Loomis Full-Year Report January – December 2025

Loomis reported FY2025 revenue of SEK 30,427m with currency-adjusted growth of 6.0% (organic 4.0%, acquisitions 2.0%) and record EBITA of SEK 3,851m, delivering an EBITA margin of 12.7% (+0.7 pp y/y). Q4 revenue was SEK 7,711m with EBITA SEK 1,014m (margin 13.2%), operating cash flow for the year exceeded SEK 3.8bn (99% of EBITA) and Q4 operating cash flow was SEK 1,401m. The company completed strategic acquisitions including a Canadian precious-metals facility, repurchased 539,900 shares (~SEK 200m), and the Board proposes an ordinary dividend SEK 15.00 plus an extraordinary SEK 5.00, while Q4 included SEK -360m of items affecting comparability (goodwill impairment and a legal provision) and net income for the year was SEK 1,582m.

Analysis

Market structure: Loomis AB (Nasdaq Stockholm) is a clear near-term winner — organic growth 4% and acquisitions +2% produced currency-adjusted growth of 6% and EBITA margin expansion to 12.7% (up 0.7pp). Competitors with less M&A firepower (e.g., Brink's) face share pressure in high-security logistics and precious‑metals custody; secular cash decline remains a long‑run loser for commodity cash transport volumes. FX materially depressed reported top line (–0.1% reported vs +6% adj), so a stronger SEK or stabilizing USD/EUR would boost reported results and equity re‑rating.

Risk assessment: Key tail risks are worsening legal exposure or additional impairments (they already booked SEK –360m in Q4), heavy integration risk from acquisitions, and a faster than-expected shift to cashless payments reducing volumes over 2–5 years. Near term (days–weeks) market reaction will hinge on legal developments and ex‑dividend timing; medium term (3–12 months) results and synergy realization will decide re‑rating; long term (2–5 years) structural cash demand decline is the dominant downside. Hidden dependency: high cash conversion (operating cash ~99% of EBITA) masks revenue sensitivity to FX and retail volumes.

Trade implications: Favor selective long exposure to Loomis ahead of dividend and buyback realization but hedge legal/impairment tail risk. Consider a relative value pair: long Loomis, short Brink's (NYSE:BCS) to isolate security‑logistics execution advantage. Use options to size risk: buy protective puts or structure collars to cap downside while collecting dividend and selling covered calls after entry.

Contrarian angles: The market may over‑penalize Loomis for headline EPS weakness from non‑recurring items while ignoring 99% cash conversion and rising EBITA margin; this suggests a mispriced recovery if no new litigation. Historical parallels: industrials that booked goodwill hits but sustained cashflow often re‑rated within 6–12 months post‑clarity. Unintended consequence: heavy shareholder returns (SEK 20/share proposed) could limit capex for digital/payment platform upgrades — a medium‑term operational risk investors underappreciate.

Key Decisions for Investors

• Establish a 3% long position in Loomis AB (Nasdaq Stockholm) within 7 trading days to capture buyback/dividend upside (proposed SEK 15 ordinary + SEK 5 extraordinary). Target 12‑month total return +20–25%; set tactical stop at –10% and trim 50% at +15%.
• Hedge legal/impairment tail risk by buying 6–9 month protective puts ~10% OTM sized at 25–33% of the equity position or implement a collar (sell 6‑9 month 15% OTM calls) to capture dividend income while limiting downside.
• Implement a pair trade: long Loomis (3% weight) vs short Brink's (NYSE:BCS) equal notional to neutralize macro/FX; expect relative outperformance of Loomis over 6–12 months if integration and margin actions hold.
• If Nordic corporate credit spreads for Loomis (3–5 year) trade >150 bps over Sweden sovereign, consider allocating 2–4% to the bond for carry — threshold assumes no new adverse litigation headlines within 90 days.