Interim report January - March 2017
Kai Wärn, President and CEO:
"The preseason sell-in to trade partners constitutes a good start of the year for the Group with a net sales increase of 7% adjusted for currency. Group operating income was 22% higher than last year, totaling SEK 1,425m (1,166) and the corresponding margin reached 11.2% (10.3). The execution of the profitable growth strategies in the Husqvarna, Gardena and Construction divisions are proceeding well. The Consumer Brands Division experienced a lower first quarter sell-in, impacted by a couple of larger retail customers adjusting their buying patterns to tighter just-in-time order scheduling. We view this as a periodization between quarters.
The improved operating income for the Group was mainly driven by higher volumes and a strong product mix development. Changes in exchange rates had a positive impact, however partly offset by increased raw material costs.
Sales in the Husqvarna Division increased 11% currency adjusted, with continued strong development of robotic lawn mowers and other battery-powered products. Operating income increased 24% to SEK 1,047m (844). In the Gardena Division sales rose 9% currency adjusted. Further geographical expansion and new sales channels as well as a large number of new product introductions impacted sales positively, even compared to a strong first quarter last year. Operating income increased 11% to SEK 251m (226). Net sales in the Consumer Brands Division were 4% lower adjusted for currency, which impacted operating income and margin negatively.
During the quarter the acquisition of Pullman Ermator was completed. It is an exciting step in the Construction Division’s ambition to build a market-leading position and take share in the attractive concrete surfaces and floors market. In the second quarter we also expect the acquisition of the floor grinding solutions market leader HTC to be finalized, which will further improve our product portfolio and ability to better serve our customers in this important area. Sales in the Construction Division grew 18% in the first quarter adjusted for currency, of which 9% was attributable to acquisitions whereof mainly Pullman Ermator. The strong sales growth impacted operating income positively, which increased 59% to SEK 141m (89) and the operating margin increased to 11.8% (9.2).
To support our profitable growth journey, we continue to invest in strategic growth initiatives along with efforts to improve efficiency. Focus for the second quarter, following the successful sell-in phase, will be to support our trade partners to deliver an equally positive sell-through."
- Net sales increased to SEK 12,746m (11,361), corresponding to a currency adjusted* growth of 7%.
- Operating income increased 22% to SEK 1,425m (1,166), corresponding to a margin of 11.2% (10.3).
- Changes in exchange rates, net of raw material costs, impacted operating income by around SEK 80m.
- Operating working capital as a percentage of net sales for the last twelve months was 28.1% (27.1).
- Earnings per share after dilution increased 30% to SEK 1.72 (1.32).
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 April 21, 2017. 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 press release contains insider information that Husqvarna AB is required to disclose under the EU Market Abuse Regulation. The information was submitted for publication, through the contact person set out above, at 08.00 CET on April 21, 2017.
Husqvarna Group is a global leading producer of outdoor power products and innovative solutions for forest, park and garden 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 global 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 2016 amounted to SEK 36bn and the Group has around 13,000 employees in 40 countries.