wonder if you can clarify a little bit how much of the growth is driven by the precious metals business, of course, a large part of it. But also if the other categories in International are also growing and contributing or how that mix is doing?

Yes. Thanks, Simon. The situation in Q1 has been mixed. The beginning of the year was mainly driven by silver movements, where a lot of silver was transported globally as well as the -- we have also opened new geographical lanes and expanded our business.

So the key drivers include an increase in global interest in precious metals trading during geopolitical uncertainty as we had in Q4 last year as well. The war in Iran at the beginning of March with the closing of airspace has impacted somehow flights and also our business in Dubai and the Middle East. But there was -- there's been a continued high demand to move precious metals also outside Dubai at the same time.

All right. And what's the near-term outlook you think for that business, given that volatility may not be as high in the precious metals markets here? What do you see in coming quarters?

So as we've always commented, this business is cyclical. So it's very difficult to estimate how the year will proceed. But forwarding is more of a spot market and the year opened with high demand. However, we don't know how long the situation in Iran will last and the impact it will have on both airspace and availability of flight. Nevertheless, so far, we've seen the same level of momentum in Q2 -- at the beginning of Q2 as we saw in Q1.

All right. Then turning to the contribution from other segments in Europe, excluding the positive impact of International for the European margins, how how did the rest of Europe develop here in the quarter?

As you mentioned, we had International impacting positively. We also had Automated Solutions with double-digit growth. You know that we have diversified also our portfolio within International, expanding into pharmaceutical logistics, also growing with lower-value goods business as well. And now the focus moving forward is to keep growing Automated Solutions and to try and recover part of the ATM business that we lost in prior year.

Okay. So it's fair to assume that -- the core cash business has been more flat on margins then?

Yes. Yes, you may assume that.

All right. You also did not take any new charges for restructuring, I think, here in Q1, if I read correctly. So what does that mean for the future of the cash business in Europe in terms of margins and outlook and so on?

So I mean, looking at the restructuring costs, you know that we still have an ongoing review on Europe. So therefore, we showed that some additional restructuring may occur in 2026, although not to the level of what we saw in 2025.

And regarding the margins, you know that our ambition is to just try to recover the margins that we had of the -- before we got impacted by COVID, I think we're on the right track there. There's still work to be done. But we're happy with the pace that we're showing. I mean, increasing close to 1% of margins in Europe is a strong performance, I would say.

All right. Then just the last one for me on the Hermes acquisition, You talk about synergies with your existing International business taking the cross-border business over there. But do you also plan to expand the the local mining business to more countries in the region, for example? Is that part of the plan?

I mean it's -- we already do that in certain parts of Argentina as well. But I think -- the main purpose with Hermes is on the International side, they only take care of the domestic side of the business, and we [ want ] to add that International leg to be able to do that door-to-door service.

And then another key thing there, a driver of growth will be Automated Solutions. We think there's a low penetrated market in that sense in Peru, and we can be very successful as well with our [ team ] of products.

All right. Just a follow up on that on the mining business in both Peru, but also you mentioned you have some in Argentina. Is -- what kind of metals or that primarily gold or other [ types ]?

In Peru, you know that they are one of the biggest producers in gold, silver and copper. But you got other materials as well. We manage other materials. Numbers -- the names don't come up to me now. But palladium, for example, we got other type of precious metals as well. But basically, it's gold, silver and copper.

All right. You mentioned copper. Is that something you work with as well?

Yes.

The next question comes from the line of Suhasini Varanasi from Goldman Sachs.

Just one for me, please. Judging by your commentary around International, Automated Solutions effects, et cetera and also your commentary around passing on higher fuel cost to customers, would it be fair to say that your growth rate at the end of the quarter was a lot higher than the average that you printed and therefore, that's a trend that we can probably expect, depending on how the macro evolves into the next quarter as well?

Sorry, Suhasini, we didn't get all of your question. You said in the beginning, you were commenting around International, Automated Solutions, et cetera -- the last part of the question.

So I just wanted to check whether the growth rate in March, end of the quarter was higher than what you printed for 1Q as a whole. And therefore, is that something that we can look for going into the next quarter as well qualitatively?

I mean in terms of the fuel fees indexation that we have, that is true that some of that happened to a larger extent in March. So there, earlier in the quarter. You can...

Yes. I mean that's the growth due to the fuel fee that came mainly in the U.S. So we've got 2 countries where we have those fuel metrics in the contract. That is U.S. and France to a certain extent. We saw the big impact in the U.S. and -- on the revenue. And we expect, for example, Q2 -- the beginning of Q2, it has been as high as it was in Q1.

Now we don't know how long the Iran war will last. But as far as the fuel costs are high, then we should see that growth in revenues well from [ PMT ].

So just a follow-up. The International and the FX business did not see any phasing on growth through the quarter?

Not really.

The next question comes from the line of Dan Heimer from SEB.

Yes. A couple of questions from my side. Maybe starting a little bit on the U.S.A. margin, which was the strongest one on record. Just to clarify the positive effect from the sales leaseback here. It sounds like it's quite minor, like SEK 10 million or so. if you can confirm that. So also just for this, it would be -- yes, your best quarter ever margin-wise in the U.S. Yes.

The sale of the facility generated approximately $1 million in [ EBITDA ] in Q1.

Perfect. And following up on that, I would assume that Burroughs is still quite a bit dilutive. I was just curious to hear how far progressed you are with the integration there?

So first of all, answering your question, yes, it is diluting the margin. We're still in early stages with Burroughs. Our immediate focus is more on solving some existing quality issues to ensure service excellence. And then once we achieve that, then we will shift our efforts into improving margins and efficiency.

Yes. Perfect. And final one from my side. I noticed that the headcount is down 600 FTEs year-on-year. I assume it's impacted by the restructuring measures. But can you remind me how you're thinking about further restructuring measures for 2026, primarily for Europe? I noticed you didn't record any items affecting comparability in this quarter. Would you say the FTE reductions are done now? Or do you see certain countries where you need to adapt still?

So you're mixing two things here. First of all, we focus in the U.S. Yes, we had 600 employees year-over-year, less FTEs in the U.S. due to operational efficiencies, and we will continue with the work there. If we look at Europe, we didn't have any restructuring cost in Q1 2026. But we do expect to have restructuring cost in the remaining part of the year. again, not to the extent of what we had in 2025. But there's still work ongoing on the different European countries.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Aritz Uribiarte for any closing remarks.

So thank you very much, everyone, for listening in, and please reach out if you have any follow-up questions. Thank you. Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Loomis Extra call regarding the announcement acquisition of Hermes Transportes Blindados. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Aritz Larrea, President and CEO. Please go ahead.

Good morning, and welcome to our call where we will present the announced acquisition of Hermes Transportes Blindados. My name is Aritz Larrea, and I'm the President and CEO of Loomis. And with me here today, I have our CFO, Johan Wilsby; and our Head of Investor Relations and Sustainability, Jenny Bostrom. It's great to see so many of you joining on short notice to hear us present our largest acquisition to date.

Yesterday, we announced that we had entered a share tender agreement with, among others, CVC Capital for their shares in Hermes, marking our entry into Peru. The transaction will be conducted through a public offer tender. But before I go into details of Hermes and the transaction itself, let me spend some time explaining why Peru is an attractive market for us.

For many years, Loomis has operated in Argentina and Chile, and we have long explored different opportunities to expand our business in Latin America. As you know, this is one of the strategic priorities we presented at our Capital Markets Day in 2024. Among the countries we have been closely monitoring is Peru. I assume most of you are familiar with Peru, but let me provide some context.

As shown on the map, Peru is located on the West Coast of the continent and has a population of approximately 32 million people. It stands out as an attractive market due to its high and resilient level of cash usage, where cash continues to account for a majority of transactions, particularly when including the informal economy. Furthermore, the country has a solid macroeconomic environment and maintains an independent central bank.

