Securitas AB (publ) (STO:SECU.B)

Investor Day 2019

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Dec 5, 2019

A warm welcome, everyone, to Securitas Investor Day 2019. And to you who have come here to our headquarters in Stockholm, and to all of you who are participating through the webcast. I'm here today with a quite large part of our group management and they will present to you during this afternoon And there will also be lots of questions and answers sessions for you. And by the way, my name is Makiara Grequist, and I am Head of Investor Relations at Securitas. And by that, I would like to hand over to our CEO, Magnus Alquist. Thank you very much. I'll sort sweet. Good afternoon everyone and great to see you all here. I think we should just get started September last year, I met many of you. And back then, we were talking about the fact that we will review strategy to build Securitas for the next phase. And, we have achieved quite a lot since September year. So today, obviously, a great moment to also give you an update about some of the things that we have been working on. So what have we done? 1st of all, we have been, we have launched our strategy internally and we've also updated our financial targets. But also to support the strategy, we have also made a number of changes in the leadership team. To so basically the team who will help and the strategy in the next phase of our development. And we're talking about transformation and this transformation we are doing to reinforce our leadership position, so not only strong today, but also that we're building significant strength for the future. Let us look at When you look at this, we have built this success in Securitas always with a long term value creation focus. Always based on good people, good values. And I think one other thing that really stands out about securities is that are also fully focused on security services. We're not drifting into a lot of other industries. We have our focus. We want to be the best at what we do. So when you look at the strategy, we're not really changing the direction. We are rather now transforming like I said to reinforce our leadership position. And this transformation you can categorize or group that in 2 main areas. And if you look at the first one, which is the lower part of this picture, these are the things that we are doing to modernize and to digitalize our operation. And why do we do that? Well, we do that because that will help us to drive efficiency and also enhance productivity. The upper part of this picture is the work that we are doing to strengthen our client offering. And this is obviously a journey that we started 5 ago when I look at our electronic security, when I look at our solutions capability and for the next phase, we are also now building our data driven intelligent products. So I am really proud to be here today. Together with the team to talk about this transformation. But I should also mention on this slide that we announced at the beginning of this year that we doing an extensive business transformation in North America and that work is now ongoing. But we are still evaluating what we are going to do what is the best ROI for the mid and the long term in Europe. So that is also something that Peter, you are going to talk about that in the European section in a while. But I am standing here today, like I said, and really proud the leadership and very excited about the journey that we are taking with the team to lead into the next phase. So when you look at this team, I said we made a number of significant changes in 2019. Bart and I were saying when we were planning this day that we wanted to involve more, of the leaders from Securitas also for you to have an opportunity it. And I am sure that you are going to appreciate the opportunity to also then talk to the people who are presenting the people on this side, but we also have a number of our leaders in the room, who are going to be here for the entirety of the debt. So we are entering 2020 with the strongest team in the security services industry. Right now, I would like to shift the focus then to our current position and also then some of the performance dynamics that we have in our industry. So I spent quite a lot of time with our clients and I always take the opportunity to ask them what are the things that we are doing really well? What are the things that we can improve? And The trust in our brand, a brand that stands for trust and reliability always comes out. The strength in our offering is always feedback that I'm getting as well. We might have many customers that are guarding versus electronic security customers, but they appreciate the protective services because they see they can build with Securitas for the long term. Then obviously we have all of our great people and our people 370,000 make a difference every day, but then we also have global presence. Global presence, which is relevant for some of our customers and that's something that a few of the team members will talk about a little bit more today. But we're also staying true to the principles based on which we have built securitized from the beginning and that is to be closed to our client in relationship, which is never too far away. So I think that is one other aspect. If you're looking then at the performance mix, we are growing faster than the market and that is then thanks to the offering that we have, but it's also thanks to delivering good quality to our customer base. If you are looking at margin, the margin has been stable for a number of years but there, the dynamics are a little bit different. If you're looking at the solutions and electronic security, we are that is really helping the margin And we also look at North America and the tremendous achievements that we've had for a number of years in North America dry the the guarding margins in Europe and partly also in Ibera America that have then had a negative impact and that obviously something that we're now working to address. But from a margin perspective, I think one other thing which is important to highlight me as well is that we are also investing a lot in our strategy and that's obviously a deliberate decision that we are making because we believe that we are well positioned and there is great opportunity for ROI in the mid and in the long term. And then if you're looking at this slide on the lower part, you also then see that there are some one time effects. And those are obviously one time effects that are related to the transformation programs. That we are driving. But you would also see for the first time maybe in a securitas slide that we also highlight research and development. And the R and D is very much related to the investments we are making in data driven innovation. So that is how we're leveraging information and data to then invest and build intellectual property to enhance knowledge and the services that we bring, but also to really distance our sales from the competition in the next 5 to 10 years. So, the ambition here and I think basic position is that we are winning in the market and but also wanted to set this in a bit because we are going to cover all of these together with the team during the day to day. But in light of the strategy, we also updated our financial target so we have 3 specific financial targets and then one strategic ambition. And the financial targets EPS that is unchanged. That is the 10% over the cycle. We also then due to net to IFRS changes updated as well. So, we are now measuring net debt to EBITDA. So, we've also then clarified that target, but also with a cash conversion target range as well between 70% 80% during the years to come. The dividend policy is unchanged. But then we have also announced this morning externally our ambition to double our electronic security and solutions sales over the we're able to make happen together with the team and also the journey and the capabilities that we now have as a company. Let us now shift the focus of it to the external dynamics. And this is a simple picture I think some of you have seen before, but basic message here, this is a good industry to be in. There is growth in the security services industry, but there is also a good innovation opportunity and the innovation opportunity is enabled through advancements in technology on one side and then also we will see significant opportunity in terms of leveraging the data and the information that we are generating, thanks to our presence. But it's not only a good industry, it's also a huge market. So, when you are looking at the guarding outsourced guarding business, this is a SEK 130,000,000,000 outsourced guarding markets on a global level. And we also see an systems integration market opportunity of around NOK 70,000,000,000 and that sounds net Toni We'll talk more about that Ron in terms of our electronic security footprint and also the ambitions as we go forward. So that is a little bit of the market, but I also mention our customers because the client needs are also changing. And we are seeing in the dialogue with our customers, more demand for integrated solutions, more demand for what is popularly called as a service. We are also seeing that a lot of the focus and the expectation from our clients is going from looking after assets and buildings and more looking after the entire value chain and people. But there's also a number of clients who are saying, well, you have such good knowledge. You're investing a lot now in information and data, etcetera. We also see that there is an opportunity and there is a need as well for the entire security services industry from observing and reporting what has happened to leverage information and data to be able to anticipate and then obviously with our presence been in a good position to also then respond. So those are some of the important client needs that we are seeing in the and if you look at Securitas in this context, we have a very strong position and I'm not going to dwell on all of these areas today because we will cover this in the different parts. But we believe that we have all the assets that are required to not only lead the industry development today, but also in the future. But the most important is our foundation and that is related to our culture, our people, and the values that we have. And now we have also developed a purpose. And when I talk about the purpose, This is obviously something that we decided in the group management when we set out on the strategy journey at the beginning of last year. Not only to build the strategy for the next phase, but also to articulate why is Securitas important in the things that we are doing. So for reason, I would now like to invite Heliana Andreas. Heliana, you joined us at the beginning of this year. It is like a long time ago, but it was in February. Heliana accounts with great experience in the number of leadership positions in customer roles, in marketing roles, most recently with Nordea. The Swedish were Nordic Bank but before that number of years abroad in the U. K. With Tesco and also with Vodafone. So, welcome, Irina. Thank you, Magnus. So, to talk about purpose, we have an important role in society, but we haven't really articulated this that well in the past. So now I would really like to hear you talk a little bit about the purpose but also then to actually share with with the audience here to what is our purpose? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] With pleasure, Magnus? Do you want to click? Thank you. This is a great moment, and it also feels a little bit special. Make your world a safer place. Why you might think when we have so many other things on our plate, we spending time and effort and we will be a purpose. We will be a more successful business in the longer term. And by more successful, I mean that we will be able to make better and more aligned decisions ranging from really long big strategic business decisions to small operational decisions that our 370,000 colleagues make every day. Another really important area for us is recruitment. Recruitment is a huge effort for us as the security industry, and of course, also for us in securitas. We need to be able to clearly articulate what's special about working for us in securitas. Because if we're able to attract great people and motivate them to stay with us for a very long time, not only we have lower recruitment and trading costs, we will also be able to deliver better value to our clients. Great. So there are long term, there are short term benefits as well. How do we get here? Because this is obviously something that do in many different ways. Can you also explain a little bit what was the journey to actually identify and articulate our purpose? Having a purpose that doesn't feel genuine has difference. So what we did was that we engaged our colleagues from every part of the business, every type job role every geography you can think of through co creation workshops. During these workshops, we talked about what makes me the participants proud to work for success. What is the type of company that I want to be part for the future. And what's really interesting is that although these groups were so diverse, the themes that came out were really consistent. So themes were around safety, in the broadest sense of the word. It was around pride in the role you that we add to society, and it was also how we serve our clients. So actually with those themes coming out, it was fairly straightforward to capture that into one sentence. And how has this been it that it has been received tremendously well by people across the business. People see it as a compliment and, an addition to our already strong values and our management principles as outlined in our toolbox. We want our purpose to be a leadership tool, And of course, in a company of our size, that doesn't happen in weeks or even months. It takes years, and we have a very steady plan in place to make that happen because we are convinced that having one common clear way of articulating our common purpose not only makes us better decision makers, it also further strengthens our culture and it enables us to build greater global alignment around the implementation of our new strategy. This is obviously very important to us like Heliana has highlighted, but it's also part of something that we are then letting guide our strategy and the work that we are doing for many, many years to come. So, thanks a lot, Milena. I'm very proud of the purpose. I also then asked a number of our colleagues, a number of our officers as well who are working with clients And this is something that is really resonating like Irina said with everyone within the business and that is obviously something for people in terms of business like extremely important. But this is obviously a purpose which we are then clearly relating as well to our core management principles and our values. If you look at the success, like I said, we have built success based on wanting to be a good company. Good ethics, good values, good people, but then also the fundamental business principles and management principles that we have captured in our toolbox. And that toolbox was developed in the late 90s, but it's as relevant today as it was back then. And that is also something which is really helping and defining in a clear way what is secured to us and also how we operate and how we are managing the business over time. But we also put in more emphasis on sustainability because we have a big opportunity and also big responsibility to actually influence this world in a better way. And we have 5 main focus areas that you see on the left hand side. Now just one to give a few examples. One of those being working conditions, we are working with health and safety metrics and also now activities internally to make sure that we do a better job every year. But we also have a number of customers that are very keen on working together with us on these important areas as well. Diversity, we set clear targets at the beginning of this year to also enhance our diversity within the company And that is work that will stand down in the organization, but also then with strong endorsement from our board. And then in terms of emissions, we also have, we obviously more of a service based company, so we're not producing and polluting that much, but we have a significant fleet of vehicles with our mobile officers. So that is also something over the last 10 years that we are continuously pushing to make sure that we improving as well the impact and that we then also optimizing in a better way to limit the negative impact from those. So that was really to set the foundation a little bit. We have a strong position. We have a great team and we also now have a purpose. But in the strategy work and we are now shifting to that. This is really then the meat of the presentation for the remainder of the day. What are the things that we are going to do? This slide is important because this is then highlighting our wanted position to be the intelligent protective services partner. And there is quite a lot of meaning behind all words. I think one important part, you know us quite well many of you and you know that the leader in protective services, that's something that we have talked about. Already back in 2015. This is an evolution of a winning strategy. The intelligence is more related to the added knowledge that we are bringing, leveraging the presence that we have, leveraging the data and the information that we are generating. But then we also put in the clients in the middle and that's the reason that you're then seeing 2 people as well in the middle of our protective services. Overview. And we've also then identified what are the things that we need to do to reach that position and that comes to to 3 main focus areas and we are going to cover this in quite some detail today. First one is our client engagement. We have a good position. We have great offering, but we have also identified we can continuously do better in terms of how we engage with clients. 2nd one is how do we strengthen our protective services offering but not only then in the individual stand alone services, but also how we're combining these services into solutions for our clients and adding innovation. And the third part, we are a big organization, we are also then putting a lot of emphasis on trying to find more opportunities to drive efficiency. And efficiency is important for us because that will help free up resources that we can invest, but that we can also help, improve margins over time. We're going to talk a lot about this together with the team in the next couple of hours, but to sum this up, we have a strong position We have a clearly defined wanted position. We have a growing and a dynamic market, but we've also identified the things that will we need to do to make sure that we are maintaining the leadership for the years to come. And I also say we have clear targets and metrics and a team organization and leaders that are committed to really drive this development now secured as winning also in the next 5 to 10 years. So, with that, very happy to hand over to someone who needs no introduction and that is our CFO, Bart Adam. Welcome Bart. Thank you, Magnus. We welcome also to all of you here in our head office in Stockholm and a warm welcome to you out there at the web. And I'm very proud to be standing here today and presenting to you. Maybe my work, but even more important, the work of all the colleagues from the CFO team here in Sweden and around the world. And Magnus explained to your strategy and now invite you to take a deeper look with a financial lens on that strategy. And it's all about achieving our goals. And the first step in achieving the goals is setting clear targets. And that is what we have been doing. We have been setting clear targets 3 financial targets underpinned by our strategic transformation ambition. The targets are clear, I think by themselves, financial performance, EPS, no change, financial stability, there we have reworded that, reworked that, with a net debt to EBITDA of 2.5 on average and then an operating cash flow of 70% to 80% of operating income. Dividend policy unchanged. Clear targets, but then driven, as I said, also by the strategic ambition to double in 1,000,000,000 Swedish kroner measured, the part of solutions and electronic security from where we were in 2018 to where we want to be going forward. These targets will set and drive our entire behavior within the company. Now Before we're going to look at how we're going to achieve these goals, I would like to take a look at our recent performance. And these are, or well, current targets, I should say, as of today, or previous targets, And most of you I think are familiar with how we have performed against these targets. And I think it's fair to say that over the past 5 years, we have been able to deliver a strong track record. Sales, we have had on average organic sales growth of 5.2, and that has been then further supported by acquired growth on average over the period of 1.6, adding then in total to 6.8% real sales growth. And that has This has then turned into from the top line to the bottom line into EPS. And our EPS has grown over the period from and that has margin has been stable or has been has seen a slight increase then over this period. More to understand is that there have been very different dynamics behind this in the different divisions, and we will come back to that later on in quite some detail. And also it has been impacted by group investments and we will also share you with you some further details around that. How has this been translated into cash flow? Well, I think over the period, we have had a solid cash flow. This supports of course our organic sales growth and investments into the strategy. The average operating cash flow has been 75% of operating income and the free cash flow has been on 64%. I should also say that we have had good 9 months of 2019 when it comes to cash flow, And I should also say when you look at these numbers here, 2016 2018, they were a bit on the lower side of our target range, but these were years with very good growth. Respectively 11% and 8% real growth and the real growth in our industry in our company consumes some cash. These are the numbers, and let's turn back to the strategy now. It's fully geared towards creating value for our clients, but it's also geared towards strength and and improving our competitive position. How do we do that? Well, by providing a mix equipment. And that really sets us aside, I think, from the competition. And that is also driving our operating margins. I believe you are very familiar with this chart. Maybe you have seen it too much already. I don't know. But in any case, this is how we have been talking the last years about our margin and how it can move in a contract if you go from on-site guarding to the different services and ultimate to solution and electronic security. While this is, of course, a conceptual picture, we will show in a few minutes more in detail the actual reality behind this. But first, how have the sales moved? Well, In solutions and electronic security, we have moved from 6.5 in 2014 to 2018. To in 2018 to 20.5. And this is what we want to double now in the years ahead of us to 2023. And there has been a strong evolution across many of our countries. Many of our countries have helped to drive this sales number. If you look here no country which has more than 40% of this targeted sales as a percentage of its total sales. Now in 2018, we had 5. If you go below that, we had 4 countries in 2013, which were between 30% 40% In 2018, we have 7. And if you go into the bottom there, we had 30 seven countries with 0% to 10% and that is only 13 left. Still, it's starting left, which means that there's also opportunity there to bring up those countries. So what we learn here that 40% to 60% is possible and there is still potential left to leave to move a lot of these countries up to the upper part of this table. More important, what does this mean to our margin? And this is a picture you have seen before as well, we have talked about that last year. And now we have plotted again for 2018 or top 15 entities on this chart. And we have put them according a percentage of total sales. And then you can see the correlation. And we have taken away 3 out liars and they are well known guarding outliers with 1 in Green there with a very exceptional high operating and I can tell you have really studied that as well in detail and 2 other ones with exceptional low operating margin. We come to an R square of 0.82 and the correlation between those 2 dimensions. So I think we can say that there is a clear driver, solutions and electronic security are a clear margin driver for our entities. But I shall also say that there are older drivers as well. And here they are. These are our 6 key performance drivers And we need to understand them quite well. And we understand them quite well. It has to do with the type of markets we are in has to do with our leadership and our own competitive position in that market. How well are we on top of price and production costs Then the next one is how do we manage our cost base, direct and indirect, how do we develop our protective services and how do we develop or solutions and electronic security. While there are 6 distinct key performance drivers, I should also say that they