BREAKING NEWS

BREAKING NEWS

Lock maker Assa Abloy's sales growth tops forecast

Lock maker Assa Abloy's sales growth tops forecast
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Ints Kalnins(Reuters)
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STOCKHOLM (Reuters) - Assa Abloy, the world's biggest lock maker, beat quarterly sales forecasts on Tuesday, boosted by strong demand for its electronic devices.

Its shares jumped more than 5 percent in early trading.

The Swedish firm also said that as part of an earlier flagged programme to integrate recent purchases, launched in the quarter, it would close about 50 offices and factories, outsource more activities and boost automation to make savings.

Fourth-quarter operating profit before restructuring and other one-off costs rose to 3.75 billion Swedish crowns (£315.2 million) from 3.36 billion crowns in the same period a year earlier, matching analysts' expectations.

Sales before acquisitions climbed 6 percent, beating analysts' average forecast of 4 percent and including a 30 percent jump for electronic locks, as well as double-digit growth in the Americas and Asia Pacific divisions.

Assa Abloy, which has more than doubled sales over a decade and outgrown rivals helped by acquisitions in a fragmented market, is betting on an accelerating shift from mechanical locks to hi-tech alternatives ranging from fingerprint scanners to smartphone-activated systems.

"Today, 30 percent of our sales are generated by electromechanical products," CEO Nico Delvaux said. "We are seeing gratifying improvements in both the commercial and residential segments."

Assa Abloy said sales in China, where it has for years faced headwinds ranging from slowing demand and troubles at acquired companies to higher metals prices, were good in the quarter. China is a relatively small market for the group, but one that is seen as key for growth.

The company predicted a pay-back time of less than three years for the new savings, against around three years before. It booked 1.2 billion crowns in costs for the programme in the quarter and will book the remaining 300 million this quarter.

The group proposed a dividend of 3.50 crowns per share, up from 3.30 crowns the year before and just below the expected 3.55 crowns.

(Reporting by Anna Ringstrom; Editing by Niklas Pollard and Mark Potter)

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