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Husqvarna Q3 net sales increased 4%

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Staff Writer | October 21, 2017
Husqvarna Q3 net sales increased to SEK 7,449m (7,349), corresponding to a currency adjusted growth of 4%.
Husqvarna    Operating income amounted to SEK 433m
Operating income amounted to SEK 433m (431), including a restructuring charge of around SEK -50m.

Kai Wärn, president and CEO, said: "Net sales for the Group in the seasonally smaller third quarter continued to grow, increasing by 4% adjusted for currency. Operating income amounted to SEK 433m (431), including a restructuring cost of some SEK 50m in the Construction Division.

Our three divisions with growth targets, Husqvarna, Gardena and Construction, continue to deliver on their profitable growth strategies. Their combined organic growth rate has increased from 3.3% in 2016 to 5.4% on a rolling twelve months basis, with improved operating margins.

"We continue to invest in strategic growth initiatives to further strengthen our position in areas that will be vital for growth going forward, but which impacts the margin more negatively during the second half-year due to its lower sales.

Sales in the Husqvarna Division increased, primarily related to a favorable development for wheeled products in North America. Operating income increased to SEK 385m (368).

"The Gardena Division also added another quarter of higher sales with growth in Europe as well as Asia/Pacific. Operating income rose to SEK 62m (50).

The Consumer Brands Division’s business environment remains challenging. Sales in the third quarter declined by 5% currency adjusted and the seasonal operating loss amounted to SEK -94m (-80).

"Cost reductions and efficiency enhancements continue to impact positively, however not enough to off-set the lower volume and an unfavorable mix. Recently we announced a significant reduction of the business volume with one of our biggest U.S. retail customers by around SEK 1 bn for 2018.

"We are committed to a strong, profitable and future-oriented Consumer Brands Division, and this means that we need to take actions that are painful in the short term. This will however delay the operating income improvement trajectory for the Division. The Group’s financial target of an average operating margin of at least 10% for the coming years remains.

"With the Construction Division’s acquisitions of Pullman Ermator and HTC we have built a strong leading position in the fast growing and attractive market segment for preparing and polishing concrete floors.

"The third quarter includes a restructuring cost of some SEK 50m related to establishing an efficient back-end structure for this segment. The restructuring will accelerate profitable growth and create synergies.

"Sales in the quarter increased by 25% adjusted for currency, with strong contribution from the acquired entities. Excluding the restructuring cost, operating income was 25% higher and reached SEK 193m (155)."