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Americas Division<br />
20<br />
ASSA ABLOY provided<br />
security solutions to Metro<br />
Health Hospital in the<br />
United States. The hospital<br />
has about 2,000 doors and<br />
placed rigorous demands<br />
on the specifications for<br />
each door opening.<br />
Latin America<br />
Many Latin American markets are growing rapidly. Generally<br />
speaking, the increased standard of living in these<br />
developing economies has accelerated the need for higher<br />
security levels. Each country requires unique security solutions<br />
depending on local standards. For example, several<br />
new products and strong demand for more stringent security<br />
solutions in high-rise residential construction resulted<br />
in good sales growth for ASSA ABLOY in Brazil.<br />
Current initiatives<br />
Product launches<br />
Towards the end of the year the division introduced Hi-O in<br />
North America. Hi-O stands for Highly Intelligent Operation<br />
and is a new concept for intelligent door systems that simplify<br />
installation, service and expansion. Hi-O contains a<br />
network based on the CAN standard, which has existed for<br />
many years and is widely used in the automotive industry.<br />
It enables connected units to carry out an encrypted dialog<br />
with each other. The division will launch a sales campaign<br />
for Hi-O during 2008.<br />
Shared Services<br />
The Americas division continues to coordinate administrative<br />
services for companies within the same market segment.<br />
Financial services and human resources are two<br />
areas where collaborative efforts have allowed more efficiency<br />
and quality for the Group. Efforts to coordinate<br />
administrative functions will continue in 2008.<br />
Restructuring<br />
Two factories were closed in 2007. A plant in Mexico was<br />
closed and production was moved to another Mexican unit,<br />
and a plant in Pennsylvania, USA, was also closed. Some<br />
portions of production were moved to Connecticut, USA,<br />
while others were outsourced. More efficient production<br />
and coordinated purchasing have led to savings that helped<br />
improve margins during 2007.<br />
Sales by product group<br />
Mechanical locks, lock<br />
systems and accessories, 54%<br />
Electromechanical and<br />
electronic locks, 8%<br />
Security doors and fittings, 38%<br />
Key figures Mekaniska lås,<br />
låssystem och<br />
tillbehör, 54%<br />
Acquisitions<br />
The division is exploring opportunities for acquisitions<br />
in the rapidly growing Latin American market as well as<br />
among specialized companies that could complement<br />
ASSA ABLOY’s existing offering in the division.<br />
Sales and specification<br />
In 2007 the division continued to invest in specification<br />
sales and marketing. The sales force is learning more about<br />
the needs of installers and end-users, and is focused on<br />
selling total door opening solutions, rather than individual<br />
products. At the same time and with equal intensity and<br />
importance, the division’s sales forces are working very<br />
closely with its distributor partners, who are deeply<br />
involved in all aspects of the market from defining the right<br />
products and solutions for specific applications to managing<br />
and ensuring proper installation of door opening solutions<br />
for the end-user.<br />
The division is also working with architects and security<br />
consultants early in the building process. ASSA ABLOY helps<br />
with technical specifications while the building is still on<br />
the drawing board. ASSA ABLOY specification consultants<br />
share their door and hardware expertise to ensure that<br />
openings are code-compliant and meet the needs of the<br />
end-user. Such activities strengthen relations with architects<br />
and increase the chance of orders once construction<br />
is underway.<br />
Production<br />
Efficient Lean methods are still a major driving force for<br />
business operations, and these methods have now been<br />
implemented in both production and administration. Lean<br />
methods lead to more efficient product flows, better control<br />
of material costs, improved decision-making procedures,<br />
shorter time-to-market and increased cooperation<br />
with marketing and sales teams. Ongoing initiatives with<br />
Lean processes have become ingrained in the division’s way<br />
of working. The division will continue to implement Lean<br />
operations in production and work processes in 2008,<br />
while taking advantage of purchasing synergies.<br />
SEK M 2006 2007<br />
Income statement<br />
Sales<br />
Organic growth, %<br />
10,142<br />
10<br />
10,220<br />
5<br />
Operating income (EBIT) 1 1,945 1,995<br />
Operating margin (EBIT) 1 Elekromekaniska<br />
och elektroniska, 8%<br />
Säkerhetsdörrar<br />
och beslag, 38%<br />
, % 19.2 19.5<br />
Capital employed<br />
Capital employed 8,545 8,595<br />
– of which goodwill 5,076 4,928<br />
Return on capital employed 1 , % 22.3 22.7<br />
Cash flow<br />
Cash flow 1 1,724 2,211<br />
Average number of employees<br />
1 2006 excluding restructuring items.<br />
9,641 9,428
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