initial coverages - PSI Group ASA

! 

! 

! 

! 

Initiating'coverage' 

PSI Group: The Cash King from 

Rælingen 

• PSI Group’s start to 2012 has been far 

from encouraging as CashGuard sales 

have plummeted following continued 

economic uncertainty in the Eurozone. 

• CashGuard’s development on the 

European continent is of particular 

concern and revenues are here down by 

almost 50% YoY. 

• We believe, however, that a reduction in 

CashGuard earnings will be somewhat 

compensated by the booming 

deployment of Pricer ESLs in 

Norway/Sweden. 

• Valuation looks slightly rich with regard 

to peer companies as PSI trades at 

2013E P/E of 21. 

• However, financials look strong and 

dividend prospects seem promising. 

• We therefore initiate coverage of PSI 

Group with a Hold recommendation, 

reflecting a mixed business environment. 

Q3/11 earnings Q3/10 Q2/11 Q2/11! 

SWOT 

! 

14/09'12! 

+ Strong financial position 

+ Promising Pricer ESL market in 

Norway/Sweden 

+ Bright dividend prospects 

− Disappointing CashGuard 

development internationally 

− Saturation of CashGuard 

markets in Norway/Sweden 

− Continued uncertainty in Russian 

SQS market 

! 

MNOK! Sales& EBITDA& EBIT& EPS& DPS& SGRTH& EBITDA&mrg& NIBD/EBITDA& Debt/Equity& EV/Sales& EV/EBITDA& P/E& P/BV& ROIC& 

2009A! 566! 44! 4! -0.39! 0.00! 6.1%! 7.8%! 4.2! 386.4%! 0.78! 10.0! -9.4! 1.78! 1.4%! 

2010A! 524! 30! -191! -9.71! 0.00! -7.3%! 5.7%! 6.1! 299.9%! 0.52! 9.1! -0.4! 2.90! 1.4%! 

2011A! 537! 50! -51! -2.03! 0.25! 2.5%! 9.3%! 1.9! 77.3%! 0.51! 5.5! -2.0! 1.41! 2.8%! 

2012E! 519! 29! 6! 0.10! 0.00! -3.4%! 5.6%! 2.8! 66.3%! 0.52! 9.4! 40.1! 1.42! 1.9%! 

2013E! 546! 38! 11! 0.19! 0.30! 5.2%! 6.9%! 1.5! 48.2%! 0.50! 7.2! 21.1! 1.25! 3.5%! 

2014E! 580! 45! 16! 0.27! 0.30! 6.3%! 7.7%! 1.1! 44.3%! 0.47! 6.1! 15.0! 1.30! 5.5%! 

Indep!Research!LTD! 

Name PSI Group 

TICKER PSI.OL 

Currency NOK 

Share price 4.10 

# of shares 44.27233 

MCAP 181.5 

Net IB Debt 90.5 

Enterprise value 272.0 

Recommendation HOLD 

Risk Medium 

Target price 4.00 

Analyst:!Ola!Sekkesaeter! 

ola.sekkesaeter@indepresearch.com! 

+47!98!15!83!12! 

!

! 


TABLE OF CONTENTS 

! 

Initiating!coverage:!PSI!Group! 

COMPANY&PROFILE&.......................................................................................................&3! 

MARKET&OVERVIEW&......................................................................................................&4! 

Retail'Solutions'.........................................................................................................................................................'4' 

''''Groundbreaking!order''..........................................................................................................................................'5! 

Cash'Management'Retail'........................................................................................................................................'6! 

The!Competitive!Landscape!..................................................................................................................................................!9! 

Recent!order!activity!.............................................................................................................................................................!12! 

Cash'Management'CIT/ATM'..............................................................................................................................'14! 

Case!study:!The!Russian!saga!of!differing!cultures!&!customs!...........................................................................!16! 

Recent'M&A'activity'..............................................................................................................................................'19! 

ESTIMATES&..................................................................................................................&20! 

VALUATION&.................................................................................................................&28! 

Investment'Conclusion'........................................................................................................................................'30' 

! 

APPENDIX&…………………………………………………………………………………………………………………&31& 

2!

! 


PSI GROUP: 

! 


THE CASH KING FROM RÆLINGEN 

COMPANY&PROFILE& 

The short story… 

PSI Group, a Rælingen-based company, is a leading manufacturer and 

distributor of cash handling solutions to the retail- and Security Transport 

(Cash in Transit) industry. Comprising the three business segments: Retail 

Solutions (PSI), Cash Management Retail (CashGuard) and Cash Management 

CIT/ATM (SQS), PSI Group offer integrated end-to-end solutions ensuring an 

efficient and safe operating environment wherever cash moves. 

! 

Figure 1.0: ! 

Segment! What!they!do! 

Retail& Distributor!of!various!technological!solutions!such!as!CashGuard,!barcode!scanners!and!electronic! 

Solutions& 

Cash& 

shelf!labels!(ESL)!to!the!retail!segment!of!Norway!and!Sweden! 

Management& Comprises!the!production!and!sale!of!CashGuard,!a!POS/checkout!cash!handling!system!which! 

Retail& 

Cash& 

Management& 

increases!POS!efficiency!as!well!as!minimizes!the!risk!of!robbery!and!pilfering! 

CIT/ATM& Delivers!cash!protection!solutions!for!security!transports!and!ATMs! 

Source: PSI Group! 

SIGNIFICANT!EVENTS& 

2002….!Three-way!merger!between!iGroup!ASA,!Cappit!ASA!and!Pinnås!Systems!International!AS!forming! 

today’s!PSI!Group 

2003….!PSI!Group!secure!milestone!CashGuard!agreement!with!Norwegian!retail!group,!Norgesgruppen! 

2004….!PSI!Group!acquires!Swedish!retail!distributor,!Antonsen!Gruppen!AB! 

2006….&(1)!Divestment!of!handheld!PDA!business!Captura!ASA! 

& 

2006….&(2)!Distribution!operation!Symtech!sold!to!Ingram!Micro! 

2008….!PSI!Group!is!merged!with!CashGuard!AB! 

2010….!First!Russian!SQS!orders!are!received!following!extensive!customer!evaluation! 

2011….!Successful!completion!of!equity!issue!with!net!proceeds!of!62.6!mnok! 

3!

A potential 

game 

changer for 

slow-growing 

Norway/ 

Sweden 

! 


MARKET&OVERVIEW& 

& 

Retail Solutions 

! 


Retail Solutions’ growth going forward will 

mostly be derived from its distribution 

agreement of the Electronic Shelf Label 

(ESL) producer, Pricer. Pricer has already 

installed over 80 million ESL units across 

the world with some 200 retail chains, 

and we believe the success could be 

replicated across the Norway/Sweden 

regions too. Our belief is strengthened by 

the recent groundbreaking order PSI 

Group secured in May 2012 with a leading 

Nordic retailer. 

! 

Groundbreaking order 

We believe this retail group to be Nordic giant Rema 1000, which is a particularly 

significant player in Norway with its 497 grocery stores. Following this order, the 

whole of Rema 100 Norway will have Pricer’s ESLs installed in their stores. The 

order value was given to be over 100 mnok (116 msek), which would translate into 

0.18 msek worth of Pricer installations per store. PSI Group typically accumulates 20- 

40% of order values as distributor fees, and for this order we estimate it came to 

approximately 22%. 

Prior to the ESL order, Pricer installations numbered no more than roughly 120 stores 

in Norway and Sweden. The adoption of this ESL system as a mandatory concept 

requirement for all Rema 1000 Norway stores is therefore undoubtedly positive. 

We predict that this order may mark the eventual breakthrough for Pricer’s ESLs in 

both Norway and Sweden as other Nordic retail groups realize the great potential for 

significant cost savings. 

COOP Nordic is such a retail group, and one we believe could become the next 

‘mover’ within the ESL space. Having signed a framework agreement with PSI Group 

in January 2011, Pricer ESLs have already undergone pilot installations in both 

Norwegian- and Swedish COOP stores. Typically pilot installations conclude after 1-2 

years with the customer deciding whether to deploy the system or not. It is therefore 

possible that something will happen in this space in a not too distant future. With over 

1700 stores, 955 of which are in Norway, COOP Nordic would undoubtedly 

contribute in making ESLs a more common sight in Norwegian- and Swedish grocery 

stores. 

We see large-scale installations within the COOP group’s Norwegian grocery retail 

chains as the most probable scenario. Full penetration rates across the 816 most 

fitting (realistic) stores would involve the installation of more than 3.7 million ESL 

4! 

Figure 1.1: 

Source: PSI Group! 

!

! 


! 


units and order values could exceed 250 mSEK. PSI Group as a distributor would 

probably garner 60msek of these. 

#!of! 

products! Store!size! Turnover/store! 

!! #!of!stores! Retail!class! 

Super! 

on!offer! (square!m)! (mnok)! 

COOP!Extra! 43! Discount! 5500! 

3500- 

1000-2800! 83! 

COOP!Prix! 293! Discount! 3900! 

2200- 

450-1100! 13-96!! 

COOP!Marked! 336! Local! 

6000! 200-1000! 4-45!! 

COOP!Mega! 116! Supermarket! 7200! 800-2000! 45-350!! 

COOP!OBS!!Hypermarked! 28! Hypermarket! 30000! 4900! 170-760!! 

TOTAL& 816! 

Estimated&total&ESL&need&& 3.68m&units& ! ! ! ! 

Source: COOP Norge, Indep Research estimates! 

! ! ! ! 

Pricer ESLs 

are already 

well 

established 

in Europe, so 

why not 

Norway & 

Sweden too? 

Figure 1.2: COOP Market Picture for ESL in Norway (excluding prior pilot installations) 

As for the Norwegian- and Swedish grocery retail markets isolated it is clear 

that there is massive market potential for Pricer ESLs. With penetration rates 

significantly higher in high profile global grocery retailers such as Carrefour 

we see no reason why this cost efficiency system cannot be replicated in 

Norway and Sweden- with PSI Group as an important partner. 

