Earnings Call: Q4 2015

Feb 4, 2016

Good morning, everyone, and most welcome here to the full year report from Loomis. Very delighted to see so many visitors here today to listen to this event. So without any further ado, let me go through the content of the presentation here, where we will look upon the highlights, of course, look into the different segments, a few words about the financials, and as always, we will finish off with a Q and A here. A couple of highlights. Organic growth of 3% and mainly driven by the growth in the U. S, which with a 10% and if we add back the fuel fee due to the low fuel cost, we are at 12% organic growth, which is, of course, a historical number for Loomis. We never have had anything like that in U. S. Before. But we also see some other areas in the group where we see growth. Exciting growth, we definitely see in Turkey and in Argentina, I will come back to that, but also in Spain, where we see the organic growth now for the Q2. And it's a trend there, and we haven't had that for many years. So also very exciting there. The operating margin improved by more than 1 percentage point. And of course, the growth in the U. S. With Safepoint and CMS is a contributing factor to that. But also our continuous work with efficiency. And as you know, our whole business model is about small improvements in each and every one of our smallest entities, the businesses, and that together gives us healthy growth in the operating margin. The earnings per share is up 15%, and the Board has proposed a dividend, which is up 17% up to SEK 7 to be decided at the Henley Shareholders Meeting here in May. And I'm also very pleased to announce that the Board have appointed Patrick Anderson as the new President and CEO, and he will be joining Loomis here at the latest early May here. So very pleased to see Patrick coming on board with Loomis. If we go to this slide, which for you who follow Loomis is very familiar with, the nice trend continues. We have had 11.6% organic growth in Q3, and we had that this quarter again. And as you know, we normally have the 3rd quarter as the strongest quarter due to the effects of the vacation period in certainly in Southern Europe. So that we can match that number here now in the Q4 is, I would say, very successful for us. If we put it this way, you can see that the increase here in the Q4 of 'fifteen is one of the biggest increases quarter over quarter, year over year, which we have had. So of course, very pleased with that. And we will dig in a little bit more what why that is. And the essence of it is in this slide really. It's our improvements in our smallest business units, the branches. You can see here back in 2,008, we had a 30% of our branches, which did not make money. Today, that number is 14%. But that's not and that is, of course, a tremendous achievement that we can see so many more branches making money. But even more important is also the movement inside the gray area here, where we can see when we analyze it because we follow each and every one of the branches, we can see that there's almost all of them is doing small, small steps of improvements year over year. And this year, particularly in 2015, we have seen a lot of branches in the U. S. Moving from the red into the gray, but also a few branches or almost fifty-fifty between U. S. And Europe. And particularly France, we have had seen several branches also becoming profitable, going from an area of unprofitability. Very pleased with that also, of course. So let's see look upon Europe. A few words about that. The organic growth is 1% and as I said initially here, driven by Turkey, also by U. K. As we know, we took a huge contract there in which has been rolled out and is now giving us that organic growth, also in Argentina and what I just mentioned here, also in Spain. Turkey, we've won 3 major contracts here from retailer retail chains, several 1,000 stops or 7,000 shops, which is being serviced by us. This is being rolled out as we speak. We have more than 50% organic growth in Turkey. And as you know also, we have now bought the last 40% of that company. So it's now a fully owned subsidiary of Loomis and a very exciting market for us. We said that for many years, and we can now finally see that becoming true. And again, not to be underestimated, Spain has been one of the most developed markets in Europe or in the world, actually, when it comes to cash handling and a market which is also having a huge amount of CMS, that we can see growth there again is, of course, very good for us and for the margin for the whole group here. We continue, however, to see a decline in cash usage. We don't think that we lose any market share in the Nordic countries. However, when we compare that to the negative organic growth a year ago, we can see that it is significantly less right now. And there's a few things happening in Sweden, for instance. We have the exchange of the notes and the coins here, which is going to contribute to the organic growth here during 'sixteen and also into 'seventeen. And there's a couple of other things happening in the Nordic country otherwise as well. The real growth is slightly higher because of the Cardtronics acquisition in the U. K. And I will come back and talk a few words about U. K. Later on here. We when it comes to the operating margin, we bought the company ViaMat here in 