Loomis

Annual and Sustainability Report 2020

Loomis improves flows of payments in society

Countless transactions take place in payment flows in society every day – when we shop for groceries, pay our bills, get change or order products on line. Even as the use of digital payment solutions grows, cash is still the world's most common payment method. Loomis makes sure that cash circulates quickly, cost-effectively and

securely – in local communities and across national borders. We offer distribution, processing, storage and recycling. In 2020 we launched Loomis Pay, a unique payment platform that enhances our traditional core business. Loomis Pay handles all payment types – cash, card or digital alternatives. Loomis's customers are mainly banks and large

and small merchants. Our success is based on customer trust, knowledgeable employees, high safety and sustainable processes. The health and safety of our customers and colleagues, alongside with the environment, is always our top priority. Sustainability is an integral part of day-to-day operations in all of our 23 markets.

All page references are clickable.

Introduction About Loomis 4

President's statement 6

Strategy

Trends and drivers 9 Strategy 10 Targets 2021 15

Operations

Business model 18 Offering 20 Sustainability 26 Employer responsibility 28
Risk management 31
The share 33

Corporate Governance Report
Corporate governance	36
The Board of Directors' Report on Internal Control and
Risk Management	43
Board of Directors	49
Group Management	51
Signatures and auditor's statement	53
Sustainability Report
Process and strategy	55

Sustainability governance	57
Method and materiality analysis	71
KPI Summary and Key Ratios	73
GRI Index	79
Signatures and auditor's statement	81

Financial statements

Administration Report	83
Financial statements	88
Notes	95
Auditor's Report	130
Five-year overview	135
Alternative performance measures	136
Definitions	139
Notice of Annual General Meeting	140

Explanation and reconciliation of alternative key figures in this report can be found on pages 136–138.

2021 dates

Loomis's Annual General Meeting 2021 will take place on May 6. >Read more on page 140.

Interim Report Jan – March	May 6, 2021
Interim Report Jan – June	July 23, 2021
Interim Report Jan – Sep	November 3, 2021

About this report

The formal annual report is presented on pages 83–129. Sustainability is integrated into the Group's operations and the statutory Sustainability Report, including the GRI Index, is presented on pages 54–81.

This is a translation of the original Swedish Annual Report. In the event of differences between the English translation and the Swedish original, the Swedish Annual Report shall prevail.

Unless otherwise specified, Loomis's internal research and studies have been used.

Photography/images: Maria Lindvall, Staffan Flodquist, Micke Lundström, Olof Holdar, Xos, Harri Welling, Álvaro Benítez Alvez, Mascot and Johner.

The year in figures

International valuables logistics (Valuables in Storage, VIS, Valuables in Transit VIT), 6% Internationell värdehantering, 6%

Other, 3%

Cash in transit (CIT)

Cash Management Systems (CMS)

SafePoint International Valuables Logistics (VIT/VIS) ATMs Loomis Pay

Kontanthantering, 30%

Övrigt, 3%

*Includes revenue from SafePoint, which in Loomis's accounts is split between CIT and CMS.

Hundreds of thousands customer visits each week

Cash is the world's most common payment method and the amount of cash in circulation is increasing in the majority of countries. Loomis provides cash in transit and cash management services in 23 markets and with few exceptions we are the leading provider in all of them. Loomis has hundreds of thousands customers who we visit on a weekly basis.

Sustained strong outsourcing trend

One of the most important drivers of Loomis's growth and improved profitability over many years is the trend among banks to outsource more and more of their advanced cash management processes. This remains a strong engine of development. Loomis is constantly developing new solutions to meet the growing needs of the customers. Recently Loomis launched an ATM service concept, a business stream that is expected to bring in annual revenue of SEK 2 billion within five years. Managing physical currency is another growth area expected to generate annual revenue of SEK 1 billion within three years. Retailers are also outsourcing their cash management processes. Loomis has met the industry's desire for a simpler and safer way to manage cash through SafePoint – a smart, automated and cost-effective solution for cash management. SafePoint is a strong and growing business stream.

Acquisitions to strengthen Loomis's geographic and technology footprint

The payment market is rapidly changing and consolidating. With its strong financials, Loomis is well-positioned to implement value-generating acquisitions. Our intention is to grow the core business in existing and selected growth markets, and to seize buisiness opportunities offered by new technology helping us advance further up in the customers' value chain. Loomis's global ATM service offering and SafePoint, a comprehensive solution developed by Loomis for retailers, are two such value-generating examples.

Increased digitalization

The transition in the payment market continues and the use of digital payment solutions in particular is growing significantly. This is presenting a complex and costly situation for retailers and restaurants – a situation that requires many different solutions, technical systems and suppliers in order to meet the various needs and wishes of customers. Loomis's strategy addresses this trend. By combining traditional, automated and digital business models, we are able to add multiple smart and cost-effective services to those we already offer. We are simplifying cash management for retailers and we facilitate solutions enabling banks to focus on their core business.

Loomis Pay handles all payments for retailers

Our latest business development success is Loomis Pay. This complete end-to-end payment platform enables retailers to handle all customer payment preferences – from cash and cards to digital alternatives. Loomis Pay is unique in its kind and provides an enhancement to Loomis's traditional CIT and CMS business. The primary target group is small and medium-sized retailers. Loomis currently has CIT and CMS service agreements with around 85,000 merchants in the Nordic markets alone. In 2020 Loomis Pay was launched in Denmark and the plan now is to roll out the concept in additional markets. The initial target is net sales exceeding SEK 3 billion within five years with an attractive operating margin.

Loomis is well-positioned for new advances

Loomis' cash and valuables handing business is fundamentally stable. We are the leading provider in most of our markets, where we have long-term relationships with banks and retailers. Loomis's ability to handle both cash and digital payments is unique. By combining traditional, automated and digital payment solutions, we can handle and simplify more and more parts of our customers' cash handling processes. Loomis is at the center of the payment flow and we are well-positioned to meet future changes in the payment market.

Our customers are always in focus and we make hundreds of thousands of customer visits every week.

The pandemic is affecting Loomis's financial targets

Since the Company was listed on the stock exchange in 2008, Loomis has constantly met or exceeded its financial targets. This has in large part been possible thanks to continual development of the offering, quality improvements and a clear focus on efficiency and cost control. The coronavirus pandemic has presented challenges and has in general had a significantly negative impact on both revenue and operating income. We have therefore concluded that, for the first time we will, most likely, not reach the revenue target we have communicated, which for 2021 was SEK 24 billion, nor the previously communicated operating margin of 12–14 percent. Loomis has decided to remove these two targets. Our dividend target of 40–60 percent income after tax, which for 2020 is in line with the proposed dividend of SEK 6 per share, remains in place.

"Our robust business model and strong team have once again proven themselves this past year."

Patrik Andersson, President and CEO

Resilience tested in an exceptional market

The pandemic placed enormous pressure on individuals, communities and economies all around the world in 2020. It was also a challenging year for Loomis and resulted in a loss of revenue. Still, we can look back on a year in which we strengthened our position in many markets, took new strategic initiatives and achieved stable profits. Our robust business model and strong team have once again proven themselves.

2020 was largely characterized by the pandemic. Our primary focus has and will continue to be ensuring the health and safety of our customers and employees. A top priority has been finding local solutions to follow various and, over time, changing recommendations and restrictions issued by authorities, while at the same time maintaining the high level of service we provide to our customers.

All branches operational during the pandemic

Looking back we can be proud of the fact that all of our branches – 400 of them in 23 markets – remained in operation every single day of 2020. I can draw two important conclusions from what we experienced last year. First, our strong decentralized and flexible business model – the Loomis Model – once again revealed its resilience. Circumstances may determine which decisions are made at the local level, but those decisions are always based on our firmly rooted core principles. Efficient and smart solutions to new challenges somewhere in our organization spread quickly over national borders, providing inspiration for others. Second, we know that loyalty is tested in tough times, and the ambition and commitment I have seen throughout our organization is truly impressive. It is a pleasure to lead "Team Loomis."

Stable profits in an exceptionally challenging market

The pandemic is also reflected in our numbers. Revenue in 2020 was SEK 18.8 billion compared with SEK 21.0 billion in 2019. The situation over the past year was not a favorable one for new business transactions or acquisitions. Despite this, we were able to sign the single largest SafePoint contract in the Company's history – a five-year contract with one of our many customers in the USA. We also carried out a number of acquisitions. One of them was Automatia, which provides us with a technical platform for ATMs and will enable us to expand in a strategically important area in multiple markets.

Profitability – our EBITA margin – landed at 9.4 percent in 2020 (2019: 12.4 percent). The pandemic is in general

Contents About Loomis President's statement

having more of a negative impact on our European operations than in the USA. Smaller retailers and restaurants – which make up a larger percentage of our European customer portfolio – are among the hardest hit. In the USA, bigger retail customers and financial institutions make up a larger proportion of our revenue, which is why our operating margin in the USA is 15.7 percent compared with 6.0 percent in Europe. The strong outcomes in the USA are primarily explained by a more profitable customer portfolio, higher SafePoint revenue, increased ATM volumes and the efficiency improvement programs implemented.

Cost-saving actions have yielded good results over time. The restructuring programs initiated in several European markets in 2020 are progressing according to plan and we expect them to be concluded in the second quarter of 2021. The most significant restructuring is taking place within our UK operations. The actions we are taking will help improve efficiency and raise our operating margin.

Advancing up the customer value chain

It is uncertain how the pandemic will impact the various parts of our business going forward. We do not know how quickly vaccination programs and other measures will have the desired effect on economic activity. This is crucial for the development of the number of payments in society. But there is no reason to believe that the strong outsourcing trend among banks and retailers – one of the most important drivers of our business – will slow down.

Quite the opposite. We have now entered the final year of our current strategy period and I can confirm that progress on all of our strategic objectives has been good. The payment market is rapidly changing and Loomis is positioned at the center of the flow between banks and retailers. We have contracts with customers that have been in place for many years; we visit them constantly and their trust in us is solid. By combining traditional, automated and digital payment solutions, we can simplify and improve additional areas of our customers' processes for cash handling and payments. Loomis is well-positioned to grow the business as opportunities offered by changes in the payment market present themselves.

Loomis has a strong financial position and our acquisitions will continue. We will grow our core business in existing and new markets and bring in new technology and competence, allowing us to add new services higher up the customer value chain.

Well-positioned in a transitioning market

Business development is on top of the agenda and the efforts are accelerating. I would in particular like to draw attention to Loomis Pay – a complete end-to end payment platform for retailers and restaurants. Loomis Pay enables business owners to handle all of their customers' preferred payment methods – from cash and card to various digital alternatives. Loomis Pay was launched in Denmark in 2020, and the intention is that more markets will follow. Loomis Pay is a great illustration of the opportunities ahead of us. Loomis is at the center of the payment flow and our customers' day-to-day operations. Our capacity to handle both cash and digital payments is unique, and enables us to add services to improve payment efficiency for both retailers and banks.

Loomis's sustainability work continues to make progress. Our emissions of carbon dioxide have decreased in relative terms by 8 percent, in absolute numbers significantly more as a result of the pandemic. The company's plastic use decreased by 19 percent compared with the base year 2017. Our proactive work for safer driving also leads to significantly fewer occupational accidents year after year.

2021 is the final year of the current strategy period. We will present an updated strategy before the end of this year and the new strategy period will begin 2022. I am excited and optimistic about implementing the strategy with all of my Loomis colleagues who, this past year, have shown resilience when it was needed the most. In conclusion, I would like to thank all of our customers, shareholders and other stakeholders for the trust you have shown in us.

Patrik Andersson

President and CEO, Stockholm, March 25, 2021

Trends and drivers

Loomis is witnessing how comprehensive solutions based on automated payment flows, digitalization and increased outsourcing continue to define the payment market. By constantly monitoring the payment market's trends and drivers, Loomis maintains its understanding of customers' needs.

1. More and more actors choosing to outsource cash management

Cash is the world's most common payment method and in most global markets demand for cash is increasing. Simultaneously, the use of digital solutions is growing rapidly. For several years now more and more banks and retailers have been outsourcing their cash management processes to a few larger providers such as Loomis. This is also creating significant economies of scale and increasing cash management specialization. Although the outsourcing trend is the strongest in the USA, many European countries are also in an early phase, and this is opening up a wealth of opportunities for Loomis in multiple markets.

2. Automated payment solutions increasingly common Automated solutions create seamless payment flows with fewer manual functions. Having a single cash management system, such as Loomis's SafePoint, can improve efficiency in processes like cash counting, verification and collection, and combine them with immediate processing and payment. In the past these processes were managed separately, often resulting in longer lead times. Going forward we will see more and more fully automated parts of the cash and payment flows.

3. Digital transformation of the payment market Digitalization is paving the way for new payment solutions and new actors. Tougher competition is affecting revenue models and cost structures, while also putting more pressure on today's businesses to offer integrated payment solutions and new routines. Launched in 2020, Loomis Pay is a unique payment solution for cash, cards and digital alternatives, and is a great illustration of the strength of Loomis's position at the center of the payment flow. Digitalization opportunities also exist throughout Loomis's broad product offering. The digitalization trend is currently the strongest in the Scandinavian markets, while the euro area, Latin America and the USA are still in an early phase.

4. AI is increasing payment flow security Development in machine learning and artificial intelligence (AI) is quickly advancing and these technologies are being used in many different ways by companies and individuals. In the payment markets this type of fintech is creating new opportunities, particularly in security and flow management. For example, AI makes it easier to monitor payment patterns and transactions, to identify suspected fraud, and to review and forecast cash flows in realtime. This also offers great potential for Loomis's in product development.

5. Increased diversification requires new standards and rules

The combination of increased globalization and a more diverse range of payment solutions is increasing the need for new standards and rules to control the flow of money and protect customers. In the future, public and private actors are expected to agree on more global industry standards to control payment processes, prevent money laundering and international crime, and mitigate transaction risk. For example, the EU payment service directive PSD2 and the fifth EU anti-money laundering directive both entered into force in 2018. In order to offer payment solutions at both the national and international levels, regulatory knowledge is essential and this works in the favor of providers like Loomis.

6. Future actors need new expertise and broader recruitment

Developments in the payment market are changing the ways actors operate and deliver services. This is presenting new challenges to ensure that they have the right expertise in digital solutions and IT. In addition to recruiting new talent, Loomis has increased the professional development opportunities offered to existing personnel. There is also a program to strengthen leadership within the organization and to be an attractive employee that can compete for talent.

Progress despite a challenging market

Loomis's current strategy period, 2018 to 2021, has a clear focus on increased growth and profitability. Outcomes at the beginning of 2020 were on track, but due to the significant challenges presented by the pandemic, Loomis determined that the 2021 revenue and operating margin targets would, most likely, not be reached and these targets have now been removed. But despite the pandemic, Loomis was able to make new acquisitions and launch a brand new business area to help propel the Company higher up the value chain.

Trends and drivers Strategy Targets 2021

The strategy is based on five pillars

1 Accelerate the core business

The cash and valuables markets are growing in pace with economic growth. Banks and retailers are also increasingly willing to outsource more and more advanced processes to providers like Loomis to improve cost efficiency and security. Cash in transit is usually outsourced first, followed by other aspects of cash management and adjacent processes. This creates good opportunities for Loomis to boost its core business, and the potential for increased organic growth and improved margins.

2 Launch adjacent new services

A stronger core business combined with Loomis's strong position and relationships with its customers is paving the way to launch adjacent new services. The rollout of the Group's SafePoint concept over the past few years is a successful example. A service for buying and selling physical foreign currency is another. Development of new services and solutions for retail customers takes place for the most part at the Group's Center of Excellence in Houston, USA. The Center of Excellence in Madrid, Spain, is focusing on further developing the Cash in Transit and Cash Management Services offerings, standardized tools and processes, and sharing knowledge and best practice throughout the Group.

3 Move Loomis up in the value chain

Another core aspect of Loomis's strategy is a focus on moving up the customer value chain by combining traditional and digital business models. Innovation and technical development take place at the Group level, but in close cooperation with the rest of the organization and with input from customers as fuel. New products and services are tested in the market in pilot projects and the response from customers form the basis for evaluation and decisions on the next step. Loomis Pay is one such example. As the first market, Den-

Trends and drivers Strategy Targets 2021

mark received Loomis Pay in the autumn of 2020. This complete, end-to-end payment platform enables retailers to manage all types of payments – from cash and cards to digital alternatives. The offering is unique and would not have been possible without Loomis's stable core business, unique position at the center of the payment flow and frequent dialogue with our customers.

4 Strengthen Loomis's geographic and technology footprint

Loomis's strategy is also based on an assumption that market consolidation will continue and increase in the years ahead. This gives Loomis – with its strong financial position – good potential to make attractive acquisitions. The acquisition strategy is based on two criteria: 1) growing the Company's core business in existing markets and selected growth markets; 2) seizing business opportunities offered by new technology in mature markets. Loomis completed two important acquisitions in 2020: Automatia in Finland and Nokas Värdehantering in Sweden. The Automatia acquisition adds important know-how and will generate expansion opportunities in ATM markets. The Nokas Värdehantering acquisition in Sweden will expand the core business in Sweden.

5 Protect and build the Loomis way of working Continued development of the Loomis Model is also a priority to protect the key ingredients in the recipe for success and further raise operational quality. The Loomis Model is based on a highly decentralized organizational structure and gives substantial local responsibility to branch managers. There is a clear focus on measuring and evaluating business operations, and on sharing experience and acquired knowhow with others. The new strategy emphasizes the need to develop and encourage new capabilities and skills. Compliance is a top priority, and the Company's control systems ensure sound internal governance and control. Sustainability is integrated into the

Loomis Model and three sustainability targets are linked to the strategy period.

Loomis Pay and the acquisition of Automatia strengthen the Company's position

Loomis continued to develop in line with the strategy in 2020, making substantial advances further up the customers' value chain. The launch of Loomis Pay and the acquisition of Automatia in Finland are two important examples of that.

Loomis Pay breaks new ground

Loomis Pay is a complete end-to-end payment platform for merchants and manages all types of payments, including cash, card and other digital alternatives. The offering is primarily targeting small and medium-sized merchants and Loomis has presently CIT and CMS service agreements with approximately 85,000 merchants just in the Nordic markets alone.

Loomis Pay ambition: SEK 3 billion in five years

The ambition, in the first initial stage, is to achieve revenue, exceeding SEK 3 billion generating an attractive operating margin. Loomis Pay is expected to generate a positive operating result (EBITA) during 2023. During 2020–2022, investments will be made in product development and other activities for Loomis Pay.

Loomis expects approximately SEK 100 million per year will be recorded as net costs in the income statement through 2022.

The solution will bring numerous benefits for Loomis' customers by reducing the number of required payment suppliers and improve simplicity. For example, improved cash flow as the customers will have the opportunity to have the value deposited on the bank account quickly after the transaction has been processed. These lead-times can currently be long and expensive. Additionally, the merchant today needs to sign agreements with several suppliers to execute different types of payments, which Loomis Pay will solve by one contract for all payments. The merchant will also have better access to data, which increases visibility and will enable further growth opportunities for the merchant.

Loomis launched Loomis Pay in Denmark in 2020. The intention is to roll out the offering to additional markets thereafter. Considering the total costs a merchant today pays for digital payments, payment systems, CIT and CMS, Loomis Pay will be a cost efficient alternative.

"Loomis Pay is a unique, complete end-to-end service based on Loomis's existing infrastructure, considerable customer base and the high level of trust placed in us." Kristoffer Labuc, CEO Loomis Pay

A new ATM offering

In 2020 Loomis acquired Automatia which operates Finland's largest ATM business under the Otto brand and offers cash supply services to bank branches, service boxes for retail and a digital platform for real-time payments. The sellers were Danske Bank, Nordea and OP Financial Group.

The acquisition is a good example of when banks choose to outsource the entire cash management value chain. The transaction gives Loomis access to the Finnish cash ecosystem and thus manage all aspects of the flow of cash in society for the first time.

Unique about Automatia is its cost-effective, full-service structure, where central banks, banks, retailers and end-consumers are all linked in an integrated digital platform for realtime payments. The system optimizes the flow of cash throughout the value chain, encompassing all parts of the ecosystem. This includes the flow of cash from Automatia's cash inventory to end-consumers via ATMs, cash in transit services and cash centers.

ATM ambition: SEK 2 billion in five years

This acquisition gives Loomis access to important know-how in digital payments systems, including software and hardware. It also expands Loomis's knowledge base and experience in the operation and maintenance of ATMs. It strengthens Loomis's global ATM service concept, where the target is to achieve annual revenue of approximately SEK 2 billion in five years.

"Automatia's digital platform also gives us opportunities to develop a comprehensive service concept aimed at the whole of Europe." Harri Veijola, CEO Loomis Finland

Introduction	› Strategy		Operations	Corporate Governance Report	Sustainability Report	Financial statements
Trends and drivers	Strategy	Targets 2021

Financial targets

Revenue target

The revenue target for 2021 of SEK 24 billion was removed in November 2020

Comment: Due to the ongoing coronavirus pandemic, Loomis has determined that it is unlikely that the previously communicated revenue target will be met. As market conditions remain uncertain in 2021 due to the pandemic, Loomis has decided to remove the target.

Operating margin target

The operating margin target for 2021 of 12–14 percent was removed in February 2021

% Comment: Due to the ongoing coronavirus pandemic, Loomis has determined that it is unlikely that the previously communicated operating margin target will be met. As market conditions remain uncertain in 2021 due to the pandemic, Loomis has decided to remove the target.

Dividend target

Annual dividend in the range of 40–60% of income after tax

% Target Comment: The Board's dividend proposal for the 2021 Annual General Meeting is SEK 6.00 per share, which represents around 63 percent of income after tax for the year. The accumulated average dividend during the period 2017–2020 amounts to just over 43 percent.

>For more key ratios, refer to Loomis's Administration Report starting on page 83.

Sustainability targets

Workplace injuries target

Zero workplace injuries in 2021

Number of injuries Comment: In 2020, the number of injuries1) in traffic and/or as a result of external violence was 125, nine of which were from external violence and the remaining 116 were traffic-related injuries. The 2020 result represents a decrease of 33 percent compared to the previous year and shows a clear improvement in the largest markets. The pandemic has resulted in fewer kilometers driven on the roads and a generally calmer traffic situation. We are also seeing improvements linked to proactive steps taken to promote safer driving behavior – an initiative that continues.

Carbon emissions target

30% reduction in carbon emissions by 2021

Change, % Comment: Carbon emissions from Cash in Transit2) operations have decreased by 13 percent in total compared to the base year 2017. A significant portion of the absolute reduction is linked to fewer transport routes driven due to the pandemic. In relative numbers3) carbon emissions from Loomis's operations have been reduced by 8 percent. USA is the main driver of this positive trend as Loomis US has an increased share of fuel-efficient vehicles and a supply of HVO4) in California.

Plastic consumption target

30% reduction in plastic consumption by 2021 0

>For more key ratios, refer to Loomis's Sustainability Report starting on page 54.

tkg Comment: Loomis continued its efforts to reduce the Group's plastic consumption. The 2020 result represents a decrease of 19 percent compared with the base year 2017. The main driver of this progress is the European operations where a total reduction of 24 percent was achieved. The outcome for Segment Europe was slightly lower than the previous year when the reduction was 29 percent due to the fact that security bags used in 2019 came partly from existing stocks. This resulted in the need for higher purchasing volumes in 2020.

1) Workplace injury due to a traffic incident and/or violence that led to absence from work the following day. 2) Scope 1 emissions.

3) Co2 per kilometer driven.

4) Stands for hydrogenated vegetable oil and is a renewable fuel for diesel engines. It can be described as a chemical copy of regular fossil diesel.

› Introduction Strategy › Operations Corporate Governance Report Sustainability Report Financial statements

Operations

› Business model 18		› Employer responsibility	28
› Offering	20	› Risk management	31
› Sustainability	26	› The share	33

The Loomis Model – a business model that delivers results

A high level of decentralization requires a clear and simple business model that is built on strong principles and emphasizes measurement and evaluation of operations. Above all, the Loomis Model is a valuable asset because it ensures that know-how and experience is shared within the Group and when new businesses or new employees join the Group. The Model provides synergies and facilitates successful operational management of the more than 400 branches in 23 markets.

The Loomis Model components

Three core values

Loomis operates its business based on its three common core values:

• People: We are committed to developing quality people and treating everyone with respect.
Service: We strive for exceptional quality, innovative capacity, adding value and exceeding customer expectations.
Integrity: We perform with honesty and vigilance while adhering to high ethical and moral standards.

Code of Conduct

The Company's Code of Conduct provides ethical and value-based guidance for all of Loomis's employees and helps to ensure compliance with rules. The core values promote a culture of mutual trust based on integrity and respect to reduce the risk of unethical behavior and irregularities. The Code is the foundation for consistency in the way our people treat each other and our external partners. It is also incorporated into Loomis's mandatory employee training which all, just over 23,000, employees undergo.

Sustainability

Loomis's role as one of the world's leading cash handling companies requires sustainable and longterm corporate responsibility. Creating lasting value for customers, employees and shareholders – today and in the future – is a key aspect of that responsibility. Sustainability is built into the Loomis Model. >Read more on page 26.

Six strategic business processes

The Loomis Model is supported by six strategic business processes and the Company's various operations are the core of the business. Loomis's operations are further supported by processes for risk management, finance, sales and marketing, human resources and innovation.

Guiding principles

The Loomis Model has ten guiding principles that are key to how the Company is managed. They include guidelines on how to formulate business targets, transfer knowledge on an ongoing basis, and measure and follow up progress. The principles provide the foundation for a healthy and cost-aware organization that focuses on delivering high quality and good profitability. Loomis is a competitive organization and encourages comparisons between its branches. Loomis believes what gets measured gets done.

Customer focus

At the top of the Model is customer focus. For Loomis this is above all about understanding the customers and listening carefully to their needs – now and in the future. Listening actively to the customers enables Loomis to develop better solutions and new business models in traditional operations, and to explore new opportunities and services. To achieve a strong understanding of customer needs, Loomis regularly conducts customer surveys.

A comprehensive offering in payment solutions

Loomis has a strong foundation in secure and effective, comprehensive solutions for the distribution, management and recycling of cash and other valuables. As the payment market develops new products are added to handle all types of payment transactions – cash, card and digital solutions.

Cash in Transit (CIT)

Every day Loomis cash in transit vehicles transport cash to and from stores, banks and automatic teller machines (ATMs). Loomis collects, among other things, daily receipts, supplies retailers and banks with change and foreign currency. Carefully planning routes and the number of stops on a route enables Loomis to maintain high operational efficiency. Loomis's cash in transit teams work according to carefully constructed routines to minimize risks associated with transporting cash, and have vehicles and equipment that provide maximum safety and security. The CIT offering is often included as an integral part of Loomis's other services. For example SafePoint and ATM management.

Summary of 2020

• Due to the coronavirus pandemic large parts of society were periodically shut down in 2020. This affected many of Loomis's customers in both the European and US segments. The CIT business lost volumes.

Cash Management Services (CMS)

Daily receipts and cash are normally transported from retailers, bank branches and ATMs to one of Loomis's cash centers. There, through efficient processes, Loomis employees count, quality assure, package and store notes and coins. Loomis also provides services for analysis, forecasting and reporting of customer cash flows, as well as customized solutions for retailers (>see SafePoint on page 21). Loomis's CMS offering is often an integral part of Loomis' other services.

Summary of 2020

Overall, cash management volumes were lower in 2020 in both the European and US segments due to lower retail activity. The pandemic has reduced the number of transactions and cash deposits.
The USA also experienced a coin shortage during the pandemic, partly due to a change in consumption patterns, and partly to the government slowing down coin production. The coin shortage negatively affected the CMS business in USA.

SafePoint

SafePoint is a comprehensive solution developed by Loomis for the retail market. The customer deposits cash receipts on an ongoing basis in the secure unit, where the cash is registered and safely stored until it is collected by Loomis's cash in transit teams. The customer's bank account is credited no later than the day after the deposit is made in the SafePoint unit. In addition to faster access to working capital, the SafePoint concept provides significant cost savings and efficiency improvements for users, while also improving employee safety. The SafePoint offering is constantly being developed and now includes a comprehensive cash recycler solution incorporating cash withdrawals and deposits, known as "recyclers".

Summary of 2020

Product development of the SafePoint offering continued within Segment Europe and more sophisticated solutions, such as cash recyclers, have emerged from it. In 2020 Loomis Europe also made development advances in common systems to offer integrated products for SafePoint and ATMs. Customer demand for these products is growing. Due to the pandemic and the associated lockdowns and closures, revenue from Europe's SafePoint business fell in 2020.
The typical SafePoint customer in Segment USA is either a restaurant, a convenience store or a gas station. In 2020 SafePoint business represented close to one fifth of Segment USA's total revenue. This means that in Segment USA a larger percentage of our revenue is based on fixed monthly fees than is the case in Segment Europe. SafePoint growth was good in the USA in 2020 despite the ongoing pandemic.

ATMs

Loomis's ATM offering covers all aspects of replenishment and maintenance of ATMs. This includes safe cash in transit and cash management services, as well as forecasting and monitoring, service and maintenance, and transaction-related services. The services are for all types of ATMs – both those providing traditional cash withdrawals and new solutions that include cash deposits and recycling. The ATMs can provide both local and foreign currency. More banks and types of cards can be linked to the same ATM. Loomis offers state-of-the-art technology and can provide customers with full insight, as well as verification and monitoring functions.

Summary of 2020

• The ATM business has developed well in both the European and US segments. The social distancing requirement during the pandemic – both for customers and bank personnel – resulted in bank branches closing and increased use of bank ATMs, which were outsourced to external providers to a greater extent than before. Loomis's employees, who have good protective equipment and safety procedures, were able to handle the increased demand and this had a positive impact on Loomis's revenue.

› Introduction Strategy		› Operations		Corporate Governance Report	Sustainability Report	Financial statements
Business model	Offering	Sustainability	Employer responsibility	Risk management	The share

International valuables logistics (Valuables in Transit, VIT, Valuables in Storage, VIS)

Loomis International transports, manages and stores cash, precious metals and other valuables, such as watches, jewelry and credit cards. Loomis organizes the entire chain by collecting the valuables, providing cross-border transportation including customs clearance assistance and temporary or long-term storage, before finally delivering the valuables to the end-recipient. In addition to the countries where Loomis has a national presence, the Company has a global network of agents and partners in other countries.

Summary of 2020

Segment Europe experienced a sharp decline in business when the travel industry and economic activity slowed significantly due to the pandemic. Meanwhile, revenue from precious metal storage increased and partly compensated for the decline in transport operations.
In Segment USA sales from international valuables logistics (VIS and VIT) in 2020 were on par with the previous year, although the revenue streams changed when international travel decreased. Higher precious metal prices contributed to strong growth in storage operations, making it possible to maintain sales levels.

Physical foreign currency (FX)

In its role as wholesaler, Loomis meets the FX buying and selling needs of its customers and ultimately the end-consumers. The solutions are adapted to each respective market. In some countries local bank branches still play an important role in providing currency exchange services, while in other markets ATMs are increasingly the primary delivery channel for currency. Loomis's FX ATMs are available at, for example, airports and are supplemented by online services.

Summary of 2020

2020 has been a challenging year for Loomis Europe's FX operations. Business came to a standstill as tourism and business travel slowed down significantly when the pandemic took hold at the end of the first quarter. When some travel restrictions were lifted during the summer, FX operations recovered to some extent and this raised confidence in FX as a strong offering in general.
Demand for physical foreign currency is low in the USA due to the dominant US dollar. FX operations therefore account for a very small portion of the segment's total revenue. As in large parts of the rest of the world, travel restrictions were imposed in the USA and this resulted in lower volumes in 2020.

Loomis Pay

Loomis Pay is a complete end-to-end payment platform for merchants and manages all types of payments, including cash, card and other digital alternatives. This cloudbased platform consists of a mobile or stationary payment device and a portal that provides customers with sales data and other information. Loomis's existing CMS, CIT and SafePoint offerings complement Loomis Pay and manage the customers' ongoing cash flows.

Summary of 2020

• Launched in Denmark in 2020, Loomis Pay received a positive response. Customers appreciate the simplicity of fewer points of contact, less administrative work, and fewer systems and support issues to deal with. It also provides important cost savings and allows customers to focus on their core business.

Copenhagen Downtown Hostel

Loomis Pay's many benefits

One of the first Loomis Pay customers is Copenhagen Downtown Hostel, an award-winning hostel in central Copenhagen with 345 beds. The hostel serves food and beverages in its bar and the reception is open around the clock.

Copenhagen Downtown Hostel has been using Loomis Pay's platform since autumn 2020. The staff have access to six handheld payment devices that make it easier to take payments. The benefits go beyond increased mobility to include the ability to accept the preferred payment method of all hostel guests. The Loomis Pay portal integrates sales and payments in one and the same process, and data is gathered in reports and for analysis. The hostel also has a SafePoint unit installed for safe storage of cash and the unit is serviced by Loomis Denmark's cash management service.

Jesper Elkjær Hansen, founder Copenhagen Downtown Hostel

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About Segment Europe Key ratios

0 3,000 6,000 9,000 12,000

In addition to operations in 14 European countries*, Segment Europe includes Argentina, Chile and Turkey, as well as Loomis International's operations in Hong Kong, Dubai, Shanghai and Singapore. Loomis holds a strong position in Europe, where the Group is number one or two in the markets, in most of the countries, where the Company operates. Most of the customers are retailers and credit institutions.

"The pandemic has presented opportunities to further streamline the customers' own processes and demand for outsourcing cash management to specialists has increased." Georges López Periago, Regional President Europe

* Austria, Belgium, Denmark, Finland, France, Germany, Norway, Portugal, Slovakia, Spain, Sweden, Switzerland, the Czech Republic and the United Kingdom.

1) Allocation of Segment International's data is reflected in the outcomes for 2018 and 2019.

Data for 2017 and 2018 is updated to include volumes from Loomis International's operations. Recently acquired companies are not included in the results.

>For more key ratios, refer to Loomis's Administration Report on pages 83-129. >See also the Group's Sustainability Report on pages 54-81.

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About Segment USA Key ratios

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With around 30 percent of the market, Loomis is one of the market leaders in cash handling in the USA. Loomis operates across the continental USA , including Alaska, Hawaii and Puerto Rico. The customer base consists of financial institutions and retail. Loomis USA works with all of the major banks and primarily with medium and large retailers.

"It makes me very proud that all of our branches managed to keep operating and meet their financial commitments, despite all of the challenges and distractions brought about by covid-19."

Aritz Larrea Uribiarte, Regional President USA

Data for 2017 and 2018 are updated to include volumes from Loomis International's operations. Recently acquired companies are not included in the results.

>For more key ratios, refer to Loomis's Administration Report on pages 83-129. >See also the Group's Sustainability Report on pages 54-81.

Loomis's sustainability work

Loomis's sustainability work is based on a platform with six focus areas and addresses responsibility for employees, the environment, safety and ethical behavior. Sustainability is built into the Loomis Model. Three targets are linked to the 2018–2021 strategy period. Sustainability performance is monitored on an ongoing basis and outcomes are reported regularly to the Board and in the Annual Report.

Focus on employees, safety and the environment

The Group's sustainability platform was produced in 2017 and integrated into the business model in 2018. It was designed based on dialogue with the Company's stakeholders and on analysis of material aspects with relevant links to the Company's operations. A key element is responsibility for our employees, safety, the environment and ensuring ethical behavior. This is summed up in six focus areas (see illustration). Three goals are linked to the current strategy period ending 2021: zero injuries in traffic and from external violence, reducing carbon emissions by 30 percent and

reducing plastics by 30 percent. The other focus areas have no specific end date.

Progress in 2020 on three sustainability targets

Zero injuries in traffic or from external violence in 2021

The long-term vision – zero workplace injuries – is directly linked to Loomis's important responsibility for employee safety when they perform duties that are sometimes associated with risk while transporting the customers' cash and valuables. In the current strategy period there is added emphasis on the target of zero employee injuries in traffic or due to external violence. We are aware of how difficult it is to reach this target, but we are making targeted efforts to emphasize safety, improve knowledge and awareness, and educate drivers in safer driving. Thankfully, the results for 2020 were better than the base year 2017, with a total of 125 injuries, 116 of which were traffic-related. We believe that the 2020 results were improved by internal initiatives and to some extent also by lower volumes due to the

coronavirus pandemic. One good example of a safer driving initiative is the specialized software that provides drivers with information on their driving behavior. The software is installed in 68 percent of the Group's CIT vehicles, compared to 20 percent in the base year 2017.

-30 percent carbon emissions in 2021 Reducing carbon emissions is a key aspect

of Loomis's environmental responsibility. We want to decouple1) growth from increased environmental impact and we are pursuing a long-term transition to greener transport alternatives to reduce emissions. Our strategy to grow and advance up the value chain is one example of decoupling. New services and products like Loomis Pay are growing the business without increasing emissions. To reduce our current environmental impact, a process of conversion is under way to increase carbon efficiency. SafePoint is a good example of new technology that provides improved resource and carbon efficiency. Conversion is also taking place within our vehicle fleet to make it less carbon intensive and more fuel efficient.

We will see some short-term gains, but most will be achieved over the longer term. Diversification of the vehicle fleet is a long-term effort. Older vehicles are being replaced with lighter-weight and more fuel-efficient vehicles where safety and regulatory aspects permit.

One solution to quickly reduce emissions is replacing fossil diesel with renewable HVO fuel. Loomis in Sweden will fully transition to HVO100 in 2021. In other countries this is not yet possible due to a shortage of the fuel. However, we are encouraged by the news that Loomis US has secured a supply of HVO in California, equivalent to the fuel requirement of around 7 percent of the US vehicle fleet. Other important progress, also in USA, is in the form of a successful pilot project with a customized, armored and fully electric vehicle, weighing around 13 tons with a full load. Thanks to this project, more electric vehicles can now be ordered. In 2021, a total of 22 new vehicles are expected to be delivered in USA. The US operations are also converting their fleet to lighter-weight vehicles. Right now lighter vehicles make up 24 percent, compared with 15 percent in 2019. Similar initiatives are under way in Europe.

13 percent lower carbon emissions since the base year 2017

In 2020 new electric vehicle manufacturers entered the market, and established producers launched new models. Market trends indicate that the specific range, load and safety criteria that Loomis needs for its vehicles will likely be met in the near future. Overall, the

2020 results show that we have reduced our carbon footprint within Cash in Transit by a total of 13 percent and 8 percent per kilometers driven.

-30 percent plastic consumption by 2021 Cash is stored and transported in plastic security bags. To reduce Loomis's plastic volumes, Segment Europe signed a new framework agreement in 2019 for security bag production. This has reduced the number of sizes and formats from 106 to 11. The volume reduction for 2020 was 19 percent compared to the base year 2017.

The reduction was smaller than expected because several markets were using bags from 2019 inventory. But the majority of security bags are now made from recycled plastic, and 100 percent of the production impact is subject to carbon offsetting. Producing the bags from recycled materials is a success because it reduces the consumption of virgin plastics by the same amount, 30 percent. This is a significant step for Loomis and the environment toward increased resource efficiency. It is therefore very encouraging that at the end of 2020 Loomis USA succeeded in finding a security bag manufacturer that can deliver the security aspects with more recycled plastics. The transition to 80 percent recycled materials is expected to be complete in 2021. >Read more in the Sustainability Report on pages 54–81.

The right skills and leadership support Loomis's strategy

After an eventful 2020 Loomis can report that the Company's strategy and business model are still a success. Supported by an expanded offering that meets customer needs, Loomis's managers and employees play an important role in fulfilling the strategy commitments. Having the right skills in every role is key, as is ensuring that Loomis's values are firmly rooted in the culture.

Three strategic areas of responsibility

Loomis's focus as an employer can be summarized in three strategic and closely interlinked areas of responsibility: continued investment in the common core values; increased investment in professional development for managers and employees; and greater knowledge transfer between countries. In 2020 a number of activities took place to support development in these areas.

The Loomis Model creates common core values

For a number of years now Loomis's business model, the Loomis Model, has been developed and refined. Today it is an important tool for both current and new employees. In addition to containing group-wide routines and guidelines for how the business is to be run, the Loomis Model describes the common core values for all just over 23,000 employees. Having strong core values makes it easier to enter new geographical markets and business areas. They are also important to include in recruitment contexts and orientation of new

employees. All employees can access the Model through a digital portal.

Group-wide professional development

Loomis prioritizes having the right talent in the right place within the organization. As the Company advances strategically up the value chain, new skills and capabilities are required. A process of reviewing talent and skills within the organization continued in 2020. By expanding the business, reorganizing, recruiting and making acquisitions, Loomis has added leading-edge digital expertise and reinforced leadership within the Company.

"Loomis Academy gives us a platform with engaging content that all of our people can access for an interactive, enjoyable and informative experience." Kim Knight, HR Director, Loomis UK

The group-wide development and education platform was upgraded in 2020 and named Loomis Academy 2.0. The platform is where employees find Loomis's mandatory training in areas such as compliance, anti-money laundering and preventing the funding of terrorism.

A designated department in the UK has global responsibility for education and training. The Group has specialists who identify education needs and tailor solutions for Loomis's decentralized organization.

In 2020 Loomis also strengthened the link between management's variable remuneration and the requirement of completing and passing courses. Now all of the just over 200 senior managers within the Group must have completed and passed courses in Group policies in order to participate fully in incentive schemes.

Global knowledge transfer and best practice

Loomis is constantly aiming to improve the infrastructure for transfer of knowledge. The internal communication requirement is always being raised, in particular for companies with decentralized operations and product segments. 2020 saw a major initiative to facilitate the implementation of the Workplace intranet in which the various countries are responsible for their channel and content. A successful launch in one country provides a good example to follow and often sparks interest in other markets to emulate it.

"Workplace has helped us to bring about change and build the culture by creating transparency and an effective contact channel."

A good example of knowledge transfer within the Group is the "Improvement Method for Change" project which was implemented in 2020. The project's purpose is to facilitate self-help in business development and continual renewal for local country management teams. In 2020 Loomis Pay was launched in Denmark and selected managers and individuals have been trained in this new digital offering. The step-by-step training program includes workshops and meetings. The end product is a toolbox that improves knowledge and awareness of digital products within the organization. By creating best practice, selected Nordic managers can offer training and support to other countries on their digital journey, regardless of which stage in digital development the country has reached.

Health and safety during the pandemic

One of Loomis's main strengths is that it is a decentralized organization. The outbreak of covid-19 in 2020 affected the Company's operations in many ways, not least for all of the employees. Their safety is Loomis's top priority, and thanks to the decentralized organization, it has been possible to adapt to local restrictions and conditions in each market. The virus outbreak has revealed the strength of the Loomis Model, which provides guidance to local decision-makers and managers in managing difficult situations and ethical decisions.

Loomis solves local challenges during the pandemic

Spain was hit hard by the outbreak of covid-19 and Loomis had to quickly adapt its operations there based on the new market conditions. Early on in the virus outbreak Spain closed down large parts of society, including banks and offices. Loomis was asked to provide services for ATMs and bank branches where no bank employees were on site. Using comprehensive protective equipment, such as face masks, gloves and disinfectant, Loomis's employees were able to ensure that people had access to cash while communities were in lockdown.

Stine Schierning, HR Director, Loomis Norway

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Loomis as an employer Key ratios

It is in interactions with Loomis's 23,000 employees that the customers meet Loomis. Loomis as an employer assigns management the responsibility of ensuring that all employees have the right conditions to succeed and the training and skills they need to perform their duties. This takes place through both local and central programs and activities, including employee interviews and training initiatives.

The percentage of employees working within Segment Europe is 60 percent and in Segment USA 40 percent. The gender distribution in the Group is 33 percent women and 67 percent men.

Loomis's Code of Conduct

Every Loomis employee must do their part to make Loomis the most attractive employer in the industry, help to reduce the Company's environmental impact and never accept unethical behavior.

1 "At Loomis we are treated fairly regardless of age, ethnicity, gender, sexual orientation or disability."

0 2017 2018 2019 2020

70 80

Employee perceptions, % Employee perceptions, % Customer perceptions, %

50 60 2018 2019 2020

Employees who have received training in 2020 in the Loomis Code of Conduct, %

3 "I consider Loomis to be an equal-opportunity and responsible employer and member

Reports of unethical behavior being followed up, %

Loomis employee survey

Several of the key ratios are based on the employee surveys conducted on a regular basis which in turn are based on the understanding that satisfied employees also generate satisfied customers. Each country is responsible for conducting the surveys at least every 24 months. Thereto, each country has the option, based on a number of group-wide themes, to adapt the content of the survey to increase the focus on the local market.

