G4S Security Services A/S

Ledelsesberetning

Financial highlights mDKK. 2023 2022 2021 2020 2019 Profit/Loss Revenue 1.451,4 1.350,6 1.259,1 1.282,1 1.279,6 Operating profit before interest and tax 66,4 59,6 46,1 51,3 47,3 Net finance expense (5,9) (2,9) (1,3) (1,7) (1,3) Tax on profit for the year (12,1) (11,2) (6,1) (10,8) (10,1) Profit for the year 48,4 45,5 38,7 38,8 35,9 Balance Sheet Non-current assets 412,6 357,5 308,7 285,8 266,1 Current assets 368,6 323,3 269,0 304,8 289,0 Total assets 781,2 680,8 577,7 590,6 555,1 Equity 213,0 204,6 196,8 196,1 192,3 Non-current liabilities 144,0 140,2 128,5 120,3 65,3 Current liabilities 424,2 336,0 252,4 274,2 297,5 Cash Flow Net cash flow from operating activities 79,2 100,2 64,1 214,1 140,6 Net cash flow generated by investing activities (122,9) (121,3) (100,1) (87,0) (85,5) Of this investment in tangible assets constitutes (104,7) (100,8) (93,1) (80,1) (78,4) Net cash flow from financing activities 32,9 29,1 (18,8) (68,9) (56,2) Net increase/(decrease) in cash (10,8) 8,0 (54,8) 58,2 (1,1) Financial ratios in % Operating margin 4,6% 4,4% 6,7% 4,0% 3,7% Current ratio 86,9% 96,2% 106,6% 107,1% 97,1% Solvency ratio 27,3% 30,1% 34,1% 33,2% 34,6% Return on equity 23,2% 22,9% 19,9% 20,0% 18,7% Average number of employees Average number of full-time employees 1.364 1.267 1.251 1.307 1.342 Average number of part-time employees 514 515 508 480 480 Financial highlights Gender composition of the management Higest governing body Total number of members (excl. members elected by the employees) 4 - - - - Underrepresented gender in % 25 - - - - Target number in % - - - - - Year for meeting targets - - - - - Other management levels Total number of members 8 - - - - Underrepresented gender in % 12,5% - - - - Target number in % 40,0% - - - - Year for meeting targets 2029 - - - - The qualitative information regarding the the gender composition of the management appears subsequently under a separate heading in Management's review. The financial ratios have been calculated as follows: Operating margin: Operating profit x 100 Revenue Current ratio: Current assets x 100 Current liabilities other than provisions Solvency ratio: Equity at year end x 100 Total equity and liabilities at year end Return on equity: Profit from ordinary activities after tax x 100 Average equity Operating review The Company's activities G4S Security Services A/S is Denmark's largest security company with a broad range of services making G4S total supplier of security to both companies, shops, private homes and not least the public sector. The Company is part of the Allied Universal Group, which is one of the largest global providers of security services, security systems and protection of assets. The Group operates in more than 85 countries across six continents and provide employment to over 800,000 people. Technological developments have created new surveillance opportunities. Also, customer security demands have changed significantly during the recent years. G4S Security Services A/S therefore offers a broad range of security services as illustrated below: The majority of security services are integrated with G4S's own Security Operation Center, manned 24 hours a day, 7 days of the week. Here, all events are monitored and processed. Operating review Development in activities and financial position Profit/loss for the year Revenue for the year amounts to DKK 1,451.4 million against DKK 1,350.6 million last year, corresponding to an increase of 7.5%. Profit for the year after tax amounts to DKK 48.4 million against DKK 45.5 million last year. The development must be compared with the fact that the company in the annual report for 2022 expected revenue for 2023 at the same level as in 2022 and that the result for 2023 would be improved by DKK 2-3 million in compared to the result for 2022. The management considers the year's result to be satisfactory. The increase in the year's turnover and the year's result compared to the forecast can mainly be related to increased demand for manned security services. Capital resources The solvency ratio amounted to 27.3% (2022: 30.1%), corresponding to an equity of DKK 213.0 million at 31 December 2023 (2022: DKK 204.6 million). Quality management system G4S is certified by the accredited certification organization Intertek DIC A/S according to the requirements of ISO 9001: 2015 which includes company certifications within supplier consulting (LR), TV surveillance (TVO), access control (ADK), insurance-required burglar alarm (AIA) and locks (mechanical security), fire protection (ABA and AVA) as well as guard and bodyguard. Furthermore, G4S 'ISO certification also covers KLS, which is the statutory quality management system in the field of electricity, dictated by the Danish Safety Technology Authority. Outlook The company expects in 2024 revenue at the same level as in 2023, where the revenue was DKK 1,451.4 million. As a result of the structural changes and adjustments which will be implemented in 2024, the company expects that the profit for 2024 will be improved by DKK 2-3 million compared to 2023, where the profit amounted to DKK 48.4 million. The management of the company follows developments in the war in Ukraine closely, as this has affected a major supplier of certain products. For security reasons, the supplier has been forced to relocate their supply chain to the western part of Ukraine as well as Poland, and the delivery of these products have therefore been maintained. Special risks General risks The Company's most significant operating risk relates to the ability to be strongly positioned in the Danish market. Moreover, it is important for the Company to always keep on top of technological developments in respect of security solutions. Financial risks Due to its high equity ratio, the Company's exposure to changes to the interest rate level is limited. Currency risks The company's operations are primarily in DKK, and consequently only to a limited extent linked to operating currency risks. Credit risks The Company has no significant risks relating to a single customer or a single business partner. Intellectual capital G4S's intellectual capital is vital to the continued operations and development of the Company. The Company's goal is to provide products and services of high quality that meet customer expectations. This is based on efficient and tested processes and the efforts of qualified staff. Therefore, efforts are continuously made to optimize processes and workflows, as well as the staffs qualifications continuously are assessed and developed. G4S has focused on attracting, recruiting and retaining the right employees. Structured recruitment processes with the use of appropriate testing tools helps to ensure that G4S recruit new competent employees. G4S’ technical training ensures that the installation and service electricians have the relevant knowledge within existing and new products enabling them to handle their jobs competently. G4S Training Centre regularly provides new skills to guards in G4S, so they can act according to the requirements of the industry and the customers. In 2023, training has thus been carried out in e.g. violence prevention, conflict resolution and development as well as customer service with a view to strengthening skills in these areas. Through the Sales Academy and G4S Academy, the sales force is continuously provided with competence development. Operating review Development activities In 2023, as well as in prior years, the Company's development projects were aimed at complicated security solutions. The projects are aimed at developing integration and interface between the systems and at streamlining and standardizing the most complicated systems in order to reduce customization of solutions for the individual customer. The development projects were only to a limited extent carried out together with suppliers of security solutions. Development costs in 2023 amounts to DKK 5.7 million.