Assa Abloy Ab Class B · OMXSTO:ASSA_B

Assa Abloy Ab Class B — Q4 2019 Earnings Presentation

34 slides from Assa Abloy Ab Class B's earnings presentation, February 2020

  1. Slide 1: ASSA ABLOY Q4 Report 2019

    ASSA ABLOY Q4 Report 2019 Public

  2. Slide 2: Stable growth and strong EBIT in Q4 2019

    Stable growth and strong EBIT in Q4 2019  Organic sales development – Strong growth in Americas – Good growth in Global Technologies – Stable growth in EMEA and Entrance Systems – Negative growth in APAC  Strong EBIT growth of 8% – Unchanged margin – higher M&A and R&D offset by mix, efficiencies

  3. Slide 3: Q4 2019 figures in summary

    Q4 2019 figures in summary  Sales SEK 24,946 M +8% Sales EBIT* – 1% organic 26 000 +8% +8% 4 600 – 3% acquired 25 000 4 400 – 4% currency 24 000 4 200 4 047 23 000  EBITA-margin* 16.8% (16.7%) 4 000 22 000 3 746 3 800  EBIT-margin* 16.2% (16.2%) 21 000 3 600 20 000  EBIT* SEK 4,047 M +8% 3 400 1

  4. Slide 4: Full year 2019 figures in summary

    Full year 2019 figures in summary  Sales SEK 94,029 M +12% Sales EBIT* – 3% organic 100 000 +12% +12% 17 000 – 3% acquired 95 000 16 000 – 6% currency 14 920 90 000 15 000  EBITA-margin* 16.4% (16.3%) 85 000 14 000  EBIT-margin* 15.9% (15.8%) 80 000 13 309 13 000 75 000 12 000  EBIT* SEK 14,920

  5. Slide 5: Sales by region Oct – Dec 2019

    Sales by region ASSA ABLOY 100 +4 +1 Emerging markets 18 -2 -4 Oct – Dec 2019 37 +1 +0 43 +8 +4 12 -7 -8 1 -15 -19 3 +16 +15 4 +38 +3 Change in local currencies Organic change Share of sales, % QTD 2019 vs. QTD 2018, % QTD 2019 vs. QTD 2018, % Emerging markets comprise follows IMF’s definition as pe

  6. Slide 6: Market highlights

    Market highlights • Strong project wins • Argentina Selects HID goID to Provide Citizens with World’s First Mobile National ID Program • US large retailer selects Entrance Systems loading dock solutions • New products in our mechanical core • Korea launched waterproof floor hinges • Global launch of

  7. Slide 7: CES Highlights

    CES Highlights • New product launches • August: August Wi-Fi Smart Lock • Yale • Liftmaster Lock, Linus Smart Lock and Smart Cabinet Lock • Smart Storage Line - & Smart Safe, Smart Delivery Box and Yale Access • Yale and Samsung reveal concept UWB lock for automatic unlock • Nine product awards at t

  8. Slide 8: Sales growth

    Sales growth 27 Quarters with positive OG % MSEK 20 100 000 18 95 000 16 90 000 14 85 000 12 80 000 10 75 000 8 70 000 6 65 000 4 60 000 2 55 000 0 50 000 2014 2015 2016 2017 2018 2019 Organic growth, % Acquired growth, % Sales in fixed currencies, MSEK 8 Public

  9. Slide 9: Operating margin

    Operating margin % % 18 18 Run rate: EBIT-margin 15.9% (15.8%*) 17 17 Long term target range (average) 16 16 15 15 14 14 13 13 2014 2015 2016 2017 2018 2019 Quarter EBIT Rolling 12-months EBITA** Rolling 12-months *) Excluding China write-downs and restructuring items. **) Operating margin before am

  10. Slide 10: Operating profit

    Operating profit MSEK +8% +12% +61% MSEK, 12 months 4 500 vs vs in 16 000 Q4 LY FY 5 years 4 000 14 000 3 500 12 000 3 000 10 000 2 500 8 000 2 000 6 000 1 500 4 000 1 000 500 2 000 0 0 2014 2015 2016 2017 2018 2019 Quarter Rolling 12-months *) Excluding China write-downs and restructuring items. 10

  11. Slide 11: Acquisitions

    Acquisitions  Fully active pipeline – 3 acquisitions completed in Q4 and 12 in 2019 – Acquired annualized sales of MSEK 2,500  Additional acquisitions to be closed – agta record  Sales of MEUR 378 and EBITA-margin of 12%* in 2018  Expected to close early 2020 – AM Group  Sales of MSEK 800  Exp

