Cash Industry Leaders – What a Difference a Year Makes

January and February are when six of the leading listed companies in cash report their annual results for the previous year. The time last year, all but one reported strong results and optimistic outlooks.

But, as the saying goes, ‘that was then, this is now’ and the pandemic has taken its toll on all of them. That said, all have shown remarkable resilience given the overall picture of lower consumer activity and cash usage.

Loomis – US better than Europe

Loomis’ year, unsurprisingly, was negatively impacted by COVID-19.

Revenue for 2020 of SEK 18.8 billion was 10.6% lower than in 2019 and operating profit (EBITA) fell by 31.7% to SEK 1.7 billion, resulting in the operating margin falling from 12.4% to 9.4%. Pre tax income fell by 50.4% to SEK 1 billion.

The company noted that the pandemic’s impact on its US operations was significantly less than on its European operations, due to the structure of customer portfolios where, in the US, a larger percentage of Loomis’s revenues are based on fixed monthly fees.

Loomis President Patrik Andersson, commenting on the negative effects of the pandemic, said that ‘our branches were quick to react and this yielded results. We succeeded in quickly adapting our processes. Our employees have shown impressive loyalty and initiative. I’m convinced that this, combined with our group-wide programmes, will enable Loomis to come out of this situation stronger and to start growing again as things gradually get back to normal’.

NCR – sales and profit decline

COVID-19 also had a significant negative impact on NCR’s results. Revenue fell by 10% to $6.2 billion, of which $676 million came from the Product sector and only £32,000 from the Service Sector. Foreign currency fluctuations did not impact the comparative results, but the shift from selling perpetual software licences to recurring revenue lowered revenue by $100 million.

Full year adjusted operating profit (EBITDA) decreased by $162 million to $896 million in 2020, while the full year net loss from continuing operations attributable to NCR was $7 million, compared with a profit of £614 million in 2019.

The company stated that it expected the pandemic to continue to negatively affect all segments of its business in 2021, with hardware likely to suffer most but recurring streams more resilient.

Profits improve at Diebold Nixdorf

After a very bumpy couple of years for Diebold Nixdorf, revenue for the year of $3.9 billion was 11.5% down on the previous year, but operating profit (adjusted EBITDA) increased by 13% to $453 million and the corresponding operating margin from 9.1% to 11.6%.

The company has three main segments – Eurasia Banking, Americas Banking and Retail – and within these segments it has three product groups, Services, Products and Software. Sales in Eurasia Banking fell by 13.3%, in Americas Banking by 11.5% and in Retail by 8.9%.

CEO, Gerrard Schmid commented: ‘we are excited with the 2020 momentum and delivered stronger-than-expected revenue, profitability and free cash flow as we continue to transform our business model to create value.’

‘We took a major step forward toward our three-year $500 million cost reduction programme by realising approximately $165 million of gross cost savings during 2020’.

Good 4th quarter boosts Brinks

Brinks reported a strong fourth quarter, enabling it to report revenue for the year of $3.69 billion, the same as in 2019 (but noted that at 2019 exchange rates 2020 revenue would have increased by 7%). Operating profit at $214 million was 10% lower. The operating margin for 2020 was 5.8%, compared with 6.4% in 2019.

Doug Pertz, President and CEO, noted that ‘our fourth-quarter results clearly demonstrate the resiliency of our business, the persistent strength of cash usage around the world, and our strong rebound from the pandemic bottom.’

‘Despite the pandemic’s continued impact on our near-term revenue, we expect strong growth in our financial results as we move through 2021, with revenue and profit growth continuing to accelerate, especially in the second half. Our confidence is based on continued retail recovery from pandemic lows, the realisation of full-year benefits from the G4S acquisitions, and the sustainability of our cost reductions’.

Exchange rates hit Prosegur

Prosegur’s revenue fell by 17.5% to €3.56 billion in 2020, mainly due to the negative effects of exchange rates and divestments (the sale of the security business in France and the alarms business in Spain).

Operating profit, EBITA, of €258 million was a reduction of 28.1% on 2019, and the operating margin 7.4%. However, without the extraordinary costs of the efficiency plans undertaken at Prosegur Cash, an operating profit of €287 million was achieved and the operating margin 8.3%.

Prosegur Cash, the CIT subsidiary, achieved sales of €1.5 billion, a fall of 16.2% compared with last year. In local currency however, a sales growth of 1.7% was achieved. Sales of new products accounted for 18.8% of revenue, showing strong resistance to the pandemic.

For the year Prosegur Cash achieved an operating profit of €185 million and an operating margin of 12.3%. Excluding the exceptional costs of the efficiency plans, the figures were €214 million and 14.2% respectively.

COVID hits Crane sales

Revenue for the year for Crane Co declined by 11% to $2.94 billion, of which $565 million (17%) in core sales was partially offset by a $212 million (6%) benefit from acquisitions and slightly favourable foreign exchange. The core sales decline was attributed to COVID-19-related macroeconomic factors.

Full year operating profit of $263 million exceeded that of 2019 by $53 million (+25%), taking the operating margin from 6.4% to 9%. Excluding special items, the operating profit in 2020 was $323 million, compared with $494 million in 2019, the operating margins being 11% and 15% respectfully.

Payment and Merchandising Technologies, the sector which includes the banknote (Crane Currency) and vending/handling related (Crane Payment Innovations and Cummins Allison) businesses, achieved sales of $1.1 billion, down 4.6%. The operating profit of $100.6 million in 2020 compared with $177.3 million in 2019 (43.3% lower) with operating margins of 9.1% and 15.3% respectively.

The company expects to achieve revenue of $3.05 billion in 2021 – a 2% increase over 2020.