SECURITAS AB Annual Report 2011

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88 Annual Report Notes and comments to the consolidated financial statements THE GROUP’S INTEREST BEARING LIABILITIES AND ASSETS PER CURRENCY AS PER DECEMBER 31, 2010–2011 Currency Amount, MSEK Duration (days) Current book cost (incl. credit margin) Interest rates, +1% Net impact on income statement due to 1% increase 1 Interest rates, –1% Net impact on income statement due to 1% decrease 1 December 31, 2011 uSD liabilities -4 254 448 2.55% 3.14% -18 1.95% 19 EuR liabilities -4 454 260 5.81% 6.26% -15 5.37% 14 GBP liabilities -926 1 3.03% 4.03% -7 2.03% 7 SEK liabilities -3 039 67 2.01% 3.01% -22 1.11% 20 Other currencies liabilities -392 1 9.42% 10.42% -3 8.42% 3 Total liabilities -13 065 250 3.78% 4.46% -65 3.12% 63 uSD assets 296 7 0.00% 1.00% 2 0.00% 0 EuR assets 536 15 0.39% 1.39% 4 0.09% -1 GBP assets 32 1 1.08% 2.08% 0 0.08% 0 SEK assets 1 370 3 1.54% 2.54% 10 0.84% -7 Other currencies assets 482 7 9.42% 10.42% 4 8.42% -4 Total assets 2 716 6 2.54% 3.54% 20 1.94% -12 Total -10 349 – 4.10% – -45 – 51 December 31, 2010 uSD liabilities -3 912 316 2.83% 3.13% -9 2.53% 9 EuR liabilities -4 579 513 5.81% 6.27% -16 5.36% 15 GBP liabilities -604 1 2.85% 3.85% -4 1.85% 4 SEK liabilities -1 699 56 0.00% 0.00% 0 0.00% 0 Other currencies liabilities -276 1 7.40% 8.40% -2 6.40% 2 Total liabilities -11 070 332 3.47% 4.11% -31 3.36% 30 uSD assets 356 7 0.00% 1.00% 3 0.00% 0 EuR assets 1 468 11 0.61% 1.61% 11 0.00% -7 GBP assets 112 1 0.71% 1.71% 1 0.00% -1 SEK assets 515 6 0.27% 1.27% 4 0.00% -1 Other currencies assets 410 7 7.40% 8.40% 3 6.40% -3 Total assets 2 861 8 1.36% 2.43% 22 0.91% -12 Total -8 209 – 4.56% – -9 – 18 1 The 1 percent increase/decrease in interest rates is calculated by adjusting the floating rate accordingly and applying this rate to the liability to establish the impact on net financial items in the income statement. This is further adjusted by the effective corporation tax rate. Interest rate fixing It is the policy of Securitas to use interest rate derivatives if required to manage its interest rate risk and as a consequence the Group’s financing INTEREST FIXING PER CURRENCY 1 costs. The duration for these derivatives does not normally exceed four years. Group policy allows for the use of both options-based and fixed-rate products. December 31, 2011 December 31, 2012 December 31, 2013 Amount Amount Currency MSEK MLOC Rate 2 Amount Amount % MSEK MLOC Rate 2 Amount Amount % MSEK MLOC Rate 2 final % maturity uSD 1 737 252 2.67% 1 220 177 2.56% 276 40 3.10% May 2014 EuR 2 453 275 6.59% 2 453 275 6.59% 0 0 0.00% January 2013 Total 4 190 – – 3 673 – – 276 – – 1 Refers to interest rate fixing with a maturity in excess of three months. 2 Average rate including credit margin. Securitas Annual Report 2011
Foreign currency risks Financing of foreign assets – translation risk Translation risk is the risk that the SEK value of foreign currency equity will fluctuate due to changes in foreign exchange rates. Securitas’ foreign currency capital employed as of December 31, 2011 was MSEK 19 070 (16 843 and 16 579). Capital employed is financed by loans in local currency and shareholders’ equity. This means that Securitas, from a Group perspective, has shareholders’ equity in foreign currency that is exposed to changes in exchange rates. This exposure gives rise to a translation risk and consequently unfavourable changes in exchange rates could have a negative effect on the Group’s foreign net assets when translated into SEK. With the object of minimizing the impact of changes in exchange rates on the Group’s net debt to equity ratio, Securitas aims to maintain a long-term debt to equity ratio in USD and EUR that is close to the Group’s total debt to equity ratio. CAPITAL EMPLOYED AND FINANCING PER CURRENCY AS PER DECEMBER 31, 2009–2011 MSEK EuR uSD GBP Other currencies The tables below show how the Group’s capital employed is distributed by currency, and its financing. They also show the sensitivity of the net debt and capital employed to changes in the SEK exchange rate. The consolidated statement of income is affected by the translation to SEK of the statements of income of foreign subsidiaries. As these subsidiaries essentially operate only in local currency, their competitive situation is not affected by changes in exchange rates and since the Group as a whole is geographically