A successful year
Strong results despite a challenging year
"We achieved a continued strong sales growth in our seasonally smallest fourth quarter. The growth was largely driven by our core categories robotics & battery-powered products, handheld products and watering solutions and supported by a prolonged season. This resulted in a net sales growth of 13%*. The development was particularly strong for the Husqvarna and Gardena Divisions, up 19%* and 13%*, respectively, where we strengthened our market positions. The construction industry is severely impacted by the effects of Covid-19 and the net sales of the Construction Division decreased by 2%* in the quarter.
2020 - a successful year
Our primary focus during 2020 has been the health and safety of the employees while decisively safeguarding the business continuity. The good performance in the fourth quarter concludes a record year where we, as a result of hard diligent work over several years, have now reached our financial targets, growth, profitability and capital efficiency, despite a volatile and challenging macro environment marked by the Covid-19 pandemic. Group net sales increased by 6%* during 2020 which demonstrates our strong position and agility to adapt to rapid shifts in demand. The growth was also supported by the stay-at-home trend and an extended gardening season.
Overall, we achieved an operating margin of 10.7% for the year, excluding items affecting comparability of SEK -815m (-225), related to the handheld supply chain efficiency measures we announced in Q3. The improved margin was driven by sales growth in all our regions, product mix effects and temporary cost avoidance activities. Direct operating cash flow* increased to SEK 6.1 billion (3.8) for the year. The Board of Directors will propose a dividend of SEK 2.40 (2.25) per share to the AGM for 2020.
Our strategic focus on sustainability has resulted in a reduction of absolute CO\2\ emissions across the value chain by 32% compared with the base year 2015. As we enter the new phase of Sustainovate 2025, we continue our commitment to contribute to limiting the global warming to 1.5 degrees.
Raised strategic ambitions & investing in the future
As previously announced, we are accelerating our strategic growth investments by 50% annually or SEK 250m and focus on innovative, sustainable products and solutions. We are increasing our investments in R&D, production, and go-to-market capabilities for our core categories. One example is CEORA, our latest robotic lawn mowing platform for large, commercial turf areas operating within virtual boundaries. With CEORA, we aim to transform professional green landscaping with an automated, cost-efficient, and sustainable solution. Another example is stepping up our efforts pertaining to digital services, where in 2020 we passed the milestone of one million connected customers on our digital platforms.
In conclusion, we delivered a strong fourth quarter resulting in a record year, achieving our financial targets and strengthened our market positions. I would like to sincerely thank our team around the world for tremendous efforts and commitment during the year. With the global uncertainty of the Covid-19 situation, we are well prepared to adapt to fluctuations in demand and focus to protect the health and safety of our employees and business partners. We will continue to accelerate our strategy to further strengthen our market positions and technology leadership."
*Net sales is adjusted for changes in exchange rates, and for the Husqvarna and Gardena Divisions', exits of the Consumer Brands business.
[image] Henric Andersson, President & CEO
A conference call, hosted by Henric Andersson, President & CEO, and Glen Instone, CFO, will be held at 10:00 CET on February 3, 2021.
To participate, please dial +46 (0) 8 505 583 51 (Sweden) or +44 333 300 9274 (UK) ten minutes prior to the start of the conference. Conference ID: Husqvarna.
The conference call is also available through https://husqvarna-group.creo.se/210203. A replay will be available later the same day.
Glen Instone, CFO, Senior Vice President, Finance, IR & Communication +46 8 738 90 00
Johan Andersson, Director, Group Corporate Communications and Investor Relations, +46 702 100 451
This report contains insider information that Husqvarna AB is required to disclose under the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the contact person set out above, at 07.30 CET on February 3, 2021