Quarterly Report • Dec 31, 2018
Quarterly Report
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Full-year summary 2018
5 February 2019 The global leader in
door opening solutions
| Fourth quarter | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | Δ | 2017 | 2018 | Δ | |||||
| Sales, SEK M | 20,109 | 23,167 | 15% | 76,137 | 84,048 | 10% | ||||
| Of which: | ||||||||||
| Organic growth | 878 | 1,281 | 6% | 2,834 | 3,901 | 5% | ||||
| Acquisitions and disposals | 480 | 714 | 3% | 1,753 | 1,793 | 2% | ||||
| Exchange-rate effects | –733 | 1,063 | 6% | 257 | 2,217 | 3% | ||||
| Operating income (EBIT) 1) 2), SEK M | 3,359 | 3,746 | 12% | 12,341 | 12,909 | 5% | ||||
| Operating margin (EBITA) 1) 2) , % |
17.1% | 16.7% | 16.5% | 15.8% | ||||||
| Operating margin (EBIT) 1) 2), % | 16.7% | 16.2% | 16.2% | 15.4% | ||||||
| Income before tax 1) 2) , SEK M |
3,226 | 3,515 | 9% | 11,673 | 12,110 | 4% | ||||
| Net income 1) 2) , SEK M |
2,385 | 2,588 | 9% | 8,635 | 8,984 | 4% | ||||
| Operating cash flow, SEK M | 4,876 | 4,923 | 1% | 10,929 | 11,357 | 4% | ||||
| Earnings per share 1) 2), SEK | 2.15 | 2.33 | 9% | 7.77 | 8.09 | 4% |
1) Excluding impairment of goodwill and other intangible assets in the second quarter of 2018, totaling SEK –5,595 M before tax, corresponding to SEK –5,268 M after tax.
2) Excluding costs for a new manufacturing footprint program in the fourth quarter of 2018, totaling SEK –1,218 M before tax, corresponding to SEK –961 M after tax.
Organic growth
Operating income 2)
Earnings per share 2)
+9%
In the fourth quarter our organic growth accelerated to 6%, resulting in a strong organic sales growth of 5% for the full year. Acquired net growth was 3% during the quarter (2% for the full year). All divisions reported organic growth. The organic growth was very strong in Americas (14%) and Asia Pacific (11%), strong in Global Technologies (8%), while EMEA and Entrance Systems grew by 3% and 2% respectively.
Operating income for the quarter increased by 12% year-on-year to SEK 3,746 M, corresponding to an operating margin of 16.2%. The operating margin was stable in Americas and Asia Pacific, but declined in the other divisions mainly due to dilution from acquisitions and higher raw material costs.
Even with actions to balance the seasonal variations, cash flow came in strong at SEK 4,923 M, up 1% year-on-year.
One of ASSA ABLOY's value creation strategies is product leadership and we have invested in the development of electromechanical solutions over a long period. This is clearly generating results. Today, 30% of our sales are generated by electromechanical products and in the fourth quarter sales also increased by 30%. We are seeing gratifying improvements in both the commercial and residential segments.
During the quarter we closed five acquisitions with total annualized sales of SEK 0.8 billion. With the acquisition of Luxer One, we will integrate a US market leader in the last mile delivery space, including 'click and collect' at retail stores. We also acquired Lorient, extending our door sealing portfolio alongside the innovative drop-down seals and finger protection solutions from Planet. The three other acquisitions were Exidor, Marenco and Pacific Door Systems. In the full year we acquired 19 companies with annualized sales of SEK 3.8 billion.
To maintain our market leadership, we are continuously working to optimize our operations. During the quarter, we launched our seventh manufacturing footprint program. As part of the program we will close about 50 offices and factories, outsource more non-core activities and further increase automation. The restructuring cost for the total program is estimated at SEK 1.5 billion, with a payback period of less than three years. SEK 1.2 billion was expensed in the fourth quarter and the remainder is expected to be expensed in Q4 2019.
Finally, I would like to welcome our new CFO Erik Pieder, who joined ASSA ABLOY in January. Erik has a solid finance and international industrial background and I look forward to working with him on ASSA ABLOY's continued journey of profitable growth.
Stockholm, 5 February 2019
Nico Delvaux President and CEO
Sales by quarter and last 12 months
2,000 4,000 6,000 8,000 10,000 12,000 0 1,000 2,000 3,000 4,000 5,000 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SEK M Operat ing cash f low by quarter and last 12 months
2018 Operating cash flow, quarter Operating cash flow, 12 months
2017
The Group's sales increased by 15% to SEK 23,167 M (20,109). Organic growth amounted to 6% (5). Acquisitions and disposals were 3% (3), of which 4% (5) were acquisitions and –1% (–2) were disposals. Exchange-rates affected sales by 6% (–5).
The Group's operating income, EBIT, excluding items affecting comparability, amounted to SEK 3,746 M (3,359) an increase of 12%. The corresponding operating margin was 16.2% (16.7). Exchange-rates had an impact of SEK 190 M (–130) on EBIT. Operating income before amortization from acquisitions, EBITA, excluding items affecting comparability, amounted to SEK 3,858 M (3,446). The corresponding EBITA margin was 16.7% (17.1).
Net financial items amounted to SEK –230 M (–133). The Group's income before tax, excluding items affecting comparability, was SEK 3,515 M (3,226), an increase of 9% compared with last year. The corresponding profit margin was 15.2% (16.0). Exchange-rates had an impact of SEK 187 M (–130) on income before tax.
The effective tax rate, excluding items affecting comparability, was 25.8% (26.0) on an annual basis. Earnings per share excluding items affecting comparability amounted to SEK 2.33 (2.15), an increase of 9% compared to last year.
The Group's sales for the full year 2018 totaled SEK 84,048 M (76,137), representing an increase of 10%. Organic growth was 5% (4). Acquisitions and disposals were 2% (2), of which 4% (3) were acquisitions and –2% (–1) were disposals. Exchange-rate effects affected sales by 3% (1).
The Group's operating income, EBIT, excluding items affecting comparability amounted to SEK 12,909 M (12,341), an increase of 5% compared with last year. The corresponding operating margin was 15.4% (16.2). Operating income before amortization from acquisitions, EBITA, excluding items affecting comparability amounted to SEK 13,302 M (12,584). The corresponding EBITA margin was 15.8% (16.5).
Earnings per share excluding items affecting comparability amounted to SEK 8.09 (7.77), an increase of 4% compared with last year. Operating cash flow totaled SEK 11,357 M (10,929).
A new manufacturing footprint program was launched at year-end 2018. The closing of more than 30 offices and 15 factories is expected to take place over a period of three years. The estimated cost of the manufacturing footprint program amounts to about SEK 1,500 M, with an expected payback time (inclusive of investments) of less than three years. The restructuring cost will be expensed over two years, of which SEK 1,218 M was expensed in the fourth quarter of 2018 and the remaining part is expected to be expensed in the fourth quarter 2019.
Payments related to all programs amounted to SEK 351 M (286) in the quarter. The manufacturing footprint programs proceeded according to plan and led to a reduction in personnel of 962 people during the quarter and 15,362 people since the projects began in 2006. At the end of the quarter provisions of SEK 1,190 M remained in the balance sheet for carrying out the programs.
