Hello everyone and welcome to the presentation of Husqvarna Group's report for the first quarter of 2025. My name is Johan Andersson, responsible for investor relations, and will be the moderator here today. With me here in Stockholm, I have our CEO, Pavel Hajman, and our CFO, Terry Burke, that will present the report, and afterwards we will open up for a Q&A session. You can ask your questions either over the telephone or you can enter them in the web interface, and we will read them out here in the setting. Thank you very much, and I will hand over to you, Pavel.
Thank you, Johan, and also, of course, a warm welcome from my side as well. You know what? I'd like to start, of course, with the press release that we issued in parallel with our report, where it is announced that I will be stepping down as CEO for the group here by the end of the year. It is so that I have the joy, actually, of turning 60 very soon in a couple of weeks, and I think that the long-term perspective for the group is very important and also to have a long-term view on the management. We are now in the end of the current strategy period, which has been due for five years, and we are in the works of actually developing a new strategy for the coming five-year period, five-year plus. That growth position.
However, group net sales declined by 1% organically, yes, mainly related to the continuing challenge market conditions that we see now in North America for all three divisions, and we also have a decline in the watering and in the construction segments. The group operating income amounted to close to SEK 1.6 billion. This is some SEK 400 million less than last year, and this decline compared with last year is really due to the currency effect, due to the price, and also due to the weak performance in North America. It was partly offset by good results from our cost-saving program of some SEK 200 million plus. Direct operating cash flow improved with around SEK 400 million in this first quarter, and this was driven by better cash flow from payables and from inventory reduction.
Net debt was lowered with SEK 4 billion versus the same period last year, and for robotics and battery, the share of group sales is now 21%, this on a 12-month rolling basis, and it's driven by a strong growth trajectory then, of course, in the robotics and specifically in the boundary wire-free robotics, where our Husqvarna NERA product line and also the professional products really have a leading position. What is also good, and I'd like to highlight talking about the robotics, is that in this quarter we saw that the boundary wire-free NERA products actually amounted to more than 50% of our total robotic sales within the residential segment, and that is a, so to say, a good increase from the 30% that we saw in last year in the sales of residential products. We also continue to expand in the professional robotics.
We have delivered good progress there for our newly launched professional platforms, the mid-size, the 560, 580 models, and we also see a very strong growth actually for the Husqvarna CEORA model also. On a rolling 12-month basis, we are now at SEK 7.5 billion in the robotic sales, so this good development that we've seen in the first quarter has now taken us back to growth, to the overall growth trajectory for robotics to be compared with last year where we were on SEK 7.2 billion on the robotic side. With that overall summary of the quarter, let me pass on to you, Terry, to go through more division-specific information.
Thank you, Pavel. Starting with our largest division, the Husqvarna Forest & Garden division, quarter one delivered an organic growth of 6% and an operating margin of some 13%. As Pavel already referred to, we had strong growth in robotic mowers, and what was good to see here was it was both in the residential segment and also in the professional segment. In addition to the sales growth for robotics, we also enjoyed good sales growth in handheld products, and what was particularly pleasing was a very solid sales growth of professional handheld within the division, which was very good to see. There has been a challenging situation and a significantly lower result in North America. In fact, the North America situation has impacted all three divisions, but clearly here within the Forest & Garden division, negative sales development and a lower operating income.
There were also negative effects from some currency, approximately SEK 100 million negative currency effect for the Forest and Garden division. We had lower price levels with the repositioning of our robotics and overall some negative impacts from the currency and the lower price. Last 12 months, organic sales were relatively flat and an operating margin of 7.5%. Gardena division, a challenging quarter for Gardena division, organic sales declined 9% with an operating margin of 11.1%. There was growth in our robotic mowers. We launched three boundary wire-free models during the start of the year, and that was well received, and we delivered sales growth for the robotics. However, watering both in Europe and North America, sales decreased, and that's really on the back of high inventory levels coming into the season and also cautious retail partners impacting the watering sales.