2 "I consider Loomis to be a fair, equal-opportunity and responsible employer."

Proactive operational risk management

At Loomis, effective operational risk management is a key factor in achieving sustainable growth and profitability. This requires a continuous and systematic process for identifying, evaluating, managing and monitoring risk in our operations. The Group's risk management strategy is based on two fundamental principles: no loss of life, and a balance between profitability and the risk of theft and robbery.

Common guidelines, processes and tools

Loomis's business is directly associated with a number of risks. There is a risk of personal injury and also the risk of the loss of cash and valuables due to criminality or failures in procedures. Risk management is controlled from the corporate level through guidelines, processes and tools to ensure that risk mitigation procedures are part of day-to-day operations at all levels and in all parts of the organization.

Central management but local responsibility

Around 250 people within Loomis work on operational risk management at the Group, regional and national levels. Risk management is controlled at the corporate level and all of the branches have a common structure, processes and systems for their own risk mitigation work. Operational responsibility for risk management is delegated to each branch. One important principle is that the local managers 'own' their operational risk. Local managers have local knowledge and are therefore

Systematic risk management

Being proactive is essential for effective risk management. Loomis has established tools and routines to identify, take action on and monitor risk. Risks are evaluated based on two criteria: the likelihood that an event will occur and the severity of the consequences if the event should occur. In the next stage, the risks are weighed against how profitability could be affected. There are also structures in place for branches and countries to share their experiences with each other to monitor, develop and improve risk management on an ongoing basis.

best equipped to evaluate and manage the risk in their own operations. The risk departments at the regional, national and Group levels support local managers in their risk mitigation processes. At regular global risk

meetings the risk mitigation processes in the various countries are compared to best practice to identify areas where improvements can be made and to maintain a strong risk management culture.

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250 employees work on a daily basis to prevent risk

Targets for a safer workplace

The safety of the employees is always the main focus of risk management and detailed safety routines are prepared. One key target in Loomis's sustainability work is zero workplace injuries. These are specifically the types of injuries that can occur in connection with external events, such as threats, violence and robbery, as well as in traffic. Clear work routines are an important part of employee training programs and are essential to avoid accidents. Employees at all levels must understand and be able to manage the risks associated with their job. Careful recruitment and good professional development routines are other important factors.

Key ratios

Employee perceptions, %

"Loomis's processes and routines are designed to maintain a safe environment for me in my work."

54 percent increase in the number of shareholders

The Loomis share has been listed on Nasdaq Stockholm since 2008 and is part of the Industrial Goods and Services sector. The shares are traded under the ticker symbol LOOMIS and the ISIN code is SE0014504817.

Share price performance

In 2020 the Loomis share decreased in value by 41.7 percent (35.6) to SEK 226.20. During the same period Nasdaq Stockholm (OMXSPI) rose by 12.9 percent (29.6) and the Industrial Goods and Services index (SX2700PI), where Loomis is listed, rose by 13.9 percent (44.6). The Loomis share price has been negatively affected by the ongoing pandemic in 2020.

Loomis's total return in 2020, i.e. return including share price performance and dividends amounted to -40.3 percent (39.0). Nasdaq Stockholm's total return (SIX-RX) amounted to 14.8 percent for 2020 (35.0).

Share capital

As of December 31, 2020 the total number of shares and votes in Loomis amounted to 75,279,829. All of the shares have a quota value of SEK 5 and an equal share of the Company's earnings and capital. The total number of treasury shares as of December 31, 2020 was 53,797 (53,797). At the end of 2020, Loomis's share capital amounted to SEK 376 million (376).

Key ratios and share data	2020	2019
Share price performance
Share price Dec 31, SEK	224.00	387.80
Market cap Dec 31, SEK m	17,016	29,178
Share price performance in 2020, %	-42	36
Highest price paid	396.20	416.60
Date highest price paid	19 feb	18 dec
Lowest price paid	151.50	280.80
Date lowest price paid	19 mar	2 jan
Trading
Trading on Nasdaq Stockholm, %	51	40
Turnover, millions of shares	95.0	140.9
Average daily turnover, thousands of shares	378.4	561.4
Average turnover rate, %	126	187
Shareholders
Number of shareholders, Dec 31	23,124	14,979
Key ratios
Earnings per share before dilution, SEK	9.52	21.88
Earnings per share after dilution, SEK	9.52	21.88
P/E ratio	23.76	17.72
Earnings per share after dilution, SEK	116.62	127.51

Ownership structure

Loomis's largest shareholders are primarily international and Swedish equity funds. The changes in 2020 include that BlackRock and Fidelity reduced their holdings to a level where they are no longer among the 10 largest shareholders. Instead Andra AP-fonden and the US company Invesco increased their respective holdings and are now among the 10 largest shareholders. It can also be noted that the total number of share-

Shareholders by category, December 31, 2020

Foreign owners, 45.1% Swedish institutions, 28.7% Anonymous owners, 18.6% Swedish private persons, 6.0% Other, 1.6% Source: Modular Finance AB.

Due to rounding off, the totals in the diagram do not add up to 100 percent.

10 largest shareholders as of December 31, 2020

		Number of shares Votes and capital, %
Handelsbanken Fonder	6,650,519	8.8
SEB Fonder	5,339,788	7.1
Polaris Capital Management	3,851,610	5.1
Swedbank Robur Fonder	3,079,057	4.1
Invesco	2,850,462	3.8
BNP Paribas
Asset Management	2,826,260	3.8
Vanguard	2,421,722	3.2
Norges Bank	2,116,247	2.8
Andra AP-fonden	1,359,614	1.8
Dimensional Fund Advisors	1,338,813	1.8
The 10 largest shareholders	31,834,092	42.3
Other	43,445,737	57.7
Total1)	75,279,829	100.0

1) Includes 53,797 shares held in treasury as of December 31, 2020. Source: Modular Finance AB.

holders increased in 2020 from 14,979 to 23,124, and that the percentage of shares owned by the 10 largest shareholders has fallen from 47.2 to 42.3 percent. The geographical spread of ownership has also changed slightly. Swedish ownership, particularly private individuals, increased in 2020.

Dividend and dividend policy

Since 2010 Loomis's dividend policy has been to distrib-

Due to rounding off, the totals in the diagram do not add up to 100 percent. Source: Modular Finance AB.

Ownership structure as of December 31, 2020

Number of shares	Number of shareholders	Share of total capital, %	% of total votes
1–1,000	2,634,039	22,165	3.5
1,001–5,000	1,472,165	707	1.9
5,001–10,000	524,605	73	0.7
10,001–100,000	4,288,229	111	5.6
100,001–	52,346,081	68	69.5
Anonymous ownership	14,014,710	N/A	18.7
Total	75,279,829	23,124	100.0

Source: Modular Finance AB.

ute 40–60 percent of the Group's net earnings to the shareholders. The dividend should give shareholders a good return and a growing dividend. Loomis has paid dividends in line with its dividend policy every year up to 2019. Due to the coronavirus pandemic, the dividend for 2019 was reduced by 50 percent compered with the original proposal by the Board. The dividend for 2019 was SEK 5.50 per share. For 2020 the Board has proposed a dividend of SEK 6.00 per share.

Analysts who follow Loomis

Company ABG Sundal Collier Carnegie Danske Bank DNB Bank ASA Goldman Sachs International Handelsbanken Capital Markets Kepler Cheuvreux Nordea Markets SEB

Calendar 2021

Interim Report January – March 2021	May 6
Annual General Meeting 2021	May 6
Interim Report January – June 2021	July 23
Interim Report January – September 2021	Nov 3

Contact information

Anders Haker

Chief Investor Relations Officer

[email protected]

+1-281-795-8580

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Introduction Strategy Operations Corporate Governance Report Sustainability Report Financial statements

Corporate Governance Report

› Corporate Governance 36	› Group Management 51
› Internal control and	› Signatures and
43	53
risk management	auditor's statement

› Board of Directors 49

Corporate governance

The primary goal of Loomis's corporate governance is to create clear goals, strategies and values that effectively protect shareholders and other stakeholders by minimizing risk and that also form a solid foundation from which to generate value. To achieve this, Loomis has developed a clear and efficient structure for the delegation of responsibility and control.

Compliance with the Swedish Corporate Governance Code

Loomis AB is a Swedish public limited liability company listed on Nasdaq Stockholm. In addition to the legal or other statutory requirements, Loomis applies the Swedish Corporate Governance Code (the Code). The Corporate Governance Report has been prepared in accordance with the Annual Accounts Act and the Code as a separate report from the Annual Report and Sustainability Report. The Code follows the principle of "comply or explain", according to which entities applying the Code may deviate from individual rules, but must then report the deviation and state the reason for it, and describe the solution they have chosen instead. In 2020 Loomis complied with all parts of the Code with the exception of section 9.7. >The Code is available at www.bolagsstyrning.se

Section 9.7 of the Code states that the vesting period for the share-related incentive programs or the period from the commencement of an agreement to the date a share may be acquired is to be no less than three

Corporate governance structure

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years. Loomis's has outstanding schemes which allow for shares to be acquired by a third party at the market price for a portion of the allocated bonus. These shares are allotted to employees the following year as long as they are still employed by the Group. The schemes replace a cash-based system with immediate disbursement and are not approved as additional remuneration over and above the existing cash-based bonus system. As such, the Board regards a two-year period from the start of the scheme to the allotment of the shares to be warranted and reasonable in meeting the objective of the incentive schemes.

Annual General Meeting

The general meeting of shareholders (Annual General Meeting, AGM) is held once a year to address matters including the following:

Amendments to the Articles of Association
Election of board members and decision on board fees
Discharging the board members and the President from liability
Election of auditors
Adoption of the statement of income and balance sheet
Appropriation of the Company's profit or loss
At least every four years, a resolution on guidelines for remuneration for the President and other senior executives
Decision to possibly introduce share-related incentive schemes

Annual General Meeting 2020

The 2020 AGM for Loomis AB (publ) was held on May 6, 2020 in Stockholm. To limit the risk of spreading the coronavirus certain precautionary measures were taken, such as limiting the number of representatives from the Board and Group Management attending the meeting in person, and enabling voting by mail to take place prior to the meeting. Shareholders in attendance, in person or by proxy, represented 57.5 percent of the votes in the Company. Present at the AGM were the Chairman of the Board, some members of Group Management and the auditor in charge. >For more information on Loomis's Annual General Meeting and the 2021 AGM, please refer to Loomis's website, www.loomis.com >See also page 140.

Extraordinary shareholders' meeting 2020

An extraordinary shareholders' meeting was held on December 10, 2020. According to temporary statutory provisions, the meeting was carried out solely through advance voting (voting by mail). Shares represented at the meeting amounted to 53.4 percent of the votes in the Company. The extraordinary shareholders meeting voted to approve the Board's proposal of a dividend to shareholders of SEK 5.50 per share. >For more information on Loomis's extraordinary shareholders meeting on December 10, 2020 visit Loomis's website, www.loomis.com.

Shareholders

Shareholders exercise their right to vote at the general meeting of shareholders, which is the Company's highest decision-making body and the forum where the shareholders exercise their right to vote on company matters. All registered shareholders who have notified Loomis by the deadline of their intention to attend have the right to attend the general meeting and cast votes corresponding to the number of shares they hold. Shareholders who are unable to attend in person may be represented by proxy.

As of December 31, 2020 the total number of shares and votes in the Company amounted to 75,279,829. Loomis AB's largest shareholders and ownership structure as of December 31, 2020 are presented in the table below.

10 largest shareholders as of December 31, 2020

	Number of
	shares	Votes, % Capital, %
Handelsbanken Fonder	6,650,519	8.8	8.8
SEB Fonder	5,339,788	7.1	7.1
Polaris Capital Management	3,851,610	5.1	5.1
Swedbank Robur Fonder	3,079,057	4.1	4.1
Invesco	2,850,462	3.8	3.8
BNP Paribas Asset Management	2,826,260	3.8	3.8
Vanguard	2,421,722	3.2	3.2
Norges Bank	2,116,247	2.8	2.8
Andra AP-fonden	1,359,614	1.8	1.8
Dimensional Fund Advisors	1,338,813	1.8	1.8
10 largest shareholders	31,834,092	42.3	42.3
Other shareholders	43,445,737	57.7	57.7
Total1)	75,279,829	100.0	100.0

1) Includes 53.797 shares held in treasury as of December 31, 2020. Source: Modular Finance AB.

Nomination Committee 's work in preparation for the 2021 AGM

The Nomination Committee is a body established by the AGM and tasked with preparing for the election of a chairman for the meeting, election of board members and the Chairman of the Board, proposals regarding board fees and their distribution among the Chairman and other members, fees for committee work and any changes in the Nomination Committee's instructions. Ahead of AGMs at which auditors will be elected, the Nomination Committee also consults with the Board and the Audit Committee to prepare for the election of auditors and decisions on auditors' fees and related matters. The Nomination Committee has applied section 4.1 in the Swedish Corporate Governance Code, as its diversity policy, to ensure diversity on the Board of Directors. Ensuring diversity is an important element of the Committee's nomination process. The Nomination Committee constantly strives to maintain a gender balance and to achieve a breadth of qualifications, experience and backgrounds among the board members. This is reflected in the composition of the current Board.

The 2020 AGM voted in favor of the Nomination Committee's proposal on principles for forming the Nomination Committee. According to these principles, which apply until further notice, the Nomination Committee is to consist of representatives for the five largest shareholders in terms of voting power who are recorded in the share register maintained by Euroclear Sweden AB as of August 31 each year. The Company's Chairman convenes the Nomination Committee to its first meeting and is also a co-opted member of the Committee. If any shareholders decline to participate in the Nomination Committee, a representative from the next largest shareholder is to take that person's place. The composition of the Nomination Committee ahead of the AGM is to be announced no later than six months prior to the AGM. If at least three months prior to the AGM, one or more shareholders who have appointed members of the Nomination Committee are no longer among the five largest shareholders in terms of voting power, the members appointed by these must resign their positions and the shareholder/shareholders who are now among the five largest shareholders in terms of voting power will have the right to appoint their representatives. If there are only marginal changes in the number of votes or the changes take place within three months of the AGM, the Nomination Committee's composition is not to be changed unless there is a particular reason for doing so. If a member leaves the Nomination Committee before completing her/his term and the Nomination Committee wishes to appoint a replacement, the replacement must be a representative from the same shareholder or, if this shareholder is no longer among the largest ones in terms of voting power, from the

shareholder next in line. Changes to the composition of the Nomination Committee are to be announced immediately. The Nomination Committee's term continues until the composition of the next Nomination Committee has been announced.

The table which follows, presents information on the members of Loomis's Nomination Committee as of December 31, 2020. >The composition of the Nomina tion Committee is also published on Loomis's website: www.loomis.com.

The duties of the Nomination Committee are established in the instructions for Loomis AB's Nomination Committee. Five Nomination Committee meetings were held in 2020.

Nomination Committee as of December 31, 2020

Nomination Committee	Representing
Elisabet Jamal Bergström (Chairman)	SEB Investment Management
Bernard Horn	Polaris Capital Management
Helen Fasth Gillstedt Jacob Lundgren	Handelsbanken Fonder Andra AP-fonden
Marianne Nilsson	Swedbank Robur Fonder
Alf Göransson (co-opted)	The Company's Chairman of the Board

Auditors

The 2020 AGM voted to appoint Deloitte AB as the external auditor for one year, with Peter Ekberg as auditor in charge.

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The auditors examine the Company's Annual Report, consolidated financial statements and accounts, as well as the administration of the Company by the Board and the President. The auditors perform their duties in accordance with an audit plan established in consultation with the Audit Committee and the Board. The auditors attend all Audit Committee meetings and present their audit conclusions to the entire Board at the board meeting held in conjunction with the closing of the annual accounts. The auditors also inform the Board on an annual basis about services they have provided over and above the audit, about fees for such services and about other circumstances that may have a bearing on the independence of the auditors. The auditors also attend the AGM and present their work, findings and conclusions. During the year the auditors met with the Audit Committee when no members of Group Management were present.

The audit is performed in accordance with the Swedish Companies Act, the International Standards on Auditing and generally accepted auditing standards in Sweden, which are based on the international auditing standards issued by the International Federation of Accountants (IFAC). The fees paid to the auditors are presented in the table which follows.

>For further information on audit fees and other remu neration, refer to Note 6.

>For a more detailed presentation of the auditor in charge, Peter Ekberg, refer to page 50.

Audit fees

		Group	Parent Company
SEK m	2020	2019	2020	2019
– Audit assignment	16	16	3	3
– Audit work in addition to the audit assignment	–	–	–	–
– Tax advisory services	–	0	–	0
– Other services	0	0	0	0
Total elected auditors	16	17	3	3
Other auditors
Audit assignment	3	3	–	–
Total	19	20	3	3

Board of Directors

The Board's Work Procedures and responsibilities The Board of Directors bears ultimate responsibility for the organizational structure and administration of the Company and the Group in compliance with the Swedish Companies Act, and appoints the President and CEO and the Audit and Remuneration Committees. The President and CEO is responsible for the Company's day-to-day operations in accordance with the guidelines issued by the Board. The Board also determines the salary and other remuneration for the President and CEO.

The duties of the Board and division of responsibilities are stipulated in the Work Procedures for the Board, which are documented in written instructions and adopted at least once a year. According to the Work Procedures, the Board is to take decisions on matters such as the Group's general strategy, financial reporting, acquisitions and divestments, sizeable investments and financing, and is to establish a framework for the Group's operations by approving the Group's budget. The instructions include a work plan for the President and CEO and financial reporting instructions.

The Work Procedures also prescribe an annual evaluation of the work of the Board of Directors. On an annual basis, all board members submit their answers to a questionnaire issued by the Nomination Committee about the quality of the Board's work. The aim is to obtain a sound basis for the Board's own evaluation work and to provide the Nomination Committee with information for its nomination tasks. The result of the evaluation is presented to the Board and the Nomination Committee.

The Board is also responsible for ensuring that the Company has good internal control and for an ongoing evaluation of the efficiency of the Company's internal control systems. The Board is to ensure that the Company has formal routines to guarantee compliance with the adopted principles for financial reporting and internal control. >This is described in more detail in the Board's Report on Internal Control and Risk Manage ment starting on page 43.

		Sustainability Report Financial statements
Internal control and risk management	Signatures and auditor's statement
	Board of Directors	Group Management

The Board has adopted a number of policies for areas of key importance for Loomis. >Refer to the section under the heading "Control environment" starting on page 46.

Chairman of the Board

The Chairman is responsible for ensuring that the Board performs its duties in accordance with the Swedish Companies Act and other relevant laws and regulations. This includes monitoring operating activities and ensuring that all of the board members receive the information they require. The Chairman monitors operations by being in regular contact with the President and is responsible for ensuring that other board members receive adequate information on which to base decisions. The Chairman also ensures that the above-mentioned annual evaluation of the work of the Board and the President takes place. The Chairman represents the Company in ownership-related matters.

Composition of the Board since the Annual General Meeting 2020

Board member	Elected	Board fees1) (SEK)	Committee fees1) (SEK)	Board meetings (10 total)	Remuneration Committee (3 total)	Audit Committee (4 total)	Independent of major shareholders	Independent of the Company
Alf Göransson (Chairman)	2007	1,000,000	100,000	10	3	2	Yes	Yes
Jan Svensson (President)	2006	425,000	50,000	9	3	–	Yes	Yes
Cecilia Daun Wennborg	2013	425,000	250,000	10	–	4	Yes	Yes
Jeanette Almberg 2)3)	2020	425,000	100,000	6	–	2	Yes	Yes
Lars Blecko	2019	425,000	–	10	–	–	Yes	No4)
Johan Lundberg 3)	2019	425,000	100,000	10	–	2	Yes	Yes
Sofie Nordén 5)	2017	–	–	10	–	–	–	–

1) Fees approved by the 2020 Annual General Meeting. The fees are compensation for the period between the 2020 AGM and the 2021 AGM. For fees expensed in 2020, refer to Note 11. 2) Elected to the Board on May 6, 2020, term consists of 6 board meetings..

3) Elected to the Audit Committee on May 6, 2020, term consists of two meetings.

4) Lars Blecko has previously been part of Loomis group management and performed consultancy work for Loomis US LLC up until December 31, 2020. 5) Employee representative.

Composition of the Board

Loomis's Board of Directors is to consist of at least five and no more than 10 members elected by the Annual General Meeting, with no deputies. The Board may have two employee representatives and two deputies for these members. For information on Loomis board members, refer to the table below. >See also pages 49–50.

The Board meets at least five times a year, including at the statutory meeting following the Annual General Meeting, and convenes additional meetings if the situation requires this. Each board meeting is also attended by the President and CEO, the Group CFO and the Secretary of the Board. The Company's auditors attend the board meeting held in conjunction with the closing of the annual accounts. When reporting is required on specific matters, other officials from the Group participate as well. For more information on board member attendance at board meetings, refer to the table below.

Independence

Five of six board members elected by the 2020 AGM are regarded as independent of the Company and its management. All of the board members elected by the 2020 AGM are considered to be independent of the Company's major shareholders. Loomis AB is therefore of the opinion that, in its current composition, the Board of Loomis AB meets the independence requirements as set out in the Code. For further information on the independence of the respective board members, refer to the table below.

All of the board members have relevant experience from other listed companies. >Read more on pages 49–50.

Work of the Board in 2020

In 2020 the Board convened a total of 10 meetings, one of which was a statutory meeting. Matters of importance dealt with during the year include:

Business strategy and the impact of the ongoing corona pandemic
Interim reports and the Annual Report
Presentation of the Group's business plan and the business plans and budgets of selected countries for 2021, and approval of the 2021 budget

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Investments and acquisitions, and divestments of operations
Guidelines for remuneration and bonuses, and other HR-related issues
Matters relating to internal control
Matters relating to compliance
Audit-related matters
Financing
Annual evaluation of the Board's work

Audit Committee

The Board has appointed an Audit Committee that consists of three board members and is tasked with reviewing all of the financial reports submitted to the Board by Group Management, and submitting recommendations regarding their adoption. The Audit Committee's work also involves focusing on risk management in connection with cash processing operations and on promoting risk awareness throughout the Group. The Committee works according to instructions and to an appendix to the Board's Work Procedures stipulating, among other things, the Committee's purpose, responsibility, composition and reporting requirements. The Committee's duties include:

Examining the Company's financial reports
Examining internal control and corporate governance
Addressing auditing and accounting issues
Evaluating and verifying the auditors' independence

In 2020, just as in 2019, particular emphasis was placed on compliance and Loomis organization for compliance.

The Audit Committee is an independent body. The items above are addressed and presented to the Board in preparation for board decisions. Board members Cecilia Daun Wennborg (chairman), Johan Lundberg and Jeanette Almberg have been members of the Audit Committee since the 2020 AGM. All are regarded as independent of the Company and its management. The Audit Committee meetings are normally also attended by the Company's auditor, the President and CEO and the CFO. When reporting is required on specific matters, other officials from the Group participate as well. In 2020, the Committee held a total of four meetings.

Remuneration Committee

The Board has appointed a Remuneration Committee tasked with addressing all issues relating to salaries, variable remuneration, pension benefits and other forms of compensation for Group Management and, if the Board so decides, other levels of management as well. The Remuneration Committee is also tasked with monitoring and evaluating compensation structures, variable remuneration programs that are ongoing or were concluded during the year for senior executives, and monitoring and evaluating the application of the guidelines for remuneration of senior executives

which, by law, are to be determined by the AGM. The Committee presents its proposals to the Board in preparation for board decisions. The Remuneration Committee consists of board members Alf Göransson (chairman) and Jan Svensson. In 2020 three meetings were held by the Remuneration Committee.

Loomis Group Management

Group Management has overall responsibility for ensuring that Loomis's ongoing operations are in accordance with the strategies and long-term goals established by the Board of Loomis AB, and that risk management, governance, organizational structures and processes are satisfactory. Group Management currently consists of the President and CEO, Regional President USA, Regional President Europe, the Chief Financial Officer, Chief Human Resources Officer, Group Head of Risk, Head of M&A, Chief Compliance Officer and CEO of Loomis Pay. >For more informa tion on Group Management, refer to pages 51–52.

Principles for remuneration and other conditions of employment

The 2020 AGM resolved on the following principles for remuneration and other conditions of employment for senior executives within Loomis. Remuneration for the President and CEO and other members of Group Management consists of a fixed salary, variable remuneration, pension benefits and other benefits.

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Variable remuneration is based on results in relation to performance targets and growth targets in the individual areas of responsibility (Group, region or subsidiary) and is to be consistent with the interests of the shareholders. Variable remuneration within the scope of the Company's Annual Incentive Plan (AIP) amounts to a maximum of 85 percent of fixed annual salary for the President and CEO and a maximum of 100 percent of fixed annual salary for other members of Group Management.

The Board has the right to deviate from the guidelines if there are particular grounds for doing so in an individual case and if deviation is necessary to serve the Company's long-term interests, including its sustainability, or to ensure the Company's financial viability. As stated above, the duties of the Remuneration Committee's include presenting its proposals to the Board for remuneration decisions, including decisions on deviating from the guidelines.

An extraordinary shareholders' meeting on September 5, 2018 approved a long-term saving share-based incentive scheme (LTIP 2018–2021). >For more information on LTIP 2018–2021, refer to

page 86 and Note 7.

>For the complete guidelines for remuneration of Group Management refer to page 86.

>For additional information of remunerations to the CEO and Group Management see Note 7.

>For more information on remuneration of the President and other members of Group Management, refer to Note 7.

The Board's Report on Internal Control and Risk Management

According to the Swedish Companies Act and the Swedish Corporate Governance Code, the Board of Directors has overall responsibility for ensuring that the Group has an efficient system for internal control and risk management. Loomis's Board of Directors continually examines the efficiency of internal control of financial reporting and risk management and takes action to promote improved internal control.

Internal control and risk management

Loomis's internal control and risk management relating to financial reporting is designed to ensure that the processes for preparing financial reports are highly reliable and that Loomis as a listed company complies with all relevant accounting standards and other requirements. Internal control is an integrated part of Loomis's corporate governance and includes operational risk management as this is a key factor in the Company's operations. Internal control involves the Board, senior executives and other employees at all levels within the organization. Loomis's internal control system is designed to manage risks, rather than eliminate them, and can only provide reasonable, but not absolute, assurance that no material errors or shortcomings will arise in financial reporting.

Compliance

In 2020 Loomis continued to further strengthen internal control and risk management for operations run

under supervision, with a particular focus on compliance. In this initiative, Loomis's compliance and risk management follows the three lines of defense model for division of roles and responsibilities.

First line of defense business operations risk management which includes all risk management activities carried out by the operations.
Second line of defense independent support and control function. This includes certain risk and risk management activities to prevent, among other things, money laundering. This function supports and checks the work of the first line of defense on risk management and compliance. The function works independently from business operations and reports directly to the President and CEO. The function's objective is to provide the President with complete, comprehensive and factual information and analysis of Loomis's risks and compliance.
Third line of defense internal audit and the independent audit of business operations. This function

reports to the Board. Loomis has in the past used a third-party expert to perform internal audits, but following a decision by the Board in 2019, the Company now also employs its own personnel for this purpose, and internal audit instructions have been adopted. If needed, the Board can also decide on additional work in this area to be performed by both the Company's personnel and by external parties.

Financial reporting

Loomis's group-wide internal control of financial reporting is managed by the financial departments of the Group and the segments. Group Management and the Group's financial department have joint responsibility and are to oversee and verify that the Group has local routines in place to meet the stipulations in both global and local laws and regulations, and to ensure that financial reporting is accurate. Loomis has a segment structure responsible for monitoring and guiding the countries in each segment. Responsibility for the

application of laws and regulations in financial reporting, compliance with the Group's routines, procedures, and internal control rests with each subsidiary and country management team.

Group Management and the Group's financial department are also responsible for following up on the work of external auditors. Any observations and recommendations from the external auditors are analyzed and discussed with the subsidiary in question and any action plans are communicated to the relevant individuals, who then take the necessary steps which are then followed up. The results of internal control work are reported to the Audit Committee upon request.

Operational risk management

Handling cash and other valuables is associated with significant risks to both personnel and property. Sound operational risk management is therefore one of Loomis's most important success factors. For this reason, in addition to the process described above for internal control of financial reporting, Loomis has established a risk department to focus on operational risk management. This department has developed a strong understanding of the risks the Company is exposed to.

Understanding the risks is essential in order to assess which business risks should be avoided entirely and which can be managed. Loomis's employees play a

crucial role in controlling and reporting on the operational risks that the Company has decided are acceptable. Loomis's operational risk management strategy is based on fundamental principles that are easy for all employees to understand:

No loss of life
Balance between profitability and risk of theft and robbery

The operational risk management strategy is designed to identify strengths to build upon, weaknesses that need to be addressed, and opportunities and threats that require action to be taken. It also takes into account the changes that may take place in Loomis's external environment, such as new technology or changes to laws. Each assignment is assessed using criteria such as profitability and security, where commercial opportunities must be weighed against possible risks. Even if a risk is accepted, it must be monitored on an ongoing basis because the external environment is constantly changing. Significant business processes are documented and every risk associated with a specific process is identified and defined in a comprehensive risk register. The global risk management policy adopted by Loomis stipulates how the Group is to work actively with operational risk management in accordance with other established policies and the Company's Code of Conduct. Although Loomis aims to minimize operational risk through internal routines and procedures, the Group

also has targeted insurance coverage.

The Board of Directors evaluates future business opportunities and risks and draws up a strategy for the Group. Group Management and the respective segment management and country management teams are responsible for managing operational risk. Group Management is responsible for identifying, assessing and managing risk, and for implementing and maintaining risk control systems in line with the policies adopted by the Board. Every segment and country management team is responsible for ensuring that there is a process in each country aimed at promoting risk awareness. Branch managers and individuals responsible for operational risk management in each country are to ensure that risk management is an integral part of the local operations at all levels in the country's organization. Reviews of business risk and risk assessment are routinely conducted throughout the Group. Group Management, the Audit Committee and the Board are informed on an ongoing basis of significant risks and any risk control shortcomings. >Refer to pages 31-32 for more information on the Group Man agements work on operational risk.

Compliance risk management

Some of Loomis's operations, including payment services operations in Sweden and foreign currency operations in France require permits or are subject to

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oversight by the respective country's supervisory authority. These operations are required to meet certain obligations according to the laws, regulations or other rules that apply to the operations for which permits are required. Over the past few years Loomis has strengthened the Group's compliance structure and processes, and in January 2020 a newly recruited Chief Compliance Officer joined the Company. Compliance work is risk-oriented and thus prioritizes the resources in the areas where the most significant compliance risks exist. The duties of the compliance function are established in policies and work instructions. The most significant duties of the compliance function are:

To identify and monitor the risks that exist if the Company does not fulfil its obligations according to the statutes and other regulations that apply to operations requiring permits, and to monitor and verify that the risks are managed by the relevant departments/functions at the Group company in question.
To supervise and verify compliance with statutes and other regulations, and with the Group's internal rules.
To review and assess on a regular basis whether the Group's routines are appropriate and effective.
To provide ongoing recommendations to relevant parts of the organization based on the observations made by the compliance function.
To provide advice and support to the Company's staff, President and Board on the statutes and other

regulations that apply for operations requiring permits and the Group's internal rules.

To inform and educate relevant individuals on new and amended rules and regulations.
To quality assure and continually update the Group's internal rules.
To verify that new, or significantly changed, products, services, markets, processes, IT systems, as well as material changes in the Company's operations and organizational structure, are in compliance with the statutes and other regulations that apply for the Company's operations requiring permits.
To inform and report to the Company's Board and President on a regular basis.

Internal audit

The internal audit is aimed at improving the Company's operations by evaluating risk management, governance and internal control. The internal audit also focuses on prevention by proposing internal control improvements. The internal audit follows the guidelines for professional execution of an internal audit and the professional code established by the Institute of Internal Auditors and the guidelines established in the International Professional Practices Framework.

The process of building up the control structure included a decision by Loomis's Board in 2019 to employ a person to be responsible for the internal audit from

In 2020 the new Head of Internal Audit took up the position with responsibility for this group-wide function, and reports to the Audit Committee of the Group's Parent Company.

Accordingly, the internal audit function works according to a relevant and risk-based audit plan established by the Board of Directors involving reviewing and regularly evaluating the following:

Whether the Company's structure, governance procedures, IT systems, models and routines are appropriate and effective.
Whether the Company's internal control is appropriate and effective and whether the business is run according to the Company's internal rules.
Whether the Company's internal rules are suitable and consistent with laws, regulations and other rules.
The reliability of the Company's financial reporting, including contingent liabilities.
The reliability and quality of the work performed as part of the Company's other control functions.
The Company's risk management based on the adopted risk strategy and risk acceptance.

The internal audit function also provides recommendations to relevant entities and individuals based on the observations the function has made, and follows up on actions taken within a reasonable time frame.

Internal control system

Loomis has a well-established process aimed at ensuring a high level of internal control and risk management. Loomis's framework for internal control includes the following areas: 1. control environment; 2. risk assessment; 3. control activities; 4. information and communication; and 5. monitoring activity.

1. Control environment

The control environment forms the foundation for internal control by creating the culture and the values on which Loomis operates. The internal control structure includes the organization's core values and how authority and responsibility structures are communicated and documented in governing documents, such as internal policies and instructions. The Board has adopted policies for areas of key importance.The policies are evaluated and updated annually and as needed. Below are brief descriptions of policies adopted and the most important internal control documents.

Authorization matrix: contains the structure for delegation of decision-making. Loomis is a decentralized organization where managers are given clear targets and the authority to make their own decisions and develop their operations in close proximity to the customers.

Financial Policy: contains guidelines to achieve transparent, cohesive and accurate financial reporting, proactive risk management and constant improvement of the Company's financial processes.

Information Security Policy: provides a general framework aimed at ensuring that a reasonable level of information security is maintained in a number of key areas. One such key area is cyber security, which is highly prioritized at Loomis, and is managed actively and systematically by the Company.

Purchase procedures: provide a general framework to achieve efficient procedures for significant fixed asset purchases.

Insider Policy: complements the current Swedish insider laws and European regulations regarding insider trading. The Policy establishes routines for the management of insider information and logbooks, and defines when trading in financial instruments issued by (or attributable to) Loomis AB is prohibited. The Policy applies to all persons who, in accordance with the Market Abuse Regulation, have been identified by Loomis AB as so-called persons discharging managerial responsibilities, as well as other categories of employees identified in the Policy.

Internal Control Requirements: stipulate the important routines and control measures not indicated in other governing documents.

Communication Policy: aims to ensure that the Company meets the requirements relating to the disclosure of information to the stock market.

Customer Contract Policy: specifies criteria for the content of contracts and when customer contracts must be approved by the Board.

Policy regarding prior approval of auditing and non-auditing services: contains guidelines on approval of auditing services performed by Loomis's external auditors as well as non-auditing services performed by the auditor in charge. The purpose of the Policy is to ensure that the auditors are independent of Loomis.

Internal Audit Policy: provides a description of the Group's internal audit function, including the division of responsibilities with respect to the internal audit.

Compliance Policy: aims to ensure that Loomis AB and its subsidiaries have an effective compliance structure.

Competition Law Compliance Policy: aims to ensure that Loomis acts in compliance with applicable competition laws.

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Risk Management Policy: provides a framework for the general structure for organizing, controlling and monitoring operational risk.

The Code of Conduct and Anti-Bribery Policy:

aims to ensure that the employees in the Group maintain and promote business practices with the highest possible ethical standards.

Anti-Money Laundering and Anti-Financing of

Terrorism Policy: aims to establish the Group's guidelines and requirements for operations within the Group that are required to have permits. The Policy contains guidelines for actions to prevent money laundering, such as know your customer (KYC), transaction monitoring, special verification measures for politically exposed persons (PEPs) and cross-checking against sanction lists.

Routines relating to trade sanctions: contain a description of general trade sanctions, highlighting high risk countries and providing general guidelines for how businesses are to be run to ensure that Loomis is in compliance with international and local laws and regulations on trade sanctions.

Sustainability Policy: contains a description of the Group's focus areas to actively and consciously balance the interests of various stakeholders for the Company's long-term profitability, environmental impact and social justice.

2. Risk assessment

The Group's risk committee, risk function, finance function and where applicable the compliance function, are responsible for ensuring that every subsidiary has routines aimed at creating risk awareness. Country Presidents and individuals responsible for risk management in each country are to ensure that risk management is an integral part of the local operations at all levels in the country's organization.

The Group has systems and routines for managing risks. These are integrated into the Group's business planning and performance monitoring processes. The annual risk analysis and the resulting risk register are coordinated and maintained at the Group level. In addition to this, business risk reviews and risk assessments are routinely performed throughout the Group.

3. Control activities

Control activities include methods and activities to ensure compliance with adopted guidelines and policies, and the accuracy and reliability of internal and external financial reports. Examples of control activities within Loomis are:

Self-assessment: Each operating entity within the Group regularly conducts a self-assessment of insight into and compliance with the Group's internal control requirements. The Group's external auditors validate completed self-assessments. This system enables comparisons to be made between countries and for results to be compiled at the Group and country levels. Reports are made available to each country management team, segment management, Group Management and the Audit Committee.

Internal control activities: Over the past few years Loomis has developed methods for reviewing and monitoring internal control within the Group. Loomis's internal control activities consist primarily of:

Develop the Group's policies and guidelines
Following up on the external auditor's work and attending to material observations and recommendations.
If necessary, conducting specific investigations and acting as project manager on behalf of Group Management in specific matters, such as those linked to compliance.
Through visits to different countries by Loomis's own personnel, or with the assistance of external parties, monitoring financial reporting as well as significant routines and control processes.
Cash auditors within the Loomis Group examine reconciliation routines within cash management operations on a regular basis. This work includes taking an inventory of cash stored at Loomis's cash centers.

These inventories are carried out in addition to the daily reconciliation performed at all cash centers.

Financial monitoring: Local CFOs at Group companies play a key role in creating the environment necessary to ensure that financial information is transparent, relevant and current. Country Presidents and country CFOs are responsible for ensuring that the adopted policies and guidelines are complied with and that routines for internal control of financial reporting are working efficiently in the respective countries.

Letter of representation: The Group has a system for the ratification of the annual financial statements whereby, at the end of the year, Country Presidents and Country CFOs sign a Letter of Representation in which they confirm that the Group's policies and guidelines have been followed and that the reporting package provides a true and fair representation of the Group's financial position.

Managing and monitoring risk: In addition to operational risk management carried out by the subsidiaries and regions, the Loomis Group has a global risk committee and risk department. The risk department works to prevent losses in the Company's operations, such as loss of life and health, as well as financial losses. The Group Head of Risk reports to the President and CEO, and also to the Audit Committee on a

regular basis. Loomis measures, reports and monitors operational risks on an ongoing basis. The Group's overall risk management is also reinforced by targeted insurance coverage.

Monitoring and managing compliance: Loomis takes active steps to prevent money laundering and financing of terrorism. Operations within the Company requiring permits perform risk assessments on a regular basis and actions are taken as needed. Training of employees is an important aspect in managing the risk of money laundering. Preventive measures include know your customer (KYC), transaction monitoring and special verification processes with respect to politically exposed persons (PETs), as well as crosschecking against sanction lists. Any suspected transactions are reported to the relevant authorities. In addition to the monitoring and reporting process within the relevant subsidiaries, in 2019 a structure for reporting compliance to Loomis AB was created. The compliance function, which reports to the CEO, was established to ensure central monitoring and evaluation, and that the appropriate steps are taken.

4. Information and communication

Information and communication are essential for an internal control system to be efficient. Loomis has developed routines and an information system to provide Group Management and the Board with reports on a

regular basis on the Company's performance in relation to established targets.

5. Roles and responsibility – Monitoring activity Loomis's Board, the President and CEO and the CFO monitor internal control of financial reporting. The procedures used by the Board to examine the efficiency of the internal control system include:

Discussions with Group Management or the departments/functions responsible on risk areas identified by Group Management and the risk analysis performed.
Addressing important issues arising from the external audit and other reviews/investigations.
Review of Group Management's monthly reconciliations where an entity's actual results are compared to the budget, deviations are identified, and key performance indicators and forecasts are analyzed.

The Board has appointed an Audit Committee tasked, among other things, with ensuring independent oversight of the effectiveness of the Group's internal control systems and financial reporting process. The Audit Committee also discusses specific and significant accounting principles as well as the estimates and assessments made when the reports are compiled. The Committee also reviews the interim and annual reports before it recommends that the Board approves the reports for publication.

Board of Directors

Alf Göransson

Member of the Board of Loomis AB since 2007 and Chairman of the Board since 2009.

Chairman of the Compensation Committee.

Born: 1957

Education: International Economics, University of Gothenburg.

Experience: Board member and President and CEO of Securitas AB, President and CEO of NCC AB, CEO of Svedala Industri AB, Business Area Manager at Cardo Rail and President Swedish Rail System in the Scancem Group.

Other appointments: Chairman of Hexpol AB, NCC AB and Axfast AB. Board member of Attendo AB, Sweco AB, Melker Schörling AB and Sandberg Development Group.

Shares in Loomis as of December 31, 2020: 6,000 (privately held)

Other information: Independent of major shareholders and the Company.

Jeanette Almberg

Member of the Board of Loomis AB since 2020. Member of the Audit Committee. Born: 1965

Education: Master of Science in Business and Economics, Linköping University. Studies in psychology, Linköping University.

Experience: CEO SEB Kort, COO. Director Customer Operations, Tele2. Positions in marketing and sales in various industries.

Other appointments: Chief Human Resources Officer SEB.

Shares in Loomis as of December 31, 2020: 500 (privately held)

Other information: Independent of major shareholders and the Company.

Cecilia Daun Wennborg

Member of the Board of Loomis AB since 2013. Chairman of the Audit Committee. Born: 1963

Education: Bachelor of Science in Business and Economics, Stockholm University.

Experience: Vice President of Ambea AB, President of Carema Vård och Omsorg AB, CFO of Ambea AB and Carema Vård och Omsorg AB, Acting President at Skandiabanken, Head of Swedish Operations at Skandia and President of Skandia Link.

Other appointments: Board member of Bravida Holding AB, ICA Gruppen AB, Getinge AB, Atvexa AB, Hotel Diplomat AB, Oxfam in Sweden, Hoist Finance AB, Oncopeptides AB and CDW Konsult AB. Member of the Swedish Securities Council.

Shares in Loomis as of December 31, 2020: 1,400 (privately held)

Other information: Independent of major shareholders and the Company.

Lars Blecko

Member of the Board of Loomis AB since 2019.

Born: 1957

Education: Master of Science, Karlstad University

Experience: Regional President Loomis USA 2013–2018, President and CEO of Loomis AB 2008-2013, CEO of Rottneros AB 1999-2008, Senior Vice President Sales and Marketing Cardo Rail AB, and Managing Director Radiopharmaceuticals within the DuPont Group in Belgium, Switzerland, Germany and UK.

Other appointments: Chairman of Polygon AB. Board member of Ramudden AB and Axel Johnson Inc. Lars Blecko provided consulting services to Loomis Armored US LLC.up until december 31, 2020.

Shares in Loomis as of December 31, 2020: 51,668 (privately held)

Other information: Independent of major shareholders. Not independent of the Company.

Board of Directors

Jan Svensson

Member of the Board of Loomis AB since 2006.

Member of the Remuneration Committee.

Born: 1956

Education: Mechanical Engineer and Bachelor of Science in Business and Economics, Stockholm School of Economics.

Experience: President and CEO of Investment AB Latour 2003-2019.

Other appointments: Chairman of AB Fagerhult and Tomra Systems ASA. Board member of Assa Abloy AB, Stena Metall AB, Nobia AB, Herenco Holding AB, Climeon AB and BillerudKorsnäs AB.

Shares in Loomis as of December 31, 2020: 4,000 (privately held)

Other informationo: Independent of major shareholders and the Company.

Johan Lundberg

Member of the Board of Loomis AB since 2019. Member of the Audit Committee. Born: 1977

Education: Master of Science in Business, Stockholm School of Economics.

