SCTBY - Securitas AB (publ) (SCTBF) Q2 2024 Earnings Call Transcript
2024-07-30 17:24:07 ET
Securitas AB (publ) (SCTBF)
Q2 2024 Earnings Conference Call
July 30, 2024 08:30 ET
Company Participants
Magnus Ahlqvist - Chief Executive Officer
Andreas Lindback - Chief Financial Officer
Conference Call Participants
Suhasini Varanasi - Goldman Sachs
Remi Grenu - Morgan Stanley
Raymond Ke - Nordea
Viktor Lindeberg - Carnegie Investment Bank
Allen Wells - Jefferies
Neil Tyler - Redburn Atlantic
Presentation
Magnus Ahlqvist
Good afternoon, everyone and a warm welcome to our Q2 Updates. We are shaping the leading company in the security industry and the execution of the strategy is generating results. We had solid performance in all business segments in the second quarter, delivered 5% organic sales growth and the real sales growth for technology and solutions was 8% when we were excluding the impact of the divestment in Argentina.
The operating margin improved to 6.9% and this was driven by all business segments this quarter. And I want to highlight that the actions initiated in Europe with emphasis on active portfolio management and increase in price thresholds for new business are starting to generate a positive impact as Europe represented the largest year-on-year improvement in the results. And stronger demand and improved operational efficiency in aviation also contributed to the improvement in Europe.
Importantly, the price wage patterns in the group is slightly positive in the first six months. And looking at the cash flow, the operating cash flow was 60% in the second quarter, this is roughly in line with our expectations and we are in a solid position to deliver a strong full year 2024 outcome.
Looking at the net debt to EBITDA ratio, it is stable at 2.9. And I just wanted to highlight as well is that as we are closing out now the first half of 2024, almost two years have passed since we made the transformative acquisition of STANLEY Security. And in the process, we created Securitas Technology. And this is the milestone I would just like to provide a few highlights and reflections in terms of where we are right now.
So today, Securitas Technology is the second player in the electronic security market worldwide. And based on the strong offering and very good work by our team, we are developing existing business and winning new business at a healthy pace and this is resulting in 8% organic sales growth in the most recent quarter. We have also surpassed SEK1.25 billion in recurring monthly revenue and issued more than $50 million in synergy takeouts and the operating margin has improved significantly in the last two years. And we largely finished now with integration work in North America and are driving good progress in Europe.
So in summary, there is still work to be done but our teams have done tremendous work during the last 24 months. And when you look at Securitas as a company, we have improved our client offering to another level with the creation of Securitas Technology; and this business obviously plays a very important part in our future....
Securitas AB (publ) (SCTBF) Q2 2024 Earnings Call Transcript