Peru is one of the faster-growing economies in Latin America, supported by investment, exports and prudent fiscal policy. It has a stable macroeconomic framework characterized by low public debt and a conservative fiscal management across multiple governments. In addition, Peru is one of the world's largest producers of silver and a major gold producer. It also ranks among the largest global exporters of copper. Finally, banking penetration remains relatively low, which has historically supported a high reliance on cash despite the growth of digital payments. Given these factors and favorable market conditions, Peru is an attractive country for a company such as Loomis, looking to expand in Latin America.

Let's turn on to the next Slide to take a closer look at the company. We have now initiated the process to acquire Hermes, a company founded in 1985 and listed on the Lima Stock Exchange. The company brings more than 40 years of experience in secure logistics and risk management within Peru's financial system. It operates under the supervision of the superintendency of banking, insurance and pension fund administrators.

Hermes has built a leading market position with an estimated 50% market share and a diversified client base of approximately 1,000 customers across the country. It serves key sectors, including financial institutions, retail, mining, utilities and government entities, acting as a critical partner to both private and public banks. Hermes is at the center of Peru's cash circulation system and plays a fundamental role in society.

So what does Hermes offer? In many ways, Hermes operates similarly to Loomis. The company provides secure transport, processing and custody of cash and valuables. Its services also include ATM operations, cash collection and smart cash handling solutions that help automate processes and reduce risk. Beyond cash, Hermes delivers specialized secure logistics for industries such as mining, including the high-security transport of precious metals and other high-value minerals.

Hermes operates a well-established nationwide platform of 19 branches with presence in most parts of the country. The company employs more than 3,200 professionals delivering its services every day and operates a stable fleet of purpose-built armored vehicles. In addition, it has begun expanding into automated solutions with an installed base of around 1,000 smart safes.

Turning to the numbers in 2025, the company reported revenues of approximately SEK 1.2 billion, further highlighting the strength, resilience and maturity of the business. Overall, Hermes stands out as a trusted and strategically important partner to many of Peru's most significant organizations. I'm truly impressed by Hermes and its strong track record of growth, profitability and innovation. And I look forward to continuing this journey together.

Turning on to the next slide. Hermes operates across 5 business units, each focused on risk management solutions. These services support the financial, retail, government services and mining sectors and align closely with our own business lines and areas of expertise. The first is valuable logistics. Here, Hermes provides secure transportation of banknotes, coins, precious metals, jewelry and other high-value assets. This also includes cash management services as well as ATM supply and maintenance with more than 3,200 ATMs nationwide in 2025.

CIT [ lite, ] also known as Smart Security, serves small and medium-sized retail businesses. It focuses on the collection, transport, processing and storage of cash and variables. Hermes has built a strong position among SMEs, an area that is also a key strategic growth priority for us at Loomis. Hermes [indiscernible] is comparable to our automated solutions offering. It automates cash validation and accounting, enables real-time monitoring and produces detailed reports to support operational control and financial close.

Hermes also offers customized seller services and branch administration outsourcing, including the operation of bank branches and payment locations for, among others, financial institutions and utility companies. Finally, through specialized logistics, Hermes delivers tailored solutions such as national and local courier services, document processing, mailroom management and digital storage services.

Let's move on to the next slide where I will dive into the strategic rationale for this acquisition. This transaction marks a key milestone in our ambition to expand Loomis' presence in Latin America. With this acquisition, we increased our footprint in the region from 2 to 3 countries by entering Peru to a market-leading player where we see both strong strategic fit and continued growth potential. Hermes' strong position among small- and medium-sized businesses provides a solid platform to expand our automated solutions offering in Peru. The company already has an installed base of around 1,000 smart safes giving us an excellent foundation to build on and to introduce Loomis' own cash handling automated solutions under [ Tina ] brand.

This creates clear opportunities for both organic growth and cross-selling. In addition, we see meaningful opportunities to drive operational efficiencies over time. This includes areas such as procurement, where we can leverage our global scale in vehicles, equipment and insurance as well as implementation of best practices in routing, fleet utilization and security protocols. These are proven numbers within Loomis, and we see good potential to gradually enhance margins. We also see strong potential to grow within the mining sector.

Hermes is already the dominant player in domestic secure transport of Minerals across Peru. By combining this position with Loomis' international cross-border logistics and storage capabilities, we unlock opportunities to extend the offering beyond national borders and capture additional value in the supply chain. Another important opportunity lies in further digitalization. By introducing more advanced data analytics and cash flow visibility tools, we can enhance the value proposition to customers, improving efficiency, transparency and integration with the broader financial operations.

Finally, the acquisition supports Loomis' financial targets contributing to both revenue growth and margin accretion. Hermes also demonstrates strong governance and is at the forefront of sustainability in its market, aligning well with Loomis' sustainability priorities and targets. Overall, this is a transaction where we combine a strong local platform with Loomis' global capabilities, creating a clear path for long-term value creation.

Let's turn on to the next slide, where I would like to share a few personal reflections on why this is such a good fit between Loomis and Hermes. First, there's a strong cultural alignment. Both companies operate in environments where trust security and reliability are absolutely critical. In my discussions with the Hermes team, it is clear that they share our uncompromising focus on safety, operational excellence and customer trust. That is not something you can easily replicate. It has to be embedded in the culture. Second, we see a high degree of similarity in the business model. Hermes has developed a platform that, in many ways, mirrors our own combining cash in transit, cash management and value-added services. This makes the integration more straightforward and allows us to accelerate value creation by sharing best practices across operations, technology and commercial execution.

Third, I have been particularly impressed by the quality of the local management team. They have built a market-leading position in a complex environment, which speaks to the capabilities and discipline. Our intention is very clear. We want to support and empower this team, combining the deep local expertise with Loomis' global scale and experience.

Another important factor is our shared approach to governance and sustainability. Hermes operates with strong standards in both areas, which aligns well with Loomis' priorities and expectations as a global listed company. Finally, there's a strong alignment in how we view the future of the industry. Both companies recognize that while cash remains critical infrastructure, the market is evolving towards more technology-enabled and integrated solutions, and this is an area where we see significant potential to grow together.

And with that, I would also like to say that I'm very pleased to welcome more than 3,200 Hermes employees to the Loomis family. Their expertise and dedication will be a key part of our continued success going forward. Turning on to the next slide and going through the transaction details. We have entered into a shared tender agreement with CVC Capital Partners and other minority shareholders representing 99.49% of the outstanding shares of Hermes. As part of these agreements, we intend to launch a public tender offer to acquire up to 100% of the company.

While we aim to acquire all outstanding shares, the transaction is not contingent upon achieving full acceptance. The transaction values the business at an enterprise value of PEN 1,450 million corresponding to an EV to adjusted EBITDA multiple of approximately 6.6x based on 2025 financials. The acquisition will be fully financed through debt with a committed bridge facility in place from our core banking group.

From a financial perspective, net debt to EBITDA is expected to temporarily exceed 2x following the acquisition. However, this increase is short term and leverage is expected to normalize within 6 months. We remain fully committed to maintaining our investment grade credit rating. Importantly, the transaction is expected to be immediately accretive to both operating profit and earnings per share.

Moving on to the next slide, I want to show you the steps that are involved in this process. Here, you can see a high-level time line of the key steps involved in this transaction. As mentioned, Hermes is listed on the Lima Stock Exchange. To date, we have entered into a share tender offer agreement with shareholders representing 99.49% of the outstanding shares. The tender offer will be launched once certain customary conditions have been fulfilled, including change of control clauses.

We expect the offer to commence during the second or third quarter of 2026. Once launched, the acceptance period will be around 30 days. Following completion of the tender offer, the business will be reported within our Europe and Latin America segment and consolidated into the group as of closing. Closing is expected to take place during the third quarter of 2026, shortly after the completion of the tender offer. No regulatory approvals are expected to be required to complete the transaction, and a potential delisting will be managed through a separate process following the successful completion of the acquisition.

