Strong sales growth
- Net sales increased by 15% to SEK 23,167 M (20,109), with organic growth of 6% (5) and acquired net growth of 3% (3)
- Very strong sales growth in Americas and Asia Pacific. Strong growth for Global Technologies, good growth in EMEA and growth in Entrance Systems
- Five acquisitions have been signed with combined expected annual sales of about SEK 800 M
- A new manufacturing footprint program was launched at year-end. The total estimated cost amounts to around SEK 1,500 M with a pay-back time of less than three years
- Operating income 2) (EBIT)amounted to SEK 3,746 M (3,359), with an operating margin of 16.2% (16.7)
- Net income 2) amounted to SEK 2,588 M (2,385)
- Earnings per share 2) amounted to SEK 2.33 (2.15)
- Operating cash flow amounted to SEK 4,923 M (4,876)
- The Board of Directors proposes a dividend of SEK 3.50 (3.30) per share for 2018.
Sales and income
|Sales, SEK M||20,109||23,167||15%||76,137||84,048||10%|
|Acquisitions and disposals||480||714||3%||1,753||1,793||2%|
|Operating income (EBIT) 1) 2), SEK M||3,359||3,746||12%||12,341||12,909||5%|
|Operating margin (EBITA) 1) 2), %||17.1%||16.7%||16.5%||15.8%|
|Operating margin (EBIT) 1) 2), %||16.7%||16.2%||16.2%||15.4%|
|Income before tax 1) 2), SEK M||3,226||3,515||9%||11,673||12,110||4%|
|Net income 1) 2), SEK M||2,385||2,588||9%||8,635||8,984||4%|
|Operating cash flow, SEK M||4,876||4,923||1%||10,929||11,357||4%|
|Earnings per share 1) 2), SEK||2.15||2.33||9%||7.77||8.09||4%|
1) Excluding impairment of goodwill and other intangible assets in the second quarter of 2018, totaling SEK –5,595 M before tax, corresponding to SEK –5,268 M after tax.
2) Excluding costs for a new manufacturing footprint program in the fourth quarter of 2018, totaling SEK –1,218 M before tax, corresponding to SEK –961 M after tax.
Comments by the President and CEO
Strong growth in the quarter
In the fourth quarter our organic growth accelerated to 6%, resulting in a strong organic sales growth of 5% for the full year. Acquired net growth was 3% during the quarter (2% for the full year). All divisions reported organic growth. The organic growth was very strong in Americas (14%) and Asia Pacific (11%), strong in Global Technologies (8%), while EMEA and Entrance Systems grew by 3% and 2% respectively.
Operating income for the quarter increased by 12% year-on-year to SEK 3,746 M, corresponding to an operating margin of 16.2%. The operating margin was stable in Americas and Asia Pacific, but declined in the other divisions mainly due to dilution from acquisitions and higher raw material costs.
Even with actions to balance the seasonal variations, cash flow came in strong at SEK 4,923 M, up 1% year-on-year.
Strong growth in electromechanical products
One of ASSA ABLOY’s value creation strategies is product leadership and we have invested in the development of electromechanical solutions over a long period. This is clearly generating results. Today, 30% of our sales are generated by electromechanical products and in the fourth quarter sales also increased by 30%. We are seeing gratifying improvements in both the commercial and residential segments.
High acquisition level
During the quarter we closed five acquisitions with total annualized sales of SEK 0.8 billion. With the acquisition of Luxer One, we will integrate a US market leader in the last mile delivery space, including ‘click and collect’ at retail stores. We also acquired Lorient, extending our door sealing portfolio alongside the innovative drop-down seals and finger protection solutions from Planet. The three other acquisitions were Exidor, Marenco and Pacific Door Systems. In the full year we acquired 19 companies with annualized sales of SEK 3.8 billion.
Launch of our next manufacturing footprint program
To maintain our market leadership, we are continuously working to optimize our operations. During the quarter, we launched our seventh manufacturing footprint program. As part of the program we will close about 50 offices and factories, outsource more non-core activities and further increase automation. The restructuring cost for the total program is estimated at SEK 1.5 billion, with a pay-back period of less than three years. SEK 1.2 billion was expensed in the fourth quarter and the remainder is expected to be expensed in Q4 2019.
Finally, I would like to welcome our new CFO Erik Pieder, who joined ASSA ABLOY in January. Erik has a solid finance and international industrial background and I look forward to working with him on ASSA ABLOY’s continued journey of profitable growth.
Stockholm, 5 February 2019
President and CEO
Further information can be obtained from:
President and CEO, Tel: +46 8 506 485 82
Chief Financial Officer, Tel: +46 8 506 485 72
ASSA ABLOY is holding a telephone and web conference at 10.00 today which can be followed on the Internet at www.assaabloy.com.
It is possible to submit questions by telephone on: +46 8–519 993 83, +44 333 300 9261 or +1 646 722 4957
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 CET on 5 February 2019.