Maria Romberg Ewerth has been appointed Chief Human Resources Officer and member of the Group Executive Team in ASSA ABLOY effective 1 February 2019. She has worked at ASSA ABLOY since 2008 and in recent years has held the position of SVP Human Resources ASSA ABLOY AB. Maria Romberg Ewerth holds an MBA from Blekinge Institute of Technology and a Bachelor's Degree in Human Resources from Kristianstad University, Sweden.
Sales for the quarter in EMEA totaled SEK 5,485 M (4,869), with organic sales growth of 3% (5). The growth was strong in Finland, Germany, the UK and Africa/Middle East and good in Eastern Europe. Sales also grew in Benelux, Scandinavia and South Europe while there was a small decline in France. Acquired growth net was 5%. Operating income excluding restructuring costs totaled SEK 911 M (842), which represents an operating margin (EBIT) of 16.6% (17.3). Return on capital employed amounted to 20.6% (22.9). Operating cash flow before interest paid totaled SEK 1,323 M (1,489).
Sales for the quarter in Americas totaled SEK 5,173 M (4,243), with organic sales growth of 14% (4). The growth was very strong for US Residential, Electromechanical & High-security and Security doors. Sales were strong in Mexico, Chile and for US Architectural Hardware, while sales were stable in the other South American markets, Canada and for US Perimeter Protection. The demand for electromechanical products in the US in general, and for smart locks in particular, continued to be very strong. Acquired growth net was 0%. Operating income excluding restructuring costs totaled SEK 1,027 M (847), which represents an operating margin (EBIT) of 19.9% (19.9). Return on capital employed amounted to 22.4% (21.6). Operating cash flow before interest paid totaled SEK 1,214 M (1,085).
Sales for the quarter in Asia Pacific totaled SEK 2,756 M (2,400), with organic sales growth of 11% (3). The growth was very strong in Japan, India and South East Asia. The growth was also driven by very strong intra-group sales. There was good sales growth in South Korea and China, while the growth in Pacific was stable. The new organization in China was established at the end of 2018 and the implementation of the strategy is ongoing. Electromechanical products continued to grow strongly. Acquired growth was 0%. Operating income excluding restructuring costs totaled SEK 264 M (232), which represents an operating margin (EBIT) of 9.6% (9.7). Return on capital employed amounted to 13.5% (7.5). Operating cash flow before interest paid totaled SEK 606 M (742).
Sales for the quarter in Global Technologies totaled SEK 3,602 M (2,835), with organic sales growth of 8% (9). The growth was driven by very strong development in Identity & Access Solutions and Secure Issuance. Sales growth for Physical Access Control was strong. Sales growth for Extended Access and Identification Technology was good, while growth was negative for Citizen ID. ASSA ABLOY Global Solutions grew strongly. Acquired growth net was 11%. Operating income excluding restructuring costs totaled SEK 716 M (608), which represents an operating margin (EBIT) of 19.9% (21.5). Return on capital employed amounted to 15.3% (17.5). Operating cash flow before interest paid totaled SEK 947 M (791).
Sales for the quarter in Entrance Systems totaled SEK 6,616 M (6,072), with organic growth of 2% (3). The sales growth in the quarter was negatively affected by one percentage point due to a change in the sales cut-off procedure in one business area. This has no impact on the full year's sales growth. US Residential Doors grew strongly, while Industrial Doors and Pedestrian Doors reported good growth. Sales for Door Components were stable, while High Performance Doors and Residential Doors in Europe had a negative development. Acquired growth was 1%. Operating income excluding restructuring costs totaled SEK 998 M (966), which represents an operating margin (EBIT) of 15.1% (15.9). Return on capital employed amounted to 18.8% (20.2). Operating cash flow before interest paid totaled SEK 1,224 M (1,174).
A total of five acquisitions were consolidated during the quarter. The combined acquisition price for the businesses acquired during the year, including adjustments from prior-year acquisitions, amounted to SEK 6,752 M. The acquisition price for these companies on a cash and debt free basis amounted to SEK 7,300 M. Preliminary acquisition analyses indicate that goodwill and other intangible assets with indefinite useful life amount to SEK 5,329 M. Estimated deferred considerations amounted to SEK 1,150 M.
On December 17 it was announced that ASSA ABLOY had acquired Lorient, a leading designer and manufacturer of high performance door sealing systems based in the UK. The company has about 135 employees and its sales in 2018 are expected to amount to SEK 220 M.
On December 19 it was announced that ASSA ABLOY had acquired Luxer One, a leading US supplier of advanced locker systems for receiving packages. The company has about 130 employees and its sales in 2018 are expected to amount to SEK 335 M.
On December 20 it was announced that ASSA ABLOY had acquired Pacific Door Systems, a leading manufacturer of commercial door and window systems in New Zealand. The company has about 80 employees and its sales in 2018 are expected to amount to SEK 125 M.
Reduction of the Group's water consumption is a prioritized activity. The greatest volume of water consumption is related to industrial processes in the Group's factories. New technology is continually being introduced with the aim of decreasing both water consumption and costs. Several units have recently introduced solutions for the cleaning and circulation of process water so that it can be reused in the same process or in other processes. Improved systems for measurement and control are also contributing to reduced consumption.
In the manufacturing of tubes for fences at Ameristar Perimeter Security's factory in Tulsa, USA, water is used for cooling. By introducing a system for efficient cleaning and smart control of the pH-value, the water can be reused in a closed loop system. Only the water that evaporates during the cooling process needs to be replaced. The new process reduces the annual water consumption by 1,300 cubic meters. The cost is reduced by USD 200,000 per year, primarily by eliminating the external cost of handling and cleaning the contaminated water.
The Sustainability Report for 2018, with reviews of the Group's targets and other information about sustainable development, will be available from 21 March 2019 on the company's website, www.assaabloy.com.
Other operating income for the Parent company ASSA ABLOY AB totaled SEK 4,750 M (4,063) for the full year. Operating income for the same period amounted to SEK 1,801 M (1,701). Investments in tangible and intangible assets totaled SEK 115 M (3,291). Liquidity is good and the equity ratio was 41.6% (43.0).
The Board of Directors proposes a dividend of SEK 3.50 (3.30) per share for the 2018 financial year, an increase of 6%. The Annual General Meeting will be held on 25 April 2019. The Annual Report for 2018 will be available from 21 March 2019 on the company's website, www.assaabloy.com.
ASSA ABLOY applies International Financial Reporting Standards (IFRS) as endorsed by the European Union. The same accounting and valuation principles as in the latest Annual Report have been applied, with the exception of new and changed Standards and interpretations that came into force on 1 January 2018 and are described briefly on page 17. This Report was prepared in accordance with IAS 34 'Interim Financial Reporting' and the Annual Accounts Act. The Report for the Parent company was prepared in accordance with the Annual Accounts Act and RFR 2 'Reporting by a Legal Entity'.
From 1 January 2019 ASSA ABLOY will apply IFRS 16 'Leases' and IFRIC 23 'Uncertainty over Income Tax Treatments'. The financial effects of applying these standards are described in more detail on page 17.
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 18 of this 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.
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 2017 Annual Report.
The Company's Auditors have not carried out any review of this Report for the fourth quarter of 2018.
Stockholm, 5 February 2019
Nico Delvaux President and CEO
The Quarterly Report for the first quarter of 2019 will be published on 25 April 2019.
The Annual General meeting will be held on 25 April 2019 at the Museum of Modern Art in Stockholm, Sweden.
