ASSA ABLOY AB (publ)

Hi, everyone, and welcome to the presentation of ASSA ABLOY's Q3 report in 2026. My name is Björn The Bell. I'm heading investor relations. And joining me here are ASSA ABLOY CEO, Nico Delvaux, and our CFO, Erik Pieder. We'll start this conference now with a summary of the report, and when we're done with that one, we will open up for your questions. So, Nico, I'd like to hand over to you then.

Thank you, Bjorn. Also, good morning from my side. Q3 report, a report with a lot of records. A record top line for the first time in our history, a sales of above 40 billion sec with a good organic sales growth of 4% with the Americas divisions and EMEA division contributing in the first place. Also, a record high EBIT for the first time above 7 billion SEC and a record EBIT margin of 17.4%. Excellent operating leverage, close to 50%. And cash flow, second best cash flow ever, an increase of the cash flow of 6% versus last year. Also this quarter, again, strong growth of our electromechanical product category, the hand and organic sales growth of 9% in our regional divisions. And then we completed three acquisitions, and we will also launch our new manufacturing footprint program, MFP11, in Q4. If we look a little bit into the numbers, sales of almost 41 billion SEC, 7% up, 4% organic growth, 2% net acquired growth, and this quarter, again, a positive effect on FX. That's because of the weaker SEC, plus 1%. A record EBITDA margin of 18.7%, 80 base points up. EBIT margin, like I mentioned, 17.4%, 60 base points up. EBIT above $7 billion, 11% up. And our earnings per share, 14% up. If we make a little bit of a tour of the world, starting in North America, I would say very similar market conditions as I mentioned in Q2 and perhaps as in Q1. In North America, still very strong market conditions on the non-residential side, commercial, institutional, where we continue to see very high activity. Residential still much more challenging now definitely also with the fact again increasing interest rates where we don't see that recovery on the new build any time soon yet where at least on the R&R side we believe the market has bottomed out and we see a slight recovery of the R&R business in North America. The logistics vertical, important for entrance systems. Also there, still a more flattish development of the market. If you go to Europe, similar picture as in North America. Also here, very strong non-residential market conditions. And perhaps on the residential side, a bit more positive than in North America. Here we see R&R definitely coming back with a lower growth rate. And we even see a new build in some markets like Finland and Sweden starting to grow again. Similarly, on the logistics side, also here, logistics side, no recovery. If already something in the market, most probably still a little bit down in Europe. In Australia and New Zealand, similar as Europe and North America, also here, good strong market conditions on the commercial side, weaker residential in Australia, and good residential in New Zealand. LATAM, STILL GOOD MARKET CONDITIONS OVERALL IN MOST MARKETS IN LATAM. WE HAVE ALSO NOW HAD ELECTIONS IN BRAZIL. LET'S SEE HOW THAT PLAYS OUT. AFRICA, SMALLER CONTINENT FOR US. AND IN ASIA, VERY MIXED PICTURE WHERE WE SEE GOOD MARKET CONDITION AND GOOD GROWTH FOR US IN INDIA, IN SOUTHEAST ASIA. And where we see continuous challenging market conditions in South Korea with housing market down double digit, and then also in Greater China where the market is not recovering and where we also are still having negative growth. Some highlights from around the world. Doorbird expanded its portfolio with the world's first IP video door station with 4G, 5G connectivity, mainly for residential and commercial applications. Enter Systems expanded their swing door portfolio with a new door operator designed for interior applications, offering a more streamlined solution for everyday use. And then on the project win side, a very nice project win in Germany for a premium automotive manufacturer with our E-Click solution where the contract includes more than 15,000 cylinders. So very nice, big project win. It's now seven quarters in a row that we see again a positive organic growth and I would say through acquisitions. A top line that goes up and also an operating margin that goes up towards the higher end of the 16% to 17% band which we want to be in. Year-to-date, we are at 16.6% on a 12-month moving trend. We are at 16.7%. And EBITDA, like I mentioned earlier, also at a record high, 17.8% on a 12-month moving trend. So higher top line, better margins, therefore also strong acceleration of our operating income, record above 7 billion SEC for the first time, and 81% up if we compare with 2021. On the acquisition side, like I mentioned, three acquisitions completed in the quarter, 11 completed here to date. Those 11 acquisitions represent an annualized sales of around 3.2 billion SEK. If I highlight two of them that we did in Q3, Classic Brass, U.S. manufacturer of premium cabinet and door, hardware, complementing, extending our core for the Americas division. They had a sales of around 155 million SEG last year. And then PackLock, an acquisition that complements our organic development of a padlock product range in North America. Very excited about this acquisition. It's at expertise in delivering, I would say, customized high security solutions. They had a sales of around 155 million SEC last year. If we then dig into the different divisions starting with EMEA, EMEA had another very good quarter with an organic sales growth of 5%, with very strong sales growth in Central Europe, good sales growth in Middle East, India, Africa and the Nordics, a small growth in South Europe and then a stable growth in UK and Ireland. And then an excellent operational execution with an EBIT margin of 15.8%, with a strong operating leverage, 110 base points, driven by operational efficiencies, of course, the volume growth, and then a good price versus cost realization. FX was dilutive 10 base points and M&A 20 base points. But we continue the positive journey, I would say, in the EMEA division. Also very strong quarter for the Americas. We have an organic sales growth of 6%. We have strong sales growth in the North America non-residential segment, a good sales growth in LATAM and in the North America residential segment. And then I would say excellent EBIT margin of 19.6%, 110 base points up compared to last year. We have an excellent operating leverage, 140 base points, and M&A dilutive, 30 BIPs. APAC had an organic sales decline of 1%, a small sales growth in Pacific Northeast Asia, and a sales decline in Greater China, Southeast Asia, where, as I explained earlier, you should see this as a double-digit negative growth in Greater China and a strong positive double-digit growth in Southeast Asia. It's a very different mixed picture. an EBIT margin of 9.8% with a stable operating leverage, and FX and M&A both dilute if 20 base points. The M&A is more an internal transfer. We transferred the residential business from HHI in Taiwan to the APAC division. Global Tech, an organic sales growth of 4%. We have strong sales growth in HID and a good sales growth in Global Solutions. I would say an excellent EBIT margin of 20%, even higher than the very high 19.8 number of last year. Also here, excellent operating leverage, 80 base points, and FX and M&A both dilutive 30 base points. And then last but not least, entrance systems and organic sales growth of 3%. Strong sales growth in pedestrian and in parameter security. A small sales growth in doors and automation, but then a decline in industrial. Good growth in service and an EBIT margin of 17.1% with strong operating leverage, 40 base points, and an M&A dilute of 70 base points. That is related to the bigger Sentinel acquisition we did in Canada. And then also related to acquisition cost for the upcoming Gunnebo entrance control acquisition that we are confident we will now be able to close in Q4. And with that, I give the word to Erik for some more details on the financial numbers.

