Securitas AB Interim Report January-March 2020

STOCKHOLM, May 7, 2020 /PRNewswire/ -- JANUARY-MARCH 2020

• Total sales MSEK 28 420 (26 744)

• Organic sales growth 2 percent (7)

• Operating income before amortization MSEK 1 086 (1 290)

• Operating margin 3.8 percent (4.8)

• Items affecting comparability (IAC) MSEK -45 (-20), relating to IS/IT transformation programs

• Earnings per share SEK 1.61 (2.08)

• Earnings per share, before IAC, SEK 1.70 (2.12)

• Net debt/EBITDA 2.4 (2.8)

• Cash flow from operating activities 34 percent (-5)

• Dividend proposal withdrawn, may consider a new dividend proposal later this year

• Significant impact and uncertainty related to the corona pandemic 

Comments from the President and CEO

The Group delivered organic sales growth in the first quarter of 2 percent (7). Organic sales growth declined in all ­business segments due to the extra­ordinary situation of the ­corona pandemic which started to affect our business in the beginning of March and increasingly throughout the month. Our business segment Security Services Europe was most impacted, mainly driven by a rapid decline in activity in the aviation ­business.

Security services are ­considered essential services in most countries. We have been able to respond quickly to our ­clients' demands by ­leveraging our strong range of ­protective services through our global and local footprint. We ­protect critical activities and supply chains required to handle the ­pandemic, including increased activity levels at hospitals and protection of facilities.

Security solutions and electronic security grew by 10 percent in the first quarter to represent 22 percent of total Group sales. We are currently not prioritizing acquisitions but we intend to return to our previous acquisition approach when the situation normalizes.

The operating margin in the first quarter was 3.8 percent (4.8), a decline deriving from all business segments but the main impact from Security Services Europe. The price and wage ­balance was on par in the first quarter and retaining that ­balance is a key focus area in 2020.

The operating result, adjusted for changes in exchange rates, declined by 19 percent. Earnings per share, before items affecting comparability, amounted to SEK 1.70 (2.12).

We delivered a good cash flow in the first quarter and our strong focus on cash management remains a key priority across all business segments.

Focus during a challenging period

Our current focus is on four priorities: the health and safety of our employees, maintain delivery of our services to our clients, cash flow and cost. 

Securitas leaders and employees have demonstrated tremendous strength in maintaining business continuity, swiftly ­mobilizing resources to meet critical ­client demands. We are working relentlessly to adapt our way of working to minimize the risk of spreading of the virus and to secure protective equipment. To protect our strong financial position, we have taken a number of ­cash measures. We have also signed a new revolving 5-year credit facility used to replace the existing one. We are closely managing costs and continuously assessing how to adjust the business.

10 000 of our employees across the business are currently on a temporary unemployment scheme. 

We continue to drive the strategic transformation programs despite the currently challenging conditions. Driving digitization and modernization is critical to enhance our offering and value creation in the future.

Looking ahead, we face significant uncertainty related to the corona pandemic. We are assessing different scenarios to ensure preparedness. We will continue to implement pro­active measures to mitigate the impacts, and will take action as deemed necessary. 

We are working closely with our clients to support them in re-starting their operations. This is critical work not only for our clients but for many economies, people and society at large. 

Magnus Ahlqvist

President and 

Chief Executive Officer

PRESENTATION OF THE INTERIM REPORT

Analysts and media are invited to participate in a telephone conference on May 7, 2020 at 2:00 p.m. (CET) where President and CEO Magnus Ahlqvist and CFO Bart Adam 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. 
+46-761167443

FINANCIAL INFORMATION CALENDAR

May 7, 2020, 4.00 p.m. (CET)    Annual General Meeting 2020

July 29, 2020, app. 1.00 p.m. (CET)    Interim Report January-June 2020

November 3, 2020, app. 1.00 p.m. (CET)    Interim Report January-September 2020

For further information regarding Securitas IR activities, refer to 

www.securitas.com/investors/financial-calendar  

ABOUT SECURITAS

Securitas has a leading global and local market presence with operations in 56 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 and Asia, 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. Securitas clients' are found in all different industries and they are of all sizes. 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

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

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 1:00 p.m. (CET) on Thursday, May 7, 2020.

Securitas AB (publ.)

P.O. Box 12307, SE-102 28 Stockholm, Sweden

Visiting address: Lindhagensplan 70

Telephone: +46-10-470-30-00. Fax: +46-10-470-31-22

Corporate registration number: 556302-7241

www.securitas.com

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SOURCE Securitas