ASSA ABLOY

Quarterly Report • Apr 26, 2017

• Sales increased by 14% to SEK 18,142 M (15,891), with organic growth of 6% (3). Acquisitions contributed 3%
• Strong growth was shown by Global Technologies, Entrance Systems, Americas and EMEA, and good growth by Asia Pacific
• Contracts have been signed for the acquisition of seven companies with expected combined annual sales of about SEK 700 M
• Operating income (EBIT) increased by 16% and totaled SEK 2,787 M (2,411), which represents an operating margin of 15.4% (15.2)
• Net income amounted to SEK 1,918 M (1,638)
• Earnings per share amounted to SEK 1.73 (1.47)
• Operating cash flow amounted to SEK 824 M (498).

	First quarter
	2016	2017	Δ
Sales, SEK M	15,891	18,142	14%
Of which:
Organic growth1)	400	1,022	6%
Acquisitions and divestments	490	448	3%
Exchange rate effects1)	-251	780	5%
Operating income (EBIT), SEK M	2,411	2,787	16%
Operating margin (EBIT), %	15.2%	15.4%
Income before tax, SEK M	2,209	2,593	17%
Net income, SEK M	1,638	1,918	17%
Operating cash flow, SEK M	498	824	65%
Earnings per share, SEK	1.47	1.73	17%

1) The sales components Organic growth and exchange rate effects has been restated for the first quarter 2016. No effect on sales numbers.

"2017 started well for ASSA ABLOY with a strong organic growth of 6% and with growth in all divisions," says Johan Molin, President and CEO. The mature markets continued to achieve a good performance, with strong growth in many of our key markets such as the USA, Scandinavia, Britain and Germany. In China, where the trend has been very negative, we saw a stabilization of demand. In the Middle East and Brazil sales fell, however. It should be noted that the quarter had two extra days as a result of the late Easter, which contributed to the strong sales.

"We saw the strongest performance in Global Technologies with a full 9% organic growth. Sales growth for electromechanical lock solutions continues to be very good in all divisions and on nearly all markets, which is very much due to our technological leadership. We saw confirmation of this at ISC WEST, the USA's most important security exhibition, where ASSA ABLOY won no fewer than ten prizes for best innovations.

"The applications of virtual keys are continuing to develop rapidly – both on the private residential market through so-called Connected Home solutions using mobile apps and on the commercial market in hotel locks, access control, virtual identities and trusted transactions, for example.

"During the quarter contracts were signed for the acquisition of seven companies, including Jerith. The company complements and strengthens our market-leading position in Perimeter Control in the USA. Jerith is a leading supplier of aluminum fencing for residential, commercial and industrial applications.

"Operating income for the quarter increased by a full 16% and amounted to SEK 2,787 M, with an operating margin of 15.4% (15.2). The margin also moved upward in all divisions apart from Asia Pacific in spite of greatly increased material prices. Normal price adjustments have been made to compensate for these. Operating cash flow improved by 65%, although the first quarter is seasonally weak.

"My judgment is that the global economic trend has improved to some degree. On most markets in North and South America and in parts of Europe there is a positive trend, but on some markets, chiefly in Asia and the Middle East, the trend is weak. However, our strategy of expanding our market presence, even on the emerging markets, remains unchanged. We are also continuing our investments in new products, especially in the growth area of electromechanics."

The Group's sales increased by 14% to SEK 18,142 M (15,891). Organic growth for comparable units amounted to 6% (3). Acquisitions and divestments were 3%. Exchange-rate effects affected sales by 5%. Operating income before depreciation, EBITDA, amounted to SEK 3,208 M (2,787). The corresponding EBITDA margin was 17.7% (17.5).

The Group's operating income, EBIT, amounted to SEK 2,787 M (2,411), an increase of 16%. The operating margin was 15.4% (15.2).

Net financial items amounted to SEK -195 M (-201). The Group's income before tax was SEK 2,593 M (2,209), an increase of 17% compared with last year. Exchange-rate effects had an impact of SEK 126 M (-73) on income before tax. The profit margin was 14.3% (13.9). The underlying estimated effective tax rate on an annual basis was 26% (26). Earnings per share amounted to SEK 1.73 (1.47), an increase of 17% compared with last year.

