SECURITY INDUSTRY OVERVIEW

Transcription

1 SECURITY INDUSTRY OVERVIEW December 2015

2 Security Service Definition Security is the degree of resistance to, or protection from, harm. It applies to any vulnerable and valuable asset, such as a person, dwelling, community, nation, or organization Major Security Services in Pakistan Guarding (Man Guarding, Esco rt Services, VIP Security etc) Cash in Transit (Cash Transportation, ATM Management etc) Electronic Monitoring (Security Systems, Moni toring & Response etc) Security service providers calculate risks and threats that could be possible and provide counter measures that mitigate the activity before it take place

3 International Industry Key Facts (2014) Market Size $ 175bln Guarding $ 80bln (46%) Cash Services $ 30bln (28%) Electronic Monitoring $ 50bln (17%) YOY Market Growth 7.5% / annum

4 International Industry Key Facts (2014) G4S Securitas AB Secom Founded in 1901, it employs more than 620,000 people with operations in more than 120 countries worldwide third biggest employer in the private sector globally In 2013, G4S turned well over $ 11.3 billion in revenues Founded in 1964, the company has over 300,000 workers spread out over 53 countries Annual revenue of over $8 billion in 2013 Founded in 1964, it employs over 48,000 people in 12 countries, with operations in twelve countries In 2013, its annual turnover was of $7.5 billion from nearly two million customers Source: Companies websites, and Wikipedia Brinks ADT (USA) Founded in 1859, it employs over 70,000 employees in 100 countries Turn around well over $3.4 billion Founded in 1874, providing it services in 35 countries with employees over In 2014, its revenues were of $3.2 billion.

5 Security Industry in Pakistan Key Facts Fragmented industry, with over 400 companies; 210 registered with APSAA Market Size ~ 22bln Manned guarding, labor intensive business, low margins due to tough competition on pricing from smaller players, who compromise on quality Imposition of minimum tax to impact margins further, small players more likely to suffer Guarding Cash Services ~ 18bln ~ 4bln Switch to technology based solutions, a threat to industry. Large integrated players may benefit by strengthening technological framework Weak security situation and influx of foreign investment may spur growth for industry Industry Employees ~ 125,000 CIT Vehicles 1,450

6 Major Players in Pakistan A Snapshot Pathfinder Group (WPPL/SMS) Largest Guard services provider; Competitors in Cash services Phoenix Guarding Services Main competitor in Cash services; largest fleet of CIT vehicles in Pakistan Askari Guards Emerging key competitor in Cash services Security 2000 Affiliated with Securitas USA; 90% of the company's manpower is former Military Mustang Group (Mustang Security/Mustang Eye) Mainly providing manned guarding and technology solutions Zims Security (Pvt.) Limited Mainly providing manned guarding and technology solutions

7 Industry Snapshot 3,500 3,500 3,500 Revenue-FY14 (PKR-mln) 3,000 2,500 2,000 1,500 1,000 1, Phoenix WPPL Askari Security 2000 Mustang ZIMs

8 Industry Snapshot Market Players Share in Manned Guarding Industry Employees WPPL 10% 10% Phoenix Armour 5% 8% Security2000 3% 6% Mustang 3% 5% ZIMs 2% 4% Askari 0% 2% Others 77% 63%

9 Industry Snapshot 100% CIT Market Share 1,000 80% % % % 200 0% Phoenix Askari WPPL/SMS 0 Share Vehicles

10 Conclusion Man Guarding Competition due to large number of participants in the market Large players holding 23% market share only Decreasing Margins Cash In Transit Market distributed among the large players Oligopoly Structure Lucrative business due to high margins Expensive armored vehicles causing restrictions for small players Electronic Monitoring Increasing share due to improvement in technology gradual shift towards this segment Room for growth due to untapped market

11 Industry Opportunity & Challenges Segment Growth Opportunities Challenges Manned Security/ Infrastructure Facility Management Cash in Transit Surveillance & Monitoring Law and order situation in Pakistan. People looking towards private security providers for their security needs Infrastructure spending one of the key drivers for sector growth Foreign investment, especially CPEC, to create opportunities Target market corporate cash handling Increasing customer expenditure/retail patterns High Margins Focus on ancillary services, like provision of overnight vault and ATM replenishment Emerging/Growing segment of Pakistan Shift towards electronic surveillance Involvement of guards in robberies, creating negative perceptions Tough competition leading to low margins in guarding services Lack of awareness among general public related to security services Expensive CIT vehicles Limited number of customers Relatively less movement of cash with emergence of e-channels, though unlikely to materialize in short term Expensive technology Limited customers

12 Analysts Nayab Shafique Financial Analyst Adnan Dilawar Unit Head Analytics Contact Number: DISCLAIMER PACRA has used due care in preparation of this document. Our information has been obtained from sources we consider to be reliable but its accuracy or completeness is not guaranteed. The information in this document may be copied or otherwise reproduced, in whole or in part, provided the source is duly acknowledged. The presentation should not be relied upon as professional advice.