SECURITAS Stock

Okay. Hello, everyone. I apologize. It seems like we had an interruption on the Internet connection. So we are restarting here, but we had only done a couple of minutes. So I apologize for the inconvenience.

So welcome to the Q2 and the first half report that Matteo and I are sharing from Stockholm this morning. And today, we will provide an update on the performance. And before the Q&A, I will also make some comments related to the Capital Markets Day that we had in London last month. But if we are switching then straight to the performance highlights, this is a quarter with some clear positive developments, but also a few areas where we are performing below our plan.

And starting with the growth, the adjusted sales growth was 3% and the growth in Technology North America was a clear positive development, while the growth in Europe was lower as a result of active portfolio management and significant negative impact in Aviation. Sales growth in technology and solutions improved sequentially to 5%, and this recovery was supported by improved performance in Technology in North America. And what is really positive is that the order entry and the backlog in the Technology installations business increased significantly across all geographic regions and technology momentum is building as we're going into the second half.

And from a strategy execution perspective, we are increasing the share of technology and solutions across all segments, which is fully in line with the strategy. The adjusted operating margin improved to 7.6%, and this was the result of positive mix change when we are growing T&S, or technology and solutions at a higher pace, but with some negative impact from lower top line growth in Services. We have now improved the operating margin 22 quarters in a row. And looking at the earnings growth, operating income increased 3% in the quarter, and it should be noted that we had approximately 1% negative impact on the real change due to the divestment of the GEG Aviation business in North America.

Earnings per share improved 7% in the quarter and 11% in the first half. And the cash flow was healthy at 87%. The strategic assessment program was finalized in Q2 as was the active portfolio management activities in Europe and Ibero-America. And we have been driving these programs over multiple years with a significant positive impact on the company with a stronger focus and a higher quality of our business. But as we look ahead, it remains important to continuously work to optimize and calibrate the business, but it's good to have those programs behind us since we can dedicate more focus on client engagement and driving the commercial agenda.

At the Capital Markets Day in London in June, and there, I just want to say thank you to all of you who participated, we announced the strategy and how we are winning during the coming period towards 2030. And we also announced the headline target of achieving average annual growth in EPS of 10%.

So let's then move to the performance in the business lines and the segments. And we delivered margin improvement in both business lines with 11.3% for technology and solutions and 6.3% for services. The real sales growth in technology and solutions was 5% in the quarter. And as commented earlier, strong recovery in installation in North America contributed. And the commercial activity in electronic security around all regions around the world is very good now, and we are noting a strong order intake and backlog development in the second quarter.

The real sales growth in security services was 0% in the quarter when excluding the impact of the government business to be closed down in North America. And this flat development is a consequence of active portfolio management, a negative development in aviation, but also a mixed picture in terms of the dynamics in the development of our customers' business in different vertical segments. So with that, we are shifting to the reporting segments and starting, as always, with North America, where the sales growth increased sequentially and the margin was stable.

Technology installation sales improved in Q2 after a very slow start in Q1, and sales growth was stable in the Guarding business. The Pinkerton business is smaller, but continued to hamper the North America growth as a result of the termination of a large temporary contract. And when comparing to last year, we should also highlight that the recent divestment of the GEG Aviation business had a negative impact on the real change in operating income in the quarter. Real sales growth in technology and solutions was 5% in the quarter. And as highlighted earlier, we're seeing increasing momentum in Technology installations significant growth in order entry and backlog.

But despite some of the top line softness, the operating margin was stable in the second quarter, 20 basis points up in the first half of the year. And we are then moving to Europe, where we generated continued margin improvement despite negative impact from the airport security business. The organic growth was 2%, and the growth was supported by price increases and primarily related to Türkiye. And looking at the services business, active portfolio management had a clear negative impact on the growth. The Aviation business was negatively impacted, like I said earlier, and this was now throughout the quarter, and it's all related to the situation in the Middle East and the reduced number of flights.

So we have seen demand reduction in aviation in key markets like Germany of approximately 20% and this had a significant impact on sales and profitability. And from a total growth perspective, the impact from aviation is approximately 1% negative impact on the overall growth in Europe. The sales growth in technology and solutions was 4%. And the operating margin in Europe was 7% in the quarter, and the margin improvement was driven by technology and solutions business lines. Security services margin was positively impacted by active portfolio management but negatively impacted by aviation. So all in all, somewhat mixed results development in Europe in the second quarter.

So let's then shift to Ibero-America, where we had a decent development of the business. Organic growth was 5%, and this was driven by very strong growth in technology and solutions, and price increases in security services. There is a negative impact on the growth from active portfolio management, but our team is driving good conversions to technology and solutions. And the sales growth in technology and solutions was very strong at 13%. And similar to the European division, we have now completed the active portfolio management program in Ibero-America and now transitioning to business as usual with ongoing portfolio optimization.

The operating margin was flat at 7.5% and strong growth in technology and solutions contributed, but overall margin was held back by negative leverage on the cost base in security services. But looking at the first half, it's a good start to the year by our Ibero-America team. So to summarize the performance, we are driving disciplined execution of our strategy with continued margin development. And as previously commented, growth came in below expectations in some areas, but we are seeing increasing momentum in the Technology business.

And while not reported externally, we had very strong sales growth and margin development in the EMEA business, which is reported in the other segment. Client retention is stable when you exclude the impact from the close down of the government business in North America.

And with that, handing over to you, Matteo, for the finance update.

Thank you, Magnus. We start with the income statement, where we had organic sales growth of 0% and improved the operating margin with 20 basis points to 7.5%. Now when we look at our performance, excluding the government business to be closed down within SCIS, we delivered an OSG of 3% and an operating margin of 7.6%, which is 10 basis points better than last year. The operating income adjusted for currencies improved in the quarter by 3%. And in the quarter, we had, as Magnus already mentioned, circa 1% impact on real change due to the aviation business disposal in the U.S. made in the first quarter.

Looking below operating result, there are no material developments in amortization of acquisition-related intangible nor in the acquisition-related costs. Item affecting comparability was minus SEK 46 million, which is a reduction of SEK 120 million compared to last year and in line with our plan. This is related to our transformation program that will continue throughout 2026. And as previously also communicated, we estimate to have a full year 2026 program cost between SEK 225 million and SEK 250 million.

When we look at the year-to-date, IAC are still positive SEK 138 million due to the capital gain of SEK 213 million that we realized in quarter 1, primarily for the divestment of Global Elite Group in the U.S. Our finance net came in at SEK 355 million, which is a reduction of SEK 124 million compared to last year. We continue the positive trend of reduced financing costs as interest rates and our debt level are decreasing. As communicated in Q1, we estimate finance net for 2026 continuing to reduce and land below SEK 1.6 billion compared to the SEK 1.8 billion for the full year 2025.

Now moving to tax. Here, our full year forecasted tax rate remained at 27.5%, excluding the capital gain related to the divestiture of Global Elite Group, which is the same level as we had in the first quarter. Our EPS real change growth was at 14% in the second quarter. When excluding the effect of IAC, the EPS real change growth was 7%, supported by a 3% real change in our operating results and by a strong leverage from the reduced finance net. For the first half of 2026, our currency adjusted EPS, excluding IAC, increased 11% compared to last year. Quarterly results reflect FX headwinds, which were largely driven by USD, but as you can see here, lower than quarter 1.

Turning to cash flow. We delivered another good quarter, ending at SEK 2.5 billion, which is corresponding to 87% of operating income. For the first 6 months, cash generation improved by 458 million, reaching 65% of operating income. The year-to-date position is positively impacted by USD 41 million in Q1 due to the payroll timing in our Guarding business in North America and by Paragon net working capital release related to the close down.

The trade receivable negative change we see at quarter end was primarily driven by strong sales growth, particularly in North America with a significant share of sales happening late in the quarter. In addition, the ERP go-live in Norway temporarily delayed invoicing and collection processes. This timing effects are expected to normalize during quarter 3, resulting in a recovery of trade receivable and supporting cash conversion. The capital expenditure remained below our target at around 2.8% of sales in the quarter.

The free cash flow ended at SEK 1.7 billion, supported by the strong Q2 operating income and reduced financial income and expenses paid from the improved debt provision. The first half free cash flow improved by SEK 752million compared to last year. We continue to see an improved operating cash flow, and we remain focused on strong cash generation to meet our full year target of 80% to 90% of operating income.

We then move and look at our net debt, which was SEK 32.7 billion at the end of the quarter. This is an increase of SEK 495 million compared to Q1 this year, primarily related to the dividend payment of SEK 1.5 billion and the negative translation difference of minus SEK 513 million due to the weakened Swedish krona. Item affecting comparability remain according to plan. And as we anticipated during Q1, we are forecasting a cash flow for the full year 2026 in the range between SEK 800 million and SEK 850 million.

Looking at the right-hand side, our net debt-to-EBITDA remained at the same level as Q1 at 2.2x, which is an improvement of 0.2x compared to Q2 last year. We are below our target, and we want to continue to be below 2.5x and expect to continue to deleverage our balance sheet in the short term.

Looking at our financing and financial position where we continue to have a strong balance sheet, strong liquidity, and we remain without any financial covenants in our debt facilities. In the second quarter, we extended by 1 year our revolving credit facility and the new facility consists of 2 tranches, one of EUR 900 million, which will mature in 2031 and one for EUR 200 million, which will mature in 2029. Each of these tranches might be extended for another extra year.

Going forward and looking at the maturity chart, we have very limited refinancing needs throughout 2026. And our focus will be to continue to amortize debt supported by a strong free cash flow generation. And finally, we remain committed to our investment-grade rating.

And with that, Magnus, I hand it over back to you.

Many thanks, Matteo. So before we open up to Q&A, I would like just to share a few key messages related to the CMD announcements and our journey ahead. And as communicated at the CMD in London last month, we are well positioned for profitable growth. The winners in the security industry in the future must deliver quality and offer the clients technology, digital and intelligence-led capabilities. And with these capabilities, we are very well positioned to capitalize on the changing dynamics and to drive profitable growth.

And with our new financial targets, we emphasize 10% annual average EPS growth over a cycle. And to us, this refers to the period leading up to 2030, which is the target year for our next strategic phase. And we have a long-term ambition to reach 10% operating margin. But after a period of extensive transformation, we are now making this shift to focus on profitable growth. And leveraging our unique offering, which is future-proof and clearly differentiated from our competition, we target around 4% to 6% organic growth and expect the continued mix shift to contribute to margin improvement.

And we are now intensifying our efforts to commercialize, monetize the capabilities we have built, and this includes strengthening our commercial capabilities, implementing incentives to drive cross and upselling at scale, but also training our client teams to sell more integrated services and transforming the business towards intelligence-led. And all of these efforts will have a positive impact on the overall growth and driving the mix change towards higher added value services.

And then regarding capital allocation, after a period of deleveraging after the STANLEY acquisition, we have a strong balance sheet. We're building the M&A pipeline with emphasis on technology bolt-ons. And we will be disciplined and will return excess capital to shareholders. So to conclude this section, due to the changing market dynamics and rapid developments in technology, automation and AI, I expect the coming 5 years in this industry to be more transformative than the last 25. But when you look at our presence, our technology and digital capabilities, we are very well positioned for the next phase and are stepping up the engagement with our clients, and we continue to drive the execution of our strategy to be the trusted partner in intelligence-led security.

So with that, Matteo and I are happy to open up the Q&A.

[Operator Instructions] The next question comes from Simon Jönsson from ABG Sundal Collier.

Simon, we cannot hear you.

Simon Jönsson, ABG Sundal Collier. Your line is unmuted.

Can you hear me?

Yes.

Perfect. So first of all, on the U.S. the margin specifically, if you can expand a bit more on the different moving parts here resulting in the relatively flat margins year-over-year and also the phasing of these factors for the rest of the year? I mean you mentioned, for instance, Pinkerton here, and we also have other factors like growth in technology and also the margin boost from SCIS. So yes, please if you can expand a bit on the moving parts, both this quarter and what you expect coming quarters on those margin effects?

Simon, Matteo here. So I think when you look at the quarter, the main impact related to the profitability in the U.S. is coming from the Pinkerton reduction. As we said, we had a termination of a temporary contract end of last year, which is impacting quite substantially. And this is the main reason for the profitability drop in the U.S. Going forward, it's very difficult. We don't guide for the second half, but we should be able to -- the comparison with last year's like-for-like is a bit more tough. The second half was a strong second half, but we believe that we can maintain our profitability in the U.S. business on a good level for the second half as well.

All right. And then I have a question on the SCIS closure. Where you are in sort of the phasing of that termination in relative terms compared to last quarter?

Yes. So when you look at that one, since we announced it, we have been executing the close down according to plan, and I would say slightly ahead of plan as well. So firm commitment to have finalized all of that by the end of this year. But we are obviously keen on doing it as quickly as we can. But they're depending also on some of the interaction and approvals and things like that from some government agencies. So it's not entirely within our control, but we feel comfortable we're going to be able to have all of that finalized but at slightly accelerated pace right now, which is positive.

All right. Could you give any color on what that means in terms of percentage of how much you've done so far?

We don't break that out, but it is going according to plan. So nothing more to say there.

All right. I understand. Then my second question is on technology and solutions specifically. And when you talk about the strong orders, both intake and the backlog, is that across regions, you would say? And if we look at U.S. specifically, now here in this quarter, would you say that you are back to a more normal growth level? Or are there still any kind of temporary effects either positive or negative?

Yes. I would say, first of all, I only highlight it because it is a significant increase. And this is obviously very positive because we have been investing a lot in the Electronic Security business. We have been now also through all the integration works. I mean we're now able to also focus full effort on driving the commercial engagement and also developing the operations. So this is something that we are seeing across all geographic regions around the world. So that is really positive because that gives me a good feeling in terms of the momentum in the Technology business.

And we say that it's very much then the design and installations business, where we see this positive development. If you're looking at the general, and I think also a bit related to your last question, there is a clear difference between different vertical segments. I think on the totality, on the technology side, we are doing quite well. Obviously, when you're looking at the order entry and really strong backlog. When you're looking at the Guarding part of the business, there, it's a little bit of a mixed situation between different vertical segments where some are strong and a few others are weaker. But on the technology overall, I think we are definitely back at a normalized type of situation to address your question on the technology side.

Okay. Perfect. Then just one final follow-up on Pinkerton specifically here, given that it's a significant impact on the profitability. What do you see there in terms of offsetting factors you could do and what you are doing to mitigate that? Is it that you adjust the organization? Or do you expect to build up the business and compensate? Or was it more on temporarily high levels before? Or yes, what's your plan for that?

Simon, can you just repeat because I struggle to hear you the first part of the sentence. Which part of the business?

Pinkerton.

Sorry. Yes. So when you look at that one, I mean, this is a fairly small business, but it's an important business within the corporate risk management space. We had a very significant contract that was a temporary contract that was terminated at the end of 2025. So it's unfortunately hurting quite a lot in the comparables when we are looking at the year-on-year. It's a good business. There is clear demand, but it's taking some time to then recover.

And there, we're obviously having negative leverage, which is hurting quite a lot when you have fixed cost base and then a revenue number, which is coming down. So that's something that we are -- and our leaders are hard at work there to ensure that we address those ones and that we also then rebuild the commercial momentum and also the positive growth impact because it had a significant negative impact in the second quarter on the growth and also on the profitability in North America.

Okay. So you are rather looking to expand those volumes again rather than adjusting the organization basically?

I mean we always take action if we have a weakness in the top line, we try to take actions immediately. And that's something that we're trying to optimize now. But it's also an important business strategically. So I think it's also a matter of, okay, we just have to kind of face the tough reality that we had that termination, but then it's about rebuilding at the same time. So I would say, it's a little bit of both, Simon, to manage the business in a responsible way.

The next question comes from Dan Heimer from SEB.

I hope you can hear me. A couple of questions from my side as well. Maybe starting a little bit on aviation. I think you mentioned that you saw an impact to your airport security business due to the political situation in the Middle East. If I heard you correctly, it was throughout the quarter, right? So -- and aviation is -- I know it's a smaller part of your business today, but it's still quite relevant for Q3 in particular. So should I read it as you don't expect an immediate pickup? Or how should I read how the situation is within aviation right now?

Thank you, Dan. So yes, it's correct. We highlighted in the Q1 report. I mean then we had essentially 1 month of impact in the month of March. Now it's throughout the quarter. And the size of the impact has been on the high side also in relation to my expectation. And just to give some flavor of that, I mean, we've seen approximately 20% demand reduction in terms of the capacity and the hours that we are providing in terms of security screening work. As it happens, we are doing a lot of the work at terminals that have more exposure to the traffic to and from the Middle East. So that is obviously one that is negatively impacting.

It's really difficult to say, obviously, how that situation is going to develop because that's related to political matters that are difficult to project. But what we are doing because we had -- like Matteo and I highlighted, we did have real fixed cost negative leverage that hurt also the operating margin quite a lot in Europe in the quarter related to the aviation. So that's something that we are now -- we've taken actions to try to adjust that. But the top line demand, that is difficult to forecast. So I hope that gives a better understanding of the situation.

Yes, I fully understand. Maybe continuing a little bit on what you said about intensifying your efforts to commercialize the capabilities you built within technology. Since you have that strong offering, what sort is the missing link to drive that to growth? Is it a little bit of a mindset thing that you've been throughout the period of focusing maybe inwards and improving profitability and it takes some time to restart growth again? Or what's needed to drive a little bit higher growth here ahead?

Yes. I would say that when you're looking at this year, we've had a lot of emphasis and focus on creating a sharp and a quality portfolio. So in that sense, just the fact that we are done with the active portfolio management work, that is important across all Guarding business, and that's obviously a significant part of the total business. We have also since 6, 12 months, and I think I've been sharing a little bit about that as well, also been spending quite a lot of time and effort in terms of how we are strengthening our commercial capabilities.

And that's partly leaders and leadership, some changes that we have been making to ensure that we're also bringing commercial leaders that are capable of also delivering the value proposition that we have now, which is stronger than ever, especially when you look at an increasing pace of shift towards more technology and more digital and risk-based capabilities. So that is another one.

The third one is also the -- that we have also been building also more -- or driving more changes in terms of incentive models, for example. And those incentive models to ensure that when we now have really strong different protective services capabilities that we are driving cross-selling, that we're driving upselling, but that we're also then doing more to be able to deliver more integrated and more intelligence-led capabilities to the client.

So all of this is fully in line with the strategy, but it is a little bit of a transition phase because we had very strong focus, obviously, on quality on operating margin achievement. Now we are shifting that focus back to profitable growth and also then in selling a richer offering. So I think that's a bit where we are right now.

And then as you know, nothing is happening immediately. We can take actions, but it always takes a little bit of time before we also start to see the full impact. But I would highlight that when I look at the Technology business, one of the most positive aspects about Q2 is the significant strength in order entry and the backlog because that's obviously an area which is significantly important as we go forward.

Makes a lot of sense. Maybe a final one for you, Matteo. The increase in the sales outstanding, is that a timing thing and we should expect that to revert during the second half of the year when your cash flows are typically stronger? Or what's driving that?

Yes. As I mentioned during the call, Dan, this is, I believe, a temporary effect, and we are expecting this to be normalized in quarter 3. That was mainly related to the strong sales evolution in North America technology, especially at the end of the quarter. Therefore, there is a bit of a timing lag there. And also, we had the ERP implementation in Norway, which we had a bit of a hiccup in certain processes. One of those was the collection of AR. And I believe this one will be solved also in the next week. So this will be recovered definitely in quarter 3.

The next question comes from Andy Grobler from BNPP.

Just a few small ones from me, please. You talked about Pinkerton and the impact of that lost temporary contract on growth and margin. Could you try and quantify that a little more so we can understand kind of what the underlying growth rates would be? And just to clarify on that, you talked about negative operational leverage as a result of losing this contract. But you've also said it was a temporary contract. So presumably, any cost build was just contained within that contract. And essentially, we saw better leverage last year when you have that contract and now we're just going back to a more normal level. Is that the right way to think about it? That would be my first question.

Secondly, just a quick one on the IACs, the guidance for the cash cost for the year is SEK 800 million to SEK 850 million, and you've talked about the transformation costs. Can you just go through the other components from a cash perspective of that cost for the year?

And then thirdly, just quickly, you mentioned this before, but the rise in DSOs due to the ERP in Norway and North American timing. Again, could you just help quantify how much that drove higher receivables and what the normalized level would be?

Andy, so I'll start with the first one, Pinkerton. I think as I said, Pinkerton was the main driver for the, let's say, flat evolution of operating margin in North America. And like you said, a temporary contract. So we are working, as Magnus also mentioned in the previous question, to -- from a cost structure point of view. So I believe we are moving on the right direction there. But also we are working to make sure that commercially, we continue to perform and grow on this important segment for us.

So both -- we continue to work on growing the Pinkerton business, but also we look at -- we are looking at the cost structure to make sure that we protect the bottom line there as well. So I believe this will be moved and is moving on the right direction in the second half. When it comes to the second question on the IAC cash flow, this is -- you're right, I mentioned the forecast at the moment is SEK 800 million to SEK 850 million for the full year. Majority of this is related to the close down of the SEIS business.

We are not certain 100% that will be completely impacted in 2026. Certain items might end up in 2027, but we will be a bit more certain and we can be more accurate in our answer in -- at the end of quarter 3 because right now, we are still evaluating a few things. But the majority of this is related to the closedown. And then the DSO, as I said, these are the main 2 impacts. The biggest impact of the 2, the one that I mentioned, the ERP in Norway and the sales growth in the U.S. is actually the U.S. business sales growth that has the biggest impact. To quantify it is a bit difficult. I would say that 70% of the increase that we see in the DSO is coming from the U.S., therefore, also the trade receivable will change that you see there. So I believe, as I said, that this is just a temporary issue because the sales was really strong at the end of the quarter.

Okay. Just to check a couple of things. The lost temporary contract, that will remain a headwind, all else being equal through the remainder of the year. Is that correct? And two, just with the closure cost for SCIS, are you still expecting to have a receivables unwind, which partially offsets that through working capital?

The second question, yes. And the first question about Pinkerton is yes, again. But we also need to see the underlying performance of Pinkerton without this temporary contract. So they are growing. And of course, they are not able to offset completely this termination. But again, working to recover part of this termination throughout the 2026, therefore, also improve their profitability.

The next question comes from Geoffroy Michalet from ODDO BHF.

I hope you can hear me. A few questions. On the portfolio reshuffling that you have finalized in Europe and Ibero-America in Q2, would you be able to give us kind of growth impact it had on the top line? And in your view, until when do you expect to see the impact on the organic growth going forward?

The second question is on the order intake you mentioned on the technology and solutions side. Could you give us a sense on the kind of clients that are, let's say, contributing to increase the order intake? Are they large, medium or small clients? And is it a result of some change in commercial activity? And also in terms of, let's say, sales cycle for the transformation of that backlog into sales, what kind of, let's say, delay do you expect? So when do you think we could see this growth in T&S increasing in your sales?

Yes. Thank you. So Geoffroy, when you look at the active portfolio management, this is a multiyear program that we have been driving. And obviously, on the Guarding part of the business, and that's a portfolio business. So we typically don't see very quick swings in that sense. It's usually a little bit more slower moving. But the important thing is that it's been quite tough work, but important work to ensure that all contracts are financially sustainable and that we're making decent profit. So we don't really project that, but it is somewhat slower moving when you're looking at the impact.

But obviously, over time, there will be positive impact from the fact that we have finalized that work. When you're looking at the order entry, the order entry is in the technology installations business that we are referring to, not the solutions business. But that's fairly broad-based. It's -- but if I were to highlight one kind of tendency, I would say, due to the economic situation, we're seeing more strength in a number of vertical segments like in Technology, when you look at defense, when you look at the financial segments, for example, where there is very strong demand.

If you're looking at more of the local businesses, there is more of a mixed picture. But the important thing is that it is broad-based. And the last question that you had, okay, if you have a strong and growing order entry situation and the backlog, well, some jobs we are able to convert fairly quickly. But here, we're typically talking 4, 5, 6 months type of situation when you look at how we're converting backlog to revenue. So that's a little bit the time line that I would keep in mind.

The next question comes from Viktor Lindeberg from DNB Carnegie.

A couple of follow-ups on North America from my side as a start. And GEG has not been touched upon that much. I think you mentioned about 1 percentage point of headwind on growth. But can you comment the impact on profitability in the quarter starting there?

Yes. So the 1% is on the income, so the operating income. I think on the margin, we're not really breaking that out. I would say it's more marginal impact on the margin overall.

