UPDATE 1-Ericsson says on track with cost savings, 5G picking up

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STOCKHOLM, March 28 (Reuters) - Swedish mobile telecoms equipment maker Ericsson is on track to reach its target of at least 10 billion crowns ($1.2 billion) of annual savings by mid-2018, its chief executive said on Wednesday.

Ericsson has made sweeping cost cuts and replaced much of its top management to try to turn around a business hit by competition from China's Huawei and Finland's Nokia , falling spending by telecoms operators and the hangover from a failed plan to diversify.

"We will reach the 10 billion well on time," CEO Borje Ekholm told reporters ahead of the firm's annual general meeting close to its north Stockholm headquarters.

Ekholm said Ericsson, which is waiting for demand for next-generation mobile networks to increase, was well-placed, having won around half of 5G contracts worldwide so far.

"We see a much faster acceleration for 5G than we thought earlier. Maybe not as fast in Europe, but incredibly fast in North America and Asia," he said.

The former boss of high-flying mining gear maker Atlas Copco , Ronnie Leten, is due to take up his post as Ericsson's chairman on Wednesday. The appointment of Leten, who succeeds Leif Johansson, has boosted investors' hopes of a recovery at the company.

Ekholm said the incoming chairman favoured decentralisation, clear accountability, and would aim to simplify how the company works.

"He is a great industry leader who will add a new approach to the firm," Ekholm said.

The fourth quarter of last year was Ericsson's fifth straight quarter of operating losses. It said in January the cost-cutting programme was saving around 6 billion crowns on an annual basis at that time.

The company has also pledged to deliver a gross margin of 37-39 percent and an operating margin of 10 percent by 2020. Its fourth quarter gross margin, excluding restructuring charges, was 30 percent, roughly unchanged from the third quarter.

($1 = 8.2887 Swedish crowns) (Reporting by Olof Swahnberg and Helena Soderpalm; Editing by Niklas Pollard and Mark Potter)