ASSA ABLOY: Stable growth with strong improvement in earnings
(Thomson Reuters ONE) -
* Sales increased by 25%, including 3% organic growth, and totaled SEK 10,839
M (8,699).
* Continued strong growth in Global Technologies, good and stable progress in
Europe and North America, but some weakening in the emerging countries.
* Acquisitions of Dynaco, Traka and Frameworks were completed. Their combined
annual sales total SEK 700 M, representing 2% growth.
* Operating income (EBIT) increased by 20% and amounted to SEK 1,655 M
(1,377). The operating margin was 15.3% (15.8).
* Net income amounted to SEK 1,140 M (943).
* Earnings per share rose by 23% to SEK 3.10 (2.53).
* Cash flow was normal for the season and amounted to SEK 483 M (448).
SALES AND INCOME
Full year First quarter
------------------------------------------
2010 2011 Change 2011 2012 Change
----------------------------------------------------------------------------
Sales, SEK M 36,823 41,786 +13% 8,699 10,839 +25%
of which,
Organic growth +4% +3%
Acquisitions +17% +19%
Exchange-rate effects -2,309 -8% +149 +3%
Operating income (EBIT), SEK M 6,046 6,624* +10% 1,377 1,655 +20%
Operating margin (EBIT), % 16.4 15.9* 15.8 15.3
Income before tax, SEK M 5,366 5,979* +11% 1,215 1,481 +22%
Net income, SEK M 4,080 3,869 - 943 1,140 +21%
Operating cash flow, SEK M 6,285 6,080 -3% 448 483 +8%
Earnings per share (EPS), SEK 10.89 12.30** +13% 2.53 3.10 +23%
* Excluding restructuring costs in 2011 amounting to SEK 1,420 M.
** Excluding items affecting comparability, net income for the full year 2011
was SEK 4,605 M.
COMMENTS BY THE PRESIDENT AND CEO
"The year has started well for ASSA ABLOY with 22% growth in local currencies,
of which 3% was organic growth and 19% acquired growth," says Johan Molin,
President and CEO. "Global Technologies performed particularly strongly, while
the trends in Europe and North America were good and stable. For the first time
a weakening was noted in the emerging markets, with the pace of growth falling
during the quarter from previous levels of 20% to 7%. It was particularly
pleasing that our many new products gave a good boost to sales and accounted for
more than 20% of turnover, and that our efforts on the specification market
produced good results.
"Operating income improved by a full 20%, and it can be noted in particular that
the newly acquired units continued to perform well. The underlying profit margin
(excluding acquisitions) also improved in a very satisfactory way as a result of
the successful efficiency and restructuring measures.
"Activities on the acquisition front continued at undiminished pace and resulted
in the acquisitions of Dynaco, Traka and Frameworks. These three exciting
acquisitions add 2% to our sales and complement our strategic product portfolio
very well.
"Dynaco, which specializes in high-efficiency, high-speed doors, adds market-
leading products and geographical coverage to Entrance Systems' rapid expansion.
I am also very pleased about the acquisition of the technology company Traka,
which complements our existing product range of intelligent systems for key
management. Finally, Frameworks is a first step onto the American market for
interior door openings in aluminum.
"The world economy is forecast to remain weak for the rest of the year. On the
mature markets stable economic development with unchanged weak growth is
expected, while economic growth on the new markets is expected to be less strong
than before."
FIRST QUARTER
The Group's sales totaled SEK 10,839 M (8,699), an increase of 25% compared with
the first quarter of 2011. Organic growth for comparable units was 3% (6).
Acquired units contributed 19% (7). Exchange-rate effects had a positive impact
of SEK 149 M on sales, that is 3% (-9).
Operating income before depreciation, EBITDA, amounted to SEK 1,929 M (1,630).
The corresponding EBITDA margin was 17.8% (18.7). The Group's operating income,
EBIT, amounted to SEK 1,655 M (1,377), an increase of 20%. The operating margin
was 15.3% (15.8).
Net financial items amounted to SEK -173 M (-162). The Group's income before tax
amounted to SEK 1,481 M (1,215), an improvement of 22% compared with the
previous year. Exchange-rate effects had a positive impact of SEK 17 M (-104) on
the Group's income before tax. The profit margin was 13.7% (14.0). The estimated
underlying effective tax rate on an annual basis amounted to 23% (22). Earnings
per share amounted to SEK 3.10 (2.53), an increase of 23%.
RESTRUCTURING MEASURES
Payments related to all restructuring programs amounted to SEK 92 M in the
quarter.
All restructuring programs proceeded according to plan and led to a reduction in
personnel of 346 people during the quarter and 6,243 people since the projects
began. A further 1,292 people will leave by the end of 2014.
