ASSA ABLOY is the global leader in door opening

solutions, dedicated to satisfying end-user needs

for security, safety and convenience

Q4 Report 2017
Q4 2017 in brief

 Organic growth in all divisions

• Strong growth in Global Tech and EMEA
• Continued good growth in Americas,
Entrance Systems, and APAC, with flat
sales in China
• Continued strong development for
smart door locks and electro-
mechanical solutions

 Strong profit and cash flow

 New CEO Nico Delvaux appointed

2
 Q4 2017 figures in summary

 Sales SEK 20,109 M +3% Sales EBIT

Sales
5% organic 21 000 3 500
• +3%
3 359
• 3% acquired
3 213
• -5% currency 20 000 3 250

 EBIT SEK 3,359 M +5%* 19 000 3 000

• Amortization of acquisition-related
intangible assets SEK 87 M (51)
18 000 2 750
• Currency effect SEK -130 M

17 000 2 500
 Operating margin 16.7% (16.5*)
• EBITA-margin 17.1% (16.8*)
16 000 2 250
Q4 16* Q4 17
 EPS SEK 2.15 +14%** Sales, SEK M EBIT, SEK M

* Excluding China write down SEK 300 M and restructuring items in Q4 2016. ** Excluding restructuring items.

3
 Jan. – Dec. 2017 figures in summary

 Sales SEK 76,137 M +7% Sales EBIT

Sales
• 4% organic 80 000 +7% 14 000

• 2% acquired 75 000 13 000

12 341
• 1% currency
70 000 12 000
11 554

65 000 11 000
 EBIT SEK 12,341 M +7%*
• Amortization of acquisition-related 60 000 10 000
intangible assets SEK 240M (200)
• Currency effect SEK 37 M 55 000 9 000

50 000 8 000

 Operating margin 16.2% (16.2*)

45 000 7 000
• EBITA-margin 16.5% (16.5*)
40 000 6 000
Jan-Dec 2016 Jan-Dec 2017
 EPS SEK 7.77 +10%** Sales, SEK M EBIT, SEK M

* Excluding China write down SEK 300 M and restructuring items in Q4 2016. ** Excluding restructuring items.

4
 Sales by Region ASSA ABLOY 100 +6 +4
Emerging markets 23 +5 +3
Full year 2017

38 +7 +4
40 +8 +5 14 +1 +1

1 +16 +4

3 +4 +2 4 +4 +7

Change in local currencies Organic change

Share of sales, %
YTD 2017 vs. YTD 2016, % YTD 2017 vs. YTD 2016, %
Emerging markets comprise Africa, Asia (excl. Japan), the Middle East, Latin America and Eastern Europe.

5
Market highlights

 Strong e-cylinder demand

• New platform driver: Cliq Web Manager, Cliq-go, Medeco XT
• Bluetooth keys
• Additional sales from new pulse platform in Q1 2018

 Strengthened position in smart door locks

• Continued strong organic growth
• Launch of Amazon key partnership with Yale
• Gearing up for Yale Lock for nest - in store March 2018
• Acquisition of August Home

 Major HID win for eCovers in South America

• New country win and leading regional reference
• eCover with Shielding material - New HID Technology
• Deliveries during 2018 with expected additional opportunities

6
 2017 QTD
Organic +5%
Sales growth, currency adjusted Acquired +3%
+8%

% SEK M
25 80 000

20 75 000

15 70 000

10 65 000

5 60 000

0 55 000

-5 50 000

-10 45 000
2012 2013 2014 2015 2016 2017
Organic growth, % Acquired growth, % Sales in fixed currencies, SEK M

7
 Margin Bridge
2017 OG Currency ACQ

Operating margin, % Q4
YTD
0.3%
0.2%
-0.1%
-0.1%
0.0%
-0.1%

%
Run rate: EBIT-margin 16.2%* (16.2)
18 18

17 17

Long term target range (average)

16 16

15 15

14 14

13 13
2012 2013 2014 2015 2016 2017

Quarter Rolling 12-months

* Excluding China write down SEK 300 M and restructuring items in Q4 2016.

