Welcome and good morning, everyone, to the third quarter report from Loomis. Glad to see so many here this morning. Of course also we have all our visitors here on the web. Before we go into the report and to the numbers, I like to start off like this. Deja vu, as it says in the encyclopedia, note, this is not Google, since I'm a bit older than using Google, but it is the phenomenon of having the strong sensation that an event or experience currently being experienced has already been experienced in the past. With that said, without joking, I mean, since our previous CEO, Jarl Dahlfors, has now left the company to hunt some bugs or other things, kill bugs, I have temporarily stepped in as the CEO here until there is a new long-term CEO in place.
This is not a new situation for me. I know there are some new faces here and I'd like to introduce myself shortly here. I was a CEO for Loomis in 2008 when it was part of Securitas, they went through the IPO, the successful turnaround, and in 2013, me and Jarl swapped jobs and I went to the U.S. and is now working there as running the U.S. business while Jarl has been in this seat here for two years. I'm quite familiar with the job here and, as said, I promise to do that for the coming period until there is a new CEO in place for Loomis' long-term solution. I think it's also important to point out that this company is a company with a decentralized organization.
Our strength is really out there in the organization. We have since 2008, that is one of the most fundamental things we did with the company is to push responsibility down into decisions to be made where the action is happening. I'm a firm believer that, anyway, the best way to service the client in the service industry is to take the decisions very close to the client. Hence that, I think everyone should feel very good and is confident about the financial targets which we have set here in 2014. Just to remind you about this, these are targets, I will come back to and go through them later on, which everyone in Loomis feel very committed to. This is not targets that was developed by Jarl and was solely for his benefit or for the company's benefit at that time. This is something which is really there for the long run.
I feel totally committed to this and so does the management team in Loomis and all the way down to all our 400 branches there. With that said, let's move quickly into the report of today and the highlights. We're going to talk about the segments, of course, on finances, at the end, we will have a question and answer session as well, of course, also through the web. What are the highlights then? First of all, I think it's a very strong report, I mean, it's actually the best one which we have ever done in Loomis. We have organic growth of 3%, which is mainly driven by U.S., 7% in organic growth, and mainly driven by CMS and SafePoint. It's also, you have to take that into consideration, that it's also adjusted 2% for fuel fees.
Let me just briefly explain that how it works. I mean, it's in our contracts in the U.S., and in order to protect ourselves, already in 2008, we implemented matrices, which takes into consideration when the fuel goes up and saves us and helps us versus our clients then. Unfortunately, it works the other way as well. When the fuel prices go down, then also our revenue is going down. The real underlying growth rate is actually 9% here in the third quarter. Also in September, we actually, for the first time ever, passed the 10% in organic growth. Our operating margin is 11.6% versus last year's 11.3%.
Of course, driven by the revenue, the revenue is also causing some cost for us and the startup, not least in the U.S. where we have this growth rate, but also in U.K. where we have announced before that we have some significant contracts being rolled out in the second and third quarter here. Everywhere we continue to do the efficiency work, and you will see that when we come to the branches and development of the profitability there. It's done in every single one of our branches. Again, that's the strength of this company.
Earnings per share is up 18%. We also announced after the closing of the quarter that we have made a minor acquisition in the U.S. where we bought one of our competitors, Dunbar, their Global Logistics service, which is a business which handles diamonds and jewelry, mainly inside the U.S., but it has a phenomenal link to our newly acquired operations in International. It's further really strengthened that leg or that segment in Loomis. Also there we have some new contracts for SafePoint, and I will come back and talk about that later when we get into the U.S. segment. The operating margin, as you can see from this slide, continues to develop very favorably. Had the opportunity yesterday to look upon, and I can see that also from 2008, it's actually having the same trend.
I think it's become even more obvious when you look upon it this way. You can also here graphically see that this is the best quarter which we have ever done. It's the best volume revenue, it's the best margin, and of course, it's through those two parameters is also the best absolute result which we have ever done. It's a good quarter for us. I said this already several times, that this is the strength of Loomis, is our branches and the branch managers out there who on every day has a plan and a challenge which they should live up to. They are measured, they are incentivized to some extent also based upon the performance in each and every one of these branches. They also have the mandate to take the right decisions in order to service the client quickly.
