Published on April 26, 2019 at 8:01 AM CET.
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Gunnebo’s business is to a large extent project-driven where order intake and sales fluctuate between quarters. Therefore we will also disclose the order intake per Business Unit as of Q1 2019.
The first quarter of 2019 showed a strong order intake for the Group with year-on-year growth of 12% (7% in constant currencies). Entrance Control and Safe Storage reported double-digit growth of 27% and 16% respectively. Cash Management and Integrated Security reported a positive development on order intake.
Sales for the Group were up 4% compared to Q1 2018 (flat in constant currencies). In Safe Storage, sales grew by 16% year-on-year (10% in constant currencies). Cash Management sales had a slight increase of 2% (-3% in constant currencies) and sales in Entrance Control contracted by 4% year-on-year (-9% in constant currencies) due to a large order delivered in Q1 last year. With the strong order intake, sales will however recover in the coming quarters. We have grown our sales two years in a row in both Cash Management and Entrance Control and we believe we are better structured today to capture growth in the market. In Integrated Security, sales contracted by 3% year-on-year (-4% in constant currencies) but with improved profitability.
In the quarter, Gunnebo has continued to implement the strategy aiming at simplifying the Group’s structure and focus by product offering through the four Business Units Safe Storage, Cash Management, Entrance Control and Integrated Security. We started working in the new structure in Q2 2018, and I am pleased to see an increase in customer interactions and clarifications of go-to-market models gradually coming through in the different Business Units.
As part of this strategy we are also investing in strengthening our brand positioning in the market. In the quarter we launched an updated web presence and successfully participated in four important exhibitions: EuroCIS in Germany, NRF in the US, Passenger Terminal Expo in the UK and Intersec in Dubai. In Integrated Security we launched a new Electronic Article Surveillance technology which allows larger stores to operate up to 100 antennas without disturbances and we continued the commercialisation of the retail digitisation solution, Gunnebo Retail Solutions.
The Group’s overall EBITA margin was 3.9% which was lower than last year. The lower margin is mainly explained by not yet seen improvements from ongoing cost saving activities and by underabsorption in Entrance Control and Cash Management due to the slow sales development in the quarter. In Integrated Security our EBITA improved despite lower sales which is encouraging.
In summary, we see increased activity in our overall customer interaction across Business Units, we are increasing our brand positioning activities and, while undergoing the change into Business Units, we are also identifying areas of efficiency improvements. The management team and I remain convinced that the company is on the right track towards sustainable profitable growth.
Henrik Lange, President and CEO