Good morning, everyone, and warm welcome to Fotografiska and Husqvarna Group's Capital Markets Day 2021. My name is Johan Andersson, and Head of Investor Relations, and will be the host here today. We of course also would like to welcome everyone that is listening in online. To support us taking through the day here and how we will create sustainable shareholder value, we have invited Mia Odabas. Mia will be our moderator, and she has very many years of experience from both journalism and television. Warm welcome, Mia. Thank you very much, Johan. You've been working with this day for quite some time now. Now it's, today, it's the big day. What are your expectations? Of course, from myself, I think that everyone will have a great understanding of our strategy going forward, and of course, how we will, in the long term, create sustainable shareholder value. I hope we'll deliver on that. Thank you very much, Johan. Thank you. Good morning, I'd like to say to you of course as well, to all of you in the room, and good morning also to those of you following us online. I'll be the one to guide you through the very intense morning session that we have here today, and this is the agenda. We're going to spend 90 minutes on group strategy. We're going to show you a bit of history first, and then talk about external trends, talk about the group strategic decision with the CEO, and the financials of course with the CFO, the new financial targets that I guess you've seen already yesterday evening. Followed by Q&A, and then we have a product exhibition for you in the next room. The second part of this morning session is about the divisional deep dives. We'll dive into Gardena, Husqvarna Division, and Construction together with the presidents, followed by a Q&A and a summary from the CEO. That's the morning session, and this is the management team. These are your hosts here today. They're all present, all eight of them. Five of them you're gonna meet o stage together with me here later on in the program. All of them are here, so if you would like to ask questions, just grab them during the coffee break or after the program. As for questions, we have two Q&A sessions, and, for those of you in the room, it's really easy. You just raise your hand and grab a microphone and present yourself. For those of you following us online, it's also really easy. You just type your question in the question field, which is in the bottom of the video, and they'll end up in my iPad that I have next to me. Feel free to put forward questions when it's time for questions. Just a couple of housekeeping details before we start. Phones on silent mode, please. If something happens that we do not want to happen, we have two emergency exits, each side of the room. Are you ready to start the program? I can see some nods and, you know, some humming here. Let's kick off the first session of this Capital Markets Day. It's about Husqvarna Group strategy, and we are going to take you back 330 years in time and remind you of a couple of glorious moments in Husqvarna history. This film shows the continuous innovation and transformation in Husqvarna, as well as a couple of major strategic decisions taken lately, taking the group to where they are today. Passion for innovation is about turning new ideas into business opportunities. This has guided us at Husqvarna Group for over 330 years. Our innovation mindset and pioneering spirit have always enabled us to adapt and transform to meet customer needs. In recent years, we built an even stronger company, supported by key strategic activities. We created three divisions reflecting our strong customer focus. We launched our Sustainovate program, leading the industry towards sustainable solutions. We strengthened our position through a sharp focus on our leading premium brands. We exited non-core business and grew through strategic acquisitions in construction, and most recently in Gardena. We have delivered strong financial performance and a significant increase in operating margin since 2013. Today, Husqvarna Group has world-leading market positions, robotic mowers, watering and smart garden solutions, light construction products, and professional handheld solutions. With clear technology leadership in our industry, connecting and engaging with our end users. From this strong position, and with our continued passion for innovation, we will continue to shape great experiences and create sustainable value. I'm joined here by the CEO of the group, Henric Andersson, and the CFO, Glen Instone. Welcome to your own Capital Markets Day. Thank you. Let's give them a hand. I could see a couple of iconic products in the film, rifles, sewing machines, the motorcycles, not to say the least. Looking back, Henric, you've been in the company for more than 20 years, and that goes for you too. It does. We're looking at like 40-45 years of experience, of Husqvarna experience here. Looking back, Henric, what would you say are the most important strategic decisions? I mean, 330 years is a long time, so I don't think. All of them. We can cover them all. But if you just take a few in fairly recent times, I think the way the company was focused around outdoor power and construction equipment, divesting many of the other businesses, I think was one big thing. Of course, the bet into robotics was one big. In recent times, I would say it is how we reorganized to decentralize more and to focus more on the different customer segments that really enabled us to perform the way we have. What do you say, Glen? I would say it was when we exited the non-core business. You know, some SEK 4.5 billion of exits really allowed us to focus on the core business. What are some challenging decisions, the most challenging ones that you've been through? There are many. Many, of course. I mean, the whole COVID period, of course. Yeah I mean, it is more operational, but there were a lot of difficult decisions we had to make during that timeframe. I think speaking for the team, I think the reorganization was very challenging back then. And of course, giving up SEK 4.5 billion in revenue didn't. It was not easy either. Mm-hmm. I think we'll come back to that a little bit later. Now, in the film, we're talking about continuous innovation, transformation. You're actually now in a new transformational period. How would you describe this transformation, Henrik? I mean, there's so many transformational trends that are affecting society at large and us, as a company, of course, and I think we are incredibly well-positioned to build on these and leverage these and build a different kind of Husqvarna Group for the future. I think the transformation is more to continue the journey we have been on here for a few years, but try to accelerate it and to increase our ambitions. We'll talk more about both trends and transformation later on in the program. Glen, you've had a very eventful financial journey over the last couple of years. You've doubled the margins. You've exited segments. You said that you've lifted Gardena with a big acquisition just a month ago. You've built a very strong position financially. What would you say is the most important contributor to this strong financial position? Multiple, but I would say it is that the focus on the core that really allowed us to increase the margins. You know, we reduced the low-margin business, and therefore put the focus on the higher margin business. Mm-hmm. That's also the assets that you're talking about. We have been through a corona period. It might not be over. We don't know yet. How much has this corona staying-at-home, taking-care-of-your-garden, instead-of-traveling trend supported your result? We feel we've had a tailwind, that's for sure. Of course, short-term, people were spending more on their home, in their gardens, certainly on our products and services, and we made a lot of cost savings as well, or cost avoidance activities, you know, when we had to just stop. Now that may reverse to some extent, but at the same time, we feel there's a larger interest in our products and services. More people are falling in love with their gardens and therefore want to spend time. Yes. Let's see. Therefore, they swap the next traveling thing with, for the gardening. I was gonna ask you how sticky it is, but you already said that you hope it's kind of sticky. Henrik, they were talking about here in the film the innovating mindset and the pioneering spirit. How would you describe Husqvarna culture? I mean, many times we refer to ourselves as one of the oldest startups in the world. I think if you go through our history, I mean, the rich 330 years, one thing that stands out is this ability of continuously over and over again reinventing yourself, and I think that is tied to the culture. I think at some level, I think as an organization, we are curious in the sense of, is there a better way of doing things? I mean, is there a better way? Also to have the courage to actually go for it every now and then. I think that is really in our culture. Curiosity and the courage. Mm-hmm. I think you'll show some of it later in your presentations. Now, finally, Glen, all-time high profitability, good momentum in the business. Where do you see 2022? What kind of year is that for you? We're expecting a strong start to the year, that's for sure. I think people in the audience know well enough, it's Q1's a lot about selling in. We expect that, a strong start. Q2, it's where the music plays. Let's see how that happens. Great. We're gonna see how the music plays. Thank you, Henric and Glen. We'll be seeing a lot more of you obviously later on in the program. Before that, let's look into a couple of important future trends in society with direct implication on Husqvarna's business. Sustainability is a global commitment to meet the needs of the present without compromising future generations, setting the new standard for both society and industry. With an increased awareness of the scarcity of resources, innovation and new technology are accelerating the conversion to a more sustainable society. Electrification is an important dimension of this and will be key to shaping how society and infrastructure develop. Electrification is essential to minimize environmental impact, the reduction of CO2 emissions, and the reduction of noise, as well as to enable both automation and connectivity. Autonomous solutions are redefining how industry operates, increasing safety, efficiency, and sustainability. Development within autonomous solutions is driven by technical innovation and customer behaviors and the ongoing needs of a connected society. Full service solutions deepen customer relationships and create new value for industry. Connectivity provides real-time data, understanding evolving customer needs, and enabling service innovation. These four trends provide opportunities to grow, to innovate, and to transform into a more sustainable society, now and for future generations. Time to welcome the Senior Vice President of Strategy and Innovation, Erik Winberg. Welcome. Thank you. We'll give him a hand as well. Thank you. Now, Erik, you don't have 20 or 40 years in the company. You have- Not quite. a month, two? Six weeks, I think it is. Six weeks in the company. What would your reflection be on Husqvarna's history? Well, the transformations that this company has gone through over a hundred years I think is absolutely amazing, both, you know, the scale and the scope. Not least one that's led up to where we are right now. The stage is yours, Erik. Thank you, Mia. Good morning, everyone. I'll talk a little bit more about some of the external trends that underpin our strategy before we go into what we do about them, first of all. As you saw from the movie, there were probably four big themes there. Sustainability, first of all, which is of course the overarching external trend we're focusing on. It's a matter of fundamentally a planet out of balance and the actions taken to mitigate that, and also the opportunities that creates for us. It's also about electrification as a consequence of that. One of the largest transitions and investment needs we've seen. What that also means in terms of what we deliver as an industry in terms of not just sustainability, but also frankly product performance and convenience. Connectivity is something we'll look at a little bit as well. Connectivity of people, devices, and most particularly what that leads to in terms of services and opportunities. Finally, of course, autonomous. You know, technology's coming out of age, consumer attitudes shifting, and the acceleration in this area that we see ahead. If we start with sustainability, we need to talk about natural systems and the importance of natural systems to get the planet back into balance. When we talk about natural systems in environments with lots of people, urban environments, we talk about green spaces. The simple fact is that there isn't enough of them. Today, around 60% of urban populations in Europe don't have access to enough green space, and this is a health issue. Beyond that health issue, this is also one of the more important areas to address, to deal with and mitigate the climate crisis and also to adapt in areas like drainage and so on. In total, this is an area where we expect there'll be significant investments in the world in the coming years and decades. There's also going to be a lot more engagement with green spaces from customers and society at large. That again sets us up for a lot of engaged customers and a lot of need for innovation. Talking about green spaces and sustainability, we need to talk about water and water as a scarce resource. Already billions of people, around four billion people, have an issue with water scarcity, at least in some part of the year. This is going to increase as a result of climate change. It's gonna increase as a result of stress in urban environments. It's basically going to make water somewhat restricted and more valuable. That puts solutions like smart watering and micro drip solutions into rather different contexts. There'll be a lot more awareness of use and a lot more needs to reduce and optimize use. Finally, talking about sustainability, we of course need to be talking about CO2 reduction requirements. Husqvarna and many other companies have CO2 reduction targets that are in line, science-based targets, in line with a one and a half degree limit of global warming. The world in general is not there. Commitments are far short of what needs to be done to reach that, those targets. In fact, if you sum up the commitments of what the world is ready to do in NDCs by 2030, we basically need to reduce CO2 6x the sum of all global commitments right now. This is an enormous gap. It needs to be closed over time. Perhaps some of that will be closed when the post- COP 26 targets. This will lead to a lot of actions, a lot of new investments, a lot of new regulations, and even more relevance for the targets we have set on ourselves. One of the important areas to reach CO2 reduction requirements is, of course, electrification. One of the biggest transitions our industry has ever seen. Full of constraints and challenges, of course, in terms of resources and technologies, but a lot of determination to get it done. You know, just as an example, we expect 20x increase in the battery volumes produced in Europe by 2030. This is enormous transition, but it's also one that is triggered already now a lot of innovation, as I'm sure you'll see. Not just for sustainability, but also for customer convenience and better performing products as a result of that wave of investment. Electrification is one area. Another area related to convenience as well is connectivity. Connectivity of people has come a long way. Connectivity of devices is right behind that trend. Total number of devices expected to double by 2025, 27 billion. There are already more connected devices than there are people in the world. Now what does that lead to for someone like Husqvarna? Well, it leads to a change in the way we do business. It leads into us getting a lot more direct customer contact as a consequence of that, and it creates a lot of opportunities to develop new services. There's a lot of information and data generated that creates value for watches and things related to your health and your movements. Now, imagine the amount of data we will be able to generate from a garden. It's astounding. The service opportunities that will follow on that. Finally, if we talk about autonomous solutions, this is really a large market opportunity that to some extent is a consequence of some of those technology trends coming together, technology maturity in many areas, and also changes in consumer attitudes towards autonomous products. What you see here is a market overview of the global residential lawnmowing market, 2015 to 2020, and our projection for 2025. What you'll see at the bottom is that ride-on mowers is a very large part of the market. That's especially true in the U.S. That's really where a lot of those volumes come from. And that robotic has increased substantially and it now has a value share of around 10% of the residential market, we believe. That's expected to increase further. We believe it will be something like 17% already 2025, and it will actually be a larger market than petrol walk-behinds. On top of that, of course, you also have the professional market, which is not included in this picture. Those are some of the, you know, fundamental underlying trends that underpin the opportunities we see. If we look at the total market by application as is, as it's relevant to us, that's a total global market of around SEK 265 billion, we believe. Much of it, as you see, is lawn care, outdoor power equipment, gardening, and the construction markets. Within those markets, and there are very high growth sub-segments, that will continue to grow as a consequence of these trends. First of all, of course, robotic mowers. We expect that to be an area that will have continued double-digit growth. Secondly, smart watering. That will continue as well to be a double-digit growth sub-segment. Last but not least, obviously, battery solutions across a number of different markets and segments that will outgrow the market as a whole and drive double-digit growth in that sub-segment. With that... Thank you very much, Erik. Thank you. Welcome to this chair. Erik, you're coming in from the outside, six weeks in the company. Now you've described a couple of trends, obviously very important for Husqvarna's business. Which of those trend would you say is the most important for Husqvarna? I think the overarching one is sustainability. That's really the one that is driving a lot of the other trends as well. It's dramatic, and it's a long-term trend. Mm-hmm. You have ambitious sustainability targets. Yeah. You have the Sustainovate program. Would you say that you are prepared for delivery? I think we have extremely ambitious targets that will be certain to keep us ahead. That, that's for sure, yes. As a whole in society, who's driving the sustainability trend? Is it the customers? Mm. The industry, or maybe the regulators? Well, over the long term, of course, emission targets have been very important for the industry as a whole. Right now, in what you see, I think it's really customer demand that's driving the current fast development, along with innovation from industry, companies like Husqvarna and others who actually are putting, you know, new and much higher performing products to the market that are also far more sustainable. I think in the future, maybe you'll see more on the regulatory side than what we're seeing right now as well. Yeah, 