Financial targets

Husqvarna Group´s financial targets should direct and support the Group in delivering on its strategy. As the Group now shifts its focus from margin recovery to profitable growth, new financial targets have been set for 2017 and beyond. In addition, the Group established a sustainability strategy. Regarding the financial targets to 2016, the dividend and capital structure targets were reached. The operating margin improved from 7,.8 percent to 8.9 percent, despite significant margin dilution due to changes in exchange rates and costs for investments in growth initiatives.

New financial targets from 2017

As announced in September 2016, the Group’s new financial targets come into effect in 2017. Following the focus on and successful execution of the margin improvement in recent years, stronger emphasis will be placed on profitable growth. The Group aims to grow 1 to 2 percentage points more than the annual long-term market growth rate, which is estimated to be 2 to 3 percent. This target excludes the Consumer Brands Division, which will continue to have margin improvement as its first priority. The new financial targets, that are average over the coming years, and valid as of 2017, are:

Net sales growth

3–5 %

Operating margin

Between 3 and 5 percent annual currency adjusted organic net sales growth, excluding the Consumer Brands Division.

≥10 %

Operating working capital

Operating margin of at least 10 percent.

25 %

Operating working capital in relation to net sales of a maximum of 25 percent. 

Long-term financial goals valid up to 2016:

Operating margin

  • Operating margin of more than 10% over the course of a business cycle.

Capital structure

  • Capital structure should meet criteria for long-term credit rating corresponding to at least BBB. This is considered to require that seasonally adjusted net debt in relation to EBITDA should not exceed a multiple of 2,5 in the long term.

Dividend

  • The dividend shall normally exceed 40% of income for the year.

Goal achievement 2016

Operating margin

  • Operating margin amounted to 8.9% in 2016.
  • Average operating margin was 6.5% 2012-2016, and 6.8% 2007-2016.

Capital structure

  • Seasonally adjusted net debt/EBITDA was 1.6 at year-end 2016.

Dividend

  • The Board proposes a dividend for 2016 of SEK 1.95.
  • The payout ratio for 2016 corresponds to 53% of income for the year.