Assa Abloy Ab Class B · OMXSTO:ASSA_B
Assa Abloy Ab Class B — Q4 2009 Earnings Presentation
29 slides from Assa Abloy Ab Class B's earnings presentation, 2010
Slide 1: Q4 Report 2009
Q4 Report 2009 1
Slide 2: ASSA ABLOY overview
ASSA ABLOY overview Financials (SEK bn) Sales by product group Dec 2009 Net sales 35.0 Security doors & fittings, 20% EBIT 5.4 Op cash flow 6.8 Mech. Locks & systems, 45% Net debt 11.0 Market cap 48 Electromech & electronic locks, 35% Sales by region Dec 2009 Leading market positions Competitors 46%
Slide 3: Financial Highlights Q4 2009
Financial Highlights Q4 2009 ▪ Higher margin in slightly improved market – Good trend in EMEA, Global Technologies and Entrance Systems – Asia Pacific in strong growth – USA weak – Large efficiency gains supported strong EBIT – Record cash flow ▪ Sales 8,799 MSEK -7% -8% organic, +3% acquired growth
Slide 4: Financial Highlights Jan-Dec 2009
Financial Highlights Jan-Dec 2009 ▪ Excellent performance in a tough year – Total growth 0% – Maintained EBIT through efficiency and currency gains ▪ Sales 34,963 MSEK +0% -12% organic, +3% acquired growth, +9% currency ▪ EBIT 5,413 MSEK* -2% Currency effect +643 MSEK ▪ EPS 9,22 SEK +0% * Excluding
Slide 5: Sales Highlights Q4
Sales Highlights Q4 ▪ Growing sales in several parts of the world – Scandinavia, UK, Africa, Asia and Pacific are growing ▪ Maintained investment in R&D – Reinforced product leadership ▪ Large number of new products reinforces competitiveness – Global platforms ▪ Maintained market presence – Success
Slide 6: Group Sales in Local Currencies Jan-Dec
Group Sales in Local Currencies Jan-Dec 2009 46 -7 35 -15 10 +7 2 +5 2 -10 5 -7 Share of Group sales 2009 YTD, % Year-to-date vs previous year, % 6
Slide 7: Sales Growth Q4 2009 - Currency Adjusted
Sales Growth Q4 2009 - Currency Adjusted 2009 Q4 -5% 15 39 000 38 000 Organic -8% 14 13 37 000 Acquired +3% 12 11 36 000 10 9 35 000 8 34 000 7 6 33 000 5 4 Sales, MSEK 32 000 3 Growth % 31 000 2 1 30 000 0 -1 29 000 -2 28 000 -3 -4 27 000 -5 -6 26 000 Demand is levelling -7 -8 25 000 24 000 except
Slide 8: Operating Income (EBIT) MSEK
Operating Income (EBIT) MSEK 1 500 5 700 5 500 1 400 5 300 1 300 5 100 1 200 4 900 1 100 4 700 4 500 1 000 4 300 900 Continued strong EBIT 4 100 800 Run rate 5,413 MSEK 3 900 (5,526), -2% 3 700 700 3 500 600 3 300 500 3 100 05 06 07 08 09 20 20 20 20 20 Quarter 12-months Quarter Rolling 12-months 8
Slide 9: Operating Margin (EBIT)
Operating Margin (EBIT) 17,0 Run rate 2009 15.5% (15.9) 16,0 15,0 EBIT % 14,0 13,0 12,0 11,0 05 06 07 08 09 20 20 20 20 20 Quarter Rolling 12-months Long Term Target 9
Slide 10: Manufacturing Footprint
Manufacturing Footprint 2006 and 2008 programs ▪ Great improvements achieved in efficiency since start ▪ Conversion to assembly or closures in high cost countries ▪ Consolidation of core production to China and Czechia ▪ 36 production facilities closed to date, 4 to go ▪ Personnel reduction 4 631p,
Slide 11: Manufacturing Footprint – New Program
Manufacturing Footprint – New Program Catch the Momentum ▪ Great improvements achieved since start ▪ Conversion to assembly in high cost countries ▪ 11 closures and conversion to assembly of 4 sites. ▪ In addition 11 office sites to be closed. ▪ Cost 930 MSEK and reduction of 1,200 people in HCC → 1
Slide 12: Personnel Development
Personnel Development Incl. acquisitions 34 000 from Q4 2007 33 000 32 000 -3% 31 000 -10% No of People 30 000 29 000 28 000 -8,174 people EMEA -15% 27 000 organically from -12% Americas -20% Global Tech -17% 26 000 Q4 2007 25 000 24 000 2007 2008 2009 Personnel Total Personnel Organic 12
Slide 13: Margin Highlights Q4 2009
Margin Highlights Q4 2009 EBIT margin 15.9% (15.6) - Volume downturn - Depreciation dilutes + Manufacturing footprint, 36 sites closed + Contingency and manufacturing plans 3,898 people left YTD, 12% less 25% reduction in personnel since downturn = S, G & A cost reduction in line with sales decline
Slide 14: Acquisitions 2009
Acquisitions 2009 ▪ From hold to fully active on acquisitions – Growing pipeline with target 5% growth ▪ 8 acquisitions completed in 2009 – Annualized 1,175 MSEK, +3.4% ▪ Pan Pan, China, awaiting final approval in Q1 – Adds 1,200 MSEK annualized from consolidation, +3.4% ▪ In total 9 acquisitions –
Slide 15: Yale Colombia (Cerracol)
