ASSA ABLOY Annual Report 2002

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FY2002 Annual Report · ASSA ABLOY

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Annual Report 2002

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ASSA ABLOY AB (publ.)
Postal Address: P.O. Box 70340, SE-107 23 Stockholm • Visiting Address: Klarabergsviadukten 90

Phone: +46 (0)8 506 485 00 • Fax: +46 (0)8 506 485 85
Registered No.: SE.556059-3575 • Registered Office: Stockholm, Sweden • www.assaabloy.com

Contents

The year 2002 in brief

The President and CEO, Carl-Henric Svanberg

Group development

The ASSA ABLOY share

ASSA ABLOY and the lock industry

Strategy and financial objectives

Management philosophy

Increasing customer focus

Customer value drives growth

Environmental management

Group integration

Scandinavia

Finland

Central Europe

South Europe

United Kingdom

North America

South Pacific

New Markets

Hospitality

Identification

Door Automatics

Report of the Board of Directors

Consolidated income statement
and cash flow statement

Consolidated balance sheet

Parent Company income statement
and cash flow statement

Parent Company balance sheet

Accounting and valuation principles

Financial risk management

Notes

Audit report

ASSA ABLOY’s Board of Directors

ASSA ABLOY’s Group Management

Addresses

The Annual General Meeting of
ASSA ABLOY AB will be held at
Norra Latin, Drottninggatan 71 B,
Stockholm at 4 p.m. on Wednesday
26 March 2003.

Notice of attendance at the Annual
General Meeting

Shareholders wishing to attend the
Meeting must:
- be recorded in the register of
shareholders kept by Värde-
papperscentralen VPC AB
(Swedish Central Securities
Depository and Clearing
Organization), no later than
14 March 2003 and:

- give notice of attendance to
ASSA ABLOY AB, P.O. Box
70340, SE-107 23 Stockholm,
tel. +46 8 506 485 00,
fax. +46 8 506 485 85 or on
www.assaabloy.com by 4 p.m.
on 20 March 2003. Notification
must include the shareholder’s
name and personal identity
number as well as information
regarding the number of shares
held.

Any shareholder whose shares are
nominee-registered must also, in
order to be entitled to take part in the
Meeting, request a temporary entry in
the register of shareholders kept by
VPC. Shareholders must notify the
nominee about this well before 14
March 2003, when this entry must
have been effected.

Financial information from
ASSA ABLOY will be published
as follows:

Interim Reports:
First quarter: 29 April 2003
Second quarter: 7 August 2003
Third quarter: 7 November 2003

Fourth quarter and Year-end Report
for 2003: 6 February 2004

Annual Report for 2003: March 2004

Annual Reports and other Reports
may be ordered from:
ASSA ABLOY AB
P.O. Box 70340
SE-107 23 Stockholm
Sweden
Tel. +46 8 506 485 00
Fax. +46 8 506 485 85
www.assaabloy.com

Bo Dankis new President and CEO

Bo Dankis, Group Vice President and head
of ASSA ABLOY South Europe, will succeed
Carl-Henric Svanberg as President and CEO
of ASSA ABLOY on 26 March 2003.

Carl-Henric Svanberg is to become President
and CEO of Ericsson on 8 April 2003. He is
expected to remain on the Board of ASSA
ABLOY as a Deputy Chairman together with
Melker Schörling.

The ASSA ABLOY Group’s
Strategy is manifested in
three steps:

• Build a worldwide presence
and successively add new
areas of expertise

• Leverage synergies and
develop Group strength
• Increase focus on creating

value for customers

The year 2002 in brief:
Continuous improvements and growth
despite difficult market conditions

(cid:2) Sales increased by 13 percent to SEK 25,397 M (22,510)
(cid:2) Organic growth for comparable units was 2 percent
(cid:2) Income before tax increased by 23 percent to

SEK 2,015 M (1,642*)

(cid:2) Earnings per share (EPS) increased by 18 percent to

SEK 3.53 (2.98*)

(cid:2) Earnings per share before goodwill amortization
increased by 14 percent to SEK 6.13 (5.39*)

(cid:2) Operating cash flow amounted to SEK 3,525 M (2,338)
(cid:2) Acquisition of Besam

Besam is the world leader in door automatics with annual
sales of SEK 2 billion and a profit margin exceeding
10 percent. Automatic products and systems have
hitherto formed only a limited part of ASSA ABLOY’s
product portfolio, but they fit extremely well into the
Group’s strategy of creating security solutions that
prevent unauthorized entry while permitting safe, fast
exit in emergency situations and being simple and
convenient to use. The market for door automatics has
shown sustained growth of 7-10 percent a year.

(cid:2) Cash flow generation at an all-time high

Operating cash flow after payment of income taxes
amounted to SEK 3 billion, an increase of 67 percent
compared to 2001. The increase is attributable to
ASSA ABLOY’s long-term efforts to reduce working
capital and the Group’s efficient capital expenditure.
Operating cash flow after tax per share amounts to
SEK 8.26 (5.07), an increase of 63 percent.

(cid:2) Continuous margin improvements

Continuous benchmarking between the various units
has continued to produce results in the form of higher
productivity and further margin improvements in many
units, including the former Yale group of companies.
During the year greater focus has been placed on
supply management with the objective of reducing the
number of suppliers and realizing Group synergies.

* excluding provision for the Merrimac dispute,

USD 12.5 M plus interest (SEK 166 M).

The President and CEO, Carl-Henric Svanberg:

“ Building value starts

with a satisfied customer.”

We have created a worldwide presence. And we
have come a long way in building a unified Group
with a common mindset. Now it is time to focus
even more on our customers and how we can add
value by providing increased security, safety and
convenience.

In this Annual Report you will find several examples
of our work to meet – and exceed – the expecta-
tions of our customers around the world.

Creating customer value is the only true underlying
source of growth – and, in the long run, of value for
the shareholders – and it all starts with a satisfied
customer.

Another challenging
but successful year

The markets in Europe and us softened
as a result of the generally weak economy.
At the same time, in an increasingly
insecure world, we are experiencing a
growing focus on security. The interest
in more convenient and intelligent
locking solutions is growing as well
and opens interesting perspectives for
the future.

We increased sales by 13 percent to
sek 25,397 m. In local currencies the
increase was even stronger, 17 percent.
Income before tax grew by 23 percent
to sek 2,015 m. Our efforts to achieve
operational excellence are continuing
with a wide range of improvement
initiatives throughout the Group.
Margins are steadily increasing and the
potential for further improvements is
still significant.

Earnings per share increased by 18
percent. Operating cash flow amounted

4 ASSA ABLOY / 2002

to sek 3,525 m, which corresponds to
175 percent of earnings before tax.
Increased production cooperation as
well as reduced lead times and invento-
ries are important contributors to the
strong cash flow.

Our different regions and their
companies continue to strengthen their
positions. I will first briefly comment
on some of last year’s highlights in the
different regions.

We grew sales and margins steadily
in Scandinavia throughout the year.
Successful product launches contribu-
ted to good growth, especially in
Sweden. Our Norwegian foundry was
successfully moved to Romania during
the year, a fascinating project that
involved 73 trucks fully loaded with
production equipment. Finland on the
other hand stagnated, mostly as a result
of the dramatic telecom slowdown.

ASSA ABLOY / 2002 5

The President and CEO, Carl-Henric Svanberg:

In Europe the German market was par-
ticularly weak. In adjusting to these
market conditions we are reducing the
number of employees by 280. The pro-
ject also includes a transfer of certain
production to Romania. In Spain the
integration of the market leader tesa
has started well. This company has a
particular strength and spirit that adds
great value to our Group. The French
units are continuing to develop success-
fully while the development in Italy,
where our position is not so strong, is
taking longer.

The development in the uk is
encouraging even though the figures do
not yet reflect the initiatives taken.
Lead times have been dramatically
improved and a large number of product
launches during the year are expected
to accelerate growth.

North America did well in spite of
worries about the slowing economy, and
margins are steadily increasing. The Yale
integration, which primarily involved
the architectural hardware companies,
was completed very successfully. The
ongoing merging of our door opera-
tions is proceeding well, with results in
line with forecasts. Our Oklahoma
door-frame plant with 160 employees
was closed during the autumn and the
production moved, with no interrup-
tion, to Curries in Mason City. Some of
the more labor-intensive door produc-
tion is being moved to Mexico. Canada
and Mexico have become large and
important markets for us and we noted
good growth and encouraging margin
improvements in all units.

The South Pacific region, Australia
and New Zealand, was our strongest
performer last year with strong opera-
tional improvements and successful
growth projects in collaboration with
sister companies.

6 ASSA ABLOY / 2002

New Markets ended the year strongly
after a slow start. South Africa and
Brazil were our star performers while
Israel (Mul-T-Lock) and Asia are back
to growth again and showing healthy
margin increases.

Our Identification Group had a
good year with a very successful
integration of the newly acquired
Indala. Several additional small acqui-
sitions were made on top of a good
organic growth that was pulled in part
by the increasing demand for access-
control. The hotel activities suffered
from a falling demand related to less
traveling, but an aggressive cost-cutting
program improved margins and the
companies are well positioned for the
future.

Our strategy to ensure
presence and growth

We see our growth strategy in three
steps.
• Create a worldwide presence and

add new areas of expertise

• Leverage synergies and develop

Group strength

• Increase focus on creating value for

our customers

We are building a
worldwide presence

We have come a long way towards
creating a global presence through
acquisitions. We are now the undispu-
ted leading lock group in the world
and we are present in all important
regions, both mature and developing
markets. Acquisitions will continue as
there are still a number of gaps to be
filled, but a lot of the needed presence
has been established. Through intense
benchmarking and spreading of best
practice our companies continue to
improve their efficiencies.

Acquiring Besam was a great example
of adding a new area of expertise, and
gave us a world-leading position in door
automatics. This was an important
strategic step since the demand from
large customers for intelligent total
openings solutions is growing and we
will now be able to lead this devel-
opment. hid, acquired two years ago,
was equally important. The company
has developed strongly from the start
and brought us leadership in Identi-
fication.

We leverage Group strengths

The successful Volvo Ocean Race inte-
gration project brought us all closer
together, and the response we received,
internally and among our partners,
exceeded our own expectations. The
project created a pride in belonging to
assa abloy and advanced interest in
leveraging Group synergies in r&d,
production, cross sales and marketing.
This work is now being intensified and,
by working together, each company
will be able to achieve much more than
on its own.

New intelligent locking solutions
require more investments in research
and development and are now carried
out jointly. The increasing demand for
total solutions also requires more co-
operative ventures. We are striving for
more ‘platform thinking’ in our local
r&d so as to develop economies of
scale by joint production of compo-
nents and products. An increasing pro-
portion of production is being carried
out in our low-cost manufacturing
units, mainly in Romania, Mexico and
China.

Time to increase customer value

In a world of growing security con-
cerns, the need for improved and more

secure, safe and convenient locking
solutions. For larger buildings the
development of more intelligent and
sophisticated systems that can provide
an intelligent total opening has only just
begun. This is the basis of our business
idea and it gives us great potential for
growth.

We have created a platform to build
on. Acquisitions will continue but are
less critical to our growth. Our organi-
zation is in better shape than ever and
the potential for continued margin
improvements is still considerable. We
have entered the third level of our stra-
tegic development, i.e. increased focus
on business development and adding
value for our customers.

The outlook remains strong and we
can look forward to continued good
development of volume and profit.

Stockholm, February 2003

Carl-Henric Svanberg
President & ceo

locking solutions

sophisticated
is
obvious. There are great growth
opportunities for us in utilizing our
global sales network. Around a billion
locks of our make and brands are pres-
ently installed around the world. Due
to the steadily increasing need for secu-
rity, locks are being upgraded on average
three to four times during the lifetime
of a building.

Through Group cross-trading we
can offer our customers a complete
range of products. This cross-trading is
supported by a common database and
a common intra-Group customer inter-
face. By also taking advantage of our
world-leading technologies developed
jointly and then adapted to local needs,
we can offer our customers products
and systems with unique values.

Distribution is also undergoing a
gradual change. There are two trends,
more direct ways to market and more
specialist distribution. Intermediate
non-value-adding steps are disappear-
ing, putting us closer to the users.
Furthermore, with more sophisticated
locking solutions and the need to satis-
fy particular customer demands, there
are obvious benefits in distributors
focusing on different users, e.g. on
large or small companies or on private
houses. Since distributors and manu-
facturers both add value in creating
locking solutions, this increases the
opportunity for us to jointly develop
the total value-added chain.

Great opportunities for growth

Every day we see examples of how the
demand for security and safety is
increasing all over the world. The differ-
ences in security levels between countries
are significant and we can still do
a much better job in developing the
market and meeting users’ demands for

The strategy remains as
Bo Dankis takes over

As Carl-Henric Svanberg becomes
President and ceo at Ericsson from April
2003, he is succeeded by Bo Dankis.

Bo Dankis, who was born in 1954
and has a Master of Science degree from
Linköping Institute of Technology, has
a long track record of successfully
managing international companies.
From abb Japan, he joined assa abloy
France in 1997. Since 2000 he has served
as Group Vice President and head of
assa abloy South Europe.

“Our strategy and our goals remain
the same,” Bo Dankis says. “We have
created a worldwide presence. And we
have come a long way in building a
unified Group with common values
and working methods. Now it is time
to focus even more on our customers,
adding value for them through increased
security, safety and convenience. That
way, we will be able to ensure continued
growth and profitability.

“Historically we have produced
technically outstanding products, but
have not always done this in response
to the directly expressed needs of our
customers. We must develop a much
better understanding of the true needs
of the end-users of our products,” he
says and concludes “I feel great confi-
dence and enthusiasm for the role of
leading assa abloy further.”

ASSA ABLOY / 2002 7

Group development:

Income statement

Sales by organizational unit 3)

2002
EUR M1)

2,779

2002
SEK M

2001
SEK M

2000
SEK M

25,397

22,510

14,394

-1,699

-15,526

-13,863

1,080

-687

9,871

-6,276

8,647

-5,488

-8,568

5,827

-3,719

393

-105

289

-69

220

-75

-6

139

3,595

-957

2,638

-631

2,015

-689

-56

1,270

3,159

-860

-166

2,133

-664

1,476

-507

-20

949

2,107

-387

1,720

-331

1,402

-453

-34

915

Sales

Cost of goods sold

Gross income

Sales and administrative expenses

Operating income before
goodwill amortization

Goodwill amortization

Non-recurring items

Operating income

Financial items
Share in earnings of
associated companies

Income before tax

Tax

Minority interests

Net income

Operating cash flow

Operating income before
goodwill amortization

Depreciation

Net capital expenditure

Change in working capital

Paid and received interest

Adjustment for non-cash items

Operating cash flow

2002
EUR M1)

2002
SEK M

2001
SEK M

2000
SEK M

393

104

-92

-64

-1

386

3,595

3,159

2,107

950

-839

405

-581

-5

861

-830

-77

-817

598

-497

-94

-357

-2

3,525

2,338

1,756

Capital employed and financing

Capital employed
- of which goodwill

Net debt

Minority interests

Shareholders‘ equity

2002
EUR M2)

2,915
1,770

1,527

2002
SEK M

26,701
16,213

13,989

331

2001
SEK M

27,861
16,371

15,534

481

2000
SEK M

19,779
12,078

8,560

560

1,352

12,381

11,846

10,659

The ASSA ABLOY product portfolio

Security doors
and fittings, 17%

Industrial locks, 3%

Electromechanical locks
and electronic locks, 23%

8 ASSA ABLOY / 2002

Mechanical locks,
lock systems and
accessories, 57%

1) EUR/SEK average rate 9.14
2) EUR/SEK rate at 31 December 9.16
3) Including exports from each unit
4) Sales to customers in each country
5) Germany, Netherlands, Switzerland & Austria
6) France, Belgium, Italy & Spain
7) Africa, Asia, Israel, South America & eastern Europe

Scandinavia

Finland

Central Europe 5)

South Europe 6)

United Kingdom

North America

South Pacific

New Markets 7)

Hospitality

Identification

Door Automatics

Total

SEK M

EUR M

GBP M

USD M

AUD M

SEK M

NOK M

USD M

SEK M

Sales by country 4)

USA

France

United Kingdom

Germany

Mexico

Sweden

Australia

Spain

Canada

Finland

Norway

The Netherlands

Denmark

Asia (excl. China)

Italy

The Middle East

Belgium

China

Czech Republic

South Africa

South America

New Zealand

Central America (excl. Mexico)

Switzerland

Russia

Portugal

The Baltic countries

Poland

Romania

Other countries

Total

2002

1,970

2001

1,914

2000

1,889

126

175

407

1,078

216

1,952

816

132

1,015

126

155

314

937

158

2,029

920

106

125

121

263

589

145

981

1,005

25,397

22,510

14,394

2002
EUR M1)

1,135

225

175

118

109

107

2002
SEK M

10,376

2,061

1,602

1,079

993

981

863

797

733

663

600

487

418

396

381

299

273

268

228

198

194

190

180

178

116

2001
SEK M

9,935

1,904

1,545

963

445

855

775

341

661

662

538

304

424

450

344

282

248

286

200

150

185

141

137

2000
SEK M

5,418

1,647

763

780

152

839

724

178

373

606

500

167

365

248

214

201

171

125

165

571

392

268

2,779

25,397

22,510

14,394

Key data **

2002
25,397
2
17.9

14.2
10.4
2,015
7.9
3,525
1.75
839
1,907
33,261
12,381
13,989
26,701
10,487
38.2
3.9
1.13
9.9

Sales, SEK M
Organic growth, %
Gross margin (EBITDA), %
Operating margin before
goodwill amortization (EBITA), %
Operating margin (EBIT), %
Income before tax, SEK M
Profit margin (EBT), %
Operating cash flow, SEK M
Operating cash flow / Income before tax
Net capital expenditure, SEK M
Depreciation and amortization, SEK M
Total assets, SEK M
Shareholders' equity, SEK M
Net debt, SEK M
Capital employed, SEK M
Capital employed excluding goodwill, SEK M
Equity ratio, %
Interest coverage ratio, times
Net debt / equity ratio, times
Return on shareholders' equity, %
Return on capital employed
before goodwill amortization, %
Return on capital employed, %
Operational return on capital employed, %
Earnings per share after tax and full conversion, SEK
Earnings per share after tax and full
conversion excluding goodwill, SEK
Interest on convertible debenture
loan after tax, SEK M
Cash earnings per share after tax
and full conversion, SEK
Shareholders' equity per share after
35.85
full conversion, SEK
365,918
Number of shares, thousands
Number of shares after full conversion, thousands 370,935
28,754
Average number of employees

33.3
9.9
13.4
3.53

9.08

27.2

6.13

2000 **

1999 **

2001
22,510
3
17.9

14,394
5
18.8

14.0
14.6
10.2* 12.0
1,642* 1,402
7.3 * 9.7
2,338
1,756
1.42* 1.25
497
830
985
1,721
26,029
34,669
10,659
11,846
8,560
15,534
19,779
27,861
7,701
11,490
35.6
43.1
3.5* 5.5
1.31
0.8
8.9* 13.3

10,277
5
18.1

13.5
11.6
981
9.5
1,218
1.24
391
667
11,241
5,269
2,998
8,534
5,288
49.2
5.3
0.57
16.2

1998
8,582
6
18.5

12.8
11.2
748
8.7
1,028
1.37
316
623
9,219
2,715
4,237
6,984
4,460
29.8
4.4
1.56
19.0

32.9* 34.2
9.7* 13.7
13.3* 16.7
2.98* 2.73

26.4
28.7
15.2
15.6
17.9
17.4
2.00 *** 1.76

***

5.39* 3.88

2.61

2.21

9.0

8.5

8.7

11.7

8.07* 5.81

4.10 *** 3.75

***

35.80
353,751
361,730
24,211

30.58
352,453
356,712
16,881

***

16.95 *** 9.93
284,304
295,448
10,545

314,409
324,200
12,654

* Key data for 2001 excludes non-recurring items
** Key data for 1999 and 2000 has been adjusted for changes in accounting principles
*** Has been adjusted for new share issues with an adjustment factor 0.987

Definitions
(cid:2) Organic growth: Change in sales for comparable units after

adjustments for acquisitions and currency rate effects.
(cid:2) Gross margin: Operating income before depreciation and

amortization as a percentage of sales.

(cid:2) Operating margin before goodwill amortization: Operating
income before goodwill amortization as a percentage of sales.
(cid:2) Operating margin: Operating income as a percentage of sales.
(cid:2) Profit margin: Income before tax as a percentage of sales.
(cid:2) Operating cash flow: See consolidated cash flow statement.
(cid:2) Net capital expenditure: Investments in tangible fixed assets

less disposals of tangible fixed assets.

(cid:2) Depreciation: Depreciation/amortization of intangible and

tangible fixed assets.

(cid:2) Net debt: Interest-bearing liabilities less interest-bearing

investments.

(cid:2) Capital employed: Total assets less interest-bearing assets and
non-interest-bearing liabilities including deferred tax liability.
(cid:2) Capital employed excluding goodwill: Total assets less
interest-bearing assets and non-interest-bearing liabilities
including deferred tax liability and goodwill.

(cid:2) Equity ratio: Shareholders‘ equity including minority

interests as a percentage of total assets.

(cid:2) Interest coverage ratio: Income before tax plus net interest

divided by net interest.

(cid:2) Return on shareholders‘ equity: Net income plus interest
expenses after tax for convertible debenture loans as a
percentage of average shareholders‘ equity after full conversion.

(cid:2) Return on capital employed before goodwill amortization:

Income before tax plus net interest and goodwill amortization as
a percentage of average capital employed excluding goodwill.

(cid:2) Return on capital employed: Income before tax plus net
interest as a percentage of average capital employed.

(cid:2) Operational return on capital employed: Income before tax
plus net interest and goodwill amortization as a percentage of
average capital employed.

(cid:2) Earnings per share after tax and full conversion: Net income
plus interest expenses after tax for convertible debenture loans
per weighted average number of shares after full conversion.
(cid:2) Earnings per share after tax and full conversion excluding
goodwill: Net income excluding goodwill amortization plus
interest expenses after tax for convertible debenture loans per
weighted average number of shares after full conversion.
(cid:2) Cash earnings per share after tax and full conversion: Net
income plus interest expenses after tax for convertible deben-
ture loans, plus depreciation and amortization, plus profit share
from minority interest less profit share from associated compa-
nies and adjustments for changes in deferred tax per weighted
average number of shares after full conversion.

(cid:2) Shareholders‘ equity per share after full conversion:
Shareholders‘ equity plus convertible debenture loans
per share after full conversion.

Group development:

SEK M

28,000

24,000

20,000

16,000

12,000

8,000

4,000

1995

1996

1997 1998

1999 2000 2001

2002

Sales

Income before tax *

SEK M

2,100

1,800

1,500

1,200

900

600

300

1995

1996

1997 1998

1999 2000 2001

2002

Capital employed

Return on capital employed*

Return on capital employed before goodwill amortization*

SEK M

30,000

24,000

18,000

12,000

6,000

SEK M

3,500

2,800

2,100

1,400

700

1995 1996 1997 1998 1999 2000 2001

2002

Income before tax*

Operating cash flow

SEK

1995

1996 1997 1998 1999

2000

2001

2002

Earnings per share*

Earnings per share
excl. goodwill*

ASSA ABLOY / 2002 9

The ASSA ABLOY share:

assa abloy ab has been listed on the
Stockholm Stock Exchange
since
8 November 1994. In October 1995,
the share was moved to the a list. The
price of the assa abloy share fell by
34.1 percent in 2002. During the same
period, the Stockholm Exchange All-
Share (sax) fell by 37.4 percent. The
closing price at year-end was sek 99.50,
corresponding to a market capitaliza-
tion of sek 36,409 m. Including all
shares due for conversion, the market
capitalization is calculated to be sek
36,908 m. The number of shareholders
at year-end was approximately 21,450.
Investors outside Sweden, including
Wärtsilä Corporation, account for
57 percent of the capital.

During the year a total of 355 million

shares were traded, which is an average
of 1,418,386 shares per trading day
and represents about 101 percent of
the listed shares.

Share capital

assa abloy’s share capital at year-end
amounted to sek 365,918,034, distri-
buted among 19,175,323 Series a
shares and 346,742,711 Series b
shares. All shares have a par value of
sek 1.00 and provide the holders with
equal rights to the Company’s assets
and earnings. Each Series a share car-
ries 10 votes and each Series b share
one vote. During 2002 the registered
share capital of the company has in-
creased by a new share issue of
10,000,000 new Series b shares.

Convertible debentures
for personnel

The assa abloy Group has issued con-
vertible debentures to employees in the
Group. About 400 employees parti-
cipated in the first issue in 1995.
The debenture amounted to sek
75,004,375 and ran from 29 June
1995 to 30 June 2000.

The second debenture was issued
in 1997. A total of 1,400 employees
participated in this issue. This deben-
ture amounted to sek 250,000,000
and ran from 8 December 1997 to
2 December 2002. Conversion to
Series b shares was exercised from
1 December 2000 to 15 November
2002. After conversion at a conversion
price of sek 58.70, an additional

ASSA ABLOY AB’s share trend

Share price, SEK

B share

General index, AFGX

Shares traded 1000s/month (incl. off-floor trading)

200
175
150
125

100

94 / 95

10 ASSA ABLOY / 2002

60,000

40,000

20,000

3,464,799 shares were created.
In
2002, applications for conversion of
debt instruments with a par value of
sek 127.2 m were submitted.

In 2001 a new program, incentive
2001, was launched, based on four
series of convertible bonds each total-
ing eur 25 m. The only difference
between the series of bonds is the
conversion price. The program was
offered to employees in 16 countries,
and 4,500 employees decided to parti-
cipate. On full conversion, at a con-
version price for Bond 1 of eur 15.8,
Bond 2 of eur 19, Bond 3 of eur 22.1
and Bond 4 of eur 25.3, an additional
5,017,432 shares would be created.
The convertible bonds can only be
converted from October 2006.

Dividend and dividend policy

The Board of Directors and President
propose that sek 1.25 per share be
paid as a dividend to shareholders for
the 2002 financial year, corresponding
to a direct return of 1.3 percent on the
Series b share price of sek 99.50 on 30
December 2002. The aim is that, in
the long term, the dividend should
correspond to approximately one-
third of assa abloy’s average earnings
after standard tax (28 percent), but
always taking into account assa abloy’s
long-term financial requirements.

Data per share 1)

2000

2002

1999

2001

1998

1997

1996

1995

SEK/share
Earnings after tax and
2.006) 1.76
2.98 5) 2.73
3.53
full conversion
0.60
0.74
0.90
1.252) 1.00
Dividend
0.8
0.6
0.7
Direct yield, % 3)
0.5
1.3
1.79
2.27
3.285) 2.91
Earnings after 28% standard tax 3.88
33.5
32.6
30.9
30.5
32.2
Dividend, % 7)
75.65
119.50
184.50
151.00
99.50
Share price at end of period
92.73
140.00
206.70
186.00
159.50
Highest share price
48.07
73.21
110.50
94.50
76.50
Lowest share price
Shareholders’ equity
30.586) 16.956) 9.93
35.80
35.85
Number of shares (1,000s) 4) 370,935 361,730 356,712

0.56
0.22
1.6
0.60
36.7
13.24
15.16
5.23
4.37
324,200 295,448 295,448 265,396 221,684

0.93
0.30
1.0
0.95
31.6
29.28
28.97
12.38
5.40

1.23
0.43
0.8
1.36
31.6
51.24
52.95
28.69
8.64

1) Adjusted for new issues. 2) Proposed dividend. 3) Dividend as percentage of the share price at the end of the period.
4) After full conversion. 5) Exclusive non-recurring items 6) Key data has been adjusted due to change in accounting principle.
7) Dividend as percentage of earnings per share after 28% standard tax.

Share capital
ASSA ABLOY’s share capital at 31 December 2002 amounted to SEK 365,918,034 distributed among
19,175,323 Series A shares and 346,742,711 Series B shares. All shares have a par value of SEK 1.00 and
provide the holders with equal rights to the Company's assets and earnings. Each Series A share carries ten
votes and each Series B share one vote

Share capital

B shares

C shares
20,000

1,428,550
1,714,260

A shares

Transaction

Year
1989
1994 100:1 split
1994 Bonus issue
1,746,005
1994 Non-cash issue
1996 New share issue
2,095,206
1996 Conversion of C shares into A shares 3,809,466
4,190,412
1997 New share issue
4,190,412
1998 Converted debentures
1999 Converted debentures before split
4,190,412
1999 Bonus issue
1999 4:1 split
1999 New share issue
1999 Converted debentures

16,761,648
18,437,812

after split and new issues

2000 Converted debentures
2000 New share issue
2000 Non-cash issue
2001 Converted debentures
2002 New share issue
2002 Converted debentures

18,437,812
18,437,812
19,175,323
19,175,323
19,175,323
19,175,323
19,175,323
Number of shares after full conversion 19,175,323

*SEK
2,000,000
2,000,000

53,592,110
64,310,532
64,310,532
70,732,118
71,075,983
71,369,974

2,000,000

50,417,555
60,501,066
60,501,066
66,541,706
66,885,571
67,179,562

268,718,248
295,564,487

285,479,896
314,002,299

295,970,830
301,598,383
313,512,880
333,277,912
334,576,089
344,576,089
346,742,711
351,760,143

314,408,642
320,036,195
332,688,203
352,453,235
353,751,412
363,751,412
365,918,034
370,935,466

* SEK 1 per share – balanced number of shares

Ownership structure (listed by voting rights)

Data is based on the share register at 31 December 2002

A shares
10,546,425
7,118,818

1,510,080

Owner
Wärtsilä Corporation
SäkI
Janus Capital Corp. *
Melker Schörling and companies
Investment AB Latour
Deutsche Bank
Fidelity Investments *
Robur unit trusts
Alecta
Nordea unit trusts
Other shareholders with more than 50,000 shares
Shareholders with 501-50,000 shares
Shareholders with up to 500 shares
Total number

19,175,323

B shares
17,270,350
954,200
26,389,980
10,496,636
21,793,021
19,637,744
16,095,557
12,726,293
12,596,536
10,110,120
175,934,859
20,240,700
2,496,715
346,742,711

Capital % Voting rights %
22.8%
13.4%
4.9%
4.8%
4.0%
3.6%
3.0%
2.4%
2.3%
1.9%
32.7%
3.8%
0.5%
100.0%

7.6%
2.2%
7.2%
3.3%
6.0%
5.4%
4.4%
3.5%
3.4%
2.8%
48.1%
5.5%
0.7%
100.0%

* Based on the owner's details

Source: SIS Ägarservice AB and VPC AB

ASSA ABLOY / 2002 1 1

ASSA ABLOY and the lock industry:

Steady growth of a
fragmented market

The assa abloy Group originated in
the Nordic region in 1994, as the spin-
off of Assa ab from the Swedish securi-
ty company Securitas and the acquisi-
tion shortly thereafter of the Finnish
lock company Abloy. Since then the
Group has expanded by a combination
of acquisitions and organic growth.

Growing faster than GDP

Viewed over a business cycle, the
industry is steadily growing 2-3 percent
a year faster than general gdp growth.
This continuing expansion is due to
increasing wealth in the developing
world and to an increasing sense of
vulnerability in the world.

The global lock market remains
fragmented. In western Europe and
North America, a number of compa-
nies are still family-owned, with strong
and well-established relationships with
their local distribution networks and
leading positions in their own home
markets. In other parts of the world
established lock standards and strong
brands are less common. However, in
some markets a regional consolidation
can be seen.

The major players

assa abloy is the global market leader,
with annual sales approaching eur 3
billion. The second largest is Ingersoll
Rand, followed by Kaba, Black &
Decker, Stanley and Dorma, with more
of a regional strength. Other players
have grown too, some on the inter-
national market through export sales
or by establishing operations away
from home.

The size of the global market

There is no established method to esti-
mate the size of the global lock market
accurately. Few countries produce well-

12 ASSA ABLOY / 2002

defined statistics for the
industry. The information
also depends on exactly
what product areas are inclu-
ded. At assa abloy estimates are based
on the Group’s own product range.
Door automatics are therefore included
as well as doors for the professional
end-user market in the usa.

Another uncertainty is at what level
in the distribution chain the sales
should be measured. Today most lock
sales are made through distributors,
but most of the quoted figures repre-
sent lock manufacturers’ sales. This
means the total end-user market for
products, i.e. excluding installation
costs, will be 50-100 percent higher.
Based on manufacturers’ sales, our best
estimate for the world lock market
today is around eur 25 billion. This
gives the assa abloy Group a world
market share of 10-12 percent.

Advanced technologies grow

In the past year, the sales of advanced
security technologies and notably elec-
tronic lock cylinders have started to
take off. assa abloy alone delivered
more electronic cylinders in Scandina-
via and Germany in 2002 than during
the whole fifteen years since the prod-
uct category was introduced.

Other technologies continue to
spur market development. hid’s new
iCLASS card, which can incorporate
biometrics for additional identification
security, has aroused much interest.