Figure 1.3: General ESL Market Picture (before full scale Rema 1000 Norway roll-out) 

Installed! 

base!! 

(#!stores)! 

Potential! 

Market! 

Market! 

Penetration! Retail!class! Country! 

! Casino! 400! 549! 72.9%! Hyper-&!supermarkets! France! 

Carrefour! 266! 1401! 19.0%! Hypermarkets! France! 

Metro! 60! 700! 8.6%! Cash&Carry! Germany! 

Soriana! 250! 800! 31.3%! Hyper-&!supermarkets! Mexico! 

Norway& 70! 3975! 1.8%! 

Sweden& 50! 3500! 1.4%! 

Source: Pricer, Indep Research estimates! 

Even after full-scale installations of Pricer ESLs across Rema 100 stores, 

market penetration in Norway will still remain below 15 % within the grocery 

sector. 

Going forward we therefore expect a wave of new Norwegian/Swedish 

retailers deciding to follow the example of the larger multi-national European 

retailers. 

5! 

! ! 

! !

2012E: 

Pricer, 20% 

CashGuard, 

17% 

Digi scales, 

10% 

Repant/ 

Vensafe, 5% 

! 


! 


As such we expect Pricer’s ESL to surpass CashGuard in Retail Solutions’ 

revenue split. Historically, Cashguard have accounted for the majority of all 

revenues from capital goods. For 2012, we believe Pricer and CashGuard may 

well swap places. Furthermore, segments- Service/Support as well as 

Consumables normally represent around 25% each of total Retail Solutions 

revenues. 

The swap in revenue splits does not only stem from increasing Pricer 

installations- it is also a factor of declining sales of CashGuard systems in 

Norway and Sweden in recent years. This comes as penetration rates are 

increasing and markets thereby further saturating (explained further in Cash 

Management Retail-section). 

Figure 1.4: 

Source: PSI Group, Indep Research estimates 

Cash Management Retail 

Going forward, international markets will be 

of utmost interest to Cash Management 

Retail, as CashGuard’s penetration rates in 

Norway/Sweden have peaked. We expect 

CashGuard revenues to decline in line with 

the saturated, yet lucrative grocery markets 

of Sweden and Norway on a forward basis. 

In 2008 closed cash handling penetration 

rates in the grocery trade were considered to 

be 15 % and 12.5% for Norway and Sweden 

respectively. 

6! 

Figure 1.5: 

Source: PSI Group 

!

CashGuard 

growth in 

Norway/ 

Sweden 

seems 

unlikely 

! 


! 


According to our estimates, this has now increased to around 77% and 62% 

respectively- 4 years later. Most of the large Norwegian/Swedish grocery 

retail chains have some compliance with closed cash handling systems and 

the descending market trends in Norway and Sweden are also exemplified by 

the saturating levels of cash circulation- especially in Sweden. 

Figure 1.6: 

Source: Riksbanken 

Figure 1.8: International market for closed cash handling systems within grocery retail (as of August 2012) 

!! NORWAY! SWEDEN! DENMARK! 

INTERNATIONAL!! 

(Scandies!+!Euro-market)! 

CashGuard! 7475! 9276! 100! 19390! 

Safepay! 1500! 1500! 1500! 6500! 

iCash/CINEO! 50! 50! 0! 4000! 

AxlonRS! 0! 50! 0! 50! 

CashComplete!! 100! 0! 0! 200! 

CashInfinity! 0! 0! 0! 600! 

Total& 9125! 10876! 1600! 30740! 

Pot.!Market! 11925! 17500! 15000! 1289425! 

Penetration.& 76.5%! 62.1%! 10.7%! 2.4%! 

CashGuard! 

Penetration! 62.7%! 53.0%! 0.7%! 1.5%! 

Source: PSI Group, Gunnebo, Wincor Nixdorf, Indep Research estimates! 

Important to note is that our market research is subjected to grocery retail 

checkout points only. Europe’s 11 largest countries boost a total of 4.4million 

retail checkout points, of which around 1.28 million we estimate to be grocery 

retail checkout points. Our assumptions come as closed cash handling 

systems have yet to gain a serious foothold with non-food retailers. 

7! 

Figure 1.7: 

Source: Norges Bank!

International 

CashGuard 

growth also 

looks 

challenging 

amid the 

current 

Eurozone 

crisis 

! 


! 


PSI Group should be praised for their patient gradual build-up of a sound, 

international partner network. 

However, with the Eurozone crisis still looming large it will be difficult for PSI 

Group to compensate for its declining CG revenues in Norway/Sweden with 

new customer wins on the European continent- as its stated market objective 

outlines. 

Par example Spain represents a country of great opportunity for CashGuard 

with high cash usage levels in the grocery trade. Several hundred CG pilot 

installations have gone down in Spain over recent years but these efforts will 

remain futile as long as the country struggles with its soaring debts and 

government deficits. Thus retail investments will remain low. 

This is also evidenced by the recent collapse in international exports of 

CashGuard in 1H-2012, and we predict no sudden upswing for some time. 

However, by 2014 we predict international revenues to exceed those of 

Norway /Sweden. 

Figure 1.9: 


However looking isolated at cash usage levels, the Eurozone looks an 

opportunistic market as these have developed fairly strongly, and paints a 

picture far distant from the supposed cash ‘collapse’ dubbed by some industry 

observers. Since 2005, cash circulation has risen by over 57%. 

8!

! 


Figure 2.0: 

Source: ECB 

! 


As emphasised from the penetration tables, CashGuard is the undisputed 

world provider of closed cash handling systems. Ever since its first large-scale 

installations with Posten Norge in Norway in 2000, CashGuard has been a 

market leader and today boosts an installed base of over 19000 systems 

across the globe. The CashGuard system comes with a RRP (Recommended 

Retail Price) of around 10 000 Euro per unit. 

However, CashGuard is far from the only provider of closed cash handling 

systems and competition in this niche area is becoming fiercer than ever 

before. 

The Competitive Landscape 

Axlon: 

Axlon is the absolute minnow in this segment with only one product on offer, the 

Axlon RS (Recycling System). In 2012 the company realigned its business model and 

now also takes care of the concrete cash collection process for their customers- in 

addition to the provision of its closed cash handling system. Today we estimate an 

installed base of around 50 systems- all in Sweden. Since its first R&D activity began 

in 2002, more than 230 msek have been recognized in the development of the Axlon 

RS module, albeit the company is yet to achieve profitable results. 

Notable customers: Filmkjedan, Esplanaden, VI Hornstull (Sweden) 

Figure 2.1: Axlon Financials 

MSEK! 2008A! 2009A! 2010A! 2011A! 

Revenue& 0.6! 1.8! 2! 0.6! 

Operating& 

profit& -7.8! -20.8! -10.9! -8.5! 

margin! NEG! NEG! NEG! NEG!! 

Source: Axlon 

9! 

!

SafePay have 

gained on 

CashGuard in 

recent years 

after a dismal 

start 

! 


! 


GLORY LTD: 

Glory LTD is one of the true global giants in the field of cash management. However, 

the Japanese company derive most of their cash management revenues from the 

financial-, transportation and amusement park sector. Its presence in the retail sector 

was only felt in in 1996 when it launched its first cash recycler for cashiers. 

Today, Glory is highly active in the closed cash handling sector through the recent 

launch of the new system, CashInfinity. Per now, there are 300 closed cash handling 

systems installed in France across 150-200 bakeries, and for the whole of Europe we 

estimate a total of 600 installations. RRP for one fully integrated CashInfinity system 

is typically somewhere around 25K Euro. 

The key figures from the company’s “Overseas” segment comprise the sale of various 

cash handling products to all non-Japanese customers. The European retail sector 

typically represents around 10% of sales. It is also noteworthy that Glory’s 

management expects the “Overseas” segment to increase sales by 13.3% for FY2012 

YoY- making it the most growth-specced segment across the group’s four cash 

handling segments. 

Notable customers: N/A 

Figure 2.2: Glory Overseas Segment Financials 

billions!YEN! 2008A! 2009A! 2010A! 2011A! 

Revenue& 32784.0! 28712.0! 28753.0! 35306.0! 

Operating& 

profit& N/A! 1299.0! 1349.0! 1837.0! 

margin! N/A! 4.5%! 4.7%! 5.2%! 

Source: Glory 

SafePay: 

Safepay is the closed cash handling system developed by Swedish security company, 

Gunnebo. Safepay was formed in 2002 in a bid to compete with the then-only 

significant player, CashGuard. Initially the system went through several child hiccups, 

and was in 2009 a forbidden purchasing item for many Norwegian store managers. 

High service/repair costs have consequently lead to accumulated losses of 100msek 

since 2002. However, today these complications seem far gone, with Safepay being 

the most internationally established player. According to management, Safepay’s 

current losses owe only to expensive repair agreements for the old, unsuccessful 

Safepay product suite. Today’s Safepay system is usually priced at a 10% premium to 

CashGuard systems, ergo a RRP of around 11 000 Euro. Through its international 

sister-subsidiaries of Gunnebo, Safepay have struck many exciting customer 

agreements in Western Europe. One such example is the 2011 framework agreement 

to supply Italian DIY chain, Leroy Merlin, with over 500 Safepay systems by 2013. In 

March 2012 Safepay featured in Gunnebo’s 5-point strategic future agenda and as 

such forms an integral part of the future growth strategy for the whole of Gunnebo. 

This comes despite Safepay only representing 3.5% of Gunnebo’s total FY 2011 

revenues. As the marketing and development costs will come down somewhat in the 

next years Gunnebo expects Safepay to reach break-even in 2013, and profitability in 

10!

! 


! 


2014. 

Notable customers: COOP (Denmark), La Poste (France), Leroy Merlin (Italy) 

Figure 2.3: Safepay Financials 

MSEK! 2008A! 2009A! 2010A! 2011A! 

Revenue& N/A! N/A! 160.0! 180.0! 

