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Q1 2015 husqvarna 16 9 final
- Sales declined 3% for the quarter but operating income was up 22% due to a favorable sales mix between divisions and continued margin improvements from the Accelerated Improvement Program. - While the first quarter saw strong results, currency trends are expected to negatively impact margins going forward. Additional cost-cutting measures are planned to reach the 2016 target of 10% operating margin. - The new divisional organization structure is working well but recent currency fluctuations may make reaching financial targets difficult without further efficiency improvements.
Q1 2015 husqvarna 16 9 final
- 1. Q1 2015 resultspresentation 2015-04-21
- 2. Summary, Q1 2015 •New brand-driven divisional organization working well • Strong first quarter; operating income up 22% – Total sales declined, however a favorable divisional sales mix – Slow start due to cold weather conditions in U.S. – Short term positive currency impact • Accelerated Improvement Program continues to deliver improving margins • Additional improvement areas identified to balance unfavorable currency trend to reach margin target of 10% 2016 2
- 3. Financial highlights Q12015, Group • Sales declined -3% (currency adjusted) – Higher in all divisions, except for Consumer Brands • Gross and EBIT margin improvement trend remains • EBIT rose by 22% to SEK 1,112m (908) – Divisional mix positive – AIP delivers continued improvements – Short term positive currency impact – Negative sales volume impact and higher SG&A 3 SEKm Q1 2015 Q1 2014 As reported Adjusted1 LTM2 FY 2014 Net sales 10,928 9,685 13 -3 34,081 32,838 Gross margin 27.2 26.4 - - 28.7 28.5 EBIT 1,112 908 22 7 1,785 1,581 Excl. impairment 1,112 908 22 7 2,552 2,348 EBIT margin, % 10.2 9.4 - - 5.2 4.8 Excl. impairment, % 10.2 9.4 - - 7.5 7.2 1 Adjusted for currency translation effects. 2 Last tw elve months rolling % change, Q1
- 4. Husqvarna Division Q12015 • Sales increased 9% (currency adjusted) – Europe: profit pool areas show good growth and earlier sell-in of wheeled products – North America dealer sales positive despite late spring • EBIT rose by 35% to SEK 897m (667) and margin improved – Favorable sales volume impact – Increased productivity – Short-term favorable currency impact – Higher SG&A 4 SEKm Q1 2015 Q1 2014 As reported Adjusted1 LTM2 FY 2014 Net sales 5,342 4,358 23 9 16,433 15,449 EBIT 897 667 35 23 2,238 2,008 EBIT margin, % 16.8 15.3 - - 13.6 13.0 1 Adjusted for currency translation effects. 2 Last tw elve months rolling % change, Q1
- 5. Gardena Division Q12015 5 SEKm Q1 2015 Q1 2014 As reported Adjusted1 LTM2 FY 2014 Net sales 1,319 1,152 15 9 4,379 4,212 EBIT 204 177 15 6 410 383 EBIT margin, % 15.5 15.4 - - 9.4 9.1 1 Adjusted for currency translation effects. 2 Last tw elve months rolling % change, Q1 • Sales increased 9% (currency adjusted) – Good sell-in of watering products and robotic mowers – New customers • EBIT rose by 15% to SEK 204m (177) – Positive sales volume impact – Favorable product mix – Higher R&D costs
- 6. Consumer Brands DivisionQ1 2015 6 SEKm Q1 2015 Q1 2014 As reported Adjusted1 LTM2 FY 2014 Net sales 3,343 3,393 -1 -21 9,788 9,838 EBIT -11 44 n/a n/a -210 -155 EBIT margin, % -0.3 1.3 - - -2.1 -1.6 1 Adjusted for currency translation effects. 2 Last tw elve months rolling % change, Q1 • Sales declined -21% (currency adjusted) – Cautious retail buying behavior in North America due to cold weather – Higher sales in Europe – Generally, value prioritized before volume • EBIT decreased to SEK -11m (44) – Lower absorption of fixed costs due to lower volume – AIP Operational Excellence deliver continued material cost reductions and productivity enhancements – Negative currency impact
