ASSA ABLOY : Back to growth with increased earnings for ASSA ABLOY

      ASSA ABLOY : Back to growth with increased earnings for ASSA ABLOY

  *Sales increased by 2%, with organic growth of 3%, and totaled SEK12,239M
    (11,997).
  *Strong growth in Americas and Global Technologies and good growth in Asia
    Pacific.
  *Weak but stable development in EMEA and Entrance Systems.
  *Operating income (EBIT) increased by 5% and amounted to SEK 1,970 M
    (1,885).
    The operating margin was 16.1% (15.7).
  *Net income amounted to SEK 1,374 M (1,306).
  *Earnings per share rose by 5% to SEK 3.71 (3.54).
  *Cash flow remained good and totaled SEK 1,589 M (1,435).

SALES AND INCOME

                                  Second quarter       First half-year
                                2012   2013  Change   2012   2013 Change
Sales, SEK M                   11,997 12,239      +2% 22,835 23,108    +1%
 of which,                                                         
 Organic growth                                +3%                +1%
 Acquisitions                                  +4%                +4%
 Exchange-rate effects                -509      -5%         -888    -4%
Operating income (EBIT), SEK M  1,885  1,970      +5%  3,540  3,632    +3%
Operating margin (EBIT), %       15.7   16.1           15.5   15.7      
Income before tax, SEK M        1,692  1,832      +8%  3,182  3,365    +6%
Net income, SEK M               1,306  1,374      +5%  2,452  2,512    +2%
Operating cash flow, SEK M      1,435  1,589     +11%  1,918  2,087    +9%
Earnings per share EPS), SEK     3.54   3.71      +5%   6.65   6.78    +2%

COMMENTS BY THE PRESIDENT AND CEO
"I am pleased that the organic growth has returned this quarter," says Johan
Molin, President and CEO. "It is particularly pleasing that North and South
America and Asia showed good growth, while Europe stabilized at around zero.
Total growth for the Group was 7% in local currencies, made up of 3% organic
growth and 4% acquired growth. However, exchange-rate effects were strongly
negative, at -5%, which meant that overall growth was kept to 2%.

"Both earnings and margins continued to improve as a result of a increased
share of new products and major savings and efficiency measures in production.
Especially satisfying are the strong earnings from EMEA and Entrance Systems
despite their lack of growth, at the same time as Americas and Global
Technologies showed strongly rising margins.

"Activity on the acquisition front remained very high, with several
interesting acquisitions under discussion. However, only two minor
acquisitions, which complement Entrance Systems' local presence, came to
completion during the quarter.

"My assessment is that the outlook is unchanged, with a continuing weak world
economy affected by the budget cutbacks that many countries are making. It is
therefore of the utmost importance that ASSA ABLOY should continue its
expansion on the new markets, which are expected to go on growing well, and
that our investments in new products and market presence are sustained."

SECOND QUARTER
The Group's sales totaled SEK 12,239 M (11,997), an increase of 2% compared
with the second quarter of 2012. Organic growth for comparable units was 3%
(3). Acquired units contributed 4% (6). Exchange-rate effects had an impact of
SEK -509 M on sales, that is -5% (5).

Operating income before depreciation, EBITDA, amounted to SEK 2,226 M (2,157).
The corresponding EBITDA margin was 18.2% (18.0). The Group's operating
income, EBIT, amounted to SEK1,970 M (1,885), a rise of 5%. The operating
margin was 16.1% (15.7).

Net financial items amounted to SEK -138 M (-192). The Group's income before
tax amounted to SEK1,832 M (1,692), an improvement of 8% compared with the
previous year. Exchange-rate effects had an impact of SEK-94M on the Group's
income before tax. The profit margin was 15.0% (14.1). The underlying
effective tax rate on an annual basis was estimated to be 25%. Earnings per
share amounted to SEK 3.71 (3.54), an increase of 5%.

