ASSA ABLOY Reports Good Start to 2019

ASSA ABLOY reported its first quarter 2019 results. Net sales increased by 16% to SEK 21,505 million ($2,261.53 million), with organic growth of 5% and acquired net growth of 3%. The company reported strong growth in Americas, Global Technologies and Asia Pacific, and good growth in Entrance Systems and EMEA.
 
ASSA ABLOY signed an agreement to acquire a 54% holding in agta record, a Swiss manufacturer of automatic pedestrian doors with sales of SEK 3.9 billion ($410 million) in 2018. Closing is conditional upon authorities approval.
 
Operating income (EBIT) increased by 15% and amounted to SEK 3,246 million ($340 million), corresponding to an operating margin of 15.1%.
 
“We had a good start to 2019 with the first quarter’s sales growing by 16% to SEK 21,505 million,” said Nico Delvaux, ASSA ABLOY’s president and CEO. “This resulted from strong organic growth of 5%, acquired net growth of 3%, and positive currency effects of 8%. All divisions reported organic growth. Growth continued to be particularly strong in the Americas and Global Technologies divisions. Entrance Systems and EMEA reported good growth while Asia Pacific’s external growth was flat. Sales growth for electromechanical products remains particularly strong and now represents 31% of total sales.
 
“Operating income increased by 15% to SEK 3,246 million, driven primarily by good operating leverage in Americas and Global Technologies,” Delvaux added. “This was partly offset by weaker performance in Asia Pacific due to flat external growth, increasing low-margin intra-group sales and build-up of the new Chinese organization. One of ASSA ABLOY’s strategic objectives is product leadership through innovation. To maintain our leading position, more than 2,000 engineers are dedicated to continuously developing new solutions for our customers, and this is reflected in that close to 4% of our sales were invested in R&D in the quarter.”