Ladies and gentlemen, I see we have many people coming today. I understand why, because we have a good quarter. With the fourth quarter report, is a very warm welcome. If you can sit down there in the corner, we will concentrate on the presentation. A quarter over which I feel very proud. Looking to the evolution, we saw organic growth in all divisions, very strong growth in Global Technologies, and strong growth in EMEA. Continued strong growth in Americas, Entrance Systems, and APAC. APAC, as you know, has been problematic for us, but also there we saw a revival in China, just what we said also last quarter that we saw an improvement there. We saw strong development also for our electromechanical lock solutions. A very positive evolution, which is, of course, fueling our growth across the board.
The profit was continued to be strong and also the cash flow was very good as it usually is in Q4. Our new CEO, Nico Delvaux, has been appointed, and he will succeed me after 15th of March. Let's have a look to the numbers. Sales improved by 3% net to SEK 20.1 billion on the back of 5% organic, 3% acquired, and 5% negative currency. EBIT improved also to SEK 3.3 billion by 5%, a good 5%. Here we saw a slight expansion margin. What we also have seen is currency effect in the quarter minus SEK 130 million. We spoke last time that we're going to take some amortization of goodwill, and this is due to that we have bought August, Arjo, and Mercury in the quarter, and this will continue for quite a while.
Therefore, we decided, as we said last quarter, to show you really the EBITA. It was SEK 87 million depreciation in the quarter, and if you see to the margin, the operating margin, EBIT improved to 16.7%, but the EBITA improved to 17.1%, 0.4% improvement over EBIT as such. An improvement in margin was 65 to 67. Earnings per share improved by a whole 14% to SEK 2.15, a new record. For the full year, a similar evolution, 7% growth altogether, 4% organic, 2% acquired, and 1% currency. Here we should remember also we have sold a few companies, which has made the acquired growth to be a couple of percent negative during the year. Operating margin amounted to 16.2%, the same as last year, despite that we had a quite problematic situation with China during the year.
Here you see the EBITA margin is three-tenths of a percent better than last year. Over EBIT, sorry. Earnings per share improved by 10% to SEK 7.77. Turning over to the sales in the world. Mature markets continued good in the quarter as such. Americas has grown since the beginning of the year by 5%, EMEA 4%, and APAC 7%. You can see the mature markets, contrary to what we have seen many years back, have been growing faster and stronger than emerging markets. In this quarter, if we look only at the quarter itself, the emerging markets started to accelerate. China was growing by 2% in the quarter. Brazil, that has been negative, also grew in the quarter with a couple of percent, and also the Middle East came to a revival.
We saw clear improvement apart from all the other markets in emerging markets that have been growing all the time, a clear improvement of the three problematic markets we have had since a while back. 2% organic growth altogether in South America, 4% in Africa, and 1% in Asia. In Asia, China, since the beginning of the year, is -5%, but in the quarter itself, +2% for the group. On the market side, a lot of exciting things. As usual, very difficult to choose. I've taken out a few pieces now. CLIQ, where we have launched CLIQ Web Manager and CLIQ Go. Both are cloud softwares. CLIQ Go has just launched. CLIQ Web Manager has been in the market for a while, and we see a very strong upsurge on quotes, but also on orders that we have received. A very good evolution.
Medeco has also been upgraded with cloud operability. It's mainly for vending machines. It's a U.S. solution, vending machines, and also for parking meters, and doing also very well. What is really driving the customer is that you can operate it. Can someone close that phone? What we see also is that customers are very intrigued by the Bluetooth keys, that they can update the key with the help of the mobile phone, and that works quite well in the sense that customers, especially those that have big service fleets, they use the Bluetooth key really to upgrade and send daily working orders day after day. We have seen a very good evolution.
Another thing that I spoke about last time but is now really coming into market is what we call the PULSE, which is a green cylinder where there's no battery or maintenance whatsoever, where there's a small dynamo inside, which is enough to power the whole solution. We think this will also be another boost of turnover going forward. On the smart door lock side, we continue to have very nice progress, both on the basic locks, but also that Amazon decided then to join forces with us, and the same with Google Nest, which we have been waiting for a while. They had some software problems. Now they seem to be solved, and they're launching now in Q1.
We will continue to see good demand situation when it comes to smart door locks, and also that we acquired August Home, as you know, to complement our range in the U.S. market. A very positive evolution. On the e-gov side, we had another last quarter I shared with you that we had, now we can say it was Tanzania that ordered the full system A-to-Z with the passport system. Now we have another country that we cannot disclose today, but a similar size in South America that has decided to go for our solutions as well. Very good and positive evolution, thanks to all the new things that we have launched within the gov side in recent years. Turning now to sales growth, you can see the blue and the dark blue and the light blue combination of organic and acquired growth.
