Securitas AB Annual Report 2005

In Uniited Kingdom, Securitas introduced a total solution for ATMs in 2005. Thanks to modern information technology, Securitas, from a monitoring
station in Warwick, is able to monitor and continually receive information about which ATMs need cash replenishment, service or maintenance, thus
ensuring timely response and high-quality services. James Wicker, a technical analyst, is one of Securitas’ employees delivering these services.
credit cards, which is the primary alternative. Our integrated
solutions, including a range of new products
such as SafePoint, Myntomat and Cash Shop, are able to
reduce that cost through enhanced effi ciency, improved
security and quicker reporting. Put simply, our services
allow our customers to outsource a substantial part of
the cash handling chain.
With respect to ATM services, we have continued
to develop total solutions that include maintenance and
cash forecasting in several markets. Our plan is to extend
this comprehensive service to further markets.
Market and customers
Market trends
We estimate the market at approximately MSEK 38,000
in Europe and MSEK 25,000 in the USA (including
Canada, Mexico and Argentina). The estimates include
only the currently outsourced market, not additional
outsourcing potential. Growth has typically been stable,
although limited to traditional service areas. In Europe,
the division maintains market shares of about 20 percent
and in the USA alone, of about 19 percent.
In some respects, the U.S. and European markets
share similarities. One factor in particular is the steady
growth in cash in circulation. The idea of a cashless
society is not supported by historical or current trends.
In fact, the volume of notes in circulation has increased
by nearly 40 percent in Europe since the introduction
of the euro, and cash in circulation in the USA has
grown consistently for decades. Statistics suggests that
electronic means of payment have primarily replaced
check usage, rather than cash. Similarly, in both markets,
ATMs have become the dominant means of distributing
cash to consumers. In basically all the markets we serve,
ATMs account for over 50 percent of the cash distributed
to consumers. In other respects, the European and
U.S. markets have developed differently or, to be more
precise, at different speeds. Although we offer similar
services in the USA and Europe, the product mix refl ects
the differences. In Europe, 58 percent of our sales come
from armored transport, 37 percent from cash management
services and 5 percent from other services. In the
USA, 84 percent of our sales are armored transport,
including ATM related cash transport.
Throughout much of Europe, cash processing activities
have been outsourced by banks to a far greater
extent than in the USA. This has been encouraged by
central banks, which have pushed greater responsibility for
cash management into the private sector. In Sweden the
development has reached the furthest. There, the central
bank has outsourced all its cash processing activities,
choosing only to retain responsibility for printing and
destroying notes and coins. The decision to outsource
unfolded over nearly a decade, during which Securitas
has grown its cash handling operations more than
six-fold, despite having had a market share estimated at
60 percent at the start of that cycle. Today, we process
70 percent of the cash in Sweden.
In United Kingdom, where an earlier stage of
a similar transformation is under way, Securitas now
processes 40 percent of the cash. France and Spain
show signs of similar transformation. The number of
central bank branches there are estimated to decrease by
approximately 65 percent between 2001 and 2007. The
division’s European operations have proven that the ability
to transport, process and recycle cash in volume enables
greater effi ciency and better value for the customer.
Cash Handling Services
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