Securitas AB Annual Report 2005

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Notes and comments to the consolidated fi nancial statements CONT. NOTE 8 SEGMENT REPORTING Primary segments and divisional overview Income Security Services USA Security Services Europe Securitas Systems Direct Secondary segments and geographical information Total sales Assets Investments in fi xed assets IFRS IFRS IFRS IFRS IFRS IFRS MSEK 2005 2005 2004 2005 2004 2005 2004 Nordic region Europe excluding 9,637 8,870 10,833 9,836 –715 –761 Nordic region 30,171 26,684 19,389 16,213 –1,132 –944 USA 24,679 22,876 15,488 12,443 –356 –255 Rest of world 1,527 1,257 579 351 –17 –10 Group 66,014 59,687 46,289 38,843 –2,220 –1,970 Cash Handling Services Other Eliminations 1 Group IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS MSEK 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 Sales, external 21,616 20,017 24,757 23,084 5,331 4,327 2,701 2,144 11,566 10,073 43 42 – – 66,014 59,687 Sales, intra-group – – 239 205 467 397 5 4 15 9 – – –726 –615 – – Total sales 21,616 20,017 24,996 23,289 5,798 4,724 2,706 2,148 11,581 10,082 43 42 –726 –615 66,014 59,687 Organic sales growth, % 4 –2 5 4 6 1 23 28 2 5 – – – – 5 3 Operating income before amortization 1,080 982 1,873 1,849 669 554 258 201 680 714 –259 –274 –7 – 4,294 4,026 Operating margin, % Amortization of acquisition related intangible fi xed 5.0 4.9 7.5 7.9 11.5 11.7 9.5 9.4 5.9 7.1 – – – – 6.5 6.7 assets Acquisition related –33 –34 –40 –26 –16 –9 –9 –6 –25 –25 0 0 – – –123 –100 restructuring costs Operating income after – –1 –1 –21 –34 –3 – – 0 –1 – – – – –35 –26 amortization Financial income 1,047 947 1,832 1,802 619 542 249 195 655 688 –259 –274 –7 – 4,136 3,900 and expense Share of income in – – – – – – – – – – –487 –516 – – –487 –516 associated companies – – – – – – – – – – 12 – 12 – Income before taxes – – – – – – – – – – – – – – 3,661 3,384 Taxes – – – – – – – – – – –950 –855 2 – –948 –855 Net income for the year Operating cash fl ow – – – – – – – – – – – – – – 2,713 2,529 Security Services USA Security Services Europe Securitas Systems Direct Cash Handling Services Other Eliminations Group IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS MSEK Operating income 2005 2004 2005 2004 2005 2005 2004 2005 2004 2005 2004 2005 2005 2004 2005 2004 2005 2004 before amortization 1,080 982 1,873 1,849 669 554 258 201 680 714 –259 –274 –7 – 4,294 4,026 Investment in fi xed assets –177 –123 –606 –629 –147 –118 –577 –443 –674 –644 –39 –13 – – –2,220 –1,970 Reversal of depreciation Change in operating 161 104 584 526 123 106 316 236 733 614 32 27 – – 1,949 1,613 capital employed –77 –145 65 –14 –182 128 –16 42 167 –187 85 137 7 – 49 –39 Cash fl ow from operating activities Cash fl ow from operating 987 818 1,916 1,732 463 670 –19 36 906 497 –181 –123 – – 4,072 3,630 activities, % 91 83 102 94 69 121 –7 18 133 70 70 45 – – 95 90 Capital employed and fi nancing Security Services USA Security Services Europe Securitas Systems Direct Cash Handling Services Other Eliminations 1 Group IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS MSEK 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 Operating fi xed assets 740 543 2,106 1,978 355 312 815 843 2,843 2,887 112 147 –173 –187 6,798 6,523 Accounts receivable 3,463 2,680 4,229 3,710 1,471 1,117 234 232 1,330 1,287 5 6 –370 –204 10,362 8,828 Other assets 214 205 588 592 606 488 714 299 832 880 2,508 2,245 –249 –211 5,213 4,498 Other liabilities Total operating 3,078 2,490 5,492 4,688 1,533 1,342 660 543 2,589 2,333 1,626 2,314 –787 –602 14,191 13,108 capital employed 1,339 938 1,431 1,592 899 575 1,103 831 2,416 2,721 999 84 –5 – 8,182 6,741 Goodwill Acquistion related 6,873 5,831 5,587 4,962 2,424 1,936 51 13 2,848 2,551 9 9 – – 17,792 15,302 intangible fi xed assets Shares in associated 38 42 290 100 224 208 55 13 31 69 1 1 – – 639 433 companies Total capital – – – – – – – – – – 179 – – – 179 – employed Operating capital employed 8,250 6,811 7,308 6,654 3,547 3,547 2,719 1,209 857 5,295 5,341 1,188 94 –5 – 26,792 22,476 as % of sales Return on capital 6 5 6 7 15 11 41 39 21 24 – – – – 12 11 employed, % 13 14 26 28 19 20 21 24 13 13 – – – – 16 18 Net debt – – – – – – – – – – 11,945 10,633 – – 11,945 10,633 Shareholders’ equity – – – – – – – – – – 14,852 11,843 –5 – 14,847 11,843 Total fi