In the three months to end December, Securitas' free cash flow doubled to 3.50 billion Swedish crowns ($333.4 million), a significant rise from 1.17 billion a year ago and well ahead of the 2.4 billion expected by consensus quoted by Jefferies.

Jefferies said free cash flow had been a key focus into the results, with ABG Sundal Collier analyst Stefan Knutsson stating the strong reading was driving the shares on Wednesday.

Shares in the company were up nearly 8% at 0819 GMT, among the top performers of the European STOXX 600 index.

Securitas also cut total liabilities by end of the period to 79.70 billion from 84.01 billion at the end of the third quarter, it said.

"It's all about the debt reduction," Kepler Chevreux analyst Johan Eliason said. "This is what has held the share back in 2023 - now it looks much better for 2024."

Knutsson said there had potentially been a small short squeeze of the shares as well, with more than 9% of Securitas' shares shorted ahead of the report, according to the Swedish Financial Supervisory Authority.

Its operating profit before interest, tax, depreciation and amortisation (EBITA) rose to 2.68 billion Swedish crowns from 2.49 billion crowns a year before, against an average analyst forecast of 2.75 billion crowns in a company-provided poll.

In a statement, CEO Magnus Ahlqvist said profitability had been hampered by weakness in the group's critical infrastructure services business, which includes nuclear power plants, oil and gas companies, and other power generation facilities.

There had also been a "somewhat weaker performance in Europe", he added.

Securitas proposed a 2023 dividend of 3.80 crowns per share, up from 3.45 crowns a year earlier and above the 3.77 crowns expected by analysts polled by LSEG.

($1 = 10.4983 Swedish crowns)

(Reporting by Marie Mannes; Additional reporting by Agata Rybska; Editing by Essi Lehto, Gerry Doyle and Jan Harvey)

By Marie Mannes