Securitas AB Interim Report Q2 2023 | January–June 2023
April-June 2023
- Total sales MSEK 39 909 (30 535)
- Organic sales growth 11 percent (6)
- Operating income before amortization MSEK 2 620 (1 760)
- Operating margin 6.6 percent (5.8)
- Items affecting comparability (IAC) MSEK –311 (–226), relating to the previously announced transformation programs and the acquisition of STANLEY Security
- Earnings per share before and after dilution SEK 2.05 (2.32)*
- Earnings per share before and after dilution, before IAC, SEK 2.46 (2.77)*
- Cash flow from operating activities 46 percent (53)
January-June 2023
- Total sales MSEK 77 660 (59 133)
- Organic sales growth 11 percent (5)
- Operating income before amortization MSEK 4 800 (3 212)
- Operating margin 6.2 percent (5.4)
- Items affecting comparability (IAC) MSEK –592 (–360), relating to the previously announced transformation programs and the acquisition of STANLEY Security
- Earnings per share before and after dilution SEK 3.71 (4.24)*
- Earnings per share before and after dilution, before IAC, SEK 4.49 (4.91)*
- Reported net debt/EBITDA 3.7 (2.2), adjusted net debt/EBITDA 3.7**
- Cash flow from operating activities 29 percent (25)
* Number of shares outstanding has been adjusted for the rights issue completed on October 11, 2022.
For further information refer to Data per share on page 21.
** Includes STANLEY Security’s 12 months adjusted estimated EBITDA.
Comments from the President and CEO
“Strong margin development in North America and Europe”
In a period of global macroeconomic uncertainty, we delivered yet another strong quarter with 11 percent (6) organic sales growth and an operating margin of 6.6 percent (5.8). We recorded 12 percent real sales growth in our technology and solutions business, excluding STANLEY Security, demonstrating that we are on the right track. Overall, organic sales growth in the Group continued to be driven primarily by price increases, although volume growth was good within technology and solutions and in the airport security business.
The operating margin improved to 6.6 percent (5.8), driven by North America and Europe with the contribution from the STANLEY Security acquisition and related cost benefits, together with strong growth and margin development in our technology and solutions business.
Our integration and value creation processes with STANLEY Security are progressing according to plan. We have realized substantial cost benefits in our Technology business primarily in North America, and expect further benefits over the coming quarters. We see significant client interest in our strengthened offering and have material commercial synergy opportunities in our sales pipeline.
Within our security services business we maintain sharp focus on quality and actively managing contracts with lower profitability. These efforts are progressing well throughout the Group, and especially in Europe the profitability improved as a result. In Europe, we saw strong margin development, also compared to the first quarter of 2023, as start-up costs in the airport security business were reduced and cost control improved. Furthermore, we were on par with price increases and wage costs in the Group in the first half year.
During the summer we were glad to announce that we have extended and expanded our global security services contract and partnership with a leading global technology company.
The Group’s operating cash flow was 46 percent (53) of the operating result in the second quarter. The first half year is normally weaker from a seasonality perspective, and we continue to have a high cash flow focus across the business to ensure a healthy full-year outcome.
TRANSFORMING IN LINE WITH OUR STRATEGY
Leadership in technology and solutions as well as in digital capabilities are core to the execution of our strategy. With STANLEY Security we are number two in the global security technology market and the combined solutions offering is truly unique. The transformation programs we have implemented in North America and are implementing in Europe and Ibero-America fundamentally shift our digital capabilities as a company, di-gitalizing our clients, people, operational and financial processes end-to-end.
A central part of the transformation program in Europe is the creation of a specialized solutions organization that is now in place, delivering solutions sales and profit growth. As communicated earlier, we have decided to delay parts of the program that relate to systems integration with the STANLEY integration to maximize cost efficiency and benefits. We expect to conclude these activities during 2024.
On July 25, we divested our entire operation in Argentina due to the weak macroeconomic prospects and challenging business environment in combination with a limited opportunity to execute our long-term strategy with healthy financial performance. As part of our strategy we continue to assess our business mix and presence to further sharpen our performance and position as the leading security solutions and technology company.
We are executing according to plan while at the same time going through a period of extensive transformation – with modernization and digitalization of our business, integration of STANLEY Security and further sharpening the business. We still have a lot of work ahead of us but with our new capabilities, we are very well positioned to deliver superior value as the new Securitas.
Magnus Ahlqvist
President and CEO
FINANCIAL INFORMATION CALENDAR
November 7, 2023, app. 1.00 p.m. (CET)
Interim Report
January–September 2023
February 7, 2024, 8 a.m. (CET)
Full-Year Report
January–December 2023
For further information regarding Securitas’ IR activities, refer to
www.securitas.com/en/investors/ financial-calendar/
PRESENTATION OF THE INTERIM REPORT
Analysts and media are invited to participate in a telephone conference on July 28, 2023, at 2.30 p.m. (CEST) 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
www.securitas.com
To follow the audio cast of the telephone conference via the web, please follow the link www.securitas.com/en/investors/webcasts-and-audiocasts/
A recorded version of the audio cast will be available at
www.securitas.com/en/investors/webcasts-and-audiocasts/
after the telephone conference.
For further information, please contact:
Micaela Sjökvist, Vice President, Investor Relations + 46 76 116 7443
ABOUT SECURITAS
Securitas is a world-leading safety and security solutions partner that helps make your world a safer place. Almost nine decades of deep experience means we see what others miss. By leveraging technology in partnership with our clients, combined with an innovative, holistic approach, we’re transforming the security industry. With 358 000 employees in 45 markets, we see a different world and create sustainable value for our clients by protecting what matters most – their people and assets.
Group financial targets
Securitas has four financial targets:
- 8–10 percent technology and solutions annual average real sales growth
- 8 percent Group operating margin by year-end 2025, with a >10 percent long-term operating margin ambit-ion
- A net debt to EBITDA ratio below 3.0x
- An operating cash flow of 70–80 percent of operating income before amortization
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. (CEST) on Friday, July 28, 2023.