Okay. On Pinkerton, just to understand the dynamics here. It's been a hot topic today. And you mentioned actually in Q1 that it was performing better year-over-year in terms of margin progression and nothing about the contract loss in itself. So was this a, call it, back-end surprise to you when looking at the quarter now and basically that you were operating with costs that were perhaps masked when communicating around Q1 and how Pinkerton performed back then?

Yes. We have some adjustments, like I said, Viktor, related to that termination. And then obviously, I mean, it is -- there is a full business context. But as I commented earlier, here, it's obviously important that we rebuild the commercial momentum and drive the growth, but the team also then working on optimizing costs so that we -- because otherwise, there is always a risk when you have a bigger top line swing that there is some negative leverage on the fixed cost base in the short term.

And apologies for that, missed on the technical aspect of it. Then more of a high-level question and maybe also connected a bit more to your medium-term targets. We are now looking at the coming 6 months and you face basically quite difficult margin comparables. You had a very good second half last year. Now we have a bit uncertain situation about the aviation business in the shorter term, we have a contract lost in the U.S. and so forth.

Can you share -- maybe not quantify, but share your view on the second half in terms of margin progression? Are we looking more sideways from here? Or you have internal initiatives and maybe some tailwind from the technology backlog that should support, et cetera, just to understand and clarify a bit where we are and where you think we are heading.

Yes. So when you look at what we shared, and we don't guide specifically for any time period, but just referring to what we said in the Capital Markets Day, we see with the portfolio and the capabilities that we have in terms of driving mix change, but also then increased efficiency in terms of how we operate an opportunity over time to drive around 20, 30 basis points. And that is the firm belief that we are operating with.

So I don't think that there is so much more to say. Mix change is obviously important because if we are driving significantly higher growth on technology and also solutions, that will obviously also have an impact and a clear impact. So I think the mix change is important. But we have also been shaping the business in a way that we feel confident that we're going to be able to drive continuous margin improvement over the next period.

And finally, just to clarify on the working capital in closing down the SCIS business. Has most of that cash flow being released now? Or is a bigger part ahead of us?

I think it's a continuous -- it's happening continuously, Viktor. I think the -- again, as I said, the forecast from a cash flow point of view is about SEK 800 million, SEK 850 million towards the end of the year. So I think we are in line with our plan. So it's a continuous happening in our cash flow.

Yes. This was more about the working capital release from the mounting down of the business and how it has affected the ratios, net working capital ratios, et cetera.

Yes. As I said, it continues throughout the 2026. So it's -- and our forecast at the moment is about SEK 800 million at the end of the year. And then again, as I said, there might be some items going into 2027.

[Operator Instructions] The next question comes from Nicole Manion from UBS.

Just one follow-up on the margin, please. I've had quite a bit of color on Europe and North America, but I think you also mentioned some negative operating leverage in security services in Ibero-America. Could you just give more detail on what you've seen there and how that's kind of evolving into the second half?

Yes. Thanks, Nicole. So I think that one was more temporary measures, a little bit related to movements that we had in portfolio. Overall growth in Ibero-America, very strong on the solutions and the technology side. I think it was more related to movements in the Guarding or the services business. But we have a strong track record and typically manage in a strong way. So that's also something that I expect that we're going to address swiftly.

There are no more questions at this time. So I hand the conference back to the President and CEO, Magnus Ahlqvist, for any closing comments.

With that, we conclude the conference. Thanks a lot, everyone, for your engagement and talk to you soon. Thank you.

Welcome to Securitas Capital Markets Day 2026. Thank you so much for joining us here in London, and thank you for joining us over the webcast. I'm Micaela Sjokvist, and I'm heading up the IR function at Securitas. During this morning, we will have a great team presenting, and we will have 2 Q&A sessions, and we will also have a long break allowing for both coffee and for 2 demos. Demos that will show our risk intelligence services and our digitization journey. So don't miss them. But now, let's start, and let me introduce to you Securitas President and CEO, Magnus Ahlqvist.

Thank you, Micaela, and it's wonderful to see everyone here at the London Stock Exchange. And if I look at the right place, also a warm welcome, everyone, who is joining us on the webcast. So today, we want to share our perspective on the security industry and what the clients are looking for in a leading security partner. But we will also talk about why Securitas is well positioned to benefit, but also to take a leadership position in the next phase.

And if you look at the last phase, we have, in the last couple of years or the last 5, 6 years, built a stronger, sharper and also more digitally capable Securitas. So we have a foundation today to move from transformation to profitable growth. And when you look at the next phase in our growth strategy, this is really about helping our clients in a more complex risk environment. It's helping them with security that is more connected and also more intelligence-led. And our ambition, as we've been working with our strategy internally, you always have to then highlight what you call the strategy and the kind of the wanted position.

And for us, that is to be the trusted partner in intelligence-led security. And in the past month, I had the opportunity to meet over 300 clients in Paris just last week and also in Orlando in the U.S. a couple of weeks ago. And based on all of those conversations, I'm more confident than ever about our strategy and that we're well positioned for the next phase. So today, you will hear about the quality of our business. You will hear about the scale of our business, and we will also talk about what intelligence-led security is all about.

But before we begin, let's just take a brief look at the progress that we have made. So I think over the last 5 to 6 years, I know many of you are following us closely, and you heard us talk about significant transformation, heavy lifting, but we've also driven quite a lot of progress in that one. We have invested a lot in our capabilities, strengthening leadership. And here, obviously, very happy that I have a number of great leaders and colleagues with me here today.

But we've also then been investing a lot in building our digital backbone that will enable us to scale and to build the business for the next phase. So when you look at a few of the highlights, starting with the Technology business. Our technology team have done tremendous work with the integration of Stanley Security. And they're creating Securitas Technology, which is now one of the leading Technology businesses in the world.

We've also strengthened our focus on execution capability. Stronger leadership, like I said, emphasis on accountability and also driving execution certainty. And we have greatly also improved our services and Guarding business. So we have Jorge and Henrik here who've done tremendous work in terms of upskilling, digitalizing the Guarding business, but then also doing a lot of the work with active portfolio management, and that's helped us also enhance the quality of the business to a level where we haven't been in the past.

And like I said, we built a digital backbone to scale. And I got the question many times from you, what are all of these investments that you're doing? And I hope that today, you're going to see the pieces also coming together as we are sharing how we're also starting to scale these digital capabilities to the benefit of our clients and also to the business. And when I look at this, this work is also translating into tangible results.

So we delivered on the 8% operating margin target that we communicated in 2022. And thanks also to solid profitability and cash conversion, we have also reduced our net debt to EBITDA now to 2.1. So we have a really healthy balance sheet. And all of this is thanks to building stronger partnership with our clients and doing that at scale. And we have been driving a lot of focus on client centricity since I started as CEO. And I'm glad to say that today, we're building deeper relationships with our clients, and we have a client retention rate just above 90%.

And this is important when you look at the growth opportunity because we have a really good group of clients that we can grow with over the next phase. Another focus that we've had is also building our scalable business. And today, what we call recurring monthly revenue is more than SEK 1 billion per month. So we are ready for the next phase. And today, we're also then announcing our new financial targets, and we are shifting the emphasis from the margin improvement to profitable growth.

And we're updating our financial targets with a 10% EPS growth target over a cycle. We've also been trying to sharpen the business, like I said. So we're also then increasing the cash conversion or the cash flow target to 80% to 90% and also the net debt to EBITDA to be below 2.5. And we are maintaining a strong 50% to 60% dividend policy. But to be clear, margin discipline that we have and the profitability remains central to how we are growing the business, and we're also maintaining the long-term ambition to get to 10% operating margin.

But what changes now is that now we're combining that discipline with an increasing focus on driving profitable growth. And we are really well positioned with our clients and also when you look at the external dynamics in the market to be able to drive this. And Matteo will go through a lot more detail also in his section in terms of what underpins the EPS target. But with that, let us now shift the focus to the future. So if you simplify a little bit, you can say that the last part was very much about building key capabilities. It was about sharpening our business and about the margin delivery.

And the next phase is now to leverage this foundation and the capabilities we have to then be able to bring more connected, more scalable solutions for our clients and also for Securitas. And it's very much about winning in a really exciting phase for the security industry. But before I talk about how we win, let me just share a few perspectives in terms of the dynamics in the market. And I think you all know, I've said many times that this is a very conservative industry.

But I firmly believe that the next 5 years are going to be more transformative than the last 25 years that we have seen in our industry. And why is this? Well, we obviously have quite a turbulent situation geopolitically. But if you look at this from our industry perspective, the change drivers are very much related to advances in technology, automation and AI. And those shifts are really now changing how security is delivered, how it's valued and also how it's being bought. And already today, when you look at artificial intelligence, it's starting to have an impact on our industry and the value chain.

So let me just share a few examples because I think these are important to also then have as context. And when I look at this, you will see that there is a number of different opportunities and dynamics where there is an impact. And if you're starting with the design, there is real opportunity to now optimize AI to design the security equation in a new way. But we also see significant opportunity in detection. So when you look at detection, when we have overlaid AI on top of existing camera infrastructure, we are seeing tremendous benefit in terms of the monitoring, reduction of false alarms, and this is also then helping us and optimize the resource allocation and the response.

And then you look at delivery. And here, I also think that we're going to see a really profound impact in our business. And this is obviously our opportunity to augment our security technicians that we have, the security officers that we have in the front line, which will enable them to have better knowledge and intelligence at their fingertips. This is going to be really positive also for continuing our journey of enhancing the productivity, investing more in our employees and also then adding higher value to our clients.

And then we have operational optimization. And this is something I've also mentioned in the last couple of years, looking at Europe, in particular, where Henrik and the team have also been leveraging AI to optimize our branch structure and to drive operational optimization. This is something that we have also started to scale across the entire business. So there's no doubt that there is going to be real impact and opportunities related to AI and automation.

But important for anyone in our Services business, which is still quite people-intensive is that you need modern platforms and you also need to be digitalized end-to-end to be able to capitalize on the opportunities presented. And Matt, Jonas and Serdar will provide more insights and examples during the coming sections. But when you look at these trends about AI, they are evident, like I said, in the dialogue with our clients. And we will talk about what the clients are looking for in a security partner for the next phase, but these are just a few major themes that I see are important and that we are hearing in our dialogue with them.

So first, just continuing on the AI theme, they are looking to capitalize on the opportunities presented with AI. But they're also very clear that the complexity for them is increasing. So they also need a trusted partner who can help and integrate, makes sense and also then operationalize to drive real value from the AI opportunities presented. Another important one is the clients also see that it's a more complex risk landscape, and they're also looking for a partner who can help and be more intelligence-led.

So that means essentially more on top of the risk of the threats that are facing their business. And then we have 2 other things that are not new, but that are important. And one of those is the emphasis on quality. Because when you look at this industry, we have seen in our market research and also when we go out and ask also customers that are not companies -- that are not customers of Securitas, quite often that the expectation in terms of quality is higher than the perceived delivery.

And that's obviously a gap when we talk about our strategy. Brian will also talk about how we also intend to close that gap and to do that consistently. And then last but not least, there is a continuous pressure on value for money. So everyone wants to do more with the same amount of money or some even with less. And I think this is also an important [ one where ] we're also well positioned with our capabilities to make that work. So when you look at these trends, this is exactly in line with what I heard also just last week when we were together with 100 clients in Paris.

But if you then move the perspective from the clients and when you look at the markets, we are fortunate to be operating in large and also expanding markets. And this is a picture that illustrates the 3 main areas where we are present. So when I look at security services, this is obviously primarily different types of guarding capabilities. And here, you're seeing a USD 240 (sic) [ 245 ] billion market. And we believe that roughly half of this market is addressable market for us.

And then just to qualify what addressable means, that means obviously where we are geographically present, but it's also where we have customers that are -- that place emphasis on compliance and quality, but who are also willing to pay for it. So it's a very significant market, around 3% CAGR is what we are foreseeing over the next 5 years. And then you look at the technology market and technology for us, that's systems integration, it's monitoring and remote services, and it's also the important maintenance in terms of the technology that we have installed for the clients.

And this then is roughly USD 130 billion market. And here, you also see that we have roughly 3/4, which is then addressable market share for us. You also see a slightly higher growth rate in the technology space, which I also think is normal given the trends that we are seeing. And then we have what is partly new to us, security risk management intelligence. And that's obviously -- it's not a small market, but in comparison to the other 2, it's fairly small.

But here, we are seeing significantly higher growth rate. And one of the drivers there is this increasing need for intelligence and working in a more dynamic way. When you look at Securitas, we are 100% security and safety focused. And this obviously means that this provides significant runway for us to grow market share and also to drive growth. And we have deep expertise in all 3 areas. And we're going to talk about today how we also then capture that value. So to summarize this section about the market itself, we see significant amount of change in the next 5 years.

We see that our clients are looking for a trusted partner who can help them in an increasingly complex, but also more promising type of situation or context. And we are fortunate to operate in large and also expanding markets. So let us then shift to our strategy and how we are winning in this next phase. And as I mentioned at the beginning, our strategy is to be the trusted partner in intelligence-led security. And our strategy has been built for this shift, and we have the assets and the capabilities to lead it.

So this is a simple or somewhat simplified illustration of how we think about fully integrated and intelligence-led security. And at the core, this is a fairly simple idea. So you're starting with the client's risk posture. We use intelligence to understand what is changing and then you adapt and mitigate the response accordingly. And this is obviously how you then go from intelligence or information that becomes intelligence and that we then translate into action.

And this is how security is becoming more dynamic, more targeted, but also more value focused. So now let me take you into the future a bit, and I'm going to show a video now just to share a little bit how we security -- how we see security evolving in the next 5 to 10 years and also what the clients of tomorrow are looking for in a security partner. And this is just to provide some context to why our strategy matters, but also then why we have the assets and why we're building the assets to lead in this context.

[Presentation]

So I hope that this gives you a sense of how we think security is evolving in the next phase. It shows the future client needs, fully integrated intelligence model -- intelligence-led model, which is then required to address it and to be able to work in that way. And in a few moments, Matt and Jonas will come back or come up on the stage, and they will give you a lot more detail to share what this looks like in real practice.

But let me just share a few more words about the strategy and our capabilities. So we have built 3 areas in security services, technology and security risk management. And when you look at these areas, each is strong, each is capable also to win based on the depth of expertise, the quality and the efficiency based on which we are running these businesses today. But the real differentiator is that we are able to connect these different capabilities in the next phase.

One integrated model which is giving the clients fewer interfaces, better coordination and also more value. And this is how we win share as clients move increasingly towards integrated solutions. And then you might ask the question, is this for everyone, and that will not be the case. One size doesn't fit all. Starting points are going to be different, and the ideal security partnership will also differ.

But I included this slide also to share a little bit how we are driving growth and how we think about growth. So when I look at this one, we have a number of clients who are just single service today. But as we win trust, and as their security needs are changing, we're also in a good position to move into more of a multiservice type of engagement. But then we also have the opportunity to migrate over to more fully integrated and intelligence-led relationship. And later, Brian is going to show you how we are doing this with our global clients, but I just want to say already now that what Brian is sharing about the global clients which is roughly 20% of our business, it's equally applicable across all the large and national clients that we have in our base as well.

So this is very much about winning. It's about expanding and it's about integrating in terms of how we are then leveraging the client base that we have to capture more value and to drive more growth, but at the same time, also increasing the value that we provide for our clients. And we have also now been after the last phase of a lot of building and transformation, we have also now start to put incentive programs in place to also then be able to incentivize the different parts of the business to also then work more related to the client and also then to increase the synergies and the share of wallet.

But when we are doing that and becoming more intelligence-led, we also then have more connected services. And this is also then helping and driving the recurring revenue. And the recurring revenue is a real proof point that the strategy that we have is working. So as we expand technology footprint and connected services, we then, at the same time, emphasize the integrated and intelligence led, we also then increased the share of revenue that is predictable, scalable and higher margin.

So we're building a more connected business in the next phase with stronger client relationships, higher scalability, more resilient revenue and also profit base. And this is important because there is higher stickiness also with the clients, and there is also significantly higher margin profile on these types of services.

So our strategy is simple. We want to lead this intelligence-led shift, scale innovation and win together with our clients. And these are the drivers of our next phase of EPS growth. So in the next sections now with Matt and Jonas, you're going to hear a lot about intelligence-led security and what is this all about. Serdar will talk about innovation and AI so that you would also get a better sense in terms of how is this evolving now and what's our view and the role that we are able to take in this space.

And then like I said, Brian will talk about how we are winning the clients, how we're scaling quality, but how we also then essentially work in that model that I shared with single service, multi-service and also then integrated model for the benefit of the client but also for the benefit of Securitas. And then after the break, Matteo will then provide more detail on the finance and also then guiding you through the thinking behind the financial targets.

But if you're looking at the first 4 here, these are really the engines of our growth for the next phase. And the rest of the presentations, we will just provide more proof points and hopefully also much better understanding of how we make this work. And then I just want to say that during the break, Micaela mentioned briefly that we will also then have demo sessions.

And I encourage all of you spend time with Mike, spend time with Lauren because there we will also share things that are not part of the presentation here, where we are showing how we are working intelligence-led but also fully digital in our business today.

So I think that is also really, really important for, for your understanding in terms of what is the type of machine that we have now built. But before handing over, let me just close with the most important point. And that is that the future of security industry and who is going to win is not going to be defined by presence alone, by technology alone or data alone, it's really about the winners will be those who can connect all 3.

Turn intelligence into action, and that is the advantage that we are now building at Securitas. We have local and global presence. We have global capabilities, strong client relationships and the expertise to be able to lead this shift. This is already happening today with our clients, and we see significant opportunity to drive profitable growth. So now I would like to welcome Matt Ellis and Jonas Florvik on the stage and maybe just then a special welcome to Matt because he has been a customer of Securitas for the last 10 years. He was leading and building the world's largest -- one of the world's largest security programs at Amazon. He joined us on the 1st of April, so it's a flying start, but it's really great to have you both on the team. So warm welcome.

Hello, everyone. As you saw in the earlier video from Magnus, Securitas is moving conventional security services toward adaptive intelligence-led solutions, combining risk intelligence, guarding and technology into one connected ecosystem. Now the dynamic model shown, the one that was shown in the video, just able to adjust in real time to changing risks is where we're heading. But there are clear steps for us to take in the journey for us to get there.

Steps like providing all of our frontline security officers with threat information and intelligence, steps like providing AI-enabled risk assessments whenever clients engage Securitas with services and steps like integrating technology, guarding and AI in a risk-based way into a turnkey solution for clients. And that is why Securitas has created SRM. I've worked in large-scale corporate security for over 15 years, and this industry has long talked about the desire to be intelligence-led and risk-based. And what's historically held back industry has been the lack of technology and the difficulty in scaling and implementing solutions.

And that has changed. The technology now exists and the innovation over the past 2 or 3 years has materially expanded what is possible. Clients now face a different challenge, choosing the right technology, integrating that into their existing environments and building and operating the models needed to deliver measurable security outcomes and efficiencies without introducing risk. And this is where Securitas can lead.

We are positioned to deliver intelligence-led security at scale, giving clients proactive decision-making advantages, strengthening their resilience, improving their efficiency and reinforcing our role as the trusted adviser. So I am new to Securitas, I joined about 2 months ago in my role as the President of Security Risk Management. And as I mentioned, I joined from a background leading large-scale security programs in industry. And through that experience, I have seen firsthand what intelligence-led and risk-based security can deliver when it's implemented effectively at scale. I've also seen that very, very few organizations have the internal resources, the expertise, the operational capacity required to build and sustain these capabilities on their own.

And coming from that environment, I've also been able to see the pent-up demand across the market for more adaptive intelligence-led solutions. There is a huge appetite from clients today, yet there are currently very few providers capable of delivering these services in a truly integrated and meaningful way and none that can offer them at scale. And that's exactly what clients are asking Securitas for and something that I've heard consistently since joining.

The challenges that they describe are familiar to me, integrating intelligence, technology and operations into a connected security model that improves outcomes while remaining scalable, resilient and, of course affordable. In my previous role leading corporate security at Amazon, I was responsible for over 500 locations around the world and support of over 350,000 employees. And experiences like that are what give me the confidence that Securitas is uniquely positioned and capable to lead the next evolution of security. I'd now like to introduce you to my colleague, Jonas Florvik, the VP of Securitas Risk Intelligence.

Thank you, Matt. And as Matt said, very few organization can deliver -- truly deliver intelligence-led security at scale. This is exactly the journey that we have started at Securitas. Since a couple of years, we have now digitalized our operations and how we interact with our clients through the client interface, MySecuritas. Today, we handle, for example, more than 3.6 million guard report a month in the platforms, together with that we have 80,000 active client users interacting with us through MySecuritas.

At the same time, we have built a baseline in AI, not as a future concept but embedded into our service today. Serdar will soon speak more about what we do within the space of AI. So my name is Jonas Florvik, I have been leading the client digitalization and AI initiatives within Securitas. From today and further on, my focus will be Securitas Risk Intelligence as part of shaping how we deliver intelligence-led security to our clients. I will also today share with you 2 examples on what we're already doing with our client. But before that, Matt, intelligence-led.

So intelligence-led security is about bringing together security services, technology and security risk management into a single ecosystem for our clients. And where this is really effective is when we can do it through a single-client interface. The investment in SRM, Securitas now has all of the component parts required to deliver intelligence-led security at scale. And intelligence-led security is not simply about collecting more information, it's about turning information into better decisions and better outcomes.

Our risk assessments will be providing clients with up-to-date view of the risk across their sites and their portfolios as threats and vulnerabilities evolve over time. From there, security planning can become adaptive rather than static. Site-specific security programs, post orders, incident response plans can all be tailored to the operational environment and continuously updated based upon events and intelligence. And our monitoring capabilities will combine public information, proprietary intelligence, client data, guard force reporting, technology systems and more to create continuously monitored operating pictures.

Of course, automation and AI will help filter and prioritize these signals at scale, allowing analysts and operators to focus their attention where it matters the most. And those signals can be transformed into finished intelligence and actionable insights delivered through MySecuritas directly to our clients and to our frontline security teams, reducing the noise, accelerating the decisions and triggering predefined operational responses in response to evolving and changing threats. And ultimately, this all must lead to action. Guards, technology, intelligence, operational workflows are all orchestrated together to proactively prevent incidents and to be able to respond more rapidly.

Of course, importantly, AI is an enabler for our guard force and not a replacement for it. The role of AI is to support our offices with faster insights, improved decision-making and allowing them to operate more effectively and more proactively so we can have greater impact for our clients. Intelligence-led security at scale relies upon 3 fundamentals: the ability to collect threat information at a global scale, the ability to translate that into actionable intelligence and the ability to deliver operational outcomes through execution, prepare, monitor, act.

SRM consists of 3 separate business groups, each of which will continue to be successful in its own right, supporting its customers as they do today. But collectively, they create something far more powerful, the ability to deliver integrated intelligence-led security solutions at a global scale. These 3 groups are Liferaft, a cloud-based threat intelligence SaaS platform that scales monitoring, alerting and investigations as well as frontline intelligence. This is how we collect threat intelligence data at scale. Liferaft scans billions of online posts and data points every day, generating approximately 10 million notifications each month and filtering those down into a few hundred highly relevant alerts per customer use case.

This provides the large-scale monitor layer that automates the collection and the triage, dramatically increasing the speed and the scale of the coverage of our threat monitoring across people, places, events and emerging risks. Securitas Risk Intelligence, 24/7 analyst-led intelligence capability that transforms global threat signals into curated, actionable risk insights. This is where threat data becomes intelligence and decision support. And on average, Securitas Risk Intelligence delivers more than 1,250 intelligence briefs and reviews over 20,000 events each month, helping clients make faster risk-based decisions through verified assessments.

And Pinkerton, a global risk advisory and protective services organization that converts intelligence into operational execution and measurable outcomes. Pinkerton delivers investigations, advisory services, embedded services, executive protection, travel risk management and crisis response capabilities to help clients operate more securely in complex environments. And together, these capabilities allow Securitas to move beyond conventional security delivery toward a connected intelligence-led model that can proactively adapt to the risk and deliver measurable security outcomes at scale.

Now Jonas will dive deeper into our Securitas Risk Intelligence business.

So if we look a little bit deeper into the risk intelligence capability, that capability is designed for a fundamentally more complex world because threat today are global, they are always on and they are interconnected. At the same time, our clients need to make better and faster decisions than ever before. So what we provide is a global intelligence partner that have 24/7 operations. We have analysts all over the world connected to data as platform as Liferaft, but also connected to our presence. But the real value is not just monitoring the threat. The real value is that we can tell the clients what matters to them and what they can do about it.