At the end of the quarter provisions of SEK 1,569 M remained in the balance
sheet for carrying out the programs.
COMMENTS BY DIVISION
EMEA
Sales for the quarter in EMEA division totaled SEK 3,431 M (3,099), with organic
growth
of 4% (0). The market situation remains uncertain but improved during the
quarter with good growth in Scandinavia, Finland, Benelux, the UK, Israel and
Africa. Sales in France, Germany and eastern Europe were stable while the trend
in southern Europe continued to be negative. Acquired growth amounted to 7%. The
operating margin was affected by dilution from acquisitions (mainly of Swesafe
and Portafeu) of 0.8 of a percentage point. Operating income totaled SEK 574 M
(518), which represents an operating margin (EBIT) of 16.7% (16.7). Return on
capital employed amounted to 23.1% (21.0). Operating cash flow before interest
paid totaled SEK 273 M (276).
AMERICAS
Sales for the quarter in Americas division totaled SEK 2,308 M (2,189), with
organic growth of 3% (7). The sales trends for high-security products and
electromechanics and on the private residential market were good. The trends for
security doors and mechanical locks were positive. The sales trends in Canada,
Mexico and Brazil were negative. Acquired growth was 1%. Operating income
totaled SEK 473 M (440) and the operating margin was 20.5% (20.1). Return on
capital employed amounted to 22.3% (22.1). Operating cash flow before interest
paid totaled SEK 220 M (231).
ASIA PACIFIC
Sales for the quarter in Asia Pacific division totaled SEK 1,319 M (1,192), with
organic growth of 3% (10). Growth was good in South-East Asia, India and South
Korea. The market in China was affected by lower new-building activity during
the quarter. Australia was affected negatively by weak demand from the
commercial segment. Acquired growth amounted to 1%. Operating income totaled
SEK 138 M (146), representing an operating margin (EBIT) of 10.5% (12.3). The
quarter's return on capital employed amounted to 12.2% (14.5). Operating cash
flow before interest paid totaled SEK -327 M (-138).
GLOBAL TECHNOLOGIES
Sales for the quarter in Global Technologies division totaled SEK 1,477 M
(1,306), with organic growth amounting to 8% (19). HID had good growth in access
control, secure issuing of smart cards and identification technology. Large
project orders continued to have a diluting effect on the operating margin.
Hospitality continued to record strong growth on all markets. Acquired growth
amounted to 3%. The division's operating income amounted to SEK 225 M (187),
giving an operating margin (EBIT) of 15.2% (14.3). The operating margin was
affected by 0.3 of a percentage point by dilution from exchange-rate effects.
Return on capital employed amounted to 13.7% (12.6). Operating cash flow before
interest paid totaled SEK 102 M (-51).
ENTRANCE SYSTEMS
Sales for the quarter in Entrance Systems division totaled SEK 2,526 M (1,097),
with organic growth amounting to 3% (4). Growth was good for Besam, Crawford and
Flexiforce and in the service sector. Ditec was affected by the negative trend
in southern Europe. Acquired growth amounted to 126%. Operating income totaled
SEK 307 M (158), giving an operating margin of 12.2% (14.4). The operating
margin was affected by 2.7 percentage points by dilution from the acquisitions
of Crawford (Cardo) and Albany. Return on capital employed amounted to 10.1%
(8.5). Operating cash flow before interest paid totaled SEK 376 M (140).
ACQUISITIONS
During the quarter Albany Door Systems in the USA, Securistyle in the UK and
Dynaco in Belgium, together with one minor acquisition, were consolidated. This
means that a total of four companies were acquired in the first quarter. The
combined acquisition price for these four companies amounted to SEK 2,026 M, and
preliminary acquisition analyses indicate that goodwill and other intangible
assets with indefinite useful life amount to SEK 1,679 M. The acquisition price
is adjusted for acquired net debt and estimated earn-outs. Estimated earn-outs
amount to SEK 277 M.
On 10 April it was announced that ASSA ABLOY had acquired the British company
Traka, a leading company in key cabinets and authorization solutions. The
company has 92 employees and its sales in 2012 are expected to total SEK 140 M.
On 18 April it was announced that ASSA ABLOY had acquired the US company
Frameworks, an American manufacturer of interior doors and frames in aluminum.
The company has 50 employees and its sales in 2012 are expected to total SEK
110 M.
SUSTAINABLE DEVELOPMENT
ASSA ABLOY is publishing its Sustainability Report for 2011 in connection with
the Annual General Meeting on 25 April 2012.
Major subjects covered in the Report include the program to survey the Group's
suppliers and their sustainability work; water and energy consumption; reduction
of organic solvents and environmentally dangerous wastes; independent social
audits; and the Group's continuous activities to spread its message and its
goals among its employees. Great efforts are also being made in the Group to
integrate sustainability considerations within product development with a view
to minimizing the products' environmental impact throughout their life cycle.
