Interim report January - March 2014

Kai Wärn, President and CEO:
“We are pleased to see that the first quarter performance is benefiting from the Accelerated Improvement Program and a good market demand. The program that was launched last year and which aims at substantially strengthening the profitability of the Group is delivering encouraging results. In particular, direct material costs have been reduced and the distinct focus on our premium brands and product leadership areas is beginning to have a positive impact.

From a market perspective, the year has started well in Europe, affected favorably by an early spring. Demand in North America developed positively, driven by retail inventory stock-up, despite another long winter across much of the region. Total currency adjusted net sales for the Group increased 7%, with higher sales in all business areas. Operating income rose 31% to SEK 903m – despite a negative currency development – and the operating margin increased to 9.3% (7.6).

Substantial profitability improvements were achieved in Americas. Direct material costs were reduced and the channel mix developed favorably, supporting a continued recovery of the operating income and margin to SEK 218m (142) and 4.8% (3.3) respectively. First experiences of the new organization, based on separate profit centers for retail and dealer operations, is reinforcing our view that this structure will be an important vehicle for further profitability improvements.

In Europe & Asia/Pacific, we are especially pleased with the product mix. Sales developed well for the prioritized areas, including robotic lawn mowers and watering products. Total sales for the business area rose 5% adjusted for currency, and operating income increased 22% to SEK 669m (550).

Construction reported another strong quarter with higher sales in all regions. The margin rose to 9.8% (6.5), leveraging primarily on a sales growth of 11%.

Going forward, we will continue the execution of the Accelerated Improvement Program. In addition, we are cautiously optimistic about the underlying demand.”

First quarter, January - March

• Net sales increased to SEK 9,685m (9,024). Adjusted for exchange rate effects, net sales increased 7%.
• Operating income rose 31% to SEK 903m (688), including negative foreign exchange impact of SEK -45m.
• Higher sales and operating income for all business areas.
• Operating income positively impacted by lower costs for materials, product mix and channel mix.
• Earnings per share increased to SEK 1.07 (0.81).
• The net debt/equity ratio improved to 0.73 (0.90).

Telephone conference
A combined press and telephone conference, hosted by Kai Wärn, President and CEO, and Ulf Liljedahl, CFO, will be held at Husqvarna’s office on Regeringsgatan 28 in Stockholm at 10:00 CET on April 24, 2014. To participate by phone, please dial +46 (0) 8 5052 0110 (Sweden) or +44 (0)20 7162 0077 (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 at www.husqvarnagroup.com/ir later the same day.

Contacts
Ulf Liljedahl, CFO, +46 8 738 94 42
Tobias Norrby, Investor Relations Manager, +46 8 738 93 35

This interim report comprises information which Husqvarna 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 April 24, 2014.

Husqvarna Group
Husqvarna Group is the world’s largest producer of outdoor power products including robotic lawn mowers, garden tractors, chainsaws and trimmers. The Group is also the European leader in consumer watering products and one of the world leaders in cutting equipment and diamond tools for the construction and stone industries. The Group’s products and solutions are sold via dealers and retailers to both consumers and professional users in more than 100 countries. Net sales in 2013 amounted to SEK 30 billion, and the Group had 14,000 employees on average in more than 40 countries.