Strong growth in mature markets
Second quarter
- Net sales increased by 5% to SEK 17,894 M (17,082), of which 4% (4) was organic growth and 4% (3) was acquired growth
- Strong growth in Americas, EMEA and Global Technologies and good growth in Entrance Systems
- Negative growth in Asia Pacific owing to weak demand in China
- Contracts have been signed for the acquisition of six companies with combined expected annual sales of about SEK 950 M
- Operating income (EBIT) increased by 6% to SEK 2,910 M (2,742). The operating margin was 16.3% (16.1)
- Net income amounted to SEK 2,026 M (1,888)
- Earnings per share rose by 7% and amounted to SEK 1.82 (1.70)
- The quarter’s operating cash flow increased by 27% to SEK 2,519 M (1,991).
Sales and income
| Second quarter | First half-year | |||||||
| 2015 | 2016 | Δ | 2015 | 2016 | Δ | |||
| Sales, SEK M | 17,082 | 17,894 | 5% | 32,334 | 33,785 | 4% | ||
| Of which: | ||||||||
| Organic growth | 656 | 650 | 4% | 1,336 | 1,099 | 4% | ||
| Acquisitions | 453 | 593 | 4% | 829 | 1,083 | 3% | ||
| Exchange-rate effects | 2,008 | -431 | -3% | 3,900 | -730 | -3% | ||
| Operating income (EBIT), SEK M | 2,742 | 2,910 | 6% | 5,071 | 5,321 | 5% | ||
| Operating margin (EBIT), % | 16.1% | 16.3% | 15.7% | 15.7% | ||||
| Income before tax, SEK M | 2,551 | 2,729 | 7% | 4,735 | 4,938 | 4% | ||
| Net income, SEK M | 1,888 | 2,026 | 7% | 3,504 | 3,664 | 5% | ||
| Operating cash flow, SEK M | 1,991 | 2,519 | 27% | 2,511 | 3,017 | 20% | ||
| Earnings per share (EPS), SEK | 1.70 | 1.82 | 7% | 3.15 | 3.30 | 5% | ||
Comments by the President and CEO
“The second quarter of the year showed strong demand for ASSA ABLOY,” says Johan Molin, President and CEO. “The mature markets in general produced strong growth, something we have not seen since the financial crisis, at the same time as the emerging markets continued their slowdown. Sales increased by 5% during the quarter, of which 4% was organic growth. Operating income outstripped sales growth and increased by 6%.
“Organic growth during the quarter was affected by a positive calendar effect of approximately one day. In Americas, EMEA and Global Technologies an encouraging sales growth continued, while Entrance Systems showed a rather weaker growth. The downturn in Asia Pacific continued because of a weak demand situation, especially in China. The emerging markets also remained weak, but with some bright points in eastern Europe and in Latin America apart from Brazil.
“ASSA ABLOY has once again been named as one of the world’s one hundred most innovative companies by Forbes magazine. It is pleasing to see that our innovative new products are growing strongly. During the quarter a so-called multi-family solution was launched, whereby ASSA ABLOY for the first time offers a total solution for multi-family buildings where all lock units are both electronic and connected. The electronic content is growing steadily on the market, and there is great potential for the future.
“A further six companies were acquired during the quarter. Consolidation of the market for entrance automation continued with the acquisition of Nassau, which is a regional leader primarily in Denmark. Another interesting acquisition was the company Mauer, the market leader in locks in Bulgaria. ASSA ABLOY has been building a market leadership in eastern Europe for a number of years, which Mauer complements very well.
“Operating income for the quarter increased by 6%. At the same time the operating margin rose to 16.3% in spite of negative effects from both acquisition dilution and exchange-rate effects. The improvement in the margin was mainly due to good organic growth of 4% and lower raw-material costs.
“My judgment is that the global economic trend remains weak, but with a positive trend in America and parts of Europe. Elsewhere, 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.
This information is information that ASSA ABLOY AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CET on 19 July 2016.