ASSA ABLOY Leading the future ABLOY CMD...© ASSA ABLOY. All rights reserved Agenda 1. Introduction...

of 79 /79
ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience ASSA ABLOY Leading the future Capital Markets Day 2017 Johan Molin, CEO Carolina Dybeck Happe, CFO

Embed Size (px)

Transcript of ASSA ABLOY Leading the future ABLOY CMD...© ASSA ABLOY. All rights reserved Agenda 1. Introduction...

  • ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and convenience

    © ASSA ABLOY. All rights reserved

    ASSA ABLOY Leading the future Capital Markets Day 2017

    Johan Molin, CEO Carolina Dybeck Happe, CFO

  • © ASSA ABLOY. All rights reserved

    Agenda

    1. Introduction - ASSA ABLOY 2017

    2. Finance – Overview

    3. Strategy - Our Road to the Future

    4. Leading the Future

    2

  • © ASSA ABLOY. All rights reserved

    Good industry to be in!

    Increased demand for security

    Urbanization & increased wealth

    Shift to new technologies

    Sustainable buildings

    Change of applications and codes

    3

    Trends create underlying strong demand

  • © ASSA ABLOY. All rights reserved

    ASSA ABLOY Solid market position

    Leading brands

    Large installed base

    Strong channel position

    Large specification team

    4

    Strong barriers to entry

  • © ASSA ABLOY. All rights reserved

    Good sales and customer composition

    5

    Residential

    End users

    25%

    75%

    Commercial and institutional

    New construction

    Recurring business

    33%67%

    Aftermarket

    Stable sales and profit

  • © ASSA ABLOY. All rights reserved

    ASSA ABLOY divisions

    6

    Mech & elmechlocks, cylinders &

    security doors

    Electronic accessand identity

    Entrance automation

    Americas24%

    EMEA23%

    Asia Pacific11%

    Global Technologies(HID and Hospitality)

    ASSA ABLOY Entrance Systems

    Product offering Organization % of Group Sales

    58%

    28%

    14%

    12 months until Sept. 2017

  • © ASSA ABLOY. All rights reserved

    January - September 2017in brief

    Good organic growth, +4%

    • Strong growth in Global Tech

    • Good growth in EMEA, Americas and

    Entrance Systems

    • Flat APAC, despite weak China

    • Continued good development for smart

    door locks and electro-mechanical solutions

    17 acquisitions done, +4%

    • Acquired annualized sales 2,800 MSEK

    7

  • © ASSA ABLOY. All rights reserved

    January - September 2017 figures in summary

    Sales SEK 56,028 M +8%

    • 4% organic

    • 2% acquired

    • 2% currency

    EBIT SEK 8,982 M +8%

    • Currency effect SEK 167 M

    Margin 16.0% (16.1)

    EPS SEK 5.63 +8%

    8 340

    8 982

    0

    2 000

    4 000

    6 000

    8 000

    10 000

    12 000

    0

    10 000

    20 000

    30 000

    40 000

    50 000

    60 000

    Jan-Sep 2016 Jan-Sep 2017

    Sales, SEK M EBIT, SEK M

    Sales EBIT

    8

    Sales +8%

  • © ASSA ABLOY. All rights reserved

    Financial targetsOver a business cycle

    9

  • © ASSA ABLOY. All rights reserved

    Sales growth, currency adjusted

    45 000

    50 000

    55 000

    60 000

    65 000

    70 000

    75 000

    80 000

    -10

    -5

    0

    5

    10

    15

    20

    25

    2012 2013 2014 2015 2016 2017

    Organic growth, % Acquired growth, % Sales in fixed currencies, SEK M

    10

    SEK M%

    CAGR 8% last 5 years

    Organic 3%Acquired 5%

  • © ASSA ABLOY. All rights reserved

    Acquisitions add further growth

    0

    2

    4

    6

    8

    10

    12

    14

    16

    18

    20

    0

    2

    4

    6

    8

    10

    12

    14

    16

    18

    20

    2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017YTD

    M&A growth, net, % M&A average growth, %

    11

    10 years - CAGR 6%

    *) M&A growth, net, including divestments.

  • © ASSA ABLOY. All rights reserved

    13

    14

    15

    16

    17

    18

    13

    14

    15

    16

    17

    18

    2012 2013 2014 2015 2016 2017

    Quarter Rolling 12-months

    Long term target range (average)

    Operating margin, %

    12

    Run rate 16.2%* (16.2) %

    *) Excluding China write down SEK 300 M in Q4 and full year 2016 and restructuring items.

