Securitas misses margin expectations, shares fall 6%

Securitas AB (ST:SECUb) reported third quarter results that fell short of margin expectations, leading to a 6% decline in shares. The Swedish security services company posted revenue of SEK38,566 million, just slightly above the SEK38,277 million analyst estimate. Adjusted EBITA margins of 8.2% missed the consensus of 8.3%, while organic growth excluding SCIS remained flat at 3%.

Europe experienced weak demand trends, with a 2% growth rate compared to expectations of 3%, while North America delivered 3% organic growth, ahead of the 2% consensus. The margin performance was impacted by weaker results in Europe, where the airport business represented a 20 basis point drag on the group. North America margins reached 9.7%, exceeding the 9.5% estimate, but Europe margins of 8.1% fell short of the 8.4% consensus.

Free cash flow of SEK1,992 million significantly missed expectations of SEK2,473 million, impacted by higher capital expenditures and payables.

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