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ASSA ABLOY :Quarterly Report Q3 2022

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ASSA ABLOY reported a strong performance in Q3 2022, achieving net sales of SEK 31,820 M, a 33% increase from SEK 23,930 M in Q3 2021. Organic growth reached 14%, despite a 16% negative impact from exchange rates. Operating income (EBIT) rose by 47% to SEK 4,973 M, with an operating margin of 15.6%. Net income was SEK 3,552 M, up 48% year-over-year. Six acquisitions were signed, contributing to future growth. However, the U.S. Department of Justice plans to block its acquisition of Spectrum Brands' HHI division, which will be contested in court.

Positive
  • Net sales increased by 33% to SEK 31,820 M.
  • Organic growth reached 14%, complemented by 3% from acquisitions.
  • EBIT increased by 47% to SEK 4,973 M with a margin of 15.6%.
  • Net income rose by 48% to SEK 3,552 M.
  • Operating cash flow improved by 25% to SEK 4,520 M.
  • Completed six acquisitions during the quarter.
Negative
  • U.S. DoJ seeks to block acquisition of Spectrum Brands' HHI division.

STOCKHOLM, Oct. 26, 2022 /PRNewswire/ -- Very strong performance in the quarter Third quarter

  • Net sales increased by 33% to SEK 31,820 M (23,930), with organic growth of 14% (7) and acquired net growth of 3% (2). Exchange-rates affected sales by 16 (–1).
  • Very strong organic growth in Entrance Systems, Global Technologies and Americas, good growth in EMEIA, but organic sales declined in Asia Pacific.
  • Six acquisitions with combined annual sales of about SEK 1,000 M were signed in the quarter.
  • The US regulator will seek to block ASSA ABLOY's proposed acquisition of the HHI division of Spectrum Brands. ASSA ABLOY and Spectrum Brands will contest in court this effort to oppose the transaction.
  • Operating income (EBIT) increased by 47% and amounted to SEK 4,973 M (3,392), with an operating margin of 15.6% (14.2). Excluding an operating loss of SEK 196 M for the CERTEGO divestment, the operating margin last year was 15.0%.
  • Net income amounted to SEK 3,552 M (2,392).
  • Earnings per share amounted to SEK 3.20 (2.15).
  • Operating cash flow amounted to SEK 4,520 M (3,619).

Sales and income


Third quarter




January-September



2021

2022


Δ


2021

2022

Δ    

Sales, SEK M

23,930

31,820


33 %


69,384

87,878

27 %

Of which:









Organic growth

1,576

3,741


14 %


6,661

10,351

14 %

Acquisitions and divestments

490

857


3 %


2,211

790

1 %

Exchange-rate effects

–361

3,292


16 %


–3,839

7,353

12 %

Operating income (EBIT), SEK M

3,392

4,973


47 %


10,168

13,380

32 %

Operating margin (EBITA), %

14.8 %

16.2 %




15.3 %

15.8 %


Operating margin (EBIT), %

14.2 %

15.6 %




14.7 %

15.2 %


Income before tax, SEK M

3,233

4,736


47 %


9,719

12,756

31 %

Net income, SEK M

,392

3,552


48 %


7,858

9,567

22 %

Operating cash flow, SEK M

3,619

4,520


25 %


9,881

9,219

7%

Earnings per share, SEK

2.15

3.20


48 %


7.07

8.61

22 %

 

Comments by the President and CEO

Very strong performance in the quarter

Following a very strong sales development during the first half of 2022, the momentum continued during the third quarter with double-digit organic sales growth in most of our markets.

Our organic sales grew by 14%, complemented with 16% positive currency effects and 3% growth from M&A. Entrance Systems and Americas delivered very strong sales growth of 20% and 17% respectively, driven predominantly by a continued strong US market and price realization. Despite continued component shortages, Global Technologies achieved a very strong organic growth of 19% due to our launch of redesigned products and our continued recovery in the travel-related segments. EMEIA reported good organic growth of 4%, driven by very strong demand in Scandinavia and in most emerging markets. Although demand has improved in Southeast Asia and remained very strong in Pacific, organic sales in Asia Pacific were down by 2% as demand in China continued to be very weak.

