Securitas has issued its Interim Report for the period January-September 2015 in which the security guarding, technology solutions, consulting and investigations company highlights a period of “strong” organic sales growth with “good” sales momentum across Europe as the business launches its Vision 2020 strategy project.
Headline figures for the period from July through until September this year show total sales of MSEK 20 468 (18 003). Organic sales growth stands at 4% with operating income before amortisation reported as MSEK 1 121 (962). Operating margin is 5.5% (5.3) and earnings per share SEK 1.88 (1.57).
From January to September, total sales are MSEK 59 829 (51 234) with organic sales growth at 5% (3). Operating income before amortisation is MSEK 2 956 (2 488) on an operating margin of 4.9% (4.9). Earnings per share for this period are SEK 4.84 (3.93) with free cash flow/net debt totalling 0.23 (0.16).
“Organic sales growth continued to be strong,” urged Securitas’ president and CEO Alf Göransson, “supported by good sales momentum in the US as well as in Europe and by continued positive development in Spain. We estimate that we’re growing faster than the security markets in both the US and Europe, mainly supported by our underpinning strategy around security solutions and technology.”
Göransson believes the company is capable of growing its security solutions and technology sales “in at least the same range” as last year (ie by 28% or more). That statement is supported by development thus far in the first nine months of this year.
“Earnings per share improved with 10% in the first nine months,” added Göransson, “adjusted for changes in exchange rates. The operating margin improved in the third quarter and was flat for the year to date.”
The Group Vision 2020 Project
During the past few years, Göransson feels that Securitas “has come far” in its concerted and determined efforts to become the leading security solutions company. “We are at the forefront of the transformation of the security industry,” said Göransson.
During the third quarter of this year, the company has launched its Group Vision 2020 Project which is designed to shape business strategy such that Securitas “becomes even stronger” in the years ahead.
“We have set a clear plan and started the implementation process to reinforce and accelerate our strategy,” stated Göransson. “In the Vision 2020 Project, we’re the leading international security company specialising in protective services and solutions based around people, technology and knowledge.”
According to Göransson, Securitas will continue to “invest in and lead” when it comes to combining technology with security guarding services and “actively pursue” organic growth in solutions and technology while also looking at acquisition opportunities within the electronic security arena.
Only last month, Securitas agreed to acquire the commercial contracts and operational assets of Diebold Inc’s electronic security business (the third largest commercial electronic security provider in North America). “This acquisition is in line with our Vision 2020 Project,” asserted Göransson, “and enables us to offer completely integrated security solutions to our customers in North America.”
IT and Security Operations Centres
Göransson went on to state that it will also be “increasingly important” in the coming years that the business co-ordinates its efforts and investments within IT and Security Operations Centres. “As a Group, this means that we’ll be more consistent from a customer perspective and, at the same time, improve cost efficiencies.”
Securitas will also continue to expand its mobile patrol and response network. Göransson believes that “being able to respond faster than any other security company” will represent an “increasingly important competitive advantage”. To enable this, the business will explore new channels to generate monitoring and mobile patrol sales growth.
“In addition, we will expand the scope beyond guarding and electronic security to invest and focus more in fire and safety and in corporate risk management,” commented Göransson. “We see good operational synergies in these areas. At the same time, such moves will increase the value we can deliver to our customers by helping them to optimise their total security and safety spend.”
In conclusion, Göransson explained: “We’ve already proven that our strategy differentiates us from most competitors. As a result, this will allow us to generate higher organic sales growth than the market average.”
Strategic partnership with Alarm.com
At the same time as launching its latest Interim Report, Securitas has announced a strategic partnership with Alarm.com to launch the latter’s cloud-based security and automation services in Europe.
The two companies will collaborate on the development of interactive solutions for a wide range of commercial security applications by offering third party sales channels a complete ‘smart’ package. The plan is to initiate pilots later this year in preparation for a phased European launch during 2016.
As stated, it’s of great importance to Securitas that the company continues to expand its mobile patrol and response network and density through investments and new channels. This new partnership is one way in which to grow the company’s remote services and mobile network.
“The business partnership with Alarm.com will enable us to find new sales channels in Europe to generate monitoring and mobile patrol sales growth,” said Olle Lindskog, director of business development for alarm services at Securitas Security Services Europe.
Alarm.com’s award-winning services and top-rated mobile app are said to deliver “a seamless user experience” across a broad ecosystem of security, energy, video and automation devices. Alarm.com’s technology includes a proven cloud platform and professional services.
“Partnering with a global brand like Securitas is a strong fit for our international strategy,” opined Reed Grothe, Alarm.com’s senior vice-president of global business development. “Our proven platform and commitment to innovation will help Securitas introduce the latest in security technology to third-party consumer sales channels.”