Q1 Report 2012 Johan Molin President & CEO 1
Financial highlights Q1 2012 Steady grow th w ith strong profit im provem ent – Continued strong growth in Global tech – Good development in Europe and North America – Slower emerging markets and declining Australia – Footprint program gives good savings Sales 1 0 ,8 3 9 MSEK + 2 5 % + 3% organic, + 19% acquired growth, 3% currency EBI T 1 ,6 5 5 MSEK + 2 0 % Currency effect 19 MSEK EPS 3 .1 0 SEK + 2 3 % Underlying tax rate 23% 2
Market highlights Branding – Group appearance on all trade shows – Demonstration fleet for architects – One company exposure on internet Investment in Emerging markets – Build up in India, ME, Africa and South America – Sales units created in Russia, Croatia, Indonesia, Ghana, Uganda, Mozambique, Liberia, Qatar Innovation pays off – More than 20% of all sales from products less than 3 years old 3
Emerging markets expansion Example; Africa Countries with high total GDP Nigeria Uganda and highly populated cities 1 3 new ASSA ABLOY Solution Ethiopia 6,2 centres 6,2 6,2 6,1 3 new legal entities 6,7 Ivory coast Kenya 6,5 Ghana 6,4 7,0 Congo-Kinshasa Tanzania 7,3 7,5 7,8 Angola Zambia Mozambique 3,7 South Africa Annual GDP growth, 2012-2016 (prognos), percent 4
ASSA ABLOY Code Handle DDL Door Closers EMEA High impact Products EMEA new products CLI Q SMARTAI R Aperio 5
Group sales in local currencies Jan-Mar 2012 5 1 + 3 9 2 8 + 7 1 3 + 1 7 1 + 5 2 + 4 5 + 4 Share of Group sales 2 0 1 2 YTD, % Year-to-date vs previous year, % 6
Organic growth index Recovery from recession I ndex 2 0 0 9 -2 0 1 2 ASSA ABLOY, excl. Cardo 110 Group -2 % 105 I ndex 1 0 0 = 3 1 / 1 2 2 0 0 8 100 95 90 85 Division I ndex EMEA -7% 80 2009 2010 2011 2012 Am ericas -16% Asia Pacific + 31% Global Tech + 10% ESD * ) + 3% * ) Entrance systems division including new acquired companies -12% 7
Sales growth, currency adjusted Sales MSEK Growth, % 2 0 1 2 Q1 + 2 2 % 46 000 20 Organic + 3 % 44 000 18 16 Acquired + 1 9 % 42 000 14 12 40 000 10 8 38 000 6 4 36 000 2 34 000 0 -2 32 000 -4 -6 30 000 -8 -10 28 000 -12 -14 26 000 -16 24 000 -18 2005 2006 2007 2008 2009 2010 2011 2012 Organic Growth Acquired Growth Sales in Fixed Currencies 8
Operating income (EBIT), MSEK 12-months Quarter 1 900 7 000 Run rate 6 ,9 0 2 MSEK ( 6 ,1 2 8 ) , + 1 3 % 6 800 1 800 6 600 1 700 6 400 6 200 1 600 6 000 1 500 5 800 5 600 1 400 5 400 1 300 5 200 1 200 5 000 4 800 1 100 4 600 1 000 4 400 4 200 900 4 000 800 3 800 700 3 600 2005 2006 2007 2008 2009 2010 2011 2012 Quarter Rolling 12-months * ) Excluding restructuring costs. 9
Operating margin (EBIT)* , % EBIT Margin 17,0 Long term target range ( average) 16,0 15,0 Run rate 2 0 1 2 1 5 .7 % ( 1 6 .5 ) 14,0 13,0 12,0 2005 2006 2007 2008 2009 2010 2011 2012 Quarter Rolling 12-months Q2 -Q4 2 0 1 2 Dilution Group -0 .2 % * ) Excluding restructuring costs. 10
Manufacturing footprint Status manufacturing footprint programs 2006-2011: – 45 factories closed to date, 23 to go – 50 factories converted to assembly, 25 to go – 25 offices closed, 4 to go Personnel reduction QTD 346p and total 6,243p 1,292 in further planned reductions 1,569 MSEK of the provision remains for all programs 11
Margin highlights Q1 2012 EBI T m argin 1 5 .3 % ( 1 5 .8 ) , -0 .5 % + Volume increase 1.5% , price 1.5% + Margin expansion 0.5% + Manufacturing footprint & efficiency improvements + Positive mix with growth in mature markets - Dilution from acquisitions by -1.0% 12
Acquisitions 2012 Fully active 6 acquisitions done so far in 2 0 1 2 Annualized sales 2 ,2 0 0 MSEK, + 5 ,3 % Major acquisitions Jan-Apr 2 0 1 2 : Albany, US Dynaco, BE Securistyle, UK Traka, UK Frameworks, USA 13
Traka plc Strong technology company Intelligent key cabinets Advanced locker systems Fleet managment solutions Sales of 140 MSEK, 40% export Accretive to EPS from start 14
Frameworks Manufacturing Inc Entrance to interior aluminum door, frame and window wall market Adds glaziers as additional distribution channel Complementary to our door business with good margins Total sales 110 MSEK Accretive to EPS from start 15