Operating& 

profit& N/A! N/A! -39.0! -36.0! 

margin! N/A! N/A! NEG! NEG! 

Source: Gunnebo 

Scan Coin: 

Have been in the cash management business since 1966- albeit closed cash handling 

is something of a new market area with its CashComplete model, which was officially 

started in 2008. Like Glory, Scan Coin derives most of its cash management revenues 

from the financial sector, which also explains Scan Coin’s wide product offering in the 

back office cash management area. Drawing on a large international partner network, 

Scan Coin has secured many interesting closed cash handling orders. In November 

2011 it signed an agreement with international German hypermarket chain, Kaufland, 

to provide the cash management solutions as part of Kaufland’s expansion program. 

The agreement calls for all new-built stores across Europe over the next years to be 

outfitted with various cash management systems by Scan Coin- most likely the 

CashComplete module. It is also the intention that existing stores will be retrofitted 

with similar solutions at some point in the future. Per 2009 around 100 systems had 

been installed in France, Norway and Germany. Today we estimate a total of 100 

systems in Norway alone (Rema 1000), and around 200 in non-Scandinavian 

markets. As with Glory, Scan Coin’s product suite is of a premium kind and hence its 

CashComplete module has a RRP of around 110 kSEK. 

Notable customers: Rema 100 (Norway), Edeka, Kaufland (Germany) 

Figure 2.4: SCAN COIN Financials 

MSEK! 2008A! 2009A! 2010A! 2011A! 

Revenue& N/A! 750.0! 727.0! 850.0! 

Operating& 

profit& N/A! N/A! N/A! N/A! 

margin! N/A! N/A! N/A! N/A! 

Source: Indep Research estimates 

Wincor Nixdorf: 

Along with Glory LTD an undisputable global cash management heavyweight. 

Similarly to Glory too, Germany-based Wincor Nixdorf relies more on the financial 

sector than the retail sector- in 2011 34% of total revenues were derived from the 

retail sector. For the whole group, Europe accounts for 75% of total revenues. Its 

current product line for the closed cash handling sector comprises coin/note recycler 

11!

! 


! 


systems iCash and CINEO. The sale of these systems makes up a relatively small 

proportion of the Retail-segment’s sales as other payment terminal systems such as 

self-checkout-, pay tower- and all-in-one touch kiosk solutions are more significant. 

The company offers high quality products but at high premium: one complete iCash 

module is marketed at around 15k euro per system. One retail order for Wincor 

Nixdorf typically involves a wide range of all these solutions and is therefore a more 

‘payment’-hedged provider of retail solutions as opposed to its ‘cash-hedged’ 

Scandinavian competitors. However, as Wincor Nixdorf’s retail segment is so largely 

directed towards POS technology it still paints a useful picture of the closed cash 

handling industry. Today we estimate an installed base of around 4000 systems. 

Notable customers: Shell (Germany), COOP (Switzerland), 7-Eleven (Sweden) 

Figure 2.5: Wincor Nixdorf Retail Segment Financials 

millions! 

EURO! 2008A! 2009A! 2010A! 2011A! 

Revenue& 

Operating& 

772.0! 718.0! 742.0! 801.0! 

profit& 44.0! 34.0! 36.0! 42.0! 

margin! 5.7%! 4.7%! 4.9%! 5.2%! 

Source: Indep Research estimates 

Recent order activity 

These competitors will do their utmost to dilute CashGuard’s strong market 

position, and recent events suggest that they already have taken many 

important steps in doing so; 

EXAMPLE 1: Apoteket 

WHEN: October 2011 

WHAT: Gunnebo announced that formerly CashGuard-loyal pharmacy chain, 

Apoteket, had selected SafePay as the supplier of closed cash handling systems. 

Installations would see 14 pharmacy stores throughout of Sweden be equipped with 

two SafePay units each, including a coin and a currency unit as well as the emptying 

device SCL. 

ORDER VALUE: We estimate the potential order value of the SafePay-agreement 

only to be around 2.2 msek, and as such represents nothing spectacular from a 

financial perspective. 

WHY THE CONCERN: This undoubtedly came as a blow to CashGuard having 

undertaken pilot installations with Apoteket back in 2001, and currenctly boosting an 

installed base of over 50 systems. 

However, it appears that Apoteket have yet to decide on its main systems provider as 

they still have around 270 fully-owned pharmacy stores that have no closed cash 

handling systems installed. 

12!

A significant 

blow to 

CashGuard 

but the 

preferred 

systems 

provider 

remains 

unknown 

! 


! 


EXAMPLE 2: IKEA 

WHEN: January 2012 

WHAT: Wincor Nixdorf’s new CINEO product suite was selected as IKEA’s primary 

provider of automated cash management to stores across several European countries. 

The contract award came following a successful pilot period of two years in which the 

CINEO solution had been installed in more than 40 stores across 10 countries. 

However, the order was for back-office cash management, which involves solutions 

that automatically verify cash at the end of a shift period. Cash is stored in auditproof 

cassettes, which are then ready to be transported away by CIT (cash-intransit)-operators. 

ORDER VALUE: With 300 European IKEA stores seemingly in the focal point of this 

order, we estimate the full potential contract value to surpass 15 million euros making 

it one of the most valuable retail orders of a cash handling system in history. 

WHY THE CONCERN: PSI Group did undertake around 40 pilot installations in IKEA 

France in 2008 but these efforts now look fruitless. 

Even though the front office cash management systems are still undergoing a pilot 

phase with IKEA and no final decision has yet been made, we find it highly unlikely 

that anyone but Wincor Nixdorf’s CINEO/iCash systems will be selected for this order 

type due to simplified system integration. 

Ergo Wincor Nixdorf’s comprehensive products offering has ostensibly given them a 

significant edge in discussions with large European retailers. 

EXAMPLE 3: Axfood 

WHEN: June 2012 

WHAT: Swedish grocery retail group, Axfood, signed a framework agreement with 

fellow Swedish company Gunnebo for its closed cash handling system, SafePay. 

However this is not a conclusive agreement for Safepay as it only comprises an initial 

order of 100 systems over 3 years, and most of Axfood’s grocery chains- Willys, 

Willys Hemma, Hemkop and PrisXtra- will be able to cancel their participation as 

semi-owned retailers. 

ORDER VALUE: We estimate this framework agreement’s order value of up to 

8MSEK. 

WHY THE CONCERN: PSI Group’s CashGuard has remained a well-established 

systems supplier since 2005 and reportedly has an installed base of several hundred 

systems with Axfood’s grocery chains. However, Axfood will not abandon its 

longstanding customer relationship with PSI Group, and will deploy both cash 

handling systems parallel with each other going forward. 

Nonetheless, it is slightly worrying that Axfood- Sweden’s second largest grocery 

group with 1057 wholly-and partially owned stores, decide to go with another system 

following over 7 years of prior customer experience with CashGuard. Reportedly, the 

reasons why they did so are twofold. 

I. Safepay’s system has better catered- and prepared for the 2015 introduction 

of the new Swedish 200kr-note as well as 2016’s 2kr-coin. These new system 

requirements have now been addressed by PSI Group, and should not pose 

significant challenges in the future. 

13!

! 


! 


II. According to Axfood, Safepay’s cash handling system is more closed and 

integrated than CashGuard. This supposedly reduces the security risk as store 

personnel and security guards to a lesser extent need to take care of the 

actual cash transportation from the store to CIT transports. 

Cash Management CIT/ATM 

SQS’s potential market is global but today 

largely comprises certain areas of Europe. 

Regulated/mature CIT markets typically form 

the backbone of SQS’ core revenue streams 

such as Sweden, Belgium and France in 

which ‘intelligent’ security solutions are 

made obligatory by government legislation. 

Unregulated/immature markets such as 

Source: PSI Group 

Russia and Australia also represent 

promising market opportunities in which 

armored security vehicles substitute for the ‘intelligent’ security solutions used 

in regulated markets. The reasons why a country’s CIT industry stays 

unregulated/immature are threefold. 

I. The Central Bank has to accept that notes with dye on can be destructed 

and replaced for a small charge. 

II. Insurance companies have to accept the technology in order to insure 

the bank notes under CIT and in the ATM. For example, SQS’ dye is 

certified in Sweden, France, Belgium and Germany. 

III. Some countries’ banknotes are of such quality that explosive dye will not 

make any visible impact on them. This could simply be down to poor 

quality, or the banknotes may contain polymer, which is more dyeresistant. 

In 2009, SQS management estimated the total market for ATM-and CIT 

products to be worth between 850- 1500 msek. Albeit CIT attacks are 

clearly plummeting there are two points one should bear in mind: 

I. If the UK is excluded from the calculations, there has been a 7% 

increase YoY in 2011 on the number of CIT attacks. 

14! 

Figure 2.6:

Regulated 

markets will 

continue to 

demand 

advanced 

security 

products 

Deliveries 

take place in 

Q4-2012, and 

expected 

gross margin 

is up to 80% 

! 


! 


II. Even though attacks dropped 7% from 2000-2011, there has been a 

46% increase in the total value amount lost during the same period. 

Figure 2.7: (Russia not included)! 

Source: ESTA! 

Looking across Europe, it is mostly the regulated markets that struggle with 

the majority of CIT attacks. 

A country such as the UK have historically suffered greatly from numerous 

CIT attacks every year, and in 2009 it accounted for over 75% of total 

European CIT attacks. 

The widespread opportunities present in the regulated market are also 

exemplified by a recent customer acquisition in Sweden. 

In August 2012, SQS entered into an agreement with, Bankomat AB, 

regarding ATM cassette services and related logistics for Bankomat’s ATMs in 

Sweden. Bankomat AB handles the operation and management of all ATMs 

owned by Sweden’s five largest banks: Danske Bank, Nordea, SEB, Swedbank 

and Handelsbanken. The agreement extends over 5 years with a value of 

around 17 msek per yearand an option for 2 further years. 

Figure 2.9: Regulated Market for CIT products 

Country! 

