Interim report January – March 2018
Kai Wärn, President and CEO:
“Cold weather delayed the start of the gardening season in Europe as well as in North America, resulting in low sell-through at our trade partners. Despite the weather issues, the three divisions in profitable growth mode continued their growth trajectory with higher operating income and margin at the same time as continuing to invest in growth initiatives. The Group operating income of SEK 1,373m (1,425) was slightly below last year as the Consumer Brands Division had a challenging start to the year. However, the operating margin for the Group remained on a healthy level of 11.2%.
Sales for the Husqvarna Division were unchanged adjusted for currency. Robotic lawn mowers and other battery-powered products continued to grow. From a regional perspective sales were higher in Europe while North America decreased. Operating income rose to SEK 1,070m (1,032) and the margin improved to 17.7% (16.8), positively impacted by currency effects and favorable mix, which partly was offset by higher costs for investments in profitable growth initiatives.
The Gardena Division is off to a good start due to geographic expansion, new product launches and growth in the online channel, all supporting the currency adjusted sales growth of 15%. Operating income increased to SEK 301m (251), mainly due to the strong volume development. The margin remained at 14.6% (14.6) as we continue to invest in strategic growth initiatives.
The 17% currency adjusted sales decline in the Consumer Brands Division was mainly related to the announced scale-back of sales to a major retailer in North America and cautious retail ordering in general. In addition to a low sales volume, an increasing headwind from higher commodity prices added further pressure on earnings and operating income fell to SEK -63m (68).
The Construction Division continues to focus on delivering organic growth* while at the same time integrating last year’s acquired entities. The total currency adjusted sales growth was 16% in the first quarter, of which 4% was organic growth*. Demand in Europe was strong while the U.S. renovation market was softer than last year. Operating income increased to SEK 158m (141) and the corresponding margin improved slightly to 11.9% (11.8).
Our profitable growth initiatives in Husqvarna, Gardena and Construction are on track and we have many new and innovative products in the market. We expect further progress as the gardening season gets going.”
January - March 2018
- Net sales decreased to SEK 12,303m (12,746), corresponding to a currency adjusted* decline of 1%.
- Operating income amounted to SEK1,373m (1,425).
- Operating margin remained unchanged at 11.2% (11.2).
- Operating cash flow* improved to SEK -1,326m (-2,137).
- Net debt* was reduced to SEK 9,198m (9,800).
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 24, 2018. To participate, please dial +46 (0) 8 503 364 34 (Sweden) or +44 (0) 8 444 933 800 (UK) ten minutes prior to the start of the conference. Conference ID: Husqvarna or 4697554. 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 and the Securities Markets Act. The information was submitted for publication, through the contact person set out above, at 08.00 CET on April 24, 2018.
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.