Husqvarna Group: INTERIM REPORT JANUARY - JUNE 2026

Second quarter 2026 Net sales decreased organically by 4%. Net sales declined by 6% to SEK 14,383m (15,277), and included an impact of -2% from changes in exchange rates. Operating income amounted to SEK 1,600m (2,063) and the operating margin was 11.1% (13.5). Items affecting comparability (IAC) amounted to SEK -349m. These were primarily related to the execution of cost-saving initiatives, as well as a write-down associated with the Brastad factory. Excluding IAC, operating income amounted to SEK 1,950m (2,041), and the operating margin was 13.6% (13.4). IEEPA-related tariff refunds of SEK 240m were recognized in COGS. Earnings per share (EPS) after dilution amounted to SEK 1.80 (2.76) and EPS excluding IAC and after dilution amounted to SEK 2.27 (2.73). Free operating cash flow was SEK 3,903m (2,459). Net debt was SEK 11.8bn (12.3). January – June 2026 Net sales declined organically by 1%. Net sales declined by 5% to SEK 28,344m (29,981), and included an impact of -4% from changes in exchange rates. Operating income amounted to SEK 3,311m (3,594) and the operating margin was 11.7% (12.0). Items affecting comparability (IAC) amounted to SEK -357m. These were primarily related to the execution of cost-saving initiatives, as well as a write-down associated with the Brastad factory. Excluding IAC, operating income amounted to SEK 3,667m (3,602), and the operating margin was 12.9% (12.0). Earnings per share (EPS) after dilution amounted to SEK 3.85 (4.45) and EPS excluding IAC and after dilution amounted to SEK 4.32 (4.46). Free operating cash flow was SEK 2,766m (2,329). CEO Comment Following a solid start to the year, with strong sell-in to channel partners supported by successful product launches, trading conditions were challenging in the second quarter. Ongoing geopolitical uncertainty and weak consumer sentiment continued to weigh on demand, while unfavorable weather in Europe during the first six weeks of the quarter further slowed sell-out and replenishment. North America continued its recovery, delivering solid growth across most product categories. European weakness impacted performance In the quarter, net sales amounted to SEK 14,383m (15,277), corresponding to organic growth of -4% compared with a strong second quarter last year. The decline was primarily driven by an 11% organic sales decrease in the Gardena Division and a 3% decline in the Husqvarna Forest & Garden Division, while the Husqvarna Construction Division delivered organic growth of 5%. Operating income, excluding IAC, amounted to SEK 1,950m (2,041), with the margin improving to 13.6% (13.4). The result included IEEPA-related tariff refunds of SEK 240m. Excluding the tariff refunds, earnings were impacted by lower sales volumes, continued inflationary pressure, higher raw material and logistics costs, as well as negative currency effects. Free operating cash flow improved to SEK 3,903m (2,459), driven by reductions in working capital. Our financial position remained solid and we reduced net debt to SEK 11.8bn (12.3). Accelerating savings and operational excellence While we continue to make progress with our cost savings program, and we have now reached run-rate savings of approximately SEK 630m, with a quarterly contribution of SEK 385m, the benefits are not yet enough to fully offset the external headwinds we face. We are therefore raising our ambition and now target savings of SEK 3 billion by end of 2028. During the year, we have closed several warehouses in Europe within the Construction Division, while additional consolidation initiatives are underway across the Group. We also completed our first Group-wide transportation tender, reducing our supplier base by two-thirds and leveraging the Group's scale. During the quarter, we announced the planned discontinuation of our non-core stone diamond tools business within the Husqvarna Cons...