• Total sales MSEK 28 257 (26 824)
• Organic sales growth 2 percent (5)
• Operating income before amortization MSEK 1 497 (1 475)
• Operating margin 5.3 percent (5.5)
• Items affecting comparability (IAC) MSEK –83 (–187), relating to IS/IT transformation programs
• Earnings per share SEK 2.38 (2.02)
• Earnings per share, before IAC, SEK 2.54 (2.39)
• Total sales MSEK 110 899 (101 467)
• Organic sales growth 4 percent (6)
• Operating income before amortization MSEK 5 738 (5 304)
• Operating margin 5.2 percent (5.2)
• Items affecting comparability (IAC) MSEK –209 (–455), relating to IS/IT transformation programs
• Earnings per share SEK 9.20 (8.26)
• Earnings per share, before IAC, SEK 9.61 (9.17)
• Free cash flow/net debt 0.19 (0.13)
• Proposed dividend SEK 4.80 (4.40)
Comments from the President and CEO
Organic sales growth in the Group was 2 percent (5) in the fourth quarter. Organic sales growth declined temporarily in North America and was also hampered by the previously communicated contracts losses in Europe. Extra sales were generally lower compared to the fourth quarter 2018. New sales in the Group were strong across all business segments.
Full-year organic sales growth was 4 percent (6), a decline on a strong comparative, but also reflected the slowdown in some key markets during the second half of 2019. We grew faster than the security market in general and we have the strongest offering of protective services, including security solutions and electronic security, which grew by 10 percent in 2019, to represent 21 percent of total Group sales. We recently acquired two strategically important electronic security companies, Fredon Security in Australia and Techco Security in Spain, the latter making Spain the second largest electronic security business in the Group.
The operating margin in the fourth quarter was 5.3 percent (5.5) and was primarily hampered by North America. The full-year operating margin was on par with last year. The price and wage balance improved in the fourth quarter and will remain a key focus area going into 2020.
The operating result, adjusted for changes in exchange rates, grew by 3 percent in 2019. Earnings per share, before items affecting comparability, amounted to SEK 9.61 (9.17).
We achieved the highest operating and free cash flow ever in 2019. Our strong focus on cash management remains a key priority across all business segments.
We have earlier in the year reported on an investigation in Argentina. The findings revealed that certain individuals have engaged in local business activities in violation of the Securitas Values and Ethics Code. During the investigation we have taken decisive actions, including terminations, and worked to improve our internal controls in Argentina as well as globally. As a result of the findings we have proactively contacted the appropriate authorities to ensure that we fulfill all our obligations as a responsible company. We assess that this will not have any material effect on our financial position.
Our success has been built based on good values and we have zero tolerance of misconduct of any type. I am extremely disappointed by the breach of trust displayed by certain individuals and am reinforcing our compliance program to prevent a similar situation from arising again in the future.
Driving the transformation
We continue to execute on two major transformation programs that will bring increased digitalization, efficiency and a platform for innovation. The implementation of these two programs is progressing according to plan and we expect positive impacts starting in 2021 and gradually increasing during 2022, as previously communicated.
We have presented our new management team and launched our strategy to become the Intelligent Protective Services Partner. We focus on the areas; client engagement, protective services leadership and innovation, efficiency as well as our people. Offering solutions to our clients is a core part of our strategy. We continue to build a stronger capability within electronic security to enable further growth. Our ambition is to double sales of security solutions and electronic security to BSEK 40 by 2023.
We have a strong team and we have been pursuing extensive transformation over the last 12 months. We are making good progress towards an even stronger Securitas for the long term.
Chief Executive Officer
PRESENTATION OF THE FULL YEAR REPORT
Analysts and media are invited to participate in a telephone conference on February 6, 2020 at 2:30 p.m. (CET) where President and CEO Magnus Ahlqvist and CFO Bart Adam will present the report and answer questions. The telephone conference will also be audio cast live via Securitas website. To participate in the telephone conference, please dial in five minutes prior to the start of the conference call:
US: + 1 631 913 1422
Sweden: + 46 8 566 426 51
UK: + 44 333 3000 804
Please use the following pin code for the telephone conference: 621 490 78#
To follow the audio cast of the telephone conference via the web, please follow the link
A recorded version of the audio cast will be available at
www.securitas.com/investors/webcasts after the telephone conference.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Micaela Sjökvist, Head of Investor Relations. + 46 761167443
FINANCIAL INFORMATION CALENDAR
May 7, 2020, app. 1.00 p.m. (CET) Interim Report January–March 2020
May 7, 2020, 4.00 p.m. (CET) Annual General Meeting 2020
July 29, 2020, app. 1.00 p.m. (CET) Interim Report January–June 2020
November 3, 2020, app. 1.00 p.m. (CET) Interim Report January–September 2020
For further information regarding Securitas IR activities, refer to www.securitas.com/investors/financial-calendar
Securitas has a leading position in the security services industry with a strong local and global market presence. We currently operate in 58 countries and employ 370 000 people. Our operations have been organized in a decentralized structure and include three business segments: Security Services North America, Security Services Europe and Security Services Ibero-America. We also have operations in Africa, the Middle East and Asia, which form the AMEA division. Securitas serves a wide range of customers of all sizes in a variety of industries and customer segments. Security solutions based on customer-specific needs are built through different combinations of on-site, mobile and remote guarding, electronic security, fire and safety, and corporate risk management. Securitas can respond to the unique and specific security challenges facing its customers, and tailor its offering according to their specific industry demands. Securitas is listed in the Large Cap segment at Nasdaq Stockholm.
Our strategy is to offer protective services that integrate all our areas of competence. Together with our customers, we develop optimal and cost-efficient solutions that are suited for the customers’ needs. This brings added value to the customers and results in stronger, more long-term customer relationships and improved profitability.
Group financial targets
Securitas focuses on two financial targets. The first target relates to the statement of income: average growth of earnings per share of 10 percent annually. The second target relates to the balance sheet: free cash flow in relation to net debt of at least 0.20.
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 Thursday, February 6, 2020.
Securitas AB (publ.)
P.O. Box 12307, SE-102 28 Stockholm, Sweden
Visiting address: Lindhagensplan 70
Telephone: +46 10 470 30 00. Fax: +46 10 470 31 22
Corporate registration number: 556302–7241