reinforce each other. They correlate together very well. If you are stronger in 1 or 2 or 3, you will tend to become stronger also in the other ones. And that is so a key thing to understand. When you look at the table, you see that the distribution of sales in Swedish kroner of operating countries and regions according to their operating margin in 2018. And you see that we have SEK16.5 billion achieving an operating margin of over 8% and 1,000,000,000, achieving an operating margin between 6% 8%. You also see that we have SEK 7,200,000,000 below 2%. And What we learned from this is why the majority is, of course, why you could expect them in the middle there between 4 and 6 that there's a large part that is much higher than that and also that we have opportunity left to move basically the low performers to the high performance side of this slide. So more than 6% and even 8% margin is possible in our industry. Now, how does all of this play out at the group level? You are familiar with these numbers in blue there you see the sales, how the sales has developed. In the green, in the bottom, you see how the solutions and electronic security has developed as a percentage of sales. And then you also see how the margin has developed in orange. And then you see in the bottom basically how the operating income has developed as a number. Swedish kronor. I will not dwell too much too long on this one. I think it's even more interesting to look at the divisions. North America, I think it's fair to say we have seen a very strong development over the last years in our North American business. This is what I would call strategy execution at scale. We have really benefited from or scale in the United States or position or leadership position from our focus on price wage, from our focus on indirect cost and all so from creating transformation at scale. The investments that we make there, the acquisitions that we have made have come in at scale and we have been able to drive the business with our strategy. And you will later on learn a lot more about that from Tony and Greg how this has been going on in the United States, but even more important, how they will continue to drive this strategy and how they are ready for the next move. Turning to Europe. We have followed the same group strategy, but I would say with a more diversified execution. It has been outcome also on different levels on average. This is the picture that you see, some have really well performed, some have less performed. But going forward and Peter will talk around that as well is how can we further drive the sales mix? How can we optimize scale and specialization, also taking in learnings from North America. Still during this period, the operating result has moved from SEK2 billion to SEK2.5 billion. Then turning to Ibera America and you will later on meet George who is leading that business, we have been confronted with 2 different realities in this business. We have LatAm and then we have Portugal and Spain together. And you could say LatAm was going very well until 2014, 2015 and it was the other way around in Spain, Portugal maybe. And that turned around also around 2014. Then Spain started to take off again while Latin America was a bit more challenging. And then this results in this picture. What we see today, we see very good potential in LatAm based on what we have built already, but we also see that the Spanish case as such is really an interesting one to understand its numbers and it's almost a laboratory on how our strategy can be developed and George we'll very much we'll talk to you about that and be happy to share more insights of that with you. Now we have looked at the performance of the business and the 3 divisions, and what I would like to talk to you now about is the recipes on how we will use what we will use and our actions that we will put in place to take the next step. And the next section is then more about, yes, how will achieve actually our goals. And the first real one and probably the most important one is this one. That is really our 1st line of action and focus going forward. And here also I promise to share you a bit more in detail how our actual company looks like compared to the conceptual slide. On-site guarding represents 72% of our group sales and it comes in with a margin of 4% to 5%. Mobile guarding, 5% of group sales, operating margin, 7% to 8%, solutions, 11% of group sales with an operating margin of 10% to 12%. Electronic security, 10% of sales if add those to go 2 together then we come to the 2021. And that comes in with an operating margin, which has a bit larger spread 7% to 10%. And corporate risk management comes in with 8% to 10%. This is of course a distribution again, and I take out the relevant reference and there are outliers in every direction. The total then is then 100% of course, and this is then how it's built up over the different business lines. And entire goal is to be specialized in each of these different services. Through knowledge, through scale, And at the same time then, mixing them together in a solution and driving, of course, the sales mix format forward. Now also included in there is that we believe we are at a position now through this further specialization where we will focus again more on the on-site guarding. We have focused a lot on solutions, electronic security. We'll continue to do that, but at the same time, we feel the opportunity is there to also talk about and look more about the on-site guarding. And we have very good lessons and you will hear more about that in the next presentations. The next action then is to continue our acquisition will continue to be a part of our growth strategy. We are mostly focusing on electronic security. We have focused on that. You can see here in the blue. That is where we have spent our money but we will mostly focus on that also going forward. And the key thing is to add depth and skills in existing markets. That is really at the core of our acquisition strategy. And I should say making acquisitions is wanting How difficult has that made sound? There's another thing and that is to integrate them. And I think we can also show that we have a good track record on integrating acquisitions you will meet Tony later on who comes from a more recent acquisition in electronic security. Next line of action is then to deliver on the transformations. Programs going on. The European cost saving we have executed on that that you could say is fully reflected in our income statements has been executed according to plan. And then in the course of execution is the modernization of our global IT foundation, and the business transformation in North America. Both are on track with 10 benefits expected to kick in in full by 2022 and Greg and Martin will be happy to share more details around that. As Magnus explained, for Europe, that is still under evaluation and Peter will also refer back to that. Now the next line of action is then to prepare more for the future. And that is when all of the global platform shall be leveraged then into using and bringing intelligent services to our clients. We have built a strong central team of 70 people and you can probably meet them here in the offices around it. Normally, this is their space. We invaded here today into their space. And that has also had a cost impact on the group level. We started out in 2017 by building this team of very capable people and there's also central R and D included in there and that has had a cost impact at the group level of 0.18% when we compare twenty 19 actually compared to 2016. For 2020, we plan to further execute on that with another increase of 5 basis points in operating expenses compared to 2019. And that is reported in our segment order. This is our strategy. This is the main actions that you will hear Leer that you will hear more about later on, but I would also like to take a closer look again at finance by itself. We also have a strong focus on cash flow. And you need that to execute on the strategy that I talked about, you need to have a strong focus on cash flow. You cannot do either or one. You need to have capability to do the same together. And there are 2 main focus areas in here. 1 is the biggest line in our balance sheet surprise accounts receivable and the other one is to make investments in line with the strategy. When it comes to accounts receivable, my message is always to the company. The job is only done when it gets paid and it gets paid on time. So that is something we heavily focused on. We have no factoring, as you know, we have no supply chain financing and we want to keep a good focus here. All of is that we shall achieve an operating cash flow of 70% to 80% of operating income. And if you are more interested into the detailed definition, that is entirely according to our own financial model, which is explained actually on page 69, I think, of our annual report 2018 and it refers back basically to what we call cash flow from operating activities as a percentage of operating income before amortization. We have a bit special look way of looking at our operating cash flow. In essence, it means that we take operating cash flow before financial items and before taxes, but after capital expenditures. And that's a bit an outlier to other financial models, but it's important, I think, for you to know that. And these are the things that the operational people can impact. They cannot impact interest rates. They cannot impact tax rates. So that is why we have a different definition there. And this is then our target 70% to 80% of operating income. Of course, strong cash flow, yes, but as much as strong balance sheet. And we have a very strong balance sheet. We have a good track record, supporting the growth, supporting the investments that we need to make, that we want to make paying out a good dividend, all of that is not possible without a good balance sheet. And balance sheet is equal in my world to discipline. If you want to have a good balance sheet, you need to be very disciplined at what you want to achieve, how we price our services, how we agree on payment terms how we manage our risks, all of that at the end of the day will be reflected in your balance sheet and you should act with discipline. The target then is then to have net debt to EBITDA on average of 2.5 in a bandwidth of 2.2 to 3 And if we would have larger acquisition opportunities, I think we would even be willing to go a little bit outside that. Good cash flow, good balance sheet And then there's a final requirement to be able to execute on the strategy and that is solid financing. We do have solid financing in place. We are backed up by a consortium of very strong banks and some of them are here today. And would like to take the opportunity to thank our banking partners as well for your support. We are committed to solid investment grade rating. We have BBB with positive outlook and there's ample headroom in there. And we have an RCF in place, which is undrawn and ready for any backup and we have no financial governance. So with that, I think we have come to the conclusion. And I invite you now to take a deeper look and put in the final I invited you to take a deeper look, put on the finance lens on understanding our strategy, how we can act on our strategy. And then the next picture tries to put it all together. We have set key goals and those are the starting point. If you want to execute on your strategy, you need to set clear goals. And these goals will drive our behavior. Then you need to understand. You need to understand what are your main drivers that you can work at to achieve those goals. And we have we understand those drivers. We have talked about the 6 key performance drivers and how they fit together, how they reinforce each other. And from there, you can then decide on your actions. And the 5 key actions are specialization, driving the sales mix. We will work and deliver on the transformation We will continue to work with acquisitions and we have a clear acquisition strategy and we will drive the company more towards intelligent services. That of course is a nice strategy, but you cannot execute on it if you're not supported by focus on cash flow strong balance sheet and solid financing. That is really what you need from a financial perspective then to support a strategy with. If you put that together, then I think we are in a position where we will be able to deliver. And it's all about long term value for our clients for our shareholders. That is what we are really working towards. And I think with that, I can finalize here. Good. Part. So we are now opening up for the first Q and A session. And I think Mikaela, you will help them moderate. We have about 10, 15 minutes, I think, for this section, right? Yes. We have up until 2 o'clock for the next speaker. So please, if you have a question, raise your hand and a microphone will be sent over to you. Yes. On the 2nd row, it's Karl Johan. Yes. Hi, Karl Johan, Bonavier, DNB Markets. Just when you look at that margin, differentiable different markets. Would you consider in the 23 perspective that all markets are core and all service areas are core for you? Core in what sense? You will continue to develop them and I just said rather than if those them to say increase the lower level of the organization? Yes. So, if you look at the strategy that we are taking, our plan is not to expand and to keep on expanding our geographic footprint. We feel good about the footprint that we have. The strategy that we are embarking on basically requires that we go on deeper in the existing footprints, but we present in 58 countries and to bring the full protective services offering and intelligence services in a fair short period of time because 4 or 5 years in our industry is still fairly short period. That is not possible. So, one thing that you will hear is in the electronic security side, we are focusing on top 15 markets essentially. And where we then want to build Antonio will share more about that. We will be building more of a relevant strong position where can really have a positive impact in terms of the business and the offering. So there is focus in this, but obviously over time, like Bart said, we see opportunity to be able to expand the solutions and electronic security as part of the overall mix and that is something which is rather which is also expected by all the markets, but we're not going to invest broadly in 'fifty eight. We're really focusing on building strength in the most critical markets first. And I would like to add to that, Magnus, that we are building this network now they are important to our global customers and we will continue basically to support better our global customers through this global network. So we do not have a big divestment ID either. If that was part of your question. It's Sylvia from JPMorgan. And just a question around the growth in Electronic Security And Skier Solutions, please. So if we look at the last 5 years, how much of the organic growth in that segment was from substitutions of existing Mann Garding Contracts and how much was from brand new sales? And if we take if we look at the next 5 years, how do you think that will split? And then I guess the balance I suppose will be, M and A as well, but just maybe give us a flavor of that shape going forward. Thank you. Yes. So the insights are, and I will come back and talk a bit more about this later on, but the last side is really embarked on this. So we have built a lot of basic capability to be able to offer integrated solutions. The it does differ quite a lot between different markets. In some markets when we talk about solutions, it's a lot of conversions from existing guarding customers. Now we're starting to also see that we actually convert electronic security customers to more guarding services as well. But it's primarily been a lot of conversions. But then we've also continuously been emphasizing our integrated solution also has a better offer to the clients. So that has also meant that we are continuously looking at conversion but also then driving new sales. But then to split that out an exact numbers, I think that is difficult part, but it is really a combination, but the foundation from the beginning has been more converting existing guarding clients into integrated solutions. Yes. Correct. Yes. So just as you think that the organic growth overall could actually be a little bit higher over the next 5 years? Think we're giving a pretty ambitious target, which is an indication of course, a bar share that as well going from essentially NOK 20,000,000,000 to NOK 40,000,000,000. If you look at the numbers. And there are different factors here. And one is that we also now come into a stage where we have a fairly significant part of the business being solutions and electronic security. So the way is bigger, but we are also learning and we also have to make sure that all the John the countries are also really delivering and driving this strategy as well and there we still have opportunity and also for some to really start to get started in the process as well. Thank you. Hi there. Thanks. Steve Gordon from Deutsche Bank. Just a few, if I may. So firstly on free cash flow and particularly around DSOs, can you just talk about the pressures the issues that you've had in the last couple of years, maybe you've been sort of structurally under pressure, maybe in emerging markets, for example, to have longer DSOs, is this, in some cases, in a negotiation process, are longer DSOs given as a way of offsetting price pressure? What kind of issues have you had there? And obviously, Q3 was better. So do you see this coming back and to what extent? And then I just wanted to dig into the, the higher end technology solutions products, particularly around data that you were just talking about before. How do you see that developing, what kind of proportion of your customers would be interested in a solution around leveraging data and how do you see that fitting into the overall portfolio? Accounts receivable is the single largest item on our balance sheet. And we see pressure from mainly larger customers and is probably coming from their CFOs who wants to also have a nicer balance sheet. And it's part of the negotiation process as you put it out there. It's part of the entire negotiation when you renew a contract or you sign up a new contract. I've seen it beyond almost a reasonable terms. Some companies come up with 150 days and I think that is unreasonable. So we have tried to put up better measure now is also escalation procedures as to when people can approve on those terms or not. And it has to come up to my level as well in some cases. So it's a matter of negotiation. It's a matter also of focusing on it, but also a matter of explaining it to the customer. In our case, If we extend the payment terms with 30 days, it really means we can wait another 2 years to get in any positive cash flow from that contract. Why is that? Well, basically we have to pay out our guards or people every week, every 2 weeks in many cases, maximum every month. And then as we only have 5% margin, you could say, it basically means 20 times that you have to have 20 times 5 And then you add in VAT, which you also have to pay. So if that and the customer has to pay that to you, it basically means 30 days of payment terms means 2 years of no cash. And that is how it is. And that is also what we try to explain. We have explained that to our own people, who then could explain that to our customers, our clients and then you get some more sympathy for your argument as well. And that differs among industries. There are other industries which can we have no really no suppliers to turn this to, but if you have a lot of suppliers, if you have your spaying and you have a lot of suppliers and you can push that on, but that does not exist in our case. That in combination with in guarding their margins of 5%. So it's mainly driven by large customers and we have put routines in place for that for better controlling it. And I think apart from that part as well, I mean, we also have a quality offering. We invest quite a lot in being able to deliver quality to our clients. That is something, but we are not a bank. So that is also something that we always take in fairly transparently in that dialogue as well together with the clients. Your second question, you've seen that is really, I mean, when you look at the data driven intelligent products and services, that's really the next exciting phase for us. And we started to invest in essentially 2017 2018, but now ramping up these investments in 'nineteen, but it's this is a long term journey and it's early days. And why do I say that? Well, This is essentially our way of leveraging the presence that we have, all the information, the data that we are generating every day. We are becoming significantly better, that's starting to understand risk in a better way. So to your question about what is the kind of the demand from the customers? Well, I think it's a bit of a learning curve. Many are very excited. Many are saying that well, if anyone is able to do it, it's got to be you secure it as But we also have a lot of work to do internally to get our data in order to be able to get the right type of input because we are collecting millions of data points, but we also need to do that in a standardized way so we can also make it actionable. And then on top of that, we have a great team that are now starting to develop products on this and that's something that Martin is going to come back and share some more concrete examples and I think we to have a few team members, in the back of the room as well that I would encourage you to talk to during the break as well to get the better flavor. But it's promising, but it's very early days, so this is more the long term impact. But then, obviously, if you the question, do we have good ambitions in this space in terms of margins, etcetera? Well, absolutely, yes. We're investing because we have strong beliefs that there is return on this investment for the long term, but that ROI is basically built on evidence that we're on to something where we believe we can drive really differentiation and value. Karina Ingram from Handelsbanken. I have also two questions. The first one would be that now in the coming 5 years, do you expect still there solution security solutions to have approximately the same margin? Or will we see some improvement there even during the coming 5 years? And the second question would be around addressing the demand guarding margin. Do you have any thoughts about how that could be done more what you have announced now in these transformational programs and cost efficiency? Yes. So no, I mean, we are not guiding in terms of margin, but what we have shown today and I think, Bart, you have been more transparent than what we have ever been before in terms of the margin situation that we have across what we call different business lines and services. You see that there is significant value generation to the clients and that is obviously then explained in the better margin that we have. We continue to invest in this because we have relief in that value and obviously it's in our interest as well that we are preserving the margins because we also in many cases investing in capital essentially equipment for the customer as well. So we also need to make sure that we have better margins so that we maintain the return of the capital employed. So I think that's the first question. I'll say if yes. But I should say we do not have an ambition to drive that much beyond the numbers we have seen. We believe that is the right value for customer the right return for us as well. And then on the guarding side, but that was the second question. Will come back and talk a little bit about this to just say what are the basic fields, but then we will also have especially with Greg in North America, we're talking in the strat strengthening our core. The core is our Garden business, which is obviously still a significant part of the entirety. But when you look at those in bridge terms, we are reemphasizing our guarding in the strategy. And and we do that because it's such a significant part but it's also a good business when it's well managed. So that part will be more about learning now from the best practices standardizing in terms of metrics will become more data driven. So we use more operational and financial insights but it's also very much about how do we organize ourselves in the right way to be as successful and impactful as we can with the clients. In there is a few other things, but I think we should come back to that question, in the on because there we also have some really good practices. We will move on in the agenda now. And we will come back to Q And A in a little while. So now, we are turning then to the 1st focus area. And welcoming now Henrik and Brian to the stage. Henrik is a Chief Operating Officer in our European division. Is leading the Northern European part of the business and it's also been a key sponsor of our client centricity work in the strategy process Brian is the head of our newly created function which we call Global Clients and that is a small team which is then managing the most critical clients that where we operate on a global level. And previously, Brian, you were the country president for UK for 5 years and then very successful as well for the