Securitas AB Annual Report 2005

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Security Services USA Security Offi cer Billy Tyus welcomes residents and visitors to Mirada Homeowners Association in California. Mirada is a gated community, where Securitas provides security services both at the gate and inside the residential area. Operations Security Services USA provides security solutions for customers throughout the USA. Securitas entered the U.S. market in 1999 by acquiring Pinkerton, one of the oldest and largest security companies in the country. In the following years, the company made additional acquisitions, including acquiring another leading company, Burns. The division is now the undisputed market leader, with a market share of 19 percent. Our service offering includes: ■ Permanent guarding services ■ Specialized guarding services ■ Special events ■ Total security solutions ■ Mobile services ■ Alarm response ■ Consulting and investigations Organization The division has approximately 100,000 employees, most of whom are security offi cers. The organization consists of three levels – regions, areas and branches. The division comprises ten geographical regions, three specialized regions, 100 areas and 650 branch offi ces. Securitas has more local branch offi ces than any of its competitors in the USA. Thanks to their proximity to the customers, these branch offi ces are the real base of the Securitas organization. The branches have complete responsibility for their customers, personnel and profi tability. Delegated responsibility far out in the organization is a fundamental aspect of the organization of the division and contributes to high quality customer service and effi cient sales. Being close to customers is also important in order to discuss their perspectives and needs which, in turn, is fundamental for the development of new services as well as improvements to existing services. The decentralized structure also provides fl exibility to develop and adapt operations to local needs. Organization Claudia Gooden is one of the Security Offi cers guarding the gate at Mirada Homeowners Association. In the USA, gated communities represent a fast-growing segment. Security Services USA Guarding Regions Specialty regions North Central East Central South Central Mid-Atlantic New England New York/New Jersey South East Rocky Mountain North California South California National Accounts AK CA WA OR CA NV ID UT AZ MT WO Automotive Energy Government Consulting & Investigation Operations in more than 30 countries Our people The commitment and skill of our employees are the decisive factors for the division’s future progress and success. Great importance is given to the recruitment process to make sure the right people are recruited and to support employees with training and development. We require our employees to: ■ Provide consistent and reliable service ■ Respond quickly ■ Inspire trust and confi dence ■ Be attentive to clients’ individual needs CO NM ND SD NE KS MN IA MO WI IL MI IN OH KY WV VA OK AR TX LA MS TN NC SC AL GA FL PA ME VT NH NY MA RI CT NJ DE MD DC ■ North California ■ North Central ■ Mid-Atlantic ■ South California ■ South Central ■ New England ■ Rocky Mountain ■ New York/New Jersey ■ East Central ■ South East 44 SECURITAS 2005
In 2005, all branch managers in the USA took part in a comprehensive training program focusing on fi nance, sales and human resources development. In November, branch offi cers in the New York/New Jersey region took part in one of these training sessions in Parsippany, New Jersey. Training branch offi cers is central to the organization and plays an important part in the development of its operations. In 2005, extensive training programs were carried out to increase competence in our local organizations. All managers at branch offi ces participated in fi nance, sales, and human resource development training. The division also has a broad and ambitious training program in preparation for and during assignments as well as specialized training. Securitas Online Academy provides on-line training. New courses have also been developed to refi ne certain services and meet new regulatory requirements. Having recruited and developed our staff, the next step is to keep them. This is important in order to maintain and develop a high level of service and expertise. To achieve this, there are a number of different incentive systems in place to reward high performance. The division also strives to create career paths that provide opportunities for personal and professional development. Markets and customers The total market for security services in the USA is worth approximately MSEK 106,000. The market witnessed a temporary surge after the events on September 11, 2001, but then fell back considerably. Over the last few years, however, there has been a stabilization of the market, which has started to grow again. In 2005, the market grew some 4 percent, compared to 3 percent growth the previous year. The U.S. market is characterized by tough competition and is primarily price driven for permanent guarding services. In contrast to Europe, mobile services are unusual in the USA. The majority of security offi cers work for one customer at a time. Sales and market shares Country Sales MSEK Sales MLOC Market share, % USA 20,257 2,684 19 Canada 1,122 179 17 Mexico 237 341 2 Total 21,616 17 Market position Securitas is the market leader in the USA, with a market share of 19 