To everyone who only sees the worst, we say, "Look closer. Open your eyes to all that's good." 80 years of keeping people safe has sharpened our eyes to see more than most. When we're protecting people, premises, and property, our experience helps us spot what others miss. Potential, positivity, progress: that's what we protect today, and it's how we protect tomorrow. Because we see what really matters. We see who we really help. We see how life can be when the world feels secure. Securitas: See a different world.
Today, 2024. I'm Micaela Sjöqvist, and I'm heading up the IR function at Securitas. Today's event is all about helping you understand our journey to our 8% operating margin target by the end of 2025. We are hosting two Q&A sessions, and we will be taking questions both from the audience and from online. So don't forget to post your questions. Now, let's kick off this event with our CEO, Magnus Ahlqvist.
Thank you, Micaela, and, great to, see you, everyone. Very happy to see everyone here in Stockholm, but I also wanna say a special welcome also. We know there are many people who are joining also over the webcast. It's a really exciting time at Securitas, and we have done a lot since we met last time, just in the last 18 months. It's been a number of years of extensive transformation that we initiated back in 2019 and 2020, but we are now very well positioned to deliver higher value than before. So like Micaela said, today, the focus is very much on the journey.
We're gonna do a few just looking back perspectives, but very much also focusing on the roadmap that we have ahead and how we're creating higher value for our clients, and also how our higher value for our shareholders. I hope, together with the team, that you're gonna leave here together with a significantly better understanding of the new Securitas that we are now shaping. Talking about the team, very happy to have a number of our key leaders with us here today. I'm starting off to set some context together with Andreas, and then you're gonna hear from Tony, who is leading Securitas Technology, about all the exciting things in technology.
Brian is coming next, and Brian will talk about the great partnerships that we are building with our global clients, because this has been an area where we have driven tremendous improvement and very exciting things as we are going forward. And then you're gonna hear from the leaders of our two largest segments, Greg and Henrik, where you will get more insights into North America, but also into Europe. And after that, Martin, who is leading Securitas Digital, will then share more in terms of the digital journey. And this is an exciting one because I feel when I had the first Investor Day a number of years ago now, we were mostly talking about the things that we needed to do and the opportunities we saw in digital.
Now, we're actually driving meaningful impact and also very significant opportunities, ahead. And then last but not least, we have Frida and Sune, who will talk about sustainability, and this is very much how we're also leading the industry from a sustainability perspective. I should mention, Ibero-America are not represented here today with Jorge and the team, but, that's a part of the business where we have good trajectory and also good outlook, as we go forward. But like I said, we've done quite a lot, in the last 18 months. So let's just start and take a look at some of those, achievements. First of all, we have created Securitas Technology and have driven really good progress in terms of the integration of STANLEY Security.
The client offering is stronger today than ever before, and we're also starting to have more strategic and a different type of conversation with many clients as well, and we're also translating that into a number of significant wins. Like I mentioned, we have accelerated our digitalization pace, and we have also continued to sharpen our business, and this is something that I will talk a little bit more about later on, also the importance of that. But we have also made tremendous progress in terms of sustainability. When I look at sustainability, we're actually now the first major company in the Security Services industry to commit to Science Based Targets, and we also had the targets validated at the end of last year.
And I think if you are looking at what's most important here for the mid and the long term, opportunity and potential, it's essentially our ability to scale great leaders and great leadership across the entire organization. And here, I think you're gonna see today, but we're also doing quite a lot across the entire organization with building stronger leaders and also a stronger team, essentially, for the future. So what we're gonna do today is we're gonna focus on all of these areas. You're gonna get lots of examples to also then get a deeper understanding of what this really means when we are creating the new Securitas. But like I said, if we just start to take a few moments just to look back as well.
This is then looking at what have been the kind of key trends and developments in the Security Services industry over the last 10 years? What are the changes that we are seeing in the demands from the clients? And then also, how have we connected our transformation work to those needs and to those changes to make sure that we are well-positioned, that we're really leveraging and capitalizing a lot on these opportunities? If you go maybe 10 years back, and you look at this industry, Security Services companies, companies were primarily manned guarding-focused companies. The technology that was being used was mostly analog. Pace of innovation was fairly low.
If you're going or fast-forwarding 10 years and coming into today's position, what you're seeing now is a number of really exciting changes, and some of these changes are also happening at an accelerated pace. From my perspective, one fundamentally important one is the introduction of IP technology. Because when we had better technology, we've also seen good technology in combination with intelligent use in terms of software. This is a combination that has been increasing at a very rapid pace over the last 10 years. A lot of that has been enabled by improvement in bandwidth, but also improvements in terms of innovation.
So when we were looking at the market, and when we were building the strategy five, six years ago, we saw this increasing importance of technology, data and cloud capabilities, all becoming critical capabilities for a company that wanted to win in the future Security Services industry. But as you can see here on this slide as well, we're also operating in large and attractive markets, and obviously, the guarding opportunity is very significant. You're looking at technology, where there is also very significant margin opportunity and growth. But then also this kind of blending of people and technology into what we call integrated solutions, and then some of the data-driven opportunities. But when we looked at these trends, we have then also spent quite a lot of time with our clients to also understand how are the client needs changing.
I think as a general comment, one thing, which is important to understand, is that security today is higher on the agenda in most of our corporate clients. And I think that is probably related to geopolitical factors. Probably also because there is a perceived increase in terms of perceived risk level in society, which you can obviously say is unfortunate from a societal perspective, but it is something that we're also clearly seeing. So the role that we are playing as a specialist with our expertise is increasingly important. But if you're then looking at the needs and to try to discern some of the key trends, here, due to this increase in complexity, we see that clients are starting to rethink their security programs and operations.
We also see a real shift from the past, when it was very much about how many hours and how many guards or officers, so very input-oriented from the client perspective, and today it's increasingly more output-oriented. Which makes a lot of sense, because that's obviously the only thing that really matters in the end. We've also seen an increasing focus on quality, on compliance and sustainability, and this, I think, is also something which is a real opportunity for us. Many clients that have multiple locations are also putting a premium as well in terms of driving consistency and oversight across all of those locations. If they...
Oh, and, and that doesn't really matter if it's a local, company or if it's a global company that have, hundreds of locations around the world, and we're gonna talk about some of those, today as well. But with the advancement as well in terms of data, we've also seen that there has been an increase in terms of the demand for more risk-based and more dynamic, security solutions. And here, the exciting thing is that there is then this opportunity to leverage data, to not only kind of report and respond to what has happened, but try to anticipate and then, respond, to what will happen. And I also believe that the availability of data is also profoundly changing the entire industry, because it's also given this rise to a number of, knowledge-based products....
One last part that you see at the bottom here as well is automation. I mention automation here because with technology, obviously when you're also applying artificial intelligence, there is a lot of things that you can actually do now, leveraging good technology and AI, essentially, to also automate for a better security response. And that's something that we will also talk a little bit about in the session today. And when you then look at these trends, we have then taken an active role to make sure that we are aligning ourselves, and that we're really transforming our business in line with these trends. So looking at just some high-level figures, it's a very significant difference, and I talked to some of you before we started here today.
If you just go 10 years back or even five years back, you start to see a very different company today. Sales, obviously, compared to five years ago, are 50% higher. Our operating result is almost double. 53% of the profit today is coming from what we call Technology and Solutions, and that's essentially higher up in terms of client value and in the value chain, but also then double-digit margin profile. The operating profit margin of the business last year was 6.5%, and that is then to be compared to a little bit above 5%, five years earlier. And when you're looking at the decade up until 2018, 2019, we were essentially stable just north of the 5%.
So we've also started to now make meaningful progress, in terms of the operating margin, but significantly more opportunity to come. But then also, when you reflect on some of the numbers here, you also see that sales are significantly up, but the number of employees is actually 10% down, in this five-year period. And that's a really positive thing, because that also means that we have higher sales per employee, we have higher productivity per employee, and this is something that we wanna keep on driving as well over the next five to 10 years. And I mentioned it already, we're also starting to really scale digital in a meaningful way.
But when we were working on the strategy, we were also then having a lot of discussion in terms of what does it really take to win in the security and safety industry of tomorrow? And we identified three main capabilities, essentially, and those are presence, technology, and data. And when we talk about presence, that is essentially all the security experts. They could be, technology, installations, or maintenance, colleagues, or they could be security officers. That presence really, really matters today, and it will also matter in the future. Technology is very much about the design and then the integration, where we provide installation, and then we also help our clients with the service and maintenance over time. And the last part is intelligent use of data.
The beautiful thing with these, and what we were seeing five, six years ago, is that presence will be important. We had quite a lot of presence, but we also realized we need to strengthen our technology capabilities. The more presence you have, and the more connected technology, the more data you are also generating. So this is also becoming kind of a self-reinforcing strength as well for us as a business with, today, significant presence and also technical capability. Why do we believe this? Well, because the physical and the digital worlds are converging, and this is really happening in the Security Services industry. That brings up opportunities in terms of business, but also clear needs from the clients in terms of better security systems and capabilities.
So when we thought about that, it became very clear to us, what does our kind of wanted position need to actually look like? And that was to become the intelligent solutions partner for our clients. And today, if you're looking at Securitas, we are very well positioned. We are proud to count many of the best-recognized companies and brands in the world. They are increasingly coming to Securitas to partner with us, and Brian is gonna share more about this. But if you ask the question, "Why is Securitas such a strong and attractive partner?" Well, in the dialogue that I'm having with these clients, it's very much because they believe, number one, in the strategy, and obviously the values that we have as a company, how we work.
But it's also that we have real credible presence, we have strength in technology with the number two position worldwide, and we also have an offering that is unmatched in the industry now, from corporate risk management with our Pinkerton business, increasing emphasis on intelligence, technology, and guarding capabilities, and the opportunity to also integrate these based on the needs and the risk profile that each client has. So these are becoming really, really important building blocks, and I'm really excited that we're gonna be able to give some good examples today as well, in terms of how we actually leverage these with our clients. Because together with the clients, we are now starting to create some world-leading security solutions. So we have established a unique position in a future where essentially technology, presence, and data are critical to winning.
If you look from a geographic perspective, we did multiple technology acquisitions over the last 10 years. Come 2021, we were ready to make a transformative acquisition of STANLEY Security. And today, we have a strong position as a number two player in technology worldwide. And this is not just to have kind of global bragging rights, because all of that is obviously coming down to having real significant strengths on a local level. And Tony is going to talk about what that means also in terms of value creation and the growth prospects going forward. But we have also sharpened our business, and during the pandemic, we exited a number of lower performing and less strategically important markets for us.
And when you combine that with the exit of Argentina last year, it means we've actually exited 14 markets now in total. And this is something that we continue to do, because everything that we have, with the margin targets that we have set up as a group, everything has to be fully aligned and also to support the strategic plan and also the targets that we have set. But the important thing is that the focus that we have now is significantly stronger. We have presence and relevance where it really matters. So we are in a good position to then deliver as well in the next phase on our strategy. And all of that, we're focusing essentially in four strategic focus areas. Those of you who follow us closely, I think you're quite well familiar with this.
The first one, like I said, it's within technology. The second one is then a stronger emphasis in terms of enhancing the quality and the differentiation in guarding. And, and this is a combination of investing in our capabilities. So here we've done a lot in terms of upskilling. We're doing a lot in terms of digitalization to make sure that the guarding offering is significantly stronger. But we're also driving very active, active portfolio management to make sure that we are handling low-performing contracts or low-performing branches. Henrik is going to talk significantly more about this together with Greg as well, in terms of what this actually means for our business. And then we have this opportunity, the third focus area, is then to integrate essentially solutions for our clients, where we see attractive opportunities based on the client needs.
And the last area that we talked about, digital and innovation, because that's- it's really in the digital space where we have the most significant innovation opportunity. Here, we're also launching and have launched a number of really good products. Risk Intelligence Center is one of those, so we're starting to make really good inroads as well, addressing specific client needs and leveraging these capabilities that I mentioned before. And this is important, this slide, because in these four areas, this is essentially where we're working to make sure that we are achieving our 8% margin targets by the end of 2025. So, I will just make a brief overview in terms of how we get there. And the first area is within technology and solutions.
The most important point here is about driving the revenue and the margin shift, essentially towards higher value technology and solutions in our portfolio. But we've also done, as I mentioned, really good progress in terms of the STANLEY integration. Previously announced that we achieved the $50 million in cost synergy targets, and we have identified an additional $20 million-$25 million that we will realize in 2024, in the first half of 2025. So that will have a positive impact. Second part is improving profitability in our services business. And here, we've actually achieved quite a lot of the improvement in North America already. So here, the main focus is really in Europe, in terms of now, driving the last part of that work in 2024 and 2025. We're also becoming stronger financially.
Obviously, the STANLEY acquisition was a very significant undertaking. We have been successful in terms of the deleveraging, so we're also looking at starting to do disciplined, but meaningful, acquisitions as well in the coming 12-24 months. And like I said, we continue to do the strategic assessments to make sure that everything is also fitting in and supporting our longer-term strategy. And you're going to get further insights into all of these areas today from Tony, from Henrik and Greg, and also Andreas, more on a holistic level, to give you an understanding and really what is behind our full commitment in terms of achieving the 8% by the end of 2025.
But one thing which is really interesting now is that we have more levers today in terms of how we can optimize the business and how we can create better value. And when you look at this slide, you have to pay attention to the arrows as well, because we wanted to illustrate this in a simple way. But if you're looking at the top right corner, there you have essentially the services where we have really good differentiation, higher margin profile. And here, we're talking about our corporate risk management business, which is under the Pinkerton brand. It's the technology business, it's the solutions business. There, the entire focus is essentially on driving growth, because all of that is fully accretive as well to making this shift, and we have really strong capabilities to make that happen.
If you look at North America, which is more in the middle of this one, like I mentioned, we have already improved the guarding profitability quite a lot in recent years. So here we're expecting to drive healthy growth, but also with some continued margin improvement. If you're looking at Europe, as we mentioned, here, we have more work to be done in terms of the guarding profitability. So there, it's still an area where we have more margin focus than growth focus when you're looking at the next 12-24 months. So that's really when you're looking at the entirety of the business and the different areas that we have. But, there has also been a number of important enablers of this transformation, and the first one is our transformation programs.
And this is something I know we have been talking about quite a lot since I started, but that's also because we saw a need to profoundly modernize and digitize our way of working, but also to harmonize how we are working, so that we can provide a stronger and also more scalable business for the future. Because modern systems and also common platform, platforms is enabling us to operate at a more efficient level, but it's also enabling us to scale products and services in a way that we haven't been able to do in the past. And all of that is also very much related to building a platform to be adding more value, essentially, to our clients.
When you look at these programs, we still have some work left to do in Europe and also with the integration of STANLEY, but we're now entering the kind of the last phase or the final phase of the programs that we started back in 2019. And in Europe, by the end of 2024, we will have harmonized our ways of working. We have implemented the solutions organization, and then it's more a matter of industrialized rollout of the remaining markets, and that is something that we also expect to happen at a significantly lower cost. So when you think about this, and sometimes I get a little bit tired about talking about the transformation programs, but they have been fundamentally important in terms of driving the shift of the profile of our business that you will see today.
They have enabled us to stand up a technology business, which is now one of the leading on a global level. But it's also enabled us, like I said, to build modern systems and more harmonized ways of working. That is a really strong platform to drive improvement across the entire business. But it is important as well, when you're looking at the Items Affecting Comparability, we have guided for SEK 550 million for 2024, and this is a number that will also continue to reduce in 2025 and 2026. But to support this transformation, because this is not only about building capabilities and innovating for the future, we also had to transform our leadership, because the... It has been a profound change.
Like I said before, when you look at what is the most important factor in terms of the long-term success, I genuinely believe that's our ability to scale great leadership. We have been welcoming but also promoting a number of really good people to the company in the last couple of years. I would say that we have more people today who have a higher caliber, more diverse, more business-oriented, and also more client-oriented than ever before. This is a change, and this is something that we continue to drive. This is most visible, I would say, on a country level, where we've also done a number of really, really positive recruitments and also promotions in the last couple of years.
But if you're looking at the leadership base that we have, with thousands of leaders in the frontline, who are closer to our clients, closer to our team members, there we have also run assessment of thousands of leaders to make sure that they are the right ones to support the strategy and execute the strategy in the coming years. And that's also meant that we had to replace quite a number of people, but we're also investing quite a lot in terms of upskilling. And to reinforce this change, we have also done a refresh of the famous Securitas Toolbox.
This was important because we wanted to build a toolbox for the future, essentially, but also Securitas Toolbox, which is supporting us with common language and the core principles that enable us to work as one team and to really deliver well, regardless of where one is located around the world. We've also driven alignment of the incentives. So all the incentives that we have now are essentially fully aligned with the longer-term targets in terms of margin improvement and cash flow generation. I should also mention, when you look at the long-term incentive program, this is also something that we have also implemented sustainability targets as well that are important. Talking about sustainability, I'm really, really happy as well to say that we are leading the industry in this space.
And I think when you think about our owners, our culture, our leadership, we have always had a good ambition to be a good company and to be a responsible company. We do not compromise on our values. So we've done quite a lot in terms of strengthening our compliance programs, investing in business ethics, and we also have really ambitious targets for sustainability. And this is something, like I mentioned, Frida and Sune will give some more detail in terms of what this means. But when you think about Securitas and sustainability, the most important impact that we have, it's on the working conditions that we provide to our people and the development opportunities of our people that we have around the world. So when I look at all of this, we are in a significantly stronger position as a company today.
It's been quite extensive change, lots of heavy lifting, but I genuinely believe that we are now in a position where we are able to deliver significantly higher level of value, but also then to achieve our financial targets, 8%, by the end of 2025. But how about the longer term? Because a lot of what we're discussing today is very much the roadmap in the kind of the near term. But the longer term, obviously, everything that we are doing now is also aligned with and supporting our longer-term ambition. So I just wanted to take a few minutes to also talk about what does that future look like?...
Well, when you look at the period beyond 2025, I believe that we are in a very good position now to really redefine what does a leading security partner actually look like in terms of offering, in terms of capability? If I'm reflecting back where we were six, seven, eight years ago, we were mostly a guarding company. We had no digital capabilities. We had very limited technology capabilities. When you look at that business that we were back then, that was essentially a business where I think that on a global level, we could probably make 5%-6% in operating margin in terms of potential.
