SECURITAS HAS issued an Interim Report covering the company’s financials for the period from January through until March 2022. Total sales stand at MSEK 28 598 (25 814), with organic sales growth at 4%. Operating income before amortisation is MSEK 1 452 (1 256) on an operating margin of 5.1% (4.9). Earnings per share are SEK 2.30 (1.86). Net debt/EBITDA is 2.0 (2.1).
Magnus Ahlqvist, president and CEO of the business, has referenced a “robust” start to the year with “continued margin improvement”.
Ahlqvist stated: “We continue to execute on our strategy to be the leading security solutions partner for our clients with world-leading technology and expertise. This is generating results. We recorded the highest first quarter operating margin in more than a decade, with record levels in North America and Ibero-America.”
Securitas began 2022 with 4% organic sales growth in the first quarter. Such growth has been particularly in Europe and Ibero-America. As expected, organic sales growth in North America delivered a negative outcome due to previously communicated contract terminations and lower levels of Coronavirus-related extra sales. Overall conditions in the business environment further normalised in the first quarter compared to the same period last year.
“Increased market activity and client interactions generated good momentum in the business,” explained Ahlqvist, “including 9% sales growth for security olutions and electronic security in the Group, which now represents 23% of overall Security Group sales.”
According to Ahlqvist, the price and wage balance was successfully kept on par and the business is positioned to maintain that scenario.
Operating result increase
The operating result for the Securitas Group, adjusted for changes in exchange rates, increased by 8% in the first quarter, while the operating margin improved to 5.1%. Strong performance in North America and Ibero-America together with improving sales of security solutions and electronic security across all segments contributed to the positive margin development, as did the company’s continued high focus on profitability through active portfolio management, its transformation programmes and general cost control.
On that note, Ahlqvist said: “This enabled us to offset the challenges in the quarter with labour shortages in several markets and increased sickness costs in Europe. Adjusted for this impact, the underlying margin development in Europe was well ahead of last year.”
Ahlqvist also referenced the current situation in Ukriane. “It is with deep regret that we’ve witnessed developments in Ukraine and my thoughts are with everyone affected. We do not have any business in either Russia or Ukraine, but we have organised company-wide activities to provide individual and company contributions for the Red Cross and the United Nations High Commissioner for Refugees. I would like to emphasise the outstanding support provided by many Securitas colleagues and their families in neighbouring countries to help a large number of refugees from Ukraine.”
Creating the ‘new’ Securitas
Ahlqvist pointed out that Securitas is “realising value” in the transformation programme in North America, which is evidenced in the operating margin development. “We are now executing on the remaining business transformation programmes in Europe and Ibero-America and we expect to realise strong financial and operational benefits in the years to come. These transformation programmes will provide us with a significantly stronger foundation upon which to enhance client value and drive operating margin improvement.”
Securitas is looking to close the acquisition of Stanley Security towards the end of the second quarter in 2022. This acquisition is described as being “transformational” for Securitas, not to mention the security industry in general. “The integration and value creation planning is ongoing and on track,” asserted Ahlqvist.
In conclusion, Ahlqvist stated: “When Stanley Security is integrated and the transformation programmes are fully implemented, we will have built a new Securitas: a modern, digitised and innovative security solutions partner for our clients with a structurally higher margin profile.”
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