ASSA ABLOY

Quarterly Report • Apr 26, 2018

Quarterly Report Q1 2018

26 April 2018

The global leader in door opening solutions

A good start to the year

First quarter

• Net sales increased by 2% to SEK 18,550 M (18,142), with organic growth of 4% (6) and acquired net growth of 2% (3)
• Strong growth was shown by Global Technologies and Entrance Systems and good growth by Asia Pacific, EMEA and Americas
• Operating income (EBIT) increased by 2% and amounted to SEK 2,829 M (2,787), corresponding to an operating margin of 15.3% (15.4)
• Net income amounted to SEK 1,964 M (1,918)
• Earnings per share amounted to SEK 1.77 (1.73)
• Operating cash flow amounted to SEK 575 M (824).

Organic growth

Operating income

Earnings per share

+2%

Sales and income

	Full year			First quarter
	2016	2017	Δ	2017	2018	Δ
Sales, SEK M	71,293	76,137	7%	18,142	18,550	2%
Of which:
Organic growth	1,428	2,834	4%	1,022	705	4%
Acquisitions and divestments	1,967	1,753	2%	448	268	2%
Exchange-rate effects	–201	257	1%	780	–565	-4%
Operating income1) (EBIT), SEK M	11,254	12,341	10%	2,787	2,829	2%
Operating margin1) (EBITA), %	16.1%	16.5%		15.6%	15.7%
Operating margin1) (EBIT), %	15.8%	16.2%		15.4%	15.3%
Income before tax1), SEK M	10,549	11,673	11%	2,593	2,654	2%
Net income1), SEK M	7,874	8,635	10%	1,918	1,964	2%
Operating cash flow, SEK M	10,467	10,929	4%	824	575	-30%
Earnings per share1), SEK	7.09	7.77	10%	1.73	1.77	2%

1) Excluding costs for a new restructuring program for the full year 2016, totaling SEK -1,597 M before tax, corresponding to SEK –1,221 M after tax.

Comments by the President and CEO

A good start to the year

The year took off with good organic growth of 4% in the first quarter, despite the negative calendar effect of two trading days less due to an early Easter. We achieved strong or good growth in all divisions. Global Technologies and Entrance Systems reported strong organic growth of 6% and 5% respectively. EMEA and Americas reported 3% organic growth and Asia Pacific reported 4%. Our new products contributed strongly, with high demand for electromechanical locks and for access control solutions.

The first quarter's operating income increased by 2% year-on-year and amounted to SEK 2,829 M, corresponding to an operating margin of 15.3%. The Group's underlying margin improved but was diluted by the acquisitions.

Operating cash flow was seasonally low totaling SEK 575 M for the quarter. We are continuing to focus on cost-efficiency and to deliver on our current restructuring program and, as previously communicated, we expect to announce a new program by the end of 2018.

First impressions

I spent my first months at ASSA ABLOY on the move, visiting the different Group locations to meet our people, our partners and our customers as well as to get acquainted with the sites, the corporate culture and the business. So far, I have visited 18 of our main locations and I am impressed by the competence, the innovation capacity and the technology driven culture. There have been several changes in ASSA ABLOYs executive team over the last 12 months. I am convinced that we have a strong team in place, equipped with energy and ambition to continue the Group's successful journey. I am both eager and humble in taking on the mission to further develop ASSA ABLOY.

Strong market position

As the new CEO, it is very encouraging to see our strong market position. Product and innovation leadership, backed by the largest installed base of door opening solutions in the world, gives us a very strong platform to grow from. I am confident that we will create new business opportunities through our new products and solutions, and that we have seen only the initial phase of the market transition and technology shift from mechanical solutions to digital, connected products and services.

Strategic direction

ASSA ABLOY's strategy, with focus on market presence, product leadership and cost efficiency, has been very successful for many years. In combination with a strong acquisition agenda, this strategy has generated significant long-term value. I look forward to further developing this successful strategy together with my colleagues.

Stockholm, 26 April 2018

Nico Delvaux President and CEO

Sales by quarter and last 12 months

Sales, quarter Sales, 12 months

First quarter

The Group's sales increased by 2% to SEK 18,550 M (18,142). Organic growth amounted to 4% (6). Acquisitions and divestments were 2% (3), of which 3% (3) were acquisitions and –1% (0) were divestments. Exchange-rates affected sales by –4% (5).

The Group's operating income, EBIT amounted to SEK 2,829 M (2,787) an increase of 2%. The operating margin was 15.3% (15.4). Operating income before amortizations from acquisitions, EBITA amounted to SEK 2,921 M (2,839). The corresponding EBITA margin was 15.7% (15.6).

