TIDM77BL
RNS Number : 4976W
ASSA ABLOY AB (publ)
27 April 2016
Organic growth
+3%
Operating income
+4%
Earnings per
share
+1%
A good start to the year for ASSA ABLOY
First quarter
-- Net sales amounted to SEK 15,891 M (15,252), an increase of
4%, of which 3% (5) was organic growth and 3% (3) was acquired
growth.
-- Strong growth in Americas and good growth in EMEA and Entrance Systems.
-- Growth in Global Technologies and continued negative growth
in Asia Pacific because of China.
-- Contracts have been signed for the acquisition of three
companies with combined expected annual sales of about SEK 750 M. A
contract has also been signed for the divestment of the Group's Car
Locks business, which has annual sales of about SEK 550 M.
-- Operating income (EBIT) amounted to SEK 2,411 M (2,329). The
operating margin was 15.2% (15.3).
-- Net income amounted to SEK 1,638 M (1,616).
-- Earnings per share increased by 1% and amounted to SEK 1.47 (1.45).
-- Cash flow was normal for the season and amounted to SEK 498 M (520).
Sales and income
1) Earnings per share has been recalculated for all historical
periods as a result of the 3:1 stock split carried out in 2015.
Comments by the President and CEO
"The first quarter of the year showed stable demand for ASSA
ABLOY, with increased sales of 4% during the quarter," says Johan
Molin, President and CEO. "The operating income increased in line
with sales and also improved by 4%.
"Organic growth was good, with a 3% increase for the quarter
despite the negative effect of Easter falling in the first quarter
this year. The strong sales trend on the US market continued, while
Europe and Entrance Systems showed good growth. Sales by Global
Technologies were weakly positive, but the downward trend in Asia
Pacific continued because of the market situation in China. The
emerging markets also remained weak, but with a few bright spots
that included eastern Europe and Latin America.
"ASSA ABLOY has once again won recognition for its strength in
innovation by winning no fewer than six first prizes for Best
Product Innovations at one of the industry's most important
exhibitions, ISC West in the USA. There is a clear market trend
towards an ever more digitized world in which locks are to an
increasing extent connected online. This change is occurring both
on the commercial and residential markets. For ASSA ABLOY it is a
very beneficial trend since we have consistently built up a
technological leadership.
"During the quarter Lighthouse and ADAEZ were acquired. The
acquisition of Lighthouse was especially exciting as a first step
in the strategic development of direct sales and service of
industrial doors in the American market. Lighthouse is the basis
for a new business unit in Entrance Systems which is expected to
grow significantly. During the quarter, ADAEZ was also acquired and
will be an excellent complement for our range of energy-efficient
products directed towards the rapidly rising demand for 'net zero
buildings'.
Operating income for the quarter increased by 4%. The underlying
marginal growth remained good as a result of organic growth of 3%
together with lower raw-material costs, savings made and price
compensation for exchange-rate effects. The operating margin
remained at virtually the same level as in the first quarter of
2015 despite negative effects from both exchange-rate effects and
dilution due to acquisitions.
"My judgment is that the global economic trend remains weak,
with a positive trend in America but low growth in Europe. In
addition many of the emerging markets are stagnating. However, our
strategy of expanding on the emerging markets remains unchanged,
since in the long term they are expected to achieve very good
economic growth. We are also continuing our investments in new
products, especially in the growth area of electromechanics."
First quarter
The Group's sales totaled SEK 15,891 M (15,252). Organic growth
for comparable units was 3% (5). Acquired units contributed 3% (3).
Exchange-rate effects had an impact of SEK -299 M (1,892) on sales,
that is -2% (16). Operating income before depreciation and
amortization, EBITDA, amounted to SEK 2,787 M (2,659). The
corresponding EBITDA margin was 17.5% (17.4). The Group's operating
income, EBIT, amounted to SEK 2,411 M (2,329). The operating margin
was 15.2% (15.3).
Net financial items amounted to SEK -201 M (-145). The Group's
income before tax was SEK 2,209 M (2,184), an improvement of 1%
compared with last year. Exchange-rate effects had an impact of SEK
-73 M (226) on income before tax. The profit margin was 13.9%
(14.3). The estimated underlying effective tax rate on an annual
basis was 26% (26). Earnings per share amounted to SEK 1.47
(1.45).
Restructuring measures
Payments related to all existing restructuring programs amounted
to SEK 95 M in the quarter. The restructuring programs proceeded
according to plan and led to a reduction in personnel of 457 people
during the quarter and 11,207 people since the projects began.
At the end of the year, provisions of SEK 457 M remained in the
balance sheet for carrying out the programs.
Comments by division
EMEA
Sales for the quarter in EMEA division totaled SEK 4,004 M
(3,944), with organic growth of 3% (3). The markets in Scandinavia
and eastern Europe showed strong growth. Finland, Benelux, France
and Italy showed good growth. Germany and Israel showed growth
while sales in Britain and Iberia were stable. Acquired growth
amounted to 2% (2). Operating income totaled SEK 634 M (626) and
the corresponding operating margin (EBIT) was 15.8% (15.9). Return
on capital employed amounted to 18.6% (19.1). Operating cash flow
before interest paid totaled SEK 188 M (217).
Americas
Sales for the quarter in Americas division totaled SEK 3,969 M
(3,664), with organic growth of 6% (8). Growth was strong for
traditional lock products, Electromechanical products, the
residential market, Canada and Mexico. Security doors showed good
development and High-security products showed growth. Acquired
growth amounted to 3% (2). Operating income totaled SEK 824 M (772)
and the operating margin (EBIT) was 20.8% (21.1). Return on capital
employed amounted to 23.0% (22.1). Operating cash flow before
interest paid totaled SEK 271 M (156).
