Q2 Report 2009 - Assa Abloy · 20 Financial Highlights Q2 2009 MSEK 2008 2009 Change 2008 2009...
Transcript of Q2 Report 2009 - Assa Abloy · 20 Financial Highlights Q2 2009 MSEK 2008 2009 Change 2008 2009...
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Q2 Report 2009Johan Molin
President & CEO
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Financial Highlights Q2 2009
Strong performance despite recessionary market – Construction in recession throughout the world– All divisions affected and declining – Stable high EBIT through large efficiency gains– Record strong cash flow
Sales 8,921 MSEK +5%-14% organic, +4% acquired growth, +15% currency
EBIT 1,340 MSEK -3%Currency effect +268 MSEK
EPS 2.25 SEK -2%
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Financial Highlights H1 2009
Stable and consistent performance despite recession
– Total growth 6%– Improved EBIT through efficiency and currency gains
Sales 17,803 MSEK +6%-13% organic, +4% acquired growth, +15% currency
EBIT 2,668 MSEK* +2%Currency effect +493 MSEK
EPS 4.45 SEK +2%
* Excluding restructuring charges of MSEK 109
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ASSA ABLOY in Q2 2009
Weakening demand in all parts of the world– De-stocking close to end
– Asia, Africa and Brazil less affected
– American lack of new commercial construction will affect H2
Electromechanics holding up thanks to new products– RFID for hotels, high definition printers, Cliq technology,
WiFi locks USA, low energy operators
Continued investment in R&D and market presence
Industry consolidation continues– Agreement to acquire Ditec
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Group Sales in Local Currencies H1 2009
2 -11
38 -1045 -11
9 +5
4 -11
2 +10
Share of Group sales 2009 YTD, %Year-to-date vs previous year, %
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20 00021 00022 00023 00024 00025 00026 00027 00028 00029 00030 00031 00032 00033 00034 00035 00036 000
2004 2005 2006 2007 2008 2009
Sa
les,
MS
EK
-14-13-12-11-10-9-8-7-6-5-4-3-2-101234567891011121314
Gro
wth
%
Organic Growth Acquired Growth Sales in Fixed Currencies
Sales Growth Q2 2009 - Currency Adjusted
2009 Q2 -10%Organic -14%Acquired +4%
Total growth 52% in 5 years
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Operating Income (EBIT) MSEK
500
600
700
800
900
1 000
1 100
1 200
1 300
1 400
1 500
2005
2006
2007
2008
2009
3 100
3 300
3 500
3 700
3 900
4 100
4 300
4 500
4 700
4 900
5 100
5 300
5 500
5 700
Quarter Rolling 12-monthsQuarter 12-months
Continued strong EBIT Run rate 5,572 MSEK (5,466), +2%
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Operating Margin (EBIT)
11,0
12,0
13,0
14,0
15,0
16,0
17,0
2005
2006
2007
2008
2009
EB
IT %
Quarter Rolling 12-months
Run rate 2009 15.5% (16.2)
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Manufacturing Footprint
Very successful!
Conversion to assembly in high cost countries
Low cost content from 23% to 39% since 2005
Large efficiency gains out of the programs
Consolidation of support functions and administration
Achieved 3 829p, 1 085p more to go, +29% to plan
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Personnel Development
25 000
26 000
27 000
28 000
29 000
30 000
31 000
32 000
33 000
34 000
2007 2008 2009
No
of
Peo
ple
Personnel Total Personnel Organic
-7,462 people organically from
Q4 2007
Incl. acquisitions from Q4 2007
-3%
-10%
-10%
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Acquisitions 2009
Selective activity within acquisitions
4 small acquisitions carried through during H1– Adds 200 MSEK annualized, +0.6%
Signed agreement to acquire Ditec, Italy– Adds 900 MSEK from Q4, +2.6%
SimonsVoss– Court appeal pending
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Strategic move into fast growing and profitable door automation
>20 BSEK industry with EBIT >15%
Creates a clear leader in automated entrances
Leader in door automatics in Italy and 60% export
Complementary to Entrance Systems– Automatic doors – Gate automation– Rapid industrial doors
Adds indirect sales channel– Adds to indirect sales channel in mature markets– Expands the emerging markets
Ditec ItalySales 900 MSEK
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Margin Highlights Q2 2009
EBIT margin 15.0% (16.2)
- Volume downturn
- Fixed production costs dilutes
+ Manufacturing footprint, 31 sites closed
+ Contingency and manufacturing plans3,184 people left in H1, 10% less 23% reduction in personnel in 21 months
+ S, G & A cost improvement
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Division - EMEA
Deep construction decline continues
All markets down but Germany, Africa and UK relatively better
Severe downturn in Spain, Italy and EE
Profit supported by footprint savings
Valli&Valli and Gardesa dilutes by 0.3%
Operating margin (EBIT) - Volume -18%
+ Restructuring savings
- Dilution
= Raw material positive
SALESshare of
Group total %
38
EBIT %
1112131415161718
2005
2006
2007
2008
2009
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Division - Americas
Residential and commercial markets down
Canada, Mexico and Brazil less hit
Distribution destocks and weak aftermarket
Strong EBIT Margin through efficiency gains and personnel reductions
Lack of commercial construction will affect H2 even more
Operating margin (EBIT) = Volume -17%+ Strong efficiency improvement= Raw materials positive
SALESshare of
Group total %
30
EBIT %
16
17
18
19
20
21
2005
2006
2007
