Loomis at record margins — with a price war starting in its best market
A record quarter with a hedge attached
Loomis delivered the kind of quarter managements dream about and then talk past. Revenue crossed SEK 8.1bn with 6.6% currency-adjusted growth, group EBITA margin rose almost two percentage points to above 15% — the highest in the company's history — and earnings per share topped SEK 10, up 32%. The U.S. reached a record SEK 4.3bn of revenue, 8.4% currency-adjusted and 8.1% organic, with an EBITDA margin above 19%.
But the most informative sentence in the call was not in the prepared remarks. Asked whether 19% is the new normal, CEO Aritz Larrea first corrected the analyst — “We never disclosed the 18% that you are talking about” — Aritz Larrea, President and CEO · 2026-10-30 — then volunteered the thing that matters: limited upside because the U.S. efficiency programmes are complete, and a new force in the market.
We are starting to see price pressure coming from both competitors and customers. I think it is good to consider that we will try to remain around that 19%.
Read against July, that is a genuine change of register. On the 24 July call the same analyst probed the U.S. margin and got an unhedged answer: “The U.S. margins are just showing the trend that we see in the last quarters, and we expect those to continue during the rest of the year.” — Aritz Uribiarte, President and CEO · 2026-07-24 Three months later the language has moved from "continue" to "try to remain". The new phrase in the company's own vocabulary is a competitive pricing environment, and management localised it precisely — not Europe: “If I would have to highlight, I would focus more on the U.S. in that sense, not in Europe.” — Aritz Larrea, President and CEO · 2026-10-30
Fuel is quietly doing some of the work
The U.S. organic number deserves a second look. Management explicitly credited higher fuel prices and the related price indexation as a positive contributor to organic growth, while simultaneously insisting it is not growth at all: “This is just a mechanism for managing the changes in fuel costs rather than an underlying growth driver.” — Aritz Larrea, President and CEO · 2026-10-30 Fuel is only 2–3% of revenue, so the effect is modest — but it is mechanical, it flatters the print, and it can reverse. Six months earlier the framing was pure risk-neutrality, with management saying it did not predict fuel and expected “a stable trend till the end of the year” — Aritz Uribiarte, President and CEO · 2026-07-24. The pass-through has flipped from a hedge against a headwind into a small tailwind. Strip it out and the underlying U.S. volume story is still good, just less spectacular.
What is genuinely structural is Automated Solutions, again double-digit, and now with a marquee reference: a large U.S. retailer deploying SafePoint smart safes across its store network, with the CEO sizing it plainly at “2,000 units being installed there” — Aritz Larrea, President and CEO · 2026-10-30 and guiding the revenue impact to Q1 next year rather than Q4. That programme is also why working capital rose — inventory pulled forward from CIMA in Italy, plus spare parts for the Burroughs maintenance base. Cash conversion of 84% on a rolling 12-month basis sits below the company's own 90%-plus ambition, and the explanation is growth, not deterioration.
The engine is the most cyclical part
The uncomfortable structural truth in this report is where the margin is coming from. International — cross-border transportation of precious metals and vaulting — grew more than 25% and drove Europe and LatAm's mix, yet management spent the Q&A walking the market down from extrapolation. Larrea flagged that business mix will vary and that International, for all its strength, is “a more cyclical business” — Aritz Larrea, President and CEO · 2026-10-30, warning against extrapolating single-quarter mix and pre-announcing a softer comparative: “It's not going to be as good as Q4 last year, but we expect to have a good International quarter.” — Aritz Larrea, President and CEO · 2026-10-30 The cyclicality caveat is not new — it has run through every call of the past year — but it matters far more now that the group margin sits at a record and the company reiterates only the upper half of its 12–14% target range through the 2027 strategic period.
Meanwhile Europe's old problem children are still being worked. France's ATM business was down 6% on the shift to shared rural machines among three banking groups, a non-profitable FX contract was exited, and restructuring costs continue — full-year charges to land SEK 50–100m below last year, with more in Q4. The ATM return to growth is real, but the cost base is still catching up to a smaller network. Add monitored social unrest in France and Spain and an explicit cost pressure warning on labour, and the European margin improvement looks like diligent grinding rather than a step-change.
Hermes, leverage, and the capital-allocation clock
The biggest event of the quarter technically happened after it closed. The Hermes acquisition — the largest in Loomis' history, roughly SEK 1.2bn of 2025 revenue at a SEK 4bn enterprise value, or 6.6x adjusted EBITDA, with ~1,000 customers and 3,000 employees in Peru — completed in October. Because the EUR 300m bond was issued in September, the financing cost hit Q3 while none of the earnings did, which is why reported net debt to EBITDA of 1.52x is optically flattered. Management expects to go above 2x and then back below within six months, and hinted at a faster path: “We could be a bit quicker on coming below 2x than six months.” — Aritz Larrea, President and CEO · 2026-10-30 With a healthy M&A pipeline and Latin America set to jump from ~1.5% of revenue to 5–6% including the Argentine double-up, the deleveraging clock is the swing factor for buybacks in 2027.
The one place where the story has slipped is Loomis Pay: the migration off the legacy point-of-sale platform has taken longer than planned, denting SME/Pay profitability in the quarter even as segment revenue rose to SEK 100m, up 56% currency-adjusted, with more than half now cash related services to smaller businesses. Management expects completion by year-end — a second consecutive quarter of the same promise.
The broader market is thick with Markets Day framing this quarter, and Loomis is a card-carrying member: the strategic priorities laid out at its 2024 event are visibly delivering. The question this print raises is narrower and sharper. Is 19% in the U.S. a plateau or a peak? The company's own answer — efficiency done, price pressure arriving, fuel a flattering tailwind, and the strongest growth line the most cyclical one — argues that the next several quarters will be about defending a margin rather than extending it. That is a perfectly good investment case. It is a different one from the one the stock has been living on.