Experience: Founder and CEO of NFT Ventures AB. CEO of Betalo/PFC AB. Management positions at Paytech and Mastercard International.

Other appointments: CEO of NFT Ventures AB. Chairman of Investment AB Stentulpanen. Board member of Betsson AB and Ölands Bank AB. Deputy board member of NFT Ventures AB.

Shares in Loomis as of December 31, 2020: 500

Other information: Independent of major shareholders and the Company.

Sofie Nordén

Member of the Board of Loomis AB since 2017.

Employee representative, appointed by the Swedish Transport Workers Union. Born: 1984

Shares in Loomis as of December 31, 2020: 0

Anna Fernström

Member of the Board of Loomis AB since 2021 Employee representative, appointed by the Swedish Transport Workers Union. Born: 1980

Shares in Loomis as of December 31, 2020: 0

Auditor

Peter Ekberg Deloitte AB Born: 1971 Authorized Public Accountant and member of FAR. Auditor in charge from 2018. Other audit assignments: Fabege, SJ and Swedish Match. Shares in Loomis as of Dec. 31, 2020: 0 Address: Deloitte AB, 113 79 Stockholm.

Group Management

Patrik Andersson President and CEO Born: 1963 Employed: 2016

Education: Master of Science in Business Administration and Economics**, International Business Program, University of Lund.

Experience: President of Orkla Foods Sweden, President and CEO of Rieber & Son, President of Wasabröd globally within Barilla Group and senior positions within Unilever Group.

Other appointments: Board member of of Ecolean AB and AAK AB.

Shares in Loomis as of December 31, 2020: 12,919 (privately held)

Additional shares in Loomis*: 7,106

Kristian Ackeby Chief Financial Officer Born: 1977

Employed: 2018

Education: Bachelor of Science in Business and Economics**, University of Skövde.

Experience: CFO Lindab, Vice President Corporate Control within Autoliv Group and Financial Manager of Coop Inköp & Kategori.

Other appointments: Board member of Naturstenskopaniet International AB.

Shares in Loomis as of December 31, 2020: 5,500 (privately held)

Additional shares in Loomis*: 2,043

Sara Björkman Chief Compliance Officer Born: 1971 Employed: 2020

Education: Master of Law, University of Stockholm

Experience: Head of Compliance Services and HR at Zeb Consulting, Head of Banking law division at Finansinspektionen (FI), Head of Corporate Credit and Collection department Nordic at American Express.

Other appointments: –

Shares in Loomis as of December 31, 2020: 0

Additional shares in Loomis*: 0

Johannes Bäckman

Head of M&A Born: 1964

Employed: 2013

Education: Master of Science in Business, Stockholm School of Economics, Chinese and Thai language studies at Stockholm, Lund and Beijing universities.

Experience: Corporate Development Director, Managing Director South East Asia and Director of Mergers and Acquisitions, Xylem Inc.

Other appointments: –

Shares in Loomis as of December 31, 2020: 3,585 (privately held)

Additional shares in Loomis*: 847

Kristoffer Labuc

CEO of Loomis Pay

Born: 1984

Employed: 2020

Education: Master of Science in Economics and Business Administration, Stockholm School of Economics (SSE).

Experience: Vice President CEO Office at Klarna, Director Strategy & Insights & IT at McDonald's Sweden.

Other appointments: –

Shares in Loomis as of December 31, 2020: 100 (privately held)

Additional shares in Loomis*: 0

* Relating to Incentive Scheme 2019.

** Or equivalent education.

Group Management

Aritz Larrea President and CEO USA Born: 1973 Employed: 2014 Education: Executive Master in

Business Administration, Instituto de Empresa

Experience: Country President Loomis Spain, President Grupo Segur, Spain.

Other appointments: –

Shares in Loomis as of December 31, 2020: 13,377 (privately held)

Additional shares in Loomis*: 6,016

Georges López Periago

President and CEO Europe and Latam Born: 1965

Employed: 1985

Education: Master of Science in Business and Economics, various management courses within the Company..

Experience: Regional President Southern Europe, Country President for Loomis France and Spain and Cash Center Manager Securitas CHS.

Other appointments: –

Shares in Loomis as of December 31, 2020: 15,852 (privately held) Additional shares in Loomis*: 8,230

Mårten Lundberg

Chief Human Resources Officer Born: 1965 Employed: 2014

Education: Bachelor of Applied Science in HR from Stockholm University and Executive Master in HRM from Bocconi University, Milan.

Experience: HR Manager Market Units at Eniro AB, HR Director Skandia Norden, HR Manager Swedbank International, Head of Compensation & Benefits Swedbank, HR If P/C Insurance and Sales & Marketing Skandia.

Other appointments: –

Shares in Loomis as of December 31, 2020: 6,433 (privately held) Additional shares in Loomis*: 916

Martti Ojanen Group Head of Risk Born: 1962

Employed: 2009

Education: Master of Science in Business and Economics, Växjö University. Experience: Vice President Risk Management Marsh AB.

Other appointments: –

Shares in Loomis as of December 31, 2020: 11,377 (privately held) Additional shares in Loomis*: 934

* Relating to Incentive Scheme 2019.

** Or equivalent education.

Board signatures Auditor's statement

To the Annual General Meeting of Loomis AB (publ.), corporate identity number 556620-8095

Engagement and responsibility

It is the board of directors that is responsible for the corporate governance statement for the financial year 2020 on pages 39–57 and that it has been prepared in accordance with the Annual Accounts Act.

Scope and focus of the examination Our examination has been conducted in accordance with FAR's auditing standard RevU 16 The auditor's examination of the corporate governance statement. This means that our examination of the corporate governance statement

is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.

Opinion

A corporate governance statement has been prepared. Disclosures in accordance with chapter 6, section 6, second paragraph, items 2–6 of the Annual Accounts Act and chapter 7, section 31, second paragraph of the same law are consistent with the annual accounts and the consolidated accounts and are in accordance with the Annual Accounts Act.

Stockholm, March 25, 2021 Deloitte AB

Peter Ekberg Authorized Public Accountant

Alf Göransson	Jeanette Almberg	Cecilia Daun Wennborg
Chairman of the Board	Member of the Board	Member of the Board
Jan Svensson	Johan Lundberg	Lars Blecko
Member of the Board	Member of the Board	Member of the Board
	Sofie Nordén

Stockholm, March 25, 2021

Board of Directors of Loomis AB

employee representative

Introduction Strategy Operations Corporate Governance Report › Sustainability Report Financial statements

Sustainability Report

› Process and strategy	55	› KPI Summary and Key Ratios	73
› Sustainability › Resultat governance	79 57	› GRI Index	79
› Method and materiality analysis	71	› Signatures and auditor's statement	81

Sustainability Report

The report1) covers the period from January 1 to December 31, 2020, and describes the Company's sustainability work using a sustainability platform with six focus areas based on materiality analysis, challenges, targets, KPIs and results. The report was prepared in accordance with the guidelines in the Swedish Annual Accounts Act and is inspired by the GRI methodology. >See the GRI Index to refer to standards selected.

Loomis's approach to creating long-term and sustainable value

Results materiality analysis	ESG Index2)	Funneled into six focus areas	Loomis policy	Long term value created
Risk management, health, safety, training	S, G	Zero vision for injuries. Target 2021: 0 injuries from violence and traffic	Sustainability Policy, Code of Conduct, Risk Policy	Loomis strives to proactively reduce risk and prevent injuries. This supports the creation of a safe environment and builds trust.
Carbon emissions, fuel- and energy consumption	E	Decrease carbon emissions. Target 2021: -30%	Sustainability Policy	Transition to renewable fuel and energy creates value for the envirornment, for social matters and economic growth.
Waste handling, reduce and recycle waste	E	Decrease plastic use Target 2021: -30%	Sustainability Policy	Reduced usage, transitioning production to re cyled material, and increasing sorting at source is value created primarily for the environment.
Equal- and human rights, labor issues	S, G	A fair and equal – opportunity employer	Sustainability Policy, Code of Conduct	Our employer responsibility is a matter of trust, diversity and corporate culture. This is our founda tion to create an attractive workplace, and ensure the well-being for employees.
Ethics, values, anti-corruption	S, G	Zero tolerance for unethical behavior	Sustainability Policy, Code of Conduct, Anti Bribery Policy, AML Policy	Ethics and moral builds trust for the business with all stakeholders, and give the right prereq uisites to continue develop the business.
Reduce crime, local social projects, stakeholder dialogue	S, G	A local player	Sustainability Policy, Code of Conduct	Through collaboration and dialogue with stake holders Loomis contributes to a positive devel opment of the society it operates within.

Figure 1: Loomis's goal for its sustainability efforts involves taking responsibility by transparently creating lasting and long-term value for the Company's stakeholders. The illustration presents Loomis's process for defining and establishing the Company's role, responsibility and the value the Company creates through its operations. It also shows which UN's Sustainable Development Goals (SDGs/Global Goals) the Company's actions address and the policies and targets that exist to steer the course in the right direction. 1) This is Loomis's sixth Sustainability Report and the third one to be integrated into the Annual Report. 2) ESG represents: Environment, Social, Governance.

Creating long-term and sustainable value

Loomis provides payment solutions that can be used by everyone in society, irrespective of whether they choose cash, card or a digital payment method. We consider it our responsibility to run a business that supports long-term sustainable development from a financial, social and environmental perspective for the benefit of all our stakeholders. Our responsibility is visualized in a sustainability platform with six focus areas, designed in 2017 and integrated into the business model in 2018, and KPIs to transparently monitor how lasting and long-term value is being created. >See Loomis's sustainability platform on page 57.

The work's focus is established by the Board in the Sustainability Policy1) . The President and CEO bears ultimate responsibility but daily management is delegated to the Country Manager who is also responsible for compliance with the Sustainability Policy.

Our sustainability work (>see figure 1 on page 55) was designed in a structured consultation process with Loomis's stakeholders based on the GRI methodology to identify relevant material aspects. This process has helped to increase awareness of our responsibility and identify the value created, which UNs SDG are supported, and policies and targets to guide the work.

As a transport-intensive company with strong risk and security considerations in day-to-day operations, the outcome of the materiality analysis specifically identifies the following as material aspects: responsibility for employee safety, environmental- and risk management, and maintaining ethical behavior.

The outcome was funneled into a sustainability platform with six focus areas: 1. Zero vision for injuries, 2. Reduce carbon emissions, 3. Reduce plastic use, 4. Be a fair and equal opportunity employer, 5. Zero tolerance for unethical behavior, and 6. Loomis's role as a local player. The Sustainability Policy incorporates all areas and also emphasizes our respect for human rights and labor law in line with Loomis's agreements with parties in the respective labor markets. Ongoing dialogue with various stakeholders is incorporated to maintain a robust materiality analysis process.

There are key performance indicators (KPIs) for each focus area and they are monitored regularly and the outcomes reported to the Board and in the Annual Report. >See management approach on page 57.

Looking forward

Initially, the focus has been on implementing the framework internally, training staff and ensuring that data is collected and reported. With this in place, the Group is now expanding its activities. Although Loomis has many years of experience in working toward financial targets, the sustainability targets are newer and an important priority in our development. The 2018–2021 strategy period provides vital insights and underscores lessons learned.

In 2020 Loomis has, for example, taken proactive steps in preparation for the new EU taxonomy and updated reporting requirements in the NFRD. To be prepared for the most material aspects and to adapt in time for future amendments, we have compiled information and prepared a gap analysis.

Ahead of our next strategy period the sustainability platform is being updated according to the TCFD recommendations2) and climate targets are being established based on SBTi3), with long term targets for 2030 and 2050. Loomis intends to continue setting emissions targets in line with the Paris Agreement4). The impact of climate risk on Loomis's business will be described in more detail. To some extent climate risk is already incorporated into our ongoing risk management as extreme weather is common in several of the markets. Floods, hurricanes, human vulnerability etc. are addressed on an ongoing basis in Loomis Business Continuity Plans (BCP) used in all of our markets.

¹⁾ Loomis's Sustainability Policy is published at www.loomis.com. 2) The Task Force on Climate-related Financial Disclosures is a model for companies to identify climate-related financial risks and opportunities. 3) The Science Based Targets initiative is a model for companies to set climate targets that are in line with scientific models. 4) A temperature rise of less than 2 degrees Celsius.

Sustainability governance of the six focus areas

Figure 2: Sustainability is built into the Company's business model and this supports operational implementation. The sustainability platform has six focus areas.

This section describes each focus area, their materiality, targets, risks and challenges, management approach, implementation and the key ratios to monitor our progress, and lastly 2020's results.

1 Zero vision for injuries

Target

Loomis's two most important areas of responsibility to its employees are zero loss of life and zero workplace injuries. Zero loss of life has been a target in Loomis's Risk Policy for many years. The vision on zero workplace injuries was added into the Sustainability Policy in 2018, and the target of zero injuries from external violence and in traffic by 2021 is included in the current strategy period. These targets, individually or combined, have an important connection to employee health and safety while securely transporting customers' cash and valuables.

Challenges, risks, and opportunities

Loomis's business is based on taking on the customers' risk associated with managing cash and valuables. Every day throughout the year Loomis employees are working to ensure that cash is available in society. Operational risk is a part of their daily work. Those risks and challenges, internal and external, associated are well-known: workplace injury risk and the risk of loss of the customers' cash and valuables due to criminality or failures in procedures. This is a two-fold responsibility for Loomis and it is a considerable undertaking to minimize risk, maintain high security standards and to always protect people and property. Loomis's ability to accomplish this has a direct impact and significance, not only for the employees and customers, but also for how we develop as a company over time. Minimizing risk requires efficient processes and routines, as well as an ability to identify opportunities to constantly develop risk management strategies.

Management approach and implementation

Proactive and effective risk management is crucial for ongoing risk control in operations. Loomis's risk management is regulated in the Risk Management Policy. All CIT/VIT operations must be safe for our staff, the customers and the wider population. Compliance with all external safety requirements, laws and regulations is imperative.

To proactively manage and minimize risk, and to ensure the health and safety of our employees at work, three

› Introduction	Strategy	Operations	Corporate Governance Report	›	Sustainability Report	Financial statements
Process and strategy	Sustainability governance	Method and materiality analysis	KPI Summary and Key Ratios	GRI Index	Signatures and auditor's statement

fundamental focus areas guide the work: operational risk management, proactive training for health & safety, and common ethics and values.

A strong risk management culture

Loomis's operational risk management follows robust processes and routines that are implemented to proactively and systematically identify, take stock of, evaluate, classify, manage, take action on, follow up and prevent various types of risk. Risks are evaluated based on two criteria: the likelihood that an event will occur and the severity of the consequences if the event should occur. The next step involves considering how the risk could impact profitability. This process is supported by a digital risk identification and audit system containing global, regional and local risk control functions. Any risk identified is monitored on a continual basis. All markets log and report every incident and injury in the occupational health and safety management system.

Operational risk and safety assessment is an ongoing aspect of every new and existing business transaction. This is controlled at the corporate level through common guidelines, processes and tools to ensure uniform risk management at all levels and in all parts of the organization. Around 250 people work in operational risk management on a daily basis. Each market bears ultimate responsibility for ensuring risk minimization and the health and safety of the employees because they

"The well-being and safety of every Loomis teammate is my #1 priority." Randy Sheltra, EVP Risk Management, Loomis USA

have the best knowledge of their people, customers, buildings, geographies, values, legislation, standards and certification status. A practical example of a risk management plan is when operations and communities are impacted by strong and volatile weather conditions, such as hurricanes, or by earthquakes or a pandemic. All plans are systematically followed up for each country and comparisons are constantly being made between markets to identify ways to improve and maintain a strong risk management culture.

Proactive training for health and safety.

All employees at every level must understand and be able to manage the risks associated with their particular job. They must be aware of how it affects them personally and their colleagues, but also the people they encounter in their work. All employees handling cash and valuables work according to strict safety routines that are carefully designed to minimize identified risks. To minimize personal injuries from violence or in traffic, it is of utmost importance to ensure that all safety routines are firmly established in day-to-day work and that the employees are provided with professional development. To maintain a high and consistent level of safety over time, employees complete theoretical and practical training on an ongoing basis. One area covered is how to handle various acute, dangerous and unexpected situations. Simulations in various risk situations are carried out, and training is provided in self-defense and how to handle weapons. The safety of clothing, equipment and vehicles is tested and special software assists CIT drivers with safe driving. Since the organization is decentralized, the processes for health & safety and meeting various certification standards, such as ISO 45001 and OHSAS, may vary from market to market. But operational management is always managed, maintained and performed in a minimum compliance with national health and safety laws. Internal and external audits are performed on a regular basis.

Common ethics and core values

The third fundamental focus area to proactively minimize risk and ensure employee health and safety is to uphold common core values. Group Management and national management teams have an important responsibility to "set the tone from the top". All employees receive regular training in Loomis's Code of Conduct and Anti- Bribery Policy. New recruits go through an induction program covering health, safety, risk management and the common core values. Loomis also emphasizes recruiting the right people with the right values. All of this helps to minimize risk and improve the health and safety of Loomis's employees. >See Employer responsibility on page 28.

› Introduction	Strategy	Operations	Corporate Governance Report	›	Sustainability Report	Financial statements
Process and strategy	Sustainability governance	Method and materiality analysis	KPI Summary and Key Ratios	GRI Index	Signatures and auditor's statement

Key Performance Indicators

KPIs to monitor progress and results:

Number of workplace injuries from violence and in traffic1).
Number of traffic accidents/10,000 km.
Employee perception based on the statement: "Loomis's safety routines are designed to ensure my safety."

Monitoring and results in 2020

The risk and safety profile and associated plans were updated based on established routines and processes. Internal and external audits were performed according to plan. Education and training of employees was provided according to plan, although to a lesser extent than in a normal year due to Covid-19. Investment in safety equipment continued according to plan. The Loomis Academy education platform provides digital verification on employee training in our core values, Code of Conduct and the Anti-Bribery Policy.

Loomis was able to handle the challenges of the Covid-19 outbreak right from the start thanks to the Company's strong risk management culture and its BCPs2). Regular continuity planning enables Loomis to be well-prepared for various crisis scenarios. In 2020 BCPs were updated as the situation evolved. Employee health and safety is always a top priority.

Each market has detailed protocols to manage virus transmission, sickness, protection, information dissemination and safety. >See Employer responsibility on page 28.

Various risk scenarios are regularly staged to test how robust the organization is. This has involved practical exercises where teams from the HR, risk and purchasing departments worked together to test structures, preparedness and resilience. The exercises were analyzed and evaluated, and any identified shortcomings were rectified.

Special preparations are made in markets impacted by extreme weather. For example, ahead of hurricanes Laura and Sally in the USA in 2020, proactive steps were taken to store supplies of water and food, secure buildings, ensure access to mobile fuel tanks, update contact lists, test alarms, generators and surveillance, minimize cash volumes in SafePoint units and maintain constant contact with teams in affected locations. Following the hurricanes, daily status updates were held to get a full picture of the situation and to ensure that the employees' immediate and longer term needs were being met. All lessons learned were documented and routines updated in preparation for future events.

Since we introduced our zero vision for injuries and the 2021 target for zero injuries from external violence or in traffic, monitoring activities have provided valuable information on where initiatives are providing the most benefits.

In 2020 there were 125 injuries in traffic and from violence. This is a improvement compared with previous years, see graph below. A breakdown of 2020 results show that there were nine injuries from external violence and 116 traffic-related injuries. We are happy to see a sustained decrease in the number of injuries from violence. We believe this is in part due to our constant and proactive focus on safety.

Injuries from violence and in traffic1)

The fact that most injuries are traffic-related confirms the importance of safe driving. During the year Loomis continued to emphasize safety aspects and to train CIT drivers in safer driving. Software that supports safe driv-

1) Injuries at work from external violence and/or in traffic that result in absence from work. 2) Business Continuity Plans. 3) Higher number due to growth in new markets, more employees and expanded operations.

Introduction Strategy Operations Corporate Governance Report › Sustainability Report Financial statements Process and strategy Sustainability governance Method and materiality analysis KPI Summary and Key Ratios GRI Index Signatures and auditor's statement ›

ing behavior is now installed in 100 percent of the CIT vehicles in the USA and in 45 percent of vehicles in Europe. There is also a pilot project under way in the USA to test new camera technology purposed to prevent traffic accidents by, for example, warning the driver for approaching pedestrians.

In 2020 the number of vehicle accidents per 10,000 km driven has been reduced from 0.073 to 0.055. Bearing in mind the annual transport volumes of around 250 million kilometres, this is a good result.

85% of our employees agree with the statement: "Loomis's safety routines are designed to ensure my safety."

A further indicator for our work on safety is our employees' opinion expressed in three group-wide indicators. In regards to safety, everyone is asked, in conjunction with the annual course in the Code of Conduct, to respond to the following statement: "Loomis's safety routines are designed to ensure my safety." This gives us feedback from across the organization and allows every employee to be heard. 85 percent (85) of employees agreed with the statement in 2020.

2 Decrease carbon emissions

Target

Loomis has a long-term target to decarbonize and end dependence on fossil fuel and fossil energy sources. The short-term target is to reduce direct carbon emissions from operations1) by 30 percent from the base year 2017 to the end of 2021. This is a relative target, in other words emissions are to be reduced by 30 percent in relation to operating volume. It is an ambitious target given the short time to implement the change.

Challenges, risks, and opportunities

To guarantee a safe and efficient flow of cash and valuables in society, Loomis uses special cash in transit vehicles (CIT). An analysis of our total carbon emissions shows that the CIT fleet accounts for a majority, around 70 percent. Loomis's environmental impact is therefore largely a consequence of one of our two core business areas: CIT, which currently accounts for 60 percent of the business. Carbon emissions reduction is therefore an important priority for us.

The challenge in CIT operations is that cash and valuables are transported under very specific safety conditions using heavy armored vehicles. This makes a swift transition to electrification difficult. One transitional risk is that electrification of the type of vehicle that

Loomis needs to meet safety criteria will not happen quickly enough. Another transitional risk is if we are not prepared for future changes in national and international climate policies and carbon pricing. Loomis sees potential for growth in CIT and it is essential that this takes place without doing significant harm to the environment. We also believe there is good potential for growth in our new product portfolio, including Loomis Pay, which will contribute to a transition to a less carbon intense business.

Management approach and implementation

The Company will remain competitive by maintaining resource and operational efficiency. By seeking out new alternatives and freeing the Company from dependence on fossil fuels, Loomis is also contributing to a sustainable development in transport operations. Several parallel initiatives are under way to reduce the Group's carbon emissions and negative impact on the environment. They are focused on increased fuel efficiency, transport optimization, renewable fuel and fleet diversification. Some short-term gains are evident, but most will be achieved over a longer period.

Diversification: A long-term process of fleet diversification is under way. Around 70 percent (75) of Loomis' vehicles are armored for security reasons and are therefore heavy. We are investing in electrified vehi-

› Introduction	Strategy	Operations	Corporate Governance Report	›	Sustainability Report	Financial statements
Process and strategy	Sustainability governance	Method and materiality analysis	KPI Summary and Key Ratios	GRI Index	Signatures and auditor's statement

cles to the extent possible and, taking into account local cash management regulations, also in smaller lighter weight vehicles that are more fuel-efficient. The situation is not without challenges as security must never be compromised. The ever-present risk of robbery remains a challenge and makes an immediate transition to smaller vehicles more difficult. In order for an electric or hybrid vehicle to be approved for use in Loomis's operations it must meet a combination of criteria regarding price, range, safety, weight and load capacity. Pilot projects are under way and being evaluated in the USA and in several European countries.

Renewable fuel: Replacing standard diesel with 100 percent HVO1) or diesel with a high percentage of HVO in the mix provides reductions in carbon emission of up to 80 percent. However, progress is slow on increasing the supply of HVO. Outside the Nordic region the supply is essentially non-existent, and even within the Nordics the price is much higher than for fossil diesel. Loomis feels a responsibility for actively driving development in this area and has a positive view of using HVO when cost-effective and available.

Fuel efficiency and transport optimization: Driving fuel-efficiently reduces fuel consumption and therefore also emissions. Constantly improving transport efficiency while also reducing environmental impact provides benefits all around. In 2016 a program was launched of long-term investment in software installed in vehicles to monitor and measure fuel consumption and vehicle usage at both the individual and Group level. The program is reducing vehicle wear and tear, improving fuel efficiency and promoting route optimization, thereby reducing unnecessary driving.

The rollout of Loomis SafePoint is also helping to improve route efficiency as fewer pick-ups are needed, resulting in fewer kilometers driven and less fuel consumed. Increasing route density is an effective measure. Another factor making fuel efficiency gains harder to achieve is the regulatory frameworks the Company is subject to and which in several markets stipulate that, for safety reasons, vehicles must idle during cash deliveries. We estimate that our vehicles idle for up to 50 percent of the time, representing around 10 percent of the fuel consumption.

Energy consumption: The Group's energy consumption accounts for 12 percent of total carbon emissions. To minimize dependence on fossil energy and to reduce energy consumption in general, two initiatives are under way: one is a transition to renewable sources and the other is generating energy savings by, for example, consolidating the number of data centers.

Key Performance Indicators

KPIs to monitor progress and results:

Change in direct CO2e/operational volume, and change in total CO2e.
Fuel consumption/kilometer.
Share of vehicles with smart software installed.

Monitoring and results in 2020

Direct emissions from Loomis's own transport operations in 2020 were reduced by 13 percent in absolute numbers compared with 2017. This is in part explained by a decline in transport operations during the coronavirus pandemic, particularly in Europe. It has been challenging to achieve route efficiency because of the lower route density. Despite this challenge, the outcome for the year in terms of carbon emissions per kilometer driven was a reduction of 8 percent compared to the base year 2017. The US operations made the biggest contribution to the reduction.

Change in total carbon emissions, tCO2e

¹⁾ Stands for hydrogenated vegetable oil and is a renewable fuel for diesel engines. It can be described as a chemical copy of regular fossil diesel.

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Process and strategy	Sustainability governance	Method and materiality analysis	KPI Summary and Key Ratios	GRI Index	Signatures and auditor's statement

Analysis of our total carbon emissions in 2020 shows that CIT represents 70 percent, energy 12 percent and third-party transport operations 16 percent (certain CIT operations). The remaining 3 percent is from business travel and security bag production.

Energy consumption: Segment USA has consolidated its data centers. Similar initiatives are under way in Europe. It is estimated that this will result in an energy reduction of close to 70 percent in 2021. During the year Europe migrated and closed down four data centers achieving an energy reduction of 165 MWh. All new data centers are operated with renewable energy. The transition to safe green energy in our own buildings and in consultation with landlords is increasing. The effects of this are, however, not always apparent in our reporting as verification guarantees are needed according to generally accepted accounting principles.

Diversification: There is continuous evaluation of electric vehicles, so also in 2020. The results show that few manufacturers have so far managed to meet the complex combined criteria of range, weight and load capacity, and the security standards required for a CIT vehicle to ensure the security of the contents and the safely of personnel. When price is added to the equation, only a few individual vehicles provide a viable

1) HVO can be mixed in with regular diesel or be 100 percent HVO, which is called HVO100. 2) Fuel suppliers must increase blending of biodiesel in diesel in order to reduce overall greenhouse gas emissions.

solution and delivery times for these are long. Loomis has therefore now concluded that electric vehicles will be a solution contributing to a significant reduction in emissions in the medium to long term.

One important success in 2020 was that the two fully electric-powered, armored CIT vehicles that were delivered to Segment USA (as first CIT operator in the world) passed all of their tests. Safe and fully operational, this unique vehicle weighs around 8 tons and 11 tons with full payload. Building this solution has been a comprehensive undertaking, involving several customized, innovative proposals. Thanks to the success in 2020 we accelerate the purchasing pace. In 2022 there will be 22 such vehicles on the roads in the USA.

"Everyone , from the drivers to our customers, likes the electric vehicles." Eric Rickard, Vice President of Procurement, Loomis USA

This provides Loomis with good knowledge to inform future fleet diversification decisions. Unfortunately, it is not possible at this time to import the US vehicle into Europe as the manufacturer needs special permits and certifications that it does not have. Also the vehicle is not compliant with European regulation and laws. Good news is that the manufacturer is looking into producing other lighter-weight vehicles to meet additional specifications in the US market.

Another diversification success, also in the USA, is the transition to lighter-weight and less fuel-intensive vehicles. Lighter-weight vehicles made up 15 percent of the US vehicle fleet in 2019. In 2020 they represented 24 percent. These lighter vehicles are almost 40 percent more fuel-efficient than the larger ones used previously. Segement Europe is in talks with a new, promising manufacturer of electric vehicles with ability to customize to our specifications. Toward the end of 2020 there were also be new models of interest from established manufacturers to explore.

Renewable fuel: HVO fuel1) is the fastest solution to reduce carbon emissions from transport operations without the need to invest in new vehicles. Although there is a supply of HVO in Sweden, Norway and Finland, it is not available in other markets. Today the pace of production is slow, and demand exceeds supply. So far Loomis's needs have not been met because the HVO that exists in the market is being used by EU countries to meet their reduction obligations2).

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Progress of note in 2020:

The EU decision to extend Sweden's tax exemption for HVO means that Loomis Sweden can continue to invest in HVO100 to fuel all transport operations.
Loomis Spain has signed an agreement with Spain's largest fuel supplier to secure a future supply of HVO once the pace of production increases.
Loomis USA has successfully tested HVO100 in California. This means that HVO100 will make up 7 percent of all fuel used within Segment USA.

Optimization and efficiency: In 2020 there were a decline in route density, i.e. the number of stops per kilometer driven. This is because the pandemic has made it difficult to maintain consistent route efficiency.

Summarizing comments:

The 2020 emissions reduction of 8 percent per km driven is below the level we were aiming for. This is mainly due to a generally low rate of conversion in the industry. Part of the issue is the shortage of available HVO, a challenge we share with others in the transport industry. The way in which biofuel legislation and tax policies will develop will be highly significant. Another issue is that the transition to electric vehicles has a longer and more complex development curve than predicted. Due to the combined price, security/safety and range criteria, most existing alternatives are not

appropriate for Loomis's operations. Loomis continues to look for effective solutions and to work with new players in the market to find customized, price-efficient and viable options. A lot is happening in the market right now and this is likely to have a positive impact on our efforts to diversify the fleet.

Loomis's carbon intensity1) for 2020 was 8.49 a sustained improvement from 9.47 for the base year 2017.

"We are very proud to have offset 80% of our emissions in Spain."

Maria Machado, Project Manager, Loomis Spain

In conclusion, we highlight Loomis Spain's pilot project. After many talks with suppliers on need for HVO, a collaboration was initiated with the country's largest fuel supplier and producer. As a result, Loomis Spain is carbon offsetting 100 percent of all consumed fuel from the supplier, a total of 80 percent of Loomis Spain's emissions in its market. To ensure a high quality project that preserves the forest and promotes sustainable forestry, thereby contributing in effect to emissions reductions, a project with a solid reputation and REDD+ certification was selected, called Madre de Dios in Peru2). Emissions reduction is measured annually or every other year by the project developer. The reductions are third-party verified by a reviewing body.

3 Reduce plastics use

Target

Security bags for cash are made from plastic because this material effectively meets all of the comprehensive industry standards and safety criteria. The target is to increase resource efficiency while also reducing raw material consumption in production to decrease Group's plastic usage by 30 percent by the end of 2021, compared to the base year 2017.

Challenges, risks, and opportunities

Virgin plastic from fossil materials is produced using our planet's finite resources. Loomis is working on transform its production chain away from virgin fossil materials.

Management approach and implementation

As one of several means of reducing our climate impact, Loomis is taking steps to address the use of virgin fossil-based plastics in its operations. The standards for the security bags are verified in minute detail to minimize risk and increase security. To completely abandon plastic for another material is not a viable option today. Our primary focus is therefore:

Reducing and streamlining the total use of plastics;
Increasing the recycled plastic content in production to reduce the use of virgin plastics;
Increase circularity for used plastics.

1) Number of tons of carbon equivalents (tCO2e) in Scope 1 and 2 per SEK million in revenue. 2) http://www.reddprojectsdatabase.org

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To reduce the Group's plastic use in the short term, Loomis has identified two main approaches: using security bags made from recycled plastic or non-fossil plastic and reducing total volumes through increased efficiency. To move in the right direction Loomis is following a three-step process:

Coordinate purchasing and standardize security bag sizes and formats,
Collaborate with manufacturers on increasing the number of recycled materials used in production, 3. Increase circularity, i.e. ensure recycling of used plastics.

Since the start in 2018/19 big steps have been taken to help reach the established target. In 2019 the European segment implemented a new centralized agreement for security bags. This provides a common solution for resource-efficient and green manufacturing and delivery. It also involves extensive standardization to reduce the number of different formats and designs from 106 to 11. Using fewer types of bags makes it possible to reduce the amount of raw material consumed as both the number of security bag sizes and waste are reduced. The security bags are equally secure but are made from thinner materials consisting of 80 percent recycled plastics. This enables us to greatly reduce the amount of fossil-based virgin plastics used.

Key Performance Indicators

KPIs to monitor progress and results:

Change in total plastic used for security bags.
Share of recycled (non-virgin) plastic in production.
Share of used plastic sorted for recycling.

Monitoring and results in 2020

The 2020 results show that Loomis Europe reduced total plastic usage by 19 percent compared to 2017 levels. The 2020 reduction did not fully reach the anticipated level to meet the 2021 target. The reason is that several of Loomis's operations had a large supply in stock last year. But we believe that the target for 2021 still can be reached.

An improvement from 5 to 30 percent has been made in the initiative to convert security bag production to use mainly recycled plastics. This outcome is not quite on target, but we expect to see a significant increase by next year. Sorting and recycling of used plastics has increased from 7 to 17 percent since 2017.

Loomis Europe is carbon offsetting all production and associated transportation of plastic bags. In 2020 just over 600,000 kg of CO2e was offset through three projects: Clean Oceans Plastic Bank Worldwide, Forest Protection Pará in Brazil and the Gangakhed bioenergy project in India.

"We have transitioned from using zero to 80% recycled materials in our security bags. A significant progress for the environment."

Marcus Ohlin, Managing Director, Loomis e-store

The plastic project is based on building infrastructure to collect plastics in countries like Haiti, Indonesia and the Philippines. The collected plastic is exchanged at a local "plastic bank" for money, food, clean water or school fees to help people with basic needs while also cleaning up plastics in natural environments. The collected plastics are recycled and reintroduced into the production process.

The project in Brazil aims to prevent continued commercial deforestation by providing local families in the state of Pará with alternative sources of income, such as help in trading in açaí fruit. The project in India is reducing emissions of methane gas into the atmosphere by converting waste from sugar production to new energy. The project was even able to sell surplus energy to the local market.

Segment USA uses lower volumes of security bags because most of the customers provide their own bags. To reduce the volumes that Loomis can impact, a similar initiative is under way to reduce raw material consumption and introduce recycled plastic into pro-

duction, in the same way as in Europe. But as a result of Covid-19, ATM service volumes increased, which resulted in an increase in plastic bag usage, which is why the reduction for 2020 is not as high as expected. The good news is that Loomis USA succeeded in securing an agreement for bags made from 70 percent recycled materials. The agreement will go into effect in 2021 and the impact of it will be evident the same year.

Change in plastics use, thousand kg

2) UNI Global Union is an international federation of around 900 trade unions from around the globe.

4 Fair and equal opportunity employer

Target

Our employer responsibility has a direct link to matters of trust, diversity and corporate culture. Having motivated employees and providing them with professional development is one of the cornerstones of a sustainable organization. This is essential to offer customers firstclass service and a high level of safety every day. Our goal is to be a fair and equal-opportunity employer.

Challenges, risks, and opportunities

As a service company, Loomis is largely dependent on its people. Their professional skills and their ability to gain the trust of the customers are crucial to the Company's bottom line. Competition for talent is tough. It is a challenge in all markets, albeit in varying degrees, to recruit and retain personnel to the desired degree. As an employer we have a responsibility to create a stimulating workplace to attract and develop talent. This guarantees high-quality delivery and continued development of the business.

Loomis's focus as an employer can be summarized in three strategic areas of responsibility: continued investment in the common core values; increased investment in professional development; and greater knowledge transfer between countries. >See Employer responsibility on page 28.

Management approach and implementation

Since Loomis is a highly decentralized organization with operations in many markets with different cultures, it is important to operate based on common core values. This is provided by our business model, the Loomis Model, where the common core values, Code of Conduct, principles, and processes provide guidance in day-to-day operations. The Loomis Model gives the Company a framework that creates trust, security and clarity for all parties involved and at all levels. Whether it is a customer, shareholder or employee, the expectations of Loomis must be high.

Each Country Manager has ultimate responsibility for the employees and management of day-to-day operations. Loomis's Sustainability Policy establishes links to the UN's principles on human rights and labor laws (ILO)1). Annually we convene a European Works Council (EWC) meeting for open, productive dialogue between Loomis's union representatives and Group Management. Each country complies with the local laws and regulations in force. If there are grounds for establishing a collective agreement, Loomis participates in accordance with UNI2) as long as this does not negatively affect the conditions for employees compared to the local laws and regulations.

Core values and Code of Conduct

Loomis's employer responsibility is to ensure that all

¹⁾ International Labour Organization (ILO) is the UN's agency for labor issues.

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employees are offered a safe workplace and a good and transparent working environment. Loomis's Code of Conduct contains the core values and codes that clearly establish, among other things, our zero tolerance for all forms of discrimination, and that each individual must be treated with respect. The head office provides a global anonymous whistleblower mechanism, the Loomis Integrity Line, which is available to all employees in their respective language. The Code of Conduct establishes Loomis's core values: People, Service, Integrity. One way of ensuring that the Code and its core values are kept alive within the corporate culture is including the Code in the introduction package for new recruits. Since 2018 the goal has also been for all employees to complete an annual refresher course in the Code of Conduct. >See Loomis's Code of Conduct at www.loomis.com

Shared governance model

To further ensure a uniform approach in a decentralized corporation, Loomis has common principles for guiding the work of HR departments. Significant value is created when 24,0001) people understand and can live up to our customer promise. Guidance is provided by the tool called "Attract & Recruit – Retain & Develop". The principles cover processes for recruitment, pay levels, employee surveys and professional development. For example, to ensure a fair and objective assessment of salaries and benefits, a grandfather

principle is applied, i.e. an employee's line manager does not make the final decision, it must instead be approved by the manager two levels above.

It is our priority to have the right expertise in the right place within the organization. Our approach is to offer frequent training in health and safety, professional development. succession programs, as well as individual performance evaluation. The recruitment process follows a group-wide checklists including a mandatory background check for each potential employee. Local management has the responsibility to ensure that all employees have the right conditions, training and skills to perform their duties.

Each country conducts its own employee surveys on a regular basis and monitors progress. At the Group level an annual employee survey is conducted to monitor performance in relation to the three common KPIs part of the sustainability platform. Two are described below. >The third, "Zero vision for injuries", on page 57.

Key Performance Indicators

KPIs to monitor progress and results:

• Employee perception of two statements: "At Loomis we are treated fairly regardless of age, ethnicity, sexual orientation, disability or gender" and "I consider Loomis to be an equal-opportunity and responsible employer."

• Customer perception of the statement: "I consider Loomis to be a fair and equal-opportunity employer and a responsible employer and member of society."
Average number of training hours/employee/year

Monitoring and results in 2020

In 2020 a number of activities were implemented to support Loomis's responsibility as an employer. We continued to invest in our common core values, we added to our professional development programs and we increased knowledge transfer between countries. >See Employer responsibility on page 28.

Common core values

Loomis's business model, the Loomis Model, has been refined over a number of years and today it is a fundamental governance tool for shared cored values among all employees. Now fully digitalized, it is successfully used in, for example, recruitment contexts, management training programs and encounters with customers, to increase understanding for and knowledge of Loomis. Training in the Loomis Model and compliance is provided through the group-wide digital training platform, the Loomis Academy. In 2020 additions were made to the mandatory online course in the Loomis's Code of Conduct and compliance. Thanks to this platform we have digital verification of completion of the mandatory courses in our common core values, Code of Conduct and the Anti-Bribery Policy.

1) Full time and part time employees

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"Everyone we meet within the Company is happy and grateful for the new opportunities the Loomis Academy gives us." Richard Dixon, Loomis Academy, Loomis UK

Professional development

It is clear that as Loomis moves strategically up the value chain, new skills and capabilities are required. In 2020 a review of skills and talent within the organization continued. By expanding the business, reorganizing, recruiting and making acquisitions, Loomis has reinforced leadership and digital expertise within the Company. The Loomis Academy platform is a digital hub for Loomis's professional development strategy.

To raise educational quality and access to relevant courses for different markets, an education department was set up in the UK in 2020 with global responsibility for education and training. The platform is already being used successfully internally to more proactively share knowledge and lessons learned about existing and new products and services to increase efficiency and profitability within the Group. Knowledge about, for example, optimal cash management routines can be transferred from a country with high margins to countries with lower margins, or employees can learn about new customer offerings, such as Loomis Pay.

Knowledge transfer

Loomis is constantly aiming to improve its knowledge transfer infrastructure. Having common tools and sharing knowledge between countries are increasingly important factors. Internal communication requirements are always being raised, in particular for companies with decentralized operations and product segments. In 2020 there was a major initiative to facilitate the implementation of a global intranet solution. The countries are themselves responsible for the channel and content. A successful launch in one country provides a good example to follow and often sparks interest in other markets to replicate the success.

A good example of knowledge transfer within Loomis is the "Improvement Method for Change" project implemented in 2020. The purpose of the project is to assist the countries' local management teams with self-help in business development and continual renewal. In 2020 Loomis Pay was launched in Denmark and a number of managers and other employees have been trained in this new digital offering in a step-bystep training program.

Employee voices

To create transparency around how Loomis is living up to its responsibility as an employer, three statements are included as KPIs. The results are a direct reflection of the employees' and the customers' perception of Loomis. As part of the course in the Loomis Code of Conduct and Anti-Bribery Policy, the employees are asked how accurate they believe the two statements about Loomis as an employer are.

85% of our employees agree with the statement that we are treated fairly at Loomis.

The 2020 results show that 85 percent of the Company's employees agree with the statement: "At Loomis we are treated fairly regardless of age, ethnicity, sexual orientation, disability or gender." 83 percent of employees agree with the statement "I consider Loomis to be an equal-opportunity and responsible employer." This is the third year that they were asked to respond to these statements.

An annual customer survey is conducted with a focus on sustainability. One of the questions cover the customers perception of Loomis as an employer. The 2020 results show that 90 percent of the customers asked agree with the statement: "I consider Loomis to be a fair and equal-opportunity employer, and a responsible employer and member of society." This is the third such survey. >See the KPIs on page 73.

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5 Zero tolerance for unethical behaviour

Target

Loomis will maintain and promote business methods with the highest ethical standards. Loomis is constantly working on developing integrity management and compliance with rules – a task that can never be considered complete. Loomis does not, therefore, set a quantitative target, such as zero incidents, for this. Our approach and target is instead based on zero tolerance for unethical behavior. The target is to followup and take appropriate action on all incoming reports of fraudulent or unethical behavior.

Challenges, risks, and opportunities

For a company whose business model is based on trust, corruption and bribery are very important issues to address. To ensure sustainable development over time Loomis must be constantly vigilant and aware of the risks associated with unethical behavior to protect the Company, the employees and customer value.The risk of fraud or other deviations from the core values and policies always exists. The challenge is to constantly evaluate external and internal risk and keep the Company's core values for ethical standards alive in the organization. The solution is to have routines and processes in place to be able to pursue these efforts on an ongoing basis, to identify deviations and always take appropriate action.

Management approach and implementation

We have a strong framework for ethics within the Company. The Loomis Model is the main tool for ensuring this. The Model works as a moral compass for the entire organization, guiding people toward the core values, Code of Conduct, Sustainability Policy and ten key principles for how the business should be organized and run. >See Loomis Model on page 18.

Group Management and the management teams in each country have a responsibility to "set the tone from the top". With the insight that it is the employees who create the ethical culture at Loomis, the Code of Conduct is key to up-holding the zero tolerance rule. The employees' values need to be consistent with the Code of Conduct. We are taking steps to ensure that the common core values are kept alive. Each new recruit goes through an introduction program covering health, safety, risk management and the common core values. Loomis emphasizes recruiting the right people with the right values and all employees receive regular training in the Code of Conduct and Anti-Bribery Policy. This is helping to minimize risk and improve the health and safety of the employees.

