Q4 Report 2014 Johan Molin President & CEO 1 Financial - - PowerPoint PPT Presentation

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Q4 Report 2014

Johan Molin President & CEO

Financial highlights Q4 2014

• Strong ending of the year

– Strong growth in Americas, Global Tech and ESD – Growth in EMEA – Decline in APAC due to strict credit policy and weak market in China – Strong cash flow

• Sales

1 5 ,8 4 7 MSEK + 2 0 %

3% organic, 8% acquired growth, 9% currency

• EBI T

2 ,6 8 1 MSEK + 2 2 % Currency effect 209 MSEK

• EPS

5 .1 0 SEK + 2 5 % Underlying tax rate 26%

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Financial highlights Jan-Dec 2014

• A very solid year w ith strong continued progress

– US market turning strong – Europe divided – Emerging markets slowing, especially China in Q4 – Big success from innovative products – Good contribution from acquisitions

• Sales

5 6 ,8 4 3 MSEK + 1 7 % 3% organic, 9% acquired growth, 5% currency

• EBI T

9 ,2 5 7 MSEK + 1 7 % Currency effect 349 MSEK

• EPS

1 7 .3 8 SEK + 1 7 % Underlying tax rate 26%

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• Strong progress of Government ID

– New orders; Ireland, Saudi Arabia, Angola – First National ID card in EU based on E-passport

• Strong demand in the US for home automation

– Home automation drives Digital Door Lock sales

• Starwood mobile keys show good progress

– 150 first hotels under installation

• Sustainability in good progress

– New products create sustainable total door solutions – Good progress of KPIs in manufacturing

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Market highlights

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Group sales in local currencies Jan-Dec 2014

2 + 2 1 3 6 + 2 6 1 6 + 3 4 + 7 1 + 1 7

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

4 1 + 6

Em erging m arkets 2 5 % of sales

• 15
• 10
• 5

5 10 15 20 25 30 29 000 32 000 35 000 38 000 41 000 44 000 47 000 50 000 53 000 56 000 59 000

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 Q4 + 1 1 % Organic + 3 % Acquired + 8 %

Sales MSEK Growth, %

Operating income (EBIT* ), MSEK

4 500 5 000 5 500 6 000 6 500 7 000 7 500 8 000 8 500 9 000 9 500 900 1 100 1 300 1 500 1 700 1 900 2 100 2 300 2 500 2 700 2007 2008 2009 2010 2011 2012 2013 2014

Quarter Rolling 12-months

Quarter 12-months

Run rate 9 ,2 5 7 MSEK ( 7 ,9 2 3 ) + 1 7 %

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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 Q4

• 0 .2 %

2 0 1 4 -0 .3 %

Operating margin (EBIT), %

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

Long term target range ( average)

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EBIT Margin

Manufacturing footprint

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• Status manufacturing footprint programs 2006-2013:

– 64 factories closed to date, 16 to go – 77 factories converted to assembly, 12 to go – 36 offices closed, 11 to go

• Personal reduction QTD 459p and total 9,414p
• 570p in further planned reductions

 941 MSEK of the provision remains for all programs

Margin highlights Q4 2014

EBI T m argin 1 6 .9 % ( 1 6 .6 ) + 0 .3 % + Volume increase 2% , price 1% + Margin increase + 0.3% + Organic growth + Manufacturing footprint + Currency + 0.2%

• Acquisitions -0.2%

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Acquisitions 2014

• Fully active pipeline
• 20 acquisitions done in 2014
• Annualized sales 2,600 MSEK
• Added sales 5.4%

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Digi Electronic Lock, China

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• Turnover of 300 MSEK with 620

employees

• The leading digital door lock

manufacturer in China

• Complete product range for the

mid to low segments

• Complements our current product

range

• Accretive to EPS

ODIS, Chile

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• Turnover of 120 MSEK with 240

employees

• Leading supplier of locks and

padlocks in Chile

• Adds complementary market

segments

• Enables total door opening

solutions

• Accretive to EPS

Silvana and Metalika, Brazil

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• Combined turnover of 250 MSEK

with 410 employees

• Market leading companies for

locks and fire doors in Brazil

• Complements existing business

in Brazil

• Accretive to EPS

Division - EMEA

• Strong growth in Germany, Iberia, Eastern Europe

and Africa

• Good growth in Scandinavia
• Flat in the UK, Italy and Israel
• Negative in Benelux, France and Finland
• Continued investment in sales and R&D
• Operating margin (EBIT)

