Quarterly Report Q2 2022
Strong growth and profit in turbulent times
Second quarter
- Net sales increased by 25% to SEK 29,466 M (23,648), with organic growth of 13% (23) and acquired net growth of 0% (5).
- Very strong organic growth in Americas and Entrance Systems and strong growth in EMEIA and Global Technologies, but organic sales declined in Asia Pacific.
- Three acquisitions with combined annual sales of about SEK 1,100 M were signed in the quarter.
- Operating income (EBIT) increased by 23% and amounted to SEK 4,406 M (3,589), corresponding to an operating margin of 15.0% (15.2).
- Net income amounted to SEK 3,156 M (3,212).
- Earnings per share amounted to SEK 2.84 (2.89).
- Operating cash flow amounted to SEK 3,787 M (3,627).
Sales and income
| Second quarter | First half-year | |||||||
| 2021 | 2022 | Δ | 2021 | 2022 | Δ | |||
| Sales, SEK M | 23,648 | 29,466 | 25% | 45,454 | 56,057 | 23% | ||
| Of which: | ||||||||
| Organic growth | 4,258 | 3,324 | 13% | 5,085 | 6,610 | 14% | ||
| Acquisitions and divestments | 856 | –16 | 0% | 1,721 | –68 | 0% | ||
| Exchange-rate effects | –1,418 | 2,510 | 12% | –3,478 | 4,061 | 9% | ||
| Operating income (EBIT), SEK M | 3,589 | 4,406 | 23% | 6,776 | 8,407 | 24% | ||
| Operating margin (EBITA), % | 15.8% | 15.5% | 15.6% | 15.5% | ||||
| Operating margin (EBIT), % | 15.2% | 15.0% | 14.9% | 15.0% | ||||
| Income before tax, SEK M | 3,441 | 4,208 | 22% | 6,486 | 8,019 | 24% | ||
| Net income, SEK M | 3,212 | 3,156 | –2% | 5,465 | 6,015 | 10% | ||
| Operating cash flow, SEK M | 3,627 | 3,787 | 4% | 6,262 | 4,699 | –25% | ||
| Earnings per share, SEK | 2.89 | 2.84 | –2% | 4.92 | 5.41 | 10% | ||
1 Adjusted for positive one-time tax effects from last year, the increase in earnings per share was 24% compared with last year.
Comments by the President and CEO
Strong growth and profit in turbulent times
Today we announce very strong sales growth and an improved operating result. This positive development is driven by continued strong demand for our products and solutions despite a turbulent operating environment with geopolitical uncertainties, lockdowns in China, high inflation and rising interest rates. I am proud of how our employees have applied a customer-centric focus to address supply-chain issues and other operational challenges.
Our organic sales grew by 13%, complemented by 12% positive currency effects, and with zero growth from M&A. Americas and Entrance Systems delivered very strong organic sales growth of 20% and 19% respectively. This was driven by a continued high demand in the US, strong price realization and excellent operational performance. EMEIA reports strong organic growth of 8%, primarily driven by very strong growth in Scandinavia and the emerging markets. Despite component shortages, Global Technologies grew strongly by 6%, also helped by very strong growth in the new verticals in Global Solutions. Organic sales declined by 5% in Asia Pacific as demand in China continued to be very weak.
Our operating income increased by 23% to SEK 4,406 M and the operating margin was 15.0% (15.2). Our operating cash flow in the quarter improved by 4% to SEK 3,787 M. This corresponds to a cash conversion of 90%.
While demand remains positive, we stay alert
While we are continuing to see good demand for our products and solutions, it is crucial in turbulent and uncertain times that we remain vigilant and alert to potential signs of changes in the demand. During both the global financial crisis in 2008/09 and the pandemic we have proven that our decentralized operational model is flexible and that we have an agile cost-base. All our divisions have plans and tools in place to address potential changes in the demand and are well positioned to navigate through these uncertain times.
We continue to work on our growth-promoting and profitability improvement initiatives. Investment in product development is vital for staying relevant to our customers. Our focus on electromechanical product and solution development is paying off with a growth of 18% in this product segment in our regional divisions during the quarter.
In parallel, we continue to acquire businesses and we have during the year consolidated seven businesses with annual sales of approximately SEK 2,800 M. Our pipeline remains strong, and the activity level is high.
Finally, I would like to wish all employees, shareholders, and other stakeholders a great second half of 2022.
Stockholm, 19 July 2022
Nico Delvaux
President and CEO
Further information can be obtained from:
Nico Delvaux,
President and CEO, tel. no: +46 8 506 485 82
Erik Pieder,
Executive Vice President and CFO, tel.no: +46 8 506 485 72
ASSA ABLOY is ing ahold telephone and web conference at 09.30 on 19 July 2022 which can be followed online at www.assaabloy.com.
It is possible to submit questions by telephone on: 08–505 583 59, +44 333 300 9265 or +1 631 913 1422
This is information that ASSA ABLOY AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CEST on 19 July 2022.
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