A strong finish to 2017
Fourth quarter
- Net sales increased by 3% to SEK 20,109 M (19,484), with organic growth of 5% (1) and acquired net growth of 3% (2)
- Strong growth has been exhibited by Global Technologies and EMEA and good growth by Americas, Entrance Systems and Asia Pacific
- Contracts have been signed for the acquisition of two companies with combined expected annual sales of about SEK 400 M
- Operating income[1] (EBIT) was SEK 3,359 M (2,913), corresponding to an operating margin of 16.7% (15.0)
- Net income[1] amounted to SEK 2,385 M (2,088)
- Earnings per share[1] amounted to SEK 2.15 (1.88)
- Operating cash flow remained strong and amounted to SEK 4,876 M (4,620)
- Nico Delvaux has been appointed as the new President and CEO of ASSA ABLOY with effect from 15 March 2018
- The Board of Directors proposes a dividend of SEK 3.30 (3.00) per share for 2017.
Sales and income
| Fourth quarter | January-December | |||||||
| 2016 | 2017 | Δ | 2016 | 2017 | Δ | |||
| Sales, SEK M | 19,484 | 20,109 | 3% | 71,293 | 76,137 | 7% | ||
| Of which: | ||||||||
| Organic growth | 120 | 878 | 5% | 1,428 | 2,834 | 4% | ||
| Acquisitions and divestments | 455 | 480 | 3% | 1,967 | 1,753 | 2% | ||
| Exchange-rate effects | 609 | -733 | -5% | -201 | 257 | 1% | ||
| Operating income[1] (EBIT), SEK M | 2,913 | 3,359 | 15% | 11,254 | 12,341 | 10% | ||
| Operating margin[1] (EBITA), % | 15.2% | 17.1% | 16.1% | 16.5% | ||||
| Operating margin[1](EBIT), % | 15.0% | 16.7% | 15.8% | 16.2% | ||||
| Income before tax[1], SEK M | 2,767 | 3,226 | 17% | 10,549 | 11,673 | 11% | ||
| Net income[1], SEK M | 2,088 | 2,385 | 14% | 7,874 | 8,635 | 10% | ||
| Operating cash flow, SEK M | 4,620 | 4,876 | 6% | 10,467 | 10,929 | 4% | ||
| Earnings per share[1], SEK | 1.88 | 2.15 | 14% | 7.09 | 7.77 | 10% | ||
[1] Excluding costs for a new restructuring program for the fourth quarter and full year 2016, totaling SEK -1,597 M before tax, corresponding to SEK –1,221 M after tax.
Comments by the President and CEO
“ASSA ABLOY ended 2017 with strong growth in the fourth quarter,” says Johan Molin, President and CEO. “Organically we grew by 5%, with positive trends for all divisions. Global Technologies and EMEA had strong growth of 9% and 5% respectively, and Americas, Entrance Systems and Asia Pacific all had good growth of 3-4%. Demand was positive for nearly all regions and business units, with strong demand for our electromechanical products and smart door locks. In EMEA we saw sales increase in all regions. All business units in Americas also showed growth – even Brazil. In Asia Pacific we had growth in Pacific, South Korea and Southern Asia, while sales in China were stable. Our digital and mobile solutions continue to be very successful on the market. We saw strong growth in Global Technologies for access control products and mobile keys for both hotels and companies. In Entrance Systems we had strong growth for door automation, industrial doors and high-speed doors, among others.
During the quarter our leadership in smart door locks was confirmed by our collaboration with Amazon, where they chose our Yale locks for their new investment in home deliveries. Collaboration in smart door locks was also initiated with Walmart and Google during the quarter, to start in 2018. I am confident that the majority of all private residences will be converted to smart door locks during the next decade. A gigantic market is opening up! Our acquisition during the third quarter of August Home, a leading supplier of smart door solutions for the residential market in the USA, was therefore of strategic importance.
Our acquisition activity remained high during the fourth quarter with two acquisitions. We have signed a strategic contract to acquire Phoniro, a Swedish specialist in smart locks, personal alarms and access-control systems adapted to the care of the elderly – a growth segment that is rapidly being digitalized. We have also acquired Dale & Excel, which complements very well our market offer in the UK.
Operating income for the quarter increased by 5%* and amounted to SEK 3,359 M with an operating margin of 16.7% (16.5*). The margin improved in EMEA, Global Technologies and Entrance Systems but was lower for Americas and for Asia Pacific.
My judgment is that the global economic trend has improved to some degree compared with last year. On most markets, especially in Europe, 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 electromechanics.
In December Nico Delvaux was named as the new President and CEO of ASSA ABLOY AB. He began his employment with us on 3 February and during the next six weeks I will ensure a good handover to him before he takes over as CEO on 15 March. Nico is a strong and experienced leader of global businesses and I am confident that ASSA ABLOY’s journey of profitable growth will continue under Nico’s leadership.
With these comments I want to express my own thanks to all ASSA ABLOY’s employees and to wish them and my successor Nico Delvaux a continuing successful journey”.
* Excluding restructuring costs and the write-down in China in Q4 2016.
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 6 February 2018.
Tags: