annual report 2016 - securitas analysis of incidents is becoming increasingly important. however,...
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Contributing to a Safer Society
CEO statement 2–4
Strategy: Securitas' service offering 6–7
Strategy: creating value for our customers 8–9
Strategy: creating value for our shareholders 10–11
Strategy: growth 12–13
Overview – business segments 14
Security Services North America 16
Security Services Europe 16
Security Services Ibero-America 17
Africa, Middle East and Asia 17
Securitas’ responsibilities 18–25
Corporate governance and management 26–45
Corporate governance 26–33
Securitas management model – Toolbox 27
Compliance with the Code 31
Board of Directors 32–33
Group Management 34–35
Enterprise risk management (ERM) and internal control 36–44
Auditor’s report on Corporate Governance Statement 45
Annual Report 46–131
Securitas’ financial model 46–47
Report of the Board of Directors 49–57
Consolidated financial statements 58–64
Notes and comments to the consolidated financial statements 65–115
Five-year overview 114–115
Parent Company financial statements 116–118
Notes and comments to the Parent Company financial statements 119–125
Signatures of the Board of Directors 126
Auditor’s report 127–131
Quarterly data 132–133
The Securitas share 134–135
Financial information and invitation to the Annual General Meeting 136
This is a translation of the original Swedish Annual Report. In the event of differences between the English translation and the Swedish original, the Swedish Annual Report shall prevail.
Organic sales growth was 7 percent.
Organic sales growth, %
Size Securitas employs more than 335 000 people in 53 countries. In 2016, total sales amounted to MSEK 88 162 and operating income before amortization to MSEK 4 554.
Read more on page 14.
Markets Securitas operates in 53 countries throughout North America, Europe, Latin America, Africa, the Middle East and Asia. Securitas is organized into three business segments: Security Services North America, Security Services Europe and Security Services Ibero-America.
Read more on pages 16–17.
* Includes AMEA.
Financial targets Securitas has two financial targets. The first target is related to the income statement; an annual average increase in earnings per share of 10 percent. The second target is related to the balance sheet; a free cash flow to net debt ratio of at least 0.20.
Read more on pages 46–47 and 71–73.
The free cash flow to net debt ratio decreased from 0.22 to 0.13.
14 15 1612 13
65 700 66 458
80 860 70 217 88 162
Security Services North America 41%
Security Services Europe 45%
Security Services Ibero-America 12%
4.11* 5.67 6.67
14 15 1612 13
14 15 1612 13
Security Services in North America and Europe represent 86 percent of total sales.
Markets in which Securitas conducts operations: Argentina, Austria, Belgium, Bosnia and Herzegovina, Cambodia, Canada, Chile, China, Colombia, Costa Rica, Croatia, the Czech Republic, Denmark, Ecuador, Egypt, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Jordan, Latvia, Luxembourg, Mexico, Montenegro, Morocco, the Netherlands, Norway, Peru, Poland, Portugal, Romania, Saudi Arabia, Serbia, Singapore, Slovakia, South Africa, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Thailand, Turkey, the United Arab Emirates, the UK, Uruguay, the US and Vietnam.
The share At year-end, the closing price of the Securitas share on Nasdaq Stockholm was SEK 143.40, corresponding to a market capitalization of MSEK 49 891 (45 229). The share price increased by 10 percent in 2016, compared with the OMX Stockholm Price index, which increased by 6 percent. Earnings per share amounted to SEK 7.24 (6.67) in 2016. The Board proposes that a dividend of SEK 3.75 (3.50) per share be paid to shareholders.
Read more on pages 134–135.
Rest of world 8% Sweden 64%
Shareholders per country, votes.
Swedish shareholders held 64 percent of the votes.
Earnings per share rose from SEK 6.67 to SEK 7.24, an increase of 9 percent.
* Adjusted for items affecting comparability and impairment losses.
Technology Technology is strengthening
Securitas’ delivery of security services and solutions. Providing our customers
with the right technology, in combination with our people and their knowledge,
makes security more effective and more cost efficient.
People Our more than 335 000 employees
are committed to strengthening our customers’ security. Unity and co-operation
are key to ensuring that we think globally and act locally, provide security according to
our customers’ needs and are engaged in the communities in which we operate.
Shareholder value increases steadily as Securitas
utilizes technology in its solutions. This enables enhanced security
for our customers and higher operating margins.
See page 10.
Utilizing large data volumes in combination with real-time
analysis of incidents is becoming increasingly important. However, its ultimate application lies in Securitas
being able to predict and prevent incidents from happening.
See page 13.
Intelligent cameras can analyze situations and alert
security officers when suspicious behavior is identified. This allows
Securitas' mobile patrol to quickly handle the incident.
See page 6.
Creating added customer value by providing services in addition
to security is a growing part of our offering. Cameras, for example, can be
used to count people in a cashier environment, helping the business to
streamline its operations. See page 8.
Securitas – shaping global security of tomorrow
Knowledge Group-wide access to in-depth
knowledge and experience enables us to lead the transformation of the security
industry. Sharing of knowledge, enhanced by further digitization of Securitas’ opera-
tions, means that we can provide our customers with superior real-time analytics
and solutions for predictive security.
Fire and safety services incorporate planning and preparation, evacuation
procedures and drills as well as fire-fighting services and lifesaving. See page 12.
Attracting and retaining our most valuable assets – our
employees – is crucial to Securitas’ success. This includes a thorough
onboarding process and con - ti nuous education.
See page 19.
Securitas Operation Centers coordinate and manage all of our
operations. Technology, people and knowledge are combined to ensure that the right security measures are in place and that customer requests
are handled appropriately. See page 6.
Securitas – shaping global security of tomorrow
Securitas is leading the ongoing transformation of the security industry from traditional guarding to a much broader spectrum of protective services. Our progress is based on efficiently integrating technology, people and knowledge – combining on-site, mobile and remote guarding with electronic security solu- tions, fire and safety, and corporate risk management. Our focus on achieving our long-term financial goals while delivering superior customer value in our daily operations is proving successful. Securitas’ results for 2016 demonstrate that we are able to combine the two; earnings per share increased with 9 percent compared with 2015. 2016 was our strongest year to date.
Year 2017 represents a milestone in Securitas’ efforts to drive the security industry forward. It marks a shift toward digitizing our core operations. This means all new customer contracts and all renew-als across most markets will be operated and reported in a digital format, directed by our Securitas Operation Centers (SOC). In 2018, we expect all data at all customer sites to be reported in a digital format.
This strategy entails significant changes in terms of how we deliver security. In addition to imple- menting fully integrated systems, capitalizing on the opportunities presented by digitization is one of Securitas’ principal priorities.
Detecting crime before it happens As the transition to Group-wide digital systems continues, Securitas is moving closer to achieving its vision for 2020. Our short and medium-term actions are well under way, with internal projects to address SOC consistency and IT infrastructure, as well as strategic acquisitions in electronic secu- rity completed during the year. Securitas’ focus is now shifting to the next phase of our long-term ambition – predictive security.
Securitas’ strengthened ability to report, analyze and utilize large volumes of data will pro