Sweden's Securitas beats Q3 core profit estimates on Europe strength; shares jump
Adds share move in paragraph 2, details in paragraph 5, analyst comments in paragraph 8-9
By Agnieszka Olenska and Jesus Calero
Nov 6 (Reuters) -Sweden's Securitas SECUb.ST, one of the world's biggest security services firms, reported a slightly bigger-than-expected increase in third-quarter core profit on Wednesday, helped by improved performance in Europe.
The company's shares had jumped more than 9% by 0831 GMT, on track for their best day in two years.
The company's operating profit before interest, taxes, depreciation and amortisation (EBITDA) rose to 3 billion Swedish crowns ($276.11 million) in the quarter, from 2.76 billion crowns a year ago.
That was slightly above an average analyst forecast of 2.96 billion crowns, according to a company-provided poll.
Securitas said margins in its European business climbed to 7.7%, fueled by targeted price increases and a surge in airport security demand, backed by high-margin contracts and focused portfolio management.
The company said high seasonal travelling, along with improved efficiency in its airport security business, supported its overall operating margins in the quarter.
CEO Magnus Ahlqvist said Securitas is on the right path to achieving its target of an 8% operating margin by 2025.
DNB analyst Karl-Johan Bonnevier said the European business showed continued recovery, while the U.S. arm's performance was solid at a high level.
"Underlying FCF (free cash flow) generation is very strong, further strengthening its financials. The strengthening U.S. dollar this morning is obviously also a bonus," Bonnevier added.
The acquisition of Stanley Security, which closed in 2022, added technology solutions exposure to Securitas's staff-intensive offering but also loaded it with significant debt, which has been a focus for reduction in recent quarters.
"We delivered healthy growth in our technology and solutions business in the third quarter. As we are finalizing the integration of Stanley Security we are increasing focus on our commercial activities," Ahlqvist said in a statement.
($1 = 10.8652 Swedish crowns)
Reporting by Agnieszka Olenska and Jesus Calero; Editing by Rashmi Aich and Savio D'Souza
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