Standard & Poor's Rating Services Affirms Credit Ratings for ASSA ABLOY AB

Standard & Poor's (S&P) announced ratings on ASSA ABLOY AB at 'A-' and 'A-2' with stable outlook. S&P announced that ratings reflect its view of the Company's strong position in the moderately cyclical lock and door markets, its highly diverse customer base in both mature and growth markets, and its innovative product portfolio, supporting the Company's strong and stable operating performance and cash flow generation. These factors are mitigated by the Company's aggressive acquisition-led growth policy and high dividend payouts, which resulted in weak debt-protection measures for the ratings. S&P considers further mitigating factor to be the Company's exposure to increasing competition in some growth markets. The short-term rating on the Company is 'A-2', reflecting view of the Company's overall adequate liquidity. The stable outlook reflects S&P's view that in 2012 and 2013 strong and sustainable FOCF will continue to mitigate the Company's relatively high debt, including a fairly high proportion of short-term debt resulting from the Group's dividend policy, large Cardo acquisition and small ongoing acquisitions over the next two years. S&P would consider lowering the rating if cash flows and credit metrics were to decline significantly below its base-case ratios. A scenario of no revenue growth and deterioration in the Company's gross margin could also lead to a negative rating action. An upgrade at this stage is unlikely in view and would require significant deleveraging.