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Q3 Report Presentation 2016

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The ASSA ABLOY Group released its interim report third quarter July-September 2016 on Friday 21 October 2016.

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Q3 Report Presentation 2016

  1. 1. ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience Q3 Report 2016 Johan Molin President and CEO
  2. 2. 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
  3. 3. 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
  4. 4.  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
  5. 5. 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
  6. 6. -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%
  7. 7. 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
  8. 8. 12 13 14 15 16 17 2009 2010 2011 2012 2013 2014 2015 2016 EBIT Margin Quarter Rolling 12-months 2016 Acquisitions Currency Q3 -0.2% 0.2% Operating margin, % Run rate 2016 16.2% (16.3) 8
  9. 9. 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
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. 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 %
  14. 14. 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 %
  15. 15. 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.
  16. 16. 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 %
  17. 17. 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 %
  18. 18. ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience Q3 Report 2016 Carolina Dybeck Happe CFO ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience
  19. 19. 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
  20. 20. 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
  21. 21. P&L Components as % of sales Jan – 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% 2016 YTD excl acquisitions 2015 YTD 2016 YTD 26
  22. 22. 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
  23. 23. 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/EBITDA 2.0 (2.1) 28 *) 2009-2011 Not restated for changed pension accounting principles.
  24. 24. 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%
  25. 25. ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience Q3 Report 2016 Johan Molin President and CEO
  26. 26. 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
  27. 27. ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience Q&A

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