Assa Abloy Earnings: Weak Residential Construction Activity Weighs on Organic Growth

Soft residential construction markets are holding wide-moat Assa Abloy back in late 2023, with a meager 1% of organic growth delivered in the third quarter. The impact of weakened residential construction activity was most pronounced for the Europe, Middle East, India, and Africa, or EMEIA, and Asia-Pacific opening solutions segments, posting third-quarter organic growth of negative 3% and negative 7%, respectively. The performance of the global entrance systems segment was also hampered by weak residential sales, with organic growth flat in the quarter. Elsewhere, the global technologies and the Americas opening solutions segments delivered more appealing third-quarter organic growth of 4% and 3%, respectively. Strong nonresidential volumes were the major driver of the outperformance of the Americas segment relative to the Europe and Asia opening solutions segments, where residential sales were also subdued.