Fortune Brands Innovations (Therma-Tru, Solar Innovations, Larson, Yale, August) and Assa Abloy (Caldwell, Interlock) released fourth-quarter financial results in recent weeks, showing positive results from the U.S. market for smart locks. Results follow an exchange between the two companies, in which Assa Abloy divested its Yale brand to Fortune in June 2023.

Net sales for Assa Abloy increased by 12% to $3.5 billion USD. Organic sales growth was strong in the Americas and “good” in entrance systems, the company reported, while the news wasn’t as good in Asia Pacific where organic sales declined. Six acquisitions produced combined annual sales of $86.3 million.

Assa’s operating income (EBIT) increased by 11%, while the company’s operating margin (EBIT) was 16.8%, excluding the acquisition of Spectrum Brands’ Hardware and Home Improvement division (HHI) and divestment of the Emtek/U.S. smart residential business. Net income for the company amounted to $379.3 million.

Assa’s board of directors proposed a dividend of SEK 5.40 ($0.52 USD) per share for 2023, to be distributed in two equal installments.

“I am proud to report that 2023 was once again a successful year for Assa Abloy with record financial results in a year with slower economic growth,” said Nico Delvaux, the company’s president and CEO. “In the fourth quarter, and despite lower volumes, we delivered an operating margin, excluding the HHI transaction, of 16.8%, within our target range.”

Growth in the Americas was primarily driven by continued “good” demand within the U.S. non-residential sector, Delvaux said. Entrance systems also had strong growth in all business areas, except the residential segment, he added.

With more than 136 brands on its current roster, “We completed six acquisitions in the fourth quarter,” Delvaux said. “This means that 24 acquisitions were completed in 2023, adding sales of approximately [$955.6 million USD] during the year.”

The group’s sales for the full year totaled $13.4 billion.

As for Fortune Brands, the company’s fourth-quarter sales were $1.2 billion, marking an increase of 3% over Q4 2022. Organic sales, not including the impact of the non-reoccurring 53rd week and foreign exchange, were $1.1 billion—a 3% decrease versus Q4 2022. The company’s fourth-quarter earnings per share (EPS) were $0.64, down 35% over the prior year.

Full-year 2023 sales were $4.6 billion, 2% lower than 2022.

Among the positive marks shown by the company in the fourth quarter, security sales increased, driven by the U.S. and Canadian Yale and August residential smart locks acquisition.

“Our results this year demonstrate our focus on generating sales above the market, preserving margins, and generating cash,” said Fortune Brands CEO Nicholas Fink. “Our teams delivered in the face of a challenging macro environment while also advancing several long-term initiatives and executing on our priorities.”

The company’s focus has been on its leading brands, “meaningful innovation,” and channel relationships, Fink said. “These actions, combined with our focus on the parts of the market with long-term outsized growth opportunities, give me confidence in our ability to perform in 2024 and beyond.”

Going forward, for Assa Abloy, key activities include leading a transition to electromechanical and digital products and solutions.

“While penetration rates are mostly low, we see a steadily growing demand for these solutions,” Devaux said. “During the year, electromechanical products and solutions were our fastest growing product group with an organic growth of above 10%.”

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