The Gunnebo Security Group · 2016-2020 Operating company Global processes Standardized, lean way...

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Gunnebo’s Capital Market Day 2016

Gunnebo Capital Market Day March 10 2016, page 2

Forward-looking statements

This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein.

This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performances, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. Gunnebo has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated.

Given these uncertainties, readers should not put undue reliance on any forward-looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and Gunnebo does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.

Disclaimer


Strategic Update Henrik Lange

Financial Update Susanne Larsson

Region EMEA Morten Andreasen

Region Americas Dan Schroeder

Region APAC Sacha de La Noë

Summing Up Henrik Lange

Q&A

Today’s Agenda


Strategic Update

Henrik LangePresident & CEO


The Gunnebo Group in Brief

The Leading Global Provider of a Safer Future

Annual turnover: 6,100 MSEK

Employees: 5,500 people

Headquarters: Gothenburg, Sweden

Sales Companies: 32 countries across Europe, the Middle East, Africa, Asia-Pacific and Americas

Channel Partners: 100 additional markets

Listed on the NASDAQ OMX Stockholm, Mid Cap since 1995


Total value estimated to approx. 70 BUSD

Expected annual growth: ~5 per cent

Main drivers

Economic development

Increased standards of living

Urbanisation

Increased safety awareness

A fragmented market

The Global Security Market


Our Regions

EMEA Asia-Pacific Americas

7% = Outside Europe

57 %

7%

18%


Customer Segments

BankCustomers include Bank of India, Citibank, HSBC, ING Bank, LCL, Nordea, Manappuram Finance, State Bank of India and Standard Bank.

RetailCustomers include Aldi, COOP, Leroy Merlin, Smart Club, Catwalk and Statoil.

Industrial & High-Risk SitesCustomers include manufacturing plants, logistics centres, power plants, prisons, casinos and stadia.


Customer Segments

Mass TransitCustomers include the public transport networks of Barcelona, Beijing, Bogotá, New Delhi and Shanghai and airports in Bahrain, Boston, Dubai, London, Madrid, Paris, Sydney and Warsaw.

Public & Commercial BuildingsCustomers include the European Commission, NATO, the UK Home Office as well as American Express, Microsoft, Nestlé, Shell and Vodafone.

Cash In Transit (CIT)Customers include Brinks, G4S, Loomis and RCCS.


The Gunnebo Group: Organisation

President & CEO

Henrik Lange

EMEA

Morten Andreasen

Asia-Pacific

Sacha de La Noë

Americas

Dan Schroeder

Entrance Control

Robert Hermans

CFO

Susanne Larsson

Human Resources

Magnus Lundbäck

Group Operations

Lars Thorén

Business Development

Tomas Wängberg

http://midas.gunnebo.net/sites/hr/org/Organisation Charts/Asia Pacific.pptx

http://midas.gunnebo.net/sites/hr/org/Organisation Charts/Americas.pptx

http://midas.gunnebo.net/sites/hr/org/Organisation Charts/Americas.pptx

http://midas.gunnebo.net/sites/hr/org/Organisation Charts/Group Operations.pptx

http://midas.gunnebo.net/sites/hr/org/Organisation Charts/Group Operations.pptx


Gunnebo Operations

Gunnebo Operations is responsible for manufacturing, purchasing and procurement.

Manufacturing footprint – production units in 10 countries across the world

Asia-Pacific: Jakarta (Indonesia), Halol (India), Kunshan (China)

EMEA: Baldenheim (France), Bazancourt (France), Binefar (Spain), Doetinchem (Netherlands), Lavis (Italy), Markersdorf (Germany), Wadeville (South Africa)

Americas: Cincinnati (USA)

ISO Certification

The majority of the Group’s plants have certification for ISO 9001 (quality processes) and ISO 14001 (environmental management)

Gunnebo Operations System (GOS)

GOS has been implemented in all plants to improve efficiency in production processes


We want to help create a safer world

Broad product portfolio

Long customer relationships

Broad service capability

Good knowledge of both software and hardware

Engaged employees

Reflection: Why Gunnebo?


Holding company

Island mentality

Local processes

Insufficient profitability

Limited cash flow focus

Gunnebo’s Journey to Profitable Growth

2016-2020

Operating company

Global processes

Standardized, lean way

of working

Customer focused

Good profitablility

Cash flow focus

FROM: TO:


Gunnebo’s Strategy: Profitable Growth

The leading globalprovider of a safer future

Cash Management Entrance Security Electronic SecuritySafes & Vaults

Software platform

Employee Engagement & Performance Culture

The Group’s mission is to help create a safer world by offering security products, services and solutions that create value for shareholders,

customers, partners, employees and society

Solution selling to key accounts in customer segments

Operational excellence

PRODUCT PILLARS


Strategy and Strategic Priorities


MEET

financial

targets


Organic growth: 5%

Operating margin: 7%

Return on capital employed: 15%

Equity ratio: 30%

Gunnebo’s Financial Targets

5% 7%

15% 30%


Performance against Financial Targets

Average annual development over 5 years

Organic growth: 0.6%Operating margin: 5.8%ROCE 12.0%Equity ratio: 38.6%

Organic growth: 5%



Equity ratio: 30%


Meet Financial Targets

Organic growth: 5%



Equity ratio: 30%

5% 7%

15% 30%


GROW

product areas


EMEA

Asia-Pacific

Americas

Safes & Vaults

Cash Management

EntranceSecurity

Electronic Security

Operational P&L

Responsibility

Strategic Direction

Product Roadmap

R&D

Regional & Product Responsibility


Safes & Vaults


Total Market Size and Forecasted Growth

Source: Safes and Vaults. “A Global Strategic Business Report” – May 2014

31%

28%

41%

World Market for Safes &

Vaults 2013 22bn SEK

Americas (bn€)

EMEA (bn€)

APAC (bn€)

0

1

2

3

4

5

6

7

Americas EMEA APAC

% o

f A

nn

ual G

ro

wth

Rate

Annual Growth Rate 2013-2020


Total Market Size and Forecasted Growth: ATM Market

Source: Global ATM Market and Forecasts to

2018, published by RBR in Aug 2013

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Number of ATMs


ATM OEM Business

Global KAM and support

Global demand chain with product availability

Global design and optimization

Value Engineering for continuous cost reductions

Global manufacturing footprint

Test and certification management


Market Drivers: Safes & Vaults High Segment

Reduction of bank market/branch network, reduction of protection in banks and more non vault banks in mature markets while growing in emerging markets

Trend towards lower protection levels in mature markets due to increasing focus on electronic measures/technology

Increased interest for high protection solutions outside banks (as retail, pharmaceutical etc.) driven by legislation

Trend towards intelligent locking solutions and more technology/customizations, from product to solutions need


Market Drivers: Safes & Vaults Low Segment

Large growth with increasing demand for low/ungraded safes. Popularity of hotel safes and home

safes is growing.

