You can also listen to the interview in audio version.
Commercial security also faced a critical shortage of chips during the pandemic.
Securitas customers should expect to wait for deliveries, usually two months, in some cases three quarters of a year.
On the other hand, the failure of the Ukrainian or Russian market will not affect the company in any way, SZ’s business agenda said in the diary. “We perceive these two markets as unstable, there were also legislative obstacles, for example in Russia, foreign companies have not been allowed to join security agencies for some time, and in general the corrupt environment in these countries is not fully in line with our company policy,” Pavel Adamovský from Securitas openly explains why they do not do business in both countries.
According to him, threats to the security of Czech critical infrastructure have not increased. But where they have a job is the security of places or means of transport with a large number of people, such as bank branches of national banks, where refugees open a new account. They also accompanied trains that took people fleeing the war to the Polish-Ukrainian border.
And the biggest threat? Currently, these are cybersecurity risks, Pavel Adamovský is convinced of this.
Has the demand for building protection increased now?
I don’t think the conflict in Ukraine has led to increased security risks for facilities in the Czech Republic, so we’re not seeing an increase in demand yet.
What about critical infrastructure? Are the security and protection measures for these devices still the same?
The critical infrastructure is, in my opinion, very well secured, and until the security risks change, there is no reason to change anything in security.
What does it all belong to there? Type stations, hospitals, aqueducts?
Under the term critical infrastructure, we find everything that is necessary for the functioning of the State. This means that there is energy, there is a financial sector, transport, of course there are health services.
At the bank branch, there is suddenly a greater demand for opening accounts, for example from Ukrainian refugees, and therefore there may be a greater demand for branch security.
What do you think should happen to get your customers, the ones ordering these services, to insist on stronger protection?
I will elaborate further. Of course, we perceive an increased demand, but it is not necessarily dependent on increased security risks, rather it is generated by operational issues. I will give an example: suddenly there is a greater demand for the bank branch to open accounts, for example from Ukrainian refugees, and therefore there may be a greater demand for the security of the branch, etc
This is the case in almost all the bank branches in the towns where the refugees are staying. So you had to react by adding people, by adding teams?
We can definitely add physical security to the building, but so far I don’t really see the demand as critical.
CEO of Securitas ČR.
It is the largest security agency in the Czech Republic. It provides, among others, physical security services, mobile services and surveillance and electronic security.
It is owned by the Swedish company Securitas AB, which has a total of 355,000 employees in 47 countries. It has six branches in the Czech Republic and employs over 1,400 people.
In 2021, it achieved a turnover of CZK 1.483 billion and an operating profit of CZK 45 million.
What other effects of the war in Ukraine?
We perceive risks in terms of cybersecurity, we perceive this as the most common threat today. I don’t see any restrictions on the supply of security systems, because neither Russia nor Ukraine have been major exporters of these technologies.
And did you operate in the Ukrainian or Russian market?
We did not operate in either the Russian market or the Ukrainian market, which of course is easier for us, because we do not have to withdraw from these countries.
What was that? Securitas as a group has over 350,000 employees, operating in 47 countries. Why aren’t Russia or Ukraine there?
In the past there have been attempts to enter these markets, but as a Swedish company we have very high standards in terms of business ethics and compliance (compliance with the rules, note red.), so we perceive these two markets as unstable, secondly, there were legislative obstacles, for example, in Russia foreign companies have not been allowed to enter security agencies for some time, and the corrupt environment in these countries is not fully consistent with our corporate policy.
Do you also employ Ukrainian employees in the Czech Republic?
We employ, but the proportion of Ukrainian employees is very low, because we have certain requirements for security personnel and receptionists, and the problem is language skills. Of course, we are considering providing assistance here in the future, as we perceive that in the medium term horizon, the Ukrainian workforce is also of interest to our sector.
In the context of the wave of refugees, what chances would they have to work in the security sector?
If we overcome the language barrier, I see the use of Ukrainian labor as important and, in the long term, as an advantage.
What could they do? Most of them are women who have fled.
Even in the field of commercial security, there are many positions that can be filled by women, whether it is reception or security work, work in monitoring centers, etc.
Many industries are not only short of people but also of materials or certain goods due to the pandemic. How much does this affect you?
This is a big deal, because commercial security is not only physical security, but of course it is also security technology. And just like in the automotive industry, we need chips here. We have been waiting months for more complex systems.
You mentioned crisps. So what is missing the most now?
Admittedly, these are more complex cameras with intelligent analysis, where chips are essential. For materials, we are again witnessing a rise in prices. But in general, we believe that delivery times have been considerably extended for all suppliers.
It is not uncommon for certain sections to be expected for three quarters of a year.
So how long does it take?
Today, we have an average delay of a project of about two or three months, but it is not uncommon for certain components to be expected at three quarters of a year.
What does this actually mean for security contracts when it takes so long? Can buildings not be commissioned?
Instead, we are looking for alternative ways to secure the building. Whether it is to extend physical security, we also have certain mobile solutions that we can transport from place to place.
Aren’t you afraid that the conflict in Ukraine will aggravate the situation?
I don’t see a direct link there, but of course there is an indirect link, because the conflict in Ukraine will certainly lead to more inflation, which means that the problem will get worse.
How can this be prepared for this?
Even in a situation where it is perceived that there is a large increase in prices, the security budget can still be well managed, but a different problem is necessary to protect the buildings, it is necessary to reconsider the existing security d a certain way.
Do you already have closed financial results for last year, how did they go?
I think they went very well. We ended 2021 with a turnover of just under 1.5 billion crowns and an operating profit of 45 million, which is similar to the previous year. I can say that even this difficult second year of the pandemic did not have a significant impact on our activities.
How do you explain that? Were you able to replace what happened during the pandemic?
I mainly think that the commercial security field is a stable business, even if customers have a difficult economic situation, the security field is not the first to be saved.
How much more expensive has security become, and how much more expensive?
Classic physical security is always linked to an increase in the minimum wage, so for example this year our costs increase by an average of 6%, these are the costs that we have to pass on to our customers. I see a 5-20% increase in technology.
When we last spoke, you said at the end of 2021 that you wanted to be fully digitized. It worked?
Yes, we have made tremendous progress and we see tremendous benefits for us and our customers.
And that means you had to shoot?
Digitization does not necessarily mean layoffs, but rather greater efficiency, elimination of manual labor, paper, not necessarily job cuts.
Your estimate of when the shortage of components will be filled?
For the moment, it is very difficult to predict, on the contrary, I believe that the situation will worsen in the short term.
What is the main objective for this year?
The goal is certainly to grow the business, we will continue to transform the business from physical security to technology, and I believe time will no longer bring surprises. Although we have to reckon with them, and the last two years have strengthened us a lot in this regard.
And what about the entire Securitas group?
The whole company is doing very well, probably the biggest news at the end of last year was the acquisition of Stanley Security, which deals in security technologies. This acquisition was the largest in Securitas’ history and we see it as confirmation that we really take technology seriously.
And the value of this acquisition?
It was over three billion US dollars.