HUSQF: Strong Performance and Sustainable Innovations Drive Growth
2023-07-25
The company held an earning call meeting to discuss its second quarter results and the factors that impacted its performance. The meeting focused on the recovery in the robotics sector and the challenges faced in the Forest & Garden segment. The participants of the call included Johan Andersson, Pavel Hajman, and Terry Burke. The meeting concluded with a reminder of the upcoming Q3 report.
During the meeting, the management highlighted three important areas to understand for the second half of the year. These included the recovery of the robotics sector, the absence of pre-builds due to the discontinuation of low-profit wheeled products, and the weaker U.S. market in the Forest & Garden segment. The management acknowledged the challenges faced in the Forest & Garden segment, particularly in the weaker U.S. market. They also mentioned their plans to report the Q3 results on October 20th, indicating their focus on monitoring and analyzing the company's performance on a quarterly basis.
The key drivers of the business, as mentioned in the meeting, included a focus on light agriculture, a strategic ambition for long-term sustainability, CO2 reduction efforts, and circular innovation.
During the meeting, several important numbers were cited. These included a 38% reduction in CO2 emissions compared to the base year of 2015. The company also launched five new circular innovations and had a pipeline of another 15 innovations. Approximately 400,000 individuals were empowered to make sustainable choices. The company reported improved EBIT results, stronger cash flow, and improved margins across all divisions. The management also acknowledged the macroeconomic uncertainty and signs of market uncertainty.
The company's outlook for the quarter and year appeared positive. They mentioned gaining market share in the robotic mowers segment and expressed satisfaction with the market's appreciation of their products. The demand for watering products also showed gradual growth throughout the quarter, ending on a strong note. The company experienced a slightly improved organic decline compared to previous quarters but managed to achieve positive sales development in the North America market, particularly in the construction sector. Cost control measures were implemented, resulting in a significant margin uplift. The company delivered higher EBIT and improved cash flow, with improvements coming from operating results, inventory reduction, and better collection of accounts receivable. The company's focus on electrification was progressing well, with robotics and battery products accounting for 20% of total sales. They continuously launched new innovations and had a good product portfolio. Overall, the company aimed to continue improving its operating result and margin towards its financial targets.
The company also reported progress on its strategic initiatives. They enhanced their focus within light agriculture and made good progress in their development of the Sustainovate 2025 target setting. The company achieved a 38% reduction in CO2 compared to their base year of 2015, surpassing their target of minus 35% by 2025. They also launched five new sustainable innovations and had a pipeline of 15 more, on track to reach their target of 50% in 2025. The company empowered and enabled around 400,000 individuals to make sustainable choices. Overall, the company reported a good performance in their strategic execution and delivered stronger cash flow.