Developing countries power future market growth

Online sales are growing

Changing purchasing behaviors


PRODUCT

ROADMAP


Safes & Vaults: Product Roadmap

Protect high segment

Grow low segment

Reduce cost


Cash Management


Cash Continues to Be King


Cash Management: The Retail Market

Source: Combination of external reports, internal resources and market intelligence

APAC

2.3m stores

Americas

1.8m stores

10%

Market Growth

11%

Market Growth

6%

Market Growth

EMEA

4.1m stores


Acquired Q3 2015. Integration ongoing.

Based in Binefar, Spain

Strong background in R&D

Sallén is the new cash deposit product center for Gunnebo

Sallén products stengthen Gunnebo’s global offering

Gunnebo will capitalise on strong localrelationships with key customers

Grupo Sallén: Strong Contribution to the Gunnebo Portfolio


GUNNEBO’S OFFERING

How we help our customers


Cash Management: Product Roadmap

Start of Day

Start float

Retail Front Office Retail Back Office CIT / Bank

Deposit Solutions (Basic)

Recycling / Dispensing Solutions (Advanced)

Closed Cash Handling Solutions (Integrated)

Cash Sales Transactions

Transport End float Transport Process InformationCIT Process& Transport

Third party technologyOwn technology

Recycling Solutions (Advanced)

Deposit Solutions (Basic/Advanced)

Sallén contribution


Increased fast software and customization capabilities

Cash Management: How We Serve Our Customers

Bundle note feed SafePay

Updated recycling and closed cash (low cost)

Develop universal note reader

Consolidate product range and software

Become the link between retailers, banks and CIT’s

Build regional competence and customization capabilities

Increased product management and sales capabilities in factories


Entrance Security


Entrance Control

Security Doors & Partitions

Electronic Article Surveillance -Gateway

Entrance Security in Gunnebo


Entrance Control: Introduction

70,000+ Gunnebo gates installed worldwide

90 million+ people processed daily

1 in 7 entrance security gates sold worldwide is a Gunnebo gate

1 in 4 speed gates sold in Europe is a Gunnebo SpeedGate


The Entrance Control Market

10.4%9.9%

6.7%

6.0% 5.9%

4.3% 4.2% 4.0% 3.8%3.5%

2.9% 2.7% 2.6% 2.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Annual Growth Rate by Market Segment 2014-2020 (%)


Public & Commercial Buildings

Exposure to terrorism risks, protection of people is key

More single passage detection required

Demand for multi-resistant products

Special attention to risk of human bombs

Automatic control of people

Research programmes funded by EU

Regulations for fire

High-Risk Sites

Seveso 3 directive to be implemented in Europe (10,000 sites )

New security directive for nuclear power plants (Fukushima directive)

Special measures to be implemented for utilities plants

Regulations for fire additional to other resistance levels

Security Doors & Partitions: Market Drivers By Segment





Entrance Control: Product Roadmap

Enhance existing performance

Differentiate through design

Build more intelligence and connectivity

Bundle “solutions” with other technologies


2. RFID reader in gate

Intelligent Gates: More Data, More Intelligence

1. Valuable equipment tagged with RFID

3. Database matching equipment with person


New range of Security Revolving Doors

New range of Security Booths

New SpeedStile variants

New range of Full-Height Turnstiles

Entrance Control: Product Launches in 2016


SECURITY DOORSSECURITY

PARTITIONS/WINDO

WSSECURITY AIRLOCKS SAFETY EQUIPMENT

TRANSFER SOLUTIONS

SECURED MOBILE UNITS

Manual Attack ResistantEN 1627

Manual Attack ResistantEN 1627

Public Reception Security Locks Paypoint Windows Mobile Bank

Bullet ResistantEN 1522

Bullet ResistantEN 1522

Staff Access Single Passage Detector Transfer and Sliding Trays ATM Kiosk

Blast ResistantEN 13123/4-1

Blast ResistantEN 13123/4-1

Automatic Doors Metal Detector Front Opening Counters Guard House

Fire ResistantEN 1634-1

Modular WallingEN 1627 - 1522

Automatic Doors Transfert Unit

Security Doors & Partitions: Product Roadmap

TRANSFER SOLUTIONS

Airtube system

Software

Transfer

solution


Solutions for Electronic Article Surveillance: Gateway

RFID Store Assist

Antennas (AM, EM, RF) People Counting Security Displays POS Monitoring


Electronic Security


Electronic Security: Market Drivers

Increasing demand for securing government risk sites such as energy

& utility, nuclear, water supplies, military, etc.