Net financial items amounted to SEK –175 M (–195). The Group's income before tax was SEK 2,654 M (2,593), an increase of 2% compared with last year. Exchange-rates had an impact of SEK –80 M (126) on income before tax. The profit margin was 14.3% (14.3).

The estimated effective tax rate on an annual basis was 26% (26). Earnings per share amounted to SEK 1.77 (1.73), an increase of 2% compared to last year.

Restructuring measures

Payments related to all restructuring programs amounted to SEK 173 M (84) in the quarter. The restructuring programs proceeded according to plan and led to a reduction in personnel of 508 people during the quarter and 14,072 people since the projects began in 2006. At the end of the quarter provisions of SEK 795 M remained in the balance sheet for carrying out the programs.

The planning of a new restructuring program has begun. The launch is scheduled for the fourth quarter and the program is expected to take place over a period of three years. The cost of the restructuring is estimated to be in line with previous programs, with a payback time of around three years.

Organization

Lucas Boselli has been appointed Executive Vice President and Head of Americas Division with effect from 2 April 2018. He succeeds Thanasis Molokotos, who has decided to leave the group. Lucas Boselli has worked at ASSA ABLOY since 2010 and in recent years has held the position of Head of ASSA ABLOY Central and South America in the Americas Division. Lucas Boselli is an engineer and holds a degree from Virginia Polytechnic Institute and State University in the USA.

Comments by division

EMEA

Sales for the quarter in EMEA division totaled SEK 4,775 M (4,404), with organic growth of 3% (5). Growth was strong in the UK, France and Eastern Europe, and was good in Scandinavia and Germany. Finland, Southern Europe and Africa/ Middle East also showed growth while Benelux had negative sales development. Electromechanical products showed strong growth, and demand was especially strong for smart door locks for the private residential market. Acquired growth net was 3%. Operating income totaled SEK 764 M (718), which represents an operating margin (EBIT) of 16.0% (16.3).

Return on capital employed amounted to 20.0% (20.0). Operating cash flow before interest paid totaled SEK 262 M (387).

Americas

Sales for the quarter in Americas division totaled SEK 4,354 M (4,566), with organic growth of 3% (7). Growth was strong for Electromechanical and Highsecurity products, the Private residential market in the USA and for Canada. Good growth was shown by Perimeter Security, Mexico and South America apart from Brazil and Colombia. Traditional lock products also showed growth while Security Doors, Brazil and Colombia had negative sales development. Acquired growth was 1%. Operating income totaled SEK 845 M (961), which represents an operating margin (EBIT) of 19.4% (21.0). Return on capital employed amounted to 21.0% (24.2). Operating cash flow before interest paid totaled SEK 241 M (197).

Asia Pacific

Sales for the quarter in Asia Pacific division totaled SEK 1,959 M (1,917), with organic growth of 4% (3). Strong growth was achieved in South Korea and Japan, and sales were stable in Pacific and South Asia. Sales in China showed growth for lock products while sales of doors continued to decrease. Smart doorlocks grew strongly in the region. Acquired growth was 1%. Operating income totaled SEK 154 M (151), which represents an operating margin (EBIT) of 7.9% (7.9). Return on capital employed amounted to 4.9% (5.0). Operating cash flow before interest paid totaled SEK –158 M (–154).

Global Technologies

Sales for the quarter in Global Technologies division totaled SEK 2,477 M (2,481), with organic growth of 6% (9). Physical Access control and Identification technology had strong growth within HID Global, Secure issuance showed growth while Citizen ID and Logical access had negative sales development. Hospitality showed continued strong growth. Sales of mobile key solutions continued strongly. Acquired growth net was –1%. Operating income totaled SEK 466 M (422), which represents an operating margin (EBIT) of 18.8% (17.0). Return on capital employed amounted to 11.6% (14.6). Operating cash flow before interest paid totaled SEK 201 M (57).

Entrance Systems

Sales for the quarter in Entrance Systems division totaled SEK 5,322 M (5,087), with organic growth of 5% (7). High-speed doors, US Garage doors, Door components and Solutions for warehouses and logistics in the USA showed strong growth. Pedestrian doors had good growth and Industrial doors showed growth. EU residential doors showed negative sales growth. Acquired growth was 2%. Operating income totaled SEK 710 M (638), which represents an operating margin (EBIT) of 13.3% (12.5). Return on capital employed amounted to 14.5% (13.3). Operating cash flow before interest paid totaled SEK 379 M (660).

Acquisitions and divestments

A total of four acquisitions were consolidated during the quarter. The combined acquisition price for these companies, including adjustments from prior year acquisitions, amounted to SEK 1,156 M. The acquisition price for these companies on a cash and debt free basis amounted to SEK 1,050 M.