To sum up, this transaction represents a strategic milestone in the history of Loomis. With the acquisition of Hermes, we are entering Peru, one of the most attractive markets in Latin America, characterized by solid macroeconomic fundamentals, a growing economy and a high and resilient level of cash usage. Hermes is the clear market leader with a strong track record of growth, profitability and innovation and a business model that aligns closely with our own. This acquisition strengthens our position in Latin America, spans our platform for future growth and supports our long-term financial targets.

And last, but certainly not least, I'm very pleased to welcome more than 3,200 new colleagues to Loomis. Their expertise and dedication will be an important part of our continued success going forward. With that, I would like to open the call for questions.

[Operator Instructions] Our first question comes from Dan Hammer with SEB.

Yes. Interesting acquisition. A couple of questions from my side. Maybe starting a little bit on the mining exposure here. Is it possible to give any sense on how big it is in terms of sales? Also a little bit on how your international business can complement Hermes local mining logistics? I mean does it -- do you think you can take over some of the transport -- international transport or precious metals that I guess, Hermes currently hands off to other partners?

Thank you for your question, Dan. To start off, I would say that the mining services represent around 15% to 20% of Hermes' revenue. And as you know, as we're saying, what they take care of today is the domestic business going from the mining areas to the airport. We can fulfill that second leg, the international leg and offer a door-to-door solution to the customer. So there's a great potential there, as you see.

Very interesting. And maybe a little bit on the EBITDA margin of Hermes. It already looks quite robust. I mean, usually, you target margin expansion through adding technology, move up the value chain. But how much can you do here in terms of the margin? Is the infrastructure already at peak efficiency, so to say, and the potential is more towards, I guess, growth synergies? Or do you think there's cost synergies as well here?

I would say that we have cost synergies as well, but we need to look at the business. As we already talked about international part of the mining services but you also need to consider the great opportunity we have with automated solutions coming from our [ Tina ] brand, and that is a huge opportunity in Peru as well.

Perfect. And the final one from my side. I mean it seems to look quite similar to your own operation. But in terms of CapEx, et cetera, is it also similar on that line, given the EBITDA margin is quite high, but -- is it the same sort of bridge down to operating profit? Or is this one more capital intensive compared to your operations?

No, very similar to ours.

The next question comes from Simon Jonsson with ABG.

Congratulations on the transaction. Just first, a follow-up on the sales mix here. You said 15%, 20% on mining. You also highlighted some exposure to automotive solution services. Can you maybe share a bit more what that share is currently of the group?

Sorry?

Share for automated solutions.

I don't have the details now with me. What we've said is that they already have 1,000 machines. And there's a lot to explore in that sense in the Peruvian market. But I don't have all the details that you're asking for.

All right. But do you have any understanding on sort of the penetration in this market for automated solutions? Is it significantly less mature compared to Europe and North America, you would say?

Yes, it's as mature for sure. Yes. .

All right. Then on your market position. And maybe it's a bit difficult to answer, but around 50% market share, do you -- do you also see that there is more potential for bolt-ons in this country? Or do you think now you're sort of taking what you can and will try to take market shares or -- or do you think that there is also bolt on acquisition potential here? .

Not in this country, Simon.

All right. And in terms of your general presence here in Latin America now, do you think that with this, it makes even more sense to be more aggressive in the other countries in Latin America?

We already explained at our Capital Markets Day that this was going to be one of our main focuses when growing the business in emerging markets. So we keep exploring, as we've been doing for the past years in adding new countries to this Latin America business line.

All right. And just a final one on margins, and you talked a little bit about that you see even further margin potential here. But it is very high margins, of course. Can you just maybe explain a bit the reason behind that? Is it any specific category here where margins are very high? Or is it just that margins in general are much higher? Or is there anything for us to keep in mind here on the sales exposure and margin for different segments?

When you look at Latin America, you see that margins are higher, but obviously, the risk is higher as well. So that's a normal thing in our business. But I would say that aside from that, there's nothing else especially in the Peruvian market.

[Operator Instructions] Our next question comes from Viktor Lindeberg with DNB.

Starting to look a bit in the rearview mirror, to my understanding, CVC has been their main owner in the past 5, 6 years and curious to understand the business development under the control of CVC, what -- any transformation initiatives or business initiatives that have been taken here? And also, I noticed that the head count is quite a bit lower today than it was when CVC acquired the company. So it would be interesting to understand the business mix change or if the company is sort of shrinking to find better and strong position or is that information was incorrect? So starting on that and then a few more.

Viktor, I don't have all the details on what CVC has done with the company. But I can tell you that more or less when you see the past years, it has remained that. So I haven't seen any big transformation being done by CVC. Probably they have been working on efficiency as we are, and that means reducing headcount while you keep growing the business, but no other specifics there.

All right. I noticed Peru has a bit higher corruption index when looking at this world map. And I know you have been very much investing in compliance on group level and also locally. And just to see what do you see in terms of business counterpart risks here? And if that's something you need to review given your strict focus on compliance and this being a new market for you further out on the risk curve?

So in that sense, we are aware of the general corruption risks in Peru as well as in other South American countries. We obviously have done full due diligence and it indicated that the company has strict protocols in place. Yes, we have had an extensive due diligence process, including legal, compliance, labor, payroll, finance tax, IT operations and insurance. But what we see is that Hermes is committed to ensuring compliance with the regulations governing these operations, and has a strong regulatory compliance program in place.

There are no business areas within Hermes that you foresee that you might leave behind or focus less on going forward?

Not at all.

That's good. And final housekeeping question, transaction cost, assuming this approval and tendering will follow through, what kind of integration cost, transaction cost should be expected on the back of this?

No material costs are expected for that part of the process. Obviously, we've been working for a number of months of that already but those kind of M&A-related costs, we're already assuming in the P&L.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Larrea for any closing remarks.

So thank you all for listening in such short notice, and please reach out if you have any questions. We're very excited with the time ahead with this acquisition. Thank you very much. Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Fourth Quarter and Full Year 2025 Conference Call. I'm Vicki, the Chorus Call operator. [Operator Instructions]

The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Aritz Larrea, President and CEO. Please go ahead, sir.

Thank you very much. Good morning, everyone, and welcome to the fourth quarter and full year 2025 presentation for Loomis. My name is Aritz Larrea, and I'm the CEO of Loomis. And with me here today, I have our CFO, Johan Wilsby; and Jenny Bostrom, our Head of Sustainability and Investor Relations.

I'll start by providing a quick summary of our fourth quarter as well as our full year performance, and we'll also talk about our accomplishments for the first year of this strategic period before taking questions. Let's start the presentation by turning to Slide 2. We delivered a solid and positive performance in the fourth quarter with revenues reaching SEK 7.7 billion despite a 10% negative impact from changes in exchange rates.

Currency adjusted growth reached 7.5%, driven by 4% organic growth, solid despite the headwinds in our ATM business and a solid contribution from acquisitions. In the quarter, we saw very strong growth within the International and FXGS business lines due to an increased demand for the movement of precious metals, driven in part by geopolitical uncertainties. Our performance was driven not only by market conditions, but also by our expansion of the addressable market through the opening of new geographic lanes and our ability to capture global demand. We also continued to deliver strong growth within the Automated Solutions line of business during the quarter.

The business mix, along with higher efficiency resulted in an increased operating margin of 13.2% versus 12.9% in prior year, with an operating income of above SEK 1 billion. This is the highest EBITA we have achieved for fourth quarter, and I'm pleased to see that the restructuring and efficiency initiatives we have taken, successfully growing the business without increasing headcount are supporting the margin expansion.

We delivered another quarter of strong operating cash flow with a cash conversion of 99% for the year, and the free cash flow in the quarter was close to SEK 1.2 billion. This robust cash generation enables us to continue investing in the business while also delivering attractive returns to our shareholders.

In the fourth quarter, we completed the acquisition of the precious metal storage facility in Toronto that was announced in the third quarter. This acquisition strengthens our local presence in Canada and expands our depository services and storage capacity within the International business line.

