Annual Report 2010 Securitas in brief Markets in which Securitas conducts operations: Argentina, Austria, Belgium, Bosnia and Herzegovina, Canada, Chile, China, Colombia, the Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Hong Kong, Hungary, India, Indonesia, Ireland, Luxembourg, Mexico, Montenegro, Morocco, the Netherlands, Norway, Peru, Poland, Portugal, Romania, Saudi Arabia, Serbia, Singapore, Slovakia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Arab Emirates, the United Kingdom, Uruguay, the USA and Vietnam. Operating income before Earnings per share Free cash flow Sales by business segment, % Total sales*, MSEK % amortization*, MSEK % after dilution*, SEK to net debt* 60,000 10.0 4,000 10.0 5.00 0.26 48,000 8.0 3,200 8.0 4.00 0.24 36,000 6.0 2,400 6.0 3.00 0.22 24,000 4.0 1,600 4.0 2.00 0.20 12,000 2.0 800 2.0 1.00 0.18 Offering 0 0 0 Markets and organization0 0 0.16 ■ Security Services Securitas services a wide range–2.0 of customers in a 06Securitas07 08 09operates10 in North America, Europe,06 07 Latin08 09 10 06 07 08 09 10 North America 37% variety of industries06 07 and08 customer09 10 segments, ranging Operating America, margin*, the % Middle East, Asia and *Africa. Continuing The operations organi- * All operations ■ Security Services Organic sales growth*, % * Continuing operations Europe 49% from governments, airports, infrastructure, office, zation is flat and decentralized with three business ■ Mobile and Monitoring 10% banks, shopping centers, hotels, manufacturing segments: Security Services North America, Security ■ Other 4% industries, mining industries, hospitals and residen- Services Europe and Mobile and Monitoring. tial areas to high-tech and IT companies. The size of Security Services North America provides special- the customersOperating varies income from before the ‘shop on the corner’Earnings ized per securityshare services in the USA, CanadaFree cash and flow Mexico, Sales by business segment, % Total sales*, MSEK amortization*, MSEK after dilution*, SEK to net debt* % to global multi-billion industries. % with approximately 100,000 employees and about 60,000 10.0 The services4,000 provided are specialized10.0 guarding5.00 600 branch managers. Securitas’0.26 market share is 48,000 8.0 and mobile3,200 services, monitoring, 8.0and consulting and4.00 18 percent in the USA. 0.24 36,000 6.0 investigations.2,400 Securitas can respond6.0 to unique and3.00 Security Services Europe provides0.22 specialized 24,000 4.0 specific1,600 security challenges facing4.0 our customers,2.00 security services in 25 countries0.20 with more than 12,000 2.0 tailoring its800 offering according to 2.0their specific indus1.00- 120,000 employees and over 750 0.18branch managers. 0 0 try demands.0 Knowing how each customer0 segment0 Securitas’ market share is 19 percent0.16 in this region ■ Security Services –2.0 works before we06 get07 to08 know09 10 our customers makes for06 these07 08 types09 10 of services. 06 07 08 09 10 North America 37% Operating margin*, % * Continuing operations * All operations 06 07 08 09 10 for a better result – for customers and for us. Mobile offers mobile security services, such as ■ Security Services Organic sales growth*, % * Continuing operations Europe 49% beat patrol and call-out services for small and medium- Read more on pages 10–11 ■ Mobile and Monitoring 10% sized companies, and operates in 11 countries with ■ Other 4% Operating income before Earnings per share Free cashapproximately flow 8,900 employees and 220 branch Sales by business segment, % Total sales*, MSEK amortization*, MSEK after dilution*, SEK to net debt*managers. Monitoring, also called Securitas Alert % % Size 60,000 10.0 4,000 10.0 5.00 0.26 Services, offers electronic alarm surveillance to both 48,000 8.0 3,200 8.0 Securitas4.00 employs more than 280,000 people 0.24in homes and businesses. Securitas operates control 45 countries. In 2010, total sales amounted to 36,000 6.0 2,400 6.0 3.00 0.22 rooms in 11 countries in Europe and has approxi- MSEK 61,340 and operating income to MSEK 3,724. 