Good afternoon, everyone, and welcome to our Q3 update. We are maintaining a steady focus and executing on our strategy, and this is visible in the financial performance. And in Q3, we're seeing margin improvements in all three business segments. We recorded 8% organic sales growth, and on the services side, the main driver of the growth was price increases and portfolio growth of the aviation business. But we also had good growth in technology and solutions. The operating margin improved to 6.9% versus 6.5% last year, and technology and solutions business line is the main driver of the margin improvements. We are on par in terms of price wage in the first nine months.
I just want to make a comment here that similar to Q2, we have seen some improvement in the labor market with improved availability of qualified people, but the market is still fairly tight. The operating cash flow was 84%, which is below our internal target for the quarter, and generating a strong cash flow in Q4 is an important focus area. But we have driven continued improvement in terms of leverage, with net debt to EBITDA reducing to 3.1% in the quarter. The integration of Stanley is progressing well in terms of the integration process and cost synergies, and we have now realized vast majority of $50 million target, and that has been achieved. But we have also identified materially more to be executed, and we will come back to that in due time.
It is now more than a year ago since we acquired Stanley Security and created Securitas Technology. From a value creation perspective, there is a negative impact related to significantly higher interest rates, but we are driving the integration according to plan, and we are delivering operationally. With our enhanced technology and solutions capabilities, our offering is stronger than ever. From a commercial synergy perspective, we have a good pipeline, and we were just recently awarded a $40 million contract over a number of years, I should say, in North America with an existing guarding client. I think that this is just one proof point of the strength of the Securitas offering that we can now start to see.
It is really another proof point that we're becoming the choice for demanding clients who are looking for a strong partner with number of capabilities between technology and people. We continue to assess all parts of the business to ensure that they are fully aligned with the strategy and our financial objectives. As previously announced, we divested our business in Argentina in July, and this has an immediate positive impact on the margin in Ibero-America in the quarter. We are operating in an uncertain world from an economic as well as a geopolitical perspective. With regards to Israel and Hamas, I would just like to clarify that we have very limited operations in Israel and only in the technology part of our business, but we continue to serve global clients through local partners.
With that, let us then shift the focus to the performance in the business lines. The growth in security services was 7%, and the EBITDA margin improved sequentially from 5.1% in Q2 to 5.4% in Q3. The growth in security services is mainly the result of price increases and volume growth in the aviation segment. The real sales growth in technology and solutions was 7% in the quarter, with a strong 11.5% margin compared to 10.3% in Q2. We have a continued robust order intake and backlog for our installations business. As I previously mentioned, the growth in technology and solutions is the main driver of the group margin improving to 6.9%.
Shifting then to the performance in our three segments, and starting with North America, where we recorded 5% organic sales growth. As of the third quarter, the business unit, Securitas Critical Infrastructure Services, has been moved from the business segment North America to Other. The Critical Infrastructure Services business is fully dedicated to U.S. government business and operated separately. With this change, we are enhancing understanding of performance and comparability between North America, Europe, and Ibero-America is enhanced. Coming back to the growth, price increases in combination with good portfolio new sales drove good growth within security services. Technology business also supported the growth with improved installation, sales, and a healthy backlog. Our technology and solutions business is now representing 36% of the total sales in North America.
I should also highlight that, as expected, we're also improving the client retention rate to 87%. Looking then at the profitability, we recorded a new margin record with 9.2% versus 8.7% in Q3 last year. For clarity, all the figures have been restated to reflect the move of SCIS to the Other category. The technology business was the driver of the improvement, with positive impact from cost synergies, good installations, and healthy development of the recurring revenue portfolio. We are ahead of plan in terms of cost synergies in North America. The guarding business was stable, with positive contribution from active portfolio management and leverage, and also from somewhat improved labor markets, but burdened by medical costs and also higher cost of risk.
Our client offering is now stronger than ever in North America, and the team is leading the way towards our target of 8% as a group by the end of 2025. Shifting then to Europe, where we had another quarter with 13% organic sales growth. High price increases, including the impact from the hyperinflationary environment in Turkey, is an important driver of the growth, but sales growth in solutions, increased installations, and aviation also contributed. Client retention was stable at 91%. Looking at the profitability, where we had continued good improvement, with a 7% operating margin for the first time. The improvement was driven by technology and solutions and active portfolio management. While we are seeing some improvement in the labor market in Europe, it is still challenging.
