Husqvarna AB (publ)

Hello everyone and welcome to the presentation of Husqvarna Group's report for the second quarter of 2025. My name is Johan Andersson, responsible for investor relations and will be the moderator here today. With me here in Stockholm, I have our CEO Pavel Hajman and our CFO Terry Burke. Pavel and Terry will present the report and then afterwards we will open up for a Q&A session. In the Q&A session, you can either use the telephone conference or you can enter your questions through the web interface. So with that, once again, welcome and I'll leave it over to you Pavel.

Thank you Johan and of course a warm welcome from my side as well. I need to press here. So let us start with the latest news as per our press release from yesterday evening. The board of directors has appointed Glenn Inston as the new CEO, effective August 11th. I'm very glad to hand over the baton to Glenn. He's a great leader with long experience in Husqvarna. I wish him of course all the best for the new role. And Glenn will of course then present himself on the upcoming quarter three report. I am also very glad and proud to announce that we close the second quarter, which is our biggest quarter for the year, on a positive note. We delivered a good organic growth for the group and improved EBIT as well as improved EBIT margin across all three divisions. And two areas of strong performance this quarter were robotic mowers and watering products. Our consistent focus on innovation, -to-market execution and delivering premium products under both Husqvarna and Gardena brands is clearly delivering strong results. Additionally, we continue to deliver on our cost saving measures. We focus on cash flow and we have further reduced our net debt. At the same time, we're making good progress on our sustainability agenda and have now reached two out of our three sustainable targets. Delivering on both fronts, financial and sustainability, reflects our commitment to sustainable value creation. However, we should bear in mind that the macroeconomic environment remains uncertain with ongoing trade tariffs, geopolitical instability, currency fluctuations and also a cautious behavior from both channel partners and consumers. And we continue to address these challenges through operational efficiencies, pricing strategies and also supply chain optimization. Unfortunately, we remain fully aware that these factors will continue to impact us and particularly in North America. So with that, let us also look a little bit at the financial details for the quarter. And if we start with group net sales for the quarter, we delivered a 5% organic growth, largely driven by the Husqvarna, Forest and Garden, Engardena, robotic, handheld and watering categories. However, as said, we continue to experience the uncertainty in the global economy and all three divisions have experienced difficult market conditions with lower sales in North America. Group operating income increased across all three divisions and grew by 7% to 2 billion 41 million for the group and the margin is up with one percentage point. And this development is driven by the higher sales volumes, also a favorable product mix and as well as a good results from our cost saving program. And the improvement is despite the negative currency, despite trade tariffs and also despite negative price effects. And we're actively working to deliver a good cash flow where inventory optimization is one of several key areas. An inventory was reduced by close to 3 billion SEK compared with last year as reported. And direct operating cash flow amounted to 2.4 billion in the second quarter and we also managed to reduce the net debt with 3.3 billion compared with the same period last year. As for robotics and battery, the share of group sales is now 22% up from 20% on a 12 month rolling basis. And this driven by our many new product launches within these areas. And we have seen a very strong growth in our pro robotic motor category, along with increased transition to the boundary wire free products for consumers. Regarding battery, both professional and residential battery product categories increased in the quarter. Particularly handheld product, but also our newly introduced wheel products. So with that overall summary of the quarter, let me then pass over to you, Terry, to go through some more specifics for our divisions, please.

