Securitas Annual Report 2007

Mobile provides mobile security services for small and medium-sized businesses, while Monitoring provides electronic alarm services. The division operates in the European market.
Mobile’s services range from beat patrol, call-out services, and city patrol to key-holding services. The customer base consists of firms that cannot have or do not need a full-time security service. Mobile operates in 11 countries across Europe and has 8,600 employees in 37 areas and 274 branches.
Monitoring provides electronic alarm surveillance, and operates under the Alert Services brand. Its core business is to provide independent alarm, security and safety monitoring services for both homes and businesses. Alert Services operates in eight countries across Europe and has 700 employees.
Financial information
The organic sales growth in 2007 was 7 percent, compared to 4 percent the previous year. The growth is a result of the division’s growth strategy, including expansion of the sales organization.
In Mobile, strong organic sales growth was seen in markets such as the Netherlands, Norway and Spain. In Monitoring, strong organic sales growth was seen in Finland, the Netherlands and Poland.
The operating margin was 12.0 percent, compared to 13.5 percent in 2006, and has been impacted by the cost of investment in the sales organization.
Service offering
Mobile provides mobile security services such as beat patrol, call-out services, city patrol and key-holding services. The fundamental customer base consists of firms that cannot have or do not need a full-time security service. Sales, services, concepts and organization differ greatly from the specialized guarding business. In 2006 and 2007, Mobile focused on the sales process and concept development. As the sales process for mobile services is fast and based on volume, Mobile has built a dedicated sales organization, separate from operations.
Alert Services is a provider of electronic alarm surveillance and its core business is to provide independent alarm, security and safety monitoring services for both homes and businesses. In these main market segments, the business unit works with independent installers and sales partners, and is focused on providing a flexible service concept that integrates technical alarm monitoring, verification processes and response solutions. Another fast-growing market segment for Alert Services is the track and trace service for vehicles and other mobile objects. Much effort has been put into technological development, particularly in IP and broadband applications, track and trace and technology for reporting to partners and end-users.
Market
The market for mobile services is highly fragmented and difficult to measure, as most companies providing mobile services offer them as an integrated part of their security operations and not as a specialized service in a separate organization. The customer base of approximately 100,000 customers ranges from small family enterprises in manufacturing, retail and administrative services to hotel chains, gas stations and city councils. The average contract value is EUR 300 per month.
Alert Services is the only third-party monitoring service provider that offers cross-border services in Europe. Its market share in Sweden, Finland and the Benelux countries ranges between 16 and 25 percent. The market for the track and trace services is relatively new and has grown proportionally faster. Alert Services has provided this service for years, mainly in the Benelux countries, and has been at the forefront of developing services for this segment. Either directly or via partnerships (mainly within the Securitas organization), Alert Services offers an integrated service covering practically the whole of the European Union.
Strategy and objectives
Mobile and Monitoring have a clear focus on building a stronger and larger sales force in order to drive new sales and organic sales growth.
Our employees
In 2007, Mobile continued to focus on the sales process. As the sales process for mobile services is fast and based on volume, Mobile has started to build a dedicated sales organization, separated from operations. Sales specialists are now in place in most European countries and the objective is to have dedicated sales people in every country of operation.
A strong part of the value chain for Alert Services is the sales process, in which the business unit always works with partners – either third-party installers or dedicated sales partners. During the year Alert Services established an even more sales-oriented organization, cooperating with these partners.
During 2007, a number of managers have been trained under the Securitas Management Training Program.
Morten Rønning, President, Mobile
Lucien Meeus, President, Alert Services
Key figures and events in 2007
  • Total sales amounted to MSEK 4,836 (4,419). Organic sales growth amounted to 7 percent (4).
  • Operating income amounted to MSEK 578 (597). The operating margin was 12.0 (13.5).
  • Return on total capital amounted to 30 percent (31).
Financial key ratios    
MSEK 2007 2006
Total sales 4,836 4,419
Organic sales growth, % 7 4
     
Operating income before amortization 578 597
Operating margin, % 12.0 13.5
Real change, % –4
     
Cash flow from operating activities 569 545
Cash flow from operating activities, % 98 91
     
Operating capital employed 140 111
Operating capital employed as % of sales 3 3
     
Total capital employed 1,915 1,935
Return on capital employed, % 30 31
Mobile provides mobile security services for small and medium-sized businesses, while Monitoring provides electronic alarm services. The division operates in the European market.
 