2014. And the merger there between our operation and their operation in Swiss, they were the significant market leader in Switzerland, has is now creating they were merged here in the beginning of the year, and that continues to give us good margin improvement there, and the synergies is being materializing. We had in France, and I'm sure that all of you are aware of the sad things that happened in France here in November. We had some impact of that. I mean, the area of Paris where this terror attacks took place is actually 30% of the business in France, which is the biggest market in Europe. So of course, we had some concerns about the impact on our business there. And there was an impact for a week. We couldn't hardly almost a week, we couldn't service the client. But at the end of the day, those volumes which we couldn't service then, we could then at least do the CMS for later in the month or in the beginning of December. So overall, that didn't have a major impact on our business in France. And France, in general, have gone through a couple of restructuring exercises here during the year, and we see now the full effect of those. And the performance of France in terms of margin improvement is very impressive, although there is no real organic growth there. And as always, and that's almost boring around Loomis, you see that we always talk about that. I've done that for many years now. Those small improvements in each and every one of the entities and units, That's really what drives it. It's very rarely any big events. It's those small improvements all the time. If we come to U. S, the most astonishing number there is, of course, the organic growth, 10%. And if we add back the fuel fee, it's about 12% inorganic growth. As I initially said here, we have never seen any growth like that before in the U. S. And there is no reason really to see why that wouldn't continue. We have an excellent market position right now. We are rolling out the SafePoint more than we ever done before. We have a pretty nice backlog when it comes to that as well. And also some other parts of our business, we feel ourselves absolutely as the market leader in the U. S. Right now. So SafePoint, and you are familiar with this. We rolled out here in September a new version together with our manufacturing partner, Tydeltner, in the U. S, a new version of Safepoint, as you can see, branded in a Loomis way and with some additional features. That rollout have been very successful, and we have now 14,626 by the end of the year exactly installed safes, which means safes generating cash or services from us by the end of the year. Numbers of sold safes are on an annual basis for 2015 exceeded 5,000. And so we have quite a backlog there to be installed during 2016. And we continue, of course, to sell safes in the U. S. The other piece here is the CMS rollout. And we announced in 2014 that we gained a huge contract or a contract with rollout of 30 sites with Bank of America on CMS. That is now completed. The last of those vaults were rolled out here in the Q4. And when we see then the percentage point of CMS versus CIT, then you can see that, that also have a healthy growth. From the 18% back in 2,008 to now that we are at 32% in 2015. We had at that time, I remember that back in 2008, we said that we had a target of achieving 30%. We would be very pleased when that happened, and now we have managed to exceed that as well. And I think we said that many times, the beauty of the CMS is obviously that there is a relatively high cost to set up the operation and to get the vault in place and people trained and the machinery there, but then you can add a lot of volume to it. So the incremental profit on or the profit on incremental volumes is really nice and sweet. And so this growth is, of course, helping our profitability and the operations in the U. S. And then as I said, the lower fuel fee has an impact about 1.5%, added to the 10 percent a bit here, then we're adding up at 12% in the real organic growth here. The real growth is also affected by our acquisition of Dunbar Global Logistics. It's a mini ViaMat, which we acquired in 2014. We are a strong believer in that business. This business, however, although the name is Global Logistics, was very local U. S. For being global. But it's major the majority of that business is really diamond and jewelry shows around U. S. But it's again, it's something fits very nicely in with the footprint which we have. As we have the biggest footprint in U. S, we are able to service those all those things, which Dunbar was not able, although they had the business there. So what is then driving this growth then? Because even as running the business, I think, is astonished by the power of which we have in the marketplace there. And I think it comes down to this. And this is a slide I borrow from myself from the Capital Market Day, which we had in 2014, which you all had there back in London. And it's really about the quality. We decided some years ago that we should start investing in the U. S. Operation because we saw that there is a possibility to get more of the CMS outsourced. And also to gain other market share, we thought that the quality is going to be a key to it. And I think we believe to be we seem to be right now. I mean, we have done buildings. We've done more than of our 25, 30 major vaults have been upgraded