INTERIM REPORT JANUARY - JUNE 2019
Stockholm July 16, 2019
Kai Wärn, President and CEO:
“We delivered a good performance during the second quarter. All divisions improved operating income, which for the Group increased by 10% to SEK 2,125m (1,925). Restructuring activities and efficiency improvements, as well as price increases were executed. Cost increases from tariffs and raw materials were balanced by positive currency effects. The improved operating result was despite a slow start of the lawn and garden season. Net sales for the Group decreased by 7% in the second quarter, adjusted for changes in exchange rates, whereof 4 percentage points were related to the exit of the Consumer Brands business.
The strong first quarter with high sell-in volumes followed by a slow start of the lawn and garden sell-out season in the second quarter resulted in lower net sales within the Husqvarna Division. However, operating income for the division increased by 5%, driven by price increases as well as continued efficiency and restructuring savings.
The Gardena Division had yet another solid quarter as retailers have been conscious to fully stock-up after the strong and extended season of last year. Operating income developed well due to strong product mix as well as efficiency and restructuring savings, and exceeded last year’s high reference.
The Construction Division delivered growth in the quarter, driven by a continued strong development in Europe. This growth combined with efficiency savings and price increases supported an increased operating income.
Since we initiated our restructuring measures last year and increased our focus on the profitable growth divisions, we have made significant progress. Our last 12 month operating margin amounts to 8.9%, increasing from 7.9% as at the end of 2018, excluding items affecting comparability. Operating cash flow in the first half year improved to SEK 2,519m (733), driven by higher operating income and positive changes from operating working capital compared to last year. To continue to execute on our profitability improvement trajectory, whilst investing in strategic growth initiatives, remains our top priority for 2019. We will continue to build on our strengths in prioritized customer segments and product categories.”
Second quarter 2019
- Net sales amounted to SEK 13,789m (14,270), corresponding to a decrease of 7%, adjusted for changes in exchange rates. Exit of Consumer Brands business had a negative effect of approximately 4 percentage points, adjusted for changes in exchange rates.
- Operating income increased by 10% to SEK 2,125m (1,925).
- Operating margin improved to 15.4% (13.5).
- Operating cash flow increased to SEK 3,959m (2,059).
- Earnings per share after dilution amounted to SEK 2.63 (2.41).
A combined press and telephone conference, hosted by Kai Wärn, President and CEO, and Glen Instone, CFO, will be held at Husqvarna Group’s office, Regeringsgatan 28, Stockholm at 10:00 CET on July 16, 2019. To participate, please dial +46 (0) 8 566 184 30 (Sweden) or +44 (0) 8 448 228 902 (UK) ten minutes prior to the start of the conference. Conference ID: Husqvarna or 9480637#. The conference call will also be audio cast live on www.husqvarnagroup.com/ir. A replay will be available later the same day.
– Glen Instone, CFO, Senior Vice President, Finance, IR & Communication, +46 72 716 5032
– Johan Andersson, Director, Group Corporate Communications and Investor Relations, +46 702 100 451
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 July 16, 2019.