Loomis (OM:LOOMIS) is a global leader in cash and valuables logistics/handling — an out-of-favor, high-barrier industry where scale, route density, and regulatory complexity deter competition. While the structural decline in cash usage is well understood, we believe the pace of that decline — and its impact on the cash handling industry — is overstated. Frankly, we believe the market completely overlooks its the value of its logistics network and the ability to pivot into other high-security logistics (i.e., pharma, arms, etc.)
Cash transactions have contracted -4% p.a. L5Y, accelerated by the pandemic. Despite this, Loomis has delivered +4.2% organic revenue CAGR over the same period. This is a function of the company’s exposure to cash in circulation (growing LSD p.a.) and its velocity, rather than the proportion of cash-based transactions — though we are not denying they are directionally correlated over the long term. Still, the market continues to imply a collapse in cash volumes, overlooking the growing regulatory support for cash infrastructure and the risks posed by an all-digital payment ecosystem, as evidenced by recent IT-/power outages.
Loomis currently trades at 4.0x EV/EBITDA (2027E) and offers an annual unlevered FCF yield of ~13-15%. Our framing is simple: if Loomis manages to grow FCF by 2% p.a. through 2033, it effectively recovers its entire EV — leaving any residual value as upside. With embedded growth from Automated Solutions (SafePoint) and structural tailwinds in ATM outsourcing, SME logistics, and LATAM expansion, we believe current valuation fails to reflect the company’s earnings durability and re-investment runway.
01. Company overview
Loomis (OM:LOOMIS) is a leading global provider of cash and valuables logistics, offering services across the full value chain — incl. distribution, handling, storage, and recycling — to financial institutions, central banks, and retailers. Listed in 2008 following its 100% spin-off from Securitas (OM:SECU B), the company operates with a localized and dense logistics network on a global scale, holding a #1–2 position in most of its core geographies. The service model spans both physical infrastructure (e.g., cash-in-transit and ATM replenishment) and value-added services (e.g., cash management, FX, etc.).
Loomis operates in an out-of-favor but highly resilient niche. High capital intensity, route density requirements/scale, and regulatory complexity generally deters new entrants. Sales are diversified1 and largely contracted, typically structured with 3–5 year durations and include termination rights, but in practice, relationships tend to last far longer. We estimate the average customer tenure for legacy offerings to be ~10 years, supported by operational entrenchment and limited viable alternatives. Loomis’ integrated offering forms a closed-loop ecosystem, where complementary services reinforce each other and create meaningful cross-sell opportunities — deepening customer lock-in over time.
02. Industry overview
The total addressable cash management market is estimated to be USD ~23bn and dominated by a few global players, which together controls roughly half of the market. These include2 Brinks (NYSE:BCO), Loomis (OM:LOOMIS), Prosegur Cash (BME:CASH), and GardaWorld (private). The market’s consolidated structure has fostered pricing discipline, with annual increases tracking at or slightly above GDP growth. As such, competition is less about price and more about service quality/reliability.
Brinks acquired G4S’s cash operations in 2020, adding ~8pp to its market share and making it the clear market leader. Loomis has also been active in M&A, though on a smaller scale (bolt-ons), having added ~2pp market share L8Y. Prosegur has faced tougher competition from the likes of Brinks entering the LATAM market. These shifts are mirrored margin dynamics: Brink’s has benefited from growing its LATAM exposure — where underlying margins are structurally higher but also come with elevated risks. Meanwhile, Prosegur has faced margin pressure mainly due to cost inflation on its OPEX base. Yet, Loomis has remained focused on growing within its core markets in Europe and USA, particularly in within managed ATM services and digital retail solutions — with less exposure (~3% of sales) to LATAM.
The same LATAM exposure that drives higher margins has also inflated reported organic growth rates as sizeable price increases have been implemented to offset currency devaluation in high-inflation markets. Brink’s and Prosegur have delivered organic revenue CAGR of 5.5% and 16.8%, respectively, since 2016 — materially above Loomis at 3.8%. As elaborated later, Loomis has been explicit about its intent to expand within LATAM, hence we would expect to see a pick-up in organic growth and margins.
Cash is far from dead
Over the past decade, the use of cash as a medium of exchange has declined materially — a trend that was amplified by the pandemic. Despite this, the volume of cash in circulation has grown steadily at a 2-4% annually. This distinction is essential as Loomis’ business is more closely tied to the stock of cash outstanding and its velocity than to its share of total payment volumes. Granted, there is a directional correlation over the long term but the relationship is not linear. Several exogenous factors shape the volume of physical cash — incl. inflation in low-value items (where cash is more often used), shifts in consumer demographics, and central bank policies around note issuance (e.g., the ECB’s phase-out of the EUR 500 note in favor of higher volumes of smaller denominations).
Importantly, institutional support for cash remains strong. The ECB’s Eurosystem cash strategy explicitly commits to preserving euro cash as a widely available and accepted instrument — both as a payment mechanism and a store of value. To that end, the few countries that have tried to eliminate cash (e.g., Sweden) ultimately reversed course.