Securitas has announced its financial results for January to March 2018. Total sales stand at MSEK 23 356 (22 491), with organic sales growth at 6% (4). Operating income before amortisation is MSEK 1 091 (1 056) and operating margin 4.7% (4.7). Earnings per share is SEK 1.89 (1.72) while free cash flow/net debt is recorded at 0.08 (0.12).
President and CEO Magnus Ahlqvist commented: “The strong sales momentum from 2017 continued in the first quarter of 2018 and resulted in an organic sales growth of 6% (4). We continue to be supported by favourable 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.”
Ahlqvist added: “The operating margin was stable at 4.7%. It was flat in North America, while Europe declined slightly and Ibero America improved. Adjusted for changes in exchange rates, earnings per share improved by 13% supported by a lower tax rate reflecting the impact from the US tax reform in December last year. The favourable 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. Cash flow improved significantly during the first part of April.
Security solutions and electronic security sales grew by 20% compared with Q1 2017 and represented 19% of total sales.
Securitas completed several strategic acquisitions in the first quarter, including Automatic Alarm in France and Alphatron in the Netherlands. These acquisitions will greatly enhance the company’s technical capability in these markets and support the security solutions strategy in Europe.
In March, the business announced its intention to acquire Kratos Public Safety and Security, a Top 10 systems 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,” enthused Ahlqvist.
Speaking about his own role, Ahlqvist said: “On Thursday 1 March, I took over as president and CEO of the business. During the first couple of months, I’ve 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’re in a good position to drive growth. In the coming quarter we will continue to have a strong focus on the price and wage balance and on the integration work necessary for the acquisitions made. We have solid foundations and will speed up the pace of transformation. We need to drive the digitisation process and modernise our information systems and capabilities. With intelligent security, we will be able to enhance value for our customers through better security solutions. These will be important themes as we go forward.”