ASSA ABLOY Annual Report 2009

FY2009 Annual Report · ASSA ABLOY

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Annual Report
2009

The global leader in
door opening solutions

Contents

ASSA ABLOY in brief
Vision, financial targets and strategy
Statement by the President and CEO
Market presence
Product leadership
Cost-efficiency
Growth and profitability
EMEA division
Americas division
Asia Pacific division
Global Technologies division
Entrance Systems division
Employees
Sustainable development
Report of the Board of Directors
Significant risks and risk management
Sales and earnings
Income statement – Group
and Statement of comprehensive income
Comments by division
Results by division
Financial position
Balance sheet – Group
Cash flow
Cash flow statement – Group
Changes in equity – Group
Parent company financial statements
Notes
Comments on five years in summary
Five years in summary
Quarterly information
Definitions of key data terms
Proposed distribution of earnings
Audit report
Corporate governance report
Board of Directors
The Executive Team
The ASSA ABLOY share
Information for shareholders
Glossary

Report on operations

Divisions

CSR

Financial reports

Corporate governance
report

Shareholder information

1
4
8
18
26
30
34
36
38
40
44
46
48
54
57
60

61
62
63
64
65
66
67
68
70
72
100
101
102
103
104
105
106
110
112
116
120

Cover photograph:
ASSA ABLOY’s Hi-O solution at the
Gothenburg Opera House
The Gothenburg Opera House was the first ASSA ABLOY
customer to have a Hi-O door installed. Hi-O stands for
Highly Intelligent Opening and is a new technology based
on an established open standard for managing electrome-
chanical door products. Detailed information on the door’s
status is centrally logged. Simple installation and the facility
to connect the whole door environment to the building’s
IP network provide better security and simpler mainte-
nance procedures.

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ASSA ABLOY in brief

ASSA ABLOY’s divisions

ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user
needs for security, safety and convenience.

Division

ASSA ABLOY is represented all over the world, on both mature and emerging markets, with
leading positions in much of Europe and North America and in Australia. In the fast-growing
electromechanical security segment, the Group has a leading position in areas such as access
control, identification technology, door automation and hotel security.

Since its founding in 1994, ASSA ABLOY has grown from a regional company to an inter-
national group with 29,000 employees and sales of around SEK 35 billion. As the world’s
leading lock group, ASSA ABLOY offers a more complete range of door opening solutions
than any other company on the market.

2009 in brief

•

Sales increased by 0 percent to
SEK 34,963³ M (34,829³).
Operating income (EBIT) amounted
to SEK 5,413¹ M (5,526¹).
Earnings per share after full dilution
amounted to SEK 9.22¹ (9.21¹).
Operating cash flow
tially to SEK 6,843 M (4,769).
The two successful restructuring pro-
grams launched in 2006 and 2008 were
followed by a new program launched
in Q4 2009. This program entails the

4 increased substan-

closure of eleven production units and
the conversion of four units to final
assembly at a total cost of SEK 930 M.
These programs secure continued
efficiencies in the Group.
Substantial investments were made in
product development, which will make
a positive contribution to sales.
Eight companies were acquired during
the year, bringing in annual sales of
around SEK 1,175 M.

•

Americas

The division manufactures and sells locks, cylinders, elec-
tromechanical products, security doors and fittings on
the American continents. Most sales take place in the USA,
Canada and Mexico. South America is growing in signifi-
cance, with Brazil as the most important market. Some of
the division’s leading brands are Ceco, Corbin Russwin,
Curries, Emtek, Medeco, Phillips, SARGENT and La Fonte.
The division has 6,900 employees and divisional manage-
ment is based in New Haven, Connecticut, USA.

Americas’ share of Group total

Sales

Operating income (EBIT)

28%

33%

Division

Global Technologies

Key data

Sales, SEK M
of which: Organic growth, %
Acquired growth, %
Exchange-rate effects, %
Operating income (EBIT), SEK M
Operating margin (EBIT), %
Income before tax (EBT), SEK M
Operating cash flow, SEK M
Return on capital employed, %

Data per share

Earnings per share after tax and
dilution, SEK/share
Equity per share after dilution,
SEK /share
Dividend, SEK/share
Number of shares after dilution,
thousands

2007³

33,550
7
5
–4
5,458
16.3
4,609
4,808
18.4

2007

9.02

46.76
3.60

2008³

34,829
0
4
0
5,526¹
15.9¹
4,756¹
4,769
17.2¹

2009³

34,963
–12
3
9
5,413¹
15.5¹
4,779¹
6,843
16.2¹

Change

+0%

Division

Entrance Systems

–2%

+0%
+43%

Omsättning och rörelseresultat

2008

2009

Change

Sales and Operating income

+0%

9.21¹

55.91
3.60

9.22¹

54.76
3.60²

380,713

372,931

1 Excluding items affecting comparability. 2As proposed by the Board of Directors 3Figures for 2008 and 2009 are affected by
reclassification. For more information see Note 34. Figures for 2007 are not affected by reclassification. 4Excluding payments
related to restructuring.

R D I C ECOL

123

O
N
341

I
N

TED M A T T E

Sales
SEK M

36,000

30,000

24,000

18,000

12,000

6,000

Operating income
SEK M

6,000

 Sales1

Operating income2

5,000

4,000

3,000

2,000

1,000

08 09

¹ Figures for 2008 and 2009 are
affected by reclassification. For
more information see Note 34.
² Excluding items affecting com-
parability, 2006, 2008 and 2009.

1 Exklusive jämförelsestörande
poster 2006, 2008 och 2009.

2 Omklassificering har skett av 2008

Division

EMEA

Division

Asia Pacific

The division manufactures and sells locks, cylinders, electro-
mechanical products, security doors and fittings in Europe,
the Middle East and Africa (EMEA). Most sales take place in
Western Europe, but emerging markets in Eastern Europe
and the Middle East are gaining in importance. Some of the
division’s leading brands are ABLOY, ASSA, IKON, TESA, Yale,
Mul-T-Lock and Vachette. The division has 10,100 employ-
ees and divisional management is based in London, United
Kingdom.

The division manufactures and sells locks, cylinders, elec-
tromechanical products, security doors and fittings in Asia
and Oceania. Australia and New Zealand account for around
half of the division’s sales, while China and the rest of Asia
accounts for the other half. China is also an important coun-
try of production. Some of the division’s leading brands are
Baodean, Beijing Tianming, Guli, Interlock, iRevo, Lockwood,
Shenfei and Wangli. The division has 7,600 employees and
divisional management is based in Hong Kong, China.

EMEA’s share of Group total

Asia Pacific’s share of Group total

Sales

Operating income (EBIT)

38%

36%

Sales

10%

Operating income (EBIT)

This global division manufactures and sells products for
electronic access management, secure card issuance,
identification technology and electronic lock products
for hotels. The division consists of two business units, HID
Global and ASSA ABLOY Hospitality, which sell their pro-
ducts worldwide. Leading brands are HID, Fargo, Elsafe and
VingCard. The division has 2,400 employees and divisional
management is based in Stockholm, Sweden.

This global division manufactures and sells automatic
entrance solutions and service. The products are sold under
the brand names Besam, Ditec Entrematic and EM Entre-
matic. The division has sales and its own service operations
worldwide. Entrance Systems has 2,300 employees and divi-
sional management is based in Landskrona, Sweden.

Global Technologies’ share of Group total

Sales

Operating income (EBIT)

13%

Entrance Systems’ share of Group total

Sales

Operating income (EBIT)

11%

10%

Operativt kassaflöde och resultat före skatt

Vinst per aktie efter skatt och utspädning

Income before tax and Operating cash flow

Earnings per share¹ after tax and full dilution

SEK M

7,000

6,000

5,000

4,000

3,000

2,000

1,000

 Income before tax1
 Operating cash flow

08 09

¹ Excluding items affecting
1 Exklusive omstrukturering
comparability, 2006, 2008
2006 och jämförelsestörande
and 2009.
poster 2008.

SEK

08 09

¹ Excluding items affecting
1 Exklusive omstrukturering
comparability, 2006, 2008
2006 och jämförelsestörande
and 2009.
poster 2008.

creating opportunities for growth and profitability

today ASSA ABLOY is the leading global supplier of lock and security solutions. products from
ASSA ABLOY account for more than one in ten of all lock and security installations worldwide.
the strategy to further strengthen the group’s position is divided into three areas:

A world-leading market presence is achieved by exploiting the strength
of the brand portfolio, increasing growth in the core business and expanding into
new markets and segments. ASSA ABLOY has many of the industry’s strongest
brands. the sales teams on the local markets are united under the ASSA ABLOY
master brand to better meet the rising demand for more complete security solu-
tions. collaboration with architects, security consultants and major end-users on
the specification and project market is being intensified. the group is expanding
into new geographical markets through the development of distribution chan-
nels, with customized product offerings and through acquisitions.

the group’s product leadership is achieved through the continuous
development of products offering enhanced customer value and lower product
costs. A key activity for achieving this is the use of common product platforms
with fewer components. new products are also being developed in close collabo-
ration with ASSA ABLOY’s end-users and distributors to enhance customer value.
the product development process has been streamlined by implementing a
clearly defined common development process and by separating the mainte-
nance and improvement of existing products from new development.

efforts to increase cost-efficiency continue in all areas, including common
product platforms with fewer components and common product development.
in production, flexible final assembly close to the customer is combined with the
transfer of high-volume standard production to external and internal production
units in low-cost countries. the implementation of Lean methods continues, and
is leading to more efficient production flows, better control of material costs,
improved decision-making procedures, shorter development times and increased
cooperation between marketing and sales teams.

ASSA ABLOY creates opportunities for increased growth and profit-
ability through a strong focus on the strategy’s three areas of market presence,
product leadership and cost-efficiency.

ASSA ABLOY AnnuAL repOrt 2009

ViSiOn, FinAnciAL tArgetS And StrAtegY 1

Vision

•

to be the world-leading, most successful and most innovative provider
of total door opening solutions,

to lead in innovation and offer well-designed, convenient, safe and secure
solutions that create added value for our customers, and

•

to offer an attractive company to our employees.

Financial targets

•

10 percent annual growth through a combination of organic
and acquired growth.

•

An operating margin of 16–17 percent.

the financial targets are long-term goals and should be considered
as an average over a business cycle.

ViSiOn, FinAnciAL tArgetS And StrAtegY

ASSA ABLOY AnnuAL repOrt 2009

Strategy

the group’s overall focus is to spearhead the trend towards higher security with a product-driven
offering centered on the customer. the primary product areas are the traditional segments of
mechanical locks and security doors, as well as the fast-growing segments of electromechanical
and electronic locks, access control, identification technology and automatic doors.

ASSA ABLOY’s strong development is based on long-term structural growth in demand on the
group’s key markets in europe and north America, an increasing demand on new markets, and
successes in the fast-growing product segments.

the strategic action plans have been divided into three focus areas: market presence, product
leadership and cost-efficiency.

Strategy

product
leadership

pages 18–25

goal

growth and
profitability

pages 30–33

cost-
efficiency

pages 26–29

Market
presence

pages 8–17

ASSA ABLOY AnnuAL repOrt 2009

ViSiOn, FinAnciAL tArgetS And StrAtegY 3

Statement by the president and ceO
A challenging year with very good results

Although the general economic climate in 2009 was the most challenging in the group’s history, i can
proudly report that we succeeded in strengthening our market position and maintained high earnings
and margins. cash flow reached an all-time high and our financial position was robust. this was the result
of strong measures at all levels in the group. Meanwhile investments in product development and mar-
ket presence continued at a high level. As a result of this we finished the year as an even stronger and
more efficient company. Acquisition activity was resumed in the latter part of the year and a total of eight
acquisitions were completed.

Sales for 2009 increased
to SeK 34,963 M (34,829).
Operating income ex cluding
restructuring and non-
recurring costs fell by
2 percent to SeK 5,413 M
(5,526), equivalent to
an operating margin of
15.5 percent (15.9).

Strategic action plans
ASSA ABLOY’s strategic action plan is divided into the areas
market presence, product leadership and cost-efficiency.
We operate in an industry that is under consolidation, and
increased presence on existing and new markets is therefore
crucial for the Group’s position as market leader. Organic
growth is the single most important driving force and
requires a strong product leadership. At the same time con-
tinuous efforts to increase cost-efficiency are required to
create value. We create the opportunities for future growth
and continued high profitability by combining enhanced
market presence, strong product leadership and cost-
efficiency.

Market presence
The Group’s sales force has in recent years been united
under the ASSA ABLOY master brand to allow more effi-
cient market development. About 70 percent of the Group’s
products are sold ‘double-branded’, with the local brand
and the ASSA ABLOY master brand in combination. The
remaining 30 percent of products are sold under their own
global brands.

Clear market segmentation of the sales organization is
fundamental for continued growth in the core business. The
successful expansion of the marketing and sales organiza-
tion continued, with increased focus on specifiers, architects
and the fast-growing area of electromechanical door open-
ing solutions.

The Group is deliberately focusing on increasing its
presence on the emerging markets in Asia, Eastern Europe,
the Middle East, Africa and South America. These markets
accounted for nearly 17 percent of total Group sales in 2009,
compared with 9 percent five years ago. The 18 percent
mark was passed towards the end of the year as Asian mar-
kets showed good growth again, while North American sales
continued to decline and European sales were stable.

Acquisitions are an important part of the Group’s devel-
opment, complementing the product range, providing new
technology and increasing the Group’s geographical market
presence.

As a result of the financial crisis and the uncertain eco-
nomic situation in early 2009, acquisition activities were
stopped and only running projects were completed. As the
year progressed with a stabilizing sales trend on a number of
important markets and a strengthened balance sheet, acqui-
sition activities were resumed.

A total of eight acquisitions with annualized sales of around
SEK 1,175 M were completed. Major acquisitions included
Maiman, USA, Ditec, Italy, Portsystem 2000, Sweden and
Cerracol, South America.

Product leadership
Successful product development is the single most impor-
tant source for organic growth. ASSA ABLOY’s overall target
is to continuously develop products with increased cus-
tomer benefits and lower costs.

A key activity for achieving this is by using common prod-

uct platforms with fewer components. New products are
also developed in close collaboration with ASSA ABLOY’s
end-users and distributors to generate customer value.

The product development process has been streamlined

by implementing a clearly defined common development
process and by separating the maintenance and improve-
ment of existing products from new product development.
Customers are increasingly demanding more advanced

lock and door products and the technical level is con-
stantly rising. Meanwhile electromechanical door opening
solutions are growing considerably faster than traditional
mechanical products. Global common product platforms,
which are adapted to the local markets, have therefore
become increasingly important. These platforms are
developed by the Group product development function,
Shared Technologies, and through collaboration within and
between divisions.

Cost-efficiency
Cost-efficiency affects the production structure, product
costs and administrative flow in the Group.

The process of change in the production structure began

with the restructuring programs launched in 2006 and
2008. These have been very successful, resulting in large
savings and increased efficiency in the Group’s production
units. At year-end these programs had resulted in the clo-
sure of 36 production units, while an additional large num-
ber of units had switched to mainly final assembly. As a result
of this restructuring 4,631 employees have left the Group.
Another four units are set to close in 2010 on the comple-
tion of these programs. One consequence is that an increas-
ing volume of standard production has been transferred to
internal and external suppliers in low-cost countries. The
production process has been improved, while local

StAteMent BY the preSident And ceO

ASSA ABLOY AnnuAL repOrt 2009

» Future shareholder value is based on
organic and acquired growth as well
as continued rationalization and
synergies in the Group «

– Johan Molin, President and CEO

presence on end-customer markets ensures fast delivery
and efficient assembly of customized products.

The year saw two minor acquisitions in the Czech Republic
and South Africa.

These two restructuring programs were followed by a
new program launched in Q4 2009. In this program 11 pro-
duction units will be closed and four will be converted to
assembly. In addition, 11 primarily administrative units will
close. The total cost is SEK 930 M and the program will result
in a reduction of 1,200 employees in high-cost countries.

In parallel with the reorganization of production in high-

cost countries, it is very satisfying to see that ASSA ABLOY
has maintained a rapid expansion of the production base
in low-cost countries. More than 40 percent of the Group’s
total employees are now employed in low-cost countries.

In product development, the Group works with common

product platforms with fewer components and common
product development.

With regard to the Group’s administrative flow, efforts are
now focused on automated and standardized solutions, also
known as Seamless Flows. Manual work is to be reduced, and
in many cases eliminated, creating a seamless flow from the
customer through the company’s various processes to the
suppliers. Cost reductions and increased efficiency and quality
will be immediate as these solutions are implemented.

Development of the divisions
EMEA division
The EMEA division began the year with a weak sales trend,
due to the downturn in the housing market and the com-
mercial construction market. The situation stabilized in
the second half of the year and several markets returned to
positive growth at the end of the year. The division reported
organic growth of –12 percent (–2).

EMEA worked actively to increase the division’s market

presence through development of the specification and
project market, expansion into new markets and segments,
and acquisition growth.

The 2006 and 2008 restructuring programs are now near-

ing completion and the new program launched in 2009 is
mainly related to EMEA. Their successful results were clearly
seen in the strong operating income and operating margin
for the year despite the 12 percent organic sales decline.

Americas division
The Americas division reported organic growth of –19 per-
cent (4) for the year. Demand in the non-residential and
the residential segment was strongly down throughout the
year, with a particularly sharp fall in the demand for security
doors. However, most of the Latin American markets per-
formed better during the year, especially Brazil. Structural
and capacity adjustments helped maintain the operating
margin at a very strong level.

Americas continued to focus on the commercial mar-
ket during the year through increased efforts by its own
specification consultants and a common, segmented sales
organization. By focusing on the early design phases in new
construction and renovation projects in the non-residential
market segment the division was able to influence current
and future construction projects. This was very success-
ful and led to increased market shares and stronger mar-
ket positions. A number of new products, mainly electro-
mechanical and environmentally sensitive solutions, were
launched.

Structural measures and Lean methods continued suc-
cessfully. The year saw the acquisition of the North American
door manufacturer Maiman and the South American com-
pany Cerracol, the market leader on the Central American
lock market.

Asia Pacific division
The Asia Pacific division reported organic growth of –1 per-
cent (0) for the year. The initial negative sales trend reversed
in the second half and the year finished with positive growth
on all markets. Growth in China was particularly strong.
Export sales to the Group’s units in North America and West-
ern Europe also improved towards the end of the year.

The operating margin improved thanks to efficiency pro-

grams which continued at a good pace.

Asia Pacific is working actively on a number of initia-
tives to increase the division’s market presence. Some of
the key initiatives are development of the specification and
project market, expansion into new markets and segments,
and acquisitions. No acquisitions were completed during
the year, but an agreement was signed to acquire Pan Pan,
China’s largest manufacturer of security doors.

ASSA ABLOY AnnuAL repOrt 2009

StAteMent BY the preSident And ceO 5

Statement by the president and ceO

The year saw two major acquisitions, Ditec, Italy, and Port-
system 2000, Sweden, and two minor acquisitions in the
USA and New Zealand.

Future development
The Group is well positioned for long-term sustainable
growth due to our position as market leader with a global
presence. Our focus on the non-residential segment, the
high proportion of aftermarket sales and the increasing
share of fast-growing electromechanical and electronic
products contributes to stability in growth and earnings.

Market situation
The global economy weakened gradually in 2008 and accel-
erated in 2009. Towards the end of the year the market situ-
ation stabilized in Europe, Asia returned to growth, while
North America remained weak. In 2010 the organic growth
is expected to be about 0 percent. This is mainly because
the turnaround on the US market is expected to take at least
another six months. Our focus will therefore be on selective
growth initiatives where we see market opportunities and
continued cost control where the market is weak.

Major efforts by employees
Finally I should like to thank all our employees who contrib-
uted to the Group’s successes during the year, and I look
forward to our continued joint efforts to make ASSA ABLOY
even more successful.

Since its formation in 1994, ASSA ABLOY has gone
through several distinct stages of development and estab-
lished a global leadership position. Much has been accom-
plished, but many key markets and product areas remain to
be consolidated. We have never had a better product range,
higher market penetration or more innovative new products
than today. The continued demand for safety and security,
along with continued population growth and urbanization,
ensures that there is an underlying structural demand for the
Group’s products, which will increase over time. Combined
with the restructuring measures currently under implemen-
tation, this means that we have excellent long-term oppor-
tunities for continued growth and good profitability.

Stockholm, 12 February 2010

Johan Molin
President and CEO

Global Technologies division
The Global Technologies division reported organic growth
of –12 percent (0) for the year, but the operating margin
increased as a result of implemented restructuring mea-
sures. The HID Global business unit was impacted by the
downturn on the North American market, but growth stabi-
lized towards the end of the year. The ASSA ABLOY Hospital-
ity business unit reported negative growth throughout the
year, driven by a substantial downturn in the hotel industry
affecting both new construction and major renovations.

HID Global continued its long-term investments in mar-
ket presence and sales despite the adverse business climate
in 2009. One important priority for HID Global is the global
launch of ‘HID on the Desktop’, a series of logical access solu-
tions that help to increase utilization of existing investments
in physical access.

In recent years demand for Hospitality’s RFID technol-
ogy has increased and this now accounts for a significant
percentage of the electronic locks produced. RFID technol-
ogy offers higher security and when combined with ZigBee
wireless technology provides a very reliable and cost-effi-
cient security system, improving efficiency and reducing
maintenance costs for hotels. Nearly 50,000 rooms are now
equipped with VingCard’s VisiOnline wireless system.

Entrance Systems division
The Entrance Systems division reported organic growth
of –3 percent (3), but the operating margin improved as a
result of implemented restructuring measures and stan-
dardization of the product range. The sales trend was very
stable during the year. New product sales fell, but were
mostly offset by positive service sales-growth.

During the year Entrance Systems continued to expand

its customer offering by selling total automatic entrance
solutions, including a comprehensive service concept.
Regular preventive maintenance is beneficial for custom-
ers, and ongoing contact with these end-customers also
enhances opportunities for additional sales. Great impor-
tance is attached to the sales training of service engineers
to take advantage of their daily contact with customers. In
the service organization the division worked on increasing
efficiency, further automating processes and increasing the
number of customer visits.

Several important projects to transfer component pur-
chases and production capacity to low-cost countries were
completed during the year and new projects were initiated
to further reduce product costs.

God utveckling av vinst per aktie

Good development of earnings per share

SEK

10
9
8
7
6
5
4
3
2
1
0

StAteMent BY the preSident And ceO

ASSA ABLOY AnnuAL repOrt 2009

ASSA ABLOY’s Executive Team
Seated, left to right: tomas eliasson, chief Financial Officer (cFO); thanasis Molokotos, head of
Americas division; Johan Molin, president and ceO and head of global technologies division;
tzachi Wiesenfeld, head of eMeA division. Standing, left to right: Juan Vargues, head of entrance
Systems division; Jonas persson, head of Asia pacific division; ulf Södergren, chief technology
Officer (ctO); denis hébert, head of the hid global business unit; tim Shea, head of the
ASSA ABLOY hospitality business unit.

A world-leading market presence
is achieved by exploiting the
strength of the brand portfolio,
increasing growth in the core
business and expanding into new
markets and segments.

Market
presence

Market presence
three main approaches to enhancing
market presence

A world-leading market presence is achieved by exploiting the strength of the brand portfolio,
increasing growth in the core business and expanding into new markets and segments.

» ASSA ABLOY has its own operations in 50 countries

and sales all over the world «

THE MARKET

The security market
Today ASSA ABLOY is the world-leading supplier of total
door opening solutions. As the Group has grown, its prod-
uct portfolio has expanded and evolved to cover the widely
varying needs of, for example, airports, schools, hospitals,
offices and homes. Growth in the security market is mainly
fueled by increasing prosperity, urbanization and a general
trend toward higher security. The underlying trends and
growing uncertainty in the world put security high on the
agenda, driving the development of increasingly advanced
solutions and upgrades of existing security systems.

The total security market consists primarily of security
services and electronic and mechanical security products.
ASSA ABLOY estimates the total security market to be worth
around EUR 200 billion. The Group has focused its opera-
tions on electronic and mechanical security products as
well as security doors. The segment in which the Group is
active accounts for around 15 percent of the total market.
ASSA ABLOY has a global market share of over 10 percent
of that segment but with large variations between different
markets.

Mechanical and electronic security products
In addition to locks, the mechanical security product range
mainly includes door closers, emergency exit devices and
window hardware. ASSA ABLOY is also a major manufac-
turer of security doors and door hardware. Development
in mechanical security products is mainly driven by reno-
vations and replacements of old locks in existing windows
and doors, as well as new construction. The market is grow-
ing in pace with each country’s GDP, averaged over an eco-
nomic cycle, and is relatively stable for ASSA ABLOY. This is
due to the fact that the large aftermarket makes this market
less sensitive to cyclical fluctuations, and to the fact that
ASSA ABLOY’s operations are spread across a large number
of countries with different economic cycles.

ASSA ABLOY’s range of electronic security products includes
electronic cylinders, automatic doors, secure identifica-
tion and various access control products, some of which use
radio-frequency identification (RFID). Electronic products
generally offer high functionality and high security, mak-
ing them ideal for commercial applications. Focused prod-
uct development in this area is constantly expanding the
applications for ASSA ABLOY’s electromechanical products.
Annual growth in the market for electronic security prod-
ucts is estimated to be two to three times as great as for
mechanical security products. This is partly due to the fact
that today only 3–4 percent of all doors are electromechani-
cal, but the percentage is steadily rising. Electronic products
account for around one-third of Group sales, and that share
is increasing every year.

Customer segments
ASSA ABLOY’s main customer segment is the non-residential
segment comprising institutional and commercial custom-
ers, which accounts for around 75 percent of sales, while the
residential segment accounts for about 25 percent.

Major customers
– the institutional and commercial market
This segment consists of institutional and commercial cus-
tomers such as universities, hospitals, offices, airports and
shopping malls, through which a large number of people
pass daily. ASSA ABLOY usually has primary contact with the
customer’s head of security, a person well acquainted with
security needs who actively participates in the planning of
security solutions. Such projects often have long lead times
and are based principally on customized solutions. Distri-
bution and installation are largely handled by installers and
locksmiths.

Small and medium-sized customers
This segment is characterized by the customer’s need for
professional advice and installation, which is primarily met
by specialized distributors and installers such as locksmiths.

MArket preSence

ASSA ABLOY AnnuAL repOrt 2009

Sales by region 2009

35 %
–15 %

Share of Group sales in local currencies 2009, %
change relative to the previous year, %

46 %
–7 %

10 %
+7 %

2 %
–10 %

Increased sales on emerging markets

2 %
+5 %

5 %
–7 %

2004

2009

Emerging markets, 9%
Mature markets, 91%

ASSA ABLOY AnnuAL repOrt 2009

Emerging markets, 17%
Mature markets, 83%

MArket preSence 11

Market presence

ASSA ABLOY works actively to train distributors and to
develop more standardized solutions for small and medium-
sized companies such as stores and offices.

tions were equally large in Europe and in the USA the total
market would roughly double. This represents considerable
potential for ASSA ABLOY.

The consumer market
The majority of sales are replacements or upgrades of exist-
ing security products. Private customers have a great need
for advice and installation assistance. ASSA ABLOY has devel-
oped a number of home security concepts to meet con-
sumer needs. In some geographical markets, ASSA ABLOY
also works with door and window manufacturers or special-
ized distribution channels such as DIY stores and locksmiths.

Distribution channels
Today’s market is characterized by products mainly reaching
the end-customer through a variety of distribution chan-
nels, notably locksmiths, building and lock wholesalers, door
and window manufacturers and security system integrators.

Differences between markets
North Americans spend more than twice as much on emer-
gency exit devices as Europeans. Conversely, northern Euro-
peans spend three to four times as much on high-security
locks for their homes as North Americans. Automatic doors
are also much more common in Europe than in the USA.
Electromechanical products are considerably more preva-
lent in the non-residential segment than in the residential
segment. If the demands for security and evacuation solu-

Globally, the lock market is still fragmented. However, the

market in each country is relatively consolidated, as compa-
nies in the industrialized world are often still family-owned
and leaders on their home markets. They are well-estab-
lished and have strong ties with local distributors. In less-
developed countries, however, established lock standards
and brands are less common.

Competition
Although some consolidation has taken place over the past
ten years, the security industry is still fragmented in a global
perspective. Some countries have one strong manufacturer
with a large share of the local market. These companies
often focus on their domestic market and have limited inter-
national operations.

ASSA ABLOY is the global market leader; its main com-
petitors are four other major players, which operate in part
in ASSA ABLOY’s segment: Ingersoll-Rand, Stanley Black &
Decker, Dorma, and Kaba. Two of these are based in the USA
and two in Europe. All these competitors are strongest on
their home markets as well as having a presence on some
other markets, although none of them has international
market penetration comparable with ASSA ABLOY’s. The
Asian market is still very fragmented; even the largest manu-
facturers have modest market shares.

» North Americans spend more than twice as much on emergency exit devices as

Europeans. Conversely, northern Europeans spend three to four times as much on
high-security locks for their homes as North Americans. Automatic doors are also
much more common in Europe than in the USA. «

Hela säkerhetsmarknaden

Omsättning per produktgrupp

The total security market

ASSA ABLOY’s sales by product group

 ASSA ABLOY’s

product areas, 15%

 Security guards
& other, 27%
 Fire alarms, 2%
 Doors and windows, 40%
 Intrusion protection, 3%
 IT security & logical
access control, 4%
 Alarm centers, 9%

 Mechanical locks,
lock systems and
accessories, 45%
 Electromechanical
and electronic
locks, 35%

 Security doors and

fittings, 20%

MArket preSence

ASSA ABLOY AnnuAL repOrt 2009

of ASSA ABLOY’s sales consist
of renovations, refurbishments,
extensions, replacements and
upgrades.

67 %
33 % of ASSA ABLOY’s sales consist

of new construction.

ENHANCED MARKET PRESENCE

ASSA ABLOY’s strategy for enhancing its market
presence has three main aspects:
•
•
•

Exploiting the strength of the brand portfolio.
Increasing growth in the core business.
Expanding into new markets and segments.

Exploiting the strength of the brand portfolio
Common sales force
In order to compete effectively in a global market, the
sales force operates as an integrated organization under
the ASSA ABLOY master brand. The sales staff represent
ASSA ABLOY but retain their link to the established local
brands. Consequently, customers can be offered total door
opening solutions while still recognizing the old brands.

ASSA ABLOY’s brand strategy
As a result of its many acquisitions, ASSA ABLOY owns a
variety of well-known brands and has the world’s larg-
est installed lock base. In order to exploit and manage
this valuable asset while benefiting from the Group’s size,

ASSA ABLOY’s logo is combined with the individual product
brands. This approach preserves the link to the installed lock
base, while increasing the visibility of the ASSA ABLOY mas-
ter brand.

The master brand is complemented by a number of
global brands, which are all leaders in their respective mar-
ket segments. These brands are HID in access control, secure
card issuance and identification technology, Yale in the resi-
dential market, Besam in automatic doors, and Mul-T-Lock
and ABLOY in high-security locks. The growing visibility of
ASSA ABLOY as the master brand for complete security solu-
tions demonstrates the great breadth of the Group’s prod-
uct range as the world’s largest supplier of security solutions.

Increasing growth in the core business
Growth in the core business is promoted through close
collaboration with architects, security consultants, major
end-users and distributors. Continued clear market seg-
mentation is also vital for offering relevant solutions to the
customer.

Complete security solutions
The requirements in different areas vary greatly, since the
security solution for each door is adapted to the door’s loca-
tion and application, for example an entrance door or a door
to a computer room or a conference room. The door’s func-
tionality must also be adapted on the basis of security and
convenience. This may be affected by whether it is an inter-
nal or external door, the frequency of opening, the number
of users, and special requirements such as fire safety. Cus-
tomers are also increasingly demanding that the products
can be easily integrated into new or existing security sys-
tems and IT networks.

Vad driver efterfrågan?

Fördelning kundsegment

What drives demand?

Breakdown by customer segment

 Aftermarket1, 67%
 New construction, 33%

¹ the aftermarket consists of

renovation, rebuilding, extensions,
replacements and upgrades.

 Commercial and
institutional
customers, 75%
 Residential market
– private customers,
25%

ASSA ABLOY AnnuAL repOrt 2009

MArket preSence 13

Market presence

Specification of security solutions increasingly important
Bringing new and innovative solutions to market requires
close collaboration not only with distributors, but also with
architects, security consultants and major end-users. This
collaboration stimulates demand from distributors and cus-
tomers. Building and lock wholesalers, security consultants
and locksmiths have a key role in delivering the products
specified for various construction projects. ASSA ABLOY has
developed close collaboration with architects and security
consultants to specify appropriate products and achieve a
well-functioning security solution. Many door and window
manufacturers install lock cases and fittings in their prod-
ucts before delivering them to customers.

In contrast, electronic security products mainly reach the

end-user via security installers and specialized distributors.
These products are also sold through security integrators
who often offer a total solution for the installation of peri-
meter protection, access control and increasingly also com-
puter security.

Increased focus on distributors
ASSA ABLOY works closely with its distribution channels to
offer end-customers the right products, correct installation
and consequently a well-functioning security solution. Dis-
tributors also have a key role in providing service and sup-
port after installation. This role may vary between different
customer segments. In the non-residential segment, distrib-
utors in some markets act as consultants and project man-
agers to create good security solutions. They understand
the customer’s needs and ensure that products comply with
local regulations.

As technology moves towards more complex security

solutions, distributors need increasing skills levels. Lock-
smiths, who are key distributors of mechanical and elec-
tromechanical security products on many markets, are
an example of specialized security distributors. They buy
direct from the manufacturer or via wholesalers and provide
advice, products, installation and service. Some locksmiths
have an increased focus on electronics, while IT integrators
are increasingly also offering physical security solutions.

75 %

of sales are to the
institutional and
commercial market.

25 %

of sales are to private
customers and the
residential market.

Distribution channels for the security market

In today’s security mar-
ket, manufacturers of
security products, such
as ASSA ABLOY, mainly
reach their end-customers
through a variety of distribu-
tion channels. Many of the
Group’s products are sold
in small volumes to a large
number of end-customers
with very different needs.

Specification of security solutions

Security system integrators

Locksmiths and

security installers

ASSA ABLOY

Wholesalers

– building and lock suppliers

retailers

– DIY, hardware and

security stores

OeMs, door and

window manufacturers

Increased demand

LArGe InStItutIOnAL AnD
cOMMercIAL cuStOMerS
• Healthcare • Education • Retail
• Hospitality • Offices • Industrial

SMALL AnD MeDIuM-SIZeD
cuStOMerS
• Offices • Stores

reSIDentIAL cuStOMerS
• Apartments • Houses

MArket preSence

ASSA ABLOY AnnuAL repOrt 2009

The ASSA ABLOY master brand

Examples of product brands

ASSA ABLOY is the Group’s master brand, under which the sales departments unite.

Well-known product brands benefit from the large installed lock base and are adapted to comply with local regulations
and safety standards. The product brands are combined with the ASSA ABLOY master brand.

Two focused brands for specific segments

Global brands with a unique market position

Besam is a world-leading supplier of automatic entrance
solutions. VingCard is the world’s best-known brand for
lock systems in the hospitality and cruise ship market.

Complementary global brands, where the products’ leading position and market
positioning in their specific segment are unique or overlap with ASSA ABLOY.

ASSA ABLOY AnnuAL repOrt 2009

MArket preSence 15

Market presence

70 %

About 70 percent of the Group’s products are
sold with the local brand and the ASSA ABLOY
master brand in combination.

Expanding into new markets and segments
The Group is expanding into new markets and segments
by establishing ASSA ABLOY in new geographical markets,
developing the OEM market, exploiting opportunities on the
residential market, and introducing new technology.

Geographical expansion is achieved principally through
acquisitions. By establishing ASSA ABLOY on markets with ris-
ing populations and developing economies, the Group can
build a strong platform for future growth. The emerging mar-
kets in Asia, Eastern Europe, the Middle East, Africa and South
America accounted for nearly 17 percent of the Group’s total
sales in 2009, compared with 9 percent five years before, and
the figure passed 18 percent towards the end of 2009.
The Group’s presence on the OEM market for door
and window manufacturers varies between markets.
There is considerable potential here for improved market
penetration.

Efforts to develop channels and products for the residen-
tial market continue, with digital door locks a high-priority
product area.

The increased demand for electromechanical products is

one of the clearest trends in the security market. This prod-
uct area is also seeing increased technical standardization
in which different components in the security solution can
be easily integrated with one other. ASSA ABLOY’s products
aim for open standards to facilitate integration with the cus-
tomer’s other security and administrative systems. Interest-
ing new growth areas are created by exploiting the Group’s
strength in specific technologies. One example is RFID,
which is now adapted to special applications such as con-
tactless hotel locks opened by a card.

» The common sales organization operates under the
ASSA ABLOY master brand, but also acts as representatives
of the local product brands recognized by the customer«

ASSA ABLOY’s total sales by region

 Europe, 46%
 North America, 35%
 Australia and

New Zealand, 5%

 Asia, 10%
 Central and

South America, 2%

 Africa, 2%

 ASSA ABLOYs

produktområden, 15%
 Bevakning & övrigt, 27%
 Brandlarm, 2%
 Dörrar & fönster, 40%
 Intrångsskydd, 3%
 IT-säkerhet & logisk

behörighetskontroll, 4%

 Larmcentraler, 9%

MArket preSence

ASSA ABLOY AnnuAL repOrt 2009

ASSA ABLOY part of chinese building history

A graceful and sturdy ‘sculpture-style’ structure, the new
home of state broadcaster china central television (cctV)
is considered a breakthrough in architectural design. the
550,000 square meter headquarters building will contain
more than 12,000 doors, and be the largest application of
American AnSI (American national Standards Institute)
standards.

to meet the requirements of standards, ASSA ABLOY has
delivered a complete solution with locks, door closers, exit
devices and electric strikes.

Irene Yip, ASSA ABLOY Hong Kong’s General Manager,

says it took a combination of close cooperation and commit-
ment throughout the Group to secure the deal.
‘From the outset of this project, we worked closely with the
jury and architect to specify the customer’s requirements.
We were able to secure the project by offering user-friendly,
systematic solutions, quality products and technical know-
how.’ Irene says.

the cctV headquarters is attracting widespread interest
for its innovative design, best described as a continuous loop
of five vertical and horizontal sections, rather than a tradi-
tional television tower.

Olympiastadion Berlin

Olympiastadion Berlin attracts thousands of visitors every
year and is the largest arena in Germany. When the multi-
functional venue needed a highly flexible and comprehen-
sive security concept, Verso cLIQ was the answer.

“Verso cLIQ provides us with the excellent level of
security we desire,” says Sylvan Bandke, technical Man-
ager at Olympiastadion. “the security system combines
highly developed microelectronics with intelligent data
encryption. this includes advantages such as the ability to
re program locking cylinders quickly, which reduces the
security risk associated with lost keys.”

the stadium hosts many events with a high volume of
visitors and it is important that the security system has pro-
grammable locking cylinders. the stadium can provide indi-
vidual event organizers and their subcontractors with flex-
ibility in managing access authorizations.

the cLIQ cylinders could also be customized to fit doors

in the old parts of the building. there is no need for struc-
tural alterations or expensive cabling to the door because
the keys supply the energy to operate the system and com-
municate with the cylinder.

ASSA ABLOY AnnuAL repOrt 2009

MArket preSence 17

Product
leadership

The Group’s product leadership is
achieved through the continuous
development of products offering
enhanced customer value and lower
product costs.

product leadership
Successful product development
drives organic growth

ASSA ABLOY’s vision is to be the most innovative supplier of total door opening solutions. Over the past
few years investments in research and development have increased substantially. Successful product
development is the single most important source of organic growth. ASSA ABLOY is creating tomorrow’s
security solutions by exploiting the skills and expertise of its divisions and by developing common tech-
nology platforms. Secure, convenient and flexible solutions for the door environment provide the basis
for future growth.

Product leadership
Successful product development is the single most impor-
tant source of organic growth. ASSA ABLOY’s overall goal is
the continuous development of products offering enhanced
customer value and lower product costs. A crucial activity
for achieving this is using common product platforms with
fewer components. New products are also developed in
close collaboration with ASSA ABLOY’s end-users and dis-
tributors to enhance customer value. The product devel-
opment process has been streamlined by implementing a
clearly defined common development process and by sepa-
rating the maintenance and improvement of existing prod-
ucts from new development. Customers are increasingly
demanding more advanced lock and door products and the
technical level is constantly rising, with electromechanical
door opening solutions growing considerably faster than
traditional mechanical products. Global common product
platforms, which are then adapted to the local markets, have
therefore become increasingly important. These platforms
are developed by the Group product development function,
Shared Technologies, and through collaboration within and
between divisions.

Today’s customer base helps to develop tomorrow’s
security solutions
ASSA ABLOY has the largest base of installed locks and lock
systems in the world and its products are well adapted to
comply with local and regional standards. The Group builds
on this installed lock base to develop tomorrow’s solutions,
in which electronic codes supplement or replace mechani-
cal identification.

People are assigned access rights to doors or computers.

Keys, cards and other ID credentials are assigned codes,

Vinst per aktie efter skatt och utspädning

Investments in Research and Development¹

SEK

1,000

800

600

400

200

08 09

¹ Figures for 2008 and 2009 are
affected by reclassification. For
more information see note 34.

which are managed securely and distributed encrypted.
As a result of acquisitions in recent years in new technolo-
gies and the development of skills and expertise in the
Group, ASSA ABLOY is well equipped to meet tomorrow’s
challenges.

Security and convenience
Security depends on far more than identification alone. The
mechanical and electromechanical products that prevent
intrusion and permit rapid evacuation are just as important
to the final solution. A well-specified security solution also
takes into account the design of the products and ensures
that they simplify use. The Group’s electro mechanical
products help to meet all these security requirements. The
electromechanical segment is growing rapidly and now
accounts for more than one-third of Group sales.

ASSA ABLOY’s Hi-O communication platform allows the

interconnection of electromechanical products and the
connection of the whole door environment to the Internet.
This enables the security supervisor to check the status of
the door online, enhancing security and facilitating mainte-
nance. In 2009 the Group continued to install Hi-O systems
and integrate them with many of the market’s leading secu-
rity systems. The software is under constant development to
facilitate integration and also allow remote programming,
diagnostics and troubleshooting. During the year the Group
took part in PSIA, a forum for the development of a common
standard for the integration of various security systems.

RFID enhances security and is user-friendly
Radio-frequency identification (RFID) and wireless commu-
nication allow the Group to create new security applications
while offering services that are user-friendly.

During the year ASSA ABLOY launched Aperio, a wireless
technology that allows cost-effective connection of several
doors to an existing access control system. Battery-operated
electromechanical cylinders and locks communicate wire-
lessly with the existing network, avoiding expensive instal-
lation costs, new keycards and new access systems. Aperio
received several prizes for innovation during the year.

In contrast to Aperio, Smartair is an off-line system.
Smart air’s update-on-card facility increases security and
convenience through validation; access is updated on the
keycard for a specific period. If the card is not updated in one
of the special readers or printers that come with the system,
the person is not granted access. Lost cards can easily be
blocked and are of no use to unauthorized people.

PROducT LEAdERSHIP

ASSA ABLOY AnnuAL repOrt 2009

» Successful product development is the single most

important source of organic growth «

RFID technology is also the basis for the rapid expansion of
logical access control, in which computers are provided with
ASSA ABLOY’s software that prevents start-up if the user fails
to present the right access card.

Hotel guests avoid waiting in line
For hotels, VingCard has used RFID and the wireless technology
offered by mobile telephony in combination with Near Field
Communication (NFC). Hotel guests can use their cell phones
to book and pay online. The cell phone serves as a code carrier,
and guests can also use their cell phones to unlock the door of
their hotel room by holding the phone close to the lock. This
innovative application won several awards in 2009.