diversified, this exposure is not hedged. Group internal currency flows between holding companies and subsidiaries in respect of dividends are normally hedged to SEK immediately the amount is agreed between the internal parties. Total foreign currencies SEK Total Group Total Group +10% 1 Total Group –10% 1 December 31, 2011 Capital employed 6 989 7 757 1 210 3 114 19 070 484 19 554 21 461 17 647 Net debt -3 966 -3 955 -893 89 -8 725 -1 624 -10 349 -11 222 -9 477 Non-controlling interests 4 – – -1 3 – 3 3 2 Net exposure 3 019 3 802 317 3 204 10 342 -1 140 9 202 10 236 8 168 Net debt to equity ratio 1.31 1.04 2.82 -0.03 0.84 -1.42 1.12 1.10 1.16 December 31, 2010 Capital employed 6 834 7 270 709 2 030 16 843 304 17 147 18 831 15 463 Net debt -3 119 -3 555 -491 135 -7 030 -1 179 -8 209 -8 912 -7 506 Non-controlling interests 3 – – – 3 – 3 3 3 Net exposure 3 712 3 715 218 2 165 9 810 -875 8 935 9 916 7 954 Net debt to equity ratio 0.84 0.96 2.25 -0.06 0.72 -1.35 0.92 0.90 0.94 December 31, 2009 Capital employed 7 466 7 125 319 1 669 16 579 630 17 209 18 867 15 551 Net debt -3 743 -3 637 -26 173 -7 233 -1 155 -8 388 -9 111 -7 665 Non-controlling interests 5 – – 3 8 – 8 9 7 Net exposure 3 718 3 488 293 1 839 9 338 -525 8 813 9 747 7 879 Net debt to equity ratio 1.01 1.04 0.09 -0.09 0.77 -2.20 0.95 0.93 0.97 1 Changes in capital employed due to changes in foreign exchange rates are accounted for in other comprehensive income. Consequently, they do not impact net income. Transaction risk Transaction risk is the risk that the Group’s net income will be affected by changes in the value of commercial flows in foreign currencies due to fluctuating exchange rates. The nature of the business is domestic rather than cross-border and consequently foreign currency transaction risk is not significant. Annual Report Notes and comments to the consolidated financial statements Financing and liquidity risk The Group’s short-term liquidity is ensured by maintaining a liquidity reserve (cash and bank deposits, short-term investments and the unutilized portion of committed credit facilities), which should correspond to a minimum of 5 percent of consolidated annual sales. As of December 31, 2011 the shortterm liquidity reserve corresponded to 8 percent (7 and 13) of the Group’s annual sales. The Group’s long-term financing risk is minimized by ensuring that the level of long-term financing (shareholders’ equity, long-term committed loan facilities and long-term bond loans) at least matches the Group’s capital employed. Per December 31, 2011 long-term financing corresponded to 142 percent (135 and 132) of the Group’s capital employed. Long-term financing of the Group should be well balanced among different sources. The aim is that long-term committed loan facilities and long-term bond loans should have an average maturity of more than 3.5 years. As per December 31, 2011 the average maturity was 2 years and 10 months. The following tables summarize the Group’s liquidity risk at end 2011, 2010 and 2009 respectively. Securitas Annual Report 2011 89
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Annual Report 2011
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Operating income before by business
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“ Specialization rather than dive
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2. Acquisitions Approximately half
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The key to success lies in “ work
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Knowledge Leader in Security Securi
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We specialize in customer segments
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12 Presentation of our business Ove
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· Increased use of technology. Inc
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Europe, 4-6 % market growth Growth:
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Greater customer value when investi
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A Challenging Year At year-end, the
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LARGEST SHAREHOLDERS AT DECEMBER 31
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Governance and Management
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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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