There was negative volume and mixed impact in the profitability, which was partly offset by the cost savings. On a rolling 12, our sales have declined 9% and an operating margin of 5%. Moving over to Construction, a challenging quarter for Construction as well as Gardena with organic sales decline of 8% and an operating margin of 7.3%. There was sales growth in Europe, which seems to be a continuing trend that we are getting some positive development in Europe. However, likewise, the trend of a continuously negative sales development in North America more than offset that sales growth in Europe, so quite a significant weak North America sales. There was growth for dust extractors and a solid performance in our very important aftermarket business for Construction. With the lower volumes and underutilization that impacted our profitability, and again, that was partly offset by cost savings.
Rolling 12, there is a sales decline organically of -7% and an operating margin of 7.6%. Looking at the Q1 EBIT bridge, we moved from a 13.1% margin last year, quarter one, to a 10.6% margin in quarter one this year. If I start from the left and work our way through, first of all, we have a SEK -255 million, and that was really impacted by mix, and we talked a little bit earlier about the negative impact with watering and construction. It was also impacted by underutilization, and in addition to that, some logistics costs headwind, so that impacted our business by some SEK 255 million. In the next column, you see a negative price development of SEK 150 million. That was really driven by our price repositioning of robotic, and the price that we see here is really all about the robotic price repositioning.
No other real categories were impacted negatively with price. There was a larger part of the negative SEK 150 million was driven by our boundary wire products where we have repositioned the price, but there was also a smaller price adjustment for our boundary wire-free models as well to adjust to the market dynamics and environment. Cost savings, we delivered on track with SEK 210 million cost savings, and our cost saving programs continued to deliver in a very good way. We are on track with our cost saving programs. Transformational initiatives have been reduced, let's say, SEK 30 million in the quarter, but of course, we remain quite cautious in this very difficult, uncertain environment. There is a SEK 140 million currency headwind in the quarter one.
There isn't really a tariff impact this quarter, but it's really driven by the currency, and that is due to the strengthening of the Swedish krona against the U.S. dollar and the euro. This all landed with SEK 1.561 billion of operating income. Moving on, we are actively working to improve our profitability through a number of actions. Of course, we know there are headwinds, we know there are pressures, and we are taking a lot of actions to improve our profitability.
As you can see here, there are six areas that we have been focusing on. Our cost savings program, which I just talked about, we will continue to execute on our cost savings program, and we believe there is another SEK 400 million of savings to come for the rest of this year as we continue to execute those programs. We will continue to offer a simplified product offering.
We made some 10% reduction in our complexity, let's call it a complexity reduction in our product offering. We simplified it some 10% last year, and our ambition is to continue that simplification with another 10% product offering reduction to simplify the range. We have continued to expand our sales offering in omnichannel, and if I use a particular example here, in Forest and Garden division, we are looking for opportunities for further expansion into retail. We are doing some pilot of some 60 stores in Europe retail this year, including Clas Ohlson, Hornbach, Leroy Merlin around the France region, etc., and there we expect to be able to offer our Husqvarna division Aspire range and really broadening our omnichannel. We are always looking for efficiencies and consolidation in our production.
I think Orangeburg divestment was a good example of that, and of course, we will always continue to drive efficiencies in that space. However, we will continue to invest in aftermarket and service. That is very important to us, and we will continue to invest in that highly profitable area. Price increases, we know there's a lot of uncertainty at the moment around tariffs.
Maybe I can come on to the next slide and talk a little bit more about the actions to offset the headwinds that we see with tariff pressures. As we all know, we are living in a highly uncertain world at the moment, and we are continuously working to assess and improve our position within this difficult environment. Things move around quite regularly these days, but of course, we are closely monitoring and measuring how we see this situation playing out with the tariffs.
