Q4 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 Q4 Report 2015 Johan Molin President and CEO

Financial highlights Q4 2015  Strong ending of the year – Strong growth in EMEA, Americas, Global Tech and Entrance – Negative in APAC due to weak Chinese market – Provision for receivables and release of earn outs in China  Sales 18,301 MSEK +15% 5 % organic, 4% acquired growth, 6% currency  EBIT 3,038 MSEK +13% Currency effect 91 MSEK  EPS 1.91 SEK +12% Underlying tax rate 26% 2

Financial highlights Jan-Dec 2015  A strong year despite the difficult market – Strong growth in Americas, Global Tech and Entrance – Good growth in EMEA – Negative growth in APAC due to China  Sales 68,099 MSEK +20% 4 % organic, 3% acquired growth, 13% currency  EBIT 11,079 MSEK +20% Currency effect 881 MSEK  EPS 6.93 SEK +20% Underlying tax rate 26% 3

Market highlights  Strong specification sales in Entrance Systems Segmentation model paying off –  Record order for cloud-based CLIQ – Secures base stations of large Telecom Operator  Quick delivery “ FLASHship ” program 24-hour delivery covering the US, strong progress –  First virtual ID program order Smartphone-based Seos credential eGov program –

Group sales in local currencies Jan-Dec 2015 Emerging markets 26% (24) of sales 37 +6 39 +8 17 +9 1 +0 2 +26 4 +7 Share of Group sales 2015 YTD, % Year-to-date vs previous year, % 5

Organic growth index Recovery from recession Group +22% Division Index EMEA +9% Americas +29% Asia Pacific +22% Global Tech +39% ESD +25% Index 2010 +2% 6

Sales growth, currency adjusted 2015 Q4 +9% Organic +5% Sales MSEK Growth % Acquired +4% 70 000 21 67 000 18 64 000 15 61 000 12 58 000 9 55 000 6 52 000 3 49 000 0 46 000 -3 43 000 -6 40 000 -9 37 000 -12 34 000 -15 2008 2009 2010 2011 2012 2013 2014 2015 Organic Growth Acquired Growth Sales in Fixed Currencies 7

Operating income (EBIT), MSEK Run rate 11,079 MSEK (9,257) +20% Quarter 12-months 3 200 11 500 11 000 3 000 10 500 2 800 10 000 2 600 9 500 9 000 2 400 8 500 2 200 8 000 2 000 7 500 1 800 7 000 6 500 1 600 6 000 1 400 5 500 1 200 5 000 1 000 4 500 2008 2009 2010 2011 2012 2013 2014 2015 Quarter Rolling 12-months 8

Operating margin, % Run rate 2015 16.3% (16.3) EBIT Margin 17 16 15 14 13 12 2008 2009 2010 2011 2012 2013 2014 2015 2015 Acquisitions Currency Q4 -0.4% -0.4% Quarter Rolling 12-months 2015 -0.2% -0.3% 9

Manufacturing footprint  Status of manufacturing footprint programs 2006-2013: – 73 factories closed to date, 5 to go – 84 factories converted to assembly, 25 to go – 41 offices closed, 8 to go  Total personnel reduction in Q4: – 481 FTE and total 10,750 FTE  929 FTE to go for all programs  551 MSEK of the provision remains for all programs 10

Margin highlights Q4 2015 EBIT margin 16.6% (16.9) -0.3% + Volume increase 3.5%, price 1.5% Margin decline -0.3% + 0.5% Organic growth + Manufacturing footprint & pricing - Currency -0.4 (+0.2)% - Acquisitions -0.4 (-0.2)% 11

Acquisitions 2015 Fully active pipeline  17 acquisitions done in 2015  Annualized sales (3 000 MSEK)  Added sales 4%  12

IAI, Netherlands  Turnover of 185 MSEK with 85 employees  Security printing solutions for government ID and other security solutions  Enhances position within government ID and secure issuance  Slightly accretive to EPS 13

CEDES, Switzerland  Turnover of 510 MSEK with 340 Products employees  Leading company in sensor technology for door and elevator industry  Adds intelligence within entrance automation Technologies  Accretive to EPS 14

Papaiz and Udinese, Brazil  Combined turnover of 450 MSEK with 1,300 employees  Market-leading companies for locks and hardware for doors and windows  Significantly increases the Group’s footprint in Brazil  Slightly accretive to EPS 15

