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Q1 Report 2013
Johan Molin
President & CEO
Financial highlights Q1 2013
 Good performance in a tough market
– Good growth in Americas
– Growth in APAC and stable in Global Tech
– EMEA and ESD suffering from weak Europe
– Maintained good profitability
 Sales 10,868 MSEK 0%
-1% organic, +5% acquired growth, -4% currency
 EBIT 1,662 MSEK 0%
Currency effect -63 MSEK
 EPS 3.07 SEK -1%*
Forecasted tax rate 25%
*) 2012 restated for changed pension accounting principles.
2
3
Market highlights
 Launch of full elmech and ANSI
range in Mexico & South America
 Growth in Africa driven by network
of 25 ASSA ABLOY branded
showrooms in 23 cities
 Product awards at ISC West 2013
for Aperio M100 and Securitron
M380 Series Magnalock
 HID’s pivCLASS® complete product
solution for the Federal Identity
market
pivCLASS®
pivCLASS® Federal Identity Solution
Solution Architecture
4
pivCLASS®
Cards
OCSP/SCVP/CRL
Validation Authority
Physical Access Control
System (PACS)
PACS Controller
pivCLASS®
Authentication
Module
pivCLASS®
ReaderspivCLASS®
Cards
Harvesting of
PIV IDs
Registration
and Status
Updates
pivCLASS®
Registration Engine
Certification Manager
Reader Service
Validation of
Certificates
Card Identifier
via Wiegand
Harvesting
of PIV IDs
OCSP – Online Status Verification protocol
SCVP – Server Based Certificate Validation
Protocol
CRL – Certificate Revocation list
5
Group sales in local currencies Jan-Mar
2013
2 +13
32 +19
14 +12
5 -2
1 +5
Share of Group sales 2013 YTD, %
Year-to-date vs previous year, %
46 -6
Organic growth index
Recovery from recession
6
Group +0%
Division Index
EMEA -8%
Americas -12%
Asia Pacific +35%
Global Tech +10%
ESD *) 0%
*) Entrance systems division excluding Cardo.
-16
-13
-10
-7
-4
-1
2
5
8
11
14
17
20
23
26 000
28 000
30 000
32 000
34 000
36 000
38 000
40 000
42 000
44 000
46 000
2006 2007 2008 2009 2010 2011 2012 2013
Organic Growth Acquired Growth Sales in Fixed Currencies
Sales growth, currency adjusted
7
2013 Q1 +4%
Organic -1%
Acquired +5%
Sales MSEK Growth, %
Operating income (EBIT), MSEK
3 500
4 000
4 500
5 000
5 500
6 000
6 500
7 000
7 500
8 000
700
800
900
1 000
1 100
1 200
1 300
1 400
1 500
1 600
1 700
1 800
1 900
2 000
2 100
2006 2007 2008 2009 2010 2011 2012 2013
Quarter Rolling 12-months
Quarter 12-months
Run rate 7,509 MSEK (6,902) +9%
8
*) Excluding restructuring costs.
12,0
13,0
14,0
15,0
16,0
17,0
2006 2007 2008 2009 2010 2011 2012 2013
Quarter Rolling 12-months
Q1 2013 Dilution
QTD -0.1%
Operating margin (EBIT)*, %
Run rate 2013 16.1% (15.7)
Long term target range (average)
9
EBIT Margin
*) Excluding restructuring costs.
