ASSA ABLOY: A strong finish to 2010
(Thomson Reuters ONE) -
Fourth quarter
* Sales totaled SEK 9,648 M (8,799), representing an increase of 10%, made up
of 6% organic growth, 9% acquired growth and exchange-rate effects of -5%.
* Asia and South America recorded strong growth and North America good growth
while Europe showed subdued growth.
* Operating income (EBIT) amounted to SEK 1,606 M (1,398*), representing an
increase of 15%. At the same time the operating margin increased to 16.6%
(15.9*). Adjusted for one-offs in connection with the Cardo acquisition the
operating income amounted to 1,638 MSEK (1,398*) corresponding to an
operating margin of 17.0% (15.9*).
* Net income amounted to SEK 1,071 M (200**).
* Earnings per share rose by 19% to SEK 2.86 (2.41*).
* Bid for Cardo and acquisitions of LaserCard and Swesafe.
* Continued investments in product development and market coverage.
* Strong operating cash flow amounting to SEK 2,085 M (2,296).
Full year
* Sales increased by 5% and totaled SEK 36,823 M (34,963), made up of 3%
organic growth, 8% acquired growth and exchange-rate effects of -6%.
* Operating income (EBIT) amounted to SEK 6,046 M (5,413*), representing an
increase of 12%. The operating margin was 16.4% (15.5*).
* Net income amounted to SEK 4,080 M (2,659**).
* Earnings per share rose by 18% to SEK 10.89 (9.22*).
* Strong operating cash flow amounting to SEK 6,285 M (6,843).
* The Board of Directors proposes a dividend of SEK 4.00 per share (3.60).
* Excluding restructuring and non-recurring costs in 2009 amounting to SEK
930 M for the quarter and SEK 1,039 M for the year.
** In 2009, net income for the quarter was SEK 905 M and for the year was SEK
3,474 M, excluding restructuring and non-recurring costs.
SALES AND INCOME
Fourth quarter Full year
------------------------------------------
2009 2010 Change 2009 2010 Change
------------------------------------------------------------------------
Sales, SEK M 8,799 9,648 +10% 34,963 36,823 +5%
of which,
Organic growth +6% +3%
Acquisitions +9% +8%
Exchange-rate effects -385 -5% -1,626 -6%
Operating income (EBIT), SEK M 1,398* 1,606 +15% 5,413* 6,046 +12%
Operating margin (EBIT), % 15.9* 16.6 15.5* 16.4
Income before tax, SEK M 1,292* 1,405 +9% 4,779* 5,366 +12%
Net income, SEK M 200** 1,071 - 2,659** 4,080 -
Operating cash flow, SEK M 2,296 2,085 -9% 6,843 6,285 -8%
Earnings per share (EPS), SEK 2.41* 2.86 +19% 9.22* 10.89 +18%
* Excluding restructuring and non-recurring costs in 2009 amounting to SEK
930 M for the quarter and SEK 1,039 M for the year.
** In 2009, net income for the quarter was SEK 905 M and for the year was SEK
3,474 M, excluding restructuring and non-recurring costs.
COMMENTS BY THE PRESIDENT AND CEO
"During the second half of the year growth returned, and total sales for the
year increased by a good 5% in spite of negative exchange-rate effects of 6%,"
says Johan Molin, President and CEO. "Organic growth for the full year was 3%,
with Asia and South America recording strong growth and North America showing
good and increasing growth. Europe began the year well but growth gradually
slowed down. Acquired units contributed an additional 8% growth.
"Investments in product development continued at an accelerated rate and a
number of new products were launched. In addition, the Group's market leadership
was further strengthened by continued investments in the marketing organisation
which have laid the foundation for continuing growth.
"Operating income for the full year rose by 12%, which was highly satisfying.
Completed efficiency improvements and the ongoing reorganization of production
made strong contributions.
"Activity in the acquisition field remained high and it is with great pleasure
that I welcome our bid for the Swedish company Cardo, the largest acquisition
that the Group has yet made. In addition, the bid for LaserCard in the USA was
announced in December and the acquisition of ActivIdentity in the USA was
completed. These companies complement our strategic development in the areas of
entrance automation, secure identification of ID credentials and identification
for logical and physical access.
"Looking forward to 2011, we expect continued good growth on emerging markets
and cautious recovery on mature markets. The underlying economic trend is
positive, but budgetary constraints may affect those market segments that are
dependent on public financing."