Preliminary acquisition analyses indicate that goodwill and other intangible assets with indefinite useful life amount to SEK 854 M. Estimated deferred considerations amounted to SEK 221 M.

Sustainable development

ASSA ABLOY's Sustainability Report for 2017 was published on 21 March 2018 and the report shows that key indicators continue to improve.

The increased focus on Health and Safety has led to a 20% decrease in the injury rate. The Group's total greenhouse-gas emissions fell by 6% during 2017, driven by new production technologies and efficiency improvements. Water consumption in relation to the activities of the business was reduced by 12% during the year. The number of entities covered by ISO 14001 or other certifiable environmental management systems increased from 124 to 131, which means that the system covers 79% of employees in the Group's factories. ASSA ABLOY had 276 Environmental Product Declarations verified and published by the end of 2017.

Parent company

Other operating income for the Parent company ASSA ABLOY AB totaled SEK 431 M (498) for the interim period. Operating income for the same period amounted to SEK –261 M (–91). Investments in tangible and intangible assets totaled SEK 12 M (5). Liquidity is good and the equity ratio is 41.5% (45.8).

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 68-73 of the 2017 Annual Report. This 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'.

The Group applies IFRS 9 Financial instruments and IFRS 15 Revenue from contracts with customers as of 1 January 2018.

IFRS 9 addresses classification, measurement and recognition of financial liabilities and assets and replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. With IFRS 9 a new impairment model is being implemented, based on expected credit losses rather than incurred losses. For the Group, the new model will entail a new procedure for measurement of credit losses, the standard will however have no material impact on the Group's performance and financial position.

IFRS 15 supersedes IAS 11 Construction contracts and IAS 18 Revenue and includes a new single model for revenue recognition related to customer contracts. The standard introduces a five-step model that requires revenue to be recognized when a performance obligation is met as control over goods and services are transferred to the customer. The goods or service is transferred as control over the asset is transferred to the customer, which is either over time or at a point in time. The Group's previous revenue recognition practices are essentially in accordance with IFRS 15 why the new standard will have no

impact on the Group's performance and financial position, however additional information on disaggregated revenue has been disclosed in note 1.

Since IFRS 9 and IFRS 15 have no material impacts on the financial reports, no new opening balance is presented in 2018.

IFRS 16 will apply to the accounting year that begins on 1 January 2019. Earlier application is permitted but the Group has chosen not to take up this option.

ASSA ABLOY makes use of a number of financial performance measures that are not defined in the reporting rules that the company uses – so-called 'alternative performance measures'. For definitions of financial performance measures, refer to Page 16 of this Quarterly Report and to the company's latest Annual Report. To check how the financial measurements have been calculated for current and earlier periods, refer to the tabulated figures in this Quarterly Report and to the company's Annual Report. The Annual Reports for the years 1994 to 2017 appear on the company's website www.assaabloy.com.

Totals quoted in tables and statements may not always be the exact sum of the individual items because of rounding differences. The aim is that each line item should correspond to its source, and rounding differences may therefore arise.

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, financial and tax-related 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 particular risks and risk management, see the 2017 Annual Report.

Review

The Company's Auditors have not carried out any review of this Report for the first quarter of 2018.

Stockholm, 26 April 2018

Nico Delvaux President and CEO

Financial information

The Interim Report for the second quarter will be published on 18 July 2018.

The Interim Report for the third quarter will be published on 19 October 2018.

Further information can be obtained from:

Nico Delvaux, President and CEO, Tel: +46 8 506 485 82

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. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CEST on 26 April 2018.

ASSA ABLOY AB (publ) Box 703 40 107 23 Stockholm Visiting address Klarabergsviadukten 90, Stockholm, Sweden Tel +46 (0)8 506 485 00 Fax +46 (0)8 506 485 85 www.assaabloy.com Corporate identity number: 556059-3575 No.07/2018

