Upbeat figures underpin 2014 Full Year Report issued by Securitas

Alf Göransson: President and CEO at Securitas

Alf Göransson: President and CEO at Securitas

According to Securitas’ Full Year Report for 2014, organic sales growth has continued to show a positive trend for the business driven by successful sales efforts, a strategy focused on both security guarding solutions and technology offerings and an improved macro economic climate in the USA. All business segments have made progress when compared with last year’s figures.

The headline statistics announced by president and CEO Alf Göransson from Securitas’ headquarters at Lindhagensplan in Stockholm are as follows:

January-December 2014

*Total sales: MSEK 70 217 (65 700)

*Organic sales growth: 3% (1)

*Operating income before amortisation: MSEK 3 505 (3 329)

*Operating margin: 5.0% (5.1)

*Earnings per share: SEK 5.67 (5.07)

*Free cash flow/net debt: 0.18 (0.22)

*Proposed dividend: SEK 3.00 (3.00)

October-December 2014

*Total sales: MSEK 18 983 (16 725)

*Organic sales growth: 5% (1)

*Operating income before amortisation: MSEK 1 017 (879)

*Operating margin: 5.4% (5.3)

*Earnings per share: SEK 1.74 (1.35)

Improvements in operating income

Commenting on this latest set of Group financials, Alf Göransson stated: “In real terms, earnings per share have improved by 8% in 2014. Operating income has improved both in Q4 and, indeed, for the full year when compared to 2013. The re-organisation in Spain was implemented during the fourth quarter for which a one-off restructuring cost of MSEK –19 (MEUR –2) was recognised.”

In addition, Göransson explained: “The employer mandate of the Affordable Care Act in the USA began to take effect on 1 January this year. We’re compliant with the Act, and we don’t expect any negative impact on our results as we’ve been able to mitigate the cost impact.”

The CEO went on to state: “Less clients than anticipated at the outset have chosen the security solutions alternative, opting instead for rate increases or some reductions in the scope of security. For Security Services North America in 2015, we estimate a positive net organic sales growth effect coming from the Affordable Care Act implementation of approximately 1%.”

Technology sales on the rise

In 2012, sales of security solutions and technology represented 6% of total Group sales. “Our target,” asserted Göransson, “is to increase this to a run rate of 18% by the end of 2015. In the fourth quarter of 2014 the rate reached 10%.”

According to Göransson, “significant progress” has been made since early 2012 with many markets “contributing well” to this achievement.

“Security Services Ibero-America is over-achieving its target, Security Services Europe is close to theirs but Security Services North America is lagging behind,” explained Göransson. “This is mainly due to the good organic sales growth in guarding contracts and the outcome of the Affordable Care Act in the USA. Consequently, this impacts the ability of the Group to reach the target of 18% run rate by the end of 2015, which is likely out of reach, although we will have come a long way. Internally, this target has been a strong driver for change.”

Securitas holds many prestigious security and risk management contracts in the aviation sector

Securitas holds many prestigious security and risk management contracts in the aviation sector

On that note, Göransson is adamant that the speed of technology and security solution sales will continue to be the most important strategic focus for Securitas in years to come.

“In 2014, security solutions and technology sales amounted to BSEK 6.5 and grew by 28% compared to 2013,” he asserted. “We estimate that we can continue to grow the security solutions and technology sales in at least the same range in 2015.”

New bank loan agreement

Back in early January, Securitas AB signed a new bank loan agreement (ie a Multi-Currency Revolving Credit Facility) with its core relationship banks. The new facility is initially for a five-year period, with the possibility to extend for a further two years, and is for MUSD 550 and MEUR 440. It will be used to replace the MUSD 550 and MEUR 420 Revolving Credit Facility which matures in 2016.

Co-ordinating Mandated Lead Arrangers and book-runners are Citi and SEB.

The Mandated Lead Arrangers and book-runners are Banco Bilbao Vizcaya Argentaria, Citi, Commerzbank Aktiengesellschaft, Danske Bank, DNB Bank ASA Sweden Branch, ING Belgium N.V./S.A., KBC Bank NV, Nordea Bank AB (publ), The Royal Bank of Scotland plc, Skandinaviska Enskilda Banken AB (publ), Société Générale and UniCredit Bank Austria AG.

All banks participated equally in the transaction while SEB is acting as Facility Agent.

 

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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