Warmly welcome to Husqvarna, everybody. We're fully aware this is quite some effort for you to come here, some time you put into it, and we are really mindful wanting to give you a great experience this day. Hence, also the fairly large share of the agenda that we're going to allocate to being outdoor, seeing things, touching things, interacting with experts on the various topic areas. Of course, there are some inevitable parts which we're going to take care about it. What I would like to do before I get into my presentation is actually to present the team who's going to be presenting, respectively, group management members present, not presenting. Let's start with Glen Instone , our CFO.
Good morning.
Moving over to Sascha Menges.
Good morning.
Husqvarna Brand Division President, Pär Åström. President Gardena Division. Henric Andersson, President of the Construction Division. A little bit difficult for some of you to see, I don't know. I'll move up a bit, so everybody get a chance to see. Anders Johansson, our CTO, who will be at the end of the program. Other GM members present but not presenting is Leigh Dagberg , People and Organization. Quite an important function for us as we have transformed a fair bit. We have Per Eriksson somewhere there at the back, heading Business Development. That's the GM members that are here, and I encourage you to take the opportunity to also interact with them throughout the day. All right, moving over to my presentation. The theme of the day is poised for growth. What's the background for that? Well, whoops, sorry for that.
That was a double click. It's actually some core messages here. It is an attractive market that we're operating in. Quite a significant market, which is also rewarding strong brands and technology in a good way. We have taken quite some considerable investments, adding costs, to build market leadership capabilities, tech leadership capabilities, and we have undergone some quite serious transformations in the period of 2013 to 2019. I'll soon get back to delivering some proof points of that. The next phase, if you look at the strategic priorities, it's going to be a lot about the customer experience. That's not unique for us. Many companies are focusing on that, but we certainly do, and we have looked into that for some few years. We are going to talk a lot about robotics and battery services.
The fourth piece there being the winning core, which we do not normally spend sufficient time talking about. These are significant leadership positions, products with interesting market share positions, as well as profitability generation. We'll try to describe that a bit better for you so you understand the complete P&L and the dynamics of the P&L and what's going on in that sense. To the right, really, I'll talk about that a bit more in detail later, but I think you can simplify it and say we have been through 2 phases. We have been through the profitability phase 1, going from 2013 to end of 2015. Then the phase 2, expansion and profitable growth, which we are just about to round off with the year of 2019. Then the phase 3 is about to start with 2020.
The second phase is really different to the first one in the respect that we were starting to take the efficiency improvements that we were making and put them into cost additions to support and underpin profitable growth for the company and the transformation, and I'll give you some more details about that. The next phase then, starting 2020, we do believe we are positioned to be over average growth, respectively, profitability. If you look at this as a classical matrix, 4 quadrants, we do believe that this is value creation in the right way, being above industry average, both on growth and profitability, and I'll be more explicit about that a bit later. What are then the transformations that we have done that are worth calling out?
Well, it's more than this, but definitely these points deserve to be mentioned and called out, starting with the change of the structure of the organization coming from a one Husqvarna 2013. We changed that for an end customer-based structure. Why did we do that? Well, we wanted to move decision-making closer to the end customers. We wanted to get energy and drive in these entities, and that had been them fully owning the P&L and the balance sheets. A lot of those things, energy, drive, accountability, decision-making closer to customers, that was what was behind it. Really a fundamentally important change for us at the time.
I'm really proud, actually, over the fact that we have managed to build a culture which works with ambitious efficiency program every year and see that as the means to have the financial muscle to invest in strategic initiatives, meaning not investment in respect of CapEx primarily, but cost additions to drive growth activities. Very important. A lot of focus on leading brands, and positions for that sake, and robot just being one of them. Also biting the bullet in respect of areas where we didn't find sufficient attractiveness. The dissolvent of the Consumer Brands Division is definitely such a one. It's always hard because you're really working with it, but you end up spending too much energy on fixing problems rather than working with the value creation in the right way. We came to that conclusion in 2018, as most of you will be aware.
Also, we have done a significant contribution in respect of building capabilities to support the aspiration of a market leader, a tech leader. Give you some proof points of that. All these things have been there with the intent to build market leadership, tech leadership in the market. Let me get to some of the proof points. Brands, core brands. We had 14 brands in 2013, by the way, just everybody realize that. We had two iconic brands, Husqvarna and Gardena. Their share was 65% of the revenues in 2013. Rolling 12, we are at 85%, and that will continue to increase, because as I mentioned, strong brands is one of real key pillars for making success in the market. 85 right now, positioned to continue. Looking at the sales split.
You will see 13, you will see the 12-month rolling to the right, you will see a CAGR rate of 3% adjusting for the Consumer Brands exits. I'm talking about really SEK 1 billion 2017 to 2018. We left a big retailer. Then 2018 to 2019, we are about taking out SEK 1.5 billion as we have communicated, and Glen will talk a bit about what's around the corner as well. SEK two and a half, give and take. 3% currency adjusted is the growth that we have adjusting for those two exits. A lot of focus is being spent on robotics. You see that robotics has had a good trajectory, it's still not the lion's share of what we do.
You also see that parts and accessories is another interesting growth area, and services and solution is combined here and is, of course, very promising for the next phase to come. The big element here is what we call the Winning Core. Again, bits and pieces where we have strong positions and big market shares, important revenue stream, not with the growth rates that you will see up at the top, but still we think growing at the upper level of the market and maybe gaining a bit of share also there, but in a more, let's call it, controlled way. Then you see, of course, the legacy business in gray at the bottom, which we have very consciously declined in this period of time. That will continue, but the largest step is going to be taken 2020 in addition to what we have done.
More to come on that. The focus has been on the high growth segments and the winning core. Those bits and pieces have had 3% of growth currency adjusted for that period of time. There's a lot more. I will get back to the winning core exemplify so you see what I'm referring to really. Moving on as to the proof points, talking about the SEK 1.5 billion of efficiency programs that we have had, that has been translated pretty much one to one into cost additions for strategic initiatives. What areas do we talk about? Well, the big buckets, R&D, brands and marketing, go to market resources. These are the major three things where we have put the money. Again, the important thing is the culture of looking upon this as a way of how we do things. That will not change.
The transformational need just continues. The transformation I'm referring to in this timeframe is not by any means over, we're just in the midst of it will continue every year. This machinery, I think look upon it as a machinery, is hugely important for us to release the funds to continue to invest in areas that are important. Just one view of that is to look at capabilities that we have built up, and we actually added 300 people working with software, IoT, and electronics in this period of time. That's quite significant, and that's supporting, of course, the shift and the leadership that we have as an aspiration. At the same time, going back to the result level here and the profitability, you will see a pretty good development of the margin trajectory. Of course, we had a dent in 2018.
Various reasons, extremely dry quarter three was one of them. There are other aspects as well. As always, there are very few straight lines to heaven. We have a good underlying, I think, direction. There is no reason to expect that to change, but I think it's a fair comment to say also, this period has been a lot about reaching the 10% margin, and then going back to the aspiration for the next phase then wanting to and aspiring to be over the 10%. Some people have asked me whether we see 10% as any magic level. No, of course not. It's just a number among other numbers. The important thing is the trend and the direction here that we're moving with. I want to call out also that if you look at the absolute level of EBIT, it's around SEK 3.7 billion, SEK 3.8 billion now.
We have also in the last three years, 2017, 2018, and then the rolling, well, two and a half years then, absorbed a burden of 800 million SEK in raw materials and tariffs in this P&L. It's not insignificant. Good. Innovation. Innovation is at the core of what we do, and it's a bit fantastic in a certain sense. We are here in Husqvarna. We are celebrating actually 330 years this year. It was founded 1689. That's quite something. Everybody realizes the company has undergone many cycles and phases in this period of time. I think innovation is really a central piece for us.
Whether we look into the residential space like we do on this page with the Automower where we are both the innovator and, I would say, the unrivaled number 1, or whether we look at mobile watering, or for that sake, smart garden being a completely new category that Gardena has built up. We are really setting the innovation pace in these areas, and we are quite proud of that. It is also, if we move over to the professional side, a lot of enhancements and improvements, and also some unique offerings being developed. If you look at the professional handheld, we are globally number 2. What you will see today is also how we have taken, we think, the leadership when it comes to cutting capacity of these things.
We have through the own development of the saw chain, together with the cutting system and some recent models, really set the benchmark of cutting performance, and we will demonstrate that later. What Henric and the team has done in light compaction, talking about concrete floor and surfaces is also a unique offering that you will have the chance to learn a lot more at the demos about. Building together these bits and pieces that used to be discrete, separate entities, is of course a fantastic opportunity for innovation, customer value generation in the next period to come. We could also talk about sawing and drilling as another core area for construction, but you will hear more about that. I do not intend to go deep into the market, but I'll leave you with some kind of aggregated comments.
Oops, sorry, that's the one that's going to cause even more interest, I think, but let's stay with this first. To start with, the market is sizable. We're talking about SEK 250 billion, give and take, of a market. Growth pretty much in line with GDP, 2-3 percentage points. Of course, with pockets of growth that are double digit and where again, we think we are well-positioned to deal with that. You heard me commenting upon that it is a market that rewards both innovation and premium brands. The professional actors ask a lot about productivity improvements, not very surprising, automation, connectivity which of course from a connectivity point of view is equally important for the consumers. Services and solutions starts to emerge as much more important. Of course, since quite some few years back, we have an evolving multichannel landscape.
Let's dig deeper into one of the subsegments here, which represents give and take a quarter of the total market, and that's the residential lawnmowing market. You will see that we have characterized that through three blocks. Squeezed in the middle is the petrol walk behind mowers. You see that they in that segment have lost share in this period of time from 2013 to 2019. You will see in green the robotics and battery-based walk behind equipment, taking a lot of share in this period of time. You will see also ride-on equipment, which is predominantly North America. They have an inclination for that. How is this going to look like in the next few years?
Well, we're trying to give you some idea of that by talking about the current numbers for the next phase to come, the next few years. Robotics and battery, we expect to be around 15%. We have said that before. I just reiterate that number pretty much. Petrol walk behind shrinking, minus two, and ride-on slight growth. That's how we see that. Of course, that's going to change this landscape, and I'm talking residential now. This has nothing to do with professional space and how that will develop. If you allow me to back out from that view and look at the group. Which is really the leverage from the group? Is there a leverage from the group? Why are we a group at all? Why don't we split it up? I think the answer to those questions are pretty much found in this slide.
Starting a bit clockwise with the technology and innovation, it's pretty clear that many of these things do actually cross various segments and divisions, may that be petrol to battery, may that be Internet of Things, may that be AI, may that be, for that sake, how we create data-driven services, experimentation with new business models go to market, or whether that is the way how we look at innovation in a total as part of our DNA as a company. Just to take another trivial dimension, Leigh is sitting here, and when we have our management trainings from the group perspective, it's always the same message back from the people participating. We truly appreciate to also meet people from other divisions to cross-fertilize and to get a broader view. It's also a career opportunity and a learning opportunity.
I would say in many dimensions, there is a true value from the group strength to help the division accelerate their growth, because that's what it's ultimately about. If it doesn't do that, then you can start to question it. We do believe that, and we do see, actually, not only believe, we do see that there is a tangible acceleration component coming from the group strength. Staying a bit up in the larger scheme of things. Sustainability. I think market leadership requires technology leadership. That's uncontroversial. I think maybe in this crowd, maybe not in the world, but in this crowd, I think it's fairly uncontroversial to also say that market leadership requires sustainability leadership. We believe that. In some few years, it's not going to be credible to make a market leadership claim without being a sustainability leader.
We took a stance in 2015 and signed up for the Science-Based Targets, and we were the first company in this industry to be approved by Science-Based Targets, which is quite a steep reduction of the CO2 emissions and greenhouse gases. Far we have done great in that. We're actually ahead of the commitment we took, which was expressed as an intensity target of CO2 reduction with 10% to 2020 from 2015. We are well ahead of that. Just to give another example of what might happen once you set these type of ambitions is renewable energy to our plants, manufacturing facilities was zero in 2015. Now it's 60%. You can really start to move things once you set the tone in the right way. We are proud that we take this leadership in the industry.
I don't think there is any other petrol legacy company who has been approved. Yes, there is a couple of power hand tool actors that are signing up and maybe are becoming approved, but I think with our background, we are pretty much unique in that respect. That's important for us. All those things are said and done. What about the future? How do we look forward? Well, at the core of the strategy is shaping great experiences for our customers, and that's where it will gravitate around in the next phase. Coming back to the illustration here of the trajectory and the quadrant, the growth of the market you heard me talk about, we say it's 2% to 3% average. The profitability, I haven't commented upon.
That one, actually, when we do a volume weighting of public listed companies, non-public companies, where we have a good insight into the P&L, which is then give and take a bunch, a crowd of 20 companies, that really make up the major share here, we come to the conclusion that this is about 9%-10% in that range of EBIT margin. That's where the industry average is. That includes also, by the way, construction, which is somewhat higher compared to the forest and garden space. From that perspective, we feel that we can really increase the ambition in the next period of time here on the growth side to be two percentage point ahead of the market. The 4%-5% is actually just a result of the ambition of being two percentage point ahead of the market, assuming that's 2%-3%.
We all know that's going to vary, but that's the number I think we ask you to bear in mind. That's the determination, and that's where we think we belong for the next phase and have built up momentum and situation to deliver to. If that's the aspiration, then what's the key elements of the strategy? Actually, you saw it on my introductory page when I talked about poised for growth. Back to the customer experiences, services and solutions, the winning core, and also robotics and battery. Where to start then if I make the claim then that this is customer-centric? Well, of course, with the end customer segments. Which are the end customer segments that we focus on then? Let me try to illustrate that a bit for you. Husqvarna Division have three significantly different end customer segments.
We're talking about the tree professionals, we're talking about the green space professionals, and we're talking about the pro grade experts. Being consumers with aspiration to mirror themselves in professional people's selection and choice of equipment, or equally being very much tech-oriented. And that's distinctly different customer groups. Sascha will talk a bit more about how that makes a difference for them going forward. Gardena is all about the passionate gardeners. There are differences there as well, Pär can maybe elaborate on it, let's see. For sure, it's passionate gardeners here at the core. Henric then very much made up out of the four areas of the concrete floor and surfaces, the sawing and drilling demolition robots, which is a little bit its own animal, as well as stone industry, where typically we would do multi-wire cutting with diamonds, et cetera.
