SERVICE

IPL, 236 R, 2009-01

Spare parts Ersatzteile Pices dtaches Reserve onderdelen Repuestos Reservdelar

HIPL200904

236R GEAR

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Article 86-74 65-18 95-24 10-86 20-86 24-34 89-12 41-12 79-13 00-60 99-86 08-12 78-34 88-34 87-13 14-29 40-52 22-34 90-65 60-66 22-29 11-01
GEAR Quantity 1 Notes Kit

236R TUBE & SHAFT

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Article 44-80 67-29 52-29 53-29 54-29 55-29 57-33 08-33 08-29 58-23 14-98 64-01
TUBE & SHAFT Quantity Notes Kit

M5x22 EU

236R HANDLEBAR

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Article 29-31 59-29 46-53 33-29 49-29 47-29 48-17 28-17 29-20 02-23 14-01
HANDLEBAR Quantity 1 Notes Kit

Screw M5x25

236R THROTTLE HANDLE

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Article 66-18 35-16 03-16 02-49 77-16 07-71 82-17 42-17 43-22 10-21 66-20 07-82
THROTTLE HANDLE Quantity Notes Kit

236R CLUTCH

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Article 29-29 30-29 32-29 33-29 34-53 35-53 74-53 25-29 38-22 02-29 40-31 16-31 24-29 76-29 77-29 78-29 80-29 81-01
CLUTCH Quantity Notes Kit

236R IGNITION

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Article 82-29 83-29 84-29 85-29 86-29 87-29 88-29 89-29 90-29 91-89 56-01
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Article 05-30 06-30 11-30 13-78 05-04
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236R MUFFLER

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Article 93-29 94-29 95-29 96-29 97-29 98-01
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236R STARTER

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Article 17-30 18-30 19-30 22-30 25-30 26-30 28-30 34-30 39-30 43-30 44-30 46-31 14-03
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236R TANK

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Article 13-67 10-61 53-36 24-61 46-61 13-31 09-11 34-01
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236R INTAKE

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Article 47-30 49-30 50-30 87-30 88-30 89-30 90-30 91-30 92-30 93-61 71-30 15-30 48-61 52-74 41-01
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236R CYLINDER & PISTON

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Article 26-06 43-33 45-43 70-14 98-28 30-79 47-96 57-53 74-23 12-01
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Article 75-29 65-29 92-79 47-96 57-01
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Article 60-29 66-29 67-12 58-29 64-29 61-29 62-11 31-29 99-30 00-30 02-30 04-53 35-55
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236R CARBURETTOR

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Article 41-61 31-05 51-05 56-30 60-05 58-30 61-05 60-61 32-61 33-61 27-05 64-30 69-30 70-30 72-61 70-61 25-61 35-61 28-61 69-61 26-38 58-30 84-61 34-34 67-35 88-59 80-59 81-01
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236R ACCESSORIES

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Article 16-31 18-31 19-31 20-31 23-35 91-01 45-00 92-97 64-19 22-73 40-73 41-02 28-21 63-01
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Article 16-39 63-21 68-79 88-12 45-38 72-01
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product development. We also had duplications in sales administration and too many brands, which we would ultimately have been unable to maintain through product innovations and communication support. One of the key measures of the new strategy was the introduction of a new organization from 2010. The new organization provides us with better prerequisites for capitalizing on the economies of scale derived from our leading global position and size, as well as to maximize the impact of our investments in innovation, brands and infrastructure. Success in our industry requires strong brands, attractive products, global distribution and an efcient and exible supply chain. We are already successful in all four of these areas, although our aim is to create an even stronger position for the Group. Strong global brands Going forward, we will prioritize our global brands Husqvarna, Gardena, McCulloch, and Diamant Boart. Husqvarna, Gardena and Diamant Boart are already premium brands enjoying strong positions while McCulloch will be launched as a premium brand for consumer products. Attractive products through consumer-driven innovation Attractive and relevant products are crucial to Husqvarnas future success. With a global product development organization in a limited number of key locations, we will cost-efciently develop and launch products. Using an
in-depth understanding of the customers needs, we will enhance the precision and rate of product development for a global market. New riders and lawn mowers for professionals and consumers, as well as the expanded range of robotic lawn mowers, are the latest launched products which became best sellers in 2010. During 2011, additional launches will include another robotic lawn mower and a new platform for professional chainsaws. Our most recent robotic lawn mower, Husqvarna Automower 305, was developed for single-family homeowners, with small gardens. Efcient sales organization In 2010, we simplied and enhanced the efciency of our sales organization by merging sales administrations into a single ofce per country. To further strengthen our relationships with the dealers, we expanded our range of spare parts, as well as improved our service and training programs. Lean Manufacturing for increased productivity A key initiative has been to globally coordinate our supply chain purchasing, manufacturing, inventory and logistics. A program for driving continuous improvements, known as Lean Manufacturing the Husqvarna Operating System is being introduced to all our production facilities. Productivity improvements in the units that have introduced the program are excellent.

