Risks and business uncertainties
Fiskars Group’s operations are subject to risks and uncertainties arising from the Group’s operations or changes in the operating environment. The most significant risks and business uncertainties that may have an adverse impact on the company’s business and financial performance have been identified. Sustainability related uncertainties are reviewed as a part of Fiskars Group’s annual enterprise risk management process . However, risks that are presently either unidentified or deemed immaterial to the company could emerge as material concerns in the future. Fiskars Group’s risk management framework is further explained in a separate Corporate Governance Statement.
| Risk category | Risk name | Risk description | Risk mitigation actions | Risk trend |
| Strategic risks | ||||
| Adaptation to external environment | The risks associated with changes in the external environment, such as a shift in consumer behavior and demand, buying power, actions of retail customers and competitors, trade partners’ financial position, regulatory changes, climate change, and the macroeconomic environment, may lead to decreased net sales and profit. Failure to effectively address these challenges increases the risk of losing market position due to insufficient innovation, ineffective pricing strategies, or a lack of operational agility. Additionally, an inability to anticipate and respond to evolving market trends, or to ensure adequate business continuity plans, may compromise profitability, disrupt operations during crises, weaken competitive advantages and threaten long-term business sustainability. | Fiskars Group mitigates the risk by maintaining a diversified commercial footprint across geographies and product portfolios, enabling effective portfolio management and reducing dependence on any single market or product. To address changes in the external environment, the company continuously adapts its business procedures. By adjusting its organizational structure and operating model to enhance agility, Fiskars Group ensures swift adjustments to business plans, enables a proactive response to evolving circumstances and minimizes potential disruptions. | down from previous year | |
| Geopolitics | Geopolitical risks, including trade relationships, supply chain disruptions, territorial disputes and tariffs, may lead to reduced net sales through sanctions, import restrictions and shifts in consumer behavior. Escalating tensions could disrupt business operations, impacting sales and sourcing in affected markets. Supply chain disruptions may increase the cost of raw materials or sourced goods, or limit their availability. Additionally, changes in the geopolitical environment may affect business dealings with specific countries, influencing value chains and potentially resulting in lost sales. | Fiskars Group’s diversified commercial footprint enhances resilience by diversifying risks across multiple regions and markets. The production strategy combines the Group’s own manufacturing with carefully selected supply partners. The Group operates its own manufacturing facilities in Europe, Asia and the United States, and the Group continuously evaluates the utilization capacity of its different manufacturing units to respond to e.g. disruptions in trade relationships. To optimize sourcing and mitigate geopolitical risks, the Group has diversified its sourcing footprint across Asia. By fostering long-term partnerships with reliable suppliers who share the Group’s values and engaging multiple suppliers, the company minimizes reliance on any single source, reducing vulnerabilities in the supply chain. To ensure product availability during challenging geopolitical situations, the Group may also maintain safety stocks, providing a buffer against potential disruptions. | up from previous year | |
| Organizational changes | Fiskars Group is in the process of separating its Business Areas Fiskars and Vita into operationally independent companies to accelerate their different strategic growth opportunities and expedite serving their investment needs. Fiskars and Vita will become two separate fully accountable businesses and independent legal entities. Despite thorough planning, the separation of Business Areas into operationally independent companies may introduce risks. These include potential delays in project timelines, unforeseen cost increases, and challenges in implementing legal entity structures and necessary IT system changes. Additionally, the transition may lead to concerns among personnel, potentially impacting employee retention and a loss of critical talent during the change process. If not managed effectively, these risks may impact the successful execution of the separation. | To mitigate the risks associated with the separation of business operations, the Group has prioritized the change process across the entire company. A dedicated Project Management Office (PMO) has been established, supported by necessary resources to ensure the project’s success. Comprehensive and detailed execution plans have been developed to guide the process. To maintain control and ensure timely progress, the company has implemented a strict execution cadence, with systematic monitoring across workstreams. This ensures that the project stays aligned with established timelines, and possible issues are addressed promptly. A steering committee, including key Group executives, is established to secure progress and strategic alignment throughout the transition. | NEW RISK | |
| Operational risks | ||||
