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Lockmaker Assa Abloy's Q1 profit jumps on strong demand and price hikes

Lockmaker Assa Abloy's Q1 profit jumps on strong demand and price hikes
Lockmaker Assa Abloy's Q1 profit jumps on strong demand and price hikes   -   Copyright  Thomson Reuters 2022
By Reuters

By Anna Ringstrom

STOCKHOLM – Assa Abloy, the world’s biggest lockmaker, reported on Wednesday first-quarter earnings above expectations on the back of robust demand and price hikes, sending its shares up.

The Swedish group’s operating profit jumped 26% from a year earlier to 4 billion crowns ($408.3 million), against a mean forecast of 3.76 billion in a Refinitiv poll of analysts.

Assa Abloy, whose products range from security doors and automated entrance systems to electronic and mechanical locks under brands such as Yale, said sales excluding acquisitions were up 14%, with strong demand especially in the United States.

It said the operating margin widened to 15.0% from 14.6% despite supply-chain issues including semiconductor shortages, rising cases of staff on sick leave due to Omicron and record high energy costs.

Its share price rose 3% in early trade.

A competitor to Allegion and Stanley Black & Decker, Assa Abloy said it was building up inventory to safeguard deliveries.

“While macro-economic and geopolitical uncertainties have increased, our business benefits from many long-term growth drivers. The basic need for safety and security is a fundamental driver,” CEO Nico Delvaux said.

Assa Abloy is also banking on growing demand for access solutions enabled by new technologies.

“Specifically, the transition to electromechanical and mobile access solutions provides many opportunities,” Delvaux said in a statement.

Assa Abloy has in recent years inked partnerships with several tech companies such as Apple.

($1 = 9.7957 Swedish crowns)