Husqvarna Reports on a Tough Year
Feb 24, 2012
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Husqvarna Group, one of the world's largest makers of outdoor power equipment, said 2011 net sales were up 2% but operating income was hit hard by - among other things - $61 million in cost related to the manufacturing problems at its Orangeburg, SC riding mower manufacturing campus.

Husqvarna reported net sales for 2011, adjusted for exchange rates, were up 2%, but 2011 operating income was down to SEK 1,551 million (approx. US$237 million) from SEK 2,445 million in 2010. Exchange rates hurt income by SEK 382 million (approx. $58 million) and costs directly related to production disturbances amounted to SEK 398 million (approx. $61 million).

In the fourth quarter of 2011 net sales increased 4% to SEK 4,994 million, up from SEK 4,794 in 4Q 2010. Adjusted for exchange rate effects, 4Q net sales were up 5%. The group reported a 4Q loss of SEK 236 million, compared to a loss of SEK 63 million in 4Q 2010. Changes in exchange rates had a negative effect of SEK 47 million and costs directly related to production disturbances were SEK 30 million.

"2011 was a challenging year for Husqvarna," stated Hans Linnarson, president and CEO. "We experienced operational difficulties in one of our largest production facilities, which had a substantial negative impact on the group's operating income. Despite the issues, I am pleased that our sales, adjusted for changes in exchange rates, increased and we maintained our position as global leader."

Linnarson said Husqvarna market shares in key areas remained stable and in some areas increased, including in professional riding mowers, robotic lawn mowers, and construction equipment.

"In Americas, our North American operations remained challenging. Net sales recovered in the second half of the year, but operating income did not recover at the same pace. We are working to improve the margin in our US operations through sustainable measures to improve mix and efficiency," Linnarson said.

Linnarson noted that the normal seasonality in the outdoor power equipment industry means the fourth quarter is the smallest of the year for the group.

"The outlook regarding consumer demand is difficult to asses. As we have communicated earlier, our listings with major retail customers are unchanged compared with 2011, but with a slightly improved mix," Linnarson said.

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