ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience Q4 Report 20
Q4 20 in brief Organic growth in all divisions Strong growth in Global Tech and EMEA Continued good growth in Americas, Entrance Systems, and APAC, with flat sales in China Continued strong development for smart door locks and electromechanical solutions Strong profit and cash flow New CEO Nico Delvaux appointed 2
Q4 20 figures in summary Sales SEK 20,109 M +3% 5% organic 3% acquired Sales 21 000 Sales +3% 3 359 EBIT 3 500-5% currency 20 000 3 213 3 250 EBIT SEK 3,359 M +5% * 19 000 3 000 Amortization of acquisition-related intangible assets SEK 87 M (51) Currency effect SEK -130 M 18 000 2 750 Operating margin.7% (.5 * ) 000 2 500 EBITA-margin.1% (.8 * ) EPS SEK 2.15 +14% ** 000 Q4 * Q4 Sales, SEK M EBIT, SEK M 2 250 * Excluding China write down SEK 300 M and restructuring items in Q4 20. ** Excluding restructuring items. 3
Jan. Dec. 20 figures in summary Sales SEK 76,137 M +7% 4% organic Sales 80 000 Sales +7% EBIT 14 000 2% acquired 1% currency 75 000 70 000 11 554 12 341 13 000 12 000 EBIT SEK 12,341 M +7% * 65 000 11 000 Amortization of acquisition-related intangible assets SEK 240M (200) 60 000 10 000 Currency effect SEK 37 M 55 000 9 000 50 000 8 000 Operating margin.2% (.2 * ) EBITA-margin.5% (.5 * ) 45 000 7 000 EPS SEK 7.77 +10% ** 40 000 Jan-Dec 20 Jan-Dec 20 Sales, SEK M EBIT, SEK M 6 000 * Excluding China write down SEK 300 M and restructuring items in Q4 20. ** Excluding restructuring items. 4
Sales by Region Full year 20 ASSA ABLOY 100 +6 +4 Emerging markets 23 +5 +3 40 +8 +5 38 +7 +4 14 +1 +1 1 + +4 3 +4 +2 4 +4 +7 Share of sales, % Change in local currencies YTD 20 vs. YTD 20, % Organic change YTD 20 vs. YTD 20, % Emerging markets comprise Africa, Asia (excl. Japan), the Middle East, Latin America and Eastern Europe. 5
Market highlights Strong e-cylinder demand New platform driver: Cliq Web Manager, Cliq-go, Medeco XT Bluetooth keys Additional sales from new pulse platform in Q1 2018 Strengthened position in smart door locks Continued strong organic growth Launch of Amazon key partnership with Yale Gearing up for Yale Lock for nest - in store March 2018 Acquisition of August Home Major HID win for ecovers in South America New country win and leading regional reference ecover with Shielding material - New HID Technology Deliveries during 2018 with expected additional opportunities 6
Sales growth, currency adjusted 20 QTD Organic +5% Acquired +3% +8% % 25 SEK M 80 000 20 75 000 15 70 000 10 65 000 5 60 000 0 55 000-5 50 000-10 2012 2013 2014 2015 20 20 Organic growth, % Acquired growth, % Sales in fixed currencies, SEK M 45 000 7
Operating margin, % Margin Bridge 20 OG Currency ACQ Q4 0.3% -0.1% 0.0% YTD 0.2% -0.1% -0.1% % 18 Run rate: EBIT-margin.2% * (.2) 18 Long term target range (average) 15 15 14 14 13 2012 2013 2014 2015 20 20 13 Quarter Rolling 12-months * Excluding China write down SEK 300 M and restructuring items in Q4 20. 8
Operating profit, SEK M +65% in 5 years SEK M 4 000 Run rate: EBIT SEK 12,341 M (11,554*) +7% SEK M 000 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 2012 2013 2014 2015 20 20 0 Quarter Rolling 12-months * Excluding China write down SEK 300 M and restructuring items in Q4 20. 9
Manufacturing footprint Status of programs launched 2006-20 77 factories closed to date, 11 to go 126 factories converted to assembly, 28 to go Total personnel reduction 13,564 FTE in total since 2006 723 FTE in recent quarter 1,353 FTE to go for all programs SEK 944 M provisions remain for all programs 10
Acquisitions Fully active pipeline 19 acquisitions done Acquired annualized sales SEK 3,200 M Added sales 4% Divestment of AdvanIDe SEK 1,250 M 11
Phoniro, Sweden Turnover of SEK 5 M with 80 employees Leading provider of physical & digital security solutions for elderly care Development of homecare vertical Accretive to EPS 12
Dale & Excel Hardware, UK Turnover of SEK 210 M with 75 employees Market leading supplier of high quality architectural hardware Complements and extends current hardware portfolio Accretive to EPS Furniture Hinges Pocket Door Systems Installation tools 13
