ASSA ABLOY AB (publ)

ASSA ABLOY reported sales of almost SEK 39.5 billion, up 3% year over year, with 4% organic growth, 2% net growth from acquisitions, and a -3% currency effect. EBIT was almost SEK 6.7 billion, up 9%, and EPS was SEK 3.98, up 12%; EBITDA margin was 18.1%, up 90 basis points, and the reported EBIT margin was 17%, or 16.5% excluding one-time items. Cash flow was SEK 6.3 billion, up 6%, and cash conversion was 106%. For Q3, management said currency impact is estimated to be flat, though slightly dilutive to margin, and reiterated around 2% full-year pricing, with second-half pricing also around 2%.

Nico Delvaux described the quarter as strong despite challenging and swiftly changing markets, emphasizing accelerated organic growth, record margins, and continued transition from mechanical to electromechanical products. He pointed to broad strength in EMEA, the Americas, Global Technologies, and Entrance Systems, while noting that APAC declined due mainly to very weak Greater China and difficult South Korea conditions. He was upbeat on the company’s decentralized model, saying it is built to handle market volatility and continue delivering results.

Erik Pieder highlighted the main financial bridge: 4% organic growth, 2% acquisition growth, and -3% FX, with FX much improved versus Q1’s -10%. He said the reported 17% EBIT margin included roughly SEK 200 million of one-time items, and that excluding those items the margin would have been 16.5%; one-time effects included earn-out reversals, a Global Tech divestment gain, and tariff refunds, with the tariff item described as marginal and single-digit millions. He also cited strong cost performance: direct material was 30 basis points better year over year, conversion costs were flat, MFP savings were about SEK 130 million, SG&A improved by 70 basis points, net debt to EBITA was 2.2%, and net debt was down about SEK 2.5 billion versus a year ago.

Analysts focused on Q3 momentum, pricing, North American residential demand, volume confidence, one-offs, EMEIA margin sustainability, and project-based weakness in Global Tech and Entrance Systems. Management said July started at a similar level to June, Q2 was uneven with a weak April/May and a strong June, and pricing should be around 2% for the full year; they also said price increases were implemented in Q2 and pre-buy effects exist but are not material overall. On end markets, they said U.S. single-family new build remains weak, R&R is the more hopeful driver, Greater China will stay challenging, and non-critical CapEx and hospitality projects in Global Tech should improve in H2.