    Accretion / dilution from 2017 OG, ex APAC* OG APAC* M&A currency12-months +0.4% -0.3% -0.2% +0.1%

  • © ASSA ABLOY. All rights reserved

    Operating profit, SEK M

    4 000

    6 000

    8 000

    10 000

    12 000

    14 000

    16 000

    1 000

    1 500

    2 000

    2 500

    3 000

    3 500

    4 000

    2012 2013 2014 2015 2016 2017

    Quarter Rolling 12-months

    13

    SEK M SEK MRun rate SEK 12,194 M* (11,380) +7%

    *) Excluding China write down SEK 300 M in Q4 and full year 2016 and restructuring items.

    +66%in

    5 years

  • © ASSA ABLOY. All rights reserved

    Global competitors

    14

    1,1

    2,1

    2,5*

    7,7

    0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0

    Estimated annual sales 2016, EUR Billions = Sales 2010

    3.9 Bn

    1.9 Bn

    1,8 Bn

    1.0 Bn

    * Dormakaba, including Stanley Mechanical Security, pro forma

  • © ASSA ABLOY. All rights reserved

    Agenda

    1. Introduction - ASSA ABLOY 2017

    2. Finance – Overview

    3. Strategy - Our Road to the Future

    4. Leading the Future

    15

  • © ASSA ABLOY. All rights reserved

    0

    10 000

    20 000

    30 000

    40 000

    50 000

    60 000

    70 000

    80 000

    0

    2 500

    5 000

    7 500

    10 000

    12 500

    15 000

    17 500

    20 000

    2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

    Quarter Rolling 12-months

    Sales development since 2005 Substantial top line improvement

    16

    Sales +172% since 2005SEK MSEK M

  • © ASSA ABLOY. All rights reserved

    Growth has triggered significant changeASSA ABLOY is fundamentally different compared to 2005

    17

    41%23%

    32%

    24%

    7%

    11%

    12%

    14%

    8%

    28%

    0

    10 000

    20 000

    30 000

    40 000

    50 000

    60 000

    70 000

    80 000

    2005 2017 12-months*

    Sales per division

    Entrance Systems

    Global Technologies

    Asia Pacific

    Americas

    EMEA

    SEK M

    *) Sales for 2017 is rolling 12-months Oct 2016 –Sep 2017.

  • © ASSA ABLOY. All rights reserved

    Growth has triggered significant changeASSA ABLOY is fundamentally different compared to 2005

    18

    39%23%

    36%

    31%

    6%

    8%

    11%

    15%

    8%

    24%

    0

    2 000

    4 000

    6 000

    8 000

    10 000

    12 000

    14 000

    2005 2017 12-months*

    Operating profit per division

    Entrance Systems

    Global Technologies

    Asia Pacific

    Americas

    EMEA

    SEK M

    Exluding Other. *) Operating profit for 2017 is rolling 12-months Oct 2016 –Sep 2017.

  • © ASSA ABLOY. All rights reserved

    13

    14

    15

    16

    17

    18

    13

    14

    15

    16

    17

    18

    2012 2013 2014 2015 2016 2017

    Quarter Rolling 12-months

    Long term target range (average)

    Operating margin, %

    19

    Run rate 16.2%* (16.2) %

    *) Excluding China write down SEK 300 M in Q4 and full year 2016 and restructuring items.

    Accretion / dilution from 2017 OG, ex APAC* OG APAC* M&A currency12-months +0.4% -0.3% -0.2% +0.1%

  • © ASSA ABLOY. All rights reserved

    Operating margin (EBIT*) 2010-2017

    20

    *) Excluding restructuring, currency and China write down Q4 2016.

    Not including margin on export from mature markets.

    Emerging markets **dilution -1.4%

    Mature markets accretion

    Entrance Systems dilution -0.8%

    ASSA ABLOY Group

    6

    8

    10

    12

    14

    16

    18

    20

    2010 2011 2012 2013 2014 2015 2016 2017Sep12m

    ASSA ABLOY Group Entrance Systems

    Mature Markets Emerging Markets

  • © ASSA ABLOY. All rights reserved

    Acquisitions first dilute, but give long term leverage

    9

    17

    20

    8

    13

    18

    13 12

    20

    16

    13

    17

    0

    10

    20

    30

    40

    50

    60

    0

    5 000

    10 000

    15 000

    20 000

    25 000

    30 000

    35 000

    40 000

    2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

    Sales (cumulative), SEK M Sales (annual), SEK M Number of acquistions

    21

    174 acquisitions since 2006SEK 34 billion in added sales

    SEK M

    17 acquisitions done 2017

    *) Including LOB and August, not consolidated.

