CONSUMER CYCLICALS: Securitas; 7.25Y FV

(SECUSS; NR/BBB) 

WNG €300m 7.25Y SLB +155a vs. FV +112 (-43)

Generally seen value in triple-B consumer services - in the belly that has been on Rentokil high-cash px lines (may bring supply soon) and more recently on Elis (though heavy France exposed seems to be doing fine). They have posted a strong rally (YTD RTOLN 30s -22bps, ELIS 30s -17 vs. €IG -8, all vs. swap). Net, it may leave Securitas looking like a more reasonable alternative - the 'but' to that is the sector as a whole looks to be priced fair here. Note services co's will generally have no exposure to tariff headlines/updates.

Securitas does €14b in revenue (half/half US/Europe), 2/3 of that in traditional security (patrols etc.), 1/3 in technology and solutions. Latter is growing twice as fast (+6%) and is twice as profitable (EBIT 11%). FY24 saw +4% growth across the group on a 7% EBIT margin (targeting 8% by end of this year). Net debt levered 2.5x (target <3.0x). 1Q results generally come early May.

• no issue with this pricing through Adecco (BBB+).
• Pluxee (BBB+) trades on a heavy regulatory discount (as does Edenred/A-).