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Q4 Report 2014 Johan Molin President & CEO 1 Financial - PowerPoint PPT Presentation

Q4 Report 2014 Johan Molin President & CEO 1 Financial highlights Q4 2014 Strong ending of the year Strong growth in Americas, Global Tech and ESD Growth in EMEA Decline in APAC due to strict credit policy and weak market


  1. Q4 Report 2014 Johan Molin President & CEO 1

  2. Financial highlights Q4 2014  Strong ending of the year – Strong growth in Americas, Global Tech and ESD – Growth in EMEA – Decline in APAC due to strict credit policy and weak market in China – Strong cash flow  Sales 1 5 ,8 4 7 MSEK + 2 0 % 3 % organic, 8% acquired growth, 9% currency  EBI T 2 ,6 8 1 MSEK + 2 2 % Currency effect 209 MSEK  EPS 5 .1 0 SEK + 2 5 % Underlying tax rate 26% 2

  3. Financial highlights Jan-Dec 2014  A very solid year w ith strong continued progress – US market turning strong – Europe divided – Emerging markets slowing, especially China in Q4 – Big success from innovative products – Good contribution from acquisitions  Sales 5 6 ,8 4 3 MSEK + 1 7 % 3% organic, 9% acquired growth, 5% currency  EBI T 9 ,2 5 7 MSEK + 1 7 % Currency effect 349 MSEK  EPS 1 7 .3 8 SEK + 1 7 % Underlying tax rate 26% 3

  4. Market highlights  Strong progress of Government ID – New orders; Ireland, Saudi Arabia, Angola – First National ID card in EU based on E-passport  Strong demand in the US for home automation – Home automation drives Digital Door Lock sales  Starwood mobile keys show good progress – 150 first hotels under installation  Sustainability in good progress – New products create sustainable total door solutions – Good progress of KPIs in manufacturing 4

  5. Group sales in local currencies Jan-Dec 2014 Em erging m arkets 2 5 % of sales 4 1 + 6 3 6 + 2 6 1 6 + 3 1 + 1 7 2 + 2 1 4 + 7 Share of Group sales 2 0 1 4 YTD, % Year-to-date vs previous year, % 5

  6. Sales growth, currency adjusted 2 0 1 4 Q4 + 1 1 % Sales MSEK Growth, % Organic + 3 % 59 000 Acquired + 8 % 30 56 000 25 53 000 20 50 000 15 47 000 10 44 000 5 41 000 0 38 000 35 000 -5 32 000 -10 29 000 -15 2007 2008 2009 2010 2011 2012 2013 2014 Organic Growth Acquired Growth Sales in Fixed Currencies 6

  7. Operating income (EBIT* ), MSEK Quarter 12-months 2 700 9 500 9 000 2 500 Run rate 9 ,2 5 7 MSEK ( 7 ,9 2 3 ) + 1 7 % 8 500 2 300 8 000 2 100 7 500 1 900 7 000 1 700 6 500 1 500 6 000 1 300 5 500 1 100 5 000 900 4 500 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months 7

  8. Operating margin (EBIT), % EBIT Margin Run rate 2 0 1 4 1 6 .3 % ( 1 6 .3 ) 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 Q4 -0 .2 % 2 0 1 4 -0 .3 % 8

  9. Manufacturing footprint  Status manufacturing footprint programs 2006-2013: – 64 factories closed to date, 16 to go – 77 factories converted to assembly, 12 to go – 36 offices closed, 11 to go  Personal reduction QTD 459p and total 9,414p  570p in further planned reductions  941 MSEK of the provision remains for all programs 9

  10. Margin highlights Q4 2014 EBI T m argin 1 6 .9 % ( 1 6 .6 ) + 0 .3 % + Volume increase 2% , price 1% + Margin increase + 0.3% + Organic growth + Manufacturing footprint + Currency + 0.2% - Acquisitions -0.2% 10

  11. Acquisitions 2014  Fully active pipeline  20 acquisitions done in 2014  Annualized sales 2,600 MSEK  Added sales 5.4% 11

  12. Digi Electronic Lock, China  Turnover of 300 MSEK with 620 employees  The leading digital door lock manufacturer in China  Complete product range for the mid to low segments  Complements our current product range  Accretive to EPS 12

  13. ODIS, Chile  Turnover of 120 MSEK with 240 employees  Leading supplier of locks and padlocks in Chile  Adds complementary market segments  Enables total door opening solutions  Accretive to EPS 13

  14. Silvana and Metalika, Brazil  Combined turnover of 250 MSEK with 410 employees  Market leading companies for locks and fire doors in Brazil  Complements existing business in Brazil  Accretive to EPS 14

  15. Division - EMEA SALES  Strong growth in Germany, Iberia, Eastern Europe share of Group total % and Africa  Good growth in Scandinavia 25  Flat in the UK, Italy and Israel  Negative in Benelux, France and Finland  Continued investment in sales and R&D EBI T %  Operating margin (EBIT) 19 18 + Organic 2% 17 16 + Slight leverage due to savings 15 - Dilution & Currency -0.4% 14 13 2009 2010 2011 2012 2013 2014 15

