ASSA ABLOY

Earnings Release • Oct 21, 2016

The global leader in door opening solutions

Stable progress for ASSA ABLOY during the quarter

Third quarter

• Sales totaled SEK 18,025 M (17,465), with 2% (3) organic growth and 2% (4) acquired growth
• Strong growth for Global Technologies and Americas
• Good growth for Entrance Systems and growth for EMEA
• Negative growth for Asia Pacific due to weak demand in China
• Trojan in the UK was acquired, with expected annual sales of SEK 220 M
• Operating income (EBIT) was SEK 3,020 M (2,970). The operating margin was 16.8% (17.0)
• Net income amounted to SEK 2,122 M (2,069)
• Earnings per share amounted to SEK 1.91 (1.86)
• Operating cash flow increased by 1% to SEK 2,830 M (2,816)

Organic growth

+2%

Operating income

Earnings per share

	Third quarter			January-September
	2015	2016	Δ	2015	2016	Δ
Sales, SEK M	17,465	18,025	3%	49,799	51,809	4%
Of which:
Organic growth	471	307	2%	1,807	1,308	3%
Acquisitions and divestments	606	429	2%	1,435	1,512	3%
Exchange-rate effects	1,661	-176	-1%	5,561	-810	-2%
Operating income (EBIT), SEK M	2,970	3,020	2%	8,041	8,340	4%
Operating margin (EBIT), %	17.0%	16.8%		16.1%	16.1%
Income before tax, SEK M	2,796	2,844	2%	7,531	7,782	3%
Net income, SEK M	2,069	2,122	3%	5,573	5,786	4%
Operating cash flow, SEK M	2,816	2,830	1%	5,327	5,846	10%
Earnings per share (EPS), SEK	1.86	1.91	3%	5.02	5.21	4%

Sales and income

Comments by the President and CEO

"The third quarter of the year showed satisfactory growth for ASSA ABLOY generally, with the exception of Asia Pacific," says Johan Molin, President and CEO. "In general the mature markets made good progress while the growth markets continued to show subdued demand, apart from Latin America and India.

"In Global Technologies and Americas there was strong growth during the quarter, driven by successful marketing efforts and the launch of innovative new products. Entrance Systems showed good growth. EMEA showed growth despite some impact from a negative calendar effect. Growth in Asia Pacific remained negative because of the weak demand in China.

"The organic growth was rather weaker this quarter and amounted to 2%. Operating income remained strong and the operating margin was 16.8% (17.0).

"A number of major exhibitions have taken place during the quarter, with gratifying results. The Group's innovations have once again been honored by the award of several prestigious prizes. The launches of The Security Continuum (a platform-independent series of commercial electronic locks) and Accentra (a cloud-based electronic system for multi-family buildings) were especially acclaimed. Another interesting new series of products that was launched was HID Global's virtual authentication and identification solutions, by which, for example, future driver's licenses can be securely stored on an ordinary smartphone.

"The English company Trojan was acquired during the quarter. The company is a typical example of a complementary acquisition providing high synergies, by which the company's specialized door and window products allow us to offer the British market complete lock and fittings solutions with good profitability.

"Operating income for the quarter amounted to SEK 3,020 M, with an operating margin of 16.8%, mainly due to positive organic growth, lower raw-material costs and other significant savings. Operating cash flow remained strong.

"My judgment is that the global economic trend remains weak, but with a positive trend in America and parts of Europe. Elsewhere, many of the emerging markets are stagnating. However, our strategy of expanding on the emerging markets remains unchanged, since in the long term they are expected to achieve very good economic growth. We are also continuing our investments in new products, especially in the growth area of electromechanics."

Operating cash flow, 12 months

Third quarter

The Group's sales totaled SEK 18,025 M (17,465). Organic growth amounted to 2% (3). Acquired units contributed 2% (4). Exchange-rate effects had an impact of SEK -176 M (1,661) on sales, equivalent to -1% (12). Operating income before depreciation and amortization, EBITDA, amounted to SEK 3,425 M (3,330). The corresponding EBITDA margin was 19.0% (19.1).

The Group's operating income, EBIT, amounted to SEK 3,020 M (2,970) a rise of 2%. The operating margin was 16.8% (17.0). Adjustment of financial reporting from prior periods for the Chinese operations affected operating income by SEK -260 M. The reversal of deferred acquisition payments in primarily China has been recognized as income of SEK 268 M since the payments are not expected to take place.

Net financial items amounted to SEK -175 M (-174). The Group's income before tax was SEK 2,844 M (2,796), an increase of 2% compared with last year. Exchange-rate effects had an impact of SEK 1 M (220) on income before tax. The profit margin was 15.8% (16.0). The estimated underlying effective tax rate on an annual basis was 26% (26). Earnings per share amounted to SEK 1.91 (1.86), an increase of 3% compared with last year.

