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TRANSCRIPT
© Gunnebo Security Group 3 March, 2014 page 1
Capital Market Day 2014
Per Borgvall, President & CEO
© Gunnebo Security Group 3 March, 2014 page 2
08.30-09.00 Introduction & Strategic update P. Borgvall
09.00-09.15 Financial Update C. Johansson
09.15-09.40 Region EMEA M. Andreasen
09.40-09.55 Region Americas T. Wängberg
09.55-10.15 Region Asia-Pacific P. Borgvall
10.15-10.25 Q & A
10.25-10.40 Coffee
10.40-10.50 Introduction to stations C. Johansson
10.50-12.00 Stations
Public & Commercial Buildings and
Mass Transit: Entrance Control R. Hermans
Retail: Cash Handling A. Almlöf/T. Gunnesson
Bank: Electronic Security K. Wallström/H. Balaguer
12.00-12.15 Summing up P. Borgvall
12.15-12.30 Q&A
12.30-13.30 Lunch
Today’s Agenda
© Gunnebo Security Group 3 March, 2014 page 3
The Gunnebo Security Group
The Leading Global Provider of a Safer Future
Annual turnover: 5,300 MSEK
Employees: 5,600 people
Headquarters: Gothenburg, Sweden
Sales Companies: 33 countries across Europe,
the Middle East, Africa, Asia-Pacific and Americas
Channel Partners: 100 additional markets
Listed company on the Swedish Stock Exchange
since 1995
© Gunnebo Security Group 3 March, 2014 page 4
Our Heritage
Gunnebo has an industrial heritage stretching back 250 years.
1764
Forge opens in small village of Gunnebo in south-east Sweden.
1889
Gunnebo Engineering is formed with several metal-working factories.
1995
Gunnebo Industries is acquired by venture capital company, HIDEF. Gunnebo AB becomes listed on the Swedish stock exchange.
© Gunnebo Security Group 3 March, 2014 page 5
Recent History and Business Focus
1995-2005 | Acquisitions
Gunnebo AB enters into a period of acquiring multiple companies from around the world which specialise in security solutions.
2005-2008 | Integration
The acquisitions are integrated into the Group and adopt the Gunnebo name.
2009 - 2010 | Strategy and profitability
Gunnebo redefines its vision to become the leading global provider of a safer future and starts to invest in growth markets like China.
2011-present | Profitable growth and Delivery
Gunnebo continues to focus on growth markets, expanding in India, South Korea, Thailand, Malaysia, USA, Mexico and Brazil.
© Gunnebo Security Group 3 March, 2014 page 6
Our Six Customer Segments
Bank Customers include Bank of India, Citibank, HSBC, ING Bank, LCL, Nordea, Manappuram Finance, State Bank of India and Standard Bank.
Retail Customers include Aldi, COOP, Leroy Merlin, Smart Club, Catwalk and Statoil.
CIT Customers include Brinks, G4S, Loomis and RCCS.
© Gunnebo Security Group 3 March, 2014 page 7
Our Six Customer Segments
Mass Transit Customers include the public transport networks of Barcelona, Beijing, Bogotá, New Delhi and Shanghai and airports in Bahrain, Boston, Dubai, London, Madrid, Paris, Sydney and Warsaw.
Public & Commercial Buildings Customers include the European Commission, NATO, the UK Home Office as well as American Express, Microsoft, Nestlé, Shell and Vodafone.
Industrial & High-Risk Sites Customers include manufacturing plants, logistics centres, power plants, prisons, casinos and stadia.
© Gunnebo Security Group 3 March, 2014 page 8
Our Five Global Solution Offerings
Cash Handling
Solutions for closed cash handling, cash deposit, cash recycling, note counting and cash transfer.
Entrance Security
Ticket gates, interlocking doors, security doors, speed gates, turnstiles and airport security gates.
Safes and Vaults
Safes, fire safes, deposit safes, vaults, modular vaults and automated safe deposit lockers.
© Gunnebo Security Group 3 March, 2014 page 9
Our Five Global Solution Offerings
Electronic Security
Solutions for surveillance, access control, intrusion detection, electronic locking and electronic article surveillance.
Security Services
Security monitoring, hosting, security audits, security maintenance and upgrade & retrofit management.
© Gunnebo Security Group 3 March, 2014 page 10
Adjusted Organisation Strengthening Regions and Customer Focus
President & CEO
Per Borgvall
EMEA
Morten Andreasen
Asia-Pacific
Per Borgvall
Americas
Tomas Wängberg
CFO/CIO
Christian Johansson
Human Resources
Magnus Lundbäck
Marketing & Service
Anna Almlöf
Group Operations
Lars Thorén
Entrance Control
Robert Hermans
© Gunnebo Security Group 3 March, 2014 page 11
Our Markets & Channel Partners
Gunnebo operates across three regions.
To increase global coverage, Gunnebo also has a network of Channel Partners in over 100 markets around the globe.
EMEA
Asia-Pacific Americas
© Gunnebo Security Group 3 March, 2014 page 12
Our Brands
As well as the Gunnebo brand, we have a number of strong global and local brands.
Safes and vaults Founded 1835 in UK.
In Gunnebo portfolio
since 2000.
Safes and vaults Founded 1825 in France.
Acquired in 1999.