Strong demand for video surveillance:

Growth of IP

Video analytics

Changes in national security regulations

Need for integrated systems

for data analysis

Focus on core activities with automated security systems





Electronic Security: Access Control


Electronic Security: Video Surveillance


Electronic Security: Intrusion Detection


SOLUTIONS

software


CASH

MANAGEMENT

ELECTRONIC

SECURITY

SAFES & VAULTS

BANK

RETAILMASS TRANSIT

PUBLIC & COMMERCIAL BUILDINGS

ENTRANCE

SECURITY

How To Connect Solution Selling

INDUSTRIAL & HIGH RISK SITES


Cash

Management

Electronic

Security

Safes &

Vaults

BANK RETAIL MASS TRANSIT

PUBLIC & COM BUILDINGS

Entrance

Security

How To Connect Solution Selling

INDUSTRIAL & HIGH RISK SITES

SOFTWARE INTEGRATION


The Interconnected Gunnebo Product Portfolio: Retail Example


The Interconnected Gunnebo Product Portfolio: Retail Example


KEY

Account Management


What we will do:

Strengthen and drive key account management

Utilize management to leverage large potential accounts

Use key account input for product planning

Structured follow-up through CRM implementation

Key Account Management

What it will give:

Make it easier to do business

Help sales become more successful

Replicate good solutions

Drive the R&D agenda

Find profitable growth


SERVICE

delivery


What we will do:

Implement a common process for service execution

Spread best practice of existing solution

Service Delivery

What it will give:

Create customer loyalty

Make it easier to do international business

Help sales become more successful

Strengthen key account capabilities

Lower our cost


DRIVE

productivity


How To Deliver Sustained Profitable Growth

Hope and energy

Resources for

lean

growth

Radical performanceimprovements

Creation and pursuitof new opportunities

Radical improvementsin resource productivity

Sweet Sour


Our cost cake:

MSEK

V COGS ~3,600

F COGS ~500

Sales & Admin ~1,400

Other ~200

Total ~5,700

Gunnebo Total Cost Cake 2015

By main category:

MSEK

Dir material ~2,000 37%

Wage/salary ~2,300 40%

Other ~1,400 23%

Total ~5,700


Drive Productivity

+

-

Productivity Cost Increase /Inflation

Price Reinvestment Earnings

Productivity should drive short & long-term growth


CASH

for growth


Cash For Growth

By implementing our key priorities wewill over time:

Tie up less inventory in the demand chain

Improve our collection capabilities and reduce

overdue A/R

Leverage our procurement and negotiate betterterms

This will improve our NWC % sales and werequire less capital to grow our business

Inventory % sales 11A/R % sales 19A/P % sales 10NWC % sales 20

Working capital 2015


IT/IS

capabilities


CRM capabilities

Common master data

Common processes – standard way of working

Standardized ERP implemented

IT/IS Capabilities


DEMAND

Chain


Purchasing Engineering Manufacuring

Logistics

Sales Engineering Service


Build on: Good

communication Structured

forecasting

Results: Make / buy decision made by product owner

based on requirements Group purchasing leveraging total spend

Group logistics optimized set-up with good service and less capital intensity

Cost/quality/service requirements clear Lean value chain

The Gunnebo Demand Chain


Purchasing:

2,000 MSEK Too many suppliers

Logistics:

650 MSEK inventory Too many warehouses

We will change this to:

Improve the customer service Tie up less capital Lower our cost

Demand Chain Opportunities


EMPLOYEE

engagement & performance culture


Highly engaged employees are

480%

more committed to helping their company

succeed

Source: Tempkin Research 2015

Employee Engagement

Highly engaged employees are

250%

more likely to recommend

improvements


STRATEGY ROADMAP

The Priorities


Gunnebo’s Strategy Roadmap: The Priorities

SH

AR

EH

OLD

ER

CU

STO

MER

PR

OC

ES

SES

EM

PLO

YEES

Meet our Financial Targets

Grow Product Areas

Solutions Software

Demand Chain

Service Delivery

Cash for Growth

Employee Engagement &Performance Culture

Drive Productivity


IT/IS Capabilities


Find a path of profitable growth

Utilize our technology to better capture growth per segment

Improve key account management & service delivery

Strengthen the demand chain

Focus on productivity

Attract & retain good people

Meet our financial targets

Key Takeaways

Capital Market Day 2016Financial Update

Susanne Larsson, CFO


Financial Goals

5%Organic growthof at least 5%

7%An operating margin

of at least 7%

15%Return on capital

employed of at least 15%

30%An equity ratio ofno less than 30%

Gunnebo’s financial goals contribute to a good return for the Group’s shareholders and focus on profitable growth.


Gunnebo Performance Last 15 Years: Organic Sales Growth and Operating Margin


7%An operating

marginof at least 7%


Gunnebo Performance Last 15 Years: Equity Ratio and Return on Capital Employed


How We Have Performed Against Our Targets

Average annual development over:

5 years

Organic growth: 0.6%Operating margin: 5.8%ROCE: 12.0%Equity ratio: 38.6%



of at least 7%





Gunnebo Result: 2014 and 2015

January – December, MSEK 2015 2014

Net Sales 6,052 5,557

Gross Profit excl non-recurring 1,800 1,675

Selling and Admin costs, excl non-recurring -1,401 -1,326

Operating Profit, excluding non-recurring 397 366

Non-recurring items -77 -14

Operating Profit 320 352

Net Profit 168 227

Gross Profit Margin, excl non-recurring, % 29.7 30.1

S&A % sales, excluding non-recurring, % -23.9 -23.1

Operating Margin, excl. non-recurring, % 6.6 6.6

Operating Margin, % 5.3 6.3


December, MSEK 2015 2014

Intangible assets 1,812 1,675

Fixed assets 358 304

Inventories 678 694

Accounts receivables 1,150 1,125

Other assets 591 580

Cash 496 447

TOTAL ASSETS 5,085 4,825

Equity 1,747 1,694

Loans 1,353 1,067

Pensions 362 425

Accounts Payable 635 660

Other liabilities 988 979

TOTAL EQUITY AND LIABILITIES 5,085 1,694

Inventories % sales 11.2 12.5

A/R % sales 19.0 20.2

A/P % sales 10.5 11.9

Operating capital % sales 19.7 20.6

Gunnebo Balance Sheet: 2014 and 2015


* EPS adjusted for FBT sales 2014, and non-recurring items net 2014-2015

January - December 2015 2014

Return on capital employed, % 10.1 12.1

Return on capital employed, excl non-recurring items, % 12.4 12.6

Equity ratio, % 34 35

Debt/equity ratio, times 0.7 0.6

Earnings per share, SEK 2.18 2.98

Earnings per share adjusted *, SEK 2.56 2.29

Free cash flow, MSEK 56 223

Free cash flow per share, SEK 0.73 2.94

Gunnebo Key Figures: 2014 and 2015



SH

AR

EH

OLD

ER

CU

STO

MER

PR

OC

ES

SES

EM

PLO

YEES


Grow Product Areas

Solutions Software

Demand Chain

Service Delivery

Cash for Growth


Drive Productivity


IT/IS Capabilities


Be recognized as a leading global provider of a safer future by customers, suppliers, competitors and employees