Thank you, Nico. And a very good morning also from my side. As mentioned before, we had a record high sales of the first time about 40 billion, 7% up versus same period last year. 4% organic, 2% from acquisitions and 1% positive from currency. The impact, of course, since the SEC continues to weaken, we expect when we calculate then from end of September that we're going to have a positive impact from currency in Q4 of about 5%. EBIT also record first time above 7 billion, up 11%. Here, just to mention that we have released a mid-single million dollar amount into our result, which sort of slightly helps it positively. EBITDA as mentioned 18.7 up 80 base points EBIT up 60 base points income before tax net income and EPS all are up with 14% cash flow also very strong at 6% should also keep in mind that we this quarter also had a higher capex which is related to that we have acquired two buildings in entrance North America. If we'd exclude these two buildings, our cash flow would have been 13% up versus last year. Also encouraging to see that our return on capital employed is up with 70 base points and are touching now the 15%. Operational value added also up with 10% and is now close to 12 billion SEK. If we look on to the bridge analysis and look on the organic price was a strong 2 which consequentially means that volume was a weaker 2. The currency as mentioned before is related to the SEC. The flow-through ended at 47%, which is driven by the organic leverage then from price versus cost, as well as manufacturing footprint. Saving this quarter, it was slightly above 200 million, as well as other kind of operational efficiencies that we can do. And then if you look on M&A, it's up with, it was top line, it was contributing with 2%. Bottom line, it's dilutive, but it has to do, Nico mentioned before, the Sentinel acquisition and also acquisition costs coming from that, as well as acquisition costs related to Gunnebo, which we hope to close before the end of the year. If you then look into the direct material or the cost breakdown, direct material is 80 base points better than last year. Out of that, if I call it the true price versus cost, is plus 60 base points. We see, however, in the market now that raw material, electronics, plastics are going up, but we are confident that we can mitigate that with additional price increases. conversion cost 20 base points better as mentioned before you know we have operational efficiencies MFP and so forth SG&A is at the similar level as what it was last year we have been able to continue to invest in R&D as well as selling and this has been offset by admin and back office efficiencies including I would say the first results that we see of our AI initiatives Operating cash flow, as mentioned before, including the buildings, we are 6% better than the same period last year, excluding 13% better. If you look on cash conversion in the quarter, it was 117%, and if you look on the 12-month rolling, it's at 109%. Gearing net debt to equity landed at 54%. We continue to drive also down the net debt to EBITDA and was now at 2.0. If you look over a year period, we have been able to lower our debt with roughly 2.5 billion SEK. And we said we continue to have a very strong balance sheet so we can continue our acquisition strategy going forward. IF YOU LOOK ON THE LAST SLIDE, I MENTIONED THE NUMBER BEFORE, EARNINGS PER SHARE WAS UP WITH 14% FIRST SAME PERIOD LAST YEAR. AND WITH THAT, SOME CONCLUDING REMARKS, NICO.