Strong Growth and Earnings for ASSA ABLOY

ASSA ABLOY enjoyed strong growth during the second quarter of 2012, with sales increasing by 14% to SEK 11,997 million ($1.745 billion) from last year, including 3% organic growth. Net income amounted to SEK 1,295 million. The company reported improved growth in North America and continued strong growth in Global Technologies. Meanwhile, there was stable but weak development in Europe, while the emerging markets showed improved performance.

Acquisitions done of Helton, Guoqiang and Sanhe, whose combined annual sales of SEK 1,140 million represent 2.7% growth. At the same time a sales process was initiated to sell the jointly owned company Wangli, with annual sales of SEK 600 million.

Operating income (EBIT) increased by 17% and amounted to SEK 1,885 million. The operating margin was 15.7%. Earnings per share rose by 15% to SEK 3.51.

“I am very pleased that ASSA ABLOY’s good performance continued during the second quarter of the year, with growth of a full 14% and a strong improvement in earnings,” said Johan Molin, president and CEO. “It was particularly pleasing that sales in Americas improved and that the good growth at Global Technologies continued. Our investments in Emerging Markets are also giving results, in the form of good organic growth of a full 9% in the region. However in Europe the situation weakened further, with sales at an unchanged level.

“R&D activity remained very high and many new products were launched during the period,” Molin said. “Sales of new products are going exceptionally well and accounted for a full 22% of the quarter’s total sales. Examples of exciting new products include a new high-technology printer for the e-government sector, security doors for the social housing sector in China, and a completely new series of advanced automatic door openers from Besam.

“Earnings improved by a good 17%, with the newly acquired companies making especially strong advances during the quarter. The successful efficiency and restructuring measures also continued to make good contributions to the profit margin,” Molin noted.

“Activities on the acquisition front continued at full speed and resulted in the acquisitions of Helton, Gouqiang and Sanhe – three acquisitions that add 2.7% to our sales,” Molin added. “Helton is particularly interesting since it is a first step for Entrance Systems into the North American market for sectional doors. Our expansion on the strategically important Chinese market continued through the acquisitions of Gouqiang and Sanhe. They complement in a very good way our geographical presence in China.

“The world economy is forecast to remain weak for the rest of the year,” he concluded. “On the mature markets, stable economic development with unchanged weak growth is expected, while economic growth on the new markets is expected to be less strong than last year.”

Sales for the first half of 2012 totaled SEK 22,835 million ($3.32 billion), representing an increase of 19%. Organic growth was 3%. Acquired units contributed 12%. Operating income before depreciation, EBITDA, for the half-year amounted to SEK 4,085 million. The corresponding margin was 17.9% (18.2). The Group’s operating income, EBIT, amounted to SEK 3,540 million, which was an increase of 18%. The corresponding EBIT operating margin was 15.5% (15.6).

Earnings per share for the first half-year increased to SEK 6.61, a rise of 19%. Operating cash flow for the half-year totaled SEK 1,918 million.