Provide sufficient return to our shareholders, for them to reinvest in our company

Generate sufficient cash flows to finance investments, acquisitions and dividends

Sustainable Profitable Growth


ORGANIC

sales growth



Net Sales, MSEK


Organic Sales Growth, %

Full yearOrganic Growth

2015: 0%2014: 2%2013: 1%


Organic growth in focus. A prerequisite for sustainable profitable growth, fuelling productivity

Clarity in our strategy and our execution

Product and business developmentfocus

Handshake between product areas and regions/operations

Defined and established solution software

Efficient service delivery

Strategy Execution: Organic Sales Growth of at Least 5%


Operating

PROFIT MARGIN


of at least 7%


Operating Profit, MSEK

Operating Profit Operating Profit, excl. non-recurring items

Full yearOperating Profit

excl. non-recurring

items

2015: 3972014: 3662013: 306

Operating Profit

2015: 3202014: 3522013: 222

* Operating Profit excl. non-recurringitems amounted to 98 MSEK in Q2 2014

*


Operating Profit Margin, %

Operating Margin %, Quarter Operating Margin % Quarter, excl. non-recurring items

Operating Margin %, 12M Operating Margin % 12M, excl. non-recurring items

Full yearOperating Margin,

excl. non-recurring

items

2015: 6.62014: 6.62013: 5.8

Operating Margin

2015: 5.32014: 6.32013: 4.2

* Operating Margin,

excl. non-recurring

items

2014 Q2: 6.9

*


Operating Profit, Regions and Group, excl non-recurring items


Strategy Execution: Operating Profit Margin of at Least 7%

Focusing profitable growth in our business

Value selling helps us increasing price

Productivity in product cost and S&A. Drive excellence finding lean ways of working.

Focusing on the full demand chain, its effectiveness and cost

Standardized and efficient IT/ERP capabilities deployed


Our Cost Cake: Material and People

Productivity initiatives focusing material and people cover 75-80% of our cost cake

Need to ensure sustainable productivity beyond inflation

Restructuring initiatives to provide a step change to impact cost cake long term

COGS and Opex 2015 2014 2013 2012 2011

Material 2,097 1,925 1,767 1,698 1,844

Employees 1,912 1,886 1,835 1,837 2,013

Temporary employee 374 311 293 325 346

Other than people and mtrl 1,347 1,175 1,162 1,194 1,176

Total operating costs 5,730 5,295 5,057 5,054 5,379

Operating costs excl mtrl 3,633 3,371 3,290 3,357 3,535

Material % total 37% 36% 35% 34% 34%

Employees & temps % total 40% 41% 42% 43% 44%

Employees & temps % total excl

mtrl 63% 65% 65% 64% 67%


Gross margins to be protected

Value & solution selling to motivate price

Productivity in people and material

Global purchasing with supplier consolidation and cost reduction

Manufacturing footprint and logistic network optimization

Business excellence and lean

Gross Profit Margin Development

30.5%

30.0% 30.0%

29.6%

29.3%

28.0%

29.0%

30.0%

31.0%

32.0%

1,500

1,550

1,600

1,650

1,700

1,750

1,800

2011 2012 2013 2014 2015

Gross Profit 2011-2015

Gross Profit Gross Profit (%)


Productivity focus, finding new ways of working; shared service centres & support structures

Clarified roles - who does what

Business excellence and lean way of working

Implementation of ERP

Selling and Administrative Margin Development

26.3% 26.5%

26.0%24.9%

24.0%

22.0%

23.0%

24.0%

25.0%

26.0%

27.0%

28.0%

1,300

1,320

1,340

1,360

1,380

1,400

1,420

1,440

1,460

1,480

1,500

2011 2012 2013 2014 2015

Selling & Admin 2011-2015

Selling & Admin expenses Selling & Admin ratio (%)


Return on

CAPITAL EMPLOYED




Free Cash Flow by Quarter (MSEK)

Full year

2015: 562014: 2232013: 144

Free Cash Flow 12M


Net Debt (MSEK)

Gunnebo AB

Dividend paid

2012 Q2 76

2013 Q2 76

2014 Q2 76

2015 Q2 76


Return on Capital Employed of at Least 15% - Strategy Execution

Ensuring ways of working are standardized, efficient and well connected

Implementing standardized processes in ERP template

Focusing on the full demand chain, itseffectiveness and cost

Increased turnover of working capital to support growth

Decreased working capital release cash for growth


Operating Working Capital Development

17%

18%

19%

20%

21%

22%

23%

24%

0

200

400

600

800

1,000

1,200

1,400

2011 2012 2013 2014 2015

Operating Working Capital 2011-2015 (MSEK)

Month end value Rolling 12 months

Avg WC in % of R12 sales WC end value

Reducing number of suppliers, procurement costs and terms & conditions

Simplifying the logisticnetwork and take outinventory and cost

Implementing cost efficientorder to cash process providingcash for growth


EQUITY

ratio



Equity Ratio of No Less Than 30%: Gunnebo’s Performance 2000 - 2015


Equity Ratio of No Less Than 30% - Strategy Execution

Healthy profits

Converting inventory, accounts receivable and payable to cash faster

Investing on par with depreciations over a lifecycle

Generating cash to finance investments, acquisitions, pay dividends and reduce loans


Sustainable

Profitable growth


Holding company

Island mentality

Local processes




2016-2020

Operating company

Global processes


of working

Customer focused

Good profitablility

Cash flow focus

FROM: TO:


We Have Defined the Strategic Priorities in a Strategy Roadmap


Result

Organic growth

Productivity focus

Standardized ways of working

Global demand chain

Balance sheet

Inventory – logistic network optimization

Accounts receivable - Order to cash process optmization

Accounts payable – supplier consolidation, cost and terms & conditions

Cash flow

Result improvements

Working capital efficiency

Sustainable Profitable Growth: Summary






of at least 7%


Region EMEAMorten Andreasen

SVP EMEA


Region EMEA: Overview

Net Sales 2015: 3,860 MSEK64% of Group Sales38% of Group EBIT

20 sales companies split into 8 sub-regions:

