Question 1

How are physical security companies shifting from manned guarding to technology-enabled services?

Accepted Answer

The industry is undergoing a fundamental transition from labor-intensive manned guarding to hybrid models that combine physical presence with remote monitoring, analytics, and access control. Securitas generated approximately SEK 107 billion in revenue with roughly 80% from traditional manned guarding through 2020, then grew security solutions and electronic security to approximately 30% of revenue by 2023, reaching SEK 157.2 billion in total revenue. The Brink's Company shifted its revenue mix as well, growing its Armored and Digital & Technology Solutions segments while traditional cash-in-transit shrank as a percentage. Loomis AB expanded from pure cash-in-transit to cash management automation and service bundling. The technology shift matters because technology-enabled services command higher margins — remote monitoring a facility costs far less per hour than stationing a guard.

Question 2

What role does service bundling play in security services profitability?

Accepted Answer

Bundling transforms security from a commodity service into an integrated solution with higher switching costs and better margins. Securitas bundled physical guarding with electronic security, remote monitoring, and risk consulting, growing non-guarding revenue from less than 20% to approximately 30% of total revenue. Loomis AB bundled cash-in-transit with cash management automation, SafePoint devices, and digital payment solutions, reaching record revenue of SEK 30.4 billion in 2024 with EBITA margins of 12.0%. The Brink's Company grew its Armored and Digital/Technology Solutions revenue while maintaining a $5.01 billion revenue base. In each case, bundling raised the average contract value and made it more difficult for clients to switch to a competitor offering only one service component.

Question 3

What are the key margin drivers in cash logistics and security?

Accepted Answer

Route density is the primary operational lever in cash logistics — the more stops per route, the lower the cost per pickup. Loomis AB and Brink's optimize route networks to maximize vehicle utilization and minimize transit time. The transition from manual cash handling to automated solutions (smart safes, cash recyclers, connected vaults) shifts the revenue model from per-trip fees to recurring technology subscription revenue at higher margins. Brink's grew its digital and recurring revenue services to a meaningful share of its $5.01 billion revenue base. For manned guarding, the key margin driver is the spread between what clients pay per hour and the fully loaded cost of the guard (wages, benefits, training, insurance, supervision). Securitas improved this spread by shifting toward higher-value electronic security and solutions consulting.

Question 4

How does the transition from cash to digital payments affect security services companies?

Accepted Answer

The decline of cash transactions threatens traditional cash-in-transit revenue but creates opportunities in cash management automation. Loomis AB responded by expanding from pure CIT into automated cash handling solutions — SafePoint connected safes and cash recyclers that manage cash at the retail point of sale. This shifts revenue from declining per-trip transportation fees to growing per-device recurring technology fees. The Brink's Company pursued a similar strategy, investing in digital and technology solutions to offset secular CIT decline. Both companies achieved record revenues despite the digital payments trend, suggesting that the automation opportunity can more than offset declining cash volumes. The companies that navigate this transition successfully will look more like technology-enabled services firms than traditional logistics operators.

Question 5

What are the biggest acquisition opportunities in security services?

Accepted Answer

The security industry is fragmented across both geographic markets and service types, creating roll-up opportunities similar to facility services. Securitas has been an active acquirer, expanding its electronic security and technology capabilities through targeted acquisitions that complement its global guarding footprint. The highest-value acquisition targets are technology-enabled security companies that bring remote monitoring, AI-powered video analytics, or access control capabilities — these accelerate the shift from low-margin manned guarding to higher-margin technology services. Unlike facility services where tuck-in acquisitions primarily add route density, security acquisitions increasingly target technology capabilities that can be deployed across the acquirer's existing client base.

Security Services

Securitas

Securitas

The Brink's Company

Frequently Asked Questions

Loomis AB