Q1 2019 Results Presentation

April 24, 2019

Start of the year according to plan

2

* Excluding items affecting comparability

• Net sales of +4%, despite Consumer Brands exit impact of -3% (FX adjusted)

- All divisions delivered growth in core categories

• Operating income* grew by 23%

- Volume, product mix and price

- Efficiency savings and restructuring on plan

- Increased costs for raw materials and tariffs higher than positive currency effect

• Continue to invest in strategic initiatives and build on our strengths

0%

4%

8%

12%

16%

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Divisional growth development

(%)

3Note: New divisional structure from 1 Jan 2019. Exit of Consumer Brands business impacted Q1 growth in Gardena by 4 ppts, Husqvarna by 4 ppts and Group by 3 ppts Organic growth for the Group was 4% in Q1 and 0% for Construction Division

0%

2%

4%

6%

8%

+5%

+4%

(%)Old structure (rolling 12 months) New structure, from Q1 2019

Total Husqvarna Gardena Construction

+2%

+5%

Delivering on our profitability improvement

trajectory

4

5,0%

5,5%

6,0%

6,5%

7,0%

7,5%

8,0%

8,5%

9,0%

9,5%

10,0%

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Q3

201

3

Q4

201

3

Q1

201

4

Q2

201

4

Q3

201

4

Q4

201

4

Q1

201

5

Q2 2

015

Q3

201

5

Q4

201

5

Q1

201

6

Q2

201

6

Q3

201

6

Q4

201

6

Q1

201

7

Q2

201

7

Q3

201

7

Q4

201

7

Q1

201

8

Q2

201

8

Q3

201

8

Q4 2

018

Q1

201

9

Operating incomerolling 12 months*

Operating marginrolling 12 months*

SEKm

*Excluding items affecting comparability

Group operating income and margin development

Husqvarna Division

• Growth in all regions. Earlier sell-in in North America

• Exited Consumer Brands business impacted sales growth by

-4 percentage points, currency adjusted

• Operating income* grew by 18%:

− Positive contribution from volume, price and savings from

efficiency program and restructuring

− Costs for raw materials/tariffs higher than currency contribution

− Continued strategic initiatives

5

SEKm

Q1

2019

Q1

2018

Change,

%

Rolling 12

months

Jan–Dec

2018

Net sales 9,506 8,484 12 28,178 27,156

Currency adjusted change, % 5 -5 – - -2

Operating income* 1,228 1,044 18 2,290 2,106

Operating margin*, % 12.9 12.3 – 8.1 7.8

*Excluding items affecting comparability

Gardena Division

• High sell-in volumes to trade partners - especially watering

• Exited Consumer Brands business impacted sales growth by

-4 percentage points, currency adjusted

• Operating income grew by 41%:

− Positive contribution by volume and price

− Strong product mix

− Restructuring and cost efficiency savings

6

SEKm

Q1

2019

Q1

2018

Change,

%

Rolling 12

months

Jan–Dec

2018

Net sales 2,630 2,483 6 8,265 8,118

Currency adjusted change, % 2 3 – - 8

Operating income* 372 264 41 759 651

Operating margin*, % 14,1 10,6 – 9.2 8.0

*Excluding items affecting comparability

Construction Division

• Currency adjusted net sales growth of 5%. Flat adjusted for

acquisitions

− Good growth in Europe and decrease in North America

• Operating income grew by 12%:

− Positive contribution from volume and price, partly offset by

unfavorable geography mix

− Positive currency balancing costs for raw materials and tariffs

• Continued strategic initiatives and integration of acquisitions

7

SEKm

Q1

2019

Q1

2018

Change,

%

Rolling 12

months

Jan–Dec

2018

Net sales 1,494 1,328 13 5,928 5,762

Currency adjusted change, % 5 16 – - 12

Operating income* 177 158 12 735 716

Operating margin*, % 11.8 11.9 – 12.4 12.4

*Excluding items affecting comparability

Leading innovation – Automower® 435X AWD

Husqvarna Construction Products at Bauma 2019

9

HusqvarnaFleet servicesTM

New battery powered products

High levels of booth traffic

Gardena is recognized as a prominent brand

Consolidated income statement

11

• Gross margin +1.3 ppts– Volume and price increases

– Favorable product mix

– Efficiency program and

restructuring

• SG&A– Strategic initiatives

– Currency effect

• Operating income* grew by 23%

• Financial net – IFRS16 and higher interest rates

• Tax rate of 23% (24)

