October - December 2022
- Operating income before amortization MSEK 2 491 (1 646)
- Operating margin 6.5 percent (5.9)
- Items affecting comparability (IAC) MSEK –312 (–356), relating to the previously announced transformation programs and the acquisition of STANLEY Security
- Earnings per share before and after dilution SEK 2.47 (1.70)*
- Earnings per share before and after dilution, before IAC, SEK 2.63 (2.37)*
- Cash flow from operating activities 83 percent (131)
January - December 2022
- Total sales MSEK 133 237 (107 700)
- Organic sales growth 7 percent (4)
- Operating income before amortization MSEK 8 033 (5 978)
- Operating margin 6.0 percent (5.6)
- Items affecting comparability (IAC)
- MSEK –1 086 (–871), relating to the previously announced transformation programs and the acquisition of STANLEY Security
- Earnings per share before and after dilution SEK 9.20 (7.14)*
- Earnings per share before and after dilution, before IAC, SEK 10.77 (8.66)*
- Reported net debt/EBITDA 4.0 (1.9), adjusted net debt/EBITDA ratio 3.7 **
- Cash flow from operating activities 71 percent (93)
- Proposed dividend for 2022 of SEK 3.45 per share, distributed in
* Number of shares outstanding have been adjusted for the rights issue completed on October 11, 2022.
For further information refer to Data per share on page 22.
** Includes STANLEY Security’s 12 months adjusted estimated EBITDA
Comments from the President and CEO
"A year of strong performance and strategic achievements"
Securitas delivered solid growth, profitability and cash flow in the fourth quarter. We target to become the most attractive security and solutions partner for our clients, and together with STANLEY Security, we know we are on track. The integration and value creation processes with STANLEY Security are proceeding very well.
We concluded the year with organic sales growth of 9 percent in the fourth quarter, with good commercial traction in all business segments. Organic sales growth in North America continued to increase in the quarter and due to the previously announced renewal and expanded scope of a significant client contract we expect continued improvement in the first quarter of 2023.
Technology and solutions sales had real sales growth of 80 percent (10) in the fourth quarter, and 15 percent (10) exluding STANLEY Security, now representing 32 percent (23) of Group sales.
The operating margin improved to 6.5 percent (5.9) and the operating result, adjusted for changes in exchange rates, increased by 39 percent in the fourth quarter, with a material contribution from STANLEY Security and a good performance in the legacy business. The STANLEY Security business continued to perform well, and we are ahead of schedule in North America thanks to solid execution of the integration and value creation plan.
The operating margin in North America exceeded 8 percent for the first time, with strong improvement also excluding STANLEY Security. In Europe and Ibero-America, the operating margins improved on a full-year basis, but were flat in the quarter. Business conditions in Europe remain challenging as a result of the labor shortage.
The Group's operating margin continues to improve by realizing benefits from our transformation programs and execution of the value creation plan from the acquired STANLEY Security business, as well as from pursuing active management of lower profitability contracts. We continue with disciplined pricing in the guarding business and have continued to protect a positive price and wage balance in a high inflationary environment.
The Group's operating cash flow was solid in the quarter at 83 percent of the operating result. Maintaining strong cash flows remains a key priority to further reducing our leverage position following the acquisition of STANLEY Security.
CREATING THE FUTURE OF SECURITAS
In North America we see significant value in the day-to-day operations through increased data-driven efficiency, productivity and financial transparency as a result of the transformation program, which was also an important enabler of the positive operating margin trend.
We continue to execute the business transformation program in Europe, although with a small delay as we calibrate the program with the STANLEY Security integration plan to optimize costs and benefits. The corresponding program in Ibero-America is on track and we expect to realize financial and operational benefits in the coming years.
While the macroeconomic environment is uncertain, we are continuously working to ensure we are prepared to manage more challenging times. One of our strengths as a company is our resilient business model with long-term client relationships and the continuous need for security throughout the economic cycle. Combining our talent and expertise with STANLEY Security has set us up for higher growth thanks to an outstanding client offering and we expect significant operating margin enhancement opportunities with a target to reach 8 percent by the end of 2025. Our margin improvement in 2022 gives us confidence that we are on the right track, and we will continue to strategically assess our footprint and business mix to further sharpen our performance and position.
In 2022, we also took significant steps in our sustainability agenda as we became the first major company in our industry to commit to the Science Based Targets initiative.
I would like to thank our clients and the Securitas team for their tremendous work during a challenging year of geopolitical uncertainty and inflationary pressure. We are developing a stronger client offering and position in the market, and along with solid client relationships, this enables us to improve the returns for our shareholders in the coming years.
President and CEO