Loomis AB (publ)

And welcome to the Loomis' second quarter 2026 presentation. My name is Aritz Larrea, and I'm the CEO of Loomis. With me here today are our CFO, Johan Wilsby, and Jenny Bostrom, our head of sustainability and investor relations. I'll start by providing a brief summary of our second quarter results before opening the floor for questions. Let's begin by turning to slide number two. We delivered a strong second quarter with revenue of almost 7.9 billion Swedish krona. Currency adjusted growth was about 9% driven by strong organic growth and contributions from acquisitions. During the quarter, we saw very strong growth in our international and FXGS business lines, driven by increased demand for the transportation of precious metals. We also continued to deliver strong growth in our automated solutions business line. We increased our EBITDA margin by more than one percentage point year-over-year to 14%. This represents the highest margin in our history, and I'm pleased to see that the restructuring and efficiency initiatives we have implemented continue to support margin expansion. Our robust cash flow enables us to continue investing in the business while also delivering attractive returns to our shareholders. Although quarterly operating cash flow was impacted by high working capital, we achieved a strong role in 12-month cash conversion of 95%. As we announced at our 2024 Capital Markets Day, we have the ambition to expand our footprint in Latin America, and we made significant progress towards that ambition during the quarter. In early July, we completed the acquisition of the Argentine cash-handling company, Transportadora del Interior. This acquisition doubles our operations in Argentina, giving us presence in the country's largest and economically strongest regions. As you know, we're in the process of acquiring Hermes Transportes Blindados, the most significant acquisition in Lubis' history. Hermes is the market leader in secure transportation and cash management in Peru, with approximately 50% market share. They have around 1,000 customers, and approximately 3,200 employees. The acquisition further strengthens our position in Latin America and is an excellent strategic fit for LUMIS. It also supports our growth ambitions in both automated solutions and the international business line. We are currently preparing to launch the public tender offer, which is currently expected to take place in August. Together, these acquisitions strengthen our footprint in Latin America, a region characterized by high cash usage and attractive long-term growth opportunities. Creatinging value for our shareholders remains a key priority at Loomis. During the second quarter, we distributed an ordinary dividend of 15 Swedish kronor per share and an extraordinary dividend of 5 kronor per share, returning more than 1.3 billion Swedish kronor to our shareholders. I'm also pleased that Standard & Bush reaffirmed our BBB credit rating with a stable outlook, recognizing the strength of our balance sheet and our disciplined financial management. Finally, I would like to welcome Tobias Hablo as LUMI's new CFO. Tobias will join us in September and brings extensive leadership experience from a range of companies and industries. With that, let me turn to the next slide and review the performance in Europe and Latin America. Our Europe and Latin America segment delivered a strong performance during the quarter, with revenue of 3.7 billion Swedish krona and a solid currency adjusted as well as organic growth. Demand for secure logistics and the management of high-value assets remained strong, supporting continued growth in both our international and FXGS business lines. Automated solutions also performed well, delivering growth of more than 20% compared to the prior year. The EBITDA margin reached 12.4%, reflecting continued progress in our margin expansion initiatives, despite some short-term headwinds in the ATM business. Let me now turn to the next slide to discuss our performance in the U.S. The U.S. segment delivered another exceptional quarter, with revenue exceeding 4.1 billion Swedish kronor. Currency adjusted growth reached a very strong 12.2%, partly supported by fuel price indexation. Our international business line delivered an outstanding performance driven by strong demand for the cross-border transportation of precious metals. At the same time, our automated solutions business line delivered another quarter of double-digit growth, contributing to strong organic growth across the segment. Our efficiency initiatives continue to deliver tangible results, enabling us to grow the business without increasing headcount, while maintaining high service quality and strong customer satisfaction. As a result, we delivered record operating income and the highest operating margin in the segment's history, demonstrating the scalability of the business and the strength of our execution. Let me now turn to the next slide to discuss our SME Pay Business. Revenue in the SME pay segment increased to 90 million Swedish kroner during the quarter, with nearly half