The acquired growth was 3% in the quarter and our organic was 5%. You can see net, we were growing 8% altogether. If you could take a little bit five-year cumulative situation, the growth is more than 50%. It's very, very powerful, this continuous growth. We have a growth that is in excess of 8% in recent years, despite then that we have been a little bit careful to make large acquisitions simply because the multiples right now have been a bit exaggerated. On the operating margin, continue on the 16.2 level, a very steady evolution, I would say. Despite then that we've had dilution from China on one tenth of a percent in the quarter and two tenths of a percent since the beginning of the year.
As you probably, or we should receive in the numbers also that APAC now is leveling out on a level around 10% EBIT, we think we will see improvement going forward as well since we do a lot of changes in a positive sense. This doesn't look so much, this is flat, but of course with the growth we have saw on the other side or other slide, we turn then on into profitability, you can see that the profit has improved by 65% in the last five years. We had a record level of SEK 12.3 billion in the quarter, so up from SEK 11.5 last year, a 7% improvement. Quite a steady and continuous improvement as we move forward. One of the secrets I always share with you is the manufacturing footprint.
I mentioned last time that we are launching or working on a manufacturing footprint program 7, that is what we intend to launch in the new year, will only be launched for us Q4 in this year, we are preparing then for a new round of factories. We've acquired more than 30 companies since last, there are more need for structural changes. That will come as we progress into this year. We have still on the old program, SEK 944 million in the balance sheet and another 11 factories on the closure. There's a lot of reshuffling inside of Assa Abloy and primarily within Entrance Systems, but also here and there in EMEA and in APAC. Continuous good improvements.
Carolina will share with you also that there are quite some savings coming out of those programs going forward into this year and next year. 1,400 people almost will leave the company as a result of the MFP6 program that is actually right now running. As I said, the 7 will come during this year. On the acquisition side, pipeline continue to be full of opportunities for us, a lot of activity. We had only two acquisitions in this quarter, we're up to 19 in the last year. We have added SEK 3.2 billion, a little bit less than we normally do, simply because many of those acquisitions were of bolt-on character. Still a very good number, 4% added turnover.
This is of course, also due to the divestment of AdvanIDe with SEK 1 billion that had a turnover of SEK 1.25 billion. You will see from the accretion from acquisitions that it was not so bad to let them go to someone else. On Phoniro, we acquired elderly care is something that comes globally. We have acquired a company only in Sweden here, which is focused only on this specific segment. Here, smart door locks are used in order to manage the door of someone that has assistance in their home from people coming on a regular basis. That also monitors the time and attendance. This company specialized in this with a turnover of SEK 175 million, very nice profitability. It is accretive to earnings per share.
A lot of this is recurring revenue because what you do sell is apart from the lock itself, you do sell a service in the sense time and attendance service and also virtual keying services. This is an interesting segment that just opens up in the marketplace where we are entering now with specialized focus. This entity will be part of hospitality business. It is similar to the hospitality business. It is a global thing, that is the reason why it is put into the hospitality segment. Then we have one more of these bolt-on no-brainer type of acquisitions. We are very happy to have the Dale & Excel Hardware to join us. It will be bolted on to our U.K. operations. I am sure it will be very additional or positive the way we do.
They are market leading a few segments in the U.K. market. We are pretty much the leader in many other of those segments. Together we will create an even bigger force in the U.K. With the Union brand, we will also be introduced into the Middle East area where we have a strong position with the parts that complement us. It is very accretive to earnings per share. This is again, a very positive acquisition to the group. Turning now to the divisions, EMEA did very well in the quarter, strong growth in pretty much everywhere except where perhaps you remember I said In Scandinavia, we have been growing strong. Now we are still growing, to a lesser extent, simply because the market has boosted so much.
That was only a few % growth while the rest of Europe is coming to life more and more. We have seen already last year, Italy, Spain, a few other markets have come to life. With our joy also now France has started to order or to come much more into life, which is very positive. Also here, I mentioned earlier, in Africa and Middle East, we had a de-stocking situation one year back. That is over now. Now we start to grow again on a very strong basis in the Middle East. We can see from the oil prices that are there right now that there is a lot more activity on construction taking place. This looks quite good going forward as well. Margin expanded a half % to 17.3%, up from 16.8% one year back.
Here we have very strong leverage from volume growth, simply. In Americas, we grew 4%, a good situation in the marketplace. Strong growth in most parts of the market, while perimeter protection, which is more industrial-oriented, was a little bit weaker in the quarter, but still growing. Security doors, and for name, also Brazil. Brazil, as you probably remember, has been declining before, now started to grow. It feels as if the recession is not over, but it's now coming towards the end of the bad cycle that we have seen there. Margin dropped by 1% in the quarter. This is due to the August acquisitions. We had quite some transactional costs to acquire that company.