or new built. Standardized operations, standardized building drives quality, drives uniformity. We can it's easier to benchmark. It's easier to take people from one place to another. It's easier to share best practice. That is something which has been going on, and we continue to do that. During next year, again, we're going to be 5, 6 new vaults being opened or reopened because, of course, we already have operations in those cities, but we will have new sites there. We've also done investment in trucks there mainly because we're growing. So also they're on the CIT basis. So that continues. But it's also, of course, it's all about fuel economy, getting better trucks than we have had in the past, one man vehicles, etcetera, so also that. We're rolling out a very exciting thing right now as we speak, track and trace. That will drive quality even further in our operations. This is a CIT tool of how we manage the pickups and how we are performing in the trucks, how much time we're spending in different places. So we can track our package, something like some of our distribution colleagues are already doing, but we are now implementing it. It's a system which we have been using in Europe for a couple of years, and now we're also installing that. We've done 2 sites in U. S. And rolling that out to the other 180 here in the coming year. And we have also in the coin processing, we have a totally automated system now where other of our competitors is still doing it in a very manual way. So all of those investments which we're doing is to drive quality. And I think and I'm absolutely convinced that, that is what the clients are looking for. It's not the cheapest price at all occasion. Of course, you need to be competitive in your pricing, but you need to have the quality. Going back and talk about the operating margin in U. S, we can see that is up almost 2 percentage points this quarter over last quarter. And as I just talked about, the business mix has an impact. The more the CMS, particularly in existing sites, the better our margin is getting. And also, I mean, also for the CIT, the more density we have in our routes, the better our margin will be. And we have also had focus on the cost control. When we have been rolling out all these sites, particularly on the CMS side, We have prioritized quality at the first stage. The order has been really no matter what the cost is, the service is going to be performed, and we will fix the cost and efficiency later on. And of course, as we have been rolling them out, the quality has got where it needs to be, then now we can start with the efficiency work. And I just took a couple of example. I showed you the last time our branch in Pansokin, which was one of the bigger one of the major rollouts. I showed you at that time the picture up to the left, which it looks like what it looks like when we started. You can see that it hardly looks like a place where you count cash. And then but we were just forced to take that on that work at that time because some other things were not working out in the previous provider of the service. And then when as we got finished with our facilities, also our profitability came back. And now when we measure it here, the last you can see the last 2, 3 bars, I mean, the last one is obviously December. You can see that our profitability is much higher than what it was when we started before the rollout. But there was a period here of about 6 months where we took a hit of the profitability. This vault, Persokken, particular vault, was rolled out in June, and that was probably one of the smoother rollouts which we've done. And I have one other example, which is up in Rochester, which was rolled out a bit later, but you can see here, and I marked the December there where we now start to make money again, but that has a negative impact on our profitability during a period of time. And here, we're only 3 months into it. And I just with this slide, I just want to show you that there is still a lot of cost to be taken out in our operation in the U. S. We are by no means done with effectiveness in our operations, particularly in the new sites. And there are several others which actually looks like Rochester, which was rolled and the last rollout which we did in Atlanta, that was as late as in October. So there is got that question several times. Is there still some so called start up cost here in the Q4? And the answer is yes, there is. The 3rd segment to talk about is the Loomis International Service. As I said, we have there made an acquisition in terms of Dunbar Global Logistics, which is fitting very well with our international service. We had an organic negative growth here of 12%. Our looking into the numbers, we think this is a temporary decline of the business in total. We have seen that particularly on the precious metal, that activity has gone down during the Q4. And it is a very fluctuating Some quarters, it's high. Some quarters, it's low for the whole industry. We don't see us having lost any market share, and we think that this is going to bounce back pretty soon. It also have been affected by particularly in Switzerland, where we have a where we are the market leader by far on art exhibitions. That has also have had a negative impact on LUMOUIS International. And of course, in this business, we have a lot of fixed cost. There's a lot of cost