Interim Report
Q3 2023 | January-September 2023
Securitas ABInterim Report Q3 2023 | January-September 2023 | 2 |
40 047
Total sales, MSEK
6.9%
Operating margin
-3.58
Earnings per share, SEK
July-September
2023
- Total sales MSEK 40 047 (36 013)
- Organic sales growth 8 percent (7)
- Operating income before amortization MSEK 2 764 (2 330)
- Operating margin 6.9 percent (6.5)
- Items affecting comparability (IAC) MSEK -3 673 (-414), relating to the capital loss of MSEK -3 321 from the divestiture of Securitas Argentina, the previously announced transformation programs and the acquisition of STANLEY Security
- Earnings per share before and after dilution SEK -3.58 (2.46)*
- Earnings per share before and after dilution, before IAC, SEK 2.66 (3.24)*
- Cash flow from operating activities 84 percent (122)
- Segment reporting change, Securitas Critical Infrastructure Services moved from Securitas North America to Other
JANUARY-SEPTEMBER 2023
- Total sales MSEK 117 707 (95 146)
- Organic sales growth 10 percent (6)
- Operating income before amortiza- tion MSEK 7 564 (5 542)
- Operating margin 6.4 percent (5.8)
-
Items affecting comparability (IAC) MSEK -4 265 (-774), relating to the capital loss from the divestiture
of Securitas Argentina, the previously announced transformation programs
and the acquisition of STANLEY Security
- Earnings per share before and after dilution SEK 0.13 (6.70)*
- Earnings per share before and after dilution, before IAC, SEK 7.15 (8.15)*
- Reported net debt/EBITDA 4.7 (5.8), net debt/EBITDA before IAC 3.1 (3.6)**
- Cash flow from operating activities 49 percent (66)
- Number of shares outstanding has been adjusted for the rights issue completed on October 11, 2022. For further information refer to Data per share on page 20.
- The comparative is adjusted for rights issue proceeds received in October 2022 and includes STANLEY Security's 12 months adjusted estimated EBITDA.
CONTENTS | |||
Comments from the President and CEO | 3 | Risks and uncertainties | 14 |
January-September summary | 4 | Parent Company operations | 15 |
Group development | 6 | Annual General Meeting 2024 | 16 |
Development in the Group's business segments | 8 | Consolidated financial statements | 17 |
Cash flow | 11 | Segment overview | 21 |
Capital employed and financing | 12 | Notes | 23 |
Acquisitions and divestitures | 13 | Parent Company | 31 |
Other significant events | 14 | Financial information | 32 |
Securitas ABInterim Report Q3 2023 | January-September 2023 | 3 |
Comments from
the President and CEO
"Robust margin improvements driven by technology and solutions"
The margin improvement journey continued in the third quarter, where we delivered an operating margin of
6.9 percent (6.5). All three business segments contributed driven by strong performance in the technology and solutions business. Changing the business mix is a key factor to reach
our financial targets, and in the third quarter technology and solutions
represented53 percent of the Group's operating result with an operating
margin of 11.5 percent.
Organic sales growth was 8 percent
- in the third quarter and real sales growth in our technology and solutions business was 7 percent, including the acquisition impact of STANLEY Security. The real sales growth in security services was driven by price increases and volume growth in our Aviation business while hampered by the divestment of Securitas Argentina in July and active portfolio manage- ment.
The third quarter marks the one- year anniversary of the acquisition of STANLEY Security. We are executing the integration and value creation processes according to plan, while we are in a period of important integration work related to systems and support services which will continue the coming quarters. The vast majority of the MUSD 50 cost synergy target has been realized, mainly in North America as planned. We have identified additional cost synergies for execution in
the coming year which will continue to benefit our margin journey, although partly offset by operational cost increases from the ongoing system and support transitions. The client interest in our strengthened offering is high and we have started to realize commercial synergies, as an example we recently won a MUSD 40+ technology contract with an existing guarding client within the financial segment.
In security services, we have high focus on strengthening our client value proposition, deliver solid service quality and improving profitability in our client portfolio. We see results from these efforts throughout the Group in the third quarter. The price and wage balance remained on par for the first nine months 2023 and the general labour market situation improved somewhat.