KEY DATA

Net sales, SEKm Share of Group net sales, % Operating income excl. items affecting comparability, SEKm Operating margin excl. items affecting comparability, % Net assets, SEKm Capital expenditure, SEKm Average number of employees

16,2,383 14.3 11,7,278

16,1,710 10.3 12,

16,2,368 14.0 14,

15,2,490 16.0 12,
NET SALES AND OPERATING MARGIN

SEKm 20,000 % 20

PRODUCT RANGE Ride-on products: riders (with front-mounted cutting deck), garden tractors and zero turn lawn mowers. Walk-behind lawn mowers, robotic lawn mowers, tillers and snow throwers. Handheld products: chainsaws, trimmers, clearing saws, blowers and hedge trimmers. Watering products: hoses, couplings, sprinklers, etc. Accessories, garden tools and spare parts. BRANDS Global premium brands: Husqvarna, Gardena and McCulloch. Other brands: Jonsered, Flymo, Klippo and Zenoah. Read more about the Groups brands on page 6.
END-USERS Home and landowners. Professional landscape and ground care. Professional forest and tree care.
DISTRIBUTION CHANNELS Large retailers such as B&Q, Leroy Merlin, OBI, Bauhaus. Dealers. Read more about the distribution channels on page 7.

15,000

Net sales, SEKm Operating margin, %1
PRODUCT SOURCING Czech Republic: watering products and garden tools. Germany: watering products, garden tools and batterypowered garden tools. Poland: lawn mowers and ride-on lawn mowers. Sweden: trimmers, clearing saws, chainsaws, lawn mowers and ride-on lawn mowers. UK: electrical lawn mowers, and robotic lawn mowers. US: ride-on lawn mowers, lawn mowers and snow throwers. Brazil: handheld products such as chainsaws and trimmers. China: handheld products such as trimmers and chainsaws in the low-price segment. Japan: chainsaws and other handheld products.
MAIN COMPETITORS Bosch Echo Fiskars Global Garden Products (GGP) Hozelock John Deere Modern Tool and Die Company (MTD) Shindaiwa Stihl Toro Read more about competitors and the market on pages 1213.

PRODUCT SOURCING Sweden: handheld products such as chainsaws and clearing saws. US: McRae, Georgia: walkbehind lawn mowers. US: Nashville, Arkansas: handheld products such as chainsaws, trimmers and blowers. US: Orangeburg, South Carolina: ride-on lawn mowers and snow throwers. Brazil: handheld products such as chainsaws and trimmers. China: handheld products such as trimmers and chainsaws in the low-end segment.
MAIN COMPETITORS Echo John Deere Modern Tool and Die Company (MTD) Stanley Black & Decker Shindaiwa Stihl Toro Private labels Read more about competitors and the market on pages 1213.
Business areas: Construction
Construction Increased market shares through innovative product development
HUSQVARNA K 970 POWER CUTTER Husqvarnas latest and most powerful handheld power cutter, featuring the revolutionary X-Torq engine technology. It is a unique machine, in a class of its own when it comes to emission levels, efciency and maneuverability.
After a few challenging years for the construction industry, market demand turned upward. Husqvarnas focus on and continued investments in new innovative products gave results. Sales and income increased and market shares were strengthened.
Husqvarna is a world leader in products for the construction and stone industries. The products are sold in more than 70 countries under the Husqvarna and Diamant Boart brands. Husqvarna develops, manufactures and sells mainly light construction products for cutting drilling, grinding, polishing and demolition of concrete and other hard material and steel. Products include demolition robots and power cutters, drilling equipment, wall- and wire saws, oor- and tile saws and all related diamond tools. Husqvarna also develops, manufactures and sells a full range of diamond tools for the natural stone cutting and grinding markets. The global market for Husqvarnas product range for the construction and stone industries is valued at approximately SEK 18 billion. The market is fragmented, with many small, local competitors and few global suppliers in the product areas where Husqvarna is active.
The largest product categories for the industry are power cutters, drill motors and oor saws. Husqvarnas products are primarily used for the renovation and construction of commercial properties and infrastructure projects, and in the stone industry. Read more about the market on pages 1213. Global market leader Husqvarnas combined global market share in relevant product categories amounts to around 15 percent. The Group is either the largest or second-largest player in most product categories. Positions are strongest for power cutters, oor-, wall- and wire saws. The product development rate is high, and Husqvarna has launched many new techniques and products over recent years. The products are used exclusively by professional users who demand high-level performance, reliability and high levels of technical service. Satisfying these demands is crucial for success.

