Q1 Report 2015 - Assa Abloy · Financial highlights Q1 2015 Good start of the year – Strong...

ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience

Q1 Report 2015 Johan Molin President and CEO

Financial highlights Q1 2015

Good start of the year – Strong growth in Americas, Global Tech and ESD – Good growth in EMEA – Weak in APAC due to Chinese market and credit policy

Sales 15,252 MSEK +24% 5% organic, 3% acquired growth, 16% currency

EBIT 2,329 MSEK +25% Currency effect 249 MSEK

EPS 4.36 SEK +28% Underlying tax rate 26%

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Record awards at ISC West – Aperio R100, Aperio M100 & Ecopower power supply

– Electrified latch & GL1 Electrified Gate Lock

– HID Mobile Access & Active ID tap authentication

Good development in consumer business – Yale drives growth in EMEA, Americas and APAC

– Combination of digital and mechanical products

Strong growth in Latin America (+43%) – Regional warehouses and recent acquisitions

Pedestrian Door Automatics – New range of swing door operators

– Good growth in emerging markets

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Market highlights

http://www.siaonline.org/

4

Group sales in local currencies Jan-Mar 2015

2 +43

39 +9 14 +12

4 +8

1 +5

Share of Group sales 2015 YTD, % Year-to-date vs previous year, %

40 +3

Emerging markets 23% (22) of sales

-15-12-9-6-30369121518212427

31 00034 00037 00040 00043 00046 00049 00052 00055 00058 00061 00064 00067 000

2008 2009 2010 2011 2012 2013 2014 2015

Growth %Sales MSEK

Organic Growth Acquired Growth Sales in Fixed Currencies

Sales growth, currency adjusted

5

2015 Q1 +8% Organic +5% Acquired +3%

Operating income (EBIT), MSEK

4 5005 0005 5006 0006 5007 0007 5008 0008 5009 0009 50010 000

900

1 100

1 300

1 500

1 700

1 900

2 100

2 300

2 500

2 700

2008 2009 2010 2011 2012 2013 2014 2015

12-monthsQuarter

Quarter Rolling 12-months

Run rate 9,728 MSEK (8,118) +20%

6

12,0

13,0

14,0

15,0

16,0

17,0

2008 2009 2010 2011 2012 2013 2014 2015

EBIT Margin

Quarter Rolling 12-months2015 Dilution

Q1 -0.1% 2015 -0.1%

Operating margin (EBIT), %

Run rate 2015 16.3% (16.3)

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Manufacturing footprint

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Status manufacturing footprint programs 2006-2013: – 69 factories closed to date, 11 to go – 84 factories converted to assembly, 5 to go – 38 offices closed, 9 to go

Personal reduction QTD 206p and total 9,620p

364p in further planned reductions

845 MSEK of the provision remains for all programs

Margin highlights Q1 2015

EBIT margin 15.3% (15.1) +0.2% + Volume increase 4%, price 1%

+ Margin increase +0.2% + Organic growth + Manufacturing footprint - Currency -0.3% - Acquisitions -0.1% Good leverage from growth

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Acquisitions 2015

Fully active pipeline

4 acquisitions done in 2015

Annualized sales 750 MSEK

Added sales 1.5%

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Quantum Secure, USA

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Bookings of 400 MSEK with 175 employees

Provider of advanced identity management systems

Brings compliance in highly-regulated industries

Management of identities across multiple sites

Neutral to EPS

MSL, Switzerland

12

Turnover of 180 MSEK with 106 employees

Leading supplier of Swiss mortice locks

Complets Swiss total door opening solutions

Adds important market coverage

Accretive to EPS

Teamware, Malaysia

13

Turnover of 240 MSEK with 120 employees

Creates firm market leadership in fast growing Malaysia

Complimentary channels and products

Allows specification

Accretive to EPS

25%

SALES share of

Group total %

Division - EMEA

Strong growth in Scandinavia, Finland, Eastern Europe and Africa

Good growth in UK and Iberia

Flat in Germany and Israel

Negative in Benelux, France and Italy

Strategic move in Switzerland

Operating margin (EBIT) + Organic 3%

+ Leverage from savings +0.5%

- Dilution & Currency -0.7%

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13141516171819

2010 2011 2012 2013 2014 2015

EBIT %

Division - Americas

Strong growth in AHW, Doors, El-mech, Residential, Mexico and South America

Stable trend in High security and Canada

Important moves in South America

Strong demand from Home Automation

Operating margin (EBIT)

