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In Q3 23, the drop in organic sales (-15%) was mainly due to lower volume sold of petrol-powered wheeled products and watering products. The negative effect on EBIT was attenuated by a moderate price increase, lower raw material and logistic costs and cost savings. The outlook is gloomy. Production is reduced in Q4 23 and weak demand is assumed in 2024. On the positive side, free cash flow improved thanks to inventory reduction and cost savings implemented last year.
Companies: Husqvarna (HUSQ-B:STO)Husqvarna AB Class B (HUSQ.B:OME)
AlphaValue
Q2 23 was broadly in line with expectation. Flat organic sales reflected strong growth for robotic lawn mowers, including a gain in market shares, an improvement in sales of watering products late in the quarter and a decrease in the Construction business. The restated operating margin improved (+0.5pt to 13.6% of sales) thanks to lower raw material and logistics costs. The positive effect of price increases was lower than in Q1 23 and volume continued to decrease.
Husqvarna reported a decent Q1 23 with organic sales up +2% due to price increases and a stable operating margin at 14% of sales excluding non-recurring items. The situation was contrasted between the strong performance of Husqvarna Forest & Garden and the drop of sales in Gardena. Consumption is uncertain and the price increase seen in Q1 23 will not be repeated in the rest of the year 23. Husqvarna is focused on cost efficiency and improved cash flow in 2023.
Husqvarna reported a decent Q1 23 with organic sales up +2% and a stable operating margin of 14% of sales excluding non-recurring items. The situation was contrasted between Husqvarna Forest & Garden which benefited from dealer restocking and good demand for robotic lawn mowers and Gardena which was impacted by no restocking and cautiousness at retailers. The economic environment and consumption are uncertain going forward. Husqvarna is focused on cost efficiency and improved cash flow in 2023.
Q4 22 was better than expected. Organic sales grew by +8%, driven by the Husqvarna Forest & Garden division (+15%). Robotic lawn mowers’ sales for the residential and professional segments were strong thanks to improvements in the supply chain and the restocking in the distribution network for the coming season. Group operating loss (before non-recurring items) was reduced significantly to SEK-13m. Consumption is uncertain in 23. Volume/mix/price should be more balanced than last year mainly dri
Bosch has agreed to acquire around 12% of the shares of Husqvarna. Both are the founding members of the Power for All alliance which aims to provide the same battery and charger for multiple devices regardless of manufacturer. For Bosch, this stake secures the partnership with Husqvarna which has world leadership positions in various product categories and an ambitious strategy in battery solutions. Regarding the group’s activities, the start to 2023 could be weak within an inflationary and lowe
The Q3 22 was disappointing. Organic sales increased by only +1% due to lower sales at Gardena (-20%) and in the Construction business (-2%). Gardena was impacted by the reduction of inventory at retailers and the Construction division was affected by disruption in the supply chain. The reported operating margin decreased to 4.5% of sales (-4.6pts yoy) due lower volume. A reorganisation programme has been implemented to boost future growth (investment in fast-growing products, exit of petrol-pow
In Q2 22, organic sales dropped by -7% (vs +14% in Q2 21) and the operating margin decreased by more than our expectation (-5.1pts to 13.1% of sales). Component shortages continued to impact sales of robotic mowers while the situation improved sequentially for ride-on mowers. Furthermore, cold weather at the beginning of the season delayed sales of watering products. Based on the current component inventories and production plan, Husqvarna is cautiously optimistic that the supply chain constrain
Husqvarna had a honourable Q1 22 despite constraints in the supply chain that impacted the sales of robotic lawn mowers and the very high comparative last year. The decrease in organic sales (-2%) came from the Husqvarna Forest & Garden division (-7%) while Gardena and the Construction divisions performed well (respectively +5% and +10%). The operating margin decreased to 14% of sales (-2.3pts) due to lower volume and the unfavourable product mix. Price increases offset higher raw material and l
Husqvarna has warned on Q1 22 sales due to the shortages of components in the production of robotic lawn mowers and lawn tractors and longer lead times. It impacts mainly the Husqvarna Forest & Garden division. The Russia/Ukraine war amplified the increase in raw material, energy and transportation costs. Husqvarna is committed to increase selling prices to compensate for higher operating costs. We maintain our 2022 estimates that were revised downwards recently.
In Q4 21, organic sales growth was buoyant (+17%), despite the high comparative in Q4 20 (+13%). All divisions contributed to organic growth. Finally, 2021 was an exceptional year with organic sales growth of +15% and a restated operating margin of 12.1% of sales (+1.4pt). 2022 is really a challenging year considering the perspective of the normalisation of the market growth combined with cost inflation that management is committed to offset with price increases.
New financial targets include organic sales growth of +5% annually, a 13% operating margin, an operating working capital to net sales of 20% or below. The ambition is to double sales of robotic mowers, including the development in the professional segment with CEORA, and the number of connected devices such as smart watering products. Electrification is a growing trend and Husqvarna is targeting a growing share of electrified products. The M&A policy is extended to the Husqvarna and Gardena divi
The acquisition of Orbit, specialised in watering products in North America, is a very positive operation for Husqvarna and its Gardena division. The integration of Orbit will enable the geographic expansion of Gardena in North America while Gardena is involved in the European markets. Orbit is the n°1 in watering products in North America. It fits with the strong market positions of Husqvarna in its market segment. The operation is accretive on EPS and dilutive at the operating margin level.
