Hello, welcome to the Loomis conference call. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question and answer session. Just to remind you, this conference call is being recorded. Today, I'm pleased to present CEO, Patrik Andersson. Please go ahead with your meeting.
Thank you very much. Good morning, and welcome to this call and the presentation of our new initiative, Loomis Pay. As mentioned, my name is Patrik Andersson. I'm the CEO of the Loomis Group. With me here today I have Kristian Ackeby, our CFO, Anders Haker who's responsible for investor relations, and also Kristoffer Wadman, who is Chief Marketing Officer for Loomis Pay. I will start with the presentation, and after that, we will open up for a Q&A. Let's turn to next slide, which is slide number two. Despite being hit by the effects of COVID-19 during the second quarter, Loomis launching Loomis Pay from a position of strength, as I see it at least. Since the IPO was more than 10 years ago, the development speaks for itself when it comes to the financial operational performance, as you can see from this slide.
Just to recap, Loomis has a leading position in many countries. We're aiming to be number one or number two. We have now over 25,000 employees globally. It's also worth mentioning that we have approximately 40,000 installed SafePoints globally, which you will see later is an important part of the puzzle when launching Loomis Pay. Let's turn to the next slide number three. Just going back a bit, to the capital markets day in 2017, already back at that point in time, we had a clear and transparent view on our strategy. Firstly, the core business like CIT, CMS, SafePoint, and then also transport and storage of valuables, is and will be the base for Loomis also going forward. Loomis is and will be investing in the core business. Still, Loomis cash is the foundation of Loomis.
Secondly, we have now also added other services, what we call adjacent services, like FX, where we have now a company in France, but also business in many other countries, but we also recently signed a deal with an ATM provider in the Nordics. Thereby we will also increase the market potential and the scope for Loomis in the future, also including the margin of the opportunity. For those who have seen this model, the further we go northeast in the model, the better we think the margins will be, or they will be better. Now, actually, we take the third step in the strategy and launching Loomis Pay. This is something that has been on the agenda since back in 2017, and been talking a lot about, during the last couple of years. It is not about one of these elements, it is about all of these elements.
The starting journey of Loomis Pay was the establishment of the innovation center in Stockholm already in 2018. The innovation center spent a lot of time on building knowledge around non-cash payments. We know a lot about cash payments, but not so much about non-cash payments and what position Loomis should take in this value chain. We later acquired GoAppified, which is a Danish point-of-purchase company with both hardware and software. We'll come back to that a little bit later. At the same time, we continued to build knowledge and competence. We now have a full management team, and all necessary competence in place. Of course, one of the Loomis strength is the strong relationship with merchants in all our markets. We can, with Loomis Pay, offer a unique full-service solution combining both in cash and digital.
Being in Sweden, we should remind ourselves, of course, that cash is the biggest payment method. More than 70% of all payments in the Euro zone below EUR 20 are made in cash. Finally, cash in circulation is growing both in Europe and the U.S. as I've said many times. There has never, ever been so much cash in the world as it is right now, and cash payments are a vital part of the payment landscape. Let's turn to the next slide four. Loomis Pay will significantly increase the market potential for Loomis. Even though cash is a big and important payment method, the market for non-cash payments is worth $1 trillion globally, with merchants, and forecasted to grow CAGR at 6%. The markets in the Nordics have been early adopters, as in many other aspects when it comes to non-cash payments.
The market and the volume is getting close to SEK 4,000 billion, the total volume of all transactions. 70% of that is in-store, however, as everybody knows, e-commerce is growing. We will focus on the SME segment, which is the small and mid-size customers as a first step. This segment in the Nordics is representing 33% of the volume, but 50% of the revenue potential. Careful estimate gives that the market potential for a payment facilitator role focusing on the SME segment is more than SEK 10 billion in the Nordics. Let's turn to the next slide number five. We will start by launching Loomis Pay in Denmark during Q4 this year. I am actually happy to say that we already signed the first customers.
