Securitas AB Annual Report 2005

The Group – Market
The security market for guarding,
alarm and cash handling
Source: Securitas and Freedonia
The global security market is worth approximately MSEK 850,000, with North
America and Europe accounting for MSEK 644,000 or around 75 percent. Over
the long term, the industry is expected to grow by 6–8 percent annually. Securitas
has approximately an 8 percent market share of the global security market and
a total of approximately 10 percent of the markets in Europe and the USA.
The security markets in Europe and the USA have historically grown by an average of 6–8 percent
a year. Alarms and cash handling services are growing the fastest, at approximately 8 percent
a year, while guarding services are growing by approximately 5 percent. The alarm market
(Securitas Systems and Direct) is now larger than the guarding market.
A growing market and an increasingly
specialized security industry
The global security market is growing by 6–8 percent per year, driven
by society’s increasing complexity and the resulting rise in the cost of
disruptions and need for protection. Demand is growing quickly for
differentiated and specialized services, and there is a clear segmentation
of the market, a trend Securitas is leading. The USA and Europe account
for approximately 75 percent of the total world market.
The global security market is very large and fragmented,
with major differences in maturity between continents,
countries and various segments. The total global market
is estimated at SEK 850 billion with an annual growth
rate of around 6–8 percent in the USA and Europe,
which account for approximately 75 percent of the total
market. In the rest of the world, growth is even faster.
The market’s limits are constantly being redefi ned, however,
as security companies develop their offerings, customer
needs change and new technology is developed.
Growing complexity
The main driver is society’s growing complexity, which
raises the demand for reliable, tailor-made security
solutions. The increasing scalability, specialization and
segmentation of functions with cross-border deliveries,
where value-enhancing processes are dependent on justin-time-deliveries,
create greater risks and vulnerability.
Disruptive events can have far-ranging consequences,
with large values at stake. Security issues are therefore
becoming a higher priority of companies, institutions
Market development, Europe and USA
MSEK
Total
market
Long-term
growth
Securitas’
market share
Security Services
USA1 125,000 4–6% 17%
Europe 151,000 4–6% 17%
Securitas Systems 245,000 6–10% 2%
Direct 60,000 5–10% 2 11% 3
Cash Handling Services 63,000 5–10% 18%
Total 644,0004 6–8% 4 10% 4
1 Including Canada and Mexico but excluding Consulting & Investigation.
2 European market.
3 European market share.
4 Markets outside Europe and the USA are not included.
Source: Securitas and Freedonia
and individuals, and decisions are being made higher up
the command chain at the management and board level.
The available market is also growing due to the security
industry’s consolidation into larger companies
focused on global growth in an increasingly specialized
market. More customers are choosing to outsource their
security needs at the same time that demand for specialized
services with high-value content is growing. This
professionalizes the market and gives security companies
the incentive to refi ne their services and solutions.
High-value content means higher prices and operating
margins, at the same time that cost effi ciencies increase
for the individual customer.
A typical example of this trend is guarding. The
“old” market for permanent guarding is growing by
about 4 percent per year with a gross margin of approximately
15–18 percent. The “new” guarding market
comprises specialized guarding – mobile services and
combined contracts. Growth is twice as high, approximately
8 percent per year, with a signifi cantly higher
gross margin.
16 SECURITAS 2005