Focused on a strong cashflow during a challenging year, Husqvarna issued its 2024 Year-End Report as well as an overview of fourth quarter 2024. The company produces outdoor power products, including robotic lawn mowers and batteries, and watering products and power tools. The company pioneered the world’s first solar-powered robotic lawnmower in 1995 and reports it has sold more than 3 million. North America is Husqvarna Group’s largest market with approximately a third of the company’s total sales in 2024.
Also this week, days before the Year-End Report was released, Husqvarna Group announced a strategic partnership with Flex Ltd., an advanced, end-to-end global manufacturer, which includes the divestment of its manufacturing operations in Orangeburg, S.C., effective immediately. An overview of that Feb. 4 announcement is included in this article.
In reporting on fourth quarter 2024, the Stokholm-based company reported that net sales decreased by 2% to SEK 8,464m (8,605), said changes in exchange rates contributed with 1% and that sales declined organically by 3%, according to its Feb 5 statement of results. It further reported that operating income amounted to SEK -1,285m (-983) and the operating margin was -15.2% (-11.4). Excluding items affecting comparability, Husqvarna noted that operating income amounted to SEK -694m (-168) and the operating margin was -8.2% (-1.9).
Items affecting comparability amounted to SEK -591m (-815), and was related to the Group's cost savings initiatives, announced in October 2024 and related to costs following the reclassification of the Orangeburg manufacturing facility in North America to assets held for sale. Earnings per share after dilution amounted to SEK -1.95 (-1.77) and earnings per share excluding items affecting comparability and after dilution amounted to SEK -1.15 (-0.67).
Cashflow from operations and investments amounted to SEK -925m (-743). Direct operating cashflow increased to SEK 582m (523).
The Feb. 5 news release detailing the 2024 results noted comments from Husqvarna CEO Pavel Hajman, who focused on the company’s strong cashflow during a challenging year.
Husqvarna CEO Pavel Hajman focused on the company’s strong cashflow during a challenging year in its newly-released 2024 Year-end Report. Photo Credit: Husqvarna Group
"In 2024, we accelerated our focus on executing the strategy and adapting the organization to drive efficiency and continued transformation,” said Hajman. “This enabled us to achieve significant cost savings, deliver strong cashflow, and implement a comprehensive product launch program for the 2025 season.” Commenting on market conditions in the fourth quarter, he added: “The year's challenging market situation continued into the fourth quarter, with subsequently lower consumer demand. The Group's sales declined organically by 3% and the operating income, excluding items affecting comparability, amounted to SEK -694m (-168) for the fourth quarter.”
A summary of the company’s January – December 2024 results were reported as follows:
- Net sales decreased by 9% to SEK 48,352m (53,261). Planned exits of low-margin petrol-powered business impacted with -2%. Sales declined organically by 7%.
- Operating income was SEK 2,597m (3,880) and the operating margin was 5.4% (7.3). Excluding items affecting comparability, the operating income amounted to SEK 3,195m (4,970) and the operating margin was 6.6% (9.3).
- Earnings per share after dilution amounted to SEK 2.31 (3.81) and earnings per share excluding items affecting comparability and after dilution amounted to SEK 3.12 (5.28). Additionally, cashflow from operations and investments was SEK 4,372m (4,414). Direct operating cashflow increased to SEK 6,905m (6,541), driven by reduced inventories.
- The CO2 emissions across the value chain have been reduced by -56% (-44) compared to the 2015 base line. The Board of Directors will propose a dividend for 2024 of SEK 1.00 per share (3.00) to the Annual General Meeting.
The Husqvarna report also included information and comments on the North American market, the company’s ongoing strategic transformation and results of its sustainability initiatives shared below.
In the Husqvarna Forest & Garden Division, organic growth was unchanged for the quarter, with growth in handheld and wheeled products, as well as in parts and accessories. Sales in the Gardena Division decreased, with growth for hand tools, while sales of watering products declined. In the Husqvarna Construction Division, sales declined in North America due to a continuation of the challenging market situation, however, our sales increased in Europe.
