ASSA ABLOY: Good performance throughout the Group
(Thomson Reuters ONE) -
* Sales amounted to SEK 9,474 M (8,405), an increase of 13%, made up of 6%
organic growth, 10% acquired growth and exchange-rate effects of -3%.
* Positive growth in all geographical regions.
* North America showed growth for the first time since 2008.
* Good activity in the acquisition field, with bid for ActivIdentity and a
share of Agta Record.
* Operating income (EBIT) amounted to SEK 1,630 M (1,346), an increase of
21%, corresponding to a margin of 17.2% (16.0).
* Net income amounted to SEK 1,099 M (888).
* Earnings per share rose by 24% to SEK 2.93 (2.36).
SALES AND INCOME
Third quarter Jan-Sep
------------------------------------------
2009 2010 Change 2009 2010 Change
------------------------------------------------------------------------
Sales, SEK M 8,405 9,474 +13% 26,163 27,175 +4%
of which,
Organic growth +6% +2%
Acquisitions +10% +7%
Exchange-rate effects 783 -216 -3% 3,676 -1,240 -5%
Operating income (EBIT), SEK M 1,346 1,630 +21% 4,014* 4,440 +11%
Operating margin (EBIT), % 16.0 17.2 15.3* 16.3
Income before tax, SEK M 1,187 1,440 +21% 3,486* 3,961 +14%
Net income, SEK M 888 1,099 +24% 2,458** 3,009 +22%
Operating cash flow, SEK M 2,125 1,890 -11% 4,547 4,200 -8%
Earnings per share (EPS), SEK 2.36 2.93 +24% 6.81* 8.03 +18%
* Excluding restructuring costs amounting to SEK 109 M in 2009.
** Excluding restructuring costs, net income in Jan-Sep 2009 was SEK 2,567 M.
COMMENTS BY THE PRESIDENT AND CEO
"Growth has now returned in all regions and the quarter saw good organic growth
of 6%," says Johan Molin, President and CEO. "In addition, acquired units added
a further 10% growth this quarter. Especially pleasing was the sales development
in Asia and South America. North America was also positive through its growth
for the first time since 2008.
"The increases in sales and operating income, which rose by 13% and 21%
respectively, were extremely satisfying, with strong contributions from volume
growth and efficiency improvements. The efficiency program for the production
structure and improvement in working capital combined with the profit growth
gave a very strong cash flow.
"Activity in the acquisition field remained high. It is with great pleasure that
I welcome the bid for the American company ActivIdentity and the acquisition of
a share in Agta Record. These companies complement our strategic development of
secure identification within logical access and entrance automation.
"Aftermarket activities, which represent two-thirds of sales, continued to make
strong advance during the quarter, with particularly good progress in
electromechanics. However, it should be mentioned that the EMEA region reported
weaker sales development within new construction because of reduction of
governmental spending. Overall, therefore, our forecast for organic growth for
the full year remains slightly positive."
THIRD QUARTER
The Group's sales totaled SEK 9,474 M (8,405), an increase of 13% compared with
2009. Organic growth was 6% (-13). Acquired units contributed 10% (2). Exchange-
rate effects had a negative impact of SEK 216 M on sales, that is -3% (8).
Operating income before depreciation, EBITDA, amounted to SEK 1,875 M (1,584).
The corresponding EBITDA margin was 19.8% (18.8). The Group's operating income,
EBIT, amounted to SEK 1,630 M (1,346), a rise of 21%. The operating margin was
17.2% (16.0).
Net financial items amounted to SEK 190 M (159). New rules for acquisition
accounting had a negative effect of SEK 26 M on net financial items for the
quarter. The Group's income before tax amounted to SEK 1,440 M (1,187), an
improvement of 21% compared with the previous year. Exchange-rate effects had a
negative impact of SEK 26 M on the Group's income before tax. The profit margin
was 15.2% (14.1). The Group's tax charge totaled SEK 341 M (300). Earnings per
share amounted to SEK 2.93 (2.36), an increase of 24%.