Payments related to all restructuring programs amounted to SEK 84 M (95) in the quarter. The restructuring programs proceeded according to plan and led to a reduction in personnel of 157 people during the quarter and 12,319 people since the projects began in 2006. At the end of the quarter provisions of SEK 1,484 M remained in the balance sheet for carrying out the programs.

Sales for the quarter in EMEA division totaled SEK 4,404 M (4,004), with organic growth of 5% (3). Scandinavia, Finland, Britain, Germany and southern Europe showed strong growth. France and Eastern Europe had good growth while sales in Benelux were unchanged. As expected, the Middle East had continued negative sales development. The positive trend for electromechanical products continued. Acquired growth was 3%. Exchange-rate effects on sales were 2%. Operating income totaled SEK 718 M (634), which represents an operating margin (EBIT) of 16.3% (15.8). Return on capital employed amounted to 20.0% (18.6). Operating cash flow before interest paid totaled SEK 387 M (188).

Sales for the quarter in Americas division totaled SEK 4,566 M (3,969), with organic growth of 7% (6). Growth was strong for Security doors, Security fencing and the Private residential market in the USA, and in Mexico and South America apart from Brazil. Sales growth was good for Traditional lock products and High-security products in the USA and in Canada. Brazil continued to show a negative sales trend. The positive trend for electromechanical products continued. Acquired growth was 0%. Exchange-rate effects on sales were 8%. Operating income totaled SEK 961 M (824), which represents an operating margin (EBIT) of 21.0% (20.8). Return on capital employed amounted to 24.2% (23.0). Operating cash flow before interest paid totaled SEK 197 M (271).

Sales for the quarter in Asia Pacific division totaled SEK 1,917 M (1,758), with organic growth of 3% (-5). There was strong growth in Pacific, South Korea, South-East Asia and Japan and for digital door locks, while sales in China were unchanged. Acquired growth was 0%. Exchange-rate effects on sales were 6%. Operating income totaled SEK 151 M (174), which represents an operating margin (EBIT) of 7.9% (9.9). Return on capital employed amounted to 5.0% (5.7). Operating cash flow before interest paid totaled SEK -154 M (-221).

Sales for the quarter in Global Technologies division totaled SEK 2,481 M (2,147), with organic growth of 9% (1). Access control, Logical access, Secure issuance and Government ID achieved strong growth within HID Global. Project business AdvanIDe grew while Identification technology had negative growth. Hospitality showed strong growth. Acquired growth amounted to 1%. Exchangerate effects on sales were 6%. Operating income amounted to SEK 422 M (363), which represents an operating margin (EBIT) of 17.0% (16.9). Return on capital employed amounted to 14.6% (14.7). Operating cash flow before interest paid totaled SEK 57 M (110).

Sales for the quarter in Entrance Systems division totaled SEK 5,087 M (4,291), with organic growth of 7% (3). Door automation, High-speed doors, Door components and Industrial and garage doors in the USA showed strong growth. Industrial doors in Europe showed good growth. Acquired growth amounted to 7%. Exchange-rate effects on sales were 5%. Operating income totaled SEK 638 M (529), which represents an operating margin (EBIT) of 12.5% (12.3). Return on capital employed amounted to 13.3% (12.3). Operating cash flow before interest paid totaled SEK 660 M (403).

A total of five acquisitions were consolidated during the quarter. The combined acquisition price for the companies acquired during the year amounted to SEK 400 M, and preliminary acquisition analyses indicate that goodwill and other intangible assets with indefinite useful life amount to SEK 317 M. The acquisition price is adjusted for acquired net debt and estimated deferred considerations. Estimated deferred considerations amount to SEK 103 M.

On 18 April it was announced that ASSA ABLOY had acquired Jerith in the USA, a leading American supplier of aluminum fencing. The company has 75 employees and its sales in 2017 are expected to amount to about SEK 200 M.

ASSA ABLOY's Sustainability Report for 2016 was published on 22 March 2017. The Report shows that the Group's key indicators are continuing to move in a positive direction. During 2016 its energy efficiency was improved by 12%. The Group's total emissions of greenhouse gases fell by 24% as a result of the introduction of new production technology and the improvement activities carried out. The number of units covered by ISO 14001 certification or having other certifiable environmental management systems increased from 121 to 124. This means that 76% of the Group's factory workers now work in factories with environmental management systems, compared with 73% in 2015.

The frequency of accidents was reduced by 22% in 2016. A new Group-wide management system for Health and Safety was developed during the year, and the introduction of the new management system began in Q1 2017.

