Summary of Husqvarna Group's Capital Markets Day 2025 Company Overview - **Company**: Husqvarna Group (OTCPK:HSQV.Y) - **Event**: Capital Markets Day 2025 - **Date**: December 10, 2025 - **Location**: Stockholm Key Points Discussed Industry Context - **Challenging Environment**: The company operates in a challenging environment characterized by geopolitical tensions, supply chain disruptions, and changing competition dynamics, particularly from Chinese competitors in the robotics space [12][13][14] - **Market Position**: Husqvarna is a global leader in outdoor power equipment and light construction, with strong brand recognition for Husqvarna and Gardena [20][21] Financial Performance and Targets - **Underperformance**: The company has been underperforming against financial targets, with insufficient cost reductions and competitiveness [4][12] - **New Financial Targets**: - Aim for organic growth of 3%-5% over a business cycle [56] - Target operating margin of 10% in the near to mid-term, with a goal to consistently operate above 10% [39][57] - Return on Capital Employed (ROCE) target of 15% by 2030 [40][57] Strategic Initiatives - **Cost-Out Program**: Launch of a SEK 4 billion cost-out program aimed at improving margins and funding innovation and brand investments [35][40][61] - **Focus on Aftermarket**: Emphasis on developing a world-class aftermarket service to enhance customer engagement and generate recurring revenues, targeting growth from SEK 9 billion to over SEK 12 billion [43][51] - **Product Portfolio Management**: Clear segmentation of business units into profitable growth, profitability improvement, and turnaround categories [51][44] Innovation and Product Development - **Investment in R&D**: Commitment to maintain R&D investment at around 5% of sales, with a focus on innovation to sustain market leadership [58][59] - **New Product Launches**: Introduction of AI-enabled robotic mowers and other innovative products aimed at enhancing customer experience and operational efficiency [24][25] Market Dynamics - **Shift to Professional Users**: Strategy to increase the proportion of sales from professional users, which are seen as more stable and profitable [26] - **Robotics Market Growth**: Anticipated growth in the robotics segment, with a market growth potential of over 30% [47] Sustainability Efforts - **CO2 Emission Reduction**: Achieved a 55% reduction in CO2 emissions since 2015, with a new target of 60% reduction by 2030 [49] - **Circular Economy Initiatives**: Aim for 25% of sales to come from circular offerings by 2030 [49] Organizational Changes - **New Management Team**: Introduction of a new management team focused on cultural change and operational efficiency [6][4] - **Focus on Execution**: Emphasis on faster execution and agility within the organization to meet strategic goals [6][38] Conclusion - **Path Forward**: Husqvarna Group aims to transform into a profitable growth company through operational excellence, strong aftermarket services, and strategic capital allocation [51][35]

Summary of Flowserve Conference Call Company Overview - **Company**: Flowserve - **CFO**: Amy Schwetz - **Focus**: Flowserve specializes in manufacturing pumps, valves, seals, and related services, with a strong emphasis on aftermarket services. Key Industry Insights - **Demand Environment**: Positive outlook for 2026, particularly in the power sector, with expected double-digit growth driven by nuclear portfolio and aftermarket services [5][6][7] - **Power Sector**: Anticipated growth anchored by nuclear opportunities, including new builds and life extensions, with a current run rate of bookings around $400 million [5][6] - **General Industries**: Growth expected in pharmaceuticals, water (especially in the Middle East), and mining sectors [6][7] - **Aftermarket Strength**: Strong aftermarket performance expected to continue into 2026, with a focus on enhancing commercial and operational capabilities [7][12] - **Chemical Sector**: Stabilization observed, particularly in North America, with cautious optimism for improvement in 2026 [7][9] Financial Performance - **Earnings Growth**: Company reported a 30% earnings growth this year, with stock performance reflecting positive market reaction [16][17] - **Bookings**: Q3 bookings in the power sector increased over 20%, indicating strong demand [19] - **Revenue Potential**: A $10 billion opportunity in the nuclear sector over the next decade, with significant potential from new builds and life extensions [21][22] Strategic Initiatives - **Aftermarket Business Reorganization**: A global approach to aftermarket services has improved customer service and operational efficiency [12][14] - **Commercial Excellence**: Focus on cross-selling and utilizing data to identify opportunities within the aftermarket [15] - **Nuclear Opportunities**: Dedicated resources and strategic partnerships being developed to capitalize on nuclear market growth, including small modular reactors (SMRs) [24][28] Margin Expansion and Capital Allocation - **Margin Expansion**: Confidence in expanding margins through operational improvements and strategic initiatives [36][46] - **Free Cash Flow**: Strong free cash flow performance with opportunities for further enhancement through working capital improvements [53] - **M&A Strategy**: Disciplined approach to M&A, focusing on opportunities that align with strategic goals and enhance market exposure [44][54] Conclusion - **Optimistic Outlook**: Flowserve is well-positioned for future growth, leveraging strengths in product portfolio and operational improvements to enhance customer service and market share [57]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 grew 11.1% to $125.4 million, marking a record quarter for the company [4] - Net income for the quarter decreased 11.8% to $13.1 million, reflecting a 10.5% net income margin [25] - EBITDA declined 8.1% to $19.9 million, with an EBITDA margin of 15.9% [25] - Year-to-date revenue grew 13.1%, while year-to-date net income increased 3.7% [25] Business Line Data and Key Metrics Changes - Total window film product line grew 22.2% in the quarter, serving as a significant growth driver [23] - Total insulation revenue increased over 21%, including product and service for dealership services [23] - Corporate-owned stores and OEM business performed solidly despite some challenges in the OEM