In 2010 an independent, anonymous grievance mechanism, the Loomis Integrity Line, was established to report unethical and/or inappropriate behavior.

The Loomis Integrity Line is an independent, anonymous whistleblower system for reporting of unethical behavior.

Group employees can use this reporting tool by mailing or calling (local call in local language) to anonymously report any observations and to warn of behavior that they suspect may violate Loomis's core values, Code of Conduct or other policies, laws or rules in effect. The system is managed by a third party. All cases are reported to the Group's Chief Human Resources Officer or Group Head of Risk after assessment and categorization by the third party. There is also the possibility to report incidents directly to the chairman of the Audit Committee. All reports are followed up, investigated and the appropriate action taken.

Key Performance Indicators

KPIs to monitor progress and results:

Follow up 100% of reports of unethical behavior.
Customer perception of the statement: "Loomis is a trusted partner."
Number of employees educated in the Code of Conduct and the Anti-Bribery Policy during the year.

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Monitoring and results in 2020

In 2018 a target was set for all employees to receive training annually in Loomis's Code of Conduct and Anti-Bribery Policy. In the first year 60 percent of all employees completed the training. Now a total of around 25,000 employees have completed the course on at least one occasion.

Since the start in 2018, close to 25,000 employees have received training in Loomis's Code of Conduct and Anti-Bribery Policy.

In 2020, 13,840 employees completed the course. This provides verification that the Loomis Model and its ethics framework are reaching our employees. But in a tough year impacted by the pandemic, training did not reach the desired levels. A new system is in place for 2021 to ensure a higher completion rate.

In the annual customer survey the customers are asked if they agree that "Loomis is a trusted partner." The 2020 results show that 90 percent of customers asked agree with the statement. We consider this to be a great testimonial to customer trust.

The goal is for every report on potential unethical behavior to be followed up and the appropriate action taken. 100% of reports received in 2020 were followed up.

To underscore our zero tolerance for unethical behavior, every report on potential unethical behavior must be followed up and the appropriate action taken. 100 percent of reports of unethical behavior received in 2020 were followed up. Of the total number of reports received, most involve concerns about situations in local operations. No case in 2020 required the involvement of the President or Board of Directors.

6 Local player

Target

Being a local player is being part of the local community and knowing the customers and local environment in general. Being a responsible local player means to be a trusted partner in all our relations and working with and having a constant and transparent dialogue with various stakeholders.

Challenges, risks, and opportunities

What happens in society has direct significance for Loomis's operations. Loomis operates in multiple markets with different cultural characteristics. The heavily decentralized business model gives each market the freedom to have a local dialogue to more intimately monitor, understand and have a positive impact.

Management and implementation

Responsibility for implementing the Company's sustainability strategy based on the motto "Be a local player" rests with the organization in each respective country. This responsibility is about being close to the local market and the stakeholders there to understand market signals, identify changes in customer behavior, and have the right knowledge of which laws and rules affect relationships to the employees or the business. Good local dialogue paves the way for sound and lasting partnerships with local stakeholders. In 2020 there was ongoing dialogue with stake-holders, some of which is described on the next page.

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Stakeholder dialogue 2020	Examples of activities	Result/comment
Customers	Loomis's customers have a direct impact on the focus of Loomis's sustainability work. Two out of the total of 16 KPIs are therefore linked to customer perceptions of our progress. Since 2018 we have been collecting feedback annually from our cus tomers. They express their opinion on to what extent they agree with the following statements: "Loomis is a fair, equal-opportuni ty and responsible employer and member of society." and "Loomis is a trusted partner.".	The 2020 results show that 90 percent (88) agree with the statement: "I consider Loomis to be a fair and equal-opportunity employer and a responsible employer and member of society." 90 percent (90) agree with the statement: "Loomis is a trusted partner." The customers are also asked what they think about ongoing sustainability management. This is a way to check in with and obtain validation from one of our most important stakeholder groups. The 2020 results show that the cus tomers continue to stress the importance of ethical behavior (95 percent), responsibility to prevent injuries from violence or in traffic (94 percent) and to reduce carbon emissions from operations (89 percent).
Suppliers	Loomis's largest suppliers are within the automotive industry, facility management, IT equipment and insurance. Loomis's responsibility includes describing the Company's sustainability work and having a dialogue on how to we can all, for example, support human rights and reduce negative environmental impacts.	In 2020 the European organization led the way in communicating to its suppliers the Company's views on shared responsibility. Loomis is actively involved in finding vehicle manufacturers for the entire Group that meet the Company's extensive criteria for electric vehicles, and desire to in crease the use of green electricity in rented properties. In its next strategy period, Loomis intends to expand its dialogue with suppliers.
Investors and shareholders	In preparing for the next strategy period, Loomis consulted a group of its largest investors in 2020. The objective was to ob tain feedback on ongoing sustainability work and discuss how to structure work processes and reporting for the next strategy period.	The conversations have been inspiring and have resulted in increased knowledge. The focus has varied depending on the size and location of the investor, but the outcome clearly indicates a greater awareness of work linked to TCFD, SBTi and the EU's updates of NFRD and the upcoming taxonomy. The task of preparing Loomis for the upcoming changes has already begun.
Board of Directors	The Loomis Board of Directors and Audit Committee receive regular updates on sustainability outcomes.	Based on a decision made in 2020, Loomis is starting preparations to set climate targets for the next strategy period approved by SBTi.
Employees	Employee surveys are conducted at least once every two years in each country. In addition, Loomis checks in annually with the employees – in connection with the course in Loomis's Code of Conduct – on three statements about Loomis's employer performance.	1) "At Loomis we are treated fairly regardless of age, ethnicity, gender, sexual orientation, disability or gender." 85 percent agree. 2) "I consider Loomis to be a fair, equal-opportunity and responsible employer." 83 percent agree. 3) "Loomis's safety routines are designed to ensure my safety." 85 percent agree.
European Works Council	Through its Sustainability Policy, Loomis has established links to the UN's principles on human rights and labor laws (ILO). In 2020 Loomis held a European Works Council (EWC) meeting. This is a recurring forum for dialogue between Loomis's union representatives and Group Management.	The annual meeting took place via digital channels. It started with an open forum where union rep resentatives posed questions to the Group Management. Topics up for discussion were education via new technology and new products, Loomis's actions to defend the use of cash in society, and consequence by the pandemic. CEO, CFO and CHRO thereafter proceeded to share an update of the company's busines, priorities and finances. Head of Loomis Pay participated to present the new business segment. Closing the day was a presentation of the investment into the digital global learning platform, Loomis Academy.
Examples of other dialogues	Active and continual participation in various industry associa tions further enriches Loomis's stakeholder dialogue. Loomis participates in ongoing dialogue with industry associations throughout the year.	For example: ESTA, UNI, Central Transport Workers' Union, NACA, IACOA, ASIS, APROSER, Almega – the Employers' Organisation for the Swedish Service Sector, USP Valeur, NAF, AES, GÜSOD, VSSU, VKO, VSÖ, British Security Industry Association, SIA, National Security Inspec torate, Banknote Watch, British Retail Consortium, Scottish Grocers Federation, Disclosure and Barring Service, Link Up, SafeContractor and Fleet Operator Recognition Scheme, Aseva, Bundesverband Deutscher -Geld- & Wertdienstleister (BDGW)

Method and materiality analysis

Loomis's sustainability platform is designed based on legal provisions in the Swedish Annual Accounts Act and the outcome of materiality analysis according to GRI standards. The process has helped Loomis to determine which environmental, financial and social factors the Company should concentrate on and report on.

Materiality analysis

A two-step process began in 2016 to identify the Company's material aspects and boundaries; first in a self-evaluation within the Extended Group Management Team (EGMT) and in step two in stakeholder dialogue with employees, customers and important

Loomis materiality analysis 2017

decision-makers. The outcome helped Loomis to gain a proper understanding of its impact and how it is related to the Company's business model and strategy.

Step 1: The self-evaluation process began with a survey among Group Management and regional management teams.

To rate material aspects in order to do business sustainably.
To identify and prioritize stakeholders for further dialogue. Outcome: customers, employees, authorities, Board of Directors and suppliers.
Analyze material aspects for stakeholders.

The internal rating of material aspects to do business sustainably resulted in five main areas being identified: 1. Values, ethics and the Company's Code of Conduct 2. Participation in social projects in local communities 3. Cost-efficiency 4. Reduction of carbon emissions 5. Labor management.

Step 2: The next step in evaluating Loomis's material aspects was an expanded stakeholder dialogue with: Board of Directors: The Board was asked the same questions as Group Management and regional management teams. The outcome confirmed management's view.

Customers: In the 2016 annual customer survey, customers in 15 countries were able to reflect on Loomis and sustainability in the same way as in the internal process. The results showed that customers and Loomis's internal decision-makers were largely of the same opinion. In 2017 a review and validation of the outcome was conducted through qualitative customer interviews and the materiality analysis was validated. This laid the foundation for the current sustainability platform. In annual customer surveys the Company continues to check in with customers about its sustainability performance.

Relevance for Loomis's EGMT taking into account environmental and social and financial sustainability impacts.

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Employees: Employees were asked in a similar way to customers about which areas they considered to be important for Loomis to focus on. The results were incorporated with those of the customers and the Board.

Reconciliation of materiality analysis and legal requirements

How and to what extent Loomis impacts the various aspects in the materiality analysis depends on how closely linked they are to the Company's operations. Even if Loomis does not have a direct impact on or control over all aspects, they are still included in the Company's value chain and are considered important. The outcome of the materiality analysis indicated the focus of sustainability work and the new platform. The material aspects were grouped into six focus areas with their respective targets and KPIs and were cross-checked against reporting requirements. The platform constitutes the basis for sustainability work that Loomis is pursuing in the first step up to the end of 2021.

Financial confirmation

As a financial confirmation of Loomis's material aspects, the Company's five largest cost items are: 1) Salaries and payroll costs, 2) Vehicle costs, 3) Cost of premises, 4) Technical equipment, and 5) Costs relating to risk and insurance policies.

Material risks

A description of risks with a material impact has been presented for each focus area. >Other strategic risks that have not been directly addressed within the framework of the Sustainability Report, such as data protection, are described in the Board's Report on Internal Control and Risk Management starting on page 43.

Accounting principles for ESG reporting

Data collection, validation and calculation Since 2018 the Group has used a third-party system (SaaS) to handle all ESG data. The system is tailored for reporting of data and KPIs, which facilitates and validates the process to systematically collect, confirm, calculate and report all sustainability data in the areas of health, the environment and safety. Each market reports data quarterly so that outcomes can be calculated on a regular basis in relation to the Group's KPIs. The data is verified by Loomis.

All climate reporting within Scope 1, 2 and 3 is based on the international Greenhouse Gas Protocol Initiative (GHG Protocol) and calculated by the third-party provider. In 2020 the emissions factors in the system's database were updated according to the normal procedures. Calculation of carbon emissions for energy purchases are based on the location-based method, which in turn is based on each geographically distinct country's emissions from electricity production, regardless of whether they pay for renewable electricity or not. Calculations on changes in carbon emissions are made in relation to the Group's operational volume. A transparent indicator for operational volume in relation to transport operations is the number of kilometers driven.

Employees

Employees are people employed by the Loomis Group. All data on gender distribution, job distribution, age distribution and collective agreements are based on reported number of employees at the end of the year. Absence is calculated as number of hours of absence due to illness in relation to planned work hours.

Independent review

The sustainability report is currently not subject to an independent assurance review or audit. However, the auditor of Loomis performs a statutory examination to evaluate whether a statutory sustainability report has been prepared in line with the Annual Accounts Act.

Contact information

Kristian Ackeby, Chief Financial Officer Jenny Palmblad, Sustainability Manager Loomis AB, Drottninggatan 82, 111 36 Stockholm, Sweden +46 8 522 920 00 [email protected]

Results based on Key Performance Indicators

Overview of all KPIs included in Loomis's sustainability platform and their development over time. Change measured against the base year 2017. Three targets have a 2021 deadline. Others have an indefinite horizon.

	2017	2018	2019	2020	Target
Social / Health and safety Target 2021: Zero workplace injuries from violence and in traffic
Share of employees agreeing with the statement: "Loomis's safety routines are designed to ensure my safety."	•	86%	85%	85%	100%
Number of injuries from violence and in traffic	165	214	186	125	0
Number of traffic accidents/10,000 km.	0.071	0.068	0.074	0.055	Reduce
Environment / Carbon emissions Target 2021: Reduce carbon emissions by 30%
Change in direct carbon emissions, CO2e/operational volume	156,124 tCO2e1)	-2%	-5%	-8%	-30%
Fuel consumption/km	0.22	0.21	0.21	0.21	Reduce
Number of vehicles with telematics installed for safer driving	20%	27%	76%	68%	100%
Environment /Plastic use Target 2021: Reduce plastics by 30%
Change in plastic volume, thousand kg.	1,810	-9%	-22%	-19%	-30%
Share of recycled plastic in security bags.	5%	10%	24%	33%	60%
Share of used plastics sorted for recycling.	7%	10%	16%	17%	Increase
Focus: Smarter energy supply
Average energy consumption kWh/m²	•	167	118	119	Reduce
Social / Social and Human Rights Focus: Fair and equal-opportunity employer
Share of employees agreeing with the statement: "At Loomis we are treated fairly regardless of age, ethnicity, gender, sexual orientation or, disability or gender."	•	84%	85%	85%	100%
Share of employees agreeing with the statement: "I consider Loomis to be a responsible and equal-opportunity employer."	•	84%	84%	83%	100%
Share of customers agreeing with the statement: "I consider Loomis to be a fair and equal-opportunity employer, and a responsible employer and member of society."	•	82%	88%	90%	100%
Average number of training hours per employee and year.	6	14	17	15	Increase
Governance / Anti-corruption Focus: Zero tolerance for unethical behavior
Share of reports of fraudulent or unethical behavior followed up, and appropriate measures taken.	100%	100%	100%	100%	100%
Share of employees receiving training in Loomis's Code of Conduct and Anti-Bribery Policy during the year.	•	60%	60%	58%	100%
Share of customers agreeing with the statement: "Loomis is a trusted partner."	•	90%	90%	90%	100%

1) For a full overview of the Company's carbon emissions see page 77.

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Process and strategy	Sustainability governance	Method and materiality analysis	KPI Summary and Key Ratios	GRI Index	Signatures and auditor's statement

Key ratios1)

Loomis had slightly fewer employees in 2020 than the previous year due to personnel furloughs during the pandemic.

Total number of injuries in 2020 was 125. This is a marked improvement compared with previous years. The injuries break down as 116 traffic-related and nine from external violence. An injury is defined as one that results in the person seeing a doctor or being absent from work the following day.

Ratio of serious injuries/employee is relatively low at Loomis. Net number for the year is 0.5%.

In 2020, despite the pandemic, Loomis's employees were able to do their jobs and the high attendance was maintained at about the same level as previous years.

in direct operational positions

The slightly downward trend line has a correlation to the pandemic and the fact that many employees have not been in the designated areas with access to the digital training platform Loomis Academy.

Average number of training hours in administration

As Loomis Academy gains traction we receive digital receipts on training otherwise not tracked.

1) Key ratios for Segments Europe and USA, 2017 and 2018, are updated to include Segment International's volumes. 2) Business Continuity Plans. 3) Higher number due to growth in new markets, more employees and expanded operations.

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We observe marginal shifts in age and gender, but basically too small to point out. We observe marginal shifts in age and gender, but basically too small to point out.

Employees covered by collective bargaining agreements,%

Loomis's Sustainability Policy establishes links to the UN's principles on human rights and labor laws (ILO). Complying with national laws is a minimum requirement. Employees in direct operational positions receiving performance review and career development, %

We see a positive trend line for performance review and career development for our employees within CIT, CMS and other operational tasks.

Number of employees in administration receiving performance review and career development, %

To balance up what might be a negative trend line we are overseeing the format for conducting performance reviews for our employees within adminiatration.

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Employees who have at least on one occasion been trained in the Loomis Code of Conduct since the start in 2018

Loomis Academy was rolled out within the Group starting in 2018. One of the first actions taken was to establish a training module for Loomis's Code of Conduct and Anti-Bribery Policy in all local languages. The accessibility of the platform is constantly improving and at the end of 2020, we had digital verification that 24,915 employees had taken courses.

Purchased plastic, thousand kg, Recycled plastic in sourcing and used plastics sorted for recycling, %

The amount of plastic purchased for security bags has been reduced by 19% since 2017. The amount purchased in 2020 was higher than the previous year due to several countries having supplies of plastic in stock in 2019.

Fuel consumption, 1,000 liters

Fuel consumption was down by 8% compared with the previous year and by 11% compared with 2017.

Loomis's Cash in Transit operations are extensive and vehicles are on the roads every day of the week around the clock. The number of kilometers driven on the roads was lower than in previous years due to the pandemic.

Cash in Transit, 1,000 km Energy consumption, kWh/m2

Energy consumption remains at the previous year's levels. Not reflected in the graph is a slightly positive trend where a number of countries in consultation with property owners have been able to secure a supply of green electricity.

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Carbon emissions, Cash in Transit, tCO2e, Scope 1

Total carbon emissions in Scope 1, direct emissions from Loomis's Cash in Transit operations, has decreased by around 13% since the start in 2017. That reduction includes a combination of fewer kilometers driven on the roads and thereby reduced fuel consumption. But we are also seeing the effect of Loomis USA transitioning its vehicle fleet from heavy vehicles to lighter-weight ones, and thereby reducing fuel consumption. Climate offsetting is not deducted but is instead reported as part of the total, equivalent to 80% of Loomis Spain's emissions.

Carbon emissions, Cash in Transit, tCO2e, Scope 2

Carbon emissions from energy consumption is slightly decreasing. It is mainly the consolidatiion of data centers we see contributing to this effect.

Carbon emissions, total, tCO2e, Scope 1, 2 and 3

The Group's total carbon emissions are in effect lower than the base year 2017 when the task of designing a process of oversight for the Group's emissions in Scope 1, 2 and 3 began. The data from that year contains some errors in the form of bad data within Scope 3. There is still no complete overview of upstream emissions within Scope 3.

Loomis carbon intensity increased slightly during the year, mostly attributed to the fact that services were maintained but at a lower route density as also indicated by a lower revenue.

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Loomis's Board of Directors by age and gender

Men >50 Men 30-50 Women >50

The graph shows board members as suggested by the nomination committee and voted by the Annual General Meeting. Refer to the presentation of Loomis's Board of Directors on pages 49-50.

Group Management by age and gender

Men >50 Men 30-50 Women 30-50

Refer to the presentation of Loomis's Group Management on pages 51-52.

Entity	Health and Safety Certification above legal requirements on occupational health and safety management systems	Health and Safety Committee	Ethics Committee
Loomis Argentina	–	Yes	No
Loomis Belgium	–	Yes	No
Loomis Chile	–	Yes	Yes
Loomis Denmark	PFA Sundhedsforsikring Pension-Danmark	Yes	Yes
Loomis Finland	–	Yes	Yes
Loomis France	–	Yes	Yes
Loomis Norway	–	Yes	No
Loomis Portugal	–	No	No
Loomis Slovakia	ISO 9001:2015, ISO 27001:2013, ISO 45001:2018, ISO 14001:2015	Yes	No
Loomis Spain	AR 990/2008 Occupational Safety & Health System (certified by AUDELCO) 2019-2023	Yes	Yes
Loomis UK	Alcumus Safe Contractor, NSI Cash Services Gold Standards & SIA Approved Contractor Scheme	Yes	No
Loomis Sweden	–	Yes	No
Loomis Switzerland	–	No	No
Loomis Czech Republic	–	Yes	No
Loomis Germany	ISO 9001:2015, DIN 77210-1:2018 Money and value services	Yes	No
Loomis Turkey	–	Yes	Yes
Loomis USA	SSH - Specialist in Safety&Health, OHSAS 18001, Occupational Health and Safety Assessment Series	Yes	No
Loomis Austria	–	Yes	No

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Process and strategy	Sustainability governance	Method and materiality analysis	KPI Summary and Key Ratios	GRI Index	Signatures and auditor's statement

GRI Index

The following index presents the Global Reporting Initiative Standards that are deemed material to Loomis's operations. GRI Standards published 2016 unless otherwise noted. Page references indicate where more information can be found in the Annual Report and Sustainability Report.

GRI standards	Comment or page	GRI standards	Comment or page
		Stakeholder engagement
GRI 102: GENERAL DISCLOSURES		102-40 List of stakeholder groups	>Page 70-72
Organizational profile		102-41 Collective bargaining agreements	>Page 75
102-1 Name of the organization	Loomis AB	102-43 Approach to stakeholder engagement	>Page 70-72
102-2 Activities, brands, products and services	>Page 4, 20-23	102-44 Key topics and concerns raised	>Page 70-72
102-3 Location of headquarters	Stockholm, Sweden	Reporting practice
102-4 Location of operations	>Page 24 och 25	102-45 Entities included in the consolidated financial statements	>Page 116
102-5 Ownership and legal form	>Page 36-42	102-46 Defining report content and topic boundaries	>Page 55-56, 70-71
102-6 Markets served	>Page 24 och 25	102-47 List of material topics	> Page 55-56, 70-71
102-7 Scale of the organization	>Page 4	102-48 Restatements of information	No
102-8 Information on employees and other workers	>Page 28-30	102-49 Changes in reporting	No
102-9 Supply chain	>Page 2	102-50 Reporting period	Jan 1 – Dec 31, 2020
102-10 Significant changes to the organization and its supply chain	>Page 83	102-51 Date of most recent report	April 3, 2019
102-12 External initiatives	>Page 36	102-52 Reporting cycle	Jan 1 – Dec 31, 2020
102-13 Membership of associations	>Page 70	102-53 Contact point for questions regarding the report	>Page 72
Strategy		102-56 External assurance	No
102-14 Statement from senior decision-maker	>Page 6-7
102-15 Key impacts, risks, and opportunities	>Page 9-12	GRI 201: ECONOMIC PERFORMANCE
Ethics and integrity		103-1 – 103-3 Management approach	>Page 36-42
102-16 Values, principles, standards, and norms of behavior	>Page 18-19	GRI 205: ANTI-CORRUPTION
102-17 Mechanisms for advice and concerns about ethics	>Page 18-19, 68-69	103-1 – 103-3 Management approach	>Page 36-42, 55, 68-69
Governance		205-2 Communication and training about anti-corruption policies and	>Page 55, 68-69
102-18 Governance structure	>Page 36-42	procedures
102-20 Executive-level responsibility for social, environmental, and economic	>Page 56	GRI 301: MATERIALS
topics		103-1 – 103-3 Management approach	>Page 55-57, 63-65
102-21 Consulting stakeholders on economic, environmental and social topics	>Page 70-72	301-1 Materials used by weight or volume	>Page 63-65, 76
102-22 Composition of the highest governance body and its committees	>Page 49-50	301-2 Recycled input materials used	>Page 76
102-23 Chair of the highest governing body	>Page 49	GRI 302: ENERGY
102-24 Nominating and selecting the highest governance body	>Page 36-42	103-1 – 103-3 Management approach	>Page 55-57
102-25 Conflicts of interest	>Page 40	302-1 Energy consumption within the organization	>Page 76
102-28 Evaluating the highest governance body's performance	>Page 36-42
102-30 Effectiveness of risk management processes	>Page 31-32
102-35 Remuneration policies	>Page 103-104
102-36 Process for determining remuneration	>Page 43-48
102-38 Annual total compensation ratio	>Page 103-104

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GRI standards	Comment or page
GRI 305: EMISSIONS
103-1 – 103-3 Management approach	>Page 55-57
305-1 Direct (Scope 1) GHG emissions	>Page 77
305-2 Energy indirect (Scope 2) GHG emissions	>Page 77
305-3 Other indirect GHG emissions in the form of business travel, third-party transport and production of security bags. (Scope 3)	>Page 77
GRI 401: EMPLOYMENT
103-1 – 103-3 Management approach	>Page 57-60
403: OCCUPATIONAL HEALTH AND SAFETY (2018)
103-1 – 103-3 Management approach	>Page 57-60
403-1 Occupational health and safety management system	>Page 31-32, 57-60, 78
403-2 Hazard identification, risk assessment, and incident investigation	>Page 31-32, 43-48
403-4 Worker participation, consultation, and communication on occupational health and safety	>Page 28-29, 70
403-8 Workers covered by an occupational health and safety management system	>Page 78
403-9 Work-related injuries	>Page 74
GRI 404: TRAINING AND EDUCATION
103-1 – 103-3 Management approach	>Page 55-57, 65-67
404-1 Average hours of training per year per employee	>Page 73, 74
404-2 Programs for upgrading employee skills	>Page 28-29, 65-67
404-3 Percentage of employees receiving regular performance and career development reviews	>Page 75
GRI 405: DIVERSITY AND EQUAL OPPORTUNITY
103-1 – 103-3 Management approach	>Page 55-57, 65-69
405-1 Diversity of governance bodies and employees	>Page 75, 78
GRI 406: NON-DISCRIMINATION
103-1 – 103-3 Management approach	>Page 55-57, 65-69
GRI 412: HUMAN RIGHTS ASSESSMENT
103-1 – 103-3 Management approach	>Page 55-57, 65-69
412-2 Employee training on human rights policies or procedures	>Page 55-57, 65-69

Stockholm, March 25, 2021

Board of Directors of Loomis AB

Jan Svensson Member of the Board

Signatures Auditor's statement

To the general meeting of the shareholders of Loomis AB (publ.) corporate identity number 556620-8095

Engagement and responsibility

It is the board of directors that is responsible for the sustainability report for the financial year 2020 on pages 59–85 and that it has been prepared in accordance with the Annual Accounts Act.

Scope and focus of our examination Our examination has been conducted in accordance with FAR's auditing standard RevR 12 The auditor's opinion

regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is substantially different and less in scope than an examination conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that our examination has provided us with sufficient basis for our opinion.

Opinion

A statutory sustainability report has been prepared.

Jeanette Almberg Member of the Board

Alf Göransson Chairman of the Board

Johan Lundberg Member of the Board

Lars Blecko Member of the Board

Cecilia Daun Wennborg Member of the Board

Stockholm, March 25, 2021 Deloitte AB

Peter Ekberg Authorized Public Accountant

Sofie Nordén

Member of the Board,

employee representative

›

Financial statements

› Administration Report	83	› Five-year overview	135
› Financial statements	88	› Alternative performance measures	136
› Notes	95	› Definitions	139
› Auditor's Report	130	› AGM	140

Administration Report Loomis AB

The Board of Directors (the Board) and the President of Loomis AB (publ) corporate identity number 556620-8095, registered office in Stockholm, hereby present the annual financial statements and consolidated financial statements for the 2020 financial year.

The Group's operations

Loomis offers national cash handing services in the USA, in major parts of Europe and in some parts of South America, as well as cross-border transportation of cash and precious metals and storage of valuables. Since the autumn of 2020, Loomis has also been providing digital payment solutions, Loomis Pay, which are primarily aimed at small and medium-sized merchants. The traditional services are mainly aimed at central banks, commercial banks, retailers, other commercial enterprises and the public sector. Loomis offers a comprehensive range of services in Europe* and in the USA except for Loomis Pay, which is rolled out. In Segment Europe, cash in transit (CIT) accounts for 60 percent (60) of revenue while cash management services (CMS) accounts for 26 percent (28) and cross-border transportation and other services accounts for 14 percent (12). In Segment USA, CIT accounts for 62 percent (62) of revenue and CMS for 34 percent (34) and cross-border transportation and other services accounts for 4 percent (4).

Loomis's operations involve taking over the customers' risks associated with managing, transporting and storing cash, precious metals and valuables. In light of the nature of the business, there is a risk of the loss of cash and valuables due to criminality or failures in procedures, and a risk of personal injury. Managing and controlling these risks is therefore a key aspect of the Company's operations, and a total of 250 individuals work on operational risk management at the Group, regional and national levels. Common risk management structures, processes and systems are established at the Group level and employed by all of the local operations and branches. Tools and processes have been established to identify, take action and monitor risk. The risk management organization works both proactively and reactively. This includes implementing preventive measures, monitoring the external environment and carrying out crisis management. The safety of the employees is always the main focus of risk management and employees at all levels must understand and be able to manage the risks associated with their particular operations. A focus on ethics and values as well as well-defined work routines are key aspects of the employees' professional development. Actively

monitoring the external environment also enables Loomis to anticipate possible incidents.

Significant events during the year

Acquisitions and divestments

In January 2020 Loomis AB announced that, through the wholly owned subsidiary Loomis Sverige AB (Loomis Sweden), it had entered into an agreement to acquire all of the shares in the limited liability company Nokas Värdehantering AB (Nokas Värdehantering), a subsidiary of Nokas Kontandthåntering AS in Norway. The enterprise value, i.e. the purchase price payable on a debt free basis, was around SEK 80 million. Nokas Värdehantering has around 220 employees and its net revenue over the 12-month period ending in September 2019 was around SEK 215 million. The operating margin, EBITA, was negative. These operations are reported within Segment Europe and are consolidated into Loomis's accounts as of the closing date for the transaction, June 15, 2020. The purchase price was paid on closing. Including integration costs, the acquisition had a negative impact on Loomis's earnings per share for 2020. The acquired business is expected to show a profit after the completion of the integration into Loomis's operations. Nokas CMS AB, a subsidiary of Nokas Värdehantering which has an ATM business in the Nordic region, was not part of the transaction and will remain part of the Nokas Group.

In February 2020 Loomis entered into an agreement to acquire all of the shares in Automatia Pankkiautomaatit Oy (Automatia) from its owners at the time Danske Bank, Nordea and OP Financial Group. The enterprise value, i.e. the purchase price payable on a debt free basis, was around EUR 42 million. Automatia operates Finland's largest ATM business under the Otto brand, but also offers cash supply services to bank branches, service boxes for retail and a digital platform for realtime payments. Automatia has around 30 employees. Its net revenue over the 12-month period ending in December 2019 was around SEK 42 million. Under the acquisition agreement, the sellers have signed long-term service agreements and will therefore also remain important customers of Automatia. These operations are reported within Segment Europe and were consolidated into Loomis's accounts as of the closing date for the transaction, December 2, 2020. The transaction was contingent on approval from the Finnish competition and consumer protection agency. The purchase price was paid on closing. Including

integration costs, the acquisition had a marginal impact on Loomis's operating margin, EBITA, and on profit per share for 2020. For further information about acquisitions implemented, refer to Note 12 .

Other significant events during the year

In March 2020, the Board of Directors of Loomis AB decided to withdraw the proposal of a dividend for 2019 of SEK 11 per share and at the same time announced the intention for the final dividend decision to be made at an extraordinary shareholders' meeting later in the year when the consequences of the pandemic could be better assessed. On November 4, the Board communicated that it had conducted a new assessment of the effects of the pandemic and the Company's financial position. The overall assessment of the Board was that there was reason for continued restraint as the pandemic still posed the same risk in society and it was still hard to obtain a full overview of its consequences. Based on this, the Board decided to propose a dividend of SEK 5.50 per share for 2019, equivalent to around SEK 414 million. The extraordinary shareholders' meeting held on December 10, 2020 voted in favor of the Board's proposed dividend. As a precautionary measure to decrease the risk of virus transmission, the Board decided not to convene a physical extraordinary meeting but instead to allow shareholders to exercise their voting rights through a mail-in vote.

In April 2020 it was announced that Loomis AB had signed a two-year credit agreement for SEK 1,200 million in the form of a term loan that will mature in April 2022. The arrangers of the loan are Danske Bank A/S, and Nordea Bank Abp. The loan may be used to finance working capital and investments, and for other corporate purposes.

The Annual General Meeting on May 6, 2020 voted in favor of the Board's proposal to introduce an incentive scheme (Incentive Scheme 2020). Similar to the previous year's incentive scheme (Incentive Scheme 2019), Incentive Scheme 2020 involves two thirds of the variable remuneration being paid out in cash the year after it is earned. The remaining one third will be in the form of shares in Loomis AB to be allotted to the participants at the beginning of 2022. The allotment of shares is contingent upon the employee still being employed by the Loomis Group on the last day of February 2022, other than in cases where the employee has left his/her position due to retirement, death or a long-term illness, in which case the individual

^* Argentina, Chile and Turkey are included in the European segment because these operations are reported and followed up as part of the European segment.

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will retain the right to receive bonus shares. The principle of performance measurement and other general principles being applied in Incentive Scheme 2019 will continue to apply. Loomis AB will not issue any new shares or similar instruments for Incentive Scheme 2020. To enable allotment of the shares, the AGM voted in favor of Loomis AB entering into a share swap agreement with a third party under which the third party will acquire the shares in its own name and transfer them to the Incentive Scheme participants. The Incentive Scheme will enable around 350 key individuals within Loomis to become shareholders in Loomis AB over time. This will increase employee commitment to Loomis's development for the benefit of all shareholders. To read the Board's full incentive scheme proposal, refer to the notice of the AGM at www.loomis.com.

The Annual General Meeting also voted in favor of the Board's proposal to amend the Articles of Association, including removing the possibility of issuing shares in different classes. The Company's existing Class B shares are now simply called ordinary shares. The share's ticker on Nasdaq Stockholm has been changed from LOOM B to LOOMIS. The first trading day for the share with the new ticker and ISIN code was June 23, 2020. The share's new ISIN code is SE0014504817.

In June 2020 Loomis announced that Kristoffer Laboc would take up the position as Managing Director of the New Payment Solutions business area. Kristoffer Laboc began in this role on October 1, 2020. His most recent position, before joining Loomis, was with Klarna.

On July 6, 2020 Loomis announced that it had restructured the management of physical foreign currency (FX) operations in Norway. Loomis Foreign Exchange AS in Norway (Loomis FX) decided to return its Norwegian license and has also received confirmation from the Norwegian financial supervisory authority that Loomis FX is no longer under its supervision. Loomis FX had limited operations in Norway with sales of just over of SEK 60 million in 2019, equivalent to around 0.3 percent of Loomis Group's total sales. Loomis AB, the Group's parent company, and Loomis's French FX company, CPoR, are pursuing an international expansion strategy within FX as communicated at the Capital Markets Day on September 5, 2019. The intention is that CPoR will f unction as a hub and manage the Group's combined FX operations.

In September 2020 Loomis announced the launch of the Loomis Pay solution in autumn 2020. Loomis Pay is a complete payment platform for merchants and handles all types of payments – cash, card or other digital options. The rollout of Loomis Pay has started in Denmark and

SEK m	2020	2019	2018	2017	2016
Consolidated statement of income
Total revenue	18,813	21,044	19,168	17,228	16,800
Operating income (EBITA)1)	1,775	2,601	2,200	2,093	1,890
Net income for the year	716	1,646	1,538	1,428	1,258
Consolidated statement of cash flows
Cash flow from operations	2,993	3,362	2,835	2,313	2,665
Cash flow from investment activities	–1,839	–1,989	–2,852	–1,619	–1,175
Cash flow from financing activities	–621	–1,049	473	–487	–1,510
Cash flow for the year	533	325	456	207	–20
SEK m	2020	2019	2018	2017	2016
Consolidated balance sheet
Capital employed	15,392	16,924	12,727	10,860	10,576
Net debt	6,619	7,332	4,305	3,823	3,929
Shareholders' equity	8,773	9,592	8,422	7,037	6,647

1) Earnings before interest, taxes, amortization of acquisition-related intangible fixed assets, acquisition-related costs and revenue, and Items affecting comparability.

it will also be offered in the Swedish market at the beginning of 2021. More and more markets will subsequently be able to enjoy the benefits of Loomis Pay. The Danish technology company GoAppified was acquired to assist Loomis in developing Loomis Pay. The purchase price amounted to around SEK 60 million. For more information on Loomis Pay, see the Loomis press release dated September 9, 2020.

In October 2020 Loomis announced that the following representatives of Loomis AB's shareholders will be members of the Nomination Committee for the Annual General Meeting 2021:

Elisabet Jamal Bergström, appointed by SEB Investment Management, Chairman of the Nomination Committee
Helen Fasth Gillstedt, appointed by Handelsbanken Fonder
Bernard Horn, appointed by Polaris Capital Management
Marianne Nilsson, appointed by Swedbank Robur Fonder
Jacob Lundgren, appointed by Andra AP-fonden

The Chairman of the Board, Alf Göransson, has convened the Nomination Committee to its first meeting and has also been co-opted to the Nomination Committee. The Nomination Committee shall prepare proposals for the Annual General Meeting in 2021 regarding the election of Chairman of the General Meeting, members of the Board of Directors, Chairman of the Board, auditor, fees for the members of the Board including division between the Chairman and the other Board

members, as well as fees for committee work, fees to the company's auditor and, if necessary, changes of the instructions for the Nomination Committee.

Due to the ongoing coronavirus pandemic, Loomis announced in November that it is unlikely that the previously communicated revenue target of SEK 24 billion for 2021 will be reached. As there is still uncertainty over market conditions in 2021, Loomis decided to remove the revenue target.

Revenue and income

The Group

Revenue for the period amounted to SEK 18,813 million (21,044). Real growth was –8 percent (5), of which organic growth was –9 percent (2). Most of the negative impact on revenue is due to the ongoing pandemic.

The operating income (EBITA) amounted to SEK 1,775 million (2,601) and the operating margin was 9.4 percent (12.4). The currency effect on operating income during the period was around SEK –92 million.

The operating income (EBIT) for the year amounted to SEK 1,304 million (2,422), which includes amortization of acquisition-related intangible assets of SEK –109 million (–101), acquisition-related

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costs of SEK –163 million (–101) and items affecting comparability of SEK –200 million (23). Acquisition-related costs in 2020 are mainly related to acquisitions in France and Sweden. The item affecting comparability of SEK –200 million consists primarily of costs relating to restructuring programs within the European segment and impairment of goodwill in one of the operations within the European segment. The 2019 item of SEK 23 million is largely capital gains on the divestment of the art logistics and storage business.

Income before tax of SEK 1,096 million (2,210) includes a net financial expense, including loss of monetary net assets, of SEK –207 million (–212).

The tax expense for the period amounted to SEK –380 million (–564), which represents a tax rate of 35 percent (26). The tax rate was mainly impacted by the fact that pre-tax profit decreased, in absolute terms, to a greater extent in countries with a lower tax rate. There was also an effect from goodwill impairment in the second quarter and in the fourth quarter from acquisition costs, which are not tax deductible.

Earnings per share before and after dilution amounted to SEK 9.52 SEK (21.88).

The segments

Europe*

Revenue amounted to SEK 9,788 million (11,498). The real growth of –12 percent (8) was positively affected by revenue attributable to the acquisition of Prosegur Cash's French operations in July 2019, the acquisition of Nokas Värdehantering AB in Sweden in June 2020 and the acquisition of Automatia in Finland in December 2020. Organic growth was –15 percent (2). Business developed well in the first two months of the year, but was negatively affected from March by the ongoing coronavirus pandemic. In May the European operations started to recover and this positive development, compared to the second quarter, continued in the third quarter. The positive trend ended in November when the infection rates started to rise again and restrictions in Europe were intensified.

The operating income (EBITA) amounted to SEK 588 million (1,429) and the operating margin was 6.0 percent (12.4). The operating margin fell during the period as the impact of the pandemic on volumes in the period March–December was significant. Cost-saving activities launched in April started to have an effect in the second half of the second quarter and continued to yield good results for the rest of the

year. The acquisition in France in July 2019 had a dilutive effect on the operating margin. During the period several of Loomis's European companies received government grants, mainly to provide relief for furloughed employees. The total amount received was around SEK 147 million.

USA

Revenue amounted to SEK 9,098 million (9,639) and real growth was –2 percent (2). Organic growth amounted to –2 percent (3). During the first quarter this year Loomis's organic growth was positive, but the negative effects in the rest of 2020, from the ongoing pandemic, resulted in negative organic growth for 2020 as a whole. The negative impact of the pandemic on volumes was, however, significantly lower in the USA than in Europe. This is mainly due to the structure of the customer portfolios. Revenue for the period from SafePoint accounted for around 17 percent (15) of the segment's total revenue.

The share of revenue from CMS for the period amounted to 34 percent (34) of the segment's total revenue.

The operating income (EBITA) amounted to SEK 1,425 million (1,372) and the operating margin was 15.7 percent (14.2). The main factors contributing to the improved profitability are a more profitable customer portfolio, higher revenue from SafePoint and efficiency improvement programs at the branches which have, among other things, reduced the number of overtime hours worked.

Cash flow

Cash flow from operating activities, excluding effects from IFRS 16, amounted to SEK 2,218 million (2,057), equivalent to 129 percent (81) of operating income (EBITA). The period's net investments in fixed assets amounted to SEK –986 million (–1,643), which can be compared to depreciation (excluding the effects from IFRS 16) of SEK 1,266 million (1,265). Investments made during the period were mainly in buildings, vehicles, machinery and equipment. Investments in relation to depreciation for the period amounted to 0.8 (1.3).

The Group's liquid funds at the end of the period amounted to SEK 4,802 million (5,073), of which SEK 2,746 million (3,418) pertains to liquid funds within the cash processing operations.

Capital employed

The total capital employed as of December 31, 2020 amounted to SEK 15,392 million (16,924), which represents 82 percent (80) of

revenue. Return on capital employed for the 2020 period amounted to 12 percent (15).

Shareholders' equity and financing

Shareholders' equity decreased in 2020 by SEK 819 million to SEK 8,773 million as of December 31, 2020 (9,592). The decrease is mainly explained by the translation difference of SEK –1,227 million due to a stronger Swedish currency. The return on shareholders' equity in 2020 was 8 percent (17) and the equity ratio was 35 percent (36).

Net debt amounted to SEK 6,619 million as of June 31, 2020 (7,332) and net debt/EBITDA amounted to 1.82 (1.65).

As of December 31, 2020 the total long-term credit facilities amounted to around SEK 8.7 billion. Unutilized credit facilities amounted to around SEK 4.0 billion on December 31, 2020, of which 1.1 billion was used as back-up for outstanding commercial papers. Available liquid funds amounted to around SEK 2.1 billion (see Note 18).

Environmental impact

The Group and the Parent Company are not engaged in any operations requiring a permit under the Environmental Code.

Employees

In 2020 the average number of full-time employees was 23,074 (24,895) in 24 countries (24). The gender distribution was 33 percent (32) women and 67 percent (68) men. Due to the nature of Loomis's operations, the Group's employees assume a considerable amount of responsibility every day. Based on the demands of the Company's operations, Loomis places great emphasis on recruiting the right employees and ensuring that they receive the necessary training. All employees undergo basic training as well as subsequent, regular additional training. The training programs have been adapted to each country and region where Loomis operates. Managers at various levels are offered leadership training to support them in their roles. Loomis also places great emphasis on all employees complying with the Group's core values.

Parent Company

Loomis AB is a holding company with subsidiaries in Argentina, Austria, Belgium, Canada, Chile, China, Czech Republic, Denmark, Finland, France, Germany, Hong Kong, Ireland, Norway, Portugal,

^* Argentina, Chile and Turkey are included in the European segment because these operations are reported and followed up as part of the European segment.

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Singapore, Slovakia, Spain, Sweden, Switzerland, Turkey, the UK, United Arab Emirates and the USA. Loomis AB is providing Group Management and support functions. The average number of full-time employees at the head office during the year was 29 (21). Net income for the year amounted to SEK 400 million (692). In 2020 a total of SEK 414 million (750) was distributed to the shareholders, representing a dividend of SEK 5.50 per share (10.00).

Risks and uncertainties

Information on financial risk management and the use of financial instruments in risk management can be found in Note 22.

The corona pandemic that broke out in early 2020 had a negative effect on the world economy and the economy for most of the year. For Loomis, this meant deteriorating conditions in a number of markets, especially in Europe. It cannot be ruled out that the pandemic may have a negative effect on Loomis's earnings and financial position even in 2021. Changes in the general economic conditions and market trends can have various effects on demand for cash handling services; for example, through changes in the proportion of cash purchases relative to card purchases, changes in consumption levels, the risk of robbery and bad debt losses, and staff turnover rates.

Information regarding the Loomis share

The total number of shares and votes in the Company amount to 75,226,032 and each share carries 1 vote. The Loomis share is listed on Nasdaq OMX Stockholm Exchange, the Large Cap Nordic list. As of December 31, 2020 the Company held 53,797 Class B treasury shares. For further information on the number of shares issued and the quota value, refer to Note 20. For information on the major shareholders, refer to the section under the heading "The share" on pages 33-34.