Manufacturing footprint
10
 Status manufacturing footprint programs 2006-2011:
– 55 factories closed to date, 13 to go
– 62 factories converted to assembly, 13 to go
– 28 offices closed, 1 to go
 Personal reduction QTD 101p and total 6,866p
 669p in further planned reductions
 897 MSEK of the provision remains for all programs
Margin highlights Q1 2013
EBIT margin 15.3% (15.3) 0.0%
+ Volume decrease -2%, price +1%
+ Margin expansion 0.1%
- Organic growth -1%
+ Manufacturing footprint
+ Capacity adjustments
- Dilution from acquisitions -0.1%
11
Acquisitions 2013
 Fully active pipeline
 3 acquisitions done in 2013
 Annualized sales 130 MSEK
 Completed acquisitions 2012 by 3.4%
 Dynaco, BE
 Securistyle, UK
 Sanhe Metal, China
 Helton, Canada
 Guoqiang, China
 4Front, USA
12
Acquisitions in the quarter
 SHERLOCK, EMEA
Leader in security doors in
Slovakia and Czech Republic with
total sales of 60 MSEK
 Norport, ESD
Specialist in sales and service of
Industrial doors in Oslo with
sales of 60 MSEK
 ASL, EMEA
Professional end-user specialist
and locksmith in Colombia with
sales of 10 MSEK
13
Division - EMEA
 Suffering from weak Europe and Easter
 Growth in Africa, Middle east and Eastern Europe
 All other markets with declining sales
 Strong decline in Spain, Italy, France, Holland and
Finland
 Good profit resilience due to savings despite
investment in front end and R&D
 Operating margin (EBIT)
- Organic -6%
+ Footprint savings
= Material cost
- SG&A
SALES
share of
Group total %
29
14
13
14
15
16
17
18
19
2008 2009 2010 2011 2012 2013
EBIT %
Division - Americas
 Strong growth in Residential, Electromechanical and
South America
 Growth in AHW, Doors, High security, Canada and
Mexico
 Improved margin from volume and efficiency gains
 Investments in R&D and front end
 Operating margin (EBIT)
+ Organic +5%
+ Material cost
+ Efficiency improvement
- SG&A
16
SALES
share of
Group total %
17
18
19
20
21
22
2008 2009 2010 2011 2012 2013
EBIT%
21
Division - Asia Pacific
 Strong growth in Korea, South East Asia and New
Zeeland
 Growth in China despite the decline in export to EMEA
 Small decline in Australia
 Continued adjustment of workforce in China
 Operating margin (EBIT)
- Organic +2%
+ Efficiency in China
+ Material cost
- Mix & cost pressure
12
18
SALES
share of
Group total %
5
8
11
14
17
2008 2009 2010 2011 2012 2013
EBIT %
Division - Global Technologies
 HID
– Good growth of Physical access
– Growth in Project sales and flat in Logical access
– Negative in Government ID and IDT
– Strong profit improvement
 Hospitality
– Continued good growth from the renovation market
– Increased construction activity in the USA
 Operating margin (EBIT)
+ Organic 0%
+ Leverage from core business growth
+ Good improvement of AI and Lasercard
13
20
SALES
share of
Group total %
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013
EBIT%
Division - Entrance Systems
 Suffering from weak Europe and Easter
 Negative growth in all channels in Europe
 Strong growth in Americas and growth in Asia
 Good start for new acquisition 4Front
 Sales +9% and EBIT +11%
 Operating margin (EBIT)
- Organic -3%
+ Smooth running of integration work
+ Large savings on product cost
25
22
SALES
share of
Group total %
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013
EBIT%
24
Q1 Report 2013
Carolina Dybeck Happe
CFO
Financial highlights Q1 2013
MSEK 2012 2013 Change 2011 2012 Change
Sales 10,839 10,868 0% 41,786 46,619 +12%
Whereof
Organic growth -1% +2%
Acquired growth +5% +9%
FX-differences -379 -4% 290 1%
Operating income (EBIT) 1,655 1,662 0% 6,624 7,501 +13%
EBIT-margin (%) 15.3 15.3 15.9 16.1
Operating cash flow 483 498 +3% 6,080 7,044 +16%
EPS (SEK)* 3.11 3.07 -1% 12.30 13.97 +14%
1st Quarter Twelve months
25
*) excluding non comparable items
Bridge Analysis – Jan-Mar 2013
MSEK 2012
Jan-Mar
Organic Currency Acq/Div 2013
Jan-Mar
-1% -4% 5% 0%
Revenues 10,839 -125 -379 534 10,868
EBIT 1,655 -3 -63 73 1,662
% 15.3% 2.2% 16.6% 13.7% 15.3%
Dilution / Accretion 0.1% 0.0% -0.1%
26
P&L – Components as % of sales
 Direct material 32.7% 32.6% 32.8%
 Conversion costs 27.6% 27.2% 27.1%
 Gross Margin 39.7% 40.2% 40.1%
 S, G & A 24.4% 24.8% 24.8%
 EBIT 15.3% 15.4% 15.3%
2013
Q1 excluding
acquisitions
2012
Q1
2013
Q1
27
Operating cash flow, MSEK
3 000
3 500
4 000
4 500
5 000
5 500
6 000
6 500
7 000
7 500
8 000
0
500
1 000
1 500
2 000
2 500
3 000
3 500
2006 2007 2008 2009 2010 2011 2012 2013
Quarter Cash Rolling 12-months EBT Rolling 12 months
28
Quarter 12 months
Gearing % and net debt MSEK
0
20
40
60
80
100
120
0
5 000
10 000
15 000
20 000
25 000
30 000
2006 2007 2008 2009 2010 2011 2012 2013
Net debt Gearing
Debt/Equity
57 (71)
Net debt/EBITDA
1.8 (2.2)
29
Net Debt Gearing
*) 2006-2011 Not restated for changed pension accounting principles.
