Husqvarna reported its net sales increased by 14% to $1.1 billion, or by 22% when adjusted for exit of Consumer Brands business and changes in exchange rates. Operating income increased by 141% to $114 million, representing a margin of 10.4% (4.9).
For the January-September 2020 period, the company reported:
- Net sales decreased by 2% to $4 billion, or increased by 5% when adjusted for exit of Consumer Brands business and changes in exchange rates.
- Operating income increased by 9% to $528 million, excluding items affecting comparability, representing a margin of 13.1% (11.8%).
- Direct operating cash flow* amounted to $716 million.
"We delivered a very strong third quarter as we continue to win in our core categories and strengthen our positions in many markets," said Henric Andersson, president & CEO. "The performance was supported by a favorable stay-at-home trend and good weather conditions that prolonged the gardening season. Net sales increased by 22%* in the quarter with a solid development in all divisions and key regions. Our growth was particularly strong in the robotics, battery and watering categories driving Husqvarna and Gardena Division's growth to 27%* and 26%* respectively. Construction Division's net sales increased by 5%* in the quarter. In the first 9 months Group net sales increased by 5%* with volumes shifting between quarters due to the COVID-19 situation.
We achieved an operating margin of 10.3% on a rolling 12-month basis (excluding items affecting comparability). The direct operating cash flow increased to $720 million for the first 9 months. This leaves us well-positioned to further accelerate the strategic growth initiatives which we presented last year. We are increasing our focus on sustainable solutions with strong customer demand supporting the transition to a lower carbon footprint. This includes increased investments in R&D, production and go-to-market capabilities for key categories such as robotics, battery and watering solutions including an increased focus on solutions for the professional segments.
At the same time we will further improve the overall competitiveness in our petrol supply chain by streamlining and reducing fixed costs within our component manufacturing, increasing the level of automation in our factories and by reallocating production volumes among our factories bringing final assembly closer to our customers.
These steps will reduce the global workforce by approximately 350 positions and result in annual savings of around $57.2 million, fully effective in 2023, whereof $28.6 million will be reinvested annually into accelerated growth initiatives. This results in net savings of $28.6 million on a yearly basis. These efficiency measures entail one-off costs estimated to $100.7 million (of which $57.2 million are cash items) where the majority will be charged in the fourth quarter of 2020.
In conclusion, we have strengthened our market leadership positions and reached our profitability target. We have a clear strategy and are now taking further steps to build on our strengths and focus on execution. I would like to sincerely thank our team around the world for tremendous work showing decisiveness, agility and extraordinary commitment during this period."
* Net sales is adjusted for changes in exchange rates and the exit of Consumer Brands.