CEO's review Q1 2024

“Our first quarter performance was solid, considering the challenging operating environment. Comparable net sales decreased by 6%, while reported net sales, which include Georg Jensen, increased by 3%. We now have two quarters behind us with Georg Jensen as part of Fiskars Group. The integration is proceeding well thanks to our motivated teams, detailed plans, and the strong cultural fit between Georg Jensen and Fiskars Group.

Savings from last year’s organizational changes supported comparable EBIT, but due to lower volumes, it decreased to EUR 25 million. In Business Area Fiskars, the volume drop was almost fully offset by a higher gross margin, resulting in a rather stable comparable EBIT. In Business Area Vita, adjusting production capacity to declined volumes is challenging, as glass-making is a scale-driven process industry, hence the lower volumes have burdened Vita’s profitability more. We are taking action to tackle this and restore the competitiveness of our glass factories.

Free cash flow declined in the first quarter, following its historical quarterly pattern.

We remain focused on our Growth Strategy and its four transformation levers: commercial excellence; direct-to-consumer (DTC); the U.S., and China. During the first quarter, our gross margin, which is our key performance indicator for commercial excellence, increased by 185 basis points. Comparable DTC sales were stable, with continued good growth in e-commerce offset by a decline in the Group’s own retail network mainly due to store closures. DTC amounted to 24% of the Group’s net sales. In the U.S., comparable net sales decreased by 5%, as retailers’ cautiousness in taking inventories continued to affect demand. In China, comparable net sales increased by 15%.

In March, we took an important step forward in sustainability by setting a long-term net-zero emissions target. Our plan is to reduce greenhouse gas emissions in our operations and the whole value chain to net zero by 2049. Our climate work and transparent reporting was externally recognized in the first quarter, when we achieved the Leadership level in CDP’s assessment. CDP also recognized Fiskars Group as a 2023 Supplier Engagement leader for our efforts to measure and reduce climate risk within the supply chain.

Another external recognition we were honored to receive was the prestigious Red Dot “Best of the Best” product design distinction, which was awarded to two Fiskars brand products. This marked the 16th consecutive year for Fiskars winning a Red Dot award, and the 5th consecutive year of winning the “Best of the Best” Product Design Award. Pioneering design is at the core of Fiskars Group and its legacy—we create lasting products and dare to innovate for the future. In 2024, we are paying homage to some of the most iconic Fiskars products with special editions, in honor of the 375th anniversary year.

With one quarter of the year now behind us, we reiterate our guidance for 2024 and expect comparable EBIT to be slightly above last year’s EUR 110 million. The operating environment is expected to remain challenging. Visibility toward the end of the year is still limited, as uncertainties in the global economy persist. As a result of the Georg Jensen acquisition, our EBIT generation shifts even more toward the end of the year, highlighting the importance of the second half, and especially of the fourth quarter. During this period, the development of Business Area Vita’s volumes will play a significant role.

We continue to strengthen our foundation. I am confident that we are well positioned as a result of all the transformative actions we are taking, and this will be more visible once market conditions improve.”

NATHALIE AHLSTRÖM

President & CEO