LIFE CYCLE THINKING

Recycling and disposal Product design

Product usage

Procurement of material and components

Sales and service

Manufacturing and facilities
Transportation and distribution
Life Cycle Thinking is going beyond the focus on manufacturing site so that environmental impact over the products entire life cycle is taken into account. Life Cycle Thinking helps us continuously improve the environmental aspects of our products and processes in each phase of the product life cycle, from raw material sourcing till the end of life of the product. Life Cycle Thinking seeks
to identify possible improvements to products in the form of lower environmental impacts and reduced use of resources across all life cycle stages. This begins with raw material extraction and conversion, then manufacturing and distribution, through to use and/or consumption. It ends with recycling of materials and disposal.
life cycle from product creation, procurement of material and production, to use and recycling. In order to reduce the environmental impact of products during use, Husqvarna is developing several technologies such as X-TORQ,
which reduces hydrocarbon emissions and fuel consumption. Carbon Disclosure Project (CDP) CDP is an independent not-forprot organization, supported by hundreds of investors from all
over the world, that gathers information from companies and organizations about their climate impact and what it means for their operation. Husqvarna has been reporting to CDP since 2008.
AVERAGE CO2 EMISSIONS FROM TRANSPORTATION AND DISTRIBUTION PER SHIPMENT, 2010

KEY ENVIRONMENTAL RATIOS

Emissions of carbon dioxide, tons of which employees air travel, tons Number of serious environmental incidents Plants and larger warehouses with dened environmental goals, %3 Plants with installed environmental management systems, %1, 2 Production area with installed environmental management system, %

163,606 5,81

159,800 4,78
According to ISO 14001. 2) Plants with more than 50 employees. 3) Warehouses above 5,000 m2.
Approximation of the total average CO2 emissions per shipment. All transport companies are not included in the survey.
Sustainable development: Social responsibility

Social responsibility

Husqvarnas social responsibility includes the development of personnel, the working environment, working conditions, respect for human rights, and a constructive social commitment.
AIESEC THE PARTNERSHIP IS AN INVESTMENT IN THE FUTURE In 2009, Husqvarna began a partnership with AIESEC, the worlds largest student organization. AIESEC is represented in more than 1,700 universities across over 100 countries. AIESEC is a platform for students who are looking for international career opportunities. Husqvarnas objective with the partnership is to help students enter the labor market and secure the Groups global need for individuals with the appropriate expertise and level of ambition. Since beginning the partnership, Husqvarna has employed 20 trainees through AIESEC placed at six of the Groups facilities. To date, 85 percent of the trainees have remained at Husqvarna after the conclusion of their traineeship.

Sales for Construction in 2010 increased by 2 percent. Adjusted for exchange-rate effects sales increased by 6 percent, of which sales in the US accounted for the majority of the increase. Sales prices were relatively stable. Total market demand for construction products improved in both North America and Europe during the year. Group sales to all sales channels rental companies, dealers and contractors increased. A number of new products were successfully launched and the Groups market shares are estimated to have increased. Operating income increased to SEK 82m (123) and the operating margin improved to 3.1 percent ( 4.7), mainly as a result of higher volumes as well as sales of new products with higher margins. Operating income was charged with restructuring costs amounting to SEK 47m (54). Operating income, excluding items affecting comparability, increased to SEK 129m (69) and the corresponding operating margin increased to 4.8 percent (2.6). Other information New organization A new organization was implemented as of January 1, 2010. Instead of the previous six product-based business sectors, the new organization comprises ve business units Supply Chain, Products & Marketing, Sales in Europe & Asia/Pacic, Sales in Americas and Construction. Supply Chain and Products & Marketing are shared services for the sales organizations in Europe & Asia/Pacic and Americas.

