Lünendonk study: Security technology drives growth of security service providers

September 18, 2023

  • Security technology drives growth and increases profitability
  • Industry provides support in increasingly complex threat situation
  • New Lünendonk study now available free of charge

The leading security service providers in Germany are increasing their growth and profitability through the use of security technology. In doing so, the companies are responding to the increasingly complex threat situation and the shortage of personnel. Furthermore, the service providers are taking on additional tasks to meet the growing need for security in the face of increased security threats.

These are the first results of the new Lünendonk study on the market for security service providers in Germany, which is now available free of charge at www.luenendonk.de.

Growth impulses through security technology
The increased use of security technology provides important impulses for market development. More than half of the companies are very optimistic about the current demand and the use of security technology. For the coming years, the companies forecast stronger growth with security technology (8.7% for 2023) than with security services (7.5%) and with security consulting (3.7%). This expectation also applies to the years 2024 and 2025.

At the same time, the usual profitability from the use of security technology is significantly higher than with security services. More than half of the companies report a return on sales from the use of security technology of more than 6 %. With security services, only 12 percent of the companies generate a return on sales of at least 6 percent. The usual market EBIT, on the other hand, is 2 to 5 percent.

The companies see further growth impulses in the development of new and comprehensive security concepts as well as the dovetailing of personnel and technology solutions. The integration of digital technologies also improves transparency in service delivery to customers.

Increasing demands on the market
According to the security service providers, the security industry will take on more tasks and responsibilities in the future. The study participants rate the future consideration of airborne threats as important or very important. Two thirds of the companies stated that they would include defence measures against air threats in their own service portfolio or were currently discussing this. At the same time, customers are raising the minimum requirements for security companies and increasingly expect security personnel to be available at short notice.

Thomas Ball, author of the study and partner at Lünendonk & Hossenfelder, comments: “In recent years, the market has shown itself to be particularly flexible and resilient in the face of crises. In view of the additional customer demand, the industry will become even more important in the future, open up new subject areas and take on broader tasks. The Lünendonk study provides meaningful figures, data and facts to accompany the market with sound orientation.”

Reference
The Lünendonk study “Security service providers in Germany” included 47 providers. These generated 46.1 per cent of the market volume of 10.5 billion euros in 2022 (excluding money and valuables logistics). The study thus provides a comprehensive overview of the structure of the German market for security services. It contains numerous long-term evaluations, detailed analyses as well as interpretations of market structure and current topics and trends and is now available free of charge at www.luenendonk.de.

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