What we do is analyze constant flow of signals globally and translated into clear, actionable intelligence that is tailored for each client's operations and the risk profile. So in short, what we do, we reduce complexity and we enable decision. So instead of just talking about this in theory, let's talk about 2 live examples. This first one started in our global monitoring where we monitor for early signals. We could detect a signal. There was an identified signal or planned disruption linked to an activist group. So this was already a client to us. So we reached out to this client proactively with the intelligence we have.

With the intelligence, the client took legal actions and they secured a court injunction, meaning that the authorities can intervene early or even before it happens. And it also show how intelligence naturally involves into deeper partnerships with the clients. So they use this as evidence and the outcome of this was they reduced significantly their operational impact and brand impact, and it was estimated to USD 10 million. So this is an example of how intelligence can help the client act before it happens, not react to the incident.

My next example is one of the largest events in the world. You probably know about it. It's the Oktoberfest in Germany. The Oktoberfest, I believe, is a powerful example on how security is shifting. It's moving from manpower operations into intelligence-led security. At this scale, we have millions of visitors. We have a dynamic environment. We have a critical infrastructure with the transportation system that is part of the solution on delivering a great Oktoberfest. The challenge is not adding more guards, it's handling complexity in real time. This is exactly where our risk intelligence services come in.

So what we do is that we do a full pre-event assessment, not only on the venue, but also the surrounding, the suppliers, the transportation system. Then we continue during the event to monitor threats as the event happens. We provide daily briefs. We apply alerts to them. We constantly update them about the situation. But again, the value is not alone the intelligence. It's when we connect intelligence to our operations, to our technology and create one operational picture that is real time, always updated and connected to our people.

And that we do through, again, the client interface, MySecuritas, but we also flow the intelligence down to the people on the ground. So they enables them to take immediate decision, coordinated responses and continuously adaptations of the security situation. So it's just not intelligence that comes in and someone looks at it, we operationalize it into our risk profile. I believe that this is what it means to become a trusted adviser, helping the clients to move from a reactive security setup to a proactive security management because the client doesn't -- today doesn't only want to buy guards alone, they wants to buy better decision, early visibility and operational resilience. So Matt?

Thank you. So Securitas has invested to make intelligence-led security real at scale, not only through the creation of SRM, but through the continued digitization and modernization of our broader operations. And this is what our clients and our industry are increasingly asking for, security programs that are more adaptive, intelligence-led, efficient, outcome-focused, programs that not only strengthen the security outcomes, but improve operational efficiency and that are resilient.

And Securitas is uniquely positioned to lead this transition at a global scale. There is no other organization today that has the combination of intelligent services, operational delivery, technology and the global footprint required to deliver in a scalable and repeatable way. This represents a significant market opportunity over the next several years. As highlighted by Magnus, this is a $21 billion addressable market by 2030. But just as importantly, this is an opportunity for Securitas to help shape the future direction of our industry.

The tools and the technologies and the capabilities now exist to meet client expectations in ways that were just not possible a few years ago. But success depends on our ability to leverage that information and data at a global scale, getting the right information to the right people at the right time. And this is where we are positioned to lead. We are going to be first to market with these solutions, and that puts Securitas in a great position. The security threat environment is not static. Our models should not be static either. I'd now like to pass you on and introduce you to our SVP of Innovation and AI, Serdar.

Good morning. I would like to start my presentation with that image. Please imagine this. Another day in a large enterprise, thousands of employees, visitors across many locations, constantly changing risks, thousands of cameras and millions of alerts. So welcome to the daily life of an overwhelmed security manager. I'm Serdar Ince. I lead Innovation and AI at Securitas Technology. And today, I will present our plans to transform security through technology, especially artificial intelligence and make the life of that security manager easier.

Before this role, I worked at Securitas in different positions, leading product management and digital transformation. And before this, I worked in the security industry to develop software products. And before that, I did research at universities and a research lab. So I was able to see all the steps of a commercial product. And at Securitas, I was able to meet hundreds of clients to listen their problems. So my role is finding the emerging technology, build services and solve client problems.

So Matt and Jonas talk about this as well. If you take a step back of what we do as security professionals on a daily basis, what we do is we try to prevent or detect an incident -- prevent an incident, [ detect ] an incident. If not possible to detect it, then interpret, then act on it and then report or escalate the situation. So technology as one of the specializations has been always an enabler with its system sensors in each and every step. So what technology does is it extends the human reach, enhance the security, helps us move faster, interpret better and with precision.

And when we talk about technology to our clients, we always get the question, which technologies, which are the ones that are relevant for us. So what we do every year is we undertake a big research effort to identify the emerging technologies, and we publish it in our global technology outlook report, and a copy is available for you at the registration desk during the lunch time. So please take and I'll be happy to answer any questions. And this is the industry's most comprehensive technology trend analysis because it's a compilation of the feedback from our clients and market survey, technology partners and internal experts.

And the goal is to identify new technologies earlier to build services around it. So that's why we believe this is a competitive advantage. And of all the technologies that we talk about, artificial intelligence, especially Generative AI has been a very impactful technology in security. As Magnus said, our industry has been a conservative industry, but large language models, vision language models became popular in less than 4 years ago, but now we already have applications in security. And what we see is a major opportunity. Traditionally, what happened was all the data was coming from the systems to users. What we can do now is we can insert intelligence layer in between that will help us to filter the noise and understand the context in a way that was not possible before.

And of course, AI is available to anyone, so practically zero start-up cost. We believe we differentiate ourselves for 2 reasons. First, we have the capability to deploy and integrate systems that collect data. So all the different systems, all different sensors. And second, we believe we have the know-how to incorporate AI into new and existing into workflows. So our ultimate goal is to scale the operation to provide better security and safety. And what we observed is artificial intelligence has been impactful on especially in video monitoring.

AI has existed in some form in video monitoring for years. But what is Generative AI doing is it's about to unlock the next level in video monitoring to help us understand the context and give better information to the human. So let me try to illustrate what I mean with this example. So let's say you have an image like this. So about 2 decades ago, what we had was we had what we call motion detection. So basically, what it did was the cameras were able to tell that something changed in the camera. So you would get an alert and you would get a lot of alerts. And it was not very helpful for the operator. Then we were able to later use the systems to delineate the objects.

So we will now get the information that something is moving, which is again helpful, but not very helpful because you will get a lot. And then the algorithms, deep learning algorithms were able to classify the objects into human and vehicle, which is important for security, and we were able to get that there is a person in the scene. And what we do is we will set up a virtual zone and the AI will tell us there's a person in this area.

Again, useful, but it didn't give us the context. But now with Generative AI, if you take the same image and if you feed it into a GenAI model and ask it to describe the image as if you're sending the answer to a security personnel, it will say a person in dark clothing, wearing a cap is seen climbing over a chain link fence, indicating suspicious behavior or unauthorized entry.

And how is this possible? Because these models have been trained hours -- millions of hours of video, so they are able to identify these kind of things. So with this, we are reaching to a level that we didn't have before to understand the context in the video. So with this tool at our disposal, what I'd like to do now is I'd like to show how we solve the client problems using this technology. And what I will do is I will show 4 examples for client problems that we hear, and I'll show how we solve these problems. So these products are already available for our clients.

So the first one is I receive a lot of alerts, especially from an access control system because an access control system is meant to log opening and closing of a door. But let's say, you have an alarm saying that the door is open. Is it because somebody propped it open or somebody is moving the chairs. So what you should do is you should look at the video. What we do here is between this access control system and human, we insert an intelligence layer. So what it does is when it receives the alert, it looks at the video on your behalf and decides whether it should be escalated to a human. So this model that was trained from our -- one of our partners, and this is one of the pilots of that application.

So what it did was out of that hundreds of alerts that is coming from the system, it reviewed the alerts and it deemed that only 7% require human intervention. So what this means is that the operator spends much less time to review the alarms and focus on the real alarms that require human judgment. Again, this is available today from our teams.

The second problem that we keep hearing is I have a large enterprise and across the enterprises, there are always common security risks. People bringing firearms, there's a fight, there's someone falling down. So the question we got is, can the system watch the cameras on my behalf and tell me that something happened that I should review. Again, what we have here is a purpose-built AI model from one of our partners built on millions hours of video. So what it does is it can detect 150-plus different security risks.

So the AI watches the camera for you and sends you an alert saying that somebody fell down or somebody jumping the fence or people are fighting in this area. So with this tool, again, available today, this helps the operator a lot because they don't have to watch the video, the AI will do it on their behalf. So it will increase the efficiency. Another problem that we hear, okay, common security problems are good, but I sometimes also have very specific problems that I want to monitor in my camera. How can I do that?

That's another solution that we have. It is in our client portal. It is called SecureStat Cumulus. So what we built here is that we allow the user to talk to the system like the person is talking to a chatbot. So for example, in this case, the question that the client would like to monitor is, is there anyone wearing a balaclava or ski mask. So what the system does is it takes a picture of the event when something is moving in the camera. It compares to the question and sends an alert.

Yes, a person is wearing a balaclava covering their face while walking through a hallway. Again, this helps the user to monitor the video much more effectively. This is a solution that we built, and it can be used on existing cameras as well. We utilize the cloud infrastructure. Another problem that we have is cameras are good, AI is good, but I have a huge site. I don't have enough people to patrol my site or enough cameras. So how can I do this more effectively? So the answer is actually another camera, but this time, it's on [ leg. ] So what it does is it's an autonomous robot that can walk along the patrol route and it can detect people and backpacks along the way. So this is, again, a robot available from one of our partners.

Let me show you how the robot walks and see. So this is the view from the robots eyes. So what it does is it walks on the prerecorded patrol route, and it takes pictures, have 360 pictures and send them to an AI model. And then AI model in real time, identifies that, okay, there's a person here, there's a backpack here. So it just tells the operator in a remote station that these are the things that must be taken care of. So all in all, we are transforming video monitoring from a manual human-dependent process to an automation supported human in loop process, also from an evidence collection tool to an AI tool that can help prevent incidents.

When we tell the story, we always get one more question. And the question is, over the years, I installed so many cameras. How can I use my existing cameras without replacing? And what we believe is this is one of the differentiators that we have. What we can do is, we can utilize the existing equipment that is already on site. So what we do is we use the existing cameras. And whenever we need AI, we insert either additional hardware on site or we utilize the AI models in the cloud, and we transform an existing installation to use existing -- to use the best AI models. And while doing so, we also offer several services. We offer remote monitoring services.

You might remember that I kept saying that there's always a human at the end who will receive the alarm. It might be as well our trained operator in a monitoring station or remote maintenance solutions or storage of the video. So we are able to use existing equipment, use the latest technology and build recurring services around them. So all the things I've described so far are the ones that are available today that we can build and deploy. What about our future vision? What are the things that we will build? So Matt and Jonas talk about this as briefly and also Magnus when he showed that video, the constant changing risk landscape. We believe this is one of the views we can provide in the future for our clients, the future concept.

So it is a digital twin of their enterprise. What is happening? Where is it happening? The systems will not only collect data from many sensors, but the system will, again, understand the context what is happening in this data, even run scenarios based on the risk profile. And what will be shown to the manager is a live risk score that changes based on the new data. So the idea is to bring from thousands of inputs to a one decision-ready risk score that is updated in real time. Another concept, another possibility in the future is a security copilot. So whenever an operator is handling an incident, that person will need to do a lot, understand what has happened so far and what will happen next and what are the required actions.

So what does -- what this kind of copilot could do is it will summarize the incident until that point because that's the majority thing of an operator would do. For example -- in this example, a potential break in, says suspect entered this facility at this time, he tampered with the lock. Now he's moving to a restricted zone. And it will recommend the actions. So you can escalate the police, you can deploy a drone, you can deploy a guard. And as the operator takes action, the system will also say the status of the last action.

Again, this is a future concept that can be built by using all the information and data that we have from our systems. So AI-powered security, the goal is really to separate signal from the noise. And remember that as security managers, our goal is really to reduce the data and alerts that we receive, so we can concentrate on what really matters. Coming back to what Magnus and Matt said earlier about intelligence-led security. We already process millions of signals, reports, alerts every day. But without integration, that creates noise. What we do is connect those signals across the systems and turn into clear action for our clients, operators and officers.

As I've shown you today, these are not just theory. This is already what we are doing, and you'll see more of these in the demos from Mike and Lauren during the break. So to wrap up, why we believe we are well positioned to lead the AI-powered security. We believe there are 3 main reasons that we will be leading this change. First, we have the presence. We have the presence on site. We have the presence off-site in a monitoring station. And we already have been installing cameras and system over the years. So we have a very large installed base that we can bring into the AI world.

And second, we have the ability to connect systems, data and artificial intelligence. And third, we have the scale. We have the global footprint to deploy solutions worldwide, and Brian will talk about our global clients program. And what we also have is we have the ability to identify and adopt new technologies earlier, and we have the right partnership and connections with the leading technology partners. So we believe we are in a competitive position to lead the AI-powered security.

So with that, I would like to hand over to Brian Riis Nielsen, President of Global Clients, to show us how these new technologies make a difference for our clients, and we win with our clients. Thank you.

Thank you, Serdar. Wow, what a number of exciting opportunities to bring to our clients, not just what you shared, but what Matt and Jonas shared. So it's all about how do we work to bring all of this together in front of our clients. So before I go deep there, I will start introducing myself. My name is Brian Riis Nielsen. I've been leading the Global Clients business since it was established back in 2019. I have had the pleasure a couple of occasions to give updates on this development in this exciting segment.

Last time it was 2024, some of you might remember. I gave a lot of promises that we were on the right direction, great momentum. I see some of you smiling. So probably you are remembering. I'm pleased to say that we not even kept that momentum. We further accelerated that in the years to come, and that has been a huge contributor to achieving our 2025 targets. So now what? Today, I'm going to share some of the key drivers behind that success that we believe, like Magnus said, is scalable also to our large local and national clients to support the next journey in our strategy.

But before I do that, just a few figures on what I call a big success, the global clients, we have seen significant higher growth than the market average. Also when we track the comparable market of global and cross-border clients, significantly higher growth than the market. We have now grown from a low double-digit share of global sales in Securitas to now 20% of the total global sales. It's also fair to say that we have leveraged the AI also from a business point of view.

The Data Center business that we decided to invest in -- back in 2019 has been one of the key driver, if not the key driver of this growth. We see that both the complexity mentioned by a few colleagues here, but also the clients' need for a partner they can scale with. And there, we have been the preferred partner for many of these clients. You will hear a comment from at least one of them later. Also talking about our portfolio in Global Clients, you saw Magnus sharing the split in our business between single service, multiservice and the integrated services. It's fair to say when you talk about our global programs, only -- you can say until 2022, we were on the global programs purely or more or less 99% security services.

Only when we acquired Stanley, we got the capabilities and the credibility to then bolt on technology at a global scale. And what you see today is even just after a few years is that we have now started that movement that you heard Magnus talking about. We still have the vast majority of our business in single services and the security services, which we -- which I will go into a little later on how we are driving that single service business at quality and scale. But we are seeing a strong movement towards based on the trends that you have heard earlier today towards more combined multi-services than even the integrated services.

So with all the capabilities you have heard about, today, I'm so excited to bring more and more clients on this journey, as you might understand. But let's take a step back because no matter how many capabilities we build, no matter how many services we can bring to these security managers in this complex world, we have to be great in each of our specializations. So the quality that we have seen being such an important component of winning with our clients. And in the Global Clients business, it has been at a scale that we needed to drive even quality at a consistent level.

So driving that consistency with our clients, and I'm glad that one of our clients is here today now joining us as one of my colleagues. So I think that's a good statement that at least we have delivered something great. But what we then look at when you say what is required in the security services industry to deliver quality. We delivered quality through people.

And the security services industry in many parts of the world is not regulated. We can have very big variances in the wages. But we have went -- we have gone into this when we established Global Clients, but also what we have done in many, many markets. In a quality strategy, you need to be the best employer. You need to attract the best people in the industry, and you need to train them better than your colleagues. And then you need to have to run that nice cycle. I will give you 3 examples what we have done different to the rest of the market.

Maybe some of you remember, we shared the data center specialized certified training 2 years ago at the Capital Market Day. That has brought us into a position as the global market leader in data centers. But with the people working on these data centers, they are the best trained and some of the best paid in the industry. So we see higher client retention and higher staff retention when we do that. So all in all, a lot of clients find that attractive, not just the data centers, but we see a lot of other industries where you have high compliance, high regulations, but high standards.

You look at the life science pharma industry, you look at the defense industry that is growing fast now. We even on the local level also see the critical national infrastructure. So we don't see us being only dependent on one industry here. We see a lot of industries requesting this. So we find that the superior quality recipe here has worked. And we bolt on our digital capabilities to that because we have to admit that not a lot of clients have unlimited budgets.

So we need to make sure when we drive superior quality at a higher cost per individual, we need to make them more efficient than the rest. The best way to do that is to digitalize our operation. That's why the digitalization strategy that you have heard earlier today is so important because there, we drive efficiencies to our client. And a little bit on top of that, we become more AI-ready than the rest of the industry. So that's -- I'll come back to that. So when you have built that platform with your client, you build trust through superior quality, then the client opens up for, "Hey, what other services do you have in Securitas that we could buy."

So when you have that approach and in a specialized business like ours, we decided in the Global Clients business to be very structured in the way we collaborate because you heard all of these complex things earlier today. When we go in front of a client, we need to come together. So you can't win with one client alone here. You need to bring all the experts in here. So that's why we have seen this commercial orchestration so important across our specializations. But then we also need, like Magnus said, we need to incentivize. So it promotes and recognize and also incentivize strong partnership across our commercial team.

So that has been one of the key components. And I'm glad to say, like Magnus shared, this is now being scaled across our business to unlock the commercial benefits we have across our business. So let me now take a step back and let you also look at a few client comments here. These client statements, like you see, I'll give you a few seconds to read some of them. But reality is we have seen a trend now. We have seen a very, very clear trend in the client request and needs. You have heard it from Magnus and the other people here today, Matt and the team, the clients are asking more and more what -- how can you do to help us leveraging the benefit of AI.

And driving from single service into multiservices, but even into integrated services is, in many clients' view, the only way they can leverage the full scale of AI. You can ask yourself this question. Who do you think will be best of leveraging the full scale of AI? This client #1 with one or very few partners globally across all the security disciplines or the client or the company 2 here with 50-plus security suppliers. How do you think -- who do you think would be best positioned to leverage AI?

I think that's why you see some of our long-standing clients that I would say have been a single client of ours for decades now opening up is why you see some of our new, very new clients saying, we want to work with you. We know where we want to be, but it's a long journey. It's not something we fix overnight. But we start a journey today with many, many clients with an agreement on where we want to end.

And then I'm sure a lot of things will happen down the line, new opportunities, but we call that for trusted partnership and intelligence-led. So with that, I feel we have proven that the combination of building superior quality in our single services, combined with structured incentivized commercial orchestration opens up the client trust, the clients' willingness to work with us and with the add-on to the capabilities you have heard about today. I can say I have never been more excited to be in this company. I think we are uniquely positioned not just globally, but also locally to win significant market share.

With that, Micaela, I think need to hand over to you. It's time, I believe, for Q&A now.

It certainly is.

So I would like to welcome up the speakers from until now then. And we will take questions both from the audience here and please wait until you get a microphone and then please state your name and company. And then I will also try to weave in a few questions from the webcast. So please go ahead. Yes, gentlemen in the middle there.

Remi Grenu from Morgan Stanley. So the first question is a little bit to come back on this integrated service offering. Can you help us understand a little bit how the contract -- your contract structures are evolving to make sure that you can monetize all the services that you are offering to clients when you were moving from single services towards integrated services?

And then the second question is probably on the AI capabilities. If you can share with us what is the feedback from clients, what they're focusing on? Is it about the quality? Is it about cost reduction that you're helping them unlock? And if you've got any kind of quantified KPIs on this cost reduction that you can implement for clients when you're deploying these AI capabilities?

Brian, do you want to take the first one?

Yes, if -- just making sure I understood exactly how we are building the contract with these clients. Was the question, right?

Yes.

So we are seeing initially in the contracting phase. And I have to say most of our new client relationship starts as a single service client. We are -- I would say 2 areas. One thing is when we build the -- in the last couple of years, many of our new contracts, even though we contract a single service, we construct the agreement that opens up for bolt-on of other services within our business and ultimately an integrated service.

So we don't have to go through all the negotiation of contracting every time a client decide to bolt-on services. And secondly, we are incentivizing clients to do that. So we are building in even in a single-service contract initially, innovation and efficiency programs that really incentivize and also position the opportunity to drive efficiencies through multi-services but ultimately integrated services. And then I would finally say it is very rare that you can build that kind of contract in a traditional tendering process is normally happening when we have a client relationship but then start developing more risk based and consultative approach to a co-creation such as this in fact. So that's a little bit how we try step-by-step to build these relationships.

And I think just -- if you simplify that, you can say that if it's single service, multiservice, we traditionally then develop and also contract in a similar way as in the past. But what we're seeing with more and more of the clients that we are working with when they are saying that, okay, us sitting and orchestrating them as a customer, everything is becoming too complex. So we have a number of cases where they're now saying, help me and optimize all of this to what Brian just said.

So it's more like an open book type of approach that would say this is the total security budget, these are the outcomes that we want to optimize for -- help us and optimize that. And I think that is the shift that we are starting to see but like Brian also shared, it's also a smaller percentage of the global clients. So we have that one, but it's definitely a growing importance.

And I think that's very much also a reflection of the fact that security teams at the clients that they are also struggling to optimize this to be able to get the full kind of benefit. There was a second question about AI. And I think you asked about how do we -- or what are the kind of the metrics that we agreed or that we are searching for -- solving for.

Yes.

Yes. So I think when you look at that, when we are seeing, and this is typically that type of a dialogue. If we then have an existing solution, we see that there is real optimization opportunity. We will then sit down with the client also to what I mentioned before and say what are the outcomes that we are searching for. Some of the examples that Serdar shared when we have implemented AI or overlay AI based on existing camera infrastructure, if we are reducing the false alarms with 80%, 85%, that obviously means that there's going to be much more relevance in terms of where we spend the effort.

That will also mean that, that could be a case so we can actually then reduce some of the on-site -- guards that we have on site. But we will typically then also leverage that to also invest more in technology. But I think those ones, that's what we're also now starting to build more and more use cases and also then becoming more able -- to also be able to tell other clients based on the first cases that we have done what are the kind of savings that we believe or that we are fairly confident we can help you and drive in terms of optimization and then reinvest that would -- that essentially be reflected in the lower cost of ownership.

Great. Next question. Yes, up there, yes.

Very informative. I'm James from [indiscernible] Group. And I just had a question on your margin expansion strategy. So I just want to get an idea of how much margin expansion you can get from your portfolio management because from my understanding, this is set to conclude in Q2 of '26. And the second question is after the first half of this year, how are the margins going to be expanded in the T&S segment? Is it through pricing? Or is it through volume or a bit of both? How do you hope to expand your margins?

So I'll give a brief answer because then I will let Matteo also share because he will go into a lot more detail. But I think when you're looking at the active portfolio management, that's obviously been a specific program that you correctly also highlighted, we're finalizing that in Q2. Henrik can comment on that in the next Q&A section. And that is important because then after that point, it becomes business as usual. When you're looking at the margin expansion, we will go into the growth algorithm and also what is underpinning the EPS target.

But I think it's safe to say, and Matteo will share that later on, that we believe that we are very well positioned to drive continuous margin improvement from this point onwards. And that's a reflection of the fact that we are shifting also to your second question, more and more to our business towards higher value. We have more what we call recurring and scalable business with the recurring monthly revenue that is also then increasing as we become more connected, so the revenue shift is one.

But then I also believe that we're well positioned, and we've already done quite a lot also in terms of leveraging also more modern and scalable platforms to also drive better efficiency in the existing operations. So we feel confident about the opportunities that we have going forward. And then obviously, when I look at technology and the solutions that we have been reporting for a number of years, we also see that there we are really well positioned also when we look at the demand that we are seeing in the market and where connectivity and technology is just becoming more important. So those are the main trends. But I will leave it to you, Matteo, to break that down also in some more detail.

Next question there from Simon in the middle here.

Simon Jonsson from ABG here. I have a question on the Data Center business in the Global Clients business. So can you talk a bit about how that is -- is it more single product or multi compared to the rest of global operations, you think? Or how is the share for data center customers specifically?