Other operating income for the Parent company ASSA ABLOY AB totaled SEK 498 M (401) for the first quarter. Operating income for the same period amounted to SEK -91 M (-116). Investments in tangible and intangible assets totaled SEK 5 M (2). Liquidity is good and the equity ratio was 45.8% (45.4).

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 2016 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 new standards, IFRS 9 (Financial instruments) and IFRS 15 (Revenue from Contracts with Customers) are to be applied from the financial year beginning 1 January 2018, while IFRS 16 (Leases) takes effect on 1 January 2019. Earlier application is allowed for all standards. During 2016 a major project was initiated relating to the implementation of IFRS 15. Although the impact of the new standard as of 31 March 2017 has not yet been fully investigated, the Group's current assessment is that the standard will not have a material impact on the consolidated financial statements.

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 15 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 2016 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.

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

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 2016 Annual Report.

The Company's Auditors have not carried out any review of this Report for the first quarter of 2017.

Stockholm, 26 April 2017

Johan Molin President and CEO

The Interim Report for the second quarter of 2017 will be published on 19 July 2017.

The Interim Report for the third quarter of 2017 will be published on 20 October 2017.

A capital markets day will be held on 15 November 2017 in Stockholm, Sweden.

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. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CEST on 26 April 2017.

CONSOLIDATED INCOME STATEMENT	Year		Q1
SEK M	2016	2016	2017
Sales	71,293	15,891	18,142
Cost of goods sold	-44,319	-9,596	-10,951
Gross income	26,974	6,295	7,190
Selling, administrative and R&D costs	-17,444	-3,917	-4,431
Share of earnings in associates	127	33	28
Operating income	9,657	2,411	2,787
Finance net	-705	-201	-195
Income before tax	8,952	2,209	2,593
Tax on income	-2,328	-574	-674
Profit from discontinued operations	28	3	-
Net income for the period	6,653	1,638	1,918
Net income for the period attributable to:
Parent company's shareholders	6,651	1,638	1,919
Non-controlling interest	1	0	0
Earnings per share
before and after dilution, SEK	5.99	1.47	1.73
before and after dilution and excluding items affecting comparability, SEK	7.09	1.47	1.73
STATEMENT OF COMPREHENSIVE INCOME	Year	Q1
SEK M	2016	2016	2017
Net income for the period	6,653	1,638	1,918
Other comprehensive income: Items that will not be reclassified to profit or loss
Actuarial gain/loss on post-employment benefit obligations, net after tax	-102	-149	23
Total	-102	-149	23
Items that may be reclassified subsequently to profit or loss
Share of other comprehensive income of associates	126	33	39
Cashflow hedges, net investment hedges and other hedges	-5	5	-10
Exchange rate differences	1,955	-507	-165
Total	2,077	-469	-136
Total comprehensive income for the period	8,627	1,020	1,806
Total comprehensive income for the period attributable to:
Parent company's shareholders	8,627	1,020	1,806
Non-controlling interest	1	0	0

CONSOLIDATED BALANCE SHEET	31 Mar 31 Dec
SEK M	2016	2016	2017
ASSETS
Non-current assets
Intangible assets	57,096	52,054	57,001
Property, plant and equipment	8,066	7,657	8,031
Investments in associates	2,109	1,970	2,176
Other financial assets	86	80	88
Deferred tax assets	1,899	1,535	1,763
Total non-current assets	69,257	63,297	69,060
Current assets
Inventories	9,565	8,731	10,009
Trade receivables	12,648	11,725	12,800
Other current receivables and investments	3,062	3,253	3,536
Cash and cash equivalents	750	578	697
Asset of disposal group classified as held for sale	-	218	-
Total current assets	26,025	24,504	27,043
TOTAL ASSETS	95,282	87,801	96,103
EQUITY AND LIABILITIES
Equity
Equity attributable to Parent company's shareholders	47,220	42,551	48,989
Non-controlling interest	5	4	4
Total equity	47,224	42,554	48,994
Non-current liabilities
Long-term loans	16,901	15,668	16,232
Deferred tax liabilities	2,344	2,036	2,261
Other non-current liabilities and provisions	6,701	6,001	6,357
Total non-current liabilities	25,945	23,705	24,850
Current liabilities
Short-term loans	3,929	6,760	4,780
Trade payables	7,443	5,828	6,695
Other current liabilities and provisions	10,741	8,847	10,783
Liabilities of disposal group classified as held for sale	-	107	-
Total current liabilities	22,112	21,542	22,259
TOTAL EQUITY AND LIABILITIES	95,282	87,801	96,103

