Securitas AB (publ)

Good morning, everyone, and a warm welcome to our Q1 2026 report. Before we begin, I would like to welcome Matteo, who joined the group as CFO on April 1st. And Matteo has an impressive track record from a number of leadership roles in finance, but also leading significant businesses. And for many years, he has spent time with Atlas Copco and more recently with So a great addition to the team, and a warm welcome, Matthew. With that, let's go to the performance highlights of the quarter. And on a high level, we delivered good operating margin improvements, earnings growth and cash flow in Q1, but the top-line growth was below my expectations. The adjusted operating margin improved to 7%, and this was supported by all business segments. And this is testament to focused execution, and we have now improved the operating margin 21 quarters in a row. The adjusted growth in the quarter was 2% for the growth, for the group, and the growth in North America was flat year on year, and this was primarily the result of significantly lower installation sales in the technology business. But importantly, commercial activity in technology in North America remained healthy with strong growth in installation order intake. and backlog. Looking at the earnings growth, the margin development was an important driver behind the 8% improvement in operating results and 16% improvement in earnings per share on a constant currency basis, and also then excluding IEC. Q1 cash flow was healthy for a Q1 at 40%, and Matteo will share some more details about this in the finance sections. And our work to sharpen our focus and portfolio continues, and we divested the global elite group in the U.S. and also a smaller part of our technology business in Canada in the quarter. And this means that we are now nearing the completion of the strategic assessment program we initiated a few years ago. And the acquisition of Life Raft, which is the leading provider of threat intelligence, was completed in Q1, and we are very glad to welcome the Life Raft team to the Securitas group and the intelligence capabilities that they bring are very important for the future. Let's then move to the performance in the business lines and the segments. And we delivered good modern improvement in both business lines with 10.7% for technology and solutions and 5.4% for services. The resales growth in technology and solutions was 4% in the quarter. Portfolio growth in solutions and RMR contributed, but as previously communicated, installations in North America had a clear negative impact. The adjusted growth in security services was 2% in the quarter, and growth was good in Ibero-America, decent in Europe, but a slightly slower start than expected in North America. With that, we move to the segments, and we start with North America as usual. And here we recorded good modern improvements, but as commented, flat top line growth in the quarter. And the flat growth was primarily due to technology installations. Three winter storms in the first quarter had a negative impact on the installations with the number of days. The traveling and onsite work was not possible, and this also caused some productivity issues. What's most important, though, as I mentioned before, is that commercial activity was good. Strong positive year-on-year development in order empty, and also very healthy increase of the backlog. The Pinkerton business is a smaller business, but here we recorded negative growth due to the loss of a large temporary contract, and this also had a negative impact on the growth in the North America segment. But all in all, when you look at the growth in North America, I expect the growth to recover in the second quarter. Due to the negative installations development, VSA's growth in technology and solutions was negative 1%. But when looking at profitability, we know strong resilience in the business with 30 basis points improvement in the margin to 9% in the quarter. And we then moved to Europe where we had a solid improvement in profitability. The organic growth was 3% and here the growth was supported by price increases. including impacts from Turkey and good growth of technology and solutions, while active portfolio management in the services business had a negative impact. And we also had lower than expected sales and aviation in Q1, and this was related to the situation in the Middle East and reduced number of flights. Real sales growth in technology and solutions was good at 6%. We recorded a solid 40 basis points margin improvement in the European business for an overall margin of 6.1. And the margin improvement was driven by both business lines, including positive impact from the business optimization program that we concluded last year. Declarative services margin was positively impacted by the portfolio management, and as previously communicated, we expect to finalize this work in Europe in the second quarter. We also recorded good improvement in the operating model in the technology and solutions business line driven by good portfolio development and cost control. So, all in all, good development by our European team. We then shifted to America, and here we had strong development across all key metrics. The growth was 6%, and this was driven by strong growth in technology and solutions and price increases in security services. There is a negative impact on the growth from active portfolio management, but our team are driving good conversions to technology and solutions, and the real sales growth in technology and solutions was very strong at 12%. The operating margin improved 30 basis points in the quarter to 7.4, and the improvement is driven by positive revenue and margin shift towards technology and solutions. Good, very strong start to the year by our Ibero-America team. To summarize the business performance, we're driving disciplined execution of our strategy, and while the top-line growth was lower than our plans in North America, we have continued margin improvement across all segments. And when you look at the client retention, it's stable or improving across all segments. So with that, turn to the finance update and handing over to you, Mathieu.