Sustainability Report for 2020

A Sustainability Report has been produced according to the Annual Accounts Act, Chapter 6 Section 10. The Sustainability Report is included in the 2020 Annual Report on pages 55–81.

Subsequent events

No significant events have occurred after the end of the year.

Outlook

The market for cash handling services continues to grow and in by far the majority of markets where Loomis operates, the volume of cash is growing in line with the economy. Increased interest among

customers in reviewing the risk posed to their own personnel is also expected to drive Loomis's business. Loomis is also able to manage the flow of cash more efficiently, resulting in cost savings for customers. No forecast is being provided for 2021.

Proposed appropriation of profits

The Board has decided to propose to the Annual General Meeting a dividend of SEK 451 million and to propose May 10, 2021 as the record day for the dividend. It is the Board's assessment that the proposed dividend will allow the Group to fulfill its obligations and make necessary investments.

The Parent Company's and the Group's statements of income and balance sheets are subject to adoption by the AGM on May 6, 2021.

At the disposal of the Annual General Meeting, before the proposed dividend, is SEK 4,770,899,347.

The Board proposes that the profits be appropriated as follows:

Total	4,770,899,347
To be carried forward	4,319,543,155
Dividend to shareholders (6,00 SEK/share)	451,356,1921)

1) Calculated based on the number of outstanding shares at the balance sheet date.

Guidelines for remuneration for Group Management

The following guidelines were adopted by the 2020 Annual General Meeting and are applicable until the 2024 Annual General Meeting.

Scope of the guidelines

These guidelines concern remuneration and other employment benefits to individuals who are part of the Loomis group management team, below referred to as the "Group Management". Furthermore, these guidelines only apply to agreements entered into after the adoption by the AGM and to any changes in existing agreements after the AGM.

If a Board member performs work for Loomis in addition to the assignment as Board member, the Board member shall receive cash remuneration on market terms, with consideration given to the nature of the assignment and the work effort. Such renumeration is resolved by the Board of Directors (or, if provided by law, by the general meeting).

Remuneration under employments subject to other rules than Swedish may be duly adjusted to comply with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these guidelines.

Basic principles and forms of remuneration

The overall strategy of Loomis is to lead the transition of cash management in society. A part of this strategy is that Loomis shall maintain and evolve the Loomis way of working by developing and stimulating new capabilities and skills. This, in turn, requires that Loomis is able to attract and keep competent management employees. For that reason, Loomis is working on the basis of the fundamental principle that renumeration and other terms of employment to Group Management are to be competitive and on market terms, which is made possible by these guidelines. Thus, these guidelines are expected to contribute to fulfilling Loomis's business strategy, long-term interests and sustainability. Further information regarding Loomis's business strategy is available on Loomis's website www.loomis.com.

The total remuneration to members of Group Management shall consist of fixed salary, variable remuneration, pensions and other benefits, as further elaborated in section Principles of dirrerent types of remuneration below. Additionally, the general meeting may – irrespective of these guidelines – resolve on, among other things, share-related or share price-related remuneration.

Since 2010, a recurring share related incentive scheme involving approximately 350 of Loomis key-employees, including the Group Management, has been resolved by the AGMs in Loomis AB. In addition to the recurring incentive scheme, the extraordinary general meeting in Loomis on 5 September 2018 adopted a long-term share save based incentive scheme for the Group Management and certain key-employees. Since the incentive schemes have been resolved by the general meeting, they are excluded from these guidelines. For more information regarding these incentive schemes, including the criteria which the outcome depends on, please see Loomis's website www.loomis.com.

Principles of different types of remuneration Fixed salary

The fixed salary for the Group Management within Loomis is to be competitive and on market terms and based on the individual executive's area of responsibility, powers, competence and experience.

Variable remuneration

In addition to a fixed basic salary, the Group Management may also receive a variable remuneration, which is to be based on the outcome in relation to financial goals and growth targets within the individual area of responsibility (Group, region or subsidiary). Variable renumeration may also be linked to individual performance targets. All variable remuneration shall be in accordance with the interests of the

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shareholders and is thereby expected to contribute to Loomis's business strategy, long-term interests and sustainability. For the President and CEO, the variable remuneration shall amount to a maximum of 85 percent of the total fixed cash salary during the measurement period for the criteria for awarding variable cash remuneration. For other individuals of the Group Management, the variable renumeration shall amount to a maximum of 100 percent of the total fixed cash salary during the measurement period for the criteria for awarding variable cash remuneration.

The Remuneration Committee shall, for the Board of Directors, prepare, monitor and evaluate matters regarding variable cash remuneration to the Group Management. Ahead of each measurement period for the criteria for awarding variable cash remuneration, which can be one or several years, the Board of Directors shall, based on the work of the Remuneration Committee, establish which criteria that are deemed to be relevant for the upcoming measurement period. After a measurement period has ended, it shall be determined to which extent the criteria have been satisfied. The Remuneration Committee is responsible for the assessment regarding variable remuneration to the CEO. With respect to variable remuneration to other members of Group Management, the CEO is responsible for the assessment, after consulting the Remuneration Committee. Evaluations regarding fulfilment of financial targets shall be based on established financial information for the relevant period.

Variable cash remuneration can be paid after the measurement period has ended or be subject to deferred payment. The Board of Directors shall have the possibility, under applicable law or contractual provisions, subject to the restrictions that may apply under law or contract, to in whole or in part reclaim variable remuneration, for example when it has been paid on incorrect grounds.

Pension

The pension rights of the Group Management shall be applicable as from the age of 65, at the earliest, and shall, to the extent the Group Management is not subject to pension benefits pursuant to collective agreements (ITP-plan), be provided pursuant to a defined contribution pension plan equivalent to maximum 30 percent of the fixed annual salary. For members of the Group Management who are not subject to collective agreements (ITP-plan), variable remuneration shall not be pension qualifying.

Other benefits

Other benefits, such as company car, life insurance, supplementary

health insurance or occupational health service are to be provided to the extent this is considered to be on market terms in the market concerned for each member of the Group Management. Premiums and other costs relating to such benefits may amount to not more than 10 percent of the fixed cash salary. Futhermore, housing allowance benefit may be added in line with Loomis's policies. Costs relating to housing allowance benefit may amount to not more than 25 percent of the fixed cash salary. Premiums and other costs relating to other benefits and housing allowance benefit may, however, amount to not more than 30 percent of the fixed cash salary.

Terms at dismissal/resignation

Members of the Group Management are to be employed until further notice. At dismissal, the notice period for the Group Management is to amount to a maximum of 12 months with a right to redundancy payment after the end of the notice period, equivalent to a maximum of 100 percent of the fixed salary for a period not exceeding 12 months. At resignation, the notice period shall amount to maximum 6 months, without a right to redundancy pay. Additionally, remuneration may be paid for non-compete undertakings. Such remuneration shall compensate for loss of income and shall only be paid in so far as the previously employed executive is not entitled to redundancy pay. The remuneration shall amount to not more than 60 percent of the monthly income at the time of termination of employment and be paid during the time the non-compete undertaking applies, however not for more than 12 months following termination of employment.

Preparation by the Board and decision-making in connection with matters regarding salaries and other benefits for the Group Management

The Remuneration Committee appointed among the members of the Board of Directors prepares matters regarding salaries and other terms of employment for the Group Management, which includes preparing the Board of Directors' resolution on proposal for guidelines for remuneration to Group Management. The Committee has no authority to decide but merely presents its proposal to the Board of Directors for adoption. Resolution on remuneration to the President and CEO is made by the entire Board of Directors. For other members of the Group Management, the decision is made by the President and CEO after consultation with the Remuneration Committee.

The Board of Directors shall prepare a proposal for new guidelines at least every fourth year and submit it to the AGM. The guidelines shall be in force until new guidelines are adopted by the general meeting.

Salaries and employment conditions for employees

In the preparation of the Board of Directors' proposal for these guidelines, salary and employment conditions for employees of the company have been taken into account by including information on the employees' total income, the components of the remuneration and increase and growth rate over time, in the Remuneration Committee's and the Board of Directors' basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable. The development of the gap between the remuneration to the Group Management and remuneration to other employees will be disclosed in the remuneration report.

Derogation from the guidelines

The Board of Directors may resolve to derogate from the guidelines, in whole or in part, if in a specific case there is special cause for the derogation and a derogation is necessary to serve the company's long-term interests, including its sustainability, or to ensure the company's financial viability. As set out above, the Remuneration Committee's tasks include preparing the Board of Directors' resolutions in remuneration-related matters. This includes any resolutions to derogate from the guidelines.

The Board's proposal for guidelines for remuneration for Group Management ahead of the annual general meeting 2021 The Board has proposed that the annual general meeting 2021 resolves on guidelines for remuneration for Group Management which materially corresponds to the guidelines adopted by the annual general meeting 2020, save for that the variable renumeration in

relation to the fixed cash salary to the President and CEO and other individuals of Group Management is raised to 100 and 112 per cent, respectively, (previously 85 and 100 per cent, respectively) and certain editorial changes.

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Consolidated statement of income

SEK m	Note	2020	2019
Revenue, continuing operations		18,454	20,411
Revenue, acquisitions		359	633
Total revenue	3, 4	18,813	21,044

Production expenses	5, 7	–14,015	–15,210
Gross income		4,798	5,833

Selling and administrative expenses	5, 7	–3,024	–3,233
Operating income (EBITA)		1,775	2,601
Amortization of acquisition-related intangible assets	5,13	–109	–101
Acquisition-related costs and revenue	5,12	–163	–101
Items affecting comparability	9	–200	23
Operating income (EBIT)		1,304	2,422

Financial income	10	31	63
Financial expenses	10	–211	–240
Loss on monetary net assets/liabilities		–28	–34
Income before taxes		1,096	2,210

Income tax	11	–380	–564
Net income for the year 1)		716	1,646

1) Net income for the year is entirely attributable to the owners of the Parent Company.

For explanation and reconciliation of alternative performance measures please refer to pages 136-138.

Data per share

SEK m	2020	2019
Earnings per share, before and after dilution	9.52	21.88
Dividend paid during the year	5.50	10.00
Number of outstanding shares (million)	75.2	75.2
Average number of outstanding shares before dilution (million)	75.2	75.2
Average number of outstanding shares after dilution (million)	75.2	75.2

Consolidated statement of comprehensive income

SEK m	2020	2019
Net income for the year	716	1,646
Other comprehensive income
Items that will not be reclassified to the statement of income
Actuarial gains and losses, net of tax	–3	–87
Items that may be reclassified to the statement of income
Translation differences	–1,227	421
Hedging of net investments, net of tax	119	–74
Other comprehensive income and expenses for the year, net after tax	–1,110	260
Total comprehensive income and expenses for the year 2)	–394	1,906

2) Comprehensive income is entirely attributable to the owners of the Parent Company.

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Consolidated balance sheet

SEK m	Note	Dec. 31, 2020	Dec. 31, 2019
ASSETS				SHAREHOLDERS' EQUITY AND LIABILITIES
Fixed assets				Shareholders' equity	20
Goodwill	12,13	6,884	7,094	Capital and reserves attributable to the owners of the Parent
Acquisition-related intangible assets	12,13	486	478
Other intangible assets	13	269	208
Buildings and land	14	942	946
Machinery and equipment	14	4,158	4,876
Right-of-use assets	15	2,645	2,911
Contract assets	3	139	199
Deferred tax assets	11	476	446
Pension plan assets	23	304	352	Long-term liabilities
Interest-bearing financial fixed assets	22	361	213
Other long-term receivables		231	172
Total fixed assets		16,894	17,893

Current assets
Accounts receivable	16	2,199	2,619
Other current receivables		156	110
Current tax assets	11	290	322
Prepaid expenses and accrued income	17	488	485
Interest-bearing financial current assets	22	67	61	Current liabilities
Liquid funds	18	4,802	5,073
Total current assets		8,002	8,670

TOTAL ASSETS		24,896	26,563

Note	Dec. 31, 2020	Dec. 31, 2019



	376	376
	4,594	4,594
	344	1,463
	3,458	3,158
	1	1
	8,773	9,592

	2,105	2,313
22	5,723	5,793
11	402	447
24	389	413
23	834	918
24	106	102
3	110	154
	9,669	10,141

	546	560
22	199	29
	600	668
24	187	193
11	184	199
19	2,468	3,021
25	1,514	1,495
24	186	76
26	570	590
	6,454	6,831
	24,896	26,563
	20

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Consolidated statement of cash flows

SEK m	Note	Dec. 31, 2020	Dec. 31, 2019
Operations
Income before taxes		1,096	2,210
Items not affecting cash flow	28	2,369	2,138
Financial items received		24	36
Financial items paid		–231	–247
Income tax paid		–483	–641
Change in accounts receivable		268	–150
Change in other operating capital employed and other items		–52	17
Cash flow from operations		2,993	3,362
Investing activities
Investments in fixed assets	13,14	–1,014	–1,709
Disposals of fixed assets		28	66
Disposals of operations		–	38
Acquisition of operations	12	–853	–384
Cash flow from investing activities		–1,839	–1,989
Financing activities
Dividend paid	20	–414	–750
Change in interest-bearing net debt excluding liquid funds		–420	–341
Issuance of bonds		–	2,795
Amortization of bonds		–	–1,000
Change in commercial papers issued and other long-term borrowing		213	–1,753
Cash flow from financing activities		–621	–1,049
Cash flow for the year		533	325
Liquid funds at beginning of year1)		1,655	1,308
Translation differences on liquid funds		–132	22
Liquid funds at end of year1)	18	2,056	1,655

1) Excluding liquid funds in cash processing operations. See also Note 18 Liquid Funds.

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Consolidated statement of changes in equity

	Attributable to the owners of the Parent Company
SEK m	Share capital	Other contri buted capital	Other reser ves	Retained earnings incl. net income for the year	Non con trolling interest	Total
Opening balance, January 1, 2019	376	4,594	1,102	2,349	1	8,422
Comprehensive income
Net income for the year	–	–	–	1,646	–	1,646
Other comprehensive income
Actuarial gains and losses, net of tax	–	–	–	–87	–	–87
Translation differences	–	–	421	–	–	421
Hedging of net investments, net of tax	–	–	–74	–	–	–74
Total other comprehensive income	–	–	347	–87	–	260
Total comprehensive income	–	–	347	1,559	–	1,906
Transactions with shareholders
Dividend	–	–	–	–750	–	–750
Share-based remuneration	–	–	14	–	–	14
Non-controlling interest	–	–	–	–	0	0
Total transactions with shareholders	–	–	14	–750	0	–736
Closing balance, December 31, 2019	376	4,594	1,463	3,158	1	9,592

				Attributable to the owners of the Parent Company
SEK m	Share capital	Other contri buted capital	Other reser ves	Retained earnings incl. net income for the year	Non con trolling interest	Total
Opening balance, January 1, 2020	376	4,594	1,463	3,158	1	9,592
Comprehensive income
Net income for the year	–	–	–	716	–	716
Other comprehensive income
Actuarial gains and losses, net of tax	–	–	–	–3	–	–3
Translation differences	–	–	–1,227	–	–	–1,227
Hedging of net investments, net of tax	–	–	119	–	–	119
Total other comprehensive income	–	–	–1,108	–3	–	–1,110
Total comprehensive income	–	–	–1,108	714	–	–394
Transactions with shareholders
Dividend	–	–	–	–414	–	–414
Share-based remuneration	–	–	–11	–	–	–11
Non-controlling interest	–	–	–	–	0	0
Total transactions with shareholders	–	–	–11	–414	0	–425
Closing balance, December 31, 2020	376	4,594	344	3,458	1	8,773

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Parent Company statement of income Parent Company statement

SEK m	Note	2020	2019
Other revenue		444	631
Administrative expenses	6, 7	–203	–257
Items affecting comparability		–3	–
Operating income (EBIT)		238	374
Result from financial investments
Result from participations in Group companies	10	108	506
Financial income	10	1,408	797
Financial expenses	10	–1,293	–945
Total result from financial investments		223	359
Income after financial items		461	733
Appropriations		–8	–
Income tax	11	–53	-41
Net income for the year		400	692

of comprehensive income

SEK m	2020	2019
Net income for the year	400	692
Other comprehensive income	–	–
Total comprehensive income for the year	400	692

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Parent Company balance sheet

SEK m	Note	Dec. 31, 2020	Dec. 31, 2019
ASSETS
Fixed assets

Intangible fixed assets		33	18
Machinery and equipment	14	16	11
Shares in subsidiaries	21	9,421	8,510
Participation in associated companies		38	31
Interest-bearing long-term receivables from subsidiaries	30	3,167	2,996
Other long term receivables		11	6
Deferred tax assets		1	–
Total fixed assets		12,687	11,571

Current assets
Current receivables from subsidiaries	30	15	36
Interest-bearing current receivables from subsidiaries	30	782	1,203
Other current receivables		2	6
Current tax assets		70	74
Prepaid expenses and accrued income	17	86	83
Liquid funds		363	269
Total current assets		1,318	1,671
TOTAL ASSETS		14,005	13,242

SEK m	Note	Dec. 31, 2020	Dec. 31, 2019
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	20
Restricted equity
Share capital		376	376
Total restricted shareholders' equity		376	376
Non-restricted equity
Other capital contributed		5,673	5,673
Retained earnings		–1,302	–1,583
Net income for the year		400	692
Total non-restricted shareholders' equity		4,771	4,781
Total shareholders' equity		5,147	5,158

Untaxed reserves		8	–

Long-term liabilities
Loans payable, external	30	5,670	5,716
Other Long-term liabilities external		9	–
Total long-term liabilities		5,679	5,716

Current liabilities
Current liabilities to subsidiaries	30	181	59
Loans payable to subsidiaries	30	2,736	2,213
Interest-bearing current liabilities, external		172	16
Accounts payable		21	15
Other current liabilities		17	8
Accrued expenses and prepaid income		45	58
Total liabilities		3,171	8,084
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		14,005	13,242

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SEK m	Note	2020	2019
Operations

Income after financial items		461	733
Items not affecting cash flow	28	221	774
Income tax paid		–40	27
Change in other capital employed		119	14
Cash flow from operations		761	1,548
Investing activities
Investments in fixed assets		–27	–7
Shares in subsidiaries		–1,029	46
Cash flow from investing activities		–1,057	39
Financing activities
Other changes in fixed assets		–177	–361
Decrease/increase in current financial investments		20	–214
Decrease/increase in liabilities		1,846	289
Issued commercial papers		–886	–385
Group contributions received		–	110
Dividend paid		–414	–752
Share swap agreement		–	–98
Cash flow from financing activities		389	–1,411
Cash flow for the year		94	175
Liquid funds at beginning of year		269	94
Liquid funds at end of year1)		363	269

Parent Company statement of cash flows Parent Company statement of changes in equity

SEK m	Share capital	Other contributed capital	Retained earnings including Net Income for the year	Total
Opening balance, January 1, 2019	376	5,673	–839	5,209
Comprehensive income
Net income for the year	–	–	692	692
Total comprehensive income	–	–	692	692
Transactions with shareholders
Dividend	–	–	–750	–750
Share swap agreement	–	–	7	7
Total transactions with shareholders	–	–	–743	–743
Opening balance, January 1, 2020	376	5,673	–890	5,158
Comprehensive income
Net income for the year	–	–	400	400
Total comprehensive income	–	–	400	400
Total transactions with shareholders
Dividend	–	–	–414	–414
Share swap agreement	–	–	2	2
Total transactions with shareholders	–	–	–12	–12
Closing balance, December 31, 2020	376	5,673	–902	5,147

1) Liquid funds include interest-bearing financial current assets with maturity shorter than 90 days.

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Contents notes

	Accounting and reporting fundamentals
Note 1	Accounting principles	96
Note 2	Critical accounting estimates and assessments	97

Income statement

Note 3	Revenues	98
Note 4	Segment reporting	100
Note 5	Operating expenses	103
Note 6	Audit fees	103
Note 7	Employees and remuneration	103
Note 8	Government grants	106
Note 9	Items affecting comparability	106
Note 10	Financial income and expenses, net	106
Note 11	Income tax	106

Assets

Note 12	Acquisitions of subsidiaries	109
Note 13	Goodwill, Intangible assets and Impairment testing	110
Note 14	Tangible fixed assets	112
Note 15	Right-of use assets	113
Note 16	Accounts receivable	114
Note 17	Prepaid expenses and accrued income	114
Note 18	Liquid funds	115
Note 19	Funds in cash processing operations	115

Shareholders' equity and Liabilitites
Note 20	Shareholders' equity	115
Note 21	Shares in subsidiaries	116
Note 22	Financial instruments and risk management	117
Note 23	Provisions for pensions and similar commitments	122
Note 24	Provisions for claims reserves and other provisions	127
Note 25	Accrued expenses and prepaid income	127
Note 26	Other current liabilities	127
Note 27	Contingent liabilities	128

Other information

Note 28	Items not affecting cash flow	128
Note 29	Appropriation of profits	129
Note 30	Transactions with related parties	129
Note 31	Events after the balance sheet date	129

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Notes

NOTE 1 Accounting principles

Loomis AB (Parent Company, corporate identity number 556620- 8095) and its subsidiaries offer comprehensive solutions for cash handling in the USA, large parts of Europe, and in Argentina and Chile, as well as cross-border transportation of cash and precious metals and storage of valuables. Loomis also provides payment platforms for retailers.

The Parent Company is a limited liability company with its registered office in Stockholm. The visiting address of the head office is Drottninggatan 82, 111 36 Stockholm, Sweden. The Parent Company is a holding company with the primary purpose of holding and managing shares in a number of subsidiaries, and engaging in group-wide management and administration. The consolidated accounts are subject to adoption by the Annual General meeting on May 6, 2021.

Basis of preparation of the financial statements

The Group applies the International Financial Reporting Standards, IFRS (formerly IAS), as adopted by the European Union (EU), the Swedish Financial Reporting Board's recommendation RFR 1 Supplementary Accounting Rules for Groups, and the Swedish Annual Accounts Act. The consolidated financial statements have been prepared in accordance with the cost method, with the exception of available-for-sale financial assets and financial assets and financial liabilities (including derivative instruments) measured at fair value through profit or loss. For information on critical estimates and assessments, see Note 2.

The most important accounting principles applied in the preparation of this Annual Report are described below. Loomis adds a description of accounting principles to every note to provide a better understanding of the respective accounting area. Loomis focuses on describing the accounting decisions that the Group has made within the framework of the applicable IFRS standard and avoids reproducing the actual paragraph text, unless Loomis considers this of particular importance in order to understand the content of the note.

Unless otherwise stated, the accounting principles have been applied consistently for all the years presented. The same principles are normally applied by both the Parent Company and the Group. In certain cases, the Parent Company applies different principles than the Group and this is indicated in the section "Parent Company accounting principles".

New or amended accounting standards applied in 2020

The following new, amended or improved accounting standards were applicable from January 1, 2020: IFRS 3 Business Combinations (endorsed by the EU April 21, 2020); IAS 1 and IAS 8: Definition of material (endorsed by the EU on November 29, 2019); and IFRS 16 Leases (endorsed by the EU on October 9, 2020) and amendments to IFRS 9, IAS 39 and IFRS 7 under the Interest Rate Benchmark Reform (endorsed by the EU on January 15, 2020). The new, amended or improved standards did not have any material impact on Loomis financial statements.

New or amended accounting standards to be applied after 2020

The following new, amended or improved accounting standards have been published but are not mandatory for 2020 and have not been early adopted by Loomis: IFRS 17 Insurance Contracts; IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current ; IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets; Annual Improvements 2018-2020; IFRS 4 Insurance Contracts – deferral of IFRS9 (endorsed by the EU on December 15, 2020); Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 (endorsed by the EU on January 13, 2021). These new, amended or improved standards have not yet been endorsed by the EU unless specifically stated above and they are not expected to have any material impact on Loomis financial statements.

Scope of consolidated financial statements

The consolidated financial statements cover the Parent Company Loomis AB and all of the subsidiaries. Subsidiaries are all companies over which the Group has a controlling interest. The Group controls a company when Loomis is exposed to or has the right to variable returns from its holding in the company and has the ability to affect those returns through its influence over the company. Subsidiaries are consolidated into the accounts from the date on which the controlling influence is transferred to the Group. They are deconsolidated from the date the controlling influence ceases to exist.

Translation of foreign subsidiaries

The functional currency of the Parent Company and the presentation currency of the Group, i.e. the currency in which the financial statements are presented, is the Swedish Krona (SEK). The financial statements of foreign subsidiaries are translated according to the following principle: each month's statement of income is translated applying the exchange rate in effect on the last day of that month. The income for each month is therefore not affected by foreign exchange fluctuations during subsequent periods, except in the case of countries with hyperinflation.

Balance sheets are translated using the exchange rates in effect on the balance sheet date. The translation difference arising as a result of statements of income being translated at average rates while the balance sheets are translated at the exchange rates in effect on each balance sheet date is reported in other comprehensive income. When a foreign operation or part thereof is sold, the translation differences recognized in shareholders' equity are recognized in the statement of income as part of the capital gain or loss on the sale.

Significant exchange rates used in the consolidated accounts

		Weighted		Weighted
		average	Dec. 31,	average	Dec. 31,
		2020	2020	2019	2019
EUR-countries EUR		10.48	10.03	10.59	10.45
Switzerland	CHF	9.78	9.28	9.53	9.63
UK	GBP	11.87	11.16	12.08	12.28
USA	USD	9.15	8.17	9.46	9.30

Receivables and liabilities in foreign currencies

Foreign currency transactions are translated into the functional currency using the exchange rates in effect at the transaction date. Foreign exchange gains and losses resulting from the settlement of these transactions, and from the translation at balance sheet date exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognized in the statement of income. The exception is transactions in which gains or losses are recognized in other comprehensive income as qualifying cash flow hedges or qualifying net investment hedges. Translation differences on non-monetary financial assets and liabilities, such as shares measured at fair value through profit or loss, are recognized in the statement of income as part of fair value gains/losses.

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Financial reporting in hyperinflationary economies

Argentina's economy has been considered hyperinflationary since July 1, 2018 and it is therefore appropriate for Loomis to apply the standard IAS 29 Financial Reporting in Hyperinflationary Economies. The financial statements for the subsidiary in Argentina have been adjusted for inflation to reflect changes in purchasing power. The inflation adjustments have been made in accordance with the National CPI, Argentina's consumer price index. The CPI as of December 31, 2020 was 385.5 with the base period as December 2016. As of December 31, 2019 the CPI was 184.1 Loss on monetary net assets/liabilities is recognized in the statement of income as a financial expense.

Intra-group transactions

Pricing of intra-group transactions is based on normal business principles. Intra-group receivables and liabilities, as well as transactions between companies in the Group, and any related gains/losses, are eliminated. Unrealized losses are also eliminated, but any losses are regarded as an indication of impairment of the transferred asset. All subsidiaries report to the Group according to the Group's accounting principles.

Group companies are all companies owned or controlled by Loomis AB according to the definition provided in the section "Scope of consolidated financial statements" above.

Other information

Amounts in tables and other combined amounts have been rounded off on an individual basis. Minor differences due to this rounding-off may therefore appear in the totals.

Parent Company accounting principles

The Parent Company's financial statements have been prepared in accordance with the Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities. The Parent Company thus applies the same accounting principles as the Group, where this is appropriate, except in the cases described below. Differences between the Parent Company's and the Group's accounting principles arise as a result of limits in applicability of IFRS to the Parent Company based on the Swedish Annual Accounts Act, the Swedish act on safeguarding pension commitments ("Tryggandelagen") and the alternatives provided in RFR 2.

IFRS 16 Leases

Leases went into effect on January 1, 2019. RFR 2 contains an exception whereby all leases in which the Parent Company is the lessee are recognized as operating leases.

Employee benefits

According to RFR 2 the provisions in IAS 19 regarding defined benefit pension plans do not need to be applied by legal entities. However, disclosures are required with respect to applicable part of IAS 19. RFR 2 references the Swedish act on safeguarding pension commitments ("Tryggandelagen") for rules on recognizing provisions for pensions and similar obligations.

Financial instruments

The Parent Company reports financial instruments in accordance with IFRS 9 with consideration of RFR 2. The Parent Company applies RFR 2 exemptions regarding IFRS 7 p.1 and thus does not provide information in accordance with IFRS 7 and IAS 1 p. 124 A – 124 C. The Parent Company further applies the exemption in the application of IFRS 9 which relates to accounting and valuation of financial guarantee agreements for the benefit of subsidiaries. The Parent Company reports the financial guarantee agreements as contingent liabilities.

Group contributions

The Parent Company applies the alternative rule in RFR2 IAS 27 for group contributions, which means that group contributions received and provided are recognized as year-end appropriations.

NOTE 2 Critical accounting estimates and assessments

The preparation of financial statements and the application of various accounting standards are often based on assessments made by management or on estimates and assumptions that are deemed reasonable under the prevailing circumstances. These estimates and assumptions are generally based on historical experience and other factors, including expectations of future events. With different estimates and assumptions, the result could vary and by definition, the estimates will seldom equal actual outcomes.

The estimates and assumptions that Loomis deems, at December 31, 2020, to have greatest impact on its results, assets and liabilities are discussed below.

Valuation of accounts receivable and provision for bad debt losses

Accounts receivable constitutes one of the largest items on the balance sheet. Accounts receivable is reported at net value, after provision for bad debt losses. The provision for bad debt losses is subject to critical estimations and assessments. For additional information on credit risk in the accounts receivable refer to Note 16 Accounts recceivable and Note 22 Financial instruments and risk management.

Valuation of identifiable assets and liabilities in connection with the acquisition of subsidiaries/operations

The valuation of identifiable assets and liabilities in conjunction with the acquisition of subsidiaries or operations, as part of the purchase price allocation, requires that items in the acquired company's balance sheet, as well as items that have not been reported in the acquired company's balance sheet, such as customer relations, should be valued at fair value. Under normal circumstances, as listed market prices are not available for the valuation of the assets and liabilities to be valued, different valuation methods must be applied. These valuation methods are based on a number of assumptions. Other items that may be difficult to, both to identify and measure, are contingent liabilities that may have arisen in the acquired company, for example as a result of disputes.

Deferred considerations that mature in the future and contingent considerations are reported as part of the purchase price and is recorded based on an assessment assuming that the appropriate terms and conditions agreed upon in connection with the acquisition will be complied with. Deferred considerations and contingent considerations are reported at present value and the valuation is subject to assessment on each reporting occasion. For further information

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regarding valuation refer to Note 22 Financial instruments and risk management, and for more information regarding acquisitions refer to Note 12 Acquisitions of subsidiaries.

Impairment testing of goodwill and other acquisition-related intangible assets

In connection with the impairment testing of goodwill and other acquisition-related intangible assets, the carrying amount is compared with the recoverable amount. The recoverable amount is determined by the greater of either an asset's net realizable value or its value in use. As under normal circumstances, no listed market prices are available to assess an asset's net realizable value, the carrying amount is normally compared with the value in use. The calculation of the value in use is based on assumptions and assessments. The most important assumptions are organic growth, development of the operating margin, the utilization of operating capital employed and the relevant WACC rate used to discount future cash flows. All in all, this implies that the valuation of the balance sheet item Goodwill and of Acquisition related intangible assets is subject to critical estimates and assessments. A sensitivity analysis regarding organic growth, operating margin and WACC is provided in Note 13 Goodwill, Intangible assets and Impairment testing.

Reporting of income tax, VAT and other taxes

Reporting of income tax, VAT and other taxes is based on the applicable regulations in the countries in which the Group operates. Due to the overall complexity of all rules concerning taxation and reporting of taxes, the implementation and reporting is based on interpretations and assessments of possible outcomes.

Deferred tax is measured on temporary differences between the carrying amounts and tax base of assets and liabilities. There are two main types of assumptions and judgements that impact recognized deferred tax. These are assumptions and judgements to establish the carrying amount of various assets and liabilities, and those relating to future taxable profits in cases where future utilization of deferred tax assets is dependent on this.

Significant assumptions and judgements are also made in the recognition of provisions and contingent liabilities relating to tax risk and potential effects of ongoing tax audits. Tax audits are often lengthy processes lasting for several years. It is therefore not possible to provide any detailed information regarding the timeline for tax outflows. For further information on taxes, refer to Note 11 Income tax.

Actuarial calculations regarding employee benefits such as pensions

Employee benefits are normally an area in which estimates and assessments are not critical. However, for defined benefit plans, particularly as regards pension benefits, and where the payments to the employee is several years into the future, actuarial assessments are required. These calculations are based on assumptions concerning economic variables, such as the discount rate, salary increases, inflation rates, pension increases, but also on demographic variables, such as expected life span. These assumptions are subject to critical estimates and assessments. For further information on pensions and on sensitivity analysis, refer to Note 23 Provisions for pensions and similar commitments.

Actuarial calculations regarding claims reserves

The Group is exposed to various types of risks in the day-to-day operation of its business. These operational risks can result in the need to report provisions for damages resulting from property claims and personal injuries claims from the Cash handling operations, and workers' compensation claims relating to the Group's employees.

Claims reserves are recognized based on actuarial calculations conducted on an ongoing basis. The actuarial calculations are based on information on open claims and historical data on incurred but not reported (IBNR) claims and on a number of different assumptions. This means that the total claims reserves are subject to critical estimates and judgements. For further information, please refer to Note 23 Provisions for pensions and similar commitments.

NOTE 3 Revenues

ACCOUNTING PRINCIPLES

The basic principle is that revenue is recognized as a means of expressing the transfer of promised goods and services with an amount that reflects the compensation the Company is expected to be entitled to in return for these goods and services.

Revenue distribution

The Group receives revenue from sales of goods and services over time and at certain points in time for the following main product lines: Cash in Transit services (CIT), Cash Management Services (CMS), cross-border transportation of cash and precious metals and storage of valuables (International) and Other. When SafePoint equipment is used as part of a service delivery to a customer, this is sometimes referred to as "sales of SafePoint." The service, however, consists of providing cash in transit services, cash management services and a storage service to the customer, see also under "Significant assessments". Other revenues mainly consist of income from physical foreign exchange (FX).

Revenue recognition

Loomis's performance obligations and the transaction price for the respective obligation is derived from the customer contract. The transaction price usually consists of both fixed and variable amounts, where the variable portion may either increase or decrease the transaction price. The variable components in Loomis's customer contracts are primarily incentives and performance bonuses, but may also include discounts and penalties. Each customer contract is regarded as a single performance obligation and no allocation is made of the transaction price. See also under "Significant assessments" below. In the case of revenue from CIT, CMS and SafePoint, Loomis is entitled to payment for services already rendered if the customer chooses to cancel the contract for a reason other than that Loomis has not met its obligations. Loomis's revenue from these services is recognized over time as the services are provided. Certain other revenue items, including cross-border transportation of cash and precious metals and storage of valuables, are recognized on a given date. Dividend income is recognized when the right to receive the dividend is established. Other financial income is recognized when the right to receive the income is established.

Significant assessments

SafePoint solution

When providing services Loomis sometimes uses an equipment

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called SafePoint. When selling this solution the service normally consists of providing the customer with transport services, cash management services and a storage service. The customer deposits cash into the SafePoint unit and the funds are then deposited on the customer's bank account. The cash is collected, transported, processed, and verified as the amount deposited earlier and stored in Loomis's vault. SafePoint equipment is part of Loomis's delivery of the SafePoint service. SafePoint equipment at the customer's premises is owned by Loomis and can be replaced with new SafePoint equipment by Loomis if this is deemed necessary. The contract is therefore not related to a specific asset. In exceptional cases, the SafePoint equipment is sold to the customer so that the customer owns the equipment. In this case, the service is the same as when Loomis owns the equipment and the equipment does not have an alternative use for the customer other than to be part of Loomis's service delivery. Loomis controls the software and has the key to the SafePoint unit. If a contract ends, the proprietary software is removed and the customer is given the key. For this reason, no difference is made in the accounts depending on whether Loomis or the customer owns the equipment.

Loomis's performance obligation involves performing services for the term of the contract for which it is paid on a monthly basis, but this requires Loomis to perform a variety of tasks every day. The services are essentially performed on a straight-line basis over time. From both Loomis's and the customer's perspective the Safe Point equipment is included as part of the service that is delivered. These are not separate services and the SafePoint equipment is considered the same as any other equipment used to provide CIT and CMS services. For this reason, no allocation is made of the transaction price. Revenue is recognized throughout the term of the contract and invoiced on a monthly basis.

Storage services

Loomis provides storage services to its customers. Depending on local rules and business models, these services are provided as part of the CIT/CMS operations in some countries. Storage is also a separate service offered within the International segment where Loomis stores gold, other precious metals or similar items for its customers. When considering the effects of IFRS 15 and of providing a storage service, Loomis has determined that storage services provided as part of CIT/CMS operations have no distinct performance obligation, unlike storage services provided within the International segment.

This conclusion is based on the fact that the storage service within CIT/CMS is strongly linked to the CIT/CMS services as stated in the contract. The customer cannot avoid purchasing the storage portion of the service because it is a part of the delivery of Loomis's CIT/CMS service. In the International segment, storage is itself the service offered and is therefore by definition a distinct performance obligation.

Revenue distribution

			Other and
	Europe	USA	eliminations	Total
	Jan – Dec	Jan – Dec	Jan – Dec	Jan – Dec
SEK m	2020	2020	2020	2020
Cash in transit (CIT)	5,923	5,632	–	11,555
Cash management
services (CMS)	2,518	3,074	–	5,592
International	768	324	–	1,092
Other	541	27	7	574
Revenue, internal	38	41	–79	–
Total revenue	9,788	9,098	–72	18,813
Timing of revenue recognition, external
At a point in time	1,495	322	1	1,817
Over time	8,255	8,735	6	16,996
Total external revenue	9,750	9,057	7	18,813

Revenue distribution

			Other and
	Europe	USA	eliminations	Total
	Jan – Dec	Jan – Dec	Jan – Dec	Jan – Dec
SEK m	2019	2019	2020	2019
Cash in transit (CIT)	6,856	5,946	–	12,802
Cash management
services (CMS)	3,172	3,288	–	6,460
International	812	333	–	1,145
Other	619	17	–	636
Revenue, internal	39	53	–92	–
Total revenue	11,498	9,639	–92	21,044

Timing of revenue

Total external revenue	11,459	9,585	–	21,044
Over time	9,893	9,274	–	19,167
At a point in time	1,566	311	–	1,877
recognition, external

Revenue per significant geographical market

	Dec. 31,	Dec. 31,
SEK m	2020	2019
USA	9,098	9,639
France	2,962	3,166
Spain	1,327	1,632
UK	1,028	1,562
Switzerland	908	946
Other countries and eliminations	3,490	4,099
Total revenue	18,813	21,044

Revenue from external customers in Sweden amounts to SEK 624 million (660), in the USA to SEK 9,015 million (9,396), and total revenue from external customers in other countries amounts to SEK 9,174 million (10,988). No single customer represents more than 5 percent of the total revenue.

Contract assets and contract liabilities

Loomis has identified the following revenue-related contract assets and liabilities. Loomis has no contract-specific contractual expenses.

	Dec. 31,	Dec. 31,
SEK m	2020	2019
Contract assets related to SafePoints	136	196
Contract assets relating to costs to fulfil contracts	2	3
Total contract assets	139	199
Contract liabilities - expected volume discounts	10	16
Contract liabilities - expected refunds to customers or penalties	9	10
Contract liabilities - prepaid income related to subscription fees	76	81
Contract liabilities related to SafePoints	167	234
Total contract liabilities	262	342
Whereof Non-current contract liabilities	110	154
Whereof Current contract liabilities	152	188
Total contract liabilities	262	342

Contract liabilities reversed and recognized as revenue in 2020 amounted to around SEK 126 million (134).

Loomis is expecting around SEK 119 million (167) of the total contract liabilities to be reversed to revenue in 2021, which correspond to 46 percent (49). Remaining SEK 143 million (174) is expected to be reversed and recognized as revenue in the years after 2021.

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NOTE 4 Segment reporting

ACCOUNTING PRINCIPLES

Operating segments are reported in accordance with the internal Loomis reporting, submitted to Loomis's CEO who has been identified as the most senior executive decision-maker within Loomis. Loomis has the following segments: Europe, USA, and Other (segment Europe includes Argentina and Chile which are part of the segment president's responsibility in accordance with how Loomis is organized). Presidents for the segments Europe and USA are responsible for following up the segments' operating income before amortization of acquisition-related intangible assets, acquisition-related costs and revenue and items affecting comparability (EBITA), according to the manner in which Loomis reports its consolidated statement of income. This then forms the basis for how the CEO monitors development, allocates resources etc. Loomis has therefore chosen this structure for its segment reporting.

National cash handling services (Cash in Transit and Cash Management Services) are split between the segments Europe and USA. The split is based on the similarities between European countries in important areas relating to, for example, market conditions, political circumstances, laws and regulations that affect Loomis's operations. Operations in the USA are affected to a significant degree by other market conditions and political circumstances, as well as by laws and regulations relevant to Loomis's operations, even if the services provided can be considered similar to those provided in Segment Europe.

Segment Other consists of the head office and the Parent Company, the risk management function and other functions managed at Group level and which are related to the Group as a whole. For 2020, segment Other also includes the new operations within Loomis Pay, as these operations in 2020 do not meet the quantitative limit values in accordance with IFRS 8 for when separate information is to be provided.

According to IFRS 8.32, segment information is to be reported for the revenues from each service or each group of similar services. For Segment Europe Cash in Transit accounts for 60 percent (60) of total revenue, Cash Management Services for 26 percent (28) and other services accounts for 14 percent (12). For Segment USA, Cash in Transit accounts for 62 percent (62) of total revenue, Cash Management Services for 34 percent (34) and other services accounts for 4 percent (4).

The internal monitoring of earnings and financial position is reported in accordance with the same accounting principles as applied in Loomis's external reporting. Interest income and interest expense are not allocated amongst the segments, but are transferred to Other as these

items are affected by measures taken by the Group's Treasury function. The same principle is applied to taxes and tax-related items, as these are handled by a group-wide function. The operating segments' assets and liabilities are allocated according to the segment's operations and the physical location of the assets and liabilities. The Group's interest-bearing liabilities are not considered to be segment liabilities and have therefore been included in Other in the table below.

Segment information that is delivered to the executive managers of Europe and the USA, concerning those segments for which information is to be provided, can be found in the following table. This table also includes disclosures concerning selected earnings measures, and also assets and liabilities for the segments.

Total fixed assets, apart from financial instruments and deferred tax assets located in Sweden, amount to SEK 156 million (221), in the USA to SEK 2,114 million (2,569), and the total for the fixed assets located in other countries amounts to SEK 2,830 million (3,032).

