SECURITAS AB Annual Report 2011

62
Annual Report
Report of the Board of Directors
Operating income after amortization
Amortization of acquisition related intangible assets amounted to
MSEK -218 (-164).
Acquisition related costs impacted the period by MSEK -194 (-90).
Restructuring and integration costs for Reliance Security Services and
Chubb Security Personnel in the United Kingdom amounted to
MSEK -99 and transaction costs for the acquisition of Chubb Security
Personnel was MSEK -11. Further information is provided in note 11.
Operating income after amortization was MSEK 2 973 (3 470).
Financial income and expenses
Financial income and expenses amounted to MSEK -493 (-502).
The finance net has been negatively impacted by the increase in net
debt in 2011.
Income before taxes
Income before taxes was MSEK 2 480 (2 968). The real change
was -11 percent.
Taxes, net income and earnings per share
The Group‘s tax rate was 29.9 percent (29.9).
Net income was MSEK 1 739 (2 081). Earnings per share amounted
to SEK 4.75 (5.71).
CONDENSED STATEMENT Of INCOME
ACCORDING TO SECuRITAS’ fINANCIAL MODEL
MSEK 2011 2010
Total sales 64 057.1 61 339.8
Organic sales growth, % 3 1
Production expenses -52 977.4 -50 076.0
Gross income 11 079.7 11 263.8
Selling and administrative expenses -7 766.9 -7 551.3
Other operating income 74.3 12.7
Share in income of associated companies -2.4 -1.0
Operating income before amortization 3 384.7 3 724.2
Operating margin, % 5.3 6.1
Amortization of acquisition related intangible assets -218.2 -164.3
Acquisition related costs -193.5 -89.6
Operating income after amortization 2 973.0 3 470.3
financial income and expenses -493.0 -502.3
Income before taxes 2 480.0 2 968.0
Taxes -741.4 -887.2
Net income for the year 1 738.6 2 080.8
Securitas’ financial model is described on pages 54–55.
n n n Operating items. n n n Net debt-related items.
n n n Goodwill, taxes and non-operating items. n n n Items related to shareholders’ equity.
Securitas Annual Report 2011
Development in the Group’s business segments
Security Services North America
SALES AND INCOME
MSEK 2011 2010
Total sales 22 356 22 731
Organic sales growth, % 4 -2
Operating income before amortization 1 270 1 380
Operating margin, % 5.7 6.1
Real change, % 2 4
Further information regarding the statement of income, cash flow and capital employed is provided in note 9.
Organic sales growth was 4 percent (-2) in the period, driven by contract
portfolio sales and extra sales. The sales of specialized security solutions as
part of total sales amounted to 7 percent (4).
The operating margin was 5.7 percent (6.1). The acquisition of Security
Consultants Group had a diluting impact of -0.1 percent. Start up costs
relating to the airport security contract in Canada had a negative impact on
the operating margin of -0.1 percent. Another negative impact relates to
timing of legislative tax adjustments and expiring Hiring Incentives to
Restore Employment (HIRE) Act tax grants. A tax adjustment under The
Federal Unemployment Tax Act (FUTA) was enacted in the fourth quarter
which is intended to be recovered in the price increases for 2012. In addition
a full year adjustment of State Unemployment Insurance (SUI) reconciliation
was made. The increase of payroll taxes as described above explains
almost -0.2 percent of the operating margin decline.
The U.S. dollar exchange rate had a negative effect on the operating
result in Swedish kronor. The real change was 2 percent in the period.
The client retention rate was 91 percent, which is a slight improvement
compared to last year. The employee turnover rate in the USA was 44 percent
(39).
Security Services Europe
SALES AND INCOME
MSEK 2011 2010*
Total sales 26 425 24 556
Organic sales growth, % 0 4
Operating income before amortization 1 003 1 300
Operating margin, % 3.8 5.3
Real change, % -20 10
* The comparatives have been restated due to operations moved between the segments Security Services
Europe, Security Services Ibero-America and Mobile and Monitoring.
Further information regarding the statement of income, cash flow and capital employed is provided in note 9.
Organic sales growth was 0 percent (4) in the period. Most countries had
positive organic sales growth, but the negative impact from mainly Belgium
and the United Kingdom hampered the development.
The operating margin was 3.8 percent (5.3). Previously lost contracts
had a negative effect by -0.5 percent and the dilution from the acquisitions
of Reliance Security Services and Chubb Security Personnel in the United
Kingdom amounted to -0.3 percent. Discrepancies between price and wage
cost increases, primarily in France and Sweden, had a negative impact of
-0.5 percent. Actions taken to restore the performance in Security Services
Europe resulted in restructuring costs negatively impacting the operating
margin by -0.2 percent.
The euro exchange rate had a slight negative impact on the operating
income in Swedish kronor. The real change was -20 percent in the period.
The client retention rate was slightly below 90 percent. The employee
turnover rate was 28 percent (28**).
** The employee turnover rate of 2010 has changed due to the move of Portugal and Spain into Security
Services Ibero-America.