We actually have 13 customers already now in the Copenhagen area. This is the result of some test selling, of course. Before we go live, we do some test selling. The response has been very positive. One of the reasons actually is the inclusion of the SafePoint concept in all of this. That's very nice and promising. We will start in Denmark, and after that, the rest of the Nordic countries, Sweden, Norway, and Finland, will follow during 2021. At the same time, we constantly are optimizing the service and the offering, of course, as we go. As a next step, the plan is to roll out in further Loomis markets down the road. Within five years, Loomis Pay should have a revenue exceeding SEK 3 billion.
The margin in this market is high and attractive. We expect the margins to be above the levels we have for SafePoint. We are following our strategy, and the strategy model as presented earlier, to add services with higher and higher margins. Let's turn to next slide, which is actually how we can present Loomis Pay in one sentence, and that is a complete one-contract payment solution for merchants. I explain a bit more about that in the following slides. Let's turn to the next slide number seven. What is the problem we want to solve for the merchants, for our customers? Before we decided to launch Loomis Pay, we did a lot of market research to better understand the situation for the merchants.
Our offer is also based on the knowledge we have gathered by physically visiting customers on a daily basis. We're out there every day talking to our customers, of course. What is quite clear and what we have understood is that the different payment types are increasing all the time, and there are number of supplier across the payment landscape that the merchant need to handle and relate to. That is to be able to manage payments in store and on the web. This takes time from the core task of a merchant. That is, of course, to meet customers and sell the goods. This slide, I will not go through all the details, but it gives an overview of the challenges for merchants and the issues that need to be managed.
I think you understand the complexity. This complexity is increasing all the time based on our research. Let's turn to the next slide, which is slide number 8. To handle this complex situation, it's of course costing both time and money, and it's for sure impacting both the top and bottom line of the merchant. We know that based on our research. What we also have seen from that research is that the SME merchant don't always have the necessary knowledge and time to successfully navigate in the payment landscape. We also know that many merchants want to simplify the situation by decreasing complexity and the number of providers, especially when it comes to the number of settlements and contracts.
As Loomis is regularly physically present, we will be able to support the merchant with spare parts, but also new terminals, for instance, if that is required. We are out there with our trucks and vehicles all the time and can give good support. Let's then turn to next page, slide number nine. This is, as you can see, the problem that Loomis want to solve. This slide, as you have in front of you, is illustrating the position Loomis will take. You see how it looks today and also what we want to achieve tomorrow. We will offer one contract, one contact, one settlement, and that is for all payments, both in store and then online. That will offer a lot of positive benefits for the merchants. Let's turn then to next page.
If you start then in the box at the left hand of the slide, you can see that Loomis Pay is agnostic. No matter how you choose to pay or which channel you choose to use, Loomis Pay provides full flexibility, all payments. Loomis Pay is the only player that can do this as we are able to handle cash. Nobody else is really integrating cash in this solution. As I said, we will also integrate the same SafePoint concept in this solution, and that will, of course, what we've seen also from the first reactions, is a very positive thing. Through the acquisition of GoAppified, we will offer state-of-the-art front and point-of-purchase devices, including software which all are certified in all possible ways. When it comes to the gateway, we have multiple acquirer solution.
We are routing payments to many different certified acquirers, and the solution includes user-friendly interface to provide merchants with transaction insights. Acquiring. Our solution is independent of acquirer and transaction will be routed to the most suitable already set by merchant. We don't want to compete with the banks in this space. At the end of the process, Loomis Pay will settle and bundle all payments to the merchant's bank accounts. This is the setup. Let's turn to next page. Here you can actually see some photos of the Loomis Pay offering. The two photos at the bottom of the slide are showing the mobile payment terminal. You have PAX A920 to the left and PAX E800 terminal to the right. That is then used at point of sale, either a mobile version to the left or then a more fixed version to the right.