generated from cash-related services provided to small and medium-sized businesses. We continue to see encouraging momentum in our combined cash and digital offering, winning contracts across additional business verticals, including sports arenas and healthcare. This new customer segment demonstrates the growing relevance of our integrated payment offering and our ability to support larger organizations with the efficient management of both cash and digital payments. The migration to new POS platforms enables LumiState to focus on larger SME customers across a broader range of verticals. As part of this process, Lumis Pay has chosen not to migrate unprofitable customers, which has had a modest impact on several transaction volumes. The reduction in the operating loss compared to the previous year is fully in line with our strategic priorities for the segment. Let me now turn to the next slide and provide an update on our sustainability progress. As we mentioned during our Q1 presentation, Lumis became the first company in our industry to have its climate targets validated by the science-based targets initiative in April. This represents an important milestone and a commitment that we take very seriously. We are already making good progress against those targets, continuing to deliver on our carbon emissions reduction plan. During the quarter, our use of HVO biofuel increased by more than 25% compared with the prior year. HBO now accounts for approximately 6% of our total fuel consumption. Combined Scope 1 and Scope 2 emissions decreased both year-over-year and compared with the previous quarter. Compared with Q1, Lumis reduced its combined Scope 1 and 2 emissions by approximately 4%. And safety remains the top priority for us. As you know, our ambition is to reduce our work-related injury rate by 10% by 2027, compared with 2024 levels. On a rolling 12-month basis, we remain slightly above that target trajectory. Protecting our employees and further reducing workplace injuries remain key priorities for the company, and we will continue to maintain a strong focus on safety and continuous improvement. With that, let me turn to the income statement, where I'll begin by highlighting that we delivered both strong currency adjusted and organic growth. Our performance resulted in record high earnings per share. Our quarterly EPS grew by 30 percent compared to Q2 2025. During the quarter, we had a few items affecting comparability. The most significant was the reversal of the borrower's earner provision. reflecting that the earner conditions were not met. We remain very pleased with both the acquisition and the multiple we paid. We also recognize the write down related to an older software development project and recorded a small provision in connection with an ongoing claim in Chile. Finally, I would like to highlight that our net debt to EBITDA ratio improved year over year and remains well below our target of two times. Following the completion of the Hermes acquisition, leverage is expected to temporarily exceed this level before returning below two times within approximately six months. Maintaining our investment grade credit profile remains a key priority. As I mentioned earlier, we are pleased that Standard & Poor's reaffirmed our triple B credit rating with a stable outlook. With that, let's turn to the next slide and review our performance in a historical context. We continue to execute our priorities while strengthening the platform for long-term profitable growth. Lumis is well-positioned to capture opportunities in both existing and new markets while continuing to make progress on our sustainability ambitions. Looking at the rolling 12-month period, we achieved a revenue of 30.7 billion Swedish kronor and a record high EBITDA margin of more than 13%. despite significant currency headwinds over the past several quarters. Currency adjusted growth reached 8.2% over the last 12 months, giving us confidence that we remain on track to deliver our strategic targets. We expect to remain in the upper half of our 12 to 14% EBITDA margin target range for the remainder of the strategic period. As mentioned earlier, we're also making steady progress toward our 2027 sustainability targets. As we enter the second half of our strategic period, I'm confident that we will continue to deliver on our strategic priorities and achieve our targets. This concludes my summary of the quarter. Operator, we are now ready to take questions.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and 1 at this time. The first question comes from the line of Johnson Simon from ABG. Please go ahead.

Good morning everyone and thanks for taking my questions. I hope you can hear me well. First I want to start with the US and the performance continues to be very impressive here and you highlighted a few things. You highlighted organic growth may have been a little bit boosted by the price indexation for fuel costs. So do you expect those price increases to carry into the common quarters or would lower oil prices here mean that you would give back sort of part of that growth?