Thank you, Magnus, and good morning, all. We start with the income statement where we had organic sales growth of 0% and improved the operating margin with 40 basis points to 6.8%. It is a good quarter in terms of margin where we improved our operating income with 8% adjusted for currency. As you might remember, since Q2 last year, we have introduced new KPIs. which are adjusting our organic growth and our operating margin for the government business to be closed down within FCIS. In the quarter, the adjusted organic growth was positive 2%, and the adjusted operating margin was 7%, which is 30 basis points better than last year. Looking below the operating results, there are no material development in amortization of acquisition-related intangibles. and we have reported 30 million SEC acquisition-related costs, mainly due to the successful closure of LIFRAT acquisition. Item affected comparability ended with an income of 184 million, 213 million income related to the divestment, primarily to a global elite group, part of the U.S. airport security business, and 29 million cost related to the ongoing European transformation program. The European Transformation Program will continue throughout 2026, as was previously communicated, and we estimate to have a full year 2026 program cost between 225 and 250 million SEC. Our finance net came in at 357 million, a reduction of 140 million compared to last year. We continue the positive trend of reduced financing cost and interest rate, and our debt level are decreasing. Full year 2026, we estimate the finance net continue to reduce and then below 1.6 billion compared to the 1.8 for the full year 2025. Now, moving on to tax. In the quarter, we had a tax rate of 24.1%. The tax rate before tax item affecting comparability was 26.8. The tax rate excluding the capital gain related to the divestment of global elite group was 27.5%, which is the level we are expecting for the full year of 2026. Looking at our EPS, real change growth was strong at 34% in the quarter. When excluding the positive effect from ISE, the EPS real change growth was 16%, supported by a solid 8% real change in our operating results and by a strong leverage from the reduced finance net. Now, in the next slide, we also see that the quarterly results reflect FX headwinds, which were largely driven by USD movement. Now, if you move to the cash flow, where our operating cash flow was at 978 million or 40% of operating income. The cash flow was positively impacted by 41 million US dollar due to the payroll timing in our garden business in North America. and by Paragon including the net working capital release related to the close down. The free cash flow ended at 178 million supported by a strong Q1 operating cash flow and reduced financial income and expenses from the improved debt provision position. We continue to see an improved operating cash flow and we remain focused on strong cash generation to meet our full target of 70 to 80% of operating income. Now we look at the net debt, which was 32.2 billion at the end of the quarter. This is an increase of 941 million compared to Q4 last year, primarily related to acquisition and investors. of 120 million, which include the net effect of the divestment of the aviation business in the U.S., a small low-core part of our technology business in Canada, and the acquisition of Liferat. Negative translation difference of 635 million due to the weakened Swedish krona and payment of item affecting comparability according to our plan. Looking at the right hand side, our net debt to EBITDA reduced to 2.2, which is an improvement of 0.3 times compared to quarter one last year. We are all well below our target net debt to EBITDA of less than three times and expect to continue to leverage our balance sheet in the short term. Now moving on to have a look at the financing and financial position. where we continue to have a strong balance sheet, strong liquidity, and we remain without any financial covenants in our debt facilities. Going forward and looking at the maturity chart, we have very limited refinancing needed throughout the 2026, and our focus will be to continue to amortize debt supported by the strong free cash flow generation. I will also be glad to present and give you a lot more details about the capital allocation during the next capital market day in June. And finally, we remain committed to our investment rating. And with that, I now hand it over back to you, Magnus.