FIRST HALF-YEAR
Sales for the first half of 2013 totaled SEK 23,108 M (22,835), representing
an increase of 1%. Organic growth was 1% (3). Acquired units contributed 4%
(12). Exchange-rate effects had an impact of SEK -888 M on sales, that is -4%
(4), compared with the first half of 2012.

Operating income before depreciation, EBITDA, for the half-year amounted to
SEK 4,138 M (4,086). The corresponding margin was 17.9% (17.9). The Group's
operating income, EBIT, amounted to SEK3,632 M (3,540), which was an increase
of 3%. The corresponding EBIT operating margin was 15.7% (15.5).

Earnings per share for the first half-year increased to SEK 6.78 (6.65), a
rise of 2%. Operating cash flow for the half-year totaled SEK 2,087 M (1,918).

RESTRUCTURING MEASURES
Payments related to all restructuring programs amounted to SEK 109 M in the
quarter. The restructuring programs proceeded according to plan and led to a
reduction in personnel of 91 people during the quarter and 6,957 people since
the projects began.

At the end of the quarter provisions of SEK 793 M remained in the balance
sheet for carrying out the programs.

FINANCING
The Group's credit facility (RCF) was renewed during the second quarter. The
value of the facility has been reduced from EUR 1,100 M to EUR 900 M. The
duration has been set at five years with the option of extension. The number
of banks taking part now totals 14. The credit is primarily a strategic loan
reserve and at present is completely unutilized.

COMMENTS BY DIVISION

EMEA
Sales for the quarter in EMEA division totaled SEK3,285M (3,379), with
organic growth of 0% (0). The market situation remained weak but stable during
the quarter. Growth was good in Africa, the Middle East, eastern Europe, the
United Kingdom and Scandinavia. Sales in Germany were stable but growth was
negative in Finland, France, the Netherlands and southern Europe. Acquired
growth amounted to 1%. Operating income totaled SEK511M (533), which
represented an operating margin (EBIT) of 15.6% (15.8). Return on capital
employed amounted to 18.9% (20.6). Operating cash flow before interest paid
totaled SEK 422 M (430).

AMERICAS
Sales for the quarter in Americas division totaled SEK 2,620 M (2,548), with
organic growth of 8% (5). The sales trends for high-security products,
security doors and the residential market were strong, and very strong for
electromechanical products. Canada and Mexico showed a weak negative trend
while South America was stable. Acquired growth amounted to 1%. Operating
income totaled SEK571M (540) and the operating margin was 21.8% (21.2).
Return on capital employed amounted to 25.5% (24.1). Operating cash flow
before interest paid totaled SEK507 M (500).

ASIA PACIFIC
Sales for the quarter in Asia Pacific division totaled SEK 1,904M (1,892),
with organic growth of 3% (5). Growth was strong in Korea, driven by export
successes for digital door-locks. China showed continuing weak growth as a
result of rather lower activity in new building, while the sales trend in
Australia was stable. Acquired growth amounted to 2%. Operating income totaled
SEK269M (271), representing an operating margin (EBIT) of 14.1% (14.3). The
quarter's return on capital employed amounted to 20.4% (20.8). Operating cash
flow before interest paid totaled SEK349 M (373).

GLOBAL TECHNOLOGIES
Sales for the quarter in Global Technologies division totaled SEK 1,711 M
(1,701), with organic growth of 6% (11). HID continued to show strong growth
in Access Control, Secure Issuance of smart cards and project sales.
New-product launches and innovations contributed to this positive trend.
However, Government ID and Identification Technology had negative growth.
Hospitality showed strong growth with good profitability. Acquired growth
amounted to 0%. The division's operating income amounted to SEK304 M (289),
with an operating margin (EBIT) of 17.8% (17.0). Return on capital employed
amounted to 19.8% (17.5). Operating cash flow before interest paid totaled
SEK276 M (273).