Sorry. In the upper right-hand corner, you see the eCheckout solution for merchants. Upper left, you see the photo from the merchant's own view of the Loomis Pay portal. Here, the merchant can follow all things that are happening with the payment. Here, all transaction can be monitored. It's very simple and user-friendly. All of this is, of course, now in place as we start. Let's turn to next page, slide 12. The question is, of course, why will Loomis be successful in this new space? One reason is that we have direct contact with 85,000 merchants in Nordics alone, and we meet these customers physically on a regular basis, sometimes many times a week. We have 25,000 employees globally that can support the launch in the field.
We have more than 1,000 client-facing employees handling 2.3 million customer interactions per year in the Nordics. Our vehicles can have spare parts and terminals, for instance, so that the service level and uptime for Loomis Pay can be very high. Loomis has had a great success with SafePoint, where we now have 40,000, as I mentioned before. SafePoint has taught us a lot about launching new and complex services, but also that there is an appetite for new technology from Loomis among the customer base. Let's then turn to the next page. Slide 13. Loomis Pay has actually been able to attract the necessary competence and experience. On this slide, you see the management team of Loomis, and we have earlier announced recruitment of the managing director of Loomis Pay, Kristoffer Labuc, who's coming from Klarna. You see him to the left.
He's coming from Klarna, one of the bigger fintech companies in Europe. He has both the necessary knowledge and leadership to make Loomis Pay a success. However, the rest of the managed team has also extensive experience from payments and fintech from leading companies, as you can see from this slide. On top of that, we have been able to recruit senior sales and marketing people to Loomis Pay, both to the Loomis Pay headquarter in Stockholm, also out in the Nordic countries. Each country in the Nordics we launch in will have the dedicated sales and marketing organization and resources for Loomis Pay. Let's turn to next slide, which is slide number 14. Here I just want to summarize some of the key points. We will launch in Denmark this year and in the other Nordic countries during 2021.
The next country out is actually Sweden. After that, more Loomis countries will follow. In five years, we will reach a turnover of SEK 5 billion with high and nice margins. We will have a positive result by 2023. We will invest about SEK 100 million per year in product development, marketing, et cetera, during 2020 and up to 2022. I would say that this is quite a cost-efficient way of building the offering, having looked at other possibilities. This was my last slide. We are, of course, very excited to be able to present Loomis Pay to all of you. It creates many interesting business opportunities, I think, at least. Thank you for listening. Let's then turn to next page. At the same time as we operate there, we now open up for Q&A.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad. Our first question comes from the line of Thomas Graff from Handelsbanken. Please go ahead.
Yes. Hello, everyone. Thanks for taking my call. Just if you could talk a little bit about the current competition for this. How will evolve with the likes of Klarna and PayPal, and so on. What will be your role, and what are current competitors in this? Thank you.
Yeah. I think that one thing is quite clear, that there's no one in the market today that is offering to bundle all payment methods, including cash. There are a number of other players, some, as you mentioned, that are offering to bundle other solutions, and there are a number of players that are offering point-of-sale equipment. However, again, there's no one taking this position as we know. That, I don't know, Kristoffer, if you want to elaborate on that one?
Sure. No, as you pointed out, Patrik, we will most likely compete with POS and PSP providers. As this is a platform made for integration with other type of services related to the merchant, we believe that we will also be an attractive partner to many players in this landscape.
Okay. With the 85,000 contacts you have now, when you talk with them, what are sort of the current setup for them in this regard? They have many contracts with different solutions within maybe you handle the cash and another one for the online business and so on. What are the current setup and what current contracts will you push away with this, if you know what I mean?
No, that's right. I think that as I tried to show on one of the slides is that they have many different suppliers. They could be online, it could be point of sale, it could be different payment methods, it could be a lot of players. We want to go to the merchant and be one point of contact. Some of these players, of course, we like to push out, but many of them will be part of this ecosystem as well. We will be the first point of contact for the customers and handle all these relationships for the merchant. That's our proposal.
Okay. With the acquisition of GoAppified in Denmark then, what will you be able to use from them now, and what will you need to complement sort of when you can launch the full solution? What do you have and what will you need more of?
