Another Good Quarter for ASSA ABLOY

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Jul 19, 2017, 02:52 ET

STOCKHOLM, July 19, 2017 /PRNewswire/ -- Second quarter

Net sales increased by 8% to SEK 19,387 M (17,894), with organic growth of 2% (4) and acquired growth of 2% (4)
Good growth was shown by EMEA, Americas, Global Technologies and Entrance Systems and negative growth by Asia Pacific
Contracts have been signed for the acquisition of five companies with expected combined annual sales of about SEK 900 M
Operating income (EBIT) increased by 7% to SEK 3,114 M (2,910). The operating margin was 16.1% (16.3)
Net income amounted to SEK 2,179 M (2,026)
Earnings per share increased by 8% and amounted to SEK 1.96 (1.82)
Operating cash flow increased by 2% to SEK 2,575 M (2,519).

Sales and income

	Second quarter			First half-year

	2016	2017	Δ	2016	2017	Δ
Sales, SEK M	17,894	19,387	8%	33,785	37,529	11%
Of which:
Organic growth[1]	602	344	2%	1,002	1,366	4%
Acquisitions	593	451	2%	1,083	900	3%
Exchange-rate effects[1]	-383	698	4%	-633	1,478	4%
Operating income (EBIT), SEK M	2,910	3,114	7%	5,321	5,901	11%
Operating margin (EBIT), %	16.3%	16.1%		15.7%	15.7%
Income before tax, SEK M	2,729	2,944	8%	4,938	5,537	12%
Net income, SEK M	2,026	2,179	8%	3,664	4,097	12%
Operating cash flow, SEK M	2,519	2,575	2%	3,017	3,399	13%
Earnings per share (EPS), SEK	1.82	1.96	8%	3.30	3.69	12%

[1] The sales components Organic growth and Exchange-rate effects have been restated for the first half-year of 2016. No effect on sales figures.

Comments by the President and CEO

"The second quarter was another good quarter for ASSA ABLOY," says Johan Molin, President and CEO. Organic growth was 2% because of the fewer working days resulting from Easter during the quarter. This means that we have an organic growth of 4% for the first half-year. Sales in North America continued to develop well. In Europe the underlying demand is good but we have not seen any appreciable improvement. Sales in China fell once again, and disappointingly they also continued to decrease in Brazil and in the Middle East.

"Entrance Systems, Global Technologies and Americas all produced 3% organic growth, while EMEA grew by 2%. However, Asia Pacific showed negative growth because of weak demand in China."

"It is pleasing to see that our investments in software solutions to support architects and others who specify door solutions are leading to more inquiries and increased sales. It is also very gratifying that we are launching so many new and exciting products, primarily electronic and digital solutions. One example is a new smart handle for inner doors which provides full RFID compatibility and can be installed and integrated cost-effectively with virtually all access control systems on the market, but can also be used as a freestanding unit."

"During the quarter contracts were signed for the acquisition of five companies, including Arjo, a leading supplier of physical and digital identity solutions for national ID documents. The company strengthens our present offering of secure identity solutions and offers complementary growth opportunities."

"Operating income for the quarter increased by 7% and amounted to SEK 3,114 M, with an operating margin of 16.1% (16.3). The margin increased in EMEA and Entrance Systems divisions and remained stable for Americas and Global Technologies, but as expected Asia Pacific was weak. The operating cash flow improved by 2%."

"My judgment is that the global economic trend has improved to some degree compared with last year. On most markets in North and South America and in parts of Europe there is a positive trend, but on some markets, chiefly 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."

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 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 CEST on 19 July 2017.

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The full report (PDF)

SOURCE ASSA ABLOY