Market imbalances

In the industrialized world there are
still major imbalances between markets.
The usa spends at least twice as much
as Europe on emergency exit devices.
Conversely, Scandinavia, Finland,
Germany and Switzerland spend 3–4

the usa

times as much
as either southern
Europe or
on high-security
locks.
Similarly automatic doors
have 3–4 times the penetration
in
the Netherlands as elsewhere.

Switzerland,

Sweden

and

Today, there are no reasons for
these differences to remain. Instead,
there is a challenging business opportu-
nity to level these imbalances through
education of the market.

Security initiatives after
11 September 2001

Following 11 September 2001, long-
running us initiatives to develop new
security Standards and to reconsider
security arrangements were significant-
ly accelerated, especially at government
institutions like the Department of
Defense. Interest in high-security locks,
biometry and smart cards has increased
considerably and has triggered activity
in the many assa abloy companies
well-established in these fields.

In many European countries the
new European Standards have now
come into force and have started to
influence national requirements and
thereby also the products. This has had
a major influence on the use and sales
of exit devices such as panic bars,
which traditionally have had a much
larger penetration in the usa than in
Europe.

Strategy and financial objectives:

A strategy in three steps

assa abloy is today the world-leading
company in the area of locking solu-
tions. To maintain and further develop
this position, the Group is following a
three-step strategy implemented by
firm management principles.

The three steps of the
strategy are:

• Build a worldwide presence and suc-
cessively add new areas of expertise
• Leverage synergies and thus develop

Group strengths

• Expand

through
the market
increased focus on creating value
for customers

These three steps should not be viewed
as discrete levels on top of each other,
but as overlapping phases in a continu-
ous process of development.

Building a presence

Acquisitions have been the basic instru-
ment for growing the Group since its
formation in 1994. Over this period,
assa abloy has grown from a regional
company with 4,700 employees and
sales of sek 3 billion to a global group
of companies with 30,000 employees
and sales of sek 25 billion. With the
acquisition of Yale in 2000, the Group
reached its position as the world’s
leading lock group.

Initially, the acquisitions were
mainly aimed at building geographical
presence. Today ASSA ABLOY is well
established in most major regions of
the world, which include both mature
and developing markets. This has given
the Group access to an unparalleled
installed base with massive recurrent
business. It is estimated that there are
more then one billion locks with the
different ASSA ABLOY brand names on
them. The continuous need to renew

Our step-by-step Group
development strategy

3. Value

Customer value
- upgrading of security
- complete offering
- partner concepts

2. Leverage

Leverage Group synergies
- corporate identity
- world-leading technology
- joint R&D, platforms, components

1. Presence

Global platform
- geographic / areas of expertise
- installed base producing recurring revenue
- operational excellence

these locks creates the recurring stream
of cash flow.

Going forward, acquisitions will
focus on further strengthening the
Group’s presence in certain geographi-
cal areas and on adding expertise in
new areas of technology. Regarding the
areas of expertise, the expansion will
be centered round the operational door
environment. In other words, the main
area will be the locking, opening and
closing of doors and the identification
and authorization of users.

Besam, the world-leading manufac-
turer of door automatics, is a good
example of such a complementary
acquisition. So is HID, which has brought
leading-edge know-how about remote
identification into the Group and is
now showing excellent performance.
After acquisition, every new com-
pany is integrated into the Group
through a well-defined process, and the
assa abloy management principles are
introduced. These are based on belief
in a multi-domestic presence, where the
skill and know-how of the local com-
panies are matched with the resources

of the global Group. Here, best prac-
tice is shared between companies, and
benchmarking is employed at all levels.
Every month the most important key
ratios are collected, sorted from best to
worst and sent back to all units. This
transparency has been a great tool to
encourage a dynamic improvement
process amongst all units. Operational
excellence is created through frequent
management meetings, close coopera-
tion and a learn-by-doing attitude.

Leveraging Group synergies

At the next level, continuous develop-
ment of the interaction between the
Group companies creates leverage for
the entire organization.

The first requirement is to build a
common corporate culture that encom-
passes all companies in all countries,
that is shared by all employees and
managers, and that is recognized and
understood by customers and partners.
This internal culture building is well
underway with the help of ambitious edu-
cational and communications programs.
Participating in the Volvo Ocean

ASSA ABLOY / 2002 1 3

Strategy and financial objectives:

Race proved to be a successful tool in
this process. It produced an enormous
response, both internally and among
partners. The Group-wide intranet
launched during 2002, the internal
magazine issued six times a year in
twelve languages and the Internet web-
site redesigned in 2002 played central
roles in maximizing the results achieved.
The yearly management training
program is another important facilita-
tor in the creation of common values.
The unique portfolio of the Group’s
80+ brands also holds great potential.
In order to further develop this asset, a
common brand strategy has been devel-
oped to ensure optimal coordination
and is being implemented in all Group
companies. Here the assa abloy brand
is used as an endorsement to all the
other brands.

The way to successful leadership in
the marketplace starts with under-
standing what the customer really
needs. By developing the market
and attracting valuable partners, the
market grows – and the satisfaction of
the customers increases.

14 ASSA ABLOY / 2002

through cross-selling of products
between companies operating on differ-
ent markets.

Identifying customer needs through
an innovative and simplified market
segmentation model will be another
approach. This allows value offerings
to be customized and packaged for
different customer groups. The forma-
tion of assa abloy Hospitality is an
example, where four different brands
have been brought together to make a
common offer to the international hos-
pitality industry.

Financial objectives

The strategy described is designed to
continue the achievement of a satisfac-
tory earnings trend, with the aims of
increasing return on capital and cash
flow generation.

assa abloy’s financial goal is to
achieve a return on capital employed of
more then 20 percent. The goal has
been the same since the inception of the
Group in 1994. With increased amounts
of goodwill, this goal has become
harder to reach and the figure has been
diluted by the acquisitions made. The
return in 2002 was 9.9 percent.

The goal will be realized through
increased organic growth and margin
improvements while maintaining the
same absolute levels of working capital
and fixed assets. Excluding the effects of
any future acquisitions, the current struc-
ture of the business should be able to
meet the goal in a five-year perspective.

In order to leverage on size, coordina-
tion of Research & Development has
become even more important. This
is especially evident in the areas of
electromechanics.
electronics and
Development of joint product plat-
forms employing common components
enables shared production and Group-
coordinated sourcing of these compo-
nents.

Increasing customer value

then allow

At the third level, the ambition is to
focus on the customers and create higher
customer value. This will make room
for sustainable organic growth and
improved operational margins, which
will
the creation of
increased shareholder value over time.
A basic insight is that today, on
developed markets, a lock is changed
only every twentieth year or even less
often. There are also substantial differ-
ences in security levels between coun-
tries. With its installed base of locks
and the brand names it has acquired,
assa abloy has the foundation on
which continuing growth can be built.
By offering added security, safety
and convenience to the customers that
constitute the installed base today, the
ability to achieve growth should be
substantial when the pace at which
locks are changed increases and the dis-
crepancies between countries can be
evened out. But that will call for a
change, not only of the customers’
actions but also of their fundamental
attitudes. To work towards such a
change, the assa abloy Group compa-
nies will build a much closer dialog
with customers of all sorts over the
coming years.

Since in many countries the product
portfolio is not complete, there is also
still a large potential to be achieved

Management philosophy:

Management for growth

Management philosophy

The management of all assa abloy
Group companies is based on a com-
mon view of the lock industry: that the
need for higher security will continue to
grow everywhere in the world, though
on different levels. So will the demand
for convenient locking solutions.

By providing efficient locking solu-
tions, assa abloy can help to make the
world safer and more secure, creating
more freedom in people’s lives. The
development of new products is carried
out in close cooperation with insurance
companies, police, fire officials, end-
user organizations and other important
decision-making bodies. Group compa-
nies engage actively in information and
training initiatives that target retailers,
architects and security officers as well
as end-users, giving them facts about
the latest products and security solu-
tions. This creates an important pulling
effect for the distributors involved as
well as overall market growth.

Management structure

The assa abloy Group has a truly
multi-domestic management. Since
there are many differences between
locks
in different countries, assa
abloy’s success is based on the close
relationships individual Group compa-
nies enjoy with their customers at
regional and local level. Their under-
standing of
local needs, business
arrangements and distribution require-
ments, and their responsiveness to
these, remain paramount to success in
the lock industry. For this reason the
Group continues to run a decentralized
full business
organization giving
responsibility to Country Managers.
Major Country Managers are
members of Group Management, which
meets regularly. Group Vice Presidents

have regional responsibility for a num-
ber of countries and ensure that Group
methods are applied consistently.

assa abloy Hospitality, the Identifi-
cation Technology Group, and Besam,
supplying automatic doors, are organ-
ized separately from the Group’s
national lock companies in order to
respond more effectively to the oppor-
tunities of these specialized international
markets.

is used.

To help develop and maintain a
consistent management practicet
hrough the entire Group, a set of basic
management models
In
management meetings at all levels, in
the annually ongoing management
training programs and in many other
forums, these models are used to
explain and implement the operations
of the Group.

Andrea Guanci, recently appointed
Marketing Manager of Yale Security
Group, Italy after working in the
Customer Service Department since
1999, attended the ASSA ABLOY
South Europe Management Training
Program in 2002. “I’m proud to say I
learned a lot,” he reports. “We visited
other Group companies,
learned
about their products, processes and
distribution channels, and discussed
everything with colleagues
from
throughout the Region. I came away
appreciating the benefits of bench-
marking – always seeking the best
without judging others – and the
opportunities open to every single
company through cross-selling and
cross-buying products. And now I
have friends, not just colleagues, all
over South Europe.”

At ASSA ABLOY, we believe that
people make the difference. Our
management philosophy is based on
trust, positive thinking and respect for
local conditions and values.

ASSA ABLOY / 2002 1 5

Increasing customer focus:

Different needs require
different solutions

Interest in better locking solutions is
gradually increasing, not only in devel-
oped markets but also in the new,
emerging markets. How this is happen-
ing, and what the driving forces are,
varies greatly, but the underlying trend
towards higher security is evident
everywhere.

The needs of different application
areas also vary greatly. Airports have
totally different needs from private
apartments; shopping malls from
schools; factories from hospitals or
hotels. These are just some of the mar-
kets that the assa abloy Group com-
panies have to satisfy.

With their global presence and
unparalleled installed base, the Group
companies have had unique opportuni-
ties over the years to meet these needs,
and have come to understand their
customers well. Nevertheless, large
efforts are currently being directed to
focusing even more precisely on the
needs of the different customer groups.

Customers need more
than good security

Every type of application has its own
balance between the three demands of
security, convenience and safety.

Increasing the level of security can
easily lead to loss of convenience.
When one more lock is added to a
door, convenience tends to be reduced.
The challenge for the lock industry is
to meet the demand for higher security
without losing focus on the user.
Inconvenient security solutions may
actually worsen security.

Safety requirements also often con-
flict with higher security. People inside
a building must be able to get out
quickly in case of emergency. An
unlocked door is clearly not secure, but
a securely locked door may well be

16 ASSA ABLOY / 2002

unsafe. Balancing security with safety
as well as convenience is a second
lock
important challenge for the
industry. Intelligent electronic solutions
are often necessary.

Airport security

Airports have complex security needs,
ranging from fairly simple locking to
advanced high-security solutions. This
need is in focus more than ever after 11
September 2001. Most airports have
shops, restaurants, cafés, offices, se-
cured luggage areas, sometimes hotels.
The site is divided into multiple securi-
ty zones. There are often thousands of
staff with different access authority,
but also public areas with access for
everyone.

With so many people in one place,
one of the most important considera-
tions is safety in the event that a termi-
nal building or the whole airport needs
to be evacuated.

On 19 May 2002 the HDB HUB – the
Singapore Housing & Development
Board’s 40-storey twin-tower building –
was formally opened. On the ground
floor is an integrated bus and rail
station where 19 bus lines and two
rapid-transit rail lines carrying almost
60,000 travelers a day converge.
In the terminal, Besam has installed
60 sliding doors with the GGS-I door
package, and four swing doors.

When a bus parks at one of the 38
bus platforms, a signal is sent to the
doors of that platform, which open to
let the passengers come and go.
When the bus drives off, the doors are
automatically closed and locked. The
installation will be the pattern for future
integrated transport solutions in Sing-
apore.

In an airport, all the products ever pro-
duced by the lock industry – mechani-
cal locks, electrical locks, and the most
advanced access-control systems – can
be found. So can thousands of people
carrying different keys, codes, and
access cards forming part of contactless

Increasing customer focus:

identification systems. In these com-
plex applications, the solutions often
call for joint efforts from different sorts
of providers. assa abloy has a unique
ability to source the best products from
within the Group.

Industry, commerce
and the public sector

Every type of organization has areas
that require high standards of protec-
tion, and different needs for access con-
trol or fast evacuation.

Factories: For a manufacturing
company, protecting its production
processes and customer relationships
are central issues. Prevention is much
more important than insurance. Locks
must meet approved Standards and be
secure enough to protect the business.
Access control to regulate entrance,
and safety precautions to allow escape,
are elements of a modern industrial
security solution.

Offices: An office handles a varie-
ty of sensitive information, and flaws
in security may cost more than the
whole security system many times over.
Approved
locking and controlled
access are essential. Rapid escape in
cases of emergency is an equally impor-
tant consideration. A growing trend is
to handle physical security and infor-
mation security from a common per-
spective.

Government organizations: Many
public institutions and organizations
hold a lot of restricted information but
also have high numbers of visitors.
Physical access, and access to informa-
tion, must be granted to authorized
people while safeguarding the integrity
of all the stored information.

Colleges and universities: These are
complex communities with open as
well as closed areas and heavy

Israel Electric Corporation has
500,000 Mul-T-Lock cylinders and
locks installed at its sites around
Israel. “Mul-T-Lock is the first choice
for all our security needs as they offer
flexibility and fast, tailor-made securi-
ty solutions,” says Asher Cohen, VP
Purchasing.

“The locks meet strict safety stan-
dards, which are crucial since most
products are installed on electric
cabinets and high-voltage equipment,
which can be very dangerous unless
properly protected.”

pedestrian traffic around the site. Who
is allowed where? Everyone, and most
of all the students, must be properly
protected. The conditions – and the
solutions – are quite similar to those in
hotels.

Hospitals are another application
area with a challenging blend of high-
security areas and areas open to the
public. Powerful medicines, personal
belongings, sensitive equipment, medi-
cal records, and – not least – the safety
of patients must all be considered. In
homes for the elderly, where many of
the residents may have restricted mobi-
lity, automatic doors can solve many
problems.

Shops must seem welcoming, but
shoplifting and pilfering by staff are
major problems. The balance of security,

safety and access control to protect
staff and customers while controlling
the flow of goods must be carefully
considered.

Utilities providing water, gas, tele-
phone and other services have thousands
of sites, with many legitimate visitors
from different organizations. There are
often too many keys in circulation,
making key control almost impossible.
But protection is essential to avoid acci-
dental injury or damage or intentional
sabotage. Modern electronic key solu-
tions and access control are the tools
needed for control and security.

Residential market

The residential lock market is a passive
market in most countries. Locks are
chosen, delivered and installed as part
of a building. Where there is a local
security Standard, builders usually try
to comply with the Standard at mini-
mal cost. The lock user – the house-
holder – is never asked about security
and probably never thinks about it
until an intrusion occurs.

Traditional distribution channels
show little interest in changing this
system, but some lock manufacturers
are succeeding in raising consumer inter-
est by moving closer to the end-user.
Householders’ perceived needs for in-

ASSA ABLOY / 2002 1 7

Increasing customer focus:

creased security, and their greater interest
in convenience and design, present the
industry with new opportunities.

Market research

Over the years, little market research
has been done in the lock industry.
There has been some dialog with distri-
butors, but few efforts directed at
customers. assa abloy has been increas-
ing its activities in this area, starting
with the development of the cliq tech-
nology a few years ago. Professional
end-users in many countries, mainly in
Europe, were asked what their main
problems were, especially with lock
cylinders and masterkey systems. The
resulting cliq products have been well
received in the market.

To further understand the residen-
tial market, focus-group studies were
carried out during 2001 and 2002
among consumers in a number of coun-
tries. A major Problem Detection Study
was also carried out to quantify custo-
mer preferences for future product and
market development. Interest in locks
proved greater than expected, showing
that a huge potential exists.

Global customers

Customers with similar businesses
throughout the world offer a new chal-
lenge to the lock industry.

At present the hospitality market is
the only true, established global lock
market. The main benefit of electronic
locks for the hotels is to get full key
control, avoiding risks from lost or
copied keys. The latest ranges of elec-
tronic hotel locks make it possible to
give each new guest an individual key
code. They can also provide an audit
trail of authorized entries into hotel
rooms by, for example, cleaning, main-
tenance and supervisory staff.

18 ASSA ABLOY / 2002

However, other businesses are moving
towards a global market. They include
chains of shops with a worldwide
organization and telecom companies
with thousands of sites. The develop-
ment is driven by at least two factors.
International companies demand consis-
tent security solutions throughout their
organizations, and even more compa-
nies recognize the growing importance
of security in their businesses.

The opportunities and advantages
are obvious for the assa abloy Group,
which can offer similar or equivalent
solutions anywhere in the world based
on common technical platforms. An
important observation in this context is
that security needs, and hence the best
security solutions, differ far more wide-
ly between market segments than they
do between countries. This provides the
opportunity for transfer of concepts and
technologies between countries. The
ability to provide a complete package
within a security concept is there-
fore an increasingly valuable asset for
assa abloy. It also provides an im-
portant platform for future concepts,
technologies and product developments.

An armored door with a high-security
lock from Fichet secures the home of
Claude Steinmetz in Antony, France.
“It is important that I can leave my
home with no fear of break-in. I prefer
physical protection to an electronic
solution that would only tell me when
a burglar is already in the flat. Physical
protection actually prevents break-ins
and brings me peace of mind.”

Methods of access control generally are
becoming increasingly international, but
outside the hospitality segment the mar-
ket is still very dependent on local
mechanical Standards and practice.

Customer value drives growth:

“Security means peace of mind”

Throughout the world, demands for
new levels of security and safety are
emerging. In residential areas, popula-
tion densities go on rising. Cities con-
tinue to grow as new housing estates
are built. As people acquire more valu-
able possessions, they install more and
better locks for peace of mind concern-
ing both the security of their belong-
ings and their own safety.

In commerce and industry too,
companies find that they have more to
protect: both valuable equipment and,
increasingly, critical commercial and
technical information. The security of
these assets is becoming increasingly
vital. At the same time, staff and legiti-
mate visitors must be able to gain
access to commercial and industrial
premises with ease and be able to leave
fast and safely in case of emergency.

These trends are seen alike in devel-
oped countries, in eastern Europe and
in the emerging markets of Asia, Africa
and Latin America. The time can be
foreseen when all the world’s six billion
inhabitants will be daily users of seve-
ral locks – at home, at work and elsew-
here.

The growing need for increased
security gives assa abloy many oppor-
tunities to discuss security and different
kinds of locking solutions or upgrades
with all kinds of customers.

Fastest growth in
emerging markets

The Group is currently seeing the
fastest growth in Asia, South Africa,
South America and eastern Europe.
Historically these areas have been
small markets for locks, served mainly
by local manufacturers supplying tradi-
tional designs. For the occasional
higher-security applications, imports
have often been preferred.

“Security means peace of mind –
making my home safe and secure for
my young family,” says Joanne Knight
of Auckland, New Zealand. Exceed
Window Maintenance – a subsidiary
of Interlock – specializes in fitting
window and door security products.
“Exceed gave me expert recommen-
dations, a professional installation
service and quality products,” Joanne
says.

“And this without compromising
the esthetics or ventilation needs of
my home. The front door and low-
level windows were particularly vulner-
able. Everything was installed in one
morning and there was still time to
explain its operation and make sure I
felt comfortable with the security level
my family now has.”

Now high-rise buildings are growing in
number, often designed by foreign
architects from Europe and the usa
who specify locks according to western
Standards. This presents an opportunity
to assa abloy, whose portfolio contains

all such lock options. An alternative
approach lies in transferring the necessary
know-how to local companies who in
turn supply the local needs. Both lines
are currently followed by assa abloy.

Equalizing technology levels

The relative use of security and safety
equipment still varies greatly between
countries. For example, the usa spends
at least twice as much as Europe on
safety, while for security equipment the
opposite is true. On the hypothesis that
the use of both could be equally high in
Europe and the usa, even a rough esti-
mate shows that the value of the total
market would at least double.

The assa abloy Group thus has a
major business opportunity in equali-
zing these imbalances in the use of
security and safety equipment. Being
active on all major markets, the Group
has the required technologies available

ASSA ABLOY / 2002 1 9

Customer value drives growth:

and can always find suitable solutions
to develop the markets and meet custo-
mers’ needs.

The Group already devotes great
efforts to developing cross-selling bet-
ween its companies. The value of such
sales
increasing year by year.
Companies round the world are also
collaborating on Research & Develop-
ment, which reduces their individual
costs and enables the next generation
of products to be based on global tech-
nologies, with local adaptations as
necessary.

Stimulating residential interest

A recent market study in the uk,
Germany, France and Sweden showed
that 18 percent of householders want
to buy a new lock. But, each year, only
3 percent actually do. More than 50
percent of house purchasers would
choose an electric front-door lock if
given the option.
Despite the wide availability of greatly
improved locks with better functions,
people’s perception is that there are

Gothenburg’s Liseberg amusement
park is the largest in Scandinavia.
When Security Manager Åke Larsson
first saw Assa’s Twin IQ lock cylinders
he was struck by the functions that
the CLIQ technology offered: its flexi-
bility in allowing cylinders to be
moved between doors without wiring
connections, its ability to block lost
keys, and its logging of everyone who
passes. In a first phase, the locks
have been installed in areas concer-
ned with cash-handling, perimeter
security and IT. “It’s far easier now
that we need just one key for all doors
instead of carrying a great bunch
around,” says Shadia Akef of the
cashier’s department.

20 ASSA ABLOY / 2002

Customer value drives growth:

Future technologies

Means of identification for access
control are rapidly becoming more
sophisticated. Conventional ‘contact’
cards suitable for cash machines or
retail purchases are not reliable when
used many times daily for access.
Contactless cards using radio-frequency
proximity technology are therefore
now widely used. They are also being
further developed into smart cards,
which can carry vastly more data and
can receive, record and transmit infor-
mation. One example is hid’s new
iCLASS cards and readers, which are
proving popular and could become a
future standard.

Biometry can add a further level of
security to a smart card by ensuring the
authenticity of the cardholder. The
card carries digitized details of the
holder’s fingerprint, say, and both card
and finger must be checked by readers,
recognized and matched before access
is granted. Such technologies will soon
break through since cost is falling and
reliability is rising.

ASSA ABLOY / 2002 2 1

few new types of residential locks
available. Especially when they com-
pare them with the locking solutions
they meet in modern cars and hotels.

assa abloy therefore has great
potential on the residential market.
And while most needs will continue to
be routed through traditional lock
companies and distribution channels,
some enterprising Group companies
have been highly successful with new
ventures.

In New Zealand, for example,
Exceed Window Maintenance, a sub-
sidiary of Interlock, focuses specifically
on locking solutions for windows and
doors through a franchising network.

In France and five neighboring
countries, Fichet has set up a chain of
nearly 400 franchised ‘Point Fort
Fichet’ stores selling customized securi-
ty doors, with locks, for apartments.

In the usa, Emtek has grown its
business in just a few years from next-
to-nothing to sales of usd 50 m a year
by offering an extensive range of indi-
vidual, stylish, high-quality door hand-
les, escutcheons and locks in a country
known for its low-cost door furniture.
Even the padlock, traditionally sold
purely on price, size and appearance,
has been transformed by Lockwood in
Australia. The company devised a
rating system covering strength, corro-
sion resistance and intended applica-
tion which has dramatically boosted
sales. This is also being adopted in the
uk, Poland and Hungary.

Electromechanics
and electronics

Where new technologies are offered
they make impressive progress. In
Germany, for example, most doors,
even for private homes, are either
equipped with or prepared for an elec-

tric strike. This gives buyers the option
of adding remote opening, a door
phone or video monitoring.

The use of electromechanical locks
continues to increase. assa abloy has
leading positions in magnetic locks
(through Securitron), motor and sole-
noid locks (Abloy, Assa, Lockwood)
and electric strikes (effeff, hes, Trimec).
Electronic cylinders too are here to
stay. They are simpler to install and
much cheaper to buy and own than full
access-control systems; thus more
doors can be given an enhanced perfor-
mance. They are easy to combine with
mechanical cylinders, and by providing
additional functionality such as fast
programming of new or replacement
keys and an audit trail, can create
sophisticated security systems. assa
abloy’s cliq concept has been well-
received and will be progressively
launched in several markets.

The growth of access control

In 2002 assa abloy alone produced
around 700,000 access-control readers
for use with electric locks.

Modern access-control systems
provide a cost-effective method of con-
trolling the flow of people through
perimeter doors and important interior
doors. The objectives are to allow auth-
orized entry, to prevent unauthorized
entry and to safeguard the company’s
property. Staff normally identify and
admit themselves with id cards read by
automatic readers at the doors.

At the same time, many doors nor-
mally kept securely locked must open
readily in case of emergency so that
people can escape fast. Electrically con-
trolled panic exit devices can be set to
operate in different modes at different
times of day.

Environmental management:

Concern for the
environment pays off

Lock manufacturing and marketing is
not the most hazardous business from
an environmental point of view.
Nonetheless environmental issues are
becoming increasingly important, and
there remains significant room for
improvement.

Some years ago the assa abloy
Group Management instituted an envi-
ronmental strategy based on the iso
14001 Standard. The Group companies
devote considerable effort to identifying
and realizing environmental improve-
ments, and the majority already work
in accordance with the strategy.

The Nordic companies, led by
Abloy and Assa, are some of the most
advanced. Both are among the increas-
ing number of companies with an iso
14001 certificate. Their efforts to pro-
tect the environment include dealing
with most of the possible hazards or
environmental loads from the work-
shop, for example by energy conserva-
tion and waste water treatment.
Initiatives also cover packaging, deli-
very, recycling of used products, and
supporting the distributors in their
environmental efforts.

Driven by ethics –
and self-interest

Ethics, one of the four cornerstones of
assa abloy’s management philosophy,
is also one of the most important drivers
of the Group’s environmental work.

There are several other drivers,
including economy and customers’
expectations. Over the years assa
abloy has found that environmental
work often has a direct positive impact
on the bottom line. Avoiding waste
and recycling materials often results in
lower costs, additional income and/or
increased efficiency. In general the
companies’ own ambitions are consid-

22 ASSA ABLOY / 2002

erably higher than the legal require-
ments.

Identifying opportunities

The basis for all the Group’s environ-
mental work is measurement – of
energy used, losses of materials and
chemicals, water usage, and waste
water disposed of. Tracking these
parameters enables major opportunities
for improvement to be identified, and
annual programs and budgets to be set
up to accomplish the improvements.
Many assa abloy factories have already
done this for some years, but some of
the new companies in the Group have
just started.

Room for improvement

What can be done to further improve
environmental compliance in an already
relatively clean industry like the lock
industry?

Water is used for cleaning and
cooling in many manufacturing pro-
cesses. Contaminated water can be
purified and recycled, saving both
costs and load on the environment.
Similarly, the various coolants used in
the metalworking machines can be
cleaned and recycled with modern
technology. Energy is used to heat
plants, and also for the machines and
processes. Many savings can be found,
for example by using heat-exchangers
to conserve thermal energy.

In metalworking also, a lot of scrap
metal is created during stamping or
milling. This waste has a scrap value
and can be collected and returned for
melting into useful material again.
Surface treatments for lock products
involve various metal coatings as well
as colors with water or other base.
There is a consistent movement towards
more water-based or powder colors,

using less-hazardous chemicals. These
processes are also more material-efficient
and hence more cost-effective.

Choice of packaging materials is
another way to make an environmental
contribution, by choosing recyclable or
even already recycled material for the
packaging. The limit here is illustrated
by Abloy in Finland, who already
reclaim and recycle the whole product
when used.

The lock factory of Group company
Guli Security Products in China is
considered to be one of the leaders in
environmental protection
the
country’s metal industry, and its policy
includes extensive measurement of
environmental factors and regular
reviews. It also includes taking good
care of the health and safety of the
employees.

Environmental concern can also be
exercised during the development and
design of new products, not only by
choosing appropriate manufacturing
methods and distribution processes,
but also in the choice of materials,
coatings and finishes.

Environmental management:

treatment plant

Can the waste water from a lock
factory be converted back to pure
water? Lockwood Security Products
in Australia has proved that it can. In
August 2002 Lockwood opened its
waste water
in
Oakleigh. Here waste streams from
the electroplating rinse tanks are
treated, heavy metals recovered and
the water purified for recycling to the
electroplating process. The plant was
the first step in the Facility Optimization
Audit, a cooperative venture between
Lockwood and Honeywell.

ASSA ABLOY / 2002 2 3

Group integration:

Worldwide integration through
communication – and sailing

How to achieve three to
four years’ integration work
in just nine months

The acquisition of Yale in 2000 made
assa abloy clearly the World’s Leading
Lock Group. But it also brought 30
new companies and 12,000 employees
into the Group. There was an urgent
need to integrate these quickly and
successfully – to build a com-mon cor-
porate culture that would help all the
Group’s managers, employees, custo-
mers and distibutors to understand the
assa abloy corporate strategy and
values.

The task was primarily one of
communication, internally and exter-
nally. A series of projects was initiated
to accomplish it:
• A common branding strategy for the
Group’s 80+ brands was developed
and is being implemented.

• The Volvo Ocean Race was used to
build team spirit and communicate
core values.

• An internal attitude survey confirmed
initial need and monitored

the
progress.

Common branding strategy

The Group branding strategy is based
on the belief that each brand is unique.
The assa abloy brand is then used as
an endorsement brand, supporting the
individual brand with a sense of the
Group’s global strength and resources.
A Brand Platform for the assa abloy
brand was developed in 2001, describ-
ing the brand’s vision, mission and
values and creating a Corporate
Tagline ‘The World’s Leading Lock
Group’. This was further developed
into a market communication concept
with the slogan ‘Unlock Your Life’,
based on the idea that locking solutions
from assa abloy can not only make

24 ASSA ABLOY / 2002

the world more secure and safe, but
also create greater freedom in people’s
lives.

With close to a hundred brands
within the Group, the need to organize
the brand portfolio is obvious. The
second Brand Platform was for Yale, a
major international brand marketed by
many Group companies. Subsequently,
in a Group-wide project, 85 companies
have developed their own Brand
Platforms according to the common
model. This means that virtually all
the Group’s brands now have their
personality and their market positioning
defined in clear documents that will
guide all market communication.

A powerful integration vehicle

The Volvo Ocean Race proved to be a
very powerful vehicle for the integra-
tion process. It has helped not only to
develop a common corporate culture
but to strengthen customer relations
and implement the new brand strategy.
The Race had an almost perfect geo-
graphic match with the assa abloy
organization, with stopovers in all
major markets. These were used to
educate the market, for events with
employees, customers and retailers, and
for Regional management meetings.

But, even more, the Race itself was
used to enhance internal communica-
tion and build pride in the Group. It
helped to give all employees informa-
tion about the worldwide assa abloy
Group, a sense of its size and scope, and
answers that they could pass on to
customers and members of the public.

Initially developed for the Race, the
internal Corporate Communication
function is now in full operation.
Cornerstones are the new intranet
called keyPoint, the internal magazine
assa abloy news (now to appear more

frequently and in regional editions), the
redesigned website www.assaabloy.com,
and a corporate network of Commu-
nication Managers representing all
regions and business areas.

Success at many levels

From a sporting perspective, the Race
was very successful. The team had a
tough start, but through continuous
improvements, good team spirit and
hard work assa abloy finished a very
honorable second after 32,250 nautical
miles. Its success has set a good example
to all 30,000 employees to work hard,
never give up, be good team players,
and continually strive to do better.

From a business perspective, the
outcome was possibly even better.
The Race gave assa abloy cost-effective
media coverage valued in a neutral
survey to over usd 60 m. This included
15,200 press-clippings and 996 hours
of television airtime, not to mention 3
million Internet visitors. But, more
importantly, the project achieved its
ambitions of building internal awareness
and pride. An internal survey covering
63 companies, 4,000 employees, 17
languages and 1,000 managers showed
this very clearly.

Group integration:

Anna Bernsten, Vice President, of ASSA ABLOY, was responsible for the Volvo Ocean
Race project. For her way of shaping, leading and driving the project, The Swedish
Project Academy named her as its 2002 Project Leader of the Year.

She estimates that the project has successfully accomplished the mammoth task of
achieving three to four years’ integration work in only nine months. “It is fascinating to
see the energy and inspiration that can be created across international and
cultural boundaries by a project like this,” she says.

Results from the employee
survey:

• 97 percent of the Group’s employees
followed the progress of the Race.
• 88 percent believe that the project

has strengthened affinity within the
Group.

• More than 14,000 employees

increased their knowledge of assa
abloy’s values and ways of working.

• More than 18,000 employees now

feel more proud of belonging to the
assa abloy Group.