Very, very good. And many thanks, Matteo. So before we open up the Q&A, I'd like just to share a few points regarding our strategic direction and how we're shaping the company and creating value in the future. Because with the transformation of Securitas, we have still differentiated client offering now in a well position for profitable growth. We're operating in attractive and growing markets, and we partner with our clients for the long term. And we see that our deeper engagement model, where we leverage technology capabilities in combination with our presence, is generating high value for our clients and also for us. And this approach is working. We're executing on our plans, as I mentioned before, 21 consecutive quarters of operating margin improvement and operating cash flow consistently above 80% in the last few years. And we've had a clear focus on enhancing the quality of our business, and with the business now in much better shape, we can shift emphasis towards enhancing the value proposition and driving commercial synergies, and this will have a positive impact on the growth. And as stated many times, we do this work with a clear focus on building a more scalable business. But coming back then at the high level on the performance in the quarter, we continue to execute on our strategy delivering solid margin and ETS improvement. And I think those are the two main highlights of this quarter. And we were very well positioned to do this industry with the best value proposition for our clients also in the coming phase. And on that note, as Matteo mentioned, we are very excited to share a lot more about the longer-term opportunities and looking forward to seeing you at our Capital Markets Day in London on June 16. So with that, let's open up the Q&A session.

If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star 5 again on your telephone keypad. The next question comes from Suhosini Vornosi from Goldman Sachs. Please go ahead.

Hi, good morning. Thank you for taking my questions. Just a couple for me, please. Discuss the growth trends in March after the Middle East conflict started. Looks like Europe in particular got impacted a little bit. And how big is the Middle East in Europe? That's the first one. The second one is on the North America business. Negative growth in technology was a little bit surprising, plus a slow start to guarding. You've indicated that the commercial momentum is still strong. Is the expectation that this technology business can come back to make significant growth in the coming quarters? Did momentum actually improve at the end of the quarter or in April, for example? If you can share that, that would be great. Thank you.

Thank you, Suhosini. So on the growth trends in March and in Europe, when you look at the Middle East, We haven't called that out specifically in the report because it was, from a growth perspective, we saw lower aviation activity in the month of March, and that had a negative impact on total volume. But as stated, it's aviation, which is a relatively small part of the total business and also only one month. We have a good presence in the Middle East, but the business that we have that is then included in the AMEA region, which we are reporting under the other category. But if you look at the business on the ground, no major disturbance, I would say, despite the difficult situation that the region is going through. So, there we have handled well, and obviously, security is very high on the agenda. When you're looking at the growth or at the negative development in installations in Q1 in North America, that was clearly a negative surprise and also below our expectations. And just to give some more flavor to that as well, there were three winter storms that had quite a significant impact. I have not mentioned any winter storms in the past as the CEO of the company, But here we had three, and what happened then is that traveling to and from client sites was not possible. That also then meant that we were not able to complete a lot of the work. And that also had some productivity impact as well after those kind of close downs. So that was the main driver here. But to your question, when you're looking at the The order intake, because obviously in this type of a situation, very close attention on the order intake, and that is, yeah, strongly up compared to last year. When you look at the back order, also clearly up. So, looking at the commercial activity, my expectation is that we will recover in the second quarter, and that's also the reason I spelled that out in the report as well because even though we had some logistical challenges in the first quarter, most important is what does the order intake look like and also the back order because that's obviously the leading indicator. So, but we don't give more guidance than that, but I think my comments are reflecting the genuine view in terms of how looking at the recovery. Thank you.

That's very good.

Yeah, and the last point, sorry, was also related to guarding in North America. That was slightly softer than what we had expected. We had a couple of terminations in the fourth quarter that had an impact, but there again, commercial activity, very healthy. Client retention also improving, and there we are through with all the active portfolio management work, et cetera. So yeah, those are really the main points. And so all in all, looking at North America as a segment, these factors combined then lead to my conclusion and view that we will recover in the second quarter.

That's very clear. Thank you. And interesting that you mentioned whether or not America because I think we've had another company also mention something similar. So it looks like something extraordinary happened. over there this quarter. Thank you.

Thank you.

The next question comes from Simon Johnson from ABG Sundal Collier. Please go ahead.

Hello and good morning. Thanks for taking my questions. Some of them are already answered about the TNS growth, but maybe you can expand a little bit on the order intake and backlog that you highlighted were strong and how that translates to the growth rate you have seen in recent quarters for TNS. Does it imply continued growth or an acceleration, you think?

