Husqvarna AB (publ) (HUSQ-B.ST) | Investment Case

1. Company Snapshot

1.a. Company Description

Husqvarna AB (publ) produces and sells outdoor power products, watering products, and cutting and surface preparation equipment.It operates through three divisions: Husqvarna Forest & Garden, Gardena, and Husqvarna Construction.The Husqvarna Forest & Garden division offers handheld products, such as chainsaws, brush cutters, trimmers, and leaf blowers; wheeled products, such as front riders and zero-turn mowers; robotic lawn mowers; and accessories and spare parts.

The Gardena division provides watering systems; robotic mowers, trimmers, hedge cutters, and shrub shears; garden tools, such as secateurs, loppers, axes, and digging tools; and smart garden systems.The Husqvarna Construction division offers power cutters, light compaction and concrete placement equipment, floor grinding machines, dust and slurry solutions, diamond tools for construction and stone industries, floor saws, and demolition robots.The company sells its products and solutions to forestry, tree care, landscaping, commercial lawn, and garden services sectors, as well as home and garden owners, and light construction and stone industries primarily under the Husqvarna, Gardena, Orbit, Diamant Boart, Jonsered, Flymo, RedMax, Zenoah, and McCulloch brands through dealers and retailers.

It operates in Germany, France, Sweden, Austria, rest of Europe, the Asia/Pacific, Canada, the United States, Latin America, and internationally.Husqvarna AB (publ) was founded in 1689 and is headquartered in Stockholm, Sweden.

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1.b. Last Insights on HUSQ

Husqvarna AB's recent performance was negatively impacted by the ongoing cultural debate over leaf blowers in the US, which has led to increased scrutiny and potential regulatory pressures on petrol-powered machines. The company's interim report for January-September 2025 also raised concerns, although specific details are not disclosed. Furthermore, the global power cutter market, where Husqvarna is a key player, is experiencing a slow growth rate of 3.58%, which may affect the company's sales. Additionally, the company's leadership is undergoing a transition with Omar Attar appointed as interim President of the Husqvarna Forest and Garden Division.

1.c. Company Highlights

Last Price	46.1
Change Percentage	0.72%
Open	45.77
Previous Close	45.77
Market Cap ( Millions)	26359
Volume	1182997
Year High	67
Year Low	40.94
M A 50	46.93
M A 200	49.59

FCF Yield	12.33%
Dividend Yield	2.17%
ROE	5.80%
Debt / Equity	49.16%
Net Debt / EBIDTA	258.75%
Price To Book	1.07
Price Earnings Ratio	18.54
Price To FCF	8.11
Price To sales	0.55
EV / EBITDA	10.89

2. Husqvarna Delivers Strong Q2 with 5% Organic Growth and Margin Expansion

Husqvarna Group reported a robust second quarter, with net sales growing 5% organically, driven by strong performances from the Husqvarna Forest & Garden and Gardena divisions. The group's operating income rose 7% to SEK 2.041 billion, with a 1 percentage point improvement in margin, despite headwinds from currency fluctuations and trade tariffs. Earnings per share (EPS) came in at SEK 2.73, surpassing analyst estimates of SEK 2.2, marking a 24% positive surprise. This strong financial performance underscores the company's ability to navigate macroeconomic challenges while maintaining profitability.

Publication Date: Jul -21

                                    📋 Highlights
                                    Strong Organic Sales Growth:
                                                5% organic growth in net sales, driven by Husqvarna Forest & Garden and Gardena divisions.
Improved Profitability:
                                                7% increase in operating income to SEK 2.041 billion, with a 1pp margin improvement.
Sustainability Progress:
                                                Reached 2 out of 3 Sustainovate targets and reduced net debt by SEK 3.3 billion.
Robust Cash Flow:
                                                Inventory reduction of SEK 2.8 billion and improved net debt/EBITDA ratio to 2.3x.
Robotics Growth:
                                                Robotics sales reached SEK 7.8 billion on a rolling 12-month basis, with 75% of residential robotics sales being boundary wire-free.

