Q3 2025 Securitas AB Earnings Call Transcript
Key Points
- Securitas AB (SCTBF) reported a solid operating margin of 8.1% for Q3, with an adjusted margin of 8.3% after excluding the government business being closed.
- The company achieved strong EPS growth of 19% in the quarter, reflecting robust financial performance.
- North America reported a record Q3 operating margin, driven by healthy portfolio volume development and price increases in the Guarding business.
- The business optimization program has been successful, with the majority of cost savings executed, contributing to improved financial metrics.
- Securitas AB (SCTBF) has a strong balance sheet with a net debt-to-EBITDA ratio of 2.2, well below the target of less than 3 times, indicating financial stability.
- The Technology & Solutions segment reported a sales growth of 4%, which is below the company's target of 8% to 10%, indicating a need for further improvement.
- Active portfolio management negatively impacted growth in Europe and Ibero-America, with the company expecting this to continue into the first half of 2026.
- The SCIS business continues to hamper growth in the Security Services segment, affecting overall performance.
- The company faces a higher forecasted tax rate of 29.2% for the full year, primarily due to costs associated with the government business close down.
- Despite strong cash flow, the company anticipates a negative timing impact on Q4 cash flow due to additional payroll in the US Guarding business.
Good morning, everyone, and welcome to our Q3 report. We continue to develop on a good path, execute on our strategic focus areas and are glad to report a solid set of results for the third quarter. The organic growth in the quarter was 3% and North America and Ibero-America both contributed with solid growth. And now to a highlight. The operating margin was 8.1% in the quarter.
We had solid improvements across all segments as well as in the Services and Technology & Solutions business lines. And as announced last quarter, we are closing down the government business within Critical Infrastructure Services. And adjusted for this business, the organic sales growth was 4% and the operating margin was 8.3%. EPS real change was strong at 19%. And the operating cash flow is above 100% in the quarter, and we continued to improve the leverage and the net debt-to-EBITDA ratio is now at 2.2.
The business optimization program that we initiated at the beginning of this year is contributing and the vast majority of the cost
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