Assa Abloy sales growth stumbles, fourth-quarter profit just lags
STOCKHOLM (Reuters) - Assa Abloy (ASSAb.ST), the world's biggest lock maker, posted a slightly smaller-than expected rise in fourth-quarter earnings on Thursday and said weak markets, especially in Europe, rubbed out any growth in like-for-like sales.
Assa Abloy, whose products range from ordinary household locks to advanced digital entrance systems, has seen sluggish growth in crisis-hit Europe while the North American market has yet to fully recover from a housing bust some five years ago.
The company, maker of locks under brands such as Yale and China's PanPan, said sales contracted in Europe in quarter but grew in the Americas and Asia while lower material costs and cost cuts underpinned a rise in profits.
Earnings before interest and tax at rose to 2.03 billion Swedish crowns ($319.96 million) from a year-earlier adjusted 1.88 billion to come marginally below the mean forecast of 2.07 billion in a Reuters poll of analysts.
The company, a rival to U.S. Ingersoll-Rand (IR.N) and Stanley Black & Decker (SWK.N), said sales were flat when excluding acquisitions and currency swings, below analysts' estimates that saw growth holding steady from the previous quarter at 1 percent.
Faced with subdued prospects in Europe and the United States, Assa Abloy has increasingly been looking for growth in emerging markets, setting a goal last year to double sales in these faster-growing economies to half its revenues by 2025.
"Many indicators suggest that the world economy will remain weak for the foreseeable future," the company said.
"It is therefore of the utmost importance that Assa Abloy continues its expansion on the new markets, which are expected to go on growing well, while at the same time maintaining its investments in new products and market presence."
The company, which also racks up a steady stream of acquisitions every year to underpin growth, proposed raising its dividend to 5.10 crowns per share from 4.50 crowns, just topping the median forecast of 5.00 crowns in the poll of analysts. ($1 = 6.3446 Swedish crowns)
(Reporting by Niklas Pollard and Johannes Hellstrom)
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