Lockmaker Assa Abloy’s profit jumps as price hikes help counter supply strains

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FILE PHOTO: An Assa Abloy lock is displayed in a shop in Riga

By Anna Ringstrom

STOCKHOLM -Assa Abloy, the world’s biggest lockmaker, reported better than expected fourth-quarter profit growth on Friday, as price hikes and stronger demand helped mitigate continued pandemic-related supply chain challenges.

CEO Nico Delvaux said the Swedish group had raised prices again in January and would lift them further in February. If raw material costs don’t climb again, the price hikes should more than compensate for recent cost increases in the second half of 2022, he told analysts and reporters in a call.

Operating profit in the fourth quarter grew to 4.01 billion crowns ($441.95 million) from 3.48 billion a year earlier before restructuring costs. Analysts polled by Refinitiv had on average forecast a 3.87 billion crown profit.

Shares in the company were up 5% at 1109 GMT.

The group said price increases, cost control and sales growth bolstered profits, helping offset record high raw material costs, logistic challenges and component shortages accompanying the global economy’s rapid recovery from coronavirus restrictions.

Assa Abloy, whose products range from security doors and automated entrance solutions to electronic and mechanical locks under brands such as Yale, said sales excluding acquisitions were up 10%, with particularly strong growth in its Americas division.

“As many restrictions were phased out, the activity level improved,” Delvaux said in the earnings statement.

The rival to Allegion and Stanley Black & Decker proposed a dividend for 2021 of 4.20 crowns per share, up from 3.90 crowns the year before.

($1 = 9.0734 Swedish crowns)

(Reporting by Anna RingstromEditing by Tomasz Janowski and Mark Potter)

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