Financial Control

Securitas has a financial framework that continously measures the Group’s performance, from the branch offices to Group level. The purpose of the framework is enable implementation of strategies and to guide Securitas’ employees and organization to achieve their objectives.

The Securitas financial model includes, among other things, a number of key figures, familiar to all managers. There are six key figures and they are called the Six Fingers. Six Fingers puts the focus on the business factors that influence profit, not on the profit itself, and on factors that have a clear relationship to the operations. 

Six Fingers gives managers a better understanding of the cause and effect relationships behind  their own operations profitability, and contributes to establishing precision in the decisions that must be quickly made to improve profitability. Our most important key figures can be measured on all company levels and constitute three groups related to volume, efficiency and capital usage.

Three Key Figures Relating to Volume

• New sales from customer contracts are new signed contracts that will increase the monthly fixed sales.
• Net change in the customer contract portfolio, which includes new contracts that have started, plus increased sales in existing contracts, less terminated customer contracts and reduced sales in  existing contracts. Price changes are measured separately and added to net change to determine the period’s closing balance of the contract portfolio.

Total sales include contract-based sales and short-term assignments.

Two Key Figures Relating to Efficiency

• The Gross margin is defined as total sales less direct expenses as a percentage of total sales.
• Indirect expenses focus on the organization and include administration, that is costs of branch, area and regional/country offices. The gross income, less indirect expenses, equals operating income before amortization of acquisition-related intangible assets. When this is expressed as a percentage of total sales, it indicates the Group’s operating margin, which in the Securitas financial model comes before acquisition-related items.

One Key Figure Relating to Capital Usage

Securitas’ operations in general are not capital-intensive – accounts receivable tie up the most capital. The sixth key figure is Days of sales outstanding (DSO). Payment terms and effective collection procedures are decisive in determining how much capital is tied up in accounts receivable. These key figures followed up on an ongoing basis at all levels of the organization.