Thank you very much, and good morning, everyone. Welcome to Loomis' third quarter 2026 presentation. My name is Aritz Larrea, President and CEO of Loomis. Joining me here today are Tobias Hägglöv, who took over as our CFO in September, and Jenny Boström, our Head of Sustainability and Investor Relations. I will start with the highlights of the quarter and then take you through our segments and financial performance before we open the line for questions. We delivered a very strong third quarter with record high revenue, operating income, and operating margin. Revenue exceeded SEK 8.1 billion , with currency-adjusted growth of 6.6%. Our International business line had another strong quarter, supported by continued demand for transportation and storage of precious metals and other valuables. We also delivered another quarter of double-digit growth in Automated Solutions, as retailers continue to automate and outsource more of their cash handling.
The strong development in International and Automated Solutions over several quarters is also gradually changing our business mix. These businesses are becoming a larger part of the group and increasing our diversification. This is very much in line with our strategic priorities. We increased our EBITA margin by almost 2 percentage points year-over-year to above 15%. This represents the highest margin in our history, and I am pleased to see that the execution of our strategic priorities and the efficiency initiatives we have implemented continue to support margin expansion. On a rolling 12-month basis, our operating cash conversion was 84%. In the quarter, cash conversion was lower, mainly due to higher working capital as we grow, particularly in Automated Solutions, as well as some timing effects.
Moving on, I would like to highlight our recent acquisitions, strengthening our footprint in Latin America, a region characterized by high cash usage and attractive long-term growth opportunities, which we highlighted at our Capital Markets Day. In July, we doubled our operations in Argentina by acquiring Transportadora del Interior. We have now a presence in Argentina's three largest and economically strongest regions. The acquisition has already had a positive impact on Loomis Argentina's performance in the quarter. Most importantly, in October, we completed the acquisition of Hermes Transportes Blindados, the most significant acquisition in Loomis' history. Hermes is the market leader in secure transportation and cash management in Peru. It has around 1,000 customers and more than 3,000 employees. In 2025, Hermes had a revenue of approximately SEK 1.2 billion . The enterprise value of SEK 4 billion corresponds to 6.6x adjusted EBITDA multiple for 2025.
With that, let me turn to Europe and Latin America. Europe and Latin America delivered another solid quarter, with a revenue of almost SEK 3.8 billion and currency-adjusted growth of 3.8%. International was the main growth driver, up more than 25% compared with last year, as demand for transportation and storage of precious metals remained strong. We also saw good growth in Automated Solutions, while ATM returned to growth. However, our Foreign Exchange business slowed following a very strong third quarter last year. EBITA increased to SEK 510 million , and the margin improved to 13.4%, reflecting a favorable business mix and continued efficiency improvements. Let me now turn to the U.S. The U.S. delivered another very strong quarter. Revenue reached a record SEK 4.3 billion , with currency-adjusted growth of 8.4%, and the organic growth was 8.1%.
All business lines grew compared with last year, with particularly strong development in International and Automated Solutions. Higher fuel prices and the related price indexation also had a positive impact on the organic growth. International benefited from continued demand for cross-border transportation of precious metals, and Automated Solutions delivered another quarter of double-digit growth. A good example of this momentum is our partnership with a large U.S. retailer, which plans to deploy Loomis SafePoint Smart Safes across its network of stores. Installations are already underway. This partnership illustrates the broader opportunity we see as large retailers increasingly automate and outsource their cash handling. The operating income increased to SEK 834 million , reflecting revenue growth, a favorable business mix, and the continued effects of our efficiency initiatives. The EBITDA margin was above 19%, a new record for us. Now let me move to the SME/Pay segment.
Revenue in SME/Pay increased to SEK 100 million in the quarter, with currency-adjusted growth of 56%. More than half of the revenue came from cash-related services to small and medium-sized businesses. As we have discussed before, Loomis Pay is moving from its previous point-of-sale platform to new locally tailored solutions. This transition has taken longer than expected and temporarily affected both revenue and profitability in the quarter. We expect the migration to be completed by year-end. Overall, the broader SME business is developing well. We are growing our customer base and seeing increasing interest in our combined cash and digital payment offering, including areas such as sport arenas and healthcare. I'm confident that our strategy to focus on SMEs is the right one, and we continue our work to scale the business and improve profitability. Let me now turn to sustainability. We are advancing our sustainability initiatives.
