Commenting on the results, president and CEO Alf Goransson said: “The real sales growth including acquisitions continued to be strong and reached 9% for the first quarter, while the organic sales growth was slow at 1%. Some contract losses and reductions in existing customer contracts impacted the quarter, as well as our own cancellations of low margin contracts.”
He added: “The price increase negotiations take time due to our need to achieve balance between price adjustments and wage cost increases. The operating margin was 0.3% behind the previous year mainly for these reasons.”
Goransson is “confident” that the security giant will be able to achieve price increases on a par with wage costs increases in the Group in 2012, supported among other things by a so far successful price campaign in France and an agreement of a revised collective bargaining agreement in Spain.
“We will continue to be restrictive on acquisitions until we have restored the financial target of free cash flow to a net debt of 0.20,” urged the CEO. “In spite of that, we made one major and important acquisition of the technology company Chillida in Spain. With this acquisition we have created a technology hub that will strengthen our operations in Spain and Portugal, and in turn allow us to offer higher value solutions to our customers.”
Goransson also explained: “We have had a relatively weak start to the year. However I remain optimistic about 2012, supported by the actions taken and the acquisitions made in 2011, the ongoing work on managing the price/wage balance and by the pipeline of won or expected projects in quarters to come, even if the macro economic environment remains unpredictable.”
The topline Q1 results at Securitas are as follows:
Summary of the 2011 financial year
Summarising the 2011 financial year at the Securitas AGM, Goransson said: “We inevitably ask ourselves: ‘Was 2011 a good or bad year for Securitas?’ The answer to this question is two-fold. In financial terms, 2011 was a weak year and I’m not satisfied with our results. However, we took a number of key strategic steps forward during the year which will play a crucial role in the long term, and I would argue that we have entered a new era in Securitas’ history.”
He continued: “The market for security services is mature in most of our areas of operation, with low added value, high price transparency and a fragmented competitive landscape. At Securitas, we’re convinced that focusing on specialisation rather than diversification will allow us to break this vicious circle.”
The company’s goal is to continue providing security guarding services based on customer demand, while at the same time boosting margins by supplying comprehensive security solutions. “We are achieving this goal by creating added value for our customers – better security at a lower price,” insisted the CEO.
Goransson went on to state: “Delivering better security at a lower price requires expertise in optimising the balance between deploying security officers and/or technology. We possess the necessary know-how to increasingly advise our customers, which will enable us to advance Securitas’ position in the value chain and improve our margins.”