Nico Delvaux, President and CEO, Tel: +46 8 506 485 82
Erik Pieder, Chief Financial Officer, Tel: +46 8 506 485 72
ASSA ABLOY is holding a telephone and web conference at 10.00 today which can be followed on the Internet at www.assaabloy.com.
It is possible to submit questions by telephone on: +46 8–519 993 83, +44 333 300 9261 or +1 646 722 4957
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 5 February 2019.
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. 02/2019
| CONSOLIDATED INCOME STATEMENT | Q4 | Q1-Q4 | ||||
|---|---|---|---|---|---|---|
| SEK M | 2017 | 2018 | 2017 | 2018 | ||
| Sales | 20,109 | 23,167 | 76,137 | 84,048 | ||
| Cost of goods sold | -12,185 | -14,573 | -46,148 | -51,345 | ||
| Gross income | 7,924 | 8,594 | 29,988 | 32,703 | ||
| Selling, administrative and R&D costs | -4,608 | -6,101 | -17,777 | -21,178 | ||
| Impairment of goodwill and other intangible assets | - | - | - | -5,595 | ||
| Share of earnings in associates | 43 | 35 | 129 | 167 | ||
| Operating income | 3,359 | 2,528 | 12,341 | 6,096 | ||
| Finance net | -133 | -230 | -668 | -799 | ||
| Income before tax | 3,226 | 2,297 | 11,673 | 5,297 | ||
| Tax on income | -842 | -670 | -3,038 | -2,542 | ||
| Net income for the period | 2,385 | 1,627 | 8,635 | 2,755 | ||
| Net income for the period attributable to: | 2,384 | 1,627 | 8,633 | 2,753 | ||
| Parent company's shareholders | 1 | 0 | 2 | 2 | ||
| Non-controlling interests | ||||||
| Earnings per share | ||||||
| Before and after dilution, SEK | 2.15 | 1.46 | 7.77 | 2.48 | ||
| Before and after dilution and excluding items affecting comparability, SEK | 2.15 | 2.33 | 7.77 | 8.09 | ||
| STATEMENT OF COMPREHENSIVE INCOME | Q4 | Q1-Q4 | ||||
| SEK M Net income for the period |
2017 2,385 |
2018 1,627 |
2017 8,635 |
2018 2,755 |
||
| Other comprehensive income: | ||||||
| Items that will not be reclassified to profit or loss | ||||||
| Actuarial gain/loss on post-employment benefit obligations, net after tax | -41 | 0 | -51 | 6 | ||
| Total | -41 | 0 | -51 | 6 | ||
| Items that may be reclassified subsequently to profit or loss | ||||||
| Share of other comprehensive income of associates | 58 | 21 | 50 | 87 | ||
| Cashflow hedges and net investment hedges | 57 | -6 | 26 | -14 | ||
| Exchange rate differences | 889 | 207 | -1,864 | 2,089 | ||
| Total | 1,003 | 222 | -1,788 | 2,163 | ||
| Total comprehensive income for the period | 3,347 | 1,848 | 6,796 | 4,923 | ||
| Total comprehensive income for the period attributable to: | ||||||
| Parent company's shareholders | 3,346 | 1,849 | 6,794 | 4,923 | ||
| Non-controlling interests | 1 | -1 | 2 | 1 |
| CONSOLIDATED BALANCE SHEET | 31 Dec | |
|---|---|---|
| SEK M | 2017 | 2018 |
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | 61,409 | 64,861 |
| Property, plant and equipment | 8,065 | 8,189 |
| Investments in associates | 2,243 | 2,434 |
| Other financial assets | 227 | 152 |
| Deferred tax assets | 1,355 | 1,354 |
| Total non-current assets | 73,299 | 76,991 |
| Current assets | ||
| Inventories | 9,430 | 11,316 |
| Trade receivables | 13,068 | 14,496 |
| Other current receivables and investments | 3,188 | 3,227 |
| Cash and cash equivalents | 459 | 538 |
| Total current assets | 26,145 | 29,577 |
| TOTAL ASSETS | 99,444 | 106,568 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Equity attributable to Parent company's shareholders | 50,648 | 51,890 |
| Non-controlling interests | 9 | 10 |
| Total equity | 50,657 | 51,900 |
| Non-current liabilities | ||
| Long-term loans | 16,859 | 19,489 |
| Deferred tax liabilities | 2,218 | 1,764 |
| Other non-current liabilities and provisions | 5,217 | 5,030 |
| Total non-current liabilities | 24,293 | 26,283 |
| Current liabilities | ||
| Short-term loans | 6,151 | 7,594 |
| Trade payables | 7,811 | 7,893 |
| Other current liabilities and provisions | 10,531 | 12,898 |
| Total current liabilities | 24,494 | 28,385 |
| TOTAL EQUITY AND LIABILITIES | 99,444 | 106,568 |
| 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 | 8,633 | 2 | 8,635 | |||||
| Other comprehensive income | -1,839 | 0 | -1,839 | |||||
| Total comprehensive income | 6,794 | 2 | 6,796 | |||||
| Dividend | -3,332 | - | -3,332 | |||||
| Stock purchase plans | -33 | - | -33 | |||||
| Change in non-controlling interest | 0 | 3 | 3 | |||||
| Total transactions with shareholders | -3,366 | 3 | -3,363 | |||||
| Closing balance 31 December 2017 | 50,648 | 9 | 50,657 |
| Opening balance 1 January 2018 | 50,648 | 9 | 50,657 |
|---|---|---|---|
| Net income for the period | 2,753 | 2 | 2,755 |
| Other comprehensive income | 2,169 | -1 | 2,168 |
| Total comprehensive income | 4,923 | 1 | 4,923 |
| Dividend | -3,666 | - | -3,666 |
| Stock purchase plans | -15 | - | -15 |
| Total transactions with shareholders | -3,681 | - | -3,681 |
| Closing balance 31 December 2018 | 51,890 | 10 | 51,900 |
| CONSOLIDATED STATEMENT OF CASH FLOWS | Q4 | Q1-Q4 | ||
|---|---|---|---|---|
| SEK M | 2017 | 2018 | 2017 | 2018 |
| OPERATING ACTIVITIES | ||||
| Operating income | 3,359 | 2,528 | 12,341 | 6,096 |
| Depreciation and amortization | 430 | 510 | 1,688 | 1,963 |
| Impairment of goodwill and other intangible assets | - | - | - | 5,595 |