Henric can tell you the story of that. These are the end customer segments that we do target. As you know, you will have a halo effect into other areas, but that's more an upside. It's not the target customers. Okay. We know the end customers pretty well. How do we get closer to these end customers? How do we really create more interaction with end customers beyond the classical way of you sell a product, they might appear in three years asking for a spare part? There is a game change, and you know this. The game changer says connectivity. Connectivity, and we dare to say AI will help us get closer to understand these customer groups better and translate that into offerings that are of creating value for them. The data here is of course the critical item.
There's one number on this page which I ask you to take note of, and that's to the bottom left for you. We have more than 300,000 connected products and users today. I don't think you find that anywhere in this space, outside of Husqvarna, actually. We are building up that game-changing capability. Have we utilized it to the right extent yet? No, for sure not, but we will, and we are determined to do that for the next years to come. It's a really important thing, and it goes also into the professional space. This is not only a matter about robot movers being connected, it's also about what you will see with, for example, Henric's products out there being connected, helping them to create productivity for the professional users.
Strategically, very important position that we have built and that we continuously and consciously are expanding for the next period to come. As I was alluding to, very few services will actually be created without building them on this type of data. The connected products forms the base for how to improve the utilization of these products. Of course, the P&A is always a vital cash generation in the services space, and so it will be for us, but you can connect these dots, of course, to enhance the P&A revenue stream as well by these services. Everything as a service trend, other business models, yes, they are definitely coming. We are experimenting. You saw the Battery Box a couple of years ago in Bromma, which was a test where you could rent over the mobile phone a battery-based tool for a day with protective equipment.
We have taken a small stake in a company in the U.S. which is seeing franchising a robot as a service, as a business idea. I would say that's maybe more on the experimental side. Ecosystem-wise, GARDENA smart system is really interesting and has a tremendous attraction among a lot of other tech companies. Pär will get back to that. Traditional services, of course, like Henric's UpCare service contracts, the investment we have done in the fleet management software, helping Husqvarna to transform from being a product provider to a business development partner to these professional actors. May that be construction space, may that be in the green space professionals. To the right on the bottom here, you have Gardena myGarden. People spend on average 50 minutes in this app, which is, I think, quite amazing. I think Pär has something like 60,000 gardens there.
Why are we interested in that? Because if we get the people to think about how to position the sprinklers and the smart garden system, et cetera, from the very beginning, that's a very good entry for moving forward. In a prolongation, this can be a piece of some larger type of services-oriented structure. For the moment being, we use it to get them into the right way of mindset there. These are just examples. We're going to do a lot more and encourage you to also speak with these people throughout the day on this topic. Winning core. What is the winning core? Typically, we're talking about mobile watering, hand tools on the Gardena side, the power cutters, different other type of equipment from them. Collect riders is a fairly good margin product. You saw also the handheld professional equipment.
These are the type of positions we are referring to when we talk about the winning core, if you recall, being more than 50% of the sales. That's an important piece for us. This is about, for us here, about leveraging the strong brands and the leadership positions in these areas. It's also about continue to invest to bring relevant innovation. This is not about milking the cows, so to say, and the positions. No, it's about enhancing these offerings to continue to be competitive and attractive, and we are doing that, and you will see examples of it. It's also about capturing the fair share of the P&A, which has not been something we've been particularly good at historically, because we wanted to innovate, and the spare parts, who cares? That was little bit where we are coming from.
We were a bit negligent on that side, and of course, that's an opportunity to enhance the profitability going forward. Important positions, market shares, profitability generation for us going forward. It's hard for me to stand here without saying something more specific about the robotics, and I intend to do that. That's a beautiful picture, isn't it, by the way? Isn't it? You see the Red Dot, the Design Award to the bottom left. It's a little bit car-like, this product, and you wonder whether it's a good functionality of those lights, and I think the answer is no, it's not really, but it's pretty cool. People like it. Anyway, getting more to the substance of this space. For the first time, we actually have stated a number of this residential robot market, and we say it's SEK 7 billion, give and take.
That's the size of it. You heard me say before that it's growing with about 15%. Here you have a couple of poles in the ground for the future. We are a clear market leader. We have actually sold more than 2 million, or about I should say 2 million units, which is by far unrivaled. It's a pretty strong product pipeline on top of that. Of course, we are battling geographic expansion, where North America is maybe the most significant one to come, and that's back to Sascha to elaborate further on in the afternoon. That's residential. It's also so that we are starting increasingly to look over the fence into the professional space. We've done that for a couple of years, it's not about just building products and bringing products to the market.
It's about technology, it's about other components. Let us first listen to some few testimonies from that space.
This area, in particular, we'd normally cut with a cylinder mower, and it's not an easy site to get to, so it's all time-consuming. Whereas with the robotic mower, set it up and off it goes.
The gardens here are very busy. We've seen a real benefit with the Automower not disturbing people when they're sitting having their lunch. Normally we would have to stop cutting in these busy periods.
The advantages of installing a robot are that we get new customers and new partners. At the moment, we only have positive feedback, very good feedback, and with a growth in installations that will continue to grow in the years to come. We have been installing robots for exactly three years, we are almost doubling the number of robot installations every year.
We started here in München-Brunnthal at the Dreiloch practice green by installing seven Automowers and three power stations to supply the Automowers. After almost six months, we have to say that everyone is totally convinced. Starting with the greenkeeper, who should certainly know best, right through to our management and customers, the feedback has been consistently positive. The quality on the practice green is top.
That's just three testimonies. We could make that a lot longer, but for the sake of efficient time, we save it because it's pretty much the same message you will get. I also been personally out to meet some of these users. We have them around Stockholm as well, and their testimonies are very uniform on this side. They're very upbeat about it. One of the fears I had personally was that the employees of these landscaping companies would feel a bit threatened, but actually they say, "No, this is great. I don't have to do the bulk job of moving around and cutting the lawn, and now I can do a bit of trimming and make the visions of the whole park look a lot better." They seem to be, at this stage, also upbeat about it. Again, it's not only about products.
This is really about products, and you will hear more about technology soon, but it's also about tools helping them manage a continuity of products, a fleet of products in an efficient way. To be, over the smartphone, being able to see the status of those movers, how many of them are actually moving, where are they, et cetera, from a location point of view. It's also about accepting that if we're going to move the needle in this space, we need to build up the sales resources direct to deal with this. The dealer structure is good to support maintaining a business, but the acquisition is something we need to do on our own to a large extent.
We also are working to have some of our dealers to become more specifically targeting the pro space because there are different expectations from these people as to responsiveness, parts deliveries, all those type of things. These are the components, and what we're adding now and that you will have the opportunity to see in the outdoor demonstrations is new technology, which we then call virtual boundary. We're building that on, of course, the legacy of 25 years of experience being the innovator in this space. It solves vital problems for these people, because if you have a residential garden, it pretty much stays as is. You might do modifications, et cetera. You might move flowerbeds. These people, they might need to have a multiple type of area use, flexibility in need of use. That's something we are bringing to the market.
I think I have a short video to show on that topic. That's going to be out there next year, this technology. Again, targeting the professional space. We're not looking primarily, for this period of time, to the residential. That's also going to be there one of these days, but not for 2020. At some later occasion. We start where it really makes a difference with this type of technology. It's great for us because, if you recall, we took an innovation step beginning of this year when we launched a four-wheel drive product, and you will see that later as well. Now we take this innovation step. You see Husqvarna really has the aspiration to lead in this space.
I would say we are determined to explore, because there is a bit, an element of disrupting opportunity in the professional space for us if we act and move. Sascha will talk a bit about how the financials for this green space professional looks like and what we can do to help them improve that. For now, I'm through with my part. Poised for Growth is the theme, and was the theme of my presentation. Hope you got some vibrations from that. Now Glen Instone is going to elaborate a bit further on the value creation, and the financials. Glen, please.
Thank you, Kai. Good morning, welcome to Capital Markets Day 2019 from my side. Understand it's been an early start for some. Is my mic working? 6:00 A.M. start. All that stands between some fresh air, now here's some financial targets and some value creation discussions. Hopefully it's building. Here we go. If we talk about, I think we need to recap some of the phases that Kai talked about earlier, the journey we've been on before we get into the future here. If we go back to 2013, we had a 5.3% operating margin, we really had a phase there, we wanted to talk about profitability first. The efficiency program, which is very much externally communicated, was about adding profitability in that phase.
In the phase 2016 to 2019, as Kai said, it's really been an efficiency program to finance the transformational journey, and that will continue. Very much a one for one as the balancing picture showed from Kai. The next phase, as we said, is really about taking the curve even more, operating in the top right quadrant, above industry growth and above industry profitability. If we look at the value creation story of the Husqvarna Group as we see it's been talked about already today, we have leading brands and we have leading market positions. We showed there we have either number one or number two position. We are the inventor in many segments where we operate. We are operating in segments where we see 2%-3% growth.
That's not bad, that's historical growth rates that we're seeing, that's what we see going forward as well. Above that, we see pockets where it might be even higher. We are a tech leader. I think we've proved that. You've seen it in the last video, certainly. You'll see more of it outside in the demonstration areas. We are a tech leader and innovation leader. Also, Kai started to elaborate on it, the divisional presidents will go into a bit more detail, we are of course taking the step into the service and solution area. Hardware to software, products to services. We've taken that step, we have many good examples. UpCare, you saw the Fleet Services, the Garden Planner, so on and so forth. However, I don't think I should probably sit down without talking about maybe the opportunities we see.
Let's look at those opportunities. To really support the financial or the strategic intent, the strategic focus areas we have, what will be the financial focus areas that we will look at in this group? I think we should just keep this fairly simple, and we're not really changing here. It is about the growth journey and the growth opportunity. It's about the profit opportunity, and it's about the capital efficiency. We take each in turn, and we try to build upon each of them and see the steps we foresee in the next phase. Before we get there, I think we just need to back out a little bit and talk about the seasonality of this group. It's highly predictable. We are a seasonal business. We are in a seasonal business. We operate in a seasonal industry. That's highly predictable.
The piece that is not is the weather. We can't get stuck there. It's highly predictable. The weather is less so. If you look at this. We actually have two-thirds of our revenues are coming in the first half year, and 95% of our earnings coming in the first half year. The same chart was shown 3 years ago at the Capital Markets Day in Stockholm, and it looked a little different actually. The Q4 losses in that period was actually double digits. We had about 11% of our annual income was lost in the fourth quarter, and was actually a break-even second half year. You'll see in the last, certainly last 3 years, we've managed to balance this a little bit more than we have in the past. Still a loss in the fourth quarter, actually we do make a positive contribution in the second half.
I should note, and Henric might elaborate a bit more later, of course, Construction is much less seasonal, much more cyclical than seasonal, and doesn't really follow the same curve as the Group curve. Moving into the opportunities, as I said, and the growth opportunities. We have, of course, the starting point, and then we should build this with the exit positions. In 2018, we made a very clear statement that we would exit the low profitability segments, to focus on the more value-creating segments for us. You may recall in 2018, we actually exited a rather large account in the U.S. That was roughly SEK 1 billion, that magnitude. In 2019, the exited position we've guided on roughly SEK 1.5 billion-2 billion. I would say it's at the lower end of that spectrum.
One and a half will be the exits for 2019. We then expect to conclude the most of those exits in 2020. We previously said SEK 1 billion-1.5 billion. I'd actually say we're a bit the higher end of that spectrum. In that period, we managed to exit roughly SEK 4 billion, and that was very much the guidance we give you back in 2018. Of course, heritage, the winning core. We showed many examples, the power cutters, the professional chainsaws, the mobile watering, et cetera. That is really our heritage. We expect this part of our business to grow at least in line with the industry. We talked about industry growth of 2%-3%. We would say we should be, with our leading brands, at the top end of that range. Roughly a 3% growth we expect in the winning core segments.
Of course, battery and robotics, which we spend a lot of time on. You see some great products at the back of the room, and we'll see more great products during the day. This will be the biggest growth item in the coming phase, in the next phase. Kai talked about a midterm, a next phase CAGR of 15%, and that's very much where we expect to operate, both ourselves, of course, in line with the market. The other one, which we've talked about a lot, of course, already today, the service and solution opportunity. We have, first and foremost, there's an installed base there, and where we have an installed base of, let me say, 20 or 25%, we probably have half of that when it comes to our P&A. We have a fair share entitlement, which we can get on the P&A side.
On top of that, of course, we have the new solutions, which you'll see a lot of during the day and certainly in the divisional presentations. This will take us, we feel, in this next phase, to an average CAGR, as described, of two points above the market, two percentage points above the market, 4%-5%. I should say, the gray box there, the final majority of the exits will come in 2020. Maybe on the curve, there'll be a slightly lower CAGR in 2020, including exits. The 4%-5% is fully inclusive of exits. You see a slightly higher end of the range, of course, in the years beyond 2020. That's where we feel we can operate. If we look at the margin opportunity next, we've come a long way, as said, 2013, 5.3%.
Building it, 2017, 9.6%, now we're back on that profitability trajectory on the positive curve. 8.9% is where we stand at the end of the first half year. How do we see this developing now going forward? Of course, we have invested a lot. We talked about the investments in the last two and a half, three-year period, SEK 1.5 billion of that magnitude. That, of course, will start reaping benefits and rewards, that transformational journey we're taking, and that will drive an improved mix and, of course, an improved volume as described. Pricing is also very important to us in that we need to take a leadership position in pricing. We need to price. We have great products. We have great brands, so we can take a leadership position in pricing.
That has come through very strongly in 2019. We expect pricing will be an important part of our journey going forward, too. The efficiency programs and the transformation journey, as said, we've showed a very good balance here in the past three years. First phase, adding profitability, 2016 to 2019, balancing the investments and the savings. If we look at that. Kai mentioned it. What are we investing in? What is the transformation journey? Simply put, it's R&D in products and services. It's brand, two strong brands, and it's go to market. That is where we're investing roughly magnitude SEK 1.5 billion in the past three years. We expect to continue that transformation journey. However, that has got to be financed.
