Part shortages hamper gross sales development at Assa Abloy as earnings forecasts lag

© Reuters. FILE PHOTO: Assa Abloy locks are displayed in a shop in Riga, Latvia Sept. 19, 2013. REUTERS / Ints Kalnins / File Photo

By Helena Soderpalm

STOCKHOLM (Reuters) – Assa Abloy said on Wednesday material shortages and supply chain issues would continue to affect its markets after posting a below-market profit in the third quarter.

The world's largest locksmith expects growth in Europe and America to recover to normal levels in the future as the travel business slowly recovers.

Like-for-like sales growth was 7%, supported by the reopening of companies in most of Assa's core markets during the quarter. However, Asia Pacific sales declined 7% due to new lockdowns in some markets and a slowdown in China.

Assa Abloy's (OTC 🙂 Global Technologies division increased like-for-like sales by 7%, driven in part by strong growth in the company's non-travel segment while negatively impacted by component shortages.

Assa – whose products range from security doors and automated entry solutions to electronic and mechanical locks under brands like Yale – expected a slower recovery in the travel-related segments and in Asia.

"We also assume that material shortages, logistical challenges and cost inflation will continue to affect our markets in the remainder of the year," said Chief Executive Nico Delvaux in a statement.

After rising 23% so far this year, shares of Assa, whose competitors include Allegion (NYSE 🙂 and Stanley Black & Decker (NYSE :), fell 3.8% in early trading Wednesday.

Investment bank Citi said in a statement that Assa's results looked "decent" while weaknesses were in Asia Pacific and its Global Technologies division.

The Swedish company's adjusted operating profit was 3.39 billion crowns (395.4 million US dollars) compared to 3.59 billion in the previous year and an average forecast of 3.59 billion in a refinitive poll of analysts.

($ 1 = 8.5737 Swedish crowns)

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