As it stands at the moment, we do believe there will be an influence in consumer customer demand. I think that's inevitable with the difficult situation, and also with the tariffs, there will be a direct impact to our financial results. Just to try and put it into some kind of context, approximately 2/3 of our sales in the U.S. come from imported product, and that can be from China, Europe, Brazil, so it's really around the world. Around 2/3 of our sales in the U.S. comes from imported products, so there is clearly an impact from tariffs there. Those product segments include professional handheld for both construction, power cutters, etc., and also for Forest and Garden division and professional chainsaws, handheld products, etc. It also impacts floor saws for the construction business and watering with our Gardena/Orbit business in North America.
We are implementing a number of price increases, supplier negotiations, reviewing our supply chain floors, etc., to understand how we can really mitigate the impact of the tariffs, and we have already started to implement some price increases. Others will follow later as we try to mitigate the pressure. Just to kind of wrap up and conclude from a tariff perspective, as I said, there is quite some headwind from the tariffs. We believe, again, it's a moving target, but as the current tariff situation stands, there would be a net exposure of some SEK -300 million-SEK -500 million for the rest of 2025. That's the net amount. The tariff impact is higher, but with all of the mitigating actions, etc., we believe the net impact is some SEK -300 million-SEK -500 million for the rest of the year.
Balance sheet, in summary, I think we maintain and manage a solid balance sheet. We have a solid financial position. A couple of things to really highlight here. Inventory is reduced by SEK 4 billion. If you adjust for currency, it's actually a SEK 3.2 billion inventory reduction year- over- year, so we feel pleased about that, and we will continue to manage our inventory levels in a good way, especially during these uncertain times. We have performed well with our cash flow over the last couple of years, and that has allowed us to also reduce our borrowings, and as you can see here, our borrowings have reduced by more than SEK 2 billion. A very positive development in our financial position. We also completed the sale of the Orangeburg production facility during Q1. Net debt to EBITDA remains at 2.5, which was the same as we ended 2024.
Pavel mentioned it earlier. We managed to reduce our net debt by some SEK 4 billion year- over- year to SEK 13.7 billion, which we feel good about. We will continue to focus in this area, and we are very mindful of the 2.5 net debt to EBITDA. We've lowered our debt, but also at the same time, our EBITDA has reduced, so that is why we have ultimately ended up flat for the quarter. It's the rolling 12, by the way.
Finally, on cash flow, cash flow remains very important to us. We have an improved cash flow situation, SEK 400 million improved cash flow compared to last year, and partly driven by the sale of some inventory from the divestment of Orangeburg to Flex. As I said, cash flow will remain very important to us, and we will monitor this and control this in a good way throughout the year. With that Pavel I will pass back to you.
Thank you, Terry. A couple of words then around our progress on specific products, and first of all, ProRobotics, as I mentioned, continues to grow very well, especially in golf. We grew by double digits in the first quarter with particularly strong sales for our new Husqvarna Automower 560 and 580 EPOS models, and the robotic mowers are now in operation in basically 1/3 of all the golf courses in Sweden and also on several high-level golf courses in Europe as well as the U.S. In the U.S., they have really started the transition from high emission and, let's say, noisy solutions to our battery-driven mowers also.
Our dealer distribution network in the U.S., which we have expanded throughout the year, now basically covers around 90% of the golf course potential in the U.S., and we continue to strengthen that dealer network also even further. Residential NERA, a very successful launch. Our boundary wire-free robots then for the residential customers are also experiencing a double-digit growth, and the sell-in for our newest Husqvarna NERA models has been particularly strong with very good installation rates higher than usual on all the markets. We also see that the Husqvarna Cloud, which is our integrated GPS system with simplified installation and usage basically without reference station, has reached a lot of customers despite the short sales period, and we are actually first on the market with this kind of a solution.
