Cash offer for Cardo Johan Molin, President & CEO Tomas - - PDF document

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Cash offer for Cardo Johan Molin, President & CEO Tomas - - PDF document

Cash offer for Cardo Johan Molin, President & CEO Tomas Eliasson, CFO 1 Investor presentation disclaimers Forw ard- looking Statem ents Information set forth in this presentation may contain forward-looking statements. These statements are


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1

Johan Molin, President & CEO Tomas Eliasson, CFO

Cash offer for Cardo

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Forw ard- looking Statem ents Information set forth in this presentation may contain forward-looking statements. These statements are not guarantees of future performance and are subject to inherent risks and uncertainties. Forward-looking statements include, but are not limited to, statements about the expected future business of ASSA ABLOY AB resulting from and following the offer. These statements reflect ASSA ABLOY AB’s current expectations based upon information currently available to it and are subject to various assumptions, as well as risks and uncertainties that may be outside of the control of ASSA ABLOY AB, including but not limited to the effect of changes in general economic conditions, the level of interest rates, fluctuations in product demand, competition, technological change, employee relations, planning and property regulations, natural disasters and the potential need for increased capital expenditure (such as resulting from increased demand, new business opportunities and deployment of new technologies). Actual results could differ materially from those expressed or implied in such forward-looking statements. Any such forward-looking statements speak only as of the date on which they are made and ASSA ABLOY AB has no obligation (and undertakes no such obligation) to update or revise any of them. Offer Restrictions The offer is not being made to persons whose participation in the offer requires that an additional offer document is prepared or registration effected or that other measures are taken in addition to those required under Swedish law. In particular, the offer is not being made, directly or indirectly, by use of mail or any other means or instrumentality in or into Australia, Canada, Japan, New Zealand or South Africa, and the offer cannot be accepted by any such use, means, instrumentality or facility of, or from within Australia, Canada, Japan, New Zealand or South Africa. Accordingly, this presentation and any related offer documentation are not being and should not be mailed or otherwise distributed, forwarded or sent in or into Australia, Canada, Japan, New Zealand or South Africa. Additional I nform ation For full information on the terms of the offer, the contents of and background to the offer and the offer restrictions, please refer to the

  • ffer announcement.

Investor presentation disclaimers

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Cash offer for Cardo

  • ASSA ABLOY has reached agreements with the largest

shareholders of Cardo, representing 63.6% of the shares, to acquire their shares in Cardo

  • A public offer is announced today with SEK 420 per share for the

remaining shares

  • The Board of Directors of Cardo has unanimously recommended

the offer

  • Cardo Entrance Solutions is a good fit with ASSA ABLOY’s division

Entrance Systems and together they will be able to offer a complete range of products within Entrance Automation

  • ASSA ABLOY will investigate strategic options for Cardo’s other
  • perations which do not fit in with ASSA ABLOY’s long term

strategy, including a potential divestment

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Strategic rationale

  • The acquisition is a step in ASSA ABLOY’s strategic ambition to

grow the entrance automation business

  • The acquisition strengthens ASSA ABLOY’s product offering – as a

leading supplier of complete solutions within Entrance Automation

  • ASSA ABLOY leverages its global organization and distribution

network to expand and further develop the operations in Cardo Entrance Solutions

  • Large synergies in sales, services and product offering, but also

cost synergies within manufacturing, purchasing, distribution

  • Cardo Entrance Solutions constitutes a platform for further

growth in the broader entrance automation space

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Future Entrance Systems division

Entrance Systems

Sales BSEK 8.8 EBIT 12.5%

Ditec/ Entrematic

Indirect

Industrial doors

Direct

Automatic doors

Direct

Sales BSEK 0 .9 EBI T 8 % ( Ditec and Entrem atic) Sales BSEK 4 .6 EBI T 1 1 % 1 ) ( Cardo) Sales BSEK 3 .3 EBI T 1 7 % ( Entrance System s) ( Agta Record Sales 2 .0 BSEK, 3 8 % )

1) Adjusted for items affecting comparability of BSEK 0.1

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ASSA ABLOY Entrance Systems in brief

  • Sales of 4,200 MSEK
  • 2,800 employees
  • Sales companies in about 30 countries
  • Authorized distributors in more than 50 countries
  • Production/ assembly in Sweden, Czech Republic, Italy, Portugal, Korea,

China, USA and Canada

  • Headquarters in Landskrona, Sweden
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Besam AB Besam Denmark Besam Great Britain Besam Germany Besam Austria Besam Netherlands Besam USA Besam France NJAD (USA

  • distributor)

Besam Sweden (Sales) Besam Finland Besam Singapore Besam Switzerland Besam Security … Besam Malaysia Besam Italy Besam Spain Besam Belgium Entré-Matic AB Besam Hungary Besam Czech Republic Faiveley, France Besam Japan Besam Poland Besam Portugal Besam Russia Besam Production AB Besam Export AB Besam Australia Besam China Besam Slovakia EntreMatic AB Besam Canada Doorman Besam New Zeeland Besam HongKong Besam Korea Besam Norway Besam South Africa Besam Cheil Besam Portugal AAES Turkey …

250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 3000 3250 3500

Sales MSEK

SwingDoors Sliding Doors Revolving Doors Service Sales

ASSA ABLOY Entrance Systems

A true success story

Ditec Agta Record

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Roller Shutters Entrance Control Traffic & Vehicle

