Securitas (SECUSS; NR, BBB) 2Q (to June) Results

Securitas still trades at top end of consumer services but the whole sector looks bid in; 29s have gone to trade flat to tad longer Tesco 29s and it's not far off top-end of brewer curves either. We don't see value, results below for Securitas were fine.

• SEK 40.6b (€3.5b) in sales over 2Q up +5% (organic). EBIT at SEK2.8b (€0.24b) at a 6.9% margin (+30bps). Headline was a small miss but organic growth in-line and margin a +20bp beat.
• Above run rate is slightly lower than 1H (at +6%) but 2Q firmer on margins (1H was 6.5%).
• By region over 1H; NA (40% of group) grew +3% and ran a 9.2% margin (+10bps), Europe (43%) +8% running a 6.4% margin (+50bps) and LATAM + Spain and Portugal (10%) +8% running a 6.8% margin (+90bps).
• By segment over 1H; security services (65% of group sales and 50% of EBIT) grew +3% and ran a 5% margin (+30bps) while Technology & Solutions (33% of sales, 53% of EBIT) grew +7% and ran a 10.3% margin (+10bps). Risk mgmt/group functions contributes -3% to group EBIT.
• FCF was negative SEK930m (-€80m) some on WC seasonality but also a larger drag from "financial expenses paid". It paid SEK1.1b (€94m) in dividends this half. Another dividend of the same amount tabled for 2H.
• Net leverage (incl. lease liabilities) at SEK41.9b (€3.6b) was levered 2.9x down from 3.3x last year and now within target for <3x.
• Light on guidance outside of confirming 8% EBIT by end of '25 target; consensus only sees 7%. It also targets +8-10% growth in technology and solutions business - 1H was not far off that (at 7%).