Thank you, Pavel. Moving to the Husqvarna Forest and Garden Division. This was a strong quarter for the Forest and Garden Division with an organic sales growth of some 5% and an improved operating margin of 13.3%. We talked a little bit earlier about the good development of sales in robotic mowers. For the Forest and Garden Division, we had a 15% robotic mowers growth. So we feel very pleased about that. It was particularly strong in the pro segment. We also had good sales development in the handheld and battery powered products. Again, in the pro side was strong, but also growth in the residential. The challenging situation of North America continues. That has continued throughout the course of the first half of the year. And we expect that to continue going into the second half of the year as well. This has had a negative impact on our operating income. There is a negative currency effect of some 50 million in the quarter as well. And we have lowered prices, particularly in the robotic, with the price adjustment to reflect the very competitive landscape we face in robotic. First half year, we have a 5% organic sales growth and an operating margin of 13.1%. Also, maybe worth pointing out the currency effect for the first half year is some negative 155 million. Moving on to Gardena. Also a good strong quarter two for Gardena with organic sales growth of some 7%. And again, an improved operating margin at 17.5%. The growth was really driven by Europe. And in particular, we had strong watering growth. Good demand in the peak season of quarter two for watering. So that was really good to see. Some 15% watering sales growth in the quarter. We also had growth in our robotic lawnmowers, really driven by the launch of our three new boundary wire free models. Which have been well received into the market as well. Our EBIT operating income grew by 18%. Really helping through the volume growth, but also favourable mix. Watering is a margin accretive product category for us and we continue to live on cost savings. There was a small currency headwind of some 15 million negative in the quarter. First half year, sales have declined by 1% organically and we have an operating margin of some 14.5%. Currency headwind in quarter in the first half year is some minus 35 million. Construction. Construction was the the one division that did not have sales growth in the quarter with a sales decline of some 4% organic. However, it did improve their operating margin quite considerably to 12.7%. I would describe the market situation as quite stable in Europe and let's call it the rest of the world. But there is a continued weak market in North America with lower sales and lower operating income. There has been good growth in demolition robots, dust extractors and aftermarkets. Which allows us a more positive mix which is contributing to the margin. The margin improvement and in addition to that our operational efficiencies and our cost saving program is all contributing to that improved operating income and margin. There was a currency headwind. So despite this improved operating income, there was a currency headwind of some 60 million in the quarter. In the first half year sales have declined by 6% again really driven by North America. And an operating margin a slight improvement to 10%. Also to point out in the first half year currency had a negative impact of 80 million for the construction division. Moving on. To our EBIT bridge. Our quarter two EBIT margin improves by one percentage point and it improves to .4% compared to 12.4 quarter two last year. We have a positive volume and mix effect. We've talked about the 5% organic sales growth and in addition to that we have grown in favourable margin accretive categories such as robotic water and construction to a certain degree in the mix within construction. We have a negative price impact of some 160 million negative. That's the net effect. There's a lot of obviously price movement going on within but the big driver for the negative price development is the robotics price adjustment. Both in the forest and garden division and gardener division. We continue to deliver on our cost saving program some 225 million cost savings coming through in the quarter. So we feel very pleased about that. And we continue with some transfer emotional initiatives investments of some 40 million. There is a currency headwind that we talked about of some 125 million. And also we start to see the tariff impact now and the gross tariff impact in the quarter was some 65 million. Now that was more or less half offset by price and mitigating actions. So a negative 190 from currency and tariffs leaving us to our .4% margin just above 2 billion EBIT. So for the first half year we now have a margin operating margin of some 12% 12% and 3.6 billion of EBIT. Again moving from the left to the right. We now have a small positive effect for the volume and the mix of some 20 million. Price year to date is a negative 290 again predominantly driven by the robotics price adjustment. Our cost savings program is now above 400 million in the first half of the year as we continue to finalize and close out our cost reduction programs. Transformational initiatives of some 70 million we've continued to invest and then we have the currency effect for the first half year of some negative 265 and then we have the 65 of tariffs gross tariff impact. Okay with that I think we can move on to the balance sheet. We maintain a solid financial position and maybe just a couple of things to highlight here. As you can see our inventory levels continue to reduce. We come from a high level in 2024 and worked hard to reduce our inventory levels. 2.8 billion reduction compared to this time last year. If you adjust for currency effect it's around a 2 billion inventory reduction. We've got a good cash and cash equivalence that is improving as you can see here and we have reduced our borrowings by a billion year over year as well. Maybe also to call out trade payables has increased but that's really driven by the higher volumes. Moving on to net debt EBITDA. We have an improved ratio here and an improved situation with our net debt EBITDA. We have now reduced this from to 2.3 compared to 2.5 at the start of the year and we also have 2.5 at the end of Q1. So that's really good to see that development and that is really driven by our continued reduction of net debt. So it's good to see. Finally from my perspective good solid direct operating cash flow. We are at 1.1 billion for the first half of the year. I would say that's good performance. It's below the previous years but of course the previous years we were much more aggressive in reducing our inventory levels. We continue to reduce our inventory levels but at a lower rate than what we did in previous years. So I think there's a good situation with our cash flow as well and that continues to help us maintain a healthy balance sheet and continue to lower our net debt. With that Pavel I'll pass back to you.