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Securitas AB Full year Report January–December 2021

Published
08 February 2022 00:00

October–December 2021

  • Total sales MSEK 28 049 (26 477)
  • Organic sales growth 4 percent (1)
  • Operating income before amortization MSEK 1 646 (1 404)
  • Operating margin 5.9 percent (5.3)
  • Items affecting comparability (IAC) MSEK –356 (–422), mainly relating to the previously announced transformation programs and the cost-savings program in the Group
  • Earnings per share SEK 2.05 (1.45)
  • Earnings per share, before IAC, SEK 2.85 (2.38)
  • Cash flow from operating activities 131 percent (109)

 
January-December 2021

  • Total sales MSEK 107 700 (107 954)
  • Organic sales growth 4 percent (0)
  • Operating income before amort­iza­tion MSEK 5 978 (4 892)
  • Operating margin 5.6 percent (4.5)
  • Items affecting comparability (IAC) MSEK –871 (–640), mainly relating to the previously announced transform­ation programs and the cost-savings program in the Group 
  • Earnings per share SEK 8.59 (6.63)
  • Earnings per share, before IAC, SEK 10.41 (8.02)
  • Net debt/EBITDA 1.9 (2.1)
  • Cash flow from operating activities 93 percent (147)
  • Proposed dividend for 2021 of SEK 4.40 (4.00) per share

Comments from the President and CEO

 “Strong margin improvement and preparing ourselves for significant future enhancement”

  • Record level operating result and highest operating margin in more than a ­decade. Our strategy, investments and actions are starting to pay off and resulting in increasing profitability in all business segments
  • Strong cash flow generation leading to reduced leverage and a solid financial position at year end, preparing ourselves for the Stanley Security acquisition closing
  • Finalized two transformation programs and the cost savings program. Cost ­savings targets achieved in key areas and good benefit realization in North America towards the end of the year. Stronger foundation to enhance client value and drive operating ­margin improvement
  • Transformative acquisition of Stanley Security announced – positioning Securitas as a leading ­intelligent security solutions partner with over 50 ­percent of profit ­generated from high-margin ­electronic security and solutions sales going forward

We finished the year with 4 percent organic sales growth in the quarter and full year. The conditions in the business environ­ment improved gradually during the year, with good commercial activity across all business segments while growth was hampered in North America due to reduced ­corona-related extra sales and the previ­ously announced contract losses. 

Sales of ­security solutions and electronic security showed real sales growth of 8 percent (5) in 2021, repre­senting 22 percent of Group sales. We saw improved growth in the fourth quarter despite challenges related to component shortages.

The ­operating result for the Group, ­adjusted for changes in exchange rates, increased by 15 percent (4) in the fourth quarter and by 28 percent (–10) for the full year. The operating margin ­improved to 5.9 ­percent (5.3) in the quarter and to 5.6 percent (4.5) for 2021. Our focus on delivering the leading client value proposition combined with strong focus on profitability through active portfolio management strengthened all business segments. The improvement was further supported by the cost-savings program initiated during 2020 and lower levels of provisioning compared to 2020. 

With the continued return to business as usual related to the pandemic, govern­ment grants and support were materially reduced in the fourth ­quarter. The price and wage ­balance was successfully kept on par throughout the year. Going into 2022 we are well positioned to maintain this balance.

The Group delivered a strong operating cash flow, corresponding to 93 ­percent of oper­ating income in 2021. The net debt to EBITDA ratio was 1.9 (2.1).


TRANSFORMATIVE ACQUISITION FOR TECHNOLOGY LEADERSHIP
At the end of 2021, we took a signifi­cant step in our strategy to pursue value growth with technology by announcing the agreement to acquire Stanley Security. This is a transformative acqui­sition, which we expect will lead to ­significant added commercial growth and a substan­tial oper­ating margin improve­ment over time.

The future of security will be built around a combination of global presence, connected technology and ­intelligent use of data, and together with Stanley, we will be perfectly placed to win in this environment.


AN EXCITING JOURNEY AHEAD
Going into 2022, we are preparing to close the acquisition of Stanley Security. The integration and value ­creation planning have started and is well on track. We are continuing to ­execute on our transformation programs in Europe and Ibero-America, which are developing according to plan. The transform­ation program in North America was successfully final­ized in 2021 and we see ­positive ­impacts on our operations and the oper­ating margin at the end of 2021 with further opportunity going into 2022.

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.

None of the above would be possible without a strong team. I would like to take the opportunity to express my deepest gratitude to the Securitas team for their resilience and phenom­enal work during 2021.


Magnus Ahlqvist
President and CEO

PRESENTATION OF THE FULL YEAR REPORT

Analysts and media are invited to participate in a telephone conference on February 8, 2022 at 9:30 a.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


ABOUT SECURITAS

Securitas has a leading global and local market presence with operations in 46 countries. Our operations are organized in three business segments: Security Services North America, Security Services Europe and Security Services Ibero-America. We also have operations in Africa, the Middle East, Asia and Australia, which form the AMEA division. Securitas serves a wide range of clients of all sizes in a variety of industries and segments. Security solutions based on client-­specific needs are built through different combinations of on-site, mobile and remote guarding, electronic security, fire and safety, and corporate risk management. We adapt our security solutions based on the risks and needs of each client through increased client engagement and continuously enhanced knowledge. Securitas is listed in the Large Cap segment at Nasdaq Stockholm.

Group strategy
At Securitas, we are leading the transformation of the security industry by ­putting our clients at the heart of our business. We solve our clients’ security needs by offering qualified and engaged people, in-depth expertise and innovation within each of our protective services, the ability to combine services into ­solutions and by using data to add further intelligence. To execute on our strategy to ­become the intelligent protective services partner, we are focusing on four areas: ­empowering our people, client engagement, protective services leadership and innovation, and efficiency.

Group financial targets
Securitas has three financial targets:

An annual average increase in earnings per share of 10 percent
Net debt to EBITDA ratio of on average 2.5
An operating cash flow of 70 to 80 percent of operating income before ­amortization

Securitas has also set a strategic transformation ambition – to double our security solutions and electronic security sales by 2023, compared with 2018.
 

Securitas AB (publ.)
P. O. Box 12307, SE-102 28 Stockholm, Sweden

Visiting address:
Lindhagensplan 70

Telephone: + 46 10 470 30 00 

Corporate registration number: 556302–7241

www.securitas.com
 

This is information that Securitas AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 8.00 a.m. (CET) on Tuesday, February 8, 2022.

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