Division - EMEA SALES share of Market improved but hesitant Group total % Growth in Scandinavia, Finland, Benelux, UK, 31 Israel and Africa France, Germany and Eastern Europe are stable Southern Europe in continued decline Good leverage from volume increase EBI T % 19 Operating margin (EBIT) 18 17 + Volume 4% 16 = Material cost 15 14 + Footprint savings 13 2007 2008 2009 2010 2011 2012 - Dilution by 0.8% 16
Division - Americas SALES share of Stable sales development Group total % Good growth of high security, elmech and residential 21 Positive sales of mechanical locks and security doors Negative sales in Canada, Mexico and Brazil Improved margin from efficiency gains EBI T % Operating margin (EBIT) 22 21 + Volume 3% 20 = Material cost 19 + Efficiency improvement 18 2007 2008 2009 2010 2011 2012 18
Division - Asia Pacific SALES share of Strong growth in Korea and South East Asia Group total % including India 11 Weak growth in China Decline in Australia and New Zeeland Negative mix and Chinese cost pressure EBI T % 17 Operating margin (EBIT) 15 13 = Volume 3% 11 9 = Raw material 7 5 - Mix & cost pressure 2007 2008 2009 2010 2011 2012 20
Division - Global Technologies SALES HID share of Group total % – Good growth of Access control and secure issuance – Strong sales of Identification Technology 14 – Large project orders dilutes Hospitality – Good growth in all market regions – Several gains of important key accounts EBI T % Operating margin (EBIT) 19 18 + Volume 8% (13) 17 16 + Strong leverage from core business growth 15 14 - Dilution from large project orders 13 2007 2008 2009 2010 2011 2012 22
Division - Entrance Systems SALES share of Good growth of Besam, Crawford and FlexiForce Group total % Service sales in steady growth 23 Ditec declining due to southern Europe Albany and Dynaco consolidated in the quarter Sales + 130% and EBIT + 94% EBI T % Operating margin (EBIT) 19 18 + Volume 3% 17 16 - Dilution from acquisitions -2.7% 15 14 + Leverage from growth + 0.3% 13 12 2007 2008 2009 2010 2011 2012 24
Q1 Report 2012 Carolina Dybeck Happe CFO 26
Financial highlights Q1 2012 1st Quarter Twelve months MSEK 2011 2012 Change 2010 2011 Change Sales 8,699 10,839 +25% 36,823 41,786 +13% Whereof Organic growth +3% +4% Acquired growth +19% +17% FX-differences +149 +3% -2,309 -8% Operating income (EBIT) *) 1,377 1,655 +20% 6,046 6,624 +10% EBIT-margin (%) 15.8 15.3 16.4 15.9 Operating cash flow 448 483 +8% 6,285 6,080 -3% EPS (SEK) **) 2.52 3.10 +23% 10.89 12.30 +13% * ) Excluding restructuring items of 1,420 MSEK for Q4 and full year 2011 * * ) Excluding one-off items of 1,447 for Q4 and 1,016 MSEK for the full year 2011 27
Bridge Analysis – Jan-Mar 2012 2011 Organic Currency Acq/ Div 2012 MSEK Jan-Mar Jan-Mar 3% 3% 19% 25% Revenues 8,699 294 149 1,696 10,839 EBIT 1,377 92 19 167 1,655 % 15.8% 31.1% 12.9% 9.9% 15.3% Dilution / Accretion 0.5% 0.0% -1.0% 28
P&L – Components as % of sales 2 0 1 1 2 0 1 2 2 0 1 2 Q1 Q1 excluding Q1 acquisitions Direct material 32.9% 33.2% 32.7% Conversion costs 26.2% 25.4% 27.6% Gross Margin 40.9% 41.4% 39.7% S, G & A 25.1% 25.1% 24.4% EBIT 15.8% 16.3% 15.3% 29
Operating cash flow, MSEK Quarter 12 months Grow th 3 000 7 500 7 000 2 500 Recession 6 500 2 000 6 000 5 500 Grow th 1 500 5 000 1 000 4 500 4 000 500 3 500 0 3 000 2005 2006 2007 2008 2009 2010 2011 2012 Quarter Cash Rolling 12-months EBT Rolling 12 months 30
Gearing % and net debt MSEK Net Debt Gearing 30 000 120 Debt/ Equity 6 4 ( 1 0 3 ) 25 000 100 20 000 80 15 000 60 10 000 40 5 000 20 0 0 2005 2006 2007 2008 2009 2010 2011 2012 Net debt Gearing Net debt/ EBI TDA 2 .0 ( 3 .0 ) 31
Q1 Report 2012 Johan Molin President & CEO 32
Conclusions Q1 2012 Strong total growth by 25% with 3% organic Good development in mature markets – Many new products and projects wins Slower emerging markets Good evolution in acquired companies Footprint program gives good savings Strong profit improvement 33
Q&A 34
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