Securitas : Interim reports

Interim Report

Q3 2023 | January-September 2023

Securitas ABInterim Report Q3 2023 | January-September 2023

2

40 047

Total sales, MSEK

6.9%

Operating margin

-3.58

Earnings per share, SEK

July-September

2023

• Total sales MSEK 40 047 (36 013)
• Organic sales growth 8 percent (7)
• Operating income before amortization MSEK 2 764 (2 330)
• Operating margin 6.9 percent (6.5)
• Items affecting comparability (IAC) MSEK -3 673 (-414), relating to the capital loss of MSEK -3 321 from the divestiture of Securitas Argentina, the previously announced transformation programs and the acquisition of STANLEY Security
• Earnings per share before and after dilution SEK -3.58 (2.46)*
• Earnings per share before and after dilution, before IAC, SEK 2.66 (3.24)*
• Cash flow from operating activities 84 percent (122)
• Segment reporting change, Securitas Critical Infrastructure Services moved from Securitas North America to Other

JANUARY-SEPTEMBER 2023

• Total sales MSEK 117 707 (95 146)
• Organic sales growth 10 percent (6)
• Operating income before amortiza- tion MSEK 7 564 (5 542)
• Operating margin 6.4 percent (5.8)
• Items affecting comparability (IAC) MSEK -4 265 (-774), relating to the capital loss from the divestiture
  of Securitas Argentina, the previously announced transformation programs
  and the acquisition­ of STANLEY Security

• Earnings per share before and after dilution SEK 0.13 (6.70)*
• Earnings per share before and after dilution, before IAC, SEK 7.15 (8.15)*
• Reported net debt/EBITDA 4.7 (5.8), net debt/EBITDA before IAC 3.1 (3.6)**
• Cash flow from operating activities 49 percent (66)

• Number of shares outstanding has been adjusted for the rights issue completed on October 11, 2022. For further information refer to Data per share on page 20.
• The comparative is adjusted for rights issue proceeds received in October 2022 and includes STANLEY Security's 12 months adjusted estimated EBITDA.

CONTENTS
Comments from the President and CEO	3	Risks and uncertainties	14
January-September summary	4	Parent Company operations	15
Group development	6	Annual General Meeting 2024	16
Development in the Group's business segments	8	Consolidated financial statements	17
Cash flow	11	Segment overview	21
Capital employed and financing	12	Notes	23
Acquisitions and divestitures	13	Parent Company	31
Other significant events	14	Financial information	32

Securitas ABInterim Report Q3 2023 | January-September 2023

3

Comments from

the President and CEO

"Robust margin improvements driven by technology and solutions"

The margin improvement journey continued in the third ­quarter, where we delivered an operating ­margin of

6.9 percent (6.5). All three business segments contributed driven by strong performance in the technology and solutions business. Changing the business mix is a key factor to reach

our financial­ targets, and in the third quarter technology and solutions

represented­53 percent of the Group's operating result with an operating­

margin­ of 11.5 percent.

Organic sales growth was 8 percent

1. in the third quarter and real sales growth in our technology and solutions business was 7 percent, including the acquisition impact of STANLEY Security. The real sales growth in security services was driven by price increases and volume growth in our Aviation business while hampered by the divestment of Securitas Argentina in July and active portfolio manage- ment.

The third quarter marks the one- year anniversary of the acquisition of STANLEY Security. We are executing the integration and value creation processes according to plan, ­while we are in a period of important ­integration work related to systems and ­support services which will continue the coming quarters. The vast majority of the MUSD 50 cost synergy target has been realized, mainly in North America as planned. We have identified additional cost synergies for execution in

the coming year which will continue to benefit our ­margin journey, although partly offset by operational cost increases from the ongoing system and support transitions. The client interest in our strengthened offering is high and we have started to realize commercial synergies, as an example we recently won a MUSD 40+ technology contract with an existing guarding client within the financial segment.

In security services, we have high focus on strengthening our client value proposition, deliver solid service quality and improving profitability in our client portfolio. We see results from these ­efforts throughout the Group in the third quarter. The price and wage balance remained on par for the first nine months 2023 and the general labour market situation improved somewhat.

