Interim report January - June 2016
Kai Wärn, President and CEO:
“The positive development continued in the second quarter, despite lower demand for lawn and garden products in North America, which was affected by unfavorable weather. Group operating income increased with SEK 54m to SEK 1,729m (1,675), including a currency head-wind of close to SEK -170m for the quarter, and the corresponding margin improved to 15.0% (13.7) The higher result was driven by a positive product mix as well as a successful execution of efficiency improvements.
Sales in the Husqvarna Division increased 3% adjusted for currency. Sales developed positively in Europe, primarily driven by a continued strong growth in the market for robotic lawn mowers, balancing the weaker demand in North America. Operating income increased to SEK 1,031m (1,001) positively affected by higher sales of robotic lawn mowers and operational improvements, which were partly offset by the adverse currency impact and additional costs for growth initiatives. The Gardena Division added another quarter of solid improvement following the strong first quarter, with sales growing 13% adjusted for currency. Growth benefitted from channel expansion as well as new product introductions such as the Gardena Smart Garden concept and mobile watering equipment. Operating income for the division rose to SEK 449m (397).
The turn-around of the Consumer Brands Division is proceeding according to plan. Ongoing operational improvements continue to support margin improvement through cost reductions and efficiency enhancements. However, the progress in the quarter was dampened by weather challenges in North America resulting in substantially lower retail sales, and the currency situation remained unfavorable. The operating margin improved to 5.5% (4.9) and operating income amounted SEK 147m (178).
The Construction Division continued its path of profitable growth, capitalizing on a market leading portfolio of products and services as well as investments in market and sales structure the recent years. Growth in the second quarter was 4% adjusted for currency despite a difficult market in the stone industry. Operating income rose to SEK 179m (160) and a corresponding margin of 16.2% (14.6).
The priority for the Group during the remainder of the year will be to offset the currency headwind and finance the profitable growth initiatives by operational improvements.”
Second quarter 2016
- Net sales amounted to SEK 11,504m (12,263), a decrease of -4% adjusted for changes in exchange rates.
- Operating income increased to SEK 1,729m (1,675), despite unfavorable currency impact of around SEK -170m, and the corresponding margin increased to 15.0% (13.7).
- Net debt* decreased to SEK 7,511m (8,146) and the net debt/equity ratio improved to 0.54 (0.63).
- Earnings per share after dilution increased to SEK 2.19 (1.98).
A combined press and telephone conference, hosted by Kai Wärn, President and CEO, and Jan Ytterberg, CFO, will be held at Husqvarna Group’s office, Regeringsgatan 28, Stockholm at 10:00 CET on July 15, 2016. To participate, please dial +46 (0) 8 5033 6434 (Sweden) or +44 (0) 8444933800 (UK) ten minutes prior to the start of the conference. The conference call will also be audio cast live on www.husqvarnagroup.com/ir. A replay will be available later the same day.
Jan Ytterberg, CFO, +46 8 738 90 77
Tobias Norrby, Investor Relations Manager, +46 8 738 93 35
This interim report comprises information which Husqvarna Group is required to disclose under the Securities Markets Act and/or the Financial Instruments Trading Act. It was released for publication at 08:00 CET on July 15, 2016.
Husqvarna Group is a world leading producer of outdoor power products for garden, park and forest care. Products include chainsaws, trimmers, robotic lawn mowers and ride-on lawn mowers. The Group is also the European leader in garden watering products and a world leader in cutting equipment and diamond tools for the construction and stone industries. The Group’s products and solutions are sold under brands including Husqvarna, Gardena, McCulloch, Poulan Pro, Weed Eater, Flymo, Zenoah and Diamant Boart via dealers and retailers to consumers and professionals in more than 100 countries. Net sales in 2015 amounted to SEK 36 billion and the Group has more than 13,000 employees in 40 countries.