Innovation drives growth
CHARACTERISTICS OF THE GLOBAL TECHNOLOGIES DIVISION
  • The division's products are sold primarily to the non-residential segment.
  • The largest markets are North America and Europe.
  • There are four specialized business units: ASSA ABLOY HID, ASSA ABLOY Identification Technology (ITG), ASSA ABLOY Entrance Systems* and ASSA ABLOY Hospitality.
Global Technologies is the Group's worldwide organization dedicated to global products and services. Global Technologies accounts for 21 percent of ASSA ABLOY's total sales. During the year the division achieved an organic growth of 10 percent and an EBIT margin of 14.1 percent. Its head office is located in Providence, Rhode Island, USA. Global Technologies has 3,500 employees, 15 production units and 40 sales companies.
Global Technologies' four business units
  • ASSA ABLOY HID, which accounted for 24 percent of the division's sales, primarily supplies ID cards, card readers and control panels for authenticating identity. These use various types of identification technology including Radio-Frequency Identification (RFID), magnetic stripes and biometry. The business unit both manufactures and customizes personal ID cards. Its products are sold under well-known brand names such as HID and Indala.
  • ASSA ABLOY Identification Technology (ITG), which accounted for 16 percent of the division's sales, produces ID management products based on RFID, such as electronic passports and identity cards and electronic tags for inventory management of industrial products and for marking livestock. The leading brand names in the business unit are Sokymat, ACG and Omnikey.
  • ASSA ABLOY Entrance Systems, which accounted for 41 percent of the division's sales, is the world's leading supplier of complete automatic door solutions, sold under well-known brand names such as Besam, EntreMatic and Doorman. These are supported by a full range of aftermarket services.
  • ASSA ABLOY Hospitality, which accounted for 19 percent of the division's sales, produces door locking systems and hotel-room safes and serves the hotel and cruise-ship markets under leading global brand names such as VingCard and Elsafe.
  • Report on the year
    ASSA ABLOY HID
    This newly formed business unit continued to show strong growth on all major geographical markets. Sales were largely driven by new products resulting from major investments in Research & Development.
    The business unit's largest company is HID, which is also the world's largest manufacturer of cards and card-readers for authenticating identity for the security market. HID pioneered the use of RFID for authentication. In 2005, HID's iCLASS line of contactless smart cards and readers continued to expand and now represents the world's second-largest range of readers and cards for authenticating identity. The cards can be used for logical access and to make payments as well as for physical access control. For even greater security, iCLASS cards can store digital versions of users' biometric information.
    * On 1 January 2006 ASSA ABLOY Entrance Systems became a separate division in order to take best advantage of the business opportunities to be found in existing operations and through future acquisitions.
    During the year, ASSA ABLOY HID acquired the Canadian company Synercard, which produces software for providing, issuing and managing advanced digital, 'smart' and photo ID cards. The acquisition will assist the rapid growth and penetration of card personalization services, which end-users and issuers of ID and security cards increasingly request.
    ASSA ABLOY Identification Technology (ITG)
    The business unit achieved strong growth in all major product areas and geographical markets in 2005. Integration of acquired companies specializing in RFID and smart cards resulted in further improvement in margins, despite continued investment in new and existing markets. The fastest-growing market segments are those concerned with RFID, electronic passports and related identification products for international travel, public-transport ticketing and bank services.
    The business unit is active in the market for electronic passports, offering a product range that includes both transponders and readers. Worldwide regulations for more secure passports are driving efforts to improve the authenticating process for passports. The market for machine-readable passport systems began to take off in 2005 and the business unit expects significant growth in this segment. During the year ITG won a high-profile contract, in partnership with Philips, from the German government passport agency.
    Global Technologies division, Key figures
      2005 2004
    Income statement SEK M SEK M
    Sales, external 5,638 4,811
    Sales, internal 122 100
    Sales 5,760 4,911
    Organic growth 10% 5%
    Operating income (EBIT) 811 632
    Operating margin (EBIT) 14.1% 12.9%
    Capital employed
    Capital employed 6,180 5,322
    – of which goodwill 4,736 4,313
    Return on capital employed 14.1% 11.8%
    Cash flow
    Operating income (EBIT) 811 632
    Depreciation 78 95
    Net capital expenditure –141 –78
    Change in working capital –100 3
    Cash flow 1 648 652
    Average number of employees 3,481 2,925
    1 Excluding restructuring payments.
    Sales / EBIT 2
    Capital employed /
    Return on capital employed
    2
    EBIT / Cash flow 2
    1 Excluding restructuring payments.
    2 2003 has not been adjusted for IFRS but goodwill amortization has been excluded.