Securitas AB Q3 sales slightly beat on Technology and Guarding business units strength

Overview

• Sweden security services firm's Q3 sales were flat yr/yr, slightly beating analyst expectations

• Q3 organic sales growth was 0%, with growth in technology offset by airport security weakness

• Adjusted operating margin in Q3 was 8.2%, stable from last year

Outlook

• Company expects full-year operating cash flow at 80–90% of operating income before amortization

• Securitas targets 10% average annual EPS growth over a business cycle

• Company aims for net debt to EBITDA below 2.5x

Result Drivers

• TECHNOLOGY AND GUARDING GROWTH - Co said growth in North American technology and guarding units supported results, but was offset by weaker airport security activity in Europe

• TECHNOLOGY MOMENTUM - Record-high installation order intake in North America and Ibero-America contributed to growth in technology and solutions

• CAUTIOUS DEMAND - Co said more selective purchasing and longer decision cycles in some markets, especially Europe and Ibero-America, weighed on topline growth

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 6 "hold" and 4 "sell" or "strong sell"

• The average consensus recommendation for the business support services peer group is "buy."

• Wall Street's median 12-month price target for Securitas AB is SEK165.50, about 0.4% above its October 22 closing price of SEK164.80

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads

• Oct 22 - Sweden's Coor Q3 sales flat, margin improves

• Oct 23 - Sweden's Bravida Q3 net sales rise 9%, order backlog hits record

• Oct 23 - Instalco Q3 revenue beats on strength in Sweden units

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)