Securitas sets progressive financial targets following Stanley acquisition

Stockholm, Sweden

Following the acquisition of Stanley Security, completed and consolidated into Securitas towards the end of July, the group has defined new financial targets of 8-10 percent technology & solutions annual average real sales growth, 8 percent group operating margin by year-end 2025 and a net debt to EBITDA ratio below 3.0x. Securitas presented the strategy and roadmap for these new targets, as well as a trading update for Stanley Security, at an investor update earlier this week.

Bringing together Securitas and Stanley Security is an industry-defining event, and the move brings the group an almost unparalleled position to serve client needs by joining forces to create a strong global tech platform.

The new financial targets are aligned with the strategy to be a security solutions partner with world-leading technology and expertise, strongly positioned to deliver superior growth and increased margins:

• 8-10 percent technology & solutions annual average real sales growth

• 8 percent Group operating margin by year-end 2025, with a >10 percent long-term operating margin ambition

• A net debt to EBITDA ratio below 3.0x

The new margin target replaces the previous target of an average increase in earnings per share of 10 percent and the margin targets in the respective business segments related to the business transformation programs in the Group.

The existing operating cash flow target of 70-80 percent of operating income before amortisation remains the same, and the new capital structure target of a net debt to EBITDA ratio of below 3.0x replaces the previous net debt to EBITDA ratio of on average 2.5x, and is estimated to be achieved in 2024.

The dividend policy is unchanged, remaining in a range of 50-60 percent of annual net income over time.

The strategic transformation ambition – to double the security solutions and electronic security sales by 2023, compared to 2018, is discontinued as the ambition was already fulfilled by the acquisition of Stanley Security.

According to the company, the integration of Stanley Security is proceeding well and according to plan. In 2021, Stanley Security had an installation backlog growth of 33 percent. Adjusted sales were approximately MUSD 1 650 with organic sales growth of 7 percent during the year, and the adjusted EBITDA margin was 11 percent.

For the first six months of 2022, Stanley Security had a record installation backlog, with growth of 18 percent compared to the same period last year. Adjusted sales were approximately MUSD 805 with organic sales growth of 3 percent. The adjusted EBITDA margin was 9 percent, temporarily impacted by the corona pandemic, supply chain issues, inflationary cost increases and obsolete pricing processes. The profitability improved in the second quarter 2022 compared to the first quarter 2022 with continued positive trend. Pricing, efficiency and cost actions have been implemented, and together with solid commercial momentum and accelerated value creation execution, profitability is expected to improve going forward.


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