1
Q1 Report 2014
Johan Molin
President & CEO
Financial highlights Q1 2014
 Continued good development
– Strong growth in EMEA and good growth in ESD
– Growth in Ameri...
 Shift to e-cylinders for utilities and
authorities
– Cloud services, high reliability, key control
and increased flexibi...
4
Group sales in local currencies Jan-Mar
2014
2 +15
35 +23
13 +2
4 +9
1 +22
Share of Group sales 2014 YTD, %
Year-to-date...
-15
-12
-9
-6
-3
0
3
6
9
12
15
18
21
24
28 000
31 000
34 000
37 000
40 000
43 000
46 000
49 000
52 000
2007 2008 2009 2010...
Operating income (EBIT*), MSEK
4 500
5 500
6 500
7 500
8 500
900
1 100
1 300
1 500
1 700
1 900
2 100
2 300
2007 2008 2009 ...
12,0
13,0
14,0
15,0
16,0
17,0
2007 2008 2009 2010 2011 2012 2013 2014
Quarter Rolling 12-months 2014 Dilution
Q1 -0.5%
201...
Manufacturing footprint
8
 Status manufacturing footprint programs 2006-2013:
– 57 factories closed to date, 21 to go
– 7...
Margin highlights Q1 2014
EBIT margin 15.1% (15.3) -0.2%
+ Volume increase +3%, price +1%
+ Margin decrease -0.2%
+ Organi...
Acquisitions 2014
 Fully active pipeline
 4 new acquisitions in 2014
 Annualized sales 400 MSEK
 Completed acquisition...
Safeguard, Norway
11
 Turnover of 240 MSEK with 110
employees
 Strong presense in Oslo and oil
industry
 Good fit with ...
Unilock, Korea
12
 Turnover of 60 MSEK with 30
employees
 Adds product range of Digital
Cabinet Locks
 Complements exis...
Lumidigm, USA
13
 Turnover of 160 MSEK with 33
employees
 Authentication based on
advanced fingerprint biometrics
 Util...
Division - EMEA
 Strong growth in Scandinavia, Germany, Africa and
Eastern Europe
 Good growth UK, Benelux, France and I...
Division - Americas
 Strong growth in Residential and Latin America
 Growth in Doors and Electromechanical
 Flat in AHW...
Division - Asia Pacific
 Strong growth in Australia and New Zealand
 Growth in China and Korea
 Decline in South East A...
Division - Global Technologies
 HID
– Good growth in IDT
– Growth in IAM (Identity and access management)
– Weak Gov ID a...
Division - Entrance Systems
 Strong growth in Industrial Doors, High Speed Doors
and Flexiforce
 Growth in Door automati...
24
Q1 Report 2014
Carolina Dybeck Happe
CFO
Financial highlights Q1 2014
MSEK 2013 2014 Change 2012 2013 Change
Sales 10,868 12,305 +13% 46,619 48,481 +4%
Whereof
Org...
Bridge Analysis – Jan-Mar 2014
MSEK 2013
Jan-Mar
Organic Currency Acq/Div 2014
Jan-Mar
4% 1% 8% 13%
Revenues 10,868 394 10...
P&L – Components as % of sales
Jan – Mar 2014
 Direct material 32.8% 33.4% 34.6%
 Conversion costs 27.1% 26.9% 26.5%
 G...
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
...
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
2007 2008 2009 2010 2011 2012...
Earnings per share, SEK
6,00
7,00
8,00
9,00
10,00
11,00
12,00
13,00
14,00
15,00
16,00
0,00
0,50
1,00
1,50
2,00
2,50
3,00
3...
31
Q1 Report 2014
Johan Molin
President & CEO
Conclusions Q1 2014
 Sales growth by 13% with 4% organic
– Europe with good growth
– Weak North America
– South America a...
33
Q&A
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Q1 2014 assa abloy investors presentation 29 april

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This presentation was held when the ASSA ABLOY Group released its interim report first quarter January-March 2014 on Tuesday 29 April 2014. The presentation was held at the combined investors’ and analyst meeting and web conference at Operaterrassen in Stockholm, Sweden.