There's no need to go to Stockholm or to Paris or Houston or wherever for decisions. Those could be made already in the branches in order to quickly service our client. Of course, not every decision can be made there, but enough to have a good service to the clients. As you can see here, the profitability for our branches is continuing to develop nicely. This is not a direct reflection of the P&L. This doesn't take into account the volume in those different branches. It surely gives an indication and the trend that we are on the right way. I remember back in 2008 when we set the target of 15% of the branches should be underperforming, not more than 15% should be underperforming. I think that we have revised that target now.
I'm sure that we can get down to 10%, if not even lower, of course, we have already achieved the financial target of 10% in 2014. This is something which is on the agenda each and every day for all of our branch managers to drive their quality and to drive their profitability. Let's talk a bit about the different segments here. In Europe, we have an organic growth of 1%. I think the thing there to talk about is really that the first time in five, six years, we're seeing an organic growth in Spain. All of you know what has happened in Spain and the issues which have been there, not least in the banking sector, where we have seen lots of bank branches being closed, banks and cajas merging together. Now it seems like the economy is recovering.
It seems like the retail business is coming back. As said, for the first time in a long period of time, we see organic growth in Spain, even more positive, September was better than July. We hope to see that continue also into the fourth quarter and during next year. Nordic region is a story of itself. Coming back here now from the U.S., it's again, get surprised by the cash-hostile environment which you see here in the Nordic, in Stockholm. We continue to see that there is an underlying volume decrease there, that is something which I think we just have to accept, and we have to take the right measures to counter that. That is by reducing numbers of operations, the staff, the whole numbers of vehicles, et cetera. Most of the other countries, obviously Turkey and Argentina, huge growth countries.
They are heading to the 50% in organic growth, although it's a small basis, it's still very healthy places to be from an organic point of view. Most other countries in Europe, I would say is pretty as they expected, pretty flat. They're in maybe 1%-2% organic growth. The real growth, as you can see, we also add the Cardtronics retail business, that shouldn't be any surprise to anyone, get us to the 3%. Operating margin is down slightly versus last year, that is mainly because in U.K., where we are adding the Cardtronics retail cash handling operations, that has a negative impact short-term. Talk about deja vu, it's also the same. We continue to have issues in the U.K. As being in half American now, I've always called us, we have opportunities in the U.K.
We can deliver 14.3% and still have an opportunity in the U.K. We just need to figure out exactly what we're going to do about that. There is a volume increase there because of the acquisitions and the new Tesco contracts which we've done, and we haven't been able yet to profit out of that. Of course, in all other European countries, we will see that there's actually an improved margin. As we don't have a lot of top-line growth, it's related to more efficiency in our operations here. U.S., and I apologize, we're going to be a bit skewed towards the U.S. for obvious reasons in this report here. First of all, because that's what I know best. That's my comfort zone right now. It's also because that's where most of the action actually is in the company right now.
That's where most of the things we already talked about, the organic growth. Again, here is driven by SafePoint, which has a phenomenal development. We have the CMS revenue, which is not a surprise by no means. I mean, this is mainly driven by a huge contract we took with Bank of America here about a year ago, 18 months ago. During August, September, we actually rolled out a couple of really big ones, and we have one big contract or one big vault left in Atlanta, which have been rolled out during October and early November. That's the end of that contract. Of course, we hope to have new opportunities with other big banks in the U.S. Again, the negative fuel surcharges is 2%, so the impressive 7% is actually 9%.
As I said before, for September, we saw for the first time, we saw crossing the 10% line. Operating margin is up significantly. The business mix is helping. The SafePoint, as we talked about many times in the past, I'm sure you all have done it as well, is a good line of business for us because we're managing the operations there. We don't have any particular times where we should pick up things. We can do the scheduling ourselves. It's long-term, so we can make the right investment to take care of that volume in an efficient and in a profitable way. SafePoint volumes are good for us.
Likewise, CMS is also. When you have your production up and running, when you have your vaults and your staff, then you can put a lot of volume into it and that becomes almost like an incremental business. The key here is, of course, not to do incremental pricing because that's the easiest way to fool yourself. We've been rigid about making sure that we don't do any incremental pricing in our operations here as we grow the way we do. Still, we are to some extent affected by startup cost in the U.S. I like to illustrate that a bit since I'm talking more and more about the U.S. here.