Danish business for a number of years. So now it's all about the clients. Correct. Yes. Thank you. Okay. Talking about client engagement, it's all about building the client partnership. As you see in our strategy, our goal is to become the intelligent protective service partner. And we are successful in that, we see that we drive higher margins. We see that we drive higher retentions. But before we look into how we're going to do that, let look at where we are more than 150 clients globally today. We have 150 global clients, and that means clients, some of them being the largest clients, the largest companies in the world, where we cover the security needs in multiple of divisions for them. We have a retention rate over 90%, meaning that clients today already now stay very long with us. We have recurring sales base of 80%. So looking at where we are today, our our position is very strong. So the question is then, how can we make this even stronger? Talking about client engagement, it all starts with the client. And as Magnus said, there are changes in the expectations of the clients. They are asking more from a security partner than they used to do 5 years ago. In the last year, we've done a very focused activity on talking to our clients and understanding both were how we're performing today, but also what are the expectations for the next 5 years for them, on us order to meet those new expectations. And the message is very clear. They want us to be a partner. And that means in the sales side, we should understand the business. And previously, we've been talking about understanding risk. Now we're saying something else. Now we need to start with We need to understand what drives their value and then we can meet that. On the operational side, we need to take that understanding of the business and have common goals. And again, common goals is not only looking at the risk side, but is what type of our services drives value for them. Lastly, we talk a lot about solutions and retention and that comes from developing with the client. We need to ensure that when they develop, we develop with them. And the only way for us to do this is to be close with them, close to them. Today, in many places, many areas, we are very good at this. In where we see where we are such a partner with our clients, we drive higher attention. We drive higher margin. And I think Bart showed a few example of the correlation between selling solution and providing that type of service and also how that impacts the margins. But it's quite clear as well, and that was also shown by Bart that we are not excelling in all the countries. We're not excelling in all the areas. And so what is the reason why we today have such a diverse approach to to provider in Sweden. We've expanded globally. About our toolbox. And one of the key things in our toolbox is the local ownership that each branch manager should own is P and L. We have 2000 branch managers today, basically running their own business. And we believe this is a key driver for our success and that will be maintained. But the problem is that if there is a problem, you need to we've solved it locally. If you need a process, how you sell, how you operate, how you develop, that have been developed locally. If you need a system that supports you, that has been procured locally. So generally speaking, we are a global company, but with a lot of local problems sold locally. Now we will try to bring this all together. Now the goal is instead of providing global excellence with global consistency but still with local delivery. And how should we do that then? As I said, local delivery is key. That will not change. But we are for the moment running a lot of initiatives in order to find the best practice that we have today. I think one of the most concrete things is that we're going to roll out a global CRM, and we have, for the last 6 months, put some of the best people we have in sales, in operations, in development together from the whole organization identifying, okay, why are we so good in selling a certain point? Why is it good in operating? Why is it good in developing our clients? So we're going to take all that knowledge and when we roll out a new CRM going to be best based on the best practice that we have internally. And as I said before, we've seen that when we do this well, to have higher margins. When we do this well, we also have higher attention. Now we're going to take that success and scale globally. On the back of that or as an effect of that, we will also have one system, one process and one data model, which means that From efficiency point of view and also from innovation point of view, we have a total different opportunity to scale And Martin will later talk about both efficiency and innovation. But this is generally speaking. Then looking at our client needs, they are different. And in order to adapt, we need to look at those needs. Clients are different. They do different business. They do this different type of size, they have different knowledge. And also again, when we look at our business, certain plays were very good in large clients. Certainly place, we're very good in SME segment. We also have vertical markets where we really excel, where we've been able to bring thought leadership. Greg will mention a few of those where you focus on North America. So what we do now today is trying to get all that knowledge to get better into security. So all everybody can benefit from the knowledge we have. Lastly, Global Science is a growing segment and where very few people would be able to compete with us because of our footprint. And if we can excel even further there, even fewer companies will be able to compete with us. So, Brian here, who will talk a bit more about our strategy there. Thank you very much, Henrik. Yes, will go a little deeper in our Global Clients business now. As you will see here, we have Now a Global Client business that has been growing over the last couple of years, more than 10%. We We see this now being a significant part of our business. So why is that? Yes, we have various reasons, I think, but one of the key dry what we believe is the increased localization. It's increased focus from our client to take us from a local partner to a global partner. So that has been a key driver and in addition to this, when talking to these clients, it's a lot of areas where we see common needs and expectations. One of them is is clear focus on shared values. It's also a perspective on long term partnership. When you build global partnerships, it's not a 3 months project. It's more a 3 plus year project. So we think these couple of drivers has also been the key driver behind our growth the last couple of years. But as said before, we have also areas here where we believe we can improve. Talking to these clients, that one of the common challenges we receive is Could you could you drive more consistent service delivery? And I think it's fair to say we can improve there. We also see more and more about of being around data, how can we share data, how can we use more intelligence, which is also quite positive when you look in our and again, the opportunity to scale from local partnership to global partnership is also heavily focused by these clients. And if I should add another one here, it's interesting, a trend we have seen really is that some of these clients are reaching out to us and say, yes, maybe we should consider instead of a price driven global tender could we have a dialogue really the opening for us and what are we now going to do to improve some of the areas where we believe we still have room for improvement. So we call the common thing around these initiatives is more or less how do we drive global consistency. So as we announced in July 2019, we established the global clients function and structure. Working with these cross border find the need that this could give us what was requested by the client more global consistency. The good thing here was we had a lot of best practice. So it's really about identifying whether we have best practice that we can scale globally. We also faces with our clients. And real time feedback management training is also something that we always hear when we talk about these global clients. Magnus mentioned that also, the focus on our people And we have great focus on our people have always had that, but again, we can see best practice in how we develop global training programs. We have fantastic local initiatives that we are now taking globally to deliver again the global consistency. You hear a lot today about our strengthening and our solutions offering also, and that will of course also really strengthen our global service offering to these clients. So this was a lot about what are we doing with to strengthen the global client offering In addition to that, you heard Henry talk about vertical markets also. We see pockets in around the world where we have built very very strong vertical market expertise. We are also now identifying which of these vertical markets we take into next level going global. Some of the very exciting markets we have identified where there is potential is markets like Tech Data Center pharmaceutical, logistic. And we are going deeper now to investigate where we really can see the benefit going forward. But in the bottom of all of this, as you see here, is we want to improve our global capabilities in all our protective services and We have as Henrik mentioned, we will keep focus on improving our local delivery. We will add to that more global consistency, deeper client engagement and specialization. And I think we are very well positioned to deliver on that strategy. Thank you. Great. So thanks a lot, Brian. Thank you, Henrik. Having covered now the client dimension in terms of the 3 focus areas within shifting to our off So this is now then about how do we strengthen our protective services offering and here there are a few key questions that are important. How do we strengthen the stand alone services so that they are strong by themselves, but also how do we integrate into solutions and then how do we now embark on the journey in terms of intelligent data driven products? So, these are the things that we're not going to cover in the next session. Here. And if you look at our protective services offering today, we have an incredibly strong offering. I think you all know and we mentioned all great officers that we have. But if you're also then looking at the mobile guarding, for example, where more than 4000 cars that are out in the streets where in this business is basically coverage, which is important, but it's also to have density so that you are quick in terms of response times. 750,000 monitored connections. So those are essentially clients where we have 20 fourseven surveillance into our Securitas operations centers. 6000 people, technical full time employees. These are then people who work primarily in our electronic security part of the business with an immense amount of competence. And that's something Tony will talk about in a few minutes. As well. Fire and Safety, we've been talking and sharing more in the past as well, 7000 people, full time employees our Fire And Safety Train who are also then adding more value on top of the regular guarding capabilities. And then if you look at our pink return part of the business and that is our brand name for the corporate risk management. We have one third of the Fortune 500 companies that we count as our clients today and ping it on our share a few more details later about this. So, we have real strength and you should read this slide by the way horizontally. So, when you're looking at guarding, for example, your on-site guarding, that is then related to the 350,000 and same way then all the way down in terms of the capabilities that we have built up. So looking at this, we then come into the guarding question and I think that was also a highly relevant question that came up in the last Q and A session. What are we doing here? I will share the high level points and then like I mentioned before, we will go into a lot more details in terms of how we strengthen the core. Course, when we talk about the core, this is the guarding and the on-site guarding presence that we have in 58 countries around the world. So we have a strong presence, a strong capability. How do we now look after this business and optimize that and strengthen that over time? A few key points. One of the fundamental principles that I mentioned at the beginning is that we have built all of our success being close to our clients. And this is fundamentally principle in our toolbox. So when we talk about being close to clients, that obviously means that you have a portfolio of on-site guarding clients, that portfolio cannot be too big. And so that is one important part, but we also then realized in the couple of years that we can leverage data a lot more as well internally, leverage operational, leverage financial data to draw more in in terms of how we operate in this business and making it stronger. And there we've had some great examples and one of the best is gentleman, whose name is Jose Castrejon, who is leading the guarding center of excellence that we have also created and announced earlier this year to make sure that we are not preserving in invest practices in the guarding as we go forward. But that work will also then be focused on how do we continuously sharpen our offering on the on-site guarding, the mobile guarding and also then remote guarding and how do we complement with better tools to equip our people in the front line of better tools be able to plan the business, but then also the officers to have more knowledge essentially in the palm of their hands with better tools as we go forward. And that's something that Martin is going to talk about and which is also then related to the concept of the digital Officer of tomorrow, which we were then looking more at the long term in that sense. So, one final important point about is that we are creating a center of excellence to then not only look at guarding on a local level or within this division, but now also taking an expert view if you will under the ship across all the divisions and all the countries to make sure that we are really focusing on strengthening the core part of our business. And with that, we are now shifting to electronic security, which is another important focus area and very to introduce Tony Byerleaf. Tony, like Bart said, you joined us with the Diebold acquisition in 2016. One of the strongest electronic security leaders in the entire industry. You joined us via default, then you also successfully managed the Kratos session. I think you will talk a little bit about that as well and Tony has now been leading electronic security in North America but since July this year also limiting the global efforts that we have in terms of strengthening our security capability and leadership on a global level. You know, this is an exciting time to be part of the Securitas team, and I have the pleasure to get to talk to you about our electronic security business. But before I start talking about specifically Secure Thoughts's electronic security business, I think it'd probably be very relevant to actually spend a little bit of time talking about the industry itself. So the electronic security market. The market, as Magnus mentioned on an earlier slide, is expected to grow to a 70,000,000,000 USD business by 2021. If you think about the business, it's really a specialized business in and of itself. It's got its own metrics. It's got its own KPIs. It's got its own drivers. If this was an electronic security meeting, we'd probably be talking about backlog turn, we might be talking about same day service or possibly cycle counts or something along those lines. So it's a specialized business. It's a growing market, but let me explain a little bit about the industry itself. You can see it illustrated on the slide. So on the right hand side, it's really referred to typically as the systems integration segment or sector of the business. You'll hear this commonly for people that are talking about the industry. What do we mean by system integration? Most of you may know some of these elements, but just to share a little bit more with you. It's typically more complex more sophisticated solutions. Usually, you're integrating multiple technologies. And many, very commonly, that's like video or access control platforms. It's very similar to IT elements and other software programs as well. They really drive the solutions. And if you think about it, there's a lot of installation projects centricity in that side of the market. So some skillsets you really like in this side of the market would be engineering and design project management. If you look at the left hand side, you can see it says alarm monitoring. If you think about this side of the industry, it's really more basic or simpler systems. And a lot of times these are prepackaged solutions and they're tied to recurring services. And if you think about that side of the market, Why is it called alarm monitoring? Well, quite simply, nothing more than most of those systems and services are linked to an alarm monitoring center, and that kind of bridges and kind of completes the offering. So if you think about in that sector, you might be talking about alarm systems that are tied to the alarm monitoring center. For response and such. Both sectors obviously, as you think about our growth goals for the business. 2 things, organically, when you have wider capabilities across this entire spectrum, you have a competitive advantage if you have a broad footprint. Secondly, it obviously lends itself to M and A opportunities in a robust pipe line with respect to growth from an acquisitive side as well. So you have a growing a sizable market, and it's very attractive to us as we think and it ties very well with our growth strategies in the future. So where do we stand as securitas when it comes to electronic security? Well, we have 10,000,000,000 10,000,000,000 Swedish krona presence in the marketplace in over 30 countries. We have over 6000 and dedicated electronic security associates already today, as Magnus mentioned previously. And we also are focused on targeting and growing 15 core markets, as was mentioned previously, to offer a comprehensive portfolio to serve our clients' needs around video access control, intrusion, maybe fire monitoring, as well as the integration capabilities. Being able to serve that broader footprint and, and really from a complete portfolio for our clients. Offering the full value chain. So in this industry, the value chain is gonna start with your ability to sell an engineer and design a solution, be able to implement that solution through an installation project delivery, Move on to ongoing service and support for that solution after the installation is complete with ongoing maintenance, repair, services, support, And then obviously the linkage in for other solutions, other opportunities to do managed and hosted services by linking it to our alarm monitoring centers as well as to our Securitas operation centers or our SOX. We do this by partnering with the leading manufacturers of technology in this space. We don't make these products. These products are manufacturers, giving us a real competitive advantage in the space, and allows us to focus on being that trusted pure play, trusted advice are specifically focused on the unique needs of our clients. So we have a very strong competitive position to grow from in the future. So Magnus mentioned specialization and deepening specialization, and what does that mean? Said about building skill, and how does that make a difference? Well, if you look at our business in North America, we've been able to accomplish that, and we've built a leading position in North America as one of the leading electronic security providers focused on the commercial sector. Now the journey began, as Magnus mentioned, in 2016, with the position of Dieville's electronic security business. If you think about in North America prior to that, there really wasn't that 6th protective service. So it really rounded out our protective services offerings in North America. And allowed us to do it in print, getting us deeper scale and local market presence in broader markets across the United States. We are now approximately a half a $1,000,000,000 business in North America. We span both sectors that I explained previously, systems integration, as well as monitoring capabilities. We do that through over 30 offices, and we have coast to coast operations in the US Mexico and Canada. Able to service and really provide a full complement of security across the entire continent. Supported by 4 alarm monitoring centers that have really strong certifications in and of themselves. And then also we've been recognized as the industry leader this year, by receiving 2 of the leading industry awards from independent trade publications. So you can see we've a strong, highly specialized skilled business in North America to be competitive in that marketplace. What does this matter to our clients? Well, it deepens our client engagement. Specialization strengthens your expertise in the protective services. So becoming highly skilled and specialized as an expert in electronic security will strengthen that 6 pillar of our offerings to our clients. Clients In many cases, like to buy one stop shop. So being able to serve a client broadly in the security realm is an important aspect of being able to be that one stop provider. If you think about a client's environment, let's just take pause for a minute, look at the illustration on this page. If you think about a traditional business corporate client, they've got a multitude of different kinds of facilities. They have different security risks. They have different business operations and different security needs. Now start to compliment these different facilities with our expanded capabilities or our scale and our depth and our expertise when it comes to electronic security first. If you think about a corporation, most of them have a headquarters facility. I think all everyone in this room has been in a corporate headquarters. In fact, you're in one right now. And if you think about it, this environment requires certain security and certain, you know, certain needs because of the different risk elements. Then you move on and say, okay, maybe this business has a manufacturing plant or some other physical plant facility. Maybe they have a distribution or warehousing operation that has a much different environment, trucks coming and going inventory. Then you have possibly even a data center or a call center environment. That's much a different environment as as Martin would tell you. And then maybe it's regional kind of office hubs or buildings that back office operations across a broad footprint. Maybe it's even several 100, maybe a 1000 office locations, smaller footprints, or possibly you're a retailer, and those are retail sites. Or you're a financial institution, and these are bank branch locations. Your ability to serve that holistic environment of a client is really important and allows you to become a one stop shop as a provider in electronic security. But let's take it a step further. Now start thinking about the strength of Securitas and our protective services across all six pillars. Now I can envision in that office and that headquarters building, a Securitas officer. Net securitas officer is now enrolling you as a visitor into the access control system that we installed, allowing you to get through those turnstiles, to get to the elevator, to get to the proper floor where you have a meeting, or Maybe now that officer is now looking at the video surveillance of this facility and making sure we're secure in here. Taking another step further, think of a retailer We now have a retail location, a pretty basic system, probably. And now it's tied to our alarm monitoring center or our sock. And now we get an alarm condition and now we're dispatching a securitas officer, a patrol officer who's now going as a mobile officer to that location to inspect what's happened. That's the power of Securitas. That's the differentiation in the marketplace of the 6 protective services coming together in a comprehensive solution for our clients. That drives the stickiness. And what's exciting about this is applicable across all commercial markets. What other industry is applicable to all commercial markets. Very few. Security is an electronic security, especially. If you think about it, I've been in this industry for 30 There's not one business that I can't think of that isn't a prospect for an electronic security solution. Whether it's a basic intrusion system or a fairly complex video and access control integrated system. So if you think about that, that's pretty attractive, but I wanna end on probably the most important slide in my presentation, which is real life client examples of how this really comes together. Take Gulfstream. I think most people are familiar with Gulfstream, but their subsidiary of General Dynamics. They're a great company. They design, develop, manufacture, market, and service business jets. Now Gulfstream was an existing Securitas guarding client. In 2016 with the acquisition of Diebold's electronic security business, where we built The expertise and the scale necessary in North