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Lockmaker Assa Abloy to raise prices further after Q1 beats expectations

Published 26/04/2023, 07:47
© Reuters. FILE PHOTO: An Assa Abloy lock and key are displayed in a shop in Riga, September 19, 2013. REUTERS/Ints Kalnins

COPENHAGEN (Reuters) -The world's biggest lockmaker Assa Abloy on Wednesday posted a higher than expected first-quarter operating profit after a "very strong" start to the year and said it would raise prices again to offset inflationary pressure.

Operating profit at the Swedish group fell to 3.96 billion crowns in the first three months of the year from 4.00 billion crowns in the year earlier period, but beat analysts' expectations of 3.69 billion crowns in a Refinitiv poll.

Excluding restructuring costs profit grew to 5.18 billion crowns, while group organic sales growth stood at 8%.

Assa Abloy said in a statement that its profit had been boosted by higher selling prices, lower material costs, savings, favourable currency rates and strong sales growth, in particular at its Global Technologies and Americas divisions.

CEO Nico Delvaux told analysts and media in a call that the group will raise its prices further in coming quarters to compensate for high labour, energy and material costs.

"We have continued to increase prices in the first quarter and we will also continue to do so going forward," he said. "Our ambition is to continue to increase prices as long as we can and as long as the market follows."

© Reuters. FILE PHOTO: An Assa Abloy lock and key are displayed in a shop in Riga, September 19, 2013. REUTERS/Ints Kalnins

Delvaux said in the call that Assa Abloy's relatively small direct-to-consumer sales were down somewhat in Europe, Australia, and "to a certain extent even in the U.S." following more cautious consumer behaviour.

Assa Abloy's shares were down 1% at 0945 GMT.

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