April 26, 2017 / 7:38 AM / a year ago

UPDATE 1-Assa Abloy Q1 beats forecasts on broad sales pick-up

(Adds detail, background, share)

April 26 (Reuters) - Sweden’s Assa Abloy, the world’s biggest lock maker, posted forecast-beating first-quarter profits and sales on Wednesday boosted by strong growth in the United States and other major markets, adding sluggish Chinese demand had stabilised.

* Q1 operating profit at Assa Abloy, which has been outgrowing rivals helped by acquisitions and a shift towards digital access systems, rose 16 pct yr/yr to 2.79 bln SEK ($318 mln) vs Reuters poll forecast 2.71 bln

* CEO Johan Molin on Q1 organic growth: “The mature markets continued to achieve a good performance, with strong growth in many of our key markets such as the USA, Scandinavia, Britain and Germany.

* CEO says “In China, where the trend has been very negative, we saw a stabilization of demand”

* Organic sales +6 pct vs yr-ago +3 pct, Q4 +1 pct, consensus +4 pct

* Organic growth at the Americas and Global Technologies divisions picked up to 7 pct and 9 pct after nearly flat sales in Q4

* Unexpected organic growth at the Asia Pacific division, which accounts for nearly a fifth of group turnover, +3 pct vs consensus -5 pct, with China sales unchanged

* Assa Abloy, whose biggest region by sales is Europe but which has a strategy to grow in emerging markets, struggled in China last year from soft demand as well as from revelations that acquired companies in China had inflated sales figures.

* Assa Abloy shares were up 0.1 pct at 0735 GMT

* Analysts said they had hoped for even better performance following unexpectedly strong reports this week from Swedish industrials such as Sandvik and Volvo

* Assa Abloy Q1 operating margin 15.4 pct vs mean forecast 15.5 pct

* YTD, shares in Assa Abloy, whose rivals include U.S. Allegion, are up 15 pct

* Assa Abloy said it had adjusted prices to compensate for greatly increased raw material costs in Asia Pacific. It had in February warned it would be tough to compensate in China in H1 for steel cost increases

* Assa Abloy did not comment in the Q1 report on the China fraud, for which it in Q4 booked a 300 mln SEK one-off cost Source text for Eikon: Further company coverage: (Reporting by Anna Ringstrom and Rebecka Roos, editing by Johannes Hellstrom)

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