They invoiced the Christmas sale in October, November, and they only, in our numbers, for one month, which was pretty much a clean month when it comes to invoicing, and it's difficult to make money then. We had 1.3% dilution. This will continue, not 1.3%, but it will continue during the year, as we said previously, will be about 0.8%-1% dilution over the year. It's a very positive addition, nevertheless, to the company, so a good investment. On APAC, we grew 3% everywhere: South Korea, South Asia, Pacific, and China locks, architectural hardware, that's the smart door locks, combined also with distribution. More and more Chinese customers do replace the locks that they have on the door. Quality is not always top.
We see more and more distribution sales, and that's one of the reason why we see architectural hardware in China growing while the doors still are a little bit depressed. This is mainly, as we have said before, we have this coverage mainly towards the northern part of China that is not doing all that well. Personnel adjustment continued on a high level, 8% continued reduction during the year. As I mentioned, a very nice smart door lock sales inside of China, but also in the rest of APAC as such. Margin was more or less stable at 9.7%. Last year we had 10.4%. We also had some turbulence, as you probably remember, that we took a one-off last year of SEK 300 million. We did not have it this year.
We continued to be very cautious on receivables and take a very conservative stance on what we have in our books, and that meant also in the 9.7 we have continued to write down receivables where we are not 100% sure that they get paid. Underlying, the business is doing quite well, to be honest. Global Technologies, fantastic evolution, very exciting. Here it's access control doing fantastic. It is Secure Issuance doing fantastic, citizen ID, and IDT. Pretty much every part is doing very well. There's only one element, the identity and access management, where we launched a lot of new products, where we lose a few old contracts with the government, which are replaced, but not at the same level. All the new products are catching on. Orders or quotations are very high. It looks pretty good.
All the parts here is very much driven by the new virtual world. A very positive evolution. On the hospitality side, also the same thing. Hotels are investing heavily into virtual keys. We have the comment here with one of the larger hotel groups in Scandinavia, 3,000 people all were equipped with virtual keys, flawless operation. Very positive. Was it Clarion Hotel? Clarion? I'm asking you now.
Choice.
Choice Hotels, sorry. Choice Clarion Hotel. A very positive evolution also there. We see good continued demand in this field. Profit was, as a consequence of good demand situation, going up to 21.5%, up from 18.6% one year back. Here, as I mentioned to you, we sold off AdvanIDe that had very low margin, we replaced it with Arjo and Mercury Security. Therefore, you can see the accretion was quite high from acquisitions, 1.8% in the quarter. Worth to mention also is that it was a high seasonality. Q4 is always very strong in Global Technologies, but this is it every year, so underlying business is growing at a very strong pace. On Entrance Systems, growth of 3%, a little bit less than we usually see. Order situation was very good. We didn't get it out all in December, so it looks also reasonably good.
Strong growth in pedestrian doors, door componentry, industrial doors, and high-speed doors. Pretty much across the board, a very strong growth. Also good growth in residential doors that always has been a little bit weaker. We see it so in the U.S., but I think that is more seasonality in the sense we have. That was the only part negative, which was logistics and warehousing solutions has gone fantastic with all these investments in internet trading. That we see it will continue. It's just in this quarter, it's a bit lumpy because normally you get big logistics centers, so you get less big invoicing, and this is the way it works. Very positive, and also despite an only 3% organic growth, our accretion continued on margin 15.9%, up from 15.4%.
For the year, if I remember right, we were 14.3% now, so it's not far away from the 15% we said a few years back that we would be able to achieve with this business. I can say we are by far more profitable than anyone in this industry if you look to the size of the business and operation we have. I'm very pleased, I must say, with the evolution in this part. Only in a few years' time, we've gone from SEK 22.6 billion in turnover to more than SEK 22 billion right now. A very fantastic evolution. That concludes my overview. I'll open up now for Carolina.
Thank you, Johan. I will then start with the financial overview. It's a nice financial overview. Another year already ending, 2017, and in the fourth quarter. I will start with the most important part, which was very positive in this quarter, the organic growth. We had a full 5% organic growth in the quarter on roughly the same working day for the group. We estimate the price effect to be +2% and the volume to be 3%. We've continued to see during 2017 good price increases due, of course, partly then to the raw material increases. That brings the full year to 4% organic growth. Next one, acquired growth. I would say net 3% because we actually acquired for 5% in the quarter, but we then divested 2%. We have a net of 3% in the quarter.