Our new branch in Bordeaux is a good example of how sustainability and operational efficiency can go hand in hand. By bringing previously separate operations together, we have improved both operational efficiency and optimized our routes. The facility also incorporates renewable energy, electricity, HVO-powered vehicles, and a water recycling system. Looking at our targets, we continue to reduce our Scope 1 and Scope 2 emissions despite business growth. On a rolling 12-month basis, they were almost 28% below our 2019 baseline. A key driver is the switch to biofuel, where HVO now accounts for close to 8% of our total fuel consumption. On health and safety, we have made progress towards our targets, but of course, this is an area where we are never done. Employee safety is our highest priority and remains top of mind. Lastly, strong governance is fundamental to being a sustainable company.
During the quarter, we updated our anti-bribery and corruption policy, further strengthening our work in this important area. 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 and continue to improve profitability. This resulted in record-high earnings per share of more than SEK 10 , which is up 32% compared with the third quarter last year. During the quarter, we had restructuring costs related to efficiency measures in Europe. As we have discussed before, we continue to review our European branch network and see further opportunities to improve the efficiency of the organization. This work is ongoing, and we expect additional restructuring activity in the fourth quarter. Let me also briefly explain the timing effect from the Hermes acquisition.
We issued a EUR 300 million bond in September, which means the additional financing cost was already included in the third quarter. However, we did not complete the acquisition until October, so at the end of September, we were still holding the proceeds in cash. This is why our net debt to EBITDA was at 1.52x at quarter end. Following the acquisition, leverage and financing costs will increase, but we expect to deleverage relatively quickly back below 2x net debt to EBITDA. Maintaining our investment-grade credit profile remains a key priority. With that, let's turn to the longer-term development. Looking at the longer-term development, we're making good progress against our strategic priorities. Growth has been strong, and profitability has improved. We continue to position ourselves for long-term profitable growth, both organically and through acquisitions.
On a rolling 12-month basis, our EBITA margin is 13.7% in the upper part of our 12%-14% target range. We expect to remain there for the rest of the strategic period, which ends 2027. At the same time, we should not extrapolate the margin expansion of individual quarters. As you know, business mix will vary, and International, which has been particularly strong, is a more cyclical business. We also see a competitive pricing environment, with customers becoming more price-conscious, and the broader social and economic environment could lead to some cost pressure, including on labor costs. On the positive side, Hermes will be included in our reporting for the fourth quarter and will contribute to both revenue and profitability. Overall, we're very pleased with the performance and the progress we're making. We're delivering on the strategic priorities we set at our Capital Markets Day in 2024.
I'm confident in our strategy and our ability to keep delivering profitable growth. This concludes my summary of the third quarter. Operator, we are now ready to take questions.
Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one 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 two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from Simon Jönsson from ABG Sundal Collier. Please go ahead.
Good morning, guys. Hope you can hear me.
Yes, we do.
I want to—
Good morning.
Hi. Good morning. I want to start with the U.S., the very impressive margins here again, I have to say. I think you said before, earlier this year, that we should view the 18% level as sustainable, and now you are at 19%. How should we think about 19% now then? Should we still see this as a sustainable level, or do you want to highlight any kind of one-off factors here contributing to the 19% level that could make that unsustainable for the U.S.?
Thanks for the question, Simon. The first thing is to say that we continue to see that strong development of the U.S. business. We saw all business lines growing, and particularly with Automated Solutions in the International business. We never disclosed the 18% that you are talking about, but one important thing to highlight here is that we have a limited upside, as we have already completed our efficiency programs in the U.S. As I commented in my script, we are starting to see price pressure coming from both competitors and customers. I think it is good to consider that we will try to remain around that 19%.
All right. Thanks for that. On the U.S., you also highlighted, I think you said you are rolling out SafePoint with a large retail customer. Is this something that has contributed here this quarter, or is that something that will boost growth in the coming quarters? What should we expect in terms of implications for what you said about that customer?
The rollout is ongoing, but I would say that you should expect impacts Q1 next year from that one.