nancing Net debt equity – – – – – – – – – – 26,797 22,476 –5 – 26,792 22,476 ratio/multiple – – – – – – – – – – – – – – 0.80 0.90 1 Eliminations shows the impact of eliminating internal profi t relating to sales of alarm installations that are used in combi contracts. This elimination has in previous years not been disclosed separately. NOTE 9 ALLOCATION OF REVENUE Sales The Group’s revenue is generated from different kinds of security services and the sale of alarm products. The breakdown of sales by division is provided in Note 8, Segment reporting. Financial income and expenses Interest income and borrowing costs are accounted in the statement of income in the period to which they are attributable. Financial income and expenses are specifi ed in Note 13. 90 SECURITAS 2005
NOTE 10 OPERATING EXPENSES Income statement classifi ed according to type of cost in summary MSEK IFRS 2005 IFRS 2004 Swedish GAAP 2004 Total sales 66,013.6 59,686.6 59,686.6 Salaries (Note 11) –38,422.3 –32,071.3 –32,071.3 Social benefi ts (Note 11) Depreciation and amortization –9,314.9 –8,132.3 –8,132.3 (Note 12, 16, 17, 18, 19) –2,042.3 –1,712.6 –2,794.8 Bad debt losses (Note 24) –119.0 –93.9 –93.9 Other operating expenses –11,979.1 –13,776.2 –13,749.7 Total operating expenses –61,877.6 –55,786.3 –56,842.0 Operating income 4,136.0 3,900.3 2,844.6 Audit fees and reimbursements MSEK PricewaterhouseCoopers IFRS 2005 IFRS 2004 Swedish GAAP 2004 – audit assignments 46.7 41.5 41.5 – other assignments1 IFRS 2005 46.7 47.3 62.7 62.7 Total PricewaterhouseCoopers 94.0 104.2 104.2 Other auditors – audit assignments 5.5 6.4 6.4 Total 99.5 110.6 110.6 1 Other assignments by PricewaterhouseCoopers includes fees for audit related advice on accounting including IFRS, IT, tax, acquisitions and treasury matters. NOTE 11 PERSONNEL Average number of yearly employees; distribution between women and men Notes and comments to the consolidated fi nancial statements Operating leasing contracts and rental contracts Fees paid during the year for operating leases for buildings, vehicles and machinery and equipment amounted to MSEK 1,022.0 (893.5 and 893.5). The nominal value of contractual future leasing fees is distributed as follows: Swedish GAAP MSEK IFRS 2005 IFRS 2004 2004 Maturity < 1 year 1,031.0 792.5 792.5 Maturity 1–5 years 2,585.8 1,924.6 1,924.6 Maturity > 5 years 362.2 1,715.5 1,715.5 Exchange rate differences, net1 MSEK Exchange rate differences included in IFRS 2005 IFRS 2004 Swedish GAAP 2004 Operating income amounted to: 0.4 –0.8 –0.8 1 Exchange rate differences included in fi nancial items are reported in Note 13. Women Men Total Swedish Swedish Swedish IFRS IFRS GAAP IFRS IFRS GAAP IFRS IFRS GAAP 2005 2004 2004 2005 2004 2004 2005 2004 2004 Nordic region 4,130 3,643 3,643 11,358 10,797 10,797 15,488 14,440 14,440 Europe excl. Nordic region 17,740 16,380 16,380 69,123 65,835 65,835 86,863 82,215 82,215 USA 25,272 25,554 25,554 76,056 73,371 73,371 101,328 98,925 98,925 Rest of world 1,354 1,108 1,108 11,954 9,465 9,465 13,308 10,573 10,573 Total 48,496 46,685 46,685 168,491 159,468 159,468 216,987 206,153 206,153 In 2005, the number of Board members and Presidents were 197 (203 and 203), of which 17 (13 and 13) were women. Staff costs for board of directors and presidents MSEK Salaries IFRS 2005 IFRS 2004 Swedish GAAP 2004 Of which bonuses Social benefi ts (of which pensions) Salaries Social benefi ts (of which pensions) Salaries Social benefi ts (of which pensions) Nordic region 52.6 21.3 (5.5) 51.8 19.9 (6.3) 51.8 19.9 (6.3) 16.0 13.6 13.6 Europe excl. Nordic region 112.6 21.7 (4.1) 107.2 20.1 (3.3) 107.2 20.1 (3.3) 31.3 29.7 29.7 USA 99.0 19.1 (9.5) 53.9 13.1 (7.5) 53.9 13.1 (7.5) 36.6 9.7 9.7 Rest of world 7.1 1.2 (0.2) 4.3 0.8 (0.3) 4.3 0.8 (0.3) 1.2 1.4 1.4 Total 271.3 63.3 (19.3) 217.2 53.9 (17.4) 217.2 53.9 (17.4) 85.1 54.4 54.4 Staff costs for other employees MSEK Salaries IFRS 2005 IFRS 2004 Swedish GAAP 2004 Social benefi ts (of which pensions) Salaries Social benefi ts (of which pensions) Salaries Social benefi ts (of which pensions) Nordic region 4,464.9 1,251.5 (274.7) 3,942.1 1,180.0 (236.9) 3,942.1 1,180.0 (236.9) Europe excl. Nordic region 14,517.9 4,867.9 (236.0) 12,655.1 4,347.0 (174.3) 12,655.1 4,347.0 (174.3) USA 17,987.8 2,876.6 (–5.2) 14,415.1 2,367.9 (2.4) 14,415.1 2,367.9 (2.4) Rest of world 