| IT systems and cybersecurity | Fiskars Group increasingly depends on centralized information technology systems and suppliers that hold and process critical business information. Breaches, malfunctions, cyberattacks and fraud attempts directed at Fiskars Group or its suppliers may cause interruptions in the company’s operations at either a regional or global level. Such an interruption may have a material adverse effect on the net sales, profit and reputation of the Group. Risks related to major IT projects, such as conflicting or missing data, budget overspend, and project delays may affect business negatively. Operating against IT best practices such as following poor lifecycle management may leave systems vulnerable and cause compromised security. The risk applies both to the Group’s own and suppliers’ or other third parties’ IT environment. | Fiskars Group continuously mitigates IT-related risks by deploying high-quality IT solutions and by maintaining, developing, and testing their function and integrity in accordance with internal IT control framework and industry best practices. Critical service and technology providers are required to have continuity and recovery plans for their services in the event of disruptions. Changes to new and existing IT systems are made in accordance with standard processes and procedures. Fiskars Group’s information and cybersecurity governance works to integrate risks into corporate decision making. Security posture and capabilities are ensured with various security technologies, including network, endpoint and cloud detection and response, firewalls, threat intelligence, and security operations. The security awareness program develops and promotes a cybersecurity and data privacy mindset in all the Group’s employees. | up from previous year | |
| Environment and climate change | The impact of climate change and loss of biodiversity on well-functioning ecosystems, temperatures and sea levels may cause unforeseen challenges to Fiskars Group. Regulations aiming to decrease dependence on fossil fuels and to reduce emissions, including the introduction of new tax policies, may raise energy prices and other associated costs. As regulations are tightening, and public awareness and expectations are growing, past measures to reduce the environmental impact may prove insufficient. The increasing frequency of natural catastrophes such as floods and typhoons and loss of biodiversity may interrupt and impact the operations of Fiskars Group. Water and resource scarcity related to exhaustible fossil materials are increasing long-term global challenges, leading to increased materials costs and the risk of production interruptions. Currently, the challenge is the limited availability and higher prices of raw materials such as certified wood materials, bio-based plastics and recycled raw materials. | Fiskars Group is constantly increasing its sustainability efforts and aims to minimize environmental risks through systematic risk management. Fiskars Group is committed to promoting the circular economy, combating climate change by taking actions to reduce emissions, reducing the use of energy and promoting renewable energy sources. One example of Fiskars Group’s commitment to ESG is the issuance of the sustainability-linked bond framework in 2023, with the aim of aligning the company’s long-term financing strategy with its sustainability targets. Multiple source contracts and ongoing research on alternative materials are utilized for managing price and availability risks. The financial implications of business interruptions caused by natural hazards are mitigated by insurance. | same level as previous year | |
| Seasonality and weather | The demand for Fiskars Group’s products across categories may be influenced by both seasonal variations and weather conditions. For Business Area Fiskars, the first half of the year is important for the gardening category. The demand for garden tools may be significantly influenced by weather conditions. Unfavorable weather, i.e., a cold and rainy spring, may negatively impact the sales of these products, while favorable conditions may boost their sales. In the winter months, a snowless winter may negatively impact sales of snow tools and vice versa. The back-to-school season during the second and third quarters of the year is also important for the scissors category in Business Area Fiskars. For Business Area Vita, the fourth quarter is the most important time of year due to the holiday season. Any negative developments related to product availability, demand, or increased costs in manufacturing or logistics during the important seasons may significantly affect the Group’s full-year net sales and profit. The seasonality of demand may differ from a typical year due to volatile market conditions. Extreme weather conditions, for example, storms and wildfires, are expected to increase in the future due to climate change and may also have a local impact on business operations. | Fiskars Group mitigates the impact of seasonality and changing weather conditions through a combination of an extensive and diverse product portfolio and a broad geographical footprint. This diversification ensures that fluctuations in demand or supply in specific regions or product categories are balanced by stability in others. To address potential supply chain disruptions, the Group may maintain safety stocks against possible supply chain disruptions to provide a critical buffer to sustain operations and meet customer demand. Additionally, reliance on multi-source contracts reduces dependence on any single supplier, thereby minimizing exposure to risks related to price volatility, material shortages or regional disruptions. The financial implications of property damage and business interruptions resulting from natural hazards are further mitigated through comprehensive insurance cover. This ensures that the Group can recover swiftly from unforeseen events, protecting its operational continuity and financial stability. | same level as previous year | |
| People | People are at the core of Fiskars Group’s strategy as the most important asset and enabler. The effective execution of the Growth Strategy relies heavily on having the right individuals in the right roles. A failure to maintain a competitive employer brand poses challenges to attracting and retaining the skilled and People are central to Fiskars Group’s strategy, being its most valuable asset and key enabler. Achieving strategic objectives relies on having the right individuals in the right roles. Risks such as an uncompetitive employer brand, insufficient efforts to foster an inspiring work environment, or the inability to ensure the workforce has necessary skills and capabilities may undermine the Group’s ability to attract and retain skilled professionals. Beyond talent retention, a lack of critical skills may impede the execution of strategic initiatives, delay key objectives, and limit the Group’s ability to innovate and adapt to evolving market conditions. This may lead to operational inefficiencies, increased costs and result in the loss of competencies, the departure of key employees and reduced workforce engagement. The evolving demands of modern work life, if not adequately addressed, risk reducing employee