Assa Abloy Ab Class B · OMXSTO:ASSA_B
Assa Abloy Ab Class B — Q1 2003 Earnings Presentation
28 slides from Assa Abloy Ab Class B's earnings presentation, 2003
Slide 1: First Quarter Report 2003
The ASSA ABLOY Group is the world’s leading manufacturer and supplier of locking solutions, dedicated to satisfying end-user needs for security, safety and convenience. First Quarter Report 2003
Slide 2: ASSA ABLOY's ambition is to provide the best locking solutions
ASSA ABLOY’s ambition is to provide the best locking solutions, making the world safer and more secure The ASSA ABLOY Group includes 50 of the world’s top locking brands. We employ around 30,000 highly skilled men and women in more than 100 companies. And we are present in 130 countries. Our annual
Slide 3: ASSA ABLOY 1994 to 2002: The creation of a global leader
ASSA ABLOY 1994 to 2002 The creation of a global leader ¾ Sales from SEK 3 billion to SEK 25 billion, 30% per year ¾ Pre-tax profit from SEK 70 M to SEK 2 015 M, 50% per year ¾ Operating cash flow from SEK 100 M to SEK 3 525 M ¾ EBITA-margin increased from 4 to 14% ¾ EPS twenty fold – average up 45%
Slide 4: How we see the locks business
How we see the locks business ¾ Mature business – strong local standards, leaders and brands – barriers to entry ¾ Majority of sales to existing buildings – creates stability and recurring revenue ¾ Trend towards higher security – increasing need to protect life and property ¾ Growing intelligent lo
Slide 5: ASSA ABLOY's strategy
ASSA ABLOY’s strategy ¾ General – focus on locking solutions – lead the trend towards higher security – focus on EPS and cash flow ¾ Mature markets – multidomestic/acquisitions/local brands – benchmarking/cross learning – synergies/cross selling ¾ New markets – local leadership - organic growth – lo
Slide 6: Our way of working
Our way of working Leading the trend towards higher security
Slide 7: Our step by step Group development strategy
Our step by step Group development strategy Expand the market – upgrading of security Value – complete offering – partner concepts Leverage Group synergies – corporate identity Leverage – world leading technology – joint components – platforms Global platform – geographies – areas of expertise Prese
Slide 8: Financial goal for ASSA ABLOY
Financial goal for ASSA ABLOY – a 5-year perspective (excl. new acquisitions) ¾ 20% return on capital employed (including goodwill and amortizations) through – organic growth 2% above GDP over a business cycle – 2-3% margin improvement • stand alone improvement through local operation excellence • G
Slide 9: First Quarter Highlights
First Quarter Highlights ¾ Sales increase 9% in local currencies, flat organic growth ¾ Pretax profit – SEK 468 M (461) – up 2%, currency adjusted 13% ¾ Continued EBITA-margin improvement, 0.1 % ¾ Acquisition of Black & Decker’s European Security Hardware Division ¾ New organization to increase flex
Slide 10: New Organization
New Organization ¾ Bo Dankis, President & CEO ¾ Clas Thelin, Executive Vice President – Americas ¾ Hans Johansson, Executive Vice President – EMEA ¾ Geoff Norcott, Executive Vice President – Asia Pacific ¾ Göran Jansson, CFO & Executive Vice President – Global Technologies Business ¾ Åke Sund, Group
Slide 11: New Segments
New Segments SALES EBITA GLOBAL 12,5% GLOBAL 16,0% ASIA PACIFIC ASIA PACIFIC EMEA 5,2% EMEA 5,8% 42,2% 41,6% AMERICAS AMERICAS 36,0% 40,8%
Slide 12: The message
The message ¾ No change in objectives – ROCE 20% ¾ No change in strategies – Emphasis shifts to leverage and value ¾ Setting a higher pace with a trimmed executive team
Slide 13: Financial highlights Q1 2003
Financial highlights Q1 2003 SEK M 2003 2002 03/02 Sales 6,124 6,303 -3% Æ Organic growth 0% Æ Acquisitions 9% Æ FX – differences -12% EBITA-margin (%) 13.8 13.7 Income before taxes 468 461 2% Æ FX - differences -53 -11% Operating cash flow 564 643 -12% EPS (SEK) 0.82 0.81 1% EPS before GW (SEK) 1.4
Slide 14: Development 1994 to 2003 per quarter (SEK M)
Development 1994 to 2003 per quarter (SEK M) Sales Income before tax 7000 500 6000 400 5000 4000 300 3000 200 2000 100 1000 0 0 94 95 96 97 98 99 00 01 02 03 94 95 96 97 98 99 00 01 02 03
Slide 15: Development 1994 to 2003 per quarter