Continued improvement in sickness rates have benefited profitability, but we still have elevated costs for subcontracting that had a negative impact on the margin. As commented earlier in the year, our European team have a few key focus areas to ensure performance. First is to increase the margin requirements for the new contracts. Second, working actively to convert, renegotiate, or terminate low-margin contracts. Three, to accelerate the Stanley integration. And four, continued cost management. But from my perspective, after a weak start to the year, our European team is on the right track with positive development in Q2 and also in Q3. Moving then to Ibero-America, where we recorded 5% organic sales growth in the quarter, and the growth now decreased due to the divestment of our operations in Argentina. And the organic sales growth in Spain was 3%.
Growth was supported by price increases and strong technology sales, but as in the previous quarter, negatively affected by active portfolio management. Technology and solution sales represented 34% of sales in the quarter. Client retention was solid at 92%. Looking then at the profitability in Ibero-America, where our team delivered a margin of 7%, and the margin uplift was driven by the divestment of Argentina, where we had below-average margins.
But good performance within technology and solutions and in airport security supported the operating margin, as did active portfolio management. And the operating margin improved in the important markets of Spain and Portugal, even though wage pressure in Spain still hampered the results somewhat. So to conclude the division overview, I'm pleased to note that there is progress in all divisions: 7% in Ibero-America, 7% in Europe, and 9.2% in North America. With that, turning over to you, Andreas, for more details regarding the financials.
Thank you, Magnus, and good afternoon, everyone. Starting with the income statement, where we continue to see good 8% organic growth in the third quarter. Comparing to the second quarter, the growth is down from 11%, and that is mainly due to the divestment of our business in Argentina. Our operating margin increased 0.4 percentage points to 6.9 percentage points, where the main driver is strong growth and margin development in our technology and solutions business. Looking below operating results, the amortization of acquisition-related intangibles was SEK 157 million in the third quarter, stabilizing over the last quarters after the Stanley acquisition, and the difference to last year is due to that we consolidated Stanley in the middle of the third quarter, 2022.
Items Affecting Comparability is SEK -3.7 billion, and here the majority, SEK 3.3 billion, is related to the divestment of Argentina. SEK 181 million is related to the Stanley acquisition, and SEK 171 million is related to the ongoing European and Ibero-America transformation program. And as usual, I will come back with more details here shortly. The financial net is coming in at SEK 518 million, which is materially higher than last year, and where the main reason are increased interest rates and increased debt related to the Stanley acquisition. We had around SEK 320 million higher interest costs related to the Stanley acquisition financing compared to last year, explained by increased interest rates and also the fact that we in 2022 did not have the full quarterly effect, as we closed the transaction the 22nd of July.
The IAS 29 hyperinflation effect was SEK 75 million more positive in Q3 this year, and we also had SEK 60 million higher FX gains when comparing to last year. The remaining increase of approximately SEK 70 million is related to increased interest costs related to our legacy pre-Stanley debt. For the full year, we remain with the expectation of the financial net to land slightly above SEK 2 billion. Going to tax, here, the Argentina divestment has a material impact as the capital loss is not tax deductible. Adjusted for this, the full year forecasted tax rate remains unchanged compared to the second quarter at 26.8%. Looking at the Q3 net income, you see that the result is negative SEK -2 billion, which is then again, mainly due to the SEK 3.3 billion capital loss recognized related to Argentina.
Before moving on, I want to remind everyone again that the number of shares used for calculating earnings per share are adjusted for the bonus element of the rights issue in line with IAS 33, and you find more information here on page 20 in the report. Then, we have a look at the change to the reported segments in the third quarter. Here we moved the business unit Securitas Critical Infrastructure Services from the reported segment North America to Other, where our business in AMEA, Africa, Middle East, and Asia, and the group costs are also reported. All comparatives have been restated in the report, and we have also provided further details around the SCIS financials and impact on our homepage.
