ASSA ABLOY: Solid sales and profit despite a weak market
(Thomson Reuters ONE) -
* Sales totaled SEK 10,868 M (10,839), with organic growth of -1%.
* Good growth in Americas and continued growth in Asia.
* EMEA and Entrance Systems were affected negatively by the weak economy in
Europe.
* Three minor acquisitions with total annual sales of SEK 130 M were completed
during the year.
* Operating income (EBIT) amounted to SEK 1,662 M (1,655). The operating
margin was 15.3% (15.3).
* Net income amounted to SEK 1,138 M (1,146).
* Earnings per share fell by 1% to SEK 3.07 (3.11).
* Cash flow was normal for the season and totaled SEK 498 M (483).
SALES AND INCOME
Full year First quarter
------------------------------------------
2011 2012 Change 2012 2013 Change
---------------------------------------------------------------------------
Sales, SEK M 41,786 46,619 +12% 10,839 10,868 0%
of which,
Organic growth +2% -1%
Acquisitions +9% +5%
Exchange-rate effects -2,309 +290 +1% +149 -379 -4%
Operating income (EBIT), SEK M1) 6,624 7,501 +13% 1,655 1,662 0%
Operating margin (EBIT), %1) 15.9 16.1 15.3 15.3
Income before tax, SEK M1) 5,979 6,784 +13% 1,490 1,533 +3%
Net income, SEK M2) 3,869 5,172 +34% 1,146 1,138 -1%
Operating cash flow, SEK M 6,080 7,044 +16% 483 498 +3%
Earnings per share (EPS), SEK2) 12.30 13.97 +14% 3.11 3.07 -1%
1) Excluding restructuring costs in 2011 amounting to SEK 1,420 M.
2) If items affecting comparability are excluded, net income for the full year
2011 was SEK 4,605 M.
COMMENTS BY THE PRESIDENT AND CEO
"The development for the first quarter was stable for ASSA ABLOY, with a growth
of 4% in local currencies, made up of -1% organic growth and 5% acquired
growth," says Johan Molin, President and CEO. "It is particularly pleasing that
North and South America and Asia continued to grow. But the European economy
continued to weaken, which produced a negative outcome for EMEA and Entrance
Systems.
"Against the background of the relatively weak market trend, it gives ASSA ABLOY
a great sense of confidence that we have so many new products that are selling
well. New products' share of sales continued to rise to a new record level of
26% (20).
"Earnings showed a solid performance, with the gross profit margin continuing to
improve, as a result of new products and a more efficient production set-up.
However, the improvement does not show on the bottom line since we have ongoing
investments in Research & Development and market presence.
"Activities on the acquisition front continued to go well, and so far this year
we have completed three minor acquisitions. Especially interesting was the
acquisition of the Slovakian security-door company Sherlock, which complements
our range of total door solutions in the region extremely well.
"My judgment is that the outlook from the fourth quarter is unchanged, with a
continuing weak world economy affected by the budget cutbacks that many
countries are making. It is therefore of the utmost importance that ASSA ABLOY
should continue its expansion on the new markets, which are expected to go on
growing well, and that our investments in new products and market presence are
sustained."
FIRST QUARTER
The Group's sales totaled SEK 10,868 M (10,839). Organic growth for comparable
units was -1% (3). Acquired units contributed 5% (19). Exchange-rate effects had
an impact of SEK -379 M on sales, that is -4% (3).
Operating income before depreciation, EBITDA, amounted to SEK 1,911 M (1,929).
The corresponding EBITDA margin was 17.6% (17.8). The Group's operating income,
EBIT, amounted to SEK 1,662 M (1,655). The operating margin was 15.3% (15.3).
Net financial items amounted to SEK -129 M (-165). The Group's income before tax
amounted to SEK 1,533 M (1,490), an improvement of 3% compared with the previous
year. Exchange-rate effects had an impact of SEK -59 M (17) on the Group's
income before tax. The profit margin was 14.1% (13.7). The underlying effective
tax rate on an annual basis was estimated to be 25% (23). Earnings per share
amounted to SEK 3.07 (3.11).
RESTRUCTURING MEASURES
Payments related to all restructuring programs amounted to SEK 190 M in the
quarter.
All restructuring programs proceeded according to plan and led to a reduction in
personnel of 101 people during the quarter and 6,866 people since the projects
began.
At the end of the quarter provisions of SEK 897 M remained in the balance sheet
for carrying out the programs.
COMMENTS BY DIVISION
EMEA
Sales for the quarter in EMEA division totaled SEK 3,171 M (3,431), with organic
growth of -6% (4). The market situation in Europe weakened and the division was
also affected by a negative day effect. Growth was good in Africa, the Middle
East and eastern Europe. The sales trend on all other markets was negative, with
strong negative growth in Spain, Italy, France, the Netherlands and Finland.
Acquired growth amounted to 2%. Operating income totaled SEK 509 M (574), which
represented an operating margin (EBIT) of 16.1% (16.7). Return on capital
employed amounted to 19.3% (23.1). Operating cash flow before interest paid
totaled SEK 105 M (273).
AMERICAS
Sales for the quarter in Americas division totaled SEK 2,353 M (2,308), with
organic growth of 5% (3). The sales trends for the private residential market,
electromechanical products and South America remained strong. Growth was good
for mechanical locks, high-security products and security doors and in Canada
and Mexico. Acquired growth amounted to 2%. Operating income totaled SEK 494 M
(473) and the operating margin was 21.0% (20.5). Return on capital employed
amounted to 23.5% (22.3). Operating cash flow before interest paid totaled
SEK 148 M (220).
