SECURITAS AB INTERIM REPORT January–June 2019
• Total sales MSEK 27 684 (25 466)
• Organic sales growth 5 percent (7)
• Operating income before amortization MSEK 1 377 (1 286)
• Operating margin 5.0 percent (5.0)
• Items affecting comparability (IAC) MSEK –46 (0), relating to IS/IT transformation programs
• Earnings per share SEK 2.18 (2.28)
• Earnings per share, before IAC, SEK 2.27 (2.28)
• Total sales MSEK 54 428 (48 822)
• Organic sales growth 6 percent (7)
• Operating income before amortization MSEK 2 667 (2 377)
• Operating margin 4.9 percent (4.9)
• Items affecting comparability (IAC) MSEK –66 (0), relating to IS/IT transformation programs
• Earnings per share SEK 4.25 (4.17)
• Earnings per share, before IAC, SEK 4.39 (4.17)
• Free cash flow/net debt 0.14 (0.07)
Comments from the President and CEO
Organic sales growth in the Group was 5 percent (7) in the second quarter and 6 percent (7) in the first half year. North America delivered solid organic sales growth, despite strong comparatives. In Europe, organic sales growth was hampered by a few large guarding contract losses during the second quarter in a competitive business environment. We grew faster than the security market in general in the first six months, despite a slowdown in a few countries in Europe. Security solutions and electronic security sales grew by 15 percent in the first half year, and now represent 21 percent of total Group sales.
The operating margin in the second quarter was unchanged at 5.0 percent (5.0). It was also unchanged in the first half year at 4.9 percent (4.9), with a strong performance in North America, and Europe and Ibero-America were flat. In Europe we had challenging labor conditions and were not able to fully offset wage cost increases through price increases in two countries. Managing the price and wage balance, and cost efficiency, will remain key focus areas throughout the year. The operating margin in Europe was supported by the cost savings program initiated during 2018, which developed according to plan. The operating result, adjusted for changes in exchange rates, grew with 7 percent.
Earnings per share, adjusted for changes in exchange rates and items affecting comparability, was slightly behind last year, negatively impacted by a higher effective tax rate in the US and by a negative net effect from IFRS 16.
Operating and free cash flow improved compared with the first six months last year. Cash management remains a key priority across all business segments.
Driving the transformation of the security services industry
During the second quarter, we announced three new global units to support our strategy of specialization in each of our protective services, adding data-driven intelligence and delivering client centric solutions. We also announced changes to the Securitas Group Management team.
Earlier this year we announced two comprehensive multi-year programs, which are progressing according to plan. The first program will modernize our global IS/IT platform and capability across the Group and the second is a business transformation of our North American operations.
In the near term, we maintain our focus on delivering value to clients through our leading protective services offering. We are also driving employee-focused activities to continuously increase our employee engagement and to provide better conditions and opportunities for our employees.
This way, we continue to accelerate the transformation of our company and the security services industry.
President and Chief Executive Officer
PRESENTATION OF THE INTERIM REPORT
Analysts and media are invited to participate in a telephone conference on July 31, 2019 at 2:30 p.m. (CET) where President and 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
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 761167443
FINANCIAL INFORMATION CALENDAR
November 6, 2019, 8.00 a.m. (CET) Interim Report January–September 2019
February 6, 2020, app. 1.00 p.m. (CET) Full Year Report January–December 2019
For further information regarding Securitas IR activities, refer to
Securitas has a leading position in the security services industry with a strong local and global market presence. We currently operate in 58 countries and employ 370 000 people. Our operations have been organized in a decentralized structure and include three business segments: Security Services North America, Security Services Europe and Security Services Ibero-America. We also have operations in Africa, the Middle East and Asia, which form the AMEA division. Securitas serves a wide range of customers of all sizes in a variety of industries and customer segments. Security solutions based on customer-specific needs are built through different combinations of on-site, mobile and remote guarding, electronic security, fire and safety, and corporate risk management. Securitas can respond to the unique and specific security challenges facing its customers, and tailor its offering according to their specific industry demands. Securitas is listed in the Large Cap segment at Nasdaq Stockholm.
Our strategy is to offer protective services that integrate all our areas of competence. Together with our customers, we develop optimal and cost-efficient solutions that are suited for the customers’ needs. This brings added value to the customers and results in stronger, more long-term customer relationships and improved profitability.
Group financial targets
Securitas focuses on two financial targets. The first target relates to the statement of income: average growth of earnings per share of 10 percent annually. The second target relates to the balance sheet: free cash flow in relation to net debt of at least 0.20.
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, July 31, 2019.
Securitas AB (publ.)
P.O. Box 12307, SE-102 28 Stockholm, Sweden
Visiting address: Lindhagensplan 70
Telephone: +46 10 470 30 00. Fax: +46 10 470 31 22
Corporate registration number: 556302–7241