Capital Market Day 28 November 2006 Update Asia Pacific Martin Brandt, EVP Asia Pacific Division

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Capital Market Day 28 November 2006Update Asia
PacificMartin Brandt, EVP Asia Pacific Division
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Agenda

• Our presence in Asia Pacific
• Focus Australia
• Our position
• Market characteristics and trends
• Our growth opportunities
• Focus China
• Overview by product category
• Our position
• Market characteristics and trends
• Our growth opportunities
• Conclusion

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Our current presence in Asia Pacific
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ASSA ABLOY Korea
Beijing Shanghai Hong Kong S
Beijing Shanghai Shenzhen Hong Kong
Japan
ASSA ABLOY WANGLI Yongkang
Taiwan
Vietnam
ASSA ABLOY GULI Xiaolan
Thailand
India
Philippines
Malaysia
Singapore
ASSA ABLOY Lockwood Brisbane
Indonesia
ASSA ABLOY Lockwood Melbourne
Security Merchants Australia New Zealand
ASSA ABLOY Trimec. Sydney
Sales Units
ASSA ABLOY New Zealand
Production Units
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Our position in Pacific

• Clear market leader No. 1
• Commercial and residential
• 200 MUSD in sales
• Leading product brands Lockwood, Interlock
• Several new products introduced 2006
• mechanical and electromechanical
• Main channels locksmiths, door and window
  manufacturers, security
  installers, retail
• Strong specification team in Australia
• Manufacturing to assembly completed by 2008

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Market characteristics and trends - Pacific

• Mature market
• Commercial is 60 and Residential 40 of total
  market
• Competition from Asian imports
• Low and middle segment
• Slow down in residential
• Growth in commercial and electromechanical
• Consolidation of distribution

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Our growth strategy in Pacific

• Continue to invest in demand generating
  activities
• Specification
• Selected end user segments
• Intensify new product development
• Mechanical and electromechanical
• Sales organization development
• Channel focused
• Complementary acquisitions

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China
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China Market by product category
Electronic Intelligent Security
Security hardware
Products Size (USDm) Growth
Products Size (USDm) Growth
1,070
High
ID/Access control
High
Steel doors
48
685
Locksets
Moderate
Door automatics
High
43
Arch Hdw
473
Moderate
Magnet, Strikes etc.
23
High
Padlocks
211
Low
Win. locks
139
Moderate
Exits, Panics
10
High
Rimlocks
Low
110
Closers etc.
High
176
Total
Total
125
2,865
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Our position in China

• Leading position in high end project market
• Own specification teams
• Utilizing Group strength (ANSI, EN, AUS packages)
• Guli among the top three brands in the
  residential market
• Locksets, rim locks, handles, door closers
• 160 selected distributors
• ASSA ABLOY Wangli - Leading in high end
  residential steel doors
• 1400 distributors with showroom and installation
  resources
• But still only single digit total market share

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Competitive Landscape China
lt 5 Total Market
Mega Projects
International players
Local manufacturers Top 10 lock and door
companies Focus on Mid high end commercial,
residential
Mass Markets
Market Size
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Market characteristics and trends - China

• Low end segment
• not visible and not adequately served due to
• Lack of regulatory framework
• Lack of awareness
• Locally fragmented - no national or global
  players
• No product differentiation between commercial and
  residential application

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Market characteristics and trends - China

• Mid end segment
• Growing middle class
• Private owned apartments
• Security awareness
• Emerging standards anti-theft doors and locks
• Today residential products are also used for
  commercial applications
• Trends
• Local and national players grow rapidly
• Increased interest from global players
• Local companies asked to draft enhanced National
  standards

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Market characteristics and trends - China

• High end segment
• Residential
• Western living standards
• Security needs covered by guards
• Convenience driven demand for locks electronics
• Aesthetic design driven demand for doors and
  handles
• Commercial
• Strong influence by foreign architects
• Specification driven
• International brands - high quality
• National manufacturers entering with good
  enough quality proposition

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Our growth strategy in China

• Continue to invest in
• RD (China package)
• Specification and sales teams
• Logistics
• Intensify distribution network development
• New products and solutions
• Education training
• Build strong position for different segment

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Our growth strategy in China

• Leverage the 1400 Wangli distributors through
  cross selling
• Acquisitions
• Fill products gaps
• Market coverage
• Estimated 300M rural populations to be urbanized
  by 2015!

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Conclusion

• We have a good base for future growth
• New products
• Product Development in Pacific and China
• Utilizing Group products and technology
• Channel presence
• Asia Build and develop
• Pacific Develop
• Acquisitions
• China focus
• New markets
• Complementary products
• Margin improvement
• Manufacturing to assembly completed by 2008