Q3 2012 ASSA ABLOY investors presentation 29 october

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ASSA ABLOY released its interim report January - September on Monday 29 October 2012 at 08.00 am (CET). A combined investors’ and analyst meeting and web conference was held at Operaterrassen in Stockholm, Sweden, at 10:00 am (CET). Welcome to visit our Investor pages at http://www.assaabloy.com/investors/.

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Q3 2012 ASSA ABLOY investors presentation 29 october

  1. 1. Q3 Report 2012 Johan Molin President & CEO 1
  2. 2. Financial highlights Q3 2012 Continued good development for ASSA ABLOY – Good growth in Asia, Africa and South America – Stable development in Americas, EMEA, APAC and Global tech – ESD suffering from southern Europe – Strong profit and cash development Sales 11,545 MSEK +6% +1% organic, +7% acquired growth, -2% currency EBIT 1,932 MSEK +10% Currency effect -15 MSEK EPS 3.49 SEK +6% Tax forecast 24% 2
  3. 3. Financial highlights Jan-Sep 2012 Strong progress in a challenging market Sales 34,380 MSEK +14% +2% organic, +10% acquired growth, +2% currency EBIT 5,471 MSEK +15% Currency effect 79 MSEK EPS 10.10 SEK +14% Tax forecast 24% 3
  4. 4. Market highlights Growth from new products 24% Aperio fully launched in the USA – Most comprehensive wireless lock offering in the North American market – ASIS 2012 award winner; best new access control product – First large order landed Essence - new designer hotel locks – All lock components, including the reader, inside the door – Compatible with Near Field Communication (NFC) standards – Online/offline RFID 4
  5. 5. Market highlights Seos launched – Complete ecosystem for mobile keys – Focus on security, privacy and customer experience for mobile phones – Single point of entry to multiple global communication networks – ASIS 2012 Security’s Best Winner – most innovative product 5
  6. 6. Group sales in local currencies Jan-Sep2012 Emerging markets 25% of sales despite acquisitions in Europe 47 +15 29 +11 16 +13 1 +17 2 +10 5 -2 Share of Group sales 2012 YTD, % Year-to-date vs previous year, % 6
  7. 7. Organic growth indexRecovery from recession Group +0% Division Index EMEA -7% Americas -15% Asia Pacific +29% Global Tech +14% ESD +1% 7
  8. 8. Sales growth, currency adjustedSales MSEK Growth, % 2012 Q3 +8% 48 000 Organic +1% 24 22 46 000 Acquired +7% 20 44 000 18 16 42 000 14 40 000 12 10 38 000 8 6 36 000 4 2 34 000 0 -2 32 000 -4 30 000 -6 -8 28 000 -10 -12 26 000 -14 -16 24 000 -18 2005 2006 2007 2008 2009 2010 2011 2012 Organic Growth Acquired Growth Sales in Fixed Currencies 8
  9. 9. Operating income (EBIT), MSEK Quarter 12-months 2 000 7 500 1 900 Run rate 7,353 MSEK (6,349), +16% 1 800 7 000 1 700 6 500 1 600 1 500 6 000 1 400 5 500 1 300 1 200 5 000 1 100 1 000 4 500 900 4 000 800 700 3 500 2005 2006 2007 2008 2009 2010 2011 2012 Quarter Rolling 12-months*) Excluding restructuring costs. 9
  10. 10. Operating margin (EBIT)*, % EBIT Margin 17,0 Long term target range (average) 16,0 15,0 Run rate 2012 15.9% (16.0) 14,0 13,0 12,0 2005 2006 2007 2008 2009 2010 2011 2012 Quarter Rolling 12-months Q3 2012 Dilution QTD +0.0% YTD -0.3%*) Excluding restructuring costs. 10
  11. 11. Manufacturing footprint Status manufacturing footprint programs 2006-2011: – 49 factories closed to date, 19 to go – 52 factories converted to assembly, 23 to go – 28 offices closed, 1 to go Personnel reduction QTD 128p and total 6,464p 1,071 in further planned reductions 1,272 MSEK of the provision remains for all programs 11
  12. 12. Margin highlights Q3 2012EBIT margin 16.7% (16.2), +0.5%+ Volume increase 0%, price 1%+ Margin expansion 0.5% + Manufacturing footprint & efficiency improvements + Material cost development= Dilution from acquisitions by +0.0% 12
  13. 13. Acquisitions 2012 Fully active pipeline 11 acquisitions done so far in 2012 Annualized sales 3,450 MSEK, +8.3% Major acquisitions Jan-Oct 2012:  Albany, US  Dynaco, BE  Securistyle, UK  Sanhe Metal, China  Helton, Canada  Guoqiang, China 13