The Group's operating cash flow in the third quarter was 84 percent (122) of the operating result with continued deleveraging of our net debt to EBITDA ratio before items affecting compar­ ability to 3.1. We ­have high cash flow focus across the organization to ensure a solid outcome in the fourth quarter.

TRANSFORMING IN LINE WITH OUR STRATEGY

Leadership in technology and ­solutions and in digital capabilities are core to the execution of our strategy. With STANLEY Security we are number two in the global security technology market and our combined solutions

offering is unique. The transformation­ programs we have implemented in North America and are implementing in Europe and Ibero-America funda­ mentally shift our digital capabilities as a company, and as communicated earlier we expect to conclude the transformation­ activities during 2024.

As part of our strategy, we continue­ to assess our business mix and presence to further sharpen our position as the leading security solutions and technology company. As a result we disposed Securitas Argentina in the third quarter with positive margin and cash flow effects going forward.

The third quarter results confirm that the strategic transformation of Securitas is on the right path. We are operating in a period of uncertain

­economic environment but our ­offering is stronger than ever and we are confident in achieving our targets.

Magnus Ahlqvist

President and CEO

Securitas ABInterim Report Q3 2023 | January-September 2023

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January-September summary

ACQUISITION OF STANLEY SECURITY The acquisition of STANLEY Security has a significant impact on Securitas' reporting that should be considered when reading this report.

STANLEY Security was consolidated as of July 22, 2022, and is consequently included in the first nine months

2023 income statement. In the first nine months 2022 income statement STANLEY Security is included from the date of consolidation.

STANLEY Security is according to Securitas' definition of organic sales

growth excluded from the ­calculation of this key ratio during the first 12 months from the acquisition date, which means from July 22, 2022, until July 22, 2023. Real sales growth ­includes the contribution from STANLEY Security as acquired sales are included in the determination of this key ratio.

In the balance sheet STANLEY Security is included as of September 30, 2023, September 30, 2022, and December 31, 2022.

STANLEY Security is included in the operating­ and free cash flow in

the first nine months 2023. In the oper­ ating and free cash flow for 2022,

the contribution from STANLEY Security is attributable to the period July 22 to December 31, 2022.

In our segment reporting STANLEY Security is included in Securitas North America and Securitas Europe.

CHANGE IN THE BUSINESS SEGMENT REPORTING

As of the third quarter 2023, the Securitas Critical Infrastructure Services business unit has been moved from the ­business segment Securitas North America to Other. Comparatives have been restated and can be found at www.securitas.com/en/investors/financial-reports-and-presentations/.

FINANCIAL SUMMARY

			Q3	Change, %			9M	Change, %		Full year	Change, %
MSEK		2023	2022	Total	Real	2023	2022	Total	Real	2022	Total
Sales		40 047	36 013	11	8	117 707	95 146	24	19	133 237	24
Organic sales growth, %		8	7			10	6			7
Operating income before
amortization		2 764	2 330	19	16	7 564	5 542	36	31	8 033	34
Operating margin, %		6.9	6.5			6.4	5.8			6.0
Amortization of acquisition-­
related intangible assets	-157	-137			-468	-259			-414
Acquisition-related costs	-4	-20			-7	-45			-49
Items affecting comparability1)	-3 673	-414			-4 265	-774			-1 086
Operating income after
amortization		-1 070	1 759	-161	-164	2 824	4 464	-37	-43	6 484	38
Financial income and expenses	-518	-266			-1 487	-422			-758
Income before taxes		-1 588	1 493	-206	-216	1 337	4 042	-67	-75	5 726	32
Net income for the period	-2 053	1 081	-290	-300	88	2 942	-97	-105	4 316	38
Earnings per share, SEK2)	-3.58	2.46	-246	-253	0.13	6.70	-98	-104	9.20	29
Earnings per share, before items	2.66	3.24	-18	-25	7.15	8.15	-12	-18	10.77	24
affecting comparability,­	SEK2)
Cash flow from operating
activities, %		84	122			49	66			71
Free cash flow		1 525	2 438			1 440	2 247			3 422
Net debt to EBITDA ratio		-	-			4.7	5.8			4.0

1. Refer to note 7 on page 27 for further information.
2. Number of shares outstanding has been adjusted for the rights issue completed on October 11, 2022. For further information refer to Data per share on page 20.

