ASSA ABLOY
Q4 interim report 2020
Strong operational execution
- Organic sales development
- Stable sales in EMEA and Entrance Systems
- Sales declined in Americas and APAC
- Sales declined significantly in Global Technologies
- Solid EBIT-margin
- Adjusted for acquisitions and divestments the operating margin reached 16%
- Net costs reduced by SEK 0.5 bn
- Restructuring program, MFP8 launched
- Very strong cash flow, up 6% vs last year
2
Q4 2020 figures in summary
Sales MSEK 23,298 | -7% |
- - 5% organic
- +5% acquired and divested
- - 7% currency
- EBITA-margin15.6%* (16.8%)
- EBIT-margin14.9%* (16.2%)
EBIT MSEK 3,475 | -14% |
EPS SEK 2.33 | -7% |
- Excluding restructuring items. Includes capital loss and other exit costs from divestment of Gardesa MSEK -185.
3
- 000
- 000
- 000
- 000
- 000
- 000
- 000
- 000
- 000
Sales | EBIT |
-7% | -14% |
4 047
3 475
Q4 19 | Q4 20 | ||
Sales, MSEK | EBIT, MSEK | ||
- 500
- 000
- 500
- 000
- 500
- 000
- 500
- 000
- 500
Full year 2020 figures in summary
Sales MSEK 87,649 | -7% |
- - 8% organic
- +4% acquired and divested
- - 3% currency
- EBITA-margin14.3%* (16.4%)
- EBIT-margin13.6%* (15.9%)
EBIT MSEK 11,916 | -20% |
EPS SEK 7.54 | -18% |
- Excludes a positive non-cash income from revaluation in associates of MSEK 1,910 and restructuring items.
100 000
95 000
90 000
85 000
80 000
75 000
4
Sales | EBIT |
-7% | -20% |
14 920
11 916
Q4 19 | Q4 20 | ||
Sales, MSEK | EBIT, MSEK | ||
- 000
- 000
- 000
- 000
- 000
- 000
Sales by region Oct-Dec 2020
40 -3 -5
41 +8 -3
ASSA ABLOY | 100 | 0 | -5 |
Emerging markets | 16 | -9 | -11 |
10 -16-15
1-6-11 | ||
3 | 1 | -2 |
Share of sales, % | Change in local currencies |
QTD 2020 vs. QTD 2019, % | |
5 |
5 +15 1
Organic change
QTD 2020 vs. QTD 2019, %
Emerging markets comprise follows IMF's definition as per 2018-12-31
Market highlights
- Project wins
- Automatic door solutions for university hospital in South Korea
- Door hardware for airport in China
- Product launches
- Automatic sliding door with digital OLED signage incorporated into door
- New Yale Doorman smart lock launched in Scandinavia
- New HID EikonTouch fingerprint readers
- Awards
- Good Design Award for Lockwood brass core range
- Pandemic Tech Innovation Award for HID Digitized Social Distancing Solution
- Campus Safety BEST Award for HID Location Services for Workplace Safety
- 4 awards from Transform Awards North America for Yale brand
6
Sales growth
% | MSEK | ||||||||||||||||||||||||||||||||||||||
20 | 100 000 | ||||||||||||||||||||||||||||||||||||||
15 | 95 000 | ||||||||||||||||||||||||||||||||||||||
10 | 90 000 | ||||||||||||||||||||||||||||||||||||||
5 | 85 000 | ||||||||||||||||||||||||||||||||||||||
0 | 80 000 | ||||||||||||||||||||||||||||||||||||||
-5 | 75 000 | ||||||||||||||||||||||||||||||||||||||
-10 | 70 000 | ||||||||||||||||||||||||||||||||||||||
-15 | 65 000 | ||||||||||||||||||||||||||||||||||||||
-20 | 60 000 | ||||||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||
Organic growth, % | Acquired growth, % | Sales in fixed currencies, MSEK | |||||||||||||||||||||||||||||||||||||
7
Operating margin | Adj. for acq & div: |
16.1% in Q4 |
% | Run rate: EBIT-margin 13.6% (15.9%) | % | ||
18 | 18 | |||
17 | 17 | |||
Long term target range (average) | ||||
16 | 16 | ||||
15 | 15 | ||||
14 | 14 | ||||
13 | 13 | ||||
12 | 12 | ||||
11 | 11 | ||||
10 | 10 | ||||
9 | 9 | ||||
8 | 8 | ||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
Quarter | EBIT Rolling 12-months | EBITA* Rolling 12-months |
Excluding China write-downs, restructuring items and a positive revaluation of agta record.