  12. Slide 12: AM Group, Australia

    AM Group, Australia  Sales of MSEK 800 with 425 employees  Industrial door company within Entrance Automation  Complements product offering and geographic coverage  Accretive to EPS from start 12 Public

  13. Slide 13: Opening Solutions EMEA

    Opening Solutions 22% EMEA of Group sales  Organic sales growth of 1% 6 000 19% – Good growth in Scandinavia, Germany and South Europe 5 500 18% – Stable growth in France and East Europe 5 000 17% – Negative growth in Finland, UK, Middle East & Africa, and Benelux 4 500 16% 4 000 15%  Operating ma

  14. Slide 14: Opening Solutions Americas

    Opening Solutions 24% of Americas Group sales  Organic sales growth of 5% 6 500 24% – Very strong growth for Electromechanical Solutions and Perimeter Security 6 000 23% – Strong growth for Residential Group, Canada, Security Doors and Architectural Hardware 5 500 22% – Good growth in Latin America

  15. Slide 15: Opening Solutions Asia Pacific

    Opening Solutions 10% Asia Pacific of Group sales  Organic sales growth of -10% 3 000 20% – Good growth in South Asia and Pacific – Negative growth in China, India and South Korea – Negative intra group sales 2 500 15%  Operating margin 8.2% (9.6%)* 2 000 10% – Negative leverage of -120bps, due to

  16. Slide 16: Global Technologies

    Global Technologies 17% of Group sales  Organic sales growth of 2% 4 500 24% – Very strong growth in Extended Access – Strong growth in Physical Access Control and Global 4 000 22% Solutions – Stable growth in Identity & Access Solutions 3 500 20% – Negative growth in Identification Technology, Sec

  17. Slide 17: Entrance Systems

    Entrance Systems 27% of Group sales  Organic sales growth of 0% 7 500 18% – Strong growth in Pedestrian Doors – Good growth in Logistics solutions 7 000 17% – Stable growth in High Performance Doors 6 500 16% – Negative growth in Industrial Doors, EU Residential Doors, US Residential Doors and Door

  18. Slide 18: Financial summary, Q4 2019

    Financial summary, Q4 2019 FX & acquisition ‘run-rate’ effects in Q1 2020 (31 Dec 2019): SALES FX: +1% Acq: +2% October-December January-December SEK M 2018 2019 Change 2018 2019 Change Sales 23,167 24,946 8% 84,048 94,029 12% - Organic growth 1,281 147 1% 3,901 2,652 3% - Acquired net growth 714 76

  19. Slide 19: Bridge analysis – Q4 2019

    Bridge analysis – Q4 2019 SEK M Q4 2018 Organic Currency Acq/Div Q4 2019 Growth 1% 4% 3% 8% Sales 23,167 147 872 760 24,946 Operating profit* 3,746 163 137 2 4,047 Operating margin, %* 16.2% 110.7% 15.7% 0.3% 16.2% Dilution/accretion 0.6 pts -0.1 pts -0.5 pts Sales up MSEK 1,779  Price +1% and volu

  20. Slide 20: Cost breakdown as % of sales Oct-Dec

    Cost breakdown as % of sales Oct-Dec QTD 2019 % QTD 2018* excl. acquisitions* Δ QTD 2019* Direct material -37.0% -36.1% +0.9 pts -36.1% Conversion cost -23.6% -23.7% -0.1 pts -23.9% Gross margin 39.4% 40.2% +0.8 pts 40.0% S, G & A -23.2% -23.5% -0.3 pts -23.8% EBIT 16.2% 16.7% +0.5 pts 16.2% • Direc

  21. Slide 21: Manufacturing Footprint Program

    Manufacturing Footprint Program  Initiatives in MFP7  Payback time of <3 years  Closure of ~15 factories and >30 offices  Restructuring cost for the full program MSEK 1,530  MSEK 1,218 in Q4 2018  MSEK 312 in Q4 2019  Annual savings of approximately MSEK 800 by 2021  Status of all MFPs in 20

  22. Slide 22: Operating cash flow, MSEK

    Operating cash flow, MSEK Quarter 12 months 6 000 20 000 12 months cash flow / EBT = 104% 18 000 5 000 16 000 14 000 4 000 12 000 3 000 10 000 8 000 2 000 6 000 4 000 1 000 2 000 0 0 2014 2015 2016 2017 2018 2019 Quarter, MSEK Cash rolling 12 months, MSEK EBT rolling 12 months, MSEK 22 Public

