Just about increasing our emphasis on profitable growth for three of the four divisions, that will be the theme for the next years to come. Starting talking about the quarter. The first commentary and bullet is pretty obviously the continued trend of improvements that may be applicable and valid for the margin as well as for the absolute result levels. If I then, because everybody will be also aware that quarter three is not a significant quarter from an absolute size. That is quarter one and two, pretty much where the music plays for us, and then three, a little bit positive, and quarter four, maybe a little bit negative.
If you look at the full year, I should say, we have to correct that year to date of the three quarters, we have actually managed to outbalance the complete FX headwinds of SEK 450 million, give and take, and outbalance the additional cost for profitable growth investments and still improve the result. I think that is a pretty good achievement, and at least we are pleased with that. We have also seen for the year to date that the season so far has been positive in respect of priority areas such as robotics, battery-based products, GARDENA smart system launch in continental Europe, which will be expanded later on into other geographies. We talked about, at the Capital Markets Day, new financial targets that will be applicable moving into the profitable growth phase.
Now, looking at the margin, which has been the theme for us during the last few years, where we have profitability first and then profitable growth, we can now conclude that we are up on a rolling 12 months at 8.7%. This period normally is a little bit flattish, quarter three, quarter four, and then normally we would have the larger result lifts coming into quarter one and two. It is a continuation of the margin improvements that we have talked about and set out as our number one overarching priority. Financially, sales pretty much flattish, I would say, and still then SEK 431 million versus SEK 405 previous year, equivalent to 5.9% EBIT margin versus 5.5% last year. On the year to date, that leaves us with about a margin of 11% versus 10.5% last year, SEK 3.3 billion versus about SEK 3.2-ish last year. That is what we talked about.
We talked very much about that we will move sideways result-wise for this year, given the big headwinds and given the investments we are taking in additional costs for profitable growth investments activities. You see the 8.7% here, last 12 month, you will see also the gross margin improvements. Not only, I should say both for the quarter as well as for the year to date, you will see gross margin improvements which are significant. If you look at the operating income then, what has affected that the most? Well, it is mix that is supporting it is efficiency improvements, and I would emphasize efficiency improvements in this quarter. Cost for profitable growth activities is burden like the FX that I mentioned previously. Husqvarna very much being driven by the good progress in the European markets. We see that.
We are quite pleased to, again, we mentioned it at the Capital Markets Day, but to reiterate that we have introduced now the new saw chain, the X-CUT, which has started up end of August. It's early days, but it's important for us to optimize the complete sales of market and the performance of the system overall. On their side, Husqvarna division, we have a higher EBIT, and you will see it's about SEK 50 million magnitude, driven, of course, by the volume of 5% comparable currencies improvement for the quarter. You will see that has an impact, of course. They have also, in fact, also had to balance some reasonably high cost for the growth initiatives. On the year-to-date, they are then comparable currencies up 4%. It's a fairly solid situation here.
Fitting quite nicely into the range of what we are talking about when we talk profitable growth. Currency is still impacting the result here for the Husqvarna division. I think it's a strength indication here of the underlying improvement we are giving here. Gardena, we have indicated previously, and it was pretty clear that we had a tough reference. Quarter three last year was more or less optimal weather conditions in continental Europe. That would be a tough reference to deal with. We are coming in at -6.
I would say that's still pretty good, and it became better as the quarter went along, and we managed to outbalance the strength of last year through introduction of new secateurs, hand tools, as well as an innovation which we call the Fruit Collector, which actually has a lot of appeal in the market, and we have sold more than three times what we initially thought we would do. We were campaigning this product quite intensively around Germany. It was very encouraging to see the results of that campaign. Of course, the EBIT for the quarter is burdened by the volume, but also investments, I should say additional costs from the profitable growth initiatives. I think the relevant figure here is to look at the year-to-date on the sales, which is +9%, and you will see also that the result is positive on the year-to-date.
