Securitas AB Annual Report 2005

The Direct philosophy includes designing products so that all family members can use them.
Aroundio’s “Star key” serves as a code key to turn the alarm on and off. It is a visible symbol
of our motto, Friendly Security.
market is for Direct. First, a large volume potential
measured in the number of potential and fi nancially
secure households and small companies and second, that
other factors, such as rules and regulations and industry
standards, do not obstruct establishment. In the long
term, however, there are often opportunities to infl uence
regulations and industry standards by creating exceptional
service, thereby gaining trust from the police and
legislative authorities. Broadly speaking, the division
competes with a range of security solutions for small
companies and households, everything from watchdogs
to security gates.
Sales and market shares
Country
Sales
MSEK
Sales
MLOC
Market
share, %
Sweden 559 559 34
Norway 276 237 27
Denmark 178 142 23
Finland 73 8 22
France 178 19 15
The Netherlands 4 0 4
Belgium 27 3 9
Spain 1,334 143 35
Portugal 77 8 8
Total 2,706 11
Head-to-head competition also comes from companies
that install alarms, and especially alarms connected to
some form of response. In this segment, the market is
fragmented, with a large number of local and regional
players. The industry can also be characterized by a
relatively high number of companies leaving the market
while others join. There is no noticeable trend towards
consolidation at present.
There is a signifi cant long-term trend of traditional,
local alarms being replaced by alarms connected to a
contact person or directly to the client’s mobile telephone.
This so-called “light security” market is quickly
becoming standardized and is attracting the large service
providers of energy, telephone, banking, and insurance
services. How this will infl uence the “high security”
market, which is based on the ability to very precisely
maintain qualifi ed guarding services and request assistance
from the police when needed, remains to be seen.
Pia Adolfsson works in customer service at Securitas
Aroundio. Since her focus is private individuals, she is
a specialist in solving their problems.
Business objectives and driving forces
The main objectives and driving forces behind the Direct
business are:
■ Net growth in the client portfolio
■ Return on investment in new clients
■ Minimizing loss of clients in the subscription portfolio
The Direct Financial Model
The dynamics of the Direct business concept are
refl ected in the fi nancial model that, in it simplest form,
is based on acquiring new clients and taking care of
existing ones. The model and the entire Direct business
concept strive for balanced growth over time. The concept
includes low fi nancial risk-taking and long-term efforts
to build up the structures the business needs in each
market.
Through the years, we have had strong growth in the
net portfolio. Each year has brought greater growth in
the number of clients than the previous year. At the same
time, only a small portion of clients cancel subscriptions.
The result is a strong increase in value.
Acquiring new customers Managing a service portfolio
New customers
X
Cost of new customer
=
Total acquiring cost
Pay back
Portfolio growth
Gross portfolio
–
Cancellations
=
Net portfolio
X
Monthly contribution
=
Portfolio cash fl ow
Direct
SECURITAS 2005 63