SEKm

Q1

2019

Q1

2018

Rolling 12

months

Jan-Dec

2018

Net sales 13 651 12 303 42 433 41 085

Cost of goods sold -9 548 -8 756 -31 375 -30 583

Gross income 4 103 3 547 11 058 10 502

Gross margin, % 30,1 28,8 26,1 25,6

Selling expenses -1 909 -1 667 -6 715 -6 473

Administrative expenses -542 -506 -2 050 -2 014

Other operating income/expense -8 -1 48 55

SG&A, % of net sales 18,0 17,7 20,5 20,5

Operating income* 1 686 1 373 3 554 3 241

Operating margin*, % 12,3 11,2 8,4 7,9

Items affecting comparability -42 0 -1 213 -1 171

Financial items, net -160 -137 -532 -509

Income tax -344 -296 -396 -348

Income for the period 1 140 940 1 413 1 213

Earnings per share, after dilution, SEK 1,99 1,64 2,47 2,12

*Excluding items affecting comparability

Direct operating cash flow (accumulated)

12

-3 000

-2 000

-1 000

0

1 000

2 000

3 000

4 000

Q1 Q2 Q3 Q4

SEKm

2019 2018 2017

Note: excluding items affecting comparability

Further potential for capital efficiencyOperating working capital / net sales

27,1% 27,2%

26,6%26,8%

27.5%

26,0%

26,5%

27.5%

25.8%

20%

22%

24%

26%

28%

30%

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

25.9%25.5%

26.6%

Target level <= 25%

13

28.1%

Consolidated balance sheet

14

• Trade receivables increase

driven by net sales growth

• High inventory levels

– Seasonal build-up and exchange

rate effect

– Increase of robotic lawn mower

inventory to lower Brexit risk

• Net debt of SEK 13,5bn (9,2)

– IFRS 16 effect of SEK +1.5bn

– Exchange rate effect and

financing

– Dividend

SEKm

March 31

2019

March 31

2018

December 31

2018

Non-current assets 22 981 20 244 21 000

Inventories 11 721 10 302 11 067

Trade receivables 8 797 8 037 3 613

Other current assets 2 193 1 251 1 581

Liquid funds 1 514 2 426 1 346

Total assets 47 206 42 260 38 607

Total equity 17 250 16 980 16 009

Interest-bearing liabilities 11 959 10 269 9 806

Lease liabilities 1 745 203 207

Provisions for pensions 2 225 1 813 2 101

Other provisions 3 190 3 166 3 160

Trade payables 6 629 6 096 4 622

Other current liabilities 4 208 3 733 2 702

Total equity and liabilities 47 206 42 260 38 607

Net debt / EBITDA (based on average net debt)

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

Q12013

Q2 Q3 Q4 Q12014

Q2 Q3 Q4 Q12015

Q2 Q3 Q4 Q12016

Q2 Q3 Q4 Q12017Q2 Q3 Q4

Q12018

 Q2  Q3  Q4 Q1

Times

Average net debt / rolling 12 months EBITDA, excl. items affecting comparability

15

1.9x

Q2 Q3 Q4

16

Execute on the key levers in the margin improvement trajectory

Continue to:

Build on our brand strengths

Bring tech innovations to market

Invest in strategic initiatives to secure leadership positions

Our priorities in 2019

Capital Markets Day 2019 – welcome!

17 September in Huskvarna

17

18

Thank you!Next report is out 16 July

Johan AnderssonDirector, Group Corporate

Communications and Investor Relations

Ir@husqvarnagroup.com

08-738 99 79