ASSA ABLOY ASSA ABLOY Annual Report2010 ASSA ABLOY is the global leader in door opening solutions, Contents dedicated to satisfying Annual Report end-user needs for security, ASSA ABLOY AB safety and convenience P.O. Box 70 340 2010 SE-107 23 Stockholm Klarabergsviadukten 90 SE-111 64 Stockholm Tel +46 (0) 8 506 485 00 The global leader in www.assaabloy.com Fax +46 (0) 8 506 485 85 door opening solutions Online Annual Report Report on operations The ASSA ABLOY Group ASSA ABLOY’s online Annual Report has Vision, financial targets and strategy 1 many user-friendly functions. The texts can Statement by the President and CEO 4 be read out loud and the financial tables Market presence 8 can be expanded and downloaded in Excel. Product leadership 18 All information in the Annual Report can Cost-efficiency 26 be found easily by menu navigation or Growth and profitability 32 by using the Search function. The online Divisions ASSA ABLOY divisions 36 Annual Report is available at: EMEA division 38 www.assaabloy.com/annualreport2010. Americas division 40 Asia Pacific division 42 Global Technologies division 44 Entrance Systems division 48 CSR Employees 50 Sustainable development 52 Report of the Board Report of the Board of Directors 59 of Directors Significant risks and risk management 61 Corporate governance 64 Board of Directors 68 The Executive Team 70 Remuneration guidelines for senior management 73 Financial statements Sales and income 74 Consolidated income statement and Statement of comprehensive income 75 Comments by division 76 Results by division 77 Financial position 78 Consolidated balance sheet 79 Cash flow 80 Consolidated cash flow statement 81 Changes in consolidated equity 82 Parent company financial statements 84 Notes 86 Comments on five years in summary 112 Five years in summary 113 Quarterly information 114 Definitions of key data 115 Proposed distribution of earnings 116 Audit report 117 Shareholder information The ASSA ABLOY share 118 Information for shareholders 122 Glossary 123 Cover photograph: Kitty Yu and daughter Chloe. » Future shareholder value is based on organic Kitty is a graduate of the University of Southern California Law School, Los Angeles, USA and is legal and acquired growth as well as continued affairs director of ASSA ABLOY Asia Pacific. She is based rationalization and synergies in the Group « in Hong Kong and brings great competence to all acquisitions and major legal undertakings – Johan Molin, President and CEO in the Asia Pacific region. ASSA ABLOY ASSA ABLOY Annual Report2010 ASSA ABLOY is the global leader in door opening solutions, Contents dedicated to satisfying Annual Report end-user needs for security, ASSA ABLOY AB safety and convenience P.O. Box 70 340 2010 SE-107 23 Stockholm Klarabergsviadukten 90 SE-111 64 Stockholm Tel +46 (0) 8 506 485 00 The global leader in www.assaabloy.com Fax +46 (0) 8 506 485 85 door opening solutions Online Annual Report Report on operations The ASSA ABLOY Group ASSA ABLOY’s online Annual Report has Vision, financial targets and strategy 1 many user-friendly functions. The texts can Statement by the President and CEO 4 be read out loud and the financial tables Market presence 8 can be expanded and downloaded in Excel. Product leadership 18 All information in the Annual Report can Cost-efficiency 26 be found easily by menu navigation or Growth and profitability 32 by using the Search function. The online Divisions ASSA ABLOY divisions 36 Annual Report is available at: EMEA division 38 www.assaabloy.com/annualreport2010. Americas division 40 Asia Pacific division 42 Global Technologies division 44 Entrance Systems division 48 CSR Employees 50 Sustainable development 52 Report of the Board Report of the Board of Directors 59 of Directors Significant risks and risk management 61 Corporate governance 64 Board of Directors 68 The Executive Team 70 Remuneration guidelines for senior management 73 Financial statements Sales and income 74 Consolidated income statement and Statement of comprehensive income 75 Comments by division 76 Results by division 77 Financial position 78 Consolidated balance sheet 79 Cash flow 80 Consolidated cash flow statement 81 Changes in consolidated equity 82 Parent company financial statements 84 Notes 86 Comments on five years in summary 112 Five years in summary 113 Quarterly information 114 Definitions of key data 115 Proposed distribution of earnings 116 Audit report 117 Shareholder information The ASSA ABLOY share 118 Information for shareholders 122 Glossary 123 Cover photograph: Kitty Yu and daughter Chloe. » Future shareholder value is based on organic Kitty is a graduate of the University of Southern California Law School, Los Angeles, USA and is legal and