which is there independent of the volume, and that is have hurt our operating margin somewhat here in the Q4. So to wrap up a bit before we get into Q and A, we can see that the revenue is and the growth is really the revenue obviously have some currency effects in it. But the organic growth of 3%, one of the better quarters which we have had driven by the U. S. We have an operating margin of 11.6 percent. Again, it's the best margin that we have had in the quarter. It's the same as we had in the 3rd. But for the 4th quarter, it's a really good number. You can see it's a percentage point higher than on the last year. And finally, and last but not least, also our EPS is up significantly versus last year. And let me just because I just remind myself, I promised to say a few words about U. K. Also. U. K, we have had very good organic growth, even better real growth because we made an acquisition of the Cardtronics operations there. However, we still don't have that operation running efficiently effectively. We have some issues have had some issues in the quality, which we now have been dealt we have dealt with those and the quality is up now. And the next step is now to get our efficiency into the operations after those added volumes here. We have made some changes in the organization there. So we have now made that to a region of its own, which is only so the whole region of staff there is just focusing on one thing, and that is on the U. K. Operation. The volumes are there. We have the facilities, the vehicles, everything is there. We just need to get that operation effective and also be the right quality measures there. So with that, I'd just like to emphasize the financial targets, which was published by Jarl Dalfos here in 2014 when we had the Capital Market Day. They remain untouched, of course, as they are for 2017 with SEK17 1,000,000,000 in revenue, the 10% to 12% EBITDA margin, the debt gearing of 3 and also the dividend of SEK40 to SEK60. And as a final comment, the proposed dividend of SEK7 is, if I remember correctly, 49% of the net earnings here. So with that, I'd like to conclude the presentation and see if we have some questions here from the floor. Stefan, I'm from SVF. Starting with 2 questions. First, where you ended, on the international and logistics. I remember 1 year ago, in Q4, there were some extraordinary activities on the metal side to the positive and also some activities on taking care of cash in Switzerland, I think. So my question is really, is it maybe that it's not this is the more normal level in activity and that you had really difficult comps in Q4 last year? No, I don't think so. I mean, I think by definition, everything is extraordinary because there's no fixed contracts. There's nothing there which is regular. You don't have any shipments which is booked long in advance. I mean, like our CIT business, we know we have for 5 years. We're going to have 2 pickups per week and so on. But here, we have you have business. As you said, yes, we probably have some good business then, but I don't know if that was extraordinary. It's just that's the nature of the business. I think that the level which we have right now is on the low side and that we will expect that to bounce back. And then second question is on the U. S. You're outperforming your peers dramatically on earnings. And I think also on growth, haven't seen all the competitors' top line numbers yet. I would guess so. I mean, you're doing a great job there. And I know that Brink's has been there's been some owners there of activist type. If there were an opening for you to take on Brink's, would that be of interest at all? Or is it just too big of a chunk to melt? I think that question comes up every now and then. I think it's more of a theoretical nature. I mean, first of all, we are the market leader in the U. S. We are the market leader in France, and our biggest competitor there is Springs. So that is the 2 actually 2 major markets in the world almost. So that's a difficult equation to see how that will work out. So I mean, I think that what we try to do is we focus on our business. We're going to be running that as good as we can. And right now, we're doing it extremely well in the U. S, I dare to say. And I think they need to focus on their issues. Stefan Oberg, Handelsbanken Capital Markets. I'd like to talk a little bit about the European Union 4th money laundry directive. Could you please tell us a little bit about that and also outline the impact it will have on you? Probably not. No, I'm not too familiar with that, I must say. I haven't followed that on a closed basis. So I mean, if I don't see that there is anything that would have a major impact. I know that some of the things there is with the recycling of cash and it has to pass through some of the authentic machinery. But I mean, I don't dare to have any prognosis of what is that going to do to us. I mean, it's nothing which is going to have any major impact. I'm sure that in that case, I would have known about it. Okay. A question you might be able to answer then. Could you please list 3 countries where you currently do not have operation, but within 3 to 5 years' time, you probably will? If life was that easy that you could I mean, you can always make a wish list. And I think that is something which is doable. Whether we're going to be there in 3 or 5 years, I