HUSKVARNA, Sweden, July 15, 2022 /PRNewswire/ —
A quarter marked by persistent constraints on the supply chain
Second quarter 2022
- Net sales increased 8% to SEK 15,792m (14,614). Organic growth was -7%, exchange rate fluctuations contributed 8% and acquisitions 8% (growth figures are rounded).
- Operating profit was SEK 2,065m (2,659) and operating margin was 13.1% (18.2). Excluding items affecting comparability, operating income was SEK 2,075m (2,645) and the operating margin was 13.1% (18.1).
- Items affecting comparability amounted to SEK -10m (14), and related to restructuring costs in Russiasee page 19.
- Earnings per share before dilution amount to SEK 2.48 (3.49) and diluted earnings per share amount to SEK 2.47 (3.48).
- Cash flow from operations and investments was SEK 699m (3 174), the decline was mainly related to lower operating profit and higher inventories. Direct operating cash flow was SEK 1,803m (2,875).
- Operating working capital / net sales amounted to 25.7% (21.1).
- Husqvarna Acquired group Hegera leading company specializing in professional diamond tools for the European construction market.
January – June 2022
- Net sales increased by 10% to SEK 31,477 million (28,644). Organic growth was -5%, exchange rate variations contributed 7% and acquisitions 8%.
- The operating result was 4,224 million Swedish crowns (4,952) and the operating margin was 13.4% (17.3). Excluding items affecting comparability, the operating result amounts to 4,265 million SEK (4,938) and the operating margin to 13.5% (17.2).
- Items affecting comparability amounted to a net amount of -41 million SEK (14), see page 19.
- Earnings per share before dilution amount to SEK5.35 (6.39) and earnings per share after dilution amount to SEK 5.34 (6.37).
- Cash flow from operations and investments was SEK -520 million (4,723). Direct operating cash flow was 351 million Swedish crowns (3,018).
A quarter marked by persistent constraints on the supply chain
“Overall demand for Husqvarna Group products and services was good in the second quarter. Sales of professional products in the Husqvarna Forest & Garden division, as well as sales in the Husqvarna Construction division were good. The supply chain situation improved during the quarter and sales rose sharply. COVID in China. This affected our ability to meet customer demand and sales declined significantly. The Group’s organic growth was -7% (14) and the equivalent growth excluding robot mowers was -1% in the second quarter.
Organic growth was -8% for the Husqvarna Forest & Garden division and -10% for the Gardena division in the second quarter. Sales of both divisions were penalized by the robotics supply situation. In the Gardena division, sales of irrigation products declined due to a delayed start to the season due to cold weather in combination with our retail partners in key European markets starting the year with low inventory levels. relatively high. The Husqvarna Construction division achieved organic growth of 2%, partly driven by strong power cutter sales.
Second quarter operating profit was 2,075 million Swedish crowns (2,645), excluding items affecting comparability. Price increases continued to offset rising raw material and logistics costs, while lower volumes weighed on earnings. The product mix was unfavorable with lower volumes of robotic mowers and sprinkler solutions and higher volumes of ride-on mowers.
Direct operating cash flow amounted to 1,803 million Swedish crowns (2,875) for the second quarter. The decline was related to lower operating profit as well as higher inventories of components in general, semi-finished products and goods in transit, all resulting from the unpredictable component supply environment. . Our ambition is to reduce inventory levels for the rest of the year. However, this will also depend on how the supply chain situation develops.
Priority to sustainable value creation
Our dynamic brands are well positioned in attractive segments and our unique capacity for innovation enables us to create value and achieve our Sustanovate objectives. Examples of progress in our strategy to create sustainable value are the strong growth of robotic mowers in the professional segment, including the successful launch of CEORA™, the robotic mower that enables cost-effective management of commercial lawn maintenance. The Husqvarna Forest & Garden division has also joined the Power for All alliance we co-founded with Bosch, for consumer 18V battery-powered products, to complement its 36V offering. In the Husqvarna Construction division, we have launched new ranges of dust extractors, providing both improved jobsite environments and a significant improvement in energy efficiency for our end customers. We are meeting our CO₂ emissions reduction target, achieving a reduction across the entire value chain (scopes 1, 2 and 3) of -30% compared to our 2025 target of -35%. This despite an unfavorable product mix during the quarter.
In summary, the quarter was marked by continued disruptions in the supply chain. We are doing everything we can to support our customers for the remainder of the season, but the global supply chain situation is still fluid and unpredictable. We have a dedicated and flexible organization that, alongside putting in place short-term measures, executes our long-term strategy and value creation.”
Henric AnderssonPresident and CEO
Webcast presentation and conference call
A webcast presentation of the Q2 report, hosted by Henric AnderssonPresident and CEO, and Terry BurkCFO, will take place at 10:00 a.m. CET on July 15, 2022.
To view the presentation, please use the link: https://husqvarna-group.creo.se/220715
Conference call (to ask questions): +46 (0) 8 5051 0031 (Sweden) or +44 207 107 06 13 (UK).
Dates of the 2022 financial reports
21st of October – Interim report from January to September
Terry BurkCFO and Executive Vice President, Finance, IR & Communication, +46 8 738 90 00
John AnderssonVice President, Investor Relations, +46 702 100 451
Husqvarna AB (publ), PO Box 7454, SE-103 92 Stockholm
Regeringsgatan 28, +46 8 738 90 00, www.husqvarnagroup.com
Reg. No: 556000-5331
NASDAQ OMX Stockholm: HUSQ A, HUSQ B
This report contains inside information that Husqvarna AB is required to disclose under the EU Market Abuse Regulation and Securities Markets Act. The information was submitted for publication, through the contact person listed above, at 07:30 CET on July 15, 2022.
Factors Affecting Forward-Looking Statements
This report contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements include, among other things, financial goals, objectives for future business and financial plans. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially due to many aspects. These aspects include, but are not limited to: consumer demand and market conditions in the geographies and industries in which Husqvarna operates, the effects of currency fluctuations, downward pressure on prices due to competition, a significant reduction in sales by major distributors, success in new product development and marketing, the outcome of product liability litigation, progress in achieving of productivity and efficient use of capital, the successful identification of growth opportunities and objects of acquisition, the integration of these into the existing business and the successful achievement of the objectives aimed at making the chain of more efficient supply.
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SOURCE Husqvarna Group