Johan Molin, President & CEO Tomas Eliasson, CFO€¦ · Tomas Eliasson, CFO. Cash offer for Cardo. Forward-looking Statements. Information set forth in this presentation may contain

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Johan Molin, President & CEOTomas Eliasson, CFO

Cash offer for Cardo

Forward-looking StatementsInformation set forth in this presentation may contain forward-looking statements. These statements are not guarantees of futureperformance and are subject to inherent risks and uncertainties. Forward-looking statements include, but are not limited to, statements about the expected future business of ASSA ABLOY AB resulting from and following the offer. These statements reflect ASSA ABLOY AB’s current expectations based upon information currently available to it and are subject to various assumptions, as well as risks and uncertainties that may be outside of the control of ASSA ABLOY AB, including but not limited to the effect of changes in general economic conditions, the level of interest rates, fluctuations in product demand, competition, technological change, employee relations, planning and property regulations, natural disasters and the potential need for increased capital expenditure (such as resulting from increased demand, new business opportunities and deployment of new technologies). Actual results could differ materially from those expressed or implied in such forward-looking statements. Any such forward-looking statements speak only as of the date on which they are made and ASSA ABLOY AB has no obligation (and undertakes no such obligation) to update or revise any of them.

Offer RestrictionsThe offer is not being made to persons whose participation in the offer requires that an additional offer document is prepared or registration effected or that other measures are taken in addition to those required under Swedish law. In particular, the offer is not being made, directly or indirectly, by use of mail or any other means or instrumentality in or into Australia, Canada, Japan, New Zealand or South Africa, and the offer cannot be accepted by any such use, means, instrumentality or facility of, or from within Australia, Canada, Japan, New Zealand or South Africa. Accordingly, this presentation and any related offer documentation are not being and should not be mailed or otherwise distributed, forwarded or sent in or into Australia, Canada, Japan, New Zealand or South Africa.

Additional InformationFor full information on the terms of the offer, the contents of and background to the offer and the offer restrictions, please refer to the offer announcement.

Investor presentation disclaimers

Cash offer for Cardo

ASSA ABLOY has reached agreements with the largest shareholders of Cardo, representing 63.6% of the shares, to acquire their shares in Cardo

A public offer is announced today with SEK 420 per share for the remaining shares

The Board of Directors of Cardo has unanimously recommended the offer

Cardo Entrance Solutions is a good fit with ASSA ABLOY’s division Entrance Systems and together they will be able to offer a complete range of products within Entrance Automation

ASSA ABLOY will investigate strategic options for Cardo’s other operations which do not fit in with ASSA ABLOY’s long term strategy, including a potential divestment

Strategic rationale

The acquisition is a step in ASSA ABLOY’s strategic ambition to grow the entrance automation business

The acquisition strengthens ASSA ABLOY’s product offering – as a leading supplier of complete solutions within Entrance Automation

ASSA ABLOY leverages its global organization and distribution network to expand and further develop the operations in Cardo Entrance Solutions

Large synergies in sales, services and product offering, but also cost synergies within manufacturing, purchasing, distribution

Cardo Entrance Solutions constitutes a platform for further growth in the broader entrance automation space

Future Entrance Systems division

Entrance SystemsSales BSEK 8.8

EBIT 12.5%

Ditec/EntrematicIndirect

Industrial doorsDirect

Automatic doorsDirect

Sales BSEK 0.9

EBIT 8%

(Ditec and Entrematic)

Sales BSEK 4.6

EBIT 11%1)

(Cardo)

Sales BSEK 3.3

EBIT 17%

(Entrance Systems)

(Agta Record Sales 2.0 BSEK, 38%)

1) Adjusted for items affecting comparability of BSEK 0.1

ASSA ABLOY Entrance Systems in brief

Sales of 4,200 MSEK

2,800 employees

Sales companies in about 30 countries

Authorized distributors in more than 50 countries

Production/assembly in Sweden, Czech Republic, Italy, Portugal, Korea, China, USA and Canada

Headquarters in Landskrona, Sweden

Besam ABBesam DenmarkBesam Great BritainBesam GermanyBesam AustriaBesam NetherlandsBesam USABesam FranceNJAD (USA-distributor)Besam Sweden (Sales)Besam FinlandBesam SingaporeBesam SwitzerlandBesam Security …Besam MalaysiaBesam ItalyBesam SpainBesam BelgiumEntré-Matic ABBesam HungaryBesam Czech RepublicFaiveley, FranceBesam JapanBesam PolandBesam PortugalBesam RussiaBesam Production ABBesam Export ABBesam AustraliaBesam ChinaBesam SlovakiaEntreMatic ABBesam CanadaDoormanBesam New ZeelandBesam HongKongBesam KoreaBesam NorwayBesam South AfricaBesam CheilBesam PortugalAAES Turkey …

