Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Husqvarna AB (HSQVY, Financial) reported a 5% organic growth in net sales for the second quarter of 2025, driven by strong performance in the Forest and Garden and Gardena divisions.
- The company achieved a 7% increase in group operating income, with an improved EBIT margin across all three divisions.
- Robotic mowers and watering products showed strong performance, contributing significantly to the company's growth.
- Husqvarna AB (HSQVY) successfully reduced its net debt by SEK3.3 billion compared to the same period last year.
- The company made significant progress on its sustainability agenda, achieving two out of three sustainable targets, including a 55% reduction in CO2 emissions.
Negative Points
- The macroeconomic environment remains uncertain, with ongoing trade tariffs, geopolitical instability, and currency fluctuations impacting the company.
- North America continues to be a challenging market, with lower sales and operating income across all three divisions.
- The company faced a negative currency effect of SEK125 million and a negative price impact of SEK160 million in the quarter.
- The Construction division experienced a 4% decline in organic sales, primarily due to weak market conditions in North America.
- Despite strong growth in the robotic segment, the company faced intense competition and aggressive pricing, particularly in the entry-level segment.
Q & A Highlights
Q: Can you confirm whether the market for robotic mowers grew faster than Husqvarna's 14% growth, and was there a pipeline fill impacting this growth?
A: The market has grown, particularly in the pro segment where Husqvarna maintains market leadership. In the mid-market and entry segments, the market grew larger than Husqvarna's growth. The retail pilot is still marginal and not significantly impacting sales figures.
Q: Given the price adjustments in the lower end of the robotic mower category, will Husqvarna continue to invest in this segment despite price headwinds?
A: Husqvarna remains committed to the entry-level segment as a premium brand, ensuring brand value and reliability. The company leverages synergies across its product range and has no intention of exiting the entry-level segment, which complements the Gardena watering range.
Q: Are dealers in Europe increasingly multi-sourcing robotic mowers, and how does Husqvarna plan to address competition from Asian manufacturers?
A: While competition is increasing, Husqvarna's core dealer network remains loyal, and the company continues to focus on R&D and innovation. Some dealers carrying other brands may introduce new entrants, but Husqvarna's sales growth indicates strong dealer trust.
Q: What is the current share of boundary wire-free robotics within residential sales?
A: The share of boundary wire-free robotics in residential sales has increased to 75% in value, indicating strong consumer preference for these products.
Q: Has there been any pre-buying in the US due to tariffs, and what is the expected impact of tariffs in the second half of the year?
A: There has been no significant pre-buying due to tariffs. Husqvarna expects a net negative impact of SEK100 million from tariffs in the second half of the year, despite mitigation efforts such as price increases and supply chain adjustments.
Q: What factors contributed to the 4% sales decline in the construction division, and how did different regions perform?
A: The sales decline in the construction division was primarily due to weak performance in North America, partially offset by stable growth in Europe and other regions.
Q: At what point does it make sense to start producing robotic mowers locally in North America?
A: While Husqvarna is pleased with the growth of its robotics business in North America, significant volume increases would be needed before considering local production. Current production in Europe is beneficial due to tariff considerations.
Q: How does Husqvarna view the profitability of its robotics segment, particularly in the entry-level category?
A: The robotics segment is margin accretive in the mid, premium, and professional categories but faces profitability challenges in the entry-level segment due to aggressive pricing competition.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