'cause we're not really in your industry seeing very much on the regulatory side. What if they would set like emission targets for mowers and something like that? We- Are you ready for that? We are already seeing that happening in parts of the world, and we expect it to accelerate. Your targets for sustainability, you will reduce absolute CO2 emissions from your value chain with 35%. Mm. By 2025 compared to 2015 baseline. This also mean that you include your customers' CO2 footprints, right? Yes. That's that. Absolutely. Importantly, that includes the impact our products have in use, which also of course makes the target challenging. It's not just our own operations we're talking about, it's really the full impact. On top of that, you will empower five million customers to make sustainable choices. Yeah. By 2025. Yes. How will you do that? Well, I think we're doing that every day, especially with, you know, the better products we're launching and how we're managing to communicate the effects of that. It's not just about customer convenience, it's also about, you know, making more responsible choices. This is an area where communication is, I would say, gradually becoming easier, actually. There's an appetite for tackle that and to take that on. Connectivity, you also mentioned connectivity, which is very important for Husqvarna. How important is it? You said it could- Yeah Could it be a possible disruptor for the business? It's massively important. It's not as disruptive for us obviously as it would be for finance or media. It is disruptive in that it changes the way we have to do business. It changes the nature of our customer contact and consumer contact. It is disruptive in the way we need to approach the market. We might come back to that also with you, Henrik, on connectivity. Now, thank you very much for this, Erik. Henrik, it's soon your turn. Just a little question on this, the sustainability that we're talking about. You talk a lot about sustainable value creation. How would you describe that? What is it? I guess it's a little bit of a play on words. On one hand, we want to convey that we are committed to create shareholder value sustainably over time, and at the same time show our passion for sustainability. How would you describe? There could be a trade-off between reaching the sustainability targets that you have and driving top-line growth. In the short term, we don't really see that conflict since the more sustainable choices are actually the things that are growing much faster. In the short term, I don't really see that conflict. I think in the long term, that could potentially become an issue, maybe because that we are so dependent on how society supports with making sure we get fossil-free electricity. Because that, of course, will have a big impact on our impact, so to speak. Now we're curious, Henric, to hear more about the Group strategy. The floor is yours. Thank you. Hello, everyone. Great to see so many here, taking time out of your busy schedule to spend the morning with us, here at Fotografiska or online. Today, I will mainly speak about how we have built a stronger Husqvarna Group over the years and how we will continue this journey into the future. We are ultimately transforming the group, where we take more of a position of premium and pro, and where we transform our offering to become more sustainable, more smart, more autonomous, and more electrical. Given our recent performance and our strong financial position, we see a great opportunity now to lean a little bit further forward to accelerate our strategy and to increase our ambitions. This discussion we just had here in terms of trends and what the future might look like is actually making this very exciting times. I hope you all see that. In the end of the day, there are a handful or so trends that are affecting all of us, the society, companies, and individuals. What's key then is to embrace change. One interesting reflection is that if you look at history, when more than one big transformational trend occurs at the same time, that has actually resulted in some kind of an inflection point where the world took a different turn, where things actually changed permanently, into something new. We believe that the Husqvarna Group is remarkably good at dealing with that. We touched it a little bit earlier. During 330-some years, one of the things that really stand out is a company that has a remarkable ability to constantly reinvent itself, to transform from something into something new, to always be fit for the future. I think this is deeply ingrained in our culture, as I mentioned before. It's about this curiosity. It is about being courageous to actually go for it sometimes. I mean, take the robotic mowers as a striking recent example. Curious to actually explore it early on, having the courage to actually go for it, and then to be persistent, tenacious with it, taking it 10, 15 years before it actually turned into a business opportunity. I think that says something about our culture. Another strength we have is our technology and innovation leadership capability, and that's also something that is striking when you look at the 330-some years. We have been able to bring innovation to each segment that we ever played in, and in some cases, we even invented a new segment. A third strength that we have is our strong brands. The Husqvarna and the Gardena brand are really strong brands that really are connecting with the customers and that are getting through the noise that is out there. Because as you can imagine, in a digital world and in more of an omni-channel environment, it's super critical to have those brands that can reach through all of that. Today, 90% of our revenue is behind these two brands, which would be compared to 65%, only five years ago. On top of that, we also have long-standing customer relationships and a great market reach. When we, a couple of years ago, set our strategic plan through 2025, we really created that in the intersection between these transformational trends that will affect our future and our core capabilities and our key strengths. That's how the strategy was put together. Starting with our purpose to shaping great experiences, we of course want every usage of our products or our services should be a great experience for the customer. Every interaction with us as an organization should be a great experience. Beyond that, we want the sheer output of what we do to be a great experience. What I mean with that is that ultimately our products are creating environments where we all work, live, and recreate. The strategy itself, as depicted here to the left, you can see that sustainability is right in the middle, and there are many reasons for that. First of all, because we see a lot of business opportunity for us here, and we believe that this is an imperative piece of long-term market leadership. Of course, over and above that, it's also simply the right thing to do, the right thing for the planet and the right thing for next coming generations. Customer experience, critical part to the strategy, very much about how do we create more of intimate one-on-one relationships with our customers? How do we, in a much more omni-channel perspective, make sure that we meet our customers where, how, and when the customer wants to be met? Closely related to customer experience, we have services and solutions where we believe that is also a vehicle to create better or more intimate customer relationships. We need to expand our offering to also include services beyond regular products, because that is how we can create additional customer value, and we can create these intimate relationships with our customers. In the future, we of course expect that to lead to incremental recurring revenue streams. Then, of course, we have the winning core. What really defines us? Those product segments that truly defines the Husqvarna brand, the Gardena brand. It's important that we continue to invest in those and that we develop them in a good way while we're investing heavily into the new segments in terms of robotics and battery. This strategy has not in any way changed. It's the same strategy. What we are saying is that given our performance, given our financial position, now it's the time to lean further forward. Now's the time to accelerate this strategy, to be clear on what is really important, and to dial up our ambitions. I will now for the next few minutes go through these different aspects of the strategy, give a little bit more color to the different areas, and share some of our ambitions here. Clearly state our ambitions. It's not hard targets like financial targets or ESG targets, it's our ambitions. We want to share them so you get a better feel for how we're accelerating the strategy and what that really means. Starting with robotics, our ambition is in five years to double our sales of robotic mowers. This is all in, including parts and accessories, including both residential and professional. That would basically take our business from about SEK 6 billion in revenue today to close to SEK 12 billion. The way we will do this is to make sure that we lead and drive the geographical expansion. There's still so many markets that are not robotic markets, and we need to drive that harder and faster. The other thing is that we have established markets, but there's still a lot of room to grow, and we need to make sure that we increase the market penetration in those markets. This is very much about upping our investments into the market in terms of marketing or in terms of feet on the ground. The other key component here, of course, is to transform the professional lawn care segment with a lot of new opportunities. We'll touch that a little bit later on here. Of course, key for us in all of this is to make sure that we have this technology leadership position that really is accelerating this transformation for us. Starting with residential, this is the current penetration levels, the way we estimate it. You can see quite a few of these blue markets, meaning that they're truly established. As you can see, quite different penetration, so there's still room to grow in these markets. We also show the focus markets, which is basically three markets with a lot of potential where we will put the additional resources. You have North America, the U.K., and Australia. Those are the three markets that we will focus on from a building new markets perspective. In established markets, it's very much about fighting for market share. It's about telling everyone why our products are better than anyone else. Whereas in the new markets, it's very much about establishing a new concept. There's a clear sentiment here of or aspect of seeing is believing. That sets very different requirements on marketing and also more feet on the ground to make sure that we can drive such a conversion faster than what we have done historically. Going into the professional space, autonomous has a very strong value proposition for the professional market. If we look at all the different markets a robotic mower could work on, so to speak, or address, the total cost for cutting grass on those is about SEK 100 billion today. About 65% of that cost is labor related. As we go autonomous, there is a clear cost saving for the customer. Actually that total cost, SEK 100 billion, becomes smaller, but the equipment piece is actually coming up. Important when we talk about autonomous is that there are different kinds. Generally speaking, any autonomous solution will realize some cost savings, and you can do 24/7 operation. When you have conventional big diesel machines that you convert into autonomous operation, you get some of the cost savings, but you don't get all of them. What we bring to the table here is purpose-built robotics. What we are saying is if you're gonna go autonomous, let's not stay in the old world. Let's go to the future directly, skip a few steps, and develop the products that are the most optimum for autonomous operation. We do that with our robotic mowers, meaning that additional cost savings, no direct emissions, which is super critical for many of our customers and their commitments to a better world. Low noise, very important in certain applications for certain customers. It's a safe operation with smaller machines than big machines. Also the grass quality is, it becomes much better. There's a strong value proposition here. Of course, one of our big bets here right now is the CEORA platform that we will start sell in 2022. Some of the success factors for what for how we will address this segment and how we will try to build this market as quickly as we can, is to make sure that we complement our current go-to market with more of a dedicated B2B organization. Meaning more feet on the ground to create a pull to our customers and to really have our own people trying to help making this conversion in the marketplace. Then, of course, we need to make sure that we are really in the forefront when it comes to technology. I talked about these purpose-built machines. We need to tailor them to the application. The CEORA, you can see there's a front and a back, so to speak. It's a modular system, where the front can be adapted for different kinds of grass types or certain kinds of applications. Then, of course, you also need an operating system. How do you manage a fleet of CEORAs on a golf course to make sure that it's doing the job in a good way? Here we need to also have the absolutely best operating system. Shifting to electrification, our ambition here is that 2/3 of our motorized sales will be electrified in five years. In 2015, that share was 11%. Today, it is 38%, and the ambition is to take it then to roughly that 67%. As Erik said here before, there are many reasons for why this is increasing. I mean, one part of it is our own commitment to sustainability. We want to do this. We want to drive this. That's one part of it. The other one is, of course, the customer pull. Then we have regulations. Not so much today, even though there are some, but it will come more and more. There are some clear customer benefits here. Of course, there's no direct emissions, which is one big thing from the sustainability perspective, but you also have the lower noise. It's easier to use and you have lower operating costs over the total life cycle. As you can see, we are really driving this trend. 67% of motorized sales, that would mean that we have 20% of our revenue in petrol by 2025. The only thing that is gating this a bit, why we can't go faster, is battery cell technology. Because if the cells are not sufficiently good, then handheld products simply becomes too big, too heavy, or get too short runtime. Of course, we have some challenges when it comes to in-field charging, like in the woods somewhere, for instance. How would you charge a battery? We are balancing these things with a very strong ambition to make sure that we always have the best option when it comes to electrical products whenever it is technically feasible. We have a two-prong approach to battery. At the entry level, we of course realize that our customers are very price sensitive, but also that the customer appreciates or would benefit from having the same battery and charger that they can use for many different verticals, for many different applications around their home. Therefore, we have together with Bosch founded an alliance, because that way we can leverage on Bosch's scale, volume to make sure we are cost-effective in this segment. Of course, we're now together with Bosch then in this alliance, inviting other participants to really provide an ecosystem for the consumers. On the other side, in the premium and in the pro segments, we have an entirely different approach. Here, the product performance is so critical and the customer is less price sensitive. We really do everything in-house to make sure we really can tailor to the application, to the customer, to the individual product. Important when we talk about battery is that we actually talk about battery-powered products. Very few customers actually buy a battery and a charger. They buy a trimmer, they buy a chainsaw, they buy a blower, they buy a power cutter. This is what we bring to the table. We know the customer, we know the application, we know the product. That is what we bring to the table here. We will be the best one independent of the power source. The winning core. Here we have not as concrete ambitions. I skip that one and I go straight into the details. Of course, we have an ambition to continue to grow our core business. I think this one is important for a couple of different reasons. It actually shows a bit what I've been talking about many times before about building a stronger Husqvarna Group over time. We are today a very different company than we were five years ago, or in this case, eight years ago. Not just because revenue is much higher, but if you look at the composition, how that revenue is built up is radically different. Look how robotic and battery is a big share. Parts and services, solutions have increased. The winning core is much bigger. The company is today very different, with different prospect for growth and profitability. We of course want to continue to invest in this winning core. There are three very specific areas that we would like to invest more in than anything else. For the Husqvarna Division, it's about building out the pro side of the business. For Gardena, it's very much about geographical expansion of watering and hand tools. It's about continue to expand into adjacent segments for the Construction Division. If we do this, of course, because these are the segments that defines us as a group, it makes us stronger and we can continue to invest even more into the future segments. Talking about customer experience and services and solutions. I will actually do that together, because here the divisions we'll spend a little bit more time later on. If you start with the customer experience perspective, it's just to frame it a little bit that in the end of the day, what we are after is to create this intimate one-on-one relationships with our customers. It is to make sure that we meet with our customers on their terms, where, how, when the customer prefers. We want to provide additional customer value beyond what our products can do. That's a little bit to frame the customer experience. Here we have picked one area. Well, I have picked one area to highlight, and it's connected devices. The ambition is to double in the next five years. The reason why I picked this one is that to create a great customer experience and to really be able to develop services that are valuable, that you can actually turn into revenue, there needs to be substance there somewhere. Nobody knows the products better than we do. If we can get all our products to be able to tell important things about themselves and what's around them, then only our imagination can limit what real customer value we can build or how we can turn our data into valuable information to the customer, which also helps to create this intimate relationship. That's why I decided here to highlight the connectivity. In connectivity. In terms of connectivity, we have had a pretty nice development here, about 1.4 million connected devices in the last 12 months. With the acquisition of Orbit yesterday, by the way, we immediately doubled that to 2.8 million, and our ambition here is to double it yet again in the next five years. As I said here in the beginning, key here is, of course, to make sure that our products are connected and that they can tell meaningful things about themselves. That's the one key activity