ENTRANCE SYSTEMS
Sales for the quarter in Entrance Systems division totaled SEK 2,960 M
(2,725), with organic growth of -1% (-1). Europe continued to be weak while
Americas and Asia showed continued growth. Industrial doors and high-speed
doors showed continued good growth. Door automatics reported unchanged sales.
Acquired growth amounted to 14%. Operating income totaled SEK400 M (354),
giving an operating margin of 13.5% (13.0). Return on capital employed
amounted to 11.6% (10.8). Operating cash flow before interest paid totaled
SEK293 M (293).

ACQUISITIONS AND DIVESTMENTS
During the first quarter three minor acquisitions were consolidated. The
combined acquisition price for the five acquisitions completed in the
half-year period amounted to SEK 191 M, and preliminary acquisition analyses
indicate that goodwill and other intangible assets with indefinite useful life
amount to SEK158 M. The acquisition price is adjusted for acquired net debt
and estimated earn-outs. Estimated earn-outs amount to SEK79 M. In May 2013
the joint-venture contract for Baodean in China was brought to an end when
ASSA ABLOY acquired the outstanding 30% of shares.

SUSTAINABLE DEVELOPMENT
ASSA ABLOY published its Sustainability Report for 2012 in April 2013, and the
Report indicates that the majority of key indicators are continuing to move in
a positive direction.

One high-priority area is the evaluation of the Group's suppliers in low-cost
countries.
795 supplier audits were conducted in 2012, compared with 493 audits in the
previous year. Originally the supplier audits mainly concerned suppliers in
China, but the program has been progressively expanded and now covers all
low-cost countries. To be able to evaluate the supplier bases in South and
Central America effectively, more than 20 ASSA ABLOY employed auditors had
been trained in Mexico and Colombia by the end of the second quarter of 2013.
Already suppliers representing 15 percent of procurement value in South and
Central America have been evaluated in accordance with the Group's
standardized process.

PARENT COMPANY
Other operating income for the Parent company ASSA ABLOY AB totaled SEK988 M
(898) for the half-year. Income before tax amounted to SEK 1,201 M (966).
Investments in tangible and intangible assets totaled SEK 80 M (9). Liquidity
is good and the equity ratio was 47.1% (48.2).

ACCOUNTING PRINCIPLES
ASSA ABLOY applies International Financial Reporting Standards (IFRS) as
endorsed by the European Union. Significant accounting and valuation
principles are detailed on pages 90-95 of the 2012 Annual Report.
This Interim Report was prepared in accordance with IAS 34 'Interim Financial
Reporting' and the Annual Accounts Act. The Interim Report for the Parent
company was prepared in accordance with the Annual Accounts Act and RFR 2
'Reporting by a Legal Entity'.

EFFECTS OF CHANGED ACCOUNTING PRINCIPLES
In 2013 financial reporting is affected by changes relating to the reporting
of defined-benefit pension plans. The changed accounting principles remove the
option of using the so-called corridor method: that is, the option of
reporting only a proportion of actuarial gains and losses as income or
expense. The significant changed valuations are instead reported as they arise
in 'Other comprehensive income'. The changes also mean that the return on plan
assets is no longer reported as expected return but is reported as an interest
income item in the income statement, based on the value of the discount rate
at the start of the financial year. The accounting principles for
defined-benefit pension plans are therefore changed from the Group's
accounting principles in the 2012 Annual Report and the Interim Reports
published earlier in 2012.

The new principles affect reporting retroactively, and the opening balance at
1 January 2012 has been recalculated, as have the comparatives for 2012, as
follows:

On the balance-sheet date of 1 January 2012, pension obligations and net debt
increased by SEK 1,092 M. Equity was reduced by SEK 737 M and financial assets
increased by SEK355 M. Operating income for the quarter and the full year
2012 is unchanged. Financial items for the quarter and the full year 2012
improved by SEK 16 M and SEK 53 M respectively. The tax expense for the
quarter and the full year 2012 increased by SEK 6 M and SEK 6 M respectively.
Net profit for the quarter and the full year 2012 increased by SEK 10 M and
SEK 47 M respectively. Earnings per share after dilution for the quarter and
the full year 2012 increased by SEK 0.03 per share and SEK 0.13 per share
respectively.