Using wireless technology from ASSA ABLOY, many hotels

have connected their rooms online, providing guests with
enhanced security and comfort, such as arranging room
changes without visiting the lobby. The Group is carefully fol-
lowing developments in this area through its participation in
the NFC Forum and other wireless technology organizations.

Total door opening solutions are ASSA ABLOY’s strength
ASSA ABLOY’s business is not based solely on innovations;
the Group’s strength is the variety of traditional and new
products that can be combined to create a large number of
different door environments. ASSA ABLOY has products for
different climates, different types of buildings and differing
security and safety requirements. By combining hundreds of
thousands of components to meet the needs of consumers,
architects and installers, the Group creates products with
the right quality, design and price, which are ideal for both
new buildings and renovations.

The changing product mix

During the year a number of products were launched with
the aim of reducing energy consumption in buildings. By
using doors with improved insulation together with new
sealing products, loss of heat to a cooler environment can
be reduced, while in hot climates air-conditioning costs can
be cut. In addition, the use of recycled materials in doors is
increasingly possible and desirable.

A common process with increased customer focus
and better product planning
ASSA ABLOY is building a Group-wide product develop-
ment process, aimed at halving product development time
while increasing the number of new products. A clear Gate-
way process with common terminology and interdisciplin-
ary collaboration speeds up and improves the quality of the
product development process.

In 2008 the Group introduced ‘Voice of the Customer’,
a strategy to strengthen customer relationships and inte-
grate customers into the product innovation process, which
together with the new product innovation process increases
the fitness for purpose of the Group’s product offerings. The
Group also focused on improving the product innovation
process by providing in-house training for over one hundred
people to spread this process across the organization.

In 2009 more than 1,500 employees received training
in the innovation process, and a number of in-depth stud-
ies together with customers have resulted in many new
concepts and products under development. Work on Value
Analysis / Value Engineering of the existing product range
intensified, and the number of implemented cost savings
increased by 60 percent compared with the previous year.
A total of 50 projects to increase the skills of hundreds of
employees were implemented during the year.

2000
SEK 14 billion

2009
SEK 35 billion

Mechanical products, 66 %
Electronic products, 20 %
Security doors, 14 %

Mechanical products, 45 %
Electronic products, 35 %
Security doors, 20 %

ASSA ABLOY AnnuAL repOrt 2009

PROducT LEAdERSHIP 21

product leadership

Checking-in with your cell phone

Self-powered door closer

Increased demand for convenient security

Signature rFID from Vingcard is the
latest contactless electronic lock
product for hotels. the technology
enables hotel guests to check-in with
an nFc-compatible cell phone, using
the phone to open their hotel-room
door and other doors in the hotel. no
keycards are needed. Guests receive
their reservation confirmation, room
number and an encrypted room key by
text message (SMS) before they arrive.
they avoid check-in lines at the front
desk and can go straight to their room,
where they just open the door using
their nFc-compatible cell phone as a
room key. they can also pay and check-
out online.

trinity door closer from norton Door
control can adjust the doors closing
ability after the desired needs. With
intelligent self-adjusting technology
and no need for batteries or electric-
ity to power control electronics, the
trinity system is gaining attention from
customers seeking a green solution
as well as one that requires almost
no routine maintenance checks. Any
movement of the door of 10 per cent
or more is enough to generate a suf-
ficient amount of power for a com-
plete closing cycle. even if the door is
untouched for months and powers
down fully, a single attempt to open it
will immediately bring it to life.

the demand for intelligent products that communi-
cate with a building’s security systems is growing. One
example is Aperio, which was developed to upgrade
doors that lock with keys to ones that are wirelessly
connected to an existing electronic access control sys-
tem. Another trend is the increasing demand for easily
accessible security, especially in private homes; con-
sumers want door solutions that are both secure and
convenient. One example is the new code Handle elec-
tromechanical lock, which opens the lock with a digital
code instead of a traditional mechanical key. code Han-
dle was launched in 2009 and is already a bestseller on
the do-it-yourself market.

High-capacity 3-wing revolving door

Secure instant issuance of cards

ASSA ABLOY Entrance Systems’ newest revolv-
ing door was launched in the fall of 2009. the
Besam rD3L is designed to meet european market
demands for automatic revolving door entrances
that can handle high traffic volumes efficiently
and conveniently. the rD3L creates an impressive
entrance that is ‘always open’ because of its 3-wing
configuration. Its compartments can accommodate
large numbers of pedestrians with or without shop-
ping trolleys. the rD3L also features state-of-the-art
safety sensors and monitoring capabilities, as well as
a unique drive mechanism that contributes to lower
maintenance costs for the customer. revolving
doors save energy for heating or cooling regardless
of where they are installed as they allow eight times
less air exchange than a swing door.

With HId Global’s innovative Fargo HdPii
card printer and encoder, banks and retail-
ers can instantly issue high quality person-
alized credit, debit, prepaid, and gift cards.
The HdPii provides a practical and affordable
way to instantly deliver activated cards to
customers, significantly reducing the time to
the first transaction use and ensuring activa-
tion at the time of issuance. the technology
is more convenient for customers, who no
longer have to wait for their credit and the
risk of loss or theft during the mailing pro-
cess is eliminated. the printing technology
gives increased durability and fraud protec-
tion. Special features such as lockable secu-
rity and encryption make the HdPii compli-
ant with Financial card Association security
requirements.

Increased demand for
digital residential locks

Digital locks that combine con-
venience and design with high
security are a new way for people
to secure their homes. there is
growing interest worldwide in
intelligent, convenient solutions
that use digital keys, a card, a pin
code or a fingerprint to lock and
unlock doors. the ASSA ABLOY
Group company irevo developed
the market for digital locks in korea
and is the market leader. Almost
half of all homes in Seoul have
digital biometric locks. In the fall of
2009 digital code-locks from ASSA
ABLOY were launched on the uS
market.

product leadership

A total security solution from ASSA ABLOY includes many different types of
products. there may be automatic doors and access control at the main
entrance, access systems on each office floor, and security doors, high-security
cylinders, mechanical cylinders, handles, hinges and internal doors in the offices.
Access cards may also be used to log on to computers and network and to make
secure electronic payments. these are examples of ASSA ABLOY products that
together create a total security solution.

Magnetic lock

Electronic strike

Access control

Handles

Electromechanical
cylinders

Automatic
door closer

Electronic
lock-case

Exit device

Electronic hardware

ASSA ABLOY’s Hi-O communication platform allows the
intelligent door to be connected to a network over which
each individual component around the door can commu-
nicate interactively with other systems, such as security or
maintenance systems. The advantages are secure informa-
tion about each component, simple installation using stan-
dardized connections, and remote configuration over the
network, which can also be connected to the Internet. In the
end of 2009 the ASSA ABLOY Group has 67 Hi-O certified
products.

PROducT LEAdERSHIP

ASSA ABLOY AnnuAL repOrt 2009

Access control

Access to computers

via access cards

Payment with

access card

Access control

Turnstile

Printer for secure

issuance of access cards

Revolving door

ASSA ABLOY AnnuAL repOrt 2009

PROducT LEAdERSHIP 25

Cost-
efficiency

Cost-

efficiency

efforts to increase cost-efficiency
continue in all areas and include both
common product platforms with fewer
components and common product
development.

cost-efficiency
the share of purchases from low-cost countries
has doubled

Efforts to increase cost-efficiency continue in the production structure, in product costs and in the
administrative flow in the Group. All areas are affected, including common product platforms with
fewer components, and common product development. In production, flexible final assembly close
to the customer is combined with the transfer of high-volume standard production to internal and
external production units in low-cost countries.

Cost-efficiency
ASSA ABLOY focuses on cost-efficiency in the production
structure, in product costs and in the administrative flow
in the Group. In product development, the Group works on
common product platforms with fewer components and on
common product development, as discussed in the section
‘Product leadership’.

The production value-chain is constantly under review
and the capacity for flexible final assembly close to the cus-
tomer is combined with the transfer of high-volume stan-
dard production to internal and external production units in
low-cost countries.

percent of the Group’s total employees are now employed
in low-cost countries.

Lean methods
Work to implement Lean methods in the Group’s operations
continues. Lean methods lead to more efficient production
flows, better control of material costs, improved decision-
making procedures, shorter development times and incre-
ased cooperation with the marketing and sales teams.

Many of the companies in the Group have followed these

principles for several years and have achieved enhanced
efficiency.

Successful restructuring programs
The process of change in the production structure began
with the restructuring programs launched in 2006 and
2008. These have been very successful, resulting in large
savings and increased efficiency in the Group’s production
units. At year-end these programs had resulted in the clo-
sure of 36 production units, while an additional large num-
ber of units had switched to mainly final assembly. As a result
of this restructuring 4,631 employees have left the Group.
Another four units are set to close in 2010 as these programs
are completed. One consequence is that an increasing vol-
ume of standard production has been transferred to inter-
nal and external units in low-cost countries. The production
process has been improved, while local presence on end-
customer markets ensures fast delivery and efficient assem-
bly of customized products.

These two restructuring programs were followed by a
new program launched in Q4 2009. This program will entail
the closure of 11 production units and the conversion of
four units to final assembly. In addition, 11 primarily admin-
istrative units will close. The total cost is SEK 930 M and the
program will result in a reduction of 1,200 employees in
high-cost countries.

In parallel with the reorganization of production in high-

Vinst per aktie efter skatt och utspädning

cost countries, the Group has maintained rapid expansion
of the production base in low-cost countries. More than 40

Seamless Flows in administration
Automation of flows throughout the business is the most
important activity in driving administrative efficiency.
Manual work is to be reduced or completely eliminated in
all processes. On the customer side, this means electronic
order handling for both large and small customers. On the
supplier side, electronic handling of purchasing will be intro-
duced. Manufacture, product development, logistics and
other internal processes will be included. The generic name
for such activities is Seamless Flows. As Seamless Flows and
the coordination of IT tools are brought in, it will also be pos-
sible to coordinate support functions effectively.

Efficient sourcing
In purchasing, a comprehensive supply management proj-
ect covering both raw materials and components has been
initiated. This will be increasingly important as areas of com-
ponent supply are outsourced to external suppliers in low-
cost countries and will result in better exploitation of econ-
omies of scale in the Group. The share of the Group’s total
purchases of raw materials, components and finished goods
that comes from low-cost countries has increased from 23
percent to 41 percent over the past five years. The divisions
have appointed specialized purchasing managers for each
component category. As a result the number of suppliers has
fallen by 6 percent.

Vinst per aktie efter skatt och utspädning

Change in production structure

Share of production in low-cost countries

100

08 09

High-cost countries,
Full production
High-cost countries,
Assembly
Low-cost countries,
production
Acquired production
units

08 09

cOSt-eFFIcIencY

ASSA ABLOY AnnuAL repOrt 2009

First-class hotel security

VingCard just right for Hilton Family hotel – Guests at the
first-class doubletree dallas/Richardson Hotel in Texas now
benefit from higher levels of comfort and security, thanks to
a major overhaul of the hotel completed in July 2009. As part
of the total renovation of the 300-room property, a member
of the Hilton Family of Hotels, Vingcard installed its wireless
VisiOnline rF-online system together with its Signature rFID
contactless radio-frequency identification electronic locks
throughout the premises.

the rF-online-based system means that room doors can
be remotely monitored from the hotel’s front desk. In addi-
tion to dramatically improved security for hotel guests, the
system also enhances staff efficiency by providing SMS and
e-mail maintenance alerts with significant improvement to
the hotel´s bottom line
As part of the upgrade, the doubletree Hotel also chose
Signature rFID contactless electronic door locks by Ving-
card which, allow more security and intuitive ease of use
for guests. A further benefit of this system is its compatibi-
lity with nFc cell phones, which makes the system ready to
implement a solution for guests to skip the check-in line and
simply use their nFc phones to unlock the guestroom door.

One good turn deserves another

When IkeA chose the Besam rD3L high-capacity revolving
door for the entrances to its anchor store in the new port
Łódź Shopping center in poland, contractors working on
other parts of the 120,000-square-meter retail and indoor
recreational facility took note.

IKEA’s two primary demands were easy access and safety

during high-volume use, and the rD3L delivers both with
style. Besam’s newest revolving door range is designed with
large, comfortable compartments that can safely and easily
accommodate continuous pedestrian traffic flow and shop-
ping carts. IkeA port Łódź opened in november 2009, with
the remainder of the shopping center set to welcome visi-
tors in the spring of 2010.

The Rd3L’s state-of-the-art electronics and safety sensors,
combined with Besam Poland’s ability to deliver on time and
provide world-class service and maintenance after installa-
tion, resulted in the door being chosen for a total of eight of
the new shopping center’s entrances.

In addition to the revolving doors, Besam poland
supplied uniSlide Frame sliding-door systems and door
closers for various locations in the center. Further more, the
relationships built on the construction site created oppor-
tunities for ASSA ABLOY poland to win contracts for a variety
of door hardware, including Yale panic bars and locks.

ASSA ABLOY AnnuAL repOrt 2009

cOSt-eFFIcIencY 29

Growth and
profitability

ASSA ABLOY creates opportunities for
increased growth and profitability through
a strong focus on the strategy’s three areas
of market presence, product leadership and
cost-efficiency.

Growth and profitability
Successful expansion for 15 years

today ASSA ABLOY is the global leader in intelligent door solutions and celebrates 15 years of successful
expansion. Since its formation in 1994, the Group has expanded successfully through a combination of
organic growth and acquisitions, transforming the company from a traditional lock company into a
modern, multinational security company in intelligent door solutions. today ASSA ABLOY is the global
market leader in this sector.

3 – 35Growth from 3 to SEK 35 billion

in 15 years.

From regional lock company to
international security group
Since ASSA ABLOY’s formation, Group sales have risen from
SEK 3 billion to SEK 35 billion. Today the Group has around
29,000 employees, compared with 4,700 employees in
1994. Operating income, excluding items affecting compa-
rability, has increased from SEK 212 M in 1994 to SEK 5,413
M in 2009, an increase of 2,453 percent.

ASSA ABLOY was founded when Securitas in Sweden and
Metra in Finland merged their lock businesses. The company
had operations in Sweden, Finland, Norway, Denmark and
Germany at that time.

Today the Group has its own operations in 50 countries
and sales throughout the world. ASSA ABLOY is focusing on
enhancing its presence on emerging markets in Asia, East-
ern Europe, the Middle East, Africa and South America. Sales
on these markets will account for nearly 20 percent of total
Group sales, and following the announced acquisition of
Pan Pan, China is expected to account for nearly 10 percent
of sales.

One in ten lock purchasers in the world today chooses

an ASSA ABLOY lock, and the Group continues to grow.
Demand for safety and security is constantly increasing in

the world and the Group has never had a wider product
range, higher market penetration and so many innovative
new products.

At the start in 1994, the product range largely con-
sisted of mechanical security products such as traditional
locks and handles for entrance doors. In 2009, ASSA ABLOY
launched more products than ever before in the Group’s
history, particularly in the fast-growing product segments
of electromechanical and electronic locks, access control,
identification technology and automatic doors.

New technology areas and innovative products are the
most important sources of organic growth and the Group
therefore invests heavily in R&D. Investments in product
development have increased by between 10 and 20 percent
per year in recent years and today the Group employs nearly
1,000 development engineers.

The ASSA ABLOY Group has come a long way in 15 years.
However, the goals and expectations for the Group’s future
development are high. The demand for secure and safe
security solutions is constantly increasing and will offer the
Group major opportunities.

Rörelseresultat* (EBIT) MSEK

Sales and Operating Income (EBIT)

Sales, SEK M

 Sales Operating Income (EBIT)

EBIT, SEK M

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

963

GROWTH And PROFITABILITY

8000

7000

6000

5000

4000

3000

2000

1000

973

983

993

003

013

023

033

062

081,2

091,2

Sales have risen by more
than 2,400 percent in
15 years.

¹ Figures affected by reclassification.
For more information see note 34.
² excluding items affecting comparability.
³ 1996–2003 have not been adjusted
for IFrS.

ASSA ABLOY AnnuAL repOrt 2009

Market
presence

exploiting the strength of the
brand portfolio.

Increasing growth in the
core business.

expanding into new markets
and segments.

ASSA ABLOY’s first 15 years

1994
the ASSA ABLOY Group is
founded in 1994 through the
merger of ASSA (Sweden)
and Abloy (Finland). the
new company is listed on the
Stockholm Stock exchange on
8 november 1994. Abloy brings
the IkOn, ABLOY, trioVing,
Vingcard and cardkey brands
and ASSA the Arrow, ruko,
SOLID and FAS brands.

Strategy

product
leadership

Developing products offering
enhanced customer value and
lower product costs.

common product platforms
with fewer components.

close collaboration with
ASSA ABLOY’s end-users and
distributors.

targets

Growth and
profitability

10 percent annual growth
through a combination of
organic and acquired growth.

An operating margin of 16–17
percent.

the financial targets are long-
term and should be regarded
as an average over a business
cycle.

cost-
efficiency

common product platforms
and fewer components result
in cost-efficiency.

In production, flexible final
assembly near the customer is
combined with the transfer of
high-volume standard produc-
tion to low-cost countries.

Seamless Flows streamline
administration.

Implementation of Lean
methods continues.

1996 – Acquisitions lead the way
the Group expands its product
portfolio through the acquisition
of the American company eSSeX,
with its Sargent, Mckinney,
curries and Graham brands. Other
acquisitions: nt Møller undall,
Låsgruppen and Grorud (norway),
Secureware (Singapore) and
Ambouw (netherlands).

1997 – Expansion in France
the French lock group Vachette is
acquired, with its units Vachette,
JpM, Laperche and Bezault
(France) and Litto (Belgium).
Other acquisitions: elsafe
(norway), FAB (czech republic)
and Abloy Security (Singapore).

1998 – Expansion in the USA
ASSA ABLOY expands in north
America with the acquisition
of Medeco. the Group opens
an office in china. Other
acquisitions: urBIS (romania),
Wilhelm Dörrenhaus (Germany),
ASSA-Solid (poland), Scovill
(Mexico), Securitron Magnalock
and new england Lock &
Hardware (uSA), Abloy canada
(canada) and precise Security
Supplies (Hong Kong).

1999 – Higher security
the Group acquires the lock
manufacturer Mul-t-Lock
(Israel). the acquisition of the
German company effeff gives
ASSA ABLOY a good position
on the electromechanical lock
market. Other acquisitions:
Lockwood (Australia), Stremler
(France), AZBe (Spain), Björkboda
lås (Finland), timelox and AkI
Låsgrossisten (Sweden), Fichet
(France), Arrow Lock (canada)
and Sloth & co (Denmark).

2000 – Twice the size
ASSA ABLOY acquires Yale Intruder
Security and becomes the world’s
leading lock group almost
overnight. The acquisition of HId
corporation in the uSA expands
the Group’s product offering with
electronic identification products.
the cLIQ technology is launched.
Other acquisitions: ASSA ABLOY
Hungary (Hungary), c.E.M.
and nuova Feb (Italy).

2001 – Global integration
ASSA ABLOY takes part in the Volvo
Ocean race to help integrate
over 100 companies worldwide.
Joint venture with uDp brings in
the companies ceco, Dominion,
Fleming and trussbilt (uSA).
Other acquisitions: phillips
(Mexico), rIS (czech republic),
MAB (Italy), Viro (South Africa),
Interlock (new Zealand), Indala
(uSA) and teSA (Spain).

2002 – New opportunities
in door automation
the Group acquires the Swedish
company Besam, with its
door automation products.
ASSA ABLOY finishes in second
place in the Volvo Ocean race.
Other acquisitions: cOSAS
electronica and uBA Almadis
(Argentina), radicovic (Slovenia),
union Locks (kenya), poli
(chile), VeMA (netherlands)
and InItIAL, since renamed
Abloy France (France).

2003 – Stronger
position in Europe
the acquisitions of nemef
(netherlands) and corbin
(Italy) strengthen the Group’s
position on these markets.
Other acquisitions: Interlock and
Sokymat (Switzerland), Metget
(Sweden) and AcG’s identification
technology business.

2004 – Hi-O launched
The launch of Hi-O technology
introduces a new concept
for electronic door solutions,
in which connected units
exchange encrypted information,
simplifying both installation
and service. Other acquisitions:
Security Merchants Group
(Australia and new Zealand),
joint venture with Brighthandle
(Sweden), and BeSt Metaline
(South korea). Divestment
of Folger Adam Security
and trussbilt Detention.

2005 – Increased
presence in China
ASSA ABLOY enters a joint
venture with the chinese
company Wangli, a leading
supplier of high-security locks
and doors. Other acquisitions:
Doorman Services (uk) and
Security World (South Africa).

2006 – Secure ID cards
ASSA ABLOY acquires Fargo
electronics, which develops
systems for secure issuance
of credit, bank, debit and ID
cards. Other acquisitions:
Adams rite (uSA) and Baron
Metal Industries (canada).

2007 – Expansion in Asia
A new brand strategy is launched,
with ASSA ABLOY as the master
brand. the Group acquires
irevo in South korea, a major
player in digital door locks.
Other acquisitions: Aontec
(Irish republic), Baodean
(china), powershield (uk),
pyropanel (Australia), pemko
Manufacturing company and
La Force Associates (uSA), Alba
(Israel), esety (Italy), Integrated
engineering (netherlands)
and portronik (canada).

2008 – Wireless
technology launched
the new Aperio wireless
technology is launched. this
technology makes it easy for
customers to upgrade their
access control systems. Other
acquisitions: Beijing tianming
and Shenfei (china), Gardesa
and Valli&Valli (Italy), copiax
(Sweden), cheil (South korea)
and rockwood (uSA).

2009 – Strong results
despite weak market
Agreement to acquire pan pan,
china’s largest manufacturer
of high-security steel doors.
Other acquisitions: Ditec
Group (Italy), portsystem 2000
(Sweden), Maiman (uSA)
and cerracol (colombia).

In addition to the acquisitions
listed here, ASSA ABLOY has
acquired some 50 smaller
companies over the years.

ASSA ABLOY AnnuAL repOrt 2009

GROWTH And PROFITABILITY 33

emeA
Aggressive marketing efforts

emeA continued its aggressive marketing efforts to develop and lead the european lock market. the divi-
sion made substantial investments in innovative new products, and several pan-european product plat-
forms were launched in 2009, which will continue in 2010. the european lock market was weak during
the year due to the financial crisis and considerable inventory reductions by distributors. efficiency pro-
grams and capacity adjustments offset the major part of the earnings impact of the market downturn.

EMEA in brief
The EMEA division manufactures and sells mechanical,
electromechanical and electronic locks, cylinders, security
doors and accessories in Europe, the Middle East and Africa.
EMEA consists of a number of companies which have good
knowledge of their local, often highly diversified, markets
and which sell products under some of the most respected
brands in the industry, such as ABLOY, ASSA, IKON, TESA,
Yale, Mul -T- Lock and Vachette.

Report on the year
The division’s sales during the year totaled SEK 13,601 M
(13,927), which was a reduction of 2 percent. Operating
income (EBIT) excluding restructuring and non-recurring
costs fell by 10 percent to SEK 2,056 M (2,289), which repre-
sents an operating margin of 15.1 percent (16.4).

Market presence
EMEA is working actively to increase the division’s market
presence through development of the specification and
project market, expansion into new markets and segments,
and growth through acquisitions. The sales force on the
local markets is being united under the ASSA ABLOY master
brand.

Specification of total door opening solutions is increas-
ingly important for sales, and the number of specification
sales representatives has therefore been increased substan-
tially in EMEA and the close collaboration with architects
and security consultants further strengthened. Efforts to fur-
ther strengthen the sales organization in the highly diversi-
fied European market continue through an increased focus
on specification sales representatives and the structuring of
the sales organization into different market segments.

The financial crisis led to a downturn on the housing mar-

Many sales organizations in EMEA have been coordinated

ket and the commercial construction market. This applied
particularly to regions such as Spain, Italy and Eastern
Europe and to some extent France. The German and Scandi-
navian markets showed a stable trend, albeit at a relatively
low sales level. The negative impact on operating income
of lower sales was largely offset by savings resulting from
efficiency programs in production and the division’s other
efforts to increase efficiency.

Local differences between markets
EMEA’s companies operate in a highly diversified market
with significant local differences. Building regulations, secu-
rity standards and climates vary greatly between the coun-
tries of northern Europe and southern Europe, and to some
extent the Middle East and Africa. Consequently there are
great differences between the products in demand and
sold on each local market. ASSA ABLOY’s regional compa-
nies have good local knowledge of lock standards and long-
term relationships with their distributors, making demand
stable. In addition, the aftermarket contributes a significant
proportion of sales, since the installed lock base consists
of many millions of units that are continually replaced and
upgraded.

under the ASSA ABLOY master brand to better meet the
increased demand for more complete security solutions.
The united sales organization has resulted in a joint image
to the customer and a considerably wider product portfolio
based on the Group’s total offering.

Product leadership
Effective product development with a strong customer
focus is the strongest driver of organic growth. The use of
Group-wide product platforms with fewer components is
constantly increasing, contributing to enhanced customer
value and lower costs. Substantially increased investment
in product development in recent years has resulted in the
launch of many new electromechanical and electronic prod-
ucts that are both secure and easy to use. These include cyl-
inders and lock cases with Aperio technology, and the Code
Handle electronic lock. The Group’s new product-develop-
ment process focuses on increased customer value while
improving cost-efficiency and maintaining higher quality.
The products have been well received by customers and
have consolidated ASSA ABLOY’s market-leading position in
total security solutions.

34 emeA DiviSiOn

ASSA ABLOY AnnuAL repOrt 2009

Key figures

SEK M

2008

2009

13,927
3
2,289
16.4

Income statement
Sales²
total growth, %
Operating income (eBit)¹
Operating margin (eBit)¹, %
Capital employed
Capital employed
– of which goodwill
return on capital employed¹, %
Cash flow
Cash flow
Average number of employees
¹ excluding items affecting comparability.
² reclassification has been made for 2008 and 2009. For more information see note 34.
Omsättning och rörelseresultat

12,306
5,766
19.9

2,421
11,903

13,601
–2
2,056
15.1

9,814
5,540
16.9

2,850
10,138

Sales and Operating income¹

SEK M

14,000

12,000

10,000

 Sales2

Operating income

SEK M

2,800

2,400

2,000

8,000

¹ excluding items affecting compa-
rability 2006, 2008 and 2009.
² reclassification has been made
1 Exklusive omstrukturering
for 2008 and 2009. For more
2006 och jämförelsestörande
information see note 34.
poster 2008.
6,000
Sysselsatt kapital/avkastning på sysselsatt kapital

1,200

1,600

08 09

Capital employed and Return on capital employed¹

SEK M

12,000

10,000

8,000

6,000

4,000

08 09

 Capital employed
Return on capital
employed

1 Exklusive omstrukturering
¹ excluding items affecting compa-
2006 och jämförelsestörande
rability 2006, 2008 and 2009.
poster 2008.

Sales by product group

mechanical locks,
lock systems and
accessories, 66 %
electromechanical and
electronic locks, 19 %
Security doors and
fittings, 15 %

Säkerhetsdörrar och beslag

Elekromekaniska och elektroniska

Mekaniska lås, låssystem och tillbehör

Cost-efficiency
The Group’s efficiency programs intensified in 2009. The aim
of these programs is to improve production efficiency and
relocate component production to low-cost countries. In
2009 the Group continued to outsource the production of
components and basic products, mainly to preferred suppli-
ers in low-cost countries. The production of some important
components is now concentrated in specialized EMEA pro-
duction plants, such as cylinders in the Czech Republic and
lock cases in Romania. In order to maintain high standards
of service and proximity to customers, Western European
production facilities will focus on final assembly and product
customization.

An important initiative in EMEA is the coordination of
purchases for the different production units by specialized
purchasing managers for each component category. This
has led to an increased percentage of purchases in low-cost
countries and better exploitation of economies of scale in
the division.

Administrative services such as wage administration
and accounts are being coordinated on a regional basis to
improve efficiency. Joint administration has already been
successfully implemented in Germany and all regions will be
similarly organized in the coming years.

» EMEA continued its aggressive

marketing efforts to develop and
lead the European lock market «

Market segments

non-residential, 55 %
residential, 45 %

Bostadsmarknaden

Institutionella marknaden

ASSA ABLOY AnnuAL repOrt 2009

emeA DiviSiOn

Americas
market presence and innovation

Americas continued its focus during the year on the non-residential market through increased efforts by
its own specification consultants. many new electromechanical products and environmentally sensitive
solutions were launched. However, the financial crisis had a significant negative impact on both the resi-
dential and the non-residential segment of the uS construction market, which led to a substantial mar-
ket downturn. in order to meet these challenges, Americas increased its focus on Lean methods
and rationalized its production capacity. these measures enabled the division to maintain a very good
operating income and cash flow.

Americas in brief
The Americas division manufactures and sells mechanical
and electromechanical locks, cylinders and security doors
on the American continents. The majority of the division’s
sales are in North America where ASSA ABLOY has an exten-
sive sales organization and sells its products through distrib-
utors. Sales in South America and Mexico take place through
distributors, wholesalers and DIY stores. The Americas divi-
sion operates in both the non-residential and the residen-
tial segment. The non-residential segment accounts for the
clear majority of the division’s sales. Some of the division’s
leading brands are Ceco, Corbin Russwin, Curries, Emtek,
Medeco, Phillips, SARGENT and La Fonte.

Report on the year
The division’s sales during the year totaled SEK 9,880 M
(10,456), which was a reduction of 6 percent. Operating
income (EBIT) excluding restructuring costs fell by 8 percent
to SEK 1,925 M (2,101), which represents an operating mar-
gin of 19.5 percent (20.1).

Different products for different market segments
In the North American market there is a clear distinction
between products intended for the residential segment
and products for the non-residential segment. As a result,
very few of the division’s products are suitable for both seg-
ments, and the distribution channels are also totally distinct.
Security doors, door frames and locks are major compo-
nents of the solutions offered to non-residential customers.

Impact of market downturn in the
non-residential segment
The non-residential segment accounts for a large percent-
age of the division’s sales in the USA and Canada. Institu-
tional customers predominate in this segment. The market
downturn in the non-residential segment had a negative
impact on the division’s sales, but despite lower volumes
the division succeeded in maintaining very good margins
thanks to active marketing efforts and efficient production.
The Americas division works vigorously to generate demand
in many non-residential sectors, including public buildings,
hospitals, school and college campuses, airports, transport
terminals, sports and shopping centers, manufacturing
plants and commercial offices.

Since security and safety standards for these environ-
ments are often highly complex, they require more lock
and door functionality than typical residential applications.

Fire and life-safety building codes call for ever-rising levels
of product functionality, complexity and durability. It is
increasingly essential that security solutions should consider
the door environment as a whole. A complete security solu-
tion from ASSA ABLOY is often a combination of doors, door
frames, locks, door moldings, door closers or exit devices,
access-control products and high-security key systems.

A challenging year for the residential segment
The residential segment, which constitutes only a minor part
of the division’s sales, continued on a negative trend due to
the prolonged and severe downturn in the US housing mar-
ket. Substantial efforts to cut costs, combined with aggres-
sive new product launches, made positive contributions to
managing the weak market conditions.

Latin America
The Latin American markets performed well during the year,
especially Brazil. The increasing standard of living in these
emerging economies has increased the need for higher
security levels. Each country requires unique security solu-
tions to meet local standards.

Market presence
The Americas division continues to focus on specifying secu-
rity solutions and increasing its knowledge of end-users’
needs. New marketing tools such as a Mobile Innovation
Showroom allow customers to view and learn about the
latest door opening solutions at convenient local venues.
The division also works closely with architects and
security consultants early in the construction process.
ASSA ABLOY’s specification consultants share their expertise
to ensure that security solutions are code-compliant and
meet the functional and security needs of the end-user. Such
activities strengthen relations with architects and increase
the likelihood of orders when the project is procured.

Focusing on market development in new construction

and retrofit projects in the non-residential segment has
enabled the division to influence current and future building
projects.

Product leadership
Integration of electronics into traditional mechanical door
and security products is a high priority for Americas division.
Product development continues to focus on aesthetic prod-
uct design and specific end-user solutions.

36 AmeriCAS DiviSiOn

ASSA ABLOY AnnuAL repOrt 2009

Key figures

SEK M

2008

2009

10,456
2
2,101
20.1

9,639
6,236
24.5

2,097
8,573

9,880
–6
1,925
19.5

8,687
6,003
20.5

2,677
6,897

Sales and Operating income¹

SEK M

12,000

10,000

8,000

 Sales2

Operating income1

SEK M

2,400

2,000

1,600

6,000

¹ excluding items affecting compa-
rability 2006, 2008 and 2009.
² reclassification has been made
1 Exklusive omstrukturering
for 2008 and 2009. For more
2006 och jämförelsestörande
information see note 34.
poster 2008.
4,000
Sysselsatt kapital/avkastning på sysselsatt kapital

08 09

1,200

800

Capital employed and Return on capital employed¹

 Capital employed
Return on capital
employed

1 Exklusive omstrukturering
¹ excluding items affecting compa-
2006 och jämförelsestörande
rability 2006, 2008 and 2009.
poster 2008.

SEK M

10,000

8,000

6,000

4,000

08 09

Sales by product group

mechanical locks,
lock systems and
accessories, 51 %
electromechanical and
electronic locks, 9 %
Security doors and
fittings, 40 %

Säkerhetsdörrar och beslag

Elekromekaniska och elektroniska

Mekaniska lås, låssystem och tillbehör

In 2009 the division launched aesthetic and environmen-
tally sensitive access control solutions, including stand-
alone access control solutions using innovative technolo-
gies from other ASSA ABLOY companies. Some of these door
and hardware solutions were winners of the prestigious
GOOD DESIGN® Awards, providing international recogni-
tion for new, advanced, visionary and innovative products
with imaginative, original and groundbreaking design.

Cost-efficiency
The Americas division strives for operational excellence to
further improve performance in a number of areas. Some
of the areas targeted are Shared Services, production effi-
ciency, Lean methods and coordinated purchasing for the
production units.

Lean activities in both manufacturing and administration

are an important part of Americas’ operations and culture
and drive continuous improvement across the entire divi-
sion. Outsourcing of some components and improved auto-
mation processes complement the division’s cost-efficiency
strategy.

Lean methods lead to more efficient production flows,
better control of material costs, improved decision-making
procedures, shorter time-to-market and closer cooperation
with marketing and sales teams. They have contributed to
an increased operating margin in 2009. Work on developing
Lean methods will continue in 2010.

Americas division continues to coordinate administra-
tive services among its companies. In addition to financial
services and human resources, legal and IT services have
been consolidated across most companies in the division,
leading to increased efficiency and quality.

» Increased focus on Lean activities, market presence

and innovation in tough market conditions «

Market segments

non-residential, 90 %
residential, 10 %

Bostadsmarknaden

Institutionella marknaden

ASSA ABLOY AnnuAL repOrt 2009

AmeriCAS DiviSiOn

Asia pacific
Strengthens the leading position in Asia

ASSA ABLOY has a leading position on the Chinese market and is continuing to grow through the
announced acquisition of pan pan. As a result of organic growth and strategic acquisitions, the Group
offers a complete range of door opening solutions on the Asian markets. in the first part of the year, the
markets were negatively impacted by the downturn in the housing market and the commercial con-
struction market. Later in the year, growth in Asia accelerated again and Asia pacific strengthened its
market-leading position.

Asia Pacific in brief
The Asia Pacific division manufactures and sells mechanical
and electromechanical locks, high-security doors and fittings.
The division is divided into five geographical sub-regions –
North Asia, China, South Asia, Australia and New Zealand –
plus a common group for high-security doors. Australia and
New Zealand account for around half of the division’s sales,
while China and the rest of Asia account for the other half.
In Asia the division’s major brands are Yale, Guli, Wangli and
Baodean. The markets in Australia and New Zealand are more
mature, with established lock standards and strong brands
such as Lockwood and Interlock. The production units in China
supply significant volumes to ASSA ABLOY’s other regions.

Report on the year
The division’s sales during the year totaled SEK 3,789 M
(3,321), which was an increase of 14 percent. Operating
income (EBIT) excluding restructuring costs rose by 29 per-
cent to SEK 459 M (357), which represents an operating
margin of 12.1 percent (10.8).

Growth in China
The Chinese lock market is growing thanks to rapid urban-
ization. Migration from the country to the cities and the
modernization of both residential and commercial build-
ings are creating increased demand for security. The mar-
ket is fragmented, with many local security companies, but
ASSA ABLOY has a leading position as the largest security-
door and lock manufacturer in China.

In China the same types of lock, handle and fittings are
often used in both homes and offices. Sales comprise both
products manufactured in the region and premium prod-
ucts imported from Europe and North America.

There are few national or regional standards govern-
ing how locks, doors and fittings should be designed and
fit together. ASSA ABLOY is working with Chinese regula-
tory authorities to develop and improve these security
standards.

In the first part of the year, the markets in Asia were nega-
tively impacted by the downturn in the housing market and
the commercial construction market. The latter part of the
year saw the return of positive organic growth in Asia, with
particularly strong growth in the Door Group.

Other Asian markets
There is still considerable growth potential in the large, frag-
mented markets in the rest of Asia. These markets are gener-
ally underdeveloped, with low security standards, and are
therefore mainly driven by the price of the lock or security
solution.

Asia Pacific is continuing its strong efforts to develop
the sales organization into focused sales teams and to con-
centrate on fewer but stronger brands, which has further
strengthened the division’s product offering.

In South Korea the Group company iRevo is the market
leader in digital door locks. This type of door lock has been
very successful on the residential market in both South
Korea and China. During the year, iRevo began to assemble
digital door locks in Shanghai to meet the high Chinese
demand in this segment.

Stable market in Australia and New Zealand
In Australia and New Zealand ASSA ABLOY is the market
leader on both the housing and the commercial market with
its established Lockwood and Interlock brands. In 2009 a
substantial downturn in the housing and the commercial
markets resulted in reduced sales. In the latter part of the
year the market began to grow again, albeit at a somewhat
lower rate than in previous years.

Market presence
Asia Pacific is working actively on a number of initiatives to
increase the division’s market presence. Some of the most
important initiatives are the development of the specifica-
tion and project market, expansion into new markets and
segments, and acquisitions.

Asia Pacific has established a Door Group comprising the

Specification of total door opening solutions is increas-

companies Wangli, Beijing Tianming and Pyropanel. These
companies are working together to develop new products,
technologies and sales channels and to reduce the costs of
adapting products to different national and security stan-
dards. The investment in the new Door Group is expected to
lead to higher growth due to the increased focus across the
region on higher security requirements for doors, including
fire safety requirements.

ingly important for sales and the number of specification
sales representatives has therefore been increased sub-
stantially in Asia Pacific and the close collaboration with
architects and security consultants further strengthened. In
order to actively counter the market downturn, the division
continued to focus on the new sales organization, which is
structured into market segments and specification develop-
ment, with account managers for major national customers.

38 ASiA pACiFiC DiviSiOn

ASSA ABLOY AnnuAL repOrt 2009

» ASSA ABLOY has a leading position

on the Chinese market «

Key figures

SEK M

2008

2009

3,321
19
357
10.8

2,768
1,628
13.2

460
7,065

3,789
14
459
12.1

2,768
1,536
16.1

610
7,560

The local sales organizations are united under the
ASSA ABLOY master brand in order to better meet the
demand for total door and security solutions. This initiative
will continue in 2010.

Acquisitions remain an important strategy for increas-

ing market presence in Asia Pacific, and during 2009 the
acquisition of Pan Pan was announced, which is China’s larg-
est manufacturer of high-security steel doors. The company
has production in six locations in China. Pan Pan manufac-
tures high-security doors, including fire, corrosion-proof,
armored and standard high-security doors. The company
has an annual capacity to produce 2.4 million doors. It has an
extensive and well-established distribution network across
China and is a good fit with ASSA ABLOY’s other door com-
panies on the Chinese market.

Today ASSA ABLOY is the largest lock company in China
and with the announced acquisition of Pan Pan the Group
has more than 12,000 employees in the local market,
making it the leader in door opening solutions, with a full
product range covering many different segments and well-
known brands. This has been achieved through a healthy
combination of acquired and organic growth.

Product leadership
Innovation and continued product development are impor-
tant factors enabling the division to maintain an attractive
product range and increase sales. Electromechanical secu-
rity products are increasingly important and there is con-
siderable growth potential for electronic cylinders in the
non-residential segment. Electromechanical security solu-
tions for the residential segment have been launched under
the iRevo brand and have attracted much attention on the
market.

Cost-efficiency
The Group’s efficiency programs intensified in 2009. The
aim of these efficiency programs is to improve production
efficiency and relocate component production to low-
cost countries, mainly China. The division has continued to
invest in production facilities in China, mainly to meet rising
demand on the local market but also to increase intra-Group
deliveries to Europe and North America.

The remaining production plants in Australia and New
Zealand now focus on customized solutions and final assem-
bly. A large proportion of the components and standard
products will be made by the division’s Chinese plants. Pro-
ductivity in these plants is constantly improving as a result of
the continued implementation of Lean methods and invest-
ments in semi-automated processes and sustainability.

Sales and Operating income¹

SEK M

3,500

3,000

2,500

2,000

1,500

1,000

500

08 09

SEK M

450

400

350

300

250

200

150

 Sales2

Operating income

Sysselsatt kapital/avkastning på sysselsatt kapital

Capital employed and Return on capital employed¹

SEK M

3,000

2,500

2,000

1,500

1,000

500

08 09

 Capital employed
Return on capital
employed

¹ excluding items affecting compa-
rability 2006, 2008 and 2009.

Sales by product group

mechanical locks,
lock systems and
accessories, 61 %
electromechanical and
electronic locks, 14 %
Security doors and
fittings, 25 %

Säkerhetsdörrar och beslag

Elekromekaniska och elektroniska

Mekaniska lås, låssystem och tillbehör

Market segments

non-residential, 60 %
residential, 40 %

Bostadsmarknaden

Institutionella marknaden

ASSA ABLOY AnnuAL repOrt 2009

ASiA pACiFiC DiviSiOn

Global technologies
enhanced product offering

Aggressive investments in new products and market segmentation had a positive impact on sales dur-
ing a year of weak market development. the global economic downturn had a negative impact on new
commercial construction, especially in north America. european sales were stable, although at lower
levels, and the Asian market returned to growth in late 2009. in order to counter the downturn on
mature markets, HiD Global and ASSA ABLOY Hospitality made major marketing efforts but also
increased Lean activities and adjustments to production capacity, making it possible to maintain good
operating income and cash flow levels.

Global Technologies in brief
Global Technologies division has a leading position as a sup-
plier of electronic security solutions worldwide. The division
consists of two business units, HID Global and ASSA ABLOY
Hospitality, with sales mainly to the non-residential seg-
ment. HID Global is a global leader in secure identity solu-
tions, primarily in identity and access management and in
contactless identification technology solutions. ASSA ABLOY
Hospitality is the market leader in electronic lock systems
and safes for hotels and cruise ships worldwide.

Report on the year
The division’s sales during the year totaled SEK 4,766 M
(4,866), which was a reduction of 2 percent. Operating
income (EBIT) excluding restructuring costs rose by 5 per-
cent to SEK 766 M (729), which represents an operating
margin of 16.1 percent (15.0).

HID Global
HID Global is the global leader in physical access control
and offers a variety of technology-based solutions for secure
identification. Identity and access-management product

lines include contactless smart cards, readers and control-
lers for physical and logical access control under the HID and
OMNIKEY brands. In the field of secure smart card issuance
and card personalization services, the Group company Fargo
offers a number of card printers and encoders.