Division – EMEA SALES Strong growth in Scandinavia, Finland, Benelux, Iberia  share of and Eastern Europe Group total % Growth in UK, Germany and Israel  24% Flat in Africa and slightly negative in France and Italy  Provision for receivables in Russia  EBIT % Operating margin (EBIT)  19 18 + Organic +5% 17 16 + Savings & efficiency 15 14 - Dilution from acq & currency -1.5% 13 2010 2011 2012 2013 2014 2015 16

Division - Americas SALES share of Strong growth in AHW, Elmech, Canada, Mexico and  Group total % South America 20 Good growth in Doors, Residential  22% Growth in High security  High activity level in Home Automation  EBIT % 23 Operating margin (EBIT)  22 21 + Organic +8% 20 19 + Efficiency 18 2010 2011 2012 2013 2014 2015 - Currency and acq -1.3% 18

Division - Asia Pacific SALES Strong growth in Australia and South Asia share of  Group total % Good growth in New Zeeland and North Asia  14 13% Continued decline in China  Efficiency measures to mitigate profit pressure – Provision for receivables and release of earn outs in  China EBIT % 18 Operating margin (EBIT)  16 - Organic -4% 14 12 + Personnel reduction in China -11% 10 + Currency and acq +0.7% 8 2010 2011 2012 2013 2014 2015 20

Division - Global Technologies SALES HID  share of Group total % Strong growth in Project sales (+54%), – IDT (inlays) and Quantum secure 13 13% Flat in IAM (PACS, SI & IDA) – Strong decline in Gov-Id and BIO solutions – Hospitality  Strong growth – Strong profit – EBIT % 21 20 Operating margin (EBIT)  19 18 + Organic +8% 17 16 - Negative mix and R&D investments 15 14 2010 2011 2012 2013 2014 2015 - Currency and acq -0.7% 22

Division - Entrance Systems SALES Strong growth in High Speed Doors, Ditec, Amarr and  share of Group total % 4Front Good growth in Industrial EU and Door Automatics  28 28% Growth in EU residential and Flexiforce  Consolidation delivers results  EBIT % 18  Operating margin (EBIT) 17 16 + Organic +6% 15 14 13 + Consolidation effects 12 11 - Dilution from acq and currency -0.8% 2010 2011 2012 2013 2014 2015 24

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 Q4 Report 2015 Carolina Dybeck Happe CFO

Financial highlights Q4 2015 4th Quarter Twelve months MSEK 2014 2015 Change 2014 2015 Change Sales 15,847 18,301 +15% 56,843 68,099 +20% Whereof Organic growth +5% +4% Acquired growth +4% +3% FX-differences +983 +6% +6,544 +13% Operating income (EBIT) 2,681 3,038 +13% 9,257 11,079 +20% EBIT-margin (%) 16.9 16.6 16.3 16.3 Operating cash flow 3,469 4,625 +33% 8,238 9,952 +21% EPS (SEK) 1.70 1.91 +12% 5.79 6.93 +20% 27

Bridge Analysis – Oct-Dec 2015 MSEK 2014 Organic Currency Acq/Div 2015 Oct-Dec Oct-Dec 5% 6% 4% 15% Sales 15,847 827 983 643 18,301 EBIT 2,681 221 91 45 3,038 % 16.9% 26.7% 9.3% 6.9% 16.6% Dilution / Accretion 0.5% -0.4% -0.4% 28

P&L Components as % of sales Jan – Dec 2015 2014 2015 2015 YTD YTD excl YTD acquisitions Direct material 36.5% 36.8% 36.9% Conversion costs 24.9% 24.3% 24.3% Gross Margin 38.6% 38.9% 38.8% S, G & A 22.3% 22.4% 22.5% EBIT 16.3% 16.5% 16.3% 29

Operating cash flow, MSEK 12-months Quarter 5 000 10 500 10 000 4 500 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 30

Gearing % and net debt, MSEK Net Debt Gearing Debt/Equity 30 000 120 54 (62) 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/EBITDA 1.8 (2.1) *) 2008-2011 Not restated for changed pension accounting principles. 31

Earnings per share, SEK Quarter SEK 12-months 2.00 7.00 2015 EPS +20% 6.50 1.80 Dividend proposal 2016: 2.65 SEK (2.17) 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-months Restated for Stock split 3:1 2015. 32

ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience Q4 Report 2015 Johan Molin President and CEO

Conclusions Q4 2015 Strong growth by 15% with 5% organic  Emerging markets 26% (24)  Strong EBIT +13%  Strong EPS +12%  Strong Cash flow +33%  34

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