Okay. We have the acquisition for managing cash related services and hardware in place out at the merchants already. With the POS solutions that we do, again, with the acquisition of GoAppified, we can strengthen our position further at the point of purchase. That means that in store we'll be able to accept all type of digital payments, both through cards, card schemes later on account-to-account and P2P-based payments by means of cards, smartphones, et cetera. Follow with that, we are also developing in-house, as Patrik mentioned, our own gateway as well as the web checkouts. We take strength in our position at the merchants' front end by means of the acquisition of GoAppified.
Okay. Thank you for that. That's all for me.
The next question comes from the line of Daniel Thorsson from ABG. Please go ahead.
Yes, hi. Thank you very much. A very enthusiastic presentation, looks very interesting. If I can ask around your current customers, 85,000 you have, do you know if they have similar solutions in place now that you need to replace in terms of POS systems, for example?
Yeah. That's right. Why do we have 85,000 customers? I think that it's coming from that before the banks had direct contract with these merchants and handling the CIT and CMS, without. Now that interface is gone, that's why we have a direct contact with these merchants, which makes morning a good place to start, just having said that. I think that some of these customers, they have solutions in place which are then running out. I mean, the contract is expiring. Maybe they're not happy. Maybe they want to have a solution for both cash and other payments. There could be a number of reasons to change. I think that even though some of them are in the middle of a contract, there are means to get out of the contracts if they think that this solution is better.
Okay. I see. When you say SME as a client, can you give us some sense of what is a typical client in terms of number of employees or transaction volumes? Is it a food store? Is it the hairdresser? What type of client would you like to target?
A very valid question. We define it as a merchant with a total revenue around about or tops SEK 15 million a year. That area, that range.
Okay, SEK 15 million in revenue for their own business that you can address?
Yeah. To start with.
Okay.
That is not written in stone, but that's what we will target when we go to market now in Q4 and even 2021.
Yeah. It's covering all kinds of sectors, like restaurants, hairdressers-
Yeah
multiple retails. Yeah.
Yeah. We are targeting six different segments. Restaurants and bars is one. We're looking into convenience stores. We're looking into tourism, hotels, et cetera. Looking into retail, transportation, could be taxi, and also healthcare and professional services, just as you mentioned.
Okay, excellent. Another one on the business model here. Are you going to sell the product as a software service solution on a monthly subscription? Do you have, for example, percentage of the value, as you see all of the other competitors have?
It will be a mix of that, and the relation between the monthly subscription fee and transaction will vary depending on what type of package the merchant decides to go for. It will be possible to tailor-made this according to segment specific needs.
Okay. Do you think that differs from competitors today? Do they have a mix, or do they usually have transaction based? To my knowledge, they usually have transaction based, but I could be wrong.
Yeah, it varies from competitor to competitor. There are both options. We know that some charge a lot upfront for the investment. Some use revenue-based models, some use subscription models, or a mix of them.
Okay. I see. A final one on the SEK 3 billion in sales target in five years. I think that we heard a question before, does it require any more acquisitions, or do you have the go-to-market organization is already in place, you have the cash solution, you have now the POS, and you will develop your own gateway in-house, no more acquisitions needed to reach this target. Is that true?
No, not to reach this target. This is assuming what we have already today. Of course, we should not exclude that could be some kind of acquisitions to strengthen some area. We are good to go for the SEK 3 billion as we speak.
Okay. That's clear. Thank you very much.
The next question comes from the line of Erik Paulsson from Nordea Markets. Please go ahead.
Yes. Hi, it's Erik Paulsson at Nordea. I had a question. You signed an agreement with Westpay around a year ago for payment solutions, I wonder how that comes into play now and going forward. I think it was a four-year contract signed then.
Yeah, that's right. That was in the early stage of this, and it was more for the operational business in Sweden, and does not have a direct impact on this business case, as you see. It's more towards the Swedish market, it's more towards the Swedish operation, and it was a bit earlier in this respect. That's not taken into account in this business case.
All right. Great. Thank you very much.
The next question comes from the line of Johan Dahl from Danske Bank. Please go ahead.
