Q4 Report 2012 Johan Molin President & CEO 1 Financial - PowerPoint PPT Presentation

Q4 Report 2012 Johan Molin President & CEO 1

Financial highlights Q4 2012  Good perform ance in a tough m arket – Good growth in Americas and improvement in the Pacific – Stable situation in EMEA, APAC and Global Tech – ESD suffering from weak Europe – Record profit and cash flow  Sales 1 2 ,2 3 9 MSEK + 4 % 0% organic, + 7% acquired growth, -3% currency  EBI T 2 ,0 3 0 MSEK + 8 % Currency effect -41 MSEK  EPS 3 .7 4 SEK + 9 % Underlying tax rate 24% 2

Financial highlights Jan-Dec 2012  A good year in a challenging m arket  Sales 4 6 ,6 1 9 MSEK + 1 2 % + 2% organic, + 9% acquired growth, + 1% currency  EBI T 7 ,5 0 1 MSEK + 1 3 % Currency effect 37 MSEK  EPS 1 3 .8 4 SEK + 1 3 % Underlying tax rate 24% 3

Market highlights  Strong demand for SE readers with SIO in Physical access  Digital door locks sees strong growth in the Americas  New industrial door range for distribution in ESD  New modular lock range for Europe 4

Modular lock range  Platform based mechanical & elmech locks for commercial applications  Sustainability ECO Design, “Sustainable Design” and EPD  20 new patents  Branded ASSA ABLOY , like the success of ASSA ABLOY door closers 5

Group sales in local currencies Jan-Dec 2012 Emerging markets 25% of sales despite acquisitions in Europe 4 7 + 1 1 2 9 + 1 2 1 6 + 9 1 + 1 6 2 + 9 5 + 1 Share of Group sales 2 0 1 2 YTD, % Year-to-date vs previous year, % 6

Organic growth index Recovery from recession Group + 0 % Division I ndex EMEA -7% Am ericas -13% Asia Pacific + 33% Global Tech + 14% ESD + 0% 7

Sales growth, currency adjusted Sales MSEK Growth, % 2 0 1 2 Q4 + 7 % 48 000 24 Organic + 0 % 46 000 21 44 000 18 Acquired + 7 % 15 42 000 12 40 000 9 38 000 6 36 000 3 34 000 0 -3 32 000 -6 30 000 -9 28 000 -12 26 000 -15 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 2 100 8 000 Run rate 7 ,5 0 1 MSEK ( 6 ,6 2 4 ) + 1 3 % 2 000 7 500 1 900 1 800 7 000 1 700 6 500 1 600 1 500 6 000 1 400 5 500 1 300 1 200 5 000 1 100 4 500 1 000 900 4 000 800 700 3 500 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 6 .1 % ( 1 5 .9 ) 14,0 13,0 12,0 2005 2006 2007 2008 2009 2010 2011 2012 Quarter Rolling 12-months Q4 2 0 1 2 Dilution Q1 2 0 1 3 effect Easter -2 days QTD + 0 .1 % YTD -0 .2 % * ) Excluding restructuring costs. 10

Manufacturing footprint  Status manufacturing footprint programs 2006-2011: – 53 factories closed to date, 15 to go – 56 factories converted to assembly, 19 to go – 28 offices closed, 1 to go  Personnel reduction QTD 301p and total 6,765p  770p in further planned reductions  1,068 MSEK of the provision remains for all programs 11

Margin highlights Q4 2012 EBI T m argin 1 6 .6 % ( 1 6 .0 ) + 0 .6 % + Volume increase -1% , price + 1% + Margin expansion from organic growth 0.5% - Organic growth 0% + Manufacturing footprint + Capacity adjustments + Raw material + Contribution from acquisitions + 0.1% 12

Acquisitions 2012  Fully active pipeline  1 3 acquisitions done in 2 0 1 2  Annualized sales 4 ,5 0 0 MSEK + 1 0 .8 %  Major acquisitions Jan-Dec 2 0 1 2 :  Albany, US  Dynaco, BE  Securistyle, UK  Sanhe Metal, China  Helton, Canada  Guoqiang, China  4Front, USA 13

4Front, USA  US Market leader in docking equipment with sales of 1,100 MSEK  Adds strong distribution network across North America  Leading well known brands and products with 125 active patents  Offers a manufacturing base for production in North America  Single digit EBIT but accretive to EPS in 2013 14

