07.18.19
ASSA ABLOY reported its second quarter 2019 results, and noted that the company showed good growth and improved operating margin.
Second quarter 2019 net sales increased by 11% to SEK 23,544 million ($2.51 billion), with organic growth of 3% and acquired net growth of 4%. The company reported strong growth in Americas and Global Technologies, good growth in EMEA and Asia Pacific and growth in Entrance Systems. Three acquisitions signed with combined expected annual sales of about SEK 800 million ($85 million).
Operating income (EBIT) increased by 28% and amounted to SEK 3,733 million ($400 million), corresponding to an operating margin of 15.9%, up from 13.8% previously. Operating cash flow increased by 27% to SEK 3,636 million ($388 million).
“Following a good start to 2019, the positive performance continued during the second quarter,” said Nico Delvaux, president and CEO of ASSA ABLOY. “Total sales grew by 11% with an improved operating margin. Sales growth in the quarter was driven by organic growth of 3%, acquired net growth of 4% and positive currency movements of 4%. Growth was strong in Americas (6%) and Global Technologies (5%). Asia Pacific and EMEA reported good growth, while growth in Entrance Systems was stable.
“Operating income excluding non-comparable items in 2018 increased by 13% to SEK 3,733 million, driven by good operating leverage. This contributed to an operating margin improved by 20 basis points. The Group has now offset the previous headwind from the higher raw material costs,” he added. “Operating cash flow was very strong and improved by 27% to SEK 3,636 million, driven by the improved earnings and positive evolution from working capital.”
Delvaux noted that demand has generally been good in 2019, but with variations between different markets.
“In some markets, uncertainty has increased at the same time due to weaker construction indices and geopolitical challenges. To retain our leadership in the short and long term, it is important to be agile and to focus on our strategic objectives,” Delvaux added. “It is encouraging to see how cost efficiency in everything we do is driving results. We also continue to invest in product leadership through innovation as an enabler of sustainable profitable growth. Today, we have more than 2,600 people working in R&D and 9,000 patents across our product segments.”
Second quarter 2019 net sales increased by 11% to SEK 23,544 million ($2.51 billion), with organic growth of 3% and acquired net growth of 4%. The company reported strong growth in Americas and Global Technologies, good growth in EMEA and Asia Pacific and growth in Entrance Systems. Three acquisitions signed with combined expected annual sales of about SEK 800 million ($85 million).
Operating income (EBIT) increased by 28% and amounted to SEK 3,733 million ($400 million), corresponding to an operating margin of 15.9%, up from 13.8% previously. Operating cash flow increased by 27% to SEK 3,636 million ($388 million).
“Following a good start to 2019, the positive performance continued during the second quarter,” said Nico Delvaux, president and CEO of ASSA ABLOY. “Total sales grew by 11% with an improved operating margin. Sales growth in the quarter was driven by organic growth of 3%, acquired net growth of 4% and positive currency movements of 4%. Growth was strong in Americas (6%) and Global Technologies (5%). Asia Pacific and EMEA reported good growth, while growth in Entrance Systems was stable.
“Operating income excluding non-comparable items in 2018 increased by 13% to SEK 3,733 million, driven by good operating leverage. This contributed to an operating margin improved by 20 basis points. The Group has now offset the previous headwind from the higher raw material costs,” he added. “Operating cash flow was very strong and improved by 27% to SEK 3,636 million, driven by the improved earnings and positive evolution from working capital.”
Delvaux noted that demand has generally been good in 2019, but with variations between different markets.
“In some markets, uncertainty has increased at the same time due to weaker construction indices and geopolitical challenges. To retain our leadership in the short and long term, it is important to be agile and to focus on our strategic objectives,” Delvaux added. “It is encouraging to see how cost efficiency in everything we do is driving results. We also continue to invest in product leadership through innovation as an enabler of sustainable profitable growth. Today, we have more than 2,600 people working in R&D and 9,000 patents across our product segments.”