The full year is then on 2%, and that again would have been gross 3% and it's then net 2%. Currency. Well, turns sour, or rather I should say the dollar, big turns in the dollar. Since we translate everything to krona, we got a big effect from that. A full -5% on currency on the top line for the group in the fourth quarter, where the full year is still slightly positive with +1%. Overall, 3% top line growth in the quarter. The margin also improved a bit. We went from a 20 basis point improvement here, and I would say that there are a couple of things working in different directions here. We have the raw material, which has been tough.
On the other hand, we have the price increases as well as the savings from the restructuring and the volume growth in most places. We have the, as expected, weaker margin on APAC, and I'll talk more about that later. Between the EBIT and the earnings per share, we had a good financial net, slightly lower than a year ago, with continued low interest rates. We have the tax. I just want to make a comment on the tax, because we have seen that there is a big tax reform in the U.S. that actually came into place. For us, for the full year, the underlying tax rate has been 26.8%, so almost 27%. The effect on us is a one-off from the U.S. reform of roughly 1% already in 2017, which means we end on 26%.
Therefore also going forward, assuming the same mix and regulation, also with the new regulatory there, we will stay on 26% as tax rates. With that, we finally come to the earnings per share, which is a strong improvement then of 14%, but it's then being compared to the Q4 last year where we had a one-off in APAC. Last but not least, cash flow. Continue to see a strong cash flow in the fourth quarter as we usually do. An improvement of 6% on the cash as well. Bit of a deep dive into the P&L, bridge analysis, and really separating the like-for-like business from the currency and also from the acquisitions. Here I would say that we see really good results on the organic growth side.
Taking the different divisions, of course, we have Global Technologies with very strong organic growth, 9%, had a very good drop through a full 90 basis point improvement on the organic side. Very good there. Also EMEA and Americas with strong growth with 5% and 4% organic growth also had a really nice drop through with 40 basis points, both of them here. Combination of the growth as well as restructuring here. Entrance Systems, not as high growth, but on the other hand, as Johan mentioned, really good results from their efficiency savings and consolidation. Also a strong improvement here on the drop through. We have APAC. As expected, the lower margin this year, which dilutes in the quarter around 10 basis points for the whole group, and for the full year between 10 and 20 basis points here.
Overall, good drop through everywhere, and in China a bit lower as expected. Currency, since it's mainly a translation difference, you saw that the top line basically translates to the same bottom line margin. We have a small dilution on the FX, which is 10 basis points. The bit odd one here will be on the acquisition side. Again, here we have 5% acquired and 2% divested. Here it's a bit different. You can say that Americas and Entrance Systems are different in the sense that Entrance Systems has the typical dilution from the typical acquisitions, while Americas has a bit of a larger dilution from acquisitions, as Johan also mentioned, with them coming in very late in the year from August.
On the other hand side, we have Global Technologies acquired not only a couple of really techy companies with good margin, but also divested AdvanIDe, which was very low margin business. Had actually a big margin improvement from acquisitions. Overall, the mix of that actually ends up flat for the group. No dilution in the quarter from acquisitions. Taking a look at the P&L from a different perspective, components of sales, and this is the full year view. Here I would also say that it has continued the way we have seen through the year. I guess there are two big things here. The first one is, of course, that we have managed to get through the price increase of 2% for the full year, and that has helped offset quite a lot of the raw material.
We still feel that the raw material as part of direct material then has gone up, and we have 60 basis points increase from direct material. Here it's clearly so that the divisions with the bigger door exposure by definition have more raw material. I would say that Entrance Systems has fully compensated. EMEA doesn't have much doors. Global Technologies, basically not so relevant on the raw material. For Americas, we have increased prices, and we have seen sort of an improvement, but we're not fully there yet. We continue to work on increasing prices and catching up on that one. The part which is really tough, as Johan also mentioned, is still in Asia-Pacific or in China specifically, where we have a lot of doors and where competition is not increasing prices enough.
We have also increased prices, also not enough to offset fully on the material side here. On the other hand, we continue to see really good savings, both on the restructuring programs, the manufacturing footprints, also on the other efficiency programs. We improved on that part with 40 basis points. The margin is almost the same as a year ago. On the other hand, on the SG&A side, we have had savings on, you can say, on the automation of our processes. We've seen that flow. On the other hand, we've continued to invest both in R&D engineers as well as in sales people and specifiers. With that mix, we still managed to decrease the SG&A with 30 basis points. Overall, for the full year like for like, we have an improvement of 10 basis points.
We have, for us, a rather smaller dilution from acquisitions, also 10 basis points. The margin stays flat year-over-year. From the P&L then to the real cash, this is the picture of the cash flow. One thing I think that sticks out is that the seasonality continues to be strong. First quarter, very weak, second and third, good, the fourth quarter, very strong. This fourth quarter was no exception. It continued to be a very strong quarter on the cash flow, 6% up year-over-year. Here I think it's important to put it into relation with our size and how we are growing. We always look at it combined with working capital and the efficiency KPIs on working capital.