Securitas ABInterim Report Q3 2023 | January-September 2023

January-September summary

5

ORGANIC SALES GROWTH AND OPERATING MARGIN DEVELOPMENT PER BUSINESS SEGMENT*

		Organic sales growth				Operating margin
	Q3			9M			Q3			9M
%	2023	2022	2023	2022	2023	2022	2023	2022
Securitas North America**	5	4	7	-1	9.2	8.7	8.9	8.0
Securitas Europe	13	7	13	8	7.0	6.6	6.0	5.7
Securitas Ibero-America	5	16	18	15	7.0	6.1	6.2	5.9
Group	8	7	10	6	6.9	6.5	6.4	5.8

• The business segments have been renamed as of May 3, 2023.
• The Securitas Critical Infrastructure Services business unit has been moved from Securitas North America into Other as of the third quarter 2023. The comparatives have been restated.

FINANCIAL SUMMARY PER BUSINESS LINE

							Operating income								% of Group
	Sales,	Real sales growth,		before amortization,		Operating margin,					operating income
	MSEK	%		MSEK			%		% of Group sales		before amortization
Business line	Q3 2023	9M 2023	Q3 2023	9M 2023		Q3 2023	9M 2023		Q3 2023	9M 2023		Q3 2023	9M 2023		Q3 2023	9M 2023
Security services	26 508	77 832		7	10	1 419	3 852	5.4	4.9	66	66	51	51
Technology and
solutions	12 782	37 567		14*	48*	1 465	3 990	11.5	10.6	32	32	53	53
Risk management
services and costs
for Group functions	757	2 308		-	-		-120	-278		-	-	2	2		-4	-4
Group	40 047	117 707		8	19	2 764	7 564	6.9	6.4	100	100	100	100

* Real sales growth including STANLEY Security for the comparable period (consolidated as of July 22, 2022) was 7 percent in the third quarter 2023 and 10 percent for the first nine months 2023.

For further information regarding the revenue from the Group's business lines, refer to note 3.

Securitas ABInterim Report Q3 2023 | January-September 2023

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Group development

QUARTERLY SALES DEVELOPMENT

MSEK				%
40 000				18
			39 909	40 047
36 000	38091	37 751		14
36013
32 000				10
28 000				6
24 000				2
20 000				-2
Q3	Q4	Q1	Q2	Q3
2022	2022	2023	2023	2023

 Organic sales growth, %

QUARTERLY OPERATING INCOME DEVELOPMENT

MSEK					%
3 000					7.5
2 400			2 620	2 764	7.0
2491
2330
	2180
1 800				6.5
1 200					6.0
600					5.5
0					5.0
Q3	Q4	Q1	Q2	Q3
2022	2022	2023	2023	2023
Operating margin, %

JULY-SEPTEMBER 2023

SALES DEVELOPMENT

Sales amounted to MSEK 40 047

(36 013) and organic sales growth to

8 percent (7).

Securitas North America had 5 percent

1. organic sales growth, primarily from the Guarding business unit but also supported by the Technology busi- ness unit. Securitas Europe showed
   13 percent (7), driven by strong price increases across the business and good growth within technology and solutions and the airport security­ business. Organic sales growth in Securitas Ibero-America was 5 percent (16), a decline due to the divestiture­
   of Securitas Argentina. Extra sales in the Group amounted to 12 percent (13) of total sales.

Real sales growth, including acquisitions and adjusted for changes in exchange rates, was 8 percent (19).

Technology and solutions sales amounted to MSEK 12 782 (10 976) or 32 percent (30) of total sales in the quarter. Real sales growth, including acquisitions and adjusted for changes in exchange rates, was 14 percent (71), supported by good sales growth in both technology and solutions. Real sales growth including STANLEY Security for the comparable period (consolidated as of July 22, 2022) was 7 percent.

OPERATING INCOME BEFORE AMORTIZATION Operating income before amortization was MSEK 2 764 (2 330) which, adjusted for changes in exchange rates, represented a real change of 16 percent (30).

The Group's operating margin was

6.9 percent (6.5), an improvement sup- ported by all three business segments driven by technology and solutions.

