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
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