EMEA 24% of Group sales Organic growth of 5% 5 000 22% Strong growth in Finland, UK, France, Southern and Eastern Europe, and in Africa/Middle East 4 500 20% Good growth in Germany 4 000 18% Growth in Scandinavia and Benelux Strong growth for electromechanical products and smart door locks 3 500 % 3 000 14% Operating margin.3% (.8) Organic growth leverage +0.4% 2 500 12% + Footprint savings and efficiency - Investments in sales Curr. 0.1% and Acq. 0.0% 2 000 Q4 15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 10% Sales, SEK M Operating margin, % Excluding restructuring items. 14
EMEA Financial Review SEK M Q4 20 Organic Currency Acq/Div Q4 20 Growth 5% 0% 2% 7% Sales 4,577 237-20 95 4,869 Operating income * 766 60-2 18 842 Operating margin, % *.8% 25.4% 9.8% 18.8%.3% Dilution/accretion 0.4% 0.1% 0.0% 12 months figures * Sales,837 18,081 EBIT 2,722 2,990 Operating cash flow before paid interest 2,577 2,977 Cash flow/ebit 95% 99% * Excluding restructuring items for 20. 15
Americas 21% of Group sales Organic growth of 4% Strong growth in Electromechanical, High Security, US Residential, Canada, Mexico and South America (excl. Brazil) Growth in Architectural Hardware, Perimeter Protection, Security Doors and in Brazil 5 000 4 500 4 000 3 500 24% 22% 20% 18% Operating margin 19.9% (20.8) Organic growth leverage +0.4% + Leverage - Material cost Curr. 0.0% Acq. -1.3% 3 000 2 500 Q4 15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales, SEK M Operating margin, % % 14% Excluding restructuring items.
Americas Financial Review SEK M Q4 20 Organic Currency Acq/Div Q4 20 Growth 4% -8% 1% -3% Sales 4,362 153-329 57 4,243 Operating profit * 908 45-65 -41 847 Operating margin, % * 20.8% 29.6% 19.9% -72.4% 19.9% Dilution/accretion 0.4% 0.0% -1.3% 12 months figures * Sales,044,940 EBIT 3,640 3,815 Operating cash flow before paid interest 3,447 3,491 Cash flow/ebit 95% 92% * Excluding restructuring items for 20.
Asia Pacific 11% of Group sales Organic growth of 3% Strong growth in South Korea, South Asia, Pacific, and China Architectural Hardware Negative in China Fire and Security Doors Personnel adjustment in China YoY -8% Strong growth in Smart Door Locks Operating margin 9.7% (10.4*) Organic growth leverage -0.8% - China, incl. higher steel costs + Savings Curr. -0.2% Acq. 0.3% 3 500 3 000 2 500 2 000 1 500 1 000 500 0 Q4 15 Q1 Q2 Q3 *Q4 Q1 Q2 Q3 Q4 Sales, SEK M Operating margin, % 15% 10% 5% 0% *Excluding write down in China in Q4 20 and restructuring items. 18
Asia Pacific Financial Review SEK M Q4 20 Organic Currency Acq/Div Q4 20 Growth 3% -4% 0% -1% Sales 2,427 65-101 9 2,400 Operating profit * 253-13 -14 7 232 Operating margin, % * 10.4% -19.5% 14.4% 76.6% 9.7% Dilution/accretion -0.8% -0.2% 0.3% 12 months figures * Sales 9,189 9,211 EBIT 1,087 934 Operating cash flow before paid interest 1,564 859 Cash flow/ebit 199% 92% * Excluding China write down SEK 300 M and restructuring items in Q4 20. 19
Global Technologies 14% of Group sales Organic growth of 9% 3 000 22% HID Strong growth in Access Control (Mobile keys), Secure Issuance, Citizen ID and Identification Technology 2 500 20% Negative in Identity & Access management Strong seasonality in acquired businesses 2 000 18% Hospitality Strong growth, including Mobile keys 1 500 % Operating margin 21.5% (18.6) Organic growth leverage 0.9% Curr. 0.2% and Acq. 1.8% 1 000 Q4 15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales, SEK M Operating margin, % 14% Excluding restructuring items. 20
Global Technologies Financial Review SEK M Q4 20 Organic Currency Acq/Div Q4 20 Growth 9% -6% 2% 5% Sales 2,687 239-140 48 2,835 Operating profit * 500 74-25 59 608 Operating margin, % * 18.6% 30.8%.9% 123.8% 21.5% Dilution/accretion 0.9% 0.2% 1.8% 12 months figures * Sales 9,697 10,373 EBIT 1,752 1,946 Operating cash flow before paid interest 1,724 1,732 Cash flow/ebit 98% 89% * Excluding restructuring items for 20. 21