here, of course. The other piece is, of course, that we need to invest in how do we manage data and how do we gear up our capabilities when it comes to AI to really make sense out of this and create value out of this data. In parallel, the divisions, of course, are working on new data-driven services that we will launch in the years to come. Sustainovate at the very center of our strategy, and I hope you can see this throughout this presentation that all parts of our strategy is actually tying into sustainability. It's all tying into transforming Husqvarna Group into a company that's truly fit for the future. In terms of Sustainovate, we don't have any ambitions per se. Here we actually have hard targets. We have three hard targets, and we are not changing those. Those are three very ambitious targets in terms of carbon to reduce our absolute emissions by 35%, including product use while we actually are still growing the business. That is a huge commitment, and we're currently trading at 27%. The other goal here in terms of circularity, here we have again married our innovation capability with our passion for circularity. Here we have committed to launch 50 innovations, 50 circular innovations in the market by 2025. Then, as we said here in the beginning, we also, it's not enough that we develop the right things and we do a lot of the right things. We also want to take a bigger role in terms of empowering our customers and our employees to make more sustainable choices. There we have the target of five million. That kind of concluded the strategy. Just one final comment or something that links into that, and that is M&A. We do believe that M&A is a good way to support or accelerate some of our organic initiatives. Really, it's not M&A for the sake of M&A. It is. We have our strategy, but sometimes a quicker way to get there is through M&A. Historically, we have done this quite a lot in the Construction Division, and we're now taking that way of thinking, that way of working, and applying that to the other two divisions. Now we have emerging M&A plans in the other two divisions. We will make sure that we actually use this tool in our toolbox given the financial position that we have. During this year, the Construction Division made a big acquisition in Blastrac to really become the market leader in all aspects of surface preparation. As I said yesterday, we closed the transaction with Orbit, where Gardena is taking a giant leap in terms of geographic expansion into North America. Of course, the main priority is to continue to grow Orbit in a great way, but it also gives us an opportunity to position Gardena in the right way in North America, which we wouldn't have been able to without that. To summarize or to wrap this up a little bit, we have built a stronger Husqvarna Group for quite some years, and we have done this in phases or in steps. Early on in 2013, it was really profitability first. Some of you remember exactly the situation we were in back then. As an example, we took out 10% of our product cost over a period of 3 years, and many times at the expense of some growth. That was the strategy at that time, and it was the right strategy to take us up to that first level. In 2016, we found a second gear, which was, let's now dial up the growth dimension here, really invest in those areas where we have the best future opportunity. I mean, robotics, watering, I mean, a lot of these different areas where we really stepped up our investments. We actually dialed back in some other areas, and we even stepped out of some. I mean, we talked about the SEK 4.5 billion of exits, but we also stepped out of quite a few brands. I mean, today, 90% of revenue is in Husqvarna and Gardena. It was 65% back in 2016 when we started this phase. Now we see an opportunity, given our performance, given our financial position, that we can find a third gear. It's time to enter the next phase. We simply have to lean further forward, accelerate the strategy that is working and is delivering results. We need to dial up our ambitions. I've tried to share a little bit more detail and give a little bit more color on how we are dialing up these ambitions here. Of course, that also comes with some increased financial targets. Here we are stepping up all three of them. Glen will go through much more in detail how all that will flow through. I think the important thing here to highlight though is that we, from a profitability perspective, need to remember that to really lean forward, we need to also increase our investments. Investments in go-to-market, feet on the ground, and marketing, and in R&D. And we need to invest further into our IT capabilities to make sure that we have world-class capabilities to really take a leadership in that digital arena. When we set our EBIT ambition, it is a balancing act between short and mid-term, and I think that's important that we carry with us. All in all, we are operating on attractive markets. We are well-positioned in all the really attractive segments, the high-growth segments. We are executing on a very clear strategy, and we do that in a very consistent way. Given how we have built this company forward, it just makes sense to lean further forward and to dial up our ambitions going forward. We are committed to create sustainable value creation here, also in the future. Thank you very much. Thank you. Henric. Please welcome back. Yes. That's good. Thank you very much, Henric, for giving us a bit of a flavor on the strategy and how you're going to execute it. Obviously, we are all here very interested in the financial targets. It's soon your turn, Glen. We'll give you a go on that before we pose questions. Just a couple of other questions for you then, Henric. You were talking here about double the robotic mower sales from SEK 6 billion- SEK 12 billion. You're talking about a SEK 100 billion market opportunity. How much of that is for Husqvarna? I mean, the professional segment, that's a bit complicated since the $100 billion is the total cost of mowing grass. The equipment portion is smaller. On the other hand, that one is increasing as we convert that market. It's actually very difficult today to give a good number because we simply do not know yet what the conversion rate will be with the professional customers. We have extremely good feedback. They're very excited about this. They see the logic. It's a bit too soon to say what it truly will be in the end. When can you come back with a little bit more exact answer on this? I think we will know much better in a year or two. In a year. when we have started this. Okay. You're really successful in keeping up the market cap for the residential mowers. What would you say are the key success factors for driving robotic growth? I think there are a couple. I mean, one is our go-to-market investments. We need to step up. We will step up when it comes to marketing, and we will step up when it comes to feet on the ground to really drive the conversion in this very important segment. That's one piece. The other one is about technology leadership. We always need to be in the forefront when it comes to having the best offering when it comes to robotic mowers. I think, Glen, we might come back to you, as acting president of the Husqvarna Division also, how you penetrate the professional market a bit later on. Henric, residential mowers, over 50% market share, you have good margins, but we can see new competitors moving in. Segway, for instance. How do you take on this increased competition? I mean, first of all, it's a compliment. I mean, that more and more players are getting into the segment that we have created. I guess that's a compliment in one regard. Generally speaking, I always look at it as favorable with good competitors entering. It keeps us on our toes, and we just need to work a little bit harder. That's a very corporate answer, I'd say. You also mentioned M&A here. Selective M&A, you said. How much growth should we expect from M&As? We are not in a position to give a number on that. What we are saying is that in the past, we have had one division active in M&A, and now we will have three. I mean, we are planning on increasing that activity. I think that's what we are saying. Yeah. It's a good indication of a big increase. Maybe we can dive into that a little bit more later on. Electrification, you will increase the rate of electrification of the motorized sales by up till 67% 2/3. Mm-hmm By 2026 or 2027, five years. Now, this transformation, it's a huge thing for you because you have also a legacy. Mm-hmm. It's nice for you to talk about the new things, the battery things, but you have a big legacy. How do you see that legacy? What kind of risks? I mean, where we are most vertically integrated is when it comes to handheld products. We actually announced quite some one-time costs already a year ago, and a big part of that was to deal with that legacy when it comes to petrol engine component manufacturing, where, for parts that are non-critical to performance and quality, we are outsourcing that. For what is critical to quality and performance, we are consolidating that into much fewer factories, so we can become much more lean in this area. We're taking proactive steps here. You are still a quite small player in battery. Exactly how strong is your position? Could you- It depends a bit on what segments you look at. Generally speaking, we are overexposed in the true premium and the pro segments and there our position is strong. Whereas in the lower specifications, we have less of a position. Working on that, I guess. Just something on connectivity as well. We were talking about connectivity with Erik as well as a kind of a disruptor, and you talk about connectivity as something that helps you get closer to your customer. You were talking about an intimate relationship with the customer. Could you just, you know, elaborate a little bit more concretely on that? What products are you connecting? How does it help you get closer to customers and collect the data? I mean, generally speaking, we want all products that can be connected to be connected, so it's really everything. That one is easy to answer. The other one is a little bit more difficult. What you can say is that we know the product better than anyone else, and the product can tell a lot about itself. You can either just share information with the customer that there's no reason to mow today because it has rained or whatever that can be, or you just share meaningful information. Too, that you can create in the pro space, for instance, service contracts where we can actually see and predict when the machine needs service so we can be proactive, making sure that the customer will never be down. I think by both being able to share meaningful information on one hand, you can create a relationship, but also by developing services that actually are becoming much better, and becoming more preventive, through the data that we get from the products, is a good way forward. Okay, we'll come back to you with lots more questions, and these guys, I'm sure they have a lot of questions. Now, Glen, it's your turn. You, you're gonna deliver on Henric's promises. It's gonna cost you, I guess. It is indeed. It is indeed. Let's hear. The floor is yours. Thank you. Good morning all. Welcome here to Fotografiska in person and for those listening online. Great to be in person again. I feel a different energy already. I have the pleasure of taking you through our financial ambitions for the coming period, our financial targets. Henrik talked ambitions. I'm gonna talk targets now, hard targets. It's always good to at least reflect on where we've come from. The previous targets up until yesterday evening, of course, have stood as well. We had a market growth or a growth ambition that we talked about market plus two, and that was based on we expected the markets where we operate were growing some 2-3 percentage points per year, therefore indicating a 4%-5% growth. In the last 12 months, we've grown by 14%, so we've ticked that box. I think it's fair to say that the market has been growing more in recent months, particularly given the COVID pandemic. We think the market is about 10%. We are growing by the market plus 4% in the recent 12 months. The operating margin target of above 10%, we talked about 10% being our floor to operate above that. I think now we've proved for two years we can do that. But of course it was a tough task to get there, but now we're operating above on some 12.6 percentage points on a rolling 12-month basis. Last but not least, of course, the capital efficiency. We're a seasonal business, so we do move up and down a lot from start. In the past 18 months, we've really accelerated now on the capital efficiency improvements, and that of course is how we look at working capital in relation to net sales. Down to some 21%. The three financial targets we had, we've managed to succeed with. Now, what is our reality that we live in right now? I guess it's a different world to where we were some 18 months ago before this COVID world become so popular with us in our daily lives. We've really strengthened our market positions during this time. It's fair to say we've strengthened all of our core areas. Staying at home, us, you, it's changed the way we behave. We couldn't travel as often, therefore, we were spending more time at home and investing in the home and in the garden. That had a positive effect. Positive effect in the short term, increased demand, but it also increased the interest in our segments. People fell in love with their gardens. People fell in love with their outdoor space, and we feel that has a longer-term benefit to us. When the COVID crisis hit and some of our channel partners had to close, we had to look at ourselves. How do we get to our end customers? If the channel partners are closed, can we accelerate in e-commerce? We've had to do that. We were forced to do this, and I'm pleased to say we have some 19 markets where we have our own.com e-commerce ability. 14 in the Husqvarna Division and 5 in Gardena. Pre-pandemic, by the way, that was five. Five to 19 in this past 12- to 16-month time frame. I shouldn't pass by without talking about we are living in a more volatile world. I don't recall, at least in my 20 years in this group, that we've seen so much volatility with the global supply chain, be it raw materials or be it through logistics. That is the world we're living in, and that's what we need to adapt to, but that's the reality. Henrik talked us through the different segments we've been in, the different phases, from 2013, the profitability journey, to then going into the growth journey. I think when we look at the sales development that we've had in this group from 2015, the more recent period, let's call it, we've actually grown with a CAGR of 4%. More or less in line with our financial targets. At the same time, we've exited SEK 4.5 billion of non-core business. Over 10% of our business we decided to walk away from. Personally, I feel that was the decision. That was our most key decision. If I exclude those exits, it's more like 6.5% CAGR. On the right-hand side, the income, operating income, that's been developing nicely. We talked about in the opening movie earlier today, going from 5.3%-12.6%. This chart shows the 2015-2021 period. The orange line shows that little blip. We had a little blip in 2018. I've mentioned this before. It's quite simple. We did not sufficiently offset headwinds of raw materials and logistics, i.e., the pressures we see today. Since that time, we have accelerated on price and made sure that we can offset those headwinds. We've managed to grow actually the operating income in the same period by some 12% CAGR. A strong execution on the profitability improvement. That leads us to actually raising the bar, raising our financial targets. Last night, we tried to give you a little bit of pre-warning. We issued them a little bit earlier. Eight o'clock last night, we issued our new financial targets. The same metrics, sales growth, EBIT margin, and operating capital efficiency. Let me take you through each of them. We believe, and we add a word here, organic sales. Henrik's talked a lot about the M&A aspect to complement what we're doing. From an organic perspective, we feel we can grow with 5 percentage points. We do believe post-pandemic, the world normalizes, and we go back to some 2%-3% market growth. We continue with above market growth. That's our clear target. The operating margin, we move up from above 10%-13%, and I'll take you through that in some more detail in a couple of slides' time. As we've taken such a big step when it comes to our working capital efficiency, and that's basically our inventory, receivables and payables, how we manage them, we feel we can go from that 21% level actually to accelerate further to operate below the 20% level. When it comes to our sales targets, net sales growth of 5% organically, what gives us the belief in this target? What's really driving this ambition? I think the charts say it all ultimately. We have a strong belief in robotics and battery. We said we can double our robotics business. We feel there's a strong electrification that we're gonna go from 38% electrified products to two-thirds. That orange bar will grow. We're very confident that is gonna be the natural development. Being a market leader in robotics, we wanna continue our market leadership position. The service and solution opportunity is also significant. The divisions will take you through some great examples later in the day, but we really feel that customer experience, getting closer to our end customers, the service and solution opportunity is significant. The turquoise bar there will also be growing, again, giving us a strong confidence behind the 5% growth. Then the winning core, the real core of the divisions. Of course, we can grow that with at least the market, so at least in line with the market development. We'll continue to deprioritize our non-core business. That's the natural progression I would hope you agree with. The EBIT margin expansion. As said, we've had a nice steady line upwards with the exception of 2018. In this time, we've exited, particularly from 2018, SEK 4.5 billion, with SEK 1 billion of exits coming through in 2018, just short of SEK 1.5 billion in 2019, and just over SEK 2 billion in 2020. Those exits actually had a positive effect on the margin of about 70 basis points. We exited business, yet had an improvement in the operating margin. That's why I keep coming back to that point that I think it was absolutely one of our key decisions we took in recent years. We believe we can continue this growth journey on the operating margin upwards. It comes with some headwinds, and I'm gonna allude to those headwinds in a couple of slides' time. Three years ago, or two years ago, when we last met in this constellation in a Capital Markets Day setting, we didn't have all three divisions operating quite to the levels we want. What I'm really pleased about, and the three divisional presidents will give you far more flavor of this later in the day, is we have three high-performing divisions. Three divisions operating way above the 10% operating margin. Three divisions in growth mode. That's important. From a last 12 months perspective, the Husqvarna Division has grown with 16% sales. The Gardena Division grown with 12, and Construction with 11. Strong sales growth, double-digit sales growth for all three divisions in the last 12 months. Husqvarna Division has an operating margin now of over 13%. In 2018, it was 7.6, just to put it in context. Strong turnaround in that division. The Gardena Division, it's a natural weather hedge against the Husqvarna business. That was one of the main rationale drivers behind that acquisition, some 15 years ago, 14, 15 years ago. That itself actually is delivering Gardena a continued growth journey, but an EBIT margin of 15%. Construction, less weather dependent than the other two divisions, therefore also a natural hedge to our weather-dependent divisions. Much more cyclical, much more macro affected, but also now coming back post-pandemic, showing a 12.1% EBIT margin. Three strong divisions. When it comes to the EBIT margin and this 13% we talk about, what confidence do we have? Of course, we have confidence, but first we should start with what's the baseline. We have a 12.6% operating margin today, and therefore maybe initially just to get to 13 sounds pretty easy. In the baseline, I come back to the COVID pandemic. We feel we have some 80-100 basis points of tailwind so far because of the COVID pandemic. Increased demand when we stayed at home, and also we took some pretty aggressive cost avoidance activities. 