Securitas CEO highlights “paradigm shift in the security sector”

Speaking at the company’s Investor Day event (held in Stockholm on 5 December), Securitas president and CEO Alf Göransson stated that the organisation is well positioned to take advantage of the paradigm shift taking place in the security sector.

Given current market dynamics and a gradual increase in the use of technology in security solutions, the security markets in Europe and North America have been growing at the same pace as GDP for the past few years.

“This trend will likely continue for the next few years,” said Göransson. “Historically, the security market has grown 1% to 2% faster than GDP in mature markets. Today’s slower growth rate could be accelerated if the degree of outsourcing of currently in-sourced security services were to increase as the role of technology becomes more important in enhancing security levels.”

Alf Göransson: president and CEO of Securitas

Alf Göransson: president and CEO of Securitas

Securitas’ leader continued: “The rate could also be improved through an enlargement of the security market since the private security industry could, to a larger extent, take over services currently performed by public authorities, Governments and other entities.”

The degree to which the use of technology is increasing varies from country to country in the Securitas markets.

“As the pace accelerates, Securitas will be able to gain market shares by having a stronger and more cost-efficient offering than many security guarding companies,” added Göransson, “and thus have a higher organic growth rate than the security market average. This supports us reaching our target of an average growth of earnings per share of 10% annually.”

Security solutions and technology accounted for 6% of Group sales in 2012 and 7.5% for the third quarter of 2013. Securitas has set a target to triple this figure by year-end 2015.

The capital expenditure needed to increase the Group’s sales of security solutions will be offset by a slower rate of acquisitions. For every MSEK 100 in annual security solutions sales (new sales or conversion of existing contracts), Securitas expects to make a capital expenditure of 10-20%.

These expenditures will primarily relate to customer site equipment and will be depreciated over the contract duration.

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