HID Significant Sales Decline In Physical Access Control (Q2 2024)
Assa Abloy reports a "significant" sales decline in HID's PAC business shortly after a round of layoffs.
In this note, we examine HID's performance amid its parent Assa Abloy's organic decline and inorganic growth through Assa ABloy's Q2 2024 earnings call and financial deck.
For background, see:
- Layoffs At HID
- Assa Abloy Revenue Declines Organically, Grows Acquisitions Q1 2024
- HID Sales, Growth, Profits, And Backlog Analyzed
***** *** ******* ****** **** ** resolved, *** ********** *******, ** * Deutsche ****** ****** *** ** *** call, ** ************* ******* **** ***'* physical ******** ********, ** ***** **** Assa's *** ******** **** **** "**** not ******** *****."
**** **** ********* ** ****** ***-******-***** revenue ****** ** **** **** *** backlog **********. ******* **** ******* **** will ** ********* ** **** **** the ******* ** ***'* ******** ****** and ******* ***********, *.*., **** ********, are ** *** *** ****** * deeper ******.
"Significant ***** *******" ** *** *** ******** ****** *******
**** *****'* ****** ************ *******, ***** HID *******, *** * *% ***** decline, ************ *********** ** * "*********** sales ******* ** ******** ****** *** Physical ****** *******." ********* ** *** company's ** ************ **** *************:
**** ***** ********** *** ******* ** backlogs *** * "********* ********** **** last ****" ** *** *** *** physical ****** ******* (****) ********:
** ** **** ** ** *** global ********* *** ***** **** ****** Tech, ******* ***** ***** *% ***** we **** **** ****** ***** ****** in ****** ********* ** **** ** not *** *********, ***where ** **** **** *** ** *** ****** ** *** **** ******** ** ********* *******, *** ********* ********** **** **** ****. [Emphasis added]
Backlogs ** *** **
**** *****'* ******* ***** ** ***** America **** **** *%, ***** *** company ****** ** ******** ** *** cards *** *******, ***** ** **** was * "********* **********" ** **** year ** ************ *** ********* ****** up ********* ***** ********* *** ****** down **** ****:
***** ******* ***** *%, ***** ** mainly ****** ** *** ********* ********** between **** *** *** ***** *** readers ** *** **** ******* * year ***. *** ******** ** *** two ***** ** ********** **** ************* components, ******** ** * **** *******, and **** ******* ** ******* ** that ******* **** ****, *** *********, difficult ********** **** *******.
Banker ******** ** "*************" ***********
***** **** ***** ******* ** ********, a ******** ****** ********** ****** **** on ****, ******* *** *********** *************, asking ***** *********** ******** *** ***** to ******** ******** ****** ******* ******:
****** **** **** *** ****** ** questions. *** ***** *** ** ** Global ****. ** ** *** ***** the ******** ****** ****** **** **** year's *********** ******* *********, ***** * think *** ******** ****** *%, ***underlying *********** ** ****** ************ [***** *** ** **** **] ** ***** ************* and it continues to underperform the growth that we currently see in the EMEA or in the Americas divisions. So, any particular reason why that is the case? I mean, perhaps ***** ** * ******* *********** *********. And is there any specific plan ** *** *** ******** ****** *** ******** ****** ******* specifically? [Emphasis added]
"Not ******** *****"
** ********, **** *****'* *** ****** they *** "*** ******** *****" **** HID's *********** ***** ** *** ****** in ***** ******** ****** ****** ************:
** ********* * *** **** ** the ********** ******* ** *** **** backlog. *** * *****it's **** ** *** **** ** *** *** ******** ***** **** *** *********** ** *** ***** ******** ***** ** ***, in particular. [Emphasis added]
* *****, ** ****** *********, ** see **** ******, **** *********** ** the ********* *********.It's **** ** *** ***** ******** ***** ** ***. [Emphasis added]
**** ***** ******* ******** ** *** details ** *** ******* ********* ***** HID's ************ *********** ** *** **** year:
***** ***, ** ******, ****** ******** where ** **** *** ****some ** *** ************ *** *********** *** *** ******* * ****** *** ** ********* ***** ***** ******. But I think where we also can do better internally to get better growth and better performance in those other business areas is something we are working on. But again, the main effect is the PACS backlog. [Emphasis added]
******* ******* *** ******* ****** ** backlogs, **** ***** ************ **** *** "could ** ****** **********" ** ***** growth, ********* *** ****** *******'* *********** for ****** ********** ****** ***.
Expect ******** ****** ******* ******** ** "*********" ** ****
*** ******* ******* **** ******* ** continue **** ** **** *** *********** seeing *** ******** ****** ******* ******** "normalize" ** ** ****:
**** **** ******** * ****** *** now, **** ** *** ********* ** Q3 *** **** ******* *** *** of **. ** **, ** ****** then *** ***** * **** ********** business *** **** *** ***.
** *** **** *** ********* ** the ******* **** ******** **** ********** continue ** **, *** ****, ******* Q4, ** ****** ***** ** *** improvement ******* ** *** ******** ** the ****** ***** ******** ***.