And to be clear, this has no impact on the overall group financials, but as you can see, it has an impact on the segment North America and Other. SCIS represented approximately SEK 2.5 billion of sales in the third quarter and had an operating result of SEK 22 million. And as you can see in the table, the North America segment has an operating margin of 9.2% in Q3 in the new reporting structure, compared to 8.1% in the previous structure. When then looking at Other in the third quarter, we had an operating result of SEK -152 million in Q3 and SEK -170 million last year, where the development mainly is explained by SCIS, partly offset by good group cost control.
Then we have a more detailed look into our IAC programs, where the two remaining ongoing programs are the European and Ibero-America Transformation Program and the program related to the Stanley acquisition. And in the quarter, we also have material IAC impact from the Argentina divestment. Looking first at the European and Ibero-America Transformation Program, where we are continuing to execute on our implementation plans. Here, we had SEK 478 million of spend year to date. The full year IAC estimate of SEK 650 million-SEK 700 million and SEK 150 million in 2024 are unchanged compared to our previous estimate, and the same applies to capital expenditures.
This also means that the total program spend over all years are within the originally estimated budget, as we highlighted further in the second quarter, although some of the spend goes into 2024. Moving on to the IAC related to the Stanley transaction, and here we announced total cost of approximately $135 million after the acquisition. The integration and synergy takeout continues to progress well, but as we have mentioned before, we are also going through a period of heavy lifts in the carve out from Stanley, mainly on the IT and support services side, which will continue over the coming quarters.
As we had longer time than expected between signing and closing of the Stanley transaction, and we also saw weaker Stanley results in the first half year of 2022, we have accelerated the synergy takeout and have today executed the vast majority of the $50 million US dollar cost synergy target set. We continue to have additional material synergy opportunity in the plan, which will support our margin development going forward. However, we will also see some operational cost increases related to taking support services and systems in-house after the carve-out, which to some extent, will mitigate the cost synergy effects. In the first nine months, we had 466 million of cost here, and we estimate to land between SEK 600 million and SEK 650 million for the full year.
The program then finalizes throughout 2024, where you will see the residual budget of maximum SEK 400 million being recognized. So looking then at the total IAC for the two programs, we are estimating to land between SEK 1.25 billion-SEK 1.35 billion for the full year 2023, with a material decline next year when we are planning for a combined IAC of around SEK 550 million. Looking then at the Argentina divestment, where we, in Q2, provided you with an estimated capital loss from the divestment of approximately SEK 3.5 billion. The final amount has now been concluded and is SEK 3.3 billion, where the vast majority of the impact is related to accumulated non-cash FX translation losses.
The total cash flow impact from the transaction is SEK -122 million, and as I mentioned earlier, the capital loss is non-tax deductible. Concluding here, positive that we have managed to close this divestment as this is improving our margins and our cash flow generation, and we are also reducing complexity in our operations given the difficult business environment in Argentina. Moving then to an overview of the FX impact on the income statement, and here we had continued positive impacts from currencies, although much less than in the second quarter, mainly as the comparable US dollar rate increased significantly, especially towards the end of the quarter. The total FX impact on sales and operating result was 3% in the third quarter, with larger positive impact year to date.
The EPS real change, excluding items affecting comparability, was -25%, with negative impact from the adjusted number of shares by IAS 33 from the rights issue. On a constant share basis the real change excluding items affecting comparability was -2%. This is derived from the real change on operating income being 16%, positively impacted by the Stanley acquisition, good organic growth and margin development, while mainly the increase in the financial net impacted negatively, leading them to the -2%. We then move to cash flow, which is a prioritized area for us across the business to ensure we continue to deleverage our balance sheet after the Stanley acquisition. The third quarter is coming in at SEK 2.3 billion operating cash flow, or 84% of the operating result, which is SEK 0.5 billion less than in 2022.
We saw broad-based, strong cash flows in most business units, but we had some negative impact from ERP implementations and integrations under the European transformation and the Stanley integration programs, where this had an impact on our invoicing and collections. This, together with higher organic growth, were the main reasons to the negative impact on the accounts receivable in the quarter. Our ambition is to improve the situation in the fourth quarter and also deliver a solid cash flow. The areas with negative impact are well-defined, with action plans in place to address them in the fourth quarter. Within the European transformation program, we expect to catch up on collections by the end of the year, and within the Stanley integration program, we expect to see good recovery in the fourth quarter and the coming quarters as well.
