Strong growth in mature markets

Second quarter

  · Net sales increased by 5% to SEK 17,894 M (17,082), of which 4% (4) was
organic growth and 4% (3) was acquired growth
  · Strong growth in Americas, EMEA and Global Technologies and good growth in
Entrance Systems
  · Negative growth in Asia Pacific owing to weak demand in China
  · Contracts have been signed for the acquisition of six companies with
combined expected annual sales of about SEK 950 M
  · Operating income (EBIT) increased by 6% to SEK 2,910 M (2,742). The
operating margin was 16.3% (16.1)
  · Net income amounted to SEK 2,026 M (1,888)
  · Earnings per share rose by 7% and amounted to SEK 1.82 (1.70)
  · The quarter’s operating cash flow increased by 27% to SEK 2,519 M (1,991).

Sales and income

                                Second quarter           First half-year

                                  2015    2016      Δ      2015     2016    Δ
Sales, SEK M                    17,082  17,894     5%    32,334   33,785   4%
Of which:
Organic growth                     656     650     4%     1,336    1,099   4%
Acquisitions                       453     593     4%       829    1,083   3%
Exchange-rate effects            2,008    -431    -3%     3,900     -730  -3%
Operating income (EBIT), SEK M   2,742   2,910     6%     5,071    5,321   5%
Operating margin (EBIT), %       16.1%   16.3%            15.7%    15.7%
Income before tax, SEK M         2,551   2,729     7%     4,735    4,938   4%
Net income, SEK M                1,888   2,026     7%     3,504    3,664   5%
Operating cash flow, SEK M       1,991   2,519    27%     2,511    3,017  20%
Earnings per share (EPS), SEK     1.70    1.82     7%      3.15     3.30   5%

Comments by the President and CEO
“The second quarter of the year showed strong demand for ASSA ABLOY,” says Johan
Molin, President and CEO. “The mature markets in general produced strong growth,
something we have not seen since the financial crisis, at the same time as the
emerging markets continued their slowdown. Sales increased by 5% during the
quarter, of which 4% was organic growth. Operating income outstripped sales
growth and increased by 6%.

“Organic growth during the quarter was affected by a positive calendar effect of
approximately one day. In Americas, EMEA and Global Technologies an encouraging
sales growth continued, while Entrance Systems showed a rather weaker growth.
The downturn in Asia Pacific continued because of a weak demand situation,
especially in China. The emerging markets also remained weak, but with some
bright points in eastern Europe and in Latin America apart from Brazil.

“ASSA ABLOY has once again been named as one of the world’s one hundred most
innovative companies by Forbes magazine. It is pleasing to see that our
innovative new products are growing strongly. During the quarter a so-called
multi-family solution was launched, whereby ASSA ABLOY for the first time offers
a total solution for multi-family buildings where all lock units are both
electronic and connected. The electronic content is growing steadily on the
market, and there is great potential for the future.

“A further six companies were acquired during the quarter. Consolidation of the
market for entrance automation continued with the acquisition of Nassau, which
is a regional leader primarily in Denmark. Another interesting acquisition was
the company Mauer, the market leader in locks in Bulgaria. ASSA ABLOY has been
building a market leadership in eastern Europe for a number of years, which
Mauer complements very well.

“Operating income for the quarter increased by 6%. At the same time the
operating margin rose to 16.3% in spite of negative effects from both
acquisition dilution and exchange-rate effects. The improvement in the margin
was mainly due to good organic growth of 4% and lower raw-material costs.

“My judgment is that the global economic trend remains weak, but with a positive
trend in America and parts of Europe. Elsewhere, 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.

This information 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 CET on 19 July 2016.