CHANGES IN CONSOLIDATED EQUITY Equity attributable to:

	Parent	Non
	company's	controlling	Total
SEK M	shareholders	interest	equity
Opening balance 1 January 2016	41,575	4	41,579
Net income for the period	1,638	0	1,638
Other comprehensive income	-618	0	-618
Total comprehensive income	1,020	0	1,020
Stock purchase plans	-44	-	-44
Total transactions with parent company's shareholders	-44	-	-44
Closing balance 31 March 2016	42,551	4	42,554

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 parent company's shareholders	-36	-	-36
Closing balance 31 March 2017	48,989	4	48,994

CONSOLIDATED CASH FLOW STATEMENT	Year	Q1
SEK M	2016	2016	2017
OPERATING ACTIVITIES
Operating income	9,657	2,411	2,787
Depreciation and amortization	1,580	376	421
Reversal of restructuring costs	1,597	-	-
Restructuring payments	-442	-95	-84
Other non-cash items	-354	-17	-36
Cash flow before interest and tax	12,037	2,674	3,089
Interest paid and received	-597	-94	-93
Tax paid on income	-2,928	-1,298	-629
Cash flow before changes in working capital	8,512	1,282	2,366
Changes in working capital	62	-1,836	-1,882
Cash flow from operating activities	8,575	-554	483
INVESTING ACTIVITIES
Net investments in intangible assets and property, plant and equipment	-1,478	-342	-373
Investments in subsidiaries	-2,640	-977	-445
Investments in associates	-1	-1	0
Disposals of subsidiaries	55	-	1
Other investments and disposals	0	-	0
Cash flow from investing activities	-4,063	-1,320	-817
FINANCING ACTIVITIES
Dividends	-2,944	-	-
Acquisition of non-controlling interest	-40	-	-
Net cash effect of changes in borrowings	-1,287	1,958	282
Cash flow from financing activities	-4,271	1,958	282
CASH FLOW FOR THE PERIOD	240	85	-51
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period	501	501	750
Cash flow for the period	240	85	-51
Effect of exchange rate differences	9	-8	-1
Cash and cash equivalents at end of period	750	578	697
		Q1
KEY RATIOS	Year 2016	2016	2017
Return on capital employed, %	14.1	14.5	15.1
Return on capital employed excluding items affecting comparability, %	16.5	14.5	15.1
Return on shareholders' equity, %	15.0	15.6	16.0
Equity ratio, %	49.6	48.5	51.0
Interest coverage ratio, times	14.1	13.5	16.8
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	46,928	46,796	46,769

INCOME STATEMENT		Q1
SEK M	2016	2016	2017
Operating income	1,687	-116	-91
Income before appropriations and tax	2,952	-70	-64
Net income for the period	3,619	-35	133

BALANCE SHEET	31 Dec	31 Mar
SEK M	2016	2016	2017
Non-current assets	35,670	35,789	35,780
Current assets	10,548	9,288	10,732
Total assets	46,218	45,077	46,512
Equity	21,190	20,474	21,287
Non-current liabilities	8,894	8,266	8,384
Current liabilities	16,134	16,337	16,841
Total equity and liabilities	46,218	45,077	46,512