Today, we have a near-term target in terms of 8% by the end of 2025, and we genuinely believe in the 10% based on them putting a number of building blocks and also capabilities and levers that we now have to get there. And what are then those building blocks? When you think about this, we have a large and really valuable client base. We are driving digitalization end-to-end, which has enabled us to scale, but also to operate in a more efficient way. We have an unmatched offering, and there, obviously, the shift, like I mentioned before, towards more technology, more integrated solutions, that is one of the main drivers as well of the margin journey. But we also start to become a completely different partner for many others, clients, but also for some of the other partners in the ecosystem.
So we're also looking at partnering opportunity on the commercial side, but also then with partners, because we also start to have a really attractive position now also as a window, and go-to-market window, essentially, for many companies that are in this space. But perhaps the most exciting is that we're also building scalability into our model. And this scalability, it could be connected to millions of connected devices. It could be connected then, obviously, to driving more data-driven innovation, where it's not so much one input and one output. And this is where we're also putting increasing emphasis on driving more, SaaS or what we call Security as a Service type of applications as well. And when you then think about, okay, what is then that shift?
Well, if you just capture it in some simple words, you can essentially say that we're going from price per hour in our business 10 years ago, and now it's more towards an outcome-based and more scalable business going forward. And that's a really exciting shift because that's also what's underpinning very much of our view and conviction about the opportunities in the future. So when you look at these capabilities that we're building now, and also then, obviously, executing on our plans, 10% ambition or above 10% is definitely within reach as an ambition in the long term. And, and I would just encourage you, when you listen to the different speakers and my colleagues here today as well, think also about, okay, what do we do in the near term?
But also, what does this really mean for the longer-term development and our ability to reach that ambition? Because to conclude this, we have an unmatched offering. We have a significantly stronger position today, the clients appreciate this. We have levers now to really drive meaningful change, and we are really becoming the intelligent solutions partner to our clients. So it's a very promising and exciting outlook for the future. I am very happy that you are here today, and now glad to invite our CFO, Andreas Lindback, to then provide some more context on our journey. Welcome, Andreas.
Thank you, Magnus.
Thank you.
Good afternoon, everyone. As Magnus have explained, we have been working the last couple of years to transform Securitas, focusing in on building a really strong position in our technology and solutions, business, and where we are today, number two globally in the technology, the security technology space. We have also been focusing in on digitalizing our business end to end to create a stronger client value proposition, but also create a strong proposition for our people, and at the same time, being able to drive our business in a more transparent and effective way, both operationally as well as financially. This has also paid off when you're looking at our financials.
Today, around one third of our top line is derived from the high-margin technology and solutions business, and as you're looking at the bottom line or the operating result, more than half of the profit that we are generating in Securitas is coming from the technology and solutions part of the business. For those of you who have been following us for many years, you know that pre-pandemic, we had a margin profile that was more stable, 5.1%-5.2% over many years. Here now, as we have been driving the strategy and executed it in a good way, we have also taken a good leap forward, and today, in 2023, we are on a 6.5% company. And we are also coming out of 2023 in a strong way.
We are growing our technology and solutions business high single digits. We have taken a 0.5%, leap in our operating margin compared to 2022. We have been generating strong cash flows, and we have deleveraged and is now meeting our financial target of having a net debt EBITDA less than 3x. To drive this repositioning of Securitas, we have invested materially the last couple of years, both into our transformation programs, the STANLEY acquisition itself, and the STANLEY integration programs. Here, we are now through the peak of the investments in 2023, 2024, we are estimating that our items affecting comparability will reduce materially and land around SEK 550 million than to be compared to the SEK 1.35 billion that we had in 2023.
In 2025 and 2026, there will be some remaining amounts related to the continued cost synergy takeouts, efficiencies, and final roll-outs related to the transformation programs. But the IAC will continue to decrease from the 2024 position as we are moving into 2025 and 2026. So you will see positive impact from reduced IAC beyond 2024 as well. And this will, of course, then support our EPS growth and our cash generation as well going forward. We are also from a financial position perspective, in a much stronger position today compared to just 18 months ago. We acquired STANLEY, and we took out a $3.2 billion short-term bridge facility to make that acquisition. The first step for us was then to make our rights issue of approximately SEK 10 billion.
But thereafter, we have taken out, we have refinanced more than SEK 30 billion in short-term debt with long-term financing. So here we are in a very strong position with very limited additional refinancing to do throughout 2024. So it's more back to business as normal when it comes to our future refinancing activities. Thanks to the strong operating development that we have had, but also the strong cash flow generation, we have also de-leveraged faster than our communicated plans, ending then this year with a net debt to EBITDA of 2.7, actually one year ahead of the communicated plan. And that is also reflected in our credit rating now, where we are now basically back to the same rating as we had pre the STANLEY acquisition.
So back in 2022, we released new financial targets after the STANLEY acquisition, and here we have been executing well, growing our technology and solutions business double-digit, and taking, taking important steps on our journey towards 8%. But I should just also be clear here and say there are no changes to our financial targets, with the exception that we are making one clarification, and that is related to our net debt to EBITDA target, where we're now clarifying that is excluding Items Affecting Comparability. But this is also a thing that will have less importance going forward as we are phasing the IAC programs out. Now, let me take you through how we will achieve our target margin of 8% by the end of 2025.
The first major step for us here is to continue to drive the mix change into the business, into the double-digit margin technology and solutions part of the business. Here, we have a target to grow this part of the business with 8%-10% real sales growth per year. As you know, we've been focusing in the last 18 months to bring STANLEY in a good way, integrating the business, but also taking cost synergies out. Now, as the integration has gone well and we come into the latter phases there, we are now changing focus more into also making sure that we are capturing all the really good commercial opportunities we're having when we are combining STANLEY together with Securitas, and that will, of course, support our growth going forward.
We also announced back, back in, 2022, as an ambition to take out $50 million of cost synergies related to the STANLEY acquisition. Here, the teams have done a really good job, so we actually met this target by the end of 2023. But throughout this period, we have also identified additional cost synergies of around $20 million-$25 million that we are planning to execute throughout 2024 and the first half year of 2025. And these new cost synergies is mainly related to continued consolidation of the facility footprint that STANLEY has and that Securitas have.
It's also related to consolidating our operation center, where we have duplicate structures on the STANLEY and Securitas side, and we have also found additional, additional opportunities to create a more common support service structure across Securitas together with STANLEY. So this will help improving the margin in the technology and solutions business as well. And in combination with the good growth going forward here, we will also see continued cost leverage in the technology and solutions business, which will further support the operating margin development. Secondly, we also have, as Magnus mentioned, a strong focus on increasing the profitability in our Security Services business across all segments, but particularly also focused into Europe. Here, we are driving active portfolio management across the business.
We are also making sure that all business that is coming in is coming in with quality and the right margins, but by continuously also raising the bar for what type of margin we're accepting on any new sales or any new business coming in. Then we also have the transformation programs that are an important enabler for the margin journey as well, where we are enabling stronger end-to-end people and operational processes, improving the transparency and ability to drive strong performance management across the business, and this will support our labor productivity. And here we have a great example on how we have done this already with good benefits in North America that Greg will talk more about later on.
As we are driving the implementation of our transformation programs, we are also creating more harmonized way of working across the business, and particularly also in Europe. This is also creating opportunities for us to be even more efficient on the back office services and the shared services, which will also support the margins for us going forward. Thirdly, we are now in a strong financial position, as I mentioned, with the good deleveraging we have seen. So we are now also planning to restart our M&A activities again, and I will get back to more details here shortly. But I should say, although M&A will contribute positively to our 8% margin target, it is not the key parameter to get there neither.
It is the two most important things is for us to drive our technology and solutions growth and improving the profitability in our Security Services business. Finally, as we have communicated before as well, we are continuing to actively strategically assess all businesses we are having across Securitas to make sure that they are fit with our long-term strategy. Here, we exited Argentina in 2023, and going into 2024, we are continuing to actively assess all different parts of the business to make sure if they should remain in Securitas and or not. And this is also something that will support our margin journey up until the end of 2025. You will hear much more details from Tony, from Henrik, and from Greg here on how they are doing in their segments here throughout the rest of the day.
As we are building stronger profitability across all businesses, we will also increase our cash generation. We are an asset-light business with low CapEx requirements and a net working capital position of around 4%-5% of sales. If you look historically, we have delivered close to 80% operating cash flow in percentage of our operating income, and the ambition going forward is to continue to deliver a strong cash flow at the upper end of our financial range target of 70%-80%. To do this, the critical component for us is our trade receivables. And just to give you a flavor here, our trade receivable position by the end of 2023 was SEK 25 billion.
If you look at our total net working capital position as a company, that was, by the end of 2023, SEK 7 billion. So the trade receivables is by far the biggest part of our working capital. Here, the key drivers is organic growth, which is hampering our cash flow and is also hampering our trade receivables. And secondly, the second most important factor for us is to drive efficiency here, of course, making sure that our average payment terms remains flat or even reduce, and that we are measuring through our Days Sales Outstanding or our DSO, KPI. So that is the individually most important item of our working capital.
Looking at the payables side, here, the majority is related to our employee-related liabilities, and here it is more challenging for us to have a direct positive impact when it comes to cash flow, as we will always pay salary and all salary-related items on time. The employee liabilities will also grow as our business is growing, but not to the same extent as the trade receivables, as the time from service to payment normally is shorter on the employee liability side than on the trade receivables side. In the payables, we also have accounts payable, but it's a much smaller part for us, and as you can see in the other net working capital, these are minor impacts for us.
Here, you for, you, for example, have inventory as well, but it is the employee-related liabilities and the trade receivables which are key to our working capital. Having that said, as we are growing the technology business, inventory and accounts payable will be more relevant over time. So in essence, for us to continue to drive a strong operating cash flow, it is very much for us to focus focusing in on our trade receivables and how we can drive that in an even more efficient way. Our capital expenditures, if you look historically, has been around 2.7% of sales, and that includes then also IFRS 16. And we continue to expect modest CapEx needs with the CapEx to sales that will remain below 3% also the coming years.
If you're looking at the technology business that we have and the security business that we have, that in combination represents around 90% of our total sales. These are business with low CapEx requirements, where we the CapEx that we are investing to is mainly related to the daily operations, and it's items such as our core fleet, it is within the IT space, and also related to premises. If you look into our solutions business, representing around 10% of the total group sales, this is where we have the key growth component of our CapEx. We are offering solutions to our clients where we are combining our different protective services, and in absolute most cases, there is a technology component in those solutions. That technology component, we are investing into our balance sheet and depreciating that over the term of the contract length.
This is a business that we want to grow. It's a double-digit margin business. We also have strong return on capital in our solutions, so that will, of course, generate a higher CapEx needs as we're moving forward. But having that said, we are also having parts of our CapEx that will reduce going forward, and this is then mainly related to our transformation programs. As I mentioned earlier, here we will reduce our items affecting comparability the coming years, but the same also goes on the CapEx side, where we see reduced investments in the transformation programs going forward. And secondly, as we are driving a cloud-first strategy, generally speaking, across the business, that is also reducing the CapEx requirements as we are no longer owning the hardware and software ourselves across the business.
So this will support then a reduction in our CapEx, and that we will remain with the CapEx requirement in Securitas of less than 3% the coming years. Turning then into working capital, and here I should start by saying this is the first time we are presenting this definition of working capital to you, and obviously that is because we want to give you further insights into our working capital dynamics. Here you have some more information in the appendix of the presentation, but we also intend to give additional disclosures related to working capital and cash flows in the upcoming quarterly report as well.
But if we then are looking at the position we are having here and focusing in on first 2023, you can see that we ended the year with a strong working capital position, with the working capital to sales of around 4.5%. So here we are basically back to pre-COVID-19 levels. And that is then obviously also despite that we have been growing our technology part of the business strongly, also including the STANLEY acquisition since then. And the technology part of the business has a higher working capital requirement and is running at around 20% of net working capital of sales today. So here we have done a good job, both on the technology side, but also on the Security Services side, to trim the working capital down over the last years to mitigate that business mix change impact.
I should say as well, Q4 had a strong cash flow. We had a very strong working capital position, so we, we may see some hangover of that going into the first quarter, but we are still in a good position to deliver a strong full year 2024 cash flow. Now, if we then turn to how our net working capital position will be changed by a change of business mix into solutions and technology. First, I think it's important here, we are talking about technology and solutions. From a working capital perspective, the solutions part of the business, which is then 10% of the totality, has a similar working capital profile to the guarding business.
The technology part of the business, which represents then the 20% of the business, has a higher working capital requirement of around 20% to sales. That is because this is a project-based business where we are designing, integrating, and installing, technology on the client sites, and are then invoicing that over milestones throughout the projects. Here, as I said, 20, this is 20% of the business. It also has a net working capital to sales of 20%. If we assume that we will grow this business the coming three years with 8% per year, while keeping the remaining part of the business steady, this will mean that we will increase our group net working capital with around 0.5%. There is a negative impact here, but it's also very much manageable.
Because at the same time, we're also driving important initiatives on continuing to trim our general working capital position down. And here, the first priority for us is to make sure that we are integrating STANLEY well, also from a net working capital and cash flow perspective. And as you know, in Q3, we communicated we had some challenges here, and we are working on improving this situation over the coming quarters. We have also, in 2023, introduced cash flow as part of all management's incentives, and this is something that we are continuing to fine-tune also into 2024. But as I mentioned, the key component of our working capital are the trade receivables, and here we are focusing in on finding areas where we can improve the payment terms to our clients.
But we have also set out clear escalation procedures across the whole business, related to longer payment terms that then needs to be approved by either the divisions or, in the end, by myself. And finally, we are also working to improve our accounts payable side, and here we have now introduced minimum payment terms on the supplier side, and are working to make sure that that is also effectively implemented. So as we are driving these initiatives through, this will also help mitigating the negative impact that we will see from the continued business mix change and keep our net working capital position low, also going forward. So what does good look like going forward?
Well, as I said, we have the ambition to continue to deliver an operating cash flow at the upper end of our financial target range of 70%-80%. But we also see that we will have a strength and free cash flow generation in the coming years, and that is then mainly driven by the reduction of investments into our IAC programs, where we will invest less, and that will obviously then fall bottom line into our free cash flow instead. The second part of this is around our financial net, and here over time, as we are focusing in on reducing our debt more, and also as the general interest rate environment is improving, we will also start to see improvements on the related to our free cash flow conversation, also from the finance net.
Now, having that said, in 2024, related to the financial net, we estimated the cash flow, the cash flow out from this will be around SEK 2.2 billion, which is a bit higher than in 2023, when it was SEK 1.9 billion. And that is then mainly related to timing impact of our interest rate payments as we are paying our bonds and our term loans in arrears... When it comes to capital allocation, our number one priority here is to remain with a solid leverage position, where our net debt to EBITDA remain below 3x. We want to continue to invest into our business, organically, and as I mentioned earlier, the key growth component into our CapEx is our investments into the solutions business.
On the dividend side, this remains an important area for us. We are now coming out of a period with COVID-19 and the STANLEY acquisition, where we have been a bit more prudent on the dividend side. But going forward, we foresee over time that we will have progressive increases on the dividends to ensure that we are remaining within our financial policy of 50%-60% of net income. As we're executing well on the strategy and are meeting our financial targets, we will also create headroom for continued M&A activities.
And here we are in an excellent position to do value accretive bolt-on acquisitions in the technology and solutions space mainly, where we will focus in on important geographical white spots, but also within the technology business to increase our share of RMR by finding good bolt-on acquisitions within the monitoring and maintenance business, and we also want to continue to grow our package solutions business. So in this area, we also have good, good scalability in our business, and we have good opportunities to make really value accretive acquisitions as synergy opportunities are also very good. We will start this work now. It normally takes 6-12 months before you will see any impact. But as you also know, we have strong experience from M&A and the integration process. We will be process-focused.
We will also be disciplined, as Magnus mentioned before, and all acquisitions in the end needs to generate a return higher than our WACC immediately, but also supporting our return on capital employed in the near term. If we generate excess cash outside of this, we will continue then to deleverage our balance sheet further below the three times or over time consider other shareholder return options available to us. Moving then to look at our the maturity profile and financial net. Here, starting with the maturity profile, we in February issued a EUR 500 million Euro bond in the Euro bond market at 115 basis points margin, replacing the majority of the SEK 9 billion of maturing debt that we had in 2024.
The new issue premium for that bond that we did was negative for the first time in Securitas, really underlying the strength that we are having in the credit markets. This puts us now in a strong position with around SEK 4 billion of refinancing to do this year, but also limited amounts in 2025. So as I mentioned earlier, we're in a very good position now, and it's very much business as usual going forward. Turning to the financial net. Here in 2023, we had a financial net, excluding IAS 29 and FX gains, of around SEK 2.4 billion, and we estimate the financial net from a P&L perspective in 2024, to land at approximately the same levels.
We will have some negative impact from replacing around SEK 3.5 billion of fixed debt this year. We did a major part of that in the first quarter. But we also see positive impact from the renegotiation we did in 2023, as we got the margins down on the term loan that we already have in our debt portfolio. And towards the end of the year, we will also then continue to reduce our debt levels, and the general interest rates are expected to come down as well, which will further support then, making us land at the SEK 2.4 billion for the full year.
So to summarize, we have been repositioning Securitas over the last year and strengthened the margin profile of us as a company, from being a 5% company for many years, to today being a 6.5% company. But we also have a clear roadmap on how we're going to take the next step on that journey to be at 8% by the end of 2025, but also to reach our longer term ambition of becoming a 10% company. This will, of course, support our EPS growth going forward, and EPS growth will also be supported by the reduced IAC programs over the coming years, and over time also be further supported by a reduced interest cost as the general interest rate environment improves.
The increased profitability will also be continuously converted into strong cash flow as we continue to be an asset-light business, and we are continuing to trim our working capital to mitigate the business mix change that we are seeing through technology. And as we are already now meeting our leverage target of less than three times, this creates strong opportunity for us to invest both organically into the business and the strategy, but also in, into M&A to further support our journey moving forward. But it will also give good opportunity for us to continue to have attractive dividend to our shareholders, and all of this, obviously, with a strong focus on, on creating strong shareholder value the coming years. So with that, thanks a lot for, for listening, and now I will welcome our leader for our global technology business, Tony, to the scene.
