Assa Abloy Ab Class B · OMXSTO:ASSA_B

Assa Abloy Ab Class B — Q2 2010 Earnings Presentation

34 slides from Assa Abloy Ab Class B's earnings presentation, 2010

  1. Slide 1: Q2 Report 2010

    Q2 Report 2010 1

  2. Slide 2: ASSA ABLOY overview

    ASSA ABLOY overview Financials (SEK bn) Sales by product group Jun 2010 Net sales 34.9 Security doors & fittings, 21% EBIT 5.6 Op cash flow 6.7 Mech. Locks & systems, 45% Net debt 12.6 Market cap 60 Electromech & electronic locks, 34% Sales by region Jun 2010 Leading market positions Competitors 44%

  3. Slide 3: Financial Highlights Q2 2010

    Financial Highlights Q2 2010 ƒ Record profit and market back to growth – APAC and South America in strong growth – EMEA was growing and US sales decline was limited to -4% – Margin expansion due to efficiency improvement – Acquisition of King and Paddock ƒ Sales 9,356 MSEK +5% +2% organic, +8% acqui

  4. Slide 4: Financial Highlights H1 2010

    Financial Highlights H1 2010 ƒ Strong first half despite weak construction ƒ Sales 17 701 MSEK 0% -1% organic, +6% acquired growth, -5% currency ƒ EBIT 2,810 MSEK +5% Currency effect -164 MSEK ƒ EPS 5.10 SEK +15% Reduced interest and tax rate 4

  5. Slide 5: Sales Highlights Q2

    Sales Highlights Q2 ƒ Sales force additions in all regions ƒ New generation of digital door locks beats expectations ƒ ABLOY in strong growth due to new (elmech) products ƒ Orion - Hotel energy management system launched ƒ Good activity of acquisitions 5

  6. Slide 6: 30% energy saving

    ASSA ABLOY hospitality Orion System 30% energy saving 7 EMS Server The global leader in door opening solutions ASSA ABLOY

  7. Slide 7: Group Sales in Local Currencies Jan-Jun

    Group Sales in Local Currencies Jan-Jun 2010 44 +6 33 -7 13 +57 2 -5 2 +22 6 +5 Share of Group sales 2010 YTD, % Year-to-date vs previous year, % 7

  8. Slide 8: Sales Growth Q2 2010 - Currency Adjusted

    Sales Growth Q2 2010 - Currency Adjusted 39 000 14 38 000 12 37 000 10 36 000 35 000 8 34 000 6 33 000 4 Sales, MSEK 32 000 Growth % 2 31 000 30 000 0 29 000 -2 28 000 27 000 2010 Q2 +10% -4 26 000 Organic +2% -6 25 000 Acquired +8% -8 24 000 -10 23 000 -12 22 000 21 000 -14 2004 2005 2006 2007 2008

  9. Slide 9: Operating Income (EBIT) MSEK

    Operating Income (EBIT) MSEK 1 600 Best EBIT ever +13% in Q2, run rate 5,544 MSEK (5,572), -1% 5 900 1 500 5 700 1 400 5 500 5 300 1 300 5 100 1 200 4 900 1 100 4 700 4 500 1 000 4 300 900 4 100 800 3 900 3 700 700 3 500 600 3 300 500 3 100 2005 2006 2007 2008 2009 2010 Quarter 12-months Quarter Rol

  10. Slide 10: Operating Margin (EBIT)

    Operating Margin (EBIT) 17,0 16,0 EBIT % 15,0 Run rate 2010 15.9% (15.5) 14,0 13,0 12,0 2005 2006 2007 2008 2009 2010 Quarter Rolling 12-months Long Term Target 10

  11. Slide 11: Manufacturing Footprint

    Manufacturing Footprint ƒ Conversion to assembly or closures in high cost countries – 37 factories closed to date, 14 to go – 27 factories converted to assembly, 27 to go – 10 offices closed, 15 to go ƒ Consolidation of core production to China and Eastern Europe ƒ Personnel reduction 4,988p, +16% t