I think we are taking yet another important step ahead, and you see also the margins being pretty strong. If you look at the last 12 months, we are around 12% level, which is pretty good. Consumer had a very tough Quarter two, as you will recall. That caused, of course, a cautious type of behavior from the big box retailers, who are sitting down on a bit of excess inventory, so they were reducing inventories. We see that the number -10 is not necessarily that fantastic, but we saw progressive improvement throughout the quarter. The weather in the quarter itself was actually pretty good in North America.
It's nothing to talk about, rather than you should read it as a reduction of the inventory levels of the big box people, which we also indicated that we expected to happen. They continue the story about improving the result despite the volume decline and the currency headwinds. Quarter is SEK -80 versus SEK 119 last year, and we think that's pretty good. Margin-wise, -5.2% versus -7%. That leaves us for the year-to-date with a margin of 1.7% versus 0.6% last year. If you look at the last 12 months, you will see -0.4% here as a reference. We are approaching the break-even on the last 12 months, but it's not a given one to fully get there for this calendar year. It has been the goal, a bit burdened by the season.
We might be a little bit off, but not significantly. I think the important thing is that from an activity point of view, we are still progressing in the turnaround according to plan. There's nothing that has changed with the direction of being value before volume, and it's a wide range of cost and efficiency measures that is supporting the improvement. Construction came in maybe a little bit weaker than what we have seen in the last few quarters, adjusted +1% on the sales side. North America continued to be the driver of the locomotive of the sales, but at a somewhat lower growth rate. Still in good shape, but it has been extremely strong. I would say very strong to strong would be an attempt to give some relative proportions to it.
What is difficult though for us, that is the stone industry, and particularly Middle East, Latin America is weak, and it's burdening probably the top line here with some 2-3 percentage points. That takes its toll. We have improved the result margin-wise, 14.9% versus 14.1%, and leaving us with a year-to-date now of sales +3%, and the margin being 13.6% versus 12.2%. You see it's a good continuous improvement of what we do, and we're quite pleased with that. We also see that one of the areas that is growing is the surface preparation, which has a lot of advantages in the way that more and more people also choose just to grind the floors instead of putting epoxy on or painting them. New methods here that fit us very well will support a good demand situation.
The relatively small acquisition we did of DTS, it didn't take a year ago, has actually reinforced our abilities to provide resin bonds for diamond tools, which helps us do this in an efficient way. Same story when it comes to the operating income and margins. The efficiency improvements supporting the profitable growth initiatives. We have used the profitable growth initiatives also to reinforce the penetration of the sales in many of these markets. It's not necessarily new geographies, but rather a penetration game as such. With that, I leave to Jan to make some comments to the finances.
Thank you, Kai. As Kai went into, yet another quarter, much in line with our expectation, and as we have seen in your forecast, your expectations as well, with the same trends as we have seen all through the year so far, i.e., our operational and efficiency improvements are more than offsetting the currency headwinds and our costs for growth or profitable growth initiatives. As a CFO, I'm actually happy that this was once again a pretty boring quarter.
Net sales for the group, as we said, around zero, flat in the third quarter, where we've also this time increases in Husqvarna Division and partly also in Construction, taking out the negative impact from the divisions that were decreasing as favoring to consumer with a relative tough start of the third quarter coming in from the second quarter with unfavorable weather and also the bad value over volume that we have, and also Gardena with a difficult comparison quarter, the third quarter last year. All in all, flat on top line and also for the first three quarters, flat more or less on top line if we exclude currency or if we just talk about Swedish krona. Once again, in year-to-date numbers, the three divisions in profitable growth are being offset by the loss of sales in consumer.
Gross income in the quarter improved with more than SEK 200 million, being an effect of a continued focus on efficiency and cost out activities, affecting both the direct material and our value-added cost in the manufacturing sites. We also got a continued positive effect from the divisional mix, i.e., we are growing in Husqvarna and Construction with high margins, and we are decreasing sales in Consumer Brands. We must also recognize the Consumer Brands have improved their margins and their gross income gradually during the year. Also that we got some positive effect also this quarter from prices. For the first three quarters, we have improved gross income of around SEK 500 million despite currency headwinds, with more or less the same explanation as I said for the third quarter.