ASSA ABLOY / 2002 2 5

Scandinavia:

Success centered in residential and
project specification sectors

For assa abloy’s Scandinavian regional
organization the majority of companies
have achieved excellent development,
and the past year has been strong in
Norway and Sweden. Product launches,
notably of the cliq electronic lock
cylinder technology, have turned out
well. Earnings in Denmark have been
rather weaker than in the other coun-
tries even though its core products,
headed by locks and lock cylinders,
have shown good development on the
home market. diy sales all over
Scandinavia have increased.

“During the 1990s it was commer-
cial construction that showed an up-
swing. Now we are seeing a change and
it is the residential market that is giving

“Safety and security are prime con-
cerns for our tenants,” says Roland
Håkansson, Administration Manager
of Växjöhem, which manages the
Hästhagen apartment block.

Scandinavia:
Consolidated sales by companies in the Scandinavian
organization in 2002 amounted to SEK 1,970 M
(1,914), representing organic growth of 3 percent.

Trends

SEK M

2002

2001

2000

1999

1998

Sales
Average no.
of employees

1,970 1,914

1,889

1,777 1,701

1,556 1,731

1,726

1,651 1,657

Sales by product group

Security doors
and fittings, 14%

Industrial
locks, 4%

Electromechanical
locks and electronic
locks, 14%

Mechanical locks,
lock systems and
accessories, 68%

26 ASSA ABLOY / 2002

President

responsible

us some of the most exciting oppor-
tunities,” says Hans Johansson, Group
Vice
for
Scandinavia. “Much of the region’s
housing stock is in great need of reno-
vation, and there is also a significant
housing shortage in many areas. We
have high hopes in particular of the
major conurbations and some of the
smaller university cities.

“In many ways 2002 has been a
year of development. We have identi-
fied many future opportunities for
improving our offer to customers. One
of our main targets for the year was to
get closer to both customers and distri-
butors. Cooperation with security
centers throughout Scandinavia will
continue as the basis of our efforts to
develop the market.”

A source of inspiration

“For us the year’s most memorable
event was the Volvo Ocean Race,”
Hans Johansson goes on. “The Race
was a source of inspiration for many
people in the Group, and the stopover
in Gothenburg was one of the most
successful of all. Over 600,000 people
came to it, and nearly 2,500 customers
visited the assa abloy tent, where the
Scandinavian companies took the
opportunity to display their products.
We also organized a number of projects
taking the Race as their theme with the
aim of bringing us a step closer to the
customer.”

The Gothenburg stopover also pro-
vided an ideal venue for the process
of formulating the ideas and projects
that will form the framework of
assa abloy’s development plans for
Scandinavia over the next few years.

Broader solutions

“To achieve the goals we have set, we

Scandinavia:

Residents of the Hästhagen apartment
block in Växjö, southern Sweden, now
have better security. Doors of the 232
apartments have been fitted with the
strong new Assa Evolution lock-case
and the Assa C 10 dual-function lock.
This lets each tenant decide when
service personnel can have access,
without having to hand over their own
key. Instead, the tenant leaves the lock
in a special service position when
removing the key, and the janitor uses
a different service key to get in.

the crucial features,” Hans Johansson
says. “cliq has also initiated a new era
in the way that we engage with the
market and serve and collaborate with
our security partners.

“Scandinavian design is world-
famous, and we pay as much attention
to our products’ appearance as their
functional performance. Thus we con-
sulted the designer Pelle Wester when
designing Assa’s new Epok range of
door handles and fix’s new Vinga
window handles.

“Together with our sister compa-
nies throughout Europe, we are playing
an active part in the development of the
new European (cen) lock Standard.
Remembering the state of the housing
stock we also have ongoing programs
of education for end-users as well as
distributors. We sponsor Neighbor-
hood Watch schemes and arrange edu-
cational activities for housing associa-
tions in conjunction with local police.”

ASSA ABLOY / 2002 2 7

must focus on broader solutions
involving greater variety and greater
flexibility,” Hans Johansson believes.
“We have already come some way
towards simplifying and clarifying our
structures. We can also gain a lot of
benefit from exploiting Group strength
to the full and from working with
companies outside the Group, utilizing
our local customer relationships with
Swedish construction companies. One
of the first fruits of this approach was
the successful turnkey tender for one of
Europe’s
largest hospital building
projects, currently underway in Malta,
which was presented as a
joint
Scandinavian Package for Export.

An increasingly important part of
assa abloy’s business in Scandinavia
is to sell support services, especially
project specification, to traditional
lock businesses. Other support services
include consultancy, the organization
and supervision of installation, and
quality control.

“Scandinavia is a small market, and
we constantly need to seek new ways of
creating business,” Hans Johansson
says. “We see great opportunities in a
more advisory role.”

In Norway assa abloy’s compa-
nies, led by TrioVing, now perform
about 75 percent of all project specifi-
cation work. The largest project so far,
completed in late 2002, is the new
headquarters offices of the telecommu-

nications company Telenor at Fornebu
near Oslo, which has 7,500 individual
workplaces and a total floor area of
137,000 square meters.

“Project specification is a good way
of making sure that architects prefer
our products,” Hans Johansson explains.
“By becoming involved early in the
planning phase we can influence their
choice of lock solutions. We start with
the building plans and consider what
locks and fittings are necessary to meet
the required level of security for differ-
ent rooms and areas. We take account
of the requirements laid down by, for
example, insurance companies and fire
authorities. We also pay great attention
to visual design. Most significantly of all,
we can provide a continuous develop-
ment towards a higher level of security
and safety by always giving customers a
high-security option.”

Technology and design

The Group’s cliq technology, which adds
advanced electronic features to high-
security mechanical lock cylinders, was
launched in Sweden and Norway in 2001.
“The market has given cliq an out-
standingly positive reception,” says Hans
Johansson. “Demand has exceeded our
planned capacity throughout the year.”
“The ease with which cliq can be
added to existing systems, and the ease
with which lost keys can be blocked
and new users given secure access, are

Finland:

Growth in exports continues
to offset flat sales at home

Once again Finland’s leading lock com-
pany has managed to grow its business
in key markets in North America, west-
ern Europe, Russia, the Far East and
Australia, which compensated for con-
tinued flat sales at home. Substantial
investments in more efficient produc-
tion techniques over the past three
years also began to have a positive
impact on income in 2002.

It is ironic that one of the world’s
leading developers of advanced electro-
mechanical locking technology is based
in a country which still takes pride in
not always having to lock its doors.
Abloy’s headquarters are deep in the
forests of eastern Finland where securi-
ty seems unnecessary.

Expanded Business
Unit structure

The company has a long history. The
industrial manufacture of abloy disk
cylinders began in 1918, based on a
technology which is still one of the
company’s major products, while the
subsidiary Björkboda Lås, which
manufactures abloy lock cases, cele-
brated its 270th anniversary in 2002.
Today, the abloy trademark and high-
security products are well known
throughout the world. Matti Virtaala,
Group Vice President responsible for
Finland, believes that the company’s
success is due largely to its aggressive
product development and its clear divi-
sion into Business Units.

Finland:
Sales by companies in the Finnish organization in
2002 amounted to SEK 1,150 M (1,165), representing
organic growth of 1 percent.

Trends

SEK M

Sales

Average no.
of employees

2002

2001

2000

1999

1998

1,150 1,165

1,060

898

811

1,152 1,150

1,123

1,020

970

Sales by product group

Security doors
and fittings, 16%

Industrial locks, 8%

Electromechanical
locks and electronic
locks, 16%

Mechanical locks,
lock systems and
accessories, 60%

28 ASSA ABLOY / 2002

“During the year a new Business Unit,
Door Automatics, was established, and
towards the end of 2002 the Besam
operations in Finland were absorbed
into it. This means that we now have
seven separate organizations, in effect
subsidiary companies, for Abloy’s
seven product segments. Within each
Unit, the ongoing development of new
products is an integral part of our cor-
porate culture.”

This diversified structure has proved
successful – and vital – because abloy
products are technically advanced.
Understanding one’s own products is
essential for understanding the busi-
ness. The different Business Units,
which now comprise Industrial Locks,
Construction Locks, Electromechanical
Locks, Door Automatics, Door
Closers, Lock Cases and Architectural
Hardware, also require different
commercial focuses.

“Typical customers for Industrial
Locks are large manufacturers, e.g. in
the telecom business, who buy large
quantities on a regular basis under
long-term agreements,” Matti Virtaala
explains. “On the other hand, typical
customers for Construction Locks are
locksmiths – usually family-owned
businesses with few employees where
daily personal contact is required.”

While sales in Finland continued
flat in 2002, there are signs that the
domestic market is beginning to gather
strength and should return to growth
in 2003. In the meantime, Abloy has
continued its campaign, started in
2001, to replace out-of-date locks
in residential buildings and offices in
Finland by offering customers new,
more secure mechanical locking solu-
tions. This ambitious retrofit initiative
has been successful in replacing falling
sales volumes resulting from the con-

tinued slump in new construction.

In 2003 the launch of the Group’s
unique cliq electromechanical lock
technology is expected to boost sales in
Finland.

Exports remain important

“Export is essential for Finnish compa-
nies wanting to be profitable,” Matti
Virtaala goes on. “There are only five
million people in Finland, and even
though abloy was recently voted the
most valued trademark in Finland –
ahead of Nokia! – nearly 50 percent of
Abloy’s sales are generated through
exports, making Abloy one of the most
profitable companies in the Group.”

In 2002 export sales continued to
grow in many parts of the world. In
the United States and Canada, which
form Abloy’s biggest export market,
sales of door closers, cylinders,
industrial locks and padlocks grew
strongly. Abloy also had excellent
growth in Russia, the Netherlands, the
Far East and, most notably, Australia.
Sales in eastern Europe were slow in
2002 and are likely to remain so
through 2003.

When Hotel Santa Claus in Rovaniemi,
Finland opened its doors to the public
in December 2001, it was with a high-
level security solution from Abloy and
VingCard flexible enough to meet the
needs of their very varied groups of
customers: private, business and
governmental.

“The customer shouldn’t need to
think about security,” says the Hotel
Manager, Jari Simola. “A good securi-
ty solution frees you from worry. In
fact when it’s working well, you
shouldn’t even notice it.”

The new abloy protec rotating-disk
cylinder lock, which was launched in
selected export markets from late 2001
onwards, has been particularly success-
ful in Australia, with significant orders
from universities, museums, power and
water utilities, jails, councils and hospi-
tals. Intended primarily for the com-
mercial and institutional markets, the
cylinder has nearly two billion different
key combinations per keyway, making
it possible to create extensive master-
key systems covering thousands of
doors and thousands of keyholders.
The patented design is virtually pick-
proof and meets stringent international

standards for high security. Increased
production capacity will allow further
launches during 2003, and the abloy
protec promises to be a big seller both
at home and abroad.

Group synergies

In general, Abloy has benefited greatly
from being a part of the assa abloy
Group. The company is a net supplier
to the Group overall, and new cross-
selling initiatives are constantly being
developed across the whole product
range and especially in the areas of
electromechanical
advanced
mechanical lock technology.

and

Abloy is the third-largest manufac-
turer of door-closer products
in
Europe, and some 70 percent of its
output is now purchased by sister com-
panies in the Group. Two significant
new products launched during the year
are the dc250 cam-action door closer –
which is light to open but can apply a
high closing force – and the fd450-454
fire-door closing system, a slimline
design which is easy to install and to
integrate with fire alarm systems and
external smoke detectors.

ASSA ABLOY / 2002 2 9

Central Europe:

Promising opportunities
despite weak market

One year after Group companies from
Germany, the Netherlands, Switzer-
land and Austria formed a new Central
European organization, prospects for
organic growth and expansion by
acquisition look promising despite the
general slump in economic growth.
Eero Leskinen, Group Vice President
for Central Europe,
responsible
explains how he’s streamlining his
operations to compete more effectively
in this challenging hardware arena.

“The current market situation in
central Europe, characterized by slower
than expected growth in most sectors,

particularly new construction, favors
those companies who have streamlined
their organizations to reduce costs
while maintaining an aggressive sales
and marketing posture. We have suc-
ceeded in doing both. Costs are still in
process of being reduced by as much as
eur 10 m by relocating our lock manu-
facturing to lower-cost countries, by
integrating component production for
some of our main product lines in the
region, and by slimming our work
force by some 15 percent. Thanks to
these and other measures we are well
positioned to meet current market

Central Europe:
Sales by companies in the Central Europe organization
in 2002 amounted to SEK 1,600 M (1,432). Organic
growth for comparable units was -1 percent.

Trends

SEK M

Sales

Average no.
of employees

2002

2001

2000

1999

1998

1,600 1,432

1,027

575

543

1,692 1,398

1,170

751

747

Sales by product group

Mechanical locks,
lock systems and
accessories, 56%

Security doors
and fittings, 2%

Industrial locks, 5%

Electromechanical
locks and electronic
locks, 37%

30 ASSA ABLOY / 2002

conditions. We see 2003 as a transitio-
nal year characterized by stable sales
leading to stronger growth in 2004.”

On the sales and marketing fronts,
a number of important initiatives have
been taken to ensure stable growth and
better profitability in the challenging
economic climate. Eero Leskinen says:
“Generally speaking we are moving
closer to the customer on a variety of
levels. We have created integrated
product packages that are specifically
tailored to meet the security and safety
requirements of our main customer
categories. We have created dedicated
sales teams for the commercial, resi-
dential, oem and door industry market
segments to ensure better service and
support leading to higher customer
satisfaction. We have developed a new
distribution concept making better and
more effective use of our various lock-
smith and dealer partnerships. And we
have also committed more resources
to r&d to bring new products to the
market faster.”

The more market-oriented organi-
zation and a widening product range
generated through more aggressive
product development initiatives offer
good potential for future growth. It is
also felt that there are a number of
opportunities for expansion through
strategic acquisitions on all markets in
the region. The industry’s high degree
of fragmentation, with many small
to medium-sized family-owned lock
companies operating in the region,
generates many possibilities for future
restructuring and harmonization. assa
abloy has the size, scope and financial
strength to make the most of this
market situation.

Central Europe:

Higher security demands

Germany, the Netherlands, Switzer-
land and Austria all continue to show
an increased interest in greater securi-
ty. This is true for both the commercial
and residential segments. This demand
for higher security is likely to continue
and to grow for the foreseeable future.
The system product lines, which in-
clude exit door and masterkey systems
and electromechanical cylinders, are
well placed to meet this demand. These
greater security concerns will translate
into higher sales value per door due to
the rise in demand for electromechanical
solutions which offer higher security,
greater flexibility, and more conven-
ience and peace of mind for customers.
This applies to the residential market as
well as the upper end of the commercial
market. All the assa abloy companies
in the region continue to work closely
with police and fire authorities, insur-
ance companies and their various part-
ners throughout the area to agree on
and improve specifications which meet
changing customer requirements for
increased safety and security.

Size matters

Eero Leskinen says the many benefits
of being a part of the assa abloy
Group are becoming
increasingly
apparent. “A growing number of cross-
selling opportunities will help to
increase our sales within the region and
on export markets like the uk. Cross-
buying has helped to broaden our
product range to include multipoint
locks and panic doors, to name two.
We have also exploited the advantages
of synergy more effectively by integrat-
ing production of components for ikon
and keso and consolidated our brand-
ing strategy for the region as a whole.”

Harald Briks, responsible for locking
at the Technische Universität in Berlin,
searched for a system that could pro-
vide a high level of mechanical secu-
rity while coping flexibly with lost keys
and organizational changes. He found
the ideal solution in the VERSO CLIQ
lock cylinder from IKON, which com-
bines electronic coding with mechani-
cal security.

“The problem of walk-about keys is
solved since it’s easy to log the key
out of the system instead of changing
the lock. This gives the system a far
longer life expectancy than traditional
systems.”

Market developments

In Germany, new construction contin-
ues to be weak. The retrofit market,
however, is stable and the situation is
expected to continue through 2003.
Overall market volumes have not
increased and are expected to stagnate
until
the second half of 2004.
Deliveries of electromechanical cliq
cylinders began in the fall of 2002 and
very good sales growth in this high-
value segment due to the sophistication
of the German market and the demand
for high-security locking solutions
bodes well for future sales.

In 2003, the best chance for sales
growth is seen in system products –
such as exit door and masterkey
systems and electromechanical locks –
rather than standard products which

include electric strikes, cylinders and
hardware. Sales in the residential seg-
ment were stable in 2002. These sales
are expected to show good growth in
the coming year.

In the Netherlands the recent take-
over of vema, which specializes in
electromechanical products, provides a
strong base by which to lead this market.
The major restructuring program
for Lips is complete and has seen a rise
in sales and significant improvements
in both delivery times and service over-
all. Ambouw, which sells locks and
building hardware in the Netherlands,
mostly made by ikon and other sister
companies, has begun to see the results
of its new business redesign plan
adopted in 2000. It has reduced stocks,
dramatically speeded up deliveries and
generated a rapid increase in sales to
customers.

In Switzerland the integration of
keso, which produces high-security
cylinders, has gone according to plan
and resulted in stable sales growth.
Steps to further rationalize the business
continue. The Swiss operation expects
to see good profit growth in this mar-
ket in 2003 and 2004.

In Austria, assa abloy operations
have been integrated into one opera-
tion which will become one of the
leading lock companies in this market.

ASSA ABLOY / 2002 3 1

South Europe:

Continuous operational
improvements

After a promising first half year which
showed respectable growth in many
product sectors, volume sales for the
Group’s South European region de-
clined somewhat in the latter part of
the year. Bo Dankis, Group Vice
President
for South
responsible
Europe, which encompasses France,
Spain, Portugal, Italy and Belgium,
says growth prospects for 2003, while
looking rather more hopeful, remain
irregular throughout the region.

“We don’t foresee any dramatic
improvements in the economies in our

region over the next 12 months. The
downturn in the French economy, the
biggest in our region, shows no imme-
diate signs of improving. Despite the
business climate, however, the French
group succeeded in improving volumes
at the same rate as last year. The re-
organization of our sales approach
towards the large French diy sector has
started to bear fruit, and 2002 saw
double-digit growth in that sector.

“Italy and Spain, which rely on
exports to the Middle East and Latin
America respectively, are struggling to

South Europe:
Sales by companies in the South Europe organization
in 2002 amounted to SEK 3,723 M (2,905). Organic
growth for comparable units was 1 percent.

Trends

SEK M

Sales

Average no.
of employees

2002

2001

2000

1999

1998

3,723 2,905

2,232

1,682 1,559

3,874 3,099

2,744

2,189 2,013

Sales by product group

Security doors
and fittings, 12%

Industrial locks, 3%

Electromechanical
locks and electronic
locks, 4%

Mechanical locks,
lock systems and
accessories, 81%

32 ASSA ABLOY / 2002

maintain last year’s export growth
levels. The overall hardware market in
Italy slowed in 2002, although sales to
professional locksmiths and diy pur-
chases increased.

“Volumes fell, as a consequence of
the increased focus on the domestic
markets, for all companies except
mab, the door-closer company that we
acquired in 2001. In Spain domestic
demand remained quite strong. Belgium,
which has traditionally depended on
sales generated from large eu-financed
projects, is also experiencing lower
demand than a year ago.”

New initiatives

“In light of these challenging market con-
ditions throughout the region we have
initiated measures aimed at reducing
costs,” Bo Dankis says. “These include
cutting inventories, closing duplicate offi-
ces, rationalizing delivery depots in Paris
and the south of France and making other
personnel reductions.

“Some major efforts to improve oper-
ations have proved very successful.
At Bezault in France, for example, appli-
cation of Kaizen methods has achieved
productivity increases of up to 30 percent.
All companies have continued to reduce
inventory while improving delivery time
and delivery precision.

“Operational excellence and efficient
delivery routines are crucial to customer
satisfaction. We are now about to launch
new-product initiatives in all markets that
we believe will generate higher sales in
some of our main product segments.
These include new multipoint locks, some
new cylinders, new hardware, handles,
panic exit devices and electronic locks.”

Developments in all markets

In France jpm is launching its new
generation of panic exit device techno-

South Europe:

Spain’s largest company, Telefonica,
is the leading supplier of telecommu-
nications to Spain, Portugal and Latin
America, with a customer base of over
82 million people. TESA, Spain’s
leading lock company, is its chosen
provider of access control and egress
solutions for its offices.

“The challenge was to control the
access of staff, maintenance per-
sonnel and visitors strictly but also
conveniently,” says Miguel Garcia
Juncos, Manager responsible for
Security Installations. “At the same
time fast, safe egress had to be poss-
sible.” The solution is based on re-
mote opening of the perimeter doors
from an interior desk where access
permissions are granted.

its position as market leader in this
upper market segment. Dupéray is also
concentrating on developing sales of
electromechanical products. The launch
of the cliq electronic cylinder will be a
major event in 2003. Increasing sales of
Abloy’s protec cylinders is another
growth objective.

Management development

“In 2002 our region also increased its
investments in specification services for
end-users and architects,” Bo Dankis
says. “New recruitments and new soft-
ware tools have been especially appre-
ciated at Dupéray in Belgium, Vachette
in France and tesa in Spain.

“Most of our companies are now
organized into Business Units and
Profit Centers. jpm in France is the
latest company to undertake a major
organizational
improvement. The
management development programs
we initiated some years ago – including
our regional Management Training
Program – have successfully supplied
new managerial talents to the various
reorganizations carried out during
2002.”

ASSA ABLOY / 2002 3 3

logy targeted toward shopping malls,
cinemas and other public spaces, which
is likely to be well received throughout
the region. Stremler enjoyed good
growth from recently launched locks
and fittings for glass doors and a new
product line for aluminum gates. Late
in the year Vachette started to export
its latest multipoint locks, based on a
technology entirely new to France.
Bezault’s new lines of handles won the
design prize at the Batimat trade fair in
Paris and valuable orders were taken.

Apart from its steps to cut costs
and to increase organic growth, assa
abloy France has completed the acqui-
sition of Initial, the French distributor
for Abloy of Finland. This acquisition
will enhance the Group’s presence in
the important electromechanical sector
and serve as a platform for the abloy
products, including masterkey cylin-
ders, in France.

In the hospitality sector, the cre-
ation during the year of assa abloy
Hospitality France will strengthen the
Group’s ability to make complete
offers including products other than
hotel locks.

In Spain the most notable develop-
ment was the full integration of tesa
into the Group. tesa is the clear mar-
ket leader on the domestic market and
a major supplier of residential locks.
The company produces a comprehen-

sive range of multipoint security locks,
cylinders, electromechanical locks and
knob sets. A large part of its sales volume
goes to export.

Domestic sales of mechanical locks
by both azbe and tesa remained steady.
Increased efforts are in hand to promote
sales of higher-end, more intelligent
electromechanical products where there
is better potential for long-term growth
and higher margins. The Group’s market-
leading position and dedicated work by
the companies have produced a clear
trend towards higher security in Spain,
manifested by growing sales of high-
security multipoint locks and masterkey
systems The Spanish companies are also
exploring cross-selling opportunities
that promise to have an impact through-
out the South Europe region in 2003.

In Italy the domestic market started
the year slowly, accelerated during the
summer but fell back later in the year.
Export volumes for the Group’s Italian
companies fell as a result of depressed
markets. The fragmentation of the
Italian lock industry and its high
dependence on export continue to exert
pressure on prices and allow standards
to remain low. However, the refocus on
the Italian market with the aim to drive
the trend towards higher security will
achieve results over time.

In Belgium Litto is focusing strong-
ly on masterkey systems to consolidate

United Kingdom:

Flat market focuses concentration
on internal development

“A priority this year was to look over
our product range and expand it with
complementary products from other
Group companies,” says Geoff Norcott,
Group Vice President responsible for
the UK. “We have also created a clear
set of brand identities and continued to
educate the market and develop our
own management training. The fairly
flat British market has enabled us to
concentrate on establishing a strong
base for the future.”

The uk regional organization was
formed after the Yale acquisition in
2000 and now comprises six operating
companies with seven
individual
brands. Geoff Norcott explains how

the brands coexist and cover the uk
lock market. “Our aim is to make each
brand unique to its particular custo-
mer sector, so there will be little com-
petition between them on the domestic
market.

“It’s pretty clear actually. Assa,
Abloy and Grorud, originally subsidia-
ries of the Group’s Scandinavian
companies, all focus on the high-end
market, but Assa concentrates on
specifiers, Abloy on locksmiths and
Grorud on the oem market for door
and window fittings. c e Marshall is a
specialist manufacturer of automobile
locks and Chubb Locks Custodial
Services a specialist manufacturer of

United Kingdom:
Sales by companies in the UK organization in 2002
amounted to SEK 1,259 M (1,281). Organic growth
for comparable units was 1 percent.

Trends

SEK M

Sales

Average no.
of employees

2002

2001

2000

1999

1998

1,259 1,281

665

270

266

1,212 1,329

704

128

132

Sales by product group

Security doors
and fittings, 6%

Industrial locks, 6%

Electromechanical
locks and electronic
locks, 8%

Mechanical locks,
lock systems and
accessories, 80%

34 ASSA ABLOY / 2002

detention locks. Security Products uk
focuses its Yale and Union brands
on mass-market sales – Yale on the
residential side and Union on the
commercial side.”

In 2002 the uk market showed slow
overall growth, with little activity in
new construction. Although the com-
mercial and residential markets were
both relatively quiet, Security Products
uk managed to increase sales value after
several years of reduced sales. For most
companies, sales by volume remained
at similar levels to last year. The excep-
tion – the car locks manufacturer
c e Marshall – is heavily dependent on
Ford, which had a poor year.

“We will improve profitability by
moving assembly to the Group’s other
car locks manufacturer, fab in the Czech
Republic,” Geoff Norcott says. “The
lower cost of manufacturing in East
Europe will free us to concentrate on
marketing, sales and design in the uk.”

The Professional’s Choice

In the commercial sector, Security
Products uk is aiming to regain market
share by relaunching the Union brand
as ‘The Professional’s Choice’ and offe-
ring a range of new, redesigned and
complementary products.

“This involved cooperation with
many other Group companies,” says
Geoff Norcott. “We have worked with
Lockwood in Australia, Guli in China,
Yale and Corni in Italy, keso in
Switzerland and Assa in Sweden. An
excellent example of what Group
strength can accomplish. In addition,
our new
Internet-based network
includes specification software to help
architects select the best products for
their needs.”

Union has also designed a new
styling package, offered to locksmiths

and builders’ merchants to help them
create a professional image for their
business. It includes everything from
product packaging and point-of-sale
display material to clothing and
stationery, all conforming to a uniform
new look. The response from customers
has been highly positive. Union also
supports its network of locksmiths in
upgrading the service they can offer to
specifiers by providing direct lines
to VingCard, Besam and Abloy.

Product ratings

“On the residential side the flat market
has given us the opportunity to con-
solidate and improve our position,”
Geoff Norcott continues. “A new
product rating system, first introduced
for padlocks, is now being extended to
Yale’s whole residential range.”

The system aims to guide customers
to the correct lock selection for their
application. Symbols on the package
quickly answer questions about what
the product is, how it should be used,
its design and the level of security. The
original padlock system was devised in
Australia by the Group company
Lockwood, aided by local market
research and evaluation of existing
international Standards. It became the
basis of a new Australian Standard
covering strength, corrosion-resistance
functional performance and
and
methods of testing them.

The high-security market in Britain
is relatively small, but Group companies
have a large share of it. “Growing the

A massive new building project to
provide 600 additional student resi-
dences for Britain’s Oxford Brookes
University by September 2003 is cur-
rently underway. Jason Preece from the
project’s specifier, Executive Security,
has selected the Yale Pro-key master-
key system for the whole site, UNION
lock cases for the bedrooms and card-
lock systems on the doors.

“I chose Security Products UK for
their products’ reliability and the quality
of supply. All the wholesalers hold Yale,
Chubb and UNION brands.”

market itself is our prime aim,” Geoff
Norcott comments. “We have work to
do to make British customers under-
stand the importance of high security
and the link between security and
safety.” Two major groups of high-
security products, Abloy’s protec disk
cylinders and a keso high-security
cylinder marketed under the Union
brand, were launched during the fall,
and Grorud and Security Products uk
are currently developing more secure
multipoint locking systems to increase
oem sales to door and window manu-
facturers.

“The uk government’s Private
Finance Initiative may also give us
some good opportunities in the deten-
tion and education sectors,” Geoff
Norcott believes.

Education and training

assa abloy uk works to influence the
market through distributors as well as
end-users.

“We encourage distributors to sell

more high-value-added products,”
Geoff Norcott says. “That benefits
them, us and the customers, because
cheap imports carry low margins as
well as often being inadequate. The
new padlock and residential lock
ratings have been a great help in
educating the British market.

“We have also continued with our
mobile exhibition, first launched at the
start of the Volvo Ocean Race. It tours
the country visiting trade shows and
supporting local initiatives. We have
assisted several local authorities to
utilize funding to improve unsafe areas
in an advised way, and the road show
has visited these communities to
inform them about the principles of
secure homes. We visited 32 other
locations during the year with the
Neighbourhood Watch Association,
which now covers some 6 million
British homes. We also support the
police initiative Secure by Design.

“Internal education and training are
vital too. Representatives from all our
companies attend various international
Group councils and are responsible for
spreading the information that they get
there in the uk organization. Our own
management training programs have
been extended. Employees who show
potential are sent on courses with
modules covering Group philosophy,
the market, product development,
market research, the manufacturing
process and financial management.”

ASSA ABLOY / 2002 3 5

North America:

Growth across the board
despite a slow market

With more than 30 operating units and
10,000 employees, assa abloy North
America is by far the largest of the
Group’s regional organizations. In
2002, despite continuing recession
in the usa and a sustained decline in
new construction, the North American
organization achieved a modest rate
of growth, and all its operating
groups, without exception, showed
considerable improvements in profita-
bility and operational efficiency.

“To achieve growth in a year like
this is pretty amazing,” says Clas
Thelin, Group Vice President responsi-
ble for North America. “We have seen

six successive quarters of declining
new construction, which is one of the
drivers of our business. Commercial
construction has fallen, but fortunately
institutional construction, which is
particularly important for us, was
stable. And aftermarket sales provide
an important stabilizing factor in the
lock industry, buffering the effects of
changes in the construction market.

“The shock of 11 September resul-
ted in a number of short-term measures
that had only limited impact on equip-
ment or hardware. The longer-term
consequences that we foresee as we
move forward are systems and hard-

North America:
Sales by companies in the North American organiza-
tion in 2002 amounted to SEK 10,465 M (9,682).
Organic growth for comparable units was 2 percent.

Trends

SEK M

Sales

Average no.
of employees

2002

2001

2000

1999

1998

10,465 9,682

5,409

3,721 2,916

9,846 7,133

4,259

3,305 2,715

Sales by product group

Security doors
and fittings, 31%

Industrial locks, 2%

Electromechanical
locks and electronic
locks, 6%

Mechanical locks,
lock systems and
accessories, 61%

36 ASSA ABLOY / 2002

ware upgrades that will have a positive
influence on the growth of our business.”

Success of US restructuring

The restructuring of the US organization
in July 2001 has proved a highly success-
ful first step
in exploiting Group
strengths. Five product-related manu-
facturing groups were formed, support-
ed by two main sales and marketing
organizations. Within each manufactur-
ing group there are councils devoted to
cross-learning of best practices and
to joint development of products using
common technology. Cross-sourcing of
components and complete products to
optimize manufacturing investment is
increasing within the groups, within
North America and across the whole
assa abloy Group.

In the Door Group, for example,
there has been heavy consolidation.
One factory making custom frames has
closed, with investment concentrated
on a fully automated production plant
in Mason City, Iowa. The two biggest
companies, Ceco and Curries, will
continue to compete on the market, but
have rationalized their development of
niche products. Thus Ceco will carry
forward the development and certifica-
tion of certain categories of doors such
as for hurricane requirements, while
Curries will develop a decorative,
textured steel door that looks like
wood, sourcing it for both companies.
The labor-intensive manufacture of
steel-stiffened doors has moved to
Mexico, where labor is cheaper.

The cross-learning and bench-
marking process has probably made
most progress in the Architectural
Hardware Group, the largest of the
manufacturing groups. During the year,
units with only limited previous expo-
sure to lean manufacturing processes

North America:

“In a casino, security must blend
with the surroundings but provide
maximum protection so that our
customers and employees feel secure,”
says Marshal Szalay, Head Locksmith
of the Mohegan Sun gambling resort
in Uncasville, Connecticut, USA.

“At the same time, strength and
durability are vital. People come and
go round the clock. Some doors cycle
thousands of times a day, and this
requires door hardware that can
absorb tremendous abuse. For our
recent expansion we looked for a
security solution to fit our world-class
image. Sargent and Timelox helped us
achieve this with products that com-
bine old-fashioned strength with
industry-leading technology.”

for high-security

nationwide program focused on safer
workplaces in conjunction with the
National Crime Prevention Council
(ncpc). assa abloy is also helping to
drive the development of a new ansi
Standard
locks,
currently being written by the Builders’
Hardware Manufacturers Association.
On the electromechanical side, new
products have created opening solu-
tions that are secure as well as safe.
The Electromechanical Group has
shown one of the highest growth rates,
especially in non-residential applica-
tions. Again, educating the market is
vital. “If you change a standard exit
device to an electromechanical device,
you can for example introduce a 15-
second time delay and alarm, which
adds significant security without jeop-
ardizing fire safety,” says Clas Thelin.
assa abloy is also supporting and
acting as consultant to another ncpc
initiative focusing on school safety.
The Safe and Sound program is being
piloted at 30 schools in Pennsylvania
and Kentucky, with the aim of making
children feel safe and secure. Physical
security is one major component, with
procedures as important as products. If
an incident occurs it must be possible
to move children quickly around the
school or outside while keeping other
areas securely locked.