Other was positively impacted by good cost control of Group costs and nega­ tively impacted by Securitas Critical Infrastructure Services.

OPERATING INCOME

AFTER AMORTIZATION Amortization of acquisition-­related­intangible assets amounted to MSEK -157 (-137).

Acquisition-related costs totaled MSEK -4(-20). For further information refer to Acquisitions and divestitures on page 13 and note 6.

Items affecting comparability were MSEK -3 673 (-414), whereof MSEK -3 321 (0) related to ­the capital loss from the divestiture of Securitas Argentina where the vast ­majority was accumulated non-cash ­foreign ­exchange translation losses. Further­ more, MSEK -181(-226) related to the acquisition of STANLEY Security and MSEK -171(-188) were related to the transformation programs in Europe and Ibero-America. For further infor­ mation refer to note 7.

FINANCIAL INCOME AND EXPENSES Financial income and expenses amounted to MSEK -518 (-266),whereof MSEK -487 (-170)related to financing of the STANLEY Security acquisition. The impact from IAS 29 hyperinflation was MSEK 108 (34) relating to the net monetary gain. For further information refer to note 8. Financial income and expense also include foreign currency gains, net, of MSEK 80 (20). Interest income and expense excluding the financing related to STANLEY Security increased due to increased interest rates.

INCOME BEFORE TAXES

Income before taxes amounted to MSEK -1 588 (1 493).

TAXES, NET INCOME AND

EARNINGS PER SHARE

The Group's tax rate was -29.3 percent (27.6). The tax rate for July-September 2023 was affected by the capital loss from the divestiture of Securitas Argentina. Excluding the capital loss the tax rate was 26.8 percent. The tax rate before tax on items affecting compar­ ability was 26.9 percent (27.3).

Securitas ABInterim Report Q3 2023 | January-September 2023

Group development

7

Net income was MSEK -2 053 (1 081).

Earnings per share before and after dilution amounted to SEK -3.58 (2.46). Earnings per share before and after dilution and before items affecting comparability amounted to SEK 2.66 (3.24).

JANUARY-SEPTEMBER 2023

SALES DEVELOPMENT

Sales amounted to MSEK 117 707

(95 146) and organic sales growth to

10 percent (6).

Securitas North America had 7 percent (-1) organic sales growth driven by the Guarding and Technology business units. Securitas Europe showed 13 percent (8), driven by strong price increases across the business, and supported by increased installation sales and good portfolio growth within solutions and in the airport security business. Securitas Ibero-America reported 18 percent (15), driven by price increases, mainly in the hyperinflation- ary environment in Argentina in the first six months before the divestiture of Securitas Argentina. Extra sales in the Group amounted to 12 percent (13) of total sales.

Real sales growth, including acquisi­ tions and adjusted for changes in exchange rates, was 19 percent (10).

Technology and solutions sales amounted to MSEK 37 567 (24 636) or 32 percent (26) of total sales in the first nine months. Real sales growth, including acquisitions and adjusted for changes in exchange rates, was 48 ­percent (31) with the acquired STANLEY Security as the main con- tributor. Real sales growth including STANLEY Security for the comparable period (consolidated as of July 22, 2022) was 10 percent.

OPERATING INCOME BEFORE AMORTIZATION Operating income before amortization was MSEK 7 564 (5 542) which,

adjusted for changes in exchange rates, ­represented a real change of 31 percent (16).

The Group's operating margin was

6.4 percent (5.8), an improvement supported by all three business seg- ments, and mainly driven by technology and solutions including the acquired STANLEY Security business in North America and Europe. Price increases in the Group were on par with wage cost increases in the first nine months.

OPERATING INCOME

AFTER AMORTIZATION Amortization of acquisition-­relatedintangible assets amounted to MSEK -468 (-259),whereof MSEK -275 (-72)related to the STANLEY Security acquisition.

Acquisition-related costs totaled MSEK -7(-45). For further information refer to Acquisitions and divestitures on page 13 and note 6.

