By Christina Zander
STOCKHOLM--Shares in Swedish engineering company Sandvik rose
after the company said it had proposed Johan Molin, the current
chief executive officer of lock maker Assa Abloy, as chairman, as
investors hope he will help boost the company's profits.
The move is seen as signal that change is coming to Sandvik, a
maker of industrial tools, which has developed largely sideways in
the last decade. Sandvik's profitability has been hit by low demand
in the mining sector, and cost saving measures have so far done
little to lift margins.
"Johan Molin is the CEO in Sweden who instills the greatest
confidence in investors," said Daniel Schmidt, an analyst at SEB.
"With him Sandvik gets a real doer."
Mr. Molin has been CEO of Assa Abloy, since 2005 and during that
time operating profit has more than doubled from 4.08 billion
Swedish Kronor in 2005 to SEK9.23 billion in 2014.
Meanwhile, Sandvik's operating profit was SEK10.12 billion in
2014, compared with SEK9.53 billion in 2005. In the same period,
Sandvik's main competitor, Atlas Copco, managed to lift its
operating profit to SEK17.00 billion from SEK9.40 billion.
At 1039 GMt shares traded up 5.8% at SEK104.40.
Write to Christina Zander at christina.zander@wsj.com