Here we can see on the DSO, we are on 52 days, it's two days worse than a year ago, basically in a good situation. I would say also with China stabilizing, it's not cleared, it is stabilizing with significantly higher provisions for bad debt. We also see on the PO or the payables that they have increased to 64, a good number as well on the payables. Also inventory. A lot of inventory has left the building. We are now down to 92 days for the whole group, which is three days better than a year ago, overall a pretty good number. CapEx is a bit up compared to a year ago, here we see a shift in what kind of investments we do. It's more in automation and in different sort of digital solutions.
More on the IT side compared to the big green machines that we had a couple of years ago. Overall, a very good performance on the cash flow. With the good cash flow, this is what we see on the debt side. Here there are, I would say, two main things to look at. One thing is that the gearing is now on 50, which it has been for a while. It's actually even slightly gone down, we continue to be on a good level there. Another thing that continues to be important is net debt EBITDA, which also is on 1.8, which also is on a similar level to which it has been for the last couple of years.
I would say on the questions on acquisitions, it's not really the balance sheet that is holding us back, but it's rather, as Johan commented on, the price tag that we're working on. One thing to say here is that we bought a lot of companies during the year, but we paired most of them towards the end of the year. We had quite a big acquisition spend towards the end of the year, and that's why we end the net debt with SEK 25 billion. It's a little bit higher going out of the year, and therefore also with the financial net consisting of both long-term interest rates going up and quite a lot being in US dollars. The financial net will then be a bit higher next year. Overall, good situation here on the balance sheet.
Finally, most important, the earnings per share slide. Here you can see a really nice trend. We're up 67% in the last five years. We have also a proposed dividend that increases with 10%, which is the same amount as earnings per share for the full year has increased compared to 2016. SEK 3.30 for proposed dividend. With that, I give back to you, Johan, for conclusions.
Thank you, Carolina. Conclusions are, as usual, rather short. We had net sales increase by 8%, excluding the currency, quite a good evolution in the quarter itself. We saw a very strong growth in Global Technologies, EMEA was also growing strongly, and continued growth in all the other parts of the group. I think in this quarter, very important, China, Brazil, and also the Middle East all came back online and started to grow again, which is very encouraging for 2018. Also that our electromechanical lock solutions continues to have very good progress in the various markets. As Carolina said, profit continued to develop well, and cash flow as well. Altogether, a very pleasing evolution. With those words, I open up for Q&A. I would like to invite Holger here, that will help us, I think, to manage the whole Q&A session.
Thank you, Johan. Thank you, Carolina. Good morning, everyone. My name is Holger Lembrér, and I'm the investor relations officer at Assa Abloy, and I will facilitate the Q&A session here today. Before we start the Q&A session, I would please remind everybody to limit yourself to one question at a time to give a possibility for everyone to asking the questions. I will start by asking one question each to Johan and Carolina, and first to you, Johan. Organic growth was quite strong in the end of the year. Do you see this positive trend continuing into 2018?
You always destroy the question from the floor, but what we saw in Q4 was a good evolution. As I mentioned, a number of markets that have not been very strong in recent year have started to come back again, and we saw good basic demand in Europe and good order situation. We had a little bit weaker on Entrance Systems, but that was more timing than anything else because order situation was quite good. Altogether, I'm more optimistic than I usually am. It's not because I'm leaving, but it's because we saw good evolution in Q4. Yes, also January has started quite well. It's altogether a positive outlook, even though we don't give forecasts.
Thank you, Johan, and now to you, Carolina. How much was the impact from the U.S. tax reform for Assa Abloy, and what can we expect going forward from it?
Yeah, we move from top line to tax. Well, we had estimated the year, due to the country mix, to be on 26% tax rate, but we ended almost 27 as an underlying. With the U.S. tax reform, first, we have a one-off in Q4 in 2017, which brings the tax rate then down to 26 in 2017. If we look at what it seems like going forward now with the tax reform, it would be a roughly 1% improvement from the U.S. tax reform. If the underlying mix stays the same, which is almost 27, then we should end on 26% also for 2018.
Thank you, Carolina. Let's please start with a question from audience here in Stockholm.
Yes, thank you. Peder Frölén, Handelsbanken. On growth, you mentioned, Johan, the strong growth for electromechanical/digital. Maybe to shed some light on the actual number there. The follow-up would be, you usually say that you sell around 2 million digital locks broadly. What portion of that is in the U.S. today, and what type of growth did you actually see in the fourth quarter on that specific part? Thank you.
