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Year-end report 2010

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Magnus Yngen, President and CEO:
”Demand recovered during the year and we strengthened our market positions for outdoor products in Europe and for Construction. After several years of decline, demand recovered also in the US. Despite the recovery, sales and profitability in the region were weak as we had significantly lower listings. For the Group, full-year operating income and margin were significantly above last year’s levels. Innovative new products and a strong focus on our dealer network were important contributors to the positive development.
Due to the seasonality of our operations, the fourth quarter accounts for a small share of annual sales and operating income and is mainly devoted to start-up of production for the next season. Although market conditions are improving, retailers were still cautious to build inventory in the fourth quarter.
In the fourth quarter, Europe & Asia/Pacific and Construction continued its positive development. For the Group, adjusted net sales increased five percent and operating income also improved.
We expect higher shipments to the trade in the first quarter of 2011, compared with the first quarter of 2010, due to improved listings and a continued focus on dealer sales. We also expect a continued recovery of end-user demand for forest, park and garden products as well as for construction products. Due to the strong SEK, we expect negative currency effects in 2011.”

Fourth quarter

  • Net sales increased to SEK 4,794m (4,732) and operating income improved to SEK -63m (-515).
  • Operating margin improved to -1.3% (-10.9).
  • Growth for Europe & Asia/Pacific and Construction offset lower sales for Americas.
  • Operating income and operating margin improved for all business areas.

Full-year

  • Strengthened market shares for park and garden products in Europe & Asia/Pacific and for construction products in North America.
  • Strong growth for dealer channel sales.
  • Net sales and operating income for Europe & Asia/Pacific and Construction increased, but decreased for Americas.
  • Operating income increased by 57% to SEK 2,445m (1,560).
  • Income for the period increased significantly to SEK 1,749m (903), or SEK 3.03 (1.64) per share.
  • The Board proposes a dividend of SEK 1.50 (1.00) per share.
  • Adjusted dividend policy: The dividend shall normally exceed 40% of income for the year
    (previous policy: 25–50%).

Telephone conference
A telephone conference will be held at 16:00 CET on February 23, 2011. To participate in the telephone conference, 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
– Bernt Ingman, Chief Financial Officer, +46 8 738 75 05
– 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 14:00 CET on February 23, 2011.

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