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ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience
© ASSA ABLOY. All rights reserved
Q3 Report 2016Johan MolinPresident and CEO
© ASSA ABLOY. All rights reserved
Financial highlights Q3, 2016
Stable development in the third quarter
– Strong growth in Americas and Global Tech
– Good growth in Entrance Systems
– Growth in EMEA
– Negative growth in APAC due to China
Sales 18,025 MSEK 3%+2% organic, +2% acquired growth, -1% currency
EBIT 3,020 MSEK 2% Currency effect -2 MSEK
EPS 1.91 SEK 3%Underlying tax rate 26%
2
© ASSA ABLOY. All rights reserved
Financial highlights Jan-Sep 2016
Strong development despite a challenging market
– Strong growth in Americas and Global Tech
– Good growth in EMEA and Entrance Systems
– Negative growth in APAC due to China
Sales 51,809 MSEK 4%
3% organic, 3% acquired growth, -2% currency
EBIT 8,340 MSEK 4% Currency effect -160 MSEK
EPS 5.21 SEK 4%Underlying tax rate 26%
3
© ASSA ABLOY. All rights reserved
Data analytics – simple and actionable
– Launch of Cliq data analytics in the USA
Launch of energy efficient industrial solutions
– Freezer transportation with High Performance Doors
– Industrial docking systems
– Online savings ROI calculator
Strong pull from DIY channel with digital products
– Entry ticket to DIY chains. Ex. Mexico, UK, Germany
ASSA ABLOY locksmiths unified across Nordics
– Nordic locksmiths rebranded to Certego
– Certego offers 24/7 service in all countries
Market highlights
© ASSA ABLOY. All rights reserved
5
Group sales in local currencies Jan-Sep 2016
3 +39
40 +7
15 -4
4 +2
1 +14
Share of Group sales 2016 YTD, %Year-to-date vs previous year, %
37 +7
Emerging markets 24% (25) of sales
© ASSA ABLOY. All rights reserved
-15
-12
-9
-6
-3
0
3
6
9
12
15
18
21
34 000
37 000
40 000
43 000
46 000
49 000
52 000
55 000
58 000
61 000
64 000
67 000
70 000
2009 2010 2011 2012 2013 2014 2015 2016
Growth %Sales MSEK
Organic Growth Acquired Growth Sales in Fixed Currencies
Sales growth, currency adjusted
6
2016 Q3 +4%
Organic +2%
Acquired +2%
© ASSA ABLOY. All rights reserved
Operating income (EBIT), MSEK
4 500
5 000
5 500
6 000
6 500
7 000
7 500
8 000
8 500
9 000
9 500
10 000
10 500
11 000
11 500
1 000
1 200
1 400
1 600
1 800
2 000
2 200
2 400
2 600
2 800
3 000
3 200
2009 2010 2011 2012 2013 2014 2015 2016
12-monthsQuarter
Quarter Rolling 12-months
Run rate 11,379 MSEK (10,722) +6%
7
© ASSA ABLOY. All rights reserved
12
13
14
15
16
17
2009 2010 2011 2012 2013 2014 2015 2016
EBIT Margin
Quarter Rolling 12-months
2016 Acquisitions CurrencyQ3 -0.2% 0.2%
Operating margin, %
Run rate 2016 16.2% (16.3)
8
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Manufacturing footprint
9
Status of manufacturing footprint programs 2006-2013:
– 76 factories closed to date, 2 to go
– 101 factories converted to assembly, 14 to go
Total personnel reduction:
– 11,916 FTE in total
– 560 FTE in recent quarter
360 FTE to go for all programs
New MFP-program in progress
339 MSEK of the provision remains for all programs
© ASSA ABLOY. All rights reserved
Margin highlights Q3 2016
EBIT margin 16.8% (17.0) -0.2%
+ Volume increase 1%, price 1%
Margin development
- APAC decline
+ Manufacturing footprint & pricing
+ Currency 0.2%
- Acquisitions -0.2%
10
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Acquisitions 2016
Fully active pipeline
10 acquisitions done in 2016
Divestment of Carlocks 550 MSEK
Acquired annualized sales 1,900 MSEK
Added sales 2.8%
11
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Trojan, UK
12
Turnover of 220 MSEK with 66
employees
UK residential door and window
hardware manufacturer
Complements the product portfolio
in a very good way
Accretive to EPS
© ASSA ABLOY. All rights reserved
Division – EMEA
Strong growth in Scandinavia, UK and Israel
Good growth in Germany, Benelux, Iberia and Italy
Flat to negative in Finland, Africa, France and EE
Negative calendar effect
Operating margin (EBIT)
+ Organic +2%
+ Direct material
- Front-end investments
+ Acquisitions +0.2%
13
13
14
15
16
17
18
19
2010 2011 2012 2013 2014 2015 2016
EBIT %
22%
Sales share of
Group total %
© ASSA ABLOY. All rights reserved
Division - Americas
Strong growth in Door group, Elmech, Mexico and South America (ex Brazil)
Good growth in Residential, Canada and High security
Growth in AHW and negative in Brazil
Quotation levels continue to develop positive
Operating margin (EBIT)
+ Organic +5%
+ Strong leverage
- Acquisitions -0.6%
15
20
18
19
20
21
22
23
2010 2011 2012 2013 2014 2015 2016
EBIT %
25%
Sales share of
Group total %
© ASSA ABLOY. All rights reserved
Division - Asia Pacific
Good growth in Pacific
Growth in Korea and flat in South Asia
Continued decline in China yoy -12%
– Strong personnel reduction China
– China correction related to 2015 neutralized by release of earn outs
Operating margin (EBIT)
- Organic -7%*
+ Savings and personnel reduction
- Redundancy cost
14
17
8
10
12
14
16
18
2010 2011 2012 2013 2014 2015 2016
EBIT %
13%
Sales share of
Group total %
*) Comparable period restated due to adjusted China reporting.
