Q2 1 April - 30 june 2016 Presentation

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

© ASSA ABLOY. All rights reserved

Q2 Report 2016Johan MolinPresident and CEO


Financial highlights Q2, 2016

Strong growth in mature markets

– Strong growth in Americas, EMEA and Global Tech

– Good growth in Entrance Systems

– Negative in APAC due to weak Chinese market

Sales 17,894 MSEK +5%

4% organic, 4% acquired growth, -3% currency

EBIT 2,910 MSEK +6% Currency effect -81 MSEK

EPS 1.82 SEK +7%Underlying tax rate 26%

2


Financial highlights Jan-Jun 2016

Strong development despite a challenging market

– Strong growth in Americas

– Good growth in Entrance Systems, EMEA and Global Tech

– Negative growth in APAC due to China

Sales 33,785 MSEK +4%

4% organic, 3% acquired growth, -3% currency

EBIT 5,321 MSEK +5% Currency effect -158 MSEK

EPS 3.30 SEK +5%Underlying tax rate 26%

3


ASSA ABLOY in Forbes 100 most innovative companies

Strong development in EMEA digital product sales

– Driven by APERIO and smart door locks

Successful roll out of Service centers in USA

– Incremental growth through local service and quick deliveries

Japanese profile CLIQ-cylinder

– Orders and quick pipeline build

FlashDSC

Market highlights


5

Group sales in local currencies Jan-Jun 2016

3 +39

40 +7

15 +1

3 +1

1 +12

Share of Group sales 2016 YTD, %Year-to-date vs previous year, %

38 +7

Emerging markets 23% (25) of sales


-15

-12

-9

-6

-3

0

3

6

9

12

15

18

21

34 000

37 000

40 000

43 000

46 000

49 000

52 000

55 000

58 000

61 000

64 000

67 000

70 000

2009 2010 2011 2012 2013 2014 2015 2016

Growth %Sales MSEK

Organic Growth Acquired Growth Sales in Fixed Currencies

Sales growth, currency adjusted

6

2016 Q2 +8%

Organic +4%

Acquired +4%


Operating income (EBIT), MSEK

4 500

5 000

5 500

6 000

6 500

7 000

7 500

8 000

8 500

9 000

9 500

10 000

10 500

11 000

11 500

1 000

1 200

1 400

1 600

1 800

2 000

2 200

2 400

2 600

2 800

3 000

3 200

2009 2010 2011 2012 2013 2014 2015 2016

12-monthsQuarter

Quarter Rolling 12-months

Run rate 11,329 MSEK (10,251) +11%

7


12

13

14

15

16

17

2009 2010 2011 2012 2013 2014 2015 2016

EBIT Margin


2016 Acquisitions CurrencyQ2 -0.2% -0.1%

Operating margin, %

Run rate 2016 16.3% (16.3)

8


Manufacturing footprint

9

Status of manufacturing footprint programs 2006-2013:

– 76 factories closed to date, 2 to go

– 99 factories converted to assembly, 16 to go

Total personnel reduction:

– 11,356 FTE in total

493 FTE to go for all programs

New MFP in progress

395 MSEK of the provision remains for all programs


Margin highlights Q2 2016

EBIT margin 16.3% (16.1) +0.2%

+ Volume increase 3%, price 1%

Margin improvement

+ 4% Organic growth

+ Manufacturing footprint & pricing

- Currency -0.1%

- Acquisitions -0.2%

10


Acquisitions 2016

Fully active pipeline

9 acquisitions done in 2016

Divestment of Carlocks 550 MSEK

Acquired annualized sales 1,700 MSEK

Added sales 2.5%

11


Nassau, Denmark

12

Turnover of 540 MSEK with 360

employees

Important European supplier of

industrial doors

Adds additional coverage in

industrial doors and service

Neutral to EPS


Demoteller, USA

13


employees

Solutions for the financial card

instance issuance market

Enhances position within secure

issuance

Accretive to EPS

Trism (Fii Software)


Mauer, Bulgaria

14


employees

Manufacturer of cylinders and locks

Market Leader of locking products in

Bulgaria

Accretive to EPS


Division – EMEA

Strong growth in Scandinavia, Finland, Germany,

Iberia, Eastern Europe and Africa

Good growth in UK, Benelux, France, Italy and Israel

Strong progress of elmech solutions

Positive calendar effect

Operating margin (EBIT)