Husqvarna professional irrigation, in North America, we are now strategically entering the professional irrigation market under the Husqvarna brand, and by leveraging the strengths of our recent acquisition, both Orbit earlier and now ETw ater that came in lately, we are really positioned to meet the high demand for various kinds of water preserving solutions on the North American professional market and also potentially over time to actually combine this with professional robotics. Regarding aftermarket and the sales in that area, in quarter one, our parts and accessories business achieved its fifth consecutive quarter of growth, and in 2024, we actually launched a strategic program which was aiming at enhancing the after-sales customer experience and also capturing a larger share of this untapped market that we see in front of us.
This initiative has significantly boosted our aftermarket business and also, of course, extended the longevity of our products and strengthened our relationship both with customers and with the dealers globally. If we move over to sustainability and Sustainovate, you all know that this is a key part of our long-term business strategy. We're making good progress towards achieving the 2025 goals within this agenda and ambition. There are three targets which we focus on. It's relating to carbon, circular, and people. Summarizing quarter one, we have to date reduced our absolute CO2 emissions along the value chain with 56%, meaning that we really maintain our decarbonization journey.
We have, of course, exceeded the 2025 target, which was a reduction of 35% with large margin, and the actual progress in CO2 reduction between quarter four and quarter one remains flat, though, as we have seen a growth in both petrol products as well as in the battery products and the robotic products. As our Sustainovate strategy then extends until 2025, we have now started to explore the various potential scenarios that we have in order to achieve net zero emissions across the value chain in the years going forward. On the circular side, we have added three new circular innovations. We are now at 40, and we are on track to achieve our target of 50. The last three additions to the circular qualification have been the AquaPrecise, the solar-powered irrigation solution from Gardena.
We have then also expanded the boundary wire-free robotics product portfolio, but also now introducing the reference station-free solution, and we have also redesigned the StarCut tree pruner, which now requires less effort of changing the blades and, as such, also qualifying for this. When it comes to our broader target around people and around empowering people to make a sustainable choice, we have further increased this assortment, and overall now, after quarter one, we are now at 4.6 million, let's say, sustainable choices sold, and of course, continuing here towards the 5 million target that we have in the end of 2025. To summarize the quarter, we are closing the first quarter with a strong performance and momentum in the robotics as well as in handheld, and we have the Husqvarna Forest & Garden division back to growth with a 6% growth in the quarter.
We have a disciplined focus on profitability with several cost-saving measures activated, as has been mentioned by Terry this time, but also previously, and we have also started a number of measures implementing to mitigate the impact of the external uncertainties which we are facing now with the tariffs being implemented. Still, of course, the levels are being unclear, but as such, we are acting on this right now. I am also very pleased with the market response and trust for our products and innovations, and again, especially the robotics and the boundary wire free technology that we are offering. With that, I leave it over to you, Johan, then to kick off the Q&A.
Thank you very much, Pavel and Terry. Let's start the Q&A session, and as a reminder, you can either enter your questions via the web interface or do it over the telephone conference. Let's check with the operator if we have any questions over the telephone conference. Please, operator.
Thank you. As a reminder for phone questions, please press star and one on your telephone. We have a first question from Johan Eliason, Kepler Cheuvreux. Please go ahead.
Yeah, hi, this is Johan at Kepler Cheuvreux. Just a question on your tariff update there. You mentioned the categories that you are importing, including professional handheld. I guess that's primarily from Europe into the U.S., and I guess the competitor has a similar setup as you, so no sort of relative better or worse than competition there. Could you indicate floor saws? How does that look? Is it the same from supply from Europe, or are there also some supply from China there? Finally, watering, I guess that's all China, or how should I understand it?
Yes, so Johan, on the question regarding construction and the floor saws, the main competition on these products is being produced in the U.S. by the competitors there. That is, of course, a, so to say, a worse situation for us being importing. We are now looking on quickly moving these products into other factories that we have in low-cost countries and with a much lower tariff also, potentially also over time moving it back to the U.S., but that is, of course, a little bit of a longer process given that we produce similar products in other places than the U.S., and then, of course, the transition is quicker. When it comes to watering, it is actually so that a larger part of Orbit's watering products are being imported from China. However, a very large part of that is actually tariff-exempt as they are classified as agriculture products.
