ASSA ABLOY navigates U.S. economic climate

STOCKHOLM — ASSA ABLOY plans to increase prices between 1% and 2% this year in the face of an uncertain economic climate in the U.S., company officials said during a recent webcast. 

During the Q&A portion of the webcast, ASSA ABLOY President and CEO Nico Delvaux said, with the threat of tariffs altering the global economic landscape in a chaotic and shifting manner almost daily, it was difficult to provide guidance but that price increases would be part of mitigations, among other measures.  

“The answer I can give you is only as the answer is today as the tariffs stand,” he said during the webcast to discuss first quarter financial results. 

While Delvaux believes tariffs will be lowered in time, he noted ASSA ABLOY is still exploring other manufacturing options to increase redundancy. 

Decentralized setup 

Delvaux also highlighted during the webcast ASSA ABLOY’s “decentralized organization” as a mitigation for the impact of tariffs and other uncertain economic and political conditions. 

“Having our decentralized organization where we can anticipate changes to the local teams and empower those local teams has proven to be a good setup, and we are confident that setup will help us to navigate the market conditions that we experience today,” he said. 

As proof the company’s Global Technologies saw organic sales growth of 8%, supported by strong growth in HID and Global Solutions, officials said. Notably, the company also saw good results from its non-residential segment in North America and Latin America. EMEIA’s organic sales were flat, however, and Asia Pacific sales declined by 5%, owing to demand in the residential market in China. 

Active in M&A  

ASSA ABLOY completed six acquisitions with combined annual sales of about SEK 3,600 M in the quarter. One of which, InVue, Delvaux highlighted in the webcast.  

“InVue, a U.S.-based provider of precision engineered connected asset protection and access control solutions, is really adding complimentary products and solutions to our core business,” he said. “A very nice new vertical in global solutions. I’m quite excited about this acquisition.” 

Highlights from the quarter: 

● Net sales increased by 8% to SEK 37,940 M (35,200), with organic growth of 2% (–2) and acquired net growth of 5% (11). Exchange rates affected sales by 1% (0). 

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

● A new Manufacturing Footprint Program was launched during the quarter. The expected restructuring cost for the new program is SEK 1,332 M, with a pay-back time, including capital expenditure, of less than two years. 

● Operating income1 (EBITA) increased by 5% to SEK 6,051 M (5,740) with an operating margin of 15.9% (16.3).  

● Operating income1 (EBIT) increased by 4% and amounted to SEK 5,645 M (5,427), with an operating margin of 14.9% (15.4).  

● Net income1 amounted to SEK 3,551 M (3,462).  

● Earnings per share1 amounted to SEK 3.20 (3.12).  

● Operating cash flow amounted to SEK 2,424 M (3,096).