                                

Segment Performance and Operational Highlights

The Husqvarna Forest & Garden division was a key contributor, with 5% organic sales growth and an improved operating margin of 13.3%, driven by a 15% surge in robotic mower sales. Gardena also performed well, achieving 7% organic growth and a margin of 17.5%, supported by strong demand for watering products. Conversely, the Construction division saw a 4% organic sales decline, primarily due to weakness in North America, though its operating margin improved to 12.7%. The company's focus on innovation and sustainability continued to yield results, with robotics and battery products now accounting for 22% of group sales on a rolling 12-month basis.

Sustainability and Operational Efficiency

Husqvarna made significant progress on its sustainability agenda, achieving two of its three Sustainovate targets. The company reduced its net debt by SEK 3.3 billion year-over-year and improved its inventory levels by SEK 2.8 billion, enhancing its cash position and operational efficiency. The net debt/EBITDA ratio improved to 2.3x, driven by continued debt reduction and strong cash flow generation, with direct operating cash flow reaching SEK 1.1 billion for the first half of the year. Management highlighted the importance of sustainability, with a focus on carbon reduction, circular economy initiatives, and social responsibility.

Valuation and Outlook

3. NewsRoom

United States Leaf Blowers Market Report 2025 with Forecasts to 2033 | Now Available

Dec -03

Source:

HUSQVARNA GROUP: INTERIM REPORT JANUARY - SEPTEMBER 2025

Oct -21

Source:

How the battle over leaf blowers became a front in US culture wars

Oct -15

Source:

Clas Ohlson (OM:CLAS B) Reports Q1 Sales Growth To SEK 2,814 Million

Sep -11

Source:

Omar Attar appointed interim President of the Husqvarna Forest and Garden Division

Sep -08

Source:

Power Cutter Market Focused Insights 2025-2030 with Exclusive Data on 30 Vendors Including Husqvarna, Makita, Robert Bosch, Stanley Black & Decker, STIHL, Techtronic Industries

Aug -25

Source:

Commercial Air Scrubber Market Research Report 2025-2030 Featuring Abatement Technologies, Carrier, Edgetech, Husqvarna, Legend, Novatek, Purafil, Waves Aircon, XPOWER Manufacture

Aug -25

Source:

Cordless Battery-Powered Weeder Market Forecast Report 2025-2030, with Profiles of Husqvarna, Makita, Deere & Company, Stanley Black & Decker, Techtronic, Robert Bosch, Chervon, Positec Power Tool Co.

Aug -18

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.28%)

6. Segments

Husqvarna Forest & Garden

Expected Growth: 4.5%

Husqvarna Forest & Garden's 4.5% growth is driven by increasing demand for outdoor power equipment, particularly in the Americas, and a growing trend towards professionalization in the forestry and gardening industries. Additionally, the company's focus on innovation, digitalization, and sustainability initiatives contributes to its growth momentum.

Gardena

Expected Growth: 3.8%

Gardena's 3.8% growth is driven by increasing demand for outdoor power equipment, particularly in the European market. Husqvarna's strategic focus on innovation, sustainability, and digitalization has enhanced product offerings, improving customer experience. Expanding distribution channels, strong brand recognition, and a growing trend towards gardening and outdoor living also contribute to the segment's growth.

Husqvarna Construction

Expected Growth: 4.2%

Husqvarna Construction's 4.2% growth is driven by increasing demand for urbanization and infrastructure development, coupled with a growing need for efficient and sustainable construction solutions. The segment benefits from its strong brand reputation, innovative product offerings, and strategic acquisitions, enabling it to capitalize on emerging trends in the construction industry.

Group Common

Expected Growth: 3.5%

Husqvarna AB's Group Common segment, with a 3.5% growth rate, is driven by increasing demand for outdoor power equipment, particularly in the Asia-Pacific region. Additionally, the company's focus on innovation, digitalization, and sustainability initiatives, such as battery-powered products and robotic lawn mowers, contribute to its growth momentum.

7. Detailed Products

Chainsaws

Husqvarna's chainsaws are designed for professional forestry and tree care, as well as for homeowners who need to cut firewood or clear land.

Trimmers and Brushcutters

Husqvarna's trimmers and brushcutters are designed for lawn care and landscaping, providing efficient and easy trimming and cutting of grass and weeds.