During the year, we remained active in M&A while maintaining a disciplined approach to capital allocation. Despite continued investments in the business and the execution of our share repurchase program, our net debt-to-EBITDA ratio improved year-over-year. This discipline is also reflected in a return on capital employed of above 16% in the quarter.

During the quarter, we repurchased about 540,000 shares for a value of SEK 200 million. In total, during 2025, we have repurchased close to 1.5 million shares for a value of SEK 600 million. The Board of Directors has proposed a record high ordinary dividend of SEK 15 per share to the Annual General Meeting. And in addition, the Board of Directors has proposed an extraordinary dividend of SEK 5 per share in an extraordinary dividend. This brings a total distribution to shareholders above SEK 1.3 billion.

Let's now turn to our reporting segments, starting with Europe and Latin America. Our European and Latin American segment delivered a solid performance in the quarter with revenues reaching close to SEK 3.7 billion. We achieved an organic growth of 1.9%, which was strong considering the communicated decline in the ATM business line. The uncertain geopolitical climate has increased global demand for secure logistics and the management of physical assets such as precious metals, and our teams have successfully grown the business in this environment. It's impressive to see that the International business line grew over by 30% in the quarter compared to prior year.

The operating margin increased by 40 basis points to 12.5%. And for the full year, we increased our operating margin by 0.7 percentage points to 11.8%, demonstrating that our focus on operational efficiency yields positive results.

Let's move on to the next slide to talk about the U.S. The U.S. segment delivered another strong quarter. If we adjust for the currency impact, which was negative 13%, the U.S. achieved record high revenues and operating profit. Organic growth was 5.5%, and the acquisition of Burroughs contributed positively to the overall growth.

The International and Automated Solutions lines of business had notably strong performance in the quarter. It's worth highlighting that it was the 16th consecutive quarter that the Automated Solutions business line has achieved double-digit organic growth.

Our implemented operational efficiency measures continue to show results, allowing us to grow the business without adding employees. At the same time, we have secured a high service quality and maintained customer satisfaction. The integration of Burroughs into our U.S. operations and our Loomis culture is progressing as expected, and we are still early in the integration process. Burroughs is a strong strategic fit, and it allows us to provide a fully integrated ATM and Automated Solutions service offering to our customers.

We are actually working on stabilizing the revenue and on improving our service quality. Once this is achieved, we will shift our efforts to improving operational efficiency and over time, focus on gaining market share. The volume growth, combined with improved efficiency contributed to the improvement of operating margin. The operating margin surpassed 17%, which is a new record for us.

Let's turn to the next page and talk about SME/Pay. Revenues in the SME/Pay segment increased to SEK 71 million in the quarter. Nearly 40% of this revenue now comes from core and adjacent business lines, demonstrating that our strategic focus on SMEs is delivering both growth and margin. The reduction in the operating loss compared to the previous year is in line with the strategic priorities for the segment. Transaction volumes within the Loomis Pay business line increased 24% in the quarter compared to the previous year and reached SEK 2.3 billion.

The migration to new POS platforms allows Loomis Pay to focus on larger SME customers in additional customer verticals. In this process, Loomis Pay has chosen to not migrate nonprofitable customers, which somewhat impacts settled transaction volumes going forward.

Let's now move to the next slide, where I'll share a few updates on our sustainability progress. I'm pleased to share that we are progressing well towards our strategic sustainability targets. We have reduced our recordable work-related injury rate by 10% in 2025 compared to 2024. While this is in line with our target, we have never done and will continue our efforts to keep our employees safe. The Board has adopted a new group operational health and safety policy. This program will be rolled out during 2026, strengthening our group-wide focus on employee safety.

Compared to 2024, we have reduced our Scope 1 and 2 emissions by 4%, if we exclude the emissions from the acquisitions of Burroughs and Kipfer-Logistik. Including these, we reduced emissions by about 2%. Continuing to grow the business while reducing emissions is, of course, challenging, but something we are committed to. And we, of course, aim to do so in a cost-efficient way that also supports our business. Efforts are already ongoing to include Burroughs in a carbon reduction plan by renewing their vehicle fleet. To put this in perspective to our CO2 targets, with the restated baseline for acquisitions, we have reduced our emissions by close to 26% compared to 2019, which is a step in the right direction to reaching 34% reduction by 2027.

Now let's turn to the income statement slide, where I'll begin by noting that despite a significant negative impact from exchange rate fluctuations, we have achieved strong currency adjusted growth. This quarter includes costs classified as items affecting comparability, primarily related to the communicated impairment of goodwill as well as provisions for the ongoing legal case in Denmark. The impairment also had an impact on the effective tax rate since this was largely nontax deductible.

For 2026, you can expect an effective tax rate of about 30%. Our financial net has declined compared to the previous year, following lower financial expenses driven by declining interest rates. I would also like to highlight that also our net debt-to-EBITDA ratio has declined year-over-year and is well below our ambition to be below 2x.

Now let's move on to the next slide, where I'll summarize our 2025 performance in relation to our history. As we can see, we have a stable and resilient business model that continues to deliver. We ended 2025 with a record high operating margin of 12.7%. Despite the significant currency headwinds, we maintained the level of SEK 30 billion in 2025. Our currency adjusted growth was 6%, fully in line with our financial targets for the strategic period. If the exchange rates had been at the 2024 levels, our revenue would have been above SEK 32 billion for the year.

2025 was the beginning of a new strategic period for us. It has been a year characterized by macroeconomic uncertainties, a heightened emphasis on societal resilience and an increase in demand for security services amid a shifting and volatile global geopolitical landscape. In this environment, we made significant progress against our strategic priorities and delivered on our commitments, positioning the group well for the remainder of 2025-2027 period.

Before opening up for Q&A, I want to remind you of what we have committed to last year at our Capital Markets Day and what we have achieved after the first year of the strategic period. Here, you see our 4 strategic priorities for '25 to '27, and I want to share my perspective on where we stand in relation to where we said we would be.

Starting with growing in our established markets, a clear focus here is to accelerate growth within the SME customer segment. We are seeing healthy revenue momentum and solid margin contribution from SMEs across our key markets. We have also seen strong performance within International and Automated Solutions. However, as you know, we have been managing the impact of ATM business losses and are in the process of restructuring certain markets in Europe.

Cash infrastructure is increasingly being called out as being an important piece in crisis preparedness and societal resilience, and we are a key part in keeping cash flows functioning in society. At the same time, we keep diversifying and our noncash-related services keep growing as well. In this environment, we have adapted and grown our addressable market within precious metals by opening new geographical lanes and expanded our storage capacity. While we have some more to do over the next couple of years, I'm confident about our journey.

Moving to the second pillar. We have been very active in M&A during the year. Within core, we have acquired expertise and capacity within temperature-controlled logistics for pharmaceuticals as well as acquired a new storage facility in Toronto. Within adjacent, we have expanded into first and second-line maintenance of ATMs and Automated Solutions. And lastly, we have strengthened our digital offer on the POS side in Spain. We will continue to focus on generating both geographical presence but also diversifying our product and service portfolio through value-creating acquisitions.

Our margin expansion is a clear demonstration of our progress within the third pillar, driving operational excellence and scalability. Our restructuring initiatives in Europe and Latin America are showing results, and we've been seeing clear margin improvements over recent quarters. In the U.S., the staffing planning measures and efficiency programs within CIT and CMS that were implemented since last year have consistently contributed to our profitability.

And lastly, as I already touched upon earlier, we are advancing on our sustainability initiatives. We are dedicated to focus our efforts on where we have the most impact and where it also makes sense from a business perspective. We have submitted climate reduction targets to the science-based targets initiative for validation, taking a clear step towards focusing on reducing our Scope 3 emissions.

This concludes my summary of the quarter and the year. Operator, we are now ready for questions.

[Operator Instructions] We have a question from Simon Jonsson, ABG.

I hope you can hear me. A few questions from my side. First, on the International business, I think, obviously, it was one of the positive surprises on the report. Taking a step back, you have been clear before that comps will become tougher. And you also said before that some of these volumes should be viewed as temporary or short-term oriented. Of course, a lot has changed here in the recent months regarding the precious metals prices and so on.