First nine months of the year

The Group's sales for the first nine months of 2016 totaled SEK 51,809 M (49,799), representing an increase of 4%. Organic growth was 3% (4). Acquired units contributed 3% (3). Exchange-rate effects affected sales by SEK -810 M (5,561), equivalent to -2% (14), compared with last year.

Operating income before depreciation and amortization, EBITDA, amounted to SEK 9,517 M (9,106). The corresponding margin was 18.4% (18.3). The Group's operating income, EBIT, amounted to SEK 8,340 M (8,041), which was an increase of 4% compared with last year. The corresponding EBIT operating margin was 16.1% (16.1).

Earnings per share amounted to SEK 5.21 (5.02), a rise of 4% compared with last year. Operating cash flow totaled SEK 5,846 M (5,327).

Restructuring measures

The planning of a new restructuring program has proceeded during the year. The launch is scheduled for the fourth quarter. The closing of about fifty offices and factories is expected to take place over a period of three years. The cost of the restructuring is estimated to amount to just over SEK 1,500 M, with a payback time (inclusive of investments) of less than three years.

Payments related to all currently existing restructuring programs amounted to SEK 61 M in the quarter. The restructuring programs proceeded according to plan and led to a reduction in personnel of 560 people during the quarter and 11,916 people since the projects began in 2006. At the end of the quarter provisions of SEK 339 M remained in the balance sheet for carrying out the programs.

Comments by division

EMEA

Sales for the quarter in EMEA division totaled SEK 4,042 M (4,100), with organic growth of 2% (5). The markets in Scandinavia, Britain and Israel showed strong growth. Germany, Iberia, Benelux and Italy showed good growth. France, Finland, eastern Europe and Africa showed negative growth. The positive trend for electromechanical products continued. Acquired/disposed growth amounted to -2% (5). Operating income totaled SEK 673 M (676), which represented an operating margin (EBIT) of 16.7% (16.5). Return on capital employed amounted to 18.5% (18.3). Operating cash flow before interest paid totaled SEK 402 M (642).

Americas

Sales for the quarter in Americas division totaled SEK 4,422 M (4,064), with organic growth of 5% (6). Growth was strong for Security doors, Electromechanical products, Mexico and South America, apart from Brazil which showed negative growth. The Residential market, High-security products and Canada showed good growth. Traditional lock products showed growth. Acquired growth amounted to 3% (2). Operating income totaled SEK 959 M (884), which represented an operating margin (EBIT) of 21.7% (21.8). Return on capital employed amounted to 25.9% (25.5). Operating cash flow before interest paid totaled SEK 1,018 M (944).

Asia Pacific

Sales for the quarter in Asia Pacific division totaled SEK 2,486 M (2,951), with organic growth of -7% (-3). The Pacific showed good growth, while the trend was positive in Korea and stable in South-East Asia. In China demand diminished, with organic growth of -12%. Acquired growth amounted to 0% (10). Operating income totaled SEK 306 M (464), which represented an operating margin (EBIT) of 12.3% (15.7). Return on capital employed amounted to 9.8% (15.1). Operating cash flow before interest paid totaled SEK 653 M (317).

Global Technologies

Sales for the quarter in Global Technologies division totaled SEK 2,439 M (2,210), with organic growth of 7% (0). IAM Solutions, Government ID, AdvanIDe and Identification Technology (IDT) showed strong growth within HID Global. Access Control (PACS) showed good growth. Hospitality showed a stable sales level. Acquired growth amounted to 5% (0). Operating income amounted to SEK 442 M (410), which represented an operating margin (EBIT) of 18.1% (18.6). Return on capital employed amounted to 16.6% (16.3). Operating cash flow before interest paid totaled SEK 517 M (566).

Entrance Systems

Sales for the quarter in Entrance Systems division totaled SEK 4,960 M (4,494), with organic growth of 4% (6). Door automation, Amarr, High-speed doors and FlexiForce showed strong growth while growth for Industrial doors and 4Front was good. Sales weakened for Ditec and Private residential doors in Europe. Acquired growth amounted to 6% (1). Operating income totaled SEK 709 M (623), which represented an operating margin (EBIT) of 14.3% (13.9). Return on capital employed amounted to 15.2% (14.7). Operating cash flow before interest paid totaled SEK 617 M (590).

Acquisitions and disposals

A total of two minor acquisitions were consolidated during the quarter. The combined acquisition price for the companies acquired in the first nine months of the year amounted to SEK 1,687 M, and preliminary acquisition analyses indicate that goodwill and other intangible assets with indefinite useful life amount to SEK 1,196 M. The acquisition price is adjusted for acquired net debt and estimated deferred considerations. Estimated deferred considerations amount to SEK 203 M.

On 20 October it was announced that ASSA ABLOY acquired Trojan in the UK, a leading company in the door and window segment for the residential market. The company has 65 employees and its sales in 2016 are expected to amount to SEK 220 M.

