2 Jul 2008

Good 2Q sales and earnings trend for ASSA ABLOY

ASSA ABLOY's sales trend during the second quarter was good in spite of continuing weakness on the West European markets.

“The restructuring program and other efficiency-improving measures continued to raise the gross margin,” said Johan Molin, President and CEO. “Growth on the new markets remained strong, with contributions from both organic and acquired growth at the same time as it was very pleasing to see a number of acquisitions completed on the mature markets of Western Europe and North America"

Entrance Systems division reported sales of SEK 758 M (749) in the second quarter, representing organic growth of 6%.

“The economy is still soft in Europe and the situation remains the same in North America,” said ASSA ABLOY Entrance Systems President Juan Vargues. “And while growth in the Pacific region was slow last quarter, we continued to see very good development in Asia.”

Vargues noted that economic forecasts for the remainder of 2008 and the start of 2009 indicate declines in new construction, but he believes the automatic door market will continue to grow, though not as fast as it has in the past.

Operating income for 2Q amounted to SEK 105 M (108), giving an operating margin (EBIT) of 13.8% (14.4). Operating income was boosted by price increases made, but diminished by a growing price pressure, especially in the retail sector, caused by the weak market situation. Return on capital employed amounted to 13.5% (13.7). Operating cash flow before interest paid totaled SEK 65 M (102).

Full details of the 2nd Quarter financial report are available at www.assaabloy.com.