Presentation of Husqvarna Stockholm, May 29-30, Bengt Andersson. President and CEO

Transcription

1 Presentation of Husqvarna Stockholm, May 29-30, 2006 Bengt Andersson President and CEO

2 The Husqvarna Group Global leader in outdoor power products and cutting equipment for construction and stone industries Lawn and garden Forestry Construction

3 Key data, 2005 Financial data pro forma Sales by business area Sales: SEK 28.8bn Construction EBIT: SEK 2.9bn Net debt/equity ratio: 1.12 No. of employees: 11,700 Professional 36% Forestry Lawn & garden North America ROW Consumer 64% Production facilities Sales by region North America 5 Latin America 1 Europe 7 Rest of world 1 Europe 37% ROW 6% North America 57%

4 Interrelated end-user markets Forestry Lawn and garden Construction products Garden products

5 Interrelated end-user markets Forestry Lawn and garden Interrelated: Portable products Distribution Husqvarna brand Construction products Garden products

6 Strong brand portfolio Global Professional and high-end consumer: NA and Europe: Europe - Consumer Electric, high-end segment: Petrol, midsegment: Construction Garden USA - Consumer products Petrol, midand low-end segments: TARGET

7 Time Portable petrol professional Electric Wheeled petrol Portable petrol consumer Professional lawn & garden Construction products Husqvarna Jonsered Pioneer Jobu Husqvarna Jonsered Pioneer Jobu Flymo Husqvarna Jonsered Pioneer Jobu Flymo Norlett Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater American Yard Products Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater American Yard Products Allegretti Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater American Yard Products Allegretti McCulloch Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater American Yard Products Allegretti McCulloch Marazzini Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater American Yard Products Allegretti McCulloch Marazzini Industrial Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater American Yard Products Allegretti McCulloch Marazzini Industrial Dimas Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater American Yard Products Allegretti McCulloch Marazzini Industrial Dimas Cushion Cut Magnum Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater American Yard Products Allegretti McCulloch Marazzini Industrial Dimas Cushion Cut Magnum Diamant Boart Husqvarna Jonsered Pioneer Jobu Flymo Norlett Poulan WeedEater 1986 American Yard Products 1988 Allegretti 1990 McCulloch 1999 Marazzini 2001 Industrial Dimas 1987 Cushion Cut Magnum 2000 Diamant Boart 2002 Yazoo-Kees 1999 Bluebird 2000 Successful acquisitions

8 Leading global positions for 90% of sales Chainsaws Other portable petrol Tractors Lawn mowers Diamond tools for construction and stone industries Global no. 1 Global no. 1 Global no. 1-2 Global no. 1 Global no. 1

9 History of profitable growth EBIT margin 12% 10% Sales, SEK bn Sales Organic growth drivers Growth in demand Market share gains Product/market expansion 8% 6% 4% 2% EBIT margin % Sales CAGR : 7.5% (5.5% excl. acquisitions) EBIT CAGR : 10% Note: As reported in Electrolux segment reporting. Corporate costs not included

10 Key drivers of performance Strong position for Husqvarna brand in high-end segments Successful product development Global sales and service organization Strong positions with leading retailers Successful integration of acquisitions

11 Professional Products SEKm 15,4% Sales and margin (In comparable currency) 15,8% ,7% Key demand drivers: Logging activities Prosumers Private gardens maintained by contractors Construction infrastructure and commercial buildings Sales Operating Margin RONA: % 36.7% 38.5% 4.5% annual sales growth Key performance drivers: Brand Growth Price management Major competitors: Stihl, Toro, Tyrolit

12 Consumer Products SEKm 8,6% ,1% *) 7,3% RONA: Sales Sales and margin (In comparable currency) Operating Margin % 27.8% 18.6% Key demand drivers: Housing starts Consumer spending on home improvement Weather Key performance drivers: Cost-efficiency Brand Price management Growth Major competitors: MTD, GGP, TTI 5.7% annual sales growth *) Includes provision of SEK 40m for closure of Parabiago plant, Italy

13 How to meet our targets 1. Organic growth Continued investments in product development Expand distribution network Make full use of Husqvarna brand s potential 2. Maintain high margins Focus on growing high-margin businesses Price management Cost-efficiency 3. Complementary acquisitions

14 Product development Strong expertise - Engines for portable products - Working close to professional users R&D concentrated to few resource centers High cost-efficiency based on large volumes

15 Strong global sales network Strong positions with leading retailers in both Europe and US Sears Husqvarna s largest customer Growing shares with other major retailers Strong global dealer base Loyalty and stability Decades of investments to develop

16 LCC challenges and opportunities Pricing pressure New competitors Industry is relocating Cost benefits

17 LCC challenges and opportunities Husqvarna s strategy Continue to strengthen brand position Add value for retailers and consumers - Excellence in products and services Optimize pace of transfer to LCC manufacturing and sourcing

18 Long-term financial targets Annual organic growth of approx. 5% over a business cycle Growth through complementary acquisitions Operating margin of more than 10% over a business cycle Dividend to correspond to 25-50% of net income

19 Presentation of Husqvarna Stockholm, May 29-30, 2006 Bernt Ingman CFO

20 Husqvarna Group, Q Pro forma SEKm 1st Quarter Full year 2006 % of sales 2005 % of sales Change, % Adj.* ) Change 2005 % of sales Net sales Gross Profit EBIT Income after fin. items Income for the period Key ratios Earnings per share SEK Equity per share, SEK ROCE, % *) In comparable currencies

21 Consumer Products, Q Strong pre-season sales in both Europe and North America, based on improved shares with retailers. Higher operating income, margin in line with previous year. Q SEKm Sales 6, % EBIT % Margin 7.7% Change In comparable currency Sales 9.1% EBIT 8.6%

22 Professional Products, Q Higher sales and EBIT for chainsaws, in comparison with strong Q Strong sales and higher EBIT for both Lawn and garden and Construction Overall, slightly lower margin due to product/country mix effects Q SEKm Sales 2, % EBIT % Margin 16.3% Change In comparable currency Sales 6.3% EBIT 3.9%

23 Balance Sheet, Pro forma Mar 31 Mar 31 Dec 31 SEKm Intangible assets Tangible assets Other fixed assets Inventories Accounts receivable Other assets Liquid funds Total assets Total equity Int bearing liab Provisions Accounts payables Oth non int. bearing liabilities Tot equity and liabilty Net Debt Net Debt/Equity 1,89 2,64 1,12 Investments

24 Seasonality SEK m Net Sales Q1 Q2 Q3 Q4 SEK m Operating Profit Q1 Q2 Q3 Q Average of Q1 Q2 Q3 Q4 Total Year 29% 34% 21% 16% Average of Q1 Q2 Q3 Q4 Total Year 29% 39% 21% 11% Strong seasonal variations First half represents approx. 60% of sales and 65% of operating profit

25 EBIT/ OP CF SEKm Seasonality Sales, EBIT and operating cash flow Net Sales SEKm Jan Feb Mar Apr Maj Jun Jul Aug Sep Okt Nov Dec Distinct seasonal variation pattern: Sales; approx. 60% in first half of the year Operating profit; approx. 65% in first half Operating cash flow; approx. 100% in second half

26 Summary Leading market positions Strong brand portfolio Expertise in product development Strong distribution network Organic growth Complementary acquisitions Strong, stable cash flow Create value for shareholders through good growth, high profitability and strong cash flow

27 The Husqvarna Group Global leader in outdoor power products and cutting equipment for construction and stone industries Lawn and garden Forestry Construction