Q1 Report 2015 - Assa Abloy · Q2 Report 2015 Johan Molin President and CEO . Financial highlights...

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

Q2 Report 2015 Johan Molin President and CEO

Financial highlights Q2 2015

Strong development – Strong growth in Global Tech – Good growth in Americas, EMEA and Entrance – Negative in APAC due to weak Chinese market

Sales 17,082 MSEK +22% 4% organic, 3% acquired growth, 15% currency

EBIT 2,742 MSEK +24% Currency effect 302 MSEK

EPS 1.70 SEK +23% Underlying tax rate 26%

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Financial highlights Jan-Jun 2015

Strong first half of the year – Strong growth in Americas and Global Tech – Good growth in EMEA and Entrance – Weak in APAC

Sales 32,334 MSEK +23% 4% organic, 3% acquired growth, 16% currency

EBIT 5,071 MSEK +24% Currency effect 551 MSEK

EPS 3.15 SEK +25% Underlying tax rate 26%

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4

Market highlights Entrance - segmentation shows result

– Large projects won combining pedestrian- industrial- and high performance door solutions

Positive momentum for Identity Assurance – Product launches drive sales – real time cloud, threat

analytics & several solutions for mobile & tablets

Strong growth in Hospitality – High demand of Mobile Keys solution from hotels of all sizes

Strong DDL sales driven by Home Automation – Successful integration partnerships in Asia, US & Europe

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Group sales in local currencies Jan-Jun 2015

2 +31

39 +8 16 +10

4 +8

1 +5

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

38 +4

Emerging markets 25% (23) 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

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2015 Q2 +7% Organic +4% Acquired +3%

Operating income (EBIT), MSEK

4 5005 0005 5006 0006 5007 0007 5008 0008 5009 0009 50010 00010 500

900

1 100

1 300

1 500

1 700

1 900

2 100

2 300

2 500

2 700

2 900

2008 2009 2010 2011 2012 2013 2014 2015

12-monthsQuarter

Quarter Rolling 12-months

Run rate 10,251 MSEK (8,368) +23%

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12

13

14

15

16

17

2008 2009 2010 2011 2012 2013 2014 2015

EBIT Margin

Quarter Rolling 12-months2015 Dilution

Q2 -0.1% 2015 -0.1%

Operating margin (EBIT), %

Run rate 2015 16.3% (16.2)

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Manufacturing footprint

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Status manufacturing footprint programs 2006-2013: – 71 factories closed to date, 9 to go – 84 factories converted to assembly, 5 to go – 39 offices closed, 8 to go

Personal reduction QTD 139p and total 9,759p

225p in further planned reductions

776 MSEK of the provision remains for all programs

Margin highlights Q2 2015

EBIT margin 16.1% (15.9) +0.2%

+ Volume increase 2.5%, price 1.5%

+ Margin increase +0.2% + Organic growth + Manufacturing footprint - Currency -0.1% - Acquisitions -0.1%

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Acquisitions 2015

Fully active pipeline

7 acquisitions done in 2015

Annualized sales 1 400 MSEK

Added sales 3.0%

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L-Door, Belgium

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Turnover of 175 MSEK with 120 employees

Domestic market leader in sectional doors

Strong service organisation

Excellent market coverage

Accretive to EPS

Flexim, Finland

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Turnover of 340 MSEK with 245 employees

Leading security system provider and locksmith

Good domestic sales coverage

Expertise in project specification and services

Accretive to EPS

Prometal, UAE and Saudi Arabia

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Turnover of 225 MSEK with 420 employees

Leading manufacturer of steel security doors

Established and well reputed brand

Reinforces the specification of total door opening solutions

Accretive to EPS

23%

SALES share of

Group total %

Division - EMEA

Strong growth in Scandinavia, Finland, Eastern Europe and Africa

Good growth in Germany and Iberia

Flat in UK, Italy and Israel

Negative in Benelux and France

No inflation makes currency compensation difficult

Operating margin (EBIT) + Organic +5%

+ Savings

- Dilution & Currency -0.6%

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13141516171819

2010 2011 2012 2013 2014 2015

EBIT %

Division - Americas

Strong growth in AHW, Residential, Mexico and South America

Growth in El-mech, Doors and Canada

Stable trend in High security

Strong demand from Home Automation

Operating margin (EBIT)

