Assa Abloy Ab Class B · OMXSTO:ASSA_B
Assa Abloy Ab Class B — Q4 2018 Earnings Presentation
34 slides from Assa Abloy Ab Class B's earnings presentation, February 2019
Slide 1: Q4 Report 2018
The global leader in door opening solutions
Slide 2: Q4 2018 in brief
Q4 2018 in brief Strong organic sales development – Very strong growth in Americas and APAC – Strong growth in Global Technologies – Good growth in EMEA – Growth in Entrance Systems Electromechanical products up 30% Strong EBIT growth of 12% – Margin diluted by M&A and raw material headwind
Slide 3: Q4 2018 figures in summary
Q4 2018 figures in summary Sales EBIT +15% +12% Sales SEK 23,167M +15% 25 000 3 900 – 6% organic 24 000 3 746 3 800 3 700 – 3% acquired 23 000 3 600 – 6% currency 22 000 3 500 21 000 3 359 3 400 EBITA-margin* 16.7% (17.1%) 20 000 3 300 3 200 EBIT-margin 16.2% (16.7%) 19 000 3 100 18 000 3 000
Slide 4: Sales by Country
Sales by Country ASSA ABLOY 100 +9 +6 Emerging 23 +8 +4 Oct-Dec 2018 markets 38 +7 +4 41 +14 +10 13 +6 +3 2 +8 +8 3 +7 +7 3 -3 -4 Change in local currencies Organic change Share of sales, % QTD 2018 vs. QTD 2017, % QTD 2018 vs. QTD 2017, % Emerging markets comprise Africa, Asia (excl. Japan), the Mi
Slide 5: Market highlights
Market highlights Significant growth in electromechanical products – Especially driven by the Americas division and smart locks – Increasing recurring contribution from mobile keys Easier for customer to buy from Entrance systems – Merger of Industrial doors and high performance doors – Focus on
Slide 6: Sales growth, currency adjusted
Sales growth, currency adjusted 23 Quarters with positive OG % SEK M 25 85 000 20 80 000 15 75 000 10 70 000 5 65 000 0 60 000 -5 55 000 -10 50 000 2013 2014 2015 2016 2017 2018 Organic growth, % Acquired growth, % Sales in fixed currencies, SEK M 6
Slide 7: Operating margin, %
Operating margin, % % 18 18 Run rate: EBIT-margin 15.8%* (16.2%) 17 17 Long term target range (average) 16 16 15 15 14 14 13 13 2013 2014 2015 2016 2017 2018 Quarter EBIT Rolling 12-months EBITA** Rolling 12-months *) Excluding China write-downs and restructuring items. **) Operating margin before a
Slide 8: Operating profit, SEK M
Operating profit, SEK M +68% in 5 years SEK M SEK M 4 000 16 000 Run rate: EBIT SEK 13,309* M (12,341) +8% 3 500 14 000 3 000 12 000 2 500 10 000 2 000 8 000 1 500 6 000 1 000 4 000 500 2 000 0 0 2013 2014 2015 2016 2017 2018 Quarter Rolling 12-months *) Excluding China write-downs and restructuring
Slide 9: Manufacturing footprint
Manufacturing footprint New program launched in Q4 2018 with <3 years payback time • Closure of ~15 factories and >30 offices • ~1,600 FTE net reduction • Restructuring cost for the full program SEK 1,500 M • SEK 1,218 M in Q4 2018 and remainder in Q4 2019 • Annual savings of approximately SEK 800
Slide 10: Acquisitions
Acquisitions Fully active pipeline 5 acquisitions in Q4 and 19 in 2018 Acquired annualized sales SEK 3,800 M Divestment of Wood Door business SEK 600 M
Slide 11: Luxer One, USA
Luxer One, USA Leading advanced package locker solutions business Market leader in the last mile delivery space • Reinforces position in solutions for home delivery • Compliments the multi-family product offerings • ‘Click and collect’ at retail stores Turnover of SEK 335 M with 130 employees
Slide 12: Lorient, UK
Lorient, UK Acoustic, smoke, fire and thermal seals A leading designer and manufacturer of door sealing systems Complements the acquisition of Planet GDZ Turnover of SEK 220 M with 135 employees Architectural seals Accretive to EPS (incl. door drop seals)
Slide 13: EMEA