CONSTRUCTION NET SALES

3,2,1,200
The change in number of shares in each series of shares during the year refers to the conversion of A-shares to B-shares on behalf of shareholders. The total number of outstanding shares was unchanged during the year. Each A-share carries one vote, and each B-share 1/10 of a vote. All shares enjoy equal rights in terms of the companys assets and earnings. There are no restrictions on the transfer of shares, voting rights or the right to participate in the AGM. Nor is the company party to any signicant agreements which might be affected, changed or terminated if control of the company were to change as a result of a public bid for acquisition of shares in the company. The company is not aware of any agreements between shareholders which might limit the right to transfer shares. In addition, there are no stipulations in the Articles of Association regarding appointment or dismissal of Board members or agreements between the company and Board members or employees which require remuneration if such persons leave their posts, or if employment is terminated as a result of a public bid to acquire shares in the company, except as outlined in Note 24 on page 95. As of December 31, 2010 the largest shareholders were Investor AB with 30.8 percent (28.9) of the votes and LE Lundbergfretagen with 15.6 percent (14.4) of the votes. For more information on major shareholders, see page 106. Repurchase of own shares The Annual General Meeting 2010 authorized the Board to acquire B-shares totaling up to 3 percent of the total number of shares, and to pay for the shares in cash. The shares may be purchased on NASDAQ OMX Stockholm in order to hedge the companys obligations, including employer contributions, pursuant to the long-term incentive programs for 2008, 2009 and 2010. The company has the right to adjust on an ongoing basis the number of shares that it holds as a hedge of the companys obligations pursuant to the implemented incentive programs. The participants in the incentive programs shall be entitled to receive a maximum number of shares in accordance with the conditions of the programs, and transfers of shares under the programs will be made without consideration. 1,270,000 B-shares were repurchased during the year. As of year-end 2010, Husqvarna owned 3,906,007 repurchased B-shares (2,723,128) corresponding to 0.68 percent (0.47) of the total number of outstanding shares. Long term incentive program for 2010 The Annual General Meeting 2010 adopted a new performance based long-term incentive program based on parameters similar to those of the 2007, 2008 and 2009 programs. The program comprises approximately 45 senior managers. The conditions involved investment by the participants in Husqvarna B-shares at market price. The employee is required to purchase Husqvarna B-shares corresponding to a value of between 5 percent and 10 percent of his or her annual target income (xed salary plus variable salary on target level). For each B-share purchased the company will allocate one share award and performance based stock options, if the lowest performance target level, the development of the Groups earnings per share during the period in 20102012, is achieved. Each share award entitles the employee to one B-share free of charge, three years after grant subject to reaching certain criteria. Each stock option entitles the holder to purchase one B-share at a price of SEK 52.70. The stock options may be exercised after three years at the earliest and eight years at the latest from the day of the grant. The number of stock options that may be granted depends on

Shareholders Husqvarnas shares have been traded on the NASDAQ OMX Stockholm since June 2006. At year-end 2010, Husqvarnas share capital amounted to SEK 1,153m, represented by 134,755,087 A-shares and 441,588,691 B-shares, each with a par value of SEK 2. Series A-shares carry one vote and series B-shares carry one tenth of a vote. According to the Articles of Association, holders of series A-shares are entitled to demand conversion of series A-shares to series B-shares. In 2010, 12,814,943 series A-shares were converted to an equivalent number of series B-shares. At December 31, 2010, the number of shareholders was 66,041 (71,750). Of the total number of shares, foreign shareholders accounted for approximately 19 percent (18). At the end of the year, 90 percent (89) of the total shares were owned by legal entities, 10 percent (11) by private individuals representing 91 percent (91) and 9 percent (9),
A performance-based incentive program for 2010. Rules for the appointment and work of the Nomination Committee. Authorization for the Board to repurchase and transfer own shares. Authorization for the Board to make resolutions concerning new share issues paid for by contribution in kind to enable acquisitions paid for with own shares. Implementation of a conversion clause in the Articles of Association. The 2011 AGM will be held on May 4, 2011 at the Elmia Congress and Concert Hall in Jnkping, Sweden. For proposals to the AGM 2011, see page 42. Nomination process Board members The process of nominating Board members whose names will be proposed for election at the 2011 AGM is conducted in accordance with the nomination process that was adopted at the 2010 AGM. Husqvarnas Nomination Committee shall comprise representatives from each of the four largest shareholders, as measured by votes, and of the Chairman of the Board. The ownership structure at August 31, 2010 is used to determine the largest shareholders, as measured by votes. The names of the four shareholder representatives must be published no later than six months prior to the AGM. The Nomination Committee has a term of ofce until the date of which a new Nomination Committee is appointed. If the group of major shareholders changes during the nomination process, the composition of the Nomination Committee may be changed accordingly. The composition of the Nomination Committee was announced on Husqvarnas website and by press release on October 5, 2010. The 2011 Nomination Committee held three meetings, and had a number of
telephone contacts. The Nomination Committee has, among other duties evaluated the Boards work, competence, composition as well as the members independence. The Nomination Committee has also considered other criterias such as the Board members background, experiences and diversity. The Chairman of the Board presented the Boards evaluation for the Nomination Committee. The Nomination Committee for the 2011 AGM comprises: Petra Hedengran (Chairman), Investor AB Claes Boustedt, LE Lundbergfretagen AB Ramsay Brufer, Alecta Mutual Pension Insurance Torbjrn Callvik, Skandia Liv Lars Westerberg, Chairman of Husqvarnas Board. The Nomination Committees assignment is to produce proposals for the following matters, which will be presented to the 2011 AGM to be resolved: Proposal for the AGM Chairman, Proposal for Board members, Proposal for Chairman of the Board, Proposal for Board fees and remuneration for Committee work allocated to each member, Proposal for auditors fee, Proposals for the Nomination Committee for the 2012 AGM. The Nomination Committees proposals as well as a report on its work will be published not later than in connection with the notice of the 2011 AGM. Members do not receive fees or remuneration for their work on the Nomination Committee.