Smart door locks in the U.S., we used to have AT&T. Amazon came into the picture. Amazon had some starting up problems. We haven't seen much action from them. The part of the U.S.A. is still rather small as such. Of course, you have now August in the new year, which was only in for one month. We have Amazon, we have Google, and we have a few other customers starting up together with us. We expect to see good growth or strong growth this year. APAC is the biggest for smart door locks. China, Korea are converting at a high rate. Korea since long, China in recent time, and also South Asia is doing quite well on that part.
You have in Europe, the Scandinavian region doing quite well, especially Sweden, and also a number of markets then like the U.K. now also coming into life. Altogether, very positive evolution. The thing is, why does it take so much time? The thing is that you need to introduce locks that fits to the local markets. That takes some time. You need to teach the users that this is a really good feature for them. That will, of course, gradually go faster and faster. We see, for instance, as I mentioned in the Scandinavian market, we've seen in the Swedish market how when people start to learn and understand how good it is and how versatile it is to have such a thing on the door, that they really start to invest.
Of course, we are very helped also by forwarding companies like Amazon and others that now start to promote this locking feature because they need it in order to get into the house. It's still SEK 2 billion, which was the forecast we said, 2 million locks, but around SEK 2 billion. I think we can trust that in the next decade, it's going to come very strong.
Thank you.
Another question from the floor.
Anders from ABG. Just a question on acquisitions and acquisition prices. As you mentioned, you did spend a bit more than SEK 4 billion in the quarter. I think August must have been a meaningful part of that. Of course, that kind of acquisition to go deeper into technology, can you talk a little bit more about the prices for those kind of assets and whether or not you need to do that basically to keep ahead in the developed markets, both the U.S. and Europe?
Well, startup companies always are expensive because there's no profit to calculate on, it's always a horrendous price. On the other side, that's something you do in order to get this, in this case, complementary products that we didn't lack in the U.S. We have entry system in Europe, which is a clutch drive. We didn't have it in the U.S., August gave us that opportunity, and also gave us a number of outlets in the U.S. market for retail. That was an interesting acquisition. You're assuming that it was August that cost us so much money, it's not fully right, because we also bought Arjo and Mercury, and Mercury and Arjo were in fact the majority of that money. In our opinion, the prospects of growth is really worthwhile to invest in those three companies.
All three are technology, not leaders, but technology complementary to what we do, are very complementary to what we do. We don't disclose exactly what we paid for them.
Thank you. I think before we kick off the telephone conference, operator, will you please remind how to ask questions?
Thank you. If you have a question, please press 01 on your telephone keypad. If you wish to be removed from the queue, press 0 then 2. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, please press 01 on your telephone keypad if you have a question.
Right, please ask question.
Our first question comes from the line of Lars Brorson from Barclays. Please go ahead. Your line is open.
Hi. Good morning, Johan. This is your last, it must be some 50 quarterly calls or so. Well done. You've created a lot of shareholder value over that time. I had a couple of very quick questions I want to just throw at you. I think I heard you say China currently at 10% operating margins. I think we hit low single digits over the course of 2017 or mid 2017. That's a pretty solid improvement. Should we assume now that you're done with the heavy lifting here in terms of reorganization, management change, et cetera, and we can continue to see some improvement on the basis that the market remains stable or even grows a bit?
If I said that, I probably did not say the right thing. What I meant was APAC has an operating margin around 10%, so you probably misunderstood me, or I used the wrong wording. China is still on a very low level, but the rest of Asia-Pacific is doing quite well, and China is coming more and more to life. Therefore, I think we can expect us to see an improvement, but it's not so that China is at 10% today.
All right. Okay, understood. My mistake. Secondly, just on Entrance Systems, I heard you say order is good, but you didn't get them out in the quarter. Why not? What was the level of order growth that you saw specifically on the industrial door side of the business in Q4?
On the industrial door side, if I remember right, it was in the strong box, strong growth, that means that it is more than 5%. That is normally what we disclose. We have logistic doors in the U.S.A., which is part industrial, which was lower, but that has more to do with the timing of invoicing of various projects. Normally you get the rather large logistical projects coming in, and I can at least tell you that we have invoiced those in January, this was more a timing issue. It was quite cold in some parts of the U.S. as well in Q4, and even in January as well, but still we were able to invoice those things.
Just to be clear, your U.S. warehouse logistics business is about 10% of Entrance Systems, and even if it is that down double-digit or so, that is shaving 1% or so of growth. 3% organic is still, at least relative to my view, a little bit disappointing in the quarter. Again, I was wondering whether you could help us understand what sort of growth you are seeing in bookings or orders to give us a sense of what we might see as we enter 2018.
