YEAR END REPORT 2018
Kai Wärn, President and CEO:
“The result for the seasonally small fourth quarter was in line with our expectations, impacted by the effects from the challenging conditions earlier in the year. Net sales for the Group, adjusted for changes in exchange rates, were flat at SEK 6,470m. Higher costs for raw materials, tariffs and logistics, as well as continued investments in our strategic growth initiatives had a negative impact on our results. In total, the Group's operating profit, excluding restructuring related expenses, amounted to SEK -282m (-70) in the fourth quarter.
We took several important strategic steps during 2018, building a strong platform for future profitable growth. We dissolved the Consumer Brands Division and kept the parts that have strategic relevance for the Group and integrated them into the Husqvarna and Gardena divisions. We have adjusted our manufacturing capacity and central resources to reflect exited business volumes, thus creating a less complex and more cost efficient and focused Group. Costs and savings for the restructuring are in line with our previously communicated levels. Our full attention is now on profitable growth opportunities in the Husqvarna, Gardena and Construction divisions in areas such as robotic lawn mowers, forestry, digitalization and battery-powered products.
For the full-year 2018 Group net sales increased by 2%, adjusted for changes in exchange rates, to
SEK 41,085m, while operating income, excluding restructuring related expenses, decreased to SEK 3,241m (3,790). The lawn and garden season was challenging. The negative effects of the late spring followed by a very warm, long and dry summer in Central and Northern Europe were substantial for the Husqvarna Division. In contrast, the dry weather increased demand for Gardena’s watering products, supporting an improved operating result. Operating income for the Consumer Brands Division decreased while the Construction Division reported higher operating results including good progress with our acquisitions. The Board of Directors proposes an unchanged dividend of SEK 2.25 (2.25).
For 2019, our top priority is to get back on the profitability improvement trajectory. We have a strong product portfolio going into the season, with exciting launches such as new robotic lawn mowers, watering systems, chainsaws and new solutions from the Construction Division. We have taken steps to increase prices to compensate both for higher raw material costs and for tariffs. In addition we will deliver the committed cost reductions related to our restructuring programme and will restore a balance between the internal efficiency and savings actions with our investments in profitable growth initiatives.”
Fourth quarter 2018
- Net sales amounted to SEK 6,470m (6,130). Currency adjusted* net sales remained unchanged.
- Operating income amounted to SEK -1,104m (-70) and to SEK -282m (-70) excluding restructuring related expenses of SEK -822m (0).
- Earnings per share after dilution amounted to SEK -1.61 (0.10).
January – December 2018
- Net sales amounted to SEK 41,085m (39,394), corresponding to a currency adjusted* increase of 2%.
- Operating income amounted to SEK 2,070m (3,790) and to SEK 3,241m (3,790) excluding restructuring related expenses of SEK -1,171m (0).
- Earnings per share after dilution amounted to SEK 2.12 (4.62).
- The Board of Directors proposes a dividend of SEK 2.25 per share (2.25).
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 February 5, 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 7996846#. 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 February 5, 2019.