Good morning. I was wondering, could you talk a little about this SEK 3 billion target that you're looking at? What does that basically mean in terms of number of customers, et cetera, and penetration in your current base? Is it possible to talk that a little bit?
Yeah, we can do that. We have just taken the Nordics as an example, so you know the magnitude. To be successful in the Nordics, we assume, and that's not the total business case, but this is part, but just to give you an understanding, is that we will transform 20% of the existing customer base into this solution. 20% of all the customers we have in the SME segment will be transferred, or rather say, they would like to have this service. Then a couple of small percentage points from totally new customers. That's what we have assumed in the business case for the Nordics. When you go look out in Europe, it's much, much smaller numbers than that. Just to give you a flavor of what we think in the Nordics.
I heard what you said regarding transaction based and fee based, if you compare the visibility in these contracts compared to SafePoint, for example, what are the main differences, or how are they similar?
SafePoint is a subscription. The main thing with SafePoint is it's subscription. We have a monthly fee, and that covers everything. Here we have a subscription model but also based on the volume of the transaction. It's a bit different than SafePoint.
To what extent will you share revenues with partners that you've needed to enroll into this offering? To what extent are revenues sort of ending up entirely at Loomis?
In this respect, we think that, of course, we want to keep most of the revenues as we provide this service. Of course, I think that everybody's starting to understand fintech. It's more about partnering up.
Creating some kind of ecosystem. In that respect, we are very much open to work with other players in this field. I think that, of course, there are some direct competitors, but there are many partners we can have, and we actually have already been talking to a number of them as we speak.
Can you put some numbers to the organizations, Patrik, that will actually sell this? If you look just how it looks today and where you expect this to be in perhaps 12 months' time.
Right now we have about 50 people in Loomis Pay. Of course, many of them are consultants working mostly now with the development work of the solution. Of course, it's ready to go, or in a couple of weeks it's ready to go. As we now move on, I think that we will strengthen more and more the sales and marketing organization, both in the countries and here at Loomis headquarter. I think that one key element is, of course, to be able to, together with Loomis Pay people and the salespeople in Loomis, to build up the merchant base. I assume that we will, in a year or two years' time, be around 120 people about in the Loomis Pay organization, about.
Thanks.
The next question comes from the line of Matija Gergolet from Goldman Sachs. Please go ahead.
Yes, hello. I have three questions from my side. On your revenue target of SEK 3 billion. Can you just help us understand, you talked about the Nordics, you talked about some European clients. Does the SEK 3 billion also include, say, some revenues in the U.S. first of all? Within the SEK 3 billion, is there now some element of, say, SafePoint incremental sales? The second question is, we are cash handling analysts, and we need to learn a lot about new things about digital payments. Can you help us understand what's really here your proprietary software, proprietary, let's say, IP that would be difficult to replicate? I understand that you have the client relationships, you handle the cash, presumably you also need to develop some proprietary IP to be able to be really successful in the term. What is that exactly?
Thirdly, you mentioned, okay, there is a whole ecosystem behind it that now Loomis Pay will handle to basically simplify the merchant's life, job. Are these already established or are you basically going to establish these in the next few months? In a way, what do you think is the most critical part? What would be for you the most difficult part in establishing these relationships?
Okay. Thank you very much. Good questions. I can take the first one, and then Kristoffer can take the second one, and I come back on the third one. The revenue, we have in this business case, we have the basics, of course, the Nordic countries, and then we have some inroads into some of the European markets in this business. It's not total Europe, it's some markets in Europe. That's included in the business case. U.S. is not included in the business case. However, we will not exclude going to the U.S. but of course that will require some resources, and of course it's easier in a way to expand in Europe as we have a license that can be passportable.
SafePoint is, in a way you can say that SafePoint is included because that's often in the part of the package when we go to the retailer, SafePoint is included. That is not, so we say that the total European SafePoint potential is included there. No, it's just the additional SafePoints we sell going to these merchants, if you understand what I mean.
Yeah. Yes.
Yeah. IP, should you talk a bit about that, Kristoffer?