EuropeCentralFranceNordicSouthUK & Ireland

EMEA Developing MarketsEastern Europe & CISMiddle EastAfrica

28%

26%12%

11%

10%

6%

4% 2%

Sales by Sub-Region 2015

France Central South Nordics

UK & Ireland Africa Middle East EE & CIS


Region EMEA: Overview - Europe

Offering On mature markets in Europe,

we are developing from being a security equipment supplier to a security solutions provider

More than 25% of sales comes from services

Biggest growing businesses are within Electronic Security, Cash Management and Entrance Security

Largest integrated security solution projects are handled in France

NordicGunnebo has its origins in Sweden and today has sales companies in Sweden, Denmark and Norway

CentralSales companies in Germany, Austria, Belgium/Luxembourg,Netherlands and Switzerland

Manufacturing of Safes & Vaults in Doetinchem (NL) andMarkersdorf (DE)

SouthSales companies in Italy, Portugal and Spain

Manufacturing in Lavis (IT) of Entrance Security and in Binefar (ES) of Cash Management

UK & IrelandGrown from the traditionalsafes & vaults business originally under the 150 year-old Chubbsafes brand

FranceAlso grown from a traditionalsafes & vaultsbusiness knownas Fichet-Bauchewhich originated in 1825

Manufacturing in Baldenheim ofEntrance Securityand in Bazancourtof Safes & Vaults


Region EMEA: Overview – Developing Markets

Offering In the Middle East, the core

business is safes & vaults, electronic security and entrance security

In Africa, safes & vaults and entrance security are the mainofferings

In Eastern Europe, safes & vaults and entrance securityare the major product groups

Poland is also the base for Gunnebo’s global service team who carry out installations across the world. An exampleis all EU representations worldwide.

AfricaBased in South Africa with salesoffices in Nigeria and Kenya.

Covers sales to all African countriessouth of the Sahara.

Manufacturing of Safes & Vaultsand entrance Security in Wadeville (ZA)

Eastern Europe & CISSales companies in Poland, Czech Republic and Hungary. Distributor network to a further 20 countries driven from Poland.

Middle EastBased in Dubai with salesoffices in Turkey, Oman and Saudi Arabia.

Covers 14 countries in the region.


Stabilised topline

Execution of restructuring programmeshelped to improve profit

Continued good development of business within solution sales and our targeted international customers (KAM)

Good development within Cash Management, Electronic Security and Entrance Security

Sales to bank sector a continued challenge:

Banks reducing branch networks

Whole sector challenged by low interest rates and increased regulation on e.g. liquidity

Strong position in Central Banks through projects with Central Bank of Oman and Central Bank of Ghana

Region Europe, Middle East & AfricaFull year

MSEK 2015 2014

Order intake 3,836 3,620

Organic growth, % 0

Net sales 3,860 3,644

Organic growth, % 0

Operating profit/loss excl. non-recurring items 151 109

Operating margin excl. non-recurring items, % 3.9 3.0


Operating profit/loss 84 108

Region EMEA: 2015 in Summary


Service efficiency

Shared Services – sub-regional centralization

Bundling smaller organisations into one bigger one to achieve critical mass

Procurement and Logistics

Individual Country restructuring

Software Support to increase efficiency in sales and administration

Activities to Improve Productivity in Europe

EMEA IAC Full year 2015

-67 MSEK

Transfer of productionfrom Trier (DE): -15 MSEK

People reduction in Europe


Region EMEA: Macroeconomics

Europe Positive GDP growth in 2015 for the second consecutive

year with 1.9% in EU and 1.6% in Euro Zone*

Forecast is positive for 2016-2017**

Middle East and Africa*** GDP growth in Africa was 4.5% in 2015 and projected at

5% in 2016

GDP growth in the Middle East is stable at around 3% for the second year running. Geo-political instability and low oil price put pressure on the region.

Central and Eastern Europe has grown at seven-year-high 3.3%. Projected to continue to grow at 3.1% in 2016.

*Source: European Economic Forecast**Source: The Economist***World bank


Region EMEA: Market Trends

Western Europe

Main drivers are economic growth, increased standards of living and urbanisation

Annual market growth estimated at 2-3%

Eastern Europe

Increased investments in construction, together with increased wealth among businesses and population in general, have been important market drivers


Africa

Main drivers are urbanisation, economic growth, increased personal wealth and investments in physical and financial infrastructure


Middle East

Main drivers are economic growth and increased personal wealth

Trend towards increased security for public and commercial buildings


http://ec.europa.eu/economy_finance/eu/forecasts/2014_winter/overview_en.pdf

http://www.economist.com/blogs/graphicdetail/2015/11/taking-europe-s-pulse

http://www.worldbank.org/en/publication/global-economic-prospects/regional-outlooks/Global-Economic-Prospects-June-2015-Middle-East-and-North-Africa-analysis


Region EMEA: Bestsellers

Services Electronic Security Safes & Vaults Cash Management


Region EMEA: Customers

Gunnebo President & CEO Henrik Lange signs agreement on Cash Management with Transguard’s Dr Abdullah in Dubai,

autumn 2015

Main customer segment is Bank State-owned banks – stable business Private banks – contracting throughout Europe, but stable in

Middle East/Africa and EE/CIS

Mass Transit & Airports Generally a stable business A growing market in airports, particularly due to emphasis on

boarding productivity, which Gunnebo with its new generation boarding gates is well equipped to handle.

Retail (& CIT) Hugh market with millions of Points of Sales. Some retailers live

with cyclical patterns, others – like food retailers – are stable. Overall a growing market.

Increasing business for Gunnebo in this market, primarily with Cash Management solutions.

Public & Commercial Buildings Well-developed business in most markets Demand is increasing due to further need for protection

Industrial & High-Risk Sites This market develops strongly, mainly due to increased threat of

terror and legislation for high risk sites. Gunnebo is well positioned to handle this market.