#!of!CIT! 

companies! 

#!of! 

personnel! 

15! 

#!of!CIT! 

vehicles! 

Market! 

Potential! 

(MSEK)! 

Belgium& 2! 1300! 280! 9.8! 

Denmark& N/A! N/A! N/A! N/A! 

France& 12! 10000! 1500! 52.5! 

Germany& 56! 11000! 2500! 87.5! 

Italy& 160! 6800! 1450! 50.8! 

Luxembourg& 2! 210! 40! 1.4! 

Netherlands& 3! 2000! 400! 14.0! 

Norway& 2! 800! 250! 8.8! 

Sweden& 3! 1500! 400! 14.0! 

UK& 14! 11665! 3129! 109.5! 

Source: ! ESTA, Indep ! Research estimates ! 

! 

Figure 2.8 (Russia not included)! 

Source: ESTA 

TOTAL:& 248.2&MSEK& 

!

! 


! 


Case study: The Russian saga of differing cultures & customs 

Russia represents one of the more exciting markets within the 

unregulated/immature market sphere. SQS have been present in this market 

since June 2010 but a definite breakthrough has been hampered by a wide 

range of challenges. 

PSI Group’s epic Russian saga is a tale of many events, which can be 

summarized as below; 

June 2010 

PSI Group receives an initial order of 100 units of its Q-case 400 for distribution to 

the Russian National Bank, Sberbank. 

The total order calls for 420 units to eventually be delivered. 

July 2010 

PSI Group indicates experience of contractual dispute with its Russian distributor 

partner regarding the Sberbank-order. 

October 2010 

“Contractual challenges” still a significant issue and as a result no deliveries have 

been made at this point- contrary to the original agreement. 

December 2010 

100 units of the Q-case 400 are shipped out to Sberbank (out of the 420 ordered in 

June). PSI Group receives a prepayment from the distributor. 

A further 580 units of the security case are also ordered with expected delivery 

sometime during 2011- pending the approval of the first shipment by Sberbank. 

PSI Group voice their frustration with their Russian partner- particularly Russian 

customs and price negotiations. 

February 2011 (1) 

The Russian distribution partner still remains a significant problem area for Cash 

Management CIT/ATM. A total of 106 SQS cases were delivered to Sberbank in the 

4th quarter. The segment posts a writedown of goodwill of 186.1 mnok. 

February 2011 (2) 

PSI Group divests its Cash Management CIT/ATM (SQS) segment to its Russian 

distribution partner, OOO CKC, based on an EV of SEK 190 million. The closing of the 

transaction is expected take place in the beginning of March 2011. 

March 2011 

The closing of the SQS-transaction delays and the completion is now expected to take 

place during April 2011. 

April 2011 

The buyer, OOO CKC, have not met its payment obligations and requests additional 

time. PSI Group engages financial consultants to look at the economics of a private 

placement in the event that the buyer fails to carry out the payment. 

June 2011 

The SQS transaction is still delaying and the company makes the decision to conduct 

a private placement regardless of whether the transaction is finalized or not. 

August 2011 

The SQS transaction with its Russian partner, OOO CKC, is officially cancelled and PSI 

16!

All these 

traits make 

for an ideal 

SQS market 

! 


! 


Group conducts its private placement in September 2011. 

May 2012 

Deliveries of security cases to Russian customer, Sberbank, are restarted. An order of 

700 cases expected to be produced and paid for on delivery in the 2 nd quarter. 

July 2012 

Deliveries to Russia continue but the market is yet typified by “considerable 

uncertainty”. 

Then, given all this uncertainty, why not just abandon the whole 

Russian market at once, and focus resources elsewhere? 

Because the Russian market is a one with promise; 

1) HIGH CASH USAGE: According to Russian finance minister Anton 

Siluanov, the share of cash stands at 25% of total money supply, which 

is 2x that of European countries and 1.5x that of other developing 

nations. 

2) ATTRACTIVE CUSTOMER: Sberbank is Russia’s largest bank and 

accounts for over 50% of all Russian retail deposits. Upon signing the 

initial agreement in June 2010, Sberbank expressed its goal of having 

all their 4600 CIT vehicles in compliance with the SQS technology by 

2014. Thus, Sberbank alone could easily be worth up to 138 msek as a 

customer to SQS (based on 30ksek per case), and would act as a great 

reference customer to other international players. 

3) WIDESPREAD USE OF YESTERDAY’S SOLUTIONS: Russia has a 

strong history of using heavily armored CIT vehicles with cash bags 

(only some of which have alarm mechanisms) instead of the more 

European and modern ‘soft cars’-concept with secure protection cases. 

These primitive cash bags cost between 5$-145$ apiece and pose no 

challenge to seasoned burglars and thieves. 

Russia’s heightened focus on CIT security does not come unfounded. Over the 

last 2 years alone, close to 14 Musd has been lost in many vicious armed 

robberies of CIT transports, ATMs and banks. 

17!

! 


Figure 3.0: Financial Sector robberies, Russia 

! 


Date! City! Assault!Victim! MISC! Casualties! 

Worth!of! 

cash!stolen! 

(K!USD)! 

Jan]08& Blagoveshchensk! JSC!Bank!of!Asia!Pacific! Bank!robbery! None! 943! 

Feb]08& Sterlitamak! N/A! Bank!robbery! None! 122! 

Mar]08& Dzerzhinsk! Sberbank! Bank!robbery! None! 531.8! 

Jun]08& St.!Petersburg! EEFC! Bank!robbery! None! 200! 

Apr]09& Chenlyabinskov! Chelindbank! Bank!robbery! None! 20.3! 

Jun]09& Perm! Sberbank! CIT!robbery! None! 7700! 

Jul]09& Nekrasovskoe! Sberbank! Bank!robbery! None! 15.4! 

Sep]09& Khimki! Office!Savings!Bank! Bank!robbery! None! 1.8! 

Dec]09& Nazran! Esid!Bank! CIT!robbery! 1!wounded! 1200! 

Jun]10& Moscow! Altayenergobanka! Bank!robbery! None! 185! 

Jun]10& Moscow! Rosbank! CIT!robbery! 3!dead! 4000! 

Jul]10& Moscow! Citibank! Bank!robbery! None! 83! 

Sep]10& Smolensk! Svyaz-Bank! Bank!robbery! None! 90! 

Oct]10& Soviet!Balashika! Sberbank! Bank!robbery! None! 154! 

Oct]10& Zamshina! Petrovsky! Bank!robbery! None! 16! 

Feb]11& Vladikavkaz! Bank!of!Moscow! Bank!robbery! None! 6160! 

May]11& Moscow! N/A! Bank!theft! None! 400! 

May]11& Perm! Sberbank! ATM!robbery! None! 154! 

Jun]11& St-Petersburg! N/A! Bank!robbery! None! 40! 

Sep]11& Moscow! N/A! ATM!robbery! None! 21.6! 

Oct]11& Elektrostal! N/A! Bank!theft! None! 771! 

Oct]11& Moscow! Sberbank! ATM!robbery! 

Bank! 

1!Several!injured! 3.1! 

Oct]11& Kabardino-Balkaria! Opening!Bank! 

Robbery! 2!severely!injured! 118! 

Dec]11& Moscow! N/A! Bank!theft! None! 679! 

Feb]12& Thule! N/A! Bank!theft! 

Bank! 

None! 61.7! 

Feb]12& St-Petersburg! Bank!Commercial!East! Robbery! 

Currency! 

None! 98.7! 

Feb]12& Rostov! N/A! 

Exchange! None! 92.5! 

Mar]12& Moscow! Sberbank! Bank!robbery! None! 586! 

May]12& Perm! N/A! ATM!robbery! None! 

! 

185.6! 

Total&lost:& 24.6&MUSD& 

! ! ! ! 

Source: RIA Novosti, Indep Research estimates 

Furthermore, it is with great encouragement we note that cash usage in 

Russia is far from declining. Cash is still the preferred payment medium in 

Russia and such is also evidenced by the increasing no. of ATM’s in Russia- 

which have risen close to 19% year-on-year. Russia now boasts a total of 

over 60 000 ATMs. 

18!

The cash 

handling 

industry has 

become 

highly 

dynamic 

! 


Recent M&A activity 

! 

Figure 3.1: 

Source: RIA Novosti 


EXAMPLE 1: 

WHEN: Oct. 2010 

WHAT: Significant cash handling player, Scan Coin, was approached by Swedish buyout 

firm, Segulah IV, who acquired a 70% majority stake in the company. 

VALUE: Details of the transaction have remained undisclosed and relevant data have 

been near impossible to obtain. However, using a P/S multiple of 1.5, we estimate a 

purchasing price of around 760 msek, which would value the whole firm at around 1.1 

billion SEK. 

RESULT: Following Segulah’s investment in the company, Scan Coin’s capex 

spending has increased substantially in the form of extensive M&A activity. A common 

factor for all the acquired companies is their shared status as longstanding partners 

with Scan Coin in their respective geographic markets. As well-established distributors 

and suppliers within cash handling for the bank- and retail sectors all around Europe, 

Scan Coin has now become more geographically diversified. Since its first acquisition 

some 16 months ago we believe Scan Coin have reached acquired revenues of more 

than 130 msek: roughly 15% of its FY2010 revenue base. 

Figure 3.2: Scan Coin’s M&A Activity 

Annual! 

When! Target! 

revenues! What! Where! 

May-12! SoftOne! 5!msek! Software:!Hardware!integrator! Switzerland! 

Jan-12! Laurel!NGZ!SAS! 33.8!msek! Hardware:!Note!handling! 

Distributor:!Cash!handling! 

France! 

Jan-12! Money!Park!SARL! 8.5!msek! equipment! France! 

Sep-11! Sotremo! >60!msek! Distributor!Coin/note!handling! 

Distributor:!Coin/banknote! 

Switzerland! 

Apr-11! Sophus!Clausen! 

& 

4!msek! solutions!! Norway! 