Financial information – Group

CONSOLIDATED INCOME STATEMENT	Year
-------------------------------	------

CONSOLIDATED INCOME STATEMENT	Year	Q1
SEK M	2017	2017	2018
Sales	76,137	18,142	18,550
Cost of goods sold	-46,148	-10,951	-11,178
Gross income	29,988	7,190	7,372
Selling, administrative and R&D costs	-17,777	-4,431	-4,575
Share of earnings in associates	129	28	32
Operating income	12,341	2,787	2,829
Finance net	-668	-195	-175
Income before tax	11,673	2,593	2,654
Tax on income	-3 038	-674	-690
Net income for the period	8,635	1,918	1,964
Net income for the period attributable to:
Parent company's shareholders	8,633	1,919	1,964
Non-controlling interests	2	0	0
Earnings per share
Before and after dilution, SEK	7.77	1.73	1.77
		Q1
STATEMENT OF COMPREHENSIVE INCOME	Year
SEK M	2017	2017	2018
Net income for the period	8,635	1,918	1,964
Other comprehensive income: Items that will not be reclassified to profit or loss
Actuarial gain/loss on post-employment benefit obligations, net after tax	-51	23	26
Total	-51	23	26
Items that may be reclassified subsequently to profit or loss
Share of other comprehensive income of associates	50	39	103
Cashflow hedges and net investment hedges	26	-10	-17
Exchange rate differences	-1,864	-165	1,202
Total	-1,788	-136	1,288
Total comprehensive income for the period	6,796	1,806	3,278
Total comprehensive income for the period attributable to:
Parent company's shareholders	6,794	1,806	3,278
Non-controlling interests	2	0	0

Financial information – Group

CONSOLIDATED BALANCE SHEET	31 Dec	31 Mar
SEK M	2017	2017	2018
ASSETS
Non-current assets
Intangible assets	61,409	57,001	63,614
Property, plant and equipment	8,065	8,031	8,362
Investments in associates	2,243	2,176	2,385
Other financial assets	227	88	169
Deferred tax assets	1,355	1,763	2,012
Total non-current assets	73,299	69,060	76,540
Current assets
Inventories	9,430	10,009	10,363
Trade receivables	13,068	12,800	13,596
Other current receivables and investments	3,188	3,536	3,817
Cash and cash equivalents	459	697	551
Total current assets	26,145	27,043	28,327
TOTAL ASSETS	99,444	96,103	104,867
EQUITY AND LIABILITIES
Equity
Equity attributable to Parent company's shareholders	50,648	48,989	53,911
Non-controlling interests	9	4	9
Total equity	50,657	48,994	53,920
Non-current liabilities
Long-term loans	16,859	16,232	18,425
Deferred tax liabilities	2,218	2,261	2,843
Other non-current liabilities and provisions	5,217	6,357	5,164
Total non-current liabilities	24,293	24,850	26,433
Current liabilities
Short-term loans	6,151	4,780	6,559
Trade payables	7,811	6,695	7,106
Other current liabilities and provisions	10,531	10,783	10,850
Total current liabilities	24,494	22,259	24,515
TOTAL EQUITY AND LIABILITIES	99,444	96,103	104,867

CHANGES IN CONSOLIDATED EQUITY	Equity attributable to:
	Parent	Non
	company's	controlling	Total
SEK M	shareholders	interests	equity
Opening balance 1 January 2017	47,220	5	47,224
Net income for the period	1,919	0	1,918
Other comprehensive income	-113	0	-113
Total comprehensive income	1,806	0	1,806
Stock purchase plans	-36	-	-36
Total transactions with shareholders	-36	-	-36
Closing balance 31 March 2017	48,989	4	48,994

Opening balance 1 January 2018	50,648	9	50,657
Net income for the period	1,964	0	1,964
Other comprehensive income	1,314	0	1,314
Total comprehensive income	3,278	0	3,278
Stock purchase plans	-16	-	-16
Total transactions with shareholders	-16	-	-16
Closing balance 31 March 2018	53,911	9	53,920

Financial information – Group

CONSOLIDATED STATEMENT OF CASH FLOWS	Year	Q1
SEK M	2017	2017	2018
OPERATING ACTIVITIES
Operating income	12,341	2,787	2,829
Depreciation and amortization	1,688	421	468
Restructuring payments	-612	-84	-173
Other non-cash items	-221	-36	-107
Cash flow before interest and tax	13,196	3,089	3,017
	-557	-93	-122
Interest paid and received	-3,044	-629	-609
Tax paid on income Cash flow before changes in working capital	9,595	2,366	2,286
Changes in working capital	-347	-1,882	-2,136
Cash flow from operating activities	9,248	483	150
INVESTING ACTIVITIES
Net investments in intangible assets and property, plant and equipment	-1,975	-373	-356
Investments in subsidiaries	-6,825	-445	-967
Investments in associates	0	0	0
Disposals of subsidiaries	139	1	-11
Other investments and disposals	0	0	0
Cash flow from investing activities	-8,661	-817	-1,334
FINANCING ACTIVITIES
Dividends	-3,332	-	-
Acquisition of non-controlling interests	-130	-	-
Net cash effect of changes in borrowings	2,601	282	1,270
Cash flow from financing activities	-861	282	1,270
CASH FLOW FOR THE PERIOD	-274	-51	87
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period	750	750	459
Cash flow for the period	-274	-51	87
Effect of exchange rate differences	-17	-1	6
Cash and cash equivalents at end of period	459	697	551
KEY RATIOS	Year	Q1
	2017	2017	2018
Return on capital employed, %	16.6	15.1	14.2
Return on shareholders' equity, %	17.6	16.0	15.0
Equity ratio, %	50.9	51.0	51.4
Interest coverage ratio, times	19.1	16.8	16.6
Total number of shares, thousands	1,112,576	1,112,576 1,112,576
Number of shares outstanding, thousands	1,110,776	1,110,776 1,110,776
Weighted average number of outstanding shares before and after dilution, thousands	1,110,776	1,110,776 1,110,776