1,180.4 255.6 (9.7) 841.8 183.5 (4.8) 841.8 183.5 (4.8) Total 38,151.0 9,251.6 (515.2) 31,854.1 8,078.4 (418.4) 31,854.1 8,078.4 (418.4) Total staff costs: board of directors, presidents and other employees MSEK Salaries IFRS 2005 IFRS 2004 Swedish GAAP 2004 Social benefi ts (of which pensions) Salaries Social benefi ts (of which pensions) Salaries Social benefi ts (of which pensions) Nordic region 4,517.5 1,272.8 (280.2) 3,993.9 1,199.9 (243.2) 3,993.9 1,199.9 (243.2) Europe excl. Nordic region 14,630.5 4,889.6 (240.1) 12,762.3 4,367.1 (177.6) 12,762.3 4,367.1 (177.6) USA 18,086.8 2,895.7 (4.3) 14,469.0 2,381.0 (9.9) 14,469.0 2,381.0 (9.9) Rest of world 1,187.5 256.8 (9.9) 846.1 184.3 (5.1) 846.1 184.3 (5.1) Total 38,422.3 9,314.9 (534.5) 32,071.3 8,132.3 (435.8) 32,071.3 8,132.3 (435.8) A complete list of the average number of yearly employees and salary costs by country is reported in the annual report submitted to the Swedish Patent and Registration Offi ce. Further information regarding the Group’s pensions and other long-term employee benefi ts can be found in Note 31. SECURITAS 2005 91 IFRS 2005 IFRS 2004 Swedish GAAP 2004
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Securitas AB Annual Report 2005
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Sales per region A world
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A positive 2005 lays the foundation
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A history of growth Securitas was f
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The wheel of fortune Rationalizatio
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Koncernen 12 Comments by the CEO 14
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and customers have been convinced t
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The Securitas Group - sales growth,
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From multi-service providers to sec
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The entire organization supports th
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Our values Our values - Integrity,
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New sales of customer contracts tha
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25 20 15 10 5 0 Return on capital e
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Risk business plans Each division a
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Swedish GAAP IFRS MSEK 2001 2002 20
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Income 2004 MSEK IFRS Q1 2004 IFRS
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Market capitalization & Enterprise
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Report of the Board of Directors -
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Financial overview BDM, Switzerland
Page 40 and 41: Financial overview Divestment of re
Page 42 and 43: Report of the Board of Directors -
Page 44 and 45: Security Services USA Security Offi
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
Page 70 and 71: Cash Handling Services One of the s
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: a certain percentage of the fi nal
Page 93 and 94: Notes and comments to the consolida
Page 95 and 96: Goodwill is tested on an annual bas
Page 97 and 98: NOTE 28 CHANGES IN SHAREHOLDERS’
Page 99 and 100: Pension cost MSEK IFRS 2005 Notes a
Page 101 and 102: Table 1A. Adjusted Consolidated Sta
Page 103 and 104: Free cash fl ow was not impacted by
Page 105 and 106: elating to the tax calculated on th
Page 107 and 108: Table 5. Consolidated Balance Sheet
Page 109 and 110: NOTE A GOODWILL MSEK Jan 1, 2004 De
Page 111 and 112: Statement of income MSEK NOTE Paren
Page 113 and 114: Parent Company changes in sharehold
Page 115 and 116: NOTE 42 PERSONNEL Average number of
Page 117 and 118: NOTE 50 LIQUID ASSETS Liquid assets
Page 119 and 120: To the Annual General Meeting of th
Page 122 and 123: Corporate Governance - Board of Dir
Page 124 and 125: Corporate governance - Report of th
Page 130 and 131: Corporate Governance - Report of th
Page 134 and 135: Corporate Information
Page 136 and 137: Corporate Information - Financial i
Page 138: Securitas Services Ltd. Berkshire H
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Securitas AB Annual Report 2005

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