Good design raises margins

The Residential Group has also shown

ASSA ABLOY / 2002 3 7

and a profit center structure have
taken major steps to get closer to best
practices used in other companies in
the group. Product and purchasing
councils have also been formed, with a
very positive result, to ensure that
the group optimizes its efforts and
capitalizes on the potential inherent in
its size.

Promoting higher security

Compared with other advanced
markets, the usa has always been more
focused on
safe evacuation of
buildings than on security protection.
“Although our High Security Group
has a strong market position, the mar-
ket for mechanical high security is
smaller than in Europe,” says Clas
Thelin. “The challenge is more to
educate the market to appreciate the

benefits than to sell specific products.
People in the us don’t realize how
easily ordinary keys can be copied – or
that a high-security key system will
cost only usd 20–40 a door more than
a standard system.”

As a result of initiatives directed at
residential and institutional customers,
virtually every company, not only
in the High Security Group, is now
showing faster sales growth in high-
security products than total growth.
The traditional companies of the
Architectural Hardware Group are
moving from just supplying products
to more of a security consultancy role.
In the Building Security Initiative,
essex has teamed with outside compa-
nies to offer integrated high-security
solutions backed by training and con-
sultancy. Medeco has launched a

North America:

high growth, founded on greater atten-
tion to esthetics. “If you can differen-
tiate yourself through design, margins
are far higher than on basic products,”
Clas Thelin comments. “People are
willing to pay for the right designs.”

Emtek has continued to be highly
successful in selling a wide range of up-
market designer door handles. Now
Medeco’s new series of residential
high-security locks combines their own
cylinder and deadbolt functions, and
strong brand name, with Emtek input
on the design side. The trend is likely
to spread to non-residential applica-
tions such as hotels and prestige offices.

Innovation vital to growth

Ongoing product development is a vital
driver of growth, and the North
American organization continues to
launch innovative products across the
whole spectrum of security. Sargent
has introduced a silver-based anti-
bacterial coating, sarGuard, which can
be applied to door handles and keys in
hospitals, laboratories, schools and
care homes to provide permanent
resistance to microbial growth. For use
with rim-mounted exit devices, hes has
developed a completely new surface-
mounted electric strike that requires no
cutting of the door frame.

In the industrial field Medeco has
developed new lock systems for park-
ing meters and vending machines,
designed to eliminate fraud by money
collectors. The first parking applica-
tion was developed in close collabora-
tion with the City of San Francisco.
The locks for all associated meters use
the same high-security mechanical key
code but have different electronic key
codes. A hand-held computer records
the result of every visit.

In the detention market, Trussbilt

38 ASSA ABLOY / 2002

Securitron, hes and effeff, have made
major inroads in Canada. In the same
period McKinney’s hinge business in
Canada has grown from almost not-
hing to seven-digit sales.

Canada has traditionally had a
well-developed high-security market,
proportionally larger than in the usa,
and the Group has a solid presence
through Medeco, Abloy, Mul-T-Lock
and assa. Previously most high-security
sales were on the aftermarket, but Yale-
Corbin Canada and Sargent both have
specifying power in the new-construc-
tion market, and as a matter of policy
now include a high-security mechanical
key system as the preferred option for
every job. This policy is significantly
increasing penetration into new projects.

Integration and
outsourcing in Mexico

With 100 million people and a strong
infrastructure, Mexico is now the world’s
twelfth-largest economy. After the
change in regime in 2001 the economy
showed limited growth that year, with
very much a ‘wait and see’ attitude.
In 2002, however, growth increased
considerably, which must be seen as a
sign that the new President, Vincente
Fox, a former international business-
man, has been well received as the
country’s leader.

assa abloy’s three Mexican com-
panies, Phillips, tesa and Yale, shared
one of the best growth rates in the
North American organization. Inte-
gration progressed well, with cross-
learning, cross-sourcing of products
and coordination of purchasing. The
three companies are jointly involved
in promoting higher security and in
developing a national security Standard.
Mexico also enhanced its position
as a low-cost and conveniently located

Quinnipiac University in Hamden,
Connecticut, USA was seeking a
user-friendly security solution that
would keep its 3,000 residential under-
graduate students safe and its campus
buildings secure at an affordable cost.
“The combination of VingCard Persona
and SARGENT products gave us
more,” says Jonathon Terry, Assistant
Coordinator of Communications.

“We got durable, 100 percent
dependable locks, operated conveni-
ently by the students’ ID cards rather
than keys. This simplifies our student
check-in process, allows only author-
ized personnel to enter, controls
access to student accommodation
during holiday breaks, and allows us to
audit door activities. And it’s backed by
great customer support.”

has added security ceiling and wall
systems to its steel doors and frames.
The space-saving modules – steel
partitions which are then filled with
concrete – can build complete prison
cells. The first unit has been installed
and it is estimated that one whole storey
could be saved when building an eight-
storey prison. The system is being sold
by Trussbilt itself and also branded for
a large distributor partner.

High-security expansion
in Canada

in
assa abloy’s market position
Canada remained stronger than in the
usa, especially in locks and hardware.
Between them, the Group’s four
Canadian sales companies represent
virtually all the us manufacturing
companies.

Over the last couple of years electro-
mechanical products, primarily from

North America:

for

manufacturing base
the us
companies. tesa manufactures most of
the builders’ range sold by Yale
Residential in the usa. The products
are trucked straight from the factory to
us customers with no warehousing in
the usa, giving significant economies.
Yale Security Mexico continues to
supply a substantial portion of Arrow’s
product range.

A future based on
organic growth

“The highest priority for the North
American organization now is organic
growth,” Clas Thelin concludes. “Each
individual company and each group
has a 3-year plan. Growth areas for the
next year are very clearly defined, and
every project has a designated owner.
Some projects are product-related,
others directed at specific customer seg-
ments or promotional activities. Every
project is followed up on a monthly basis
to make sure it’s on track.

two

“The
sales and marketing
organizations, essex and YSG, are
heavily involved here too. They compete
with each other for sales growth. We
strongly believe in giving customers
more than one option, and this also
ensures that the salesmen retain their
‘brand passion’.

“The usa is a unique market in
having big regional variations
in
economic sentiment. Some regions are
currently showing 20 percent growth
while others are in decline. It is important
to have strong regional managers who
know the conditions and are close to
our distributors. We have therefore
expanded our division of the country
from four regions to eight and appointed
a manager for each region with overall
coordinating responsibility for both
sales organizations.

“The integration of the whole
North American organization received
a major boost from the visit of the
Volvo Ocean Race with two long us

stopovers. Externally we got far more
media coverage than we expected. We
could also offer our customers a once-
in-a-lifetime experience. Sailing is a
minority sport in the usa, so they found
it unusual and exciting to be invited on
board a racing yacht. Internally the
Race generated Group enthusiasm and
solidarity among employees generally,
and especially those who manned the
marquees at the stopovers. The example
of the crew in supporting one another
through crises and illness inspired every-
one, and stimulated the organization to
offer a series of awards, which will now
continue.”

ASSA ABLOY / 2002 3 9

South Pacific:

Good medium-term prospects based
on expanded product offering

“The residential market started the
year strongly but then softened, while
the commercial market started fairly flat
but ended strongly,” reports Geoff
Norcott, Group Vice President respon-
sible for the South Pacific Region.
“Overall, the electromechanical, con-
struction, commercial and residential
sectors all performed well, and we
foresee strong development over the
next two to three years.

“We are beginning to see the fruits
of the three-year strategy we initiated
in 2001. Our aim was to build our
product range rapidly through co-
operation with other Group companies,
concentrating in particular on higher-

Steve Burton, Commercial Sales Rep-
resentative for Lockwood Security
Products, and Peter Hunt, Manager of
Building Services at the Melbourne
Museum.

South Pacific:
Sales by companies in the South Pacific organization
in 2002 amounted to SEK 1,138 M (841). Organic
growth for comparable units was 10 percent.

Trends

SEK M

Sales

Average no.
of employees

2002

2001

2000

1999

1998

1,138

841

772

590

1,496 1,098

1,004

1,111

–

Sales by product group

Security doors
and fittings, 33%

Industrial locks, 5%

Electromechanical
locks and electronic
locks, 9%

Mechanical locks,
lock systems and
accessories, 53%

40 ASSA ABLOY / 2002

value products. We have successfully
exploited Group strengths in these
higher-security technologies. Two good
examples are the 9000 series panic exit
devices based on products from jpm in
France and the Twin keying range
of locks based on designs from Assa
in Sweden. Both are selling well. As
another facet of the strategy we are
pushing for higher security Standards
in the Region and taking a very active
part in their formulation.

“For lower-end products such as
window stays, we are exploiting the
low manufacturing costs of Guli in
China to keep us competitive on price.”

Improving residential security

The Group’s acquisitions of Lockwood
and Interlock in recent years have
raised the importance of the residential
market.

“Security in the South Pacific
Region has traditionally been at a low
level, more concerned with casual
protection than serious deterrence,”
Geoff Norcott says. “We are now
making moves to change that.”

In Australia, for example, Lock-
wood is working with the Housing
Industry Association to increase security
in newly built homes. The company
has developed a dual-purpose high-
security locking system for houses in
course of construction. This will success-
fully reduce the problem of thefts from
sites and result in lower insurance
premiums for builders. On completion
of building a single registered key is
handed on to the purchaser of the
property.

In New Zealand, Interlock has
initiated a Window Service Initiative
aimed directly at householders. A fleet
of service vehicles covers the country,
crewed by expert technicians who can

advise on security needs in different
environments and install additional or
better window fittings as appropriate.
Demand has exceeded expectation and
sales are growing rapidly.

The assa abloy companies also
work closely with police forces and
Neighbourhood Watch associations in
initiatives to educate the public and the
retailers who sell to them.

Complete solutions

“In the commercial sector, Abloy
Security and Lockwood – with quite
different solutions – together hold a
major share of the high-security keying
market,” Geoff Norcott says. “They can
bring their influence to bear in raising
security levels. With its augmented
expertise
in proximity and card-
operated locks from hid, Indala and
Timelox, and now (with Besam) in
door automatics, the assa abloy
Group is in a strong position to offer
public building specifiers complete
solutions to their security and access-
control problems.”

Both Lockwood and Interlock have
significant oem contracts in Australia
and New Zealand, through which they
influence the first-fit market, while
Interlock has a series of large, long-
term oem contracts with window
manufacturers in the usa. Interlock’s
us sales remained strong in 2002,
although sales to Japan softened.
Specification activity in South East
Asia is expected to improve next year,
which will benefit several companies.

“We are trying to import the philo-

The Melbourne Museum in Australia
needed a patented high-security
keying system to secure the historical
assets of the State of Victoria.

“We chose Lockwood Twin because
it meets our stringent requirements,”
explains Peter Hunt, the Museum’s
Manager of Building Services. “We
have found the Twin Key robust and
easy to use, and the colored-button
identification very useful. Dealing with
a large, reliable, professional company
based locally in Victoria was a bonus.”

sophy of Emtek in the usa into the
South Pacific Region,” Geoff Norcott
says. “They have been highly successful
in marketing top-end residential door
hardware to specifiers by offering their
customers individual designs and a
very personal level of service.”

Cooperation across the world

Because Geoff Norcott heads both the
UK and South Pacific regional organi-
zations there has been particularly
close collaboration between them.

Lockwood’s padlock rating system,
which formed the basis of the new
Australian Standard and resulted in
substantially increased sales, is now
being used by Yale in the uk and is
being extended to residential door
locks in the uk diy market.

Lockwood and Trimec in Australia,
and Lockwood Arrow in New Zealand
with its door-closers to the us ansi and
ce European Standards, are all contri-
buting to the re-launched Union range
of Security Products uk, which is
targeted at commercial markets in the
uk, the Middle East and elsewhere.

Education and pride

In all the South Pacific manufacturing
companies, there is ongoing work to
reduce costs and improve response to
customer orders. Significant inventory
reductions are expected to continue
with the application of the assa abloy
‘Replenishment Model’ software. At
Lockwood, a Facility Optimization
Audit being carried out by Honeywell
has resulted in the building of a treat-
ment plant which purifies and recycles
waste water from the electroplating
process, thus eliminating problems of
disposal, meeting new environmental
requirements and reducing the usage of
expensive materials.

“We already felt part of the Group
before the Volvo Ocean Race,” Geoff
Norcott maintains. “In our case we
used it more as a vehicle to educate the
workforce than for integration as such.
But the impact it created globally and
on our customers here was so large
that it generated great feelings of pride
among all of us. During the vor we
sponsored the Australian Paralympic
Team. To perpetuate the profile develo-
ped during the vor, assa abloy South
Pacific now sponsors the annual
dry-river-bed regatta (the Henley On
Todd) in Alice Springs, central Australia,
supporting Rotary International and the
Australian Breast Cancer Institute.”

ASSA ABLOY / 2002 4 1

New Markets:

Significant improvements in
markets across the world

Asia:

Strong improvement despite
market conditions

Despite the persistent economic slump,
assa abloy Asia has managed to boost
its net profits due to a significant shift
in product offering to the higher-end
range.

C.K. Jeang, President and ceo of
assa abloy Asia, explains: “By gradu-
ally eliminating low-end items from
our product range and replacing them
with higher-value ones, we achieved a
35 percent rise in net profits in 2002,
and continue to enjoy a strong opera-
ting cash flow.

“These higher-grade products con-
sist of stainless-steel knob-sets and
handle-sets, door closers, high-security
rim locks and a growing range of diy
safety and security products. They are
designed to meet the security Standards
that now apply both in China and in
our leading export markets in North
America, the Far East and Russia.

“To educate our customers, employees
and architects about the benefits of the
latest high-security technologies, we have
established the assa abloy Training
Institute in Singapore, and Security
Centers in Bangkok and Hong Kong.”

In addition, significant progress has
been made
intra-Group trade.
Product synergies include the French
Touch security package for the Asian
markets, abloy lock, with guli stainless-
steel furniture, and assa cylinders with
Yale ansi-graded locks. Cross-selling
and buying opportunities range from
the Million Program door-closer project
spearheaded by Guli to the 6000-Series
knob-sets produced for the North
American DIY and builders’ markets,
and stainless-steel trims for northern
Europe.

“On the cost side, we have institu-
ted staff reductions to bring the size of
our organization in line with current
economic realities,” says C.K. Jeang.
“The Profit Center structure and cell
manufacturing at Guli were implemen-

ted to streamline production and raise
operating efficiency.”

Rising standards in China

the company

The Asian lock market is highly
fragmented, particularly in China
where Guli’s 25 percent share makes it
the market leader. The Guli factory
was iso 9001 certified in 2002, and
the Chinese Government recently
for
recognized
its
product quality and
innovative
designs. As the nation’s standard of
living steadily rises, Guli is working to
educate the market on the importance
of higher security standards. China is
also making a concerted effort to raise
its hardware standards to meet the
World Trade Organization compliance
target set for 2004, as well as spending
huge sums on infrastructure for the
2008 Olympic Games.

Zheng Jie is one of first traders to bring
the western DIY concept to China.
He transformed his traditional hard-
ware distribution center in Shanghai to
a HomeMart DIY store two years ago.
“Locks act like security guards at
your home,” he says. “And we continue
to select Guli as our long-term partner
because our customers have confi-
dence in the quality of GULI locks.”

42 ASSA ABLOY / 2002

New Markets:

very latest high-security products. It
also provides us with an excellent
training ground for our staff. We have
sent people to New Zealand, Australia
and the usa for factory visits. These
cross-learning experiences have proved
invaluable for the whole company in
terms of new ideas and company
morale.”

Israel:

Market leader with
a global reach

Faced with a deepening recession
at home that impacts virtually all
customer segments, Mul-T-Lock, the
market-leading lock company in Israel,
has managed a remarkable increase in
domestic sales and is continuing to
grow its business in 70 countries
throughout the world. The only
significant exception is Japan, which
saw a marked decrease in demand for
high-security
locks. Mul-T-Lock
President and ceo, Tzachi Wiesenfeld,
says that despite the rather gloomy
picture at home, Mul-T-Lock’s overall
performance for the year has exceeded
expectations.

Tailored solutions

“We are a global company operating
from a small domestic market in a
prolonged recession. New construction
in Israel has fallen by more than 50
percent since 1995. Nonetheless we
increased our domestic sales by ten
percent in 2002 through aggressive
selling primarily in the commercial
sector. Fortunately for us, a majority of
our sales go to export markets in
western and eastern Europe, North
America, Asia and Japan. We have
succeeded well in these areas thanks to

ASSA ABLOY / 2002 4 3

Southern Africa:

Sales growth aided
by building recovery

assa abloy South Africa, the country’s
leading lock company, has chalked up
another successful year marked by 25
percent growth in sales and a strong
to 2001. John
profit compared
Middleton, President of the company,
says the positive turnaround in the
residential building sector and timely
anti-dumping legislation to discourage
cheap Asian imports have been a big
boost to business.

“The South African lock industry
is closely linked to the building sector
which has shown a solid comeback
after two years of recession. This is
particularly true of government refur-
bishment of buildings. Our remaining
sales are split between commercial
construction, the retrofit market and
diy products. diy continues to grow
the rapidly
well, responding
growing number of middle-class house-
holds
in South Africa and their
demand for higher levels of security.
For all these reasons 2003 looks like
being an even better year.”

Market leader

To capitalize on its leading position in
the fragmented South African market,
the company targets specific market
segments via two Group brands, Yale
and Union, and two national brands,
Esco and Solid.

John Middleton: “We have now
finalized the relaunch of the Yale
brand platform for our complete range
of retail and DIY products, which
account for more than 20 percent of
our sales. Union and Solid will repre-
sent products in the architectural and
commercial segments and Union and

“With more than 400 people employed,
we have extremely heavy daily foot
traffic in and out of the buildings,”
says Daniel Lengosane, Director of
Internal Security for the Union Build-
ings in Pretoria, the administrative
seat of the South African government.
“We therefore needed a highly
advanced locking system to secure
the building, its people and the infor-
mation it holds. Security is the nerve
center of any organization. The use of
Mul-T-Lock cylinder locks made it
possible to assign master keys to those
in senior positions while using servant
keys for non-sensitive areas.”

Esco the wholesale segment. Other
Group companies’ products sold in
South Africa are effeff and hid in
access control and Mul-T-Lock to
locksmiths. Altogether this creates a
very strong platform for promoting the
trend toward higher security.”

The company is working on several
fronts to promote higher standards of
security. In cooperation with leading
insurance companies and standardiza-
tion bodies it is introducing a new lock
grading system based on European
Standards. It also offers a range of
specification services to architects.

“Being part of the worldwide assa
abloy Group has many strategic
advantages. It enables us to source the

the year. We are also continuing to
strengthen and diversify our product
portfolio in Israel by importing an
increasing number of complementary
products from our sister companies
within the Group. These include exit
devices, electric strikes and door
closers.”

“All companies except assa abloy
Poland show organic growth, and total
sales increased by 11 percent to eur
43.5 m in 2002. Hungary and Turkey
show particularly good growth, but
these are countries where we still have
limited presence. Our sales in Russia
continue to develop well.”

New Markets:

our total commitment to satisfying a
wide range of specific customer
demands. This calls for tailor-made
lock solutions, ever-shorter lead times
and a highly dedicated sales network.”

Product diversity

Looking ahead, the President sees
promising growth abroad on a number
of fronts. “We are very excited about
our company’s increased focus on
electromechanical locking. We have
developed an electromechanical cylin-
der, Intelleqt, which is based on the
Group’s cliq technology. In western
Europe alone we see the demand for
these locks growing 4-5 times faster
than for mechanical security products.
In eastern Europe we anticipate a rise
in sales by as much as 50 percent. On
our largest markets in North America,
France and the uk we anticipate a 15
percent growth in sales in 2003. And
we expect to see a turnaround in Japan
in the second and third quarters of

Eastern Europe:

Cooperation on a global level

While the new eastern Europe is grow-
ing up, assa abloy’s organization in
this region is characterized by an entre-
preneurial spirit and an eagerness to do
business.

“The market has been pretty good
during the year,” says Lars Lilja,
Market Development Director in assa
abloy’s East European organization.
“The exception is Poland where the
political and economical climate remains
bad and there is little new construction.

Emergency exits show the best
growth on all markets. In general,
insurance companies and investors
have
safety
demands and require an upgrade of
security solutions, whilst more people
now have more to protect.

security and

raised

A trend in these countries is that
they are tending to become more
sophisticated since many are candi-
dates for membership of the European
Union. “Through our local companies
and organizations in the Czech Repub-
lic, Latvia, Lithuania and Russia we are
involved in developing and influencing
security standards by cooperating with
insurance companies, police depart-
ments and other authorities,” says Lars
Lilja. “And most of our companies are
now iso 9001 certified.”

assa abloy’s Romanian compa-
nies, Urbis International and Urbis
Security, have successfully taken over
the manufacturing of products previ-
ously made in countries with higher
labor costs. “The loss-making manu-
facturing by Grorud in Norway was
moved to Urbis International during
last year,” says Lars Lilja. “Parts of the
manufacturing of products for the
German companies Melchert and
Dörrenhaus are also now being taken
over by Urbis International and Urbis
Security. And Assa in Sweden has manu-
factured its door hardware accessories
in Romania for a couple of years now.”
The East European organization is
also utilizing the Group’s strengths in
cross-buying. “The Czech company
fab has expanded its product portfolio
with door closers from Abloy in
Finland, panic exit devices from jpm in
France and door hardware from
Bezault in France,” Lars Lilja explains.
In many east European markets,
Yale is a sleeping brand – a brand that

New Markets:
Consolidated sales in New Markets in 2002 amounted
to SEK 1,952 M (2,029). Organic growth for comparable
units was 4 percent.

Trends

SEK M

Sales

Average no.
of employees

2002

2001

2000

1999

1998

1,952 2,029

981

354

186

6,173 6,243

3,296

1,774 1,936

Sales by product group

Security doors
and fittings, 5%

Industrial locks, 14%

Electromechanical
locks and electronic
locks, 3%

Mechanical locks,
lock systems and
accessories, 78%

44 ASSA ABLOY / 2002

New Markets:

is recognized by many people but has
no particular presence. Now the Group
is planning to relaunch the Yale brand
on the retail market, initially in Poland
and Hungary. “We are introducing the
Yale padlock series, which has a rating
system for grading security perform-
ance and aims to help customers choose
the correct padlock for any applica-
tion,” says Lars Lilja. The rating system
was created by Lockwood Security
Products in Australia, then adopted and
further developed by assa abloy uk.
the Group
acquired both uba Almadis, for many
years Assa’s distributor in Lithuania,
and Radikovic in Slovenia, a distributor
for effeff focusing primarily on high-
security solutions.

In October 2002

South America:

High security means
big business

the highly

In
fragmented, price-
competitive Brazilian lock market, from
where assa abloy runs its South
American operations, taking the high
road in security has made all the
difference. Group company La Fonte
made a strategic decision to focus on
the manufacture and sale of high-
security products targeted at the top
end of the market. Francisco Bastos,
President of La Fonte, says it has proved
a resounding success.

“We have just completed the best
year in our company’s history, breaking
all previous sales records. In 2002 we
achieved a 40 percent rise in overall
sales compared with 2001, and 2003
looks like being better still. Our
domestic sales have increased by 25
percent and exports to North America
and other South American countries are
up by more than 50 percent.”

lock sets, auxiliary locks, exit devices,
hinges and lever handles in attractive
contemporary designs, sought-after in
this style-conscious market. Concerns
over rising crime rates also favor
companies that can offer a wide range
of reliable high-security products.

“Even though only 20 percent of
the Brazilian population can afford
our products we have a high market
potential because of the sheer size of
the country,” says Francisco Bastos.
With 170 million people,
the
Brazilian economy is the biggest in
South America, representing some
50 percent of the continent’s gdp.
La Fonte also has a strong foothold
in many neighboring countries.

La Fonte has gained much by being
part of the assa abloy Group. Cross-
learning has helped the company to
adopt a number of best practices in
production and administration, and it
actively pursues cross-buying and sell-
ling opportunities. It currently imports
bored locks from China, door closers
from the usa, panic exit devices from
Italy, electromechanical locks and pad-
locks from Finland and technology for
high-security cylinders from Israel.

When the contractors Hochtief
were building the new main offices
of BankBoston in São Paulo,
Brazil, they came to La Fonte for
the more than 2000 locks required
for the project, plus exit devices,
door closers and door hardware.

“Security and safety were
equally important considerations,”
says Contract Manager Teodoro
Andrade. “We chose La Fonte’s
products because of their interna-
tionally recognized quality as part
of the ASSA ABLOY Group, and for
the guarantee of good assistance
during the project and technical
support afterwards.”

Poli has a strong presence in most
important diy stores and home centers
in Chile. During 2003 the company
will implement a program to increase
its sales through the locksmith channel
by means of training programs and
specially designed in-store displays. On
the export side, high-quality products
designed to meet international require-
ments, especially the new electric rim
lock, are expected to sell well to other
assa abloy companies.

Respected brand

New strength in Chile

in Brazil and

La Fonte enjoys the highest brand
recognition
is the
undisputed leader in setting new and
higher standards in lock technology.
The company manufactures mortise

assa abloy’s recent acquisition of the
Chilean market leader, Poli Cerraduras,
gives it a second manufacturing base in
South America and strengthens its
position in the region.

ASSA ABLOY / 2002 4 5

Hospitality:

Strong unified organization will
optimize offers to customers

A new worldwide organization, assa
abloy Hospitality, brings together the
Group’s four brands serving the
hospitality industry, Elsafe, Timelox,
VingCard and Inhova. The aim is to
better respond to the growing security
concerns of major hotel owners,
operators, and their guests. The new
in
organization was
November 2002 in the usa and will be
extended to other regions during the
first half of 2003.

launched

“assa abloy Hospitality can offer
the best solutions for any security chal-
lenge”, says Dag Schjerven, President
and ceo of assa abloy Hospitality.
“We recognize that each hotel requires

different security solutions. By bringing
together a better and broader product
offering, we can meet our customers’
individual needs in the most efficient
and convenient manner.”

The positioning of the brands has
been carefully considered. VingCard,
the largest hotel-lock company, will
aim for the middle and high-end
segments. Timelox will be a customized
integrator, concentrating on the top
end. Inhova will use its leading-edge
technologies to offer innovative locking
solutions. Elsafe is the undisputed
leader in hotel-room safes with a
product portfolio that addresses all
market segments.

Hospitality:
Sales by companies in the Hospitality organization
in 2002 amounted to SEK 992 M (1,056). Organic
growth for comparable units was -10 percent.

Trends

SEK M

Sales

Average no.
of employees

2002

2001

2000

1999

1998

992 1,056

1,052

965

952

637

634

710

669

605

Sales by product group

Hotel safes, 10%

Hotel locks, 90%

46 ASSA ABLOY / 2002

VingCard/Elsafe – Profitable
outcome despite stubborn
recession

The VingCard-Elsafe Group continues
to suffer from the deep recession that
hit the global hospitality industry after
11 September. But thanks to efficiency
in personnel reductions and ambitious
sales efforts, company profits have
recovered.

Dag Schjerven explains the impact
on the hospitality security industry
which his company helped pioneer:
“In the year and a half since these
tragic events VingCard and Elsafe have
seen a 20 percent decline in global
sales. Our hotel-safe business was
impacted
immediately, with even
sharper decreases to incoming orders.
The drop in the hotel lock business
took longer to manifest itself. Prior to
11 September 2001 the hotel industry
had been growing steadily for nearly
ten years. Fortunately the cruise and
ferry segments of the business have
continued to show good growth
throughout the year.”

VingCard is the leading supplier of
electronic locking solutions for the
hotel and cruise ship industry and has
the largest installed base with some
three million locks sold worldwide.
The prolonged sales recession led
the company to widen its tough
restructuring program, which has
included staff reductions and other
cost-cutting measures to safeguard
profitability. These measures have had
the desired effect. Continued focus on
improved processes within the produc-
tion units has led to additional profit
opportunities.

Profits have now been restored to
pre-September-11 levels. Dag Schjerven
reports rising yields on new-product
initiatives in both the hotel lock and

The spectacular new Rica Seilet hotel
stands on the Romsdal Fjord in Molde
on Norway’s beautiful west coast.
With its location practically in the
water and its striking design in the
shape of a sail, the hotel has already
become an architectural landmark.
Guests in the 164 rooms on 15 floors
have breathtaking views of the moun-
tains of Romsdal.

For the security and safety of its
guests and the protection of their
belongings, the Rica Seilet has chosen
VingCard Classic electronic guest-
door locks with VISION software.

restaurant, gift shop or casino. The
smart card issued to hotel staff gives
the hotel administration unpreceden-
ted flexibility. It can be re-coded each
day to allow cleaning staff access to
individual rooms, certain floors or
other specified areas.

Since its introduction, the Dual
Card system has been substantially
enhanced to encompass the latest tech-
nological advances. Today’s systems
are specially designed for easy integra-
tion into a hotel property management
system offering the highest level of
security. Features can include integra-
ted cameras monitoring all entrances
to the establishment, room-by-room
climate control via infrared links, and
even door-ajar warning. For larger
hotels with thousands of rooms,
Timelox places decentralized keycard
encoder stations at strategic locations
throughout the hotel property.

Timelox also designs a range of off-
line systems for hospitals, educational
premises and industrial and commercial
companies. These systems are cost-
effective, easy to install and offer a
completely new security philosophy for
organizations accustomed to dealing
separately with exterior protection and
interior protection. Timelox can pro-
tect and control whole buildings by
securing more interior doors than
before. For exterior protection the
systems can be integrated with an on-
line system in cooperation with the
Group company Solid.

These commercial systems are
marketed worldwide mainly through
local assa abloy companies, except
for the Persona range for the educatio-
nal market which is marketed in the
usa through a dedicated organization.

ASSA ABLOY / 2002 4 7

safe sectors. Looking ahead to 2003 he
expresses cautious optimism. “We see
early signs of a return to stability in the
market with the possibility of modest
growth ahead. We already see pockets
of growth in certain European countries
as well as the Middle East. Now parts
of Asia are starting to bounce back
and China is becoming an increasingly
active market.”

Continued consolidation in the
hotel sector, with some ten international
hotel chains dominating the industry,
favors companies that can offer a total
security solution and service package
backed by the diverse resources of the
world’s leading lock Group.

VingCard has developed new security
solutions that meet or exceed 2002 ul
Standards in North America. These
include a unique automatic deadbolt for
guest-room doors which is activated
when the door is closed. Elsafe is the
first company to achieve the ul listing
for hotel in-room safes. The new safes
employ a unique hook-shaped locking
mechanism that substantially increases
the security of the product. A new line of

safes based on biometric identification
technology has been introduced to meet
new demands in this age of heightened
security concern.

Timelox – Higher sales in
top-end hospitality market

Despite a slow start to 2002, Timelox
finished the year with a 20 percent
increase in worldwide sales. President
Jan Wabréus says the gradual pickup in
the high-end hotel sector in the United
States has helped his company rebound
from an otherwise sluggish market.
The usa accounts for some 50 percent
of sales.

“Our main hotel products are
designed for hotels in the four to five
star category. Our Dual Card technolo-
gy, which comprises a multi-function
magnetic card for guests and a smart
card for hotel staff, is a unique world-
leading standard for the hotel industry,
first introduced in 1998.”

Timelox’s guest card can not only
be programmed to allow guests access
to their rooms; it can also be used
to pay for transactions in the hotel

Identification:

Good prospects for
contactless access control

assa abloy’s Identification Technology
Group (itg) was created during 2002
to coordinate the Group’s interests
in this increasingly important area,
includes electronic access-
which
control technology.

itg comprises three us manufactu-
ring companies – hid, Indala and Card
Technologies & Services (cts) – plus a
us-based Research & Development
Center and four sales and distribution
companies – Access ID in the usa and
three others in Europe, Asia and Latin
America.

hid and Indala both manufacture
contactless card and reader systems
based on Radio Frequency Identifi-
cation (rfid) technology. More than
95 percent are used for physical access
control. hid is moving towards soph-
isticated high-frequency smart-card
products, exemplified by its newly
launched iCLASS system, while Indala

mainly produces simpler proximity
systems. cts manufactures Wiegand-
technology access-control products
and specializes in value-added security
printing options. These options include
custom artwork and anti-counterfeit-
ing technology such as holograms and
uv inks.

An evolutionary market

“The market rose slightly in 2002,”
reports itg President Joe Grillo.
“Private-sector investment was lower
than in the technology boom years, but
this was partly offset by increased
public-sector spending due to security
concerns in the aftermath of 11
September 2001.

“Our

industry

is evolutionary
rather than revolutionary. Movement
to next-generation contactless smart
cards is slow but ongoing. Looking
ahead, experts predict that electronic

Identification Technology Group:
Sales by companies in the Identification Technology
Group in 2002 amounted to SEK 1,283 M (1,100).
Organic growth for comparable units was 10 percent.