PARENT COMPANY
Other operating income for the Parent company ASSA ABLOY AB totaled SEK 322 M
(147) for the first quarter. Income before tax amounted to SEK 451 M (21).
Investments in tangible and intangible assets totaled SEK 1 M (1). Liquidity is
good and the equity ratio was 49.3% (38.7).
ACCOUNTING PRINCIPLES
ASSA ABLOY applies International Financial Reporting Standards (IFRS) as
endorsed
by the European Union. Significant accounting and valuation principles are
detailed on pages 88-93 of the 2011 Annual Report. Since 2011 ASSA ABLOY has
been implementing the International Financial Reporting Standard IFRS 5, 'Non-
current Assets Held for Sale and Discontinued Operations'. Non-current assets
are classified as assets held for sale when their carrying amount will be
largely recovered in a sales transaction and a sale is viewed as being highly
probable. They are reported at the lower of carrying amount and fair value less
costs to sell if their carrying amount can be largely recovered in a sales
transaction and not through continuing use and it is highly probable that a sale
will occur.
The agreed revision of IAS 19 Employee Benefits applies from 1 January 2013 with
retroactive effect during 2012. In this recalculation of comparative information
for 2012, unrecognized expenses relating to service provided in previous years
and unrecognized actuarial losses are accounted for as an adjustment of opening
equity taking into account tax effects. The unrecognized balance sheet items
totaled SEK 1,092 M as at 31 December 2011.
This Interim Report was prepared in accordance with IAS 34 'Interim Financial
Reporting' and the Annual Accounts Act. The Interim Report for the Parent
company was prepared in accordance with the Annual Accounts Act and RFR 2
'Reporting by a Legal Entity'.
TRANSACTIONS WITH RELATED PARTIES
No transactions that significantly affected the company's position and income
have taken place between ASSA ABLOY and related parties.
RISKS AND UNCERTAINTY FACTORS
As an international Group with a wide geographic spread, ASSA ABLOY is exposed
to a number of business and financial risks. The business risks can be divided
into strategic, operational and legal risks. The financial risks are related to
such factors as exchange rates, interest rates, liquidity, the giving of credit,
raw materials and financial instruments. Risk management in ASSA ABLOY aims to
identify, control and reduce risks. This work begins with an assessment of the
probability of risks occurring and their potential effect on the Group. For a
more detailed description of risks and risk management, see the 2011 Annual
Report. No significant risks other than the risks described there are judged to
have occurred.
OUTLOOK*
Long-term outlook
Long term, ASSA ABLOY expects an increase in security-driven demand. Focus on
end-user value and innovation as well as leverage on ASSA ABLOY's strong
position will accelerate growth and increase profitability.
Organic sales growth is expected to continue at a good rate. The operating
margin (EBIT) and operating cash flow are expected to develop well.
* Outlook published on 10 February 2012:
Long-term outlook
Long term, ASSA ABLOY expects an increase in security-driven demand. Focus on
end-user value and innovation as well as leverage on ASSA ABLOY's strong
position will accelerate growth and increase profitability.
Organic sales growth is expected to continue at a good rate. The operating
margin (EBIT) and operating cash flow are expected to develop well.
Stockholm, 24 April 2012
Johan Molin
President and CEO
This Interim Report has not been reviewed by the Company's Auditor.
FINANCIAL INFORMATION
The Quarterly Report for the second quarter will be published on 27 July 2012.
FURTHER INFORMATION CAN BE OBTAINED FROM:
Johan Molin, President and CEO, Tel: +46 8 506 485 42
Carolina Dybeck Happe, Chief Financial Officer, Tel: +46 8 506 485 72
ASSA ABLOY is holding an analysts' meeting at 13.00 today
at Operaterrassen in Stockholm.
The analysts' meeting can also be followed on the Internet at
www.assaabloy.com.
It is possible to submit questions by telephone on:
+46 8 5052 0270, +44 208 817 9301 or +1 718 354 1226
This information is that which ASSA ABLOY is required to disclose under the
Swedish Securities Exchange and Clearing Operations Act and/or the Swedish
Financial Instruments Trading Act.
The information is released for publication at 12.00 on 24 April.
Q1 2012:
http://hugin.info/1014/R/1605353/508384.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: ASSA ABLOY via Thomson Reuters ONE
[HUG#1605353]
Unternehmensinformation / Kurzprofil:
Datum: 24.04.2012 - 12:02 Uhr
Sprache: Deutsch
News-ID 138612
Anzahl Zeichen: 17606
contact information:
Town:
Stockholm
Kategorie:
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