Great. Thank you, Andreas. It's a real pleasure to get to be here to speak about Securitas Technology and the journey we've been on since we closed the STANLEY Security acquisition in July of 2022, and how we're being accretive towards our journey towards 8% overall. So over the last 18 months, we've been creating a scalable global platform in a very attractive market that has a healthy growth rate and that's accretive to our 8% journey. Today, I'm gonna talk about two of those pillars. The first element I'll talk about is: what have we created? What is Securitas Technology? What's our value proposition? How are we differentiated in the marketplace? And how do we see the integration with STANLEY actually being accretive as we move forward, also in commercial synergies in the business?
The second piece, which I'll spend a little less time on, is obviously to build a little bit upon what Andreas has shared around the opportunity to have strong value creation with highly accretive bolt-on acquisitions now that we've built a scalable global platform. So what is this global scalable platform that we have built? I think if we look at the numbers, you'll see that we've built a market leader with some strong leading capabilities that differentiate us in the marketplace. In 2023, the business was SEK 34 billion. That gives us a number two global market position in the electronic security space. We have a healthy margin, double digits, operating at approximately 11% across the globe. We have over 1 million client sites. Now, think about that for a minute with what Magnus said earlier today.
1 million client sites means that we have installed, serviced, and are monitoring and providing remote services to tens of millions of devices. So as we think about the future opportunities before us, as we think about this IP-connected world, as Magnus spoke about, there's real opportunity for leverage in the future. You'll hear a little bit about that from Martin later today. But certainly, as we look to the future, as we build this business, there are other more enormous opportunities for us. Now, we are in over 40 markets around the globe where we can provide these capabilities. However, we have a strategic focus on 18. In those 18 strategic markets, we have a top three market position in 12 of those markets, which means we're either number one, number two, or number three in those 12 markets.
In the remaining six strategic markets, we have a top five market position. So you can see that we have the scale, the density to create market relevance for our types of field service-based businesses. If we look at our revenue mix, we have a healthy revenue mix. 44% of the revenue is in those recurring services, as Andreas was speaking about. The other 56% is in our installation project business. Now, what that does for us is it gives us enough revenue for a stable margin profile and also an opportunity for organic growth. We also are not totally dependent on one geography. We are spread across the world with 50% of the business in North America, 41% of the business in Europe, and the remainder across the rest of the regions. Apologize for that.
So if we think about the numbers, the numbers really are telling us that we have a strong position globally, and we've built a scalable global platform. But that's only part of the equation. The second half is: what is the value proposition? How have we strengthened our offering? How have we created truly a global leader with dynamic offerings as we think about our growth potential? So we put together a short video that I almost started to play for you already, that basically is gonna share for you what is technology? So when you think about electronic security, maybe many of you in this audience aren't quite sure what I'm talking about.
So I want to share with you what is the industry that we're actually competing in, what is our differentiation in the market, and certainly, how are we now in a position to win with our clients? Now, in this video, you're gonna see how do we engineer, design, and create a consultative approach to differentiate ourselves in the market. How do we then actually deploy and actually install and deliver on those projects in the field through our installation capabilities? How do we then create a long-standing relationship with our clients around the support services that come after those installations are complete? So with our maintenance and our monitoring capabilities and our remote services and our technical support, to create a stickiness with your clients and actually generate that high level of recurring revenue as part of your base revenue streams with the business.
So as I show you this video, I think you're gonna see how we see electronic security differently.
The measure of success is not a destination, it's a journey. In July 2022, a new journey began to reinvent the electronic security industry when Securitas Electronic Security and STANLEY Security joined together to become Securitas Technology, a world-leading provider of integrated security systems. With over 80 years of experience, an increased global footprint, expanded capabilities, and even greater growth potential. We see a different world, turning complexity into simplicity, empowering clients to have more clarity and more control over their business operations. From single-site businesses to multi-site global enterprises, we support clients across a full range of verticals, from financial and education to retail and transportation. We serve them where they need us. Whether it's iconic sites such as the World Trade Center, the Sydney Opera House, or the United Nations, tens of thousands of clients rely on us every day.
The security technology industry has thousands of one-off service companies, thousands of products, and hundreds of disparate product manufacturers to choose from, with no one-size-fits-all option. But we bring simplicity to a complex security environment. We combine the resources, scale, and reliability of a global brand with the accountability, responsiveness, and personal touch of a local partner. We see client engagement differently, taking a consultative approach, working hand in hand with clients to learn about their business and unique security needs in order to deliver the right solutions. With deep electronic security expertise and experience, as well as access to the world's leading security product manufacturers, innovators, and technologists, we are a trusted advisor and partner to clients... From project evaluation to system design and engineering, to project implementation, our account management teams are able to support clients wherever they are on their security technology journey. We see innovation differently.
Our expansive knowledge of security technology, products, systems, integration, and design applications is the foundation of how we innovate, creating our offerings around the specific security requirements of each client. In our design and engineering phase, we leverage our complete tech stack, including virtual and augmented reality, allowing clients to experience their future security system of tomorrow, today. Whether they need intrusion, video, access control, fire and life safety, electronic article surveillance, system integration, or recurring services such as alarm monitoring, test inspections, and remote services, we are better positioned to scale and adapt with the client needs of today to meet the client needs of tomorrow. Our technology evaluation labs and engineering centers of excellence are two foundational components of our strategy.
Our technology evaluation labs allow us to fully research, test, and vet new solutions before introducing them into our portfolio, so clients are able to confidently make their investment decisions. Our Client Engagement Center provides clients the opportunity to have a hands-on experience with industry-leading, cutting-edge security technology. Our engineering centers of excellence are at the heart of our quality and consistency guiding principles as we design, configure, engineer, program, prefabricate, and test the client solutions in-house to ensure the highest quality and standards in our delivered systems and services. We see installation differently. The depth and breadth of our client solutions are surpassed only by the proficiency of our installation technicians. Our technicians participate in our formal continuing education training and certification programs in order to promptly address and resolve any issues that may arise.
Our global workforce of technicians, engineers, and program managers bring our clients' project plan to life. Our meticulously crafted security systems are designed to integrate, adapt, grow, and expand with the business. From project initiation to project completion, our teams are there every step of the way to manage delivery of a client security system. Our commitment to client support doesn't end there. We see support services differently. With our global presence, we continue to protect, connect, and optimize client businesses through our ongoing support services 24/7. We offer our clients more than just standard repair service through the benefits of our comprehensive preventative maintenance program, which focuses on keeping security systems performing at optimal levels. We operate the industry's leading alarm monitoring centers, built on best-in-class certified IT infrastructure and staffed by highly experienced, trained, and certified monitoring specialists and technologists.
We offer the widest spectrum of monitoring, hosted, managed cloud, and advanced technical services, which adapt and scale with the changing needs of clients. Our SecureStat HQ digital client platform is leading the security industry by empowering clients to view, measure, and control their entire security program smarter, faster from anywhere. We see electronic security differently. By delivering scalable, end-to-end electronic security solutions, enriched with over 80 years of protecting people, places, and assets, we help businesses transform through the power of safe. As a global partner with sole focus on security, we are not just a global leader in the security industry, we are reshaping it with our clients. We see a different world, Securitas Technology.
So hopefully that video gave you just a glimpse into what is electronic security and our value proposition, and really now our position in the market and the strength of our offering. So how did we get here? Well, in July 2022, we actually commenced and finished the STANLEY Security acquisition. Through the integration of STANLEY, through a very disciplined, structured approach and a governance model, what we call the Creation Management Office, we've been able to realize the benefits of bringing the two businesses together in what you just saw in that video and what I spoke about in the numbers earlier. Now, this process allows us to manage thousands of action items that we have to manage in order to hit the timelines and the milestones that we want to get the outcomes from the integration.
That's allowed us to actually launch the brand, to exit and carve out from STANLEY Black & Decker, to actually then be able to exit the transition services agreement so that we could be unencumbered, unentangled, and no longer dependent on STANLEY to provide any of those services. Through that process, we've been able to realize the $50 million of commercial cost synergies that we actually spoke about earlier, as Andreas and Magnus both referenced. Now, we're also in a good spot by using that disciplined approach. We are substantially complete in North America with the integration, with some remaining system integration work. But our real focus in 2024 is on completing the integration activities in Europe, where we have some more heavy lifting as we bring our people, processes, and systems together, which we will be substantially complete by the end of 2024.
That then allows us to really shift our focus to the primary, you know, outcome here, which is the commercial synergy opportunities as we look to grow the business at a rate faster than the market. You'll hear some of that from me here in a few minutes, but you also will hear from that from both Greg and Henrik as we think about the One Securitas offering and our solutions opportunities across the market as well. Now, in the remaining integration work, we've also identified what we believe to be another SEK 20 million-SEK 25 million worth of cost synergies that we will realize throughout 2024 and the first half of 2025. Now, what are some of the outcomes that we're actually trying to deliver from the integration?
Let's use North America as an example, because that's where we're substantially complete, and that's where we have brought a lot of our people, processes, and systems together as one organization. If you think about what matters, as you saw in the video, and what you can see on the left-hand side of this slide, which is why people choose a technology provider, what matters to our clients? Strengthening our value proposition is important as outcomes from the integration. In the service and maintenance piece of the business, we've been able to improve our service response by bringing everyone together as one organization on one platform, one automation tool, and a fully digitized workforce in North America. That's enabled us to also drive better productivity gains in the business as well. So think about it as an example. We had a technician in downtown Chicago.
That technician used to have to drive an hour, maybe two hours, depending on traffic, to get across Chicago to perform a service call in the western suburbs. Now, with having a technician from STANLEY who has those same skills and those certifications, we don't have to have that technician making that drive. So not only does it improve productivity, it makes our associates happier because they have less windshield time, and it also improves our sustainability efforts, as Frida and Sune will talk about later today. So contributing really is a win, win, win for the business. The other piece is we are where our clients are now. So if you think about our coverage as we combine the two businesses, our coverage is very strong, which matters to our clients.
In the illustration, you can see in the middle, illustration on this slide, that's actually one of our top clients in North America, where we have done a heat map of their locations with where our field operations personnel are located. And in that respect, you can see that actually 99% of the locations of our clients are within an hour or less of our technicians. That's a differentiator. That builds our value proposition with our clients, especially with global and national clients. And finally, in the alarm monitoring response, we've improved our response times while driving down overtime as a result of combining our network of monitoring centers in North America.
Now, the team has done a great job there because we're now leveraging the legacy STANLEY platform, and we've been able to do load balancing, which has allowed us to have a win for our clients by being improved in our metrics and at the same time is driving a better optimized business. The other reason this matters for our clients is because this is why they make purchasing decisions. This is why they choose their technology provider. The top five reasons that we've seen over our surveys of the clients of why they choose their provider and technology is around these interactions with our clients. The first is in our service capabilities.
You also can see the engineering design, that integration of our opportunities to be able to bring those solutions together for them, to then deliver that in the installation process, and finally, to service them in a good way in the monitoring and the ongoing support services. All of those interactions create our services reputation in the space, which is the number two reason people make purchasing decisions in technology. So these integration outcomes are very important in finding those leverage points as we separate and bring the two businesses together. Now, that's important because you want a good reputation and a sizable, growing market that has an accretive margin to our objectives as Securitas. The total addressable market for electronic security globally in the commercial space is over $70 billion. Now, we have access with our presence to about 60% of that market opportunity.
That market is growing at 4%-5% on an annualized basis. We believe with the value proposition that I just shared with you, with our market presence and our capabilities, as well as the integration outcomes in the commercial synergies, that we have an opportunity to grow it faster than the market rate. And finally, to complement those organic growth efforts, we have the opportunity for selective M&A with this attractive, scalable global platform that we now have to do bolt-on acquisitions with a meaningful accretion to our operating result. So what are our clients saying? Well, our clients are saying this value proposition is hitting the mark and helping drive commercial synergy opportunities, like I mentioned, which Greg and Henrik will also talk about, and Brian will also speak to.
With Microsoft, we have a very strong partnership with them on the guarding services side and did some technology work. But now, with the strength of the combined business with STANLEY and our legacy Securitas technology business, we have been able to actually expand our share of wallet with them on the technology front. With Digital Realty, one of the leaders in data centers and infrastructure across the globe, a strong STANLEY client, who now, seeing the strength of our offering, is actually willing to give us more opportunities on the technology front, in addition to now the benefits of being part of the Securitas portfolio, opening the opportunity for the other protective services where we can introduce guarding and other Securitas services. In CVS, one of the world's largest healthcare providers, with over 9,000 locations, we had some technology in our legacy business.
We had some of the STANLEY Security with them, but now seeing the strength of the combined offering, now looking for additional opportunities with them in the future as they see the benefit of the combined business. So we're creating a scalable global platform in an attractive, growing market. A market that has an accretive margin profile to help us on our 8% journey. We're a market leader today with leading capabilities, as you've seen. The substantially complete integration work will be done in, by 2024, allowing us to truly put our full focus on the commercial synergy opportunities and the growth of the business going forward past 2024 and 2025. And therefore, we will have, continue to have a very differentiated client experience, which will help accelerate that growth in that profile.
With that, talking about our clients, it's a good time to turn this over to Brian, who's the President of our Global Clients business.
Thank you, Tony. Yeah, as I think already promised by Magnus, I am delighted today to give you a deeper insight in the impact, the positive impact, our Global Clients business have brought to this overall Securitas group. Since we took the decision back in 2019, as most of you hopefully remember, to further invest in our structure to so support our fast-growing global clients, but also to really build a position as a global leading partner to these clients. So what we didn't know back in 2019, that we were entering into a pandemic.
But what we believe happened during that pandemic that we can see in the engagement with a lot of these global clients, a lot of them saw it as an eye-opener, that they needed to strengthen their global capability to react to these kind of incidents and to find partnerships that help them to react faster than they have been able to do during that, crisis. So when you start doing that as a global organization, you start looking, "Who can, who can be my partner?" And if you do that, what you then do is you go a little bit deeper in looking into these partnerships. From the decision back in 2019, we felt extremely well positioned to support that journey with these clients.
And on top of that, they also, of course, look at how, what company are you a company that we can count on in 10 years from now? And looking into your values. And all of that together brought us in a pole position to, over this period, to become the leading partner to a growing number of global organizations around the world. That growth and that expansion primarily happened in what we call the Security Services business, the guarding, because then we had the scale, and we had the local strength to support that. But what we then see now happening, post the STANLEY acquisition, based on that very, very strong client base, as Magnus also touched on, we are now seeing an increasing engagement on the technology side.
And what we did was, even before we did the STANLEY acquisition, we discussed how can we leverage, how can we execute on implementing and introducing technology to these clients at speed? And but what we did there, we established the Global Clients Technology Program. Not distracted from the transformation and integration program, but really just being out there with the clients and engaging and just understanding their needs. So that gave us the first year, 2023, post the STANLEY acquisition, a very strong growth, as you see here. Still coming from a low level, if you look at our Global Clients business, that has grown as a part of group sales, but the share of technology and solutions is still on a pretty low level.
But at least we saw in 2023, a very, very strong first year of that introduction, and I will share in a bit what that also brings of real numbers. Because if we look into the performance indicators here, the overall Global Clients business have seen a significant double-digit growth, primarily, as I said, in the Security Services part. But what is exciting for us to see is, and I think Magnus touched on that also, the margin improvement in that business have been quite significant. And if you look at a business that is still 95% guarding, we see the willingness to pay a premium for global standardization, consistency, and compliance being out there. And that's what we have benefited from since 2019. And also, I think, Magnus, you also touched on that trend from input to more output, outcome-based partnerships.
That's what we are seeing. So that combination has given us a very, very strong development with these clients. And look at the figures from 2023, what we call the first year, the year one of the new Securitas, the record year for the Global Clients business, growing almost a double of our normal growth in that business, and also improving our margins quite significantly more than we have seen in the previous years, and also really, really strong client retention. And if you look at the margin improvements last year, 50% of that, in fact, came from the growth we had in the technology introduction to these clients. But also when we drive that premium, as you see as an example here, we're also reinvesting some of that into specialization into our business.
And one of the fastest growing, if not the fastest growing client segment within the global clients, have been the tech and data center business. There you can see we have just announced a few weeks ago that we are going to reinvest some of that premium that we gain from these clients into further specializing our security service offering and our officers' skill set into a new training program on the data center side. Simply to prepare for the next level of huge growth we expect from that client segment, based on the whole AI drive we see from that market. But enough about these overall figures.
As I think it was promised, I'm really proud to share some of these great stories, and we call them partnerships, because it has moved from client-vendor to real partnerships with some of these clients. And if you look at Microsoft, what's mentioned earlier by Tony, the program we have developed on the data center side, it's fair to say this is the global leading program in the security and safety space right now, in the data center space. We extended that contract by five years. It was announced. We did a mutual press release last year, and simply to support their expansion. But also now, again, as Tony mentioned, we're now introducing technology into that partnership.
On Amazon, on another segment within the global clients, the corporate offices, we started the journey with Amazon 5-six years ago. Really, normally, what we do, you don't develop these global programs with these clients in one or two years. It normally take you five-plus years to get there, and you have to prove yourself every single day. But reality is, we started in a few countries with Amazon, and then we expanded into other regions. Last year, we were awarded, as you see here, the global business of 52 countries, including some of our certified partner countries. So we are managing the global program now. And again, in the corporate office space, this is, to our knowledge, the largest global corporate program you will find in the industry. So these are strong evidence that we're building global leading capabilities here.
And what we do with the Amazon account is even more exciting because we have together decided that we want to transform and develop this, what we have maybe for many years called security officers into true security and safety specialists. There might be less people, but much higher skilled people in the future. And the first year of that contract have been significant successful for both parties. So we are now seeing an increased capability and a much higher employee retention on this contract, to the joy of both of our organizations. So a lot of knowledge there that we are drilling down to other clients within these verticals. I'll get back to the IBM story. LinkedIn, I want to mention, because LinkedIn was the first pilot client for us when we rolled out global digitalization.
At that time, they also, during COVID, asked us to build a health and safety program. In that journey with that client and that partnership, we have developed a lot of learnings and insights from rolling out digital operation for both security and safety. Again, a learning we will use for many other clients. Finally, I want to mention Mastercard here. Fully digitalized security program, and there you heard before the risk intelligence services we are developing, and Martin will touch on that more. That we combine our digital rollout with more intelligence, including intelligence officers, to really drive intelligence-led security development. All in all, very proud to share these client examples, but shouldn't we just hear from one of them?
