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Q1 Report 2013 Johan Molin
President & CEO
Financial highlights Q1 2013
Good performance in a tough market – Good growth in Americas – Growth in APAC and stable in Global Tech – EMEA and ESD suffering from weak Europe – Maintained good profitability
Sales 10,868 MSEK 0% -1% organic, +5% acquired growth, -4% currency
EBIT 1,662 MSEK 0% Currency effect -63 MSEK
EPS 3.07 SEK -1%* Forecasted tax rate 25%
*) 2012 restated for changed pension accounting principles.
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Market highlights
Launch of full elmech and ANSI range in Mexico & South America
Growth in Africa driven by network of 25 ASSA ABLOY branded showrooms in 23 cities
Product awards at ISC West 2013 for Aperio M100 and Securitron M380 Series Magnalock
HID’s pivCLASS® complete product solution for the Federal Identity market
pivCLASS®
pivCLASS® Federal Identity Solution Solution Architecture
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pivCLASS® Cards
OCSP/SCVP/CRL Validation Authority
Physical Access Control System (PACS)
PACS Controller
pivCLASS® Authentication
Module
pivCLASS® Readers pivCLASS® Cards
Harvesting of PIV IDs
Registration and Status Updates
pivCLASS® Registration Engine
Certification Manager Reader Service
Validation of Certificates
Card Identifier via Wiegand
Harvesting of PIV IDs
OCSP – Online Status Verification protocol SCVP – Server Based Certificate Validation Protocol CRL – Certificate Revocation list
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Group sales in local currencies Jan-Mar 2013
2 +13
32 +19 14 +12
5 -2
1 +5
Share of Group sales 2013 YTD, % Year-to-date vs previous year, %
46 -6
Organic growth index Recovery from recession
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Group +0%
Division Index
EMEA -8%
Americas -12%
Asia Pacific +35%
Global Tech +10%
ESD *) 0% *) Entrance systems division excluding Cardo.
-16-13-10-7-4-12581114172023
26 00028 00030 00032 00034 00036 00038 00040 00042 00044 00046 000
2006 2007 2008 2009 2010 2011 2012 2013Organic Growth Acquired Growth Sales in Fixed Currencies
Sales growth, currency adjusted
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2013 Q1 +4% Organic -1% Acquired +5%
Sales MSEK Growth, %
Operating income (EBIT), MSEK
3 5004 0004 5005 0005 5006 0006 5007 0007 5008 000
700800900
1 0001 1001 2001 3001 4001 5001 6001 7001 8001 9002 0002 100
2006 2007 2008 2009 2010 2011 2012 2013Quarter Rolling 12-months
Quarter 12-months
Run rate 7,509 MSEK (6,902) +9%
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*) Excluding restructuring costs.
12,0
13,0
14,0
15,0
16,0
17,0
2006 2007 2008 2009 2010 2011 2012 2013Quarter Rolling 12-months
Q1 2013 Dilution QTD -0.1%
Operating margin (EBIT)*, %
Run rate 2013 16.1% (15.7)
Long term target range (average)
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EBIT Margin
*) Excluding restructuring costs.
Manufacturing footprint
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Status manufacturing footprint programs 2006-2011: – 55 factories closed to date, 13 to go – 62 factories converted to assembly, 13 to go – 28 offices closed, 1 to go
Personal reduction QTD 101p and total 6,866p
669p in further planned reductions
897 MSEK of the provision remains for all programs
Margin highlights Q1 2013
EBIT margin 15.3% (15.3) 0.0%
+ Volume decrease -2%, price +1%
+ Margin expansion 0.1% - Organic growth -1% + Manufacturing footprint + Capacity adjustments - Dilution from acquisitions -0.1%
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Acquisitions 2013
Fully active pipeline
3 acquisitions done in 2013
Annualized sales 130 MSEK
Completed acquisitions 2012 by 3.4% Dynaco, BE Securistyle, UK Sanhe Metal, China Helton, Canada Guoqiang, China 4Front, USA
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Acquisitions in the quarter
SHERLOCK, EMEA Leader in security doors in Slovakia and Czech Republic with total sales of 60 MSEK
Norport, ESD Specialist in sales and service of Industrial doors in Oslo with sales of 60 MSEK
ASL, EMEA Professional end-user specialist and locksmith in Colombia with sales of 10 MSEK
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Division - EMEA
Suffering from weak Europe and Easter
Growth in Africa, Middle east and Eastern Europe
All other markets with declining sales
Strong decline in Spain, Italy, France, Holland and Finland
Good profit resilience due to savings despite investment in front end and R&D
Operating margin (EBIT) - Organic -6% + Footprint savings = Material cost - SG&A