When it comes to the competitor side, then the main competitors on the high-end side, they are producing. Continuing to do that in this year, and that is one of the reasons why we have a negative price effect, as you pointed out, Terry, earlier. The entire negative price effect basically comes out from discounts on certain boundary wire-based models that we are now discounting out to the trade for further discount out to the end users in order, of course, to position us well so that we do not remain with any inventory and with obsolete models as we go forward when the shift to boundary wire will, of course, continue very fast in the coming one to two years.
Good. Thank you. Operator, do we have any further questions on the telephone conference? Please?
We have a question from Gustav Hageus, SEB. Please go ahead.
Thanks. Thanks, operator. Good morning, and thanks for taking my questions. I have a question on the handheld battery side. You mentioned that handheld is doing fairly well within the Husqvarna, but have I understood it correctly that the handheld battery side is declining in the quarter? If so, could you give a rough indication on where you think the market is and where you are in this development? That'd be helpful.
Should I take this one?
Yeah, can you?
Yeah, sure. Battery handheld in the quarter was basically flat sales. We had a small, a very small positive in the professional battery and a very small negative in the residential consumer battery. Gustav, flat is basically the message for the development of sales in battery handheld.
How would you stack that up versus the market, do you think, roughly?
We haven't seen market data yet for quarter one, so it's difficult to judge. At least I haven't seen it to judge, have an opinion on that. We'll have to wait and see till that data becomes available.
What we can say is that during last year, we took market share in the battery space.
Yeah. Okay. I read on the CEO letter here that you seem to be focusing more on professional product offerings going forward. Is this any change of direction, or is this in line with the strategy all along? Can you point to any, you think, initiatives that you might have to improve your efforts in the professional segment?
Yes. No, this is more into the future and a part of our future strategy to really focus on professional across all three divisions. The professional sales is, of course, more even as well as more profitable. It offsets the seasonality that we see on consumer sales. One example of our efforts, for example, then in the Gardena division, is the launch of the Husqvarna watering brand for professional watering, which is building on the acquisition of ETw ater and also building on the existing Orbit sales predominantly into the agricultural space, which they have with their smart controllers. That is one area.
Construction, as you, of course, know and understand, is completely professional. We want, of course, to continue to grow that business both organically as well as inorganically over time, as has been done historically with construction. We need to increase our focus in the forest and garden division based on the robotics, on the pro robotics, but also complementing that with our battery products.
We are in process also of developing wheeled products for professionals, which are electrified, because that will come as well. It will be a combination of both robotics as well as high-energy wheeled products, but those will be electrified going forward. We are moving in that direction as well.
Regarding robotics, you mentioned that there is price. I think everyone has noticed that, that there's price cuts in the legacy categories across the market. I finally think that did I understand it correctly that you've done some price investments also in the boundary wire-free models in Husqvarna? If you could elaborate a bit on why you decided to do so. Are you experiencing some type of heightened competition also in these higher-priced models and the sort of pro-related customers? That would be interesting to get your thoughts on.
Within the existing boundary wire-free models, the price positioning that we have done there relates actually to the entry-level models, the two entry-level models that we now came in for Forest & Garden, which are, so to say, an addition to the assortment. Of course, we have maintained the price positioning for our mid and high-end products.
There has been no price adjustments in those categories?
There can be some. I mean, there is some kind of, sometimes some kind of offering, but not so far a large structural change. No. It has been the adaptation on the lower side, on the lower models, on the entry-level models.
Yeah. Okay. Thank you. Thanks for taking my question.
Thank you very much, Gustav. Do we have any other questions from the telephone conference?
We have a follow-up question from Johan Eliason, Kepler. Please go ahead, sir.