  14. 14. Division - EMEA SALES share of Southern European weakness is spreading Group total % Good growth in UK, Africa, EE and Israel 26 Stable situation in Scandinavia, Finland, Germany and France Negative sales in Italy, Iberia and Benelux Continued strong footprint savings EBIT % 19 Operating margin (EBIT) 18 17 - Organic 1% 16 + Material cost 15 14 + Footprint savings 13 2007 2008 2009 2010 2011 2012 - Dilution by -0.1% 14
  15. 15. Division - Americas SALES share of Strong growth in Residential, Mexico and South Group total % America 21 Growth in Electromechanical while stable in AHW, Doors and High security Slight decline in Canada Improved margin from volume and efficiency gains Operating margin (EBIT) EBIT % 22 + Organic +3% 21 - Material cost 20 19 + Efficiency improvement 18 2007 2008 2009 2010 2011 2012 16
  16. 16. Division - Asia Pacific SALES share of Strong growth in Korea and South East Asia despite Group total % India in decline 16 Good growth in China Strong decline in Australia and stable in New Zeeland Focus on manufacturing efficiency in China Agreement signed on sale of Wangli EBIT % Operating margin (EBIT) 17 15 - Organic +3% 13 11 + Efficiency in China 9 7 + Material cost 5 - Mix & cost pressure 2007 2008 2009 2010 2011 2012 18
  17. 17. Division - Global Technologies SALES  HID share of Group total % – Strong growth in IDT – Good growth of Access control, Logical access and Secure 14 Issuance – Decline in Government and project invoicing – Strong profit improvement  Hospitality – Continued good growth from renovation market – Strong profit improvement EBIT % 20 19 Operating margin (EBIT) 18 17 16 + Organic +3% 15 14 + Leverage from core business growth 13 2007 2008 2009 2010 2011 2012 + Less large project orders 20
  18. 18. Division - Entrance Systems SALES share of Heavy decline in Southern Europe Group total % Good growth of Crawford, Albany and FlexiForce 23 Continued decline of Ditec and Residential doors New door program launched for Residential doors Integration of new companies develops well Sales +18% and EBIT +20% EBIT % 19 18 Operating margin (EBIT) 17 16 - Organic -2% 15 14 + Raw material 13 12 + Efficiency gains from integration works 2007 2008 2009 2010 2011 2012 22
  19. 19. Q3 Report 2012Carolina Dybeck Happe CFO 24
  20. 20. Financial highlights Q3 2012 3rd Quarter Nine monthsMSEK 2011 2012 Change 2011 2012 ChangeSales 10,841 11,545 +6% 30,042 34,380 +14%WhereofOrganic growth +1% +2%Acquired growth +7% +10%FX-differences -151 -2% 502 2%Operating income (EBIT) 1,751 1,932 +10% 4,743 5,471 +15%EBIT-margin (%) 16.2 16.7 15.8 15.9Operating cash flow 1,528 1,967 +29% 3,286 3,885 +18%EPS (SEK)* 3.30 3.49 +6% 8.86 10.10 +14% *excluding non comparable items 25
  21. 21. Bridge Analysis – Jul-Sep 2012 MSEK 2011 Organic Currency Acq/Div 2012 Jul-Sep Jul-Sep 1% -2% 7% 6% Revenues 10,841 129 -151 726 11,545 EBIT 1,751 74 -15 121 1,932 % 16.2% 57.5% 9.8% 16.7% 16.7% Dilution / Accretion 0.5% 0.0% 0.0% 26
  22. 22. P&L – Components as % of sales 2011 2012 2012 Q3 Q3 excluding Q3 acquisitions Direct material 35.8% 35.1% 35.1% Conversion costs 25.4% 25.0% 25.0% Gross Margin 38.8% 39.9% 39.9% S, G & A 22.6% 23.2% 23.2% EBIT 16.2% 16.7% 16.7% 27
  23. 23. Operating cash flow, MSEKQuarter 12 months3 000 8 000 7 5002 500 7 000 6 5002 000 6 0001 500 5 500 5 0001 000 4 500 4 000 500 3 500 0 3 000 2005 2006 2007 2008 2009 2010 2011 2012 Quarter Cash Rolling 12-months EBT Rolling 12 months 28
  24. 24. Gearing % and net debt MSEKNet Debt Gearing 30 000 120 Debt/Equity 25 000 66 (69) 100 20 000 80 15 000 60 10 000 40 5 000 20 0 0 2005 2006 2007 2008 2009 2010 2011 2012 Net debt Gearing Net debt/EBITDA 2.0 (2.2) 29
  25. 25. Q3 Report 2012 Johan Molin President & CEO 30
  26. 26. Conclusions Q3 2012 Total growth by 6% with 1% organic Stable development in Americas, EMEA, APAC and Global tech Good growth in Asia, Africa and South America Efficiency improvements and raw material supports profit Strong EBIT improvement with 10% Very good cash flow 31
  27. 27. Q&A 32

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