ASSA ABLOY Reports Q4 2022 Results

ASSA ABLOY reported its Q4 2022 results. Net sales increased by 28% to a record total of SEK 32,915 million ($3.12 billion), with organic growth of 9% and acquired net growth of 5%. Exchange-rates affected sales by 14%. The company noted very strong organic sales growth in Global Technologies, Americas and Entrance Systems, good growth in EMEIA, but a decline in organic sales in Asia Pacific.

In addition, eight acquisitions with combined annual sales of about SEK 1,500 million ($142 million) were signed in the quarter. ASSA ABLOY has entered into agreements for the sale of Emtek and the Smart Residential business in the U.S. and Canada for a sales price of USD 800 million ($76 million), conditional on the successful closing of the HHI transaction.

Operating income (EBIT) increased by 28% and amounted to a record SEK 5,152 million, with an operating margin of 15.7%. Operating cash flow amounted to a record SEK 6,588 million ($489 million), from SEK 3,384 million.

I am proud and happy that in 2022 we delivered a very strong organic sales growth of 12% and an operating margin of 15.3%, despite a challenging operational environment with unprecedented supply-chain issues, high inflationary pressure and COVID-19-related disruptions,” said CEO Nico Delvaux. “In the fourth quarter of 2022 our organic sales grew 9%, complemented by positive currency effects of 14% and by 5% growth from M&A.

“Global Technologies delivered very strong sales growth of 24% since we were able to significantly reduce the order backlog in Physical Access Control and saw a good recovery in travel-related areas,” Delvaux added. “Americas division also delivered very strong sales growth of 11%, driven by a continued very strong demand in the US non-residential market and good price realization. The growth in Entrance Systems was also very strong at 10% and mainly driven by the US market. EMEIA reported good organic growth of 2%. Sales in Asia Pacific division declined by 10%, mainly due to COVID-19 and a very weak construction market in China, while the performance in the other part of the division was also weaker.”

“The operating profit increased by 28% to a record SEK 5,152 million and the corresponding margin was 15.7%. The operating leverage was strong at 22%, affected positively by lower material headwind and continued operational efficiencies. We can look back at a very strong year from an M&A perspective, having completed 21 acquisitions with annual sales of more than SEK 7 billion. These will have a carry-over sales effect into 2023 of 3% and our acquisition pipeline also remains strong.

“The HHI acquisition process continues and in December we announced the potential sale to Fortune Brands of Emtek and the Smart Residential business in the U.S. and Canada, conditional on the closing of the HHI transaction. We are confident that we have now eliminated all competitive concerns alleged by the US Department of Justice.”