Organic sales growth of 2% recorded by Securitas in latest financials
18 May 2020
THE SECURITAS Group has delivered organic sales growth of 2% in the first quarter. Such growth declined in all business segments due to the extraordinary situation realised as a result of the Coronavirus pandemic which started to affect the company at the beginning of March and then increasingly throughout that month.
For January-March 2020, total sales at Securitas were MSEK 28 420 (26 744). Operating income before amortisation stands at MSEK 1 086 (1 290), with an operating margin of 3.8% (4.8). Earnings per share are SEK 1.61 (2.08) and the net debt/EBITDA is 2.4 (2.8).
The Security Services Europe business has been most impacted by the pandemic, mainly driven by a rapid decline in activity in the aviation business.
Security services are considered essential services in most countries. Securitas has been able to respond quickly to its clients’ demands by leveraging a strong range of protective services through a global and local footprint. The business protects critical activities and supply chains required to handle the pandemic, including increased activity levels at hospitals and the protection of facilities.
Pleasingly, security solutions and electronic security grew by 10% in the first quarter to represent 22% of total Group sales.
At present, the business is not prioritising acquisitions, but intends to return to its previous acquisition approach when the situation normalises.
As stated, operating margin in the first quarter was 3.8% (4.8). Price and wage balance was on par in the first quarter and retaining that balance is going to be a key focus area for Securitas in 2020.
Adjusted for changes in exchange rates, the operating result declined by 19%.
A good cash flow was realised in the first quarter and the strong focus on cash management remains a key priority across all business segments.
Focus during a challenging period
Magnus Ahlqvist (pictured), president and CEO at Securitas, commented: “Our current focus is on four priorities: the health and safety of our employees, maintaining the delivery of our services to our clients, cash flow and cost. Securitas business leaders and employees have demonstrated tremendous strength in maintaining business continuity, swiftly mobilising resources to meet critical client demands. We are working relentlessly to adapt our way of working in order to minimise the risk of virus spread and to secure protective equipment.”
He continued: “To protect our strong financial position, we have taken a number of cash measures. We have also signed a new revolving five-year credit facility used to replace the existing one. We are closely managing costs and continuously assessing how to adjust the business. No less than 10,000 of our employees across the business are currently on a temporary unemployment scheme.”
Ahlqvist asserted that the business continues to drive its strategic transformation programmes despite the currently challenging conditions. Driving digitisation and modernisation is believed to be critical for enhancing the Securitas offer in the future.
“Looking ahead,” concluded Ahlqvist, “we face significant uncertainty related to the Coronavirus pandemic. We are assessing different scenarios to ensure preparedness. We will continue to implement proactive measures designed to mitigate the impacts and will take action when 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 also for society at large.”