ASIA PACIFIC
Sales for the quarter in Asia Pacific division totaled SEK 1,355 M (1,319), with
organic growth of 2% (3). Growth was strong in South Korea, driven by exports of
digital door-locks, and in South-East Asia and New Zealand. China showed low
growth, affected by lower exports to Europe. Australia showed weak negative
growth. Acquired growth amounted to 4%. Operating income totaled SEK 151 M
(138), representing an operating margin (EBIT) of 11.1% (10.5). The quarter's
return on capital employed amounted to 11.7% (12.2). Operating cash flow before
interest paid totaled SEK -59 M (-327).
GLOBAL TECHNOLOGIES
Sales for the quarter in Global Technologies division totaled SEK 1,426 M
(1,477), with organic growth of 0% (8). HID had good growth in access control
and major projects. Logical access and identification technology showed a stable
trend while Government ID had negative growth. Hospitality continued to show
good growth, principally in the renovation market. Profitability for the HID
business unit improved strongly. Acquired growth amounted to 0%. The division's
operating income amounted to SEK 242 M (225), with an operating margin (EBIT) of
17.0% (15.2). Return on capital employed amounted to 16.4% (13.7). Operating
cash flow before interest paid totaled SEK 23 M (102).
ENTRANCE SYSTEMS
Sales for the quarter in Entrance Systems division totaled SEK 2,762 M (2,526),
with organic growth of -3% (3). Sales were affected by the weak trend in Europe
and a negative day effect. All segments in Europe showed negative growth while
sales in America showed strong growth and the trend in Asia was good. Acquired
growth amounted to 16%. Operating income totaled SEK 341 M (307), giving an
operating margin of 12.4% (12.2). The operating margin was affected by 0,1 of a
percentage point by dilution from acquisitions. Return on capital employed
amounted to 10.0% (10.1). Operating cash flow before interest paid totaled
SEK 419 M (376).
ACQUISITIONS AND DIVESTMENTS
During the first quarter two minor acquisitions were consolidated. The combined
acquisition price for these two acquisitions amounted to SEK 92 M, and
preliminary acquisition analyses indicate that goodwill and other intangible
assets with indefinite useful life amount to SEK 85 M. The acquisition price is
adjusted for acquired net financial assets and estimated earn-outs. Estimated
earn-outs amount to SEK 54 M.
In February 2013 the Wangli Group was sold off. Since June 2012 the business has
been reported under 'Assets held for sale' in accordance with IFRS 5.
SUSTAINABLE DEVELOPMENT
ASSA ABLOY is publishing its Sustainability Report for 2012 at the time of the
Annual General Meeting on 25 April 2013.
Important matters described in the Report include the work with the Group's
suppliers and their sustainability work; water and energy consumption; reduction
of organic solvents and environmentally dangerous waste; and independent social
reviews. Activities to continually spread the message and the set targets among
the Group's employees carried on during the year. Major efforts to integrate
sustainability considerations in product development are also in hand in the
Group, with the object of minimizing the products' environmental impact over
their whole life cycle.
Most of the reviewed areas have improved in 2012 and the trends for these lie in
line with the targets set for 2015.
PARENT COMPANY
Other operating income for the Parent company ASSA ABLOY AB totaled SEK 367 M
(322) for the first quarter. Income before tax amounted to SEK 174 M (451).
Investments in tangible and intangible assets totaled SEK 0 M (1). Liquidity is
good and the equity ratio was 49.0% (49.3).
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 90-95 of the 2012 Annual Report.
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'.
EFFECTS OF CHANGED ACCOUNTING PRINCIPLES
In 2013 financial reporting is affected by changes relating to the reporting of
defined-benefit pension plans. The changed accounting principles remove the
option of using the so-called corridor method: that is, the option of reporting
only a proportion of actuarial gains and losses as income or expense. The
significant changed valuations are instead reported as they arise in 'Other
comprehensive income'. The changes also mean that the return on plan assets is
no longer reported as expected return but is reported as an interest income item
in the income statement, based on the value of the discount rate at the start of
the financial year. The accounting principles for defined-benefit pension plans
are therefore changed from the Group's accounting principles in the 2012 Annual
Report and the Interim Reports published earlier in 2012.
The new principles affect reporting retroactively, and the opening balance at 1
January 2012 has been recalculated, as have the comparatives for 2012, as
follows:
On the balance-sheet date of 1 January 2012, pension obligations and net debt
increased by SEK 1,092 M. Equity was reduced by SEK 737 M and financial assets
increased by SEK 355 M. Operating income for the quarter and the full year 2012
is unchanged. Financial items for the quarter and the full year 2012 improved by
SEK 8 M and SEK 53 M respectively. The tax expense for the quarter and the full
year 2012 increased by SEK 2 M and SEK 6 M respectively. Net profit for the
quarter and the full year 2012 increased by SEK 6 M and SEK 47 M respectively.
Earnings per share after dilution for the quarter and the full year 2012
increased by SEK 0.01 per share and SEK 0.13 per share respectively.
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 2012 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 7 February 2013:
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 2013
Johan Molin
President and CEO
This Interim Report has not been reviewed by the Company's Auditor.
FINANCIAL INFORMATION
The Interim Report for the second quarter will be published on 19 July 2013.
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 5055 6476, +44 203 364 5371 or +1 877 679 2993 .
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 2013:
http://hugin.info/1014/R/1695736/558158.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#1695736]
Unternehmensinformation / Kurzprofil:
Datum: 24.04.2013 - 12:02 Uhr
Sprache: Deutsch
News-ID 252450
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contact information:
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