Securitas AB issues Interim Report covering January-June 2014

April-June 2014
Total sales: MSEK 17 120 (16 510), Organic sales growth: 3% (1), Operating income before amortisation: MSEK 788 (809), Operating margin: 4.6% (4.9), Earnings per share: SEK 1.23 (1.26)

January-June 2014
Total sales: MSEK 33 231 (32 370), Organic sales growth: 2% (1), Operating income before amortisation: MSEK 1 526 (1 558), Operating margin: 4.6% (4.8), Earnings per share: SEK 2.36 (2.30), Free cash flow/net debt: 0.20 (0.15)

Comments from the President and CEO

Speaking about the results issued this morning, Alf Göransson (President and CEO at Securitas) said: “Organic sales growth continues to show a positive trend and all business segments improved compared to the first half of last year. Primarily supported by the US, the organic sales growth reached 3% in the second quarter. In France, we are showing positive organic sales growth in the second quarter, while organic sales growth in Spain continues to be negative. Latin America continues to exhibit strong organic sales growth.”

Alf Göransson: President and CEO of Securitas

Alf Göransson: President and CEO of Securitas

Net income improved in the first half year
“In real terms, the operating result was slightly behind last year, while earnings per share improved with 3%. The operating margin in Security Services North America was on the same level as last year, while Security Services Europe is 0.1% behind. The positive development in Security Solutions and Technology continued in Spain, but is not yet sufficient to mitigate the difficult conditions in the guarding business and the labour-related charges imposed by the Spanish Government in December last year. Corrective actions are continuously being taken to adapt to the reduced guarding sales.”

Sales of security solutions and technology gradually increasing
“In 2012, sales of security solutions and technology represented approximately 6% of Group sales. We have set a target to triple this share of sales by the end of 2015. We continue to invest in resources within security solutions and technology, and the share of sales run rate in the second quarter 2014 was 9%.”

Changing market dynamics creating opportunities for growth
“Due to current market dynamics and a gradual increase of the use of technology in security solutions, the security market in mature markets is no longer expected to grow by 1%-to-2% faster than GDP as it has historically, but rather at the same pace as GDP. In the future, this trend could be improved through increased outsourcing of currently in-sourced guarding activities and by allowing the private security industry to take over services performed by public authorities and Governments.”

Göransson concluded: “In Securitas’ markets, the degree to which technology is being integrated into security solutions varies from country to country. However, as the pace accelerates, we’re confident that we will be able to gain market shares by having a stronger and more cost-efficient offering than many traditional security guarding companies. We’ve already seen proof of this in markets where we are well equipped to offer security solutions, and where we will be able to grow our business faster than the security market average.”

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