But my question is, where do you think we stand now from a broader perspective for your business? And do you think the long-term market dynamics have changed in any way? And I mean, what should we expect here in the coming quarters? Was there -- you said it before that we should view it as temporary, but I mean, was it even more temporary this quarter? Or yes, can you say anything about that?

Simon, thank you for your question. First of all, as you said, we need to understand that these businesses are cyclical in nature. But it is true that we have worked on growing our addressable market, as I said before, within the VIT. We have diversified our portfolio, expanding into the pharmaceutical. And we still have other areas like mining, let's say diamond and jewelry, low-value packages.

When it comes to the trend, we were saying that we had difficult comps because we had a big increase last year in fourth quarter due to the U.S. tariffs. But the shipments, especially of silver have remained strong. And then both the prices of gold and silver have increased, and that benefits us. How do we see this trend is difficult to say, but we think it will remain very similar during the first quarter, first 2 quarters. And then I don't have a view on how it will end up the year. But we will keep increasing and try to grow the business organically.

Got it. And then moving on to other business areas. I mean, Automated Solutions also remains a very good growth driver, remain at good levels here. It looks like the growth is mainly coming from the U.S., but also from a broader perspective, can you maybe give us an update about the market for Automated Solutions mainly, I think, smart safes, for example, which you comment about on the CMD, for example. So maybe an update on what's going on in the market for -- in the U.S. specifically on smart safes. And do you think you're growing in line with the market? Or do you think you're taking market shares, or yes?

Here, it varies, as you said, when you look at the different regions. So I would say the first thing is we still have a strong pipeline in Automated Solutions in both regions. I would say that we have been growing -- gaining market share in both regions as well as in the U.S. and in Europe.

In Europe, although we started the year a bit slower, I think the last -- the second half of the year has been really good when it comes to Automated Solutions. At the same time, we've taken advantage of the acquisition that we did with CIMA. CIMA is now our main supplier, not just in Europe, but also we're also exporting safes and recyclers and front office machines to the U.S. where we plan on growing.

And that's what we said at the Capital Markets Day, Simon. I mean it's not only smart safes. We're talking about recyclers. We're talking about front office machines. We're talking about kiosks. So everywhere where we could add the cash component to the digital or the technology-driven solutions, we will be there. And as I said before, in the U.S., it's been 16 consecutive quarters growing at double-digit growth. As I said, we still have a strong pipeline, and that will remain strong in the following year.

All right. Do you think it makes sense to assume that you expect double-digit growth to continue then?

We will continue being strong, yes.

All right. But your view is that the underlying market is growing double digits?

Yes.

Yes. Moving on to maybe my last question here on capital allocation or a two-part question basically. You didn't announce any buybacks. I know sometimes you don't do it on every quarter, but I mean, it can be obvious reasons for it. But can you say anything on the buybacks and why you don't announce the program here? Or how should we view it? So yes, maybe start there.

Yes. To summarize, let me tell you that our capital allocation priorities remain exactly the same. Our aim is to use our capital in the best way to generate return and to maximize distribution to shareholders. That has not changed. So we will continue maximizing distribution to shareholders. That's what I would say.

Yes. All right. Do you think it's fair to say that you're also balancing the buybacks with -- now you have extra dividend. So should we keep that in mind that you are viewing it as a total pool of capital return?

Share buybacks are always in our mind, and we will continue doing share buybacks in the future.

Yes. All right. And then lastly on acquisitions. I think you made it clear that you will continue to look for value accretive acquisitions. But can you say anything about what is going on with the pipeline right now? Do you think it's -- is the pipeline building? Are you changing any sort of areas you're prioritizing? Have you made further shifts into how -- into what you look for, for example, do you look more into international areas to broaden that business? Or yes, where are you currently looking? And where do you think the M&A pipeline is more tilted towards?

So the M&A pipeline remains the same. It's a strong pipeline. We have not shifted. I mean when we presented our strategy at the Capital Markets Day, we did talk about not only investing in CIT, CMS, we were looking into the VIT and VMS areas as well, and we've proven to do that with the facility that we acquired in Toronto and the pharmaceutical business company as well. And we have those in our pipeline as well. So we haven't made a shift, the pipeline remains the same and our strategy remains the same as what we communicated. And it's both cash and noncash companies that we're looking into.

And then as I always tell you, I mean, it all depends on meeting the seller expectations when it comes to price because obviously, we want these acquisitions to be accretive to us. But no major shift. And yes, we're focused on the International business as well.

All right. And in terms of price development, what have you seen here in recent quarters or in 2025 in general, what did you see in terms of shifts?

I think it's pretty stable. I mean I talked about in the past that before COVID, everybody had very high expectations. Then after COVID, those have come down. As I told you, we need to meet the seller and us regarding the price, and prices are more or less stable. That has not changed either.

If you look into international, for example, obviously, with such a strong quarters in international business companies, the price is higher, obviously. But due to that it's cyclical, we need to do the right analysis.

[Operator Instructions] Mr. Larrea, there are no more questions registered at this time. I would like to turn the conference back over to you for any closing remarks. Thank you.

Thank you very much all for listening in. And please reach out if you have any follow-up questions. Thank you. Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the Third Quarter 2025 Conference Call. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Aritz Larrea, President and CEO.

Thank you very much. Good morning, everyone, and welcome to the third quarter presentation for Loomis. My name is Aritz Larrea, and I'm the CEO of Loomis. And with me here today, I have our CFO, Johan Wilsby; and Jenny Boström, our Head of Sustainability and Investor Relations.

I'll start by providing a quick summary of our third quarter performance before taking questions. Let's start the presentation by turning to Slide #2. We delivered a solid and positive performance in the third quarter with revenues reaching SEK 7.6 billion and currency-adjusted growth of 7.1%. Despite the expected decline in our ATM business, the group achieved a strong organic growth of 3.9%. This was also the first quarter to include the full results of Burroughs, which made a meaningful contribution to our overall growth and further strengthened our position in the U.S. market.

Our efficiency initiatives continue to deliver strong results with the operating margin rising to 13.2%, up from 12.9% last year. We've successfully grown the business without increasing our headcount, further driving margin improvement and demonstrating the impact of our ongoing operational discipline. We delivered another quarter of strong operating cash flow with a rolling 12-month cash conversion of 95%. This robust cash generation enables us to continue investing in the business while also delivering attractive return to our shareholders.

Our commitment to optimize capital allocation to drive returns is also reflected in the increased return on capital employed, which was above 16% in the quarter. While we have been active in M&A, invested in our business and continued our share repurchase program, our net debt-to-EBITDA ratio has improved compared to the second quarter. During the third quarter, we completed 4 acquisitions and signed an agreement for a fifth one. I will address each later on in the presentation. As announced yesterday, the Board has also approved a new share repurchase program of SEK 200 million for the fourth quarter.

Let's now turn to our reporting segments, starting with Europe and Latin America. Our European and Latin America segment delivered a solid performance in the quarter with revenues reaching close to SEK 3.7 billion, and the organic growth was 2.3%. We have seen a different mix of performance across our business lines during the quarter. While we continue to experience strong demand for our cross-border valuables transportation and storage solutions within the international business line and the Automated Solutions business delivered solid results, the ATM business declined due to previously announced losses in Sweden and France.

In addition, there was a negative impact due to the ATM consolidation market in the U.K. While these developments have led to short-term volume headwinds, we expect the long-term industry trends to continue to favor specialized providers. In addition, revenue in Europe was also affected by the ongoing restructuring activities in Germany, where we continue to discontinue unprofitable contracts as part of our efforts to strengthen profitability. These developments have temporarily affected growth in the region, but our initiatives are consistent with our strategy to focus on efficiency, scalability and long-term profitability.

