TIDM77BL
RNS Number : 8614V
ASSA ABLOY AB (publ)
02 February 2017
Organic growth
1%
Operating income(1)
-4%
Earnings per
share(1)
-2%
Solid underlying development in the fourth quarter
Fourth quarter
-- Sales increased by 6% to SEK 19,484 M (18,301), with organic
growth of 1% (5). Acquisitions and divestments were 2%, with 3%
acquisitions and -1% divestments
-- Good growth for Entrance Systems and EMEA and growth for Americas and Global Technologies
-- Negative growth for Asia Pacific, mainly due to weak demand in China
-- The previously announced restructuring program has been
launched with an operating cost of SEK 1,597 M
-- Operating income(1) (EBIT) was SEK 2,913 M (3,038),
corresponding to an operating margin of 15.0% (16.6)
- Adjusted operating income excluding a write down in China of
SEK 300 M, was SEK 3,213 M (3,038) corresponding to a margin of
16.5% (16.6).
-- Net income(1) amounted to SEK 2,088 M (2,120)
-- Earnings per share(1) amounted to SEK 1.88 (1.91)
-- Operating cash flow remained strong and amounted to SEK 4,620 M (4,625)
-- The Board of Directors proposes a dividend of SEK 3.00 per share for 2016.
Sales and income
Fourth quarter January-December
================= ======== =================== ========
2015 2016 <DELTA> 2015 2016 <DELTA>
----------------------- -------- ------- -------- --------- -------- --------
Sales, SEK M 18,301 19,484 6% 68,099 71,293 5%
Of which:
Organic growth 827 120 1% 2,634 1,428 2%
Acquisitions and
divestments 643 455 2% 2,078 1,967 3%
Exchange-rate effects 983 609 3% 6,544 -201 0%
Operating income(1)
(EBIT), SEK M 3,038 2,913 -4% 11,079 11,254 2%
Operating margin(1)
(EBIT), % 16.6% 15.0% 16.3% 15.8%
Income before tax(1)
, SEK M 2,851 2,767 -3% 10,382 10,549 2%
Net income(1) ,
SEK M 2,120 2,088 -2% 7,693 7,874 2%
Operating cash
flow, SEK M 4,625 4,620 0% 9,952 10,467 5%
Earnings per share(1)
, SEK 1.91 1.88 -2% 6.93 7.09 2%
(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.
See also financial information on pages 9-16.
Comments by the President and CEO
"The fourth quarter of the year had, as expected, somewhat lower
growth for ASSA ABLOY since sales in the previous year were very
strong," says Johan Molin, President and CEO. "In general, the
mature markets had a good development, while many growth markets,
especially China and the Middle East, had a weak demand.
"It was very positive that Entrance Systems maintained its
strong performance in both Europe and the USA, supported by a
number of new products and service concepts that have been launched
in recent years. It was pleasing that the demand for
electromechanical lock solutions remained strong in EMEA and that
sales in Americas continued at a high level. At Global Technologies
interest in virtual keys remained strong and many customers are
rolling out SEOS solutions. Also, sales of solutions using mobile
keys to hotels continue to be successful. The demand remained weak
in China, as expected.
"Acquisitions during the quarter included Bluvision, a leading
supplier of location-tracking systems in buildings. Bluvision
complements our range of access-control products well. The
industrial-door company Construction Specialties, a leading
distributor and service company for industrial doors in Mexico, was
also acquired. Another important step was taken in eastern Europe
through the acquisition of LOB, the market leader for locks in
Poland.
"A new restructuring program was launched at year-end. The
program aims to further rationalize our business and should be
viewed against the background that the Group has acquired around
fifty companies since the previous program. The restructuring cost
amounts to SEK 1,597 M.
"Excluding the cost of the restructuring program, operating
income for the quarter amounted to SEK 2,913 M, with an operating
margin of 15.0%. The underlying operating margin, excluding a
write-down of operating assets in China totaling SEK 300 M,
remained very good and reached 16.5% (16.6). Operating cash flow
was seasonally very strong.-
"My judgment is that the global economic trend remains weak. On
most markets in North and South America and in parts of Europe
there is a positive trend, but on many markets in Asia and the
Middle East the trend is 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."
Fourth quarter
The Group's sales increased by 6% to SEK 19,484 M (18,301).
Organic growth amounted to 1% (5). Acquisitions and divestments
were 2%, with 3% acquisitions and -1% divestments. Exchange-rate
effects affected sales by 3%. Operating income before depreciation,
EBITDA, excluding restructuring costs of SEK 1,597 M (see below),
amounted to SEK 3,316 M (3,406). The corresponding EBITDA margin,
excluding restructuring costs, was 17.0% (18.6).
