Slide 1: ASSA ABLOY Q2 interim report 2023
ASSA ABLOY Q2 interim report 2023
Slide 2: Strong performance in Q2
Strong performance in Q2 Organic sales development – Very strong sales growth in Global Technologies – Good sales growth in Americas – Stable sales in Entrance Systems – Sales decline in APAC and EMEIA Record EBIT and strong margin improvement Record operating cash flow Consolidation of HHI
Slide 3: Q2 2023 figures in summary
Q2 2023 figures in summary Sales EBIT*^ +17% +29% Sales MSEK 34,474 +17% – +3% organic 36 000 6 500 – +6% acquired and divested 34 000 6 000 – +8% currency 5 684 32 000 5 500 EBITA-margin*^ 17.3% (15.5%) 30 000 5 000 28 000 EBIT-margin*^ 16.7% (15.0%) 4 500 26 000 4 406 4 000 EBIT*^ MSEK 5,6
Slide 4: Sales by region Apr-Jun 2023
Sales by region ASSA ABLOY 100 9 3 Emerging markets 14 10 3 Apr-Jun 2023 33 4 -2 51 11 5 8 12 9 1 13 13 3 23 5 4 16 11 Change in local currencies Organic change Share of sales, % QTD 2023 vs. QTD 2022, % QTD 2023 vs. QTD 2022, % Emerging markets follows IMF’s definition as per 2018-12-31 4
Slide 5: Q2 2023 Market highlights
Q2 2023 Market highlights Project wins – Service contracts won for 5,000 pedestrian doors and 500 trailer restraints at a retailer in North-America – Significant mobile credential wins A leading Cruise Line company to invest in locking systems with mobile key capabilities Significant physical ac
Slide 6: FX adjusted sales growth
FX adjusted sales growth % MSEK 30 140 000 25 130 000 20 120 000 15 110 000 10 5 100 000 0 90 000 -5 80 000 -10 70 000 -15 -20 60 000 2018 2019 2020 2021 2022 2023 Organic growth, % Acquired growth, % Sales in fixed currencies, MSEK 6
Slide 7: Operating margin
Operating margin 16.2% EBIT-margin % Run rate: EBIT-margin 15.8% (15.0%) rolling 12 months ex. HHI/div 19 18 17 Long term target range (average) 16 15 14 13 12 11 10 2018 2019 2020 2021 2022 2023 Quarter EBIT* Rolling 12-months EBIT* ex acq/div last 12 months EBITA* Rolling 12-months *) Operating ma
Slide 8: Operating profit
Operating profit MSEK MSEK 6 000 22 500 20 000 5 000 17 500 4 000 15 000 12 500 3 000 10 000 2 000 7 500 5 000 1 000 2 500 0 0 2018 2019 2020 2021 2022 2023 Quarter Rolling 12-months Excluding items affecting comparability 8
Slide 9: Acquisitions
Acquisitions Active pipeline – 4 acquisitions signed in Q2 – 8 acquisitions signed in H1 – Representing annualized sales of SEK 17 bn Hardware & Home Improvement 9
Slide 10: Welcome HHI!