Hi, I'm Royce Curtin, Vice President and Chief Security Officer for IBM Corporation. Been asked to share a few thoughts with respect to our working relationship with Securitas, which is both easy and an absolute pleasure. So approximately five years ago, when I joined the company, one of the first things we did is asked to meet with two of our biggest suppliers, providing Security Services globally. So I had the opportunity to sit down with Securitas's leadership team here at our office in New York and also with its principal competitor. And I can tell you from the very first meeting with Securitas, it was absolutely clear the level of professionalism and expertise, strategic and visionary thinking, that they were well underway with respect to deploying, shifting from guard-based services to security solutions as a service.
I specifically remember after meeting with both teams, and they had departed the building, meeting with our internal team and specifically saying, "We need to be moving towards a global contract with Securitas." I think one of Securitas's greatest strengths, if not its greatest strength, is its people. It was absolutely clear the level of professionalism and expertise, strategic and visionary thinking. They're relentlessly focused on client success and support. Innovate, be bold, be agile, be dynamic, and those are words that I would use to describe Securitas as a company.
So that means the credibility through these strong references is what we are standing on, and with our enhanced technology and digital capabilities, well, this is just the beginning. The accelerated growth that we have seen starting in 2023, we expect, why shouldn't we continue that going forward? We, we are seeing the first nice results of that engagement, but I can't see any reason why we shouldn't be able to contribute very heavily from the global clients organization into the short-term journey on the 8% and beyond. So with that, I think I will hand over to you again, Micaela.
Yes, thank you.
Thank you.
So we are now having our first Q&A session for the day, and I would like to ask my colleagues, the first speakers of the day, to come up on stage and join me here. We will be taking questions from the audience and online here, and if you have a question here in the audience, please raise your hand, and you will be handed a microphone, so that everyone can hear the question. So there, Johan Eliason here, Kepler Cheuvreux. If you raise your hand even further, yeah.
Yeah. Hi, thank you very much for taking my questions. I was wondering a little bit about Andreas' assumptions when you discussed the topic of network and capital developments, and you highlight that technology has a higher share. But one thing with technology is that the growth target you have is for technology and solutions, and historically, solutions have been growing faster than technology organically, and I assume that this is also the idea going forward. So wouldn't sort of a faster-growing solutions business with a network and capital tie-up more in line with the traditional guarding business, sort of compensate for the network and capital related to the technology business?
That is correct as well. I mean, we have a target of 8%-10% on our technology and solution sites. As Tony explained earlier, the market in technology is growing 4%-5%. We wanna grow faster than that market, and then we can also do some M&A activities on that side. But I also agree with what you're saying. On the solutions side, we have been growing double-digit faster, so from that perspective, it would compensate. Here, when it comes to the working capital, this was just to give you a simple example of where the highest working capital requirement business, how that would impact keeping everything else stable, which is a very simplified picture. So yes, you also have a point there, Johan, for sure. I agree.
Our next question from the audience. Yes, [Karl-Johan Bonnevier] here, just in right in front of...
Yes, good afternoon. Magnus, you introduced a new box in the bridge to 8%, this, what you call it, strategic assessments. Could you give us some idea, if you take the SEK 157 billion of revenue you had last year, how much would you think fits into that box?
Yeah, so it's important. I mean, if you look at the assessments that we have made and what we've actually exited, the important thing here is that everything that we have in the portfolio has to fit and also support our target picture. It's been fairly limited when you're looking at the 14 markets that we referenced. The important thing here is that we are assessing all parts of the business, and part of that is obviously near-term performance, but it's also then the longer-term opportunity that we have in terms of the margin profile.
We don't break out the exact numbers, but I felt that it's important that we are transparent in terms of saying we continue to drive that assessment because it is an important part in terms of creating a stronger, more attractive profile of the company over time.
When you look at the even longer target of 10%+, what kind of size of company would you consider that being compared to the current size of the company in revenues?
Yeah, so, I mean, when you're looking at Securitas, we are expecting that we're gonna have good EPS growth. We're expecting that we're gonna grow on the totality, in a meaningful way, but then with a significantly better and a sharper margin profile.
If I just may also add a question for Andreas to follow on, on Johan's talk here. If you look at the net working capital headwind and the CapEx headwind from technology and compare it from the return perspective to, to the growth in the area, how, how do you see that equation for the moment?
First of all, I just wanna make clear, technology on the CapEx side, technologies have a low requirement, just so we have that clear. It's rather on the solution side of things. Now, on the technology side, obviously much higher margins, and that is something that we are continuing to improve over time, as Tony has been through as well. And that will obviously then, together with strong and trimmed working capital position in the technology business, also improve the return on capital in that business, going forward. So as we're thinking about return on capital employed, it is really a combination of improved profitability, but also making sure that we are structurally taking down that working capital.
I didn't discuss that too much, but if you look into the technology business working capital, it has improved over the last years, and I believe we also have continued opportunities to improve the working capital position in the technology business. It's one of those parts where we have some areas across the business with very strong working capital management in technology and some with less. And here, as part as the integration is finalizing, we can start that work on sharing the best practices across the group. So there is a good opportunity also to continue to improve the return on capital employed in technology business.
Good to hear. Thank you.
I'll take, okay, Neil Tyler there from Redburn. Mm-hmm.
Yeah, thank you. I've got a few actually, but I'll start with the boring financial one, the margin. The 150 basis points incremental improvement that you're still targeting, obviously, you know, similar to the early question, some of that is through M&A, some of that is through sort of portfolio rationalization. Is it fair to assume that, I mean, you said it was the smaller component, but with, you know, on an organic basis, there's still at least sort of a hundred or so basis points to think about from the other components of the bridge? That's the first question, sort of leading you into, hopefully giving me a bit of a quantification there.
Second one, Magnus, on the leadership sort of overhaul to, you know, to use my term, how have you attracted the right people, and from where? Have they been from inside... You said some was from inside the company, some was from outside. You know, from those that were outside, sort of, can you give us a bit of the early pitch before things got underway, and, you know, and how you were able to do that? And then, probably one for Tony. On the shift to cloud-based storage that you've been targeting, is there any impediment to large-scale cloud-based storage? And does that... It reduces CapEx, but, you know, does there, on the other side of that, increase the OpEx requirement?
So, shall we start with the real exciting question?
Go ahead, Magnus.
I think when you're looking at our bridge from the 6.5% to the 8%, you see the different boxes that we have laid out. They are, of course, indicative, but it also gives you a sense where the margin journey is going to come from. And as I mentioned, the M&A piece, it's something we want to start up. We believe we can really drive value creative M&A going forward, but it's a minor part on the 6.5%-8% journey. But we also have to remember, there is also a journey beyond that as well. And then, as you can see there, both the technology and solutions driving the mix change and improved margins in the combination with the Security Services, those are the two key components.
Without breaking it down exactly in terms of basis points, those are the two, two biggest factors for us to achieve that 8%, so.
Coming to the leadership question, now I'm glad you asked it, because like I said, I think this is the most important factor that will determine the kind of the mid and the long-term success, and how are we able to scale really good leadership. And the interesting thing, when we have an opportunity in terms of leadership positions, it is a very significant change that we are driving from mostly selling guarding hours to more of an output-based type of business model, but also then with significant specialized strength across technology, guarding services, and some of the other areas. And when you look at that, and I think also the culture of Securitas, we do have a decentralized business model, where we want people to take real responsibility, accountability, close to our clients, close to our people.
That, in combination also with our purpose in terms of working with security, working with safety, I would say that we have been pleasantly surprised any time that we are talking to an external candidate. Some people are saying at the beginning, "Oh, security, I'm maybe not that interested." But when they actually sit down at the table, and when we have an opportunity to talk about the journey that we are on and the role that we play in society, we're attracting some really, really good talent. And to your question there, we have... I would say it's a fairly equal mix in terms of country leaders across Europe, for example, and Henrik can comment on that in the next Q&A session.
Almost half, I would say, of the leaders that we have promoted in the last couple of years are actually external hires, the other half are internal promotions. But we had to change quite a lot, so the majority, we've actually changed, so that they are also the right profile and the right leaders to lead Securitas into the new phase. The biggest part, where I also feel really, really good is when we talk about digital in terms of the scalable, data-driven innovation that we are driving. We're also attracting a lot of really, really strong talent, and that's mostly then younger people compared to many of the rest of us, but with very sharp digital interest. But who are also then seeing an opportunity in Securitas to be part of something which is becoming really advanced, but also really meaningful in society.
Biggest challenge from my perspective is probably. It's not to say, do we have good examples? We have plenty of good examples in terms of leadership at all levels, but it's really to drive it at scale, and that is where I spend a lot of time. I think all of us in the team are spending a lot of time in terms of really making that change happen, because that is what we need to also make sure that we're really accelerating on the journey in the years to come.
May I make one comment on that?
Yes, one comment, and then we go on to Tony.
Yeah.
I think I shared some of the fantastic partnerships we're developing with the global leading organizations. And to be part of these programs is pretty exciting for most people in our industry. So we see we are in a great position to attract the best leaders in this business.
So to answer your question on cloud, so if you look at it from a client perspective, we're continuing to see a greater adoption of cloud services, as you would expect, with proliferation of IP-enabled devices. On the client side, those that are driving their purchases, they're obviously, they're moving that to OpEx versus having a CapEx investment. For us, as you think about our investment in kind of enabling that service, it enables us to also-
... move in OpEx, but when you do that, think about this: when you sell cloud services, you're selling at a higher recurring revenue rate, right? So it's a higher margin mix for the business. So for us, we find those are very accretive opportunities for us.
Thank you. I will take a question now, from the web, that is from Viktor Lindeberg, from Carnegie, and he asks, "The 8% EBITDA margin by year-end 2025, is that very back-end loaded or more linear from current 6.5 level?
Yeah, thank you, Victor. That plan, it is obviously 150 basis points compared to where we finished in the full year 2023. Our plan and our ambition is that we drive quite significant improvement also in 2024. So I wouldn't say that it's that back-end heavy, but we need to drive quite a lot of progress in the coming 12 months.
Do we have another question from the audience? Yes, Stefan Knutsson there, ABG.
Hi. Really interesting update on the global clients. I mean, the revenue mix is improving, but still lagging behind the rest of the group. How large of a potential do you see there?
I think if you look at the first year experience, this was the first year where we really had the capabilities to scale a global technology solutions with these clients. And as I also mentioned during the presentation, it takes time to develop. Normally, how you work with these clients is to prove, to do pilots, and then scale. So now we have the scalability, so I believe we have a huge potential to keep that growth over the coming years. But I can't mention a specific number, but I'm very excited about the client feedback on these capabilities, and but now we need to deliver, right?
This is the most important thing for us to deliver and prove that we can scale, and we're also quite transparent with the clients that, as Tony said, we don't have these capabilities in the whole of the world right now, but we are scaling in the markets where we feel comfortable we can deliver, and then we go from there.
I can share that. I mean, Tony joined us with the Diebold acquisition in 2016. If I look at I mean, the strategy in terms of focusing on global clients, we really doubled down on that in 2018, 2019. It wasn't really until the STANLEY acquisition that most of the clients started to say, "Wow, now we really understand you are seriously committed," and that means that we have a real opportunity to be a strong partner in technology for the future, essentially. So I would say that the STANLEY acquisition, even though we actually felt that we had pretty good capabilities in many markets, to get that message across with the real impact wasn't that easy.
But with STANLEY, it was almost like many of the clients started to call us and said, "Now we need to sit down and talk, because we have a need. Technology is becoming more complex. We need scalability. We need to have oversight in terms of how we drive our programs. We wanna have a long-term, committed partner, and we know that Securitas is that type of a company." So, I think, like, like Brian said, there is very, very significant opportunity. And this is obviously for the global clients, but we should also remember, a lot of the global clients will have a large guarding need. If you're going down to the kind of the large national segment, if you go into the mid-size segment, et cetera, everyone needs technology.
And the pace of change in terms of technology and the opportunities in terms of what you can do, they're just improving, right? So there is very, very significant opportunity, and those are obviously the main reasons why we also decided to do an acquisition of the size and also the complexity that STANLEY was. But the good thing now, now we're really starting to get this integrated, the capability is there. So I think now, for us, it's more a matter of also really leveraging that in a strong way in our client partnerships.
By that, we will now take a break and have an approximate 15-minute coffee break, and we will be back here and start, or continue the Investor Day again at 4:05 P.M. See you again at 4:05 P.M.
Can everyone take their seats, please? We're about to start again. Take your seats, please. Welcome back to part two of our Investor Day, 2024. I'm happy to introduce to you now Greg Anderson, who is leading our North American business. Greg, the stage is yours.
Excellent. There's nothing like coming to the stage after a break. I'm happy to be here. If I were to ask you to write down one thing or one key takeaway from the presentation that I'm about to give you, it would be this: that over the last few years, through the work of transformation, optimization, redefining the capabilities, and really optimizing those, working to elevate what we do in terms of service delivery with our clients and our value proposition, and now the acquisition that we have with STANLEY. North America, Securitas North America, is positioned like no other competitor in North America to deliver profitable growth at scale. There is no competitor, large or small, in North America today, that has our capabilities, the modern system, and fully integrated end-to-end offering that we can bring to the market today.
So today I'm gonna talk to you about how we've developed this market-leading position, and more importantly, how we're gonna drive and deliver from that. Now, as Andreas pointed out, and through the questions during the Q&A, this bridge and the steps to increase profitability are really important. And in North America, we've been heavily focused on how we drive those two major factors there. Guarding is still our largest business line in North America, and heavy focus on how we drive improved service delivery and improved profitability. And technology, big part of our business, technology and solutions, how we scale, how we optimize that, and drive that across our portfolio, really to add increased value in our business. So these are important, and these are areas that we have been focused on. So we've been on a journey.
I'm gonna talk to you about that journey, a little bit about our performance so far, but more importantly, really, what the road ahead is in North America, and how we leverage these strengths to move forward. Now, we are in a unique position in North america. Number two in market share relative to our guarding services operations, and number two in our market share relative to electronic security. And as many of you know, through the year-end reporting that we had, North America delivered a 9% operating profit margin in 2023. We take that in for just a minute. 9%. But, clearly, even with 9% being slightly above the ambition of 2025 for the full group's performance, our ambition doesn't stop at 9% in North America.
But as Magnus mentions, it's really about now driving scalable, profitable growth in the organization while we continue to optimize the machine that is North America. Now, I remember clearly standing here in December of 2019. I was just starting in the division president role. I'd been in the company for 10 years, but the first time I was taking this position, and I stood in front of this audience here, and I talked about primarily transformation, 'cause we were just about to take our first steps into the transformation journey in North America.... And I remember talking a lot about what we expected as a result of the transformation, kind of forecasting where we think we'd see opportunity, and improvements.
And I'm proud to tell you, and I will share with you, that we've actually made tremendous progress in the transformation, and from my perspective, we've actually done better than we expected on many fronts. But in addition to the transformation for the last 3-four years, we've been also focused on really, you know, sharpening the tenets of our business that drive profitability. And you see those highlighted here. I'll talk a little bit about specialization and how important this has been for us to deliver higher value services to clients to command a premium in those services. We'll talk about all of the work on advancing solutions. The solutions has tremendous relevance to a vast majority of our portfolio in the guarding business, and we've really sharpened that and driven good profitability momentum.
Again, that is aiding us in driving profitability overall. I'll talk. Well, I remember in 2019, one of the goals with the transformation was to move the North America business away from just being data savvy to being more data driven, to really understanding what levers we needed in our organization to drive profitability, and I'll share with you an update on that. And finally, the accelerated integration. I mean, Tony talked to you, and Magnus has talked to you, what the work that's been done in the last 18 months in North America by Kevin Engelhardt and his team, and that entire team, to really accelerate the integration of the Securitas Technology and STANLEY business has been amazing.
And not only has it prepared them to be, you know, a strong and solid as a kind of a stand-up, stand-alone business, but it, it's also prepared us to really focus on driving commercial synergies between the guarding and the technology business. We are positioned, we're doing pilots now. This is an area of good focus for us. Now, in 2020, we had a good plan, but none of us, myself included, expected what would be in front of us in the next few years in terms of unprecedented challenges, kinda listed right there. Transformation by itself is difficult, but you throw in a few of these other challenges, it was tough.
If it weren't for the resilience, the focus, the strength of a strong North American team to drive us through that transformation, I don't know if we would have made it, but we did. And I'll share with you, again, some of the key benefits of the transformation. Now, in terms of profitability, I think you've, you all understand the trends that we've had in North America. We have seen great growth. Now, these are the operating profit margin trends for three business lines: our guarding business line, our Securitas Technology, and our Pinkerton line. And we've excluded SCIS's Paragon because that is now reported differently. And arguably, you'd look at this and say: Well, you know, yeah, you had an acquisition that was positively positive and accretive to you in OPM, and that is true.
That has helped to lift our margins in the latter years. But I will tell you that the underlying margin development in every business line in North America has been positive and moving in the right direction, including guarding. That's trending in record OPM levels for the last couple of years. And when I'm asked about what are the reasons why you're seeing profitability improvement in North America, it really comes down to the three items you see on the page there. How we drive value realization through our transformation, how we focus sharpening our sales proposition and our sales activities through data and analytics, and drive margin through value. And lastly, how we really start to leverage the technology business, the solutions and technology business, as a key differentiator and a high-value solution to our clients.
These have gotten us here, but these are important because these are also the three points that will move us from this point forward, right? Let's talk about each one in a little bit of detail. On the transformation, I'm often asked: What is the most positive impact you've seen from the transformation? If you remember, we started in 2020. My answer, when asked, is clearly this: It's having transparency and the ability to understand the performance in our business, right? The transformation brought us data, it brought us insights, it brought us the ability to know the levers in the business from across the business, whether it's HR, finance, operations, to really start to move and manage the business. I've put a few examples here.
