Annual Report 2009 - Husqvarna Group

34 Husqvarna Annual Report 2009 Report by the Board of Directors
Major R&D projects during the year referred mainly to the
products mentioned above.
During 2009 the Group has also capitalized SEK 60m (12)
mainly referring to software.
Financial position
Operating working capital
Operating working capital at year-end decreased to SEK 7,237m
(9,460). Inventories declined to SEK 6,706m (8,556) and trade
receivables to SEK 3,385m (4,184). Trade payables declined to
SEK 2,854m (3,280).
Change in operating working capital
SEKm
31 December 2008 9,460
Changes in exchange rates –226
Other changes –1,997
31 December 2009 7,237
Equity
Group equity as of 31 December 2009, excluding minority
interests, rose to SEK 12,082m (8,772), corresponding to
SEK 22.0 (19.3) per share. The increase is mainly a result of the
rights issue. Equity per share for 2008 has been adjusted to
reflect the rights issue in 2009.
Net debt
Net debt at year-end decreased to SEK 6,349m (13,552). Liquid
funds were largely unchanged at SEK 2,745m (2 735), while
interest-bearing debt decreased to SEK 9,094m (16,287). The
reduction in net debt is mainly a result of the rights issue that
was completed in April and the improvement in cash flow during
the year.
At year-end the Group had unutilized committed credit facilities
of SEK 10,000m (6,500).
For more information about the Group’s funding, see Note 2.
The net debt/equity ratio improved to 0.52 (1.54) and the
equity/assets ratio to 40.1% (25.7). The improvement in both
ratios resulted mainly from the rights issue and a reduction of
working capital.
Net debt
SEKm 2009 2008
Interest-bearing liabilities 9,094 16,287
Liquid funds 2,745 2,735
Net debt 6,349 13,552
Net debt/equity ratio, times 0.52 1.54
Equity/assets ratio, % 40.1 25.7
Seasonality in sales and income
The majority of Group sales are garden products, which show
a pronounced seasonality in terms of sales and income. The
first half of the year normally accounts for about two thirds of
Group sales, with the second quarter usually being the strongest.
This refers particularly to Consumer Products, but also to
Lawn and Garden within Professional Products. Irrigation
products have a larger share of sales and operating income in
the first half of the year, and particularly in the second quarter,
than the rest of the Group’s consumer products.
Forestry products show stronger demand and somewhat
higher sales during the second half of the year, while equipment
for the construction industry normally shows a more
even distribution of sales throughout the year.
Demand for the Group’s products is also dependent on
weather conditions. Dry weather tends to reduce demand for
such products as lawn mowers and tractors, but to increase
demand for irrigation products. Demand for chainsaws normally
increases after storms.
Performance by business area
Until year-end 2009, operations in Husqvarna comprised two
business areas – Consumer Products and Professional Products.
Consumer Products includes two geographical areas, i.e.
North America and Rest of the world. Professional Products
includes three product areas, i.e. Forestry, Lawn and Garden,
and Construction.
As of 1 January 2010, the Group has a new organization,
which will involve a change of the Group’s reporting structure
as of the first quarter of 2010 (see page 96).
Operating cash flow
Capital expenditure
Earnings per share and return
on equity
SEKm
4,000
%
15
SEKm
1,500
%
10
SEK
10
%
50
3,200
12
1,200
8
8
40
2,400
9
900
6
6
30
1,600
6
600
4
4
20
800
3
300
2
2
10
0
05 06 07 08 09
Operating cash flow, SEKm
Operating cash flow/net sales, %
0
0
05 06 07 08 09
Capital expenditure, SEKm
Capital expenditure/net sales, %
0
0
05 06 07 08 09
Earnings per share, SEK
Return on equity, %
0