As I mentioned earlier, we are now going through a period of heavy lifts in our programs, which will continue the coming quarters. If we look at CapEx, we spent SEK 1.1 billion or 2.7% of sales, which is at the same level as in Q3 last year, mainly driven by our solutions and transformation program investments. And looking at the full year, we expect to land below 3% of sales, and this includes then also IFRS 16. On the operating capital employed side, there is no major movement in the quarter, and we had no significant payroll timing differences neither.
Looking at the free cash flow, which was SEK 1.5 billion in the third quarter, here we had negative impact from financial items due to the increased net debt and due to the increased interest rates when we compare to last year. Q1 and Q3 this year is when we are making the large payments related to our debt, and we also paid fees for the newly issued bond. Paid tax developed positively, SEK 66 million compared to last year, and is mainly related to receive tax refunds in our treasury operations. We continue with high cash flow focus across the organization to deliver a strong year, end of the year. Important to remember for Q4, that with this year, have no further payments related to Corona government relief measures in North America, which hampered Q4 2022 operating cash flow with SEK 700 million.
We then have a look at our net debt, which has increased approximately SEK 2 billion since the beginning of the year. The positive free cash flow of SEK 1.4 billion impacted positively, but we have seen a material negative FX impact on minus SEK 1.8 billion. We have paid the first part of our dividend of SEK 1 billion and had approximately SEK 1 billion in IAC spend. The acquisition-related spend is mainly related to Argentina, and I should mention that we had a SEK 260 million positive adjustment to our IFRS 16 lease liability related to Stanley, as we now concluded our bottom-up valuation of these assets. Looking at Q3 alone, we reduced our net debt with SEK 1.2 billion, mainly due to the positive free cash flow of SEK 1.5 billion.
The reported net debt to EBITDA was materially impacted by the Argentina divestment in the third quarter. However, when looking at the more relevant adjusted net debt to EBITDA before items affecting comparability, we landed at 3.1x, which is 0.2x lower compared to the second quarter. So solid deleveraging, driven mainly by the positive free cash flow and EBITDA development. Looking into the fourth quarter, we expect to see free cash flow support in the deleveraging, but also remember that we will pay the second part of our dividend in November. Moving on to have a look at our financing and financial position, and here we continue to have a solid financial position overall. None of our facilities have any financial covenants, and the liquidity position was strong in the quarter at SEK 5.2 billion.
We also have our RCF of more than EUR 1 billion in place until 2027, and it is fully undrawn as per the quarter end. In the beginning of July, we repaid the final $160 million of the Stanley Bridge to Debt facility, which then means that we have now secured long-term financing, including the rights issue, for the whole purchase price related to Stanley. So here we are in a solid position. Our margins in the debt markets have consistently gone down since October last year, which we have benefited from as we have taken the bridge out. But this has also given us the opportunity to continue to refinance part of our debt at lower cost. And this was the main reason why we, in the third quarter, issued a 5.5-year, EUR 600 million bond in the Euro market.
We mainly use these proceeds to repay approximately half of the EUR 1.1 billion euro term loan we have in place since the beginning of the year. We will continue to work on further pricing improvements in our debt portfolio in the coming quarters, which is reducing the negative impact from increased interest rates. Looking into 2024, we have approximately EUR 9 billion of maturities. Slightly less than 2/3 has floating interest rates, and the remaining part have fixed interest rates. From a timing perspective, around EUR 5.5 billion of the EUR 9 billion are maturing in the first quarter, and the remaining part is maturing during the second half of the year. I should say the majority of the fixed debt are maturing in the first quarter. All else equal, we will, we will see increased interest costs from the refinancing next year.
However, we will also generate cash flows, which will reduce debt and see positive impact from the refinancing at lower margins, which will partly offset the increase. All in all, we see a slight increase of the financial net into 2024, and we will come back with further guidance here the coming quarters. Related to our S&P rating, it was positive to see that they revised their outlook to BBB- with positive outlook. Here, we previously had a stable outlook. We continue in an unchanged way to be committed to our investment grade rating and to continue our deleveraging of our balance sheet. With that, I hand over back to you, Magnus.