We have better visibility on the contract profitability in our portfolios, which allowed us to more effectively manage active portfolio management, right? We focused on labor productivity. In North America, with the guarding services being so large, labor is a huge cost, and driving efficiencies in labor and reduced unbilled was easier for us to manage because of the transformation. We went through the hiring crisis in 2021, 2022, following the pandemic. We were able, with a new system, to digitize the front-end process and drive speed of hire, which changed our dynamic and really helped us weather a very tough time. You know, we focus on analytics and data to drive sales, and I'll show you that in just a minute. We've made some tremendous progress.
Back office automation, focus on digitization of our AR processes and better insight, is helping us drive better cash flows in North America, and this will just continue. Something that's incredibly important is, you know, we do want to continue to be an employer of choice, and our employees are asking for a better connection to the business, and so we're using the new system and digital tools to really increase our value proposition. As Sune and Frida will talk about, one important area that I'm excited about is we now have visibility on how we drive, with the data, better sustainability results. So there's just tremendous. This is just a sampling of the things that we can do by having better visibility and managing the profitability.
Now, that's exciting, and we'll continue, but the focus now is really on what we do next with this, and that's what you see on the right. That's kind of an illustration of us and our focus around digitization.... How do we connect our services, our protective services, our solutions and technologies with the three key stakeholders in our world, right? Our officers, our clients, and our managers. And how do we create strong digital connections that we can then understand what's happening across all of these entities in real time? This digital ecosystem is something we've been working on now for the last year solidly. It's a very data-rich environment. And with this data-rich environment, we're able to use machine learning and AI to really leverage insights and gain insights into the business. This strategy is not three to five years out.
We are using AI now with the data we have, with the connections we have, to really gain insights in, into the business, into efficiencies and the client value that, frankly, we didn't see with the naked eye. It took AI for us to be able to process and gain that insight. We're just starting this, and I'm very excited about the potential that it brings. But this isn't easy. Connecting all those pieces will take some time, and we're working on that. Now, when we get into sales, this is a really exciting development for us. So in the North American market, very robust market, roughly $45 billion in available market, split between contract and proprietary security.
As you see in the, in the highlight there on the slide, we generally participate in 70%-80% of, of the available, market in a given year. We don't participate in everything because we have our, our filters, right? It needs to match our strategy. It needs to be something that is not a, a low-margin, low-wage, commodity-based type of opportunity. It needs to be something that we look at and understand if there's- they see value in what we bring, and if we can work to develop those clients into more than just guarding, to, to solutions and technology. So we, we are selective, and we also focus on that specialization, and it's been a lot of work in North America. How do we elevate the quality of services?
How do we really meet the demands and the needs of our clients through specialization, whether it's specialized services or specific types of security and solution combinations in specialized segments? When we do specialization, we can command premiums and margin because they'll pay more for better services and higher for specialized services. Nothing illustrates this more than what you see on the right, and really, it's the look at our sales progress or sales volume on an annual basis over the last six years. What you'll see clearly, the last three years, we've been able to generate new sales annually in North America at 35% higher than the preceding three years. So we're dialed in in terms of sales volume. But the validation on selling on value and delivering value to clients comes in the margin development.
'Cause typically, when you sell, oftentimes it comes at the expense of margin when you're driving good growth. We've been able to execute on both. This is really important for the North America story as we move forward. Technology and solutions, the big one here, the exciting one, right? So when you look at where we were in 2020, roughly, what, 20% of our revenue. This was actually good, mostly solutions-based technology. But over the last three years, we've been able to sharpen this, and now we're at 36%, and I do understand how accretive the acquisition is to this number and this revenue mix. But we have, underlying the acquisition, been able to really strengthen our solutions and technology offering within the guarding portfolio.
In fact, in guarding itself, solutions has grown at double digits the last two years. Good growth, good run rate improvement. What I've tried to illustrate on the right here is a really high-level kind of client segmentation of the guarding portfolio, $4 billion-$4.5 billion worth of trusted guarding clients. What I'll do is I'll segment that client portfolio right down the middle, 'cause we've got two distinct strategies. That small to medium enterprise client base of ours, which is a good portion or a smaller portion of revenue, but a big portion of our sites, those are the clients that really connect and see value in solutions. And that's where we have had the most success of driving solutions.
These are clients we need to take care of because these are clients who will develop into medium and large and larger clients down the road. And so we come in with our expertise and develop a compelling value proposition and a partnership. These are long-term clients for us. When you look at the large and global national accounts, this is the exciting part, not that small and medium aren't exciting, but this is where we really see great opportunity. It represents the majority of our revenue, clearly where we tend to sell the best in the large and global accounts. We've had good success with solutions in that client segment, but these are the clients that really are looking for what Tony discussed and what the technology capabilities are in North America.
We've got tremendous opportunity to now leverage the technology capabilities into this client segment. You know, these clients are buying technology today. They're just not buying it from us, and that relationship, that trusted relationship, is there on the guarding side. The key is, how do we leverage the relationship and drive good synergies? Big opportunity for us. So from my perspective, growth. Growth comes when there's value and when the clients see value in your services. And so for us in North America, it's been a heavy focus on really elevating the client value proposition, and it's not something we just started last year. We've been working on it for years. And to me, there are four key areas that really separate us from our competition, right? The first is our power of presence, and by that I mean our physical presence.
Clients are demanding proximity to local sites for local support and development. We hear it from them regularly. In North America, we have the largest brick-and-mortar footprint of any provider in the industry, and our managers are out there locally managing and supporting, and the field teams and support around them are doing that as well, and this is a strong differentiator for us. This isn't about consolidation and large management portfolios. This is about small, close to the client, and elevating and developing your clients. So that's a big one. The end-to-end offering. Look, as you see here, we have technology, we have premium guarding, remote mobile guarding, we have solutions, we have risk advisory, we have intelligence. These are all Securitas solutions, right? Protective services.
We look at our competitors trying to replicate this model because it's the only model in North America with a fully integrated offering. They replicate the model by building alliances and partnerships and small acquisitions, trying to put together pieces to match what we have under our roof. So that's, to me, is an incredible strength that we have a responsibility to develop and make sure that we are able to use that within our market and our portfolio. I talked about the connected system. The advantages have been amazing for us, and we keep looking to leverage that.
But when I talk to my team and I look at the landscape in North America, at present, there are no competitors, large or small, that really have indicated any sort of significant modernization of their system. And as we've mentioned, this isn't easy. And you think about our deployments in 2020, and the two or three years we've now had to really optimize that. I tell my team we've got a couple of years advantage, at least right now, of any competitor in driving efficiencies and service in our business. And now we're in the process of building that advanced ecosystem. You cannot do that without a connected digital ecosystem or a strong machine or central system to do that. So we have that first strike advantage that we have a responsibility to leverage.
The last piece on this is, it seems kind of small, but it's not. It's the most important piece of a strong value proposition, which is delivering strong service delivery and client engagement. I was in Houston with a conference with my senior leadership, and we brought four clients into Houston to talk to our senior leadership. And we asked questions, I interviewed them, and I asked them about what do they look for in a provider or partner? And they said, "Look, we don't want providers. We have providers everywhere.
What we want in security is a partner, and the way you become a partner is by understanding our business, asking the right questions, learning our culture, being two steps ahead of me, bringing in ideas, thoughts, and innovation, bringing technology and solutions where it's necessary or needed to solve a problem. We don't want providers, we want partners." This is a really big one here because COVID, the strain of COVID over many years, has kind of separated people from that sort of engagement with clients. And we're no different. We've had the same internal focus for a while, but I'll tell you that the last nine months, our focus has been moving bandwidth that we're creating through the transformation from our managers into now our clients. Redirecting time, attention, and putting everyone's focused on making sure we're doing what our clients told us they want us to do.
Really important, right? Because everything is great, technology is great, but if you don't have the relationships and build the trust and credibility, you're not gonna advance those clients, and you're not gonna move them from guarding to technology. That's key. So as I reflect on the last few years, I think, you know, 2020, the transformation, when we started that off, we had, you know, a pretty significant ambition, and despite the challenges, I'm really proud of the fact that we have strengthened and sharpened the business. You know, we've driven the transformation and driven some of those great efficiencies from that. We focused on sales and not only driven sales at scale, but also the margin development. And we, of course, continue to leverage our work and the acquisition on solutions and technologies.
But those last four years, while they've been great, to me, it's just really that we've created that differentiated foundation in North America that no one else has, hence my opening statement. No one can touch what we can do, and now it's really our responsibility to leverage that. So you think about the modern system. We'll continue to drive efficiencies, internal efficiencies, cost reductions, but we'll continue to focus on elevating that ecosystem to drive more intelligent services, which will be higher value to our clients, right? We'll continue to focus on sales, doubling down on that specialization to be able to command the premiums that help to drive our margin, and we'll continue to elevate that value proposition I just shared to you. And lastly, and the most exciting piece for me is looking at where we are with solutions and technology.
I thought in 2020, we actually had a really good offering, and we did. We worked it, we, we really developed solutions and technologies in the guarding portfolio over the last four years. But when I look at the acquisition and the talent and the expertise and the footprint in North America and globally, and what we have, this is a, this is an amazing offering now. You know, and Securitas Technology as a standalone business is a powerhouse. But when you combine that with the guarding business and an established portfolio of trusted relationships, and you segment it, and you find the opportunities to really bring value to clients, that's where the acceleration happens. That's the magic. So I'm excited about the next chapter. I appreciate your time, and, I'm delighted to pass it over to my colleague, Henrik Zetterberg from Europe. Thank you.
Thank you, Greg. Hello, I'm Henrik. I've been leading Securitas Europe now for 18 months, and I'm very proud to stand here representing all our employees in Europe, working every day to provide security and safety to our clients. Looking at Europe, we have a unique market position. We are the market leader in most of our markets where we operate. We have invested in our solution organization, and we've seen a double-digit growth in the last couple of years. We're also driving a business transformation where we've seen concrete results already... In the next 22 months, my focus will be to, based on this market position, and I think together with what Brian presented a global team, to really benefit from that across the borders.
I will continue, we will continue to invest in our solution team, but together with the capabilities now of Securitas Technology, really elevate that transformation. Speaking about transformation, we will now continue the business transformation, focusing on leadership, on mindset, on commercial, while deploying, in a very cost-efficient way, our new standardized IT backbone supporting our strategy. But I'm the first one to admit that the guarding margins or the security service margin in Europe have not been what we expect or want. So my main focus is also for these 22 months, to really drive active portfolio management, drive a better price structure, and drive operational efficiencies in order to improve that part of the business. But then starting by looking at our market position. We have 120,000 employees in Europe, or more than 120,000.
We have 700 branch managers every day meeting our clients. Think about it, it's a very exciting opportunity, having 700 people meeting the end client every day to be able to develop our business. But this requires the right leadership, requires the right mindset, and I will come back to that point. We're also present in 21 markets. We're the market leader in most of our services in these countries. So where with that specialization we can drive, we can also make sure that we become the market leader in the totality. We also have one third already of our business in technology and solution. One third that we've built both on organic growth and now together through the STANLEY acquisition. This is a beautiful base to develop our business on. So what we will focus on is two things.
We have three things. We will focus on to continue to develop the technology and solution business, and that I will come back to. We will drive security service profitability through active portfolio management, through pricing, through cost efficiency, and labor productivity. I will come back to that. We will do this while transforming our business, both on the IT side, but more importantly, on the business side, and I will come back to that. M&A is also a part of it. I will not come back to that because that has been covered by Magnus and Andreas already. But so 8% journey in Europe, is it possible? We have already four countries over 8%. We have two countries over 10%. 18% of our sales is already above that level.
So when I took over, Europe, took over the leadership of Europe, I sat down with my team and said, "Okay, what's the best practice that these countries have, that we can use now to accelerate in Europe?" And the first thing we picked up was the change in different mindset and leadership. So what we are—it's not evident that the mindset you've had to take us to this day is the mindset that is required to take us to the future. Last year, we have assessed most of our senior leaders, and this is on country level, on area level, but also on branch level, to make sure we have the right mindset. We have continued to invest in the solution team. We've also strengthened the financial follow-up, and Greg spoke about the importance of performance management. And here, I fully agree.
Now, when we have harmonized how we work, we work and we made sure we had the right people, now we're measuring them towards the accountability they have. And then we are also changing our commercial agenda. We're going from single service to multi-service. We're making sure that we do not sell everything to everybody, that we focus on the right segments, the right clients, and the right services that provide the highest margin profile. And we're doing this while transforming our business, both on the business side and on the IT side. But let's start with somewhere where I believe we've been successful, and that is on the technology and solution part. We have 55% of our bottom line in technology and solutions. We're not a guarding company in Europe. We are a security solution company.
We have grown 17% in solution in the last two years. On the technology side, through the acquisition, mainly, our footprint had really increased, and we're much more active in the market now in the technology space. And which is also presented, as you know, the margins and the stickiness on solution technology is higher than on the guarding side. But the guarding portfolio is important for us. As I said, with the right leadership, I think Greg said it well in his presentation, I think 75%-90% of the portfolio can be converted. We see the same here. So this is a good foundation for us to continue to grow, both on the margin side and into solution and technology. And now, with Securitas Technology, we are even stronger....Now we are the market, one of the market leaders in most of our countries.
So now we can approach both, if you look on the SME side, here we often come in with a one-stop shop. They want peace of mind. So we're offering guarding, other services, be it fire, together with technology in one contract, one monthly fee, providing peace of mind. While on the larger clients, more complex clients, we come in, we provide guarding and fire, for example, again, but together with technology, where the client makes an investment in the technology, we provide the maintenance, we provide the monitoring, and the fire, and so forth. And I think the very exciting part is also the cross-border clients, which Brian spoke about. With our market presence in Europe, often we're the only one who can provide a consistent service across the borders to our clients.
And I think one good example of these commercial synergies that we're now looking for and working on together with Securitas Technology is France. It's one of my, our biggest markets. It's where we have a good guarding presence. We have a good technology presence. Now, the commercial team, as a start, have identified 500 clients where we will now drive the totality, and this goes both ways. To start from a technology side, these clients often have mobile services, so monitoring service today from other providers. Now, we can offer that. We can offer our totality to them. On the guarding side, I think Magnus said it, that most of the clients, well, almost all clients need technology. On the guarding side, these clients need technology, but they're not our clients today.
Here, with the One Securitas approach, we go out and offer this. France is only an example. This is now being done in each and every country where we have the presence of our guarding and technology side. If you look at the business at European transformation, there are two parts to it. One is the IT side, but I think more importantly is on the business side. I think here we have taken important steps already, and that's important to know. On the solutions, which we invested a lot in a couple of years ago, I mentioned we've seen the development. On the organization, I mentioned that as well, we have assessing everybody, we're streamlining the organization, making clear on the accountability.
On the client side, I've also spoke about that, you know, we are we're shifting the client, our commercial focus, from single service to multi-focus, focusing on key segments. But we've also deployed MySecuritas. It's a client portal, 100 or over 100,000 client sites connected, where we provide up-to-date, relevant information for our clients, and the usage from our clients' appreciation is fantastic. But this is also a great sales tool for further digital services that Martin will speak about later. On the people side, with our 120,000 employees, we have deployed a standardized recruitment system. We've seen a doubling of our hiring rate in the countries where we've done this. This, of course, means that we can, we can tackle the labor scarcity, and also we can reduce our subcontracting.
If you look at from the IT side, our starting point was fragmented, obsolete, and underinvested. So what we've done, we've designed an optimal and integrated platform that's really supporting our business, touching most parts of our, of our operation, be it planning, recruitment, the technology, or basically all the key aspects of it. We have also learned from the U.S. They were a couple of years ahead of us, so we learned on the design from them to make sure that this is really supporting our business. And we have also done the rollout in key markets in Europe. Now, we are shifting gear. Now, we're going from the design and early to a cost-efficient and systematic, industrialized rollout. And the values we're looking for, and the values we start to see where we have gone live, are quite similar to what Greg spoke about.
On the labor productivity, we have now a modern planning system. We can plan with less people, but we also can plan in a more optimized way, making sure that we reduce the overtime, reduce the subcontracting. But we can also show that we give more power to employees. Those employees can impact their own calendar, which reduces the sickness, which also reduces the churn, which is highly beneficial. We can now, based on the standardized ways of working, we can start using shared services on country or above country. We can drive the same performance management that also Greg spoke about. And last point is the AI-enabled savings that we start to see already. What we, for example, have done, and we used AI to look at our operation to optimize that.
We did it in one country that we optimized our branch structure. We saved EUR 1.9 million, just in one country. So we're in a good way on our transformation program. The last part is our guarding portfolio, because, as I said, here we need to drive a quality portfolio. The first thing is the transformation to solution, that has been discussed. But also we need to focus on price. We have before, in my view, not had high enough requirement on the price we sell at. This we have changed now. We're also driving much more focused price increase on our lower margin clients. But where there are low margin contracts, which we cannot develop, there are such, we need to exit. But what we also put in place, an incentive.
For the first time in Europe now, we are most of our senior leaders have an incentive only in improving the margin on Security Services. Good example is Germany, which is the biggest market in Europe, who with the management team sat down, looked at this whole menu and started to implement the plan. Last year, we saw fantastic development on their Security Services margin. But the interesting part is that we had very limited churn, because if you go out with the right mindset, the right leadership, clients are prepared to pay. This is one example. Netherlands is another, who did the same thing last year, driving the same effect. We have done this in all countries, but this year we're driving it with a much more focused activity to ensure impact.
To summarize, we have a fantastic market position. Now, together with Securitas Technology, we are even stronger. We are making the shift, or we made a shift in leadership and mindset, which is something that will help us. We are modernizing our IT structure, but we're also modernizing our organization. That will help us, and we're driving a very focused approach to quality guarding portfolio. And with that, I'm convinced that we will support the 8% journey. I spoke about MySecuritas. I spoke about AI before. Of course, who am I to speak about it? It's better to leave it over to Martin Althén, leading Securitas Digital, who can tell you more about these activities.
Just waiting for the technology to catch up with me here and to get the right slides. There we are. Now we're good. Thank you very much, Henrik, and good afternoon, everyone. The word digitalization has been mentioned a few times here this afternoon, and I'm really excited to help you gain a deeper understanding of the value that we're gaining from digitalization and innovation in Securitas. I think it's the fourth time I'm addressing this forum in the Investor Day, and previously, I've been mostly talking about plans, proof of concepts, interesting ideas, what we're gonna do in the future. That's super interesting, but that is not what we're going to talk about today.
