Securitas AB Interim Report January-September 2021
STOCKHOLM, Oct. 29, 2021 /PRNewswire/ -- Securitas AB Interim Report January–September 2021.
JULY–SEPTEMBER 2021
- Total sales MSEK 27 338 (26 501)
- Organic sales growth 4 percent (0)
- Operating income before amortization MSEK 1 605 (1 327)
- Operating margin 5.9 percent (5.0)
- Items affecting comparability (IAC) MSEK –120 (–112), relating to the previously announced transformation programs, the cost-savings program in the Group and a one-off payment from AFA Insurance of MSEK 114
- Earnings per share SEK 2.59 (2.08)
- Earnings per share, before IAC, SEK 2.82 (2.31)
- Cash flow from operating activities 75 percent (199)
JANUARY–SEPTEMBER 2021
- Total sales MSEK 79 651 (81 477)
- Organic sales growth 4 percent (0)
- Operating income before amortization MSEK 4 332 (3 488)
- Operating margin 5.4 percent (4.3)
- Items affecting comparability (IAC) MSEK –515 (–218), relating to the previously announced transformation programs, the cost-savings program in the Group and a one-off payment from AFA Insurance of MSEK 114
- Earnings per share SEK 6.54 (5.18)
- Earnings per share, before IAC, SEK 7.57 (5.63)
- Net debt/EBITDA 2.1 (1.9)
- Cash flow from operating activities 79 percent (163)
Comments from the President and CEO
"Full focus on margin enhancement as the impact from covid reduces"
WE ARE CONTINUING TO EXECUTE ON OUR STRATEGY, AND HAVE DELIVERED SEVERAL QUARTERS WITH STRONG PERFORMANCE
- We have sharpened the business over the last year through focus on profitability and cost management and execution of the transformation programs
- We are managing the remaining effects of covid with strong performance across all business segments despite decreasing corona-related extra sales
- We are seeing positive developments in our electronic security and solutions business and accelerating growth is a priority going forward
PROFITABLE GROWTH IN FOCUS
The Group's organic sales growth in the third quarter was 4 percent (0), with all business segments contributing to the improvement. The gradual business recovery from the corona pandemic continued in the third quarter, with commercial activity and sales momentum picking up in all of our business segments, including airport security.
Sales of security solutions and electronic security had a real sales growth of 7 percent (5) in the third quarter. We completed two strategic acquisitions within electronic security in the quarter, Protection One in Germany and Tepe Güvenlik in Turkey, both of which will greatly enhance our capabilities in two important markets. We are actively exploring further acquisition opportunities within electronic security, and we keep investing in our solutions organization to further accelerate organic sales growth in this business line.
The operating result for the Group, adjusted for changes in exchange rates, increased by 24 percent in the third quarter and the operating margin was 5.9 percent (5.0). The improving business fundamentals and active portfolio management strengthened all the business segments, and the cost-savings program initiated during 2020 also had a positive impact. In the quarter we had normal levels of provisioning compared to the increased levels last year.
Total price adjustments in the Group were on par with wage cost increases year to date. Labor shortage and wage pressure remain a challenge. Maintaining the price and wage balance is a key priority throughout the Group going into 2022.
Over the past year we have exited from markets with limited business opportunities and we have actively renegotiated or exited low margin contracts. We see tangible results in the airport business as well as in several Latin American countries.
The Group delivered a good cash flow in the third quarter.
STRONGER AFTER MANAGING COVID
The corona pandemic is still present in our day-to-day operations as we close the third quarter of 2021. While uncertainty remains regarding the long-term consequences of the pandemic, we are coming out stronger thanks to having taken action early.
COMMITTED TO TRANSFORMATION TARGETS
We are beginning to reap the benefits of the transformation program in North America which was initiated in 2019, and see positive contribution to the operating margin. The business transformation in Europe and Ibero-America is also progressing according to plan. We are confident that these programs will improve the business mix to achieve the associated margin targets.
The strength of the Securitas team and the progress of our business transformation are deciding factors of our strong performance in the first nine months of 2021.
Magnus Ahlqvist
President and CEO
PRESENTATION OF THE INTERIM REPORT
Analysts and media are invited to participate in a telephone conference on October 29, 2021, 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, Head of Investor Relations +46 76 116 7443
ABOUT SECURITAS
Securitas has a leading global and local market presence with operations in 47 countries. 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 the intelligent protective services partner, 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
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 Friday, October 29, 2021.
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SOURCE Securitas