Many thanks, Andreas. So, just a few messages before we open up to Q&A. And as we stated here, we continue to execute on the strategy, clear focus and progress towards our financial targets, and importantly, the 8% operating margin by the end of 2025. But it is also a period of extensive work, but we maintain focus on four key areas: taking the lead with technology, building quality guarding services with good profitability, establishing clear leadership as a solutions partner to our clients, and leveraging technology and digital to drive innovation. And we continue to execute in these areas to make sure that we deliver superior growth and higher margins over time. And the client feedback regarding the transformation, our differentiated offering is very positive.
And as commented, we are starting to realize commercial synergies, thanks to the Stanley acquisition and the enhanced strength in our offering. And we are very much looking forward to welcoming you and to talk more about these important matters, in our investor update in March. And this will take place on the 7th March at our headquarters, in Stockholm, in Sweden.
But to wrap this up then, a few highlights of the quarter: steady execution of the strategy is yielding results and operating margin improvement to 6.9%. Technology and solutions is the strong contributor to the improved profitability. We have price and wage balance that is on par, recording 84% operating cash flow, and the Stanley integration, which is critical to building the, future Securitas, is progressing well, with strong cost synergy realization and some early commercial wins. With that, hand over to the operator, and glad to open up the Q&A.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Johan Eliason from Kepler Cheuvreux. Please go ahead.
Yeah, hello, thanks for taking my questions. This is Johan at Kepler Cheuvreux. I was just curious about this move in the North American business. Seems to be a pretty low-margin business. What's the reasoning behind this? Is this part of the portfolio pruning, and then we could expect it to be divested eventually, or what's your ambition? Thank you.
Yeah, so, the main reasons, I mean, that we are making this change is that this is a different type of business in the sense that it's operated separately. It's a different nature of the business. By doing this separation, Johan, we feel that we are enhancing understanding of performance in the three segments. We're also ensuring that we have better comparability as well, because the nature of the business that we are bringing and delivering in the three segments is also more similar. But having said that, I mean, we never make any comments in terms of any individual business. But when you look at the performance here, it has been lower, it is lower than the average performance of our business, but it is a change in the segment reporting.
And, I mean, the performance is lower, as you point out, but are there any other benefits with keeping this business? Are the payment terms good, or why would you sort of think that this is still something that would be part of Securitas going forward?
Yeah, like, like I said, I mean, we, we never make specific comments. The, the general comment that I have made on a number of occasions is that we are continuously assessing all parts of the business to make sure that they are in line with the strategy and that they're also supporting us on the journey to 8%. But that's a general comment and not a specific comment related to this part of the business.
Okay. Thank you very much.
The next question comes from Raymond Ke from Nordea. Please go ahead.
Hi, this is Raymond from Nordea. A couple of questions from me. First one, you write in the report that DSO has increased due to integration work with Stanley. But do you see, for example, DSO extending in the underlying operations in any of your service categories, such as solutions or technology, due to the nature of the type of customers you deal with there?
Thanks a lot, Raymond. Generally speaking, the DSO development is mainly due to the system integration that we have mentioned in the report. Underlying, you see a slight increase as well, but nothing major in on the DSO side. Now, if you go to the, if you speak technology, generally speaking, the working capital requirement in that business is higher than in the guarding business, as we have mentioned several times before as well. And that is mainly related to that this is a project-based business where you are invoicing as you're progressing in the projects rather than on a monthly basis. So technology as a whole, I think we said around 20% of sales when it comes to working capital requirement, and it is higher than on the guarding side. Yes.
All right. And, speaking of that, you talked, for example, about the installation side of Stanley having a higher, higher working capital at around 20%, and you're trying to lower it by invoicing after milestones rather than at the end of projects. Where, where do you see the working capital in relation to sales stabilizing over time, and when, when should we expect this to become visible in the P&L and the cash flow side?
I think you should expect that the technology business will have a higher working capital requirement than the guarding business. They will not come down to the guarding levels. Then we have opportunities on the working capital side in the technology business, where we see fairly if you look across the Securitas business, you see some really good business units that have a lower working capital, where they manage them to invoice the clients more frequently than in other places. So definitely there is benefit to improve. It will not become a guarding business in working capital. Having that said, right now, we are going through then a heavy integration period, so now it's more focused on making sure that we have efficient, solid, and well-running processes in place, and thereafter, we will look into how we can further improve the working capital.