23% EMEA of Group sales Organic growth of 3% 5 500 19% – Strong growth in Finland, Germany, the 5 000 18% UK and Middle East/Africa 4 500 17% – Good growth in Eastern Europe 4 000 16% – Stable growth in Scandinavia, Benelux and South Europe 3 500 15% – Slight negative growth in France 3 000 14% –
Slide 14: Americas
22% Americas of Group sales Organic growth of 14% 5 500 24% – Very strong growth for US Residential, 5 000 Electromechanical & High Security and 22% Security doors 4 500 – Strong growth for US Architectural Hardware, Chile and Mexico 4 000 20% – Stable in Canada, Brazil, Colombia and the US Perime
Slide 15: Asia Pacific
11% Asia Pacific of Group sales Organic growth of 11% 3 000 20% – Very strong growth in Japan, South Asia, India and intra-group sales 2 500 15% – Good growth in South Korea and China • New organization established and new strategy being implemented in China 2 000 10% – Stable growth in Pacific 1
Slide 16: Global Technologies
16% Global Technologies of Group sales Organic growth of 8% 25% 3 500 – HID 23% • Very strong growth in Secure Issuance 3 000 and Identify & Access Solutions • Strong growth in Physical Access 21% Control 2 500 • Good growth in Identification Technology and Extended Access 2 000 19% • Negative gro
Slide 17: Entrance Systems
28% Entrance Systems of Group sales Organic growth of 2% 7 000 18% 6 500 17% – Strong growth in US Residential Doors 6 000 – Good growth in Industrial Doors and 16% 5 500 Pedestrian Doors 15% 5 000 – Stable growth in Door components 4 500 14% – Negative sales in High Performance Doors 4 000 13% an
Slide 18: Erik Pieder, CFO
ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience Erik Pieder CFO
Slide 19: Financial highlights 2018
Financial highlights 2018 October-December January – December SEK M 2017 2018 Change 2017 2018 Change Sales 20,109 23,167 15% 76,137 84,048 10% - Organic growth 878 1,281 6% 2,834 3,901 5% - Acquired net growth 480 714 3% 1,753 1,793 2% - FX-differences -733 1,063 6% 257 2,217 3% Operating income 3,
Slide 20: Bridge Analysis – Q4 2018
Bridge Analysis – Q4 2018 SEK M Q4 2017 Organic Currency Acq/Div Q4 2018 6% 6% 3% 15% 20,109 1,281 1,063 714 23,167 Operating profit 3,359 138 190 59 3,746 Operating margin, % 16.7% 10.8% 17.8% 8.3% 16.2% Dilution/accretion -0.3 pts 0.1 pts -0.3 pts Sales up SEK 3,058 M Price +2% and volume +4%
Slide 21: P&L components as % of sales January – December 2018
P&L components as % of sales January – December 2018 YTD 2018 % YTD 2017 excl. acquisitions Δ YTD 2018 Direct material -36.3% -36.8% -0.5 pts -36.2% Conversion cost -24.3% -24.2% 0.1 pts -24.2% Gross margin 39.4% 39.0% -0.4 pts 39.6% S, G & A* -23.2% -23.1% 0.1 pts -23.7% EBIT* 16.2% 16.0% -0.2 pts
Slide 22: Operating cash flow, SEK M
Operating cash flow, SEK M Quarter 12 months 6 000 20 000 12 months cash flow / EBT* = 94% 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 2013 2014 2015 2016 2017 2018 Quarter, SEK M Cash rolling 12 months, SEK M EBT rolling 12 months, SEK M *) Excluding
Slide 23: Gearing % and net debt, SEK M
Net debt/EBITDA* Gearing % and net debt, SEK M 1.9 (1.8) Net debt Gearing 35 000 90 Debt/Equity 56% (50%) 30 000 75 25 000 60 20 000 45 15 000 30 10 000 15 5 000 0 0 2013 2014 2015 2016 2017 2018 Net debt, SEK M Gearing, % *) Excluding China write down of SEK 400 M 23
Slide 24: Earnings per share, SEK
Earnings per share, SEK Quarter 12 months YTD EPS +4% (excl MFP) 9,00 2,25 Q4 EPS +9% 8,00 2,00 7,00 1,75 6,00 1,50 5,00 1,25 1,00 4,00 0,75 3,00 0,50 2,00 2013 2014 2015 2016 2017 2018 Quarter, SEK Rolling 12 months, SEK * Excluding restructuring items and impairment of intangible assets in China.