America, we then were able to become the electronic security services provider for Gulfstream. And now obviously providing both services and those protective services coming together. If you think about spot I think most people in this room would be familiar with Spotify, existing electronic security client, and now has become a guarding client. So the real life examples of what Magnus was referring to are what Bart were talking about. This is how these things kinda manifest themselves a very powerful way and positioning us very uniquely in the marketplace. And with that, I'm gonna turn things over to talk about the next exciting phase, which is Intelligent Services And Innovation, Martin, who's our Chief Information Officer. So, Martin, turn it over to you. Thank you very much, Tony. I have the pleasure of addressing you the intelligence security and I also talked about our plans for IT. And I'm very excited to be here today to give you an update on what has happened so far. We are in the early stages of a journey to become the intelligent protective services partner. It's about the transformation of the security industry from low tech to high-tech. And this is a true transformation journey for security as an entire industry. It's a collaborative effort. We are approaching this as a team effort Baugh talked about that we are making investments in an R&D capability. I'm very proud of having these seventy people that Bart talked about, and welcome to our floor, by the way. Some of my team is at the end of this room, and I really encourage to talk to them in the break. These are people, competencies that we haven't seen and haven't had in security as before, in probably not too prevalent in the security industry. These individuals together with our very experienced security experts are now doing really exciting work to combine both two tracks, how do we and how and augment our existing services, but also how do we develop and deliver new services to the market? Let me start my presentation with giving you my view on why I think that Securitas is uniquely positioned to bridge this opportunity to win this game. And I'll do that by taking an angle to a message that you heard my colleagues talk to. Have talked about data. To become truly data driven and to develop and deliver true intelligence services, you require big data, big amounts of data. Small amounts of data will not be simply not enough to train your algorithms to make your business truly predictive. With the size that Securitas have, that gives us a unique opportunity our size matters. When an incident occurs, receiving an alert, something is wrong in your smart device. That doesn't really give a great client experience. To make a customer a client happy, you need to have an adequate response. Our 340,000 guards, our operation centers, our electronic security capability, etcetera, are able to provide such response. Our presence matters. Our vision we aspire to take the position as the leader of the global safety and security ecosystem. Such position requires client base, Chan and brand equity. To market partner for technology incumbents for startups for scale ups to join to complement our offering and to go to market with their technology that's put us in a very strong position to naturally take the system leadership position. Our market position matters. Those things together makes me comfortable that there is no one else that is better positioned than Securitas to take this and win this game and to become the lead in intelligence services. So this position I'm talking about, how do we leverage that? You recall last year, I was talking about how we approach this journey in four dimensions. I was talking about the officer of tomorrow crime projection, the future sensors and the intelligent SOC. And today, I want to share with you what we have learned what we have achieved in those dimensions. Firstly, and repeating also what Magnus has said, it's early days. We are at the start of a journey, but exciting one. But we have developed a unique capability, I would say. And we are starting to learn how to drive digitization. We are starting to lower what it takes and what it means to take and deliver new services into the market. Early days, as I say, but we are seeing already some exciting already in practical use. We have successfully accelerated our data capture and we have learned in a way where we aggregate it and anonymize it and that it's line it's in line with our data privacy strategy. We have developed a few own microservices that we deliver to clients through APIs but we are our service offering and making our business now offering richer. Is how we transform model. We're piloting it in Sweden and the learnings we are making for what that takes and what it means to deliver digital safety and security services. Those learnings we are refining in the part of market Sweden and the learnings that we are implementing and putting that me, Peter and Greg will come back and talk about those in more detail. But those learnings that we are now capturing in that proof of concepting, they are also informed by the client experience work and the insight that we've drawn from the work that Henrik and Brea have talked about. And we are tuning that that delivery model to those sneezed and the client types they talked about. So let me give you some more some samples then, a little bit more detail of what we have done. Quite fundamental, as you might understand, is to have a digital client channel. We have started to digitizing the SME channel. And we've built out a solution that we call My Securitas. My securitas is an end to end channel, digital channel that acts as a way for our clients to consume our digital channels, digital products and services, but it's also distribution channel for us to to distribute our services and partner services. In parallel to the SME channel, we are now working on the evolution of my security does to large clients. We are deploying a version of my securitized which is freemium through our service delivery and that is to achieve scale at pace. In parallel, we are developing and and acquiring 3rd party products to build up a premium, mysecurities. So far, we piloted my securitas in one market. In Sweden, we have more than 300 clients on my securitas, and we have data driven evidence that my Cureitas, reduces client churn, that it drives extra sales, and we receive very, very positive feedback from the clients using my Secure that this is really what they expect to see in 2019 of a professional services company. So if this is how we digitize our client experience, let me now turn to how we digitize our officer experience. Our 340,000 officers is our most important asset in the company and we are working on digitizing the workplace of our officers. We do this to secure, to improve the quality and efficiency of their so to something that we can report to our clients so that the clients can really see clear and consistent way how we deliver value to them. A very important, ask as Brian laid out, especially for our clients, but I would say for all our clients. We're also digitizing our officers to set them up well for the future. The digital officer, digitized officer is connected connected to the technology that Tony talked about in the environment which they move around. They are connected to each other, to other servers that are in the area where they move about and where they operate. And they are also connected to central support resources such as the SOC. That they can get advice, get direction and get support. Digitizing the officer is also an important element in in our product development. To the field very easily, very quickly and very consistent across the world. Last but not least, digitizing the there is part of enhancing the employee value proposition, making the officers feel that they work for a modern employer and the employer of choice securitas. So digitizing clients, digitizing officers, how does these digital this digital world meet the physical services that we have in prevalence. In our security operation centers that Tony talked about, we capture data and this is where the physical and the digital world of safety and security services are converging. This is where we integrate all our data sources. This is where we leverage intelligent models where we apply AII and ML on the data. Intelligent Services takes our current sub capabilities to the next level by enable them to orchestrate the delivery of all our protective services in a data driven in an optimized and in an optimized way in real time and eventually globally. Now, intelligent product that we have on the market. And for those who listened to me last year, you will recall the picture that you 12 months, we have taken major steps forward. We have moved from solution inception. We have leveraged design thinking, We have co developed with clients and we have now 2 products in use: 1, we call Insights, an internal tool for our sales people to make a conversation with our clients much richer. The other one is external and there we have the 1st paying MVP client in less 12 months. The client is Vasacrona, well known, probably the largest real estate company in Northern Europe, I think they are. With the prediction solution, it allows us and what akronom to do real time localized assess risk assessment for all their locations. It enables us to map risk alerts, which reduces unnecessary call outs. It makes our joint security planning much more efficient. And last but not least, it allows us actually to change business model. It allows us to change the mode from paper hour to security as a service. And this is a concrete dialogue we have with that client right now. How do we move into such a model during next year, which will set the precedent also for how we can take that to other clients? But in parallel those two products, we have also built a very unique prediction capability on which we can rapidly build out new and that capability has been proven very, very strong. I'll take an example. We grade risk areas on a scale to 5, and we define areas as risks at level 45. They represent 10% of Sweden's area. At risk areas stands for 83% of all criminal incidents in Sweden. And we have The risk for a criminal incident in the level 5 area compared to a level 1 area is 88 times higher. And you can imagine that that is valuable information for both clients and for us to design the optimal security program. Next steps is that we are moving from area, which is 250 by 250 meters to object level. And we are also expanding the scope of the service to from criminal events to also safety incidents to make the usability use cases of the prediction model much more rich And I would say that so far, so very good, we are covering all urban Sweden with real time risk assessment with repeat patterns and seasonality. We see a very strong positive feedback from clients and from industry And we have now built out 1 client vertical real estate. And as we speak, we're building out new verticals. During next year, we will go deeper in Sweden to enrich the model and to learn what that business model build out means and how affects our operation and how we can make that optimal together. We will also apply those learnings and look for data sets in other markets in order to expand that capability. To summing it up then, As I said, we have started the journey early days to become the Intelligent Protective Service partner. We are digitizing our core services and we also bring in new services to the market. We have confidence in our capabilities and we see a strong positive response for our clients. We are investing in innovation and continue to do so We are building a unique capability, but as Magnus also said, it's very early days, it's exciting, but it's early days, but hopefully much more to come. So thank you very much for your attention and welcome on stage back. Magnus. Thank you for sticking to the script, Martin. Okay. So, so I think I hope that those were informative parts in terms of how we strengthen some of our protective services. And what I want to do now before we're going into the efficiency part is just to talk a little bit about how this comes together as well. So we have talked about protective services and there is really 2 key things that you need to remember. One is how we are focusing on building strength in each stand alone service so that we are the very best in each part. But then the other one is how based on client risk and client needs to then integrate different services into 1 integrated solution. When we do that, we have buy for the best offering to provide to our clients and to address their needs and also to build the partnership over time. So one important message that we shared, at the beginning today is that we are setting out an ambition to double. Our electronic security and solutions business in this 5 year period. And the question already came up a couple of times, how do you make that happen? Well, if you look at this, you have to look at this in phases. So we started in 2015. We have now grown this part to around 20% of the business and we're then setting out like we said to grow from NOK20 billion to NOK40 1,000,000,000. But we have a number of less aren't because when you do something for the first time, it's never that easy and we have done really well in some parts. We have also then some work to do to also get on the journey in other parts of the business. But we are now taking those insights and and to accelerate and to really drive these girls now to be able to double, some of the key parts are then related to clients, how do we refine the offering based on the specific client needs? Because there is different segments, but there is also different types of client category is from very local to global, but then also cutting across Taicbine and Henrik shared before across many, many different nuts. So, refining that making it easier to understand, easier to sell it, but also then it easier to install and to serve the solution is then becoming critical. Another important part is the standardization and this is one part that Tonet touched upon that as well. And one of the key expectations obviously on Tony and the team on a global level is that we're now leveraging a lot more the great practices and the knowledge that we have in electronic security and standardizing metrics, language, targets, etcetera, so that we're building more consistent strength across that footprint of prioritized markets. We talk about 15 pill markets. But same thing also in our solutions work. So, we are also becoming more efficient and that we are able to drive scale because the scalability of what we do is important so that we are enhancing value and margin over time. And I think that is one that Bart alluded to in North America. We have been driving the strategy, but we have been able to scale it in a really good way and that is a critical priority for us. Organization is important, but I think that goes without saying, but we will some lessons learned. So we're then also now fine tuning how do we organize ourselves, organize ourselves in terms of electronic security, but also then to drive solutions sales at a larger scale for on-site guarding customers for mobile solutions and a few other categories as well. And then the other aspect is This message that I shared earlier, that's also about impact because we need to drive impact and really make sure that all key markets are switched on and are really driving this journey. And for that reason, we continue to also make investments organically in training and competence, but also then through acquisitions, but then obviously also expecting from all leaders that they are driving the strategy and that they're really materializing, driving material impact over time. So those are the main, initiative and things, but we will come back to some of this as well after the break in the different division updates because this is obviously something which is fundamental important to our strategy. So with that, now we are shifting to the 3rd focus area and that is efficiency. Today, we decided that we're going to focus more on the transformative programs that we are driving in ISIT. So happy to welcome Martin back up on the stage. And then after that, we're going to a Q and A session with the people and the leaders that have presented in the last hour. Okay. Thank you. Thank you, Magnus. And, okay, you just heard me talk about investments in innovation, aim to improve competitiveness and drive revenue. Now I'd like to update you on what we do in Global IT, you could call it, to aim to drive efficiency, but also enable client value. But of course, this is not only about Global IT. There are elements of activities that we do IT that are fundamental enablers, but efficiency is much larger. It's something also that is ongoing in every day in all parts of our business. But I will focus on a couple of the larger things that we do when it comes to more of transformative nature. We are investing efficiency across our entire business. We go about this, as you would expect, I would say, we are modernizing and standardizing what is common. And then we're taking good precautions to understand what is different machines what makes us special and what makes us stand out from the competition. Merely through a couple of change programs, because the journey that we are trying to explain here today all the dimension is fairly significant from the company that is worldwide, but all basically local in what we do, what clients we have, how we deliver services, etcetera, to the company which we want to become, where we are considering how to retain local own ship and innovation capabilities, but also leverage those in global scale and drive out synergies, but also to address new customers of global category in a more efficient way that we haven't been able to do before. So it's quite a lot of formation activities that are needed to do that. And we try to do those holding it together in a couple of strong programs in a portfolio change. So how are we doing so far? I'm adding to what Bart started out talking about. In early 2019, we communicated 2 major transformation program that we had started. The first one was an investment in our global IT platform, ISIT platform, It's about creating a modern, flexible, scalable, global platform as a support to our business transformation and as an enabler to both new client value and innovation. It includes activities such as consolidating our IT footprint, reducing number of data centers, new technologies such as cloud services, etcetera, moving as much as possible from local service delivery to remote service delivery. That program in addition to provide us with a future proof platform is also intended to drive out efficiency in IT, doing leveraging modern technologies from fewer places in more a remote fashion, we believe strongly is able to that's something we can do in a more cost efficient way. The target here is to reduce the run rate of global IT by SEK 300,000,000 by the end of 20 2022. There are the transformation program that we communicated and Greg will talk much more about that. Is the business transformation in North America. It is a true business transformation program, supporting and driving efficiency in our core guarding business primarily, but also the other protective services as we progress. It's about improving how we process financials in a better way. How we recruit and onboard people in a more efficient way, how we plan and schedule you our officer more efficiently and how we build for the time that they spend on service delivery in a more efficient way? The target for that project financially is security services in North America by 2022. But of course, the qualitative benefits that we expect by freeing up massive time a field freeing up time in the shared services to move from transactional manual work to more value added work those basically counts on top and are perhaps at least as important. I'm happy to say that even those are complex programs that we actually are tracking towards the plan that we set out at this point in time. Giving a bit more of detail, starting with the IT transformation, a critical enabler for us to move to a more modern IT platform has been, how do we take care of the people in IT, about 800 people across the company? How do we write skill? How do we create a effective operating model and organizational model for that organization? So in about a year ago, we still had end to end IT organizations basically having most of the capabilities tailored mostly to sort of keeping the daily operation running in 58 countries. We made a decision a year ago that we want to restructure and implement a new organization and operating model. We decided to establish a model consisting of 11 IT clusters that supports both together supports global efforts and together also supports a local operator in hopefully an optimal way. To complement that we established 2 global IT delivery hubs for our infrastructure operations, one to support Europe And Asia Pacific and the other one to support the Americas. To really leverage scale and support the business This project, if you call it, no, sorry, this reorganization is complete. But of course, to realize all the benefits to have it all settled in the right scaling, the capability shift, etcetera, That's a multi year journey, and that will continue still for several years. But we are operating in this model right now and we are continuing the shift and the transition of people and skills into those shared capabilities On top of how we organize ourselves, of course, we drive our projects not changed through a portfolio. And roughly we're talking about the portfolio in 4 dimensions. 