Husqvarna AB Q2 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Johan Eliason - Kepler Cheuvreux, Research Division - Analyst : Yes. Staying on the subject on Gardena. Did you see a significant shift into the online channel? Can you give any light on that? And do you think that could actually have a more sustainable improvement for you going forward?

Question: Johan Eliason - Kepler Cheuvreux, Research Division - Analyst : Okay. And on robotics, you mentioned it's 16% of sales now. How was the growth there? Was this 16% growth from 15%, as you pointed out, mainly an effect of you closing this Consumer Brand business? Or was there actually an excessive growth for robotics as well explaining this slight change?

Question: Johan Eliason - Kepler Cheuvreux, Research Division - Analyst : And just to robotics, it was a big topic last year. How does it look today? It's not a normal year, obviously, but do you see any positive movement?

Question: Fredrik Moregard - Pareto Securities, Research Division - Analyst : First of all, related to the very strong consumer demand that you are seeing or were seeing in June, particularly. Should we interpret that as the growth rates having continued to increase all the way throughout June? Or did you see some sort of moderation towards the end of the month?

Question: Fredrik Moregard - Pareto Securities, Research Division - Analyst : Okay. Is that comment valid for both the Husqvarna consumer business as well as Gardena?

Question: Fredrik Moregard - Pareto Securities, Research Division - Analyst : Okay, perfect. And a question on expenses, very good cost control in SG&As, particularly related to selling expenses. Just wondering, admin expenses look to be up some 16% or so. Any temporary effect here that you could highlight?

Question: Carl-Oscar Bredengen - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : If we were to talk about sort of the black swan here now with Construction being down some 18% and a bit different dynamics there, how should we think about Q2 now? Is it -- are we experiencing more a flat recovery towards the end of the year and that we should see sort of a flat year-over-year development in the coming quarters? Or are we still supposed to expect material decline with further negative operating leverage on earnings for the Construction Division?

Question: Carl-Oscar Bredengen - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. And just my last question. It was originally guided that the exited sales now is going to be some SEK 3 billion and SEK 3.5 billion in cost avoidance related to the group restructuring. As we're now more towards SEK 3.6 billion in guided exited sales, what is the -- I was just going to say, what's the actual cost that's been taken out on the group level so we can look at the profitability development?

Question: Carl-Oscar Bredengen - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. Can I just ask because you've also guided down CapEx for the full year now towards more SEK 2 billion, but still you're sort of accelerating the growth and -- for the Gardena Division. Can you just talk a little bit about that, how you plan on doing that? Is that more coping with current demand because you're running low on stock in order to meet the strong demand? Or should we expect an increased growth driver for the Gardena Division in the coming year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 16, 2020 / 9:00AM, HUSQb.ST - Q2 2020 Husqvarna AB Earnings Call

Question: Johan Eliason - Kepler Cheuvreux, Research Division - Analyst : It's Johan again, Kepler Cheuvreux. Just a follow-up on this battery alliance. If I understood you correctly, could you just confirm, your aim to keep your own battery design for the how -- high-performance battery handheld products like chainsaws. If you could just confirm that. And then what's the logic? I mean, I understand it from your point of view, that you want to be able to sell the Gardena brand with a battery that sort of -- that fits many other products. But from Bosch point of view, which have a big hand power tool business as well, what's the logic here? Are you sort of paying premium prices on the batteries you will buy from them going forward and you simply think that it's worth a premium to be able to offer this ubiquity for the batteries you have in the Gardena brands?

Question: Johan Eliason - Kepler Cheuvreux, Research Division - Analyst : So you say it's basically not impacting your gross profit margin on the battery products and Gardena negatively, potentially positive or... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 16, 2020 / 9:00AM, HUSQb.ST - Q2 2020 Husqvarna AB Earnings Call