EAS Founded 1984 in Sweden.
Acquired in 2004.
Safes Founded 1967 in USA.
Acquired in 2012.
Fire protection Founded 1903 in India.
Acquired in 2000.
Closed cash handling Created 2001 in Sweden.
Safes Founded 1932 in India.
Acquired in 2000.
© Gunnebo Security Group 3 March, 2014 page 13
Total value estimated to some 82.9 BUSD
Expected Annual Growth: 7 per cent
A very fragmented market
Main drivers
Economic development
Increased standards of living
Urbanisation
The Global Security Market*
*Source: Freedonia 2014
© Gunnebo Security Group 3 March, 2014 page 14
Strong performance in Asia-Pacific and Americas – particularly in India and the USA – and stabilisation in Europe
Organic growth in order intake of 4% and net sales of 1%
Point of gravity shift continued successfully
Acquisition in South Korea
Integration work has increased Hamilton profitability
Restructuring activities to reduce European cost base continued
Operating margin improved
Strong operating cash flow and solid financial position
Highlights 2013
© Gunnebo Security Group 3 March, 2014 page 15
The Gunnebo Group: Where Are We Now?
Focus and momentum is there
We have a clear strategy
Moving the Point of Gravity
Well on our way to achieving our overall
financial goals
Investment in people is paying off
Strong cash flow
Strong balance sheet
© Gunnebo Security Group 3 March, 2014 page 16
Moving Point of Gravity
Customer Value
Resource allocation
Geographically
Moving the Point of Gravity
© Gunnebo Security Group 3 March, 2014 page 17
Group Challenges and Strategy for 2014
Continue down the road to delivering improved results
Continue to expand in growth markets
Reduce costs in Europe
Improve our gross margins
Further strengthen our cash flow
03 March 2014, page 18
Financial Update
Christian Johansson, CFO & CIO
03 March 2014, page 19
Organic growth 5 %
Return on capital employed 15 %
Operating margin 7 %
Equity ratio 30 %
Financial Targets
03 March 2014, page 20
Net Sales Organic Growth Quarter vs Quarter (%)
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
1 2 3 4 1 2 3 4
2012 2013
Full year
2013: +1 % 2012: -1 %
03 March 2014, page 21
Operating Profit by Quarter (MSEK)
Operating Profit Operating Profit, excl Non Recurring Items
0
20
40
60
80
100
120
140
160
1 2 3 4 1 2 3 4
2012 2013
Full year Operating Profit
excl. Non-recurring items
2013: 306 2012: 266
Operating Profit 2013: 222 2012: 179
03 March 2014, page 22
Operating Margin by Quarter (%)
Operating Margin %, Quarter Operating Margin % Quarter, excl. Non-Recurring Items
Operating Margin %, 12M Operating Margin % 12M, excl. Non-Recurring Items
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
1 2 3 4 1 2 3 4
2012 2013
Full year Operating Margin,
excl. Non-recurring items
2013: 5.8 2012: 5.1
Operating Margin
2013: 4.2 2012: 3.4
03 March 2014, page 23
Operating Cash Flow (MSEK)
185 200
-150
-100
-50
0
50
100
150
200
250
300
1 2 3 4 1 2 3 4
2012 2013
Full year
2013: 261 2012: 112
Operating Cash Flow 12M
03 March 2014, page 24
Net Debt (MSEK)
-1400
-1200
-1000
-800
-600
-400
-200
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2012 2013
Post-employment benefits
Net Debt, excluding Post-employment Benefits
Gunnebo AB
Dividend paid
2012 Q2 76
2013 Q2 76
03 March 2014, page 25
Credit Facility With a 5-Year Tenor Successfully Signed
PRESS
RELEASE
FEBRUARY
20, 2014
Gunnebo AB has successfully signed an agreement regarding a syndicated credit facility for the amount of 1,480 MSEK (140 MEUR, 35 MUSD).
The facility, which has a tenor of five years and will mature in February 2019, is mainly a refinancing of current loan facilities.
The facility is provided by DNB and SEB and constitutes the basis for Gunnebo‟s loan financing. In addition it will function as a liquidity reserve and brings flexibility in respect of the group‟s financing needs.
"We are pleased with the continued support and commitment the banks have shown. The rationale for the refinancing was to extend the maturity of the facility and to benefit from the present market situation with attractive terms for longer financing” Christian Johansson, CFO Gunnebo AB.
03 March 2014, page 27
Adjusted organisation implemented in Q4 2013
Sales Companies
Sub-regional structure for increased back office efficiency
Nordic: Focus on implement a harmonized „Nordic‟ model to increase efficiency
United Kingdom & Ireland: Reduction of cost to cope with current business demand
Central: Common resources in back office functions
France: Restructuring programme initiated focusing workforce efficiency, project & margin
management, regional footprint
South: Continued cost adaptation to further lower break-even point
Operations
Capitalise on synergies enabled by reorganisation, R&D, market & technical support
Indirect material programme initiated including sales companies
Fixed Cost Savings in Europe
03 March 2014, page 28
Net purchasing savings -3%
Low Cost Country Sourcing 39 %(+5 %)
Transport & logistics efficiency
Manufacturing footprint
Consolidation
Moving point of gravity
Improved Sales & Order Planning
Gunnebo Operating System „GOS‟ established
Globalised product development process, reducing lead times and focus value engineering
Gross Margin Improvements
Reduce total
Product Cost in own Manufacturing
by 7%
2013 and ongoing Target position 2016 in Operations
03 March 2014, page 29
Manufacturing Footprint
Gunnebo plans to close its production facility
in Uckfield, UK
Due to growth of the business in Asia and the Americas
regions along with continued decline in Europe, Gunnebo
intends to realign its manufacturing footprint accordingly
Therefore the Gunnebo Group plans to close its Entrance
Control production facility in Uckfield, UK
Production and assembly will be transferred to other
production units within Entrance Control
The planned closure may affect 32 employees
Closure is planned to take place in Q4 2014
Costs for a closure would burden results in 2014
with 16 MSEK with yearly savings of 11 MSEK
from Q1 2015.
