NOTE: This update serves as a follow-up to the initial write-up. To the extent you are not yet familiar with the business or our investment thesis, I recommend reviewing that piece (linked below) before diving into this update. Enjoy.
Decent quarter
Loomis delivered a solid Q2-2025 with sales at SEK 7,407m (cons. 7,418), down -3.0% YoY, weighed by FX-headwinds (-7.9% YoY) partially cushioned by strong organic growth (+3.8%) and M&A (+1.0%). While acknowledging the FX headwind, it is worth noting that revenues landed at an all-time high on a constant currency basis; something I place more value on from a longer-term valuation standpoint.
EBITA landed at SEK 944m (cons. SEK 917m) for a 12.7% margin (cons. 12.4%) — supported by improvements in both (i) the US operations delivering 16.4% margin (vs. 15.2% LY) aided by mix-shift toward Automated Solutions and general efficiency gains; and (ii) the Europe & LatAm operations landing at 12.3% (vs. 11.0% LY), positively affected by headcount reductions/operating leverage (-600 FTEs vs. SPLY).
On a segment level, I note that momentum is continuing within its International Values Logistics (+16.2% YoY), SafePoint/Automated Solutions (+6.2% YoY), though CIT (-9.0%) and CMS (-6.2%) landed a bit softer than I would have preferred.
FCF generation was dragged by M&A and build-up in working capital. Management did not comment on the specifics related to WC, but I would expect it to be released in forthcoming quarters.
Changing the narrative. More than cash
Ahead of the report, Loomis announced its acquisition of KipFer-Logistik, a Swiss-based logistics company specialized in temperature-controlled transport and storage in the pharmaceutical/healthcare industry. At first glance, it looks a bit left-field but Loomis actually already has a small-scale Pharma-transport business in Switzerland (organic initiative launched in 2024). Evidently, management is aiming to position Loomis in new verticals of the high-security transport industry — something they have done before (i.e. VIT/VIS transport) and that I view favorably.
I had expected Loomis to either lean more into its high-valuables logistics or something like weaponry logistics — but there is plenty of time for that to eventually happen, and management appears quite explicit about it too.
“I mean, we will expand this [pharma logistics] to other countries, but at the same time, we will keep looking at other areas within the high security valuable transportation. Pharma is just one example, but there are other areas as well, and we will keep exploring those.” - Aritz Larrea, CEO (source: Q2-2025 earnings call)
With a leverage ratio at quarter-end of ~1.75x — even after distributing SEK 1.16bn to shareholders and SEK ~550m in M&A — there should be sufficient firepower in the coming quarters to continue with buybacks (a new SEK 200m buyback program has just been launched) and execute on further bolt-ons.
All-in, a decent quarter. The thesis remains intact.