Total&acquired&revenues&&&&&&111.3&MSEK& 

! 

%&of&FY2010&revenues& 15.3%& 

! ! 

! 

! ! 

Source: Scan Coin, Indep Research estimates 

19!

! 


! 


EXAMPLE 2: 

WHEN: December 2011 

WHAT: Cash handling giant, Loomis, purchased Spanish CIT company, Efectivox. 

Efectivox boasts an employee base of 500, 70 CIT vehicles and 11 branches. In 2010 

the company posted negative results on revenues of MSEK 130. However, for 2013, 

Loomis expects the company to have positive contribution on the group’s earnings 

through synergies. 

VALUE: The purchase price was appx 160 MSEK. Such levels yield a EV/Sales of 

1.23x. Loomis and its acquired companies offer interesting comparisons with PSI 

Group’s Cash Management CIT/ATM (SQS). 

EXAMPLE 3: 

WHEN: February 2012 

WHAT: Japanese cash handling giant, Glory LTD, 

acquired UK based Talaris Topco LTD. Talaris is one of 

the world’s leading manufacturers of cash handling 

machines to banking, retail and gaming industries. 

With such machines as teller cash recyclers, desktop 

counters and ATMs on offer, Talaris draws on over 

1900 employees in 22 countries around the world. 

VALUE: Talaris was purchased for a cash 

consideration of 650 mGBP. 

The acquisition involved interesting pricing multiples- 

many of which largely outperform those of PSI Group. 

ESTIMATES& 

! 

Retail Solutions: 

Retail Solutions is by many accounts the safe haven within the PSI Group as it 

usually performs well, even during downturns. With high market exposure to 

the stable, yet mature markets of Norway and Sweden, Retail Solutions, is 

also the one segment with least growth prospects. It has widely been 

projected a significant revenue decline for this segment following high 

penetration rates for CashGuard. 

However, albeit the sale of CashGuard systems to these segments has 

reached its maturity stage, Retail Solutions will still gain from the powerful 

installed base in the form of Service/Support revenues. 

20! 

Figure 3.3: Details of Talaris-acquisition 

mGBP! 2010A! 2011A! 

Revenue! 305.6! 321.5! 

EBITDA! 63.7! 68.1! 

EBIT! 38.4! 37.5! 

EV/S! 2.1! 2.0& 

EV/EBITDA! 10.2! 9.5& 

EV/EBIT! 16.9! 17.3& 

Source: Glory LTD

! 


! 

Figure 3.4: 

Revenue'(MNOK)' 

400! 

300! 

200! 

100! 

0! 


Retail'Solutions:'Revenue'split' 


Further to this, we see many opportunities developing for Retail Solutions with 

its Pricer ESLs. We foresee that the escalated deployment of Pricer ESL in 

Norway and Sweden should compensate for the expected decline of 

CashGuard deliveries. 

Thus we deem it probable that Retail Solutions will grow its revenue base with 

a CAGR of 0.6%, whereas EBITDA margins will remain in the lower range 

around 7%. 

Figure 3.5: Retail Solutions- Earnings 

MNOK! 2009A! 2010A! 2011A! 2012E! 2013E! 2014E! 

Revenue! 393.8! 406.4! 412.6! 405.4! 413.5! 420.9! 

EBITDA! 14.9! 38.7! 36.9! 29.8! 31.0! 30.7! 

margin! 3.8%! 9.5%! 8.9%! 7.4%! 7.5%! 7.3%! 


Cash Management Retail: 

Cash Management Retail is expected to have a disastrous year of 2012 

following maturity of Norwegian- and Swedish markets as well as worsening 

economic conditions across the Eurozone. For the 1 st Half 2012, Cash 

Management Retail has posted revenues of 40.9 mnok vis-à-vis 77.6 mnok 1 st 

Half 2011. That speaks volumes of a deteriorating market climate. 

We see no operational turning point arising in some time, and thus expect 

revenue CAGR to be -3.9% over the next 3 years. 

Year 2011 was a brilliant year for Cash Management Retail and we do not see 

the segment reaching those highs for some years. Margins will be under 

pressure in 2012 and following increased internationalization we expect these 

to remain under pressure from 2013 and onwards. 

21! 

NEW!SALES! 

SERVICE/REPAIRS!

Cash 

Management 

CIT/ATM will 

drive most of 

PSI Group ’s 

growth going 

forward 

! 


! 


Thus we anticipate a significant decline in the number of delivered CashGuard 

systems to the market. 1 st Half 2012 is down by 456 systems YoY: 377 

systems short in Norway/Sweden, and 79 short in the international market. 

That does not bode well, and our forward estimates are logically influenced by 

this. However, we do see international sales developing nicely and this should 

keep total systems deliveries stable and flat. 

Figure 3.6: Cash Management Retail- Earnings 

MNOK! 2009A! 2010A! 2011A! 2012E! 2013E! 2014E! 

Revenue! 107.4! 124.5! 131.1! 89.5! 97.6! 108.3! 

EBITDA! 7.6! 13.6! 21! 5.5! 9.6! 11.0! 

margin! 7.1%! 10.9%! 16.0%! 6.2%! 9.8%! 10.2%! 


Figure 3.7: No. of delivered CashGuard systems 

#!delivered!systems! 2009A! 2010A! 2011A! 2012E! 2013E! 2014E! 

Norway!&!Sweden! 1560! 1466! 1278! 899! 765! 602! 

Other! 188! 557! 688! 453! 640! 832! 

TOTAL& 1748& 2023& 1966& 1352& 1404& 1435& 



Cash Management CIT is the best-performing segment of PSI Group thus far 

in 2012. As opposed to the other two segments, CM CIT/ATM has performed 

in line with 1 st Half 2011. We expect FY2012 revenue to come in 12.4% higher 

YoY with margins remaining similar to previous years. However, these should 

also pick up amid increased market activity from 2013 and onwards. 

On the back of the recent 17MSEK-a year agreement with Bankomat AB, we 

forecast 15.9% revenue CAGR through 2014. In the event that Russian 

deliveries escalate we would obviously adhere to revise our estimates further 

upwards. We also downplay the risk of running losses due to stable market 

conditions as well as a cost cutting program initiated in 2011. 

22!

We see 

potential for 

PSI Group 

becoming a 

stable 

generator of 

dividends 

! 


Figure 3.8: Cash Management CIT/ATM- Earnings 

! 


MNOK! 2009A! 2010A! 2011A! 2012E! 2013E! 2014E! 

Revenue! 173.7! 86.3! 90.3! 101.5! 112.6! 130.7! 

EBITDA! 28.7! -11.9! 2.4! 2.8! 7.1! 13.2! 

margin! 16.5%! NEG! 2.7%! 2.7%! 6.3%! 10.1%! 


Dividend 

PSI Group shall pay out an extraordinary dividend of 0.25 NOK per share in 

2012 for the financial year of 2011. The group experienced strong operational 

cash flow as well as securing extra capital through its equity issue in 2011. 

The company’s board of directors have stated that they wish to “continue to 

pay dividends in the coming years” too. 

However, for 2012 we believe the situation is different. 2 nd Half 2012 free 

cash flow amounted to 8mnok compared to 10.8mnok for 2011. In addition 

the group has its dividend payment of 11.1mnok scheduled for Q3 2012. We 

take a cautious dividend stance and feel it would be too risky to pay dividends 

also in 2013. However, from 2014 and onwards we believe the company 

should return to its dividend policy on the back of strong 2013 cash flows. We 

estimate a FY2013 DPS of 0.3 NOK, which is 20% above the FY2011 dividend. 

Figure 3.9: 


Source: Indep Research estimates! 

! 

23! 

!

The 

drastically 

improved 

financials act 

as an 

important 

safety buffer 

! 


! 


Capital Structure 

We believe the 2011 equity issue will be instrumental in driving PSI Group’s 

growth in the future. Conducted in Q3-2011 the rights issue was highly 

successful in bringing in required capital for PSI Group. With over 62.6 mnok 

in increased capital the company got the funding it sought and dearly needed. 

PSI Group had been in breach with its main bank’s loan covenants for some 

time- and with a failed Cash Management CIT/ATM transaction- a share issue 

was the only way out. The net proceeds went towards reducing interestbearing 

debts by 56.5 mnok. The company has also heavily depreciated its 

goodwill posts stemming from the CashGuard acquisition in 2008. 

Today PSI Group generally generates strong and stable cash flows and, as a 

result, PSI Group’s financial structure is now considerably stronger than 

before. 

Figure 4.0: 

7! 

6! 

5! 

4! 

3! 

2! 

1! 

0! 

Financial'structure'' 


Figure 4.1: 

MNOK' 

350! 

300! 

250! 

200! 

150! 

100! 

50! 

0! 

176! 

450%! 

400%! 

350%! 

300%! 

250%! 

200%! 

150%! 

100%! 

50%! 

0%! 

Improved'Kinancial'position' 

133! 81! 

24! 

94! 

Q2!2011! Q2!2012! 


NIBD/EBITDA! 

(LHS)! 

Covenant!(LHS)! 

Debt/Equity! 

(RHS)! 

InterestZbearing! 

debt! 

Goodwill! 

Cash!

P&L 

! 


! 


MNOK! 2009A! 2010A! 2011A! 2012E! 2013E! 2014E! 

Sales& 565.6& 524.3& 537.2& 518.9& 545.9& 580.2& 

COGS! -240.9! -217.8! -239.4! -233.0! -241.3! -254.7! 

Gross!Profit! 324.7! 306.5! 297.8! 285.9! 304.6! 325.5! 

SG&A! 280.4! -276.5! -247.9! -257.1! -267.0! -280.7! 

EBITDA& 44.3& 30.0& 49.9& 28.8& 37.6& 44.8& 

Depreciation&Amortisation! 40.2! -27.0! -42.6! -22.6! -26.2! -28.4! 

Goodwill!impairment! 0.0! -194.4! -58.6! 0.0! 0.0! 0.0! 