Yes. I would say it's, in fact, the majority of the 15% is in the data center space, where we have very, very unique capabilities of specialization, both in our security services and technology. So that has brought us into a lot of client relationship where we have that multiservice. But we also see a lot of data centers still procuring single service, but it's definitely a trend right now that more and more -- you saw one example up here, clients that maybe over a lot many years have really procured security services guarding separately from technology, they are suffering from the fact where most of new data centers are built today, it's in very remote areas. We need to find new solutions because we simply struggle to keep up with the need for labor.

So I think it's a very open dialogue with these clients now, and we need to find the future solutions. And that's why they are turning towards not just because we are the leader on the security services side, but because we have the opportunity to combine with the technology and with the risk and intelligence now that can reduce the need in the future for too much labor to protect these data centers. And then I haven't -- we haven't thought about the next generation of the data centers in the space. But right now, they are primarily out in the remote areas. But that in itself gives a challenge there. So it's a combination, I would say.

Next question up there.

Victoria from JPMorgan. My question is on the Security Risk Management business. So when you win new business with your clients here, is this an activity that they usually did in-house before, like the risk assessment, the intelligence things or is this something that they didn't do before or they did with another provider? And -- so I just want to understand that dynamic.

Yes, some and some. So some opportunities are, as you say, to take functions that are being done in-house and to add more value by doing that in an integrated way. Some providers are not engaging services at all today. So that's new market opportunity for us. But as we look at what we're going to do in SRM, there's driving the 3 businesses forward that I highlighted and creating the synergies and opportunities between them to our customers but there's also the work that we're going to do for Securitas in enabling that integrated solutions to be delivered to customers because the revenue gain for SRM will be relatively small. It's the market share that Securitas will take. So we're an enabler for Securitas, but we're directly growing as separate businesses.

Andy here on the second row.

Andy Grobler from BNP. Two, if I may. Just firstly, when you talked about AI and technology and implementing it, to what extent is that deflationary to your existing revenues with that client? And how do you offset that? One of the client testimonials talked about it significantly reducing cost? And then secondly, just in terms of competition, you said you're uniquely placed, but there are others out there that can provide many of these services. What do you do to differentiate? And where are you seeing the greatest competitive change?

I think if you think about the deflationary impact, it's probably more related to the security officers that we might have on -- that we have on site. And I think that -- that one, I would say, based on what we see, you can look at that as a deflationary impact, but you also look at that as a real opportunity because when I look at our industry, it's very people intensive. Like Brian said, also just looking at the data center space, there's a lot of people who are engaged. We have consistently been driving also to say how can we enhance the productivity of our employees.

And there, obviously, we see tremendous opportunity with AI to also make that happen. So I think that is kind of a counterweight. But if you're just looking at the pure optimization program based on AI, unless you're able to take a different type of a role, I think then you have a bigger impact. But the important thing today is that, I mean, we have one strong leg with our Guarding business. We have another one with the Technology business. Today, then also with SRM, we are able to take an end-to-end position. And I think that is what is taking us into the second point in terms of where we are different because when I talk to many of the clients and maybe not where Matt just joined us from, but if you look at the Fortune 500 clients, most of those customers, they don't have the expertise to design and to integrate and operationalize the program with a lot of different vendors.

They just don't have the competence. So I think the competitive edge that we have is that we have tremendous value with our presence that we have, and that's obviously our security officers who are on site or mobile, I think Henrik has more than 10,000 [ cars ] in Europe alone, mobile officers. So that value itself in combination with technology and also then with the SRM and the ability to integrate and operationalize the program, that is what is making us unique because if I look at all the competitors are either Guarding businesses or they are in Systems Integration businesses.

And then if you ask the last question, and you say, okay, on the software layer, then there will be different software companies and we can do quite a lot. But they don't -- I mean, they can then only essentially manage data, but not able to orchestrate the response. We take the intelligence to action essentially. And that's what we can do dynamically, but we can also then adopt that over time. So that's the reason that we are saying that we are unique and uniquely positioned to also benefit when we're looking at the next phase.

Okay. Gentleman up here.

It's [ Miguel Medina from Lighthouse. ] I have 2 questions. The first one is linked to the previous question when -- regarding the addressable market, you have a very dominant share in the traditional bid -- sorry, you have like a 50% share in the traditional bid and very dominant shares in the technology-led areas. How do you see those evolving over time?

Are you going to be able to maintain that very large market share in both? That's the first question. And the second one is on regulation, which has not been mentioned during the presentation. With all these data analysis, AI implementation, et cetera, are there any jurisdictions that from your point of view, are more forthcoming or you are basically neutral in terms of regulation?

So I guess I'm taking that question. If you look at the different markets, so we talk about the USD 240 (sic) [ 245 ] billion security services, so that's essentially Guarding business. And then we have technology and SRM. When we are calling out what we say is addressable market, that is the market then out of the USD 240 (sic) [ 245 ] billion, we say it's roughly half, which is then around $12 billion essentially of addressable market for us. So -- sorry, $120 billion. So it's still very significant market. We have around $10 billion, $11 billion or something like that of that market today.

So even if we are kind of cutting the market in half to say what is addressable, when you look at the market share, we still have a fairly small market share in that space, and it's very similar also in the technology space. So this is also -- that the nature of this industry is that it's still very, very fragmented. And when we talk about runway and opportunity to grow, it's that small type of market share, which is really driving the difference. On the second question, I think regulation, number one, anything that we're working with in terms of data, we're obviously working and putting a lot of emphasis on how we ensure full compliance.

This is also something that we were leveraging the investments that we have made also in modern platforms because this is obviously about managing significant amounts of data every day that we heard earlier from Jonas. So I think that is one point. The other one, when we talk about critical infrastructure regulation and things like that, I believe that is positive for Securitas because it's just about strengthening the kind of the quality requirements. And when that is happening, I think we're also well placed to do that as a serious player that has always been focused on full compliance and quality. So I wouldn't say that regulation will be a negative thing. It's rather an opportunity because it will help and put more emphasis on quality and compliance.

We have time for one more question before the break. Yes. Oh no, Johan here.

Johan Eliason, SB1 Markets. I would like to ask about the financial targets you presented today, the 10% EPS growth, the cash conversion target, the debt ratios and policies, they are all good, and I do appreciate the improved cash conversion targets you introduced. But by and large, they are basically the same numbers that you had pre-Stanley. And then to some extent, it's the financial targets you had for a decade. And this Capital Markets Day could have been 15 years ago without Goransson talking about increasing the technology share and improving the margins going forward.

But by and large, 10 years went on, and we saw nothing happening with the margin target. How do you make sure with these targets? Yes, you do still have this 10% margin target longer term, as you mentioned, but you didn't present it in the slide itself. How do you make sure that we still can expect margin improvement over this period?

For example, I mean, what will stop your managers taking on a new contract like the critical infrastructure just to make sure that the EPS growth will be fantastic when this new big contract comes up with a 2% margin or whatever. I think the margin target in itself is important because it gives robustness to your earnings. Investors like that. And it also tends to give companies with higher margins a better valuation profile because it does show the moats that you have from your competitors.

First of all, I think we are a completely different company today compared to 10 years ago. When we decided in 2022, when we acquired Stanley, I think that the lack of credibility we had was that we have been talking about higher margin opportunity as we were shifting significantly bigger part of the business towards technology and solutions. But it hadn't -- I mean, we haven't really shown it. So a very important decision that we made in '22 was that we said, well, we're going to make that 8% operating margin target. That's the main target because we need to show that we are capable of driving that shift.

And that I have to say is really good because when I presented those numbers in '22 and when we asked people in the audience after, most people are saying there's no way you're going to get to 8% without shrinking the business. And we have actually grown the business, and we have expanded the margins. And that's obviously based on the capabilities that we have, but it's also based on the great work that our team has done.

I think when you're looking at the next phase, our thinking is that now we are in a significantly better position, much more focused, and I didn't mention that earlier in the morning, but we have also divested or closed more than $1.2 billion worth of business just to sharpen the business so that everything that we have is fully consistent and in line with the strategy. We have capabilities in technology, security risk management, but we also have a Guarding business, which is in a much, much better shape.

And I think that's something Brian also shared good examples from the global clients. So the next phase is more about -- I think we're in a better position now to also then optimize. And that optimization is essentially assuming that we will have continuous margin improvement, but also then shifting focus on growth of the entirety because that is obviously what is adding value in the end. And then to your very specific question, Johan, we have also constructed the incentives in a way that will prioritize profitable growth and going downwards in terms of margin just to chase some volume, that mistake, we will never do that again.

And by that, we conclude the first Q&A session, and we're now having a long break of 60 minutes. And I suggest that we meet back in here at 5 past 11 to recommence the Capital Markets Day. But a few instructions before you move. On your badges, you are -- you have a group number of 1, 2, 3 or 4. And group # 1 and 2 can now go to the first demos. And group #3 and 4 can go and have some coffee and do some mingling. And then you will switch and you will be shown where to go, but the demos are over here. So see you in 1 hour.

[Break]

Very good. So great to see you back, everyone. Just before I introduce Matteo, I also wanted to say I realize there were a lot of questions in the 2 demo sessions on end-to-end digitalization, also on risk intelligence. All of us will be here between 12:00 and 1:00 so during the lunch. So for those who didn't have the chance to ask questions, we would be happy to address those as well. So now we have the last part of our presentation today. And now looking forward to welcoming Matteo on the stage. And just like Matt, Matteo joined us on the 1st of April. And when we were looking and I was looking for a CFO, which is very much also a key partner in terms of driving the business, I was looking for someone who had obviously genuine good financial experience, but also somebody who had been preferably working and operating a leading service organization. And that was a little bit how I found Matteo or how we found you, I should say, with a number of years at up at Atlas Copco.

And many of you probably know that as an industrial group, but we also have one of the leading service organizations across any category in the world. But then Matteo just joined us most recently from ASSA ABLOY, where he was also then leading a significant business in the EMEA region.

So with that, warm welcome, Matteo.

Thank you, Magnus, for the great introduction. I'm really happy to be here today. My name is Matteo Dall’'Ora, and I'm proud to represent Securitas as the new Group CFO. I spent in my career not only on financial roles, but also on businesses roles, always with a strong focus on customer and business performances. For me, finance is not just about reporting numbers, but actually using them to drive business decision and strong performances and ultimately, more value for our customers and our shareholders. And this is exactly what attracted me here in Securitas, a company with a very strong legacy and performances, a very good market relevance and a significant untapped opportunity. And I think what we have seen today for all my colleagues highlight the scale of opportunity that we have in front of us.

In my first 2.5 months with the company, I had a chance to meet a lot of our leaders and get a better understanding of our strength, but also the area where we can improve further. And what stands out to me is that we have a very committed leadership team with a strong focus on customer and that also work in a very -- they work on a journey to improve the company and position our company very well for the future. So what I will show you today is that we have a company with a much stronger financial performance with a very clear value to create more value to the company and that we have disciplined path to deliver profitable growth.

But before I deep dive into the future, allow me to spend a couple of minutes talking about what changed in the business in the last couple of years. In the last few years, we have significantly strengthened our financial profile. We have improved our return on capital employed by more than 60%, reaching a great level of 16% for the total business at the end of 2025. We doubled our free cash flow from SEK 3.4 billion to SEK 6.8 billion. And in 82% of our market, we have improved our profitability of more than 50 basis points. From a group perspective, we have improved our operating margin for more than 1.4 percentage points, reaching a 7.4% operating margin for the full year 2025. And if I exclude the SEIS business, 7.7%. As Magnus also highlighted earlier, we continue to focus on recurring revenues, reaching SEK 1 billion, and we know that this kind of business is also very good from a marginality point of view. And we continue also to improve our operational efficiency with an improvement of 30% in revenues versus employee compared to the 2022 period.

So overall, this reflects a business that have become more efficient, more profitable and more resilient. Now when I look back and we look at the communicated external target, I think also we have delivered very strongly. We reached an average of 8% real sales growth in Technology & Solutions business. It's also true that if you look at the full period, in the first part, we have delivered a much stronger growth. In the second part, we're lowering a bit, but still reaching an average of 8% over the period to position ourselves in a very good position for the future. We delivered for the last 2 quarters of 2025, an average operating margin of 8.2%, and we continue also to deliver a very strong cash flow and this averaging of 81% over the '22-'25 period.

We continue also to be stronger in our financial position, delivering a 2.1x net debt to EBITDA at the end of 2025. And in the period also, we continue to pay out a good level of dividend to our shareholders on an average of 50%. So overall, we have delivered on our commitments, and we are now in a much stronger financial foundation. And this put us in a very good position for the next phase. Over the past year, we have been working in stabilizing the business, completing the STANLEY acquisition. We are working on an active in strategic portfolio assessment, and we have also exiting markets that did not fit the long-term strategy of the company. At the same time, we have improved the profitability with active portfolio management. We are creating more efficient with transformation and optimization program and the realization of the acquisition synergies. We have invested and modernized the business, and we have now a much stronger, more focused and more resilient business.

With this foundation in place, we are ready to enter the next phase, accelerating profitable growth. leveraging our portfolio, strengthening our value proposition and improving our customer retention. I'd like to repeat what Matt Ellis said earlier. There is no other organization in the market today that can deliver intelligent capability, technology, operational efficiency and presence to deliver this solution in a scalable and repeatable way. I think this is a significant opportunity that we have in front of us. Now as Magnus introduced earlier, I'm glad to present our new financial target for the next phase.

We decided to make our targets sharpen and more ambitious. But let me start first with the operating cash flow. We increased our operating cash flow ambition from 80% to 90%. After achieving, I show you a few minutes ago, 81% on average over the last period, we decided to increase the bar because we have the fundamental to do so. We strengthened our capital structure, targeting our leverage below 2.5x net debt to EBITDA, and we want to continue to deliver to shareholders a good payout in terms of dividends between 50% and 60%.

Now let me explain why we have decided to change the target to EPS rather than keeping Technology & Solutions and operating margin as a main target. The target typically reflects the strategic phase where the company is in that particular moment. And the previous phase, we knew very well our target. We wanted to effectively integrate STANLEY acquisition. We wanted to become the leader in technology solution, and we wanted to achieve an 8% margin by the end of 2025. So now the company is completely different. We are more stronger, more resilient and more profitable, and we are now ready to enter the next phase. And that's the reason why we decided to have EPS as a core target.

EPS brings everything together, growth, profit and margin, capital efficiency and capital allocation. So this is the best measure to understand whether we are creating value for our shareholders. But let me explain now how do we want to deliver the 10%. We want to deliver the 10% from 3 main drivers. The first one is about growth, which will impact roughly half of the growth that we are expecting on the EPS. We aim to grow organically by 4% to 6% per year, which will allow us to increase our market share. We have seen earlier from all my colleagues that Securitas today has all the components to deliver an intelligent-led security at scale. Second is about margin improvement, which is about 4% of the total 10% on EPS. We want to continue to expand our margin by 20 to 30 basis points on a yearly base, driven by efficiency and mix. The cross-sales and upsales opportunity as well as the integrated services will increase the mix. And we know that this mix is more profitable. Therefore, we will improve our marginality.

And [ Joergen ] coming back to your question, we want to grow in a profitable way. We will not go back as before. We want to continue to improve our marginality at least by 20 to 30 basis points on a yearly basis. I think it's important to remind, Magnus said it earlier, our long-term ambition is to be a company of 10% for the group on operating margin. And the third, but not least, is about capital allocation through disciplined deleverage of our financial position, but also value-accretive M&A. This is not aspirational. We have seen from all my colleagues that this is happening already today, and we are able now and we want to scale it up further. We have seen also from Magnus that we operate in a large and growing market. Today, the security market is about USD 300 billion. And the serviceable market where Securitas wants to operate is also large. It's about $200 billion. And we have a fairly low market share overall of less than 10%.

I think it's also important to say that the market where we operate is not a mature, it's not a low-growth market. It's actually growing more than the GDP in all the geographies where we operate. So the combination give us a significant headroom to grow across all the region. Combine this with our strong value proposition, give us a solid and credible foundation to deliver sustainable profitable growth in the range of 4% to 6%. The opportunity is clear. Now it's about to convert in this through disciplined capital allocation. And we want our capital allocation to remain disciplined and consistent. We maintain a strong balance sheet, and we aim to have a leverage below 2.5x net debt to EBITDA. We will continue to invest in organic growth, and we know that the mix towards technology and more integrated services will drive the growing CapEx. But on the other hand, we will continue to work on efficiency to keep the CapEx below 3% of sales.

We want to continue to return a strong payout to our shareholders in terms of dividends between 50% and 60%. And at the same time, our financial position will allow us to restart the M&A activity and targeting a growth of 1% to 2% on average per year over time. And if we are able to generate more capital, above all the priorities that we have discussed about all the priority -- the growth priorities that we have discussed, we will return it to shareholders. But let me spend also a moment how do we think about M&A going forward. Our approach to M&A will be discipline and focus. We aim to build a consistent value-accretive machine, contributing 1% to 2% annually growth on average over time. We will prioritize technology bolt-on with focus on recurring revenues and synergies potential. We will look at geographic expansion where we'll strengthen our position. And together with Matt, we will also look at opportunity in the security risk management area.

All acquisition must be strategically relevant and EPS accretive. Timing of accretion will depend on the assets that we are going to purchase, but discipline and value creation will remain nonnegotiable. So all in all, this brings together all the elements of our growth strategy. I think it's needless to say, but I'm truly proud to be part of this company and more excited to what is coming in the future. Over the past year, we have strengthened our fundamental, improved profitability and build a more focused and resilient business. We are now ready to enter the next phase. The fundamentals are strong, and now we scale a profitable business with discipline and clear focus on shareholder return.

Thanks for listening.

And now we are ready for the next Q&A session. And I would like to invite [ Magnus Henrik ] who is our Divisional President for Europe; Jorge, who is Divisional President of North America; and Tony, Global President, Technology up on stage. And we have the first question coming from Remi Grenu from Morgan Stanley here in the middle.

The first one is on the North American market and the competitive landscape there. I think looking at some of the data from industry provider, it feels like you've lost a little bit of market share over the last few years. So first, is it something you recognize? And if so, how are you thinking about the competitive landscape there and to win market share from your competitors in that geography? The second one is on the 4% to 6% organic growth algorithm. If you can help us maybe understand a little bit of the building blocks between the different divisions, Security Services, Technology & Solutions, for which you previously had a guidance for revenue growth. So if you can help us understand a little bit the drivers there. And the last one is on M&A. So 1% to 2% of sales per year. Is it possible to have a broad idea of an envelope of investment you will need every year to kind of reach that 1% to 2%? Or if you can help us a little bit steer the discussion on capital required for that M&A ambition?

Jorge, do you want to start on North America?

Yes, thank you. It's a good question. And the way we see it on the services side, we have a huge opportunity for growth in North America. So the data when we look to external data, we can have 10% market share. And strategically, we are changing our go-to-market. When we look to the client segments where we see that our strategy fits, we -- our market share is really low. So we have been measuring that, and we see a huge improvement and opportunities on that. I don't know if the technology you want to comment on.

No. As far as the technology business, what we have seen is with the STANLEY acquisition and the combining of our businesses globally, we are actually -- and with our organic growth, we're actually sitting in a very strong market position. Clearly, either the #2 or #1 commercial electronic security provider globally.

And I think on the 4% to 6% organic growth, one question, if I understood correctly, was help and share a bit where is that coming from? I mean if you can look at that in different dimensions. One is we are in a really good position to win and to grow with existing clients. So I think that is one. Second one is obviously also with the strength of the offering that we have, we have really good opportunity to also win new clients in light of the kind of the security context that is developing. When you're looking at the data, my expectation would be that we have a higher growth rate in technology, higher growth rate also than in security risk management, but still a healthy growth rate on the Guarding business because the Guarding business, and I also realized the interest in the breakout session, we are building a really high-quality operation. We're trying to address a number of the key points that have been weaknesses in this industry and it was more volume-based.

And the exciting thing is that the presence that we have and the people that we have, they will be as important in the future as they've been in the past. I would argue that it will be more important because we can also invest more, which is what we are doing. So that is a little bit the kind of the perspective between the different business lines. But then I would also say where we have the majority of our presence, we see good growth opportunity in North America, similar in Europe, similar in Ibero-America, but also then in the EMEA region, which we report under the other segments. There, we have a very significant market, but fairly small business in comparison, but we also see slightly higher growth rate in the market. So I think that we are quite well positioned with the geographic footprint, but also the service lines that we have in the business today. Then we had on M&A.

On M&A, I think for M&A, we are working hard to build the pipeline, first of all. As I said also in my presentation, we want to be disciplined and value accretive when it comes to M&A. So -- and of course, the time of accretion will depend on the asset that we are going to buy. So it's very difficult to give you exactly the multiple that we're going to pay for the acquisition. But again, we want to be more disciplined and more focused and value accretive on M&A going forward, prioritizing on technology bolt-on geographic when it makes sense. And also with SRM, we just did Liferaft. So I think we need to make sure that we function there and we go and then we can look ahead as well as other opportunity over there.

But I think if I look at the technology business and what Tony is leading, when we acquired STANLEY, we doubled our technology business overnight. And we built fundamental capabilities where it really matters the most. I think the important thing that we see today is that today, we have done a deep integration. We have built common systems. So we have a really good platform. And from that perspective as well, we can also afford to be more selective about where do we drive investments in terms of coverage and density when you look at systems integration and maintenance, for example, or which are the spots where we then also say that here it will be beneficial also in relationship to the clients that we also strengthen our presence. So we are, I think, in a much better position today compared to a couple of years ago, thanks to the fact that we now have a strong and scalable platform.

Good. I'm actually going to take one quick question here from the webcast. What are the main levers to achieve an operating margin before amortization of more than 10%? So the 10% operating margin ambition, what are the main levers to reach that?

So I think if you look at the growth or the growth formula that Matteo shared, in a way, if we are successful in delivering the 20, 30 basis points every year, obviously, we're going to get there in not-too-distant future. So I think continue to refine how we are running the business, continue to also then tap into the synergies in terms of higher-value business, which is more in the technology, more in the connected space, more in the SRM space. but then also continue to drive real operational improvements in our Guarding business. And there, I mean, when I look back at 2024, when Henrik and Jorge and a few others were then presenting, we have done tremendous work in the services business and improving.

And we also see continued opportunity to drive improvement. And that's obviously based on new ways of working, modern platforms and also driving that kind of productivity improvement that Matteo highlighted. So I think those are the kind of the organic things that are really within our own control. And then obviously, Matteo also highlighted acquisitions because we are in a very good position also to accelerate also acquisition activity, but always then with really, really high discipline.

Yes, [ Dan Hammer ] here from SEB.

A couple of questions from my side. Maybe starting with the 8% technology growth. Do you have a firm view of what the market growth has been during this period? And I know construction activity has been quite dampened. And that's typically when you do some bigger installations at least security systems. So what's your view of your performance versus the market?

Tony, do you want to cover on the installations market?

Yes. I would say we have been performing at or above the market. In the Q1, we were actually down, I would say, and that was really a temporary pause because we have seen a real strong order and also a growth in the backlog, which for installations, you could see a cycle with the larger installations having different cycle times. So anticipate that we'll be back at where we have been historically.

And I would say to your comment on as well is if you look at North America, where we have the best data in terms of installations, we also see a bit of 2 different types of situations. So a lot of the kind of normal business and normal industry, I mean there, it has been subdued, like you said, in terms of construction and activity. On the other hand, in the data center space, there has been very significant and healthy activity. So it's been a little bit 2 stories. But I think that when I listen to the clients and also see what we are gaining in terms of our order book, we are in a good position. And I don't see a reason why we should not be able to grow as market or faster than the market on a sustainable level for many years to come because we also still have -- even though we're a leading position globally today, we #1 or #2 type position, it's a very fragmented market. And more and more clients are also looking for a stronger partner who can help them and drive this integration and then also operationalize how we work.

Maybe a final one, if I'm allowed to. In terms of the 10% EPS growth target, it excludes ISCs, and you invested quite significant over the last couple of years in terms of modernizing the platform and making it end-to-end digitalized. But in order to keep up the same state of the platform, what sort of investments do you foresee here for -- to deliver on 2030 strategy?

Do you want to start?

Starting first, maybe a comment. You haven't seen ISC comments in my presentation because I think we want to live it in the past. What we believe now we are reaching a level that we will not go above level of ISC. So today, we have one program over there, and we are not forecasting to go above that level going forward. So that's why that will be less relevant, I would say, for the future. When it comes to transformation, I think the company has been transforming over this year already a lot, and we will continue to invest and modernize the company. But I also said that we will invest in organic growth, and we will keep our CapEx below the 3% of sales. So it's not that from now on, we will have to invest a huge amount of money because we have already done this, and we have a very good platform to continue to do that.

