Q1 Report 2014 Johan Molin President & CEO 1 Financial - PowerPoint PPT Presentation

Q1 Report 2014 Johan Molin President & CEO 1

Financial highlights Q1 2014  Continued good developm ent – Strong growth in EMEA and good growth in ESD – Growth in Americas, Global Tech and APAC – Continued gains of efficiency and savings – Easter effect in Europe and severe winter in the US  Sales 1 2 ,3 0 5 MSEK + 1 3 % 4% organic, 8% acquired growth, 1% currency  EBI T 1 ,8 5 7 MSEK + 1 2 % Currency effect 13 MSEK  EPS 3 .4 1 SEK + 1 1 % Underlying tax rate 26% 2

Market highlights  Shift to e-cylinders for utilities and authorities – Cloud services, high reliability, key control and increased flexibility drives demand  Shift of locking technology in hotel market – RFID locks with virtual keys increasingly popular  Walmart service contract – 1,660 stores in 11 states, driving service & equip sales  New Innovation awards at ISC west – Best in Locks/ Safes/ Hardware – Best in Access Control Products - Wireless 3

Group sales in local currencies Jan-Mar 2014 Em erging m arkets 2 2 % of sales 4 5 + 7 3 5 + 2 3 1 3 + 2 1 + 2 2 2 + 1 5 4 + 9 Share of Group sales 2 0 1 4 YTD, % Year-to-date vs previous year, % 4

Sales growth, currency adjusted Sales MSEK Growth, % 2 0 1 4 Q1 + 1 2 % 52 000 24 Organic + 4 % 21 49 000 Acquired + 8 % 18 46 000 15 12 43 000 9 6 40 000 3 37 000 0 -3 34 000 -6 -9 31 000 -12 28 000 -15 2007 2008 2009 2010 2011 2012 2013 2014 Organic Growth Acquired Growth Sales in Fixed Currencies 5

Operating income (EBIT* ), MSEK 12-months Quarter 2 300 8 500 Run rate 8 ,1 1 8 MSEK ( 7 ,5 0 9 ) + 8 % 2 100 7 500 1 900 1 700 6 500 1 500 1 300 5 500 1 100 900 4 500 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months 6

Operating margin (EBIT), % EBIT Margin Run rate 2 0 1 4 1 6 .3 % ( 1 6 .1 ) 17,0 Long term target range ( average) 16,0 15,0 14,0 13,0 12,0 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months 2 0 1 4 Dilution Q1 -0 .5 % 2 0 1 4 FC -0 .4 % 7

Manufacturing footprint  Status manufacturing footprint programs 2006-2013: – 57 factories closed to date, 21 to go – 70 factories converted to assembly, 19 to go – 28 offices closed, 19 to go  Personal reduction QTD 123p and total 8,481p  1,503p in further planned reductions  1,279 MSEK of the provision remains for all programs 8

Margin highlights Q1 2014 EBI T m argin 1 5 .1 % ( 1 5 .3 ) -0 .2 % + Volume increase + 3% , price + 1% + Margin decrease -0.2% + Organic growth + Manufacturing footprint + Efficiency improvements - Acquisitions -0.5% 9

Acquisitions 2014  Fully active pipeline  4 new acquisitions in 2 0 1 4  Annualized sales 4 0 0 MSEK  Com pleted acquisitions 2 0 1 4  Lumidigm  Unilock  Safeguard  Traka 10

Safeguard, Norway  Turnover of 240 MSEK with 110 employees  Strong presense in Oslo and oil industry  Good fit with ASSA ABLOY locksmith chain  Accretive to EPS 11

Unilock, Korea  Turnover of 60 MSEK with 30 employees  Adds product range of Digital Cabinet Locks  Complements existing business in Korea and China  Technology gives access to US and European markets  Accretive to EPS 12

Lumidigm, USA  Turnover of 160 MSEK with 33 employees  Authentication based on advanced fingerprint biometrics  Utilizes multispectral imaging technology  Unique patented technology  Neutral to EPS 13

Division - EMEA SALES  Strong growth in Scandinavia, Germany, Africa and share of Group total % Eastern Europe  Good growth UK, Benelux, France and Iberia 28  Flat in Italy and Finland and slight decline in Israel  Investment in front-end and R&D  Positive Easter effect EBI T %  Operating margin (EBIT) 19 18 + Organic 5% 17 16 + Footprint savings 15 - Careful investments 14 13 - Dilution (-0.3% ) 2009 2010 2011 2012 2013 2014 14

Division - Americas SALES share of  Strong growth in Residential and Latin America Group total %  Growth in Doors and Electromechanical 22  Flat in AHW and decline in High security and Canada  Good efficiency improvements  Tough winter EBI T %  Operating margin (EBIT) 22 + Organic 2% 21 20 + Efficiency improvements 19 - Currency & dilution (-0.4% ) 18 2009 2010 2011 2012 2013 2014 16

