YEAR-END REPORT JANUARY - DECEMBER 2022

Strong growth in the fourth quarter

Fourth quarter 2022

• Net sales increased by 26% to SEK 10,353m (8,234). Organic sales growth was 8%, changes in exchange rates contributed with 14% and acquisitions with 4%.
• Operating income was SEK -1,737m (-132) and the operating margin -16.8% (-1.6). Excluding items affecting comparability, operating income was SEK -13m (-180) and the operating margin -0.1% (-2.2).
• Items affecting comparability amounted to SEK -1,724m (48) and was mainly related to the acceleration of the strategic transformation announced in October 2022, see pages 9 and 18.
• Earnings per share before dilution amounted to SEK -2.44 (0.26) and earnings per share after dilution amounted to SEK -2.43 (0.26).
• Cash flow from operations and investments was SEK -2,845m (-6,420). Direct operating cash flow decreased to SEK -1,261m (-1,131), mainly due to increased receivables.
• Operating working capital/net sales was 30.6% (21.8).
• It was announced that CEO, Henric Andersson, is on a temporary leave to undergo medical treatment and Pavel Hajman was appointed acting CEO. Subsequently, it was announced that Henric is unlikely to return to active status as CEO. The Board has therefore initiated a process to identify a potential permanent successor.
• The Group announced a program for accelerating the Group’s strategic transformation, see page 9.

 
January – December 2022

• Net sales increased by 15% to SEK 54,037m (47,059). Organic sales growth was -1%, changes in exchange rates contributed with 9% and acquisitions with 7%.
• Operating income was SEK 3,043m (5,746) and the operating margin 5.6% (12.2). Excluding items affecting comparability, operating income was SEK 4,853m (5,684) and the operating margin 9.0% (12.1).
• Items affecting comparability amounted to SEK -1,810m (62), see pages 9 and 18.
• Earnings per share before dilution amounted to SEK 3.39 (7.76) and earnings per share after dilution amounted to SEK 3.38 (7.73).
• Cash flow from operations and investments was SEK -4,009m (-713). Direct operating cash flow was SEK -572m (3,651). The decrease was mainly related to increased net working capital.
• The CO₂ emissions across the value chain have been reduced by 32% (27) compared to the 2015 base line.
• The Board of Directors will propose a dividend for 2022 of SEK 3.00 per share (3.00) to the AGM.

Strong growth in the fourth quarter

“We delivered a solid result for the fourth quarter, which is seasonally the Group’s smallest quarter. Net sales for the Group increased 26%, of which organic sales growth was 8%. Growth was particularly strong in the robotic mowers and battery-powered product segments.

The Husqvarna Forest & Garden Division achieved organic sales growth of 15%, driven by a strong performance for robotic mowers in both the professional and residential segments. Organic sales growth in the Gardena Division was -11%, due to the continued impact of destocking among our retail partners during the end of the year. The Husqvarna Construction Division reported lower sales volumes and the organic sales growth was -1%.

Operating income for the fourth quarter, excluding items affecting comparability, amounted to SEK -13m (-180). The improvement was primarily driven by sales growth, favorable product mix and price increases, which offset higher raw material and logistics costs. Direct operating cash flow declined to SEK -1,261m
(-1,131). This was due to lower cash flow from changes in working capital, primarily from receivables. We are continuing our activities to reduce inventory levels during the upcoming gardening season.

Solid performance in a challenging environment

The year was dominated by geopolitical and macroeconomic concerns, as well as significant supply chain challenges. Against this backdrop, we delivered a net sales growth of 15%, of which organic sales growth was -1% for the year. Operating income, excluding items affecting comparability, was SEK 4,853m (5,684) and the operating margin amounted to 9.0% (12.1). Price increases offset higher raw material and logistics costs while lower volumes and cost inflation had a negative impact on earnings. The Board will propose to the annual general meeting an unchanged dividend of SEK 3.00 (3.00) for the year.

We are proud of the results the organization has delivered under Henric Andersson’s leadership. I would like to thank Henric, my colleagues and our business partners for a good cooperation and their hard work during the past year. Together, we have taken a number of important steps to build a stronger Husqvarna Group and lead the industry transition into low-carbon solutions. During the year, we have executed on strategic priorities and a program was launched during the fourth quarter to accelerate the Group’s transformation with increased investments in the value creation levers; robotic mowers, battery products, watering products and solutions for the professional market. In parallel, we are proactively reducing business in petrol-powered low-margin consumer product segments. Total yearly cost savings in the program will amount to SEK 800m, fully implemented in 2025, where then half of the cost savings will be reinvested into the sustainable value creation levers. The program is progressing as planned and we recognized SEK 1.8bn of related non-recurring costs during the fourth quarter.

Our electrification ambition is part of our sustainability agenda, which aims to consistently reduce our carbon footprint. To date, we have reduced CO₂ emissions (scope 1, 2 & 3) by -32% compared with the base year of 2015. The target is a -35% reduction by 2025.

I am honored by the interim task to lead our strong organization and execute on the strategy that was formed under Henric’s leadership. With a strong foundation and a sustainable, smart and connected product portfolio going into 2023, we are well positioned to continue to create value for our customers, shareholders, employees and the society.”

 

Pavel Hajman, acting CEO

 

Telephone conference

A telephone conference of the Q4 report hosted by Pavel Hajman, acting CEO and Terry Burke, CFO will be held at 10:00 CET on February 1, 2023.

To view the presentation, please use the link: https://husqvarna-group.creo.se/230201/

The dial-in to the telephone conference (in order to ask questions): +46 (0) 8 5051 0031 (Sweden) or +44 207 107 06 13 (UK). 
 

Dates for Financial Reports 2023
April 20        Interim report for January-March 2023
July 18         Interim report for January-June 2023
October 20   Interim report for January-September 2023
 

Contacts

Terry Burke, CFO and Executive Vice President, Finance, IR & Communication
+46 8 738 90 00

Johan Andersson, Vice President, Investor Relations
+46 702 100 451

Husqvarna AB (publ), P.O. Box 7454, SE-103 92 Stockholm
Regeringsgatan 28, +46 8 738 90 00, www.husqvarnagroup.com

Reg. Nr: 556000-5331
NASDAQ OMX Stockholm: HUSQ A, HUSQ B 


This report 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 07.30 CET on February 1, 2023.

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