We're going to talk about Pennsauken, which is a vault, one of our biggest vaults, top five, which is located outside Philadelphia and where we had a huge rollout of Bank of America vault here in June, July. I'd just like to show you a couple of pictures. This is a cash vault and this is an operation. What happens here is it was a huge vault or a huge operation before we got the contract. With the new contract, we had to expand. We had to do new installations. We had to expand the vault. We had to get new teller stations up and so on. This is not an operation which you just moved into the neighboring facility or you move it somewhere else. This is a high-risk, high-security designated area. We just have to build it as we operate.
As you can imagine, this is by far not an optimal way of operating. This is how we have to operate while we built it before we can put the new volumes on. This is how it looks today, just three months later. Now is the time to take on the new volumes. We actually did that in June, July already. Of course, that has an impact on the operation when you have to operate during those circumstances. There are a lot of construction people in a high-security area. You need to strengthen your security. You have to make sure that you don't have any losses, by no means. You have to make sure that you continue to operate in a high quality for the existing clients. We can never, ever allow ourselves to drop quality because we get new volumes.
No client would accept that and neither would we. I try to illustrate that also. This is the financial performance of Pennsauken. This is real numbers, although you don't see the numbers, but this is the real impact. You can see here, when it looks as worst, that is May. We rolled it out. We got the new volumes on board June, July here. You can see the impact it has when we start hiring people, training people, building, having security people on board. You can see the impact that has on our operation. The good thing is here, you can see that coming now into where we are right now, September, it's actually October there also in the last one, showing you that then the profitability comes back and it's even higher than what it was before.
We are by no means finished. Now starts the real nitty-gritty things, improving how can we really structure this now to get more efficiency into it. Because sometimes when we talk about this rollout cost, what is it really then? This was a CMS contract which we rolled out, and that's the easy one if you should be honest because that's when you have all the operation inside four walls. With a few steps you can manage it. When we roll out a huge CIT contract, then you have the whole operation out on the streets. You say bye-bye in the morning and they drive out, and you hope they do the right thing during the day. That takes longer time to make sure that we get everything in place. Just a way to illustrate to you the challenges which we have when we grow.
Of course, I like to really emphasize that. Growth is something positive. This is what we should be good at. We are getting better and better. The first vaults, which fortunately were smaller, had a much worse impact than the ones which we're working with today. Talking then about our hours. CMS is one of the areas in the U.S. which is extremely important. The other one is SafePoint, and I've already talked to you about the importance of it from a profitability point of view. It's more from an operational scheduling point of view that we can manage these operations in a much more optimal way than when we have emergency cash or emergency drive outs to different ATMs and things like that. This is Titan, which is something which we launched in the 1st of September this year.
It's a new box, it's nothing more than a box. That's not going to revolutionize the industry by no means. It looks a little bit better. I call it's like a new model of a car. Smells probably a bit better. Got a couple of features which is better. It's keyless, it's easier to handle, easier to manage, better for our crew. You can download things straight into the safe from our operations in Houston. You don't have to go out there and change operations and so on. Still, it's a box. What we're selling is a service. It's a concept. That is the same as it was in the past, but it's a further development of it. I think that some of the features or the benefits out of this is really something which the clients will appreciate.
The key thing for us is to spread the concept. I think I said at the Capital Markets Day here a year ago that there is at least 300,000 points of sales in the U.S. who would benefit from this. The real number is probably a couple of million, who would, from a cash volume and so on point of view, would benefit from this. Today we are talking about having installed about 13 and a half, 13,700 safes. There's a huge potential out there. For us, it's not to oversell the box. It's to get the concept out there to different clients. We were, as we noted also in the first slide here, we have signed a couple of deals with more than 1,000 safes here in the third quarter or just after the third quarter. That is not all, of course.
These are the big deals, the real volume is really coming from the small franchisees and different businesses. Today overrepresented by quick service restaurants, we're also looking into a lot of other areas where we think this is beneficial. The segment and you see in this slide, we talked about that the impact of CMS part of the SafePoint is also CMS because we take care of the whole business there. The more vaults and the more SafePoint we're selling off, of course, this number is going to be driven up more and more. Enough said about U.S., Loomis International Service is new since I was here or coming back in this position is a new segment which we have and a very exciting segment. One of our biggest competitors, I would say, is totally dominating the global market today in this segment.
