“If you had a serious heart problem, who would you see? A cardiologist or your family doctor? If you had serious security concerns, I would strongly recommend seeing a security specialist rather than a service bundler. We believe in specialisation, not diversification.”
These words are those of Securitas AB president and CEO Alf Goransson, and are to be found in the introduction to the organisation’s 2010 Annual Report wherein he sets out Securitas’ stall as a focused security specialist in what is an ever-increasing sea of bundled service providers.
Indeed, passion and inspiration for the business are in abundance in Goransson’s statements about a global security business started in 1934 with three employees and which now employs more than 280,000 individuals in 45 countries across five continents.
Speaking about the currently tough and competitive environment in the security services sector, Alf Goransson said: “The security industry is highly competitive, and we have to fight hard to secure contracts. Sometimes we win, sometimes we lose, and periods of joy are muddied by losses. This will not go away and may even get worse.”
He continued: “We are not paid to complain about low margins. We are employed by Securitas because we are security professionals, and because we believe that we can develop our core business and make a difference in the security industry. We are here to work hard and find improved security solutions. We are here to innovate and lead. I am not the only person who thinks this way – there are more than 280,000 of us.”
Focus on profitability and differentiation
Goransson also spoke of the importance for Securitas to focus on its profitability and differentiate itself from its competitors: “We offer added value through optimised security solutions,” he said. “Over the past few years, this strategy has been successful in the various business cycles, both in difficult and in more prosperous times.”
As far as Goransson’s concerned, Securitas operates a successful business model. “We perform professional risk assessments and risk surveys at our customers’ sites, analyse our customers’ needs and expectations and design security solutions, often in combination with mobile patrols, alarm monitoring and technical solutions.”
In 2010, the company also strengthened its competence in sophisticated consulting and investigation services, which Goransson believes will be even more important for customers in the future.
“We are continuing to pursue our long-term strategy,” said Goransson. “More than one third of our sales volume is generated by specialised branch offices that focus on one or very few customer segments. This is gradually leading to improved margins, higher growth and long-term and improved customer relations, and our branch managers are constantly seeking solutions that will add value to our services.”
He added: “Also, as an added benefit, employees who possess specialised knowledge and enhance their skills remain working at the company for a longer period of time. We believe that knowledge can be transferred from one market to another, and that our customers expect advice from us that is based on global knowledge.”
My Securitas was launched in 2010 to strengthen and more efficiently structure the company’s knowledge base. It’s an online professional social network, with Facebook functions, blogs, an internal Wikipedia boasting an advanced search engine and Best Practice databases.
“Approximately 4,500 users now have access to the network and, in 2011, we will expand the user group to about 17,000 employees from throughout the Securitas world. This is unprecedented in the security industry: a tool for sharing knowledge, locating security knowledge and creating all kinds of communities. This will lead to better security solutions and add value to our customer offering.”
The importance of being impatient
In the 2010 Annual Report, Alf Goransson states that he’s proud and impressed by how Securitas delivers high quality services in almost every corner of the world every single day.
“I am equally in awe of how we constantly strive to add value to our services by providing more and better security in an efficient way. This impatient culture has been built by decades of consistent work, commitment and management, and is based on our values and our management model, the Toolbox, for running and managing our operations internally.”
The company has now taken its established Toolbox one step further and developed a Securitas Group standard, the Diamond Box, for doing business externally with a clear focus on security.
“The separate pieces of our methodology may not be unique,” commented Goransson, “but the way we systematically and consistently combine them and build the processes behind each component is without comparison.”
The security company leader continued: “Market by market, we are also making our services more transparent and accessible in state-of-the-art online customer portals which provide customers with a complete overview of their security solution. As security professionals, we understand our customers’ needs, provide optimal service and build profitable relationships.”
Stronger culture of innovation
In addition to the models of how Securitas conducts its business, the company is also building a stronger culture of innovation which will benefit both the organisation and its customers.
“We are currently creating an infrastructure that will support innovation. A culture where everyone is encouraged to present ideas that will be nurtured, rewarded and tested and, if they are strong enough, implemented and allowed to grow.”
Goransson feels that innovation can take many forms. “It could mean better ways to conduct sales and marketing, or describe the benefits of our services. It could be new technology or tools, but also new business concepts or methods for making our operations more efficient.”
He added: “Being a specialist and an innovator in the security industry means that we have to look for opportunities. Once we know that an innovation works, that it passes our tests and receives approval, it will bring even more added value to our customer offerings.”
Financial performance of the Securitas operation
In the 2010 Annual Report, Goransson states: “Our strategy of focusing on profitability and differentiating ourselves from our competitors through the added value that we create by optimising our security solutions works when times are both tough and better.”
In terms of profitability, the last three years have been the company’s best ever.
In 2010, earnings per share declined 2% compared with 2009. Adjusted for the strengthening of the Swedish Krona in 2010, earnings per share increased 5% in real terms compared with the preceding year.
“We are coming out of the recession in good shape. In 2010, the Group operating margin amounted to 6.1% (6.0% in 2009).”
Securitas 2010 Annual Report: the headline figures
Sales, income and organic sales growth
- total sales: GB pound 6,018,981,346 (2009: GB pound 6,149,945,025)
- income before taxes: MSEK GB pound 291,323,815 (2009: GB pound 3,022)
- organic sales growth: 1% (2009: 1%)
- operating margin: 6.1% (2009: 6.0%)
- proposed dividend: GB pound 0.29 (2009: GB pound 0.29)
Financial targets
- earnings per share, continuing operations: GB pound 0.56 (2009: GB pound 0.569)
- free cash flow to net debt ratio: 0.24 (2009: 0.26)
Major acquisitions in 2010
In 2010, Securitas completed 15 major acquisitions both in mature and new markets, in turn adding 19,500 employees and annual sales of approximately GB pound 406,017,474.
Seccredo (Sweden), Claw Protection Services (South Africa), Dan Kontrol Systemer (Denmark), Bren Security (Sri Lanka), Paragon Systems (USA), Legend Group Holding International (Singapore), Guardian Security (Montenegro), Nikaro (UK), ESC and SSA Guarding Company (Thailand), Nordserwis.pl (Poland), Security Professionals and Security Management (USA), Reliance Security Services (UK), Alarm West Group (Bosnia and Herzegovina), Piranha Security (South Africa) and Cobra Security (Romania)
Bobby Logue is principal of Logue Corporate and managing director of Interconnective
Further information on Securitas is available on the company’s website (a dedicated link can be found on the right hand panel of the page)
Access the complete 2010 Securitas Annual Report by following the link on the right hand panel of this page