Europe is still the laggard of the world when it comes to security market growth, according to the multi-national security company Securitas’s interim report for January to June 2014.
Its Europe ‘business segment’ saw organic sales growth grow by one per cent in the second quarter of 2014, the same as in the same quarter last year. The UK and Belgium were singled out in the report as countries with ‘negative organic sales growth’. Across Europe this year the client retention rate stayed the same as last year, at 92 per cent; also unchanged was the employee turnover, at 26pc. Spain however, which falls in the Spanish-speaking part of the company, saw a 9pc fall in sales. By comparison North America in the second quarter this year saw a 3pc growth in organic sales, and Ibero-America 7pc, which made the company’s overall sales growth 3pc. The company named Argentina, Norway, Turkey and the United States as the countries driving its growth.
Alf Göransson, pictured, President and Chief Executive Officer, said: “Organic sales growth continues to show a positive trend and all business segments improved compared to the first half last year. Primarily supported by the US, the organic sales growth reached 3 percent in the second quarter. In France we are showing positive organic sales growth in the second quarter, while organic sales growth in Spain continues to be negative. Latin America continues to show strong organic sales growth.
“In real terms, the operating result was slightly behind last year, while earnings per share improved with 3 percent. The operating margin in Security Services North America was on the same level as last year and Security Services Europe is 0.1 percent behind. The positive development in Security Solutions and Technology continued in Spain but is not yet sufficient to mitigate the difficult conditions in the guarding business and the labour-related charges imposed by the Spanish Government in December last year. Corrective actions are continuously taken to adapt to the reduced guarding sales.
Sales of security solutions and technology gradually increasing
In 2012, sales of security solutions and technology represented approximately 6 percent of Group sales. We have set a target to triple this share of sales by the end of 2015. We continue to invest in resources within security solutions and technology and the share of sales run rate in the second quarter 2014 was 9 percent.
Changing market dynamics creating opportunity for growth
Due to current market dynamics and a gradual increase of the use of technology in security solutions, the security market in mature markets is no longer expected to grow 1 to 2 percent faster than GDP as it has historically, but rather at the same pace as GDP. In the future, this trend could be improved through increased outsourcing of currently insourced guarding activities and by allowing the private security industry to take over services performed by public authorities and governments.
“The degree to which technology is being integrated into security solutions varies from country to country in Securitas’ markets. However, as the pace accelerates, we are confident that we will be able to gain markets shares by having a stronger and more cost-efficient offering than many traditional guarding companies. We have already seen proof of this in markets where we are well equipped to offer security solutions, where we will be able to grow faster than the security market average.”
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