80-100 basis points is sitting maybe artificially inflating us right now. Let's take that one with us. pleased to say that we did conclude the Orbit acquisition yesterday. It is now a firm part of the Husqvarna Group and the Gardena Division. We mentioned when we met some four to six weeks ago when we announced this deal, it will be EBIT margin dilutive. It's about 25-30 basis points of EBIT dilution at the moment. Within three years, that will come up to the group average. In the baseline, we now need to take in 25-30 basis points of EBIT margin dilution. A little bit on the bridge, bringing it down there to maybe 12.6% on a rolling basis to more like 11%, 11.3%, something. We need to start growing back up to the ambition, and this is where we have strong growth. As Henric showed, we have a much better composition of the product on our mix right now, so a stronger mix. I hope we've proved that we, as a Husqvarna Group, can be a market leader when it comes to price. Price is gonna be a key driver for this group going forward. First and foremost, to show market leadership. If we're gonna be a market leader, we need to drive price as well. We have two amazing brands that we can continue to drive, but we need to offset the headwinds. The short-term headwinds we have from raw materials and logistics are significant. All industries are facing this, and we are no different. We need to offset the headwinds of raw mats and logistics, and we commit to having a positive price effect that will offset and more than offset those two headwinds. We also would like to, of course, take the forward-leaning step that Henrik talked about. How do we create the group for the future? How do we continue to generate those positive growth opportunities? That's the transformational investments we call them. That's gonna be in go to market. How do we actually spend more on our brands? How do we put more feet on the ground? How do we spend even more in R&D and products? That's the transformational aspects we talk about. We're gonna continue investing in the future. Let's not see this as a bad cost. It's a good cost, and we're committed to doing this. At the same time, and Henrik said this, and also Erik said it, digitization is it's a trend, and we need to move with that trend, and therefore we've got to enhance our IT systems. They're gonna have some pretty sizable investments, and when we take decisions, we'll come back and talk about them. It's gonna be some pretty sizable investments in the future around our IT landscape, and this is the right thing to do. This will allow us to get closer to our customers. When I talk about good costs and good spending, this is what I mean. We've had a run rate on R&D to net sales of about 4%, or SEK 1.6 billion in absolute terms. We wanna start increasing that over time now up to more like five percentage points. That's that transformational aspect. We wanna increase this, and this is an investment in the future. I see this as a good cost add. We also want to continue with the capital expenditure. COVID actually, we put the brakes on in quite a lot of areas, particularly on the capital expenditure. We didn't quite know where things were gonna be in 12 months' time, so let's, you know, take a rain check and see how things are. We slowed down some of our CapEx. Now we're gonna increase it again. We're gonna go from 4.5%-5% up to 5.5%-6% over time. Again, we see this as a positive investment in our future. A little bit of guidance there going into the coming periods. But see it as a ramping up. Don't see this as a straight 2022 impact, going forward. Very quickly on Orbit, and Pär will talk about this when we talk Gardena in a couple of hours' time. Pleased that we transacted this yesterday, finalized the deal. It's roughly $320 million of sales. That's 6 percentage points increase. I talked organic growth before, so I'm not diluting that or changing that. It will have a dilutive effect on the margin short term, 25-30 basis points. That deal was done through existing cash and credit facilities. Pleased, and it's a really great acquisition to bring into this group. Hopefully, we have proven ourselves at least in recent years, that this is a really solid cash-generating group. It's not only actually the absolute cash that we ramp up to there. What I'm pleased about is we don't really, particularly in the past two years, we've never really gone cash negative. Being a seasonal business, we often had that minus position in the first half year before we started coming up during the latter part of Q2. Actually, in the last two years, we've managed to be more or less cash positive for the whole year. That's important. That is a strong health check of this group. Last year, at the same time, we had over SEK 6 billion of positive cash. This year, a little bit lower at SEK 4.8 billion. A little bit of acquisition effect in there from Blastrac, SEK 250 million-SEK 300 million. Last year, of course, as we put the brakes on and stopped a lot of production, as sales increased, we had a lot of cash release by way of working capital release. I feel the SEK 4.85 billion is a good guidance of our cash flow going forward. A strong financial position, and it doesn't happen overnight, it takes time. We often say these curves, particularly the left-hand one, is like an oil tanker in the ocean. You can't turn it so quickly. That's the case with working capital. It doesn't happen in a quarter or a month. It happens over time, and it's gonna be consistent execution of our working capital management. The main area that we need to continue to improve is gonna be inventory. That's the biggest constituent that sits in there. We could always do things with payables and receivables, natural housekeeping, but the main aspect for us is to continue to have a solid inventory management, continued demand planning, continued S&OP improvements, and that's what gives us the optimism around our 20% going forward. Of course, a 5% sales growth also gives a strong support to that metric. On the right-hand side there of the chart, we talk about net sales to EBITDA. In Q3, we had a 0.6. Folding in the Orbit acquisition, that pro forma becomes more like 1.1. Still giving us significant headroom to that 2.5 metric that we've previously talked about. A strong headroom for M&A opportunities. For those who have done the calculation, even post-Orbit, we still have, I would say, M&A firepower of some SEK 12 billion-SEK 13 billion post-Orbit. My final chart, and a question we often get when we meet virtually or in person in the past, is, what are you gonna do with the money? You're a strong cash-generating group, so what are you gonna do with that? I think it falls into these four distinct boxes. We wanna continue to invest. The R&D investments, the go-to-market investments. Invest behind our growth. That's first and foremost what we want to do. Secondly, of course, we wanna make sure that we continue to maintain a strong balance sheet. We need to have liquidity headroom. We're gonna have different cycles over time, and therefore we need to make sure we have the liquidity headroom to tackle any future blips in the road or bumps in the road. Our plan is to clearly maintain our BBB rating. Dividend policy has been to distribute over 40% of income by way of dividend. If we continue growing the group and growing the company, that will continue being a growing dividend for our shareholders. Last but not least, the M&A opportunity. As Henric mentioned, this is there to complement our organic strategic growth journey. We're in a good position now in all three divisions to make some M&A moves, and when the right targets come along, we will be seriously interested, of course. As said, we have some SEK 12.5 billion-SEK 13 billion of firepower when it comes to M&A. At that Thank you very much, Glen. Thank you. Thank you, Glen, for giving us a deep dive into the financials. Now, before I let you ask your questions, I have a couple questions for both of you actually, or maybe all three of you. Now, let's dive into these financial targets. Glen, you've eventually met your old financial targets last year. It was a pretty long marathon run for the 10% there, but you got there finally, and now you raised the bar again. How long do we have to wait this time? It's a very good question, and I have to come back to what's in the baseline. I have to come back to that COVID aspect. Little bit of dilution through M&A that will improve back to the group norm in three years, also that we wanna continue with the investment and the transformation journey. I'm not really answering your question then, Mia, but it's gonna take time to get there, to the new one, because we wanna continue with that investment. I'm not gonna commit to a date, but of course it's something which we will strive towards. Mm-hmm. If I just, you know, search for a little bit of a more specific answer, you have a five-year perspective on what you're talking about here today. Could that be, you know, giving something more? We're talking five years in most of our outlooks there. I leave it to our investors and analysts to decide when they feel we could get there. We have a strong drive to get there. That's why we put this target there, and we have a strong drive to get there. Henric and Glen, now new financial targets, 5% sales growth. You have 13% EBIT margin now. You're already though, you said, Glen, on 12.6% running on a yearly basis. I'm not a financial analyst, but I've read what they say, these guys, and it's good financial, new financial targets. We want that, all of us. But it's kind of on the modest side. If you're already on 12.6% and now you say 13%, Henric, isn't it a bit too modest? We don't believe so. The reason is that the jump-off point is, in reality, lower. That's one piece. The other thing is the trade-off between short and midterm. Of course, we could get to 13 sooner if we didn't take the investments into robotics and the investments into some of these new areas. We think it's more important for long-term shareholder value that we actually act with speed and that we are decisive with our investments, because this is a dynamic market. There are other players entering, et cetera, and it's important that we actually act with speed here. That's why we want to spend more money, simply put, in the short term. That pushes the EBIT target out a little bit. It's a long-term thinking. How much, Glen, success in robotics do you need in order to meet these financial targets? That is a key driver upside to our sales development and margin development. Just if we continue with the trend we have and the commitment to doubling our robotics business, that in itself will give us a couple of percentage points of growth. It's extremely important. Extremely important. Now, you're talking about investments as well. Huge investments in front of you, IT, R&D, go-to-market. You said pretty sizable investments. Could you quantify a little bit more? We will quantify as and when we take decisions, but if I start off with some of the decisions we've taken to date, you know that from a transformational strategic investment perspective, we previously talked about SEK 400 million-SEK 500 million per annum. In Q4 last year when we actually increased some of the ambitions, we said we'd add another 250. We're into some sort of SEK 650 million-SEK 750 million of annual transformational investments. I think that's a good guidance to have going forward. For M&As you said some SEK 12 billion-SEK 13 billion. Of firepower. Firepower. That means if something becomes available. Yeah We would have that accessible without too much problem. You were talking about risks in the supply chain. You were talking here about higher raw material costs and increased transportation costs, semiconductor shortages. Now, you've been talking a lot about that lately. You've been mitigating that fairly well, but how much negative effect can we anticipate from that going forward? What do you say, Henric? I mean, throughout the entire pandemic, there have been numerous disruptions. I mean, just changing nature in nature a little bit over the time. I must say, I'm extremely proud of how we as an organization has dealt with it. We have mostly had a lot of small disruptions rather than any big ones. I don't see that the risk level is any different, and we will carry a big risk with us all the way in through 2022. Touch wood, so far so good, but it's very unpredictable. You said in a TV show I was watching at Dagens industri, you were talking about compensating for raw materials and additional logistics cost with price increases. Yes. All the way. That's a commitment we have made, that we will compensate both the raw material and the logistic costs with price increases here in 2022. Okay. Now it's time for you to ask questions. For those of you in the room just soon, I'll just talk to you online first. I think you've already seen the question field that you have in the bottom of your video. You just type in your question there, and that'll end up here in my iPad. Please do type your questions. For those of you in the room, I'll get help from Johan. Welcome back. Thank you. Excellent. If you have any question, let's start here in the room. Just a reminder, wait for the microphone, and please say your name and company before you ask your question. We also recommend you to limit yourself to one question per participant. I think we had a first hand up there, Johan. Hi, this is Johan Eliason at Kepler Cheuvreux. I understand that robotics is really important for your growth and margin target, and I think the professional opportunity in my eyes is especially important for you going forward. In your presentation here, you mentioned sort of robotics is important, and then you have aftermarket and services. If you look at the professional business, isn't services a big driver of profitability in that segment? I was just wondering how you see the professional business developing. I mean, we see successful equipment companies generating up to a third from their revenues from aftermarket and services. Do you think that will be the situation for you as well in the professional robotics business, and will the service and aftermarket drive margins to the 13% and above target? I mean, aftermarket is very important and is, generally speaking, more profitable also in our business, of course. I'm not sure if we are seeing the potential getting all the way up to 30%, as you're saying, in the short term. It is a very important part of the pro business, and we also see that when it comes to pro robotics. Potentially there, we might also consider different business models. If we sell robotics more as a service, for instance, then we also make sure that we get 100% of parts, et cetera, service, captive, which is also a good opportunity, of course. It's important, but I'm a little bit skeptical to 30% in the near term. Okay. Great. I think we had a question here in the front. Karin, I think you were up with your hand before. No. Okay. You were reading my mind. Karin in Handelsbanken. If I look at the penetration numbers for robotics, it seems that Germany has played quite a significant role in that doubling from SEK 3 billion to SEK 6 billion that you have seen in the last five years. Looking ahead for the next doubling from SEK 6 billion to SEK 12 billion, where do you see that? I mean, more specifically, of that SEK 12 billion in five years, how much of that needs to come from the U.S., and how much of that needs to come from professional in ballpark numbers to, for you to get to that level? I mean, if I start conceptually, then you can maybe share more, put more color to it, Glen. The good thing is that we don't place all the eggs in the same basket here. Yes, U.S. is important, but also the U.K., and also in the bigger scheme of things, also to an extent, Australia, when it comes to the new markets. We also have quite some way to go in some of the established markets to really get the penetration level up. Then on top of that, we have a professional opportunity. I think what's good here is that we don't place all the eggs in the same basket. To concretely answer the question on the U.S., I would say that that's a minority of what we need to see to reach the target. It's not the majority. I don't know, Glen, if you want to add more color to it. What I would add, Karin, would be markets like Germany, where we see a penetration increase from 25% to maybe 40%-45%. Of course, it's still not at the levels of the mature markets like Sweden, Norway, Switzerland. We can still increase the penetration despite that being such an important market for us. We've got high penetration markets that we can increase further, and the extremely high penetration markets where we actually have the repeat purchase opportunity now, people buying the robotic for a second time. Quite different, I would say, go to market strategies depending on the market penetration and maturity. Professional of that SEK 12 billion? I don't think we will quote a figure on professional. I think we've showed the opportunity there. Of course, it's gonna grow with a far higher CAGR growth than we see on the residential business. We won't give an absolute figure, or you'll chase us for years to come. Thank you. Excellent. Do we have any other questions? I think we have one here at the front. Please, Gustav. Just wait for the microphone there. Thank you. Hi, Gustav Hagéus with SEB. Regarding your growth targets then, so doubling robotic sales from 13%, that brings about 2.5 percentage points CAGR growth to the group, suggesting then that the remaining part should grow to add equal to 2.5. Do you think that is a little bit on a conservative side, given all the megatrends that you're pointing out now? On the robotics side, you know, you're currently running a market that is growing around 15%, right? Then you're adding on the professional business now. Are you then assuming that the residential or private side should materially slow down then on robotics to reach that doubling or 50% CAGR? That'd be interesting. Thanks. If I start with the first one, I think it's also important to keep in mind that there's quite some uncertainty in terms of how market demand will play out for the entire industry over the next coming years because we have had this boost during the stay-at-home time. The question is what of demand will now be lower for a period of time? Because some purchases, if you have made them, in 2020, 2021, will you continue to buy in 2022 or 2023? There's some uncertainty in the underlying demand, I would say. That's