24,000 4.0 1,600 4.0 2.00 0.20 mately 900 employees. Together, Mobile and Moni- toring’s market share is 15 percent in this region and 12,000 2.0 800 2.0 Read more1.00 on pages 12–27 0.18 0 0 0 0 0 0.16 for these types of services. ■ Security Services –2.0 06 07 08 09 10 06 07 08 09 10 Read06 07 more08 09 on10 pages 28–31 and 51–54 North America 37% 06 07 08 09 10 Operating margin*, % * Continuing operations * All operations ■ Security Services Organic sales growth*, % * Continuing operations Europe 49% ■ Mobile and Monitoring 10% ■ Other 4% History Financial targetsOperating income before Earnings per share Free cash flow Sales by business segment, % Total sales*, MSEK % amortization*, MSEK % after dilution*, SEK to net debt* The founder of Securitas, Erik Philip-Sørensen, Securitas focuses on two financial targets. One 60,000 10.0 4,000 10.0 5.00 0.26 established the company in southern Sweden in target relates to the statement of income: an average 48,000 8.0 3,200 8.0 4.00 0.24 1934 when he bought Hälsingborgs Nattvakt, a growth of earnings per share of 10 percent annually. 36,000 6.0 2,400 6.0 3.00 0.22 small guarding company with three guards and a The second target relates to the balance sheet: free 24,000 4.0 1,600 4.0 2.00 0.20 contract portfolio of SEK 534 per month. The com- cash flow in relation to net debt of at least 0.20. In 12,000 2.0 800 2.0 1.00 0.18 pany quickly grew organically and through acquisi- 2010, earnings per share amounted to SEK 5.71, 0 0 0 0 0 0.16 tions of smaller, regional companies. In 1972, the which represented a decrease of 2 percent com- ■ Security Services –2.0 06 07 08 09 10 06 07 08 09 10 06 07 08 09 10 Group adopted the name Securitas and established pared with 2009. In real terms, adjusted for the North America 37% 06 07 08 09 10 Operating margin*, % * Continuing operations * All operations ■ Security itsServices logotype with the three red dots. strengthening of the Swedish krona, earnings per Organic sales growth*, % * Continuing operations Europe 49% After almost 50 years in the hands of the Philip- share increased 5 percent. The relation between ■ Mobile andSørensen Monitoring family, 10% the companyOperating was sold, income and before in free cash flow andEarnings net debtper share was 0.24 at year-end. Free cash flow Sales by business segment, % Total■ Other sales*, 4% MSEK amortization*, MSEK after dilution*, SEK to net debt* 1991, Securitas %was listed on the Stockholm Stock % Read more on pages 54–55 and 90–91 60,000 Exchange (NASDAQ10.0 OMX Stockholm).4,000 10.0 5.00 0.26 48,000 8.0 3,200 8.0 4.00 0.24 International expansion started cautiously in the 36,000 6.0 2,400 6.0 3.00 0.22 late 1980s, and increased rapidly from the mid- The share 24,000 1990s, with Europe4.0 as the primary1,600 market. In 1999, 4.0 2.00 0.20 12,000 the company entered2.0 North America,800 followed by The2.0 share price increased1.00 12 percent during 2010. 0.18 0 Latin America in 02000, and in 2007,0 the first steps The0 number of shareholders0 in Securitas was 0.16 ■ Security Services were taken in Asia.–2.0 06 07 08 09 10 31,458. Institutional investors06 07 08 and09 other10 corporate 06 07 08 09 10 North America 37% 06 07 08 09 10 Operating margin*, % entities accounted* Continuing for 96 operations percent of the total share * All operations As part of the increased specialization and refine- ■ Security Services Organic sales growth*, % * Continuing operations capital. Shareholders outside Sweden accounted for Europe 49% ment of its business, Securitas distributed Securitas 31 percent (29) of the capital and 22 percent (20) of ■ Mobile and Monitoring 10% Systems (today Niscayah Group) and Securitas ■ Other 4% Direct to its shareholders in 2006, followed by the votes. Loomis in 2008. The principal shareholders in Securitas are Gustaf Douglas and Melker Schörling, who through compa- Read more on our website at nies and families hold 11.5 percent and 5.6 percent www.securitas.com/history of the capital, respectively. Read more on pages 35–38 Securitas in brief fold out CEO statement 2–5 Business of specialized security 6–9 Presentation of our offering 10–11 Presentation of our business 12–27 Overview – business segments Security Services North America Case #1 Education Security Services Europe Case #2 Financial Mobile and Monitoring Case #3 Retail New markets The security services market 28–31 Securitas’ responsibilities 32–34 The Securitas share 35–38 Governance and management 39–61 Introduction Board of Directors’ report on corporate governance and internal control 41–51 Board of Directors and auditors 44–45 Management and financial control Group Management Risk and risk management Annual Report 62–139 Report of the Board of Directors Consolidated financial statements Notes and comments to the consolidated financial statements Parent Company financial statements Notes and comments to the Parent Company financial statements Signatures of the Board of Directors Audit report Five-year overview and quarterly data 140–143 Financial information and invitation to the Annual General Meeting 144 This is a translation of the original Swedish Annual Report.