Division - EMEA SALES share of  Weak December due to few working days Group total %  Growth in UK, France, Israel, Middle east and 28 Eastern Europe  Slight decline in Scandinavia, Finland, Germany and Spain  Negative sales in Italy and Benelux  Good profit and cash flow EBI T % 19 18  Operating margin (EBIT) 17 16 - Organic -1% 15 14 = Material cost 13 + Footprint savings 2007 2008 2009 2010 2011 2012 15

Division - Americas SALES share of  Strong growth in Residential, Electromechanical and Group total % South America 19  Growth in AHW, Doors, High security and Mexico  Decline in Canada  Improved margin from volume and efficiency gains  Operating margin (EBIT) EBI T% + Organic + 5% 22 + Material cost 21 20 + Efficiency improvement 19 18 17 2007 2008 2009 2010 2011 2012 17

Division - Asia Pacific SALES share of  Return of growth in the Pacific and strong growth of Group total % Korea 16  Low growth in China and slowing South East Asia  Workforce in China reduced by 1,400p to mitigate the high salary inflation  Operating margin (EBIT) EBI T % - Organic + 2% 17 - Mix & cost pressure 14 + Efficiency in China 11 + Material cost 8 5 2007 2008 2009 2010 2011 2012 19

Division - Global Technologies SALES  HID share of Group total % – Strong growth of Logical access and IDT – Good growth of Access control and Secure Issuance 12 – Flat in Government ID and decline in project sales – Strong profit improvement  Hospitality – Continued good growth from the renovation market – Strong profit improvement  Operating margin (EBIT) EBI T% 20 + Organic + 2% 18 + Leverage from core business growth 16 14 + Less project sales 12 10 2007 2008 2009 2010 2011 2012 21

Division - Entrance Systems SALES share of  Decline in Southern Europe Group total %  Good growth of Albany, Dynaco 25  Slightly neg growth for industrial and pedestrian doors  Continued decline of Ditec and Residential doors  Integration work develops very well  Sales + 14% and EBIT + 15% EBI T% 20  Operating margin (EBIT) 18 - Organic -5% 16 14 + Raw material 12 + Efficiency gains from integration works 10 2007 2008 2009 2010 2011 2012 23

Q4 Report 2012 Carolina Dybeck Happe CFO 25

Financial highlights Q4 2012 4th Quarter Twelve months MSEK 2011 2012 Change 2011 2012 Change Sales 11,744 12,239 +4% 41,786 46,619 +12% Whereof Organic growth 0% +2% Acquired growth +7% +9% FX-differences -212 -3% 290 1% Operating income (EBIT) 1,881 2,030 +8% 6,624 7,501 +13% EBIT-margin (%) 16.0 16.6 15.9 16.1 Operating cash flow 2,794 3,160 +13% 6,080 7,044 +16% EPS (SEK)* 3.43 3.74 +9% 12.30 13.84 +13% * excluding non comparable items 26

Bridge Analysis – Oct-Dec 2012 2011 Organic Currency Acq/ Div 2012 MSEK Oct-Dec Oct-Dec 0% -3% 7% 4% Revenues 11,744 -28 -212 736 12,239 EBIT 1,881 51 -41 138 2,030 % 16.0% - 19.2% 18.8% 16.6% Dilution / Accretion 0.5% 0.0% 0.1% 27

P&L – Components as % of sales 2 0 1 1 2 0 1 2 2 0 1 2 FY FY excluding FY acquisitions  Direct material 35.1% 34.7% 34.6%  Conversion costs 25.9% 25.4% 25.9%  Gross Margin 39.0% 39.9% 39.5%  S, G & A 23.1% 23.6% 23.4%  EBIT 15.9% 16.3% 16.1% 28

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 2005 2006 2007 2008 2009 2010 2011 2012 Quarter Cash Rolling 12-months EBT Rolling 12 months 29

Gearing % and net debt MSEK Net Debt Gearing 30 000 120 Debt/ Equity 5 5 ( 6 0 ) 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 1 .7 ( 1 .9 ) 30

Earnings per share SEK 16,00 13,84 Since 2 0 0 5 EPS + 1 2 0 % 14,00 Dividend 2 0 1 3 : 5 .1 0 SEK ( 4 .5 0 ) 12,00 10,00 8,00 6,00 4,00 2,00 0,00 2005 2006 2007 2008 2009 2010 2011 2012 * ) Excluding restructuring costs. 31

Q4 Report 2012 Johan Molin President & CEO 32

Conclusions Q4 2012  Total growth by 4% with 0% organic  Good growth in Americas  Stable situation in EMEA, APAC and Global Tech  Strong efficiency improvements and raw material supports profit  Record EBIT of 2,030 MSEK, improved by 8%  Record cash flow at 3,160 MSEK 33

Q&A 34