  • © ASSA ABLOY. All rights reserved

    Company acquired 2012

    22

    0

    5

    10

    15

    20

    25

    30

    35

    40

    45

    50

    0

    25

    50

    75

    100

    125

    150

    175

    200

    225

    250

    275

    2012 2013 2014 2015 2016 2017

    Sales EBIT

    Five years developmentSales +55%, EBIT +272%

  • © ASSA ABLOY. All rights reserved

    Company acquired 2013

    23

    0

    10

    20

    30

    40

    50

    60

    70

    0

    25

    50

    75

    100

    125

    150

    175

    200

    225

    250

    275

    2013 2014 2015 2016 2017

    Sales EBIT

    Four years developmentSales +35%, EBIT +97%

  • © ASSA ABLOY. All rights reserved

    Company acquired 2013

    24

    0

    5

    10

    15

    20

    25

    30

    35

    40

    45

    0

    50

    100

    150

    200

    250

    300

    350

    400

    450

    500

    2013 2014 2015 2016 2017

    Sales EBIT

    Four years developmentSales +30%, EBIT +81%

  • © ASSA ABLOY. All rights reserved

    Company acquired 2012

    25

    0

    20

    40

    60

    80

    100

    120

    140

    160

    500

    525

    550

    575

    600

    625

    650

    675

    700

    2012 2013 2014 2015 2016 2017

    Sales EBIT

    Five years developmentSales +17%, EBIT -28%

  • © ASSA ABLOY. All rights reserved

    Company acquired 2012

    26

    0

    20

    40

    60

    80

    100

    120

    0

    100

    200

    300

    400

    500

    600

    2012 2013 2014 2015 2016 2017

    Sales EBIT

    Five years developmentSales +238%, EBIT +220%

  • © ASSA ABLOY. All rights reserved

    Operating margin (EBIT)Effects of recent acquisitions and divestments

    ASSA ABLOY Group – no major

    impact on reported EBIT, %

    • Global Technologies

    • Acquisition of Mercury (Nov) & Arjo

    • Divestment of AdvanIDe

    • Accretion

    • Americas

    • August (consolidated in late Q4)

    • Dilution

    • Seasonality

    27

  • © ASSA ABLOY. All rights reserved

    Operating margin (EBIT)Effects of recent acquisitions and divestments

    Stable EBIT, % - proforma

    Adj. EBITA, % - proforma

    increases

    • More M&A amortization from

    SEK 300 M to SEK 500 M/year

    15%

    16%

    17%

    18%

    12 months 12 months + M&A

    EBIT, % Adj. EBITA, %*

    28

    Adj. EBITA

    16.6%*

    Adj. EBITA

    16.9%*

    Pro-forma profitability

    Excluding China write down SEK 300 M in Q4 and full year 2016 and restructuring items. Adj. EBITA = EBIT + M&A amortization, %Rolling 12 months figures.

    EBIT16.2%

  • © ASSA ABLOY. All rights reserved

    Financial highlights

    29

    July - September January - September

    SEK M 2016 2017 Change 2016 2017 Change

    Sales 18,025 18,499 3% 51,809 56,028 8%

    - Organic growth* 307 590 3% 1,308 1,956 4%

    - Acquired growth 429 373 2% 1,512 1,273 2%

    - FX-differences* -176 -488 -2% -810 990 2%

    Operating income (EBIT) 3,020 3,080 2% 8,340 8,982 8%

    EBIT-margin 16.8% 16.7% 16.1% 16.0%

    Income before tax 2,844 2,910 2% 7,782 8,447 9%

    Net income 2,122 2,153 1% 5,786 6,250 8%

    EPS, SEK 1.91 1.94 1% 5.21 5.63 8%

    Operating cash flow 2,830 2,654 -6% 5,846 6,053 4%

    * The sales components Organic growth and FX-differences has been restated for 2016. No effect on sales numbers.

