Securitas AB Interim Report January–June 2022
April–June 2022
- Total sales MSEK 30 535 (26 499)
- Organic sales growth 6 percent (8)
- Operating income before amortization MSEK 1 760 (1 471)
- Operating margin 5.8 percent (5.6)
- Items affecting comparability (IAC) MSEK –226 (–259), mainly relating to the previously announced transformation programs
- Earnings per share SEK 2.79 (2.09)
- Earnings per share, before IAC, SEK 3.33 (2.64)
- Cash flow from operating activities 53 percent (63)
January-June 2022
- Total sales MSEK 59 133 (52 313)
- Organic sales growth 5 percent (4)
- Operating income before amortization MSEK 3 212 (2 727)
- Operating margin 5.4 percent (5.2)
- Items affecting comparability (IAC) MSEK –360 (–395), mainly relating to the previously announced transformation programs
- Earnings per share SEK 5.09 (3.95)
- Earnings per share, before IAC, SEK 5.90 (4.75)
- Net debt/EBITDA 2.2 (2.2)
- Cash flow from operating activities 25 percent (81)
Comments from the President and CEO
“Strong operational results and completion of Stanley Security acquisition”
We are executing on our strategy to be the leading security solutions partner to our clients with world-leading technology and expertise. We delivered all time high profitability and improved the operating margin to 5.8 percent (5.6) in the second quarter, a level which is significantly higher than the pre-pandemic years.
The good business conditions accelerated in the second quarter with organic sales growth of 6 percent (8), driven by Europe and Ibero-America. As planned, organic sales growth in North America was negative in the second quarter due to the low margin contract terminations from last year and lower extra sales. However, the underlying business in North America is developing very well and we expect organic sales growth to return to positive in the third quarter.
We had great momentum within high-margin security solutions and electronic security sales in the second quarter with 13 percent real sales growth, which represented 23 percent (22) of Group sales.
The operating result for the Group, adjusted for changes in exchange rates, increased by 8 percent in the second quarter. Our operations in North America and Ibero-America delivered strong margin improvement. Europe improved well compared to the first quarter with strong operating result improvement compared to last year, despite continued pressure from costs related to labor shortage and sickness. The inflationary environment is challenging across the Group, but we have successfully managed a positive price and wage balance. Dynamic price increase management is a key priority going forward to ensure quality delivery to our clients.
Our high focus on improving client value and profitability is generating results with higher sales of security solutions and electronic security across all segments together with positive impact from active portfolio management and our transformation programs.
CREATING THE NEW SECURITAS
The transformation program in North America which was finalized in 2021, is delivering value in the day-to-day operations and contributes to the operating margin development. The ongoing business trans-formation programs in Europe and Ibero-America are progressing according to plan and we expect to realize strong financial and operational benefits in the years to come.
In the second quarter, we reached an important sustainability milestone as the first major company in the industry that is committing to the Science Based Targets initiative (SBTi), and we are now beginning the process of developing and validating targets to reduce the Group’s climate impact.
On July 22 we closed the acquisition of Stanley Security. We are very pleased that the acquisition is formally completed, and I want to welcome all of Stanley Security’s clients and employees into Securitas. Our joint integration preparation work has been solid and we now look forward to accelerating our journey together and immediately executing on our value creation plan.
Bringing together our two great companies is an industry-defining event. Combining our talent and expertise sets us up for stronger growth thanks to an outstanding client offering and we expect significant margin enhancement opportunities going forward. Our shared values and high sustainability ambitions enable us to utilize our potential to provide tech-enabled security solutions that create long-term value for our clients, our shareholders and the society at large.
We are looking forward to update you on the strategy and announce new financial targets at the Investor update on August 24. We are welcoming all our shareholders to participate on this exciting journey in the rights issue connected to the transaction which will be launched in September.
Magnus Ahlqvist
President and CEO
FINANCIAL INFORMATION CALENDAR
August 24, 2022, 2.00 p.m. (CET)
Investor update
November 8, 2022, app. 1.00 p.m. (CET)
Interim Report
January–September 2022
February 7, 2023, app. 1.00 p.m. (CET)
Full-year Report
January–December 2022
For further information regarding Securitas IR activities, refer to
www.securitas.com/investors/financial-calendar
PRESENTATION OF THE INTERIM REPORT
Analysts and media are invited to participate in a telephone conference on July 28, 2022, at 2.30 p.m. (CET) 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. To participate in the telephone conference, please dial in five minutes prior to the start of the conference call:
US: + 1 631 913 1422
Sweden: + 46 8 566 426 51
UK: + 44 333 3000 804
Please use the following pin code for the telephone conference: 621 490 78#
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, Vice President, Investor Relations + 46 76 116 7443
ABOUT SECURITAS
Securitas has a leading global and local market presence with operations in 47 markets. Our operations are organized in three business segments: Security Services North America, Security Services Europe and Security Services Ibero-America. We also have operations in Africa, the Middle East, Asia and Australia, which form the AMEA division. Securitas serves a wide range of clients of all sizes in a variety of industries and segments. Security solutions based on client-specific needs are built through different combinations of on-site, mobile and remote guarding, electronic security, fire and safety, and corporate risk management. We adapt our security solutions based on the risks and needs of each client through increased client engagement and continuously enhanced knowledge. Securitas is listed in the Large Cap segment at Nasdaq Stockholm.
Group strategy
At Securitas, we are leading the transformation of the security industry by putting our clients at the heart of our business. We solve our clients’ security needs by offering qualified and engaged people, in-depth expertise and innovation within each of our protective services, the ability to combine services into solutions and by using data to add further intelligence. To execute on our strategy to become a security solutions partner with world-leading technology and expertise, we are focusing on four areas: empowering our people, client engagement, protective services leadership and innovation, and efficiency.
Group financial targets
Securitas has three financial targets:
- An annual average increase in earnings per share of 10 percent
- Net debt to EBITDA ratio of on average 2.5
- An operating cash flow of 70 to 80 percent of operating income before amortization
Securitas has also set a strategic transformation ambition – to double our security solutions and electronic security sales by 2023, compared with 2018.
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. (CET) on Thursday, July 28, 2022.