THE GROUP IN SUMMARY	Q1	Q2	Q3	Q4	Year		Q1 Last 12
SEK M	2016	2016	2016	2016	2016		2017 months
Sales Organic growth Gross income excluding items	15,891 3%	17,894 4%	18,025 2%	19,484 1%	71,293 2%	18,142 6%	73,544
affecting comparability Gross margin excluding items affecting comparability	6,295 39.6%	7,031 39.3%	7,139 39.6%	7,660 39.3%	28,125 39.5%	7,190 39.6%	29,021 39.5%
Operating income before depr. & amort. (EBITDA)
excluding items affecting comparability	2,787	3,305	3,425	3,316	12,833	3,208	13,255
Operating margin (EBITDA)	17.5%	18.5%	19.0%	17.0%	18.0%	17.7%	18.0%
Depreciation and amortization	-376	-395	-406	-403	-1,580	-421	-1,625
Operating income (EBIT) excluding
items affecting comparability	2,411	2,910	3,020	2,913	11,254	2,787	11,630
Operating margin (EBIT)	15.2%	16.3%	16.8%	15.0%	15.8%	15.4%	15.8%
Items affecting comparability1)	-	-	-	-1,597	-1,597	-	-1 597
Operating income (EBIT)	2,411	2,910	3,020	1,316	9,657	2,787	10,033
Operating margin (EBIT)	15.2%	16.3%	16.8%	6.8%	13.5%	15.4%	13.6%
Net financial items	-201	-181	-175	-146	-705	-195	-698
Income before tax (EBT)	2,209	2,729	2,844	1,170	8,952	2,593	9,335
Profit margin (EBT)	13.9%	15.2%	15.8%	6.0%	12.6%	14.3%	12.7%
Tax on income	-574	-709	-739	-304	-2,328	-674	-2,427
Profit from discontinued operations Net income for the period	3 1,638	7 2,026	17 2,122	1 867	28 6,653	- 1,918	25 6,934
Net income attributable to:
Parent company's shareholders Non-controlling interest	1,638 0	2,026 0	2,122 0	866 1	6,651 1	1,919 0	6,932 1
OPERATING CASH FLOW SEK M	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Year 2016		Q1 Last 12 2017 months
Operating income (EBIT)	2,411	2,910	3,020	1,316	9,657	2,787	10,033
Restructuring costs	-	-	-	1,597	1,597	-	1,597
Depreciation and amortization	376	395	406	403	1,580	421	1,625
Net capital expenditure	-342	-394	-331	-411	-1,478	-373	-1,509
Change in working capital	-1,836	-139	98	1,939	62	-1,882	16
Interest paid and received	-94	-228	-96	-179	-597	-93	-596
Non-cash items	-17	-26	-266	-45	-354	-36	-373
Operating Cash flow2)	498	2,519	2,830	4,620	10,467	824	10,793
Operating Cash flow/Income before tax excluding items affecting comparability1)	0.23	0.92	0.99	1.67	0.99	0.32	1.16
CHANGE IN NET DEBT	Q1	Q2	Q3	Q4	Year	Q1
SEK M	2016	2016	2016	2016	2016	2017
Net debt at beginning of period	22,269	24,681	27,122	25,571	22,269	23,127
Operating cash flow	-498	-2,519	-2,830	-4,620	-10,467	-824
Restructuring payments	95	50	61	235	442	84
Tax paid Acquistions and disposals	1,298 1,345	478 556	523 145	629 991	2,928 3,037	629 461
Dividend	-	2,944	-	-	2,944	-
Actuarial gain/loss on post-employment benefit obligation	221	186	105	-374	138	-34
Net debt of disposal group classified as held for sale	0	0	0	-	-	-
Exchange rate differences and other	-49	746	444	695	1,836	-104
Net debt at end of period	24,681	27,122	25,571	23,127	23,127	23,339
Net debt/Equity ratio	0.58	0.64	0.57	0.49	0.49	0.48
NET DEBT SEK M	Q1 2016	Q2 2016	Q3 2016	Q4 2016		Q1 2017
Non-current interest-bearing receivables	-34	-36	-41	-41		-41
Current interest-bearing investments including derivatives	-270	-222	-168	-169		-113
Cash and cash equivalents	-578	-564	-604	-750		-697
Pension provisions	3,002	3,258	3,406	3,121		3,058
Other non-current interest-bearing liabilities	15,668	15,805	16,205	16,901		16,232
Current interest-bearing liabilities including derivatives	6,893	8,881	6,773	4,065		4,901
Total	24,681	27,122	25,571	23,127		23,339
CAPITAL EMPLOYED AND FINANCING	Q1	Q2	Q3	Q4		Q1
SEK M	2016	2016	2016	2016		2017
Capital employed	67,124	69,449	70,555	70,351		72,333
- of which goodwill	43,098	44,387	45,077	47,544		47,438
- of which other intangible assets and
property, plant and equipment	16,613	17,036	17,264	17,618		17,595
- of which investments in associates Assets and liabilities of disposal group classified	1,970	2,037	2,095	2,109		2,176
as held for sale	111	126	-	-		-
Net debt	24,681	27,122	25,571	23,127		23,339
Non-controlling interest	4	3	4	5		4
Shareholders' equity	42,551	42,449	44,981	47,220		48,989
DATA PER SHARE SEK	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Year 2016	Q1 2017
Earnings per share before and after dilution	1.47	1.82	1.91	0.78	5.99	1.73
Earnings per share before and after dilution and
excluding items affecting comparability 1)	1.47	1.82	1.91	1.88	7.09	1.73
Shareholders' equity per share after dilution	38.31	38.22	40.50	42.51	42.51	44.10