Items affecting comparability were MSEK -4 265 (-774), whereof MSEK -3 321 (0) related to capital loss from the divestiture of Securitas Argentina where the vast majority was accumulated non-cash ­foreign exchange translation losses. Further­ more, MSEK -466(-296) related to the acquisition of STANLEY Security and MSEK -478(-478) were related to the transformation programs in Europe and Ibero-America. For further infor­ mation refer to note 7.

FINANCIAL INCOME AND EXPENSES Financial income and expenses amounted to MSEK -1487 (-422),whereof MSEK -1199 (-170)related to financing of the STANLEY Security acquisition. The impact from IAS 29 hyperinflation­ was MSEK 185 (76) relating to the net monetary gain. For further information refer to note 8. Financial

income­ and expense also include

­foreign currency gains, net, of MSEK 116 (40). Interest income and ­expense excluding the financing related to STANLEY Security increased due to increased interest rates.

INCOME BEFORE TAXES

Income before taxes amounted to MSEK 1 337 (4 042).

TAXES, NET INCOME AND

EARNINGS PER SHARE

The Group's tax rate was

1. percent­ (27.2). The tax rate for
   January­ -September 2023 was affected by the capital loss from the ­divestiture of Securitas Argentina. Excluding
   the capital­ loss the tax rate was

1. percent. The tax rate before tax on items affecting comparability was

1. percent (26.5).

Net income was MSEK 88 (2 942).

Earnings per share before and after dilution amounted to SEK 0.13 (6.70). Earnings per share before and after dilution and before items affecting comparability amounted to SEK 7.15 (8.15).

Securitas ABInterim Report Q3 2023 | January-September 2023

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Development in the Group's business segments

Securitas North America

Securitas North America provides protective services in the US, Canada and Mexico. The operations in the US are organized in three specialized units - Guarding, Technology and Pinkerton Corporate Risk Management. There is a unit for global and national clients as well as specialized client segment units, such as aviation, healthcare, manufacturing, and oil and gas.

		Q3		Change, %				9M		Change, %			Full year
MSEK	2023	2022		Total	Real	2023	2022		Total	Real	2022
Total sales	16 121	14 840	9	8	46 719	36 454	28	22	51 943
Organic sales growth, %	5	4				7	-1				1
Share of Group sales, %	40	41				40	38				39
Operating income before amortization	1 479	1 287	15	15	4 146	2 903	43	38	4 286
Operating margin, %	9.2	8.7				8.9	8.0				8.3
Share of Group operating income, %	54	55				55	52				53

The Securitas Critical Infrastructure Services business unit has been moved from Securitas North America into Other as of the third quarter 2023. The comparatives have been restated.

QUARTERLY SALES DEVELOPMENT

MSEK						%
17 000						15
14 000		15 489		15 642	16 121	11
14 840	14 956
11 000						7
8 000						3
5 000						-1
2 000						-5
	Q3	Q4	Q1	Q2	Q3
	2022	2022	2023	2023	2023

 Organic sales growth, %

QUARTERLY OPERATING INCOME DEVELOPMENT

MSEK					%
1 500					10.0
				1 423	1 479
1 200		1 383		9.0
1 287		1 244
900					8.0
600					7.0
300					6.0
0					5.0
	Q3	Q4	Q1	Q2	Q3
	2022	2022	2023	2023	2023
Operating margin, %

JULY-SEPTEMBER 2023

Organic sales growth was 5 percent (4), primarily from the Guarding business unit driven by price increases, solid portfolio new sales and a significant global guarding contract renewed and expanded, as previously communi- cated. The Technology business unit also supported organic sales growth with improved installation sales and

a continued healthy backlog. Organic sales growth was slightly hampered by negative organic sales growth in Pinkerton.

Technology and solutions sales

­accounted for MSEK 5 850 (5 184) or

36 percent (35) of total sales in the business segment, with real sales growth of 12 percent (125) in the third quarter, ­supported by good sales growth in both technology and ­solutions.

The operating margin was 9.2 percent (8.7), and the improvement stemmed from the Technology business unit where good business momentum and cost synergies were the main factors. The operating margin in Guarding was stable, supported by active portfolio management and leverage from the topline growth but burdened by cost of risk and medical expenses.

The Swedish krona exchange rate weakened against the US dollar, which had a positive impact on operating income in Swedish kronor. The real change was 15 percent (37) in the third quarter.