The Group's operating cash flow in the third quarter was 84 percent (122) of the operating result with continued deleveraging of our net debt to EBITDA ratio before items affecting compar ability to 3.1. We have high cash flow focus across the organization to ensure a solid outcome in the fourth quarter.
TRANSFORMING IN LINE WITH OUR STRATEGY
Leadership in technology and solutions and in digital capabilities are core to the execution of our strategy. With STANLEY Security we are number two in the global security technology market and our combined solutions
offering is unique. The transformation programs we have implemented in North America and are implementing in Europe and Ibero-America funda mentally shift our digital capabilities as a company, and as communicated earlier we expect to conclude the transformation activities during 2024.
As part of our strategy, we continue to assess our business mix and presence to further sharpen our position as the leading security solutions and technology company. As a result we disposed Securitas Argentina in the third quarter with positive margin and cash flow effects going forward.
The third quarter results confirm that the strategic transformation of Securitas is on the right path. We are operating in a period of uncertain
economic environment but our offering is stronger than ever and we are confident in achieving our targets.
Magnus Ahlqvist
President and CEO
Securitas ABInterim Report Q3 2023 | January-September 2023 | 4 |
January-September summary
ACQUISITION OF STANLEY SECURITY The acquisition of STANLEY Security has a significant impact on Securitas' reporting that should be considered when reading this report.
STANLEY Security was consolidated as of July 22, 2022, and is consequently included in the first nine months
2023 income statement. In the first nine months 2022 income statement STANLEY Security is included from the date of consolidation.
STANLEY Security is according to Securitas' definition of organic sales
growth excluded from the calculation of this key ratio during the first 12 months from the acquisition date, which means from July 22, 2022, until July 22, 2023. Real sales growth includes the contribution from STANLEY Security as acquired sales are included in the determination of this key ratio.
In the balance sheet STANLEY Security is included as of September 30, 2023, September 30, 2022, and December 31, 2022.
STANLEY Security is included in the operating and free cash flow in
the first nine months 2023. In the oper ating and free cash flow for 2022,
the contribution from STANLEY Security is attributable to the period July 22 to December 31, 2022.
In our segment reporting STANLEY Security is included in Securitas North America and Securitas Europe.
CHANGE IN THE BUSINESS SEGMENT REPORTING
As of the third quarter 2023, the Securitas Critical Infrastructure Services business unit has been moved from the business segment Securitas North America to Other. Comparatives have been restated and can be found at www.securitas.com/en/investors/financial-reports-and-presentations/.
FINANCIAL SUMMARY
Q3 | Change, % | 9M | Change, % | Full year | Change, % | ||||||
MSEK | 2023 | 2022 | Total | Real | 2023 | 2022 | Total | Real | 2022 | Total | |
Sales | 40 047 | 36 013 | 11 | 8 | 117 707 | 95 146 | 24 | 19 | 133 237 | 24 | |
Organic sales growth, % | 8 | 7 | 10 | 6 | 7 | ||||||
Operating income before | |||||||||||
amortization | 2 764 | 2 330 | 19 | 16 | 7 564 | 5 542 | 36 | 31 | 8 033 | 34 | |
Operating margin, % | 6.9 | 6.5 | 6.4 | 5.8 | 6.0 | ||||||
Amortization of acquisition- | |||||||||||
related intangible assets | -157 | -137 | -468 | -259 | -414 | ||||||
Acquisition-related costs | -4 | -20 | -7 | -45 | -49 | ||||||
Items affecting comparability1) | -3 673 | -414 | -4 265 | -774 | -1 086 | ||||||
Operating income after | |||||||||||
amortization | -1 070 | 1 759 | -161 | -164 | 2 824 | 4 464 | -37 | -43 | 6 484 | 38 | |
Financial income and expenses | -518 | -266 | -1 487 | -422 | -758 | ||||||
Income before taxes | -1 588 | 1 493 | -206 | -216 | 1 337 | 4 042 | -67 | -75 | 5 726 | 32 | |
Net income for the period | -2 053 | 1 081 | -290 | -300 | 88 | 2 942 | -97 | -105 | 4 316 | 38 | |
Earnings per share, SEK2) | -3.58 | 2.46 | -246 | -253 | 0.13 | 6.70 | -98 | -104 | 9.20 | 29 | |
Earnings per share, before items | 2.66 | 3.24 | -18 | -25 | 7.15 | 8.15 | -12 | -18 | 10.77 | 24 | |
affecting comparability, | SEK2) | ||||||||||
Cash flow from operating | |||||||||||
activities, % | 84 | 122 | 49 | 66 | 71 | ||||||
Free cash flow | 1 525 | 2 438 | 1 440 | 2 247 | 3 422 | ||||||
Net debt to EBITDA ratio | - | - | 4.7 | 5.8 | 4.0 |
- Refer to note 7 on page 27 for further information.