  23. Slide 23: Gearing % and net debt, MSEK

    Gearing % and net debt, MSEK Net debt/EBITDA 1.8 (1.9) Net debt Gearing 40 000 90 35 000 Debt/Equity 56%* (56%) 75 30 000 60 25 000 20 000 45 15 000 30 10 000 15 5 000 0 0 2014 2015 2016 2017 2018 2019* Net debt, MSEK Gearing, % *) IFRS 16 effect on net debt SEK 3.7 bn. 23 Public

  24. Slide 24: Earnings per share, SEK

    Earnings per share, SEK Quarter 12 months 2,50 10,00 YTD EPS +14%* 2,25 9,00 2,00 8,00 1,75 7,00 1,50 6,00 1,25 5,00 1,00 4,00 0,75 3,00 0,50 2,00 2014 2015 2016 2017 2018 2019 Quarter, SEK Rolling 12 months, SEK * Excluding restructuring items and impairment of intangible assets in China. Chart is

  25. Slide 25: Conclusions

    Conclusions  Q4 – Stable organic sales growth of 1% – Strong EBIT growth of 8%* – Cash flow of MSEK 5,235  Full year – Good organic growth of 3% – Strong EBIT growth of 12%* – Record cash flow of MSEK 14,442  Proposed dividend of SEK 3.85/share  Welcoming new heads of HID and Entrance Systems *)

  26. Slide 26: Q&A

    Experience a safer and more open world The ASSA ABLOY Group is the global leader in.access solutions. Every day we help people feel safe, secure and experience amore open world. ASSA ABLOY

  27. Slide 27: Appendix

    Appendix Public

  28. Slide 28: Cost breakdown as % of sales

    Cost breakdown as % of sales QTD 2019 YTD 2019 excl. excl. % QTD 2018* acquisitions* Δ QTD 2019* YTD 2018** acquisitions Δ YTD 2019* Direct material -37.0% -36.1% 0.9 pts -36.1% -36.2% -36.1% 0.1 pts -36.0% Conversion cost -23.6% -23.7% 0.1 pts -23.9% -24.2% -24.0% 0.2 pts -23.9% Gross margin 39.4%

  29. Slide 29: Opening Solutions EMEA’s bridge

    Opening Solutions EMEA’s bridge MSEK Q4 2018 Organic Currency Acq/Div Q4 2019 Growth 1% 2% -2% 1% Sales 5,485 32 148 -141 5,525 Operating income 911 -25 11 -13 884 Operating margin, % 16.6% -77.0% 7.7% 9.3% 16.0% Dilution/accretion -0.5 pts -0.3 pts 0.2 pts 12 months figures Sales 20,201 21,144 EBIT

  30. Slide 30: Opening Solutions Americas’ bridge

    Opening Solutions Americas’ bridge MSEK Q4 2018 Organic Currency Acq/Div Q4 2019 Growth 5% 5% 4% 14% Sales 5,173 269 248 210 5,900 Operating income 1,027 78 58 19 1,182 Operating margin, % 19.9% 28.8% 23.6% 9.0% 20.0% Dilution/accretion 0.4 pts 0.1 pts -0.4 pts 12 months figures Sales 19,817 23,172

  31. Slide 31: Opening Solutions Asia Pacific’s bridge

    Opening Solutions Asia Pacific’s bridge MSEK Q4 2018 Organic Currency Acq/Div Q4 2019 Growth -10% 3% 4% -3% Sales 2,756 -279 85 115 2,676 Operating income* 264 -57 7 6 220 Operating margin, %* 9.6% 20.5% 7.8% 5.3% 8.2% Dilution/accretion -1.2 pts -0.1 pts -0.1 pts 12 months figures Sales 9,949 10,68

  32. Slide 32: Global Technologies’ bridge

    Global Technologies’ bridge MSEK Q4 2018 Organic Currency Acq/Div Q4 2019 Growth 2% 6% 14% 22% Sales 3,602 69 165 541 4,377 Operating income 716 71 35 -23 800 Operating margin, % 19.9% 102.4% 21.3% -4.2% 18.3% Dilution/accretion 1.4 pts 0.2 pts -3.2 pts 12 months figures Sales 11,951 15,423 EBIT 2,3

  33. Slide 33: Entrance Systems’ bridge

    Entrance Systems’ bridge MSEK Q4 2018 Organic Currency Acq/Div Q4 2019 Growth 0% 4% 0% 4% Sales 6,616 8 241 27 6,893 Operating income 998 94 28 4 1,125 Operating margin, % 15.1% 1129.6% 11.6% 15.9 16.3% Dilution/accretion 1.3 pts -0.1 pts 0.0 pts 12 months figures Sales 23,762 25,553 EBIT 3,358 3,65

  34. Slide 34: Thank you

    Thank you assaabloy.com Public

Assa Abloy — Q4 2019 Earnings Presentation on 6ix