Slide 25: Nico Delvaux, President and CEO
Nico Delvaux President and CEO
Slide 26: Conclusions Q4 2018
Conclusions Q4 2018 Strong organic sales development – Very strong growth in Americas and APAC – Strong growth in Global Technologies – Good growth in EMEA – Growth in Entrance Systems Electromechanical products up 30% Strong EBIT growth of 12% – Margin diluted by M&A and raw material headwind
Slide 27: rin door openin;
S ig rin door openin;
Slide 28: Appendix
———s The global leader in door opening solutions
Slide 29: EMEA Financial Review
EMEA Financial Review SEK M Q4 2017 Organic Currency Acq/Div Q4 2018 Growth 3% 5% 5% 13% Sales 4,869 159 181 276 5,485 Operating income 842 9 21 39 911 Operating margin, % 17.3% 5.6% 11.4% 14.2% 16.6% Dilution/accretion -0.3 pts -0.3 pts -0.1 pts 12 months figures Sales 18,081 20,201 EBIT 2,990 3,25
Slide 30: Americas Financial Review
Americas Financial Review SEK M Q4 2017 Organic Currency Acq/Div Q4 2018 Growth 14% 8% 0% 22% Sales 4,243 606 307 17 5,173 Operating profit 847 138 66 -23 1,027 Operating margin, % 19.9% 22.8% 21.6% -138.0% 19.9% Dilution/accretion 0.4 pts 0.1 pts -0.5 pts 12 months figures Sales 17,940 19,817 EBIT
Slide 31: Asia Pacific Financial Review
Asia Pacific Financial Review SEK M Q4 2017 Organic Currency Acq/Div Q4 2018 Growth 11% 4% 0% 15% Sales 2,400 263 92 0 2,756 Operating profit 232 27 7 -2 264 Operating margin, % 9.7% 10.3% 7.6% n/a 9.6% Dilution/accretion 0.1 pts -0.1 pts -0.1 pts 12 months figures* Sales 9,211 9,949 EBIT 934 892 Op
Slide 32: Global Technologies Financial Review
Global Technologies Financial Review SEK M Q4 2017 Organic Currency Acq/Div Q4 2018 Growth 8% 8% 11% 27% Sales 2,835 252 176 339 3,602 Operating profit 608 33 43 33 716 Operating margin, % 21.5% 13.0% 24.2% 9.7% 19.9% Dilution/accretion -0.5 pts 0.0 pts -1.1 pts 12 months figures Sales 10,373 11,951
Slide 33: Entrance Systems Financial Review
Entrance Systems Financial Review SEK M Q4 2017 Organic Currency Acq/Div Q4 2018 Growth 2% 6% 1% 9% Sales 6,072 142 321 82 6,616 Operating profit 966 -37 56 13 998 Operating margin, % 15.9% -25.9% 17.5% 15.6% 15.1% Dilution/accretion -0.9 pts 0.1 pts 0.0 pts 12 months figures Sales 21,781 23,762 EBI
Slide 34: www.assaabloy.com
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