Lawn Mowers

Husqvarna's lawn mowers are designed for homeowners and professionals, offering a range of walk-behind, ride-on, and robotic mowers for various lawn sizes and types.

Garden Tractors

Husqvarna's garden tractors are designed for homeowners with larger lawns, providing a range of attachments and accessories for lawn care and landscaping tasks.

Ride-on Mowers

Husqvarna's ride-on mowers are designed for professionals and homeowners with large lawns, offering a range of models with various features and attachments.

Zero-Turn Mowers

Husqvarna's zero-turn mowers are designed for professionals and homeowners with large lawns, offering high-speed mowing and maneuverability.

Automower Robotic Lawn Mowers

Husqvarna's Automower robotic lawn mowers are designed for homeowners, providing a convenient and efficient way to maintain lawns.

Battery Products

Husqvarna's battery products include chainsaws, trimmers, and blowers, designed for professionals and homeowners who need reliable and efficient battery-powered tools.

Construction Equipment

Husqvarna's construction equipment includes demolition robots, compaction equipment, and concrete cutting equipment, designed for professionals in the construction industry.

8. Husqvarna AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Husqvarna's products are moderately substitutable with other brands, but the company's strong brand reputation and quality products reduce the threat of substitutes.

Bargaining Power Of Customers

Husqvarna's customers are fragmented and lack bargaining power, giving the company an upper hand in pricing and product offerings.

Bargaining Power Of Suppliers

Husqvarna's suppliers have some bargaining power due to the company's dependence on them for raw materials, but the company's large scale and diversified supply chain mitigate this threat.

Threat Of New Entrants

The outdoor power equipment industry has high barriers to entry, including significant capital requirements and established distribution networks, making it difficult for new entrants to compete with Husqvarna.

Intensity Of Rivalry

The outdoor power equipment industry is highly competitive, with several established players, including Husqvarna, Deere, and STIHL, competing for market share and customer loyalty.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	39.94%
Debt Cost	7.97%
Equity Weight	60.06%
Equity Cost	11.47%
WACC	10.07%
Leverage	66.51%

11. Quality Control: Husqvarna AB (publ) passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Kongsberg Gruppen

A-Score: 5.9/10

Value: 1.4

Growth: 8.9

Quality: 8.0

Yield: 5.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

DMG MORI

A-Score: 5.9/10

Value: 4.5

Growth: 2.4

Quality: 7.1

Yield: 3.8

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

SKF

A-Score: 5.8/10

Value: 4.4

Growth: 4.6

Quality: 5.0

Yield: 6.2

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

SFS

A-Score: 5.1/10

Value: 4.5

Growth: 5.4

Quality: 6.5

Yield: 3.1

Momentum: 2.0

Volatility: 9.0

1-Year Total Return ->

Husqvarna

A-Score: 4.6/10

Value: 6.1

Growth: 3.9

Quality: 3.3

Yield: 7.5

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

QinetiQ

A-Score: 4.2/10

Value: 5.0

Growth: 4.4

Quality: 2.4

Yield: 2.5

Momentum: 7.5

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-3.98%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.07%

Husqvarna AB (publ) - SE0001662230

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on HUSQ

1.c. Company Highlights

Stable Momentum

Average Quality

Average Yield

Earnings Miss

Revenues Beats

Lower Growth

Weak Momentum

Revenues Miss

Average Growth

Earnings Beats

Higher Yield

Lower Quality

2. Husqvarna Delivers Strong Q2 with 5% Organic Growth and Margin Expansion

Segment Performance and Operational Highlights

Sustainability and Operational Efficiency

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.28%)

6. Segments

Husqvarna Forest & Garden

Expected Growth: 4.5%

Gardena

Expected Growth: 3.8%

Husqvarna Construction

Expected Growth: 4.2%

Group Common

Expected Growth: 3.5%

7. Detailed Products

Chainsaws

Trimmers and Brushcutters

Lawn Mowers

Garden Tractors

Ride-on Mowers

Zero-Turn Mowers

Automower Robotic Lawn Mowers

Battery Products

Construction Equipment

8. Husqvarna AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Husqvarna AB (publ) passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

46.1$

Current Price

46.1$

Potential

-0.00%

12.e Scoring ^Insights

12.f DCF ^BETA