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Segment reporting 2020

				Elimina
	Europe	USA	Other	tions	Total
SEK m	2020	2020	2020	2020	2020
Revenue, continuing operations	9,446	9,088	–	–79	18,454
Revenue, acquisitions	342	10	7	–	359
Total revenue	9,788	9,098	7	–79	18,813
Production expenses	–7,735	–6,312	–75	107	–14,015
Gross income	2,053	2,786	–68	28	4,798
Selling and administrative expenses	–1,465	–1,361	–170	–28	–3,024
Operating income (EBITA)	588	1,425	–238	–	1,775
Amortization of acquisition-related intangible assets	–89	–20	0	–	–109
Acquisition-related costs and revenue	–128	–6	–28	–	–163
Items affecting comparability	–197	–	–3	–	–200
Operating income (EBIT)	174	1,400	–270	–	1,304
Financial income	–	–	31	–	31
Financial expense	–	–	–211	–	–211
Loss on monetary net assets/liabilities	–	–	–28	–	–28
Income before taxes	174	1,400	–477	–	1,096
Income tax	–	–	–380	–	–380
Net income for the year	174	1,400	–857	–	716
Segment assets
Goodwill	3,490	3,326	68	–	6,884
Other intangible assets	627	61	67	–	755
Fixed assets	2,960	2,114	26	–	5,100
Right-of-use assets	1,323	1,291	31	–	2,645
Accounts receivable	1,404	825	–21	–9	2,199
Pension plan assets	304	–	–	–	304
Other segment assets	435	1,461	47	–930	1,014
Undistributed assets
Deferred tax assets	–	–	476	–	476
Current tax assets	–	–	290	–	290
Interest-bearing financial fixed assets	–	–	361	–	361
Other financial assets valued at fair
value via statement of income	–	–	4,869	–	4,869
Total assets	10,543	9,079	6,213	–939	24,896

Segment reporting 2020

				Elimina
	Europe	USA	Other	tions	Total
SEK m	2020	2020	2020	2020	2020
Segment liabilities
Accounts payable	301	257	51	–9	600
Accrued expenses and prepaid income	1,099	415	1	–	1,514
Liabilities, cash processing operations	2,468	–	–	–	2,468
Provisions for pensions	834	–	–	–	834
Other current liabilities	632	330	975	–965	972
Provisions for claims reserves	11	492	72	–	575
Undistributed liabilities
Current loans payable	–	–	199	–	199
Long-term loans payable	–	–	5,723	–	5,723
Interest-bearing current lease liabilities	–	–	546	–	546
Interest-bearing non-current lease liabilities	–	–	2,105	–	2,105
Deferred tax liability	–	–	402	–	402
Current tax liabilities	–	–	184	–	184
Shareholders' equity	–	–	8,773	–	8,773
Total liabilities and shareholders' equity	5,344	1,494	19,031	–974	24,896
Other information
Investments in fixed assets, net	576	374	36	–	986
Depreciation and amortization	1,079	884	15	–	1,979

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Segment reporting 2019

				Elimina
	Europe	USA	Other	tions	Total
SEK m	2019	2019	2019	2019	2019
Revenue, continuing operations	10,866	9,638	–	–92	20,411
Revenue, acquisitions	632	1	–	–	633
Total revenue	11,498	9,639	–	–92	21,044
Production expenses	–8,490	–6,835	–	114	–15,210
Gross income	3,008	2,804	–	22	5,833
Selling and administrative expenses	–1,578	–1,432	–200	–22	–3,233
Operating income (EBITA)	1,429	1,372	–200	–	2,601
Amortization of acquisition-related intangible assets	–81	–20	–	–	–101
Acquisition-related costs and revenue	–57	–	–44	–	–101
Items affecting comparability	35	–	–12	–	23
Operating income (EBIT)	1,327	1,352	–256	–	2,422
Financial income	–	–	63	–	63
Financial expense	–	–	–240	–	–240
Loss on monetary net assets/liabilities	–	–	–34	–	–34
Income before taxes	1,327	1,352	–469	–	2,210
Income tax	–	–	–564	–	–564
Net income for the year	1,327	1,352	–1,033	–	1,646
Segment assets
Goodwill	3,423	3,670	–	–	7,094
Other intangible assets	626	41	19	–	686
Fixed assets	3,230	2,571	21	–	5,822
Right-of-use assets	1,426	1,468	16	–	2,911
Accounts receivable	1,723	941	31	–76	2,619
Pension plan assets	352	–	–	–	352
Other segment assets	453	1,274	15	–775	967
Undistributed assets
Deferred tax assets	–	–	446	–	446
Current tax assets	–	–	322	–	322
Interest-bearing financial fixed assets	–	–	213	–	213
Other financial assets valued at fair
value via statement of income	–	–	5,134	–	5,134
Total assets	11,234	9,965	6,215	–851	26,563

Segment reporting 2019

				Elimina
	Europe	USA	Other	tions	Total
SEK m	2019	2019	2019	2019	2019
Segment liabilities
Accounts payable	406	289	49	–76	668
Accrued expenses and prepaid income	1,173	322	0	–	1,495
Liabilities, cash processing operations	3,021	–	–	–	3,021
Provisions for pensions	918	–	–	–	918
Other current liabilities	512	401	784	–775	922
Provisions for claims reserves	8	535	63	–	606
Undistributed liabilities
Current loans payable	–	–	29	–	29
Long-term loans payable	–	–	5,793	–	5,793
Interest-bearing current lease liabilities	–	–	560	–	560
Interest-bearing non-current lease liabilities	–	–	2,313	–	2,313
Deferred tax liability	–	–	447	–	447
Current tax liabilities	–	–	199	–	199
Shareholders' equity	–	–	9,592	–	9,592
Total liabilities and shareholders' equity	6,038	1,547	19,829	–851	26,563
Other information
Investments in fixed assets, net	851	776	16	–	1,643
Depreciation and amortization	1,063	857	14	–	1,934

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NOTE 5 Operating expenses

Distribution of operating expenses by type

Total expenses by type	17,511	18,622
Other expenses	2,882	2,541
Items affecting comparability	200	–23
Costs for subcontractors	602	644
Costs of technical equipment	1,005	967
Costs of premises	1,029	971
Vehicle expenses	1,547	1,720
Risk, claims and insurance expenses	395	528
Personnel costs	9,851	11,275
SEK m	2020	2019

Depreciation, amortization and impairment

SEK m	2020	2019
Acquisition-related intangible assets	109	101
Other intangible assets	62	51
Buildings	42	40
Machinery and equipment	1,161	1,137
Right-of-use assets	605	605
Total depreciation, amortization and
impairment	1,979	1,934

Depreciation, amortization and impairment for the year are reported in the statement of income as follows:

impairment
Total depreciation, amortization and
Acquisition-related intangible assets	109	101
Selling and administrative expenses	209	265
Production expenses	1,661	1,569
SEK m	2020	2019

For more information see Note 13 Goodwill, Intangible assets and Impairment testing and Note 14 Tangible fixed assets.

Audit fees and other fees

	Group		Parent company
SEK m	2020	2019	2020	2019
– Audit assignments	16	16	3	3
– Auditing activities other than audit assignments	–	–	–	–
– Tax advice	–	0	–	0
– Other services	0	0	0	0
Total elected auditors	16	17	3	3
Other auditors
Audit assignments	3	3	–	–
Total	19	20	3	3

Other services than audit relate mainly to accounting advice, support with statement of tax returns and value added tax. Services in addition to audit relate to no statutory assignments.

NOTE 7 Employees and remuneration

ACCOUNTING PRINCIPLES

The Group currently has two incentive schemes – one short-term and one long-term saving share-based incentive scheme.

In the short-term incentive scheme the participants receive a bonus, two-thirds of which is paid in cash the year after it is earned. For the one third, shares are acquired at market price and allotted to the employees one year after their acquisition as long as the individuals are still employed by the Group.

The cost for Loomis is reported in the statement of income in the year during which the bonus is earned. The share-based reserve is classified as a component of equity and not as a liability. At the conclusion of the scheme, any deviations from the original estimates, for example, as a result of an employee leaving the Group without receiving their allotted shares, are reported in the statement of income and corresponding adjustments are made in shareholders' equity.

The long-term saving share-based scheme (LTIP 2018–2021) is aimed at Group management and other key individuals in the Loomis Group. The scheme mainly involves each participant making a cash investment in shares in Loomis (Saving Shares) by acquiring shares on Nasdaq Stockholm. The participants are thereby entitled to receive, free of charge, so-called performance shares on condition that (i) the participant remains employed until February 28, 2022 (the Vesting

Period), (ii) the participant has not sold any Saving Shares before the end of the Vesting Period, and (iii) the performance target is met. The performance target that must be met relates to the accumulated development of earnings per share (EPS) during the period January 1, 2018 – December 31, 2021. The Board has established the minimum and upper target levels for the accumulated development of EPS. A determination will be made in connection with the publication of the year-end report for the year 2021 as to whether the performance target has been met.

LTIP 2018–2021 will result in personnel costs over the Vesting Period in the form of salaries and social security contributions.

The Group's average number of full-time equivalent employees by gender

	Women		Men		Total
Number	2020	2019	2020	2019	2020	2019
Europe	4,499	4,710	9,459	10,591	13,958	15,301
USA	3,009	3,152	6,107	6,442	9,116	9,594
Total	7,508	7,862	15,566	17,033	23,074	24,895

The Parent company's average number of full-time equivalent employees by gender

SEK m	2020	2019
Number of employees	29	21
(of which men)	(18)	(14)

In 2020, the number of board members and Presidents for all legal entities within the Group was 72 (60), of which 13 (10) were women.

Personnel costs: Board of Directors and Presidents

	Salaries		contributions	Social security	(of which pensions)		bonuses)	(of which
SEK m			2020 2019 2020 2019 2020 2019 2020 2019
Europe	86	109	11	19	(6)	(6)	(2)	(31)
USA	18	21	0	0	(0)	(0)		(8)
Total	104	130	12	19	(6)	(6)		(39)

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Personnel costs: Other employees

		Salaries	contributions	Social security	(of which pensions)
SEK m	2020	2019	2020 2019		2020	2019
Europe	4,017	4,976	1,269	1,377	(170)	(214)
USA	3,639	3,883	810 889		(38)	(35)
Total	7,656	8,859	2,079	2,266	(208)	(249)

Total personnel costs: Board of Directors, Presidents and other employees

			Social security		(of which
		Salaries		contributions	pensions)
SEK m	2020	2019	2020	2019		2019
Europe	4,103	5,085	1,280	1,396	(176)	(220)
USA	3,657	3,904	811	890		(35)
Total	7,760	8,989	2,091 2,286		(214)	(255)

The Parent company's total personnel costs: Board of Directors, Presidents and other employees

	Salaries			Social security contributions	(of which pensions)
SEK m	2020	2019	2020	2019	2020	2019
Board of Directors and Presidents	11	17	9	9	2	2
Other employees	28	39	21 22		15	10
Total	39	56	30	31		13

In 2020 the President/CEO Patrik Andersson received variable remuneration amounting to SEK 0 million (8,6), of which SEK 0 million (6,2) relates to the Company's Annual Incentive Plan.

Further information on the Group's pensions and other long-term benefits to employees is shown in Note 24 Provisions for pensions and similar commitments.

Remuneration for the President, Board of Directors and Group Management

The Chairman of the Board and board members receive a fee as determined by the Annual General Meeting. Decisions on guidelines for salaries and other remuneration for the President/CEO and other members of Group Management are made by the Annual General Meeting based on proposals from the Board of Directors.

Principles of remuneration for the Board of Directors

Remuneration for Loomis's current Board of Directors was adopted at the Annual General Meeting on May 6, 2020. The board members were appointed for the period until the 2021 Annual General Meeting. The fees outlined on page 105 represent remuneration expensed during the financial year. For information on fees and how they are distributed among the board members, see the table on page 105.

Principles of remuneration adopted at the Annual General Meeting for the President/CEO and other members of Group Management

The principles of remuneration described below for Group Management were adopted at the Annual General Meeting on May 6, 2020. The guidelines apply to agreements entered into after the AGM decision and to any changes in existing agreements after this date. The Board has the right to deviate from the guidelines if there are particular grounds for doing so in an individual case.

Remuneration for the President/CEO and other members of Group Management consists of a fixed salary, variable remuneration, pension benefits and other benefits. Variable remuneration is based on performance in relation to targets within the individual area of responsibility, determined individually for each executive. Variable remuneration for the President/CEO is within the framework of the Company's Annual Incentive Plan (AIP), maximized at 85 percent of fixed salary. For other members of Group Management it is maximized at 100 percent of fixed salary. In addition to the above mentioned variable remuneration, it may from time to time be decided upon long-term incentive programs.

Pension rights for members of Group Management apply from the age of 65 and, where the executives are not covered by pension benefits according to a collective agreement (ITP-plan), pension is in the form of a defined contribution plan equivalent to maximum 30 percent of the fixed annual salary. For members of Group Management who are not covered by collective agreements (ITP-plan), variable remuneration is not pensionable. Members of Group Management who reside outside Sweden may be offered pension solutions that are competitive in the country where the individuals reside.

If notice of termination is given by the Company the notice period for members of Group Management is a maximum of 12 months with the right to severance pay after the end of the notice period equivalent to a maximum of 100 percent of fixed salary for a period not exceeding 12 months. If the executive resigns, the notice period is a maximum of six months.

Other benefits, such as company car, supplementary health insurance or access to the occupational health service may be provided, if this is considered customary in the market, for senior executives holding equivalent positions in the job market where the member

of Group Management is active. However, the total value of these benefits must only constitute a small portion of the total remuneration package.

Long-term saving share-based incentive scheme approved by the extraordinary shareholders' meeting

An extraordinary shareholders' meeting on September 5, 2018 approved the introduction of a long-term saving share-based incentive scheme (LTIP 2018–2021). LTIP 2018–2021 is based on the following principles: (i) the participants must invest in shares in Loomis; (ii) the participants must remain employed by the Group during the stated time period; (iii) the outcome of the scheme is linked to predetermined performance targets being met. If all of the criteria for the scheme are met the following compensation will be allocated to the members of Group management (i) the CEO will receive no more than four shares per saving share in Loomis, (ii) the Regional President Europe and the Regional President USA will each receive no more than four shares per saving share and (iii) other members of Group management will receive no more than three shares per saving share. Saving shares may be received for a maximum value of SEK 2 million in the case of the President and CEO and a maximum of SEK 1 million for other members of Group management. As a result of the pandemic in 2020, the assessment of the outcome of the program was changed and previous provisions including social security contributions were reversed, which led to an income of approximately SEK 28 million.

Remuneration and employment terms for the President and CEO

The remuneration to the President constitutes fixed salary, variable remuneration, pension and insurance benefits, and a company car. The variable remuneration is capped at 85 percent of the fixed salary. The President's pension and absence due to illness benefits correpond to 30 percent of the fixed salary. In the event of termination of the employment agreement on the part of the Company, the President is entitled to twelve months' notice and to severance pay corresponding to twelve months' salary. Variable remuneration is not pensionable. Loomis has no other commitments to Patrik Andersson with respect to pension or sick pay. If notice of termination is given by the Company, Patrik Andersson is entitled to a period of notice of 12 months and severance pay equivalent to 12 monthly salaries, provided that the termination is not due to a gross breach of contract. If Patrik Andersson resigns, the period of notice is six months. Patrik Andersson is bound by a non-competition clause during the notice period.

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Other information on other members of Group Management Six of the current Swedish members of Group Management are entitled to pension benefits in accordance with the ITP plan, which in one case also includes a supplement of 2 percent. While foreign Group

Management members are posted in the USA a pension provision is being made in line with the US subsidiary's pension plans and a salary supplement is being recognized as a pension cost. One foreign member of Group Management has no pension plan entitlement.

Remuneration for 2020:

	Fixed salary/Remuneration
	for	Variable	Share-based	Other	Pension
SEK thousand	Board of Directors	remuneration1)	remuneration	benefits	costs	Total
Alf Göransson, Chairman 2)	1,123	–	–	–	–	1,123
Cecilia Daun Wennborg, board member2)	658	–	–	–	–	658
Jan Svensson, board member 2)	475	–	–	–	–	475
Ingrid Bonde, board member 2)	175	–	–	–	–	175
Jeanette Almberg, board member 2)	350	–	–	–	–	350
Lars Blecko, board member 2) 4)	381	–	–	–	–	381
Johan Lundberg, board member 2) 5)	448	–	–	–	–	448
Patrik Andersson, President 2)	7,822	–	–	85	2,310	10,217
Other members of Group Management 2) 3)	27,806	5,564	–	3,874	7,128	44,373
Total	39,238	5,564	–	3,959	9,438	58,200

1) Refers to variable remuneration. In 2021 a total of SEK 3,709 thousand is to be paid. The remaining amount will be paid out in future years.

2) For holdings of shares in Loomis, refer to pages 49-52. For the Incentive Scheme 2019, Patrik Andersson will receive 7 106 shares, Kristian Ackeby 2 043 shares, Johannes Bäckman 847 shares, Aritz Larrea 6,016 shares, Georges Lopez 8,230 shares, Mårten Lundberg 916 shares, and Martti Ojanen 934 shares in 2020.

3) Refers to Kristian Ackeby, Johannes Bäckman, Aritz Larrea, Georges López Periago, Mårten Lundberg, Martti Ojanen, Sara Björkman, Kristoffer Wadman (for the period 1 January to 6 May) and Kristoffer Labuc (for the period 1 October to 31 December).

4) In addition to the above mentioned board fee, Lars Blecko has been hired for consulting services for Loomis Armored US LLC and for such services received USD 0.2 million, corresponding to approximately SEK 1.6 million for the full year 2020.

5) In addition to the above mentioned board fee, Johan Lundberg has been hired for consulting services and for such services received SEK 200 thousand for the full year 2020.

Remuneration for 2019:

	Fixed salary/Remuneration	Variable	Share-based	Other	Pension
SEK thousand	for Board of Directors	remuneration1)	remuneration6)	benefits	costs	Total
Alf Göransson, Chairman 2)	1,073	–	–	–	–	1,073
Cecilia Daun Wennborg, board member 2)	617	–	–	–	–	617
Jan Svensson, board member 2)	467	–	–	–	–	467
Ingrid Bonde, board member 2)	517	–	–	–	–	517
Gun Nilsson, board member 2)	347	–	–	–	–	347
Lars Blecko, board member 2) 4)	147	–	–	–	–	147
Johan Lundberg, board member 2) 5)	147	–	–	–	–	147
Patrik Andersson, President 2)	7,402	6,205	2,400	97	2,191	18,295
Other members of Group Management 2) 3)	24,620	20,383	7,418	3,884	5,860	62,164
Total	35,337	26,588	9,818	3,981	8,051	83,774

1) Refers to variable remuneration and long-term bonus program. In 2020 a total of SEK 16,504 thousand is to be paid. The remaining amount will be paid out in future years.

2) For the Incentive Scheme 2018, Patrik Andersson will receive 274 shares, Aritz Larrea 5,444 shares, Mårten Lundberg 51 shares, and Martti Ojanen 53 shares in 2020.

3) Refers to Kristian Ackeby, Johannes Bäckman, Aritz Larrea, Georges López Periago, Mårten Lundberg, Martti Ojanen and Kristoffer Wadman.

4) In addition to the above mentioned board fee, Lars Blecko has been hired for consulting services for Loomis Armored US LLC and for such services received USD 0.9 million, corresponding to approximately SEK 8 million for the full year 2019.

5) In addition to the above mentioned board fee, Johan Lundberg has been hired for consulting services as from January 1, 2020.

6) Refers to expensed portion of share save based incentive program (LTIP 2018-2021).

The period of notice for other members of Group Management varies between zero and twelve months if notice is given by Loomis and between 15 days (in one case) and six months if the member resigns. Six of the members of Group Management are entitled to receive severance pay if notice is given by the Company equivalent to between 4 to (in one case) 42 monthly salaries, according to local laws. As a general rule, severance pay is not payable if the member terminates his/ her employment, unless the termination is due to a gross breach of contract on the part of Loomis.

Eight of the other members of Group Management are bound by a non-competition clause for one or two years after termination of employment. If the member resigns, in lieu of receiving severance pay, the individual will be compensated for the difference between the fixed monthly salary at the time of termination and the lower level of income subsequently earned by the individual. Compensation in the case of resignation is only payable if the member complies with the non-competition clause.

Incentive Scheme

On May 6, 2020, Loomis's Annual General Meeting resolved to introduce an incentive scheme (Incentive Scheme 2020), equivalent to the scheme adopted by the 2019 Annual General Meeting. Similar to the existing incentive scheme, the proposed incentive scheme involves two thirds of the variable remuneration being paid out in cash after the year it was earned. The remaining one third will be in the form of shares in Loomis AB, which will be allotted to the employees no later than June 30, 2022. The allotment of shares is contingent upon the employee still being employed by the Loomis Group on the last day of February 2022. In order for the allotment of shares in Loomis AB to be made, the 2020 Annual General Meeting resolved that Loomis AB will enter into a share swap agreement with a third party. Under the agreement, the third party will acquire Loomis AB shares in its own name and transfer them to the incentive scheme participants. Loomis AB will thus not issue any new shares or similar instruments for Incentive Scheme 2020. The introduction of the incentive scheme enables Loomis's key employees to become shareholders in the Company over time and will thereby increase employee commitment to Loomis's success and growth for the benefit all of the shareholders. The incentive scheme covers around 350 employees. In 2020 the cost of Incentive Scheme 2020 amounted to approximately SEK 53 million, including social security charges, whereof the share-based portion of the incentive scheme – the portion for which shares will be acquired – amounted to SEK 17 million.

For information on shareholdings, other board assignments, etc., refer to the section on the Board of Directors and Group Management, pages 49–52.

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NOTE 8 Government grants

ACCOUNTING PRINCIPLES

Government grants are recognized at fair value when it is reasonably certain that the grant will be received and that Loomis will meet the requirements for receiving the grant. Government grants are recognized on an accrual basis in the statement of income over the same periods as the costs the grants are intended to cover and they are recognized as a reduction of these costs.

In 2020 government grants were received amounting to SEK 147 million (0), mainly as relief for furloughed employees in the UK and France. Tax relief in the form of permitted delayed payment amounts to SEK 238 million (0) and was mainly received in the USA and the UK.

NOTE 9 Items affecting comparability

ACCOUNTING PRINCIPLES

Items affecting comparability are reported events and transactions whose impact are important to note when the period's results are compared with previous periods, such as capital gains and capital losses from divestments of significant cash generating units, material write-downs or other significant items affecting comparability.

Earnings for 2020 include an item affecting comparability of SEK –200 million relating to a write-down of goodwill in an operation within the European segment of SEK –46 million and costs relating to restructuring within the European segment of SEK –162 million as well as provisions/resolutions regarding legal processes of SEK 9 million. Earnings for 2019 include an item affecting comparability of SEK 23 million relating to reported capital gains of SEK 35 million from the divestment of the Artcare logistics and storage operations. Remaining SEK –13 million relates to expenses due to accusation of money laundering.

SEK m	2020	2019
Restructuring costs within the European segment	–162	–
Write-down of goodwill in an operation within the European segment	–46	–
Capital gains from the divestment of Artcare	–	35
Provisions/resolutions regarding legal processes	9	–13
Total items affecting comparability	–200	23

SEK m	2020	2019
Production expenses	–208	35
Selling and administration expenses	9	–13
Total	–200	23

NOTE 10 Financial income and expenses, net

		Group	Parent company
SEK m	2020	2019	2020	2019
Interest income	26	35	75	93
Translation differences	5	24	1,334	705
Other financial income	–	3	–	–
Financial income	31	63	1,408	797
Interest expenses	–193	–226	–102	–144
(of which interest expenses for leasing)		(–99) (–109)	–	–
Translation differences			–1,183	–798
Bank charges	–14	–14	–8	–2
Other financial expenses	–4	–	0	0
Financial expenses	–211		–240 –1,293	–945

Loss on monetary net assets/liabilities1)	–28	–34	–	–

Financial income and expenses, net	–207	–212	115	–147

1) Relates to hyperinflation accounting in Argentina.

Parent company

Total resultat from participations in Group companies	108	506

Group contributions	–103	0
Impairment	–111	–62
Dividends	321	568
SEK m	2020	2019

Pricing of transactions between Parent Company and subsidiaries are undertaken according to business principles. These transactions have Loomis AB, registration number 556620-8095, as a parent company.

> For more information and accounting principles see Note 22 Finan cial instruments and risk management.

ACCOUNTING PRINCIPLES

Income taxes include current and deferred taxes. Income tax is recognized in income for the year unless the underlying transaction is recognized in other comprehensive income, in which case the corresponding tax is reported according to the same principle.

Current tax is measured based on the tax rules that apply in the countries where the Parent Company and subsidiaries are operating and is for the current year, with any adjustment to current tax from earlier periods.

Deferred tax is recognized using the balance sheet method. Deferred tax is measured based on the differences between the carrying amount recognized in the balance sheet and the tax base amounts – so-called temporary differences. Deferred tax is measured applying the tax rates and tax laws that have been enacted or announced as of the balance sheet date, and that are expected to apply when the deferred tax asset in question is realized or the deferred tax liability is settled.

Deferred tax assets are recognized when it is probable that the amounts can be used against future taxable income. Deferred tax assets are measured on the balance sheet date and any past deferred tax assets that have not been measured are reported when they are expected to be able to be utilized, and correspondingly, reduced when it is expected that these amounts, in their entirety or partly, will not be able to be utilized against future taxable income.

Deferred tax assets and deferred tax liabilities are offset when there is a legal right to offset current tax assets against current tax liabilities and when deferred taxes are levied by the same tax authority.

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Tax expense

			Group	Parent company
SEK m	2020	%	2019	%	2020	%	2019	%
Tax on income before taxes
– current taxes	–496	–45.2	–583	–26.4	–53	–11.7	–41	–5.0
– deferred taxes	116	10.6	19	0.9	–	0.0	–	0.0
Total tax expense	–380	–34.7	–564	–25.5	–53	–11.7	–41	–5.0

Reconciliation of effective tax expense

Group
SEK m	2020	%	2019	%
Income before tax	1,096		2,210
Tax based on Swedish tax rate	–235	21.4	–473	21.4
Effect from foreign tax rate	–6	0.6	–99	4.5
Tax related to prior years	–19	1.7	–4	0.2
Non-taxable income	0	0.0	15	–0.7
Non-deductible expenses	–91	8.3	–19	0.8
Tax losses, previously not
capitalized	9	–0.9	–2	0.1
Changed tax rate	0	0.0	2	–0.1
Other	–39	3.5	15	–0.7
Total tax expense	–380	34.7	–564	25.5

Parent company

SEK m	2020	%	2019	%
Income before tax	453		733
Tax based on Swedish tax rate	–97	–21.4	–157	–21.4
Tax related to prior years	0	0.0	9	1.2
Non-taxable income	68	15.1	122	16.6
Non-deductible expenses	–25	–5.5	–15	–2.0
Total tax expense	–53	–11.7	–41	–5.6

Tax attributable to non-taxable income in the parent company is primarily related to received dividends from subsidiaries.

Provisions have been made for estimated tax charges that may arise as a result of tax audits.

> For further information refer to Note 27 Contingent liabilities.

There was no major change in corporate income tax rates in the countries in which Loomis conducts the majority of its operations. The corporate income tax in Sweden is 21.4 percent from 2020 (21.4).

The corporate tax rates in the countries in which Loomis has significant business operations are as follows:

Corporate tax rate, %	2020	2019
USA1)	26	26
Spain	25	25
France	32	33
Sweden	21	21
UK	19	19
Switzerland 2)	21–22	21–22

1) The corporate income tax rate includes federal as well as state tax. The federal tax is 21 percent. The state tax rates vary between states.

2) The Swiss corporate income tax rates comprise federal, cantonal and communal taxes. Federal tax is levied at a flat rate of 8.5 percent. Cantonal and communal tax rates vary.

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Balance sheet

Deferred tax assets and deferred tax liabilities were attributable to:

Group		Deferred tax assets		Deferred tax liabilities	Net
Deferred taxes, SEK m		Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2019
Machinery and equipment	107	112	–232	–283	–125	–171
Pension provisions and employee related liabilities	229	258	–8	–4	221	254
Liability insurance-related claims reserves	35	41	0	–	35	41
Provisions for restructuring	11	11	–	–	11	11
Intangible fixed assets	3	–	–246	–251	-243	–251
Tax loss carryforwards	98	49	–3	–	95	49
Other temporary differences	439	147	-359	-81	80	66
Total deferred taxes	921	618	–848	–619	74	–1
Netting	–445	–172	445	172	0	0
Deferred taxes, net	476	446	–402	–447	74	–1

Tax loss carryforwards

The total tax loss carryforwards as of December 31, 2020, were SEK 636 million (529). The Loomis companies with large tax loss carryforwards are mainly found in Denmark, Belgium, France and Germany as well as the international companies in the US and in Hong Kong.

Deferred tax assets relating to tax losses are recognized to the extent that it is probable that they will be utilized against taxable income. As of December 31, 2020, tax loss carryforwards, for which deferred tax assets have been recognized, amounted to SEK 381 million (170) and deferred tax assets relating to these loss carryforwards amounted to SEK 87 million (49).

Change analysis

	Machinery	Pension provisions	Liability		Intangible		Other	Total	Total
	and	and personnel	insurance-related	Provisions	fixed	Tax loss	temporary	deferred	deferred
Group, SEK m	equipment	related liabilities	claims reserves	for restructuring	assets	carryforwards	differences	tax	tax
Deferred tax assets								2020	2019
Opening balance	112	258	41	11	–	49	147	618	520
Change reported in statement of income	3	–21	–2	1	3	49	15	49	165
Change due to new-tax rates	–	0	–	–	–	–	0	–1	1
Change due to foreign currency effects	–8	–16	–5	–1	–	–2	312	280	16
Change due to reclassification	–	3	–	–	–	–	2	6	7
Change reported in shareholders' equity	–	4	0	–	–	–	–31	–27	14
Change due to acquisitions	–	–	–	–	–	2	–4	–2	20
Change due to new accounting principles	–	–	–	–	–	–	–2	–2	–125
Closing balance	107	229	35	11	3	98	439	921	618
Change during the year	–5	-29	–7	0	3	49	293	303	98
Deferred tax liabilities
Opening balance	283	4	–	–	251	–	81	619	639
Change reported in statement of income	–22	0	0	–	–15	–	–23	–60	125
Change due to new tax rates	0	–	–	–	–	–	–1	–1	–
Change due to foreign currency effects	–30	–	–	–	–20	–	311	261	18
Change due to reclassification	1	0	–	–	–6	–	–2	–6	–37
Change reported in shareholders' equity	–1	4	–	–	5	–	–	8	3
Change due to acquisitions	–	–	–	–	31	3	–2	32	10
Change due to new accounting principles	–	–	–	–	–	–	–5	–5	–138
Closing balance	232	8	0	–	246	3	359	848	619
Change during the year	–51	4	0	–	-5	3	279	229	–19

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NOTE 12 Acquisitions of subsidiaries

ACCOUNTING PRINCIPLES

The Group applies the acquisition method to account for business combinations. All considerations transferred for the acquisition of an operation are reported at fair value on the acquisition date. Revaluation of any deferred considerations and contingent considerations over and above that which was assessed at the time of the acquisition are recognized through the statement of income/statement of other comprehensive income. When the final outcome is available, any effect of contingent consideration/repayment of consideration is recycled to the statement of income. Holdings without a controlling interest in the acquired operations can, for each acquisition, either be valued at fair value, or at the proportional share of the acquired operations' net assets, held without a controlling interest. According to IFRS, transactions with non-controlling interests are recognized as a transaction within equity. There is, however, a lack of specific rules concerning revaluation of option liabilities for these holdings. Revaluations of option liabilities for non-controlling interests are recognized as transactions within equity, the accounting is thereby made similarly to other transactions with non-controlling interests. As of December 31, 2020, there were non-controlling interests amounting to SEK 592 thousand (616) within the Group.

The surplus arising from the difference between the acquisition price and the fair value of the Group's share of identifiable acquired assets, liabilities and contingent liabilities is reported as goodwill.

Acquisition-related costs

Loomis recognizes acquisition-related costs attributable to transaction costs, revaluation of deferred considerations, final effects of contingent considerations/repayments, restructuring and/or integration of acquired operations in the Group as a separate item in the statement of income. The item includes acquisition-related costs attributable to ongoing, completed and discontinued acquisitions. Restructuring costs are expenses reported in accordance with the specific criteria for provisions for restructuring. Provisions for restructuring are made when a detailed formal plan of action is in place and a well-founded expectation has been created by the parties concerned. Restructuring costs may be expenses for various activities necessary in the preparation for the integration, for example, severance pay, provisions for leased premises which will not be utilized or leased at a loss,

as well as other lease agreements which cannot be cancelled and will not be utilized. Integration costs normally consist of activities that cannot be reported as provisions. Such activities may include a change of brand name (new logo on buildings, vehicles, uniforms etc.) but may also be personnel costs related to, for example, training, recruitment, relocation and travel, certain customer-related costs and other costs related to the adaptation of the operations.

The following criterias must be fulfilled for costs to be classified as restructuring/ integration costs; i) the costs would not have been applicable if the acquisition had not taken place, and ii) the cost is attributable to a project that management has identified and monitored, either as a stage in the integration program implemented in conjunction with the acquisition, or as a direct result of an immediate review after the acquisition.

Acquisition of Automatia Pankkiautomaatit Oy, Finland

Loomis has acquired all of the shares in Automatia Pankkiautomaatit Oy, Finland. The purchase price amounted to SEK 545 million (53 MEUR). The acquired operations were consolidated by Loomis as of December 2, 2020.

Summarized balance sheet as of the acquisition date, December 2, 2020.

	Preliminary
SEK m	acquisition balance
Intangible assets	31
Tangible assets	94
Accounts receivable and other receivables	27
Liquid funds	210
Interest-bearing liabilities	–15
Accounts payable and other operating liabilities	–49
Deferred tax liability	–
Net identifiable assets and liabilities	297
Purchase price paid	545
Deferred consideration	–
Goodwill	248

Acquisitions of subsidiaries 2020:

	Consol idated as of	Segment	Acquired share1) %	Annual revenue SEK m	Number of employees	Purchase price SEK m	Goodwill SEK m	Acquisition related intangible assets SEK m	Other acquired/ divested net assets SEK m
Opening balance, January 1, 2020							7 094	478
Acquisition of Nokas Värdehantering AB	June	Europe	100	2152)	220	1213)	306)	69	22
Acquisition of Automatia Pankkiautomaatit OY4)	December	Europe	100	4292)	30	5453)	2486)	–	297
	June/
Other acquisitions5)		September Other/USA	100	272)	8	1663)	1556)	71	–61
Total acquisitions January–December 2020							433	140	258
Write-down of book values							–46	–
Amortization of acquisition-related
intangible assets							–	–109
Exchange rate differences							–597	–23
Closing balance December 31, 2020							6,884	486

1) Refers to share of votes. In acquisitions of assets and liabilities, no share of votes is indicated.

2) Annual revenue translated to SEK million on the acquisition date. Based on 2019 revenue.

3) The enterprise value i.e. the purchase price payable on a debt free basis, on the acquisition date amounted to around SEK 80 million for Nokas Värdehantering AB, to around SEK 350 million for Automatia and to around SEK 76 million and around SEK 120 million respectively for other acquisitions.

4) The acquisition analysis is preliminary and subject to final adjustment no later than one year from the acquisition date.

5) Complete IFRS 3 disclosures are not disclosed as the completed acquisitions are not deemed to materially impact the Group's statement of income or financial position.

6) Goodwill arising in connection with the acquisition is primarily attributable to market and synergy effects. Any impairment is not tax deductible.

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Revenue and earnings attributable to the acquired company from January 1, 2020 and from the time of acquisition

The acquisition has, as from the time of acquisition up to December 31, 2020, contributed approximately SEK 33 million to total revenue and approximately SEK 0 million to net income. If the acquisition had been completed on January 1, 2020, Loomis estimated that the Group's total revenue would have been affected by approximately SEK 393 million and net income by approximately SEK 23 million.

Total transaction costs for the acquisition amounted to approximately SEK 33 million and have been recognized on the line item Acquisition related costs.

Intangible assets and Goodwill

Goodwill identified in connection with the acquisition is considered to be attributable to market and synergy effects.

Impact on the Group's liquid funds

Purchase price of SEK 545 million was paid on acquisition date and acquired liquid funds amounted to SEK 210 million. Net impact on the Group's liquid funds was SEK –335 million.

Acquisition of Nokas Värdehantering AB, Sweden

Loomis has, through the wholly owned subsidiary Loomis Sverige AB (Loomis Sweden) acquired all of the shares in Nokas Värdehantering AB, Sweden. Purchase price amounted to SEK 121 million. The acquired operations were consolidated by Loomis as of June 15, 2020.

Summarized balance sheet as of the acquisition date June 15, 2020.
--------------------------------------------------------------------	--

SEK m	Acquisition balance
Intangible assets	69
Tangible assets	3
Accounts receivable and other receivables	47
Liquid funds	32
Accounts payable and other operating liabilities	–46
Deferred tax liability	–14
Net identifiable assets and liabilities	91
Purchase price paid	121
Deferred consideration	–
Goodwill	30

Revenue and earnings attributable to the acquired company from January 1, 2020 and from the time of acquisition

The acquisition has, as from the time of acquisition up to December 31,

2020, contributed approximately SEK 84 million to total revenue and approximately SEK –26 million to net income. If the acquisition had been completed on January 1, 2020, Loomis estimated that the Group's total revenue would have been affected by approximately SEK 166 million and net income by approximately SEK –33 million.

Total transaction costs for the acquisition amounted to approximately SEK 10 million and have been recognized on the line item Acquisition related costs.

Intangible assets and Goodwill

In connection with the acquisition analysis, intangible assets of SEK 69 million have been identified as attributable to contract portfolios. These are estimated to have a useful life of 7 years. Deferred tax has been reported. Goodwill identified in connection with the acquisition is considered to be attributable to market and synergy effects.

Impact on the Group's liquid funds

Purchase price of SEK 121 million was paid on acquisition date and acquired liquid funds amounted to SEK 32 million. Net impact on the Group's liquid funds was SEK –89 million.

Other acquisitions

During the second quarter of 2020 and the third quarter respectively, Loomis completed two smaller acquisitions. The total purchase price for these acquisitions amounted to SEK 166 million. The acquired operations were consolidated by Loomis as of the respective acquisition date.

Other

As of December 31, 2020 the Group as a whole had deferred considerations totaling SEK 36 million. The deferred considerations are due in 2021 and later.

Amortization of acquisition-related intangible assets and acquisition-related costs and revenue by function

The table below shows amortization of acquisition-related intangible assets and acquisition-related costs and revenue classified by function.

Earnings for 2020 include amortization of acquisition-related intangible assets of SEK –109 million which is included in Production expenses and acquisition-related costs totaling SEK –163 SEK million which is included in Production expenses of SEK –122 million and Selling and administrative expenses of SEK –41 million.

Earnings for 2019 include amortization of acquisition-related intangible assets of SEK –101 million which is included in Production expenses, and acquisition-related costs totaling SEK –101 million

which is included in Production expenses of SEK –51 million and Selling and administrative expenses of SEK –50 million.

SEK m	2020	2019
Production expenses	–231	–152
Selling and administrative expenses	–41	–50
Total	–272	–202

NOTE 13 Goodwill, Intangible assets and Impairment testing

ACCOUNTING PRINCIPLES

Goodwill represents the positive difference between the consideration transferred and the fair value of the Group's share of identifiable net assets of the acquired subsidiary/operation at the date of acquisition. As goodwill has an indefinite useful life, it is tested annually for impairment and is reported as the consideration transferred less accumulated impairment losses. Gains and losses on the divestment of companies include the carrying amount of goodwill relating to the sold company. Impairment losses on goodwill are not reversed.

Other acquisition-related intangible assets arising from acquisitions may include various types of intangible assets, such as customer-related, contract-related and technology-based intangible assets. Other acquisition-related intangible assets have a definite useful life. These assets are reported at cost, less accumulated amortization and any accumulated impairment losses. Amortization takes place on a straight-line basis over the estimated useful life of the asset.

Loomis's acquisition-related intangible assets primarily refer to customer contract portfolios and the related customer relationships. The useful life of customer contract portfolios and the related customer relationships are based on the turnover rate of the acquired portfolio and are between 3 and 12 years, corresponding to annual amortization of between 8.33 percent and 33.3 percent. The amortization of acquisition-related intangible assets is recognized in the line item Amortization of acquisition-related intangible assets in the statement of income.

. A deferred tax liability is calculated at the local tax rate on the difference between the carrying amount and tax base of intangible assets with definite useful lives (accordingly, goodwill does not give rise to any deferred tax liability). The deferred tax liability is reversed over the same period as the intangible asset is amortized, and thereby neutralizes the impact of the amortization of the intangible asset on the full tax rate percentage on income after tax. This deferred tax liability is initially reported through a corresponding increase in goodwill.

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Impairment testing

Assets with an indefinite useful life are not subject to amortization and are tested annually for impairment. Assets subject to amortization are tested for impairment at least on each balance sheet date or when events or new circumstances indicate that the recoverable amount will not amount to at least the carrying amount.

For assets, other than goodwill, for which impairment losses have previously been recognized, an assessment is made on every balance sheet date to determine whether past impairment losses should be reversed. In such cases, a reversal is carried out to raise the carrying amount of the impaired asset to its recoverable amount. A reversal of a past impairment loss is recognized only when the new carrying amount does not exceed what the previous carrying amount would have been (after amortization) if the impairment loss had not been recognized. Previously recognized impairment losses – with the exception of goodwill impairment losses – are reversed only if there has been a change in the assumptions based on which the recoverable amount was determined when the impairment loss was recognized. Goodwill impairment losses are not reversed.

For the purpose of impairment testing, assets are allocated to the lowest levels for which there are identifiable cash flows (cash generating units), i.e. by country or several countries where there are integrated operations under joint management. This allocation is the basis for the yearly impairment testing. Goodwill divided between the cash generating units breaks down as follows:

		Goodwill, SEK m
	WACC, %	Dec. 31, 2020	Dec. 31, 2019
Argentina	61.5 (41.9)	4	6
Belgium	8.3 (7.4)	–	46
Chile	11.7 (10.6)	278	298
Denmark	6.6 (5.7)	90	23
Finland	6.9 (6.1)	356	112
France	8.1 (7.3)	988	1,031
Portugal	10.2 (9.0)	1	1
Switzerland	8.1 (7.1)	969	1,006
Slovakia	9.8 (9.0)	2	2
Spain	7.6 (6.6)	465	486
UK	7.8 (7.4)	291	321
Sweden	7.2 (6.1)	47	17
Czech Republic	10.3 (10.0)	0	0
Turkey	23.4 (25.9)	15	21
Germany	7.7 (6.7)	51	53
USA	7.6 (8.0)	3,326	3,670
Total		6,884	7,094

When impairment is indicated, the impairment loss to be recognized is the amount by which the carrying amount exceeds the recoverable amount. The recoverable amount is the higher of fair value less costs to sell and value in use. The value in use is the present value of the estimated future cash flows. The cash flows are based on financial plans established by Group Management and approved by the Board of Directors that normally cover a period of five years. Cash flows beyond this period have been extrapolated using an estimated growth rate. Wherever possible, Loomis uses external sources of information, however, past experience is also important as there are no official indexes or similar information that can be used directly as a basis for assumptions and assessments made in connection with impairment testing.

The calculation of value in use is based on assumptions and assessments. The most important assumptions relate to organic growth, development of the operating margin, utilization of operating capital employed and the relevant WACC (weighted average cost of capital) rate used to discount future cash flows. The discount rates used are stated after tax and reflect specific risks that apply to the various cash generating units.

The assumptions and assessments on which impairment testing is based are summarized below (broken down by Loomis's operating segments):

%	Estimated growth rate beyond forecasted period	WACC
Europe	2.01) (2.0)	6.6 – 61.5
USA	2.0 (2.0)	7.6

1) For all cash generating units, except the Nordic countries, Turkey and Argentina, an annual estimated growth rate of 2.0 percent is used beyond the forecast period. For the Nordic countries, a rate of 0 percent was used, for Turkey 5 percent and for Argentina a rate of 7 percent was used.

During the second quarter of 2020, a need for impairment due to the loss of a large customer was identified within the Group's operations in Belgium and an impairment of SEK 46 million was carried out.

> See Note 9 Items affecting comparability.

The Group's annual impairment testing of all cash-generating units, except for acquisitions completed during the year, was carried out in the third quarter of 2020. No further impairment losses were recognized.

As of the balance sheet date, a sensitivity analysis of the estimated value in use was carried out in the form of a general reduction of 1 percentage point of the organic growth and operating margin for the forecast period, and a general increase in the WACC of 1 percentage point. The sensitivity analysis indicated that none of the adjustments individually generates a need for an impairment loss to be recognized in any cash generating unit.

Accounting of Other intangible assets

Other intangible assets, that is, intangible assets other than goodwill and acquisition-related assets, are reported if it is probable that the expected future economic benefits attributable to the asset will accrue to the Group and that the cost of the asset can be reliably measured.

Other intangible assets have a definite useful life. These assets are reported at cost less accumulated amortization and any accumulated impairment losses.

Straight-line amortization over the estimated useful life is applied for all classes of assets, as follows:

Software licenses 3–8 years

The useful lives of assets are reviewed annually and adjusted, if appropriate.

