SECURITAS AB Annual Report 2011

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2 CEO statement The key to Securitas’ success lies in working closely with our customers, utilizing our innovative skills and identifying and suggesting cost-efficient security solutions. Securitas Annual Report 2011 Specialization Makes a Difference The decrease in earnings per share in 2011 was disappointing for Securitas after having reported our best year ever in 2010. We can complain and explain, but this changes nothing – the outcome remains the same. However, due to all the measures we are taking and the strategy we are pursuing, our performance will improve in the coming years. The security services market is mature in most of our areas of operation, with low added value, high price transparency and a fragmented competitive landscape. In many countries, the market is also poorly regulated and has a low barrier to entry. If you are unable to prove your added value in such an environment, the only remaining weapon will be price, which turns services into a commodity with weak profitability as a result. ORGANIC SALES GROWTH VS. OPERATING MARGIN, PER QUARTER % 6 4 2 0 –2 –4 Q1 Q2 Q3 Q4 2007 Q1 Q2 Q3 Q4 2008 Operating margin Organic sales growth At Securitas, we are convinced that focusing on specialization rather than diversification will allow us to break this vicious circle. Our recipe for success contains the following three ingredients: 1. Grow organically in line with the security services market 2. Make acquisitions using part of the free cash flow that we generate 3. Improve the operating margin by creating added value for our customers 1. Organic sales growth Over the past five years, we have grown organically in line with the security services market, although differences exist in various regions over the years. In 2011, organic sales growth was 3 percent. We gained market shares in North America by achieving 4 percent organic sales growth in 2011, while our market share in a few countries in Europe declined due to the loss of a few important contracts early in the year. The 11 percent growth in Ibero-America was largely attributable to a favorable trend in Latin America. Q1 Q2 Q3 Q4 2009 Q1 Q2 Q3 Q4 2010 Q1 Q2 Q3 Q4 2011
2. Acquisitions Approximately half of the free cash flow we generate is used to pay dividends to our shareholders. This has amounted to an average annual yield of over 4 percent on the share over the past five years. The other half of the free cash flow is allocated to acquisitions. Acquisitions should add expertise and key competencies, increase our specialization as well as our global footprint. In 2011, we made 19 major acquisitions that included 24 900 employees and generated total annual sales of MSEK 4 500. One of the biggest acquisitions was a major security operation in the United Kingdom, making us the second largest player in the British market with a market share of nearly 20 percent. We also strengthened our position in the U.S. primary government security services market and completed a number of important acquisitions in Latin America. Over the past five years, we have made 76 major acquisitions, including a total of 90 400 employees and generating total annual sales of MSEK 12 500. In 2008, Loomis was spun off to the shareholders, reducing sales with just over MSEK 11 000. The net debt, adjusted for foreign exchange, was basically the same at the end of 2011 as it was five years ago. Since 2007, we have entered the market in 21 new countries, and with a presence in 51 countries, we are now a truly global security company – and the only pan-European security company. Our plan is to be present in at least 60 countries by the end of 2014 in order to meet the needs of our global customers. In 2011, real sales growth including acquisitions totaled 11 percent, which is the highest figure reported since 2002. 3. Improved operating margin The main challenge in coming years will be to improve our operating margin. This work will focus on two areas. Important figures and events during 2011 Sales, income and organic sales growth · Total sales MSEK 64 057 (61 340) · Organic sales growth 3 percent (1) · Operating margin 5.3 percent (6.1) · Proposed dividend SEK 3.00 (3.00) Financial targets · Earnings per share SEK 4.75 (5.71) · Free cash flow to net debt ratio 0.08 (0.24) Acquisitions · 19 major acquisitions in mature and new markets, with 24 900 employees and annual sales equivalent to approximately MSEK 4 500: Interseco (the Netherlands), Adria Ipon Security (Bosnia and Herzegovina), Seguridad y Turismo Segutouring (Ecuador), Chubb Security Personnel (the United Kingdom), Seguricorp (Chile), Consultora Videco (Argentina), Security Consultants Group (USA), Assistance Sécurité Gardiennage (France), Al Sharika Al Muatfawika Likhadamat Al Amin Wa Al Himaya (Jordan), Zvonimir Security (Croatia), Sensormatic Guvenlik Group (Turkey), Chubb Guarding Services (Singapore), Sistem FTO (Serbia), Orbis Security Solutions (South Africa), Cobelguard (Belgium), Ave Lat Sargs (Latvia), Europinter & ECSAS Gardiennage (France), Fuego Red (Argentina), CSS Internacional (Costa Rica). “ We will only improve our operating margins… CEO statement Securitas Annual Report 2011 3
Page 1 and 2: Annual Report 2011
Page 3 and 4: Operating income before by business
Page 5: “ Specialization rather than dive
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
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Page 26: 22 Presentation of our business New
Page 29 and 30: · Increased use of technology. Inc
Page 31 and 32: Europe, 4-6 % market growth Growth:
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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 47 and 48: Supervisory Board (Finansinspektion
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income and expenses in the statemen
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Volume-related factors The first tw
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Aimé Lyagre b. 1959 Chief Operatin
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60 The formal annual accounts and t
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62 Annual Report Report of the Boar
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70 Annual Report Consolidated finan
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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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