Assa Abloy Q1 Sales Down, Organic Growth Up
Assa Abloy reports net sales decreased by 2 per cent to SEK 21,805 M (22,173), with good organic growth of 4 per cent (–3) and acquired net growth of 4 per cent (3). Currency effects amounted to –10 per cent (3).
Strong organic sales growth was reported by Asia Pacific, Entrance Systems and EMEIA. Organic sales development was stable in Americas, while the Global Technologies business reported a sales decline.
During the period 3 acquisitions with combined annual sales of about SEK 200 million were signed, operating income (EBIT) increased by 16% and amounted to SEK 3,187 M (2,751), corresponding to an operating margin of 14.6 per cent (12.4), net income amounted to SEK 2,253 M (1,864) and operating cash flow increased by 118 per cent to SEK 2,636 M (1,206).
“The world continued to be affected by Covid-19 restrictions in the first quarter, and in that context, I am very pleased that we can report good organic growth in the quarter,” said Nico Delvaux, ASSA ABLOY president and CEO.
“Asia Pacific division has been recovering from the trough of last year, resulting in a very strong organic sales growth of 23 per cent. Entrance Systems has accelerated and reported a very strong organic sales growth of 11 per cent. Organic sales growth in EMEIA was strong at 5 per cent and Americas was stable despite a strong comparable, but sales in Global Technologies were down significantly.
“With the world now expected to gradually reopen, we will start to shift our focus more to growth again with innovation as an enabler. Our investments in R&D have resulted in the recent launch of several new products and solutions, including a new door-operator range with smart mobile functions from Entrance Systems, and Incedo, a cloud-based access control platform for commercial applications.
“In parallel, our cost-saving measures are continuing with temporary savings now being replaced by permanent savings,” Delvaux said. “Our ongoing restructuring programs and other efficiency measures have supported our very strong operating leverage. As volumes start to increase, we will gradually ramp up capacity and make the investments needed to support the growth.
“Entrance Systems, our biggest division, has developed very well and the division’s new organization is making progress, with all segments reporting strong sales growth. The investments in growth and product development in the EMEIA division have generated strong growth despite the continued negative effect of Covid-19 restrictions.
“In the Americas division we have seen a continued strong growth in South America. In the US we are starting to see positive signs from eased restrictions and, next to a strong residential demand, we expect our aftermarket in the non-residential segment to gradually normalize from current low levels. The market conditions for parts of Global Technologies division continue to be very challenging and we do not expect the travel-exposed segments to return to pre-pandemic volumes in the near future.
“I am confident that we are now moving out of this pandemic as an even stronger group, well positioned as a global industry leader to bounce forward and re-accelerate profitable growth.”