Securitas announced it aims to increase the sales of its key technology and solutions business by 8-10% per year following the recent acquisition of Stanley Black & Decker’s electronic security unit.
The world’s biggest listed security services provider said it will aim for a group-wide operating margin of 8% by year-end 2025, with a long-term ambition of 10%. The new margin target replaces a now retired goal of increasing the company’s earnings per share by approximately 10% annually.
Securitas in July acquired Stanley Security for $3.2 billion in its biggest acquisition to date, bringing back the electronic security unit it had floated as a standalone business in 2006 and which was bought by Black & Decker in 2011.
Securitas completed and consolidated Stanley Security into the group on July 22. The company did not set a company-wide growth target.
The existing operating cash flow target of 70-80 percent of operating income before amortization remains the same, and the new capital structure target of a net debt to EBITDA ratio of below 3.0x replaces the previous net debt to EBITDA ratio of on average 2.5x, and is estimated to be achieved in 2024.
The dividend policy is unchanged, remaining in a range of 50-60 percent of annual net income over time.
The integration of Stanley Security is proceeding well and according to plan, according to the announcement. For the first six months of 2022, the security integrator had a record installation backlog, with growth of 18 percent compared to the same period last year. The company’s adjusted EBITDA margin was 9 percent, temporarily impacted by the corona pandemic, supply chain issues, inflationary cost increases and obsolete pricing processes.
The profitability improved in the second quarter of 2022 compared to the prior quarter with continued positive trend. Pricing, efficiency and cost actions have been implemented, and together with solid commercial momentum and accelerated value creation execution, profitability will improve going forward, according to the announcement.