HID Global – main events in 2009
New products, together with active efforts to improve the
efficiency and the organization of the business unit, enabled
HID Global to maintain good margins even though the
market downturn had a negative impact on sales. Sales of
embedded card readers in equipment such as Dell’s laptop
computers continued to show positive growth. The tech-
nology combines physical and logical access in one system,
enabling the same contactless smart cards to be used for
both buildings and computers. Fargo’s networked printer
business performed well during the year. The reorganiza-
tion of HID Identification Solutions (previously ITG) is near-
ing completion with the establishment of targeted busi-
ness segment for sales, marketing, engineering and support
function.

Identity and
access management

2. Physical
access control

1. Secure
issuance

3. Logical
access control

Secure
identity

7. Industry
and logistics

4. Contactless
payment

6. Animal ID

5. eGovernment

Identification solutions

HID Global’s product areas
HID Global works with a common technology platform for
secure identification using smart cards, RFID and encryption.
Below are some examples of HID Global’s product offering
in this area of the security market.

identity and access management
1. Secure issuance

Printing and issuance of identification cards

2. Physical access control

Contactless cards and card readers

3. Logical access control

Card readers and software for secure log-on

identification solutions
4. Contactless payment

Contactless payment cards and reader modules

5. eGovernment

Identification technologies for identity cards,
ePassports, and readers

6. Animal ID

Contactless tags and readers for identifying livestock

7. Industry and logistics

Contactless tags and readers for inventory control
and logistics

40 GLOBAL teCHnOLOGieS DiviSiOn

ASSA ABLOY AnnuAL repOrt 2009

» Global leader in access management

and hotel security «

Market presence
HID Global continued its long-term investments in market
presence and sales despite the adverse business climate in
2009. One important priority for HID Global is the global
launch of ‘HID on the Desktop’, a series of logical access solu-
tions that help to increase utilization of existing investments
in physical access. With ‘HID on the Desktop’, the same smart
card is used to gain access to the office or university and to log
on to the computer. The products have been well received by
the market and the roll-out will continue in 2010.

The business unit also works closely with architects and

security consultants on project specification early in the
construction process. During the year, HID Global organized
a number of round-table activities to which external security
consultants and ASSA ABLOY’s other divisions were invited
to discuss new applications and solutions, new technology
trends and how the new technology and security solutions
can be used. This creates closer collaboration with specifiers
and security consultants in the market.

Product leadership
HID Global increasingly supplies reader technology to all
the Group’s divisions. Reader technology is being inte-
grated into ordinary mechanical door opening solutions.
This results in increased growth for both HID Global and the
other divisions, as it considerably raises the technology level
of traditional products, offering customers higher security
and better functionality. One of HID Global’s key priorities
is therefore drawing up a development strategy for a global
solutions platform. HID Global has more than 20 ongoing
development projects within the ASSA ABLOY Group.

Cost-efficiency
One important project in 2009 was to reduce inventories in
the business unit. The project was implemented across all
product and geographical areas and resulted in a reduction
in capital employed and an improved cash flow.

HID Global also increased its activities in Value Analysis/

Value Engineering (VA/VE). The goal is to reduce product
costs without impairing functionality. This has led to signifi-
cant cost savings in both the existing product range and the
production of new products.

Key figures

SEK M

2008

2009

4,866
–1
729
15.0

Income statement
Sales²
total growth, %
Operating income (eBit)¹
Operating margin (eBit)¹, %
Capital employed
Capital employed
– of which goodwill
return on capital employed¹, %
Cash flow
Cash flow
Average number of employees
¹ excluding items affecting comparability.
Omsättning och rörelseresultat
² reclassification has been made for 2008 and 2009. For more information see note 34.

6,112
4,275
12.7

672
2,811

4,766
–2
766
16.1

5,464
4,030
12.9

1,005
2,416

Sales and Operating income¹

SEK M

5,000

4,000

SEK M

1,000

 Sales2

Operating income

800

600

3,000

¹ excluding items affecting compa-
rability 2006, 2008 and 2009.
² reclassification has been made
1 Exklusive omstrukturering
for 2008 and 2009. For more
2006 och jämförelsestörande
information see note 34.
poster 2008.
2,000
Sysselsatt kapital/avkastning på sysselsatt kapital

08 09

400

Capital employed and Return on capital employed¹

SEK M

6,000

5,000

4,000

3,000

2,000

08 09

Sales by product group

 Capital employed
Return on capital
employed

1 Exklusive omstrukturering
¹ excluding items affecting compa-
2006 och jämförelsestörande
rability 2006, 2008 and 2009.
poster 2008.

identity and access, 56 %
identification solutions, 18 %
Hotel locks, 26 %

ASSA ABLOY Hospitality

ASSA ABLOY Identification Technologies (ITG)

HID Global

Market segments

non-residential, 100 %
residential, 0 %

Bostadsmarknaden

Institutionella marknaden

ASSA ABLOY AnnuAL repOrt 2009

GLOBAL teCHnOLOGieS DiviSiOn

ASSA ABLOY Hospitality
ASSA ABLOY Hospitality produces electronic lock systems
and safes for hotels and cruise ships. The business unit
includes leading global brands such as VingCard Elsafe and
TimeLox. VingCard Elsafe, the world’s best-known brand for
hotel locking systems, has products installed in over 6.5 mil-
lion hotel rooms in more than 39,000 hotels worldwide.

ASSA ABLOY Hospitality – main events in 2009
The new radio-frequency identification (RFID) hotel lock
was well received by the market and made a positive contri-
bution to sales in a market with lower volumes. ASSA ABLOY
Hospitality also felt the downturn in the new-construction
sector, particularly on the hotel and casino market. The re-
location of production from Western Europe to a new pro-
duction plant in China and increased production efficiency
had a positive impact on the operating margin.

In recent years demand for VingCard’s RFID technol-
ogy has increased and this now accounts for more than 50
percent of the electronic locks produced by VingCard. RFID
technology offers higher security and, when combined
with ZigBee wireless technology, provides a very reliable
and cost-efficient security system, improving efficiency and
reducing maintenance costs for hotels. More than 35,000
rooms are now equipped with VingCard’s VisiOnline wire-
less system.

The new VisiOnline system is integrated with the hotel’s

other operating systems to add efficient new housekeep-
ing, security and maintenance functions. The VisiOnline sys-
tem improves customer service by enabling the front desk
to authorize room changes, extensions of stay and access
to conference rooms without the guest needing to hand in
their key. New integrated technology to further develop the
VisiOnline system will be launched in early 2010.

Market presence
It is strategically important for ASSA ABLOY Hospitality to
expand its customer base beyond the traditional hotel and
cruise sectors. Marketing efforts are therefore being made

in other segments, such as retirement and student accom-
modation, where security and accessibility requirements
can be met by the products and technologies offered by
ASSA ABLOY Hospitality. Future initiatives are in hand to
offer integrated security solutions with other ASSA ABLOY
companies.

Product leadership
One strategic priority for increased growth in ASSA ABLOY
Hospitality is offering upgrades for previously installed prod-
ucts. Important components in achieving this are technologies
such as RFID, NFC (Near Field Communication) and ZigBee RF
online solutions.

ASSA ABLOY Hospitality’s online products are designed

to facilitate gradual upgrading of existing technology
over several years to better meet customers’ needs and
investment plans. For example, ASSA ABLOY Hospitality
has installed its products in 10,000 rooms at the Venetian
Palazzo in Las Vegas, where 3,500 rooms now use VisiOnline
technology and the rest use off-line technology.

Cost-efficiency
Major efforts are also being made to increase efficiency in
the business unit through relocation of production to low-
cost countries and outsourcing of component production
to high-quality suppliers in low-cost countries . In 2009
ASSA ABLOY Hospitality completed the relocation of all pro-
duction from Western Europe to the new production plant
in China.

In 2010 Hospitality is set to implement a global ERP sys-
tem, which will improve the efficiency of administrative and
global purchasing functions and develop the web-based
ordering portal used by all Hospitality’s business partners.

42 GLOBAL teCHnOLOGieS DiviSiOn

ASSA ABLOY AnnuAL repOrt 2009

the home of Australian cricket
goes for a fast, seamless upgrade
of its access control system

the melbourne Cricket Ground (mCG),built in 1853, is not only
one of the most famous arenas in the sport; it also rates as one
of the world’s most well known stadiums, ranking alongside
Lord’s Cricket Ground, Wembley Stadium and Yankee Stadium.
Because of its popularity as a sporting and exhibition venue,

the ground is under 24-hour guard, yet its security and access
systems were seen as old fashioned and out of date. the exist-
ing software and hardware solutions were complex, the cabling
was poorly documented; and the whole system required sub-
stantial training for all its users. time for an upgrade – but a
clever one, for the ground is in constant use, every day of the
year. the solution needed to be very easy to learn and reliable;
the installation would have to be quick and seamless.
HiD was chosen to provide an open, ip-based solution
that would allow an easy upgrade path for the mCG at any
stage in the future. HiD’s proposal featured the Opin™ plat-
form on vertX™ hardware, which meant that existing secu-
rity cables could be utilized along with much of the existing
it infrastructure.

the overall proposal proved to be a very simple and effec-

tive solution from a user’s point of view while maintaining
all of the power and functionality expected in a world-class
control platform.

entrance Systems
Acquisitions strengthen the customer offering

ASSA ABLOY entrance Systems strengthened its product and service offering through complementary
acquisitions in 2009. the italian company Ditec, which offers products in the fast-growing and profitable
entrance solutions segment, was acquired in the fall. in the established operations, new products con-
tributed to a strong performance during a year of weak market development due to the global down-
turn in the construction segment. expanded service continued to be a key component of the division’s
market offering.

Entrance Systems in brief
Entrance Systems division is the world-leading supplier
of automatic entrance solutions. The product range, sold
under the Besam brand, include automatic swing-, sliding
and revolving doors, air curtains and a comprehensive ser-
vice and maintenance program. A significant part of sales
goes direct to major end-customers in the healthcare, com-
mercial and transport sectors.

Pedestrian door, gate, garage door and industrial door
automation is sold under the Ditec Entrematic brand. The
products are distributed through distributors and installa-
tion companies and installed in both commercial and pri-
vate applications.

The division’s third brand, EM Entrematic, markets auto-
mated pedestrian door products and targets major distribu-
tors particularly in Europe.

Report on the year
The division’s sales during the year totaled SEK 3,733 M
(3,173), which was an increase of 18 percent. Operating
income (EBIT) excluding restructuring costs rose by 30 per-
cent to SEK 587 M (453), which represents an operating
margin of 15.7 percent (14.3).

Demand on the division’s principal markets slowed dur-
ing the year, mainly due to lower investments in the impor-
tant retailing sector. However, this was offset by increased
sales in other segments such as healthcare and transport.
Asia showed strong growth during the year. The division also
made major investments in new products and increased
marketing activities.

Automatic entrance solutions for
non-residential customers
Automatic entrance solutions and service offerings are
mainly sold in the non-residential segment, which com-
prises end-users in both the private and public sectors. Typi-
cal customers are retailers, hospitals, homes for the elderly,
hotels, airports, transport terminals, office buildings, public
buildings and schools. It is increasingly important to offer
automatic entrance solutions in the form of complete pack-
ages in order to satisfy end-user needs. A total solution from
Entrance Systems usually consists of a combination of auto-
matic sliding, swing and revolving doors with safety and con-
venience sensors and a preventive maintenance program.

The division’s product range, global resources and know-

convenient, reliable and aesthetic entrance solutions that
are sustainable and can be complemented by a customized
service offering.

EMEA
The weakening market conditions in EMEA resulted in nega-
tive growth during the year, but the division nevertheless
continued to increase its market shares in many key mar-
kets. Marketing activities were implemented to mitigate this
negative growth, including new product launches and the
development of new service concepts. The EM Entrematic
brand continued to show strong growth and increased its
activities in a number of new markets.

North America
Sales in the North American market were weak in 2009 and
negatively impacted by the widespread market downturn in
the retail segment in particular.

The customer service offering performed strongly and
Besam won a number of major service contracts in the USA
and Canada. The product launches in 2008 had a full impact
in 2009 and resulted in increased market shares.

Asia, Australia and New Zealand
Sales in Asia remained strong during the year, with positive
growth in China and South East Asia. The acquisition of Cheil
in South Korea has significantly strengthened the position
in the region. The markets in Australia and New Zealand
slowed, but the division consolidated its market position
through organic growth and a complementary acquisi-
tion in New Zealand, which resulted in a stronger service
offering.

Market presence
Entrance Systems is continuously working to expand its cus-
tomer offering by selling total automatic entrance solutions,
including a comprehensive service concept. Regular preven-
tive maintenance is beneficial for customers, and ongoing
contact with these end-customers also enhances opportu-
nities for additional sales. Great importance is attached to
the sales training of service engineers to take advantage of
their daily contact with customers. The division is also work-
ing on increasing efficiency in the service organization, on
further automating processes and increasing the number of
customer visits.

ledge of the end-customer’s local needs make Entrance
Systems an ideal partner for creating a wide range of safe,

The acquisition of Ditec has added a further range of
products to the customer offering. Ditec is a global leader in

44 entrAnCe SYStemS DiviSiOn

ASSA ABLOY AnnuAL repOrt 2009

Key figures

SEK M

2008

2009

3,173
6
453
14.3

3,425
2,763
13.8

399
2,260

3,733
18
587
15.7

4,116
3,223
15.2

680
2,253

Sales and Operating income¹

SEK M

4,000

3,500

3,000

2,500

SEK M

600

 Sales2

Operating income

540

480

420

2,000

¹ excluding items affecting compa-
rability 2006, 2008 and 2009.
² reclassification has been made
1 Exklusive omstrukturering
for 2008 and 2009. For more
2006 och jämförelsestörande
information see note 34.
poster 2008.
1,500
Sysselsatt kapital/avkastning på sysselsatt kapital

08 09

300

360

Capital employed and Return on capital employed¹

 Capital employed
Return on capital
employed

1 Exklusive omstrukturering
¹ excluding items affecting compa-
2006 och jämförelsestörande
rability 2006, 2008 and 2009.
poster 2008.

SEK M

4,500

4,000

3,500

3,000

2,500

2,000

08 09

Sales by product group

Automatic doors, 63%
Service, 37%

service

Auto

Market segments

non-residential, 100 %
residential, 0 %

Bostadsmarknaden

Institutionella marknaden

» Acquisitions in door automation are
strengthening the customer offering «

entrance automation covering pedestrian doors, industrial
doors, high-speed doors and gate automation. This acquisi-
tion is an important step in the division’s growth strategy in
the fast-growing and profitable entrance automation seg-
ment. It also strengthens the division’s indirect sales channel
to both the mature markets in Europe and North America
and the expanding entrance automation business in emerg-
ing markets.

Entrance Systems also acquired the Swedish company
Portsystem 2000, which specializes in end-customer solu-
tions for industrial doors and docking systems. The com-
pany offers an attractive fit with Besam’s model of supplying
major logistics and retail companies with customization and
service in application areas such as automatic doors, indus-
trial doors and docking stations.

The division launched an eCommerce solution during
the year to further strengthen the relationship with its dis-
tributors and increase transaction efficiency. These services
will be further expanded in 2010.

Product leadership
The division continued to invest in product development
and initiated a number of important projects in 2009.
The new Besam SW100 low-energy automatic door was
launched in Europe during the year. The new Besam RD3L
large revolving door was launched in the second half of the
year and was well received by the market. These products
have a number of competitive advantages, including low
operating costs. SMART Reset, Ditec’s High Speed Industrial
Rolling door has a self-repairing curtain and is suitable for
high-traffic areas. SMART Reset handles high wind loads, is
compact and therefore fits into limited spaces.

Several product launches are set to take place in 2010 in
the key product areas of sliding doors, revolving doors and
garage and gate automation.

Product customization to meet local conditions and

requirements in Asia and North America continued,
strengthening competitiveness in several key markets.

Cost-efficiency
The division’s efficiency programs intensified in 2009. The
aim of these efficiency programs is to improve production
efficiency and transfer component production to low-cost
countries. Several important projects to relocate compo-
nent purchases and production capacity to low-cost coun-
tries were completed during the year and new projects were
initiated to further reduce product costs.

Measures to increase sales and productivity continue
in the service organization. The project to provide service
engineers in several countries with hand-held computers to
improve their efficiency continued during the year produc-
ing good results and leading to reduced service administra-
tion costs.

Owing to the weaker market trend in mature markets

during the year, Entrance Systems successfully adjusted
costs to the lower volumes. This had a positive impact on the
operating margin in 2009.

ASSA ABLOY AnnuAL repOrt 2009

entrAnCe SYStemS DiviSiOn

employees
employees generate success

It is ASSA ABLOY’s employees that generate its success. Considerable efforts are therefore made to
develop and retain the Group’s employees. ASSA ABLOY aims to be an attractive employer by offering
challenging jobs, good development opportunities and a positive and engaging work situation.

Common knowledge-base
All employees must complete the interactive web-based
orientation program ‘Entrance to ASSA ABLOY’. It is avail-
able in 15 languages and informs employees about the
organization’s history, products, strategy and Code of Con-
duct. In 2009 more than 22,000 employees took part in the
program.

Global employee survey
A global employee survey, first carried out in 2006, is con-
ducted every 18 to 24 months to find out the employees’
opinions on their work, their workplace and the company.
Evaluation and comparison with the results of previ-
ous surveys show the effect of the measures taken and
are important tools in the improvement process. Around
18,000 employees took part in the latest survey in 2008. This
survey showed a major or minor improvement in all areas
compared with 2006, confirming that the follow-up activi-
ties had been effective.

The results from more than 150 units are reported and

communicated to all employees.

The next employee survey, the third, will be conducted in

April 2010.

Management training
Every year ASSA ABLOY offers a number of senior managers
the opportunity to take part in the Group’s two develop-
ment programs, ASSA ABLOY Management Training (MMT)
and the ASSA ABLOY Business Leadership Program. In 2009
84 managers took part in these programs.

MMT, which is an internal program, gives participants a
deeper knowledge of all aspects of ASSA ABLOY’s business
and the opportunity to build and expand their internal con-
tact network, to share and benefit from good practice and
to identify new business opportunities. Since the first pro-

Omsättning och rörelseresultat

gram in 1996, 360 managers from 33 countries (including
the 2010 program) have taken part. The program comprises
three or four modules over a 12-month period.

The ASSA ABLOY Business Leadership Program was
launched in 2005 and is done in collaboration with the
Institute for Management Development (IMD) in Lausanne,
Switzerland. In 2009 two programs were run with a total of
57 managers. A total of over 200 managers have taken part
in the program.

Scholarship Program
ASSA ABLOY’s Scholarship Program offers employees the
opportunity to work at another Group company for a short
period. This program is open to all employees. It gives parti-
cipants the opportunity to learn about the methods, proce-
dures and products of another Group company and to bring
these experiences back to their own workplace.

Employee development
ASSA ABLOY has a global employee development process
in place, the Talent Management Process. The goal is to
enhance career opportunities in a structured way, while
achieving better utilization of the Group’s total resources.
This process includes employees at all levels.

Recruitment
A basic principle of ASSA ABLOY’s recruitment policy is to
give priority to internal candidates provided they have equal
qualifications to external applicants. To encourage and facili-
tate internal mobility, all job vacancies are also advertised on
the Group’s global intranet. In 2009 a Group-wide guide to
recruitment and selection was launched to ensure a uniform
approach and the quality of the recruitment process.

Average number of employees

Number of employees by region

Number

35,000

32,000

29,000

26,000

23,000

20,000

08 09

1 Exklusive omstrukturering
2006 och jämförelsestörande
poster 2008.

europe, 11,477
north America, 7,595
Central and
South America, 535
Africa, 515
Asia, 8,096
Australia and
new Zealand, 1,157

Pacific

Asia

Africa

Central and South America

North America

Europe

empLOYeeS

ASSA ABLOY AnnuAL repOrt 2009

An unforgettable
experience

three participants in the ASSA ABLOY Scholarship pro-
gram for 2009 share their experiences.

Dean Norton, product Development technician,
ASSA ABLOY Australia
Eight weeks spent at ASSA in Eskilstuna, Sweden
‘I helped with testing, developing test jigs, and
machine maintenance in the test lab. the whole expe-
rience allowed me to develop my ability to adapt to
new situations and improved my communication and
people skills.’

Thomas Schultz, Advertising and pr manager at
ASSA ABLOY Sicherheitstechnik, Germany
Two months spent at Security Merchants Ltd in Auckland,
New Zealand, and ASSA ABLOY Australia in Melbourne.
‘During my stay, we had a lot of discussions and work-
shops that were beneficial for both sides. Having
improved my english language skills, I am now able
to communicate more effectively with other pr and
advertising colleagues throughout the Group.’

Roland Martin, Operations Analyst,
ASSA ABLOY emeA
Three months spent at ASSA ABLOY South Africa
‘the benefits far outweigh the challenges if you make
the most of each opportunity. I worked with a team of
engineers, applying Overall equipment effectiveness
principles in the zinc furniture die-casting facility. We
made substantial gains at the facility, improving out-
put by 10 per cent.’

Jobseekers targeted on
Facebook and twitter

Social networking on the Internet is a natural part of
everyday life and has changed the way people search
for jobs and interesting employers.

When Americas Division wanted to get into social
recruitment it approached its recruitment partner
monster.com.

‘As we’re breaking new ground there are no given
rules. monster’s system has enabled us to upload the
jobs we already market on monster.com to our own
Facebook and twitter pages – ASSA ABLOY Americas
Jobs,’ says margaret Wirtes, director of the strategic
Human resources project at ASSA ABLOY Americas.
‘this has allowed us to market ourselves to all the
active and passive jobseekers who twitter and social-
network on these sites daily – potentially millions of
people.’

In addition, all the jobseekers who do not normally

visit the company’s website get a chance to learn
more about ASSA ABLOY Americas, Wirtes says.
‘Apart from the latest jobs we’ve added lots of videos,
links, images and news to our profile pages.’

Be a fan or follow ASSA ABLOY Americas at
www.facebook.com/assaabloyamericasjobs and
www.twitter.com/assaabloyameric
You can also be a fan or follow the ASSA ABLOY Group
at www.facebook.com/assaabloygroup and
www.twitter.com/assaabloygroup.

Distribution, men and women

men, 61%
Women, 39%

» ASSA ABLOY’s vision: to offer an attractive
company for our employees «

ASSA ABLOY AnnuAL repOrt 2009

empLOYeeS 47

Sustainable development
A natural part of the business

ASSA ABLOY’s work on sustainability is integrated throughout the value chain – from sourcing to
recycling. Sustainability initiatives are based on an ongoing risk analysis as well as on the Group’s
Code of Conduct and engage both internal and external stakeholders.

Sustainability Report
2009

The global leader in
door opening solutions

Code of Conduct
The Code of Conduct establishes the principles that
ASSA ABLOY applies in relation to its employees, suppliers
and other stakeholders. The Code is based on international
standards, is consistent across the global organization and is
available in 17 languages. ASSA ABLOY monitors the imple-
mentation of the Code of Conduct and deals immediately
with any non-conformances.

The Code of Conduct is available to all employees, who

are required to read and abide by it and related policies.
Whistle-blowing procedures are in place to enable individu-
als to report violations.

The 2009 Sustainability
Report will be published at
the time of the 2010 Annual
General Meeting.

In 2009, 22,000 employees went through a mandatory
orientation program which includes chapters targeted to
increased awareness and understanding of the importance
of the Code of Conduct.

ASSA ABLOY’s way of working
Social responsibility and sustainable development are based
on ASSA ABLOY’s Code of Conduct. The Board of Direc-
tors has the overall responsibility, while the Executive Team
handles operational management of sustainability and the
Group’s strategies.

Coordinators appointed at divisional and company level

are responsible for ensuring that policies, programs and
tools relating to sustainability and environmental issues
exist and are implemented, while the Human Resources
departments at Group and divisional level oversee social
and ethical issues. The divisions and their companies are
responsible for compliance with the Group’s Code of Con-
duct and for reporting back to Head Office.

A committee chaired by ASSA ABLOY’s Director of

Human Resources and including two employee representa-
tives manages compliance with the Code of Conduct and
handles any whistle-blowing cases.

As well as information and guidelines, ASSA ABLOY’s
intranet also provides tools to support the Group compa-
nies in their sustainable development work. One such tool
is a database detailing previous examples of good practice
in the Group and containing all available facts, reports and
follow-up actions concerning the sustainability program.
Statistics and reports can be extracted from the database
to enable Group companies to compare their performance
with other ASSA ABLOY companies and assess what mea-
sures should be undertaken.

The sustainability program
In 2007 ASSA ABLOY launched a three-year program devel-
oped by the Group’s Sustainability Council together with
representatives from all divisions. The program, which
ended early in 2010, was based on the Group’s risk assess-
ment procedures, practical sustainability issues and measur-
able results.

The program set out 20 objectives in the areas of chemi-
cals handling, energy efficiency, health and safety, relation-
ships with suppliers, product development, employee
issues, and governance, along with clear timeframes and
cost/benefit analyses.

The program has made it possible to introduce proce-
dures for quality and environmental management and to
establish a structure for ongoing improvement in day-to-day
operations. These now provide a firm platform for building a
sustainable future for the Group.

Corporate Governance
ASSA ABLOY follows the Swedish Code of Corporate Gov-
ernance, which forms part of the NASDAQ OMX rules gov-
erning the Stockholm Stock Exchange. The principles of the
Code are that companies should either comply with the
rules or explain any deviation from it. The Code lays down
responsibilities and ways of working for the Annual General
Meeting, ASSA ABLOY’s Board of Directors and the Execu-
tive Team.

Control of suppliers
Auditing and improving the ASSA ABLOY supplier base is
a continuous task, and supplier selection is based on stan-
dardized criteria for both quality and sustainability.

Suppliers too are required to adhere to the Code of Con-
duct. Quality and sustainability audits are carried out before
new suppliers are accepted, and these audits are prioritized
for any deemed to be in a risk category.

The system used to evaluate suppliers’ compliance with
the Code of Conduct includes criteria on wages, overtime,
noise levels, protective equipment, chemical handling, acci-
dent recording, environmental management systems and
health and safety training.

Any supplier failing to comply is asked to implement nec-

essary improvements, and contracts are terminated if non-
compliance continues.

SuStAInABLe DeveLOpment

ASSA ABLOY AnnuAL repOrt 2009

Sustainability work

Sourcing

Innovation

Manufacturing

Sales

Customers

Code of Conduct and Corporate Governance
Employees

The supplier selection process
The process has three steps:
•

Supplier self-assessment – the supplier assesses its ability
to meet ASSA ABLOY’s standards.
On-site audit – the sustainability screening audit evalu-
ates how well a potential supplier meets requirements.
Extended sustainability audit – this complements the
standard audit.

•

» An important part of ASSA ABLOY’s work on
sustainable development is to ensure that all
suppliers meet the Group’s requirements «

After the audit, suppliers are given green, yellow or red sta-
tus. Green means the supplier is approved; yellow means the
supplier needs to improve within a specific timeframe; red
means the supplier is not approved.

A red or yellow grade can be upgraded through an

improvement plan. If the supplier takes no steps to improve,
it is immediately graded red and all purchasing is halted until
the supplier achieves green status.

Audits performed
ASSA ABLOY performed 192 quality audits and 188 sustain-
ability audits in 2009. At the end of the year, 178 active sup-
pliers had passed the minimum standards for quality and
sustainability and were classed as reliable. Another 37 sup-
pliers were rejected and 29 were blacklisted.

•

Screening will continue and yearly follow-ups on previ-
ously approved suppliers will be performed. Random,
un announced inspections will be more frequent.

ASSA ABLOY’s supplier database
The Group’s suppliers are listed, graded and tracked in a sup-
plier database. Audit reports – for both quality and sustain-
ability – are added regularly.

The database also lists non-approved and blacklisted
suppliers to ensure they are not used again. Sustainabil-
ity audit results override quality audit results regarding
non-compliance. This means that a supplier rejected for
sustainability non-compliance is either banned outright
or must wait for acceptance until the problems have been
addressed.

Product development
ASSA ABLOY’s ambition to achieve world-class innovation
involves looking at the environmental impact of every prod-
uct, not just those for specifically Green solutions.

Group companies use the Group’s Product Innovation

Process and environmental checklist for all new product
development.

The Product Innovation Process has three major elements:
•

Product Management – addressing the strategic aspects
of the process.
Voice of the Customer – ensuring the company develops
what the customers want.
The Gateway process – ensuring that development pro-
jects are carried out in a structured and efficient way.

Vinst per aktie efter skatt och utspädning

Number of reporting units

Use of chlorinated solvents (PER and TRI)

200

150

100

08 09

the number of reporting units
in the Group has increased by
122 percent to 180.

tonne

100

08 09

2009 and 2008 relate to
comparable units.

ASSA ABLOY AnnuAL repOrt 2009

SuStAInABLe DeveLOpment 49

Sustainable development

ASSA ABLOY implements its sustainability strategy and low-
ers its costs by minimizing the chemicals, energy and mat-
erials used in manufacturing. The Group’s environmental
checklist helps to eliminate unnecessary functions, reduce
the amounts of hazardous materials used and ensure that
processes are sustainable and efficient.

Manufacturing
Energy
ASSA ABLOY’s ambition is to reduce energy consumption
and emissions of harmful greenhouse gases. The Group is
therefore implementing a three-step approach to reduce
energy consumption.

Health and Safety
ASSA ABLOY is committed to providing a safe working envi-
ronment and to eliminating risks that can cause accidents or
impair the health and wellbeing of employees. The aim is to
create a culture where everybody contributes to improved
health and safety.

ASSA ABLOY has defined a number of objectives directed
to continuous improvement. These objectives are based on
a zero vision for work-related accidents.

Health and Safety audits are included in the internal
audits, and risk assessment is carried out routinely. Inci-
dent reporting and analysis are used to identify preventive
measures.

The first step is to concentrate manufacture in as few
plants as possible in order to maintain full capacity, efficient
working practices and high quality.

All units are benchmarked against each other so that
special attention can be given to the plants with the great-
est need.

The second step is to introduce smart solutions that
reduce energy and water consumption in both offices and
factories.

The third step is to evaluate alternative energy sources
which in combination with innovative product design can
make manufacturing processes even more energy-efficient.

Water consumption
Work to improve water efficiency has focused on plants with
plating operations, where most of the consumption arises.

Technical improvements in the purification and reuse of

water in production reduced water consumption in 2009.

Waste management
The principle of Reduce, Reuse, Recycle is followed across
the organization, reducing the amount of material in the
products, designing products that can be upgraded rather
than exchanged, and enabling recycling of material from
process scrap and at the end of the products’ life cycle.

Hazardous chemicals
ASSA ABLOY also works continuously to reduce hazardous
substances in production and find replacements for them.
For example, most production plants have phased out
chlorinated solvents successfully.

Sales and customers
ASSA ABLOY’s primary communication with its customers is
through the sales force, and its image as a sustainable com-
pany is often based on customers’ relationship with the sales
people.

For this reason the requirements of ASSA ABLOY’s Code

of Conduct and business ethics form an important part of
the Group’s sales training.

Sustainability can provide new business opportunities.
Research shows that 10 percent of all commercial construc-
tion projects in the Western world may be Green in 2010.
For the USA alone, the estimated value of related security
products is USD 1.2 billion in 2010, and double that in 2013.

A responsible employer
Factory Compliance Audits covering areas such as working
conditions, human rights, human resources issues, the work
environment, workplace culture and skills development are
conducted regularly at ASSA ABLOY’s factories. The Audits are
conducted by external auditors in line with internationally
accepted procedures so as to obtain an independent view of
the situation at each factory.

The Audits are followed by actions to implement

improvements where needed.

Vinst per aktie efter skatt och utspädning

Energy use

Accidents per million hours worked

GWh

600

500

400

300

200

100

08 09

2009 and 2008 relate to
comparable units.

08 09

SuStAInABLe DeveLOpment

ASSA ABLOY AnnuAL repOrt 2009

Stakeholders
In the area of sustainable development, ASSA ABLOY’s stake-
holders include shareholders, investors, customers, suppli-
ers, employees, local communities, non-governmental orga-
nizations (NGOs) and the media. ASSA ABLOY’s open-door
policy means listening to these stakeholders and gaining
benefit from their views.

During 2009 ASSA ABLOY held round-table discussions
and separate meetings with a number of investors. Requests
from investors have generally concerned making more infor-

mation about low-cost countries externally available, such
as measures when establishing new operations; due dili-
gence procedures; suppliers; sourcing volumes; indicators
for supplier audits; reports about supplier audits, and infor-
mation about rejected suppliers. The meetings have proved
valuable and given the Group important feedback on sub-
jects such as suppliers, the sustainability agenda and new
business opportunities for Green products.

Some of the results from the sustainability program

Objective

Result 2007

Result 2008

Result 2009

Trend

Energy conservation – in manufacturing:
A reduction of 15 percent by 2012 compared to the result in
2006, based on normalized values.

Organic solvents – Phase out all use of perchloroethylene
and trichloroethylene².

Health and Safety
Zero-vision and targets for improvement:
– IR, injury rate = number of injuries per million hours worked
– ILDR, injury lost-day rate = number of days lost due to injuries
per million hours worked

ISO 14001 – Compliance at all factories with significant
environmental impact4.

Suppliers – Sustainability assessments; acceptance of the
Code of Conduct a documented requirement for all suppliers;
sustainability audits for all suppliers in the risk category.

Gender equality – Improve current levels of gender equality
at senior levels.

536 GWh

482 GWh

444 GWh¹

93 tonnes

42 tonnes

23 tonnes³

IR 9.5
ILDR 179

IR 8.7
ILDR 166

IR 8.4
ILDR 150

625

120 sustainability
audits in China

100 sustainability
audits in China

178 sustainability
audits in China

Level 2: 0%
Level 3: 14%
Level 4: 19%
Level 5: 22%

Level 2: 0%
Level 3: 11%
Level 4: 17%
Level 5: 23%

Level 2: 0%
Level 3: 15%
Level 4: 18%
Level 5: 20%

¹ For comparable units. Total energy consumption amounted to 491 GWh,
including units acquired during the year and increased reporting.
² Plants with completely closed washing processes will be phased out when the machines are taken out of service.

Deterioration

Read more about the updated objective in the 2009 Sustainability Report.

Unchanged

Improvement

³ For comparable units. Total discharge amounted to 43 tonnes, including units acquired during the year and increased reporting.
4 Number of certificates plus the corresponding number of certifiable systems for North American units. The change is due in part
to the closing of plants in the restructuring program and in part to the addition of a number of new plants with certificates.
5 The reduction is due to the continuing restructuring program.

The sustainable development program in brief

2004
Code of Conduct

Whistle-blowing

2005
Internal audits

training and best-
practice sharing

Criteria for investments
if > SeK 1 m

Due diligence directive

2006
Supplier audits tool

employee survey

2007
Sustainability
program

2008
Sustainability strategy for
product development,
with checklists

2009
Sales companies and
offices included in
reported figures

employee survey

marketing and sales
training

Supplier audit training

Code of Conduct updated

Increased monitoring
of energy consumption
and CO2 emissions

Common recruitment
and selection guide
issued

ASSA ABLOY AnnuAL repOrt 2009

SuStAInABLe DeveLOpment 51

Sustainable development

ensuring compliance
by independent audits

In 2009 the independent company Hifab Interna-
tional, together with local partners, carried out audits
concerning the environment and social responsibility
at ASSA ABLOY’s factories in roodepoort, South Africa
and in mexico City.

the audits were conducted in line with inter-
nationally accepted and established procedures: an
opening meeting with management and key staff;
factory inspection; management interviews; docu-
mentation reviews; interviews with a selected num-
ber of workers at the factory; and a closing meeting
with management.

the audit team that visited ASSA ABLOY mexico
reported: “there have been a lot of improvements
made at ASSA ABLOY mexico in recent years. Of
course there is always room for further improve-
ment, but this factory has a committed management
team and that is a fundamental and crucial point for
success.”

Lyna may, Hr manager at ASSA ABLOY South
Africa, said: “One of the things we learnt from the
audit was that what the management takes for
granted is not necessarily what the employees are
thinking. the social compliance audit has shown us
where we can improve and that these improvements
will benefit the entire organization.”

Smart thinking at
entrance Systems’
production plant

ASSA ABLOY entrance Systems’ production plant at
monroe, north Carolina, uSA found that a low-cost
way of reducing energy use was by installing clear
plastic barrier strips on all dock door openings. this
reduces the loss of cool air during the heat of the
day, meaning that the air-conditioning system has to
work less hard. In addition, installing mesh grilles on
the dock doors enabled the doors to be opened and
the plant cooled by air from outside during the early
part of the day without compromising security. Com-
paring energy usage figures for the third quarters of
2009 and 2008 shows an average daily reduction of
425 kWh.

the redesign of packaging material for the Besam
powerSwing resulted in 100 percent recyclable mat-
erial being used for the operator part of the product,
and a 50 percent reduction in the amount of foam in
the header part. the company is also participating in
a recycling program for wooden pallets.

energy-saving door solutions

When ASSA ABLOY Americas division started to create its Green door solutions it already
had a number of energy-efficient products in its product portfolio that could be certified
under LeeD (the Leadership in energy and environmental Design Green Building rating
System, developed by the uS Green Building Council). Some were originally developed
for cold weather in Alaska and have a high level of thermal resistance.

Stacey Callahan, Director of marketing and Innovation for the Door Group in the
Americas Division in the uSA, says: “using these products saves energy in any building;
they are just as useful in a warm climate where you want to keep the heat out and the
cool air-conditioning in.”
Callahan says the division is continuing to develop Green and energy-efficient prod-
ucts. maiman’s thermal Fused Flush doors are made from 75 percent recycled mate-
rial. Ceco’s metal doors are constructed using a high percentage of scrap steel and other
re cycled material. the trIO steel-stiffened hollow metal door from Ceco Door and
Curries is filled with polyurethane foam, which expands to fill the core, eliminating air
pockets that could allow thermal leakage. the trinity door-closer from norton Door
Control needs no batteries or power wiring. Any movement of the door of 10 percent
or more is enough to generate the necessary power for closing.

SuStAInABLe DeveLOpment

ASSA ABLOY AnnuAL repOrt 2009

report of the Board of Directors
and financial reports
Contents

report of the Board of Directors
Significant risks and risk management
Sales and earnings
Income statement – Group
and Statement of comprehensive income
Comments by division
results by division
Financial position
Balance sheet – Group
Cash flow
Cash flow statement – Group
Changes in equity – Group
parent company financial statements

54
57
60

61
62
63
64
65
66
67
68
70

notes

1 Significant accounting and valuation principles
2 Sales
3 Auditors’ fees
4 Other operating income and expenses
5 Share of earnings in associates
6 Operational leasing agreements
7 expenses by nature
8 Depreciation and amortization
9 exchange rate differences in the

income statement

10 Financial income
11 Financial expenses
12 tax on income
13 earnings per share
14 Intangible assets
15 tangible assets
16 Shares in subsidiaries
17 Shares in associates
18 Deferred tax
19 Other long-term financial assets
20 Inventories
21 Accounts receivable
22 parent company’s equity
23 Share capital, number of shares and dividend

per share

24 post-employment employee benefits
25 Other provisions
26 Other short-term liabilities
27 Accrued expenses and prepaid income
28 Contingent liabilities
29 Assets pledged against liabilities to

credit institutes

30 Business combinations
31 Cash flow
32 employees
33 Financial risk management and

financial instruments

34 Income statement – reclassification

Comments on five year in summary
Five years in summary
Quarterly information
Definitions of key data terms
proposed disposition of earnings
Audit report

72
77
78
78
78
78
78
78

78
78
79
79
79
80
82
83
83
84
84
84
84
85

85
86
88
88
88
88

88
89
90
91

93
98
100
101
102
103
104
105

ASSA ABLOY AnnuAL repOrt 2009

report of the Board of Directors

The Annual Report of ASSA ABLOY AB (publ.), corporate identity number 556059-3575, contains the consolidated
financial statements for the financial year 1 January–31 December 2009. ASSA ABLOY is the global leader in door
opening solutions, dedicated to satisfying end-user needs for security, safety and convenience.

Significant events
Sales and earnings
Sales were maintained at a high level during the year and
amounted to SEK 34,963 M (34,829), with organic growth of
–12 percent (0) and acquired growth of 3 percent (4). Oper-
ating income (EBIT) excluding restructuring and non-recur-
ring costs fell by 2 percent to SEK 5,413 M (5,526), equiva-
lent to an operating margin of 15.5 percent (15.9). Income
before tax excluding restructuring and non-recurring costs
totaled SEK 4,779 M (4,756).

Restructuring costs of SEK 1,039 M (1,180) had a nega-

tive impact on operating income for the year.

Operating cash flow excluding restructuring payments
was very strong and rose to SEK 6,843 M (4,769), an increase
of 43 percent. Earnings per share after full dilution excluding
restructuring and non-recurring costs were SEK 9.22 (9.21).

Restructuring
The restructuring programs launched in 2006 and 2008
continued at a high level during the year. More than 4,600
employees have left the Group as a result of the changes in
the production structure since the start of the program. A
number of plant closures and a switch to final assembly in
high-cost countries have been implemented.

A third restructuring program was launched in Q4 2009.

This program comprises some 30 projects, is estimated to
cost SEK 930 M and affects 1,200 employees. Over 20 pro-
duction plants and offices will close. In addition, administra-
tive support functions will be consolidated. Payback time for
the full program is estimated at 3 years and the total cost
was expensed in Q4 2009. Restructuring measures during
Q1 affected the earnings by an additional SEK 109 M.

Payments related to the restructuring programs totaled

SEK 676 M (485) for the full year.

Acquisitions and divestments
In September Entrance Systems Division acquired the Ditec
Group, a leading player in automatic doors, industrial and
high-speed doors, and gate automation. The company, head-
quartered outside Milan, Italy, has annual sales of around SEK
800 M. In December the division also acquired the Swedish
company Portsystem 2000, specialized in end-customer
solutions for industrial doors and docking systems. The com-
pany has annual sales of around SEK 125 M. Both acquisitions
were EPS-accretive from the acquisition date.

In February Americas Division acquired Maiman, an
established and respected player in wood and laminate
doors. The company is located in Missouri, USA and has

annual sales of around SEK 100 M. The acquisition was EPS-
accretive from the acquisition date. In December the divi-
sion also acquired the remaining 70 percent of shares in Cer-
racol. The company, headquartered in Bogota, Colombia, is
the market leader on the Central American lock market, with
forecast sales for 2010 of around SEK 140 M. The acquisition
was EPS-accretive from the acquisition date.

Including smaller acquisitions, a total of eight acquisi-
tions were consolidated during the year. The total purchase
price for these acquisitions was SEK 1,107 M and preliminary
acquisition analyses indicate that goodwill and other intan-
gible assets with an indefinite useful life amount to around
SEK 800 M.

In 2009 an agreement was signed to acquire Pan Pan,
China’s largest manufacturer of high-security steel doors.
ASSA ABLOY has received anti-trust clearance. A business
license is required from the local Chinese authorities before
Pan Pan can be consolidated into the Group. This license is
expected in Q1 2010.

Three businesses in New Zealand, Sweden and Switzer-
land were sold during the year. The impact on the Group’s
financial position and performance was not significant.

Research and development
ASSA ABLOY’s expenditure on research and development
during the year amounted to SEK 920 M (901), which is
equivalent to 2.6 percent (2.6) of sales.

ASSA ABLOY has a central function, Shared Technologies,

with responsibility for the standardization of electronics in
the Group’s common platforms. The objective is that this
standardization should result in lower development costs
and a shorter development time for new products.

Sustainable development
Two of ASSA ABLOY’s subsidiaries in Sweden carry on licens-
able activities in accordance with the Swedish Environmen-
tal Code. The Group’s licensable and notifiable activities
have an impact on the external environment mainly through
the subsidiaries ASSA AB and ASSA OEM AB. These compa-
nies operate machine shops, foundries and associated sur-
face-coating plants, which have an impact on the external
environment through emissions to water and air as well as
solid waste.