EBIT& 4.0& ]191.5& ]51.3& 6.3& 11.4& 16.3& 

Net!financial!items! -12.7! -11.8! -6.1! -0.5! 0.6! 0.5! 

Pretax&Profit& ]8.7& ]203.3& ]57.4& 5.7& 12.0& 16.8& 

Tax!(28%)! 0.1! -1.8! 0.1! -1.2! -3.4! -4.7! 

Reported&after&tax&profit& ]8.6& ]205.1& ]57.3& 4.5& 8.6& 12.1& 

Extraord.!items! 0.0! 0.0! 0.0! 0.0! 0.0! 0.0! 

Net&Income& ]8.6& ]205.1& ]57.3& 4.5& 8.6& 12.1& 

EPS& ]0.42& ]9.71& ]2.03& 0.10& 0.19& 0.27& 

Balance Sheet 

MNOK! 2009A! 2010A! 2011A! 2012E! 2013E! 2014E! 

Goodwill! 313.1! 140.8! 82.0! 81.0! 81.0! 81.0! 

Intangible!assets! 180.7! 186.0! 156.3! 139.7! 127.1! 115.7! 

Tangible!assets! 47.8! 44.4! 40.5! 37.7! 35.1! 32.6! 

Non-current!financial! 

assets! 0.0! 0.0! 0.0! 0.0! 0.0! 0.0! 

Account!receivables! 90.3! 84.3! 81.5! 84.3! 86.9! 89.1! 

Inventory! 75.1! 71.8! 66.3! 69.9! 72.4! 73.9! 

Other!current!assets! 16.2! 16.0! 13.4! 12.7! 12.1! 11.5! 

Cash!and!cash! 

equivalents! 9.7! 5.1! 4.2! 3.9! 13.1! 11.8! 

Total&assets& 733.0& 548.3& 444.3& 429.1& 427.5& 415.6& 

Equity! 364.1! 203.3! 210.4! 208.5! 226.3! 220.4! 

Minorities! 0.0! 0.0! 0.0! 0.0! 0.0! 0.0! 

Interest&bearing&debt& 197.3& 187.4& 99.2& 84.6& 70.1& 61.7& 

Accounts!payable! 51.1! 53.3! 38.7! 51.9! 54.6! 63.8! 

Pension!provisions! 0.0! 0.0! 0.0! 0.0! 0.0! 0.0! 

Other!liabilities! 120.5! 104.3! 96.0! 84.1! 76.5! 69.7! 

Total&equity&and& 

liabilities& 733.0& 548.3& 444.3& 429.1& 427.5& 415.6& 

Net!interest!bearing! 

debt! 187.6! 182.3! 95.0! 80.7! 57.0! 49.9! 

25!

Cash flow Statement 

! 


! 

! 

! 


MNOK! 2009A! 2010A! 2011A! 2012E! 2013E! 2014E! 

EBT! -8.7! -198.7! -51.4! 5.7! 12.0! 16.8! 

Other!income!! -1.8! -2.0! -2.0! -3.2! -2.2! -1.8! 

Depreciation&!amortisation! 40.3! 221.0! 95.2! 22.6! 26.2! 28.4! 

Net!financial!items! 7.7! 1.1! 6.7! 5.8! 0.6! 0.5! 

Paid!taxes! -0.4! 1.0! 2.1! -3.6! -3.4! -4.7! 

Changes!in!working!capital! 5.7! 3.6! -14.9! -6.8! 2.4! -5.5! 

Cash&flow&from&operations& 42.7! 26.1! 35.7! 37.1! 35.6! 33.8! 

!! 

CAPEX! 

Proceeds!from!other! 

! 

-20.8! 

! 

-12.1! 

! 

-2.4! 

! 

-8.8! 

! 

-12.0! 

! 

-13.3! 

investments! 3.2! 12.3! 9.2! 2.6! 0.0! 0.0! 

Cash&flow&from&investments& -17.5! 0.2! 6.8! -6.2! -12.0! -13.3! 

&& 

FREE&CASH&FLOW& 

! 

25.2! 

! 

26.3! 

! 

42.5! 

! 

30.9! 

! 

23.6! 

! 

20.5! 

!! 

Changes!in!interest!bearing! ! ! ! ! ! ! 

debt! -34.8! -31.4! -105.6! -18.1! -14.5! -8.4! 

Issue/repurchase!of!shares! 0.0! 0.0! 62.3! -1.5! 0.0! 0.0! 

Paid!dividends! 0.0! 0.0! 0.0! -11.1! 0.0! -13.3! 

Other!non-cash!adjustments! 0.0! 0.0! 0.0! 0.0! 0.0! 0.0! 

Cash&flow&from&financing& -34.8! -31.4! -43.3! -30.7! -14.5! -21.7! 

!! 

Net&cash&flow& 

! 

-9.6! 

! 

-5.1! 

! 

-0.8! 

! 

0.2! 

! 

9.1! 

! 

-1.2! 

!! 

Net!IB!Debt! 

! 

187.6! 

! 

182.3! 

! 

95.0! 

! 

80.7! 

! 

57.0! 

! 

49.9! 

26!

! 

Segment Reporting 

! 

CASHGUARD&INSTALLATIONS&(#)& 


& 

& 

& 

! 

! 

! 

! 

! 

! 

! 


2009A! 2010A! 2011A! 2012E! 2013E! 2014E! 

Norway!&!Sweden! ! 1560! ! 1466! ! 1278! ! 899! ! 765! ! 602! 

Other! 188! 557! 688! 453! 640! 832! 

TOTAL! 1748! 2023! 1966! 1352! 1404! 1435! 

RETAIL&SOLUTIONS&(MNOK)& !! !! !! !! !! !! 

Revenue! 393.8! 406.4! 412.6! 405.4! 413.5! 420.9! 

EBITDA! 14.9! 38.7! 36.9! 29.8! 31.0! 30.7! 

margin! 3.8%! 9.5%! 8.9%! 7.4%! 7.5%! 7.3%! 

CASH&MANAGEMENT&RETAIL&(MNOK)& !! !! !! !! !! !! 

Revenue! 107.4! 124.5! 131.1! 89.5! 97.6! 108.3! 

EBITDA! 7.6! 13.6! 21! 5.5! 9.6! 11.0! 

margin! 7.1%! 10.9%! 16.0%! 6.2%! 9.8%! 10.2%! 

CASH&MANAGEMENT&CIT/ATM& 

(MNOK)& !! !! !! !! !! !! 

Revenue! 173.7! 86.3! 90.3! 103.5! 119.1! 140.5! 

EBITDA! 28.7! -11.9! 2.4! 2.9! 7.5! 14.2! 

margin! 16.5%! -13.8%! 2.7%! 2.8%! 6.3%! 10.1%! 

ELIMINATIONS&(MNOK)& !! !! !! !! !! !! 

Revenue!El.! -111.1! -100.4! -103! -80.0! -84.3! -89.6! 

EBITDA!El.! 2.5! 1! 0.2! 0.0! 0.4! 0.4! 

27!

! 


VALUATION& 

DCF Valuation 

! 

! 


Base&case& 2012- 2017- Terminal! 

scenario& 

2016E! 2026E! Value! Scenario!Assessment! 

Revenue!growth!is!largely!driven!from!international!customer!wins! 

Revenue!CAGR! 3.2%! 3.0%! 611! for!CashGuard!and!SQS.!Norway/Sweden!revenues!decline!overall.!!!! 

! 

Margins!become!somewhat!subdued!following!changed!customer! 

exposure!from!high-yield!Norway/Sweden!to!international!markets.! 

EBITDA! 

However,!increased!service-!and!Pricer!ESL!revenues!for! 

margins! 7.8%! 9.0%! 

Norway/Sweden!compensate!somewhat.!! 

Capital! 

! 

Turnover!(x)! 1.86! 1.98! 

! ! 

ROIC! 6.0%! 7.3%! 

! 

! ! 

Best&case& 2012- 2017- Terminal! 

scenario& 2016E! 2026E! Value! Scenario!Assessment!! 

Norway/Sweden!gives!off!a!renewed!boost!to!CashGuard,!whilst!Pricer! 

installations!are!thriving.!CashGuard!is!also!becoming!well-established!with! 

Revenue!CAGR! 3.8%! 3.5%! 744.5! international!grocery!retailers.!! 

! 

Large!scale!CashGuard!installations!secure!greater!margins,!as!does!SQS! 

EBITDA!margins! 8.4%! 10.0%! 

which!has!established!itself!in!new!unregulated!markets!such!as!Russia.!!! 

Capital! 

! 

Turnover!(x)! 1.87! 1.98! 

ROIC! 7.0%! 9.0%! ! ! 

! 

! ! 

Worst&case& 2012- 2017- Terminal! 

scenario& 2016E! 2026E! Value! Scenario!Assessment!! 

International!CashGuard!demand!takes!a!hit!parallel!to!declining!revenues!in! 

Revenue!CAGR! 1.9%! 2.5%! 466.3! Norway/Sweden.!SQS!market!conditions!also!remain!tough!with!low!volumes.!!!! 

! 

Margins!remain!under!pressure!as!the!international!economic!climate! 

worsens.!Domestic-!as!well!as!International!retail-!and!CIT!companies!reduce! 

EBITDA!margins! 6.3%! 8.0%! 

their!expenditure.!!!!! 

Capital!Turnover! 

! 

(x)! 1.83! 1.98! 

ROIC! 2.9%! 4.7%! ! ! 

! ! 

28!

Current 

valuation 

multiples in 

the lower end 

historically 

! 


Historical Valuation 

! 

7! 

6! 

5! 

4! 

3! 

2! 

1! 

0! 

140! 

120! 

100! 

80! 

60! 

40! 

20! 

0! 


Perpetuity&growth&& 

! ! ! 1.5%! 2.0%! ! 2.5%& 3.0%! ! 3.5%! 

! ! 7.4%! 6.10! 6.64! 7.28! 8.08! 9.08! 

