April 11, 2021

Denoch Emexicana

For technology buffs

UPDATE 2-Securitas targets Europe for next efficiency drive as profit misses forecasts

2 min read

* Q4 operating profit 856 bln SEK vs forecast 1.18 bln

* Q4 organic sales growth 1%

* Proposes dividend of 4 SEK/share for 2020 vs 4.80 SEK 2019

* Launches Europe, Ibero-America transformation programme

* Pandemic hit to airport security ops remains significant (Adds CEO comment, background)

STOCKHOLM, Feb 4 (Reuters) – Securitas, the world’s biggest security services group, posted a fall in fourth-quarter operating earnings on Thursday and said its next efficiency drive would target Europe and its Ibero-America businesses.

The Swedish provider of guard services, alarm surveillance and airport security is pushing to increase its share of electronic surveillance. Its airport surveillance business in Europe was particularly hard hit by the coronavirus pandemic which brought air travel to a near halt.

Operating profit was 856 million Swedish crowns ($102 million) against a year-ago 1.32 billion, missing an average forecast of 1.18 billion crowns profit according to analysts polled by Refinitiv, and Securitas said the impact of the pandemic on the airport security business remained significant.

Organic sales were up 1% in the quarter, against 4% growth a year earlier.

Securitas, which launched a global IT and a North America business transformation programme in 2019, plus a cost-saving programme due to the pandemic in 2020, said the new programme aimed for an operating margin of 6.5% at the Security Services Europe division and 6.0% at Security Services Ibero-America in 2024. In 2020 those margins stood at -2% and 2%, respectively.

Chief Executive Magnus Ahlqvist said investments would primarily go into IT systems and digital tools, and accelerating sales growth of electronic security solutions.

“The more and faster we digitalize, the better we can use information to improve customer value and create more data driven knowledge and insight. We have some pilots underway already but we want to scale this up,” he told Reuters.

Securitas will book costs of 1.4 billion crowns and invest 1.1 billion crowns in IT systems over the course of 2021-2023. It is also exiting several smaller countries.

The rival to Britain’s G4S proposed a dividend of 4.00 crowns per share for 2020, down from 4.80 crowns a year earlier and below the 4.49 crowns seen by analysts.

It said separately company veteran Andreas Lindback would become Chief Financial Officer from August.

Shares in Securitas were down 3.6 % at 0920 GMT, taking a 12-month decline to 19%.

$1 = 8.4181 Swedish crowns Reporting by Anna Ringstrom; editing by Niklas Pollard and Elaine Hardcastle

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