SALES share of
Group total %
29
14
13 14 15 16 17 18 19
2008 2009 2010 2011 2012 2013
EBIT %
Division - Americas
Strong growth in Residential, Electromechanical and South America
Growth in AHW, Doors, High security, Canada and Mexico
Improved margin from volume and efficiency gains
Investments in R&D and front end
Operating margin (EBIT)
+ Organic +5%
+ Material cost
+ Efficiency improvement
- SG&A
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SALES share of
Group total %
17
18
19
20
21
22
2008 2009 2010 2011 2012 2013
EBIT%
21
Division - Asia Pacific
Strong growth in Korea, South East Asia and New Zeeland
Growth in China despite the decline in export to EMEA
Small decline in Australia
Continued adjustment of workforce in China
Operating margin (EBIT) - Organic +2% + Efficiency in China + Material cost - Mix & cost pressure
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18
SALES share of
Group total %
5
8
11
14
17
2008 2009 2010 2011 2012 2013
EBIT %
Division - Global Technologies
HID – Good growth of Physical access – Growth in Project sales and flat in Logical access – Negative in Government ID and IDT – Strong profit improvement
Hospitality – Continued good growth from the renovation market – Increased construction activity in the USA
Operating margin (EBIT) + Organic 0% + Leverage from core business growth + Good improvement of AI and Lasercard
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20
SALES share of
Group total %
10 12 14 16 18 20
2008 2009 2010 2011 2012 2013
EBIT%
Division - Entrance Systems Suffering from weak Europe and Easter
Negative growth in all channels in Europe
Strong growth in Americas and growth in Asia
Good start for new acquisition 4Front
Sales +9% and EBIT +11%
Operating margin (EBIT) - Organic -3% + Smooth running of integration work + Large savings on product cost
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22
SALES share of
Group total %
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013
EBIT%
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Q1 Report 2013 Carolina Dybeck Happe
CFO
Financial highlights Q1 2013
MSEK 2012 2013 Change 2011 2012 Change
Sales 10,839 10,868 0% 41,786 46,619 +12% Whereof Organic growth -1% +2% Acquired growth +5% +9% FX-differences -379 -4% 290 1% Operating income (EBIT) 1,655 1,662 0% 6,624 7,501 +13% EBIT-margin (%) 15.3 15.3 15.9 16.1 Operating cash flow 483 498 +3% 6,080 7,044 +16% EPS (SEK)* 3.11 3.07 -1% 12.30 13.97 +14%
1st Quarter Twelve months
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*) excluding non comparable items
Bridge Analysis – Jan-Mar 2013
MSEK 2012
Jan-Mar
Organic Currency Acq/Div 2013
Jan-Mar
-1% -4% 5% 0%
Revenues 10,839 -125 -379 534 10,868
EBIT 1,655 -3 -63 73 1,662
% 15.3% 2.2% 16.6% 13.7% 15.3%
Dilution / Accretion 0.1% 0.0% -0.1%
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P&L – Components as % of sales
Direct material 32.7% 32.6% 32.8%
Conversion costs 27.6% 27.2% 27.1%
Gross Margin 39.7% 40.2% 40.1%
S, G & A 24.4% 24.8% 24.8%
EBIT 15.3% 15.4% 15.3%
2013 Q1 excluding acquisitions
2012 Q1
2013 Q1
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Operating cash flow, MSEK
3 000
3 500
4 000
4 500
5 000
5 500
6 000
6 500
7 000
7 500
8 000
0
500
1 000
1 500
2 000
2 500
3 000
3 500
2006 2007 2008 2009 2010 2011 2012 2013
Quarter Cash Rolling 12-months EBT Rolling 12 months
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Quarter 12 months
Gearing % and net debt MSEK
0
20
40
60
80
100
120
0
5 000
10 000
15 000
20 000
25 000
30 000
2006 2007 2008 2009 2010 2011 2012 2013
Net debt Gearing
Debt/Equity 57 (71)
Net debt/EBITDA 1.8 (2.2)
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Net Debt Gearing
*) 2006-2011 Not restated for changed pension accounting principles.
Earnings per share, MSEK
4,00
6,00
8,00
10,00
12,00
14,00
0,00
1,00
2,00
3,00
4,00
2006 2007 2008 2009 2010 2011 2012 2013
Quarter Rolling 12-months
Quarter SEK 12-months
30
*) Excluding restructuring costs. **) 2006-2011 Not restated for changed pension accounting principles.
Dividend 2013: 5.10 SEK (4.50)
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Q1 Report 2013 Johan Molin
President & CEO
Conclusions Q1 2013
Stable sales with 5% acquired, -1% organic and -4% currency
Continued good growth in Americas
APAC improving and stable Global Tech
Declining situation in EMEA and ESD due to weak Europe and Easter
Strong efficiency improvements supports profit
Slight increase of EBIT to 1,662 MSEK
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Q&A