ASSA ABLOY AB An extraordinary quarter.
Second quarter
Net sales decreased by 15% to
All five divisions reported significant declines in organic growth due to COVID-19. Entrance Systems, reporting organic growth of -8%, was the division least impacted
Three acquisitions with expected combined annual sales of around
To meet a regulatory precondition by the
Operating income (EBIT) decreased by 44% and amounted to
Net income amounted to
Earnings per share amounted to
Operating cash flow amounted to
Sales and income
Second quarter First half-year
2019 2020 ? 2019 2020 ?
Sales, SEK M 23,544 19,953 -15% 45,048 42,126 -6%
Of which:
Organic growth 692 -4,198 -18% 1,698 -4,957 -11%
Acquisitions and divestments 790 654 3% 1,478 1,302 3%
Exchange-rate effects 922 -48 0% 2,182 733 2%
Operating income (EBIT), SEK M 3,733 2,097 -44% 6,978 4,848 -31%
Operating margin (EBITA), % 16.4% 11.2% 16.0% 12.2%
Operating margin (EBIT), % 15.9% 10.5% 15.5% 11.5%
Income before tax, SEK M 3,462 1,892 -45% 6,459 4,411 -32%
Net income, SEK M 2,562 1,400 -45% 4,780 3,264 -32%
Operating cash flow, SEK M 3,636 3,418 -6% 4,807 4,624 -4%
Earnings per share,
Comments by the President and CEO
An extraordinary quarter
The development of the Covid-19 outbreak has led to an extraordinary situation with more than half of the world population in some form of lockdown during most of the quarter. Our organic sales growth declined by -18%, currency effects were neutral, while net acquired growth was positive at 3%, resulting in a net sales decline of -15%. As a result of the lockdowns, organic sales growth decreased in all divisions with the largest effects in EMEA and Global Technologies.
Operating income decreased by 44% to
Our response to a world in lockdown
The second quarter started with more than 30 of our factories closed due to the lockdown measures and with demand in many markets very depressed. To mitigate this, we implemented significant cost-saving measures, including reduced working hours, temporary and permanent layoffs, reduction of consultants, travel restrictions and reduction of other discretionary spending. These measures contributed to that our SG&A and conversion expenditure net decreased by more than
In parallel, we have continued to invest in product innovation to position us for long-term growth. For example, in the quarter we launched a scalable commercial digital security ecosystem that connects different access hardware on the same platform. We also launched several touch-free door opening products that will help to create a safer and more open world for our customers.
Positive developments and achievements
Even though some regions of the world are introducing new lockdowns, restrictions have generally eased gradually since May and currently all our factories are open. Improvements in demand combined with stronger effects from implemented cost measures have resulted in a positive financial development during the quarter.
If there are no significant new negative events, we expect the financial performance to continue to gradually improve. The attractive fundamentals of our industry are intact and therefore our financial targets remain valid.
While the health and safety of our employees remain the first priority, our employees' commitment to support customers in a secure and innovative way has been impressive. I am also pleased that we have made important progress with the acquisition of agta record, which we expect to complete soon. This will further strengthen our product offering and enable us to serve our customers even better.
Stay safe and thank you for your trust in these challenging times.
President and CEO
Further information can be obtained from:
President and CEO, tel. no: +46 8 506 485 82
Erik Pieder,
Executive Vice President and CFO, tel.no: +46 8 506 485 72
It is possible to submit questions by telephone on:
+46 8-566 426 95, +44 333 300 9273 or +1 646 722 4903
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