PRESS
RELEASE
MARCH 5, 2014
03 March 2014, page 30
Manufacturing Footprint
Moving the point of gravity Investments in Halol, Baroda, India 30 MSEK in 2014 Capacity extension to enhance existing production of
traditional physical security products and to extend a dedicated production line for ATM Safes
03 March 2014, page 31
Inventory Tighter cooperation between sales companies and Operations
Transfer of assembly closer to customers in Asia-Pacific
European Distribution - continued implementation of direct shipments, increase capital turnover in central & sub-regional hubs
Increased focus on product offering complexity and phase-out process
Accounts receivables
Harmonisation of credit management procedures
Real estate
Review of own vs rent
Cash Flow
© Gunnebo Security Group 3 March, 2014 page 32
Region Europe, Middle East & Africa
Morten Andreasen, SVP EMEA
© Gunnebo Security Group 3 March, 2014 page 33
Nordic; 14%
Central Europe; 26%
South Europe;
12%
France; 31%
Eastern Europe; 2%
Great Britain & Ireland; 8%
Middle East; 3%
Africa; 4%
Region Europe, Middle East & Africa (EMEA)
EMEA Net Sales 2013: MSEK 3,474
© Gunnebo Security Group 3 March, 2014 page 34
Region Europe, Middle East & Africa (EMEA)
Full Year 2013
Good order intake in Africa and South Europe
Net sales on European markets unchanged or declining
Reduction of cost base in sales companies and Operations continued
Margin unchanged at 1.4%, excl. non-recurring items
Region % of Net Sales
66%
MSEK 2013 2012 2013 2012
Order intake 880 821 3,558 3,707
Organic growth, % 6 -2
Net sales 999 1,035 3,474 3,736
Organic growth, % -4 -5
Operating profit/loss excl. non-recurring items 56 49 47 53
Operating margin excl. non-recurring items, % 5.6 4.7 1.4 1.4
Non-recurring items -26 -21 -74 -63
Operating profit/loss 30 28 -27 -10
Oct-Dec Full year
© Gunnebo Security Group 3 March, 2014 page 35
Market stabilisation and reduction of fixed costs
Order intake finally seemed to stabilise in Q4 of 2013
The „International Key Customer programme‟ was successfully built up, and sales to the selected 27 customers increased by 10% vs 2012
Our „Channel Management Programme‟ was revitalised, refocused and structured for increasing sales through distributors
A sub-regional structure was introduced in EMEA at the beginning of 2013 to capture sales synergies and build shared services
Restructuring programmes initiated in a number of countries in 2012 and 2013 resulted in a lower break-even level
In particular Southern Europe made a turnaround
Major Achievements 2013 in EMEA
© Gunnebo Security Group 3 March, 2014 page 36
Sub-Regional Highlights for 2013
UK Regional Manager: Paul Hutchinson
Awarded prestigious Royal Warrant (Gunnebo now „by appointment to her Majesty the Queen‟)
Steps taken to increase sales within Cash Handling
First to implement Gunnebo‟s new service delivery standards and software
Strong adaptation of costs to slower market
Market in 2013:
Outlook market trend:
7% 14%
Nordic Regional Manager: Tom Christensen
Improvement in quality and cost of SafePay systems strengthens our position in a competitive market, with several major contracts won (Axfood, Shell, etc.)
Focus on the retail segment in a decreasing bank market
Plans to increase our Electronic Security business in the region
Restructuring programmes increase efficiency and lower break-even levels
Market in 2013:
Outlook market trend:
© Gunnebo Security Group 3 March, 2014 page 37
Sub-Regional Highlights for 2013
Central Regional Manager: Patrick Van Aart
Strong focus on Cash Handling to retail resulted in several major contracts (Real, a large European shoe retailer)
Shared services in dispatching and monitoring initiated
Restructuring programmes increased efficiency and lower break-even levels
Market in 2013:
Outlook market trend:
France Regional Manager: Michael Gass
Order intake reflected the general trend in France
Sales to French Key Customers in the bank sector remained strong
Steps taken to penetrate the market with SafePay
The restructuring programme initiated in 2013 to reduce the cost of sub-contractors and lower the break-even level will continue throughout 2014
Market in 2013:
Outlook market trend:
32% 26%
© Gunnebo Security Group 3 March, 2014 page 38
Sub-Regional Highlights for 2013
South Regional Manager: Darío Vicario
Markets slowly stabilising going into 2014
Good orders landed in retail (Leroy Merlin, Conad) and also with banks (Bankia)
The restructuring programmes initiated in 2012 almost finalised, with a lower break-even level as a result
Market in 2013:
Outlook market trend:
Eastern Europe Regional Manager: Jurek Szkalej
Fairly low activity level in the Eastern European markets compensated by good development in Ukraine, Azerbadjan and Kazakstan
Security installations in EU embassies in Ukraine, Kyrgyzstan and Afghanistan
Steps taken to increase business in Russia
Market in 2013:
Outlook market trend:
12%
2%
© Gunnebo Security Group 3 March, 2014 page 39
Sub-Regional Highlights for 2013
Middle East Regional Manager: Jacob Touma
Middle East markets stable but growth is slower because of regional tensions
Hence focus will be on the Gulf states in the foreseeable future
Focus on building Electronic Security business
Branch office established in Oman
Market in 2013:
Outlook market trend:
Africa Regional Manager: Martin Houseman
Generally strong demand in both East and West Africa.