2008
2009
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Division - Asia Pacific
Slowing construction in the whole region
Flat sales in China and South East Asia
Australia and New Zealand are weak
Production for Europe in sharp decline
iRevo successful launch of new digital lock range
Operating margin (EBIT)- Volume -9%- Currency effects AU/NZ+ Restructuring savings+ Raw material
SALESshare of
Group total %
9
EBIT %
4
6
8
10
12
14
16
2005
2006
2007
2008
2009
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Division - Global Technologies
HID Access control declining
Several large projects for Secure Issuance
ITG sales continued negative
Hospitality market in sharp decline
Efficiency gains gives good profit in HID and Hospitality
Operating margin (EBIT)+ Volume stable HID/Fargo
+ Hospitality currency improvement
+ Restructuring give good effects
SALESshare of
Group total %
14
EBIT %
1213141516171819
2005
2006
2007
2008
2009
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Division - Entrance Systems
Recession in the retail segment
Stable health care and emerging markets
Good development of service sales
Margin improvement from manufacturingfootprint
Operating margin (EBIT) - Volume -5%
+ Manufacturing footprint
+ Raw material
SALESshare of
Group total %
9
EBIT %
11
12
13
14
15
16
17
2005
2006
2007
2008
2009
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Q2 Report 2009Tomas Eliasson
CFO
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Financial Highlights Q2 2009
MSEK 2008 2009 Change 2008 2009 Change
Sales 16,728 17,803 +6% 8,526 8,921 +5%Whereof Organic growth -13% -14%Acquired growth +4% +4%FX-differences +2,893 +15% +1,433 +15%
Operating income (EBIT)* 2,621 2,668 +2% 1,378 1,340 -3%EBIT-margin (%)* 15.7 15.0 16.2 15.0
Operating cash flow 1,663 2,422 +46% 1,081 1,584 +47%
EPS (SEK)* 4.38 4.45 +2% 2.30 2.25 -2%
*Excluding restructuring charges of 109 MSEK in Q1 2009
Half Year 2nd Quarter
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Cost Development – Volume Adjusted
Material Cost Rolling 12 MonthsGroup Year-on-Year Changes in Cost
-5%
-4%-3%
-2%
-1%
0%1%
2%
3%
4%5%
6%
7%
8%9%
10%
20
07
20
08
20
09
Adjusted for currency, growth and acquisitions
Material cost change = net of cost change and outsourcing mix change
H1: 75 MSEK saving from material cost less
increased outsourcing!
H1: 75 MSEK saving from material cost less
increased outsourcing!
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Cost Development
Conversion cost = all fixed and variable production costs excluding material
Conversion Cost Rolling 12 MonthsGroup Year-on-Year Changes in Cost
-10%-9%-8%-7%-6%-5%-4%-3%-2%-1%0%1%2%3%4%5%6%7%8%9%
10%
20
07
20
08
20
09
Adjusted for currency and acquisitions
-11% in H1Variable: -17%Fixed: -4%
-11% in H1Variable: -17%Fixed: -4%
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Cost Development
S, G & A Rolling 12 MonthsGroup Year-on-Year Changes in Cost
-10%-9%-8%-7%-6%-5%-4%-3%-2%-1%0%1%2%3%4%5%6%7%8%9%
10%
20
07
20
08
20
09
Adjusted for currency and acquisitions
S, G & A cost = Selling, administrative and R&D costs
-15% in H1-15% in H1
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13.7%17.1%21.4%
103493-550
7522,893-2,571
4%15%-13%
Acq/DivCurrenyOrganicGrowth
15.0%15.7%%
2,6682,622EBIT
17,80316,728Revenues
Bridge Analysis – Jan-Jun 2009
6%ASSA ABLOY Group
2009Jan-Jun
2008Jan-JunMSEK
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Operating Cash Flow, MSEK
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2005
2006
2007
2008
2009
Qua
rter
3000
3500
4000
4500
5000
5500
6000
6500
12-m
onth
s
Quarter Rolling 12-months
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Gearing % and Net Debt MSEK
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
2005
2006
2007
2008
2009
0
20
40
60
80
100
120
Net debt Gearing
Net debt Gearing
Debt/Equity 74 (87)
Debt/Equity 74 (87)
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Maturity Profile Long Term DebtAll long term debt maturing before 2011 refinanced
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
2010 2011 2012 2013 2014 2015 2016 ->
Long term debt = 79% of net debtBackup facility 12 BSEK not utilized
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Q2 Report 2009Johan Molin
President & CEO
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Conclusion Q2 2009
5% growth
Strong profit despite recessionary markets
Continued investments in R&D and market presence
Agreement to acquire Ditec
Strong operational cash flow
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Short Term Actions 2009
Stay close to customers – sales force maintained
Continue investments in new products
Cost reductions
Cash and margin focus
Be ready to react fast on market opportunities
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Outlook
Long Term
Organic sales growth is expected to continue at a good rate
The operating margin (EBIT) and operating cash flow are expected to develop well
Outlook for 2009
Significant construction slowdown in all parts of the world
Negative organic growth is expected
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Q&A
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Summary
Construction in recession throughout the world
High profit maintained
Strong savings and currency gains
Selective acquisition activity
Continued investments in front end and product development
No visible improvements in market conditions in H2