- Number of shares outstanding has been adjusted for the rights issue completed on October 11, 2022. For further information refer to Data per share on page 20.
Securitas ABInterim Report Q3 2023 | January-September 2023 | January-September summary | 5 |
ORGANIC SALES GROWTH AND OPERATING MARGIN DEVELOPMENT PER BUSINESS SEGMENT*
Organic sales growth | Operating margin | ||||||||||
Q3 | 9M | Q3 | 9M | ||||||||
% | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||
Securitas North America** | 5 | 4 | 7 | -1 | 9.2 | 8.7 | 8.9 | 8.0 | |||
Securitas Europe | 13 | 7 | 13 | 8 | 7.0 | 6.6 | 6.0 | 5.7 | |||
Securitas Ibero-America | 5 | 16 | 18 | 15 | 7.0 | 6.1 | 6.2 | 5.9 | |||
Group | 8 | 7 | 10 | 6 | 6.9 | 6.5 | 6.4 | 5.8 |
- The business segments have been renamed as of May 3, 2023.
- The Securitas Critical Infrastructure Services business unit has been moved from Securitas North America into Other as of the third quarter 2023. The comparatives have been restated.
FINANCIAL SUMMARY PER BUSINESS LINE
Operating income | % of Group | ||||||||||||||||
Sales, | Real sales growth, | before amortization, | Operating margin, | operating income | |||||||||||||
MSEK | % | MSEK | % | % of Group sales | before amortization | ||||||||||||
Business line | Q3 2023 | 9M 2023 | Q3 2023 | 9M 2023 | Q3 2023 | 9M 2023 | Q3 2023 | 9M 2023 | Q3 2023 | 9M 2023 | Q3 2023 | 9M 2023 | |||||
Security services | 26 508 | 77 832 | 7 | 10 | 1 419 | 3 852 | 5.4 | 4.9 | 66 | 66 | 51 | 51 | |||||
Technology and | |||||||||||||||||
solutions | 12 782 | 37 567 | 14* | 48* | 1 465 | 3 990 | 11.5 | 10.6 | 32 | 32 | 53 | 53 | |||||
Risk management | |||||||||||||||||
services and costs | |||||||||||||||||
for Group functions | 757 | 2 308 | - | - | -120 | -278 | - | - | 2 | 2 | -4 | -4 | |||||
Group | 40 047 | 117 707 | 8 | 19 | 2 764 | 7 564 | 6.9 | 6.4 | 100 | 100 | 100 | 100 |
* Real sales growth including STANLEY Security for the comparable period (consolidated as of July 22, 2022) was 7 percent in the third quarter 2023 and 10 percent for the first nine months 2023.
For further information regarding the revenue from the Group's business lines, refer to note 3.
