Markets News

UPDATE 4-Gardening toolmaker Husqvarna profit jumps on stay-at-home trend but jobs to go

* Pandemic, good weather extends gardening season through August

* Sales climb 14% in the traditionally slow quarter

* Record profit, sales, sales growth for a Q3

* To speed up growth push for robotic & battery-driven products

* To reduce 3% of staff in production of petrol driven products

* (Adds background, CEO comment)

STOCKHOLM, Oct 20 (Reuters) - World no. 1 gardening power tools maker Husqvarna more than doubled quarterly profits, helped by a pandemic-induced trend to stay at home, but said it would cut jobs in production of petrol-driven tools as it boosts automation.

Operating profit of 997 million crowns ($113 million) marked a record for the July-September quarter, when business is normally relatively slow.

“The performance was supported by a favourable stay-at-home trend and good weather conditions that prolonged the gardening season,” the global leader in robotic lawn mowers, garden watering systems and garden tractors said in a statement.

Following a dip in the first quarter and at the start of the second due to the pandemic and lockdowns, Husqvarna’s sales recovered faster than feared as economies opened up, and many people spent more time than usual in their homes and gardens. Husqvarna’s share price has nearly tripled since mid-March.

The group said on Tuesday it planned to increase automation and trim costs throughout its supply chain for petrol-driven tools, cutting 350 jobs - nearly 3% of its workforce - and lowering costs by 500 million crowns.

Half of those savings will be spent on accelerating growth initiatives for robotic, battery and watering products, it said.


“All in all it was a strong quarter and we are now using it to lean forward,” Chief Executive Henric Andersson said in an interview. “We want to build our capacity in battery driven.”

While petrol-driven mowers, trimmers and chainsaws account for a large chunk of sales, Husqvarna is betting on stronger long-term demand for battery-powered handheld tools and robotic mowers as battery capacity improves.

Andersson told Reuters he sees double-digit sales growth for robotic lawn mowers and battery-driven handheld tools in 2021 as well as in 2020. “All categories have opportunities to grow also into next year but to different extents,” he said.

In the third quarter, sales grew 14%, or 21% adjusted for exchange rates, to 9.57 billion crowns, with strong demand particularly for robotic, battery-driven and watering products.

A recently launched smaller robotic mower sold particularly well, Andersson said, as did a new battery-driven chainsaw for arborists.

The rival to Deere & Company, Black & Decker, Honda Motor and Fiskars traditionally does the bulk of business towards the end of the first quarter and in the second, ahead of and during the normal peak gardening season in the northern hemisphere. ($1 = 8.8271 Swedish crowns) (Reporting by Anna Ringstrom; editing by Niklas Pollard, Carmel Crimmins and Gareth Jones)