Assa Abloy: Quarterly Report Q1 2021

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28 Apr, 2021, 06:51 GMT

Back to good organic growth

STOCKHOLM, April 28, 2021 /PRNewswire/ --

First quarter

Net sales decreased by 2% to SEK 21,805 M (22,173), with good organic growth of 4% (–3) and acquired net growth of 4% (3). Currency effects amounted to –10% (3)
Very strong organic sales growth was reported by Asia Pacific, Entrance Systems and EMEIA^[1]. Organic sales development was stable in Americas, while Global Technologies reported a sales decline
Three acquisitions with combined annual sales of about SEK 200 M were signed
Operating income (EBIT) increased by 16% and amounted to SEK 3,187 M (2,751), corresponding to an operating margin of 14.6% (12.4)
Net income amounted to SEK 2,253 M (1,864)
Earnings per share amounted to SEK 2.03 (1.68)
Operating cash flow increased by 118% to SEK 2,636 M (1,206).

Sales and income

	Full year			First quarter

	2019	2020	Δ	2020	2021	Δ
Sales, SEK M	94,029	87,649	–7%	22,173	21,805	–2%
Of which:
Organic growth	2,652	–7,150	–8%	–759	827	4%
Acquisitions and divestments	3,063	3,328	4%	648	866	4%
Exchange-rate effects	4,265	–2,558	–3%	780	–2,060	–10%
Operating income (EBIT)¹ ², SEK M	14,920	11,916	–20%	2,751	3,187	16%
EBITA margin^{2 3}, %	16.4%	14.3%		13.0%	15.3%
Operating margin (EBIT)^{2 3}, %	15.9%	13.6%		12.4%	14.6%
Income before tax² ³, SEK M	13,883	11,133	–20%	2,519	3,045	21%
Net income^{2 3}, SEK M	10,243	8,375	–18%	1,864	2,253	21%
Operating cash flow, SEK M	14,442	14,560	1%	1,206	2,636	118%
Earnings per share² ³, SEK	9.22	7.54	–18%	1.68	2.03	21%

¹ EMEIA is an abbreviation for the division Europe, Middle East, India and Africa. The change of name of the division is due to the transfer of the India region from Asia Pacific to EMEIA, at the start of 2021. No external restatement of the divisional financial statements was made.

² Excluding costs before income tax for restructuring programs in Q4 2020 and Q4 2019, totalling SEK –1,366 M and SEK –312 M respectively. The corresponding costs after tax are SEK –1,112 M and SEK –246 M

³ Excluding non-cash operating income in Q3 2020 from revaluation at fair value of 39% ownership in agta record, totaling SEK 1,909 M for the year. The operating income had no tax impact.

Comments by the President and CEO

Back to good organic growth

The world continued to be affected by Covid-19 restrictions in the first quarter, and in that context, I am very pleased that we can report good organic growth in the quarter. Asia Pacific division has been recovering from the trough of last year, resulting in a very strong organic sales growth of 23%. Entrance Systems has accelerated and reported a very strong organic sales growth of 11%. Organic sales growth in EMEIA was strong at 5% and Americas was stable despite a strong comparable, but sales in Global Technologies were down significantly.

Operating income increased by 16% to SEK 3,187 M and the operating margin was 14.6%. Despite restrictions that affected our operations in many of our core markets, we generated a very strong operating leverage of 80%. Operating cash flow improved significantly and totaled SEK 2,636 M, up 118%.

Well positioned for profitable growth

With the world now expected to gradually reopen, we will start to shift our focus more to growth again with innovation as an enabler. Our investments in R&D have resulted in the recent launch of several new products and solutions, including a new door-operator range with smart mobile functions from Entrance Systems, and Incedo, a cloud based access control platform for commercial applications.

In parallel, our cost-saving measures are continuing with temporary savings now being replaced by permanent savings. Our ongoing restructuring programs and other efficiency measures have supported our very strong operating leverage. As volumes start to increase, we will gradually ramp up capacity and make the investments needed to support the growth.

Entrance Systems, our biggest division, has developed very well and the division's new organization is making progress, with all segments reporting strong sales growth. The investments in growth and product development in the EMEIA division have generated strong growth despite the continued negative effect of Covid-19 restrictions. In the Americas division we have seen a continued strong growth in South America. In the US we are starting to see positive signs from eased restrictions and, next to a strong residential demand, we expect our aftermarket in the non-residential segment to gradually normalize from current low levels. The market conditions for parts of Global Technologies division continue to be very challenging and we do not expect the travel-exposed segments to return to pre-pandemic volumes in the near future.

I am confident that we are now moving out of this pandemic as an even stronger Group, well positioned as a global industry leader to bounce forward and re-accelerate profitable growth.

Stockholm, 28 April 2021

Nico Delvaux
President and CEO

Further information can be obtained from:
Nico Delvaux,
President and CEO, tel. no: +46 8 506 485 82

Erik Pieder,
Executive Vice President and CFO, tel.no: +46 8 506 485 72

ASSA ABLOY is holding a telephone and web conference at 09.30 on 28 April 2021
which can be followed on the Internet at www.assaabloy.com.

It is possible to submit questions by telephone on:
+46 8 566 427 04, +44 333 300 9272 or +1 646 722 4956

This information is information that ASSA ABLOY AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CEST on 28 April 2021