11 November, 2009
UPDATE 2-Securitas shares down on gloomy outlook
* Slow recovery seen for 2010
* Q3 EBITA 944 mln SEK ($137 million), forecast 940 mln SEK
* To speed up acquisitions
* Shares fall 2.0 percent
(Adds further details, quotes from concall)
By Katarina Gustafsson and Mia Shanley
STOCKHOLM, Nov 11 (Reuters) - Security services firm Securitas (SECUb.ST) on Wednesday forecast a gloomy 2010 marked by slow recovery as customers slashed spending, particularly in North America.
Third-quarter earnings were in line with forecasts but the firm, which provides security and monitoring services at airports, banks and shopping centres, said it would remain in recession for some time to come.
"They reported a very strong margin in the quarter but weak growth, and the outlook is for continued weak growth and some uncertainty about the improvement in margins, so that's why the share price is a bit down," said an analyst who asked not to be named.
Shares in the company were down nearly 2.0 percent at 1141 GMT at 68.25 Swedish crowns, underperforming a 0.7 percent rise in the wider market in Stockholm .
Sales for comparable operations in the third quarter fell 2 percent as existing customers reduced their contracts across all business segments.
Securitas said a few large contracts had been cancelled in North America, where some energy companies were taking security services in-house.
Weaker sales of add-on services hit business in Europe, its biggest single market, the company said.
Chief Executive Alf Goransson said Securitas was in "recession mode" and would be throughout 2010 as customers continued to watch their costs.
"I think that we will see a slow recovery," Goransson said on a conference call with investors. "The level of demand went down dramatically, and then you recover from that level."
ACQUISITIONS
Securitas' earnings before interest, tax and amortisation (EBITA) rose to 944 million Swedish crowns ($137 million) in the third quarter versus a year-ago 868 million to come in near the 940 million seen in a Reuters poll of 12 analysts.
"What is most positive about the report is that all three divisions showed better-than-expected margins," said Lars Hallstrom, analyst at Handelsbanken Capital Markets. "Above all, margins in Europe, after two quarters in a row of declines, are expanding again in the third quarter."
Its main competitor, British-Danish G4S Plc (GFS.L), said this week it would invest further in emerging markets such as Brazil and China as it posted a 23 percent increase in overall revenues in the the first nine months of 2009.
While conditions remain tough, Goransson said that the downturn had boosted opportunities for acquisitions. Securitas will speed up purchases over the next 12 to 18 months, he said.
"We have more acquisitions in the pipeline than we have had in the past three years," Goransson told Reuters.
Securitas has already spent 400 million Swedish crowns this year on acquisitions in the United States, Latin America, Europe and Asia out of a planned 1 billion crowns.
Source: http://www.reuters.com
UPDATE 2-Securitas shares down on gloomy outlook Added: (11.11.2009)
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