Assa Abloy Ab Class B · OMXSTO:ASSA_B
Assa Abloy Ab Class B — Q2 2014 Earnings Presentation
32 slides from Assa Abloy Ab Class B's earnings presentation, 2014
Slide 1: Q2 Report 2014
Q2 Report 2014 Johan Molin President & CEO 1
Slide 2: Financial highlights Q2 2014
Financial highlights Q2 2014 Strong development of growth and profit – Strong growth in APAC – Good growth in EMEA, Americas and ESD – Weak W k Global Gl b l T Tech h mainly i l ddue to t project j t business b i – Strong cash flow Sales 13 964 MSEK 13,964 +14% 2% organic, 10% acquired growth, 2
Slide 3: Financial highlights Jan-Jun 2014
Financial highlights Jan Jan-Jun Jun 2014 A strong first half – Good underlying savings and efficiency improvements – Investments in R&D and Sales – Strong St contribution t ib ti ffrom acquisitions i iti Sales 26,268 MSEK +14% 3% organic, 9% acquired growth, 2% currency EBIT 4,076 MSEK +12% C
Slide 4: Market highlights
Market highlights Launch of eCLIQ at IFSEC – 2nd generation electro-mechanical cylinders – Scalable, flexible, cloud and suitable for small and large systems Good progress in Home Automation – US agreements with leading companies – H2 launch in several large EU markets Good progress in E-gover
Slide 5: Group sales in local currencies Jan-Jun 2014
Group sales in local currencies Jan Jan-JunJun 2014 Emerging markets 23% of sales 43 +6 35 +25 15 +2 1 +23 2 +20 4 +5 Share of Group sales 2013 YTD, % Year-to-date vs previous year, % 5
Slide 6: Sales growth, currency adjusted
Sales growth growth, currency adjusted Sales MSEK Growth, % 2014 Q2 +12% 52 500 Organic +2% 24 Acquired +10% 21 49 500 18 46 500 15 12 43 500 9 40 500 6 3 37 500 0 -3 34 500 -6 31 500 -9 -12 28 500 -15 15 2007 2008 2009 2010 2011 2012 2013 2014 Organic Growth Acquired Growth Sales in Fixed Currencie
Slide 7: Operating income (EBIT), MSEK
Operating income (EBIT (EBIT*)), MSEK Quarter 12-months 2 300 8 500 Run rate 8,368 MSEK (7,594) +10% 2 100 7 500 1 900 1 700 6 500 1 500 1 300 5 500 1 100 900 4 500 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months 7
Slide 8: Operating margin (EBIT), %
Operating margin (EBIT), (EBIT) % EBIT Margin Run rate 2014 16.2% 16 2% (16.2) (16 2) 17,0 Long term target range (average) 16 0 16,0 15,0 14,0 13 0 13,0 12,0 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months 2014 Dilution Q2 -0.2% 2014 FC -0.4% 8
Slide 9: Manufacturing footprint
Manufacturing footprint Status manufacturing footprint programs 2006 2006-2013: 2013: – 61 factories closed to date, 19 to go – 73 factories converted to assembly, 16 to go – 29 offices ff closed, l d 18 to go Personal reduction QTD 237p and total 8,718p 1,266p 1 266p in further planned reduct
Slide 10: Margin highlights Q2 2014
Margin highlights Q2 2014 EBIT margin ma gin 15.9% 15 9% (16 (16.1) 1) -0.2% 0 2% + Volume increase 1% 1%, price 1% + Margin decrease -0.2% + Organic growth + Manufacturing footprint + Efficiency improvements - Acquisitions -0.2% 10
Slide 11: Acquisitions 2014
Acquisitions 2014 Fully active pipeline 10 acquisitions done in 2014 Annualized sales 1,150 MSEK Added sales 2.3% 11
Slide 12: ENOX, India
ENOX India ENOX, Turnover of 130 MSEK with 220 employees First acquisition into the large and fast growing indian market Adds complimentary business channels h l andd products d to our existing indian business Accretive to EPS 12
Slide 13: Division - EMEA
Division - EMEA SALES Strong growth in Finland, UK, Africa and Eastern share of Europe Group total % Good growth in Scandinavia & Germany and growth 26 in Benelux and Iberia Flat in France and still negative in Italy and Israel Pleasing g development p of new p products and efficiency y EBIT
Slide 14: EMEA Financial Review
EMEA Financial Review 2nd Quarter Six months MSEK 2013 2014 Change 2013 2014 Change Sales 3,285 3,672 +12% 6,456 7,183 +11% Organic growth +3% +4% Acquired growth +4% +4% EBIT 511 566 +11% 1 020 1,020 1 131 +11% 1,131 EBIT-margin (%) 15.6 15.4 15.8 15.8 RoCE (%) 18 9 18.9 18 4 18.4 19 3 19.3 19 4 19
Slide 15: Division - Americas
Division - Americas SALES share of Strong St o gggrowth o t in Residential es de t a aand d Sout South America e ca Group total % Growth in AHW, Doors, Elmech, High Security 21 Slight decline in Canada and Mexico Good development of Ameristar Increasing quoting activity EBIT % Operating
Slide 16: Americas Financial Review
Americas Financial Review 2nd Quarter Six months MSEK 2013 2014 Change 2013 2014 Change Sales 2,620 2,996 +14% 4,973 5,668 +14% Organic growth +3% +2% Acquired growth +12% +12% EBIT 571 662 +16% 1 065 1,065 1 225 +15% 1,225 EBIT-margin (%) 21.8 22.1 21.4 21.6 RoCE (%) 25 5 25.5 24 1 24.1 25 0 25.0 2
