Quarterly Report Q2 2024
Strong performance
Second quarter
- Net sales increased by 10% to SEK 37,968 M (34,474), with organic growth of –1% (3) and acquired net growth of 11% (6). Exchange- rates affected sales by 0% (8).
- Organic sales growth was good in Americas and EMEIA, stable in Entrance Systems, but declined in Asia Pacific and Global Technologies.
- Eight acquisitions with combined annual sales of about SEK 1,000 M were completed in the quarter.
- Operating income1 (EBIT) increased by 11% and amounted to SEK 6,085 M (5,500), with an operating margin of 16.0% (16.0).
- Net income1 amounted to SEK 3,927 M (3,731).
- Earnings per share1 amounted to SEK 3.54 (3.36).
- Operating cash flow amounted to SEK 5,604 M (6,671).
Sales and income
| Second quarter | First half-year | |||||||
| 2023 | 2024 | Δ | 2023 | 2024 | Δ | |||
| Sales, SEK M | 34,474 | 37,968 | 10% | 66,865 | 73,168 | 9% | ||
| Of which: | ||||||||
| Organic growth | 897 | –349 | –1% | 3,115 | –1,111 | –2% | ||
| Acquisitions and divestments | 2,002 | 3,925 | 11% | 3,346 | 7,532 | 11% | ||
| Exchange-rate effects | 2,109 | –83 | 0% | 4,346 | –118 | 0% | ||
| Operating income (EBIT)1, SEK M | 5,500 | 6,085 | 11% | 10,686 | 11,512 | 8% | ||
| Operating margin (EBITA)1, % | 16.6% | 16.9% | 16.6% | 16.6% | ||||
| Operating margin (EBIT)1, % | 16.0% | 16.0% | 16.0% | 15.7% | ||||
| Income before tax1, SEK M | 5,054 | 5,236 | 4% | 9,898 | 9,852 | 0% | ||
| Net income1, SEK M | 3,731 | 3,927 | 5% | 7,423 | 7,389 | 0% | ||
| Operating cash flow, SEK M | 6,671 | 5,604 | –16% | 10,741 | 8,701 | –19% | ||
| Earnings per share1, SEK | 3.36 | 3.54 | 5% | 6.68 | 6.65 | 0% | ||
1 Excluding items affecting comparability. Please see the “Items affecting comparability” section in the report for further details about the financial effects in 2024. For information about items affecting comparability in 2023, please see the Year-end report 2023, available at assaabloy.com.
Comments by the President and CEO
Strong performance
Today we announce strong results in a challenging market environment. Our sales grew 10%, driven by very strong acquired net growth of 11%, while organic sales declined 1% and the operating margin was strong at 16.0%. The continued solid non-residential development in the US contributed to good organic sales growth of 3% in the Americas division while EMEIA’s organic sales grew 1%. In Entrance Systems, organic sales were flat, where much lower demand for loading docks in the US were offset by strong growth in Pedestrian. Organic sales in Asia Pacific and Global Technologies declined by 5% and 7% respectively. The decline in Asia Pacific was mainly because of continued low construction activity in China, while high comparable sales figures last year due to the backlog catchup in Physical Access Control remained a challenge for Global Technologies.
The operating profit increased by 11% to SEK 6,085 M, corresponding to an operating margin of 16.0%. Strong operational execution through implementation of cost actions of about SEK 300 M, continued strong price realization, lower direct material costs and HHI contributed to the strong bottom line performance. The operating cash flow was excellent in the quarter, SEK 5,604 M, with a cash conversion of 107%.
Acquired growth is a key pillar for our growth strategy
To deliver on our 10% annual growth target we work with strategic activities shared across our divisions. One of these activities is to continue our acquisition journey. This has been a vital part of our strategy since the foundation, and it is further underscored by the strong growth in the first half of 2024. After a record of 24 acquisitions in 2023, we have closed another 11 acquisitions in the first six months of 2024. Given our robust pipeline and strong financial performance, we can continue our successful acquisition strategy. We are also convinced that the combination of our well-structured M&A process, our local knowledge and clear-cut investment criteria, provide a solid base for continued synergy realization while also enabling accelerated organic growth over time.
This report marks the one-year anniversary of ASSA ABLOY becoming the proud owner of HHI. Since the consolidation last year, I’ve had the opportunity to visit most of HHI’s facilities and factories. This has left me with a very good impression of the operations, the HHI team and all the opportunities going forward. The integration of HHI continues according to plan and we are even more confident than a year ago that we will be able to realize USD 100 M in synergies. It is also encouraging that HHI, on a standalone basis in the quarter, delivered a high-single digit sales growth with a sequentially improved operating margin. We are confident that this positive trend will continue.
We can look back on a strong financial performance in the first half of 2024 and I am convinced that the Group is in an excellent position to continue to lead the industry and generate significant value for all our stakeholders.
Stockholm, July 17, 2024
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
Björn Tibell,
Head of Investor Relations, tel. no: +46 70 275 67 68, e-mail: bjorn.tibell@assaabloy.com
ASSA ABLOY is holding a telephone and web conference at 09.00 on July 17, 2024 which can be followed online at assaabloy.com/investors.
It is possible to submit questions by telephone on: 08–505 100 31, +44 207 107 0613 or +1 631 570 5613
This information 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 July 17, 2024.