Securitas ABInterim Report Q3 2023 | January-September 2023 | 6 |
Group development
QUARTERLY SALES DEVELOPMENT
MSEK | % | |||
40 000 | 18 | |||
39 909 | 40 047 | |||
36 000 | 38091 | 37 751 | 14 | |
36013 | ||||
32 000 | 10 | |||
28 000 | 6 | |||
24 000 | 2 | |||
20 000 | -2 | |||
Q3 | Q4 | Q1 | Q2 | Q3 |
2022 | 2022 | 2023 | 2023 | 2023 |
Organic sales growth, %
QUARTERLY OPERATING INCOME DEVELOPMENT
MSEK | % | ||||
3 000 | 7.5 | ||||
2 400 | 2 620 | 2 764 | 7.0 | ||
2491 | |||||
2330 | |||||
2180 | |||||
1 800 | 6.5 | ||||
1 200 | 6.0 | ||||
600 | 5.5 | ||||
0 | 5.0 | ||||
Q3 | Q4 | Q1 | Q2 | Q3 | |
2022 | 2022 | 2023 | 2023 | 2023 | |
Operating margin, % |
JULY-SEPTEMBER 2023
SALES DEVELOPMENT
Sales amounted to MSEK 40 047
(36 013) and organic sales growth to
8 percent (7).
Securitas North America had 5 percent
-
organic sales growth, primarily from the Guarding business unit but also supported by the Technology busi- ness unit. Securitas Europe showed
13 percent (7), driven by strong price increases across the business and good growth within technology and solutions and the airport security business. Organic sales growth in Securitas Ibero-America was 5 percent (16), a decline due to the divestiture
of Securitas Argentina. Extra sales in the Group amounted to 12 percent (13) of total sales.
Real sales growth, including acquisitions and adjusted for changes in exchange rates, was 8 percent (19).
Technology and solutions sales amounted to MSEK 12 782 (10 976) or 32 percent (30) of total sales in the quarter. Real sales growth, including acquisitions and adjusted for changes in exchange rates, was 14 percent (71), supported by good sales growth in both technology and solutions. Real sales growth including STANLEY Security for the comparable period (consolidated as of July 22, 2022) was 7 percent.
OPERATING INCOME BEFORE AMORTIZATION Operating income before amortization was MSEK 2 764 (2 330) which, adjusted for changes in exchange rates, represented a real change of 16 percent (30).
The Group's operating margin was
6.9 percent (6.5), an improvement sup- ported by all three business segments driven by technology and solutions.
Other was positively impacted by good cost control of Group costs and nega tively impacted by Securitas Critical Infrastructure Services.
OPERATING INCOME
AFTER AMORTIZATION Amortization of acquisition-relatedintangible assets amounted to MSEK -157 (-137).
Acquisition-related costs totaled MSEK -4(-20). For further information refer to Acquisitions and divestitures on page 13 and note 6.
Items affecting comparability were MSEK -3 673 (-414), whereof MSEK -3 321 (0) related to the capital loss from the divestiture of Securitas Argentina where the vast majority was accumulated non-cash foreign exchange translation losses. Further more, MSEK -181(-226) related to the acquisition of STANLEY Security and MSEK -171(-188) were related to the transformation programs in Europe and Ibero-America. For further infor mation refer to note 7.
FINANCIAL INCOME AND EXPENSES Financial income and expenses amounted to MSEK -518 (-266),whereof MSEK -487 (-170)related to financing of the STANLEY Security acquisition. The impact from IAS 29 hyperinflation was MSEK 108 (34) relating to the net monetary gain. For further information refer to note 8. Financial income and expense also include foreign currency gains, net, of MSEK 80 (20). Interest income and expense excluding the financing related to STANLEY Security increased due to increased interest rates.
INCOME BEFORE TAXES
Income before taxes amounted to MSEK -1 588 (1 493).
TAXES, NET INCOME AND
EARNINGS PER SHARE
The Group's tax rate was -29.3 percent (27.6). The tax rate for July-September 2023 was affected by the capital loss from the divestiture of Securitas Argentina. Excluding the capital loss the tax rate was 26.8 percent. The tax rate before tax on items affecting compar ability was 26.9 percent (27.3).
Securitas ABInterim Report Q3 2023 | January-September 2023 | Group development | 7 |
Net income was MSEK -2 053 (1 081).
Earnings per share before and after dilution amounted to SEK -3.58 (2.46). Earnings per share before and after dilution and before items affecting comparability amounted to SEK 2.66 (3.24).
JANUARY-SEPTEMBER 2023
SALES DEVELOPMENT
Sales amounted to MSEK 117 707
(95 146) and organic sales growth to
10 percent (6).