And I think if you take a historic perspective in 2018 and '19, when we had the Capital Markets Day, we talked about this type of a future that we have shared this morning as well, where the winners and the winning combination is going to be a combination of people of presence and technology and data. But we also realized back then that we were quite underinvested and not capable enough in terms of modern systems and platforms and being digital. And so I think that it was also a very different starting point. So now we have done a lot of those investments. We obviously also intend to leverage those capabilities also in the next phase.

And I think that is also something which I understand as well that we have received many questions throughout the years, how much are you going to invest, but it was very much based on the vision that this is what it's going to take and the capabilities we have today to really win and to win big in the next phase. So I don't really regret any of the investments. I'm really grateful that we are through that period. But -- now then that's why we're also saying that we believe that we're in a good position to then shift the focus from more kind of transformation-related work to really driving growth.

Yes, Andrew Grobler here again.

Just a couple from me, if I may. Just if you hit all of those targets in terms of the growth and the margin and the cash flow, even with the M&A, you're going to be -- your leverage is going to come down. At what point do you start either increasing the dividends, share buybacks, special dividends? Is there a point in time when you make that decision? And then secondly, just a small one. In terms of the data center business, which you've talked about several times. Can you just quantify how big that is? And in terms of the profitability, where that sits relative to the group?

I think give you a specific timing, and it will be difficult. But as I said also, if we have excess capital above all the priorities that we put in place, then we will give it back to shareholders. So this is our intent. And like I said, we will -- with this element, we will probably have a leverage, which is lower than the 2.5. But also, I believe that we have the duty to invest in this company. We have a great return on capital employed. I think we have the opportunity to make good investment as well in Securitas going forward. But to give a specific timing, I think it's a bit difficult, but we will definitely return to shareholders if excess cash will happen.

And then on the data center business, I'm looking at you, Brian. I think we are approaching double-digit percentage of the total sales in the business in the data center space. And so it's a significant part, but it also shows the diversification that we have across the entire business. So it's not a dominant part in any way. But I'm glad that we were also very focused and targeted in terms of really doubling down that space because there, we are -- it's a great example that Brian have shown where we have also been able to grow together with the clients and very well positioned for the next phase.

Yes. Yes, right here and second row.

Geoffroy Michalet from ODDO BHF. From your conversation, we have the feeling that most of the growth is coming from one pool of clients, which are the blue chip clients. But could you give us a sense on how much do you think it will contribute in the future and how much the smaller, let's say, midsized clients will contribute to the growth and margin as well?

I will then give the opportunity, I think, to Henrik, Jorge and Tony to just give a flavor because I think this is a very relevant question as well. So maybe just some perspectives on your side.

So I think you're right. In the last couple of years, the global clients have been growing very, very well, while we, at the same time in Europe, as you know, have done active portfolio management. Now we're coming to a different phase. So while I believe that, of course, Global Clients will continue to grow as presented by Brian, also we will come into a space now where we can also go back to profitable growth to make sure that you exit that program and focus more on the delivery, especially with what Matt will deliver together with Tony and team and technology, we are in a different position now to go to the market. So I'm convinced that also those parts will grow healthy in our business.

Yes. In North America services side, we are really focused and take advantage and harness the good practice that we have in global clients to look across the markets. And we are changing the commercial organization now to really looking for synergies, sharing best practices and how to go to market in a more efficient way. So we are really using different enablers, digital marketing, so using external data to really reach the market because we strongly believe that our growth needs to be coming from other parts of the marketplace, not only focus on the blue clients. But when we talk about data centers, I think it's important to highlight, we are growing with our clients, not only on the data center segment. So the hyperscalers, they have corporate, they have other contracts, we are growing together. So this is really a partnership, a journey with our clients. But yes, the focus is really take advantage of the good practices, what we are doing great in this focus on global clients and drive that to the local and regional clients, national clients with a huge potential also.

And from a technology standpoint, maybe a little bit different. We established our global client program in the technology business in 2022 when we announced the STANLEY acquisition. So you may remember that. And it has been growing very successfully, as Brian mentioned, in partnering with the services at a Global Client program. So it has had good growth. But we also have a large part of our segments across the globe that are in local businesses, commercial businesses, also in regional or national kind of clients that maybe aren't global in nature, but have multisite. So across multiple verticals, multiple industries. So that diversification has been important for us. And so we're looking at driving growth across all those different sales channels.

And I think that's the beauty of the business as well. So I mean, if you look at the installations business that we had questions on before as well, I mean we're designing and integrating solutions for some of the most iconic buildings in the world. But then at the same time, Tony would also remind me that if you look at an average job that we have, that could be in the tens of thousands of dollars and not in the millions of dollars. And this is really where the strength of the business model is coming in because it's not only that we are very good at the highly sophisticated. We have built coverage, we have built density to also then be able to do this.

And this is obviously one of the most important themes that the 4 of us are discussing also together with Ibero-America and AMEA as well is how do we then also leverage these capabilities now to also then introduce more technology to a significant client base that we have. Because if I look at Jorge and Henrik, they have really healthy business in the SME segment and in the midsized segment. And those are obviously 2 segments we don't talk about that much today, but very important parts of our business and where we also have good opportunity to drive solutions or installations work, but where we then also have a recurring revenue through the maintenance work that we're doing over time.

I hope that gives a flavor to the question.

Yes. Simon, again there.

So you talked a bit about bolt-ons in the technology segment in your M&A targets. Can you elaborate a bit on what kind of specific companies would that be? Would it be installation companies, integrators, hardware companies that own products? Or what kind of bolt-on opportunities do you see?

Tony?

Yes. So obviously, as we mentioned previously, the industry is highly fragmented. And so there's -- it's a great opportunity for bolt-on acquisitions. The bolt-on acquisitions, I think, Matteo, you actually mentioned it, we look for obviously having a recurring revenue element within the business and not just an installation, not just an integration business. So one that has a healthy mix of revenue and that could be accretive to the profit profile that we have for the business. So that could be in different geographies where we're trying to actually build scale or density even further than what we have in a particular market. So -- or it could be open new white space somewhere where today, we may not have a physical presence.

Anything else you'd add, Magnus?

I think it's just the scalability because we're -- I mean, what Tony and I were discussing a lot 4 years ago when we bought STANLEY is that it's so important that we integrate. We do deep integration. We build common platforms, common ways of working around the world because when we have done that, it becomes a lot easier and also more predictable when we acquire something. And I think that is why the bolt-on acquisitions will be really attractive for us in the next phase because we've done a lot of the heavy work now. And -- but we obviously also STANLEY acquisition was a real catalyst to build really critical mass and scale and now obviously looking forward to them just continuing to strengthen that capability.

Allen Wells in the middle there from Jefferies.

Allen Wells from Jefferies. I just wanted a quick follow-up on the organic growth targets. Obviously, the business has been focused on margin recovery in recent years, and you've seen directionally some slowing in growth in the last couple of quarters as well. But when you think about that 4% to 6% organic growth target, do you need to invest in the commercial functions in the business to get to the top end of that target? Are there parts of the business that just needs a bit more investment to push to the top end? And then within that 4% to 6% target, how do you think about the price volume mix within that versus what we've seen in the last couple of years? And then finally, could you provide a little bit of color around the pipeline of opportunities? Has there been a structural shift in the scale interest within those -- the projects that are coming in that gives you the confidence that 6% is now attainable when it wasn't? Or is it more just the attrition levels as you reduce the kind of portfolio rationalization drop away that, that can drive acceleration?

I'll try to ensure -- remind us if we don't address all the questions here. But yes, I think stepping up our commercial focus is probably going to be a combination of the focus that we are driving because to drive the amount of change that we have been doing has been consuming quite a lot of effort also internally. So I think now being able to shift more focus on real client engagement and developing the business -- that has been an important theme, I would say, among these leaders over the last 12 months. And that's always something that we always build long term and kind of gradual. But we probably also have an opportunity. We had one Board member for many years who said, when you're thinking about the business, do you have a sales kind of focus or a product focus. And I feel that when I look at the product and the value proposition we have, starting to become so strong now. So we're also just keen to be able to get that message more out there as well. And I think there enhancing the commercial effort is going to be important.

If you're looking at the growth, I would say, on this one, I mean, we are expecting a few percent in terms of price or wage-related increases. No doubt also going forward, we also see that we are through that kind of hyperinflation period that we had after COVID, but that we're then also growing real portfolio. So real volume or what we call net change is also positive. I think that has to be -- it is a really, really important part for us going forward.

Any other flavors on that from your side?

Yes. I think, yes, you have mentioned the price increases and the new capabilities and the focus on sales. But yes, we have been talking about these new tools that we can use and enable us to grow. But I think it's important to highlight our consistent on delivery. We have been a lot of investments global -- we have a global framework. So we have been working on direction and alignment. If we deliver -- and Brian, you have covered very well on that point. If we deliver superior quality, we'll retain better our clients. So with price increases, more sales and retain our clients, I think the 4%, 6% growth, we don't need to do investments to naturally and organically achieve that.

Very important point. If we don't see client retention gradually improving, then we are doing something wrong ourselves because we're going deeper, it's more complex engagement and significantly higher stickiness as well. So I mean I think that -- yes, that is an important point, Jorge, where obviously, with active portfolio management, et cetera, it's -- we have been hurting, but we are now switching back to kind of business as usual.

And I think the last question was on the pipeline, I think as well. And on the pipeline, we see a strong pipeline, and we've had a strong pipeline. It has been that we have actively said advise clients who were not prepared to be on the journey with us. But we continue to have that pipeline. And it is, as Magnus said, there's been some internal focus to make sure that we can either elevate the value or exit those contracts. And now since we are coming to the end of that, we can have the full focus to building that pipeline. But the pipeline has been quite strong at the all-time.

Okay. Just up here, right.

Short one on working capital. Given the higher weight of large clients, also you're placing a lot of emphasis on recurring revenue. Are you anticipating any change, any improvement in the working capital is going to remain roughly similar to what has been for the past 2, 3 years?

I think we will continue to work on improvement on our working capital for sure. We have still opportunity to improve our DSO overall. But I think we will maintain our capital -- our working capital levels similar to what we had, trying to get efficiency over there on time to time. But yes, so the improvement will be there for sure.

[ Victoria Chang ] here in the middle.

So on some of your new technology offerings like digital twin, intelligence software, AI models, et cetera, like that, I assume a lot of these propositions won't just need an initial investment. It's ongoing technology costs that you might pay some external vendors for, et cetera, et cetera. So given that, do you see the mix of your OpEx changing in terms of variable versus fixed costs? Or do you expect inflationary pressure and ongoing technology costs as well in the medium term? And how do you seek to offset that?

Yes. I think that the mix -- I mean, the base is there from a technology point of view. I think after the STANLEY acquisition over the last 3 years, we have created a very good base. So I don't expect the mix from OpEx and CapEx changing that much. And you will see also in our numbers today. We are below the 3% CapEx overall. When we look at technology and solution of this part is 15%, 20% of our CapEx. A big part is still related to IFRS 16 and then all the other things related to the CapEx we have in our company. So I feel that we'll relatively stay within that level. Although as I said also before, the cross-sales and upsales opportunity that we have in integrated services will drive our CapEx a bit up, but we will also work on operational efficiency to maintain the CapEx below the 3% of sales.

And I think it's important to emphasize, I mean, we are technology agnostic. And this is fundamentally important for our clients because today, there is no short kind of scarcity in terms of promising technologies or new hardware, new software, new AI, et cetera. The biggest question for the client is more, okay, what makes sense for me? And how can I get help in integrating and operationalizing this. But a lot of that development cost, that's obviously residing with the partners that we are working with. And I think Serdar shared that. And this is a big part of what Tony is doing in the business as well. It's also then who are the technology partners that make the most sense for which types of clients.

So I think from that perspective, we're not standing with the risk or the kind of the investment bets that are being made. But where we are investing in our own intellectual property is more in the digital layer and the data and the information that we are generating in the business because that is tremendously valuable as we are shifting towards an intelligence-led business. But that's obviously investments that we have been making for many, many years and that we will continue to make in the years to come as well.

And by that, we are running out of time. We have 30 seconds left. So it's a really quick question if we're going to have the last one. I think by that, we leave the stage for Magnus and some concluding remarks and the rest of us leave the stage.

So just to wrap this up now, I sincerely hope that this has helped and give you a better understanding of how we see the security market evolving. It's an exciting phase. Like I said at the beginning, I think we are well positioned to benefit but we're also really well positioned to take a leading position in the development of this industry in the years to come. And when you're going a few years back, we have delivered on our transformation. We have delivered on the financial targets. I think we also now have a really good foundation to start focusing on driving growth. And when you think about the business, and we were coming into that also in the Q&A session now, we also have tremendous strength in the resilience of the business and the diversity of the business. So we are no longer depending on just one particular service line, not on one geography and also not on one vertical segment. And I think that is important because we have multiple ways that we can then start to grow with our clients.

And I think we've also shared that today that the clients are also increasingly saying this is more complicated. We need a more capable partner who can really help us be the trusted partner on this future journey towards intelligence-led security. And the markets, they are large, but they're also expanding. And I think that's something that we feel really good about since we have 100% focus on high-quality security and safety. So we have proven that we can transform. We have really significant runway for driving growth and driving that growth as the leader in intelligence-led security.

So I think from this position, the next phase is a lot more exciting than the last phase because we continue to build a more competitive business. I also got the question a couple of times during the break today in terms of the barriers to entry. I think they are clearly increasing because this is becoming more complex and the combination of the different capabilities is becoming critical for the next phase. And then obviously, with high barriers to entry and then also a more resilient business, we're also in a really good position to create better shareholder value.

So from our side, we're going to be around for everyone who's in the room for the next hour. But I just want to say thank you for joining us today and for being part of the journey. Thank you.

Good morning, everyone, and a warm welcome to our Q1 2026 report. Before we begin, I would like to welcome Matteo, who joined the group as CFO on April 1. And Matteo has an impressive track record from a number of leadership roles in finance, but also leading significant businesses. And for many years, you spent time with Atlas Copco and more recently with Assa Abloy. So a great addition to the team and a warm welcome, Matteo.

With that, let's go to the performance highlights of the quarter. And on a high level, we delivered good operating margin improvement, earnings growth and cash flow in Q1, but the top line growth was below my expectations. The adjusted operating margin improved to 7%, and this was supported by all business segments. And this is testament to focused execution, and we have now improved the operating margin 21 quarters in a row.

The adjusted growth in the quarter was 2% for the group. And the growth in North America was flat year-on-year, and this was primarily the result of significantly lower installation sales in the Technology business. But importantly, commercial activity in Technology in North America remained healthy with strong growth in installation order intake and backlog.

Looking at the earnings growth. The margin development was an important driver behind the 8% improvement in operating results and a 16% improvement in earnings per share on a constant currency basis and also then excluding IAC. Q1 cash flow was healthy for Q1 at 40%, and Matteo will share some more details about this in the finance sections.

And our work to sharpen our focus and portfolio continues, and we divested the Global Elite Group in the U.S. and also a smaller part of our Technology business in Canada in the quarter. And this means that we are now nearing the completion of the strategic assessment program we initiated a few years ago.

And the acquisition of Liferaft, which is a leading provider of threat intelligence, was completed in Q1, and we are very glad to welcome the Liferaft into the Securitas Group and the intelligence capabilities that they bring are very important for the future.

Let's then move to the performance in the business lines and the segments. And we delivered good margin improvement in both business lines with 10.7% for technology and solutions and 5.4% for services. The sales growth in technology and solutions was 4% in the quarter. Portfolio growth in solutions and RMR contributed. But as previously communicated, installations in North America had a clear negative impact.

The adjusted growth in security services was 2% in the quarter, and growth was good in Ibero-America, decent in Europe but a slightly slower start than expected in North America.

With that, we move to the segments, and we start with North America as usual. And here, we recorded good margin improvement, but as commented, flat top line growth in the quarter. And the flat growth was primarily due to technology installations.

Three winter storms in the first quarter had a negative impact on the installations with a number of days, with traveling and on-site work was not possible, and this also caused some productivity issues. What's most important, though, as I mentioned before, is that commercial activity was good, strong positive year-on-year development in order entity and also very healthy increase of the backlog.

The Pinkerton business is a smaller business. But here, we recorded negative growth due to the loss of a large temporary contract. And this also had a clear negative impact on the growth in the North America segment. But all in all, when you look at the growth in North America, I expect the growth to recover in the second quarter.

Due to the negative installations development, sales growth in technology and solutions was negative 1%. But when looking at profitability, we note strong resilience in the business with 30 basis points improvement in the margin to 9% in the quarter.

And we then moved to Europe, where we had a solid improvement in profitability. The organic growth was 3%. And here, the growth was supported by price increases, including impact from Turkey and good growth of technology and solutions while active portfolio management in the services business had a negative impact. And we also had lower-than-expected sales and aviation in Q1, and this was related to the situation in the Middle East and reduced number of flights.

Real sales growth in technology and solutions was good at 6%. We recorded a solid 40 basis point margin improvement in the European business for an overall margin of 6.1. And the margin improvement was driven by both business lines, including positive impact from the business optimization program that we concluded last year. Security services margin was positively impacted by the portfolio management. And as previously communicated, we expect to finalize this work in Europe in the second quarter.

We also recorded a good improvement in the operating model in the Technology and solutions business line, driven by good portfolio development and cost control. So all in all, a good development by our European team.

We then shift to Ibero-America. And here, we had strong development across all key metrics. The growth was 6%, and this was driven by strong growth in technology and solutions and price increases in security services. There is a negative impact on the growth from active portfolio management, but our team are driving good conversions to technology and solutions. And the real sales growth in Technology and solutions was very strong at 12%.

The operating margin improved 30 basis points in the quarter to 7.4, and the improvement is driven by positive revenue and margin shift towards technology and solutions. So to conclude, a very strong start to the year by our Ibero-America team.

So to summarize the business performance, we're driving disciplined execution of our strategy. And while the top line growth was lower than our plans in North America, we have continued margin improvement across all segments. And when you look at the client retention, it's stable or improving across all segments.

So with that, turn to the finance update and handing over to you, Matteo.

Thank you, Magnus, and good morning all. We start with the income statement where we had organic sales growth of 0% and improved the operating margin with 40 basis points to 6.8%. It is a good quarter in terms of margin, where we improved our operating income with 8% adjusted for currency.

As you might remember, since Q2 last year, we have introduced 2 new KPIs which are adjusting our organic growth and our operating margin for the government business to be closed down within SCIS. In the quarter, the adjusted organic growth was positive 2% and the adjusted operating margin was 7%, which is 30 basis points better than last year.

Looking below the operating result, there are no material development in amortization of acquisition-related intangibles, and we have reported SEK 30 million acquisition-related costs, mainly due to successful closure of Liferaft acquisition, item affected comparability ended with an income of SEK 184 million, SEK 213 million income related to the divestment primarily to Global Elite Group, part of the U.S. airport security business and SEK 29 million cost related to the ongoing European transformation program.

The European transformation program will continue throughout 2026, as was previously communicated, and we estimate to have a full year 2026 program cost between SEK 225 million and SEK 250 million.

Our finance net came in at SEK 357 million, a reduction of SEK 140 million compared to last year. We continued the positive trend of reduced financing costs and interest rate, and our debt level are decreasing. Full year 2026, we estimate the finance net continue to reduce and then below SEK 1.6 billion compared to the SEK 1.8 billion for the full year 2025.

Now moving on to tax, in the quarter, we had a tax rate of 24.1%. The tax rate before tax item affecting comparability was 26.8%. The tax rate, excluding the capital gain related to the divestment of Global Elite Group was 27.5%, which is the level we are expecting for the full year 2026.

Looking at our EPS, real change growth was strong at 34% in the quarter. When excluding the positive effect from [ IAC ] the EPS real change, growth was 16% and supported by a solid 8% real change in our operating results and by a strong leverage from the reduced finance net.

Now in the next slide, we also see that the quarterly result reflects FX headwinds, which were largely driven by USD movement. Now if we move to the cash flow, where our operating cash flow was at SEK 978 million or 40% of operating income, the cash flow was positively impacted by USD 41 million due to the payroll timing in our Guarding business in North America and by Paragon, including the net working capital release related to the close down.

The free cash flow ended at SEK 178 million, supported by a strong Q1 operating cash flow and reduced financial income and expenses from the improved debt provision position. We continue to see an improved operating cash flow, and we remain focused on strong cash generation to meet our full target of 70% to 80% of operating income.

Now we look at the net debt, which was SEK 32.2 billion at the end of the quarter. This is an increase of SEK 941 million compared to Q4 last year. primarily related to acquisition and divestiture of SEK [ 120 ] million, which includes the net effect of the divestment of the aviation business in the U.S. a small noncore part of our Technology business in Canada and the acquisition of Liferaft. Negative translation difference of SEK 635 million due to the weakened Swedish krona and payment of item affecting comparability according to our plan.

Looking at the right-hand side, our net debt-to-EBITDA reduced to 2.2x, which is an improvement of 0.3x compared to quarter 1 last year. We are all well below our target net debt-to-EBITDA of less than 3x and expect to continue to leverage our balance sheet in the short term.

Now moving on to have a look at the financing and financial position. where we continue to have a strong balance sheet, strong liquidity and we remain without any financial covenants in our debt facilities. Going forward and looking at the maturity chart, we have very limited refinancing needed throughout 2026 and our focus will be to continue to amortize debt, supported by the strong free cash flow generation.

I will also be glad to present and give you a lot more details about the capital allocation during the next Capital Markets Day in June. And finally, we remain committed to our investment grade rating.

And with that, I now hand it over back to you, Magnus.

Very, very good and many thanks, Matteo. So before we open up to Q&A, I'd like just to share a few points regarding our strategic direction and how we shape the company in creating value in the future because with the transformation of Securitas, we have clearly differentiated client offering now and are well positioned for profitable growth. We're operating in attractive and growing markets, and we partner with our clients for the long term.

And we see that our deeper engagement model, where we leverage technology digital capabilities in combination with our presence is generating higher value for our clients and also for us. And this approach is working. We're executing on our plans. And as I mentioned before, 21 consecutive quarters of operating margin improvement and operating cash flow consistently above 80% in the last few years.

And we've had a clear focus on enhancing the quality of our business. And with the business now in much better shape, we can shift the emphasis towards enhancing the val proposition and driving commercial synergies, and this would have a positive impact on the growth. And as stated many times, we do this work with a clear focus on building a more scalable business.

But coming back then at the high level on the performance in the quarter, we continue to execute on our strategy, delivering solid margin and EPS improvement. And I think also the two main highlights of this quarter. And we're very well positioned to do this industry with the best value proposition for our clients also in the coming phase.

And on that note, as Matteo mentioned, we are very excited to share a lot more about the longer-term opportunities and looking forward to seeing you at our Capital Markets Day in London on June 16.

So with that, let's open up the Q&A session.

[Operator Instructions] The next question comes from Suhasini Varanasi from Goldman Sachs.

Just a couple for me, please. Can you discuss the growth trends in March after the Middle East conflict started? It looks like Europe, in particular, got impacted a little bit. And how big is the Middle East in Europe? That's the first one.

The second one is on the North America business. Negative growth in Technology was a little bit surprising, plus a slow start to Guarding. You've indicated that the commercial momentum is still strong. Is the expectation that this Technology business can come back to mid-single-digit growth in the coming quarters? Did momentum actually improve at the end of the quarter or in April, for example? If you can share that color would be great.

Thank you, Suhasini. On the growth trends in March and in Europe, when you look at the Middle East, we haven't called that out specifically in the report because it was -- from a growth perspective, we saw lower aviation activity in the month of March, and that had a negative impact on total volume. But as stated, it's aviation, which is a relatively small part of the total business and also only one month.

We have a good presence in the Middle East, but the business that we have that is then included in the EMEA region, which we are reporting under the Other category. But if you look at the business on the ground, no major disturbance, I would say, despite the difficult situation that the region is going through. So there we have handled well. And obviously, security is very high on the agenda.

When you're looking at the growth or at the negative development in installations in Q1 in North America, that was clearly a negative surprise and also below our expectations. And just to give some more flavor to that as well, there were 3 winter storms that had quite a significant impact.

I have not mentioned any winter storms in the past as a CEO of the company. But here, we had 3. And what happens then is that traveling to and from client site was not possible. That also then meant that we were not able to complete a lot of the work. And that also had some productivity impact as well after those kind of closed down. So that was the main driver here.