As you know, in the third quarter, up around SEK 150 million, being an effect of currencies and additional cost for our profitable growth initiatives. When we take a look at the full year, we are up around SEK 375 million with the same two explanations. Coming down to operating income for the quarter, plus around SEK 25 million compared to last year, up to SEK 431 million, up 0.4 percentage units to 5.9% in this third quarter compared to last year. When we take a look on the full year, I should say that we have SEK 60 million of negative currency impact in the third quarter compared to third quarter last year. When we take a look on the first three quarters, SEK 3.326 billion, that is an improvement of SEK 135, and here we have currency against us with around SEK 450 million.
Financial net was higher in the quarter than the third quarter last year, being an effect of both currency effects and interest costs. Interest costs mainly related to interest rates, i.e., for us mainly related to USD, where we have seen an increased cost for us. When we take a look at the financial net for the full year, the increase is purely related to interest costs. We have differences in volatility related to currency, but when we come to the longer period, it's more or less netted out, which was the same effect as we had last year. Going down to net income, slightly over SEK 200 million, an improvement of SEK 10 million compared to last year, giving a net margin of 2.8%. Full year, slightly over SEK 2.2 billion, an improvement of SEK 100 million compared to last year, SEK 3.87 as earnings per share.
Moving over to the balance sheet. Currency impact is rather limited compared to last year. When we take a look at September last year, non-current assets and excluding currencies is more or less on the same level, where we have higher CapEx than last year and also higher CapEx than depreciation, but that is being offset by the payment of a Chinese factory that we sold during the second part of 2016. Inventory is increasing. If we eliminate currency, it is increasing around SEK 250 million, and we saw increases in all divisions except Construction, where we had a reduction. Of course, consumer division, they are negatively impacted by the slow demand, lower than expected demand we had both in the second and third quarter, and also a slow start of the so-called slow season, where we have more or less nothing so far.
Going over to receivables, slightly up compared to last year if we exclude currency, whereas trade payables are more or less in local currencies on the same level as last year. Net debt for us decreased from SEK 0.2 billion compared to last year to SEK 6.5 billion, being an effect of a positive cash flow being offset by higher pension liabilities and also a currency effect of around SEK 250 million compared to last year, being an effect of the revaluation or the valuation of our debts. If we take a look on the net debt development from the start of the year, we have a negative impact of currency of around SEK 350 million. Of course, dividend being paid and also higher pension liabilities from year-end, but that was partly offset by the cash flow. Talking about cash flow, moving over to that.
You can see that the seasonality pattern of a build-up of working capital in the first quarter and releasing that in the second and third quarter is also valid, of course, this year as well. Operating cash flow adjusted and for divested assets were close to or slightly over SEK 2 billion this first three quarters, and that was an improvement of some SEK 500 million compared to last year. This was related to improved earnings and also a decreased need of working capital, whereas we saw also the somewhat higher pace of capital expenditures and that we expected through the full year 2016 is happening, and that is reflecting our profitable growth initiatives. Our ambition is to have financials that are representing or reflecting an investment-graded company.
One important parameter to actually fulfill that ambition is to have strong earnings and cash flow from operations and, of course, have a net debt that is decreasing, and by that, of course, have the trend you see in the picture. We have a target on this. It was launched in 2014. It is that we should be less than 2.5 times net related to EBITDA. We have been that for the two last year, and presently we are down to 1.7, and of course, being an effect of improving earnings and reduction of net debt, the combination of that. Of course, to have this margin is important for us because it means that we can indebt ourselves when we are now moving into more of a growth phase for three out of our four divisions. Key ratios.
You can see also here the impact and effect of improved earnings, and that will continue to improve and impact our profitability in general positively, both return on capital employed and return on equity are improving with two and one percentage units, respectively, since September last year. All financial key performance indicators are showing positive trends except operating working capital, which has increased since last year, and with a stable net sales. The capital efficiency of the operating working capital as we are using internally, expressed as CCC days, the number of days to turn the total operating working capital around one time, has increased now with two days with fixed currencies, and we are now close to 100 days. This is a deviation, and of course, also an improvement area that has to be addressed, not at least as we intend to grow.