Securitas North America had 7 percent (-1) organic sales growth driven by the Guarding and Technology business units. Securitas Europe showed 13 percent (8), driven by strong price increases across the business, and supported by increased installation sales and good portfolio growth within solutions and in the airport security business. Securitas Ibero-America reported 18 percent (15), driven by price increases, mainly in the hyperinflation- ary environment in Argentina in the first six months before the divestiture of Securitas Argentina. Extra sales in the Group amounted to 12 percent (13) of total sales.
Real sales growth, including acquisi tions and adjusted for changes in exchange rates, was 19 percent (10).
Technology and solutions sales amounted to MSEK 37 567 (24 636) or 32 percent (26) of total sales in the first nine months. Real sales growth, including acquisitions and adjusted for changes in exchange rates, was 48 percent (31) with the acquired STANLEY Security as the main con- tributor. Real sales growth including STANLEY Security for the comparable period (consolidated as of July 22, 2022) was 10 percent.
OPERATING INCOME BEFORE AMORTIZATION Operating income before amortization was MSEK 7 564 (5 542) which,
adjusted for changes in exchange rates, represented a real change of 31 percent (16).
The Group's operating margin was
6.4 percent (5.8), an improvement supported by all three business seg- ments, and mainly driven by technology and solutions including the acquired STANLEY Security business in North America and Europe. Price increases in the Group were on par with wage cost increases in the first nine months.
OPERATING INCOME
AFTER AMORTIZATION Amortization of acquisition-relatedintangible assets amounted to MSEK -468 (-259),whereof MSEK -275 (-72)related to the STANLEY Security acquisition.
Acquisition-related costs totaled MSEK -7(-45). For further information refer to Acquisitions and divestitures on page 13 and note 6.
Items affecting comparability were MSEK -4 265 (-774), whereof MSEK -3 321 (0) related to capital loss from the divestiture of Securitas Argentina where the vast majority was accumulated non-cash foreign exchange translation losses. Further more, MSEK -466(-296) related to the acquisition of STANLEY Security and MSEK -478(-478) were related to the transformation programs in Europe and Ibero-America. For further infor mation refer to note 7.
FINANCIAL INCOME AND EXPENSES Financial income and expenses amounted to MSEK -1487 (-422),whereof MSEK -1199 (-170)related to financing of the STANLEY Security acquisition. The impact from IAS 29 hyperinflation was MSEK 185 (76) relating to the net monetary gain. For further information refer to note 8. Financial
income and expense also include
foreign currency gains, net, of MSEK 116 (40). Interest income and expense excluding the financing related to STANLEY Security increased due to increased interest rates.
INCOME BEFORE TAXES
Income before taxes amounted to MSEK 1 337 (4 042).
TAXES, NET INCOME AND
EARNINGS PER SHARE
The Group's tax rate was
-
percent (27.2). The tax rate for
January -September 2023 was affected by the capital loss from the divestiture of Securitas Argentina. Excluding
the capital loss the tax rate was
- percent. The tax rate before tax on items affecting comparability was
- percent (26.5).
Net income was MSEK 88 (2 942).
Earnings per share before and after dilution amounted to SEK 0.13 (6.70). Earnings per share before and after dilution and before items affecting comparability amounted to SEK 7.15 (8.15).
Securitas ABInterim Report Q3 2023 | January-September 2023 | 8 |
Development in the Group's business segments
Securitas North America
Securitas North America provides protective services in the US, Canada and Mexico. The operations in the US are organized in three specialized units - Guarding, Technology and Pinkerton Corporate Risk Management. There is a unit for global and national clients as well as specialized client segment units, such as aviation, healthcare, manufacturing, and oil and gas.