Improving Results in North America
Just days before the Year-End Report was released, Husqvarna Group announced a strategic partnership with Flex Ltd., an advanced, end-to-end global manufacturer, which includes the divestment of its manufacturing operations in Orangeburg, S.C., effective immediately. Flex will manufacture Husqvarna Group's products in the factory under a long-term supply agreement, ensuring continued production of the company's wheeled products and assembly of handheld products for the North American market. The partnership aims to increase profitability, improve capital efficiency, enhance production flexibility and strengthen the Group's competitiveness in North America.
In a separate news release issued by the company on Feb. 4, Husqvarna offered this summary update, stating: With Flex assuming manufacturing responsibilities of the Orangeburg facility, the current workforce will be offered employment with Flex. The partnership is expected to result in cost-savings of approximately SEK 350m after five years. The one-time costs for Husqvarna Group, booked in Q4 2024, amount to approximately SEK 250m in addition to a limited one-time cost in Q1, 2025.
“This strategic measure is a significant step towards driving long-term profitability and enhancing our operational efficiency within the Husqvarna Forest & Garden Division. The partnership secures our manufacturing of important products for the North American market, while enhancing flexibility and customer focus” says Pavel Hajman, CEO of Husqvarna Group.
All Husqvarna Group’s three divisions are represented on the American market, where the Orangeburg factory is producing for the Husqvarna Forest & Garden division. Husqvarna Group will continue to lead the innovation and design of the product portfolio, with continued commitment to delivering high-performing, quality products and solutions for the North American market. The company noted that in recent years, the Husqvarna Forest & Garden Division has taken decisive actions to improve results in North America. Low-margin business has been discontinued, and the production structure has been consolidated.
Strong Cashflow, Reduced Net Debt
For the full year 2024, operating income, excluding items affecting comparability, amounted to SEK 3.2bn (5.0). The decrease was due to lower sales volumes with higher promotional activities and a negative product mix. This was partly offset by good results from savings programs, which generated SEK 735m. Direct operating cashflow increased to SEK 6.9bn (6.5), driven by substantial inventory reductions. We have reduced net debt by SEK 1.2bn compared to last year. The Board will propose to the Annual General Meeting a dividend of SEK 1.00 (3.00) for the year, in line with our dividend policy, representing 32% of earnings per share excluding items affecting comparability, or 43% of earnings per share.
Strategic Transformation Continues
The company statement reported that its long-term transformation is about delivering value to customers, shareholders and employees through growth in the focus areas; robotic mowers, battery-powered products, watering and solutions for the professional market. Since 2021 we measure our progress through operational ambitions, including share of electrification, number of connected devices, and sales of robotic mowers. During the year, the share of electrified products reached 44% (42) of our sales of motorized products. Connected devices grew to 4.9 million (4.5). For robotic mowers, net sales amounted to SEK 7.2bn (8.1). We strengthened our position and grew in the professional robotics market. However, sales in the residential segment declined due to increased competition in the low-value segments, as well as restrained consumer spending, particularly for the high value segments. For the 2025 season, we have significantly expanded our range with new boundary wire-free robotic mowers.
Delivering on Sustainability Targets
“Our ambition to electrify the product range is the main enabler to consistently reduce our carbon footprint,” according to Pavel Hajman, CEO. He added, “To date, we have reduced CO2 emissions (Scope 1, 2 and 3) by -56% compared with the base year of 2015. With that, we have exceeded our target of a -35% reduction by 2025. Work to reduce CO2 emissions is continuing and includes exploring alternative fuels for some of our products.” In commenting on the year ahead, Hajman expressed gratitude to his colleagues and business partners and said, “Together, we will continue to focus on opportunities in the market, strengthen our position and aim to increase our profitability. Our cost-saving efforts are successful, and we are well prepared for the 2025 season, with a strong product range and many exciting launches for our customers."