But to your question, when you're looking at the order intake because obviously, in this type of a situation, very close attention on the order intake, and that is strongly up compared to last year.

When I look at the back order, also clearly up. So looking at the commercial activity, my expectation is that we will recover in the second quarter. And that's also the reason I spell that out in the report as well because even though we had some logistical challenges in the first quarter. Most important is what does the order intake look like and also the back order because that's obviously the leading indicator.

So -- but we don't give more guidance than that. But I think my comments are reflecting the genuine view in terms of how looking at the recovery.

Yes. And the last point was also related to Guarding in North America. That was slightly softer than what we had expected. We had a couple of terminations in the fourth quarter that had an impact. But there, again, commercial activity, very healthy. client retention also improving. I mean there, we are through with all the active portfolio management work, et cetera.

So yes, those are really the main points. And so all in all, looking at North America as a segment, these factors combined then lead to my conclusion and view that we will recover in the second quarter.

That's very clear. And interesting that you mentioned weather in North America because I think we've had another company also mentioned something similar. So it looks like something extraordinary happened over there this quarter.

The next question comes from Simon Jönsson from ABG Sundal Collier.

Some of them were already answered about the T&S growth. But maybe you can expand a little bit on the order intake and backlog that you highlighted were strong and how that translates to the growth rate you have seen in recent quarters for T&S. Does it imply continued growth or an acceleration, do you think?

Yes. Thank you, Simon. So when you look at the solutions part of T&S that's portfolio business. I mean there's generally more stability. In the Technology, we break that down into two main parts. One is what we call recurring revenue and the other part is then the installations related projects.

And with the installations, I mean there, we essentially design and install integrated technology for the client, but then obviously always with the intention of then also serving the clients with more recurring services after that. That is when you look at the nature of that business, that is more volatile. And that's something that I've also called out in the last couple of years and also when we did the Stanley acquisition that installation business, I mean given the nature of the business, it isn't portfolio.

So that is obviously something that there could be swings. We also saw that in 2025 when we had stronger -- I mean, very strong finish to the year, for example, but now then a significantly weaker Q1. But main factor, like I said, is related to this weather situation. So -- and when that happens, everything is a fairly fine-tuned operation. And if we then have operational disturbances, that would also create productivity issues in the subsequent days and weeks.

On the order entry, this is something that we are tracking every day. And when I look at that, it is really positive development in Q1 compared to the same period last year, back order, like I said, and that's obviously what is remaining in terms of firm orders with work to be done. That also had a very positive development.

So these are the two main kind of leading indicators. And obviously, when you have this type of a situation where you have a negative surprise like this, we're scrutinizing a lot and also then very closely in contact with the clients and with our teams. And Matteo and I have also reviewed with all key leaders in North America in the Technology business just a couple of weeks ago. And like I said, looking at Q1, very good activity and good numbers coming in. So that is giving me confidence that we're in a good position to turn that business around.

I hope that gives a little bit more flavor, Simon, but I think that's as much as we can comment essentially on the installation part of the Tech business.

Yes, I understand. Thanks for good color. Then I just wanted to go to the cash flow a bit here and a few detailed questions. On the M&A spending, first of all, here in this quarter, was that mainly Liferaft acquisition or other parts involved in that figure as well?

Simon, yes, I think for the cash flow regarding the acquisition part was mainly the Liferaft. And then, of course, we had also the divestment of GEG, the aviation business in the U.S. These are the two main divestment -- the divestment and the acquisition related to the cash flow.

All right. Do you have anything to comment on like multiples for Liferaft? Is it something you -- is it the level you think you will continue to be at for further acquisitions in that segment?

Yes. So the idea here, I mean, we believe that we have paid what is a fair market value, should be stated to that type of a company has a completely different type of valuation compared to Securitas. What is important with Liferaft is that we have very strong operational capabilities with our Technology business, with the services business.

But when you look at the next phase, and this is something we will talk a lot more about this at the Capital Markets Day in June is that we also then look at how can we help our clients be more on top in terms of dynamic management on the risks and the threats that they are facing in their business. And here, Liferaft have built a really unique competence within the open-source intelligence space.

So essentially, what we are doing here is that we're buying a small company by Securitas standards, but the intention is that we are able to leverage and to scale that unique competence across our large client base.

But yes, your base or your key question, I think it's kind of market valuation for that type of a business, but we obviously expect that we're going to create a really good return on investment over time when we can buy something which is relatively small with unique competence and then scale that across a large portfolio.

All right. Good. Looking forward to hearing more on the CMD. Just a final one on the cash flow here in terms of items affecting comparability. You're guiding for the effect -- the result effect mainly for the transformation program. But what can you say of the expectations for the cash impact here the full year? I think it was SEK [ 170 ] million here in Q1 in total.

Yes, correct. We are about SEK [ 170 ] million. As I said, for the 2026, we will continue with the European transformation program where our cost will be roughly SEK 225 to SEK 250 million.

The next question comes from Andy Grobler from BNP Paribas.

Just three quick ones from me, if I may. Firstly -- first and second on Europe, could you just talk through the impact of Turkey on growth rates and with that, the kind of the underlying volume versus price growth for that division?

Secondly, portfolio management continued to weigh on organic, as you've talked to before. When do you think that process will be complete or at least largely complete?

And then thirdly, just on the cash flow and the IACs. Just picking up on the last question, can you just clarify what the expectation is for group IACs for the full year? Is that SEK 225 million to SEK 250 million the right number to think of pre the positive impact of the divestitures in Q1 for the full year? Or will that be incremental cost as well?

Thanks, Andy. So on Europe, more than half of the growth in Europe related to Turkey. And so I think that is the key point. So looking at active portfolio management, which was your second question, we expect to complete that in the second quarter, and that's in line with what I communicated a year ago. And this is obviously work that we have been doing for a number of years.

After the second quarter, somebody asked, okay, what happens then? Well, then it's more business as usual in terms of normal portfolio optimization. But as you know, and you know us well, a number of years ago, when we started this journey, I mean it was based on the insight that we had significant part of the portfolio that wasn't in good shape.

So we've been constantly working on that, and it will feel really, really good to wrap that up as a project in the second quarter. And that's in Europe, but it's the same also in Ibero-America because then we can start to gradually shift more towards profitable growth after that. So that is really the situation on the active portfolio management in Europe, but also Ibero-America.

Matteo, on the IAC?

Yes, on the IAC cash flow Andy, we aim to finish 2026 with about SEK 1 billion in cash flow, which is very similar to the level of 2025. That's the level we are expecting at the moment.

Okay. Sorry, 1 billion -- in particular, when looking at the IAC -- sorry, just to clarify exactly what you mean by that 1 billion there? Is that...

This is related to the European transformation program, but also we have the Paragon close down, which is impacting the cash flow overall, which is a value of roughly SEK 1 billion in '26 comparable with last year.

The next question comes from Remi Grenu from Morgan Stanley.

Two questions on my side. So the first two are on the North American market. So the first one would be on the addressable market itself. So it seems like the U.S. security employment data has been deteriorating a little bit over the last few months, which is a little bit surprising, given the context. I wouldn't have expected the data come up a bit. So the number of guards seems to be flat or slightly declining.

I just want to understand if there is any rational explanation for that? Do you think that the addressable market in itself is a little bit weaker than what you've seen over the last 2 years?

And on the U.S. market as well, I just want to have your view on the competitive landscape. I know that retention rate has improved in Q1 this year. but it was a little bit weaker from Q3 onwards. So yes, if you're losing contracts, is there any competitive landscape explanation to that?

And then the third question, just on the IAC. I think you're guiding for more than SEK 200 million of cost for the transformation program in Europe, which was -- I mean, my understanding was that these costs were supposed to come down in '25 and '26 again. But feels like it's ramping up again versus last year. So I just want to have more flavor on what is driving that increase in cost associated with the transformation in Europe, as I thought that it would kind of come into an end.

Thank you. So Remi, if you look at the North American market, looking at the economy itself, it's been resilient, I would say, despite a lot of the things that have been going on politically and also geopolitically. So I think that's at a very high level.

We also follow some of these industry data, which is not always great quality. So we usually then, thanks to our own presence in the market and good or proximity to our clients, also try to understand the overall market development. I would say that there is a very large and significant addressable market for us in North America. So there is a lot that we can go after over many, many years to come.

We have been investing, when I look at the second question in terms of the competitive context. First of all, is that we are unique in the sense that we have a leading position in technology, we have a leading position also in Guarding. And I would say that we are the clear quality choice. So when you look at the competitive context, we're unique in that sense. Almost all the competitors are either guarding companies or electronic security systems integration businesses, so what we call technology. So in that sense, we are also quite unique.

And we have built -- when you look at our Guarding business, very much our competitive edge based on proximity to the client. It's been investing a lot also in terms of the quality of the operation, how we've been driving the digitalization. And so I feel really good in terms of our team that we have, our leadership, looking at the operation and also the value proposition and how we continuously also invest in that value proposition.

So I would say that confidence level, we're always humble people, but we're very confident about the value proposition that we bring to our clients in this competitive context. But then we will share a lot more, as stated, also at the Capital Markets Day. So I hope that you're able to then join us for that as well because that's obviously we also will talk more about what it really means to be intelligence-led. We're going to talk a lot more about the combination as well of leading presence, technology and data and digital capabilities.

Yes, Remi, I think when it comes to the [ ISC ], maybe a clarification, if you take 2025, we had 2 programs under the IAC, one was the European transformation program and the other one was the business optimization program. And if you recall in quarter 4, it was mentioned that the business optimization program has been closed. So we are continuing to run the European transformation.

So last year, 2025, we had roughly SEK 380 million in the IAC related to the program. And this year, we are aiming to close between 225 and 250. So quite a nice reduction of between SEK 150 million, SEK 130 million. So this is a better picture as we have today. We aim to continue to reduce the IAC. We will go to zero, I don't think so. But this is -- our aim is to continue to reduce, but it's a nice reduction compared to 2025, for sure.

Thank you. The next question comes from Johan Eliason from Sparebank 1 Markets.

Good morning, Magnus, and welcome, Matteo. some questions from my side. Looking at the technology and solutions, it has been sort of delivering a little bit below the 8% to 10% target you had for this part of the business. And we heard about installation services being volatile and then now recently down.

Can you talk a little bit about how the solutions part has developed? I think historically, at some point in time, you did report on a separate note, and it was at the time growing quite strongly. Is it sort of still a significantly growing part of the technology and solutions part?

Yes. Thank you, Johan. So some context on the 8% to 10% that we communicated in 2022, that was also including acquisitions, just to highlight or to just remind about that. But like you said, when you're looking at the growth of 4% in Q1, yes, that is below my expectation. I think, significantly below our capability. So we have a clear opportunity to improve on that.

When you're looking at the quarter, very strong solutions development in Ibero-America. We had strong development in Europe and also improving in North America. But what we have done here is, just for context, with the Stanley acquisition, we and I prioritize very much that we are successful in terms of really building the technology pillar, that we drive the integration successfully, that we deliver on the cost synergies.

In the next phase, what we call solutions now, it's essentially where we take more comprehensive approach in terms of what is the customer looking for in terms of the outcome and that we then design and propose a combination of different services to optimize the security equation for that client. That will be a very important theme over the next 5 to 10 years.

So if you ask the simple question, well, is there more opportunity in this space? Absolutely the case because the we're seeing more and more evidence of that every day with technology becoming more and more important, digital becoming and intelligence capabilities becoming more important that we also have more of a pull from the clients, and we can also then leverage the value proposition that we have. So that's really the context.

So I would say that it is on the solutions overall, we are definitely on the right path but also then now fine-tuning a little bit how we're working in that space when we're also done with a lot of the cleanup activity that we've had on the Guarding side, but also integration activity on the technology side, now really gearing ourselves up to also drive more of that orchestration related to the client needs.

Excellent. Looking forward to that. Just some details on airport these days. How big share is it of group or maybe Europe or North America after these and the U.S.?

Yes. So if you look at the overall share of sales around 5% coming from aviation. When you're looking at Europe, it's more focused now on a few markets. As you probably remember, Johan, I also said a number of years ago, starting with the pandemic period that all the business that we have has to be quality business, it has to be financially sustainable. And there, we have gone through a large kind of process of active portfolio management. But where I would say the business that we have today, it's a healthy business in Europe.

Looking at North America, there we -- and that you have also seen, we have divested GEG, which it's not screening-related services, but other services at a number of different airports across the U.S. And that was a good decision because we have also been clear about the fact that everything that we do has to be fully aligned with the strategy, but we also need to have critical mass locally in any kind of business that we are engaged with to ensure that we can have real presence in the market and that we can invest in the quality and the development of the value proposition. So I think the divestment there of GEG that's just fully in line with continuing to sharpen our business.

And then maybe last point just to complement that we also have some aviation business across Ibero-America as well. And just a clarification, when I say 5%, 5% was the number before we divested GEG. So yes, not sure then somewhat lower today.

Excellent. And then just finally, I didn't quite hear what Matteo you said on the cash flow impact the [ IAC ]. I think you said the SEK 1 billion, and you mentioned something about Paragon, but I couldn't see...

That correct what you said. Yes, it's correct, Johan. Yes, I mentioned SEK 1 billion is the impact on the cash flow from an IAC perspective, which is the same level as 2025.

[Operator Instructions] The next question comes from Allen Wells from Jefferies.

Just three quick ones from me, please. Just on the airports business, I'm not sure exactly to what extent -- you said it's broadly 5% of the group or a bit less post the divestments. But as you think about what you've seen March into April, obviously, the conflict continues, we've got some risk of aviation fuel shortages.

How do you see that growth in that business developing over 2Q and the rest of the year? And are there any actions you can take to manage or mitigate that? That's my first question, please.

Yes. Thanks, Allen. So when you look at -- I mean when I look at Q1, just to start with some of the facts. Like I said, the Middle East situation had a negative impact on the number of flights and I assume also on the number of passengers traveled, that in turn had a negative impact on our revenue in Europe.

When you're looking at the Middle East situation from a cost perspective, it's not so much hitting our aviation business, but we had some negative impact from rising fuel costs, and that is not isolated to Europe, obviously, because the oil price is global. So there, we saw that there was some impact, but we haven't called that out since it was only during 1 month.

When you look at that, and that's not aviation-related specifically. I mean there, we always look at what do we need to do to ensure that we cover our cost and then pass on the cost to our customers. So that is one that we are watching carefully since we have a number of mobile officers obviously, with a very strong presence in many key markets. but we also have installation and service and maintenance technicians as well around the world and -- who are in constant kind of mobility. So that is one that we are that we are watching. But our general principle is always that we are passing on costs when that is justified.

Then it's a little bit difficult, obviously, because your question about how does it look for the remainder of the year. Well, if I look at the contracts that we have and the business that we have in aviation, like I said before, they are in good shape now. So decent and sustainable profitability that enables us to invest in good quality and also investing in the in the relationship and the value proposition. But it's difficult to -- it depends quite a lot also on how is air travel developing now in the next couple of months.

When you're looking at April through September, October in Europe, that's a very busy period in the aviation space, and that's obviously very much related to the holidays and things like that. But then it does also vary if we have most of our contracts are more kind of fixed price contracts, but we also have some that are priced per passenger. So there is a little bit of dynamic there.

But it's difficult, Allen, to forecast how that will play out. But we're watching it carefully. And when there is a cost impact from the Middle East situation, there, we are working to pass those costs on to our clients.

Okay. That's helpful. And then two other quick ones, please. Just secondly, just on North America. There's a few significant events going on in the region. I'm particularly thinking about the World Cup. Do you have any exposure to potential kind of guarding activity, event-based extra sales growth in North America over the summer that may help that we can politically called out?

And then finally, just on the portfolio management in Europe, obviously coming to an end, I don't know if you can possibly quantify the impact on the active management, i.e., what would the 3% growth would look like in Q1 if you haven't chosen to exit contracts? Just trying to work out like what the base looks like and how we can think about that as it rolls off in Q2 and onwards.

So on North America, we focus our business on our portfolio of clients and the ongoing client relationships. So I'm not so keen on going after one-off type of events because most important is that we are delivering with continuity to our existing client base. So I wouldn't say that there is much of an impact in any way to expect related to the World Cup.

When you look at active portfolio management in Europe, well, I think I've shared that last year. I mean, we have some markets where -- a more significant markets, where we had a very significant impact on the organic sales growth.

And -- so I think without going into too much specifics, depends a little bit quarter-to-quarter and also how much business we are winning, et cetera, to compensate and how much we are converting from regular on-site guarding activities to integrated solutions. But it's definitely been several percent impact when you're looking over an extended period of time, that has been negative from the active portfolio management in Europe.

And that's quite tough because that means that then you have negative fixed cost leverage, but then we've always also been working to dynamically also adjust our organization. And that's also the reason that you've seen that the operating profit margin is continuing up, but it's also improving because we're managing to convert the vast majority of our contracts to healthy and sustainable contracts.

And I think that has been a really important shift that we have been going through not only in Europe, but globally over the last few years in terms of really defending the value and where, like I said, the vast majority of clients are then saying, we definitely want to stay with Securitas. So [ be ] more a question of, okay, what is the kind of the required level and then we have found a solution and then moved forward.

But active portfolio management, like I said before, the project itself is coming to an end and concluding that in Q2. But then, in a large guarding business, there is always a need for ongoing kind of business as usual. But this is something that I think also our teams, they have learned a lot and they are also a lot more able today to also manage carefully down to each individual contract because we are here in the business of delivering good quality and delivering sustainable returns. So this is something also with the modern systems that we are increase in the deployment, we also get much better visibility as well across the business in terms of the health of the business.

So I think that is -- it's been quite painful work over a number of years, but it will serve us well for the mid and the long term. We can, then, focus more on quality and profitable growth.

The next question comes from Viktor Lindeberg from DNB Carnegie..

Left with some keeping questions from my side, starting on Liferaft and -- maybe you can comment a bit here, Magnus, what you expect in terms of profitability and growth in the shorter to medium term, I think it grew by close to 30% organically last year, but it would be helpful to see if that's something you will project also going forward and what kind of profitability this asset is delivering for you when it's now plugged in.

So it's a small business but with very strong growth. We continued strong growth of this business, and that's obviously Liferaft on a stand-alone basis, but also gradually over time, where we can also open up our client base and leverage the great competence that [ life raft ] team has in terms of open-source intelligence. So -- but stand-alone plan projected strong growth in the coming years, and that is important.

But then I also think that when we -- like I mentioned at one of the earlier questions as well, our idea here is that there is very specific competence with Liferaft. We've been working with them over the last 5 years. and we see very strong opportunities in terms of leveraging their intelligence capabilities across our broader client base. And I think that is how we also ensure that we are generating a good return on this investment over time.

But in terms of profitability, essentially breakeven today, but that's also very much based on reinvesting everything in continued growth, which I think is the right approach because this is also an area where we want to build more critical mass and relevance and really strengthen our own value proposition.

But looking at the mid and the long term, there is obviously a very good profitability opportunity in this type of a business. But most important now is that we scale it and that we scale it on a stand-alone basis, but then also leveraging commercial synergies with the Securitas client base.

That's clear. And I have, as usual, looked at your annual report. And the I guess, the recurring question here is on your accounts receivables and the bad debt provisions. And I looked at the bad debt provisions, a share of overall receivables and share of sales. And as you probably know, this has trended down over the past 2 years. So you've sort of shifted the provisioning of bad debt quite a lot lower. And this is coming from invoicing that is overdue more than 90 days.

So I guess there is a good reason for this, but I just want to take that noise out of the room as it's sort of a frequent question coming in now and then. So I guess the absolute provisioning level is also something that is important to bear in mind. But any color you could give on the quite sizable shift you made in the provisioning estimates would be helpful to understand a bit more.

Of course, I mean, as you can see from the annual report, the total provision for bad debt losses, excluding the translation, reduced to SEK 1.5 billion compared to SEK 1.186 billion in 2024. And also the total provision for bad debt losses exceeding the 90 days, it went actually down from 1.5 in 2025 to 1.761.

So I think if you look a bit from a bad debt point of view and the effect on the -- on our P&L, we are pretty much stable where we were in 2024 with 0.1% impact in our profit and loss. So there is no -- although we have changed a bit the percentage on the aging, we see no big impact over there and the impact on the P&L is rather stable at 0.1%.

Yes. That's what I just wanted to confirm. That's good. But would you say that you see any improving recovery rates in the post 90 days of provisioning that has led you to become a bit more optimistic about this provisioning level or it's more about keeping the overall bad debt provisioning in balance?

I think the aim is, of course, to improve our accounts receivable and the aging, but we see stable situation at the moment. As I said, the impact on the P&L is rather stable at 0.1%. So we are going to keep the situation rather stable trying to improve the aging, of course, quarter-on-quarter. But this is the situation where we are today.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Okay. Thanks a lot, everyone, for good questions and engagement today. And as stated earlier, looking forward to seeing you for our Capital Markets Day in June. It's going to be really a good opportunity now. We finished the last phase successfully and then to be able to share also what we have in our plans and the strategy for the next phase. So thanks a lot. Enjoy the rest of the day. Bye-bye.

Good morning, and welcome, everyone. Andreas and I are proud to report strong results for Q4 and for the full year 2025. So let us go straight to some of the performance highlights.

The organic growth in the quarter was 3%, and this was supported by 6% growth in Technology & Solutions. We had a good finish to the year in Technology & Solutions with 2% improvement sequentially. And the adjusted organic growth of the group -- and that means when you exclude the closedown of the SCIS business was 4%.

And now to something important. The operating margin was 8% and 8.2% adjusted in the quarter, thanks to the strong delivery across the entire business. North America achieved a 10% operating margin in the quarter, and Europe delivered another quarter with more than 8%.

And we have improved the operating margin now 20 quarters in a row and are delivering on the 8% target that we communicated 3.5 years ago. EPS real change, excluding IAC was also strong at 18% and we had continued strong delivery in terms of cash flow with operating cash flow of 88% for the full year and net debt to EBITDA ratio improved further to 2.1.

And based on the stronger underlying performance, the dividend proposal is SEK 5.30, which represents an 18% increase. And looking at the future, we announced a very important milestone for our journey with the acquisition of Liferaft yesterday evening. And this is the leading provider of threat intelligence and I will provide more details regarding the strategic importance of Liferaft at the end of this presentation.

So let's then shift to the performance in the business lines and segments. We delivered strong margin development in both business lines with 12.7% for Technology & Solutions, 6.6% of Services in the quarter. And there is growth, as I stated, in Technology & Solutions for 6%, so 2% improvement compared to the previous quarter. And the growth in Security Services was 1% and this growth is obviously negatively impacted by the SCIS business where we're closing down the government part of that business.

So with that, let's move to the segment, and we are starting, as always, with North America where we're delivering a very strong set of results and a record 10% operating margin in the quarter. And if we start with a growth of 5%, this was driven by good portfolio development and price increases in the Guarding business and by good development in technology. The real sales growth in Technology & Solutions improved to 4% compared to lower growth in the previous quarter.

And when looking at the profitability, strong leverage and cost control in Guarding, together with solid profitability in Technology and a recovery in the Pinkerton business all contributed to the record level operating margin. So all in all, a very strong performance, a record-breaking 10%, so well done by our North America team.

We then move to Europe, where we are also very pleased with the development. The organic growth was 4% in the quarter, and the growth was supported by price increases including impact from the hyperinflation environment in Turkey and also by solid growth of Technology & Solutions, while active portfolio management in the Services business had a negative impact on growth. Sales growth in Technology & Solutions was 7%. But it's the profitability development that stands out with 110 basis points improvement to 8.1%. And the margin improvement was driven by both business lines, including positive impact from the business optimization program.

The Security Services business was positively impacted by higher margin on new sales, active portfolio management and also the divestiture of the Airport Security business in France. We also recorded a solid improvement in the operating margin in the Technology & Solutions business line driven by good portfolio development and solid cost control.

And as commented earlier, we expect the work we're addressing low-margin Guarding contracts to be completed during the first half of 2026. So all in all, solid development by our European team and also here an operating margin at a record level.

Shifting then to be Ibero-America, where we are pleased to report good organic growth and decent margin improvement. The growth was 5%, and this was driven by high single digital growth in Technology & Solutions and prices increases in the Services business. But similar to Europe, there is a negative impact on the growth from active portfolio management, but we're making good progress here and driving good conversions to Technology & Solutions. And the real sales growth in Technology & Solutions was 7% in the quarter. The operating margin improved 20 basis points in the quarter, and the improvement was primarily driven by positive impact from active portfolio management in the Security Services business line.