The contract for the sale of the Group's Car Locks business was signed with the Japanese company Alpha Corporation in March. The transaction was completed in September 2016 after approval by the appropriate authorities. From 1 January the business was reclassified under 'Assets held for sale' in accordance with IFRS 5. As a result, sales for the year fell by SEK 424 M compared with the previous year. The disposal involves a small capital gain, which is reported as net income of disposal group classified as held for sale.

Sustainable development

Reduced energy consumption in the Group's factories and sales companies is a prioritized area for achieving a reduced environmental impact and lower costs. The improvement project is driven locally in the Group's units, often with support from Kaizen methodology to identify and prioritize different activities.

Several units have introduced improved systems to measure and control the temperature of their buildings. At the beginning of 2015 a new control system was installed at EMEA's factory in Portobello in the UK. Accurate measurement of both indoor and outdoor temperatures produces control by means of many small adjustments towards the target values for each section of the factory. The system reuses warm air in the ventilation system and automatically reduces the temperature when the factory is not in operation. The system is aware when external doors or shutters are open, and closes down the heating temporarily in order to minimize energy losses. The new system has reduced energy consumption for heating by over 30%.

A similar system was installed in February 2016 at ASSA ABLOY's factory in Cheltenham in the UK. The energy usage for heating the 5,500-square-meter premises has been reduced by over 30% this year.

Parent company

Other operating income for the Parent company ASSA ABLOY AB totaled SEK 2,428 M (1,980) for the first nine months of the year. Operating income for the same period amounted to SEK 787 M (508). Investments in tangible and intangible assets totaled SEK 196 M (18). Liquidity is good and the equity ratio was 42.3% (41.6).

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 92-97 of the 2015 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'.

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 17 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 2015 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 2015 Annual Report.

Review

The Company's Auditors have not carried out any review of this Report for the third quarter of 2016.

Stockholm, 21 October 2016

Johan Molin President and CEO

Financial information

The Year-end Report and Quarterly Report for the fourth quarter will be published on 2 February 2017.

A capital markets day will be held on 16 November 2016 in Stockholm, Sweden.

Further information can be obtained from:

Johan Molin, President and CEO, Tel: +46 8 506 485 42

Carolina Dybeck Happe, Chief Financial Officer, Tel: +46 8 506 485 72

ASSA ABLOY is holding an analysts' meeting at 10.00 today at Operaterrassen in Stockholm, Sweden.

The analysts' meeting can also be followed on the Internet at www.assaabloy.com. It is possible to submit questions by telephone on: +46 8 5055 6476, +44 203 364 5371 or +1 877 679 2993.

This information is information that ASSA ABLOY AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CET on 21 October 2016.

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. 14/2016

Financial information – Group

CONSOLIDATED INCOME STATEMENT	Q3		Q1-Q3
SEK M	2015	2016	2015	2016
Sales	17,465	18,025	49,799	51,809
Cost of goods sold	-10,707	-10,885	-30,449	-31,344
Gross income	6,758	7,139	19,349	20,465
Selling, administrative and R&D costs	-3,817	-4,151	-11,413	-12,221
Share of earnings in associates	30	31	106	97
Operating income	2,970	3,020	8,041	8,340
Financial items	-174	-175	-510	-558
Income before tax	2,796	2,844	7,531	7,782
Tax on income	-727	-739	-1,958	-2,023
Net income of disposal group classified as held for sale	-	17	-	27
Net income for the period	2,069	2,122	5,573	5,786
Net income attributable to:
Parent company's shareholders	2,069	2,122	5,573	5,786
Non-controlling interest	0	0	0	0
Earnings per share
before dilution, SEK	1.86	1.91	5.02	5.21
after dilution, SEK	1.86	1.91	5.02	5.21
STATEMENT OF COMPREHENSIVE INCOME	Q3		Q1-Q3
SEK M	2015	2016	2015	2016
Net income	2,069	2,122	5,573	5,786
Other comprehensive income: Items that will not be reclassified to profit or loss
Actuarial gain/loss on post-employment benefit obligations, net after tax	133	-71	22	-345
Total	133	-71	22	-345
Items that may be reclassified subsequently to profit or loss
Share of other comprehensive income of associates	49	29	22	138
Net investment and cashflow hedges	-42	-10	23	-15
Exchange rate differences	-388	452	697	834
Total	-382	471	742	957
Total comprehensive income for the period	1,820	2,522	6,337	6,398
Total comprehensive income attributable to:

Parent company's shareholders 1,820 2,522 6,337 6,398 Non-controlling interest 0 0 0 0

