The Swedish security services provider reported improved margins, stronger cash generation and rising technology activity, while adjusted organic sales growth was 3% and the SCIS government business wind-down remained on track.
Securitas reported lower-than-expected second-quarter core profit as reported organic sales growth stalled, though margins and cash generation improved and technology-related activity stayed firm. The Swedish security services provider posted EBITA of 2.82 billion Swedish crowns for April-June, up slightly from 2.80 billion crowns a year earlier but below analysts’ average forecast of 2.91 billion crowns in a poll published on its website. Total sales were 37.84 billion crowns versus 38.56 billion a year earlier, while organic sales growth was 0%, down from 5%, and adjusted organic sales growth was 3%. Operating margin improved to 7.5% from 7.3%, while adjusted operating margin was 7.6% against 7.5% a year earlier. Earnings per share rose to 2.88 crowns from 2.56, or 2.94 crowns before items affecting comparability from 2.79. Cash flow from operating activities was 87% of operating income in the quarter, compared with 106% a year earlier. Chief Executive Officer Magnus Ahlqvist said growth in North America was supported by both the Guarding and Technology business units, while portfolio management actions weighed on growth in Europe. Real sales growth in technology and solutions reached 5% in the quarter, helped by Technology in North America, and the company said installation order intake and backlog in its global technology business showed strong growth. For the first half, total sales were 74.05 billion crowns, operating income before amortization was 5.28 billion crowns and earnings per share rose to 5.68 crowns from 4.86. Net debt to EBITDA improved to 2.2 from 2.4. Securitas also said the close-down of the SCIS government business was progressing according to plan and is expected to be concluded by year-end, while portfolio actions tied to underperforming contracts in Europe were completed in the second quarter. The group separately updated its financial targets through 2030, including a new headline goal of 10% average annual earnings per share growth over a business cycle.