I hope we've proven in the past 3 years or the past 6 years actually, that we do have a strong history of profitability improvement through efficiency programs and our ability to finance that transformation journey. That will continue now in the coming phase. Final piece, of course, we are moving into new areas, new solutions, new business models. New experimentation even. Kai mentioned some examples. In this phase, that will likely be EBIT margin dilutive because we need to build it up. It doesn't come one for one. We need to build it up. We need to invest. We're very mindful that the buildup phase could well be EBIT margin dilutive. Again, it's the right thing to do because in the phase beyond, then of course, that is where a lot of the growth will come.
If we look at the constituents now of these four areas we put together, this is where we see in the next phase, starting in 2020, already from next year, that we will operate in the top right quadrant, i.e., above industry, above the 10% operating margin. As well as investing, of course, into the transformation, it hurts or impacts the P&L, the OpEx investments. Of course, we have some significant CapEx investments. Again, a little bit backing out from where we are today. If we look at 2013, our CapEx levels were SEK 1.1 billion of that magnitude. Today, we're SEK 2.2 billion, SEK 2.3 billion. That's a heavy increase. We actually see it as a very healthy increase. We've been investing in the right areas. Roughly, big increase, 5.3% of our revenues, 5.3%, 5.4% of our revenues is into CapEx.
Within that figure, we have roughly a third is actually capitalization of R&D, of software, of services. Again, I think good, healthy metric of where we've been investing in recent years. The other side of the chart here is an area we need to certainly improve upon. Our capital efficiency. We set a clear target three years ago. We thought we should have a maximum of 25% working capital to net sales. Of course, we're very seasonal. In Q4, we tend to come down somewhere near that figure. We want this 25%. We want to operate beneath that level. This is an area that we're going to focus a lot more on. We have to work on our S&OP processes, our sales and order processing, our complexity reduction, and really take some noise out of the system, if you like.
A key area for us looking forward. If we look at maybe some of the headroom or the opportunities we see going forward. The balance sheets that we have, our net debt/EBITDA ratio, we are sitting in the 1.8, 1.9 level. We are a triple B investment grade, and we'd like to work within that and retain that investment grading. I think looking at this, it shows we've got actually some headroom to operate should the right acquisitions come along. We've proven some acquisitions in the past two to three years, particularly in Henric's space. I think we have significant headroom should the right acquisition opportunities come along. At the same time, I don't think we're going to get away from today without someone asking the question about a downturn. Maybe if you weren't going to ask, now you're going to.
Of course, if there is a downturn, this also gives us, we are in a good position should there be a downturn from our balance sheet perspective. We can take some more questions on that in the Q&A next. From a shareholder perspective, from an equity perspective, how does it look? How's the journey been since 2013, 2014? I think it's been pretty good. More than a factor two versus the market. I think that's reasonable or maybe pretty good. From a shareholder return perspective, I think we're proving the value creation story of this group. As said, we have a lot more to do. We still have a lot of opportunities, a lot more value creation to add. Certainly in this phase, I think we've proven quite a success story. To summarize and finalize the financial targets, maybe into a single page.
These are the targets we will operate with in the next phase, starting 2020. Sales growth, two points above the market, expected to be two to three, therefore 4%-5% growth. An EBIT margin above 10%.
From 2020, we'll operate above 10%. That is our firm expectation. Working capital, of course, it will take some time. It does not turn in a single year, but this has got to be a firm metric that we're going to work within. We've got to free up the cash, particularly on the inventory side, to invest back into the cool things, the things you're going to see outside later today. Last but certainly not least, of course, the capital allocation. First and foremost, we have shareholders who would like to continue paying a strong dividend. The policy is 40% of operating income. Yes, it will be decided at the AGM each year, but it's our intent that we continue with a strong dividend policy, and we maintain our Triple B investment grade.
With that, I will invite Kai back on stage to summarize before we open up for some questions.
I think we save ourselves the summary for now. I just put on the slide of the Poised for Growth. We can get back to it, but I'd rather get into the Q&A so we safeguard sufficient time outdoor, which is going to be such an important piece.
Great. Let's start the Q&A, and wait for the microphone, and when you have got the microphone, please say your name and company name, and then we can ask the question. We have one here in the front. Björn?
Thank you. Björn Enarson, Danske Bank. Can you give us some comments on the margin target again, and what kind of discussion you had internally before taking the decision to reiterate it? You are in a pretty quick pace leaving an area which has previously at least been loss-making, and now we are looking at the very same EBIT margin target. Does it cost more to grow than you expected, or is it the fact that you are upping your growth ambitions that is behind this?
If I start, I've tried to make reasonably clear that we are undergoing quite a significant transformation. That transformation is just going to continue for the next period of time. There is a cost element to it which is not insignificant, and we see building the competitiveness over time as the priority here. In that respect, I think you should see it. Still, if you go back to the EBIT margin trajectory, even though the dent in 2018, it's still a pretty good curve. You can choose to look at this in different ways, but in our view, the phase up until the end of 2019 has been about getting to about 10. Now we want to be above and continuous improvements. Exactly how that is going to unfold, that's very difficult to predict.
That we have the momentum to continue the journey from a margin perspective, also based on the growth aspiration, that's no question. I don't know if that answers your question though, Björn.
Yeah, sure. Are there anything in the market that is different now? If you take the robotics as an example, it is still a pretty new market, although you have been very active for many, many years. We're, I guess, seeing a lot of more competition, et cetera. Is that something that is impacting the mix in the market in a certain way or pricing?
That deserves some elaboration because if you look at dealer channel, pricing is fairly stable. Higher specs for sure, of course, there is a price/margin pressure from the retail space. The leader in the retail is Gardena brand. Fairly stable prices, of course, there is an emphasis on lower specified products in the market, which means we probably need to meet that in one or the other way with different specifications. From a volume perspective, the quickest growth is in the lower price points, but we aim at being, so to say, a premium provider irrespective of channel. Yes, there is some impact, of course, inevitably, but through innovation, we can try to balance that.
I think we have done that in a successful way this year, and we have also, I dare to say, kept the shares in the retail channel respectively the dealers' channel. So far, we're playing out in the right way. Of course, there's a lot of flies around the sugar, as you realize, and there are at least 20 people offering products out there, so it will be contested. The pace of innovation and the right spec for the right price point in the retail predominantly is going to be important, and then drive innovation on the other side. You will also hear Per talk about how the smart garden plays into the hands of Gardena, where all the products actually are enabled for the smart garden, which is a value in itself.
There are ways to work around this, but I don't know if you got much wiser on that explanation, but at least it helps you to understand how we see it currently.
Thank you.
Many thanks. Do we have any other question? We have one question there. Please state your name and company. Yeah, go on.
Hi, Carl-Oscar Bredengen from Berenberg. I just have a quick question related to the growth of robotic lawn mowers, because it appears that it has been guided for 20% growth, whereas now the intermediate growth rate has been somewhat revised down. Is this more of a lag in the battery space, or is it because you see more competition in the retail space going forward? I'm a bit surprised given the fact that with the launch of a boundaryless solution to the professional segment, I would have, in theory, anticipated high growth.
There is a couple of big pieces here that's going to move the needle one or the other way. I will start in the residential even before getting into the professional. That's the EU expansion in North America. America being the largest lawn mowing market in the world. What happens there is going to set the pace for the whole category as such. We went in there with quite some ambition, but I want Sascha to talk a bit more about this and not me ending up making all those points here. We have been on a doubling rate, let me say that, 2019 versus 2018. Yes, we aspire to be quicker, but on the other hand, the trajectories of development has been somewhat similar also in European markets before it actually reached the point of, if you call it inflection, but higher growth.
I don't think we should read too much into it. It takes time to establish a new category. We have so far pretty much been on our own in any significance in the North American market to take on the category. That's the biggest piece that's going to change this number with some few percentage point, and then comes, of course, the professional opportunity. For us, it's so important to bring the right experience and convince these users. It's not about from zero to 100. We're going to turn this valve stepwise up so we are on top of it, making sure that all these people are going to have good experiences with their Husqvarna in that space. Short term, U.S.
Another question here in the front from Kari.
Yes. Thank you, Kari with Danske Bank, and sorry to come back to the margin question. Thanks for the clarification for 2020. If we look at 2021, since you will leave SEK 2 billion of low margin business next year, and you have growth rate that is roughly almost twice the industry average. Why is your margin premium so small that you indicated? If the industry average is 9%-10%, why wouldn't you have clearly higher in 2021?
I think just to clarify that we will exit, let's work on SEK one and a half billion as a guidance for next year, of loss-making business or very low margin business. That will have a positive margin effect next year, no doubt. You're right, the remaining growth should be at a higher run rate, and therefore there should be an increment. I don't want us to forget that we are in the transformation stage in building up the new business models and new solutions areas. That does have an investment element that we feel is the right thing to do. Are we still going to be above the 10%? We firmly believe yes. We shouldn't underestimate the transformational element within that, particularly the new business areas.
Maybe a follow-up on that. These growth initiatives, you have some extra complexity now when you have both hand or battery-driven devices, as well as the old-fashioned devices, and you have quite complete assortments of both. What other examples can you give us that add to the near-term costs and complexity that then over time will turn into better margins?
Want to start?
Smart is a big area for us.
Yeah
which Per will touch upon a lot, but of course, we're investing a lot in the smart area. It's much more than just putting robotic lawn mowing and irrigation together. Again, I won't steal that from Per, but that will be something we'll show.
The whole area of services in the total, how we are going to create that database-driven services and expand that. How do we start to utilize the 300,000 connected products and users in the right way more than, sort of say, doing trivial things and really creating value. That is an investment. AI, which is a fantastic opportunity for everybody in this room, probably in various ways. Naturally, that also for us may that be also back to the production. This is not only a customer issue, it's also investments in the back end in automating production, taking the benefits. In the buildup phase, it is a character alike of investment. I think there are many examples, actually. If we just stay with the professionals that we talked about, we will need to build that direct sales force to acquire these customers. We will have others supporting.
There are numerous examples as we proceed through it of that. I think that it is a lot of technology, a lot of dynamics, and we need to have the ability and the headroom to deal with that. If we just deliver all the margin to the market, so to say, we will be unnecessarily exposed. I think we are better off building the competitiveness in a structured way. Yes, we do believe in a continuous improvement of the margin. There's no reason to expect that the one we looked at earlier will not continue. Again, 10 is just a number on that trajectory, no more, no less. I think that's how you should read us, interpret us, and why we refrain from talking 12% year so and so.
Fair enough. Thank you.
Okay. We had another question here in the front. Johan.
Sorry for banging on about the margin here, but would you consider, you say you want to be about 10%? Is that a weatherproof margin going forward? Can you maybe talk about 2018, obviously, partly impacted by the business you left, but also impacted by some weather? What are the levers for you to sort of make your margin weatherproof going forward?
Let's start.
The other topic, whether in the longer term, how do you see potential global warming impacting you and your business opportunity, your growth ambitions, and margins going forward?
If I start on the weatherproofing, so to speak. If we look at 2018, and again, it may be a word we don't like to talk a lot about the weather, because then we're talking every quarter. 2018 was, if I take the weather out, we really had headwinds from raw materials and from logistics.
That was really the burden we took last year into the earnings. From a weatherproofing, of course, we have two fairly hedged divisions, and that when Sascha's division is maybe feeling a pressure from weather, then Pär's is feeling a positivity. I feel the 10% is somewhat weather-proofed in that respect because of the two divisions we have operating, and of course Henric's being significantly different and non-weather related. Does that answer? I feel we are. We feel we are.
No, that's what I wanted to hear.
So the-
Second question.
Was there a comment to the first part? No. The other question, looking at climate impact on our business over the medium, longer term. I think we have reason to anticipate that. Of course, business models can play into our favor if we start to create, for example, lawn mowing as a service, subscription models, et cetera. I think we need to work with that, but we also do need to work to become more resilient versus those things. You have seen how we have reduced the losses in quarter four, but we need to move way beyond that thought process. Actually, we're starting in the group management to discuss around this topic.
There are some evolving ideas, but it's to leave the defensive corner of saying, "Oh, this is a huge problem for us." Yes, at first sight, for sure it's a huge problem. The real thing here is to say, "Okay, how do we really look for the opportunities in this climate change that is taking place?" I think we're moving in there. I'm sorry, Johan, I will not be specific here now. I can promise you that that's something that we are discussing and making quite some thoughts around to be more resilient and actually move from defensive to opportunity side of it. You always have those two sides, whether you are proactive or reactive. We want to be in the proactive corner. We are moving in that direction, at least.
Great. I think we have one question in the back. Christer?
Christer Magnergård from DNB. Firstly, a question on the sales targets. You say 4%-5%. You say net sales, but do I understand right that that's an organic sales targets? On acquisitions, what kind of pace should we expect over the next coming years? Is it similar to what we saw for construction in 2017, 2018, or slow pace?
I think you know the distance story pretty well. If you look at the opportunities in the market, the construction is providing the most targets, so it's most likely to come to fruition. On the other hand, I've told some of you that in previous discussions, let's also be mindful about that fairly small, insignificant tech co-ops or acquisitions can be game changing. Back to Gardena, 2014, when they acquired Koubachi, 10 people. Great at IoT, which in 2014 was not everywhere, that ability. That was the basis to create the smart garden that came two years later, 2016. I think with the right type of partnerships, I don't only want to leave you with the thought that we need to acquire everything. We need to have the right partnerships.
Anders Johansson is going to talk a bit about that because we have really moved out into the world and the communities of startups and tech hubs, and are pretty well connected today. I think we are looking at a somewhat different game to some extent, which is important.
Okay. In terms of the virtual boundary robots on the professional side, you highlight golf courses and some applications where you haven't been before. What kind of addressable market do you think that this product has in 10 years' time or 15 years' time or so?
You don't need to go to 15 years. I think the addressable market in five, seven years is going to be way above residential market, which is a quarter of the forest and garden market. It's huge, the professional space. And you will hear Sascha talk more about the mechanics of it. I want to avoid getting into that here now. Christer, it's a huge opportunity.