JANUARY-SEPTEMBER 2023

Organic sales growth was 7 percent (-1), driven by the Guarding business unit. Price increases, healthy portfolio new sales and a significant guarding contract renewed and expanded, as previously communicated, contributed to the devel­ opment. By comparison, the first nine months last year were hampered by the termination of two significant security contracts. Organic sales growth was also supported by the Technology business unit from improved installation sales and a continued good backlog. The client retention rate was 87 percent (85).

Technology and solutions sales ­accounted for MSEK 16 933 (10 059) or 36 percent (28) of total sales in the business segment, with real sales growth of 63 percent (46) in the first nine months. The acquired STANLEY Security business in North America was the main contributor­ to real sales growth, although ­double-digit real sales growth

within solutions­ also supported.

The operating margin was 8.9 percent (8.0), driven by the acquired STANLEY Security business and good margin performance­ within the Technology business unit. The operating margin in Guarding was stable, supported by active portfolio management and leverage from the topline growth but burdened by cost of risk and medical expenses.

The Swedish krona exchange rate weakened against the US dollar, which had

a positive impact on operating income in Swedish kronor. The real change was 38 percent (14) in the first nine months.

Securitas ABInterim Report Q3 2023 | January-September 2023

Development in the Group's business segments

9

Securitas Europe

Securitas Europe provides protective services in 21 countries. The full range of protective services includes on-site, mobile and remote guarding, technology, fire and safety services and corporate risk management. In addition, there are three specialized units for global clients, technology and security solutions.

		Q3		Change, %				9M		Change, %			Full year
MSEK	2023	2022		Total	Real	2023	2022		Total	Real	2022
Total sales	17 033	14 152	20	16	49 521	38 879	27	22	54 409
Organic sales growth, %	13	7				13	8				9
Share of Group sales, %	43	39				42	41				41
Operating income before amortization	1 186	930	28	23	2 972	2 223	34	29	3 201
Operating margin, %	7.0	6.6				6.0	5.7				5.9
Share of Group operating income, %	43	40				39	40				40

QUARTERLY SALES DEVELOPMENT

MSEK					%
17 000					17
				16 784	17 033
15 000		15530	15 704		14
13 000	14 152				11
11 000					8
9 000					5
7 000					2
	Q3	Q4	Q1	Q2	Q3
	2022	2022	2023	2023	2023

 Organic sales growth, %

QUARTERLY OPERATING INCOME DEVELOPMENT

MSEK					%
1 200					7.0
1 000					1 186
				6.5
				992
800	930	978			6.0
			794
600					5.5
400					5.0
200					4.5
	Q3	Q4	Q1	Q2	Q3
	2022	2022	2023	2023	2023
Operating margin, %

JULY-SEPTEMBER 2023

Organic sales growth was 13 percent (7) in the quarter, still driven by strong price increases, including the impact of the hyperinflationary environment in Türkiye. Organic sales growth was also sup­ ported by technology and solutions as well as the airport security business.

Technology and solutions sales

accounted­ for MSEK 5 512 (4 439) or

32 percent (31) of total sales in the business segment, with real sales growth of 20 percent (56) in the third quarter, supported by good sales growth in both technology and solutions.

The operating margin was 7.0 percent (6.6), an improvement primarily from technology and solutions. Active port­ folio management and reduced sickness supported the operating margin in security services whereas increased costs related to labor shortage, such as higher costs for subcontracting, continued to hamper.

The Swedish krona exchange rate weakened primarily against the euro, which had a positive impact on oper­ ating income in Swedish kronor, but was partly offset by the development of the Turkish lira. The real change in operating income was 23 percent (21) in the third quarter.

JANUARY-SEPTEMBER 2023

Organic sales growth was 13 percent (8) in the first nine months, driven by strong price increases, including the impact of the hyperinflationary environment in Türkiye. Organic sales growth was also supported­ by technology and solutions as well as the airport security business. The client retention rate was 91 percent (91).

Technology and solutions sales

accounted­ for MSEK 16 335 (10 708) or 33 percent (28) of total sales in the business segment, with real sales growth of 48 percent (29) in the first nine months. The acquired STANLEY Security business in Europe was the main contrib­ utor to real sales growth, although ­double-digit real sales growth within solutions and strong organic growth in technology also supported.

