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Looking ahead, Securitas faces significant uncertainty related to the corona pandemic, says the multi-national security contractor’s CEO Magnus Ahlqvist in the company’s latest interim report, covering the first three months of 2020.
He said: “We are working relentlessly to adapt our way of working to minimise the risk of spreading of the virus and to secure protective equipment. To protect our strong financial position, we have taken a number of cash measures. We have also signed a new revolving five-year credit facility used to replace the existing one.
“We are closely managing costs and continuously assessing how to adjust the business.” Some 10,000 of the company’s employees across the business – it counts about 370,000 worldwide – are on a temporary unemployment scheme. Of the firm’s regional arms, its business segment Security Services Europe has been most impacted, ‘mainly driven by a rapid decline in activity in the aviation business’, which was behind a fall in margin to 3.8 per cent. Organic sales growth for the quarter in Europe was zero; the firm’s other regions, North and South America (including Iberia), showed rises of 2pc and 9pc respectively.
Other falls in work in Europe were in event security and electronic security installations; not offset by an increase in demand for temporary security services.
Ahlqvist said: “We continue to drive the strategic transformation programs despite the currently challenging conditions. Driving digitisation and modernisation is critical to enhance our offering and value creation in the future.”
As that remark suggests, and it has been a drum that Securitas has been banging for years, the company is looking to move to ‘security solutions and electronic security’ as offering a higher margin than purely personnel services. Its solutions and electronic security side grew by 10 percent in the first quarter to represent 22 percent of total Group sales. Ahlqvist said that as for acquisitions, they were not a priority, ‘but we intend to return to our previous acquisition approach when the situation normalises’.