Welcome HHI! 10
Slide 11: Opening Solutions EMEIA
Opening Solutions 18% EMEIA of Group sales Organic sales -5% – Strong growth in Middle East/India/Africa 6 500 21% – Sales decline in South Europe, Central Europe, 19% UK/Ireland and significant sales decline in the Nordics 6 000 17% Operating margin 12.5% (14.4%) 5 500 15% – Strong operating le
Slide 12: Opening Solutions Americas
Opening Solutions 25% of Americas 24.1% Group sales Q2 operating margin excl. Organic sales +4% HHI/div – Very strong sales growth in US Residential, Access & 9 000 25% High Security and Canada – Good growth in Architectural Hardware and Security 24% 8 000 Doors 23% – Stable growth in Electromecha
Slide 13: Opening Solutions Asia Pacific
Opening Solutions 7% Asia Pacific of Group sales Organic sales -2% – Very strong sales growth in South-East Asia 3 000 15% – Stable sales in South Korea – Sales decline in Pacific and China 10% 2 500 Operating margin 7.8% (1.9%) 5% – Very strong operating leverage due to lower material 2 000 cos
Slide 14: Global Technologies
Global Technologies 17% of Group sales Organic sales +20% – Very strong sales growth in Physical Access Control 6 000 24% – Strong sales growth in Extended Access, Citizen ID and Identity & Access Solutions 5 500 22% – Good growth in Identification Technology 5 000 20% – Significant sales decline
Slide 15: Entrance Systems
Entrance Systems 34% of Group sales Stable organic sales – Strong sales growth in Pedestrian and Industrial 13 000 18% – Sales decline in Perimeter Security and significant sales decline in Residential 12 000 17% 11 000 – Strong growth in service 16% 10 000 15% Operating margin 16.2% (15.5%) 9 0
Slide 16: Financial summary
FX & acquisition ‘run-rate’ effects in Q3 2023 Financial summary (30 June 2023): SALES FX: 5% M&A: 11% April-June* January-June* SEK M 2022 2023 Change 2022 2023 Change Sales 29,466 34,474 17% 56,057 66,865 19% - Organic growth 3,324 897 3% 6,610 3,115 5% - Acquired net growth -16 2,002 6% -68 3,346
Slide 17: Bridge analysis – Q2 2023
Bridge analysis – Q2 2023 Q2 2023 ex MSEK Q2 2022 Organic Currency Acq/div HHI/div Q2 2023 HHI/div Growth 25% 3% 8% 5% 15% 2% 17% Sales 29,466 897 2,109 1,503 33,975 499 34,474 Operating profit* 4,406 677 355 247 5,684 -184 5,500 Operating margin, %* 15.0% 75.5% 16.8% 16.4% 16.7% -36.9% 16.0% Diluti
Slide 18: Financial summary: HHI
Byt bild Financial summary: HHI January-June 2023 (standalone proforma) – Sales of MUSD ~750 and an EBITDA-margin of 12% Financial effects – Dilutive effect on margin from HHI ~70bps and divestments ~20bps – Negative effect on EPS in 2023, accretive in 2024 Tax benefits (cash) of MUSD 50-60 pe
Slide 19: Synergies to be realized with HHI
Synergies to be realized with HHI Innovate and expand the mechanical and electromechanical offering Leverage strong brands MUSD internationally 100 Leverage manufacturing footprint Procurement and logistics efficiencies 19
Slide 20: Cost breakdown as % of sales – Q2 2023
Cost breakdown as % of sales – Q2 2023 QTD 2023 % QTD 2022 excl. acq/div Δ QTD 2023 Direct material -37.2% -34.6% +2.6 pts -35.2% Conversion cost -23.3% -23.7% -0.4 pts -23.5% Gross margin 39.5% 41.7% +2.2 pts 41.3% S, G & A -24.5% -25.0% -0.5 pts -25.3% EBIT* 15.0% 16.7% +1.7 pts 16.0% *) Excluding
Slide 21: Cost actions 2023
Cost actions 2023 MFP – Prioritized MFP projects with fast pay-back time MFP savings in 2023 – MSEK 400 in savings and 625 headcount reduction YTD MSEK ~800 Short-term cost measures (excl. MFP) – Reduced indirect spend Cost impact Travelling MSEK ~900 Marketing External services – Limited
Slide 22: Operating cash flow, MSEK
