POSITIVE DEVELOPMENT FOR CUSTOMER CANCELLATIONS * Customer cancellations totalled 11,667 in the fourth quarter * Payback period for investments in new customers of 4.4 years* in the fourth quarter * Net addition of 30,634 new customers in the fourth quarter * Operating profit includes a charge of SEK 26,364 thousand for costs arising from the public offer * The payback period does not include costs relating to the public offer. SALES AND INCOME Note that comparative full-year figures are pro forma Oct-Dec 07 Oct-Dec 06 Jan-Dec 07 Jan-Dec 06 Net sales, SEK thousand 1,000,829 865,597 3,815,772 3,300,632 Sales growth adjusted for 13 23 15 23 currency effects, % Operating profit, SEK 53,587* 59,802 275,003* 223,188 thousand Operating margin, % 5.4 6.9 7.2 6.8 Net profit for the 34,337 35,715 178,868 140,874 period, SEK thousand Earnings per share, SEK 0.09 0.10 0.49 0.39 *Operating profit includes a charge of SEK 26,364 thousand for costs arising from the public offer. OPERATING TARGETS * Cancellation rate of 6.6[2] % (5.9) * Payback period for investments in new customers was 4.2[1] years (3.9) * Net customer portfolio growth of 15.3[2] % (21.2[3]) [1] The payback period does not include costs relating to the public offer. [2] Net growth and the cancellation rate have been adjusted for 6,419 cancellations which arose during the second quarter of 2007 and do not affect income. [3] Adjusted for sale of 4,174 monitored alarms to Securitas Group during the second quarter of 2006. PRESIDENT'S COMMENTS Cancellations totalled 11,667 in the fourth quarter which was lower than expected. The outcome was some 2,300 lower than in the second and third quarters and an important indicator that we are now in a strong position to meet our cancellation rate target level of 6% during 2008. A total of 42,301 new customers joined the company during the fourth quarter. This year's timing of the public holidays in December in combination with a more extensive vacation leave than usual in Spain, resulted in a couple of thousand fewer installations in the month and the quarter compared with the same periods last year. The addition of 30,634 customers in the portfolio during the quarter was in line with the growth rate in the prior quarter. Our net investments in new customers rose by approximately SEK 450 per customer during the quarter. This was due primarily to the cost of previously planned marketing campaigns being spread across a lower level of installations in December. The payback period for the full year was 4.2 years and we remain committed to our long-term target of 4 years. During the quarter the margin per customer and month rose by SEK 1. For the full year, the net contribution per customer increased by SEK 14. A gain of 125,000 customers during the year took the customer portfolio to 950,000. At the same time, we also raised levels of quality and profitability within the portfolio. The customer portfolio generated a cash inflow of some SEK 1,350 million in 2007, an increase of about SEK 300 million on 2006. Excluding costs arising from the public offer, operating profit was SEK 301 million, an increase of 35% from 2006. The operating margin was 7.9%, excluding costs relating to the public offer. Feasibility studies in new markets will be complete in February 2008. We will then conduct in-depth customer research in those which we consider offer potential for market entry. We now look forward with anticipation to 2008 - a year in which we will celebrate our 20th jubilee and our one millionth customer. GROUP KEY DATA Operating 31 December 31 December 2007 2006 Cancellation rate, % 6.6[2] 5.9 Payback period, years 4.2[1] 3.9 Net customer portfolio growth, % 15.3[2] 21.2[3] Customer portfolio 949,426 830,157 [1] The payback period does not include costs relating to the takeover bid. [2] Net growth and the cancellation rate have been adjusted for 6,419 cancellations which arose during the second quarter of 2007 and do not affect income. Including these, net growth and customer cancellations were 14.4% and 7.4% respectively. [3] Adjusted for sale of 4,174 monitored alarms to Securitas Group during the second quarter of 2006. Customer cancellations and net growth are based on rolling 12-month figures and the payback period is for the year to date. Financial October-December January-December SEK thousand 2007 2006 2007 2006 Net sales 1,000,829 865,597 3,815,772 3,300,632 Sales growth adjusted for 13 23 15 23 currency effects, % Operating profit 53,587 59,802 275,003 223,187 Operating margin, % 5.4 6.9 7.2 6.8 EBITDA 178,604 167,220 750,833 622,572 EBITDA margin, % 17.8 19.3 19.7 18.9 Net profit for the period 34,337 35,715 178,868 140,874 Earnings per share, SEK 0.09 0.10 0.49 0.39 Capital employed - - 1,737,890 1,590,620 Return on capital employed, % - - 16 14 Net cash/debt - - 47,585 126,112 Free cash flow - - 96,875 -297,656 Note that comparative full-year figures are pro forma. Details of the adjustments in the pro forma accounts are shown on page 36 of the Prospectus for Distribution and Listing of Shares 2006, published in September 2006 and available for download at www.securitas-direct.com. The balance sheet and cash flow data relate to actual outcomes. TARGETS AND OUTLOOK Securitas Direct has three long-term operating targets * Cancellation rate of less 6% per year * Payback period for investments in new customers of less than 4 years * Net customer portfolio growth exceeding 20% per year Securitas Direct's growth strategy is based on long-term value creation, and the aim is that growth should not be at the expense of increased cancellations or a longer payback period. Hence, the Group's targets for the cancellation rate and payback period take precedence over growing the portfolio. Management's expectation is that the positive trend in customer cancellations during the quarter will continue due to an ongoing focus on developing and improving customer service and a high degree of proactivity when it comes to changes in the portfolio arising, for example, in connection with customers moving to new locations and new customers taking over existing installations. However, management does not expect to attain its long-term target for net customer portfolio growth during 2008. BRIEFINGS A briefing on the full-year results will be held on 5 February 2008 at 09:30 CET at the Scandic Anglais Hotel, Humlegårdsgatan 23, Stockholm. If you wish to follow a webcast of the briefing, please visit the Investors and Media section at www.securitas-direct.com. If you would like to follow the briefing by phone and participate in the Q&A session, please call +44 (0)20 7162 0025, allowing yourself 10 minutes for registration. A recording of the briefing will be posted on the Securitas Direct website. Briefings in London and New York Management will hold briefings on 6 February in London and on 7 February in New York. There is a limited number of places for these events so please give prior notice of attendance to Petra Lundborg at Kaupthing Bank on +46 (0)8 791 3789 or by email at petra.lundborg@kaupthing.com. A full agenda for all the meetings is contained in a press release issued on 24 January. FOR FURTHER INFORMATION CONTACT Dick Seger, President and CEO, tel +46 (0)708 218817 Lars Andersson, CFO, +46 (0)706 327580 Michael Peterson, Investor and Media Relations Manager, tel +46 (0)733 221814 email: ir@securitas-direct.com, www.securitas-direct.com The information in this report is such as Securitas Direct AB (publ) is required to disclose under the Securities and Clearing Operations Act and/or the Financial Instruments Trading Act. The information was announced to the market at approximately 20:50 CET on 4 February 2008.
SECURITAS DIRECT AB: FULL-YEAR REPORT 1 JANUARY-31 DECEMBER 2007
| Source: Securitas Direct AB