Securitas AB Annual Report 2005

Report of the Board of Directors – Security Services USA
“ 2005 was an important and successful year for
Security Services USA. It’s no exaggeration to call it
a turning point. When entering 2005, our three highest
priorities were growth, profi tability and organizational
development. I am very pleased to report that we have
been successful in all three areas.
After two challenging years in 2003 and 2004, there
were some doubts about the long-term potential for
the Group’s guarding services in the USA. Personally,
I have always believed that growth and results would
come with the development of our organization and the
successful establishment of our concepts. This is what
we began to prove in 2005.
Back on track
Our sales increased by 4 percent organically, so we are
now back on track, having reported a decrease in total
sales in both 2003 and 2004.
The most important reason behind this increase is that
on the whole we have succeeded in retaining our existing
clients. Our client retention rate was over 90 percent, an
increase of about two percentage points compared with
the previous year. This is a clear sign that our efforts to
improve customer service have been effective. At the
same time, our new sales also increased.
However, despite these improvements, we have not
been able to fully grow in line with the market, which
grew by approximately 4 percent during the year. This
is due to the fact that market growth was strongest in the
government sector, where for historical reasons we are not
as strong as in the private sector. Our ambition is, however,
to strengthen our offering to this part of the market.
As regards profi tability, the trend was also clearly
positive. Our operating income rose by 6 percent to
2005 was an important and successful year.
It’s no exaggeration to call it a turning point.
An important turning point in the USA
MSEK 1,080 (982), adjusted for changes in exchange
rates. This improvement was primarily due to increased
volume, combined with improved cost control. Our cost
increases for the year were very limited and we were
also able to introduce certain rate increases.
Since 2003, when our operations were united under
one company, we have put a great deal of effort
into decentralizing the organization and delegating
responsibility to the people who work close to our
customers. We have invested considerable resources in
developing expertise in the local organization, and the
positive effects of this were evident during the year. I
am convinced that greater responsibility and increased
expertise at the local level have contributed to improved
customer service and more effective sales activities.
We are the market leader in the USA, with a market
share of 19 percent, and operations that span the entire
USA and all customer segments. This strong position
provides us with a solid platform for continued growth
and profi tability.
Even closer to our customers
Santiago Galaz
Divisional President Security Services USA
As the market leader, we are able to play as important
role in driving the entire industry towards greater
professionalism and more advanced services. We will
also continue to increase customer segmentation. Other
important objectives are to get even closer to our existing
customers, attract new customers, and improve the
skills of our security offi cers as well as their working
conditions.
I believe that we are in a good position to reach annual
growth of 4–5 percent in the next few years and
am looking forward to what we will achieve in 2006. ”
42 SECURITAS 2005