one element into how we look at this. Depending on how you look at that, the target is either fairly ambitious or it is conservative. I don't know if you want to add to that, Glen, or if you want to take the second. No, I would say, Gustav, of course, we talked previously we mentioned 15% CAGR as we feel the market grows by, and that's our midterm guidance, and that feels okay around about that level. Of course, on the residential side, we have also years where it doesn't always grow with that. We've had high single digit growth in the robotics market in the past five years, in certain years, we can say that. We know we're gonna have little peaks and troughs as well in the growth of the market. We do feel there's a significant market opportunity in residential, but it might be a little bit slower going forward only because of the penetration levels we've achieved. Absolutely, then we can go up towards more like the previous guidance when it comes to when we add the professional opportunity, which will be with a high CAGR. We're convinced with that. Johan, we have an online question here. Excellent ...on the same topic on robotics. This question is: How does the profitability of robotic and battery products compares with other products? Robotics is EBIT margin accretive, no doubt about that, for this group, and we wanna make sure that continues. When it comes to battery, there's actually two answers. It's on the pro end where the application is strong. It is actually a similar margin on the pro battery opportunity. When it comes to the more consumer battery products, and today that is a lower margin. But that also comes with scale. There's a scale disadvantage today, particularly on the R&D side. So as we grow in residential consumer battery products, hopefully we can bring that up to a more normalized level versus its petrol brother. You actually answered the B question, which was how do you expect it to evolve? You already answered that. Okay, Johan. Excellent. Do you have anything further here on the floor? I think we have it there from Christer. Yeah. Hi, Christer Magnergård from DNB Markets. You talked about strategic initiatives. Earlier in the past, you've had roughly SEK 400 million per year, which you have been able to offset by increased cost efficiency and cost savings. The SEK 650 million-SEK 700 million you talk about now, what is the net effect compared to the cost efficiency numbers that you normally have? Twelve months ago, Christer, I would have said it's a net zero game. I think the only thing I throw in now is as part of our efficiency program, which is basically cost out in the factories, cost out within our supply chain with suppliers, and also efficiency through our sales units. Logistics is the big dynamic now that's going the other way. If I exclude logistics, we're probably not too far away when we put in logistics as a new dynamic into the play when it comes to efficiency programs. That's why we've had to bring in the pricing dynamic. I start to sort of think of four buckets now. We have transformational investments, savings, pricing, raw materials, and logistics. We need to look at all four of them in a balance these days. I'm still convinced, looking at all four together, we have a positive net. Great. Many thanks. I think we have one question here in the front, with Björn. I think. Yes, it's coming here. Sorry. There you go. Thank you. Björn Enarson, Danske Bank. Interesting that you're stressing M&As and that you're ready to take on M&As in all the divisions now. In the terms of the Husqvarna Division, what are you actively looking for? Is it geographical expansion or new technologies, or if you can add some color on that? Whether you have a pipeline or if you lack a pipeline or if multiples are aggressive or not, et cetera. If you can shed some light on that, it would be positive. Should we leave that for the divisional president? Thanks. I think it's quite broad, the answer, actually, Björn, at this point in time. Of course, M&A from a Husqvarna Division perspective can take, I guess three dynamics. Can it be a product expansion? Can it be a technology advancement or something to really take us forward? Or can it be a geographic expansion? That geographic expansion could also be distribution channels, as we look, you know, to really penetrate. I think it's gonna be a broad answer I give you there for now, and hopefully leaves the menu pretty broad as well. Mia, did you have any follow-up? Yes. We have an online question here. This is a question that often pops up, and we're going to come back to this when we have the divisional deep dives with the Construction, Karin Falk as well. Henric, let's take this one for you. What are the business synergies between the Construction business and, Gardena, Husqvarna, the group? This person would want to hear a bit more how the strategic importance of the Construction Division during the next five years in the group. If you zoom out, we think that the Construction Division is important in that sense that it's not weather dependent, which is good for the group. Of course, we have a lot of synergies in terms of back-end product development, et cetera, et cetera. I think there's one more fundamental thing, and that is that there are some core capabilities that we truly share, which is dealing with a certain kind of sort of products of a certain size, of a certain nature, that is very similar. That means that there's such a natural fit to what the Forest and Garden Divisions are doing. I think the construction division, at least, Karin can give her view on it later, but if I speak from my own experience working in the construction division, we felt it was a very natural fit. Not just because of the synergies, but because of the core capabilities that we all share. Karin will give her answer later on this, but if I interpret your answer correctly, the Construction Division is not on the selling list. No. No. Okay, Johan. Good to hear. I think we had one here in the front as well. Please state your name and company. Thank you. It's Markus Elsässer from Germany. We run our own family office and are long-term shareholders. I'm very impressed by the dynamics and opportunities, and I have the feel that you're stepping into a good growth mode and have a lot of challenges. I may be speaking against my own interest, but the question is the dividend policy. Is it really realistic or advisable, as you have so much opportunity and so much to tackle in these times, should you not strengthen the balance sheet and keep the money rather than paying out 40% of net income? Why not reduce it for two, three years to 20%, 25%? If I were a sole owner, 100% of this company, why pay out so much if you have so much opportunity? You want to be faster? Is there some Swedish guideline or tradition? I'm not against paying dividends, but looking at this specific case, I would like to pose this question. Thank you. Glenn. I guess that's for me. It's a great question, by the way, and I actually really appreciate you pushing us now on this. We've been fairly consistent over time, or we've been very consistent over time, actually, in paying a dividend of minimum 40%. When we look ahead at our planning, we still see that this plays out okay. There's no issue there. We feel there's a lot in consistency. We've paid out even when the business didn't perform so well. We were paying out over 50% dividend, and we still manage that. As we go forward, I think we should also be willing to adapt, you know, if different needs arise. At least when we look at our modeling, then the 40% dividend policy still stacks up. Thank you. I think we had one question also just behind, Christer. Yes. Christer Magnergård from DNB again. I think, me as a robot owner, I have a boundary solution. The EPOS technology is, of course, a very, very attractive technology for us consumers as well. Now we have Segway on the markets with a solution for consumers. Of course, we don't know how that works, but still. What are your thoughts when it comes to the boundary-free solutions for consumers? I mean, we of course see the immediate benefits of that as well. I mean, that's a main priority of ours to make sure that we also offer that in the consumer segment. Clearly something that we have in our plans and in our roadmaps. How far is it? The only thing I know is that we will not be able to do something big here in 2022. Okay. Any further questions on the floor? We have one there. One there. Johan, let's take that one. Yeah. Hi, it's Johan here again at Kepler Cheuvreux. Coming back to robotics, which is obviously a hot topic these days. Now you talk about you're happy with this 15% market growth, it will be tough comps. You mentioned that some markets penetration you are reaching is 45%, 50%, and you are looking into the renewal market. Really, I mean, if you look at the penetration in the number of gardens in the world with robots, what sort of penetration are we talking about then? Is it 1%, 5%, 10% of all potential gardens that would have this today? It's a very low number. I think in the specific markets where that sort of penetration number is the highest, it would be something like 30%. That's the extreme top of what we see in markets like here in the Nordics. But you know, in the U.S. it's below a single-digit number. I think it's fair to say on average about 10% would be credible to use on average. Yeah. A lot of potential for the penetration. A lot of potential. Absolutely. Great. Do you have anything further online? Yes. We have an online question here. On the system side, what is the current situation with your ERP system? Do you have a leading product like Salesforce or SAP, or do you have a cloud-based system, and what about subscription management systems? You're looking at me? No, I mean, today we have a mix. Yes, we have several different systems, some older, but a lot also some systems that are newer. I think we have a variety. That's the main answer. But we also have a layer that we have put on top of our ERP when it comes to services, to make sure that we can do a lot of these kinds of things in terms of subscription, et cetera. Yeah. For the subscription actually, are we going to offer like leasing models for robotic mowers or, you know, chainsaws or whatever? We're doing that in quite a few countries, and actually in some countries actually we do it in-house, where we are the financial institution. But in most countries we do it together with partners. Mm-hmm. Excellent. We have a couple of minutes left. Should we take at least one more question here in the. Yeah, we have one there in the back. Please go ahead. Hi. Thank you very much. Daniel Johansson from technical advisors. Can we perhaps talk a little bit about the 62% of your non-electric offering? What's gonna happen with that when electric is penetrating even more? Is there a cost to reduce that capacity? What's gonna happen to margins, you know, down the line in a couple of years or so, you think on that? Secondly, how to think about the age of the installed base, for lack of a better word, when it comes to, you know, all your products, given that we've had quite a boom over the past couple of years? Thanks. If we start with electrification, if we reach our ambition in 2025 that 2/3 of our motorized offering is electrified, that would mean that 20% of the total group revenue will be based upon petrol products. Which is quite a difference, of course, from what we looked like in the past. Today we are about 40%, I will say. As I alluded to a little bit earlier, where we are the most vertically integrated here is in handheld products. There we have taken the proactive steps already to outsource a big portion of it and to consolidate a portion of it. Of course, as this continues, we will continuously have to develop, and we will continuously have to adjust our manufacturing operations. I mean, that's what we have done along the years, and we will continue to do that. Excellent. Did you have a final question there? Yeah. Yes. We have a final question here on online channels and online sales. How large a share of total sales may come from your own online channels during the next five years, is the question? We haven't set a specific target for that. The reason is that the channels are a means to an end. Our focus is on the consumer, the customer, and to provide different ways for the customer to shop going forward. Setting a target for a channel to us is a little bit counterintuitive. The important thing for us is to build out the capability to make sure that we provide that option, and that's what Glen talked about before. I mean, the 15 markets in the Husqvarna Division, the four in... Or was it five? 14 and five. 14 and five, sorry, in the Gardena Division, and that we continue to develop this at a high pace. The big question of this is, what about margins for online sales? I mean, generally speaking, I mean, margins are higher, but your cost to serve is also higher. I would say generally speaking, today it's fairly comparable. Okay. Anything else from the floor? No? I think we are running a little bit out of time on the Q&A. Oh. Yeah. You think so? Yeah. Okay. Thank you very much, Johan. Okay. Thank you from the floor, and thank you very much for you participating online as well with the questions. Thank you Erik, Henrik, and Glen. Give them a hand. Thank you. Welcome back, everyone. If you could please be seated, we're going to start with the second part of our program. Please be seated. Thank you. Welcome back for the second part of this Capital Markets Day, and also warmly welcome back to those of you following us online. You've been waiting a little bit. We've been running late. I heard you had very many questions out in the exhibition area. You're welcome to visit the exhibition area again when we finish this program and after lunch. Now it's time for divisional deep dives. We're going to dig into each division separately. I'm joined now here by the divisional presidents. Welcome, Pär Åström, President of Gardena Division, and Glen Instone, with a different hat this time, for Acting President for the Husqvarna Division, and Karin Falk, President of Construction Division. Welcome to all of you. Now, you're sitting here as a group. We'll dive into your divisions just in a second. Could you just elaborate a little bit on the benefits and strengths of being a group? What do you say, Glen? We share a lot, actually, as divisions. We share a lot of sourcing synergies, we share a lot of supply chain capabilities, particularly in warehousing. We even share some manufacturing facilities, as well as back office functions. We share a lot between the three divisions. Karin, anything else? Well, I could only agree with Glen here. I mean, there is a lot of things that we benefit from the group. I mean, one very big thing is, of course, our strong Husqvarna brand, and also, the infrastructure, as you say, Glen, with the back offices, I mean, the global reach, a lot in the technology area when it comes to both the two-stroke engines, but also, of course, the battery development. Numerous of things. The question already came up in the first session about construction being a part of the core business. Yeah the group. How do you see that? We heard Henric's reply, but what is yours? Yeah, I think it fits very well. I mean, we, I mean, Henric talked a lot about this, core capabilities that we have in the Husqvarna Group, and that's that we share. But also, I think all of us would agree that we also have the independence that we need for things that are different. I think it fits very well. Pär, how do Gardena fit, benefit from the group? I think especially when it comes to new technology development, where we as a group can combine resources and efforts to quicker gain critical mass and knowledge in new technology fields. I mean, for Gardena, the group's robotics capability has been really important for our growth journey. We collaborate a lot also when it comes to communication protocols around smart systems and I mean, our artificial intelligence. Not least technological scale. You're also unique divisions. What about your uniqueness, Pär? What would you say Gardena's uniqueness is? Gardena's uniqueness is that we have our own distinct target customer segment, and it's a consumer segment. It's the passionate gardener. We are entirely focused on this consumer segment, making us a true consumer brand, whereas both the other divisions have also professional target customers. That's a big difference. Consumer brand, professional, of course, Glen, as well as consumer. I would say it's our global reach and our product breadth. Nobody has the breadth of product we have. Karin, what would you say is Construction's uniqueness? It's a little bit the same. We have a very broad range within our segments, within the light construction equipment industry, and also, I would say our deep knowledge in our application areas. This, that's for the group and for your own uniqueness. Now we'll dive into each of your divisions. A little bit more on Gardena or a lot more about Gardena now, Pär. You were actually here yesterday when we were rehearsing, finishing or closing a deal. Yes. We closed the Orbit deal yesterday night at around 11:00 P.M. Very fresh, but very happy to achieve that. Let's hear more about that and other things in Gardena. Sure. It's your turn. Realize your gardening dreams, that is Gardena's brand purpose. Those of you that are passionate about gardening out there, you will know that these dreams, they vary from year to year and season to season. My dream this year has been to bring fruit and life back to a very old retired apple tree. That's exactly when Gardena needs to be there with inspiration, with knowledge, and of course, the right tools to help those passionate gardeners. Like I said, Gardena is focused on the customer segment of passionate gardeners. The passionate gardener is someone who does not only like to have a beautiful garden, they actually love the process of creating one. Of course, to shape a great customer experience for these people, we also need to be passionate about gardening and knowledgeable about gardening, and we need to have passionate employees, and we have 3,600 of them. We also have some true positions of strength, some real leadership positions. If I'm gonna call out the most important one, it would be that we are a gardening super brand. We take great pride in tracking our brand performance and seeing that, as a gardening brand, we have the best awareness levels and also the highest preference levels. Of course, that creates opportunity to shape leadership market positions. After the Orbit acquisition, we are the global number one in residential watering, and we're also the global number one in the smart watering space. I'll talk more about this later. We also have other leadership positions within the gardening space. We're a leader in hand tools, in robotics, and also in electrical gardening tools. We want to meet the consumer where they are, and therefore, we have invested and built capabilities around omni-channel. We think today we have a very proven capability within this field, giving us an advantage in the competitive landscape. We also want to lead our industry forward, and define what gardening of the future looks like. Lately, we have started to pioneer what sustainable gardening is, and I'll come back to these topics. These leadership positions, of course, needs to translate into financial performance, and we're very proud about our financial track record. We've had a good profitable growth journey since the creation of the division in 2015. If you look for