  • © ASSA ABLOY. All rights reserved

    Bridge Analysis – YTD 2017

    Positive leverage from all divisions, except APAC, +40 bps

    Dilution from China/APAC, as expected, -30 bps

    Dilution from acquisitions in Entrance Systems, Global

    Technologies and EMEA

    30

    SEK M YTD 2016 Organic Currency Acq/Div YTD 2017

    4% 2% 2% 8%

    Sales 51,809 1,956 990 1,273 56,028

    Operating profit 8,340 371 167 103 8,982

    Operating margin, % 16.1% 19.0% 16.9% 8.1% 16.0%

    Dilution/accretion 0.1% 0.0% -0.2%

  • © ASSA ABLOY. All rights reserved

    P&L components have changed but stable margin

    Sourcing more direct material

    • Short term swings in raw material costs

    Lower conversion costs due to efficiency projects

    Increased investments in RnD and front sales

    31

    % YTD 20122017*

    12-months Δ

    Direct material -34.6% -36.2% -1.6%

    Conversion costs -25.9% -24.4% +1.5%

    Gross margin 39.5% 39.4% -0.1%

    S, G & A -23.4% -23.2% +0.2%

    EBIT 16.1% 16.2% +0.1%

    *) Sales for 2017 is Rolling 12 Months Oct-Sep

    *) Excluding China write down SEK 300 M in Q4 and full year 2016 and restructuring items.

  • © ASSA ABLOY. All rights reserved

    Target = 100% automation of processes

    CAD

    General Support Processes

    PDM

    ProductConfigurator

    Order

    ManufacturingPurchasing

    Logistics, warehouse Shipping

    Customer

    Suppliers

    &

    Part

    ners

    Product development

    Seamless Flow

    32

    22%

    43%

    0%

    20%

    40%

    60%

    2011 2017

    E-commerce

    7%

    28%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    2011 2017

    PDM

    0%

    78%

    0%

    20%

    40%

    60%

    80%

    100%

    2011 2017

    Seamless Production

    16%

    63%

    0%

    20%

    40%

    60%

    80%

    2011 2017

    E-procurement

    0%

    46%

    0%

    10%

    20%

    30%

    40%

    50%

    2011 2017

    ERP

  • © ASSA ABLOY. All rights reserved

    Operating cash flow, SEK M

    0

    2 000

    4 000

    6 000

    8 000

    10 000

    12 000

    14 000

    16 000

    18 000

    20 000

    0

    500

    1 000

    1 500

    2 000

    2 500

    3 000

    3 500

    4 000

    4 500

    5 000

    2012 2013 2014 2015 2016 2017

    Quarter, SEK M Cash rolling 12 months, SEK M EBT rolling 12 months, SEK M

    33

    Quarter 12 months12 months cash / EBT = 95%*

    *) Excluding China write down SEK 300 M in Q4 and full year 2016 and restructuring items.

  • © ASSA ABLOY. All rights reserved

    Gearing % and net debt, SEK M

    0

    15

    30

    45

    60

    75

    90

    0

    5 000

    10 000

    15 000

    20 000

    25 000

    30 000

    2012 2013 2014 2015 2016 2017

    Net debt, SEK M Gearing, %

    34

    Net debt GearingDebt/Equity 53% (57)

    Net debt/EBITDA1.9 (2.0)

  • © ASSA ABLOY. All rights reserved

    2,00

    3,00

    4,00

    5,00

    6,00

    7,00

    8,00

    0,50

    0,75

    1,00

    1,25

    1,50

    1,75

    2,00

    2012 2013 2014 2015 2016 2017

    Quarter, SEK Rolling 12 months, SEK

    Quarter

    Earnings per share, SEK

    35

    12 monthsYTD EPS +8%

    *) Excluding restructuring items of SEK 1,597 M for Q4 and full year 2016.Chart is restated for Stock split 3:1 2015 and excludes cost for restructuring programs in 2013 and 2016.

