assa abloy q4 2014 investors presentation 5 february 2015
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Financial highlights Q4 2014
Strong ending of the year – Strong growth in Americas, Global Tech and ESD – Growth in EMEA – Decline in APAC due to strict credit policy and weak market
in China – Strong cash flow
Sales 15,847 MSEK +20% 3% organic, 8% acquired growth, 9% currency
EBIT 2,681 MSEK +22% Currency effect 209 MSEK
EPS 5.10 SEK +25% Underlying tax rate 26%
2
Financial highlights Jan-Dec 2014
A very solid year with strong continued progress – US market turning strong – Europe divided – Emerging markets slowing, especially China in Q4 – Big success from innovative products – Good contribution from acquisitions
Sales 56,843 MSEK +17% 3% organic, 9% acquired growth, 5% currency
EBIT 9,257 MSEK +17% Currency effect 349 MSEK
EPS 17.38 SEK +17% Underlying tax rate 26%
3
Strong progress of Government ID – New orders; Ireland, Saudi Arabia, Angola – First National ID card in EU based on E-passport
Strong demand in the US for home automation – Home automation drives Digital Door Lock sales
Starwood mobile keys show good progress – 150 first hotels under installation
Sustainability in good progress – New products create sustainable total door solutions – Good progress of KPIs in manufacturing
4
Market highlights
5
Group sales in local currencies Jan-Dec 2014
2 +21
36 +26 16 +3
4 +7
1 +17
Share of Group sales 2014 YTD, % Year-to-date vs previous year, %
41 +6
Emerging markets 25% of sales
-15-10-5051015202530
29 00032 00035 00038 00041 00044 00047 00050 00053 00056 00059 000
2007 2008 2009 2010 2011 2012 2013 2014Organic Growth Acquired Growth Sales in Fixed Currencies
Sales growth, currency adjusted
6
2014 Q4 +11% Organic +3% Acquired +8%
Sales MSEK Growth, %
Operating income (EBIT*), MSEK
4 5005 0005 5006 0006 5007 0007 5008 0008 5009 0009 500
9001 1001 3001 5001 7001 9002 1002 3002 5002 700
2007 2008 2009 2010 2011 2012 2013 2014Quarter Rolling 12-months
Quarter 12-months
Run rate 9,257 MSEK (7,923) +17%
7
12,0
13,0
14,0
15,0
16,0
17,0
2007 2008 2009 2010 2011 2012 2013 2014Quarter Rolling 12-months
2014 Dilution Q4 -0.2% 2014 -0.3%
Operating margin (EBIT), %
Run rate 2014 16.3% (16.3)
Long term target range (average)
8
EBIT Margin
Manufacturing footprint
9
Status manufacturing footprint programs 2006-2013: – 64 factories closed to date, 16 to go – 77 factories converted to assembly, 12 to go – 36 offices closed, 11 to go
Personal reduction QTD 459p and total 9,414p
570p in further planned reductions
941 MSEK of the provision remains for all programs
Margin highlights Q4 2014
EBIT margin 16.9% (16.6) +0.3%
+ Volume increase 2%, price 1%
+ Margin increase +0.3% + Organic growth + Manufacturing footprint + Currency +0.2% - Acquisitions -0.2%
10
Acquisitions 2014
Fully active pipeline
20 acquisitions done in 2014
Annualized sales 2,600 MSEK
Added sales 5.4%
11
Digi Electronic Lock, China
12
Turnover of 300 MSEK with 620 employees
The leading digital door lock manufacturer in China
Complete product range for the mid to low segments
Complements our current product range
Accretive to EPS
ODIS, Chile
13
Turnover of 120 MSEK with 240 employees
Leading supplier of locks and padlocks in Chile
Adds complementary market segments
Enables total door opening solutions
Accretive to EPS
Silvana and Metalika, Brazil
14
Combined turnover of 250 MSEK with 410 employees
Market leading companies for locks and fire doors in Brazil
Complements existing business in Brazil
Accretive to EPS
Division - EMEA
Strong growth in Germany, Iberia, Eastern Europe and Africa
Good growth in Scandinavia
Flat in the UK, Italy and Israel
Negative in Benelux, France and Finland
Continued investment in sales and R&D
Operating margin (EBIT) + Organic 2% + Slight leverage due to savings - Dilution & Currency -0.4%
SALES share of
Group total %
