2. Summary, Q3 2015
โข Continued trend of improved earnings
โ Operating income up 22% to SEK 405m (332)
โ Operating margin improved 0.6 p.p. to 5.5%
โข High margin divisions growing net sales, and Consumer Brands
mitigated impact from lower volumes
โข Accelerated Improvement Program continues to
deliver successfully
โข Increasingly challenging currency headwind
โข Additional measures defined to mitigate currency impact
and to fund growth investments beyond 2016
2
3. Financial highlights Q3 2015, Group
โข Unchanged sales (currency adjusted)
โ Higher in all divisions, except for Consumer Brands
โข EBIT rose by 22% to SEK 405m (332)
โ Favorable mix driven by growth in watering
โ Direct material cost reductions
โ Adverse impact from lower production volumes
โ Unfavorable EBIT currency impact of approx. SEK -60m
โข Operating margin improved 0.6 p.p. to 5.5%
3
SEKm
Q3
2015
Q3
2014
As
reported Adjusted1
Jan-Sep
2015
Jan-Sep
2014
As
reported Adjusted1
LTM2
FY
2014
Net sales 7,307 6,785 8 0 30,498 27,515 11 -2 35,821 32,838
Gross margin, % 28.4 29.0 - - 29.1 28.9 - - 28.7 28.5
EBIT 405 332 22 26 3,192 2,613 22 12 2,160 1,581
Excl. impairment 405 332 22 26 3,192 2,613 22 12 2,927 2,348
EBIT margin, % 5.5 4.9 - - 10.5 9.5 - - 6.0 4.8
Excl. impairment, % 5.5 4.9 - - 10.5 9.5 - - 8.2 7.2
1
Adjusted for currency translation effects. 2
Last tw elve months rolling
% change, Q3 % change, 9M
4. Husqvarna Division Q3 2015
โข Sales increased 3% (currency adjusted)
โ Increase driven mainly by snow-blowers in
North America
โข EBIT and margin declined
โ Unfavorable mix
โ Lower production volumes
โ Adverse FX impact approx. SEK -30m
โข Year-to-date positive EBIT and margin
development
4
SEKm
Q3
2015
Q3
2014
As
reported Adjusted1
Jan-Sep
2015
Jan-Sep
2014
As
reported Adjusted1
LTM2
FY
2014
Net sales 3,519 3,264 8 3 14,588 12,660 15 5 17,377 15,449
EBIT 321 432 -26 -24 2,219 1,917 16 10 2,310 2,008
EBIT margin, % 9.1 13.2 - - 15.2 15.1 - - 13.3 13.0
1
Adjusted for currency translation effects. 2
Last tw elve months rolling
% change, Q3 % change, 9M
5. Gardena Division Q3 2015
5
โข Favorable weather in Central/Southern Europe
โข Sales increased 19% (currency adjusted)
related to strong growth in watering
โข Favorable scale impact and mix driven by the
growth in watering
โข EBIT and margin rose substantially
SEKm
Q3
2015
Q3
2014
As
reported Adjusted1
Jan-Sep
2015
Jan-Sep
2014
As
reported Adjusted1
LTM2
FY
2014
Net sales 1,060 879 21 19 4,174 3,743 12 8 4,643 4,212
EBIT 113 -7 n/a n/a 714 569 25 21 528 383
EBIT margin, % 10.7 -0.8 - - 17.1 15.2 - - 11.4 9.1
1
Adjusted for currency translation effects. 2
Last tw elve months rolling
% change, Q3 % change, 9M
6. Consumer Brands Division Q3 2015
6
SEKm
Q3
2015
Q3
2014
As
reported Adjusted1
Jan-Sep
2015
Jan-Sep
2014
As
reported Adjusted1
LTM2
FY
2014
Net sales 1,708 1,776 -4 -18 8,694 8,579 1 -17 9,953 9,838
EBIT -119 -138 13 21 48 3 n/a -40 -110 -155
EBIT margin, % -7.0 -7.8 - - 0.6 0.0 - - -1.1 -1.6
1
Adjusted for currency translation effects. 2
Last tw elve months rolling
% change, Q3 % change, 9M
โข Sales declined -18% (currency adjusted)
โ Lower sales in all geographies
โ Generally, value prioritized before sales volume
โข Seasonal EBIT loss reduced despite sales and
production volume decline
โ Accelerated Improvement Program material
cost reductions
โ Favorable mix development
โ Unfavorable currency impact approx. SEK -30m
7. Construction Division Q3 2015
7
โข Sales increased 7% (currency adjusted)
โ Strong development in North America
โ Slightly up, but mixed, in Europe
โ Increase in rest of the world driven by Brazil and
Australia
โข EBIT and margin increased
โ Sales volume impact
โ Increased costs for sales and service resources
โ Favorable currency impact
SEKm
Q3
2015
Q3
2014
As
reported Adjusted1
Jan-Sep
2015
Jan-Sep
2014
As
reported Adjusted1
LTM2
FY
2014
Net sales 1,020 866 18 7 3,042 2,533 20 6 3,848 3,339
EBIT 144 107 35 19 378 305 24 8 427 354
EBIT margin, % 14.1 12.4 - - 12.4 12.1 - - 11.1 10.6
1
Adjusted for currency translation effects. 2
Last tw elve months rolling
% change, Q3 % change, 9M
8. 4%
5%
6%
7%
8%
9%
10%
0
500
1 000
1 500
2 000
2 500
3 000
3 500
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
EBIT rolling 12 months (SEKm)
EBIT margin rolling 12 months (%) as reported
EBIT margin rolling 12 months (%) FX adjusted*
SEKm
9.5%*
EBIT almost doubled since AIP launch
โข The Accelerated Improvement Program; launched Q3
2013, activities ending in 2015 and full financial impact
realized 2016
โข The program is delivering above expectations
โ Purchasing, value engineering and SKU complexity reduction
โ Selective growth in profit pool areas
โข However, the Group faces ~1,3 p.p. margin headwind due
to changes in exchange rates since 2013
โ So far, unfavorable FX translation impact on net sales
โ In 2016 currency hedges will no longer offset unfavorable
transaction impact on EBIT
โข Additional activities to secure cost reductions beyond the
AIP in 2016 and 2017
8
* FX adjusted only for translation effect on sales.
8.2%
9. Main initiatives
โข Continued direct material cost-out
โข Indirect material costs, logistics costs
โข Rightsizing of footprint
โข SG&A efficiency
โข Working capital improvements โ
Cash Conversion Cycle
Why?
โข Mitigate FX headwind and support margin target
โข Fund investments for future profitable growth
Further efficiency measures 2016-17
AIP
9
16. Summary, Q3 2015
โข Continued trend of improved earnings
โ Operating income up 22% to SEK 405m (332)
โ Operating margin improved 0.6 p.p. to 5.5%
โข High margin divisions growing net sales, and Consumer Brands
mitigated impact from lower volumes
โข Accelerated Improvement Program continues to
deliver successfully
โข Increasingly challenging currency headwind
โข Additional measures defined to mitigate currency impact
and to fund growth investments beyond 2016
16
โข Q4 2015: Increasing adverse impact from currency and lower production
rates will make it difficult for AIP to balance vs. last year result.
โข In addition, SEK ~150m of restructuring cost as announced on October 7