Loomis AB, the cash-handling unit spun off from Securitas AB, will reach its 2014 profitability target by cutting costs and increasing sales in its existing business, Chief Executive Officer Lars Blecko said.
Loomis won’t need help from planned acquisitions to reach its goal of a 10 percent margin on earnings before interest, tax and amortization, Blecko said in an interview at the company’s headquarters in Stockholm. Loomis plans to enter two new countries a year by using some of the 2 billion kronor ($300 million) it has available for acquisitions, he said.
Loomis last year reported organic sales growth for the first time since its December 2008 listing as an independent company. Sales, excluding acquisitions, will grow again this year even if the rate may be as low as 0.1 percent compared with 2011’s 1 percent, Blecko said. The debt crisis isn’t really hurting Loomis’ business and the company is still confident in reaching the 10 percent margin target set two years ago, he said.
“We haven’t revised the target,” Blecko, who was born in 1957, said. “The plan is to add about half a percentage point each year.”
Loomis last year had an Ebita margin of 8.3 percent and it reached 8.5 percent for the 12 months through the second quarter. The third and fourth quarters are the company’s best because consumers use more cash over vacations and Christmas.
Loomis rose 1.1 percent in Stockholm trading yesterday, the biggest gain since Sept. 14. The stock has lost 8.6 percent this year giving the company a market value of 6.61 billion kronor.
Blecko said he favors acquisitions in eastern Europe and South America, excluding Brazil, where a law prohibits 100 percent ownership of security companies by foreigners.
The company could also enter a big western European market such as Germany, Italy and Poland where it currently has no business, he said.
The company last year entered Turkey and in April added Argentinian company Vigencia. The company also operates in Austria, the Czech Republic, Denmark, Finland, France, Norway, Portugal, Slovenia, Slovakia, Spain, Sweden, Switzerland, the U.K. and the U.S.
“There isn’t a huge amount of objects out there, you have to keep a lot of discussions going” Blecko said also citing high prices. “The 10 percent is our most important target, if we make two acquisitions or not is very subordinate.”