  16. Division - Americas SALES share of  Strong growth in AHW, Doors, El-mech, Residential Group total % and South America 20  Good growth in High Security, Canada and Mexico  Investment in R&D and spec salesmen  Strong quoting activity  Operating margin (EBIT) EBI T % 23 + Organic 8% 22 21 + Strong leverage from efficiency 20 - Currency & Dilution -0.2% 19 18 2009 2010 2011 2012 2013 2014 17

  17. Division - Asia Pacific SALES share of  Strong growth in Australia, New Zealand, SEA and Group total % North Asia 14  Strong decline in China due to strict credit policy and weak market  Strong contribution from efficiency works in China  Strategic addition of Digi Electronic Lock EBI T %  Operating margin (EBIT) 17 15 - Organic -7% 13 + Efficiency in China 11 9 + Positive sales mix 7 5 + Positive dilution + 0.3% 2009 2010 2011 2012 2013 2014 19

  18. Division - Global Technologies SALES  HID share of Group total % – Strong growth in Gov-ID, Biometrics and IDT (inlays) – Good growth in IAM (Identity and access management) 13 – Flat sales in Project sales – Austin move almost completed  Hospitality – Strong growth – Maintained strong profit EBI T % 21  Operating margin (EBIT) 20 19 + Organic 5% 18 17 + Positive sales mix 16 15 + Currency + 1.0% 14 2009 2010 2011 2012 2013 2014 21

  19. Division - Entrance Systems SALES  Strong growth in Door Automatics, High Speed share of Group total % Doors, Flexiforce, Amarr and 4Front  Decline in Industrial and Residential EU and Ditec 28  Price pressure in EU  Good progress in newly acquired companies EBI T %  Operating margin (EBIT) 18 17 + Organic 4% 16 15 + Efficiency improvement 14 13 - Price pressure in EU and Mix 12 11 - Dilution -0.6% 2009 2010 2011 2012 2013 2014 23

  20. Q4 Report 2014 Carolina Dybeck Happe CFO 25

  21. Financial highlights Q4 2014 4th Quarter Twelve months MSEK 2013 2014 Change 2013 2014 Change Sales 13,242 15,847 +20% 48,481 56,843 +17% Whereof Organic growth +3% +3% Acquired growth +8% +9% FX-differences +1,129 +9% +2,138 +5% Operating income (EBIT) 2,202 2,681 +22% 7,923 9,257 +17% EBIT-margin (%) ) 16.6 16.9 16.3 16.3 Operating cash flow 2,541 3,469 +37% 6,803 8,238 +21% EPS (SEK) 4.08 5.10 +25% 14.84 17.38 +17% 26

  22. Bridge Analysis – Oct-Dec 2014 2013 Organic Currency Acq/ Div 2014 MSEK Oct-Dec Oct-Dec 3% 9% 8% 20% Revenues 13,242 363 1,129 1,113 15,847 EBIT 2,202 113 209 157 2,681 % 16.6% 31.2% 18.6% 14.1% 16.9% Dilution / Accretion 0.3% 0.2% -0.2% 27

  23. P&L Components as % of sales Jan – Dec 2014 2 0 1 3 2 0 1 4 2 0 1 4 YTD YTD excluding YTD acquisitions  Direct material 35.0% 35.4% 36.5%  Conversion costs 25.5% 25.4% 24.9%  Gross Margin 39.5% 39.2% 38.6%  S, G & A 23.2% 22.6% 22.3%  EBIT 16.3% 16.6% 16.3% 28

  24. Operating cash flow, MSEK Quarter 12 months 4 000 8 500 3 500 3 000 7 500 2 500 6 500 2 000 1 500 5 500 1 000 4 500 500 0 3 500 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Cash Rolling 12-months EBT Rolling 12 months 29

  25. Gearing % and net debt MSEK Gearing Net Debt Debt/ Equity 6 2 ( 6 8 ) 30 000 120 25 000 100 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 .1 ( 2 .2 ) * ) 2007-2011 Not restated for changed pension accounting principles. 30

  26. Earnings per share, SEK Quarter SEK 12-months 2 0 1 4 EPS + 1 7 % 5,50 Dividend proposal 2 0 1 5 : 6 .5 0 SEK ( 5 .7 0 ) 18,00 Stock split proposal 3 :1 5,00 17,00 4,50 16,00 4,00 15,00 3,50 14,00 3,00 13,00 2,50 12,00 2,00 11,00 1,50 10,00 1,00 9,00 0,50 0,00 8,00 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. 31

  27. Q4 Report 2014 Johan Molin President & CEO 32

  28. Conclusions Q4 2014  Strong growth by 20% with 3% organic – Strong in US – Europe divided – Emerging markets slowing, especially China  New products very successful, 32% of sales  Strong EBIT improvement of 22%  Very strong cash flow + 37% 33

  29. Q&A 34

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