    +66%in

    5 years

  • © ASSA ABLOY. All rights reserved

    Agenda

    1. Introduction - ASSA ABLOY 2017

    2. Finance – Overview

    3. Strategy - Our Road to the Future

    4. Leading the Future

    36

  • © ASSA ABLOY. All rights reserved

    Strategy

    37

  • © ASSA ABLOY. All rights reserved

    Our vision – remains unchanged

    To be the true world leader, most successful and

    innovative provider of total door opening solutions

    To lead in innovation and provide well-designed,

    convenient, safe and secure solutions that give true added

    value to our customers

    To offer an attractive company to our employees

    38

  • © ASSA ABLOY. All rights reserved

    Total door opening solutionsSeamlessly connected to the building

    39

  • © ASSA ABLOY. All rights reserved

    Market presence

    40

    1

  • © ASSA ABLOY. All rights reserved

    ASSA ABLOY as Group brand

    Leverages local and

    global presence

    Total door solutions

    Product cross fertilization

    Reduced operational costs

    41

    Complementing brands

    70% ASSA ABLOY

    30%70%

    ASSA ABLOY

  • © ASSA ABLOY. All rights reserved

    Customer focus through segmentation

    The segmented approach assures customer focus and

    relevance and provides us with a superior

    understanding of the customer needs.

    42

  • © ASSA ABLOY. All rights reserved

    SpecificationASSA ABLOY leads the industry

    Global Specification force

    • End-customer specifiers

    • Electromechanical specifiers

    BIM – Building Information

    Modeling

    • Configuration and simulation tool

    • Architects, contractors, building

    consultants & facility managers

    Environmental product

    declarations automatically

    generated

    43

  • © ASSA ABLOY. All rights reserved

    Video BIM

    44

  • © ASSA ABLOY. All rights reserved

    45

    Gødstrup Super Hospital, Denmark

    €0.6mproject value

    BIM

    Solution: ARX Access Control, Master Key System, Architectural Hardware, Door Closers

  • © ASSA ABLOY. All rights reserved

    0

    2 000

    4 000

    6 000

    8 000

    10 000

    12 000

    14 000

    16 000

    18 000

    20 000

    2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Sep 12m

    Revenues, SEK M

    Emerging markets sales, SEK M

    0

    2 000

    4 000

    6 000

    8 000

    10 000

    12 000

    14 000

    16 000

    18 000

    20 000

    2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Sep 12m

    Revenues, SEK M

    46

    SEK M

    Share of sales from emerging markets, %. Emerging markets comprise Africa, Asia (ex. Japan), the Middle East, South America and Eastern Europe.

    13%

    23%

    xx%

  • © ASSA ABLOY. All rights reserved

    Latin America growth

    47

    +103%

    1 535

    3 349

    0

    500

    1 000

    1 500

    2 000

    2 500

    3 000

    3 500

    4 000

    2012 2017 Sep 12m

    Chart TitleLatin America, Group salesSEK M

    +118%

  • © ASSA ABLOY. All rights reserved

    Africa & Middle East growth

    48

    +103%

    1 623

    2 468

    800

    1 000

    1 200

    1 400

    1 600

    1 800

    2 000

    2 200

    2 400

    2 600

    2 800

    3 000

    2012 2017 Sep 12m

    Chart TitleAfrica & Middle East, Group sales

    SEK M

    +52%

  • © ASSA ABLOY. All rights reserved

    Asia growth, excluding China

    2 337

    4 149

    1 000

    1 500

    2 000

    2 500

    3 000

    3 500

    4 000

    4 500

    5 000

    2012 2017 Sep 12m

    Chart Title

    49

    Asia excl. China, Group sales

    +78%

    SEK M

  • © ASSA ABLOY. All rights reserved

    China growth

    50

    +103%

    4 304

    4 978

    3 000

    3 500

    4 000

    4 500

    5 000

    5 500

    2012 2017 Sep 12m

    Chart TitleChina, Group salesSEK M

    +16%

  • © ASSA ABLOY. All rights reserved

    Xinmao

    PanPan Yingkou

    Tianming

    Langfang

    HuashengGuoqiang

    PanPan Wuxi

    PanPan Chengdou

    Jiawei

    Taizhou

    Shenfei

    PanPan Changsha

    Sanhe

    DigiGuli Longdian

    ASSA ABLOY in China

    55%45%

    2014

    North South

    43%57%

    2017

    North South

    N

    S

    51

  • © ASSA ABLOY. All rights reserved

    174 acquisitions since 2006 Added sales 34 BSEK

    Fully active pipeline

    17 acquisitions done in 2017

    Acquired annualized sales 2,800 MSEK – added sales 4%

    Divestment of AdvanIDe 1,250 MSEK

    52

  • © ASSA ABLOY. All rights reserved

    Product leadership

    53

    2

  • © ASSA ABLOY. All rights reserved

    Product leadership through innovation

    54

    Innovation

    Our biggest driver for growth

    R&D Investments

    +200 percent since 2006

    2,000 R&D engineers in 2017

    Long term competitive

    advantage

    Continuous innovation

    >25% of sales from new products

    Benefits Costs Quality

  • © ASSA ABLOY. All rights reserved

    26,6

    29,7

    30,9

    30,0

    27,2

    21

    23

    25

    27

    29

    31

    33

    2013 2014 2015 2016 2017 Sep.

