Securitas AB Full Year Report January–December 2018

Thursday, February 7, 2019

Comments from the President and CEO

Fourth quarter and full year performance 2018:

The fourth quarter confirmed the strong market momentum seen in the Group throughout 2018. Organic sales growth for the quarter was 5 percent (6), again on high comparatives. The full year ended with solid organic sales growth of 6 percent (5) and we grew faster than the security market in general. We have good traction with our offering and commercial activities in the market and we continue to push our strategy of combining different protective services into security solutions for our customers. Security solutions and electronic security sales grew by 21 percent compared with 2017 and represented 20 percent of total Group sales.

The operating margin was 5.5 percent (5.3) for the quarter and 5.2 percent (5.1) for the full year, with a strong performance in North America throughout 2018. Ibero-America also improved over the full year, however, in the fourth quarter the situation in Argentina worsened. The operating margin in Europe improved in the fourth quarter lifting the full-year operating margin to be on par with last year. In 2018, we were able to balance wage cost increases with price increases, and in 2019, our focus remains the same while offering alternative solutions to our customers.
The cost-savings program in Security Services Europe that was initiated in the third quarter of 2018 is progressing according to plan, with some savings achieved in the fourth quarter of 2018 and the majority expected in 2019. The total payback period is about two years and is expected to reverse the negative cost development we have seen during previous quarters to allow a year-on-year operating margin improvement, everything else equal.

Earnings per share, adjusted for changes in exchange rates and items affecting comparability, improved by 12 percent in 2018. This growth derives from our strategic and commercial development and a positive impact from the US tax reform.

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