Securitas AB Interim Report January–March 2018
• Total sales MSEK 23 356 (22 491)
• Organic sales growth 6 percent (4)
• Operating income before amortization MSEK 1 091 (1 056)
• Operating margin 4.7 percent (4.7)
• Earnings per share SEK 1.89 (1.72)
• Free cash flow/net debt 0.08 (0.12)
COMMENTS FROM THE PRESIDENT AND CEO
The strong sales momentum from 2017 continued in the first quarter of 2018, and resulted in organic sales growth of 6 percent (4). We continue to be supported by favorable macroeconomic conditions in our main markets. We estimate that we grew faster than the security market in general, where our ability to deliver complete security solutions is a market advantage.
The operating margin was stable at 4.7 percent. It was flat in North America, while Europe declined slightly and Ibero America improved. Earnings per share, adjusted for changes in exchange rates, improved by 13 percent supported by a lower tax rate reflecting the impact from the US tax reform in December 2017. The favorable macroeconomic conditions in our main markets are expected to give higher wage inflation in 2018. In the first quarter, we balanced wage cost increases with price increases. Our strategy to mitigate higher wage inflation is also to offer security solutions using technology to our customers.
The weak cash flow in the first quarter was mainly due to Europe where the timing of Easter had a negative impact. The cash flow improved significantly during the first part of April.
Security solutions and electronic security sales grew by 20 percent compared with the first quarter 2017 and represented 19 percent of total sales. In the first quarter we have completed several strategic acquisitions, including Automatic Alarm in France and Alphatron in the Netherlands. These acquisitions will greatly enhance our technical capability in these markets and support the security solutions strategy in Europe. In March we announced our intention to acquire Kratos Public Safety and Security, a top 10 system integrator in the United States. We are very excited about this acquisition since it will further strengthen our capability within electronic security in the US.
On March 1 I took over as President and CEO. During the first months I have spent a lot of time with our teams and customers in different regions. We have a strong position in the market, our customers believe in our direction and we are in a good position to drive growth. The coming quarter we will continue to have a strong focus on the price and wage balance and on the integration work for the acquisitions made. We have solid foundation and will speed up the pace of transformation. We need to drive the digitalization and modernize our information systems and capabilities. With intelligent security we will be able to enhance the value for our customers through better security solutions. These will be important themes as we go forward.
I am looking forward to working with the great Securitas people and our customers as we continue to lead the transformation of the global security industry.
President and Chief Executive Officer
PRESENTATION OF THE INTERIM REPORT
Analysts and media are invited to participate in a telephone conference on May 2, 2018 at 2:15 p.m. (CET) where CEO Magnus Ahlqvist and CFO Bart Adam 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: + 1 855 269 2605
Sweden: + 46 8 519 993 55
UK: + 44 203 194 0550
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, Head of Investor Relations, + 46 10 470 3013
Gisela Lindstrand, Senior Vice President Corporate Communications and Public Affairs, + 46 10 470 3011
Securitas is a global knowledge leader in security. We base our protective services on customer-specific needs through different combinations of on-site, mobile and remote guarding, electronic security, fire and safety and corporate risk management. Everywhere from small stores to airports, our 345 000 employees are making a difference.
This is information that Securitas AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 1.00 p.m. (CET) on Wednesday, May 2, 2018.
Securitas AB (publ.) P.O. Box 12307, S-102 28 Stockholm, Sweden Corp. ID no: 556302–7241 Visiting address: Lindhagensplan 70 Telephone: +46 (0) 10 470 30 00 Facsimile: +46 (0) 10 470 31 22 www.securitas.com