Financial information – Group

CONSOLIDATED BALANCE SHEET	31 Dec	30 Sep
SEK M	2015	2015	2016
ASSETS
Non-current assets
Intangible assets	51,863	51,581	54,386
Property, plant and equipment	7,562	7,517	7,955
Investments in associates	1,910	1,934	2,095
Other financial assets	77	78	89
Deferred tax assets	1,434	1,447	1,776
Total non-current assets	62,847	62,557	66,300
Current assets
Inventories	8,348	8,798	9,738
Trade receivables	11,775	12,204	12,759
Other current receivables and investments	2,707	3,295	3,631
Cash and cash equivalents	501	648	604
Total current assets	23,330	24,945	26,732
TOTAL ASSETS	86,177	87,502	93,032
EQUITY AND LIABILITIES
Equity
Parent company's shareholders	41,575	39,935	44,981
Non-controlling interest	4	4	4
Total equity	41,579	39,940	44,985
Non-current liabilities
Long-term loans	15,568	17,453	16,205
Deferred tax liabilities	2,031	1,768	2,163
Other non-current liabilities and provisions	6,567	7,738	6,297
Total non-current liabilities	24,166	26,959	24,664
Current liabilities
Short-term loans	4,574	5,484	6,654
Trade payables	6,553	5,749	6,560
Other current liabilities and provisions	9,305	9,370	10,169
Total current liabilities	20,432	20,603	23,383
TOTAL EQUITY AND LIABILITIES	86,177	87,502	93,032

CHANGES IN CONSOLIDATED EQUITY Equity attributable to:

	Parent	Non
	company's	controlling	Total
SEK M	shareholders	interest	equity
Opening balance 1 January 2015	36,096	2	36,098
Net income	5,573	0	5,573
Other comprehensive income	765	0	764
Total comprehensive income	6,337	0	6,337
Dividend	-2,407	-	-2,407
Stock purchase plans	-93	-	-93
Change in non-controlling interest	1	2	3
Total transactions with parent company's shareholders	-2,498	2	-2,496
Closing balance 30 September 2015	39,935	4	39,940

Opening balance 1 January 2016	41,575	4	41,579
Net income	5,786	0	5,786
Other comprehensive income	612	0	612
Total comprehensive income	6,398	0	6,398
Dividend	-2,944	-	-2,944
Stock purchase plans	-49	-	-49
Total transactions with parent company's shareholders	-2,992	-	-2,992
Closing balance 30 September 2016	44,981	4	44,985

Financial information – Group

CONSOLIDATED CASH FLOW STATEMENT	Q3		Q1-Q3
SEK M	2015	2016	2015	2016
OPERATING ACTIVITIES
Operating income	2,970	3,020	8,041	8,340
Depreciation and amortization	360	406	1,065	1,177
Restructuring payments	-80	-61	-230	-207
Other non-cash items	28	-266	-48	-309
Cash flow before interest and tax	3,278	3,098	8,828	9,001
Interest paid and received	-84	-96	-354	-418
Tax paid on income	-217	-523	-1,299	-2,299
Cash flow before changes in working capital	2,978	2,479	7,175	6,284
Changes in working capital	-115	98	-2,363	-1,877
Cash flow from operating activities	2,863	2,577	4,812	4,407
INVESTING ACTIVITIES
Net investments in intangible assets and property, plant and equipment	-344	-331	-1,014	-1,067
Investments in subsidiaries	-470	-277	-2,228	-1,739
Investments in associates	-	-	-	-1
Disposals of subsidiaries	-	102	-	53
Other investments and disposals	0	0	0	0
Cash flow from investing activities	-813	-506	-3,241	-2,753
FINANCING ACTIVITIES
Dividends	-	0	-2,407	-2,944
Acquisition of non-controlling interest	-218	-11	-975	-38
Net cash effect of changes in borrowings	-1,821	-2,028	1,774	1,419
Cash flow from financing activities	-2,039	-2,040	-1,607	-1,562
CASH FLOW	10	32	-36	92
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period	646	564	667	501
Cash flow	10	32	-36	92
Effect of exchange rate differences	-8	9	18	12
Cash and cash equivalents in disposal group held for sale	-	0	-	0
Cash and cash equivalents at end of period	648	604	648	604
KEY RATIOS		Year	Q1-Q3
		2015	2015	2016
Return on capital employed, %		17.8	17.1	16.4
Return on shareholders' equity, %		19.8	19.5	17.8

Equity ratio, %	48.2	45.6	48.4
Interest coverage ratio, times	16.7	16.7	15.9
Total number of shares at the end of period, thousands	1,112,576	1,112,576 1,112,576
Number of shares outstanding at the end of period, thousands	1,110,776	1,110,776 1,110,776
Weighted average number of outstanding shares, thousands	1,110,776	1,110,776 1,110,776
Weighted average number of outstanding shares after dilution, thousands	1,110,776	1,110,776 1,110,776
Average number of employees	45,994	45,925	46,966