The subsidiaries ASSA AB and ASSA OEM AB are actively
addressing environmental issues and are certified in accor-
dance with ISO14001. Most units outside Sweden carry on
licensable activities and hold equivalent licenses under local
legislation.

repOrt OF the BOArD OF DIreCtOrS

ASSA ABLOY AnnuAL repOrt 2009

ASSA ABLOY’s units all over the world are working purpose-
fully to reduce greenhouse gas emissions. This applies to
units on both mature and new markets and to both existing
and newly acquired companies.

The 2009 Sustainability Report, reporting on the Group’s
prioritized environmental activities and providing other infor-
mation about sustainable development, will be published at
the time of the Annual General Meeting in April 2010.

Outlook
Long-term outlook
Long term, ASSA ABLOY expects an increase in security-
driven demand. Focus on end-user value and innovation as
well as leverage on ASSA ABLOY’s strong position will accel-
erate growth and increase profitability.

Organic sales growth is expected to continue at a good
rate. The operating margin (EBIT) and operating cash flow
are expected to develop well.

Outlook for 2010
The organic growth is expected to be about 0 percent.

Shareholders and share capital
At year-end, ASSA ABLOY had 22,014 shareholders (22,921).
The principal shareholders are Investment AB Latour and
SäkI (9.6 percent of the share capital and 29.7 percent of the
votes) and Melker Schörling AB (4.0 percent of the share
capital and 11.6 percent of the votes). Investors outside
Sweden accounted for 53 percent (50) of the share capital
and 36 percent (34) of the votes. The ten largest sharehold-
ers accounted for 37 percent (41) of the share capital and
57 percent (60) of the votes.

A shareholders’ agreement, which includes preemption
rights for sale of Series A shares by any party, exists between
Gustaf Douglas, Melker Schörling and affiliated companies.
Apart from this, the Board of Directors of ASSA ABLOY is not
aware of any shareholders’ agreements or other arrange-
ments between shareholders of ASSA ABLOY.

ASSA ABLOY’s share capital at year-end amounted to
SEK 365,918,034 distributed among 19,175,323 Series A
shares and 346,742,711 Series B shares. Each Series A share
carries ten votes and each Series B share one vote. All shares
give the shareholders equal rights to the company’s assets
and earnings.

The Board’s proposed remuneration
guidelines for senior management
The Board of ASSA ABLOY proposes that the 2010 Annual
General Meeting adopts the following guidelines for the
remuneration and other employment conditions of the
President and CEO and the other members of the Executive
Team. Apart from the changes resulting from the Board’s
proposal for a long-term incentive program, the proposed
guidelines below do not involve any material change, com-
pared with the guidelines adopted by the 2009 Annual Gen-
eral Meeting. The basic principle is that remuneration and
other employment conditions should be in line with market
conditions and competitive. ASSA ABLOY takes into account
both global remuneration practice and practice in the home
country of each member of the Executive Team. The total
remuneration of senior management should consist of basic
salary, variable components in the form of annual and long-
term variable remuneration, other benefits and pension.

The total remuneration of the Executive Team, including
previous commitments not yet due for payment, is reported
in the Annual Report 2009, Note 32.

Fixed and variable remuneration
The basic salary should be competitive and reflect responsi-
bility and performance. The variable part consists of remu-
neration paid partly in cash and partly in the form of shares.
The Executive Team should have the opportunity to receive
variable cash remuneration based on the outcome in rela-
tion to financial targets and, when applicable, individual tar-
gets. This remuneration should be equivalent to a maximum
75 percent of basic salary (excluding social security
expenses).

In addition, the Executive Team should, within the frame-
work of the Board’s proposal for a Long-Term Incentive pro-
gram, have the opportunity to receive variable remunera-
tion in the form of shares based on an interval defined by the
Board regarding the development of earnings per share dur-
ing 2010. This remuneration model also includes the right,
when purchasing a share under certain conditions, to
receive a free matching share from the company. This remu-
neration should, if the share price is unchanged, be equiva-
lent to a maximum 50 percent of basic salary (excluding
social security expenses).

The cost of variable remuneration for the Executive Team
as above, assuming maximum outcome, amounts to a total
of SEK 44 M (excluding social security expenses). This calcu-
lation is made on the basis of the current members of the
Executive Team.

ASSA ABLOY AnnuAL repOrt 2009

repOrt OF the BOArD OF DIreCtOrS

report of the Board of Directors

Deviations from guidelines
The Board should have the right to deviate from these
guidelines if there are particular reasons for doing so in an
individual case.

Transactions with related parties
No transactions that have significantly affected the compa-
ny’s financial position and performance have taken place
between ASSA ABLOY and related parties.

Other benefits and pension
Other benefits, such as company car, extra health insurance
or occupational healthcare, should be payable to the extent
this is considered to be in line with market conditions in the
market concerned. All members of the Executive Team
should be covered by defined-contribution pension plans,
for which pension premiums are allocated from the execu-
tive’s total remuneration and paid by the company during
the period of employment.

Notice and severance pay
If the company gives notice of termination of contract, the
CEO is entitled to 24 months’ basic salary and other employ-
ment benefits, while the other members of the Executive
Team are entitled to a maximum 6 months’ basic salary and
other employment benefits plus an additional 12 months’
basic salary.

repOrt OF the BOArD OF DIreCtOrS

ASSA ABLOY AnnuAL repOrt 2009

Significant risks and risk management

Risk management
Uncertainty about future developments and the course of
events is a natural risk for any business. Risk-taking in itself
provides opportunities for continued economic growth, but
naturally the risks may also have a negative impact on busi-
ness operations and company goals. It is therefore essential
to have a systematic and efficient risk assessment process
and an effective risk management program in general. The
purpose of risk management at ASSA ABLOY is not to avoid
risks, but to take a controlled approach to identifying, man-
aging and minimizing the effects of these risks. This work is
based on an assessment of the probability of the risks and
their potential impact on the Group.

ASSA ABLOY is an international group with a wide geo-

graphical spread, involving exposure to various forms of
strategic, operational and financial risks. Strategic risks refer
to changes in the business environment with potentially sig-
nificant effects on ASSA ABLOY’s operations and business
objectives. Operational risks comprise risks directly attribut-
able to business operations, entailing a potential impact on
the Group’s financial position and performance. Financial
risks mainly comprise financing risk, currency risk, interest
rate risk, credit risk, and risk associated with the Group’s
pension obligations.

ASSA ABLOY’s Board of Directors has overall responsibil-
ity for risk management within the Group and determines
the Group’s strategic focus based on recommendations
from the Executive Team. In view of the decentralized struc-
ture of the Group, and to keep risk analysis and risk manage-
ment as close as possible to the actual risks, a large propor-
tion of operational risk management takes place at division
and business-unit level.

Strategic risks
The main risks of this nature encountered by ASSA ABLOY
include various forms of business environment risks with
an impact on the security market in general, mainly
changes in customer behavior, competitors, brand posi-
tioning and environmental risks. In addition, there are
country-specific risks.

ASSA ABLOY has global market penetration, with sales
and production in a large number of countries. The empha-
sis is on Western Europe and North America, but the propor-
tion of sales in Asia and in Central and Eastern Europe has

increased in recent years. The Group is therefore exposed
to both general business environment risks and country-
specific risks, including political decisions and comprehensive
changes in the regulatory framework. Changes in customer
behavior in general and the actions of competitors affect
demand for different products and their profitability.

Customers and suppliers, including the Group’s relation-
ships with them, are subject to continuous local review. The
Group has a central business intelligence function primarily
focused on industry-specific factors. As regards competitors,
risk analyses are carried out both centrally and locally.

The Group owns a number of the strongest brands in the

industry, including several global brands that complement
the ASSA ABLOY master brand. Local product brands are
gradually being linked increasingly to the master brand.
Generally speaking, ASSA ABLOY’s good reputation is one of
the Group’s strengths and serves as a foundation for market
leadership.

Activities to maintain and further strengthen

ASSA ABLOY’s good reputation are constantly ongoing.
These include ensuring compliance with ASSA ABLOY’s Code
of Conduct, which expresses the Group’s high aspirations
relating to social responsibility, commitment and respect for
the environment.

Operational risks
Operational risks comprise risks directly attributable to busi-
ness operations and with a potential impact on the Group’s
earnings and financial position. Operational risks include
legal risks, acquisition of new businesses, restructuring mea-
sures, availability and price fluctuations of raw materials,
customer dependence and more. Risks relating to compli-
ance with laws and regulations and to financial reporting
and internal control also fall into this category.

The table on page 58 describes in more detail the man-

agement of these risks.

Financial risks
Group Treasury at ASSA ABLOY is responsible for the
Group’s short- and long-term financing, financial cash man-
agement, currency risk and other financial risk management.
Financial operations are centralized in a Treasury function
which manages most financial operations as well as finan-
cial risks with a Group-wide focus.

Strategic risks

Operational risks

Financial risks

Changes in the business envi-
Förändringar i omvärlden med
ronment with potentially signif-
potentiellt betydande effekter
icant effects on operations and
på verksamhet och affärsmål.
business objectives.
• Kundbeteende
• Customer behavior
• Konkurrenter
• Competitors
• Varumärkespositionering
• Brand positioning
• Miljörisker
• Environmental risks
• Landspecifika risker med mera
• Country-specific risks etc.

Risks directly attributable to
business operations with a
potential impact on financial
position and performance.
• Legal risks
• Acquisition of new businesses
• Structural measures
• Availability and price fluctua-

tions of raw materials

• Customer dependence etc.

Financial risks with a potential
impact on financial position and
performance.
• Financing risks
• Currency risks
• Interest rate risks
• Financial credit risks
• Risks associated with pension

obligations

ASSA ABLOY AnnuAL repOrt 2009

SIGnIFICAnt rISkS AnD rISk mAnAGement

Significant risks and risk management

Operational risks

Risk management

Comments

Legal risks

The Group continuously monitors anticipated and
implemented changes in legislation in the coun-
tries in which it operates.

At the end of 2009 it was assessed that there are
no outstanding legal disputes that may lead to
significant costs for the Group.

A Group-wide legal policy has been implemented,
specifying the legal framework in which business
operations may be conducted.

Ongoing and potential disputes and other legal
matters are reported regularly to the Group’s cen-
tral legal function.

Guidelines on compliance with current competi-
tion legislation have been implemented.

Legal risks associated with property and liability
issues are continually evaluated together with
insurance company representatives.

Acquisition of
new businesses

Acquisitions are carried out by a number of peo-
ple with considerable acquisition experience and
with the support of for example legal and financial
consultants.

The Group’s acquisitions in 2009 are reported
in the Report of the Board of Directors and in
Note 30, Business combinations.

Acquisitions are carried out according to a uni-
form and predefined Group-wide process. This
consists of four documented phases: strategy,
evaluation, implementation and integration.

Restructuring measures

The Group is implementing spe-
cific restructuring programs,
which entail some production
units changing focus mainly to
final assembly while certain
units are closed.

The restructuring programs are carried on as a
series of projects with stipulated activities and
schedules.

The scope, costs and savings of the restructuring
programs are presented in more detail in the
Report of the Board of Directors.

The various projects are systematically monitored
on a regular basis.

Price fluctuations and
availability of raw materials

Raw materials are purchased and handled primar-
ily at division and business-unit level.

For further information about procurement of
materials, see Note 7.

Regional committees coordinate these activities
with the help of senior coordinators for selected
material components.

Credit losses

Insurance risks

Accounts receivable are spread across a large
number of customers in many markets.

Commercial credit risks are managed locally at
company level and reviewed at division level.

Receivables from each customer are relatively
small in relation to total accounts receivable.
The risk of significant credit losses for the Group
is considered to be limited.

A Group-wide insurance program is in place,
mainly relating to property, business interruption,
and liability risks. The insurance program covers
all business units.

The Group’s insurance cover is considered to
be generally adequate, providing a reasonable
balance between assessed risk exposure and
insurance costs.

The Group’s exposure to the risk areas listed
above is regulated by means of its own captive
reinsurance company.

Risks relating to internal
control regarding
financial reporting

The organization is considered to be relatively
transparent, with a clear allocation of responsibili-
ties.

Internal control and other related issues are
reported in more detail in the Corporate
governance report.

Instructions about the allocation of responsibili-
ties, authorization and other internal control
procedures are laid down in an internal control
manual.

Compliance with internal control is evaluated
annually for all operating companies in the form
of self assessment and via the Group’s Manage-
ment Assurance function.

Risks relating to
financial reporting

A well-established Controller organization at both
division and Group level analyzes and monitors
financial reporting quality.

See also the section ‘Basis of preparation’ in
Note 1.

A comprehensive systematic risk assessment of
financial reporting is carried out regularly.

Further information about risk management relat-
ing to financial reporting can be found in the
Corporate governance report.

58 SIGnIFICAnt rISkS AnD rISk mAnAGement

ASSA ABLOY AnnuAL repOrt 2009

A financial policy, which is updated annually and approved
by the Board, regulates the allocation of responsibilities and
control of the Group’s financing activities. Group Treasury
has the main responsibility for financial risks within the
framework established in the financial policy. A large num-
ber of financial instruments are used in this work. Account-
ing principles, risk management and risk exposure are
described in more detail in Notes 1 and 33, as well as Note
24 regarding pension obligations.

The Group’s financial risks mainly comprise financing
risk, currency risk, interest rate risk, credit risk, and risks asso-
ciated with the Group’s pension obligations.

Financing risk
Financing risk refers to the risk that financing the Group’s
capital requirements and refinancing outstanding loans
become more difficult or more expensive. Financing risk can
be reduced by maintaining an even maturity profile for loans
and by maintaining a high credit rating. The risk is further
reduced by substantial unused confirmed credit facilities.

Currency risk
Since ASSA ABLOY sells its products in countries worldwide
and has companies in over 60 countries, the Group is
exposed to the effects of exchange rate fluctuations. Such
changes affect Group earnings when the income statements
of foreign subsidiaries are translated to Swedish kronor
(translation exposure), and when products are exported
and sold in countries outside the country of production
(transaction exposure). Translation exposure is primarily
related to earnings in USD and EUR. This type of exposure is
not hedged. Currency risk in the form of transaction expo-
sure, i.e. the relative values of exports and imports of goods,
is fairly limited in the Group, though it is expected to
increase over time due to efficiency measures in production
and purchasing. In accordance with financial policy, the
Group only hedged a limited part of current currency flows
in 2009. As a result exchange rate fluctuations had a direct
impact on business operations.

Exchange rate fluctuations also affect the Group’s liabili-
ties and equity. The difference between the assets and liabil-
ities of foreign subsidiaries in the respective foreign cur-
rency is affected by exchange rate fluctuations and causes a
translation difference which affects the Group’s compre-
hensive income. A general weakening of the Swedish krona

leads to an increase in net debt, but at the same time
increases Group equity. At year-end, the largest foreign net
assets were denominated in USD and EUR.

Interest rate risk
With respect to interest rate risks, interest rate changes have
a direct impact on ASSA ABLOY’s net interest expense. The
net interest expense is also impacted by the size of the
Group’s net debt and its currency composition. Net debt
was SEK 11,048 M (14,013) at the end of 2009 and was
mainly denominated in SEK, USD and EUR. Group Treasury
analyzes the Group’s interest rate exposure and calculates
the impact on income of interest rate changes on a rolling
12-month basis. In addition to raising fixed-rate and vari-
able-rate loans, various interest rate derivatives are used to
adjust interest rate sensitivity. At year-end, the average fixed
interest term, excluding pension liabilities, was around 26
months (23).

Credit risk
Credit risk arises in ordinary business operations and as a
result of the financial transactions carried out by Group Trea-
sury. Accounts receivable are spread across a large number
of customers, which reduces the credit risk. Credit risks
relating to operational business activities are managed
locally at company level and reviewed at division level.

Financial risk management exposes ASSA ABLOY to cer-
tain counterparty risks. Such exposure may arise, for exam-
ple, as a result of the placement of surplus cash, borrowing
and derivative financial instruments. Counterparty limits are
set for each financial counterparty and continuously moni-
tored.

Pension obligations
At the end of 2009, ASSA ABLOY had obligations for pen-
sions and other post-employment benefits of SEK 4,696 M
(3,963). The Group manages pension assets valued at SEK
2,817 M (2,604). Pension provisions in the balance sheet
amount to SEK 1,118 M (1,182). Changes in the value of
assets and liabilities from year to year are due partly to
trends on equity and debt capital markets, and partly to the
actuarial assumptions made. These assumptions include dis-
count rates, as well as anticipated inflation and salary
increases.

ASSA ABLOY AnnuAL repOrt 2009

SIGnIFICAnt rISkS AnD rISk mAnAGement

Sales and earnings

•
•

•

Organic growth for comparable units was –12 percent (0), while acquired growth was 3 percent (4).
Operating income (EBIT) excluding restructuring costs and non-recurring costs fell by 2 percent to
SEK 5,413 M (5,526), equivalent to an operating margin of 15.5 percent (15.9).
Earnings per share after full dilution excluding restructuring costs and non-recurring costs amounted
to SEK 9.22 (9.21).

Sales
The Group’s sales increased to SEK 34,963 M (34,829).
Exchange-rate effects had a positive impact of
SEK 3,491 M (16).

Restructuring costs of SEK 1,039 M (1,180) had a nega-
tive impact on operating income for the year. Including
these items, operating income (EBIT) amounted to SEK
4,374 M (4,269) and the corresponding margin was 12.5 per-
cent (12.3).

Change in sales
%

Organic growth
Acquired growth
Exchange-rate effects

Total

2008

2009

0
4
0

–12
3
9

Restructuring costs
Total restructuring costs amounted to SEK 1,039 M (1,180),
of which impairment of assets, mainly machinery and equip-
ment, accounted for SEK 124 M (141).

The remaining portion mainly relates to payments in

connection with staff redundancies.

The total change in sales for 2009 was 0 percent (4). Organic
growth for comparable units accounted for –12 percent
(0), while acquired units made a positive contribution of 3
percent (4).

Sales by product group
Mechanical locks, lock systems and accessories accounted for
45 percent (46) of sales. Sales of electromechanical and elec-
tronic locks rose to 35 percent (34), while security doors and
fittings accounted for 20 percent (20) of sales.

Cost structure
Total wage costs, including social security expenses and
pension expenses, amounted to SEK 10,133 M (10,016), cor-
responding to 29 percent (29) of sales. The average number
of employees was 29,375 (32,723). The average number of
employees in the Parent company was 94 (101).

The Group’s material costs were relatively unchanged

and totaled SEK 11,346 M (11,329), corresponding to
32 percent (32) of sales.

Other purchasing costs totaled SEK 6,985 M (7,083), cor-

responding to 20 percent (20) of sales.

Income before tax
Income before tax excluding restructuring costs and non-
recurring costs totaled SEK 4,779 M (4,756). The exchange-
rate effect amounted to SEK 598 M (–14). Net financial items
amounted to SEK –634 M (–770). This reduction was mainly
attributable to lower interest rates and net debt than in
2008. Profit margin – defined as income before tax in rela-
tion to sales – was 13.7 percent (13.7) excluding restructur-
ing costs and non-recurring costs.

The Parent company’s income before tax was SEK 1,694 M

(1,589).

Tax
The Group’s tax expense totaled SEK 1,081 M (1,061), corre-
sponding to an effective tax rate of 29 percent (30).
The year’s restructuring program had an impact of 2 per-
centage points (3) on the effective tax rate for the year, due
to the fact that deferred tax was not factored into certain
restructuring costs. The effective tax rate, excluding restruc-
turing effects, was 27 percent (27) of income before tax.

Depreciation and amortization of non-current assets
amounted to SEK 1,014 M (921), corresponding to 3 per-
cent (3) of sales.

Earnings per share
Earnings per share after full dilution excluding restructuring
costs and non-recurring costs amounted to SEK 9.22 (9.21).

Operating income
Operating income (EBIT) excluding restructuring costs and
non-recurring costs amounted to SEK 5,413 M (5,526) after
positive exchange-rate effects of SEK 643 M (5). The corre-
sponding operating margin was 15.5 percent (15.9).

Operating income before depreciation and amortization

(EBITDA) excluding restructuring costs and non-recurring
costs amounted to SEK 6,426 M (6,447). The corresponding
margin was 18.4 percent (18.5).

Omsättning och rörelseresultat

Sales and operating income

SEK M

36,000

30,000

24,000

18,000

12,000

6,000

08 09

SEK M

6,000

5,000

4,000

3,000

2,000

1,000

 Sales

Operating income1

1 Excluding items affecting
1 Excluding items affecting
compa rability 2006,
comparability 2006, 2008
2008 and 2009.
and 2009.

FinAnciAL repOrtS

ASSA ABLOY AnnuAL repOrt 2009

income statement – Group
and Statement of comprehensive income

Income statement, SEK M

Sales
Cost of goods sold

Gross income

Selling expenses
Administrative expenses
Research and Development costs
Other operating income and expenses
Share of earnings in associates

Operating income

Financial income
Financial expenses

Income before tax

Tax on income

Net income

Net income attributable to:

Parent company shareholders
Minority interest

Earnings per share

Note

2, 34
34

34
3, 34
34
4
5

6–9, 32

10
9, 11

before dilution, SEK
after dilution, SEK
after dilution and excluding items affecting comparability, SEK

13
13
13

Statement of comprehensive income, SEK M

Profit for the year

Other comprehensive income

Exchange rate differences on translating foreign operations

Total comprehensive income

Total comprehensive income attributable to:

Parent company shareholders
Minority interest

1 Reclassification has been performed, see Note 34.

20081

34,829
–21,843

12,986

–5,718
–2,067
–901
–43
12

4,269

47
–817

3,499

–1,061

2,438

2,413
25

6.60
6.55
9.21

2008

2,438

2,131

4,569

4,525
44

2009

34,963
–21,780

13,183

–5,836
–1,915
–920
–150
12

4,374

130
–764

3,740

–1,081

2,659

2,626
32

7.18
7.06
9.22

2009

2,659

–826

1,833

1,814
19

Sales by product group, 2009
Omsättning per produktgrupp, 2009

Vinst per aktie efter skatt och utspädning

Earnings per share after tax and dilution

 Mechanical locks, lock systems
and assessories, 45% (46)
 Electromechanical and

electronic locks, 35% (34)

 Security doors and
fittings, 20% (20)

SEK

 Earnings per share

after tax and dilution1

08 09

1 Excluding items affecting
compa rability 2006, 2008
and 2009.

ASSA ABLOY AnnuAL repOrt 2009

FinAnciAL repOrtS

comments by division

ASSA ABLOY is organized into five divisions. The three divisions EMEA (Europe, Middle East and Africa), Americas
(North and South America) and Asia Pacific (Asia, Australia and New Zealand) manufacture and sell mechanical
and electromechanical locks, security doors and fittings in their respective geographical markets. Global
Technologies division operates worldwide in the product areas of access control systems, secure issuance of
cards, identification technology and hotel locks. Entrance Systems division is a global supplier of automatic
doors and service.

EMEA
Sales totaled SEK 13,601 M (13,927), with organic growth of
–12 percent (–2). Acquired units contributed 3 percent (4)
to sales. Operating income excluding restructuring costs
and non-recurring costs amounted to SEK 2,056 M (2,289),
with an operating margin (EBIT) of 15.1 percent (16.4).
Return on capital employed excluding restructuring costs
and non-recurring costs was 16.9 percent (19.9). Operating
cash flow before interest paid amounted to SEK 2,850 M
(2,421).

The downturn in the housing and commercial construc-
tion markets in important market regions led to a decline in
the division’s sales. Initiatives to further increase efficiency
and savings from ongoing restructuring programs largely
offset the negative impact on the operating margin of
reduced sales.

Americas
Sales totaled SEK 9,880 M (10,456), with organic growth
of –19 percent (4). Acquired units contributed 2 percent
(2) to sales. Operating income excluding restructuring
costs amounted to SEK 1,925 M (2,101), with an operat-
ing margin (EBIT) of 19.5 percent (20.1). Return on capital
employed excluding restructuring costs was 20.5 percent
(24.5). Operating cash flow before interest paid amounted
to SEK 2,677 M (2,097).

The market downturn in the North American market
had a negative impact on sales volumes during the year. The
operating margin could, however, be maintained at a high
level thanks to continued active marketing and efficient
production.

Asia Pacific
Sales totaled 3,789 SEK M (3,321), with organic growth of
–1 percent (0). Acquired units contributed 5 percent net
(20) to sales. Operating income excluding restructuring
costs amounted to SEK 459 M (357), with an operating
margin (EBIT) of 12.1 percent (10.8). Return on capital
employed excluding restructuring costs was 16.1 percent
(13.2). Operating cash flow before interest paid amounted
to SEK 610 M (460).

Sales by comparable units were stable for the full year.
Market trends were, however, negative in the first part of the
year, but there was a return to positive growth figures later
in the year. The operating margin and operating cash flow
strengthened compared with the previous year.

Global Technologies
Sales totaled SEK 4,766 M (4,866), with organic growth of
–12 percent (0). No acquisitions were made during the year.
Operating income excluding restructuring costs amounted
to SEK 766 M (729), with an operating margin (EBIT) of
16.1 percent (15.0). Return on capital employed excluding
restructuring costs was 12.9 percent (12.7). Operating cash
flow before interest paid amounted to SEK 1,005 M (627).
The HID Global business unit and the ASSA ABLOY Hos-
pitality business unit both showed negative organic growth,
but continued to show strong margins thanks to active
efforts to improve efficiency.

Entrance Systems
Sales totaled SEK 3,733 M (3,173), with organic growth of
–3 percent (3). Acquired units contributed 12 percent (3)
to sales. Operating income excluding restructuring costs
amounted to SEK 587 M (453), with an operating margin
(EBIT) of 15.7 percent (14.3). Return on capital employed
excluding restructuring costs was 15.2 percent (13.8).
Operating cash flow before interest paid amounted to
SEK 680 M (399).

Demand from the retailing sector in the division’s larg-
est markets weakened during the year. However, increased
demand from healthcare and from growth markets largely
compensated for this trend. Operating margin and cash
flow showed very positive development.

Other
The costs of Group-wide functions, such as Group manage-
ment, accounting and finance, supply management and
central product development, amounted to SEK 380 M
(404). Elimination of sales between the Group’s segments is
included in ‘Other’.

External sales 2009
Omsättning , 2009

 EMEA, 38% (39)
 Americas, 28% (30)
 Asia Pacific, 10% (9)
 Global Technologies, 13% (14)
 Entrance Systems, 11% (9)

FinAnciAL repOrtS

ASSA ABLOY AnnuAL repOrt 2009

results by division

EMEA1

Americas2

Asia Pacific3

20087

2009

20087

2009

20087

2009

Global
Technologies4
2009

20087

Entrance
Systems

Other

Total

20087

2009

20087

2009

20087

2009

SEK M

Sales, external
Sales, internal

13,517
410

13,275
327

10,415
41

Sales
Organic growth
Share of earnings in associates

13,927 13,601 10,456
4%
–12%
9
4

–2%
3

9,831
49

9,880
–19%
8

3,031
290

3,321
0%
–

3,507
282

3,789
–1%
–

4,730
136

4,866
0%
–

4,664
102

4,766
–12%
–

3,134
39

3,173
3%
–

3,685
47

3,733
–3%
–

–
–915

–915
–
–

34,829

34,963

–
–807

–807 34,829 34,963
–12%
12

0%
12

–
–

Operating income (EBIT) excluding
items affecting comparability
Operating margin (EBIT) excluding
items affecting comparability
Items affecting comparability6

Operating income (EBIT)
Operating margin (EBIT)
Net financial items
Tax on income

Net income

Capital employed
– of which goodwill
– of which other intangible and

tangible assets

– of which shares in associates
Return on capital employed exclu-
ding items affecting comparability

Operating income (EBIT)
Restructuring costs
Depreciation
Investments in fixed assets
Sales of fixed assets
Change in working capital

Cash flow5

Adjustment for non-cash items
Paid and received interest

Operating cash-flow5

2,289

2,056

2,101

1,925

357

459

729

766

453

587

–404

–380

5,526

5,413

16.4%
–863

1,426
10.2%

15.1%
–789

1,267
9.3%

20.1%
–77

2,024
19.4%

19.5%
–

1,925
19.5%

10.8%
–65

293
8.8%

12.1%
–2

457
12.1%

15.0%
–149

580
11.9%

16.1%
–167

599
12.6%

14.3%
–103

350
11.0%

15.7%
–81

506
13.6%

–
–

–404
–

–380
–

15.9%
–1,257

4,269
12.3%
–770
–1,061

15.5%
–1,039

4,374
12.5%
–634
–1,081

2,438

2,659

12,306
5,766

3,450
31

9,814
5,540

3,097
39

9,639
6,236

1,944
2

8,687
6,003

1,757
–

2,768
1,628

2,768
1,536

914
5

933
–

6,112
4,275

1,282
–

5,464
4,030

1,138
–

207
–

485
–

3,425
2,763

4,116
3,223

–1,400
–

–467
–

32,850
20,669

30,382
20,333

19.9%

16.9%

24.5%

20.5%

13.2%

16.1%

12.7%

12.9%

13.8%

15.2%

1,426
786
455
–403
75
82

1,267
789
473
–358
77
602

2,024
77
205
–235
21
5

1,925
–
236
–138
4
649

2,421

2,850

2,097

2,677

293
65
80
–107
9
120

460

457
2
99
–90
10
132

610

580
149
136
–152
23
–64

672

599
167
156
–190
63
211

1,005

350
103
37
–37
6
–60

399

506
81
38
–41
8
88

680

148
–

–

–404
–
8
–29
–
–88

130
–

7,945
38

7,541
39

–

17.2%

16.2%

–380
–
11
–9
–
–222

4,269
1,180
921
–962
133
–5

4,374
1,039
1,014
–825
161
1,460

5,536

7,222

–49
–718

127
–507

–49
–718

127
–507

4,769

6,843

Average number of employees

11,903

10,138

8,573

6,897

7,065

7,560

2,811

2,416

2,260

2,253

111

112

32,723

29,375

1 Europe, Middle East and Africa.
2 North and South America.
3 Asia, Australia and New Zealand.
4 ASSA ABLOY Hospitality and HID

Global.

5 Excluding restructuring payments.
6 Items affecting comparability consist
of restructuring costs for 2008 and
2009. In 2008 items affecting com-
parability also includes non-recur-
ring costs related to EMEA and tota-
led SEK 77M.

7 Reclassification has been made for
2008. For further information see
Note 34.

The segments have been determined on the basis of report-
ing to the CEO, who monitors the overall performance and
makes decisions on resource allocation.

The breakdown of sales is based on customer sales in the
respective country. Sales between segments are carried out
at arm’s length.

The different segments obtain their revenue from the
manufacture and the sale of mechanical, electromechanical
and electronic locks, lock systems and accessories, and secu-
rity doors and fittings.

For further information on sales, please see Note 2.

Operating income, 20091,2
Rörelseresultat, 2009

Average number of employees, 2009
Medelantal anställda, 2009

 EMEA, 36% (38)
 Americas, 33% (36)
 Asia Pacific, 8% (6)
 Global Technologies, 13% (12)
 Entrance Systems, 10% (8)

1 Operating income excluding
items affecting compa rability.
2 ”Other” is not included in the
calculation. See section Com-
ments by division for what is
1 Rörelseresultat exklusive
included in ”Other”.
jämförelsestörande poster.
2 “Övrigt” ingår ej i beräkningen.
Se sidan 62 för vad som ingår i övrigt.

 EMEA, 35% (36)
 Americas, 23% (26)
 Asia Pacific, 26% (22)
 Global Technologies, 8% (9)
 Entrance Systems, 8% (7)

ASSA ABLOY AnnuAL repOrt 2009

FinAnciAL repOrtS

Financial position

•
•
•

Capital employed amounted to SEK 30,382 M (32,850).
A strong positive operating cash flow reduced net debt to SEK 11,048 M (14,013).
The net debt / equity ratio was 0.57 (0.74).

SEK M

Capital employed
– of which goodwill
Net debt
Equity
– of which minority interests

2008

32,850
20,669
14,013
18,838
163

2009

30,382
20,333
11,048
19,334
162

Capital employed
The Group’s capital employed – defined as total assets less
interest-bearing assets and non-interest-bearing liabilities
including deferred tax liabilities – amounted to SEK 30,382
M (32,850). The return on capital employed excluding
items affecting comparability was 16.2 percent (17.2).

Intangible assets amounted to SEK 22,324 M (22,662).

The reduction is mainly due to negative exchange-rate
effects exceeding the effects of acquisitions made. During
the year, goodwill and other intangible assets with an indefi-
nite useful life have arisen to a preliminary value of
SEK 800 M. A valuation model based on discounted future
cash flows is used for impairment testing of goodwill and
other intangible assets with an indefinite useful life.

Tangible assets amounted to SEK 5,550 M (5,952). Capi-
tal expenditure on tangible and intangible assets, less sales
of tangible and intangible assets, totaled SEK 664 M (829).
Depreciation amounted to SEK 1,014 M (921).

Accounts receivable totaled SEK 5,618 M (6,372) and
inventories totaled SEK 4,349 M (5,383). The average col-
lection period for accounts receivable was 55 days (52).
Material throughput time was 97 days (105). The Group is
making systematic efforts to increase capital efficiency.

Net debt
Net debt amounted to SEK 11,048 M (14,013), of which
pension commitments and other remuneration on termi-
nation of employment accounted for SEK 1,118 M (1,182).
Net debt was increased by acquisitions and the dividend to
shareholders and reduced by the continued strong positive
operating cash flow. The net reduction is mainly due to a
continued good earnings trend and a substantial release of
working capital.

External financing
The Group’s long-term loan financing mainly consists of
Private Placement Programs in the USA totaling USD 630 M
(630), GMTN-programs of SEK 3,292 M (0), Incentive Pro-

grams of EUR 138 M (138) and a bilateral bank loan of SEK
1,000 M (1,000).

During the year, long-term financing totaling

SEK 3,384 M was raised in the form of borrowing on the
capital market as follows:
•

Three bonds in SEK totaling SEK 850 M with a maturity
of 2 to 3 years.
One bond in NOK of NOK 350 M with a maturity of
7 years.
Two Private Placements in EUR of EUR 45 M and
EUR 150 M, both with a maturity of 5 years.

•

These replace long-term financing of SEK 2,601 M which
matured during the year, but have also replaced some
short-term financing in order to extend the maturity profile.
The Group’s short-term loan financing mainly consists of

two Commercial Paper Programs for a maximum of
USD 1,000 M (1,000) and SEK 5,000 M (5,000) respectively.
At year-end, SEK 632 M (3,215) of the Commercial Paper
Programs had been utilized. In addition, substantial credit
facilities are available, mainly in the form of a Multi-Cur-
rency Revolving Credit Facility for a maximum of
EUR 1,100 M (1,100), which was not utilized at year-end.

The interest coverage ratio, defined as income before tax
plus net interest, divided by net interest, was 7.2 (5.7). Fixed
interest terms were largely unchanged during the year, with
average terms of 25 months (23) at year-end.

Cash and cash equivalents amounted to SEK 2,235 M
(1,931) and are invested in banks with high credit ratings.

Some of the Group’s main financing agreements contain

a customary Change of Control clause. The effect of this
clause is that lenders have the right in certain circumstances
to demand the renegotiation of conditions or to terminate
the agreement should control of the company change. The
bonds issued during the year have been recognized in the
Parent company balance sheet.

Equity
The Group’s equity totaled SEK 19,334 M (18,838) at year-
end. The return on shareholders’ equity amounted to
12.7 percent (12.8). The equity ratio was 45.4 percent
(41.9). The debt / equity ratio, defined as net debt divided
by equity, was 0.57 (0.74).

Nettoskuldsättning

Net debt

Sysselsatta kapital & Avkastning på sysselsatt kapital

Capital employed and Return on capital employed

SEK M

15,000

12,000

9,000

6,000

3,000

 Net debt

Net debt / equity

SEK M

1.0

0.8

0.6

0.4

0.2

SEK M

36,000

30,000

24,000

18,000

12,000

6,000

08 09

 Capital employed �
Return on capital
employed1

1 Excluding items affecting
1 Excluding items affecting
comparability 2006, 2008
comparability 2006, 2008 and
2009.
and 2009.

FinAnciAL repOrtS

ASSA ABLOY AnnuAL repOrt 2009

Balance sheet – Group

SEK M

ASSETS
Non-current assets
Intangible assets
Tangible assets
Shares in associates
Other long-term financial assets
Deferred tax receivables

Total non-current assets

Current assets
Inventories
Accounts receivable
Current tax receivables
Other short-term receivables
Prepaid expenses and accrued income
Derivative financial instruments
Short-term investments
Cash and cash equivalents

Total current assets

TOTAL ASSETS

EQUITY AND LIABILITIES
Equity
Parent company's shareholders
Share capital
Other contributed capital
Exchange rate differences
Retained earnings

Minority interest

Total equity

Non-current liabilities
Long-term loans
Convertible debenture loans
Deferred tax liabilities
Pension provisions
Other long-term provisions
Other long-term liabilities

Total non-current liabilities

Current liabilities
Short-term loans
Convertible debenture loans
Derivative financial instruments
Accounts payable
Current tax liabilities
Short-term provisions
Other short-term liabilities
Accrued expenses and prepaid income

Total current liabilities

TOTAL EQUITY AND LIABILITIES

Note

2008

2009

14
15
17
19
18

20
21

33
33
33

33
33
18
24
25
33

33
33
33

25
26
27

22,662
5,952
38
317
757

29,726

5,383
6,372
249
479
485
277
58
1,931

15,234

44,960

366
8,887
1,572
7,850

18,675
163

18,838

6,248
1,518
56
1,182
1,453
151

22,324
5,550
39
334
814

29,061

4,349
5,618
231
541
399
100
84
2,235

13,557

42,618

366
8,887
760
9,159

19,172
162

19,334

9,263
1,429
63
1,118
1,829
176

10,608

13,878

6,400
1,096
92
2,909
377
787
729
3,124

15,514

44,960

1,869
–
32
2,682
324
726
895
2,878

9,406

42,618

ASSA ABLOY AnnuAL repOrt 2009

FinAnciAL repOrtS

cash flow

•
•

Operating cash flow amounted to SEK 6,843 M (4,769).
Change in working capital amounted to SEK 1,460 M (–5).

Operating cash flow

SEK M

Operating income (EBIT)
Restructuring costs
Depreciation
Net capital expenditure
Change in working capital
Interest paid and received
Adjustments for non-cash items

Operating cash flow1

Operating cash flow/
Income before tax

1 Excluding restructuring payments.
2 Excluding restructuring costs.

2008

4,269
1,180
921
–829
–5
–718
–49

4,769

1.022

2009

4,374
1,039
1,014
–664
1,460
–507
127

6,843

1.432

The Group’s operating cash flow amounted to SEK 6,843 M
(4,769), equivalent to 143 percent (102) of income before
tax excluding restructuring costs. The Parent company’s
cash flow amounted to SEK –1 M (1).

Net capital expenditure
Direct net capital expenditure on intangible and tangible
assets totaled SEK 664 M (829), equivalent to 65 percent
(90) of depreciation of intangible and tangible assets. The
low net capital expenditure is partly due to the Group’s
long-term efforts to streamline the production structure.

The material throughput time was 97 days (105) at year-end.
Capital tied up in inventories and accounts receivable fell
substantially during the year, increasing cash flow by a total of
SEK 1,793 M (–106). The reduced capital tied up in accounts
receivable is attributable to weaker sales during the year.

Relationship between cash flow from operating
activities and operating cash flow

SEK M

Cash flow from operating activities
Restructuring payments
Net capital expenditure
Reversal of tax paid

Operating cash flow

2008

4,369
485
–829
742

4,769

2009

5,924
676
–664
907

6,843

Acquisitions of subsidiaries
The total purchase price for acquisitions of subsidiaries
amounted to SEK 1,107 M (2,030). Acquired cash totaled
SEK 50 M (58).

Change in net debt
Net debt was mainly affected by the strong positive operat-
ing cash flow, the dividend to shareholders, acquisitions and
exchange-rate effects.

Change in working capital

SEK M

Inventories
Accounts receivable
Accounts payable
Other working capital

Change in working capital

2008

–144
38
–59
160

–5

2009

987
806
–232
–102

1,460

SEK M

Net debt at 1 January
Operating cash flow
Restructuring payments
Tax paid
Acquisitions/Disposals
Dividend
Exchange-rate differences

Net debt at 31 December

2008

12,953
–4,769
485
742
1,819
1,317
1,466

14,013

2009

14,013
–6,843
676
907
1,171
1,317
–193

11,048

Operativt kassaflöde och resultat före skatt

Income before tax and Operating cash flow

Investeringar
Capital expenditure

SEK M

7,000

6,000

5,000

4,000

3,000

2,000

1,000

 Income before tax1
 Operating cash flow

08 09

1 Excluding items affecting
1 Excluding items affecting comparability
comparability 2006, 2008
2006, 2008 and 2009.
and 2009.

SEK M

1,000

800

600

400

200

08 09

 Net capital
expenditure
 Depreciation
Net capital
expenditure
% of sales

2.5

2.0

1.5

1.0

0.5

0.0

FinAnciAL repOrtS

ASSA ABLOY AnnuAL repOrt 2009

cash flow statement – Group

Note

14, 15
14, 15
31
31
31

SEK M

OPERATING ACTIVITIES
Operating income
Depreciation
Reversal of restructuring costs
Restructuring payments
Non-cash items

Cash flow before interest and tax

Interest paid
Interest received
Tax paid on income

Cash flow before changes in working capital

Changes in working capital

Cash flow from operating activities

INVESTING ACTIVITIES
Investments in tangible and intangible assets
Sales of tangible and intangible assets
Investments in subsidiaries
Disposals of subsidiaries
Other investments

Cash flow from investing activities

FINANCING ACTIVITES
Dividends
Long-term loans raised
Repayment of originally long-term loans
Net cash effect of changes in other borrowings

Cash flow from financing activities

CASH FLOW

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

2008

4,269
921
1,180
– 485
– 49

5,836

–732
14
–742

4,376

–5

4,369

–962
133
–1,831
–
12

–2,648

–1,317
1,000
–
–994

–1,311

410

1,338
410
183

1,931

2009

4,374
1,014
1,039
–676
127

5,878

–596
89
–907

4,464

1,460

5,924

–825
161
–1,077
–71
–23

–1,835

–1,317
3,384
–2,601
–3,207

– 3,741

348

1,931
348
–44

2,235

ASSA ABLOY AnnuAL repOrt 2009

FinAnciAL repOrtS

changes in equity – Group

SEK M

Opening balance 1 January 2008

Total comprehensive income
Dividend for 2007
Minority interest, net

Closing balance 31 December 2008

Opening balance 1 January 2009

Total comprehensive income
Dividend for 2008
Minority interest, net

Closing balance 31 December 2009

Parent company's shareholders

Note

Share
capital

Other contri-
buted capital

366

8,887

Exchange
rate
differences

–540

2,112

Retained
earnings

Minority
interests

6,754

2,413
–1,317

366

8,887

1,572

7,850

366

8,887

1,572

–812

7,850

2,626
–1,317

366

8,887

760

9,159

Total

15,668

4,569
–1,317
–82

18,838

1,833
–1,317
–20

19,334

201

–82

163

–20

162

Shareholders’ equity per share after dilution and
Eget kapital per aktie efter utspädning
Return on shareholders’ equity after tax

Dividend

Utdelning

SEK

 Shareholders’ equity per
share after dilution, SEK
 Return on shareholders’
equity after tax, %

SEK

 Dividend per share
 Earnings per share

after tax and dilution1

08 09

1 Excluding items affec-

ting comparability 2006,
2008 and 2009.