mean, there's a lot of things which is out of our control. But there is obviously I mean, we always said that, that is of interest to be where we understand the business, which is reasonable with given our limited staff on a central basis. The European arena is definitely something where I mean, there is major countries there like Germany. We have talked about Italy. There are some other major countries in the part of the world where it is pretty close to us and we understand. So I would list those 2 to start with, and I keep the 3rd one for myself. Okay. And finally, what about wage inflation, particularly in the U. S? What is your outlook? That's a very good question because with the growth which we have now, and I think it's maybe fair to say that out of that 10%, percent, let's call it 12% organic growth which we have, there is actually some real growth out of the market also growing. I mean, we see more stops. We see more cash in the bags and so on and so forth. So maybe there's a couple of 2% or 3% of that, which is actually the market growth. And when there is difficult times, then they cut the clients cut down on the numbers of stops and there's less cash in the bag. So but now we see the reverse. So that means the economy is quite strong in the U. S, at least what we see. And the biggest issue we have right now is to find labor. And we see the pressure there from health reforms. We see it from minimum wage discussions. And I mean, there is only one way to deal with that, and that is price increases. I mean, there's no way that we can accept or take on that cost that needs to be passed on. So am I worried about the wage the pressure for higher wages? No. But I'm worried about how do we get those price increases in place. And what about Europe? Much less of an issue here, much less of an issue. Okay. Thank you. Karl Johan Bonhoeffer, DNB Bank. Very impressive development in North America, I must say. It's both growth wise and obviously earnings leverage coming out of the franchise now. And it sounds like when you talk about growth that you have quite a strong pipeline also to talk about these kind of levels continuing. Could you shed some more light on new CMS contract that you have been managed to secure? Or is there a lot of those things in the pipeline? No. I think I mean, specific contracts, it's and particularly those who are in the pipeline, that's dangerous to do before they are really secure. So what I mean when I talk about that is more our position in the marketplace. I mean, our investments in quality and I mean, that takes some time to catch up with us on those things. And that's what I mean that I see that we have such a strong market position that I think that we will see that growth continue. From a competitive perspective, I don't see anyone really being where we are right now in terms of driving the market. So it's more and of course, we see the safe point. And what I said before here is that the numbers sold is much bigger than the numbers installed right now. So we have a very healthy backlog there. And before they get into the ground, they don't generate any income. So that is something which will come as well. Earlier on SafePoint, you have earlier talked about the ambition to maybe add about 5,000 sales per year or something like that. Is that a realistic target for 2016? Or is the base still so small to get up to those numbers? No, I think we will be higher than that. I mean, we did 5,000 in we sold 5,000 during 'fifteen, and I think we'll do more in 'sixteen. Everything else would be a disappointment, of course. Excellent. And finally, looking obviously, Brink's might be a little too big to chew if you put it like that and might not fit you perfectly. But how does the acquisition pipeline look in other parts of your franchise, Atmos, this moment? That's something which we always look into. There is I must be honest and say, I mean, obviously, I'm in an interim position, Pat. Patrick is on his way in. I think that is something which we as a company need to go through first. Patrick needs to be on board and take the responsibility and to dig into and make sure that we do the right acquisitions. To some extent, that is a it's not the highest priority right now. I think the highest priority right now is to drive the business and work with what we have. And then Patrick comes in, and I'm sure he's going to do a good job in seeing and finding out the right things to acquire going forward because that is in our ambition. We have a growth ambition, and we're continuing with the leads which we have in that respect. But to talk about long term specific targets, that needs to be Patrick who does that. Excellent. Thank you. Mikaela Metanski. I think on the Q3 call, you talked about using external financing for the SafePoint basically. So could you give any update about that progress? Yes. I mean, that is soon to be there. It's Anders and our finance team in U. S. Is working on that and that should be I mean, as we grow now, we have to find another solution to that. So it will be in place. I don't want to say exactly because we are in negotiation with different alternatives, but that is our ambition to have that in a very short period of time that will be there. And could you give us a rough estimate how much of the CapEx this year that is related to Safepoint or I mean last year? 15. 