units. The GPC ensures transparency in the purchasing process as well as uniformity in terms of working methods, purchasing tools, contracts and processes throughout the organization. The Group Staff Council comprises the staff heads who regularly convene and decide, primarily, on administrative, policy and personnel issues, as well as pensions. The Finance Board is an internal Board which ensures that the nancial policy authorized by the Board of Directors is communicated and complied with throughout the Group. This policy includes guidelines for the organization and management of the Groups nancial operations, permissible risk exposure, levels of risk, and the reporting thereof. The Finance Board comprises the President, the CFO and the Head of Group Treasury. Remuneration to the Board and senior executives Principles The remuneration principles for senior executives of the Husqvarna Group set out below were established at the 2010 AGM, see Note 24, page 95. Husqvarnas remuneration principles for Group Management state that the company shall offer terms and conditions that are in line with the market and that enable the company to recruit, train and retain senior executives. Remuneration for Group Management is based on position, individual performance, the Groups earnings, and for the remuneration to be competitive in the country of employment. The compensation structure shall comprise of xed salary, variable salary in the form of a short-term incentives based on annual performance targets, long-term incentives, pension and other benets, which combined, comprise total compensation. The combined remuneration level shall be competitive and emphasize payment for performance. This means that the variable remuneration may comprise a signicant percentage of the overall remuneration. Variable remuneration to the President, the heads of the Supply Chain, Products and Marketing business units, and the Group Staff heads is based on value creation for the Group. Variable remuneration to the heads of the other three business areas is based on the following: 25 percent on value creation for the Group and 75 percent on value creation for each of their business units. For more information concerning remuneration, see Note 24 on page 95.
Members of Group Management are included in the Groups longterm incentives program for 2008, 2009 and 2010. For further information concerning these programs, see Note 24 on page 95. Remuneration to the Board 2010 Remuneration to the Board Remuneration to AGM-elected Board members is resolved on by the AGM based on proposals from the Nomination Committee. The 2010 AGM resolved on combined fees of SEK 5,805,000. It was also resolved that a portion of the Boards fees would be paid in the form of synthetic shares. See Note 24 on page 95 for more information concerning remuneration to the Board. In 2010, remuneration was paid as below. No consulting fees were paid to Board members. No remuneration is paid to Board members who are also employed by the Group. Synthetic shares Synthetic shares are not nancial instruments in the legal sense. They are a cash payment based on the trend for the trading price of Husqvarnas series B-shares. In 2010, Board members could opt to receive 25 percent or 50 percent of their gross fee before tax, excluding fees for Committee work, in the form of synthetic shares. For administrative reasons, Board members who were registered abroad could opt to receive 100 percent of their fee in cash. After ve years, meaning 2015, a holder of synthetic shares is entitled to receive a cash payment per share that corresponds to the average trading price of the serie B-shares at the time of payment. Fees to the Board 20082010 1