  12. Slide 12: Margin Highlights Q2 2010

    Margin Highlights Q2 2010 EBIT margin 16.2% (15.1) - Volume increase of 1%, Price 1% - Acquisition dilution of -0.2% - Negative mix effect due to growth in emerging markets -0.2% + Manufacturing footprint gives good contribution + S, G & A cost declining, 24.0% 12

  13. Slide 13: Acquisitions 2010

    Acquisitions 2010 ƒ Fully active on acquisitions – Growing pipeline with target 5% growth ƒ 9 acquisitions completed in 2010 – Pan Pan, China – King Door Closer, Korea – Hunter Automatics, Canada – Paddock, UK (approval pending) Æ Annualized 2,495 MSEK, +7.1% 13

  14. Slide 14: King, Korea

    King, Korea ƒ Another strategic move into emerging markets ƒ Market leader in Korea on door closers ƒ Based in Seoul ƒ Gives good access to specification market ƒ Complements Shenfei, China ƒ Adds good export in Asia and Middle East ƒ 270 employees and SEK 300 M sales 14

  15. Slide 15: Paddock, UK

    Paddock, UK ƒ Complementary on high security locks in the UK ƒ Fast growing segment with good profit level ƒ Bolt on to present business with good synergies ƒ Creates critical mass for export activities ƒ Located in Birmingham 7 km from ASSA ABLOY ƒ 240 employees and SEK 350 M sales 15

  16. Slide 16: Division - EMEA

    Division - EMEA SALES ƒ Continued recovery throughout the region share of Group total % ƒ Spain and Italy growing after long decline ƒ Weak trend in Eastern Europe and UK 36 ƒ Many new product launches ƒ Pricing and savings compensated raw material and weak Euro EBIT % Operating margin (EBIT) 18 ƒ 1

  17. Slide 17: EMEA Financial Review

    EMEA Financial Review 2nd Quarter Half Year MSEK 2009 2010 Change 2009 2010 Change Sales 3,445 3,311 -4% 6,903 6,607 -4% Organic growth +3% +2% Acquired growth +1% 0% EBIT* 489 525 +7% 985 1,050 +7% EBIT-margin (%)* 14.2 15.9 14.3 15.9 RoCE (%) 15.9 19.9 15.3 19.8 Operating cash flow before paid int

  18. Slide 18: Division - Americas

    Division - Americas SALES ƒ Levelling decline of doors, architectural hardware share of and high end residential Group total % ƒ Good growth of high security and electromechanics 26 ƒ South America and Mexico strongly growing ƒ Strong EBIT performance from Cerracol and Schaub ƒ Efficiency gains main

  19. Slide 19: Americas Financial Review

    Americas Financial Review 2nd Quarter Half Year MSEK 2009 2010 Change 2009 2010 Change Sales 2,615 2,503 -4% 5,357 4,708 -12% Organic growth -4% -7% Acquired growth +2% +1% EBIT 512 493 -4% 1,038 912 -12% EBIT-margin (%)* 19.6 19.7 19.4 19.4 RoCE (%) 20.9 21.6 20.7 20.5 Operating cash flow before pa

  20. Slide 20: Division - Asia Pacific

    Division - Asia Pacific SALES ƒ Strong organic growth in all parts share of Group total % ƒ Success for new digital locks in Korea 14 ƒ Expansion of capacity concluded in China ƒ Investment in market coverage ƒ No dilution from Pan Pan and King EBIT % ƒ Operating margin (EBIT) 16 15 14 + Volume +18%

  21. Slide 21: Asia Pacific Financial Review

    Asia Pacific Financial Review 1st Quarter Half Year MSEK 2009 2010 Change 2009 2010 Change Sales 963 1,566 +63% 1,723 2,580 +50% Organic growth +18% 15% Acquired growth +41% +32% EBIT 123 222 +93% 177 326 +29% EBIT-margin (%)* 12.7 14.2 10.3 12.6 RoCE (%) 16.4 20.3 12.2 17.2 Operating cash flow befo

  22. Slide 22: Division - Global Technologies

    Division - Global Technologies SALES ƒ Strong growth in HID share of Group total % – Access control back to strong growth 13 – Integration with logical access increasingly popular – Identification solutions in strong demand – Solid profitability ƒ Hospitality, decline continued in the quarter – Grow

