Why invest in ASSA ABLOY

ASSA ABLOY's investment story is built on more than 25 years of succesful growth, which has turned ASSA ABLOY into a global leader in access solutions.

Future shareholder value is built on organic and acquired growth and a continuing process of rationalization and synergies across the Group.

ASSA ABLOY's organization

ASSA ABLOY is the global leader in access solutions, and offers a more complete range than any other company in the market. In, for example, the rapidly growing electromechanical security sector, which stands for more than half of sales, the Group has a leading position in fields such as access control, identification technology, automatic doors and hotel security.

ASSA ABLOY is the strongest global player in the industry. The ASSA ABLOY brand is represented in all major regions, in both mature and emerging markets worldwide, with leading positions in much of Europe and North America, Asia and the Pacific.

ASSA ABLOY owns operations in more than 70 countries, and through authorized distribution channels the Group covers the world.

Since the Group was founded in 1994, ASSA ABLOY has grown from a regional company to an international Group with about 49,000 employees.

ASSA ABLOY Investment story

ASSA ABLOYs long-term annual growth target is 10 percent, evenly split between organic and acquired growth. Organic growth is driven by the following components:

The new "electronic world", which has brought an increased demand for electromechanical and digital products. Clients also express their need for extended access control and high security in their identification process. Entrance automation is another field that is growing rapidly in the electronic world, providing increased convenience.

Geographically ASSA ABLOY will also continue to build the Group's presence in emerging markets where urbanization is a strong trend and the need for security solutions is expected to grow as the standard of living continues to improve.

To keep a 5 percent organic growth, ASSA ABLOY also wants to utilize the ASSA ABLOY brand asset on a global basis by, over time, transforming local brands into the ASSA ABLOY brand, which has been chosen as the Group's master brand. A selected number of global brands will also be used and on a local basis product brands will continue to exist with a strengthened ASSA ABLOY endorsement.

Good sales and customer composition

ASSA ABLOY’s customer base is generating stable sales and profit, and is driving organic growth. 

Due to its unique global market penetration and the world’s largest installed base of locks and access solutions, two-thirds of ASSA ABLOY’s sales are to the aftermarket. The aftermarket consists of renovations, refurbishments, extensions, replacements and upgrades. Demand in aftermarket is more stable than in new construction, which means that ASSA ABLOY’s sales and profitability are less sensitive to cyclical fluctuations.

Three quarters of the Groups sales is towards commercial and institutional customers with a higher demand for electronic products and complex solutions, and therefore higher profitability.

Sales growth

2,300% increase of sales 1994 - 2020

ASSA ABLOY is exploiting the strength of the brand portfolio and the sales force to drive further organic growth.

ASSA ABLOY is the Group brand and is increasingly becoming the leading brand for commercial door solutions. We also have strong master brands to continue to be a leader in each of the core areas of our business and a portfolio of other brands in markets and segments where needed.

In total, we have 130 endorsed brands that complement our offering. Those are often leading brands in their market, such as Yale, which is one of the world’s most well-known residential lock brands.
About 70 percent of our total sales are under the ASSA ABLOY master brand while 20 percent are under the HID or Yale brands.

Looking at the growth story over a longer period of time, ASSA ABLOY has seen amazing growth since its start in 1994. In 25 years ASSA ABLOY has acquired almost 300 companies. A key element of this rapid expansion has been identifying and building relationships with companies that can contribute to ASSA ABLOY's goals, then successfully acquiring and integrating them into the Group.

ASSA ABLOY plans to continue this strategy to ensure the company captures the opportunities presented by new technology and a market that is always growing in response to security challenges. This approach means that not only is ASSA ABLOY ahead of its competitors in terms of identifying new customer needs, but the Group also has the resources to develop new solutions, establish standards and educate the market to meet those needs.

ASSA ABLOY takes pride in the way the company incorporates new acquisitions into the Group. It's about achieving a balance between the scale and reach of global firm and retaining the strength of local experience, skill and knowledge. In this way our new companies provide added value to all our customers by contributing to complete solutions that bring safety, security and convenience.

Product leadership

Successful product development is vital for the Group's competitiveness and future, and as innovation also supports the Group's target of 5 percent organic growth.

The innovation strategy aims to create cost and functional benefits for the customer, through constant small steps. All new projects are driven by current and future customer needs. The Group-wide innovation process is based on ASSA ABLOY's global presence and strengthens local operations. The strategy has three objectives: new products should account for at least 25 percent of sales, new products should contribute to higher margins, and innovation efficiency should be doubled through a combination of more efficient processes and higher product value.

The focus on product leadership has been very consistent. The number of product development engineers has increased by more than 70 percent to nearly 1,400 in eight years, many with an electronics focus. Sales of products launched in the past three years have increased to more than 25 percent, exceeding the Group's target of 25 percent. This is a well-considered level in view of the 10 to 15-year product life cycle. In 2018 the U.S. business magazine Forbes, for the fourth time, ranked ASSA ABLOY, as one of the world's 100 most innovative companies.

EPS - Development

The ASSA ABLOY financial target of an operating margin of 16-17 per cent can also be measured by looking at earnings per share, which has increased successfully for many years. During the past five years sales have increased by 65 percent, operating income with 61 percent and earnings per share with 59 percent.