Financial information – Parent company

INCOME STATEMENT	Year	Q1-Q3
SEK M	2015	2015	2016
Operating income	1,351	508	787
Income before appropriations and tax	2,193	617	1,741
Net income	2,725	530	1,617

BALANCE SHEET	31 Dec	30 Sep
SEK M	2015	2015	2016
Non-current assets	35,138	35,168	35,772
Current assets	9,410	8,257	9,573
Total assets	44,548	43,425	45,346
Equity	20,553	18,077	19,178
Non-current liabilities	8,153	9,257	8,267
Current liabilities	15,842	16,091	17,901
Total equity and liabilities	44,548	43,425	45,346

Quarterly information – Group

THE GROUP IN SUMMARY	Q1	Q2	Q3	Q4	Q1-Q3	Year	Q1	Q2	Q3	Q1-Q3	Last 12
SEK M Sales	2015 15,252	2015 17,082	2015 17,465	2015 18,301	2015 49,799	2015 68,099	2016 15,891	2015 17,894	2016 18,025	51,809	2016 months 70,110
Organic growth	5%	4%	3%	5%	4%	4%	3%	4%	2%	3%
Gross income	5,969	6,623	6,758	7,046	19,349	26,395	6,295	7,031	7,139	20,465	27,511
Gross margin	39.1%	38.8%	38.7%	38.5%	38.9%	38.8%	39.6%	39.3%	39.6%	39.5%	39.2%
Operating income before depr. & amort. (EBITDA)	2,659	3,117	3,330	3,406	9,106	12,512	2,787	3,305	3,425	9,517	12,924
Operating margin (EBITDA) Depreciation and amortization	17.4% -331	18.2% -374	19.1% -360	18.6% -368	18.3% -1,065	18.4% -1,433	17.5% -376	18.5% -395	19.0% -406	18.4% -1,177	18.4% -1,545
Operating income (EBIT)	2,329	2,742	2,970	3,038	8,041	11,079	2,411	2,910	3,020	8,340	11,379
Operating margin (EBIT)	15.3%	16.1%	17.0%	16.6%	16.1%	16.3%	15.2%	16.3%	16.8%	16.1%	16.2%
Net financial items	-145	-191	-174	-187	-510	-697	-201	-181	-175	-558	-745
Income before tax (EBT)	2,184	2,551	2,796	2,851	7,531	10,382	2,209	2,729	2,844	7,782	10,633
Profit margin (EBT)	14.3% -568	14.9% -663	16.0% -727	15.6% -731	15.1% -1,958	15.2% -2,689	13.9% -574	15.2% -709	15.8% -739	15.0% -2,023	15.2% -2,754
Tax on income Net income of disposal group classified as held for sale	-	-	-	-	-	-	3	7	17	27	27
Net income for the period	1,616	1,888	2,069	2,120	5,573	7,693	1,638	2,026	2,122	5,786	7,906
Net income attributable to:
Parent company's shareholders Non-controlling interest	1,616 0	1,888 0	2,069 0	2,120 0	5,573 0	7,693 0	1,638 0	2,026 0	2,122 0	5,786 0	7,906 0
OPERATING CASH FLOW	Q1	Q2	Q3	Q4	Q1-Q3	Year	Q1	Q2	Q3	Q1-Q3	Last 12
SEK M	2015	2015	2015	2015	2015	2015	2016	2015	2016		2016 months
Operating income (EBIT) Depreciation and amortization	2,329 331	2,742 374	2,970 360	3,038 368	8,041 1,065	11,079 1,433	2,411 376	2,910 395	3,020 406	8,340 1,177	11,379 1,545
Net capital expenditure	-344	-327	-344	-227	-1,014	-1,241	-342	-394	-331	-1,067	-1,294
Change in working capital	-1,722	-526	-115	1,861	-2,363	-502	-1,836	-139	98	-1,877	-15
Interest paid and received	-71	-200	-84	-195	-354	-548	-94	-228	-96	-418	-613
Non-cash items	-2	-74	28	-221	-48	-269	-17	-26	-266	-309	-530
Operating Cash flow	520	1,991	2,816	4,625	5,327	9,952	498	2,519	2,830	5,846	10,471
Operating Cash flow/Income before tax	0.24	0.78	1.01	1.62	0.71	0.96	0.23	0.92	0.99	0.75	0.98
CHANGE IN NET DEBT	Q1	Q2	Q3	Q4	Q1-Q3	Year	Q1	Q2	Q3	Q1-Q3
SEK M	2015	2015	2015	2015	2015	2015	2016	2016	2016	2016
Net debt at beginning of period Operating cash flow	22,327 -520	25,184 -1,991	26,579 -2,816	25,131 -4,625	22,327 -5,327	22,327 -9,952	22,269 -498	24,681 -2,519	27,122 -2,830	22,269 -5,846
Restructuring payments	90	60	80	145	230	375	95	50	61	207
Tax paid	711	371	217	948	1,299	2,247	1,298	478	523	2,299
Acquistions and disposals	978	1,536	688	959	3,202	4,161	1,345	556	145	2,045
Dividend	-	2,407	-	-	2,407	2,407	-	2,944	-	2,944
Actuarial gain/loss on post-employment benefit obligations	206	-274	70	-152	2	-150	221	186	105	511
Net debt of disposal group classified as held for sale	-	-	-	-	-	-	0	0	0	-
Exchange rate differences and other	1,392 25,184	-713 26,579	313 25,131	-136 22,269	991 25,131	855 22,269	-49 24,681	746 27,122	444 25,571	1,142 25,571
Net debt at end of period Net debt/Equity ratio	0.64	0.70	0.63	0.54	0.63	0.54	0.58	0.64	0.57	0.57
NET DEBT	Q1	Q2	Q3	Q4			Q1	Q2	Q3
SEK M	2015	2015	2015	2015			2016	2016	2016
Non-current interest-bearing receivables	-31	-29	-32	-30			-34	-36	-41
Current interest-bearing investments including derivatives	-263	-217	-265	-182			-270	-222	-168
Cash and cash equivalents	-515	-646	-648	-501			-578	-564	-604
Pension provisions Other non-current interest-bearing liabilities	3,260 16,497	2,984 16,495	2,954 17,453	2,761 15,568			3,002 15,668	3,258 15,805	3,406 16,205
Current interest-bearing liabilities including derivatives	6,235	7,992	5,669	4,653			6,893	8,881	6,773
Total	25,184	26,579	25,131	22,269			24,681	27,122	25,571
CAPITAL EMPLOYED AND FINANCING	Q1	Q2	Q3	Q4			Q1	Q2	Q3
SEK M	2015	2015	2015	2015			2016	2016	2016
Capital employed	64,699	64,689	65,070	63,848			67,124	69,449	70,555
- of which goodwill	43,092	41,818	42,404	42,777			43,098	44,387	45,077
- of which other intangible assets and
property, plant and equipment	16,324	16,512	16,693	16,649			16,613	17,036	17,264
- of which investments in associates Assets and liabilities of disposal group classified	1,890	1,901	1,934	1,910			1,970	2,037	2,095
as held for sale	-	-	-	-			111	126	-
Net debt	25,184	26,579	25,131	22,269			24,681	27,122	25,571
Non-controlling interest	2	4	4	4			4	3	4
Shareholders' equity	39,513	38,105	39,935	41,575			42,551	42,449	44,981
DATA PER SHARE	Q1	Q2	Q3	Q4	Q1-Q3	Year	Q1	Q2	Q3	Q1-Q3
SEK	2015	2015	2015	2015	2015	2015	2016	2016	2016	2016
Earnings per share after tax and before dilution Earnings per share after tax and dilution	1.45 1.45	1.70 1.70	1.86 1.86	1.91 1.91	5.02 5.02	6.93 6.93	1.47 1.47	1.82 1.82	1.91 1.91	5.21 5.21
Shareholders' equity per share after dilution	35.57	34.31	35.95	37.43	35.95	37.43	38.31	38.22	40.50	40.50

