Husqvarna's Last Man Standing
A SEK 400 million EBIT slide, a brand-new CFO, and a CEO who just admitted the petrol business is the moat — not the robots
HUSQ-B.ST · Earnings Call · 2026-10-21
The quarter nobody wanted to open with
Patrik Johnson's first outing as Husqvarna CFO was a Q3 that declined almost SEK 400 million in EBIT to a loss of SEK 246 million, on an organic sales fall of 5% (reported -2%, with a 3% currency tailwind doing the cosmetic work). He did not dress it up: “Profit or EBIT declined with almost SEK 400 million. So it's not a strong quarter.” — Patrik Johnson, CFO · 2026-10-21 That is about as plain as a first call gets. What makes this report worth reading is not the miss — Q3 is seasonally the group's smallest quarter, as Glen Instone reminded listeners twice — but the way the explanation has reorganised itself. A year ago the story was tariffs, refunds and price. This quarter the story is cost inflation arriving from the Middle East, a deliberate inventory purge, and a set of portfolio decisions that are quietly redrawing what Husqvarna is.The cost line has become the whole bridge
The volume/mix problem is partly self-inflicted and management is oddly proud of it. Inventory came down by around SEK 300 million year-on-year against a build last year — a roughly SEK 900 million swing — because plants were run slower on purpose. Instone framed it as a choice, and it is a defensible one: cash flow was flat year-on-year at about SEK 2.4 billion in the quarter, net debt fell to SEK 9.4 billion from SEK 9.9 billion, and ROCE of 6.4% (down from 7.3%) is entirely a profit effect, not a capital one. But the cost side is where the story sharpens. Of the second-biggest negative bridge item, roughly three quarters is pure price pressure on logistics, plastics and steel, and ~85% of the year-to-date figure traces to the Middle East crisis. The guidance is blunt: “around SEK 900 million to SEK 1 billion in total, with the vast majority of that coming from the inflationary pressure.” — Patrik Johnson, CFO · 2026-10-21 This is a global theme Husqvarna did not create — the market's own Middle East conflict cluster surfaced back in 20262 as fuel, diesel and bunker-cost keywords across transport and industrial names — but it is landing on a company with limited pricing power in a weak European consumer. The offset is the SEK 4 billion cost-out programme: SEK 935 million delivered in the first nine months, SEK 305 million in Q3, with Instone now holding over SEK 1 billion for the full year. That is genuine. It is also the reason the earnings bridge is not worse.What quietly vanished from the narrative
Twelve months ago, on this same Q3 call, Terry Burke was guiding tariff refunds as a live swing factor and the sector was trading on refund headlines. By July, Burke was warning the well was nearly dry: “There may be something, but it's highly uncertain, and the tariff situation changes.” — Terry Burke, Chief Financial Officer · 2026-07-17 This quarter, tariffs are a SEK 10 million rounding error in the bridge, and the year-to-date positive SEK 155 million is explicitly described as a Q2 artefact. The keyword has gone from the top of the company's own momentum table to a decliner. That is a real change in the earnings quality argument: Husqvarna no longer has a refund to hide behind, so the cost headwinds now have to be met by price and cost-out alone. What replaced it, top of the company's keyword table this quarter, is a rhetorical tell: proof point. Instone used it for the golf sponsorship, for the insulation of the Stone Diamond exit, for the cost programme. When a CEO reaches for proof points this often, he is asking you to believe the strategy while the P&L says otherwise."Last man standing" is the real headline
The most consequential sentence of the call came in answer to a SEB question about whether Husqvarna would pivot back toward petrol. This is a company that has spent seven years telling the market the future is battery and robotics. Here is what it now says:The keyword combustion engine products appears in the company's trajectory for the first time this quarter, alongside pivoting as a gainer. Instone also conceded electrification adoption "has slowed down, particularly in North America." That is a strategic admission dressed as continuity — and it follows his earlier remark that in mature segments Husqvarna is now willing to take volume pressure to hold price, which is exactly what has happened in Construction, where organic sales were flat on positive price and falling units. The robotics story, meanwhile, is less flattering than the golf course narrative implies. That keyword dates back to 20242 and has recurred repeatedly — this is not new. What is new is the candour: robotics sales were "relatively flat" for the full year, a larger-than-average decline in Q3, and Chinese competitors are winning the EUR 500 entry point where Husqvarna deliberately does not play. Pro Robotics has not doubled from its ~SEK 1 billion 2024 base, though Instone insists it will. The penetration argument — 2,000 golf courses served out of 38,000 — is real but is now three years old as a talking point.I don't think we pivot back. What I will say, and it sounds very nonstrategic, we fully expect to be last man standing when it comes to our combustion engine products... It's a big volume item for us and it's a big part of our profitability.