Securitas AB Interim Report January-September 2021

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Securitas AB Interim Report January–September 2021.

JULY–SEPTEMBER 2021

  • Total sales MSEK 27 338 (26 501)
  • Organic sales growth 4 percent (0)
  • Operating income before amortization MSEK 1 605 (1 327)
  • Operating margin 5.9 percent (5.0)
  • Items affecting comparability (IAC) MSEK –120 (–112), relating to the previously announced transformation programs, the cost-savings program in the Group and a one-off payment from AFA Insurance of MSEK 114
  • Earnings per share SEK 2.59 (2.08)
  • Earnings per share, before IAC, SEK 2.82 (2.31)
  • Cash flow from operating activities 75 percent (199)

JANUARY–SEPTEMBER 2021

  • Total sales MSEK 79 651 (81 477)
  • Organic sales growth 4 percent (0)
  • Operating income before amort­iza­tion MSEK 4 332 (3 488)
  • Operating margin 5.4 percent (4.3)
  • Items affecting comparability (IAC) MSEK –515 (–218), relating to the ­previously announced transform­ation programs, the cost-savings program in the Group and a one-off payment from AFA Insurance of MSEK 114
  • Earnings per share SEK 6.54 (5.18)
  • Earnings per share, before IAC, SEK 7.57 (5.63)
  • Net debt/EBITDA 2.1 (1.9)
  • Cash flow from operating activities 79 percent (163)

Comments from the President and CEO

“Full focus on ­margin enhancement as the impact from covid reduces”

WE ARE CONTINUING TO EXECUTE ON OUR STRATEGY, AND HAVE DELIVERED SEVERAL QUARTERS WITH STRONG PERFORMANCE

  • We have sharpened the business over the last year through focus on profitability and cost management and execution of the transformation programs
  • We are managing the remaining ­effects of covid with strong perform­ance across all business segments despite decreasing corona-related extra sales
  • We are seeing positive developments in our electronic security and ­solutions ­business and accelerating growth is a priority going forward

PROFITABLE GROWTH IN FOCUS

The Group’s organic sales growth in the third quarter was 4 percent (0), with all business segments ­contributing to the improvement. The gradual ­business recovery from the corona pandemic continued in the third quarter, with commercial activity and sales ­momentum picking up in all of our business segments, including ­airport security.

Sales of security solutions and electronic security had a real sales growth of 7 percent (5) in the third quarter. We completed two strategic acqui­sitions within electronic security in the quarter, Protection One in Germany and Tepe Güvenlik in Turkey, both of which will greatly enhance our capabilities in two important ­markets. We are actively exploring further acquisition opportun­ities within electronic security, and we keep investing in our solutions organ­iza­tion to further accelerate organic sales growth in this business line.

The operating result for the Group, ­adjusted for changes in exchange rates, increased by 24 percent in the third quarter and the operating ­margin was 5.9 percent (5.0). The improving business fundamentals and active portfolio management strengthened all the business segments, and the cost-savings program initiated during 2020 also had a positive impact. In the quarter we had normal ­levels of provisioning compared to the increased levels last year.

Total price adjustments in the Group were on par with wage cost increases year to date. Labor ­shortage and wage pressure remain a challenge. Maintaining the price and wage ­balance is a key priority throughout the Group going into 2022.

Over the past year we have exited from markets with ­limited business opportun­ities and we have ­actively renegotiated or exited low margin contracts. We see tangible results in the airport business as well as in ­several Latin American ­countries.

The Group delivered a good cash flow in the third quarter. 
 
STRONGER AFTER MANAGING COVID

The corona pandemic is still present in our day-to-day operations as we close the third quarter of 2021. While un­certainty remains regarding the long-term consequences of the pandemic, we are coming out stronger thanks to having taken action early.

COMMITTED TO TRANSFORMATION TARGETS

We are beginning to reap the benefits of the transformation program in North America which was initiated in 2019, and see positive contribution to the operating margin. The business ­transformation in Europe and Ibero-America is also progressing accord­ing to plan. We are confident that these programs will improve the business mix to achieve the associated margin targets.

The strength of the Securitas team and the progress of our business transform­ation are deciding factors of our strong performance in the first nine months of 2021.

Magnus Ahlqvist
President and CEO

PRESENTATION OF THE INTERIM REPORT

Analysts and media are invited to participate in a telephone conference on October 29, 2021, at 2:30 p.m. (CET) where President and CEO Magnus Ahlqvist and CFO Andreas Lindback 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 www.securitas.com/investors/webcasts.

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 76 116 7443