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Q3 Report 2007Johan Molin, President & CEO
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Financial Highlights Q3Q3 - Solid improvement – Good continued growth in all areas – Raw material compensated & efficiency gains – Earnings improvements in all divisions
Sales 8,274 MSEK +7%+7% organic, +4% acquired growth, -3% currency
EBIT 1,404 MSEK +14%
Cash flow 1,306 MSEK +42%
EPS 2.36 SEK +17%
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Financial Highlights Jan-Sep
Sales 24,830 MSEK +8%
+7% organic, +5% acquired growth, -4% currency
EBIT 4,018 MSEK +15%
Cash Flow 3,068 MSEK +31%
EPS 6.72 SEK +15%
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2 +23
Portion of Group sales Jan-Sep 2007 %Year-to-date vs previous year %
38 +1247 +9
6 +30
6 +20
1 +24
Group Sales in Local Currencies Jan-Sep 2007
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Organic Growth %
-4
-2
0
2
4
6
8
10
12
14
2003
2004
2005
2006
2007
Quarter Rolling 12-months Target
2007: 8% (8%)
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Growth Highlights
Good general growth
New markets & regions 11% of total sales in Q4– Baodean & iRevo
Secure issuance growing– Fargo very strong growth
Asian sales companies– Successful launch of European and
American lock series
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Sales Growth - Currency Adjusted- Stable double digit development
-2
0
2
4
6
8
10
12
14
16
2004 2005 2006 200722000
24000
26000
28000
30000
32000
34000
Acquired growth Organic growth Sales rolling 12-months in fixed currencies
MSEK%
Run rate 13%Organic 8%Acquired 5%
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Acquisitions Q3 – iRevo and Baodean
Fully approved and consolidated from 1 October
iRevo:– World largest supplier of electronic locks for
the residential market
– Sales of 400 MSEK in Korea and China
– Dilutive in Q4
Baodean:– China’s leading high security lock maker
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Operating Income* (EBIT) MSEK
800
850
900
950
1000
1050
1100
1150
1200
1250
1300
1350
1400
1450
2004 2005 2006 20073200
3700
4200
4700
5200
Quarter Rolling 12-monthsQuarter 12-months
*Rolling 12-months excludes 2006 restructuring costs of 1 474 MSEK
Run rate 5,292 MSEK (4,559) +16%
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Operating Margin* (EBIT)
13,0
13,5
14,0
14,5
15,0
15,5
16,0
16,5
17,0
17,5
2004 2005 2006 2007
EB
IT %
Quarter Rolling 12-months
*Excluding 2006 restructuring costs of 1 474 MSEK
Run rate 16.1% (14.9)
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Margin Highlights Q3
Volume growth 4%
Price increases have come through +3%
Raw material compensated
No dilution from acquisitions
Restructuring slightly ahead of plan
– Total reduction of 1035 employees
– Quarterly savings 60 MSEK (85 from project start less 25 LY)
– Run rate 57% of total savings
– Total annual savings 600 MSEK from 2009
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Division - EMEA
Good general growth in most markets
Somewhat slower in the UK, Spain and Germany
Good leverage from growth
Restructuring progressing well
Operating margin (EBIT) + Volume
+ Restructuring savings
= Material cost increase compensated
SALESshare of
Group total %
39
EBIT %
13
14
15
16
17
18
2004 2005 2006 2007
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Division - Americas
Good general growth in all sectors except residential
Residential affected by weakening demand
Activity level is healthy
Mexico stable growth
Operating margin (EBIT) + Volume= No dilution = Material cost increase compensated
SALESshare of
Group total %
31
EBIT %
15
16
17
18
19
20
21
2004 2005 2006 2007
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Division - Asia Pacific
Good growth in the Pacific
Asian sales outside China picking up
Strong development in China– Baodean consolidated from 1 October
iRevo will dilute from 1 October with 1.0-1.5%
Price increase in Q3 very effective
Operating margin (EBIT)+ Volume growth+ Implemented price increases= Raw material compensated
SALESshare of
Group total %
7
EBIT %
468
101214161820
2004 2005 2006 2007
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Division - Global Technologies Good general development
Record profit
New organisation HID/Fargo/ITG coming together– Sales synergies and market convergence
New factory in Malaysia running well– Ronneby factory closed
Operating margin (EBIT)+ Volume
+ Manufacturing and overhead savings
- Continued market investments
SALESshare of
Group total %
14
EBIT %
12
13
14
15
16
17
18
2004 2005 2006 2007
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Division - Entrance Systems
Service developing at a good pace
New door sales somewhat slower in the US and EMEA
Accelerated growth from low level in Asia, primarily in China
Decision to close Dieburg, Germany
Operating margin (EBIT) + Volume growth
+ Price increases
SALESshare of
Group total %
9
EBIT %
91011121314151617
2004 2005 2006 2007
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Q3 Report 2007Tomas Eliasson, CFO
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Financial Highlights Q3 and Jan-Sep 2007
MSEK 2007 2006 Change 2007 2006 Change3nd Quarter Jan-Sep
Sales 8,274 7,736 +7% 24,830 23,078 +8%Whereof Organic growth +7% +7%Acquired growth +4% +5%FX-differences -248 -3% -943 -4%
Operating income (EBIT) 1,404 1,235* +14% 4,018 3,496* +15%EBIT-margin (%) 17.0 16.0* 16.2 15.2*
Operating cash flow 1,306 919 +42% 3,068 2,339 +31%
EPS (SEK) 2.36 2.02* +17% 6.72 5.85* +15%
*Excluding restructuring costs of 520 SEK M
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Operating Cash Flow MSEK
0
200
400
600
800
1000
1200
1400
2004 2005 2006 2007
Qua
rter
2000
2500
3000
3500
4000
4500
5000
12-m
ths
Quarter Rolling 12-months
20
49
50
51
52
53
54
55
56
57
58
59
2004 2005 2006 2007
Day
s
DSO: 56 (55)
Working CapitalReceivables
21
Working CapitalInventories
95
100
105
110
115
120
2004 2005 2006 2007
Day
s
MTPT: 106 (111)
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Gearing % and Net Debt MSEK
0
2000
4000
6000
8000
10000
12000
14000
16000
2004 2005 2006 20070
20
40
60
80
100
120
140
160
Net debt Gearing
Net debt Gearing
Debt/Equity 91Debt/Equity 91
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Return On Capital Employed* %
12
14
16
18
20
22
2004 2005 2006 2007
Target 20%
*2006 excludes restructuring
ROCE YTD 18.4% (16.5)ROCE YTD 18.4% (16.5)
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Q3 Report 2007Johan Molin President & CEO
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Conclusion Q3
Strong total growth, +11%, driven by good general demand, market investments and acquisitions
Emerging markets takes off
Price management and efficiency programs adds to profit
Restructuring ahead of plan, 57% concluded
Solid improvement of EBIT in all divisions
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Outlook Going Forward
Organic sales growth is expected to continue at a good rate
The operating margin (EBIT) and operating cash flow are expected to develop well
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Q&A