Yeah, thank you, Simon. So when you look at The solutions part of TNS, that's portfolio business. I mean, there's generally more stability. In the technology, we break that down into two main parts. One is what we call recurring revenue, and the other part is then the installations-related projects. And with the installations, there we essentially design and install slash integrate technology for the client, but then obviously always with the intention or then also serving the clients with more recurring services after that. That is, when you look at the nature of that business, that is more volatile. And that's something that I've also called out in the last couple of years, and also when we did the Stanley acquisition, that installation business, I mean, given the nature of the business, it isn't portfolio. So that is obviously something that there could be swings. We also saw that in 2025 when we had stronger, I mean, very strong finish to the year, for example, but now then is significantly weaker Q1. But main factor, like I said, is related to this weather situation. So, and when that happens, everything is a fairly fine-tuned operation, and if we then have operational disturbances, that would also create productivity issues in the subsequent days and weeks. This is something that we are tracking every day. And when I look at that, it is really compared to the same period last year. Backorder, like I said, and that's obviously what is remaining in terms of farm orders with work to be done. That also had a very positive development. So those are the two main kind of leading indicators. And obviously, when you have this type of a situation where you have a negative surprise like this, we're scrutinizing a lot and also then very closely in contact with the clients and with our teams. And Matteo and I have also reviewed with all key leaders in North America in the technology business just a couple of weeks ago. And like I said, looking at Q1, very good activity and good numbers coming in. So that is giving me confidence that that we're in a good position to turn that business around. I hope that gives a little bit more flavor, Simon, but I think that's as much as we can comment, essentially, on the installation as part of the tech business.

Yes, I understand. Thanks for that. Good color. Then I just wanted to go to the cash flow a bit here and a few detailed questions. On the M&A spending, first of all, here in this quarter. Was that mainly life raft acquisition or other parts involved in that figure as well?

Hi, Simon. Yes, I think for the cash flow regarding the acquisition part was mainly the life raft. And then, of course, we had also the investment of GEG, the aviation business in the U.S. There are the two main the divestment and the acquisition related to the cash flow.

All right. Do you have anything to comment on multiples for LifeRest? Is it the level you think you will continue to be at for further acquisitions in that segment? Yes.

So the idea here, I mean, we believe that we have paid what is a fair market value. It should be stated that that type of a company has a completely different type of valuation compared to Securitas. What is important with Life Raft is that we have very strong operational capabilities with our technology business, with the services business, but when you look at at the next phase, and this is something we will talk a lot more about this at the Capital Market Day in June, is that we also then look at how can we help our clients to be more on top in terms of dynamic management on the risks and the threats that they are facing in their business. And here, Life Raft have built really unique competence within the open source intelligence space. So, essentially, what we are doing here is that we're buying a, a small company by security standards, but the intention is that we are able to leverage and to scale that unique competence across our large client base. But, yeah, your base or your key question, I think it's kind of market valuation for that type of a business, but we obviously expect that we're going to create really good return on investment all the time when we can buy something which is relatively small. with DNA competence and then scale that across a large portfolio.

All right, good. Looking forward to hearing more on the CMV. Just a final one on the cash flow here in terms of items affecting comparability. You are guiding for the result effects made up of the transformation program. But what can you say of the expectations for the cash impact here in the full year. I think it was 170 million here in Q1 in total.

Yes, correct. We are about 170 million. As I said, for the 2026, we will continue with the European transformation program where our cost will be roughly, you know, 225 to 250 million SEC.

All right. Thank you, Magnus and Mathieu for that. That's all for me.

The next question comes from Andy Grobler from BNP Paribas. Please go ahead.

Hi, good morning. Just three quick ones from me, if I may. Firstly, or first and second on Europe, could you just talk through the impact of Turkey on growth rates and with that the underlying volume versus price growth for that division. Secondly, portfolio management continued to weigh in organic as you've talked to before. When do you think that process will be complete or at least largely complete? And then thirdly, just on the cash flow and the IACs, just picking up on the last question, just Clarify what the expectation is for group IACs for the full year. Is that 225 to 250 million the right number to think of pre the positive impact of the vestiges in Q1 for the full year, or will that be incremental cost as well? Thanks very much.

