Husqvarna Group: INTERIM REPORT JANUARY - JUNE 2023
Good performance in the gardening seasonSecond quarter 2023
- Net sales increased by 7% to SEK 16,976m (15,792). Organic sales were relatively unchanged and changes in exchange rates contributed with 7%.
- Operating income was SEK 2,101m (2,065) and the operating margin was 12.4% (13.1). Excluding items affecting comparability, the operating income amounted to SEK 2,313m (2,075) and the operating margin was 13.6% (13.1).
- Items affecting comparability amounted to SEK -212m (-10), and was related to the acceleration of the strategic transformation, announced in October 2022. This includes the consolidation of the North American manufacturing footprint (see page 9).
- Earnings per share before dilution amounted to SEK 2.47 (2.48) and earnings per share after dilution amounted to SEK 2.46 (2.47).
- Cash flow from operations and investments amounted to SEK 4,432m (699). Direct operating cash flow was SEK 4,443m (1,803).
- Pavel Hajman was appointed CEO of Husqvarna Group.
- Net sales increased by 8% to SEK 34,143m (31,477). Organic sales growth was 1% and changes in exchange rates contributed with 7%.
- Operating income was SEK 4,465m (4,224) and the operating margin was 13.1% (13.4). Excluding items affecting comparability, the operating income amounted to SEK 4,723m (4,265) and the operating margin was 13.8% (13.5).
- Items affecting comparability amounted to SEK -258m (-41), and was related to the acceleration of the strategic transformation announced in October 2022.
- Earnings per share before dilution amounted to SEK 5.37 (5.35) and earnings per share after dilution amounted to SEK 5.35 (5.34).
- Cash flow from operations and investments was SEK 5,020m (-520). Direct operating cash flow was SEK 4,204m (351).
Good performance in the gardening season
"We delivered a good result during the quarter. Net sales increased by 7%, of which organic sales were relatively unchanged. In particular, the robotic mower and battery-powered product categories achieved a strong growth. Our watering category returned to growth in the latter part of the quarter.
The Husqvarna Forest & Garden Division delivered organic sales growth of 3% with good demand for robotic mowers for both residential and professional customers. New products, such as Husqvarna Automower® NERA, our first robotic mower with virtual boundary technology for the residential market, have successfully been launched in the market. The division's range of battery-powered products has been expanded and the category grew strongly. The demand for Gardena Division's watering products grew gradually during the quarter. The division's organic sales declined by 2% but operating income improved significantly. Organic sales for the Husqvarna Construction Division declined by 5%, but with diligent cost control and operational resilience the operating income increased for the division.
Group operating income, excluding items affecting comparability, increased by 11% to SEK 2,313m (2,075). The increase was driven by price increases, improved product mix and lower costs for raw materials and logistics. Direct operating cash flow improved by SEK 2.6bn to SEK 4,443m (1,803) as a result of higher operating income and strong cash flow from changes in inventory and accounts receivables. Given the continuing uncertain macroeconomic environment our focus remains on further cost efficiency, improved cash flow and operational flexibility. We will continue to reduce inventory levels for the remainder of the gardening season.
We are executing our strategic transformation
I am honored to be appointed CEO of Husqvarna Group, and I am fully committed to the continued execution of our successful strategy. We have an exciting journey ahead where we are building a stronger Group by investing in the key focus areas of robotic mowers, battery, watering and solutions for the professional market. With this, we are also driving the transition to sustainable solutions and a lower carbon footprint. We are proactively exiting sales of petrol-powered, low-margin consumer business, primarily wheeled products and rightsizing our Orangeburg manufacturing plant in North America.
We are also consolidating our global manufacturing footprint, with the discontinuing of the handheld production facility in Nashville, AR, U.S., (read more on page 9).
The Group's electrification ambition aims to consistently reduce our carbon footprint. To date, we have reduced CO₂ emissions (Scope 1, 2 and 3) by -38% compared with the base year of 2015. We are currently exceeding our target of a -35% reduction by 2025.
To summarize, we have delivered a good performance in the gardening season and taken additional steps on our ongoing transformation journey. With an innovative product portfolio and dedication to customer focus, we have strengthened our global leadership and remain committed to creating sustainable value for all stakeholders."
[image] Pavel Hajman, CEO
Webcast presentation and telephone conference
A webcast presentation of the Q2 report hosted by Pavel Hajman, CEO Terry Burke, CFO will be held at 10:00 CET on July 18, 2023.
To view the presentation, please use the link:
The dial-in to the telephone conference (in order to ask questions):
+46 (0) 8 505 100 31 (Sweden) or +44 207 107 06 13 (UK).
Dates for Financial Reports 2023
October 20 Interim report for January-September 2023
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 07.00 CET on July 18, 2023
Factors affecting forward-looking statements
This report contains forward-looking statements in the sense referred to in the American Private Securities Litigation Reform Act of 1995. Such statements comprise, among other things, financial goals, goals of future business and financial plans. These statements are based on present expectations and are subject to risks and uncertainties that may give rise to major deviations in the result due to several aspects. These aspects include, among other things: consumer demand and market conditions in the geographical areas and lines of business in which Husqvarna operates, the effects of currency fluctuations, downward pressure on prices due to competition, a material reduction in sales by important distributors, success in developing new products and in marketing, outcome of product responsibility litigation, progress in terms of reaching the goals set for productivity and efficient use of capital, successful identification of growth opportunities and acquisition objects, integration of these into the existing business and successful achievement of goals for making the supply chain more efficient.