    Sales from products launched past 3 years

    55

    %

    Group target

  • © ASSA ABLOY. All rights reserved

    Shared Technologies & Competence Centers Global platforms & focused product units

    56

    Accentra™

    ResidentialSDL

    Hi-O---FullVersionSound.wmvHi-O---FullVersionSound.wmv

  • © ASSA ABLOY. All rights reserved

    Growing electromechanical market

    57

    2007 2017 Sep 12 months

    34SEK bn

    76 SEK bn

    48%

    19% 24%

    27%

    18% 27%

    Mechanical locks & accessories

    Electro-mechanical

    Security doors

    Security doors

    Mechanical locks & accessories

    Electro-mechanical

    Entranceautoma-tion

    9%28%

    Entranceautomation

    SEK billion 20072017 Sep

    12 m Change

    Electro-mechanical 8.1 20.2 +149%

    Mechanical 16.1 20.8 +29%

  • © ASSA ABLOY. All rights reserved

    14%

    19%

    67%

    Electromechanics drives growthSales excl. Entrance Systems and doors

    58

    *) Sales for 2017 is Rolling 12 Months Oct-Sep

    25%

    25%

    50%

    SEK 24 Billion2007

    SEK 41 BillionSept. 2017*

    Mechanical locks & accessories

    Mechanical locks & accessories

    Electro-mechanical

    Electro-mechanical

    Global Technologies

    Global Technologies

    Electro-mechanical

    share of sales by division, excl. doors 2017*

    EMEA 37%Americas 26%

    APAC 28%

  • © ASSA ABLOY. All rights reserved

    Average annual organic growth2014 – 2017 YTD*)

    0

    2

    4

    6

    8

    10

    12

    59

    *) Organic growth estimated for Mechanical, El.mech, excl. GT and Security doors.

  • © ASSA ABLOY. All rights reserved

    Accentra – for multi-family housing, vacation rentals, assisted living, etc.

    Connected home

    60

    Yale Smart Living

    Digital door viewerDoor bells, alarms

    Homedeliveries

  • © ASSA ABLOY. All rights reserved

    Sales development – Smart door locks

    Strong sales growth

    Acquisition of August adds

    market presence in the US

    Local standards are critical

    61

    +103%

    0

    500

    1 000

    1 500

    2 000

    2 500

    2012 2017 E

    Chart TitleSmart door locks, ‘000 units

    +270%

  • © ASSA ABLOY. All rights reserved

    €0.3mproject value

    1,700units

    Future Park Istanbul, Turkey

    Solution: Smart home integration of Yale MonoblockSmart Door Lock

    62

  • © ASSA ABLOY. All rights reserved

    Non-residential moving fast into digitalization, connectivity and cloudRecurring revenue >50%

    Seos Aperio

    CLIQ

    63

    Virtual ID

  • © ASSA ABLOY. All rights reserved

    Sustainability is a commercial opportunityGlobal expansion of ‘Eco products’

    64

    Regenerative

    door operator

    Energy harvesting cylinder

    Energy efficient

    door system

    EcoFlexTM

    EcoStrikeTM

  • © ASSA ABLOY. All rights reserved

    Bloomberg European HQLondon, UK

    Solution: Fire-rated steel doors, door controls, locks and cylinders

    €1.5mproject value

    65

  • © ASSA ABLOY. All rights reserved

    3

    Cost efficiency

    66

  • © ASSA ABLOY. All rights reserved

    Efforts to radically reduce break-even costs

    67

    Manufacturing

    footprint program

    Professional sourcing

    Lean operations

    Value Analysis and Value

    Engineering (VA/VE)