****, ********* ** *** ****** ** Q3, *** **** ***** **** **** out, *** ** **** *** **** to ******- **** ****** ****** ** Global **** ******* *** ****** **** of ** *** ********** ** **.
********** *** *** ******** ** *********, Assa ***** **** ********* *** ***** have **** "********** ************ ** ***********":
** *** **** **** ********** *********** again ** *** *********** ******** ** the *****.
"Mid-Single-Digit ******" ***** *************
***** **** ***** **** ** ** difficult ** ******* *** *** ******* issue **** ******* *** ** *** complex ******** ** ******* ******* ******** and ******** *****, ** ******* "***-******-*****" growth ** *** ******** ****** ******* (PACS) ******** **** *** ******* ** stabilized:
*** **** ** ******** ** *** side ** *** **** ** *** backlog *** ********. *** **** **** a ****** *** ** ** ******** ofyour ******* ********' ***** *********. And, of course, delivery ***** **** **** ****, **** ********* *** ***** ***, a year ago, and today. So therefore, it's not an exact science, but we still believe that once the backlog is stabilized on the PACS, on the cards, and on the readers, we will go back to a normal organic growth rate, which has been historically prior to this phenomenon, around mid-single-digit ******, I could say. [Emphasis added]
**** ***** ***** ********** **** ** believes **** *** ******** ****** ******* (PACS) ******** *** * ***-******-***** *** rate ***** ******** ********* ** ** of **** ****:
*** * ***** ** **** **** towards *** ****** **** ** **** quarter, **, *** **** ********** ** Q4, ** *** *********** *** ********* are *******. *** *****, ** *** still ********* **** *** ********** ******** of ****, ***** ** *** ******** in ***, *** ****, ***'* ***, mid-single-digit ******* ****** *** ****.
Global **** ********* ****** ****
*** ******* ** *** ******** ****** control (****) ******** *** *** ******** the ******* ********* ****** ** **** Abloy's ****** ************ ******** ******* ******** access ******* ** * ******-****** ********* within ****** **** **** ***** ******* segments **** ********* **:
****** ****, ** ********* ****** ** 15.8%, ********* ******* ** *** ***** top-line *** **** ********** **** *** mix ** *** ***** **** ** had **** ******* ** **** **** lower ******* *** **** **** **** with **** ****** *******.
*** ******* *** ******* *** *** and ******** ****** *******'* ****** ******, especially ** *** **, ****** ******** the ******** ****** ** ***** ******* within *** **** ** ** ****** maintain *** ******:
** *** **, ** ******** ** have *** ******* *********, ***** ****** help.
*** **** ** ** ****** ****** Technologies' ********* ****** ** **%+, *** historical ******, ** ******** ********** ***** this ****. **** ***** **** *** investors:
** **** ****** **** **** ** want ** **** ****** **** ********* above **%, ** **** **% ** 18% *****. ** **** ** ******** occasions, **** ** *** **** ******** about **%, **%. **** **** *** be *** ****, *** ** ********** have *** ******** ** ***** ** above **%. *** **** ****** *********, that ****** ** *** ****.
HID ****** ********** ******* ******
******* *** ***** ******** *** ** backlog ************, **** ***** ***** ********* HID's ****** ********** **** ****** ****** / ******* ******* ** *** **** product ****** ** ********* ****** *** Q2 **** ******** ****:
***'* ****** *********** *** *** **** available ** ****** ******, *** *********, allowing ***** ** ****** ******** ****** and ******* *** *** **** **** Apple ******* *** **** **** ******* devices.
Compensating ***** ******* **** ***********
**** ***** ********* *** ******** ** compensating *** ******* ******** **** ************. It **** ** ************ ** *** first **** ** **** ****, ** par **** *** *&* **** ** 2023, ***** ** **** ** ************ in *** ****:
****** **** ***** *** ********* ** Global ************ *** ** *********** ******** in *** *** ******** ******** ****** control (****) ** **** ** *** severe ******* ** *** ******* ********* Business ** *****, *** ******* **** it "***************" *** -*% ******* ***** decline **** *** **% ********* ****** in ** ****:
Broader ******
*** *** *** * *********** **** year, **** ******* ******, **** **:
- ****************** *** ******** ** * ** firm****** ** ***** ** *****.
- ***'* "***** ********* *******"*** ********.
- ***'* ******* ******** **** ****** **** "Red" ***** ***********
- ********* ******** ** ***'* ****** ** Discovered, ** ** ******** ** *** CON **
***** **** ****, ********* ******* **** better **** *** ***** ********** ****** HID ****** *** *******.
***** *** ** **** ** ********* it **** ****** **** *** ******** access ******* ***** ** ** * state ** **** ** *** ******.
***** *** ***** ** **** ** see ******* *********** ******** *************. ******* Zero, ********* ******** ** ****** (****** I ***** ** ***** **** ** IPVM).
*'** *** * ************ **** ****** where * ****** *** *** ************ of *********, ** ******* ** *** facial *** *****, ************, ****** *** to *** **** **** *** *** sheer ****** ** ***********. ***, *'* certainly **** ** *** ************* **** I ** ***** *** **** * single, ** * *********** **, ********** technologies ***** ****** **********.