The Group's operating income, EBIT, excluding restructuring
costs, amounted to SEK 2,913 M (3,038) a decline of 4%. The figure
was affected negatively by the write-down of operating assets in
China by SEK 300 M. The operating margin, excluding restructuring
costs, was 15.0% (16.6).
Net financial items amounted to SEK -146 M (-187). The Group's
income before tax, excluding restructuring costs, was SEK 2,767 M
(2,851), a decrease of 3% compared with previous year.
Exchange-rate effects had an impact of SEK 148 M (73) on income
before tax. The profit margin, excluding restructuring costs, was
14.2% (15.6). The effective tax rate on an annual basis was 26%
(26). Earnings per share, excluding restructuring costs, amounted
to SEK 1.88 (1.91), a decline of 2% compared with previous
year.
Full year
The Group's sales for the full year 2016 increased by 5% to SEK
71,293 M (68,099). Organic growth was 2% (4). Acquisitions and
divestments contributed 3%, with 4% acquisitions and -1%
divestments. Exchange-rate effects affected sales by 0%.
Operating income before depreciation, EBITDA, excluding
restructuring costs, amounted to SEK 12,833 M (12,512). The
corresponding margin, excluding restructuring costs, was 18.0%
(18.4). The Group's operating income, EBIT, excluding restructuring
costs, amounted to SEK 11,254 M (11,079), which was an increase of
2% compared with previous year. The corresponding EBIT operating
margin was 15.8% (16.3).
Earnings per share, excluding restructuring costs, amounted to
SEK 7.09 (6.93), an increase of 2% compared with previous year.
Operating cash flow totaled SEK 10,467 M (9,952).
Restructuring measures
A new restructuring program was launched at year-end 2016. The
closing of about fifty offices and factories is expected to take
place over a period of three years. The cost of the restructuring
is estimated to amount to SEK 1,597 M, with an estimated payback
time (inclusive of investments) of less than three years.
Payments related to all restructuring programs amounted to SEK
235 M (145) in the quarter. The restructuring programs proceeded
according to plan and led to a personnel reduction of 246 people in
the quarter and 12,162 people since the projects began in 2006. At
the end of the year provisions of SEK 1,572 M remained in the
balance sheet for carrying out the programs, of which SEK 1,262 M
relates to this year's restructuring program.
Comments by division
EMEA
Sales for the quarter in EMEA division totaled SEK 4,557 M
(4,411), with organic growth of 3% (5). The markets in Scandinavia,
United Kingdom, Benelux, Iberia and Eastern Europe showed strong
growth. Germany showed good growth and Finland and Israel showed
growth. Italy showed a stable sales level. France and Africa/Middle
East had negative growth. The positive trend for electromechanical
products continued. Acquired growth, net, was --1%, with 3%
acquisitions and
-4% divestments. Exchange-rate effects on sales were 1%.
Operating income excluding restructuring costs totaled SEK 766 M
(705), which represents an operating margin (EBIT) of 16.8% (16.0).
Return on capital employed amounted to 21.2% (20.3). Operating cash
flow before interest paid totaled SEK 1,407 M (1,408).
Americas
Sales for the quarter in Americas division totaled SEK 4,362 M
(3,984), with organic growth of 1% (8). Growth was strong in Mexico
and good for doors and security fencing and in South America,
except in Brazil. High-security products, the private residential
market and Canada showed growth, while the trend was negative for
traditional lock products and in Brazil. Acquired growth amounted
to 3%. Exchange-rate effects on sales were 6%. Operating income
excluding restructuring costs totaled SEK 908 M (838), which
represents an operating margin (EBIT) of 20.8% (21.0). Return on
capital employed amounted to 23.3% (24.1). Operating cash flow
before interest paid totaled SEK 1,031 M (1,162).
Asia Pacific
Sales for the quarter in Asia Pacific division totaled SEK 2,427
M (2,580), with organic growth of -8% (-4). There was strong growth
for South Korea and Japan, while Pacific showed a stable trend. In
China and South-East Asia demand was weak, with declining sales.
Acquired growth amounted to 0%. Exchange-rate effects on sales were
2%. Operating income excluding restructuring costs totaled SEK -47
M (381), which represents an operating margin (EBIT) of -2.0%
(14.8). Operating income was affected by a write-down of operating
assets in China totaling SEK 300 M. Return on capital employed
amounted to -1.8% (12.3). Operating cash flow before interest paid
totaled SEK 769 M (869).