Reporting by division

Q3 and 30 Sep							Global			Entrance
		EMEA		Americas		Asia Pacific	Technologies			Systems	Other		Total
SEK M	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016
Sales, external	4,021	3,966	4,047	4,404	2,727	2,305	2,195	2,414	4,475	4,936	0	0		17,465 18,025
Sales, internal	79	75	17	17	224	181	15	25	19	24	-354	-323	-	-
Sales	4,100	4,042	4,064	4,422	2,951	2,486	2,210	2,439	4,494	4,960	-354	-323	17,465 18,025
Organic growth 2)	5%	2%	6%	5%	-3%	-7%	0%	7%	6%	4%	-	-	3%	2%
Share of earnings in associates	-	-	-	-	6	5	-	-	24	26	-	-	30	31
Operating income (EBIT)	676	673	884	959	464	306	410	442	623	709	-87	-69	2,970	3,020
Operating margin (EBIT)	16.5%	16.7%	21.8%	21.7%	15.7%	12.3%	18.6%	18.1%	13.9%	14.3%			17.0%	16.8%
Capital employed		14,237 14,241		13,239 14,589		12,016 12,578		9,902 10,813		16,715 18,598	-1,039	-264		65,070 70,555
- of which goodwill	7,949	8,071		9,447 10,400	7,847	7,810	7,395	7,791		9,767 11,005	-	-		42,404 45,077
- of which other intangible assets and
property, plant and equipment	3,243	3,279	3,112	3,325	3,995	3,928	2,253	2,386	3,987	4,238	103	108		16,693 17,264
- of which investments in associates	8	9	-	-	459	495	-	-	1,466	1,591	-	-	1,934	2,095
Return on capital employed	18.3%	18.5%	25.5%	25.9%	15.1%	9.8%	16.3%	16.6%	14.7%	15.2%	-	-	18.1%	17.1%
Operating income (EBIT)	676	673	884	959	464	306	410	442	623	709	-87	-69	2,970	3,020
Depreciation and amortization	97	97	74	97	66	72	62	72	60	63	0	5	360	406
Net capital expenditure	-98	-107	-80	-86	-77	-48	-48	-65	-30	-29	-11	4	-344	-331
Change in working capital	-33	-261	65	47	-135	323	141	68	-63	-125	-90	46	-115	98
Cash flow	642	402	944	1,018	317	653	566	517	590	617	-187	-15	2,872	3,192
Non-cash items											28	-266	28	-266
Interest paid and received											-84	-96	-84	-96
Operating cash flow1)													2,816	2,830

