(Adds CEO comment, details, updates share price)
STOCKHOLM, Oct 26 (Reuters) - Sweden’s Securitas said on Friday it had grown strongly in all its markets as the world’s biggest security services firm beat third-quarter core earnings forecasts.
Securitas, which in July announced a round of cost cuts in its European business, said operating income before amortisation rose to 1.45 billion crowns ($158 million) from 1.24 billion a year ago, topping analyst forecasts of 1.42 billion.
The group, which is pushing to increase its share of electronic security services and whose biggest rival is Britain’s G4S, said organic sales grew 6 percent in the quarter, in line with analysts’ expectations.
“We are very happy about the growth pace. We grow in all segments in all our regions,” CEO Magnus Ahlqvist told Reuters.
“Looking at profitability, we also have a positive development, helped to a large extent by growth across the board, but also by strong performance in North America and our Ibero-America division,” he added.
Securitas also said it had been able to balance wage cost increases with price increases. Its shares were up 3.6 percent at 1258 GMT while the wider market in Stockholm was down 1.0 percent.
Analysts said healthy organic sales growth across regions and stronger-than-expected profit and profit margin in North America were behind the share price rise.
Securitas said profit growth in North America came on the back of sales growth, a strong performance in on-site guarding and risk management and a positive one-off effect related to payroll taxes.
Ahlqvist, who took the helm in March, said Securitas was now shedding slightly more than 300 administrative jobs across 13 of the group’s 26 European markets to boost profitability.
Securitas’ European division, which accounts for just under half of group sales and which has seen costs rise, saw its operating margin dip by one percentage point to 6.0 percent.
Ahlqvist stood by forecasts for market growth of 3-4 percent in North America this year and of 2-3 percent in Europe. ($1 = 9.1674 Swedish crowns) (Reporting by Anna Ringstrom; additional reporting by Olof Swahnberg; editing by Alexander Smith)
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