Thanks, Andy. So on Europe, more than half. of the growth in Europe related to Turkey. And so I think that that is the key point. So looking at the active portfolio management, which was the second question, we expect to complete that in the second quarter. And that's in line with what I communicated a year ago. And this is obviously work that we have been doing for a number of years. After the second quarter, somebody asked, okay, what happens then? Well, then it's more business as usual in terms of normal portfolio optimization. But as you know, and you know us well, a number of years ago when we started this journey, it was based on the insight that we had significant parts of the portfolio that wasn't in good shape. So we've been constantly working on that, and it will feel really, really good to see to wrap that up as a project in the second quarter. And that's in Europe, but it's the same also in Ibero-America, because then we can start to gradually shift more towards profitable growth after that. So that is really the situation on the active portfolio management in Europe, but also Ibero-America. Matteo, on the IEC?

Yeah, on the IEC cash flow and the, we aim to finish 2026 with about 1 billion back in cash flow, which is very similar to the level of 2020, 2025. That's the level we are expecting at the moment.

Okay, so 1 billion, in particular, when looking at the IACs, so just to clarify exactly what you mean by by that one billion there.

Is that? This is a value of roughly one billion in 26 comparable with last year.

Okay. All right. Thank you very much.

The next question comes from Remy Grenu from Morgan Stanley. Please go ahead.

Good morning, gentlemen. A few questions on my side. So the first two are on the North American markets. So the first one would be on the addressable market itself. So it seems like the U.S. security employment data has been deteriorating a little bit over the last few months, which is a little bit surprising given the context. I wouldn't have expected the data to come off a bit. So the number of guards seems to be flat or slightly declining. I just want to understand if there is any rational explanation for that. Do you think that the addressable market in itself is a little bit weaker than what we've seen over the last two years? on the U.S. market as well, just want to have your view on the competitive landscape. I know that retention rate has improved in Q1 this year, but it was a little bit weaker from Q3 onwards, so if you're losing contracts, is there any competitive landscape to that? And then the third question, just on the IAC, I think you're guiding for more than 200 million of cost for the transformation program in Europe, which was super. And my understanding was that these costs were supposed to come down in 25 and in 26 again, but it feels like it's ramping up again versus last year. So just want you to have more flavor on what is driving that increase in cost associated with the transformation in Europe. And I thought that it would kind of come into an end. Thank you.

Thank you. So, Remi, if you look at the North American market, looking at the economy itself, it's been resilient, I would say, despite a lot of the things that have been going on politically and also geopolitically. So, I think that that's at a very high level. We also follow some of these industry data, which is not always great quality, so we usually then thanks to our own presence in the market and good proximity to our clients, also tries to understand the overall market development. I would say that there is a very large and significant addressable market for us in North America. So there is a lot that we can go after over many, many years to come. We have been investing when you look at the second question in terms of the competitive context. First of all is that we are unique in the sense that we have a leading position in technology. We have a leading position also in guarding, and I would say that we are the clear quality choice. So when you look at the competitive context, we're unique in that sense. Almost all the competitors are either guarding companies or electronic security systems integration businesses, so what we call technology. So, in that sense, we are also quite unique. And we have built, when you look at our guarding business, very much our competitive edge based on proximity to the client. It's been investing a lot also in terms of the quality of the operation, how we've been driving the digitalization. So I feel really good in terms of our team that we have, our leadership, looking at the operation and also the value proposition and how we continuously also invest in that value proposition. So I would say that confidence level, we're always humble people, but we're very confident about the value proposition that we bring to our clients in this competitive context. But then we will share a lot more as stated also at the Capital Markets Day, so I hope that you're able to then join us for that as well, because that's obviously also to talk more about what it really means to be intelligence-led. We're going to talk a lot more about the combination as well of leading presence, technology, and data and digital capabilities.

