Swedish manufacturer Husqvarna has reported a solid second quarter of 2020, despite the impact of Covid-19.
The company’s President and CEO Henric Andersson said, “We have delivered a very good quarter. After a challenging start, given the Covid-19 situation, demand accelerated quickly as markets gradually reopened and consumers showed a high interest in lawn and garden products.”
He said Husqvarna’s Covid-19 strategy had been effective in protecting its employees and safeguarding the continuity of the business.
“We have experienced an extreme volatility during the quarter,” Andersson said, “from quickly deteriorating demand to a surge in demand.
“We have also taken decisive steps to mitigate the financial impact by applying temporary cost avoidance measures which were instrumental to deliver the second quarter result.
“We will now gradually increase our investments in some of the earlier paused strategic initiatives to support future profitable growth.”
Net sales in the second quarter of 2020 were down 2% to SEK13.5 billion (€1.3 billion). But when adjusted for the exit of Husqvarna’s Consumer Brands business and changes in exchange rates, net sales actually increased by 3%.
“We achieved growth in key categories such as watering, robotics & battery, handheld products and aftermarket & accessories,” Andersson said.
He added, “The market situation for the Construction Division strengthened during the latter part of the quarter, but in total sales declined by 18%, adjusted for changes in exchange rates.”
The company’s operating income in the second quarter came to SEK2.2 billion, representing a margin of 16.3%.
The margin improvement was attributed to temporary cost avoidance activities, as well as a favourable product mix.
“Given the considerable uncertainty about the global economic recovery,” Andersson said, “our dedicated work to navigate the complexities of the Covid-19 situation continues.”