FOURTH QUARTER
The Group's sales totaled SEK 9,648 M (8,799), an increase of 10% compared with
2009. Organic growth for comparable units was 6% (-8). Acquired units
contributed 9% (3). Exchange-rate effects had a negative impact of SEK 385 M on
sales, that is -5% (-2).
Operating income before depreciation, EBITDA, excluding restructuring costs,
amounted to SEK 1,851 M (1,648). The corresponding EBITDA margin was 19.2%
(18.7). The Group's operating income, EBIT, amounted to SEK 1,606 M (1,398), an
increase of 15%. The operating margin was 16.6% (15.9).
Net financial items amounted to SEK 201 M (106). The Group's income before tax,
excluding restructuring costs,amounted to SEK 1,405 M (1,292), an improvement of
9% compared with the previous year. Exchange-rate effects had a negative impact
of SEK 67 M on the Group's income before tax. The profit margin was 14.6%
(14.7). The Group's tax charge totaled SEK 334 M (162). Earnings per share
amounted to SEK 2.86 (2.41), an increase of 19%.
FULL YEAR
Sales for 2010 totaled SEK 36,823 M (34,963), which represented an increase of
5% compared with 2009. Organic growth was 3% (-12). Acquired units contributed
8% (3). Exchange-rate effects affected sales negatively by SEK 1,626 M.
Operating income before depreciation, EBITDA, amounted to SEK 7,041 M (6,426).
The corresponding margin was 19.1% (18.4). The Group's operating income, EBIT,
amounted to SEK 6,046 M (5,413), an increase of 12%. The corresponding operating
margin (EBIT) was 16.4% (15.5).
Earnings per share increased to SEK 10.89 (9.22). Operating cash flow amounted
to SEK 6,285 M (6,843).
RESTRUCTURING MEASURES
Payments related to all restructuring programs amounted to SEK 101 M in the
quarter.
The restructuring programs continued according to plan and have led to a
reduction in personnel of 208 people during the quarter and 5,387 people since
the projects began.
A further 1,030 people will leave in the next two years.
At the end of the quarter, provisions of SEK 924 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 3,364 M (3,544), with organic
growth of 2% (-3). Market development was restrained and only Finland, Germany
and Eastern Europe recorded a stable positive sales trend. Acquired growth
amounted to 1%. Operating income rose to SEK 604 M (595), which represents an
operating margin (EBIT) of 18.0% (16.8). Return on capital employed amounted to
26.3% (21.2). Operating cash flow before interest paid totaled SEK 858 M
(1,133).
AMERICAS
Sales for the quarter in Americas division totaled SEK 2,291 M (2,108), with
organic growth of 6% (-21). The recovery on the North American market continued
and all business units showed growth during the quarter. The Door Group recorded
positive growth for the first time since the end of 2008. Electromechanics and
South America recorded very strong growth. Acquired growth amounted to 3%.
Operating income totaled SEK 459 M (412) and the operating margin was 20.1%
(19.5). Return on capital employed amounted to 21.0% (19.6). Operating cash flow
before interest paid totaled SEK 492 M (545).
ASIA PACIFIC
Sales for the quarter in Asia Pacific division totaled SEK 1,766 M (1,044), with
organic growth of 12% (10). All units recorded growth. Growth in Australia and
New Zealand returned to more normal levels after a period of stimulus-driven
demand. Good growth in China continued and was especially strong for security
doors. Other Asian markets also reported strong growth. Acquired growth amounted
to 54%. Operating income totaled SEK 246 M (144), representing an operating
margin (EBIT) of 13.9% (13.8). The quarter's return on capital employed amounted
to 27.3% (20.6). Operating cash flow before interest paid totaled SEK 561 M
(231).
GLOBAL TECHNOLOGIES
Sales for the quarter in Global Technologies division totaled SEK 1,325 M
(1,145), with organic growth amounting to 18% (-9). HID showed strong growth in
both access control and identification technology. Hospitality recorded growth
for the second quarter in succession and the renovation market continued its
recovery. Acquired growth amounted to 3%. The division's operating income
amounted to SEK 224 M (186), giving an operating margin (EBIT) of 16.9% (16.2).
Return on capital employed amounted to 15.4% (13.3). Operating cash flow before
interest paid totaled SEK 359 M (361).