Are you also thinking about changing how you sell the product in terms of instead of just selling the product, having more leasing rental solutions to get more stability in earnings going forward?
Absolutely. Something we've actually started in several countries. That is an option, and we have to accelerate that. I think it's becoming the norm in this day and age. To answer your question, absolutely.
Finally, on the consumer side, you mentioned the SEK 7 billion total markets. You previously said that you have roughly 50% market share in terms of the value of the market. Is that still valid?
Give or take. It's a very solid number. Yes.
Thank you, and continue with us.
Thank you very much. I think we had one question here in the middle. Oh, okay. You can take Olof first. Sorry, Olof.
Thank you. Olof Cederholm with ABG. Just two very quick questions, I think. First, just to clarify, a successful launch in North America and the professional segment for robotics, those are not included in the 45% target?
I wouldn't frame it that there are so many ups and downs in the overall scheme of things. I think you can assume a certain growth rate for North America. It's not a hit in North America to get there. If you have a hit in North America, it's going to look different.
Fine. On cyclicality, Glen was talking about a downturn, and sounded like you wanted a question about it as well.
I asked for that, didn't I?
Can we talk about robotics here? Do you think that segment is more cyclical than the general market and the rest of your business? Should we worry about this? Should there be a downturn?
Maybe I start, Kai. Maybe we best look back at the last downturn, 2008, 2009, where we took maybe an 8% drop in the revenues. It's very different between the residential side, the consumer space, and the professional space. I think 3% on the consumer side and 17% on the pro. I think that's a good proxy that the consumer side of the business is probably less affected when it comes to the cyclicality of a downturn. That said, given the higher investment in a robotics product, maybe that could be somewhat affected. Is it as low as a normal consumer product, or is it somewhere towards a professional? I don't think it's at the higher end of that. It's probably not as limited as three percentage points.
We're probably somewhere in between there, and if a downturn comes, then, of course, we'd expect an impact from the top line, no doubt.
I think, again, on the innovation side, subscription models, other things need to start to become important, and then people look at it in a different way.
Great. Thank you very much, Olaf. We had one question just in front of you as well there. Perfect, thanks.
Yes. Henrik Nilsson from Carnegie. A question on the capital efficiency and net working capital to sales target of below 25%. You had that target for some while, and there hasn't been much progress so far. What is going to change going forward, and can you give some concrete examples of inefficiencies or things you want to do to get that down to below 25%?
Should I start?
You're more than welcome, Kai.
I think what we're trying to do, you heard Glen talking about the Sales and Operations Planning process. I think what we're doing, being so seasonal as we are, we need to be the world champions in Sales and Operations Planning. We need to really tie together the supply chain from the demand planning into the inventory planning and suppliers. We have invested into system support that should help us do that in a much more efficient way. We can't really allow people to sit with Excel sheets and have their own view of reality. You need to sync the whole in real time, and that has been installed the last few years as, by the way, one of the efforts within strategic initiatives. That I think is at the core.
Of course, you need to do the basics, which is go through the lead times of the whole supply chain and what's really critical in that whole range of products, which are the ones we are not allowing to be a limit from a lead time point of view. What do we need to do different? Maybe we need to change sourcing in some examples. Maybe we need to work with the range because lead time and range are two levers beyond the process aspects here. There is also an element of complexity in respect of bets you do on the expectation of the season unfolding with a certain weather pattern. Last year, it's not hard to guess that we were sitting with a lot of excess inventory as a consequence, in Northern Europe, of that situation we had, for example.
That kind of causes knock-on effects for some quarters to come. There are one-off situations, but fundamentally, we need to get better at what we're doing, being so exposed in a seasonality which is predictable.
Just to follow up on that, Glen, you said we shouldn't expect any major results from that in the coming year. When would you expect to see results of this?
I think if you look at where we are at the end of Q2, more like a 27% level, I think it'd be naive to say we're suddenly going to hit 25% immediately. I think it's going to be a somewhat slower turn down to that. Would I say we're there at the end of 2020? I would hope so. 2021, absolutely.
Falcon circling for days. Always firing. Up another scent. Following the stream so carefully. Trying to find another piece of the map. They were just fields out west. Last week the falcon came. Ten degrees and only rain. It came so quickly. You were laying out in the shade. Trying not to be replaced. Nothing ever runs smooth. You've got to live with the bundle of triggers in you. I try to get us to Insta then. To tear you up again. Never get it right. Eating easy, getting closer. No, I could never dance like this.
Did you feel the passion?
Yes.
Did you get some goosebumps? I've seen this movie probably 100 times. I still get them because it shows what we are about making it a better workday for our professional users in the tree care space. More broadly, how do we create the right customer experience for our customers with the Husqvarna brand? This is what I'm going to talk about now for the next 20 minutes. I'm proud to be here. It was mentioned earlier already that as the Husqvarna brand, we're actually celebrating 330 years of history, of proud history. It was actually more or less at this place where the Husqvarna brand was born 330 years ago. We continue to develop and evolve it, and we're moving into the next phase.
I would like to leave you and would like you to remember four main messages that I would like to send today as we go through the presentation. Number 1, Husqvarna is a leading global brand, spanning categories from ride-on over handheld, wheeled, robotic products, and a lot of the parts and accessories that going with it, and the services around. We are there for professional and residential users, and we're present in more than 100 countries, North America, Europe, and a lot of the emerging markets. We have unique and strong market positions around the globe with a lot of our customers in a lot of our categories. We're leading this and we have reached those strong market positions, not the least through leading innovation, specifically in fields like robotics, chainsaws, Pro Battery, but also digital services.
We'll continue to do so as we move forward, and I will talk to this. Thirdly, we are privileged with a very committed network of 20,000, 25,000 servicing dealers around the globe that are helping us to deliver a great brand experience and, more importantly, a service experience to our customers day after day. We see this as a huge asset for our brand and our delivery of a customer experience. We're also complementing that servicing dealer network with further access points in an integrated setup in order to further evolve and develop the brand accessibility and the service experience, and I'll talk to this as well.
With all these good assets that we continue to hone, we are actually quite positive and believe strongly that we can take the next curve in terms of growth, building on these strengths, and even more by putting into the center of what we're doing, our target groups, our customers, and how do we become more relevant and even more relevant to our customers as we move forward, as we're embarking in a world that is changing. This is what I'm going to talk about. With that said, let me directly move to why are we here? It was explained earlier in the demo stations already, but I'd like to spend a minute on our customers. We don't have one customer group as Husqvarna Division. We distinct and differentiate between three very distinct target groups that we are serving. Fascinating target groups in my mind.
On the one hand, we've got the pro-grade experts, a demanding residential user aspiring to have tools and the brand that professionals use, leaning forward in technology, open for connectivity and new ways of doing the work. Also quite brand engaged, and we are convinced if we get it right for that target group in the residential space, we also have a strong halo to other target groups in the consumer space. Conversely, we have the green space professionals. The green space professionals are commercial operators employing one to hundreds of employees, and their relation to the brand is very different. They're looking for a business partner rather than a brand partner. The purchasing process is much more around tendering and more productivity related. Sustainability questions, safety questions are in the foreground. A very different set of customers with very different demands and needs.
Lastly, in the middle, shown here, our tree professionals that Glen explained nicely earlier, are also a group of customers that is both harvest foresters and loggers on the one hand, and the urban tree care or the arborist space on the other hand. The latter being a true global community, quite brand engaged, putting literally their life with going to work on the block, if you allow me to say that. We are there to make their life safe, efficient, and their workday as good as possible. Three very different target groups, they are united by a passion for what they do, by the pride of using and interacting with our brand and using our products.
We've also decided in recognition of the very big differences between these target groups to reorganize ourselves within the Husqvarna Division. We actually created three what we call customer solution units that combine product management, research and development, and marketing for each of those three target groups as separate functions within the organization to become even clearer and more targeted towards these three target groups on the one hand. On the other hand, and that was mentioned before, and I will come back to that, we're also strengthening our pro sales organization, professional sales organization, to support the professional business in the best possible way. With that said, let's look a little bit into the more recent history. We had enjoyed solid growth over the last year.
The CAGR of the Husqvarna brand division, before the combination of consumer brands has been around 3% CAGR, driven by strongholds like robotics, battery, parts, and accessories specifically. In summer last year, we added, after the restructuring announcement, the consumer brands organization North America to the Husqvarna brand division with the remaining and strong business, we're obviously in the process of exiting some of this. If you look at the joint EBIT development that is shown here on the blue curve, we also saw a nice development over the years, as mentioned earlier and as you guys are all aware in here, we had a dip last year in our improvement trajectory, driven predominantly by two main reasons. Number one, the North American specific situation around consumer brands, further amplified with tariffs, raw materials, logistics cost increases, et cetera.
Secondly, we have an extended dry and long season that wasn't really supportive of a lawnmowing business, specifically stretching into Q3 of last year and hence hampering our results. I'm also very positive to see how we are back on a positive trend. We are back on the improvement trajectory, and driving a lot of initiatives to, of course, get us and keep us there. We will continue to do so. Leaving the history and looking, lifting ourselves a little bit up to the market, we would characterize this market as a highly attractive market. It's growing with 2%-3% per year with strong growth pockets, specifically around robotics and battery.
We see the total market size of SEK 135 billion, and we also see a quite attractive aftermarket business where we believe also we have further opportunity to grow and capture share of with further enhanced service and parts businesses. There's also a couple of trends affecting our industry. Of course, a market isn't static, it's dynamic, and some of those trends are urbanization with more and more people moving into urban areas, changing the needs not only for residential users as plot sizes get smaller, et cetera, but also changing the needs of professional green space management or the green space professionals in terms of urban tree care and urban green space management. We've got technology trends like the robotics, and autonomization moving in all parts of business of lives, but very strongly obviously also in the outdoor world, and we are extremely well-positioned to capitalize on this.
Similarly on the battery trend, moving from petrol to battery. Lastly, we see changing consumer behaviors across the globe, that the way users, specifically residential users, but I wouldn't limit it to it, interact with a brand and a product changes in the way they engage, inform themselves, in the way they transact purchasing process, as well as the ownership in terms of sharing and other models that are coming up, subscription, et cetera. All these trends in our minds create opportunities for us as Husqvarna Division if we play our cards in the right way, which we of course are aspiring to do. This leads me to how we look at our future, putting a little bit more flesh behind how I introduced the session. It is about shaping great experience.
We aspire to be the trusted brand for professionals and residential users in the space we are in. We have five initiatives that we believe do set us apart and will continue to set us apart going forward. On the top is becoming even more customer-centric, even more focused, even more tailored towards the three distinct target groups that we've set up in terms of solutions and services we are providing across the life cycle of our products. I'll get to some examples in a second. The second one is that we will continue to innovate in our core. What made Husqvarna brand strong, if we take some of our tree professional business as a great example, but also some of our higher-end ride-on business is innovation and staying ahead of the game.
We will continue to do so and investing into this core as this is a strong platform for us both from a profitability perspective, but also from a continued growth perspective. Even more, we will step further forward into the robotics and the pro-battery areas where we want to claim leadership. Robotics specifically continue to claim the leadership not only in the residential space but also in the professional space. Something I'll get back to and something that you have all seen in the demo areas earlier. Lastly, increasing the accessibility of our brand in a collaboration and an integrated setup with our dealer network. I will get back to that in a second as well. Allow me to run through the key aspects of each of those and starting with the customer-centric solutions. Let me take a robotic example.
If we think about a robotic great new invention, great breakthrough with the all-wheel drive robot or any other robot I could put here. The hardware is just one element of the user experience we're creating with a robotic mower, and it's the understanding of how can we be a partner in the life cycle of this product, as not only a product but a true solution and continuous service is not only helping the customer but is also giving us an opportunity to stay connected to the user and also be there when a repurchase decision is about to happen. I don't want to go through all the details. If you think about the robotics, you heard some of it. We provide great tools for residential users with the digital space around the Automower Connect.
We have a great personalization suite if you would like your robotic to look different because it's world championship or because you prefer another color or the picture of your son. You can do that very easy via the website. It's connected into ecosystems, digital ecosystems, as was mentioned, smart home systems, voice controlled, connects into the Gardena ecosystem with smart garden, but also can be connected very nicely with the whole suite of battery products and other professional products of ours, through Husqvarna Connect, which allows you as a residential user, as an aspiring residential user, to have control of your whole set of products with maintenance advice, tips, tricks, service, warnings, etcetera.
Lastly, Husqvarna Care, which you also see over there on the side of the wall, which is our bracket in which we capture all additional services and soft offerings we are providing to our customers. Subscription solution, leasing options, extended warranties, and so on. Hence allowing us to help the consumer to enjoy the best possible way our products and also be as close as possible to our products. It's not just robotics, and we talked already earlier about some of the other areas we are proud about being close in understanding of our customers and providing superior solutions and not just products. Let me take that example for innovation within the core.
The launch of the 550 CC, which has been mentioned before, has been a breakthrough for our brand this year because it's not only a new chainsaw, it is a cutting system that's developed in conjunction between a chain and a bar and the motor to deliver a superior cutting performance that leads in the industry in the 50cc class and allows our professional users to be more efficient and effective and is equally applicable for arborists as it is for loggers. We've talked earlier in the demos also around maneuverability and what is really important in the chainsaw and how can we make the life of our tree professionals better. It's the consumer insight paired with our innovation leadership that can set us apart and that will continue to set us apart. Further, let's talk about our robotics market and how we look at this.
I don't have to repeat. We are the global market leader. We shaped the market. We created the market 25 years ago. If you just look at the sheer range of products we are offering as a Husqvarna brand for professional and residential use, for all types of gardens, for different slopes. It's multiple generations. We are leading this category by far, and we are redefining the category as defined with the all-wheel drive launch this year. It's not only product. Again, it's the digital support both for residential but also the Fleet Services to manage fleets of robots as a professional user. A great asset that we have. This market continues to grow, and that's important. It's continuing to grow for two reasons. Number one, there is superior benefits of a robotic mower to any traditional or way of lawn mowing.
