Assa Abloy has published its Q1 2021 results, highlighting a 2% net decrease in sales but organic growth of 4%. This figure was supported by the company seeing strong organic growth in Asia Pacific EMEIA and Entrance Systems, but countered by a 9% drop in organic growth for Global Technologies.
“The world continued to be affected by Covid-19 restrictions in the first quarter, and in that context, I am very pleased that we can report good organic growth in the quarter,” said Assa Abloy President and CEO, Nico Delvaux. “Asia Pacific division has been recovering from the trough of last year, resulting in a very strong organic sales growth of 23%. Entrance Systems has accelerated and reported a very strong organic sales growth of 11%. Organic sales growth in EMEIA was strong at 5% and Americas was stable despite a strong comparable, but sales in Global Technologies were down significantly.”
The Global Technologies business saw good growth in sales for Secure Issuance. However, it saw a decline in sales for Identification Technology and Physical Access Control and declined significantly in all other business areas as well as in Global Solutions. “The market conditions for parts of Global Technologies division continue to be very challenging and we do not expect the travel-exposed segments to return to pre-pandemic volumes in the near future,” stated Delvaux.
A positive to come out of the results was a 16% increase in the company’s operating income with its operating margin at 14.6%. With a strong operating leverage and operating cashflow also significantly up, Assa Abloy is feeling confident for the coming months.
“With the world now expected to gradually reopen, we will start to shift our focus more to growth again with innovation as an enabler,” explained Delvaux. “Our investments in R&D have resulted in the recent launch of several new products and solutions, including a new door-operator range with smart mobile functions from Entrance Systems, and Incedo, a cloud-based access control platform for commercial applications.
“In parallel, our cost-saving measures are continuing with temporary savings now being replaced by permanent savings,” he continued. “Our ongoing restructuring programmes and other efficiency measures have supported our very strong operating leverage. As volumes start to increase, we will gradually ramp up capacity and make the investments needed to support the growth.”
The strong performance of the Entrance Systems division during the first quarter was a highlight for Assa Abloy. It reported that sales growth was very strong in Perimeter Security and Residential and strong in Industrial and Pedestrian.
“Entrance Systems, our biggest division, has developed very well and the division’s new organisation is making progress, with all segments reporting strong sales growth,” furthered Delvaux. “The investments in growth and product development in the EMEIA division have generated strong growth despite the continued negative effect of Covid-19 restrictions. In the Americas division we have seen a continued strong growth in South America. In the US we are starting to see positive signs from eased restrictions and, next to a strong residential demand, we expect our aftermarket in the non-residential segment to gradually normalise from current low levels.”
Reflecting on the results, Delvaux was keen to point to positive signs for the future: “I am confident that we are now moving out of this pandemic as an even stronger Group, well positioned as a global industry leader to bounce forward and re-accelerate profitable growth.”