Q2 2024 Securitas AB Earnings Call Transcript
Key Points
- Securitas AB (SCTBF) delivered 5% organic sales growth in Q2 2024, with Technology & Solutions achieving 8% growth.
- The operating margin improved to 6.9%, driven by all business segments, with Europe showing the largest year-on-year improvement.
- The company achieved SEK1.25 billion in recurring monthly revenue and more than $50 million in synergy takeout post-Stanley Security acquisition.
- North America recorded a strong operating margin of 9.2% in Q2, driven by technology business synergies and higher operational efficiency.
- Securitas AB (SCTBF) is making significant progress in active portfolio management and increasing price ratios for new business, contributing to improved margins.
- The termination of a larger aviation contract in North America negatively impacted the growth in the Security Services segment.
- Client retention in North America was lower than normal at 86%, impacted by the airport contract termination.
- The inflationary environment in Turkey accounts for a significant share of the growth in Europe, indicating reliance on external factors.
- The company is facing increased costs related to the Stanley integration program, with estimates rising to SEK550-600 million for 2024.
- Securitas AB (SCTBF) continues to experience challenges with ongoing system and support transitions in Europe, affecting operational efficiency.
Good afternoon, everyone, and a warm welcome to our Q2 update. We are shaping the leading company in the security industry and the execution of the strategy is generating results. We had solid performance in all business segments in the second quarter, delivered 5% organic sales growth, and the real sales growth for Technology & Solutions was 8%, when we are excluding the impact of the divestment in Argentina. The operating margin improved to 6.9%, and this was driven by all business segments this quarter. And I want to highlight that the actions initiated in Europe with emphasis on active portfolio management and increasing price ratios for new business are starting to generate a positive impact, and Europe represented the largest year-on-year improvement in the results.
And stronger demand and improved operational efficiency in aviation also contributed to the improvement in Europe. Importantly, the price wage balance in the group is slightly positive in the first six months. And looking at the cash flow, the operating cash
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