! 

8.4%! 4.64! 4.98! 5.37! 5.85! 6.41! 

! WACC&& 9.4%& 3.60! 3.83! 4.09& 4.39! 4.17! 

! 

! 

Scenario! Fair!value! Probability! 

Base!Case! 4.09! 70%! 

Worst!Case! 2.55! 10%! 

Best!Case! 5.11! 20%! 

Weighted&Fair&Value&&&&&&& 

(per&share)& 4.14& 

! 

10.4%! 2.85! 3.00! 3.18! 3.38! 3.60! 

11.4%! 2.28! 2.39! 2.51! 2.65! 2.80! 


29! 

EV/S! 

NIBD/EBITDA! 

P/BV! 

Debt/Equity! 

P/E! 

EV/EBITDA! 

WACC!calculation! !! 

Cost!of!Equity! 12.7%! 

Cost!of!Debt! 3.3%! 

Debt!ratio! 35.2%! 

WACC& 9.4%! 

EV/EBIT!adj! 

DCF!additions! MNOK! 

NPV!of!deferred!tax!asset! 13! 

Net!IB!Debt! 90!

! 


! 

Relative Valuation 

Investment Conclusion 

NOK'per'share' 

HOLD. 

6! 

5! 

4! 

3! 

2! 

1! 

0! 


Company! 

RS&and&CM& 

!! P/E! !! !! EV/SALES! !! EV/EBITDA! !! EV/EBIT! P/BV! 

MCAP! 

(mEURO)! 

Retail& 2011A& 2012E& 2013E& 2011A& 2012E& 2013E& 2011A& 2012E& 2013E& 2011A& 2012E& 2013E& 2012E& 14/09-12! 

Glory!! 17.9! 14.3! 12.6! 0.40! 0.79! 0.71! 3.9! 6.3! 5.3! 6.0! 8.5! 7.8! 0.7! 1198! 

Gunnebo! 9.5! 11.1! 8.6! 0.54! 0.50! 0.46! 6.9! 6.8! 5.4! 8.7! 9.0! 6.7! 1.2! 252! 

NCR!Corp.! 73.3! 14.9! 11.7! 0.80! 0.77! 0.70! 7.4! 6.5! 5.7! 10.0! 9.7! 7.9! 3.1! 2966! 

Pricer! 8.9! 15.7! 13.3! 2.09! 1.96! 1.74! 13.5! 13.4! 11.0! 16.7! 13.6! 11.3! 1.7! 155! 

Wincor!Nixdorf! 10.4! 16.8! 12.9! 0.56! 0.56! 0.54! 5.8! 7.7! 6.5! 8.1! 12.2! 9.7! 2.7! 887! 

Sector!Median! 10.0! 15.0! 12.8! 0.55! 0.68! 0.62! 6.4! 7.3! 5.9! 8.4! 10.6! 8.8! 1.5! !! 

!! 

!! 

!! 

!! 

!! 

CM&CIT/ATM& 

! ! 

!! 

! ! 

!! 

! ! 

!! 

! ! 

!! 

! ! 

Brinks! 15.6! 

! 

12.0! 11.0! 

! 

0.36! 

! 

0.45! 0.32! 

! 

4.0! 

! 

3.6! 3.2! 

! 

7.5! 

! 

6.0! 5.2! 

! 

2.1! 

! 

881! 

Loomis! 12.8! 10.5! 9.7! 0.80! 0.74! 0.70! 5.6! 4.9! 4.5! 9.6! 8.8! 7.8! 1.7! 737! 

Sector!Median! 14.2! 11.2! 10.3! 0.58! 0.59! 0.51! 4.8! 4.3! 3.8! 8.6! 7.4! 6.5! 1.9! !! 

!! 

!! 

!! 

!! 

!! 

Combined! ! ! 

! ! 

! ! 

! ! 

! ! 

Median! 11.6! 13.1! 11.8! 0.5! 0.7! 0.6! 5.7! 6.5! 5.3! 8.4! 8.9! 7.8! 1.7! !! 

!! 

!! 

!! 

!! 

!! 

PSI!Group! 

! 

NEG! 

! 

40.0! 21.1! 

! 

0.51! 

! 

0.51! 0.44! 

! 

5.5! 

! 

9.1! 6.4! 

! 

NEG! 

! 

41.9! 21.0! 

! 

0.9! 

! 

24! 

Most 

earnings 

multiples are 

particularly 

high, 

whereas 

equity looks 

undervalued 

Valuation as 

a whole gives 

a mixed 

picture of 

PSI Group 

30!

! 


Appendix 

The long story… 

! 


PSI Group originally came to be known as Pinnås Systems International (PSI) 

as it essentially only consisted of today’s business segment, Retail Solutions, 

marketing and distributing various products and services to the retail 

industry. Today’s company is therefore the result of considerable past M&A 

activity within the Norwegian and Swedish retail focused business segments. 

Retail Solutions 

Retail Solutions supply a wide range of technology solutions to the retail 

sector in Sweden and Norway. As opposed to PSI Group’s other two business 

units, Retail Solutions is the only pure-play distributor of products to the 

grocery retail industry. CashGuard, scales, packaging machines, electronic 

shelf labels (ESL) and reverse vending machines (Repant) represent the core 

of the most sold products in this ‘distributor’ business unit. 

CASHGUARD 

This comprises the distribution of PSI Group’s own product, CashGuard, to Norwegian 

and Swedish markets and therefore also includes all service/support orders. (see 

more thorough description under Cash Management Retail section) 

SCALES AND PACKAGING MACHINES 

The leading supplier in Norway/Sweden for this sub-segment, RS markets the Digi 

scales offering everything from control scales to price calculating scales, as well as its 

automated packaging machines. All of Teraoka’s Digi scales and packaging machines 

offer all the traits needed to comprehensively meet requirements to weighing, 

packaging, tracking and labeling in a fresh produce department as well as in the 

fruits/vegetables department. 

ELECTRONIC SHELF LABELS 

PSI Group offers a broad range of Pricer’s electronic shelf label 

systems. With easy integration to back office systems through 

Pricer’s File Interface, Pricer’s ESLs vastly enhance grocery 

stores’ efficiency. With such solutions installed retail chains can 

now easily adjust pricing information, improve inventory as well 

as mitigate the risk of incorrect pricing. 

31! 

Figure 4.2: 

Continuum electronic 

labels 

Source: Pricer

! 


! 


REVERSE VENDING MACHINES 

Retail Solutions is the exclusive distributor of bottle deposit 

solutions from Repant to Sweden. Previously, RS was the prime 

distributor also to Norway but this was discontinued in 2011. 

DISPENSER MACHINES 

These dispensers are distributed on behalf of Norwegian company, 

Vensafe, and are directed towards automated sales solutions for 

FMCG items (Fast Moving Consumer Goods). Such dispenser 

machines help provide efficient store operations as well as the 

reduction of theft. 

CONSUMABLES 

Consumables is mostly related to self-adhesive labeling for various types of 

weighing/packaging equipment as well as for major production facilities in the food 

industry. Other consumables include CashGuard cleaning kits, cartridges for label 

printers and paper rolls for receipt printers. 

SERVICE/SUPPORT REVENUES 

All of Retail Solutions’ sales and distributions of products come with complete afterservice 

and maintenance which often includes the regular supply of consumables such 

as adhesive labels, toners, ink cartridges, receipt rolls, packaging film and Thermal 

Transfer Ribbons (TTR). However, the vast majority of RS’s service/maintenance 

revenues are derived from its Norwegian/Swedish installed base of CashGuard. These 

service agreements run for a period of 5 years, and in addition to regular 

maintenance, may involve necessary one-off installments such as phasing out of 

certain currency coins/notes. As an example, recent political legislation in Norway 

prompted the discontinuation of the 50-øring coin in May 2012. 

32! 

Figure 4.3: 

Repant Cosmos 4 

Fraktioner 

Source: PSI Antonson 

Figure 4.4: 

Vensafe Zervio 

Master 

Source: Vensafe!

! 


Cash Management Retail 

! 


This segment comprises the development, production and sale of all 

CashGuard systems. It also draws on all the CashGuard service/support 

incomes except those stemming from the Sweden/Norway markets- which 

belong to Retail Solutions. 

Cashguard is a closed cash handling system which is integrated with the store’s POSsystem 

and existing checkout counters. The transaction process is simple. First, sales 

is registered in the cash register and the consumer simultaneously inserts coins. 

Then, the cashier feeds in the notes received from the consumer-which are counted 

immediately- and the consumer automatically receives the correct change. Finally, 

collectors/CIT staff provide the efficient emptying of note recyclers as well as the safe 

transferring of excess notes to the store’s back office or to a cash centre. All these 

steps are facilitated by the well-renowned Cashguard system, which boosts an 

extensive list of functions; 

Cashguard Premium- the supreme Cashguard module with ergonomic design, high 

coin and currency capacity, flexible modular structure with multiple options and 

support function for currencies; SEK, NOK, DKK, ZAR, GBP, KWD and EUR. 

CashGuard Blue- the Cashguard module with a heightened 

level of security focus. Generally speaking, this module has 

increased focus on eliminating the threat of store robberies 

as it comes with an advanced dyeing protection rendering 

the “stolen” cash obsolete in the event of robbery. Thus it 

enables cash managers to store more cash in the cash 

registers over night without additional transfers. Particularly 

popular with postal offices and bank offices and is only 

offered in Norway/Sweden. 

Cashguard Note Collectors- are simply note collectors for 

safe removal of excess notes from CashGuard systems. 

Various collectors with capacity of up to 2000 notes are 

available with comprehensive dyeing technology protection, 

some of which also boost electronic shield protection. 

Coin Recycler- a coin machine with automatic feeding and 

high-standard secure coin authentication settings. Invalid 

coins are therefore swiftly rejected, and one can insert up to 

50 coins simultaneously into the machine. 