| Reversal of restructuring costs | - | 1,218 | - | 1,218 |
| Restructuring payments | -286 | -351 | -612 | -793 |
| Other non-cash items | -224 | -224 | -221 | -458 |
| Cash flow before interest and tax | 3,279 | 3,682 | 13,196 | 13,621 |
| Interest paid and received | -189 | -215 | -557 | -662 |
| Tax paid on income | 203 | -487 | -3,044 | -2,658 |
| Cash flow before changes in working capital | 3,293 | 2,979 | 9,595 | 10,302 |
| Changes in working capital | 2,061 | 1,229 | -347 | -1,076 |
| Cash flow from operating activities | 5,354 | 4,208 | 9,248 | 9,225 |
| INVESTING ACTIVITIES | ||||
| Net investments in intangible assets and property, plant and equipment | -561 | -124 | -1,975 | -1,319 |
| Investments in subsidiaries | -4,351 | -1,609 | -6,825 | -5,503 |
| Investments in associates | 0 | - | 0 | 0 |
| Disposals of subsidiaries | 40 | 13 | 139 | 395 |
| Other investments and disposals | 0 | 0 | 0 | 0 |
| Cash flow from investing activities | -4,872 | -1,719 | -8,661 | -6,427 |
| FINANCING ACTIVITIES | ||||
| Dividends | - | - | -3,332 | -3,666 |
| Acquisition of non-controlling interests | -34 | - | -130 | -229 |
| Net cash effect of changes in borrowings | -437 | -2,507 | 2,601 | 1,166 |
| Cash flow from financing activities | -471 | -2,507 | -861 | -2,728 |
| CASH FLOW FOR THE PERIOD | 11 | -18 | -274 | 70 |
| CASH AND CASH EQUIVALENTS | ||||
| Cash and cash equivalents at beginning of period | 440 | 559 | 750 | 459 |
| Cash flow for the period | 11 | -18 | -274 | 70 |
| Effect of exchange rate differences | 8 | -3 | -17 | 9 |
| Cash and cash equivalents at end of period | 459 | 538 | 459 | 538 |
| KEY RATIOS | Q1-Q4 2017 |
2018 | ||
| Return on capital employed, % | 16.6 | 7.6 | ||
| Return on capital employed excluding items affecting comparability, % | 16.6 | 16.2 | ||
| Return on shareholders' equity, % | 17.6 | 5.4 | ||
| Equity ratio, % | 50.9 | 48.7 | ||
| Interest coverage ratio, times | 19.1 | 8.0 | ||
| Total number of shares, thousands | 1,112,576 1,112,576 | |||
| Number of shares outstanding, thousands | 1,110,776 1,110,776 |
Weighted average number of outstanding shares before and after dilution, thousands 1,110,776 1,110,776 Average number of employees 47,426 48,353
31 Dec
| INCOME STATEMENT | Q1-Q4 | ||
|---|---|---|---|
| SEK M | 2017 | 2018 | |
| Operating income | 1,701 | 1,801 | |
| Income before appropriations and tax | 4,238 | 3,951 | |
| Net income for the period | 4,670 | 4,796 |
| Equity | 22,494 | 23,610 |
|---|---|---|
| Untaxed reserves | 565 | 678 |
| Non-current liabilities | 10,581 | 13,821 |
| Current liabilities | 18,679 | 18,641 |
| Total equity and liabilities | 52,319 | 56,749 |
| THE GROUP IN SUMMARY | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year |
|---|---|---|---|---|---|---|---|---|---|---|
| SEK M | 2017 | 2017 | 2017 | 2017 | 2017 | 2018 | 2018 | 2018 | 2018 | 2018 |
| Sales | 18,142 | 19,387 | 18,499 | 20,109 | 76,137 | 18,550 | 21,140 | 21,191 | 23,167 | 84,048 |
| Organic growth | 6% | 2% | 3% | 5% | 4% | 4% | 5% | 5% | 6% | 5% |
| Gross income excluding items | ||||||||||
| affecting comparability | 7,190 | 7,581 | 7,293 | 7,924 | 29,988 | 7,372 | 8,345 | 8,392 | 9,134 | 33,243 |
| Gross margin excluding items affecting comparability | 39.6% | 39.1% | 39.4% | 39.4% | 39.4% | 39.7% | 39.5% | 39.6% | 39.4% | 39.6% |
| Operating income before depr. & amort. (EBITDA) | ||||||||||
| excluding items affecting comparability | 3,208 | 3,543 | 3,488 | 3,789 | 14,029 | 3,297 | 3,407 | 3,912 | 4,256 | 14,872 |
| Operating margin (EBITDA) | 17.7% | 18.3% | 18.9% | 18.8% | 18.4% | 17.8% | 16.1% | 18.5% | 18.4% | 17.7% |
| Depreciation and amortization excl. amortization | ||||||||||
| -370 | -376 | -355 | -344 | -1,444 | -376 | -400 | -396 | -397 | -1,570 | |
| attributable to business combinations | ||||||||||
| Operating income before amortization (EBITA) | ||||||||||
| excluding items affecting comparability | 2,839 | 3,168 | 3,132 | 3,446 | 12,584 | 2,921 | 3,007 | 3,516 | 3,858 | 13,302 |
| Operating margin (EBITA) | 15.6% | 16.3% | 16.9% | 17.1% | 16.5% | 15.7% | 14.2% | 16.6% | 16.7% | 15.8% |
| Amortization attributable to business combinations | -52 | -54 | -52 | -87 | -244 | -92 | -97 | -91 | -113 | -393 |
| Operating income (EBIT) | ||||||||||
| excluding items affecting comparability | 2,787 | 3,114 | 3,080 | 3,359 | 12,341 | 2,829 | 2,911 | 3,424 | 3,746 | 12,909 |
| Operating margin (EBIT) | 15.4% | 16.1% | 16.7% | 16.7% | 16.2% | 15.3% | 13.8% | 16.2% | 16.2% | 15.4% |
| Items affecting comparability1) | - | - | - | - | - | - | -5,595 | - | -1,218 | -6,813 |
| Operating income (EBIT) | 2,787 | 3,114 | 3,080 | 3,359 | 12,341 | 2,829 | -2,685 | 3,424 | 2,528 | 6,096 |
| Operating margin (EBIT) | 15.4% | 16.1% | 16.7% | 16.7% | 16.2% | 15.3% | -12.7% | 16.2% | 10.9% | 7.3% |
| Net financial items | -195 | -170 | -171 | -133 | -668 | -175 | -191 | -203 | -230 | -799 |
| Income before tax (EBT) | 2,593 | 2,944 | 2,910 | 3,226 | 11,673 | 2,654 | -2,876 | 3,221 | 2,297 | 5,297 |
| Profit margin (EBT) | 14.3% | 15.2% | 15.7% | 16.0% | 15.3% | 14.3% | -13.6% | 15.2% | 9.9% | 6.3% |
| Tax on income | -674 | -765 | -757 | -842 | -3,038 | -690 | -344 | -838 | -670 | -2,542 |