Trends

SEK M

Sales

Average no.
of employees

2002

2001

2000

1999

1998

1,283 1,100

370

345

Sales by product group

Electromechanical locks and electronic locks, 100%

48 ASSA ABLOY / 2002

security and especially access control
will eventually return to double-digit
growth.”

Recent

consolidation

the
industry will drive itg’s growth by
creating large, sophisticated corpora-
tions seeking suppliers capable of
worldwide response and support.
Another driver is the trend for large
companies to combine their it security
and physical security. Thirdly, penetra-
tion of the technology is currently
lower outside the usa. “This gives us
good potential in the whole of Europe,
in Asia (notably China) and in Latin
America,” Joe Grillo says.

Bright future for smart cards

hid’s iCLASS technology represents a
major investment in a true multi-appli-
cation smart card. With its higher data
storage capacity, faster data transfer rate
and greater security based on encryption
of data, the card can be used, for exam-
ple, to control access by opening (or not
opening) doors, to pay for meals in
cafeterias and to log on and off a
computer network. Early orders have
come from the Chicago Board of Trade
and Anixter’s international headquaters.
For added security, iCLASS cards
can carry the holder’s biometric tem-
plate. Three major biometrics compa-
nies are incorporating iCLASS into their
biometrics terminal devices, and hid
will launch its own branded biometrics
readers in 2003.

Leader in advanced technology

itg has helped to improve the manu-
facturing costs of the cliq technology.
The Interconnectivity project is another
important collaborative enterprise.

“The object is to offer a simple
installation solution for everything

associated with a door,” Joe Grillo says.
“A single two-wire bus will connect
the lock, card reader, sensing device,
request-to-exit device and other security-
related items. This standardized inter-
face will help installers to complete
their work faster without errors and
service engineers to detect any pro-
blems when carrying out maintenance.”

“Indala had proved itself over 14 years with a reliable product and good
service,” says Anthony Artrip, Director of Security for the University of
Miami’s School of Medicine. “So when we needed to upgrade our access-control
system, we chose Indala’s ASP technology. We spread the conversion over
two years, and ran parallel systems while it was in progress.”

The new system, which uses electromagnetic proximity cards and readers
instead of the earlier electrostatic technology, is faster, more efficient and more
secure. There are 6,000 cardholders, 300 readers and 1,200 alarm points.

ASSA ABLOY / 2002 4 9

Door Automatics:

Acquiring a leading position
in door automatics

Besam, the world’s leading supplier
of automatic door solutions, was
acquired by the assa abloy Group in
July 2002. Besam is headquartered in
southern Sweden and operates subsidi-
aries in 22 countries along with three
assembly plants. The company sells
and services a comprehensive range of
automatic door systems which include
swing doors, sliding doors, and revolv-
ing doors primarily for the retail,
healthcare and transport sectors.

In four short years since heading up
the global company, Besam President
Peter Aru has altered the fundamental
focus of the 40-year-old firm. From

being a supplier of automatic door
components to intermediaries, Besam
has become a highly proactive compa-
ny offering solutions direct to end-users
to meet a vast array of different appli-
cations.

The art of going unnoticed

“The whole focus of our company, its
technology and its products is based on
making life easier for lots of people on
an everyday basis,” says Peter Aru.
“This philosophy guides our r&d,
design and all our marketing and sales
activities around the world. Our ulti-
mate objective is to supply the custo-

Door Automatics:
Sales by companies in the Door Automatics
organization from 1 July to 31 December 2002
amounted to SEK 1,015 M.

Trends

SEK M

Sales

Average no.
of employees

2002 * 2001

2000

1999

1998

1,015

693

Sales by product group

Service, 35%

Door Automatics, 65%

* The companies within Door Automatics are consolidated from 1 july 2002. Average number of employees

is comparable with consolidated sales. Average number of employees for the full year was 1,402.

50 ASSA ABLOY / 2002

mer with a safe, convenient, reliable
product that goes virtually unnoticed.
An automatic door solution that peo-
ple can take for granted, 24 hours a
day, seven days a week.”

A vital ingredient in the Besam
product offering is technical service,
which accounts for some 35 percent of
total revenues. It is at the installation
and service level that the real value-
added interaction with the customer
takes place. Besam’s door systems
are therefore sold together with a com-
prehensive maintenance and service
package designed to ensure long,
reliable operation and to prevent
unexpected downtime. Peter Aru: “In
the past year our service people carried
out no less than 320,000 preventive
maintenance visits to customers. This
is an invaluable contact with our
customers and one we work very hard
to make the most of. We expect the
service and maintenance portion of the
business to continue to grow healthily.”
The general downturn in the global
economy in 2002 has led to relatively
flat sales on Besam’s largest markets in
North America and central and
northern Europe. One exception is the
uk where new legislation to facilitate
access to public buildings by disabled
people has generated a demand for
automatic door solutions. In China
Besam is benefiting from a dynamic
expansion in airport, hotel and general
construction in the run-up to the 2008
Olympic Games.

Size matters

Besam is the only global player in the
door automatics market and holds a
unique position by virtue of its strong
brand, its large installed base and
its worldwide organization and after-
market service. Besam sells complete

door systems and service packages on
a local, regional and national basis
to many of the world’s top retail
establishments. The retail sector
accounts for 50 percent of total sales.
Other leading sectors are healthcare
and transportation.

Peter Aru says Besam has already
benefited from being a part of the assa
abloy Group. “Thanks to the Group’s
global presence and strength around
the world we are in a much better

Worsening traffic jams have made it
increasingly difficult
for Besam
Holland to meet
its promise of
‘Service in two hours’. To avoid break-
ing its word, the company has found a
creative new solution. Besam has
obtained permission from the authori-
ties to drive a scooter with a light
trailer. The service van has become a
service scooter.

“We get through more visits in a day
because our service engineers sweep
elegantly past lines of traffic – and our
competitors,” says Service Manager
Gerrit Westhof.

position when promoting product
specification initiatives with architects
and builders. This makes our efforts to
influence Standards and to improve
safety a good deal easier. More impor-
tantly from a sales point of view,
it strengthens our position when
negotiating regional and global contracts
with new and existing customers.”

ASSA ABLOY / 2002 5 1

Report of the Board of Directors

The Annual Report of assa abloy ab
(publ.)
[Corporate Organization
number 556059-3575] contains the
Group’s accounts for the ﬁnancial year
1 January – 31 December 2002.

Ownership
assa abloy’s principal shareholders
are Wärtsilä Corporation (7.6 percent
of the capital and 22.8 percent of the
votes), Investment ab Latour/SäkI (8.2
percent of the capital and 17.4 percent
of the votes) and Melker Schörling
(3.3 percent of the capital and 4.8
percent of the votes). They are repre-
sented on the Board of Directors by,
respectively, Georg Ehrnrooth and
Göran Ehrnrooth; Gustaf Douglas;
and Melker Schörling.

Duties of the Board and
Group Management
The Board determines the Group’s
overall strategy and the acquisition of
companies and real estate. In other
respects, the Board is responsible for
the organization and administration of
the Group in accordance with the
Swedish Companies Act. Working
procedures in compliance with the Act
were established in 1998 and are
reviewed annually.

The Board consists of seven mem-
bers, two employee representatives
and two deputy employee representa-
tives. The Board meets on not less
than four occasions a year, of which
one is a meeting combined with a visit
and an in-depth review of a country in
which the company has operations.
During 2002, seven Board meetings
were held.

assa abloy’s auditor participates
in the Board’s annual year-end meeting.
Group Management consists of 17
people. Geographical responsibilities
are allocated within Group Manage-
ment to ensure rapid and short decision-
making paths. The Group endeavors

52 ASSA ABLOY / 2002

to achieve a non-hierarchical and simple
organizational structure.

In the annual budget process,
the Board and Group Management
establish business frameworks based on
improvements on previous years, which
also lay the basis for a high degree
of decentralization of the Group’s
operations. The common ﬁnancial and
accounting policy establishes the
financial control and monitoring
framework.

assa abloy’s Board of Directors
decided during the year to form an Audit
Committee consisting of assa abloy
Board members Melker Schörling
(Chairman), Gustaf Douglas and Per-
Olof Eriksson, and a Remuneration
Committee consisting of assa abloy
Board members Georg Ehrnrooth
(Chairman), Melker Schörling and
Sven-Christer Nilsson. The aim of these
committees is to assist the Board
in giving deeper and more efﬁcient
consideration to these matters. In
addition, starting with the 2003 Annual
General Meeting, the major share-
holders will recommend a Nomination
Committee with the task of preparing
for the selection of Directors, the set-
ting of Directors’ remuneration and
matters pertaining thereto before
forthcoming General meetings. Up to
the 2003 Annual General Meeting the
tasks have been fulﬁlled by Georg
Ehrnrooth, Gustaf Douglas and
Melker Schörling.

Important events
Continued establishment of global
platform and expanded product port-
folio. The ﬁrst stage in assa abloy’s
growth strategy is to establish local
leading positions throughout the
world, to create a global platform and
to expand the product portfolio.

Acquisitions made during 2002.
The acquisitions made during the year
represent signiﬁcant additions to the

Group and add both geographical and
product strengths. The companies
acquired during 2002 have total sales,
pro forma, of sek 2.3 billion, of which
sek 1.1 billion has been consolidated.
The total acquisition price was sek
3.3 billion. Goodwill amounts to sek 2.6
billion, most of which is tax-deductible.
Acquisition of a new segment in
the product portfolio through Besam.
assa abloy’s strategy is based on
creating security solutions that prevent
unauthorized ingress while permitting
fast, efﬁcient evacuation and being easy
and convenient to use. Door auto-
matics form a natural component
of such solutions. These products
and systems are steadily growing in
importance in society but up to now
have formed only a limited part of the
Group’s product portfolio.

Besam is the world leader in the
ﬁeld of door automation. The product
range consists of automatic door
operators for swing doors, sliding
doors and revolving doors. The com-
pany’s market share in West Europe
and the usa for the different product
groups varies between 15 percent and
30 percent. The company is represented
in more than 60 countries and has its
own subsidiaries in 20 of them. Service
and maintenance form an important
and highly proﬁtable part of the busi-
ness and account for more than 30
percent of sales. It is only in recent
years that the company has started to
focus on this side of the business.
Growth is currently running at more
than 10 percent and there is substan-
tial potential for development. Besam
holds a unique position by virtue of its
strong brand, its large installed base
and its worldwide organization and
aftermarket service. The head ofﬁce
and much of the production are located
in Landskrona in Sweden. There are
also manufacturing plants in Germany
and the usa. There are about 1,400

employees, of which 310 are in Sweden.
The market for door automatics has
grown historically at 7-10 percent a
year. In the second half of 2002 Besam’s
sales totaled around sek 1,000 m, after
the effect of the weak dollar, with a
proﬁt margin of over 10 percent. The
acquisition price was sek 3,050 m for
a debt-free company. The acquisition
generated goodwill of sek 2,484 m,
which it is planned to amortize over
20 years. The acquisition is expected
to contribute to earnings per share
from 2003 and to generate positive
cash ﬂow from the outset. The company
is consolidated from 1 July 2002.

To ﬁnance the acquisition of Besam,
the Board of Directors of assa abloy
ab decided at the Board meeting on
30 May 2002 to increase the compa-
ny’s share capital by an issue of
10,000,000 new shares of Series b, in
line with authority given at the Annual
General Meeting. The issue price was
sek 126 per share. The issue was made
by private placement to a number of
Swedish and foreign
institutional
investors. The issue provided the com-
pany with sek 1.26 billion of capital
before costs.

Acquisitions in New Markets. Poli
Cerraduras, the market leader in Chile,
was acquired on 1 September 2002.
The company has sales of sek 75 m
and 300 employees. The acquisition of
Poli strengthens assa abloy’s position
in South America and will contribute
to earnings per share from the outset.
codas Electronica, hid’s distri-
butor in Argentina, was acquired on
1 August 2002.

uba Almadis, for many years Assa’s
distributor in Lithuania, was acquired
on 1 October. Radikovic in Slovenia,
acquired on 1 October, is focused pri-
marily on high-security solutions and is
a distributor for effeff. Union Locks Ltd
in Kenya was acquired on 1 July 2002.
On 1 December 2002 the out-
standing minority share in Mul-T-
Lock in Israel was acquired.

Acquisitions of distributors in
mature markets. vema, which was
acquired on 1 April 2002, is market
leader in the electromechanical ﬁeld in
the Netherlands. vema is a distributor
for effeff’s product range. The company
has annual sales of eur 9 m and shows
high proﬁtability. The acquisition will
contribute to earnings per share from
the outset.

initial, since renamed Abloy France,
was acquired on 1 April and special-
izes in electromechanical locking solu-
tions, based on its position as Abloy’s
distributor in France for many years.
The company has annual sales of
eur 3.3 m with stable proﬁtability and
growth.

Assets of the German company
Melchert were acquired at book value.
The company has annual sales of about
eur 8 m and for the last ten years has
been Assa Ruko GmbH’s partner in
marketing security packages for lock-
smiths.

Acquisitions made in 2003. Inter-
lock Holding ag in Switzerland, which
was acquired on 1 January 2003,
manufactures access-control cards
with a wide range of technical appli-
cations, including contactless cards for
access-control, time-and-attendance
control and the identiﬁcation industry.
The company employs 70 people and
has annual sales of chf 12.6 m. The
acquisition strengthens assa abloy’s
position in electronic identiﬁcation.
For customers in Europe the acquisi-
tion will provide a wider choice of
card-based access-control solutions
and stronger support.

SEK M

25,000

20,000

15,000

10,000

5,000

SEK M

3,500

2,800

2,100

1,400

700

SEK M

30,000

24,000

18,000

12,000

6,000

1998

1999

2000

2001

2002

1998

1999

2000

2001

2002

1998

1999

2000

2001

2002

Sales

*Key data for 2001 excludes non-recurring items.

Income before tax*

Operating cash flow

Capital employed

Return on capital employed, % *

Return on capital employed before goodwill amortization *

ASSA ABLOY / 2002 5 3

Leverage Group strength. The second
stage in assa abloy’s development
strategy is to develop Group strength
and to leverage synergy effects that
arise in various areas. Fast, successful
integration of acquired companies is
an important factor in developing
Group strength.

Integration of acquired companies.
assa abloy took part in the Volvo
Ocean Race to support the process of
integrating the more than 100 compa-
nies that it had acquired around the
world, and to develop and strengthen
assa abloy’s identity internationally.
The objective was to unite all the
companies under a single vision and
generate common values and work
ethics. assa abloy’s internal Attitude
Survey showed that the integration
project has greatly increased awareness
about assa abloy within the Group.
The increase is especially great among
production workers. 57 percent of
assa abloy’s employees believe that
their knowledge of assa abloy’s values,
working methods and management
philosophy has increased during the
past year. The results also show that
employees have great pride in their
local company and that their positive
attitude to assa abloy has increased.
75 percent say that they have great
pride in their local company and
69 percent have a ‘positive’ or ‘very
positive’ attitude to assa abloy. The
Volvo Ocean Race project has also
launched assa abloy as ‘The world’s
leading lock company’ all round the
world. assa abloy’s total exposure in
the media is estimated to have been
worth more than usd 60 m.

The Volvo Ocean Race project has
clearly speeded up and strengthened
the Group’s will to work together to
develop Group strength. A number of
new joint Group projects to leverage
possible synergy effects in Research &
Development, purchasing, production

54 ASSA ABLOY / 2002

and sales have been initiated during
the year. Developing the market
towards ‘more intelligent locks’ and
‘total solutions’ requires coordinated
investment in r&d, which is achieved
through the Group’s Product Council.
Last year assa abloy’s cliq concept
was launched as a successful example of
such a joint project. In order to utilize
assa abloy’s economic advantages of
joint production of components and
products, more and more production
is being moved to the Group’s low-
cost countries, for example in eastern
Europe, Mexico and China. The
Group’s purchasing of raw materials,
components and finished products
is continually coordinated by the
Group’s Purchasing Council, which
has generated good results during the
year. assa abloy has also worked for
some while to introduce a Group-wide
model for stock control, which has
succeeded in freeing sek 340 m of
inventory in the past 24 months.

Benchmarking. Continuous bench-
marking between the various units
has continued to produce results in
the form of higher productivity and
further margin improvements in many
companies. The Group’s operating
margin before goodwill amortization
increased to 14.2 percent, even though
the acquisitions of Besam and tesa
produced lower margins than other
Group companies initially.

organic

increased

focus on

Accelerating

growth
through
the
customer. The Group is now ready
to embark on the third stage of its
development strategy, to accelerate
organic growth by increasing focus on
the customer. Security requirements
are increasing throughout the world.
The level of security varies greatly from
country to country, and assa abloy
has an excellent business opportunity
to drive the development of high-
security technology through increased

understanding of individual customers’
needs and better education of the
market about security.

The Group’s worldwide sales
network is a source of great strength.
Through increased cross-selling of
the Group’s broad and comprehensive
product portfolio, the Group can
strengthen its competitiveness and
meet customers’ requirements better.
The distribution process is currently
undergoing change. Two trends can be
detected: towards more direct selling to
the market, and towards more specialist
distribution. Furthermore, with more
sophisticated locking solutions and the
need to satisfy particular customer
demands, there are obvious beneﬁts in
distributors focusing on different
users, e.g. on large or small companies
or on private houses.

assa abloy’s organic growth for
2002 amounted to 2 percent, which
should be compared with the 2-3
percent above gnp growth judged to
be the normal rate of growth for
the industry over a full business cycle.
The weak growth seen in 2002 is
explained in part by a weak economy
in several major markets and in part
by the generally low rate of inﬂation.

Comments on the
income statement
Group sales totaled sek 25,396.9 m
(22,510.0). This is an increase of 13
percent compared with 2001. In local
currencies the increase amounted to 17
percent, comprising organic growth of
2 percent (3) for comparable units,
while acquired units accounted for
15 percent of the increase in volume.

interest,

Earnings before

tax,
depreciation and amortization (ebitda)
amounted to sek 4,545.0 m (4,019.9).
This was an increase of 13 percent
compared with 2001. The increase is
primarily due to improvements in
operational units and to acquisitions.

The gross margin, deﬁned as ebitda
in relation to sales, was 17.9 percent
(17.9). The unchanged margin is due
to the lower margins of the newly
acquired units.

The Group’s operating income
before goodwill amortization amounted
to sek 3,595.0 m (3,159.2), an increase
of 14 percent. The operating margin
before goodwill amortization (EBITA)
was 14.2 percent (14.0). Goodwill
amortization amounted to sek 957.1 m
(860.4). The increase is attributable to
acquisitions during 2002 and 2001.

Consolidated income before tax
and non-recurring items amounted
to sek 2,015.0 m (1,641.6). This
represents an increase of 23 percent
compared with the preceding year.
In translating the income statements
of subsidiaries, foreign exchange
effects had a negative impact of
sek 88 m (42) on income before tax.

Proﬁt margin, deﬁned as income
before tax and non-recurring items in
relation to sales, was 7.9 percent (7.3).
The Group’s tax charge totaled
sek 689.1 m (507.4), corresponding
to an effective tax rate of 34.2 percent
(34.4) in relation to income before

tax. Net income for the year amounted
to sek 1,269.9 m (948.6).

The Parent Company’s income
before tax amounted to sek –24.8 m
(430.6).

Comments on the
cash flow analysis
The consolidated operating cash ﬂow
amounted to sek 3,524.7 m (2,338.4),
equivalent to 175 percent (142) of
income before tax. Cash ﬂow from
operating activities before interest and
tax totaled sek 4,539.3 m (4,062.8),
an increase of 12 percent over the
previous year. Projects to simplify
ﬂows and reduce working capital are
contributing to the strong cash ﬂow,
and there is signiﬁcant potential for
further improvements.

Capital expenditure on tangible
ﬁxed assets, less sales of tangible ﬁxed
assets, amounted to sek 838.9 m
(829.9), which corresponded to 88
percent (96) of depreciation of tangible
fixed assets applicable to the ﬁnancial
year.

Total purchase price for invest-
ments in subsidiaries amounted to
sek 3,335.4 m (6,979.6). Acquired

net debt totaled sek 92.3 m (82.2).
The acquisitions carried out in 2002
were ﬁnanced by a new issue, existing
borrowings and internally generated
cash ﬂow.

The dividend to shareholders for
the 2001 ﬁnancial year was sek 353.8 m
(317.8), which represents sek 1.00 per
share.

The Parent Company’s cash ﬂow

amounted to sek 141.0 m (-357.9).

Comments on the
balance sheet
Accounts receivable amounted to sek
4,241.5 m (4,338.5), corresponding
to 16.7 percent (19.3) of sales.
Inventories amounted to sek 3,595.0 m
(3,812.0), which corresponds to 14.2
percent (16.9) of sales. Intangible ﬁxed
assets amounted to sek 16,385.8 m
(16,557.8). Goodwill on acquisitions
of sek 2,629.3 m were added during
the year. A valuation model based on
discounted future cash ﬂow is used for
regular reassessment of the possible
need to write down goodwill. This has
not resulted in any write-down during
the year.

Number of employees

2,0

30,000

SEK M

12,000

10,000

8,000

6,000

4,000

2,000

1998

1999

2000

2001

2002

SEK M

16,000

12,000

8,000

4,000

1,5

1,0

0,5

0,0

24,000

18,000

12,000

6,000

1998

1999

2000

2001

2002

Shareholders' equity

Equity ratio

Net debt

Net debt / equity ratio

SEK M

1.0

0.8

0.6

0.4

0.2

0.0

1998

1999

2000

2001

2002

Average numbers
of employees

Sales per average
no. of employees

ASSA ABLOY / 2002 5 5

Tangible fixed assets amounted to
sek 6,175.0 m (6,941.5). Direct net
investments in tangible ﬁxed assets
totaled sek 838.9 m (829.9).

Shareholders’ equity totaled sek
12,381.2 m (11,845.6). The equity
ratio was 38.2 percent (35.6). The net
debt / equity ratio was 1.13 (1.31).

Capital employed in the Group –
deﬁned as total assets less interest-
bearing assets and non-interest-bearing
short-term and long-term liabilities,
including deferred tax liabilities –
amounted to sek 26,701 m (27,861).
The return on capital employed was
9.9 percent (9.7).

invested

Financing
Cash and cash equivalents amounted
to sek 1,408.0 m (1,418.4). Cash and
in
cash equivalents are
banks with high credit ratings. Net
debt amounted to sek 13,988.9 m
(15,534.2), of which sek 1,023.3 m
(1,093.0) consisted of pension liabili-
ties. In spite of the year’s acquisitions,
net debt fell. The reduction was due
primarily to the strong operating
cash ﬂow, the new issue, and positive
exchange rate effects.

The Group’s long-term ﬁnancing
consists mainly of a Multi-Currency
Revolving Credit (mrcf) agreement for
a maximum of eur 825 m (1,200),
an emtn program for a maximum of
eur 1,500 m (1,500), a Nordic mtn
program for sek 3,000 m (2,000) and
a Swedish commercial paper program
for sek 5,000 m (3,000). At year-end
the emtn program had been utilized for
sek 5,494 m, the commercial paper
program for sek 3,735 m, the Nordic
mtn program for sek 1,831 m and the
mrcf agreement for sek 1,313 m.

The interest-coverage ratio, deﬁned
as income before taxes, plus net interest
and non-recurring items, divided by net
interest, was 3.9 (3.5).

Periods for ﬁxed-interest-rate bor-
rowings are generally short, averaging
less than one year. This is partly
because Group revenues largely follow
the trends in each country, and partly
due to the strong cash ﬂow.

56 ASSA ABLOY / 2002

Ratings
Standard & Poor’s has assigned an
‘a-minus’ long-term and an ‘a-2’
short-term corporate credit rating to
assa abloy. The Swedish commercial
paper program has been rated ‘k1’.
The ratings reﬂect the Group's strong
position on the stable lock market, its
geographically diverse earnings base,
its strong cash ﬂow and the company’s
ﬁnancial proﬁle.

Personnel
The average number of employees was
28,754 (24,211). The increase was
mainly due to the acquisitions.

The Group’s total wage, salary and
other remuneration payments, includ-
ing holiday pay but excluding social
welfare costs, amounted to sek
6,701.2 m (5,740.9).

The average number of employees

in the Parent Company was 37 (34).

Environmental impact
Four of the assa abloy Group’s sub-
sidiaries in Sweden carry out permitted
business activities in accordance with
environmental regulations. The Group’s
permitted and registered activities
affect the external environment chieﬂy
through the subsidiaries Assa ab,
Assa Industri ab, ab fas Låsfabrik
and ﬁx ab. The companies operate
machine shops and foundries and
associated surface-coating plants which
have an impact on the external envi-
ronment through the discharge of
water and air.

The subsidiaries Assa ab, Assa
Industri ab, ab fas Låsfabrik and
ﬁx ab are actively addressing environ-
mental questions, and are certiﬁed in
accordance with iso 14001.

dispute

Legal disputes
assa abloy’s
regarding
VingCard’s liability to pay damages to
a development company in Texas, for
which sek 166 m was reserved in the
2001 accounts, has been ﬁnally decided
in line with the earlier judgment.

another

However,

company,
Ibertech, has since sued VingCard on
the grounds of the same contractual
obligations. Settlement negotiations
are in hand and it is still too early to
judge the ﬁnal outcome of this dispute.
No reservation has therefore been
made in the consolidated balance
sheet. In the 2001 Annual Report
assa abloy reported a dispute in
which the former owner of Mul-T-
Lock was claiming a sum of about
usd 45 m. After assa abloy won an
important interim court judgment in
Tel Aviv, the parties have come to
a settlement without signiﬁcant net
cost for assa abloy.

Accounting principles
The new recommendations of the
Swedish Financial Accounting Stand-
ards Council, which came into force
on 1 January 2002, have been adopted
in this Report. This has not resulted in
adjustment of ﬁgures for previously
reported periods. In all other respects
accounting principles are unchanged
from previous years.

Outlook for 2003
assa abloy’s development prospects
are substantial. The Group’s strong
position, security-driven growth and
potential for continued rationalization
as well as the ongoing consolidation of
the lock industry create opportunities
for continued good growth and proﬁt
development.

Proposed disposition of earnings

As shown in the consolidated balance sheet, the Group’s unrestricted equity
amounts to sek 1,672.4 m (2,200.6). No transfer to the Group’s restricted
equity is required.

The following unappropriated earnings are available for disposition by the
shareholders at the Annual General Meeting:

Net income for the year: sek -26.4 m
Unappropriated earnings brought forward: sek 3,394.6 m
Total: sek 3,368.2 m

The Board of Directors and the President propose that a dividend of sek 1.25
per share, a maximum total of sek 457.4 m, be distributed to shareholders
and that the remainder be carried forward to the new ﬁnancial year.

Stockholm, 6 February 2003

Georg Ehrnrooth
Chairman

Melker Schörling
Vice Chairman

Gustaf Douglas

Per-Olof Eriksson

Göran Ehrnrooth

Sven-Christer Nilsson

Carl-Henric Svanberg
President

Mats Persson
Employee representative

Gösta Johnsson
Employee representative

Our audit report was issued on 7 February 2003

PricewaterhouseCoopers ab

Anders Lundin
Authorized Public Accountant

ASSA ABLOY / 2002 5 7

Consolidated income statement and cash flow statement

Consolidated income statement

Consolidated cash ﬂow statement

Sales (Note 1)

Cost of goods sold

Gross income

2002
EUR M1)

2002
SEK M

2001
SEK M

2000
SEK M

2002
EUR M1)

2002
SEK M

2001
SEK M

2000
SEK M

2,778.7 25,396.9 22,510.0 14,394.1

OPERATING ACTIVITIES

-1,698.7 -15,525.9 -13,863.1 -8,567.6

Operating income

288.6

2,637.9

2,132.8

1,720.2

1,080.0

9,871.0

8,646.9

5,826.5

Depreciation and amortization (Note 4)

208.7

1,907.1

1,721.1

985.2

Selling expenses

-441.9

-4,038.6

-3,716.1 -2,496.1

Administrative expenses (Note 3)

-190.6

-1,742.0

-1,420.1

Research and development costs

Other operating income

Other operating expenses

-46.9

13.0

-20.3

-946.1

-233.3

105.4

-428.9

-367.0

118.9

146.7

-185.4

-131.2

-149.2

Operating income before
goodwill amortization (Notes 2, 5)

393.3

3,595.0

3,159.2

2,107.2

Goodwill amortization (Note 4)

-104.7

-957.1

Non-recurring items (Note 7)

-860.4

-166.0

-387.0

Operating income

288.6

2,637.9

2,132.8

1,720.2

Adjustment for non-recurring items

166.0

Adjustment for non-cash items
(Note 25)

-0.6

-5.7

43.0

-1.6

Cash ﬂow before interest and tax

496.7

4,539.3

4,062.8

2,703.8

Paid and received interest (Note 25)

Income tax paid

Cash ﬂow before changes in
working capital

-63.5

-56.6

-580.6

-516.9

-817.4

-537.1

-356.9

-453.2

376.6

3,441.8

2,708.3

1,893.7

Change in working capital (Note 25)

44.3

404.9

-77.1

-94.3

Cash ﬂow from operating activities

420.9

3,846.7

2,631.2

1,799.4

INVESTING ACTIVITIES

Acquisitions/disposals of tangible
ﬁxed assets (Note 25)

-91.8

-838.9

-829.9

-496.9

Financial items (Note 8)

-69.0

-631.1

-664.4

-330.6

Investments in subsidiaries (Note 25)

-374.8

-3,425.3

-6,286.9 -4,672.4

Share in earnings of associated
companies

0.9

8.2

7.2

12.4

Income before tax

220.5

2,015.0

1,475.6

1,402.0

Income tax (Note 9)

Other taxes

Minority interests

Net income

-70.1

-5.4

-639.9

-465.5

-443.8

-49.2

-41.9

-9.3

-6.1

-56.0

138.9

1,269.9

-19.6

948.6

-33.8

915.1

Investments in associated
companies (Note 25)

Other investments (Note 25)
Cash ﬂow from
investing activities

FINANCING ACTIVITIES

New share issues

Dividends paid

Net cash effect of changes
in borrowings

-1.0

0.6

-9.3

5.5

4.6

-19.9

-467.0

-4,268.0

-7,112.2 -5,189.2

136.1

1,243.7

1,509.9

-38.7

-353.8

-317.8

-237.5

-35.3

-322.3

4,577.2

3,336.3

Cash ﬂow from ﬁnancing activities

62.1

567.6

4,259.4

4,608.7

Earnings per share after tax and

before conversion, SEK*

Earnings per share after tax and

full conversion, SEK**

Earnings per share after tax and

3.53

2.99***

2.76

CASH FLOW (Note 25)

16.0

146.3

-221.6

1,218.9

3.53

2.98***

2.73

CHANGE IN NET DEBT

Net debt at 1 January 2)

1,695.9 15,534.2

8,559.9

2,997.7

Operating cash ﬂow

-385.6

-3,524.7

-2,338.4 -1,755.7

full conversion excluding goodwill, SEK**

6.13

5.39***

3.88

* Numbers of shares, in thousands, used in the calculations are

359,952 for 2002, 353,236 for 2001 and 331,813 for 2000.

** Numbers of shares, in thousands, used in the calculations are

366,716 for 2002, 357,276 for 2001 and 338,051 for 2000.