3rd, I'm looking at the unders here. 4,000 saves and 8,000 that's Dollars, that's about $32,000,000 So it's about a third. And this $5,000 will come in 2016 that you have sold but not installed or Well, we sold 5,000 actually more than 5,000 in 2015, but not obviously, we don't pay for them until they are installed. They are we buy those from a and we're not manufacturing them ourselves, as you know. So before they hit the CapEx, all those 5,000, that is going to be in 'sixteen when they are installed. I also have a question on organic growth in Europe, 1% for the full year. And I guess the Tesco deal is 3% growth and you're talking about Spain growing, you talk about Argentina, Turkey. Is it just the Nordics that is explaining why it's not being a higher figure than 1% considering that significant growth in other markets? Yes. I mean, when you look upon it, I mean, France is the biggest market which we have. We have no organic growth there. I mean, that's very flat. So that, of course, it doesn't it's not negative, but it's flat. So that has an impact. But otherwise, it's the balance between the, I would say, the Nordics and the countries which you just mentioned there. And my last question is, for the full year, you had like SEK 79,000,000 of this acquisition related costs and A lot of that was integration and restructuring. Is all that related to that Cardtronics acquisition? It seems like a quite high figure considering what you paid for it basically. I have to ask. I understand. Most of it is related to Cardtronics, but there is always ongoing acquisition related activities. So I mean, there will always be a number on that line regardless whether we make acquisitions. But I guess the restructuring costs and the integration costs, that's Cardtronics? Yes. Okay. Thank you, Anders. No problem. Henrik Jensen from Nordea. Mark, one question, if I may. Obviously, you've been investing a lot in your business over the past few years, even if we exclude the SafePoint investments ongoing right now. Is it reasonable to expect that you sometime during the coming 2, 3 years actually will see a reduced level of investments? That is depending on how much we're growing, of course. I mean, if we have a 10% to 12% organic growth, then you have to continue to invest because I mean even if you build a vault now and that is but at one stage it's going to be full and then we need to build a new one. So however, realistically said, yes, you would see that. I mean, the trucks will still be there, but certainly the building side of it, that will fade out as we have redone most of them in probably 1 or 2 years. And one more question, if I may, on the organic growth in the U. S. How much of the 12% adjusted organic growth is related to the Bank of America contract? Well, we never released exactly how much that is. But it's a smaller part. I mean, just talk about a few percent. Hello. Erik Gunnarson, UBS. I have a question on the general trend here with regards to the digital payment methods that comes into the market quite rapidly. And as we can see in Sweden, it's quite declined inorganically. What's your view on that development, medium term and long term? Well, this is the problem. The most frequently asked question which we get is, is this a, well, to the extreme, a dying business or is this something which is and it's difficult to agree to that when, obviously, we have the organic growth, which we have in the biggest market there. First of all, as a general comment, I don't think that any of these new payment methods, people using that is not the people who normally use cash. I think those are people who already have left or is not using cash on a regular basis. Maybe they go from credit card to whatever other methods there are in terms of payments. So that is something I don't think that is the immediate threat to cash. And so then comes the question, is card going to be overtaking cash? And I mean, we did some studies on that, and I think those are still true. Yes, the numbers of transactions, the percentage of transactions done with cards or other payment methods are growing, sure, and cash is declining in the numbers of transactions. But at the same time, economy is growing. The numbers of transactions, total numbers of transactions are growing. So when we did the study, which is about 4 years ago, 3, 4 years ago, I mean, at that time, we predicted and which is quite nice to see now, the only market of the major ones we'd be looking at was Sweden, which was going to have a decline in absolute terms of numbers of transactions with cash. And that seems to be true right now. I mean, that is the market the only market today where we can see that happening. Just to follow-up on that. I mean, a lot of things have happened since 4 years. I mean, Google, Apple, those initiation has basically just been into the market, as you can say. And so will you think of doing that assessment again maybe? Yes. We tried to do that to update that study, which was done together with MIT and some researchers in Boston. So we're looking at that. But again, I mean, the people who uses these Apple and Google and all these things, they were probably not the one who had a bunch of cash in their pocket before. They were probably using some other payment methods already. They probably already left the cash. Then how is this affecting it on a 10, 15, 20 years