Quarterly Report Q4 2023
Strong result in a challenging market
Fourth quarter
- Net sales increased by 12% to SEK 36,970 M (32,915), with positive organic growth of 0% (9) and acquired net growth of 11% (5). Exchange- rates affected sales by 1% (14).
- Organic sales growth was strong in Americas and good in Entrance Systems, while organic sales declined in Asia Pacific, EMEIA and Global Technologies.
- Six acquisitions with combined annual sales of SEK 900 M were signed.
- Operating income1 (EBIT) increased by 11% and amounted to SEK 5,722 M (5,152), with an operating margin of 15.5% (15.7).
- The operating margin1 (EBIT) excluding the acquisition of HHI and divestment of the Emtek/U.S. Smart Residential business was 16.8%.
- Net income1 amounted to SEK 3,969 M (3,729).
- Earnings per share1 amounted to SEK 3.56 (3.36).
- Operating cash flow amounted to a record SEK 7,315 M (6,588).
- The Board of Directors proposes a dividend of SEK 5.40 (4.80) per share for 2023, to be distributed in two equal installments.
Sales and income
| Fourth quarter | January-December | |||||||
| 2022 | 2023 | Δ | 2022 | 2023 | Δ | |||
| Sales, SEK M | 32,915 | 36,970 | 12% | 120,793 | 140,716 | 16% | ||
| Of which: | ||||||||
| Organic growth | 2,656 | 133 | 0% | 13,007 | 3,393 | 3% | ||
| Acquisitions and divestments | 1,336 | 3,572 | 11% | 2,126 | 10,651 | 8% | ||
| Exchange-rate effects | 3,300 | 349 | 1% | 10,653 | 5,879 | 5% | ||
| Operating income (EBIT)1, SEK M | 5,152 | 5,722 | 11% | 18,532 | 22,185 | 20% | ||
| Operating margin (EBITA)1, % | 16.2% | 16.2% | 15.9% | 16.5% | ||||
| Operating margin (EBIT)1, % | 15.7% | 15.5% | 15.3% | 15.8% | ||||
| Income before tax1, SEK M | 4,766 | 4,879 | 2% | 17,521 | 19,654 | 12% | ||
| Net income1, SEK M | 3,729 | 3,969 | 6% | 13,296 | 15,049 | 13% | ||
| Operating cash flow, SEK M | 6,588 | 7,315 | 11% | 15,808 | 25,232 | 60% | ||
| Earnings per share1, SEK | 3.36 | 3.56 | 6% | 11.97 | 13.54 | 13% | ||
1 Adjusted for items affecting comparability. Please see the section “Items affecting comparability” in the report for further details about the financial effects.
Comments by the President and CEO
Strong result in a challenging market
I am proud to report that 2023 was once again a successful year for ASSA ABLOY with record financial results in a year with slower economic growth. Our organic sales grew 3%, complemented by net growth from acquisitions of 8%, and the operating margin improved to 15.8%.
In the fourth quarter, and despite lower volumes, we delivered an operating margin, excluding the HHI transaction, of 16.8%, within our target range. This underlines
the agility and resilience of our business model and good cost control with more than SEK 0.5 bn in cost savings in the quarter.
Sales increased 12% with a positive organic growth of 0.4%, acquired net growth of 11% and currency effects of 1%. Americas and Entrance Systems delivered good organic sales growth of 5% and 3% respectively. Americas growth was primarily driven by continued good demand within the US non-residential business and Entrance Systems had strong growth in all business areas except for the Residential segment. Asia Pacific, EMEIA and Global Technologies reported negative organic growth. Lower intra-group sales and weak export business continued to affect Asia Pacific. EMEIA’s negative sales development was driven by weakness in the Nordics again this quarter, while Global Technologies had very high comparable sales figures last year mainly due to catching up with the backlog in PACS.
The operating profit excluding items affecting comparability increased by 11% to SEK 5,722 M, and the operating margin was 16.8% excluding the HHI transaction. The operating leverage was again very strong, driven by lower direct material costs, cost-savings as well as price realization. The operating cash flow also grew strongly in the quarter by 11% to a record SEK 7,315 M with a cash conversion of 150%.
Priorities in 2024
Going into 2024, we will continue to execute on our strategy to accelerate our long-term profitable growth. A key activity is to lead the transition to electromechanical and digital products and solutions. While penetration rates are mostly low, we see a steadily growing demand for these solutions. During the year, electromechanical products and solutions were our fastest growing product group with an organic growth of above 10%. Another important priority for 2024 is the integration and realization of synergies in HHI.
We completed six acquisitions in the fourth quarter. This means that 24 acquisitions were completed in 2023, adding sales of approximately SEK 10 bn during the year. The integration of HHI proceeds according to plan. Going forward, acquisitions remain one of the key growth areas and the pipeline remains solid.
The macroeconomic environment continues to be uncertain. We therefore remain dedicated to mitigating any impact from potentially negative changes in demand, through local agility and focus on cost-control. To further optimize our operational footprint, we have also started to work on our next manufacturing footprint program, with a launch target towards the end of 2024.
Lastly, I would like to thank you for your continued trust and look forward to another exciting year with great opportunities for ASSA ABLOY.
Stockholm, February 7, 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 09.30 on February 7, 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. The information was submitted for publication, through the agency of the contact persons set out above, at 08.00 CET on February 7, 2024.
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