1 is the IT dimension we suggest talked about. And we started that change in 2017, and it will continue still for several years. On top of that comes the business transformation portfolio where the most notable project for the moment is this North American business transformation project, which Greg will talk about. As mine Somba talked about Europe is still under evaluation, but of course, we will do activities to improve IT and the business operation also in Europe. But that's something Peter will come back to, but we will also come back the later states with more detail. Very recently, basically in the autumn, we started in earnest in dry a project portfolio around how we improve our customer excellence platform as Henrik primarily talked about, which include how do we improve the support to our sales people, our sales operations people? And how do we support and enhance the interaction with our clients with the digital channel rollout, for example. Those are still early days, but will have a quite significant effect, I would say, on how we are perceived on the market and buyer science. Very recently then, we are now starting to add the 4th part of portfolio into operations and that is how we produce our services in a different way and how we actually enable all our officers with the modern toolset. So where we started and where we were a year ago, we had only IT projects basically in our portfolio. Going into 2020, we have a activity and projects in all four parts of our portfolio. And of course, it increases the complexity, but we are also maturing in our capabilities. And we are also, getting into a stage where all our businesses lined up to what it means to deliver and execute on our strategy. That means that we have sort of the target position more clearly defined and that we can now start to execute in multiple dimensions in parallel. So let me sum it up and give you just a flavor of what is it that we talk about where when we talk about efficiencies, to give you some flavor of that. So of course, on the IT transformation, we expect efficiencies in IT. More scale, more effort done for less basically. But we also expecting improved finance and HR transactional process efficiency, addressing manual processes and work around We're expecting hard dollar savings by reduced unbilled overtime by vector scheduling. We are expecting significant reduction of man hours relating to manual processes in our branches. We're expecting efficiency improvements in our 370,000 employee workforce by introducing mobile self services. We are looking to introduce better tools for recruitment and for onboarding and you can in what effect that has on a company that recruits over 100,000 people every year. Our target is to have 1 data driven and AI powered platform or platforms for our business that is driving efficiency that is enabling client value as well as enabling our wider industry ecosystem interaction with that and supporting our innovation efforts. We are on track, but I would say again here its early days, and this is heavy lifting and the majority of the change is still ahead, Douglas. But thank you very much for your attention. Magnus? Great. Thank you, Martin. So now you can stay here because now do a Q and A session with the leaders who have been. So Tony, Brian and Henrik as well please. For a 10, 15 minute Q and A result. Yeah. Month. Mark, please. I've got a couple of questions around, the data because, can you just enlighten us on how how you work with data given your operating costs across different jurisdictions. For example, if you have your data scientists working on analyzing that for predictability. Can you transfer data from the North American business to those scientists in Sweden? Anything you can say to enlighten us on that? And then on facial recognition as well in the key markets, what is the latest with the ability to use that and how do you think it will? Develop. All right. So there are restrictions on how you can transfer data, of course, Ekharoz. And we are, as I said, we are developing a data integrity strategy that we is very important for us so that we follow. The data that we work on We try to say aggregated and anonymize it to the largest extent possible. And we are so far having a data science practice and capability here in Sweden but we are looking also to set up a similar capability in the U. S, so that we can work on the datasets there. But applying aggregate that data together with the strict governance policy is how we go about using and being able to leverage that data. But I would also say, as I've repeatedly said earlier, that it's early days and we are learning also how and we can work with the data in the different jurisdictions and that will develop over time. And I think also, as you know, that, that will, that's a common challenge for all industries. And it's something that, that we are working also together with the legislator on how we can work on those solutions and also technology providers such ones we use such as Microsoft, etcetera. It's also something that we work together with them on how we can use some work with that data in the best possible way. But datasets are different in different regions. In summary, Sarglaki Sweden, we have rich internal data, but poor external. In the U. S, we have relatively rich internal, but very reach external data, which gives us different possibilities. And if I could just add as well, I mean, we are not interested in personal data as such. It's more that we're leveraging the datasets to be able to better, for example, predict crime. And I think that is an important starting point, but then there will obviously be quite some work because we take all compliance seriously. And we just have to make sure that we handle this in a good way. And that is also then one of the key factors for us as well when we're building the common IT platform ones. We also do in that so we can have scalability when we are building and driving innovation in one place. The ideal thing is that we are then able to replicate that then other markets as well and do that quicker, but that we can only do when we have more scalable platforms as well. So when you're client sign a contract? Do they agree that you can share the data if it's anonymized and aggregated? Is that part of the agreement? Yes, it differs, and I can see different clients are very different perspective on this as well. I think it's been a realization for many, especially consumers in the last 4 or 5 years as well that the data is valuable. But this is something we are also working with our clients because the clients also want better predictability or better prediction capability, for example. And then If we are then able to leverage, other client's data, this client's data, that would also then enhance the product. So I think that's also something that people realize that If you do contribute, you will also have a better product overall. And with regards to facial recognition, that is something that we haven't explored and leverage too much yet. And in certain markets, there is some legislation in other markets, very rigorous legislation in those markets, we have not yet started to look into facial recognition technologies. It's not a core part, at least not yet roadmap. But one thing I can add to that is we are technology agnostic. So, I mean, we are not marrying ourselves just with one specific partner because to to be frank, there are hundreds of technology companies that are claiming that we can do this and we can do that, etcetera. But what will you look is what are the needs of the client? What is the best technology out there and then how can we integrate that in a growth solution? So for that reason, I think we're in a pretty good place as well, but it's also not an area face recognition where we feel that we can make such a big difference. We want to invest in things where we can be the best. And that is the reason that we're investing more in what will be defined as intelligent products as well. Hi, Sylvia Barker from JP Morgan again. On monetizing the data and intelligence solutions, so you said that you don't really have kind of a you don't have a case study yet to show on that, but how should we think about monetizing that? So let's say you have a Mann Guarding contract, is that something that the client would be, do you think, willing to pay for additionally? Let's say you have already a solutions contract where you're not paid by the hour. Is that just an additional service that you offer as part of the package? Or again, is it something that you can charge for additionally? And then just second question, could you remind us your split of customers by SME and large between the different markets or some of the key markets and what that means for the data and potentially for the demand for these intelligent solutions. Well. Thank you. Yes. So, on the monetization, there is a reason that we say it's early days, because it really is early days. But we're also very confident about the value that we have been able to create with the early pilots and Martin, you mentioned as well have a few, first pilot customers that are also paying. If you look at the needs from a client perspective, everyone would like to have a better understanding of a few different things. 1 is how are you optimizing the security solution across different sites? Because Tony, for example, you made an example of many different sites of a typical customer. So that is something that you can do that by knowledge that you're building up, but then you typically do very locally. If you are applying data, we can also then aggregate and get much better understanding of the entire situation across many different sites So optimization is 1 and that is really enabled through better knowledge and that knowledge is very much data based from our perspective. Then obviously, if you look at other value, it's also higher ability in terms of anticipating and responding. And that is where the data and also then the technology that we're integrating is becoming so critical because if we have connected systems with the client, but we're also better able to predict and to also then capture activity, which is in a specific area, for example, together with our presence that we have, be it on-site guarding or be it mobile through the connection to the sock, we are also then able to respond. So, I think that those values or some of examples in terms of the pain points that we are trying to solve for the clients but it is early days, but we are convinced that when we do this in a good way, we are able to provide really good value over time. So, the dynamics of this part of the business, they're going to be quite different from the on-site guarding, which historically is very much priced per hour when you look at solutions, it's more than what is the value and with the integrated service that we provide. But with date and the more knowledge based, I mean, that will also be different type of revenue and margin model as well. And that's not that we are also trying to figure out what is the best way that we actually bring that to market we can really monetize that as well. In addition, I mentioned, for example, my secures as premium model, And of course, there is a sort of revenue stream coming from subscriptions from there. The Vossakrona case, I talked about subscription model on that risk prediction tool, we can sell stand alone risk predictions as an individual product. And of course, then the shift of business model to a service which allows us to optimize our delivery business models that are available, but those are things that we need to learn for ourselves and together with our clients as we go through proof of concepting there. You had a second question as well. That was the SME split versus global. The same philosophy is that it differs quite a lot between different countries. So if you at the Nordic region, if you look at Europe, for example, significantly stronger SME base. Some of the larger countries that we have in in Europe, more focused on kind of midsize and maybe more larger. I would say also that is more the situation as well that we have in North America. But the number that we are sharing today, I mean, it is what do we say? Brian and Henrik 13%. For global clients, for this global clients, which is then at least the proxy for how does it look across the entire footprint, but it does differ quite actually between different countries. Sylvia, can you hand the mic to James behind you? James Wafer from Jefferies. Just had 2 quick ones. Hopefully, one was on the IT and the NA transformation plans. You have the, obviously, stated goals of savings between now and 2022. You did mention that it was a bit of a process in terms of delivering the net savings to the bottom line. I'm wondering if there was any margin benefit in this year from those programs. And if not, you could sort of expand on how the shape you expect for those coming through between now 2022? And then in terms of M and A in the North American U. S. Market, wondering if there are some, a pipeline of sort of the medium sized, debolt type assets left out in the market, or if it will be more likely to be sort of an amalgamation of a bunch of smaller bolt ons moving into the future. Maybe, Bart, do you want to comment on the first one? And then Tony and I can comment on the second one? Yes. When it comes to I will put myself here. When it comes to the cost savings, I mean, we have communicated, they will is it SEK300 1,000,000 and they will be gradually coming in so far. We haven't benefited from that. They will gradually come in, but then we really expected that it will be landing there in 2022. That is where we really see the benefit kicking in at full strength. And the same goes for the North American business transformation. Do you want to comment on that? Yes. On the electronic security, specifically in North America, there's, obviously, it's a highly fragmented market just like it is everywhere around the globe. So there's still news for different sizes of potential, prospects. And certainly, you know, most importantly, for that it's a good fit that it actually meets our strategic objectives. And certainly there's obviously with even with bolt ons, there's advantages to building out a scale and market presence even within North America itself. But I think we should also highlight. I mean, on the Tunis Leadership, we have built up strong electronic security presence it is. I mean, we do have a strong offering that we can bring to our clients already with the existing footprint as Thank you. Okay. Henrik, in the middle, back there, Thanks, Henrik Mawby from Nordea Equity Research. So Martin, it was interesting to hear the early positive fine around the KPIs from my securitas. As I understand, it is still only being piloted. Is that in one market or with 1 or few customers, how easy or shall I say difficult is it for you today to scale such a service across clients and market We are piloting my security task in Sweden. I think I mentioned it that we have 300 plus clients right now. We're looking to roll it out across the SME client base in Sweden during next year. The effort here is through our Swedish organization together with our operations and sales people, educating them also in what it means to give such information at the fingertips of our clients, and we want to read the organization also to interact with the clients in that way, then introducing micro security as freemium to the client base of SMEs, that one is not really a complicated exercise. That is the onboarding of both the client, but also our staff then to have such interaction with the client and bringing it further out into new markets? Is that? There is a plan that we are working on together with Peter and with Greg on what markets and how many to take it out to in next year in Europe and in the U. S? Yes. Thank you. We can take one more question before we go into the break. Call you on here in the front. Okay. No. That's fine. Please go ahead, Treg Vadia, HSBC. Just one question, and it's really to do with the ISIT program. Does this include, the costs related to it? Some of the, security elements of the data as well, and making sure that that's secure? I can start with that. So our main focus is then to secure our operations. And one of the actually major pushes we are making in in our organization is to strengthen our cybersecurity posture next year, both in terms of how we secure our assets, but also how do we secure our externalized assets? And the new services that we produce and the ones that I talked about here, those are designed with the highest aspects of cybersecurity from start on. But we are investing in and we are building up cyber security capability, both, yes, in order aspects of putting in place, cyber emergency response teams and, etcetera, So this is actually one of areas where we're really taking a step forward, which is necessary when we go from a more manual to a more technology business. So significant effort in that, we recruited a very capable Chief Data Security Officer is now building out those capabilities. And as I said, new products, security by design. But this I think it goes without saying we have been investing. We are investing and we will have to continue investing a lot as well as we go forward. Yes. And when we mentioned before the SEK300 1,000,000, we have always been talking also that there will be if you have opportunities or needs to invest, we will do that as well. And the investment BAR talked about on the seventy people in R&D that of course we make other investments such as the cybersecurity team, for example, that sort of comes also in addition, but those are necessary capabilities for our strategy. We're now taking a break for half an hour and the webcast will continue at 10 to 4. Please take the opportunity to have some coffee and visit our demo stations around security lighting and intelligence services. Thank you. 1. Alright. So, welcome back, everyone. I hope that you had a welcome back, everyone. I hope that you had a good time, during the break and also that you had a chance to see some of the great demos. Now we're shifting to, I shouldn't say the most interest but a very important part and that is the overview of our different divisions. And I am just going to say do a brief introduction to North America and then we're handing over to Greg Anderson who is going to talk about our guarding and how we strengthen the core. In North America. But if you look at the business, like I mentioned earlier and Bart also laid that out in his presentation as well. We've had tremendously strong performance in North America in terms of growth, in terms of margin expansion. And if you look at this business today, this is less than half of the business, in terms of sales, but it's more than 50% of our operating results, so very strong contribution from the North American team. But nothing happens overnight, and that is a little bit illustration with this slide. We made a number of important acquisitions in the late '90s and then under the leadership of Santiago Gaurav and Billboard Holomir, they then started in the early 2000s to integrate all these businesses to one securitas model. Based on Securitas principles and really integrating all of the different acquisitions to a Securitas company. But that was then based on guarding and the guarding business they kept on building, kept on refining and driving them through specialization, the garden business is something which is very, very strong today. But they also started to invest in some of the other protective services. And that is what we're then seeing after this consolidation phase when you're looking then at the at the chart to the right, you then see that the North America business today is consisting of many different parts. But the leadership is important and significant and I will say tremendous contribution from Santiago and build and Santiago is now stepping into a new role, which is Executive Chairman of the North America business at the same time that we are then promoting a number of leaders to lead the different parts of the business going forward. And this is what those different parts look like and also the leaders look like So we have the guarding part of the business that is 70% of the North America business. Led by Greg Anderson, but then COO Jose Castecon and Jose, who I introduced earlier is also with us today Kwasi is also leading the guarding center of excellence on a global level, thanks to his expertise and proven track record of really driving strong specialization in guarding for a number of years with great results. Then we have the electronic security services of the electronic security business, this is standard by Toni Baierly. You now have the chance to see, on the stage a couple of times, 10% of the and then we have a smaller part and that is our corporate risk management and that goes under the Pinkathon brand. Pincaton has a 169 year old history, in the US and this is a small, strong team which is focused on risk advisory and a number of related services to corporate risk management. So it's a small part of the business based in the U. S. But operating a global network or specialist and doing so with very strong results. And that is also the business that I referenced earlier that where we have 1 third of the Fortune 500 companies that we are counting as our clients of Pinkerton today. And I think that is proof of all the great work that they are doing, they're growing at the fast pace and also generating really good, really good value. And that thank you to Antima should also mention is led by Jack Saran. And then the last part of the North America business that is what we call federal services and that is obviously then business, which is more targeted towards the U. S. Government and a number of different services that we are providing under the leadership starting now of Toni Sabatino. So he is then building this part. So when you look at North America, what started out as the guarding business after some acquisitions is now then really a combination of different services but the success that has been built in North America has been built based on a few fundamental principles. 1 is the power of specializing. And we talk specialization, this is going deep. It's building real knowledge and expertise in each individual area. So, when we talk about these 4 major areas, but then also sub areas like in guarding, for example. So specialization is 1, but the other dimension is also then that our North America team have been successful with is also to drive scale and synergies by combining these different services based on the client needs. So I think with that, we will now focus the North America part on the guarding today. And we do that then under the description of strengthening the core because this is obviously a big part of the business and very happy to now welcome Greg Anderson to the stage and Greg, you have been with Securitas since 2010. Greg has been leading many different parts of North America business and mostly recently in the last 3, 4 years now, leader of the Pacific region, and that has been with tremendous development in terms of talent and leadership, but also then driving really good growth and profitability. So work, congrats. Excellent. Thank you. Thank you, Magnus. Good afternoon. It's a great honor to be standing in front of you today as the the leader of the new North American garden unit. You know, I'm often asked what is it that we do in North America that has driven such great success over many, many years. I think there's the answer to that when you look at our track record of delivering top line growth and margin improvement really over the last decade has been pretty impressive. I think there are a lot of answers. I I you Magnus kinda stole some of my thunder. I think one of the key elements has been really the fact that we've had really fantastic leadership with Santoga Galas and Bill Bartholomy for the last 15 years. We have a bias towards execution with really talented people. We've developed strategies and new product lines. And from a guarding perspective, my time in the company has always been focused on really relentlessly advanced seeing and protecting our core gardening business. It's an incredibly important and incredibly profitable business for us in North America and we'll continue to drive But if I look at the core kind of foundational elements of North America and success, I think there's three areas that I'd want to light and really share with you guys today. One is around specialization. And you've heard this term several times today. You'll hear it throughout my presentation. It's everything we do at our organization to drive continued specialization in the markets and clients how we treat and work with our clients every day the segmentation within the markets, making sure we have good experts aligned to the right clients, that is how we operate. Services evolution that you've seen and what Magnus just showed in that slide up there to go from a core guarding business to a business that's diverse with all these different protective services elements, really represent specialization. And then for us, what's really core and important and growing part of our business is security solutions. And that business to me, we're specialized in two ways. It's the defined products and services that we bring to market with our clients in which we see have been readily accepted with our growth And it's a specialization within our markets and within our organization to really deliver these services. We've got a network of systems engineers that are embedded in field that work closely with our branch managers and also with our clients to drive this. And they're supported by a centralized group out of our SST in Charlotte North Carolina that really drive all of the design, proposal development, project management, and the after sale services support. And that group has been really instrumental to growth in North America. The years for us. You see the numbers there. 600 branch managers and growing, which I'll share with you in a few minutes. Nearly 400 branch man branch offices in North America. That's our physical leadership, our presence across the North America continent. But we also have a growing mobile presence that's been business that's grown nicely for us and it creates another layer of presence. We're in 88 markets with our mobile division. We serve is nearly 3,000,000 unique patrol hits a year, and that has grown again pretty significantly for us. But the central part of our presence in North America really is our officers and the 100,000 officers that provide our service and represent our brand, dated and they're critical to us. And we really have focus in North America to be viewed as an employer of choice. And that that's always a challenge when you're hiring and working with 100,000 people. We focus on 2 areas. 