+ Organic 2% + Slight leverage due to savings

• Dilution & Currency -0.4%

SALES share of Group total %

25

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

Division - Americas

• Strong growth in AHW, Doors, El-mech, Residential

and South America

• Good growth in High Security, Canada and Mexico
• Investment in R&D and spec salesmen
• Strong quoting activity
• Operating margin (EBIT)

+ Organic 8% + Strong leverage from efficiency

• Currency & Dilution -0.2%

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SALES share of Group total %

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18 19 20 21 22 23 2009 2010 2011 2012 2013 2014 EBI T %

Division - Asia Pacific

• Strong growth in Australia, New Zealand, SEA and

North Asia

• Strong decline in China due to strict credit policy and

weak market

• Strong contribution from efficiency works in China
• Strategic addition of Digi Electronic Lock
• Operating margin (EBIT)
• Organic -7%

+ Efficiency in China + Positive sales mix + Positive dilution + 0.3%

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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

– Strong growth in Gov-ID, Biometrics and IDT (inlays) – Good growth in IAM (Identity and access management) – Flat sales in Project sales – Austin move almost completed

• Hospitality

– Strong growth – Maintained strong profit

• Operating margin (EBIT)

+ Organic 5% + Positive sales mix + Currency + 1.0%

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SALES share of Group total %

14 15 16 17 18 19 20 21 2009 2010 2011 2012 2013 2014 EBI T %

Division - Entrance Systems

• Strong growth in Door Automatics, High Speed

Doors, Flexiforce, Amarr and 4Front

• Decline in Industrial and Residential EU and Ditec
• Price pressure in EU
• Good progress in newly acquired companies
• Operating margin (EBIT)

+ Organic 4% + Efficiency improvement

• Price pressure in EU and Mix
• Dilution -0.6%

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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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Q4 Report 2014

Carolina Dybeck Happe CFO

Financial highlights Q4 2014

MSEK 2013 2014 Change 2013 2014 Change

Sales 13,242 15,847 +20% 48,481 56,843 +17% Whereof Organic growth +3% +3% Acquired growth +8% +9% FX-differences +1,129 +9% +2,138 +5% Operating income (EBIT) 2,202 2,681 +22% 7,923 9,257 +17% EBIT-margin (%) ) 16.6 16.9 16.3 16.3 Operating cash flow 2,541 3,469 +37% 6,803 8,238 +21% EPS (SEK) 4.08 5.10 +25% 14.84 17.38 +17%

4th Quarter Twelve months

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Bridge Analysis – Oct-Dec 2014

MSEK

2013 Oct-Dec Organic Currency Acq/ Div 2014 Oct-Dec

3% 9% 8% 20%

Revenues

13,242 363 1,129 1,113 15,847

EBIT

2,202 113 209 157 2,681

%

16.6% 31.2% 18.6% 14.1% 16.9%

Dilution / Accretion

0.3% 0.2%

• 0.2%

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P&L Components as % of sales Jan – Dec 2014

• Direct material

35.0% 35.4% 36.5%

• Conversion costs

25.5% 25.4% 24.9%

• Gross Margin

39.5% 39.2% 38.6%

• S, G & A

23.2% 22.6% 22.3%

• EBIT

16.3% 16.6% 16.3% 2 0 1 4

YTD excluding acquisitions

2 0 1 3

YTD

2 0 1 4

YTD

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Operating cash flow, MSEK

3 500 4 500 5 500 6 500 7 500 8 500 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 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 6 2 ( 6 8 ) Net debt/ EBI TDA 2 .1 ( 2 .2 )

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Net Debt Gearing

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

Earnings per share, SEK

8,00 9,00 10,00 11,00 12,00 13,00 14,00 15,00 16,00 17,00 18,00 0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50 4,00 4,50 5,00 5,50 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.

2 0 1 4 EPS + 1 7 % Dividend proposal 2 0 1 5 : 6 .5 0 SEK ( 5 .7 0 ) Stock split proposal 3 :1

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Q4 Report 2014

Johan Molin President & CEO

Conclusions Q4 2014

• Strong growth by 20% with 3% organic

– Strong in US – Europe divided – Emerging markets slowing, especially China

• New products very successful, 32% of sales
• Strong EBIT improvement of 22%
• Very strong cash flow + 37%

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Q&A