Development 1994 to 2003 per quarter EBITA-margin % SEK M Income before tax Op Cash Flow 16 1000 14 900 800 12 Yale 700 10 UDP 600 Medeco TESA 8 500 Vachette Besam 6 400 ESSEX Lockwood 300 4 200 2 100 0 0 94 95 96 97 98 99 00 01 02 03 94 95 96 97 98 99 00 01 02 03
Slide 16: Business review per segment: EMEA
Business review per segment EMEA EUR M First Quarter 2003 2002 03/02 2002 Sales 288 291 -1% 1,152 Æ Organic growth 0% EBITA 40 40 0% 155 EBITA – margin (%) 14.0 13.7 13.4 RoCE before goodwill (%) 29.4 26.3 27.0 Operating cash flow before paid interests 26 22 +18% 190
Slide 17: Business review per segment: EMEA, cont'd
Business review per segment EMEA , cont’d ¾ Nordic countries, Sweden in particular, develop in a positive way – driven by product launches and new sales channels ¾ CLIQ technology well received in Europe – gains overall market share in Germany ¾ France – encouraging development in DIY balances de-st
Slide 18: Business review per segment: Americas
Business review per segment Americas USD M First Quarter 2003 2002 03/02 2002 Sales 263 269 -2% 1,095 Æ Organic growth -1% EBITA 42 39 8% 178 EBITA – margin (%) 15.8 14.3 16.3 RoCE before goodwill (%) 38.1 33.9 39.2 Operating cash flow before paid interests 36 41 -12% 191
Slide 19: Business review per segment: Americas, cont'd
Business review per segment Americas, cont’d ¾ Strong margin improvement in slow markets ¾ Market direction still unclear in North America ¾ Increased market co-ordination between the different sales organizations ¾ Door business most affected by the slow market ¾ Continued successful growth of the
Slide 20: Business review per segment: Asia Pacific
Business review per segment Asia Pacific AUD M First Quarter 2003 2002 03/02 2002 Sales 72 66 9% 307 Æ Organic growth 9% EBITA 9 6 50% 39 EBITA – margin (%) 12.2 9.0 12.8 RoCE before goodwill (%) 24.1 15.7 17.3 Operating cash flow before paid interests 7 12 -42% 43
Slide 21: Business review per segment: Asia Pacific, cont'd
Business review per segment Asia Pacific, cont’d ¾ Continued good organic growth in Australia and New Zealand ¾ Impressive margin improvements – increased customer value through higher security offerings in the whole region ¾ Australia – the successful market expansion concept acts as role model for
Slide 22: Business review per segment: Global Technologies
Business review per segment Global Technologies SEK M First Quarter 2003 2002 03/02 2002 Sales 1,005 603 66% 3,285 Æ Organic growth 1% EBITA 110 102 450 EBITA – margin (%) 10.9 16.9 13.7 RoCE before goodwill (%) 39.7 56.1 45.0 Operating cash flow before paid interests 93 124 -25% 540
Slide 23: Business review per segment: Global Technologies, cont'd
Business review per segment Global Technologies, cont’d ¾ Strong growth in Door Automatics, after-market more than compensates weak new project sales ¾ Margin dilution caused by consolidation of Besam and Interlock – combined with start-up costs in the Hospitality Group ¾ Identification – continued
Slide 24: Outlook 2003
Outlook 2003 ¾ Stable volumes in a soft market with continued margin improvements and good cash generation ¾ Strong confidence that security driven demand will increase over time ¾ The Group intends to grow and increase profit by – leverage on its strong position – increased focus on customer value
Slide 25: ASSA ABLOY income statement and cash flow
ASSA ABLOY income statement and cash flow SEK M Q1 Q1 2003 2002 2002 Sales 6,124 6,303 25,397 Operating income before goodwill 846 863 3,595 amortization (EBITA) EBITA % 13.8 13.7 14.2 Goodwill amortization -244 -232 -957 Financial items -135 -171 -631 Income before taxes 468 461 2,015 Profit margin
Slide 26: ASSA ABLOY key data
ASSA ABLOY key data SEK M 31 Mar 31 Dec 2003 2002 Capital employed 26,452 26,701 - whereof goodwill 15,755 16,213 Net debt 13,702 13,989 Equity 12,435 12,381 Equity ratio 38.9% 38.2% Interest cover ratio 3.9 3.9 Net debt/equity 1.10 1.13 Operating return on capital employed 13.2% 13.4% Return on cap
Slide 27: ASSA ABLOY balance sheet
ASSA ABLOY balance sheet SEK M 31 Mar 31 Dec 2003 2002 Intangible fixed assets 15,927 16,386 Tangible and other fixed assets 6,681 6,843 Current assets 10,132 10,032 Total assets 32,740 33,261 Equity 12,435 12,381 Interest bearing debt 15,194 15,545 Other liabilities 5,111 5,335 Total equity and lia
Slide 28: Currency exposure %
Currency exposure % 50 45 40 35 30 USD 25 EUR 20 Other 15 SEK 10 5 0 Sales EBITA Income Net income before tax