Husqvarna Group's Q2 2025 Performance and Strategic Positioning in the Outdoor Power Equipment Market

In the evolving landscape of outdoor power equipment (OPE), the Husqvarna Group has emerged as a pivotal player, navigating macroeconomic headwinds while capitalizing on transformative industry trends. The Q2 2025 financial results and strategic initiatives under new CEO Glen Instone underscore the company's resilience and ambition. For investors, the question is not merely about short-term performance but about whether Husqvarna is positioned to lead the next phase of the OPE market—a phase defined by sustainability, electrification, and digitalization.

Q2 2025: A Mixed but Resilient Performance

Husqvarna's Q2 2025 earnings reflect a nuanced picture of growth amid challenges. Net sales declined by 1% year-over-year to SEK 15,277 million, primarily due to a 6% negative impact from currency fluctuations. However, this masks a 5% organic sales growth, signaling robust underlying demand. Operating income rose to SEK 2,063 million, with a margin of 13.5%, outpacing the previous year's 12.3%. This improvement was driven by strong performance in the Forest & Garden and Gardena Divisions, where robotic mowers and battery-powered tools surged in popularity.

The Gardena Division, in particular, demonstrated impressive momentum, with a 7% organic sales growth and a significantly improved operating margin. This success was fueled by the watering category and the broader shift toward eco-friendly solutions. Meanwhile, the Construction Division faced headwinds in North America but offset these with cost-saving measures and a favorable product mix.

Strategic Reorientation: Electrification, Automation, and Sustainability

The appointment of Glen Instone as CEO in August 2025 marks a strategic inflection point for Husqvarna. With a 23-year tenure at the company and a proven track record in balancing profitability with long-term value creation, Instone is poised to accelerate Husqvarna's transition toward a sustainability-driven, technology-centric model.

At the core of this strategy is the Robotics + initiative, which integrates battery-powered equipment, IoT capabilities, and cloud-based analytics. The launch of the CEORA™ robotic mower in 2024 exemplifies this approach, combining AI-driven navigation with zero-emission operation. In 2025, robotic mowers grew by 16%, a trend expected to continue as regulatory pressures on gasoline-powered equipment intensify.

Instone's emphasis on electrification aligns with global market dynamics. Battery-powered OPE now accounts for 28% of Husqvarna's sales, up from 18% in 2020. This shift is not merely a response to environmental regulations but a proactive alignment with consumer preferences for quieter, cleaner tools. The company's partnership with Robert Bosch GmbH on the 18V Power for All System further strengthens its competitive edge, offering interchangeable battery packs that enhance user convenience and product longevity.

Competitive Positioning in a Consolidating Market

The OPE market is highly consolidated, with major players like Deere, Honda, and STIHL dominating. Yet Husqvarna's focus on innovation and sustainability has allowed it to carve out a unique niche. In 2025, the global OPE market is valued at USD 39.41 billion, and Husqvarna's market share, though unspecified, is bolstered by its leadership in robotic mowers and battery-powered solutions.

Key differentiators include:
1. Sustainability Leadership: Husqvarna has achieved two of its three Sustainovate goals, including a 55% reduction in CO₂ emissions since 2015. This aligns with global decarbonization efforts and enhances its ESG profile, a critical factor for institutional investors.
2. Geographic Expansion: Aggressive expansion into Latin America and Asia Pacific has driven over 30% revenue growth in these regions. This diversification reduces exposure to mature markets and positions Husqvarna to capitalize on urbanization and rising disposable incomes.
3. Asset-Light Model: Strategic divestments, such as the Orangeburg, SC production facility, reflect a shift toward a leaner, more agile operating structure. This approach improves cash flow and allows reinvestment in high-potential segments like professional turf management.

Risks and Mitigation

While Husqvarna's trajectory is compelling, investors must consider macroeconomic risks. Rising trade tariffs, geopolitical instability, and currency fluctuations could pressure margins. However, the company has demonstrated agility in mitigating these challenges through cost-saving initiatives, price increases, and operational streamlining.

Moreover, the transition to electric and robotic products requires significant R&D investment. Husqvarna's 2025 R&D expenditure of SEK 1.2 billion (up 10% YoY) signals a commitment to staying ahead of the curve. The company's strong balance sheet, with net debt reduced to SEK 12.3 billion, provides flexibility to fund innovation without overleveraging.

Investment Implications

Husqvarna Group's Q2 2025 results and strategic vision present a compelling case for long-term investors. The company is not only adapting to industry trends but actively shaping them. Under Glen Instone's leadership, Husqvarna is transitioning from a traditional equipment manufacturer to a provider of smart, sustainable ecosystems—a shift that aligns with global megatrends in automation and environmental stewardship.

For investors, the key question is whether the market fully prices in Husqvarna's long-term potential. At a market capitalization of SEK 30.54 billion as of July 2025, the stock trades at a forward P/E of 18.5x, below its 5-year average of 22x. Analysts project a 12-15% CAGR in revenue through 2030, driven by electrification and geographic expansion.

Conclusion

Husqvarna Group's Q2 2025 performance and strategic reorientation under Glen Instone position it as a leader in the next generation of outdoor power equipment. By leveraging sustainability, electrification, and digital innovation, the company is not only navigating current challenges but also building a moat for future growth. For investors seeking exposure to a sector undergoing rapid transformation, Husqvarna offers a compelling blend of resilience, vision, and execution.

Investment Advice: Given its strong ESG profile, technological leadership, and strategic agility, Husqvarna Group is a “Buy” for long-term investors. The upcoming Capital Markets Day in December 2025 will provide further clarity on its roadmap, offering an opportunity to reassess valuation and growth prospects. However, short-term volatility from macroeconomic risks should be monitored, and diversification within the OPE sector is advisable.