Equally important, as has already been hinted to earlier, is we see a very different development pattern across the globe in terms of robotic mowing. This is the residential market, and the darker the color, the higher the share of EUR or SEK or $ spent on robotic mowing versus any $, EUR, SEK spent on lawn mowing. What we see is that in Switzerland and Scandinavia, we actually have quite a significant penetration by now. I would say roughly every second EUR or SEK is spent, or CHF I should say, is spent on robotic mowing within the lawn mowing market. If we look at the rest of Europe, it actually trickles down. Central Europe is lagging behind and even more Southern Europe and the U.K. are still more in an infancy state. We're developing. We're also making great inroads, developing those markets.
On the other hand, we've got North America, which is equally in an infancy. We are convinced that this market will eventually wake up and evolve. It is the highest penetration of vacuum robots we see in North America, we don't see that yet in the outdoor robotics lawn mowing. We are convinced it will happen, and we have taken significant steps in 2019 in order to strengthening our mark. We've launched a complete range fit for the North American market, our high-cut models, which are also doing an even better job on the various grass types that you find in the North American continent. We have it placed in all channels, more than 1,500 outlets, from retail to dealer to online, in order to create maximum accessibility for this product.
The important thing is that we're not just launching it as a product, coming back to my earlier statement. We are offering this as a full-service solution. Any North American buyer who wants to engage in this category and wants to get into the category with Husqvarna gets a full-service product, which means not only does he buy a product, he also gets with it directly the installation, which we are offering independent of the channel where it's bought through our servicing dealer channel. Why? To create the best possible and premium service experience you can imagine, and also making sure that as this product and category is in its infancy, to make sure that there is no mistakes in the installation and it's a perfect experience. We see that also carrying its fruit. We're also investing into and expanding into new business models.
It was mentioned earlier, also moving into leasing options for landscapers. Of course, in the North American market, a lot of the residential lawn mowing markets, specifically in the premium segment, is also done through professional landscapers, and we need to make sure that they also get the access to our product. We are growing in North America. We've said before, doubled our market, our sales this year. We would have liked much more. We continue to be fully convinced that this market will develop, and we will be at the forefront of this. We are leading this market. We are the only significant player in the North American market, and we will continue to drive this forward. Eventually, we will see this market pick up. It's not just the residential space, it's also the professional space, as was mentioned by Kai earlier as well.
We are well set up. I will not go through the left side. We have launched the models. We talked about this. What's happening now is that we're expanding further into the professional space by two things. Number 1, we're expanding our pro sales organization to ensure further access to the professional customers and support our dealers also in customer acquisition. Of course, running this in a joint service proposition. We have a great pipeline of new products. A breakthrough, in our mind, has been launched today with the EPOS technology that complements our professional range to the next level with offering flexible virtual boundaries, which gives much more application opportunities and much more flexibility for the green space professional to use and deploy our product.
You've seen further pipeline aspects early in the demo area around autonomous solutions, where we combine our know-how from robotics and our know-how from ride-on, plus our service and digital capabilities into a complete offering of an operating system that helps to also take tougher lawns and higher energy-requiring lawn maintenance applications. Fit for purpose for airports, solar parks, golf courses, sports fields, campuses, universities. We believe this will be a very strong business in the life of green space professionals and in the life of green space management, in the world of green space management. Why is that so? Not only is this a superior product concept, which is also why it's driving seeing the growth in the residential business. It is a perfect lawn, 24 hours, seven days a week.
Through the self-mulching, it becomes a completely environmentally friendly option, less fertilizers, no noise emissions through the concept, less soil compaction, which is big for professional green space management and a pain point. It is much more safe, which is a big issue in green space management because these are dangerous machines. They're heavy machines. Lastly, and that's what's illustrated here on the last page, it is a much better commercial business because through the application of robots, a operator can replace labor cost with a fraction of equipment cost, making the total cost of ownership lower and overcoming the issue of not finding skilled labor in order to do the jobs.
That's why we believe that the Pro Robotic in general has a disruptive potential in the green space business, and that's also why we want to continue and will continue to invest and drive this business with full force, building on a lot of great successes we're having already. There's more than 1,000 installations out there of Pro Robotics with great user feedback, and we saw three earlier. We will continue to press forward fast. The beauty is, Pro Robotic doesn't come alone for the green space professional. It comes also with our Pro Battery because this is a shared need. Again, more sustainable, more quiet, safer, connects into the Fleet Services seamlessly so you can manage your whole fleet as a green space professional of products at your fingertip.
We have some great positions in Pro Battery, which we will continue to drive hard in order to build our position. We are operating in one single ecosystem, which I think is important. Any battery of the Husqvarna Pro series, whether it's a single battery, a belt battery, a backpack battery, connects to any product of the battery range, which makes it very flexible and is actually supporting all three target groups, the tree professional, the green space professional, and the demanding and aspiring residential user, which we call the Pro Grade Experts. Another great growth opportunity that we see where we will continue to set our mark.
The last element in this, and I hinted to this earlier already, is the distribution aspect. We're building our direct distribution capability, but not without giving and having our privileged network of servicing dealer having a cornerstone role in this. That's a great asset that few companies have, this network of servicing dealers that is committed to the brand and driving the brand experience day by day. We want to increase the accessibility to the brand. For the pro users and operators, this means creating more direct sales in order to address professional users in the best possible way, and then developing a set of the dealer network into professional dealers, and collaborating in the whole service aspect, installation aspect, et cetera, of the products. It's also for the residential side of the business, the Pro Grade Experts.
Further touch points and accessibility make a lot of sense, whether it's e-commerce through our dealers or direct e-commerce, retail pilots. We are striving to do this again with an integrated setup that allows the service experience to be as good as possible by having an installation and a service partner through the servicing dealer that is delivering the customer experience that we aspire for and that our three target groups deserve. In North America, obviously, retail is a much more advanced channel for us already, and we see great developments there, combining those channels in a very effective way, managed by something that we call the Husqvarna Service Corporation. Independent of where the product is bought, the service is managed and coordinated through Husqvarna and executed through our dealers. We believe that through this setup, we can create an even stronger service experience.
For all three target groups, the green space professionals, the tree professionals, and the Pro Grade Experts, service is such a big aspect of the experience. Let me sum up, please. It is about shaping these brand experiences, these customer experiences through our brand. We continue to be and aspire to be, of course, the leading brand in the categories we play in for professionals and consumers around the globe. We will press hard to expand our market positions through innovation and drive hard specifically in robotics, Pro Battery, but also the aftermarket and services part of the business, including digital. You saw some of the examples. We will continue to develop our servicing dealer network and complement it to an integrated setup that is delivering the best possible brand experience for professional customers and Pro Grade Experts.
Through this and an even stronger focus on the three very distinct needs of our target groups, we will continue a very strong growth for the Husqvarna Division. Kai said we are poised for growth. From a Husqvarna Division, I can only concur to this. We are poised for growth. With this said, I would like to end and actually hand over to you.
Yes. Thank you very much, Sascha. Now we have come to Gardena, and before Pär starts, we will look at a Gardena film to get into the right mode, and then welcome Pär up onto the stage. Please, can we have the movie?
My green refuge, full of magical powers where passion grows and blooms like flowers. Where I dig and plant and sow and reap and mow and cut and dance and leap and sit and watch. Where summers are warming and winters harden. That's where I find myself, in my garden. Gardena.
Gardening is about passion and energy, and I hope you felt that today in the station outdoors. Gardena is all about this passion and the energy and engaging with the passion gardeners. Our brand mission is to realize your gardening dreams. In fact, this statement is very important to us because we think of ourselves as a gardening business making gardening tools, not a tools business in gardening. We think that's a very important distinction because it really puts the gardener and the gardening activity at the center of everything we do. That is great because a passionate gardener dreams about a beautiful flower bed, not buying a spade. They dream about a fantastic apple harvest, not buying a fruit collector. It's only by understanding that and connecting to that passion, which we can build and elevate our brand.
All this talk about gardening and passion, where's the business opportunity in Gardena? I will talk a little bit about that today. We think the business opportunity for Gardena is centered around four cornerstones. First of all, it's about being the preferred brand in gardening. Of course, brand preference is good for our business. It helps us get listings and good wide distribution. It helps us drive sell-out. It provides us with an element of a brand premium on our products. Maybe even more importantly, strategically, it also gives us an opportunity to expand our presence within the gardening domain. There is a gardening domain expansion opportunity for Gardena, as you probably also saw today in our test station.
I think it's pretty cool actually, that if you think about it, we are a 50-plus-year-old business, making cutting tools and shovels, and at the same time, with the forefront leading in robotics and in the smart garden. That's gardening domain expansion opportunity. The brand travels. I think by that, we've also proven the third item here, the third business opportunity. We have a capability to take the brand and develop innovation relevant for other domains, for other parts of gardening. Actually, when you look at our business, in the markets where we play, we have a market leadership position, a number 1 or number 2 branded positions in all segments where we're active. We also have some really strong, unique positions. One of them is in watering, and the other one is in the smart garden.
Of course, these three things put together provides an opportunity for a strong financial performance. In the last years, we've had a strong financial performance, and we think there's opportunity to continue the growth journey for Gardena. Let's have a look at a couple of strengths, which have been created and which is a good foundation to build the future success of Gardena upon. First of all, Gardena is a gardening super brand. Actually, this year, 2019, we were awarded a top 10 Best Brand Award in Germany, for the top 10 best product brands. No other brand has the opportunity to make that same claim to the width of gardening activities as we provide. We provide solutions for watering, for ground care, for court care, for the smart garden, for the city garden.
We offer also a very broad range of product and solutions for the passion gardeners out there. We have a history of leading the evolution of our gardening industry. We invented the Gardena Click and Connect system. We were the first to launch a battery-powered outdoor gardening product in 1973. In 2016, we launched the GARDENA smart system. We also are a true multi-channel brand. We have attractive products, which can be distributed in many different channels. We, of course, have wanted for some time to meet our consumers wherever they dream about gardening, wherever they seek information and inspiration for gardening, but also where they shop and interact with other gardeners. We also have an integrated supply chain, with proximity to the market. Of course, this provides an element of flexibility to seasonal changes and also weather changes in a season.
Last, but maybe most importantly, as you hopefully saw today, Gardena is a super passionate team. The passionate gardener. We met some passionate gardeners today, and especially one of them, Sarah. The passionate gardener is our target consumer and is at the heart of everything that we do. What characterizes a passionate gardener is that they are all unified by a love for greenery. They don't only enjoy having a beautiful garden, they actually enjoy the process of creating one. They're also quite sociable within their community. They like to engage with others like-minded and seek inspiration and share the creations that they have accomplished.
In this sense, they are the perfect target consumer for a gardening business because these are the people that everyone else also looks to. I think we all know whether we are passion gardeners or who is the passion gardener on our street. These are the people where we look when it's time to cut the apple trees, and by the way, what tools do they use? What does a perfect lawn look like, and how do they get it? They are great ambassadors for the brand. Of course, we want to serve these passion gardeners in as wide a range of segments as possible. Some examples of where we are present is that we are, of course, present in the watering space. There's been some talk about mobile watering today, and we also offer watering systems, as you saw today in the garden outside.
Lawn care is another area where we offer different solutions. We have manual solutions where you can push with your own force, the lawnmower. We have electric solutions, we have, of course, robotic lawnmowers. Tree and shrub care is a lot about cutting. We have both manual and electrical devices. Ground and cork care is another area where we have the spades and the rakes, but also some outdoor cleaning equipment. Of course, we have a broad assortment of product to support the passion gardeners in traditional areas. We also try to create new categories. Two good examples is the GARDENA smart system, which you saw demoed earlier today, and then also the city gardening category, which of course is very interesting as people have smaller and smaller spaces, and other limitations for their gardening hobby.
You heard Susanna talking about her balcony today, maybe some of you. On a balcony, there often is not a water tap, as an example. Across these segments, we want to provide the best offering. This means that we have a fairly high drumbeat of product launches each year. We launch roundabout 50 new products into these segments every year. Looking at our financial performance, we feel that we've had a very strong financial performance since the inception of the division 1st of January 2015. The Gardena Division has since that time grown by 10% CAGR. This growth rate is mainly driven by three different things. First of all, we've managed to grow the space we take from a category point of view, adding innovation to traditional categories and also adding new categories. We've added distribution channels, becoming more multichannel in our distribution.
We have also expanded geographically into what we call the focus markets. These are the markets around our home country, Germany, plus some other countries, where we did not have a great brand presence and penetration. A year ago, we also got the responsibility for the European part of the Consumer Brands Division. Since then, we've been on a restructuring journey, with this business, primarily the Flymo and the McCulloch brands. We have decided to focus only on the strengths of these brands, meaning that we have been looking for areas within the brands where we are competitive and where we can be profitable. It also means that areas where we are weak, we are leaving.
We have decided that for the 2020 season, we will no longer offer any wheeled products under the McCulloch brand, meaning that we will not offer any tractors, any front riders, any walk behinds, any tillers or any snowblowers. This restructuring has this far been successful, and that in combination with the continued strong growth journey of Gardena, has led to an EBIT performance where we the last 12 months are performing above the 10% mark. Looking ahead, what's our growth opportunity? What's our opportunity to continue the journey? We think it is good because looking at the market and our position in this market, we of course see that gardening is a much bigger passion than what we reach today, being mainly focused on Central Europe.
Also we see that having market-leading positions in the different categories where we play, we have a relevant product assortment, which could be deployed elsewhere to a large extent. There's also local variations. We should be aware of that. We also believe that we are present with the most notable market leadership positions in segments which currently are characterized by high growth, like watering systems, robotics, and the smart systems. Also checking out the trends. They align fairly well with who we are and who we aspire to be. There is a trend in the world today for gardening and growing your own, connecting to the green. There's also an urbanization trend which makes people want more greenery around them. More and more people are thinking about how to populate their terraces and balconies with plants.
Digitization, IoT connectivity, the smart home, of course, plays well into the Gardena strategy of investing behind garden automation and the smart system. People will want to extend their smart homes to the outdoors. In many aspects, we feel that we are well-positioned to meet the future. The strategic priorities for us going forward is really to continue the passion and growth strategy which we have been on the last couple of years. This means that we will continue our geographic expansion. We will continue to expand our category presence, innovating both old traditional categories, but also shaping new ones to fuel our growth. We need to continue our journey of creating a strong and consistent multi-channel experience of the Gardena brand. Engaging the consumer more directly and more strongly to fuel their passion and interest in gardening.
