Stock Analyst Note
Assa Abloy Earnings: Americas and Europe Demand Recovering Despite Still-Tight Financial Conditions
Demand for wide-moat Assa Abloy’s locking and physical access systems remained subdued during the second quarter of 2024 amid globally weak new construction conditions. Still, second-quarter organic sales of negative 1% showed modest sequential improvement, up from negative 2% in the prior quarter. The performance of the Americas and EMEIA Opening Solutions segments were bright spots, with organic sales growth—of 1% and 3%, respectively—improving on their first-quarter showing and tracking ahead of our prior expectations that factored further organic top-line pressure amid still-tight financial conditions. Organic sales growth for Entrance Systems—the group’s largest segment accounting for about 35% of group EBIT—was flat, unchanged quarter on quarter. However, still-weak demand for the Global Technologies and Asia Pacific Opening Solutions segments weighed on the group’s second-quarter top-line performance.