FIRST NINE MONTHS OF THE YEAR
Sales for the nine-month period totaled SEK 27,175 M (26,163), representing an
increase of 4%. Organic growth was 2% (-13). Acquired units contributed 7% (3).
Exchange-rate effects affected sales negatively by SEK 1,240 M, i.e. -3% (13).
Operating income before depreciation, EBITDA, excluding restructuring costs,
amounted to SEK 5,191 M (4,779). The corresponding margin was 19.1% (18.3). The
Group's operating income, EBIT, excluding restructuring costs, amounted to
SEK 4,440 M (4,014), which was an increase of 11%. The corresponding operating
margin (EBIT) was 16.3% (15.3).
Earnings per share, excluding restructuring costs, rose to SEK 8.03 (6.81).
Operating cash flow amounted to SEK 4,200 M (4,547).
RESTRUCTURING MEASURES
Payments related to all restructuring programs amounted to SEK 71 M in the
quarter.
The restructuring programs continued according to plan and have led to a
reduction in personnel of 191 people during the quarter and 5,179 people since
the projects began.
A further 1,236 people will leave in the next few years.
At the end of the quarter, provisions of SEK 1,106 M were set aside in the
balance sheet for carrying out the remaining parts of the programs.
COMMENTS BY DIVISION
EMEA
Sales for the quarter in EMEA division totaled SEK 3,065 M (3,155), with organic
growth of 1% (-11). The market recovery continued, but at a slow pace. Finland,
Germany, Italy and Spain showed strong growth while Eastern Europe, France and
the Netherlands had a weaker quarter. Acquired growth amounted to 2%. Operating
income rose to SEK 520 M (476), which represents an operating margin (EBIT) of
17.0% (15.1). Return on capital employed amounted to 20.8% (16.5). Operating
cash flow before paid interest totaled SEK 704 M (779).
AMERICAS
Sales for the quarter in Americas division totaled SEK 2,537 M (2,416), with
organic growth of 2% (-22). The recovery on the North American market continued
and all units except the Door Group showed growth during the quarter. Mexico,
Canada and in particular South America showed good growth. Acquired growth
amounted to 3%. Operating income totaled SEK 515 M (475) and the operating
margin was 20.3% (19.7). Return on capital employed amounted to 24.1% (21.7).
Operating cash flow before paid interest totaled SEK 614 M (789).
ASIA PACIFIC
Sales for the quarter in Asia Pacific division totaled SEK 1,735 M (1,023), with
organic growth of 15% (0). All units showed strong growth. Continued measures to
stimulate the economy benefited demand in Australia, while in China demand from
the growth regions in the interior increased strongly. On other Asian markets
performance was especially strong in Korea and India. Acquired growth amounted
to 51%. Operating income totaled SEK 271 M (139), representing an operating
margin (EBIT) of 15.6% (13.6). The quarter's return on capital employed amounted
to 21.6% (19.6). Operating cash flow before paid interest totaled SEK 300 M
(124).
GLOBAL TECHNOLOGIES
Sales for the quarter in Global Technologies division totaled SEK 1,365 M
(1,113), with organic growth of 26% (-19). HID showed strong growth in both
access control and identification technology. Hospitality showed growth for the
first time since 2008. A strong recovery on the renovation market and successful
launches of RFID locks for hotels had a positive effect on demand. The
division's operating income amounted to SEK 247 M (187), giving an operating
margin (EBIT) of 18.1% (16.8). Return on capital employed amounted to 18.1%
(12.8). Operating cash flow before interest paid totaled SEK 186 M (321).
ENTRANCE SYSTEMS
Sales for the quarter in Entrance Systems division totaled SEK 987 M (896) for
the quarter, with organic growth of -1% (-2). The positive trend on the service
side continued. On the market for automatic doors, demand from the retailing
segment rose while demand from the healthcare segment fell as a result of
cutbacks in the health sector. Ditec's sales stabilized. Acquired growth
amounted to 15%. Operating income totaled SEK 152 M (135), giving an operating
margin of 15.4% (15.0). Return on capital employed amounted to 14.3% (14.6).