Operating cash flow, MSEK Quarter 12 months cash flow / EBT = 113% 12 months 8 000 22 500 7 000 20 000 17 500 6 000 15 000 5 000 12 500 4 000 10 000 3 000 7 500 2 000 5 000 1 000 2 500 0 0 2018 2019 2020 2021 2022 2023 Quarter, MSEK Cash rolling 12 months, MSEK EBT rolling 12 months, MSEK Excluding
Slide 23: Gearing % and net debt, MSEK
Gearing % and net debt, MSEK Net debt/EBITDA** 2.8 (1.7) Net debt Net debt/Equity 75% (42%) Gearing % 80 000 80 70 000 70 60 000 60 50 000 50 40 000 40 30 000 30 20 000 20 10 000 10 0 0 2018 2019* 2020 2021 2022 2023 Net debt, MSEK Gearing, % *) IFRS 16 effect on net debt SEK 3.7 bn. **) Excluding M
Slide 24: Earnings per share, SEK
Earnings per share, SEK Quarter 12 months 3,50 14 3,00 12 2,50 10 2,00 8 1,50 6 1,00 4 0,50 2 2018 2019 2020 2021 2022 2023 Quarter, SEK Rolling 12 months, SEK Excluding restructuring items, impairment of intangible assets in China and Global Technologies, a positive revaluation of fair assets in ag
Slide 25: Conclusions
Conclusions Good sales growth – Organic sales up 3% – Net acquired growth of 6% Record EBIT and strong margin improvement Record cash flow HHI consolidated Global Technologies impairment Uncertain economic climate – Short-term cost measures mainly in Europe – MFP accelerated 25
Slide 26: Experience a safer and more open world
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
Slide 27: Appendix
Appendix
Slide 28: HHI sales and adj. EBITDA-margin
HHI sales and adj. EBITDA-margin MUSD, FY Oct-Sep 1 652 1 616 1 378 1 356 1 342 1 276 1 241 1 206 1 166 1 061 19,5% 19,9% 18,7% 18,5% 18,7% 19,1% 18,0% 18,4% 17,6% 14,5% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Sales Adj. EBITDA-margin 28
Slide 29: Cost breakdown as % of sales
Cost breakdown as % of sales QTD 2023 YTD 2023 excl. excl. % QTD 2022 acquisitions Δ QTD 2023 YTD 2022 acquisitions Δ YTD 2023 Direct material -37.2% -34.6% +2.6 pts -35.2% -36.9% -34.7% +2.2 pts -35.2% Conversion cost -23.3% -23.7% -0.4 pts -23.5% -23.7% -23.6% +0.1 pts -23.5% Gross margin 39.5% 41
Slide 30: Opening Solutions EMEIA’s bridge
Opening Solutions EMEIA’s bridge MSEK Q2 2022 Organic Currency Acq/Div Q2 2023 Growth 6% -5% 7% 10% 12% Sales 5,561 -270 335 577 6,202 Operating income* 801 -108 23 60 777 Operating margin, %* 14.4% 40.2% 7.0% 10.5% 12.5% Dilution/accretion -1.2 pts -0.5 pts -0.2 pts 12 months figures Sales 21,100 2
Slide 31: Opening Solutions Americas’ bridge
Opening Solutions Americas’ bridge MSEK Q2 2022 Organic Currency Acq/Div Q2 2023 Growth 41% 4% 10% 8% 22% Sales 7,036 300 599 614 8,549 Operating income* 1,451 249 129 -74 1,755 Operating margin, %* 20.6% 83.1% 21.5% -12.1% 20.5% Dilution/accretion 2.3 pts 0.1 pts -2.5 pts 12 months figures Sales 24
Slide 32: Opening Solutions Asia Pacific’s bridge
Opening Solutions Asia Pacific’s bridge MSEK Q2 2022 Organic Currency Acq/Div Q2 2023 Growth 6% -2% 3% 15% 16% Sales 2,379 -55 66 375 2,765 Operating income* 45 115 10 45 215 Operating margin, %* 1.9% -211.5% 15.8% 12.0% 7.8% Dilution/accretion 4.2 pts 1 pts 0.7 pts 12 months figures Sales 8,961 10,
Slide 33: Global Technologies’ bridge
Global Technologies’ bridge MSEK Q2 2022 Organic Currency Acq/Div Q2 2023 Growth 21% 20% 8% 5% 33% Sales 4,417 930 306 215 5,869 Operating income* 677 319 78 8 1,082 Operating margin, %* 15.3% 34.3% 25.5% 3.6% 18.4% Dilution/accretion 3 pts 0.7 pts -0.6 pts 12 months figures Sales 16,131 22,327 EBIT
Slide 34: Entrance Systems’ bridge
Entrance Systems’ bridge MSEK Q2 2022 Organic Currency Acq/Div Q2 2023 Growth 33% 0% 8% 2% 10% Sales 10,673 -15 835 222 11,715 Operating income* 1,651 110 115 24 1,899 Operating margin, %* 15.5% -739.1% 13.8% 10.7% 16.2% Dilution/accretion 1 pts -0.2 pts -0.1 pts 12 months figures Sales 37,511 45,35
Slide 35: Thank you
Thank you assaabloy.com