Securitas has issued its Interim Report covering the period January to September 2018. Total sales are MSEK 74 643, with an organic sales growth of 6%. Operating income before amortisation stands at MSEK 3 829. Operating margin is 5.1%. Earnings per share are SEK 6.24. Free cash flow/net debt stands at 0.12.
“The Group continued with strong market momentum reaching organic sales growth of 6% in the first nine months, despite facing tougher comparatives in the third quarter,” said Magnus Ahlqvist, president and CEO. “We benefit from successful commercial activities in combination with excellent client retention, and we grew faster than the security market in general. We continue to drive our strategy of combining different protective services into security solutions to our customers. Security solutions and electronic security sales grew by 22% compared with the first nine months of 2017 and represented 20% of total Group sales.”
Ahlqvist continued: “The operating margin was 5.1%, with improvements in both North America and the Ibero-America region while there was a slight decline in Europe. We’ve been able to balance wage cost increases with price increases in the first nine months. We see favourable macroeconomic conditions and labour shortage becoming more prominent in many markets. This situation is creating both challenges and opportunities. Going into 2019, we’ll continue with a strong focus on balancing prices and wages and offering alternative solutions to our customers.”
The cost savings programme in Security Services Europe was initiated in the third quarter. That programme will result in improved efficiency and includes 13 countries. “Restructuring costs of MSEK 268 were recognised in the third quarter of this year as an item affecting comparability,” highlighted Ahlqvist. “The payback period is about two years. Some savings will start to be realised during the fourth quarter, but mostly during 2019.”
In addition, Ahlqvist observed: “Earnings per share, adjusted for changes in exchange rates and items affecting comparability, improved by 14%. This growth is based on our strategic and commercial development and positively impacted by the US tax reform.”
During the investor update that took place in Stockholm last month, Ahlqvist had the opportunity to share his views on the industry, the company’s current situation and the journey ahead. “Security is a good industry to be in and Securitas has a leading position in the market,” enthused Ahlqvist. “We have demanding and loyal customers who believe in our direction and we’re in a good position to create enhanced value for those customers and drive profitable growth. We’re determined to deliver on our Vision 2020 strategy and lead the transformation of the global security industry. With intelligent security, we will be able to further enhance value for our customers through better security solutions. We’ll continue to invest and restructure in order to drive digitisation and modernise our information systems and capabilities. These are our key focus areas as we go forward.”