The operating margin was 6.0 percent (5.7), an improvement mainly from growth within technology and solutions, including STANLEY Security. Active portfolio management also supported the development. However, the operating margin was hampered by start-up costs within the airport security business and increased costs related to labor shortage, such as higher costs for sub­ contracting.

The Swedish krona exchange rate weakened primarily against the euro, which had a positive impact on oper­ ating income in Swedish ­kronor, but was partly offset by the development of the Turkish lira. The real change in operating income was 29 percent (14) in the first nine months.

Securitas ABInterim Report Q3 2023 | January-September 2023

Development in the Group's business segments

10

Securitas Ibero-America

Securitas Ibero-America provides protective services in six Latin American countries as well as

in Portugal and Spain in Europe. The offered services include on-site, mobile and remote guarding, technology, fire and safety services, and corporate risk management.

		Q3		Change, %				9M		Change, %			Full year
MSEK	2023	2022		Total	Real	2023	2022		Total	Real	2022
Total sales	3 601	3 790		-5	-12	11 836	10 785	10	11	14 604
Organic sales growth, %	5	16				18	15				16
Share of Group sales, %	9	11				10	11				11
Operating income before amortization	251	230	9	1	732	639	15	9	881
Operating margin, %	7.0	6.1				6.2	5.9				6.0
Share of Group operating income, %	9	10				10	12				11

QUARTERLY SALES DEVELOPMENT

MSEK					%
4 000			4 233		25
		4 002
3 790	3819
		3 601	20
3 200
2 400					15
1 600					10
800					5
0					0
Q3	Q4	Q1	Q2	Q3
2022	2022	2023	2023	2023

 Organic sales growth, %

QUARTERLY OPERATING INCOME DEVELOPMENT

MSEK				%
250				7.5
			250	251
230	242			7.0
230		231
210				6.5
190				6.0
170				5.5
150				5.0
Q3	Q4	Q1	Q2	Q3
2022	2022	2023	2023	2023
Operating margin, %

JULY-SEPTEMBER 2023

Organic sales growth was 5 percent (16), a decline due to the divestiture of Securitas Argentina. Organic sales growth in Spain was 3 percent (6), supported by price increases and improved installation sales, but held back by active portfolio manage- ment. In Latin America, organic sales growth continued to be driven by price increases.

Technology and solutions sales accounted for MSEK 1 229 (1 102) or 34 percent (29) of total sales in the business segment, with real sales growth of 2 percent (10) in the third quarter.

The operating margin was 7.0 percent (6.1). The improvement was driven by the divestiture of Securitas Argentina, improved margins in technology and solutions and in airport security as well as positive impact from portfolio management­. The operating margin in Spain and Portugal improved compared to last year, although continued wage pressure in Spain hampered.

The Swedish krona exchange rate weakened primarily against the euro which had a positive impact on oper­ ating income in Swedish kronor.

The real change in the segment was 1 percent (17) in the third quarter.

JANUARY-SEPTEMBER 2023 Organic sales growth was 18 percent

1. driven by price increases, mainly in the hyperinflationary environment in Argentina in the first six months before the divestiture of Securitas Argentina. Organic sales growth in Spain was
   4 percent (8), supported by price increases and improved installation sales, but held back by active portfolio management. Organic sales growth continued on a high level in Latin America driven by price increases, especially in Argentina. The client
   retention­ rate was 92 percent (92).

Technology and solutions sales accounted for MSEK 3 758 (3 180) or

32 percent (29) of total sales in the business segment, with real sales growth of 11 percent (10) in the first nine months.

The operating margin was 6.2 percent (5.9), supported by higher margin technology and solutions sales, portfolio management and by the divestiture of Securitas Argentina. The ­operating margin was hampered by the wage pressure in Spain and negative ­port­folio development in a few Latin American countries.

The Swedish krona exchange rate weakened primarily against the euro which had a positive impact on oper­ ating income in Swedish kronor, but was partly offset by the development of the Argentinian peso. The real change in the segment was 9 percent (22) in the first nine months.