+ Organic 8%

+ Good leverage from efficiency

- Currency & Dilution -0.5%

16

20

18

19

20

21

22

23

2010 2011 2012 2013 2014 2015

EBIT %

24%

SALES share of

Group total %

Division - Asia Pacific

Strong growth in Australia, South Asia and North Asia

Good growth in New Zealand

China – Strong decline due to weak market and credit policy

– Government incentives for construction

– Many companies for sale

Operating margin (EBIT) - Organic -3%

+ Personnel reduction in China -8%

+ Positive sales mix


14

18

8

10

12

14

16

18

2010 2011 2012 2013 2014 2015

EBIT %

11%

SALES share of

Group total %

Division - Global Technologies

HID – Strong growth in Gov-Id, IDT (inlays) and Project sales

– Good growth in IAM (Identity and access management)

– Austin move completed

Hospitality – Strong growth

– Strong profit


+ Leverage from growth


13

20

1415161718192021

2010 2011 2012 2013 2014 2015

EBIT %

14%

SALES share of

Group total %

Division - Entrance Systems Strong growth in Door Automatics, High Speed Doors,

Flexiforce, Amarr and 4Front

Flat in Industrial EU and decline in Residential EU and Ditec

Europe is tough but improving with growing service


+ Efficiency improvement

- Negative mix (US growing)

- Currency -0.4%

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22

1112131415161718

2010 2011 2012 2013 2014 2015

EBIT %

26%

SALES share of

Group total %


Q1 Report 2015 Carolina Dybeck Happe CFO


Financial highlights Q1 2015

MSEK 2014 2015 Change 2013 2014 Change

Sales 12,305 15,252 +24% 48,481 56,843 +17% Whereof Organic growth +5% +3% Acquired growth +3% +9% FX-differences +1,892 +16% +2,138 +5% Operating income (EBIT) 1,857 2,329 +25% 7,923 9,257 +17% EBIT-margin (%) ) 15.1 15.3 16.3 16.3 Operating cash flow 557 520 -7% 6,803 8,238 +21% EPS (SEK) 3.41 4.36 +28% 14.84 17.38 +17%

1st Quarter Twelve months

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Bridge Analysis – Jan-Mar 2015

MSEK 2014

Jan-Mar

Organic Currency Acq/Div 2015

Jan-Mar

5% 16% 3% 24%

Revenues 12,305 680 1,892 376 15,252

EBIT 1,857 186 249 38 2,329

% 15.1% 27.3% 13.1% 10.1% 15.3%

Dilution / Accretion 0.6% -0.3% -0.1%

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P&L Components as % of sales Jan – Mar 2015

Direct material 34.6% 35.5% 35.6%

Conversion costs 26.5% 25.4% 25.3%

Gross Margin 38.9% 39.1% 39.1%

S, G & A 23.8% 23.7% 23.8%

EBIT 15.1% 15.4% 15.3%

2015 YTD excluding acquisitions

2014 Q1

2015 Q1

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Operating cash flow, MSEK

4 500

5 000

5 500

6 000

6 500

7 000

7 500

8 000

8 500

9 000

9 500

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

2008 2009 2010 2011 2012 2013 2014 2015

12-monthsQuarter

Quarter Cash Rolling 12-months EBT Rolling 12 months

28

Gearing % and net debt MSEK

0

20

40

60

80

100

120

0

5 000

10 000

15 000

20 000

25 000

30 000

2008 2009 2010 2011 2012 2013 2014 2015

GearingNet Debt

Net debt Gearing

Debt/Equity 64 (72)

Net debt/EBITDA 2.3 (2.3)

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*) 2008-2011 Not restated for changed pension accounting principles.

Earnings per share, SEK

8,00

10,00

12,00

14,00

16,00

18,00

20,00

0,000,501,001,502,002,503,003,504,004,505,005,50

2008 2009 2010 2011 2012 2013 2014 2015

12-monthsQuarter SEK

Quarter Rolling 12-months

30

Excluding restructuring costs of 1,000 MSEK in Q4 and full year 2013. 2008-2011 Not restated for changed pension accounting principles.

Dividend proposal 2015: 6.50 SEK (5.70) Stock split proposal 3:1


Q1 Report 2015 Johan Molin President and CEO

Conclusions Q1 2015

Strong growth by 24% with 5% organic – Strong growth in Americas, Global Tech and ESD – Good growth in EMEA – Decline in APAC

Good acquisition pipeline Emerging markets 23% (22) Strong EBIT improvement of 25% Strong EPS improvement by 28%

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