Kenyan branch office established to handle East Africa whereas West Africa is still handled on a project basis
South African market expected to be impacted by elections and low currency rates
Introduction of Cash Handling
Market in 2013:
Outlook market trend:
3% 4%
© Gunnebo Security Group 3 March, 2014 page 40
Gunnebo Strengthens Partnership with La Poste
The French postal service, La Poste, has made Gunnebo one of its most important suppliers of electronic security solutions New contract could be worth up to €5m over three years
Gunnebo will supply 360 SecurWave control panels for
integrated access control and intrusion detection annually
Including earlier roll-outs, over one third of La Poste‟s
12,000 sites will be equipped with SecurWave
Being able to supply a single solution to fit all post offices
was a major advantage
La Poste plans to monitor the entire installed base using
Gunnebo‟s SecurManager application - optimises operating
costs
PRESS
RELEASE
MARCH 5, 2014
© Gunnebo Security Group 3 March, 2014 page 41
EMEA: Market Drivers & Trends
Western Europe: Demand driven by high crime rates, developed economies and high personal affluence. Has been dented by economic slowdown.
Eastern Europe: Demand bolstered by increase in construction spending and increase in wealth.
Africa and Middle East: Continuing trend for urbanisation, economic growth and increased personal affluence is supporting demand.
Middle East in particular is showing increased demand for greater protection of commercial and public buildings through the installation of entrance and access control systems.
© Gunnebo Security Group 3 March, 2014 page 42
In Focus 2014
1. Develop sales
2. France turnaround
3. Restructuring to lower costs
4. Organisational efficiency
5. Improve cash flow
© Gunnebo Security Group 3 March, 2014 page 43
Clearer distinction between solution sales (direct to end customer) and commodity sales (channel management)
Strong focus on particular market segments (specifically within retail)
Value development from Safes and Vaults to Cash Handling and Electronic Security
KAM programme leading to more „Mega Customers‟
2014 and Beyond (1/2)
© Gunnebo Security Group 3 March, 2014 page 44
Larger strategic partnerships
More establishments in growth countries in the regions Africa, Middle East, Eastern Europe and Commonwealth of Independent States (CIS)
Continuous cost reductions through further restructuring programmes, then structural changes to capture synergies
Strong performance culture
2014 and Beyond (2/2)
© Gunnebo Security Group 3 March, 2014 page 45
Region Americas
Tomas Wängberg, SVP Americas
Front image from Sao Paolo?
Region Americas
Tomas Wängberg, SVP Americas
© Gunnebo Security Group 3 March, 2014 page 46
Region Americas
North America; 78%
Latin America; 22%
Net Sales 2013: MSEK 843
© Gunnebo Security Group 3 March, 2014 page 47
Full Year 2013
Increased order intake mainly through major orders in Latin America
Organic growth mainly supported by good growth in US
Successful integration of Hamilton Safe, cost reductions within administration and operations have improved margins
Increased operating profit and margin of 14.8%
16%
Region % of Net Sales
MSEK 2013 2012 2013 2012
Order intake 167 261 913 658
Organic growth, % -16 9
Net sales 217 245 843 632
Organic growth, % -5 7
Operating profit/loss excl. non-recurring items 41 42 125 102
Operating margin excl. non-recurring items, % 18.9 17.1 14.8 16.1
Non-recurring items -2 -1 -2 -5
Operating profit/loss 39 41 123 97
Oct-Dec Full year
Region Americas
© Gunnebo Security Group 3 March, 2014 page 48
Major Achievements 2013 in Americas
Continued expansion into new markets and market segments
Integration and “optimisation” of Hamilton Safe
New solutions in US and Canada
Cash Handling Brazil
BBVA Bancomer contract in Mexico
Five-year service contracts with major banks in Canada
Order for first SafeStore Auto in USA
© Gunnebo Security Group 3 March, 2014 page 49
North America: Market Drivers & Trends
USA
Increased activity by regional/local banks to fill space where major banks pulled out last year
The business on the West Coast is returning as the general economy is improving
Government spending (except for military) seems to be stabilising
Canada
Continued growth in natural resource sector
Building on pharmaceutical and drug vault successes
Continuing to create and develop awareness within Entrance Security, Electronic Security and integrated systems markets
© Gunnebo Security Group 3 March, 2014 page 50
USA Country Manager: John Haining
Integration of Hamilton Safe offering into Gunnebo – adding UL-certified product range
Gunnebo core offering introduced into Hamilton Safe distributor network
