Year-End Report 2017
Kai Wärn, President and CEO:
“Husqvarna Group ended the year with another quarter of improved earnings. The fourth quarter is seasonally the smallest in terms of sales and thereby operating income, normally showing a loss for the Group. The operating loss for the fourth quarter was reduced to SEK -70m (-108), despite higher investments in strategic growth initiatives, pressure from currency and higher commodity prices, which were offset by a favorable impact related to legal restructuring. Sales continued to develop strongly across our divisions in profitable growth. On a currency adjusted basis, organic net sales increased 14% in Husqvarna, 7% in Gardena and 8% in Construction. Consumer Brands reduced their operating loss in the quarter, despite a lower sales volume.
The Group’s development on a full-year basis was positive in several aspects. Most importantly, we are delivering on our goal to achieve profitable growth; growing net sales above the estimated market rate, improving the operating margin and becoming more capital efficient. Performance benefitted from good growth in key product areas such as robotic lawn mowers and battery-powered products in both Husqvarna and Gardena, and a successful geographic and channel expansion in Gardena. In the Construction Division sales were significantly above prior year as a result of organic as well as acquired growth. In total for 2017, net sales for the Group increased 7% adjusted for changes in exchange rates, operating income increased 18% to SEK 3,790m (3,218) and the corresponding operating margin rose to 9.6% (8.9). The Board of Directors proposes that the dividend for the year is increased to SEK 2.25 (1.95) per share, reflecting the financial development.
Just before the end of the year we signed an agreement to acquire the light compaction and concrete equipment business from Atlas Copco. This is another important step for us to build a strong position in the attractive market segment for concrete floors and surfaces. The acquired product range complements the previous acquisitions of HTC in floor grinding and Pullman Ermator in dust and slurry management, enabling us to offer a wider range of products to customers in this segment. In our quest to make the Construction Division a larger share of the Group, the three acquisitions will have increased sales in the division by approximately 30% when fully integrated.
Our profitable growth ambitions in Husqvarna, Gardena and Construction are on track and I expect another step forward for the Group in 2018 in terms of growth, market shares and improved results in these divisions. We will also continue our efforts to build a stable long-term platform for the Consumer Brands Division.”
Fourth quarter 2017
- Net sales increased to SEK 6,130m (5,768), corresponding to a currency adjusted* growth of 11%.
- Operating loss was reduced to SEK -70m (-108).
January – December 2017
- Net sales increased to SEK 39,394m (35,982), corresponding to a currency adjusted* growth of 7%.
- Operating income rose to SEK 3,790m (3,218) and the corresponding margin increased to 9.6% (8.9).
- Operating working capital* as a percentage of net sales improved to 25.5% (26.6).
- Earnings per share after dilution increased 26% to SEK 4.62 (3.66).
- The Board proposes an increase of the dividend to SEK 2.25 per share (1.95).
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 February 2, 2018. To participate, please dial +46 (0) 8 5069 2180 (Sweden) or +44 (0) 8 445718892 (UK) ten minutes prior to the start of the conference. Conference ID: Husqvarna or 91713464. The conference call will also be audio cast live on www.husqvarnagroup.com/ir. A replay will be available later the same day.
This press release contains insider information that Husqvarna AB is required to disclose under the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the contact person set out above, at 08.00 CET on February 2, 2018.
Jan Ytterberg, CFO, +46 8 738 90 77
Tobias Norrby, Investor Relations Manager, +46 8 738 93 35
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 2017 amounted to SEK 39bn and the Group has around 13,000 employees in 40 countries.