Home Guarding Securitas records 7% organic sales growth in Interim Report for July-September 2016

Securitas records 7% organic sales growth in Interim Report for July-September 2016

by Brian Sims
Alf Göransson: president and CEO at Securitas

Alf Göransson: president and CEO at Securitas

Organic sales growth has continued to be strong in the third quarter at Securitas, driven largely by good portfolio development and extra sales remaining at relatively high levels. From July through until September, total sales (MSEK) stood at 22 316 (20 468), with organic sales growth at 7%.

Operating income before amortisation is reported as MSEK 1 230 (1 121) on an operating margin of 5.5%. Earnings per share are at SEK 2.00 (1.88).

From January to September this year, total sales are MSEK 64 447 (59 829). Organic sales growth is 8%, with operating income before amortisation being MSEK 3 313 (2 956). Operating margin is reported to be 5.1%. Earnings per share are at SEK 5.32 (4.84), with free cash flow/net debt at 0.12 (0.23).

Market dynamics in the US remain favourable for the company, while most of the extra security needs in Europe are short-term in nature and will reduce in the coming quarters. This fact, in combination with a few major contract losses and historically high comparatives, is scheduled to reverse the positive organic sales growth trend in Security Services Europe in the coming quarters, but Securitas expects this scenario to recover during the second half of 2017.

“Our investments in protective services during recent years also resonate very well in the market,” explained president and CEO Alf Göransson, “while our efforts to optimise customers’ security spend allow us to presently grow faster than the security markets in the US and Europe as well as in many of the Ibero-American countries.”

Improved operating margin

Earnings per share improved by 7% in the third quarter and by 13% in the period from January to September, adjusted for changes in exchange rates.

The operating income during January to September improved by 16% compared to the same period last year, again adjusted for changes in exchange rates. The operating margin was 5.5% in the quarter and improved to 5.1% for the first nine months of the year.

Security solutions and electronic security continued to increase in line with the company’s expectations.

“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,” concluded Göransson. “The completed acquisition of Diebold’s North American electronic security business on 1 February this year also makes an important contribution in terms of accelerating our transformation.”

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