*) Operating margin before amortization of intangible assets recognized in business combinations.
8
Operating profit
MSEK | -14% | MSEK, 12 months | |||
4 500 | vs | 16 000 | |||
Q4 LY | |||||
4 000 | 14 000 | ||||
3 500 | 12 000 | ||||
3 000 | 10 000 | ||||
2 500 | 8 000 | ||||
2 000 | |||||
1 500 | 6 000 | ||||
1 000 | 4 000 | ||||
500 | 2 000 | ||||
0 | 0 | ||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
Quarter | Rolling 12-months |
*) Excluding China write-downs, restructuring items and a positive revaluation of agta record
9
Acquisitions
- Fully active pipeline
- 4 acquisitions completed in Q4
- 12 acquisitions completed in 2020
- Acquired annualized sales of MSEK 5,600
- Divestments
- agta record and ASSA ABLOY Entrance businesses
- CEDES
- Gardesa
- Divested annualized sales of MSEK 1,600
10
Opening Solutions
EMEA
- Organic sales -1%
- Strong sales growth in the UK and France
- Stable sales in Germany and Scandinavia
- Sales declined in Benelux, Eastern Europe, Middle East/Africa and South Europe
- Operating margin 12.8% (16.0%)
- Good volume leverage
- Continued savings and efficiency improvements
- FX -10bps
- M&A -310bps
- Capital loss and exit costs from divestment of Gardesa of MSEK 185
22%
of Group sales
Adj for acq & div: | ||
6 000 | 15.9% in Q4 | 20% |
5 500 | 18% |
5 000 | 16% |
4 500 | 14% |
4 000 | 12% |
3 500 | 10% |
3 000 | 8% |
2 500 | 6% |
2 000 | 4% |
Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 |
Sales, MSEK | Operating margin, % | |
Excluding MFP restructuring items.
11
Opening Solutions
Americas
- Organic sales declined -4%
- Very strong sales growth in US Smart Residential, US Residential and Latin America
- Sales declined in Architectural Hardware, Electromechanical Solutions, Security Doors and in Canada
- Sales declined significantly in Access & High Security
- Operating margin 20.0% (20.0%)
- Strong volume leverage (90 bps), due to good cost control and savings, despite negative mix
- FX -20 bps
- M&A -70bps
Move of Perimeter Security to Entrance Systems
20% of Group sales
6 500 | 24% |
6 000 | 23% |
5 500 | 22% |
5 000 | 21% |
4 500 | 20% |
4 000 | 19% |
3 500 | 18% |
3 000 | 17% |
2 500 | 16% |
Q4 18 | Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 |
Sales, MSEK | Operating margin, % | |
Excluding MFP restructuring items. |
12
Opening Solutions
Asia Pacific
- Organic sales declined -5%
- Sales declined in Pacific, China and South Korea
- Significant sales decline in other regions
- New divisional organization from January
- Operating margin 8.2% (8.2%)
- Good leverage (40 bps)
- Strong operational efficiency gains
- Continued improvements in China
- Weak performance in India
- FX -30 bps
- M&A -10bps
9%
of Group sales
3 000 | 20% |
15% | |
2 500 | 10% |
5% | |
2 000 | |
0% | |
1 500 | -5% |
-10% | |
1 000 | -15% |
Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 |
Sales, MSEK | Operating margin, % | |
Excluding MFP restructuring items.
13
Global Technologies
- Organic sales declined -17%
- Sales declined in Identity & Access Mgmt Solutions, Secure Issuance and Physical Access Control
- Significant sales decline in all other business areas
- Significant sales decline in Global Solutions
- Operating margin 16.4% (18.3%)
- Negative volume leverage (-90bps)
- Continued strong impact from Covid-19
- Weak Citizen ID and Hospitality/ Marine
- Stronger decline in aftermarket business - Continued R&D investments
- FX -70 bps
- M&A -30 bps
15%
of Group sales
4 500 | 24% | |||||||
4 000 | 22% | |||||||
3 500 | 20% | |||||||
3 000 | 18% | |||||||
2 500 | 16% | |||||||
2 000 | 14% | |||||||
1 500 | 12% | |||||||
1 000 | 10% | |||||||
500 | 8% | |||||||
Q4 18 | Q1 19 | Q2 19 | Q3 19 | Q4 19 | Q1 20 | Q2 20 | Q3 20 | Q4 20 |
Sales, MSEK | Operating margin, % | |
Excluding MFP restructuring items.