Excluding an operating loss from divestments in 2021, our EBIT increased by 39% to SEK 4,973 M and the margin improved to 15.6% (15.0), driven by lower material headwind, continued operational efficiencies as well as a significant margin improvement in Global Technologies. Our operating cash flow in the quarter continued to improve, up 25% to SEK 4,520 M.

Delivering on our strategic activities

To accelerate our profitable growth, we are working with a number of strategic activities. One key activity is actively upgrading our installed base from mechanical to electromechanical solutions. We are leading this transition and are investing in new platforms and partner collaborations that, over time, will further strengthen our position in the industry. Our innovation efforts are paying off, and for the fourth consecutive quarter our sales of electromechanical products and solutions grew organically at double-digit rates and were up 16% in the quarter. This transition will also further improve the resilience of our business through more recurring sales and service, both of which achieved double-digit growth in the quarter.

We are continuing to execute our acquisition strategy, with six further acquisitions signed during the quarter, bringing the number of acquisitions closed this year to eleven by the end of September. In September, the U.S. Department of Justice (DoJ) announced that it will seek to block our proposed acquisition of the HHI division of Spectrum Brands. We strongly disagree with the DoJ's characterization of the acquisition and will vigorously contest in court this effort to oppose the transaction.

While growth-generating activities create value, focus on costs is critical. The demand remains strong in most markets, but due to weaker demand in some European markets in the quarter (mainly the UK, France and Benelux), some local organizations have initiated cost-reduction actions to protect their profitability. We have a strong track record of being agile, and we will continue to act in response to possible changes in market conditions.

Lastly, I would like to note that we will host our Capital Markets Day on 16 November 2022 in London, where we will provide an update on our strategy and will display exciting new products and solutions such as mobile credentials and connected doors.

Stockholm, 26 October 2022

Nico Delvaux

President and CEO

Further information can be obtained from:

Nico Delvaux,

President and CEO, tel. no: +46 8 506 485 82

Erik Pieder,

Executive Vice President and CFO, tel.no: +46 8 506 485 72

Björn Tibell,

Head of Investor Relations, tel. no: +46 70 275 67 68,

e-mail: bjorn.tibell@assaabloy.com

ASSA ABLOY is holding a telephone and web conference

at 09.30 on 26 October 2022

which can be followed online at www.assaabloy.com.

It is possible to submit questions by telephone on:

08–505 583 59, +44 333 300 9265 or +1 631 913 1422

This information is information that ASSA ABLOY AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CEST on 26 October 2022.

The following files are available for download:

https://mb.cision.com/Main/7333/3654866/1643538.pdf

The full report (PDF)

Cision View original content:https://www.prnewswire.com/news-releases/assa-abloy-quarterly-report-q3-2022-301659496.html

SOURCE ASSA ABLOY

FAQ

What were ASSA ABLOY's sales figures for Q3 2022?

ASSA ABLOY reported net sales of SEK 31,820 M for Q3 2022, a 33% increase year-over-year.

How did ASSA ABLOY's earnings per share change in Q3 2022?

Earnings per share increased to SEK 3.20 in Q3 2022, up from SEK 2.15 in the same quarter last year.

What is the impact of the U.S. DoJ's decision on ASSA ABLOY's acquisition plans?

The U.S. DoJ's plan to block ASSA ABLOY's acquisition of Spectrum Brands' HHI division is being contested in court.

What was the organic growth rate for ASSA ABLOY in Q3 2022?

ASSA ABLOY achieved an organic growth rate of 14% in Q3 2022.

How much did ASSA ABLOY's operating income increase in Q3 2022?

Operating income (EBIT) for Q3 2022 increased by 47% to SEK 4,973 M.

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