Average number of employees 47,426 46,769 47,910

Financial information – Parent company

INCOME STATEMENT	Year	Q1
SEK M	2017	2017	2018
Operating income	1,701	-91	-261
Income before appropriations and tax	4,238	-64	-162
Net income for the period	4,670	133	-86

BALANCE SHEET	31 Dec	31 Mar
SEK M	2017	2017	2018
Non-current assets	39,579	35,780	39,936
Current assets	12,740	10,732	13,997
Total assets	52,319	46,512	53,934
Equity	22,494	21,287	22,393
Untaxed reserves	565	-	565
Non-current liabilities	10,581	8,384	12,062
Current liabilities	18,679	16,841	18,914
Total equity and liabilities	52,319	46,512	53,934

Quarterly information – Group

THE GROUP IN SUMMARY	Q1	Q2	Q3	Q4	Year	Q1	Last 12
SEK M	2017	2017	2017	2017	2017		2018 months
Sales	18,142	19,387	18,499	20,109	76,137	18,550	76,545
Organic growth Gross income	6% 7,190	2% 7,581	3% 7,293	5% 7,924	4% 29,988	4% 7,372	30,170
Gross margin	39.6%	39.1%	39.4%	39.4%	39.4%	39.7%	39.4%
Operating income before depr. & amort. (EBITDA)	3,208	3,543	3,488	3,789	14,029	3,297	14,118
Operating margin (EBITDA)	17.7%	18.3%	18.9%	18.8%	18.4%	17.8%	18.4%
Depreciation and amortization excl. amortization
attributable to business combinations	-370	-376	-355	-344	-1,444	-376	-1,451
Operating income before amortization (EBITA)	2,839	3,168	3,132	3,446	12,584	2,921	12,667
Operating margin (EBITA)	15.6%	16.3%	16.9%	17.1%	16.5%	15.7%	16.5%
Amortization attributable to business combinations	-52	-54	-52	-87	-244	-92	-284
Operating income (EBIT)	2,787	3,114	3,080	3,359	12,341	2,829	12,383
Operating margin (EBIT)	15.4%	16.1%	16.7%	16.7%	16.2%	15.3%	16.2%
Net financial items Income before tax (EBT)	-195 2,593	-170 2,944	-171 2,910	-133 3,226	-668 11,673	-175 2,654	-648 11,734
Profit margin (EBT)	14.3%	15.2%	15.7%	16.0%	15.3%	14.3%	15.3%
Tax on income	-674	-765	-757	-842	-3,038	-690	-3,054
Net income for the period	1,918	2,179	2,153	2,385	8,635	1,964	8,681
Net income attributable to:
Parent company's shareholders	1,919	2,178	2,153	2,384	8,633	1,964	8,679
Non-controlling interests	0	1	1	1	2	0	2
OPERATING CASH FLOW	Q1	Q2	Q3	Q4	Year	Q1	Last 12
SEK M	2017	2017	2017	2017	2017		2018 months
Operating income (EBIT)	2,787	3,114	3,080	3,359	12,341	2,829	12,383
Depreciation and amortization Net capital expenditure	421 -373	429 -593	407 -448	430 -561	1,688 -1,975	468 -356	1,735 -1,958
Change in working capital	-1,882	-207	-319	2,061	-347	-2,136	-601
Interest paid and received	-93	-198	-77	-189	-557	-122	-586
Non-cash items	-36	28	11	-224	-221	-107	-292
Operating cash flow	824	2,575	2,654	4,876	10,929	575	10,680
Operating cash flow/Income before tax	0.32	0.87	0.91	1.51	0.94	0.22	0.91
CHANGE IN NET DEBT	Q1	Q2	Q3	Q4	Year	Q1
SEK M	2017	2017	2017	2017	2017	2018
Net debt at beginning of period	23,127	23,339	24,970	25,180	23,127	25,275
Operating cash flow	-824	-2,575	-2,654	-4,876	-10,929	-575
Restructuring payments	84	136	106	286	612	173
Tax paid on income	629	961	1,656	-203	3,044	609
Acquistions and divestments Dividend	461 -	268 3,332	1,741 -	4,319 -	6,790 3,332	986 -
Actuarial gain/loss on post-employment benefit obligations	-34	99	-50	-40	-26	-35
Exchange rate differences, etc.	-104	-590	-590	608	-676	787
Net debt at end of period	23,339	24,970	25,180	25,275	25,275	27,219
Net debt/Equity	0.48	0.54	0.53	0.50	0.50	0.50
NET DEBT	Q1	Q2	Q3	Q4		Q1
SEK M	2017	2017	2017	2017		2018
Non-current interest-bearing receivables	-41	-39	-212	-171		-113
Current interest-bearing investments including derivatives	-113	-211	-161	-150		-277
Cash and cash equivalents	-697	-844	-440	-459		-551
Pension provisions	3,058	3,109	2,929	2,933		2,971
Other non-current interest-bearing liabilities Current interest-bearing liabilities including derivatives	16,232 4,901	17,450 5,505	16,728 6,336	16,859 6,263		18,425 6,763
Total	23,339	24,970	25,180	25,275		27,219
CAPITAL EMPLOYED AND FINANCING	Q1	Q2	Q3	Q4		Q1
SEK M	2017	2017	2017	2017		2018
Capital employed	72,333	71,349	72,477	75,932		81,139
- of which goodwill	47,438	46,252	46,573	50,330		51,956
- of which other intangible assets and
property, plant and equipment	17,595	17,309	17,032	19,144		20,019
- of which investments in associates	2,176	2,193	2,147	2,243		2,385
Net debt	23,339	24,970	25,180	25,275		27,219
Non-controlling interests	4	5	5	9		9
Equity attributable to the Parent company´s shareholders	48,989	46,374	47,292	50,648		53,911
DATA PER SHARE SEK	Q1 2017	Q2 2017	Q3 2017	Q4 2017	Year 2017	Q1 2018
Earnings per share before and after dilution	1.73	1.96	1.94	2.15	7.77	1.77
Shareholders' equity per share after dilution	44.10	41.75	42.58	45.60	45.60	48.53