Earnings per share, MSEK
4,00
6,00
8,00
10,00
12,00
14,00
0,00
1,00
2,00
3,00
4,00
2006 2007 2008 2009 2010 2011 2012 2013
Quarter Rolling 12-months
Quarter SEK 12-months
30
*) Excluding restructuring costs.
**) 2006-2011 Not restated for changed pension accounting principles.
Dividend 2013: 5.10 SEK (4.50)
31
Q1 Report 2013
Johan Molin
President & CEO
Conclusions Q1 2013
 Stable sales with 5% acquired, -1% organic and -4%
currency
 Continued good growth in Americas
 APAC improving and stable Global Tech
 Declining situation in EMEA and ESD due to weak Europe
and Easter
 Strong efficiency improvements supports profit
 Slight increase of EBIT to 1,662 MSEK
32
33
Q&A

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Q1 2013 assa abloy investors presentation 24 april

  • 1. 1 Q1 Report 2013 Johan Molin President & CEO
  • 2. Financial highlights Q1 2013  Good performance in a tough market – Good growth in Americas – Growth in APAC and stable in Global Tech – EMEA and ESD suffering from weak Europe – Maintained good profitability  Sales 10,868 MSEK 0% -1% organic, +5% acquired growth, -4% currency  EBIT 1,662 MSEK 0% Currency effect -63 MSEK  EPS 3.07 SEK -1%* Forecasted tax rate 25% *) 2012 restated for changed pension accounting principles. 2
  • 3. 3 Market highlights  Launch of full elmech and ANSI range in Mexico & South America  Growth in Africa driven by network of 25 ASSA ABLOY branded showrooms in 23 cities  Product awards at ISC West 2013 for Aperio M100 and Securitron M380 Series Magnalock  HID’s pivCLASS® complete product solution for the Federal Identity market pivCLASS®
  • 4. pivCLASS® Federal Identity Solution Solution Architecture 4 pivCLASS® Cards OCSP/SCVP/CRL Validation Authority Physical Access Control System (PACS) PACS Controller pivCLASS® Authentication Module pivCLASS® ReaderspivCLASS® Cards Harvesting of PIV IDs Registration and Status Updates pivCLASS® Registration Engine Certification Manager Reader Service Validation of Certificates Card Identifier via Wiegand Harvesting of PIV IDs OCSP – Online Status Verification protocol SCVP – Server Based Certificate Validation Protocol CRL – Certificate Revocation list
  • 5. 5 Group sales in local currencies Jan-Mar 2013 2 +13 32 +19 14 +12 5 -2 1 +5 Share of Group sales 2013 YTD, % Year-to-date vs previous year, % 46 -6
  • 6. Organic growth index Recovery from recession 6 Group +0% Division Index EMEA -8% Americas -12% Asia Pacific +35% Global Tech +10% ESD *) 0% *) Entrance systems division excluding Cardo.