ENTRANCE SYSTEMS
Sales for the quarter in Entrance Systems division totaled SEK 1,118 M (1,152),
with organic growth of -2% (-4). 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 and other publicly financed market
segments fell as a result of budget constraints on several major markets. Ditec
had a very positive end to the year with good growth. Acquired growth amounted
to 4%. Operating income totaled SEK 198 M (196), giving an operating margin of
17.7% (17.0). Return on capital employed amounted to 18.0% (19.1). Operating
cash flow before interest paid totaled SEK 141 M (189).
ACQUISITIONS
During the quarter ActivIdentity in the USA and one minor acquisition were
consolidated. This means that a total of thirteen acquisitions were consolidated
during the year. The combined acquisition price for these acquisitions amounted
to SEK 4,582 M, and preliminary acquisition analyses indicate that goodwill and
other intangible assets with indefinite useful life amount to SEK 3,818 M. The
acquisition price is adjusted for acquired net debt and estimated earn-outs.
Estimated earn-outs amount to SEK 1,939 M, of which SEK 1,775 M relates to the
largest single acquisition of the year, the Chinese company Pan Pan, and
concerns the development of earnings in coming years.
On 2 November it was announced that a contract had been signed for the
acquisition of Swesafe, the largest locksmith in Sweden. The company's sales
total SEK 430 M, split equally between mechanical and electromechanical
products. Swesafe has 24 branches and more than 300 employees. The acquisition
is dependent on approval by the appropriate authorities.
On 13 December it was announced that ASSA ABLOY had acquired 63.6% of the
Swedish entrance automation company Cardo and had made a public offer to other
shareholders. In 2009 Cardo had sales of SEK 8.8 billion and had 5,337
employees. The acquisition is dependent on approval by the appropriate
authorities and is expected to be completed in March 2011. For more detailed
information refer to the press release of 13 December 2010.
On 21 December it was announced that ASSA ABLOY had signed a contract for the
acquisition of LaserCard Corporation in the USA, a leading company in the
management of secure ID credentials for government and commercial customers
throughout the world. The company is quoted on the NASDAQ exchange in the USA.
LaserCard has 182 employees and its sales for the 2010 financial year totaled
USD 50 M. On 24 January 2011 it was announced that a majority of shareholders
had accepted the offer. The acquisition is expected to be completed during the
first quarter of 2011.
SUSTAINABLE DEVELOPMENT
The Orion family of products introduced during the year represents one step in
the endeavor to produce more energy-efficient products.
Orion automatically controls the temperature setting when hotel guests go in and
out of their rooms. It can be integrated with the hotel's wireless locking
system, safes, lighting and other subsystems in the network and can thereby
provide those responsible with valuable information in the form of reports,
tracking, status, checks and data.
ASSA ABLOY's Orion product recently won the prestigious Editor's Choice prize at
IHMRS (the International Hotel, Motel + Restaurant Show) in New York in
November.
Orion was chosen as the winning entry from more than 100 new products on the
grounds that the solution helps hoteliers to save energy, improve guests'
comfort and make the hotel more 'climate smart'. Orion makes it possible to
control the temperatures in hotel rooms via a wireless network and/or a web-
based server.
The 2010 Sustainability Report, reporting on the Group's targets and giving
other information about sustainable development, will be published at the time
of the Annual General Meeting in April 2011.
PARENT COMPANY
'Other operating income' for the Parent company ASSA ABLOY AB totaled SEK 1,623
M (1,398) for the full year. Income before tax amounted to SEK 1,679 M (1,694).
Investments in tangible and intangible assets totaled SEK 11 M (1). Liquidity is
good
and the equity ratio was 52.9% (55.6).
DIVIDEND AND ANNUAL GENERAL MEETING
The Board of Directors proposes a dividend of SEK 4.00 (3.60) per share for the
2010 financial year. The Annual General Meeting will be held on 29 April 2011.
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 called minority interest) in future acquisitions.
This Year-end Report was prepared in accordance with IAS 34 Interim Financial
Reporting and the Annual Accounts Act. The Year-end 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.
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.
Stockholm, 7 February 2011
Johan Molin
President and CEO
FINANCIAL INFORMATION
The Quarterly Report for the first quarter will be published on 28 April 2011.
The Annual General Meeting will be held on 29 April at the Museum of Modern Art
in Stockholm.
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 90
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 7 February.
Q4 2010:
http://hugin.info/1014/R/1485822/420990.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#1485822]
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Datum: 07.02.2011 - 08:04 Uhr
Sprache: Deutsch
News-ID 51130
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