25
15
13141516171819
2009 2010 2011 2012 2013 2014
EBIT %
Division - Americas
Strong growth in AHW, Doors, El-mech, Residential and South America
Good growth in High Security, Canada and Mexico
Investment in R&D and spec salesmen
Strong quoting activity
Operating margin (EBIT)
+ Organic 8%
+ Strong leverage from efficiency
- Currency & Dilution -0.2%
17
SALES share of
Group total %
20
18
19
20
21
22
23
2009 2010 2011 2012 2013 2014
EBIT %
Division - Asia Pacific
Strong growth in Australia, New Zealand, SEA and North Asia
Strong decline in China due to strict credit policy and weak market
Strong contribution from efficiency works in China
Strategic addition of Digi Electronic Lock
Operating margin (EBIT) - Organic -7% + Efficiency in China + Positive sales mix + Positive dilution +0.3%
14
19
SALES share of
Group total %
579
11131517
2009 2010 2011 2012 2013 2014
EBIT %
Division - Global Technologies
HID – Strong growth in Gov-ID, Biometrics and IDT (inlays) – Good growth in IAM (Identity and access management) – Flat sales in Project sales – Austin move almost completed
Hospitality – Strong growth – Maintained strong profit
Operating margin (EBIT) + Organic 5% + Positive sales mix + Currency +1.0%
13
21
SALES share of
Group total %
1415161718192021
2009 2010 2011 2012 2013 2014
EBIT %
Division - Entrance Systems Strong growth in Door Automatics, High Speed
Doors, Flexiforce, Amarr and 4Front
Decline in Industrial and Residential EU and Ditec
Price pressure in EU
Good progress in newly acquired companies
Operating margin (EBIT) + Organic 4% + Efficiency improvement - Price pressure in EU and Mix - Dilution -0.6%
28
23
SALES share of
Group total %
1112131415161718
2009 2010 2011 2012 2013 2014
EBIT %
Financial highlights Q4 2014
MSEK 2013 2014 Change 2013 2014 Change
Sales 13,242 15,847 +20% 48,481 56,843 +17% Whereof Organic growth +3% +3% Acquired growth +8% +9% FX-differences +1,129 +9% +2,138 +5% Operating income (EBIT) 2,202 2,681 +22% 7,923 9,257 +17% EBIT-margin (%) ) 16.6 16.9 16.3 16.3 Operating cash flow 2,541 3,469 +37% 6,803 8,238 +21% EPS (SEK) 4.08 5.10 +25% 14.84 17.38 +17%
4th Quarter Twelve months
26
Bridge Analysis – Oct-Dec 2014
MSEK 2013
Oct-Dec
Organic Currency Acq/Div 2014
Oct-Dec
3% 9% 8% 20%
Revenues 13,242 363 1,129 1,113 15,847
EBIT 2,202 113 209 157 2,681
% 16.6% 31.2% 18.6% 14.1% 16.9%
Dilution / Accretion 0.3% 0.2% -0.2%
27
P&L Components as % of sales Jan – Dec 2014
Direct material 35.0% 35.4% 36.5%
Conversion costs 25.5% 25.4% 24.9%
Gross Margin 39.5% 39.2% 38.6%
S, G & A 23.2% 22.6% 22.3%
EBIT 16.3% 16.6% 16.3%
2014 YTD excluding acquisitions
2013 YTD
2014 YTD
28
Operating cash flow, MSEK
3 500
4 500
5 500
6 500
7 500
8 500
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
2007 2008 2009 2010 2011 2012 2013 2014
Quarter Cash Rolling 12-months EBT Rolling 12 months
29
Quarter 12 months
Gearing % and net debt MSEK
0
20
40
60
80
100
120
0
5 000
10 000
15 000
20 000
25 000
30 000
2007 2008 2009 2010 2011 2012 2013 2014
Net debt Gearing
Debt/Equity 62 (68)
Net debt/EBITDA 2.1 (2.2)
30
Net Debt Gearing
*) 2007-2011 Not restated for changed pension accounting principles.
Earnings per share, SEK
8,009,0010,0011,0012,0013,0014,0015,0016,0017,0018,00
0,000,501,001,502,002,503,003,504,004,505,005,50
2007 2008 2009 2010 2011 2012 2013 2014Quarter Rolling 12-months
Quarter SEK 12-months
31
Excluding restructuring costs of 1,000 MSEK in Q4 and full year 2013. 2007-2011 Not restated for changed pension accounting principles.
2014 EPS +17% Dividend proposal 2015: 6.50 SEK (5.70)
Stock split proposal 3:1
Conclusions Q4 2014
Strong growth by 20% with 3% organic – Strong in US – Europe divided – Emerging markets slowing, especially China
New products very successful, 32% of sales Strong EBIT improvement of 22% Very strong cash flow +37%
33
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