Securitas has published its financial results for the period January-June 2019. Total sales stand at MSEK 54 428 (48 822), with an organic sales growth of 6%. Operating income before amortisation is MSEK 2 667 on an operating margin of 4.9%. Earnings per share are SEK 4.25 (4.17), with free cash flow/net debt at 0.14.
For the period April-June this year, total sales are MSEK 27 684. Organic sales growth is at 5%. Operating income before amortisation stands at MSEK 1 377 on an operating margin of 5.0%. Earnings per share are SEK 2.18.
Commenting on these latest financials, Securitas president and CEO Magnus Ahlqvist explained: “North America delivered solid organic sales growth despite strong comparatives. In Europe, organic sales growth was hampered by a few large guarding contract losses during the second quarter in what is a competitive business environment. We grew faster than the security market in general in the first six months, despite a slowdown in a few countries in Europe. Security solutions and electronic security sales grew by 15% in the first half of the year and now represent 21% of total Group sales.”
Challenging labour conditions
Ahlqvist continued: “The operating margin in the second quarter was unchanged at 5.0%. It was also unchanged in the first half year at 4.9%, with a strong performance in North America. Europe and Ibero-America were flat. In Europe, we had challenging labour conditions and were not able to fully offset wage cost increases through price increases in two countries. Managing the price and wage balance, and cost efficiency, will remain key focus areas for us throughout the year. The operating margin in Europe was supported by the cost savings programme initiated during 2018 which developed according to plan. The operating result, adjusted for changes in exchange rates, grew by a total of 7%.”
Earnings per share, adjusted for changes in exchange rates and items affecting comparability, are slightly behind last year, 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 improved compared with the first six months of 2018. Cash management remains a key priority for Securitas across all of its business segments.
Driving transformation of the security industry
Ahlqvist went on to state: “During the second quarter, we announced three new global units to support our strategy of specialisation in each of our protective services, adding data-driven intelligence and delivering client-centric solutions. We also announced changes to the Securitas Group Management team.”
He added: “Earlier this year, we announced two comprehensive multi-year programmes which are progressing according to plan. The first of these will modernise our global IS/IT platform and capability across the Group, while the second is a business transformation of our North American operations.”
Further, Ahlqvist observed: “In the near term, we maintain our focus on delivering value to clients through our leading protective services offering. We’re also driving employee-focused activities to continuously increase our employee engagement and to provide better conditions and opportunities for our employees. This way, we continue to accelerate the transformation of our company and the security services industry as a whole.”