Securitas has issued its Interim Report detailing the company’s financial results for the period January to March this year. Total sales stand at MSEK 26 744 with an organic sales growth of 7%. Operating income before amortisation is MSEK 1 290. The operating margin is 4.8%. Earnings per share are SEK 2.08, while free cash flow/net debt is 0.14.
Speaking about the results, Magnus Ahlqvist (president and CEO) said: “We had a strong start to the year. All business segments contributed to the improvement. Our comprehensive offer of protective services in combination with strong commercial activities allows us to grow faster than the security market in general. The operating conditions are similar to 2018 and we have good momentum. Security solutions and electronic security sales also developed well and grew by 17% compared with 2018. They now represent 21% of total Group sales.”
Adjusted for changes in exchange rates, the operating result grew by 11%. As stated, the operating margin was 4.8% in the first quarter, with a solid performance in North America as well as in Ibero-America where Spain continued to show strong performance. The operating margin in Europe also improved and was supported by the cost savings programme initiated last year. “We have a continuous focus on managing the price and wage balance and did so in the first quarter of 2019,” observed Ahlqvist.
Earnings per share, adjusted for changes in exchange rates and items affecting comparability, improved by 3%. The earnings per share growth was negatively impacted by a higher effective tax rate in the US and by a negative net effect from IFRS 16. Operating and free cash flow has improved when compared with the same quarter last year, but Ahlqvist is quick to point out that cash management remains an area of focus across all business segments.
“We foresee a future where scale and data availability are critical,” explained Ahlqvist. “We will drive the next big shift in the security services industry to benefit our clients and society as a whole. Earlier this year, we announced two major programmes to accelerate the transformation of Securitas. The objective of the first programme is to radically modernise our global IS/IT platform and capability throughout the Group. We expect significant benefits in terms of efficiency and being able to launch digital products at scale. The second programme drives a business transformation of our North American operations with the objective of operating in a more effective way. We’re progressing according to plan with both programmes and are excited about the long-term impact they will have on our way of operating and on our ability to offer data-driven intelligent protective services to our clients. These programmes are comprehensive multi-year transformation agendas enabling us to build for the long-term.”
In the near term, Ahlqvist states that the business continues to focus on enhancing its client engagement and continuously strengthening its offer and working relationships with clients. “We continue to drive specialisation of our protective services and to combine those protective services into tailored solutions for our clients based on their risk profile and needs.”
It’s now 14 months since Ahlqvist took on the presidency and CEO’s role for Securitas. “We have good momentum as a company,” he enthused. “This is thanks to all of our fantastic people who are making a difference every day. We’re now accelerating the transformation of our company and, with our team of 370,000 staff, we’re excited about the opportunities ahead.”