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Global Technologies Division<br />
26<br />
Group company VingCard<br />
will supply smart cards and<br />
locks in the Classic series<br />
to the hotel rooms at the<br />
Sheraton Cable Beach<br />
Resort and the Wyndham<br />
Nassau Resort & Crystal<br />
Palace Casino. These beachfront<br />
hotels are located in<br />
Nassau, a popular tourist<br />
destination in the Bahamas.<br />
They are initiating a major<br />
development program that<br />
will continue for four years.<br />
In all VingCard will supply<br />
smart cards for 6,000 hotel<br />
rooms.<br />
The HID Group carried out two acquisitions during the<br />
year. One was the Dutch company Integrated Engineering,<br />
active in electronic access control. The other was the Irish<br />
company Aontec, which produces inlays, an important<br />
component of items such as electronic passports.<br />
ASSA ABLOY Hospitality<br />
Hospitality’s market was extremely strong with respect to new<br />
hotel construction projects and renovation projects, both of<br />
which usually involve orders for both new lock systems and<br />
hotel safes. Hotels replace or upgrade locks about every ten<br />
years, for both security- and design-related reasons.<br />
The division carried out an extensive project during the<br />
year to find new and better distributors in growth markets,<br />
with extremely good results. Growth was generally strong<br />
and all markets demonstrated good organic growth.<br />
Innovative products have been important for growth.<br />
One example is VingCard’s latest electronic lock solution,<br />
Signature RFID, which allows communication between the<br />
door and the hotel Reception. The system makes it possible<br />
for hotel guests to receive reservation confirmations, room<br />
numbers and an encrypted access code for the room by<br />
SMS before they arrive at the hotel. They do not have to<br />
stand in line at the hotel front desk but can proceed<br />
directly to the room and unlock the door with the help of<br />
their cellphones.<br />
Sales by product group<br />
Access control, 49%<br />
Identification technology, 26%<br />
Hotel locks, 25%<br />
Key figures<br />
HID Global, 49%<br />
Current initiatives<br />
HID Group and ASSA ABLOY Hospitality continue to focus on<br />
growth opportunities. Organic growth will come from innovative<br />
new products, a broader geographical presence and<br />
continued refinement of brand and channel management.<br />
An important trend is the increased cooperation<br />
among all ASSA ABLOY’s technology areas via its Shared<br />
Technologies initiative. When Group companies in other<br />
ASSA ABLOY divisions use RFID and wireless technology in<br />
more traditional products, a merger of the best technology<br />
from the mechanical and the electronic product areas takes<br />
place, generating new growth opportunities for the Group.<br />
The business units are continuing to investigate acquisition<br />
opportunities. Acquisition targets should provide<br />
increased market share, distribution capacity or new products.<br />
Efforts to increase market presence in the rapidly growing<br />
markets in China, India and the rest of Asia are also continuing.<br />
The HID Group is focusing on the consolidation of<br />
HID and ITG and the integration of the newly acquired companies<br />
Aontec and Integrated Engineering. The integration of<br />
Fargo has been successful and sales are doing very well.<br />
In addition, production in the ITG portion of HID is<br />
being extensively restructured by moving production to<br />
Malaysia. Towards the end of the year the Ronneby plant<br />
was closed, as were several production lines in other production<br />
units. The HID Group is also continuing its restructuring<br />
program with streamlining and coordination of<br />
administration through the implementation of regionbased<br />
shared services. ASSA ABLOY Hospitality is continuing<br />
its restructuring and consolidation of production units<br />
and outsourcing its component manufacturing. Hospitality<br />
is exploring the possibility of increasing collaboration with<br />
other parts of the Group based on new-product launches<br />
and increasing sales of its products in segments other than<br />
hotels and cruise ships.<br />
ASSA ABLOY<br />
Identification<br />
Technologies SEK M(ITG), 26%<br />
2006 2007<br />
Income statement<br />
Sales 4,220 4,922<br />
Organic growth, % 12 11<br />
Operating income (EBIT) 1 612 754<br />
Operating margin (EBIT) 1,<br />
ASSA ABLOY<br />
Hospitality, 25%<br />
% 14.5 15.3<br />
Capital employed<br />
Capital employed 4,911 5,181<br />
– of which goodwill 3,568 3,640<br />
Return on capital employed 1 , % 15.5 14.7<br />
Cash flow<br />
Cash flow1 426 699<br />
Average number of employees<br />
1 2006 excluding restructuring items.<br />
2,183 2,650
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