The fourth quarter gave ASSA ABLOY a strong finish to the year. Full year sales increased by 17%, including 3% organic growth. Operating income (EBIT) represents an increase of 17%. The operating margin was 16.3%.
“The fourth quarter gave ASSA ABLOY a strong finish to the year, with a rise in sales of a full 20% and a 22% improvement in operating income,” says Johan Molin, President and CEO. “It is pleasing to see that growth in North America is continuing to accelerate, although the trend to weaker growth in the Emerging Markets is also continuing.
“Organic growth during the quarter was 3%, driven by a very strong performance in the USA. The Americas, Global Technologies and Entrance Systems divisions all showed strong growth, while EMEA maintained its stable but lower growth of 2%. All regions in Asia Pacific produced strong growth except China. The weak market in China, in combination with the enforcement of ASSA ABLOY’s strict credit policy led to declining sales.
Once again I can report that sales of new products reached a new record and made up 32% of sales value. I note in particular that the Group has seen an extremely satisfactory advance in electromechanical products. Another area that made strong progress this year was e-government, where ASSA ABLOY received many new orders.
The pace of acquisitions intensified during the fourth quarter, with many acquisitions made in the Emerging Markets. Especially strategic for the Group are the digital lock manufacturer Digi Electronic Lock in China and three acquisitions in South America. A total of 20 companies were acquired during 2014, bringing added sales of around 5%.
Operating income continued to improve in a very satisfactory manner this quarter, rising by a full 22%. Major contributory factors were good savings and efficiency gains in production and administration, strong contributions to income from the acquired companies, and also exchange-rate gains.
“My judgment is that the global economic trend is moving sideways, with America showing a positive trend while Europe and the Emerging Markets are stagnating. However, our strategy of expanding on the Emerging Markets remains unchanged, since in the long term they are expected to achieve very good economic growth. We are also continuing our investments in new products, especially in the growth area of electromechanics.”
Australia, New Zealand, South-East Asia and South Korea showed strong growth. China showed a strong negative trend due to weak domestic demand and ASSA ABLOY’s enforcement of a strict credit policy in China.