Optimised production, hamonisation with Global Gunnebo Operation Standards
Government business slowdown due to sequester
Market in 2013:
Outlook market trend:
Sub-Regional Highlights for 2013: North America
Canada Country Manager: Troy McCleary
Stable bank business
Increased focus on business in Western Canada – challenge to match growing demand with qualified staff
Tendency in the marketplace to postpone roll-outs under framework agreements and orders
Market in 2013:
Outlook market trend:
© Gunnebo Security Group 3 March, 2014 page 51
Brazil Country Manager: Rubens Bulgarelli
Security remains on top of the agenda in Brazil
Decision taken to continue to build on the strong retail platform and focus Gunnebo global solution market introductions on the retail and CIT market segments
Gunnebo Brazil has developed into a hub for expansion into Latin America
Market in 2013:
Outlook market trend:
Sub-Regional Highlights for 2013: Latin America
Mexico Country Manager: Jordi Riart
Major order from BBVA Bancomer for security-related services and installation and maintenance of security equipment for national branch network
Adds volume to the business consituting a good platform for further growth
Market in 2013:
Outlook market trend:
© Gunnebo Security Group 3 March, 2014 page 52
Strategic Order within Cash Handling
Brazilian CIT company, Fidely‟s, invests in cash handling from Gunnebo Order includes front office cash deposit solutions
Fidely‟s will package products as part of offering to small and
medium-sized retailers across Brazil
The solutions allow secure and efficient cash deposits at the
till
increases security
minimises the risk of robberies and theft
reduces the time spent on cash management
prevents counterfeit notes being accepted
Partnership with Gunnebo an important part of Fidely’s
strategy to create long-term relationships with their end
customers
PRESS
RELEASE
MARCH 5, 2014
© Gunnebo Security Group 3 March, 2014 page 53
LAM: Market Drivers & Trends
Mexico
Mexican Banks continue to be very profitable and with low risk, due to continued risk avoidance
Low penetration rate of banks and requirement to upgrade old branches provides for continued market growth and opportunities
Brazil
Retail is suffering from a historically slow Christmas, applying large discounts to clear stock, and unclear situation regarding new store openings
Low penetration of retail security and ”intelligent cash handling” provides for continued market opportunities
Continued huge interference from the government – protecting local industry against import products
Rest of Latin America
Many well-performing economies are emerging as Brazil slows down, especially Peru, Colombia and Chile
Latin America: Market Drivers & Trends
© Gunnebo Security Group 3 March, 2014 page 54
Cash Handling
Channel managment
Key Account Management
Retail security (e.g. EAS, alarm, CCTV)
Cash flow
In Focus 2014
© Gunnebo Security Group 3 March, 2014 page 55
2014 and Beyond
Establish Gunnebo as a major player in security over the continent, built from the current operating units
Continue to broaden the scope of the business Cash Handling
Electronic Security
Direct sales and services in new countries
From assembly to manufacturing in Latin America
© Gunnebo Security Group 3 March, 2014 page 56
Gunnebo Asia-Pacific Per Borgvall, President & CEO
Front image from KL/Jakarta?
Region Asia-Pacific
Per Borgvall, SVP Asia-Pacific
© Gunnebo Security Group 3 March, 2014 page 57
Region Asia-Pacific
Australia:
16%
India: 40%
China:
14%
South-East Asia: 30%
Net Sales 2013: MSEK 954
© Gunnebo Security Group 3 March, 2014 page 58
Region Asia-Pacific (APAC)
18%
Region % of Group Net Sales
Full Year 2013
Strong organic growth in India, China and South-East Asia
India continues to contribute strongly to net sales
Operating profit increased and operating margin improved above 2012
MSEK 2013 2012 2013 2012
Order intake 266 235 1,043 885
Organic growth, % 26 27
Net sales 261 237 954 868
Organic growth, % 22 20
Operating profit/loss excl. non-recurring items 36 48 134 111
Operating margin excl. non-recurring items, % 13.8 20.3 14.0 12.8
Non-recurring items -2 -7 -8 -19
Operating profit/loss 34 41 126 92
Oct-Dec Full year
© Gunnebo Security Group 3 March, 2014 page 59
Major Achievements for 2013 in Asia-Pacific
Continued growth and expansion into new markets
Organic order intake grew 27% in the region
In India, organic order intake grew 24%
First successful full year in Malaysia
Acquisition in South Korea in August 2013
Establishment of branch offices in Thailand,
Vietnam and Myanmar (Burma)
© Gunnebo Security Group 3 March, 2014 page 60
Sub-Regional Highlights for 2013
China Country Manager: Chris Dai