Your net profit this year was lowered by the non-cash flow impacting sale of Securitas Argentina. Should we view your dividend policy of 40%-60% as being based on this reported net profit, which would be lower this year, rather than an adjusted net profit? How should we think about that dividend?
That's a decision for the board of directors to take at a later stage.
All right, final one. In the Q2 call, you said you expected the full year 2023 tax rate to be the same as it had in the first half. That's 26.8%, and you saw probably that consensus was pricing in a positive tax impact in the quarter here. Just wondering, why would you not go out to make a simple clarification, considering the cash flow implications there?
Well, just to be clear, around the Argentina divestment, the capital loss is non-tax deductible, and that is why then all our tax rates are going up. So that's just to be very clear, there is no tax benefits from divesting Argentina. And then over... Generally speaking, from the SEK -122 million cash flow from the transaction is not related in any way to tax neither. So I hope that clarifies.
Yeah, all right. Thanks a lot. Have a good one. Bye.
The next question comes from Viktor Lindeberg from Carnegie. Please go ahead.
Thank you. A couple of questions from my side. Starting on the cash flow and working capital being a bit higher than I expected. One reason may be that looking at the calendar effect in the sense that you closed the quarter the 30th of September on a weekend. Could you maybe provide some thoughts on the impact in this quarter? And maybe also Q4 seems to be ending on a weekend if that is something we should be mindful of, one decimal is more than sufficient on that.
Second, looking at the underlying financial net here in Q3, it seems to be hovering about SEK 700 million if we adjust for hyperinflation and also the hedge effects. In the very near term, is that a decent proxy to be mindful of? You mentioned that you reiterate about SEK 2 billion or slightly above, but looking into Q4, SEK 700 million seems to be slightly more than slightly two billion. Starting off on those two. Thanks.
Yeah, I think, if you go to the first question, when it comes to calendar dates, you're right that the third quarter ended on a weekend. This is something that we are fairly used to also handling, so we have good focus and the competence, I would say, from the organization to ensure when we have those kind of quarters or months, and that we are also adjusting when our collection, sorry, our invoicing is going out. So we get the invoicing out earlier to make sure that the due dates are then not going into the weekends. So, this we have managed well.
This did not have any material impact in the quarter as such, but it is a factor, but something that we are fairly good at handling and might have had a small impact in the quarter, but nothing material. On the second question there related to the financial net, I think we will, we've said we will be coming in slightly above SEK 2 billion, and I think I will remain with that statement there. There are many moving pieces there as well, so it will be a bit more than SEK 2 billion financial net for the full year. That's what you should expect in totality for the financial net, including the ones that you mentioned, the FX gains and IAS 29 as well.
Okay. All right. That's, that's clear. You also touched upon the items affecting comparability, and provided the good outlook for 2024. But you also mentioned that you are now running according to plan or even find more opportunity to take out costs in relation to the standard integration here. So should I read this correctly, that when you find this opportunity to take out costs, that will also come with an associated incremental IAC sometime next year? Or is that something that is purely operational, that we will not really see?
No, correct, Viktor. The IAC that we went through here related to Stanley, that remains, and that includes the further takeout. Here, we generally speaking, we have also had lower cost in certain areas of the integration program, and we will use that to execute on these synergies. So no further expected IAC from the Stanley program.
Okay. Understood. Thank you.
As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. The next question comes from Allen Wells from Jefferies. Please go ahead.
Hey, good afternoon, gentlemen. Just a couple from me, please. I just noticed the real sales growth in the technology business has kind of been weakening. If we include Stanley as a pro forma, it's gone from 13 to 12 to seven. It isn't actually outgrowing the main guard business in the quarter. Is there anything we need to be thinking about in terms of exactly what's driving that slowdown? That's my first question.
And secondly, just on the over SEK 2 billion of interest number you talked about for the full year, can you just tell us what the magnitude of the FX and hyperinflation benefits are that you're assuming in that guidance? Just so we can get a feel for what the underlying is. And then my third question is just I think in the comments in the report, you talk about negative growth in the Pinkerton business. Just want to understand why that business is going backwards as well, please. Thank you very much.
Thanks, Allen. So, when you look at the real sales growth on the technology side, yes, it is a little bit lower in the third quarter, comparing sequentially to Q2. That is correct. But when you look at the total picture, I mean, we have a strong backlog with a positive development when you're looking sequentially, healthy order intake. And also then when you're looking at this period as well, it's also now. I've also commented on that in the CEO comments as well. It's also a period of quite intensive integration work. If you're looking at North America, we have now done most of the integration work in terms of the operational system.