Q3 21 was good despite the tough comparative last year. Organic sales grew by +6% and the operating margin decreased to 9.1% of sales (-1.3pt) due to fewer watering products at Gardena and the integration of Blastrac. The inventory of components has been increased to secure the start to the 2022 season and the group’s policy is to offset higher raw material and logistic costs by price increases. A good Q1 22 is expected considering the low inventories at retailers.
In Q2 21, the strong organic sales growth (+14%) was driven by all product categories of the Husqvarna division and the recovery in the Construction business. Conversely, Gardena was impacted by the delay in the season for watering products in Central Europe. The group reported a high operating margin (+1.9pt to 18.2% of sales). Husqvarna had to deal with a quality problem of a component in lawn mowers but it should not damage the group’s image and future sales.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Husqvarna. We currently have 29 research reports from 2 professional analysts.
AFC has made strong progress with products and its manufacturing strategy. Despite heavy investment, the cash position, at £27.4m, was slightly better than our estimate for £26.9m, demonstrating good discipline. The monthly cash burn rate (at c. £1.3m) is tracking in-line with our expectations. Generally, we maintain our estimates for significantly increased sales in FY24e and FY25e, with the cash position unchanged. Recent news on commercial progress has been positive. The 30kW H-Power Generato
Companies: AFC Energy plc
Zeus Capital
Spectra Systems (SPSY) has an excellent record in growing profits through its highly regarded technology and relationships with key clients, which include a prominent global central bank. Now, the company is ready for the next stage, and we see the acquisition of Cartor Security Printers as a game-changer in enhancing its ability to continue, and potentially accelerate, this momentum, even as it continues to benefit from a near-term, multi-million-dollar sensor refresh programme with a long-term
Companies: Spectra Systems Corporation
WHIreland
The group’s year-end update flags trading ahead of expectations, achieved by strong growth in its Systems division, with the earlier than expected delivery of a NATO contract just prior to the year-end that pulls forward profit into FY24 making it a record year. Components continue to see a normalisation of orders and slower demand as previously flagged. Order cover is strong and further opportunities in the defence/security sector are leading to investment in Integrated Systems capabilities. Re
Companies: Solid State plc
Cavendish
Today’s trading update confirms FY24E profitability above the top end of previously guided range, with positive trading momentum building into FY25.
Companies: Revolution Beauty Group plc
2023 was a challenging year for Tandem, with cost-of-living pressures impacting demand for many of the group’s products. This led us to downgrade our forecasts several times during the year (including in December), and today’s results are largely in line with those revised projections – revenue -17% YoY to £22.2m and an adj. LAT of -£1.0m (our forecast of -£0.9m). FY24E looks more positive, however: economic pressures are easing for consumers (inflation is falling, interest rate cuts are expecte
Companies: Tandem Group plc
Solid State is a specialist value added component supplier and design-in manufacturer of computing, power and communications products. This morning, the group has provided a trading update for the year ended 31 March 2024, reporting the earlier than expected delivery of specific contracts within its Systems division and resulting in the group's FY 2024E revenue and PBT outturn anticipated ahead of our forecasts, with a commensurate decrease in our FY 2025E estimates. The delivery of these contr
Companies: FOG TND BVXP ACC HDD
Encouraging FY23 results from SPSY this morning show profits and cash a touch ahead of expectation and position the company well for a year of strong growth in FY24E. SPSY leads the market in machine-readable high speed banknote authentication, brand protection technologies and gaming security software. The company grew the business robustly in FY23 (PBTA +6%, EPS pared by increased tax payments, progressive DPS), building on a decade of double digit CAGR; and closed the year with the transfor
Liberum
Companies: LPA SOLI NANO QTX
Finals from the leader in machine-readable high-speed bank note authentication, brand protection technologies, security printing, and gaming software, in line. FY23’s stand-out feature was December’s acquisition of Cartor Holdings, the security printing business. As discussed at the time, this has moved Spectra’s Fusion polymer substrate proposition substantially forward, strengthens its competitive position and provides access to state of the art manufacturing facilities. Extending up the suppl
Allenby Capital
While revenue fell short of expectations due mainly to self-tan weakness, progress on margins, cost synergies and efficiency enabled BAR to deliver a reduction in H1 losses. While growth and profitability in other high margin brands has progressed, Skinny Tan trading is not expected to improve until next year. With synergy benefits having mostly annualised, lower sales forecasts impact the timing of the inflection to profit. We now assume losses both this and next year, albeit net cash is mostly
Companies: Brand Architekts Group plc
Singer Capital Markets
Companies: Portmeirion Group PLC
Shore Capital
Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.
Companies: Dowlais Group PLC
Edison
Companies: IG Design Group plc
Canaccord Genuity
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