It's also part, as you know, of our newly established financial targets for 2017 and onwards. Last down here in the column, you have the average number of employees, and as you can see, we have a trend of decreasing number of full-time employees, and that continued. We were some thousand less full-time employees this September than September last year, and that is mainly as a consequence of the structure measures we took in the second part of last year and also then, of course, reflecting the demand we have in U.S. That's why I think it's time for you again.
Yep. Thank you, Jan. Just very briefly, going to a little bit the key message from the Capital Markets Day. We talked about profitable growth being our next step, and we made a little bit the summary along the lines of yes, we have in fact delivered significant profitability improvements the last year. Yes, we actually have a customer-focused organization, an empowered organization, and approval concept now being installed since two years. You have heard about the three divisions being in profitable growth, respectively, Consumer Brands building on the profitable core. We have actually taken quite some significant costs supporting this, injecting the momentum to actually get this going. It is also our intention to continue doing so for 2017.
We foresee that we will have the strength from operational improvements to again put another level of, let's say, profitable growth investments on top of what we have done this year, next year, and still take a significant step ahead with the results. Of course, as we do move into profitable growth, innovation will become even more important for us as a team going forward. We have worked with the profitability first, and now we are at the turning point, moving into profitable growth. How do we define that then? Well, actually we are saying that we want to outgrow the market with one to two percentage points, and the market as an average is 2%-3% with huge variations. I need to be clear on that.
If you look at walk behind petrol lawnmower, there will be very small growth numbers, but if you look at battery-based products or robotics, you will have fairly high numbers. Huge span, but the averages are a bit lukewarm, and they look like they do. Market 2%-3%, and we say outgrowing that, and as a consequence of that, we expect to have a continuous improvement of the EBIT margin. That's the definition. If you look at the targets then as the last slide before opening up for questions. We talk about margin being equally larger to 10% for the coming years, not being specific about whether we are talking about two or three years, but in the next period of time.
We're talking about growth for the profitable growth divisions, according to the definition I just mentioned, being three to five, and you heard Jan talking about the capital efficiency being the third target, being more important moving into this phase now. With those comments, I leave it open for questions.
We will start with questions from the audience here in Stockholm. Thanks. Björn, Bank. Questions on, you discussed this at the CMD of course, but if you can give your view on your continuous investments, how we should look upon investments in terms of sales. Should that decrease if we look ahead a few quarters or in the next season? Do you see that it continues to expand with sales or even at a higher pace?
If you look at CapEx, I think we are not making any larger changes in that respect. What we are talking about investment is rather in terms of cost additions.
You mean OpEx?
OpEx, correct. That's what will happen. We will probably see additions of significant absolute numbers like we have had this year, but being counterbalanced by the efficiency measures. What you see here is, of course, the net change for those two combined, as I said before, we don't want to be explicit about any of them, because we feel we get too deep into the details if we do.
Basically, seeing continued gross margin expansion and.
Yes
higher OpEx.
I think that's a fair expectation.
If you can shed some light on the launches that you're planning for Consumer Brands. Are Consumer Brands back to growth or still some ?
The overall expectation for Consumer Brands is that we will level off, but we will take the curve, we think, during 2017, a fairly flattish type of expectation on the top line, whereas we expect growth to come rather in 2018. That will be supported amongst others, and by product introductions to some extent taking place next year, to a larger extent being supported by introductions into the early season of 2018. We are in the consumer space working with a yearly cycle, very much the scene for 2017 is set, but there are new battery introductions already for 2017. Yes, there is a robot mower being introduced. However, for the first year, we don't see that being significant in the overall numbers. It will start to give a more clear contribution into 2018 and beyond.
More selective launches.
How to say? We will launch it at quite some few places, but still it takes time to gain traction with a new brand in this space. We see Gardena has made a fantastic journey on the robotic mowers, and is, I would say, ahead of the market growth the last couple of years. You need to build the momentum. The exponential curve is a bit slow at the beginning.
