Private security companies: poor profitability despite strong growth

In 2016, the 5,700 legal units in the private security sector employed 139,000 salaried full-time equivalent staff. They made turnover of 7.0 billion euros. Business is growing strongly due to sustained demand: turnover have risen an average of 3.8% in value per year since 2010. The sector includes few large companies, which increases competition and holds back prices (+1.2% per year over the period). In 2016, the average margin rate was only 3.7% and 29% of units even had negative profitability. Customer payment times are generally longer, compared to those in other support activities: a quarter of units report an average payment time greater than 75 days credit. Furthermore, wages are modest: two-thirds of employees receive less than 13 euros per hour gross. The qualification and supervision rate are low in this sector, when only 2% of employees are managerial staff.