Husqvarna - Year-End Report 2015
For the full year, the Group's development was positive in several dimensions. Operating income was 27% higher and reached SEK 2,980m, excluding items affecting comparability, with all divisions contributing to the improvement. Operating cash flow increased to SEK 1,668m (1,425) and the net debt declined to SEK 6,375m (7,234).
The Accelerated Improvement Program was successfully closed as of the end of 2015. In two years, the Group's operating income has improved by 85% and the margin has recovered from 5.3 to 8.2%, excluding items affecting comparability, despite a dilution of more than 1 percentage point due to currency translation effects on net sales.
Building on the success of the Accelerated Improvement Program and our strong improvement momentum, we aim to capture further cost reductions and efficiency improvements during 2016-17. The additional efficiency measures will focus on continued product cost out activities, reduction of indirect material and logistic costs, capacity adjustments in the supply chain and improved efficiency in terms of selling and administrative expenses.
The challenge now is to maintain enough momentum to offset the currency head-wind in 2016, which is estimated to up to SEK -500m, as well as to fund new activities related to our profitable growth ambition. The challenge is especially pronounced in the first quarter when we expect half of the full-year currency impact to materialize.
From a market point of view, we expect a stable to slightly higher demand in the preseason of 2016."
Fourth quarter 2015
> Net sales increased 2% to SEK 5,672 (5,323), adjusted for exchange rate effects.
> Operating income improved to SEK -212m (-265), excluding items affecting comparability.
> Operating income includes restructuring charges amounting to SEK -153m.
> Net sales increased to SEK 36,170m (32,838), but decreased 1% adjusted for exchange rate effects.
> Operating income increased 27% to SEK 2,980m (2,348), excluding items affecting comparability, corresponding to a margin of 8.2% (7.2).
> Earnings per share after dilution rose to SEK 3.28 (1.43).
> Net debt decreased to SEK 6,375m (7,234) and the net debt/equity ratio declined to 0.49 (0.60).
> The Board proposes a dividend of SEK 1.65 per share (1.65).
“Kai Wärn, President and CEO: The Group's trend of improvement continued into the seasonally less important fourth quarter. Currency adjusted sales were 2% higher than prior year's corresponding quarter. Husqvarna, Gardena and Construction divisions grew by 6%. The decline for Consumer Brands was 10% which reflects our ambitions to prioritize value before revenue. The normal seasonally generated operating loss, excluding items affecting comparability, was reduced to SEK -212m (-265) and the margin recovered to -3.7% (-5.0) despite unfavorable currency impact. The Accelerated Improvement Program continued to yield positive results, mainly related to further cost reductions.”