Final question on the X-CUT or the saw chain. Did you say it was a little bit too early to really get a feeling for how that launch is developing, or what did you say?
I think what I tried to articulate, maybe not fully successfully, is that the launch is a success from a performance point of view. The performance is good on the chain. However, limited quantities, and we actually have launched one in a select geography, a chain type. It's first step in a journey of many, so to say, and hence, I don't want to leave anybody with the impression that what we have done so far is really going to turn anything around on a larger scale on the P&L aggregated level. It's a contribution that will help us move into a positive development over a period of some years.
Will there be a major launch we should be a little bit afraid about what's happening when volumes hit the plant?
No, it would be a very successive ramp-up. An addition of more chain types, increased pace of the plant. I'd rather de-dramatize it. That's what I'm trying to articulate here. It will move its way into the P&L and give contribution, but from modest levels to start with.
Thank you.
Thank you so much for taking the question, actually. Salma from Carnegie. I have three of them. First on the stone segment in your Construction division. That segment has been quite weak for the past three quarters. Where are you in the cycle, do you feel? Is it still dropping quite heavily sequentially, or are you leveling off sequentially? Just to understand that.
The stone market is a burden for us, as I mentioned, very much so, driven then by the situation in the Middle East where demand has decreased radically. Latin America and Brazil, same story. That's where we are suffering the most. Beyond that, we are actually a little bit potentially, I shouldn't say, mispositioned, but with the customer relation we have had in Latin America, exporting up to the American market, which is still healthy. That has shifted somewhat. We are trying to expand our customer coverage for that part. That's a little bit the demand situation. Has it bottomed out yet? Sequentially, as you ask, I hope so. I hope that it really has. I don't see a sign of an imminent recovery either.
I would rather, if anything, project this being a slow recovery over some period of time. Against that stands still a healthy North American market, even though less impressive in absolute numbers, it's still a very healthy growth rate. We have some other geographies which we expect to improve as well. By and large, we think the 1% you saw on the top line in the quarter, we think it's rather a lower number than anything else.
Thank you. Then a question on the Husqvarna division. The robot mowers is not a large category seasonal-wise in the Q3. As you mentioned, the snow products haven't really picked up. Could you share a split of which products or models are making this good growth story right now?
I would say still robotics is supporting to some degree, the quarter is more a selling of the handheld products for the winter season, normally snow products. Whereas, as you pointed out, and I have already understood, snow products are weak so far. We haven't seen the demand, that goes for both the Consumer Brands division as well as the Husqvarna division. A little bit of disappointment of the sell-in to the season, let's see whether it picks up, we hope for some cold weather here in quarter four, preferably before Christmas time, so people really feel like this is going to be a long and ugly winter, I better get some support to deal with it. It's a weak start.
The emphasis I give is actually on the selling of the handheld as an important piece of this quarter in volume terms.
What we can add also is, of course, we talked about it at the Capital Markets Day, we talked about weather. Of course, we are weather-hedged to some extent in Europe. What I'm referring to that the third quarter last year, we were having a good Gardena sales, but of course, with the warm and dry weather in mid-Europe, it was also a negative effect on Husqvarna Division. Not that big, but it's also, of course, weed products are better suited for that because now it's a more normal third quarter.
Thank you.
Yes.
Just one quick question. Thank you. On the capital allocation, you mentioned that the net debt to EBITDA is slightly below, might be where you want to have it right now, but going forward, we'll probably see a continued sliding down of this ratio. Where in your kind of priority line when you have a look at growth and dividends and buybacks, where are the buybacks when you discuss this?
First of all, capital structure is a decision and a discussion with the board and in the board. It's not something we should have here. Of course, I'm a finance manager. I would have liked to have very low net debt, there is, of course, a balance, and we have talked about the growth being one of these things that will, over time, be something that will require more capital. We are trying to balance that with better capital efficiency. Of course, in the end, it could also impact the net debt. The other question, as I thought, we did something that is, of course, up for the board to decide.
A question on the FX headwinds. It's obviously been significant this year. I assume that is in relation to transaction exposure export from the U.S., or in translation impact, shouldn't that be something positive with translating the foreign earnings into Swedish krona?