So to conclude, strong delivery in 2025 by our Ibero-America team. And looking then at the performance across the group, we are driving disciplined execution of our strategy, and I'm really pleased to see strong execution across all segments. And the client retention is solid at 90%. So with that, turn to the finance update and handing over to you, Andreas.

Thank you, Magnus. And first of all, if I sound different to normal, it is because I'm about to lose my voice, I apologize for that. We start with the income statement, where we had organic sales growth of 3% and improved the operating margin with 70 basis points to 8%. It is a strong quarter where we improved our operating income with 15% adjusted for currency. As we communicated in Q2, we have introduced 2 new KPIs, which are adjusting our organic growth and our operating margin for the government business to be closed down within SCIS. In the quarter, the adjusted organic growth was 4% and the adjusted operating margin was 8.2%.

Looking below operating results, there are no material developments in amortization of acquisition-related intangibles nor in the acquisition-related costs. The items affecting comparability was SEK 78 million, and this was related to the ongoing European transformation and business optimization programs. And the full year cost for these programs was SEK 382 million, approximately in line with our previous guidance. We have executed the business optimization program in a good way where the annualized savings in Q4 are in line with the targeted SEK 200 million savings. The business optimization program is now closed. And in 2026, the only remaining program is related to the European transformation. And here, we estimate to have a full year 2026 program cost of SEK 225 million to SEK 250 million, a material reduction compared to the SEK 382 million related to the programs in 2025.

In Q3, we took a SEK 1.5 billion cost in items affecting comparability related to the close-down of the government business within SCIS. The close-down is progressing according to plan and had limited impact on our operating result in Q4. We continue to expect the vast majority of the business to be closed down by the end of 2026, and we will also start to see an accelerated execution of the close-down during the first half year. Our finance net came in at SEK 383 million, a reduction of SEK 146 million compared to last year.

And here, we continue to see a positive trend of reduced financing costs as interest rates and our debt levels are going down. For the full year 2026, we estimate the finance net to continue to reduce and land around SEK 1.6 billion to be compared to the SEK 1.8 billion for the full year 2025. Moving to tax. Here, we had a tax rate of 29.5% for the full year, slightly higher than our Q3 forecast of 29.2%. The full year tax rate was impacted by the SCIS close-down cost in Q3, where we estimate around half of the cost to be tax deductible over time. Adjusted for the close-down impact, the full year tax rate was 27.2%, and we expect the 2026 tax rate to be in the approximately same area.

All in all, we have a strong quarter where we grow our FX adjusted EPS with 18%. And as we summarize 2025, we have improved our adjusted operating margin with 60 basis points to 7.7%, grown our operating result with 11% and grown our EPS with 18%. And at the same time, we also achieved our financial target of an operating margin of 8% in the second half year of 2025. The adjusted operating margin in the second half was 8.2%.

We then move to cash flow, where our operating cash flow was solid at SEK 3.9 billion or 128% of operating income. The cash flow was supported by lower growth rates and the continued improved DSO, but also negatively impacted by the additional USD 44 million payroll in our U.S. Guarding business as we communicated in the third quarter. This negative impact is a timing impact only, which occurs every fifth to sixth year. The free cash flow landed at SEK 3 billion, supported then by the solid operating cash flow, reduced interest payments due to the lower interest rates and debt levels and positive tax timing impacts.

Looking at the full year 2025, we delivered another year of record cash flow. The operating cash flow was more than SEK 10 billion or 88% of the result, supported by good working capital focus and lower growth rates. And we have now delivered operating cash flows above our financial targets of 70% to 80% over the last 2 years, a result of our strong focus to build a more qualitative business and also structurally improve our working capital over time. And this has, of course, also translated into stronger free cash flows, which creates increased flexibility and opportunity for us as we move into a new phase of our strategic journey. Our cash generation will also be positively impacted as our items affecting comparability continues to reduce as we go into 2026 and beyond.

We then have a look at our net debt, which was SEK 31.3 billion at the end of the quarter. This is a reduction of SEK 2.1 billion compared to Q3, mainly supported by the strong free cash flow, but also by the strength in Swedish krona. In the quarter, we paid the second tranche of our dividend, and we had SEK 321 million of total IAC payments, whereof approximately SEK 160 million was related to the final payment for the U.S. government and Paragon settlement. We have now made all 3 payments related to this settlement and expect no further cash flow out related to the case.

Looking at the right-hand side, our net debt to EBITDA reduced to 2.1. This is an 0.4x improvement compared to Q4 last year, where positive EBITDA development, good cash generation and the strength in Swedish krona have supported positively and we are well below our target net debt-to-EBITDA of less than 3x.

Moving on to have a look at our financing and financial position, where we continue to have a strong balance sheet, remain with strong liquidity, and we have no financial covenants in our debt facilities. After a period of important refinancing focus, our main focus during the second half of 2025 has been to amortize debt, supported by the strong free cash flow generation. In the quarter, we repaid SEK 1.9 billion of debt and throughout 2025, we have amortized a total of SEK 3.3 billion. This continues to support our cost of financing going forward. And looking at the maturity chart, we have very limited refinancing needs throughout 2026. And as always, we remain committed to our investment-grade rating.

So with that, I hand over back to you, Magnus.

Many thanks, Andreas. So I'd like to share a few perspectives regarding our strategic development and the Liferaft acquisition before we open up the Q&A. First, we are proud of the fact that we are reaching our 8% target in the second half of 2025. Back in 2022, when we did the Stanley acquisition, we accelerated the work to change the profile of Securitas security company with the strongest technology and digital offering to our clients in combination with high-quality guarding services.

And when looking back at last 4 years, we have been executing well. We are a sharper, more focused company today and operating at a different margin level. And as we're entering 2026, this also means that we can then start to retire this bridge that we have kept coming back to every quarter and over the last 3.5 years.

Looking at the future, we're very excited about the acquisition of Liferaft. So when I look at the transformation of Securitas during the last 6, 7 years, we have kept a clear focus on investing in the core capabilities that we consider critical to winning in this industry and those are focused on presence, technology and data. In this context, we strengthened our guarding value proposition. We have improved the profitability of guarding. We've built a globally leading technology position and a more modern and digitally capable business.

So we have strong pillars in our business today. But we've also worked to meet the increasing client demans for better understanding the risks and the threats facing their business. And over the past 5 years, we have developed in-house risk intelligence capabilities that we are providing to more and more customers. So all this is good, you might say, but what is then the importance of the Liferaft acquisition?

Well, Liferaft is one of the leading SaaS-based threat intelligence providers focused on OSINT and that's open source intelligence. This is a very strong team with deep expertise in threat intelligence and they have been a partner and provider to Securitas for many years. And with Liferaft, we will be able to scale and leverage their capabilities across our client base and in the process strengthen our clients value proposition.

When looking at the financials, the company is currently prioritizing rapid expansion and growing organically around 30% on an annual basis, but also then reinvesting very strong gross margins to accelerate organic growth. And given the increase in demand in this market, I fully support this approach.

The acquisition is fully in line with our strategy to create a more scalable business model and becomes an important addition to accelerate growth in high-margin recurring monthly revenue. And as previously stated, the recurring monthly revenue for the group exceeds more than SEK 1 billion.

So we are thrilled to welcome the Liferaft team when we are closing the transaction, joining forces to shape the future with more intelligence-led security. And the future is promising. With the transformation of Securitas, we're well positioned with a clearly differentiated client offering, well positioned for profitable growth. And we are operating in an attractive market, but also a growing market where we see steady increase in the demand for quality security.

We have transformed and repositioned our client portfolio with a clear focus on segments with more sophisticated security needs and higher growth profile. And we partner with our clients for the long term and we see that our deeper engagement model, where we leverage our technology and digital capabilities, is generating high value for our clients and also for us. And the approach is working. So like Andreas and I have commented, we're executing well on our plans, 20 consecutive quarters of operating margin improvement and solid cash flow generation.

We've had a clear focus on enhancing the quality of our business and margin improvement in recent years. But as more and more units reach the required profitability thresholds -- so from my perspective, that means for a good sustainable business, they also gained the right to shift focus to profitable growth.

And with the business now in much better shape, we can shift emphasis towards commercial synergies and driving growth. And as stated many times, we do this with a clear focus on building a more scalable business. So we are confident and excited about our longer-term opportunities and we're looking forward to sharing more in the Capital Markets Day in June.

So in conclusion, we are on the right path, well positioned for the next phase. So with that, we conclude the Q4 presentation and happy to open up the Q&A.

[Operator Instructions] The next question comes from Francesco Nardinocchi from Goldman Sachs.

This is Suhasini from Goldman Sachs, actually. I just had a couple of questions please. So the -- if we think about your growth and margin expectations for the first half versus second half of this year, would it be fair to say that because of the impact of your underperforming contract exits that's going to be completed by first half this year, maybe the growth is a little more weighted to second half and similarly on margins. And I'm not sure I read but how much are you expecting to pay for the acquisition of Liferaft? And how is your M&A pipeline looking at this point in time?

Yes. Thank you. So when you're looking at that, I think it's the right assumption that finalizing that work will have a negative impact in the near term from the active portfolio management. But that's why it's also so important and so positive that we are soon done with that work. And as I commented in the last couple of years, we were more quick in North America in terms of finalizing that work. So I think that is obviously something that we're looking forward to also in Europe.

Then when you look at the growth in Q4, we had 6% growth in Technology & Solutions, and that's a clear improvement compared to the previous quarters. We have a strong offering. Solutions is more of a portfolio business. Technology part, there's also some variability with installations, but we see that we are on a good path. So I think that is the other part that I would just highlight because that part of the business, there is no impact from active portfolio management.

We have not disclosed the purchase price related to Liferaft simply due to commercial reasons that we're not doing that. But we have paid a fair market price for this type of business overall. So -- and there will be some details coming as we have closed the transaction as well.

On the M&A pipeline side, as we have said, we are ramping up our focus on continued bolt-on acquisitions within Technology & Solutions and some targeted also acquisitions in the intelligence area. We made a few minor ones outside Liferaft, but we are still in ramp-up mode, I would say. So the pipeline is not -- there's not a huge pipeline at this point in time, but it's something that we are working towards improving.

The next question comes Remi Grenu from Morgan Stanley.

First, a quick question on the 2026 outlook. I guess, given you have achieved the 8% and the CMD is not before June, we are left a little bit in dark in term of margin development. So just trying to have your overview on 2026 margin development if we exclude any -- excluding the positive impact that the closure of SCIS is going to generate. But on an underlying basis with the portfolio of the company, do you believe that there is still potential for margin improvement from the current run rate at the end of 2025. So that would be the first question.

The second one is on North America. The organic growth very suddenly accelerated in Q2 and it's been normalizing a little bit over the last 2 quarters. Just trying to understand the drivers of that sudden acceleration and what's happening since then? Why it is coming back down? Is it about like volume normalizing, lower pricing and also taking a step back on that market, what do you think is the structural level of organic growth in North America?

And then the last one, you have come to the end of that strategic plan in 2025. Have you started to have a think about the new KPIs for management remuneration, variable remuneration and going into the next phase of the company, what do you think would be most relevant in terms of aligning the interest of shareholders with management?

Very good. Thank you, Remi. So we don't provide guidance. But first of all, I think it's been really important for all of us internally and also externally that we are delivering on the 8% because it represents a very significant shift. When you're looking at 2026, driving good growth in Technology & Solutions will have a positive impact on margin. I could also expect some positive impact from active portfolio management work that we still have some of that work yet to be done.

Business optimization program, we've commented as well. We successfully completed that in 2025, should also help and support. So generally speaking, I mean, we are -- and I spelled that out, I think back in 2022 is that 8% is important to achieve. We believe that now we have a really good opportunity to also be related to your third question, calibrate more precisely as well how we maximize the value creation because we've had very hard focus on improving the quality and the margin.

But it's quite obvious to us as well that we get done with some of the structural work and the heavy lifting and cleaning. We're largely done with that now and that also means that we can then also start to shift focus on more profitable growth going forward. And I think that is something that we -- that is clearly on our minds. And it's also clearly something that we're also reflecting also in how we're calibrating some of the incentive programs as well so that we really gear those towards maximizing value for our shareholders.

So I think those are the key points. North America, maybe briefly on your side, Andreas?

I can just follow up on the KPIs because there's also misunderstanding related to that up until now. We have both long-term incentive programs, and we have short-term incentive programs. It's right, as you say, that operating the margin has been a focus for the long-term incentive programs. But in the short-term incentive programs, which is a material part of total compensation, it is also about driving growth in the earnings as well. So I just want to highlight that. And then if you want to take the...

Yes. No, that's an important point because if you look also at the operating result growth, really solid double-digit levels in 2025 in constant currency. And we are here, obviously, to drive that for change, but it's always going to be a balance as well. And we should also remember that operating margin improvement is also helping and accelerating also the operating result growth. So I think that's an important clarification about the programs that we've had up until now.

When you look at North America, we feel good about our position. We feel good about the market in general. So I wouldn't -- and it's a little bit difficult to call out the specific growth numbers. This is something that in our industry, it is a little bit difficult to get a very clear understanding of how the total market is developing. But I would say that we are well positioned in terms of the segments where we are and also segments where there is, generally speaking, a higher emphasis on the quality, security is important, but there is also very healthy underlying growth.

So I would say that we are well positioned, but it's difficult, Remi, to call out a very specific overall growth number. But I believe with the offering that we have, we should be able to grow at least with the market and preferably above market rate. And that is very much based on the strength of the offering but also that we are well positioned in terms of the segments that we serve.

The next question comes from Andy Grobler from BNPP.

Just a couple from me, if I may. Firstly, just in Q4, in terms of the European growth, can you talk through the tailwinds from Turkey and also the headwinds from portfolio management, so sort of to get to the underlying numbers there?

And then secondly on the longer-term perspective, Technology keeps evolving at pace as we can see from the stock market. I just wondered what you're seeing in your end markets? And if at this stage, there's any signs or you expect to see over time, price deflation within your monitoring activities and the extent to which that's possible. That would be really helpful.

Thank you. When it comes to the European growth rates in the fourth quarter, you can say more or less all the positive growth is coming from Turkey in essence. That's the first statement. So Turkey had an impact for sure. If you're then looking at the -- where we have volume growth was in Technology & Solutions in Europe and then there was a negative impact that we have not quantified related to the [ APM ] that is impacting the Security Services portfolio. So I think those are 3 pillars to bear in mind when looking at the European organic growth.

And then, Andy, on the technology, I mean, what we call the technology business is essentially business where we drive or we design, we install systems and then we operate and serve those systems for our customers. So there's a couple of different components. But a big part of the value, I would say, when I look at the kind of 3 main areas of activity, installation, service maintenance and also monitoring is that, that work is quite tightly connected. So when we are doing a good integration and installation work, we're very well positioned to also provide the best type of service and maintenance.

But more and more of what we are doing and what we're also interested in building is more the recurring revenue. And there, obviously, connected services, those are usually not just simple kind of monitoring lines, for example, it's usually part of a broader value proposition and there, I believe that we are in a good position based on the great strengths that we have built. And where also the deep integration of Stanley has really helped us because we have built genuinely good service capability and levels and also [ rich ] service offering to our clients as well. So I think that we are in good shape in that sense from a market perspective and also the offering that we bring.

Okay. And then just lastly, Andreas, thank you for all your help over the years and best of luck with whatever the future may bring.

Thank you. And likewise, Andy.

I remember to say a special thank you to Andreas at the end of the call today as well. But I'm glad you comment that, Andy. Andreas has been a great partner all along here.

The next question comes from Allen Wells from Jefferies.

A couple from me, please. Firstly, just following up from Remi's question on North America. Obviously, very mindful that active portfolio management has been a headwind to growth. And as that starts to end, you flagged in Europe in the first half, that should be a positive as you switch to that growth focus. But as Remi flagged, as we look at North America, the portfolio management has ended and growth has slowed sequentially from 2Q through to 4Q, the 5% we saw in 4Q. To what extent is that slowing in North America? Are you guys maybe holding back to focus on margin rather than kind of fully pushing the commercial engine in the business? And to what extent maybe is it just that it's a continued tough market that is still hard to drive growth? That would be the first question.

Secondly, just like a bit of an update on the technology side. Obviously, growth improved sequentially 6% in the quarter, but it's still well below the 8% to 10% target. So I'd be keen just to understand of that 6%, how much is pricing, how much is volume and how you think about the outlook towards that 8% to 10%?

And then third question, just on free cash flow. Just in the full year, obviously, a positive outcome overall, but there was a positive impact from working capital for the full year. Like I don't typically think of you guys as a positive net working capital business. So to what extent is that net working capital number sustainable and how should we think about potential unwind as we move through 2026 as well?

Thank you, Allen. I think on the first question, we don't see any change in the trend in North America. I mean some variation there will be between the different quarters. We are well positioned. Like you highlighted, we've done with the active portfolio management, and it's obviously a dynamic market. But when you look at what we are winning and what we are losing, yes, we feel good. So no major issue or anything specific to read into that from my perspective.

When it comes to the Technology and Solutions growth, when we set the target of 8% to 10%, it's important to remember that was also including acquisitions. And there, we have done limited. We've been focusing on integrating and then also taking down our balance sheet, although it's something that we are looking at ramping up. So in that context, the 6% is a decent number.

When you look into that 6% on the Technology side, it is definitely volumes mainly from that growth. If you're looking at the Solutions side, it's a combination of both volumes and price. So all in all, more volume than price when it comes to the 6%. So -- and it's also a decent number, we should say.

When it comes to free cash flow, a couple of lenses here. I mean, we said in the last Capital Markets Day, yes, there will be a mix shift in the working capital with the technology business coming in. But we also said clearly that we are working on structurally improving our working capital, and that's really what we have been doing over the last couple of years, which is giving a positive result. So we have definitely structurally improved on the working capital side. And we also show that in the 88% cash flow this year, 84% last year. So it's also not just a temporary change.

Then as you all know, we have seasonality in our cash flow, where our Q4 cash flow is stronger. And now the number is coming in somewhat below Q4 last year, but still at a very strong level. So going into Q1, yes, it will definitely be weaker from that standard seasonality that we're having. But the underlying trend, I think, is most important when it looks at the cash flow given we have volatility. And there, I hope you all see that we have elevated the cash flow, and we are now delivering above our financial targets 2 years in a row.

The next question comes from Viktor Lindeberg from DNB Carnegie.

Two initially, if I may. And looking at the mounting down of CIS in 2026, if you could share some more details on the run rate and how it's sort of expected to progress and where we may be end of 2026 in terms of revenue? Are we all the way down to 0? Or is it only maybe halfway there?

And second question is associated also to this, trying to trickle out the underlying cost base for the, call it, group other item or overhead line items here. So if you could share any guidance or thoughts on the underlying costs for the Securitas business, excluding CIS, that would be very much helpful.

Thank you. If we start then with the government business within SCIS closed down, as I mentioned here earlier as well, we have started to see some impact in the fourth quarter from the close-down on the top line, but it's not much. But you should expect to see an accelerated impact in the first 6 months from the close-down activities. And then if you're looking at your question there, where will it be at the end of 2026, we expect that most of it will for sure be done. The vast majority will be done by the end of 2026. So I hope that helps a little bit by understanding how we expect this to progress throughout the year. When it comes to other in our segment reporting, 3 components, as you know, our Africa, Middle East and Asia business. We have our SCIS business, and we have the group cost. The Africa, Middle East and Asia business continued to deliver strongly in the quarter comparing them to last year.

The SCIS business was fairly stable when you look at the bottom line. And then on the group cost, it was higher than last year. And here, we have been running tight cost control throughout the year. But in the fourth quarter, we released some more project investments in the quarter. And that's the main reason and then some year-end reconciliation, but that's the main reason compared to last year. To understand the trend there, I would also very much look at the full year number.

Okay. That's very clear. And another question on the topic you have brought up Magnus in the CEO letter this quarter, you mentioned the run rate is about -- or at least USD 1 billion or looking at the [ SAS ] and recurring revenues. And I recall you mentioned 18 months ago a run rate of [ USD 1.25 billion ] per month. So just to understand, are we talking apples-to-apples here or what -- why dimensioning or maybe confusion from my side here?

Thanks, Viktor. No, we're just keen also on highlighting that we have quite a significant number. I mean, we are clearly above that [ USD 1 billion ], but we will share a lot more detail in the Capital Markets Day in June because this is an important focus area also in terms of building a more scalable business.

Okay. So it has not deteriorated over the past 18 months. That's what you're saying?

No, no. We have seen growth in the business since then.

[Operator Instructions] The next question comes from Johan Eliason from SB1 Markets.

I just had a bit of a detailed follow-up on to Andreas. You mentioned that in 2026, you expect some SEK 225 million to SEK 250 million in items affecting comparability. Is that sort of including this 1% of revenue you are sort of reviewing right now? Or could there be some one-offs on top of this from this review?

Relevant question. The number that I mentioned is excluding any impact from strategic assessments, which obviously then could be both a positive or negative number, so to say. So excluding that, just for clarity.

The next question comes from Nicole Manion from UBS.

Just one quick follow-up question from me, please, on the Security Services margin. Obviously, that's now up more than 100 bps over the past couple of years. Just wondering if you can give us a sense of how much of the improvement there you've seen this year over the last year is portfolio management versus what's coming from price increases or any other drivers? Are we pretty close to peak margins in this side of the business as you get to the end of the portfolio pruning? Or are there other levers you think you can look at as you move into next year?

Thank you. A couple of different drivers, Nicole. When you're looking at that margin improvement, new sales margins have been consistently very healthy, and that's a good indication that we have a good offering. Clients see the value in that offering. Active portfolio management is also there contributed. But I would also say that we've also been working to also run the business, leveraging the new platforms that we've invested in a more efficient way. So automation and also AI has also been helping us to also optimize how we run the operation.

If you're looking at the services margin on a group level, I think that there is further opportunity to continuously improve that in the next couple of years. So I would not agree with the comment that this is kind of peak margin. We believe that driving the things that we have been driving, but also continuously strengthening the value proposition, we are in a good position to enhance the value essentially.

There are no more questions at this time. So I hand the conference back to the President and CEO, Magnus Ahlqvist, for any closing comments.

Thanks a lot, everyone, for your interest and a special thank you to you, Andreas. Highly respected and appreciated colleague. I also think with -- in the dialogue also with many of you have also been a really good asset. So just to say thank you. But obviously, then looking ahead as well, we are now at full speed in terms of the assessment and also seeing really good interest also for this position. So we will come back on that matter. But most important today, I think, is just to -- yes, for me to also express our appreciation from the entire team.

Thank you very much, Magnus. And thank you, everyone, on the call as well for really good collaboration in the last couple of years, highly appreciated.

So I think with that, we wrap up the Q4 and 2025 presentation. Thanks a lot, everyone.

Good morning, everyone, and welcome to our Q3 report. We continue to develop on a good path, execute on our strategic focus areas and are glad to report a solid set of results for the third quarter. The organic growth in the quarter was 3% and North America and Ibero-America both contributed with solid growth. And now to a highlight. The operating margin was 8.1% in the quarter. We had solid improvements across all segments as well as in the Services and Technology & Solutions business lines. And as announced last quarter, we are closing down the government business within Critical Infrastructure Services. And adjusted for this business, the organic sales growth was 4% and the operating margin was 8.3%. EPS real change was strong at 19%. And the operating cash flow is above 100% in the quarter, and we continued to improve the leverage and the net debt-to-EBITDA ratio is now at 2.2.

The business optimization program that we initiated at the beginning of this year is contributing and the vast majority of the cost savings have now been executed. So shifting then to the performance just for an overview in the business lines and the segments. And as stated, we are recording significant margin improvements in both business lines. Continued strong Technology & Solutions margin development with 50 basis points to 11.7%. And the sales growth in Technology & Solutions was 4% in the quarter. This is below our target, but we have a strong offering, and we have taken actions to increase the focus on client engagement and commercial development, and I expect these actions to generate stronger momentum in the coming quarters.

The margin in Security Services improved 30 basis points to 6.9% and this was supported by high margin on new sales, portfolio management and strong development of the Aviation business, while the SCIS business hampered. Growth in Security Services was 1% in the quarter, and the growth rate in Services is negatively impacted by active portfolio management and the SCIS business. But important, we expect to finalize the active portfolio management work in Europe and Ibero-America during the first half of 2026 and that work is progressing according to our plans.