We can also see that the restructuring initiatives implemented in recent quarters are having a positive effect on profitability, while with the operating margin increasing to 12.9% versus 12.4% in prior year. In September, we completed the acquisition of Kipfer-Logistik announced in July. Kipfer-Logistik is a leading pharmaceutical logistics provider based in Switzerland, and this acquisition significantly accelerates the growth of Loomis Pharma.

By integrating a well-established company specialized in high-security, temperature-controlled road freight, we are further strengthening our international business line, where Loomis already provides cross-border, high-security logistics for banknotes, precious metals and jewels, including customs clearance. With our long-standing expertise in Secure Logistics, we continue to explore opportunities to expand and enhance our services in this area.

Let's turn to the next page and talk about the performance in the U.S. The U.S. segment delivered another strong quarter. If we adjust for currency impacts, which was negative 9%, the U.S. achieved record high revenues and operating profit. Organic growth was 5.4% and the acquisition of Burroughs contributed to the overall growth. The International and Automated Solutions lines of business had notably strong performance in the quarter. Our implemented staffing planning measures have enabled a more efficient way of working, allowing us to grow the business without adding employees.

At the same time, we have secured a high service quality and maintained customer satisfaction. The volume growth, combined with improved efficiency contributed to the improvement of operating margin. The operating margin increased to 16.3%, up from 16.1% in prior year. This is the first full quarter with Burroughs, and we continue working on integrating their business into our U.S. operations and our Loomis culture. We are still early in the integration process, but while the business is adjacent to our existing operations, it represents a new line of work for us, one that is highly technology-driven and involves technical service teams we previously did not manage.

We are seeing great progress and are already observing how it complements our current business. Burroughs is a strong strategic fit as it allows us to provide a fully integrated ATM and automated solutions service offering to our customers. In August, we acquired Keys Armored Express, a CIT service provider operating in the Florida Keys area. We've also signed an agreement to acquire Precious Metals Vault and storage facility in Toronto. This acquisition will strengthen our local presence in Canada and increase our depository service and storage capacity within the international business line.

Let's turn to the next page and talk about SME Pay. Revenues in the SME Pay segment increased to SEK 65 million in the quarter. Nearly 40% of this revenue now comes from new small- and medium-sized customers, demonstrating that our strategic focus on SMEs is delivering both growth and margin. We're also making strong progress on the digital side. Loomis Pay continues to scale, broadening our payments offering and strengthening customer loyalty. Transaction volumes through our payment gateway surpassed SEK 2.5 billion in the quarter, representing a 23% increase compared to last year.

In addition, in July, we took an important step in Spain with the acquisition of 2 POS companies in Catalonia. This significantly strengthens Loomis Pay presence in the region, enhances our POS capabilities and expands our customer base among SMEs.

Let's now move to the next slide, where I'll share a few updates on our sustainability progress. This quarter, we adopted 2 new sustainability policies, an environmental policy and a human rights policy, further reinforcing our commitment in these critical areas. Our environmental policy includes our emissions reductions targets to 2030 with the actions being taken to reach these. The key focus here remains on reducing emissions from our vehicle fleet.

For the first 9 months, we have reduced our Scope 1 and 2 emissions by approximately 2% compared to prior year. I want to highlight that the increase you can see in emissions in the graph here compared to the second quarter is largely related to the acquisition of Burroughs. Initiatives are ongoing to align Burroughs to our carbon emissions reduction plan. Continuing to decrease emissions while growing the business is, of course, challenging, especially due to difficulties with charging infrastructure for an electrified fleet, but something that we are fully committed to.

As a global employer with an important role in society, it is crucial to uphold fundamental human rights across our operations and value chain. Our new human rights policy reinforces our dedication to safeguarding the rights of our workers and how we intend to uphold our efforts in addressing actual and potential human rights.

Now let's turn to the income statement slide, where I'll begin by noting that despite a significant negative impact from exchange rate fluctuations, we achieved a strong currency adjusted growth. This quarter includes costs classified as items affecting comparability, primarily related to the ongoing restructuring efforts in Europe and Latin America. Our financial net has declined compared to previous years, following lower financial expenses, driven by declining interest rates.

I would also like to highlight that the effective tax rate has gone up to 30% for year-to-date 2025 due to changes in our assumptions for deferred tax assets. This year-to-date adjustment impacts the effective rate in the quarter. Additionally, the tax rate in 2024 was also lower due to the U.S. green tax credits, which have now been removed. For the full year, we expect an effective tax rate of about 30%. Despite the considerable currency headwinds and higher effective taxes, earnings per share rose to SEK 7.83 per share.

I would also like to highlight that also our net debt-to-EBITDA ratio is about the same level as prior year, and we also see an improvement compared to the second quarter, even after several M&A and continued share repurchases.

Now let's move on to the next slide, where I'll provide a longer-term view of our performance. As we can see, we have a stable and resilient business model that continues to deliver. We delivered a strong third quarter, and I'm confident in our journey ahead. Our restructuring initiatives in Europe and Latin America are showing results, and we've seen clear margin improvements over recent quarters.

On a rolling 12-month basis, we generated over SEK 30 billion in revenue and reached an operating margin of 12.6%. Currency adjusted growth was 6.1%, fully in line with our financial targets for the strategic period. The major focus in this strategy is accelerating growth within the SME customer segment. This is already contributing to our performance. We have seen healthy revenue momentum and solid margin contribution from SMEs across all our key markets.

As we look ahead, it's important to recognize that we are up against a very strong fourth quarter last year, which benefited from favorable movements with U.S. tariff uncertainties. We're also managing the impact from ATM business losses in Sweden and the consolidation of ATM networks in France, both impacting our European operations.

In addition, there's a negative impact due to ATM market consolidation in the U.K. compared to Q4 last year. That said, we still see solid opportunities for organic growth, both with our actual customers as well as with SMEs. And as we outlined at our Capital Markets Day, value-creating M&A will continue to be a key lever in our strategy going forward.

This concludes my summary of the quarter. Operator, we are now ready for questions.

[Operator Instructions]

Our first question comes from Simon Jönsson with ABG.

I want to start off with the M&A track. I think it's nice to see that you are more active again as you have been talking about, of course. And I wonder specifically about Burroughs, you mentioned it a bit, and you have had some time now to digest it. So my question is what you're seeing in terms of the turnaround on margins in Burroughs, if that is something that you have already started to see a positive impact on? I mean, the margins in the U.S. were quite good despite the full integration of Burroughs. So I guess I wonder if you have seen any margin impact already in Burroughs.

Thanks for the question, Simon. I would say that it's still early stages with Burroughs, but our immediate focus is just on resolving some existing quality issues to ensure service excellence. Once this is achieved, we will shift our efforts to improving operational efficiency and margins, with the objective of making the business margin accretive over time as we promised when we announced the acquisition.

All right. So I'm guessing that it's fair to assume that it remains quite margin dilutive here as of right now, at least.

You're right, yes.

Then I wonder about the SME Pay segment, just specifically on the organic growth acceleration we saw here in Q3. If there are like any specifics you could point to here, like bigger customers or something that drove the organic growth acceleration Q3?

So as we explained at the Capital Market Day, we've been always focused on big retailers and big banks. SME was never our focus. And we shifted that, and that has been a shift that our sales teams have made. And we've seen an important progress there. And consider that Q3 also has the seasonality, the normal seasonality that we have in Europe, but it was a great quarter from that perspective, and we expect the following quarters to continue the same way.

All right. Great. Then lastly, maybe a bit more general reflections, but on Latin America and maybe specifically on Argentina, I mean, it continues to look like the business environment is improving, more politically stable and so forth. So do you have any general reflections right now, what's going on? And if that's positive or negative for you?

I think, I mean, when you look at Argentina, it's really small when you look at our group. But I think that progress has been made there from the country side. We keep investing there, and we're looking into growing in that market as well inorganically. So it keeps being an interest market for us.

Our next question comes from Dan Johansson from SEB.

