Securitas AB Full Year Report 2023 | January-December

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Feb 07, 2024, 02:32 ET

STOCKHOLM, Feb. 7, 2024 /PRNewswire/ --

OCTOBER-DECEMBER

Total sales MSEK 39 542 (38 091)
Organic sales growth 6 percent (9)
Operating income before amortization MSEK 2 683 (2 491)
Operating margin 6.8 percent (6.5)
Items affecting comparability (IAC) MSEK –404 (–312), relating to the previously announced transformation programs and the acquisition of STANLEY Security
Earnings per share before and after dilution SEK 2.11 (2.47)*
Earnings per share before and after dilution, before IAC, SEK 2.44 (2.63)*
Cash flow from operating activities 166 percent (83)

JANUARY–DECEMBER 2023

Total sales MSEK 157 249 (133 237)
Organic sales growth 9 percent (7)
Operating income before amortization MSEK 10 247 (8 033)
Operating margin 6.5 percent (6.0)
Items affecting comparability (IAC) MSEK –4 669 (–1 086), relating to the capital loss of MSEK –3 321 from the divestiture of Securitas Argentina, the previously announced transformation programs and the acquisition of STANLEY Security
Earnings per share before and after dilution SEK 2.24 (9.20)*
Earnings per share before and after dilution, before IAC, SEK 9.59 (10.77)*
Reported net debt/EBITDA 4.1 (4.0), net debt/EBITDA before IAC 2.7 (3.3)**
Cash flow from operating activities 80 percent (71)
Proposed dividend for 2023 of SEK 3.80 (3.45) per share, distributed in two installments

* Number of shares outstanding has been adjusted for the rights issue completed on October 11, 2022.
For further information refer to Data per share on page 19.
** The comparative is adjusted for rights issue proceeds received in October 2022 and includes STANLEY Security's 12 months adjusted estimated EBITDA.

Comments from the President and CEO

"Strong Q4 cash flows and margin improvement from technology and solutions"

The operating margin of 6.8 percent (6.5) in the fourth quarter was supported by all three business segments driven by the technology and Solutions business, primarily from a strong quarter in technology. Technology and solutions represented 55 percent of the Group's operating result, with an operating margin of 11.4 percent.

Organic sales growth was 6 percent in the fourth quarter and real sales growth in our technology and solutions business was 6 percent. The real sales growth in security services was driven by price increases and volume growth in our airport security business while hampered by the divestment of Securitas Argentina in July and active portfolio management.

The integration of STANLEY Security continued at a good pace with several important milestones achieved. We continue to be in a period of important work related to systems and support services which will continue in 2024. We have achieved the STANLEY Security acquisition MUSD 50 cost synergy target in the quarter, mainly impacting North America. Additional cost synergies for execution in 2024 have been identified, although these will be partly offset by operational cost increases from the ongoing system and support transitions. The realization of commercial synergies is gaining traction, confirming our strong combined offering and market position.

In security services, our main priority is to improve the profitability in our client portfolio. The results were mixed in the fourth quarter with positive impact from active portfolio management, a price and wage balance on par and somewhat improved labor markets in the second half of the year. The profitability was primarily hampered by negative result development in the Securitas Critical Infrastructure Services business and somewhat weaker performance in Europe.

The Group's operating cash flow in the fourth quarter was MSEK 4 465, equivalent to 166 percent (83) of the operating result, with continued deleveraging of our net debt to EBITDA ratio before items affecting comparability to 2.7.

TRANSFORMING IN LINE WITH OUR STRATEGY
The core to the execution of our strategy is leadership in technology and solutions and in digital capabilities. We have made substantial investments in our technology capabilities with the acquisition of STANLEY Security, and our combined solutions offering is unique. The transformation program we have implemented in North America supports our operational efficiency on a daily basis and the ongoing programs in Europe and Ibero-America are progressing according to plan. These investments will fundamentally shift our digital capabilities and will solidify our position as the leading security solutions company.

Another cornerstone of our strategy is to continuously assess our business mix and presence to further sharpen our position as the leading security solutions and technology company. As a result, we disposed Securitas Argentina in 2023 with positive margin and cash flow effects going forward.

The strategic transformation of Securitas is on the right path, which is confirmed by the performance in 2023. With our strong offering we are managing an uncertain economic environment and we are fully committed to achieving our financial targets.

Magnus Ahlqvist
President and CEO

PRESENTATION OF THE FULL YEAR REPORT

Analysts and media are invited to participate in a telephone conference on February 7, 2024, at 9.30 a.m. (CET) where President and CEO Magnus Ahlqvist and CFO Andreas Lindback will present the report and answer questions. The telephone conference will also be audio cast live via Securitas' website www.securitas.com

To follow the audio cast of the telephone conference via the web, please follow the link www.securitas.com/en/investors/financial-reports-and-presentations/

A recorded version of the audio cast will be available at www.securitas.com/en/investors/financial-reports-and-presentations/
after the telephone conference.

For further information, please contact:
Micaela Sjökvist, Vice President, Investor Relations +46 76 116 7443

ABOUT SECURITAS

Securitas is a world-leading safety and security solutions partner that helps make your world a safer place. Almost nine decades of deep experience means we see what others miss. By leveraging technology in part-nership with our clients, combined with an innovative, holistic approach, we're transforming the security industry. With approximately 358 000 employees in 44 markets, we see a different world and create sustainable value for our clients by protecting what matters most – their people and assets.

Group financial targets
Securitas has four financial targets:

8–10 percent technology and solutions annual average real sales growth
8 percent Group operating margin by year-end 2025, with a >10 percent long-term operating margin ambit-ion
A net debt to EBITDA ratio below 3.0x
An operating cash flow of 70–80 percent of operating income before amortization

Securitas AB (publ.)
P.O. Box 12307, SE-102 28 Stockholm, Sweden

Visiting address:
Lindhagensplan 70
Telephone: +46 10 470 30 00
Corporate registration number: 556302–7241
www.securitas.com

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 8.00 a.m. (CET) on Wednesday, February 7, 2024.

The following files are available for download:

https://mb.cision.com/Main/1062/3923654/2586701.pdf

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