Reporting by division

Q1 and 31 Mar							Global		Entrance
	EMEA		Americas		Asia Pacific		Technologies		Systems		Other		Total
SEK M	2017	2018	2017	2018	2017	2018	2017	2018	2017	2018	2017	2018	2017	2018
Sales, external	4,325	4,696	4,546	4,336	1,750	1,763	2,463	2,455	5,057	5,300	0	0		18,142 18,550
Sales, internal	80	79	20	18	167	196	18	21	29	23	-314	-337	-	-
Sales	4,404	4,775	4,566	4,354	1,917	1,959	2,481	2,477	5,087	5,322	-314	-337	18,142 18,550
Organic growth	5%	3%	7%	3%	3%	4%	9%	6%	7%	5%	-	-	6%	4%
Share of earnings in associates	-	-	-	-	6	6	-	-	23	26	-	-	28	32
Operating income (EBIT)	718	764	961	845	151	154	422	466	638	710	-103	-111	2,787	2,829
Operating margin (EBIT)	16.3%	16.0%	21.0%	19.4%	7.9%	7.9%	17.0%	18.8%	12.5%	13.3%	-	-	15.4%	15.3%
Capital employed		13,507 15,310		16,165 16,637		12,106 13,060		11,502 16,564		18,473 19,303	580	265		72,333 81,139
- of which goodwill	8,361	9,346		10,862 10,935	7,929	8,054		8,557 11,727		11,728 11,894	-	-		47,438 51,956
- of which other intangible assets and
property, plant and equipment	3,256	3,769	3,479	3,720	3,917	3,911	2,563	4,092	4,254	4,380	125	148		17,595 20,019
- of which investments in associates	9	9	-	-	545	558	-	17	1,623	1,800	-	-	2,176	2,385
Return on capital employed	20.0%	20.0%	24.2%	21.0%	5.0%	4.9%	14.6%	11.6%	13.3%	14.5%	-	-	15.1%	14.2%
Operating income (EBIT)	718	764	961	845	151	154	422	466	638	710	-103	-111	2,787	2,829
Depreciation and amortization	107	112	86	87	76	78	78	119	69	68	4	5	421	468
Net capital expenditure	-71	-76	-96	-72	-85	-56	-70	-60	-45	-79	-6	-12	-373	-356
Change in working capital	-368	-538	-754	-618	-296	-334	-374	-324	-2	-320	-89	-3		-1,882 -2,136
Cash flow	387	262	197	241	-154	-158	57	201	660	379	-194	-122	953	805
Non-cash items											-36	-107	-36	-107
Interest paid and received											-93	-122	-93	-122
Operating cash flow													824	575
Average number of employees		10,913 11,587	8,898	8,902		11,508 11,316	4,083	4,524		11,101 11,302	266	280		46,769 47,910