items and quantify risks. The results of risk analysis and evaluation are reported to the Audit Committee and are subsequently taken into account in the annual internal audit plans. Control activities Control activities are designed to prevent, identify and correct errors and deviations in the nancial reporting. Husqvarna has dened internal control standards, i.e. specications of the control activities that must be included in each business process in order to ensure and maintain a uniform level of internal control over nancial reporting within the Group. Control activities are integrated in Husqvarnas processes for accounting and nancial reporting, and include routines for authorization and signing for the company, reconciliation of bank balances and accounts, analysis of results, Segregation of Duties, automatic controls integrated in IT-systems, and control of the basic IT environment. Husqvarna maintains the following control processes for nancial reporting: Controlling Each operative unit has a controller whose responsibilities include ensuring that the units internal controls comply with Group standards, as well as compliance with Group guidelines and principles as stated in Husqvarnas Accounting Manual. The controller is also responsible for ensuring that nancial information is correct and complete and is delivered on time. In addition, controllers at business unit and Group level have corresponding responsibilities. Country Ofcers A Country Ofcer is appointed by Husqvarna in each country where the Group operates subsidiaries. The ofcers duties include safeguarding the interests of the Groups owners as well as identifying and reporting risks in such areas as scal regulations and other legislation. Letter of representation Since 2007 Husqvarna has a system for the conrmation of the nal accounts, according to which each company head and the controllers for various reporting units sign a letter of representation conrming that the nancial report package presents a true and accurate picture of the units nancial position and has been prepared in accordance with the Groups accounting standards. Group Management meetings The monthly meetings of Group Management include a review of the monthly results for the Group and for operative units, as well as updated forecasts, plans and strategic issues. Self-Assessment Each reporting operative unit submits an annual Control Self-Assessment regarding the status of its area of responsibility that is subject to internal control. The Self-Assessment report is signed by the controller. The assessment is based on a comprehensive questionnaire designed
to measure the extent of compliance with dened requirements. The unit measures its own compliance. The results of Self-Assessment are collated at Group level for evaluation of control routines, and are submitted to the Audit Committee. Routines related to acquisitions Husqvarna has established guidelines and routines designed to ensure that acquisitions of operations are accurately analyzed in terms of nancial, operational and environmental consequences. Acquisitions are evaluated at 12- and 24-month intervals following the transaction. Evaluations are reported to the Audit Committee and the Board. Information and communication Husqvarna maintains information and communication systems to ensure that nancial reporting is correct and complete. The accounting manual and other instructions for reporting are updated when necessary and are reviewed quarterly. In addition to other policies that are relevant to internal control over nancial reporting, such as investment routines and credit policy, these can be accessed on the Groups intranet by all relevant personnel. Changes in accounting are communicated and explained in quarterly newsletters from the Group accounting function. Alert line For several years the Groups operations in the US have maintained an Alert Line, also known as a Whistle Blower line, that enables employees to contact an independent third party and report actions or events that involve violations or suspected violations of e.g. laws or guidelines. During 2009 a global Alert Line was established in several languages for the entire Group. Monitoring Husqvarna maintains a comprehensive nancial reporting system for the monitoring of operations, which enables identication of possible deviations in nancial reporting at an early stage.

Robert F. Connolly Born 1943. B.A., Rochester Institute of Business, New York, USA. Elected 2006. Other major assignments: Previous positions: Executive Vice President and Chief Marketing Ofcer Walmart Stores Inc. 20012006. Positions in merchandising and marketing 19962006 and 19891993, Walmart Stores Inc. Executive Vice President as well as positions in merchandising, Montgomery Ward & Company Inc. 19941995 and 19871989. Holdings in Husqvarna: 300 A-shares, 1,000 B-shares.
Brje Ekholm Born 1963. MBA, INSEAD, France and M.Sc. Eng., Royal Institute of Technology, Stockholm, Sweden. Elected 2006. Chairman of the Audit Committee. President and CEO and Board member of Investor AB. Other major assignments: Board Chairman of the University Board of Royal Institute of Technology. Board member of AB Chalmersinvest, EQT Partners AB, Lindorff Group AB, Scania AB and Telefonaktiebolaget LM Ericsson. Previous positions: Senior management positions in the Investor Group since 1995. President of Investor Growth Capital Inc. 19982005. Responsible for New Investments 1999 and Executive Vice President of Investor AB 1997. Holdings in Husqvarna: 4,200 A-shares, 50,000 A-shares (by legal entity), 14,000 B-shares.
Auditors PricewaterhouseCoopers AB is appointed auditors for a four-year period until the Annual General Meeting 2014.
Anders Lundin PricewaterhouseCoopers AB Born 1956. Authorized Public Accountant, Auditor in charge. Other audit assignments include: AarhusKarlshamn, Electrolux, Industrivrden, Loomis, Melker Schrling and SCA. Holdings in Husqvarna: 0 shares.
Magdalena Gerger Born 1964. M. Econ., and MBA, Stockholm School of Economics, Sweden. Elected 2010. President of Systembolaget AB. Other major assignments: Board member of IKEA (Ingka Holding BV). Previous positions: Senior Vice President and responsible for Marketing & Innovation in the Nordic region, Arla Foods 20052009. Management consultant, Futoria AB, 2004. Category Director (UK and Ireland) Nestl UK Ltd, 20002003, ICI Paints 19982000 and in Procter & Gamble 19961997. Holdings in Husqvarna: 0 shares.
Tom Johnstone Born 1955. M.A., University of Glasgow, Hon. Doc. in B.A., University of South Carolina, USA. Elected 2006. Chairman of the Remuneration Committee. President and CEO and Board member of AB SKF. Other major assignments: Board member of Chalmers University of Technology and Investor AB. Previous positions: Senior management positions within AB SKF since 1987. Executive Vice President of AB SKF 19992003. President Automotive Division 19952003. Holdings in Husqvarna: 990 A-shares, 4,800 B-shares.
Ulla Litzn Born 1956. M. Sc. in Econ. and BA., Stockholm School of Economics, Sweden and MBA, Massachusetts Institute of Technology, USA. Elected 2010. Other major assignments: Board member of Atlas Copco AB, AB SKF, Boliden AB, Alfa Laval AB and NCC AB. Previous positions: President of W Capital Management AB, wholly owned by the Wallenberg Foundations, 20012005. Senior management positions and Member of the Management Group, Investor AB, 19962001. Managing Director, responsible for Core Holdings 19992000. President of Investor Scandinavia AB, 19961998. Holdings in Husqvarna: 10,000 B-shares.