the Gardena branded performance here, and we call out that the Gardena branded growth rate has actually been 13% year-over-year, on average, and that's an organic growth rate. To explain this profitable growth journey, I would like to talk about three growth levers and two profitability levers. First of all, being a market leader with fairly big market shares in the segments where we play, it's not enough for us to just take share from others if we want to grow fast. We need to actually grow the whole market. Then, of course, innovation becomes very important to fuel the market growth. Secondly, our strongest positions have been in our home countries in Central Europe, and we've seen an opportunity to build on emerging positions around the world and really fuel the growth of what we call focus countries. That has also been very successful and explains part of this journey. Last, but not least, there's been a tailwind for us in the recent stay home trend, and I think we've been able to capture that opportunity, and fuel the interest for gardening these last years. On the profit lever side, of course, it's partly about mix, constantly trying to mix up the gross margin by focusing on profit pools on one end and also by bringing new products into the business with higher margins than the previous ones. Of course, the capability to grow with costs under control so that we gain leverage. Looking ahead, our strategy is focused on three strategic priorities. It's about accelerating our geographic expansion. It's about capitalizing on our omni-channel capability and really build the omni-channel experience for those consumers out there. It is continue to lead our industry when it comes to innovation. I will talk through these areas one by one. Let's start with geo expansion. Our business dream, our business vision is to be the leading gardening brand around the world. We've had one big white space in terms of trying to reach that business vision, and we have not really had any presence in the U.S. market. That's why we are so happy that we have been able to acquire Orbit, which first of all and immediately gives us a strong standalone opportunity to act in the U.S. gardening market. It also gives us longer term a platform upon which we can build and scale a Gardena branded business. Especially Orbit's go-to-market capability strengths and also their infrastructure with a nationwide distribution capability are things we appreciate. Of course, B-hyve, their leadership position in smart watering technology. The organic growth journey has to continue, however. The last years, we have established a recipe for how to grow our positions outside of our core markets. Of course, first of all, every market needs to have a strategy anchored in consumer understanding and also our position in the competitive landscape. But then what we do is that we cluster our markets into different categories, where we give the local management a frame condition, which they need to operate under. We talk about strategic focus markets, focus markets, core markets, and other markets. These clusters have different frame conditions. As an example, if we look at the strategic focus markets, these are the markets we really invest behind for growth. It is larger gardening markets where we believe we need to have a stronger position, we should have a stronger position in the future than what we do today. We target four of them since yesterday, U.K., France, Russia, and now also the U.S. is a strategic focus market. The frame conditions we set for these markets is that the overarching objective is to get to the number one position in gardening. That means that the most important key performance metric in our business reviews is market share development. The consequence of that, of course, is that in these four markets, we need to be prepared to sacrifice profitability improvement for growth. It also means that we need to stay committed to these markets for some time. If you want to build a gardening super brand, you need to be persistent over time. We actually demand that these markets, they invest heavily in brand and marketing. Actually, what we are targeting to do is to run them at two to three times the division average rate. Of course, we want to immediately build an omni-channel presence and capability in these markets. Since we have a good offline capability, that means that we are accelerating the online sales and marketing approaches in these markets. That brings us to how we are thinking about omni-channel. Our target is to serve and create good customer experiences for the passionate gardeners. That means that we need to be where they are and where they are interacting with their area of passion, which is gardening. They of course do that today also when they are not gardening online. We've had strong offline capabilities, but we've had to build online capabilities, both within the area of marketing and within the area of sales, and also within the area of operations. I think we have come quite far on our journey. Today, 25% of the division's sale is transacted online. The key capabilities that we have built is that first of all, we've had to change a little bit our mindset. We've had to become even more consumer oriented. It's not just about the point of sale. It is also about when they seek inspiration for their projects or when they try to figure out how to do their projects and realize their dreams. Then of course, we need to be where they also seek to buy the product. This requires also more data driven capability and mindset. We need to be more real time in our campaign planning and adjustments. We've had to bring in people that have done this before, to accelerate our learning journey. We've actually created a center of excellence e-commerce team, which now is helping all markets around the world to develop their online business. Of course, we've had to rethink how we do marketing. Online, we have a different opportunity to tell our brand story and also our product stories. Therefore we have changed how we work and develop content so that we today produce a lot of own content, and we tell our product stories in different layers. Finally, we have had to make our product e-commerce ready. That of course means to adapt how many units we sell in one package, the packaging for that unit, but also the product itself. I think a good example is a lot of the Gardena tools have long handles. They're stick tools in one way or the other. Of course, that's not convenient for online shipping. We've added a lot of telescopic functionality to our handles, and that's one example of how we make products e-commerce ready. That brings us to innovation. The centerpiece of our innovation journey the last years has been the development of the smart garden. Let's take a look at what we have achieved. Two years ago, I was also on a Capital Markets Day stage, and I was very proud that I could state that we had more than 100,000 connected devices in Gardena. Today, I can state that we have more than two million. I think that shows the growth potential of gardening technology. You may ask, what's the value of a smart device in a garden beyond the growth, of course? I think for us, to make it simple, it's twofold. We are a gardening super brand, and we need to constantly find new ways to engage the consumer. We know that a smart garden user actually engages with a smart app at least every second day on average. So that gives us many opportunities to shape a great customer experience. It also offers us the opportunity to add value to the product they have bought during the product life cycle. I think another good example of that is that, this year in June, we launched the Water by Weather functionality in the app. Since then we have actually shut off, smart garden systems when the weather forecast says it's gonna rain. We have saved in the Gardena smart system 330 million liters of water as a consequence. Of course, looking at the Orbit B-hyve numbers, they are even more impressive, both when it comes to connected devices and water savings using the same functionality. I think that also shows the potential in the U.S. market for gardening technology, which we want to tap into with the Orbit acquisition. Our innovation efforts are not only about smart. Actually, for us, it's very important to have a high drumbeat of product launches and innovations brought to market. One of our key objectives within the product management area is how much of our sales is generated by products which are recently launched. The metric we look at is it launched within two years, the last two years. Today, the year-to-date number here is that 28% of the division sales is generated by products which are not older than two years. Lately, our product development efforts have been very focused on defining what we call sustainable gardening. I think you could see out in the exhibition area the EcoLine product, which we are launching, made out of post-consumer recycled plastic. What we want to do here is we want to provide a full range of gardening product that is made out of sustainable materials. We want it to be with the same features that a traditional Gardena product has, so well designed and high quality. I can tell you, it's not that easy to make a 25-year warranty product out of old yogurt packaging. We're very excited about this launch. We're also launching our new range of metering products this coming season so that passion gardeners can control and monitor how much water they use in the gardens. We have been awarded the Red Dot Award for our new sustainable direct-to-consumer packaging. I think also the Power for All Alliance shows our commitment to sustainability, where it's not only a great convenience for a consumer to have one battery for devices around the home, it also reduces the electronic waste in our homes and in our lives. To sum up, we want to continue our profitable growth journey, and we will do so clearly focused on these three strategic priorities, where we accelerate our geographic expansion, now also adding U.S. to our strategic focus countries. We want to leverage on our built omni-channel capabilities and shape a great experience, independent of where we interact with our passionate gardener consumer. Last but not least, we want to continue to lead the evolution in our industry and define what the future of gardening looks like. Thank you. Thank you very much, Pär. Welcome back to this sitting area. Now, this film, I like this one. Your garden won't notice when you're gone. It really talks to me since I'm not a garden person, so I can just do it through the mobile. Sounds great. Talking about acquisitions, Orbit, you finalized that. SEK 4.1 billion, very good move, says the analysts I read somewhere. Big strategic step into the U.S. market without paying too much. That's a good thing. You seem to have a plan for expanding Gardena. U.S., isn't that a very tricky market? What would you say are the key success factors? Well, we think it's a different market. It's for sure a big gardening market. We think that to be successful, we need different capabilities than potentially what we have developed here in Europe. That's why we've decided that if we're gonna make it in the U.S., we have to make it also with the support of an acquisition. What we have found is a very capable and passionate team that can help us be successful in the U.S. We believe that it's easier to bring the Gardena spirit to them than to bring the knowledge of key success factors to be successful in the U.S. to the Gardena team. That's the way you're gonna do it. How much revenues and how quick will you generate for Gardena in the U.S.? Well, I think it's a twofold story. First of all, it's about the acquired business, the Orbit and the B-hyve business, where we see a really attractive standalone case and we want to accelerate their profitable growth journey as a first step. Then, of course, we will not miss the chance to immediately start to also now put focus on Gardena in the U.S., where the first step will be to make sure that we participate in building the U.S. robotics market, launching also Gardena robotics. that's the way to do it. You move in Gardena through Orbit. No numbers here? No? No, I think it's too early to say. Oh, it's too early. We closed yesterday night. Okay. You get a little bit more time to answer that question. You said in your presentation that you will prioritize growth over profitability. For how long? For strategic focus markets. It doesn't mean that we're doing it for the entire division. Mm-hmm. Actually, we're prioritizing growth over profitability improvements. Okay. We, of course, have a hard time accepting lower profitabilities. Profitability. Mm Growth over that. Okay. Online channel, you're good now, 25%, it's pretty good, of your business. In, you know, next year, in five years, where will you be? Like Henrik said, for us, what's important is that we are where the consumers are, and we think that they will want to interact with their hobby, gardening, their area of passion in different ways, both from person to person, also from time to time. What we've tried to do is build capabilities that puts us in a good position to really serve them multichannel, omni-channel. We've reached that stage where we've come so far that we think it's an advantage for us compared to competition. 25%, it's a bit more than the other divisions. What can you teach them? I don't know if it's for us to teach them, but we of course collaborate around our planning. We also have a movement within the group between divisions of key people. I think there is opportunity to help each other here. Mm. Absolutely. We'll have some more questions for you after all the presentations. Thank you, Pär. Glen, next up, Husqvarna Division. Thank you. It's now good afternoon. Switching hats, I'm here to talk Husqvarna Division. I've had the delight to leading the division since the middle of the year. It's a pretty large division, and we start off with the size of the market opportunity, SEK 150 billion. I should say quickly, that excludes the professional opportunity that we talked about earlier. This is really where we're playing today, not excluding that large SEK 100 billion market opportunity. Sales of roughly SEK 28.5 billion, giving us, give or take, a 20% market share. We've still got some way to go as well, actually, some opportunities. Really pleased, and I mentioned it this morning as well, that we've increased the operating margin within the division, now over 13%, coming from below 8% when we actually folded in the consumer branded business back in 2018. A strong growth since 2018. Truly global presence, over 130 countries, either through own sales companies or through distributors. Sales growth, impressive, 9% CAGR. Actually having around 7,500-8,000 dedicated and passionate employees in the division. How has the performance been, particularly since we formed the division back in 2015? Actually, as I mentioned, the sales growth has been some 9%. That's actually excluding the consumer branded exits. That has been around SEK 4 billion. Of the SEK 4.5 billion we talked this morning, SEK 4 billion sits in the Husqvarna Division. If we don't exclude that, it's about 2 percentage points growth. It's a fairly bold move to exit all of that business, but at the same time, the blue line coming up is really the result of that focus and execution, walking away from the non-core and focusing on the core. It had approximately a 90 basis points margin improvement on the division that exited business. That's enabled us to really focus our attention on the prioritized segments. We clearly see we can get value and be paid for, in very simple terms, for innovation, for new products. When we do that, we see the mixed benefit coming through. As Henrik talked about this morning, and just as Per has talked about in the Gardena context, the brand focus is particularly important. The majority of the division is Husqvarna branded. We have a small amount of the sales that actually take part in Japan, that is under the Zenoah brand. Extremely important in Japan, but the vast majority of the sales in the division are with the Husqvarna brand. What we've also done during this period from 2015 through to current day is actually increase the customer centricity, put the customer at the center of what we're doing. Somewhat starting internally, how we organize, but really then looking externally at how the customers want us. We wanna meet them where they wanna play, and we wanna be more appropriate and applicable to them. There is a, as I mentioned also this morning, we do feel this, there's some tailwind with us from the recent stay at home trend when it comes to the COVID stay at home trend, but also an increased interest in our products. When we look at the strategy for the division and the really strategic priorities that we have, it goes without saying that we wanna have a continued market leadership position when it comes to residential robotics. We also see a huge opportunity on the professional side, both in robotics to really disrupt that professional turf care space, but also in the broader professional opportunity when it comes to tree professionals and green space professionals. Last but certainly not least, of course, we are in a transformational process. The petrol to battery shift is gonna be equally as important for this division as it is for the group. Driving that electrification is gonna be critical for us. Let's start with the residential robotics. When we met here in 2019, we talked about a SEK 7 billion market. We now talk about a SEK 9 billion market, both where Pär and the Gardena Division play and the Husqvarna Division play. A SEK 9 billion market opportunity. We're a clear global market leader. We do have a clear market leadership position. Where we have a strong penetration and a strong awareness, then of course we have that installed base. We have that recurring revenue opportunity going forward. Also we have a lot of parts in it, particularly accessory business, where we can tap into even more. We can speak to those end users using the Husqvarna Automower Connect app. Where we have markets which we are less penetrated, but maybe there is an awareness, of course, we can continue that penetration journey, taking them where the Swedish market sits with a penetration over 60%, how can we make France, for example, a similar penetration level? A significant opportunity. Last but not least, those focus markets that we see. U.S., it is the largest garden market in the world, so of course it is a focus market for us. U.K., one of the largest garden markets in Europe, and Australia. Three target and focus markets for us to really penetrate with robotics. How should we do this? We believe this Husqvarna Automower is a seeing is believing product. We need to have people using the product. We need to have testimonial sites. When you see this product in use, just as we've seen in the mature markets, if a neighbor has one, you want one. We've got to have more and more product out there for people to see. That will be the very clear strategy how we're gonna build it up. It'd be much more targeted in these focus markets, how we're gonna do it, more targeted marketing opportunities and activity online. That really enables us to reach that density point where we then see the growth. I think it's important as a market leader that we continue to raise the bar. We have more competition than ever. As Henric said, we take that as a compliment. People wanna come into our playground, and that's good. We need to continue raising the bar with our innovation. As market