Q1-Q3 and 30 Sep

	Global Entrance
		EMEA		Americas		Asia Pacific	Technologies			Systems	Other		Total
SEK M	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016
Sales, external		11,874 12,056		11,625 12,616	6,968	6,251	6,544	6,948		12,788 13,938	0	0		49,799 51,809
Sales, internal	238	224	56	66	623	510	51	62	72	79	-1,042	-941	-	-
Sales	12,112 12,280		11,681 12,682		7,591	6,762	6,596	7,009	12,860 14,018		-1,042	-941	49,799 51,809
Organic growth 2)	4%	3%	6%	6%	-3%	-5%	7%	4%	5%	4%	-	-	4%	3%
Share of earnings in associates	-	-	-	-	16	14	-	-	89	83	-	-	106	97
Operating income (EBIT)	1,915	1,957	2,525	2,732	1,055	835	1,187	1,252	1,665	1,865	-307	-300	8,041	8,340
Operating margin (EBIT)	15.8%	15.9%	21.6%	21.5%	13.9%	12.3%	18.0%	17.9%	12.9%	13.3%	-	-	16.1%	16.1%
Capital employed		14,237 14,241		13,239 14,589		12,016 12,578		9,902 10,813		16,715 18,598	-1,039	-264		65,070 70,555
- of which goodwill	7,949	8,071		9,447 10,400	7,847	7,810	7,395	7,791		9,767 11,005	-	-		42,404 45,077
- of which other intangible assets and
property, plant and equipment	3,243	3,279	3,112	3,325	3,995	3,928	2,253	2,386	3,987	4,238	103	108		16,693 17,264
- of which investments in associates	8	9	-	-	459	495	-	-	1,466	1,591	-	-	1,934	2,095
Return on capital employed	19.0%	18.8%	24.7%	25.7%	12.3%	9.2%	17.5%	16.3%	13.3%	14.2%	-	-	17.1%	16.4%
	1,915	1,957	2,525	2,732	1,055	835	1,187	1,252	1,665	1,865	-307	-300	8,041	8,340
Operating income (EBIT) Depreciation and amortization	301	298	222	253	199	208	168	221	173	189	3	8	1,065	1,177
Net capital expenditure	-345	-303	-221	-282	-191	-174	-170	-173	-68	-131	-18	-4		-1,014 -1,067
Change in working capital	-657	-782	-471	-288	-697	-73	-334	-354	-114	-271	-90	-109		-2,363 -1,877
Cash flow1)	1,214	1,170	2,055	2,415	366	795	851	946	1,656	1,652	-412	-405	5,729	6,573
Non-cash items											-48	-309	-48	-309
Interest paid and received											-354	-418	-354	-418
Operating cash flow1)													5,327	5,846
Average number of employees		11,009 10,908	7,908	8,943		13,721 12,665	3,479	3,844		9,574 10,367	233	238		45,925 46,966

1) Excluding restructuring payments.

2) Comparative period adjusted for organic growth calculation 2016 Asia Pacific.

