Healthcare reform in the U SA a challen g e In 2012 a six y ear trend of positiv e gro wth in oper atin g income in Securit y Ser vices North America w as brok en due to inte gr ation problems from acquisitions in the feder al g o v ernment ser vices se gment a w eak y ear for P ink erton Corpor ate Risk M ana g ement and lo w er e xtr a sales compared to the pre vious y ear The ma jor challen g e in the U SA in 2013 is handlin g the requirements of the Afor dable Care Act that is the American healthcare reform which enter s into force on Januar y 1 2014 The ma jorit y of our securit y ofcer s in the U SA do not ha v e health care and when the reform b e c o m e s a r e a l i t y i t w i l l r e s u l t i n s i g n i f c a n t l y hig her cos ts cos ts that w e will not alw a ys be able to pass on to our cus tomer s W e will continue to ofer our cus tomer s hig hqualit y securit y solutions but with a hig her content of intellig ent video monitorin g in or der to decrease or eliminate cos t increases and to protect our mar g ins T o be prepared w e will e x ecute signifcant in v es t ments and tr ainin g eforts in the U SA in 2013 R eco v er y in Europe Securit y Ser vices Europe reco v ered in 2012 from a w eak 2011 Oper atin g income w as M SEK 1 102 1 009 and the oper atin g mar g in impro v ed to 41 percent 39 partly due to s tron g de v elopment in Bel g ium F r ance and G erman y Despite ne gativ e or ganic sales gro wth in F r ance of 7 percent Securit y Ser vices Europe grew b y 1 percent The mark et conditions in F r ance increasin g ly appear to be mo vin g in the same direction as Spain and the ma jorit y of F rench securit y companies are loss makin g Therefore in 2012 Securit as Ser vices i n F r a n c e successfully implemented necessar y price increases which had a ne gativ e impact on gro wth but impro v ed oper atin g income b y appro x imately 25 percent compared to 2011 W e are increasin g the pace In 2012 technolog ical securit y solutions cons ti tuted 6 percent of Securit as tot al sales W e ha v e set a t ar g et to triple this share of sales which I consider achie v able b y the end of 2015 The technology is there as is the kno wled g e and the mark et and w e kno w that more technology decreases the cus tomer s tot al cos t for a satisfac tor y securit y solution W e are no w r ampin g up our eforts realizin g the hurr y and set tin g e v en hig her ambitions No one competin g in the internationally kno wn ski r ace V asaloppet reaches the fnish line in the villa g e of M or a b y focusin g on reachin g the half w a y point No one not e v en with a n e x c e l l e n t f t n e s s le v el can fnish a mar athon if the focus is wron g W e ha v e focus the t ar g et is clear and the speed is up The journe y has be gun W e are t akin g the lead Stockholm M arch 15 2013 Alf G or ansson President and CEO Securit as AB 6 Securit as Annual R eport 2012 CEO s t atement