Construction Division

Share of Group Net Sales

Construction is a world leader in machinery and diamond tools for the construction and stone industries. The foundation is built on product and technology leadership ensured by high investment levels in user-focused product development to offer professional users the most efficient and powerful solutions. Products and services are ­distributed globally in all relevant sales channels.

Construction includes the Husqvarna brand for construction products and the Diamant Boart brand for the stone industry. Net sales for the division in 2015 amounted to SEK 3.9bn (3.3), equaling 11 percent (10) of total Group sales, which was an increase of 6 percent adjusted for changes in exchange rates. The corresponding operating margin was 11.8 percent (10.6), excluding items affecting comparability.

The division develops, manufactures and sells mainly light construction products for cutting, drilling, grinding, polishing and demolishing concrete, steel and other hard materials. Products include power cutters, demolition robots, drilling equipment, wall and wire saws, floor and tile saws, floor grinding equipment and all related diamond tools. The division also develops, manufactures and sells a full range of diamond tools for the natural stone cutting market. Products are primarily used in the renovation and construction of commercial properties, in infrastructure projects such as highways and bridges, and in the stone industry. They are used exclusively by professionals who demand high-level performance, reliability and superior levels of technical service. Satisfying these demands is crucial for success.

Strong global market positions

The global market for the division’s product range for the ­construction and stone industries is valued at approximately SEK 20bn. The market is fragmented with many small, local ­competitors and a few global suppliers. The Group’s combined global market share in relevant product categories is around 15 percent, with leading positions in several product categories. ­Positions are strongest in power cutters, floor, wall and wire saws as well as multi-wire.

Successful restructuring journey

Construction has completed significant restructuring of its operations since the market downturn in 2009. The brand portfolio has been consolidated to mainly one brand, Husqvarna. Complexity in the product offering has been reduced, acquisitions have been fully integrated and some production has been transferred to China.

Success factors

Operations are founded on offering access to a global service network, distribution through dealers and rental companies as well as direct sales to construction contractors. A high level of investments are made to maintain the widest, most innovative and powerful range of products in the market.

Continued profitable growth

Sales grew for the fifth year in a row. Development in North America was very strong. Construction activity increased and sales also benefited from gains in market share. Sales in Europe also went up, however with disparities in development between certain countries.

Questions for Henric Andersson, President, Construction Division

Operating income and margin Construction

Priorities

  • Continue the journey of profitable growth
  • Expand presence in emerging markets
  • Grow in specific segments such as stone multi-wire and surface preparation
  • Launch a new web platform
  • Invest to consolidate the position as the industry innovation leader

Brands

  • Husqvarna
  • Diamant Boart

Product range

  • Power cutters
  • Floor, tile and masonry saws, wall- and wire saws
  • Drill motors with stands
  • Floor grinding machines
  • Demolition robots
  • Diamond tools for construction and stone industries

End-customers

  • Construction industry: infrastructure projects such as road and bridge construction, renovation and construction of commercial residential properties.
  • Stone industry.

Distribution channels

  • Direct sales to professional end-customers: sawing, floor grinding and demolition contractors.
  • Rental companies that rent equipment to building companies and contractors.
  • Construction dealers and stone processing industry.

Main competitors

  • Hilti
  • STIHL Group
  • Tyrolit
  • Ehwa and Shinhan
  • Skystone