Q2 Report 2015 Johan Molin President and CEO Financial highlights - PowerPoint PPT Presentation

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 developm ent – Strong growth in Global Tech – Good growth in Americas, EMEA and Entrance – Negative in APAC due to weak Chinese market  Sales 1 7 ,0 8 2 MSEK + 2 2 % 4 % organic, 3% acquired growth, 15% currency  EBI T 2 ,7 4 2 MSEK + 2 4 % Currency effect 302 MSEK  EPS 1 .7 0 SEK + 2 3 % Underlying tax rate 26% 2

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 3 2 ,3 3 4 MSEK + 2 3 % 4 % organic, 3% acquired growth, 16% currency  EBI T 5 ,0 7 1 MSEK + 2 4 % Currency effect 551 MSEK  EPS 3 .1 5 SEK + 2 5 % Underlying tax rate 26% 3

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 4

Group sales in local currencies Jan-Jun 2015 Em erging m arkets 2 5 % ( 2 3 ) of sales 3 8 + 4 3 9 + 8 1 6 + 1 0 1 + 5 2 + 3 1 4 + 8 Share of Group sales 2 0 1 5 YTD, % Year-to-date vs previous year, % 5

Sales growth, currency adjusted Sales MSEK Growth % 2 0 1 5 Q2 + 7 % 67 000 Organic + 4 % 27 64 000 24 Acquired + 3 % 61 000 21 58 000 18 15 55 000 12 52 000 9 49 000 6 46 000 3 43 000 0 -3 40 000 -6 37 000 -9 34 000 -12 31 000 -15 2008 2009 2010 2011 2012 2013 2014 2015 Organic Gr owth Acquired Growth Sales in Fixed Curr encies 6

Operating income (EBIT), MSEK Quarter 12-m onths Run rate 1 0 ,2 5 1 MSEK ( 8 ,3 6 8 ) + 2 3 % 2 900 10 500 10 000 2 700 9 500 2 500 9 000 2 300 8 500 2 100 8 000 1 900 7 500 7 000 1 700 6 500 1 500 6 000 1 300 5 500 1 100 5 000 900 4 500 2008 2009 2010 2011 2012 2013 2014 2015 Quarter Rolling 12-mont hs 7

Operating margin (EBIT), % EBI T Margin Run rate 2 0 1 5 1 6 .3 % ( 1 6 .2 ) 17 16 15 14 13 12 2008 2009 2010 2011 2012 2013 2014 2015 Quarter Rolling 12- m onths 2 0 1 5 Dilution Q2 -0 .1 % 2 0 1 5 -0 .1 % 8

Manufacturing footprint  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 9

Margin highlights Q2 2015 EBI T m argin 1 6 .1 % ( 1 5 .9 ) + 0 .2 % + Volume increase 2.5% , price 1.5% + Margin increase + 0.2% + Organic growth + Manufacturing footprint - Currency -0.1% - Acquisitions -0.1% 1 0

Acquisitions 2015  Fully active pipeline  7 acquisitions done in 2015  Annualized sales 1 400 MSEK  Added sales 3.0% 1 1

L-Door, Belgium  Turnover of 175 MSEK with 120 employees  Domestic market leader in sectional doors  Strong service organisation  Excellent market coverage  Accretive to EPS 1 2

Flexim, Finland  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 1 3

Prometal, UAE and Saudi Arabia  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 1 4

Division - EMEA SALES  Strong growth in Scandinavia, Finland, Eastern Europe share of Group total % and Africa  Good growth in Germany and Iberia 23%  Flat in UK, Italy and Israel  Negative in Benelux and France  No inflation makes currency compensation difficult EBI T % 19  Operating margin (EBIT) 18 17 + Organic + 5% 16 15 + Savings 14 13 - Dilution & Currency -0.6% 2010 2011 2012 2013 2014 2015 1 5

Division - Americas SALES share of  Strong growth in AHW, Residential, Mexico and South Group total % America 20  23% Growth in El-mech, Doors and Canada  Stable trend in High security  Strong demand from Home Automation EBI T %  Operating margin (EBIT) 23 22 + Organic + 5% 21 20 + Efficiency 19 - Currency & Dilution -0.4% 18 2010 2011 2012 2013 2014 2015 1 7

Division - Asia Pacific SALES  share of Strong growth in Australia, South Asia and North Asia Group total %  Growth in New Zealand 14 15%  Continued decline in China – Efficiency measures implemented in China  Operating margin (EBIT) EBI T % 18 - Organic -2% 16 + Personnel reduction in China -9% , 14 12 + Positive sales mix 10 - Currency & Dilution -0.4% 8 2010 2011 2012 2013 2014 2015 1 9

Division - Global Technologies SALES  HID share of Group total % – Strong growth in IAM (Identity and Access management), IDT (inlays) and Project sales 13 14% – Slight decline in Gov-Id – Promising development of ID-Assurance – Investment in R&D  Hospitality – Strong growth – Strong profit EBI T % 21 20  19 Operating margin (EBIT) 18 17 + Organic + 10% 16 15 - Negative mix 14 2010 2011 2012 2013 2014 2015 - Currency & Dilution -0.7% 2 1

Division - Entrance Systems SALES  Strong growth in High Speed Doors, Flexiforce, Amarr share of Group total % and 4Front  Good growth in Door Automatics 28 25%  Flat in Industrial EU and Ditec and decline in Residential EU  Improving efficiency EBI T %  Operating margin (EBIT) 18 17 + Organic + 5% 16 15 + Consolidation effects 14 13 12 - Currency -0.4% 11 2010 2011 2012 2013 2014 2015 2 3

ASSA ABLOY is the global leader in door opening ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs solutions, dedicated to satisfying end-user needs for security, safety and convenience for security, safety and convenience Q2 Report 2015 Carolina Dybeck Happe CFO

Financial highlights Q2 2015 2nd Quarter Six months 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% 2 6

Bridge Analysis – Apr-Jun 2015 2014 Organic Currency Acq/ Div 2015 MSEK Apr-Jun 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% 2 7

P&L Components as % of sales Apr – Jun 2015 2 0 1 4 2 0 1 5 2 0 1 5 Q2 Q2 excl Q2 acquisitions 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% 2 8

Operating cash flow, MSEK 12-m onths Quarter 4 500 10 000 9 500 4 000 9 000 3 500 8 500 3 000 8 000 2 500 7 500 7 000 2 000 6 500 1 500 6 000 1 000 5 500 500 5 000 0 4 500 2008 2009 2010 2011 2012 2013 2014 2015 Quarter Cash Rolling 12-months EBT Rolling 12 months 2 9

Gearing % and net debt MSEK Net Debt Gearing 30 000 120 Debt/ Equity 7 0 ( 7 6 ) 25 000 100 20 000 80 15 000 60 10 000 40 5 000 20 0 0 2008 2009 2010 2011 2012 2013 2014 2015 Net debt Gearing Net debt/ EBI TDA 2 .3 ( 2 .4 ) * ) 2008-2011 Not restated for changed pension accounting principles. 30

Earnings per share, SEK Quarter SEK 1 2 -m onths 1.80 6.50 Stock split 2 0 1 5 3 :1 6.00 1.60 5.50 1.40 5.00 1.20 4.50 4.00 1.00 3.50 0.80 3.00 0.60 2.50 0.40 2.00 2008 2009 2010 2011 2012 2013 2014 2015 Quarter Rolling 12-m ont hs Restated for Stock split 3: 1 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% 3 3

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