Consumer Brands Division
The Consumer Brands division aims to be the leading forest and garden supplier for the broad mass consumer segments.
Products are sold mainly through retailers such as Lowe’s and Walmart in the US and Castorama and B&Q in Europe. The retail landscape is highly consolidated in North America and competition in the mass consumer segment is fierce with a strong emphasis on price. The estimated addressable market amounts to SEK 70bn, of which more than 60 percent is in North America and slightly less than 30 percent is in Europe.
Leveraging on Group innovation and scale
The Consumer Brands Division has the opportunity to leverage on technology, innovation and scale from other parts of the Group such as the Husqvarna Division. This will allow the division to benefit from new features and technology to keep products and brands relevant and exciting. The division also has an opportunity to leverage on and provide scale in areas such as manufacturing and sourcing, from which the Husqvarna Division can benefit. Leveraging these opportunities effectively will bring advantages over competitors positioned only in the consumer segments. The division also aims to protect the professional focus in other areas of the Group by providing compelling alternatives in the mass consumer segments, thereby preventing competitors from entering the professional segments via a first entry into the consumer segments.
Milestone of break-even result reached in 2016
Given the unsatisfactory financial starting point and headwinds in terms of currency development, the priority in 2015 and 2016 was value before revenue growth, which was reflected in the downturn in sales. The foundation for the financial turnaround is a relentless focus on cost reductions and efficiency improvements across all areas of the division, including direct as well as indirect product and manufacturing costs and logistics costs.
An important milestone was reached in 2016 when the division achieved a break-even result, despite unfavorable currency impacts and a decline in sales. Furthermore, the division aims to achieve gradual mix improvements by exploring new opportunities through new product launches, such as in robotic lawn mowers and battery-powered products, and through improved cross-selling of parts and accessories as well as online sales.