Logitech CEO says big acquisitions unlikely as it targets sustained growth

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ZURICH (Reuters) – Logitech (LOGN.S) Chief Executive Bracken Darrell said large acquisitions were unlikely as the maker of gaming keyboards and wireless speakers forecast sales growth would slow next year.

FILE PHOTO: Chief Executive Bracken Darrell of the computer peripherals maker Logitech addresses the company’s annual news conference in Zurich, Switzerland April 26, 2017. REUTERS/Arnd Wiegmann

The Swiss-U.S. company on Tuesday said it expects to increase sales by a high-single-digit rate during its next financial year which ends in March 2019.

This would be a deceleration from the 12-14 percent rate Logitech said it expects for the year to March 2018.

“Our long-term business model is upper-single-digit growth so this is not really a change,” Darrell said.

“We guided 12 to 14 percent this year, we grew 15 percent last year, we grew 9 percent the year before that. We want to make sure we deliver sustained and predictable growth,” he told Reuters in an interview.

Darrell said he was not aiming low after the company twice lifted its profit and sales guidance for its 2018 financial year.

For its 2019 year Logitech wants to increased operating profit by 15 percent to a range of $310 million to $320 million.

Darrell has overseen a turnaround since taking over in January 2013 by speeding up the launch of new products and improving design.

Since the former Procter & Gamble (PG.N) and Whirlpool (WHR.N) executive took over, Logitech’s share price has increased by more than 400 percent. Its shares were up around 1 percent in Zurich by 1238 GMT.

He was confident particularly about the gaming category where Logitech makes high-speed keyboards for online gamers playing League Of Legends and other games.

“We have got more than enough hardware capability and we are adding software capability,” he said. “We have got the footprint globally to do it, along with the manufacturing and design capacity that is winning awards.”

The company would look at acquisitions, Darrell added, although large deals were unlikely.

“We look at everything. We look at hundreds of things every year, most of them are small technology bolt-ons.

“But I would say when you get to the really big numbers it drops the probability factor dramatically because there are so many factors involved.”

The company could also use more share buybacks in future, he said. Logitech is around $30 million into a $250 million repurchase scheme launched in March 2017.

Reporting by John Revill; Editing by Michael Shields