STOCKHOLM, Feb. 6, 2020 /PRNewswire/ --
Fourth
quarter
- Net sales increased by 8% to SEK 24,946
M (23,167), with organic growth of 1% (6) and acquired net
growth of 3% (3)
- Strong organic growth in Americas, good growth in Global
Technologies and stable in EMEA and Entrance Systems, while sales
declined in Asia Pacific
- Two acquisitions signed with expected combined annual sales of
SEK 800 M
- Tax decision in Finland
reconsidered to ASSA ABLOY's disadvantage. Estimated tax exposure
of SEK 920 M, but no material effect
on the Group's net income
- Operating income1 (EBIT) increased by 8% and
amounted to SEK 4,047 M (3,746),
corresponding to an operating margin of 16.2% (16.2)
- Net income1 amounted to SEK
2,767 M (2,588)
- Earnings per share1 amounted to SEK 2.49 (2.33)
- Operating cash flow increased by 6% to SEK 5,235 M (4,923)
- The Board of Directors proposes a dividend of SEK 3,85 (3.50) per share for 2019
Sales and income
|
Fourth
quarter
|
|
|
|
January-December
|
|
|
2018
|
2019
|
|
Δ
|
|
2018
|
2019
|
Δ
|
Sales, SEK
M
|
23,167
|
24,946
|
|
8%
|
|
84,048
|
94,029
|
12%
|
Of which:
|
|
|
|
|
|
|
|
|
Organic
growth
|
1,281
|
147
|
|
1%
|
|
3,901
|
2,652
|
3%
|
Acquisitions and
divestments
|
714
|
760
|
|
3%
|
|
1,793
|
3,063
|
3%
|
Exchange-rate
effects
|
1,063
|
872
|
|
4%
|
|
2,217
|
4,265
|
6%
|
Operating income
(EBIT)1 2, SEK
M
|
3,746
|
4,047
|
|
8%
|
|
12,909
|
14,920
|
16%
|
Operating margin
(EBITA)1 2, %
|
16.7%
|
16.8%
|
|
|
|
15.8%
|
16.4%
|
|
Operating margin
(EBIT)1 2,
%
|
16.2%
|
16.2%
|
|
|
|
15.4%
|
15.9%
|
|
Income before
tax1 2, SEK M
|
3,515
|
3,779
|
|
8%
|
|
12,110
|
13,883
|
15%
|
Net income1
2, SEK M
|
2,588
|
2,767
|
|
7%
|
|
8,984
|
10,243
|
14%
|
Operating cash flow,
SEK M
|
4,923
|
5,235
|
|
6%
|
|
11,357
|
14,442
|
27%
|
Earnings per
share1 2, SEK
|
2.33
|
2.49
|
|
7%
|
|
8.09
|
9.22
|
14%
|
1Excluding costs for a restructuring program launched
in 2018 , totaling SEK -312 M before
tax in Q4 2019 and -1,218 M before
tax in Q4 2018, corresponding to SEK -1,208
M after tax in total
2Excluding impairment of goodwill and other intangible
assets in Q2 2018, totaling SEK -5,595
M before tax, corresponding to SEK
-5,268 M after tax.
Comments by the President and CEO
Lower organic growth with strong profit and cash
flow
In the fourth quarter, total sales grew by 8%, driven by organic
growth of 1%, acquired net growth of 3% and positive currency
effects of 4%. Organic growth was strong in Americas (5%) and good
in Global Technologies (2%). EMEA (1%) and Entrance Systems (0%)
reported stable growth, while organic sales growth in Asia Pacific was negative (-10%).
Operating income increased by 8% to SEK
4,047 M, which is the first time we have exceeded
SEK 4bn in a single quarter. The
operating margin was unchanged at 16.2%. The operating leverage was
strong due to lower raw material costs, together with mix and
efficiency improvements, but this was offset by higher acquisition
and integration costs. Operating cash flow improved by 6% to a
record high SEK 5,235 M, driven by
the improved earnings and positive evolution from working capital.
Our cash conversion in the quarter was strong at 139%.
For the full year 2019, total sales grew by 12%, driven by an
organic growth of 3%, net acquisitions of 3% and positive currency
effects of 6%. The operating income reached SEK 14,920 M with an improved operating margin of
15.9% (15.83) excluding items affecting comparability.
Operating cash flow was at a record high SEK
14,442 M.
Stable development in the fourth quarter
Market conditions continued to be mixed during the quarter. New
construction indices have remained unchanged in several important
markets and geopolitical challenges continue to be a concern.
Despite very tough comparable sales, the Americas division
developed strongly, supported by good demand in the commercial and
institutional markets. Markets conditions in Europe were mixed with good growth in
Scandinavia and Germany, while the
UK and Finland were weak.
Asia Pacific's negative
development was driven by lower intra group sales and a weak
South Korea due to low domestic
construction activity. The implementation of our new strategy in
China with a more selective sales
approach has also had a negative effect on our sales in the short
term.
Global Technologies growth was lower due to delayed projects in
HID, but Global Solutions performed strongly. Entrance Systems had
good growth in service, while sales growth for equipment was
slightly negative. During the quarter we announced our new
organizational setup for Entrance Systems, which creates four
business segments and will become effective in the first
quarter.
Acquisitions to drive growth in 2020
Looking into 2020, acquisitions will be a main growth driver once
we have consolidated agta record and the AM Group. Because of these
businesses current margin levels and their size, our Group
operating margin will be diluted. However, as we integrate these
highly complementary businesses, they will over time create
significant value and margins will improve gradually.
Finally, I would like to thank you for your trust and look
forward to a new decade with great opportunities for ASSA
ABLOY.
Nico Delvaux
President and CEO
3Excluding write-down of operating assets in
China of SEK -400 M in Q2 2018.
Further information can be obtained from:
Nico Delvaux,
President and CEO, tel. no: +46-8-506-485-82
Erik Pieder,
Executive Vice President and CFO, tel.no: +46-8-506-485-72
ASSA ABLOY is holding a telephone and web conference at
09.30 on 6 February
2020
which can be followed on the Internet at www.assaabloy.com.
It is possible to submit questions by telephone on:
+46-8-505-583-53, +44-333-300-9272 or +1-646-722-4904
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 6 February 2020.
This information was brought to you by Cision
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