Q1 Report 2014 Johan Molin President & CEO 1 Financial - - PowerPoint PPT Presentation

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Q1 Report 2014

Johan Molin President & CEO

Financial highlights Q1 2014

• Continued good developm ent

– 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

1 2 ,3 0 5 MSEK + 1 3 % 4% organic, 8% acquired growth, 1% currency

• EBI T

1 ,8 5 7 MSEK + 1 2 % Currency effect 13 MSEK

• EPS

3 .4 1 SEK + 1 1 % Underlying tax rate 26%

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• 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

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Market highlights

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Group sales in local currencies Jan-Mar 2014

2 + 1 5 3 5 + 2 3 1 3 + 2 4 + 9 1 + 2 2

Share of Group sales 2 0 1 4 YTD, % Year-to-date vs previous year, %

4 5 + 7

Em erging m arkets 2 2 % of sales

• 15
• 12
• 9
• 6
• 3

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 Fixed Currencies

Sales growth, currency adjusted

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2 0 1 4 Q1 + 1 2 % Organic + 4 % Acquired + 8 %

Sales MSEK Growth, %

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 ,1 1 8 MSEK ( 7 ,5 0 9 ) + 8 %

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12,0 13,0 14,0 15,0 16,0 17,0 2007 2008 2009 2010 2011 2012 2013 2014

Quarter Rolling 12-months

2 0 1 4 Dilution Q1

• 0 .5 %

2 0 1 4 FC -0 .4 %

Operating margin (EBIT), %

Run rate 2 0 1 4 1 6 .3 % ( 1 6 .1 )

Long term target range ( average)

7

EBIT Margin

Manufacturing footprint

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• 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

Margin highlights Q1 2014

EBI T m argin 1 5 .1 % ( 1 5 .3 ) -0 .2 % + Volume increase + 3% , price + 1% + Margin decrease -0.2% + Organic growth + Manufacturing footprint + Efficiency improvements

• Acquisitions -0.5%

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Acquisitions 2014

• Fully active pipeline
• 4 new acquisitions in 2 0 1 4
• Annualized sales 4 0 0 MSEK
• Com pleted acquisitions 2 0 1 4

 Lumidigm  Unilock  Safeguard  Traka

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Safeguard, Norway

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• Turnover of 240 MSEK with 110

employees

• Strong presense in Oslo and oil

industry

• Good fit with ASSA ABLOY

locksmith chain

• Accretive to EPS

Unilock, Korea

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• 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

Lumidigm, USA

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• Turnover of 160 MSEK with 33

employees

• Authentication based on

advanced fingerprint biometrics

• Utilizes multispectral imaging

technology

• Unique patented technology
• Neutral to EPS

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 EBI T %

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% )

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SALES share of Group total %

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18 19 20 21 22 2009 2010 2011 2012 2013 2014 EBI T %

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% )

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SALES share of Group total %

5 7 9 11 13 15 17 2009 2010 2011 2012 2013 2014 EBI T %

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% )

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SALES share of Group total %

13 14 15 16 17 18 19 20 2009 2010 2011 2012 2013 2014 EBI T %

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% )

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SALES share of Group total %

11 12 13 14 15 16 17 18 2009 2010 2011 2012 2013 2014 EBI T %

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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 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

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* ) Excluding restructuring items of 1,000 MSEK for the full year 2013.

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%

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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% 2 0 1 4

Q1 excluding acquisitions

2 0 1 3

Q1

2 0 1 4

Q1

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Operating cash flow, MSEK

3 000 3 500 4 000 4 500 5 000 5 500 6 000 6 500 7 000 7 500 8 000 500 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

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Quarter 12 months

Gearing % and net debt MSEK

20 40 60 80 100 120 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 7 2 ( 5 7 ) Net debt/ EBI TDA 2 .3 ( 1 .8 )

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Net Debt Gearing

* ) 2007-2011 Not restated for changed pension accounting principles.

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

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* ) Excluding restructuring costs of 1,000 MSEK in Q4 and full year 2013. * * ) 2007-2011 Not restated for changed pension accounting principles.

Since 2 0 0 6 EPS + 9 0 % Dividend 2 0 1 4 : 5 .7 0 SEK ( 5 .1 0 )

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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 and Africa with strong growth

• Dilution from acquisitions (-0.5% )
• Efficiency improvements supports profit
• EBIT improvement of 12% to 1,857 MSEK

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Q&A