  • 7. -16 -13 -10 -7 -4 -1 2 5 8 11 14 17 20 23 26 000 28 000 30 000 32 000 34 000 36 000 38 000 40 000 42 000 44 000 46 000 2006 2007 2008 2009 2010 2011 2012 2013 Organic Growth Acquired Growth Sales in Fixed Currencies Sales growth, currency adjusted 7 2013 Q1 +4% Organic -1% Acquired +5% Sales MSEK Growth, %
  • 8. Operating income (EBIT), MSEK 3 500 4 000 4 500 5 000 5 500 6 000 6 500 7 000 7 500 8 000 700 800 900 1 000 1 100 1 200 1 300 1 400 1 500 1 600 1 700 1 800 1 900 2 000 2 100 2006 2007 2008 2009 2010 2011 2012 2013 Quarter Rolling 12-months Quarter 12-months Run rate 7,509 MSEK (6,902) +9% 8 *) Excluding restructuring costs.
  • 9. 12,0 13,0 14,0 15,0 16,0 17,0 2006 2007 2008 2009 2010 2011 2012 2013 Quarter Rolling 12-months Q1 2013 Dilution QTD -0.1% Operating margin (EBIT)*, % Run rate 2013 16.1% (15.7) Long term target range (average) 9 EBIT Margin *) Excluding restructuring costs.
  • 10. Manufacturing footprint 10  Status manufacturing footprint programs 2006-2011: – 55 factories closed to date, 13 to go – 62 factories converted to assembly, 13 to go – 28 offices closed, 1 to go  Personal reduction QTD 101p and total 6,866p  669p in further planned reductions  897 MSEK of the provision remains for all programs
  • 11. Margin highlights Q1 2013 EBIT margin 15.3% (15.3) 0.0% + Volume decrease -2%, price +1% + Margin expansion 0.1% - Organic growth -1% + Manufacturing footprint + Capacity adjustments - Dilution from acquisitions -0.1% 11
  • 12. Acquisitions 2013  Fully active pipeline  3 acquisitions done in 2013  Annualized sales 130 MSEK  Completed acquisitions 2012 by 3.4%  Dynaco, BE  Securistyle, UK  Sanhe Metal, China  Helton, Canada  Guoqiang, China  4Front, USA 12
  • 13. Acquisitions in the quarter  SHERLOCK, EMEA Leader in security doors in Slovakia and Czech Republic with total sales of 60 MSEK  Norport, ESD Specialist in sales and service of Industrial doors in Oslo with sales of 60 MSEK  ASL, EMEA Professional end-user specialist and locksmith in Colombia with sales of 10 MSEK 13
  • 14. Division - EMEA  Suffering from weak Europe and Easter  Growth in Africa, Middle east and Eastern Europe  All other markets with declining sales  Strong decline in Spain, Italy, France, Holland and Finland  Good profit resilience due to savings despite investment in front end and R&D  Operating margin (EBIT) - Organic -6% + Footprint savings = Material cost - SG&A SALES share of Group total % 29 14 13 14 15 16 17 18 19 2008 2009 2010 2011 2012 2013 EBIT %
  • 15. Division - Americas  Strong growth in Residential, Electromechanical and South America  Growth in AHW, Doors, High security, Canada and Mexico  Improved margin from volume and efficiency gains  Investments in R&D and front end  Operating margin (EBIT) + Organic +5% + Material cost + Efficiency improvement - SG&A 16 SALES share of Group total % 17 18 19 20 21 22 2008 2009 2010 2011 2012 2013 EBIT% 21
  • 16. Division - Asia Pacific  Strong growth in Korea, South East Asia and New Zeeland  Growth in China despite the decline in export to EMEA  Small decline in Australia  Continued adjustment of workforce in China  Operating margin (EBIT) - Organic +2% + Efficiency in China + Material cost - Mix & cost pressure 12 18 SALES share of Group total % 5 8 11 14 17 2008 2009 2010 2011 2012 2013 EBIT %