Global Technologies
Sales for the quarter in Global Technologies division totaled
SEK 2,687 M (2,504), with organic growth of 1% (8). Logical access
(IAM), Access control (PACS) and Identification technology (IDT)
achieved strong growth within HID Global. Secure issuance showed
good growth. AdvanIDe and Government ID showed negative growth.
Hospitality showed strong growth. Acquired growth amounted to 3%.
Exchange-rate effects on sales were 3%. Operating income excluding
restructuring costs amounted to SEK 500 M (460), which represents
an operating margin (EBIT) of 18.6% (18.4). Return on capital
employed amounted to 18.0% (18.5). Operating cash flow before
interest paid totaled SEK 778 M (706).
Entrance Systems
Sales for the quarter in Entrance Systems division totaled SEK
5,772 M (5,097), with organic growth of 4% (6). Door automation, US
industrial and US residential doors showed strong growth.
Industrial doors showed good growth, while high-speed doors and
door components had somewhat lower sales. Acquired growth amounted
to 5%. Exchange-rate effects on sales were 4%. Operating income
excluding restructuring costs totaled SEK 888 M (770), which
represents an operating margin (EBIT) of 15.4% (15.1). Return on
capital employed amounted to 18.9% (18.5). Operating cash flow
before interest paid totaled SEK 1,062 M (981).
Acquisitions and divestments
A total of five acquisitions were consolidated during the
quarter. The combined acquisition price for the thirteen companies
acquired during the year amounted to SEK 3,023 M, and preliminary
acquisition analyses indicate that goodwill and other intangible
assets with indefinite useful life amount to SEK 2,395 M. The
acquisition price is adjusted for acquired net debt and estimated
deferred considerations. Estimated deferred considerations amount
to SEK 568 M.
On 1 December it was announced that ASSA ABLOY had acquired
Bluvision in the USA, a leading American supplier of solutions in
the market for the Internet of Things (IoT). The company has 21
employees and its sales in 2017 are expected to amount to about SEK
160 M.
Sustainable development
In January 2017 ASSA ABLOY became an official regional partner
in the World Green Building Council's Europe Regional Network. The
Network represents a confederation of 24 Green Building Councils,
eight Regional Partners and over 5,000 company members who work
together to promote the development of sustainability and
innovation in the European building sector.
The Sustainability Report for 2016, with reviews of the Group's
targets and other information about sustainable development, will
be available from 22 March 2017 on the company's website,
www.assaabloy.com.
Parent company
Other operating income for the Parent company ASSA ABLOY AB
totaled SEK 4,023 M (3,392) for the full year. Operating income for
the same period amounted to SEK 1,687 M (1,351). Investments in
tangible and intangible assets totaled SEK 224 M (41). Liquidity is
good and the equity ratio was 45.8% (46.1).
Board, Dividend and Annual General meeting
Ulrik Svensson left his position as a Member of the Board of
Directors of ASSA ABLOY AB at the end of 2016 in parallel with
leaving his position as Managing Director of Melker Schörling AB at
the same time.
The Board of Directors proposes a dividend of SEK 3.00 (2.65)
per share for
the 2016 financial year, an increase of 13%. The Annual General
Meeting will be held on 26 April 2017. The Annual Report for 2016
will be available from 22 March 2017 on the company's website,
www.assaabloy.com.
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 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'.
ASSA ABLOY makes use of a number of financial performance
measures that are not defined in the reporting rules that the
company uses - so-called 'alternative performance measures'. For
definitions of financial performance measures, refer to Page 16 of
this Quarterly Report and to the company's latest Annual Report. To
check how the financial measurements have been calculated for
current and earlier periods, refer to the tabulated figures in this
Quarterly Report and to the company's Annual Report. The Annual
Reports for the years 1994 to 2015 appear on the company's website
www.assaabloy.com.
Totals quoted in tables and statements may not always be the
exact sum of the individual items because of rounding differences.
The aim is that each line item should correspond to its source, and
rounding differences may therefore arise.
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 fourth quarter of 2016.
Stockholm, 2 February 2017
Johan Molin
President and CEO
Financial information
The Interim Report for the first quarter of 2017 will be
published on 26 April 2017.
The Annual General meeting will be held on 26 April 2017 at the
Museum of Modern Art 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
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 2 February 2017.
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.03/2017
Klarabergsviadukten
90, Stockholm, Corporate identity
Sweden number: 556059-3575
http://www.rns-pdf.londonstockexchange.com/rns/8614V_-2017-2-2.pdf
Financial information - Group
Financial information - Group
Financial information - Group
Financial information - Parent company
Quarterly information - Group
Reporting by division
Financial information - Notes
Definitions of financial performance measures
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GIGDDUUGBGRD
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February 02, 2017 04:03 ET (09:03 GMT)
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