When they plan their work, when they look for ways to realize their projects, when they shop, and when they share their achievements. Kai talked earlier about the garden planner, I think that's a great example how we can do that. Providing a software tool by which the consumers can make their future garden or their current garden and try out different ways of reconfiguring their green space. How to install a sprinkler system in the best way they can get help with in this planner. Of course, it gives us an opportunity to not only at an early stage connect with them and become one of their options for how to realize their dream, but it also, of course, over time, builds knowledge for us on what are the garden problems out there, which we can use to develop new product and new solutions.
Passionate gardener engagement is, we believe, very, very important going forward. Let's look at a few of these. If we start with the focus market growth or the geographic growth. We are present today in more than 70 countries around the world. I think it's important to realize that Gardena's business is very heavily dependent on a few countries. 55% of our sales comes out of what we call the core markets, Germany, Austria, Switzerland, Netherlands, and Belgium. These are markets where Gardena has, for a long time, had a position of strength and good presence in the shelves. To focus our growth investment, we have defined a number of focus markets. These markets, you could say, are centered around the core markets. We believe it's going to be easier for us to grow fast out from the core than in completely new areas.
The focus markets are Southern Europe, including France, Nordics and U.K., Russia, Australia, China, and Japan. Where the last years have been very focused on the Central European parts of these focus markets. I would say that the future is more global in the sense that we have increased our ambition, and then to become more of a global passion gardener brand, and then looking more towards the East, as this indicates. Why is that? Well, one of the reasons is that we believe that if we want to be truly successful in urban gardening, city gardening in the future, we need to also be focused and present in mega cities of the world. Visiting some passion gardeners in Shanghai a few months ago, I think there's a lot of things Gardena could do for these types of consumers. Looking at innovation.
Innovation is very important for us to also continue to grow in core categories and in new categories. It was interesting how they said earlier today, how can you reinvent a gardening tool? We've been gardening for thousands of years. We can. I think you saw two great examples today, the fruit collector and my current favorite, actually, the shovel rake, which I used last weekend. We understand the pain points of gardeners being a gardening-focused business. By working to eliminate these pain points, we can also improve the gardening tools and reinvent them. I think this is a great example of what we call as a little I, so to say, a small innovation. Of course, to defend our position, to grow it, and to also achieve a brand premium, we need to come with real new innovation.
Therefore, next year we're launching the AquaBloom, which you see on the other side of this page. This is an independent irrigation device. It does not require any electricity nor a water tap, and it's perfect for balcony watering or terrace watering, where you can happily go on vacation and come back home to beautiful flowers. Of course, innovation in new areas is also going to be important. Since the creation of the division, we have brought to life a full portfolio of lawn robotics. When we talk about robotics, we also tend to think more about gardening automation as a whole. Here we see a great opportunity having the breadth and the reach which the Gardena brand has. That is really what led us to develop the smart garden.
As you saw today, the smart garden offers an opportunity for consumers to connect different types of devices into a system and into even larger ecosystems outside of the Gardena environment, to extend their smart homes to the outdoors. Today, we can report that we have more than 100,000 connected devices in the system, and this is active devices. We can, of course, see which devices are active or not. We have fantastic app store ratings. If the first part of the process from buying Koubachi, which Kai mentioned earlier today, was to really develop the hardware components, we are currently in a process where it's very much about developing the software aspects, connecting the smart garden to larger ecosystems, but also adding new intelligent features.
Like, for instance, we've launched a smart assistant this year in Germany, where we can provide advice to the users of the smart garden system, given that we know some things about their gardens when they have these devices in the gardens. To sum up, the Gardena opportunity, it's about being the preferred brand in gardening. It's about the opportunity for gardening domain expansion. It's about the capability to shape leadership positioning in both traditional and new areas of gardening. It's about continuing the Gardena growth journey. Thank you.
Thank you very much, Per. Excellent. We will start the first Q&A session of this afternoon session. Welcome also Sascha here on the stage. We have Sascha and Per up for Q&A's. Do we have any questions? We have one here in the front. Johan.
Yeah. Hi, Johan Eliason from Kepler Cheuvreux . Could you quantify a little bit how big your investments into the sales force of the Husqvarna direct sales is? Are we talking about a few hundred guys per annum or how does it look like?
I'm not sure I want to comment on that in detail, but I would not call it that magnitude. I think there's more to than just sales guys. There's infrastructure to be added and other aspects as well.
Okay. On Gardena, I remember when it was acquired back in 2007 or so, there was a little bit of discussions about U.S. being an opportunity, but it was not really coming through, obviously. Now you're introducing the Husqvarna robotic movers there at price points that seems to be in the Gardena price points instead. Are you missing an opportunity there to try to get the Gardena brand in the U.S.?
The Gardena brand is partly present in the U.S., and we have quite strong market positions in Canada. We see it as the opportunity to grow in a true passion gardening niche rather than a mass market play.
Okay. We have another question in the back. Christer, please go ahead.
Christer Magnergård from DNB. A question to Sascha on EPOS products. If you look at the calculations on the cost savings for the users, what kind of cost savings can we expect them to have compared to traditional products?
Compared to traditional products? You mean traditional lawn mowing?
Basically what you showed on the chart from.
Yeah. I would clearly say that you can, depending on application, see a cost advantage of 10% to 20% for sure. I would not limit this, however, to EPOS technology, just to be clear. EPOS technology is one way of introducing robotics, but there is, of course, other opportunities as well. We believe that the payback of such investment is actually in the two, maximum three-year range.
The second thing is that you started to talk about golf more with your robotic solutions. Up until now, you basically haven't been present in the golf area at all, which is a bit odd given that you're such a strong lawn care company. Are you looking at more products in this area, given that there's a good potential and profitability is quite high for some players?
Yeah. Great question. I think, yes, there is great opportunity for us. Now, I think we also need to be humble and clear. There's different types of golf courses. There's also different areas of golf courses. A premium golf course green is something different from a traditional fairway. I would say for a lot of the applications, we've got already today very fit-for-purpose products, and there's no reason why we wouldn't press ahead from an innovation perspective. We actually also launched a fairway kit just this year for our current robotic setup that is a lower cut to support that. Mind you also, a golf course is not just a hole. A golf course is a large infrastructure, and it takes some time to introduce robotics across the golf courses.
In many golf courses, we are already in parts of the golf course, in supporting areas, on parts of their fairways, driving ranges, et cetera.
Final question on professional handheld?
Traditional handheld.
professional handheld.
Okay. Mm-hmm.
Where you said that you're number two in the world. We obviously have a very strong number one player. Can you talk a bit about how you can narrow the range to number one and what the number one player does differently compared to what you do?
I think I would say that the number one player, if you use that term, we can further narrow the gap, let me say it this way, or catch up by improving our distribution, which also goes with our dealer network further professionalizing to some extent. I think part of that has been also driving technology further, which I think we are well-positioned though in. I think there's also a fair amount of brand building that comes with it that will also help to further narrow the gap, specifically vis-a-vis the professional users. I would actually say the products are not the issue. It's more the go to market or the opportunity, if you wish.
Thank you very much, Sascha. Do we have any other questions here from the floor? We have one there. Kari?
Yes. Thank you, Kari. First on Gardena, you have had 10% growth in the last five years or so. Can you give us a sense of what has the market growth been during the same period, i.e. how much faster have you grown than the market? Maybe about the market share. If I look at the numbers, it would seem that you have maybe a 25% market share in Europe. How concentrated is that, i.e. if you can share your market share in some of the core markets like Germany, that would be helpful.
I don't think we can share our market share numbers. In terms of growth, I think the leading positions which we're in watering, robotics, and also the smart system are, of course, areas which we believe are growing faster than the market average. I think that's a fair comment to make. Whilst other areas like hand tools, electrical products, et cetera, I would say tend to be more on the market.
All right, thank you. Then the question about the professional lawnmower or robotic lawnmower opportunity. It's often said that it's bigger opportunity than a retail robotic lawnmower opportunity. But what is that statement based on? Is it based on that in the traditional lawnmower equipment, it's the professional that is the bigger part of the market, or what are you using as a basis as for this statement?
I think there's multiple aspects I would add to this discussion, and then you can have long discussions about how you size the market because you're really moving into the total P&L of a professional user rather than the equipment part of the cost, as we're replacing also labor. I think that's an important point of it. There's a lot of additional arguments in the professional space why that is a well-working and financially very sound solution. That's why I think, number one, there's an even higher openness for this from a product concept perspective. The second one, it's an uncharted territory. It's not that robotic applications are yet prominent in that field. I would also say that comes with a challenge because also that market needs, of course, to be developed. There's established relations. You're used to a certain technology.
There's multiple stakeholders in the decision-making of big professional organizations. This is clearly not a snap of a finger, from a conceptual point of view, there's a lot of arguments why that is a large opportunity in that space.
Finally, if you were a betting man, would you bet that the U.S. market for robots will be larger in three years, or let's say five years, than the professional globally? Which market will develop faster?
I take a diplomatic answer. I think they both are very reasonable to pursue.
Thank you very much for that answer. Do we have any other questions here from Carl-Oscar?
Hi, Carl-Oscar from Berenberg. Just a question. It took iRobot close to 10 years to develop their new Roomba machine.
That works on a beacon strategy. Why is it that you're confident that your new technology for boundary-less wires will be successful, and how long did it take you to develop this technology?
We've been on this for multiple years. As said earlier, there's pros and cons with every technology. We've spent a lot of time evaluating different technologies. We believe that this is a more flexible and a more robust solution. I think flexibility, we are convinced, specifically in the professional space where we'll see the even larger opportunity for a virtual boundary, flexibility is a big argument. That comes much more with the technology that we are having now. We continue to monitor this, but we are quite confident that this is a very valid direction, actually the right direction to go for.
Okay. Thank you very much. We have one question here in the front.
I'm just curious, on your robotics side, you market both under Husqvarna, Gardena, and the McCulloch brands. How do you differentiate between them? I think you have a lot of common parts in them, so your reasoning there would be interesting to hear.
It is obvious that we share platforms with some overlap, but there are some very unique differences in our target groups, and I think if we talk about the residential space, we leave out professional of course. We managed, in my mind, to cater both design as well as technology and the benefits coming with the product very well to the specific needs of passionate gardeners versus the pro-grade expert that Husqvarna brand is driving. From a design perspective, I would say you have a more friendly design in the Gardena space. You have a more edgy design from a Husqvarna perspective. Technology-wise, there's also a lot of differences, and one quite noticeable is that the Gardena robots are front-wheel-drive mowers, and the Husqvarna mowers are rear-wheel-drive mowers or all-wheel-drive mowers. There's also quite technological differences in the setup.
Yes, we use joint R&D and components and of course leverage the scale that the group can offer there.
Where does McCulloch come in?
Yeah. The McCulloch comes in as, I would say, a prize fighter below the Gardena range. I would say it's got a simplified consumer man-machine interface, et cetera. There are differences also there. Also, of course, a big design difference.
Will McCulloch be the brand you will try to get the lower spec end of the market, and which I think you talked about earlier during the day will be growing a bit faster?
No. The main strategy of Gardena is to drive the Gardena brand in the robotics market. The McCulloch brand is a tactical play opportunity.
Okay. Thank you very much. Any further questions here?
Our customers, their workplace, their element, everyday hard work. They put in their reputation. We provide the machines and tools. It is their goals, challenges, and needs that define who we are and what we do. Earning their trust day after day, year after year, is what will set us apart and make us reach our goal to become the construction and stone professional's preferred choice. We are the Construction Division, one of the three pillars of the Husqvarna Group. Our enterprise is built on a vision of transforming the construction trade, because our industry changes all the time. We embrace that change to take the lead in development and make sure we stay relevant to our customers, no matter what. The Construction Division holds four brands, which are among the strongest and foremost in our industry.
Husqvarna, the broadest range of light construction equipment and diamond tools for concrete sawing and drilling, concrete surfaces and floors, and light remote demolition. Pullman Ermator, the world-leading specialist in equipment for dust and slurry management, covering all construction applications. HTC, the global floor finishing expert, offering a complete range of innovative floor grinding equipment, tools, and solutions offering top-of-the-line features. Diamant Boart, the undisputed world leader in diamond tools for the stone industry.
Okay. Good afternoon. Hope you have a little bit left in the tank. Long day. As you can tell from the second film, we're now going to leave the space of Husqvarna Forest & Garden and enter the enchanted world of Husqvarna Construction. Four key messages that I would like to convey today. First of all, that we believe that we have a strong position in an attractive market. Part of what is making that market attractive is that it has a large share of consumables and service. We have successfully created a second core in our business in the last couple of years in concrete surface and floors. We believe we have a successful M&A track record with buying and integrating companies. If we start a little bit from this perspective, I believe that we play from a position of strength.
I'm not going through all this in detail, but I think we have the leading brands that you can see here on the film. We have a product offering and an innovation capability that is second to none in our industry. We have an intense customer focus and long-lasting customer relationships in our industry. Maybe the one that I spend a little bit more time on, that has more come to me in the last couple of years, that it truly is one of our core strengths, and that is that our DNA, our capabilities, our core competitive advantages, they lend themselves extremely well for light construction in general. That's something we have seen when we have made acquisitions. That's what we have seen when we have been benchmarking ourselves with other companies. That is ultimately some of our strengths, the core capabilities that we have.
Now I did what you did, Kai. I don't know what happened. It's a fast one. Nevertheless, where it all starts, it starts with intense customer focus. As this film tried to say in a very brief way, is that our customers are truly professionals, and they have extremely high expectations. Our customers are ultimately in the business of creating or shaping, to use the Husqvarna language, shaping great experiences. They're making homes for people. They're making offices. They're making places for recreational. Ultimately, they're shaping great experiences. They rely on us to be able to honor their commitments to their customers, and they rely on us to be able to be successful in their businesses. It's very important to have that intense customer focus no matter what business you are in, particularly when you're in a professional business, it is everything.
