24 Oct 2008

ASSA ABLOY Q3 report: Good progress with continued growth

Despite a continued slowdown on all mature markets, ASSA ABLOY showed good growth in the 3rd quarter of 2008.

Despite a continued slowdown on all mature markets, ASSA ABLOY showed good growth during the third financial quarter of 2008.

“Development on the North American market was good while Europe, Australia and New Zealand continued to weaken,” said Johan Molin, President and CEO.

“On emerging markets the positive trend continued, but at a lower level than before. The restructuring program from 2006 is entering its final phase and has been a great success. At the same time, work on the new program is underway and several projects were launched during the third quarter,” Molin continued.

The Group's sales totaled SEK 8,722 M (8,274), representing growth of 5% compared with 2007. In local currencies the increase amounted to 7% (11), of which organic growth for comparable units was 1% (7) while acquired units accounted for 6% (4) of the increase. Exchange-rate effects had a negative impact of SEK 133 M (i.e. 2%) on sales.

Operating income excluding restructuring costs and before depreciation, EBITDA, amounted to SEK 1,669 M (1,625), a rise of 3% compared with 2007. The EBITDA margin was 19.1% (19.6). The Group's operating income, EBIT, excluding restructuring costs amounted to SEK 1,435 M (1,404), a rise of 2%, after negative currency effects of SEK 27 M. The operating margin excluding restructuring costs was 16.5% (17.0).

 

ENTRANCE SYSTEMS

Entrance Systems division reported sales of SEK 766 M (747) in the third quarter, representing organic growth of 1%. Acquired growth amounted to 3%. Sales of new installations on the mature markets of Europe, North America, Australia and New Zealand were weak because demand from the retail sector diminished. Sales in China were affected negatively by the Olympic Games.

On the service side, however, several major contracts were received, mostly in the USA. Operating income excluding restructuring costs amounted to SEK 110 M (109), giving an operating margin (EBIT) of 14.3% (14.6). Operating income was positively effected by price increases made, but diminished by a growing price pressure on larger orders. Return on capital employed excluding restructuring costs amounted to 13.5% (13.7). Operating cash flow before interest paid totaled SEK 61 M (41).

For the complete 3rd quarter financial report, visit www.assaabloy.com.