Today, I want to help you to understand that what we are doing in digital and innovation in the company today is today driving real value in both to clients, to our revenue, and to our margin. I want to provide you with data points, and I want to provide you with examples here today. Examples such as how we, over the past 18 months, have digitalized more than 130,000 client sites. And that is important because it really strengthens our client relationships, and it's a direct line between that and the improved client retention. But it also drives cross-sell and up-sell, and as Henrik said, it's actually a quite good sales tool in itself. And as Brian mentioned, it helps us win business. You saw examples from Brian on Mastercard. It's an entirely digitized service delivery for one of our largest clients.
Also, LinkedIn was an example of that. But I will also dig deeper into the world of AI. AI is super exciting, and we are reaping early benefits from AI. We're seeing how it clearly contributes to our margin improvements here today. And as we are such a huge company, I firmly believe that AI has a larger than average opportunity to drive efficiency and productivity for Securitas. But I also want to talk about something that I hope you will find exciting. And it is, how do we also, in 2023, seeing growth of over 200% of high-margin SaaS product sales? How I see this, this is a significant differentiator for Securitas. And from my experience in the industry, we are clearly ahead of the industry. So let's dig deeper into what this means, what it is, and how it works.
Is this only future value, you might still wonder? No, it is not. Digital innovation is firmly integrated in our 8% bridge. Client digitization allows us to engage deeper with our clients, and it gives us unprecedented transparency of the services we deliver. But it also exposes the client to other services that Securitas can provide, and thus generating cross-sales. And from a completely new level of data, it gives us insights that we can also use to identify and propose new solutions to the client needs. And furthermore, this data and these insights also allow us to develop and deliver new solutions to previously unmet client needs. We heard both Greg and Henrik talk about modern cloud-based platforms, cohesive data sets, and digital solutions. It allows us to drive synergies of scale and new client value that has previously been unachievable for us.
In addition, AI is proving to be a very powerful tool to further, across our vast business, drive efficiency and productivity. But it also helps us to identify where we have low performance in contracts, for example, and how we can identify the root causes and propose options to address those in a good and automated way. Our digital capabilities, they are an important component of our margin journey to 8%, but we also see significant value creation opportunities taking us to our long-term 10% ambition. Let me, before we dive into the details, share some more data points with you on how we have evolved from a data and a digital perspective over the past few years. In the last few years, we have built and rolled out global platforms for our back office and our front office, for guards, and for our clients.
In 2023, we exceeded 130,000 digitized client sites, and we passed more than a quarter of our total officer base on digital tools. And more than half of the entire company's business volume is now running on modern cloud-based platforms. In a few years' time, we expect all our clients to be able to interact with us digitally. We expect all our guards to be digitally augmented and all security technology connected to our digital platform. And you can imagine what that means if you remember what Tony talked about, 1 million customers and customer sites around the world. In other words, I'm talking about the fully digitalized business model, leveraging presence, technology, and data, all empowered by really strong AI capabilities. We expect efficiency and productivity gains from AI that we are already seeing to be significant and growing very fast.
While the revenue from digital products and SaaS services is still relatively low, admittedly, we're a large company. The growth of this, combined with the profit margin of those products, is having a significant, interesting opportunity for the company. And we are already seeing that this is winning us business, and it's also having an operating margin improvement in the first markets. So let's talk about what this means in more detail. We started the digital journey several years ago, but we have persistently executed towards our vision. Now, Securitas has entered a phase where we are focusing our efforts even further towards driving client value and radically transforming our view on how we're running our business and driving our operations.
With Securitas Digital, established in mid-2022 as a catalyst, we do this in three ways: digitalizing delivery of all our protective services and complementing the physical client interaction with an engaging digital channel. That's the first. The second is innovation. Innovating the way we do business, but also our offering to create new value to our clients. And thirdly, it's about commercializing and growing high-margin SaaS products. Let me go deeper into each area, and let's start with digitization. Digitalization is super important because it's the foundation. It's the foundation to unlock client value and new business opportunities. How it works is that we are capturing data throughout our vast operation, from installed technology, sensors, to data from all our guards patrolling their shifts and their clients every day. We combine this with external data and overlaying it with analytics.
This gives the clients a completely new level of transparency and insights, but also it gives them the ability to interact with us, and we interact with the services they consume from us in a seamless and real-time way at their fingertips. At the same time, it gives us the same level of transparency, and also insights to optimize the security solutions that we deliver to them, so that we can create even more value in what we deliver to clients. Digitalization delivers tangible results already now, including improved client satisfaction, reduced client churn, additional up and cross-sell, and it's winning us new business. We have accelerated, as I said, very hard over the past 18 months, and MySecuritas is now widely deployed over 23 markets.
But looking ahead, we are confident that we have the momentum to have largely all our, all our clients digitally engaged in just a few years. Let's move and look into innovation, what I'm meaning with that. Innovation can be a very broad concept, but we want to deliver impact, so we focus our innovation capacity in four dimensions. The first is to go after our scale synergies in our big business and to optimize them. The second is to leverage the unique data that comes out of our service delivery, leveraging our strength, presence, data, and technology. The third is to augment our vast workforce with new technologies, and the last is to invent new security solutions that we can bring to our markets and our customers. A common denominator for all this is really AI.
We invested early in AI, and over the past, the capabilities needed to use AI as a foundation to enable and differentiate Securitas and our services. Let me show you a couple of examples of AI, 'cause everyone is talking about AI, but let's try to make it more tangible to you, what it is actually means in Securitas. Two examples. First is how we use AI to optimize how we do business, and the second is an examples on how AI is delivering new client value. The first example is what Henrik talked about, and the pilot country was Germany. But as you know, we have a lot of branch offices out there in the world, servicing even more client sites. Each branch office is several hundreds of individuals, officers, supervisors, planners, managers, et cetera.
This is an extremely complex landscape, and without advanced technology, it's more or less impossible to get to an optimized solution. With AI, in just some six months, we have been able to develop a solution that has driven a very strong, positive impact, generating savings exceeding EUR 1.9 million net in Germany. But on top of that, the AI solution is also generating an average reduction of drive time for our cars to client sites with 10%. That is positive, positive for servicing our clients, for sustainability perspective, but also for the officers, not having to spend as much time as they need in their cars.
Beyond this, we are actually looking at the use case, more on the pilot stage yet, with mobile route, route optimization, which is proving very interesting, actually looking at opportunities to reduce average drive time up to 25%, and you can imagine what the potential is in that. The second example is how we've used AI to look at all the data that the guards are reporting back into us in their daily job. The project was looking at one of our largest clients' operations in Sweden, looking at what are they doing, and not only delivering Security Services during the day, but they are also taking actions like closing doors, switching off lights or coffee machines being left open, closing windows, et cetera.
Looking into that and translating that in what it means in terms of energy savings, really created some extraordinary insights, I would say. Assuming that this client is quite typical for the rest of Securitas operations in Sweden, which it is, it's very similar. The activities that our officers are doing in the daily shifts is generating- it's equivalent to a saving of 12 MWh a year. Similar, which is equivalent to 6,000 tons of carbon dioxide emissions, equivalent to an electricity cost of about SEK 24 million.
If you were to assume—now, now it gets a little bit less scientific, but if you were to assume that we are doing similar effects also globally, the total effect, sustainability effects from what our guards are doing, just in this example, corresponds to twice the impact, so the impact, the carbon impact of our total fleet. And this is just an example of insights that and effects that AI, in just a very short time, has produced. And I see so many very exciting opportunities using AI further in Securitas. Let's go into the last example, and it's about high-margin SaaS products. In 2023, we started to build a portfolio of high-margin SaaS products to complement Securitas' offering, taking a bigger share of our clients' wallets.
One of these services is risk intelligence, which has been mentioned here before. In an increasingly uncertain world, clients wants to be prepared. They want to know the risk to the sites, to their assets, and to their people. Risks including, of course, crime and vandalism, but also activism, terrorism, natural catastrophes, cyber threats, geopolitical disturbances. To address these client needs, we offer a growing portfolio of risk intelligence services, underpinned by a global cloud platform, gathering intelligence from open sources across the entire world, including sources such as internet, social media, dark net, et cetera. Our intelligence analysts, supported by AI, are producing finished and actionable soft intelligence that we deliver to clients as a service. This service is in strong demand, and we are investing in both product development and go-to-market.
As I said in my opening here, last year, we saw these portfolio services growing with exceeding 200%. But interesting is not only the product in itself, but we're also trying out new go-to-market models. We are, of course, leveraging the traditional go-to-market model that Securitas has through our market companies, but we're also delivering these services to the market from a direct specialized sales force on Securitas Digital. We're delivering it as an online channel, and or looking forward, we're also doing it through a partner model. Wrapping up, we have invested for several years in digitalization, in transformation, innovation, and building capabilities. It's not been easy. It's been a tough journey, but we had a vision, and we have been brutally persistent in executing to a plan that we actually laid out back already in 2017.
It is now paying off, as you heard, hopefully from me, but also from my colleagues. But not only that, imagine the competitive advantage that we have built in the industry. As you've heard Greg, for example, talk about our advantage to the competition. As I said in the beginning, we are clearly ahead of the curve, and what we have built is not an easy thing to replicate for anyone else in the industry. So what I want you to take away from today is that Securitas investments in digital innovation have now moved beyond pure invention. They are delivering tangible client value and results. More specifically, they are increasing client retention, they are improving efficiency and driving productivity, they are enabling cross-sells and up-sells, they're generating new high-margin revenue from data-driven SaaS, and lastly, but not least, they are winning us business.
Thank you very much for your attention. With that, I would like to hand over to my colleagues, our General Counsel, Frida, and our Head of Sustainability and Business Ethics, Sune.
Thank you, Martin. Good afternoon, and welcome to the last segment of today. We intend to show you how Securitas is leading the industry, also from a sustainability perspective, and also how sustainability supports our 8% margin journey. So we will talk about our commitment to sustainability, the progress we've made, the business impact it has, and also our plans for the future. Sustainability is at our core. As the industry leader, sustainability is actually a license to operate for us and something that we focus intensely on. And it's not only high on the agenda for us, but also for our clients, and we collaborate closely with our clients. We have three key messages for you today.
And the first one is that Securitas is a sustainable investment with ambitious climate targets, and we are really proud of our sustainability efforts, and we aim to be a positive force in society, and we will help secure a sustainable future. And we are focusing our efforts on areas where we have a positive impact, both from a business point of view and a sustainability perspective. So our efforts to increase employee retention and efficiency will reduce costs. And together with our dedication to win client trust, this will support higher margin sales, and thereby our journey towards 8%. We are committed to partner with all of you and all our stakeholders in this journey, and keep you informed about our efforts, our successes, our challenges, and also be transparent in how we communicate and how we report on these topics.
With that, I will hand over to Sune.
Thank you, Frida. Good afternoon, everyone. At Securitas, we focus on three areas in sustainability. We focus on climate, we focus on people, and we focus on responsible business. Now, if we start with climate, we have set a target to reduce our emissions in all three scopes with 42% by 2030. This target is in line with the Paris Agreement, and we're very proud that we're the first global security provider whose targets have been validated by the Science Based Targets initiative. Now, as a service company, we're not a major polluter here, but we want to do our part in this, and we also want to align with our clients' expectations of being a company that takes this responsibility serious, because that is a driving force in the partnership we have with our key global clients.
So it is something that is absolutely necessary for us to do, and it reinforces our position as the industry leader. So how are we gonna achieve this? Well, what we've done is we have developed roadmaps throughout our organization, bottom up, by involving key stakeholders. Now, Scope 1 and Scope 2, so emissions from our fleet and energy consumption at our premises, they're under our own control, you could say. But as many of you probably know, when you need to cut emissions on Scope 3, it becomes much more challenging because we're dependent on suppliers and other external stakeholders. But what we're doing now is we're working very closely with our suppliers to set up common goals. And we're fortunate that many of our suppliers of security equipment and IT equipment are themselves leaders in their industries.
What this means is they have their own climate targets in place, which of course, benefits our journey. So what we're doing now is we're integrating those roadmaps into our business planning company-wide. And we're also setting up robust monitoring and tracking mechanisms to ensure that we can execute and meet those targets. And what we've done for the first time to ensure that we have commitment and alignment across the board, is that we have included our climate targets in our long-term incentive scheme for our top leaders. So our second focus area is our people. And of course, that's a major importance to us because we are a very large employer, and we understand that this is really where we can make a difference. Now, you've heard several times today that scaling great leadership is a key success factor for us.
We need diversity of thought, experience, and background to support our transformation journey. Now, we've set a target to have at least 20% female representation at all managerial level throughout our organization. In 2023, we reached 25% on average, which is a great achievement that we're very proud of. But we still have more work to do, and we want to look at setting even more ambitious targets going forward. What we're also doing is we're measuring engagement and inclusion, and that's, of course, fundamentally important to us. And last year, we launched the first global engagement survey that we've ever done. We will continue to do that going forward, so we have a way to measure and set targets for this. And our final area is responsible business. Now, as a security provider, trust is really our most important asset.
And to us, trust translates into doing the right thing and having the highest levels of integrity and compliance in our day-to-day operations. We have zero tolerance for misconduct in our business. And again, this underlines our client value proposition and our position as the industry leader. We've taken significant steps over the last couple of years to really update and strengthen our efforts when it comes to business ethics compliance. And we do something here that few other companies do, which is to work actively with every part of our business to make sure that this actually works in practice.
So what we did was, on responsible business, we set a target, and we said, "We want to roll out this updated compliance program in all of our markets." And we have reached 42 out of 44 markets, and in the coming months, we will have all of that done. And that's something that we think is very important and we're very proud of. Now, if we turn to the impact that sustainability can have on our business. We view sustainability as integral to our business strategy and as a driver to reach 8% operating margin and beyond. So what we hear when we speak to our clients is that they select Securitas because they understand that we share their values and their goals. Our clients expect us to support their sustainability journey.
And with the engagement model that we have, we can understand what those needs are, and we can actively partner with them to accelerate both sustainability and business growth. So as I mentioned before, we're already now working with our main suppliers to get the relevant data, but also access to the most energy-efficient products that they have. Because in turn, that allows us to put together the most energy-sufficient solutions for our clients. What we're also working with is circularity programs, because that enables us to help our clients manage used equipment in a sustainable way. And as Martin Althén talked about before, we're already now using data and AI to be able to show the positive impact that our officers have every day when they carry out their duties at our clients' premises, so our handprint, essentially. And what these things give us is really three things.
They give us access to great clients, they allows us to build close relationships with those clients, and they allows us to really provide better tailored and much higher value solutions to them. It's critically important for our business. We're of course, also looking at embedding sustainability into our own operations. When we do that, we focus on areas where we can both improve sustainability and efficiency, and that's critically important to us. One important area, just to mention, is our employee engagement, for instance. As you know, employee turnover is a major cost driver for Securitas. If we focus our attention and set clear goals on how we can improve in that area, we're going to increase employee retention and reduce cost.
At the same time, of course, what's really important for this journey is our key enablers in technology and capabilities in technology and data and innovation. You've already heard from Martin before how we can utilize data and AI, not only to reduce our own footprint, but also show our clients the positive impact, so our handprint that we have every day. And what we are doing here is we're really encouraging further innovation here, because we are integrating and using sustainability as a core evaluation criteria for all new innovation projects going forward. So together, that is how we mean sustainability and how we work with sustainability in Securitas, and how we believe this will help our journey towards 8%. And with that, back to you, Frida.
Thank you. So as you know, we have been working with sustainability for quite a while, and it's already created results for us. But we are now at a point where we are really stepping up our efforts, because we are in this to really make a difference, and we are fortunate enough to have owners who believe that Securitas should be a positive force in society. This presentation today will only give you a glimpse into sustainability at Securitas, but we have so much more to tell you, which is why we have chosen to organize a dedicated sustainability day later this year. We hope that you can join us then, as it will allow us to give you more details about what we do and more time for discussions.
On a final note, if you still wonder what sets Securitas apart, why are we different than all the other companies that you visit and hear about? What truly sets us apart is our large workforce and our people, where we have a unique opportunity to make an impact. Because an effort doesn't amount to much if one person does something, but it has a completely different impact if many are engaged and contribute. Take the example that Martin mentioned, for example, with turning off the lights. It doesn't amount to much if one person turns off a light. But imagine if 340,000 people are doing that in 40 countries in the world every day. Imagine the impact that has and how it can truly make a difference.
So with that, we want to thank you for your time today, and we hope that you do not only see us as a good, sustainable investment, but also realizes that our sustainability strategy will help both our top and bottom line, will make us a more successful company, and also have a positive impact on the world. And we really do want to invite you to come with us on this journey. Thank you.
Please stay-
Okay.
... because we are having our second Q&A session for the day. We're sorry that we have run over a bit. We have a lot to tell, a lot to share. But we absolutely want to give you the opportunity to ask some questions to management, before we round off this day. So please, the speakers of the second block, including Magnus and Andreas, please come up and join me here, and we will take questions from the audience, and online again for 10 or so minutes. So please go ahead. Right there.
Hello, Rémi from Morgan Stanley. Thanks for taking my question. The first one is on, the figure you've given on the contracts in Germany, which are lower profitability, higher profitability. So just interested in understanding if it's a good proxy for what you're experiencing in other countries in Europe, and also interested in having an idea of how these figures compare to what you're experiencing in the U.S., as well. So that's the first question. The second one is on the active portfolio review, which is something that you've said quite, quite a lot during the presentation, and understanding the geographical footprints.
I'm interested in understanding your thought process between countries where profitability is maybe a little bit on the lower side, but you think that you've got room to improve, and where you think that it's probably more relevant to go for a divestment or get it out of the footprint, basically?
Yeah, in Germany, I think, you know, the development we've seen there, where we've reduced the low margin profitability portfolio, is something that we're driving in all the countries, as you said. You know, we were not, you know, talking about how big that portfolio is in the different countries, but we need - we want to reduce it in all countries. Looking at, you know, if there is not such a big difference in the achievable profitability between the different countries. So the thresholds we have apply across the board because that's the only way for us that we can achieve the target margin that we have.
And I think on the second part of the or the second question, if I understood it correctly, it is important that we are investing in this business. It's quality. It's really making sure that we have significant differentiation in our offering. And I think when I look historically, I think we have not played the best role in terms of being firm enough in terms of the profitability requirements, and that's essentially the cultural change that we are driving, and that is an important one to drive at scale. The good thing now, compared to a couple of years ago when we started talking about active portfolio management, is that now North America business is essentially in good shape.