sector [23] Market Data and Key Metrics Changes - The U.S. region revenue grew 11.1% to a record $71.7 million, while the EU region saw a 28.8% increase to $16.5 million [4] - Canada revenue declined from the prior year, continuing a trend of a slow market [6] - Latin America remained flat due to weakness in Mexico, with a shift to a direct model in Brazil impacting performance [7] Company Strategy and Development Direction - The company aims to increase gross margin by approximately 10 percentage points to around 52%-54% by the end of 2028 [15] - Focus on investing in core business and manufacturing, with plans for potential service business acquisitions within the dealership services sector [17] - The company is prioritizing investments in existing markets rather than pursuing new lines of business [14] Management's Comments on Operating Environment and Future Outlook - Management noted a mixed sentiment in the aftermarket and dealer channels, with challenges in the retail automotive business impacting consumer affordability [44][48] - The company remains optimistic about long-term growth despite current market challenges, emphasizing the importance of strategic investments [12][49] - Management expressed confidence in the integration of the recent acquisition in China and its potential to enhance direct distribution capabilities [21] Other Important Information - The acquisition of the Chinese distributor was completed for just under $53 million, with a new entity formed to manage the assets [26] - The company added approximately $22 million in inventory as part of the acquisition, which will impact cash flow positively as it is sold through [10][28] - SG&A expenses grew 20.8% in the quarter, reflecting increased costs associated with the acquisition and other operational expenses [24] Q&A Session Summary Question: Can you elaborate on the out-of-line price increases and how they were mitigated? - Management indicated that price increases impacted gross margin by about 170 basis points, but they have robust supplier options to mitigate these effects [33] Question: What is the early dealer response to the rollout of colored films? - The rollout has been well received, with expectations of market growth and increased engagement from dealerships and OEMs [37] Question: What are the revenue assumptions underpinning the expected operating margin expansion by 2028? - Management expects low double-digit organic revenue growth to continue, supporting the margin expansion goal [42] Question: Can you provide an update on sentiment across the aftermarket and dealer channel? - Sentiment is mixed, with some challenges in the retail automotive sector, but opportunities for the company to provide value in tougher conditions [44][48] Question: What is the expected impact on gross margin in Q4 and the following quarters? - A drag on gross margin is expected in Q4 due to higher-priced inventory from China, but record gross margins are anticipated in Q1 and Q2 of 2026 [50][52]

Financial Data and Key Metrics Changes - Net sales increased by 8% to $229 million, driven by a 3% increase in both price and organic volume, along with a 3% contribution from the Core King acquisition [8][19] - Gross profit margins rose to 49.5%, an increase of 30 basis points year-over-year, marking the ninth consecutive quarter of gross margin expansion [6][10] - Adjusted EBITDA increased by 9% to $49 million, with adjusted EBITDA margins also increasing by 30 basis points to 21.5% [10][19] - Adjusted diluted EPS increased by 25% to $0.10 [11][19] Business Line Data and Key Metrics Changes - North American net sales increased by 8% to $187 million, driven by 3% net price realization and 2% higher volume [20] - In Europe and Rest of World, net sales increased by 7% to $42 million, benefiting from 1% favorable net pricing and 8% higher volume [22] Market Data and Key Metrics Changes - Sales growth was consistent across both segments, with North America seeing an 8% increase and Europe and Rest of World experiencing a 7% increase [8][19] - The commercial pool business continues to grow organically, benefiting from the integration of the Core King acquisition [9] Company Strategy and Development Direction - The company is focused on mitigating the impact of tariffs and supporting margins while positioning for continued growth [7][12] - The recent launch of the Omni X automation platform aims to unlock the addressable aftermarket of millions of non-automated pools [6][15] - The company confirmed its guidance for full-year 2025, expecting net sales to increase approximately 1% to 5% and adjusted EBITDA of $280 million to $290 million [8][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current economic uncertainty, highlighting the resilience of the business model with over 80% of sales aligned with aftermarket needs [7][29] - The company anticipates pressure on discretionary elements of the market, such as new construction and remodels, due to economic conditions and higher interest rates [9][28] - Management remains optimistic about the long-term growth outlook for the pool industry, particularly in the aftermarket segment [29] Other Important Information - The company is strategically reinvesting in sales and marketing, customer service, and engineering to drive future growth [20] - Total liquidity at the end of the first quarter was $398 million, with no near-term debt maturities [23][24] Q&A Session Summary Question: Can you clarify the impact of tariffs and mitigation actions? - Management indicated an annualized tariff impact of approximately $85 million, primarily from China-based products, and discussed proactive measures to mitigate this impact [33][34][37] Question: How is channel inventory managed? - Management expressed confidence in current inventory levels, stating that they are appropriate for the season and have been recalibrated in prior periods [48][50] Question: What are the trends in consumer behavior post price increases? - Management noted that while there may be some deferral in discretionary spending, the maintenance side of the business remains resilient [70][71] Question: How will increased manufacturing in the U.S. affect margins? - Management stated that bringing more manufacturing to the U.S. will increase utilization rates and potentially enhance margins through automation and variable cost structures [78][81]