Securitas AB Interim Report January–March 2022
- Total sales MSEK 28 598 (25 814)
- Organic sales growth 4 percent (0)
- Operating income before amortization MSEK 1 452 (1 256)
- Operating margin 5.1 percent (4.9)
- Items affecting comparability (IAC) MSEK –134 (–136), mainly relating to the previously announced transformation programs
- Earnings per share SEK 2.30 (1.86)
- Earnings per share, before IAC, SEK 2.57 (2.11)
- Net debt/EBITDA 2.0 (2.1)
- Cash flow from operating activities –9 percent (102)
Comments from the President and CEO
“A robust start to the year with continued margin improvement”
We continue to execute on our strategy to be the leading security solutions partner to our clients with world-leading technology and expertise, and this is generating results. We recorded the highest first quarter operating margin in more than a decade, with record levels in North America and Ibero-America.
We started the year with 4 percent organic sales growth in the first quarter, with strong organic sales growth in Europe and Ibero-America. As expected, organic sales growth in North America came in negative due to the previously communicated contract terminations and lower levels of corona-related extra sales. The overall conditions in the business environment further normalized in the first quarter compared to the same period last year.
Increased market activity and client interactions generated good momentum in the business including 9 percent sales growth of security solutions and electronic security in the Group, now representing 23 percent (22) of Group sales.
The price and wage balance was successfully kept on par and we are well positioned to maintain this balance. The operating result for the Group, adjusted for changes in exchange rates, increased by 8 percent (30) in the first quarter and the operating margin improved to 5.1 percent (4.9). Strong performance in North America and Ibero-America together with improving sales of security solutions and electronic security across all segments contributed to the positive margin development, as did our continued high focus on profitability through active portfolio management, our transformation programs and general cost control. This enabled us to offset the challenges in the quarter with labor shortages in several markets and increased sickness costs in Europe. Adjusted for this impact, the underlying margin development in Europe was well ahead of last year.
It is with deep regret that we have witnessed the development in Ukraine and my thoughts are with everyone affected. We do not have any business in either Russia or Ukraine but we have organized company-wide activities to provide individual and company contributions to e.g. the Red Cross and UNHCR. I would like to emphasize the outstanding support provided by many Securitas colleagues and their families in neighboring countries to help a large number of refugees from Ukraine.
CREATING THE NEW SECURITAS
We are realizing value in the transformation program in North America which is evidenced in the operating margin development. We are now executing on the remaining business transformation programs in Europe and Ibero-America and we expect to realize strong financial and operational benefits in the years to come. These transformation programs will provide us with a significantly stronger foundation to enhance client value and drive operating margin improvement.
We have the ambition to close the acquisition of Stanley Security towards the end of the second quarter 2022. This acquisition is transformational for Securitas as well as the security industry. The integration and value creation planning is ongoing and on track.
When Stanley is integrated and the transformation programs are fully implemented, we will have built a new Securitas – a modern, digitized and innovative security solutions partner for our clients with a structurally higher margin profile.
Magnus Ahlqvist
President and CEO
FINANCIAL INFORMATION CALENDAR
May 5, 2022, 1 p.m. (CET)
Annual General Meeting 2022 in Stockholm
July 28, 2022, app. 1.00 p.m. (CET)
Interim Report January–June 2022
November 8, 2022, app. 1.00 p.m. (CET)
Interim Report January–September 2022
For further information regarding Securitas IR activities, refer to
www.securitas.com/investors/financial-calendar
PRESENTATION OF THE INTERIM REPORT
Analysts and media are invited to participate in a telephone conference on May 4, 2022, at 2:30 p.m. (CET) where President and CEO Magnus Ahlqvist and CFO Andreas Lindback will present the report and answer questions. The telephone conference will also be audio cast live via Securitas’ website. To participate in the telephone conference, please dial in five minutes prior to the start of the conference call:
US: + 1 631 913 1422
Sweden: + 46 8 566 426 51
UK: + 44 333 3000 804
Please use the following pin code for the telephone conference: 621 490 78#
To follow the audio cast of the telephone conference via the web, please follow the link www.securitas.com/investors/webcasts.
A recorded version of the audio cast will be available at
www.securitas.com/investors/webcasts after the telephone conference.
For further information, please contact:
Micaela Sjökvist, Vice President, Investor Relations + 46 76 116 7443
ABOUT SECURITAS
Securitas has a leading global and local market presence with operations in 47 markets. Our operations are organized in three business segments: Security Services North America, Security Services Europe and Security Services Ibero-America. We also have operations in Africa, the Middle East, Asia and Australia, which form the AMEA division. Securitas serves a wide range of clients of all sizes in a variety of industries and segments. Security solutions based on client-specific needs are built through different combinations of on-site, mobile and remote guarding, electronic security, fire and safety, and corporate risk management. We adapt our secu-rity solutions based on the risks and needs of each client through increased client engagement and conti-nuously enhanced knowledge. Securitas is listed in the Large Cap segment at Nasdaq Stockholm.
Group strategy
At Securitas, we are leading the transformation of the security industry by putting our clients at the heart of our business. We solve our clients’ security needs by offering qualified and engaged people, in-depth expertise and innovation within each of our protective services, the ability to combine services into solutions and by using data to add further intelligence. To execute on our strategy to become the intelligent protective services partner, we are focusing on four areas: empowering our people, client engagement, protective services lea-dership and innovation, and efficiency.
Group financial targets
Securitas has three financial targets:
- An annual average increase in earnings per share of 10 percent
- Net debt to EBITDA ratio of on average 2.5
- An operating cash flow of 70 to 80 percent of operating income before amortization
Securitas has also set a strategic transformation ambition – to double our security solutions and electronic security sales by 2023, compared with 2018.
Securitas AB (publ.)
P. O. Box 12307, SE-102 28 Stockholm, Sweden
Visiting address:
Lindhagensplan 70
Telephone: + 46 10 470 30 00
Corporate registration number: 556302–7241
www.securitas.com
This is information that Securitas AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 1.00 p.m. (CET) on Wednesday, May 4, 2022.