20% - Assa Abloy

The division manufactures
and sells mechanical and
electromechanical locks,
cylinders, security doors
and frames on the American
continents.
InterActiveCorp’s headquarters
in the Chelsea
neighborhood of Manhattan
was completed in
2007; the architect is Frank
Gehry. Seven hundred
ASSA ABLOY door solutions
were installed in the
building.
1 Excluding restructuring items.
2 2003 has not been adjusted for
IFRS but amortization of goodwill
has been excluded.
3 Sales growth in local currencies
was 10%.
Americas
Positive trend despite weaker US market
ASSA ABLOY’s growth in the Americas division continued
in 2007 through focused efforts to increase demand for
products primarily in the commercial marketplace. The
division increased its sales and margins through good
growth in the commercial segment and experienced a
relatively minor impact from the US housing slowdown.
Americas in brief
The largest portion of the division’s sales take place in
North America, where ASSA ABLOY has an extensive sales
organization selling through added-value partners in various
channels. Sales in South America and Mexico take place
through distributors, wholesalers and DIY stores that are
serviced by ASSA ABLOY sales organizations. A small but
growing portion of sales goes to Asia and the Middle East.
Manufacturing takes place primarily in the USA, Brazil,
Mexico and Chile. The plants in Latin America produce finished
products for local markets in addition to components
and finished products sold in North America. The North
American plants also source components from low-cost
countries in Asia.
Sales and Operating income
Sales Operating income
SEK M SEK M
12,000
2,400
10,000
8,000
6,000
2,000
1,600
1,200
4,000
800
03 04 05 06 07
Sales SEK, M
1, 2
Operating income, SEK M
3
Capital employed and
Return on capital employed
Capital
employed
SEK M %
10,000
25
8,000
6,000
4,000
10
03 04 05 06 07
Americas Division
19
Report on the year
During the year the division achieved sales of SEK 10,220 M
(10,142), a 1 percent year-on-year increase. Organic growth
was 5 percent and acquired growth was 5 percent Operating
income was up 3 percent to SEK 1,995 M (1,945), which
represents an operating margin (EBIT) of 19.5 percent (19.2).
North America
In North America, unlike in Europe, there is a clear difference
between products intended for the residential segment
and those intended for the commercial segment. The
commercial segment includes institutional and commercial
end-customers such as schools, offices and healthcare facilities,
and accounts for a high proportion of the division’s
sales. Few products on the North American market can be
sold in both segments because the distribution channels
are separate.
Sales development was positive in 2007. Demand was
particularly robust for electromechanical products and highsecurity
products. One particular end-user segment that is
growing strongly is institutions such as educational and
healthcare facilities.
The downturn in housing construction had a negative
impact on ASSA ABLOY due to decreased sales of products
for single-family homes and apartments. Nevertheless,
housing-related products account for only a small portion
of the division’s sales.
In 2007 the division made one significant acquisition,
Pemko Manufacturing Company, which makes thresholds,
door seals and continuous hinges. Pemko has been well
integrated into the Group and enables ASSA ABLOY to provide
the market with a more complete door opening solution
that goes beyond doors and locks.
Return on
capital employed
20
15
Capital employed, SEK M
1, 2
Return on capital employed, %
Operating income and Cash flow
SEK M
2,500
2,000
1,500
1,000
03 04
05
06
07
1, 2
Operating income, SEK M
1, 2
Cash flow, SEK M