Q3 | Change, % | 9M | Change, % | Full year | |||||||||
MSEK | 2023 | 2022 | Total | Real | 2023 | 2022 | Total | Real | 2022 | ||||
Total sales | 16 121 | 14 840 | 9 | 8 | 46 719 | 36 454 | 28 | 22 | 51 943 | ||||
Organic sales growth, % | 5 | 4 | 7 | -1 | 1 | ||||||||
Share of Group sales, % | 40 | 41 | 40 | 38 | 39 | ||||||||
Operating income before amortization | 1 479 | 1 287 | 15 | 15 | 4 146 | 2 903 | 43 | 38 | 4 286 | ||||
Operating margin, % | 9.2 | 8.7 | 8.9 | 8.0 | 8.3 | ||||||||
Share of Group operating income, % | 54 | 55 | 55 | 52 | 53 |
The Securitas Critical Infrastructure Services business unit has been moved from Securitas North America into Other as of the third quarter 2023. The comparatives have been restated.
QUARTERLY SALES DEVELOPMENT
MSEK | % | |||||
17 000 | 15 | |||||
14 000 | 15 489 | 15 642 | 16 121 | 11 | ||
14 840 | 14 956 | |||||
11 000 | 7 | |||||
8 000 | 3 | |||||
5 000 | -1 | |||||
2 000 | -5 | |||||
Q3 | Q4 | Q1 | Q2 | Q3 | ||
2022 | 2022 | 2023 | 2023 | 2023 |
Organic sales growth, %
QUARTERLY OPERATING INCOME DEVELOPMENT
MSEK | % | ||||
1 500 | 10.0 | ||||
1 423 | 1 479 | ||||
1 200 | 1 383 | 9.0 | |||
1 287 | 1 244 | ||||
900 | 8.0 | ||||
600 | 7.0 | ||||
300 | 6.0 | ||||
0 | 5.0 | ||||
Q3 | Q4 | Q1 | Q2 | Q3 | |
2022 | 2022 | 2023 | 2023 | 2023 | |
Operating margin, % |
JULY-SEPTEMBER 2023
Organic sales growth was 5 percent (4), primarily from the Guarding business unit driven by price increases, solid portfolio new sales and a significant global guarding contract renewed and expanded, as previously communi- cated. The Technology business unit also supported organic sales growth with improved installation sales and
a continued healthy backlog. Organic sales growth was slightly hampered by negative organic sales growth in Pinkerton.
Technology and solutions sales
accounted for MSEK 5 850 (5 184) or
36 percent (35) of total sales in the business segment, with real sales growth of 12 percent (125) in the third quarter, supported by good sales growth in both technology and solutions.
The operating margin was 9.2 percent (8.7), and the improvement stemmed from the Technology business unit where good business momentum and cost synergies were the main factors. The operating margin in Guarding was stable, supported by active portfolio management and leverage from the topline growth but burdened by cost of risk and medical expenses.
The Swedish krona exchange rate weakened against the US dollar, which had a positive impact on operating income in Swedish kronor. The real change was 15 percent (37) in the third quarter.
JANUARY-SEPTEMBER 2023
Organic sales growth was 7 percent (-1), driven by the Guarding business unit. Price increases, healthy portfolio new sales and a significant guarding contract renewed and expanded, as previously communicated, contributed to the devel opment. By comparison, the first nine months last year were hampered by the termination of two significant security contracts. Organic sales growth was also supported by the Technology business unit from improved installation sales and a continued good backlog. The client retention rate was 87 percent (85).
Technology and solutions sales accounted for MSEK 16 933 (10 059) or 36 percent (28) of total sales in the business segment, with real sales growth of 63 percent (46) in the first nine months. The acquired STANLEY Security business in North America was the main contributor to real sales growth, although double-digit real sales growth
within solutions also supported.
The operating margin was 8.9 percent (8.0), driven by the acquired STANLEY Security business and good margin performance within the Technology business unit. The operating margin in Guarding was stable, supported by active portfolio management and leverage from the topline growth but burdened by cost of risk and medical expenses.
The Swedish krona exchange rate weakened against the US dollar, which had
a positive impact on operating income in Swedish kronor. The real change was 38 percent (14) in the first nine months.
Securitas ABInterim Report Q3 2023 | January-September 2023 | Development in the Group's business segments | 9 |
Securitas Europe
Securitas Europe provides protective services in 21 countries. The full range of protective services includes on-site, mobile and remote guarding, technology, fire and safety services and corporate risk management. In addition, there are three specialized units for global clients, technology and security solutions.
