A good start to the year for ASSA ABLOY

First quarter

  · Net sales amounted to SEK 15,891 M (15,252), an increase of 4%, of which 3%
(5) was organic growth and 3% (3) was acquired growth.
  · Strong growth in Americas and good growth in EMEA and Entrance Systems.
  · Growth in Global Technologies and continued negative growth in Asia Pacific
because of China.
  · Contracts have been signed for the acquisition of three companies with
combined expected annual sales of about SEK 750 M. A contract has also been
signed for the divestment of the Group’s Car Locks business, which has annual
sales of about SEK 550 M.
  · Operating income (EBIT) amounted to SEK 2,411 M (2,329). The operating
margin was 15.2% (15.3).
  · Net income amounted to SEK 1,638 M (1,616).
  · Earnings per share increased by 1% and amounted to SEK 1.47 (1.45).
  · Cash flow was normal for the season and amounted to SEK 498 M (520).

Sales and income
[image]

1) Earnings per share has been recalculated for all historical periods as a
result of the 3:1 stock split carried out in 2015.


Comments by the President and CEO

“The first quarter of the year showed stable demand for ASSA ABLOY, with
increased sales of 4% during the quarter,” says Johan Molin, President and CEO.
“The operating income increased in line with sales and also improved by 4%.

“Organic growth was good, with a 3% increase for the quarter despite the
negative effect of Easter falling in the first quarter this year. The strong
sales trend on the US market continued, while Europe and Entrance Systems showed
good growth. Sales by Global Technologies were weakly positive, but the downward
trend in Asia Pacific continued because of the market situation in China. The
emerging markets also remained weak, but with a few bright spots that included
eastern Europe and Latin America.

“ASSA ABLOY has once again won recognition for its strength in innovation by
winning no fewer than six first prizes for Best Product Innovations at one of
the industry’s most important exhibitions, ISC West in the USA. There is a clear
market trend towards an ever more digitized world in which locks are to an
increasing extent connected online. This change is occurring both on the
commercial and residential markets. For ASSA ABLOY it is a very beneficial trend
since we have consistently built up a technological leadership.

“During the quarter Lighthouse and ADAEZ were acquired. The acquisition of
Lighthouse was especially exciting as a first step in the strategic development
of direct sales and service of industrial doors in the American market.
Lighthouse is the basis for a new business unit in Entrance Systems which is
expected to grow significantly. During the quarter, ADAEZ was also acquired and
will be an excellent complement for our range of energy-efficient products
directed towards the rapidly rising demand for ‘net zero buildings’.

Operating income for the quarter increased by 4%. The underlying marginal growth
remained good as a result of organic growth of 3% together with lower raw
-material costs, savings made and price compensation for exchange-rate effects.
The operating margin remained at virtually the same level as in the first
quarter of 2015 despite negative effects from both exchange-rate effects and
dilution due to acquisitions.

“My judgment is that the global economic trend remains weak, with a positive
trend in America but low growth in Europe. In addition many of the emerging
markets are stagnating. However, our strategy of expanding on the emerging
markets remains unchanged, since in the long term they are expected to achieve
very good economic growth. 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.


ASSA ABLOY discloses the information provided herein pursuant to the Securities
Markets Act and/or the Swedish Financial Instruments Trading Act. The
information was submitted for publication at 08.00 CET on 27 April.