The full report (PDF, 448 kB) - Securitas

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DEVELOPMENT IN THE GROUP’S DIVISIONS Security Services USA Security Services USA* January – March January – December MSEK 2005 2004 2004 Total sales 4,774 5,073 20,017 Organic sales growth, % 0 0 -2 Operating income 217 249 982 Operating margin, % 4.5 4.9 4.9 Real change, % -7 -9 -12 Operating capital employed 1,016 1,158 938 Operating capital employed as % of sales 5 6 5 Total capital employed 7,279 7,987 6,811 Return on capital employed, % 13 14 14 *Adjusted to include the transfer of Canada and Mexico from Security Services Europe After merging all operations under the Securitas name, the operations are now organized in thirteen units – ten geographical regions and three specialized countrywide regions. The reorganization has now been completed in all units. The majority of the regions are stable in their performance and the focus is on refining the services and specializing for different customer segments such as airports, seaports, high-rise buildings, petrochemical plants, government, etc. The new IT platform has now been installed in more than 60 percent of the operations and is on track for finalization after the summer of 2005. In all regions branch manager training is performed in order to enhance the local ability to run and develop the business. At the end of 2005 all branch managers and other key persons will have been trained. During the first quarter 22 percent of the branch managers were trained. In the short term, focus has been on compensating cost increases with price increases. This has been achieved successfully. Full year price increases are expected to be around 2 percent while wages are expected to increase with 1.5 percent. Higher quality and increased customer focus has improved the customer retention to more than 90 percent. After a year of no or low growth, the market started to grow again during the summer of 2004 and the market growth rate is now around 5 percent – 1-2 percent in the commercial market and 12 percent in the government and homeland security related markets. Adjusted for the leap year Securitas’ organic sales growth would have been 1 percent. Price competition in the market is still fierce and margins have been under pressure. Securitas’ operating margin has bottomed out at 4.5 percent and is now expected to start to recover. Adjusted for the leap year and Easter the margin would have been 0.1 percentage points higher. The organic sales growth has started to turn positive and is expected to come up to the market’s growth rate during the year. The contract portfolio representing 90 percent of total sales, is now indicating an annualized growth rate of 4 percent. The employee turnover was unchanged at 60 percent. 4
Security Services Europe Security Services Europe* January – March January – December MSEK 2005 2004 2004 Total sales 5,968 5,671 23,289 Organic sales growth, % 5 3 4 Operating income 449 415 1,849 Operating margin, % 7.5 7.3 7.9 Real change, % 8 10 9 Operating capital employed 1,610 1,568 1,592 Operating capital employed as % of sales 7 7 7 Total capital employed 7,210 6,736 6,654 Return on capital employed, % 26 2626 28 *Adjusted to exclude Canada and Mexico which have been transferrred to Security Services USA, and adjusted to include the third party monitoring business. In Security Services Europe the new organization is gaining strength. Separate units for small customers with time-sharing services have been established in each country. Permanent guarding for large customers has been organized into four geographic units, while airport and seaport security has been separated into its own unit. Third party monitoring has also been gathered in a separate unit. The split into these seven separate business units has increased refinement and focus on new customer segments. Organic sales growth reached 5 percent, thus improving with 1 percentage point compared to the first quarter 2004. Norway, the Netherlands, Portugal, Austria and Eastern Europe all showed stronger than average organic sales growth. Sweden, Germany, the UK and Spain were in line with divisional average organic sales growth while France still performs under the average growth rate. Operating margin, slightly burdened by Easter falling in the first quarter, showed an improvement of 0.2 percentage points following the implementation of the new organizational structure and the increased focus on refinement. The margin was further supported by the continued strong organic sales growth. The contract portfolio, which generates approximately 85 percent of sales, grew by 5 percent on an annualized basis. Prices and wages increased 2 percent on annualized basis. The client retention rate is stable above 90 percent and the staff turnover has decreased to 30 percent. For 2005 the organic sales growth is expected to develop in line with the portfolio, with further improvement in operating margin. 5
Page 1 and 2: Securitas AB Interim Report January
Page 3: Securitas’ consolidated financial
Page 7 and 8: Direct Direct* January - March Janu
Page 9 and 10: CASH FLOW January - March 2005 Oper
Page 11 and 12: and the enterprise value of the acq
Page 13 and 14: Income MSEK IFRS Jan-Mar 2005 IFRS
Page 15 and 16: Primary segments and divisional ove
Page 17 and 18: Specification of currency changes,

The full report (PDF, 448 kB) - Securitas

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