We are absolutely determined that we will be a good competitor to our competitor here going forward here. The small acquisition which I talked about in the first slide here in U.S. and Dunbar is further in strengthening this. We'll also, of course, look upon how can we get the synergies out of our operations, our footprints in the different European and the U.S. operations. How can we make that benefit also for the Loomis International and vice versa? How can we locally benefit from the Loomis International? You can see here the organic growth is about 1%, but that is the General Cargo had a very rough second quarter this year. They have bounced back some of the volume, working with sales, working with price increases, working with also cost cutting, of course.
They have bounced back and the operating margin is now 6.9%, which is significantly up from what it was a year ago. Huge potential, particularly in the, of course, in the internet, the transport and the storage area of valuables. I think we talked about most of the things here in the income statement, but again, to emphasize organic growth is about 3% for the whole for the company, still hampered to at least 1% from the fuel fees in the U.S. The operating margin up 11.6%. That's the highest margin which we have had at least as long as I've been with the company since we went through the IPO.
We have a couple of, in the financials here, pluses and minuses, most of them related to the U.K. acquisition of Cardtronics, then we had the overtime case in Spain in items affecting comparability, where we have finalized that and relieved those reserves. Also we have the EPS, which is up by 18% versus last year. Let me finish off or run off with the financial targets here. As I said initially, the strength of our company is really out there in the branches and in our operations, in the countries, in the branches, in the segments. I can assure you that every one of us in the companies today is working towards these financial targets. With the change of Jo leaving the company is not going to change that by no means.
We have the full speed ahead to achieve these by the end of 2017. I think you're familiar with them, that we will have sales of SEK 17 billion. By 2017, we will have an EBIT margin 10%-12% on an annual basis, a little bit depending on where we make the acquisitions and because we need to make some acquisitions to reach the SEK 17 billion. Of course, we also have changed the net appearing from 2.5 to 3 just to give ourselves some space to do the acquisitions and the dividend remain the same as it was at the IPO. Concluding here, everyone is fully behind the targets. I think we had demonstrated that by the report which we released today. I think it's a very strong report.
Very proud of the organic growth, not least in the U.S., of course, but also of the earnings, which we presented here. Thank you very much for listening to this, now let's see if there are some questions here from the floor.
If you wish to ask a question.
Just a question on the financial targets. I think what you all basically were saying regarding the 10%-12% EBITA margin target was that basically if we don't do any acquisitions, we will reach the 12%. Do you interpret it in the same way as he did?
Yes. It's the short answer to it. We have two type of acquisitions. One of them is when we do acquisition in a country where we can just add it to existing operations. Normally, there's a lot of synergies, as I talked before with the CMS and so on. Of course, that drives margin. If we establish ourselves in a new country, like we did in Argentina, we did in Turkey some years ago, of course, that is not going to be such a boost to the EBITA margin then. It's also a bit of where we do those.
I also had a question on the margin outlook for Europe. I understand that in the quarter, U.K. was a clear negative due to the startup costs and the acquisition, my impression was that, the acquisition and the additional volume from the Tesco contract would be margin accretive going forward. It seemed like you were a bit cautious on the U.K. You had some challenges there. Could you describe those a bit more in detail?
First of all, just so we're on the same page here. I never said we didn't make money in the U.K. We make money in the U.K. It's negative versus the other countries in the group. Mainly because, one of the challenge there is that the CMS is only about 10% there, which makes that the CIT, which I also described, it's a lower margin business. When you have 90% of that, of course, that is from a margin perspective, it's more challenging. We still have some operational challenges in the U.K. First of all, because we're doing the integration of the new volumes. It's also, I think we still have some, even when that is done, I think there are some upside there. I would have hoped to see a more solid operation there, which I don't see today.
What is the reason for that? I think you all mentioned on this Q2 call something like, I hoped the U.K. business to be on a 10% run rate margin at the end of this year.
I hope so too. I'm less optimistic that that will happen. Again, we're running the company at roughly about a little bit more than 10% on a rolling 12, I don't see that U.K. with 90% of the CIT is going to be at that level.
