Page 11 - Sector Alarm Annual Report 2020

Sector Alarm / Annual Report 2020
2020 was an extraordinary year for everyone, including us at Sector Alarm. Notwithstanding the short-term challenges, we were able to navigate the year solidly and the business proved to be resilient.
Sector Alarm continued to provide an excellent service to customer portfolio throughout the year, as demonstrated by customer sat- isfaction stable at industry lead- ing levels, and the attrition rate improving from 6.3% to 6.0%.
In terms of customer acquisition, the level of activity was largely dictated by the Covid-19 situa- tion and associated lockdowns, curfews and various government restrictions. Sector Alarm had some strong months, but also some periods of near-complete shutdown. Following a very good start in January and February, the customer acquisition activities were almost entirely suspended from mid-March throughout May. We managed to quickly ramp up activities in June leading to a strong third quarter, but – in par- allel with cases resurgence – the fourth quarter was impacted again by full and partial lock-downs in Ireland, Spain and France as well as by an increased number of Covid-19 cases across all markets. However, due to the strong under- lying momentum in the business, Sector Alarm Q4 performance was still ahead of last year.
I am proud to report that Sector Alarm was able to extend its track record of positive net customer growth across all six markets
despite the challenges. We achieved a net customer growth of about 15,000, with our year-end customer base counting nearly 560,000 customers. Most of the growth was driven by the estab- lished markets in Northern Europe, but organic customer growth for Southern Europe also improved materially compared to 2019.
From a financial perspective, 2020 was a strong year and new records were set for the main financial KPIs. Total revenues ended at NOK 2,704 million, up by 10% (up 4%
in constant currency) compared
to last year driven by positive net customer growth and ARPU in- creases. At the same time Adjusted Portfolio EBITDA reached nearly NOK 1,500 million, up 14% (up 7% in constant currency) compared
to last year. The Portfolio EBITDA improvement was mainly due to a 10% improvement in EPC (up 4% in constant currency) due to under- lying positive development across most markets combined with lower cost in line with reduced portfolio servicing required throughout the year.
What we achieved in 2020 would not have been possible with-
out the dedicated and talented employees. I strongly believe that the uniqueness of our culture with “Right People” following “High- ways” proved crucial for Sector Alarm in successfully navigat-
ing this extraordinary year. The safety of employees, customers and other members of the public has been, and will always be our primary concern. Sector Alarm has thus followed and will continue to
strictly follow all the health and safety recommendations provided by national authorities.
Last year Sector Alarm welcomed KKR as a partner and 30% owner, and the partnership has been very successful so far. KKR has brought in a unique set of capabilities through their knowledge, relation- ships, professionalism and highly capable pool of resources. During the year KKR has been fundamen- tal in the development of various performance improvement initi- atives in Sector Alarm, including professionalism and optimization of Digital Marketing, the introduc- tion of market leading video prod- ucts and the strengthening of the go to market approach in Southern Europe.
Sector Alarm has a clear growth strategy and expansion into new markets is one of the top priorities. Therefore, it is with great excite- ment and high expectations that we have started the process to enter the Italian market.
In summary, 2020 was challenging and in many ways different for Sector Alarm, but we end the year on a strong note. Financial perfor- mance was strong, the business model proved its resiliency, we continued to grow and strength- ened our position in the home security space. I remain excited about the future ahead of us.
Jørgen Dahl Founder and CEO