- 7. Construction Division Q12015 7 SEKm Q1 2015 Q1 2014 As reported Adjusted1 LTM2 FY 2014 Net sales 924 782 18 2 3,481 3,339 EBIT 74 81 -9 -21 347 354 EBIT margin, % 8.0 10.4 - - 10.0 10.6 1 Adjusted for currency translation effects. 2 Last tw elve months rolling % change, Q1 • Sales increased 2% (currency adjusted) – Supply issues in North America due to west coast harbor strike – Higher sales in Europe, despite a slow start – Customer inventory reductions in Brazil • Higher run-rate of sales growth in March • EBIT decreased to SEK 74m (81) – Higher cost due to investments in sales capacity and product development as well as some one-off costs – Favorable currency impact
- 8. Consolidated income statement 8 SEKm Q1 2015 Q1 2014 FY 2014 Netsales 10,928 9,685 32,838 Cost of goods sold -7,952 -7,128 -23,488 Gross income 2,976 2,557 9,350 Gross margin, % 27.2 26.4 28.5 Selling expense -1,467 -1,324 -5,626 Administrative expense -397 -325 -1,392 Other operating income/expense 0 0 16 Impairment of goodwill - - -767 Operating income1 1,112 908 1,581 Operating margin, % 10.2 9.4 4.8 Financial items, net -55 -96 -325 Income after financial items 1,057 812 1,256 Margin, % 9.7 8.4 3.8 Income tax -269 -192 -432 Income for the period 788 620 824 Basic earnings per share, SEK 1.37 1.08 1.43 Diluted earnings per share, SEK 1.37 1.08 1.43 1 Of which depreciation, amortization and impairment -261 -231 -1,734
- 9. Gross margin development 9 26.8% 30.3%30.3% 29.5% 27.0% 28.9% 27.7%27.8% 26.7% 28.7% 27.7% 25.2%25.2% 28.3% 26.3% 25.1% 26.4% 31.0% 29.0% 26.3% 27.2% 20% 23% 26% 29% 32% 20% 25% 30% 35% 40% Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 Q12014 Q22014 Q32014 Q42014 Q12015 LTMQuarter Grossprofit margin, % Q Gross profit margin, % LTM
- 10. Consolidated balance sheet 10 SEKm 31Mar 2015 31 Mar 2014 31 Dec 2014 Non-current assets 16,299 14,640 15,748 Inventories 9,338 7,277 7,709 Trade receivables 7,805 7,180 2,898 Other current assets 655 630 716 Liquid funds 2,241 1,755 2,105 Total assets 36,338 31,482 29,176 Total equity 12,933 11,923 12,088 Interest-bearing liabilities 10,479 9,096 7,504 Pension liabilities 1,934 1,357 1,835 Provisions 2,693 2,328 2,550 Trade payables 5,632 4,514 3,154 Other current liabilities 2,667 2,264 2,045 Total equity and liabilities 36,338 31,482 29,176
- 11. Operating cash flow 11 -3,000 -2,000 -1,000 0 1,000 2,000 3,000 Q1Q2 Q3 Q4 SEKm 2015 2014 2013
- 12. 0.00 0.30 0.60 0.90 1.20 1.50 1.80 2.10 2.40 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 Net Debt /EquitySEKm Net debt Equity Net debt / equity Net debt and equity 12
- 13. Key figures 13 Q1 2015 Q1 2014 Full-year 2014 Net sales,SEKm 10,928 9,685 32,838 Gross margin, % 27.2 26.4 28.5 Operating income, SEKm 1,112 908 1,581 Excl. items affecting comparability 1,112 908 2,348 Operating margin, % 10.2 9.4 4.8 Excl. items affecting comparability 10.2 9.4 7.2 Working capital, SEKm 8,308 7,209 5,066 Return on capital employed, % 8.5 8.6 7.6 Return on equity, % 7.9 9.1 6.7 Earnings per share, SEK 1.37 1.08 1.43 Capital turn-over rate, times 1.7 1.6 1.7 Operating cash flow, SEKm -2,410 -1,960 868 Net debt/equity ratio 0.79 0.73 0.60 Capital expenditure, SEKm 243 292 1,386 Average number of employees 14,436 15,750 14,337
- 14. Further actions plannedto reach 10% operating margin target in 2016 • Solid recovery of operating income and margin since launch of Accelerated Improvement Program • Recent current currency exchange rate development will have negative impact on margins – Flat for rest of 2015 but negative 2016 vs. 2015 • Additional actions needed to reach 10% margin. Potential improvement areas include – Group-wide: indirect material spend and logistics costs – Divisional reviews: Capacity adjustments and efficiency enhancements 14
- 15. Summary, Q1 2015 •New brand-driven divisional organization working well • Strong first quarter; operating income up 22% • Accelerated Improvement Program continues to deliver improving margins • Recent currency exchange rate development will have negative impact on margins • Additional improvement areas identified to reach 10% margin target 2016 • Stable demand expected for Q2 15
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