Mm-hmm.
A number of the markets in Europe are in good shape as well. And if you look at North America and Europe, that's where we have 85%-90% of the profit generation of the company. And then we have selective presence in Asia Pacific, in the Middle East, and also in Latin America. So we feel pretty good about that, in terms of the geographic presence, that we have today. But it is important that we're also driving that work to conclusion so that all the business is really healthy business as we go forward.
Can I add just one thing, Magnus?
Sure.
I think it's really important to understand that active portfolio management, I mean, prior to 2020, we really focused on kind of retaining everything at all costs, and we went in and really looked critically at those low-performing contracts. What's really important to note is 85%-90% of those contracts that we approach, we fix. It's a small percentage that we just can't get alignment on. And when we do exit contracts, what we tend to see is improvement in the areas that have lost those contracts because they were high maintenance and high resource drain. So it's a very positive thing, and it goes back to, again, being aligned to our strategy, but it is a very positive thing for us to be refreshing our portfolio with the right clients.
Thank you.
Yeah, from Raymond there, up in the middle. Raymond Ke from Nordea.
Yeah. Hi, thank you. So I was thinking about a slide that Henrik showed before, about 55% of Europe's margin coming from technology and solutions already-
Mm
... implying that 4.1% is the margin you have on, guarding business in Europe. Two questions on that: so how does this compare to North America? And also, how does the road leading to reaching the same type of margin in guarding in Europe differ from North America, if there is any difference?
I think, to be fair, if I do... You don't mind if I take that question, since it's North America and Europe, right? We have come further in North America in terms of the guarding profitability. So we're several percent higher at this point in time. But it's also like Greg said, it's also a market where we have come significantly further in terms of the transformation work. We're operating with modern systems, but it's also a market where 90% is the U.S., and then we have Canada, and then we have Mexico. We're also operating with scale benefits that are very, very significant. So I think if I just enter this industry, I will probably say North America has a higher profitability potential overall.
'Cause when you're looking at Europe, there is also then obviously a number of different markets. But what we are doing now, and I think what Henrik is leading, Henrik is leading successfully, harmonizing the way that we are working, implementing common systems, because that's ultimately what enables us to also drive more scale benefit also in the European landscape. And that's something I'm convinced there is plenty of opportunity for us in terms of realizing those improvements as well over time.
And then just one final one, if I may. IAC beyond 2024, you didn't provide any numbers, but you said that they would go down. If you could provide any color and perhaps a range, an approximate range, if possible?
Correct conclusion related to the IAC. I mean, the IAC in 2024, we estimate that to be SEK 550 million, and then we also expect that to continue to decline. But we are not providing an exact number, as you also rightfully noted as well. But the program will continue to go down.
But I think it's important for context. 6-7 years ago, we were a completely different company. We have a firm commitment to get to 8%. We have a long-term margin ambition of 10%. This has been a profound change, and that's always a discussion that I had. We had it together with the board and the main owners, 5-six years ago. This is gonna take a while, but the important thing now is that now we're really actively starting to phase out as well, these investments, because it has been extensive, and it's also been fairly heavy lifting. But we are in a different position today.
But, I think the important message is what you highlighted, Andreas, is that our commitment is that we continue to drive this down, but we also want to be transparent about the fact that we're coming out of a period here in the next couple of years of really, really important change. But that change is also what is enabling us to operate at a completely different level in the future. And I think it's just important to maintain that context as well, and understanding in terms of-
Mm
... how we are shaping the company, as we go forward.
I'd like to take a question first, from the online audience here, and that's Victor Lindeberg again. "Can you exemplify and quantify the commercial synergy opportunity and its impact in the 8% margin bridge?
Yeah, so we have, I mean, essentially, there is one category in the bridge where we talk about the impact from technology and solutions. Increasing, if you look over the last 18 months, like Tony highlighted earlier, that's been a period of intense integration work, essentially. And we're largely done in North America. We have work to be done in Europe. But I think it's important as well that we are not just buying a business and standing that up by itself. We're driving deep integration, and that has always been priority number 1. Number two now, as we're looking at the next 12, 18, 24 months, is that we're really dialing up as well the work in terms of leveraging our specialized competencies, but then also opening up the client opportunities. And I think that's something that you have heard from Tony today.
You've heard it from Brian in terms of the global clients. Greg and Henrik also shared a number of examples as well in terms of that opportunity. And so the synergies over time, as we are realizing the cost synergies, I mean, that is now done after we are all through the work in 2024 and early 2025, then it's all focused on value creation and really, you know, leveraging the untapped opportunity that we have with this large client base. So it's gonna play an increasingly important role over time.
Yep, Johan, from Kepler Cheuvreux here.
Yeah, hi. Thank you for taking my question. You talked a lot about technology today, but you're obviously still a people's company, and I think incentive programs are quite important for, for such organizations. We've heard Andreas talk about cash flow incentive, and, and Henrik talked about margin incentive. Can you detail how were the incentive programs before? What are they today, and is it sort of roll out in the whole organization, or are, are you still in the process of implementing the changes?
Yeah, so historically, and when I joined Securitas, this was essentially very much focused on the improvement in the real—what we call the real change, so the operating result in constant currency, one year compared to the year before. That you can say is good because it's very much related to the earnings per share, but higher up in the income statement. What we have shifted gradually, but where we have also put even more emphasis, like Henrik mentioned, is also then to really dial up the operating profit margin improvement, because we also feel that we're investing a lot in the business. We have been investing a lot. We also now need to start to see this really translating into a higher margin profile.
So when you're looking at the incentive programs today across this team, it's very much focused on, some part, which is then on growing the operating result, because that translates into earnings per share. But then a very significant part is also the relative margin achievements, because we felt that this is also just so that we drive strong alignment. And, and I think you mentioned that in your presentation, Henrik, as well. When you're looking at Europe, for example, given very high attention and focus on improving the margin, the biggest and the most significant variable that we now have across the country leaders, area managers, and also then the branch managers in Europe, that's actually on the operating margin improvement itself, so that we are really driving that change with emphasis, in 2024 and 2025.
And then the third component is the cash flow one as well. I think it's-
Yeah, sorry, I forgot that. I forgot that.
But I think it's also important with the historical context, because I agree that the real change in operating result that is connected to EPS in a good way. But that is also what, when you overemphasize only on that part, that is also when you get volume-oriented and not quality and margin-focused. One of the reasons why we had a flat operating margin over many years, pre the pandemic as well. So we are not replacing that real change. We are also complementing that with the margin focus, to basically to drive both the quality of the business, but of course, in the end, also generating EPS growth over time, so. Thank you.
Yes, and Neil, there from Redburn?
Hi, thank you. I'd like to ask a question, I mean, broadly about the STANLEY acquisition and in the context of the commercial synergy sort of framework that you've all described. I think it'd be fair to say that, you know, the market was, or the, you know, investors, some investors were quite skeptical or at least reserved judgment when you announced that acquisition, because the business didn't look like it had grown a lot for a long time. And clearly, you're, you know, you're now releasing some of those, the, you know, that potential that you clearly saw. Is there much within the business that's surprised you positively since, you know, you're now a year or more into that?
And, you know, do you think that's being released as a consequence of your ownership, you know? Or was it, you know, want of a better term, an unloved asset in its previous stable? And, you know, to what extent, you know, is that surprising at this point?
I think on your first comment, no one has really questioned the STANLEY acquisition in terms of the strategic rationale. If I talk to our clients, if we talk to serious long-term investors who understand what we are doing, I think everyone is saying that was strategically the best thing that you could have done. The STANLEY business, I think, to use your expression, an unloved asset, it was a security business in a tools company.
When I sat down with the leaders of STANLEY Black & Decker the first time, because we were able to buy five of the assets or five of the countries in 2020, I mean, the basic market argument that I shared is that I believe that there is a lot of competence, a lot of capability in that business, but it would fit very, very well within Securitas because here it's really at the sweet spot of our strategy. I think that's something that we saw that from the outside. We also looked at the numbers, and we had many conversations, Tony, myself, and a few others, to say: "But why aren't they delivering better?" Because we see the market.
We were a smaller player at that time with a good position in a few markets, but not with the type of footprint we have now, and we just saw that tremendous opportunity. But frankly speaking, I think when you were not in focus, they had frequent leadership changes in that business. There were frequent strategy changes. And also from a client perspective, I think this was really, really positively received. Our clients also said, "If Securitas is the owner, we know you have 100% focus on security and safety. We know you're long-term oriented in terms of how you work.
Now we can start to build partnership on the technology side in the same similar way that we've done on the services side in the past with you." So, so that became a really strong catalyst, and I think that's also something that also the team has also realized, because nothing better than talking to the client and hearing what they are saying in terms of, "This is what we want to do with you." So, I would say that there is tremendous capability within the STANLEY team. I attended the kickoffs just in the last couple of weeks here in Europe and North America, meeting hundreds of employees, and many of them, I know them quite well now after the first 18 months. Lots of really good leadership talent, lots of really good technology capability, many, many good client relationships as well.
I think where we are right now, we're just at the beginning, essentially, of a really promising journey.
None of that, but none of that was a surprise to you, clearly. You know, any surprises?
Not really, because we acquired five countries from them, and we had a pretty good sense in terms of what is the culture, what is the type of company that we're gonna find, because we had a very good experience in those five countries as well that we acquired and integrated in 2020.
By that, I think we are about to round off this Investor Day, actually. Please, Magnus, do make some closing remarks.
Yes
... for today.
Thank you, everyone, for joining us today. Like you said, I think it's really time to wrap this up. We are on a very exciting journey. I believe that in the session that we have shared today, we deliberately put quite a lot of focus on what we have been doing in the last two years and what we're doing this year and next year, because it is such a profound change that we are driving. But like I mentioned also when I talked about the longer term, everything that we are doing is really geared towards the future and the new Securitas that we are creating.
I hope that you feel the excitement, but that you also see the conviction as well from the team in terms of where we are now and also the opportunities that we have, going forward. But coming down to how are we creating operational value, how are we also increasing our cash flows, and how are we also then really building a compelling shareholder return, over the coming years? So, with this, I just want to say thank you for being here for today, for very active participation, but also to be part of the Securitas journey. So thanks a lot, everyone in the room and also everyone on the webcast. Thank you.
... today. So today I'm going to talk to you about how we've developed this market leading position, and more importantly, teams talk to you, Number two in market share relative to our guarding services operations, and number two in our market share relative to electronic security. And as many of you know, today, let's take our first guys. Let's talk about each one in a little bit of detail. On the transformation, I'm often asked, "What is the most positive impact you've seen from the transformation?" If you remember, we started in 2020. And my answer, when asked, is, is clearly this: it's, it's having transparency and the ability to understand the performance in our business, right?
The transformation brought us data, it brought us insights, it brought us the ability to know the levers in the business from across the business, whether it's HR, finance, operations, to really start to move and manage the business. And I've put a few examples here. We have better visibility on the contract profitability in our portfolios, which allowed us to more effectively manage active portfolio management, right? We focused on labor productivity. In North America, with the guarding services being so large, labor is a huge cost, and driving efficiencies in labor and reduced unbilled was easier for us to manage because of the transformation. We went through the hiring crisis in 2021, 2022, following the pandemic.
We were able, with a new system, to digitize the front-end process and drive speed of hire, which changed our dynamic and really helped us weather a very tough time. You know, we focus on analytics and data to drive sales, and I'll show you that in just a minute. We've made some tremendous progress. Back office automation, focus on digitization of our AR processes and better insight, is helping us drive better cash flows in North America, and this will just continue. Something that's incredibly important is, you know, we do want to continue to be an employer of choice, and our employees are asking for a better connection to the business. And so we're using the new system and digital tools to really increase our value proposition.
And as Sune and Frida will talk about, one important area that I'm excited about is we now have visibility on how we drive back office automation, focus on digitization of our AR processes and better insight, is helping us drive better cash flows in North America, and this will just continue. And something that's incredibly important is, you know, we do want to continue to be an employer of choice, and our employees are asking for a better connection to the business. And so we're using the new system and digital tools to really increase our value proposition. And as Sune and Frida will talk about, one important area that I'm excited about is we now have visibility on how we drive with the data better sustainability results. So there's just tremendous...
And this is just a sampling of the things that we can do by having better premiums that help to drive our margin and will continue to elevate that value proposition I just shared to you. And lastly, and the most exciting piece for me, is looking at where we are with solutions to technology. I thought in 2020, we actually had a really good offering, and we did. We worked it. We really developed solutions and technologies in the guarding portfolio over the last four years. But when I look at the acquisition, and the talent, and the expertise, and the footprint in North America and globally, and what we have, this is an amazing offering now. You know, and Securitas Technology as a standalone business is a powerhouse.
But when you combine that with the guarding business and an established portfolio of trusted relationships, and you segment it, and you find the opportunities to really bring value to clients, that's where the acceleration happens. That's the magic. So I'm excited about the next chapter. I appreciate your time, and, I'm delighted to pass it over to my colleague, Henrik Zetterberg, from Europe. Thank you.
Thank you, Greg.
Can everyone take their seats, please? We're about to start again. Take your seats, please. Welcome back to part two of our Investor Day, 2024. I'm happy to introduce to you now Greg Anderson, who is leading our North American business. Greg, the stage is yours.
Excellent. There's nothing like coming to the stage after a break. I'm happy to be here. If I were to ask you to write down one thing or one key takeaway from the presentation that I'm about to give you, it would be this: That over the last few years, through the work of transformation, optimization, redefining the capabilities, and really optimizing those, working to elevate what we do in terms of service delivery with our clients and our value proposition, and now the acquisition that we have with STANLEY. North America, Securitas North America is positioned like no other competitor in North America to deliver profitable growth at scale. There is no competitor, large or small, in North America today, that has our capabilities, the modern system, and fully integrated end-to-end offering that we can bring to the market today.
So today I'm gonna talk to you about how we've developed this market-leading position, and more importantly, how we're gonna drive and deliver from that. Now, as Andreas pointed out, and through the questions during the Q&A, this bridge and the steps to increase profitability are really important. And in North America, we've been heavily focused on how we drive those two, two major factors there. Guarding is still our largest business line in North America, and heavy focus on how we drive improved service delivery and improved profitability. And technology, big part of our business, technology and solutions, how we scale, how we optimize that, and drive that across our portfolio, really to add increased value in our business. So these are important, and these are areas that we have been focused on. So we've been on a journey.
I'm gonna talk to you about that journey, a little bit about our performance so far, but more importantly, really, what the road ahead is in North America, and how we leverage these strengths to move forward. Now, we are in a unique position in North number two in market share relative to our guarding services operations, number two in our market share relative to electronic security. And as many of you know, through the year-end reporting that we had, North America delivered a 9% operating profit margin in 2023. We take that in for just a minute. 9%. But, clearly, even with 9% being slightly above the ambition of 2025 for the full group's performance, our ambition doesn't stop at 9% in North America.
As Magnus mentions, it's really about now driving scalable, profitable growth in the organization while we continue to optimize the machine that is North America. Now, I remember clearly standing here in December of 2019. It was my... I was just starting in the division president role. I had been in the company for 10 years, but the first time I was taking this position, and I stood in front of this audience here, and I talked about primarily transformation, 'cause we were just about to take our first steps into the transformation journey in North America. I remember talking a lot about what we expected as a result of the transformation, kind of forecasting where we think we'd see opportunity, and improvements.
I'm proud to tell you, and I will share with you, that we've actually made tremendous progress in the transformation, and from my perspective, we've actually done better than we expected on many fronts. But in addition to the transformation for the last 3-4 years, we've also been focused on really, you know, sharpening the tenets of our business that drive profitability. And you see those highlighted here. I'll talk a little bit about specialization and how important this has been for us to deliver higher value services to clients, to command a premium in those services. We'll talk about all of the work on advancing solutions. The solutions has tremendous relevance to the vast majority of our portfolio in the guarding business, and we've really sharpened that and driven good profitability momentum.
And again, that is aiding us in driving profitability overall. I'll talk... Well, I remember in 2019, one of the goals with the transformation was to move the North America business away from just being data savvy to being more data driven, to really understanding what levers we needed in our organization to drive, to drive profitability, and I'll share with you an update on that. And finally, the accelerated integration. I mean, Tony talked to you, and Magnus has talked to you, what the work that's been done in the last 18 months in North America by Kevin Engelhardt and his team, and the entire team, to really accelerate the integration of the Securitas Technology and STANLEY business has been amazing.
Not only has it prepared them to be, you know, a strong and solid as a kind of a stand-up, stand-alone business, but it's also prepared us to really focus on driving commercial synergies between the guarding and the technology business. We are positioned. We're doing pilots now. This is an area of good focus for us. Now, in 2020, we had a good plan, but none of us, myself included, expected what would be in front of us in the next few years in terms of unprecedented challenges, kinda listed right there. Transformation by itself is difficult, but you throw in a few of these other challenges, it was tough.
And if it weren't for the resilience, the focus, the strength of a strong North American team to drive us through that transformation, I don't know if we would have made it, but we did. And I'll share with you, again, some of the key benefits of the transformation. Now, in terms of profitability, I think you've, you all understand the trends that we've had in North America. We have seen great growth. Now, these are the operating profit margin trends for three business lines: our guarding business line, our Securitas Technology, and our Pinkerton line. And we've excluded SEI's Paragon, because that is now reported differently. And arguably, you'd look at this and say: Well, you know, yeah, you had an acquisition that was positively positive and accretive to you in OPM, and that is true.
That has helped to lift our margins in the latter years. But I will tell you that the underlying margin development in every business line in North America has been positive and moving in the right direction, including guarding. That's trending in record OPM levels for the last couple of years... And when I'm asked about what are the reasons why you're seeing profitability improvement in North America, it really comes down to the three items you see on the page there. How we drive value realization through our transformation, how we focus sharpening our sales proposition and our sales activities through data and analytics, and drive margin through value. And lastly, how we really start to leverage the technology business, the solutions and technology business, as a key differentiator and a high-value solution to our clients.
