Q3 Report 2013 Johan Molin President & CEO 1 Financial - PowerPoint PPT Presentation

Q3 Report 2013 Johan Molin President & CEO 1

Financial highlights Q3 2013  Good Grow th in all parts except Europe – Strong growth in Americas, APAC and Global Tech – EMEA bottoming – ESD slightly negative – Important gains of efficiency and savings – Preparation for new Manufacturing footprint  Sales 1 2 ,1 3 1 MSEK + 5 % + 3% organic, + 3% acquired growth, -1% currency  EBI T 2 ,0 9 0 MSEK + 8 % Currency effect -56 MSEK  EPS 3 .9 8 SEK + 1 3 % Forecasted tax rate 25% 2

Financial highlights Jan-Sep 2013  Good perform ance in a tough m arket  Sales 3 5 ,2 3 9 MSEK + 2 % + 2% organic, + 4% acquired growth, -4% currency  EBI T 5 ,7 2 2 MSEK + 5 % Currency effect -215 MSEK  EPS 1 0 .7 6 SEK + 6 % Forecasted tax rate 25% 3

Market highlights  Strong sales of new SE-reader – Multi technology, virtual keys, speed of reading  Most innovative product awards ASIS, USA – 4 out of 10 first prices out of 600 exhibitors  Success for Nexgen e-cylinder technology – Several large orders for vending and parking  Yale DDL chosen for home automation – Broad European launch with Verisure 4

Group sales in local currencies Jan-Sep 2013 4 3 -3 3 2 + 1 7 1 7 + 1 1 1 + 4 2 + 1 2 5 + 6 Share of Group sales 2 0 1 3 YTD, % Year-to-date vs previous year, % 5

Sales growth, currency adjusted Sales MSEK Growth, % 2 0 1 3 Q3 + 6 % 48 000 24 Organic + 3 % 46 000 21 Acquired + 3 % 44 000 18 15 42 000 12 40 000 9 38 000 6 36 000 3 0 34 000 -3 32 000 -6 30 000 -9 28 000 -12 26 000 -15 2006 2007 2008 2009 2010 2011 2012 2013 Organic Growth Acquired Growth Sales in Fixed Currencies 6

Operating income (EBIT), MSEK Quarter 12-months 2 200 8 000 2 100 Run rate 7 ,7 5 1 MSEK ( 7 ,3 5 3 ) + 5 % 7 500 2 000 1 900 7 000 1 800 6 500 1 700 1 600 6 000 1 500 5 500 1 400 1 300 5 000 1 200 4 500 1 100 1 000 4 000 900 800 3 500 2006 2007 2008 2009 2010 2011 2012 2013 Quarter Rolling 12-months 7

Operating margin (EBIT)* , % EBIT Margin Run rate 2 0 1 3 1 6 .3 % ( 1 5 .8 ) 17,0 Long term target range ( average) 16,0 15,0 14,0 13,0 12,0 2006 2007 2008 2009 2010 2011 2012 2013 Quarter Rolling 12-months 2 0 1 3 Dilution QTD 0 .1 % YTD 0 .0 % * ) Excluding restructuring costs. 8

Manufacturing footprint  Status manufacturing footprint programs 2006-2011: – 56 factories closed to date, 12 to go – 68 factories converted to assembly, 7 to go – 28 offices closed, 1 to go  Personal reduction 7,084p and 451p remains  New MFP program planned in Q4 – Closure of 30 entities – Payback of approx. 3 years – Cost estimate 1,000 MSEK 9

Margin highlights Q3 2013 EBI T m argin 1 7 .2 % ( 1 6 .7 ) 0 .5 % + Volume increase + 2% , price + 1% + Margin expansion 0.5% = Organic growth + Manufacturing footprint + Capacity adjustments - Dilution from Currency -0.2% + Acquisitions + 0.1% 10

Acquisitions 2013  Fully active pipeline  1 0 acquisitions done in 2 0 1 3  Annualized sales 2 ,3 0 0 MSEK  Added sales 5 % 11

Ameristar, USA  Turnover of 1,100 MSEK with 650 employees  The leading US manufacturer of perimeter security solutions  Complements the ASSA ABLOY offering of security solutions in the American market  Reinforces the market leadership in North America  Accretive to EPS 12

Mercor, Poland  Turnover of 370 MSEK with 550 employees  Leading Polish manufacturer of security and fire doors  Offers complete door opening solutions  Will significantly reinforce the market position in Eastern Europe  Accretive to EPS 13

Xinmao, China  Turnover of 190 MSEK with 360 employees  Market leader in Heilongjiang of fire rated & security doors  Supply of total hardware package & installation  Good synergies on products and market coverage  Accretive to EPS 14

Huasheng, China  Turnover of 210 MSEK with 460 employees  Market leader in Shandong of fire rated & security doors  Supply of total hardware package & installation  Good synergies on products and market coverage  Accretive to EPS 15