Entrance Systems 30% of Group sales Organic growth of 3% Strong growth in Pedestrian Doors, Door components, Industrial and High speed doors. Good growth in Residential doors Negative sales in warehouse and logistics solutions Operating margin 15.9% (15.4) Organic growth leverage +0.6% + Good leverage from consolidation 6 500 6 000 5 500 5 000 4 500 4 000 3 500 3 000 2 500 18% % % 15% 14% 13% 12% 11% Curr. 0.1% and Acq. -0.2% 2 000 10% Q4 15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales, SEK M Operating margin, % Excluding restructuring items. 22
Entrance Systems Financial Review SEK M Q4 20 Organic Currency Acq/Div Q4 20 Growth 3% -3% 5% 5% Sales 5,772 182-153 271 6,072 Operating profit * 888 65-21 34 966 Operating margin, % * 15.4% 35.8% 13.9% 12.7% 15.9% Dilution/accretion 0.6% 0.1% -0.2% 12 months figures * Sales 19,789 21,781 EBIT 2,753 3,087 Operating cash flow before paid interest 2,713 3,065 Cash flow/ebit 99% 99% * Excluding restructuring items for 20. 23
ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience Q4 Report 20 Carolina Dybeck Happe CFO
Financial highlights October - December January - December SEK M 20 20 Change 20 20 Change Sales 19,484 20,109 3% 71,293 76,137 7% - Organic growth 120 878 5% 1,428 2,834 4% - Acquired growth 455 480 3% 1,967 1,753 2% - FX-differences 609-733 -5% -201 257 1% Operating income (EBIT) * 3,213 3,359 5% 11,554 12,341 7% EBITA-margin *.8%.1%.5%.5% EBIT-margin *.5%.7%.2%.2% Income before tax ** 2,767 3,226 % 10,549 11,673 11% Net income ** 2,088 2,385 14% 7,874 8,635 10% EPS, SEK ** 1.88 2.15 14% 7.09 7.77 10% Operating cash flow 4,620 4,876 6% 10,467 10,929 4% * Excluding China write down SEK 300 M and restructuring items in Q4 20. ** Excluding restructuring items. 25
Bridge Analysis Q4 20 SEK M Q4 20 Organic Currency Acq/Div Q4 20 5% -5% 3% 3% Sales 19,484 878-733 480 20,109 Operating profit * 3,213 199-130 77 3,359 Operating margin, % *.5% 22.6%.7%.0%.7% Dilution/accretion 0.3% -0.1% 0.0% Price +2% and volume +3% Positive leverage from all divisions, except APAC Accretion from acquisitions/divestments in Global Technologies Dilution from acquisitions in Americas and Entrance Systems * Excluding write down in China and restructuring items in Q4 20. 26
P&L components as % of sales January - December 20 % YTD 20 YTD 20 excl. acquisitions Δ YTD 20 Direct material -35.9% -36.5% -0.6% -36.3% Conversion cost -24.6% -24.2% +0.4% -24.3% Gross margin 39.5% 39.3% -0.2% 39.4% S, G & A -23.3% -23.0% +0.3% -23.2% EBIT *.2%.3% +0.1%.2% Higher material cost and lower conversion cost Organic growth leverage S, G & A down 0.3% vs. previous year, despite investments in R&D and sales * Excluding China write down SEK 300 M and restructuring items in Q4 20. 27
Operating cash flow, SEK M Quarter 6 000 5 000 4 000 3 000 2 000 1 000 0 12 months cash flow / EBT = 94% 2012 2013 2014 2015 20 20 12 months 20 000 18 000 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 Quarter, SEK M Cash rolling 12 months, SEK M EBT rolling 12 months, SEK M 28
Gearing % and net debt, SEK M Net debt/ebitda 1.8 (1.8) Net debt 30 000 Debt/Equity 50% (49) Gearing 90 25 000 75 20 000 60 15 000 45 10 000 30 5 000 15 0 2012 2013 2014 2015 20 20 Net debt, SEK M Gearing, % 0 29
Earnings per share, SEK +67% in 5 years Quarter 2.25 YTD EPS +10% * Dividend proposal 20: 3.30 SEK, +10% 12 months 9.00 2.00 8.00 1.75 7.00 1.50 6.00 1.25 5.00 1.00 4.00 0.75 3.00 0.50 2012 2013 2014 2015 20 20 2.00 Quarter, SEK Rolling 12 months, SEK * Excluding restructuring items in Q4 20. Chart is restated for Stock split 3:1 2015 and excludes cost for restructuring programs in 2013 and 20. 30
ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience Q4 Report 20 Johan Molin President and CEO
Conclusions Q4 20 Sales +8%, excluding currency Strong growth in Global Tech and EMEA Continued good growth in Americas, Entrance Systems, and APAC, with flat sales in China Strong development for smart door locks and electromechanical solutions Strong profit and cash flow * Excluding write down in China and restructuring items in Q4 20. 32
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