Looking at the earnings delta, I guess it will be a quite clear improvement looking ahead, at least for 2016.
I hope so. Those are the plans, but I am less optimistic than you all was, obviously, in terms of U.K. We have some challenges there. As I said, being an American or half American, I think it's an opportunity. We can produce 11.6%, and we still have one country where we have to improve. That is a strength, I think. It's not like we don't know what to do, we just need to do it. We have done the same thing in all of the countries. We have made it work, but we need to do it in the U.K. as well.
Hi, Henrik Nilsson from Nordea. You mentioned a large SafePoint contract of 1,200 units in the U.S., which, did you win that after the quarter closed or?
Yeah, I think we had one with Jack in the Box, which we published earlier.
Yeah
which was about 1,000 units. Then we have one for 1,200, yeah, which is a big grocery chain, which don't want to use their name in the presentation.
Yeah. I understand. Can you give us any guidance on the timing of the startup of that contract?
Both of those should be rolled out before the summer. They are rolling out as we speak. I think it's more a question of how fast can we get them into the ground. How fast can we produce them? How fast can we get them into the ground? The last one should be there before the summer.
Should we expect a higher cost level in the U.S. in the coming-
No
two-
No. I don't see that. That is not related with roll. When we do CMS rollout, that's a lot of cost, as I've tried to demonstrate. The SafePoint, that's something which is just rolling on.
Okay. Thank you. In international services, Q2 was a disappointment. It looked, at least in my eyes, very weak on growth and on margins. Now, are we out of the woods there or?
I must be honest here, I'm not an expert on the international service, certainly not the General Cargo. That is a different business. It's a bit odd versus what we do in other places, so I don't have the real expertise in that. We had some real challenges in the second quarter where volumes dropped in, I think in Brazil and also through the Swiss franc, which was first quarter and second quarter was devalued and, of course, that has some impact. We have taken some measures against that. I hope we're out of the woods, I'm not sure I understand the whole dynamics in the business.
Thank you. If organic growth of 9% underlying in the U.S., can you quantify how much of that is related to Bank of America?
Yeah, I'm sure I could do the math. We said in some occasions that was roughly about $20 million, that contract when it's rolled out. I need to do the math in terms of. It is not the majority of it. I'm sure it's significantly less than half of it.
Okay, one last question, if I may. On M&A, which markets are you mostly interested or looking at the most?
That's probably one of the most frequently asked questions we've had yet.
I'm just seeing if you have the same view as your whole team.
I think we're an industry where you don't have hundreds or thousands of opportunities, and you can pick and choose yourself where you want to be. It's a bit more opportunistic. When we bought the company in Argentina, we wanted to get into South America, but was Argentina just we were looking there? No. It was an opportunity there. I don't have any strong preferences in that terms. I'm looking upon each and every one of the opportunities. I think it's also, you need to think about this is, it's not like you have any cross-border fertilization between them. If we have an operation in Norway, it doesn't benefit from the Swedish operation. If we have a Turkish operation, it doesn't help you in any of the other neighboring countries there.
You can look upon it like individual countries because their regulations and the markets is so isolated to a country. You can really look upon it here and there and there. If you ask from a short-term profitability, again, you like to do an acquisition in existing market. That's the least challenging, is the most short-term profitable, but it doesn't give you the long-term growth. That's one perspective. The other one, as said, if you want to really get into growth countries like we have done in Turkey and Argentina, told you we're about 50% organic growth there. Building for a long term for the future, that's where you need to get in then. I really don't have any preference. We're going to be looking upon whatever comes across.
A short follow-up on that. How likely would you say that a big deal with one of the four large global players is?
If these smaller deals, they come when they come, that is even more difficult too. Although there's a lot of speculations I also seen in the U.S. and the whole industry in the U.S. talk about the letters which has been circulated and so on, I think it's speculations, we will see what happens. I don't have any timetable for that.
Thank you.
Hi, Staffan Åberg from Handelsbanken Capital Markets. Given that the Jack in the Box deal would indicate around $300 and you are currently rolling out the new version of SafePoint, what would you say the rough estimate of the revenue per SafePoint is within one year? You've earlier guided that you get around $400-$500 per SafePoint.