21% organic growth in Chinese market, across all segments
First company providing turnstile solutions for check-in process at a Chinese airport - Beijing Capital International Airport
Starting to explore opportunities in high-speed rail, jewellery processing, museum and other high potential market segments
Building up the local R&D capacity and developing products specifically for the Chinese market
Market in 2013:
Outlook market trend:
India Country Manager: Sandeep Deshpande
Solid growth for the fourth consecutive year (CAGR 30%) and 18 consecutive quarters
Strong channel performance in Bank business
Remote Monitoring Centre for service business up and running
Footprint expansion in Fire Extinguishers and Entrance Control business
Developed system integration capabilities – secured three prestigeous projects in 2013
Market in 2013:
Outlook market trend:
40%
14% 14%
© Gunnebo Security Group 3 March, 2014 page 61
Market Drivers & Trends
India
GDP Growth >5%
Infrastructure investments in airports, railroads, metro systems and the financial sector
Increasing wealth and a strong middle class
Rural investments
High security demand
China
GDP growth >7%
Infrastructure investments in airports, railroads, metro systems and the financial sector
Increasing wealth and a strong middle class
Rural investments and expansion towards the western part of the country
© Gunnebo Security Group 3 March, 2014 page 62
Sub-Regional Highlights for 2013
South-East Asia Regional Managers: William Mouat & Sacha de la Noë
Established new sales company in South Korea
Opened representative offices in Thailand and Myanmar
First automated safe deposit locker (SafeStore Auto) installed in Malaysia
Sales company in Indonesia investing in Cash Handling solutions for the retail market
Market in 2013:
Outlook market trend:
Australia/New Zealand Country Manager: Dan Turner
Moved Cash Handling manufacturing offshore to Kunshan plant, lowering cost base and improving competitive position
Further market share gained in Retail Cash Handling
Plans to increase our profitable foothold in the developing New Zealand market
Reduced operating costs by „offshoring‟ support functions to India
Market in 2013:
Outlook market trend:
16%
30%
© Gunnebo Security Group 3 March, 2014 page 63
Market Drivers & Trends
Australia/New Zealand
A mature market by and large driven by the raw material industry
Sophisticated solutions for Cash Handling in the retail sector
Natural disasters create volatility
South-East Asia
Indonesia
GDP growth >5%, young and dynamic population, huge raw material reserves
Malaysia
GDP growth >5%, infrastructure and raw materials
Thailand
70 million, political unrest
© Gunnebo Security Group 3 March, 2014 page 64
Large Order Won with Guanfu Museum in Shanghai
Gunnebo has received an order worth over €2m to deliver safe deposit lockers to the Guanfu Museum in Shanghai, China Museum is located in Shanghai Tower – China‟s tallest
building
16,888 lockers and 15 vault doors will be delivered
Guanfu will rent out lockers to their members for the storage
of valuable artwork
Reputation of Chubbsafes decisive in order win – positive for
insurance reasons
New segment for Gunnebo in China and first time
Chubbsafes SDLs have been produced in China
Delivery and installation will be carried out during the Q2
2014 in collaboration with systems integrator, Airlink
PRESS
RELEASE
MARCH 5, 2014
© Gunnebo Security Group 3 March, 2014 page 65
Maintain growth momentum
Cash Handling
Further geographical market penetration
Electronic Security
Cash flow
Focus Areas 2014
© Gunnebo Security Group 3 March, 2014 page 66
2014 and Beyond
Maintain the Moving the Point of Gravity momentum
Continue to broaden the scope of the business Cash Handling
Electronic Security
© Gunnebo Security Group 3 March, 2014 page 67
Q&A
© Gunnebo Security Group 3 March, 2014 page 68
Introduction to stations
Explore Gunnebo’s Customer Solutions
10.40-12.00
© Gunnebo Security Group 3 March, 2014 page 69
Explore Gunnebo’s Customer Solutions
© Gunnebo Security Group 3 March, 2014 page 70
Three stations Station 1 - Mass Transit and Public & Commercial Buildings - Robert Hermans
Station 2 - Retail - Anna Almlöf
Station 3 - Bank - Karin Wallström
Station number on name tag
20 minutes at each station including questions, 5 minutes logistics
Practicalities
© Gunnebo Security Group 3 March, 2014 page 71
Entrance Control
Mass Transit and
Public & Commercial Buildings
Capital Market Day March 5, 2014
© Gunnebo Security Group 3 March, 2014 page 72
Mission
“Protecting people and assets by regulating and controlling access through passage
barriers and detection systems”
© Gunnebo Security Group 3 March, 2014 page 73