  23. Slide 23: Global Technologies Financial Review

    Global Technologies Financial Review 2nd Quarter Half Year MSEK 2009 2010 Change 2009 2010 Change Sales 1,235 1,240 +0% 2,509 2,325 +0% Organic growth +5% +5% Acquired growth +0% +0% EBIT 194 208 +7% 393 392 -0% EBIT-margin (%)* 15.7 16.8 15.7 16.8 RoCE (%) 12.1 14.5 12.6 13.7 Operating cash flow be

  24. Slide 24: Division - Entrance Systems

    Division - Entrance Systems SALES ƒ Continued decline of prime equipment share of Group total % ƒ Service operations compensates to large extent 11 ƒ Quotation levels improving ƒ Strong efficiency gains in manufacturing ƒ Weak demand for Ditec in Southern Europe ƒ Ditec dilutes by 2.5 %-unit EBIT %

  25. Slide 25: Entrance Systems Financial Review

    Entrance Systems Financial Review 2nd Quarter Half Year MSEK 2009 2010 Change 2009 2010 Change Sales 863 1,012 +17% 1,685 1,966 +17% Organic growth -2% -3% Acquired growth +25% +26% EBIT 128 145 +13% 256 278 +9% EBIT-margin (%) 14.9 14.3 15.2 14.2 RoCE (%) 15.1 13.6 14.9 13.0 Operating cash flow bef

  26. Slide 26: Financial Highlights Q2 2010

    Financial Highlights Q2 2010 2nd Quarter Half Year MSEK 2009 2010 Change 2009 2010 Change Sales 8,899 9,356 +5% 17,758 17,701 +0% Whereof Organic growth +2% -1% Acquired growth +8% +6% FX-differences -379 -5% -1,024 -5% Operating income (EBIT)* 1,340 1,515 +13% 2,668 2,810 +5% EBIT-margin (%)* 15.1

  27. Slide 27: P&L – Components as % of Sales

    P&L – Components as % of Sales Q2 Year-on-Year 2009 2010 ƒ Direct material 33.1% 33.5% ƒ Conversion costs 27.5% 26.3% ƒ Gross Margin 39.4% 40.2% ƒ S, G & A 24.3% 24.0% ƒ EBIT 15.1% 16.2% 27

  28. Slide 28: Bridge Analysis – Apr-Jun 2010

    Bridge Analysis – Apr-Jun 2010 MSEK 2009 Acq/Div Currency Organic 2010 Apr-Jun Apr-Jun 8% -5% 2% 5% Revenues 8 899 680 -379 156 9 356 EBIT 1 340 95 -66 146 1 515 % 15.1% 14.0% 17.4% 93.4% 16.2% 28

  29. Slide 29: Operating Cash Flow, MSEK

    Operating Cash Flow, MSEK 7 500 7 000 2 000 6 500 6 000 1 500 12-months 5 500 Quarter 5 000 1 000 4 500 500 4 000 3 500 0 3 000 2005 2006 2007 2008 2009 2010 Quarter Rolling 12-months 29

  30. Slide 30: 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 6 000 Debt/Equity Debt/Equity 40 4 000 62 62(74) (74) 20 2 000 0 0 2005 2006 2007 2008 2009 2010 Net debt Gearing 30

  31. Slide 31: Conclusion H1 2010

    Conclusion H1 2010 ƒ Excellent performance and record profit ƒ Resumed investment in market coverage ƒ Strong cash flow ƒ Total growth H1 by 5% 31

  32. Slide 32: Outlook

    Outlook Long Term ƒ Organic sales growth is expected to continue at a good rate ƒ The operating margin (EBIT) and operating cash flow are expected to develop well Outlook for 2010 ƒ Organic growth is expected to be slightly positive 32

  33. Slide 33: Q&A

    Q&A 33

  34. Slide 34: Conclusions

    Conclusions ƒ Excellent performance and record profit ƒ Resumed investment in market coverage ƒ Strong cash flow ƒ Total growth H1 by 5% ƒ Organic growth 2010 is expected to be slightly positive 34

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