COMMENTS FROM THE PRESIDENT AND CEO
Organic sales growth continues to show a positive trend and all business segments improved compared to the first half last year. Primarily supported by the US, the organic sales growth reached 3 percent in the second quarter. In France we are showing positive organic sales growth in the second quarter, while organic sales growth in Spain continues to be negative. Latin America continues to show strong organic sales growth.
Net income improved in the first half year
In real terms, the operating result was slightly behind last year, while earnings per share improved with 3 percent. The operating margin in Security Services North America was on the same level as last year and Security Services Europe is 0.1 percent behind. The positive development in Security Solutions and Technology continued in Spain but is not yet sufficient to mitigate the difficult conditions in the guarding business and the labor related charges imposed by the Spanish Government in December last year. Corrective actions are continuously taken to adapt to the reduced guarding sales.
Sales of security solutions and technology gradually increasing
In 2012, sales of security solutions and technology represented approximately 6 percent of Group sales. We have set a target to triple this share of sales by the end of 2015. We continue to invest in resources within security solutions and technology and the share of sales run rate in the second quarter 2014 was 9 percent.
Changing market dynamics creating opportunity for growth
Due to current market dynamics and a gradual increase of the use of technology in security solutions, the security market in mature markets is no longer expected to grow 1 to 2 percent faster than GDP as it has historically, but rather at the same pace as GDP. In the future, this trend could be improved through increased outsourcing of currently insourced guarding activities and by allowing the private security industry to take over services performed by public authorities and governments.
The degree to which technology is being integrated into security solutions varies from country to country in Securitas’ markets. However, as the pace accelerates, we are confident that we will be able to gain markets shares by having a stronger and more cost-efficient offering than many traditional guarding companies. We have already seen proof of this in markets where we are well equipped to offer security solutions, where we will be able to grow faster than the security market average.
President and Chief Executive Officer
PRESENTATION OF THE INTERIM REPORT
Analysts and media are invited to participate in a telephone conference on August 5, 2014 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 is a knowledge leader in security and operates in North America, Europe, Latin America, the Middle East, Asia and Africa. The organization is flat and decentralized with three business segments: Security Services North America, Security Services Europe and Security Services Ibero-America. Securitas serves a wide range of customers in a variety of industries and customer segments, and the customers vary from the shop on the corner to global multibillion industries. The services provided are specialized guarding and mobile services, monitoring, technical solutions and consulting and investigations. Securitas can respond to the unique and specific security challenges facing its customers, and tailor its offering according to their specific industry demands. Securitas employs close to 310 000 people in 52 countries. Securitas is listed in the Large Cap segment at NASDAQ OMX Stockholm.
Group financial targets
Securitas focuses on two financial targets. The first target relates to the statement of income: an 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.
Our strategy is to offer complete security solutions that integrate all of 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.
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 Tuesday, August 5, 2014.