Asia Pacific
Sales for the quarter in Asia Pacific division totaled SEK 1,758
M (1,847), with organic growth of -3% (-3). New Zealand and
South-East Asia showed strong growth. Sales levels weakened in
Australia and South Korea. China continued to show a negative sales
trend due to low domestic demand. Acquired growth amounted to 2%
(10). Operating income totaled SEK 174 M (189), and the
corresponding operating margin (EBIT) was 9.9% (10.2). Return on
capital employed amounted to 5.7% (7.1). Operating cash flow before
interest paid totaled SEK -221 M (-212).
Global Technologies
Sales for the quarter in Global Technologies division totaled
SEK 2,147 M (2,071), with organic growth of 1% (12). Quantum
Secure, AdvanIDe and Identification Technology (IDT) showed strong
growth within HID Global. Access Control (PACS) showed growth while
Government ID recorded weakening sales. Hospitality showed growth
and continued good earnings performance. Acquired growth amounted
to 4% (2). The division's operating income amounted to SEK 363 M
(360), with an operating margin (EBIT) of 16.9% (17.4). Return on
capital employed amounted to 14.7% (16.3). Operating cash flow
before interest paid totaled SEK 110 M (130).
Entrance Systems
Sales for the quarter in Entrance Systems division totaled SEK
4,291 M (4,041), with organic growth of 3% (5). Sales for 4Front
and Amarr increased strongly while growth for Door automation and
High-speed doors was good. European industrial doors showed a
stable sales level. Sales weakened for Ditec and for the
residential market in Europe. Acquired growth amounted to 5% (0).
Operating income totaled SEK 529 M (486), with an operating margin
(EBIT) was 12.3% (12.0). Return on capital employed amounted to
12.3% (11.6). Operating cash flow before interest paid totaled SEK
403 M (462).
Acquisitions and disposals
A total of three acquisitions were consolidated during the
quarter. The combined acquisition price for the companies acquired
this year amounted to SEK 1,094 M, and preliminary acquisition
analyses indicate that goodwill and other intangible assets with
indefinite useful life amount to SEK 785 M. The acquisition price
is adjusted for acquired net debt and estimated deferred
considerations. Estimated deferred considerations amount to SEK 123
M.
A decision has been taken to initiate the selling of the Group's
Car Locks business. A contract for the sale was signed with the
Japanese company Alpha Corporation in March. The transaction is
expected to be completed in the second quarter of 2016 and is
dependent on approval by the appropriate authorities. From 1
January the business has been reclassified under 'Assets held for
sale' in accordance with IFRS 5. As a result of the
reclassification, the quarter's sales fell by SEK 144 M compared
with the corresponding quarter last year.
Sustainable development
ASSA ABLOY's Sustainability Report for 2015 was published on 23
March 2016. The majority of the key indicators are continuing to
move in a positive direction. During the year, the number of
certified Environmental Product Declarations increased to 250. In
relation to the size of the entire business, the energy and water
consumption showed significant improvements compared with last
year. The Group's total emissions of greenhouse gases fell by 13%,
mostly related to the introduction of new production technology in
China.
(MORE TO FOLLOW) Dow Jones Newswires
April 27, 2016 04:41 ET (08:41 GMT)
The number of units certified in accordance with ISO 14001 and
equivalent environmental certification systems increased during the
year to 119 (111). 890 sustainability reviews were carried out in
low-cost countries during 2015. By the end of the year, 1,362
active suppliers had achieved minimum requirements in the areas of
sustainability and quality and were classed as Approved.
Parent company
Other operating income for the Parent company ASSA ABLOY AB
totaled SEK 401 M (244) for the first quarter. Operating income
amounted to
SEK -116 M (-232). Investments in tangible and intangible assets
totaled SEK
2 M (2). Liquidity is good and the equity ratio was 45.4%
(45.2).
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 92-97 of the 2015
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'.
The total amount in tables and statements might not always
summarize as there are rounding differences. The aim is to have
each line item corresponding to the source and it might therefore
be rounding differences in the total.
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, financial and tax-related
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 particular risks and risk management, see
the 2015 Annual Report.
Review
The Company's Auditors have not carried out any review of this
Report for the first quarter of 2016.
Stockholm, 27 April 2016
Johan Molin
President and CEO
Financial information
The Interim Report for the second quarter will be published on
19 July 2016.
The Interim Report for the third quarter will be published on 21
October 2016.
A capital markets day will be held on 16 November 2016 in
Stockholm, Sweden.
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.
ASSA ABLOY discloses the information provided herein
pursuant to the Securities Markets Act and/or the
Swedish Financial Instruments Trading Act. The information
was submitted for publication at 08.00 CET on 27 April.
ASSA ABLOY AB Tel +46 (0)8 506
(publ) 485 00
Box 703 40 Fax +46 (0)8 506
107 23 Stockholm 485 85
Visiting address www.assaabloy.com No. 6/2016
Klarabergsviadukten
90, Stockholm, Corporate identity
Sweden number: 556059-3575
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Financial information - Group
Financial information - Group
Financial information - Group
Financial information - Parent company
Quarterly information - Group
Reporting by division
Financial information - Notes
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRFAKODBFBKKOQB
(END) Dow Jones Newswires
April 27, 2016 04:41 ET (08:41 GMT)
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