Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Husqvarna AB (HSQVY, Financial) reported strong growth in the strategically important areas of robotics and battery products.
- The company delivered a very strong cash flow and reduced net debt by 2.8 billion since the last quarter.
- Inventory levels have been significantly reduced by 3.7 billion, or around 22% from the start of the year.
- Professional robotics saw double-digit growth, with strong demand in sports fields and golf courses.
- The company is committed to long-term strategic investments in growth areas, including robotics and battery technology, which align with market trends.
Negative Points
- Organic sales declined by 4% due to challenging market conditions and restrained consumer spending.
- Operating income decreased to 53 million from 415 million last year, impacted by lower volumes and increased promotional activities.
- The Gardena division experienced an 8% decline in organic sales and a reduced operating margin of negative 7.6%.
- The construction division saw an 8% decline in organic sales, with weak demand in North America impacting results.
- The company announced a cost-saving program that will impact approximately 400 positions, reflecting ongoing challenges in profitability.
Q & A Highlights
Q: Can you provide an update on inventory levels with distributors and retailers after the high season?
A: Inventory levels vary by division and geography. For Forest and Garden, inventory is normal or slightly low. Gardena's inventory is normal, with some higher levels in watering products due to a wet summer. In Construction, Europe has normal levels, while North America has higher inventory relative to business levels. Discussions with channel partners indicate a cautious approach due to economic conditions.
Q: Regarding the new product launches for 2025, how should we perceive them in terms of overall mix and pricing?
A: The new robotics lineup includes 30 boundary wire-free products. Professional segment products have high margins, while residential robotics are more entry-level with margins below mid and high-price point products. Overall, there is a good mix expected for next year.
Q: Can you provide more details on the cost savings program and which divisions or regions will be most affected?
A: The 400 positions affected will be across all divisions and central functions globally. The focus is on back-end operations, such as administration and R&D consolidation, rather than front-end sales positions.
Q: Are you maintaining your market share in professional robotic sales despite cost programs?
A: Yes, we are continuing to take market share and remain at the top. We are expanding our presence in sports fields and golf courses, and reinforcing our dealer network with pro partners dedicated to professional products.
Q: How is the aftermarket parts and accessories business shaping up, particularly for robotics?
A: The aftermarket business is developing well, but the full potential hasn't been realized yet as our professional products are relatively new and durable. We are establishing structures and programs to support this business as products age and require maintenance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
