The following is a summary of the Securitas AB (Publ) (SCTBF) Q1 2024 Earnings Call Transcript:
Financial Performance:
Securitas AB reported Q1 2024 organic sales growth of 7%, with an improved operating margin of 6% primarily driven by North America and Ibero-America operations.
Operating cash flow faced a negative impact of -15%, and the net debt-to-EBITDA ratio was 2.9 at the quarter end, with the company targeting to maintain it below 3.
Security services saw a growth of 4%, and the operating margin improved to 4.4%.Technology & Solutions presented 7% real sales growth and an improved operating margin of 10.2%.
The company's strong liquidity position was accentuated by issuing a six-year €500 million Eurobond to refinance existing debt.
Improved financial position facilitated them to replace short-term debt with long-term funding and led to S&P upgrading the company's rating to pre-STANLEY acquisition levels.
Business Progress:
So far, the integration of STANLEY Security has progressed well despite operational impacts due to system and support transitions predominantly in Europe.
The company expects performance improvement in Europe in Q2 amid ongoing transitions and intensive integration work for system improvements.
With significant integration effort related to the STANLEY acquisition, North America reported 4% organic sales growth.
In Europe and Ibero-America, organic sales growth stood at 10% and 6% respectively.
The company has initiated an extensive transformation to combine presence, technology, and data and aims to reach 8% margin by 2025.
It also plans to restart its M&A activities majorly in the Technology and Solutions space.
Despite facing challenges like personnel shortage and pending invoices, plans are underway to overcome them and drive business growth in upcoming years.
Securitas also expects to grow its technology and integrated solution between 8% and 10% per year based on its robust client pipeline and comprehensive product offerings.
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