- Total sales MSEK 28 598 (25 814)
- Organic sales growth 4 percent (0)
- Operating income before amortization MSEK 1 452 (1 256)
- Operating margin 5.1 percent (4.9)
- Items affecting comparability (IAC) MSEK –134 (–136), mainly relating to the previously announced transformation programs
- Earnings per share SEK 2.30 (1.86)
- Earnings per share, before IAC, SEK 2.57 (2.11)
- Net debt/EBITDA 2.0 (2.1)
- Cash flow from operating activities –9 percent (102)
Comments from the President and CEO
“A robust start to the year with continued margin improvement”
We continue to execute on our strategy to be the leading security solutions partner to our clients with world-leading technology and expertise, and this is generating results. We recorded the highest first quarter operating margin in more than a decade, with record levels in North America and Ibero-America.
We started the year with 4 percent organic sales growth in the first quarter, with strong organic sales growth in Europe and Ibero-America. As expected, organic sales growth in North America came in negative due to the previously communicated contract terminations and lower levels of corona-related extra sales. The overall conditions in the business environment further normalized in the first quarter compared to the same period last year.
Increased market activity and client interactions generated good momentum in the business including 9 percent sales growth of security solutions and electronic security in the Group, now representing 23 percent (22) of Group sales.
The price and wage balance was successfully kept on par and we are well positioned to maintain this balance. The operating result for the Group, adjusted for changes in exchange rates, increased by 8 percent (30) in the first quarter and the operating margin improved to 5.1 percent (4.9). Strong performance in North America and Ibero-America together with improving sales of security solutions and electronic security across all segments contributed to the positive margin development, as did our continued high focus on profitability through active portfolio management, our transformation programs and general cost control. This enabled us to offset the challenges in the quarter with labor shortages in several markets and increased sickness costs in Europe. Adjusted for this impact, the underlying margin development in Europe was well ahead of last year.
It is with deep regret that we have witnessed the development in Ukraine and my thoughts are with everyone affected. We do not have any business in either Russia or Ukraine but we have organized company-wide activities to provide individual and company contributions to e.g. the Red Cross and UNHCR. I would like to emphasize the outstanding support provided by many Securitas colleagues and their families in neighboring countries to help a large number of refugees from Ukraine.
CREATING THE NEW SECURITAS
We are realizing value in the transformation program in North America which is evidenced in the operating margin development. We are now executing on the remaining business transformation programs in Europe and Ibero-America and we expect to realize strong financial and operational benefits in the years to come. These transformation programs will provide us with a significantly stronger foundation to enhance client value and drive operating margin improvement.
We have the ambition to close the acquisition of Stanley Security towards the end of the second quarter 2022. This acquisition is transformational for Securitas as well as the security industry. The integration and value creation planning is ongoing and on track.
When Stanley is integrated and the transformation programs are fully implemented, we will have built a new Securitas – a modern, digitized and innovative security solutions partner for our clients with a structurally higher margin profile.