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Q1 2014 assa abloy investors presentation 29 april

  1. 1. 1 Q1 Report 2014 Johan Molin President & CEO
  2. 2. Financial highlights Q1 2014  Continued good development – Strong growth in EMEA and good growth in ESD – Growth in Americas, Global Tech and APAC – Continued gains of efficiency and savings – Easter effect in Europe and severe winter in the US  Sales 12,305 MSEK +13% 4% organic, 8% acquired growth, 1% currency  EBIT 1,857 MSEK +12% Currency effect 13 MSEK  EPS 3.41 SEK +11% Underlying tax rate 26% 2
  3. 3.  Shift to e-cylinders for utilities and authorities – Cloud services, high reliability, key control and increased flexibility drives demand  Shift of locking technology in hotel market – RFID locks with virtual keys increasingly popular  Walmart service contract – 1,660 stores in 11 states, driving service & equip sales  New Innovation awards at ISC west – Best in Locks/Safes/Hardware – Best in Access Control Products - Wireless 3 Market highlights
  4. 4. 4 Group sales in local currencies Jan-Mar 2014 2 +15 35 +23 13 +2 4 +9 1 +22 Share of Group sales 2014 YTD, % Year-to-date vs previous year, % 45 +7 Emerging markets 22% of sales
  5. 5. -15 -12 -9 -6 -3 0 3 6 9 12 15 18 21 24 28 000 31 000 34 000 37 000 40 000 43 000 46 000 49 000 52 000 2007 2008 2009 2010 2011 2012 2013 2014 Organic Growth Acquired Growth Sales in FixedCurrencies Sales growth, currency adjusted 5 2014 Q1 +12% Organic +4% Acquired +8% Sales MSEK Growth, %
  6. 6. Operating income (EBIT*), MSEK 4 500 5 500 6 500 7 500 8 500 900 1 100 1 300 1 500 1 700 1 900 2 100 2 300 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months Quarter 12-months Run rate 8,118 MSEK (7,509) +8% 6
  7. 7. 12,0 13,0 14,0 15,0 16,0 17,0 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months 2014 Dilution Q1 -0.5% 2014 FC -0.4% Operating margin (EBIT), % Run rate 2014 16.3% (16.1) Long term target range (average) 7 EBIT Margin
  8. 8. Manufacturing footprint 8  Status manufacturing footprint programs 2006-2013: – 57 factories closed to date, 21 to go – 70 factories converted to assembly, 19 to go – 28 offices closed, 19 to go  Personal reduction QTD 123p and total 8,481p  1,503p in further planned reductions  1,279 MSEK of the provision remains for all programs
  9. 9. Margin highlights Q1 2014 EBIT margin 15.1% (15.3) -0.2% + Volume increase +3%, price +1% + Margin decrease -0.2% + Organic growth + Manufacturing footprint + Efficiency improvements - Acquisitions -0.5% 9
  10. 10. Acquisitions 2014  Fully active pipeline  4 new acquisitions in 2014  Annualized sales 400 MSEK  Completed acquisitions 2014  Lumidigm  Unilock  Safeguard  Traka 10
  11. 11. Safeguard, Norway 11  Turnover of 240 MSEK with 110 employees  Strong presense in Oslo and oil industry  Good fit with ASSA ABLOY locksmith chain  Accretive to EPS
  12. 12. Unilock, Korea 12  Turnover of 60 MSEK with 30 employees  Adds product range of Digital Cabinet Locks  Complements existing business in Korea and China  Technology gives access to US and European markets  Accretive to EPS
  13. 13. Lumidigm, USA 13  Turnover of 160 MSEK with 33 employees  Authentication based on advanced fingerprint biometrics  Utilizes multispectral imaging technology  Unique patented technology  Neutral to EPS
  14. 14. Division - EMEA  Strong growth in Scandinavia, Germany, Africa and Eastern Europe  Good growth UK, Benelux, France and Iberia  Flat in Italy and Finland and slight decline in Israel  Investment in front-end and R&D  Positive Easter effect  Operating margin (EBIT) + Organic 5% + Footprint savings - Careful investments - Dilution (-0.3%) SALES share of Group total % 28 14 13 14 15 16 17 18 19 2009 2010 2011 2012 2013 2014 EBIT %
