ASSA ABLOY Reports Strong Increase in Sales and Earnings in 2Q 2014

ASSA ABLOY reported its results for the 2Q 2014. Sales for the quarter increased by 14%, with 2% organic growth, and totaled SEK 13,964 million ($2.038 billion). The company enjoyed strong growth in Asia-Pacific and good growth in EMEA, Entrance Systems and Americas, but suffered negative growth in Global Technologies because of lower project orders.

Operating income (EBIT) for the quarter rose by 13% and totaled SEK 2,219 million ($324 million). The operating margin was 15.9%. Net income for the quarter amounted to SEK 1,534 million ($224 million). Cash flow for the quarter increased by 24% and amounted to SEK 1,963 million ($286 million).

“The second quarter and the first six months of the year continued to show a very good performance for ASSA ABLOY, with a total increase in sales of 14% and a very satisfying improvement of a full 12% in operating income,” said Johan Molin, president and CEO.

“At 2%, organic growth during the second quarter was a little lower than in the beginning of the year,” Molin added. “However, the quarter had one fewer working day than the previous year as well as weaker project sales for Global Technologies. The EMEA, Americas and Entrance Systems divisions grew by a satisfactory 3%, while the emerging markets, for example in Asia, Africa and South America, continued to grow strongly.

“Acquisition activity continued to run at a high level, with six new acquisitions which add a further SEK 700 M to annual sales,” he noted. “It was especially pleasing that we were successful in acquiring the Indian company ENOX. This is our first major step in meeting the Group’s ambition to build a market-leading position on the fast-growing Indian market.

“Operating income continued to improve, by a full 13% during the quarter,” Molin reported. “As well as valuable savings and efficiency gains from the restructuring programs, the acquired companies also contributed strongly to the improvement in income. Ameristar in particular has produced very good results, but Amarr and 4Front also contributed significantly. Continued strong growth came from our many new products. Sales of electromechanical lock solutions increased by over 10% in both Americas and EMEA. Home automation is another exciting development area where many leading companies have chosen ASSA ABLOY’s advanced digital door locks.

“My judgment of the global economic trend is unchanged,” Molin concluded. “The world economy is about to improve slowly. Our strategy therefore remains unchanged, to reduce our dependence on mature markets and to expand strongly in the emerging markets, which are expected to go on growing well. Another continuing priority is investments in new products, especially in the growth area of electromechanics.”