Region EMEA: Customers

Bank RetailPublic &

Commercial Buildings

CITIndustrial & High-Risk

Sites


Italian supermarket chain, ConadPac 2000a, has signed a two-year agreement worth €3 million for the delivery of closed cash management systems

200 SafePay units will be delivered to the retailer in a multi-year contract

Conad is a leading retail store brand in Italy and operates one of the country’s largest supermarket chains

Conad currently has more than 1,200 supermarkets and is continuing to expand its business

PRESS RELEASE: Italian Retailer Signs Cash Management Deal with Gunnebo


Resource dedicated to following the customer (lead KAMs) to ensure focus and coordination

Develop and maintain long-term business relationships

Up-to-date on trends & developments on customer’s market

Qualitative input to our strategic product development

Recurrent revenue

Results:

Enabled us to have +100 MSEK turnover in 2015 split by several countries with French BNP Paribas

Region EMEA: Developing the Business through International Key Customers


BNP Paribas is a leading global French bank operating in 75 countries with 189,000 employees and a turnover of €42.9 billion in 2015

Gunnebo is providing security solutions to the bank across several product areas

Safes & vaults

Entrance security with reinforced and interlocking doors

Electronic security with integrated access and intrusion alarm systems (SecurWave)

Installation & services

Our integrated solutions help secure people, premises and cash at BNP sites primarily in France and Belgium

Total orders value: +100 MSEK

CUSTOMER CASE: BNP Paribas


Close monitoring of development in key segments to be able to propose security solutions that fit the issues and opportunities on those markets

Example

The Industrial & High-Risk Sites segment where pan-European legislation on high-risk sites called SEVESO sets requirements for minimising risk and vulnerability

Gunnebo has relevant security solutions to help sites comply with these regulations

Results:

Enabled us to have +20 MSEK turnover in 2015 with a gas infrastructure company in Italy

Region EMEA: Developing the Business through Prioritised Customer Segments


Swedavia owns and operates ten airports across Sweden, including Stockholm Arlandaand Gothenburg Landvetter

As part of the Self-Service initiative to improve the customer experience in airports, Swedaviahas signed an agreement with Gunnebo for automated pre-security and boarding gates

The gates will make it quicker and easier for passengers to identify themselves when going through security checks and boarding aircraft

Total order value: +30 MSEK

CUSTOMER CASE: Swedavia


Region EMEA: Developing the Business through Efficient Service Delivery

Process optimization/replication

Regional service organisations

Shared backoffice/dispatch

Quality improvements

Service ”R&D”


Contract based on:

Nationwide bank branch maintenance

24/7/365 service, 2-hour response time

Service Delivery and efficiency improvements:

As part of new service operating model and system implementation we implemented the following improvements:

E-mail integration

Automatic communication pre-approval invoices process

Standardized and automatic reporting

Results:

SLA fulfilment of 93% (90% target) and above 97% for critical calls

11% reduction in 2015 of call-out costs

22% of call reduction from 2012

CUSTOMER CASE: Service Contract UK Bank

"Performance is the strongest within the supply chain” Customer Contract Manager


Offering:

Multi-client Remote Monitoring centre for Cash Management systems

Hosting of CashControl

Proactive monitoring service of cash management installed base

Service Delivery and efficiency improvements:

CashControl software with map console and sensors in the systems

Direct communication with users for quick action to avoid further issues

Early dispatching of technicians when needed

Results

Early identification of risks in the systems eliminates the need for client calls

Increased uptime of the systems

Reduced total cost of ownership for clients

BUSINESS CASE: Remote Cash Monitoring in the Netherlands


Region EMEA: Brands

GUNNEBO is used widely in the region within Electronic Security, Entrance Security, Cash Management and Service

Well-established business within Safes & Vaults with banks in the region for more than 175 years under the Chubbsafes, Fichet-Baucheand Rosengrens brands

Solutions within electronic article surveillance marketed and sold under the Gateway brand

Local tactical brands include Clear Image, Churchill (UK) and Alltech (South Africa)


Louis XIII Cognac, one of the world’s most prestigious spirits brands, launched a highly creative campaign in 2015 entitled ‘100 Years – The Movie You Will Never See’

One thousand guests from around the world received an exclusive invitation for their descendants to attend the premiere in 2115

To ensure that the film itself remains unseen until that date, it has been placed in a uniquely designed Fichet-Bauche safe

Fichet-Bauche was chosen by Louis XIII Cognac due to the brand’s reputation as a world-renowned, high-end label

BRAND CASE: Louis XIII Cognac


Region EMEA: Routes to Market

In Europe, sales are carried out primarily via direct sales to end customers through Gunnebo’s sales companies

In Middle East & Africa, sales are primarily through channel partners

Gunnebo also sells big projects in close collaboration with integrators and specifiers such as architects, security advisors, engineers, etc.


Grow product areas

Solution selling

Key Account Management (KAM)

Service delivery

Productivity focus

Region EMEA: Key Activities to Profitable Growth


Region EMEA: Key Takeaways

Europe Macroeconomic environment is improving

after a difficult period Stabilised sales Will grow topline by proposing integrated security

solutions to key international customers in defined high-growth segments

Continued productivity focus

Middle-East Geo-political environment and low oil price

putting pressure on business climate Overall GDP growth remains high Will continue to develop big projects in central

banks (Electronic Security), Entrance Security and going forward Cash Management

Africa Focus on strengthening indirect sales Starting up new business areas, e.g. within

Cash Management


Sales Region AmericasDaniel Schroeder, SVP Region Americas


Region Americas: Overview


38%

20%

15%

15%

12%

USA Canada Brazil Mexico Other countries

Sales companies: 4

North AmericaCanadaUSA

Latin AmericaBrazilMexico


Region Americas: Overview

Offering:

Safes & Vaults Drive-Up Systems Electronic Security Entrance Security Loss Prevention in Brazil –

electronic article surveillance (EAS), cash management and alarm systems for retail

USAHamilton Safe acquired in 2012. US’s second largest provider of safes and vaults to banks and government.

Local production in Cincinnati.

BrazilEstablished in 1990s under Gatewaybrand. Acquired by Gunnebo in 2012.Today a leading provider of Loss Prevention solutions to retailers.

MexicoSales company set up in 2013. Dissamex acquired in 2014 –electronic security services provider to most major national banks.