+ Organic +5%

+ Efficiency

- Currency & Dilution -0.4%

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20

18

19

20

21

22

23

2010 2011 2012 2013 2014 2015

EBIT %

23%

SALES share of

Group total %

Division - Asia Pacific

Strong growth in Australia, South Asia and North Asia

Growth in New Zealand

Continued decline in China – Efficiency measures implemented in China

Operating margin (EBIT) - Organic -2%

+ Personnel reduction in China -9%,

+ Positive sales mix

- Currency & Dilution -0.4%

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19

8

10

12

14

16

18

2010 2011 2012 2013 2014 2015

EBIT %

15%

SALES share of

Group total %

Division - Global Technologies

HID – Strong growth in IAM (Identity and Access management),

IDT (inlays) and Project sales – Slight decline in Gov-Id – Promising development of ID-Assurance – Investment in R&D

Hospitality – Strong growth – Strong profit

Operating margin (EBIT) + Organic +10% - Negative mix

- Currency & Dilution -0.7%

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21

1415161718192021

2010 2011 2012 2013 2014 2015

EBIT %

14%

SALES share of

Group total %

Division - Entrance Systems Strong growth in High Speed Doors, Flexiforce, Amarr

and 4Front

Good growth in Door Automatics

Flat in Industrial EU and Ditec and decline in Residential EU

Improving efficiency

Operating margin (EBIT) + Organic +5%

+ Consolidation effects

- Currency -0.4%

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23

1112131415161718

2010 2011 2012 2013 2014 2015

EBIT %

25%

SALES share of

Group total %

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

Q2 Report 2015 Carolina Dybeck Happe CFO

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

Financial highlights Q2 2015

MSEK 2014 2015 Change 2014 2015 Change

Sales 13,964 17,082 +22% 26,268 32,334 +23% Whereof Organic growth +4% +4% Acquired growth +3% +3% FX-differences +2,008 +15% +3,900 +16% Operating income (EBIT) 2,219 2,742 +24% 4,076 5,071 +24% EBIT-margin (%) ) 15.9 16.1 15.5 15.7 Operating cash flow 1,963 1,991 +1% 2,520 2,511 0% EPS (SEK) 1.38 1.70 +23% 2.52 3.15 +25%

2nd Quarter Six months

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Bridge Analysis – Apr-Jun 2015

MSEK 2014

Apr-Jun

Organic Currency Acq/Div 2015

Apr-Jun

4% 15% 3% 22%

Revenues 13,964 656 2,008 453 17,082

EBIT 2,219 170 302 51 2,742

% 15.9% 25.9% 15.1% 11.2% 16.1%

Dilution / Accretion 0.4% -0.1% -0.1%

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P&L Components as % of sales Apr – Jun 2015

Direct material 36.5% 36.8% 37.0%

Conversion costs 25.1% 24.3% 24.2%

Gross Margin 38.4% 38.9% 38.8%

S, G & A 22.5% 22.7% 22.7%

EBIT 15.9% 16.2% 16.1%

2015 Q2 excl

acquisitions

2014 Q2

2015 Q2

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Operating cash flow, MSEK

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

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

29

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 70 (76)

Net debt/EBITDA 2.3 (2.4)

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

Earnings per share, SEK

2.002.503.003.504.004.505.005.506.006.50

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2008 2009 2010 2011 2012 2013 2014 2015

12-monthsQuarter SEK

Quarter Rolling 12-months

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Restated for Stock split 3:1 2015.

Stock split 2015 3:1

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

Q2 Report 2015 Johan Molin President and CEO

Conclusions Q2 2015

Strong growth by 22% with 4% organic

Emerging markets 25% (23) Strong EBIT improvement of 24% Strong EPS improvement by 23%

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

Q&A