You're right, we have also seen between during the year, especially now towards the end or actually since spring, we have seen once again a weaker krona, stronger dollar, and a stronger euro. The main thing is, of course, the transaction as you read into how the dollar is related to the euro, especially because we have big inflow in euros and a quite substantial outflow in dollar. In translation, you're right, but that transaction is the thing.
Okay. Thank you.
Operator, can we open up for questions from the telephone audience, please?
At this time, ladies and gentlemen, if you would like to ask a question over the phone, please press star one on your telephone keypad. Again, that is star one to ask a question over the phone. Your first question comes from the line of Christer Magnergård.
Hi there. Three questions. First, if you can talk about the listings for next year, if you have any details on that, especially when it comes to market share gains potential.
Christer listings, with that, I think you refer primarily, I guess, to Gardena and consumer. Gardena is working on their channel expansion, and it's looking, again, I would say fairly good for next season, just like it has for this year. Consumer, there are no significant important listings. There are some strategically important product category aspects of it that I wouldn't say anything that changes overall top-line numbers in a significant way, but a little bit of shift where we expect to have introduced, for example, also the robot mower in North America at one specific retailer, and also brought that very same retailer with a battery range of products. A little bit shift into new categories, but the overall number not being significantly impacted in that respect from the consumer side.
Gardena pressing on with a more clear expansion agenda on the listing side, that goes fairly broadly throughout the categories. Of course, one good example of that is the GARDENA smart system, which is now going to find its way into Scandinavia as well. You will see that up here. We think that's a very interesting concept going ahead, where we, as I mentioned before, combine the automated irrigation with automated robot mower. You can really start to talk about automating the garden space, so to say. That's one example, but I'll leave it there, Christer.
Good. To financial questions. Firstly, to come back on the working capital development. This has been a bit of a problem for you, obviously, and the development has not been satisfactory yet. You gave some explanations, but can you maybe give some more color on it? When should we expect a release in working capital? Should that happen already next year, or is it a couple of years out in time?
Well, working capital is very much about behaviors. How we are handling payments, how we're handling our stocks, et cetera, and also about structure, our logistical structure. Behavior takes time. This is nothing you fix in a simple way. You could, of course, start to sell off your receivables, et cetera, but you have to pay for that. This is about how we can shorten payment terms to our customers, and of course, also most importantly, because that's the big part of our working capital, how we can work with our inventory, both the finished goods, but also inside our factory. This is definitely what you may call a continuous improvement exercise. It's nothing you should expect happening from the first day. As you have seen, we have a capital efficiency target for 2017 and 2019.
If we were to come there to less than 25% of net sales, it is an improvement of some 10% from where we are today, and that is what we are aiming for. It will not happen as I see it in 2017, but we have plans to make it happen for the period of 2017 and the coming years.
Should I read of more like a gradual improvement then for the next year?
Yes.
Not back in those-
Good summary. I should have done that myself.
Finally, on depreciation, which has moved up a bit here in Q3. I don't know if that was currency related or if there's a new level on depreciation going forward. If you can give some guidance for next year, that would be handy.
As you have seen, CapEx is moving on, has done so the last years. Of course, that is turning into depreciation. Then, of course, from time to time, and I assume that you are referring to depreciation and amortization, you also have to accelerate some of other amortizations of immaterial assets as well, and that is what you are seeing right in this quarter. There is nothing dramatic.
Super. Thank you very much.
On Eliason.
Yeah, hi. I guess that was me. Johan Eliason on Kepler Cheuvreux. Coming back to the outlook into 2017, you talked a bit about the listings. How about what do you foresee for the raw materials vis-a-vis the pricing development in the following season?
Johan, I think the raw materials will be a little bit of a burden for us, but it's not going to be significant. It shouldn't change the overall trajectory we are on of significant improvement. On the other hand, maybe there could be a slight positive impact on the FX next year, so those might end up balancing each other to some fair degree. I don't think you should put in any larger numbers in your assessments.
Pricing this year, obviously up on the back of the FX moves. What do you foresee for next year?
