The Year Continues Strongly for ASSA ABLOY

Regulatory News:

ASSA ABLOY (STO:ASSAB):

· Sales increased by 22% in the quarter, with 4% organic growth, and totaled SEK 17,082 M (13,964).

· Strong growth in Global Technologies and good growth in Americas, EMEA and Entrance Systems.

· Negative growth in Asia Pacific as result of continued weak demand in China.

· Three acquisitions signed during the quarter, with expected annual sales totaling just over SEK 700 M.

· Operating income (EBIT) for the quarter increased by 24% to SEK 2,742 M (2,219). The operating margin was 16.1% (15.9).

· Net income for the quarter amounted to SEK 1,888 M (1,534).

· Earnings per share for the quarter rose by 23% and amounted to SEK 1.70 (1.38).

· Cash flow for the quarter was SEK 1,991 M (1,963).

SALES AND INCOME

1) Earnings per share have been restated for all periods presented reflecting the stock split (3:1) approved in May 2015.

COMMENTS BY THE PRESIDENT AND CEO

"The second quarter and the first six months showed a continued very strong performance for ASSA ABLOY, with a rise in sales of a full 22% in the quarter and a very strong improvement in operating income of 24%,” says Johan Molin, President and CEO. "The good organic growth in all divisions, apart from in China, was very pleasing and an indication of strength in tough economic times.

"Organic growth during the quarter was 4%, driven mainly by a very strong performance in Global Technologies and good growth in the Americas, EMEA and Entrance Systems divisions. Performance in Asia Pacific was also very gratifying, with strong growth in all regions except China, where sales remained weak.

"The Group’s innovations in the form of new products are achieving great successes in the market. In the USA the Group has taken a strong lead in energy saving and smart locks for so-called Home Automation Systems. In Europe we are seeing the same trend, with our new electromechanical lock systems making particularly strong advances. The share taken by new products in the first half-year was over 30% of total sales, a very pleasing figure. We have also achieved a geographical broadening for similar electromechanical products in Asia during the quarter.

"Three further acquisitions were made during the quarter. In Finland the company Flexim was acquired, a leading Finnish supplier of security systems which provided important complementary market coverage. In Belgium the service and industrial door company L-Door was acquired, which complements Entrance Systems’ business in Belgium very well. On the important Middle Eastern market we succeeded in carrying through the purchase of Prometal, which manufactures security doors for local applications. This is an important product category for the specification market. Our acquisitions so far this year represent 3% in added sales.

"Operating income continued to improve strongly during the quarter, by a full 24%. Our organic growth combined with continued improvements in efficiency meant that the operating margin continued its positive trend, rising to 16.1%, in spite of the turbulence on the foreign-exchange markets and dilution from acquisitions.

"My judgment is that the global economic trend remains weak. Although America is showing a positive trend, Europe and many of the Emerging Markets are stagnating. However, our strategy of expanding on the Emerging Markets remains unchanged, since in the long term they are expected to achieve very good economic growth. We are also continuing our investments in new products, especially in the growth area of electromechanics.”

ASSA ABLOY is holding an analysts’ meeting at 10.00 today at Operaterrassen in Stockholm.

The analysts’ meeting can also be followed on the Internet at www.assaabloy.com.

It is possible to submit questions by telephone on: +46 8 5055 6476, +44 203 364 5371 or +1 877 679 2993.

This information is that which ASSA ABLOY is required to disclose under the Swedish Securities Exchange and Clearing Operations Act and/or the Swedish Financial Instruments Trading Act. The information is released for publication at 08.00 on 17 July.

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