ASSA ABLOY sees signs of turnaround in residential market

STOCKHOLM — The worst may be over for the residential market, said ASSA ABLOY CEO Nico Delvaux during a recent earnings call. 

“We definitely believe that the residential market has bottomed out and that, from here, we will start to see some recovery,” CEO Nico Delvaux told investors, pointing to early signs of improvement in select markets. 

The company’s fourth quarter and full-year results were strong overall, but familiar trends persisted: continued momentum in the commercial segment across major markets, offset by ongoing weakness in residential, particularly in the United States, where high interest rates and economic uncertainty continue to weigh on demand. 

Two markets, however, are beginning to show signs of recovery. Sweden and New Zealand, both of which began cutting interest rates earlier than other regions, posted improvements in residential activity. 

“In New Zealand, we see a good recovery both in new build and in R&R (remove and replace),” Delvaux said. “In Sweden, we see that recovery mainly on the R&R side, not on the new-build side. Those are the two markets that started cutting interest rates first.” 

By contrast, recovery in other regions may take longer. Delvaux said Europe (particularly countries tied to the European Central Bank), and the United States have yet to see similar improvement. In the U.S., mortgage rates remain around 6%, while roughly 72% of mortgage holders have rates below 5%, limiting mobility and new construction activity. 

Still, Delvaux highlighted a structural factor that could eventually drive stronger replacement demand in the U.S.: more than 55% of homes are now more than 40 years old. While elevated rates make a near-term rebound unlikely, he said the aging housing stock should support increased R&R activity over time, reinforcing the company’s view that the market has reached its floor. 

By the numbers 

• Net sales totaled SEK 38,307 M (39,575), with organic growth of 4% (0) and acquired net growth of 3%. Exchange rates affected sales by –10%. 
• Organic sales growth was strong in Global Technologies and Americas. EMEIA and Entrance Systems had good organic sales growth while organic sales declined in Asia Pacific. 
• Seven acquisitions with combined annual sales of about SEK 1,200 M were completed in the quarter (23 for the year). 
• Operating income (EBITA) totaled SEK 6,869 M (6,898) with an operating margin of 17.9% (17.4). 
• Operating income (EBIT) decreased by 1% to SEK 6,448 M (6,529), with an operating margin of 16.8% (16.5). 
• Net income amounted to SEK 4,281 M (4,214). 
• Earnings per share amounted to SEK 3.85 (3.81). 
• Operating cash flow amounted to SEK 7,815 M (8,010). 
• The board of directors proposes a dividend of SEK 6.40 (5.90) per share for 2025, to be distributed in two equal installments.