Q4 year end-2012 assa abloy invetors presentation 7 february

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ASSA ABLOY released its interim report January - December on Thursday 7 February 2013 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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Q4 year end-2012 assa abloy invetors presentation 7 february

  1. 1. Q4 Report 2012 Johan Molin President & CEO 1
  2. 2. Financial highlights Q4 2012 Good performance in a tough market – Good growth in Americas and improvement in the Pacific – Stable situation in EMEA, APAC and Global Tech – ESD suffering from weak Europe – Record profit and cash flow Sales 12,239 MSEK +4% 0% organic, +7% acquired growth, -3% currency EBIT 2,030 MSEK +8% Currency effect -41 MSEK EPS 3.74 SEK +9% Underlying tax rate 24% 2
  3. 3. Financial highlights Jan-Dec 2012 A good year in a challenging market Sales 46,619 MSEK +12% +2% organic, +9% acquired growth, +1% currency EBIT 7,501 MSEK +13% Currency effect 37 MSEK EPS 13.84 SEK +13% Underlying tax rate 24% 3
  4. 4. Market highlights Strong demand for SE readers with SIO in Physical access Digital door locks sees strong growth in the Americas New industrial door range for distribution in ESD New modular lock range for Europe 4
  5. 5. Modular lock range Platform based mechanical & elmech locks for commercial applications Sustainability ECO Design, “Sustainable Design” and EPD 20 new patents Branded ASSA ABLOY, like the success of ASSA ABLOY door closers 5
  6. 6. Group sales in local currencies Jan-Dec2012 Emerging markets 25% of sales despite acquisitions in Europe 47 +11 29 +12 16 +9 1 +16 2 +9 5 +1 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 -13% Asia Pacific +33% Global Tech +14% ESD +0% 7
  8. 8. Sales growth, currency adjustedSales MSEK Growth, % 2012 Q4 +7% 48 000 24 46 000 Organic +0% 21 44 000 Acquired +7% 18 42 000 15 40 000 12 9 38 000 6 36 000 3 34 000 0 32 000 -3 30 000 -6 -9 28 000 -12 26 000 -15 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 2 100 Run rate 7,501 MSEK (6,624) +13% 8 000 2 000 7 500 1 900 1 800 7 000 1 700 1 600 6 500 1 500 6 000 1 400 1 300 5 500 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 16.1% (15.9) 14,0 13,0 12,0 2005 2006 2007 2008 2009 2010 2011 2012 Quarter Rolling 12-months Q4 2012 Dilution Q1 2013 effect QTD +0.1% Easter -2 days YTD -0.2%*) Excluding restructuring costs. 10
  11. 11. Manufacturing footprint Status manufacturing footprint programs 2006-2011: – 53 factories closed to date, 15 to go – 56 factories converted to assembly, 19 to go – 28 offices closed, 1 to go Personnel reduction QTD 301p and total 6,765p 770p in further planned reductions 1,068 MSEK of the provision remains for all programs 11
  12. 12. Margin highlights Q4 2012EBIT margin 16.6% (16.0) +0.6%+ Volume increase -1%, price +1%+ Margin expansion from organic growth 0.5% - Organic growth 0% + Manufacturing footprint + Capacity adjustments + Raw material+ Contribution from acquisitions +0.1% 12
  13. 13. Acquisitions 2012 Fully active pipeline 13 acquisitions done in 2012 Annualized sales 4,500 MSEK +10.8% Major acquisitions Jan-Dec 2012:  Albany, US  Dynaco, BE  Securistyle, UK  Sanhe Metal, China  Helton, Canada  Guoqiang, China  4Front, USA 13
  14. 14. 4Front, USA US Market leader in docking equipment with sales of 1,100 MSEK Adds strong distribution network across North America Leading well known brands and products with 125 active patents Offers a manufacturing base for production in North America Single digit EBIT but accretive to EPS in 2013 14
  15. 15. Division - EMEA SALES share of Weak December due to few working days Group total % Growth in UK, France, Israel, Middle east and Eastern Europe 28 Slight decline in Scandinavia, Finland, Germany and Spain Negative sales in Italy and Benelux Good profit and cash flow EBIT % 19 18 Operating margin (EBIT) 17 16 - Organic -1% 15 14 = Material cost 13 + Footprint savings 2007 2008 2009 2010 2011 2012 15