TRANSACTIONS WITH RELATED PARTIES
No transactions that significantly affected the company's position and income
have taken place between ASSA ABLOY and related parties.

RISKS AND UNCERTAINTY FACTORS
As an international Group with a wide geographic spread, ASSA ABLOY is exposed
to a number of business and financial risks. The business risks can be divided
into strategic, operational and legal risks. The financial risks are related
to such factors as exchange rates, interest rates, liquidity, the giving of
credit, raw materials and financial instruments. Risk management in ASSA ABLOY
aims to identify, control and reduce risks. This work begins with an
assessment of the probability of risks occurring and their potential effect on
the Group. For a more detailed description of risks and risk management, see
the 2012 Annual Report. No significant risks other than the risks described
there are judged to have occurred.

OUTLOOK*

Long-term outlook
Long term, ASSA ABLOY expects an increase in security-driven demand. Focus on
end-user value and innovation as well as leverage on ASSA ABLOY's strong
positionwill accelerate growth and increase profitability.

Organic sales growth is expected to continue at a good rate. The operating
margin (EBIT) and operating cash flow are expected to develop well.

* Outlook published on 24 April 2013:

Long-term outlook
Long term, ASSA ABLOY expects an increase in security-driven demand. Focus on
end-user value and innovation as well as leverage on ASSA ABLOY's strong
positionwill accelerate growth and increase profitability.

Organic sales growth is expected to continue at a good rate. The operating
margin (EBIT) and operating cash flow are expected to develop well.

The Board of Directors and the President and CEO declare that this half-year
report gives an accurate picture of the Parent company's and the Group's
operations, position and income and describes significant risks and
uncertainty factors faced by the Parent company and the companies making up
the Group.

                       Stockholm, 18 July 2013            
     Lars Renström           Carl Douglas                 
                                                    Birgitta Klasén
       Chairman              Vice Chairman           Board member
                                                        
     Eva Lindqvist            Johan Molin        Sven-Christer Nilsson
     Board member          President and CEO         Board member
                                                        
     Jan Svensson           Ulrik Svensson          Kurt Hellström
     Board member            Board member       Employee representative
                                                        
     Mats Persson                                         
Employee representative                                   

REVIEW REPORT

Introduction
We have reviewed this Report for the period 1 January to 30 June 2013 for ASSA
ABLOY AB (publ). The Board of Directors and the CEO are responsible for the
preparation and presentation of this Interim Report in accordance with IAS 34
and the Swedish Annual Accounts Act. Our responsibility is to express a
conclusion on this Interim Report based on our review.

Scope of Review
We have conducted our review in accordance with the Swedish Standard on Review
Engagements SÖG 2410, 'Review of Interim Report Performed by the Independent
Auditor of the Entity'. A review consists of making inquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in
scope than an audit conducted in accordance with International Standards on
Auditing, ISA, and other generally accepted auditing standards in Sweden. The
procedures performed in a review do not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.

Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the Interim Report is not prepared, in all material respects, in
accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the
Group, and with the Swedish Annual Accounts Act, regarding the Parent company.

Stockholm, 18 July 2013
PricewaterhouseCoopers AB

Bo Karlsson
Authorized Public Accountant
Auditor in charge

FINANCIAL INFORMATION
The Interim Report for the third quarter will be published on 28 October 2013.

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 11.00 today
                       at Operaterrassen in Stockholm.

        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 +1877679 2993.

This information is that which ASSA ABLOY is required to disclose under the
Swedish Securities Exchange and Clearing Operations Act and/or theSwedish
Financial Instruments Trading Act.
The information is released for publication at 08.00 on 19 July.

Q2 2013

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Source: ASSA ABLOY via Thomson Reuters ONE
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