Goodwill

SEK m		Dec. 31, 2020 Dec. 31, 2019
Opening balance	7,144	6,584
Acquisitions	433	316
Translation differences	–597	244
Closing accumulated balance	6,981	7,144
Opening impairment	–51	–51
Impairment losses for the year	–46	–
Closing accumulated impairment losses	–97	–51
Closing residual value	6,884 7,094

SEK m	Dec. 31, 2020 Dec. 31, 2019
Goodwill distributed by operating segment:
USA	3,326	3,670
Europe	3,558	3,423
Total	6,884	7,094

Acquisition-related intangible assets

SEK m		Dec. 31, 2020 Dec. 31, 2019
Opening balance	1,140	1,056
Acquisitions	140	48
Translation differences	–78	36
Closing accumulated balance	1,202	1,140
Opening amortization	–663	–541
Amortization for the year	–109	–101
Translation differences	55	–21
Closing accumulated amortization	–716	–663
Closing residual value	486	478

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Acquisition-related intangible assets primarily consist of contract portfolios.

Other intangible assets

SEK m		Dec. 31, 2020 Dec. 31, 2019
Opening balance	544	479
Acquisitions	34	3
Capital expenditures	67	85
Disposals/write-offs	–25	–41
Reclassifications	34	3
Translation differences	–32	16
Closing accumulated balance	622	544
Opening amortization	–336	–311
Disposals/write-offs	24	39
Amortization for the year	–62	–51
Reclassifications	–3	–3
Translation differences	24	–10
Closing accumulated amortization	–353	–336
Closing residual value	269	208

Other intangible assets consist primarily of software licenses.

NOTE 14 Tangible fixed assets

ACCOUNTING PRINCIPLES

Tangible fixed assets are reported at cost, less accumulated depreciation and any accumulated impairment losses. Cost includes expenses directly attributable to the acquisition of the asset. Additional expenses are added to the reported value of the asset or are reported as a separate asset, as appropriate, only if it is likely that the Group will benefit from the future financial benefits associated with the asset, and if the cost of the asset can be reliably calculated. The reported value of the replaced part of the asset is eliminated from the balance sheet. All other types of repairs and maintenance are reported as costs in the statement of income in the period in which they arise. Depreciation is based on historical cost and the expected useful life of the asset. The residual values and useful lives of the assets are reviewed on each balance sheet date and adjusted as needed. An asset's reported value is written-down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Straight-line amortization over the estimated useful life is applied for all classes of assets, as follows: Machinery and equipment 4 – 10 years Buildings and ground installations 25 – 67 years Land is not depreciated.

Gains and losses on disposals are determined by comparing proceeds from the sales with the asset´s reported value, and are reported as production expenses or selling and administrative expenses, depending on the type of asset being sold.

Buildings and land

	Group
SEK m		Dec. 31, 2020 Dec. 31, 2019
Opening balance	1,348	1,316
Acquisitions	0	7
Capital expenditure	85	22
Disposals/write-offs	–22	–11
Reclassifications	–11	–75
Translation differences	–66	90
Closing accumulated balance	1,334	1,348
Opening depreciation	–402	–385
Reclassifications	15	36
Depreciation for the year	–42	–40
Translation differences	37	–14
Closing accumulated depreciation	–392	–402
Closing residual value	942	946

Machinery and equipment

	Group		Parent company
SEK m	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Opening balance	16,141	14,609	18	9
Acquisitions	93	76	–	–
Capital expenditure	845	2,044	9	9
Disposals/write-offs	–494	–291	–6	–
Reclassifications	–149	–317	–	–
Translation differences	–1,584	20	–	–
Closing accumulated balance	14,852	16,141	21	18
Opening depreciation	–11,265	–10,182	–7	–6
Disposals/write-offs	419	241	5	–
Reclassifications	115	178	–	–
Depreciation for the year	–1,129	–1,137	–3	–2
Translation differences	1,167	–365	–	–
Closing accumulated depreciation	–10,694	–11,265	–5	–7
Closing residual value	4 158	4 876	16	11

The closing residual value of land included in Buildings and land above amounted to SEK 174 million (206).

Machinery and equipment comprises vehicles, equipment, security equipment (including alarm systems) and IT and telecom equipment. No impairment has been undertaken.

Reclassifications mainly relating to Right-of use assets.

> See Note 15 Right-of use assets.

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NOTE 15 Right-of use assets

ACCOUNTING PRINCIPLES

The Group's leases are mainly for the asset classes Buildings, SafePoints and Vehicles. The leases are normally contracted for fixed periods of between 3 and 20 years. The average contract duration is 44 months. Options to extend or terminate leases are included in some of the Group's leases, but lease extensions are included only where it is likely that these will be exercised.

In the majority of cases the option that provides the possibility of extending or cancelling the agreement can only be exercised by the Group and not by the lessors. The leases do not contain any specific terms or restrictions that could involve the agreements being cancelled if the lease terms are not met, but the leased assets may not be used as security for loans.

The leases are reported as right-of-use assets with the associated liability on the day the leased asset is available for use by the Group. Right-of-use assets are depreciated on a straight-line basis from the start date to the end of the underlying asset's useful life. Each lease payment is divided into amortization of debt and financial expense. The financial expense is to be distributed over the lease term so that in each reporting period an amount is recognized equivalent to a fixed interest rate for the recorded debt during the respective period.The Group's average incremental borrowing rate on lease liabilities for 2020 was approximately 1.05% (1.55).

Measurement of leased assets and lease liabilities

Right-of-use assets are measured at cost and include the following:

• The original value of the lease liability

• Lease payments paid on or before the start date after deduction for any benefits received in connection with the signing of the lease

• Initial direct expenses

• Expenses to return the asset to the condition specified in the terms of the lease.

Lease liabilities include the present value of the following lease payments:

• Fixed lease payments (including those that are substantially fixed)

• Variable lease payments that are determined by an index or a price

• Guaranteed residual value that the lessee expects to be required to pay to the lessor

The exercise price of a purchase option if it is reasonably certain that the lessee will exercise the option
Penalties for terminating the lease if the lease term reflects the assumption that the lessee will exercise this option.

Lease payments are discounted by a discount rate based on the country's underlying currency, exchange rate, the length of the lease and underlying interest rate plus a company-specific risk premium. The discount rate is the same for all asset classes.

Subsequent measurement

All of Loomis's leases are measured according to the cost model, which means that right-of-use assets will be measured at cost less accumulated depreciation and any impairment losses, and adjusted for any remeasurement of the lease liability that reflects a reassessment or amendment of the lease. The remeasurement amount is recognized as an adjustment of the right-of-use asset. If the carrying amount of the right-of-use asset is written down to zero and there is a further reduction in the value of the lease liability, any remaining amount of the remeasurement is recognized in profit or loss.

Right-of-use assets amounted to SEK 2,645 million as of December 31, 2020 (2,911), according to the table below. Buildings account for 73 percent (76) of total right-of-use assets.

SEK m	Buildings	Safepoints	Vehicles	Machinery	Other	Total
Opening balance as of January 1, 2020	2,637	677	384	15	21	3,732
Capital expenditures	283	278	39	–	24	624
Disposals/write-offs	–6	–	–15	–2	–	–23
Reclassifications	–	–	–13	–8	–2	–23
Translation differences	–213	–108	2	1	–1	–320
Closing accumulated balance as of December 31, 2020	2,700	847	397	5	41	3,991
Opening depreciation as of January 1, 2020	–433	–142	–230	–6	–12	–823
Disposals	–	–	13	1	–	14
Depreciation for the year	–386	–187	–56	–2	–6	–637
Reclassifications	–	–	9	5	2	17
Translation differences	48	37	–3	–1	1	82
Closing accumulated depreciation as of December 31, 2020	–770	–292	–266	–3	–15	–1,347
Closing residual value as of December 31, 2020	1,930	555	131	2	26	2,645

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SEK m	Buildings	Safepoints	Vehicles	Machinery	Other	Total
Opening balance as of January 1, 2019 for finance leases before transition to IFRS16	51	–	235	31	6	323
Opening balance as of January 1, 2019 according to IFRS16	2,302	423	54	2	8	2,789
Adjustment of opening balances	16	–2	60	–	5	80
Total opening balance as of January 1, 2019	2,369	422	349	33	19	3,191
Acquisitions	32	–	–	–	–	32
Capital expenditures	230	243	44	1	2	520
Disposals/write-offs	–70	–	–13	–1	–	–84
Reclassifications	5	–	5	–18	–	–9
Translation differences	70	13	–	–	–	83
Closing accumulated balance as of December 31, 2019	2,637	677	384	15	21	3,734
Opening depreciation as of January 1, 2019 before transition to IFRS16	–37	–	–173	–12	–4	–225
Adjustment of opening balances	–6	–	–20	–	–3	–28
Total opening depreciation as of January 1, 2019	–42	–	–192	–12	–6	–254
Disposals	–	–	12	–	–	12
Depreciation for the year	–395	–145	–56	–4	–6	–605
Reclassifications	–	–	6	9	–	15
Translation differences	5	3	1	–	–	8
Closing accumulated depreciation as of December 31, 2019	–432	–142	–230	–6	–12	–823
Closing residual value as of December 31, 2019	2,204	535	155	9	8	2,911

SEK m		Dec. 31, 2020 Dec. 31, 2019
Depreciation of right-of-use assets	–637	–605
Interest expense for lease liabilities	–97	–105
Costs attributable to short-term leases	–35	–34
Costs attributable to low-value leases	–11	–11
Principal payments for lease liabilities	–658	–618

As of December 31, 2020, the Group has obligations of SEK 32 million (32) relating to short-term leases. During 2020, the cost relating to short-term leases (lease term of 12 months or less) amounted to SEK 35 million (34) and leases for which the underlying asset has a low value (<USD 5,000) amounted to SEK 11 million (11).

NOTE 16 Accounts receivable

ACCOUNTING PRINCIPLES

Accounts receivables are reported at amortized cost. > For further information about accounting principles and credit risk, refer to Note 22 Financial instruments and risk management.

Group

SEK m		Dec. 31, 2020 Dec. 31, 2019
Accounts receivable before deduction of provisions for bad debt losses	2,304	2,709
Provision for bad debt losses, net	–105	–90
Total accounts receivable	2,199	2,619

Bad debt losses for the year amounted to SEK 73 million (28), net.

Ageing analysis for overdue accounts receivable

SEK m		Dec. 31, 2020 Dec. 31, 2019
Maturity date <30 days	403	571
Maturity date 30–90 days	175	187
Maturity date >90 days	158	126
Total overdue accounts receivable	736	884

NOTE 17	Prepaid expenses and accrued
	income

ACCOUNTING PRINCIPLES

Prepaid expenses and accrued income are reported at amortized cost.

78	72
41	51
20	16
6	6
325	280
18	61
488	485
	Dec. 31, 2020 Dec. 31, 2019

Parent company

SEK m		Dec. 31, 2020 Dec. 31, 2019
Accrued income	76	79
Other	10	4
Total prepaid expenses and accrued income	86	83

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ACCOUNTING PRINCIPLES

Liquid funds consist of cash and immediately available deposits at banks and equivalent institutions, plus short-term liquid investments with a maturity from the acquisition date of less than three months and which are subject to only an insignificant risk of fluctuation in value. Short-term liquid investments with a maturity from the acquisition date of more than three months are reported as short-term financial investments.

SEK m		Dec. 31, 2020 Dec. 31, 2019
Liquid funds	2,056	1,655
Funds in cash processing operations1)	2,746	3,418
Total liquid funds	4,802	5,073

1) Refer to Note 19 Funds in cash processing operations.

Reconciliation of liquid funds according to the consolidated balance sheet in the Group's cash flow statement is as follows:

SEK m		Dec. 31, 2020 Dec. 31, 2019
Liquid funds according to the Group's balance sheet	4,802	5,073
– Adjusted for inventory of cash at the cash processing operations1)	–2,134	–2,384
– Adjusted for prepayments from customers1)	–612	–1,034
Liquid funds according to the Group's cash flow statement	2,056	1,655

1) Refer to Note 19 Funds in cash processing operations.

NOTE 19 Funds in cash processing operations

ACCOUNTING PRINCIPLES

Loomis's operations involve the transportation of cash and other valuables based on customer contracts. If stipulated in the customer contract, the transported cash is also counted at Loomis's cash centers. The cash that is received by Loomis is on consignment unless otherwise agreed with the customer. Consignment cash is accounted for by the other party and not by Loomis. In cases where Loomis, according to the customer contract, assumes ownership of the cash, it is recognized as inventories of cash. These inventories are financed by specific overdraft facilities and by prepayments from customers. The overdraft facilities and prepayments are used solely for this purpose.

Loomis recognizes the above-mentioned items in their gross amounts. Inventories of cash and prepayments from customers are recognized in the balance sheet as liquid funds. Credit facilities relating to cash processing operations, as well as liabilities relating to prepayments from customers and liabilities to customers, are reported in the balance sheet on the line "Liabilities, cash processing operations". Interest expense for overdraft facilities is recognized in "Production expenses" as it relates to financing of operating activities.

Inventories of cash are entirely separate from Loomis's other liquid funds and cash flow, and according to internal guidelines they are not used in Loomis's other operations or business. In the consolidated cash-flow statement, inventories of cash are therefore recognized net against the above-mentioned overdraft facilities and prepayments from customers. Cash funds in processing operations are not included in liquid funds in the consolidated cash flow.

Funds in cash processing operations

SEK m		Dec. 31, 2020 Dec. 31, 2019
Inventory of cash at the cash processing operations	2,134	2,384
Prepayments from customers	612	1,034
Total funds in cash processing operations	2,746	3,418

Liabilities in cash processing operations

SEK m		Dec. 31, 2020 Dec. 31, 2019
Liabilities related to prepayments from customers and liabilities to customers	1,319	1,694
Credit facility related to cash processing operations	1,149	1,327
Total liabilities in cash processing operations	2,468	3,021

Number of outstanding shares in Loomis AB

	2020		2019
	No. of shares	Quota value (SEK m)	No. of shares	Quota value (SEK m)
Total no. of shares	75,279,829		376.4 75,279,829	376.4
whereof treasury shares	53,797	0.3	53,797	0.3
Total no. of outstand ing shares	75,226,032		376.1 75,226,032	376.1

Share capital

Share capital refers to the capital the owners have contributed to the company through the issued shares. All shares have a quota value of SEK 5, equal voting rights and an equal share in the company's profit and capital.

Other contributed capital

Other contributed capital refers to shareholder's contribution received.

Other reserves

Other reserves comprises translation differences, hedging of net investments net of tax, share-based remuneration, revaluation of contingent considerations and share swap agreements.

Non-controlling interest

In subsidiaries not wholly owned, the share of equity owned by external shareholders is recognized as non-controlling interest.

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NOTE 21 Shares in subsidiaries

				Share of capital directly
	Corporate Identification	Countries where Loomis is		owned by the Parent	Carrying amount	Share of capital owned
Subsidiary	number	registered and has operations	Operations	Company (%)	(SEK m)	by the Group (%)
Loomis Holder Spain SL	B83379685	Spain	Holding company	100	870	100
Loomis Spain SA	A79493219	Spain	CIT and CMS company	–	–	100
Loomis Portugal SA	506632768	Portugal	CIT and CMS company	–	–	100
Transportadora de CaudalesVigencia Duque SA	30-68901181-7	Argentina	CIT and CMS company	–	–	100
Loomis Holding Chile SpA	768882347	Chile	Holding Company	–	–	100
Wagner Seguridad Custodia y
Transporte de Valores SpA	995052407	Chile	CIT and CMS company	–	–	100
Loomis Holding Norge AS	984912277	Norway	Holding company	100	49	100
Loomis Norge AS	983445381	Norway	CIT and CMS company	–	–	100
Loomis Foreign Exchange AS	914588839	Norway	Foreign currency company	–	–	100
Loomis Holding UK Ltd	2586369	UK	Holding company	100	602	100
Loomis UK Ltd	3200432	UK	CIT and CMS company	–	–	100
Loomis Holding US Inc	47-0946103	USA	Holding company	100	689	100
Loomis Armored US LLC	75-0117200	USA	CIT and CMS company	–	–	100
Loomis Österreich GmbH	FN104649x	Austria	CIT and CMS company	99	134	100
Loomis Suomi Oy	1773520-6	Finland	CIT and CMS company	100	171	100
Loomis Value Solutions Oy	1811298-3	Finland	Comprehensive solutions for recycling of cash	100	186	100
Automatia Pankiautomaatit Oy	0974651-1	Finland	Comprehensive solutions for recycling of cash	100	581	100
Loomis Sverige AB	556191-0679	Sweden	CIT and CMS company	100	69	100
Nokas Värdehantering AB	556551-3263	Sweden	CIT and CMS company	–	–	100
Loomis eStore AB	556197-6837	Sweden	Supplier of consumables	100	15	100
Loomis Digital Solution AB	556961-5312	Sweden	Digital payment solutions	100	172	100
Loomis Belgium NV	0834600965	Belgium	CIT and CMS company	100	13	100
Loomis Czech Republic a.s.	26110709	Czech Republic	CIT and CMS company	100	15	100
Loomis Danmark A/S	10082366	Denmark	CIT and CMS company	100	216	100
Loomis Güvenlik Hizmetleri A.S.	539774	Turkey	CIT and CMS company	98	107	100
Loomis Germany Holding Gmbh	HRB 97274	Germany	Holding company	100	136	100
Loomis Holding France SASU	498543222	France	Holding company	100	877	100
Loomis France SASU	479048597	France	CIT and CMS company	–	–	100
Loomis FX Gold and Services	352572937	France	Foreign currency company	–	–	100
Loomis Logistique de Valeurs Azur SA	037020757	France	CIT and CMS company	–	–	100
Loomis Traitement de Valeurs	352330484	France	CIT and CMS company	–	–	100
Loomis Traitement de Valeurs Azur SA	312086739	France	CIT and CMS company	–	–	100
Loomis Traitement de Valeurs EST	997818800	France	CIT and CMS company	–	–	100
Loomis Traitement de Valeurs Provence	444136402	France	CIT and CMS company	–	–	100
Loomis Reinsurance Ltd	152439	Ireland	Reinsurance company	100	110	100
Loomis SK a.s.	36 394 238	Slovakia	CIT and CMS company	100	35	100
Loomis UK Finance Company Ltd	7834722	UK	Investment company	100	2,724	100
Via Mat Holding AG	CHE-103.445.244	Switzerland	Holding company	100	1,650	100
Loomis International Corporate AG	CHE-106.825.583	Switzerland	Holding company	–	–	100
Loomis Schweiz AG	CHE-109.503.213	Switzerland	CIT and CMS company	–	–	100
Total shares in subsidiaries					9,421

A complete detailed specification of subsidiaries can be obtained on request.

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All subsidiaries are consolidated into the Group. The percentage of voting rights in the subsidiaries owned directly by the Parent Company is the same as the percentage of shares held. There is no subsidiary that has a holder of non-controlling interests and that is of significance to the Group.

Shares in subsidiaries

Closing balance, December 31	9,421	8,510
Impairment losses	–111	–62
Acquisitions	581	–
Capital contributions	441	–
Opening balance, January 1	8,510	8,572
SEK m	2020	2019
	Dec 31,	Dec 31,

The change in shares in subsidiaries in 2020 is primarily due to capital contributions to a number of subsidiaries, and acquisition of shares in Automatia Pankkiautomaatit Oy. The change in 2019 is due to write-down of shares in Loomis Güvenlik Hizmetleri.

NOTE 22 Financial instruments and risk management

ACCOUNTING PRINCIPLES

Recognition and derecognition from the statement of financial position

A financial asset or financial liability is recognized in the balance sheet when an entity becomes party to the contractual provisions of the instrument. Accounts receivable are recognized in the balance sheet when an invoice has been sent. A liability is recognized when the counterparty has performed services and there is a contractual obligation to pay, even if the invoice has not yet been received. Accounts payable are recognized when an invoice has been received.

Financial assets are derecognized from the balance sheet when the rights in the contract are realized or expire, or the entity has essentially transferred all risks and rewards associated with ownership. A financial liability is derecognized from the balance sheet when the contractual obligation is met or otherwise extinguished.

Financial assets and financial liabilities are offset and reported net in the balance sheet only where there is a legal right to offset the

amounts and there is an intention to either settle the items on a net basis or where the asset will be realized and the liability settled simultaneously.

Acquisitions and divestments of financial assets are recognized on the transaction date, which is the date when the entity undertakes to acquire or divest the asset, except where the entity acquires or divests listed securities, in which case the settlement date applies for recognition.

Classification and measurement

Financial assets are initially classified based on the business model the asset is managed under and the nature of the cash flow associated with it.

Financial assets recognized at amortized cost

Financial assets held to maturity within the framework of a business model the objective of which is to collect predetermined or determinable cash flows and where the payments consist solely of payment of principal and interest are recognized at amortized cost applying the effective interest method. The amortized cost of a financial asset is equivalent to the fair value upon acquisition less the principal and accumulated amortization and impairment losses.

This category of financial assets mainly consists of accounts receivable and liquid funds. Liquid funds consist of cash and deposits at banks and equivalent institutions that are immediately available, and short-term liquid investments with a maturity of less than three months from the acquisition date and which are subject to only an insignificant risk of fluctuation in value. Liquid funds include inventories of cash and prepayments from customers that constitute funds in cash processing operations.

Accounts receivable are recognized at the amounts expected to be received, after deductions for bad debt that are individually assessed. For accounts receivable, contract assets and lease receivables, impairment losses are recognized directly in profit/loss for the period for anticipated credit losses for the remaining term of the asset. A simplified model is used to calculate the credit losses on the Group's accounts receivable where accounts receivable are grouped based on the customers' credit rating. In certain cases, separate assessments are made of individual contract assets. The calculation is made using a provision matrix based on past events, current circumstances and forecasts of future economic conditions and the value of money.

Financial assets recognized at fair value through profit or loss

Financial assets held under other business models for which the purpose is speculation, held for trading or where the nature of the cash flow excludes the first two business models are recognized at fair value through profit or loss. The fair value is determined according to the fair value hierarchy described in more detail later in this note.

This category of assets includes contingent considerations for acquisitions and interest-bearing financial current assets consisting of derivative instruments in the form of currency.

Financial assets recognized at fair value through other comprehensive income

Financial assets held within the framework of a business model the objective of which can be achieved both by collecting predetermined or determinable cash flows and by selling the financial assets, and where the payments consist solely of principal and interest are recognized at fair value through comprehensive income.

Loomis currently has no assets in this category.

Financial liabilities recognized at fair value through profit or loss

Financial liabilities are recognized at fair value through profit or loss if they are 1) a contingent consideration to which IFRS 3 applies, 2) held for trading or 3) initially identified as a liability at fair value through profit or loss.

This category of liabilities includes contingent considerations and derivative instruments in the form of currency and share swaps for share-based payments, which are measured at fair value through profit or loss.

Financial liabilities recognized at amortized cost

Financial liabilities that do not meet one of the three criteria above are recognized at amortized cost using the effective interest method.

Accounts payable are measured at amortized cost. The expected maturities of the accounts payable are short and for this reason the liability is recognized at the nominal amount with no discounting. Interest-bearing bank loans, overdraft facilities and other loans are measured at amortized cost according to the effective interest method. Any difference between the loan amount (net after transaction costs) and debt repayment or amortization is reported over the term of the loan.

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Hedge accounting

Hedge accounting is applied for investments in foreign operations. Net investments in foreign operations have been hedged by foreign currency loans being recognized on the closing day exchange rate. In hedge accounting, the asset (net investment in foreign operations) and the liability (foreign currency loan) are linked, which means that only net changes in value are recognized through other comprehensive income.

Efficiency measurement

A prospective assessment of efficiency is made based on a qualitative analysis, and a hedge is considered effective if the hedging instrument's critical terms fully match the corresponding terms for the hedged item. The critical terms evaluated for the hedged item are nominal amount and currency.

As the Group's currency risk exposure is hedged using a financial liability or a currency swap, and the critical terms of the hedging instrument and the hedged item match, there is considered to be an economic link between the hedging instrument and the hedged item. The hedged instrument and the hedged item are expected to develop in opposite directions as a consequence of a change in the underlying hedged risk.

Hedge ratio

The hedge ratio is the hedged instrument in relation to the hedged item. The Group's hedge ratio is 1:1 as the volume (nominal amount) of the hedging instrument is equivalent to the volume of the hedged item. No adjustment of the hedge ratio is expected.

Financial risk management

Loomis is exposed to risk associated with financial instruments, such as liquid funds, accounts receivable, accounts payable and loans. The risks related to these instruments are, primarily, the following:

Interest rate risks associated with liquid funds and loans
Exchange rate risks associated with transactions and recalculation of shareholder's equity
Liquidity risks associated with short-term solvency
Financing risks relating to the Company's capital requirements
Credit risks attributable to financial and commercial activities
Capital risks attributable to the capital structure
Price risks associated with changes in raw material prices (primarily fuel)

Loomis's financial risk management is primarily coordinated centrally by Loomis AB's Treasury function. By concentrating the risk

management, as well as internal and external financing, economies of scale can be used to obtain the best possible interest rate for both investments and borrowings, currency fluctuations, and management of fixed interest rate lending.

The aim of Loomis AB's Treasury function is to support the operating activities, optimizing the level of the financial risks, manage the net debt effectively and ensure compliance with the terms of loan agreements.

The Financial Policy, established by the Board of Directors, comprises a framework for the overall risk management. As a complement to the Financial Policy, the CEO of Loomis establishes instructions for Loomis AB's Treasury function which more specifically govern the manner in which the financial risks to which Loomis is exposed are to be managed and controlled. This instruction handles the principles and limits regarding foreign exchange risks, interest rate risks, credit risks, use of derivative instruments and investment of excess liquidity. Derivatives are not used for speculative purposes, but rather only to minimize the financial risks.

Financial risk factors

Interest rate risk

Interest rate risk is the risk that Loomis's earnings will be affected by changes in interest rates. Loomis's subsidiaries normally hedge their interest rate exposure by borrowing from Loomis AB using loans with one-year maturity or less, where permitted.

The average fixed interest term as of December 31, 2020 was about 2 months. A permanent change in the interest rate of +1 percent as of December 31, 2020 would have an annual net effect on financial expense of SEK –86 million (–87). Loomis's borrowing as of December 31, 2020 amounted to SEK 5,876 million (5,927). The average interest rate on the debt during the year was 1.35 percent (1.52), excluding arrangement costs for the existing credit facilities.

> For further information regarding assumptions on pension liabilities, refer to Note 23 Provisions for pensions and similar obligations.

Exchange rate risk – Translation risk

As a large number of subsidiaries operate in other countries, the Group's balance sheet and statement of income are affected by the translation of foreign currencies to SEK. This exposure gives rise to a translation risk, which means that unfavorable changes in exchange rates could have a negative impact on the Group's foreign net assets when translated into SEK. Loomis's capital employed as of December 31, 2020 amounted to SEK 15,392 million (16,923). If SEK had weakened/strengthened by 5 percent compared to USD, with all other variables being the same, Loomis's shareholders' equity would have been affected in the amount of SEK 289 million (298). The corresponding

figures for GBP would be SEK 18 million (16), for EUR SEK 92 million (77) and for CHF SEK 57 million (35). Loomis uses hedge accounting according to the principle of hedging net investments to limit translation risk. Loomis has two hedges, one amounting to USD 107 million (124) where the hedged item is the net investment in the USA; the second one entered into in connection with an acquisition in CHR, the hedge amounting to CHF 40 million (60) where the hedged item is the net investment. The ineffectiveness of the hedges during the year was SEK 0 million (0). For other currencies, loans and currency swaps constitute hedges of corresponding receivables where hedge accounting is not applied.

The goal of the Group's capital structure is to continue to generate a high return for the shareholders and to maintain an optimal capital structure in order to keep the cost of capital as low as possible. The capital structure can be adjusted according to the needs that arise through changes in dividends to shareholders, the issuance of new shares or the sale of assets to decrease liabilities. Evaluation of the capital structure is based on relevant key ratios.

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The table below shows how the Group's capital employed is broken down by currency (nominated in SEK m) and is financed, including derivative instruments:

Dec 31, 2020 SEK m	EUR	USD	GBP	CHF	SEK	Övriga	Total
Capital employed	4,588	6,627	708	1,573	712	1,185	15,392
Net debt	-2,749	-848	-352	-438	-1,872	-360	-6,619
Net exposure	1,839	5,778	356	1,135	-1,160	825	8,773
Dec 31, 2019
SEK m	EUR	USD	GBP	CHF	SEK	Övriga	Total
Capital employed	4,964	7,472	983	1,684	544	1,277	16,923
Net debt	–3,428	–1,519	–658	–990	–371	–367	–7,332
Net exposure	1,536	5,953	325	695	172	910	9,591

Exchange rate risk – Transaction risk

Transaction risk is the risk that changes in exchange rates will negatively affect the Group's earnings. Since the majority of Loomis's subsidiaries operate outside Sweden, there are certain risks associated with financial transactions in different currencies. These risks are limited by the fact that both costs and income are generated in the local currency in the respective market. This is also the case for loans taken in foreign currencies where the risk of adverse fluctuations in interest payments due to currency fluctuations is limited by income being generated in the same currencies. Furthermore, Loomis acts on the principle of the internal lending in foreign currencies must be met by the corresponding external debt in foreign currency. Since Loomis's business is largely local, the transaction risk is not considered material.

From the Group's perspective, Loomis has limited operations that involve trading in foreign currencies in cash. When currencies are traded based on purchase orders from customers, the exchange rate risk may be hedged using a forward exchange contract. Loomis does not apply hedge accounting for these contracts and the operating income is remeasured.

Financial credit risk

Credit risk is the risk of loss if a counterparty is unable to fulfill its commitments. Financial credit risk is divided into credit risk in accounts receivable and financial credit risk associated with loans and derivatives.

Financial credit risk in accounts receivable

The risk of credit losses is generally low within the Group due to a range of factors. For example, a large proportion of sales are based on contracts with well-known, medium-sized or large customers where the relationship is an established and long-term one. This results in stable payment inflows. New customers are checked for creditworthiness and Loomis performs its services for customers with a good geographical spread in multiple sectors. Exposure to a financial downturn in any particular sector or region is therefore relatively limited.

Also, although Loomis's services are vital in many respects, they are still ancillary to the customers' operations. This means that the cost of Loomis's services represents a small portion of the customers' total cost base, making Loomis less exposed to payment problems than suppliers of services or goods more directly included in the customer's value chain.

All of this provides stable payment flows for sales generated – as evidenced by the low level of bad debts, which amounted to around 0.4 percent of sales in 2020.

The value of the outstanding accounts receivable was SEK 2,199 million (2,619) on December 31, 2020. Provisions are made for possible losses and amounted to SEK 105 million (90).

For further information regarding bad debt refer to Note 16 Accounts receivable.

Financial credit risk relating to loans, derivatives and financial assets The Group mainly uses banks with a high official credit rating to manage cash and for investment of any surplus liquidity. All banks are assigned a maximum exposure amount for outstanding bank balances, investments and derivatives with positive market value.

For cash balances and investments recognized at amortized cost, the general model is used to calculate expected credit losses, applying the exception for low credit risk. The rating of the banks is used to establish the probability of default and outstanding amounts are used as an

approximation of exposure to default. Given that maturities are short and counterparties are stable, the amount of the credit reserve is insignificant. The counterparties are considered in default when they have a credit rating below B. The largest weighted exposure for all financial instruments to one and the same bank as of the balance sheet date was SEK 363 million (390).

The table below shows the credit ratings of financial assets1) on the balance sheet date according to Standard & Poor's or according to a similar rating institute with equivalent credit ratings:

SEK m		Dec 31, 2020 Dec 31, 2019
A -1+	503	26
A -1	1,521	1,328
Other holdings	354	483
Total	2,378	1,837

1) Excluding liquid funds in the cash processing operations. For information on funds in cash processing operations, see Note 19 Funds in cash processing operations.

Net debt

The tables below show the net debt and specifies the change in net debt during the year:

SEK m		Dec 31, 2020 Dec 31, 2019
Bank loans	187	21
Derivatives and other items	11	8
Current loans payable	199	29
Bond	1,003	1,045
Bank loans	1,799	911
MTN programme	1,750	1,750
Commercial papers	1,127	2,012
Derivatives and other items	44	75
Non-current loans payable	5,723	5,793
Total loans payable	5,922	5,822
Liquid funds excluding funds in the cash
processing operations	2,056	1,655
Other interest-bearing receivables	428	274
Financial net debt	3,438	3,893
Lease liabilities	2,651	2,873
Pension obligation, net	530	566
Net debt	6,619	7,332

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Change in net debt during 2020:

		Change due to financing cash	Acquisition/	Exchange rate	Change in fair
	CB Dec 31, 2019	flows	Divestment	effects	value	Reclassification	Other	CB Dec 31, 2020
Current liabilities	29	–9			3	176		199
Non-current liabilities	5,793	202	15	–115	4	–176		5,723
Defined benefit pension plans	918						–84	834
Lease liabilities	2,873						–222	2,651
Total liabilities	9,613	193	15	–115	7	0	–306	9,407
Liquid funds excluding funds in the cash processing operations	–1,655						–401	–2,056
Other interest-bearing liabilities	–274	–144		-4	–6			–428
Defined benefit pension plans	–352						48	–304
Total assets	–2,281	–144		–4	–6		–353	–2,788
Net debt	7,332	49	15	–119	1		–659	6,619

Financing risk and liquidity risk

Financing risk is the risk that it will become more difficult or more expensive to finance outstanding loans. By maintaining a balanced maturity profile for the Group's borrowing, financing risk can be reduced. The Group's goal is for no more than 25 percent of its total external borrowing and credit obligations to mature within the coming 12-month period.

All long-term financing and most short-term financing during the year was handled by Loomis AB's Treasury function.

The credit facilities have the usual terms and conditions, one of

which sets a limit on the Group's net debt in relation to operating income before interest, tax, depreciation and amortization (EBITDA). Loomis met this condition with a good margin throughout 2020.

Liquidity risk is the risk that Loomis will not be able to meet its payment obligations. Loomis's liquidity risk is managed by maintaining sufficient liquidity reserves (cash and bank balances, short-term investments and the unutilized portion of credit facilities) equivalent to a minimum of 5 percent of the Group's annual sales. The liquidity reserve in 2020 had a good margin in relation to the minimum requirement.

The following table shows Loomis AB's credit facilities and liquidity reserve.

The amounts presented in the table are the contractual discounted cash flows, which are the same as the nominal liabilities as the bank loans carry variable interest rates and the credit margins are deemed to be the same as would be obtained in the event of refinancing as of the closing date. The commercial papers issued are classified as longterm liabilities since the commercial paper program has a guaranteed long-term credit facility as security.

			The facility amount	The facility amount	Utilized amount		amounts of which are indicated in the table.
Programmes	Dec 31, 2020	Currency	(LOC m)	(SEK m)	(SEK m)	Maturity date
MTN programme1)		SEK	1,750	1,750	1,750	2023
Commercial papers2)		SEK	1,129	1,129	1,129	2021	4) Excludes liquid funds in the cash processing operations
Facilities
Syndicated loan facility 1		USD	150	1,226	204	2022
Syndicated loan facility 1		SEK	1,000	1,000	200	2022
Syndicated loan facility 1		EUR	65	652	0	2022
Syndicated loan facility 2		EUR	150	1,504	0	2024
Svensk Exp Kredit Bond		EUR	100	1,003	1,003	2024-2026
Bilateral loan		CHF	40	371	371	2021-2022
Term loan		SEK	1,200	1,200	1,200	2022
Credit facility		SEK	200	200	0	2021
Total				10,034	5,857
Non-utilized facilities					4,177
Adjustment for outstanding Commercial papers3)					–1,129
Cash and cash equivalents4)					2,056
Liquidity reserve					5,104
Liquidity reserve as percentage of the Group's annual revenue.					27%

1), 2) The frameworks for the respective programs amount to SEK 3,000 million, the issued amounts of which are indicated in the table.
3) Outstanding commercial papers are excluded from the percentage of unutilized facilities as the long-term loan facility is a back-up for the issued volume of commercial papers.

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The table below shows an analysis of the Group's financial liabilities and net derivative instruments recognized as financial liabilities, classified according to the time remaining from the balance sheet date until the contractual maturity date. The amounts presented in the table are the contractual discounted cash flows, which are the same as the nominal liabilities as the bank loans carry variable interest rates and the credit margins are deemed to be the same as would be obtained in the event of refinancing as of the closing date. The commercial papers issued are classified as long-term liabilities since the commercial paper program requires a long-term credit facility as security.

Dec 31, 2020	Less than	Between 1	More than
SEK m	1 year	and 5 years	5 years
Bank loans	187	5,335	331
Accounts payable	760	–	–
Pension obligation	–	834	–
Lease liabilities	546	2,105	–
Derivatives	15	–	–
Other items	768	–	–
Total	2,277	8,274	331

Dec 31, 2019	Less than	Between 1	More than
SEK m	1 year	and 5 years	5 years
Bank loans	20	5,103	690
Accounts payable	817	–	–
Pension obligation	–	918	–
Lease liabilities	560	2,314	–

Total 2,064 8,334 690

Credit relating to cash processing operations

The Company's total external credit granted for financing cash processing operations was SEK 2,829 million. The total credit utilized was SEK 986 million.

Derivatives 8 – – Other items 660 – –

Price risk

The Group is exposed to price risks related to the purchase of certain raw materials (mainly fuel). The Group limits these risks through customer contracts containing fuel surcharges or annual general price adjustments to the largest extent possible.

Fair value of assets and liabilities

The carrying amounts of the assets and liabilities in Loomis's balance sheet are deemed to be a good approximation of the fair values. The

fair value of liabilities and currency swaps that are included as hedging instruments in the hedging of net investments amounts to SEK –576 million (–811) and SEK 26 million (22) respectively.

Financial instruments

Financial derivative instruments, such as forward exchange contracts and interest rate swaps, are aimed at limiting the financial risks to which Loomis is exposed. These types of instruments are never used for speculative purposes. For accounting purposes, financial instruments are classified based on the categories in IFRS 9. The following table shows Loomis's financial assets and liabilities, measurement categories and the fair value of each item. Loomis will continue to use derivative instruments in 2021 to limit exposure to the financial risks mentioned in this note.

Financial Instruments; reported values by category of valuation:

		Dec 31, 2020	Dec 31, 2019
	IFRS 9	Carrying mount/	Carrying mount/
SEK m	Category	Fair value	Fair value
Financial assets
Interest-bearing financial
fixed assets	1	361	213
Accounts receivable	1	2,199	2,619
Interest-bearing financial
current assets	2	67	61
Liquid funds1)	1	2,056	1,655
Financial liabilities
Current loans payable	4	532	546
Current loans payable	3	737	581
Long-term loans payable	4	7,824	8,106
Accounts payable	3	600	668

1) Excluding liquid funds in the cash processing operations. For more information about funds in the cash processing operations, refer to Note 19 Funds in cash processing operations.

> Refer to Note 19 Funds in the cash processing operations.

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Parent Company financial instruments

> For further information about the accounting principles of the parent company, refer to Note 1 Accounting principles.

Financial risks

There is no difference between the carrying amounts and estimated fair values of assets and liabilities in Loomis AB's balance sheet. The fair value of liabilities and currency swaps that are included as hedging instruments in hedging of net investments amounts to SEK –576 million (–811) and SEK 26 million (22) respectively.

Loomis uses hedge accounting according to the principle of hedging net investments to limit translation risk. Loomis has two hedges, one with a value of MUSD 107 (124) where the shares in subsidiaries are hedged. In connection with the acquisition of VIA MAT, Loomis entered into a hedge amounting to CHF 40 million (60) where the net investment is hedged. The ineffectiveness of the hedges during the year was SEK 0 million (0).

For other currencies, loans and currency swaps constitute hedges of corresponding receivables where hedge accounting is not applied.

The table below presents an analysis of the Parent Company's financial liabilities classified according to the time remaining from the balance sheet date until the contractual maturity date. The amounts stated in the table are the contractual, undiscounted cash flows.

Dec 31, 2020	Less than	Between 1	More than
SEK m	1 year	and 5 years	5 years
Bank loans	176	5,335	331
Accounts payable	21	–	–
Derivatives	–	–	–
Other items	–	–	–
Total	197	5,335	331


Dec 31, 2019 SEK m	Less than 1 year	Between 1 and 5 years	More than 5 years
Bank loans	–	5,026	690
Accounts payable	26	84	–
Derivatives	–	–	–
Other items	–	–	–

NOTE 23 Provisions for pensions and similar commitments

ACCOUNTING PRINCIPLES

The Group operates, or otherwise participates, in a number of defined benefit and defined contribution pension plans. These plans are structured in accordance with local rules and practices. The overall cost of these plans for the Group is detailed in Note 7.

Defined contribution pension plans

A defined contribution plan is a pension plan under which the Company pays fixed contributions to a separate legal entity and to which it has no legal or informal obligations to pay further contributions. In 2020 the cost for defined contribution plans amounted to SEK 186 million (216).

Defined benefit pension plans

Defined benefit plans are pension plans providing benefits after termination of service other than those benefits provided by defined contribution plans. Calculations for the defined benefit plans are carried out by independent actuaries on a continuous basis. Costs for defined benefit plans are estimated using the Projected Unit Credit method resulting in a cost distributed over the individual's period of employment.

Obligations are valued at the present value of expected future cash flows applying a discount rate corresponding to the interest rate on first-class corporate bonds or government bonds with a duration that is approximately the same as that of the obligations. Plan assets are reported at fair value.

Loomis recognizes gains and losses related to changes in actuarial assumptions via Other comprehensive income on the lines Actuarial gains and losses. The actuarial gains and losses refers to changes due to experience, changes in financial assumptions and changes in demographic assumptions. These actuarial gains and losses are reported for all defined benefit plans relating to post-employment benefits in the period in which they occur.

If the recognition of a defined benefit plan results in an asset, this is recognized as an asset in the consolidated balance sheet under "Pension plan assets". If the net result is a liability, it is reported as a provision under "Provisions for pensions and similar commitments." Pension plan assets and Provisions for pensions and similar commitments are included in net debt. The interest component relating to defined benefit plans is recognized as financial expense/income.

Summary of defined benefit plans

The defined benefit obligation and plan assets are composed by country as follows:

Funded and unfunded benefit obligations

			Dec 31, 2020
	France	Switzer land	UK	Other countries	Total
Funded plans
Present value of funded defined benefit obligations	–	1,028	1,737	95	2,860
Fair value of plan assets	–5	–776	–2,000	–66	–2,846
Funded plans, net	–5	252	–262	29	14
Unfunded plans
Present value of unfunded benefit obligations	498	–	–	18	516
Total funded and unfunded benefit obligations	493	252	–262	48	530

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Funded and unfunded benefit obligations

			Dec 31, 2019
		Switzer		Other
	France	land	UK	countries	Total
Funded plans
Present value of funded
defined benefit obligations	–	1,015	1,730	116	2,862
Fair value of plan assets	–5	–664	–2,057	–83	–2,809
Funded plans, net	–5	351	–327	34	53
Unfunded plans
Present value of unfunded
benefit obligations	493	–	–	21	513
Total funded and unfunded benefit
obligations	488	351	–327	54	566

UK

The Loomis UK Pension scheme represents approximately 51 percent (51) of the Group's total commitments in respect of Defined benefit obligations as of December 31, 2020. The plan is a funded defined benefit plan in which the assets are held separately from those of the employer. Under the Loomis UK pension scheme, employees are entitled to annual pensions paid directly from the scheme on retirement which are calculated as a percentage of the member's final pensionable salary multiplied by number of years of service. In payment, the pension is increased annually with increases typically being linked to inflation capped at a certain level. Benefits are also payable on death and following other events such as withdrawing from the scheme.

The scheme is administrated by a board of Trustees which is legally separated from the Company. The board of Trustees are composed of representatives both from the employer and employees and is chaired by an Independent Trustee. The board of Trustees are required by law to:

Act in the best interest of all beneficiaries of the scheme
Ensure the scheme is operated in accordance with its rules and statutory requirements i.e the general law of trusts and specific UK law applying to pension schemes, including Acts of Parliament and regulations.
Be responsible for the investment strategy of the scheme's assets and
Be responsible for the day-to-day administration of the benefits.

The board of Trustees rely on professional advice to help them meet the requirements stated above.

Under UK Regulations, the company and the board of Trustees

must agree what contributions should be paid into the scheme after receiving advice from an actuary.

The UK pension scheme is required to perform a funding valuation every third year to ensure long-term financing and consolidation. The scheme has, since March 3, 2013 been closed for future accrual.