| Net income for the period | 1,918 | 2,179 | 2,153 | 2,385 | 8,635 | 1,964 | -3,220 | 2,384 | 1,627 | 2,755 |
| Net income attributable to: | ||||||||||
| Parent company's shareholders | 1,919 | 2,178 | 2,153 | 2,384 | 8,633 | 1,964 | -3,222 | 2,384 | 1,627 | 2,753 |
| Non-controlling interests | 0 | 1 | 1 | 1 | 2 | 0 | 2 | 0 | 0 | 2 |
| OPERATING CASH FLOW | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year |
| SEK M | 2017 | 2017 | 2017 | 2017 | 2017 | 2018 | 2018 | 2018 | 2018 | 2018 |
| Operating income (EBIT) | 2,787 | 3,114 | 3,080 | 3,359 | 12,341 | 2,829 | -2,685 | 3,424 | 2,528 | 6,096 |
| Restructuring costs | - | - | - | - | - | - | - | - | 1,218 | 1,218 |
| Impairment of goodwill and other intangible assets | - | - | - | - | - | - | 5,595 | - | - | 5,595 |
| Depreciation and amortization | 421 | 429 | 407 | 430 | 1,688 | 468 | 497 | 488 | 510 | 1,963 |
| Net capital expenditure | -373 | -593 | -448 | -561 | -1,975 | -356 | -411 | -429 | -124 | -1,319 |
| Change in working capital | -1,882 | -207 | -319 | 2,061 | -347 | -2,136 | 127 | -296 | 1,229 | -1,076 |
| Interest paid and received | -93 | -198 | -77 | -189 | -557 | -122 | -220 | -105 | -215 | -662 |
| Non-cash items | -36 | 28 | 11 | -224 | -221 | -107 | -49 | -78 | -224 | -458 |
| Operating cash flow | 824 | 2,575 | 2,654 | 4,876 | 10,929 | 575 | 2,855 | 3,004 | 4,923 | 11,357 |
| Operating Cash flow/Income before tax excluding | ||||||||||
| items affecting comparability | 0.32 | 0.87 | 0.91 | 1.51 | 0.94 | 0.22 | 1.05 | 0.93 | 1.40 | 0.94 |
| CHANGE IN NET DEBT | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year |
| SEK M | 2017 | 2017 | 2017 | 2017 | 2017 | 2018 | 2018 | 2018 | 2018 | 2018 |
| Net debt at beginning of period | 23,127 | 23,339 | 24,970 | 25,180 | 23,127 | 25,275 | 27,219 | 31,454 | 31,372 | 25,275 |
| Operating cash flow | -824 | -2,575 | -2,654 | -4,876 | -10,929 | -575 | -2,855 | -3,004 | -4,923 | -11,357 |
| Restructuring payments | 84 | 136 | 106 | 286 | 612 | 173 | 166 | 103 | 351 | 793 |
| Tax paid on income | 629 | 961 | 1,656 | -203 | 3,044 | 609 | 986 | 576 | 487 | 2,658 |
| Acquisitions and divestments | 461 | 268 | 1,741 | 4,319 | 6,790 | 986 - |
1,097 3,666 |
2,610 | 1,697 | 6,390 |
| Dividend | - | 3,332 | - | - | 3,332 | |||||
| Actuarial gain/loss on post-employment benefit obligations | -34 | - | - | 3,666 | ||||||
| Exchange rate differences, etc. | 99 | -50 | -40 | -26 | -35 | 20 | -21 | -3 | -39 | |
| -104 | -590 | -590 | 608 | -676 | 787 | 1,157 | -348 | 266 | 1,862 | |
| Net debt at end of period | 23,339 | 24,970 | 25,180 | 25,275 | 25,275 | 27,219 | 31,454 | 31,372 | 29,246 | 29,246 |
| Net debt/Equity | 0.48 | 0.54 | 0.53 | 0.50 | 0.50 | 0.50 | 0.65 | 0.63 | 0.56 | 0.56 |
| NET DEBT | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||
| SEK M | 2017 | 2017 | 2017 | 2017 | 2018 | 2018 | 2018 | 2018 | ||
| Non-current interest-bearing receivables | -41 | -39 | -212 | -171 | -113 | -120 | -96 | -106 | ||
| Current interest-bearing investments including derivatives | -113 | -211 | -161 | -150 | -277 | -284 | -211 | -188 | ||
| Cash and cash equivalents | -697 | -844 | -440 | -459 | -551 | -496 | -559 | -538 | ||
| Pension provisions | 3,058 | 3,109 | 2,929 | 2,933 | 2,971 | 3,102 | 2,873 | 2,880 | ||
| Other non-current interest-bearing liabilities | 16,232 | 17,450 | 16,728 | 16,859 | 18,425 | 20,194 | 19,067 | 19,489 | ||
| Current interest-bearing liabilities including derivatives | 4,901 | 5,505 | 6,336 | 6,263 | 6,763 | 9,059 | 10,297 | 7,710 | ||
| Total | 23,339 | 24,970 | 25,180 | 25,275 | 27,219 | 31,454 | 31,372 | 29,246 | ||
| CAPITAL EMPLOYED AND FINANCING | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||
| SEK M | 2017 | 2017 | 2017 | 2017 | 2018 | 2018 | 2018 | 2018 | ||
| Capital employed | 72,333 | 71,349 | 72,477 | 75,932 | 81,139 | 79,733 | 81,412 | 81,146 | ||
| - of which goodwill | 47,438 | 46,252 | 46,573 | 50,330 | 51,956 | 50,590 | 52,169 | 53,413 | ||
| - of which other intangible assets and | ||||||||||
| property, plant and equipment | 17,595 | 17,309 | 17,032 | 19,144 | 20,019 | 19,011 | 19,052 | 19,637 | ||
| - of which investments in associates | 2,176 | 2,193 | 2,147 | 2,243 | 2,385 | 2,391 | 2,383 | 2,434 | ||
| Net debt | 23,339 | 24,970 | 25,180 | 25,275 | 27,219 | 31,454 | 31,372 | 29,246 | ||
| Non-controlling interests | 4 | 5 | 5 | 9 | 9 | 11 | 11 | 10 | ||
| Equity attributable to the Parent company´s shareholders | 48,989 | 46,374 | 47,292 | 50,648 | 53,911 | 48,268 | 50,030 | 51,890 | ||
| DATA PER SHARE | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year |
| SEK | 2017 | 2017 | 2017 | 2017 | 2017 | 2018 | 2018 | 2018 | 2018 | 2018 |
| Earnings per share before and after dilution | 1.73 | 1.96 | 1.94 | 2.15 | 7.77 | 1.77 | -2.90 | 2.15 | 1.46 | 2.48 |
| Earnings per share before and after dilution and | ||||||||||
| excluding items affecting comparability Shareholders' equity per share after dilution |
1.73 44.10 |
1.96 41.75 |
1.94 42.58 |
2.15 45.60 |
7.77 45.60 |
1.77 48.53 |
1.84 43.45 |
2.15 45.04 |
2.33 46.71 |
8.09 46.71 |
1) Items affecting comparability consist of restructuring costs and impairment of goodwill and other intangible assets.
