2001
Organic growth was held back by rationalization of the product range, mainly in acquired units. The reported operating margin was reduced by dilution from acquired units.
Nine companies in total were acquired during the year – including a majority stake in the US steel-door manufacturer UDP, plus Tesa in Spain, Phillips in Mexico and Interlock in New Zealand – which added strength in both geographical and product terms.
In 2001 ASSA ABLOY changed its financing, largely replacing the previous bank financing with capital-market-based long-term bonds and short-term financing. A convertible-based incentive program for the Group's employees was launched.
2002
The year saw continuing improvements and growth despite difficult market conditions. ASSA ABLOY's long-term efforts to reduce working capital and achieve cost-efficient investments produced a very strong cash flow. Operating cash flow after payment of tax amounted to SEK 3 billion, an increase of 67 percent over 2001. A more precise focus was directed towards Group-wide purchasing, with targets set for reducing the number of suppliers and exploiting Group synergies.
Besam, the world leader in automatic doors, was acquired during the year.
2003
Business was affected by weak demand in major markets in Europe and North America. Substantial negative exchange-rate effects due mainly to the weak US dollar reduced figures for both sales and earnings. The main acquisitions were in Europe in the Identification sector.
Following the appointment of Bo Dankis as the Group's new President and CEO, a new organization consisting of four divisions (EMEA, Americas, Asia Pacific and Global Technologies) was implemented. The Executive Team was reduced from 17 people to seven. A two-year action program entitled Leverage & Growth was launched towards the end of the year. Restructuring costs linked to the action program amounted to SEK 1,320 M. The aims of the program were to realize Group synergies and strengthen sustainable organic growth.
2004
Some recovery in demand on major markets contributed to a notable improvement in organic growth. Acquisitions contributed to business performance in the EMEA and Global Technologies divisions. Negative exchange-rate effects continued to decrease reported sales and earnings. The operating margin rose in response to better sales volumes and savings from the ongoing action program, while higher costs for important metals were neutralized by higher selling prices and changes in the purchasing structure. Operating cash flow was strong as usual.
During the year ASSA ABLOY refined the Group's strategy with the aims of strengthening organic growth in ASSA ABLOY's core business and in certain attractive and fast-growing markets and product segments, and of better exploiting the Group's size to generate significant savings, especially in production and purchasing.
2005
Sales were relatively weak at the start of the year but then steadily improved, which resulted in good organic growth for the year as a whole. The Group's performance was founded on good demand in the US market. A number of relatively small companies were acquired, mainly in the Asia Pacific and Global Technologies divisions.
The Leverage & Growth program was concluded by the end of the year. The program has contributed to increasing the Group's efficiency and productivity, with annual savings of around SEK 450 M. Operating margin and operating cash flow both improved during the year. Johan Molin succeeded Bo Dankis as President and CEO.
ASSA ABLOY strengthened its overall position by focusing on customer value both in its traditional business and in segments of rather higher market growth such as electromechanical locks, automatic doors, access control systems and identification technology.
2001-2003 have not been adjusted for IFRS
(Amounts in SEK M unless stated otherwise) 2001 2002 2003 20041) 2005
Sales and income          
Sales 22,510 25,397 24,080 25,526 27,802
Organic growth, % 3 2 0 5 5
Acquired growth, % 44 15 5 5 1
Operating income before depreciation / amortization (EBITDA) 4,020 4,545 4,249 4,606 4,960
Depreciation / amortization 1,721 1,907 1,856 923 882
Operating income (EBIT) 2,133 2,638 1,073 3,683 4,078
Income before tax (EBT) 1,476 2,015 583 3,199 3,556
Net income 949 1,270 9 2,356 2,613
 
Cash flow          
Cash flow from operating activities 2,631 3,847 3,180 3,339 3,450
Cash flow from investing activities -7,112 -4,268 -1,827 -1,505 -1,052
Cash flow from financing activities 4,259 568 -1,772 -1,734 -2,325
Cash flow -222 146 -419 100 73
Operating cash flow 2,338 3,525 3,265 3,4393 3,7023
 
Capital employed and financing          
Capital employed 27,861 26,701 22,984 23,461 26,653
- of which, goodwill 16,371 16,213 14,766 13,917 15,716
Net debt 15,534 13,989 12,290 12,208 12,240
Minority interests 481 331 16 27 71
Shareholders' equity (excluding minority interests) 11,846 12,381 10,678 11,226 14,342
 
Data per share, SEK          
Earnings per share after tax and before dilution 2.992 3.53 3.302 6.42 7.13
Earnings per share after tax and dilution (EPS) 2.982 3.53 3.312 6.33 6.97
Cash earnings per share after tax and dilution (CEPS) 8.072 9.08 8.612 8.93 9.64
Shareholders' equity per share after dilution 35.80 35.85 31.23 34.74 42.85
Dividend per share (for 2005, as proposed by the Board) 1.00 1.25 1.25 2.60 3.25
Price of Series B share at year-end 151.00 99.50 85.50 113.50 125.00
 
Key data          
Gross margin (EBITDA), % 17.9 17.9 17.6 18.0 17.8
Operating margin (EBIT), % 10.22 10.4 9.92 14.4 14.7
Profit margin (EBT), % 7.32 7.9 7.92 12.5 12.8
Return on capital employed, % 9.72 9.9 9.62 15.3 15.9
Return on shareholders' equity, % 8.92 9.9 9.92 20.0 18.1
Equity ratio, % 35.6 38.2 35.9 37.4 42.8
Net debt / equity ratio, times 1.31 1.13 1.15 1.09 0.85
Interest coverage ratio, times 3.5 3.9 4.7 7.6 8.2
Interest on convertible debenture loan after tax, SEK M 9.0 27.2 17.8 24.0 33.1
Number of shares, thousands 353,751 365,918 365,918 365,918 365,918
Number of shares after dilution, thousands 361,730 370,935 370,935 378,718 378,718
Average number of employees 24,211 28,754 28,708 29,160 29,578
1 2004 has been adjusted for IFRS – see information about main effects in Note 38 on pages 85-89.
2 Excluding non-recurring items.
3 Excluding restructuring payments.