+ Organic +6%

= Direct material

- Acquisitions & currency -0.2%

15

13

14

15

16

17

18

19

2010 2011 2012 2013 2014 2015 2016

EBIT %

23%

Sales share of

Group total %


Division - Americas

Strong growth in Door group, Elmech, Residential, Canada, Mexico and South America (ex Brazil)

Good growth in AHW, High security and Canada

Negative in Brazil

Quotation levels continue to develop positive


+ Organic +8%

+ Direct Material

- Acquisitions and currency -0.7%

17

20

18

19

20

21

22

23

2010 2011 2012 2013 2014 2015 2016

EBIT %

24%

Sales share of

Group total %


Division - Asia Pacific

Strong growth in Pacific

Good growth in South Asia and Korea

Continued decline in China

– Personnel reduction China YTD–586 p

Exciting orders for elmech in Japan


- Organic -6%

+ Savings mitigate sales decline

= Acquisitions and currency 0.2%

14

19

8

10

12

14

16

18

2010 2011 2012 2013 2014 2015 2016

EBIT %

13%

Sales share of

Group total %


Division - Global Technologies

HID

– Strong growth in PACS, Gov ID,

IDT (inlays) and Quantum secure

– Flat in IAM (Identity) and project sales

Hospitality

– Growth

– Strong profit


+ Organic +5%

- R&D investments


13

21

14

15

16

17

18

19

20

21

2010 2011 2012 2013 2014 2015 2016

EBIT %

13%

Sales share of

Group total %


Division - Entrance Systems

Strong growth in Door automatics, EU Industrial, High

speed doors

Good growth in Amarr and 4Front and Ditec

Negative in EU Residential

Continued good leverage


+ Organic +4%

+ Direct Material and consolidation effects


28

23

10

12

14

16

18

2010 2011 2012 2013 2014 2015 2016

EBIT %

27%

Sales share of

Group total %



Q2 Report 2016Carolina Dybeck HappeCFO



Financial highlights Q2 2016

MSEK 2015 2016 Change 2015 2016 Change

Sales 17,082 17,894 +5% 32,334 33,785 +4%

Whereof

Organic growth 656 650 +4% 1,336 1,099 +4%

Acquired growth 453 593 +4% 829 1,083 +3%

FX-differences 2,008 -431 -3% 3,900 -730 -3%

Operating income (EBIT) 2,742 2,910 +6% 5,071 5,321 +5%

EBIT-margin (%) 16.1 16.3 15.7 15.7

Operating cash flow 1,991 2,519 +27% 2,511 3,017 +20%

EPS (SEK) 1.70 1.82 +7% 3.15 3.30 +5%

2nd Quarter Six months

26


Bridge Analysis – Apr-Jun 2016

MSEK 2015

Apr-Jun

Organic Currency Acq/Div 2016

Apr-Jun

4% -3% 4% 5%

Sales 17,082 650 -431 593 17,894

EBIT 2,742 195 -81 54 2,910

% 16.1% 29.9% 18.8% 9.1% 16.3%

Dilution / Accretion 0.5% -0.1% -0.2%

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P&L Components as % of salesJan – Jun 2016

Direct material 36.3% 35.6% 35.3%

Conversion costs 24.8% 24.9% 25.3%

Gross Margin 38.9% 39.5% 39.4%

S, G & A 23.2% 23.5% 23.7%

EBIT 15.7% 16.0% 15.7%

2016YTD excl

acquisitions

2015YTD

2016YTD

28


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

10 000

10 500

11 000

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

2009 2010 2011 2012 2013 2014 2015 2016

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

2009 2010 2011 2012 2013 2014 2015 2016

GearingNet Debt

Net debt Gearing

Debt/Equity 64 (70)

Net debt/EBITDA2.1 (2.3)

30

*) 2009-2011 Not restated for changed pension accounting principles.


Earnings per share, SEK

2.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2009 2010 2011 2012 2013 2014 2015 2016

12-monthsQuarter SEK


31

Restated for Stock split 3:1 2015.

Q2 EPS +7%



Q2 Report 2016Johan MolinPresident and CEO


Conclusions Q2 2016

Good growth by 5% with 4% organic and 4% acquired

Strong growth in mature markets

Chosen by Forbes as 100 most innovative company

Good EBIT development +6%

Strong cash flow +27%

33



Q&A

Business

Q2 1 April - 30 june 2016 Presentation