News

Continued operations January - June

The summarises for the first six months of 2020 the financial figures of only the continued operations as several businesses had to be presented as "for sale" after the decision of the EU Commission (published on 28 February 2020) that the approval of the sale of the majority of agta record to ASSA ABLOY required various commitments to address competition concerns. The corresponding divestitures closed on 31 August 2020 and are deconsolidated from that date.

The 7% turnover decline of the six months of 2020 is the result of an unusually uneven development of business activities. The unprecedented size of order book at the start of 2020 carriedd the continued operations to a solid first quarter. In April and May, order intake and sales declined significantly due to the pandemic, but recovered partially towards the end of the first six months.

During the first six months sales of service and maintenance declined by less than 2% whereas product sales decreased by almost 11%. The resulting mix change helped gross margin to expand by 0.7 percentage points.

The decline of the EBITDA margin from 17% to 13% was not only the result of lower efficiency and decreased cost absorption, but is also overstated due to a EUR 3.0 million benefit included in pension expenses in 2019 and a EUR 1.5 million restructuring charge booked in personnel expenses in 2020. The adjustment of EBITDA for these non-recurring items results in an EBITDA margin decline of less than 1 percentage point.

The balance sheet and especially cash generation remained strong throughout the period, highlighted by unprecedented net liquidity of EUR 113 million (continued operations only).

Next media release
3rd quarter turnover on 22 October 2020 (after trading)

Majority shareholders complete sale of agta record to ASSA ABLOY

The shareholders of agta finance completed the sale of their indirect 54% shareholding in agta record to ASSA ABLO, previously a 39% shareholder in agta record.

ASSA ABLOY now owns approximately 93% of the share capital and voting rights.

The purchase price for the 54% stake is based on an adjusted* purchase price per agta record share of EUR 70.58 and valuing agta record at more than EUR 940 million.

As previously announced, ASSA ABLOY will file a proposed simplified public tender offer for the remaining outstanding shares of agta record listed on Euronext Paris immediately after the closing and at an adjusted* price of EUR 70.58 per agta record share, subject to the AMF's regulatory approval. agta record will apply immediately after the closing for the delisting of its shares from Euronext Paris. Subject to Euronext Paris approval, the delisting will become effective shortly after the closing of the proposed simplified public tender offer.

*notably adjusted to include an interes component

Resilient service business keeps turnover decrease limited

In the first half of 2020, turnover lelated to service and maintenance activities almost reached the level of the first six months of the previous year which helped the group to incur a pandemic-related turnover decline of only 7%. Product sales were almost at prior-year level in June after having suffered double-digit declines in April and May due to interrupted or prohibited installation activities. The weakening of the Euro against the US dollar and the Swiss Franc did not have a major impact on half-year sales.

The countries with important markets for the group were not uniformly impacted by the pandemic. Turnover remained close to prior-year levels in Germany and Switzerland whereas France, the U.K. and the U.S. had to register larger declines. On the positive side, the order book of the group is very close to the size of 12 months ago.

The acquisition of agta record by ASSA ABLOY is expected to be finally approved and to close during July 2020 (see media release of 29 June 2020). The subsequent public tender offer by ASSA ABLOY for the remaining agta record shares, will be launched thereafter and as soon as possible, subject to the French regulator's (AMF) approval.

Half-year sales 2020 (January – June) – unaudited

agta record sells five businesses in relation to the ASSA ABLOY transaction

agta record and ASSA ABLOY entered into binding agreements with Italy based FAAC group for the sale of certain agta record and ASSA ABLOY businesses. These divestitures are part of the commitments to address the competition concerns of the EU Commission in connection with the aquisition of agta record by ASSA ABLOY.

The divestments encompass the agta record businesses in the Netherlands, Austria, Hungary and Slovenia, as well as the agta record high-speed door business located in France. In addition, ASSA ABLOY is divesting its automatic pedestrian door businesses in France and the UK. The divested buisnesses had compbined turnover of approximately EUR 93 million in 2019, representing about 20% of total initial added revenue. The selling price for the divested businesses is EUR 100 million on a cash and debt free basis.

The divestitures are subject to customary closing conditions and are expected to close during the third quarter of 2020.

The acquisition of agta record by ASSA ABLOY is expected to close during July 2020 after all remaining closing conditions and the EU Commission requirements have been fulfilled. Additional information, particularly with regard to the closing of the acquisition of agta record by ASSA ABLOY and the subsequent tender offer bay ASSA ABLOY for the remaining agta record shares, will be communicated as soon as possible.

Pandemic slows down 1st quarter sales

The pandemic started to impact turnover in the course of March after the agta record Group had booked attractive growth rates during the first two months of 2020. During March product sales (-19.5 %) were more impacted than sales of maintenance and service (-5.7 %). Many customers had to delay installation work because employees could not travel or due to closures of construction sites and buildings. On a positive note, order intake continued to grow in the first quarter, both in the product business (2.7 %) and in mainteance and service activities (2.9 %).

Given the volatility of current developments, it is not possible to issue any forecast regarding the development of business during the full year. The managment of the agta record Group is ready to adapt the organisation and the capacities. In addition, having no debt and a substantial amount of cash on the balance sheet will help to emerge in good shape from the pandemic.

agta record finishes 2019 in growth mode and improves margins

After booking revenue growth of 7.8% in 2019, agta record broke through the EUR 400 million barrier for the first time. Growth of product sales was higher (+9.4%) than in service and maintenance (+5.6%) which resulted in a slight reduction in the gross margin (in percent of revenue). Good cost management let the EBITDA margin climb to 17.5%, also supported by a one-time pension credit (due to IAS19) and the first-time application of IFRS 16 (Leasing) which contributed a combined 1.6 percentage points to the improvement. EBIT increased by 40.2% to EUR 53 million. The improved financial result and a lower tax rate of 22.4% resulted in net growing by 55.6%.

Outlook and impact of the pandemic
By the end of February, agta record had grown order intake by 7%. At this point in time and depending on the country, construction sites have been closed or show limited activity, orders and projects are being postponed and technicians are restricted in their mobility. The office based workforce of the group is predominatly working from home. Depending on the country, various options exist to mitigate the negative cost impact of personnel without work. The spreading pandemic and reduced activity are already having negative influence on the March results. Due to the low visibilty it is not possible to evaluate the impact on the full year.

As communicated on 28 February 2020, ASSA ABLOY received phase 1 conditional clearance by the EU Commission to indirectly acquire the 54% shareholding in agta record from the shareholders of agta finance. ASSA ABLOY is expecting the closing in the second half of 2020 after all remaining closing conditions and the EU Commission requirements have been fulfilled.