21
April, 2015
Kai
Wärn, President and CEO:
"Since
January 1, Husqvarna Group operates under a new brand-driven divisional
structure. The new organization shall be seen as a proactive measure to
position Husqvarna Group for the next phase 2016 and beyond, with a stronger
focus on profitable growth. In 2015 however, the main focus will remain on
operating margin recovery through the Accelerated Improvement Program (AIP).
Overall,
the year has started well for us. Group operating income increased by 22% to
SEK 1,112m (908), despite a currency adjusted sales decline of -3%. The
corresponding operating margin rose to 10.2% (9.4). Even if total sales
declined, the development in terms of divisional mix was positive. Sales
increased 9% in both of our higher margin forest and garden divisions Husqvarna
and Gardena.
Consumer
Brands’ sales were down by -21% predominantly reflecting a late start of the
season due to another cold winter in the U.S., and our ambition to prioritize
value before revenue. Construction was off to a slow start, mainly due to
external reasons, but sales gradually improved and ended at an increase of 2%
but with a significantly higher run-rate in March.
AIP
continues to deliver according to plan and the trend of improving gross and
operating margins for the Group remains. Margins were positively affected by
continued impact from the two main components in our improvement program;
Operational Excellence driven cost reductions and sales growth in our product
leadership areas - the latter having a favorable impact on the mix.
Some
of the progress was offset by unfavorable volume impact due to the lower sales
in Consumer Brands. On the other hand, income for the Group was supported by a
positive impact from changes in exchange rates, as currency hedges offset most
of the negative transaction effects.
The
recent currency movements have helped us short term, but the longer-term
impact, mainly referring to the strengthening of the USD, is expected to have a
negative impact. So whereas operating income and margin recovery have been
solid since the launch of the AIP program, additional improvement areas to
balance the negative currency impact have been identified, such as indirect
material and logistics as well as capacity and efficiency measures.”
First
quarter, January - March
- Net sales increased by 13% to SEK 10,928m (9,685). Adjusted for exchange rate effects, net sales decreased -3%.
- Growth for Husqvarna, Gardena and Construction, while Consumer Brands declined substantially.
- Operating income rose 22% to SEK 1,112m (908) Operational Excellence cost reductions and favorable divisional mix.
- Earnings per share increased to SEK 1.37 (1.08).
- Operating cash flow amounted to SEK -2,410m (-1,969).
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