(Reuters) -Sweden's Securitas, one of the world's largest security services providers, reported a bigger than expected second-quarter core profit on Wednesday, as operating margins improved in both
Securitas Surpasses Q2 Profit Expectations Amid Cost-Cutting Efforts
Securitas Q2 Earnings Overview
By Agnieszka Olenska and Tomasz Kanik
Financial Performance
(Reuters) -Sweden's Securitas, one of the world's largest security services providers, reported slightly better than expected quarterly core earnings on Wednesday, as profit margins improved in both its business areas aided by cost savings.
Impact of Cost-Cutting Measures
Operating earnings before amortization (EBITA) fell marginally to 2.8 billion Swedish crowns ($290.26 million) in the quarter, but beat analysts' average forecast of 2.75 billion crowns in a poll provided by the company.
Future Outlook and Strategic Decisions
"Despite ongoing uncertainty, we had no material impact from shifts in the global trade landscape in the second quarter," CEO Magnus Ahlqvist said in the earnings statement.
Around 40% of Securitas' revenue came from North America last year, but little of it was from imports that would be affected by tariffs, as majority of its business is staff-driven.
Its operating margin improved to 7.3% in the second quarter from last year's 6.9%, helped by the business optimization programme that is on track to deliver 200 million crowns of annualised savings by the end of 2025.
The company remains committed to its 8% margin target for the year, Ahlqvist said.
Securitas' 2022 acquisition of Stanley Security added technology solutions exposure to its staff-intensive offering, but also loaded it with significant debt it has been trying to reduce since then.
The group also said it had decided to close down its government business within Securitas Critical Infrastructure Services (SCIS) by the end of 2026, saying that it did not align with its long-term strategy.
This should incur a $150 million one-off cost but will increase the group's operating margin by 20 basis points, RBC analysts said in a note to clients.
Analysts from Jefferies viewed the decision as negative, noting the original plan had been to sell the business.
Securitas' shares rose more than 3% in early trading in Stockholm.
($1 = 9.6464 Swedish crowns)
(Reporting by Agnieszka Olenska and Tomasz Kanik in Gdansk, editing by Milla Nissi-Prussak)