percent. The division has approximately 100,000 security offi cers and has wide coverage of geographical regions and business segments in the USA. There are only three large nationwide security companies in the USA, namely Securitas, followed by Wackenhut and AlliedBarton. The latter was formed in 2004 through the merger of Allied and Barton. In addition, the U.S. Federal Government has emerged as a big player in the market since it took over airport security in the wake of the attacks of September 11, 2001. Approximately 50,000 guards are federally employed. The federal share of the market for guarding services has grown by more than 10 percent annually for the past two years, which is more than twice the average market growth. For historical reasons, Securitas has a weaker position in the fast-growing market for government related security services, and thus has not been able to grow fully in line with the market in 2005. Securitas aims to strengthen the division’s offering to the government market. The remaining security industry is very fragmented, with over 13,000 companies, mostly local companies with no national ambitions or operations. Securitas expects the consolidation in the industry to continue. The U.S. market’s fi ve leading players, MUSD Companies Sales Branch offi ces Employees Security Services USA Market share, % Securitas 2,684 650 102,780 19 Wackenhut 1,500 120 38,000 11 AlliedBarton 1,099 79 37,000 8 Akal Security 1,000 50 12,000 7 Guardsmark 509 155 18,500 4 Total 49 The fi ve largest security companies in the USA have a total market share of 49 percent. Source: Securitas and Security Magazine.com SECURITAS 2005 45
Page 1 and 2: Securitas AB Annual Report 2005
Page 3 and 4: Sales per region A world
Page 5 and 6: A positive 2005 lays the foundation
Page 7 and 8: A history of growth Securitas was f
Page 9 and 10: The wheel of fortune Rationalizatio
Page 11 and 12: Koncernen 12 Comments by the CEO 14
Page 13 and 14: and customers have been convinced t
Page 15 and 16: The Securitas Group - sales growth,
Page 17 and 18: From multi-service providers to sec
Page 19 and 20: The entire organization supports th
Page 21 and 22: Our values Our values - Integrity,
Page 23 and 24: New sales of customer contracts tha
Page 25 and 26: 25 20 15 10 5 0 Return on capital e
Page 27 and 28: Risk business plans Each division a
Page 29 and 30: Swedish GAAP IFRS MSEK 2001 2002 20
Page 31 and 32: Income 2004 MSEK IFRS Q1 2004 IFRS
Page 33 and 34: Market capitalization & Enterprise
Page 36 and 37: Report of the Board of Directors -
Page 38 and 39: Financial overview BDM, Switzerland
Page 40 and 41: Financial overview Divestment of re
Page 46 and 47: Security Services USA Security Offi
Page 50 and 51: Security Services Europe In order t
Page 52 and 53: Security Services Europe Securitas
Page 56 and 57: Securitas Systems In the fall of 20
Page 58 and 59: Securitas Systems Bell Security, ac
Page 62 and 63: Direct Mikael Sundberg holds the fr
Page 64 and 65: Direct Directs model for expansion
Page 68 and 69: Cash Handling Services Route Superv
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Page 72: Annual Report - Financial statement
Page 75 and 76: Statement of cash fl ow MSEK NOTE I
Page 77 and 78: Supplementary information Securitas
Page 79 and 80: Financial statements - Notes and co
Page 81 and 82: net assets, and qualify for the hed
Page 83 and 84: Recognition and subsequent measurem
Page 85 and 86: NOTE 3 CRITICAL ESTIMATES AND JUDGE
Page 87 and 88: Table 3A. Maturity structure of iss
Page 89 and 90: a certain percentage of the fi nal
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Goodwill is tested on an annual bas
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NOTE 28 CHANGES IN SHAREHOLDERS’
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Pension cost MSEK IFRS 2005 Notes a
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Table 1A. Adjusted Consolidated Sta
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Free cash fl ow was not impacted by
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elating to the tax calculated on th
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Table 5. Consolidated Balance Sheet
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NOTE A GOODWILL MSEK Jan 1, 2004 De
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Statement of income MSEK NOTE Paren
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Parent Company changes in sharehold
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NOTE 42 PERSONNEL Average number of
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NOTE 50 LIQUID ASSETS Liquid assets
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To the Annual General Meeting of th
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Corporate Governance - Board of Dir
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Corporate governance - Report of th
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Report of the Board of Directors -
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Corporate Governance - Report of th
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Corporate Information
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Corporate Information - Financial i
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Securitas Services Ltd. Berkshire H
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Securitas AB Annual Report 2005

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