Logistic is, if you talk about the U.S. side of the business, not 10% of the business, it is rather small. Probably six, seven, eight, something like that. Anyhow, we don't want to go into all details, but I think you can trust us that it is quite good. The situation is good in all parts, including logistics, even though we have had a tremendous upsurge there, partly due to Amazon that is investing heavily into this field, and we are one of the main providers of those solutions. It is not coming regularly, it comes in chunks. The chunks have come, but it is not been invoiced. That is pretty much what I can say about it. I am not worried.
Thank you.
Please wait for the next question.
I'm sorry.
Our next question comes from the line of Andre Kukhnin from Credit Suisse. Please go ahead. To the line of Andre Kukhnin, can you please unmute your phone? Since we're not getting a response, I'm going to move to Andreas Willi from JP Morgan. Please go ahead. Your line is open.
Thank you. Good morning, Carolina. Good morning, Johan. I have a question on your 5% organic sales growth target that you've had for some time, but the economy largely kind of prevented you from reaching that. Given that we have now a pretty global synchronized recovery for the first time in many years, is the 5% what we should expect Assa Abloy to be able to deliver, or what could prevent that target from being reached in 2018, given that you have now some tailwind in the economy, no more big drags geographically, and good growth in the electromechanical side?
It certainly looks good. I must say, first quarter will not look fantastic in part because we have a short quarter in the sense that Easter changes quarter and goes into the Q2. First half year certainly looks good. I cannot stand here and say it's going to be 5%. We don't give forecasts. It looks better than the year that we have behind our back, at least the first half that we can oversee. It's a positive evolution, as I also mentioned, but I know I've been too long in this industry to stand here and say, because we only need orders every day to be able to invoice, to say that it's going to exceed 5% or be something like it. It looks certainly good, and last year, I think I said 2%-4%, and we came to 4%.
This year it's slightly better than 2%-4% as an outlook, but it isn't worth that much. The business globally is looking better than it did one year back.
Thank you very much. Go back in the queue.
Our next question comes from the line of Gael de-Bray from Deutsche Bank. Please go ahead.
Thanks very much. Good morning, everybody. My question is about China. With sales now kind of flat in Q4 and with the new management team in place for quite some time, I guess you probably have a better visibility on the sort of profitability you can generate in China and obviously in APAC overall in the midterm. Do you think it is achievable to get back to the 14%-type of margin you had a few years ago in the region, taking into account the current volume and pricing outlook in China and the productivity gains that are probably still to be achieved?
It would be easy for me to stand here and say yes, and then I leave. I think it's going to be a tough battle, but we know we have a recipe how to become more efficient. I'm sure that we will continue to improve our position relative to where we are right now. Whether or not we will reach 14%, I think long term, I'm convinced because the market is, just like in other places, in China, like in other places in APAC, is converting more and more into distribution in the sense that you have a recurring revenue. When that happens, you don't get orders anymore for 10,000 apartments, you get orders for one lock here, 10 locks there, 50 locks there, and then the margins have a tendency to move up quite a bit because no one has purchasing power.
I think we have to be patient with emerging markets like China, like Brazil, like a number of others, where most of the market is still consisting of new construction. The recurring markets that we have in Western world are the most beneficial to the company. I think it will take a few years before we really see a strong revival. Thinking about that we have 10% average, and that China is quite an important element of APAC, and not making much money at all, I think you can count on that many of our other parts of APAC is indeed making very high margins. We are doing quite well because there we haven't had this instability. It has continued to have a steady demand while China has fallen back. I'm convinced that China is a very good investment for the group long term.
I'm very bullish long term, and cautious short term.
Thank you, Gael. Please Operator to next question.
Our next question comes from the line of Lucie Carrier from Morgan Stanley. Please go ahead.
Good morning, Johan. Good morning, Carolina. Thanks for taking my question. I wanted to go back to Global Technologies, if I can. When you look at the pipeline, how confident are you that the momentum we saw in 2017, both I would say on the organic growth, but also the margin you delivered in the fourth quarter, how do you think this can continue into 2018? I'm just wondering if we could think of a margin above 20% could become the new normal in Global Technologies.
Wow. Well, with 9% growth, yes. With more moderate growth, it's a struggle. Tech companies are always very tough, it's very much project related as well, but it certainly looks good. Very solid demand picture. We have rationalized, and rationalized again. We are very efficient as a company, we sell more and more virtual things. I'm rather optimistic, but I will not stand here and say it's going to be a 20% or more. I'm optimistic that we can continue to see accretion of the margin in that part of the company.
Thank you.
Thank you, Lucie. Operator, please, next question.
Next question comes from the line of Andreas Koski from Nordea. Please go ahead.
Thank you. I have a question on your statement in the report, Johan, saying that you're confident that the majority of all private residences will be converted to smart door locks in the next decade. How large part of your residential sales are smart door today, and could you talk about the price difference between mechanical and smart door locks today, and how you think prices will evolve over this decade?
