Assa Abloy AB, the world’s largest lockmaker, reported fourth-quarter profit that fell short of analyst expectations as the company had no like-for-like sales growth because of weak demand in southern Europe.
Net income rose to 1.39 billion kronor ($219 million) from 114 million kronor a year earlier, the company said in a statement. Analysts expected profit of 1.43 billion, according to the average of 13 estimates compiled by Bloomberg. Assa Abloy took a restructuring charge of 1.42 billion kronor in the fourth quarter of 2011. Sales including acquisitions rose 4.2 percent to 12.2 billion kronor.
Assa Abloy has countered weak development in Europe and North America by expanding in emerging markets. The 17 members of the euro area entered a recession in the third quarter, and the U.S. economy shrank in the fourth. The Stockholm-based company will continue to make acquisitions to reach a target of 50 percent of sales coming from emerging markets versus one- quarter currently, it said Jan. 9.
“Many indicators suggest that the world economy will remain weak for the foreseeable future, due primarily to the budget cutbacks that many countries are making,” Chief Executive Officer Johan Molin said in the statement. “It is therefore of the utmost importance that Assa Abloy continues its expansion on the new markets, which are expected to go on growing well.”
Assa Abloy targets annual growth of 10 percent over a business cycle through a combination of increasing existing sales and adding new companies. It has added 100 new companies since Molin took the helm in 2005 with annual sales increasing 84 percent in the same period, the company said Jan. 9.
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