Organic sales growth in the Group was 2 percent (5) in the fourth quarter. New sales in the Group were strong across all business segments.
SECURITAS AB FULL YEAR REPORT January–December 2019
- Total sales MSEK 28 257 (26 824).
- Organic sales growth 2 percent (5).
- Operating income before amortization MSEK 1 497 (1 475).
- Operating margin 5.3 percent (5.5).
- Items affecting comparability (IAC) MSEK –83 (–187), relating to IS/IT transformation programs.
- Earnings per share SEK 2.38 (2.02).
- Earnings per share, before IAC, SEK 2.54 (2.39).
- Total sales MSEK 110 899 (101 467).
- Organic sales growth 4 percent (6).
- Operating income before amortization MSEK 5 738 (5 304).
- Operating margin 5.2 percent (5.2).
- Items affecting comparability (IAC) MSEK –209 (–455), relating to IS/IT transformation programs.
- Earnings per share SEK 9.20 (8.26).
- Earnings per share, before IAC, SEK 9.61 (9.17).
- Free cash flow/net debt 0.19 (0.13).
- Proposed dividend SEK 4.80 (4.40).
Comments from the President and CEO
Organic sales growth in the Group was 2 percent (5) in the fourth quarter. Organic sales growth declined temporarily in North America and was also hampered by the previously communicated contracts losses in Europe. Extra sales were generally lower compared to the fourth quarter 2018. New sales in the Group were strong across all business segments.
Full-year organic sales growth was 4 percent (6), a decline on a strong comparative, but also reflected the slowdown in some key markets during the second half of 2019.
We grew faster than the security market in general and we have the strongest offering of protective services, including security solutions and electronic security, which grew by 10 percent in 2019, to represent 21 percent of total Group sales. We recently acquired two strategically important electronic security companies, Fredon Security in Australia and Techco Security in Spain, the latter making Spain the second largest electronic security business in the Group.
The operating margin in the fourth quarter was 5.3 percent (5.5) and was primarily hampered by North America. The full-year operating margin was on par with last year. The price and wage balance improved in the fourth quarter and will remain a key focus area going into 2020.
The operating result, adjusted for changes in exchange rates, grew by 3 percent in 2019. Earnings per share, before items affecting comparability, amounted to SEK 9.61 (9.17).
We achieved the highest operating and free cash flow ever in 2019. Our strong focus on cash management remains a key priority across all business segments.
We have earlier in the year reported on an investigation in Argentina. The findings revealed that certain individuals have engaged in local business activities in violation of the Securitas Values and Ethics Code. During the investigation we have taken decisive actions, including terminations, and worked to improve our internal controls in Argentina as well as globally. As a result of the findings we have proactively contacted the appropriate authorities to ensure that we fulfill all our obligations as a responsible company. We assess that this will not have any material effect on our financial position.
Our success has been built based on good values and we have zero tolerance of misconduct of any type. I am extremely disappointed by the breach of trust displayed by certain individuals and am reinforcing our compliance program to prevent a similar situation from arising again in the future.
Driving the transformation
We continue to execute on two major transformation programs that will bring increased digitalization, efficiency and a platform for innovation. The implementation of these two programs is progressing according to plan and we expect positive impacts starting in 2021 and gradually increasing during 2022, as previously communicated.
We have presented our new management team and launched our strategy to become the Intelligent Protective Services Partner. We focus on the areas; client engagement, protective services leadership and innovation, efficiency as well as our people.
Offering solutions to our clients is a core part of our strategy. We continue to build a stronger capability within electronic security to enable further growth. Our ambition is to double sales of security solutions and electronic security to BSEK 40 by 2023.
We have a strong team and we have been pursuing extensive transformation over the last 12 months. We are making good progress towards an even stronger Securitas for the long term.