Q3 | Change, % | 9M | Change, % | Full year | |||||||||
MSEK | 2023 | 2022 | Total | Real | 2023 | 2022 | Total | Real | 2022 | ||||
Total sales | 17 033 | 14 152 | 20 | 16 | 49 521 | 38 879 | 27 | 22 | 54 409 | ||||
Organic sales growth, % | 13 | 7 | 13 | 8 | 9 | ||||||||
Share of Group sales, % | 43 | 39 | 42 | 41 | 41 | ||||||||
Operating income before amortization | 1 186 | 930 | 28 | 23 | 2 972 | 2 223 | 34 | 29 | 3 201 | ||||
Operating margin, % | 7.0 | 6.6 | 6.0 | 5.7 | 5.9 | ||||||||
Share of Group operating income, % | 43 | 40 | 39 | 40 | 40 |
QUARTERLY SALES DEVELOPMENT
MSEK | % | ||||
17 000 | 17 | ||||
16 784 | 17 033 | ||||
15 000 | 15530 | 15 704 | 14 | ||
13 000 | 14 152 | 11 | |||
11 000 | 8 | ||||
9 000 | 5 | ||||
7 000 | 2 | ||||
Q3 | Q4 | Q1 | Q2 | Q3 | |
2022 | 2022 | 2023 | 2023 | 2023 |
Organic sales growth, %
QUARTERLY OPERATING INCOME DEVELOPMENT
MSEK | % | ||||
1 200 | 7.0 | ||||
1 000 | 1 186 | ||||
6.5 | |||||
992 | |||||
800 | 930 | 978 | 6.0 | ||
794 | |||||
600 | 5.5 | ||||
400 | 5.0 | ||||
200 | 4.5 | ||||
Q3 | Q4 | Q1 | Q2 | Q3 | |
2022 | 2022 | 2023 | 2023 | 2023 | |
Operating margin, % |
JULY-SEPTEMBER 2023
Organic sales growth was 13 percent (7) in the quarter, still driven by strong price increases, including the impact of the hyperinflationary environment in Türkiye. Organic sales growth was also sup ported by technology and solutions as well as the airport security business.
Technology and solutions sales
accounted for MSEK 5 512 (4 439) or
32 percent (31) of total sales in the business segment, with real sales growth of 20 percent (56) in the third quarter, supported by good sales growth in both technology and solutions.
The operating margin was 7.0 percent (6.6), an improvement primarily from technology and solutions. Active port folio management and reduced sickness supported the operating margin in security services whereas increased costs related to labor shortage, such as higher costs for subcontracting, continued to hamper.
The Swedish krona exchange rate weakened primarily against the euro, which had a positive impact on oper ating income in Swedish kronor, but was partly offset by the development of the Turkish lira. The real change in operating income was 23 percent (21) in the third quarter.
JANUARY-SEPTEMBER 2023
Organic sales growth was 13 percent (8) in the first nine months, driven by strong price increases, including the impact of the hyperinflationary environment in Türkiye. Organic sales growth was also supported by technology and solutions as well as the airport security business. The client retention rate was 91 percent (91).
Technology and solutions sales
accounted for MSEK 16 335 (10 708) or 33 percent (28) of total sales in the business segment, with real sales growth of 48 percent (29) in the first nine months. The acquired STANLEY Security business in Europe was the main contrib utor to real sales growth, although double-digit real sales growth within solutions and strong organic growth in technology also supported.
The operating margin was 6.0 percent (5.7), an improvement mainly from growth within technology and solutions, including STANLEY Security. Active portfolio management also supported the development. However, the operating margin was hampered by start-up costs within the airport security business and increased costs related to labor shortage, such as higher costs for sub contracting.
The Swedish krona exchange rate weakened primarily against the euro, which had a positive impact on oper ating income in Swedish kronor, but was partly offset by the development of the Turkish lira. The real change in operating income was 29 percent (14) in the first nine months.