pay? I have no idea. But I mean, again, we see still now I mean, I live in the U. S, and I can assure you that there is no that question is not even there. I mean, it's one of the natural ways of paying is to use cash and for foreseeable future. I don't see that change. Okay. Then let's move on to the telephone conference. Thank you, Vincent. Do we have any questions? And we have the first question coming from the line of Perja Fumina from Goldman Sachs. Your line is open. Hi. It tends to be on Limi here on the call. Two questions, if I may. First one, on your French operations, you mentioned that some of the branches turn to be positive margin wise. Can you provide a bit more color on what upside there is left in terms of profitability, whether you think you'll be able to improve it this year and how long it will take to improve it if it's not in 2016? And my second question would be on the guidance. It seems to be that it looks a bit conservative at the moment, your 2017 outlook given where you are at the end of where you were at the end of 2015. Is the reason why you're not revising or might not be revising or being conservative? Is this a change of management? Or is there something that you are worried about going into 2016? Okay. Let's start with the second question because I remember that one. No, I mean, there's nothing there which we're worried about, which is of any concern or anything. But I think it's also fair to what you first elaborated on, that there is a change of management. And when Patrick comes in, of course, he needs to get his own view of what is the financial targets going forward, particularly after 'seventeen, I think. So I think that's one of the reasons. But I don't see any worrying thing in the horizon right now anyway. To the first thing around France and profitability there. I mean, as I said, I think there is still a lot of uncertainty in France. We are still not clear on Banque de France, what they're going to do in terms of numbers of vaults, which they have around France, if that is going to change over the coming years. There is a slight trend in France that also the bank branches locally is doing recycling of cash versus sending it with us. So I think that all the improvements in profitability in France is not going to come from any growth or any new business. I think it's going to come from us being more efficient in what we do. And in France, for instance, we just rolled out a new system for the cash management, which we have implemented from Spain, which, as I said before, is probably one of the most advanced countries in the world when it comes to cash handling. We just implemented that in France, and that is also driving efficiency in our operations. So yes, I think we will be continue to be more efficient in France, and that is going to drive profitability. But I don't think we're going to get any help from a growing market or some other things happening externally. And we have one more question, which is coming from the line of Victor Lindeberg from Carnegie Investment. Two questions, if I may. Starting off in the Nordics, can you comment on what actions, if any, you're taking here in the Nordic to mitigate the declining trends that we are seeing? Is it possible to adjust prices? Or is it more about improving operational efficiency? And then also looking on the Safepoint units, you are now sort of revising up the target from 5,000 to at least 5,000 going forward. Would you say that there's a pricing component in this that you are lowering prices to capture growth? Or is it pure a market opportunity? Thank you. Okay. Easy thing first. No, absolutely no price cutting or any price reduction in terms of getting more market share with Safeco and quite the opposite. So that is one of the things which is most important in our whole business model is that provide quality but also get decently paid for it. And we're not going to budge on that, nothing. So that's not going to happen. We're going to take place more sales because we have a good offering, not because it's a cheap version of something else. And the first question was around the Nordic countries. And just to be clear, I want to because there was one thing I said here in the presentation is that what we see now as the decline is actually, I dare to say, much slower than what it was just a year ago. If that is a coincidence or if there is some reasons for that, that is something I'm not yet sure about. What we have done in Sweden is that we have closed almost half of our CMS centers. We did that during last year. So we are working with efficiency measurements all the time. And of course, we are also looking into the pricing piece of this. And as there is going to be less units processed, the price for each unit needs to go up because we have a fixed cost, which needs to be paid for. And as long as there is any cash circulated in Sweden, which I think is going to be for a long time, then we need to continue to both increase prices and also become more and more efficient. So I think it's a combination of both those things we're just saying. But I don't think we should over exaggerate the decline of cash in the Nordics. And right now, the only country where we see it really happening is in Sweden, and that is less than what it was before. And there are no further questions in the field today. Okay. Thank you, everyone.