By Helena Soderpalm
STOCKHOLM -Assa Abloy said on Wednesday material shortages and supply chain problems would continue to impact its markets, after posting third-quarter profit below market expectations.
The world’s biggest lockmaker said it expected growth in Europe and the Americas to recover to normal levels ahead, while its travel-related business was recovering slowly.
Like-for-like sales growth came in at 7%, helped by the reopening of societies in most of Assa’s core markets during the quarter. However, sales in Asia Pacific declined 7% due to new lockdowns in some markets and a slowdown in China.
Assa Abloy’s Global Technologies division grew like-for-like sales by 7%, driven partly by strong growth in the firm’s non-travel-related segment, while negatively affected by component shortages.
Assa – whose products range from security doors and automated entrance solutions to electronic and mechanical locks under brands such as Yale – said it expected recovery in the travel-related segments and in Asia to be slower.
“We also assume material shortages, logistic challenges and cost inflation to continue to impact our markets during the rest of the year,” Chief Executive Nico Delvaux said in a statement.
Having risen 23% so far this year, shares in Assa, whose rivals include Allegion and Stanley Black & Decker, fell 3.8% in early trade on Wednesday.
Investment bank Citi said in a note that Assa’s results looked “decent”, while the areas of weakness were in Asia-Pacific and its Global Technologies division.
The Swedish group’s adjusted operating profit was 3.39 billion crowns ($395.4 million) against 3.59 billion a year earlier and a mean forecast of 3.59 billion in a Refinitiv poll of analysts.
($1 = 8.5737 Swedish crowns)
(Reporting by Helena Soderpalm; editing by Niklas Pollard and David Evans)