Annual Report 2008 - Securitas

Interest rate fixing
It is the policy of Securitas to use interest rate derivatives if required to
manage its interest rate risk and as a consequence the Group’s financing
costs. The duration for these derivatives does not normally exceed four years.
Group policy allows for the use of both options-based and fixed-rate products.
INTErEST FIXING PEr cUrrENcy 1
currency
Amount
MSEK
Dec. 31, 2008 Dec. 31, 2009 Dec. 31, 2010
Amount
MLOc Rate 2 %
Amount
MSEK
Amount
MLOc Rate 2 %
Amount
MSEK
Amount
MLOc Rate 2 %
Final
maturity
USD 2,732 350 4.44 1,171 150 4.08 0 0 4.08 Feb. 2011
EUr 2,905 266 4.64 1,485 136 4.71 0 0 4.67 Feb. 2011
Total 5,637 2,656
1 Refers to interest rate fixing with a maturity in excess of three months.
2 Average rate including credit margin.
Foreign currency risks
Financing of foreign assets – translation risk
Translation risk is the risk that the SEK value of foreign currency equity will
fluctuate due to changes in foreign exchange rates.
Securitas’ foreign currency capital employed as of December 31, 2008
was MSEK 17,182 (18,453 and 19,378). Capital employed is financed by
loans in local currency and shareholders’ equity. This means that Securitas,
from a Group perspective, has shareholders’ equity in foreign currency that is
exposed to changes in exchange rates. This exposure gives rise to a translation
risk and consequently unfavourable changes in exchange rates could
have a negative effect on the Group’s foreign net assets when translated into
SEK. With the object of minimizing the impact of changes in exchange rates
on the Group’s net debt to equity ratio, Securitas aims to maintain a longterm
debt to equity ratio in USD and EUr that is close to the Group’s total
debt to equity ratio.
cAPITAL EMPLOyED AND FINANcING PEr cUrrENcy, 2008
MSEK EUr USD GBP
Other
currencies
The tables below show how the Group’s capital employed is distributed
by currency, and its financing. They also show the sensitivity of the net debt
and capital employed to changes in the SEK exchange rate.
The Consolidated statement of income is affected by the translation to
SEK of the statements of income of foreign subsidiaries. As these subsidiaries
essentially operate only in local currency, their competitive situation is not
affected by changes in exchange rates and since the Group as a whole is
geographically diversified, this exposure is not hedged. Group internal
currency flows between holding companies and subsidiaries in respect of
dividends are normally hedged to SEK immediately the amount is agreed
between the internal parties.
Total Foreign
currencies SEK Total Group
Total Group
+10% 1
Total Group
–10% 1
capital employed 8,138 7,499 307 1,238 17,182 738 17,920 19,638 16,202
Net debt –4,109 –3,974 –96 56 –8,123 –1,290 –9,413 –10,225 –8,601
Minority interests 4 1 0 1 6 0 6 7 5
Net exposure 4,025 3,524 211 1,293 9,053 –552 8,501 9,406 7,596
Net debt to equity ratio 1.02 1.13 0.45 –0.04 0.90 –2.34 1.11 1.09 1.13
1 changes in capital employed due to changes in the foreign exchange rates are taken directly to translation
reserves in the balance sheet. They do not impact the income statement.
cAPITAL EMPLOyED AND FINANcING PEr cUrrENcy, 2007
MSEK EUr USD GBP
Other
currencies
Total Foreign
currencies SEK Total Group
Total Group
+10%
Total Group
–10%
capital employed 8,111 8,543 902 897 18,453 239 18,692 20,537 16,847
Net debt –4,629 –4,468 –363 –150 –9,610 –268 –9,878 –10,839 –8,917
Minority interests 2 – – – 2 – 2 2 2
Net exposure 3,480 4,075 539 747 8,841 –29 8,812 9,696 7,928
Net debt to equity ratio 1.33 1.10 0.67 0.20 1.09 –9.23 1.12 1.12 1.12
cAPITAL EMPLOyED AND FINANcING PEr cUrrENcy, 2006
MSEK EUr USD GBP
Other
currencies
Total Foreign
currencies SEK Total Group
Total Group
+10%
Annual report
Notes and comments to the consolidated financial statements
Total Group
–10%
capital employed 8,465 9,283 1,184 446 19,378 –40 19,338 21,276 17,400
Net debt –3,762 –4,027 –520 –193 –8,502 –1,233 –9,735 –10,585 –8,885
Minority interests – – – – – – – – –
Net exposure 4,703 5,256 664 253 10,876 –1,273 9,603 10,691 8,515
Net debt to equity ratio 0.80 0.77 0.78 0.76 0.78 –0.97 1.01 0.99 1.04
Securitas Annual report 2008
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