Yeah. Unique selling points as well, as I understood the question. We know that Loomis Pay has many confirmed strong, unique selling points, helping their merchants to become more efficient, productive and successful in their daily work. Our unique ability to offer this one-stop shop omnichannel solution for all payments, including cash, makes us confident that we have an important role to play in this market. The one settlement for all payments and the possibility to add credit solutions to that, meaning next day settlement already, is something that will make us unique. Also, our presence in the field, like Patrik mentioned earlier, we know that uptime for these types of systems are super critical for the merchants. With our daily presence in the field, we are sure that we can provide something that most of our future digital potential competitors are not capable of doing.
The third question, yes, sorry.
Sorry, just on that one, if I may. Is there any software involved let's say, we saw an acquisition this morning, but now that acquisition, say, is worth, let's say, what, SEK 60 million. Here it seems that the business case is now massive, is a significant multiple of that acquisition. Is there any additional, say, software IP that you have developed, let's say in the last one, two years, let's say nobody else in the market has. From what you're saying, okay, you are the only one that has the trans relationship. Yes, how easy is for somebody else to say, "Okay, I also have the relationship here. I'm a supplier of other things. I supply not just general goods or I do cleaning, and therefore I have a lot of customers as well. I will start basically offering them also on IP to handle their payments as well.
As Patrik mentioned earlier, we're also developing our own payment gateway, the abilities and capabilities of that one gives us the opportunity to really realize this service. The potential and abilities that comes with our own developed omnichannel gateway, managing both online and offline payments, then acquiring agnostic will allow for several different type of acquirers. The one settlement with the credit service will put us in a unique position in the market.
Okay. Thank you.
The last question you had, my CFO remind me here. I said at one point of time, SEK 5 billion taking turnover. The SEK 3 billion, as mentioned in the press release, it's SEK 3 billion that we're aiming for. Just to give that clarity. The difficulty is to reach the merchants to build the volume to get the contract. The challenge is then in the sales and marketing to scale this. Of course, all people working with the technical aspects say that maybe differently, but in my view, it's really to be able to convince the retailers that this is a good solution. We have a good pitch. We've seen the last couple of weeks that it's working, but I think that that would be the challenge, yeah.
Okay. Very clear. Well, thank you very much.
Thanks.
The next question comes from the line of Viktor Lindeberg from Carnegie. Please go ahead.
Yes. Hi, guys. First of all, on the sales target, and maybe forgive me if I missed anything here during the presentation, but when you speak about SEK 3 billion in sales, is that sort of on top of current sales, or, I guess there's going to be some sort of cannibalization from converting customers, which currently has a pure CIT engagement with you into a Loomis Pay solution. Will there be a net positive impact of SEK 3 billion? Is that your expectation?
Yeah, that's right. It's net. We have calculated back and forth, and this is the net effect on top of everything else we have in the pipeline. Yes.
Okay. Thanks. Another question on, you're saying that you're going to have strong or good margins. Could you, first of all, quantify that? Secondly, when you look at other or from the merchant's point of view, if you're going to have good margins, in my world, that's double-digit margins. If that's the case, I guess the merchant has to give away quite a lot for you to make that money or the sort of partners in this, will have to give away quite a lot. In my world, this is a low margin business and then typically based on transactions and so on. How is that really possible to make that kind of money?
No, I think that's a good question. If you follow many of the competitors, they're measuring margins and profitability in very different ways. It's quite difficult to get a sort of total good picture on that. What we have said in our calculations is that we will have margins above SafePoint levels. SafePoint varies, of course, from country to country, but it's around 20%. That is what we're aiming for. We don't think that that is too high, because we have that for SafePoint, and we think that this is very reasonable. We made, as I said, many calculations on the price level and acceptance and things like that. We think that's very doable. It's very difficult to compare that with other players because, as I said, they are measuring it in very different ways. That's what we're aiming for. Kristoffer?
Yeah. Adding to that, I think it's important to keep in mind that we are not a regular PSP processing payment and charging for that. In this offer, there is much more, like the POS system, we offer quick settlement, et cetera. Cannot be one to one compared with the standard pure payment transaction company solution.
