Husqvarna AB Q3 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 : It's Johan here with Kepler Cheuxreux. Congratulations as well from my side, the 10% margin has been elusive for many years. Good to see it. Now I thought it was interesting, the program you announced this morning about your petrol supply chain and investments into robotics and battery handheld. Now if my numbers are right, I mean, still some -- half of your sales is related to petrol-powered equipment, either chainsaws or wheel products and we do -- learnt that the battery and robotics is only 16%. I guess this shift will continue. Will this mean that you need to take continuous charges related to your petrol chain going forward?

Question: Johan Eliason - Kepler Cheuvreux, Research Division - Analyst : And if you look at your CapEx profile, we understand that robotics and battery are driving more R&D investments, which are partly capitalized. But for fixed investments, how does the CapEx profile look like for the robotics, battery products versus the traditional petrol-powered products?

Question: Johan Eliason - Kepler Cheuvreux, Research Division - Analyst : Good. Then on this, you want to grow the share of professional business in the Husqvarna Division. Is it specifically to, for example, robotics that you want to roll out this in a bigger way in professional? Or is it just related to the traditional business? Or can you give any sort of insights what you're thinking on how to achieve the asset? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 20, 2020 / 8:00AM, HUSQb.ST - Q3 2020 Husqvarna AB Earnings Call

Question: Johan Eliason - Kepler Cheuvreux, Research Division - Analyst : Okay. Good. And then just finally, a nitty gritty detail. I understand one of the U.S. presidential candidates of -- in favor of hiking corporate taxes. We obviously saw a lowering a few years ago. But looking at your group tax, I couldn't really figure out the net impact there. How do you see it? Because you have this set-up with a lot of manufacturing still in the U.S., will a hike to U.S. tax have sort of any significant impact for you?

Question: Gustav HagTus - SEB - Analyst : An additional question on the restructuring program announced this morning. Do you feel now with the restructuring of your petrol product division or business that you are ahead of the curve in terms of your cost structure versus pursuing volume development going forward? I guess what I'm asking is given that the direction we're heading now with robotics and battery growing at the expense of legacy products, which you tend to point out, do you forecast that those SEK 500 million gross savings will be enough to actually improve the profitability in absolute terms in 2023 for petro products?

Question: Gustav HagTus - SEB - Analyst : Okay. Great. Could you just give us an indication of what is the run rate volume development right now for this business thus far this 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. OCTOBER 20, 2020 / 8:00AM, HUSQb.ST - Q3 2020 Husqvarna AB Earnings Call

Question: Gustav HagTus - SEB - Analyst : Okay. Great. And then these SEK 250 million, which will be reinvested, does this mainly relate to hiring of engineers or product development personnel? Or are there other pockets where you will deploy these costs? And in addition to that, my guess is that it's the Husqvarna and, to some extent, the Construction Division where these costs will be taken out. But is there also the case that that is where you will -- will add these incremental costs? Or will they be also affecting Gardena or other places?

Question: Gustav HagTus - SEB - Analyst : All right. Great. And finally from me, curious to hear a little bit about sort of the development for your robotic lawnmowers for professional use. Any comments from your customers where you're having trials? If they're ready to go on a sort of a broader -- implementation of your products there, I guess, airports are not the greatest end customers right now, but I guess golf [courts] and others have had a better year and perhaps would be looking to invest in something like this.

Question: Carl-Oscar Bredengen - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Carl here. Just a quick question from me. On the SEK 250 million that you expect for strategic initiatives going forward, are you expecting to capitalize this or will this be fed through the P&L?