Share of Gunnebo
92%
8%
Sales 2013
Gunnebo Other
Entrance Control
© Gunnebo Security Group 3 March, 2014 page 74
37%
37%
17%
9%
Sales 2013 by Region
Europe
APAC
Americas
MEA
Global Market Scope
© Gunnebo Security Group 3 March, 2014 page 75
Offering
Security/Building Applications
Mass Transit Applications
© Gunnebo Security Group 3 March, 2014 page 76
Market Drivers and Trends
Growth of urban populations driving opportunities and inner-city developments for Metro & BRT
Facilitation of mobility and increased cross-border movement of people
Reduction of overheads, receptionists, man guarding, etc
Growing terrorism and crime threats, actual and perceived
Need for centralised security checking and audit control of personnel
The Shard, London
Hong Kong Metro
© Gunnebo Security Group 3 March, 2014 page 77
Market Analysis / Size & Growth Potential
Source: IMS World Market for Entrance Control Equipment, Ed. 2013
OfficeBuildings
Mass Transit Industry GovernmentBuildings
Banking &Finance
Leisure &Entertainment
Stadia Education Ports &Harbors
OtherTransport
2017
2012
© Gunnebo Security Group 3 March, 2014 page 78
11,8%
11,0%
10,3%
6,5%
2,9% 2,7% 2,6% 2,1% 2,1%
1,7%
GunneboEntrance
Boon Edam Kaba AutomaticSystems
IDL FAAC Alvarado Perco Saima Argusa
Gunnebo Market Share
2012 market size:
558.5 MUSD
53.8%
46.2%
10 topsuppliers
Others
Source: IMS World Market for Entrance Control Equipment, Ed. 2013
© Gunnebo Security Group 3 March, 2014 page 79
Evolution Video
New Speedstile Range
© Gunnebo Security Group 3 March, 2014 page 80
Chinese Metro Station
© Gunnebo Security Group 3 March, 2014 page 81
Metro Fare evasion – loss of revenue for the operator
Undesired passengers – feeling of safety for other passengers
Avoid fare disputes with staff
Queue management and quick throughput (70pax/min)
Airport Security – avoid human factor
Cost savings – staff handling the exceptions only
Improved throughput
Less conflict and fewer disputes with airport staff
Opportunity for queue management and passenger profiling
Mass Transit – Market Drivers for Installing Turnstiles
© Gunnebo Security Group 3 March, 2014 page 82
Gate Demonstration
Newly launched gate for Metro & Airport applications (MFL/AFL) Key Benefits
Narrow casework
Common central core
Easy customisable end leg options
Design flexibility and branding
Panel height from 0.9 to 1.8m
High security against unauthorised passage
© Gunnebo Security Group 3 March, 2014 page 83
www.gunnebogroup.com
© Gunnebo Security Group 3 March, 2014 page 84
Cash Handling in the Retail Market
Background
Passande helsidesbild med Cash Handling
Customer Segment Retail
Capital Market Day March 5, 2014
© Gunnebo Security Group 3 March, 2014 page 85
With our heritage from the banking sector, we have chosen to
focus our solutions offering on improving security and efficiency
for RETAILERS within the CASH, GOODS and PEOPLE processes.
Our solutions include:
Cash Handling
Entrance Security
Electronic Security
Safes & Vaults
Security Services
The Retail Business
A growing business for Gunnebo
© Gunnebo Security Group 3 March, 2014 page 86
Millions of stores across the globe
Increased interest in cash handling
Annual Global Growth: close to 6 per cent*
Market drivers: Cash is pushed out in the retail trade
Increased demand for in-store security
Changed consumer purchase behaviours
Growing middle class in Asia-Pacific and Americas
Retail market M&A - Globalisation
The Global Retail Market
*CAGR 2008-2013. Source: Planet Retail
© Gunnebo Security Group 3 March, 2014 page 87
Total Group Sales in 2013 (MSEK): 5 270
The Retail Business: Share of Total Sales and Product Split
Electronic
Security
Cash
Handling
Service
Safes
Other Retail
23%
Share of Group Net Sales Product Categories
© Gunnebo Security Group 3 March, 2014 page 88
Global Top 10 Retailer Ranking 2013
Ranking, 2013
Banner Sales (MDSEK)
Outlets
Walmart 3 342 11 254
Carrefour 856.3 10 479
Tesco 772.4 7 548
Costco 719.7 634
Seven & I 687.1 31 758
Schwarz Group 678.7 11 140
Kroger 674.8 3 537
Metro Group 646.8 2 265
AEON 637.0 17 102
Auchan 592.1 3 552
© Gunnebo Security Group 3 March, 2014 page 89
www.gunnebogroup.com
Samma bild som framsidan med Cash Handling
Case: Retail Cash Handling
Tobias Gunnesson, Global Product Manager
© Gunnebo Security Group 3 March, 2014 page 90
Smaller Grocery Formats Have Seen Strong Rate of Store Openings
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
Hypermarkets &Superstores
Supermarkets &Neighbourhood
stores
Discount stores Convenience &Forecourt stores
Cash & Carries &Wholesale clubs
Drugstores,Pharmacies &Perfumeries
Nu
mb
er o
f O
utl
ets
Channel
Global: Channel Sizes by Outlets, 2007-2017
2007
2012
2017
Source: Planet Retail.