engagement, increasing absenteeism and turnover, and threatening the company’s strategic execution. Additionally, occupational health and safety risks threaten employee wellbeing and business continuity, with potential reputational and financial repercussions. | Fiskars Group actively promotes employee engagement by providing opportunities for professional growth, including leadership training and skills development, while fostering a diverse and inclusive culture. To monitor engagement and wellbeing, regular “Our Voice” employee surveys are conducted. Employee commitment is further strengthened through “MyFiskars,” a voluntary employee share savings plan, which rewards participants with one free matching share for every two shares acquired, provided they remain employed at Fiskars Group and retain their acquired shares until the end of the plan period. The Group is also committed to achieving its Group-level target of zero lost-time accidents (LTAs). To support this goal, multiple measures are implemented, including risk assessment workshops and LTA review boards, to identify and mitigate workplace safety risks effectively. | up from previous year | |
| Brand reputation due to ESG | As consumer expectations for ESG (environmental, social, and governance) performance continue to rise, failing to meet these standards, or insufficient transparency in the supply chain or suppliers’ actions, may harm the Group’s brand reputation. Issues such as biodiversity loss or unethical labor practices are under increasing scrutiny from consumers, investors and other stakeholders. Any perceived shortcomings in these areas risk eroding consumer trust and loyalty, potentially resulting in decreased net sales. Furthermore, negative publicity related to ESG matters may attract regulatory scrutiny, diminish the Group’s appeal to investors, and undermine efforts to attract and retain top talent. | Sustainability is a key element and one of the strategic growth enablers for Fiskars Group, and the Group has set concrete ESG targets and linked them to decision making. Sustainability, beyond posing a risk, represents an opportunity for Fiskars Group to further strengthen the reputation and consumer desire of its brands. More comprehensive information about the Group’s sustainability work and results can be found in the 2024 Sustainability Statements, ESRS 2 General Disclosures (Risk management and internal controls over sustainability reporting) and Corporate Governance Statement, published as part of this Annual Report. Fiskars Group strives to build strong and long-term relationships with trusted suppliers that live up to the Group’s corporate values. All suppliers and business partners must comply with the Supplier Code of Conduct, which outlines non-negotiable minimum standards on topics such as health and safety, environmental protection, and human and labor rights. Suppliers are instructed to adopt similar requirements for their suppliers and to monitor their supply chains. The Group conducts assessments on its finished goods suppliers. For raw material and component suppliers, as well as out-licensing partners, the Group uses third-party audit services to complement internal assessments. | up from previous year | |
| Acquisitions | While organic growth remains the cornerstone of Fiskars Group’s strategy, the company may also grow through targeted acquisitions. All acquisitions and integrations of acquired businesses include risks. Acquired businesses may not perform as expected, key individuals may decide to leave the company, the costs of integration may exceed expectations, and synergy effects may be lower than expected. Employee uncertainty during the integration process may arise, as the need to harmonize disparities in company cultures, ways of working, processes, tools and practices requires careful consideration. This transitional phase may lead to frustration and disengagement, impacting overall performance. | Fiskars Group follows an acquisition strategy characterized by a systematic and disciplined approach to identifying potential targets. The strategy ensures that only those targets that are closely aligned with the Group’s objectives and business goals are considered for acquisition. In the acquisition due diligence process, Fiskars Group conducts a thorough investigation of the target company’s business, market, financial, operational, legal and regulatory aspects. This is a crucial step in evaluating the value and potential of the target company, enhancing the likelihood of a successful acquisition. In this phase of the acquisition, Fiskars Group formulates an integration pre-plan, outlining the key steps needed for successful integration and synergy realization for post-acquisition. The post-acquisition integration program features multiple streams, each with detailed action plans and assigned responsible people to ensure a structured and coordinated approach to successful integration. | down from previous year | |
| Product safety and liability | Fiskars Group is committed to offering high quality and functional products that are safe to use and fit for purpose. As a manufacturer and seller of an extensive portfolio, including sharp cutting tools, food contact items and children’s products with a broad distribution, there is a risk that the Group’s products and packaging fail to meet or do not comply with safety, quality and legal requirements, causing a possible halt to deliveries or a product recall, reputational loss, indemnities, and lost sales. | Fiskars Group seeks to ensure all its products meet the pre-set high standards for quality, compliance and product safety. The product development process at Fiskars Group is based on continuous testing and learning, and the Group has invested in product development and quality assurance resources to mitigate against any potential product safety concerns at an early stage of product development. Comprehensive insurance cover and a product recall policy are in place to mitigate the financial impact of a recall and to precipitate the process of recalling potentially harmful products from the markets. | same level as previous year | |
| Compliance risks | ||||