8
 Operating profit, SEK M +65%
in
5 years

SEK M SEK M
Run rate: EBIT SEK 12,341 M (11,554*) +7%
4 000 16 000

3 500 14 000

3 000 12 000

2 500 10 000

2 000 8 000

1 500 6 000

1 000 4 000

500 2 000

0 0
2012 2013 2014 2015 2016 2017

Quarter Rolling 12-months

* Excluding China write down SEK 300 M and restructuring items in Q4 2016.

9
Manufacturing footprint

 Status of programs launched 2006-2016

• 77 factories closed to date, 11 to go
• 126 factories converted to assembly, 28 to go

 Total personnel reduction

• 13,564 FTE in total since 2006
• 723 FTE in recent quarter
• 1,353 FTE to go for all programs

 SEK 944 M provisions remain for all programs

10
 Acquisitions
 Fully active pipeline

 19 acquisitions done

 Acquired annualized sales SEK 3,200 M

 Added sales 4%

 Divestment of AdvanIDe SEK 1,250 M

11
Phoniro, Sweden

 Turnover of SEK 175 M with

80 employees

 Leading provider of physical

& digital security solutions
for elderly care

 Development of homecare
vertical

 Accretive to EPS

12
Dale & Excel Hardware, UK

 Turnover of SEK 210 M with Furniture Pocket Door

75 employees Systems

 Market leading supplier of

high quality architectural
hardware
Hinges Installation tools
 Complements and extends
current hardware portfolio

 Accretive to EPS

13
 24%

EMEA of Group
sales

 Organic growth of 5% 5 000 22%

• Strong growth in Finland, UK,

France, Southern and Eastern 4 500 20%
Europe, and in Africa/Middle East
• Good growth in Germany 4 000 18%

• Growth in Scandinavia and Benelux

• Strong growth for electromechanical 3 500 16%
products and smart door locks
3 000 14%

 Operating margin 17.3% (16.8)

2 500 12%
• Organic growth leverage +0.4%
+ Footprint savings and efficiency
- Investments in sales 2 000 10%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
• Curr. 0.1% and Acq. 0.0% 15 16 16 16 16 17 17 17 17
Sales, SEK M Operating margin, %

Excluding restructuring items.

14
EMEA Financial Review

SEK M Q4 2016 Organic Currency Acq/Div Q4 2017

Growth 5% 0% 2% 7%
Sales 4,577 237 -20 95 4,869
Operating income* 766 60 -2 18 842
Operating margin, %* 16.8% 25.4% 9.8% 18.8% 17.3%
Dilution/accretion 0.4% 0.1% 0.0%

12 months figures*
Sales 16,837 18,081
EBIT 2,722 2,990
Operating cash flow
2,577 2,977
before paid interest
Cash flow/EBIT 95% 99%

* Excluding restructuring items for 2016.

15
 21%

Americas of Group
sales

 Organic growth of 4% 5 000 24%

• Strong growth in
Electromechanical, High Security, 4 500 22%
US Residential, Canada, Mexico
and South America (excl. Brazil)
• Growth in Architectural Hardware, 4 000 20%

Perimeter Protection, Security

Doors and in Brazil
3 500 18%

 Operating margin 19.9%

3 000 16%
(20.8)
• Organic growth leverage +0.4%
+ Leverage 2 500 14%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
- Material cost 15 16 16 16 16 17 17 17 17

• Curr. 0.0% Acq. -1.3% Sales, SEK M Operating margin, %

Excluding restructuring items.

16
Americas Financial Review

SEK M Q4 2016 Organic Currency Acq/Div Q4 2017

Growth 4% -8% 1% -3%
Sales 4,362 153 -329 57 4,243
Operating profit* 908 45 -65 -41 847
Operating margin, %* 20.8% 29.6% 19.9% -72.4% 19.9%
Dilution/accretion 0.4% 0.0% -1.3%

12 months figures*
Sales 17,044 17,940
EBIT 3,640 3,815
Operating cash flow
3,447 3,491
before paid interest
Cash flow/EBIT 95% 92%

* Excluding restructuring items for 2016.

