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STOCKHOLM, April 26 (Reuters) - Assa Abloy, the world’s biggest lock group, plans to cut costs further from later this year after posting first-quarter profits that roughly matched expectations.
The group, which has more than doubled sales over a decade and outgrown rivals thanks to acquisitions in a fragmented market, flagged in February it would present new savings this year as it integrates recent purchases.
The Swedish group said on Thursday the programme would run over three years and costs would be in line with previous programmes, with a payback time of around three years.
Assa Abloy expects a pick-up in sales growth this year as customers increasingly switch from mechanical locks to hi-tech alternatives ranging from fingerprint scanners to smartphone-activated systems.
New CEO Nico Delvaux, who joined Assa Abloy from Finnish mining equipment group Metso, said on Thursday he planned to further develop Assa’s strategy with focus on product leadership, cost efficiency and a strong acquisition agenda.
“I am confident that we will create new business opportunities through our new products and solutions, and that we have seen only the initial phase of the market transition and technology shift from mechanical solutions to digital, connected products and services,” he said.
Quarterly operating profit was 2.83 billion crowns ($331 million) against a year-ago 2.79 billion and a Reuters poll forecast of 2.86 billion.
Organic sales growth slowed to 4 percent from 6 percent a year earlier, topping a forecast 3 percent. The group said high demand for electromechanical locks and for access control systems boosted sales.
Jan Molin, who stepped down in March after 12 years as CEO, in February predicted core group sales growth in the first half of 2018 above the 4 percent achieved a year earlier.
Before his time at Metso, new CEO Delvaux headed the compressor technique business at Sweden’s Atlas Copco , where both Molin and Assa Abloy’s Chairman Lars Renstrom held executive positions earlier in their careers. ($1 = 8.5475 Swedish crowns) (Reporting by Anna Ringstrom Editing by Niklas Pollard/Keith Weir)