Division - EMEA SALES  Bottoming with slight growth share of Group total %  Growth in Scandinavia, Finland, Germany, Italy, Africa and Eastern Europe 27  Stable in the UK  Decline in France, Holland, Iberia and Israel  JPM factory France closed EBI T %  Operating margin (EBIT) 19 18 = Organic 1% 17 16 - Material cost 15 + Footprint savings 14 13 = SG&A 2008 2009 2010 2011 2012 2013 16

Division - Americas SALES share of  Strong growth in AHW, Electromechanical, Residential Group total % and South America 21  Growth in Doors and High security  Slightly negative in Mexico and Canada  Continued investments in R&D and front end  Operating margin (EBIT) EBI T % 22 + Organic + 7% 21 + Material cost 20 19 + Efficiency improvement 18 - R&D and front end 2008 2009 2010 2011 2012 2013 18

Division - Asia Pacific SALES share of  Strong growth in Australia, New Zealand and Korea Group total %  Good growth in China 14  Decline in South East Asia  Profit improvement coming from overall volume growth and cost control in China EBI T %  17 Operating margin (EBIT) 15 = Organic + 6% 13 11 + Material cost 9 7 + Efficiency in China 5 - Mix & cost pressure 2008 2009 2010 2011 2012 2013 20

Division - Global Technologies SALES  HID share of Group total % – Good growth of Access control and Secure Issuance – Strong growth in Project sales 14 – Negative in Government ID and stable in IDT – Strong profit improvement  Hospitality – Good growth from the renovation market – Solid profit development EBI T % 20 19  Operating margin (EBIT) 18 17 + Organic + 7% 16 15 + Good cost control 14 13 + All parts doing well on margin 2008 2009 2010 2011 2012 2013 22

Division - Entrance Systems SALES  Europe weak while Americas & Asia are growing share of Group total %  Stable sales in Door automatics and Industrial doors 24  Negative sales of High speed doors and dockings  Continued decline in Ditec due to weak southern Europe  Sales + 9% and EBIT + 10% EBI T % 19  Operating margin (EBIT) 18 17 16 - Organic -1% 15 14 - Dilution & currency -0.4% 13 - Good product cost reductions 12 2008 2009 2010 2011 2012 2013 - Strong efficiency improvements 24

Q3 Report 2013 Carolina Dybeck Happe CFO 26

Financial highlights Q3 2013 3rd Quarter Nine months MSEK 2012 2013 Change 2012 2013 Change Sales 11,545 12,131 5% 34,380 35,239 +2% Whereof Organic growth +3% +2% Acquired growth +3% +4% FX-differences -133 -1% -1,021 -4% Operating income (EBIT) 1,932 2,090 +8% 5,471 5,722 +5% EBIT-margin (%) 16.7 17.2 15.9 16.2 Operating cash flow 1,967 2,175 +11% 3,885 4,262 +10% EPS (SEK)* 3.53 3.98 +13% 10.18 10.76 +6% * ) excluding non comparable items 27

Bridge Analysis – Jul-Sep 2013 2012 Organic Currency Acq/ Div 2013 MSEK Jul-Sep Jul-Sep 3% -1% 3% 5% Revenues 11,545 362 -133 358 12,131 EBIT 1,932 136 -56 78 2,090 % 16.7% 37.5% 41.9% 21.8% 17.2% Dilution / Accretion 0.6% -0.2% 0.1% 28

P&L – Components as % of sales 2 0 1 2 2 0 1 3 2 0 1 3 Q3 Q3 excluding Q3 acquisitions  Direct material 35.1% 34.9% 35.2%  Conversion costs 25.0% 25.0% 24.9%  Gross Margin 39.9% 40.1% 39.9%  S, G & A 23.2% 23.0% 22.7%  EBIT 16.7% 17.1% 17.2% 29

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 2006 2007 2008 2009 2010 2011 2012 2013 Quarter Cash Rolling 12-months EBT Rolling 12 months 30

Gearing % and net debt MSEK Gearing Net Debt 30 000 120 Debt/ Equity 6 3 ( 7 2 ) 25 000 100 20 000 80 15 000 60 10 000 40 5 000 20 0 0 2006 2007 2008 2009 2010 2011 2012 2013 Net debt Gearing Net debt/ EBI TDA 2 .0 ( 2 .1 ) * ) 2006-2011 Not restated for changed pension accounting principles. 31

Earnings per share, SEK 12-months Quarter SEK 15,00 4,00 14,00 3,50 13,00 3,00 12,00 11,00 2,50 10,00 2,00 9,00 1,50 8,00 1,00 7,00 0,50 6,00 0,00 5,00 2006 2007 2008 2009 2010 2011 2012 2013 Quarter Rolling 12-months * ) Excluding restructuring costs. * * ) 2006-2011 Not restated for changed pension accounting principles . 32

Q3 Report 2013 Johan Molin President & CEO 33

Conclusions Q3 2013  Good growth in all parts except Europe  Strong growth in Americas, APAC and Global Tech  EMEA bottoming and ESD slightly negative  Strong efficiency improvements supports profit  Preparation for new Manufacturing Footprint  Strong cash flow and record EBIT of 2,090 MSEK + 8% 34

Q&A 35