17
 11%

Asia Pacific of Group

sales

 Organic growth of 3% 3 500

• Strong growth in South Korea, South

3 000 15%
Asia, Pacific, and China Architectural
Hardware
2 500
• Negative in China Fire and Security
Doors 2 000 10%
• Personnel adjustment in China YoY -8%
1 500
• Strong growth in Smart Door Locks

1 000 5%

 Operating margin 9.7% (10.4*)

500
• Organic growth leverage -0.8%
- China, incl. higher steel costs 0 0%
+ Savings Q4 Q1 Q2 Q3 *Q4 Q1 Q2 Q3 Q4
15 16 16 16 16 17 17 17 17
• Curr. -0.2% Acq. 0.3% Sales, SEK M Operating margin, %

*Excluding write down in China in Q4 2016 and restructuring items.

18
Asia Pacific Financial Review

SEK M Q4 2016 Organic Currency Acq/Div Q4 2017

Growth 3% -4% 0% -1%
Sales 2,427 65 -101 9 2,400
Operating profit* 253 -13 -14 7 232
Operating margin, %* 10.4% -19.5% 14.4% 76.6% 9.7%
Dilution/accretion -0.8% -0.2% 0.3%

12 months figures*
Sales 9,189 9,211
EBIT 1,087 934
Operating cash flow
1,564 859
before paid interest
Cash flow/EBIT 199% 92%

* Excluding China write down SEK 300 M and restructuring items in Q4 2016.

19
 14%

Global Technologies of Group

sales

 Organic growth of 9% 3 000 22%

• HID
• Strong growth in Access Control
(Mobile keys), Secure Issuance,
2 500 20%
Citizen ID and Identification
Technology
• Negative in Identity & Access
management
• Strong seasonality in acquired 2 000 18%
businesses
• Hospitality
• Strong growth, including Mobile 1 500 16%
keys

 Operating margin 21.5% (18.6)

1 000 14%
• Organic growth leverage 0.9% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
15 16 16 16 16 17 17 17 17
• Curr. 0.2% and Acq. 1.8%
Sales, SEK M Operating margin, %

Excluding restructuring items.

20
Global Technologies Financial Review

SEK M Q4 2016 Organic Currency Acq/Div Q4 2017

Growth 9% -6% 2% 5%
Sales 2,687 239 -140 48 2,835
Operating profit* 500 74 -25 59 608
Operating margin, %* 18.6% 30.8% 17.9% 123.8% 21.5%
Dilution/accretion 0.9% 0.2% 1.8%

12 months figures*
Sales 9,697 10,373
EBIT 1,752 1,946
Operating cash flow
1,724 1,732
before paid interest
Cash flow/EBIT 98% 89%

* Excluding restructuring items for 2016.

21
 30%

Entrance Systems of Group

sales

 Organic growth of 3% 6 500 18%

• Strong growth in Pedestrian Doors, 6 000 17%

Door components, Industrial and
5 500
High speed doors. 16%

5 000
• Good growth in Residential doors 15%

• Negative sales in warehouse and 4 500

14%
logistics solutions
4 000
13%
3 500
 Operating margin 15.9% (15.4) 12%
3 000
• Organic growth leverage +0.6%
2 500 11%
+ Good leverage from consolidation

• Curr. 0.1% and Acq. -0.2% 2 000 10%

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
15 16 16 16 16 17 17 17 17
Sales, SEK M Operating margin, %

Excluding restructuring items.

22
Entrance Systems Financial Review

SEK M Q4 2016 Organic Currency Acq/Div Q4 2017

Growth 3% -3% 5% 5%
Sales 5,772 182 -153 271 6,072
Operating profit* 888 65 -21 34 966
Operating margin, %* 15.4% 35.8% 13.9% 12.7% 15.9%
Dilution/accretion 0.6% 0.1% -0.2%

12 months figures*
Sales 19,789 21,781
EBIT 2,753 3,087
Operating cash flow
2,713 3,065
before paid interest
Cash flow/EBIT 99% 99%

* Excluding restructuring items for 2016.

