PRESS RELEASE
Stockholm, September 26, 2011
COMPANY UPDATE
Continued economic uncertainty
Husqvarna is a consumer oriented company in the discretionary capital goods industry, and has been negatively affected by the slowdown in the global consumer demand and the uncertain economic environment in combination with unfavorable weather.
Due to the demand situation, a hiring freeze has been implemented for the entire Group until further notice. The fourth quarter which normally represents a small volume for the company is expected to continue to suffer from poor economic conditions.
Confirming the outlook in the Q2 report
Confirming the outlook in the second quarter report 2011, the total Group net sales have declined. Sales for the third quarter are estimated to around SEK 6,200m (6,907), which is approximately 5% lower compared with the corresponding quarter 2010 adjusted for exchange rate effects.
Operating income for the third quarter, which due to normal seasonality represents only a small share of full-year earnings, is estimated in the range of SEK 100m (411).
Costs related to the production disturbances in Orangeburg amounts to approximately SEK 45m and costs related to the termination of the former CEO’s contract amounts to SEK 21m and are included in the estimated third quarter results.
As commented in the second quarter report, market demand weakened towards the end of the quarter. The weakness has continued. Operating income for the third quarter has also been impacted mainly by an unfavorable mix and higher costs.
Prepared for the 2012 season in North America
Extensive efforts to eliminate the supply chain disturbances in the Orangeburg production facility have progressed successfully. In order to ensure successful delivery of committed volumes, the ramp up of pre-season production has started earlier than previous year.
The Group’s product range listings with major retailers in the North American market for 2012, although not yet finalized, are projected to be unchanged versus 2011, however with a somewhat new balance among the different retailers.
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