Securitas AB Interim Report January–September 2014

JULY–SEPTEMBER 2014

  · Total sales MSEK 18 003 (16 605)
  · Organic sales growth 4 percent (1)
  · Operating income before amortization MSEK 962 (892)
  · Operating margin 5.3 percent (5.4)
  · Earnings per share SEK 1.57 (1.42)

JANUARY–SEPTEMBER 2014

  · Total sales MSEK 51 234 (48 975)
  · Organic sales growth 3 percent (1)
  · Operating income before amortization MSEK 2 488 (2 450)
  · Operating margin 4.9 percent (5.0)
  · Earnings per share SEK 3.93 (3.72)
  · Free cash flow/net debt 0.16 (0.26)
COMMENTS FROM THE PRESIDENT AND CEO

Organic sales growth continued to show a positive trend driven by successful
sales efforts and by our strategy of security solutions and technology offerings
to our customers. All business segments improved compared to last year and the
organic sales growth reached 4 percent in the third quarter.

Earnings per share improved

In real terms earnings per share improved with 4 percent in the first nine
months. The operating income improved in the quarter as well as in the first
nine months compared to last year, even though burdened by difficult market
conditions in Spain. A re-organization will be implemented in Spain during the
fourth quarter, reallocating resources from traditional guarding operations
to security solutions and technology sales efforts and also adapting the
structure to the reduced volumes. These actions will likely require a one-off
restructuring cost not exceeding MEUR 2, which will be recognized in the fourth
quarter.

Sales of security solutions and technology gradually increasing

In 2012, sales of security solutions and technology represented approximately 6
percent of Group sales. We have set a target to triple this share of sales by
the end of 2015. We continue to invest in resources within security solutions
and technology and the share of sales run rate in the third quarter 2014 was 9.5
percent.

Affordable Care Act (ACA)

The ACA will come into full force as of January 1, 2015. By mid-October, for
approximately 80 percent of the US total portfolio, either agreements have been
made effective as of January 1, 2015 or the contracts are already compliant with
the US healthcare reform (ACA). For the remaining portfolio, the final months of
the year will be crucial to determine to what extent the customers will accept
the price increase or decide for a security solution and technology alternative.

We estimate that the previously expected cost increase of 8–10 percent for the
non-compliant contracts will be more in the range of 4–5 percent because of
lower wage compensation, which will result in lower guard participation rate
than anticipated. Consequently, by mid-October more customers than expected have
opted for the price increase rather than security solutions and technology
alternatives. We estimate the net organic sales growth effect in Security
Services North America coming from the ACA implementation to be approximately 1
percent in 2015.

Alf Göransson

President and Chief Executive Officer

FINANCIAL INFORMATION

PRESENTATION OF THE INTERIM REPORT

Analysts and media are invited to participate in a telephone conference on
November 4, 2014 at 09:30 a.m. (CET) where Securitas CEO Alf Göransson will
present the report and answer questions. The telephone conference will also be
audio cast live via Securitas web. No information meeting will take place at
Securitas headquarters at Lindhagensplan in Stockholm. To participate in the
telephone conference, please dial in five minutes prior to the start of the
conference call:

The United States: + 1 855 269 2605

Sweden:                + 46 (0) 8 519 993 55

United Kingdom:   + 44 (0) 203 194 0550

To follow the audio cast of the telephone conference via the web, please follow
the link

www.securitas.com/webcasts. A recorded version of the audio cast will be
available

at www.securitas.com/webcasts after the telephone conference.

For further information, please contact:

Micaela Sjökvist, Head of Investor Relations, + 46 10 470 3013

Gisela Lindstrand, Senior Vice President, Corporate Communications and Public
Affairs, + 46 10 470 3011

Securitas is a global knowledge leader in security. From a broad range of
services of specialized guarding, technology solutions and consulting and
investigations, we customize offerings that are suited to the individual
customer’s needs, in order to deliver the most effective security solutions.
Everywhere from small stores to airports, our 310,000 employees are making a
difference.

Securitas AB discloses the information provided herein pursuant to the
Securities Markets Act and/or the Financial Instruments Trading Act. The
information was submitted for publication at 08.00 a.m. (CET) on Tuesday,
November 4, 2014.