| Q4 and 31 Dec | 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 | 4,767 | 5,409 | 4,228 | 5,151 | 2,251 | 2,438 | 2,817 | 3,579 | 6,046 | 6,590 | 0 | 0 | 20,109 23,167 | |
| Sales, internal | 102 | 76 | 16 | 22 | 150 | 317 | 18 | 23 | 26 | 26 | -310 | -465 | - | - |
| Sales | 4,869 | 5,485 | 4,243 | 5,173 | 2,400 | 2,756 | 2,835 | 3,602 | 6,072 | 6,616 | -310 | -465 | 20,109 23,167 | |
| Organic growth | 5% | 3% | 4% | 14% | 3% | 11% | 9% | 8% | 3% | 2% | - | - | 5% | 6% |
| Acquisitions and disposals | 2% | 5% | 1% | 0% | 0% | 0% | 2% | 11% | 5% | 1% | - | - | 3% | 3% |
| Exchange-rate effects | 0% | 5% | -8% | 8% | -4% | 4% | -6% | 8% | -3% | 6% | - | - | -5% | 6% |
| Share of earnings in associates | - | - | - | - | 9 | -2 | - | 3 | 34 | 33 | - | - | 43 | 35 |
| Operating income (EBIT) excl. | ||||||||||||||
| items affecting comparability | 842 | 911 | 847 | 1,027 | 232 | 264 | 608 | 716 | 966 | 998 | -136 | -171 | 3,359 | 3,746 |
| Operating margin (EBIT) excl. | ||||||||||||||
| items affecting comparability1) | 17.3% 16.6% | 19.9% 19.9% | 9.7% | 9.6% | 21.5% 19.9% | 15.9% 15.1% | - | - | 16.7% 16.2% | |||||
| Restructuring costs | - | -438 | - | -225 | - | -130 | - | -218 | - | -108 | - | -100 | - -1,218 | |
| Operating income (EBIT) | 842 | 472 | 847 | 803 | 232 | 135 | 608 | 499 | 966 | 891 | -136 | -271 | 3,359 | 2,528 |
| Operating margin (EBIT) | 17.3% | 8.6% | 19.9% 15.5% | 9.7% | 4.9% | 21.5% 13.8% | 15.9% 13.5% | - | - | 16.7% 10.9% | ||||
| Capital employed | 13,865 16,883 | 16,095 18,506 | 12,048 | 7,455 | 15,615 18,511 | 18,379 20,742 | -71 | -951 | 75,932 81,146 | |||||
| - of which goodwill | 8,571 10,709 | 11,190 13,327 | 7,752 | 3,892 | 11,121 13,245 | 11,696 12,240 | - | - | 50,330 53,413 | |||||
| - of which other intangible assets and | ||||||||||||||
| property, plant and equipment | 3,567 | 4,041 | 3,310 | 3,813 | 3,789 | 2,345 | 4,064 | 4,866 | 4,273 | 4,422 | 140 | 151 | 19,144 19,637 | |
| - of which investments in associates | 9 | 9 | - | - | 519 | 587 | 17 | 19 | 1,699 | 1,819 | - | - | 2,243 | 2,434 |
| Return on capital employed | ||||||||||||||
| excluding items affecting comparability 22.9% 20.6% | 21.6% 22.4% | 7.5% | 13.5% | 17.5% 15.3% | 20.2% 18.8% | - | - | 18.0% 18.1% | ||||||
| Operating income (EBIT) | 842 | 472 | 847 | 803 | 232 | 135 | 608 | 499 | 966 | 891 | -136 | -271 | 3,359 | 2,528 |
| Restructuring costs | - | 438 | - | 225 | - | 130 | - | 218 | - | 108 | - | 100 | - | 1,218 |
| Impairment of intangible assets | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Depreciation and amortization | 101 | 120 | 83 | 92 | 80 | 66 | 109 | 147 | 54 | 76 | 4 | 9 | 430 | 510 |
| Net capital expenditure | -175 | -139 | -123 | -88 | -61 | 150 | -92 | -67 | -106 | 33 | -4 | -13 | -561 | -124 |
| Change in working capital | 721 | 431 | 279 | 182 | 491 | 125 | 165 | 150 | 260 | 116 | 144 | 224 | 2,061 | 1,229 |
| Cash flow | 1,489 | 1,323 | 1,085 | 1,214 | 742 | 606 | 791 | 947 | 1,174 | 1,224 | 9 | 49 | 5,289 | 5,361 |
| Non-cash items | -224 | -224 | -224 | -224 | ||||||||||
| Interest paid and received | -189 | -215 | -189 | -215 | ||||||||||
| Operating cash flow | 4,876 | 4,923 |
| 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 | 17,729 19,908 | 17,873 19,737 | 8,553 | 8,875 | 10,301 11,864 | 21,681 23,665 | 0 | 0 | 76,137 84,048 | |||||
| Sales, internal | 351 | 293 | 67 | 79 | 658 | 1,074 | 72 | 87 | 100 | 97 | -1,249 -1,631 | - | - | |
| Sales | 18,081 20,201 | 17,940 19,817 | 9,211 | 9,949 | 10,373 11,951 | 21,781 23,762 | -1,249 -1,630 | 76,137 84,048 | ||||||
| Organic growth | 4% | 2% | 4% | 9% | 0% | 4% | 7% | 8% | 4% | 4% | - | - | 4% | 5% |
| Acquisitions and disposals | 3% | 5% | 1% | 1% | 0% | 1% | 0% | 4% | 6% | 1% | - | - | 2% | 2% |
| Exchange-rate effects | 0% | 5% | 0% | 0% | 0% | 3% | 0% | 3% | 0% | 4% | - | - | 1% | 3% |
| Share of earnings in associates | - | - | - | - | 25 | 17 | - | 3 | 104 | 147 | - | - | 129 | 167 |
| Operating income (EBIT) excl. | ||||||||||||||
| items affecting comparability | 2,990 | 3,256 | 3,815 | 3,941 | 934 | 492 | 1,946 | 2,387 | 3,087 | 3,358 | -432 | -525 | 12,341 12,909 | |
| Operating margin (EBIT) excl. | ||||||||||||||
| items affecting comparability1) | 16.5% 16.1% | 21.3% 19.9% | 10.1% | 4.9% | 18.8% 20.0% | 14.2% 14.1% | - | - | 16.2% 15.4% | |||||
| Restructuring costs | - | -438 | - | -225 | - | -130 | - | -218 | - | -108 | - | -100 | - -1,218 | |
| Impairment of goodwill etc | - | - | - | - | - | -5,595 | - | - | - | - | - | - | - -5,595 | |
| Operating income (EBIT) | 2,990 | 2,818 | 3,815 | 3,716 | 934 | -5,233 | 1,946 | 2,170 | 3,087 | 3,250 | -432 | -625 | 12,341 | 6,096 |
| Operating margin (EBIT) | 16.5% 13.9% | 21.3% 18.8% | 10.1% | -52.6% | 18.8% 18.2% | 14.2% 13.7% | - | - | 16.2% | 7.3% | ||||
| Capital employed | 13,865 16,883 | 16,095 18,506 | 12,048 | 7,455 | 15,615 18,511 | 18,379 20,742 | -71 | -951 | 75,932 81,146 | |||||
| - of which goodwill | 8,571 10,709 | 11,190 13,327 | 7,752 | 3,892 | 11,121 13,245 | 11,696 12,240 | - | - | 50,330 53,413 | |||||
| - of which other intangible assets and | ||||||||||||||
| property, plant and equipment | 3,567 | 4,041 | 3,310 | 3,813 | 3,789 | 2,345 | 4,064 | 4,866 | 4,273 | 4,422 | 140 | 151 | 19,144 19,637 | |
| - of which investments in associates | 9 | 9 | - | - | 519 | 587 | 17 | 19 | 1,699 | 1,819 | - | - | 2,243 | 2,434 |
| Return on capital employed | ||||||||||||||
| excluding items affecting comparability 21.4% 20.1% | 24.2% 22.5% | 7.8% | 4.8% | 14.4% 14.0% | 16.4% 16.9% | - | - | 16.6% 16.2% | ||||||
| Operating income (EBIT) | 2,990 | 2,818 | 3,815 | 3,716 | 934 | -5,233 | 1,946 | 2,170 | 3,087 | 3,250 | -432 | -625 | 12,341 | 6,096 |
| Restructuring costs | - | 438 | - | 225 | - | 130 | - | 218 | - | 108 | - | 100 | - | 1,218 |
| Impairment of intangible assets | - | - | - | - | - | 5,595 | - | - | - | - | - | - | - | 5,595 |
| Depreciation and amortization | 421 | 464 | 333 | 367 | 310 | 292 | 353 | 522 | 255 | 294 | 15 | 24 | 1,688 | 1,963 |
| Net capital expenditure | -571 | -500 | -466 | -327 | -337 | -6 | -297 | -281 | -273 | -170 | -30 | -36 | -1,975 -1,319 | |
| Change in working capital | 136 | -401 | -191 | -78 | -48 | 33 | -271 | -165 | -4 | -709 | 30 | 244 | -347 -1,076 | |
| Cash flow | 2,977 | 2,819 | 3,491 | 3,903 | 859 | 811 | 1,732 | 2,463 | 3,065 | 2,772 | -417 | -293 | 11,706 12,477 | |
| Non-cash items | -221 | -458 | -221 | -458 | ||||||||||
| Interest paid and received | -557 | -662 | -557 | -662 | ||||||||||
| Operating cash flow | 10,929 11,357 | |||||||||||||
| Average number of employees | 11,033 11,717 | 8,836 | 8,768 | 11,756 | 11,492 | 4,328 | 4,624 | 11,211 11,463 | 264 | 288 | 47,426 48,353 |
1) Items affecting comparability consist of restructuring costs and impairment of goodwill and other intangible assets.