FinAnciAL repOrtS

ASSA ABLOY AnnuAL repOrt 2009

Smilow cancer Hospital

the Smilow cancer Hospital at Yale-new Haven located in
new Haven, connecticut, uSA opened with a simple mis-
sion – bring together the very best medical professionals
and researchers to develop new methods to prevent, diag-
nose and treat cancer – all while attending to the needs of
patients within a holistic, nurturing environment.
While designing the facility, architects, health care and
design professionals collaborated to create a setting where
patients can best focus on their treatment and path to well-
ness and healing. throughout the fourteen-story building,
aesthetically focused touches blend with the functional
needs of the space. Special features include a roof-top
healing garden complete with trees and a small stream.
throughout the garden, benches invite patients to sit and

enjoy the views of the city and the coastline. Additionally,
the hospital’s two-story glass lobby welcomes patients and
visitors with a granite waterfall.

the building’s calming environment is enhanced by the
sense of safety and security the hospital achieved with local
solutions provider ASSA ABLOY Door Security Solutions. A
complete door opening package including frames, doors
and hardware from curries, McKinney, rixson, rockwood
and Sargent was supplied.

electromechanical exit devices help ease the opening and
closing of some doors, while others are equipped with pivots
and door pulls to fulfill the design intent of providing patients
with a beautiful worry-free environment in which to heal.

ASSA ABLOY AnnuAL repOrt 2009

FinAnciAL repOrtS

parent company financial statements

Income statement
– Parent company

SEK M

Administrative expenses
Research and Development costs
Other operating income and expenses

Balance sheet
– Parent company

Operating income

Financial income
Financial expenses

Income before tax

Tax on income

Net income

SEK M

ASSETS
Non-current assets
Intangible assets
Tangible assets
Shares in subsidiaries
Receivables from subsidiaries
Other long-term financial assets

Total non-current assets

Current assets
Receivables from subsidiaries
Other short-term receivables
Prepaid expenses and accrued income
Cash and cash equivalents

Total current assets

TOTAL ASSETS

EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital
Statutory reserve
Fair value reserve
Unrestricted equity
Retained earnings
Net income

Total equity

Provisions
Other provisions

Total provisions

Non-current liabilities
Long-term loans
Convertible debenture loans
Long-term loans to subsidiaries
Other long-term liabilities

Total non-current liabilities

Current liabilities
Short-term loans
Convertible debenture loans
Accounts payable
Short-term liabilities to subsidiaries
Current tax liabilities
Other short-term liabilities
Accrued expenses and prepaid income

Total current liabilities

TOTAL EQUITY AND LIABILITIES

Assets pledged

Contingent liabilities

Note

3, 6, 8, 9
6, 8, 9
4

9, 32

10
9, 11

2008

–554
–229
1,775

992

1,443
–846

1,589

–435

1,154

2009

–610
–222
1,398

566

1,365
–237

1,694

–158

1,536

Note

2008

2009

14
15
16

33
33

506
4
16,061
2,624
79

19,274

15,268
36
24
1

15,329

34,603

366
8,905
408

2,943
1,154

13,776

1,000
1,517
2,624
4

5,145

2,224
1,096
18
12,123
31
16
116

15,624

34,603

None

8,501

321
3
19,115
–
34

19,473

4,118
28
30
0

4,176

23,649

366
8,905
–

2,343
1,536

13,150

4,291
1,429
–
–

5,720

681
–
20
3,906
16
6
145

4,774

23,649

None

7,472

FinAnciAL repOrtS

ASSA ABLOY AnnuAL repOrt 2009

Cash flow statement
– Parent company

SEK M

OPERATING ACTIVITIES
Operating income
Depreciation

Cash flow before interest and tax

Paid and received interest
Dividends received
Tax paid and received

Cash flow before changes in working capital

Changes in working capital

Cash flow from operating activities

INVESTING ACTIVITIES
Investment in tangible and intangible assets
Sales of tangible and intangible assets
Investments in subsidiaries
Other investments

Cash flow from investing activities

FINANCING ACTIVITIES
Dividends
Loans raised
Loans repaid

Cash flow from financing activities

CASH FLOW

CASH AND CASH EQUIVALENTS
Cash and cash equivalents at 1 January
Cash flow

Cash and cash equivalents at 31 December

Note

2008

992
188

1,180

160
555
20

1,915

–819

1,096

0
0
–1,560
0

–1,560

–1,317
2,450
–668

465

0
1

2009

566
183

749

45
898
–29

1,663

–4

1,659

–1
4
–1,439
23

–1,413

–1,317
5,859
–4,789

–247

–1

1
–1

Change in equity
– Parent company

SEK M

Opening balance 1 January 2008

Changes in value of financial instruments
Group contributions
Tax effect of Group contributions
Net income from the income statement
Dividend for 2007

Closing balance 31 December 2008

Opening balance 1 January 2009

Changes in value of financial instruments
Group contributions
Tax effect of Group contributions
Net income from the income statement
Dividend for 2008

Closing balance 31 December 2009

Restricted shareholders’ equity

Share
capital

366

Statutory
reserve

8,905

Fair value
reserve

142

266

366

8,905

408

366

8,905

408

–408

366

8,905

–

Unrestricted
shareholders’ equity

Retained
earnings

5,340

–1,500
420
1,154
–1,317

4,097

–594
157
1,536
–1,317

3,879

Total

14,753

266
–1,500
420
1,154
–1,317

13,776

–408
–594
157
1,536
–1,317

13,150

Note

ASSA ABLOY AnnuAL repOrt 2009

FinAnciAL repOrtS

notes

Note 1 Significant accounting and
valuation principles

The Group
ASSA ABLOY applies International Financial Reporting Stan-
dards (IFRS) as endorsed by the European Union (EU), the
Swedish Annual Accounts Act and standard RFR 1.2 of the
Swedish Financial Reporting Board. The accounting prin-
ciples are based on IFRS as endorsed by 31 December 2009
and have been applied to all years presented, unless stated
otherwise. This Note describes the most significant account-
ing principles that have been applied in the preparation
of the financial reports, which comprise the information
appearing on pages 54–104.

Basis of preparation
ASSA ABLOY’s consolidated financial statements have been
prepared in accordance with IFRS as endorsed by the EU.
The consolidated financial statements have been prepared
under the historical cost convention, except regarding
financial assets and liabilities (including derivatives) at fair
value through profit and loss.

The preparation of financial statements is based on esti-
mates and assumptions made for accounting purposes. The
management also makes judgments about the application
of the Group’s accounting principles. Estimates and assump-
tions may affect the income statement and balance sheet as
well as the supplementary information that appears in the
financial reports. Thus changes in estimates and assump-
tions may lead to changes in the financial statements.

For example, estimates and assumptions play an im-
portant part in the valuation of items such as identifiable
assets and liabilities in acquisitions, impairment testing of
goodwill and other assets, the fixing of actuarial assump-
tions for calculating employee benefits and other types of
provisions as well as the valuation of deferred taxes. Esti-
mates and assumptions are continually reassessed and are
based on a combination of historical experience and reason-
able expectations about the future.

The Group considers that estimates and assumptions

relating to impairment testing of goodwill and other in -
tangible assets with indefinite useful life are of significant
importance to the consolidated financial statements. The
Group tests carrying amounts for impairment on an annual
basis. The recoverable amounts of Cash Generating Units
are established by calculating their values in use. The calcu-
lations are based on certain assumptions about the future
which, for the Group, are associated with risks of material
adjustments in reported amounts during the next financial
year. Major assumptions and the effects of likely changes to
them are described in Note 14.

•

IAS 1 Presentation of financial statements. The revised
standard requires ’non-owner changes in equity’ to be
presented separately from owner changes in equity in a
statement of comprehensive income. Comparative infor-
mation has been re-presented so that it is in conformity
with the revised standard. As the change in accounting
policy only impacts the presentation, there is no impact
on earnings per share.
IFRS 8 Operating segments. Operating segments are
reported in accordance with management reporting, as
presented to the chief operating decision maker. IFRS 8
has not affected the division of segments, and the Group
presents the same segments as before. The new standard
affects disclosures by segment.
IAS 23 Borrowing costs. Borrowing costs directly related
to acquisition, construction or production of a qualified
asset (an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale) are capi-
talized as part of the cost of that asset, in the case first
time of capitalisation was on the 1 st of January 2009 or
later. Comparative information has therefore not been
restated. The new standard had an insignificant effect on
the Group when it started to be applied.

New and amended standards not yet effective
The following new IFRS and amendments to current IFRS
have been published but are not yet effective, and have not
been applied in the preparation of the financial reports.
•

IFRS 3 Business combinations (revised), effective from
1 July 2009.
IAS 27 Consolidated and Separate Financial Statements,
effective from 1 July 2009.
IFRIC 17, Distribution of Non -Cash Assets to owners,
effective from 1 July 2009.
IFRS 2 Group cash-settled and share based payment tran-
sactions (revised) effective from 1 July 2009, not yet
endorsed by EU.
IAS 32 Classification of Right Issues (amendment) effec-
tive from 1 February 2009.
IASB’s yearly (annual) improvement project, effective
from 1 January 2010, not yet endorsed by EU.
IFRS 9 Financial instruments, effective from 1 January
2013, not yet endorsed by EU.
IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments, effective from 1 July 2010, not yet endorsed
by EU.
IAS 24 Related party disclosures, effective from 1 January
2011, not yet endorsed by EU.
IFRIC 14 Prepayments of a Minimum Funding require-
ments, effective from 1 January 2011, not yet endorsed
by EU.

•

New and changed standards that are applied by the Group
The Group has applied the following new and changed IFRS
from the 1 of January 2009.
•

IFRS 7 Financial instruments – Disclosures (amendment).
The amendment requires enhanced disclosures about fair
value measurement and liquidity risk. In particular, the
amendment requires disclosure of fair value measure-
ments by level in a fair value measurement hierarchy. As
the change in accounting policy only results in additional
disclosures, there is no impact on earnings per share.

Management analyzes the impact of the new and amended
standards on the financial reports. The amendments to IFRS
3 and IAS 27 are considered most relevant to the Group.
These changes may have some impact on the Group’s finan-
cial reports. The changes will not affect the financial reports
prepared prior to the effective dates. The amendments to
IAS 27 will have an impact on the accounting for minority
interest in future transactions. IFRS 3 will affect the account-
ing of future business combinations regarding transaction
costs, contingent consideration and business combinations

nOteS

ASSA ABLOY AnnuAL repOrt 2009

note 1 cont.

Associates
Associates are defined as companies which are not sub-
sidiaries but in which the Group has a significant, but not a
controlling, interest. This is usually taken to be companies
where the Group’s shareholding represents between 20
and 50 percent of the voting rights.

Participations in associates are accounted for in accor-

dance with the equity method. In the consolidated bal-
ance sheet, shareholdings in associates are reported at
cost, adjusted for participation in income after the date of
acquisition. Dividends from associates are reported as a
reduction in the carrying amount of the investment. Partici-
pations in the income of associates are reported in the con-
solidated income statement as part of operating income as
the investments are related to business operations.

Segment reporting
Operating segments are reported in accordance with
management reporting reported to chief operating deci-
sion maker. Chief operating decision maker is the function
that is responsible for allocation of resources and assessing
performance of the operating segments. The divisions form
the operational structure for internal control and report-
ing and also constitute the Group’s segments for external
financial reporting. The Group’s business is divided into
five divisions. Three divisions are based on products sold
in local markets in the respective division: EMEA, Americas
and Asia Pacific. Global Technologies’ and Entrance Systems’
products are sold worldwide.

Foreign currency translation
Functional currency corresponds to local currency in each
country where Group companies operate. Transactions in
foreign currencies are translated to functional currency by
application of the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses aris-
ing from the settlement of such transactions are normally
reported in the income statement, as are those arising from
translation of monetary balances in foreign currencies at
the closing-day rate. Exceptions are transactions relating to
qualifying cash flow hedges, which are reported in compre-
hensive income. Receivables and liabilities are valued at the
closing-day rate.

In translating the accounts of foreign subsidiaries
prepared in functional currencies other than the Group’s
presentation currency, all balance sheet items except net
income are translated at the closing-day rate and net income
is translated at the average rate. The income statement is
translated at the average rate for the period. Exchange-rate
differences arising from the translation of foreign subsidiar-
ies are reported as translation differences in comprehensive
income.

The rates for currencies used in the Group, relative to the

Group’s presentation currency (SEK), were as follows – the
weighted average for the year, and the closing-day rate.

achieved in stages. Transaction costs related to ongoing
acquisitions have been reported as assets up to the 31 of
December 2009. In other respects, it is currently assessed
that none of the new and amended standards listed above
will have a significant impact on the Group’s financial state-
ments.

Reclassification
The Group has made a reclassification that affects direct
distribution costs and depreciation on capitalized product
development expenditure. The reason is to give a true and
fair view of the allocation between direct and indirect costs
as well as for product development expenses. In order to
maintain comparability, the financial statements for 2008
and 2009 have been adjusted. The reclassification involves
the transfer of direct distribution costs from Selling expenses
and Administrative expenses, and where appropriate from
Sales, to Cost of goods sold. In addition, depreciation on
product development has been moved from Cost of goods
sold to Selling expenses and Administrative expenses. Both
these adjustments affect Gross income. The effect is shown in
Note 34. Operating income is not affected.

Consolidated financial statements
The consolidated financial statements cover ASSA ABLOY AB
(the Parent company) and companies in which the Parent
company held, directly or indirectly, more than 50 percent of
the voting rights at the end of the period, as well as companies
in which the Parent company exercises control by some other
means, for example by having the power to govern financial
and operating policies. Companies acquired during the year
are included in the consolidated financial statements with
effect from the date when control was obtained. Companies
sold during the year are included in the consolidated financial
statements up to the date when control ceased.

The consolidated financial statements have been pre-

pared in accordance with the purchase method, which
means that the cost of acquisition of shares in subsidiaries
is eliminated against their equity at the time of acquisition.
In this context, equity in subsidiaries is determined on the
basis of the fair value of assets, liabilities and contingent
liabilities at the date of acquisition. Thus only that part of
subsidiaries’ equity that has arisen after the acquisition
is included in the Group’s equity. A positive difference
between the cost of acquisition and the fair value of the
Group’s share of acquired net assets is reported as goodwill.
A negative difference, negative goodwill, is recognized
immediately in the income statement.

Intra-group trans actions and balance sheet items and
unrealized profits on transactions between Group compa-
nies are eliminated in the Group financial statements.

Minority interests
Minority interests are based on subsidiaries’ accounts
with application of fair value adjustments resulting from
completed acquisition analysis. Minority participations in
subsidiaries’ income are reported in the income statement
with net income divided between the Parent company’s
shareholders and minority interests. Minority participations
in subsidiaries’ equity are reported as a separate item in the
Group’s equity. Transactions with minority shareholders are
accounted for as third-party transactions.

ASSA ABLOY AnnuAL repOrt 2009

nOteS

note 1 cont.

Country

Argentina
Australia
Brazil
Canada
Switzerland
Chile
China
Czech Republic
Denmark
Estonia
Euro zone
United Kingdom
Hong Kong
Hungary
Israel
Kenya
Korea
Lithuania
Mexico
Malaysia
Norway
New Zealand
Poland
Russia
Singapore
Slovenia
Slovakia
Thailand
USA
South Africa

Average rate

Closing-day rate

Cur-
rency

2008

2009

2008

2009

ARS
AUD
BRL
CAD
CHF
CLP
CNY
CZK
DKK
EEK
EUR
GBP
HKD
HUF
ILS
KES

2.08
5.55
3.62
6.20
6.11
0.012
0.94
0.38
1.29
0.62
9.65
12.11
0.85
0.039
1.83
0.095
KRW 0.0060
2.80
0.59
1.98
1.17
4.66
2.74
0.26
4.65
0.039
0.31
0.20
6.59
0.81

LTL
MXN
MYR
NOK
NZD
PLN
RUB
SGD
SIT
SKK
THB
USD
ZAR

2.06
5.98
3.80
6.68
7.05
0.014
1.12
0.40
1.43
0.68
10.63
11.85
0.99
0.038
1.95
0.099
0.0060
3.08
0.56
2.17
1.21
4.80
2.46
0.24
5.25
–
–
0.22
7.63
0.92

2.25
5.38
3.26
6.30
7.37
0.012
1.14
0.41
1.47
0.70
10.96
11.27
1.00
0.041
2.02
0.099
0.0062
3.17
0.57
2.22
1.11
4.53
2.64
0.26
5.39
0.038
0.36
0.22
7.78
0.82

1.88
6.42
4.13
6.86
6.94
0.014
1.05
0.39
1.39
0.66
10.32
11.44
0.93
0.038
1.89
0.095
0.0062
2.99
0.55
2.10
1.24
5.15
2.50
0.24
5.12
–
–
0.22
7.19
0.97

Revenue
Revenue comprises the fair value of goods sold, excluding
VAT and discounts and after eliminating intra-group sales.
The Group’s sales revenue arises principally from sales of
products. Service related to products sold makes up a very
limited fraction of revenue. Revenue from sales of the Group’s
products is recognized when all significant risks and rewards
associated with ownership are transferred to the purchaser in
accordance with applicable conditions of sale, which is nor-
mally upon delivery. If the product requires installation at the
customer’s premises, revenue is recognized when installation
is completed. Revenue from service contracts is recognized
through distribution over the contract period. In the case of
installations over a longer period of time, the percentage of
completion method is used.

Intra-group sales
Transactions between Group companies are carried out at
arm’s length and thus at market prices. Intra-group sales are
eliminated from the consolidated income statement, and
profits on such transactions have been eliminated in their
entirety.

Government grants
Grants and support from governments, public authorities
etc are reported when there is reasonable assurance that
the company will comply with the conditions attaching to
the grant and that the grant will be received. Grants related
to assets are handled by reducing the carrying amount of
the asset by the amount of the grant.

Research and development
Research costs are expensed as they are incurred. The costs
of development work are reported in the balance sheet
only to the extent that they are expected to generate future

economic benefits for the Group and provided such benefits
can be reliably measured. Development costs so reported
are amortized over the expected useful life.

Development costs recorded as assets but not yet in use
are subject to annual impairment testing. Costs for develop-
ment of existing products are expensed as they are incurred.

Borrowing costs
Borrowing cost are interest expenses and other expenses
directly related to borrowing. Borrowing costs directly
related to acquisition, construction or production of a
qualified asset (an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale) are
capitalized as part of the cost of that asset. Other borrowing
costs are recognized as expenses in the period in which they
are incured.

Tax on income
The income statement includes all tax that is to be paid or
received for the current year, adjustments relating to tax
due for previous years, and changes in deferred tax. Tax sums
have been calculated as nominal amounts in accordance
with the tax regulations in each country and in accordance
with tax rates that have either been decided or have been
notified and can confidently be expected to be confirmed.
For items reported in the income statement, associated tax
effects are also reported in the income statement. The tax
effects of items reported directly against equity or com-
prehensive income are themselves reported against equity
or comprehensive income. Deferred tax is accounted for
under the liability method. This means that deferred tax is
accounted for on all temp orary differences between the
carry ing amounts of assets and liabilities and their respec-
tive tax bases. Deferred tax receivables relating to tax losses
carried forward or other future tax allowances are reported
to the extent that it is probable that the allowance can be
set against taxable income in future taxation. Deferred tax
liabilities relating to temporary differences resulting from
investments in subsidiaries are not reported in the consoli-
dated financial statements since the Parent company can
control the time at which the temporary differences are can-
celled and it is not considered likely that such cancellation
will occur in the foreseeable future. Deferred tax receivables
and deferred tax liabilities are offset when there is a legal
right to do so and when the deferred tax amounts concern
the same tax authority.

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.

Cash and cash equivalents
‘Cash and cash equivalents’ covers cash and bank balances
and short-term financial investments with durations of less
than three months from the date of acquisition.

Goodwill and acquisition-related intangible assets
Goodwill represents the positive difference between the
cost of acquisition and the fair value of the Group’s share of
the acquired company’s net identifiable assets at the date of
acquisition, and is reported at cost less accumulated impair-
ment losses. Goodwill is allocated to Cash Generating Units
(CGU) and each year is systematically tested for impairment

nOteS

ASSA ABLOY AnnuAL repOrt 2009

note 1 cont.

using a valuation model based on discounted future cash
flows. Deferred tax receivables based on local tax rates are
reported in terms of tax-deductible goodwill (with corres-
ponding reduction of the goodwill value). Such deferred tax
receivables are expensed as the tax deduction is utilized.
Other acquisition-related intangible assets consist chiefly of
various types of intangible rights such as brands, technology
and customer relationships. Identifiable acquisition-related
intangible assets are initially recognized at fair value at the
date of acquisition and subsequently at cost less accumulated
amortization and impairment losses. Amortization is on a
straight-line basis over estimated useful life. Acquisition-
related intangible assets with indefinite useful life are tested
for impairment every year in the same way as goodwill.

Other intangible assets
An intangible asset that is not acquisition-related is
reported only if it is likely that the future economic benefits
associated with the asset will flow to the Group and if the
cost of the asset can be measured reliably. Such an asset is
initially recognized at cost and is amortized over its esti-
mated useful life, usually between three and five years. Its
carrying amount is cost less accumulated amortization and
impairment losses.

Tangible assets
Tangible assets are reported at cost less accumulated depre-
ciation and impairment losses. Cost includes expenditure
that can be directly attributed to the acquisition of the asset.
Subsequent expenditure is added to the carrying amount if
it is probable that economic benefits associated with it will
flow to the Group and if the cost can be reliably measured.
Expenditure on repairs and maintenance is expensed as it is
incurred. Depreciable amount is the cost of an asset less its
residual value. No depreciation is applied to land. For other
assets, cost is depreciated over estimated useful life, which
for the Group leads to the following depreciation periods
(on average):
•
•
•
•

office buildings, 50 years
industrial buildings, 25 years
machinery and other technical plant, 7–10 years
equipment and tools, 3–6 years.

An asset’s residual value and useful life are reviewed at each
financial year-end and adjusted when needed. Profit or
loss on the disposal of a tangible asset is recognized in the
income statement as ‘Other operating income’ or ‘Other
operating expenses’, based on the difference between the
selling price and the carrying amount.

Leasing
The Group’s leasing is chiefly operational leasing. The leasing
payments are expensed at a constant rate over the period of
the contract and are reported as operating costs.

Impairment
Assets with indefinite useful life are not amortized but are
tested for impairment on an annual basis. For impairment
testing purposes assets are grouped at the lowest organiza-
tional level where there are separate identifiable cash flows,
so-called Cash Generating Units (CGU).

For assets that are depreciated/amortized, impairment
testing is carried out when events or circumstances indicate
that the carrying amount may not be recoverable.

When impairment has been established, the value of the
asset is reduced to its recoverable amount. The recoverable
amount is the higher of the asset’s fair value less costs to sell,
and its value in use.

Inventories
Inventories are valued in accordance with the ‘first in, first
out’ principle at the lower of cost and net realizable value at
year-end. Deductions are made for internal profits arising
from deliveries between Group companies. Work in prog-
ress and finished goods include both direct costs incurred
and a fair allocation of indirect manufacturing costs.

Accounts receivable
Accounts receivable are recognized initially at fair value and
subsequently measured at amortized cost using the effec-
tive interest method. A provision is recognized when there is
objective evidence that the Group will not be able to collect
recorded amounts. The year’s change in such a provision is
reported in the income statement.

Financial assets
Financial assets include cash and cash equivalents, accounts
receivable, short-term assets and derivatives and are clas-
sified in following categories: financial assets at fair value
through the income statement, loan claims, and accounts
receivable. Management determines the classification of its
investments at initial recognition.

Financial assets at fair value through the income statement
This category has two sub-categories: financial assets
held-for-trading and those designated at fair value through
income statement at inception. A financial asset is classified
in this category if acquired principally for the purpose of
selling in the short term or if so designated by management.
Derivatives are also categorized as held-for-trading unless
they are designated as hedges. Assets in this category are
classified as current assets.

Loan claims and accounts receivable
Accounts receivable and short-term assets are non-deriv-
ative financial assets with fixed or determinable payments
that are not quoted in an active market. They are included in
current assets, except for maturities greater than 12 months
after the balance sheet date. These are classified as non-
current assets.

Financial liabilities
Financial liabilities include loan debts, accounts payable
and derivative instruments. Reporting depends on how the
liability is classified.

Loan debts
Loan debts are valued initially at fair value after transaction
costs, and thereafter at amortized cost. The amortized cost
is determined based on the effective interest rate when the
loan was raised. Accordingly, surplus values and undervalues
as well as direct issue expenses are allocated over the loan
period. Long-term loan debts have an anticipated term to
maturity exceeding one year, while current loan debts have
a term to maturity of less than one year.

ASSA ABLOY AnnuAL repOrt 2009

nOteS

note 1 cont.

Accounts payable
Accounts payable are valued at fair value and thereafter at
amortized cost using the effective interest method.

probable outflow of resources that will be needed to settle the
obligation. The amount of a provision is discounted to present
value where the effect of time value of money is material.

Recognition and measurement of financial assets
Regular purchases and sales of financial assets are recognized
on trade-date, the date on which the Group commits to pur-
chase or sell the asset. Investments are initially recognized at
fair value plus transaction costs for all financial assets not car-
ried at fair value through income statement where transac-
tion cost are reported in the income statement. The fair val-
ues of quoted investments are based on current bid prices. If
the market for a financial asset is not active, the Group estab-
lishes fair value by using valuation techniques. These include
the use of recent arm’s-length transactions, reference to
other instruments that are substantially the same and dis-
counted cash-flow analysis. The Group assesses at each clos-
ing day whether there is objective evidence that a financial
asset or a group of financial assets is impaired. A financial
asset is derecognized from the balance sheet when the rights
to receive cash flows from the investments have expired or
have been transferred to an external party. A financial liabil-
ity is removed from the balance sheet when the debt is paid
in full, or ceases to apply, or is transferred through all risks and
benefits being assigned to an external party.

Derivative instruments and hedging
Derivatives are recognized on the balance sheet at transac-
tion date and are measured at fair value, both initially and
on subsequent revaluations. The method of reporting profit
or loss depends on whether the derivative is classified as a
hedging instrument, and if so, the nature of the item being
hedged. Derivatives are classified within the Group as either
fair value hedges of recognized assets or liabilities or a firm
commitment (fair value hedge).

Changes in fair value of both the hedged item as the
hedging instrument are reported in the income statement
(financial items) in the period in which they arise. Changes
in fair value for derivatives not designated as hedging instru-
ments are reported continuously in the income statement,
(financial items).

When the transaction is entered into, the Group docu-
ments the relationship between the hedging instrument
and the hedged item, as well as the Group’s risk manage-
ment objectives and risk management strategy as regards
the hedging. The Group also documents its assessment,
both when hedging is entered into and on a regular basis,
of whether the derivative instruments used in hedge trans-
actions are effective in counteracting changes in fair value
that relate to the hedged items. The Group holds a limited
number of financial instruments qualifying for hedge
accounting. Information about the fair values of the various
derivative financial instruments used for hedge accounting
can be found in Note 33.

Fair value for currency derivatives is calculated at net
present value based on prevailing forward contract prices
on the balance sheet day while interest rate swaps are val-
ued using estimates of future discounted cash flows.

Employee benefits
Both defined contribution and defined benefit pension
plans exist in the Group. Comprehensive defined benefit
plans are found chiefly in the USA, the UK and Germany. Post-
employment medical benefits also exist, mainly in the USA,
which are reported in the same way as defined benefit pen-
sion plans. Calculations related to the Group’s defined benefit
plans are performed by independent actuaries and are based
on a number of actuarial assumptions such as discount rate,
future inflation and salary increases. Obligations are valued
on the closing day at their discounted value. For funded plans,
obligations are reduced by the fair value of the plan assets.
Unrecognized actuarial gains and losses lying outside the
so-called corridor (exceeding the highest of 10 percent of the
present value of the obligation or the fair value of plan assets)
are spread over the expected average remaining working lives
of the employees. Pension costs for defined benefit plans are
spread over the employee’s service period. The part of the
interest component in the pension cost that relates to the
deficit in pension plans is reported as a financial expense. The
Group’s payments related to defined contribution pension
plans are reported as cost in the period to which they refer,
based on the services performed by the employee. Swedish
Group companies apply UFR 4 which means that tax on pen-
sion costs is calculated on the difference between pension
cost in accordance with IAS 19 and pension cost determined
in accordance with local regulations.

Share-based incentive programs
Current share-based incentive programs were issued at
market value and therefore involve no personnel costs for
the Group.

Dividend
Dividend is reported as a liability once the Annual General
Meeting has approved the dividend.

The Parent company
The Group’s Parent company, ASSA ABLOY AB, is responsible
for the management of the Group and handles common
Group functions. The Parent company’s revenue consists
of intra-group franchise and royalty revenues, and its main
balance sheet items consist of shares in subsidiaries, intra-
group receivables and liabilities, and external borrowing.
The Parent company has prepared its annual accounts
in accordance with the Swedish Annual Accounts Act
(1995:1554) and standard RFR 2.2 of the Swedish Financial
Reporting Board. RFR 2.2 requires the Parent company, in
its annual accounts, to apply all the International Financial
Reporting Standards (IFRS) endorsed by the EU in so far as
this is possible within the framework of the Annual Accounts
Act and with regard to the relationship between accounting
and taxation. RFR 2.2 states what exceptions from, and addi-
tions to, IFRS should be made.

Provisions
A provision is recognized when the Group has a legal or con-
structive obligation resulting from a past event and it is prob-
able that an outflow of resources will be required to settle
the obligation and that a reliable estimate can be made of the
amount. Provisions are reported at a value re presenting the

Revenue
The Parent company’s revenue consists of intra-group
franchise and royalty revenues. These are reported in the
income statement as ‘Other operating income’ to make it
clear that the Parent company has no product sales similar
to those of other Group companies with external business.

nOteS

ASSA ABLOY AnnuAL repOrt 2009

as a financial guarantee. For these agreements the Parent
company applies the rule in RFR 2.2 p.72 and reports these
guarantees as a contingent liability.

Note 2 Sales

Sales to customer, by country

Group

SEK M

USA
France
Germany
United Kingdom
China
Sweden
Australia
Netherlands
Canada
Spain

Italy
Finland
Denmark
Norway
Mexico
Korea
Belgium
South Africa
Switzerland
Czech Republic
Middle East (excluding Saudi Arabia
and United Arab Emirates)
Austria
Africa (excluding South Africa)
New Zealand
Asia (excluding China, Korea,
Singapore, India and Thailand)
Brazil
Saudi Arabia
Portugal
Central America (excluding Mexico)
Poland
South America (excluding Brazil and
Chile)
Singapore
Russia
United Arab Emirates
India
Baltic countries
Turkey
Thailand
Chile
Greece
Ireland
Romania
Other countries
Total

Sales by product group

SEK M

Mechanical locks, lock systems and
accessories
Electromechanical locks, access con-
trol, automatic doors and identifica-
tion technology
Security doors and fittings
Total

2008¹

10,990
2,586
1,725
1,957
1,193
1,535
1,538
1,263
1,147
1,188

668
883
807
830
633
439
438
302
331
442

327
276
256
290

257
215
245
168
191
170

144
143
210
105
84
139
57
75
80
74
80
60
288
34,829

2009

10,666
2,675
1,789
1,753
1,696
1,563
1,555
1,259
1,146
988

869
863
837
794
571
492
480
375
356
354

311
288
276
271

262
226
211
183
171
154

132
131
128
128
107
104
95
90
88
87
74
67
298
34,963

Group

2008¹

2009

16,173

15,830

11,733
6,923
34,829

12,139
6,994
34,963

¹Reclassification has been made. For further information see Note 34.

Pension obligations
Pension obligations for the Parent company are accounted
for in accordance with FAR SRS Red 4. The pension obliga-
tions are covered by taking out insurance with an insurance
company.

Dividend
Dividend revenue is recognized when the right to receive
payment is judged to be firm.

Research and development costs
Research and development costs are expensed as they are
incurred.

Intangible assets
Intangible assets comprise patented technology and other
intangible rights. Intangible assets are amortized over 4–5
years.

Tangible assets
Tangible assets owned by the Parent company are reported
at cost less accumulated depreciation and any impairment
losses in the same way as for the Group. Tangible assets are
depreciated over estimated useful life which is 5–10 years
for equipment and for IT equipment 4 years.

Leasing
In the Parent company all leasing agreements is treated
as rental agreements (operational leases) regardless of
wheather they are financial or operational leases.

Shares in subsidiaries
Shares in subsidiaries are reported at cost less impairment
losses. When there is an indication that the value of shares in
subsidiaries or associated companies is reduced, a calcula-
tion is performed of the value in use. If this value is lower
that the reported value a write-down is done. Write-downs
are reported in result from shares in subsidiaries that are
included in financial items in the profit and loss.

Financial instruments
Derivative financial instruments are recorded at fair value.
Changes in the fair values of derivative financial instruments
are reported in the income statement with the exception of
exchange rate differences related to a monetary item that
forms part of a net investment in a foreign operation which
are reported in the fair value reserve.

Group contributions
The company reports Group contributions in accordance
with UFR 2 (the Swedish Financial Reporting Board). Group
contributions are reported according to their financial
implications. This means that Group contributions that
are paid with the aim of minimizing the Group’s total tax
charge are reported directly against equity after deduction
for their actual tax effects. Group contributions compa-
rable to dividends are reported as such, which means that
received Group contributions and their actual tax effects
are reported in the income statement and paid Group con-
tributions and their actual tax effects are reported directly
against equity.

Contingent liabilities
The Parent company has guarantees on behalf of its sub-
sidiaries. Such a guarantee is according to IFRS classified

ASSA ABLOY AnnuAL repOrt 2009

nOteS

Note 3 Auditors’ fees

Note 7 Expenses by nature

Group

Parent
company

SEK M

2008

2009

2008

2009

Audit
PricewaterhouseCoopers
Other
Assignments other than
audit
PricewaterhouseCoopers
Other

Total

26
6

10
5

28
6

3
–

2
1

4
–

1
0

Note 4 Other operating income and expenses

In the income statement costs are broken down by func-
tion. Cost of goods sold, Selling expenses, Administrative
expenses and Research and development costs amount to
SEK 30,451 M (30,529). Below, these same costs are broken
down by nature:

SEK M

Remuneration of employees (Note 32)
Direct material costs
Depreciation (Note 8, 14, 15)
Other purchase expenses
Restructuring costs
Total

Group

2008

10,016
11,329
921
7,083
1,180
30,529

2009

10,133
11,346
1,014
6,985
973
30,451

SEK M

Rent received
Net income from sales of fixed assets
Government grants
Business-related taxes
Disposal of subsidiaries
Exchange rate differences
Other, net
Total

Group

2008

14
56
10
–38
–
6
–91
–43

2009

17
3
2
–29
–68
–17
–58
–150

Note 8 Depreciation and amortization

Group

Parent
company

SEK M

2008

2009

2008

2009

Intangible rights
Machinery
Equipment
Buildings
Land improvements

Total

124
424
240
134
1

921

162
455
237
159

1,014

186
–
2
–
–

188

181
–
2
–
–

183

Parent company
Other operating income in the Parent company consists
mainly of franchise and royalty revenues from subsidiaries.

Note 5 Share of earnings in associates

SEK M

Låsgruppen Wilhelm Nielsen AS
Cerraduras de Colombia Cerracol S.A

Total

Group

2008

2009

3
9

4
8

Note 6 Operational leasing agreements

Group

Parent
company

Note 9 Exchange rate differences in the

income statement

SEK M

2008

2009

2008

2009

Group

Parent
company

Exchange rate
differences reported in
operating income
Exchange rate
differences reported in
financial expenses
(Note 11)
Total

–17

–10

4
10

–38
–55

–3
1

121
111

SEK M

2008

2009

2008

2009

Note 10 Financial income

Leasing fees paid during
the year

Total

Nominal value of agreed
future leasing fees:
Due for payment in
(2009) 2010
Due for payment in
(2010) 2011
Due for payment in
(2011) 2012
Due for payment in
(2012) 2013
Due for payment in
(2013) 2014
Due for payment in
(2014) 2015 or later
Total

279

304

253

200

156

111

112
922

297

231

169

127

131
1,052

12
78

15
88

SEK M

2008

2009

2008

2009

Group

Parent
company

Earnings from participa-
tions in subsidiaries
– of which dividends from
subsidiaries
– of which impairment of
shares in subsidiaries
Intra-group interest
income
Other financial income
External interest income
and similar items
Total

–

–
–

–

–
73

486

555

–69

956
–

898

–

375
73

47
47

57
130

1
1,443

19
1,365

nOteS

ASSA ABLOY AnnuAL repOrt 2009

Note 11 Financial expenses

Note 13 Earnings per share

Group

Parent
company

Earnings per share before dilution

SEK M

Earnings attributable to the Parent
company's shareholders
Weighted average number of
shares issued (thousands)
Earnings per share before dilution
(SEK per share)

Earnings per share after dilution

SEK M

Earnings attributable to the
Parent company's shareholders
Interest expenses for convertible
debenture loans, after tax
Net profit for calculating earnings
per share after dilution
Weighted average number of shares
issued (thousands)
Assumed conversion of convertible
debentures (thousands)
Weighted average number of
shares for calculations (thousands)
Earnings per share after dilution
(SEK per share)

Group

2008

2009

2,413

2,626

365,918

6.60

7.18

Group

2008

2009

2,413

2,626

2,494

2,658

365,918

14,795

10,616

380,713

376,534

6.55

7.06

Earnings per share after dilution and excluding
items affecting comparability

SEK M

Earnings attributable to the
Parent company's shareholders
Interest expenses for convertible
debenture loans, after tax
Items affecting comparability,
after tax1
Net profit for calculating earnings
per share after dilution
Weighted average number of shares
issued (thousands)
Asssumed conversion of convertible
debentures (thousands)
Weighted average number of shares
for calculations (thousands)
Earnings per share after dilution and
excluding items affecting compara-
bility (SEK per share)

Group

2008

2009

2,413

2,626

1,014

3,508

815

3,473

365,918

14,795

10,616

380,713

376,534

9.21

9.22

1 Items affecting comparability for 2009 consist of restructuring cost. Items

affecting comparability for 2008 consist of restructuring costs and non-recur-
ring costs. Non-recurring costs for 2008 totaled SEK 77 M.

SEK M

2008

2009

2008

2009

Intra-group interest
expenses
Interest expenses, con-
vertible debenture loans
Interest expenses,
other liabilities
Interest expenses,
interest rate swaps
Interest expenses, for-
eign exchange forwards
Exchange-rate differ-
ences on financial
instruments
Fair value adjustments
on derivatives, hedge
accounting
Fair value adjustments
on derivatives, non-
hedge accounting
Fair value adjustments
on borrowings, hedge
accounting
Fair value adjustments on
shares and participations
Other financial expenses
Total

–

–578

–125

–110

–43

–110

–43

–665

–640

–125

–156

–31

–39

–

–17

–38

–3

121

148

–60

–

–11

–148

–
–7
–817

–7

–22
–17
–764

–22

–

–
–8
–846

–

–22
–12
–237

Note 12 Tax on income

SEK M

Current tax
Tax attributable to
prior years
Deferred tax
Total

Group

2008

2009

–1,047

–1,095

14
–28

3
11
–1,061 –1,081

Parent
company

2008

–419

–16
–
–435

2009

–158

–
–
–158

Explanation for the difference between nominal Swedish tax
rate and effective tax rate based on income before tax:

Percent

2008

2009

2008

2009

Group

Parent
company

Swedish rate of tax on
income
Effect of foreign tax rates
Non-taxable income/
non-deductible
expenses, net
Deductible goodwill
Utilized loss carry-
forward not recognized
in prior period
Restructuring costs
Other
Effective tax rate in
income statement

28
4

–3
–1

–1
3
–

26
3

–4
–1

–1
2
4

28
–

–1
–

–
–
–

26
–

–17
–

–
–
–

ASSA ABLOY AnnuAL repOrt 2009

nOteS

Note 14 Intangible assets

2009, SEK M

Opening accumulated acquisition value
Purchases
Acquisitions of subsidiaries
Divestments of subsidiaries
Adjustments for acquisitions in the prior year
Sales/disposals
Reclassifications
Exchange rate differences

Closing accumulated acquisition value

Opening accumulated amortization/impairment
Impairment
Amortization for the year
Exchange rate differences
Closing accumulated amortization/impairment
Carrying amount

2008, SEK M

Opening accumulated acquisition value
Purchases
Acquisitions of subsidiaries
Adjustments for acquisitions in the prior year
Sales/disposals
Reclassifications
Exchange rate differences
Closing accumulated acquisition value

Opening accumulated amortization/impairment
Sales/disposals
Reclassifications
Impairment
Amortization for the year
Exchange rate differences
Closing accumulated amortization/impairment
Carrying amount

Intangible rights consist mainly of licenses and brands.
The carrying value of intangible rights with indefinite life
amounts to SEK 1,214 M (1,138).

Useful life is taken as indefinite where the time period
during which it is judged that an asset will contribute eco-
nomic benefits cannot be defined.

Amortization and impairment of intangible assets have

mainly been reported as cost of goods sold in the income
statement.

•

Group

Intangible
rights

Goodwill

20,669
–
637
–19
–16
–
–
–874

20,397

–
–64
–
–
–64
20,333

2,665
118
163
–37
–8
–
9
–132

2,778

–672
–
–162
47
–787
1,991

Group

Intangible
rights

Goodwill

17,271
–
1,208
–13
–4
–
2,207
20,669

–
–
–
–
–
–
–
20,669

1,866
114
251
–
–7
78
363
2,665

–429
7
–34
–
–124
–92
–672
1,993

Total

23,334
118
800
–56
–24
–
9
–1,006

23,175

–672
–64
–162
47
–851
22,324

Total

19,137
114
1,459
–13
–11
78
2,570
23,334

–429
7
–34
–
–124
–92
–672
22,662

Parent
company

Intangible
rights

938
–
–
–
–
–4
–
–

934

–432
–
–181
–
–613
321

Parent
company

Intangible
rights

938
–
–
–
–
–
–
938

–246
–
–
–
–186
–
–432
506

covering a three-year period. Cash flows beyond three years
are extrapolated using estimated growth rates according to
the principles below.

Main assumptions used to calculate values in use:
•
•

Budgeted operating margin.
Growth rate for extrapolating cash flows beyond the
budget period.
Discount rate after tax used for estimated future cash
flows.

Impairment testing of goodwill and intangible assets
with indefinite useful life
Goodwill and intangible assets with indefinite useful life are
assigned to the Group’s Cash Generating Units (CGU) which
contains of the Group’s five divisions.

For each Cash Generating Unit, The Group assesses each

year whether any impairment of goodwill and intangible
assets with indefinite useful life is needed, in accordance
with the accounting principles described in Note 1. Recover-
able amounts for Cash Generating Units have been estab-
lished by calculation of value in use. These calculations are
based on estimated future cash flows, which in turn are
based on financial budgets approved by management and

Management has established the budgeted operating mar-
gin on a basis of previous results and its expectations about
future market development. For extrapolating cash flows
beyond the budget period, a growth rate of 3 percent (3) is
used for all CGU. The growth rate is thought to be a conserva-
tive estimate. In addition, an average discount rate in local
currency after tax is used for the Group.

nOteS

ASSA ABLOY AnnuAL repOrt 2009

note 14 cont.

2009
Overall, the discount rate employed varied between 9.0 and
10.0 percent (EMEA 9.0 percent, Americas 9.0 percent, Asia
Pacific 10.0 percent, Global Technologies 10.0 percent and
Entrance Systems 9.0 percent).