Yale Colombia (Cerracol) ▪ Strategic move into emerging markets ▪ Market leader in Central America ▪ Based in Bogota, Colombia ▪ Manufactures Yale products since 1983 ▪ 425 employees and SEK 140 M sales 15
Slide 16: Division - EMEA
Division - EMEA SALES ▪ Levelling in most markets share of Group total % ▪ Scandinavia, UK and Africa are growing 38 ▪ Downturn in Italy and East Europe continued ▪ EBIT strongly improved on the back of savings ▪ Vachette and Assa Lycksele closed ▪ Operating margin (EBIT) EBIT % - Volume -3% 18 17 +
Slide 17: Division - Americas
Division - Americas SALES ▪ Continued decline in the commercial and share of residential market Group total % ▪ Canada, Mexico and Brazil less hit 28 ▪ Door Group suffering the most ▪ Strong EBIT margin through savings ▪ Reduction of commercial construction continuous at least 6 months EBIT % 21 ▪ O
Slide 18: Division - Asia Pacific
Division - Asia Pacific SALES ▪ Good evolution of sales in all units share of Group total % ▪ Australia and New Zealand growing 10 ▪ Profit improved on the back of growth ▪ Investing in capacity within China doors ▪ Currency gains in AUD and NZD EBIT % ▪ Operating margin (EBIT) 16 15 + Volume +10% 1
Slide 19: Division - Global Technologies
Division - Global Technologies SALES ▪ Good demand in Asia Pacific and flat in Europe share of Group total % ▪ HID 13 – Access control; projects resumed and growing – Secure issuance; reduced due to low project activity – Identification Solutions; no change of negative trend ▪ Hospitality, no change
Slide 20: Division - Entrance Systems
Division - Entrance Systems SALES ▪ Markets stabilizing with good Asian growth share of Group total % ▪ Service sales in healthy growth 11 ▪ Very dynamic effects on product costs through standardisation and LCC manufacturing ▪ USA profit strongly improved ▪ Ditec reinforces global leadership but dil
Slide 21: Financial Highlights Q4 2009
Financial Highlights Q4 2009 4th Quarter Twelve months MSEK 2008 2009 Change 2008 2009 Change Sales 9,444 8,799 -7% 34,829 34,963 +0% Whereof Organic growth -8% -12% Acquired growth +3% +3% FX-differences -185 -2% +3,491 +9% Operating income (EBIT)* 1,469 1,398 -5% 5,526 5,413 -2% EBIT-margin (%)* 1
Slide 22: Cost Development
Cost Development 12 Months Rolling Variable & Fixed Conversion Cost Group Year-on-Year Changes in Cost 5% 0% 2008 2009 Fixed -5% -11% Jan-Dec Variable: -14% -10% Fixed: - 6% Variable -15% Variable conversion Fixed conversion Adjusted for currency and acquisitions Conversion cost = all fixed and vari
Slide 23: Cost Development
Cost Development 12 Months Rolling S, G & A (incl R&D) Group Year-on-Year Changes in Cost 10% 5% -12% Jan-Dec 0% 2008 2009 -5% -10% -15% Adjusted for currency and acquisitions S, G & A cost = Selling, administrative and R&D costs 23
Slide 24: Bridge Analysis – Jan-Dec 2009
Bridge Analysis – Jan-Dec 2009 2008 Organic 2009 MSEK Jan-Dec Growth Currency Acq/Div Jan-Dec ASSA ABLOY Group -12% 9% 3% 0% Revenues 34,829 -4,586 3,491 1,229 34,963 EBIT 5,526 -914 643 158 5,413 % 15.9% 19.9% 18.4% 12.9% 15.5% 24
Slide 25: Operating Cash Flow, MSEK
Operating Cash Flow, MSEK 7 000 6 500 2 000 6 000 1 500 5 500 12-months Quarter 5 000 1 000 4 500 4 000 500 3 500 0 3 000 2005 2006 2007 2008 2009 Quarter Rolling 12-months 25
Slide 26: Gearing % and Net Debt MSEK
Gearing % and Net Debt MSEK 16 000 120 14 000 100 12 000 80 10 000 Net Debt Gearing 8 000 60 Debt/Equity 6 000 57 (74) 40 4 000 20 2 000 0 0 2005 2006 2007 2008 2009 Net debt Gearing 26
Slide 27: Earnings per Share and Proposed Dividend, SEK
Earnings per Share and Proposed Dividend, SEK 10,00 9,00 EPS 2009 *) 9.22 (9.21) Proposed Dividend 3.60 (3.60) 8,00 7,00 6,00 EPS 5,00 4,00 3,00 2,00 Dividend 1,00 0,00 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 *) Excluding restructuring charges 27
Slide 28: Conclusion Q4 2009
Conclusion Q4 2009 ▪ Higher margin in slightly improved market ▪ Maintained investments in R&D and market presence ▪ Strong cash flow ▪ Back to active on acquisitions ▪ Strategic expansion into emerging markets through Pan Pan and Yale Colombia 28
Slide 29: Outlook
Outlook Long Term ▪ Organic sales growth is expected to continue at a good rate ▪ The operating margin (EBIT) and operating cash flow are expected to develop well Outlook for 2010 ▪ Flat organic growth is expected 29