Reporting by division

Year and 31 Dec

								Global	Entrance
		EMEA		Americas	Asia Pacific			Technologies	Systems		Other			Total
SEK M	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017
Sales, external		16,535 17,729		16,963 17,873	8,491	8,553		9,619 10,301		19,685 21,681	0	0		71,293 76,137
Sales, internal	302	351	81	67	698	658	78	72	104	100		-1,262 -1,249	-	-
Sales		16,837 18,081	17,044 17,940		9,189	9,211		9,697 10,373	19,789 21,781		-1,262 -1,249		71,293 76,137
Organic growth	3%	4%	5%	4%	-9%	0%	3%	7%	4%	4%	-	-	2%	4%
Share of earnings in associates	-	-	-	-	23	25	-	-	104	104	-	-	127	129
Operating income (EBIT) excl.
items affecting comparability	2,722	2,990	3,640	3,815	787	934	1,752	1,946	2,753	3,087	-401	-432	11,254 12,341
Operating margin (EBIT) excl.
items affecting comparability	16.2%	16.5%	21.4%	21.3%	8.6%	10.1%	18.1%	18.8%	13.9%	14.2%	-	-	15.8%	16.2%
Items affecting comparability1)	-781	-	-34	-	-258	-	-148	-	-207	-	-168	-	-1 597	-
Operating income (EBIT)	1,942	2,990	3,606	3,815	529	934	1,603	1,946	2,546	3,087	-569	-432		9,657 12,341
Operating margin (EBIT)	11.5%	16.5%	21.2%	21.3%	5.8%	10.1%	16.5%	18.8%	12.9%	14.2%	-	-	13.5%	16.2%
Capital employed		13,275 13,865		15,749 16,095	11,803 12,048			11,331 15,615		18,291 18,379	-98	-71		70,351 75,932
- of which goodwill	8,348	8,571		11,012 11,190	7,920	7,752		8,784 11,121		11,480 11,696	-	-		47,544 50,330
- of which other intangible assets and
property, plant and equipment	3,296	3,567	3,516	3,310	3,900	3,789	2,499	4,064	4,282	4,273	125	140		17,618 19,144
- of which investments in associates	9	9	-	-	496	519	-	17	1,605	1,699	-	-	2,109	2,243
Return on capital employed
excluding items affecting comparability 19.9%		21.4%	25.0%	24.2%	6.6%	7.8%	16.6%	14.4%	15.7%	16.4%	-	-	16.5%	16.6%
Operating income (EBIT)	1,942	2,990	3,606	3,815	529	934	1,603	1,946	2,546	3,087	-569	-432		9,657 12,341
Restructuring costs	781	-	34	-	258	-	148	-	207	-	168	-	1,597	-
Depreciation and amortization	402	421	330	333	283	310	296	353	257	255	11	15	1,580	1,688
Net capital expenditure	-472	-571	-372	-466	-211	-337	-238	-297	-157	-273	-28	-30		-1,478 -1,975
Change in working capital	-75	136	-152	-191	705	-48	-86	-271	-141	-4	-188	30	62	-347
Cash flow	2,577	2,977	3,447	3,491	1,564	859	1,724	1,732	2,713	3,065	-607	-417	11,418 11,706
Non-cash items											-354	-221	-354	-221
Interest paid and received											-597	-557	-597	-557
Operating cash flow													10,467 10,929
Average number of employees		10,835 11,033	8,961	8,836	12,481 11,756		3,907	4,328		10,505 11,211	240	264		46,928 47,426

1) Items affecting comparability consist of restructuring costs.

Financial information - Notes

NOTE 1 DISAGGREGATION OF REVENUE

Sales by continent							Global		Entrance
	EMEA		Americas		Asia Pacific		Technologies			Systems Other		Total
SEK M	2017	2018	2017	2018	2017	2018	2017	2018	2017	2018	2017	2018	2017	2018
Europe	3,864	4,214	10	11	113	125	674	624	2,522	2,643	-143	-151	7,041	7,466
North America	112	105	4,112	3,959	138	160	1,053	1,193	2,120	2,255	-106	-125	7,429	7,546
Central- and South America	25	18	412	354	8	8	92	92	17	21	-8	-6	547	488
Africa	149	192	6	2	2	2	64	89	15	13	-7	-5	229	293
Asia	231	222	24	27	1,210	1,256	525	413	292	274	-27	-28	2,255	2,164
Oceania	23	24	1	1	446	408	73	65	121	116	-24	-21	641	593
Total	4,404	4,775	4,566	4,354	1,917	1,959	2,481	2,477	5,087	5,322	-314	-337	18,142 18,550