  15. 15. Division - Americas  Strong growth in Residential and Latin America  Growth in Doors and Electromechanical  Flat in AHW and decline in High security and Canada  Good efficiency improvements  Tough winter  Operating margin (EBIT) + Organic 2% + Efficiency improvements - Currency & dilution (-0.4%) 16 SALES share of Group total % 22 18 19 20 21 22 2009 2010 2011 2012 2013 2014 EBIT %
  16. 16. Division - Asia Pacific  Strong growth in Australia and New Zealand  Growth in China and Korea  Decline in South East Asia  Strong impact from currencies (-0.9%)  Continued outsourcing in China  Operating margin (EBIT) = Organic 3% + Efficiency in China - Cost pressure in China - Currency (-0.9%) 11 18 SALES share of Group total % 5 7 9 11 13 15 17 2009 2010 2011 2012 2013 2014 EBIT %
  17. 17. Division - Global Technologies  HID – Good growth in IDT – Growth in IAM (Identity and access management) – Weak Gov ID and Project sales – Consolidation of North American operations to Austin  Hospitality – Continued strong growth – Good profit development  Operating margin (EBIT) + Organic 3% + Currency gain (+0.6%) - Dilution (-0.4%) 12 20 SALES share of Group total % 13 14 15 16 17 18 19 20 2009 2010 2011 2012 2013 2014 EBIT %
  18. 18. Division - Entrance Systems  Strong growth in Industrial Doors, High Speed Doors and Flexiforce  Growth in Door automatics, US dockings and US industrial doors  Slightly negative EU residential and Ditec  Consolidation develops well  Rapid growth +23%, EBIT +16%  Operating margin (EBIT) + Organic 4% + Good efficiency improvements + Currency (+0.3%) - Dilution (-1.4%) 27 22 SALES share of Group total % 11 12 13 14 15 16 17 18 2009 2010 2011 2012 2013 2014 EBIT %
  19. 19. 24 Q1 Report 2014 Carolina Dybeck Happe CFO
  20. 20. Financial highlights Q1 2014 MSEK 2013 2014 Change 2012 2013 Change Sales 10,868 12,305 +13% 46,619 48,481 +4% Whereof Organic growth +4% +2% Acquired growth +8% +4% FX-differences +109 +1% -1,156 -2% Operating income (EBIT)* 1,662 1,857 +12% 7,501 7,923 +5% EBIT-margin (%) )* 15.3 15.1 16.1 16.3 Operating cash flow 498 557 +12% 7,044 6,803 -3% EPS (SEK)* 3.07 3.41 +11% 13.97 14.84 +6% 1st Quarter Twelve months 25 *) Excluding restructuring items of 1,000 MSEK for the full year 2013.
  21. 21. Bridge Analysis – Jan-Mar 2014 MSEK 2013 Jan-Mar Organic Currency Acq/Div 2014 Jan-Mar 4% 1% 8% 13% Revenues 10,868 394 109 933 12,305 EBIT 1,662 97 13 84 1,857 % 15.3% 24.6% 12.2% 9.0% 15.1% Dilution / Accretion 0.3% 0.0% -0.5% 26
  22. 22. P&L – Components as % of sales Jan – Mar 2014  Direct material 32.8% 33.4% 34.6%  Conversion costs 27.1% 26.9% 26.5%  Gross Margin 40.1% 39.7% 38.9%  S, G & A 24.8% 24.1% 23.8%  EBIT 15.3% 15.6% 15.1% 2014 Q1 excluding acquisitions 2013 Q1 2014 Q1 27
  23. 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 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Cash Rolling 12-months EBT Rolling 12 months 28 Quarter 12 months
  24. 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 2007 2008 2009 2010 2011 2012 2013 2014 Net debt Gearing Debt/Equity 72 (57) Net debt/EBITDA 2.3 (1.8) 29 Net Debt Gearing *) 2007-2011 Not restated for changed pension accounting principles.
  25. 25. Earnings per share, SEK 6,00 7,00 8,00 9,00 10,00 11,00 12,00 13,00 14,00 15,00 16,00 0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50 4,00 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months Quarter SEK 12-months 30 *) Excluding restructuring costs of 1,000 MSEK in Q4 and full year 2013. **) 2007-2011 Not restated for changed pension accounting principles. Since 2006 EPS +90% Dividend 2014: 5.70 SEK (5.10)
  26. 26. 31 Q1 Report 2014 Johan Molin President & CEO
  27. 27. Conclusions Q1 2014  Sales growth by 13% with 4% organic – Europe with good growth – Weak North America – South America and Africa with strong growth  Dilution from acquisitions (-0.5%)  Efficiency improvements supports profit  EBIT improvement of 12% to 1,857 MSEK 32
  28. 28. 33 Q&A

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