Assa Abloy Q1 pretax up 14 pct on global tech growth, but misses forecast UPDATE

Assa Abloy Q1 pretax up 14 pct on global tech growth, but misses forecast UPDATE

	Published : Wed, 25 Apr 2007 12:10 By : Agencies Print this Story

(updating with Q1 performance at Global Tech and Entrance Systems divisions'

STOCKHOLM (Thomson Financial) - The world's largest lock manufacturer, Assa Abloy AB, said first quarter pretax profit rose 14 pct from a year earlier driven by good demand for its Global Technologies products and acquisitions.

The pretax result of 1.101 bln skr was however marginally short of analysts forecast of 1.127 bln, as recorded by SME Direkt.

Total sales increased 8 pct to 8.227 bln skr, in line with analysts forecasts. Organic sales growth was 8 pct, down from 12 pct a year earlier. Newly acquired companies, such as Fargo, Adams Rite and Pemko contributed 6 pct to sales.

Adverse currency changes had a negative effect on sales of 461 mln skr.

Operating margin rose to 15.7 pct from 14.5 pct.

The company said it expects organic sales growth to continue at a 'good rate', and for its operating margin and operating cash flow to 'develop well'.

'Long term, Assa Abloy expects an increase in security-driven demand. Focus on end user value and innovation as well as leverage on Assa Abloy's strong position will accelerate growth and increase profitability,' the company said.

Sales at the company's Global Technologies division, which sells smart card and other high tech security products, grew 23 pct to 1.167 bln skr, with organic growth of 13 pct. Operating profit at the division increased 22 pct to 163 mln skr, although operating margin dipped to 14.0 pct from 14.1 pct.

'Demand for the division's products is good on all major markets. The operating margin is being temporarily impaired by market investments and planned changes in acquired units, primarily Fargo,' the company said.

Sales at Entrance Systems rose 8 pct to 668 mln skr, with organic growth of 7 pct. The company said demand for the division's products 'continues to be good on all major markets', but that growth was strongest in North America.

simon.richardson@thomson.com

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