I just want to mention one thing which is important, is that when it comes to SafePoint, we have settlements in the bank account of the retailer the next day. That is what we're also going to offer to the retailer, that all payments will be settled on the bank account the next day. All payments will be settled, including cash. That I think it's a very strong pitch. That is the secret to some extent behind SafePoint, one of the secrets or one of the pitches behind SafePoint, that is what we're going to offer here for all payment methods.
Okay. A question on the competition side. You mentioned some of that early in the presentation, but if we take two quite large Swedish companies, iZettle and Klarna, for instance. Are you going to be partnered with any of them or are you seeing an opportunity to grab a piece of their share just to see where you think you fit in?
I think it's very difficult to say. To some of these players, we will be competitors for sure. If you compete on the payment terminals in store, we are competitors. I don't see us as direct competitors to Klarna, for instance, if you take that example. On the contrary, I think we need some of these players in our offering, and it might be that they need us also. I see that there is some competition, but there are a lot of partnerships going into this as well.
Okay. Final question from me. On the financials, you were mentioning SEK 100 million in costs. I think you said net, I don't know what the expression was in the press release, net cost or something like that. Will those SEK 100 million be reported as non-recurring items, i.e. below the EBITA level? It will be reported in the other segment, that I understand from the press release. Will it be non-recurring items?
As we look at it right now, we do not look at it as non-recurring items, so it will be part of the operation. It's a mix of also revenue and cost, we should say. We expect the net negative impact on EBITDA to be SEK 100 million on a yearly basis.
Okay, in terms of sales, how will this be reported?
It will be revenue, and you will then have a revenue on the other segment. If you look in 2020, for example, that will of course be a very small number.
Okay. It will be in the other segment, not in Europe then?
Exactly. In 2020, that's our structure.
Okay. Thank you.
Just as a reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. The next question comes from the line of Johan Eliason from Kepler Cheuvreux. Please go ahead.
Yeah. Hi, this is Johan at Kepler Cheuvreux. Just to get a bit of an understanding how this will impact your average SME. I understand the user-friendliness of having just one contract for all of these payment solutions, and obviously the key pitch of getting paid the next day or independent of what type of payment the customer used. If you take one of these average SEK 50 million turnover SME, how much do they pay for these aggregated solutions today? What are the hard savings you are putting on the plate for him from day one?
As Kristoffer said, it's very difficult to make a direct comparison because there are so many different ways of getting paid. When we look at it, the total package of our offering, it's very price competitive. Of course, we have checked if we bundle everything and offer that to a certain price, I think that our solution is very price competitive. Without getting into all the different details around pricing, because then it gets a bit sensitive.
It sounds like a very neat method for the SMEs to have. We are seeing a lot of shops in Sweden with no cash accepted, et cetera. Do you think this could reverse that trend a little bit to get some more revenue potential for some of these?
Yeah, that's a good question. We think so. We think we can help the merchant to make it easier to handle cash, and hopefully they will use the SafePoint. If not, we can solve that as well. I think it makes it much easier to handle cash as a bundled service together with everything else. The answer is yes.
You talked about a license that you can transfer in Europe. Is this requiring some sort of new additional banking license or so, or do you have everything in place already?
We have everything in place to be able to expand in the Nordics and then later on into Europe, yes.
Okay, excellent. Sounds interesting. Thank you very much.
Thanks.
The last question is a follow-up question from the line of Johan Dahl from Danske Bank. Please go ahead.
Yeah, just a quick follow-up. What is the P&L impact in the last 12 months from this initiative? To understand the delta as you continue.
I hand over to Kristian.
Last 12 months, or rather, we included from this year what we call Loomis Pay. We don't disclose for the innovation team. This first half of this year, it was approximately SEK 20 million.
Thank you.
As there are no further questions, I'll hand it back to the speakers for closing remarks.
I will just thank everybody for listening in on this short notice and thank you for all the very good questions. Have a nice day and thank you very much.
This now concludes the conference call. Thank you all for attending. You may now disconnect your lines.