Securitas AB Interim Report January-March 2019
Monday, May 6, 2019
Comments from our President and CEO:
We had a strong start of the year, showing organic sales growth in the Group of 7 percent (6) in the first quarter. All business segments contributed to the improvement. Our comprehensive offering of protective services in combination with strong commercial activities allow us to grow faster than the security market in general. The operating conditions are similar to 2018 and we have good momentum. Security solutions and electronic security sales also developed well and grew by 17 percent compared with 2018, and now represent 21 percent of total Group sales.
The operating result, adjusted for changes in exchange rates, grew with 11 percent. The operating margin was 4.8 percent (4.7) in the first quarter, with a solid performance in North America, as well as in Ibero-America where Spain continued to show strong performance. The operating margin in Europe also improved and was supported by the cost savings program initiated during 2018. We have a continuous focus on managing the price and wage balance and did so also in the first quarter of 2019.
Earnings per share, adjusted for changes in exchange rates and items affecting comparability, improved by 3 percent. The earnings per share growth was negatively impacted by a higher effective tax rate in the US and by a negative net effect from IFRS 16.
Operating and free cash flow improved compared with the same quarter last year but cash management remains an area of focus across all business segments.
Driving the transformation of the security services industry
We foresee a future where scale and data availability are critical and we will drive the next big shift in the security services industry to benefit our clients and society as a whole. Earlier this year we announced two major programs to accelerate the transformation of Securitas. The objective of the first program is to radically modernize our global IS/IT platform and capability throughout the Group and we expect significant benefits in terms of efficiency and being able to launch digital products at scale. The second program drives a business transformation of our North American operations with the objective of operating in a more effective way. We are progressing according to plan with both programs and are excited about the long term impact they will have on our way of operating and on our ability to offer data-driven intelligent protective services to our clients. These programs are comprehensive multi-year transformation agendas, enabling us to build for the long-term.
In the near term, we continue to focus on enhancing our client engagement and continuously strengthening our offering and relationships with our clients. We continue to drive specialization of our protective services and to combine the protective services into tailored solutions for our clients based on their risk profile and needs.
It is now 14 months since I started as President & CEO for Securitas. Apart from extensive work with the strategy and a lot of client interaction, I continue to prioritize meeting with our people. We have good momentum as a company and this is thanks to all our fantastic people who are making a difference every day. We are now accelerating the transformation of our company and with our team of 370 000 people we are excited about the opportunities ahead.
Chief Executive Officer