SEK SEK SEK SEK EUR SEK SEK STIBOR+0.39% 4.875% STIBOR+0.46% EURIBOR+0.82% STIBOR+1.15% STIBOR+1.40%
Currency composition The currency composition of Husqvarnas borrowings is dependent upon the currency distribution of the Groups assets. Currency derivatives are used to obtain the preferred currency distribution. Net debt
Dec 31, 2010 Net debt excl. currency swaps Net debt incl. currency swaps Dec 31, 2009 Net debt excl. currency swaps Net debt incl. currency swaps
Interest rate risks on liquid funds and borrowings Interest rate risk refers to the adverse effects of changes in market interest rates on the Groups net income. The main factor determining this risk is the interest-xing period. Interest rate risk in liquid funds Group Treasury manages the interest rate risk of the investments in relation to a benchmark position dened as a one-day holding period. Any deviation from the benchmark is limited by a risk mandate. Derivative nancial instruments, such as futures and forward rate agreements, are used to manage the interest rate risk. The holding periods of investments are mainly short-term. The majority of investments are undertaken with maturities of between 0 and 3 months. The xed interest term for these current investments was 57 days (14) at the end of 2010. A downward shift in the yield curve of one percentage point would reduce the Groups interest income by approximately SEK 16m (26) and the Groups equity by SEK 12m (19). Interest-rate risk in borrowings The Financial Policy states that the benchmark for the long-term loan portfolio is an average xed interest term of 6 months. Group Treasury can choose to deviate from this benchmark on the basis of a risk mandate established by the Board of Directors. However, the maximum average xed interest term is 3 years. Derivatives, such as interest rate swap agreements, are used to manage the interest rate risk by changing the interest from xed to oating or vice-versa. The average xed interest term for the non-seasonal debt was 1.5 (2.2) years at year-end. On the basis of volumes and interest xings at the end of 2010, a one-percentage point shift in interest rates would impact the Groups interest expenses by approximately SEK +/ 18m (+/ 38). Interest rates with different maturities and different currencies may not change uniformly. This calculation is based on a parallel shift of all yield curves simultaneously by one percentage point. The Group has seasonal debt for which the interest risk is not calculated due to its short-term nature. As per 31 December 2010, the average interest rate in the total loan portfolio was 4.8% (3.2). At year-end, Husqvarna had outstanding interest rate derivatives with a nominal amount of SEK 2,452m (2,505) hedging the interest rate risk.

Goodwill Other intangible assets Property, plant and equipment Other non-current assets Inventories Trade receivables Trade payables Other operating liabilities Net debt Net identiable assets Goodwill Consideration paid Cash and cash equivalents acquired Net cash paid
Acquisitions made 2009 had no signicant impact on the Groups result.

Cont. Note 24

The President participates in the Groups long-term incentive programs for 2009 (LTI 2009) and 2010 (LTI 2010). For information on these programs, see Note 19. The notice period for termination is 12 months on the part of the Company and 6 months on the part of the President. The President is entitled to severance pay, corresponding to 12 monthly salaries with deduction for any other income, in the event of notice of termination from the employer. In the event of a change of control of the Company, the President has the right to cease the employment with immediate effect without consideration of notice period and receive severance pay corresponding to 24 monthly salaries. The President is not entitled to fringe benets such as company car or housing. Pension terms for the President The retirement age for the President is 60. The President is covered by the collectively agreed ITP plan, the alternative rule of the plan, and the Husqvarna Executive Pension Plan. The Husqvarna Executive Pension Plan is a dened contribution plan. The employer contribution to the plan for the President is equivalent to 40% of the pensionable salary which also includes the contributions for the benets of the ITP-plan, alternative ITP and any supplementary disability and survivors pension. The pensionable salary is calculated on the basis of current xed salary plus last years variable salary paid. Terms of employment for other members of Group Management As with the President, other members of Group Management receive a remuneration package comprised of xed salary, variable salary based on annual targets, long-term incentive programs and pension benets. Remuneration is revised annually per January 1. The variable salary is based on value creation for the Group and/or for the relevant business unit. The variable salary is 4050% of the xed

100 100

A detailed specication of Group companies is available on request from Husqvarna AB, Investor Relations.