Yeah, Remy, I think when it comes to the IFC, maybe a clarification, if you take 2025, we had two programs under the IFC. One was the European Transformation Program, and the other one was the Business Optimization Program. And if you recall, in quarter four, it was mentioned that the business optimization closed. So we are continuing to run the European transformation. Last year, 2025, we had roughly 380 million SEC in the ISE and this year we are aiming to close between 225 and 250. So this is quite a nice reduction of, you know, between 150, 130 million SEC. So this is a better picture as we have today. We aim to continue to reduce ISC. We will go to zero. I don't think so. But, you know, this is, you know, our aim is to continue to reduce. But it's a nice reduction compared to 2025 for sure.

Thank you. And for sure, the other CMD will not miss it. Thank you.

The next question comes from Johan Eliasson from SB1 Markets. Please go ahead.

Good morning, Magnus, and welcome, Matteo. Some questions from my side. Looking at the technology and solution, it has been sort of delivering a little bit below the 8% to 10% target you have for this part of the business. We heard about installation services being volatile and then now recently down. Can you talk a little bit about how the solutions part has developed? I think historically at some point in time you did report on this on a separate note, and it was at the time growing quite strongly. Is it sort of still a significantly growing part of the technology and solutions part? Thank you.

Thank you, Johan. So some context on the 8% to 10% that we communicated in 2022. That was also including acquisitions, just to highlight or to just remind about that. But like you said, when you're looking at the growth of 4% in Q1, that is below my expectation. I think significantly below our capability. So we have clear opportunity to improve on that. When you're looking at the quarter, very strong solutions development in Iberia, America. We had strong development in Europe and also improving in North America. But what we have done here as well, just for context, is with the standard acquisition, we and I prioritize very much that we are successful in terms of really building the technology pillar. that we drive the integration successfully, that we deliver on the cost synergies. In the next phase, what we call solutions now, it's essentially where we take more comprehensive approach in terms of what is the customer looking for in terms of the outcome, and that we then design and propose a combination of different services to optimize the security equation for that client. That will be a very important theme over the next five to ten years. So if you ask the simple question, well, is there more opportunity in this space, absolutely the case because we're seeing more and more evidence of that every day with technology becoming more and more important, digital becoming and intelligence capabilities becoming more important that we also have more of a pull from the clients and we can also then leverage the value proposition that we have. So that's really the context. So I would say that it is on the solutions overall, we are definitely on the right path, but also then now fine tuning a little bit how we're working in that space when we're also done with a lot of the cleanup activity that we've had on the guarding side, but also integration activity on the technology side. Now really gearing ourselves up to also drive more of that orchestration related to the client needs.

Excellent. Looking forward to that. Just some details on airport to these days. How big share is it of group or maybe Europe and North America after the divestments, France and the U.S.?

Yeah, so if you look at the overall share of sales, around 5% coming from aviation. When you're looking at Europe, it's more focused now on a few markets. As you probably remember, Johan, I also said a number of years ago, starting with the pandemic period, that all the business that we have has to be quality business. It has to be financially sustainable, and there we have gone through a large kind of process of active portfolio management, but where I would say the business that we have today, it's healthy business in Europe. Looking at North America, there we, and that you have also seen, we have , which it's not screening-related services, but other services at a number of different airports across the U.S. And that was a good decision because we have also been clear about the fact that everything that we do has to be fully aligned with the strategy, but we also need to have critical mass locally. in any kind of business that we are engaged with to ensure that we can have real presence in the market and that we can invest in the quality and the development of the value proposition. So I think the divestment there of GED is just fully in line with continuing to sharpen our business. And then maybe last point just to compliment that we also have some aviation business across Ibero-America as well. And just a clarification, when I say 5%, 5% was the number before we divested GEG. So, yeah, not sure then somewhat lower today.

Excellent. And then just finally, I didn't quite hear what Matteo, you said on the cash flow impact from... The IFC, I think you said the billion and you mentioned something about Paragon, but I couldn't quite hear what you said.

Yeah, that's correct, Johan. I mentioned, you know, one billion stack is the impact on the cash flow from an IFC perspective, which is the same level as 2025. Okay.

Thank you.

You're welcome.