14
Entrance Systems
- Organic sales -1%
- Strong sales growth in Perimeter Security
- Stable sales in Residential and Industrial
- Sales declined in Pedestrian
- Stable sales in service
- Operating margin 15.8% (16.3%)
-
Stable volume leverage (-10 bps)
Good cost control and savings - FX +20 bps
- M&A -60 bps
-
Stable volume leverage (-10 bps)
34%
of Group sales
8 500 | 18% | |||||
8 000 | 17% | |||||
7 500 | ||||||
7 000 | 16% | |||||
6 500 | 15% | |||||
6 000 | 14% | |||||
5 500 | 13% | |||||
5 000 | ||||||
4 500 | 12% | |||||
4 000 | 11% | |||||
Q4 18 | Q1 19 | Q2 19 | Q3 19 | Q4 19 | Q1 20 | Q2 20 Q3 20* Q4 20 |
Sales, MSEK | Operating margin, % | |
Excluding MFP restructuring items.
15
Financial summary, Q4 2020
FX & acquisition 'run-rate' effects in Q1 2021
(31 December 2020):
SALES
FX: -12%
M&A: +4%
October-December | January-December | ||||||
2019 | 2020* | 2020* | |||||
Sales | 24,946 | 23,298 | -7% | 94,029 | 87,649 | -7% | |
- Organic growth | 147 | -1,150 | - 5% | 2,652 | -7,150 | -8% | |
- Acquired net growth | 760 | 1,211 | +5% | 3,063 | 3,328 | +4% | |
- FX-differences | 872 | -1,709 | - 7% | 4,265 | -2,558 | -3% |
Operating income (EBIT)* | 4,047 | 3,475 | -14% | 14,920 | 11,916 | -20% | ||
EBITA-margin* | 16.8% | 15.6% | -1.2 pts | 16.4% | 14.3% | -2.1 pts | ||
EBIT-margin* | 16.2% | 14.9% | -1.3 pts | 15.9% | 13.6% | -2.3 pts | ||
Income before tax* | 3,779 | 3,306 | -13% | 13,883 | 11,133 | -20% | ||
Net income* | 2,767 | 2,582 | -7% | 10,243 | 8,375 | -18% | ||
EPS, SEK* | 2.49 | 2.33 | -7% | 9.22 | 7.54 | -18% | ||
Operating cash flow | 5,235 | 5,529 | 6% | 14,442 | 14,560 | 1% | ||
ROCE | 17% | 15% | -2.0 pts | 17% | 13% | -4.0 pts | ||
*) Excluding MFP restructuring items. Includes capital loss and other exit costs from divestment of Gardesa MSEK -185 | ||||||||
16 | ||||||||
Cost efficiency in everything we do
Progress in Q4
- Operational efficiency with more permanent savings
- Additional permanent headcount reduction of 650
- Travel costs reduced by 60%
MFP8 launched in Q4
- Restructuring costs of SEK 1.4 bn
- Total annual savings SEK 1.0 bn
- Headcount reduction ~2,100
- 10 factories closures
- >30 office/ warehouse closures
- 15 conversion assembly projects
Reduced SG&A and conversion net costs by
~SEK 0.5 bn
in Q4
17 | Public |
Bridge analysis - Q4 2020
Adj. for acq & div:
16.1% in Q4
MSEK | Q4 2019 | Organic | Currency | Acq/Div | Q4 2020 |
Growth | -5% | -7% | 5% | -7% | |
Sales | 24,946 | -1,150 | -1,709 | 1,211 | 23,298 |
Operating profit* | 4,047 | -166 | -321 | -86 | 3,475 |
Operating margin, %* | 16.2% | 14.4% | 18.8% | -7.1% | 14.9% |
Dilution/accretion | 0.0 pts | -0.1 pts | -1.2 pts | ||
*) Excluding restructuring items. Includes capital loss and other exit costs from divestment of Gardesa MSEK -185.
