Securitas AB Full Year Report January–December 2014
OCTOBER–DECEMBER 2014<br/><br/>• Total sales MSEK 18 983 (16 725)<br/><br/>• Organic sales growth 5 percent (1)<br/><br/>• Operating income before amortization MSEK 1 017 (879)<br/><br/>• Operating margin 5.4 percent (5.3)<br/><br/>• Earnings per share SEK 1.74 (1.35)<br/><br/>JANUARY–DECEMBER 2014<br/><br/>• Total sales MSEK 70 217 (65 700)<br/><br/>• Organic sales growth 3 percent (1)<br/><br/>• Operating income before amortization MSEK 3 505 (3 329)<br/><br/>• Operating margin 5.0 percent (5.1)<br/><br/>• Earnings per share SEK 5.67 (5.07)<br/><br/>• Free cash flow/net debt 0.18 (0.22)<br/><br/>• Proposed dividend SEK 3.00 (3.00)
COMMENTS FROM THE PRESIDENT AND CEO
Organic sales growth continued to show a positive trend driven by successful sales efforts, our strategy of security solutions and technology offerings and an improved macro economic climate in the USA. All business segments improved compared with last year and the organic sales growth reached 5 percent in the fourth quarter.
Earnings per share improved In real terms earnings per share improved with 8 percent in 2014. The operating income improved in the quarter as well as for the full year compared to last year. The re-organization in Spain has been implemented during the fourth quarter for which a one-off restructuring cost of MSEK –19 (MEUR –2) was recognized.
Affordable Care Act (ACA) costs mitigated The employer mandate of the ACA has taken effect on January 1, 2015 in the USA. We are compliant with the Affordable Care Act, and we do not expect any negative impact on our results as we have been able to mitigate the cost impact. Less clients than anticipated at the outset have chosen the security solutions alternative, opting rather for rate increases or some reductions of the security scope. We estimate a positive net organic sales growth effect, coming from the ACA implementation, of approximately 1 percent in 2015 in Security Services North America.
Continued growth in security solutions and technology sales In 2012, sales of security solutions and technology represented 6 percent of Group sales. Our target is to increase it to a run rate of 18 percent by the end of 2015 and in the fourth quarter it reached 10 percent.
Significant progress has been made since early 2012 and many markets have contributed well to this achievement. Security Services Ibero-America is over-achieving their target, Security Services Europe is close to theirs but Security Services North-America is lagging behind. This is mainly due to the good organic sales growth in guarding contracts and the outcome of the Affordable Care Act (ACA) in the USA. Consequently this impacts the ability of the Group to reach the target of 18 percent run rate by the end of 2015, which is likely out of reach, although we will have come a long way and internally the target has been a strong driver for change.
The speed of technology and security solution sales will continue to be the most important strategic focus of Securitas in years to come. In 2014, security solutions and technology sales amounted to BSEK 6.5 and grew with 28 percent compared to 2013, and we estimate that we can continue to grow the security solution and technology sales in at least the same range in 2015.
Alf Göransson President and Chief Executive Officer
PRESENTATION OF THE FULL YEAR REPORT
Analysts and media are invited to participate in a telephone conference on February 5, 2015 at 09:30 a.m. (CET) where Securitas CEO Alf Göransson will present the report and answer questions. The telephone conference will also be audio cast live via Securitas web. No information meeting will take place at Securitas headquarters at Lindhagensplan in Stockholm.
To participate in the telephone conference, please dial in five minutes prior to the start of the conference call:
The United States: + 1 855 269 2605
Sweden: + 46 (0) 8 519 993 55
United Kingdom: + 44 (0) 203 194 0550
To follow the audio cast of the telephone conference via the web, please follow the link www.securitas.com/webcasts. A recorded version of the audio cast will be available at www.securitas.com/webcasts after the telephone conference.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Micaela Sjökvist, Head of Investor Relations, + 46 10 470 3013
Gisela Lindstrand, Senior Vice President Corporate Communications and Public Affairs, + 46 10 470 3011
Securitas AB discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 08.00 a.m. (CET) on Thursday, February 5, 2015.