CEO's review Q4 2024

“We had a strong finish to the year as we delivered an all-time high comparable EBIT for a fourth quarter, EUR 43 million. The increase was driven by a clear improvement in gross margin and continued prudent cost management. This is testament to our teams’ resilience and hard work in a challenging operating environment globally. The full-year comparable EBIT was EUR 111 million, increasing slightly from the previous year. This increase was predominantly driven by Business Area Fiskars.

In 2024, our comparable net sales decreased by 5% as low consumer confidence affected demand. Our reported net sales, which include Georg Jensen, increased by 2%. We were able to deliver improved profitability despite lower volumes especially in the fourth quarter when we delivered an all-time high gross margin, increasing by 260 bps from the previous year. I am also happy to share that our full-year gross margin reached 48.8%, placing us more than well on track with our ambition of achieving a gross margin of over 49% in 2025.

Another highlight was the good work done regarding our leverage target. We ended the year with our net debt/EBITDA at 2.55x, which is just shy of our target level of 2.5x. This was supported by our systematic cash flow management and strong cash flow in the fourth quarter.

In the fourth quarter, we continued our transformation and announced plans to separate our Business Areas Fiskars and Vita into operationally independent companies to accelerate their different strategic growth opportunities and expedite serving their investment needs. These plans have been exceptionally well received. Internally, our employees have truly embraced the possibility to take ownership of market opportunities specific to their respective brands. Externally, this way of operating offers increased transparency and measurability, for example.

Looking at Business Area Vita, its comparable net sales in 2024 decreased by 6%, whereas its reported net sales increased by 9% to EUR 605 million. Denmark is now clearly the largest country for BA Vita and the second largest at the Group level after the U.S. following the Georg Jensen acquisition. As a highlight, the Royal Copenhagen and Moomin Arabia brands delivered good growth, driven by strong commercial execution, especially at the end of the year. BA Vita’s comparable EBIT decreased to EUR 48 million due to lower volumes.

Business Area Fiskars’ 2024 net sales decreased by 4% to EUR 547 million due to low consumer confidence and retailer customers’ cautious inventory management. Despite the lower overall volumes, a great example of how we are taking growth into our own hands is how the Fiskars brand managed to expand its distribution in Germany – our teams delivered exceptionally strong growth in this flat market in the fourth quarter. BA Fiskars succeeded in increasing its comparable EBIT to EUR 77 million by improving its gross margin and executing prudent cost management, especially in the supply chain.

In line with our strategy, we continue building on growth fundamentals which will elevate us once the market environment improves. Our transformation levers – commercial excellence, Direct-to-Consumer (DTC), the U.S., and China, play an integral role in delivering our ambitions. Looking at 2024, our gross margin, which is our key performance indicator for commercial excellence, increased by 200 bps. Comparable DTC sales, comprising our approximately 500 stores and approximately 60 e-commerce sites, were flattish, decreasing by 1%, partially due to a decline in own e-commerce in China. Total comparable net sales in China were resilient, increasing by 1%. In the U.S., comparable net sales decreased by 7% as retailers’ cautious inventory management continued to affect demand.

In 2024, we made good progress in sustainability. We were awarded multiple international and local recognitions for our ESG work, such as the Platinum level sustainability rating from EcoVadis. Another highlight was the progress we made in our circularity target – at the end of 2024, we were already at 26%, almost doubling from previous year’s 14%.

I would like to thank all our employees, customers and partners for 2024, which marked the 375th anniversary of Fiskars. In 2025, we yet again get to celebrate other important milestones, as Royal Copenhagen turns 250 years, and Moomin celebrates its 80th anniversary. These celebrations will feature exciting consumer events and special anniversary collectibles.

Looking at 2025, the operating environment is expected to remain challenging and impact demand. We are expecting to improve comparable EBIT from the 2024 level with the Group’s EBIT generation seasonally tilted towards the end of the year.

During the year, we will invest in demand creation to accelerate our distribution and category expansion. For example, Vita will continue to focus on surrounding the consumer through its product offering, while Fiskars will invest significantly in innovation. Throughout 2024, we focused on making a difference with the actions in our own hands. By strengthening our foundation, we aim to reignite growth and improve our performance in the long run.”

NATHALIE AHLSTRÖM

President & CEO