Well, it was very hard to hear what you said. I think you asked if we could actually tell.
Okay. Tell it again.
The mechanical contra the smart door locks. If you think about it, today, about 51% of what Assa Abloy sells turnover-wise is electronic content. That has grown from a rather small percent in 12 years' time to more than 50%. With electronics, we get a more recurring element, even though it's not that big on the residential, but the lifetime goes now dramatically on the door lock, and the price per unit goes up as well. If you only think, today we sell 2 million of those units in the world, and we sell probably some 50 million mechanical locks of similar kind ourselves, but the market is so much bigger because most of those are serviced by low-end type of locks.
If we must assume a piece of this, like Amazon say they're going to convert 38 million doors, only a piece of that would be very beneficial to the turnover of Assa Abloy. Each smart door lock that goes in replaces the mechanical lock, and that has meant that we have a cannibalization going on both on the non-res side and the residential side that makes the mechanical stable, perhaps growing 1%, 2%, not much more, while the electronic one is the one that takes off. This is a situation that we probably will continue for foreseeable future, and certainly if you have this replacement going on for smart door locks. When I say every door, if you think about your own home, you probably have some five, six cylinders in your home, while you perhaps only have one main door.
Most likely you have only one main door, and you're not going to put an electronic lock to every door opening. Therefore, I think it is realistic to think that smart door locks will be there to facilitate deliveries in your home environment, but it's not going to be all five. It's going to be one, or perhaps two in some houses. I have two in my houses. It's going to be a major boost to turnover if this happens, and I think it will happen because all forwarders are pushing now for till we see this happen. They would like to get into the private home and deliver, and I think the user also would like that. I think that answers your question.
Yeah, I apologize it was bad. I just asked the portion today of your residential sales, much of that is smart door locks?
It's SEK 2 billion out of the residential, that's about 20%-25%. There's a gray zone, very big gray zone between Multi-housing, is that residential, non-residential? What kind of category is it? It's not a clear-cut exactly, but between 20% and 25% of our SEK 76 billion is residential applications.
You put the SEK 2 billion in relation to that, you have the %.
Yeah.
Thank you.
Okay.
Please operate the next question.
I can follow up on this later. Thanks.
Our next question comes on the line from Markus Almerud from Kepler Cheuvreux. Please go ahead.
Hi, Markus Almerud. I'd like to continue on the smart lock side. Two new collaborations in the quarter with Google and then Walmart. Could you give us a little bit more details on that? The Google Nest, how many suppliers are they going to use, et cetera? Do they have any similar targets as Amazon had? And Walmart, is it similar to the Swedish ones you have, like Byggmax and et cetera? What kind is that, and do you have any initial feedback on Amazon Key?
Well, as I mentioned, Amazon Key, they had some startup problems, which they are addressing now, so they haven't really started running big volumes, but they have 38 million targeted customers, which are then eligible for home deliveries. You mentioned Walmart, yes, indeed, we have signed up also with them, even though they haven't, to my knowledge, started very much yet, but they will. When it comes to Nest, they have more than 50 million thermostats installed that they intend to promote them together with the smart door locks. How this will take off is difficult to tell. As I say, it depends a little bit how much they are investing behind themselves. Here clear is that they all have chosen to have our type of locking solutions, which are quite advanced as such, as their prime type of installation.
We are not the only one delivering, but we have the prime position in the sense that our locks are the most elaborate lock solutions that there are in the market.
Thank you, Markus. Going back to the audience here in Stockholm with the last question.
Thank you. Mattias Holmberg from DNB. During the presentation, I think you mentioned an additional cost savings program to be rolled out this year. I was just wondering if you would care to elaborate a bit on it.
Perhaps Carolina would like to?
On the new one? Yeah, it seems I have to do it. Well, no. What we are doing is that we are summing up lots of different and really good projects from the divisions. We will package all of that and go through it with the auditors, and by year-end 2018, that's the plan, we will then launch it. Judging from what we have bought and roughly where we are, it could probably be in the same size that the last one was, roughly of SEK 1.5 billion. That's the main plan so far.
Thank you.
Thank you, everyone. The clock is 11, I'm handing back to you, Johan, for some final conclusion.
Okay. Thank you very much. Thanks for all the confidence I've had. I'm very happy to stand here to say good growth in the quarter, good profit, good cash flow, and good prospect for the company. I thank you all for the 12 good years we had together, a little bit more than 12 years, and thank you for coming today as well. I'm going to follow Assa Abloy and continue to be a shareholder because I bought quite some shares, and I think it's a very good investment. Thank you very much for all your support during these years.