Operating cash flow before interest paid totaled SEK 165 M (101).
ACQUISITIONS
Acquisitions consolidated during the quarter comprised Paddock in the UK, after
approval by the British competition authority, Security Metal Products in the
USA and one smaller company. This means that a total of eleven acquisitions were
consolidated in the first nine months of the year. The combined acquisition
price for these acquisitions amounted to SEK 3,918 M, and preliminary
acquisition analyses indicate that goodwill and other intangible assets with
indefinite useful life amount to SEK 3,049M. The acquisition price is adjusted
for acquired net debt and estimated earn?outs. Estimated earn-outs amount to SEK
1,905 M, of which SEK 1,732 M relates to the largest single acquisition of the
first half-year, the Chinese company Pan Pan, and concerns the development of
earnings over the next three years.
On 12 October it was announced that an agreement had been signed for the
acquisition of the American company ActivIdentity. ActivIdentity is active in
systems for strong authentication and credential management. It had sales of
USD 62 M in 2009 and has 223 employees. The acquisition is expected to be
completed in December 2010.
On 18 October it was announced that ASSA ABLOY had acquired 32.95% of the Swiss
company Agta Record. Agta Record is active in entrance automation, has 1,700
employees and had sales of EUR 222 M in 2009. ASSA ABLOY has initiated
discussions with other owners with the aim of acquiring the whole company.
SUSTAINABILITY
Energy-saving activities are carried out in a large number of facilities
throughout the Group.
At Americas division's factory in Guadalajara, Mexico, which employs 400 people,
a well structured program has cut energy costs by 30%. A large number of
employees have been involved in the work and an important part of the process
has been to continuously measure and record the energy consumption in different
parts of the factory. Internal energy audits have been a valuable tool in
sharing best practice on energy-efficient processes and solutions. Special
attention has been given to the control of lighting, ventilation, air
conditioning and the generation of compressed air.
PARENT COMPANY
Other operating income for the Parent company ASSA ABLOY AB totaled SEK 1,145 M
(834) for the nine-month period. Income before tax amounted to SEK 1,344 M
(1,209). Investments in tangible and intangible assets totaled SEK 9 M (1).
Liquidity is good and the equity ratio was 51.4% (58.3).
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 72?77 of the 2009 Annual Report. ASSA ABLOY has
implemented the revised International Financial Reporting Standard IFRS 3, which
came into force on 1 July 2009. The change affects the reporting of acquisition
expenses, deferred considerations and step acquisitions. All acquisition
expenses relating to acquisitions made in 2010 are reported on a current basis
in the income statement from 1 January 2010. ASSA ABLOY is also applying the
revised International Financial Reporting Standard IAS 27, which came into force
on 1 July 2009. IAS 27 affects the reporting of non-controlling interest
(previously minority interest) in future acquisitions.
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 2.3 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 2009 Annual
Report. No significant risks other than the risks described there are judged to
have occurred.
AUDIT
This Report has not been reviewed by the Company's Auditors.
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 for 2010
Organic growth in 2010 is expected to be slightly positive.
*) The outlook published on 28 July 2010:
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 for 2010
Organic growth in 2010 is expected to be slightly positive.
FINANCIAL INFORMATION
The Year-end Report and Quarterly Report for the fourth quarter will be
published on 7 February 2011.
FURTHER INFORMATION CAN BE OBTAINED FROM:
Johan Molin, President and CEO, Tel: +46 8 506 485 42
Tomas Eliasson, Chief Financial Officer, Tel: +46 8 506 485 72
ASSA ABLOY is holding an analysts' meeting at 10.00 today
at Operaterrassen in Stockholm.
The analysts' meeting can also be followed on the Internet atwww.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 08.00 on 27 October.
[HUG#1455681]
Q3 2010:
http://hugin.info/1014/R/1455681/395571.pdf
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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
Unternehmensinformation / Kurzprofil:
Datum: 27.10.2010 - 08:01 Uhr
Sprache: Deutsch
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