Husqvara Group reported its 4th quarter and full year 2021 earnings on Feb. 3. Net sales for the quarter increased 23% to SEK 8.2 billion ($901.2 million). Net sales for the year were up 12% to SEK 47.1 billion ($5.2 billion). The organic growth was 15%, changes in exchange rates impacted with –5% and acquisitions with 2%.
“2021 has been a successful year for us. In cooperation with our trade partners and suppliers and thanks to an excellent contribution by our employees, we delivered a record year, in which we continued to execute on our strategy. Overall, we strengthened our market positions, particularly in high-growth segments such as robotic mowers and battery-powered products, in a year characterized by pandemic effects with increased costs as well as disruptions in global supply chains,” said Henric Andersson, president and CEO.
Good Performance in the 4th Quarter
“We achieved continued strong sales growth in the seasonally smallest fourth quarter. Growth was strong in all divisions and mainly driven by our core categories such as robotic mowers, battery-powered products, watering solutions and handheld products. This resulted in an organic growth of 17%. The Husqvarna Forest & Garden Division delivered an organic growth of 14%. The organic growth in the Gardena Division was 24% and supplemented by a growth of 24% related to the acquisition of Orbit Irrigation. The growth was partly driven by early deliveries to trade partners in preparation for the upcoming garden season. The Husqvarna Construction Division had a strong performance in the main markets and organic growth was 21%, also supported by an improved market situation.
“In total, operating income, excluding items affecting comparability, amounted to SEK -180m (-129). Higher costs for raw materials and logistics together with our continued increased investments in strategic growth areas had a negative impact however, partly mitigated by sales growth and price increases.
A Record Year
“The Group’s organic growth was 15% for the year. The stay-at-home trend has contributed positively while we strengthened our market positions in prioritized strategic segments such as battery-powered products, robotic mowers and handheld products. Operating income, excluding items affecting comparability, increased by 27% to SEK 5,684m (4,484) and the operating margin amounted to 12.1% (10.7), which is a record result. The Board of Directors will propose to the Annual General Meeting an 25% increase of the dividend to SEK 3.00 (2.40).
As a global company, we are exposed to the limitations of the pandemic on global supply chains and availability on key components. We expect these challenges to continue to have an impact in 2022 and our dedicated work continues in order to meet customers’ demand.
New Financial Targets
“To reflect our profitable growth strategy, we launched new financial targets at the Group's Capital Markets Day (CMD) in December 2021. The targets include annual organic net sales growth of 5%, an operating margin of 13% and a capital efficiency target that implies an operating working capital of 20% of net sales.
“We increase our focus on profitable growth as well as acquisition opportunities to complement and strengthen the organic development in all divisions going forward. To further emphasize our commitment to delivering on our strategy, we presented three operational ambitions during the CMD. Within five years, our ambition is to (i) double the sales of robotic mowers, (ii) double the number of connected products and, (iii) increase the share of electrified products sold to two-thirds. We will report on these ambitions on an annual basis.
Our electrification ambition is part of our ambitious sustainability work, which aims to consistently reduce the carbon footprint. So far, we have reduced CO2 emissions (scope 1,2 & 3) by -27% compared to the base year 2015. The target is to reduce by -35% by 2025.
Well Positioned for the Future
“Overall, 2021 has been a successful year for us with strong financial performance and progress for all divisions. We work continuously to overcome challenges in our supply chain, including increasing our inventories in preparation for the upcoming season. With a clear forward-leaning strategy, innovation agenda and a dedicated team, we are well positioned for 2022 and our continued value creation journey.”