Husqvarna

Improved operating margin and strong cash flow for the year

Fourth quarter 2023

• Net sales decreased by 17% to SEK 8,605m (10,353). Changes in exchange rates impacted with -1%. Planned exits of low-margin petrol-powered business impacted with -2%.
• Organic sales declined by 15%.
• Operating income was SEK -983m (-1,737) and the operating margin was -11.4% (-16.8).
• Excluding items affecting comparability, the operating income amounted to SEK -168m (-13) and the operating margin was -1.9% (-0.1).
• Items affecting comparability amounted to SEK -815m (-1,724), and was mainly related to the expansion of the Group’s cost savings initiatives, announced in October 2023 and a write-down related to the acceleration of the strategic transformation, announced in October 2022, see page 17.
• Earnings per share before dilution amounted to SEK -1.77 (-2.44) and earnings per share after dilution amounted to SEK -1.77 (-2.43).
• Cash flow from operations and investments amounted to SEK -743m (-2,845). Direct operating cash flow was SEK 523m (-1,261).
• Husqvarna Construction Division acquired Total Diamond Products, based in the UK, see page 8.

January – December 2023

• Net sales decreased by 1% to SEK 53,261m (54,037). Changes in exchange rates contributed with 5%. Planned exits impacted with -1%.
• Organic sales declined by 5%.
• Operating income was SEK 3,880m (3,043) and the operating margin was 7.3% (5.6).
• Excluding items affecting comparability, the operating income amounted to SEK 4,970m (4,853) and the operating margin was 9.3% (9.0).
• Items affecting comparability amounted to SEK -1,090m (-1,810), and was mainly related to the expansion of the Group’s cost savings initiatives, announced in October 2023 and a write-down related to the acceleration of the strategic transformation, announced in October 2022, see page 17.
• Earnings per share before dilution amounted to SEK 3.81 (3.39) and earnings per share after dilution amounted to SEK 3.81 (3.38).
• Cash flow from operations and investments was SEK 4,414m (-4,009). Direct operating cash flow was SEK 6,541m (-572).
• The CO2 emissions across the value chain have been reduced by -44% (-32) compared to the 2015 base line.
• The Board of Directors will propose a dividend for 2023 of SEK 3.00 per share (3.00) to the Annual General Meeting.

 
Improved operating margin and strong cash flow for the year

“During the year we continued to deliver on our strategy, reinforced our positions in key segments as well as achieved an improved operating margin and a strong cash flow.

Challenging market conditions in the fourth quarter
The fourth quarter was characterized by a continuous challenging market situation with lower demand. Group net sales declined by 15% organically and operating income, excluding items affecting comparability, amounted to SEK -168m (-13).

In the Husqvarna Forest & Garden Division, sales of professional robotic mowers and battery-powered products were strong. However, sales of petrol-powered wheeled products decreased significantly due to lower demand and that we proactively are exiting parts of this segment.

The Gardena Division delivered good growth in Europe, driven by the watering category, but sales in Orbit in North America declined. In the Husqvarna Construction Division, the performance was solid in emerging markets, however we experienced weaker development in Europe and in North America in the fourth quarter. We achieved an improved operating income and operating margin, excluding items affecting comparability, for both the Gardena and Construction divisions driven by solid execution of cost savings as well as operational efficiency measures.

Improved operating margin in all divisions for the year
For the full-year, Group net sales declined by 1%. The operating margin, excluding items affecting comparability, increased to 9.3% (9.0). This was driven by our cost savings program, which delivered SEK 380m as well as contribution from price increases and lower costs for logistics. We improved the operating margin for all three divisions. Direct operating cash flow increased to SEK 6.5bn (-0.6), driven by inventory reductions. The Board will propose to the Annual General Meeting an unchanged dividend of SEK 3.00 (3.00) for the year.

We are delivering on our strategic transformation
As part of our transformational journey, we are focusing on growing in the areas of robotic mowers, battery-powered products, watering and solutions for the professional market. During the year, we progressed on our operational ambitions, increasing sales of robotic mowers to SEK 8.1bn (6.3), our share of electrified solutions expanded to some 42% (34) of our motorized products sales, and the number of connected devices rose to 4.5m (3.6). With an increased focus and new innovations, we have strengthened our market positions in these segments compared to the previous year. These product segments have a high future growth potential and now account for a larger share of our net sales. The electrification ambition is the major driver to consistently reduce our carbon footprint. To date, we have reduced CO₂ emissions (Scope 1, 2 and 3) by -44% compared with the base year of 2015. At present, we have thus exceeded our target of a -35% reduction by 2025. Our commitment to reducing CO₂ emission is continuing, including our exploration of products using alternative fuels.

I would like to express my gratitude to all colleagues and partners for their hard work, exceptional engagement and contribution this year. We are dedicated to building a stronger Group while navigating through ongoing market uncertainties. We have cost savings and inventory management programs in place, and we are prepared for 2024, backed by a strong product lineup featuring many exciting innovative product launches.”

Pavel Hajman, CEO

 
Webcast presentation and telephone conference

A webcast presentation of the Q4 report hosted by Pavel Hajman, CEO and Terry Burke, CFO will be held at 10:00 CET on February 2, 2024.

To view the presentation, please use the link:
husqvarnagroup.creo.se/fa23e10e-c3d3-440d-8d99-8c463cbab7de

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 2024

April 18          Annual General Meeting 2024
April 24          Interim report for January-March 2024
July 18          Interim report for January-June 2024
October 23    Interim report for January-September 2024
 

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 07.00 CET on February 2, 2024.
 

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.