Sales decreased MSEK -1,648
- Price +1% and volume -6%
Margin drivers
- Strong operational leverage driven by cost measures of SEK 0.5bn
- Negative Covid-19 effects for all divisions, especially Global Technologies
- M&A effected by operating income of MSEK -185 from divestment of Gardesa (-80bps)
- Dilution from agta record (-40bps)
18
Cost breakdown as % of sales
October - December
QTD 2020 | ||||
% | QTD 2019 | excl. acq/div | QTD 2020 | |
Direct material | -36.1% | -35.7% | +0.4 pts | -35.6% |
Conversion cost | -23.9% | -24.0% | -0.1 pts | -24.6% |
Gross margin | 40.0% | 40.3% | +0.3 pts | 39.8% |
S, G & A | -23.8% | -24.2% | -0.4 pts | -24.9% |
EBIT* | 16.2% | 16.1% | -0.1 pts | 14.9% |
*) Excluding restructuring items. Includes capital loss and other exit costs from divestment of Gardesa MSEK -185.
- Operating margin excluding acquisitions and divestments above 16%
- Direct Material - still lower raw material costs and sourcing savings
- Conversion cost - continued savings offsetting negative sales and mix
- SG&A - continued investments in R&D with good savings in sales and admin
19
Operating cash flow, MSEK
Working capital
Record cash flow down SEK 1.8 Bn
Quarter | 12 months | ||||
6 000 | 20 000 | ||||
12 months cash flow / EBT = 131% | 18 000 | ||||
5 000 | 16 000 | ||||
4 000 | 14 000 | ||||
12 000 | |||||
3 000 | 10 000 | ||||
8 000 | |||||
2 000 | 6 000 | ||||
1 000 | 4 000 | ||||
2 000 | |||||
0 | 0 | ||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
Quarter, MSEK | Cash rolling 12 months, MSEK | EBT rolling 12 months, MSEK |
Excluding MFP restructuring items.
20
Gearing % and net debt, MSEK
Net debt/EBITDA**
1.9 (1.8)
Net debt | Gearing | |
40 000 | 80 | |
35 000 | Debt/Equity 51% (56%) | 70 | |||
30 000 | 60 | ||||
25 000 | 50 | ||||
20 000 | 40 | ||||
15 000 | 30 | ||||
10 000 | 20 | ||||
5 000 | 10 | ||||
0 | 0 | ||||
2015 | 2016 | 2017 | 2018 | 2019* | 2020 |
Net debt, MSEK | Gearing, % |
*) IFRS 16 effect on net debt SEK 3.7 bn. **) Excluding MFP restructuring items.
21
Earnings per share, SEK
Quarter | Dividend proposal: SEK 3.90 | 12 months | |||
2,50 | 10,00 | ||||
split in two payments | |||||
2,25 | 9,00 | ||||
2,00 | 8,00 | ||||
1,75 | 7,00 | ||||
1,50 | 6,00 | ||||
1,25 | 5,00 | ||||
1,00 | 4,00 | ||||
0,75 | 3,00 | ||||
0,50 | 2,00 | ||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
Quarter, SEK | Rolling 12 months, SEK | |
Excluding restructuring items, impairment of intangible assets in China and a positive revaluation of fair assets in agta record associates. Chart is restated for Stock split 3:1 2015.
22
Conclusions
- Strong operational execution
- Organic sales declined by 5%
- Operating margin at 16%, excl acq & div
- Very strong cash flow up 6% vs. last year
- Short term and long term views
- Covid-19continues to have negative effects
- Strong focus on cost and cash flow remains
- Investments in growth initiatives
- Strong long term growth drivers remain valid
- Financial targets stay unchanged
- Total dividend proposal of SEK 3.90
- Two equal installments in May and November
- Virtual Capital Markets Day 26 May
23
Q&A
Appendix
Cost breakdown as % of sales
QTD 2020 | YTD 2020 | ||||||||
excl. | excl. | ||||||||
% | QTD 2019 | acquisitions | QTD 2020 | YTD 2019 | acquisitions | YTD 2020 | |||
Direct material | -36.1% | -35.7% | +0.4 pts | -35.6% | -36.0% | -35.1% | +0.9 pts | -35.2% | |
Conversion cost | -23.9% | -24.0% | -0.1 pts | -24.6% | -23.9% | -24.6% | -0.7 pts | -25.0% | |
Gross margin | 40.0% | 40.3% | +0.3 pts | 39.8% | 40.1% | 40.3% | +0.2 pts | 39.8% | |
S, G & A | -23.8% | -24.2% | -0.4 pts | -24.9% | -24.2% | -26.3% | -2.1 pts | -26.2% | |
EBIT | 16.2% | 16.1% | -0.1 pts | 14.9% | 15.9% | 14.0% | -1.9 pts | 13.6% | |
* Excludes a non-cash income from revaluation in associates of MSEK 1,910.