CanadaIn business since 1960s. Originally established under Chubbsafes brand.


Acquired 2012

Strong regional footprint

R&D and production capabilities

Safes & Vault

Cash Management

Electronic Security

Security Doors

Hamilton Safe - Strong brand recognition

Knowledge transfer across Gunnebo product areas

Hamilton Integration


Region Americas: 2015 in Summary

Strong organic growth of 8%

Good sales of Loss Prevention solutions to retailers in Brazil

Continued growth in Electronic Security services to national banks across Mexico

Sale of Entrance Security solutions in USA also positive

Global portfolio expanding into new markets -Cash Management offering introduced into USA, Canada and Mexico

Strategic partnership made with systems integrator in Brazil to open up business in new segments

Region AmericasFull year

MSEK 2015 2014

Order intake 1,188 826Organic growth, % 26 -14

Net sales 1,107 884Organic growth, % 8 0





Gunnebo Capital Market Day March 10 2016, page 142*Source IMF World Economic Outlook January 2016

Economic cycles of region’s countries in different phases

2016: growth in Canada, US and Mexico, but Brazil still in recession*

Weakening oil price is deeply impacting Canadian economy and oilproducing states in the US

Capital expenditures are increasing in Canada and Mexico In the US, CapEx is increasing as a percentage of GDPIn Brazil it is shrinking

Inflation spans from 0.1% in the US to 8.9% in Brazil

Region Americas: Macroeconomics


Region Americas: Market Trends

North AmericaOverall growth rate: 4-6%

Demand expected to grow as bank sector recovers after period of consolidation and branch closures

Changes in competitive landscape

Interesting opportunities on emerging cash management market

Latin AmericaOverall growth rate: 5-7%

Growth driven by:

Increasing awareness of security needs

Continued investment by national and multinational companies in the region

Increased interest in security solutions from new customer segments


Region Americas: Bestsellers

Safes, Vaults and Drive-Up Systems

Electronic SecurityElectronic Article

Surveillance (EAS)Entrance Security and

Security Doors


Region Americas: Customers

Bank Leading provider of Electronic Security services to

banks in Mexico Leading provider to banks in the USA via Hamilton

Safes – safes, vaults, drive-up systems and more recently cash management

Retail (& CIT) Major provider of Loss Prevention solution to

retailers in Brazil Electronic Security services in Mexico

Public & Commercial Buildings Important segment in Canada for Entrance Security Hamilton Safes in USA a strong brand in public

administration sector

Airport Important segment in Canada for Entrance Security


Region Americas: Customers

Bank Retail Other


International DIY retailer, Leroy Merlin, expanding presence in Brazil

Gunnebo partnered with Leroy Merlin as single supplier of complete portfolio of security solutions

For flagship Tamboré store in São Paulo, Gunnebo deployed a complete package of security solutions including electronic article surveillance anti-theft systems, CCTV, cash management and alarm monitoring

Installation also included video analysis and image monitoring equipment as well as people flow counters to provide useful data on footfall

CUSTOMER CASE: Leroy Merlin, Brazil


To safeguard the quality of its night deposit service, CIBC had to ensure that ageing and damaged deposit heads were upgraded

Gunnebo developed a deposit head replacement solution, adaptable to virtually any of CIBC’s deposit machines

This eliminated the need for the costly replacement of the entire safe

To date over 250 units have been upgraded

CUSTOMER CASE: Canadian Imperial Bank of Commerce (CIBC)


Region Americas: Brands

GUNNEBO has been used as a brand in the region for many years, together with other strong local brands

HAMILTON SAFE is the dominant brand in USA with a strong reputation amongst banks and public administration

Well-established business within Safes & Vaults in Canada under the CHUBBSAFES brand going back 60 years

In Mexico business is now carried out under the GUNNEBO brands

In Brazil both the GATEWAY (electronic article surveillance) and GUNNEBO brands are used


Region Americas: Routes to Market

Safes & Vaults, Security Doors Channel Partners: USA Distributors: Brazil, Mexico Direct: Canada

Cash Management, EAS Direct: Canada, Brazil, Mexico Distributors: USA

Electronic Security Direct: Canada, Brazil, Mexico Distributors: USA

Entrance Security Direct: Canada Distributors: Other markets


Launch Cash Management

Expand Electronic Security

Grow Safes & Vaults

Grow Security Doors & Partitions

Grow Entrance Security

Region Americas: Key Activities to Profitable Growth


Region Americas: Key Takeaways

Leverage our scale as region through heavy focus of execution of the profitable growth strategy

Integrate best practices to enable growth in new customer segments

Focus on introducing cash management

Security market consolidation opens up for new growth opportunities

Productivity focus


Region Asia-PacificSacha de La Noë

SVP APAC


Region Asia-Pacific: 2015 in Summary

General downturn in Asian economies

Sharp drop in demand from Indian public sector banks due to poor balance sheets while the private banks developed better

Indonesia won Fire System project for the largest pulp mill in Asia

Strong development in China for Entrance Security (metro and office buildings)

Breakthrough in the important gaming industry in Australia for Cash Management solutions

Market for Cash Management outside Australia is starting to develop with significantly more interest and enquiries across Asia

Region Asia-PacificFull year

MSEK 2015 2014

Order intake 1,167 987Organic growth, % 4

Net sales 1,085 1,029Organic growth, % -8







Region Asia-Pacific: Market Overview

Offering:

Mainly Safes & Vaults and Entrance Security

A growing business in Fire Systems and Cash Management

38%

20%

15%

15%

12%

India Indonesia

China Australia

Other countries

Sales by market 2015


Region Asia-Pacific: Macroeconomics

Average GDP growth in 2016 is projected at 5.5% (IMF April 2015)

Slower GDP growth in large economies such as China and Indonesia

General shortage of project financing during 2015

Increased bad debt in Indian public sector banks

Political stalemate in countries like India, Indonesia and Malaysia

The market is large and has many opportunities in various segments, however market conditions are less favourable than in the past years

Examples: still significant investments in mass transit; Cash Management starting to move; increased security needs for public buildings and high risk sites; still low ATM density in India