| Sales by continent Q4 | 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 | 4,211 | 4,765 | 12 | 10 | 114 | 137 | 688 | 880 | 3,061 | 3,230 | -138 | -166 | 7,948 | 8,854 |
| North America | 141 | 166 | 3,806 | 4,718 | 143 | 288 | 1,241 | 1,689 | 2,490 | 2,831 | -114 | -234 | 7,707 | 9,458 |
| Central- and South America | 31 | 29 | 401 | 405 | 12 | 10 | 104 | 155 | 37 | 20 | -8 | -7 | 578 | 612 |
| Africa | 210 | 229 | 4 | 6 | 2 | 3 | 147 | 168 | 14 | 17 | -5 | -7 | 372 | 416 |
| Asia | 251 | 275 | 19 | 31 | 1,679 | 1,857 | 570 | 644 | 339 | 390 | -21 | -31 | 2,837 | 3,167 |
| Oceania | 25 | 21 | 1 | 3 | 450 | 460 | 84 | 66 | 131 | 128 | -25 | -19 | 667 | 660 |
| Total | 4,869 | 5,485 | 4,243 | 5,173 | 2,400 | 2,756 | 2,835 | 3,602 | 6,072 | 6,616 | -310 | -465 | 20,109 23,167 |
| Sales by continent Q1-Q4 | Global | Entrance | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EMEA | Americas | Asia Pacific | Technologies | Systems | Övrigt | Total | ||||||||
| SEK M | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 |
| Europe | 15,677 17,597 | 49 | 43 | 485 | 551 | 2,725 | 3,016 | 10,611 11,397 | -587 | -663 | 28,961 31,941 | |||
| North America | 582 | 606 | 16,160 18,071 | 563 | 923 | 4,510 | 5,718 | 9,239 10,405 | -420 | -688 | 30,635 35,036 | |||
| Central- and South America | 98 | 100 | 1,619 | 1,582 | 43 | 48 | 363 | 493 | 84 | 89 | -31 | -35 | 2,176 | 2,278 |
| Africa | 686 | 840 | 23 | 14 | 9 | 15 | 349 | 441 | 57 | 60 | -24 | -28 | 1,099 | 1,342 |
| Asia | 943 | 951 | 83 | 99 | 6,311 | 6,610 | 2,106 | 2,008 | 1,269 | 1,302 | -95 | -126 | 10,617 10,843 | |
| Oceania | 93 | 106 | 6 | 8 | 1,800 | 1,802 | 319 | 275 | 521 | 508 | -90 | -91 | 2,649 | 2,608 |
| Total | 18,081 20,201 | 17,940 19,817 | 9,211 | 9,949 | 10,373 11,951 | 21,781 23,762 | -1,249 -1,630 | 76,137 84,048 |
| Sales by product group Q4 | 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 | 2,465 | 2,646 | 1,764 | 1,959 | 1,192 | 1,298 | 9 | 3 | 4 | 2 | -154 | -164 | 5,279 | 5,744 |
| Electromechanical and electronic locks | 1,551 | 1,855 | 703 | 1,195 | 484 | 705 | 2,826 | 3,599 | 189 | 225 | -116 | -258 | 5,637 | 7,321 |
| Security doors and hardware | 770 | 899 | 1,766 | 2,005 | 721 | 749 | - | 0 | - | - | -14 | -15 | 3,243 | 3,638 |
| Entrance automation | 83 | 85 | 11 | 13 | 4 | 3 | - | - | 5,879 | 6,390 | -27 | -27 | 5,949 | 6,464 |
| Total | 4,869 | 5,485 | 4,243 | 5,173 | 2,400 | 2,756 | 2,835 | 3,602 | 6,072 | 6,616 | -310 | -465 | 20,109 23,167 |
| Sales by product group Q1-Q4 | 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 | 9,391 10,076 | 7,304 | 7,650 | 4,711 | 4,978 | 32 | 11 | 9 | 9 | -651 | -678 | 20,796 22,046 | ||
| Electromechanical and electronic locks | 5,624 | 6,605 | 2,659 | 3,876 | 1,827 | 2,332 | 10,340 11,938 | 704 | 891 | -436 | -779 | 20,717 24,863 | ||
| Security doors and hardware | 2,760 | 3,155 | 7,935 | 8,220 | 2,662 | 2,627 | - | 2 | - | - | -56 | -70 | 13,301 13,933 | |
| Entrance automation | 306 | 365 | 42 | 70 | 12 | 12 | - | - | 21,068 22,862 | -105 | -103 | 21,322 23,205 | ||
| Total | 18,081 20,201 | 17,940 19,817 | 9,211 | 9,949 | 10,373 11,951 | 21,781 23,762 | -1,249 -1,630 | 76,137 84,048 |
| Q4 | ||||
|---|---|---|---|---|
| SEK M | 2017 | 2018 | 2017 | 2018 |
| Purchase prices | ||||
| Cash paid for acquisitions during the year | 4,345 | 1,601 | 6,501 | 5,602 |
| Holdbacks and deferred considerations for acquisitions during the year | 146 | 387 | 365 | 1,152 |
| Adjustment of purchase prices for acquisitions in prior years | 14 | 0 | 18 | -2 |
| Total | 4,504 | 1,987 | 6,885 | 6,752 |
| Acquired assets and liabilities at fair value | ||||
| Intangible assets | 1,690 | 702 | 1,843 | 1,428 |
| Property, plant and equipment | 4 | 69 | 94 | 214 |
| Financial assets | 9 | 3 | 34 | 222 |
| Inventories | 70 | 92 | 232 | 555 |
| Current receivables and investments | 97 | 143 | 416 | 643 |
| Cash and cash equivalents | 3 | 72 | 187 | 437 |
| Non-controlling interests | -3 | - | -3 | - |
| Non-current liabilities | -100 | 48 | -289 | -258 |
| Current liabilities | -92 | -132 | -592 -1,521 | |
| Total | 1,678 | 996 | 1,922 | 1,720 |
| Goodwill | 2,826 | 991 | 4,962 | 5,032 |
| Change in cash and cash equivalents due to acquisitions | ||||
| Cash paid for acquisitions during the year | 4,345 | 1,601 | 6,501 | 5,602 |
| Cash and cash equivalents in acquired subsidiaries | -3 | -72 | -187 | -437 |
| Paid considerations for acquisitions in prior years | 9 | 79 | 511 | 339 |
| Total | 4,351 | 1,609 | 6,825 | 5,503 |
Fair value adjustments of acquired net assets from acquisitions made in previous periods are included in the above table.
