Segment Access Solutions EMEA

Organic sales growth, slightly higher profitability

Operational performance

In the period under review, segment AS EMEA generated total sales of CHF 777.8 million and organic sales growth of 1.9% compared to the previous year. EBITDA amounted to CHF 56.7 million, an increase of 0.2% over the last year’s figure. The EBITDA margin was slightly higher at 7.3% (previous year 7.2%). Higher volumes, a positive mix effect, and operational efficiency improvements slightly overcompensated higher expenditures in business development and higher IT costs for the roll-out of global applications.

Market development

Sales growth of AS EMEA was driven by double-digit growth rates in Central and Eastern Europe, especially Russia where the business gained several major contracts for retail chains. The Benelux countries and the UK contributed to sales growth as well. Business in the UK benefited from Services, which more than offset the weaker business environment due to political uncertainty. The segment’s UK organization has prepared itself for a potential hard Brexit and has increased, amongst other measures, its inventory levels.

Sales in Scandinavia were below previous year’s level as double-digit growth in Denmark and Finland could not compensate a very weak performance in Norway. The region Middle East and Africa was flat in terms of sales compared to the previous year due to challenging market conditions in South Africa and Kuwait which offset a favorable development in the UAE, Qatar, and Saudi Arabia. Sales in Southern Europe were below previous year’s level due to a strong prior year performance in Spain, where major airport projects were executed. This negative base effect particularly impacted growth in the second half of financial year 2018/19. Growth in France was weaker in the second half of financial year 2018/19 as well, but flat year-on-year. 

Growth in the Product Clusters was driven by Entrance Systems, Lodging Systems, and Electronic Access & Data (EAD). The latter benefited from projects like the Doha Oasis project in Qatar where EAD and Lodging Systems solutions were combined to an attractive offering for the customers. Lodging Systems won several major contracts for Mobile Access Solutions from global hotel chains which is another step in establishing this technology in Europe. Safe Locks and Interior Glass Systems were below prior year’s level.

The segment has introduced, amongst other products, mobile access for corporates which was successfully launched in February 2019. This solution enables the use of mobile credentials within online, wireless and unconnected readers. The solution scales across large and complex organizations and reduces the effort for managing the badges for corporates.

Outlook

AS EMEA will focus on profitable growth in financial year 2019/20. The business expects a relatively stable market environment despite the ongoing political and economic volatility.

The segment expects that profitable growth will be driven by strategic pricing initiatives as well as strengthening of its Services and project business across regions. Strategic focus will be on specifications and selected verticals such as healthcare, airports, and hospitality. AS EMEA will continue to improve organizational efficiencies by substantially investing in its IT infrastructure and global applications as part of the enterprise excellence and digitalization strategy.

AS EMEA has addressed structural issues in Scandinavia and has selectively strengthened local management; it will implement measures to improve business performance in this region.

Key figures - segment AS EMEA

 
Segment sales (in CHF million) - AS EMEA