SECURITAS AB Annual Report 2011

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24 The security services market Securitas Annual Report 2011 Continued Global Growth The global security services market has continued to experience long-term growth and shown resilience in the economic downturn. The global security services market employs several million people and has annual sales of more than USD 80 billion. In the long term, the industry is expected to grow approximately 7 percent annually. Security services are in demand all over the world, in all industries and in both the public and private sectors, which means that our total market is well diversified. Security needs must be fulfilled so that growth and development can prosper. Therefore, the demand for our services is closely linked to global economic development and social and demographic trends. As the global economy grows and develops, so do we. Solid base for growth Besides general economic growth, the main driving forces for growth in the security services industry are: · Increased privatization. Many countries currently choose to outsource their security services needs to private actors. This is done to control or reduce public spending and, sometimes, to open the market for competition due to political decisions. · Continued industrialization. Increased industrial activity leads to investments in factories, offices and other workplaces that all have their specific security needs. Market growth SECURITY MARKET GROWTH, USA – GUARDING AND MOBILE SERVICES % 10 5 0 –5 –10 Market growth Securitas GDP real SECURITY MARKET GROWTH, EUROPE – GUARDING AND MOBILE SERVICES % 10 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Securitas · Increased urbanization. Globally, urbanization leads to a higher population density and greater social differences. This disparity causes social tension and insecurity, creating a need for additional security services. · Growing middle class. In mature markets, to some extent, but particularly in developing markets, more people are leaving poverty to form a growing middle class whose disposable income and net worth are higher. People have more to protect and can also afford to do so, which fuels demand for security services. · Investment in infrastructure. Investments in real estate, public transport, public logistic hubs and other infrastructure create a need to safeguard these assets, which increases demand for security SECURITY services. MARKET GROWTH, USA – GUARDING AND MOBILE SERVICES Important % market trends The driving forces for growth described above 10 also create trends in the various security services requested 5 by our customers. The most important trends in the security services market today are 0 increased use of technology, customized and cost-effective –5 services, and a greater focus on –10 risk management. Market growth Securitas GDP real SECURITY MARKET GROWTH, EUROPE – GUARDING AND MOBILE SERVICES % 10 5 0 –5 –10 2003 2004 2005 2006 2007 2008 2009 2010 2011 Market growth Securitas GDP real Source: Securitas 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Securitas
· Increased use of technology. Increased use of technology allows security companies to offer customers even higher efficiency and quality in security solutions. The higher the labor costs in a country, the more attractive it becomes to raise the technological level of the security solution. However, countries with low labor costs are also showing greater interest in using more technology in security solutions. · Customized and cost effective services. Each industry, company and operation has specific needs and requirements in terms of security. Customers expect suppliers to identify and respond to their specific challenges, providing specialist know-how and dedicated resources. If security suppliers can meet these challenges, they will be granted more responsibility by companies. Customers are generally prepared to pay more for a service with greater content, higher quality and relevant specialist skills. In certain markets, there is also a willingness to pay a premium to have one contact person in charge of the entire solution, thus gaining better control and more effective administration. · Greater focus on risk management. Senior management is devoting greater attention to security issues, and senior executives are investing more time in discussing and making decisions concerning security issues. Factors that contribute to the greater attention include a higher level of insecurity in society, the increased cost of disruptions to businesses, and greater security demands by customers and insurers. Companies usually opt Main competitors to outsource security when enhancing it, since security activities are not considered part of their core business. Companies are also using security consulting services more often, enabling the customer’s management to proactively identify risks and put appropriate mitigating actions in place. Leading market position Securitas is one of the leading security services providers worldwide. We have grown from a local Scandinavian security company to a global security services provider with a presence in 51 countries. Our market-leading position in many countries is the result of strong organic sales growth and many acquisitions over the years. We have developed strong know-how in order to meet our customers’ most complex security demands. Our size, combined with our long heritage and experience, allows us to specialize and build industryspecific knowledge to reduce risk for our customers. We also share knowledge and ideas across borders, and use locally developed best practices worldwide to increase the quality of our services. We continuously invest in technological knowhow to adapt our solutions to customer needs and add value to our core security services. Our global footprint gives us a competitive edge. Many customers today are looking for security services providers that can deliver quality in all their countries of operation rather than buying the services locally in each country. Securitas is one of few actors that can provide this service. G4S Prosegur Allied Barton Home country UK Spain USA Ownership Listed Listed Private Employees 635 000 120 000 50 000 Primary markets North America, Latin America, Nordic region, United Kingdom, Eastern Europe and New Markets Primary services Guarding, Monitoring, Security Systems, Secure Facilities Management, Consulting and Secure Transport Services Spain, Portugal, France, Italy, Latin America and Germany Guarding, Monitoring, Systems, Alarms and Cash Handling USA Guarding, Patrolling and Background Screening The security services market SECURITY SERVICES MARKET SIZE 2011 (OUTSOURCED GUARDING) USD billion 75 60 45 30 15 0 2006 2007 2008 2009 ■ Europe, 30 ■ North America, 18 ■ Latin America, 10 ■ Asia,* 15 ■ Africa/Middle East, 5 ■ Japan, 4 ■ Total world, 82 * Excluding Japan Securitas Annual Report 2011 25
Page 1 and 2: Annual Report 2011
Page 3 and 4: Operating income before by business
Page 5 and 6: “ Specialization rather than dive
Page 7 and 8: 2. Acquisitions Approximately half
Page 9 and 10: The key to success lies in “ work
Page 11 and 12: Knowledge Leader in Security Securi
Page 13 and 14: We specialize in customer segments
Page 16 and 17: 12 Presentation of our business Ove
Page 18 and 19: 14 Presentation of our business Sec
Page 22 and 23: 18 Presentation of our business Mob
Page 26: 22 Presentation of our business New
Page 31 and 32: Europe, 4-6 % market growth Growth:
Page 33 and 34: Greater customer value when investi
Page 35 and 36: A Challenging Year At year-end, the
Page 37 and 38: LARGEST SHAREHOLDERS AT DECEMBER 31
Page 39 and 40: Governance and Management
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Page 43 and 44: The work of the Board of Directors
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Page 49 and 50: Enterprise risk management process
Page 51 and 52: all risks related to the infrastruc
Page 53 and 54: tions deemed to be risk areas, for
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Page 57 and 58: income and expenses in the statemen
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Page 61: Aimé Lyagre b. 1959 Chief Operatin
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76 Annual Report Notes and comments
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100 Annual Report Notes and comment
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Securitas AB P.O. Box 12307 SE-102
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SECURITAS AB Annual Report 2011

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