23
ASSA ABLOY is the global leader in door opening
solutions, dedicated to satisfying end-user needs
for security, safety and convenience

Q4 Report 2017
Carolina Dybeck Happe
CFO
 Financial highlights

October - December January - December

SEK M 2016 2017 Change 2016 2017 Change
Sales 19,484 20,109 3% 71,293 76,137 7%
- Organic growth 120 878 5% 1,428 2,834 4%
- Acquired growth 455 480 3% 1,967 1,753 2%
- FX-differences 609 -733 -5% -201 257 1%

Operating income (EBIT)* 3,213 3,359 5% 11,554 12,341 7%

EBITA-margin* 16.8% 17.1% 16.5% 16.5%
EBIT-margin* 16.5% 16.7% 16.2% 16.2%
Income before tax** 2,767 3,226 17% 10,549 11,673 11%
Net income** 2,088 2,385 14% 7,874 8,635 10%
EPS, SEK** 1.88 2.15 14% 7.09 7.77 10%

Operating cash flow 4,620 4,876 6% 10,467 10,929 4%

* Excluding China write down SEK 300 M and restructuring items in Q4 2016. ** Excluding restructuring items.

25
Bridge Analysis – Q4 2017

SEK M Q4 2016 Organic Currency Acq/Div Q4 2017

5% -5% 3% 3%
Sales 19,484 878 -733 480 20,109
Operating profit* 3,213 199 -130 77 3,359
Operating margin, %* 16.5% 22.6% 17.7% 16.0% 16.7%
Dilution/accretion 0.3% -0.1% 0.0%

 Price +2% and volume +3%

 Positive leverage from all divisions, except APAC

 Accretion from acquisitions/divestments in Global Technologies

 Dilution from acquisitions in Americas and Entrance Systems

* Excluding write down in China and restructuring items in Q4 2016.

26
P&L components as % of sales
January - December 2017
YTD 2017
% YTD 2016 excl. acquisitions Δ YTD 2017
Direct material -35.9% -36.5% -0.6% -36.3%
Conversion cost -24.6% -24.2% +0.4% -24.3%
Gross margin 39.5% 39.3% -0.2% 39.4%
S, G & A -23.3% -23.0% +0.3% -23.2%
EBIT* 16.2% 16.3% +0.1% 16.2%

 Higher material cost and lower conversion cost

 Organic growth leverage

• S, G & A down 0.3% vs. previous year, despite investments in R&D and sales

* Excluding China write down SEK 300 M and restructuring items in Q4 2016.

27
Operating cash flow, SEK M

Quarter 12 months
12 months cash flow / EBT = 94%
6 000 20 000

18 000
5 000
16 000

14 000
4 000
12 000

3 000 10 000

8 000
2 000
6 000

4 000
1 000
2 000

0 0
2012 2013 2014 2015 2016 2017

Quarter, SEK M Cash rolling 12 months, SEK M EBT rolling 12 months, SEK M

28
 Net debt/EBITDA
1.8 (1.8)
Gearing % and net debt, SEK M

Net debt Gearing

Debt/Equity 50% (49)
30 000 90

25 000 75

20 000 60

15 000 45

10 000 30

5 000 15

0 0
2012 2013 2014 2015 2016 2017

Net debt, SEK M Gearing, %

29
Earnings per share, SEK +67%
in
5 years

Quarter
YTD EPS +10%* 12 months
Dividend proposal 2017: 3.30 SEK, +10%
2.25 9.00

2.00 8.00

1.75 7.00

1.50 6.00

1.25 5.00

1.00 4.00

0.75 3.00

0.50 2.00
2012 2013 2014 2015 2016 2017

Quarter, SEK Rolling 12 months, SEK

*Excluding restructuring items in Q4 2016.

Chart is restated for Stock split 3:1 2015 and excludes cost for restructuring programs in 2013 and 2016.

30
ASSA ABLOY is the global leader in door opening
solutions, dedicated to satisfying end-user needs
for security, safety and convenience

Q4 Report 2017
Johan Molin
President and CEO
Conclusions Q4 2017

 Sales +8%, excluding currency

• Strong growth in Global Tech and
EMEA
• Continued good growth in
Americas, Entrance Systems, and
APAC, with flat sales in China
• Strong development for smart
door locks and electro-
mechanical solutions

 Strong profit and cash flow

* Excluding write down in China and restructuring items in Q4 2016.

32
 Q&A

www.assaabloy.com
www.assaabloy.com