0

250

500

750

1000

1250

1500

1750

2000

2250

2500

2750

3000

3250

3500

Sales MSEK

Swing Doors

Sliding Doors

Revolving Doors

Service Sales

ASSA ABLOY Entrance SystemsA true success story Ditec

Agta Record

Roller Shutters

Entrance Control

Traffic &Vehicle

The Acquisition of Ditec 2009 moved ASSA ABLOY into Entrance Automation

Industrial Doors

RollerShutters

WindowAutomation

PedestrianDoors

Entrance Control

Traffic&Vehicle

Entrance Automation

Market

Entrance Automation

Market

Before Going forward

IndustrialDoors

PedestrianDoors

WindowAutomation

Expansion in two dimensions: direct & indirect business

Acquisitions to complement direct selling model

End-user focus– System sales, customized solutions– Service

Global key accounting

Geographical gaps

Directmodel

Indirectmodel

Acquisitions to complement distributor sales channel

Distribution market focus– Fill product gaps– Geographical/market expansion

Strategic rationale Recent cases

Entrance Automation shows attractive growth & returns

Automatic Doors

Industrial doors

Gate automation Total

Market size € ~2-2.5 bn € ~8-10 bn € ~3-4 bn € ~15bn

Of which Europe

€ ~1 bn € ~5-6 bn € ~1.5-2 bn € ~8-9 bn

Observed growth rates

-5 to +10% -25 to +15% -10 to +25%

Typical EBITDA marg

5-20% 5-15% 10-25%

Cardo is a leading supplier of industrial doors and logistics systems, wastewater treatment systems, process equipment for the pulp and paper industry and garage doors

8,100 MSEK

Sales 4.6 BSEKEBIT 11%1)

Service share 45%

3.2 BSEK 0.3 BSEK

1) Adjusted for items affecting comparability of BSEK 0.1

ASSA ABLOY Entrance Automation Products for all door opening applications

Commercial applications

Residential applicationsIndustrial applicationsSwing Doors

Revolving Doors

EntranceIndustrial Doors

Garage Doors

Garage Doors

Garage Doors

Sliding Doors

Sliding Doors

Service operations

Large service synergies

Global key accounting

Complete service offering

More than 2,000 mobile technicians

45% of turnover aftermarket related

Bolt on service companies

Large potential in emerging markets

Cardo going forward

Intention is to grow and develop Cardo’s business

Global key accounting and bolt on service

Increase investments in R&D, new products

The company has gone through the recession in a good way and is now ready for growth

ASSA ABLOY always make use of talent and management in acquired companies

Future Entrance Systems division

Entrance SystemsSales BSEK 8.8

EBIT 12.5%

Ditec/EntrematicIndirect

Industrial doorsDirect

Automatic doorsDirect

Sales BSEK 0.9

EBIT 8%

(Ditec and Entrematic)

Sales BSEK 4.6

EBIT 11%1)

(Cardo)

Sales BSEK 3.3

EBIT 17%

(Entrance Systems)

(Agta Record Sales BSEK 2.0, 38%)

1) Adjusted for items affecting comparability of BSEK 0.1

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Tomas Eliasson, CFO

Financing & time table

Financial effects for ASSA ABLOY

BSEK 2009 Jan-Sep 2010 2009 Jan-Sep

2010 2009 Jan-Sep 2010

Sales 35.0 27.2 8.8 5.6 43.8 32.8

EBIT 5.41) 4.4 0.82) 0.53) 6.24) 4.94)

EBIT margin (%) 15.5 16.3 8.7 8.3 14.1 15.0

Net Debt 11.0 10.9 0.2 0.1 22.65) 22.35)

Average no. of employees 29,375 37,249 5,599 5,337 34,974 42,586

CombinedCardoASSA ABLOY

1) Excluding items affecting comparability of approximately BSEK 1.02) Excluding items affecting comparability of approximately BSEK 0.23) Excluding items affecting comparability of approximately BSEK 0.14) Not adjusted for amortizations of any excess value that arises in connection with the acquisition5) Combined net debt for both companies at end of period including total offer consideration for 100% of the shares in Cardo

FinancingFinancing

Committed bridge facility from SEB of BSEK 14 done

BSEK 14 bridge to be resettled during 2011, mainly on capital markets

Covers Cardo and other acquisitions

Key ratios

Total net debt BSEK 22.31) and gearing around 110%

Net debt / LTM EBITDA 2.82)

Equity ratio 36%

Key debt ratios will improve fast due to strong and stable cash flow

1) Combined net debt for both companies at end of period including total offer consideration for 100% of the shares in Cardo2) EBITDA adjusted for items affecting comparability of BSEK 1

The offer

Offer price of SEK 420 per share

The total value of the offer amounts to approximately BSEK 11.3– Premium of 48 percent compared to the latest closing (December

10)

Offer subject to regulatory approvals

Preliminary timetable

ASSA ABLOY announces public offer 13 December 2010

Offer document published 1 February 2011

Acceptance period 4-25 February 2011

Payment to shareholders 7 March 2011

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Q&A