Interim report January - June 2011

Interim report January - June 2011

Hans Linnarson, Acting CEO and President:
”For the second quarter, reported sales for the Group decreased eleven
percent, but adjusted for exchange rates the decrease was one percent.
For the first half-year sales adjusted for exchange rates increased by
two percent. Industry demand decreased inNorth Americaand together with
the supply chain challenges in the Orangeburg factory sales were
affected negatively. The European market started strongly but slowed
down towards the end of the second quarter. Adjusted sales for Europe &
Asia/Pacific increased four percent for the second quarter, which was in
line with the total market. For Construction the positive development
continued and market shares increased.
The production disturbances continued to hamper the output from
Orangeburg as well as resulting in higher costs. As a result of measures
taken, the going cost rate directly related to the disturbances
gradually decreased. In the first quarter, the costs were approximately
SEK 150m, whereof the majority in March. The total amount for the second
quarter was SEK 180m.
Our highest priority going forward is to secure deliveries to our
customers for the 2012 season in a timely manner. Further measures will
be taken within the Orangeburg factory which is expected to result in
SEK 100 - 150m higher costs during the remainder of 2011. We are also
planning to increase our pre-season production.
As production capacity and flexibility to guarantee the highest delivery
performance will be prioritized, we will also review the pace of our
ongoing restructuring projects. Savings from manufacturing footprint
restructuring will therefore be delayed.
The Group's operating income declined in the second quarter. Higher
selling prices and a favorable mix were not able to offset negative
currency effects, costs related to the production disturbances, higher
input costs and marketing expenses.”

Second quarter

  · Net sales amounted to SEK 10,179m (11,457) and operating income to
SEK 1,012m (1,319). Income for the period amounted to SEK 681m (936), or
SEK 1.18 (1.62) per share.
  · Net sales and operating income, adjusted for exchange rate effects
and items affecting comparability, decreased by 1% and 23% respectively.
  · Changes in exchange rates had a negative year-on-year effect on
Group operating income of approximately SEK -170m.
  · Costs related directly to production disturbances inNorth
Americaamounted to approximately SEK 180m.
  · Adjusted sales increased for Europe & Asia/Pacific and Construction
but declined forAmericas.
  · Hans Linnarson, Head of Sales Europe & Asia/Pacific, was appointed
acting CEO and President.

Telephone conference
A telephone conference will be held at 11:00CET on July 19, 2011. To
participate by telephone, please call +46 (0)8 5052 0110 or +44 (0) 20
7162 0077 ten minutes prior to the start of the conference. The
conference call will also be audio cast live. To participate in the
audio cast, log on to www.husqvarna.com/ir. A replay of the telephone
conference will be available at www.husqvarna.com/ir.

Contacts:
Ulf Liljedahl, CFO, +46 738 84 42
Boel Sundvall, SVP Corporate Communications & IR, +46 8 738 70 18
Tobias Norrby, Investor Relations Manager, +46 8 738 83 35
Husqvarna Press Hotline, +46 8 738 70 80