*** Excluding non-recurring items

1) EUR/SEK average rate 9.14

2) EUR/SEK rate at 31 Dec 9.16

58 ASSA ABLOY / 2002

Tax paid

Acquisitions

New share issues

Dividends

56.6

516.9

537.1

453.2

390.4

3,568.7

7,254.9

8,164.0

-136.1

-1,243.7

-1,509.9

38.7

353.8

317.8

237.5

-26.9

Translation differences

-132.7

-1,216.3

1,202.9

Net debt at 31 December 2)

1,527.2 13,988.9 15,534.2

8,559.9

OPERATING CASH FLOW

Cash ﬂow from operating activities

420.9

3,846.7

2,631.2

1,799.4

Acquisitions/disposals of tangible
ﬁxed assets (Note 25)

Adjustment for income tax paid

-91.8

56.6

-838.9

-829.9

-496.9

516.9

537.1

453.2

Operating cash ﬂow

385.6

3,524.7

2,338.4

1,755.7

Consolidated balance sheet

Assets

Equity and liabilities

31 Dec.
2002
EUR M2)

31 Dec.
2002
SEK M

31 Dec.
2001
SEK M

31 Dec.
2000
SEK M

31 Dec.
2002
EUR M2)

31 Dec.
2002
SEK M

31 Dec.
2001
SEK M

31 Dec.
2000
SEK M

Fixed assets

Intangible ﬁxed assets

Goodwill (Note 10)

1,770.0 16,213.5 16,371.0 12,077.9

Intangible rights (Note 11)

18.8

172.3

186.8

181.1

Shareholders' equity (Note 16)

Restricted equity

Share capital

Restricted reserves

39.9

365.9

353.8

352.5

1,129.1 10,342.9

9,291.2

8,578.1

Total intangible ﬁxed assets

1,788.8 16,385.8 16,557.8 12,259.0

Total restricted equity

1,169.0 10,708.8

9,645.0

8,930.6

Tangible ﬁxed assets (Note 12)

Buildings

Land and land improvements

Construction in progress

Machinery

Equipment

234.8

2,150.8

2,228.2

1,618.3

73.4

27.7

672.7

254.1

698.8

360.6

525.9

237.2

263.9

2,417.2

2,909.7

1,914.3

74.3

680.2

744.2

515.3

Unrestricted equity

Unrestricted reserves

Net income

Total unrestricted equity

43.8

138.9

182.7

402.5

1,252.0

1,269.9

948.6

813.3

915.1

1,672.4

2,200.6

1,728.4

Total shareholders‘ equity

1,351.7 12,381.2 11,845.6 10,659.0

Total tangible ﬁxed assets

674.1

6,175.0

6,941.5

4,811.0

Minority interests

36.1

330.9

481.7

559.8

Financial ﬁxed assets

Shares in associated
companies (Note 14)

Other shares and participations

Long-term receivables

Deferred tax receivables

Total ﬁnancial ﬁxed assets

4.5

5.2

10.2

53.0

72.9

41.4

47.3

93.6

485.7

668.0

22.8

47.5

118.2

378.3

566.8

59.8

7.3

44.2

351.7

463.0

Provisions

Provisions for PRI pensions

Provisions for other pensions

Deferred tax liability

Total provisions

Long-term liabilities (Note 17)

11.3

100.4

33.9

103.1

920.2

310.2

62.6

1,030.4

358.3

58.9

910.1

281.3

145.6

1,333.5

1,451.3

1,250.3

Total ﬁxed assets

2,535.8 23,228.8 24,066.1 17,533.0

Current assets

Inventories and work
in progress (Note 15)

Accounts receivable

Prepaid expenses and
accrued income

Other receivables

Short-term investments (Note 24)

392.5

463.0

28.1

48.8

44.8

3,595.0

3,812.0

2,808.4

4,241.5

4,338.5

3,276.3

257.2

446.2

410.0

256.9

502.8

191.4

467.7

800.0

1,020.0

Cash and bank balances (Note 24)

118.1

1,081.9

892.7

732.1

Total current assets

1,095.3 10,031.8 10,602.9

8,495.9

Long-term loans (Note 18)

920.7

8,433.5 11,006.1

7,712.2

Convertible debenture loans (Note 19)

100.0

915.7

1,104.9

250.0

Other long-term non-
interest-bearing liabilities

8.7

79.9

16.3

3.0

Total long-term liabilities

1,029.4

9,429.1 12,127.3

7,965.2

Current liabilities

Short-term loans

Income tax liability

Accounts payable

Accrued expenses and
prepaid income (Note 20)

564.6

5,172.0

4,074.5

1,398.4

50.6

463.1

390.2

214.7

168.8

1,546.0

1,574.1

1,407.3

218.4

2,000.7

1,861.3

1,779.0

TOTAL ASSETS

3,631.1 33,260.6 34,669.0 26,028.9

Other current liabilities

65.9

604.1

863.0

795.2

Total current liabilities

1,068.3

9,785.9

8,763.1

5,594.6

ASSETS PLEDGED (Note 21)

Real estate mortgages

Chattel mortgages

5.3

0.0

48.4

0.3

48.3

0.3

2.0

1.8

TOTAL SHAREHOLDERS' EQUITY
AND LIABILITIES

3,631.1 33,260.6 34,669.0 26,028.9

CONTINGENT LIABILITIES (Note 22)

Guarantees

Other

48.5

0.2

444.2

347.7

462.9

2.0

2.2

2) EUR/SEK rate at 31 Dec 9.16

ASSA ABLOY / 2002 5 9

Parent Company income statement and cash flow statement

Parent Company income statement

Parent Company cash ﬂow statement

Administrative expenses (Notes 3, 5)

-17.6

-160.9

-162.7

Net income

2002
EUR M1)

2002
SEK M

2001
SEK M

OPERATING ACTIVITIES

Depreciation (Note 4)

Income from the disposal of shares
in subsidiaries (Note 6)

Liquidation loss (Note 6)

Reversal of appropriations

Cash ﬂow before changes in working capital

-4.4

2002
EUR M1)

-2.9

0.3

-10.4

8.6

2002
SEK M

-26.4

2.8

-94.9

78.9

-39.6

2001
SEK M

448.9

4.1

-192.1

322.6

-18.3

565.2

Current receivables increase/decrease (-/+)

21.5

196.6

-245.6

Current operating liabilities
increase/decrease (+/-)

Changes in working capital

-33.1

-11.6

-302.9

-106.3

370.7

125.1

Cash ﬂow from operating activities

-16.1

-145.9

690.3

INVESTING ACTIVITIES

Disposal/Acquisitions equipment

0.4

3.7

-4.5

Investments in subsidiaries

-214.6

-1,961.7

-3,690.4

Sales of shares in subsidiaries

Changes in other ﬁnancial ﬁxed assets

34.1

311.6

2,759.9

1.4

Cash ﬂow from investing activities

-180.1

-1,646.4

-933.6

FINANCING ACTIVITIES

New share issues

Dividends paid

Net cash effect from changes in borrowings

Cash ﬂow from ﬁnancing activities

137.9

-38.7

112.3

211.5

1,260.0

-353.8

1,027.1

1,933.3

-317.8

203.2

-114.6

CASH FLOW

15.3

141.0

-357.9

CASH AND CASH EQUIVALENTS

Cash and cash equivalents at 1 January 2)

Cash ﬂow

Cash and cash equivalents
at 31 December (Note 24)

6.5

15.4

59.0

141.0

416.9

-357.9

21.9

200.0

59.0

Other operating income

Operating income (Note 2)

58.3

40.7

532.8

371.9

667.1

504.4

Income from ﬁnancial investments:

Income from shares and
participation in subsidiaries (Note 6)

Financial items (Note 8)

Income before tax

Appropriations

Income tax (Note 9)

Net income

32.4

-75.8

-2.7

-0.2

-2.9

295.8

-692.5

-24.8

-1.6

-26.4

348.8

-422.6

430.6

18.3

0.0

448.9

1) EUR/SEK average rate 9.14

2) EUR/SEK rate at 31 Dec 9.16

60 ASSA ABLOY / 2002

Parent Company balance sheet

Assets

Equity and liabilities

31 Dec.
2002
EUR M2)

31 Dec.
2002
SEK M

31 Dec.
2001
SEK M

31 Dec.
2002
EUR M2)

31 Dec.
2002
SEK M

31 Dec.
2001
SEK M

Shareholders’ equity (Note 16)

Fixed assets

Intangible ﬁxed assets

Intangible rights (Note 11)

Total intangible ﬁxed assets

Tangible ﬁxed assets (Note 12)

Equipment

Total tangible ﬁxed assets

Financial ﬁxed assets

0.1

0.6

0.9

5.2

Restricted equity

Share capital

13.0

Share premium reserve

Statutory reserve

Total restricted equity

Unrestricted equity

Retained earnings

39.9

901.7

70.5

365.9

353.8

8,259.6

6,884.5

645.4

1,012.1

9,270.9

7,883.7

370.6

-2.9

367.7

3,394.6

3,407.8

-26.4

448.9

3,368.2

3,856.7

Shares in subsidiaries (Note 13)

2,431.8

22,275.5

20,625.4

Net income

Receivables due from subsidiaries

301.6

2,762.7

Total unrestricted equity

Other long-term receivables

Other ﬁnancial assets

4.5

40.8

3.1

40.8

Total shareholders’ equity

1,379.8

12,639.1

11,740.4

Total ﬁnancial ﬁxed assets

2,737.9

25,079.0

23,432.0

Long-term liabilities

Total ﬁxed assets

2,738.5

25,085.2

23,445.0

Long-term loans

Current assets

Long-term loans due to subsidiaries

Convertible debenture loan (Note 19)

Receivables due from subsidiaries

875.7

8,021.2

8,113.8

Corporate credit line (Note 18)

657.2

301.6

100.0

31.0

6,019.8

2,762.7

915.7

283.7

6,218.2

2,762.7

1,104.9

212.9

Total long-term liabilities

1,089.7

9,981.9

10,298.7

Other receivables

Prepaid expenses and accrued income

Other short-term investments (Note 24)

Cash and bank balances (Note 24)

Total current assets

1.2

4.0

0.2

21.6

902.7

10.6

36.8

1.8

198.2

57.1

162.7

160.6

51.1

Current liabilities

Short-term loans

8,268.6

8,545.3

Accounts payable

TOTAL ASSETS

3,641.1

33,353.8

31,990.3

ASSETS PLEDGED

None

Liabilities to subsidiaries
Accrued expenses and
prepaid income (Note 20)

Other current liabilities

Total current liabilities

TOTAL SHAREHOLDERS’
EQUITY AND LIABILITIES

79.0

1.4

723.4

12.8

406.4

18.3

1,082.5

9,916.8

9,381.9

6.0

2.7

54.9

24.9

122.8

21.8

1,171.6

10,732.8

9,951.2

3,641.1

33,353.8

31,990.3

CONTINGENT LIABILITIES (Note 22)

Guarantees

787.5

7,213.1

5,217.2

2) EUR/SEK at 31 Dec 9.16

ASSA ABLOY / 2002 6 1

Accounting and valuation principles

The Group’s accounting and valuation
principles comply with Sweden’s
Annual Accounts Act and the stan-
dards of
the Swedish Financial
Accounting Standards Council, in
accordance with the listing contract of
the Stockholm Stock Exchange.

The new recommendations of
the Swedish Financial Accounting
Standards Council, which came into
force on 1 January 2002, have been
adopted in this Report. This has not
resulted in adjustment of ﬁgures for
previously reported periods. In all
other respects accounting principles
are unchanged from previous years.

Consolidated accounts
The consolidated ﬁnancial statements
include the Parent Company and com-
panies in which the Parent Company
held more than 50 percent of the votes
at year-end, as well as companies in
which the Parent Company exercises
control by some other means. The
consolidated income statement includes
companies acquired during the year,
with values as from the date of acqui-
sition. The consolidated financial
statements are prepared in accordance
with the purchase method, which
means that the acquisition value of
shares in subsidiaries is eliminated
against their shareholders’ equity at
the time of acquisition. In this context,
shareholders’ equity in subsidiaries
is determined on the basis of the fair
value of assets, liabilities and provi-
sions at the date of acquisition. If
required in accordance with the pur-
chase method, an allocation is made to
a restructuring provision. In the case
of untaxed reserves in acquired sub-
sidiaries, the estimated tax liability is
reported as a provision in accordance
with the tax rate in each country. If
the acquisition value of shares in a
subsidiary exceeds the acquired share-
holders’ equity as computed above,
the difference is reported as goodwill,
which is amortized according to plan.
If the acquisition value of shares in
subsidiaries is less than the acquired
shareholders’ equity, a provision for
negative goodwill is made, which is

62 ASSA ABLOY / 2002

dissolved in accordance with a deﬁned
plan.

Minority interests
Minority interests in the year’s income
statement and shareholders’ equity
are based on subsidiaries’ accounts
prepared in accordance with the
Group’s accounting principles.

Associated companies
Associated companies are deﬁned as
companies which are not subsidiaries
but companies in which the Parent
Company has shareholdings which,
directly or indirectly, represent at least
20 percent of all participations. Partici-
pations in associated companies are
reported in accordance with the equity
method. The consolidated income
statement includes shares in the income
before tax of associated companies. In
cases in which the acquisition value of
shares in associated companies was
higher than the shareholders’ equity in
the acquired company at the acquisi-
tion date, the difference is amortized
on the same basis as consolidated
goodwill, following an analysis of the
character of the surplus value, and is
charged against share in earnings of
associated companies. Participation in
the income tax of subsidiaries is
included in the Group’s tax expense.
In the consolidated balance sheet, share-
holdings in associated companies
are reported at the acquisition value,
adjusted for dividends and participation
in income after the date of acquisition.
In determining the equity share,
untaxed reserves are attributed to
shareholders’ equity after deduction
for estimated tax.

Translation of foreign
subsidiaries
The Group applies the so-called current
method for translating the accounts of
all foreign subsidiaries that are consid-
ered to operate with a high degree of
independence. The current method
has been applied so that all balance
sheet items except net income are
translated at the closing-day rate. Net
income is translated at the average rate

and the difference arising thereby is
taken directly to unrestricted reserves.
Subsidiaries’ income statements are
translated at the average rate for the
financial year. Subsidiaries operating in
high-inﬂation countries, e.g. Romania,
are translated using the so-called
monetary method.

The Group hedges to a limited
extent its investments in foreign net
assets. Hedging is implemented through
loans and forward exchange contracts.
These are valued at the exchange rate
prevailing at year-end. Exchange rate
differences on hedging operations,
as well as differences that arise when
foreign net assets are translated, are
carried directly to shareholders’ equity
in the balance sheet. Interest differentials
on forward contracts are annualized
and reported in the income statement.

Exchange rates
The rates for currencies used in the
Group were as follows (average for
the year and rate at year-end):

Argentina
Australia
Bermuda
Brazil
Canada
Switzerland
Chile
China
Czech Republic
Denmark
Estonia
Euroland
Great Britain
Hong Kong
Hungary
Indonesia
Israel
India
Japan
Kenya
Lithuania
Mauritius
Mexico
Malaysia
Nigeria
Norway
New Zealand
Poland
Romania
Russia
Singapore
Slovenia

Average Year-end
rate
2.60
4.95
8.84
2.47
5.55
6.30
0.012
1.06
0.29
1.23
0.59
9.16
14.04
1.12
0.039
0.0010
1.85
0.18
0.074
0.11
2.65
0.30
0.84
2.30
0.069
1.26
4.61
2.28
0.00026
0.27
5.04
0.044

rate
2.76
5.26
9.82
3.46
6.18
6.23
0.014
1.17
0.30
1.23
0.58
9.14
14.57
1.24
0.038
0.0010
2.06
0.20
0.079
0.12
2.64
0.32
1.01
2.56
0.080
1.22
4.48
2.39
0.00029
0.31
5.42
0.041

ARS
AUD
BMD
BRL
CAD
CHF
CLP
CNY
CZK
DKK
EEK
EUR
GBP
HKD
HUF
IDR
ILS
INR
JPY
KES
LTL
MUR
MXN
MYR
NGN
NOK
NZD
PLN
ROL
RUR
SGD
SIT

Slovakia
Thailand
USA
Uruguay
South Africa
Zimbabwe

Average Year-end
rate
0.22
0.20
8.76
0.32
1.01
0.16

rate
0.21
0.23
9.71
0.51
0.93
0.18

SKK
THB
USD
UYU
ZAR
ZWD

Revenue recognition

Revenue recognition of sales of goods is
reported at the time of delivery to the
customer. All sales are reported less
vat, discounts, returns and freight.

Intra-Group sales
Pricing of deliveries between Group
companies is in accordance with busi-
ness principles and at market prices.
Internal profits arising from intra-
Group sales have been eliminated.

Leasing
Only operational leasing occurs in the
Group.

Research and development
Research costs are expensed as they
are incurred. The costs of development
work are included in the balance sheet
only if future economic beneﬁts can be
reliably demonstrated and estimated.

Depreciation
according to plan
Depreciation according to plan is based
on the historical cost of assets, with
due consideration of the estimated
economic life of the asset. A deprecia-
tion period of ﬁve years has been
applied for intangible rights. Group
goodwill is amortized over 10-20 years,
depending on the type of company
concerned. Goodwill in well-estab-
lished companies with independent and
well-known trademarks is amortized
over 10 years. Goodwill in companies
that, in addition, constitute a strategic
acquisition in terms of products or
markets is amortized over 20 years.
The depreciation period for office
buildings is 50 years, and for industrial
buildings 25 years. A depreciation
period of 7-10 years is applied to
machinery and other technical facilities.

Equipment and tools are depreciated
over 3-6 years.

Taxation
All taxes that are expected to apply to
the income reported are accounted for
in the income statement. These taxes
have been calculated in accordance
with the tax regulations in each country
and are reported as current-year tax.
Costs and revenue that affect both the
ﬁnancial statements and income taxa-
tion but in different ﬁnancial years are
reported as deferred tax.

Deferred income taxes are account-
ed for under the balance sheet liability
method. Accordingly deferred tax is
accounted for on all temporary differ-
ences between the carrying amount of
an asset or liability and its tax base.
Deferred tax assets and liabilities are
calculated at the tax rates that are
expected to apply to the period when
the asset is realized or the liability is
settled.

Cash flow statement
The cash flow statement has been
prepared according to the indirect
method. The reported cash flow
includes only transactions involving
cash payments.

As well as cash and bank balances,
cash and cash equivalents are taken to
include short-term investments that
are exposed to only small risks of
change in value and have a maturity
date less than three months from the
date of acquisition.

Intangible and tangible
assets
Intangible and tangible assets are
reported at acquisition value after
deduction for accumulated deprecia-
tion according to plan and possible
writing-down. A valuation model
based on discounted future cash ﬂow
is used for regular reassessment of the
possible need to write down goodwill.

Inventories
Inventories are valued at the lower of
cost and net realizable value in accor-
dance with the ﬁfo method. Provisions

have been made for obsolescence.
Deductions are made for internal
proﬁts arising from deliveries between
Group companies. Work in progress
and ﬁnished goods include both direct
costs incurred and an allocation of
indirect manufacturing costs.

Receivables
Receivables have been valued in the
amounts expected to be received.

Receivables, liabilities and
provisions in foreign currency
Receivables, liabilities and provisions
in foreign currency in individual com-
panies’ accounts have been translated
at the year-end rate. The forward rate
has been used when exchange rates
have been hedged by means of for-
ward contracts.

Provisions
Provisions have been made for all
obligations attributable to the ﬁscal
year or prior ﬁscal years which, on
the closing date, were likely to be
incurred, but which were uncertain
as to amount or date of payment.
In making provisions for pensions,
companies follow their country’s
local rules.

ASSA ABLOY / 2002 6 3

employed. The internal bank manages
a Group-wide netting system to mini-
mize the number of payment transac-
tions and related costs. In countries
with several operating companies,
surpluses and deficits are matched
in the local subsidiaries at country
level through cash pool solutions. The
internal bank manages the investment
or ﬁnancing of these cash pools.

Financial derivative
instruments
Financial derivative instruments such
as currency and interest-rate forwards
are used to the extent necessary. The
object of using derivative instruments
is solely to reduce exposure to ﬁnancial
risks. Financial derivative instruments
are not used with speculative intent.

Financial risk management

assa abloy is exposed to a variety of
financial risks through its international
business operations.

Organization and activities
assa abloy’s ﬁnancial policy, which is
reviewed annually by the Board of
Directors, constitutes a framework of
guidelines and regulations for the
management of ﬁnancial risks and
ﬁnancial activities in general.

assa abloy’s ﬁnancial activities
are coordinated centrally within the
subsidiary assa abloy Treasury s.a.
in Switzerland, which functions as
the Group’s internal bank. External
ﬁnancial transactions are conducted
by the internal bank, which also handles
transactions involving foreign curren-
cies and interest rates. The internal
bank achieves many economies of
scale, for example concerning pricing
of various interest rates.

Financing and liquidity risks
Financing and liquidity risks are
deﬁned as the risks of being unable to
meet payment obligations as a result
of inadequate liquidity or difﬁculties in
obtaining credit from external sources.
The internal bank is responsible for
external borrowing and external
investments. assa abloy strives to
have access, on every occasion, to both
short-term and long-term loan facilities
appropriate to its anticipated needs
for the year ahead, apart from major
acquisitions.

Counterparty risks
Financial risk management exposes
assa abloy to certain counterparty
risks. This exposure arises, for instance,
from the placement of surplus cash
and through the use of derivative
instruments. Group ﬁnancial policy
prescribes detailed rules for handling
counterparty risks.

expense, but there is also an indirect
effect on the Group’s operating income
as a result of the impact of interest
rates on the economy as a whole.
The internal bank is responsible for
identifying and managing the Group’s
interest-rate exposure. Interest dura-
tion in the Group is generally short,
with an average duration of less than a
year. At year-end, the average interest
duration was around 9 months.

Currency risks
Currency risks affect assa abloy
mainly through translation of capital
employed and net debt, through trans-
lation of income in foreign subsidiaries,
and through ﬂow of goods between
countries (‘transaction exposure’).

Translation exposure. The effect
arising on translation of capital
employed is limited by the fact that
ﬁnancing is largely in local currency.
The currency exposure and gearing
per currency in the Group should
generally reﬂect the overall exposure
and gearing for the whole Group. This
limits the effect from movements in
individual currencies on the gearing
for the Group.

Exposure of Group earnings. A
general strengthening of the Swedish
krona by one percent has a negative
impact of about sek 250 m on Group
sales and sek 7-8 m on Group earnings.
Transaction exposure. Currency
risks in the form of transaction expo-
sure, or the relative values of exports
and imports of goods, are limited
in the Group. The exposure that
does exist relates in particular to
VingCard’s exports from Norway,
chieﬂy to the usa, Abloy’s exports
from Finland to the usa and Besam’s
exports from Sweden to eu countries
and the usa. assa abloy’s policy is to
keep transaction exposure within a
speciﬁed framework.

Interest-rate risks
Interest-rate ﬂuctuations have a direct
impact on assa abloy’s net interest

Cash management
Cash management
in subsidiaries
focuses on minimizing operating capital

64 ASSA ABLOY / 2002

Notes:

Note 1 Sales by organizational unit 1)

Scandinavia

Finland

Central Europe 2)

South Europe 3)

United Kingdom

North America

South Paciﬁc

New Markets 4)

Hospitality

Identiﬁcation

Door Automatics

Elimination for internal sales

Total

2002
SEK M

1,970

1,150

1,600

3,723

1,259

10,465

1,138

1,952

992

1,283

1,015

-1,150

25,397

2001
SEK M

1,914

1,165

1,432

2,905

1,281

9,682

841

2,029

1,056

1,100

-894

2000
SEK M

1,889

1,060

1,027

2,232

665

5,409

772

981

1,052

-693

22,510

14,394

1) Including exports from each market
2) Germany, The Netherlands, Switzerland and Austria
3) France, Belgium, Italy and Spain
4) Africa, Asia, Israel, South America and eastern Europe

Note 2 Salaries and wages,
other remunerations and social costs
Salaries and wages other remuneration
(of which bonus to managing directors)

2002
SEK M
338.0 (4.6)
( - )
272.5
270.1 (1.2)
114.7 (1.0)
426.5 (1.2)
484.3 (0.6)
46.5 (0.3)
564.4 (2.3)
103.1 (0.5)
43.3
( - )
97.7 (0.3)
216.5 (0.7)
( - )
98.2
2,574.6 (18.8)
75.4 (0.2)
13.6
( - )
69.0 (0.8)
100.1 (0.1)
54.4 (0.7)
267.8 (0.9)
( - )
257.4
32.4
( - )
180.7 (0.5)
6,701.2 (34.7)

2001
SEK M
262.9 (2.7)
( - )
266.5
236.7 (0.8)
112.1 (0.7)
371.3
( - )
481.9 (0.7)
37.4 (0.5)
525.9 (2.5)
72.8 (0.3)
37.4 (0.1)
80.7 (0.5)
204.7 (0.4)
( - )
20.7
2,426.8 (14.1)
77.0 (1.1)
( - )
11.7
74.8
( - )
86.6 (0.1)
( - )
40.2
109.8 (0.2)
57.4 (0.2)
33.6 (0.2)
112.0 (0.5)
5,740.9 (25.6)

2000
SEK M
233.5 (2.2)
249.8 (0.8)
225.2 (0.4)
89.3 (0.3)
319.4 (0.4)
(1.7)
192.6
30.7 (0.2)
(2.0)
460.5
30.8
(0.3)
29.9 (0.1)
32.6 (0.5)
190.0 (0.1)
( - )
7.3
1,197.1 (8.8)
40.6 (0.1)
( - )
8.7
44.5
( - )
35.5 (0.2)
( - )
7.8
25.8 (0.3)
( - )
( - )
88.0 (2.1)
3,539.6 (20.5)

-
-

44.7 (4.3)

38.0 (5.5)

29.7 (1.2)

Group

Sweden
Finland
Norway
Denmark
Germany
United Kingdom
Belgium
France
The Netherlands
Czech Republic
Canada
Australia
New Zealand
USA
China
Romania
Israel
Italy
South Africa
Mexico
Spain
South America
Other
Total

Parent company
Sweden

Social costs
(of which pensions)

Senior executive remuneration
The Chairman of the Board and the Board members receive remunerations
that are set by the Board within the framework set by the Annual General
Meeting. This in total is SEK 1,875,000 (1,875,000). The employee
representatives do not receive Board member remuneration.

Group

Total

2002
SEK M

2001
SEK M

2000
SEK M

2,048.6 (400.5)

1,720.7 (325.9)

1,077.8 (209.9)

The remuneration paid to the President and other senior executives
consists of a basic salary, a bonus, other beneﬁts and a pension. The
bonus is based on income for the responsibility area concerned
compared with the previous year. Group Management comprises
16 senior executives and the President (see Page 76).

The Chairman of the Board and the other Board members have no
pension beneﬁts. Pensions are arranged for the President and others in
Group Management through participation in the ITP plan or equivalent. In
addition, the President and speciﬁc other senior executives have the right
to retire at the earliest on reaching the age of 60. The pension is based on
the retiree‘s salary on retiring and is 70 percent of this salary between the
ages of 60 and 65 and 50 percent of this salary after the age of 65 and for
the remainder of his/her life.

The Chairman of the Board and the other Board members have no
severance pay agreements. The President has a severance payment
agreement providing up to 100 percent of his salary for 24 months.
The payment is only made where the company terminates the contract.
Others in Group Management receive a severance payment of 100
percent of their salary for a maximum of 12 months.

Parent company
Sweden

30.5 (17.0)

19.1 (6.4)

12.2 (2.4)

Remunerations and other beneﬁts to senior executives.

SEK M

Salary/
Remuneration

Bonus
costs

Pension
beneﬁts

Other
security

Social
costs

The Chairman of
the Board

Other Board members

President

Other senior
executives

Total

0.5

1.4

6.6

38.7

47.2

4.3

23.8

28.1

4.1

11.1

15.2

0.1

5.7

5.8

Total

0.5

1.9

19.7

0.5

4.6

7.0

86.3

12.1

108.4

See Page 76 for senior executives' share and convertible security holdings.

ASSA ABLOY / 2002 6 5

Note 3 Auditor’s fees

Note 5 Operational leasing agreements

Group Parent Company

Group
2002
SEK M

Parent Company

2001
SEK M

2000
SEK M

2002
SEK M

2001
SEK M

Audit

PricewaterhouseCoopers 24.9

Others

5.6

Other assignments

PricewaterhouseCoopers 11.4

Others

Total

6.2

48.1

20.1

5.0

4.8

4.0

33.9

13.7

2.6

10.6

3.7

30.6

2.2

4.0

1.1

7.3

2.3

2.6

4.9

Note 4 Depreciation and amortization

Leasing fees paid in the year

Nominal value of agreed future leasing fees

Due in 2003

Due in 2004

Due in 2005

Due in 2006

Due in 2007

Due in 2008 or later

Total

2002
SEK M

182.8

172.3

136.1

99.8

72.4

47.5

80.8

608.9

Group
2002
SEK M

957.1

30.4

530.5

254.5

133.6

2001
SEK M

860.4

31.8

491.4

216.6

119.8

2000
SEK M

387.0

28.5

359.1

146.4

64.2

1.0

1.1

Parent Company

2002
SEK M

2001
SEK M

0.1

2.7

4.1

Note 6 Income from participations
in Group companies

Parent company

Dividends

Liquidation loss

Income from disposal of shares in subsidiaries

Total

2002
SEK M

279.8

-78.9

94.9

295.8

Goodwill

Intangible rights

Machinery

Equipment

Buildings

Land and land
improvements

Total

1,907.1

1,721.1

985.2

2.8

4.1

2002
SEK M

6.5

7.0

6.7

6.5

40.4

2001
SEK M

479.3

-322.6

192.1

348.8

Note 7 Non-recurring items

Group

Estimated damages, Merrimac

Total

2002
SEK M

2001
SEK M

166.0

2000
SEK M

66 ASSA ABLOY / 2002

Note 8 Financial items

Group

2002
SEK M

0.1

2001
SEK M

0.1

Parent Company

2000
SEK M

2002
SEK M

2001
SEK M

Note 10 Goodwill
Group

Opening acquisition value

Purchases/acquisitions

210.9

78.8

29.9

11.7

49.1

Reclassiﬁcations

Translation differences

2002
SEK M

2001
SEK M

18,513.2

13,252.8

2,629.3

4,263.6

166.8

-2,365.9

10.9

985.9

2000
SEK M

3,943.9

8,948.0

360.9

Dividends

Interest income and
similar income items

Interest income from
Group companies

Exchange rate differences

18.5

31.1

-14.3

535.0

-12.1

617.8

55.3

Interest expenses and
similar expense items

Interest expenses from
Group companies

-860.6

-774.4

-346.2

-583.8

-507.0

-643.3

-637.8

Total

-631.1

-664.4

-330.6

-692.5

-422.6

Closing accumulated acquisition value

18,943.4

18,513.2

13,252.8

Opening amortization

-2,142.2

-1,174.9

-698.1

Reclassiﬁcations

Write-downs

Amortization for the year

Translation differences

0.5

-2.2

-957.1

371.1

-860.4

-106.9

-387.0

-89.8

Closing accumulated amortization

-2,729.9

-2,142.2

-1,174.9

Note 9 Tax

Group

2002
SEK M

Parent Company

Closing net book value

16,213.5

16,371.0

12,077.9

2001
SEK M

2000
SEK M

2002
SEK M

2001
SEK M

Tax paid

Tax attributable to prior years

Deferred tax

Total

-546.8

-401.3

-426.4

-6.8

-86.3

19.4

-83.6

15.7

-33.1

-1.6

-639.9

-465.5

-443.8

-1.6

0.0

Explanation for the difference between nominal Swedish tax rates
and effective tax rates according to the income statement:

Percent

Swedish income tax rate

Effect of foreign tax rate

Non-deductible goodwill
amortization

Other non-income-related taxes

Other

Group
2002

28.0

-6.6

11.7

2.4

-1.3

2001

28.0

-10.7

18.2

2.9

-4.0

Tax rate according to the
income statement

34.2

34.4

Deferred tax liabilities and deferred tax receivables are
distributed according to the table below:

Deferred tax liabilities
SEK M

Fixed assets

Inventory

Short-term receivables
and liabilities

Deferred tax receivables
SEK M

Fixed assets

Inventory

Short-term receivables
and liabilities

Provisions

Tax-deductible losses

2002

227.7

75.1

2001

314.2

36.2

7.4

7.9

310.2

358.3

2002

85.4

82.2

77.2

111.6

129.3

485.7

2001

4.4

6.0

164.7

142.4

60.8

378.3

Note 11 Intangible rights

Opening acquisition value

Purchases/acquisitions

Sales/disposals

Reclassiﬁcations

Translation differences

Group
2002
SEK M

408.7

45.9

-2.4

0.3

-45.7

2001
SEK M

360.8

29.2

-4.5

-8.2

31.4

Closing accumulated acquisition value 406.8

408.7

2000
SEK M

294.2

57.5

-10.6

19.7

360.8

Opening amortization

-221.9

-179.7

-151.9

Sales/disposals

Reclassiﬁcations

Write-downs

Amortization for the year

Translation differences

2.3

-0.1

-2.7

-30.4

18.3

3.1

4.1

-31.8

-17.6

9.5

-28.5

-8.8

Closing accumulated amortization

-234.5

-221.9

-179.7

Parent
Company
2002
SEK M

1.0

-0.1

Closing net book value

172.3

186.8

181.1

0.9

ASSA ABLOY / 2002 6 7

Note 12 Tangible ﬁxed assets

– buildings

Group

2002
SEK M

2001
SEK M

2000
SEK M

Group

– land and land improvements

Opening acquisition value

3,041.3

2,269.8

1,629.3

Opening acquisition value

Purchases/acquisitions

Sales/disposals

Reclassiﬁcations

Translation differences

179.1

-18.0

88.0

-278.9

633.8

-15.5

-19.2

172.4

582.8

-17.3

75.0

Closing accumulated acquisition value

3,011.5

3,041.3

2,269.8

Opening depreciation

-813.1

-651.5

-551.6

Sales/disposals

Reclassiﬁcations

Write-downs

Depreciation for the year

Translation differences

Closing accumulated depreciation

4.5

-20.2

-16.1

-133.6

117.8

-860.7

1.7

7.5

-119.8

-51.0

-813.1

7.9

-64.2

-43.6

-651.5

Purchases/acquisitions

Sales/disposals

Reclassiﬁcations

Translation differences

Closing accumulated
acquisition value

Opening depreciation

Sales/disposals

Reclassiﬁcations

Depreciation for the year

Translation differences

Closing accumulated depreciation

2002
SEK M

707.3

10.0

-1.3

28.3

-63.3

2001
SEK M

532.9

147.6

-3.4

-1.4

31.6

2000
SEK M

357.9

163.3

11.7

681.0

707.3

532.9

-8.5

0.3

-1.0

0.9

-8.3

-7.0

-1.1

-0.4

-8.5

-1.9

-4.7

-0.3

-0.1

-7.0

Closing net book value

2,150.8

2,228.2

1,618.3

Closing net book value

672.7

698.8

525.9

The taxable value of the group‘s Swedish buildings was SEK 53.0 M.