| 31 December 2018 | Financial instruments at fair value |
||||
|---|---|---|---|---|---|
| SEK M | Carrying amount |
Fair value |
Level 1 Level 2 Level 3 | ||
| Financial assets | |||||
| Financial assets at amortized cost | 15,248 | 15,248 | |||
| Financial assets at fair value through profit and loss | 8 | 8 | |||
| Derivatives - hedge accounting | 68 | 68 | 68 | ||
| Derivatives - held for trading | 49 | 49 | 49 | ||
| Financial liabilities | |||||
| Financial liabilities at amortized cost | 34,976 | 35,006 | |||
| Financial liabilities at fair value through profit and loss | 1,899 | 1,899 | 1,899 | ||
| Derivatives - hedge accounting | 18 | 18 | 18 | ||
| Derivatives - held for trading | 99 | 99 | 99 | ||
| Financial instruments | |||||
| 31 December 2017 | at fair value | ||||
| Carrying | Fair | ||||
| SEK M | amount | value | Level 1 Level 2 Level 3 | ||
| Financial assets | |||||
| Loans and other receivables | 13,785 | 13,785 | |||
| Financial assets at fair value through profit and loss | 39 | 39 | 39 | ||
| Available-for-sale financial assets | 11 | 11 | |||
| Derivative instruments - hedge accounting | 68 | 68 | 68 | ||
| Financial liabilities | |||||
| Financial liabilities at amortized cost | 30,821 | 30,831 | |||
| Financial liabilities at fair value through profit and loss | 1,559 | 1,559 | 1,559 | ||
| Derivatives - hedge accounting | 11 | 11 | 11 | ||
| Derivatives - held for trading | 100 | 100 | 100 |
IFRS 9 addresses the classification, measurement and recognition Any rebates are allocated proportionately to all performance of financial assets and liabilities and replaces the parts of IAS 39 obligations in the contract unless there is clear evidence that that relate to these areas. With IFRS 9 a new impairment model is the rebates do not apply to all performance obligations. being implemented, based on expected credit losses rather than incurred losses. For the Group, the new model will entail a partly new ASSA ABLOY recognizes revenues when the Group fulfils process for the measurement of credit losses, but the Standard will a performance obligation by delivering a good or service to have no material impact on the Group's performance and financial a customer, i.e. when the customer acquires control over the asset. position. A performance obligation may either be fulfilled over time or at
IFRS 15 supersedes IAS 11 'Construction Contracts' and IAS 18 'Revenues' and includes a new single model for revenue a) The customer simultaneously receives and consumes the recognition related to customer contracts. The new Standard benefits provided by the Group's performance as the Group introduces a five-step model as the basis for the recognition performs of revenues from contracts with customers. The Standard b) The Group's performance creates or enhances an asset which prescribes that a company shall recognize revenues when the the customer controls as the asset is created or enhanced company fulfills a performance obligation by transferring a c) The Group's performance does not create an asset with an promised good or service to a customer. The good or service alternative use to the Group and the Group has a right to is transferred when the customer acquires control over the asset, payment for performance completed to date. which may happen either over time or at a particular point in time. In all important respects the Group's previous revenue recognition Revenues that are not recognized over time are recognized at practices conform with IFRS 15 and the new Standard will therefore a particular point in time: i.e. the time when the customer acquires have no impact on the Group's performance and financial position. control over the asset. However, additional information about the disaggregation of revenue is given in Note 1. ASSA ABLOY's revenues come mainly from sales of products.
According to the five-step model, a company should carry out the revenues. Reporting of revenues resulting from sale of the following steps of revenue recognition: Identify the customer the Group's products is made at a particular point in time when contract; Identify the performance obligations; Determine the the customer acquires control of the product – normally upon transaction price; Allocate the transaction price to the performance delivery. ASSA ABLOY also provides installation services which obligations, and finally Recognize the revenues assignable to each are recognized over time. For shorter installation contracts, of the performance obligations. revenues are in practice recognized when the installation is
At the start of a customer contract, ASSA ABLOY decides whether income over time. the goods and/or services that are promised comprise a single performance obligation or several separate performance Adjustment of opening balances in 2018 obligations. A performance obligation is defined as a distinct Since IFRS 9 and IFRS 15 have no material impacts on the promise to transfer a good or service to the customer. A promised financial reports, no new opening balance is presented in 2018. good or service is distinct if both the following criteria are met:
the customer, and contracts where the underlying asset is of low value, are to be
When setting the transaction price, which is the payment promised amounts to about SEK 3.8 billion, including liability for financial in the contract, the Group takes account of possible payment lease contracts of SEK 91 M reported in accordance with IAS 17. variations such as cash discounts, volume discounts and rights to The group has applied the cumulative catch-up approach as return goods. Payment variations are included in the transaction transition method and does not restate any comparative information. price only if it is highly probable that no significant return of revenues is expected to occur in a future period. The Group's assessment is that the new rules will have a slight
ASSA ABLOY receives advance payments from customers to year's net income is expected. a limited extent. None of the Group's customer contracts concerning the sale of goods or services is thought to incorporate IFRIC 23 Uncertainty over Income Tax Treatments contract are reported as costs at the time when they arise if 1 January 2019. At the time of the adoption the Group's uncertain the write-off period for the asset that the Group would otherwise tax positions were revalued in accordance with the new guidance,
ASSA ABLOY allocates the transaction price to each performance interpretation through a modified retroactive adoption where the obligation on the basis of a stand-alone selling price. The stand- comparative figures are not recalculated. The outcome will be the good or service separately to a customer. If a stand-alone of 2019. selling price is not directly observable, it is usually calculated either by the method of adjusted market assessment or from expected costs plus a profit margin.
a particular point in time. ASSA ABLOY recognizes the revenues
Service related to products sold provides only a limited part of completed. Revenues from service contracts are recognized as
a) the customer can benefit from the good or service either on its IFRS 16 is being adopted by the Group from 1 January 2019. From own or together with other resources that are readily available to this date, all lease contracts, except short-term contracts and lease b) the Group's promise to transfer the good or services to reported in the Group's balance sheet. According to the standard, the customer is separately identifiable from other promises in the an asset, a right-to-use relating to the leased asset, and a financial contract. liability representing the obligation to make lease payments should all be reported. The Group's total lease liability at 1 January 2019
positive impact on operating income. No significant effect on the
a significant financing component. The Group reports no contract IFRIC 23 explains how companies should judge the way in which a costs because it adopts the practical solution permitted by transaction should be valued and reported when there is uncertainty the Standard which means that moneys for paying a customer about income taxes. The Group is adopting the new guidance from have reported is no more than one year. which resulted in an increased provision of SEK 234 M for income tax uncertainties. The Group has chosen to apply the recommended alone selling price is the price at which the Group would sell reported as an adjustment to shareholders' equity in the first quarter
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 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 of intangible assets and property, plant and equipment.
Operating margin (EBITDA) Total assets less interest-bearing assets and non-interest-
Operating margin (EBITA) Shareholders' equity as a percentage of total assets.
Net income attributable to parent company's shareholders Profit margin (EBT) as a percentage of average parent company's shareholders
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
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