All right. On that topic, you highlighted that working capital was increased here this quarter due to Automated Solutions. Is this part of building up for higher deliveries? Could that lead to working capital buildup in Q4 as well, or was the increase in this quarter related to something else?
No, it is that. You also need to consider that we are expanding CIMA in the U.S. as well, and that requires there is a higher delivery time from Italy to the U.S., and we need to build that inventory, not only on the final product side, but also on the parts side, in order for Burroughs to then afterwards do the maintenance of those machines.
Correct. It will tie a bit more working capital there.
Got it. On Europe, you also had margin improvements, but I guess it is fair to assume that it continues to be largely driven by International, the mix effect from that business. Would you say that you also are seeing improvements in the other line of business on the margin side?
I think it's not only International, it's also Automated Solutions that we had a very great quarter there. Just remember that, on the other hand, we've had headwinds there on France with the ATM business, and also on the FXGS side. First of all, we decided to exit a non-profitable contract there on the FX side, and on the gold side, yeah, transactions are a little bit not that high. Those are several headwinds that have impacted the quarter. But I would say we had an impressive quarter in Europe, just improving 50 basis points on EBITA margin.
All right. Related to the restructuring charges that you continue to take in Europe, and considering where you are in the sort of underlying business, excluding International and Automated Solutions in Europe on the margin side. Now when you're taking more charges, more initiatives on the restructuring side in Europe, is that because you have seen results of the previous restructurings, or is it more like a continuation of what you're already doing, that you're just prolonging those processes? Can you explain a bit the results you've seen so far on the margin side from that?
We can summarize it as a continuation of the work that has been done. If you've seen, part of the margin improvement comes from the previous restructuring that has been done. But this is an ongoing work. We haven't finalized yet the study of the European business, adapting it to the new normal business. So there's still work to be done, and you will see some restructuring costs as well coming in in the next quarter.
Yes, I see. Just a final one from me, if I may. It's on the capital allocation side and gearing. You said that you or you reiterated that you expect a quick deleveraging here after the Hermes acquisition. Can you give any sort of broader outlook on how quickly you will be below 2x, and what that means for your plans or opportunities for next year in terms of M&A and buybacks, and the timeline on that?
If you recall, what we said is that when doing the acquisition, we were going to be above 2 x, and that in less than six months, we expected that to be below the 2 x. That is what we said. We could be a bit quicker on coming below 2 x than six months. I think it is going to be quicker than that. As you know, we have still a very strong balance sheet to continue with our M&A activity, and we have a healthy pipeline there as well. We just need to meet the needs of the sellers with our needs and our expectations of return of investments, and we will continue executing.
Okay. Excellent. Thanks for that. I will get back into the queue.
Thank you very much, Simon.
Thank you, Simon.
The next question comes from Suhasini Varanasi from Goldman Sachs. Please go ahead.
Hi, good morning. Thank you for taking my questions. Just a couple from me, please. I just wanted to get your revenue exposure to NCR Atleos in the U.S., if possible, please. If there are going to be changes in some of the contracts there, I just want to understand the risks to the business. Secondly, when we think about the margin expansion that you have seen because of International business, just wanted to check how much it has contributed to margins this year, and if it normalizes, what could be the unwind in 2027? Thank you.
Thank you, Suhasini. The first thing, the Brink's NCR, it's important to consider, as we mentioned before, that it's both a customer and a supplier of us. We don't see any immediate material impact for us. We've always said regarding ATM that we've always said that we are not interested in the manufacturing side of the business, but that we see a lot of opportunities on the ATM services side. We've also commented around, it's going to be a tough integration for Brink's. That's going to keep them occupied as well, and they're going to be very, very leveraged. We see less competition when running our M&A activity. But no major or material impact for us due to that acquisition from Brink's.
Regarding margin expansion, you know that we don't disclose or we don't guide you in the future, but I would just say, trying to summarize that looking ahead, Automated Solutions remains a growth opportunity, and we still believe that International has an attractive long-term potential. I mean, one important thing there is that we have increased certain lanes, and we have increased the capacity of storage as well. So we feel confident that International will behave well moving forward. One thing that you do need to consider is from Q4 onwards, Hermes will also contribute to both revenue and margin.
Thank you very much.
Then the next question comes from Dan Heimer from SEB. Please go ahead.
Good morning.
Morning.