So, when we look at CRM, for example, and operational systems in terms of installation, sales, service, and maintenance management, and things like that. A lot of that is now behind us, which also then means that we're also able to engage with stronger focus as well, commercially. Commercially, we haven't dialed up, and that's something that I said from the beginning as well.
We need to make sure that we drive all the integration work in a good way, and then we will gradually also start to increase the emphasis in terms of realizing commercial synergies and growth, when we know that we have a machine that is really solid and operationally running. So, that is just to give some context in terms of the technology growth when you're looking at that one. You also had a question, the third one, if I can take that right away. Can you just repeat that, Allen?
So the third one was just on Pinkerton, just exactly what's behind the negative sales growth there.
So there we've essentially done some de-risking because of commercial insurance environment in the U.S. And it's not a new issue. I commented on that over the last year. But it's also then to be more selective in terms of the assignment, so that we have a healthy return on investment, but also risk exposure in terms of the assignments that we are taking on. But there, my expectation is that we're gonna have a positive recovery and turnaround there in terms of growth in the next couple of quarters.
On the financial net is a similar question to before here as well. I mean, the guidance is slightly above SEK 2 billion. We are not, we are not making any major assumptions around IAS 29 development, generally speaking, I can say, right? So but, we will stick with the slightly more than SEK 2 billion for the full year here as a guidance.
Okay. Thank you.
The next question comes from Neil C. Tyler, from Redburn Atlantic. Please go ahead.
Good afternoon. Thank you. Two questions, please. Firstly, the aviation business in Europe, you mentioned that's performed very well. Can you help us understand to what extent that, seasonality, might impact, the- ... that business, depending on sort of volume activity, have you completed the process of renegotiating and pruning any contracts across the European business there? And if you have or haven't, how does the size and profitability now compare to, say, 2019? That's the first question. Lots of parts to it. Second one's probably simpler. Yeah, the slide on items affecting comparability is very helpful as a reminder, but can you help us understand where you are in terms of the phasing of the cash payments? Not necessarily the CapEx that you've called out, but the sort of OpEx cash payments that are relevant to those, please. Thank you.
Thank you. So when you look at aviation, yes, it's correct. Q3 is from a seasonality perspective a stronger quarter. When looking from a profitability perspective, not helping in Europe in Q3. Why is that? Well, because we have a quite significant impact in that space related to subcontracting. And part of that is still ongoing challenge to find quality people to the extent that we need for some of the larger contracts that we won towards the end of last year. So that I think is, you know, the basic perspective in terms of Q3 alone.
We have worked through the majority of the portfolio. Performance today is significantly higher compared to what it was before the pandemic. So on the totality, it's a decent business when you look at the full picture. In terms of percentage of sales, I think it's in the 5%-6%. How much do we have? Around 7% now. Yeah, because we've added some on the top line with the acquisitions. Around 7% of the total business on a global level.
Related to the cash flow from the different programs, here you find also more information in Note seven as well. If you're looking at the Stanley Security, we have cash flow so far this year, SEK 565 million, and then a little bit less than SEK 200 million last year. Transformation programs, European and Iberia transformation program, SEK 463 million cash flow so far this year, SEK 576 million last year. I should say that the absolute vast majority of the costs we're taking is cash flow.
And then, of course, there can always be some timing impacts, more generally speaking, on when we as we have payment terms in place, but it should be fairly... They should follow each other fairly, in a fairly good way. Then obviously CapEx, the CapEx amount you have there as well, which is then fully of cash flow as well. So I hope that gives you some flavor, not on the exact timing, maybe, but you have more information in Note 7 as well.
Okay. Thank you very much.
There are no more questions at this time, so I hand the conference back to the President and CEO, Magnus Ahlqvist, for any closing comments.
Thanks a lot, everyone, for your continued interest, for joining us. We are making further progress in the third quarter, so looking forward to seeing you soon. And also just to promote as well, the Investor Day, when we will share a lot more as well, at the beginning of March. Really hoping to see you or many of you here in Stockholm. So thanks a lot, everyone.