HUSQVARNA GROUP: INTERIM REPORT JANUARY - SEPTEMBER 2024

Rhea-AI Summary

Husqvarna Group reported mixed Q3 2024 results with net sales decreasing 7% to SEK 9,739m. Operating income fell to SEK 52m from SEK 398m, with margin dropping to 0.5%. While showing growth in strategic areas like robotics and battery-powered products, organic sales declined 4% amid challenging market conditions. The company announced additional cost reduction measures targeting SEK 500m in savings and 400 position reductions. Cash flow performance was strong, with direct operating cash flow reaching SEK 4,020m. The company plans to launch 13 new robotic mower models for the 2025 gardening season.

Positive

• Growth achieved in strategic segments (robotic mowers and battery-powered products)
• Strong cash flow performance with direct operating cash flow increasing to SEK 4,020m from SEK 1,814m
• Cost savings program delivered SEK 590m in savings for the nine-month period
• European market showed growth in Forest & Garden Division

Negative

• Net sales decreased 7% to SEK 9,739m
• Operating income declined significantly to SEK 52m from SEK 398m
• Operating margin fell to 0.5% from 3.8%
• Earnings per share turned negative at SEK -0.27 from SEK 0.22
• Planned workforce reduction of 400 positions
• Weak demand in North American market
• Lower production capacity utilization due to decreased volumes

STOCKHOLM, Oct. 23, 2024 /PRNewswire/ -- Growth in the strategic areas robotics and battery

Third quarter 2024           

• Net sales decreased by 7% to SEK 9,739m (10,512). Changes in exchange rates impacted by -3%. Organic sales decreased by 4%.           
• Planned exits of low-margin petrol-powered business have been completed, with no sales impact in the quarter.           
• Operating income was SEK 52m (398) and the operating margin was 0.5% (3.8).           
• Excluding items affecting comparability, the operating income amounted to SEK 53m (415) and the operating margin was 0.5% (3.9).           
• Earnings per share before dilution amounted to SEK -0.27 (0.22) and earnings per share after dilution amounted to SEK -0.27 (0.22).           
• Cash flow from operations and investments amounted to SEK 2,892m (137). Direct operating cash flow was SEK 4,020m (1,814).           
• In October, additional cost reduction activities were announced. These include cost savings of SEK 500m.

January – September 2024           

• Net sales decreased by 11% to SEK 39,888m (44,655). Changes in exchange rates impacted by -1%.           
• Planned exits of low-margin petrol-powered business impacted with -3%. Organic sales decreased by 7%.           
• Operating income was SEK 3,882m (4,863) and the operating margin was 9.7% (10.9).           
• Excluding items affecting comparability, the operating income amounted to SEK 3,889m (5,138) and the operating margin was 9.8% (11.5).           
• Earnings per share before dilution amounted to SEK 4.27 (5.59) and earnings per share after dilution amounted to SEK 4.26 (5.56).           
• Cash flow from operations and investments was SEK 5,296m (5,157). Direct operating cash flow was SEK 6,323m (6,018).

Growth in the strategic areas robotics and battery 

"In the third quarter, we delivered growth in our strategic focus areas robotic mowers and battery-powered products, as well as a strong cash flow. However, organic sales for the Group decreased by 4%, which reflects a challenging market situation with restrained consumer spending.

Organic sales in the Husqvarna Forest & Garden Division decreased by 1%. We grew in robotic mowers, in both the professional and residential markets as well as in battery-powered products. The division achieved growth in Europe, while the business decreased in North America.

Organic sales in the Gardena Division decreased by 8%, with good performance for hand tools and battery-powered products. However, sales of watering products decreased during the start of the quarter, due to challenging weather conditions, but improved gradually.

In the Husqvarna Construction Division, organic sales decreased by 8%. The challenging market situation, with weak demand in North America continued, while sales in Europe grew.

Operating income, excluding items affecting comparability, amounted to SEK 53m (415). The decrease was driven by lower volumes, leading to lower capacity utilization in production, as well as the impact of increased promotional activities toward the end of the gardening season.

Our direct operating cash flow grew to SEK 4.0bn (1.8), driven by continued inventory reductions and a strengthened cash flow from the decrease in trade receivables. 

In response to the challenging market environment, we have accelerated existing cost-savings programs with good results. Realized savings amounted to SEK 190m during the quarter and SEK 590m for the nine-month period.  

Further mitigating activities to reduce fixed costs and enhance efficiency across the Group are announced today. Savings will amount to SEK 500m, with the majority realized in 2025. As part of this plan, the Group expects to reduce 400 positions. Non-recurring costs related to these savings are expected to amount to SEK 600m and will be recognized in the fourth quarter. We are committed to identifying and implementing additional efficiency measures to further enhance our operational structure and effectiveness.

Despite the challenging environment, we are focused on executing our strategy and positioning the Group for long-term value creation. We continue to invest in our growth areas and look forward to our ambitious product launch program for the gardening season 2025. This will feature a wide range of new products, including 13 new robotic mower models equipped with the latest generation of intelligence and boundary wire free navigation."

Pavel Hajman, CEO 

Webcast presentation and telephone conference
A webcast presentation of the Q3 report hosted by Pavel Hajman, CEO and Terry Burke, CFO will be held at 10:00 CET on October 23, 2024.

To view the presentation, please use the link: 
https://husqvarnagroup.creo.se/cedeece6-0700-4eb4-8457-f49a744d3dd3

The dial-in to the telephone conference (in order to ask questions):
+46 (0) 8 505 100 31 (Sweden) or +44 207 107 06 13 (UK)

Dates for Financial Reports 2025

February 5	Year-end report for January-December 2024
April 24	Interim report for January-March 2025
July 18	Interim report for January-June 2025
October 21	Interim report for January-September 2025

Contacts
Terry Burke, CFO and Executive Vice President, Finance, IR & Communication 
+46 8 738 90 00

Johan Andersson, Vice President, Investor Relations 
+46 702 100 451

Husqvarna AB (publ), P.O. Box 7454, SE-103 92 Stockholm
Regeringsgatan 28, +46 8 738 90 00, www.husqvarnagroup.com 

Reg. Nr: 556000-5331
NASDAQ OMX Stockholm: HUSQ A, HUSQ B

This report contains insider information that Husqvarna AB is required to disclose under the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the contact person set out above, at 07.00 CET on October 23, 2024.

This information was brought to you by Cision http://news.cision.com

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https://mb.cision.com/Main/996/4055016/3069001.pdf

Interim report Q3 2024 Husqvarna Group (PDF)

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SOURCE Husqvarna Group

FAQ

What was Husqvarna's (HSQVY) Q3 2024 revenue performance?

Husqvarna's net sales decreased by 7% to SEK 9,739m in Q3 2024, with organic sales declining 4%.

How much cost savings is Husqvarna (HSQVY) targeting in their new reduction plan?

Husqvarna announced additional cost reduction activities targeting SEK 500m in savings, with the majority to be realized in 2025.

What was Husqvarna's (HSQVY) operating margin in Q3 2024?

Husqvarna's operating margin decreased to 0.5% in Q3 2024, down from 3.8% in the same period last year.

How many positions will be affected by Husqvarna's (HSQVY) cost reduction plan?

Husqvarna plans to reduce 400 positions as part of their cost reduction initiatives.