Sales and EARNINGS January - march, 2001
Sales for the period January to March 2001 totaled SEK 5,104 M (2,976), an increase of 72%. In local currencies the growth in sales volume amounted to 64%, of which organic growth for comparable units contributed 4% while acquired units accounted for 60%. Exchange-rate effects affected sales positively by SEK 225 M (19).

 

The Group's income before tax increased by 34% to SEK 380 M (284). Translation of the foreign subsidiaries' results affected this figure positively by SEK 12 M due to exchange-rate variations.

Earnings per share after tax and full conversion increased by 23% to SEK 0.70 (0.57). The tax burden increased somewhat due to the increased non-deductible goodwill, and increased earnings in countries with high tax rates.

 

Operating cash flow before tax and acquisitions amounted to SEK 293 M (288). Cash earnings per share after tax and full conversion (CEPS) increased by 54% to SEK 1.79 (1.16).

 

Development of the subsidiaries
Abloy in Finland continued to develop well. Growth on both domestic and export markets was good and amounted to 7%. The door-closer business founded a few years ago is now showing strong growth and a profitability in line with other Finnish units.

 

Scandinavia increased by 2%. Sales were affected by the move of the foundry business to Romania. The Swedish units showed good growth. Norway was somewhat affected by uncertainty surrounding the introduction of a new tax on new construction. The integration of Sloth & Co in Denmark continues with merging of product portfolios.

 

Central Europe increased by 4%. The German market is rather slow even though the former East Germany has begun to show signs of growth. effeff continued to develop well as the Group's 'center of excellence' for electric strikes. The integration of Lips in the Netherlands is proceeding well. A major reengineering program with good profit potential has started, and has already increased the company's order fill rate significantly.

 

South Europe grew by 5%. The businesses in Spain and Belgium showed the strongest growth. Yale Italy improved faster than expected, with increased focus on its home market. In France, Vachette has introduced a profit center based organization, inspired by the success of Sargent in the USA and Abloy in Finland.

 

The Group's old units in Britain showed good growth of 8%. Among the Yale units, work is being concentrated in four areas. The well-known brand names Yale, Chubb and Union are being focused on their traditional market segments. Administrative costs are high and too few works directly with customers. Manufacture is being organized into profit centers in order to improve workflows and reduce indirect costs. At the same time the product range is being strengthened by, for example, the introduction of a new series of multi-point locks from Vachette.

 

The old units in the North American business showed good growth of 5%. A new organization for the Yale companies has been implemented, with separate units for Yale, CorbinRusswin, Norton and Rixson operating with a common sales force. All managers are in place. There is great eagerness for change, illustrated by significant improvements in delivery performance and inventory levels during the period. Folger Adams, which manufactures prison locks and is running at a loss, has acquired new management and is well on the way to turnaround.

 

In Australia, Lockwood, as a result of successful cross-selling projects, grew by 1% in a weak market. New products - cylinders, padlocks and panic exit devices - have been launched in short timeframes with help from other Group companies. The successful reengineering continues and will further increase earnings.

 

Growth in New Markets remains good and amounted to 20%. The sales increase at Mul-T-Lock in Israel was especially strong, driven by quickly expanding exports. Eastern Europe is also showing good development. The South African business has successfully refocused on higher security and started to grow. A new organization for the whole Asian business has been established.

 

Sales in the hotel segment increased by 2%. Europe and the marine segment are continuing to show good sales growth. Asia has returned to growth, but the USA is still weak. Elsafe, which manufactures hotel-room safes, is developing very positively.

Newly acquired HID has started the year well with strong growth in domestic and export markets. The company is also a great contributor to the Group's ongoing development projects.

SIGNIFICANT events.

 

Acquisition of outstanding shares in Lockwood
At the time of ASSA ABLOY's acquisition of 50% of the shares in the Australian company Lockwood, the seller, EMAIL, gave ASSA ABLOY an option to acquire the remainder of the shares after three years. The option also gave ASSA ABLOY the right to acquire the remaining shares earlier if EMAIL were taken over. Following a change of ownership of EMAIL, the outstanding shares have been acquired at a price equaling the equity in Lockwood. Hence no additional goodwill has been created.

 

Acquisition of RIS
RIS is the local distributor of Abloy's and VingCard's lock products in the Czech Republic and Slovakia. The company's current sales are CZK 58 M (SEK 14 M). The acquisition strengthens the Group's position in both countries, particularly in the electromechanical area, and provides an excellent complement to FAB.

 

Joint venture with UDP established in North America
United Door Products, UDP, a business unit of United Dominion Industries, is a major US manufacturer of security doors. The company's products are often sold together with Yale's door products. UDP's current sales are USD 180 M and the company is showing good profitability. A joint venture with sales of USD 350 M is being created between UDP and ASSA ABLOY's security-door manufacturers, Curries and Graham.

 

ASSA ABLOY will have management responsibility and an 80% shareholding, with an option to acquire the outstanding shares after two years. United Dominion Industries will have a 20% shareholding and receive a cash payment of USD 96 M. The companies have complementary product ranges, and significant production synergies are foreseen. Only a minor goodwill element will arise from the establishment of this joint venture, which will contribute to earnings per share from the start.

 

Acquisition of additional shares in KESO
KESO is a leading Swiss cylinder manufacturer with a strong international brand name. The company has current sales of CHF 50 M, of which 50% are exports, with Germany the largest market. KESO's unique and flexible cylinder concept will provide a valuable addition to ASSA ABLOY's product portfolio. ASSA ABLOY's previous shareholding of 35% of the company is now increased to 65%. The outstanding shares will be acquired at the end of 2003.

 

ACCOUNTING PRINCIPLES
The new standard RR 9 Income taxes issued by the Swedish Financial Accounting Standards Council has been adopted as of January 1 2001 which represent a change in accounting principles. All other accounting principles remain unchanged.

OUTLOOK FOR 2001
The development potential for ASSA ABLOY is still substantial. The company's strong position, security-driven growth and potential for continued rationalization, together with consolidation of the industry, create opportunities for continued good development of profit.

 

Stockholm, 4 May, 2001

 

Carl-Henric Svanberg

President and CEO

 

The company auditor has not reviewed this interim report.

 

Interim Report (January 1 - June 30): August 10, 2001
Interim Report (January 1 - September 30): November 6, 2001
Year-end Report for 2001: February 7, 2002
Annual Report for 2001: March 2002

 

For further information, please contact

Carl-Henric Svanberg, President & CEO, tel: +46-8-506 485 52 or +46-70-510 0551,
or Göran Jansson, CFO, tel. +46-8-506 485 72 or +46-70-698 85 72

 

ASSA ABLOY AB (publ)

P.O. Box 70340, SE-107 23 Stockholm

Tel: Int +46-8-506 485 00, Fax: Int +46-8-506 485 85
Visiting address: Klarabergsviadukten 90
Information concerning Investors' Meeting, Web and Telephone Conference can be found at ASSA ABLOY's web site: www.assaabloy.com