1 is in wage and the other is in benefits, right? So we all know that there's been a lot of wage inflation in many markets. North America's different. And so we have really purposely make sure that we stay on top of the wage challenges. We drive wage increases with our clients and we work with them closely to really make sure that when we see new defined minimum wages in many states, we're always staying ahead of those, right? Higher wages will attract better people and will also help to retain that. On the bench, its side. We did, commenced a study a couple of years ago and went out and looked at the, the Walmarts of the world and, the Home Depots the Starbucks and try to understand what sort of benefits they had introduced to their large workforce in order to really attract and retain good people. And we benchmarked against them and created a new slate of enhanced benefits that we introduced this year. That we have benefits around health management, around weight management, around financial planning, we have college education and certification programs that we pay for for our officers and mental health support, which have also been introduced these have been very, very well received by both our officers and our clients. And remember, our goal here really as an employer of choice is to attract retain the absolute best people. Wage is important, but benefits are just important to our workforce. So it remains a priority and really part of our success. The last piece here is really around innovation. Ever since I've been in this company for the last 10 years, it's been nothing but a dynamic environment where we're always innovating and introducing new product services and even business lines. I go back to the protective services in that journey. You saw over 15 years where we went from core to these diversified services really typifies or exemplifies what we've done in innovation. We really have a formula that works for us. All of our innovation starts with our client, whether it's a need they have today or an anticipated future need that we think we we need to address. From the client, we make sure absolutely sure that the new innovation, the new business line, the new service is complimentary to core Guardian, because again, I'm running the Guardian business, right. And with that, obviously, to drive the business, we have to put focused investment, we have to put purposeful investment sometimes patient investment in the new business lines that we're creating. And so we've done that quite successfully. Now the secret to our specialization is we immediately put a leader over the of any new product or business lines. So they have accountability and they wake up in that in the morning and all they think about is driving that new product in service. And we've done that consistently as we've developed these 6 pillars. So I think innovation has really been key to our success in North America, right? So now let's switch gears and talk about something that's already been introduced in previous presentation really will position us in the future for significant, long term success. And this is the business transformation for North America. Project I've been a part of for the last 3 years in early designs and development and most recently over some of the final design and development. Our is to deploy this, in 2020, right? And I'll give you a sense of the scale of this transformation. This is very large, very complex transformation. Essentially at North America today, we have 28 different databases platform systems that we use to run our operations. This new business transformation will convert us to a singular consolidated platform across the entire business. Now the scope of this is everything you see on the screen there. The workforce management is our upfront kind of core operational platform that focuses on scheduling and timekeeping and payroll, all the operational piece. Everything around our hiring training, recruiting and onboarding is the HR piece and all the HR processes is in scope as well. And then of course accounts payable, receivable, billing and invoicing and all of the reporting is in the finance element of this transformation. So to say that it doesn't cover every part of our business would clearly be a mistake. It's everything we're doing with this transformation. As I mentioned, it's rolling out. We've already done wave 1, which is our financial reporting and it was rolled out in October of this year. It's gotten very well. And we're targeting mid next year or so for the full operational deployment. What's exciting about this is not just the modernization and the efficiency we get, but by our estimates and by estimates from a number of our third party partners that are assisting us with the transformation transformation, we're anticipating a minimum of 30 productivity improvement with a team that needs it the most, which is our branch managers. How do we get this? If you think about most our processes today with the 28 systems are are fairly manual intensive, right? So scheduling, timekeeping payroll tends to consume a lot of of our branch managers at a given time in a week. And so the automation of those processes by our estimates and the estimates of our partners have basically said we're going to give percent productivity back. I'm excited about handing 30 percent more time in a given week back to our branch managers to allow them to be closer to their clients to better engagement and really focus on service delivery. It's a very material shift in their workload in a given week. So in addition to the productivity, we also have a lot of new things that I think will be our future state. So the moving from manual processes today that may be a little bit time consuming and may be a bit delayed to automate processes that create more of a dynamic response in our system and our services to our clients. It's really going to change I think how we operate with our clients. The data that we will get from this system. The data we're starting to really use now more effectively, I think will be just tremendously valuable to the organization. Early stage analytics with all the data operations, finance, customer driven data that we get from one system to machine learning at some point that we're talking about now introducing to try and get predictive on the future with this new modern platform for us, I think, is pretty significant and pretty, pretty positive. So why we'll get really great results from this productivity results, really enhanced operational capabilities? My role as we step into my future role as a new leader in guarding, I believe, is to really focus on continuing to strengthen our core, right? I have worked very closely Santiago Galas over the last 6 months in this transition and with my management team to outline a set of priorities, for 2020 and beyond. These priorities, I believe, are really gonna focus on continuing the transformation in North America, and I want to share a few of those priorities with you today. The first one no surprise. It's specialization, right? The, to me, we've had a lot of definitions of specialization and I think Magazineships did a great job of talking about it means in the organization. I see this transition, from, to to 2020 and this new leadership transition as really something that exemplifies this. You look in 2005 Core Guardian, over 14 years, the development of the diversified protective services elements, these multiple business units that have been under the remit of Santiago and Bill. And now in 2020, we're basically segmenting these businesses and applying new leaders, right? So myself, and Jose Castahome will now be in charge of guarding. Jose and myself come from the guarding world. We've been in this business for 10 15 years. We're we're operational guys. We're leaders who have actually done very well in this business, but now we're in charge of it, which is really an exciting opportunity. So specialization is applying good deep leadership to a business unit who now can drive it even further. And that's what our plans are. Within the guard business itself. I've got a few other ideas. We have a number of business units where we have great specialization that I think we have further opportunities. In manufacturing and oil and gas and put new leaders over the top of those businesses and we're expecting great specialization, great results in developing clients in those verticals. Within our global national accounts, we have additional specialization. It's a very significant part of our North American operations. A very large and successful group. We've just put a new president, Kelly Stone, in charge of our global national accounts piece, who's going to really us on driving additional specialization and going to work closely with Brian and the Global National Group to make sure that we we are working as 1. And security solutions and remote guarding, ultimately this will be something that I will talk about in a few minutes, but it is an extremely important element of an enhancement to our core guarding business. And I think we have an awful lot of opportunities to advance our margins and a few other things by focusing on specialization there. The second area for us is one that I'm truly excited about, and this is about our presence. The focus here is really on improving client engagement, which I think is fundamental to growth and long term success. And what we are on right now is we've began a journey of really an organizational transformation in North America, which focuses on the addition of 150 new branch managers in our across the the the, US, Mexico and Canada. This is a 30% increase in our current mix of branch managers. At core, at the central park of this whole initiative is really focusing on getting smaller client portfolios. Why? Because history has proven to us when Branch managers have smaller client portfolios. They get better results, and they tend to drive better value to their clients. Right? So better engagement, better officer engagement, better service delivery, and of course, with all of those, you get better client retention. And I think you just kind of step out of context here think if you have a branch manager that has 30 clients in a portfolio versus a branch manager that has 15 clients in a portfolio, that client engagement, that responsiveness and then alignment with that smaller portfolio is going to be better. Now this journey has already started. So in 2019, we've already added by the end of this year a total of 70 new branch managers and we'll have a full complement of the 150 so another 80 in 2020. So we'll go from 600 branch managers in our guarding unit to 750 branch managers in our guarding unit by the end of 20 money. Data and being data driven. It's been mentioned up here several times. I can tell you this. I remember the moment we're became a data driven leader and this was 25 years ago when I was certified as a 6 Sigma quality black belt with another company. That changed my life. It changed the way I looked at things that changed the way I eventually became as a leader and it's how I've operated very successfully over my career For the last 4 years in the Pacific region, we've had record growth on top line and record performance on the bottom and a lot of it's because we're really focused on using data to drive priorities. So I'm excited about the opportunity to take my skill set and my experience and the data we have in our company now and really bring it across North America. What you see there are a series of graphs that have been kind of cleaned up at early onset priorities that we've laid out 2020. So everything around sales growth, portfolio management, regarding client retention, we have data driven tactical priorities that I've laid out for my team for 2020 in our business planning sessions that have just concluded. So I'm excited about data and the data we have today, but the data of tomorrow with our new business transformation and that consolidated system, I think, is going to be really, really powerful for us. And I think it will help to continue successful. The last piece here is really around solution side. And that solutions piece, which we've talked throughout the entire day, is really core and central to our North America plan. I think there's 2 real strong compelling reasons why we need to make this a priority in North America. 1 is our clients continue to demand more dynamic capability and services, right? Our success in North America is because we've developed this over time and we've stayed ahead of that demand and been able to fulfill that demand, because we have invested in innovation. So we have to continue down that path. The other piece is somewhat selfish because ultimately when we look at the portfolio of solutions, we tend to see better margins on clients that utilize solutions and we most certainly see better client retention. Those are two things that I want to continue to drive in the business. So advancing solutions because it's a market demand and there's a benefit to us and to our clients really it's incumbent upon us to make sure that's a priority. So for our tactical or strategic planning here, we actually have a number of things we've laid out for 2020. Innovation in products and services will be a priority for us because the pace of change in technology in North America and frankly Across the Globe is incredible and we have to make sure that we're actually matching our clients' needs up with the best services and products. Further specialization. A great example of this, we have a remote guarding, which is one of our protective services offerings, and we're be putting a dedicated leader over the top of remote guarding to really help us to expand and grow that business. In North America, we're going to specialize in that in 2020. That SST group in North Carolina that provides our centralized support is we're going to focus on scaling. So we've had great growth in this space, but now you imagine we had 150 new branch managers that are out there generating new opportunities us. The idea here is to ensure that we can scale for for growth in this in this Curitas, in the solutions piece. And the last point I made on there really one I want to emphasize is everything that I've presented to you so far around getting the better productivity and adding branch managers to better for better client engagement and client alignment is really intended to drive a better proximity to our clients and to develop the trust. Trust is absolutely necessary in my my personal experience. If a client for a client to really consider a solution, an advancing solution to from Securitas. So trust will be continued focus for us building the trust, building the relationships ensuring our service levels are there. So in a summary, if I'm asked and I have been asked, what does success continue to look like in North America? I'm filling some fairly big shoes. I have a fairly big operating business of operation that I have to continue to 5 great results in. And I think we're really excited. I know I'm really excited about that what's in front of me. I think success is really a function of executing on the things I've just outlined for you. So the business transformation that's been ongoing for 3 years get to see the deployment of that in 2020, modernization of our platform and improve productivity across our organization. The specialization will continue to be a priority as it has for the last decade as it will be for the next decade, innovation and focus on, on expertise within within, with a good client alignment. The increased presence to me is a really big change for our business and it's going to bring a lot of advantages to us to basically have that many more branch managers out there that many more aligned that better alignment to our clients and smaller portfolios with better client engagement. The data driven piece to me is exciting for what we have today and then what we will see for the future with our platform. I think our company is very data savvy, but I really want to lead them into more data driven prioritization. And 2020 priorities have been set based on that. And lastly, advancing solutions for the reasons I talked about increasing the value to us, increasing the value to our clients and really focusing on better client retention. So, in a nutshell, the focus in the business, if you look at these individually, we'll all contribute something to our organization in North America America, but the collective execution on these elements here will really help to drive those things that you see on the right. So thank you for your time. I'm going to hand it over to Magistown. Thank you. Times and obviously very strong position in North America. Now we are shifting to Europe and very happy to introduce you, Peter. Peter is Swedish, as you might hear from parts of his name, but he spent many years working in a number of different continents and also countries. Most recently leading Cisco in the Europe, Middle East and Africa region. And you have now been with us for a little bit more than 9 months. Yes. And so so we also said we felt this quite good also for Peter to share a little bit which I promised to do some of your early impressions as well and also some of the thoughts in terms of the strategy going So, we're complete. Thanks a lot, Magnus. Thank you. Appreciate it. And great to meet you all here. So, I joined here in the springtime, and what I did immediately was jumping on a flight. First day, I actually traveled to and then that continued for about 3 months visiting all countries, all parts of the operation, more or less traveling every Workday of the week. And I spent the time to see a lot of customers. I was seeing a lot of our country presidents, but also a lot of the branch managers and also a lot of officers really trying to learn the business, but it have, of course, the questions, what's really good with the European operations and what are some of the challenges with operations? So I learned a lot and I came back feeling very energized and grateful and convinced I did the decision when I joined. But as you can imagine also after doing that, you have a lot of impressions to sort out, and I'd like to share a few with you here to get this presentation started. Let me start with the positives. First of all, I think what's really striking when you travel around and seeing a particular to customers is the brand and the position in the market. This is a very fragmented industry, and every customer or client has a lot of choice in terms of whom to work with. The brand of Securitas really stands out and it is built over a long time and is really a premium on the promises of that brand. And it really comes in a very consistent way. I would say in the majority of the European markets. So great foundation to build from. Then this about the wider protective services, which you see in here during the day, I think Europe is probably the place in the world where we managed to implement that to the fullest extent today. There's still a lot more to do, but in every market, we're more or less able to deliver on that promise of the different services. And the strength of that in terms but that can create for the clients, it really stands out as well. Then thirdly, great people, and it sounds a cliche, but I I really mean it. I mean, that's what you feel when you travel around and seeing people. It's friendly people. It's committed people. People would value well intended people. I mean, that was really a takeaway for myself. I mean, lots of really great people. And I would say it's fraud organizations. This does leadership level, but it goes all the way down to the guards, really passionate about the company. And the purpose, which Helena explained here earlier, I think it's really created by them for them, and I think we'll just reinforce that. Then we are running a very decentralized business, and that's been a strength for a long time. And what makes that work is that very strong ownership out in many CEOs every time you met the branch manager, really caring about the success of the branch in a very holistic way. And both the long term development but also really delivering the results each and every quarter. Then I will say also that I got the impression this is a team that is delivering on what they asked to do. And I think what's said 4, we built the long time, the successful model we have. But I can just say the implementation of the cost program, which we did in the Europe, is an evidence of that. I think it's a tough thing to do as a leader, but implemented more or less flawlessly. Off. But if that's what we want to do, then we just do it. So I would say a lot of really good things to build from and of course, way more than this, but these were some of the things that stood out for myself. You, of course, observe us and you observe us with a critical mind. Which is exactly what you should do. And so did I want to travel around? I really want to understand also what do we need to address to become better? So I'd like to be quite transparent also with some of the challenges I think I discovered as well. The first one is quite obvious, not least to you that our following from a financial lens in many different perspectives. Will all this greatness Why hasn't the operating margin improved over the last 5 years? It's even been slightly declining. That was a real question over and over when I was really learning the business. Then perhaps amplified the last year there's also been some export problems. Contract losses in a few markets, talking about France, UK and Sweden and also some challenges with price weight a couple of important market for us really making this even more challenging. And I would say that solution progress in Europe has been really, really good and probably been meeting the expectations, exceeding them in terms of goals that were set out. But the progress is still quite uneven. You can say that's the potential, but there are countries today that I think have not done much as it could have. And some have done a really good job, so the average is looking, of course, very nice. Then the last one, and this is an important point and I will come back to that a bit later reflecting on it. Europe is inherently fragmented. I mean, we are of course, many different countries in Europe. It's not like one country. We all know that. But also the way Securitas has been growing with this level of decentralization means that it's one company, one brand, and one culture. That's the same everywhere. But the way we operate, the way we have organized, what the branch manager is doing, how we organize HR Finance, IT, all these things in the details is actually implemented quite differently in the different countries Europe. It's a quite fragmented starting point. So I took all this, and I can say that while were some positives and some challenges from this kind of experience and learnings in the initial phase, I I felt really reassured that this is a great opportunity to create a stronger Europe for the future. And I will share some of the thoughts on what that means, but before doing that, I like to take you on a few different more elements of reflections. Us in Europe. And you immediately see there is a lot of blue on the map, and yes, we are in a good way covering Europe more or less every country see that in the Nordics where we started from, we are the number 1 in the key markets. But we are also the number 1 in the biggest European markets like Germany and like France as examples, huge markets where we are the number 1 and also the leader in the same way. And when you come there, they know it's an international company, but it's so big. So a lot of people these countries almost think it's a German company or a French company because it's really the market leader. So that's a great strength to build from that strong presence across Europe. Then some of the, I guess, stats, you you have some of them, but perhaps a few would be new for you. There's around 128,000 employees, really would have passion. We have close to 800 branch managers caring about the business every day. We have more than 3000 cars out on the street, more or less 20 fourseven with different offices in them. We have more than 6000 people working in fire and safety. We don't talk so much about that. That's a huge market in itself. We are more than 100,000 clients If we exclude the monitoring And we actually have more than 20,000 solution contracts. And I think that's impressive because we said we will work with solutions a few years ago. And now we've been striking 20,000 contracts. So I think that This, for me, is a great position to build from, and we can do a lot with this as we build business going forward. I would also say that the position is very appreciative by the customers in the countries of course, but also we said before, international companies and large companies. And I also like to highlight a few contracts which we have won or at advanced in the last period. The first one is the airport of Berlin. Most of know that it's been a long way to get the new airport in Berlin and now it's supposedly going to open in the fall time. And this is one of the largest security contracts, probably worldwide, the building awarded recently. And we are very pleased to have been awarded. And we are perhaps even more pleased how it was awarded because they had made your focus on the quality in the world because they know that this transition will be very complex. And after this long way, an opening airport, you like that to happen flawlessly. So, I mean, we manage based on our experience and what we do, to come recruitment and training. And then we will also do the quite difficult transition from Taegele into this new airport. So I think it's a good evidence of how this kind of strength and quality and operations and brand is translated also into customer success. If I take a very different example, but also a very important one is that we work with some of the largest companies in the world, with Microsoft, but in Europe also a very successful partnership. And is the partnership built on As you can imagine, Microsoft is a very good company, very demanding company. So they demand a lot in terms quality of service, their requirements are very advanced. And of course, it's also very tough to negotiate. It's also about doing that in a cost efficient the way, but the greatest thing with this is the joint innovation we're doing with Microsoft is a very open dialogue how to push the limits of what we're doing together. In terms of security, in terms of security service, but as you can imagine, all also fueled by technology and the know how of Microsoft. And we are doing work with other technology companies, also another large one, a Microsoft kind enough to allow us to mention them today, which I think is great and something we're grateful for. These segments very large companies and global companies is already today growing faster than the rest of the business for us. And I think there's a huge potential to continue to fuel that for us in Europe and globally as well. Then the different side of the spectrum, and I've been good excitement and some discussions today about the future of services and in the security industry in the future. And Vossakrunan, you hear it a lot because it's probably the case we are able and allowed to talk about openly, we have joint innovations with around 10 companies in different aspects and new digital models. And today, we're focusing a lot on the co innovation and shaping the service and learning. Over time, we should be able to scale this into good business opportunities. But what I also will say is that it's a standalone business in itself, but it's also fantastic learnings that which fuel our capabilities, which we can work with across all clients. So we can probably see it as incremental revenue, but also as a way to strengthen our value proposition. And what's exciting here is that you're strengthening that based on our skills, our size and our know how. And the industry is very fragmented, but I think the few companies that are able to do this at scale in what we're doing because Magnus explained this some investments going in here also. So we believe that this is a capability which we can differentiate with in a very nice way. So let me move to the services and you've seen this picture a few times today and this is the symbol of the protective services. Every icon is a different service, of course. If we go through this for Europe, on-site guarding is this 65% of our portfolio. And I think we should be very proud of this business and take very good care of it. In some countries in Europe, this business is well performing. To recommit to this business and to work on the processes to make sure that we can really take this and innovate more on the processes and way we're working and let this continue to be very successful. I actually think that in Europe, we've been very successful building a lot of the other things. This is an area. If you look back, we could probably have done better on. But I don't think it's too late in any way. I mean, we have a great opportunity to now go in and strengthen this part of the business together with other things. And that's something which we commit to do is really part of what we like to do. Going forward. Then of course, mobile guarding, it's very interesting. It's a quite complex business actually. I mean, to see some many different clients and do that in a way that they create a differentiated value for their clients. We have a very good mobile presence in Europe, which is a great business in itself, but also when you combine that with solutions and sensors and you know what and everything. Whenever sensors trigger and something scary happens, that something unexpected happens, of course, you like someone to come there and do some kind of check or intervention as a technology link to the mobile network is a great opportunity for us. Solutions, and we announced our ambition here earlier today and Europe is a major part of that ambition. And we are very committed to drive that in a successful way, and we have a huge opportunity to do so. Where we are is that we've been very successful taking us to the point we are today, but now we need to think through how and we really double that, getting on the next S curve. So we need to institutionalize the way we work with it slightly more. So it's about do we organize the support for our organization to sell this at even broader scale? This has been almost like an incremental additional cell in the past. Now it needs to really get into the core where air re salesperson out in the field need to be able to sell solutions. And that's something we're working on thinking through how to do that in the best way. Electronic Security, Toni laid out the global landscape and strategy very well. In Europe, we are following that. What we like to do is to grow that also organically, but also complement with some acquisition. It's a great business when we do it well. In our business and specialize that business a bit more because we also hear some pockets of absolutely fantastic success. But also areas where we possibly could do better. So this is another area where we really align in Europe in a dimension, almost like a matrix way on top of the countries that still will have an important role in this. Then lastly and safety. Quite small for us in terms of sales, but as you probably know many of you this is a huge market in itself. And we're quite intrigued to think through, could this be an area of further growth and expansion? So we're also looking on this and evaluating. And if we find the right way here, here is another access of real exciting growth for us. So we take a close look on this one as well. So as you can see here, this is really a story about each of them being a very significant market that we can drive a lot of improvements in each of these services. But then on top of that, as I was said before also, when you combine them, there are also good synergies and decline can get even more value out of the combination of them. So there are a combination of standalone and good synergies. And that's why we think we can really create a good value creation strategy around it. So I spent a lot of time now with my leadership team, is essentially the country precedence from all the countries to discuss, okay, how do we now take Europe to the next level? We are not completely done in that strategy work and formation work and creating the plan for the future, but if we start to understand quite well what needs to be done. So I will share some of the high level areas with you The first one is yes, as Greg, very well laid out for the U. S. This about being the best place to work. Is something that we would like to take to the next level. We already very appreciate the company and we already have a lot of people that have been with us a long time and we already have a lot loyalty in our workforce. I still believe we How can we strengthen the value proposition for the guards and for the whole organization? How can we in a good way. We're probably one of the most people intense companies in Europe, and I think we can take those processes to the next level become even better, benefits for the guards, but also for us as a company, if we do this well. And then when it comes to planning the workforce. This is done today with great care of the branches. We have an opportunity here to give them better tools, to really give them the tools of the future. So this is another good opportunity. We have Granja Kelly here sitting and listening in in the back, and Granja has been appointed to be our people leader for Europe. So part of building the Europe, you should wave here, Brandyas. So so so part of building our European division, we wanted to have a strong leader to really drive is together with the country, people leaders and HR leaders. Sigrandia, we wish you well in the role. Commercial Excellence is another area. We are operationally very strong and a lot of customers are coming to us and working with us because of that. But we expanding our portfolio, and as you can see, this portfolio becoming richer, we also need to increase our ability to facility services. I think we can do the sales and the customer processes even stronger. So we are investing in this to also look on everything from cross country clients, which is really an opportunity for us, but also looking on how we can leverage CRM in a stronger way. And then lastly, this about the price wage balance is very important. We're doing this well, and we have done it well for long time, but of course, we've got an awakening from some of the missteps that have happened here in the last year. So putting a of focus on how we can do that in a thoughtful way. So we are always on top of it. Then solutions I talked about it before and you heard it many times here before, but it's such an important value creation one area for us. And Bart's slide, which you got here in the beginning of the sessions, I mean, the correlation between solution success and how profitability is very significant and real. So to drive this and really do this well, we're thinking through how to work with organization, maybe augment it in different ways, possibly also different type of partnerships, but this is really about living up to the ambition and a great opportunity here. Then the last area is this about leverage and scale of Europe. I highlighted that Europe is a bit difficult. I mean, with all our great countries, we love Europe, I'm sure many of us, I do, but the the setup is difficult because we are not 1 big countries. It's actually 28 countries, and we do like to continue to work in a decentralized way. Because that is so strong in the culture and been such a strong part of our success. But we're asking us, still, how can we get some better scale benefits and some better synergies out of this. And one thing we are asking us now is that should we have a bit more prescriptive way on how we organize countries, so more like a country target model. And the similar way a bit more prescriptive way how we organize key processes. And many you, Avast, how about the European transformation program? This transformation from the business needs and from the business opportunities. So that's what we're spending a lot of time on at this point. So we will do some type of transformation program in Europe. We're not totally red to communicate because still we're doing a lot of work in terms of, in particular, how to organize and how to do the key processes in a way that take into the future. And then when we know that, that need to be enabled with newer and stronger and better technology. But we assure you that the decisions we will make really will be thoughtful and well thought through, and it will be based on benefits for our client benefits for our workforce and of course financial benefits for investors and stakeholders. So we look forward to come back to you with a well thought through plan when we're ready. I think it's I think you should be able to expect to get that next can the year. So it's not like years away, but we need to have a bit more time to really lay that out in detail with the right thoughts behind. So tying all this together, what would success look like? Mean, 1st of all, continue to build this great platform we have. We will not do anything that will not help us to continue to nurture that great platform about the brand position, attractiveness as an employer. It's very important for us to continue to think long term and do that in the right way. But then I would say margins, we take it very seriously in Europe and we will increase the margins. I mean, that's really the ambition we have. But the way we will do that is back to protective services, there are 2 ways to make this happen, of course. 1 is to grow the higher margin areas in a further way to get the different kind of portfolio that's one way. And we have been on that journey for a period of years, and we will continue to work in that direction. But the other one is this about the on-site guarding to really take a close look on that. Of course, also in spite of the great work the American colleagues are doing? What can we do in Europe to help inject success into that part of the business? If we do both, then the success really come. Then I would say also growth continues to be important for us. We like to organically grow And we also, of course, will complement that with good acquisitions that will strategically be helpful. Thanks a lot, everyone. Very good. Thank you very much, Peter. So with overview of Europe, we now have the last division and then I'm going to do just a brief update related to our EMEA region. But now very happy to welcome George Coutu to the stage. George has been with the company for a number of years. I think 20 years plus. And yes, but that was promoted on the 1st July this year to lead the Ibero America division before the George was very successful in driving 1 of the lead markets in Securitas, which is Portugal. We've had a tremendous success all the time in terms of really building a strong business and also then with a lot of emphasis on solutions and the EDS offering. So great to have you here George. Thank you. Good afternoon to everyone. So it's my, my first time here. I would like to start to say that I'm really happy to be here I have not been in these new positions for the last for a few months. And I'm really proud be part of this team. So if we talk about this division and I felt to the divisions in the high level perspective. And look to the markets, both regions, I vary and LatAm, I see some differences. We have 2 mature and the developed markets, Spain and Portugal that are 2, which are 2 of the leaders countries in the global level in terms of driving, really driving the strategy and is equipped the solutions penetration. And in Iberia, we have also a market leader So we are setting the standards in this market. I see that in the last 10 years, we have been investing a lot to enlarge our presence and to create a good footprint. There. And nowadays, the target under the challenge is how to strengthening our footprint in that region. But if we look to the division as a whole, we are operating as offering services in 9 countries in LatAm which is quite significant and, as I said, in the area, Spain and Portugal. And we have more than 63,000 employees, we have more than 500 cameras. We have more than 80,000 CCTV cameras connected to ours securities operation centers. And if you look to the to year to date in 2019, We represent 25% and we have it in this electronic security and solutions. So it's quite impressive the presence we have in this division. Looking to the sales, we represent 12% of group sales and a little bit less, 11% comparing, if you're talking about operating income, what mean that we are a little bit below the rest of the division. And in LatAm, we are the number 2 in terms of market share. So I think, Bart, as, as I said that, I will talk a little bit about Spain, because Spain is a good example. But before talking to Spain, it's important to say that Iberia is at the forefront of its equities and development. And in terms of sale, we represent 55% of the sales, but if you talk about operating result is Eagan So is that Iveria is playing a very important role in the within the division. And I think we can take advantage of this from that. Because it's best practices that we can use it to leverage and the business in LatAm. So what happens in the up up in in Spain? If we look to 2011s, it's easier to understand that we were at that time, a garden company, 95% of our business camp for on-site garden, only 5% from, electronic security and the security solutions. Well, you know, that was, as happened in Spain, the 2 prime quizzes that start in the 2008 and they has promoted a very hard business conditions in Spain. And we lost dramatically lost substantial part of the business and to the margins have dramatically dropped as you can see. And in 2014, the operating result was 1.5%. So it's urgent to something. And as you say, sometimes when we have acquired this, is a good opportunity to make changes. And we have transformed the crisis in an important and huge opportunity in in Spain. And what we have done? Well, in my opinion, not rock science. Because we have one tool. This is step by step in our toolbox that is teaching us what we need to do when we have such environment in such situation. And we started to work and to change the leadership. Is crucial to have a committed and engaged leadership. And we changed in Spain the top management leadership. The new management to believe really believe that this is the only way to implement and to be successful. This is the first step that we have done there. So what is the step by step, tools the, teachers? Okay. After the leadership, we need to work with the people. Needed to work with the organization and we started to change the organizations. We have done a big and impacted restructuring process. We start to assess what kind of people we have We are excited to put to the right people in the right place and, implement a different human resources policies. This allows us to start to implement the banking model process. And what is the binds from model process? I think we are all familiar with that. And in my opinion, and I started in Securitas 20 years ago, being branch managers. And for me, it was very important because it was the most grateful times that I spent in securities because I had the opportunity to understand what really means resources to create relationships to understand the client needs. So, what's what we did in in Spain. We implemented the branch model at the same time, the flat organization. And the flat organization is simple. We have the county president, head manager and the bench manager. Only three levels working together very close to the clients and to the people, to our employees. And was what we have done. Well, doing that, we need to leverage and support all the organization. We started to change the process of work. We started to invest in tools in order to get information to measure the business, to get to set up KPIs to follow the business is very important if you don't have information to support our management decisions is difficult to improve continuous improve day by day. So after these transformations, Organizational, a transformation that we have done in Spain, If you look after 2014, we start to recover. Our presence, our market share, we start to sell with more add value the clients start to understand that that security is different because we start to differentiate, to create more business lines, to enlarge our offer and the solutions that in 2000 security solutions and electronics security 2011 was 5% last year was 30%. And the impact that we had in the operating income. So it was very successful case. If I look to LatAm, I see a good opportunity also. I have now been there a handful of times over the last few months. And, I spent quite a lot of time with the the teams locally, and, I see good things and positive signs, but I also see a lot of opportunities to improve our business. We need really 2 implement and to drive the Securitas operation model all the way through. We needed to drive our strategy. We needed to do more like we have done in Portugal, in Spain, but also in some of the countries in the region because we have very good examples in LatAm also. Like Uruguay and the Colombia that's having performing quite well. So what we will do in LatAm Well, as I said, strengthening our existing footprint is it will be our focus. We are not concerned about increase our presence. We needed to focus where we are and start to make some changes. As I said, we have successful countries, could be best practices to and then to implement in other countries. And we are making some fine tuning, some adjustments in some of them. In terms of leadership. We needed to have a very strong leadership in the in all the countries in order warranty and to support and to leverage our strategy in that region. So After we make these some changes, we will do the same that we did in Spain or that we did in Portugal or in other countries. We started to work with people, try to engage people. And we have now a very good opportunity because we are a new purpose and using the new purpose because we use it to have our values, our strong call So now use our purpose to follow and to put to the people on the same track So this is one of the things that I am intended to implement. And my key objective is to implement the branch management model in LatAm. I see that we have a several separations in some countries. One side we have operations and the other side we have sales. And we don't have connect connected. Is not the way. How to transform a client, how to sell solutions, if the branch managers don't have white skills. The branch manager and his team need to understand all the processes. We needed to conquer the client. We needed to engage the client and create good relationships. If the client don't look to us as a security profession, it will be almost impossible. No? And is because in LatAm, we are competing so much only on one guy's on regarding business and the trends of the margins that are decreasing. And we need to interrupt that. So as I said, we very good best practices in the Iberia and also in LatAm, and for sure that we'll use it to lever all the regions and some key and important countries that we have. Another thing that we need to do And I think in my opinion, we have lack of tools. We will need to implement modern tools We have a project with Martin also, not a rovalace on earth and an IT transformation, but we need to look country by country How is possible to make some investments in order to be more efficient and be more profitable using this tool? The impact will be on the gross margin, but also be more efficient and leveraged indirect costs. Well, I needed to talk about the situation that we have we are facing in the region I think we are all aware about what is going on in terms of political and social problems in Chile, in Bolivia, in Venezuela, Ecuador, Argentina. So it's a complex situation. And also we have differences in the terms of market maturity, but these challenges in my opinion could be also a good opportunity. Because the clients now, they are more aware about to secure their assets to guarantee the safety of the employees. So this will be a good opportunity for securities, but a well organized and the clear strategy and available to invest in our clients. So in terms of opportunities, what I saw also We have a very and strong portfolio, mainly all of the clients in the private sector. And my experience along these years is easier to introduce our ideas in terms of value in terms of solutions, in terms of new tools, in the private sector, because we know that the public's client they are barriers in terms of their procurement legislation. And I think this is a very good opportunity in this region and in LatAm. And I saw also very excited and engaged with people that needs with some changes in the terms of the leadership they will be able for sure that work because they are motivated, they are excited, and we will create better conditions, better logical conditions to achieve that. Secours as very good competitive advantages. In my opinion, the first one, as I said, strong, proposed, clear strategy a solid business model that we always within Secours as we understand very well and our availability to continue to invest in our client and in tools to create value in our services. Well, all in all, and then sum up, we have countries that are leading in the 1st step, the Garden business. We have another ones that are leading to Protective Services. And we have some within the division that are prepared to look to go further and to look to the leaders in terms of intelligent services also. So we have a mix within the division And I think it's possible. It's very good to have these differences within the division. And our 3 main focus areas in the next following years will be growth, gross margin and indirect costs. And for growth, I think it will be not difficult because as my colleagues said, we are facing pressures in terms of sellers increases not only in LatAm, but also any value. So if you need to increase salaries, we needed to increase prices, and some of the growth will come from the price increases. But do we have clear, we have 2 main projects, the client engagement program that, Enrique was talking about that in my opinion, it will be powerful in order to improve the client protection. We need to improve the client protection and we have also some projects to make some changes in the sales organization. So if you sell more and better, If you lose less with the price increase and keep an eye in strategic acquisitions, we have I think good conditions to keep growing above the market in this region. And the gross margin is will be a business mix. We needed to, all my colleagues always talk about that is to execute our strategy. We needed to in line our offer, our business mix, we need to be more efficient because one of the questions is here was, what we'll do with the garden? We'll only look to the to investing in technology and the solutions, but 70% or 80% is still Gavin. I think in this region, in Latin America, I think we have a lot to do because if you implement the right tools, if you have a thorough cost control, production cost control, we can improve also a little bit and be more competitive in our market. So efficiency and competitiveness is key behind electronics, equity and mobile solutions. Also. And the indirect cost leverage, I believe also that we can do something more. We can get synergies if you consider the country, the both regions and the division. And we have in plan also in terms of invest a little bit more in the division to put more resources to support and help the countries locally. So this is our plan to the following years and what I would like to share with you. Very good. Thank you very much, George. So we will open for Q and A shortly, but before we do that, I would like to do just a brief update related to our EMEA region and that is essentially Asia Pacific and the Middle East and Africa. And this is a big part of the world, but a fairly small part of our business up until now, but we have good growth and we have a very good team in this region. So what have we done and what does our situation look like? Well, when we started to expand and to establish security in the EMEA region. That was done with the ambition of catering to global client needs. So we are very global client driven in building the footprint. And today, we have a footprint in 16 countries and then with more than 60,000 employees. And we have more than 50 I think is 56 global clients that we are serving