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Husqvarna AB produces outdoor power products. Products include: robotic lawn mowers, chainsaws, handheld petrol-powered products such as clearing saws and trimmers, garden tractors, and lawn mowers. Co. is also engaged in providing consumer watering products, cutting equipment and diamond tools for the construction and stone industries. Co.'s products and solutions are sold via dealers and retailers. Co. has three business areas: Europe & Asia/Pacific and Americas, which provide forest, park and garden products to dealers and retailers in Europe and Asia/Pacific, and in North and Latin America, respectively; and Construction, which provides light construction products and diamond tools.
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The disappointment in the Q2 report was the cessation of growth, caused by a very weak start of the season. However, we are convinced that the long-term growth prospects for especially robotic lawnmowers remains. The next potential trigger is the Capital Markets Day on 17 September, when we expect the company to announce its strategy for 2025 and new financial targets. We keep our BUY but have cut our target price to SEK98 (100), reflecting slightly lower estimates.
We see two potential triggers in the coming months. 1) The Q2 report, due on on 16 July, where we expect a decent quarter despite some challenges. 2) The CMD on 17 September, at which we expect Husqvarna to present a new strategic 5-year plan. At the CMD, we also expect new financial targets and hope to see new robotic lawn care product solutions for professional users. So although we do not expect a strong Q2, we keep our BUY and SEK100 target price with the CMD as our focus.
Item 3: Approve the Remuneration ReportThe remuneration structure is satisfactory, though accelerated vesting is possible. Potential and actual total variable remuneration exceed guidelines, but not very much. They are moderate in comparison with UK market practice. Overall, the quantum during the year was not excessive. We recommend shareholders vote in favor.
Item 3: Approve the Remuneration Report The structure is weighted more heavily towards short-term performance. One of the performance metrics for the LTI is the payment of sustainable dividends, which is not considered appropriate as executives can potentially influence the payout level. The LTI also includes relative TSR as a performance metric. Nevertheless, the quantum is not excessive and even maximum potential amounts are moderate. On balance, we recommend shareholders vote in favor. Item 4: Approve the Remuneration PolicyThe main concern with the Company's remuneration policy is that pa...
Item 2: Approve the Remuneration ReportThe remuneration structure is unsatisfactory. The main concern at the Company is that the potential maximum incentive pay including the bonus, matching shares on the deferred portion of the bonus and the LTI amounts to 1000% of base salary, which is considered grossly excessive. Actual incentive pay during the year was1.6 times the ECGS limit. Furthermore, variable remuneration is overly reliant on a single performance metric, benchmark profit before tax. A second performance criteria will be used in the coming year. We note that the Company has adjusted ...
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