ASSA ABLOY Reports Continued Strong Development in 3Q 2014

ASSA ABLOY reported a strong third quarter of 2014, with Sales increased by 21%, with 4% organic growth, and totaled SEK 14,727 million ($2.03 billion). The company reported growth in Americas and Entrance Systems, and good growth in EMEA and Asia Pacific. In addition, ASSA ABLOY reported growth in Global Technologies.

Operating income (EBIT) rose by 20% and totaled SEK 2,499 million ($345 million). The operating margin was 17.0%, down from 17.2% in 2013’s third quarter. Net income amounted to SEK 1,749 million ($241 million).

A contract has been signed for the acquisition of Jiawei (China), which has expected sales in 2015 of about SEK 500 M ($69 million). In October, ENOX (India) and Turvaykköset (Finland) were acquired.

“The third quarter and the first nine months of the year continued to show a very good development for ASSA ABLOY. The first nine months sales increased a full 16% and a very satisfying improvement of 15% in operating income,” said Johan Molin, president and CEO.

“In the third quarter, organic growth returned to 4%, driven by a globally stable demand situation. The Americas and Entrance Systems divisions showed strong growth, driven by an improved demand situation in the USA, while EMEA and Asia Pacific showed good growth. Global Technologies had a stable development. The weakening of demand on the emerging markets in Asia, Africa and South America continued during the quarter. In spite of this, ASSA ABLOY showed continued good growth as a result of constant investments in increased market presence,” Molin noted.

“During the quarter, a further three acquisitions were made which add SEK 700 M in annual sales,” Molin added. “The expansion of our presence in China continued with the strategic acquisition of Jiawei. Jiawei complements in a significant way our presence in the important lock segment in China.

“Operating income continued to improve, by a strong 20% for the quarter. In the quarter we achieved good savings and efficiency improvements, a strong profit contribution from the acquired companies and exchange-rate gains. Sales of new products continued to improve and reached a level of 29% of sales in the quarter. Especially pleasing was that electromechanical locks for the commercial sector and digital door-locks for the residential sector increased strongly,” Molin reported.

“My judgment is that the global economic trend is moving sideways, with America showing a positive trend while Europe and the emerging markets are stable on a low level,” Molin concluded. “Our strategy of expansion on the emerging markets remains unchanged, since in the long term they are expected to show very good economic growth. We are also continuing our investments in new products, especially in the growth area of electromechanics.”