Results

Gunnebo Group – Q3 Report 2019

Published on November 6, 2019 at 8:01 AM CET.

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All-time high order intake and strong sales from Entrance Control boosts Group growth in the quarter

Performance for the Quarter

I am very satisfied with the strong order intake in the quarter, up 11% on last year representing an organic growth of 4%. Sales were also strong in the quarter, up 5% on last year.

In Entrance Control, we experienced an all-time high order intake of MSEK 500 in the quarter, where we have both taken several important airport orders and included a quarter of the newly acquired company, Cominfo. Sales in the quarter grew by 25% and will continue on a high level going forward with the good order stock we now have. The Cominfo acquisition is a good addition to the Business Unit and the integration work is following the plan.

In Safe Storage, order intake was up 13% and sales were up 8% mainly driven by a strong performance in Asia. One part of our strategy in Safe Storage is to move into partnerships for the distribution of safes in Europe. We have developed a concept for this partnership model and after the end of the quarter, we have announced a partnership with Insafe on the UK market. With Insafe as our distributor in the UK, we will get an excellent market coverage with a very professional partner. It also gives us an opportunity to grow our business in the UK market as well as making our fixed costs variable.

In Cash Management, order intake was down by 24% where Americas improved from last quarter, but the order intake was lower in both Europe and Asia-Pacific & Middle East. Sales were down by 12%. Sales increased to Bank, were flat to Retail whereas sales to CIT partners had a weaker development. We see signs of improvement over the coming quarters.

In Integrated Security, order intake was down by 15% yearon- year and sales were down by 4%. In the Americas, sales grew wheras it contracted in the other regions. We have been working with profit improvement activit ies in this area which are now having a positive effect on the Business Unit’s EBITA.

Results

The Group EBITA of MSEK 92 in quarter three was in line with last year. The EBITA margin was 6.7%.

Entrance Control continues to deliver very strong results with MSEK 66 in EBITA at 18% margin. Safe Storage also continues to deliver growth in both order intake and sales. The EBITA result was MSEK 37 at 7% margin. Apart from driving the business, focus in the quarter has been on the planned cost-efficiency measures and changing the business model to an indirect partnership model resulting in a new partnership in the UK.

Cash Management had a weak result caused by lower sales in the quarter. The order intake in the Americas increased, whereas it decreased in the other regions. For both order intake and sales, the big deviation compared to last year was due to phasing of projects to CITs. The EBITA was MSEK 9 at 4% margin. We are addressing the situation and work both on cost and on developing existing and new partners to improve the performance in the coming quarters.

In Integrated Security, the order intake and sales grew in the Americas whereas they contracted in the other regions. Structural measures on right-sizing continued and hence the EBITA improved by MSEK 6 and was positive by MSEK 5 in the quarter.

The cost-efficiency programme which was launched in Q2 is progressing as planned. The programme consists of two main parts: structural changes due to the change into a global Business Unit structure and continued downsizing mainly in our European business. Costs will be taken in quarter four for the structural changes announced, with the full Business Unit structure and changes in Group management and the related savings to have full effect as from year-end. The continued downsizing in Europe has been mobilised and started to be implemented during the end of the quarter. Full cost and benefits of this part of the programme will appear in the coming quarters. All in all, the programme is running as planned to give full effect as from July next year.