Securitas AB Annual Report 2005

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Security Services USA Security Offi cers LDemont Carr (left) and James Edwards (right) work at Universal City Plaza, a Los Angeles high-rise building, where Securitas conducts beat patrols, security access control and reception services. Javier Galeana (middle) is Securitas Security Supervisor in the building, which is owned by CarrAmerica Realty Corporation, one of the leading realty companies for offi ce premises in the USA. High-rise buildings constitute an ever-growing segment of the U.S. market. The division’s ambition is to strengthen its position as a leading provider of security solutions by further enhancing the skills of its employees, and by sensitivity and adaptability to the needs of its customers. Better trained, better equipped and better paid security offi cers can provide our clients with more qualifi ed services and thereby also increase the overall status of the security services industry. American society is in many respects the world’s most demanding and sophisticated, which creates demand for more advanced and specialized security solutions. This is a challenge that the security industry has not fully met, and Security Services USA sees great potential in continuously improving its offering on the U.S. market with more qualifi ed services. Employment and wages for guards in the USA The security service industry in the USA consists of about 1 million guards; almost half of them, 47 percent, are proprietary guards, employed directly by companies and organizations for their own security needs. The remaining 53 percent are contract guards, employed by security services companies, among them Securitas. Guards employed by security companies and other companies Proprietary guards: 489,000 guards • Private Facilities 351,000 • Government Facilities 85,000 • Airports 53,000 47% 53% Contract security guards: 533,000 guards Source: BLS National Occupational Employment and Wages Estimates. CRS – The library of Congress. The relatively large share of guards employed by nonsecurity companies and organizations should be seen in light of the historically low quality of security services provided by security companies, which, in itself, is related to the relatively low wage level for guards in the USA. There is also a difference in wages within the guarding profession; proprietary guards are paid about 20 percent more than guards employed by security companies. Average annual wages for selected occupational groups in the USA Police officers All occupations Correctional guards Parking enforcement guards Airport guards Proprietary guards Contract security guards Minimum wage $10,712 $29,570 $28,732 $24,141 $19,400 $36,210 $35,090 $44,960 ■ Guards ■ Other occupations Source: BLS National Occupational Employment and Wages Estimates. CRS – The library of Congress. Altogether, this creates great opportunities for a security company like Securitas, which has a clear focus on quality in its service offering and a long tradition of improving working conditions and wages for security offi cers. The outsourcing potential will best be captured via industry initiatives in which security companies constantly work to increase wages and develop standards for security services, in combination with continued customer segmentation and specialization of the service offering to meet customers’ increasingly varied demands. Market trends Broad market coverage and nationwide presence make Securitas an attractive partner for many nationwide companies. The division is actively striving to capitalize on this competitive advantage by directing its offerings and marketing to such companies. 46 SECURITAS 2005
Security services at Novartis Pharmaceuticals Corporation in New Jersey are provided by Central Station Operator Dean Melachrinos and his colleagues, who guard the company’s premises and entrances around USA from an advanced, high-tech communications center. An important recent trend, which favors the Securitas security concept, is that companies are increasingly looking for more specialized services within such vertical markets as energy, seaports, fi nance industry, shopping centers, high-rise buildings, and petrochemical plants. Approximately 30 percent of the division’s branch offi ces are currently delivering services to vertical markets, small customers, specialized areas and mobile services. Intensive efforts are being made to further adapt the organization to suit the demands within these vertical markets. Objectives and strategies Security Services USA’s main objective is to strengthen its position as the leading U.S. provider of security solutions by further adapting its services to customer needs and by developing the skills of its employees. Outlook Security Services USA and the U.S. security services industry as a whole are at the crossroads of a major challenge. The industry must shift its development from delivering traditional, standardized security services to offering more qualifi ed, up-scale services. Raising the status of the security industy by making improvements in areas such as wages, training and Anita Sanchez is one of the Securitas receptionists who welcomes employees and visitors to Novartis every day. This long-term objective is supported by a number of fundamental strengths: ■ Long experience ■ Focus on security ■ Local branches with high expertise ■ Corporate culture based on strong values ■ High ambitions for future development The division’s fi nancial objectives are: ■ Annual organic sales growth in line with the market ■ Gradually increasing operating margin To achieve these objectives the division is following three strategies for the medium term: ■ Further training and development of employees and in particular for branch managers ■ Continued segmentation of the organization to meet the demand from specifi c vertical customer segments ■ Further specialization of the service offering services, goes hand in hand with this transformation. As market leader, Security Services USA aims to play a major role in driving the entire market toward increased professionalism and more qualifi ed services, thereby more effectively meeting the needs of the U.S. society. Securitas cannot accomplish this on its own; the entire industry must do its part. In the next few years, the division’s most important challenges are: ■ To grow in line with the market while, at the same time, improving profi tability ■ To continue decentralizing the organization by entrusting responsibility and authority to its branch offi ces Security Services USA At the Merrill Lynch reception desk at the World Financial Center in New York, receptionist Daniel Cantos makes sure that visitors are photographed and receive visitor badges upon entering the premises. SECURITAS 2005 47
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 44 and 45: Security Services USA Security Offi
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Page 56 and 57: Securitas Systems In the fall of 20
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Page 62 and 63: Direct Mikael Sundberg holds the fr
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Page 72: Annual Report - Financial statement
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Page 77 and 78: Supplementary information Securitas
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Page 81 and 82: net assets, and qualify for the hed
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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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