ASSA ABLOY leverages digital shift to offset residential market decline

STOCKHOLM — Interest rates continue to batter the residential market in the U.S., but ASSA ABLOY is still on track for a strong year thanks to solid growth in its electromechanical business. 

The company reported a strong currency-adjusted growth of 12% year to date for the electromechanical business, with President and CEO Nico Delvaux telling investors the business is transforming the company – and the industry. 

“We continue to see that shift from mechanical to electromechanical and digital,” he said. “That obviously also gives us the opportunity to get more recurring revenue. Our recurring revenue remains our strongest growth product or service offering and today is close to 6% of top line, continuing also in growing in relative weight.” 

The acceleration of electromechanical business began during the COVID-19 pandemic, which Delvaux said drove customers to look for solutions that allowed them to do much more from an operations, efficiency and management perspective. 

Even so, in its report for the third quarter of 2025, ASSA ABLOY stressed that the mechanical business remains central to the company's success, as most electromechanical solutions are built on mechanical platforms. 

In addition to growth in the electromechanical business, Delvaux attributed ASSA ABLOY’s success in the quarter to strong, high single-digit sales growth for the North America non-residential business, which was offset by single-digit negative growth for North American residential business. When asked by investors whether he sees any signs of improvement in the company’s pipeline or specification, the CEO said, while there are some positive indicators, the long-term view is still unclear. 

“We don't see really a strong pickup on the residential side yet,” he said. “Internally, as a matter of fact, we don't have too much long-term indicators because when you refer to spec business, we don't spec on the residential side.” 

By the numbers: 

• Net sales totaled SEK 38,146 M (37,418), with organic growth of 3% (0) and acquired net growth of 5% (4). Exchange rates affected sales by –6%(–3). 

• Organic sales growth was good in EMEIA, Entrance Systems, Global Technologies and Americas, while organic sales declined in Asia Pacific. 

• Five acquisitions with combined annual sales of about SEK 500 M were completed in the quarter. 

• Operating income (EBITA) increased by 3% to SEK 6,815 M (6,609) with an operating margin of 17.9% (17.7). 

• Operating income (EBIT) increased by 3% to SEK 6,416 M (6,255), with an operating margin of 16.8% (16.7). 

• Net income amounted to SEK 4,144 M (4,033). 

• Earnings per share amounted to SEK 3.73 (3.63). 

• Operating cash flow amounted to SEK 6,969 M (6,341)