across this region. And this is important, even though it's a fairly small part of the business today because this is a big part of the future growth. So if you're looking at the service is industry and outsourced guarding in this case. You then see that India and China will be 2 of the primary drivers behind the security services growth on a global level, but obviously also then in this region in the next 5, 10, 15 years. But what we have focused on is and what we do focus on also in the next phase is not to expand into more markets, but rather to invest in core markets, we are investing in our people, but also in our protective services offerings so that we can start establish real strength, not just to have a footprint, but to build genuine strength in some core markets that we can then leverage as well to be able to tap into the growth when those opportunities present themselves picture. So, we have a very strong team. It's like I said, it's a fairly small part of the global business and we are reporting this under our other segment for that reason, but we have a strong team and very good client relationships and we will now step up some of the investments organically, but also through acquisitions to strengthen the footprint in a few of these key markets. So that is a brief overview of our business in EMEA. But with that, I would now like to open up for the last Q and A and to ask George and Greg and Peter back on the stage and then more focus in this session than on our divisions and the work that we are doing. So Mikaela handing over to you. So, please, we have a question from gentleman here in Ferrogl, Karl Johan Bonnevier, DNB Markets. A little higher question, if I may, and it's a 3 level question in the way that looking at technology growth during 2019, we obviously to the growth rate you have shown in earlier years. So it would be great to get a little feel for what you have seen happening during this year. And obviously, now you are putting up quite ambitious target for the next 3, 4 years for growing this again. So a little more feel for the timeline, how you see a reacceleration of this again, if it's a hockey stick in 2 years' time or something that we should expect a more continuous improvement if you are looking at it. And then also, I heard that they have word accountability coming quite a few times during the presentations. How have you drilled down this 40,000,000,000 target in an accountability kind of project? Have you built the 40,000,000,000 target basically? Is it after just you're looking from a top line opportunity or is it coming from bottom up? Yes, highly relevant questions. I can start if you want to fill in later on. So, we have established and we have learned quite a lot in the last 5 years in terms of electronic security and solutions. And like you said, we've seen a slower growth, but still healthy growth in the footprint that to scale this business over the next 5 years. So a big part is going to be what we're doing organically with the existing platform and resources but we are also looking at how do we in targeted investments through acquisitions, but also in strengthening our solution selling a delivery capability being able to then scale that up. And the reason that we're doing that is very much based on the numbers that we have shown transparency today as well. The part highlighted is that we see that we're adding more client value. We're also then adding higher value to securitas as well. And that is the reason that we believe that this is also warranting continued investments so that we can really drive that growth. The second question is then the targets. So if you then say SEK 40,000,000,000, the important thing for me is not the SEK number, but it's obviously to give you a clear reference and that's the reason that we spelled that out because the important thing is also internally that we are doubling. We're setting a fairly ambitious target for ourselves to double this business, but that is obviously based on everything that we have learned and all the proof points that we have today. How have we done that? Well, when we built the strategy and we did the strategy review, we also then did financialization. So we have done that across all the divisions to then also look at how do we now financialize the plan because we have limited resources. And like we said, I mean, we are proud of having long term value development, but we also have fairly stable margin that we would like to improve over time. So one of the important things in that has then been to say what is the opportunity so that we have accountability then not only on a group level for people like part of myself but across all the leadership that we have on the scene here and that we then have specific targets essentially that everyone has committed to drive. So, that has also been the methodology that we have taken in terms also defining that number. But it is an ambitious number, but we have a way that we believe we can get there. Any other comments on that? No. Go ahead. To increase your margins, you mentioned high prices for your clients do you think this can make your clients willing to, go to other competitors with a higher price I mean, that is always a balance, of course, but what I see is that we have long track record of being successful in managing price wage. And that is something that think you've also heard today, you heard it's from Pete, you heard it's from Greg and George as well that this is something that we continuously focused on to manage that successfully over time, we have to continuously push ourselves to do better as well because it's a lot easier to have a price discussion with the client that is really feeling satisfied with the relationship and the services that we bring. So a lot of that success is not only moment of price negotiation, it's also the continuous delivery that we provide to our customers over a longer period of time. So I think that is and the ambition obviously is that we are able to manage that successfully in the future as well. We cannot guide on the future, but we have a good track record, and this is always an important part of our business and the focus. Any further questions please? Yes. Edward Stanley here in the middle, please. Hi, It's Stanley at Morgan Stanley. I'm interested in North America on, just to get a feel for what the retention rate of your employees is or your churn rate to look at it from another point of view. And given that you talked about benchmarking your staff against, in sort of benefits against the Walmart's. Yes. Has your retention rate improved dramatically since you've done that? Dramatically would be probably a bit of an overstatement. We just introduced the benefits this year. The goal obviously was to identify benefits that we felt would connect with our employees, to give you an example, some of the health and, weight management benefits were a reflection of looking at our claims over the course of the last several years and understanding that our workforce could benefit from very types of benefits. And so we introduced those in the first quarter of this year. Utilization has come, but I can't tie them back necessarily to a direct number to give you a specific number. But again, the feedback utilization and some of the anecdotal feedback we're getting on all the benefits have been very positive. So our goal, it's early stage as you've heard, but our goal used to drive, better retention and more importantly, try to bring, you know, good quality people into the organization. Here. Hi. You're one of the analysts on Kepler Cheuvreux. Wondering about this doubling of the E and S solutions. Is that still purely business to business or are there sort of thoughts about business to consumers as well in that? Yes. So, if, I mean, we are a business to business company. We have some residential clients but that has never really been a core focus for us. When you I look at this big part of the solutions, I think Peter, you shared 20,000 solutions customers in Europe, those are all business to business relationships. And that is also the focus as we are going forward. We're sticking to what we are good at. And then we cater to some other residential business with our call out capability, for example. So that's an area, but we are normally not owning the customer. So primarily business to business focus as we go forward? I think we could I can add that not in business to consumer, but we have some examples, the B2B2C, because we have a very strong structure in terms of mobile, for instance, and we are providing some call outs, not directly to the final consumers, but have a client in the middle. So we have, we are seeing some trends that is possible to increase and to have good opportunities in that way. Yes, please, Stephen Golden. Hi there. Just in terms of the expansion in solutions. Can you give us an idea of what sort of multiples you had because obviously a large pile of would be through through M And A. What kind of multiples you are currently looking at in terms of the sort of businesses that that you'd like to buy how easy is it to buy businesses that will kind of move the needle on this front, I. E, what does the pipeline look like? And also, in terms of sort of synergy potentials, both from top line and also margins, what would you tend to expect from this kind of business? I probably should take that question. Yes, we are actively working with M And A throughout, throughout the period. As you have seen, we have added 1.6% on average acquired growth throughout the period. And that has been done by adding larger acquisitions and midsize acquisition and smaller acquisitions as well. Now we continue to work with that in terms of valuations. So the focus will be on electronic security companies. You cannot so much by companies that provide solutions as such. So just to be clear here, what we buy is really atomic security providers that we will then later on. On use in providing the service directly of electronic security or in using and building the solutions. So in terms of valuation, typical dis companies come at a multiple of 9, 10, 11, 12, depending on if they're really scalable. There have been prices in the markets up to 14, 15 are not prepared to pay those. I think also in the meantime, the market has come down on those multiples. I'm talking now more about a year ago where it was a really a height there. So we are not talking about those multiples. And I'm talking here about EBITDA. So that is the range there. It depends on where exactly and the strength of the company and so on. Pipeline, I will not comment on specific matters, but we are working continuously with it. And I should also say we are well known in the market and everybody knows security. So, everybody that considers to sell somebody somebody someone will approach us. It's not that we really have to scan the market, they will rather approach us. So from that perspective, we are well positioned. In terms of integration, we have a lot of experience now and we see synergies more on the top line rather than on the cost line. I mean, if we acquire these companies, it's mostly to further improve our skill set and our in-depth knowledge in certain and also enhancing our footprint in certain cases. So it's more about the commercial synergies that could kick in rather than looking for a lot of cost savings. That is really where we are. And then those commercial synergies can be you have seen from Tony. The examples that we can see both in both directions. First of all, guarding customers at buyer Thomas Security and the other way around. And then of course also the synergy in terms of building solutions. So that is a really kind of a booster to those businesses and how much that really is at the end of the day depends a lot on how well we integrate the businesses in a way while keeping the specialization. That is really the recipe. We have experience. We have more and more experience in those, and I think we are geared up from the balance to make acquisitions and to continue their outpace of, yes, 1% or sales of something. And then if you have a little bit more sizable, targets then we go more to the 1.5 over the period. That is where we look at. That we have done 1.6 over the period. That includes a few other more sizable ones. So I think yes, something like 1% should be feasible. And then it could go up if it would be really sizable kicking in, then it would help even more. Just to add to Bart's comment, to repeat one message from before the electronic security, we have, and I think Tony you that clearly in your presentation, this is really about building strength, but not to cross 58 markets. It's in a full set the markets because we've also seen that it really helps us when we have a critical mass position. And then we also need to be able to integrate this in a good way and then also to be able to integrate them in more of a global context as well so that we can also strengthen offering across that base. So that is really the next phase for us. Safebaker from JPMorgan. Two areas of question, please. 1 on adding branch managers in North America. Could you just explain Is the structure changing in any way? Or is it just adding more branch managers into existing branches? And how did you benchmark that off other regions Is that something that you might want to do elsewhere as well? And then secondly, just on Europe, obviously, you're working on the potential for transformation there. Just a couple of questions on that. 1, how many socks do you have in Europe at the moment? And is there any potential to reduce that number and maybe kind of scale better? And then secondly, or actually I'll leave it at that. Thank you. I don't have a pad here. That's when we have to start writing and take notes. If we know there are many 4 or 5 questions, it will be great. Why don't you comment on the branch? It's a great question. This is not a new model for us. Ultimately, when you look at the North America's primarily 5 guarding regions, one of our 5 guarding regions adopted to this model over the last several years and had seen great success. It's really it's one of our most profitable regions. So that the idea is at any any layers or distance that we have between our clients and our managers right now and redeploy or or reduce those layers. And use the funds that we save off that to invest in branch managers. So it's a proven model. I want to get the profitability in that region across all of the regions in North America. Yes. And on the European question, we have socks more or less in every European countries. And in many countries more than 1 because of redundancy and so. So as you can imagine, quite a few, I'm sure it's a potential. I'm sure it's something we could look on over time, it's not the immediate focus. We think that there are other areas that probably will yield faster benefits in terms of start working with, including key processes of HR Finance as well as the IT investments and platforms. So But it's on the radar, definitely. Karl Johan Bonnevier, Sergio? Yes, I'll take this answer. Just continue on that. If Greg said he had 28 of those kind of financial HR system in his operation, how many have you concluded that you have in it will be wrong for me to say a number here, but it's more. It's more. And, no, it's really an opportunity. To simplify that over time. I think it's important the way we approach it now is that we like to almost define what is the target model for how to run a country in Europe and also what is the target kind of architecture we like to have in terms of support system. Then what we we are in that process, what we then not need to think through after that is how to drive that change because it cannot be one big project where we change all this at the same time. You're probably more expect that over time, we will move towards that. But exactly how that looks like is what we can come back with when we talk about the transformation plan. Excellent. And then the question I was planning to ask Looking at 2020, how do you see in the different regions the wage cost price balance? Since I'm talking, I can start with Europe, we don't know yet. It's actually a work that really happens with intensive now, I mean, we are monitoring how should we say the wages will form in the different markets and in parallel with that, thinking through how to drive our price campaigns with the customers. So we are in the real preparation phase for this, but we don't have the knowledge exactly how it will land yet. It probably will more be in the beginning of next calendar year. And the dynamics are different as well. If you look at North America, it's significantly more dynamic. They will typically have a discussion with your clients, if you need to make adaptations, etcetera, the right people, good people. And then you do that in a much quicker process. If you look at Europe, much more collective labor, bargaining agreements that could then also have significant, the bigger impact. And that is obviously a big part of the effort I feel to say is that we're starting that work now, for or have started that already a few months ago as well for some of the markets, but then continuously obviously working to achieve that balance over time. And on looking at France and Holland that obviously were challenges during this year. Do you feel that you are able to fully compensate going into 2020? I'm going to say, I mean, the work is not done yet, but that's clearly the ambition. And that there is nothing if I put it like that, there's nothing of what have happened this year that will have an overhang on next year. And so we have an opportunity to get it right. Paul, are there, please, in the middle? Paul Checketts there, please. Thanks. I've got 2, please. The first Peter, you mentioned in your negatives column about the contract losses. What are your reflections on why you lost those? Were there any similarities been the factors. Whenever we lose a big contract, we do some type of loss review. I don't think there's a common reason across them. I think the unfortunate thing is that all is happening in a very short timeframe. I mean, sometimes you lose contracts, but you win more than you lose it's that, how business works here for us. But what happened was that we lost a lot in the short period and quite sizable contracts. Of course, trying to learn in each of them, but it's difficult to generalize one person across them. But, we're doing whatever we can to not let it ago. And the second question was a more general one. When you look at the range of countries, there's a big dispersion between those the percentage of Electronic Solutions. What would you say the key factors are in the countries that have done better and those have done less well in terms of growing that proportion? Yes, I can start. And Bart also, I think, made one good shot to outline that it starts with leadership first of all, because if you want to do something which is different tomorrow compared to what you are doing right now, that also requires strong leaders that are showing the initiative and also helping the team and organization to make that happen. But then obviously You also then need to start to build an understanding of how do you do that? And there are a number of different steps in terms of understanding the client. Doing a proper risk analysis that we have some of our team members showing here today as well in the demo. Based on the risks and the needs the client, how do you then build a solution, which is really catering and addressing those needs in a good way? And then, obviously, how do you become efficient as well in terms of implementing solution, managing that solution over time. So this is really learning curve, but it's long term work, but we are very convinced about the benefits and we are tracking as well. And that's something we haven't mentioned before. How satisfied or the client where we are delivering solutions versus standalone services. And that is also an important metric to continuously look at because then typically more satisfied clients are going to stay longer and they will also have a high willingness to pay overall. So it is really a journey it always starts with leadership. And if I could add there, I mean, the 6 key drivers that we have talked they kind of correlate together. If you are already strong in 5 of them, you have a strong leadership, you have a strong market position, the market by itself is pretty mature. And with mature, and we mean in terms of how they view security services, what they expect from security services, they have high expectations if on top of that you have a good managed cost structure, then you're really good in a well in a good shape then to take the next step that is to go to electronic security and create solutions. If on the other hand, you do not have the right leadership. You are in a terrible market that you all of that will then make it more difficult to go to electronic security. If you have a market that does not really appreciate the quality of guarding it's a much bigger step to take. So that is why we need to make them they reinforce each other the 6 performance drivers and they correlate quite well together. Any further questions, Henrik Moby? Please. Thank you. Just to follow-up on that last question. I mean, on the markets in Europe, where you have a lower share of solutions and and the, and electronics security, are totally lost question there. Sorry. I'm so happy. It's well established for you now. Hey, we're out of time. No. We really, we'll lose the answers also, or we lose your question? No, it's hard to see you. So that's not happening. Let me give you an answer. I'm I'm not sure it's what you're asking for. Here. Here. Okay. So you alluded to that it was external factors in some markets that, you know, the market maturity And that therefore, I mean, is it then even possible for you to get the ratio up? If it's external factors and the market maturity being low, you're vick demand or the market circumstances? It takes more time. It takes more time. It takes more dedication, more effort for sure, but you have seen Spain Spain is really the best case was just falling, down very fast. And we have seen the results also that. Those company has gone bankrupt. We know that. In that case, we said, who, something is happening here? We will invest, and we actually acquired at that point in time a company which was tough because everyone said you're crazy. Spain is going down the drain, while Spain has not gone down the drain and Spain will never go down the drain. As a very good country, but it was difficult at that point in time. And then when it's a crisis, as George said, then you have to be really persistent and make decisions. This is what we have Then we invested, we changed the company and you have seen the slide by yourself how the margin has developed. So but it's a tough one. It's a tough one and you need to have And then at that point in time, we will also say Spain got the attention from the whole leadership and we really wanted to support also Spain from that perspective. And they made a turnaround. So I should really say congratulations to the Spanish colleagues. Yes. It's true that sometimes if you have external factors can help us to, accelerate the solutions penetration. For instance, if I talk about LatAm, the labor costs are too low yet. So the client is not so receptive to than cost efficiency and the value proposition solutions. But as Bart has said, we have some examples it seemed that was impossible, but close to the clients because if you look at or to the client perspective, the solution is a cost efficient for him. And this a fairly proposition. So if you are able to explain that and be close to the clients, it's possible to do it. Was what we did in Spain and of course it's possible to do it in other countries. But for sure that normally we have external factors that can help us to accelerate it and the implementation of the solutions. I can also say from Europe, I mean, our view is that the market is air. And we see that, of course, we have the benefit from seeing a wide range of different markets. And, I think Bart laid out the many factors here, I mean, that impacting our success, but I would say generally, we're convinced that the growth opportunities there, if we do the right thing. And the value proposition, like George said, that's the most critical And if we've had countries because there's been countries as well where our team has said, no, but in our country, the customers don't want solutions. And then we the customer round table and we sit down around the table together with a number of clients and we share our strategy, we share some of the things we're doing. Then we always ask the question, do you think this is the future? And then everyone says yes. Because it's about the value proposition, it's not only cost containment, but it's also it equation overall. That really makes a difference. Yes. And I think that will conclude today, actually. Okay. Good. So, Let me then just say a few things to conclude. We are very excited and we have high degree of confidence in our direction. We have a clear strategy. We have clear metrics and we have a team and leaders that are ready to make this happen. So, thanks a lot to all of you for joining us and for being part of the securities journey. Thank you.

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