Yeah, I thought maybe you could just comment on what you've seen in the market now in the last few weeks after Liberation Day, so to say. If there's been any visible signs of demand weakness or anything in Europe and North America, for example.
I think when we talk about Liberation Day and remain in the U.S., as Terry pointed out, we see a significant weakness in the American market across all three divisions. We should say, though, that construction basically continues on a similar, let's say, reduced demand level that they have been on earlier since the last six months. It is also a bit more visible now for forest and garden and as well as for Orbit. We do see that competition in some cases are raising prices, which we are also doing, which you elaborated on, Terry. In other cases, they don't do that.
We don't necessarily see any kind of pre-buys yet on our side. That has not increased. It's more a bit of a wait-and-see situation. As for Europe, our selling in Europe on the forest and garden products gives some confidence as to the continuing part of this half year. I think the macro there is both playing to and towards for and against us in certain aspects, because if interest rates continue down on the European side, that is good for consumers, but of course, they might be cautious. You also know, all of you, that Germany lowered their GDP growth now to zero. Germany is a very big market for us. How will this affect the German consumer is a question mark that is still open.
I would say that the opportunities for growth is, of course, better in Europe than what they are in the U.S., but there is a very large uncertainty overall.
Maybe, Pavel, I can just add on to that a little bit. Within Europe for quarter two, we would expect a Gardena watering rebound because we had a very challenging quarter two for Gardena Europe last year. We talked about the historically wet conditions of quarter two last year. Assuming normal weather conditions, then we would expect to see at least an uplift in the watering for Gardena Europe.
Excellent. Thank you for that.
Thank you very much, Johan. Another question here over the web interface coming from Stefan Stjernholm at Handelsbanken. Is it fair to assume a negative price effect in the second quarter due to the robotics price effect that you have now in the first quarter, or have you also started to get positive effects on the price increases you talked about related to the increased tariffs? Can you elaborate a little bit on the pricing there?
I think I would word it this way. If we exclude robotics, I think ultimately prices are pretty flat at this moment. With the tariffs, of course, we will be putting price increases through for the U.S. When we look at the robotics specifically, I think we are, let's say, we have taken the biggest share of the price adjustments into quarter one.
I think there will still continue to be a smaller element of price adjustment for the rest of the year, but at a lower level compared to where we were in Q1.
Maybe to add that how that all plays out as a plus and minus versus the U.S., because the robotics is mainly in Europe, is, of course, a question depending on how the demand will actually look like in the U.S.
Good. Thank you very much. Another question related to tariffs. If you are importing 2/3 of the, so to say, of the products or the representing sales into the U.S. and have production, for instance, in China and so forth, how much can you move around? What initiatives are you doing to try to find other logistic streams to offset part of that?
Yeah. The first thing that we are looking on is, of course, the high volume SKUs that we have for the respective divisions and are looking for alternative production for those. That was also mentioned here on the slide where you, for example, saw the floor saws that have the highest impact for construction, professional handheld for forest and garden. We also have some of the controllers that are being impacted for Gardena/Orbit in the U.S. We are decisively now looking on that. We have manufacturing in other places in the world, which has much lower tariffs than the Chinese tariffs, of course. That is the fastest way to move that production because we have a site, we have the ease of industrialization, and we are actively working on that right now. However, there is, of course, a lead time also on that.
I would say that there is approximately a six-month lead time on that. When it comes to other activities, we are also looking on different kinds of SKUs. Some SKUs are really just simply put on hold and not to be imported into the US. We are also looking on replacing them with other SKUs which have a different tariff level and adjusting, so to say, the configuration of such a product or adjusting the price level of such a product so that we can meet those products that are on hold. Those are other related activities. I do not know, Terry, if you would like to add something to that.
No, and of course, the obvious one, the obvious one of going back to suppliers and renegotiating with our existing suppliers. I think we have to prioritize and we have to make sure we focus on the right things during these months ahead to maximize our mitigation actions. There's a lot of effort and focus going on to this.