When we segment our customers, you start to see a pattern with very specialized contractors. There are not that many of these average or general contractors. Most of them are highly specialized. That's also testament to that our entire industry that we play in is very specialized. We can kind of group them to some extent, and this is how we look at our business today. When we group our customers, we can see that there are some common denominators within what we call concrete sawing and drilling. There are other things within concrete surfaces and floors we discussed. We have light demolition, and we have stone. If we look at our financial track record, I think we have had a pretty good growth journey, basically doubling the division in size since 2014. Growth CAGR of 10%, fairly well-balanced between acquisition and organic.
From an EBIT perspective, we are above the group average, and we have had a little bit of an unfavorable impact from a percentage perspective in the last year here because of some dilution from the Atlas Copco acquisition that was a lower margin business. Not getting too stuck on the numbers, let's rather talk about the market and then work ourselves into our plan going forward. In the beginning, I said that we believe that we are operating in a very attractive market. It's pretty sizable, SEK 45 billion in revenue, is growing slightly above GDP over a cycle, and it's generally a profitable market, and that's back to that it is specialized. As a market, it's fairly fragmented. It also have a large share of consumables. Almost half of the construction market, as we talk about it, is consumables and services.
That is also a good thing from a resiliency perspective. Of course, we are cyclical like all construction companies, but I would say that we are less cyclical than the industry average. Part of the reason for that is the large share of consumables. The other reason is that we are predominantly in renovation, refurbishment, rather than in new construction. From that perspective, our amplitudes in the cyclicality is slightly lower than the industry average. There are quite a few trends, of course, supporting growth in construction. Growing population, we have urbanization, creation of mega cities. We have emerging markets that are developing. Of course, there's a lot of needs and pent-up demand when it comes to construction in the world. For us, there are also other trends that are favorable.
One is that we see more and more interest and need of more sophisticated and new work techniques. Of course, in our business with remodeling, in the sawing and drilling, for instance, if you remodel in here, you want to open up a new doorway, for instance. That's something you could do by hand, but if you use more efficient equipment, then you can of course do it quicker, and you can do it in a more sustainable way, et cetera, as one example. We see it as a trend towards those kinds of solutions. Of course, in a strictly professional business, there's a clear element of possibility when it comes to servitization. How do we then look at our journey ahead? What are our focus areas? From a growth initiative perspective, This is our top five list.
Starting with expanding our offering beyond our traditional products into services and solutions. Personally, I'm confident that in the future it won't be enough to have the best products. We ultimately need to offer and provide and solve a bigger customer problem. Just giving a product won't be enough. We have to solve a bigger customer problem. That's something I will come back to here in a little bit. The other piece, which my colleagues all have talked about as well, is about the customer experience. I think our industry will change like just any other industry. The customer wants to do business when they want to do business, where they want to do business, in the way that they want to do business, and in the context of zero patience and in terms of personalization.
We need to make sure that we also stay in the forefront of this, that we meet our customers the way they want to be met, where they want to be met, when they want to be met. Third one is about the petrol-to-battery shift. You have heard plenty of that over the years when it comes to the Group, but not so much from Construction. Now it's time for us. The reason is not just because we are late and we have been sleeping, it is that our applications generally consume more energy. That means that the battery solutions have not been feasible. Now we're starting to get to that point where this also starts to become a big thing for us, and we will take the leading position in this.
One key thing here, which we also talked about today, I guess, is that we need to think in a different way when it comes to battery products. It's not just a product. It is an ecosystem. The customer ultimately will buy a charger and a battery. When they have done that, they are likely not going to invest in another battery and charger from someone else. There is a clear importance of the battery system. From that perspective, we need to think differently, and we need to act differently. Fourth one is about emerging markets. In 2025, about 60% of the world's construction spending will be in emerging markets. Think about that number, 60%. That will not necessarily be the case for us when it comes to our addressable market.
Again, we are so much into renovation rather than new construction, we will still have a clear trend of higher growth in emerging markets than in the mature markets. We need to make sure that we take the premium position in all those markets. Strategically here, I think one thing that's very important for us to reflect on is that premium is a relative thing. We all have a tendency to use our old norm, which is in the mature markets, we deem certain things to be premium and other things not to be premium. When you go into an emerging market where the standard method might be to do things by hand, then a fairly simple machine solution would be a premium offering in that market.
Here we need to start to think differently, and we need to start to act differently as a division. The fifth element here is that we believe that we have had a good growth journey from an organic perspective, and we will continue to grow organically. We see that there is additional opportunities when it comes to M&A, either by consolidating a fragmented market or by expanding into adjacent segments. Now, over the next couple of minutes, I will deep dive in two of the ones that we saw here before, services, and then back a little bit to the M&A side. Services and solutions are incredibly important, not just because it's a recurring revenue and recurring profit stream and that it's generally very profitable. Not even only because it's more resilient in a potential cyclical downturn.
I think maybe the most important reason is from a customer relationship perspective. I think Kai alluded to it earlier this morning. If we sell a really good product and it doesn't break, the customer might not come back talking to us for five or 10 years. That's not much of a relationship. With services and with consumables, you have a continuous dialogue and continuous contact with your customers. Maybe the most important KPI here is actually customer interactions and touchpoints rather than profit and revenue. Maybe I scared the audience now, I don't know. I think that the customer loyalty thing is incredibly important when it comes to services and solutions. It's also back to this that not just offering the best product, but offering a bigger solution for the customer.
I hope if there was one thing you left with at our station today was that in everything we do, we try to create a solution for the customer. If that is from products to the tool, to the services we provide, or how the different acquisitions actually support each other and together become a new offering, how the dust extractors support all the different applications, et cetera. This thing with solutions and providing bigger solutions is incredibly important. To get more focus on this, we are today organized in two different business units in this end, one for diamond tools because it's so big and a little bit more mature, and then one for all the other things to really put attention to this in our business. As a result of that, we are now starting to ramp up the pace in terms of introductions.
At the station today, we talked about the Husqvarna Fleet Services that we have developed and launched together with Sascha and his team, which is a very neat system. Of course, it's just a first step when you use the puck. We're always going to need a puck for alien machines and for old machines. More and more, we will start to have embedded connectivity, and then we can go much deeper into the product, and we can provide much more intelligence and much more data into this fleet system. We're just scratching on the surface today in Fleet Services. At the bottom, you can see UpCare, which is basically that we take all the risk away from the customer when it comes to service maintenance repairs.
By paying us a flat fee every month or every quarter, we basically take care of the equipment. We service it, we make sure that we take care of everything, and we make sure that the customer knows exactly what it's going to cost them every day, every week. Of course, you can now start to imagine how can you combine these two. If you have the fleet system and you have the service contracts, how can you make them better, but what other services can you now start to develop? This is just the start of a long journey when it comes to developing services. It's easy to imagine how you complement this with leasing offers or different payment solutions. In the middle, is basically just an iPhone, but it's an app. We call it the Diamond Tool Selector.
We alluded to it a little bit out at the station, that it's quite difficult to know what diamond tool you're going to use to get the maximum life and speed out of your tool, because it depends on the material you're going to cut and the machine you have. This is basically a tool where we take all our knowledge and try to, in a very simple way, guide the customer. If this is what I'm going to do in this kind of region, because if you know the region, we can understand the aggregate they're going to have in the concrete. Then you bring all this intelligence together, and we can give a very good advice. Ultimately, we set this up so the system will be somewhat self-learning.
In the surface preparation or the floor grinding space, we have come the furthest where we have taken it so far. If you know the size of the surface and you know the finish you want to achieve, we can actually tell you these are the different diamond steps from a not-so-fine diamond to a very fine at the end. These are the steps, and this is the consumption that it will be, and we can actually help you to even then price the job, what will it cost to get it to that finish. Again, it's just the start of a journey, but I think this is incredibly important to be the company of the future. Shifting gears a little bit into the M&A, but not M&A per se, but more what we have accomplished.
It's one thing to buy different things, it's another thing to, with different pieces, create something new. I think that's what we have accomplished here. We have next to our core that you can see on the left, the concrete sawing and drilling, where it all started. By the way, built upon some 14, 15 acquisitions as well in the past. That was our existing core, and we have done something similar here now in the concrete surfaces and floors. I think that was pretty obvious at the station as well today, from compacting the soil until the finished polished floor. We can actually support the customer and offer a solution through the whole value chain. It's also easy to now start to imagine the kind of services we can provide across that whole value chain as well.
I think that's one of the core competitive advantages we have. When you have a wider range, your services becomes more relevant to the customer. Imagine if you have 10 manufacturers, and they all have 10 different services. It's not very attractive to me as a customer. If you can have someone providing you a bigger range and provide services that are logical and delivers additional value across, we're onto something. Maybe a little bit more from being a little bit more concrete. What have we done in the last couple of years in terms of, I will not go through all the acquisitions we made, but what have we done with them over the last couple of years?
Since we tried to bring them together and create something new, they also required quite some integration because we really needed to make sure that when we combine the capabilities of the three, we could get something that was bigger and better than the sum of the three. What I'm trying to say is that we have really spent time on doing some serious integration. We have basically merged all organizations. We now have a multi-brand organization in all aspects of the business. We have consolidated our footprints, and we are getting towards the end of consolidating our product platforms.
If I would describe the last couple of years, it has been very much about a little bit of internal focus, getting the house in order, building this new core, and that we will now, towards the end of 2020, getting into the next phase, which is how do we now start to grow this? That would be the next phase for us. Okay. Summarizing my presentation, the four key takeaways. I believe we have a strong position. If you look at the product offering we have, the brands we have, the innovation capabilities, et cetera. We have an attractive market in terms of our size, growth, and profitability perspective. That market, almost half of it is in consumables, which is, I believe, a very good thing. We have, through acquisitions and organic efforts, managed to create a second core. We have diversified the business somewhat.
We believe that we have been successful in doing M&A, and we think there's further opportunities in terms of either consolidating the market or by exploring adjacent segments. Thank you. I now hand over to Anders Johansson, our CTO. Sorry, I forgot that. Sorry, Anders.
Thank you, Henric. Ladies and gentlemen, good afternoon. I may be last on the speaker list, but I have the opportunity to represent a very hot topic. As you have heard our President and CEO, Kai Wärn, talk about this morning, we are very proud about our position as market and technology leader. When you did your roundabouts in our demos before, I think you also felt our determination to continue develop that position. The ongoing technology revolution provides opportunities. This is really exciting times. We have heard about the petrol to battery shift. We reorient from mechanics to digital and AI. We transform from manual operations to autonomous operations. We also need to hold an ability to scale digital services and solutions at speed.
In my presentation today, I will share with you some insights and some examples on what we do and what we explore to give you a feeling about what you may expect from us in years to come. I will start from the top. The petrol to battery shift. We innovate and we capitalize on technology shifts. What you have seen today, partly demoed by Jens Simonsen and the tree professionals, was a comprehensive and very competitive portfolio. We do have that in the battery space, and especially on the professional side. When you heard the discussion up in the demo site, when the tree professional talked about the importance of the application on how he is actually using it as he's cutting down when he's using different applications, our application knowhow is critical for success.
This lies, of course, as Kai mentioned earlier, a strong capability, not only in battery technology and application knowhow, but also in electrification, and that competence in Husqvarna. It also lies from a technical standpoint that we actually develop our own brushed motors or brushless motors, our battery management systems. We develop our chains, and I think you got a sample of that today. We also, as a group, hold a selected number of battery platforms to optimize the customer experience. Dedicated team. That's a dedicated team for technology partnerships. Whoops. In summary, on the petrol to battery side, I would say that we are very satisfied around how we've addressed this transformation.
If we leave the battery for some time, we talked a lot about it today, you've met a lot about it today, we've had the demo systems a lot about today. We move in more to the digital space and the autonomous space. This is a very interesting area. We know that in many use cases today, machines already outsmart humans. This is just some statistics around how algorithms and AI can beat the human eye in assessing errors. We act on this opportunity in Husqvarna operations as we use new technology for speed and dedication. This is actually some pictures at site here. Those of you who are going to join the factory tour later on will see this yourself. What you see here, the blue things here are actually cameras, vision sensors, actually assessing parts coming from our painting operation.
Together with the startup community, we have used these sensors and algorithm and AI to assess errors from the painting operation to find scrap parts. Today, we have a quality standard that far beats the human eye in a very fast operation. This is exciting. What is even more exciting is what we're exploring now, when machine can lead man. What we are doing now is that these algorithms are being trained to assess, to predict the root cause to the problems in the painting operations, and can propose actions to the human workforce to address them and stabilize the processes. Actually, we have a situation where the machine is leading the human workforce. We're actually adding to this new types of sensors, so we can not only assess the outside of the part, but also the inside of the part.
Our vision here in the factory is actually to have and self-optimize autonomous systems where AI will lead AI, and robotics will respond and have a learning organization driving this all along in the factory. If you join the factory tour later on, you will see this by yourself. If we leave a little bit AI and digital in terms of our operations, and we move to the market side. You have heard today, and you have seen today from Per and Gardena and the team that we explore on ecosystem level. This is our new competitive field of play. GARDENA smart system is the only system in the world which can combine irrigation and robotic lawn mowing in a seamless customer experience. It's bridging the smart home with the smart garden. The way Gardena has addressed that initially is to connect to two global platforms.
The Apple HomeKit, meaning that you can, for example, through Siri voice control, manage your Gardena Smart. The reason for this is that most of our customers for Gardena Smart have iPhones, iPad. As you also heard Ole Markuson talk about from the Husqvarna side in the demo, he talked about IFTTT, meaning if this, then that. This is a flexible platform that you as a user yourself can connect and build your own smart home base or your connected devices in a sequence and configuration that you please to, that you want to do yourself. We have, of course, also connected initially to this platform. Those are both global, and more will come. From the Gardena standpoint, this has also been important to connect to local platforms. You have Magenta in Germany and KPN in the Netherlands, countries of great importance to Gardena.
We continue to use technology to explore our position in the ecosystems, while Gardena also connects the Husqvarna Automowers, giving them the capability to also address large gardens of spaces up to 5,000 sq m and pretty tough terrain. Pretty recently, they took a pretty interesting move, exploring a total different type of application to Gardena Smart, and that is through Netatmo. I don't think Per mentioned this, but this is a surveillance camera. You can get photos in your smart app. It means that you can do irrigation, robotic lawn mowing, and get a picture of outside of your house. This is one way of using technology to explore your position in the smart garden. These things come around and come together, also engaged in the smart home. This is one example on exploring on ecosystem level.