The taxable value of the group‘s Swedish land was SEK 11.9 M.

– machinery

Group

Opening acquisition value

Purchases/acquisitions

Sales/disposals

Reclassiﬁcations

Translation differences

– equipment

2002
SEK M

5,967.2

528.5

-68.8

-185.4

-920.7

2001
SEK M

4,521.0

1,373.8

-338.3

27.8

382.9

Group

2002
SEK M

2001
SEK M

Opening acquisition value

1,527.0 1,109.6

Purchases/acquisitions

266.9

416.8

2000
SEK M

883.5

393.3

Sales/disposals

-121.7

-114.8

-209.1

2000
SEK M

3,316.3

1,065.0

-68.3

Reclassiﬁcations

-6.7

5.8

208.0

Translation differences

-198.4

109.6

41.9

Parent Company

2002
SEK M

25.7

3.3

-15.3

2001
SEK M

24.0

5.8

-4.1

Closing accumulated acquisition value

5,320.8

5,967.2

4,521.0

Opening depreciation

-3,057.5

-2,606.7

-2,228.0

Sales/disposals

Reclassiﬁcations

Write-downs

Depreciation for the year

Translation differences

58.3

60.1

-1.5

-530.5

567.5

280.9

-4.5

-491.4

-235.8

59.6

-359.1

-79.2

Closing accumulated depreciation

-2,903.6

-3,057.5

-2,606.7

Closing net book value

2,417.2

2,909.7

1,914.3

Closing accumulated
acquisition value

1,467.1 1,527.0 1,109.6

13.7

25.7

Opening depreciation

-782.8

-594.3

-586.6

-12.7

-10.6

Sales/disposals

Reclassiﬁcations

Write-downs

99.4

14.5

-2.1

97.3

-3.7

163.9

6.9

2.0

Depreciation for the year

-254.5

-216.6

-146.4

-2.7

-4.1

Translation differences

138.6

-65.5

-25.2

Closing accumulated
depreciation

-786.9

-782.8

-594.3

-8.5

-12.7

Closing net book value

680.2

744.2

515.3

5.2

13.0

68 ASSA ABLOY / 2002

Enterprise number, Registered Ofﬁce

Number of shares

Share capital, % Book value, SEK M

Note 13 Shares in subsidiaries

Parent company

ASSA ABLOY Sverige AB

Timelox AB

AA Besam AB

ASSA ABLOY OY

ASSA ABLOY Norge a.s.

ASSA ABLOY Danmark A/S

ASSA ABLOY Deutschland GmbH

ASSA ABLOY France SAS

ASSA ABLOY Ltd

Yale Security Products SpA

Mul-T-Lock Ltd

556061-8455 Eskilstuna

556214-7735 Landskrona

556204-8511 Landskrona

1094741-7 Joensuu

979207476 Moss

CVR 10050316 Herlev

HR B 66227 Berlin

412140907 R.C.S. Versailles

2096505 Willenhall

79370 Aprilia, Latina

520036583 Yavne

ASSA ABLOY Holdings (SA) Ltd

1948/030356/06 Johannesburg

ASSA ABLOY Inc

Abloy Holdings Ltd

39347-83 Salem, Oregon

1148165260 St Laurent

ASSA ABLOY Australia Paciﬁc Pty Ltd

ACN 095354582 Oakleigh, Victoria

ASSA ABLOY South Asia Pte Ltd

199804395K Singapore

Effeff International Security Systems Co.

3172 Tianjin

Yale Security Mexico, S.A de C.V.

YSM9612049Y4 Mexico D.F.

Grupo Industrial Phillips, S.A de C.V.

Lips Technology BV

ASSA ABLOY Innovation AB

ASSA ABLOY Hospitality AB

ASSA ABLOY Treasury S.A.

ASSA ABLOY Reinsurance S.A.

Whaig Ltd

Codas Electrónica S.A.

ASSA ABLOY Asia Paciﬁc Ltd

Total

GIP980312169 Mexico

33274584 Amsterdam

556192-3201 Eskilstuna

556180-7156 Stockholm

CH-660-2045998-0 Geneva

CH-660-1690000-9 Geneva

EC21330 Bermuda

8805 Buenos Aires

53451 Hong Kong

Note 14 Shares in associated companies

Group

Talleres Agui S.A.

Låsgruppen Wilhelm Nielsen AS

MAB Glass Europe NV

A20065744 Astigarraga

934372816 Bergen

HR M71690 Mechelen

Cerraduras de Colombia Cerracol S.A

00008028 Bogota

Renato Fattorini SRL

8727 Pavia

Others

Total

Note 15 Inventory

Group

Materials and inventory items
Work in progress
Finished goods
Paid in advance
Total

31 Dec. 2002
SEK M
1,030.8
1,151.7
1,390.5
22.0
3,595.0

31 Dec. 2001
SEK M
1,027.2
1,209.2
1,554.8
20.8
3,812.0

31 Dec. 2000
SEK M
650.2
1,125.9
1,012.3
20.0
2,808.4

15,000

1,000

800,000

150,000

60,500

12,499,999

1,330,000

240,000

15,393,225

100,220

100

48,190,000

100,000

231,299,904

27,036,635

400

2,500

1,000

205,500,000

300,000

100,100

120

1,000,000

100

14.0

40.0

0.2

631.1

538.5

376.4

700.8

1,582.4

975.8

597.5

1,078.5

184.4

2,318.8

12.6

241.9

28.4

0.0

224.6

861.8

0.2

1.0

0.4

11,353.5

17.3

423.1

0.1

72.2

22,275.5

4,802

305

145

182,682

16.9

15.8

2.6

2.3

1.2

2.6

41.4

ASSA ABLOY / 2002 6 9

Enterprise number, Registered Ofﬁce

Number of shares

Share capital,% Book value, SEK M

Note 16 Shareholders’ equity

Group
31 Dec. 2002, SEK M

Opening balance, 1 January 2002

Converted shares

Re-purchase of own convertible securities

New share issues*

Dividend

Share
capital

353.8

2.1

10.0

Transfers between unrestricted and restricted reserves

Exchange difference for the year

Net income

Closing balance, 31 December 2002

365.9

* New share issue liquidity is reduced by SEK 16.3 M for new issue costs after tax.

Parent Company
31 Dec. 2002, SEK M

Opening balance, 1 January 2002

Converted shares

Re-purchase of own convertible securities

New share issues

Dividends

Net income

Closing balance, 31 December 2002

Share
capital

353.8

2.1

10.0

365.9

Restricted
reserves

9,291.2

125.1

1,233.7

-307.1

10,342.9

Restricted
reserves

645.4

Premium
reserve

6,884.5

125.1

1,250.0

8,259.6

645.4

Unrestricted
reserves

2,200.6

-108.3

-353.8

307.1

-1,643.1

1,269.9

1,672.4

Unrestricted
reserves

3,856.7

-108.3

-353.8

-26.4

3,368.2

Total

11,845.6

127.2

-108.3

1,243.7

-353.8

0.0

-1,643.1

1,269.9

12,381.2

Total

11,740.4

127.2

-108.3

1,260.0

-353.8

-26.4

12,639.1

Total number of shares

at 31 December 2002

Series A shares

Series B shares

Total

Voting rights

Number of shares

191,753,230

346,742,711

538,495,941

19,175,323

346,742,711

365,918,034

Note 17 Long-term liabilities falling due for payment
later than ﬁve years after the ﬁnancial year
Group

SEK M

31 Dec. 2002

31 Dec. 2001

31 Dec. 2000

Liabilities to credit institutions

Other liabilities

Total

49.9

1.0

50.9

59.2

0.9

60.1

18.8

0.9

19.7

70 ASSA ABLOY / 2002

Note 18 Corporate credit line

Check credits for the group were SEK 928.0 M (621.2) of which SEK 116.6 M (215.3) were utilized.

Note 19 Convertible debenture loans

SEK M

31 Dec. 2002

31 Dec. 2001

31 Dec. 2000

915.7

1,104.9

250.0

Convertible debenture loan 97/02 had a variable interest rate equivalent to the 12-month STIBOR less 0.25 percent.
The loan period was from 8 December 1997 to 2 December 2002. The convertible debenture loan 97/02 could be
converted to Series B shares between 1 December 2000 and 15 November 2002. After conversion at a conversion
rate of SEK 58.70 there were 3,464,799 new shares added.

INCENTIVE 2001 has a variable interest rate equivalent to 0.9* EURIBOR + 54 basis points. Convertible debenture
loans within INCENTIVE 2001 can be converted from October 2006. Full conversion at a conversion rate of EUR
15.80 for Bond 1, of EUR 19.00 for Bond 2, of EUR 22.10 for Bond 3 and of EUR 25.30 for Bond 4 will add
5,017,432 shares. The program has a total value of EUR 100 M.

Note 20 Accrued expenses and prepaid income

Group

Parent Company

SEK M

31 Dec. 2002

31 Dec. 2001

31 Dec. 2000

31 Dec. 2002

31 Dec. 2001

Accured expenses, personnel

Interest expenses

Other

Total

801.2

66.2

1,133.3

2,000.7

581.3

83.3

1,196.7

1,861.3

493.6

167.0

1,118.4

1,779.0

21.2

28.5

5.2

54.9

18.1

49.0

55.7

122.8

Note 21 Assets pledged
Group

SEK M

31 Dec. 2002

31 Dec. 2001

31 Dec. 2000

Relating to long-term liabilities to
credit institutions:
Real estate mortgages
Chattel mortgages
Total

48.4
0.3
48.7

48.3
0.3
48.6

2.0
1.8
3.8

Note 22 Contingent liabilities

SEK M

Guarantees

Guarantees on the behalf of subsidiaries

Other

Total

Group

Parent Company

31 Dec. 2002

31 Dec. 2001

31 Dec. 2000

31 Dec. 2002

31 Dec. 2001

122.9

321.3

2.0

446.2

89.8

257.9

2.2

349.9

88.6

374.3

462.9

103.0

7,110.1

64.0

5 ,153.2

7,213.1

5,217.2

ASSA ABLOY / 2002 7 1

Note 23 Average number of employees per country, by gender

Group

Women

2002

2,040

2,215

953

1,132

854

470

435

444

419

290

391

450

230

304

266

138

144

140

254

2001

1,955

739

912

1,469

908

443

439

457

420

229

430

263

364

238

132

143

2000

1,331

121

893

557

404

424

435

409

392

442

298

404

132

118

Men

2002

4,505

1,398

1,467

1,029

935

747

706

669

574

654

470

347

491

379

303

392

369

278

236

255

167

440

2001

4,078

604

1,409

1,203

975

632

695

630

575

145

290

345

536

360

260

219

270

179

175

158

314

2000

2,784

143

1,415

416

452

604

673

570

567

354

602

362

103

185

159

207

Total

2002

6,545

3,613

2,420

2,161

1,789

1,217

1,141

1,113

993

944

861

797

721

683

569

530

513

351

319

315

307

158

694

2001

6,033

1,343

2,321

2,672

1,883

1,075

1,134

1,087

995

228

519

775

799

724

498

315

103

350

254

226

290

130

457

2000

4,115

264

2,308

973

856

1,028

1,108

979

959

165

110

796

900

766

189

263

118

291

133

325

11,846

10,017

6,795

16,908

14,194

10,086

28,754

24,211

16,881

USA

Mexico

France

China

United Kingdom

Germany

Finland

Sweden

Australia

Spain

South Africa

Czech Republic

Norway

Romania

Italy

South America

New Zealand

Israel

The Netherlands

Canada

Denmark

Belgium

Other

Total

Parent Company

Sweden

Note 24 Cash and cash equivalents

SEK M
Cash and bank balances
Short-term investments
Cash and cash equivalents

Group

2002
1,081.9
326.1
1,408.0

Parent Company

2001
892.7
525.7
1,418.4

2000
732.1
747.4
1,479.5

2002
198.2
1.8
200.0

2001
51.1
7.9
59.0

Short-term investments in the consolidated balance sheet at year end were SEK 410.0 M (800.0),
of which SEK 83.9 M (274.3) were non-realizable receivables with a term to maturity of more than three
months and investments in securities.These items are not classiﬁed as cash and cash equivalents and
are not included in the above table.

Short-term investments in the Parent Company were SEK 1.8 M (160.6 ).

72 ASSA ABLOY / 2002

Note 25 Cash ﬂow
Group
Adjustments for non-cash items

Sale of ﬁxed assets
Change in provisions for pension
Adjustment for non-cash items

Paid and received interest

Paid interest
Received interest
Paid and received interest

Change in working capital

Inventory increase/decrease (-/+)
Accounts receivable increase/decrease (-/+)
Other receivables increase/decrease (-/+)
Trade and other payables increase/decrease (+/-)
Change in working capital

Purchases of tangible ﬁxed assets

Purchases of tangible ﬁxed assets
Sale of tangible ﬁxed assets
Purchases of tangible ﬁxed assets

Investments in subsidiaries

Acquired capital employed
- whereof goodwill
Acquired minority share holdings
Less acquired net debt
Less minority interests acquired
Total purchase price
Less acquired cash
Less purchase price not yet paid
Less paid with own shares
Less reclassiﬁcation from shares in associated companies
Less reclassiﬁcation from other shares
Less purchase price received for sold companies
Less/Additional paid parts of purchase price relating to previous years
Investments in subsidiaries

Investments in associated companies

Investments in associated companies
Investments in associated companies

Other investments

Investment and sale of other ﬁnancial assets
Other investments

Cash and cash equivalents

Cash and cash equivalents at 1 January
Cash ﬂow
Effect of exchange rate differences
Cash and cash equivalents at 31 December (Note 24)

2002
SEK M
-
-5.7
-5.7

2002
SEK M
-796.6
216.0
-580.6

2002
SEK M
169.0
197.0
121.9
-83.0
404.9

2002
SEK M
-1,069.8
230.9
-838.9

2002
SEK M
3,427.7
2,629.3
-
-92.3
-
3,335.4
-139.7
-
-
-
-
-
229.6
3,425.3

2002
SEK M
9.3
9.3

2002
SEK M
5.5
5.5

2002
SEK M
1,418.4
146.3
-156.7
1,408.0

2001
SEK M
-
43.0
43.0

2001
SEK M
-883.2
65.8
-817.4

2001
SEK M
170.2
310.4
-30.9
-526.8
-77.1

2001
SEK M
-986.1
156.2
-829.9

2001
SEK M
6,874.7
4,263.6
446.5
-82.2
-259.4
6,979.6
-50.7
-163.0
-
-53.5
-
-
-425.5
6,286.9

2001
SEK M
-
-

2001
SEK M
4.6
4.6

2001
SEK M
1,479.5
-221.6
160.5
1,418.4

2000
SEK M
-2.0
0.4
-1.6

2000
SEK M
-387.3
30.4
-356.9

2000
SEK M
-41.0
14.1
-56.3
-11.1
-94.3

2000
SEK M
-604.3
107.4
-496.9

2000
SEK M
12,172.6
8,414.1
-
-1,142.7
-249.3
10,780.6
-2 328.9
-107.8
-2,865.9
-114.0
-330.4
-396.0
34.8
4,672.4

2000
SEK M
-
-

2000
SEK M
-19.9
-19.9

2000
SEK M
196.2
1,218.9
64.4
1,479.5

ASSA ABLOY / 2002 7 3

Audit report:

74 ASSA ABLOY / 2002

To the General Meeting of the shareholders
of assa abloy ab (publ.)
Corporate identity number 556059-3575

We have audited the annual accounts, the consolidated accounts,
the accounting records and the administration of the Board of
Directors and the President of assa abloy ab (publ.) for the
ﬁnancial year 2002. These accounts and the administration of
the Company are the responsibility of the Board of Directors
and the President. Our responsibility is to express an opinion
on the annual accounts, the consolidated accounts and the
administration based on our audit.

We conducted our audit in accordance with generally
accepted auditing standards in Sweden. Those standards
require that we plan and perform the audit to obtain reasonable
assurance that the annual accounts and the consolidated
accounts are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts
and disclosures in the accounts. An audit also includes assessing
the accounting principles used and their application by the
Board of Directors and the President, as well as evaluating the
overall presentation of information in the annual accounts
and the consolidated accounts. As a basis for our opinion
concerning discharge from liability, we examined signiﬁcant
decisions, actions taken and circumstances of the company in
order to be able to determine the liability, if any, to the
Company of any Board Member or the President. We also
examined whether any Board Member or the President has, in
any other way, acted in contravention of the Companies Act,
the Annual Accounts Act or the Articles of Association. We
believe that our audit provides a reasonable basis for our
opinion set out below.

The annual accounts and the consolidated accounts have
been prepared in accordance with the Annual Accounts Act
and, thereby, give a true and fair view of the Company’s and
the Group’s ﬁnancial position and results of operations in
accordance with generally accepted accounting principles in
Sweden.

We recommend to the General Meeting of shareholders
that the income statements and balance sheets of the Parent
Company and the Group be adopted, that the proﬁt for
the Parent Company be dealt with in accordance with the
proposal in the administration report and that the members of
the Board of Directors and the President be discharged from
liability for the ﬁnancial year.

Stockholm 7 February 2003

PricewaterhouseCoopers ab

Anders Lundin
Authorized Public Accountant

ASSA ABLOY’s Board of Directors

Georg Ehrnrooth
Chairman
Born 1940.
Master of Science (Engineering).
Board Chairman: Varma-Sampo Mutual Pension Insurance
Co and Vice Chairman of Rautaruukki Oyj.
Board Member: Wärtsilä Oyj Abp, Nokia Oyj Abp, Sampo
Oyj Abp, Sandvik AB and Oyj Karl Fazer Abp.
Member of the ASSA ABLOY Board since 1994.
Holdings through company: 251,680 Series B shares.

Gustaf Douglas
Born 1938.
MBA, Harvard Business School.
Principal owner of Latour and SäkI.
Board Chairman: Latour AB, Fagerhult, Boxholms Skogar AB,
Stockholm Chamber of Commerce, SäkI AB and IFS AB.
Vice Chairman: Attendo Senior Care and Securitas AB.
Board Member: The Svenska Dagbladet Foundation and
Moderata Samlingspartiet.
Member of the ASSA ABLOY Board since 1994.
Holdings through Investment AB Latour: 20,400,000 Series
B shares. Through SäkI AB: 7,118,818 Series A shares and
986,000 Series B shares.

Göran J. Ehrnrooth
Born 1934.
Master of Science, Economics.
Board Chairman: Fiskars Oyj Abp.
Board Member: Wärtsilä Oyj Abp.
Member of the ASSA ABLOY Board since 1999.
Holdings: nil.

Carl-Henric Svanberg
President & CEO
Born 1952.
Master of Science, Bachelor of Economics.
President & CEO of the ASSA ABLOY Group since the
Group was formed.
Board Member: Hexagon AB.
Member of the ASSA ABLOY Board since 1994.
Holdings: 3,906,471 Series B shares and Incentive 2001
convertibles corresponding to 60,000 Series B shares.

Melker Schörling
Vice Chairman
Born 1947.
Master of Business Administration.
Board Chairman: Securitas AB, Hexagon AB,
Karlshamns AB and Attendo Senior Care.
Board Member: Hennes & Mauritz AB, Skandia AB.
Member of the ASSA ABLOY Board since 1994.
Holdings privately and through company: 1,510,080
Series A shares and 10,497,734 Series B shares.

Per-Olof Eriksson
Born 1938.
Master of Engineering, Doctor of Technology, Hon. Bachelor.
Board Chairman: Svenska Kraftnät, Thermia AB, Odlander,
Fredriksson & Co and Sapa AB.
Board Member: Sandvik AB, AB Custos,
Svenska Handelsbanken, SSAB Svenskt Stål AB, Preem
Petroleum AB, Skanska AB, and AB Volvo.
Member of the Royal Swedish Academy of Engineering Sciences.
Member of the ASSA ABLOY Board since 1995.
Holdings directly and through company: 10,000 Series B shares.

Sven-Christer Nilsson
Born 1944.
Bachelor of Science.
Partner in Startupfactory, a venture capital company.
Board Member: Traction AB, Parthus Ceva Inc (USA),
Northstream AB, Establish AB and Utfors AB.
Member of the ASSA ABLOY Board since 2001.
Holdings: nil.

Mats Persson
Born 1955.
Union trustee at Assa AB, employee representative,
Swedish Metal Workers Union.
Member of the ASSA ABLOY Board since 1994.
Holdings: nil.

Gösta Johnsson
Born 1942.
Union trustee at Assa AB, employee representative,
Federation of Salaried Employees in Industry and Ser-
vices. Chairman of EWC within ASSA ABLOY since 1996.
Member of the ASSA ABLOY Board since 1997.
Holdings: 6,520 Series B shares.

Deputy members

Auditor: PricewaterhouseCoopers AB
Authorized Public Accountant, Anders Lundin, born 1956.
Main responsible since 1999.

Lisbeth Staaf
Born 1955.
Union trustee at FIX AB.
Board Member: Medichus AB.
Member of the ASSA ABLOY Board since
1999.
Holdings: nil.

Per-Edvin Nyström
Born 1955.
Union trustee at Assa Industri AB,
employee representative, Swedish
Metal Workers Union. Member of the
ASSA ABLOY Board since 1994.
Holdings: 1,207 Series B shares and
Incentive 2001 convertibles corre-
sponding to 6,426 Series B shares.

ASSA ABLOY / 2002 7 5

ASSA ABLOY’s
Group Management

Executive Management
and Group Vice Presidents

Carl-Henric Svanberg
Born 1952.
Master of Science, Bachelor of Economics.
President & CEO of the ASSA ABLOY Group since the
Group was formed.
Board Member: Hexagon AB.
Member of the ASSA ABLOY Board since the
Group was formed.
Holdings: 3,906,471 Series B shares and Incentive 2001
convertibles corresponding to 60,000 Series B shares.

Peter Aru
Born 1957.
Master of Science.
President and CEO of Besam.
Employed since July 2002*.
Holdings: nil

Anna Bernsten
Born 1961.
Master of Science.
Vice President of ASSA ABLOY, Residential
Employed since 2000.
Holdings: 665 Series B shares and Incentive 2001
convertibles corresponding to 15,000 Series B Shares.

Bo Dankis
Born 1954.
Master of Science.
Responsible for ASSA ABLOY South Europe.
Group Vice President of ASSA ABLOY.
Employed since 1997.
Holdings: 86,000 Series B shares and Incentive 2001
convertibles corresponding to 10,750 Series B shares.

Göran Jansson
Born 1958.
Graduate Diploma in Business Administration.
Chief Financial Ofﬁcer.
Employed since 1997.
Holdings: 351,784 Series B shares and Incentive 2001
convertibles corresponding to 60,000 Series B shares.

76 ASSA ABLOY / 2002

Hans Johansson
Born 1955.
Master of Science.
Responsible for ASSA ABLOY Scandinavia.
Group Vice President of ASSA ABLOY.
Employed since the Group was formed.
Holdings: 646,821 Series B shares and Incentive 2001
convertibles corresponding to 60,000 Series B shares.

Eero Leskinen
Born 1956.
Master of Science.
Responsible for ASSA ABLOY Central Europe.
Group Vice President of ASSA ABLOY.
Employed since the Group was formed.
Holdings through company: 736,265 Series B shares and
Incentive 2001 convertibles corresponding to 60,000 Series
B shares.

Thanasis Molokotos
Born 1958.
Master of Science.
President and CEO of ASSA ABLOY
North America Architectural Hardware Group.
Employed since 1996.
Holdings: 25,000 Series B shares and Incentive 2001
convertibles corresponding to 55,000 Series B shares.

Geoff Norcott
Born 1947.
Hon. Bachelor of Engineering (Industrial), 1st Class.
Responsible for ASSA ABLOY UK and
ASSA ABLOY South Paciﬁc.
Group Vice President of ASSA ABLOY.
Employed since1999*.
Holdings: Options corresponding to 81,065 Series B shares
and Incentive 2001 convertibles corresponding to 60,000
Series B shares.

From left:
Ulf Södergren, Clas Thelin,
Hans Johansson, Åke Sund,
Peter Aru, Carl-Henric Svanberg,
Anna Bernsten, Bo Dankis,
Göran Jansson, Eero Leskinen,
Matti Virtaala, Thanasis Molokotos
and Geoff Norcott.

Other members of
Group Management

Dag Schjerven
Born 1954.
Master of Business Administration
President and CEO of ASSA ABLOY
Hospitality.
Employed since October 1999.
Holdings: Options corresponding to
81,065 Series B shares and Incentive
2001 convertibles corresponding to
32,000 Series B shares.

Tzachi Wiesenfeld
Born 1958.
Master of Business Administration in
Industrial Engineering.
President and CEO of Mul-T-Lock
in Israel.
Employed since 1999*.
Holdings: nil

C.K. Jeang
Born 1955.
Master of Business Administration
and Science in Engineering.
President and CEO for ASSA ABLOY
Asia Limited.
Employed since 2000*.
Holdings: Incentive 2001 convertibles
corresponding to 32,500 Series B shares.

Joseph J. Grillo
Born 1957.
Bachelor of Finance and Economics.
President and CEO of ASSA ABLOY
Identiﬁcation Technology Group.
Employed since 2001*.
Holdings: Incentive 2001 convert-
ibles corresponding to 32,500
Series B Shares.

ASSA ABLOY / 2002 7 7

Åke Sund
Born 1957.
Graduate Diploma in Marketing.
Group Vice President of ASSA ABLOY, Market
Development and New Markets.
Employed since the Group was formed.
Holdings: 190,751 Series B shares and Incentive 2001
convertibles corresponding to 60,000 Series B shares.

Ulf Södergren
Born 1953.
Master of Science, Bachelor of Economics.
Group Vice President of ASSA ABLOY, Operations.
Employed since 2000.
Holdings: Options corresponding to 81,065 Series B shares
and Incentive 2001 convertibles corresponding to 60,000
Series B shares.

Clas Thelin
Born 1954.
Master of Science.
Responsible for ASSA ABLOY North America.
Group Vice President of ASSA ABLOY.
Employed since the Group was formed.
Holdings: 222,696 Series B shares and Incentive 2001
convertibles corresponding to 60,000 Series B shares.

Matti Virtaala
Born 1951.
Bachelor of Science (Engineering).
President of Abloy Oy and responsible for Finland.
Group Vice President of ASSA ABLOY.
Employed since the Group was formed.
Board Member: Tulikivi Oyj and Etteplan Oyj.
Holdings: 40,578 Series B shares and Incentive 2001
convertibles corresponding to 60,000 Series B shares.

* Indicates the year when the company became part of the ASSA ABLOY Group.

Australia
ABLOY SECURITY PTY LTD
Markets and sells the full range of abloy products.
Managing Director: Joe Lahoud

Unit 5, 372 Eastern Valley Way
P.O. Box 287
Chatswood, NSW 2068
Tel: +61 2 9882 6066
Fax: +61 2 9882 6050

LOCKWOOD SECURITY PRODUCTS PTY LTD
Manufactures and markets lock products such as
door and window hardware, mortise locks, rim locks
and door closers for the Australian residential and
commercial markets.
President: Geoff Norcott
General Manager Commercial Products: Joe Perera
General Manager Residential Products: Edgar Chin

Edward Street
P.O. Box 42
Oakleigh
Victoria 3166
Tel: +61 3 8574 3888
Fax: +61 3 8574 3400

TRIMEC TECHNOLOGY PTY LTD
Manufactures electric strikes and related products
for Australian and international markets.
Managing Director: Roy Bowyer

5/23 Resolution Drive
Caringbah, NSW 2229
Tel: +61 2 9524 0911
Fax: +61 2 9525 7390

Belgium
DUPÉRAY S.A
Speciﬁes locking solutions aimed at large building
projects with products mainly from IKON, effeff, Abloy
and other Group companies.
Managing Director: Dominique Osstyn

Rue Ysendyck 48-50
1030 Brussels
Tel: +32 2 247 79 11
Fax: +32 2 216 17 49

LITTO N.V.
Manufactures and sells locks and cylinders with an
emphasis on high security.
Managing Director: Fernand Clapdorp

Canadalaan 73
8620 Nieuwpoort
Tel: +32 58 23 41 01
Fax: +32 58 23 89 64

Brazil
LA FONTE SISTEMAS DE SEGURANCA LTDA
Manufactures and sells security products such as
locks, exit devices, and hinges for commercial,
residential and industrial applications.
President: Francisco Bastos

Rua Augusto Ferreira de Moraes,
618 – Socorro
CEP 04763-001
São Paulo
Tel: +55 11 5693 4700
Fax: +55 11 5693 4747

Canada
ASSA ABLOY OF CANADA
Markets and sells Sargent, McKinney, Arrow,
Securitron and HES products in Canada.
President: Greg M Erwin

3475 14th Avenue
Markham, Ontario L3R 0H4
Tel: +1 905 940 2040
Fax: +1 905 940 3242

ASSA ABLOY HOSPITAITY LDT/LTEE
Electronic locking systems ans in-room
electronic safes.
President: Larry Cechet

2 Holland Drive, Unit 8
Bolton, Ontario L7E 1E1
Tel: +1 905 857 7511
Fax: +1 905 857 7068

ABLOY CANADA
Markets and sells ABLOY products in Canada.
President: Stephen Timmons

9630 Trans Canada Hwy.
Montreal, QC H4S 1V9
Tel: +1 514 335 9500
Fax: +1 514 335 0430

FLEMING DOOR PRODUCTS LTD
Canada’s largest manufacturer of steel doors and
frames for the non-residential building market.
President: Bill Strong

20 Barr Road
Ajax, Ontario L1S 3X9
Tel: +1 905 683 3667
Fax: +1 905 427 1668

MEDECO OF CANADA
Market leader in high-security locks and lock
systems for doors and industrial applications.
President: Al Heaney
Markets and sells Medeco products in Canada.