Division - Asia Pacific SALES share of  Strong growth in Australia and New Zealand Group total %  Growth in China and Korea 11  Decline in South East Asia  Strong impact from currencies (-0.9% )  Continued outsourcing in China EBI T %  17 Operating margin (EBIT) 15 = Organic 3% 13 11 + Efficiency in China 9 7 - Cost pressure in China 5 2009 2010 2011 2012 2013 2014 - Currency (-0.9% ) 18

Division - Global Technologies SALES  HID share of Group total % – Good growth in IDT – Growth in IAM (Identity and access management) 12 – Weak Gov ID and Project sales – Consolidation of North American operations to Austin  Hospitality – Continued strong growth – Good profit development EBI T % 20 19  Operating margin (EBIT) 18 17 + Organic 3% 16 15 + Currency gain (+ 0.6% ) 14 13 - Dilution (-0.4% ) 2009 2010 2011 2012 2013 2014 20

Division - Entrance Systems SALES  Strong growth in Industrial Doors, High Speed Doors share of Group total % and Flexiforce  Growth in Door automatics, US dockings and US 27 industrial doors  Slightly negative EU residential and Ditec  Consolidation develops well  Rapid growth + 23% , EBIT + 16% EBI T % 18 17  Operating margin (EBIT) 16 15 + Organic 4% 14 13 + Good efficiency improvements 12 11 + Currency (+ 0.3% ) 2009 2010 2011 2012 2013 2014 - Dilution (-1.4% ) 22

Q1 Report 2014 Carolina Dybeck Happe CFO 24

Financial highlights Q1 2014 1st Quarter Twelve months MSEK 2013 2014 Change 2012 2013 Change Sales 10,868 12,305 +13% 46,619 48,481 +4% Whereof Organic growth +4% +2% Acquired growth +8% +4% FX-differences +109 +1% -1,156 -2% Operating income (EBIT)* 1,662 1,857 +12% 7,501 7,923 +5% EBIT-margin (%) )* 15.3 15.1 16.1 16.3 Operating cash flow 498 557 +12% 7,044 6,803 -3% EPS (SEK)* 3.07 3.41 +11% 13.97 14.84 +6% * ) Excluding restructuring items of 1,000 MSEK for the full year 2013. 25

Bridge Analysis – Jan-Mar 2014 2013 Organic Currency Acq/ Div 2014 MSEK Jan-Mar Jan-Mar 4% 1% 8% 13% Revenues 10,868 394 109 933 12,305 EBIT 1,662 97 13 84 1,857 % 15.3% 24.6% 12.2% 9.0% 15.1% Dilution / Accretion 0.3% 0.0% -0.5% 26

P&L – Components as % of sales Jan – Mar 2014 2 0 1 3 2 0 1 4 2 0 1 4 Q1 Q1 excluding Q1 acquisitions  Direct material 32.8% 33.4% 34.6%  Conversion costs 27.1% 26.9% 26.5%  Gross Margin 40.1% 39.7% 38.9%  S, G & A 24.8% 24.1% 23.8%  EBIT 15.3% 15.6% 15.1% 27

Operating cash flow, MSEK Quarter 12 months 3 500 8 000 7 500 3 000 7 000 2 500 6 500 6 000 2 000 5 500 1 500 5 000 4 500 1 000 4 000 500 3 500 0 3 000 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Cash Rolling 12-months EBT Rolling 12 months 28

Gearing % and net debt MSEK Gearing Net Debt 30 000 120 Debt/ Equity 25 000 7 2 ( 5 7 ) 100 20 000 80 15 000 60 10 000 40 5 000 20 0 0 2007 2008 2009 2010 2011 2012 2013 2014 Net debt Gearing Net debt/ EBI TDA 2 .3 ( 1 .8 ) * ) 2007-2011 Not restated for changed pension accounting principles. 29

Earnings per share, SEK 12-months Quarter SEK Since 2 0 0 6 EPS + 9 0 % 16,00 Dividend 2 0 1 4 : 5 .7 0 SEK ( 5 .1 0 ) 4,00 15,00 3,50 14,00 3,00 13,00 12,00 2,50 11,00 2,00 10,00 1,50 9,00 1,00 8,00 0,50 7,00 0,00 6,00 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months * ) Excluding restructuring costs of 1,000 MSEK in Q4 and full year 2013. * * ) 2007-2011 Not restated for changed pension accounting principles. 30

Q1 Report 2014 Johan Molin President & CEO 31

Conclusions Q1 2014  Sales growth by 13% with 4% organic – Europe with good growth – Weak North America – South America and Africa with strong growth  Dilution from acquisitions (-0.5% )  Efficiency improvements supports profit  EBIT improvement of 12% to 1,857 MSEK 32

Q&A 33