PR Newswire
STOCKHOLM, Nov. 7, 2023
STOCKHOLM, Nov. 7, 2023 /PRNewswire/ --
July–September 2023
- Total sales MSEK 40 047 (36 013)
- Organic sales growth 8 percent (7)
- Operating income before amortization MSEK 2 764 (2 330)
- Operating margin 6.9 percent (6.5)
- Items affecting comparability (IAC) MSEK –3 673 (–414), relating to the capital loss of MSEK –3 321 from the divestiture of Securitas Argentina, the previously announced transformation programs and the acquisition of STANLEY Security
- Earnings per share before and after dilution SEK –3.58 (2.46)*
- Earnings per share before and after dilution, before IAC, SEK 2.66 (3.24)*
- Cash flow from operating activities 84 percent (122)
- Segment reporting change, Securitas Critical Infrastructure Services moved from Securitas North America to Other
January-September 2023
- Total sales MSEK 117 707 (95 146)
- Organic sales growth 10 percent (6)
- Operating income before amortization MSEK 7 564 (5 542)
- Operating margin 6.4 percent (5.8)
- Items affecting comparability (IAC) MSEK –4 265 (–774), relating to the capital loss from the divestiture of Securitas Argentina, the previously announced transformation programs and the acquisition of STANLEY Security
- Earnings per share before and after dilution SEK 0.13 (6.70)*
- Earnings per share before and after dilution, before IAC, SEK 7.15 (8.15)*
- Reported net debt/EBITDA 4.7 (5.8), net debt/EBITDA before IAC 3.1 (3.6)**
- Cash flow from operating activities 49 percent (66)
* Number of shares outstanding has been adjusted for the rights issue completed on October 11, 2022.
For further information refer to Data per share on page 20.
** The comparative is adjusted for rights issue proceeds received in October 2022 and includes STANLEY Security's 12 months adjusted estimated EBITDA.
CHANGE IN THE BUSINESS SEGMENT REPORTING
As of the third quarter 2023, the Securitas Critical Infrastructure Services business unit has been moved from the business segment Securitas North America to Other. Comparatives have been restated and can be found at www.securitas.com/en/investors/financial-reports-and-presentations/.
Comments from the President and CEO
"Robust margin improvements driven by technology and solutions"
The margin improvement journey continued in the third quarter, where we delivered an operating margin of 6.9 percent (6.5). All three business segments contributed driven by strong performance in the technology and solutions business. Changing the business mix is a key factor to reach our financial targets, and in the third quarter technology and solutions represented 53 percent of the Group's operating result with an operating margin of 11.5 percent.
Organic sales growth was 8 percent (7) in the third quarter and real sales growth in our technology and solutions business was 7 percent, including the acquisition impact of STANLEY Security. The real sales growth in security services was driven by price increases and volume growth in our Aviation business while hampered by the divestment of Securitas Argentina in July and active portfolio management.
The third quarter marks the one-year anniversary of the acquisition of STANLEY Security. We are executing the integration and value creation processes according to plan, while we are in a period of important integration work related to systems and support services which will continue the coming quarters. The vast majority of the MUSD 50 cost synergy target has been realized, mainly in North America as planned. We have identified additional cost synergies for execution in the coming year which will continue to benefit our margin journey, although partly offset by operational cost increases from the ongoing system and support transitions. The client interest in our strengthened offering is high and we have started to realize commercial synergies, as an example we recently won a MUSD 40+ technology contract with an existing guarding client within the financial segment.
In security services, we have high focus on strengthening our client value proposition, deliver solid service quality and improving profitability in our client portfolio. We see results from these efforts throughout the Group in the third quarter. The price and wage balance remained on par for the first nine months 2023 and the general labour market situation improved somewhat.
The Group's operating cash flow in the third quarter was 84 percent (122) of the operating result with continued deleveraging of our net debt to EBITDA ratio before items affecting comparability to 3.1. We have high cash flow focus across the organization to ensure a solid outcome in the fourth quarter.
TRANSFORMING IN LINE WITH OUR STRATEGY
Leadership in technology and solutions and in digital capabilities are core to the execution of our strategy. With STANLEY Security we are number two in the global security technology market and our combined solutions offering is unique. The transformation programs we have implemented in North America and are implementing in Europe and Ibero-America fundamentally shift our digital capabilities as a company, and as communicated earlier we expect to conclude the transformation activities during 2024.
As part of our strategy, we continue to assess our business mix and presence to further sharpen our position as the leading security solutions and technology company. As a result we disposed Securitas Argentina in the third quarter with positive margin and cash flow effects going forward.
The third quarter results confirm that the strategic transformation of Securitas is on the right path. We are operating in a period of uncertain economic environment but our offering is stronger than ever and we are confident in achieving our targets.
Magnus Ahlqvist
President and CEO
PRESENTATION OF THE INTERIM REPORT
Analysts and media are invited to participate in a telephone conference on November 7, 2023, at 2.30 p.m. (CET) where President and CEO Magnus Ahlqvist and CFO Andreas Lindback will present the report and answer questions. The telephone conference will also be audio cast live via Securitas' website www.securitas.com
To follow the audio cast of the telephone conference via the web, please follow the link www.securitas.com/en/investors/webcasts-and-audiocasts/
A recorded version of the audio cast will be available at www.securitas.com/en/investors/webcasts-and-audiocasts/ after the telephone conference.
For further information, please contact:
Micaela Sjökvist, Vice President, Investor Relations +46 76 116 7443
ABOUT SECURITAS
Securitas is a world-leading safety and security solutions partner that helps make your world a safer place. Almost nine decades of deep experience means we see what others miss. By leveraging technology in partnership with our clients, combined with an innovative, holistic approach, we're transforming the security industry. With approximately 358 000 employees in 44 markets, we see a different world and create sustainable value for our clients by protecting what matters most – their people and assets.
Group financial targets
Securitas has four financial targets:
- 8–10 percent technology and solutions annual average real sales growth
- 8 percent Group operating margin by year-end 2025, with a >10 percent long-term operating margin ambition
- A net debt to EBITDA ratio below 3.0x
- An operating cash flow of 70–80 percent of operating income before amortization
FINANCIAL INFORMATION CALENDAR
February 7, 2024, 8 a.m. (CET)
Full-Year Report
January–December 2023
March 7, 2024, 2 p.m. (CET)
Capital Markets Day in Stockholm
May 8, 2024, 8 a.m. (CEST)
Interim Report
January–March 2024
May 8, 2024, 4 p.m. (CEST)
Annual General Meeting 2024 in Stockholm
July 30, 2024, approx. 1 p.m (CEST)
Interim Report
January–June 2024
November 6, 2024, 8 a.m (CET)
Interim Report
January–September 2024
For further information regarding Securitas' IR activities, refer to www.securitas.com
Securitas AB (publ.)
P.O. Box 12307, SE-102 28 Stockholm, Sweden
Visiting address:
Lindhagensplan 70
Telephone: +46 10 470 30 00
Corporate registration number: 556302–7241
This is information that Securitas AB is obliged to make public pursuant to the EU Market Abuse Regulation.The information was submitted for publication, through the agency of the contact person set out above, at 1.00 p.m. (CET) on Tuesday, November 7, 2023.
The following files are available for download:
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SOURCE Securitas