545 Parkside Drive
Waterloo, Ontario N2L 5E7
Tel: +1 519 888 7000
Fax: +1 519 888 6134

YALE-CORBIN CANADA LIMITED
Sales, marketing and distribution sompany for Corbin
Russwin, Folger Adam, Norton, Rixon and Yale
Commericial Locks and Hardware.
President: Bill McLean

6940 Edwards Blvd.
Mississauga, Ontario L5T 2W2
Tel: +1 905 564 5854
Fax: +1 905 564 8182

Chile
POLI CERRADUAS LTDA
Manufactures and sells security products such
as mortise locks, rim locks, electric rim locks,
bored locks for the commercial and residental
markets in Chile.
President: Mario Oportus

Av. Manuel Rodriguez Sur 220
Casilla 195-D
Santiago
Tel: +562 560 9200
Fax: +562 639 5426

Addresses:

HEAD OFFICE:

ASSA ABLOY AB
Box 70340 (Klarabergsviadukten 90)
107 23 Stockholm, Sweden
Tel: +46 8 506 485 00
Fax: +46 8 506 485 85

Argentina
ITG, LATIN AMERICA
Ferrari 372
C1414EGD
Bueno Aires
Tel: +54 11 4772 5851
Fax: +54 11 4777 6491

Asia
ASSA ABLOY ASIA LTD
Acts as holding company for the Asia region,
marketing and selling Group products.
President and CEO: C.K. Jeang

1314 Park-In Commercial Centre
56 Dundas Street, Mongkok
Kowloon, Hong Kong
Tel: +852 2260 7220
Fax: +852 2834 7943

ASSA ABLOY HONG KONG LTD
Responsible for all sales and marketing activities
in North Asia (excluding China) covering Hong Kong,
Taiwan, the Philippines, Japan, Korea, Vietnam,
Myanmar, Cambodia and Laos.
General Manager: Keith Chan

1314 Park-In Commercial Centre
56 Dundas Street, Mongkok
Kowloon, Hong Kong
Tel: +852 2260 7220
Fax: +852 2834 7943

ASSA ABLOY MALAYSIA SDN BHD
Responsible for sales and marketing activities
in Malaysia.
Managing Director: Michael Pan

No. 1 & 3, Ground & Second Floor Jalan 2/27F
Kuala Lumpur Satellite Centre (KLSC)
Section 5, Wangsa Maju
53300 Kuala Lumpur
Tel +60-3-4142 8622
Fax +60-3-4142 9622

ASSA ABLOY SINGAPORE PTE LTD
Responsible for all sales and marketing activities
in South Asia (excluding Malaysia and Thailand)
covering Singapore, India, Pakistan, Bangladesh
and Indonesia.
Managing Director: Jim Heng Lee

No. 1, Kallang Way 2A, #02-00
347 495 Singapore
Singapore
Tel: +65 880 0000
Fax: +65 880 0500

ASSA ABLOY THAILAND LTD
Responsible for sales and marketing
activities in Thailand.
Managing Director: Tab Teh

4 Soi Pattanakarn 41, Pattanakarn Rd.
Kwang Suanluang
10250 City Khet Suanluang
Bangkok
Tel: +662-722 737 /ext. 1-4
Fax +662-722-737 /ext. 5-6

78 ASSA ABLOY / 2002

China
GULI SECURITY PRODUCTS LIMITED
The largest lock factory in China, manufacturing
and supplying primarily residential locks and door
closers for China and international markets.
President: C.K. Jeang

33-35 Chrysanthemum Road East
Xiaolan, Zhongshan
Guangdong 528415
Tel: +86 760 210 2326
Fax: +86 760 210 0316

Czech Republic
FAB A.S
Manufactures and markets construction locks,
industrial locks, padlocks, cable locks and car locks.
President: Vladimir Bayer

Strojnická 633,
516 21 Rychnov nad Kneznov
Tel: +420 494 511 121
Fax: +420 494 534 641

ABLOY CZECH S.R.O
Markets and sells Abloy, VingCard, effeff and
Securitron products in Czech Republic.
President: Tomas Richter

Kounicka 70
100 00 Praha 10
Tel: +420 274 822 585
Fax: +420 274 822 540

Denmark
FIX A/S
Sells ASSA ABLOY products to the Danish
door and window industry.
President: Keld Madsen

Baunehøjvej 9
8600 Silkeborg
Tel: +45 86 81 61 22
Fax: +45 86 81 00 26

RUKO A/S
Total supplier of locks and security products
for the Danish market.
President: Mogens Ahrens Jensen

Marielundvej 20
Postboks 505
2730 Herlev
Tel: +45 44 54 44 54
Fax: +45 44 54 44 44

Estonia
ABLOY OY EESTI FILIAAL
Markets and sells ABLOY products
in the Baltic countries.
Manager: Pasi Saarinen

Pärnu mnt. 139 F
113 17 Tallinn
Tel: +372 6 50 45 90
Fax: +372 6 50 45 91

ASSABALT AS
Markets and sells ASSA products in the Baltic
countries.
President: Tarmo Talvet

Valdeku 132,
112 16 Tallinn
Tel: +372 6 559 101
Fax: +372 6 559 100

Finland
ABLOY OY
Manufactures and markets lock cylinders, mechani-
cal and electromechanical locks, door closers, door
automatics and architectural hardware.
President: Matti Virtaala

Wahlforssinkatu 20
P.O. Box 108
80101 Joensuu
Tel: +358 13 2501
Fax: +358 13 250 2209

BJÖRKBODA LÅS OY AB
Manufactures and markets lock cases.
President: Henry Engblom

25860 Björkboda
Tel: +358 2 424 402
Fax: +358 2 424 249

France
ASSA ABLOY SOUTH EUROPE
6 rue des Frères Caudron
78457 Velizy-Villacoublay Cedex
Tel: +33 1 39 45 66 60
Fax: +33 1 39 45 66 69

ASSA ABLOY HOSPITALITY S.A.S.
President: Christian Henon

BP 46 37
92404 Courbevoie Cedex
Tel: +33 1 41 88 03 03
Fax: +33 1 41 88 02 88

ABLOY FRANCE S.A.S
Markets and sells the full range of ABLOY products.
Managing Director: Olivier Schuester

6, rue des Frères Caudron
78457 Velizy-Villacoublay
Tel : +33 1 39 45 66 20
Fax : +33 1 39 45 66 29

BEZAULT S.A.S.
Manufactures door and window ﬁttings.
Managing Director: Michel Brassié

25, rue Michel Couet
49160 Longué-Jumelles
Tel: +33 2 41 53 21 00
Fax: +33 2 41 38 81 45

FICHET SERRURERIE BATIMENT S.A.S.
Manufactures high-security cylinders, high-security
locks and security doors.
Managing Director: Robert Fidanza

B.P. 1080
76260 Eu
Tel: +33 3 22 61 27 00
Fax: +33 3 22 61 27 27

JPM S.A.S.
Manufactures locks, cylinders, panic bars and
escape ﬁttings.
Managing Director: Eric Beaudru

40 Route de Paris
Avermes
03021 Moulins Cedex
Tel: +33 4 70 48 40 00
Fax: +33 4 70 48 40 96

LAPERCHE S.A.S.
Manufactures multipoint locks, cylinders and
electromechanical locks.
Managing Director: Robert Fidanza

B.P 5
80531 Friville Cedex
Tel: +33 3 22 60 31 00
Fax: +33 3 22 30 17 18
STREMLER S.A.S.
Manufactures locks and ﬁttings for glass and
aluminum-frame doors.
Managing Director: Robert Fidanza

Route Nationale
80860 Nouvion-en-Ponthieu
Tel: +33 3 22 23 76 00
Fax: +33 3 22 23 76 09

VACHETTE S.A
Manufactures locks, multipoint locks, high-security
cylinders, panic bars and escape ﬁttings.
Managing Director: Frédéric Chanel

BP 524
10081 Troyes Cedex
Tel: +33 3 25 42 30 30
Fax: +33 3 25 42 40 04

Germany
ASSA-RUKO SICHERHEITSSYSTEME GmbH
Markets and sells the ASSA and Ruko lock
ranges on the German market.
President: Svend Mølgaard Petersen and
Erich Klosterkamp

Vogelsanger Strasse 187
50825 Köln
Tel: +49 221 54 30 76
Fax: +49 221 54 18 95

IKON GmbH PRÄZISIONSTECHNIK WERK POTSDAM
Manufactures and sells small lock systems
and standard lock products.
President: Bernd-D. Wempen

Postfach 600419
Behlerstrasse 29
14469 Potsdam
Tel: +49 331 288 80
Fax: +49 331 288 8106

IKON GmbH PRÄZISIONSTECHNIK
Mainly manufactures and sells high-security
cylinders and advanced masterkey systems.
CEO: Eero Leskinen
Presidents: Bernd-D. Wempen and Gerhart Ernst

P.O.Box 370220
14132 Berlin
Tel: +49 30 810 60
Fax: +49 30 810 626 00

effeff FRITZ FUSS GmbH & CO. KGaA
Manufactures and sells electronic and electrome-
chanical security systems.
Presidents: Martin Brandt, Bernhard Zimmermann
and Manfred Kötzle

Postfach 100490
72458 Albstadt
Tel: +49 7431 123 0
Fax: +49 7431 123 240

WILHELM DÖRRENHAUS GMBH
Manufactures and sells standard and special lock
cases, mainly for wooden doors.
President: Holger Ritz

Postfach 100180
42501 Krone bei Velbert
Tel: +49 2056 98 270
Fax: +49 2056 98 2798

ASSA ABLOY / 2002 7 9

Mexico
ASSA ABLOY MEXICO
Country Manager: Jorge Arnau

Av. 16 de Septiembre No. 105
Fracc. Industrial Alce Blanco
C.P. 53370
Naucalpan de Juarez
Estado de Mexico
Tel: +52 55 21 22 05 83
Fax: +52 55 21 22 05 87

GRUPO INDUSTRIAL PHILLIPS S.A. DE C.V.
Manufacturer of a complete line of rim and mortise
locks, hinges, padlocks and door hardware under
the brands PHILLIPS and PARKER.
General Director: Enrique Heitler Levy

16 de Septiembre 105
553 70 Naucalpan
Tel: +52 55 21 22 0512
Fax: +52 55 21 76 5402

TESA MEXICO
Residential locksets manufactured and assembled
for new construction, retail aftermarket applications
and export under the brands TESA and THOR.
President: Lars-Inge Aronsson

Avenida 8 de Julio
No. 2722 Zona Industrial (Z.I.)
Gualadajara, Jalisco C.P. 44940
Tel: +52 33 35 40 54 00

YALE SECURITY MEXICO S.A. DE C.V.
Market leader in Mexico in cylindrical and tubular
locks under the brands YALE and SEGUREX.
Responsible for distribution of TOVER locks.
General Director: Enrique Heitler Levy

Viaducto Rio de La Piedad, 525-A
Colonia Granjas
Mexico 8400 D.F. Mexico
Tel: +52 55 58 030800
Fax: +52 55 58 030872

Netherlands
AMBOUW B.V
Markets and sells mechanical and electromechanical
locks and building hardware on the Netherlands
market, mainly supplied by IKON and other ASSA
ABLOY companies.
President: Gert Lubbersen

Postbox 199
3870 CD Hoevelaken
Tel: +31 33 25 35 014
Fax: +31 33 25 35 064

LIPS NETHERLANDS B.V.
Manufactures an extensive range of electromechani-
cal and mechanical products, backed by after-sales
service and maintenance.
President: Jaap Wind

P.O. Box 59
3300 AB Dordrecht
Tel: +31 78 639 4041
Fax: +31 78 639 4605

VEMA SALES BV
President: Gert W. Lubbersen

Postbus 116
4940 AC Raamsdonksveer
Tel: +31 162 58 23 33
Fax: +31 162 58 23 36

New Zealand
INTERLOCK GROUP LIMITED
Manufactures and distributes door and window
security hardware in the New Zealand market and
exports to OEMs in USA, Japan, UK and Canada.
Managing Director: Anthony Gledhill

P.O. Box 15
103, Miramar, Wellington
Tel: +64 4 388 8355
Fax: +64 4 388 8353

LOCKWOOD ARROW N.Z
Manufactures door closers and markets Lockwood
products on the New Zealand market.
Manager: Bruce Pollard

P.O. Box 59219
Mangere Bridge, Auckland,
Tel: +64 9 634 5590
Fax: +64 9 634 5589

Norway
ASSA ABLOY HOSPITALITY A.S
President and CEO: Dag Schjerven

Group Headquarters
P.O. Box 533
N-1522 Moss

ELSAFE INTERNATIONAL A.S.
World leader in safes for hotel rooms.
President: Alvin Berg

7120 Leksvik
Tel: +47 74 85 35 00
Fax: +47 74 85 80 30

LÅSGRUPPEN A.S
Markets and sells locks and ﬁttings.
President: Bjørn Haugsvaer

PB 454 Brakerøya
3002 Drammen
Tel: +47 32 80 98 00
Fax: +47 32 80 98 52

TRIOVING A.S
Total supplier of locks and security products
for the Norwegian market.
President: Tor-Arne Jensen

Postboks 510 Høyden
1522 Moss
Tel: +47 69 24 52 00
Fax: +47 69 24 52 50

VINGCARD A.S
World-leading solution provider of card locks
and safes to the hospitality industry.
President and CEO of VingCard-Elsafe:
Dag Schjerven

P.O. Box 511
1411 Kolbotn
Tel: +47 66 81 40 00
Fax: +47 66 81 40 50

Philippines
ASSA ABLOY PHILIPPINES
Suite 501-K State Bldg.
333 Juna Luna St., Binondo Manila
Philippines
Tel: +63 2 244 2890
Fax: +63 2 244 2889

Hungary
ASSA ABLOY HUNGARY KFT.
Markets and sells ASSA ABLOY products in Hungary.
Managing Director: Géza Póka

1222 Budapest
Nagyétényi ut. 112
Tel: +36 1 226 16 16
Fax: +36 1 226 13 03

Israel
MUL-T-LOCK LTD
Produces high-security cylinders and locks for
institutional, commercial, industrial and residential
applications.
President and CEO: Tzachi Wiesenfeld

Mul-T-Lock Park
P.O. Box 637
Yavne 81104
Tel: +972 8 942 46 00
Fax: +972 8 942 46 09

Italy
MAB S.P.A.
Manufactures door closers, ﬂoor springs and panic
exit devices.
Managing Director: Gilberto Allievi

Via Del Tuscolano 6
401 28 Bologna
Tel: +39 051 354 0711
Fax: +39 051 325 108

NUOVA F.E.B. S.R.L.
Specializes in the production of locks, electric stri-
kes, panic exit devices and electrical supplies.
Managing Director: Gilberto Allievi

Via Seragnoli, 7
401 38 Bologna
Tel: +39 051 60300 11
Fax: +39 051 60137 81

YALE CORNI SISTEMI DI SICUREZZA S.P.A.
Panic devices, aluminum/ﬁre locks and electrome-
chanical/electronic closing systems.
Managing Director: Marco Carlini

Viale delle Nazioni 66
411 00 Modena
Tel: +39 059 413 111
Fax: +39 06 928 945 80

YALE SECURITY PRODUCTS S.P.A.
Sells cylinders, mechanical and electric rim/mortise
locks, cabinet locks, safes and padlocks, in Italy and
internationally.
Managing Director: Marco Carlini

Via dei Rutuli 74/76
040 11 Aprilia (LT)
Tel: +39 06 928 941
Fax: +39 06 928 945 80

Lithuania
ASSA Lithuania
General Manager: Orshevski Tadeush

Verkiu 44
2012 Vilnius
Tel: +370 52 300 671
Fax: + 370 52 300 673

80 ASSA ABLOY / 2002

Poland
ASSA ABLOY POLAND SP. ZO.O.
Markets and sells ASSA ABLOY products in Poland.
President: Jakub Gawecki

ul Warszawska 76
05-092 Lomianki
Tel: +48 22 751 40 25
Fax: +48 22 751 53 56

Portugal
ASSA PORTUGUESA, LDA
VD: Christian Nielbo

Avenida da Quinta Grande, 89D
Alfragide (Norte)
2720-483 Amadora
Tel: +351 21 471 96 23
Fax: +351 21 471 96 25

Romania
ASSA ABLOY ROMANIA S.R.L.
Markets and sells ASSA ABLOY products in Romania.
President: Dragos Savulescu

B-Dul, Sector 6
Preciziei Street, No. 5,
77562 Bucharest
Tel: +40 21 221 27 49
Fax: +40 21 221 25 49

URBIS INTERNATIONAL S.R.L.
Manufactures window and door hardware and sells
to other Group companies.
President: Victor Dobroiu

B-Dul, Sector 6
Precizei Street, No. 5
77562 Bucharest
Tel: +40 21 221 1384
Fax: +40 21 221 1290

URBIS SECURITY S.R.L.
Manufactures and markets locks and ﬁttings.
President: Gabriel Nicolaescu

B-Dul, Sector 6
Preciziei Street, No. 5,
77562 Bucharest
Tel: +40 21 221 11 55
Fax: +40 21 221 12 90

Russia
ABLOY OY REPR. OFFICE
Country Manager: Mikko Nissinen

119034, Moscow
Vsevolozhsky pereulok, 2/2
Tel: +7 095 937 5090
Fax: +7 095 937 5091
www.abloy.com.ru

ASSA AB REPR.OFFICE
Director Marketing and sales: Kirill Treshchev

2 Vsevolozskiy pereulok
Building 2, entrance 3
119034 Moscow
Tel: +7 95 937 50 90
Fax: +7 95 937 50 91

Slovenia
ASSA ABLOY SLOVENIJA
Manging Director: Franjo Radikovic
Kebetova 8
4000, Kranj, Slovenia
Tel: +386 4 280 77 44
Fax: +386 4 280 77 45

Slovak Republic
FAB SLOVAKIA S.R.O.
Manufactures lock cases; markets and sells other
FAB products.
President: Jaroslav Holzer

Zeleznichyrad 30
96801 Nová Bana
Tel: +421 45 685 0434
Fax: +421 45 685 0436

ABLOY SLOVAKIA S.R.O.
Markets and sells Abloy, VingCard, effeff and
Securitron products in Slovakia.
President: Tomas Richter

Saratouska 26 A
841 02 Bratislava
Tel: +421 2 434 139 93
Fax: +421 2 434 139 93

South Africa
ASSA ABLOY (SA) (PTY) LTD
Offers the most comprehensive range of
architectural, DIY and OEM ranges of physical
security hardware.
Manging Director: John Middleton

P.O. Box 146
1724, Roodepoort
Tel: +27 11 761 50 00
Fax: +27 11 766 34 11

Spain
AZBE B. ZUBIA S.A.
Manufactures and markets a complete portfolio,
through four Business Units.
President: Bo Dankis

Basabe 3, P.O. Box 13
20550 Aretxabaleta (Gipuzkoa)
Tel: +34 943 71 29 29
Fax: +34 943 79 86 43

TESA Talleres de Escoriaza S.A.
Manufactures a comprehensive range of products
including locks, multipoint locks, cylinders and
knobsets for buildings.
Managing Director: Jose Agustin Telleria

Bario de Ventas no. 35
IRUN 20305
Tel: +34 943 66 91 00
Fax: +34 943 63 32 21

AB FAS LÅSFABRIK
Market leader in mortise deadlocks.
President: Ulf Petersson

Box 60
Hejargatan 20
631 02 Eskilstuna
Tel: +46 16 17 02 33
Fax: +46 16 17 02 17

AKI LÅSGROSSISTEN AB
One of Sweden's leading locksmith's wholesalers.
President: Harry Grabinsky

Västbergavägen 24
Box 42115
126 12 Stockholm
Tel: +46 8 449 24 00
Fax: +46 8 18 74 30

BESAM INTERNATIONAL
World leader in the ﬁeld of door automatics. The
product range consists of automatic door operations
for swing doors, sliding doors and revolving doors.
President: Peter Aru

Box 131
SE-261 22 Landskrona
Tel: +46 418 511 00
Fax:+46 418 238 00

FIX AB
Manufactures and markets espagnolettes and ﬁxtures.
President: Jerry Pull

Bruksgatan 17
414 51 Gothenburg
Tel: +46 31 704 40 00
Fax: +46 31 14 23 55

SOLID AB
Develops and markets access control products.
President: John Hedesand

Sjöviksbacken 24 pl. 8
117 43 Stockholm
Tel: +46 8 685 10 00
Fax: +46 8 685 10 20

TIMELOX AB
Manufactures and markets card-operated electro-
mechanical locks for the hospitality market as well
as access controls for hospitals, administrative and
business areas.Timelox has distribution and support
channels worldwide.
President: Jan Wabréus

Sweden
ASSA AB
Manufactures and markets mechanical and electro-
mechanical lock products.
President: Hans Johansson

Lodjursgatan 2
261 44 Landskrona
Tel: +46 418 513 00
Fax: +46 418 286 96

Kungsgatan 71
Box 371
631 05 Eskilstuna
Tel: +46 16 17 70 00
Fax: +46 16 17 70 49

ASSA INDUSTRI AB
Manufactures and markets lock cases, hinges
and cabinet locks for industrial customers.
President: Tomas Perman

Box 371
631 05 Eskilstuna
Tel: +46 16 17 70 00
Fax: +46 16 17 70 86

Switzerland
IKON SA
Markets and sells IKON, BAB-IKON and ABLOY
products on the Swiss market.
President: Ugo Zanolari

B.P. 275
En Budron A6
1052 Le Mont-sur-Lausanne
Tel: +41 21 654 26 66
Fax: +41 21 654 26 60

KESO AG
Manufactures and sells high-security mechanical
and electromechanical cylinders and lock systems.
Presidents: Ernst Keller and Eugen Vigini

Untere Schwandenstrasse 22
8805 Richterswil
Tel: +41 1 787 34 34
Fax: +41 1 787 35 35

ASSA ABLOY / 2002 8 1

ROFU AG
Manufacturer of electric strikes and door magnets.
President: Ugo Zanolari

Rautistrasse 71
88043 Zürich
Tel: +41 1 404 10 60
Fax: +41 1 404 10 67

Ukraine
ABLOY OY REPR. OFFICE
President: Volodymyr Livinsky

Maryny Raskovol street 23
Room 1011
02002 Kyiv, Ukraine
Tel: +380 44 418 97 73
Fax: +380 44 430 32 18

United Kingdom
ABLOY SECURITY LTD.
Primarily markets ABLOY electromechanical locks,
padlocks and industrial locks.
Managing Director: Robin Rice

2-3 Hatters Lane
Croxley Business Park
Watford, Hertfordshire WD1 8YY
Tel: +44 1923 255066
Fax: +44 1923 230281

ASSA LTD.
Markets a complete range of ASSA, Ruko
and SOLID lock products.
Managing Director: Paul Green

75 Sumner Road,
Croydon, Surrey CRO 3LN
Tel: +44 2086 885191
Fax: +44 2086 880285

ASSA ABLOY HOSPITALITY LTD.
President: Howard Witt

21 Stadium Way, Portman Rd
Reading, Berkshire
RG30 6BX
Tel: +44 (1189) 452 200
Fax: +44 (1189) 451 375

C E MARSHALL LTD.
Manufactures and supplies high-security locks and
door handles as original equipment items to the
automotive industry.
Managing Director: Raymond Dovey

Church Street, Willenhall
West Midlands WV13 1QW
Tel: +44 1902 364 500
Fax: +44 1902 634 908

CHUBB LOCKS CUSTODIAL SERVICES LTD.
Provides custodial locking products and systems to
correctional facilities worldwide.
Managing Director: Steve Wood

P.O. Box 61
Wednesﬁeld Road, Wolverhampton
West Midlands
WV10 0EW
Tel: +44 1902 867 730
Fax: +44 1902 867 788

GRORUD INDUSTRIES LTD.
Manufactures and markets door and window ﬁttings.
Managing Director: Andrew Mee

Castleside Industrial Estate,
Consett, Co. Durham DH8 8HG
Tel: +44 1207 581 485
Fax: +44 1207 580 036

82 ASSA ABLOY / 2002

SECURITY PRODUCTS UK LTD.
Manufactures and markets a complete range of door
locks, padlocks and architectural hardware under the
Yale, Chubb and Union brands.
President: Geoff Norcott

CECO DOOR PRODUCTS
Manufactures a broad range of steel doors and
frames for commercial, industrial and institutional
construction markets.
President: Larry Denbrock

9159 Telecom Drive
Milan, TN 38358
Tel: +1 731 686 8345
Fax: +1 731 686 4211

CURRIES CO.
Manufactures a full range of hollow metal doors and
frames with primary focus on the institutional and
commercial market.
President: Jerry N Currie

P.O Box 1648
Mason City, IA 50402-1648
Tel: +1 641 423 1334
Fax: +1 641 423 9104

DOMINION BUILDING PRODUCTS
Manufactures a full range of steel frames and doors,
aluminum windows and preassembled door units for
industrial pre-engineered buildings.
President: Tom Granitz

Corporate Headquarters
6949 Fairbanks North Houston
Houston, TX 77040
Tel: +1 713 466 6790
Fax: +1 832 467 0290

ELECTRONIC DOOR SECURITY SALES GROUP
Persona branded software and stand-alone intelligent
locking solutions for the college/university market
President: Tor Baekkelund

110 Sargent Drive
New Haven, CT 06511
Tel: +1 800 481 8464 X3185
Fax: +1 203 787 9367

EMTEK PRODUCTS INC.
Decorative locks and hardware for the
residential market.
President: Thomas Millar

15250 E. Stafford Street
City of Industry, CA 91744
Tel: +1 626 961 0413
Fax: +1 626 336 2812

ESSEX INDUSTRIES, INC.
Joint sales operation for Curries, Graham, HES,
McKinney, Sargent and Securitron, with focus on
the institutional construction market.
Vice President, Sales and Marketing:
Joseph J Hynds, Jr.

P.O. Box 9804
New Haven, CT 06536-0804
Tel: +1 203 624 5225
Fax: +1 203 499 68 40

FOLGER ADAM ELECTRIC DOOR CONTROLS
Electric strikes, magnetic locks, power supplies and
door control accessories.
National Sales/Product Manager: Randy Whitkopf

9100 W. Belmont Ave.
Franklin Park, IL 60131
Tel: +1 847 671 4823
Fax: +1 847 671 0574

Wood Street, Willenhall
West Midlands WV13 1LA
Tel: +44 1902 366911
Fax: +44 1902 368535

United States
ASSA ABLOY NORTH AMERICA Inc.
Parent company for ASSA ABLOY’s operations
in North America.
President and CEO:Clas Thelin

P.O Box 9827
New Haven, CT 06536-0827
Tel: +1 203 624 52 25
Fax: +1 203 785 81 08

ASSA ABLOY HOSPITALITY INC.
VingCard, Timelox, Inhova, Elsafe
President: Mats Gustafsson

9333 Forest Lane
Dallas, TX 75243
Tel: +1 972 907 2273
Fax: +1 972 907 2771

ASSA ABLOY ITG, HEADQUARTERS
110 Sargent Drive
06511 New Haven
Tel: +1 203 499 6893

ABLOY SECURITY INC.
Active in the market for industrial locks.
President: Rick Bodenschatz

6005 Commerce Drive, Suite 330
Irving, TX 75063
Tel: +1 972 753 1127
Fax: +1 972 750 0792

ACCESSID
16625 Redmond Way
Redmond, WA 9805
Tel: +1 888 776 9329
Fax: +1 530 224 7304

ARROW LOCK MANUFACTURING
Mechanical locks and lock cylinders, with an empha-
sis on the aftermarket and the north-eastern USA.
President: Charles E. Armstrong

10300 Foster Avenue
Brooklyn, NY 11236
Tel: +1 718 257 4700
Fax: +1 718 257 32 99

ASSA INC.
Occupies a leading position in the high-security
segment of the market.
National Sales Manager: Thomas Demont

P.O. Box 9453
New Haven, CT 06534-0453
Tel: +1 203 603 5959
Fax: +1 203 603 5953

CORBIN RUSSWIN ARCHITECTURAL HARDWARE
Manufactures a full range of architectural door hard-
ware and locks, including mechanical and electro-
mechanical mortise and cylindrical locks, panic exit
devices, door closers and cylinders.
General Manager: Dan Daino

225 Episcopal Road
06037 Berlin, CT USA
Tel: +1 860 225 7411
Fax: +1 860 828 7266

FOLGER ADAM SECURITY INC.
Supplier of locks and hardware to the highest-security
markets, such as detention and correctional facilities.
President: Donald C Stading

16300 West 103rd Street
Lemont, IL 60439
Tel: +1 630 739 3900
Fax: +1 630 739 6400

GRAHAM MANUFACTURING CORP.
Manufactures architectural ﬂush wood doors.
President: Jerry N Currie

P.O. Box 1647
504 01 Mason City, IA 50402-1647
Tel: +1 641 423 2444
Fax: +1 641 423 1660

HES, INC.
Elechtromechanical locking devices and accessories.
President: Michel Web

2040 West Quail
Phoenix, AZ 85027
Tel: +1 623 582 4626
Fax: +1 623 582 4641

HID CORPORATION
World-leading producer of cards, readers and identi-
ﬁcation technology for the access control industry.
President and CEO: Denis Hebert

9292 Jeronimo Road
Irvine, CA 92618 1905
Tel: +1 949 598 1600
Fax: +1 949 598 1690

INDALA
World leader in production of RFIDcards and readers.
President: Steven J. Wagner

6850 B Santa Teresa Blvd
San Jose, CA 95119
Tel: +1 408 361 4700
Fax: +1 408 361 4701

MCKINNEY PRODUCTS CO
Manufactures a broad, complete line of hinges.
General Manager. John Cordes

820 Davis Street
Scranton, PA 18505-5999
Tel: +1 570 346 7551
Fax: +1 570 342 4845

MEDECO HIGH SECURITY LOCKS, INC.
Market leader in high-security locks and lock
systems for doors and industrial applications.
President: Robert Cook

P.O. Box 3075
Salem, VA 24153
Tel: +1 540 380 5000
Fax: +1 540 380 5010

NEL CORPORATION INC.
Primarily focuses on marketing and sales of exterior
security rim locks under the SEGAL brand.
President: Robert Cook

P.O. Box 3075
Salem, VA 24153
Tel: +1 540 380 5000
Fax: +1 540 380 5010

NORTON DOOR CONTROLS
Manufactures a comprehensive range of mechanical
and electromechanical surface door closers, door
holders and ADA automatic door operators.
General Manager: Doug Millikan

TRUSSBILT
Manufactures high-quality security hollow metal
products primarily for the detention market, with
a market leading position in this segment.
President: Tim Browne

3000 Highway 74 East
Monroe, NC 28112
Tel: +1 704 233 4011
Fax: +1 704 233 5053

RIXSON SPECIALITY DOOR CONTROLS
Manufactures concealed closers, pivots, and mecha-
nical/electromechanical door holders, particularly
suitable for special applications involving heavier
doors, stringent esthetic requirements or other uni-
que openings.
General Manager: Eric Tannhauser

9100 W. Belmont Avenue
Franklin Park, IL 60131
Tel: +1 847 671 5670
Fax: +1 847 671 0574

SARGENT MANUFACTURING CO.
Manufactures a complete line of locks and door har-
dware with a wide range of cylindrical locks, mortise
locks, exit devices, door closers, electromechanical
products and cylinder systems.
Director of Operations: Thanasis Molokotos

P.O. Box 9725
New Haven, CT 06536-0915
Tel: +1 203 562 2151
Fax: +1 203 776 5992

SECURITRON MAGNALOCK CORPORATION
Market leader in magnetic locks and other
electromechanical lock products.
President: Scott Baker

550 Vista Boulevard
Sparks, NV 89434
Tel: +1 775 355 5625
Fax: +1 775 355 5633

FINANCIAL ANALYSTS FOLLOWING ASSA ABLOY 2002

2112 Old Highway 8 NW
New Brighton, MN 55112
Tel: +1 651 633 6100
Fax: +1 651 628 9482

YALE COMERCIAL LOCKS AND HARDWARE
Manufactures a wide range of commercial door har-
dware and locks,including mechanical and electro-
mechanical mortise and cylindrical locks, panic exit
devices, dorr closers and cylinders.
General Manager: Dick Krajewski

100 Yale Ave.
Lenoir City, TN 37771
Tel: +1 865 984 7511
Fax: +1865 986 8630

YALE RESIDENTIAL SECURITY PRODUCTS, INC.
Residential locksets, deadbolts, handsets and
accessories.
General Manager: Michael Tracey

2725 B Northwoods Parkway
Norcross, GA 30071
Tel: +1 678 728 7400
Fax: +1 770 448 1102

YSG DOOR SECURITY CONSULTANTS
Sales, marketing, service, and support for Ceco Door
Products, Corbin Russwin, Folger Adam, Norton,
Rixson and Yale Commercial.
Vice President, Sales and Marketing: Larry Bonhaus

1902 Airport Road
Monroe, NC 28110
Tel: +1 704 283 2101
Fax: +1 704 283 9446

Zimbabwe
CHUBB UNION ZIMBABWE (PVT) LTD.
Markets a complete range of security products.
President: Rory Vahey

P.O. Box 2555
Harare
Tel: +26 34 759 196
Fax: +26 34 759 194

ABG Sundal Collier
Alfred Berg
BNP Paribas
CAI Cheuvreux
Carnegie
Cazenove Global Equities
CSFB
Deutsche Bank
Dresdner Kleinwrt
Enskilda Securities
Goldman Sachs
Handelsbanken
HSBC Investment Bank
JP Nordiska
Lehman Brothers
Merrill Lynch
Morgan Stanley
Nordea Securities
Societe Generale
UBS Warburg
Öhman J:or Fondkommission AB JOHAN GAHM, E

+44 (0)207 9055 631
ANDERS JEGERS
LARS NORRBY
+46 (0)8 723 59 65
CHRISTIAN DIEBITSCH +44 207 595 3467
+44 207 6215 177,
JEFF SAUL
+46 (0)8 676 86 88
ANDERS IDBORG
+44 207 214 7626
ILAN CHAITOWITZ
+44 207 888 0289
PATRICK MARSHALL
+46 (0)8 463 55 00
MATTIAS KARLKJELL
+44 20 7475 2476
FREDRIK KARLSSON
ANDERS TRAPP
+46 (0)8 5222 97 57
NICK PATON
CHRISTER BECKARD
CLAES RASMUSON
PEDER FRÖLÉN
PETER LAWRENCE
JOHN PEARSON
DANIEL CUNLIFFE
PATRIK SJÖBLOM
JONATHAN CUMMINS
ANDERS FAGERLUND

+46 (0)8 701 31 21
+46 (0)8 454 55 10
+46 (0)8 791 47 86
+44 207 256 4706
+44 20 7996 4192

+46 (0)8 453 73 30
+46 (0)8 402 52 68

anders.jegers@abgsc.com
lars.norrby@alfredberg.se
christian.diebitsch@bnpparibas.com
jsaul@caicheuvreux.com
andidb@carnegie.se
Ilan.chaitowitz@cazenove.com
patrick.marshall@csfb.com
mattias.karlkjell@db.com
fredrik.Karlsson@drkw.com
anders.trapp@enskilda.se
nick.paton@gs.com
chbe31@handelsbanken.se,
claes.rasmuson@hsbcib.com
peder.frolen@nordiska.com
pnlawren@lehman.com
john_pearson@ml.com
daniel.cunliffe@morganstanley.com
Patrik.Sjoblom@nordeasecurities.com
jonathan.cummins@socgen.co.uk
anders.fagerlund@ubsw.com
johan.gahm@ohman.se

ASSA ABLOY / 2002 8 3

Photo: Elisabeth Ohlson, Ulf Huett Nilsson and Lennart Ström

Illustrations: Ehrenstråhle & Co.

Production: Ehrenstråhle & Co AB. Prepress: DOG. Print: ATT Graﬁska, Stockholm 2003.

Annual Report 2002

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ASSA ABLOY AB (publ.)
Postal Address: P.O. Box 70340, SE-107 23 Stockholm • Visiting Address: Klarabergsviadukten 90

Phone: +46 (0)8 506 485 00 • Fax: +46 (0)8 506 485 85
Registered No.: SE.556059-3575 • Registered Office: Stockholm, Sweden • www.assaabloy.com