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
| Full year | First quarter | ||||||
| 2014 | 2015 | Δ | 2015 | 2016 | Δ | ||
| Sales, SEK M | 56,843 | 68,099 | 20% | 15,252 | 15,891 | 4% | |
| of which, | |||||||
| Organic growth | 1,510 | 2,634 | 4% | 680 | 448 | 3% | |
| Acquisitions | 4,714 | 2,078 | 3% | 376 | 490 | 3% | |
| Exchange-rate effects | 2,138 | 6,544 | 13% | 1,892 | -299 | -2% | |
| Operating income (EBIT), SEK M | 9,257 | 11,079 | 20% | 2,329 | 2,411 | 4% | |
| Operating margin (EBIT), % | 16.3% | 16.3% | 15.3% | 15.2% | |||
| Income before tax, SEK M | 8,698 | 10,382 | 19% | 2,184 | 2,209 | 1% | |
| Net income, SEK M | 6,436 | 7,693 | 20% | 1,616 | 1,638 | 1% | |
| Operating cash flow, SEK M | 8,238 | 9,952 | 21% | 520 | 498 | -4% | |
| Earnings per share (EPS), SEK1) | 5.79 | 6.93 | 20% | 1.45 | 1.47 | 1% | |
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.”
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.
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