Good. Excellent. Operator, do we have any further questions from the telephone conference?
We have a question from Fredrik Ivarsson, ABG. Please go ahead.
Thank you. Hi, t wo questions. First, follow up on what you said, Terry, about the potential rebound within watering. Is this something you have seen already in the first month of Q2, actually?
Obviously, I can't give a lot of guidance on how we see Q2 playing out. I think what I would say is when we talked about the unfavorable weather conditions of last year, that really took effect in the second half of the quarter two.
It was less so in April, beginning of May, but the negative weather really impacted second half of May and June and even July to a certain degree as well. I think it is still a little bit too early to have an opinion on that. Clearly, if we see normal weather conditions or favorable weather conditions, we would expect that Gardena watering rebound in Europe.
Yep. That makes sense. Second question, question on robotics. Obviously, double-digit growth in total, and you mentioned double-digit growth in pro. Did I understand it correctly that residential only grew single digits, so to speak?
No. No. No. Residential robotics grew double-digit.
Good. Thank you.
Excellent. Operator, do we have any further questions with the telephone conference?
There are no more questions at this time.
Good. I think we have one or two left here on the web interface. One is from Danske Bank. We have heard about the potential German infrastructure, big infrastructure program and defense spending. Can that stimulate and can you get any benefits from that, either directly or indirectly?
Yes. Construction has a significant share in general within infrastructure business. Any new infrastructure that is established, whether it is in Germany, Europe, or the U.S., is, of course, a good opportunity for us.
Yes. Absolutely. Maybe a clarification. I think we already have answered this, but just a clarification from you, Terry. The SEK 300 million-SEK 500 million from a tariff impact, is that sales or an EBIT impact?
That is EBIT. That is EBIT impact, just to be clear.
Good. I think we have been through the questions here. Let's see. We just got another one. Yeah. Here's another one from Kai Erik at Arctic. Can you just comment a little bit around the stock levels at your dealers and retailers? To say, what are the inventory levels now when we are kicking off the warm weather and the season here?
Yeah. I would say that overall, it's quite a normalized level. There's been plenty of time for adjustments end of last year and also throughout parts of this year. When we look on the dealer situation, it's fairly normal. When we look on the retailers, overall, the judgment is it's slightly a little bit on the higher side, but not very much. When we look into the, when we look into the American side, again, depending on the divisions, but overall, maybe a little bit on the higher side and people are being careful and trying to get inventory out.
Good. I think we have a final question maybe here for Terry. Can you talk a little bit about your leverage profile and, so to say, your maturity profile on your debt and your view on your credit rating?
Yeah. Overall, I would say our debt maturity profile is rather healthy. More than SEK 10 billion of our debt profile is from 2026 to 2031, if I remember correctly. I think there is nothing out of the ordinary. I think we have a relatively healthy debt profile. That covers that. With regards to our credit rating, of course, we are very mindful of our situation with the credit rating. We continue to monitor the situation. Cash flow, as I've said earlier, is extremely important to us. We continue to drive positive cash flow.
have had two record years of cash flow, and we will continue to drive a strong cash flow this year, whilst at the same time continue to lower our net debt. We have lowered our net debt by SEK 4 billion year- over- year, and we will continue to drive that down.
Good. Just a follow-up from Kai Erik from Arctic again. On the watering stock levels, can you be a bit more specific there? Where do you see them in Europe and in the U.S.?
Europe is more on the normal level, whereas in the U.S., it is slightly below normal.
Okay. Good. Okay. Operator, do we have any further questions over the telephone conference?
There are no more questions from the phone.
Okay. Thank you very much. We have answered all the questions that we have got in also over the web interface.
I think with that, we thank you very much for participating today. Very much welcome you to the annual general meeting that we have in Jönköping next week. We report the second quarter on the 18th of July this summer. Thank you very much for joining today. Thank you.