Well, the $400-$450, that's per month, the revenue per month per safe. That average, I don't think it's going to change a lot. The big deals which we have been announcing and also the other one which we didn't talk about, that is something which is a smaller safe from the outset, but it's also less frequently visited by us, or we pick up cash less frequently. Those are the parameters which is then driving the average fee per month for those things. When you look upon it, and normally those big deals which goes across big franchisees or big quick service restaurants, those are normally lower than what the bigger safes are because you normally don't buy thousands of our really when you add coins and cash, exchange dispensers and other things. There is a modular, you can add things to them.
It's really a question of looking upon the mix of it, and I don't see that that is changing a lot. It's certainly not a question of that it's cheaper or that we have a lower pricing when it's a huge deal like that. We have a standard pricing and we're pretty adamant about getting that price down.
Okay. You state that once again you see negative organic growth in the Nordics, despite likely higher volumes from new bills being rolled out. What would you say the underlying organic growth is in the Nordics, and do you see that accelerating going forward?
No. First of all, the effect of the new bills we haven't seen yet. That is coming during next year. I think it's in October where we start to see the 100s and the 500s being rolled out, and that's when the real volume. That's what's loading into the ATMs. That's the real volume of the new bills. We're going to see that second part of next year. It's difficult to quote a number. I'm not that close to it, but if you look upon it, somewhere around the 5%, -5% in general for the Nordic market. That is what I think. I don't see that accelerating, at least not what I've been following in the last period of time. I'm sure that there are others who are better on guessing what that would be.
We just have to relate to that. There's nothing we can really do about that market. What I think is dangerous to do is to extrapolate that out on the global market. As I said, in many other countries, we don't see anything of that. Where I come from right now, that is not even on the agenda. It's not even thought about. Sometimes we extrapolate things here and say, "That's probably how it's going to be everywhere." Maybe, we don't see that yet.
Just a short follow-up on the new bills in 2016. What kind of volumes do you see from them being rolled out?
I don't think we should overestimate the impact of it. I can't quote the number to you, but it's nothing which is going to have a dramatic impact on our P&L or our revenue. I think that's the best I can guess at this moment. You haven't seen any of the effect yet, and it's going to take at least until the summer before you start to see any positive effects of that.
Okay, finally, what about divesting the General Cargo operation you got through VIA MAT? Is that likely?
It is a business which is different from the other things which we are dealing with right now. It's an integrated part of the company we bought. There's a lot of synergies between those two companies. That's the way we operate it right now. What is in the future? There's nothing which we will have happening this year or so, it's also a question for the person coming after me, really, I think, to take those long-term strategic decisions.
Hi, Karl-Johan Bonnevier here, DNB Markets. Congratulations to fantastic development in North America.
Thank you.
I can understand why you want to be over there. If you look at North America, obviously Bank of America has created a lot of noise in the whole market, if you put it like by them outsourcing. What kind of level of outsourcing do you see in North America at this stage?
Yeah. It's not like everything is changing. This is a process, but it's a pretty slow process. We see the interest in the market from it, but it's really, you have to earn it. In the U.S., there is a lot about security, and I don't necessarily mean physical security, but it's the way how you treat everything from cyber risk or transfer of files and other things. You really have to earn the respect and the trust from the banks in order for them to let you manage their cash and you really manage their brand. For us, one of the key things is to demonstrate that quality. That has been the key thing for us, is to really be able to make them trust us to not being a transport company. We're really a bank, colleague to a bank.
The better we get on that, Loomis, of course, but also the whole industry, the faster I think this will go. It's not like we're seeing an exponential development, by no means. Every week, there's new vaults coming up for tenders or questions and so on.
When you look at the case you showed us in Philadelphia, when you do that kind of upgrade on a facility, how much of excess capacity, if you put it like that, you have to take on other local clients?
That's a very good question. That's what we wrestle all the time. How big do you do this now? Are we going to rebuild for the next vault? You give yourself a bit of it, but there is no rule of thumb. It's not like I say we have to build 20% more capacity. We try to look upon what is the potential, how much market share do we have? What is the competitors? What is the climate there? Some parts of U.S. is more interested in outsourcing than others. It's a mixture, but we really try to figure out. When there comes a big vault like the ones we talked about here, or some other, you can never have that capacity available. You can never have that. You have to do a rebuild. In some cases, we even built new facilities.
