Securitas AB

The stable outlook reflects our expectation that the company will sustain its credit metrics, including FFO to debt above 30%, despite the continued operating environment caused by the COVID-19 pandemic and weakening economy. We expect metrics will rebound from 2022. We could lower the rating if worsening operating conditions or wage price pressure resulted in a prolonged decline in Securitas' operating margin. Additionally, shareholder-friendly measures, such as increased dividends, share buybacks, or significant debt-funded acquisitions, could result in deteriorated cash balances and credit metrics. We could also lower the rating if FFO to debt fell and remained below 30%. We could raise the rating if we consider it highly likely that Securitas will maintain stronger credit metrics, including FFO to

... 2020 and the rebound has continued into first-quarter 2021. The group reported negative sales of 2.7% in 2020 (positive 1.3% on a constant currency basis), and organic growth in the period was neutral. Guarding services was the most impacted segment, hit by a more than 50% decline in the aviation segment, which represented 3% of total revenue at the end of 2020. However, inorganic growth of around 1.2% in 2020 and in particular improved sales within the Security Solutions and Electronic Security Segment supported growth of about 1% during 2020, which helped to offset this impact. S&P Global Ratings-adjusted margin fell by around 100 basis points (bps) to 6.3% in 2020, helped by worker furlough and other assistance schemes, an improved business mix, and cost realization under the North American transformation program. We have seen a similar trend in first-quarter 2021 with volumes still remaining depressed but our adjusted margins relatively...

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