We also explore, and that you saw today, on system level. This picture is something I experienced myself a few days back as we ran our smart operations app at the airport in Örnsköldsvik. There were 150 people from regulatory, coming customers, and a lot of people very excited about this. This is very important to airports for safety reasons, for productivity reasons, for cost reasons. There are many reasons for this. This is part of a research program called AVAP we're part of, Autonomous Vehicle Airport Project, under the leadership of Luftfartsverket. We demoed our autonomous operations here. It was actually, I won't brag, but it was actually on Swedish news Rapport this Saturday at 6:00 P.M. If you go on SVT Play, you can see live what we were doing. I want to take my chances.
This is actually a way where we start to push the technology frontier on system level in our industry because we hold an end-to-end technical capability here, from the control and planning system to the autonomous operation to the rider platform. This will give us, hopefully, a flexibility in our business model, and as I mentioned out there, as we look at services. We have for some time built our capabilities in here, including accelerating competencies from applied research, both on the technical side and the business side. We're also well connected to key technology and startup communities around the world. In this era, you don't compete by yourself. You need to compete in partnerships with large companies, but also the startup community. This is very important.
As mentioned today, what was released in the press release a few days back, is our partnership with Yeti Snow Technology, where we together with Øveraasen and Semcon combine our efforts now, trying to grab the opportunity and explore autonomous operations in snow and grass in airports. We compete on ecosystem level and drive the technology development there and on system level, but we also do this on product level. I think here we are very proud to say that we again rewrote the rules of the game for green space management and confirmed our leadership position in robotic lawn mowing as we introduced this year our Husqvarna Automower 435X at the Mobile World Congress in Barcelona. Movie, please.
Introducing a world first. Advanced all-wheel drive that handles rough terrain. This is not a car. It's a robotic lawnmower. It manages extreme slopes better than anyone else. It's voice controlled. The world's first Husqvarna all-wheel drive Automower.
We compete on explore on ecosystem level, system level, and product level. We also take a total different stance to technology potential, and that is what I will share with you now that you probably haven't seen before. That is how we work with our AI capabilities in our AI lab. We're actually using our capabilities to try to explore areas of importance to us and try to go from the other way around, see what can the technology provide and what potential lies in it in terms of business and opportunity. Kai talked in his introductory speech a lot about the importance of us having an end customer relation over the life cycle ownership of our products. That is very important to us. One way of doing that is through data. Also utilize the power analytics and AI.
This is an area we look into, and in the user interface, you will find a lot of conversational AI. One simple way is a chatbot, but there is a lot of logic behind this. For many reasons, we look into other use cases as well. May it be predictive and preventive maintenance, may it be local decision support. There are many situations where you need to have rapid speeds in analytics, may it be only your device. Because of the speed needed, you cannot send the data to the cloud and back. You may be in remote areas, like sometimes our customers in forest and garden are, or in construction are. We need to put analytics and AI on the device.
That is why we look into and do both research and test on putting the AI on the device to be able to have it on potentially a chainsaw, a power cutter, or something else, supporting the operator as they move, although they may be in remote locations. We're also looking into totally different areas. We explore pretty widely data sets from different opportunities. May it be drones, may it be satellites, may it be sensors, where we can actually assess other areas, perhaps in green space management. One such use case are we currently elaborating with that we will launch and demo in the Living City in one month time in Gothenburg. We call it HUGSI. It is the Husqvarna Urban Green Space Index. We have access to, and have had for some time, satellite data and data sets.
Together with very exciting startup companies, we have built some interesting algorithms and identified a number of KPIs, and can see patterns around what is a green city, what may be a healthy vegetation in a green city. We are introducing now HUGSI. This is a web platform you see, where we're actually going to benchmark and rank some of the leading cities in the world against how green they are. Not to put them into a position, because everybody is a winner, but rather to raise the discussion awareness and support them in their effort. Those 98 cities are the 94 from the C40 initiative, and then there is Geneva, Brussels, Marseille, and Gothenburg. If we just take a step back, why is Husqvarna doing this? What have you seen today? What do you see around you?
More or less everything we do is about green space management. Sustainability is incorporated in our strategy, in our daily operations. If we can just put a little effort to help improve the quality of life of urban cities and urban living and push sustainability, we will do so. This might be a small thing, but I think it can raise some debate and put some discussions on the table. If we leave petrol to battery, digital and manual operations, we do inventions. We have a history of invention. An innovation has a commercial aspect. If you don't make money out of it, then it can be academic. How do we scale digital services and solutions? What is the hocus pocus behind it? There's a lot of work behind this. You have seen and heard a lot of discussions today.
You heard Micke Dahl, who was representing the construction department, share with you their fleet system today, where they are sending from the electric power cutter is more running time. They can from the petrol products also send RPM and other kind of data to the cloud. We're actually getting a lot of data from our applications. We have a lot of data in our legacy systems. We have manuals, we have specifications, we have product IDs, and we have all of that kind of stuff. We also know that to be successful in this area, we have to compete with others, and data is everything. We need to have data from large companies, from startups, from the satellites.
We have built a platform, a digital service platform, that if you're going to develop a use case, a service to a use case, and you need data from a legacy system, from our products, or from suppliers or collaboration partners, you can go to this platform in a very simple way and access that data. We also in this platform provide opportunities to make analytics on that data. If you want the output from a combined analytics, picking data all the time, updated as it is in real time more or less, you ask for that service and pick that service from a digital service platform, hereby you can really fast start to build your offerings on what we have in the backbone.
All the data you pick, no matter where it comes from and what analytics you use to support your service that you present to your end consumer, is of course come with a strong security and a cloud infrastructure that is world-class. We have put a lot of time into this, and I know when we started roughly three and a half years ago, we brought in some of the best experts in the world, and we said to them, "Please, kill our architecture, ensure we do it right." We have had leading experts all the way along to really challenge what we're doing. I would say, I don't want to be bragging in a way. That's not my intent, but this is really, really good. This is an asset for Husqvarna as we're now going to scale services and solutions.
May it be supporting autonomous operations, what Henric has been talking about, Per, or anybody else.
I would just like to end by sharing with you two, I think, key capabilities we haven't talked so much about before, and not today. Where is the sound? One is our AI lab. We have a core capability. We have kept it to support the entire group with data scientists, data engineers, big data team, who is actually driving the AI strategy for the company, being a center of excellence, doing technology exploration, supporting the divisions in building in analytics in their services, collaborating with the startup community, and also being very close to leading academy in the world. This is an asset of Husqvarna. We have been working on this for a few years' time, and I think this is going to be very important for us going forward.
This capability works very close, of course, to our venture arm, where we're actually looking to the future of robotics, IoT and AI, and new business models. You heard about Yeti Snow Technology that we actually invested in. We also invested in a company around Boston called Franklin Robotics with a small robot called Tertill. We have also invested in a company called Mowbot. Remember when Kai talked about before, we were looking to new business models, how can you use robotics and sell a result, a service? This is franchise setup. We have some really exciting startups in the pipe that we're looking at. These two capabilities are part of driving our innovation agenda, exploring technology, and actually giving a push to the transformation journey we're in.
I would just like to end by saying that I know we're on top of the agenda, and this is going to be an exciting ride. Thank you very much.
Thank you very much, Anders. I would like to welcome both Anders and Henric on the stage for the Q&A. If you have any questions, please raise your arm, and then wait for the microphone, and then state your name and company, and then we can go ahead with the Q&A. I think we have one in here in the front. Björn?
Thank you. Björn
I would say that that's very dependent on the product category. I would say that generally speaking, there is no difference, but I would say when it comes to the petrol power cutters, yes, then there is a difference where I would guess that the overall margins will be lower on battery than on the petrol ones. In general, I would say that's not the case.
Today, of the products you're selling, how much is battery powered, roughly?
We only have that one product you saw today. It's very small in the bigger scheme of things. I think maybe I should clarify one thing, and that is in Construction, we don't just have petrol and battery. We have a lot of corded, as you can see out on the station, single phase, three phase. We do high frequency. We have pneumatic products. We have hydraulic products. It's not so dramatic for us in terms of having different power sources, but obviously, when battery can step in because it's simple, it's convenient, and you don't have any hoses and things like that, our market will also start shifting.
Thank you.
Great. We have a question from Kari. Anders?
Yes, Kari at Handelsbanken. In the construction business, you've mentioned that 50% of the business is consumables and services. Is that the case for you, or was that for the market as a whole?
I would say that, first of all, it's not quite 50, but it's slightly less. I would say it's also that for us, but not because we have the same market shares. I will now explain why. It's about 50/50 for us and for the market. In the stone business, we don't sell any equipment. We only sell diamond tools. The end result of what I'm saying is that we have slightly lower market share on consumables than on equipment, which I don't think is that uncommon.
Okay. In the equipment versus consumables business, do you have a very specific razor blade model where you sell the equipment not at cost, but at lower margins, and then you make your money on the consumables?
Not as a business model, but of course, we have certain campaigns, so we have certain activities that could be like that, absolutely.
Okay. Thank you.
Many thanks. Any further questions?
Not at the moment.
Okay. Thank you very much, Anders and Henric. Now we have come to the final part of the agenda, and it's a summary from Kai. Please, Kai, welcome to the stage.
It's been great to have had you for a full day in Husqvarna. It's a big effort for you to come here. We fully realize that, and hence, it's of course great that we had a chance to take you outdoor, leave you with some hands-on impressions of the whole thing because the smell of the place is so much more vibrant and clear if you're out there, and you were. And also equally, to get the chance to listen to the divisional presidents. You see me and Glen once in a while, but these people you see a lot less frequently, so that's hugely important for us to show a larger piece of the management team and drill down into the business. I'm going to be very light touch in this summary. We feel that we are poised for growth. You've seen and heard the speech.
Fundamentals of markets, rewarding characteristics that we possess, may that be the brands, may that be innovation, may that be positions with the higher growth. I talked quite a bit this morning also about it. Actually, Anders used it again, this slide of transformation that has been ongoing, all with the aim of becoming a market leader, a tech leader. I gave you some proof points of that in the morning. You saw the brand share increase. You saw the culture we have built around efficiency program, which we have allowed us to take cost additions for growth initiatives. You saw also the additions and the transformation in terms of competencies that we have built up. You heard about the decisions about the Consumer Brands Division, dissolving that, which we took already last year. We have executed, I would say, successfully on that.
There was also a question to Glen on that topic as to how we're doing, and we are on plan with that. There's no regrets as to what we have done here. We are on the right track. I think the important thing is we are building a momentum in this direction. Of course, that gives us-- I thought I was one slide further ahead. Because it's not going to be many slides. We have built sufficient momentum, actually, to take the claim and the statement of we are going to outgrow the market top line. We are going to overperform in terms of profitability, and that's the way how we see value creation for the next phase. It's building momentum. You saw quite some few examples out there. You also know that we've gone through a couple of phases.
I was reasonably clear about that. Glen elaborated a bit on it as well. We are just at the end of the second phase with 2019, before we enter this third phase here. We do feel really encouraged and strong walking into this phase in this way. Was it only one page, wasn't it? Okay. I thought it was another slide attached. It doesn't matter. Let's leave it. Yeah, there it is. Thanks. The strategic, the right touch you want. Thanks. The strategic priorities, you heard us talk about quite a bit. Customer experience is at the core of what we do.
You see, you heard also how we continue to refine the end customer segmentation, all with the same intention as we had 2014: to get closer to them, get to know them better, understand them better, translate that better understanding into value, creative offerings that are important for them. That's important. You heard us talk about the game-changing with the connectivity, and the number we gave you was 300,000 connected devices and users. That is actually, we believe, outstanding in our industry. I don't think you will find those numbers today in our industry. We have taken a position which should enable us to start to capitalize moving into services and solutions built around us, leaving the single transactional in-kind of relation to the customers moving into that multiple touch point world that Henric also verbalized to you. Winning core, hugely important.
You saw a lot of examples of the winning core when you were out there at the demonstrations at the booths. You recall the slide. This is more than 50% of our sales. We have all the reason to continue innovate. I think you even saw innovations, for example, with Gardena, that you didn't think were possible like fruit collector, the shuffle rake .
Shovel.
Shovel. Thank you, Per. I should know that. Innovation has a completely different meaning, of course, whether you go to the upper level here of technology or whether you look at fairly rudimentary type of equipment, but still bringing the user benefit. If you have a sore back, that for sure will be a great tool. Robotics and battery, needless to say, fantastic position with robotics. Yes, we are determined to continue to explore this. May that be in the residential place, and you heard Sascha talking about the North American expansion.
You heard enough, I think, about how we're pushing the frontier into the professional space yet another couple of steps here, and that we are determined in the belief and conviction that we have the opportunity to disrupt that space, given the fact that the operator is such a huge component of the cost structure of the landscapers today, which we can really reduce and, of course, then increase the equipment value. Combined with the tools we have to help them improve their productivity, that gives them a really short return on investment. We feel really good about that. All, of course, supported by operational excellence. Back to Glen's speech, we are in a seasonal business. There are things we need to do better than other people. We came to talk about capital efficiency. We are not the world champions at all.
We also challenged in that seasonal model, but we're going to do better on that side. I think that's a bit the long and short of it. Maybe touching on what Anders said, as part of that market and leadership aspiration, we also have stretched out a lot into the space. Okay, now we got another slide. That's good. We are really connecting into the world various type of startup hubs and tech companies, various types. I would say we are much closer to where the music is playing. Actually, on the global arena, maybe is to talk too much, but not that far from it, actually. It's a different Husqvarna. It's quite a different Husqvarna, actually, you visit today than when we were here 2014, and we had the capital market stay actually in this location. We are proud.
This is the team that has done it, and many others, of course. I think everybody's driven by the same passion and conviction that we want to be this market leader, the tech leader, and not forgetting the sustainability aspect either. The legacy and the heritage is fantastic with the 330 years. With that, I think I'll leave it and say thank you very much again, and really looking forward also to those of you who can have the opportunity to stay for the production visit. For the rest of you, thank you very much and a safe journey back home. Thank you.