  16. 16. Division - Americas SALES share of Strong growth in Residential, Electromechanical and Group total % South America Growth in AHW, Doors, High security and Mexico 19 Decline in Canada Improved margin from volume and efficiency gains Operating margin (EBIT) EBIT% + Organic +5% 22 + Material cost 21 20 + Efficiency improvement 19 18 17 2007 2008 2009 2010 2011 2012 17
  17. 17. Division - Asia Pacific SALES share of Return of growth in the Pacific and strong growth of Group total % Korea 16 Low growth in China and slowing South East Asia Workforce in China reduced by 1,400p to mitigate the high salary inflation Operating margin (EBIT) EBIT % - Organic +2% 17 - Mix & cost pressure 14 + Efficiency in China 11 + Material cost 8 5 2007 2008 2009 2010 2011 2012 19
  18. 18. Division - Global Technologies SALES  HID share of Group total % – Strong growth of Logical access and IDT – Good growth of Access control and Secure Issuance 12 – Flat in Government ID and decline in project sales – Strong profit improvement  Hospitality – Continued good growth from the renovation market – Strong profit improvement Operating margin (EBIT) EBIT% 20 + Organic +2% 18 + Leverage from core business growth 16 14 + Less project sales 12 10 2007 2008 2009 2010 2011 2012 21
  19. 19. Division - Entrance Systems SALES share of Decline in Southern Europe Group total % Good growth of Albany, Dynaco 25 Slightly neg growth for industrial and pedestrian doors Continued decline of Ditec and Residential doors Integration work develops very well Sales +14% and EBIT +15% EBIT% 20 Operating margin (EBIT) 18 - Organic -5% 16 14 + Raw material 12 + Efficiency gains from integration works 10 2007 2008 2009 2010 2011 2012 23
  20. 20. Q4 Report 2012Carolina Dybeck Happe CFO 25
  21. 21. Financial highlights Q4 2012 4th Quarter Twelve monthsMSEK 2011 2012 Change 2011 2012 ChangeSales 11,744 12,239 +4% 41,786 46,619 +12%WhereofOrganic growth 0% +2%Acquired growth +7% +9%FX-differences -212 -3% 290 1%Operating income (EBIT) 1,881 2,030 +8% 6,624 7,501 +13%EBIT-margin (%) 16.0 16.6 15.9 16.1Operating cash flow 2,794 3,160 +13% 6,080 7,044 +16%EPS (SEK)* 3.43 3.74 +9% 12.30 13.84 +13% *excluding non comparable items 26
  22. 22. Bridge Analysis – Oct-Dec 2012 MSEK 2011 Organic Currency Acq/Div 2012 Oct-Dec Oct-Dec 0% -3% 7% 4% Revenues 11,744 -28 -212 736 12,239 EBIT 1,881 51 -41 138 2,030 % 16.0% - 19.2% 18.8% 16.6% Dilution / Accretion 0.5% 0.0% 0.1% 27
  23. 23. P&L – Components as % of sales 2011 2012 2012 FY FY excluding FY acquisitions Direct material 35.1% 34.7% 34.6% Conversion costs 25.9% 25.4% 25.9% Gross Margin 39.0% 39.9% 39.5% S, G & A 23.1% 23.6% 23.4% EBIT 15.9% 16.3% 16.1% 28
  24. 24. Operating cash flow, MSEKQuarter 12 months 3 500 8 000 7 500 3 000 7 000 2 500 6 500 6 000 2 000 5 500 1 500 5 000 1 000 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 29
  25. 25. Gearing % and net debt MSEKNet Debt Gearing 30 000 120 Debt/Equity 25 000 55 (60) 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 1.7 (1.9) 30
  26. 26. Earnings per share SEK 16,00 Since 2005 EPS + 120% 13,84 14,00 Dividend 2013: 5.10 SEK (4.50) 12,00 10,00 8,00 6,00 4,00 2,00 0,00 2005 2006 2007 2008 2009 2010 2011 2012 *) Excluding restructuring costs. 31
  27. 27. Q4 Report 2012 Johan Molin President & CEO 32
  28. 28. Conclusions Q4 2012 Total growth by 4% with 0% organic Good growth in Americas Stable situation in EMEA, APAC and Global Tech Strong efficiency improvements and raw material supports profit Record EBIT of 2,030 MSEK, improved by 8% Record cash flow at 3,160 MSEK 33
  29. 29. Q&A 34

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