Two more questions from me as well. Hi. Maybe starting a little bit on U.S., I mean, fantastic performance from your U.S. team. In terms of organic growth there, is it possible to split what is price, what is volume, and fuel charges in that? I am mostly interested in understanding what the volume component was in the U.S. organic growth, having Q3.
I mean, when you look at the price indexation, I mean, you need to understand that this is just a mechanism for managing the changes in fuel costs rather than an underlying growth driver. So a way of looking at that is just consider that the fuel costs for us represent 2%-3% of our revenue.
Okay, got it. In terms of, you mentioned that large U.S. retailer, since you mentioned, I guess it's a little bit more sizable contract. Are we talking four-digit number of Smart Safes to be installed in 2027 and going forward, or is that the right way to see that contract?
Just think about 2,000 units being installed there.
Okay, thanks. Switching to Europe, maybe the situation in France, in terms of the protests. Are you able to maintain normal operations so far during Q4, or anything I should be mindful when putting estimates for Q4?
Yeah, as you can imagine, I mean, we're closely monitoring the social unrest in France, and actually, they're talking about some social unrest as well this weekend in Spain. We've taken measures to safeguard our employees and operations. So, you could see consumer activity being temporarily affected in certain areas, but we don't see any material impact in our ability to service our customers.
Okay, very good. The final one from, if I may, Hermes included now from Q4, and I guess, of course, historical figures in the filings, but is there any seasonality to be aware of or any accounting differences when it comes into your book, or is the margin levels that I am seeing in the public filings a good approximation for how it will contribute to your earnings as well?
No seasonality to highlight there on Hermes.
Okay.
On the accounting side, it is very similar, so there are not many differences there between what we have today.
All right. Very good. I think that was all from my side, so thanks for answering my questions.
Thank you very much.
Thank you.
Thank you.
Then the next question comes from Viktor Lindeberg from DNB Carnegie. Please go ahead.
Morning, Viktor.
Good morning. Thanks for taking my questions. A few additional, maybe overlapping with the ones you have already received. But starting on the restructuring in Europe, could you say the expected level of restructuring costs that you have, that you foresee in Q4? Or maybe ballpark similar level as we saw now in Q3?
If you look at the full-year there, you can expect this year's restructuring costs to be between SEK 50 million and SEK 100 million lower than last fiscal year.
Okay. That is clear. Coming into France, and then the ATM density and network, I note that France being down 6% year-over-year in terms of revenue. Just to get my head around the timing effects when looking into Q4 and onwards, would you say that this headwind is as bad as it gets now in Q3? Or would you say it becomes worse before you start to get out of these comparatives?
No, it will not get worse, Viktor. I think the issue that we have had there is that the rollout has been slower than initially expected, and we have had some additional temporary costs there. We do expect the implementation to be largely completed by year-end. So, you should see same levels as today in Q4, and then a slight improvement in beginning of next year.
Okay. On the price mechanism, the price pressure that you mentioned, can you talk a bit more about geographical, or product, or end customer findings here? Or is it broad-based across all segments and products?
If I would have to highlight, I would focus more on the U.S. in that sense, not in Europe.
Okay. International, I think you made a public comment also in the pink paper here in Sweden about International is starting off on a good note in Q4, although also facing more difficult comparatives. Is it your gut feeling now going into Q4 when we look at these comparatives, that your organic revenues still can sort of reach the level that you had in last year, or should we expect it to be, in absolute terms, good level, but not maybe as great as last year? Just to understand the narrative that you were phrasing here in the media.
I think it's what you stated in the second case. We see that Q4 last year was really strong in International business side, and then we had a very good Q1 of 2026. Again, we remain positive because we have a lot of opportunities there. As I said, we've expanded our capacity and geographic service lanes, so we have strengthened our ability to capture demand there. It's not going to be as good as Q4 last year, but we expect to have a good International quarter.
Super.
Thank you.
That is clear. That is all from my side. Thank you.
Ladies and gentlemen, there are no further questions at this time, so I would like to turn the conference back over to Aritz Larrea for any closing remarks.
Thank you all for joining us today, and if you have any follow-up questions, please don't hesitate to reach out. Thank you very much. Bye-bye.
Thank you.
Ladies and gentlemen, the conference is now over.