These have gotten us here, but these are important because these are also the three points that will move us from this point forward, right? Let's talk about each one in a little bit of detail. On the transformation, I'm often asked: What is the most positive impact you've seen from the transformation? If you remember, we started in 2020. My answer, when asked, is, is clearly this: it's, it's having transparency and the ability to understand the performance in our business, right? The transformation brought us data, it brought us insights, brought us the ability to know the levers in the business from across the business, whether it's HR, finance, operations, to really start to move and manage the business. I've put a few examples here.
We have better visibility on the contract profitability in our portfolios, which allowed us to more effectively manage active portfolio management, right? We focused on labor productivity. In North America, with the Guarding Services being so large, labor is a huge cost, and driving efficiencies in labor and reduced unbilled was easier for us to manage because of the transformation. We went through the hiring crisis in 2021, 2022, following the pandemic. We were able, with a new system, to digitize the front-end process and drive speed of hire, which changed our dynamic and really helped us weather a very tough time. You know, we focus on analytics and data to drive sales, and I'll show you that in just a minute. We've made some tremendous progress.
Back office automation, focus on digitization of our AR processes and better insight, is helping us drive better cash flows in North America, and this will just continue. Something that's incredibly important is, you know, we do want to continue to be an employer of choice, and our employees are asking for a better connection to the business. So we're using the new system and digital tools to really increase our value proposition. As Sune and Frida will talk about, one important area that I'm excited about is we now have visibility on how we drive, with the data, better sustainability results. So there's just tremendous... And this is just a sampling of the things that we can do by having better visibility and managing the profitability.
Now, that's exciting, and we'll continue, but the focus now is really on what we do next with this, and that's what you see on the right. That's kind of an illustration of us and our focus around digitization. How do we connect our services, our protective services, our solutions and technologies, with the three key stakeholders in our world, right? Our officers, our clients, and our managers. And how do we create strong digital connections that we can then understand what's happening across all of these entities in real time? This digital ecosystem is something we've been working on now for the last year, solidly. It's a very data-rich environment. And with this data-rich environment, we're able to use machine learning and AI to really leverage and gain insights into the business. This strategy is not three to five years out.
We are using AI now with the data we have, with the connections we have, to really gain insights into the business, into efficiencies and the client value that, frankly, we didn't see with the naked eye. It took AI for us to build a process and gain that insight. We're just starting this, and I'm very excited about the potential that it brings. But this isn't easy. Connecting all those pieces will take some time, and we're working on that. Now, when we get into sales, this is a really exciting development for us. So in the North American market, very robust market, roughly $45 billion in available market, split between contract and proprietary security.
As you see in the, in the highlight there on the slide, we generally participate in 70%-80% of the available market in a given year. We don't participate in everything because we have our, our filters, right? It needs to match our strategy. It needs to be something that is not a, a low-margin, low-wage, commodity-based type of opportunity. It needs to be something that we look at and understand if there's- they see value in what we bring, and if we can work to develop those clients into more than just guarding, to, to solutions and technology. So we, we are selective, and we also focus on that specialization, and it's been a lot of work in North America. How do we elevate the quality of services?
How do we really meet the demands and the needs of our clients through specialization, whether it's specialized services or specific types of security and solution combinations in specialized segments? When we do specialization, we can command premiums and margin because they'll pay more for better services and higher for specialized services. Nothing illustrates this more than what you see on the right. And really, it's a look at our sales progress or sales volume on an annual basis over the last six years. What you'll see clearly, the last three years, we've been able to generate new sales annually in North America at 35% higher than the preceding three years. So we're dialed in in terms of sales volume. But the validation on selling on value and delivering value to clients comes in the margin development.
'Cause typically, when you sell, oftentimes it comes at the expense of margin when you're driving good growth. We've been able to execute on both. This is really important for the North America story as we move forward... Technology and solutions, the big one here, the exciting one, right? So when you look at where we were in 2020, roughly, what? 20% of our revenue. This was actually good, mostly solutions-based technology. But over the last three years, we've been able to sharpen this, and now we're at 36%. And I do understand how accretive the acquisition is to this number and this revenue mix. But we have underlying the acquisition, been able to really strengthen our solutions and technology offering within the guarding portfolio.
In fact, in guarding itself, solutions has grown at double digits the last two years. So good, good growth, good run rate improvement. What I've tried to illustrate on the right here is a really high-level kind of client segmentation of the guarding portfolio, $4 billion-$4.5 billion worth of trusted guarding clients. What I'll do is I'll segment that client portfolio right down the middle, 'cause we've got two distinct strategies. That small to medium enterprise client base of ours, which is a good portion or a smaller portion of revenue, but a big portion of our sites. Those are the clients that really connect and see value in solutions, and that's where we have had the most success of driving solutions.
These are clients we need to take care of because these are clients who will develop into medium and large and larger clients down the road. And so we come in with our expertise and develop a compelling value proposition and a partnership. These are long-term clients for us. When you look at the large and global national accounts, this is the exciting part, not that small and medium aren't exciting, but this is where we really see great opportunity. It represents the majority of our revenue, clearly where we tend to sell the best, in the large and global accounts. We've had good success with solutions in that client segment, but these are the clients that really are looking for what Tony discussed and what the technology capabilities are in North America.
We've got tremendous opportunity to now leverage the technology capabilities into this client segment. You know, these clients are buying technology today. They're just not buying it from us, and that relationship, that trusted relationship, is there on the guarding side. The key is, how do we leverage the relationship and drive good synergies? Big opportunity for us. From my perspective, growth. Growth comes when there's value and when the clients see value in your services. For us in North America, it's been a heavy focus on really elevating the client value proposition, and it's not something we just started last year. We've been working on it for years. To me, there are four key areas that really separate us from our competition, right? The first is our power of presence, and by that I mean our physical presence.
Clients are demanding proximity to local sites for local support and development. We hear it from them regularly. In North America, we have the largest brick-and-mortar footprint of any provider in the industry, and our managers are out there locally managing and supporting, and the field teams and support around them are doing that as well, and this is a strong differentiator for us. This isn't about consolidation and large management portfolios. This is about small, close to the client, and elevating and developing your clients. So that's a big one. The end-to-end offering. Look, as you see here, we have technology, we have premium guarding, remote mobile guarding, we have solutions, we have risk advisory, we have intelligence. These are all Securitas solutions, right? Protective services.
We look at our competitors trying to replicate this model because it's the only model in North America with a fully integrated offering. They replicate the model by building alliances and partnerships and small acquisitions, trying to put together pieces to match what we have under our roof. And so that's, to me, is an incredible strength that we have a responsibility to develop and make sure that we are able to use that within our market and our portfolio. I talked about the connected system. The advantages have been amazing for us, and we keep looking to leverage that.
But when I talk to my team and I look at the landscape in North America, at present, there are no competitors, large or small, that really have indicated any sort of significant modernization of their system. And as we've mentioned, this isn't easy. And you think about our deployments in 2020 and the two or three years we've now had to really optimize that. I tell my team we've got a couple of years advantage, at least right now, of any competitor in driving efficiencies and service in our business. And now we're in the process of building that advanced ecosystem. You cannot do that without a connected digital ecosystem or a strong machine or central system to do that. So we have that first strike advantage that we have a responsibility to leverage.
The last piece on this is, it seems kind of small, but it's not. It's the most important piece of a strong value proposition, which is delivering strong service delivery and client engagement. I was in Houston with a conference with my senior leadership, and we brought four clients into Houston to talk to our senior leadership. And we asked questions, I interviewed them, and I asked them about what do they look for in a provider or partner? And they said: "Look, we don't want providers. We have providers everywhere.
What we want in security is a partner, and the way you become a partner is by understanding our business, asking the right questions, learning our culture, being two steps ahead of me, bringing in ideas, thoughts, and innovation, bringing technology and solutions where it's necessary or needed to solve a problem. We don't want providers. We want partners." This is a really big one here because COVID, the strain of COVID over many years, has kind of separated people from that sort of engagement with clients. We're no different. We've had the same internal focus for a while, but I'll tell you that the last nine months, our focus has been moving bandwidth that we're creating through the transformation from our managers into now our clients... redirecting time, attention, and putting everyone's focused on making sure we're doing what our clients told us they want us to do.
Really important, right? Because everything is great, technology is great, but if you don't have the relationships and build the trust and credibility, you're not gonna advance those clients, and you're not gonna move them from guarding to technology. That's key. So as I reflect on the last few years, I think, you know, 2020, the transformation when we started that off, we had, you know, a pretty significant ambition. And despite the challenges, I'm really proud of the fact that we have strengthened and sharpened the business. You know, we've driven the transformation and driven some of those great efficiencies from that. We focused on sales and not only driven sales at scale, but also the margin development. And we, of course, continue to leverage our work and the acquisition on solutions and technologies.
But those last four years, why they've been great, to me, it's just really that we've created that differentiated foundation in North America that no one else has. Hence, my opening statement, "No one can touch what we can do." And now it's really our responsibility to leverage that. So you think about the modern system. We'll continue to drive efficiencies, internal efficiencies, cost reductions, but we'll continue to focus on elevating that ecosystem to drive more intelligent services, which will be higher value to our clients, right? We'll continue to focus on sales, doubling down on that specialization to be able to command the premiums that help to drive our margin, and we'll continue to elevate that value proposition I just shared to you. And lastly, and the most exciting piece for me, is looking at where we are with solutions and technology.
I thought in 2020, we actually had a really good offering, and we did. We worked it. We, we really developed solutions and technologies in the guarding portfolio over the last four years. But when I look at the acquisition, and the talent, and the expertise, and the footprint in North America and globally, and what we have, this is a, this is an amazing offering now. You know, and Securitas Technology as a standalone business is a powerhouse. But when you combine that with the guarding business and an established portfolio of trusted relationships, and you segment it, and you find the opportunities to really bring value to clients, that's where the acceleration happens. That's the magic. So I'm excited about the next chapter. I appreciate your time, and, I'm delighted to pass it over to my colleague, Henrik Zetterberg from Europe. Thank you.
Thank you, Greg. Hello, I'm Henrik. I've been leading Securitas Europe now for 18 months, and I'm very proud to stand here representing all our employees in Europe, working every day to provide security and safety to our clients. Looking at Europe, we have a unique market position. We are the market leader in most of our markets where we operate. We have invested in our solution organization, and we've seen a double-digit growth in the last couple of years. We're also driving a business transformation where we see concrete results already. In the next 22 months, my focus will be to, based on this market position, and I think together with what Brian presented, a global team, to really benefit from that across the borders. I will continue...
We will continue to invest in our solution team, but together with the capabilities now of Securitas Technology, really elevate that transformation. Speaking about transformation, we will now continue the business transformation, focusing on leadership, on mindset, on commercial, while deploying, in a very cost-efficient way, our new standardized IT backbone, supporting our strategy. But I'm the first one to admit that the guarding margins or the security service margin in Europe have not been what we expect or want. So my main focus is also for these 22 months to really drive active portfolio management, drive a better price structure, and drive operational efficiencies in order to improve that part of the business. But then starting by looking at our market position, we have 120,000 employees in Europe, or more than 120,000.
We have 700 branch managers every day meeting our clients. Think about it. It's a very exciting opportunity, having 700 people meeting the end client every day to be able to develop our business. But this requires the right leadership, requires the right mindset, and I will come back to that point. We're also present in 21 markets. We're the market leader in most of our services in these countries. So with that specialization we can also make sure that we become the market leader in the totality. We also have one-third already of our business in technology and solution. One-third that we've built both on organic growth and now together through the STANLEY acquisition. This is a beautiful base to develop our business on. So what we will focus on is two things. We will...
Or three things. We will focus on to continue to develop the technology and solution business, and that I will come back to. We will drive security service profitability through active portfolio management, through pricing, through cost efficiency, and labor productivity. I will come back to that.... We will do this while transforming our business, both on the IT side, but more importantly, on the business side, and I will come back to that. M&A is also a part of it. I will not come back on to, to that because that has been covered by Magnus and Andreas already. But so 8% journey in Europe, is it possible? We have already four countries over 8%. We have two countries over 10%. 18% of our sales is already above that level.
So when I took over Europe, took over the leadership of Europe, I sat down with my team and said, "Okay, what's the best practice that these countries have, that we can use now to accelerate in Europe?" And the first thing we picked up was the change in different mindset and leadership. So what we are—It's not evident that the mindset you've had to take us to this day is the mindset that is required to take us to the future. Last year, we have assessed most of our senior leaders, and this is on country level, on area level, but also on branch level, to make sure we have the right mindset. We have continued to invest in the solution team. We've also strengthened the financial follow-up, and Greg spoke about the importance of performance management, and here I fully agree.
Now, when we have harmonized how we work, we worked and we made sure we had the right people, now we're measuring them towards the accountability they have. Then we are also changing our commercial agenda. We're going from single service to multi-service. We're making sure that we do not sell everything to everybody, that we focus on the right segments, the right clients, and the right services that provide the highest margin profile. And we're doing this while transforming our business, both on the business side and on the IT side. But let's start with somewhere where I believe we've been successful, and that is on the technology and solutions part. We have 55% of our bottom line in technology and solutions. We're not a guarding company in Europe. We are a security solution company.
We have grown 17% in solution in the last two years. On the technology side, through the acquisition, mainly, our footprint had really increased, and we are much more active in the market now in the technology space. And which is also presented, as you know, the margins and the stickiness on solution technology is higher than on the guarding side. But the guarding portfolio is important for us. As I said, with the right leadership, I think Greg said it well in his presentation, I think 75%-90% of the portfolio can be converted. We see the same here. So this is a good foundation for us to continue to grow, both on the margin side and into solution and technology. And now, with Securitas Technology, we are even stronger. Now, we are the market, one of the market leaders in most of our countries.
So now we can approach both, if you look on the SME side, here, we often come in with a one-stop shop. They want peace of mind. So we're offering guarding, other services, be it fire, together with technology in one contract, one monthly fee, providing peace of mind. While on the larger clients, more complex clients, we come in, we provide guarding and fire, for example, again, but together with technology, where the client makes an investment in the technology, we provide the maintenance, we provide the monitoring, and the fire, and so forth. And I think the very exciting part is also the cross-border clients, which Brian spoke about. With our market presence in Europe, often we're the only one who can provide a consistent service across the borders to our clients.
I think one good example of these commercial synergies that we're now looking for and working on together with Securitas Technology is France. It's one of our biggest markets. It's where we have a good guarding presence. We have a good technology presence. Now, the commercial team, as a start, have identified 500 clients where we will now drive the totality, and this goes both ways. To start from a technology side, these clients often have mobile services, so monitoring service today from other providers. Now, we can offer that. We can offer our totality to them. On the guarding side, I think Magnus said it, too, that most of the clients, well, almost all clients need technology. On the guarding side, these clients need technology, but they're not our clients today.
Here, with the One Securitas approach, we go out and offer this. France is only an example. This is now being done in each and every country where we have the presence of our guarding and technology side. If you look at the business at European transformation, there are two parts to it. One is the IT side, but I think more importantly is on the business side. I think here we have taken important steps already, and that's important to know. On the solutions, which we invested a lot in a couple of years ago, I mentioned we've seen the development.
On the organization, I mentioned that as well, we have assessing everybody, we're streamlining the organization, making clear on the accountability. On the client side, I've also spoke about that, you know, we're shifting the client, our commercial focus from single service to multi-focus, focusing on, on key segments. But we've also deployed MySecuritas. It's a client portal, 100 or over 100,000 client sites connected, where we provide up-to-date, relevant information for our clients. And the usage from our clients, the appreciation is fantastic. But this is also a great sales tool for further digital services that Martin will speak about later. On the people side, with our 120,000 employees, we have deployed a standardized recruitment system. We've seen a doubling of our hiring rate in the countries where we've done this.
This, of course, means that we can, we can tackle the labor scarcity, and also we can reduce our subcontract. If you look at from the IT side, our starting point was fragmented, obsolete, and underinvested. So what we've done, we've designed an optimal and integrated platform that's really supporting our business, touching most parts of our, of our operation, be it planning, recruitment, the technology, or basically all the key aspects of it. We've also learned from the U.S. They were a couple of years ahead of us, so we learned on the design from them to make sure that this is really supporting our business. And we have also done the rollout in key markets in Europe. Now, we are shifting gear. Now, we're going from the design and early to a cost-efficient and systematic, industrialized rollout.
And the values we're looking for, and the values we start to see where we have gone live, are quite similar to what Greg spoke about. On the labor productivity, we have now a modern planning system. We can plan with less people, but we also can plan in a more optimized way, making sure that we reduce the overtime, reduce the subcontracting. But we can also show that we give more power to employees. Those employees can impact their own calendar, which reduces the sickness, which also reduces the churn, which is highly beneficial. We can now, based on standardized ways of working, we can start using shared services on country or above country. We can drive the same performance management that also Greg spoke about. And last point is the AI-enabled savings that we start to see already.
What we, for example, have done, and we used AI to look at our operation to optimize that. We did it in one country that we optimized our branch structure, we saved EUR 1.9 million, just in one country. So we're in a good way on our transformation program. The last part is our guarding portfolio, because, as I said, here, we need to drive a quality portfolio. The first thing is the transformation to solution. That has been discussed. But also, we need to focus on price. We have before, in my view, not had high enough requirement on the price we sell at. This we have changed now. We're also driving much more focused price increase on our lower-margin clients. But where there are low-margin contracts, where we cannot develop, there are such, we need to exit.
What we also put in place, an incentive. For the first time in Europe now, we are most of our senior leaders have incentive only in improving the margin on Security Services. Good example is Germany, which is the biggest market in Europe, which, with the management team, sat down, looked at this whole menu and started to implement the plan. Last year, we saw fantastic development on their Security Services margin. But the interesting part is that we had very limited churn, because if you go out with the right mindset, the right leadership, clients are prepared to pay. This is one example. Netherlands is another, which did the same thing last year, driving the same effect.
We have done this in all countries, but this year, we're driving it with a much more focused activity to ensure impact. So to summarize, we have a fantastic market position. Now, together with Securitas Technology, we are even stronger. We are making the shift, or we made the shift in leadership and mindset, which is something that will help us. We are modernizing our IT structure, but we're also modernizing our organization. That will help us, and we're driving a very focused approach to a quality guarding portfolio. And with that, I'm convinced that we will support the 8% journey. I spoke about MySecuritas. I spoke about AI before. Of course, who am I to speak about it? It's better to leave it over to Martin Althén, leading Securitas Digital, who can tell you more about these activities. Cool.