Securitas AB Annual Report 2005

Cash Handling Services
One of the solutions Securitas introduced during the year, in Borås, Sweden and elsewhere, was the Cash Shop
solution. Small companies are able to make cash deposits directly into an ATM-like environment at a time of
their choosing instead of being limited to banking hours. This is in line with the strategy deployed by banks to
increasingly eliminate cash handling.
In the USA, the Federal Reserve has not yet taken similar
major steps in the same direction. However, in the
spirit of minimizing cross-shipping of cash, a change
in policy has been introduced. As a result, the Fed has
introduced a custodial inventory program that allows
banks or their designes to hold inventories of Federal
funds as an alternative to shipping excess funds back to
a Federal Reserve Bank. This signals a desire to improve
the effi ciency of the cash fl ow and creates opportunities
for our industry. Also of note, the Federal Reserve
has outsourced its cash processing operations in several
markets. Loomis, Fargo & Co has taken charge of three
of those depots.
Sales and market shares
Country
Sales
MSEK
Sales
MLOC
Market
share, %
USA 3,820 507 19
Sweden 917 917 >50
Norway 205 176 24
Denmark 111 89 47
Finland 166 18 35
Great Britain 2,689 197 27
France1 2,019 216 31
Switzerland 91 15 14
Austria 159 17 37
Spain 979 105 41
Portugal 91 10 17
Sales of divested operations 533
Elimination of internal sales2 –188
Total1 11,592 18
1 Adjusted for full-year sales in acquired units.
2 Refers to sales within the Cash Handling Services division.
Market Development
The armored cash transport market is growing only
modestly, yet this service remains an essential foundation
for the development of the complete service offering.
As noted, our cash processing operations in Europe
are well suited to serve the banking sector in the markets
where we operate, though opportunities do remain. In
the USA, signifi cant investment in recent years to build
In 2005, Myntomat machines were installed at the sites of several
large superstores in Sweden. Here, at one of COOP’s superstores in
Malmö shoppers can deposit coins in a Myntomat machine in return
for a receipt to be used as payment for purchases.
Securitas’ cash management infrastructure has positioned
itself to benefi t from emerging trends among both
banks and retailers to outsource more cash processing
activities. Our e-business model, based on the Customer
Information Exchange, utilizes the Internet to enhance
effi ciency in cash ordering, upgrade the quality and
timeliness of consolidated reporting, and in some cases
reduce total cash inventories. For instance, one major
U.S. bank reported a reduction of MUSD 100 in its cash
inventory as a result of Securitas Internet Change Order
(ICO) service. Several banks have also saved substantial
cash order preparation fees by using ICO to consolidate
Fed orders and utilize the network to break down and
distribute orders through their branch networks.
The Virtual Vault service, introduced two years
ago, has also proven popular. Essentially, it provides a
complete vault and reporting solution for banks seeking
to expand to new markets without having to invest
in a physical facility. Late in 2005, we introduced an
additional service for check processing. Although check
usage is declining, it still serves as the payment method
for nearly 30 percent of transactions in the USA.
The market for retail cash handling services beyond
armored transport is substantially less developed in
both the USA and Europe. The division’s approach is to
offer more end-to-end solutions integrating transport,
deposit preparation, processing and reporting functions
into a complete offer. Much of the cost of handling cash
results from duplication of effort. Securitas’ objective is
to eliminate unnecessary steps by combining services
and introducing appropriate equipment and technology.
One such solution for multi-location retailers and
restaurants is SafePoint, which incorporates an electronic
safe, armored transport, deposit processing and
timely consolidated reporting for a fi xed monthly fee.
A franchisee of one restaurant chain reported that, for its
30-restaurant operation, this solution ”brought tens of
70 SECURITAS 2005