    Robotization

    Seamless Flow

  • © ASSA ABLOY. All rights reserved

    Manufacturing footprint

    Status of programs launched 2006-2016

    • 77 factories closed to date, 11 to go

    • 116 factories converted to assembly, 33 to go

    Total personnel reduction

    • 12,841 FTE in total since 2006

    • 364 FTE in recent quarter

    • 1,626 FTE to go for all programs

    SEK 1,212 M provisions remain for all programs

    68

  • © ASSA ABLOY. All rights reserved

    7%

    0%

    -12%

    3%4%

    2% 2%3%

    4%

    2%

    4%

    -5%

    -10%

    -12%

    1%

    -2%

    -4%-5%

    -2%-2%

    -3%

    -1%

    -15%

    -10%

    -5%

    0%

    5%

    10%

    2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017YTD

    Growth Employees

    Organic growth each year, i.e. excluding acquisitions younger than 12 months, and the corresponding change in total number of employees for the same units.

    Efficiency: Organic Growth vs. Headcount

    69

    63% difference between organic growth and headcount since 2007

  • © ASSA ABLOY. All rights reserved

    ASSA ABLOY GroupAverage employees high-cost vs. low-cost countries

    38%

    62%

    2008

    Not restated for acquisitions

    46%54%

    2017

    High cost countries

    High cost countries

    Low cost countries

    Low cost countries

    70

  • © ASSA ABLOY. All rights reserved

    Professional sourcingSourcing is strategic & impact is rapidly increasing

    Professional sourcing

    Integration with R&D process

    Standardization

    Supplier provides sub systems

    Less and stronger suppliers

    Category management

    Supplier agreements

    Should cost process

    Audited suppliers

    0

    5 000

    10 000

    15 000

    20 000

    25 000

    30 000

    2005 2017 Sep 12m

    Material value

    71

    +283%

    0

    2 000

    4 000

    6 000

    8 000

    10 000

    12 000

    2005 2017 Sep 12m

    Indirect spend value

    2005 2016

    +101%

  • © ASSA ABLOY. All rights reserved

    Lean implementationAPAC example

    72

  • © ASSA ABLOY. All rights reserved

    Value Analysis and Value EngineeringSavings from VA/VE

    0

    5

    10

    15

    20

    25

    30

    35

    2008 2009 2010 2011 2012 2013 2014 2015 2016 Target2017

    73

    MEUR

    160 MEUR in 9

    years

  • © ASSA ABLOY. All rights reserved

    Target = 100% automation of processes

    CAD

    General Support Processes

    PDM

    ProductConfigurator

    Order

    ManufacturingPurchasing

    Logistics, warehouse Shipping

    Customer

    Suppliers

    &

    Part

    ners

    Product development

    Seamless Flow

    74

    22%

    43%

    0%

    20%

    40%

    60%

    2011 2017

    E-commerce

    7%

    28%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    2011 2017

    PDM

    0%

    78%

    0%

    20%

    40%

    60%

    80%

    100%

    2011 2017

    Seamless Production

    16%

    63%

    0%

    20%

    40%

    60%

    80%

    2011 2017

    E-procurement

    0%

    46%

    0%

    10%

    20%

    30%

    40%

    50%

    2011 2017

    ERP

  • © ASSA ABLOY. All rights reserved

    Agenda

    1. Introduction - ASSA ABLOY 2017

    2. Finance – Overview

    3. Strategy - Our Road to the Future

    4. Leading the Future

    75

  • © ASSA ABLOY. All rights reserved

    Uniqueness through differentiation gives long term lasting value creation

    76

    A differentiated value propositionBest gets copied

    Front end, catch maximum value

    – security is not transparent

    Uniqueness through constant innovation

    and differentiation

    Selective value chain – Focus on core

    competencies

    76

  • © ASSA ABLOY. All rights reserved

    Achieve 10% annual growth with profitability between 16-17%

    Leading the futureUniqueness through differentiation

    Market presence

    • Brand, segmentation, specification

    • Emerging markets

    • Acquisitions

    Product leadership through innovation

    • Electro mechanics, connected homes and smart door locks

    • IOT, Authentication, virtualization and connectivity

    • Recurring revenue, service, software, cloud, IDs

    • Sustainable products

    Cost efficiency

    • Manufacturing footprint program

    • Professional sourcing, lean operations, VA/VE

    • Seamless Flow - automation

    77

  • © ASSA ABLOY. All rights reserved

    We are a true world leader

    78

    Operating in a growing market driven by improved wealth, urbanization and a strong trend towards

    increased safety and security

  • © ASSA ABLOY. All rights reserved

    www.assaabloy.com