Q1 and 31 Mar							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	3,938	4,325	3,944	4,546	1,614	1,750	2,132	2,463	4,263	5,057	0	0		15,891 18,142
Sales, internal	66	80	25	20	143	167	15	18	28	29	-278	-314	-	-
Sales		4,004 4,404		3,969 4,566		1,758 1,917		2,147 2,481		4,291 5,087	-278		-314 15,891 18,142
Organic growth	3%	5%	6%	7%	-5%	3%	1%	9%	3%	7%	-	-	3%	6%
Share of earnings in associates	-	-	-	-	4	6	-	-	28	23	-	-	33	28
Operating income (EBIT)	634	718	824	961	174	151	363	422	529	638	-112	-103		2,411 2,787
Operating margin (EBIT)		15.8% 16.3%		20.8% 21.0%	9.9%	7.9%		16.9% 17.0%		12.3% 12.5%				15.2% 15.4%
Capital employed		13,122 13,507		14,304 16,165		12,145 12,106		9,964 11,502		17,204 18,473	385	580		67,124 72,333
- of which goodwill	7,756	8,361		9,830 10,862	7,580	7,929	7,282	8,557		10,649 11,728	-	-		43,098 47,438
- of which other intangible assets and
property, plant and equipment	3,137	3,256	3,137	3,479	3,849	3,917	2,230	2,563	4,153	4,254	108	125		16,613 17,595
- of which investments in associates	8	9	-	-	477	545	-	-	1,485	1,623	-	-	1,970	2,176
Return on capital employed		18.6% 20.0%		23.0% 24.2%	5.7%	5.0%		14.7% 14.6%		12.3% 13.3%	-	-		14.5% 15.1%
Operating income (EBIT)	634	718	824	961	174	151	363	422	529	638	-112	-103	2,411	2,787
Depreciation and amortization	99	107	77	86	68	76	67	78	64	69	2	4	376	421
Net capital expenditure	-92	-71	-93	-96	-68	-85	-40	-70	-47	-45	-2	-6	-342	-373
Change in working capital	-453	-368	-538	-754	-394	-296	-280	-374	-142	-2	-29	-89		-1,836 -1,882
Cash flow2)	188	387	271	197	-221	-154	110	57	403	660	-142	-194	609	953
Non-cash items											-17	-36	-17	-36
Interest paid and received											-94	-93	-94	-93
Operating cash flow2)													498	824
Average number of employees		10,840 10,913	8,960	8,898		12,856 11,508	3,800	4,083		10,103 11,101	237	266		46,796 46,769

