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2016-10-20

Husqvarna AB: Interim report January - September 2016

Kai Wärn, President and CEO:
"The development for the seasonally slower third quarter was generally
in line with expectations, with continued improvements in operating
income and margin. Successful execution of efficiency measures
continued to support earnings growth, offsetting unfavorable currency
impact and at the same time creating headroom for investments in
profitable growth initiatives in areas that will be key in the years
to come. Operating income for the Group increased to SEK 431m (405)
and the operating margin rose to 5.9% (5.5).

Sales in the Husqvarna Division increased 5% adjusted for currency,
with the European market maintaining its solid growth trend.
Operating income for the Division increased to SEK 368m (321) and the
margin rose to 9.8% (9.1), mainly driven by the volume increase and
operational improvements, however partly offset by adverse currency
impact and costs for growth initiatives. The downturn in sales for
the Gardena Division in the quarter was expected given the favorable
weather conditions last year in Central Europe, but was limited to
-6% following a successful launch of a new range of hand tools.
Operating income decreased to SEK 50m (113) mainly as a consequence
of the volume decline and a higher cost level due to the growth
initiatives. On a year-to-date basis Gardena has increased sales by
9% adjusted for currency, reflecting the success in terms of expanded
distribution and several new product introductions.

Cost reductions and efficiency enhancements in the Consumer Brands
Division are progressing according to plan, however somewhat
overshadowed by negative currency effects and the impact from lower
sales which decreased by 10% adjusted for currency. The seasonal
driven operating loss was reduced to SEK -80m (-119) and the margin
improved to -5.2% (-7.0).

The Construction Division continued to deliver higher operating income
and margin, despite a lower growth rate than in the previous
quarters. Sales were 1% higher adjusted for changes in exchange
rates, operating income increased to SEK 155m (144) and the
corresponding margin rose to SEK 14.9% (14.1).

The Group's financial targets for the coming years were communicated
at the capital market day in September. Following recent years' focus
and successful execution of the margin improvement, stronger emphasis
will be placed on profitable growth. The growth ambition is to exceed
the average industry by around 1-2 percentage points annually. Our
targets are to grow net sales by between 3-5% per year, to have an
average operating margin of at least 10% and to achieve an operating
working capital in relation to sales of below 25%. However, the
Consumer Brands Division will continue to have the operating margin
improvement as first priority."

Third quarter 2016

· Net sales amounted to SEK 7,349m (7,307). Adjusted for changes in
exchange rates, net sales decreased by 1%.

· Operating income increased to SEK 431m (405), despite unfavorable
currency impact of around SEK -60m, and the corresponding margin
increased to 5.9% (5.5).

· Net debt* decreased to SEK 6,454m (6,666) and the net debt/equity
ratio improved to 0.45 (0.50).

· Earnings per share after dilution increased to SEK 0.36 (0.34).
Telephone conference
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 October
20, 2016. To participate, please dial +46 (0) 8 5033 6434 (Sweden) or
+44 (0) 8444933800 (UK) ten minutes prior to the start of the
conference. The conference call will also be audio cast live on
www.husqvarnagroup.com/ir (http://www.husqvarna.com/ir). A replay
will be available later the same day.

Contacts
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. The
information was submitted for publication, through the contact person
set out above, at 08.00 CET on October 20, 2016.

Husqvarna Group
Husqvarna Group is a world leading producer of outdoor power products
for garden, park and forest 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 world
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 2015 amounted to SEK 36 billion and the Group has more than 13,000
employees in 40 countries.

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http://news.cision.com/husqvarna-ab/r/interim-report-january---september...
http://mb.cision.com/Main/996/2104759/577399.pdf

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