CashBack- this CashGuard function enables consumers to withdraw cash directly at 

checkouts. The withdrawal of cash is registered as a normal debit-card purchase for 

the consumer, whereas the store receives the equivalent sum of money on its 

account. Essentially, the checkout now functions like an ATM. 

33! 

Figure 4.5: CashGuard Blue 

Source: CashGuard Ireland! 

Figure 4.6: Note collector B3 

Source: CashGuard !

! 



! 


This segment comprises the development, production and sale of the SQS 

product line-which is ‘intelligent’ security solutions. Such solutions are simply 

the modern, next-generation alternative to the prehistoric armored transport 

of valuables. SQS encompasses a wide variety of advanced cash protection 

solutions for all security transport and ATMs, making both international banks 

and CIT (Cash-in-Transit) companies important customers. Generally 

speaking, SQS’s solutions revolve around the sale of its CIT security cases as 

well as its ATM cassettes but its product line is still more than just that 

(examples); 

Q-Ink 

This is SQS’s own developed and patented dye, which by many accounts forms the 

basis of all SQS products. The dye’s function is simple: destroy the banknotes making 

them worthless in the hands of the ‘unlawful’. This dye patent is recognized all across 

Europe and has already been certified in Sweden, France, Belgium and Germany. 

However, different countries use different materials in the production of their 

currencies and some banknotes contain amounts of polymer which is more inkresistant. 

The division has therefore experimented with other alternatives to ink 

destruction to mitigate this. 

Q-Case and Q-Collector 

These products are designed to facilitate the transportation of 

banknotes from one location to another, without the use of 

weapons- better known as the Softcar® concept. Thus by 

transporting banknotes in different, customized formats, such as 

piles of tied banknotes or plastic banknote bags (Q-collector), the 

cash is safely inserted into the security case (Q-case). 

The Q-case comes with two different functions; one for transporting 

banknotes, and one for transporting ATM cassettes. 

Softcar® (intelligent vehicle rack solutions) 

This is a solution developed for security transports allowing the CIT company to 

evolve from armoured vehicles to Softcars (unarmoured vehicles) without 

compromising the security of the banknotes. The racks are transferable, have low 

weight and to a large extent represent the modernity and promise of SQS and its 

Softcar® product line in the CIT sector going forward. 

34! 

Figure 4.7: Q-case 

Source: PSI Group!

! 


Senior Management 

! 


Jørgen Waaler 

CEO 

Mr. Waaler has been CEO of PSI Group since 2006 and prior to that he was PSI 

Group’s vice CEO for four years. Mr. Waaler has gained a deep and broad 

understanding in the technology, market conditions and the commercial opportunities 

after almost ten years in the Group’s top management. He has studied economics and 

has an MBA from University of Wyoming from 1983. Waaler has worked within IT his 

whole carrier, first as finance consultant, consultant manager and IT manager in 

Fabritus AS, than later as CEO in Norsk Computer Industri AS, sales manager in 

Norsk Data AS, managing director in European Trading Corporation AS and CEO in 

iGroup ASA, before he came to PSI Group in 2002. 

Anders Nilsen 

CFO 

Mr. Nilsen holds a Master of Arts in Management with Senior Honurs from the 

University of St. Andrews, and a degree in IT from NITH. He has previous experience 

as Finance Manager in Konica Minolta Business Solutions Norway AS, and Financial 

Controller at UPC/Get and Helly Hansen. Nilsen started in PSI 10 April 2007. 

Per Haagensen 

CEO, Retail Solutions 

Mr. Haagensen manages the division Retail Solutions, the Group’s biggest business 

areas measured in revenue. 

Mr. Haagensen, who took office in 2010, has an MBA from BI – Norwegian School of 

Management. Before joining PSI Group he was Managing Director in Tomra AS for 12 

years, resulting in leading insight and knowledge of technology solutions for the Retail 

segment. 

Sven Calissendorff 

COO Retail Solutions 

Mr. Calissendorff has managed PSI Antonson since 2009 after first been marketing 

manager since 2004. He has been a sales manager with Berendsen and Ilford Photo. 

Mr. Calissendorrf holds a DIHM Diploma in marketing from IHM Business School. 

Roine Gabrielsson 

CEO, Cash Management Retail 

Mr. Gabrielsson has managed Cash Management Retail since May 2012. 

Having worked more than 14 years in the IT software business he has broad 

experience and knowledge of international sales management, partner channel 

management and strategic marketing. His previous positions include Vice President 

Sales & Marketing with Nordic Edge, Vice President Global Sales with Projectplace 

International, CEO with Synergica and Business Unit Manager with TJ Group. Mr. 

Gabrielsson has an MBA from Henley Business School, U.K 

Erik Svedmark 

CEO, Cash Management CIT/ATM 

Mr. Svedmark has managed Cash Management CIT/ATM since 2008. Mr. Svedmark is 

graduate civil engineer from Linköpings University with significant postgraduate 

studies. He has been a researcher at the Swedish Defence Reaserch Establishment 

(FOA), research engineer and team leader at Bofors Aerotronics AB related to the 

fighter plane JAS 39 as well as working in Telia. 

35!

! 


Top 25 Shareholders 

(as of 31. August 2012) 

! 


!! Name! #!of!shares,!m! %!ownership! 

1! Erik!Pinnås! 4.93! 11.1%! 

2! Glaamene!Industrier! 4.18! 9.4%! 

3! Skagen!Vekst!og!Skagen!vekst!III! 4.00! 9.0%! 

4! Strømstangen! 3.93! 8.9%! 

5! Barclays!Capital!Sec! 2.00! 4.5%! 

6! SEB! 1.87! 4.2%! 

7! Avanza!Bank! 1.68! 3.8%! 

8! Nordnet!Bank! 1.58! 3.6%! 

9! Georg!Zetterberg! 1.49! 3.4%! 

10! Dyvi!Capital! 1.18! 2.7%! 

11! Waaler,!Jørgen! 0.91! 2.1%! 

12! Gresslien,!Odd!Roar! 0.84! 1.9%! 

13! Delta!Invest! 0.78! 1.8%! 

14! Swedbank! 0.69! 1.6%! 

15! V.!Eiendom! 0.69! 1.6%! 

16! PSI!Group! 0.67! 1.5%! 

17! Ring,!Jan! 0.62! 1.4%! 

18! Nordea!Securities! 0.45! 1.0%! 

19! Jacobsen,!Svein! 0.45! 1.0%! 

20! Isaksen,!Nils-Olav! 0.35! 0.8%! 

21! Nistad!Gruppen! 0.34! 0.8%! 

22! SHB!Stockholm!Clients!Account! 0.33! 0.7%! 

23! Frankmo,!Åge! 0.31! 0.7%! 

24! Fana!Elektrikeren! 0.25! 0.6%! 

25! MP!Pensjon!! 0.24! 0.5%! 

!! TOTAL& 34.77& 78.3%! 

Key upcoming investor dates 

PRIMARY 

26. October 2012: 0815 CET+1. 3 rd Quarter 2012 Release 

SECONDARY 

12. November 2012; Wincor Nixdorf Preliminary figures for FY 2011/2012 

20.September 2012; Gunnebo Capital Markets Day 

25. October 2012: Gunnebo 3 rd Quarter 2012 Release 

29. October 2012: Pricer 3 rd Quarter 2012 Release 

36!

! 


! 


ABOUT INDEP RESEARCH 

Indep!Research!LTD!is!an!independent,!in-depth!provider!of!equity!research!to!both!institutional-! 

and!private!investors.!Our!company!analysis!incorporates!all!the!essential!information!investors! 

require!in!order!to!make!informed!investment!decisions.!Based!upon!a!strong!emphasis!on! 

market!research!with!quantitive!scrutiny,!Indep!Research!offers!an!extensive!and!alternative! 

investment!approach.!! 

Indep Research: Independent. In-depth. 

Our research framework 

Indep Research’s equity research is conducted in a manner such that it comes with three different 

recommendations. These are: “Buy”, “Hold” and “Sell”. 

Buy: The analyst expects the share to outperform its relevant benchmark index (OSEBX, OSESX 

etc and its peer group. 

Sell: The analyst expects the share to underperform its relevant benchmark index- and peer group. 

Hold: The analyst sees no compelling investment rationale for a Buy- nor a Sell recommendation. 

The Seven INDEP multiples 

P/E 

Market Value per share/ Annual earnings per share (EPS) 

P/BV 

Market value per share/ equity value per share 

EV/S 

Company market value + Net Interest bearing debt (NIBD)/ Annual sales 

EV/EBITDA 

Enterprise Value/Earnings before Interest Taxes Depreciation Amortisation 

NIBD/EBITDA 

Net Interest bearing debt/Earnings Before Interest Taxes Depreciation Amortisation 

Debt/Equity 

Interest bearing debt/goodwill-adjusted equity 

ROIC 

NOPLAT (Net Operating Profit Less Adjusted Taxes) / Invested Capital (Intangible assets + Net Working Capital) 

37!

! 


Disclaimer 

! 


The particulars contained herein were obtained from sources which we believe to be 

reliable but are not guaranteed by us and may be incomplete. The particulars are not a 

complete analysis of every material fact respecting any company, industry, or security. 

The opinions expressed are based upon our analysis and interpretation of these particulars 

and are not to be construed as a solicitation or offer to buy or sell the securities mentioned 

herein. The opinions expressed here therefore reflect the judgment of the research 

analyst(s) at this date and are subject to change. 

Indep Research LTD makes no guarantee, representation or warranty as to the accuracy or 

completeness of the particulars. 

No part of the research analyst's compensation was, is, or will be, directly or indirectly, 

related to the specific recommendations or views expressed by the research analyst(s) in 

this equity research report. 

The analyst does not own any shares directly or indirectly (or any derivative thereof) of 

the company that is subject to this research report. The analyst or member of the analyst’s 

household does not serve as officer, director or advisory board member of the company 

that is subject to this research report. 

These materials may not be reproduced, distributed or published by any recipient for any 

purpose. Please cite source when quoting. 

38!

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