ASSA ABLOY: Good Performance in a Weak Market

ASSA ABLOY announced that its sales increased by 4% in the fourth quarter, with 0% organic growth, and totaled SEK 12,239 million.

In particular, the compnay enjoyed good growth in Americas and improved performance in Australia and New Zealand. Markets in EMEA and Asia and Global Technologies were stable, while Entrance Systems was affected negatively by the weak trend in southern Europe. The acquisition of the U.S. company 4Front was completed. Its annual sales are expected to total SEK 1,100 M, representing 2% growth.

Operating income (EBIT) amounted to SEK 2,030 million, which represents an increase of 8%. The operating margin was 16.6%.

For the full year, sales increased by 12%, including 2% organic growth, and totaled SEK 46,619 million. Operating income (EBIT) amounted to SEK 7,501 million, representing an increase of 13%. The operating margin was 16.1%.

“The fourth quarter showed a satisfactory increase in sales and strong earnings,” said Johan Molin, president and CEO. “The weakening of the global economy continued, which resulted in zero organic growth, but at the same time acquired sales revenue added 7% growth. Operating income increased by a full 8%, which was a consequence of increased efficiency in acquired units, reduced raw-material costs and good savings from the restructuring programs we have carried out.

“Sales of new products were stronger than ever before and accounted for 25% of total sales revenue in the fourth quarter. A number of innovative new products in both the mechanical and electromechanical sectors were launched during the year. Particularly successful were the new series of door-closers in Europe, the new generation of digital door-locks, HID’s SE readers, RFID locks for hotels, and the new Aperio and Cliq Remote electronic lock systems.

“The full-year operating income for 2012 improved by a full 13%, with strong contributions coming from efficiency improvements and the continuing relocation of production to low-cost countries. Operating cash flow also remained very strong as a result of increased profit and improved effectiveness in managing our working capital.

“Activity in the acquisition field continued at a high level in 2012. A total of 13 acquisitions were completed, whose combined annual sales of SEK 4,500 M represent 11% growth. The expansion of Entrance Systems continued during the year with the strategic acquisitions of Albany, Dynaco and 4Front. The first two of these gave us world leadership in the fast-growing segment of high-speed industrial doors, while 4Front gave us market leadership for docking stations in North America.

“Many indicators suggest that the world economy will remain weak for the foreseeable future, due primarily to the budget cutbacks that many countries are making. It is therefore of the utmost importance that ASSA ABLOY continues its expansion on the new markets, which are expected to go on growing well, while at the same time maintaining its investments in new products and market presence.”