Slide 17: Division - Asia Pacific
Division - Asia Pacific SALES Strong growth in Australia, SEA and Korea share of Group total % Good growth in China and New Zealand 14 New facility for BaoDean in China concluded Intensified work on automation and efficiency in China EBIT % Operating margin (EBIT) 17 + Organic 7% 15 13 + E
Slide 18: Asia Pacific Financial Review
Asia Pacific Financial Review 2nd Quarter Six months MSEK 2013 2014 Change 2013 2014 Change Sales 1,904 2,151 +13% 3,259 3,571 +10% Organic growth +7% +5% Acquired growth +6% +5% EBIT 269 310 15% 420 461 +10% EBIT-margin (%) 14.1 14.4 12.9 12.9 RoCE (%) 20 4 20.4 15 0 15.0 16 3 16.3 11 7 11.7 Operat
Slide 19: Division - Global Technologies
Division - Global Technologies SALES HID share of Group total % – Strong growth h in IDT (Inlay ( l b business)) and d Lumidigm d – Growth in IAM (Identity and access management) 12 – Weak Gov ID and strong decline in Project sales – Consolidation of North American operations to Austin Hospitali
Slide 20: Global Technologies Financial Review
Global Technologies Financial Review 2nd Quarter Six months MSEK 2013 2014 Change 2013 2014 Change Sales 1,711 1,722 +1% 3,137 3,241 +3% Organic growth -6% 6% -2% 2% Acquired growth +5% 4% EBIT 304 315 +4% 546 575 +5% EBIT-margin (%) 17.8 18.3 17.4 17.7 RoCE (%) 19 8 19.8 17 6 17.6 18 1 18.1 17 0 17
Slide 21: Division - Entrance Systems
Division - Entrance Systems SALES Strong growth in US operations (Amarr & 4Front) share of Group total % and dDDoor Automatics A i Good growth in High Speed Doors and FlexiForce 27 Growth in EU Industrial doors Negative in EU residential and Ditec, Italy Negative mix and dilution EBIT %
Slide 22: Entrance Systems Financial Review
Entrance Systems Financial Review 2nd Quarter Six months MSEK 2013 2014 Change 2013 2014 Change Sales 2,960 3,703 +25% 5,722 7,108 +24% Organic growth +3% 3% +4% 4% Acquired growth +19% +18% EBIT 400 466 +17% 741 860 +16% EBIT-margin (%) 13.5 12.6 13.0 12.1 RoCE (%) 11 6 11.6 11 9 11.9 10 7 10.7 11
Slide 23: Q2 Report 2014
Q2 Report 2014 Carolina Dybeck Happe CFO 23
Slide 24: Financial highlights Q2 2014
Financial highlights Q2 2014 2nd Quarter Six months MSEK 2013 2014 Change 2013 2014 Change Sales 12,239 13,964 +14% 23,108 26,268 +14% Whereof Organic growth +2% +3% Acquired growth +10% +9% FX-differences FX differences +210 +2% +319 2% Operating income (EBIT) 1,970 2,219 +13% 3,632 4,076 +12% EBIT
Slide 25: Bridge Analysis – Apr-Jun 2014
Bridge Analysis – Apr Apr-Jun Jun 2014 MSEK 2013 Organic Currency Acq/Div 2014 Apr-Jun Apr-Jun 2% 2% 10% 14% Revenues 12,239 248 210 1,266 13,964 EBIT 1,970 62 15 172 2,219 % 16.1% 25.2% 7.0% 13.6% 15.9% Dilution / Accretion 0.2% -0.2% -0.2% 25
Slide 26: P&L Components as % of sales Apr–Jun 2014
P&L Components as % of sales Apr – Jun 2014 2013 2014 2014 Q2 Q2 excluding Q2 acquisitions Direct Di e t mate material ial 35 6% 35.6% 35 2% 35.2% 36 5% 36.5% Conversion costs 25 3% 25.3% 25 7% 25.7% 25 1% 25.1% Gross Margin 39.1% 39.1% 38.4% S, G & A 23.0% 23.0% 22.5% EBIT 16.1% 16.1% 15.
Slide 27: Operating cash flow, MSEK
Operating cash flow flow, MSEK Q Quarter t 12 months th 3 500 8 000 7 500 3 000 7 000 2 500 6 500 2 000 6 000 5 500 1 500 5 000 1 000 4 500 4 000 500 3 500 0 3 000 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Cash Rolling 12-months EBT Rolling 12 months 27
Slide 28: Gearing % and net debt MSEK
Gearing % and net debt MSEK Net Debt Gearing 30 000 Debt/Equity 120 76 (62) 25 000 100 20 000 80 15 000 60 10 000 40 5 000 20 0 0 2007 2008 2009 2010 2011 2012 2013 2014 Net debt Gearing Net debt/EBITDA *)) 2007 2007-2011 2011 Not restated for changed pension accounting principles. 2.4 (1.9) 28
Slide 29: Earnings per share, SEK
Earnings per share share, SEK Quarter SEK 12-months Since 2006 EPS +95% 4,50 Dividend 2014: 5.70 SEK (5.10) 16,00 4,00 15,00 3,50 14,00 3,00 13,00 2,50 12,00 2,00 11,00 1,50 1 00 1,00 10 00 10,00 0,50 9,00 0,00 8,00 2007 2008 2009 2010 2011 2012 2013 2014 Quarter Rolling 12-months Excluding restruct
Slide 30: Q2 Report 2014
Q2 Report 2014 Johan Molin President & CEO 30
Slide 31: Conclusions Q2 2014
Conclusions Q2 2014 Sales growth by 14% with 2% organic – Strong growth in APAC, Africa and South America – EMEA Americas and Entrance with good growth EMEA, – Weak Project sales in Global Technologies Efficiency improvements supports profit EBIT improvement of 13% to 2,219 MSEK Strong cash
Slide 32: Q&A
Q&A 32