In Baltimore, we built totally brand new. We still have to move there, of course, then it's not as messy as it was in this occasion.
When you look at the North American opportunity, obviously the other side of that coin is what kind of promise have you made to the board when it comes to your current position as taking on the helm of the whole company rather than focusing on North America?
No, I'm in the U.S. I'll stay in the U.S., there will be a new person here and a new CEO for Loomis AB. There's never been discussed anything else.
Do you have any idea about the timeframe for the new post?
No. That's something which the chairman has to answer to.
Good luck out there.
Thank you. Okay, we have one more from the floor here.
Sorry. Just on Q2, you said that the CMS cost in U.S., or you didn't say, but Jarl said that it hit the P&L by roughly $0.8 million. Can you quantify that for Q3?
Did he say that?
He did.
Okay. No, I cannot quantify that. I can say that it's less during the Q3 than it was in the Q2. Q2, as I tried to demonstrate here, you have a lot of the cost before the rollout, and most of the big rollouts was really in this one was July, but then we have in August, Baltimore, we have Atlanta now October. There was more in the Q2 than it was in Q3.
Okay. Perhaps a nitty-gritty question. You said 10% September organic growth U.S., right?
We crossed 10%, yes. Including the fuels impact.
Okay.
Fuel impact.
Thanks.
Okay, let's move to the telephone. Do we have operator? Do we have any questions?
Yes, thank you. Yes, we have one question. As a reminder, it's the star one to ask a question. Your first one comes from the line of Daria Fomina. Please go ahead.
Yes. Hello. Looks like I'm the only one on the line. I have two questions, if I may. First one on your cash conversion. I noticed that in the Q3 cash conversion declined year-on-year. It seems to be happening on the back of a stronger seasonality of working capital. Can you give a bit of color on that? Why is it happening? Do you expect it to reverse to the full extent in the Q4? Also a question on cash generation as well, and CapEx specifically. Do you expect pick-up in CapEx on the back of the SafePoint investments that you're doing? You said that it's not going to impact your cost base much. Would there be impact on CapEx? My last question is on the General Cargo business.
Are you still looking to dispose those operations given that they stand out so much from the rest of the business? If so, is there some timeline for that? Thank you.
Fortunately, I was clever enough to get Anders Håkansson, our CFO with us here. I'm going to ask him to answer the first question. Before I do that, let me deal with the two other ones. I think I already answered the question about the General Cargo from the floor here. You are correct that it is a different business than what we do, but it's also very much integrated into the VIA MAT company, which we bought. At the moment, and again, I think that that's a strategic decision for someone coming after me here to take, whether that should be part of Loomis long term or not. It is right now, we treat it like that. We enjoy the synergies with Loomis International, and we go forward like that right now. The other one was the CapEx around SafePoint.
Yeah, with I would call the success and the dramatic development in terms of safes utilized, we are looking upon other ways of financing the SafePoint. Up till now, we've been buying SafePoints, and of course, that has impacted our CapEx. Again, we are certainly for the beginning of next year, if not by the end of this year, we will find some other ways of financing our SafePoints. I cannot even remember the first question, but I'm sure Anders can so. Am I on the line?
Yeah.
Yeah, I think-
I am on the line. It was on working capital.
Okay. I think you're correct when you say that we have been building up working capital in Q3 compared to the previous quarters and as well to last year. Most of that is related to the organic growth. Basically that we're building up accounts receivable, both in the U.S., but also in the U.K. That's basically the effect you get. Most of the cash conversion, I think we came up a little bit higher than 70% during the quarter is actually related to the CapEx programs, as Lars has been discussing, and primarily from the build-out at facilities like the one in Pennsauken, but there are many more of those. As well, the SafePoint, so it's actually good CapEx we're spending. It has, of course, a temporarily negative effect on the cash conversion.
Previously we have guided that we should be around 85% or preferably higher. That's getting more and more stretched, obviously, as we are expanding. All in, it's actually good CapEx that we will harvest over time.
Okay. Thank you, Anders.
Thank you.
Any more questions from the operator?
There are no further questions on the line. Please continue.
Okay. Thank you. Okay, I don't think I have any other questions from the floor either. Thank you very much. Thanks for coming here.