The year saw continued strong competition from low-cost countries offering simpler products aimed primarily at the residential market. ASSA ABLOY's competitive advantages in this segment are its wide product range, well-known brands, short delivery times and well-developed local distribution network. Group companies are meeting the growing competition by reducing costs and focusing on product-based customer segmentation.
Scandinavia continued to make good progress, with a strong demand for ASSA ABLOY's products that was strengthened by good growth in new construction. There was also rising demand from door and window manufacturers and ASSA ABLOY succeeded in winning several major contracts.
The domestic market in Finland remained stable and there were encouraging increases in export sales.
In France the demand for ASSA ABLOY products remained stable. The Group has initiated the amalgamation of the region's sales organizations.
Sales development in Germany and Switzerland was stable. The region has also continued with reorganization and the integration of the Group's German companies into fewer but larger units.
In the United Kingdom, sales developed well during the year, especially in the Do-It-Yourself market.
There was good demand for ASSA ABLOY's products in the Benelux countries. The Group's acquisition of Nemef has strengthened its position among Original Equipment Manufacturers of doors and windows. In Belgium ASSA ABLOY's operations have been concentrated in a single company.
The Italian market remained weak in 2005. ASSA ABLOY's focus in Italy is to improve domestic sales. Restructuring of the Group's Italian companies is continuing, with the transfer of some production to low-cost countries.
Spain experienced good demand on the domestic market in 2005. Consolidation of ASSA ABLOY's production and sales companies has continued.
The Group's companies in eastern Europe showed strong growth during the year. The Group has continued to invest in production plants in Romania and the Czech Republic. Good access to a qualified workforce and high efficiency mean that the plants in eastern Europe have good capacity for future expansion.
ASSA ABLOY has also achieved very good growth in the Middle East. The Group company Mul-T-Lock has continued to increase its market share in Israel and has introduced a number of new products.
Group companies in Africa also exhibited good growth in 2005. ASSA ABLOY acquired Security World in South Africa, a franchise chain of security stores which has been renamed Yale Security Point.
Unified sales forces
One of EMEA's continuing initiatives is that the market regions should create unified sales forces under the main ASSA ABLOY brand. The sales forces will offer a broader product range with strong local brands backed by products from other parts of the Group.
ASSA ABLOY is focusing on exploiting production synergies between Group companies. Production should be concentrated in fewer factories and part of the production moved to low-cost countries. The remaining factories will manufacture a smaller number of different products but larger volumes of each individual product.
The division is currently engaged in building up a 'Lean team' with the aim of making both production and administration more efficient. The project began in 2005 and will have high priority in the next few years.
Changing the production structure has been given renewed impetus by the growing competition from new players emanating for example from China. However, ASSA ABLOY's products are hard to copy because of the great variation within the product families. In the future standardized components will increasingly be produced in low-cost countries and then assembled and tailored to customers' needs in the various local markets for rapid delivery to customers.
sales by product group
Exploit production synergies and achieve cost-efficient
production through continuing specialization.
Unify the sales organizations under the main ASSA ABLOY brand name.
Continue to develop the specification of major projects.
Increase product development activities.
Specification gaining importance in major projects
In the security industry it is becoming increasingly important to become involved in the building process at an early stage when a new housing development, factory or office complex is to be built. Today's large office and factory buildings have highly complex security requirements, and helping the architects to specify appropriate security solutions gives ASSA ABLOY an advantage later in the sales process.
EMEA is continuing to strengthen the resources devoted to specification, in the form of both skills and systems.
Improved product range
EMEA will increase its efforts to coordinate product development activities. ASSA ABLOY is working actively to make greater use of electromechanics in developing new products with improved functionality for specific application areas. A number of new products will be launched during 2006.
Safe emergency exits for stadium
Bern's new football stadium, Stade de Suisse Wankdorf Bern, was opened in July 2005. The stadium, which seats 40,000, has a roof made from solar panels and is part of a complex that includes a shopping mall, restaurants, offices and a school. It will be one of the official European Championship stadiums during Euro 2008.
It is important to be able to evacuate a stadium safely and quickly when it is packed with spectators. This calls for locking systems that work perfectly even in a panic situation. Two of ASSA ABLOY's Group companies installed all the emergency exit fittings, including push-bar controls. The doors are fitted with electronic solutions and hardware that is designed to resist abuse. All push-bar hardware is surface-mounted, in other words it did not require fitting inside the doors. This reduced the installation costs and was an important factor in the client's choice of products from ASSA ABLOY. Another factor was the wide selection of push-bar controls and the fact that ASSA ABLOY was able to offer complete security-door solutions that included analysis, design and strategy. Following the project in Bern one of ASSA ABLOY's Group companies has been selected to help plan future sports stadiums in Switzerland.