Goodwill and intangible assets with indefinite useful life
were assigned to the Group’s Cash Generating Units as
summarized in the following table:

SEK M

Goodwill
Intangible assets with
indefinite useful life

Total

EMEA

5,540

221

5,761

Americas

Asia Pacific

Global
Technologies

Entrance
Systems

6,003

243

6,246

1,536

212

1,748

4,030

349

4,379

3,223

190

3,413

Total

20,333

1,214

21,547

2008
Overall, the discount rate employed varied between 9.0 and
10.0 percent (EMEA 9.0 percent, Americas 9.0 percent, Asia
Pacific 10.0 percent, Global Technologies 10.0 percent and
Entrance Systems 9.0 percent).

Goodwill and intangible assets with indefinite useful life
were assigned to the Group’s Cash Generating Units as
summarized in the following table:

SEK M

Goodwill
Intangible assets with
indefinite useful life

Total

EMEA

5,766

233

5,999

Americas

Asia Pacific

Global
Technologies

Entrance
Systems

6,236

256

6,492

1,628

247

1,875

4,275

377

4,652

2,763

2,788

Total

20,669

1,138

21,807

Sensitivity analysis
A sensitivity analysis has been carried out for each Cash
Generating Unit. The results of the analysis can be summa-
rized as follows.

2009
If the estimated operating margin after the end of the bud-
get period had been one percentage point lower than the
management’s estimate, total recoverable amount would
be 6 percent lower (EMEA 6 percent, Americas 5 percent,
Asia Pacific 7 percent, Global Technologies 6 percent and
Entrance Systems 5 percent).

If the estimated growth rate to extrapolate cash flows
beyond the budget period had been one percentage point
lower than the basic assumption of 3 percent, total recover-
able amount would be 13 percent lower ( EMEA 13 percent,
Americas 13 percent, Asia Pacific 11 percent, Global Tech-
nologies 11 percent and Entrance Systems 13 percent).
If the estimated weighted cost of capital used for the
Group’s discounted cash flow had been one percentage
point higher than the starting assumption of 9.0 to 10.0
percent, total recoverable amount would be 14 percent
lower (EMEA 14 percent, Americas 14 percent, Asia Pacific
13 percent, Global Technologies 12 percent and Entrance
Systems 14 percent).

These calculations are hypothetical and should not be
viewed as an indication that these figures are any more or
less likely to be changed. The sensitivity analysis should
therefore be interpreted with caution.

None of the hypothetical cases above would lead to an
impairment of goodwill in a particular Cash Generating Unit.

2008
If the estimated operating margin after the end of the bud-
get period had been one percentage point lower than the
management’s estimate, total recoverable amount would
be 6 percent lower (EMEA 6 percent, Americas 5 percent,
Asia Pacific 8 percent, Global Technologies 6 percent and
Entrance Systems 6 percent).

None of the hypothetical cases above would lead to an
impairment of goodwill in a particular Cash Generating Unit.

ASSA ABLOY AnnuAL repOrt 2009

nOteS

Note 15 Tangible assets

2009, SEK M

Opening accumulated
acquisition value
Purchases
Acquisitions of subsidiaries
Divestments of subsidiaries
Sales/disposals
Reclassifications
Exchange rate differences
Closing accumulated
acquisition value

Opening accumulated depreciation/
impairment
Sales/disposals
Impairment
Depreciation for the year
Exchange rate differences
Closing accumulated depreciation/
impairment

Construction in progress
Carrying amount

Group

Parent
company

Land
and land
improve-
ments

Buildings

Machinery

Equipment

Total

Equipment

3,849
40
80
–
–19
26
–182

3,794

–1,740
6
–18
–159
95

–1,816

834
1
20
–
–2
8
–32

829

–32
0
–
–1
3

–30

7,064
345
82
–
–354
143
–496

2,366
152
32
–1
–125
39
–116

14,113
538
214
–1
–500
216
–826

6,784

2,347

13,754

–5,123
257
–62
–455
412

–1,728
103
–8
–237
94

–4,971

–1,776

– 8,623
366
–88
–852
604

–8,594

389
5,550

1,978

799

1,813

571

15
1
–
–
–
–
–

–11
–
–
–2
–

–13

–
3

The tax value of the Group’s Swedish buildings was SEK 122 M (120).
The tax value of the Group’s Swedish land was SEK 14 M (14).

2008, SEK M

Opening accumulated
acquisition value
Purchases
Acquisitions of subsidiaries
Sales/disposals
Reclassifications
Exchange rate differences

Closing accumulated
acquisition value

Opening accumulated depreciation/
impairment
Sales/disposals
Impairment
Depreciation for the year
Reclassifications
Exchange rate differences
Closing accumulated depreciation/
impairment

Construction in progress
Carrying amount

Group

Parent
company

Land
and land
improve-
ments

Buildings

Machinery

Equipment

Total

Equipment

3,133
144
87
–57
35
507

3,849

–1,352
42
–18
–134
–
–278

–1,740

736
8
2
–1
1
88

834

–25
1
–
–1
–
–7

–32

5,959
318
96
–489
39
1,141

1,966
194
17
–170
–17
376

11,794
664
202
–717
58
2,112

7,064

2,366

14,113

–4,125
456
–62
–424
–
–968

–1,354
147
–
–239
34
–316

–6,857
646
–80
–798
34
–1,568

–5,123

–1,728

–8,623

2,109

802

1,941

638

462
5,952

16
0
–
–1
–
–

–10
1
–
–2
–
–

–11

–
4

nOteS

ASSA ABLOY AnnuAL repOrt 2009

Note 16 Shares in subsidiaries

Company name

ASSA Sverige AB
Timelox AB
ASSA ABLOY Entrance Systems AB
ASSA ABLOY Kredit AB
ASSA ABLOY Försäkrings AB
ASSA ABLOY Identification Technology Group AB
ASSA ABLOY Svensk Fastighets AB
ASSA ABLOY Asia Holding AB
ASSA ABLOY IP AB
ASSA ABLOY OY
ASSA ABLOY Norge A/S
ASSA ABLOY Danmark A/S
ASSA ABLOY Deutschland GmbH
ASSA ABLOY Nederland BV
Nemef BV
Integrated Engineering B.V.
ASSA ABLOY France SAS
Interlock Holding AG
HID Global Switzerland S.A.
ASSA ABLOY Holding GmbH
ASSA ABLOY Ltd
ITG (UK) Ltd
HID Global Ireland Teoranta
Mul-T-Lock Ltd
ASSA ABLOY Holdings (SA) Ltd
ASSA ABLOY Inc
Fleming Door Products, Ltd
ABLOY Holdings Ltd
AAC Acquisition Inc.
ASSA ABLOY Australia Pacific Pty Ltd
ASSA ABLOY South Asia Pte Ltd
Grupo Industrial Phillips, S.A de C.V.
Cerraduras de Colombia S.A.
ASSA ABLOY Innovation AB
ASSA ABLOY Hospitality AB
ASSA ABLOY North America AB
WHAIG Limited
ASSA ABLOY Asia Pacific Ltd
Total

¹ The Group’s holdings amount to 100 percent.

Note 17 Shares in associates

2009 Company name

Talleres Agui S.A
Låsgruppen Wilhelm Nielsen AS
Mab Iberica SA
Other
Total

2008 Company name

Talleres Agui S.A
Låsgruppen Wilhelm Nielsen AS
Cerraduras de Colombia Cerracol S.A
Renato Fattorini SRL
Other
Total

Corporate identity number,
Registered office

Number of
shares

% of share
capital

Book value,
SEK M

Parent company

556061-8455, Eskilstuna
556214-7735, Landskrona
556204-8511, Landskrona
556047-9148, Stockholm
516406-0740, Stockholm
556645-4087, Stockholm
556645-0275, Stockholm
556602-4500, Stockholm
556608-2979, Stockholm
1094741-7, Joensuu
979207476, Moss
CVR 10050316, Herlev
HR B 66227, Berlin
23028070, Geertruidenberg
08023138, Apeldoorn
33216643, Amsterdam
412140907, R.C.S. Versailles
CH-020.3.913.588-8, Zürich
CH-232-0730018-2, Granges
FN 273601f, A-6175, Kematen
2096505, Willenhall
5099094, Haverhill
364896, Galway
520036583, Yavne
1948/030356/06, Roodepoort
039347-83, Oregon
147126, Ontario
1148165260, St Laurent, Quebec
002098175, Ontario
ACN 095354582, Oakleigh, Victoria
199804395K, Singapore
GIP980312169, Mexico
Public Deed 2798, Bogota
556192-3201, Stockholm
556180-7156, Göteborg
556671-9851, Stockholm
EC21330, Bermuda
53451, Hong Kong

70
15,000
1,000
400
60,000
1,000
1,000
1,000
1,000
800,000
150,000
60,500
2
3,515
4,000
500
15,184,271
211,000
2,500
1
1,330,000
1
501,000
13,787,856
100,220
100
25,846,600
1
1
48,190,000
4,300,000
27,036,635
2,201,670
2,500
1,000
1,000
100,100
1,000,000

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
98¹
100
100
100
100
100
90¹
100
100
100
100
100
100
100
100
71¹
100
100
100
100
100

197
22
181
528
60
220
0
189
0
4,257
538
376
1,064
87
928
9
1,964
0
47
15
3,077
1
293
901
184
2,259
0
13
17
242
48
765
139
105
14
0
303
72
19,115

Country of
registration

Spain
Norway
Spain

Country of
registration

Spain
Norway
Colombia
Italy

Number
of shares

4,800
305
700

Number
of shares

4,800
305
182,682
1

Group

% of share

capital Book value, SEK M

40
50
24

19
16
3
1
39

Group

% of share

capital Book value, SEK M

40
50
29
25

16
11
2
4
5
38

ASSA ABLOY AnnuAL repOrt 2009

nOteS

Note 21 Accounts receivable

Group

2008

2009

Note 18 Deferred tax

SEK M

Deferred tax receivables
Tax-deductible goodwill
Pensions
Other deferred tax receivables
Deferred tax receivables
Deferred tax liabilities
Deferred tax receivables, net

Change in deferred tax during the year
At 1 January
Acquisitions of subsidiaries
Reported in income statement
Exchange rate differences
At 31 December

430
106
221
757
56
701

762
–46
–28
13
701

351
151
312
814
63
751

701
–20
11
59
751

The group has additional tax losses carried forward of some
SEK 1,500 M (1,500) for which deferred tax assets have not
been recognized.

Note 19 Other long-term financial assets

SEK M

2008

2009

2008

2009

Group

Parent
company

Other shares and
participations
Interest-bearing
long-term receivables
Other long-term
receivables
Total

Note 20 Inventories

SEK M

Materials and supplies
Work in progress
Finished goods
Advances paid
Total

256

244

24
317

48
334

–
79

–
34

Group

2008

1,458
1,630
2,213
82
5,383

2009

1,179
1,274
1,811
85
4,349

Write-downs of inventory amounted to SEK 191 M (201).

SEK M

Accounts receivable
Provision for bad debts
Total

Maturity analysis
Accounts receivable not due
Accounts receivable past due not
impaired:
< 3 months
3–12 months
> 12 months

Impaired accounts receivable:
< 3 months
3–12 months
> 12 months

Provision for bad debts
Total

Accounts receivable per currency

EUR
USD
GBP
AUD
CNY
SEK
Other currencies
Total

Current year's change
in provision for bad debts

Opening balance
Disposals
Receivables written off
Reversal of unused amounts
Provision for bad debt
Exchange rate differences
Closing balance

Group

2008

6,776
–404
6,372

2009

6,010
–392
5,618

4,408

4,119

1,448
224
62
1,734

288
179
167
634

–404
6,372

2008

2,343
2,023
269
250
241
202
1,044
6,372

2008

294
0
–78
–39
184
43
404

1,107
205
39
1,351

245
126
169
540

–392
5,618

2009

2,152
1,382
249
290
302
212
1,031
5,618

2009

404
–1
–127
–30
166
–20
392

nOteS

ASSA ABLOY AnnuAL repOrt 2009

Note 22 Parent company’s equity

The Parent company’s equity is split between restricted and
unrestricted equity. Restricted equity consists of share capi-
tal and the statutory reserve. Restricted funds must not be
reduced by issue of dividends. Unrestricted equity consists
of retained earnings and the year’s net income.

The statutory reserve contains premiums (amounts
received from share issues that exceed the nominal value of
the shares) relating to shares issued up to 2005.

Note 23 Share capital, number of shares
and dividend per share

Number of shares
(thousands)

Series A Series B

Total

Share
capital,
SEK T

19,175 346,743

365,918

19,175 346,743

365,918

191,753 346,743

538,496

19,175 346,743

365,918

19,175 346,743

365,918

191,753 346,743

538,496

Opening balance at
1 January 2008
Closing balance at
31 December 2008
Number of votes,
thousands

Opening balance at
1 January 2009
Closing balance at
31 December 2009
Number of votes,
thousands

All shares have a par value of SEK 1.00 and provide the hold-
ers with equal rights to the Company’s assets and earnings.
All shares are entitled to dividends subsequently issued.
Each Series A share carries ten votes and each Series B share
one vote. All issued shares are fully paid.

The average number of shares during the year, to the
nearest thousand, was 365,918 thousand (365,918). The
average number of shares after full conversion of outstand-
ing convertible bonds, similarly rounded, was 376,534 thou-
sand (380,713).

Dividend per share
The dividend paid out during the financial year amounted
to a total sum of SEK 1,317 M (1,317), corresponding to
SEK 3.60 (3.60) per share. At the Annual General Meeting on
22 April 2010, a dividend of SEK 3.60 per share for year 2009
– a total sum of SEK 1,317 M – will be proposed.

ASSA ABLOY AnnuAL repOrt 2009

nOteS

Note 24 Post-employment employee benefits

Post-employment employee benefits include pensions
and medical benefits. Pension plans are classified as either
defined benefit plans or defined contribution plans. Pension
obligations reported in the balance sheet are mainly due
to defined benefit pension plans. ASSA ABLOY has defined
benefit plans in a number of countries, those in the USA, the
UK and Germany being the most significant ones. There are
also obligations related to post-retirement medical benefits
in the USA.

Amounts recognized in the income statement

Pension costs, SEK M

2008

2009

Defined benefit pension charges (A)
Defined contribution pension charges
Post-employment medical benefit
charges (A)
Total

56
328

29
413

126
283

25
434

Amounts recognized in the balance sheet

Pension provisions, SEK M

2008

2009

Provisions for defined benefit
pension plans (B)
Provisions for post-employment
medical benefits (B)
Provisions for defined contribution
pension plans
Pension provisions
Financial assets
Pension provisions, net

638

485

59
1,182
–23
1,159

598

447

73
1,118
–26
1,092

A) Specification of amounts recognized in the income statement

Post-employment
medical benefits

Defined benefit
pension plans

Total

Pension costs, SEK M

2008

2009

Current service cost
Interest on obligation
Expected return on plan assets
Net actuarial losses (gains), net
Past service cost
Losses (gains) on curtailments/settlements
Total
-of which, included in:
Operating income
Net financial items
Total

6
23
–
0
0
–
29

6
23
29

5
29
–
–9
0
–
25

5
20
25

2008

50
219
–216
1
2
0
56

53
3
56

2009

50
223
–158
15
0
–4
126

46
80
126

2008

56
242
–216
1
2
0
85

59
26
85

2009

55
252
–158
6
0
–4
151

51
100
151

Actuarial gains/losses resulting from changes in the actu-
arial assumptions for defined benefit pension plans are
recognized to the extent that their accumulated amount
exceeds the ‘corridor’, i.e. 10 percent of the higher of the
obligations’ present value or the fair value of plan assets. The
surplus/ deficit outside the 10 percent corridor is recognized
as income/expense over the expected average remaining
service period, starting in the year after the actuarial gain or

loss arose. Amortization of actuarial gains/losses that arose
in 2009 will start in 2010 to the extent that amortizations
are applicable according to the current framework.

The actual return on plan assets regarding defined ben-

efit plans was in 2009 SEK –321 M (–594) in 2009.

Partly funded or unfunded pension plans are reported as

provisions for pensions.

B) Specification of amounts recognized in the balance sheet

Post-employment
medical benefits

Defined benefit
pension plans

Total

Specification of pension provisions, SEK M

2008

2009

Present value of funded obligations (C)
Fair value of plan assets (D)
Net value of funded plans
Present value of unfunded obligations (C)
Unrecognized actuarial gains (losses), net
Unrecognized past service cost

Provisions for defined contribution pension plans
Total

–
–
–
361
122
2
485

–
–
–
402
45
0
447

2008

2,867
–2,604
263
736
–356
–5
638

2009

3,499
–2,817
682
795
–879
0
598

2008

2,867
–2,604
263
1,097
–234
–3
1,123
59
1,182

2009

3,499
–2,817
682
1,197
–834
0
1,045
73
1,118

nOteS

ASSA ABLOY AnnuAL repOrt 2009

note 24 cont.

C) Movement in pension obligations

SEK M

Opening obligations
Current service cost
Interest on obligation
Actuarial losses (gains)
Curtailments /settlements
Payments
Exchange rate differences
Closing obligation

D) Movement in fair value of plan assets

SEK M

Opening fair value of plan assets
Expected return on plan assets
Actuarial gains (losses)
Curtailments / settlements
Net payments
Exchange rate differences
Closing fair value of plan assets (E)

E) Plan assets allocation

Plan assets

Shares
Interest-bearing investments
Other assets
Total

F) Sensitivity analysis on medical benefits

The effect of a 1percent change in the assumed
medical cost trend rate

Effect on the aggregate of the current service cost
and interest cost
Effect on the defined benefit obligation

Key actuarial assumptions (yearly, weighted average), %

Discount rate
Expected return on plan assets 1
Future salary increases
Future pension increases
Future medical benefit increases
Expected inflation

As at 31 December
Present value of obligation (+)
Fair value of plan assets (–)
Obligation, net

Post-employment
medical benefits

Defined benefit
pension plans

Total

2008

391
6
23
–106
6
–25
66
361

2009

361
5
29
63
–4
–39
–13
402

2008

3,993
50
219
–574
–1
–184
99
3,602

2009

3,602
50
223
730
–11
–194
–106
4,294

2008

4,384
56
242
–680
5
–209
165
3,963

2009

3,963
55
252
793
–15
–233
–119
4,696

Defined benefit
pension plans

2008

3,177
216
–811
–
–43
65
2,604

2008

1,413
907
284
2,604

+1%

3
38

2008

6.9
6.7
2.2
2.7
9.5
2.8

2008
3,963
–2,604
1,359

2009

2,604
158
178
–14
–35
–74
2,817

2009

1,571
857
389
2,817

–1%

–3
–32

2009

5.4
7.3
2.3
2.9
10.0
3.0

2009
4,696
–2,817
1,879

2005
4,892
–3,009
1,883

2006
4,487
–3,133
1,354

2007
4,384
–3,177
1,207

1 The expected return on plan assets is determined by considering the expected returns available on assets underlying the current investment policy.

Plan assets chiefly consist of equity instruments and interest-bearing investments. The expected return primarily reflects established risk premiums and index for
interest-bearing investments.

Pensions with Alecta
Commitments for old-age pensions and family pensions for
salaried employees in Sweden are guaranteed in part through
insurance with Alecta. According to UFR3 this is a defined
benefit plan that covers many employers. For the 2009
financial year the company has not had access to informa-
tion making it possible to report this plan as a defined benefit
plan. Pension plans in accordance with ITP that are guaran-
teed through insurance with Alecta are therefore reported
as defined contribution plans. The year’s contribution that
are contracted to Alecta amount to SEK 10 M (7), of which

SEK 4 M (3) relates to the Parent company. Alecta’s surplus
may be distributed to the policy-holders and/or the persons
insured. At the end of 2009 Alecta’s surplus expressed as col-
lective consolidation level amounted to 141 (112) percent.
Collective consolidation level consists of the market value of
Alecta’s assets as a percentage of its insurance commitments
calculated according to Alecta’s actuarial calculation assump-
tions, which do not comply with IAS19.

ASSA ABLOY AnnuAL repOrt 2009

nOteS

Note 25 Other provisions

Note 26 Other short-term liabilities

SEK M

Opening balance at
1 January 2008
Provisions for the year
Additional purchase price
subsidiaries
Utilized during the year
Exchange rate differences
Closing balance at
31 December 2008

SEK M

Opening balance at
1 January 2009
Provisions for the year
Reversal of non-utilized
amounts
Additional purchase price
subsidiaries
Utilized during the year
Exchange rate differences
Closing balance at
31 December 2009

Restruc-
turing
reserve

828
1,038

–
–485
137

Group

Other

Total

512
11

267
–114
46

1,340
1,049

267
–599
183

SEK M

VAT and excise duty
Employee withholding tax
Advances received
Social security contributions and
other taxes
Other short-term liabilities
Total

Group

2008

2009

244
72
93

38
282
729

283
69
95

55
393
895

1,518

722

2,240

Note 27 Accrued expenses and prepaid income

Restruc-
turing
reserve

1,518
908

–92

–
–676
–81

Other

Total

SEK M

722
346

–51

139
–170
–8

2,240
1,254

–143

139
–846
–89

Personnel-related
expenses
Customer-related
expenses
Prepaid income
Accrued interest
expenses
Other

Total

Group

Parent
company

2008

2009

2008

2009

1,441

1,642

444
79

125
1,035

3,124

430
61

92
653

2,878

–
–

55
4

116

–
–

47
13

145

1,577

978

2,555

Group

Note 28 Contingent liabilities

Balance sheet breakdown:

Other long-term provisions
Other short-term provisions
Total

2008

1,453
787
2,240

2009

1,829
726
2,555

The restructuring reserves is concerned chiefly with the
ongoing restructuring programs initiated in 2006, 2008 and
2009. The closing balance of the provision is expected to be
utilized during the coming three-year period and is mainly
related to severance payments. The long-term part of the
restructuring provision totaled SEK 862 M. Detailed infor-
mation about the restructuring programs appears in the
Report of the Board of Directors. Other provisions related to
estimates of deferred considerations related to acquisitions
and legal obligations including future environment-related
interventions.

Parent company
Other provisions in the Parent company refers to estimates
of deferred considerations related to acquisitions.

Group

Parent
company

SEK M

2008

2009

2008

2009

Guarantees
Guarantees on behalf of
subsidiaries
Total

–
36

–
52

–

8,501
8,501

7,472
7,472

In addition to the guarantees shown in the table above the
Group has a large number of small performance guarantees
issued by banks in the ordinary course of business. No mate-
rial obligations are expected as a result of these guarantees.

Maturity profile-guarantees, SEK M

<1 year
>1<2 year
>2<5 year
>5 year
Total

Group

2009

21
9
7
15
52

The maturity profile is not significantly changed between
2008 and 2009.

Note 29 Assets pledged against liabilities to credit institutes

SEK M

Real-estate mortgages
Other mortgages
Total

Group

2008

41
30
71

2009

71
42
113

Parent
company

2008

None
None
None

2009

None
None
None

nOteS

ASSA ABLOY AnnuAL repOrt 2009

2008
Rockwood
On 24 June 2008 the Group acquired 100 percent of the
share capital of Rockwood Manufacturing Company, a lead-
ing US producer of standard and decorative specialty door
hardware. The acquisition brings into ASSA ABLOY a well rec-
ognized producer of door components. With the acquisition
of Rockwood ASSA ABLOY takes another step in its strategy
to provide total door solutions on the non-residential market
in the USA. The company has its headquarters and manu-
facturing facility in Rockwood, Pennsylvania. The brand has
been separately recognized and remaining goodwill is chiefly
related to synergies and other intangible assets not qualify-
ing for separate recognition.

Gardesa
On 9 July 2008 the Group acquired 100 percent of the
share capital of Gardesa, a leading Italian manufacturer of
high-security steel doors. Gardesa is a valuable addition to
ASSA ABLOY, bringing a leading brand, a very exciting prod-
uct range, advanced technology and very attractive Italian
design. The majority of the products are sold through the
company’s distribution network in Italy while 25 percent are
sold through distributors to other markets in Europe, Africa
and Asia. Gardesa is located near Piacenza in Italy. The brand
has been separately recognized and remaining goodwill is
chiefly related to synergies and other intangible assets not
qualifying for separate recognition.

Valli&Valli
On 3 July 2008 the Group acquired 100 percent of the share
capital of Valli&Valli, a leading Italian manufacturer of design
handles. The acquisition brings into ASSA ABLOY an exciting
product range and a well known brand used by designers
and architects worldwide. The acquisition will strengthen
ASSA ABLOY’s leading position on the Italian market and it
will also reinforce the Group’s specification efforts in many
other countries. The company is based near Milan in Italy.
The brand has been separately recognized and remaining
goodwill is chiefly related to synergies and other intangible
assets not qualifying for separate recognition.

Shenfei
On 19 December 2008 the Group acquired 100 percent of
the share capital of Shenfei, a leading Chinese manufacturer
of door closers. The acquisition is an important step in the
growth strategy on emerging markets and adds market
presence as well as complementing ASSA ABLOY’s product
portfolio. Shenfei complements the Group’s port folio of
locks and door opening solutions and adds a valuable dis-
tribution network in China. Shenfei is located in Wen Zou,
south of Shanghai. Goodwill is chiefly related to synergies
and other intangible assets not qualifying for separate rec-
ognition.

Note 30 Business combinations

SEK M

Cash paid, including direct acquisition costs
Unpaid part of purchase prices
Total purchase price
Fair value of acquired net assets
Goodwill

Acquired assets and liabilities in accor-
dance with purchase price allocations
Intangible assets
Other tangible assets
Inventories
Receivables
Cash and cash equivalents
Interest-bearing liabilities
Other liabilities
Minority interest
Acquired net assets at fair value
Fair value adjustments, intangible assets
Fair value adjustments, other assets and
liabilities
Acquired net assets at book value

Purchase prices settled in cash, including
direct acquisition costs
Cash and cash equivalents in
acquired subsidiaries
Change in Group cash and cash
equivalents resulting from acquisition

Net sales from times of acquisition
EBIT from times of acquisition
Net income from times of acquisition

2008

1,710
320
2,030
–822
1,208

251
202
339
223
58
–40
–275
64
822
–233

165
754

1,710

–58

1,652

691
82
9

2009

968
139
1,107
–470
637

163
244
149
294
50
–195
–248
13
470
–163

45
352

968

–50

918

415
44
27

Total net sales in 2009 of acquired entities amounted to
SEK 1,175 M (1,732) and net income amounted to SEK 33 M
(29). No individually material acquisition was performed
in 2009 or 2008. During 2009 the holding in iRevo was
increased and at the end of the year it totaled around 99
percent of the shares. The largest and most notable aquisi-
tions during 2009 include Ditec, Maiman, Portsystem and
Cerracol for which preliminary purchase price allocations
have been made.

Rockwood, Gardea, Valli & Valli and Shenfei were the

largest acquisitions during 2008.

2009
Ditec
On 8 September 2009 the Group acquired the Italian com-
pany Ditec Group, a global leader in automatic doors, indus-
trial and high-speed doors and gate automation. At year end
the participating interest amounted to 100 percent of the
share capital. With the acquisition ASSA ABLOY becomes a
world-leader in entrance automation by complementing
the existing product portfolio. The acquisition of Ditec is an
important step in ASSA ABLOYs growth strategy into the fast
growing and profitable market segment of door automat-
ics. The Company has its headquarters in Caronno, close to
Milan, Italy. The brand has been separately recognized and
remaining goodwill is chiefly related to synergies and other
intangible assets not qualifying for separate recognition.

Pan Pan
In 2009 an agreement was signed to acquire Pan Pan,
China’s largest manufacturer of high-security steel doors.
ASSA ABLOY has received anti-trust clearance. A business
license is required from the local Chinese authorities before
Pan Pan can be consolidated into the Group. This license is
expected in the first quarter of 2010.

ASSA ABLOY AnnuAL repOrt 2009

nOteS

note 30 cont.

Disposals of subsidiaries
During 2009 smaller businesses were disposed in New Zea-
land, Switzerland and Sweden. The cash flow effect and net
earnings from the disposals are shown in the table below:

SEK M

Disposed net assets
Fixed assets
Inventories
Receivables
Cash and cash equivalents
Liabilities
Disposed net assets to carrying amount

Purchase prices received
Less, cash and cash equivalents in disposed
subsidiaries
Change in cash and cash equivalents
for the Group
Net earnings of disposals

Group

2008

2009

–
–
–
–
–
–

–

–
–

–59
–14
–14
–71
24
–134

–71

–71
–73

Note 31 Cash flow

SEK M

Adjustments for non-cash items
Profit on sales of fixed assets
Change of pension obligations
Other
Adjustments for non-cash items

Change in working capital
Inventory increase/decrease (–/+)
Accounts receivable increase/decrease (–/+)
Accounts payable increase/decrease (+/–)
Other working capital increase/decrease (–/+)
Change in working capital

Group

2008

2009

–31
–3
–15
–49

–144
38
–59
160
–5

3
51
73
127

987
806
–232
–102
1,460

Investments in subsidiaries
Total purchase price
Less, acquired cash and cash equivalents
Less, unpaid parts of purchase prices
Plus, paid parts of purchase prices relating to
prior years
Investments in subsidiaries

–2,030
58
320

–1,107
50
139

–179
–1,831

–159
–1,077

Disposal of subsidiaries
Purchase prices received
Less, cash and cash equivalents in disposed
subsidiaries
Disposal of subsidiaries

Other investments
Investments in/ sales of other shares
Investments in/ sales of other financial assets
Other investments

–

–
–

1
11
12

–71
–71

1
–24
–23

nOteS

ASSA ABLOY AnnuAL repOrt 2009

Note 32 Employees

Salaries, wages and other remuneration

SEK M

USA
France
Germany
Sweden
United Kingdom
China
Finland
Australia
Spain
Norway
Netherlands
Switzerland
Italy
Denmark
Canada
Czech Republic
Israel
Mexico
Belgium
New Zealand
South America
South Africa
Korea
Austria
Ireland
Singapore
Romania
Portugal
Malaysia
Poland
Other
Total

SEK M

Sweden
Other
Total

Social security costs

SEK M

Social security costs
-of which pensions
Total

2008

2009

Group

Salaries, wages
and other
remuneration

of which,
performance-rela-
ted salary paid to
managing direc-
tors

Salaries, wages
and other
remuneration

of which,
performance-rela-
ted salary paid to
managing direc-
tors

2,733
430
568
590
503
166
339
303
288
311
245
230
154
230
194
133
118
151
45
85
76
67
39
52
41
27
48
10
21
15
112
8,324

11
4
2
5
3
0
0
0
2
1
2
1
0
0
2
–
0
0
0
0
0
–
0
1
0
1
–
0
0
0
0
35

2,534
604
568
566
425
333
331
328
278
275
248
248
236
224
161
110
109
93
88
79
75
67
53
50
44
31
29
21
17
13
61
8,299

11
2
2
12
1
2
0
0
0
0
1
1
–
0
1
–
0
1
0
0
0
–
–
0
–
0
–
0
0
0
1
35

Parent company

2008

2009

Salaries, wages
and other
remuneration

of which,
performance-rela-
ted salary paid to
managing direc-
tors

Salaries, wages
and other
remuneration

of which,
performance-rela-
ted salary paid to
managing direc-
tors

102
0
102

Group

2008

1,692
413
1,692

3
–
3

2009

1,834
434
1,834

109
–
109

Parent company

2008

55
20
55

8
–
8

2009

53
21
53

Total

1,102
450
591
723
591
–
657
723
854
–
5,692

Fees to board members in 2009 (including committee work), SEK thousands

Name and post

Gustaf Douglas, Chairman
Jorma Halonen, Member
Carl Douglas, Member
Birgitta Klasén, Member
Eva Lindqvist, Member
Johan Molin, President and CEO
Sven-Christer Nilsson, Member
Lars Renström, Member
Ulrik Svensson, Member
Employee representatives (2)
Total

Board

900
450
450
450
450
–
450
450
450
–
4,050

Remuneration
Committee

Audit
Committee

100
–
–
–
–
–
50
–
–
–
150

–
–
–
100
–
–
–
100
200
–
400

Social
security
costs

102
–
141
173
141
–
157
173
204
–
1,092

ASSA ABLOY AnnuAL repOrt 2009

nOteS

note 32 cont.

Remuneration and other benefits of the Executive Team in 2009, SEK thousands

Johan Molin
Other members of the executive team (9)
Total remuneration and benefits
Total costs1

Fixed salary Variable salary Other benefits

Pension costs

10,500
36,411
46,911
56,709

7,875
24,709
32,584
39,165

100
2,515
2,615
2,862

3,675
9,501
13,176
15,947

1 Total costs for the Executive team include social fees on salaries and benefits, special pension tax and additional costs for other benefits.

Salaries and other benefits paid to the Executive Team during 2008 totaled SEK 55 M and social security costs totaled SEK 26 M, of which SEK 14 M were pension
costs.

Absence for illness, %

Total absence for illness
– long-term 1
– men
– women
– aged 29 or younger
– aged 30–49
– aged 50 or older 1

Parent company

2008

2009

1.8
–
2.0
1.2
0.6
1.0
–

2.3
–
2.8
1.1
0.4
0.8
–

1 Information not displayed since it could be linked to specific individuals.

Salaries and remuneration to the Board of Directors and
the Parent company’s Executive Team
Salaries and other remuneration to the Board of Directors
and the Parent company´s Executive team totaled SEK 42 M
(31). Social security costs amounted to SEK 24 M (19), of
which SEK 11 M (10) are pension costs.

Severance pay
If the CEO is given notice, the company is liable to pay the
equivalent of 24 months’ salary and other employment
benefits. If one of the other senior executives is given notice,
the company is liable to pay a maximum 6 months’ basic
salary and other employment benefits plus an additional
12 months’ basic salary.

Average number of employees per country,
with breakdown into women and men

2008

2009

Group

Total whereof women whereof men

1,433
1,073
667
414
1,315
224
620
2,124
1,242
407
604
760
1,085
484
460
534
581
6,961
1,721
659
527
5,962
266
954
336
1,310
32,723

536
420
245
141
525
83
91
907
485
159
202
224
578
234
131
206
107
2,246
1,042
172
369
2,939
50
283
116
583
13,074

897
653
422
273
790
141
529
1,217
757
248
402
536
507
250
329
328
474
4,715
679
487
158
3,023
216
671
220
727
19,649

1,371
921
514
401
1,066
206
518
1,882
1,129
358
589
673
980
368
401
467
386
6,000
1,210
535
419
6,855
211
833
325
756
29,375

487
338
157
150
358
79
108
699
433
140
171
190
494
174
109
193
101
2,094
702
139
283
3,264
42
230
99
297
11,531

884
583
357
251
708
127
410
1,183
696
218
418
483
486
194
292
274
285
3,906
508
396
136
3,591
169
603
226
459
17,843

2008

2009

Parent company

Total whereof women whereof men

101
101

32
32

69
69

94
94

26
26

68
68

2008

2009

Total whereof women whereof men

9
10

4
19

2
–

–
2

7
10

4
17

9
10

4
19

2
–

–
2

7
10

4
17

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

Sweden
Total

Gender-split in senior management

Board of Directors 2
Executive Team
– whereof Parent company's
Executive Team
Total

2 Excluding employee representatives

nOteS

ASSA ABLOY AnnuAL repOrt 2009

Note 33 Financial risk management

and financial instruments

Financial risk management
ASSA ABLOY is exposed to a variety of financial risks through
its international business operations. ASSA ABLOY’s units
have carried out financial risk management in accordance
with the ASSA ABLOY Group’s Treasury Policy. The Group’s
financial risk management principles are described below.

Organization and activities
ASSA ABLOY’s Treasury Policy, which is reviewed annually by
the Board of Directors, constitutes a framework of guide-
lines and regulations for the management of financial risks
and financial activities.

ASSA ABLOY’s financial activities are coordinated
centrally and the majority of financial transactions are
conducted by the subsidiary ASSA ABLOY Financial Services
AB, which is the Group’s internal bank. External financial
transactions are conducted by Treasury, which also handles
transactions involving foreign currencies and interest rates.
Treasury achieves significant economies of scale when nego-
tiating borrowing agreements, using interest rate deriva-
tives and handling foreign exchange flows.

Capital structure
The Group’s objective regarding capital structure is to safe-
guard the Group’s ability to continue as a going concern, in
order to provide good returns for shareholders and benefits
for other stakeholders. Maintaining an optimal capital struc-
ture enables the Group to keep the cost of capital as low as
possible. In order to adjust the capital structure in response
to need, the Group can vary the amount paid as dividend
to shareholders, return capital to shareholders, issue new

shares, or sell assets to reduce debt. The Group monitors
capital based on factors such as the net debt/equity ratio.

Net debt is defined as interest-bearing liabilities, includ-

ing negative market values for derivatives, plus pension
provisions, less cash and cash equivalents, other interest-
bearing investments and positive market values for deriva-
tives. The table ‘Net debt and equity’ shows the position at
31 December.

Net debt and equity

SEK M

Long-term interest-bearing receivables
Short-term interest-bearing investments
incl. derivatives
Cash and bank balances
Pension provisions
Long-term interest-bearing liabilities
Current interest-bearing liabilities
incl. derivatives
Total
Equity
Net debt/equity

Group

2008

–256

–688
–1,579
1,182
7,766

7,589
14,013
18,838
0.74

2009

–244

–840
–1,579
1,118
10,692

1,901
11,048
19,334
0.57

Another important variable in the assessment of the Group’s
capital structure is the credit rating that credit ratings
agencies assign to the Group’s liabilities. In order to have
access to both long-term and short-term financing from the
capital markets when needed, it is essential to maintain a
good credit rating. ASSA ABLOY maintains both long-term
and short-term credit ratings from Standard & Poor’s and a
short-term rating from Moody’s.

Maturity profile – financial instruments

SEK M

Long-term bank loans
Long-term capital market loans
Convertible loans
Other long-term liabilities
Short-term bank loans
Commercial papers and short-
term capital market loans
Derivatives

Total by period

Cash and cash equivalents incl.
interest-bearing receivables
Long-term interest-bearing
investments
Accounts receivable
Accounts payable
Net total
Confirmed credit facilities

Adjusted maturity profile

< 1 year

–43
–252
–1,164
–
–1,728

–4,820
94

–7,913

1,989

6,372
–2,909
–2,461
12,055

9,594

31 December 2008

31 December 2009

> 1 < 2
years

–36
–252
–50
–27
–

–
42

> 2 < 5
years

–1,036
–2 148
–1,577
–148
–

–
72

> 5 years

< 1 year

–
–4,317
–
–74
–

–
22

–20
–325
–14
–14
–1,259

–632
38

> 1 < 2
years

–1,020
–986
–409
–116
–

–
81

> 2 < 5
years

–
–4,301
–1,037
–192
–

–
63

> 5 years

–
–4,178
–
–88
–

–
–

–323

–4,837

–4,369

–2,226

–2,450

–5,467

–4,266

198

–125

–4,810

–4,338
–12,055

–125

–4,810

–16,393

2,319

5,618
–2,682
3,029
11,355

14,384

194

–2,256

–5,445
–11,355

–4,238

–2,256

–16,800

–4,238

ASSA ABLOY AnnuAL repOrt 2009

nOteS

note 33 cont.

External financing/net debt

Credit lines/facilities

US Private Placement Program
US Private Placement Program
US Private Placement Program
US Private Placement Program
US Private Placement Program
US Private Placement Program
US Private Placement Program
US Private Placement Program
US Private Placement Program
Multi–Currency RCF
Bank loan
Incentive Program
Incentive Program
Global MTN Program

Other long-term loans
Total long-term loans

Swedish CP Program
Bank loan
Other bank loans
Overdraft facility
Total short-term loans
Total credit lines/facilities

Cash and bank balances
Short-term interest-bearing investments
Long-term interest-bearing investments
Market value derivatives
Pensions
Net debt

1 Loans subject to hedge accounting.

Amount,
SEK M

Carrying
amount,

Maturity

SEK M Currency

Amount
2008

Amount
2009

of which
Parent com-
pany, SEK M

USD
USD
USD
USD
USD
USD
USD
USD
USD
EUR
SEK
EUR
EUR
SEK
SEK
SEK
EUR
EUR
NOK

50
80
53
80
76
50
50
122
70
1,100
1,000
100
38
–
–
–
–
–
–

50
80
53
80
76
50
50
122
70
1,100
1,000
100
38
300
300
250
45
150
350

EUR/SEK
EUR

0/2,637
66

0/632
66

360
Dec 2011
575 May 2012
Dec 2013
378
575 May 2015
Dec 2016
543
360
Apr 2017
360 May 2017
877
Dec 2018
503 May 2020
Jun 2014
Oct 2011
Jun 2012
Jun 2011
Apr 2011
Feb 2012
May 2012
Mar 2014
Jun 2014
Jun 2016

11,355
1,000
1,032
396
15,483

355
34,152

5,000
681
306
1,227
7,214
41,366

Feb 2010

359
6211
377
6211
542
359
359
876
503
0
1,000
1,032
396
300
300
250
464
1,548
430
355
10,692

629
681
306
253
1,869
12,561

–1,579
–740
–244
–68
1,118
11,048

1,000
1,032
396
300
300
250
464
1,548
430

5,720

681

681
6,401

–27

6,374

Rating

Agency

Short-term Outlook Long-term Outlook

Standard & Poor’s A2
P2
Moody’s

Stable
Stable

A –
n/a

Negative

Ratings from both agencies remain unchanged since last
year. The outlook for the long-term rating from Standard &
Poor’s was changed from stable to negative in January 2009.

Financing risk and maturity profile
Financing risk is defined as the risk of being unable to meet
payment obligations as a result of inadequate liquidity
or difficulties in obtaining credit from external sources.
ASSA ABLOY manages liquidity risk on a consolidated basis.
Treasury 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.
According to the Treasury Policy, the available facilities
should include a reserve (facilities confirmed but not used)
equivalent to 10 percent of the Group’s total annual sales.

Maturity profile
The table ‘Maturity profile’ on page 93 shows that debt
maturities are not concentrated in the short term, especially
in view of the credit facility of EUR 1,100 M maturing in
2014, which was unutilized at year-end. Moreover, financial
assets should also be taken into account when evaluating
the maturity profile. The table shows undiscounted future

cash flows related to the Group’s financial instruments at
the balance sheet date, and consequently these amounts
are not found in the balance sheet.

Interest-bearing liabilities
The Group’s long-term loan financing mainly consists of
Private Placement Programs in the USA totaling USD 630
M (630), GMTN-program of SEK 3,292 M (0), Incentive Pro-
grams of EUR 138 M (138) and a bilateral bank loan of SEK
1,000 M (1,000). During the year, long-term financing total-
ing SEK 3,384 M was raised in the form of borrowing on the
capital market as follows:
•

Three bonds in SEK totaling SEK 850 M with a maturity
of 2 to 3 years.
One bond in NOK of NOK 350 M with a maturity of
7 years.
Two Private Placements in EUR of EUR 45 M and EUR
150 M respectively both with a maturity of 5 years.

•

These replaced long-term financing of SEK 2,601 M which
matured during the year, but also replaced some short-term
financing in order to extend the maturity profile.

The Group’s short-term loan financing mainly consists
of two Commercial Paper Programs for a maximum of USD
1,000 M (1,000) and SEK 5,000 M (5,000) respectively.
At year-end, SEK 632 M (3,215) of the Commercial Paper
Programs had been utilized. In addition, substantial credit
facilities are available, mainly in the form of a Multi-Currency
Revolving Credit Facility for a maximum of EUR 1,100 M

nOteS

ASSA ABLOY AnnuAL repOrt 2009

note 33 cont.