The Acquisition of Ditec 2009 moved ASSA ABLOY into Entrance Automation

Industrial Doors Roller Shutters Window Automation Pedestrian Doors Entrance Control Traffic& Vehicle

Entrance Automation Market Entrance Automation Market

Before Going forw ard

Industrial Doors Pedestrian Doors Window Automation

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Expansion in two dimensions: direct & indirect business

  • Acquisitions to complement

direct selling model

  • End-user focus

– System sales, customized solutions – Service

  • Global key accounting
  • Geographical gaps

Direct m odel I ndirect m odel

  • Acquisitions to complement

distributor sales channel

  • Distribution market focus

– Fill product gaps – Geographical/ market expansion Strategic rationale Recent cases

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Entrance Automation shows attractive growth & returns

Autom atic Doors I ndustrial doors Gate autom ation Total Market size € ~ 2-2.5 bn € ~ 8-10 bn € ~ 3-4 bn € ~ 15bn Of which Europe € ~ 1 bn € ~ 5-6 bn € ~ 1.5-2 bn € ~ 8-9 bn Observed growth rates

  • 5 to + 10%
  • 25 to + 15%
  • 10 to + 25%

Typical EBITDA marg 5-20% 5-15% 10-25%

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Cardo is a leading supplier of industrial doors and logistics systems, wastewater treatment systems, process equipment for the pulp and paper industry and garage doors 8,100 MSEK Sales 4.6 BSEK EBIT 11%1) Service share 45% 3.2 BSEK 0.3 BSEK

1) Adjusted for items affecting comparability of BSEK 0.1

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ASSA ABLOY Entrance Automation

Products for all door opening applications

Commercial applications Residential applications Industrial applications

Swing Doors Revolving Doors Entrance Industrial Doors Garage Doors Garage Doors Garage Doors Sliding Doors Sliding Doors

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Service operations

  • Large service synergies
  • Global key accounting
  • Complete service offering
  • More than 2,000 mobile technicians
  • 45% of turnover aftermarket

related

  • Bolt on service companies
  • Large potential in emerging

markets

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Cardo going forward

  • Intention is to grow and develop Cardo’s business
  • Global key accounting and bolt on service
  • Increase investments in R&D, new products
  • The company has gone through the recession in a good way and is now

ready for growth

  • ASSA ABLOY always make use of talent and management in acquired

companies

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Future Entrance Systems division

Entrance Systems

Sales BSEK 8.8 EBIT 12.5%

Ditec/ Entrematic

Indirect

Industrial doors

Direct

Automatic doors

Direct

Sales BSEK 0 .9 EBI T 8 % ( Ditec and Entrem atic) Sales BSEK 4 .6 EBI T 1 1 % 1 ) ( Cardo) Sales BSEK 3 .3 EBI T 1 7 % ( Entrance System s) ( Agta Record Sales BSEK 2 .0 , 3 8 % )

1) Adjusted for items affecting comparability of BSEK 0.1

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19

Tomas Eliasson, CFO

Financing & time table

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Financial effects for ASSA ABLOY

BSEK 2 0 0 9 Jan-Sep 2 0 1 0 2 0 0 9 Jan-Sep 2 0 1 0 2 0 0 9 Jan-Sep 2 0 1 0 Sales 3 5 .0 2 7 .2 8 .8 5 .6 4 3 .8 3 2 .8 EBI T 5 .4 1 ) 4 .4 0 .8 2 ) 0 .5 3 ) 6 .2 4 ) 4 .9 4 ) EBI T m argin ( % ) 1 5 .5 1 6 .3 8 .7 8 .3 1 4 .1 1 5 .0 Net Debt 1 1 .0 1 0 .9 0 .2 0 .1 2 2 .6 5 ) 2 2 .3 5 ) Average no. of em ployees 2 9 ,3 7 5 3 7 ,2 4 9 5 ,5 9 9 5 ,3 3 7 3 4 ,9 7 4 4 2 ,5 8 6 Com bined Cardo ASSA ABLOY

1) Excluding items affecting comparability of approximately BSEK 1.0 2) Excluding items affecting comparability of approximately BSEK 0.2 3) Excluding items affecting comparability of approximately BSEK 0.1 4) Not adjusted for amortizations of any excess value that arises in connection with the acquisition 5) Combined net debt for both companies at end of period including total offer consideration for 100% of the shares in Cardo

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Financing

Financing

  • Committed bridge facility from SEB of BSEK 14 done
  • BSEK 14 bridge to be resettled during 2011, mainly on capital markets
  • Covers Cardo and other acquisitions

Key ratios

  • Total net debt BSEK 22.31) and gearing around 110%
  • Net debt / LTM EBITDA 2.82)
  • Equity ratio 36%
  • Key debt ratios will improve fast due to strong and stable cash flow

1) Combined net debt for both companies at end of period including total offer consideration for 100% of the shares in Cardo 2) EBITDA adjusted for items affecting comparability of BSEK 1

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The offer

  • Offer price of SEK 420 per share
  • The total value of the offer amounts to approximately BSEK 11.3

– Premium of 48 percent compared to the latest closing (December 10)

  • Offer subject to regulatory approvals
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Preliminary timetable

  • ASSA ABLOY announces public offer

13 December 2010

  • Offer document published

1 February 2011

  • Acceptance period

4-25 February 2011

  • Payment to shareholders

7 March 2011

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24

Q&A