Home Guarding Securitas publishes Full Year Financial Report for January-December 2016

Securitas publishes Full Year Financial Report for January-December 2016

by Brian Sims
Alf Göransson: president and CEO at Securitas

Alf Göransson: president and CEO at Securitas

From January to December 2016, total sales at Securitas were MSEK 88 162 (80 860). Organic sales growth is 7% (5), with operating income before amortisation standing at MSEK 4 554 (4 089). Operating margin for the period is 5.2% (5.1) and earnings per share SEK 7.24 (6.67). Free cash flow/net debt is 0.13 (0.22) with a proposed dividend of SEK 3.75 (3.50).

For the period from October through to December last year, total sales are reported at MSEK 23 715 (21 031) on an organic sales growth of 5%. Operating income before amortisation stands at MSEK 1 241 (1 133), with the operating margin being 5.2% (5.4). Earnings per share are SEK 1.92 (1.83).

“We’re proud to have delivered another record year for Securitas,” enthused president and CEO Alf Göransson. “With an organic sales growth of 7% in 2016, we grew faster than the security market. We improved the operating margin and, when adjusted for changes in exchange rates, earnings per share grew by 9%.”

According to Göransson, the business is also delivering on its strategy. “Security solutions and electronic security grew by 56% (38) including acquisitions and by 22% (35) in organic terms, representing BSEK 14.1 (9.3) or 16.0% (11.5) of total sales in 2016. We believe that we can continue to increase our sales of security solutions and electronic security at a high pace in the coming years and make this a substantial part of the Group’s total sales.”

Market dynamics in the US remain favourable for the business, with Göransson confident that Securitas’ acquisition of Diebold’s electronic security operation will allow the company to further advance its market position in the US security sector.

Göransson continued: “During the past year, the European market has been characterised by increased social tension and higher levels of security needs. These extra needs have proven to be short-term and volatile in nature, and are expected to continue to reduce in the coming quarters. In combination with a few large contract terminations and historically high comparatives, this will reverse the positive organic sales growth trend in Security Services Europe in the coming quarters, although we expect it to recover during the second half of this year.”

The net debt to EBITDA ratio increased to 2.4 (1.9) in 2016 mainly as a result of the acquisitions in electronic security. Cash flow was weaker than expected in the last quarter, but measures have been taken to restore it in 2017.

“Our investments in protective services during recent years have resonated very well in the marketplace,” concluded Göransson, “while our efforts to optimise customers’ security spend are allowing us to grow faster than the security markets in the US and Europe as well as in many of the Ibero-American countries. As an important part of our strategy entitled ‘Vision 2020’, we’re also investing in digitising our customers’ historical and real-time data in order to gradually produce more predictive security. In combination with our security solutions and electronic security strategy, predictive security will create further customer value and enhanced security, while at the same time strengthening our leadership position in the global security market.”

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