(1,100), which was not utilized at all at year-end. According
to the Group’s policy, the average remaining time to matu-
rity for interest-bearing liabilities should not be less than 18
months. At year-end, the average time to maturity, exclud-
ing the pension provision, was 46 months (41). Some of the
Group’s main financing agreements contain a customary
Change of Control clause. The effect of this clause is that
lenders have the right in certain circumstances to demand
renegotiation of conditions or to terminate the agreement
should control of the company change. The bonds issued
during the year have been recognized in the Parent com-
pany balance sheet.

Convertible debenture loans
Incentive 2004 matured during the year without conversion.
Incentive 2006 has a variable interest rate equivalent to
0.9* EURIBOR + 45 basis points. Any conversion of Incentive
2006 will take place in a 180-day period between December
2010 and June 2011. Full conversion at a conversion rate of
EUR 14.60 for Bond 1, EUR 15.90 for Bond 2, EUR 17.30 for
Bond 3 and EUR 18.60 for Bond 4 will add 2,332,350 shares.
The dilution effect of full conversion amounts to 0.6 percent
of share capital and 0.4 percent of the total number of votes.
Incentive 2007 has a variable interest rate equivalent to

0.9* EURIBOR + 35 basis points. Any conversion of Incen-
tive 2007 will take place in a 30-day period in May and June
2012. Full conversion at a conversion rate of EUR 18.00 for
Bond 1, EUR 20.50 for Bond 2, EUR 23.00 for Bond 3 and EUR
25.40 for Bond 4 will add 4,679,610 shares. The dilution
effect of full conversion amounts to 1.2 percent of share
capital and 0.8 percent of the total number of votes.

Full conversion of the two programs will add a total of
7,011,960 shares and result in a dilution effect amounting
to 1.9 percent of share capital and 1.3 percent of the total
number of votes. Incentive 2006 amounts to EUR 38 M and
Incentive 2007 to EUR 100 M.

Currency composition
The currency composition of ASSA ABLOY’s borrowing
depends on the currency composition of the Group’s assets.
ASSA ABLOY uses currency swaps to achieve the desired
currency composition. See the table ‘Net debt by currency’
below.

Cash and cash equivalents and other interest-bearing
receivables
Short-term interest-bearing investments amounted to
SEK 656 M (410) at year-end. In addition, ASSA ABLOY has
long-term interest-bearing receivables of 244 SEK M (256)
and financial derivatives with a positive market value of SEK
100 M (277) which, in addition to cash and cash equivalents,
are included in the definition of net financial debt. Cash and

Net debt by currency

cash equivalents are mainly invested in interest-bearing
instruments with high liquidity from issuers with a credit
rating of at least A-, according to Standard & Poor’s or similar
agency. The average term for cash and cash equivalents was
7.5 days (2.2) at the end of 2009.

The Parent company’s cash and cash equivalents are held

in a sub-account to the Group cash pool.

SEK M

2008

2009

2008

2009

Group

Parent company

Cash and bank
balances
Short-term invest-
ments with maturity
less than 3 months
Cash and cash
equivalents
Short-term invest-
ments with maturity
more than 3 months
Long-term interest-
bearing receivables
Positive market value
derivatives
Total

1,579

352

656

1,931

2,235

256

244

277
2,522

100
2,663

–

–
52

–

–
27

Interest rate risk in cash and cash equivalents
Treasury manages interest rate risk in cash and cash equiva-
lents. Derivative instruments such as interest rate swaps and
FRAs (Forward Rate Agreements) may be used to manage
interest rate risk. The investments are primarily short-term
and the majority of these investments have a maturity of
three months or less. The fixed interest term for these short-
term investments was 11 days (2.2) at the end of 2009. A
downward change of one percentage point in the yield
curve would reduce the Group’s interest income by around
SEK 23 M (20) and the Group’s equity by SEK 16 M (15).

Interest rate risk on borrowing
Changes in interest rates have a direct effect on
ASSA ABLOY’s net interest. Treasury is responsible for iden-
tifying and managing the Group’s interest rate exposure. It
analyzes the Group’s interest rate exposure and calculates
the impact on net income of changes in interest rates on a
rolling 12-month basis. The Group seeks to have a mixture
of fixed rate and variable rate debt and uses interest rate
swaps when it seems necessary. The Treasury Policy stipu-
lates that the average fixed interest term should normally be
24 months. At year-end, the average fixed interest term on
gross debt, excluding pension obligations, was around 26
months (23). An upward change of one percentage point in
the yield curve would increase the Group’s interest expense
by around SEK 75 M (91) and reduce the Group’s equity by
SEK 54 M (67).

SEK M

USD
EUR
SEK
AUD
NOK
KRW
CNY
GBP
Other
Total

ASSA ABLOY AnnuAL repOrt 2009

31 Dec 2008

31 Dec 2009

Net debt excl.
currency swaps

Net debt incl.
currency swaps

Net debt excl.
currency swaps

Net debt incl.
currency swaps

4,713
4,621
4,920
–94
76
487
–473
18
–255
14,013

5,662
4,021
2,048
576
–150
487
–473
936
906
14,013

4,429
3,998
2,525
–15
530
347
–560
–35
–172
11,048

4,650
3,296
2,215
676
390
347
–560
–629
662
11,048

nOteS

note 33 cont.

Currency risk
Currency risk affects ASSA ABLOY mainly through translation
of capital employed and net debt, through translation of
income in foreign subsidiaries, and through the effects on
income of flows of goods between countries with different
currencies.

Financial credit risk
Financial risk management exposes ASSA ABLOY to certain
counterparty risks. Such exposure may arise from the place-
ment of surplus cash as well as from the use of debt securi-
ties and derivative financial instruments.

ASSA ABLOY’s policy is to minimize the potential credit

risk from surplus cash by using cash from subsidiaries to
amortize the Group’s debt. This objective is achieved pri-
marily by cash pools put in place by Treasury. Around 84
percent (78) of the Group’s sales were settled through cash
pools in 2009. The Group may nevertheless deposit surplus
funds on a short-term basis with banks in order to match
debt maturities and cash flow.

Derivative financial instruments are allocated to banks
according to risk limits set in the Treasury policy in order to
limit counterparty risk. Treasury enters into derivative con-
tracts exclusively with banks that have a good rating.

ISDA agreements (full netting of transactions in case of
counterparty default) have been set up in the case of inter-
est rate and currency derivatives.

Commercial credit risk
The Group’s accounts receivable are distributed across a
large number of customers who are spread internationally.
The concentration of credit risk associated with accounts
receivable is therefore limited. The fair value of accounts
receivable corresponds to the carrying amount. Credit risk
from operating activities is monitored by local management
at company level and reviewed by the respective division.

Commodity risk
The Group is exposed to price risk related to purchases of
certain commodities (primarily metals) used in production.
The Group’s policy is to not enter into financial commodity
hedge contracts.

Fair value of financial instruments
Derivative financial instruments such as currency and inter-
est rate forwards are used to the extent necessary. The use of
derivative financial instruments is solely to reduce exposure
to financial risks.

The positive and negative fair values in the table ‘Out-
standing derivative financial instruments’ on page 97 show
the fair values of instruments outstanding at year-end, based
on available fair values, and are the same as the carrying
amounts in the balance sheet. The nominal value represents
the gross value of the contract.

For accounting purposes, financial instruments are classi-
fied into measurement categories in accordance with IAS 39.
The table ‘Financial instruments’ on page 97 provides an over-
view of financial assets and liabilities, measurement category,
and carrying amount and fair value per item.

When calculating fair value only general changes in market

interest rates are taken into account and not credit spread
movements for the company itself.

Transaction exposure
Currency risk in the form of transaction exposure, or the rel-
ative values of exports and imports of goods, is limited in the
Group. The main principle is to allow currency fluctuations
to have an impact on the business as quickly as possible. As
a result of this strategy, only limited portions of current cur-
rency flows are normally hedged.

Transaction flows relating to major currencies
(import + and export –)

Currency exposure

Currency, SEK M

AUD
CAD
CHF
EUR
GBP
NOK
SEK
USD

2008

357
413
–218
385
286
–220
–678
–329

2009

286
434
–234
185
225
–136
–602
–414

Translation exposure of income
The table below shows the impact on the Group’s income
before tax of a 10 percent weakening of the Swedish krona
in relation to the major currencies, while all other variables
remain constant.

Impact on income before tax of a 10 percent weakening
of the SEK

Currency, SEK M

AUD
CNY
DKK
EUR
GBP
NOK
USD

2008

21
14
14
145
13
25
238

2009

26
22
15
131
14
27
227

Translation exposure in the balance sheet
The effect arising on translation of equity is limited by the
fact that financing is largely carried out in local currency.

The capital structure in each country is optimized based

on local legislation. So far as this constraint allows, gear-
ing per currency should reflect the overall gearing for the
whole Group to limit the effect of movements in individual
currencies. Treasury uses currency derivatives to supply the
appropriate funding and to eliminate undesirable currency
exposure.

The table ‘Net debt by currency’ on page 95 shows the
use of currency forward contracts in association with fund-
ing, for the major currencies. The forward contracts are used
to neutralize the exposure arising between external debt
and internal needs.

nOteS

ASSA ABLOY AnnuAL repOrt 2009

note 33 cont.

Outstanding derivative financial instruments
at 31 December

31 December 2008

31 December 2009

Positive fair
value

Negative
fair value

Nominal

value

Positive fair
value

Negative
fair value

Nominal
value

124
153
–
277

–72
–20
–
–92

4,312
2,411

6,723

5
95
–
100

–13
–17
–2
–32

3,629
2,326
1,000
6 ,955

2008

2009

IAS 39
category*

Carrying
amount

Fair value

Carrying
amount

Fair value

1
1
1
5
2

1
1

2
4

4
4
4
2
4
4

317
6,372
479
153
124
277
58
1,931

1,245
5,003
6,248
2,614
151
6,400
92
2,909
729

317

6,372
479
153
124
277
58
1,931

1,433
5,433
6,866
2,614
151
6,400

92
2,909
729

334
5,618
541
95
5
100
84
2,235

1,242
8,021
9,263
1,429
176
1,869
32
2,682
895

334
5,618
541
95
5
100
84
2,235

1,242
8,134
9,376
1,429
176
1,869
32
2,682
895

Instrument, SEK M

Foreign exchange forwards, funding
Interest rate swaps
Forward Rate Agreements
Total

Financial instruments: carrying amounts
and fair values by measurement category

SEK M

Financial assets
Other long-term financial assets
Accounts receivable
Other current receivables
Derivative instruments – hedge accounting
Derivative instruments – held for trading
Derivative instruments, total
Short-term investments
Cash and cash equivalents

Financial liabilities
Long-term loans – hedge accounting
Long-term loans – not hedge accounting
Long-term loans, total
Convertible debenture loans
Other long-term liabilities
Current liabilities – not hedge accounting
Derivative instruments – held for trading
Accounts payable
Other current liabilities

* Applicable IAS 39 categories:
1 = Loans and other receivables.
2 = Financial instruments at fair value through profit or loss.
3 = Available-for-sale financial assets.
4 = Financial liabilities at amortized cost.
5 = Derivative hedge accounting.

Financial instruments: measured at fair value

SEK M

Financial assets
Derivative instruments

Financial liabilities
Long-term loans – hedge accounting
Derivative instruments

2008

2009

Carrying
amounts

Quoted
prices

Observ-
able data

Non-
observ-
able data

Carrying
amounts

Quoted
prices

Observ-
able data

Non-
observ-
able data

124

1,245
92

–

–
–

124

1,245
92

–

–
–

1,242
32

–

–
–

1,242
32

–

–
–

ASSA ABLOY AnnuAL repOrt 2009

nOteS

Note 34 Income statement – reclassification

Income statement before and after reclassification

SEK M

Sales
Cost of goods sold
Gross income

Selling expenses
Administrative expenses
Research and Development costs
Other operating income
and expenses
Share of earnings in associates
Operating income
Financial income and expense

Income before tax
Tax on income
Net income

2008

2009

Before
reclassi fication

Reclassi-
fication

After
reclassification

Before
reclassification

Reclassi-
fication

After
reclassification

34,918
–21,532
13,386

–6,129
–2,067
–890

–43
12
4,269
–770

3,499
–1,061
2,438

–89
–311
–400

411
0
–11

0
0
0
0

0
0
0

34,829
–21,843
12,986

–5,718
–2,067
–901

–43
12
4,269
–770

3,499
–1,061
2,438

35,049
–21,489
13,560

–6,242
–1,915
–891

–150
12
4,374
–634

3,740
–1,081
2,659

–86
–291
–377

406
0
–29

0
0
0
0

0
0
0

34,963
–21,780
13,183

–5,836
–1,915
–920

–150
12
4,374
–634

3,740
–1,081
2,659

The Group has made a reclassification that affects direct distribution costs and depreciation on capitalized product develop-
ment expenditure. The reason is to give a true and fair view of the allocation between direct and indirect costs as well as of
product development expenses. In order to maintain comparability, the financial statements for 2008 and 2009 have been
adjusted. The reclassification involves the transfer of direct distribution costs from Selling expenses and Administrative
expenses, and where appropriate from Sales, to Cost of goods sold. In addition, depreciation on product development has
been moved from Cost of goods sold to Selling expenses and Administrative expenses. Both these adjustments affect Gross
income. Operating income is not affected.

nOteS

ASSA ABLOY AnnuAL repOrt 2009

VingCard secures customer satisfaction at Five-Star hotel in thailand

the installation of VingCard’s contactless electronic door
locks Signature rFID at Grand Millennium Sukhumvit
Bangkok is geared to meet the sophisticated needs and
requirements of business travelers.

the radio Frequency Identification (rFID) locks allow for
contactless guest room entry and are compatible with next-
generation nFC cell phones.

“We needed locks with the strength and efficiency to
keep up with the demands of the property, and Signature

rFID presented our hotel with the perfect solution,”
said Mr tang Kwok Seng, Group Director of engineering,
Millennium & Copthorne International.

“the ability to receive important information from
each keycard has not only increased the productivity and
efficiency of our staff, but it keeps our guests very happy
because the contact less lock is more intuitive to use and
enhances the overall guest experience.”

ASSA ABLOY AnnuAL repOrt 2009

nOteS

Comments on five years in summary

2005
Sales were relatively weak at the start of the year but then
steadily improved, which resulted in good organic growth
for the full year. The Group’s performance was founded on
strong demand on the important US market. A number of
small companies were acquired, mainly in the Asia Pacific
and Global Technologies divisions.

The Leverage & Growth program was concluded at year-

end. This program contributed to increasing the Group’s
efficiency and productivity. The operating margin and oper-
ating cash flow both improved during the year. Johan Molin
succeeded Bo Dankis as President and CEO.

ASSA ABLOY strengthened its position by focusing on
customer value in both traditional businesses and segments
with rather higher market growth, such as electromechani-
cal locks, automatic doors, access control systems and iden-
tification technology.

2006
This was a very good year for ASSA ABLOY, with the highest
organic growth in the company’s history and a substantial
improvement in profitability. ASSA ABLOY’s robust perfor-
mance was based on strong economic growth in the Group’s
most important markets in Europe and North America,
as well as success in fast-growing segments such as elec-
tromechanical locks, access control, automatic doors and
identification technology. The acquisition rate increased
and acquisitions included Fargo Electronics, a global leader
in the fast-growing segment of secure card issuance.

A three-year restructuring program to realize synergies
and increase efficiency in the Group’s manufacturing units
was launched during the year. This program means that a
major part of production will switch focus from full produc-
tion to concentrate on final assembly. Some production will
be relocated to low-cost countries, resulting in the closure
of a number of production units.

Total restructuring costs amounted to SEK 1,274 M
and the program is predicted to produce annual savings of
SEK 600 M when fully implemented in 2009.

Sales volume growth, acquisitions and the restructuring
measures implemented contributed to the strong increase
in operating income.

2007
The year saw strong growth for ASSA ABLOY, combined
with continued very satisfactory growth in earnings. All
five divisions showed growth, increased profitability and
an improved return. ASSA ABLOY’s strong performance
was based on long-term structural growth in demand in
the Group’s most important markets in Europe and North
America, increasing demand in new markets, and successes

in fast-growing segments such as electromechanical locks,
access control, secure smart-card issuance, automatic doors
and identification technology. The acquisition rate remained
high during the year and major acquisitions included Bao-
dean (China), iRevo (Korea), Aontec (Irish Republic), Power-
shield (Northern Ireland), Pemko (North America) and
Pyropanel (Australia).

The successful implementation of the three-year restruc-
turing program for the Group’s manufacturing units contin-
ued during the year. All 50 projects are proceeding accord-
ing to plan and more than 1,300 employees out of a planned
total of 2,000 have now left the Group. By year-end 2007,
cost savings were running at over 60 percent of the final tar-
get of achieving annual savings of SEK 600 M in 2009.

Sales volume growth, acquisitions, price management

and the restructuring measures implemented, as well as
continuous improvements in production, administration
and market development, contributed to the strong finan-
cial performance.

2008
2008 was a record year for ASSA ABLOY, with increased sales
and profit due to focused efforts to increase demand mainly
on the commercial and institutional markets. The Group
increased its investments in product development and
more products than ever were launched on the market. The
economic situation weakened toward the end of the year as
the financial crisis had a negative impact on investments in
new construction.

2009
The financial crisis led to a downturn in both the housing
and commercial construction markets worldwide, which
was unprecedented in the Group’s history. ASSA ABLOY
was nevertheless able to maintain good profitability and
strengthen its market position even under very trying mar-
ket conditions. Efficient product development with a strong
customer focus, a stronger market presence and continued
cost cutting contributed substantially to the good perfor-
mance. Cash flow and working capital utilization showed
positive development during the year.

Cost adjustments in the form of staff redundancies and

the relocation of components and basic products to low-
cost countries continued at a high rate during the year. A
third restructuring program was launched toward the end of
the year. The new products launched were well received by
customers and strengthened ASSA ABLOY’s market-leading
position in lock and door opening solutions.

Eight acquisitions were made during the year, consolidat-

ing the Group’s position in industrial and automatic doors
and increasing annual sales by around SEK 1,200 M.

100

Five YeArS in SummArY

ASSA ABLOY AnnuAL repOrt 2009

Five years in summary

Amounts in SEK M unless stated otherwise

2005

2006

2007

2008

2009

Sales and income

Sales
Organic growth, %
Acquired growth, %
Operating income before depreciation/amortization (EBITDA)
Depreciation
Operating income (EBIT)
Income before tax (EBT)
Net income

Cash flow

Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash flow
Operating cash flow

Capital employed and financing

Capital employed
– of which, other intangible and tangible assets
– of which, shares in associates
– of which, goodwill
Net debt
Minority interest
Shareholders' equity, excluding minority interest

Data per share, SEK

Earnings per share after tax and before dilution
Earnings per share after tax and dilution (EPS)
Shareholders' equity per share after dilution
Dividend per share
Price of Series B share at year-end

Key data

Operating margin (EBITDA), %
Operating margin (EBIT), %
Profit margin (EBT), %
Return on capital employed, %
Return on capital employed excluding items affecting
comparability, %
Return on shareholders' equity, %
Equity ratio, %
Net debt / Equity ratio, times
Interest coverage ratio, times
Interest on convertible debenture loan after tax
Number of shares, thousands
Number of shares after dilution, thousands
Average number of employees

27,802
5
1
4,960
–882
4,078
3,556
2,613

3,153
–1,052
–2,027
73
3,702

26,653
6,064
37
15,716
12,240
71
14,342

7.13
6.97
42.85
3.25
125.00

17.8
14.7
12.8
15.9

15.9
18.1
42.8
0.85
8.2
33.1
365,918
378,718
29,578

31,137
9
3
5,6691
–898
4,7711
2,626
1,756

2,968
–3,871
1,203
300
3,528

27,205
6,263
33
16,683
13,560
60
13,585

4.77
7.991
39.13
3.25
149.00

18.21
15.3 1
8.4
12.1

17.1
11.5
38.4
0.99
5.1
43.6
365,918
376,033
31,243

33,550
7
5
6,366
–909
5,458
4,609
3,368

3,871
–2,127
–1,568
176
4,808

28,621
6,782
39
17,270
12,953
201
15,467

9.18
9.02
46.76
3.60
129.75

19.0
16.3
13.7
18.4

18.4
21.0
41.5
0.83
7.4
55.0
365,918
380,713
32,267

34,8293
0
4
6,4471
–921
5,5261
3,499
2,438

4,369
–2,648
–1,311
410
4,769

32,850
7,945
38
20,669
14,013
163
18,674

6.60
9.211
55.91
3.60
88.50

34,9633
–12
3
6,4261
–1,014
5,4131
3,740
2,659

5,924
–1,835
–3,741
348
6,843

30,382
7,541
39
20,333
11,048
162
19,172

7.18
9.221
54.76
3.602
137.80

18.51.3
15.91.3
10.0
13.3

18.41.3
15.51.3
10.7
13.1

17.2
12.8
41.9
0.74
5.7
81.0
365,918
380,713
32,723

16.2
12.7
45.4
0.57
7.2
31.9
365,918
372,931
29,375

1 Excluding items affecting comparability in 2006, 2008 and 2009.
2 For 2009, as proposed by the Board.
3 Reclassification has been made for 2008 and 2009. For more information see Note 34. Reclassification has not been made for 2005–2007.

Avkastning på sysselsatt kapital

Return on Capital employed¹

Rörelsemarginal

Operating margin (EBIT)¹

Antal anställda

Average number of employees

08 09

Number

35,000

30,000

25,000

20,000

15,000

10,000

5,000

08 09

Five YeArS in SummArY

101

1 Excluding items affecting compara-

bility 2006, 2008 and 2009.

ASSA ABLOY AnnuAL repOrt 2009

Quarterly information

THE GROUP IN SUMMARY

(Amounts in SEK M
unless stated otherwise)

Sales4
Organic growth
Gross income excluding items
affecting comparability4
Gross income/Sales 4
Operating income before
depreciation (EBITDA) excluding
restructuring costs
Gross margin (EBITDA)4
Depreciation
Operating income (EBIT) excluding
Items affecting comparability
Operating margin (EBIT)4
Items affecting comparability3
Operating income (EBIT)
Net financial items
Income before tax (EBT)
Profit margin (EBT)4
Tax

Net income

Allocation of net income

Parent company shareholders
Minority interests

OPERATING CASH FLOW

Operating income (EBIT)
Restructuring costs
Depreciation
Net operating capital expenditure
Change in working capital
Paid and received interest
Non-cash items

Operating cash flow 1
Operating cash flow/
Income before tax

CHANGE IN NET DEBT

Net debt at start of period
Operating cash flow
Restructuring payments
Tax paid
Acquisitions/Disposals
Dividend
Exchange rate differences

Net debt at end of period
Net debt/Equity ratio

NET DEBT

Long-term interest-bearing receivables
Short-term interest-bearing
investments including derivatives
Cash and bank balances
Pension obligations
Long-term interest-bearing liabilities
Short-term interest-bearing liabilities
including derivatives

Q1
2008

8,181
0%

Q2
2008

8,503
5%

Q3
2008

8,701
1%

Q4
2008

9,444
–4%

Full
year
2008

34,829
0%

3,287
40.2%

3,447
40.5%

3,491
40.1%

3,792
40.2%

14,017
40.2%

1,476
18.0%
–232

1,244
15.2%
–
1,244
–189
1,055
12.9%
–283

772

772
0

Q1
2008

1,244
–
232
–164
–581
–162
14

1,599
18.8%
–222

1,378
16.2%
–
1,378
–190
1,188
13.9%
–323

865

857
8

Q2
2008

1,378
–
222
–173
–113
–206
–26

1,669
19.2%
–234

1,435
16.5%
–247
1,188
–207
980
11.2%
–271

709

700
8

Q3
2008

1,188
247
234
–199
–111
–134
–36

1,703
18.0%
–233

1,469
15.6%
–1,010
460
–184
276
2.9%
–184

6,447
18.5%
–921

5,526
15.9%
–1,257
4,269
–770
3,499
10.0%
–1,061

2,438

84
9

Q4
2008

460
933
233
–293
801
–217
–1

2,413
25

Full
year
2008

4,269
1,180
921
–829
–5
–718
–49

Q1
2009

8,859
–12%

3,550
40.1%

1,594
18.0%
–266

1,328
15.0%
–109
1,219
–205
1,015
11.4%
–296

718

716
3

Q1
2009

1,219
109
266
–187
–316
–193
–60

Q2
2009

8,899
–14%

3,502
39.4%

1,601
18.0%
–261

1,340
15.1%
–
1,340
–165
1,176
13.2%
–323

852

843
9

Q2
2009

1,340
–
261
–186
346
–157
–20

Q3
2009

8,405
–13%

3,370
40.1%

1,584
18.8%
–237

1,346
16.0%
–
1,346
–159
1,187
14.1%
–300

888

876
12

Q3
2009

1,346
–
237
–99
612
–38
67

Q4
2009

8,799
–8%

Full
year
2009

34,963
–12%

3,603
41.0%

14,025
40.1%

1,648
18.7%
–249

1,398
15.9%
–930
468
–106
362
4.1%
–162

6,426
18.4%
–1,014

5,413
15.5%
–1,039
4,374
–634
3,740
10.7%
–1,081

200

2,659

192
9

Q4
2009

468
930
249
–191
818
–119
140

2,626
32

Full
year
2009

4,374
1,039
1,014
–664
1,460
–507
127

583

1,081

1,189

1,916

4,769

838

1,584

2,125

2,296

6,843

0.55

0.91

0.972

1.492

1.022

0.752

1.35

1.79

1.782

1.432

Full
year
2009

14,013
–6,843
676
907
1,171
1,317
–193

11,048
0.57

Q1
2008

12,953
–583
111
127
126
–
–320

12,414
0.79

Q1
2008

–102

–332
–953
1,151
7,707

Q2
2008

Q3
2008

12,414 13,549
–1,189
–1,081
126
97
81
251
717
473
–
1,317
726
78

13,549
0.87

14,010
0.80

Q2
2008

–83

–191
–1,221
1,150
7,683

Q3
2008

–89

–133
–1,534
1,131
7,539

Q4
2008

14,010
–1,916
152
283
503
–
981

14,013
0.74

Q4
2008

–256

–688
–1,579
1,182
7,766

Full
year
2008

12,953
–4,769
485
742
1,819
1,317
1,466

14,013
0.74

Q1
2009

14,013
–838
144
298
263
–
437

14,317
0.71

Q2
2009

14,317
–1,584
224
397
66
1,317
–498

14,239
0.74

Q3
2009

14,239
–2,125
147
2
511
–
–341

12,432
0.67

Q4
2009

12,432
–2,296
161
210
331
–
210

11,048
0.57

Q1
2009

–269

Q2
2009

–256

Q3
2009

–236

Q4
2009

–244

–2,632
–1,280
1,222
8,659

–2,250
–1,800
1,200
11,227

–1,989
–1,303
1,093
10,471

–840
–1,579
1,118
10,692

4,943

6,212

7,096

7,589

8,617

6,117

4,395

1,901

Total

12,414

13,549

14,010

14,013

14,317

14,239

12,432

11,048

102

QuArterLY inFOrmAtiOn

ASSA ABLOY AnnuAL repOrt 2009

CAPITAL EMPLOYED AND FINANCING

Capital employed
– of which, other intangible

and tangible assets

– of which, shares in associates
– of which, goodwill
Net debt
Minority interests
Shareholders' equity,
excluding minority interests

DATA PER SHARE, SEK

Earnings per share after tax
and before dilution
Earnings per share after tax and dilution
Earnings per share after tax and dilution
excluding items affecting comparability
Shareholders' equity per share
after dilution

NUMBER OF SHARES

Number of shares before dilution,
thousands
Number of shares after dilution,
thousands
Weighted average number of shares
after dilution, thousands

Q 1
2008

Q 2
2008

Q 3
2008

Q 4
2008

Q 1
2009

Q 2
2009

Q 3
2009

Q 4
2009

28,116

29,045

31,538

32,850

34,540

33,494

31,108

30,382

6,480
39
16,508
12,414
181

6,572
40
17,068
13,549
188

7,116
43
18,851
14,010
211

7,945
38
20,669
14,013
163

8,214
55
21,443
14,317
163

7,972
54
20,857
14,239
152

7,379
52
19,992
12,432
149

7,541
39
20,333
11,048
162

15,521

15,308

17,317

18,674

20,060

19,110

18,526

19,172

Q1
2008

Q2
2008

Q3
2008

Q4
2008

Full
year
2008

Q1
2009

Q2
2009

Q3
2009

Q4
2009

2.11
2.08

2.34
2.30

1.91
1.89

0.23
0.29

6.60
6.55

1.96
1.92

2.30
2.25

2.39
2.36

0.52
0.54

Full
year
2009

7.18
7.06

2.08

2.30

2.38

2.45

9.21

2.20

2.25

2.36

2.41

9.22

46.64

46.13

51.61

55.91

59.55

54.28

53.47

55.29

54.76

Mar
2008

Jun
2008

Sep
2008

Dec
2008

Full
year
2008

Mar
2009

Jun
2009

Sep
2009

Dec
2009

Full
year
2009

365,918 365,918 365,918 365,918 365,918 365,918 365,918 365,918 365,918 365,918

380,713 380,713 380,713 380,713 380,713 380,713 379,687 372,931 372,931 372,931

380,713 380,713 380,713 380,713 380,713 380,713 380,197 377,748 376,534 376,534

1 Excluding restructuring payments.
2 Income before tax excluding items affecting comparability.
3 Items affecting comparability consist of restructuring costs for 2008 and 2009. For 2008 items affecting comparability also consist of non-recurring costs

totaling SEK 77 M.

4 Reclassification has been made. For further information see Note 34.

Definitions of key data terms Organic growth

Change in sales for comparable units after adjustments for
acquisitions and exchange-rate effects.

Operating margin (EBITDA)
Operating income before depreciation and amortization as
a percentage of sales.

Operating margin (EBIT)
Operating income as a percentage of sales.

Profit margin (EBT)
Income before tax as a percentage of sales.

Operating cash flow
See the table in operating cash flow for information regard-
ing detailed items.

Net capital expenditure
Investments in fixed assets less disposals of fixed assets.

Depreciation
Depreciation/amortization of tangible and intangible fixed
assets.

Net debt
Interest-bearing liabilities less interest-bearing assets.

Capital employed
Total assets less interest-bearing assets and non-interest-
bearing liabilities including deferred tax liability.

Equity ratio
Shareholders’ equity as a percentage of total assets.

Interest coverage ratio
Income before tax plus net interest divided by net interest.

Return on shareholders’ equity
Net income excluding minority interests, plus interest
expenses after tax for convertible debenture loans, as a per-
centage of average shareholders’ equity (excluding minor-
ity interests) after dilution.

Return on capital employed
Income before tax plus net interest as a percentage of aver-
age capital employed.

Earnings per share after tax and before dilution
Net income excluding minority interests divided by
weighted average number of shares before dilution.

Earnings per share after tax and dilution
Net income excluding minority interests, plus interest
expenses after tax for convertible debenture loans, divided
by weighted average number of shares after dilution.

Shareholders’ equity per share after dilution
Equity excluding minority interests, plus convertible deben-
ture loan, divided by number of shares after dilution.

ASSA ABLOY AnnuAL repOrt 2009

QuArterLY inFOrmAtiOn

103

proposed disposition of earnings

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

Net income for the year: SEK 1,536 M
Retained earnings brought forward: SEK 2,343 M
TOTAL: SEK 3,879 M

The Board of Directors and the President and CEO propose that a dividend of SEK 3.60 per share,
a maximum total of SEK 1,317 M, be distributed to shareholders and that the remainder, SEK 2,562 M,
be carried forward to the new financial year.

Tuesday 27 April 2010 has been proposed as the record date for dividends.
If the Annual General Meeting confirms this proposal, dividends are expected to be distributed by Euroclear Sweden AB
on Friday 30 April 2010.

The Board of Directors and the President and CEO declare that the consolidated accounts have been prepared in
accordance with International Financial Reporting Standards, IFRS, as adopted by the EU and give a true and fair view
of the Group’s financial position and results. The Parent company’s annual accounts have been prepared in accordance with
generally accepted accounting principles in Sweden and give a true and fair view of the Parent company’s
financial position and results.

The Report of the Board of Directors for the Group and the Parent company gives a true and fair review of the
development of the Group’s and the Parent company’s business operations, position and results, and describes
significant risks and uncertainties to which the Parent company and the companies that make up the Group are exposed.

Stockholm, 11 February 2010

Carl Douglas
Board member

Eva Lindqvist
Board member

Gustaf Douglas
Chairman

Birgitta Klasén
Board member

Jorma Halonen
Board member

Johan Molin
President and CEO

Sven-Christer Nilsson
Board member

Lars Renström
Board member

Ulrik Svensson
Board member

Seppo Liimatainen
Employee representative

Mats Persson
Employee representative

Our audit report was issued on 11 February 2010

PricewaterhouseCoopers AB

Peter Nyllinge
Authorized Public Accountant
Auditor in Charge

Bo Karlsson
Authorized Public Accountant

104

prOpOSed diSpOSitiOn OF eArningS

ASSA ABLOY AnnuAL repOrt 2009

Audit report

To the Annual General Meeting
of the shareholders of ASSA ABLOY AB
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 and CEO of
ASSA ABLOY AB for the year 2009. (The company’s annual
accounts are presented on pages 54–104 of the printed
version of this document.) The Board of Directors and the
President and CEO are responsible for these accounts and
the administration of the company as well as for the applica-
tion of the Annual Accounts Act when preparing the annual
accounts and the application of International Financial
Reporting Standards, IFRS, as adopted by the EU and the
Annual Accounts Act when preparing the consolidated
accounts. Our responsibility is to express an opinion on the
annual accounts, the consolidated accounts and the admin-
istration 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 reason-
able assurance that the annual accounts and the consoli-
dated 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 and
CEO and significant estimates made by the Board of Direc-
tors and the President and CEO when preparing the annual
accounts and consolidated accounts as well as evaluat-
ing 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 and
CEO. We also examined whether any Board member or the
President and CEO has, in any other way, acted in contraven-
tion 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 have been prepared in accordance
with the Annual Accounts Act and give a true and fair view of
the company’s financial position and results of operations in
accordance with generally accepted accounting principles
in Sweden. The consolidated accounts have been prepared
in accordance with International Financial Reporting Stan-
dards, IFRS, as adopted by the EU and the Annual Accounts
Act and give a true and fair view of the Group’s financial
position and results of operations. The statutory administra-
tion report is consistent with the other parts of the annual
accounts and the consolidated accounts.

We recommend to the Annual General Meeting of share-

holders that the income statements and balance sheets of
the Parent company and the Group be adopted, that the
profit of 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 and
CEO be discharged from liability for the financial year.

Stockholm, 11 February 2010

PricewaterhouseCoopers AB

Peter Nyllinge
Authorized Public Accountant
Auditor in Charge

Bo Karlsson
Authorized Public Accountant

ASSA ABLOY AnnuAL repOrt 2009

Audit repOrt

105

Corporate governance report

ASSA ABLOY is a Swedish public limited liability company
with registered office in Stockholm, Sweden.

The Group’s corporate governance is based on, among

equivalent to 33–50 percent of earnings after standard tax,
but always taking into account ASSA ABLOY’s long-term
financing requirements.

other things, its articles of association, the Swedish Com-
panies Act and the rules and regulations of NASDAQ OMX
Stockholm. ASSA ABLOY applies the Swedish Code of Cor-
porate Governance and is considered, at the end of 2009, to
be in compliance with all of its provisions.

The Corporate Governance Report describes how corpo-
rate governance has been conducted at ASSA ABLOY during
the 2009 financial year. This report has not been examined
by the company’s auditors.

ASSA ABLOY’s objective is that its activities should gen-
erate good long-term returns for its shareholders and other
stakeholders. An effective scheme of corporate governance
for ASSA ABLOY can be summarized in a number of interact-
ing components, which are described below.

orting
Financial rep

Share-
holders
General Meeting
Nomination
Committee

Board of Directors
Audit Committee
Remuneration Committee

CEO and Executive Team
Management philosophy
Guidelines and policies
Internal control and risk management

End

Decentralized organization

Shareholders
At year-end, ASSA ABLOY had 22,014 shareholders. The
principal shareholders are Investment AB Latour and SäkI
(9.6 percent of the share capital and 29.7 percent of the
votes) and Melker Schörling AB (4.0 percent of the share
capital and 11.6 percent of the votes). Foreign shareholders
accounted for 53 percent of the share capital and 36 per-
cent of the votes. The ten largest shareholders accounted
for 37 percent of the share capital and 57 percent of the
votes.

Share capital and voting rights
ASSA ABLOY’s share capital amounted at year-end to SEK
365,918,034 distributed among 19,175,323 Series A shares
and 346,742,711 Series B shares. Each Series A share carries
ten votes and each Series B share one vote. All shares give
the shareholders equal rights to the company’s assets and
earnings.

Share and dividend policy
ASSA ABLOY’s Series B share is listed on the NASDAQ OMX
Stockholm Large Cap list. At year-end, ASSA ABLOY’s mar-
ket capitalization amounted to SEK 50,423 M. The Board’s
objective is that, in the long term, the dividend should be

General Meeting
Shareholders’ rights to decide on the affairs of ASSA ABLOY
are exercised at the General Meeting. Shareholders who
are registered in the share register on the record day and
have duly notified their intention to attend are entitled to
take part in the General Meeting, either in person or via
a proxy. Resolutions at the General Meeting are normally
passed by simple majority. However, on certain matters the
Swedish Companies Act prescribes that a proposal should
be supported by a higher majority. Individual shareholders
who wish to have an issue raised at the General Meeting
can apply to ASSA ABLOY’s Board of Directors at a special
address published on the company’s website well before
the Meeting.

The Annual General Meeting should be held within six
months of the end of the company’s financial year. Matters
considered at the Annual General Meeting include: a divi-
dend; adoption of the income statement and balance sheet;
discharge of the Board of Directors and the CEO from liabil-
ity; election of board members and Chairman of the Board;
appointment of the Nomination Committee and auditors;
determination of remuneration guidelines for senior man-
agement and fees for the Board of Directors and auditors.
An Extraordinary General Meeting may be held if the Board
of Directors considers this necessary or if ASSA ABLOY’s
auditors or shareholders holding at least 10 percent of the
shares so request.

2009 Annual General Meeting
The Annual General Meeting in April 2009 was attended
by shareholders representing 55 percent of the company’s
share capital and 70 percent of the votes.

At the Annual General Meeting, Gustaf Douglas, Carl
Douglas, Birgitta Klasén, Eva Lindqvist, Johan Molin, Sven-
Christer Nilsson, Jorma Halonen, Lars Renström and Ulrik
Svensson were re-elected as members of the Board. Gustaf
Douglas was re-elected as Chairman of the Board.

The Meeting approved a dividend of SEK 3.60 per share,
in accordance with the proposal of the Board and the CEO.
In addition, the Meeting passed a resolution on remunera-
tion guidelines for senior management and fees payable
to the Board, and appointed members of the Nomination
Committee prior to the 2010 Annual General Meeting.

Nomination Committee
The Nomination Committee prior to the 2010 Annual Gen-
eral Meeting comprises Mikael Ekdahl (Melker Schörling
AB), Gustaf Douglas (Investment AB Latour and SäkI), Mag-
nus Landare (Alecta), Marianne Nilsson (Swedbank Robur)
and Per-Erik Mohlin (SEB Funds/SEB Trygg Liv). Mikael Ekdahl
is Chairman of the Nomination Committee. If a shareholder
represented by one of the members of the Nomination
Committee ceases to be among the major shareholders

106

COrpOrAte gOvernAnCe repOrt

ASSA ABLOY AnnuAL repOrt 2009

in ASSA ABLOY, the Committee has the right to appoint
another representative of one of the major shareholders
to replace such a member. The same applies if a member
of the Nomination Committee ceases to be employed by
such a shareholder or leaves the Committee before the
2010 Annual General Meeting for any other reason. During
the year the Nomination Committee appointed Magnus
Landare to replace Staffan Grefbäck and Per-Erik Mohlin to
replace Mats Tunér.

The Nomination Committee has the task of preparing,
on behalf of the shareholders, decisions on the election of
the Chairman and other members of the Board of Directors,
the appointment of the auditor, the election of the Chair-
man of the Annual General Meeting, the appointment of the
Nomination Committee prior to the Annual General Meet-
ing, and fees and associated matters.

The Board’s rules of procedure and instructions for the divi-
sion of duties between the Board and the CEO are updated
and approved at least once a year. The Board has also issued
written instructions specifying how financial reporting to
the Board should be carried out.

In addition to leading the work of the Board, the Chair-
man should continuously monitor the Group’s operations
and development through contact with the CEO. The
Chairman should consult the CEO on strategic issues and
represent the company in matters concerning the owner-
ship structure. The Chairman should also, when necessary,
take part in particularly important external discussions and,
in consultation with the CEO, in other matters of particular
significance. The Chairman should ensure that the work of
the Board is evaluated annually, and that new members of
the Board receive appropriate training.

Prior to the 2010 Annual General Meeting, the Nomina-

The Board has at least four scheduled meetings and one

tion Committee has made an assessment of whether the
current Board is appropriately composed and fulfills the
demands made on the Board by the company’s present
situation and future direction. The annual evaluation of the
Board was part of the basis for this assessment. The search
for suitable board members is carried out throughout the
year and proposals for new board members are based in
each individual case on a profile of requirements estab-
lished by the Nomination Committee.

Shareholders who wish to submit proposals to the
Nomination Committee can do so by emailing nomination-
committee@assaabloy.com. The Nomination Committee’s
proposals are published at the latest in conjunction with the
formal notification of the Annual General Meeting, which is
expected to be issued around 22 March 2010.

Board of Directors
In accordance with the Swedish Companies Act, the Board
of Directors is responsible for the organization and adminis-
tration of the Group and for ensuring satisfactory control of
bookkeeping, asset management and other financial circum-
stances. The Board decides on the Group’s overall objectives,
strategies and policies, as well as on acquisitions, divestments
and investments. The Board approves the Annual Report
and Interim Reports, proposes a dividend and remuneration
guidelines for senior management to the Annual General
Meeting, and makes decisions concerning the Group’s finan-
cial structure. The Board’s other duties include:
•

continuously evaluating the company’s operational
management, including the work of the CEO,
ensuring that there are effective systems in place for
monitoring and control of the company’s operations,
ensuring that the company’s information provision is
transparent, accurate, relevant and reliable,
ensuring that there is satisfactory control of the compa-
ny’s compliance with laws and other regulations apply-
ing to the company’s operations,
ensuring that necessary ethical guidelines for the com-
pany’s conduct are established.

•

meeting following election per year. The scheduled meet-
ings take place in connection with the company’s publica-
tion of its year-end or quarterly results. At least once a year
the Board visits, and makes an in-depth review of one of
the Group’s businesses. In addition, extra board meetings
are held when necessary. All meetings follow an approved
agenda. Prior to each meeting, a draft agenda including
documentation relating to each point is sent to all board
members.

The Board has a Remuneration Committee and an Audit
Committee. The purpose of these Committees is to deepen
and streamline the work of the Board and to prepare mat-
ters in these areas. The Committees themselves have no
decision-making powers. The members of the Committees
are appointed annually by the Board at the board meeting
following election. Instructions for the Committees are
included in the Board’s working procedures.

The Board’s work during 2009
During the year the Board held eight meetings, including
two by telephone. All board members were present at these
meetings. At the scheduled board meetings, the President
and CEO reported on the Group’s performance and financial
position, including the outlook for the coming quarters.
Investments, acquisitions and divestments were also con-
sidered. All acquisitions and divestments with a value (on
a debt-free basis) exceeding SEK 100 M are decided by the
Board. This amount presumes that the matter relates to
acquisitions or divestments within the framework of the
strategy agreed by the Board.

More important matters dealt with by the Board during
the year included the acquisition of Ditec and Pan Pan. Fur-
ther, revised policies on insider issues, external information
provision and pension financing were adopted. During the
year the Board also conducted an in-depth review of EMEA’s
operations and visited the American operations in New
Haven.

