Interim report January - June 2011

Hans Linnarson, Acting CEO and President:
”For the second quarter, reported sales for the Group decreased eleven percent, but adjusted for exchange rates the decrease was one percent. For the first half-year sales adjusted for exchange rates increased by two percent. Industry demand decreased inNorth Americaand together with the supply chain challenges in the Orangeburg factory sales were affected negatively. The European market started strongly but slowed down towards the end of the second quarter. Adjusted sales for Europe & Asia/Pacific increased four percent for the second quarter, which was in line with the total market. For Construction the positive development continued and market shares increased.
The production disturbances continued to hamper the output from Orangeburg as well as resulting in higher costs. As a result of measures taken, the going cost rate directly related to the disturbances gradually decreased. In the first quarter, the costs were approximately SEK 150m, whereof the majority in March. The total amount for the second quarter was SEK 180m.
Our highest priority going forward is to secure deliveries to our customers for the 2012 season in a timely manner. Further measures will be taken within the Orangeburg factory which is expected to result in SEK 100 - 150m higher costs during the remainder of 2011. We are also planning to increase our pre-season production.
As production capacity and flexibility to guarantee the highest delivery performance will be prioritized, we will also review the pace of our ongoing restructuring projects. Savings from manufacturing footprint restructuring will therefore be delayed.
The Group’s operating income declined in the second quarter. Higher selling prices and a favorable mix were not able to offset negative currency effects, costs related to the production disturbances, higher input costs and marketing expenses.”

Second quarter

• Net sales amounted to SEK 10,179m (11,457) and operating income to SEK 1,012m (1,319). Income for the period amounted to SEK 681m (936), or SEK 1.18 (1.62) per share.
• Net sales and operating income, adjusted for exchange rate effects and items affecting comparability, decreased by 1% and 23% respectively.
• Changes in exchange rates had a negative year-on-year effect on Group operating income of approximately SEK -170m.
• Costs related directly to production disturbances inNorth Americaamounted to approximately SEK 180m.
• Adjusted sales increased for Europe & Asia/Pacific and Construction but declined forAmericas.
• Hans Linnarson, Head of Sales Europe & Asia/Pacific, was appointed acting CEO and President.

Telephone conference
A telephone conference will be held at 11:00CET on July 19, 2011. To participate by telephone, please call +46 (0)8 5052 0110 or +44 (0) 20 7162 0077 ten minutes prior to the start of the conference. The conference call will also be audio cast live. To participate in the audio cast, log on to www.husqvarna.com/ir. A replay of the telephone conference will be available at www.husqvarna.com/ir.

Contacts:
Ulf Liljedahl, CFO, +46 738 84 42
Boel Sundvall, SVP Corporate Communications & IR, +46 8 738 70 18
Tobias Norrby, Investor Relations Manager, +46 8 738 83 35
Husqvarna Press Hotline, +46 8 738 70 80

This interim report comprises information which Husqvarna is required to disclose under the Securities Markets Act and/or the Financial Instruments Trading Act. It was released for publication at 08:00 CET on July 19, 2011.