The global market for the Group's forest, park and garden and construction products is estimated to approximately SEK 145 billion. Europe and North America represent around 85 percent of the global market and the global long-term growth rate is about 2-3 percent per year.
In Europe and North America a significant part of the world's forest, park and garden areas are located. Growth in these markets is mainly driven by the general economic trend and purchasing power of consumers.
There are also large forested areas in South America and, to a certain extent, in Africa and China. Demand in these areas is mainly driven by professional users such as gardeners and park managers since these markets are still less mechanized and consumer demand is significantly lower. These markets are significantly smaller, but their growth rate is higher.
The long-term annual growth rate for the Group's product offering in construction and stone industries has been around 3 percent and demand correlates strongly with activities in the construction industry.
Park and garden products are mainly used during spring and summer, which in the Northern hemisphere implies that sales normally culminates during the second quarter and can be considered over after the third quarter. Demand for forestry products is somewhat higher during the second half of the year than during the first half. The season for watering products is normally shorter and often ends after the second quarter. Demand for forestry products tends to be somewhat higher during the second half of the year, while sales of products for the construction industry are more evenly distributed across the year, normally with the second and third quarters as the strongest. In total the first half of the year usually accounts for around two thirds of the Group's annual sales.
Since the selling season is short and demand also can be impacted by weather conditions, lead times from order to delivery is short. Accordingly, production is often carried out close to the largest markets and a major part of Husqvarna's production is therefore located in Europe and North America.
Husqvarna sells forest, park and garden products to dealers and retailers, which then sell to end-users. Dealers sell to professional users and consumers who demand high levels of performance, which primarily comprises products in the high-price segments. Most dealers also provide service.
Retailers sell products in the low and medium price segments to consumers. Retailers also include Do It Yourself (DIY) stores and supermarkets. Prices and margins are lower than those for dealers.
Products for the construction and stone industry are sold either directly to end-users, such as sawing and drilling contractors and quarry operators, or to rental companies that rent the equipment to end-users, or to dealers who sell to end-users.