Cont. Note 26

Associated companies 2010
Relation to Husqvarna Group1 SEKm Participation, % Book value Receivables Liabilities Sales Purchases Income Statement Income Net result Balance sheet Total assets Total liabilities
Diamant Boart, Argentina Diamant Boart, Philippines Total

46.7 20.0

Viewed from Husqvarnas perspective.
Associated companies 2009
Diamant Boart, Argentina A/O Khimki, Russia Diamant Boart, Philippines Total

46.7 50.0 20.0

Proposed Distribution of Earnings
Thousands of SEK Retained earnings Net income for 2010 Total 15,460,917 2,050,517 17,511,434
The Board of Directors has proposed that the Annual General Meeting 2011 resolves that the above sum be disposed of as follows:
Thousands of SEK A dividend to the shareholders of SEK 1.50 per share To be carried forward Total
858,657 16,652,777 17,511,434
Calculated on the number of outstanding shares as per February 23, 2011.
The Board is of the opinion that the dividend proposed above is justiable on both the Company and the Group level with regard to the demands on the Company and Group equity imposed by the type, scope and risks of the business and with regard to the Companys and the Groups nancial strength, liquidity and overall position. The Companys equity would have been SEK 23,410 thousand lower if the assets and liabilities had not been valued at fair value in accordance with the Swedish Annual Accounts Act (SFS 1995:1554), 4:14a. The Board of Directors and the President and CEO declare that the consolidated nancial statements have been prepared in accordance with IFRS as adopted by the EU, and give a true and fair view of the Groups nancial position and results of operations. The nancial statements of the Parent Company have been prepared in accordance with generally accepted accounting principles in Sweden and give a true and fair view of the Parent Companys nancial position and results of operations. The statutory Administration Report of the Group and the Parent Company provides a fair review of the development of the Groups and the Parent Companys operations, nancial position and results of operations and describes material risks and uncertainties facing the Parent Company and the companies included in the Group.
Stockholm, February 23, 2011
Lars Westerberg Chairman of the Board
Peggy Bruzelius Board member
Robert F. Connolly Board member

Brje Ekholm Board member

Magdalena Gerger Board member
Tom Johnstone Board member

Ulla Litzn Board member

Ulf Lundahl Board member
Anders Moberg Board member
Magnus Yngen President and CEO Board member
Johan Ihrman Employee representative Board member

Dividend 2010 as proposed by the Board. 2008 is restated for the rights issue made in 2009. Dividend/year-end share price.

ISIN codes:

Key facts, Husqvarna ADR DISTRIBUTION OF SHAREHOLDERS BY COUNTRY
Ticker code: ISIN code: Ratio: HSQVY US4481031015 Two ordinary B-shares equals one ADR
Sweden, 79.5% (82.3) Other countries, 7.7% (6.4) USA, 6.4% (5.3) Norway, 3.4% (3.2) Great Britain, 3.0% (2.8)
Annual General Meeting 2011
The Annual General Meeting of Husqvarna AB will be held at 4 pm on Wednesday May 4, 2011, at the Elmia Congress Centre, the Hammarskjld Hall, Elmiavgen 15, Jnkping, Sweden. Participation Shareholders who intend to participate in the AGM must Be registered in the share register kept by Euroclear Sweden AB on Thursday April 28, 2011. Give notice of intent to participate, thereby stating the number of assistants attending, to Husqvarna no later than Thursday April 28, 2011. Notice of participation Notice of intent to participate can be given By mail to Husqvarna AB, c/o Computershare AB, Box 610, SE-Danderyd, Sweden. By telephone at +10 between 9 am and 4 pm weekdays. At www.husqvarna.com/agm. Notice should include the shareholders name, personal or company registration number, if any, address and telephone number. Information provided together with the notice will be made subject to data processing and will be used solely for the AGM 2011. Shareholders may vote by proxy, in which case a power of attorney should be submitted to Husqvarna prior to the AGM. Shares registered by nominees Shareholders, whose shares are registered in the names of nominees, must have their shares temporarily registered in their own name on Thursday April 28, 2011, in order to participate in the AGM. Dividend The Board of Directors has proposed a dividend of SEK 1.50 per share, and Monday May 9, 2011 as record date. With this record date, it is expected that dividends will be paid from Euroclear on Thursday May 12, 2011. The last day for trading in Husqvarna shares including the right to dividend for 2010 is Wednesday May 4, 2011.
Financial information 2011
April 19 May 4 July 19 October 20 Interim report JanuaryMarch Annual General Meeting Interim report JanuaryJune Interim report JanuarySeptember

Contacts

Boel Sundvall SVP Corporate Communications & IR ir@husqvarna.se, +18 Tobias Norrby Investor Relations Manager tobias.norrby@husqvarna.se, +35 Press Hotline press@husqvarna.se, +80
The Annual Report is distributed to all new shareholders for the year and to those who have explicitly requested one. The Annual Report and other nancial reports are also available at www.husqvarna.com/ir. Printed copies can be ordered from the Groups web site.