Quarterly Report Q4 2021
Very strong sales growth and margin improvement
Fourth quarter
- Net sales increased by 10% to SEK 25,623 M (23,298), with organic growth of 10% (–5) and acquired net growth of –1% (5)
- Very strong organic sales growth in Americas and Entrance Systems and strong organic sales growth in Global Technologies and EMEIA, while organic sales were stable in Asia Pacific
- Three acquisitions with combined annual sales of about SEK 300 M were signed in the quarter
- Operating income (EBIT[1] 2) was SEK 4,013 M (3,475), corresponding to an operating margin of 15.7% (14.9)
- Net income1 2 amounted to SEK 3,043 M (2,582)
- Earnings per share1 2 increased to SEK 2.74 (2.33)
- Operating cash flow amounted to SEK 3,384 M (5,529)
- The Board of Directors proposes a dividend of SEK 4.20 (3.90) per share for 2021, to be distributed in two equal installments.
Sales and income
| Fourth quarter | January-December | |||||||
| 2020 | 2021 | Δ | 2020 | 2021 | Δ | |||
| Sales, SEK M | 23,298 | 25,623 | 10% | 87,649 | 95,007 | 8% | ||
| Of which: | ||||||||
| Organic growth | –1,150 | 2,239 | 10% | –7,150 | 8,900 | 11% | ||
| Acquisitions and divestments | 1,211 | –236 | –1% | 3,328 | 1,975 | 2% | ||
| Exchange-rate effects | –1,709 | 322 | 1% | –2,558 | –3,517 | –5% | ||
| Operating income (EBIT)1 [2], SEK M | 3,475 | 4,013 | 15% | 11,916 | 14,181 | 19% | ||
| Operating margin (EBITA)1 2, % | 15.6% | 16.2% | 14.3% | 15.6% | ||||
| Operating margin (EBIT)1 2, % | 14.9% | 15.7% | 13.6% | 14.9% | ||||
| Income before tax1 2, SEK M | 3,306 | 3,819 | 16% | 11,133 | 13,538 | 22% | ||
| Net income1 2, SEK M | 2,582 | 3,043 | 18% | 8,375 | 10,901 | 30% | ||
| Operating cash flow, SEK M | 5,529 | 3,384 | –39% | 14,560 | 13,265 | –9% | ||
| Earnings per share1 2, SEK | 2.33 | 2.74 | 18% | 7.54 | 9.81 | 30% | ||
[1] Excluding costs before income tax for restructuring programs in fourth quarter 2020, totalling SEK –1,366 M. The corresponding cost after tax was SEK –1,112 M
[2] Excluding non-cash operating income in third quarter 2020 from revaluation at fair value of 39% ownership in agta record, totaling SEK 1,909 M for the year. The operating income had no tax impact.
Comments by the President and CEO
Very strong sales growth and margin improvement
We can look back at another year that was influenced to a large degree by the pandemic. As many restrictions were phased out, the activity level improved and for 2021 we report an organic sales growth of 11% and an operating margin of 14.9%.
Despite continued supply-chain challenges and reintroduced restrictions, during the fourth quarter our organic sales growth was very strong at 10%. This was also supported by strong price realization and good operational execution. In EMEIA, the organic sales growth was strong, driven by the Nordic region. Americas division reports very strong organic sales growth of 17% driven by high demand in the non-residential segment in the US, Latin America and continued solid residential sales. Due to the Covid-related lockdowns and continued unfavorable market conditions in China, sales in Asia Pacific division were stable. Global Technologies reported strong organic growth of 7% driven by strong development in Global Solutions, but semi-conductor shortages continued to impact our sales. Entrance Systems posted another very strong quarter with organic growth of 14%, driven by the Perimeter Security, Residential and Industrial segments.
Operating income increased by 15% to SEK 4,013 M and the operating margin was 15.7%. Adjusted for bad-debt provisions of SEK 100 M in China, we reached our margin target in the quarter. Thanks to strong operational execution our operating leverage was 23%, despite record-high raw material costs as well as logistic challenges and component shortages. Operating cash flow was strong and reached SEK 3,384 M.
Accelerating growth
During the year, we have turned more of our focus to growth-initiating activities. The transition to electromechanical products continues to be at the core of these initiatives. Our underlying sales in electromechanical products grew by more than 15% in our three regional divisions during the quarter, enabled by our continued investments in products and solutions. We also announced the enhancement of our current Mobile Access solution to include Room Key in Apple Wallet on iPhone and Apple Watch, as launched by Hyatt in December. We are still at the beginning of the transformation to smarter and even more user-friendly access solutions and there are almost unlimited opportunities.
We continue to execute on our acquisition strategy, and we have a strong pipeline. During 2021 we signed 15 acquisitions with annual sales of about SEK 16 billion, including the acquisition of HHI, which we now expect to close during 2022.
Finally, I would like to thank you for your continued trust in ASSA ABLOY and look forward to a new year where I am confident that we will continue to deliver great shareholder value.
Stockholm, 4 February 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 holding a telephone and web conference at 09.30 on 4 February 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 information is information that ASSA ABLOY AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CET on 4 February 2022.
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