So with that, let's move then to the segments. And as always, we start with North America, where we are pleased to report solid organic sales growth at 6% and a record Q3 operating margin. Healthy portfolio volume development and price increases in the Guarding business were key drivers of the growth and continued double-digit growth in the Pinkerton business contributed and the performance in the Technology business also supported. Technology & Solutions growth was 2% in the quarter. And similar to the previous quarter, growth in Technology was decent, but we had lower Solutions growth. And we are fine-tuning our go-to-market approach with Solutions in North America, where we leverage our in-house technology capabilities in a much better way than before. And with these changes now being in place, I expect improved growth in the coming quarters.

We improved the operating margin in the Guarding and Technology business units to 9.5%, and this was supported by good cost control and leverage. So all in all, very strong performance and a record Q3 operating margin in North America.

And moving then to Europe, where the operating margin improvement stands out as the highlight of the quarter. The organic growth was 2%. Price increases, impact from Turkey and aviation supported, while active portfolio management had a clear negative impact on the growth in the quarter. Sales growth in Technology & Solutions was 4% and slightly below our expectations. The operating margin improved with 70 basis points to 8.4%, and this is a significant improvement and is the result of strong execution on all strategic priorities by our European teams. And as commented, we continue to address and renegotiate the low-performing contracts in the services business in Europe. This has a clear negative impact on the growth in the short term, but it's fully in line with our strategy and the plans that we set a couple of years ago. And we expect the work where we're addressing the low-margin contracts to be completed during the first half of 2026. So all in all, very good development by European teams and also here an operating margin at a record level.

We then shift to Ibero-America, where we're also pleased to report good organic growth and solid margin improvement. The organic growth was 5%. This was driven by high single-digit growth in Technology & Solutions and price increases in the Services business. And similar to Europe, there is a negative impact on the growth from active portfolio management, but we're making good progress and driving conversions to Technology & Solutions. The operating margin improvement was solid in the quarter, and the majority of the improvement is related to improvement in the services business, but some temporary one-offs also contributed. So all in all, a very good quarter also in Ibero-America.

And looking then at the performance across the group, we are driving disciplined execution of the strategy, and I'm really pleased to see strong execution across all segments and from all the teams. Our customer offer is stronger than ever before, and we're also glad to report improving client retention.

So with that overview, turn to the finance update and handing over to you, Andreas.

Thank you, Magnus. And we start with the income statement, where we had organic sales growth of 3% and improved the operating margin with 60 basis points, leading to a currency adjusted operating profit growth of 11% in the quarter. As we communicated in Q2, we have introduced 2 new KPIs, which are adjusting our organic growth and our operating margin for the government business to be closed down within SCIS. In the third quarter, the adjusted organic growth was 4% and the adjusted operating margin was 8.3%. And this is higher than our target to have an adjusted operating margin of 8% in the second half year of 2025 and puts us in a good position to achieve the target as we are closing the year in the fourth quarter.

The close down of the government business itself is progressing according to the plan that we laid out in the second quarter and had limited impact on the operating result in Q3. Looking then below operating result, there are no material developments in amortization of acquisition-related intangibles nor in the acquisition-related costs. Items affecting comparability was SEK 1.5 billion, where we in the third quarter have made a provision of USD 154 million for the government business close down, in line with what we communicated in Q2. The remaining SEK 65 million of IAC is related to the ongoing transformation and business optimization programs. Both programs are running according to plan and the full year forecast of SEK 375 million for both programs combined remains unchanged to our previous guidance. And as Magnus mentioned earlier, we have executed the business optimization program well and the vast majority of the target SEK 200 million run rate cost savings by the end of 2025 has been executed in the third quarter.

And as we're looking into 2026, we are planning to continue to reduce the investments under IAC in comparison to the SEK 375 million this year. I will come back with more details to you in Q4. Our finance net came in at SEK 419 million, which is a reduction of SEK 158 million compared to last year, and we continue the positive trend of reduced financing costs as interest rates and our debt levels are going down. For the full year, we expect the finance net to land in the range of SEK 1.8 billion to SEK 1.9 billion, which is a material decrease compared to the SEK 2.3 billion we had in 2024.

Moving to tax. Here, our full year forecasted tax rate is 29.2%. The increase compared to our full year 26.7% estimate in the second quarter is mainly due to the $154 million closedown cost where we expect around 60% of the total cost to be tax deductible over time. Adjusted then for the closedown impact, the full year forecasted tax rate is 26.8%, in line with our previous communication in Q2. All in all, a strong quarter where our currency adjusted EPS growth, excluding IAC, was 19% in Q3 and 18% for the first 9 months of 2025.

We then move to cash flow, where our operating cash flow was solid at SEK 3.3 billion or 106% of the operating income. This despite some negative timing impacts from Q2, as I mentioned in the previous quarter. Both our DSO and our general working capital position continued to improve and supported a good outcome in the quarter. The free cash flow landed at SEK 2.7 billion, supported by solid operating cash flow, the reduced interest payments due to the lower interest rates and debt levels and temporary positive tax timing impacts in the U.S., and we expect a majority of the positive timing impacts to reverse in the fourth quarter.

For the first 9 months of the year, we have strengthened our operating cash generation, having an operating cash flow of 74% of our operating income compared to 58% last year. We are in a good position to meet our full year target of an operating cash flow of 70% to 80% of operating income, where we always target to be at the upper end of that interval. This despite that we have one additional payroll in our U.S. Guarding business in Q4, which will impact the fourth quarter cash flow negatively approximately USD 40 million. This is a negative timing impact that we have every fifth or every sixth year in the U.S., and this timing impact is relevant for Q4 as well as for the full year 2025. In 2026, we will then be back to the normal payroll pattern with 1 less payroll compared to this year.

We then have a look at our net debt, which was SEK 33.4 billion at the end of the quarter. This is a reduction of SEK 2.6 billion compared to Q2, mainly supported by the strong free cash flow generation. In the quarter, we also had SEK 308 million of total IAC payments, where SEK 175 million of this was the second payment related to the U.S. government and Paragon settlement. The residual is mainly related to the ongoing transformation and business optimization program and the government business close down, which was SEK 43 million in the second quarter. And as a reminder, the total Paragon settlement amount is USD 53 million, which we pay in 3 approximately equal installments. We have now made 2 payments and the third and final payment has been made in the fourth quarter.

Moving then to the right-hand side, where the net debt to EBITDA was 2.2x. This is 0.5 turn improvement compared to Q3 last year, where the positive EBITDA development, good cash generation and the strength in Swedish krona all supported positively. And we are well below our target net debt-to-EBITDA of less than 3x and expect to continue to deleverage our balance sheet in the short term.

Moving on to have a look at our financing and financial position, where we continue to have a strong balance sheet, strong liquidity, and we remain without any financial covenants in our debt facilities. And after a period of important refinancing focus, our main focus in the second half of 2025 is to use the strong cash generation from the business to amortize debt. In the quarter, we have repaid SEK 1.4 billion of debt. And in the fourth quarter, we plan to amortize approximately SEK 2 billion on the term loan maturing next year. This will continue to support our cost of financing going forward, and we will have very limited refinancing needs throughout 2026. And as always, we remain committed to our investment-grade rating.

So with that, I hand over back to you, Magnus.

Very good. Thanks a lot, Andreas. And before we open up the Q&A, I'd just like to share a few reflections regarding the longer-term development and also a little bit looking ahead. So back in 2022, when we did the STANLEY acquisition, we accelerated the work to change the profile of Securitas to create a company with the strongest technology and digital offering to our clients in combination with high-quality Guarding services. We also shared the ambition to improve the operating margin from the prior decade, where we have been around 5% to achieve around 8% by the end of 2025. And we outlined the main focus areas to drive this improvement to 8%. And I think those of you who are following us, you're familiar with the bridge here. We exceeded 8% operating margin in Q3, and Q4 is seasonally somewhat lower margin, but we're on a good track to deliver on this ambition in the second half of this year.

And while the impact from M&A activity has been limited in recent years, we have made considerable progress in the other areas. And we're about to finalize the heavy lifting work with active portfolio management and strategic assessments. But this work has been very important to create a sharper and more focused company where all the business that we are running is fully aligned with our strategy. And when you're looking at SCIS, and this is more related to a question we received a couple of times, -- the close down here and the result doesn't really represent a significant part of our overall business. It is only around 1% of the operating result. So while large in volume, very limited in terms of the operating result impact from that close down.

And when I look at the strategic assessments, the remaining assessments that we have under consideration now represent approximately 1% of group sales. So we are nearing the completion of an important phase with important work. It has been rigorous and hard work, but it's been important to shape a stronger and a more focused company. And just to repeat the message also from the second quarter, we have received a question on a number of occasions on what basis we consider reaching the 8%. And as communicated earlier, if we reach the 8% operating margin in the second half of this year, excluding the SCIS business that we're closing down, we will have achieved the ambition. And delivering on this ambition is an important milestone since it represents a historical shift in the profitability profile of Securitas. But having said that, it's just a milestone on a longer journey.

And talking about that journey, we have come a long way in shaping the new Securitas to be a sharper and a much stronger company. And when you take a little bit of a longer-term perspective, we are operating in a market with good growth, which is spurred by increasing threat levels, increased demand for digital and technology solutions and where we are uniquely positioned with the investments we have done in the last 5 to 6 years. And we have intentionally transformed and repositioned our portfolio to the parts of the market where there is good underlying growth and the real security needs are more important than the price per hour. And we partner with our clients for the long term, investing into the relationship, and we are building the best security solutions based on the client needs, leveraging technology, digital people and more and more real-time insights. And all of this has also led to much more profitable Securitas today compared to the 5% company we were for many years.

Today, we're executing on our plan to get to 8%, as stated in the second half of this year. And we have also been able to lift the margin for 19 consecutive quarters and at the same time, deliver strong EPS growth to our shareholders. And in the increasingly complex and volatile macro environment, we're also a resilient business with the majority of our revenue is recurring and with an excellent client retention of 90%. And all of this has also been elevated or translated into higher cash flows where we are now delivering cash flow above our financial targets, and this has also contributed to an accelerated deleveraging after the STANLEY acquisition. So we're now in a position that is much, much stronger, and we can continue to invest into the growth of our business.

So as we're finalizing the strategic phase, we're a much stronger company, very well positioned in an attractive market to increase our focus on profitable growth. And as more and more units reach the required profitability levels, so that means for good sustainable business, they also gained the right to shift focus on driving profitable growth. And looking at the longer term, we will continue to improve the margin as we are building scalable solutions to our clients. So we stay focused, confident and also very excited about our longer-term opportunities, and we're looking forward to sharing more in the Capital Markets Day in June.

So with those perspectives, we can conclude this Q3 presentation. We're executing according to our plans, deliver strong margin with 8.1% in the quarter, EPS improvement of 19%.

So with that, let us open up the Q&A session.

[Operator Instructions]

The next question comes from Raymond Ke from Nordea.

A couple of questions from me. First one on Technology & Solutions or T&S, you had 4% in real sales growth this quarter. And on paper, the target the Board stated out for Securitas to achieve a growth within T&S of 8% to 10% sounds like it's congruent with its target of achieving 8% in EBITDA margin with the T&S having higher margins. But the outcome since your CMD seems to show that you've been forced to prioritize portfolio management at the expense of growth within T&S, at least short term. Is that a fair description, would you say? And your position now at sort of 8%, would that allow you to shift your focus more towards T&S growth?

Thanks, Raymond. Well, we -- just to put some context on the Technology & Solutions growth, this is obviously a long-term target. I believe that we are very well positioned. We've spent a couple of years doing very diligent and robust work in terms of the integration. When you're looking forward, we feel confident that we're going to be able to drive the growth here at a really healthy pace. Where are we right now on that? Well, we're mostly, as we've communicated before, done with the integration work. What we are doing now based on the strength in the offering is that we're investing more in commercial capability based on the strong offering that we have.

And we're also fine-tuning in a number of parts of the organization. And some of that fine-tuning is related to how we become better at cross-selling, how we start to become better at actually leveraging the combined client base. We're also aligning incentives. I should also say that it's a little bit of a mixed picture when you look at the growth rate in technology, if you look at the growth rate in solutions. Solutions, we've had really strong traction in North -- sorry, in Ibero-America, good traction in Europe.

But in North America, as I've explained in the last couple of quarters, we also under new leadership, did a little bit of a reboot in terms of the organization setup. And it was the right time to do that because historically, when we didn't have strong technology capability, we're also working with other companies to help us with the technology part of the solution. Today, our own technology team is the main partner and provider. And that enables us to build a much more efficient and also much more scalable platform for the longer term. And there, why growth has been flat now in the last couple of quarters in North America, I expect that now based on the actions that we've initiated to really improve in terms of the growth. So I believe that we are in a good phase and also in really, really good shape to drive this one, but also some fine-tuning and optimization is needed and also some of the commercial investments.

In relation to the 8% target, we should say that in 2023 and 2024, we had stronger Technology & Solutions growth that have supported us on our journey to 8%. And although it is 4% now in the quarter, we still have a positive mix effect compared to the Guarding business and how that is growing as well. But one final lens on it. When we said 8% to 10%, that also included one part of M&A activities where we have said that we have done less as well. So that is one of the reasons then why we are not coming all the way up to the 8% to 10% target because it's mainly within Technology & Solutions which our M&A activities would be geared against.

Right. That's very helpful. And then maybe sort of a follow-up, if you could maybe provide a bit more color with regards to how you intend to accelerate T&S growth, mainly to help us analysts better understand the pace of growth acceleration that we should be expecting across your segments going forward?

Yes. So if you look at that, it is very much related to what I mentioned. So strengthening and investing a bit more in the commercial capability. We have really strong offering. I've recently also been with a number of our clients in the U.S. a couple of weeks ago. Feedback is strong. partnerships are strong and our clients and also new clients are also looking at Securitas as the main partner. So we are well positioned. And I think that is the key point. So our offering is strong, but I think that we will benefit from also investing a little bit more in the commercial resources and capability as we go forward. And then as I mentioned, we're also working in a much more diligent and intentional way now in terms of how we are leveraging existing client base for cross-selling. These are things that also relate a little bit to the work that we've done in the last couple of years to also have the right types of tools and digital platforms to enable that together with incentives as well to be able to drive it at scale. So I feel that we are in a good position here to drive this at a healthy clip going forward.

Just one final, maybe sort of a detail on this, but could you elaborate on -- you mentioned the positive one-offs that boosted the margins in Ibero-America. Maybe I missed that, but how big were they? And how should we think about them going forward?

This is related to some reduced provisions related to legal cases. So there was a positive impact to the operating margin in the Ibero division. Normally, we mentioned something when it impacts at least 0.1% margin-wise in Ibero in the segment Ibero. In this case, it was a bit more than 0.1%. But just to help out there. But then important to say as well that the majority of the margin improvement in Ibero-America was driven by operational improvements, not this one-off related items. And on a total group level, it doesn't have any material impact whatsoever.

The next question comes from Daniel Johansson from SEB.

I am [ Andreas ]. I'll limit myself to 2 questions here, I think. Maybe starting a bit on the cash flow. You had another quarter here with a very strong cash flow, and you're in a very good position from a balance sheet perspective. And all else equal, you probably deleveraging further here going into Q4. So I'm wondering a little bit on how you think about capital allocation here for the coming quarters and year. I mean you have a target of 3x net debt to EBITDA. There's a wide margin to that target already. You're through a quite heavy investment period. You're planning to amortize debt. So do you have enough interesting M&A in the pipeline that you would like to pursue? Or is there an opportunity for higher shareholder remuneration through extra dividends or share buybacks? Yes, if you can help me a little bit to understand on how you think about the balance sheet from here.

Thank you. When it comes to capital allocation priorities, number one, as you say as well, is to below 3%, which we are with good headroom as well when it comes to our leverage point. Priority #2, invest to drive the growth in our Solutions business. We have a CapEx guidance of around 2.5% of sales, and that we will continue to do. Priority #3 for us is the dividend to our shareholders, 50% to 60% of net income to be paid out on an annual basis. And then priority thereafter is related to bolt-on M&A activities. And here, as you rightfully say, there has not been so much activity. We have opened up for it, but we have also been focused really on driving the organic improvements in the business.

We have also been focused on the strategic assessment program. So that is something that we will work on accelerating, although like you say as well, there is not a big, huge pipeline right now today, but that will, over time, start to increase. And then after that, I mean, if we don't find enough acquisitions, so to say, then we will continue to deleverage our balance sheet here. And over time, we can consider any other shareholder returns, but it's not a topic today and in the short term. And then we will have to come back to you on a more longer-term view in our Capital Markets Day here in June.

Understood. And then maybe a smaller question on the other segment. If I understand it correctly, SCIS still hampering you on a year-to-year basis. But when I look at the other segment, the loss is only SEK 56 million, so quite in line with last year. Is that due to continued good performance in AMEA and lower group costs or anything more of a one-off nature in there? Or yes, what explains that you don't have a bigger loss given SCIS is still negative, it seems?

No big one-offs. You're right. Our business in AMEA -- Africa, Middle East and Asia and the Pacific are performing well, which is supporting other. Group cost is under control. So there is no major changes there. And then we have the residual performance in the SCIS business.

The next question comes from Allen Wells from Jefferies.

A couple from me, please. Just mindful of the kind of portfolio management comments, you said that they will continue in Europe, America into the first half. So is it right to assume that, that kind of very low single-digit growth kind of profile that we've seen for this year in those regions, but at least continues in the first half next year? I'm just keen to understand how you see the potential timing and shape of growth recovery there? And that's the first question.

Secondly, just a quantification question on the tax timing comment that you made in terms of the unwind in the fourth quarter. Exactly what does that mean in terms of the impact on cash flow? And as I just think about the 3% organic growth number that you posted in Q3, what is the pricing component of that versus volume, just at an average group level? Just keen to understand where pricing is.

Thanks, Allen. So on the active portfolio management, if you're looking at the current trading, it's a several percent type of impact that we're seeing on the numbers that we're reporting in the last couple of quarters. So that's the reason we highlight that there is a significant impact. We don't provide guidance, but we continue to work as we've done before. It's obviously to take care of our clients in a good way, do this in an orderly fashion. But I also call it out because it is important that we also complete that work and get that work behind us because the sooner that we do that, we can also start to focus more on profitable growth again. So that's really the perspective. But we don't provide any guidance. But I think going back a number of years, a lot of people were wondering, okay, does this mean that you're going to shrink significantly in business, et cetera?

Well, as you know, over many, many years, that hasn't happened because we also have had a healthy intake in terms of new business. So we're on the right path, but we also need to finish that job, very important in Europe and Ibero-America. Then if you compare a little bit to North America, you also see the benefit there. We were done with this work earlier in North America, and they're obviously also back to much healthier growth levels, and that really contributes. So this is all part of the plan, but good thing now is that we're now kind of nearing completion of that work in the next couple of quarters.

When it comes to the 3% growth, the majority of that is price. And where we do have volume increases is in our North American business, where we have seen a good portfolio development. And it's also a very good place to have a good growth given the margin profile that we are having in our North American business. They have been through the [ APM ] program, as Magnus has just talked about. And now we are turning that business more and more into growth focus. So it's really good to see the growth numbers and the volume development in the North American business. But all in all, on the group level, most of the 3% is price. When it comes to the cash question related to tax, we have had some positive timing impacts both in Q2 and Q3 in the U.S., and we expect that to reverse in Q4. And we have talked about USD 30 million, USD 40 million of negative impact in Q4 on the cash flow related to that.

Can I maybe just one quick additional follow-up. Just mindful of U.S. government shutdown at the moment. Is there any impact in your business there? I guess most of it might be in SCIS, which is closing down. But I'm just wondering if there's any impact over the last month or so in terms of Securitas there.

No, there is no significant impact.

The next question comes from Viktor Lindeberg from DNB Carnegie.

Only one question from my side. Looking at the business you've reshaped now quite impressively in the past 3 years in my book at least. And looking now forward in the market, if you could help us pin down the, let's say, tendering activity that you see. How is the market in light of all the uncertainty we see with the headlines every now and then and tweets and so forth. So curious to understand the overall market tendering activity and where you see yourself in light of your profitability journey now when it comes to maybe win ratios that you have seen or foresee going forward to not only defend the 8% margin, but in light of being able to propel further upwards?

Thanks, Viktor. I think this is a part that we are very excited about, and I appreciate your comment. It's been quite heavy lifting within the business over the last 4, 5 years in terms of shaping the company into the profile that we now start to become. Very intentional work. We followed by the book, most of the things that we set out to do internally 5, 6 years ago and executed on those. So I think that we are -- as a company, we're in a much stronger position. And when I look at the market, we're also -- I mean, we're operating in large, growing, attractive markets. So we're in a very good position also to tap into that and to leverage that with the strength of the offering that we have. The kind of uncertainty that we're seeing around the world, and this is obviously related to geopolitical uncertainty. It's also related to increasing crime and risk levels. My clear takeaway from a number of the client discussions, and I mean we are serving many of the most reputable companies in the world.

They are looking in light of that for a strong partner, a really, really trustworthy and reliable partner that has strong capabilities. And those capabilities to us are very much focused on technology, digital and our services capabilities that we have in our portfolio. So I think that we are really well placed in that, and there is also a healthy market. An important shift that we have been able to achieve in the last 5, 6 years is that we have been much more granular and also much firmer in terms of what are the profitability levels that we need for the business to be sustainable. And I think that has been as the market leader in our industry, that has been really, really important work for us to carry out. But then when you're looking at the market because that's obviously more on a macro level, we also then have a strong position. We know the market is growing, but we're also in the last 4, 5 years, also focusing in on the segments where we see that there is a very clear security need. There is a focus on quality. And some of those that -- where we're also enjoying very, very good growth today.

Examples are in technology segments. It's in the data center segments, pharmaceuticals, defense, just to mention a few. And what I'm seeing here is that the positions that we have built a few years ago we just continue to expand and grow those ones. And that gives me a lot of confidence that we are really in a much better position today, much more intentional and in a good position as well to now after we get a lot of the heavy kind of lifting work behind us to also optimize a little bit more in terms of continuous margin improvement, but also then really doubling down on more profitable growth because we have a strong offering and we want to grow, but we need to get some of that work done. But the good thing now is that now it's not 4 or 5 years out. It's a couple of quarters out. And I think that is the exciting position that we are in right now. So I believe we're in a good position, Viktor, and also a good market.

And by your comment, it does not really sound that clients are waiting to make decisions. It seems the market is progressing as it usually does. No incremental hesitation. Is that a fair assumption?

I think so. This is a fairly slow moving and fairly conservative industry from my perspective. But it's also based on security is so important that most of our clients, they are also very deliberate in terms, okay, what are the things that we need in our security solutions and who is the partner going to be. And for that reason, some of the selling cycles are a bit longer, but the way that we build our business is very much focused on long-term value creation. So once we are in a relationship with a client, we usually develop that continuously and over time, and that is a real position of strength for us. But I wouldn't say that there is a hesitancy in that sense. It's rather the question, how can you help us and really leverage technology and digital capabilities that we have and that are also out there in the market to be able to run a more effective and more efficient security program.

And there, I feel that the kind of the increasing complexity from that perspective it is clearly in our favor because then most customers also realize that it doesn't make any sense for them to invest in all of that capability. It requires real deep know-how that we have in our technology business that we're building digital capabilities and also much stronger guarding capabilities. So it's matching in a really good way. And that's the reason I'm saying I think we're in a really good position when I look at the next 5 to 10 years after a period of really reshaping the company.

[Operator Instructions] The next question comes from Simon Jönsson from ABG Sundal Collier.

I just have a follow-up question on the M&A in Technology & Solutions specifically, of course. Just wondering where you think or where you see that the market is currently in terms of multiples paid for acquisitions of the kind of assets that you are looking for ballpark figures would be fine.

Thank you. Given that we have not been so active in the market, I would not really comment upon that today, to be honest, as well. That's something I need to come back to. But the things that we have done have been more or less on the same levels as -- I mean, same levels as we have done bolt-ons before. I think we should take out the STANLEY transaction that was one big transaction, generally speaking, where we have said that we paid a premium to get that down. So the multiples in the technology market is lower than that for sure. But I haven't seen any trend of reduced multiples later over the last years. So normally, in the technology space, you would pay double-digit multiples -- low double-digit multiples. And then it all depends on what kind of cost synergies that we have and, of course, revenue synergies as well. So those are the comments I would like to give at this point in time, Simon.

There are no more questions at this time. So I hand the conference back to the President and CEO, Magnus Ahlqvist, for any closing comments.

Very good. Thanks a lot, everyone, for joining us today. We continue on a good path as stated and excited about the next phase in our journey. Thank you.