Assa Abloy Reports ‘Very Strong Start’ to 2023 Amid Court Dealings

April 26th, 2023 by Travis Rains

Assa Abloy’s acquisitions during the first fiscal quarter of 2023 and organic sales growth of 8% are among the factors prompting president and CEO Nico Delvaux to suggest the company has seen a “very strong start to 2023.” The positive report comes amid a challenging week, as the company faces a bench trial, seeking to defend an agreement to acquire the HHI division of Spectrum Brands.

The company released its quarterly report on Wednesday, April 26, in which it reported a 22% increase in net sales to approximately $3.1 billion. The company experienced organic growth at 8% and acquired net growth of 5%. Assa Abloy attributes its organic growth to “very strong” global technology sales in the Americas, along with “strong” performances in Asia Pacific. Overall, global technologies rose 24% for the first quarter of 2023.

Sales in the Americas grew by 11%, which the company says was driven by “very strong” demand in U.S. non-residential segments, and “good growth” in U.S. residential segments and Latin America. Overall, sales for the quarter in the Americas totaled nearly $762 million. Asia Pacific delivered growth at 6%, and Entrance Systems at 3%.

The company made three acquisitions in the first quarter of 2023, and a fourth, the acquisition of Mottura, is expected to close during the second quarter of the year. Mottura is an Italian manufacturer of high-security residential armored lock cases and security cylinders. Those four acquisitions have combined annual sales of nearly $43 million, the company reported.

“It is estimated that completed acquisitions and divestments, on a rolling 12-month basis at March 31, 2023, will have an effect of 4–5% on sales in the second quarter of 2023 versus the same period last year,” the company wrote, adding that the effect on operating margin is estimated to be dilutive in the second quarter of 2023.

In its report the company also addressed litigation brought by the United States Department of Justice with respect to Assa Abloy’s attempt to acquire the Hardware and Home Improvement (HHI) division of Spectrum Brands. Assa Abloy expects a decision in the case, following a bench trial that began Monday, April 24, to arrive in the second quarter of 2023.

“The macroeconomic environment remains uncertain with some key performance Indicators indicating a slowdown,” Delvaux says. “Although we continue to report strong results, we are prepared and have the agility to mitigate further changes in the demand and if necessary we are ready to implement additional cost reductions, to protect our profitability and cash flow.”

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