The Company and the board of Trustees are working together to help ensure the UK scheme's investment risk are reduced as and when appropriate. This includes holding a diversified asset portfolio to ensure there is no concentrated risk in one market, asset class or region.

Loomis AB has also provided a guarantee of GBP 85 million to the pension scheme to further show its commitment to meet any obligations that the scheme provides to its members.

Loomis UK also participates in various defined contribution pension plans.

Switzerland

In Switzerland there are two funded pension schemes which, combined, constituted around 30 percent (30) of the Group's total commitments as of December 31, 2020. The Swiss pension schemes are funded so that the assets in the schemes consist of assets in pension funds that are separate from the other assets of the entities. The Swiss pension schemes are open to new employees and benefits are accrued in the schemes. There are no previous employees as members with vesting rights in the schemes because the pension liability goes to the new employer when employment ends.

Both of the pension schemes include pension benefits, disability pension, and benefits in the event of death in service for surviving spouses and children. The pension benefits in these schemes are based on age, number of years in service, salary, and earned pension capital. The disability pension benefits amount to a percentage of the pensionable salary. The death benefits and benefits for surviving spouses are calculated on the pensionable salary while the survival coverage for children for one of the plans is based on a percentage of the anticipated pension capital and for the other plan, based on the pensionable salary. Premiums increase with age and are shared equally between the employer and the employee.

Both of the pension plans in Switzerland are controlled by boards that consist of an equal number of representatives from the company and the employees. Loomis's pension plans in Switzerland are reinsured with an external party. This means that all of the risks associated with the pension liability, including the investment risk, are covered by an insurance contract. Under this insurance contract the third party guarantees the funding level, which is calculated based on local laws, at a rate of 100 percent. The third party activity is regulated by

federal Swiss legislation and all risk management activities are covered by the Swiss Solvency Test.

France

In France there are mainly two unfunded plans, a Retirement indemnity plan that represents approximately 14 percent (14) of the Group's total commitments in respect of Defined benefit obligations as of December 31, 2020 and a Jubilee award plan that represents approximately 1 percent (1) of the total commitments. The retirement indemnity plan provides a one-off lump sum retirement benefit to employees who retire from Loomis with five or more years' service. The size of the benefit is based on an employee's years of service, their salary at retirement and their role at the company.

The requirement for a one-off retirement indemnity is a legal obligation. The benefit from the plan is fixed by a collective bargaining agreement governed by industry representatives. A Council tribunal deals with any disputes between the employer and employees over the benefit payments. Benefits are paid directly by the company as and when they arise. The plan is open to future accrual and new members.

The Jubilee award plan is an unfunded arrangement and is paid to employees upon completion of a certain number of years of service.

Other countries

In addition to the plans mentioned above, there is a funded defined benefit plan in Norway that represent approximately 3 percent (3) of the Group's total commitments in respect of Defined benefit obligations as of December 31, 2020. There are also unfunded defined benefit plans in Austria that represent approximately 1 percent (1) of the Group's total commitments as of December 31, 2020.

Sweden

Blue-collar employees of the Group in Sweden are covered by the SAF-LO collective pension plan, which was negotiated by the parties in the labor market for persons employed in the private sector under collective agreements. The plan is a multi-employer defined contribution arrangement. Professional employees of the Group are instead covered by the ITP plan, which is a collectively agreed plan for professional employees within the private sector. A number of years back ITP was split into ITP1 and ITP2. ITP1 is a multi-employer defined contribution plan. ITP2 is a defined benefit plan which, according to a statement (UFR 10) issued by the Swedish Financial Reporting Board, is a multi-employer defined benefit plan. Alecta, a mutual insurance company that manages the pension plan's benefits, is unable to provide Loomis, or other Swedish companies, with sufficient

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information with which to determine an individual company's share of the total commitment and its plan assets. Consequently, the ITP pension plan that is secured by insurance with Alecta is reported as a defined contribution plan. The cost for 2020 amounted to SEK 15 million (14). The cost for 2021 is expected to be at a similar level. Alecta's surplus may be distributed to the policy holders and/or the insured. At the end of 2020, Alecta's surplus in the form of the collective consolidation level amounted to 148 percent (148). The collective consolidation level comprises the market value of Alecta's assets as a percentage of the insurance commitments calculated in accordance with Alecta's actuarial assumptions, which do not accord with IAS 19.

Membership Summary

As of December 31, 2020 the present value of the defined benefit obligation was comprised as follows:

	Dec 31, 2020
	France	Switzer land	UK	Other countries
Liability Active members (% of total obligation)	100	66	–	93
Liability Deferred members (% of total obligation)	–	–	54	–
Liability Pensioner members (% of total obligation)	–	34	46	7
Total	100	100	100	100
Pension plan duration (years)	11	19	17	19

Financial disclosures

The amounts recognized in the balance sheet are as follows:

Provisions for pensions and similar commitments, net

Total provisions for pensions and similar commitments, net	530	566
Plans included in Provisions for pensions and similar commitments	834	918
Plans included in Pension plan assets	–304	–352
SEK m	Dec 31, 2020	Dec 31, 2019

The table below shows the total cost for defined benefit plans in 2020 and 2019.

Pension costs

SEK m	2020	2019
Current service costs	53	48
Administration costs (excluding investment related expenses for funded plans)	2	2
Net interest cost/gain (–)	–2	0
Recognized actuarial gains (–)/ losses	2	–
Past service costs/credits (–) & settlements	–43	–10
Total pension costs	12	39

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The movement in the net defined benefit obligation during 2019–2020 is as follows:

Change in provisions for pensions and similar commitments, net

	Obligations	Plan assets	Net	Obligations	Plan assets	Net
SEK m		2020			2019
Opening balance	3,375	–2,809	566	2,941	–2,547	394
Current service costs	53	–	53	48	–	48
Administration costs (excluding investment related expenses for funded plans)	2	–	2	2	–	2
Net interest cost/gain (–)	37	–39	–2	62	–63	0
Recognized actuarial gains (–)/losses	2	–	2	–	–	–
Past service costs/credits (–) & settlements	–44	1	–43	–12	2	–10
Total pension costs	50	–38	12	100	–60	39
Actuarial gains (–) and losses due to experience	–8	–	–8	–2	–	–2
Actuarial gains (–) and losses from changes in financial assumptions	246	–	246	274	–	274
Actuarial gains (–) and losses from changes in demographic assumptions	28	–	28	–25	–	–25
Changes in the asset ceiling, excluding amounts included in interest expense/interest income	–	–14	–14	–	2	2
Return on plan assets, excluding amounts included in Net interest cost / gain (–)	–	–251	–251	–	–135	–135
Total actuarial gains (–) and losses before tax	266	–265	1	247	–133	113
Employer contributions	–	–27	–27	–	–36	–36
Employee contributions	20	–20	0	20	–20	0
Benefits paid to participants	–119	87	–32	–187	162	–25
Administration costs paid over the year	–2	6	4	–2	7	6
Reclassifications	–	–	–	6	–6	0
Acquisitions/Divestments	–	–	–	73	–	73
Translation differences	–214	220	6	177	–175	2
Closing balance	3,376	–2,846	530	3,375	–2,809	566

The contribution for 2021 is expected to be approximately SEK –63 million (–58).

Assumptions and sensitives

The significant actuarial assumptions used as of balance sheet day were as follows:

Main actuarial assumptions as per December 31, 2020 (%)	UK	Switzer land	France	Other
Discount rate		1.50 0.05–0.13		0.33 0.95–1.20
Salary increases	n/a	1.00		1.80 1.80–2.25
Inflation	2.40–3.15	0.75		0.60 0.00–1.50
Pension increases	3.10	0.00	n/a	0.00

Main actuarial assumptions as per December 31, 2019 (%)	UK	Switzer land	France Other
Discount rate		2.10 0.15–0.25	0.77 1.10–1.70
Salary increases	n/a	1.00	1.80 1.80–2.55
Inflation	2.20–3.20	0.75	1.20 0.00–1.50
Pension increases	3.20	0.00	n/a 0.00–0.70

These assumptions are used in the valuation of the obligations of the defined benefit plans at the end of 2020 and 2019 and to determine the pension costs for 2021 and 2020. In the UK, the discount rate is based on iBoxx UK AA 15 years + with consideration given to duration of the liabilities. In Switzerland, the discount rate is based on discount rates published by Chamber of Pensions Actuaries, with consideration given to the duration of the liabilities. In the Eurozone, the discount rate is based on iBoxx Euro 10 years +, with consideration given to the duration of the liabilities.

Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in each territory. The mortality tables used in France, Switzerland and UK as follows:

Mortality tables

	2020	2019
France	INSEE 2016–2018	INSEE 2015–2017
Switzerland	LPP 2015	LPP 2015
UK	SAPS2 base tables with scheme specific adjustments, CMI core 2018 projections and a 1% long term improvement rate	SAPS2 base tables with scheme specific adjust ments, CMI core 2017 projections and a 1% long term improvement rate

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For Switzerland and the UK, the above assumptions mean the following average remaining life expectancy for a person retiring at the age of 65:

UK	Dec 31, 2020
Life expectancy at 65 for a pensioner currently aged 65:
Men	20.4
Women	22.9
Life expectancy at 65 for a pensioner currently aged 45:
Men	21.5
Women	24.8

Switzerland	Dec 31, 2020
Life expectancy at 65 for a pensioner currently aged 65:
Men	22.7
Women	24.8
Life expectancy at 65 for a pensioner currently aged 45:
Men	24.5
Women	26.5

No average life expectancy in years are given for France as this is not a key assumption due to the nature of the plan (lump sum arrangement).

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is shown in the table below. The table shows the impact on the Defined benefit obligation in SEK millions. The Defined benefit obligation is decreasing when showing a negative (–) sign, whereas a positive (+) sign increases the obligation.

Sensitivity analysis

SEK m	Dec 31, 2020
0.1% increase in discount rate	–59
0.1% decrease in discount rate	60
0.1% increase in inflation rate	32
0.1% decrease in inflation rate	–32
1 year increase in life expectancy	99

The above sensitivity analyses are based on a change in one assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to changes in significant actuarial assumptions the same

method, the Projected Unit Credit method, has been applied as when calculating the pension liability recognized in the balance sheet. The method and types of assumptions used in preparing the sensitivity analysis have not been changed compared to previous year. The sensitivity analysis has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change.

Market value of plan assets by category 2020

Equities, SEK 5 million Government bonds, SEK 1,717 million Corporate bonds, SEK 747 million Properties, SEK 47 million Cash and Other1), SEK 330 million

Market value of plan assets by category 2019

1) Cash and Other refers mainly to the assets in the two Swiss pension schemes where insurance contracts exists. The assets in these plans are managed by an external party and the return that these assets generates are used to pay the employees' benefits.

Risks

Through its defined benefit pension plans the Group is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility	The majority of the scheme liabilities are calculated using a discount rate set with reference to investment grade bond yield curves. If return on scheme assets underperform the discount rate this will create a deficit. Equity instruments are expected to outperform liability matching bonds. Returns on equities are expected to be volatile relative to liability matching bonds thus introducing volatility and risk into the funding position.
Changes in yields	A decrease in the discount rate will increase the scheme liabilities, although this will for funded plans, be partially offset by an increase in the value of the scheme's bond holdings.
Inflation risk	The majority of the pension obligations are linked to inflation, and higher inflation in insolation will lead to higher liabilities although, in most cases, caps on the level of inflationary increases are in place to protect the scheme against inflation. A majority of the assets are equity based where valuations have little predictable sensitivity to inflation meaning that an increase in inflation will be expected to increase the deficit.
Life expectancy	The obligations in some countries provide benefits for the life of the Member and/or their dependents, so increases in life expectancy will result in an increase in the scheme liabilities. In some countries, the benefit provided at retirement is a lump sum payment and therefore increases in life expectancy do not impact liabilities in these countries.
Legislative risk	Governments may consult on certain aspects on benefits. If changes are implemented by the Governments, the Company will reflect its impact on the accounting liabilities at the appropriate time.

NOTE 24 Provisions for claims reserves and other provisions

ACCOUNTING PRINCIPLES

Provisions are reported when the Group has a present legal or constructive obligation as a result of past events, it is likely that an outflow of resources will be required to settle the obligation, and when a reliable estimation of this amount can be made.

Provisions regarding restructuring are made when a detailed, formal plan of measures exists and valid expectations have been raised among those who will be affected. No provisions are made for future operating losses.

Provisions for claims are calculated on the basis of a combination of claims reported, and IBNR (incurred but not reported) reserves. Actuarial calculations are performed on a continuous basis to assess the adequacy of the provisions. The calculations are based on open claims and estimates based on experience and historical IBNR data. There is a certain degree of uncertainty regarding dates of future payments and, in light of this, it is not possible to give any detailed information regarding the timeline for outflows from other provisions for claims reserves.

> For further information refer to Note 2 Critical accounting estimates and assessments.

	Total provisions
	for claims	Total other
SEK m	reserves	provisions	Total
Opening balance Jan 1, 2019	365	111	476
New provisions	464	42	506
Reclassifications	–	51	51
Utilized amount	–231	–28	–257
Provisions not used	–5	–3	–8
Translation difference	13	4	17
Closing balance Dec 31, 2019	606	178	784

Opening balance Jan 1, 2020	606	178	784
New provisions	332	1681)	500
Reclassifications	–	–	–
Utilized amount	–296	–35	–331
Provisions not used	–1	–5	–6
Translation difference	–66	–15	–80
Closing balance Dec 31, 2020	575	292	867

1) Including restructuring provision of 100 SEK m.

Other provisions refer primarily to provisions related to disputes. Disputes are often lengthy processes which extend over several years. It is, therefore, not possible to give any detailed information regarding the timeline for outflows from other provisions.

	Accrued expenses and prepaid
NOTE 25	income

	Group		Parent company
	Dec 31,	Dec 31,	Dec 31,	Dec 31,
SEK m	2020	2019	2020	2019
Accrued personnel costs	1,124	1,163	20	43
Accrued interest expenses	6	9	2	0
Accrued rent expenses	46	26	6	5
Other accrued expenses	338	297	18	10
Total accrued expenses
and prepaid income	1,514	1,495	45	58

Other accrued expenses, as per the above, refer to, amongst other things, accrued insurance expenses, accrued suppliers' invoices and accrued lease expenses.

NOTE 26 Other current liabilities

SEK m		Dec 31, 2020 Dec 31, 2019
Current liabilities attributable to VAT	230	237
Current contract liabilities	168	188
Other current liabilities	172	165
Total other current liabilities	570	590

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NOTE 27 Contingent liabilities

		Group	Parent company
SEK m	Dec 31, 2020	Dec 31, 2019	Dec 31, 2020	Dec 31, 2019
Securities and guarantees	2,191	2,014	4,547	4,401
Other contingent liabilities	0	0	38	44
Total contingent liabilities	2,191	2,014	4,585	4,444

Group

Contingent liabilities mainly relate to fulfillment of guarantees for customer contracts.

Parent company

Contingent liabilities mainly relate to payment and adequacy guarantees for subsidiaries. It is difficult to assess whether these contingent liabilities will result in any financial outflow. Loomis AB has a policy to support subsidiaries, if circumstances require such support. In addition to the guarantee commitments reported in the table above, Letters of Comfort have been issued on behalf of subsidiaries within the Group.

The impact on the Group's financial position of ongoing disputes and the valuation of contingent liabilities

Over the years, the Group has made a number of acquisitions in different countries. As a result of such acquisitions, certain contingent liabilities of the acquired businesses have been assumed.

Companies within the Group are also involved in a number of other legal proceedings and tax audits arising from ordinary operating activities.

The Spanish tax authorities denied deductions for certain costs (amounting to EUR 24 million) relating to intra-group transactions in the years 2007– 2009. The procedure for invoking application of the double taxation agreement was initiated during 2016. Due to the applicable double taxation agreement the future outcome is not expected to have any significant effect on the Group's tax expense. The Spanish tax authorities has during 2019 denied deductions for certain costs (amounting to EUR 20 million excluding interest and surcharges) relating to intra-group transactions for the years 2013 – 2016. Loomis has initiated a new mutual agreement procedure.

Similar to several other companies in Spain, Loomis's Spanish subsidiary has been under investigation by the Spanish competition

authority (CNMC). In November 2016 the authority informed Loomis Spain of its decision. The decision is to impose a fine of EUR 7 million on Loomis Spain for alleged market sharing. Loomis maintains that it has acted in compliance with the laws in effect and, accordingly, disagrees with the content of the decision and the fine imposed. Loomis has appealed the decision in the Spanish courts. Therefore, no provision has been recognized in the balance sheet regarding this dispute. A possible negative outcome is not expected to have a negative impact on either the Group's income or financial position.

Loomis's Danish subsidiary was informed at the beginning of July 2018 that a competitor had filed a lawsuit with a Danish court. The amount in the lawsuit is DKK 125 million and the suit relates mainly to alleged misuse of a dominant position in the Danish market. In January 2020 the lawsuit was extended with additional DKK 102 million, hence the total claim is now DKK 227 million. Loomis is of the opinion that it has acted in compliance with the laws in effect and has contested the lawsuit. Therefore, no provision has been recognized in the balance sheet regarding this dispute.

Effect of the Brexit referendum in the UK

Loomis operations in the UK primarily involve local customers and local currency is used. At this time it has therefore been determined that the UK's exit from the EU will not have any material impact on Loomis's local operations. The Group's consolidated financial statements will, however, be affected by the GBP's development in relation to the Swedish krona.

NOTE 28 Items not affecting cash flow

	Group		Parent company
SEK m	2020	2019	2020	2019
Depreciation of tangible fixed assets and amortization of intangible assets	1,871	1,834	7	–4
Amortization of acquisition-related intangible assets	109	101	–	–
Items affecting comparability	161	–34	–	–
Acquisition-related costs and revenue	22	26	–	–
Financial income	–24	–35	–	–704
Financial expense	231	248	–	800
Result from participations in Group companies	–	–	214	682
Total items not affecting cash flow, items affecting comparability and acquisition-related costs and revenue	2,369	2,138	221	774

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NOTE 29 Appropriation of profit

The Board has decided to propose to the Annual General Meeting a dividend of SEK 451 million and to propose May 10, 2021 as the record day for the dividend.

It is the Board's assessment that the proposed dividend will allow the Group to fulfill its obligations and make necessary investments.

The Parent Company's and the Group's statements of income and balance sheets are subject to adoption by the AGM on May 6, 2021.

At the disposal of the Annual General Meeting, before the proposed dividend, is SEK 4,770,899,347.

The Board proposes that the profits be appropriated as follows:

Summa	4,770,899,347
To be carried forward	4,319,543,155
Dividend to shareholders (6.00 SEK/share)	451,356,1921)

1) Calculated based on 75,279,829 outstanding shares at the balance sheet date.

> For the full proposed appropriation of profits, see the Administration Report.

> For information about the largest shareholders, refer to The Share on page 33.

ACCOUNTING PRINCIPLES

Related parties are considered to include members of the Parent Company's Board of Directors, Group Management and family members of these individuals. Related parties are also companies in which a significant portion of the votes are directly or indirectly controlled by these individuals, or companies in which these individuals can exercise a significant influence.

Transactions with related parties refer to license fees and other revenue from subsidiaries, dividends from subsidiaries, interest income and interest expenses to and from subsidiaries, as well as receivables and payables to and from subsidiaries. In accordance with IFRS, transactions with pension funds that have links to the Group are also to be regarded as related party transactions. There are pension funds for Loomis's defined benefit pension plans.

> For more information on Loomis's defined benefit pension plans, re fer to Note 23 Provisions for pensions and similar commitments.

Board member Lars Blecko provides consulting services to Loomis Armored US LLC pursuant to an existing agreement between Loomis Armored US LLC and a company owned by him. Board member Johan Lundberg has also been asked to provide consulting services as from January 1, 2020. For more information see Note 7 Employees and renumerations.

The Parent company's transactions with other companies within the Loomis Group are listed in the tables below:

Income from other companies within the Loomis Group

SEK m	2020	2019
License fees	444	631
Interest income	62	64
Group contributions	–	0
Dividend	321	568

Expenses to other companies within the Loomis Group

SEK m	2020	2019
Interest expenses	18	35
Group contributions	103	–

Receivables from other companies within the Loomis Group

	Dec 31,	Dec 31,
SEK m	2020	2019
Interest-bearing long-term receivables from
subsidiaries	3,167	2,996
Current receivables from subsidiaries	15	36
Interest-bearing current receivables from
subsidiaries	782	1,203

Liabilities to other companies within the Loomis Group

	Dec 31,	Dec 31,
SEK m	2020	2019
Current liabilities to subsidiaries	181	59
Interest-bearing current liabilities to subsidiaries	2,736	2,213

NOTE 31 Events after the balance sheet date

No significant events have occurred after the balance sheet date.

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The Parent Company's and the Group's statements of income and balance sheets are subject to adoption at the Annual General Meeting on May 6, 2021.

The Board of Directors and the President certify that the consolidated financial statements have been prepared in accordance with International Financial Reporting

Standards (IFRS) as adopted by the EU, and provide a true and fair view of the financial position and performance of the Group. The annual report has been prepared in accordance with generally accepted accounting principles, and provides a true and fair view of the financial position and performance of the Parent Company.

ment of the activities, financial position, and performance of the Group and Parent Company, and describes the significant risks and uncertainties faced by the Parent Company and companies which form part of the Group.

The administration report for the Group and Parent Company provides a true and fair view of the develop-

Stockholm, March 25, 2021

Alf Göransson Chairman

Jan Svensson Board member

Cecilia Daun Wennborg Board member

Jeanette Almberg Board member

Johan Lundberg Board member

Lars Blecko Board member

Patrik Andersson President and CEO

Our audit report was submitted on March 25, 2021 Deloitte AB

Sofie Nordén Board member, employee representative

Peter Ekberg Authorized Public Accountant

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Auditor's report To the general meeting of the shareholders of Loomis AB (publ.) corporate identity number 556620-8095

Report on the annual accounts and consolidated accounts

Opinions

We have audited the annual accounts and consolidated accounts of Loomis AB (publ) for the financial year 2020-01-01 - 2020-12-31. The annual accounts and consolidated accounts of the company are included on pages 83-130 in this document.

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2020 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2020 and their financial performance and cash flow for the year then ended in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group.

Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company's audit committee in accordance with the Audit Regulation (537/2014) Article 11.

Basis for Opinions

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Key Audit Matters

Key audit matters of the audit are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters.

Processes and controls related to Cash Management and valuation of cash stock. Description of risk

Loomis Group offer cash management services and cross-border transportation of cash and precious metals and storage of valuables. The services are primarily aimed at central banks, commercial banks, retail stores, other commercial businesses and the public sector. The operations involve taking over the customer's risks associated with managing, transporting and storing cash, precious metals and valuables. In the nature of the

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business as such there are risks of loss of cash and valuables due to crime or failures in procedures. If a difference between deposited amounts and physically counted cash stock is noted, Loomis may need to reimburse the difference regardless of the stock being owned by Loomis or by the customer. The management of cash and valuables are associated with extensive risks for both personnel and property which is why satisfactory operational risk management is of high importance for the Group. Processes and controls for cash management and cash stock valuation are of high importance, differences in cash stock may lead to significant costs for the Group.

Risk management is further described on page 43-48. The cash management business is described on page 83 in the Administration Report. A specification of cash stock is presented in note 19.

Our audit included, but was not limited to:

visits to a selection of cash processing centers including participation in inventory counts for cash stock;
discussions with the Group's operational risk management function regarding compliance with policies and procedures, observations and action plans;
on a sample basis, walkthroughs of processes with internal auditors, so called cash auditors, at cash processing centers, including follow up on differences;
review of compliance with Group procedures for rec-

onciliation of cash stock and follow up on differences identified;

reconciliation of cash stock owned by Loomis against external confirmations and follow-up of central reporting of inventories of cash and identified differences as of the balance sheet date;
review of compliance with and disclosures in accordance with IFRS.

Valuation of intangible assets

Description of risk

The Group reports significant intangible assets. As part of the impairment test of goodwill and other acquisition related intangible assets the Group normally assess the recoverable amount based on a calculated value in use as it normally does not exist any applicable market prices to assess the net present value of the assets. The Group base the calculation of the value in use on estimates and assessments of organic growth, gross margin development, utilization of operating capital employed and the weighted average cost of capital which is used to discount future cash flows. Changes in these assumptions have a significant impact of the Groups future cash flows, and thus the estimated value in use for goodwill and other acquisition related intangible assets.

Critical estimates and assessments as well as the Group's principles for impairment tests are described in note 2. Disclosures regarding performed impairment

tests are presented in note 13.

Our audit included, but was not limited to:

review of the Group's principles and processes for impairment tests;
review of the reasonableness of the cash generating units identified by management
review of the model used for calculation of future cash flows for arithmetic accuracy as well as tested managements critical estimates and assessments regarding future organic growth, gross margin development, weighted cost of capital and the sensitivity of changes in these assumptions;
evaluation of management's assessment of the effect from Covid-19 on future cashflows;
review of historical forecasts towards actual outcomes;
review of compliance with and disclosures in accordance with IFRS.

Other Information than the annual accounts and consolidated accounts

This document also contains other information than the annual accounts and consolidated accounts. The other information comprises the remuneration report as well as pages 1-34 and 135-140. The Board of Directors and the Managing Director are responsible for this other information.

Our opinion on the annual accounts and consolidated

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accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.

In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.

If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and consolidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consolidated accounts, in accordance with IFRS as adopted by the EU. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and

consolidated accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts and consolidated accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company's and the group's ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intends to liquidate the company, to cease operations, or has no realistic alternative but to do so.

The Audit Committee shall, without prejudice to the Board of Director's responsibilities and tasks in general, among other things oversee the company's financial reporting process.

Auditor's responsibility

Our objectives are to obtain reasonable assurance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can

arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts.

A further description of our responsibilities for the audit of the annual accounts and consolidated accounts is located at the Swedish Inspectorate of Auditors website: www.revisorsinspektionen.se/revisornsansvar. This description forms part of the auditor´s report.

From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the annual accounts and consolidated accounts, including the most important assessed risks for material misstatement, and are therefore the key audit matters. We describe these matters in the auditor's report unless law or regulation precludes disclosure about the matter.

Report on other legal and regulatory requirements Opinions

In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors and the Managing Director of Loomis AB (publ) for the financial year 2020-01-01 - 2020-12-31 and the proposed appropriations of the company's profit or loss.

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We recommend to the general meeting of shareholders that the profit to be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Basis for Opinions

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor's Responsibilities section. We are independent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company's and the group's type of operations, size and risks place on the size of the parent company's and the group's equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible for the company's organization and the administration of the company's affairs. This includes among other things continuous assessment of the company's and the group's financial situation and ensuring that the company's organization is designed so that the accounting, management of assets and the company's financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors' guidelines and instructions and among other matters take measures that are necessary to fulfill the company's accounting in accordance with law and handle the management of assets in a reassuring manner.

Auditor's responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:

has undertaken any action or been guilty of any omission which can give rise to liability to the company, or
in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropriations of the company's profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company's profit or loss are not in accordance with the Companies Act.

A further description of our responsibilities for the audit of the management's administration is located at the Swedish Inspectorate of Auditors website: www.revisorsinspektionen.se/revisornsansvar. This description forms part of the auditor´s report.

Deloitte AB, was appointed auditor of Loomis AB (publ) by the general meeting of the shareholders on the 2020-05-06 and has been the company's auditor since 2018-05-03.

Stockholm March 25, 2021 Deloitte AB

Peter Ekberg Athorized public accountant

Five-year overview

Revenue and income, summary

SEK m	2020	2019	2018	2017	2016
Revenue, continuing operations	18,454	20,411	18,300	16,824	16,485
Revenue, acquisitions	359	633	868	404	315
Total revenue	18,813	21,044	19,168	17,228	16,800
Real growth, %	–8	5	8	3	5
Organic growth, %	–9	2	3	2	5

Operating income (EBITA)	1,775	2,601	2,200	2,093	1,890
Operating margin (EBITA), %	9.4	12.4	11.5	12.1	11.2
Operating income (EBIT)	1,304	2,422	2,158	1,992	1,852
Operating margin (EBIT), %	6.9	11.5	11.3	11.6	11.0
Financial income	31	63	32	13	12
Financial expenses	–238	–275	–133	–122	–129
Income before taxes	1,096	2,210	2,057	1,882	1,735
Income tax	–380	–564	–519	–454	–477
Net income for the year	716	1,646	1,538	1,428	1,258

SEK m Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 20161) Goodwill 6,884 7,094 6,533 5,615 5,626 Tangible fixed assets 7,744 8,732 5,358 4,689 4,709 Interest-bearing fixed assets 665 565 500 96 80 Other fixed assets 1,601 1,503 1,189 910 829 Interest-bearing current assets 67 61 37 62 54 Liquid funds 4,802 5,073 6,140 3,230 2,224 Other current assets 3,134 3,536 3,173 2,867 1,346 TOTAL ASSETS 24,896 26,563 22,931 17,471 14,869 Shareholders' equity 8,773 9,592 8,422 7,037 6,647 Interest-bearing long-term liabilities 7,828 8,106 5,092 4,745 3,972 Other long-term liabilities 1,841 2,035 812 630 729 Interest-bearing current liabilities 745 589 1,058 75 754 Other current liabilities 5,709 6,241 7,547 4,983 2,767 TOTAL SHAREHOLDERS´ EQUITY AND LIABILITIES 24,896 26,563 22,931 17,471 14,869

Statement of cash flows, additional information

Equity ratio, %	35	36	37	46	45
Interest-bearing net debt, SEK m	6,619	7,332	4,305	3,823	3,929
Capital employed, SEK m	15,392	16,924	12,727	10,860	10,576

%	2020	2019	2018	2017	2016
Return on capital employed, %	12	15	17	19	18
Return on shareholders' equity, %	8	17	18	20	19

1) During 2019, Loomis changed reporting of inventory of cash in the cash processing operations. The comparative figures for 2016 are not adjusted.

Share Data

	2020	2019	2018	2017	2016
Number of outstanding shares, million1)	75.2	75.2	75.2	75.2	75.2
Earnings per share before and after dilution, SEK1)	9.52	21.88	20.45	18.99	16.73
Shareholders' equity per share, SEK	116.62	127.51	111.95	93.55	88.36

1) The number of outstanding shares, which constitutes the basis for calculation of earnings per share before dilution, is 75,226,032. The number of treasury shares amount to 53,797.

Alternative performance measures

Use of alternative performance measures

To support Group Management and other stakeholders in analyzing the Group's financial performance, Loomis reports certain performance measures that are not defined by IFRS. Group Management believes that this information facilitates analysis of the Group's performance. The Loomis Group primarily uses the following alternative performance measures (see also Definitions on page 139 for a full list of measures):

• Real growth and organic growth in sales

• Operating income (EBITA) and operating margin (EBITA), %

• Cash flow from operating activities as % of operating income (EBITA)

• Net debt and net debt/EBITDA

Capital employed and return on capital employed
Return on shareholders' equity

Real growth and organic growth in sales

Since Loomis generates most of its revenue in currencies other than the reporting currency (i.e. Swedish kronor, SEK) and exchange rates have historically proved to be relatively volatile, and since the Group has made a number of acquisitions, sales growth is presented both as exchange rate adjusted and adjusted for both exchange rate fluctuations and effects from acquisitions. This makes it possible to analyze and explain growth excluding exchange rate effects and acquisitions.

	2020	2019		Growth Growth,%
Recognized revenue	18,813	21,044	–2,231	–10.6%
Organic growth			–1,968	–9.4%
Revenue, acquisitions			326	1.6%
Real growth			–1,642	–7.8%
Exchange rate effects			–589	–2.8%

Operating income (EBITA) and operating margin (EBITA), %

Loomis's internal control of operating activities is focused on the operating income that is created within and can be impacted by local operating activities. For this reason Loomis has chosen to focus on earnings and margins before interest, taxes, amortization of acquisition-related intangible fixed assets, acquisition-related costs and revenue, and items affecting comparability.

	2020	2019
Operating income (EBITA)	1,304	2,422
Adding back items affecting comparability	200	-23
Adding back acquisition-related costs and revenue	163	101
Adding back amortization of acquisition-related intangible
assets	109	101
Operating income (EBITA)	1,775	2,601
Calculation of operating margin (EBITA), %
EBITA	1,775	2,601
Total revenue	18,813	21,044
EBITA/Total revenue, %	9.4	12.4

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Cash flow from operating activities as % of operating income (EBITA)

Loomis's main measure of cash flow (cash flow from operating activities) focuses on the current cash flow from operating activities based on EBITA adding back amortization/depreciation and the effect of changes in accounts receivable, as well as changes in other working capital and other items. Cash flow from operating activities reflects the cash flow that the operating activities generate before payments of financial items, income tax, items affecting comparability, acquisitions and divestments, as well as dividends and changes in the Group's net debt. Cash flow from operating activities as a percentage of operating income (EBITA) illustrates the cash conversion that Loomis has, i.e. how recognized earnings have resulted in cash flow.

Statement of cash flows, additional information

SEK m	2020	2019	2018	2017	2016
Operating income (EBITA)	1,718	2,548	2,200	2,093	1,890
Depreciation	1,266	1,265	1,183	1,124	1,105
Change in accounts receivable	268	–150	–6	–165	–53
Change in other operating capital employed and other items	–48	37	85	–145	192
Cash flow from operating activities before investments	3,204	3,700	3,462	2,908	3,134
Investments in fixed assets, net	–986	–1,643	–1,449	–1,152	–1,120
Cash flow from operating activities	2,218	2,057	2,013	1,756	2,013
Cash flow from operating activities as % of operating income (EBITA)	129	81	91	84	107
Financial items paid and received	–109	–106	–101	–111	–117
Income tax paid	–483	–641	–472	–403	–326
Free cash flow	1,626	1,310	1,439	1,242	1,570
Cash flow effect of items affecting comparability	–39	–12	–1	–1	138
Divestment of operations	–	38	–	–	–
Acquisition of operations	–853	–384	–1,403	–467	–201
Acquisition-related costs and revenue, paid and received	–141	–75	–52	–80	–17
Dividend paid	–414	–750	–677	–602	–527
Change in interest-bearing net debt excluding liquid funds	141	155	–296	–117	–168
Issuance of bonds	–	2,795	–	–	–
Amortization of bonds	–	–1,000	–	–	–
Change in commercial papers issued and other long-term borrowing	213	–1,753	1,447	231	–816
Cash flow for the year	533	325	456	207	–20

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Net debt and net debt/EBITDA

Net debt is an important concept to understand a company's financing structure and leverage. Net debt is the net of interest-bearing liabilities and assets, and is used together with shareholders' equity to finance the Group's capital employed. Loomis excludes funds in cash processing operations and financing of funds in cash processing operations (so-called stock funding) from the definition of net debt. The financial leverage is measured by calculating net debt as a percentage of operating income after adding back amortization and depreciation, i.e. net debt/EBITDA.

Reconciliation of net debt and calculation of net debt/EBITDA

	Dec 31,	Dec 31,
SEK m	2020	2019
Short-term loans	199	29
Long-term loans	5,723	5,793
Total loans payable	5,922	5,822
Liquid funds excluding funds in cash processing operations	2,056	1,655
Other interest-bearing assets	428	274
Financial net debt	3,438	3,893
Lease liabilities	2,651	2,873
Pension liabilities, net	530	566
Net debt	6,619	7,332

Net debt/EBITDA (number of times)	1.8	1.7
EBITDA	3,645	4,435
Adding back depreciation/ amortization	1,871	1,834
Operating income (EBITA)	1,775	2,601
SEK m	2020	2019

Capital employed and return on capital employed, %

Capital employed is a measure of how much capital is tied up in operating activities and that is therefore expected to generate returns in the form of operating income. Capital employed is equivalent to the sum of all financing in the form of net debt and shareholders' equity. Loomis includes funds in cash processing operations and financing of funds in cash processing operations (so-called stock funding) in the definition of capital employed.

Reconciliation of capital employed and return on capital employed, %

	Dec 31,	Dec 31,
SEK m	2020	2019
Fixed assets
Goodwill	6,884	7,094
Acquisition-related intangible assets	486	478
Other intangible assets	269	208
Buildings and land	942	946
Machinery and equipment	4,158	4,876
Right-of-use assets	2,645	2,911
Other operating fixed assets1)	846	817
Current assets
Accounts receivable	2,199	2,619
Other operating current assets2)	934	917
Funds in cash processing operations	2,746	3,418
Long-term liabilities
Deferred tax liability	–402	-447
Provisions for claims reserves	–389	-413
Other provisions	–106	-102
Other long-term liabilities	–110	-154
Current liabilities
Accounts payable	–600	-668
Liabilities in cash processing operations	–2,468	-3,021
Accrued expenses and prepaid income	–1,514	-1,495
Other operating current liabilities3)	–1,127	-1,058
Capital employed	15,392	16,926

Operating income (EBITA)	1,775	2,601
Return on capital employed, %	11.5	15.4

1) Includes the items "Contract assets", "Deferred tax assets" and "Other long-term receivables".

2) Includes the items "Other current receivables", "Current tax assets", and "Prepaid expenses and accrued income".

3) Includes the items "Provisions for tax reserves", "Current tax liabilities, "Other provisions" and "Other current liabilities".

Return on shareholders' equity

Return on shareholders' equity is a key measure to understand a company's return on the capital that the shareholders have injected and earned. The return is calculated based on the result for the period as a percentage of the closing balance of the shareholders' equity.

Return on equity, %	8.2	17.2
Shareholders' equity	8,773	9,592
Net income for the period	716	1,646
SEK m	2020	2019

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Definitions

Gross margin, %	Gross income as a percentage of total revenue.
Operating income (EBITA)	Earnings Before Interest, Taxes, Amortization of acquisition-related intangible fixed assets, Acquisition-related costs and revenue and Items affecting comparability.
Operating margin (EBITA), %	Earnings Before Interest, Taxes, Amortization of acquisition-related intangible fixed assets, Acquisition-related costs and revenue and Items affecting comparability, as a percentage of revenue.
Operating income (EBITDA)	Earnings Before Interest, Taxes, Depreciation, Amortization of acquisition-related intangible fixed assets, Acquisition-related costs and revenue and Items affecting comparability.
Operating income (EBIT)	Earnings Before Interest and Tax.
Items affecting comparability	Items affecting comparability are reported events and transactions whose impact are important to note when the period's results are compared with previous periods, such as capital gains and capital losses from divestments of significant cash generating units, material write-downs or other significant items affecting comparability.
Real growth, %	Increase in revenue for the period, adjusted for changes in exchange rates, as a percentage of the previous year's revenue.
Organic growth, %	Increase in revenue for the period, adjusted for acquisition/divestitures and changes in exchange rates, as a percentage of the previous year's revenue adjusted for divestitures.
Total growth, %	Increase in revenue for the period as a percentage of the previous year's revenue.
Net margin, %	Net income for the period after tax as a percentage of total revenue.
Earnings per share before dilution	Net income for the period in relation to the average number of outstanding shares during the period.
	Earnings per share after dilution Net income for the period in relation to the average number of outstanding shares after dilution during the period.
Cash flow from operations per share	Cash flow for the period from operations in relation to the number of shares after dilution.

Investments in relation to depreciation	Investments in fixed assets, net, for the period, in relation to depreciation, excluding the IFRS 16 impact.
Investments as a % of total revenue	Investments in fixed assets, net, for the period, as a percentage of total revenue.
Shareholders' equity per share	Shareholders' equity in relation to the number of shares before and after dilution.
Cash flow from operating activities as % of operating income (EBITA)	Operating income, EBITA, (excluding IFRS 16), adjusted for depreciation (excluding IFRS 16), change in accounts receivable and other items (excluding IFRS 16) as well as net investments in fixed assets as a percentage of operating income, EBITA, (excluding IFRS 16).
Return on shareholders' equity, %	Net income for the period as a percentage of the closing balance of shareholders' equity.
Return on capital employed, %	Operating income (EBITA) as a percentage of the closing balance of capital employed.
Equity ratio, %	Shareholders' equity as a percentage of total assets.
Capital employed	Shareholders' equity with the addition of net debt.
Net debt	Interest-bearing liabilities less interest-bearing assets and liquid funds excluding funds for cash processing activities.
n/a	Not applicable.
Other	Amounts in tables and other combined amounts have been rounded off on an individual basis. Minor differences due to this rounding-off, may, therefore, appear in the totals.

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Annual General Meeting 2021

The Loomis Annual General Meeting will be held on May 6, 2021.

Due to the ongoing coronavirus pandemic, the AGM will be held through advance voting (voting by mail) according to temporary statutory provisions. Accordingly, the AGM will be held without the physical presence of shareholders, proxies or outsiders and the shareholders can only exercise their voting right by voting in advance in the manner described in more detail in the notice of the meeting. Information on the resolutions passed at the AGM will be published on May 6, 2021 when the final tally of mail-in votes is completed.

The notice of the Annual General Meeting will be published four weeks prior to the Annual General Meeting at the latest.

Reporting dates

Loomis will publish the following financial reports for 2021:

Interim Report Jan – Mar:	May 6, 2021
Interim Report Jan – Jun:	July 23, 2021
Interim Report Jan – Sep:	Nov 3, 2021

Dec 31, 2020 SEK m		Level 1 Level 2 Level 3		Total
Financial assets
– Derivative instruments held for trading	–	41	–	41
– Derivative instruments used for hedging	–	26	–	26
Total assets	–	67	–	67

Dec 31, 2019
SEK m		Level 1 Level 2 Level 3		Total
Financial assets
– Derivative instruments held for trading	–	39	–	39
– Derivative instruments used for hedging	–	–	–	–
Total liabilities	–	61	–	61

Dec 31, 2019
SEK m		Level 1 Level 2 Level 3		Total
Financial liabilities
– Derivative instruments held for trading	–	7	–	7
– Derivative instruments used for hedging	–	–	–	–
Total liabilities	–	7	–	7

AI assistant

Loomis — Annual Report 2020

2940_10-k_2021-04-01_6ca5c250-dd7a-418b-a940-2e32ec3b0358.pdf

Loomis

Loomis improves flows of payments in society

Contents

Introduction About Loomis 4

Strategy

Operations

Financial statements

2021 dates

About this report

The year in figures

Hundreds of thousands customer visits each week

Sustained strong outsourcing trend

Acquisitions to strengthen Loomis's geographic and technology footprint

Increased digitalization

Loomis Pay handles all payments for retailers

Loomis is well-positioned for new advances

Our customers are always in focus and we make hundreds of thousands of customer visits every week.

The pandemic is affecting Loomis's financial targets

Resilience tested in an exceptional market

All branches operational during the pandemic

Stable profits in an exceptionally challenging market

Advancing up the customer value chain

Well-positioned in a transitioning market

Patrik Andersson

Trends and drivers

1. More and more actors choosing to outsource cash management

5. Increased diversification requires new standards and rules

6. Future actors need new expertise and broader recruitment

Progress despite a challenging market

The strategy is based on five pillars

1 Accelerate the core business

2 Launch adjacent new services

3 Move Loomis up in the value chain

4 Strengthen Loomis's geographic and technology footprint

Read more about:

Loomis Pay and the acquisition of Automatia strengthen the Company's position

Loomis Pay breaks new ground

Loomis Pay ambition: SEK 3 billion in five years

A new ATM offering

ATM ambition: SEK 2 billion in five years

Financial targets

Revenue target

Operating margin target

Dividend target

>For more key ratios, refer to Loomis's Administration Report starting on page 83.

Sustainability targets

Zero workplace injuries in 2021

Carbon emissions target

30% reduction in carbon emissions by 2021

Plastic consumption target

30% reduction in plastic consumption by 2021 0

Operations

The Loomis Model – a business model that delivers results

The Loomis Model components

Three core values

Code of Conduct

Sustainability

Six strategic business processes

Guiding principles

Customer focus

A comprehensive offering in payment solutions

Cash in Transit (CIT)

Summary of 2020

Cash Management Services (CMS)

Summary of 2020

SafePoint

Summary of 2020

ATMs

Summary of 2020

International valuables logistics (Valuables in Transit, VIT, Valuables in Storage, VIS)

Summary of 2020

Physical foreign currency (FX)

Summary of 2020

Loomis Pay

Summary of 2020

Copenhagen Downtown Hostel

Loomis Pay's many benefits

Loomis Annual Report 2020

>For further information on audit fees and other remu neration, refer to Note 6.