STOCKHOLM Assa Abloy (ASSAb.ST), the world's biggest lock maker, said on Monday that expansion in emerging markets would be key to eke out growth through what was likely to be a lengthy global downturn.
Assa Abloy, whose products range from ordinary household locks to advanced digital entrance systems, has seen sluggish growth in mature markets, not least in Europe where public spending cuts have weighed heavily on demand.
The company, with a vast portfolio of brands such as Yale and China's PanPan, said many indicators now suggested that global economy would remain weak for the foreseeable future.
"It is therefore of the utmost importance that Assa Abloy continues to develop its presence on the new markets, which are expected to go on growing, and that investments in new products and market presence are maintained."
The company, a rival to U.S. groups Ingersoll-Rand (IR.N) and Stanley Black & Decker (SWK.N), said sales rose 1 percent, excluding the impact of acquisitions and currency, to come in below the 2 percent growth seen by analysts in a Reuters poll and a 3 percent expansion in the preceding quarter.
"Despite the weak trend on the mature markets Assa Abloy has sustained its success on the American market, with 3 percent organic growth in both Americas and Global Technologies," it said. "In Europe the position is tough, with continued weakness."
Amid the general gloom, recent months have seen signs of growing activity in the long-suffering U.S. construction market with the architecture billings index rising steadily since May and posting its fastest increase since 2010 in September.
Assa Abloy said earnings before interest and tax rose to 1.93 billion Swedish crowns ($287.97 million) from a year-earlier 1.75 billion to come marginally ahead of a mean forecast of 1.91 billion in the poll analysts.
($1 = 6.7020 Swedish crowns)
(Reporting by Niklas Pollard and Helena Soderpalm, Editing by Alistair Scrutton)