26
Opening Solutions EMEA's bridge
MSEK | Q4 2019 | Organic | Currency | Acq/Div | Q4 2020 |
Growth | -1% | -4% | 0% | -5% | |
Sales | 5,525 | -35 | -244 | -3 | 5,242 |
Operating income | 884 | -7 | -43 | -163 | 670 |
Operating margin, % | 16.0% | 20.2% | 17.7% | 5069% | 12.8% |
Dilution/accretion | 0.0 pts | -0.1 pts | -3.1 pts |
12 months figures
Sales | 21,144 | 18,982 | |
EBIT | 3,396 | 2,263 | |
Operating cash flow before paid | 3,515 | 2,939 | |
interest | |||
Cash flow/EBIT | 103% | 130% | |
27
Opening Solutions Americas' bridge
MSEK | Q4 2020 | Organic | Currency | Acq/Div | Q4 2020 |
Growth | -4% | -9% | -10% | -23% | |
Sales | 5,900 | -208 | -612 | -513 | 4,567 |
Operating income | 1,182 | 1 | -129 | -139 | 915 |
Operating margin, % | 20.0% | -0.5% | 21.1% | 27.1% | 20.0% |
Dilution/accretion | 0.9 pts | -0.2 pts | -0.7 pts |
12 months figures
Sales | 23,172 | 19,013 | |
EBIT | 4,673 | 3,698 | |
Operating cash flow before paid | 5,263 | 4,837 | |
interest | |||
Cash flow/EBIT | 113% | 131% | |
28
Opening Solutions Asia Pacific's bridge
MSEK | Q4 2019 | Organic | Currency | Acq/Div | Q4 2020 |
Growth | -5% | -6% | 1% | -10% | |
Sales | 2,676 | -135 | -141 | 18 | 2,418 |
Operating income | 220 | 0 | -18 | -2 | 199 |
Operating margin, % | 8.2% | 0.1% | 13.1% | -11.8% | 8.2% |
Dilution/accretion | 0.4 pts | -0.3 pts | -0.1 pts |
12 months figures
Sales | 10,689 | 8,841 | |
EBIT | 879 | 396 | |
Operating cash flow before paid | 622 | 762 | |
interest | |||
Cash flow/EBIT | 71% | 192% | |
29
Global Technologies' bridge
MSEK | Q4 2019 | Organic | Currency | Acq/Div | Q4 2020 |
Growth | -17% | -7% | 5% | -19% | |
Sales | 4,377 | -710 | -317 | 194 | 3,545 |
Operating income | 800 | -156 | -83 | 20 | 582 |
Operating margin, % | 18.3% | 21.9% | 26.1% | 10.5% | 16.4% |
Dilution/accretion | -0.9 pts | -0.7 pts | -0.3 pts |
12 months figures
Sales | 15,423 | 14,158 | |
EBIT | 2,890 | 2,023 | |
Operating cash flow before paid | 3,183 | 2,509 | |
interest | |||
Cash flow/EBIT | 110% | 124% | |
30
Entrance Systems' bridge
MSEK | Q4 2019 | Organic | Currency | Acq/Div | Q4 2020 |
Growth | -1% | -7% | 23% | 15% | |
Sales | 6,893 | -64 | -417 | 1,515 | 7,927 |
Operating income | 1,125 | -21 | -52 | 198 | 1,251 |
Operating margin, % | 16.3% | 32.3% | 12.5% | 13.1% | 15.8% |
Dilution/accretion | -0.1 pts | 0.2 pts | -0.6 pts |
12 months figures
Sales | 25,553 | 28,323 | |
EBIT | 3,652 | 4,093 | |
Operating cash flow before paid | 3,655 | 4,974 | |
interest | |||
Cash flow/EBIT | 100% | 122% | |
31
Thank you
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Assa Abloy AB published this content on 05 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 February 2021 09:19:05 UTC.