Mobile’s services range from beat patrol, call-out services, and city patrol to key-holding services. The customer base consists of firms that cannot have or do not need a full-time security service. Mobile operates in 11 countries across Europe and has 8,600 employees in 37 areas and 274 branches.
 
Monitoring provides electronic alarm surveillance, and operates under the Alert Services brand. Its core business is to provide independent alarm, security and safety monitoring services for both homes and businesses. Alert Services operates in eight countries across Europe and has 700 employees.
 
Financial information
The organic sales growth in 2007 was 7 percent, compared to 4 percent the previous year. The growth is a result of the division’s growth strategy, including expansion of the sales organization.
 
In Mobile, strong organic sales growth was seen in markets such as the Netherlands, Norway and Spain. In Monitoring, strong organic sales growth was seen in Finland, the Netherlands and Poland.
 
The operating margin was 12.0 percent, compared to 13.5 percent in 2006, and has been impacted by the cost of investment in the sales organization.
 
Service offering
Mobile provides mobile security services such as beat patrol, call-out services, city patrol and key-holding services. The fundamental customer base consists of firms that cannot have or do not need a full-time security service. Sales, services, concepts and organization differ greatly from the specialized guarding business. In 2006 and 2007, Mobile focused on the sales process and concept development. As the sales process for mobile services is fast and based on volume, Mobile has built a dedicated sales organization, separate from operations.
 
Alert Services is a provider of electronic alarm surveillance and its core business is to provide independent alarm, security and safety monitoring services for both homes and businesses. In these main market segments, the business unit works with independent installers and sales partners, and is focused on providing a flexible service concept that integrates technical alarm monitoring, verification processes and response solutions. Another fast-growing market segment for Alert Services is the track and trace service for vehicles and other mobile objects. Much effort has been put into technological development, particularly in IP and broadband applications, track and trace and technology for reporting to partners and end-users.

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Market
The market for mobile services is highly fragmented and difficult to measure, as most companies providing mobile services offer them as an integrated part of their security operations and not as a specialized service in a separate organization. The customer base of approximately 100,000 customers ranges from small family enterprises in manufacturing, retail and administrative services to hotel chains, gas stations and city councils. The average contract value is EUR 300 per month.
 
Alert Services is the only third-party monitoring service provider that offers cross-border services in Europe. Its market share in Sweden, Finland and the Benelux countries ranges between 16 and 25 percent. The market for the track and trace services is relatively new and has grown proportionally faster. Alert Services has provided this service for years, mainly in the Benelux countries, and has been at the forefront of developing services for this segment. Either directly or via partnerships (mainly within the Securitas organization), Alert Services offers an integrated service covering practically the whole of the European Union.
 
Strategy and objectives
Mobile and Monitoring have a clear focus on building a stronger and larger sales force in order to drive new sales and organic sales growth.
 
Our employees
In 2007, Mobile continued to focus on the sales process. As the sales process for mobile services is fast and based on volume, Mobile has started to build a dedicated sales organization, separated from operations. Sales specialists are now in place in most European countries and the objective is to have dedicated sales people in every country of operation.
 
A strong part of the value chain for Alert Services is the sales process, in which the business unit always works with partners – either third-party installers or dedicated sales partners. During the year Alert Services established an even more sales-oriented organization, cooperating with these partners.
 
During 2007, a number of managers have been trained under the Securitas Management Training Program.
 
Key figures and events in 2007
  • Total sales amounted to MSEK 4,836 (4,419). Organic sales growth amounted to 7 percent (4).
  • Operating income amounted to MSEK 578 (597). The operating margin was 12.0 (13.5).
  • Return on total capital amounted to 30 percent (31).
 

Financial key ratios    
MSEK 2007 2006
Total sales 4,836 4,419
Organic sales growth, % 7 4
     
Operating income before amortization 578 597
Operating margin, % 12.0 13.5
Real change, % –4
     
Cash flow from operating activities 569 545
Cash flow from operating activities, % 98 91
     
Operating capital employed 140 111
Operating capital employed as % of sales 3 3
     
Total capital employed 1,915 1,935
Return on capital employed, % 30 31