acquired growth as well as continued affairs director of ASSA ABLOY Asia Pacific. She is based rationalization and synergies in the Group « in Hong Kong and brings great competence to all acquisitions and major legal undertakings – Johan Molin, President and CEO in the Asia Pacific region. The ASSA ABLOY Group ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and Important events during the year convenience. ASSA ABLOY is represented on both mature and emerging • Sales rose 5 percent to SEK 36,823 M (34,963). markets worldwide, with leading positions in much of Europe, North America, Asia and the Pacific. In the fast-growing electro- • Operating income amounted to SEK 6,046 M (5,413). mechanical security segment, the Group has a leading position in areas such as access control, identification technology, • Earnings per share after full dilution amounted to entrance automation and hotel security. SEK 10.89 (9.22). Since its formation in 1994, ASSA ABLOY has grown from a regional company into an international group with around • Operating cash flow amounted to SEK 6,285 M (6,843) 37,000 employees and sales of around SEK 37 billion. As the world’s leading lock group, ASSA ABLOY offers a more complete • Investments in product development accelerated range of door opening solutions than any other company on the and a large number of new products were launched. market. • A scalable infrastructure for secure delivery of mobile keys was launched during the year. Key data 2008¹ 2009¹ 2010 Change Sales, SEK M 34,829 34,963 36,823 +5% of which: Organic growth, % 0 –12 3 • Acquisition of Pan Pan which is China’s largest Acquired growth, % 4 3 8 manufacturer of high security steel doors. Other large Exchange-rate effects, % 0 9 –6 Operating income (EBIT), SEK M 5,526² 5,413² 6,046 +12% acquisitions where King Door Closers, South Korea, Operating margin (EBIT), % 15.9² 15.5² 16.4 Income before tax (EBT), SEK M 4,756² 4,779² 5,366 +12% Paddock, United Kingdom and ActivIdentity, USA. Operating cash flow, SEK M 4,769 6,843 6,285 –8% Return on capital employed, % 17.2² 16.2² 18.5 • Signed an agreement to acquire Cardo, a leading Data per share 2008 2009 2010 Change Swedish industrial door company. Earnings per share after tax and dilution, SEK/share 9.21² 9.22² 10.89 +18% Equity per share after dilution, SEK/share 55.91 54.76 58.64 Dividend, SEK/share 3.60 3.60 4.00³ Number of shares after dilution, thousands 380,713 372,931 372,736 ¹ 2008 and 2009 have been reclassified. ² Excluding items affecting comparability. ³ As proposed by the Board of Directors. DEVELOPMENT 2006–2010 FOR A COMPLETE REVIEW OF THE GROUP AND ITS DIVISIONS, SEE PAGE 36–37 SALES AND OPERATING INCOME INCOME BEFORE TAX AND OPERATING CASH FLOW EARNINGS PER SHARE¹ AFTER TAX AND FULL DILUTION DEVELOPMENT OF EARNINGS PER SHARE Sales Operating income SEK M SEK M SEK M SEK SEK 36,000 6,000 Sales1 7,000 Income before tax1 12 11 Operating income2 10 6,000 Operating cash flow 30,000 5,000 10 9 ECO 5,000 IC LA 8 D B R E 24,000 4,000 L O 8 N 7 4,000 341 123 Production: ASSA ABLOY, Hallvarsson & Halvarsson. P 6 R R 18,000 3,000 IN E 6 T TT Photos: front page, Can Wong, page 6–7 Peter Hoelstad, page 16 Rafn Sigurbjörnsson, 3,000 ED MA 5 ¹ Figures for 2008 and 2009 4 page 19, 29, 47 Getty Images, page 22–23 Rithuset,page 26–27 White View, 12,000 2,000 are affected by reclassifica- 4 © 2,000 3 page 8–9 Dehli Airport Image HOK and ASSA ABLOYs own photographic library, among others. tion. 2 Translation: Textforum. Printing: Elanders AB, Falköping, March 2011. 6,000 1,000 ² Excluding items affecting 1,000 ¹ Excluding items affecting 2 ¹ Excluding items affecting comparability, 2006, 2008 comparability, 2006, 2008 comparability, 2006, 2008 1 0 0 and 2009. 0 and 2009. 0 and 2009. 0 0607 08 09 10 0607 08 09 10 0607 08 09 10 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 The ASSA ABLOY Group ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety and Important events during the year convenience. ASSA ABLOY is represented on both mature and emerging • Sales rose 5 percent to SEK 36,823 M (34,963). markets worldwide, with leading positions in much of Europe, North America, Asia and the Pacific. In the fast-growing electro- • Operating income amounted to SEK 6,046 M (5,413). mechanical security segment, the Group has a leading position in areas such as access control, identification technology, • Earnings per share after full dilution amounted to entrance automation and hotel security. SEK 10.89 (9.22). Since its formation in 1994, ASSA ABLOY has grown from a regional company into an international group with around • Operating cash flow amounted to SEK 6,285 M (6,843) 37,000 employees and sales of around SEK 37 billion.