Reporting by division

Full year and 31 Dec

							Global		Entrance
		EMEA	Americas		Asia Pacific		Technologies		Systems		Other		Total
SEK M	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015
Sales, external		14,519 16,220		12,096 15,588	7,755	9,401	7,147	9,031		15,325 17,858	0	0		56,843 68,099
Sales, internal	233	304	60	76	581	770	59	69	84	98	-1,017 -1,317		-	-
Sales	14,753 16,524		12,156 15,665			8,336 10,171	7,207	9,100	15,409 17,957		-1,017 -1,317		56,843 68,099
Organic growth	3%	4%	4%	7%	1%	-3%	1%	7%	4%	5%	-	-	3%	4%
Share of earnings in associates	-	-	-	-	23	16	-	-	109	118	-	-	132	134
Operating income (EBIT)	2,432	2,620	2,613	3,363	1,187	1,436	1,368	1,647	2,054	2,436	-398	-422		9,257 11,079
Operating margin (EBIT)	16.5%	15.9%	21.5%	21.5%	14.2%	14.1%	19.0%	18.1%	13.3%	13.6%	-	-	16.3%	16.3%
Capital employed		12,299 12,916		12,909 13,908		9,810 11,689	8,239	9,815		16,245 16,030	-1,077	-509		58,425 63,848
- of which goodwill	7,247	7,857	9,000	9,903	7,931	7,690	5,984	7,437	9,615	9,891	-	-		39,778 42,777
- of which other intangible and
property, plant and equipment	3,051	3,210	2,982	3,184	3,137	3,908	1,711	2,300	4,021	3,939	87	107		14,990 16,649
- of which investments in associates	9	8	-	0	414	452	-	-	1,438	1,450	-	-	1,861	1,910
Return on capital employed	21.0%	20.4%	23.1%	24.1%	14.2%	12.6%	19.6%	18.8%	13.1%	14.9%	-	-	16.9%	17.8%
Operating income (EBIT)	2,432	2,620	2,613	3,363	1,187	1,436	1,368	1,647	2,054	2,436	-398	-422		9,257 11,079
Depreciation and amortization	351	398	237	300	183	268	182	232	212	231	-2	4	1,163	1,433
Net capital expenditure	-397	-349	-243	-326	-275	-238	-204	-212	-141	-94	-11	-24		-1,271 -1,241
Change in working capital	-98	-47	31	-120	-164	-231	-63	-110	-118	63	109	-57	-303	-502
Cash flow1)	2,288	2,622	2,637	3,217	931	1,235	1,282	1,557	2,007	2,637	-302	-499		8,845 10,770
Non-cash items											-150	-269	-150	-269
Interest paid and received											-457	-548	-457	-548
Operating cash flow1)													8,238	9,952
Average number of employees		10,678 10,886	7,193	7,957		13,439 13,651	3,331	3,583	9,420	9,686	208	231		44,269 45,994

1) Excluding restructuring payments.

Financial information - Notes

NOTE 1 SALES BY CONTINENT

	Q3		Q1-Q3
SEK M	2015	2016	2015	2016
Europe	6,159	6,397	18,465	19,332
North America	6,889	7,427	19,405	20,781
Central- and South America	377	529	1,126	1,454
Africa	219	246	627	650
Asia	3,191	2,751	8,338	7,757
Pacific	630	674	1,838	1,835
Total	17,465	18,025	49,799	51,809

NOTE 2 BUSINESS COMBINATIONS

		Q3		Q1-Q3
SEK M	2015	2016	2015	2016
Purchase prices
Cash paid for acquisitions during the period	446	216	1,763	1,388
Holdbacks and deferred considerations for acquisitions during the period	322	25	1,048	203
Adjustment of purchase prices for acquisitions in prior years	-1	0	-12	-91
Total	767	241	2,799	1,500
Acquired assets and liabilities at fair value
Intangible assets	139	67	1,257	69
Property, plant and equipment	19	-1	133	279
Financial assets	21	0	37	71
Inventories	90	14	185	101
Current receivables and investments	142	20	313	136
Cash and cash equivalents	1	5	93	146
Non-controlling interests	0	-	-3	-
Non-current liabilities	-18	-1	-429	-185
Current liabilities	-243	-16	-375	-354
Total	151	88	1,212	263
Goodwill	616	153	1,587	1,237
Change in cash and cash equivalents due to acquisitions
Cash paid for acquisitions during the period	446	216	1,763	1,388
Cash and cash equivalents in acquired subsidiaries	-1	-5	-93	-146
Paid holdbacks and deferred considerations for acquisitions in previous years	24	65	558	497
Total	470	277	2,228	1,739

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

				Financial instruments
30 September 2016			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	46	46		46
Available-for-sale financial assets	11	11
Loans and other receivables	15,460	15,460
Derivative instruments - hedge accounting	120	120		120
Financial liabilities
Financial liabilities at fair value through profit and loss	1,986	1,986		100	1,886
Financial liabilities at amortized cost	29,419	29,723
Derivative instruments - hedge accounting	18	18		18

31 December 2015			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	27	27		27
Available-for-sale financial assets	11	11
Loans and other receivables	14,219	14,219
Derivative instruments - hedge accounting	121	121		121
Financial liabilities
Financial liabilities at fair value through profit and loss	2,695	2,695		55	2,640
Financial liabilities at amortized cost	26,695	26,890
Derivative instruments - hedge accounting	25	25		25

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 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

Depreciation and amortization of intangible and tangible assets.

Capital employed

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

Equity ratio

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

Interest coverage ratio

Profit margin (EBT) Income before tax plus net interest divided by net interest.

Return on shareholders' equity

Operating cash flow Net income attributable to parent company's shareholders

Return on capital employed

Net capital expenditure Income before tax plus net interest as a percentage of