leader, we're gonna bring even more innovation to the marketplace. For next season, we will have AIM, Automower Intelligent Mapping. Basically that will map your garden through sensors as it is moving around your garden. That will then go into the cloud and ultimately into your Automower Connect app. You can then decide where you want the Automower to work. Through sensor technology, it can decide and you can decide where you want the Automower to be working. Your garden, your decision. We were first to market with boundary wire-free technology. I know we took a little bit of extra time outside because you saw that beautiful CEORA product. We can continue to expand that. We came with EPOS technology. Well, two years ago, we launched that at Capital Markets Day in 2019, and now of course we bring even more. We're gonna continue to improve the boundary wire-free experience. First to market, I'm gonna continue that. Last but certainly not least, for those who are Automower owners, having the Automower Connect app becomes a must-have app for, at least for me, and hopefully for you too. There's gonna be a lot more user flexibility and interface in the new Automower Connect app that will be launched next season. We raise the bar when it comes to our offering. When it comes to the professional opportunity, a huge market, SEK 100 billion baseline opportunity. Wow, what should we do? There's a huge opportunity. As Erik talked about and as Henrik talked about, as electrification accelerates, we have the product. Nobody has this product like we do. Nobody has this. We have the product, and now we need to create the opportunity, create the connection to the distribution channels, and create the connection to the end users here. There's four distinct, let me say, segments that we've decided to look at. Sports, representing around 15%; golf, about 25% of the opportunity; facility management, about 20%; and landscapers, around about 40%. Some huge opportunities there, large segments that we can look into. When it comes to the professional opportunity, why don't we look at what, or at least listen to what our customers have to say? [Non-English content] [Non-English content] Hello, my name is Jim Ellis, and for the last three years, I've been Head Greenkeeper in Golfclub Hamburg-Walddörfer. When I first started in the club, three years now, we just maintained the course with the usual type of mowers that we use. For two years now, we've been working with the robot mowers from Husqvarna. Best thing for me this year was we did a fairway. We tested it on a fairway with the fairway kit at 15 mm height of cut. Yeah, what I also found with the CEORA system and the Husqvarnas is that they're thinking also in other ways we can maintain the golf course. [Non-English content] For the German guests in the room. How do we take this great opportunity, SEK 100 billion market, with best-in-class products? What is our value proposition? We believe we have the market-leading offering. We have the products. We have the solutions. Not just the product, but how we can actually sell as a service, how we can do leasing, how we can do more financing solutions. How we're gonna actually enhance our go-to-market opportunity. We're gonna do that actually by adding a lot more people. The capability need and the direct selling opportunity is significant. Our competitors with the more traditional machines have those connections. We're creating those connections now by adding more and more people, creating our direct connection to the customer groups. Last but not least, the dealer is extremely important in this relationship, whether that's the installation, whether it's aftermarket capability through parts and accessories, or whether that's through simple advice and support. The pro-dealership development to support these end customer groups is gonna be important going forward. From a broader professional offering, we need to be even more customer-centric. By that, I mean we have two distinct customer groups when it comes to our pro business. We have tree professionals, the guys and girls working in the forest or in the trees in the green spaces, in the cities, the arborists. We have what we call green space professionals who are taking care of large green spaces. Quite distinct customer groups, and we have an organization built around those distinct customer groups. Our product range is the broadest. I said that earlier when Mia asked me a question, and we need to continue driving that to make sure we have the broadest offering, and we're very proud of that. With any professional business, and there was some questions this morning from the audience, of course, there is a significant aftermarket opportunity with the pro business. We need to continue to capitalize on this, continue to grow, and we really feel there's an opportunity here. We produced, and we started producing some years ago, our own saw chain. We also produce our own bars when it comes to chainsaws. That cutting capability is critical. That is what defines us. That is what makes us better than the rest. The cutting ability is what is critically important, and so we'll continue to drive that opportunity. Hopefully, you saw outside in the product demonstrations the battery offering that we have. It's pretty broad. As we said this morning, we need to have the best opportunity, the best offering, independent of power supply. We need to have the best application, best cutting ability, and that's what we bring. We will continue to drive the electrification in this industry. The figures that Erik talked about, the 38% on a group level, in the Husqvarna segment, it's 29%. We'll continue to drive that. Best-in-class applications, as I said, and we need to continue bringing more and more products to the marketplace. When it comes to the go-to-market strategy shift, and now I'm really reaching broad, we've got residential customers, maybe a lot of you in the room, to true pro customers, the people you heard in the movie there. From a pro end, we need to create that direct sales opportunity. More feet on the ground, more direct selling capability. On the residential end, as Pär was describing with the Gardena Division's opportunity and their journey, we need to create even more direct customer contact, and that is where the digital opportunity is, and we're continuing. I mentioned this morning 14 markets where we have direct e-com sites for the Husqvarna Division, and we're gonna continue to drive that. That marketing opportunity and selling opportunity is significant. In the middle is our traditional dealer network. That doesn't mean they get squeezed. Actually, I say they become more important than ever because the customer touch point, be it a professional customer or a residential customer, the customer touch point is more and more critical. We need to create an excellent experience regardless of when you touch, whether you touch the products online or touch them via our dealer network. The dealer is gonna be critical in installation, in training, in aftermarket capability, both for the pros and for the residential customers. They are an integrated part of our division strategy. To recap, the real strategic direction for the division. Continued market leadership in residential robotics, either through existing penetrated markets, growing markets or new markets. We can and will expand into professional robotics. We are seeing that. It starts to become a notable figure in our figures, and we'll continue. To transform that turf care industry and also expand the professional offering per se for the tree professionals and for the green space professionals. Last but not least, continue to drive the electrification journey. Thank you. Thank you very much, Glen. Glen, the customers, only German customers? It was a nice testimonial film, knowing we had some guests coming in from Germany. No, we actually are selling this product now in numerous countries. Not only German customers. Not only German customers. Now you're talking about residential mowers and professionals of course. You were doing this last slide here, like the dealers are very important, and for the residentials even more online digital work and for the professionals more direct sales, more people on the ground. What else is different with the professional segment now? I think the selling method with the professionals can take a lot longer as well. Quite often with professionals it can be a two-year cycle. You might have to get into a tender process. You might need to send in a lot of people to show how products are installed and gonna be maintained. It can actually be a slower build-up to the actual sale. Once you get the sale, then there's a lot more recurring revenue opportunity. It takes a bit of a longer time, but there is a lot to go for. Yes In that market of course. Now, looking forward, how much growth would you say will be coming from the residential robotics compared to the professional? It's a good question. You know, when we talk about the doubling of the robotics business, whether it's coming from Per or myself, we still feel of course the significant growth opportunity. On the residential side, it is still a double-digit growth. Of course the growth potential on robotics, on professional robotics coming from a much lower base will be much higher. That is probably gonna be close to a doubling for some time. The revenues of the group now, it's like professional 1/3? Just over 1/3. Just over 35%, yes. As you say, assumed to grow above The pro- Residential Growth should be larger than the residential growth across the group, yes. It might take some time you said as well. We talked a lot about exits, yeah? You were proud of the exits you've done in the group. How much would you say that those have contributed to the financials? Well, we took away SEK 4 billion in the division, so that's a negative in that respect. Actually to the margin, it increased the margin by about around about 90 basis points in the division. Pretty empty top line when you just think of it in that context. Online sales, Pär here was talking about good performance there of 25%. Where are you at in your division? I'm trailing Pär, unfortunately. Mm-hmm. We are round about high single digits, much more to go. But it's also hard to fully track because a lot of our dealers are selling online, so a lot of our channel partners are actually selling online and we don't see that transparency. Little bit to go to catch Pär. High single-digit up to 25%. It's a little bit more than a little bit, I would say. How do you see the progress? No, I think it's exactly as Henrik said this morning and Pär said when he answered this. This is about being present where our customers want to shop. This is also the omni-channel experience for the division. It's equal. I don't think we have a particular target there. We just want to make sure that we are present where they want to shop. We'll come back to you as well, Glen. Karin, now it's up to you and Construction. Great, I will actually start with a film. We are Husqvarna Construction. We combine our deep industry knowledge with leading-edge innovation to create new intelligent solutions. We have the capability to innovate and create solutions that change the industry. Our range of products, systems, and services includes some of the world's most effective and easy-to-use machines and diamond tools for concrete sawing and drilling, stone, concrete surfaces and floors, and remote demolition. Hello everyone. I have been leading the division now for a year, and I really look forward to share our plans and future opportunities with you today. We operate globally on over 100 markets, and in the light construction equipment industry. We have leading positions in many exciting segments. With revenue for the last 12 months of SEK 6.8 billion on an addressable market of roughly SEK 45 billion. The light construction equipment industry remains fragmented, with many smaller specialized players, where we are a large global actor with a broader range and really strong business partnerships. We are without doubt on a very exciting market with great potential for future growth, both organically and via acquisitions. We have a leading position due to four main reasons. First of all, our broad premium offer. We provide our customers with the most high-performing premium solutions, which actually contribute to their profitability and also to their productivity. They are easy to use, high focus on safety, and with a highly appreciated ergonomics. This is very tightly connected to our second success factor, which is our leading innovation position. We continuously push the boundaries for customer experience, sustainability, and productivity. Thirdly, I would like to point out our long-lasting and strong relationship with our customers and also partners. We are driven by the belief that if we can make our customers more successful and profitable, we will be successful too. Last, our ability to grow both organically and via acquisitions. Going forward, we will continue our M&A journey, and we build actually around the customer needs in order to become an even better solution provider for our customers. I think the most recent acquisition of Blastrac is a really good example of this, where we've actually become leaders in the surface preparation market. Let's turn to the financials. As you can see, we have had a really strong track record of net sales growth with a CAGR of 10% for the last five years, where half of the growth approximately comes from acquisitions. Since 2016, we have accelerated our growth with several acquisitions. As you can see, also since 2016, we have a slight dip in our EBIT. The main reason for that is that some of the businesses that we have acquired have a slightly lower EBIT than our divisional average. We have a clear plan to step by step improve this. As you know, it takes time to realize synergies after acquisitions. For instance, we believe that it will take us another couple of years to bring Blastrac fully integrated up to our divisional average. We have accelerated our sales and EBIT growth with acquisitions and almost maintained our EBIT percentage despite that we have 1.5 percentage points versus 2016 coming from our acquisitions amortizations. You can also see that we have not had a stay-at-home effect in the construction industry, 2020 is affected by the COVID situation. We have come back strong, and we can also see demand recovery in all different markets, regions, and segments. Who do we serve and what do they need? This is a picture of our end customers in our main segments. They are professionals focused on performance, and our most important job is to make them succeed. They earn their living through the uptime and performance and productivity of our solutions. That's why we need to be close to them to understand their pains and problems and also be available whenever or wherever they might be. We also serve the rental companies, their dealers, the distributors, and also our end customers' customers. That means that we have several stakeholders to take into account for everything we do. That's why we organize the way we are, to be really close and agile to the ones who depend on us. It's our customers who define who we are and also who we need to be. Let's talk about our strategic priorities. First of all, as you heard several times today that we are really focusing on expanding our offering within services and solutions. This will contribute to even more loyal customers, but also recurring revenues from the aftermarket, from diamond tools, and services. Secondly, we will continue our focus on electrification and battery innovations in order to provide even more sustainable solutions and also a better user experience. The third priority is, of course, to continue our growth agenda. Our ambition is to become a larger player with a broad offering to really be able to give the best support to our customers. Let's take a look at the different priorities one by one. Starting here then. Our focusing on expanding services and solutions is actually driven by our belief that we would like to be our customer's best business partner. Today, approximately 45% of our revenue comes from the aftermarket diamond tools and services. This is a business that we actually plan to develop even further. We have a large opportunity to improve further with the penetration in the highly fragmented diamond tools market. We develop and manufacture diamond tools ourselves all the way from raw materials and diamonds to finished blades and bits. Diamond tools are profitable. Over the lifetime of the equipment, the diamond tools actually represent the higher value than the equipment itself. Apart from diamond tools, we're also focusing on building total solutions for our customers, but also to increase the share of connected products. We see several business opportunities for connected products. For example, remote updates, possibility to see when a consumable is worn out, or when an equipment is due for service, just to mention a few. We also see that we have further potential to develop our service contract and the penetration even further. All these services will give our customers enhanced uptime and productivity, and also, of course, an increased after market for us. Our second priority is to take leadership within electrification and sustainability. We are committed to run our business with focus and responsibility for future generations. Our largest impact is actually from reducing our carbon footprint, not only in our own operation, but also for products in use. We already today have more than 40% of our equipment electrified, and now the battery range is accelerated. We have an ambition to become leader in battery applications within our area. We already today have our 36-V system, which I'm sure you saw some of it out there in the exhibition for those who did go there. Now we have also our newly launched 94-V PACE system. This is a system for higher power and energy efficient, energy demanding applications. We have invested heavily in this area. The PACE power cutter that some of you saw in the exhibition is actually the first out on this PACE platform. We are excited to say that we have a very strong range coming out here for that to be launched during next year and the years to come. Our third strategic priority is to continue our successful growth journey. The strategy that we have is to strengthen our core within concrete sawing and drilling. It is to further build our second area, which is concrete surfaces and floors, but it's also to capture adjacent opportunities. The Construction Division is built on acquisitions. During the last seven years, we have actually managed to execute eight successful acquisitions, which has enabled us to build our second core area, which is concrete surfaces and floors. We are building around the customer needs in order to become a total solution provider within the segment. We have built the best and broadest range within the industry, within the surface preparation area, covering the entire process from soil compaction up to a finished treated concrete floor. We have also consolidated and migrated most of the acquisitions under our strong Husqvarna brand. We see even further opportunity within this area for the future, and that is, I think, highlighted in a good way by our recent acquisition, Blastrac. Our ambition is to continue to grow in order to become an even better solution provider for our customers. To summarize, we have high performing premium solutions that are highly appreciated by our customers. We have a large share of recurring revenues that