© ASSA ABLOY. All rights reserved
Division - Global Technologies
HID
– Strong growth in Secure issuance, IAM, Gov ID,
IDT (inlays) and project sales
– Good growth in PACS
Hospitality
– Flat sales with good orders
– Good profit
Operating margin (EBIT)
+ Organic +7%
- Mix and R&D investment
- Acquisitions -0.5%
13
19
14
15
16
17
18
19
20
21
2010 2011 2012 2013 2014 2015 2016
EBIT %
13%
Sales share of
Group total %
© ASSA ABLOY. All rights reserved
Division - Entrance Systems
Strong growth in Door automatics, High speed doors,
Flexiforce and Amarr
Good growth in Industrial and 4Front
Negative in EU Residential
Continued good leverage
Operating margin (EBIT)
+ Organic +4%
+ Direct material and consolidation effects
- Acquisitions -0.2%
28
21
10
12
14
16
18
2010 2011 2012 2013 2014 2015 2016
EBIT %
27%
Sales share of
Group total %
ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience
© ASSA ABLOY. All rights reserved
Q3 Report 2016Carolina Dybeck HappeCFO
ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience
© ASSA ABLOY. All rights reserved
Financial highlights Q3 2016
MSEK 2015 2016 Change 2015 2016 Change
Sales 17,465 18,025 +3% 49,799 51,809 +4%
Whereof
Organic growth 471 307 +2% 1,807 1,308 +3%
Acquired growth 606 429 +2% 1,435 1,512 +3%
FX-differences 1,661 -176 -1% 5,561 -810 -2%
Operating income (EBIT) 2,970 3,020 +2% 8,041 8,340 +4%
EBIT-margin (%) 17.0 16.8 16.1 16.1
Operating cash flow 2,816 2,830 0% 5,327 5,846 +10%
EPS (SEK) 1.86 1.91 +3% 5.02 5.21 +4%
3rd Quarter Nine months
24
© ASSA ABLOY. All rights reserved
Bridge Analysis – Jul-Sep 2016
MSEK 2015
Jul-Sep
Organic Currency Acq/Div 2016
Jul-Sep
2% -1% 2% 3%
Sales 17,465 307 -176 429 18,025
EBIT 2,970 18 -2 34 3,020
% 17.0% 5.7% 1.2% 7.9% 16.8%
Dilution / Accretion -0.2% 0.2% -0.2%
25
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P&L Components as % of salesJan – Sep 2016
Direct material 36.6% 35.9% 35.6%
Conversion costs 24.5% 24.6% 24.9%
Gross Margin 38.9% 39.5% 39.5%
S, G & A 22.8% 23.1% 23.4%
EBIT 16.1% 16.4% 16.1%
2016YTD excl
acquisitions
2015YTD
2016YTD
26
© ASSA ABLOY. All rights reserved
Operating cash flow, MSEK
4 500
5 000
5 500
6 000
6 500
7 000
7 500
8 000
8 500
9 000
9 500
10 000
10 500
11 000
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
2009 2010 2011 2012 2013 2014 2015 2016
12-monthsQuarter
Quarter Cash Rolling 12-months EBT Rolling 12 months
27
© ASSA ABLOY. All rights reserved
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
2009 2010 2011 2012 2013 2014 2015 2016
GearingNet Debt
Net debt Gearing
Debt/Equity 57 (63)
Net debt/EBITDA2.0 (2.1)
28
*) 2009-2011 Not restated for changed pension accounting principles.
© ASSA ABLOY. All rights reserved
Earnings per share, SEK
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6.50
7.00
7.50
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
2009 2010 2011 2012 2013 2014 2015 2016
12-monthsQuarter SEK
Quarter Rolling 12-months
29
Restated for Stock split 3:1 2015.
Q3 EPS +3%
ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience
© ASSA ABLOY. All rights reserved
Q3 Report 2016Johan MolinPresident and CEO
© ASSA ABLOY. All rights reserved
Conclusions Q3 2016
Good growth by 3% with 2% organic and 2% acquired
Strong growth in Americas and Global Tech
Digital door locks progressing nicely in DIY
Decline in China continued
Stable EBIT development and good cash flow
31
ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience
© ASSA ABLOY. All rights reserved
Q&A