Securitas ABInterim Report Q3 2023 | January-September 2023 | Development in the Group's business segments | 10 |
Securitas Ibero-America
Securitas Ibero-America provides protective services in six Latin American countries as well as
in Portugal and Spain in Europe. The offered services include on-site, mobile and remote guarding, technology, fire and safety services, and corporate risk management.
Q3 | Change, % | 9M | Change, % | Full year | |||||||||
MSEK | 2023 | 2022 | Total | Real | 2023 | 2022 | Total | Real | 2022 | ||||
Total sales | 3 601 | 3 790 | -5 | -12 | 11 836 | 10 785 | 10 | 11 | 14 604 | ||||
Organic sales growth, % | 5 | 16 | 18 | 15 | 16 | ||||||||
Share of Group sales, % | 9 | 11 | 10 | 11 | 11 | ||||||||
Operating income before amortization | 251 | 230 | 9 | 1 | 732 | 639 | 15 | 9 | 881 | ||||
Operating margin, % | 7.0 | 6.1 | 6.2 | 5.9 | 6.0 | ||||||||
Share of Group operating income, % | 9 | 10 | 10 | 12 | 11 |
QUARTERLY SALES DEVELOPMENT
MSEK | % | ||||
4 000 | 4 233 | 25 | |||
4 002 | |||||
3 790 | 3819 | ||||
3 601 | 20 | ||||
3 200 | |||||
2 400 | 15 | ||||
1 600 | 10 | ||||
800 | 5 | ||||
0 | 0 | ||||
Q3 | Q4 | Q1 | Q2 | Q3 | |
2022 | 2022 | 2023 | 2023 | 2023 |
Organic sales growth, %
QUARTERLY OPERATING INCOME DEVELOPMENT
MSEK | % | |||
250 | 7.5 | |||
250 | 251 | |||
230 | 242 | 7.0 | ||
230 | 231 | |||
210 | 6.5 | |||
190 | 6.0 | |||
170 | 5.5 | |||
150 | 5.0 | |||
Q3 | Q4 | Q1 | Q2 | Q3 |
2022 | 2022 | 2023 | 2023 | 2023 |
Operating margin, % |
JULY-SEPTEMBER 2023
Organic sales growth was 5 percent (16), a decline due to the divestiture of Securitas Argentina. Organic sales growth in Spain was 3 percent (6), supported by price increases and improved installation sales, but held back by active portfolio manage- ment. In Latin America, organic sales growth continued to be driven by price increases.
Technology and solutions sales accounted for MSEK 1 229 (1 102) or 34 percent (29) of total sales in the business segment, with real sales growth of 2 percent (10) in the third quarter.
The operating margin was 7.0 percent (6.1). The improvement was driven by the divestiture of Securitas Argentina, improved margins in technology and solutions and in airport security as well as positive impact from portfolio management. The operating margin in Spain and Portugal improved compared to last year, although continued wage pressure in Spain hampered.
The Swedish krona exchange rate weakened primarily against the euro which had a positive impact on oper ating income in Swedish kronor.
The real change in the segment was 1 percent (17) in the third quarter.
JANUARY-SEPTEMBER 2023 Organic sales growth was 18 percent
- driven by price increases, mainly in the hyperinflationary environment in Argentina in the first six months before the divestiture of Securitas Argentina. Organic sales growth in Spain was
4 percent (8), supported by price increases and improved installation sales, but held back by active portfolio management. Organic sales growth continued on a high level in Latin America driven by price increases, especially in Argentina. The client
retention rate was 92 percent (92).
Technology and solutions sales accounted for MSEK 3 758 (3 180) or
32 percent (29) of total sales in the business segment, with real sales growth of 11 percent (10) in the first nine months.
The operating margin was 6.2 percent (5.9), supported by higher margin technology and solutions sales, portfolio management and by the divestiture of Securitas Argentina. The operating margin was hampered by the wage pressure in Spain and negative portfolio development in a few Latin American countries.
The Swedish krona exchange rate weakened primarily against the euro which had a positive impact on oper ating income in Swedish kronor, but was partly offset by the development of the Argentinian peso. The real change in the segment was 9 percent (22) in the first nine months.
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Securitas AB published this content on 07 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 November 2023 16:50:09 UTC.