I think I'm normally talking fairly cautious about price, and I think the primary idea is this stable pricing, and I continue on that track. I think that's what you should see. There are new products which we can maybe improve to put the level right from the beginning, but I think you shouldn't expect much of a price difference from the existing product range, so to say. I think it's going to be fairly flattish, but it shouldn't be negative either.
Okay, good. Just a detail on the financial net. It seems to be quite a volatile number. I guess it's partly because of the FX, and then you talked about the increasing rates. Could you split this, I guess it's FX hedging, and the underlying interest rate cost, and maybe give some view on where interest rate costs will go going forward?
First of all, I think the big picture is that FX is very small for the first three quarters. It was very little in the first three quarters last year as well. No impact for the first three quarters on FX. It is the interest net. It is related to interest rates, i.e., for us due to our big operation and investments we have in U.S. dollars mainly. That is something I expect us to see going forward as well, because I don't think that the U.S. dollar will go down, at least in foreseeable future, i.e., 2017, as relates interest rates. I might have the wrong assumption, but that is what we should calculate with. That means that we will have a higher financial net this year than we had last year.
We have a difference of around, I think it's around SEK 60 million right now for the first three quarters. I expect that to be more or less where we will end the year as well compared to the full year 2015.
For next year, I mean, your debt is coming down. Do you still expect this number to go up or?
Well, that is of course where we have the money. Normally you have the money at the head office and which means basically in Swedish krona. We will still have the debts out in the different countries, i.e., in different currencies. It's very much about what is happening with interest rates in those foreign countries where we have our big operations.
Okay. Just now when you have the season, could you just remind me the share of robotics and electrical handhelds for the season?
I think we talked about 10% of our forest and garden sales. It's a number I think which you should apply.
In total for those two?
Yes. The total of those two compared to the forest and garden space excluding construction.
Yeah. Excellent. Thank you.
Your next question comes from the line of August Milbert.
Hello, this is August Milbert from Danske Credit Research. Just a quick question here on your financial targets. To clarify, you mentioned a net debt-to-EBITDA target of 2.5x in the presentation, but that's not included among your new financial targets, so how should we see that?
The three targets we were talking about in the end of the presentation are average to coming year as from 2017. We had targets or we have targets launched in 2014, valued up to end of 2016, where net debt-to-EBITDA was one of those targets. When we are moving in now to the profitable growth phase, we are shifting. We are not forgetting, we still have the ambition to have financials reflecting an investment grade-rated company, but we are focusing on margin growth and capital efficiency with the financial targets as from 2017.
Okay. Thank you.
Is there anyone on the line?
Hello. Can you hear me?
Yes.
Hi, this is Rasmus from Handelsbanken.
Hi.
Hi. I didn't hear any announcement, can I ask you with regards to the recall that was announced yesterday, how does such a thing impact the numbers if it does in any way?
First of all, it was a pretty big number of products that were having defects, that it was something that we have gone out to our customers and asked them to make a self-assessment of these products. We expect around 1% maybe to have that defect. In relation to that number and also how big the repair is of that defect, it is more numbers as we know it today, and it is of course covered with our normal warranty provisions.
Okay. Thank you. The second question, there was some speculation I read on the screen about Craftsman. I struggle to see Craftsman being a high-margin growing business. Am I correct in thinking that it doesn't fit very well with Husqvarna strategy at the moment?
I don't want to comment too much on speculation, let me say that Craftsman has, from a brand equity point of view, strengths. I think that we should be clear on. The independent surveys of brand equities show that pretty clear. The brand equity is not bad in any sense. Husqvarna has historically been part of supporting this particular retailer to build the strength of that brand through significant shipments over the years. That much I can say. I'll leave it there.
Okay.
Otherwise I start to get into speculations, it won't take us anywhere.
All right. Very good. Thank you.
I think we have-
Your next question comes from the line of Eric Gunnarsson.
No, guys, I actually think all my questions were covered, so sorry for that. Thank you.
Okay. With that, it seems like the questions are terminated, and I would like to thank you for your attention and for coming here. Thank you.