ASSA ABLOY AnnuAL repOrt 2009

COrpOrAte gOvernAnCe repOrt

107

Corporate governance report

Remuneration Committee
During 2009 the Remuneration Committee comprised
Gustaf Douglas (Chairman) and Sven-Christer Nilsson.
The Remuneration Committee’s task is to draw up

remuneration guidelines for senior management, which the
Board proposes to the Annual General Meeting for resolu-
tion. The Board’s proposal for guidelines prior to the 2010
Annual General Meeting can be seen on pages 55–56. The
Remuneration Committee also addresses matters regard-
ing salaries, bonus, pension, severance pay and incentive
programs for the CEO and other senior management.

The Committee held three meetings during the year at
which all members were present. The Remuneration Com-
mittee has during the year 2009, among other things, pre-
pared the proposal for a long-term incentive programme.
The meetings of the Remuneration Committee are min-
uted; the minutes are sent out with material for the Board
and a verbal report is given at board meetings.

Audit Committee
During 2009 the Audit Committee comprised Ulrik
Svensson (Chairman), Birgitta Klasén and Lars Renström.

The duties of the Audit Committee include the continu-
ous quality assurance of ASSA ABLOY’s financial reporting.
Regular communication is maintained with the company’s
auditor on matters including the focus and scope of the
audit. The Audit Committee is also responsible for evaluat-
ing the audit assignment and informing the Board of Direc-
tors and the Nomination Committee of the results, as well
as continuously monitoring the current risk status of legal
risks in the operations.

The Audit Committee held four meetings during the
year, including one by telephone, at which all members, the
company’s auditor and representatives of senior manage-
ment were present.

The meetings of the Audit Committee are minuted; the
minutes are sent out with material for the Board and a ver-
bal report is given at board meetings.

More important matters dealt with by the Audit Committee
during the year included drawing up a new policy and new
guidelines for management of the funds allocated to meet
the Group’s pension liability. The Audit Committee also
carried out a review of Management Assurance procedures,
and prepared a decision on the appointment of auditor
prior to the 2010 Annual General Meeting.

ASSA ABLOY’s Board of Directors
The Board consists of 11 members. Nine members are
elected by the Annual General Meeting for a period of
one year and two of the members are appointed by the
employee organizations in accordance with Swedish law.
The employee organizations also appoint two deputies.
With the exception of the CEO, none of the board members
are members of the Executive Team. The CEO has no sig-
nificant shareholdings or partnerships in companies with
significant business relationships with ASSA ABLOY.

Remuneration of the Board
The Annual General Meeting passes a resolution on the
remuneration to be paid to board members. The 2009
Annual General Meeting passed a resolution on Board fees
totaling SEK 4,050,000 (excluding remuneration for com-
mittee work), to be allocated between the members as
follows: SEK 900,000 to the Chairman and SEK 450,000 to
each of the other members not employed by the company.
As remuneration for committee work, the Chairman of the
Audit Committee was to receive SEK 200,000, the Chairman
of the Remuneration Committee SEK 100,000, members
of the Audit Committee SEK 100,000 and members of the
Remuneration Committee SEK 50,000.

The Chairman and other board members have no pen-
sion benefits or severance payment agreements. The CEO
and employee representatives do not receive Board fees.
For further information about the remuneration of board
members in 2009, see Note 32.

108

COrpOrAte gOvernAnCe repOrt

ASSA ABLOY AnnuAL repOrt 2009

Independence of the Board

The Board of Directors of
ASSA ABLOY meets the
requirements for indepen-
dence, in accordance with
the rules and regulations of
NASDAQ OMX Stockholm
and the Swedish Code of
Corporate Governance.

Name

Gustaf Douglas
Carl Douglas
Jorma Halonen
Birgitta Klasén
Eva Lindqvist
Johan Molin

Sven-Christer Nilsson
Lars Renström
Ulrik Svensson

Position

Chairman
Board member
Board member
Board member
Board member
Board member,
President and CEO
Board member
Board member
Board member

The Board’s composition and shareholdings

Position

Elected

Name

Gustaf Douglas
Carl Douglas
Jorma Halonen
Birgitta Klasén
Eva Lindqvist
Johan Molin

Sven-Christer Nilsson
Lars Renström
Ulrik Svensson
Seppo Liimatainen

Mats Persson

Rune Hjälm

Per Edvin Nyström

Chairman
Board member
Board member
Board member
Board member
Board member,
President and CEO
Board member
Board member
Board member
Board member,
employee
representative
Board member,
employee
representative
Deputy,
employee
representative
Deputy,
employee
representative

Born

1938
1965
1948
1949
1958
1959

1944
1951
1961
1950

1994
2004
2008
2008
2008
2006

2001
2008
2008
2003

1994

1955

2005

1964

1994

1955

Independent of the
company and its
management

Independent of the
company’s major
shareholders

Yes
Yes
Yes
Yes
Yes
No

Yes
Yes
Yes

Remuneration
Committee

Audit
Committee

Series A
shares¹

Series B
shares¹

Chairman
–
–
–
–
–

Member
–
–
–

–

– 13,865,243 21,300,000
–
–
–
1,700
–
–
5,000
–
Member
–
–
–
500,000
–
–

–
Member
Chairman
–

–

–
–
–
–

–

3,500
10,000
3,000
2,600

–

7,727

No
No
Yes
Yes
Yes
–

Yes
Yes
No

Incentive
program
Series B
shares

–
–
–
–
–
440,000

–
–
–
–

–

¹ Including family and through companies.

ASSA ABLOY AnnuAL repOrt 2009

COrpOrAte gOvernAnCe repOrt

109

Board of Directors

Board members elected at the 2009 Annual General Meeting

Gustaf Douglas
Chairman of the Board
Board member since 1994
Born 1938
MBA, Harvard Business School
Principal shareholder of Investment AB Latour and SäkI AB.
Self-employed since 1980.
Other appointments: Chairman of SäkI AB. Board member
of Stiftelsen Svenska Dagbladet and the Swedish
Conservative Party.
Shareholdings (including family and through companies):
6,746,425 Series A shares and 19,000,000 Series B shares
through Investment AB Latour, and 7,118,818 Series A
shares and 2,300,000 Series B shares through SäkI AB.

Carl Douglas
Board member since 2004
Born 1965
Bachelor of Arts
Self-employed
Other appointments: Vice Chairman of Securitas AB. Board
member of Investment AB Latour, Niscayah Group AB,
Swegon AB and Säkl AB.
Shareholdings (including family and through companies):—

Jorma Halonen
Board member since 2008
Born 1948
Bachelor of Science in Business Administration
and Economics
Executive Vice President of AB Volvo and Deputy CEO of the
Volvo Group 2004–2008. President and CEO of Volvo Truck
Corporation 2001–2004. Prior to that, a number of senior
posts at Scania, such as President of Saab-Scania in Finland
1990–1996, Vice President 1996–1998 and President 1998–
2001 of Scania Latin America. Prior to that, senior posts in
the telecommunication and computer industry 1972–1990.
Other appointments: Chairman of the Board of Niscayah
Group AB, TMD Friction and CPS Color. Board member
of SEMCON AB, NICDP (Advisory Board to the Saudi
Arabian Government), Permira Nordic Advisory Board and
Elektrobit.
Shareholdings (including family and through companies):
1,700 Series B shares.

Birgitta Klasén
Board member since 2008
Born 1949
Master of Science in Engineering
Independent IT consultant (Senior IT Advisor). Chief
Information Officer (CIO) and Head of Information
Management at EADS (European Aeronautics Defence and
Space Company) 2004–2005. CIO and Senior Vice President
of Pharmacia 1996–2001 and prior to that, CIO at Telia. Held
various posts at IBM 1976–1994.
Other appointments: Board member of Acando AB,
BISNODE AB and IFS AB.
Shareholdings (including family and through companies):
5,000 Series B shares.

Gustaf Douglas

Carl Douglas

Jorma Halonen

Birgitta Klasén

Eva Lindqvist

Johan Molin

Sven-Christer Nilsson

Eva Lindqvist
Board member since 2008
Born 1958
Master of Science in Engineering and Bachelor of Science in
Business Administration and Economics
Senior Vice President of Mobile Business at TeliaSonera AB
2006–2007. Prior to that several senior posts at TeliaSonera
AB, such as President and Head of Business Operation
International Carrier, and various posts in the Ericsson Group
1981–1999.
Other appointments: Chairman of the Board Xelerated AB
and Admeta AB, as well as Board member of companies
including Schibstedt, Niscayah Group AB, Transmode AB
and Nordia Innovation AB. Member of the Royal Swedish
Academy of Engineering Sciences (IVA).
Shareholdings (including family and through companies): —

Johan Molin
Board member since 2006
Born 1959
Bachelor of Science in Business Administration
and Economics
President and CEO of ASSA ABLOY AB since 2005. CEO of
Nilfisk-Advance 2001–2005. Various posts mainly in finance
and marketing, later divisional head in the Atlas Copco
Group 1983–2001.
Other appointments: Board member of AB Electrolux.
Shareholdings (including family and through companies):
500,000 Series B shares as well as Incentive 2006 and
Incentive 2007 corresponding, on full conversion, to
440,000 Series B shares.

Sven-Christer Nilsson
Board member since 2001
Born 1944
Bachelor of Science, Lund University
President and CEO of Telefonaktiebolaget LM Ericsson 1998–
1999, various executive positions mainly in marketing and
management in the Ericsson Group 1982–1997.
Other appointments: Chairman of the National Swedish
Public Service Broadcasting Foundation and The Swedish
National Defence Materiel Administration. Board member
of Sprint Nextel Corporation, CEVA, Inc. and Tilgin AB.
Shareholdings (including family and through companies):
3,500 Series B shares.

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Lars Renström
Board member since 2008
Born 1951
Master of Science in Engineering and
Bachelor of Science in Business Administration
and Economics
President and CEO of Alfa Laval AB since 2004. President and
CEO of Seco Tools AB 2000–2004. President and Head of
Division of Atlas Copco Rock Drilling Tools 1997–2000. Prior
to that a number of senior posts at ABB and Ericsson.
Other appointments: Board member of Alfa Laval AB and
TeliaSonera AB.
Shareholdings (including family and through companies):
10,000 Series B shares.

Ulrik Svensson
Board member since 2008
Born 1961
Bachelor of Science in Economics
CEO of Melker Schörling AB. CFO of Swiss International
Airlines Ltd. 2003–2006. CFO of Esselte AB 2000–2003 and
controller/CFO of the Stenbeck Group’s foreign telecom
ventures 1992–2000.
Other appointments: Board member of AAK AB, Loomis AB,
Niscayah Group AB, Hexpol AB and Flughafen Zürich AG.
Shareholdings (including family and through companies):
3,000 Series B shares.

Board members appointed by employee organizations

Seppo Liimatainen
Board member since 2003
Born 1950
Employee representative, Federation of Salaried Employees
in Industry and Services.
Shareholdings: 2,600 Series B shares.

Mats Persson
Board member since 1994
Born 1955
Employee representative, Swedish Metal Workers Union.
Shareholdings: —

Rune Hjälm
Deputy board member since 2005
Born 1964
Employee representative, Swedish Metal Workers Union.
Chairman of ASSA ABLOY European Works Council (EWC).
Shareholdings: —

Per Edvin Nyström
Deputy board member since 1994
Born 1955
Employee representative, Swedish Metal Workers Union.
Shareholdings: 7,727 Series B shares.

Lars Renström

Ulrik Svensson

Seppo Liimatainen

Mats Persson

Rune Hjälm

Per Edvin Nyström

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111

the executive team

Johan Molin

Tomas Eliasson

Denis Hébert

Thanasis Molokotos

Jonas Persson

Tim Shea

Ulf Södergren

Juan Vargues

Tzachi Wiesenfeld

Tomas Eliasson
Born 1962
Bachelor of Science in
Business Administration and Economics
Executive Vice President
Chief Financial Officer (CFO)
Employed since: 2006
Shareholdings: Incentive 2006 and
Incentive 2007 corresponding, on full
conversion, to 108,600 Series B shares.

Thanasis Molokotos
Born 1958
Master of Science in Engineering
Executive Vice President
Head of Americas division
Employed since: 1996
Shareholdings: 25,000 Series B shares.
Incentive 2006 and Incentive 2007
corresponding, on full conversion, to
74,300 Series B shares.

Tim Shea
Born 1959
Degree in Mechanical
Engineering, MBA
Executive Vice President
Head of Global Technologies
business unit ASSA
ABLOY Hospitality
Employed since: 2004
Shareholdings: Incentive 2006 and
Incentive 2007 corresponding, on full
conversion, to 27,700 Series B shares.

Juan Vargues
Born 1959
Degree in Mechanical
Engineering, MBA
Executive Vice President
Head of Entrance Systems division
Employed since: 2002
Shareholdings: Incentive 2006 and
Incentive 2007 corresponding, on full
conversion, to 182,900 Series B shares.

The Executive Team

Johan Molin
Born 1959
Bachelor of Science in Business
Administration and Economics
President and CEO and Head of Global
Technologies division
Employed since: 2005
Shareholdings: 500,000 Series B shares.
Incentive 2006 and Incentive 2007
corresponding, on full conversion, to
440,000 Series B shares.

Denis Hébert
Born 1956
Bachelor of Commerce, MBA
Executive Vice President
Head of Global Technologies
business unit HID Global
Employed since: 2002
Shareholdings: Incentive 2006 and
Incentive 2007 corresponding, on full
conversion, to 56,200 Series B shares.

Jonas Persson
Born 1969
Master of Science in
Engineering
Executive Vice President
Head of Asia Pacific division
Employed since: 2009
Shareholdings: –

Ulf Södergren
Born 1953
Master of Science in
Engineering, Bachelor of Science in
Business Administration and Economics
Executive Vice President
Chief Technology Officer (CTO)
Employed since: 2000
Shareholdings: Incentive 2006 and
Incentive 2007 corresponding, on full
conversion, to 139,800 Series B shares.

Tzachi Wiesenfeld
Born 1958
Bachelor of Science in Industrial
Engineering, MBA
Executive Vice President
Head of EMEA division
Employed since: 2000
Shareholdings: Incentive 2006 and
Incentive 2007 corresponding, on full
conversion, to 144,900 Series B shares.

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The Executive Team and organization
The Executive Team (Group Management) consists of
the CEO, the heads of the Group’s divisions, the Chief
Financial Officer, the Director of Technology and Product
Development, and the Director for Market and Business
Development. ASSA ABLOY’s operations are divided into
five divisions, where the fundamental principle is that these
divisions should be responsible, as far as possible, for busi-
ness operations, while various functions at headquarters
are responsible for coordination, monitoring, policies and
guidelines at an overall level. The Group’s structure results
in a geographical and strategic spread of responsibility
ensuring short decision-making paths. The Group’s man-
agement philosophy is based on trust and respect for local
cultures and conditions.

Guidelines and policies
The Group’s most important guidelines and policies define
the product areas in which the Group should operate and
describe the principles for market development, growth,
product development, organization, cost-efficiency and
staff development. These principles are described in the
publication ‘Strategy to Action’, which has been provided
to all employees in the Group. Other important guidelines
and policies concern financial control, communication mat-
ters, the Group’s brands, business ethics and environmental
issues. Common financial, accounting and investment
policies provide the framework for financial control and
monitoring. ASSA ABLOY’s communication policy aims to
provide essential information at the right time and in com-
pliance with stock market rules, as well as ensuring compli-
ance with other legal requirements. Brand guidelines aim
to protect and develop the major assets that the Group’s
brands represent.

ASSA ABLOY has adopted a Code of Conduct that applies

to the whole Group. The Code, which is based on a set of
internationally accepted conventions, defines the values
and guidelines that should apply within the Group with
regard to the environment, health, safety, business ethics,
working conditions, human rights and social responsibility.
Application of the Code of Conduct in the Group’s differ-
ent units is monitored regularly to ensure compliance and
relevance.

Decentralized organization
ASSA ABLOY’s operations are decentralized. Decentraliza-
tion is a deliberate strategic choice based on the local
nature of the lock industry and a conviction of the benefits
of a divisional control model. Another contributory factor
is that the Group has been built up over a relatively short
period through a large number of acquisitions.

ASSA ABLOY’s operating structure is designed to create

maximum transparency, to facilitate financial and opera-
tional monitoring, and to promote the flow of information
and communication across the Group. The Group consists
of five divisions, which are divided into around 30 business
units. These consist in turn of a large number of sales and

production units, depending on the structure of the busi-
ness unit concerned. Apart from monitoring by unit, moni-
toring of products and markets is also carried out.

Internal control regarding financial reporting
ASSA ABLOY’s process for internal control regarding finan-
cial reporting is designed to provide reasonable assurance
of reliable financial reporting, which is in compliance with
generally accepted accounting principles, applicable laws
and regulations, and other requirements for listed compa-
nies. The process is based on the internal control framework
issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO). It can be divided into a
number of sub-components, as defined in the above frame-
work, and is described in more detail below.

Control environment
The Board of Directors is responsible for effective internal
control and has therefore established fundamental docu-
ments of significance for financial reporting. These docu-
ments include the Board’s rules of procedure and instruc-
tions to the CEO, the Code of Conduct, financial policy, and
an annual financial evaluation plan. Regular meetings are
held with the Audit Committee. The Group has established
a Management Assurance function, with the primary goal of
providing reliable financial reporting. This function is man-
aged by the Group Controller and reports to the Executive
Team and the Audit Committee.

ASSA ABLOY’s effective decentralized organizational

structure makes a substantial contribution to a good
control environment. All units in the Group apply uniform
accounting and reporting instructions. Minimum levels for
internal control of financial reporting have been established
and are monitored annually for all operating companies.
The Code of Conduct has been reviewed and updated, and
compliance will be systematically monitored in the opera-
tions during 2010.

Risk assessment
Risk assessment includes identifying and evaluating the
risk of material error in financial reporting and accounting
at Group, division and local levels. A number of previously
established documents govern the procedures to be used
for accounting, finalizing accounts, reporting and review.
The entire Group uses a financial reporting system with pre-
defined report templates.

A systematic comprehensive risk assessment of financial

reporting has been implemented and is updated regularly.

Control activities
The Group’s controller and accounting organization at both
central and division level plays a significant role in ensuring
reliable financial information. It is responsible for complete,
accurate and timely financial reporting. A global financial
Management Assurance function has been established
and carries out annual financial evaluations in accordance
with the plan annually adopted by the Audit Committee.

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113

Corporate governance report

A systematic review of the opinions and observations of
the external auditors is carried out annually in accordance
with established procedures. Group-wide internal control
guidelines are reviewed annually. These guidelines affect
various processes, such as orders and purchasing (including
payments), procedures for finalizing accounts and facilities,
as well as compliance with various relevant policies.

Information and communication
Reporting and accounting manuals as well as other finan-
cial reporting guidelines are available to all employees
concerned on the Group’s intranet. A regular review and
analysis of financial outcomes is carried out at both business
unit and division level and as part of the Board’s established
operating structure. The Group also has established pro-
cedures for external communication of financial informa-
tion, in accordance with the rules and regulations for listed
companies.

Review process
The Board of Directors and the Audit Committee evaluate
and review the Annual Report and Interim Reports prior to
publication. The Audit Committee monitors the financial
reporting and other related issues, and regularly discusses
these issues with the external auditors.

All business units report their financial results monthly
in accordance with the Group’s accounting principles. This
reporting serves as the basis for quarterly reports and a
monthly operating review. Operating reviews conform to a
long-established structure – LockPack – in which sales, earn-
ings, cash flow, capital employed and other important key
figures and trends for the Group are compiled and form the
basis for analysis and actions by management and control-
lers at different levels. Financial reviews take place quarterly
at divisional board meetings, monthly in the form of per-
formance reviews and through more informal analysis. Par-
ticular attention is paid to the sales trend, and monitoring
takes the form of daily sales reporting by all the units in the

Group. Other important Group-wide components of inter-
nal control are the annual business planning and budgeting
process and quarterly detailed forecasts of all the financial
parameters for the current calendar year.

Group-wide internal control guidelines were reviewed

during the year in all operating companies through self-
assessment and a second opinion from external auditors.
These self-assessments are then reviewed at division and
Group level to further improve the reliability of the financial
reporting.

External audit
At the 2006 Annual General Meeting, Pricewaterhouse-
Coopers (PwC) were appointed as the company’s external
auditors for a four-year period up to the 2010 Annual
General Meeting, with authorized public accountant
Peter Nyllinge as the auditor in charge. PwC have been
the Group’s auditors since the Group was formed in 1994.
Peter Nyllinge, born in 1966, is responsible for auditing the
following companies besides ASSA ABLOY: Securitas, SäkI,
Bonnier and Skandinaviska Enskilda Banken.

PwC submits the audit report for ASSA ABLOY AB, the
Group and a large majority of the subsidiaries worldwide.
The audit of ASSA ABLOY AB also includes the administra-
tion by the Board of Directors and the CEO.

The company’s auditor attends all Audit Committee
meetings as well as the February board meeting, at which he
reports his observations and recommendations concerning
the Group audit for the year.

The external audit is carried out in accordance with
good auditing practice in Sweden. The audit of the financial
statements for legal entities outside Sweden is carried out
in accordance with statutory requirements and other appli-
cable rules in each country. For information about the fees
paid to auditors and other assignments carried out in the
Group during the last three financial years, see Note 3 and
the Annual Report for 2008 page 61, Note 3.

114

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Add e-passports to the list of ‘e-ssentials’

An e-passport may look like a traditional printed travel doc-
ument, but electronics in HID global’s e-passport inlays con-
tain encrypted data that authenticates the document and
the identity of the passport holder.
An e-passport, or electronic passport, is essentially the
same as a regular passport with the addition of a small, con-
tactless integrated circuit and antenna embedded in the
cover or secure page. the chip stores the usual information
found on the photo page of the passport, with special secu-
rity features to protect the digital data.
HID global’s Identification Solutions (IDS) egovernment
business segments is recognized as a driving force in the
development of credentials that are more secure, more effi-

cient to use and more interoperable between systems and
countries.

the electronics inside e-passports need to be able to
withstand the pressures applied, as well as the flexing that
occurs with frequent travelers’ use. using proven secure,
tamper resistant design and ceFLeX™ material, HID’s inlays
are highly durable and help the chip and antenna to with-
stand daily mechanical wear.
Coupled with HID global’s reader technology, e-pass-
ports and e-IDs ultimately make travel and identity verifi-
cation easier. As of today, more than 20 countries are using
e-passports enabled by HID technology.

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115

the ASSA ABLOY share

Share price trend in 2009
In 2009 ASSA ABLOY’s Series B share rose 56 percent to SEK
137.80 (88.50), equivalent to a market capitalization of SEK
50,423 M (32,383). During the same period, the NASDAQ
OMX Stockholm rose 47 percent. The highest closing price
of the share was SEK 142.50, recorded on 14 December,
and the lowest closing price was SEK 71.50, recorded on
5 March.

Listing and trading
ASSA ABLOY’s Series B share is listed on NASDAQ OMX
Stockholm, Large Cap. The share has been listed since
8 November 1994.

Total turnover of the ASSA ABLOY share on NASDAQ
OMX Stockholm amounted to 518 million (788) shares,
which is equivalent to an average turnover of 2.1 million
shares (3.1) per day. The turnover rate of the share was
around 149 percent, compared with a turnover rate of
119 percent (152) on the NASDAQ OMX Stockholm and
126 percent (165) on the Large Cap list.

Assa Abloy

The implementation of the EU Markets in Financial
Instruments Directive (MiFID) has changed the structure

of equity trading in Europe. Now that a share can be traded
on markets other than the stock exchange where it is listed,
trading has become more fragmented, while the total turn-
over of many shares has increased.

The ASSA ABLOY share is now not only traded on the
NASDAQ OMX Stockholm, but also on several other mar-
kets. However, the Stockholm Stock Exchange accounts for
the majority of trading, where 70 percent of the shares were
traded in 2009.

Ownership structure
The number of shareholders at year-end was 22,014
(22,921) and the ten largest shareholders accounted for
37 percent (41) of the share capital and 57 percent (60) of
the votes. Shareholders with more than 50,000 shares,
a total of 381 shareholders, accounted for 94 percent (93)
of the share capital and 96 percent (95) of the votes. Invest-
ors outside Sweden accounted for 53 (50) percent of the
share capital and 36 percent (34) of the votes, and were
mainly in the USA and the UK.

Share price trend and turnover 1999–2009

Dividend per share 1999–2009

Vinst per aktie efter skatt och utspädning

200

180

160

140

120

100

SEK

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

120,000
100,000
80,000
60,000
40,000
20,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

1 Exklusive omstrukturering
2006 och jämförelsestörande
poster 2008.

Series B share

OMX Stockholm

no. of shares traded, thousands (incl. after hours)

2009 proposed dividend

Data per share

B−Aktien
OMX Stockholm_PI

SEK/share1

Earnings after tax
and dilution 8
Dividend
Dividend yield, % 5
Dividend, % 6, 8
Share price at year-end
Highest share price
Lowest share price
Equity8
Number of shares,
thousands 7

2000
Omsatt antal aktie
1000−tal

2001

2002

2003

2004

2005

2006

2007

2008

2009

2.73
0.90
0.5
30.9
184.50
206.70
110.50
30.58³

2.982
1.00
0.7
30.5
151.00
186.00
94.50
35.80

3.53
1.25
1.3
32.2
99.50
159.50
76.50
35.85

3.312
1.25
1.5
33.9
85.50
110.00
67.00
31.23

6.33
2.60
2.3
42.0
113.50
113.50
84.00
34.74

6.97
3.25
2.6
47.6
125.00
126.00
89.25
42.85

7.992
3.25
2.2
64.0
149.00
151.00
109.00
39.13

9.02
3.60
2.8
40.5
129.75
164.00
124.50
46.76

9.212
3.60
4.1
52.3
88.50
126.00
69.75
55.91

9.222
3.604
2.6
47.8
137.80
142.50
71.50
54.76

356,712

361,730

370,935

378,718

376,033

380,713 380,713

372,931

1 Adjustments made for new issues.
2 Excluding restructuring costs 2006 and items affecting comparability

2008 and 2009.

3 Key data adjusted following change in accounting principle.
4 Proposed dividend.

5 Dividend as percentage of share price at year-end.
6 Dividend as percentage of adjusted earnings in line with dividend policy.
7 After full dilution.
8 1999–2003 have not been adjusted for IFRS.

116 tHe ASSA ABLOY SHAre

ASSA ABLOY AnnuAL repOrt 2009

ASSA ABLOY’s ten largest shareholders
Based on the share register at 31 December 2009.

Shareholders

Investment AB Latour
Harris Associates Funds
Melker Schörling AB
Alecta
Oppenheimer Funds
Swedbank Robur Funds
SEB Funds
Capital Group Funds
SäkI
AMF Insurance & Funds
Other shareholders

Total number

Series A shares

Series B shares

6,746,425

5,310,080

7,118,818

19,000,000
17,583,900
9,162,136
14,465,000
11,677,086
11,543,488
11,427,256
11,180,000
2,300,000
8,523,783
229,880,062

Total number
of shares

25,746,425
17,583,900
14,472,216
14,465,000
11,677,086
11,543,488
11,427,256
11,180,000
9,418,818
8,523,783
229,880,062

Share capital, %

Votes, %

7.0
4.8
4.0
4.0
3.2
3.2
3.1
3.1
2.6
2.3
62.7

16.1
3.3
11.6
2.7
2.2
2.1
2.1
2.1
13.6
1.6
42.6

19,175,323

346,742,711

365,918,034

100.0

Source: SIS Ägarservice AB and Euroclear Sweden AB.

Ownership structure (share capital)

Ownership structure (votes)

Hela säkerhetsmarknaden

övriga

Investment AB Latour, 7.0 %
Harris Associates Funds, 4.8 %
Melker Schörling AB, 4.0 %
Alecta, 4.0 %
Oppenheimer Funds, 3.2 %
Swedbank robur Funds, 3.2 %
SeB Funds, 3.1 %
Capital group Funds, 3.1 %
Other shareholders, 67.5 %

sebfond

Investment AB Latour, 16.1%
capital group
SäkI, 13.6%
Melker Schörling AB, 11.6%
Harris Associates Funds, 3.3%
Alecta, 2.7%
Oppenheimer Funds, 2.2%
Swedbank robur Funds, 2.1%
SeB Funds, 2.1%
Other shareholders, 46.3%

oppenheim

swedbank

alecta

melker

harris

Share capital
ASSA ABLOY’s share capital at 31 December 2009 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 give the shareholders equal rights to the company’s
assets and earnings. Each Series A share carries 10 votes and each Series B share one vote.

Latour

Year

1989
1994
1994
1994
1996
1996
1997
1998
1999
1999
1999
1999
1999
2000
2000
2000
2001
2002
2002

Transaction

Split 100:1
Bonus issue
Non-cash issue
New share issue
Conversion of Series C shares into Series A shares
New share issue
Converted debentures
Converted debentures before split
Bonus issue
Split 4:1
New share issue
Converted debentures after split and new issues
Converted debentures
New share issue
Non-cash issue
Converted debentures
New share issue
Converted debentures
Number of shares after dilution

Series A
shares

1,746,005
2,095,206
3,809,466
4,190,412
4,190,412
4,190,412

16,761,648
18,437,812
18,437,812
18,437,812
19,175,323
19,175,323
19,175,323
19,175,323
19,175,323
19,175,323

Series C
shares

20,000

1,428,550
1,714,260

Series B
shares

Share capital,
SEK

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
295,970,830
301,598,383
313,512,880
333,277,912
334,576,089
344,576,089
346,742,711
353,754,671

2,000,000
2,000,000

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

285,479,896
314,002,299
314,408,642
320,036,195
332,688,203
352,453,235
353,751,412
363,751,412
365,918,034
372,929,994

ASSA ABLOY AnnuAL repOrt 2009

tHe ASSA ABLOY SHAre 117

övriga

säkl

 ASSA ABLOYs

sebfond

produktområden, 15%

 Bevakning & övrigt, 27%

swedbank

oppenheim

 Brandlarm, 2%

 Dörrar & fönster, 40%

 Intrångsskydd, 3%

alecta

 IT-säkerhet & logisk

behörighetskontroll, 4%

melker

 Larmcentraler, 9%

harris

Latour

 ASSA ABLOYs

produktområden, 15%

 Bevakning & övrigt, 27%

 Brandlarm, 2%

 Dörrar & fönster, 40%

 Intrångsskydd, 3%

 IT-säkerhet & logisk

behörighetskontroll, 4%

 Larmcentraler, 9%

the ASSA ABLOY share

Share capital and voting rights
Share capital at year-end amounted to SEK 365,918,034
distributed among a total 365,918,034 shares, comprising
19,175,323 Series A shares and 346,742,711 Series B shares. All
shares have a par value of SEK 1.00 and give the shareholders
equal rights to the company’s assets and earnings. The total
number of voting rights amounts to 538,495,941; each Series
A share carries ten votes and each Series B share one vote.

Dividend and dividend policy
The objective of the dividend policy is that, in the long term,
the dividend should be equivalent to 33–50 percent of
earnings after standard tax, but always taking into account
ASSA ABLOY’s long-term financing requirements.

The Board of Directors and the CEO propose that a divi-
dend of 3.60 SEK per share (3.60), a maximum total amount
of SEK 1,317 M, be paid to shareholders for the 2009 finan-
cial year, equivalent to a dividend yield on Series B shares of
2.6 percent (4.1).

Incentive programs
ASSA ABLOY has issued several convertible debentures to
employees in the Group.

In 2004, a convertible debenture amounting to EUR
100 M was issued. This program expired in June 2009 and

no conversion took place. In 2006, it was decided to launch
an incentive program for senior managers, Incentive 2006.
This program amounts to a total of EUR 38.4 M and is based
on four series of convertible bonds, each series having a par
value of EUR 9.6 M. Any conversion of Incentive 2006 will
take place in a 180-day period between December 2010
and June 2011. On full conversion, at a conversion price of
EUR 14.60 for Series 1, EUR 15.90 for Series 2, EUR 17.30 for
Series 3 and EUR 18.60 for Series 4, an additional 2,332,350
shares would be created.

In 2007, it was decided to launch a new incentive pro-
gram, Incentive 2007. This program amounts to a total of
EUR 100 M and is based on four series of convertible bonds,
each series having a par value of EUR 25 M. Any conversion
of Incentive 2007 will take place in a 30-day period in May
and June 2012. On full conversion, at a conversion price of
EUR 18.00 for Series 1, EUR 20.50 for Series 2, EUR 23.00 for
Series 3 and EUR 25.40 for series 4, an additional 4,679,610
shares would be created.

Full conversion of Incentive 2006 and 2007 would create
an additional 7,011,960 shares, which would have a dilutive
effect of 1.9 percent on the share capital and 1.3 percent on
the total number of votes.

Around 2,000 employees in some 15 countries are par-

ticipating in the current incentive programs.

Analysts who follow ASSA ABLOY

Company

Name

ABG Sundal Collier
Carnegie
Cheuvreux
Credit Suisse
Danske Bank
Deutsche Bank
DnBNor
Dresdner Kleinwort
Enskilda Securities
Goldman Sachs
Handelsbanken Capital Markets
HQ Bank
HSBC
ICAP Securities Ltd
JP Morgan
Merrill Lynch
Nordea
Nordea
Redburn Partners
Société Générale
Swedbank Markets
The Royal Bank of Scotland
UBS
Öhman

Christer Fredriksson
Kenneth Toll Johansson
Andreas Dahl
Andre Kukhnin
Anders Idborg
Johan Wettergren
Erik Bergöö
Colin Grant
Julian Beer
Tim Rothery
Peder Frölén
Patric Lindqvist
Matt Williams
Nick Wilson
Nico Dil
Ben Maslen
Ann-Sofie Nordh
Johan Trocmé
James Moore
Roderick Bridge
Niclas Höglund
Klas Bergelind
Fredric Stahl
Oscar Stjerngren

Telephone

+46 8 566 286 26
+46 8 588 68 911
+46 8 723 51 63
+44 20 7888 0350
+46 8 568 80 570
+46 8 463 55 18
+47 229 48 843
+44 20 7475 9161
+46 8 522 296 52
+44 20 7774 6987
+46 8 701 12 51
+46 8 696 20 84
+44 20 7991 6750
+44 20 7532 4683
+44 20 7325 4292
+44 20 7996 4783
+46 8 534 91 452
+46 8 5349 13 99
+44 20 7000 2135
+44 20 7762 5086
+46 8 5859 1800
+44 20 7678 6001
+44 20 7568 9016
+46 8 402 50 65

christer.fredriksson@abgsc.se
kentol@carnegie.se
adahl@cheuvreux.com
andre.kukhnin@credit-suisse.com
anders.idborg@danskebank.se
johan.wettergren@db.com
erik.bergoo@dnbnor.no
colin.grant@dkib.com
julian.beer@enskilda.se
tim.rothery@gs.com
pefr15@handelsbanken.se
patric.lindqvist@hq.se
matt.j.williams@hsbcib.com
nicholas.wilson@icap.com
nico.dil@jpmorgan.com
ben_maslen@ml.com
ann-sofie.nordh@nordea.com
johan.trocme@nordea.com
james.moore@redburn.com
roderick.bridge@sgcib.com
niclas.hoglund@swedbank.se
klas.bergelind@rbs.com
fredric.stahl@ubs.com
oscar.stjerngren@ohman.se

118 tHe ASSA ABLOY SHAre

ASSA ABLOY AnnuAL repOrt 2009

Antibacterial door handles break down harmful bacteria

In collaboration with polygiene, ASSA has developed a
door handle that effectively breaks down bacteria. It fea-
tures Addion, an antibacterial surface coating with a wear-
resistant metallic surface, which breaks down bacteria sig-
nificantly faster than other surface coatings such as nickel,
chrome, brass and stainless steel.

the past ten years have seen a dramatic rise in bacteria

that cannot be treated with regular antibiotics. Studies
show that multiresistant bacteria are primarily spread via
hands and contact surfaces.¹

that’s why ASSA and polygiene (of the perstorp group)

developed an antibacterial surface coating with enough
wear resistance that it can be used in environments with
large flows of people, and environments in which bacteria
are spread extensively.

Another environment where it is desirable to reduce
the spread of bacteria is in schools and childcare. Working
actively with this can cut down on sick leave, which will
benefit society as a whole. the St. petri School in Malmö,
Sweden, has already chosen Addion handles.

‘When we totally renovated the school, we discussed

several handle solutions,’ says superintendent per-Åke
Brodin at the St. petri School in Malmö. ‘We opted for
ASSA’s antibacterial door handles. We replaced all han-
dles in the school, and that reduced the spread of infec-
tion in the flu season, keeping our sick-leave figures low.’
Addion’s antibacterial properties combined with its
superb wear resistance contribute to long-lasting protec-
tion against the spread of bacteria.

ASSA ABLOY AnnuAL repOrt 2009

tHe ASSA ABLOY SHAre

119

¹Importance of the environment in
meticillin-resistant Staphylococcus
aureus acquisition: the case for the
hospital cleaning, Dr Stephanie j Dancer
MD. the Lancet Infectious Diseases
2008;8:101–113.

Information for shareholders

Dividend
tuesday, 27 April 2010 is proposed as the record date for
dividends. If the Annual general Meeting approves the pro-
posal of the Board of Directors, dividends are expected to
be distributed by euroclear Sweden AB on Friday, 30 April
2010.

Further information
Niklas Ribbing, Head of Investor Relations
Telephone +46 (0) 8 506 485 79
niklas.ribbing@assaabloy.com

Reports can be ordered from ASSA ABLOY AB
•
•
•
•

Website
www.assaabloy.com
telephone +46 (0) 8 506 485 00
+46 (0) 8 506 485 85
Fax
ASSA ABLOY AB
post
Box 70340
Se-107 23 Stockholm, Sweden

Financial reporting
First quarter: 21 April 2010
Second quarter: 28 July 2010
third quarter: 27 October 2010
Fourth quarter and Year-end report: February 2011
Annual report 2010: March 2011

Annual Report online
ASSA ABLOY’s Annual Report online has many user-friendly
features. You can get texts to read aloud to you, and finan-
cial tables can be expanded and downloaded in Excel. All
information in the Report can be found easily through the
navigation menu or by using the search function.
The Annual Report is available online at:
www.assaabloy.com/annualreport2009

Annual General Meeting
The Annual General Meeting of ASSA ABLOY will be held at
Moderna Museet (Museum of Modern Art), Skeppsholmen,
Stockholm at 15.00 on Thursday, 22 April 2010. Sharehold-
ers wishing to attend the Annual General Meeting should:
Be registered in the share register kept by Euroclear
•
Sweden AB by Friday, 16 April 2010.
Notify ASSA ABLOY AB of their intention to attend by
Friday, 16 April 2010 at 16.00.

•

Registration in the share register
Shareholders whose shares are nominee registered through
a bank or other nominee must request that their shares be
temporarily registered in their own name in the share regis-
ter kept by euroclear Sweden AB by Friday, 16 April 2010, in
order to have the right to attend the Annual general Meet-
ing. Shareholders must notify the nominee of this well before
that date.

Notification of intention to attend
•
•

Website www.assaabloy.com
Address

ASSA ABLOY AB ”årsstämman”,
Box 7842, Se-103 98 Stockholm

•
•

telephone +46 (0) 8 506 485 14
+46 (0) 8 506 485 18
Fax
(mark notification “ASSA ABLOY”)

The notification should state:
•
•
•
•
•

name
personal or corporate identity number
Address and daytime telephone number
number of shares held
Any accompanying advisers

A shareholder who is to be represented by a proxy should
submit a completed form of proxy together with the noti-
fication of intention to attend the Annual General Meeting.
Forms for proxies are available at www.assaabloy.com.

Nomination Committee
the nomination Committee has the task of preparing
decisions on the election of the Chairman and other
members of the Board of Directors, the appointment of
the auditor, the election of the Chairman of the Annual
general Meeting, and fees and associated matters. the
nomination Committee prior to the 2010 Annual general
Meeting comprises Mikael ekdahl (Melker Schörling AB),
gustaf Douglas (Investment AB Latour and Säkl), Magnus
Landare (Alecta), per-erik Mohlin (SeB Funds/SeB trygg Liv)
and Marianne nilsson (Swedbank robur). Mikael ekdahl is
Chairman of the nomination Committee.

120

InFOrMAtIOn FOr SHAreHOLDerS

ASSA ABLOY AnnuAL repOrt 2009

Glossary

Aperio
Aperio is a new technology that enables mechanical locks
to be wirelessly linked to an existing access control system.
Aperio locks can be installed in a new or existing access con-
trol system and users can use the same credentials they have
for that system.

Lean
The Lean Production philosophy is to use as few resources
as possible. The focus is on just-in-time production, which
means that materials, parts and products are in the right
place at the right time. The Lean philosophy includes striving
for continuous improvement.

ElectroLynx
ElectroLynx is an ASSA ABLOY solution that simplifies the
process of introducing electrical hardware into a door. It has
a wiring scheme and simple, snap-together connectors that
can be used with all electrical ASSA ABLOY products and can
be installed inside doors as desired. The solution means that
installers themselves do not need to solder and connect
individual wires.

Gateway process
The ASSA ABLOY Product Innovation Process is based on
a structured Gateway approach, meaning that all projects
have to pass six gates on their way from idea to installed
products.

NFC
Near Field Communication (NFC) is a short-range wireless
connectivity standard that uses magnetic field induction to
enable communication between devices when they are
touched together or brought within a few centimeters of
each other.

OEM
Original Equipment Manufacturer, a company that makes
the final product that can be sold on the open market. Usu-
ally the OEM company does not sell the product directly to
the public but goes through dealers. The product may con-
sist of proprietary components or a combination of purcha-
sed and proprietary.

High Definition Printing (HDP)
Fargo HDP – High Definition Printing – is a process used in
the production of tamper-evident and highly wear-resistant
ID cards. HDP produces high-quality images that are sand-
wiched between Fargo’s HDP film and the card, and that
essentially destroy themselves if there is any attempt to
alter the card.

RFID
Radio Frequency Identification is a technology for reading
and storing information remotely using small radio trans-
mitter/receivers and memories called tags. A tag can be
small enough to fit in a price tag on goods in a store, or
placed in a glass capsule and injected under a pet’s skin with
ID information. One current use of RFID is in keycards.

Hi-O
Highly Intelligent Opening is a standardized new technology
for security and control of door environments. Hi-O allows
interconnectivity – communication between all compo-
nents in a door solution.

ZigBee
ZigBee is a standard for wireless control of equipment in
homes, commercial properties, industry and other places
where there is a need for it. The technique consumes little
energy and the wireless platform makes it easy to install
retrospectively.

Inlay
An RFID inlay is one of the components in a contact-free
card or similar document. It consists of a circuit board con-
nected to an antenna mounted on plastic film.

Production: ASSA ABLOY, Hallvarsson & Halvarsson.
Photos: Magnus Mårding, front page, page 18–19, 26–27, Getty Images, Reiher/Seidel/www.stadion-deluxe.de
Rithuset, ASSA ABLOYs own photographic library, among others. Translation: Textforum. English editing: Marcom International.
Printing: Elanders AB, Falköping, March 2010.

ASSA ABLOY is the global
leader in door opening solutions,
dedicated to satisfying
end-user needs for security,
safety and convenience

www.assaabloy.com

ASSA ABLOY AB
P.O. Box 70 340
SE-107 23 Stockholm
Klarabergsviadukten 90
SE-111 64 Stockholm
Tel +46 (0) 8 506 485 00
Fax +46 (0) 8 506 485 85

» Future shareholder value is based on organic
and acquired growth as well as continued
rationalization and synergies in the Group «

– Johan Molin, President and CEO