Sales by product group							Global		Entrance
EMEA			Americas Asia Pacific		Technologies Systems Other				Total
SEK M	2017	2018	2017	2018	2017	2018	2017	2018	2017	2018	2017	2018	2017	2018
Mechanical locks, lock systems and fittings	2,319	2,455	1,857	1,699	1,048	1,071	22	7	2	2	-157	-165	5,091	5,070
Electromechanical and electronic locks	1,345	1,516	635	757	384	418	2,432	2,426	194	209	-115	-131	4,876	5,195
Security doors and hardware	655	720	2,061	1,884	483	465	-	-	-	-	-12	-17	3,187	3,052
Entrance automation	85	85	12	14	2	5	28	43	4,890	5,111	-30	-24	4,988	5,233
Total	4,404	4,775	4,566	4,354	1,917	1,959	2,481	2,477	5,087	5,322	-314	-337	18,142 18,550

NOTE 2 BUSINESS COMBINATIONS

		Q1
SEK M	2017	2017	2018
Purchase prices
Cash paid for acquisitions during the year	6,501	305	937
Holdbacks and deferred considerations for acquisitions during the year	365	103	221
Adjustment of purchase prices for acquisitions in prior years	18	-	-2
Total	6,885	408	1,156
Acquired assets and liabilities at fair value
Intangible assets	1,843	121	392
Property, plant and equipment	94	10	61
Financial assets	34	2	211
Inventories	232	35	80
Current receivables and investments	416	102	126
Cash and cash equivalents	187	25	116
Non-controlling interests	-3	0	-
Non-current liabilities	-289	-13	-160
Current liabilities	-592	-75	-103
Total	1,922	208	723
Goodwill	4,962	201	433
Change in cash and cash equivalents due to acquisitions
Cash paid for acquisitions during the year	6,501	305	937
Cash and cash equivalents in acquired subsidiaries	-187	-25	-116
Paid considerations for acquisitions in prior years	511	166	146
Total	6,825	445	967

Fair value adjustments of acquired net assets from acquisitions made in previous periods are included in the above table.

NOTE 3 FAIR VALUE AND CARRYING AMOUNT ON FINANCIAL ASSETS AND LIABILITIES

31 March 2018				Financial instruments at fair value
	Carrying	Fair
SEK M	amount	value	Level 1 Level 2 Level 3
Financial assets
Financial assets at fair value through profit and loss	112	112		112
Available-for-sale financial assets	12	12
Loans and other receivables	14,409	14,409
Derivative instruments - hedge accounting	60	60		60
Financial liabilities
Financial liabilities at fair value through profit and loss	1,768	1,768		174	1,594
Financial liabilities at amortized cost	32,090	32,038
Derivative instruments - hedge accounting	30	30		30
			Financial instruments

31 December 2017			at fair value
	Carrying	Fair
SEK M	amount	value	Level 1 Level 2 Level 3
Financial assets
Financial assets at fair value through profit and loss	39	39	39
Available-for-sale financial assets	11	11
Loans and other receivables	13,785	13,785
Derivative instruments - hedge accounting	68	68	68
Financial liabilities
Financial liabilities at fair value through profit and loss	1,660	1,660	100	1,559
Financial liabilities at amortized cost	30,821	30,831
Derivative instruments - hedge accounting	11	11	11

Definitions of financial performance measures

Organic growth Net debt

Change in sales for comparable units after adjustments for Interest-bearing liabilities less interest-bearing assets. acquisitions and exchange rate effects.

Operating income before depreciation and amortization as a bearing liabilities including deferred tax liability. percentage of sales.

Operating income before amortization of intangible assets recognized in business combinations, as a percentage of sales. Interest coverage ratio

Operating margin (EBIT)

Operating income as a percentage of sales. Return on shareholders' equity

Income before tax as a percentage of sales. equity.

See the table on operating cash flow for detailed information. For Income before tax plus net interest as a percentage of relationship between operating cash flow and cash flow from average capital employed excluding restructuring reserves. operating activities see the company's last Annual Report.

property, plant and equipment. potential dilution.

Depreciation and amortization

Depreciation and amortization of intangible assets and property, plant and equipment.

Capital employed

Operating margin (EBITDA) Total assets less interest-bearing assets and non-interest-

Equity ratio

Operating margin (EBITA) Shareholders' equity as a percentage of total assets.

Income before tax plus net interest divided by net interest.

Net income attributable to parent company's shareholders Profit margin (EBT) as a percentage of average parent company's shareholders

Operating cash flow Return on capital employed

Earnings per share after tax and dilution

Net capital expenditure Net income excluding non-controlling interests divided by Investments in, less disposals of, intangible assets and weighted average number of outstanding shares after any