20 Oct 2017

Organic growth in all divisions for ASSA ABLOY

Third quarter

  • Net sales increased by 3% to SEK 18,499 M (18,025), with organic growth of 3% (2) and acquired growth of 2% (2)
  • Strong growth was shown by Global Technologies and good growth by EMEA, Americas, Entrance Systems and Asia Pacific, despite weak China
  • Contracts have been signed for the acquisition of five companies with expected combined annual sales of about SEK 1,200 M
  • Global Technologies’ project business, AdvanIDe, has been sold. The business had annual sales of about SEK 1,250 M
  • Operating income (EBIT) increased by 2% to SEK 3,080 M (3,020). The operating margin was 16.7% (16.8)
  • Net income amounted to SEK 2,153 M (2,122)
  • Earnings per share increased by 1% to SEK 1.94 (1.91)
  • Operating cash flow decreased by 6% to SEK 2,654 M (2,830)
  • President and CEO Johan Molin is considering leaving ASSA ABLOY during 2018.

Sales and income

Third quarter January-September
2016 2017 Δ 2016 2017 Δ
Sales, SEK M 18,025 18,499 3% 51,809 56,028 8%
Of which:
Organic growth 307 590 3% 1,308 1,956 4%
Acquisitions and divestments 429 373 2% 1,512 1,273 2%
Exchange-rate effects -176 -488 -2% -810 990 2%
Operating income (EBIT), SEK M 3,020 3,080 2% 8,340 8,982 8%
Operating margin (EBIT), % 16.8% 16.7% 16.1% 16.0%
Income before tax, SEK M 2,844 2,910 2% 7,782 8,447 9%
Net income, SEK M 2,122 2,153 1% 5,786 6,250 8%
Operating cash flow, SEK M 2,830 2,654 -6% 5,846 6,053 4%
Earnings per share (EPS), SEK 1.91 1.94 1% 5.21 5.63 8%

 
Comments by the President and CEO


“ASSA ABLOY grew organically by 3% in the third quarter,” says Johan Molin, President and CEO. This is good growth considering that we had one working day less in the quarter. Global Technologies had strong organic growth of 6%. EMEA grew by 4%, Americas by 3%, Entrance Systems by 2% and Asia Pacific by 2%. In general, demand continues to be good. In Europe we saw a strong sales trend in areas including eastern Europe, southern Europe and France. In Asia Pacific we achieved strong growth in Pacific, South Korea and southern Asia. However, China remains challenging and our sales continued to decline.

“The positive trend for our electromechanical solutions is continuing, with strong growth on most markets. Our mobile key systems for both hotels and companies are achieving great success, and sales of smart door locks for the private residential market are also showing good growth.

“I am pleased to report that we are continuing to launch a large number of new products and solutions, many with energy-efficiency features. One example is our new electromechanical cylinder which auto-generates the electricity needed for a secure passage. These new locking solutions have very large potential, and we are seeing just the start of a long period of growth in electromechanical solutions

“We have also signed contracts for the acquisition of five companies, including Mercury Security, a leading OEM supplier of control equipment for access-control systems, and August Home, a leading smart lock business in the US. Mercury significantly strengthens the ASSA ABLOY Group’s position in access-control systems. August constitutes a strategic addition to the Group and reinforces our position in the residential smart door market. During the quarter too, the project business AdvanIDe, which has limited synergies with the rest of our business, was sold.

“Operating income for the quarter increased by 2% and amounted to SEK 3,080 M, with an operating margin of 16.7% (16.8). The margin improved in EMEA, Americas
and Entrance Systems but was lower for Global Technologies and for Asia Pacific.

“My judgment is that the global economic trend has improved to some degree compared with last year. On most markets there is a positive trend, but on some markets, such as China and Brazil, demand remains weak. However, our strategy of expanding our market presence, even on the emerging markets, remains unchanged. We are also continuing our investments in new products, especially in the growth area of electromechanicals.”

“I have informed the Board of Directors that I am considering passing on the baton as President and CEO of ASSA ABLOY to someone else during 2018. It has been wonderfully stimulating to have been able to lead ASSA ABLOY for more than twelve years on the journey of acquisition and change that we have undertaken. Today ASSA ABLOY is the market leader in the whole field of door opening solutions as a result of our clear strategy, innovative products and competent employees.”

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 10.00 today at Operaterrassen in Stockholm, Sweden.

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 information that ASSA ABLOY AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CEST on 20 October 2017.