  • 17. Division - Global Technologies  HID – Good growth of Physical access – Growth in Project sales and flat in Logical access – Negative in Government ID and IDT – Strong profit improvement  Hospitality – Continued good growth from the renovation market – Increased construction activity in the USA  Operating margin (EBIT) + Organic 0% + Leverage from core business growth + Good improvement of AI and Lasercard 13 20 SALES share of Group total % 10 12 14 16 18 20 2008 2009 2010 2011 2012 2013 EBIT%
  • 18. Division - Entrance Systems  Suffering from weak Europe and Easter  Negative growth in all channels in Europe  Strong growth in Americas and growth in Asia  Good start for new acquisition 4Front  Sales +9% and EBIT +11%  Operating margin (EBIT) - Organic -3% + Smooth running of integration work + Large savings on product cost 25 22 SALES share of Group total % 10 12 14 16 18 20 2008 2009 2010 2011 2012 2013 EBIT%
  • 19. 24 Q1 Report 2013 Carolina Dybeck Happe CFO
  • 20. Financial highlights Q1 2013 MSEK 2012 2013 Change 2011 2012 Change Sales 10,839 10,868 0% 41,786 46,619 +12% Whereof Organic growth -1% +2% Acquired growth +5% +9% FX-differences -379 -4% 290 1% Operating income (EBIT) 1,655 1,662 0% 6,624 7,501 +13% EBIT-margin (%) 15.3 15.3 15.9 16.1 Operating cash flow 483 498 +3% 6,080 7,044 +16% EPS (SEK)* 3.11 3.07 -1% 12.30 13.97 +14% 1st Quarter Twelve months 25 *) excluding non comparable items
  • 21. Bridge Analysis – Jan-Mar 2013 MSEK 2012 Jan-Mar Organic Currency Acq/Div 2013 Jan-Mar -1% -4% 5% 0% Revenues 10,839 -125 -379 534 10,868 EBIT 1,655 -3 -63 73 1,662 % 15.3% 2.2% 16.6% 13.7% 15.3% Dilution / Accretion 0.1% 0.0% -0.1% 26
  • 22. P&L – Components as % of sales  Direct material 32.7% 32.6% 32.8%  Conversion costs 27.6% 27.2% 27.1%  Gross Margin 39.7% 40.2% 40.1%  S, G & A 24.4% 24.8% 24.8%  EBIT 15.3% 15.4% 15.3% 2013 Q1 excluding acquisitions 2012 Q1 2013 Q1 27
  • 23. Operating cash flow, MSEK 3 000 3 500 4 000 4 500 5 000 5 500 6 000 6 500 7 000 7 500 8 000 0 500 1 000 1 500 2 000 2 500 3 000 3 500 2006 2007 2008 2009 2010 2011 2012 2013 Quarter Cash Rolling 12-months EBT Rolling 12 months 28 Quarter 12 months
  • 24. Gearing % and net debt MSEK 0 20 40 60 80 100 120 0 5 000 10 000 15 000 20 000 25 000 30 000 2006 2007 2008 2009 2010 2011 2012 2013 Net debt Gearing Debt/Equity 57 (71) Net debt/EBITDA 1.8 (2.2) 29 Net Debt Gearing *) 2006-2011 Not restated for changed pension accounting principles.
  • 25. Earnings per share, MSEK 4,00 6,00 8,00 10,00 12,00 14,00 0,00 1,00 2,00 3,00 4,00 2006 2007 2008 2009 2010 2011 2012 2013 Quarter Rolling 12-months Quarter SEK 12-months 30 *) Excluding restructuring costs. **) 2006-2011 Not restated for changed pension accounting principles. Dividend 2013: 5.10 SEK (4.50)
  • 26. 31 Q1 Report 2013 Johan Molin President & CEO
  • 27. Conclusions Q1 2013  Stable sales with 5% acquired, -1% organic and -4% currency  Continued good growth in Americas  APAC improving and stable Global Tech  Declining situation in EMEA and ESD due to weak Europe and Easter  Strong efficiency improvements supports profit  Slight increase of EBIT to 1,662 MSEK 32