As a reminder, if you wish to ask a question, please dial star 5 on your telephone keypad. The next question comes from Alan Wells from Jefferies. Please go ahead.

Hi, good morning, gentlemen. Just three quick ones from me, please. Just on the airports business, I'm not You said it's only 5% of the group, a bit less posted than estimates. But as you think about what you've seen March into April, obviously the conflict continues. We've got some risk of aviation fuel shortages. How do you see that growth in that business developing over 2Q and the rest of the year? And are there any actions you can take to manage or mitigate that? That's my first question, please.

Thanks, Alan. So when you look at Q1, just to start with some of the facts, like I said, the Middle East situation had a negative impact on the number of flights, and I assume also on the number of passengers traveled. That in turn had a negative impact on our revenue in Europe. When you're looking at the Middle East situation from a cost perspective, It's not so much hitting our aviation business, but we had some negative impact from rising fuel costs, and that is not isolated to Europe, obviously, because the oil price is global. So, there we saw that there was some impact, but we haven't called that out since it was only during one month. When you look at that, and that's not aviation related specifically, I mean, there we always look at, What do we need to do to ensure that we cover our costs and then pass on the costs to our customers? So that is one that we are watching carefully since we have a number of mobile officers obviously with a very strong presence in many key markets. But we also have installation and service and maintenance technicians as well around the world and who are in constant kind of mobility. So that is one that we are. that we are watching, but our general principle is always that we are passing on costs when that is justified. Then it's a little bit difficult, obviously, because your question about how does it look for the remainder of the year. Well, if I look at the contracts that we have and the business that we have in aviation, like I said before, they are in good shape now. decent and sustainable profitability that enables us to invest in good quality and also investing in the in the relationship and the value proposition but it's difficult to it depends quite a lot also on how is air travel developing now in the next couple of months when you're looking at April through September, October in Europe, that's a very busy period in the aviation space, and that's obviously very much related to the holidays and things like that, but then it does also vary if we have most of our contracts are more kind of fixed price contracts, but we also have some that are priced to passengers, so there is a little bit of dynamic there, but it's difficult, Alan, to forecast how that will play out, but we're watching it carefully, and And when there is a cost impact from the Middle East situation, there we're working to pass those costs on to our clients.

Okay. That's helpful. And then two other quick ones, please. Just second is from North America. There's a few significant events going on in the region. I'm particularly thinking about the World Cup. Do you have any exposure to potential kind of guarding activity event-based extra sales growth in North America over the summer that may help that we can call out? And then finally, just on the portfolio management in Europe, obviously coming to an end, I don't know if you can possibly quantify the impact on the active management, i.e. what would the 3% growth look like in Q1 if you hadn't chosen to exit contracts? Just trying to work out what the base looks like and how we can think about that as it rolls off in Q2 and onwards. Thank you.

So, on North America, we focus our business on our portfolio of clients and the ongoing client relationships. So, I'm not so keen on going after one-off type of events because most important is that we are delivering with continuity to our existing client base. So I wouldn't say that there is much of an impact in any way to expect related to the World Cup. When you look at active portfolio management in Europe, well, I think I shared that last year. I mean, we had some markets where, and more significant markets, where we had very significant impact on the organic sales growth. And so I think without going into too much specifics, depends a little bit quarter to quarter and also how much business we are winning, et cetera, to compensate and how much we are converting from regular onsite guarding activities to integrated solutions. But it's definitely been several percent impact when you're looking over an extended period of time. That has been negative from the active portfolio management in Europe. And that's quite tough because that means that then you have negative fixed cost leverage, but then we've also been working to dynamically also adjust our organization. And that's also the reason that you've seen that the operating profit margin is continuing up. But it's also improving because we're managing to convert the vast majority of our contracts to healthy and sustainable contracts. And I think that has been a really important shift that we have been going through. not only in Europe, but globally over the last few years in terms of really defending the value and where, like I said, the vast majority of clients are then saying, we definitely want to stay with Securitas. So the more question of, okay, what is the kind of the required level, and then we have found a solution and then move forward. But active portfolio management, like I said before, the project itself is coming to an end and concluding that in Q2, but then In a large garden business, there is always a need for ongoing kind of business as usual. But this is something that I think also our teams have learned a lot and they're also a lot more able today to also manage carefully down to each individual contract because we are here in the business of delivering good quality and delivering sustainable returns. So this is something also with the modern systems that we are increasingly deploying. We also get much better visibility as well. across the business in terms of the health of the business. So I think that is, it's been quite painful work over a number of years, but it will serve us well for the mid and the long term. We can then focus more on quality and profitable growth.