A couple from my side. Maybe firstly, I was curious to hear how we should think about the revenue mix right now. I noticed you continue to have very good momentum in both Automated Solutions and also international, which is, of course, good for margins and CIT is down like 5% or so versus last year. And I mean, long term, your mix shift will, of course, continue, but it would be interesting to hear how you think about business mix more near term for coming quarters. Do you see sort of a near-term recovery in CIT? Or should we expect these trends to continue and revenue mix to continue to be supportive ahead here?

Yes. Thanks for the question. And my first comment there would be, I was surprised on your comment around CIT because we should look at the business lines currency adjusted, and I don't see that decrease happening in CIT. Looking forward, as I said in the call, I mean, we're facing -- we're up against a very strong fourth quarter that we had last year. We had the favorability of the U.S. tariffs uncertainty there. And we are having a negative impact on the ATM business due to the losses in Sweden, France and the U.K., and that will impact our European operations. But we keep working on finding alternatives. And as you've seen, for example, our international business, despite the slowdown due to tariff uncertainty, the business has also keep growing. So we keep looking at other revenue streams as well.

Yes. Fair point on the currency effect there. But also interesting on international. I mean, as you say, is the performance and the momentum in international sort of even throughout the quarter? Was there any notable difference in growth rate July versus September and beginning of October? I mean, before it was tariffs, but now it seems to be other factors driving the performance. So a little bit of momentum throughout the quarter. And also, is there anything in particular driving the very strong performance you have in international still now?

I mean the front of thing we have with international, Dan, is that it's not a recurring business. So we can't see it as we see our domestic business there. We do expect the international business line to slow down a little bit versus what we've had in Q3. But again, as I told you, we're looking into how can we keep growing this business and keep expanding as we did with pharma, keep expanding to other verticals and other areas of interest as well.

Yes. Makes sense. Interesting to follow. And maybe a final one, just a small comment there on the ATM market consolidation in the U.K., just so I get it right there. Did you experience an impact already this quarter? Is that more gradually ahead as we move into Q4 and further on here?

Sorry, I didn't catch that question. Can you repeat again, please, Dan?

No, it was just -- did you see the ATM slowdown in U.K. already this quarter? Did it impact the numbers in Q3? Or is that more for Q4 and going forward here?

Yes. You should expect more or less the same trend, rather trend in Q4 and first half of next year.

The next question comes from Viktor Lindeberg with DNB.

Maybe following up on Dan's question on U.K. as a start. And can you quantify the amount of the contract or contracts that you've lost so we can pin down the magnitude of this?

We don't disclose those numbers, Viktor.

Okay. But it's fair to say that it was already in the full quarter of Q3?

It has been -- yes, it's been in the whole Q3 quarter. That's correct.

Okay. You mentioned the tax rate, and it's come up to about 30%, and you guide for that for the full year as well. Is that a good ballpark proxy going into next year as well?

Yes, I would say so for now.

And on the tax rate from a cash tax perspective, the cash tax has come up quite a lot this year. Are there any one-off items, if you will, in that amount? Or should we pencil in similar, call it, cash tax rates going into next year as well, do you think?

No, that's going to come down because we had a delay of U.S. tax payments from '24 that came into '25. So they are artificially large this year. And that piece will wash out when you get into '26.

Super. That's very helpful. Two final points. One very small on your Loomis Pay and SME. I noted you have about SEK 9 million of revenue now in automated solutions in this segment, and that's quite an astonishing number for the small size of that segment. But curious to understand, is this Automated Solutions revenue a product sale similar to CIMA? Or is it actually more installed base type of revenue, more recurring in that sense?

No, it's exactly the same. The only thing is that when you look at CIMA, you have a huge portfolio of solutions, and we're talking about a smaller range of solutions.

Yes, that was my question. So if it is more the actual product installed generating SEK 9 million in the quarter and then in that sense that we maybe can expect SEK 9 million also in the coming quarters or if it's more product sales?

Additional product sales and recurring revenues.

Okay. Super. Final question on the U.S. and automated solutions growth accelerated quite dramatically. And my numbers tell me 31% in organic terms. But that begs the question, if you have added revenues from Burroughs or something else into that segment?

Yes, you have revenue coming from Burroughs as well.

All right. So can you give us an indication on the underlying SafePoint or Automated Solutions organic trend? Is it similar to what we have seen in the mid-teens or so? Or has it started to deviate?

I think you're right that it's more or less same.

[Operator Instructions]

There are no more questions at this time. I would now like to turn the conference back over to Mr. Larrea for any closing remarks.

Thank you very much all for listening in. Please reach out if you have any follow-up questions. Thank you. Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect.

Ladies and gentlemen, welcome to the Loomis Second Quarter 2025 Report Conference Call. I'm [ Jota, ] the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Aritz Larrea, President and CEO. Please go ahead.

Thank you very much. Good morning, everyone, and welcome to the second quarter presentation for Loomis. My name is Aritz Larrea, and I'm the CEO of Loomis. And with me here today, I have our CFO, Johan Wilsby; and Jenny Bostrom, our Head of Sustainability and Investor Relations.

I'll start by providing a quick summary of our second quarter performance before taking questions. Let's start the presentation by turning to Slide #2. We delivered a solid performance in the second quarter with revenues reaching SEK 7.4 billion and organic growth of 3.8%. Acquisitions supported growth, while a stronger Swedish krona had a notable negative impact across all segments. Adjusted for currency effects, growth was close to 5%. The favorable business mix and improved efficiency led to an operating margin of 12.7%, up from 11.6% last year, making our highest second quarter margin to date.

We've grown the business while reducing headcount, contributing to this margin improvement. Quarterly cash flow was affected by timing and working capital movements. However, on a rolling 12-month basis, cash conversion exceeded 100%. We encourage you to focus on the rolling figures for a clear review unaffected by quarterly volatility. Our strong cash flow continues to support both investment in the business and shareholder returns. Despite the acquisition of Burroughs, a record high dividend payout and share repurchases during the quarter, our net debt-to-EBITDA ratio improved year-over-year. Our capital allocation priorities remain unchanged. We keep committed to deploying capital to maximize returns. As announced yesterday, the Board has approved a new share repurchase program of SEK 200 million for the third quarter.

Let's now turn to our reporting segments, starting with Europe and Latin America. Our European and Latin America segment delivered a solid performance in the quarter with revenues reaching SEK 3.6 billion. Despite a significant negative currency impact of 5.5%, organic growth exceeded 4%. We saw strong results in several key markets, and we keep addressing performance in those currently under review. During the quarter, we saw continued strong demand for our cross-border valuable transportation and storage solutions within the international business line. At the same time, revenue in our CIT and CMS segment was affected by fewer working days. These developments further reinforce our strategic focus on growing our adjacent business lines.

Restructuring efforts are progressing as we continue to optimize our operations across Europe and Latin America. These initiatives are driving improved profitability and enabling us to grow while reducing our workforce. Since the second quarter of 2024, we've reduced headcount in the region by approximately 600 employees. Our operating margin increased to 12.3%, our highest second quarter margin for this segment to date.

Yesterday, we signed an agreement to acquire Kipfer-Logistik, a leading pharmaceutical logistics provider based in Switzerland. Since 2024, Loomis has operated in this space on a smaller scale under the Loomis Pharma brand. This acquisition significantly accelerates the growth of Loomis Pharma by integrating a well-established company specializing in high-security temperature-controlled road freight. Together, we will offer a broader range of services to customers and further strengthen our market position. This is a natural extension of our international business line, where we already manage cross-border, high-security logistics for banknotes, precious metals and jewels, including customs clearance.

Let's now turn to the page to our performance in the United States. The U.S. segment delivered another strong quarter. If we adjust for the currency impact, which was negative 10%, the U.S. achieved record high revenues and operating profit. Organic growth was 4.2%, and the acquisition of Burroughs contributed positively to the overall growth. Notably, automated solutions delivered another quarter of double-digit organic growth.

Our implemented staffing planning measures have enabled a more efficient way of working, allowing us to grow the business while reducing the number of employees. At the same time, we have secured high service quality and maintain customer satisfaction. The volume growth in automated solutions and international business lines, combined with improved efficiency contributed to the operating margin improvement. The operating margin increased to 16.4%, up from 15.2% in prior year.

