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.