Thank you.

Thank you.

The next question comes from Victor Lindeberg from DMV Carnegie. Please go ahead.

Thank you, and good morning. I'm left with some housekeeping questions from my side, starting on life raft. And maybe you can comment a bit here, Magnus, what you expect in terms of profitability and growth in the short to medium term. I think it grew by close to 30% organically last year, but it would be helpful to see if that's something you project also going forward and what kind of profitability this asset is delivering for you when it's now plugged in.

Thank you. So, it's a small business, but with very strong growth. We expect continued strong growth of this business, and that's obviously life raft on a standalone basis, but also, gradually over time, where we can also open up our client base and leverage the great competence that Life Raft team has in terms of open source intelligence. So, but standalone plan, yeah, projected strong growth in the coming years, and that is important. But then I also think that when we Like I mentioned at one of the earlier questions as well, our idea here is that there is very specific competence with IFRF. We've been working with them over the last five years, and we see very strong opportunities in terms of leveraging their intelligence capabilities across a broader time space, and I think that is how we also ensure that we are generating a good return on this investment over time. But in terms of profitability, essentially break even today, but that's also very much based on reinvesting everything in continued growth, which I think is the right approach, because this is also an area where we want to build more critical mass and relevance and really strengthen our own value proposition. But looking at the mid and the long term, there is obviously very good profitability

opportunity in this type of a business but most important now is that we scale it and that we scale it on a standalone basis but then also leveraging commercial synergies with the security of client base yep got that that's clear and I have as you should look at your annual reports and the I guess the recurring question here is on your accounts receivables and the bad debt provisions and I looked at the the bad debt provisions as share of overall receivables and as share of sales. And as you probably know, this has trended down now the past two years. So you've sort of shifted the provisioning of bad debt quite a lot lower. And this is coming from invoicing that is overdue more than 90 days. So I guess there is a good reason for this, but I just want to take that noise out of the room as it's sort of a frequent question coming every now and then. So I guess the absolute provisioning level is also something that is important to bear in mind. But any color you could give on the quite sizable shift you've made in the provisioning estimates would be helpful to understand a bit more.

Of course, I mean, as you can see from the annual report, the total provision for bad debt losses, excluding the translation, reduced to 1.5 billion compared to 1.1860 in 2024. And also total provision for bad debt losses exceeding the 90 days. It went actually down from 1.5 in 2025 to 1.761 in 2024. So I think if you look a bit from a debt-debt point of view and the effect on our P&L, we are pretty much stable where we were in 2024 with 0.1% impact in our profit and loss. There is no, although we have changed a bit the percentage on the aging, we see no big impact over there, and the impact on the PNL is rather stable at 0.1%.

Yes, that's what I just wanted to confirm. That's good. But would you say that you see any improving recovery rates in the post-90 days of provisioning that has led you to become a bit more optimistic about this provisioning level or it's more about keeping the overall bad debt provisioning in balance?

I think the aim is, of course, to improve our account receivable and the aging, but to be stable, you know, situation at the moment. As I said, you know, the impact on the P&L is rather stable at 0.1%. So we are going to keep the situation rather stable, trying to improve the aging, of course, you know, quarter on quarter. But this is the situation where we are today.

Okay. That's clear. Thank you so much, and see you in June.

Thank you.

As a reminder, if you wish to ask a question, please dial star 5 on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Okay. Thanks a lot, everyone, for good questions and engagement today. And as stated earlier, looking forward to seeing you for our capital markets day in June. It's going to be a really good opportunity now. We finished the last phase successfully and then to be able to share also what we have in our plans and the strategy for the next phase. So thanks a lot. Enjoy the rest of the day. Bye-bye.