© Gunnebo Security Group 3 March, 2014 page 91
Cash is pushed out in the retail trade
Demand for bank notes increases all over the world (except in Scandinavia and Rubel in Russia)
Retail cash handling problems do not directly vary with cash volume
Security
Efficiency
Control
Cash Continues to Grow as Means of Payment
Source: Central Banks, CIA; AX CEL analysis
34.6
24.6
6.0
12.5
29.1
8.7
3.3
8.0
10.3
-0.8
12.2
0.8
12.6
31.4
4.6
2.7
1.5
-5.7 Sweden
UK
Germany*
France**
India
Indonesia
USA
Brazil
Russia
Value of bank card
transactions, CAGR, %
Value of ATM
withdrawals, CAGR, %
© Gunnebo Security Group 3 March, 2014 page 92
Cash Accounts for 41% of Transactions in Sweden
© Gunnebo Security Group 3 March, 2014 page 93
Gunnebo Retail Sales Tool
© Gunnebo Security Group 3 March, 2014 page 94
Gunnebo Retail Sales Tool
© Gunnebo Security Group 3 March, 2014 page 95
Gunnebo Retail Sales Tool
© Gunnebo Security Group 3 March, 2014 page 96
SafePay™ Demonstration
SafePay™ is setting the industry
standard for closed cash handling
Developed with leading European retailers
Over 6 500 systems installed
15% at self-service checkouts and 85% at traditional checkouts
Installed everywhere from bakeries to petrol stations and hypermarkets
Provides a new way of working with cash handling in retail stores
Security
Time-saving
Control and reporting
© Gunnebo Security Group 3 March, 2014 page 97
www.gunnebogroup.com
© Gunnebo Security Group 3 March, 2014 page 98
Customer Segment Bank
Capital Market Day March 5, 2014
© Gunnebo Security Group 3 March, 2014 page 99
Many of the acquired companies have a history doing
business with banks stretching back over 100 years
Core Business:
Safes & Vaults
Electronic Security
Cash Handling
Entrance Security
Security Services
The Bank Business: Gunnebo’s Core Heritage
Gunnebo’s ”oldest” business
© Gunnebo Security Group 3 March, 2014 page 100
800,000 retail bank branches and head offices
200 central bank distributed over 2,000 sites
Estimated annual market growth: 4-5%
Estimated market size: MEUR 9,500
The Global Bank Market
© Gunnebo Security Group 3 March, 2014 page 101
Market Drivers
Need to secure people: customers and staff
Protect values
Increased amount of cash in circulation
Growing middle class
Staff remain focused on their core activity
Reduce security guarding costs
Compliance with national regulation
Management of installed base
Bank M&A - Globalisation
© Gunnebo Security Group 3 March, 2014 page 102
Physical
Security
Electronic
Security Cash
Handling
Service
Safes
Other
Total Group Sales in 2013 (MSEK): 5 270
The Bank Business: Share of Total Sales and Product Split
Share Of Group Net Sales Product Categories
Banks
45%
© Gunnebo Security Group 3 March, 2014 page 103
Case: Electronic Security for Banks Hugo Balaguer, Product Manager Electronic Security
© Gunnebo Security Group 3 March, 2014 page 104
Electronic Security for Banks: Key Market Points
Part of a huge electronic security worldwide
market estimated at €33 billion with a 9.3 % annual
average growth*
Significant Gunnebo presence in European countries
A business under development in Americas and
Asia-Pacific
*Source: Freedonia 2014
© Gunnebo Security Group 3 March, 2014 page 105
Electronic Security Solutions
Gunnebo designs and markets electronic security solutions for:
Retail Banks (National, Regional, International):
Intrusion detection systems
Video surveillance
Remote surveillance
Head Office and Central Banks
Perimeter detection, identification & surveillance
Video surveillance
Access control systems
Security management software
© Gunnebo Security Group 3 March, 2014 page 106
Key Selling Points
Strong and lasting relationships
Bank market awareness
Comprehensive and turn-key security solutions
Adaptable and customised solutions
Mastering of all processes throughout the lifecycle:
design, development, implementation
and services
© Gunnebo Security Group 3 March, 2014 page 107
Case Study: A French National Commercial Bank
Environment National network of 3,800 branches
Concentration of several savings banks and banks
First bid in 2005 with 4 competitors
Only 2 companies selected
Customer needs Many procedures to manage (people flow, safe management
and opening times)
Central access control management (cardholder uniqueness)
Capacity to connect to remote surveillance over IP
Interface with CIT database for safe management
Key success factors Customisable safe management solution (SecurWave)
Installed base management solution (SecurManager)
Strong relationship with bank IT department
Project management expertise
Conclusion Strong and lasting partnership
Project roll-out with more than 150 branch installations per year since 2009
Recurring business including services
© Gunnebo Security Group 3 March, 2014 page 108
Demonstration Platform
Cameras
High-Security Lock
Access Control Reader
Panic Alarm
© Gunnebo Security Group 3 March, 2014 page 109
Summary
2 digits growth in the electronic security market
A leader position
Recurrent & profitable business in roll-out projects
Full process mastering of the life solution
© Gunnebo Security Group 3 March, 2014 page 110
www.gunnebogroup.com
© Gunnebo Security Group 3 March, 2014 page 111
www.gunnebogroup.com
Summing up
© Gunnebo Security Group 5 March, 2014 page 1
Summing Up: Cash Handling
SafePay™ is setting the industry standard
for closed cash handling
Developed with leading European retailers
Over 6 500 systems installed
15% at self-service checkouts and 85% at traditional checkouts
Installed everywhere from bakeries to petrol stations and hypermarkets
Provides a new way of working with cash handling in retail stores
Security
Time-saving
Control and reporting
© Gunnebo Security Group 5 March, 2014 page 2
Summing Up: Electronic Security
2 digits growth in the electronic security market
A leader position
Recurrent & profitable business in roll-out projects
Full process mastering of the life solution
© Gunnebo Security Group 3 March, 2014 page 114
Summing Up: Entrance Control
Gunnebo is world leader in Turnstiles
Gunnebo has a good global coverage
Global market is growing in our targeted market segments by around 6% CAGR
We have a newly launched portfolio of products targeting the segments with expected growth in the market
© Gunnebo Security Group 3 March, 2014 page 115
Q&A
© Gunnebo Security Group 3 March, 2014 page 116
www.gunnebogroup.com
www.gunnebogroup.com