Year and 31 Dec

		EMEA		Americas	Asia Pacific		Global	Technologies	Entrance	Systems	Other			Total
SEK M	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016		2015 2016
Sales, external		16,220 16,535		15,588 16,963	9,401	8,491	9,031	9,619		17,858 19,685	0	0		68,099 71,293
Sales, internal	304	302	76	81	770	698	69	78	98	104		-1,317 -1,262	-	-
Sales					16,524 16,837 15,665 17,044 10,171 9,189				9,100 9,697 17,957 19,789				-1,317 -1,262 68,099 71,293
Organic growth	4%	3%	7%	5%	-3%	-9%	7%	3%	5%	4%	-	-	4%	2%
Share of earnings in associates	-	-	-	-	16	23	-	-	118	104	-	-	134	127
Operating income (EBIT) excl.
items affecting comparability		2,620 2,722		3,363 3,640	1,436	787		1,647 1,752		2,436 2,753	-422		-401 11,079 11,254
Operating margin (EBIT) excl.
items affecting comparability		15.9% 16.2%		21.5% 21.4%	14.1%	8.6%		18.1% 18.1%		13.6% 13.9%	-	-		16.3% 15.8%
Capital employed		12,916 13,275		13,908 15,749		11,689 11,803		9,815 11,331		16,030 18,291	-509	-98		63,848 70,351
- of which goodwill	7,857	8,348		9,903 11,012	7,690	7,920	7,437	8,784		9,891 11,480	-	-		42,777 47,544
- of which other intangible assets and
property, plant and equipment	3,210	3,296	3,184	3,516	3,908	3,900	2,300	2,499	3,939	4,282	107	125		16,649 17,618
- of which investments in associates	8	9	0	-	452	496	-	-	1,450	1,605	-	-	1,910	2,109
Return on capital employed excl.
items affecting comparability		20.4% 19.9%		24.1% 25.0%	12.6%	6.6%		18.8% 16.6%		14.9% 15.7%	-	-		17.8% 16.5%
Operating income (EBIT)	2,620	1,942	3,363	3,606	1,436	529	1,647	1,603	2,436	2,546	-422	-569	11,079	9,657
Depreciation and amortization	398	402	300	330	268	283	232	296	231	257	4	11	1,433	1,580
Net capital expenditure	-349	-472	-326	-372	-238	-211	-212	-238	-94	-157	-24	-28		-1,241 -1,478
Change in working capital	-47	-75	-120	-152	-231	705	-110	-86	63	-141	-57	-188	-502	62
Cash flow2)		2,622 2,577		3,217 3,447		1,235 1,564		1,557 1,724		2,637 2,713	-499		-607 10,770 11,418
Non-cash items											-269	-354	-269	-354
Interest paid and received											-548	-597	-548	-597
Operating cash flow2)														9,952 10,467
Average number of employees		10,886 10,835	7,957	8,961		13,651 12,481	3,583	3,907		9,686 10,505	231	240		45,994 46,928

1) Items affecting comparability consist of restructuring costs.

2) Excluding restructuring payments.

NOTE 1 SALES BY CONTINENT

	Year	Q1
SEK M	2016	2016	2017
Europe	26,869	6,256	7,041
North America	28,427	6,338	7,429
Central- and South America	2,012	441	547
Africa	923	191	229
Asia	10,573	2,118	2,255
Pacific	2,490	547	641
Total	71,293	15,891	18,142

NOTE 2 BUSINESS COMBINATIONS

	Year	Q1
SEK M	2016	2016	2017
Purchase prices
Cash paid for acquisitions during the year	2,388	844	305
Holdbacks and deferred considerations for acquisitions during the year	568	123	103
Adjustment of purchase prices for acquisitions in prior years	-91	-91	-
Total	2,866	877	408
Acquired assets and liabilities at fair value
Intangible assets	69	1	121
Property, plant and equipment	355	240	10
Financial assets	83	57	2
Inventories	251	59	35
Current receivables and investments	291	58	102
Cash and cash equivalents	263	112	25
Non-current liabilities	-233	-239	-13
Current liabilities	-665	-248	-75
Total	415	39	208
Goodwill	2,451	838	201
Change in cash and cash equivalents due to acquisitions
Cash paid for acquisitions during the year	2,388	844	305
Cash and cash equivalents in acquired subsidiaries	-263	-112	-25
Paid holdbacks and deferred considerations for acquisitions in previous years	515	246	166
Total	2,640	977	445

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 2017				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	31	31		31
Available-for-sale financial assets	11	11
Loans and other receivables	13,576	13,576
Derivative instruments - hedge accounting	80	80		80
Financial liabilities
Financial liabilities at fair value through profit and loss	2,226	2,226		102	2,125
Financial liabilities at amortized cost	27,708	27,784
Derivative instruments - hedge accounting	19	19		19

31 December 2016			Financial instruments at fair value
	Carrying	Fair
SEK M Financial assets	amount		value Level 1	Level 2	Level 3
Financial assets at fair value through profit and loss	78	78		78
Available-for-sale financial assets	11	11
Loans and other receivables	13,476	13,476
Derivative instruments - hedge accounting	88	88		88
Financial liabilities
Financial liabilities at fair value through profit and loss	2,366	2,366		116	2,250
Financial liabilities at amortized cost	28,272	28,381
Derivative instruments - hedge accounting	21	21		21

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 as a percentage of sales.

Income before tax as a percentage of sales.

See the table on operating cash flow for detailed information. For as a percentage of average parent company's shareholders relationship between operating cash flow and cash flow from equity. operating activities see the company's last Annual Report.

Investments in tangible and intangible assets less disposals of average capital employed. tangible and intangible assets.

Depreciation and amortization of intangible and tangible assets.

Total assets less interest-bearing assets and non-interest-

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

Income before tax plus net interest as a percentage of