Let's turn to the next page and talk about the SME/Pay segment. Revenue for the quarter reached SEK 43 million, reflecting strong growth driven by higher transaction volumes in the Loomis Pay business line compared to the second quarter of 2024. Operating income also improved year-over-year. While we're still in the early stages, digital payments account for the majority of revenue within the SME Pay segment. That said, I remain confident that our cash-related offerings will also contribute to future growth as we continue developing our bundled solutions.

Following the end of the quarter, we acquired 2 point-of-sale companies in Spain, Central Cash and Sighore. These acquisitions significantly strengthened Loomis Pay's presence in the Catalonia region, enhance our POS capabilities and expand our customer base.

Let's now move to the next slide, where I will share a few updates on the progress we've made in sustainability. Our sustainability initiatives continue to progress well. A key focus remains on reducing emissions from our vehicle fleet, and we saw a continued year-over-year decline in emissions this quarter. In May, we announced an agreement with British Petroleum for the supply of BT Bioenergy HVO. By the end of 2030, we aim to use approximately 10 million liters of this biofuel across 10 European countries. This solution will significantly reduce the carbon footprint of our European transport operations without requiring replacement of our existing armored vehicle fleet.

As I've emphasized before, ensuring the health and safety of our employees is one of our highest priorities. I'm pleased to report that workplace injuries continue to decline, supported by our safety awareness campaigns and targeted training initiatives. Additionally, the Board of Directors has adopted 2 new sustainability policies, an environmental policy and a human rights policy, further reinforcing our commitment in these critical areas.

Let's turn now to the income statement slide, where I'll begin by noting that despite the significant negative impact from exchange rate fluctuations, we achieved strong currency adjusted growth in the context of the current macroeconomic environment. This quarter includes costs classified as items affecting comparability, primarily related to the ongoing restructuring efforts in Europe and Latin America as well as net positive effects from M&A activities. Our financial net declined slightly compared to the previous year, mainly due to lower financial expenses driven by declining interest rates. Despite the considerable currency headwinds, earnings per share rose to about SEK 7 per share.

As mentioned earlier, our net debt-to-EBITDA ratio improved even after paying a record high dividend, continuing share repurchases and completing the acquisition of Burroughs during the quarter.

Now let's move on to the next slide, where I will provide a longer-term view of our performance. As we can see, we have a stable and resilient business model that has proven its strength over time. On a rolling 12-month basis, we generated over SEK 30 billion in revenue and achieved an operating margin of 12.5%. Our currency adjusted growth was 6.3% on a rolling 12-month basis, and we are thus in line with both our financial targets for the strategic period.

We had a very strong second quarter, and I'm confident about our journey ahead. We have already started to see the impact of our restructuring initiatives in Europe and Latin America, and I'm pleased to see our margin improvements over the recent quarters. Looking ahead, we will continue to add to our growth by prioritizing value-creating acquisitions and taking a structured approach to gain further operational efficiencies.

With that, I'm done with my summary of the second quarter. So let's turn to Q&A. Operator, please, we are now open to questions.

[Operator Instructions] The first question comes from the line of Simon Jönsson with ABG Sundal Collier.

First of all, on the margins, you increased the margins in both U.S. and Europe, which was very nice to see, of course. And in the U.S., it seems to be the same story, more efficient, better sales mix, et cetera. In Europe, it has been a bit more back and forth. So how should we view that or the gains here? Is there any kind of effect from you saving ahead of volume losses down the road in France or Sweden, for example? Or can you maybe share a bit more specifically on where you have seen improvements and what we can expect from that coming quarters as well?

As you stated, I mean, the U.S., it looks like the same story. It is the same story with the same trend. And when we look at the European margins, you do need to consider that the third quarter has always been the strongest quarter for the Europe-LatAm segment due to seasonality. Now the increases that we've seen in the international business line, which we consider margin accretive, moves with a different seasonal pattern. We are seeing the benefits already of the restructuring and the efficiency initiatives. But remember that we have, as you were stating, ATM losses, both in Sweden and France, which will both have an impact on organic growth and the operating margin in the remaining of 2025.

All right. Got it. And then on the cash flow, which was a bit weaker, but you said that LTM is a better way to track it. Does that mean that you think the current LTM conversion is at the level we should expect going forward? Or was there still any kind of one-off in the working capital here in Q2, you think?

Ladies and gentlemen, please hold the line. We have lost connection with the speaker line. We will resume the call shortly. Just a second please. Ladies and gentlemen, the speaker line back with. Give me a few seconds to resume our question and answer session. Just a second, please. Mr. Jönsson, your line is on. You can repeat your question, please.

Yes. So on the cash flow, you said that LTM is a better way to look at it because it was a bit weaker in Q2. So does that mean that you think the LTM conversion is at the level we should expect going forward as well? Or was there still any kind of one-offs in working capital here in Q2, you think?

Simon, this is Johan. Sorry about the mishap here around charging of the device. But I mean, Q2 was impacted mainly around working capital driven by timing effects and higher inventories due to tariffs. But to your question, you should really think about the R12. And we're not going to change our guidance that we gave at the Capital Markets Day, where we said we see this over time being at over 90% and consider that as our guidance, although we're a bit higher than that right now on an R12 basis.

Okay. Makes sense. Then just lastly for me here on M&A. And yes, I think the new acquisition, the pharma acquisition is quite interesting. Can you maybe share a little bit more on margin profile, multiples paid for these kind of companies and also more generally, what you think about that market segment?

So I'll talk more about the rationale of the acquisition, Simon here. So we have -- with this acquisition, we have the great opportunity of accelerating the development of Loomis Pharma, which we started growing organically. It's a well-established Swiss-based logistics company. We can strengthen the value proposition by further expanding their geographical reach across our footprint and network. And as we stated at the Capital Markets Day, I mean, we have the possibility of enhancing Kipfer's service offerings also to its existing customers by adding Loomis capabilities when it comes to air freight and customer clearance as well.

So we also have the opportunity of accessing to supplementary services for road transport as well. But definitely, it's one of the things that we spoke at the Capital Markets Day. We've always been talking about expanding CIT and CMS into adjacent services. We're doing the same here within the international business, looking into this pharma that we started, as I said, organically, but the idea is to accelerate the growth.

All right. So does it mean that you -- with this, you -- we should expect that you could maybe expand this business into more countries? Or is that reasonable to think.

Not only that, Simon. I mean, we will expand this to other countries. But at the same time, we will keep looking at other areas within the high-security valuables transportation. Pharma is just one example, but there are other areas as well, and we will keep exploring those.

The next question comes from the line of Harshita Bhatter with Goldman Sachs.

This is Harshita from Goldman Sachs on behalf of Suhasini Varanasi. We had a couple of questions, please. So first one on the cross-border valuables transportation and storage solutions. Can you share more details on how much benefit has that seen on growth and margins?

As you all know, and we've commented before, we've seen signs that the underlying business is better than prior year, but we also need to consider that all the speculations around tariffs have had a positive impact in the business, but that this impact has flattened down in the later part of the second quarter, also in July. I think that going forward, we don't expect any more impact from these tariffs coming. And -- but we do have a stable business when it comes to the storage part, especially in the U.S. with our new facility there. So we don't have the visibility we have in the recurring business as we could talk about CIT and CMS, but we're highly confident that the business will keep on giving us some margin accretiveness as well.

Got it. And the second one was just a follow-up on the Europe and LatAm margins. Should we expect further benefits from restructuring to come through in the second half?

As I mentioned before, I mean, consider -- of course, we should continue seeing the benefits from the restructuring that we have done in the second half. But we also have -- on the other side, we also have certainties that could impact like the loss of the ATM business in Sweden and in France. So we need to...

[Operator Instructions] Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Aritz Larrea for any closing remarks.

Thank you very much for listening in. I wish you all a great summer vacation, but please reach out if you have any follow-up questions. Thank you. Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines.