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1. Company Snapshot

1.a. Company Description

ASSA ABLOY AB (publ) provides door opening products, solutions, and services for the institutional, commercial, and residential markets in Europe, the Middle East, Africa, North and South America, Asia, and Oceania.The company offers mechanical and electromechanical locks, digital door locks, cylinders, door fittings, security doors, door frames, access control devices, and fire doors, as well as hardware products.It also provides identity solutions, including identity and access management, biometrics, authenticity and brand protection products, contactless RFID tags and transponders, and government IDs to companies, and government and state institutions, as well as healthcare, education, and financial industries; and secure access solutions for hotels, cruise ships, student accommodations, and elderly care facilities.


In addition, the company offers entrance automation products, services, and components, such as automatic swing, sliding, and revolving doors; industrial doors; garage doors; high-performance doors; docking solutions; hangar doors; gate automation products; components for overhead sectional doors and sensors; and high security fencings and gates.The company provides its products primarily under the ASSA ABLOY, Yale, and HID brands.It sells its products through distributors, wholesalers, and home improvement stores.


ASSA ABLOY AB (publ) was incorporated in 1954 and is based in Stockholm, Sweden.

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1.b. Last Insights on ASSA

ASSA ABLOY's recent performance was driven by growth in annual revenue and net income. The company's strategic acquisitions, including SiteOwl, a cloud-based platform for physical security lifecycle management, and Kentix, a German designer of monitoring and access control products for datacenters, have expanded its offerings. Additionally, partnerships, such as with Transact + CBORD to improve campus security with mobile-enabled wireless access, have contributed to its growth. The company's Q3 2025 report is expected to provide further insights into its performance.

1.c. Company Highlights

2. ASSA ABLOY's Strong Q4 Performance Driven by Organic Growth and Operational Excellence

ASSA ABLOY reported a robust Q4 performance, with sales exceeding SEK 38 billion, driven by 4% organic growth and 3% net acquisition growth, despite a negative impact from FX. The EBITA margin reached a record level of 17.9%, and the EBIT margin was 16.8% with excellent operating leverage. The company's EPS for the full year was 3.73, slightly below estimates of 3.8. The strong operational execution was complemented by good working capital management, resulting in a cash conversion of 137% in the quarter.

Publication Date: Feb -06

📋 Highlights
  • Strong Organic Sales Growth:: Q4 organic sales rose 4%, driven by Global Tech, Americas, and EMEIA, offset by APAC decline.
  • Record EBIT Margin:: Achieved 16.8% EBIT margin in Q4, with EBITA margin at 17.9%, reflecting operational efficiency.
  • Acquisition-Driven Growth:: Sales boosted by 3% via acquisitions, including seven completed deals in Q4.
  • Exceptional Cash Conversion:: 137% cash conversion in Q4, supported by working capital optimization and strong cash flow.
  • Electromechanical Shift Momentum:: Electromechanical organic sales grew 8% in regions, accelerating transition from mechanical products.

Segmental Performance

The company's organic sales growth was driven by strong performance in Global Tech and Americas, as well as good sales growth in EMEIA and Entrance Systems. APAC reported a sales decline, mainly due to challenging market conditions in Greater China. The non-residential side continued to show good momentum, particularly in North America, Europe, and Oceania, while the residential side remained challenging.

Outlook and Guidance

ASSA ABLOY expects to maintain its growth momentum, driven by its strong product portfolio and strategic acquisitions. The company has an active M&A pipeline with over 900 potential targets and aims to grow through acquisitions by 5% per year over a business cycle. Analysts estimate revenue growth of 5.3% for the next year.

Valuation

Using the current P/E Ratio of 29.22, it appears that the market has priced in a certain level of growth expectations. The EV/EBITDA ratio of 16.86 suggests that the company's valuation is reasonable compared to its earnings. The ROIC of 9.59% and ROE of 14.31% indicate a good return on capital and equity, respectively. The Net Debt/EBITDA ratio of 2.25 is relatively moderate, indicating a manageable debt burden.

Key Drivers

The company's growth is driven by its shift from mechanical to electromechanical products, with an electromechanical organic sales growth of 8% in the regional divisions. The recurring Software-as-a-Service revenue continues to grow strongly, accelerating from 2% to 6% of top line since 2018. The company's strong performance in Entrance Systems, particularly in perimeter security, is also a key driver of growth.

3. NewsRoom

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Smart Lock Market Company Analysis Report 2025: Company, Strategic Developments, Mergers, Product Innovations, Revenue Insights, and Future Forecasts to 2033

Feb -17

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Locks Market Research Report 2025: A $25+ Billion Market by 2030 - R&D Innovations Propel Growth with Focus on IoT Integration and Cost Reduction

Feb -17

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Assessing ASSA ABLOY (OM:ASSA B) Valuation After Record Margins Dividend Rise And Acquisition-Fueled Growth

Feb -09

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Assa Abloy AB (ASAZF) Q4 2025 Earnings Call Highlights: Strong Organic Growth and Strategic ...

Feb -07

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ASSA ABLOY Quarterly Report Q4 2025

Feb -05

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ASSA ABLOY acquires NSP Security in the UK

Feb -03

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Assa Abloy (ASAZY) Upgraded to Strong Buy: Here's What You Should Know

Jan -22

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Is ASSA ABLOY (OM:ASSA B) Offering Value After Multi‑Year Share Price Strength

Jan -18

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.10%)

6. Segments

Entrance Systems

Expected Growth: 5.0%

The Entrance Systems segment is expected to grow steadily due to increasing demand for automated entrance solutions in commercial and residential sectors. Urbanization and construction activities will drive growth.

Americas

Expected Growth: 3.0%

The Americas segment is expected to experience moderate growth due to steady demand from the US market. Growth will be driven by increasing adoption of electronic access control solutions.

EMEIA

Expected Growth: 4.0%

The EMEIA segment is expected to grow steadily due to a mix of mature and emerging markets. Eastern European and Middle Eastern markets are expected to drive growth.

Asia Pacific

Expected Growth: 8.0%

The Asia Pacific segment is expected to experience high growth due to rapid urbanization and infrastructure development. China and India are expected to drive growth.

Global Technologies

Expected Growth: 6.0%

The Global Technologies segment is expected to experience above-average growth due to increasing demand for integrated security solutions. Large-scale projects will drive growth.

Other

Expected Growth: 2.0%

The Other segment is expected to experience low growth due to its diversified and smaller nature. Some businesses may see decline, while others grow.

7. Detailed Products

Entrance Systems

ASSA ABLOY's Entrance Systems provide a comprehensive range of automatic doors, revolving doors, and manual doors for various applications.

Global Technologies

ASSA ABLOY's Global Technologies offer a range of electronic locks, digital door locks, and access control systems.

EMEA (Europe, Middle East, and Africa) Locks

ASSA ABLOY's EMEA Locks provide a range of mechanical locks, cylinders, and padlocks for various applications.

Americas Locks

ASSA ABLOY's Americas Locks offer a range of mechanical locks, electronic locks, and digital locks for various applications.

Asia Pacific Locks

ASSA ABLOY's Asia Pacific Locks provide a range of mechanical locks, electronic locks, and digital locks for various applications.

Identification Technology

ASSA ABLOY's Identification Technology offers a range of identification solutions, including biometric authentication and smart cards.

8. ASSA ABLOY AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for ASSA ABLOY AB (publ) is medium due to the presence of alternative products and services in the security solutions market.

Bargaining Power Of Customers

The bargaining power of customers for ASSA ABLOY AB (publ) is low due to the company's strong brand reputation and diversified customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers for ASSA ABLOY AB (publ) is medium due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some bargaining power.

Threat Of New Entrants

The threat of new entrants for ASSA ABLOY AB (publ) is low due to the high barriers to entry in the security solutions market, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for ASSA ABLOY AB (publ) is high due to the presence of several established players in the security solutions market, leading to intense competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.04%
Debt Cost 5.48%
Equity Weight 59.96%
Equity Cost 7.96%
WACC 6.97%
Leverage 66.78%

11. Quality Control: ASSA ABLOY AB (publ) passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Aena

A-Score: 7.2/10

Value: 6.2

Growth: 7.1

Quality: 7.7

Yield: 6.9

Momentum: 6.0

Volatility: 9.3

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Vinci

A-Score: 6.7/10

Value: 6.3

Growth: 6.1

Quality: 4.7

Yield: 6.9

Momentum: 7.0

Volatility: 9.0

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Volvo

A-Score: 5.6/10

Value: 3.7

Growth: 6.4

Quality: 4.3

Yield: 8.8

Momentum: 4.0

Volatility: 6.3

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ASSA ABLOY

A-Score: 5.4/10

Value: 2.4

Growth: 6.9

Quality: 6.5

Yield: 2.5

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

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BAE Systems

A-Score: 4.9/10

Value: 2.4

Growth: 6.8

Quality: 4.9

Yield: 5.0

Momentum: 4.5

Volatility: 6.0

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Saint-Gobain

A-Score: 4.8/10

Value: 4.7

Growth: 5.8

Quality: 4.5

Yield: 4.4

Momentum: 4.0

Volatility: 5.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

381.5$

Current Price

381.5$

Potential

-0.00%

Expected Cash-Flows