| Legal and regulatory compliance | As a global company with operations in multiple countries, the changing legal and regulatory environment, both regional and supraregional, may expose Fiskars Group to compliance and litigation risks regarding corruption, tax, customs or export controls, among others. Furthermore, environmental, social and governance (ESG) related legislation and regulations are increasing and may affect the Group’s supply chain management and choices regarding product materials and manufacturing techniques, for example. Non-compliance with anti-trust/fair competition laws may result from someone in the Group or any of its agents failing to comply with anti-trust/competition laws and engaging in conduct that would distort a free and competitive market, e.g., through pricing, anti-competitive agreements or abuse of a dominant position. If the Group is not predictive in identifying changes in laws and regulations and fails to implement necessary compliance programs consistently in its business operations, this may cause financial or reputational damage and exposure to criminal liability. Fiskars Group registers, processes, stores and uses personal data in the course of its business operations, specifically regarding personal data related to consumers. There are increasing regulatory requirements for data protection, as well as accelerating changes in technology, and heightened consumer and public expectations. If the Group fails to fulfill its control obligations or processes or prevent or detect unauthorized access to personal information causing a violation of the GDPR or other applicable law or leakage of personal data, this may result in reputational damage and/or fines. | Fiskars Group is committed to ethical and responsible business practices, including respecting human rights and maintaining a strong emphasis on compliance. To enhance legal and regulatory compliance, Fiskars Group has implemented various compliance programs, policies and processes. There is a mandatory Code of Conduct training program for all employees and other mandatory training such as anti-trust training for targeted employee groups. All finished goods suppliers need to comply with Fiskars Group’s Supplier Code of Conduct requirements. Fiskars Group has established a cross-functional body to lead and govern its privacy and cybersecurity-related policies, processes and practices. To ensure accountability, a whistleblowing channel allows anonymous reporting of any misconduct, with the Group committed to taking swift corrective action when necessary. | up from previous year | |
| Intellectual property rights | Fiskars Group is committed to ethical and responsible business practices, including respecting human rights and maintaining a strong emphasis on compliance. To enhance legal and regulatory compliance, Fiskars Group has implemented various compliance programs, policies and processes. There is a mandatory Code of Conduct training program for all employees and other mandatory training such as anti-trust training for targeted employee groups. All finished goods suppliers need to comply with Fiskars Group’s Supplier Code of Conduct requirements. Fiskars Group has established a cross-functional body to lead and govern its privacy and cybersecurity-related policies, processes and practices. To ensure accountability, a whistleblowing channel allows anonymous reporting of any misconduct, with the Group committed to taking swift corrective action when necessary. | Potential IPR infringements are monitored through cross-functional processes and through online monitoring and systems. Fiskars Group has an enforcement policy in place that governs the enforcement actions that are taken to protect the exclusivity of Fiskars Group’s IPRs. Fiskars Group has a good understanding of the competitive landscape and provides its employees with training in IPRs. | same level as previous year | |
| Financial risks | ||||
| Currency rates | Fiskars Group is committed to ethical and responsible business practices, including respecting human rights and maintaining a strong emphasis on compliance. To enhance legal and regulatory compliance, Fiskars Group has implemented various compliance programs, policies and processes. There is a mandatory Code of Conduct training program for all employees and other mandatory training such as anti-trust training for targeted employee groups. All finished goods suppliers need to comply with Fiskars Group’s Supplier Code of Conduct requirements. Fiskars Group has established a cross-functional body to lead and govern its privacy and cybersecurity-related policies, processes and practices. To ensure accountability, a whistleblowing channel allows anonymous reporting of any misconduct, with the Group committed to taking swift corrective action when necessary. | Currency risks related to commercial cash flows are first managed by offsetting cash flows denominated in the same foreign currency. Purchases of production inputs and the sales of products are primarily denominated in the local currencies of the Fiskars Group companies. The remaining net exports or imports in foreign currencies are hedged up to 15 months in advance using currency forwards and swaps. | same level as previous year | |
| Tax and customs | Fiskars Group entities are subject to tax and customs audits in several countries. The risk that the company fails to comply with international or local tax or customs regulation may lead to additional tax obligations and changes in tax or import duty liabilities and may cause loss of profit, penalties and interest, and a negative reputational impact. | Fiskars Group closely monitors changes in tax and customs regulations and international agreements to proactively manage risks related to taxes and duties. Processes and controls are actively developed and maintained to ensure compliance with any local and international requirements. Fiskars Group promotes an open dialog with the tax and customs authorities and may seek advance rulings and other advance processes where necessary to secure its tax positions and customs compliance. | same level as previous year | |
| Financial investments | The financial investment portfolio of Fiskars Group consists mainly of investments in unlisted private equity funds. The value of the investments is exposed to fluctuations in the financial markets, including changes in interest rates and foreign exchange rates, and increases in credit risk. Financial investments are treated at fair value through profit or loss. | The foreign exchange risk is hedged up to 15 months in advance using currency forwards and swaps. | same level as previous year |