Region Asia-Pacific: Market Trends

Overall growth rate: 6-8%

Growth comes from: Urbanisation Increased wealth Public investments in infrastructure

FOR EXAMPLE:India Market growth due to economic growth, public infrastructure spending in

metros and airports, increased personal wealth and a growing population The financial inclusion programme, bringing over 150 million people into the

country’s banking system, puts demand on increased ATM penetration Number of branches growing, but at slower pace than in past years Central Bank has recently allowed 10 players to open small finance banks

China The world’s largest security market Large governmental investments into infrastructure for increased public safety Urbanisation drives demand on extended metro and airport networks

South Korea Fourth largest security market in the region Growth expected in the years to come due to investments in commercial

buildings and urbanisation


Region Asia-Pacific: Bestsellers

Safes & Vaults Entrance Security Fire Systems Cash Management


Region Asia-Pacific: Customers

Main customer segment is Bank State-owned banks – business stabilising at lower level Private banks – growth potential

Public & Commercial Buildings Well-developed business in most markets Demand expected to continue due to increased need for

protection

Industrial & High-Risk Sites Well-developed business in Indonesia and India Interesting opportunities across the region e.g. Fire

Systems business opportunity outside Indonesia being evaluated

Retail (& CIT) Well-developed business within Cash Management

in Australia Increased interest in Cash Management solutions in

markets outside Australia

Mass Transit & Airports Well-established business in China A growing customer segment across the region

China Country Manager Chris Dai and Sacha de La Noë with Mr. Du from distributor Beijing Forgoal in Bank of China HQ, June 2015


Region Asia-Pacific: Our Customers

Bank RetailPublic & Commercial/Industrial Buildings

Mass Transit


OKI Pulp & Paper Mills, part of Asia Pulp & Paper Group (APP), is building a new mill in South Sumatra, Indonesia

Gunnebo supplying an integrated fire-fighting solution to the new site covering an outdoor and indoor hydrant system, sprinklers, water sprays, fire pumps and fire alarm system, starting from the design up to installation, including testing, commissioning and maintenance. The systems will be installed in 40 buildings.

The contract is EPC work where the system delivery started end of July 2015 and is a multi-year contract

Order value: $25 million

CUSTOMER CASE: OKI Pulp & Paper Mills


Guanfu Museum in Shanghai Tower, currently the tallest building in China and a new landmark in the city

Gunnebo China has received orders to deliver 18,698 safe deposit lockers and 15 vault doors

The order values amounted to €2.2 million including delivery and installation

CUSTOMER CASE: Guanfu Museum


India is the second largest ATM market in the world (after China)

In 2012 Gunnebo started to build CEN safes for NCR in India as the first CEN manufacturer in India

Growth of ATM safes in India

From 0 – 22,000 safes in three years!

From 2016 also starting to supply to other ATM providers in India with additional growthopportunities

CUSTOMER CASE: NCR ATM Safes for India


Region Asia-Pacific: Brands

GUNNEBO is used widely in the region within Entrance Security, Cash Management and Service

Well-established business within Safes & Vaults with banks in the region going back 80 years under the CHUBBSAFES brand

SecureLine used as local tactical brand within Safes in India & Indonesia

Steelage, Minimax & GilPro: strong local brands in India for Safes & Vaults and Fire Security


Region Asia-Pacific: Routes to Market

Route to market varies by country

India Direct – to private banks and key accounts Indirect – to government banks, public & commercial

buildings, governmental institutions, smaller customers etc.

Indonesia Direct – most business is direct and is supported by

our strong branch network Indirect – mainly safes and part of extinguisher

business

Other markets in the region Significant part of sales through distributors, system

integrators and other partners


Region Asia-Pacific: Marketing Activities & Investments in 2015

In marketing & sales of Cash Management solutions in the region

Development of a new range of safes, customised to fit needs of private consumers

Continued investments in production platforms in India, Indonesia &China


Safes & Vaults recovery

Grow Entrance Security

Grow Cash Management


Dealer management

Explore new business opportunities

Region Asia-Pacific: Key Activities for Profitable Growth


Region Asia-Pacific: Key Takeaways

The market is large and has many opportunities in various segments, however market conditions are less favourable than in the past years

Focus areas to get back to profitable growth:

Develop new market segments for Safes & Vaults

Build on strong position in Entrance Security and develop key segments

Capture momentum in Cash Management as the market develops

Productivity focus


Summing UPHenrik LangePresident & CEO


Reflection: Why Gunnebo?

We want to help create a safer world

Broad product portfolio

Long customer relationships

Broad service capability

Good knowledge of both software and hardware

Engaged employees


Holding company

Island mentality

Local processes




2016-2020

Operating company

Global processes


of working

Customer focused

Good profitablility

Cash flow focus

FROM: TO:


Gunnebo’s Strategy: Profitable Growth

The leading globalprovider of a safer future

Cash Management Entrance Security Electronic SecuritySafes & Vaults

Software platform

Employee Engagement & Performance Culture

The Group’s mission is to help create a safer world by offering security products, services and solutions that create value for shareholders,

customers, partners, employees and society

Solution selling to key accounts in customer segments

Operational excellence

PRODUCT PILLARS


EMEA

Asia-Pacific

Americas

Safes & Vaults

Cash Management

EntranceSecurity

Electronic Security

Operational P&L

Responsibility

Strategic Direction

Product Roadmap

R&D

Regional & Product Responsibility



SH

AR

EH

OLD

ER

CU

STO

MER

PR

OC

ES

SES

EM

PLO

YEES


Grow Product Areas

Solutions Software

Demand Chain

Service Delivery

Cash for Growth


Drive Productivity


IT/IS Capabilities


Find a path of profitable growth

Utilize our technology to better capture growth per segment

Improve key account management & service delivery

Strengthen the demand chain

Focus on productivity

Attract & retain good people

Meet our financial targets

Key Takeaways


Opportunity to learn ouroffering in depth!

Join us in our Paris showroom!

When? June 29th

Where? Showroom in Velizy, Paris

Sign up and more information: [email protected]

Want to Explore More About Our Business & Offering?

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The Gunnebo Security Group · 2016-2020 Operating company Global processes Standardized, lean way...

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