we plan to grow even further. We are an innovation leader with deep knowledge an understanding of our customers' and users' needs. We have a well-proven growth strategy that we continue to execute on, and we have passionate employees with deep knowledge and strong customer focus. What is most important of all is actually to be the best business partner for our customers and to continue to create great customer experiences for those who shape urban environments. Thank you. Thank you very much, Karin. Welcome back to the sitting area. Now, just a couple questions before I let you loose here in the room and online. Services, you're really good at this. 45% of your business is recurring revenues. What would you say are the key success factors? Well, I think to mention one is, of course, our end-to-end focus within diamond tools, and also our deep knowledge how diamond tools and equipment fits together to optimize that. It's also our focus, I think, on really serving the customer throughout their whole life cycle, just to mention a few. We have more opportunities here. Even though 45% is a good number, but even more opportunities. Electrification, new battery products, you were showing us some power cutter there. Yeah. What's the customer's response so far? Yeah, for those who have tested the product, I think they are quite enthusiastic. I mean, if you look at this product, it's low vibration, super good ergonomics. Of course, you don't have the exhaust fumes, and I mean, it's also very easy to use. I think perhaps the most important also with really high power. Yeah. Well, that's important. Yeah. You were talking about M&As, successful M&As, eight last year, you said. You've done quite- During the last seven years. last eight years. Sorry, the last seven years. You've done quite fast integration. You've built like a second end-to-end business. What key success factors in this M&A job? Well, I think that it's our strong focus. As I said, I mean, it's really to strengthen our core within the concrete sawing and drilling and then to further build what we have built now, the concrete surfaces and floors, and to capture the adjacent possibilities. We work really focused on this, are always up to date and have that as a natural part of everything we do. I think one of the success factors is with this planning, we really work on the integration and how to create synergies in the sense that it makes sense for the customer to build around the customer needs, to be able to provide a broad range for our customers, and to have that in mind all the time. Looking ahead, what more acquisitions do you see? Is it any particular geographic area or? Well, I think you can say that, since we have the focus we have, we are always looking at that. I also mentioned that it is a fragmented market, so there are opportunities, I mean, both from a product and geographical dimension. I don't think I will comment anything more there, but exciting times. Okay. Let's open up for questions from the floor. Again, Johan, please help me out there. For those of you online, you know how to do this. Yeah, write your questions in the question field, and they'll end up here in my iPad. Excellent. I think we'll start on the floor, right? Excellent. I think we also have Henrik. Henric back on stage. Excellent. Great. For the Q&A session. Reinforcement. Welcome back, Henric. Thank you. Perfect. Great. Do we have any questions here from the floor in Stockholm? I see a number of hands here. Should we start with Karin, Handelsbanken? Yes. Thank you. Karin Handelsbanken. I wanted to ask about electrification because one could argue that with that you can maybe outsource more and be less vertically integrated. If so, the pretty big cost item that you have in your cost structure, which is the factory overheads, should come down over time. Could that be so? Follow-up, why haven't we seen it yet? Have we not come to a certain tipping point in terms of outsourcing? What kind of expectations should we have how the electrification will impact your structural cost maybe is the easiest way to ask the question. Maybe if I start, then you can add, Glen. I think we have taken the first big step, which is the one-time cost we took last year. A big portion of that was to make our handheld value chain more competitive and a big portion of that was the whole electrification. As I mentioned a little bit in the morning, to make sure that we address the engine component manufacturing, because from an assembly perspective, it's not such a big difference. From an engine component manufacturing, of course, that's where the big difference is, and that's where the focus has been. We have taken one big step and executing on our plan and if we reach our ambitions, which of course is clearly what we aspire to do, 20% of what we will be selling in 2025 will still be petrol. It's a matter of how do we How do we manage that in a proactive, smart way a little bit at a time, so we don't need to have these big steps, hopefully? Anything you want to add there, Glen? I think you covered it, but you're right, Karin. We do have an extremely vertically integrated supply chain when it comes to petrol handheld products. We took the first step with some of the restructuring we announced last year. Now we do talk more sub-assemblies coming into our system, and that's the reality. I think it will be iterative as we go forward. Thank you very much. Did we have any other question there? I think on the second line. Thanks. Gustav Hagéus with SEB. I have a question on Orbit and integration. I appreciate that you were up late last night. Are there any structural reasons, the way you see it, for you to start selling robotic lawnmowers under the Gardena brand already next year in the U.S.? Well, with the Gardena perspective, having a leadership position in robotics in Europe, of course, we've also had a look at where the future opportunities are, and the U.S. market is a big future opportunity. We want to take part in it. And we think that it's a good way to also put the Gardena brand into the right spot in the minds of the consumers. Because with robotics, we can actually launch an innovative high quality garden technology solution, and frame the brand as a garden technology brand with a price premium. And we think robotics is a good product to do that. You think you have time to do it already next year? Sorry? You will launch robotics in U.S. next year. You think that's We will increase our focus on selling robotics in the 2022 season in the U.S., yes. Thanks. Excellent. Did we have another It's very close to the 22 season. We had another question I think from Christer. Christer Magnergård from DNB. Question on the profitability for construction. You said that 45% of sales come from services, the aftermarkets and- Diamond tools Diamond tools. Yeah. I would guess that that's a high margin business. If I look at all other companies, at least high teens%, probably, which means that the rest of the business, equipment business is, well, mid-single digit margins. Is this correct? Why is that so? What can you do to improve it? Well, I wouldn't really say that is the case, but I don't think we comment on individual profitabilities on the different segments. Or what do you say, Henric? Oh, you're looking at me? Oops. No, I think you can't just look at the equipment as equipment. I mean, there's a big difference here between the different segments where they have very different profitability. You're not totally off that. I mean, of course, with higher profitability on the aftermarket, that means that the equipment side need to be lower. There's a big span there. I think that's more up to us to claim even more of a premium position versus a lot of small individual local competitors that have a tendency to operate with fairly tight margins. Just very- Go ahead, Christer. Very, very short question to when it comes to robotic lawnmower markets. Did I understand that correct, that you have roughly 60% plus global market share? In residential? Yes. Seems reasonable. Yes. Great. Thank you very much. We have another question just the line behind there with Johan Eliason. Hi. Johan Eliason, Kepler Cheuvreux. One thing struck me when in the Construction Division, you highlighted your acquisition agenda. It's basically meant your margin has been impacted by PPAs by 150 basis points. Just talking about your new EBIT margin target, I guess we will see some PPAs coming from Orbit as well in a bigger scale. We had another company yesterday redefining their margin target from EBIT to EBITDA. Are you definitely looking at the EBIT margin target, including PPAs and the restructure and et cetera? I just want to get that confirmed. Our EBIT margin targets include the PPAs, yes. Could it be a possibility to look at alternative measures going forward as we increase our M&A activity? Absolutely. Today, the target includes the PPAs of Karin's business and Pär's recent acquisition. Excellent. Thank you very much. We have another question here in the frontline. Björn. Björn, Danske Bank. Question on the dealers. You are talking a lot about the dependence on the dealers on the robotic or launch on the professional side. Are you having the dealers with you, or is this business as usual for them? Or is this a lot of investment in that segment? The dealers are with us by and large. You know, we have 25,000 servicing dealers globally, so it's pretty broad. Some, of course, are more professional than others, depending on where they're located, how their assortment is. From a true professional aspect, of course, it's not the 25,000, the ones who will really serve those professional end customers. We're really working with those. I don't wanna use the word classification, but we do have different classifications, and we need to continue working with them. You know, we do more training with them. They have more service technicians in-house, they have more installation capability. We need to continue that. Some years ago, you did a lot of efforts to increase the density of dealers in North America. If you can remind us of some regions in the U.S. maybe where density is higher or lower. Any white spots, I guess there are a lot of white spots in North America, but some color. You see a lot of dealers, of course, on the East Coast. The Northeast is extremely dense, all the way down the East Coast really where we see a lot of density. We see some density there on the West Coast when you get to California, et cetera. That's where you would see it, down that Eastern Seaboard, ultimately, where we have a strong density of dealers. Thank you. Great. Just checking with Mia, do we have any online questions? No. Any further? No online questions for the moment. No feel free to type in. Okay. While we are waiting for any further online questions, do we have anything more here on the floor in Stockholm? Yes, we have one there. Johan. Johan Ståhle. Glen, I think this one is for you. You're talking about turf care, and cutting the turf is one way to take care of it, but watering it in the professional segment. Any comments on that? Any ambitions? I can maybe look a little bit to my colleague at my left as well. No, at this point in time, that's not on the radar, but of course, there's huge opportunities there. It's a bit early for me to answer that question. Maybe we can send the question to Pär as well. You're doing consumer business, but. Yeah, I mean, our strategy is to be focused on the passionate gardener. The Orbit business has a smaller professional side to it. I think that's maybe an area where we will need to learn something more before we have a firm view. Mm-hmm. Excellent. Any further questions here on the floor? Yes, we have another here in the front with Björn. Please go ahead. Yes, on robotics again and the U.S. launch, which have had different turns throughout the years. I mean, first it was targeted to certain areas, and then it was a bit broader when it came out, and now you're targeting a few small areas again. Has the Orbit acquisition in any way have or will have any implication on the Husqvarna launch in the U.S.? I actually really welcome the Orbit acquisition when I look at it with my Husqvarna Division hat on, because I don't think it's a coincidence where we've been usually hugely successful in countries we've had both brands playing, the Husqvarna brand and the Gardena brand. I actually think it's a huge complement now to have the Gardena team with the robotic lawnmower as well as Husqvarna. I think it's great. Great. Excellent. Any further questions here from the floor in Stockholm? We don't see any hands at the moment. Okay. Thank you very much, Johan. No more online. Just a last question then for you, Henrik. Now you've talked us through all your plans, your strategic plans going forward, and obviously lots of possibilities, huge markets. What are the major challenges, would you say, in the plan? Yeah, that's, of course, a good question. I think we are probably the biggest limitation ourselves. I mean, how fast can we drive this? How fast can we leverage on all these opportunities that are out there, waiting for us to grab them or to create them? I think we are probably at risk. It comes back a little bit to how we how we always need to manage the short-term priorities and the short-term performance versus the building for the midterm. I think we are probably our biggest risk. That means you have it all in your hands, so to say. To some degree, yeah. Okay. It's time for your closing remarks, Henric. Sure. I promise to keep this brief. You have been sitting through a long day. Most of us don't ever sit through these long days anymore. Other than the ones that are participating online, you know exactly how this feels. I promise to keep this short. I just want to reiterate some of the key messages that we have tried to convey today. One is that we have built a much stronger Husqvarna Group over the last few years, and we have tried to share a little bit more details around that the sales composition is very different today with different prospects as to growth and profit in the future. That the business now is much more of a premium and pro with 90% of revenues behind the Husqvarna and Gardena brands. That's quite different than what we were five years ago. How we're doing this, making this transformation, towards more sustainable solutions, smart solutions, autonomous solutions, and electrical solutions. That we have really moved here in the last few years, and that the plan is that we will continue to move that, and if anything, to accelerate it. Another thing is that there are quite a few trends out there, transformational trends that will affect all of us as a society, as a company, and as individuals. We believe that the Husqvarna Group is remarkably well-positioned for the future, that we are making this transformation, we are being proactive, we are trying to be part of shaping the future instead of sitting in the rear seat somewhere or in the back seat. We are grabbing the steering wheel. We are trying to shape the future and to be in the forefront of this. That's something that I hope that we have been able to convey today. Given the performance we have had recently and the financial position that we have, we think it's time to take another step, to lean further forward, to accelerate our strategy, our strategy that is actually working and delivering and paying dividends, and to dial up our ambitions going forward. Some of these that we mentioned here today to bring more color to our journey going ahead is to double our robotic sales in the next five years. It is to make sure that we electrify the company, so 2/3 of all our products with a motor or engine will be electrified in five years. To continue to build that core business that we have that defines us today, that is super important to us, but to continue to grow it in very specific ways to create additional value while we are building out the segments of the future. How we aim to double the number of connected devices in five years. Not important per se, but we think it's such a critical enabler for how you can create customer value going forward, how you can create digital services going forward that on one hand can create incremental recurring revenue streams, but maybe even more important, importantly, to create more intimate customer relationships. Because sometimes I say this to provoke a little bit, if we make a really good product, which we do, by the way, if we sell it to a customer and it doesn't break down for five, 10 years, and then the customer comes back to buy something, what kind of a relationship is that? With services, with connected devices, with more direct marketing, you can create a much more intimate customer relationship, and that is very important for us going forward. It kind of all comes together here a little bit. Of course, the challenge is always when you dial up your ambitions. It's easy to talk about the more operational ones. We want to double sales of this, et cetera. We also need to set some financial targets. Here it's always how do you find the balance between what is sufficiently ambitious with what we know that we are gonna deliver? It is to find that balance. I think that's a little bit what we are trying to put some color on today as well. That maybe from an EBIT perspective, our jump off point is a little bit lower than what it looks like right now, given the positive benefits we have had from COVID, et cetera. We also have these investments that we will make because we are gonna be forward leaning. We're gonna really go after that robotics business. We are gonna go after that pro business going forward. We will go after all the digital services, et cetera, which requires investments. To then find this balance also when it comes to the EBIT target between, where to optimize on short term, what could be short term, possible to deliver with what is wise to do to make sure that we set the company up for the right trajectory for the future. That's how we ended up with setting the targets the way we did. I believe we have been able to at least put some color on that today. I hope that you all leave with those messages. Maybe even more importantly, I hope you leave with a feeling, a conviction that this is something we are extremely passionate about. All of us. The people at the product stations, everyone on stage, we really believe in this. That we are really creating a company fit for the future, and that we really can deliver on the targets that we are setting here. That's something that I think is probably more important than anything, that you all leave with that feeling that we are really behind this, we are really passionate about the opportunities that we have here in the Husqvarna Group going forward. With that, I would like to take the opportunity to, from my side, thank you all for joining today. I know how it is. We all have busy schedules. The fact that you have taken the time to be here today is something that we truly appreciate. Thank you all for that, and also the ones that have been watching online. From my side, thank you. Thank you very much, Henrik. We can feel the passion. Yeah, give him a hand. I'd like to thank you as well. Thank you, Henrik. Thank you to all the presenters, and thank you in the room, and thank you also online. Now, just a little info about lunch. You have lunch served outside. It's a mingle lunch, so you can either eat it inside here to talk away, or you can go back to the exhibition if you have further questions in the exhibition, or you can even take away the lunch. Yes, that concludes the agenda for today. Thank you very much for joining. Thank you.