Risks and business uncertainties
Fiskars Group’s business, net sales, and financial performance may be affected by several uncertainties. Fiskars Group has detailed the overall business risks and risk management in its Annual Report and on the company’s website at www.fiskarsgroup.com/investors.
The COVID-19 pandemic continues to impact societies around the world and pose a risk for the full-year performance. The pandemic has profoundly impacted consumers’ lives in terms of changes in, for example, disposable income, purchasing choices and consumer behavior. More time spent at home has led to increased demand for certain Fiskars Group product categories and this has presented challenges to Fiskars Group’s supply chain. The global supply chains in general are impacted by various disturbances caused by the pandemic, which can further affect Fiskars Group’s operations. Continuing safety concerns around COVID-19 can negatively impact sales in the Group’s physical stores. However, in the absence of an escalation of the pandemic in the company’s key markets, consumer confidence may also strengthen and demand may surge in some categories. In other categories, the demand can be negatively impacted if people spend less time at home, once the pandemic eases.
The seasonality of the product categories plays a role. For the gardening and watering categories in the Terra segment, the second quarter of the year is seasonally the most important one. The back-to-school and holiday seasons are important for the sales performance of Crea during the second half of the year. For the Vita segment, the fourth quarter is the most important quarter. Any negative developments related to product availability, demand or increased costs from manufacturing or logistics during the important seasons for each of the segments can significantly affect the full-year result. The seasonality of demand may differ from a typical year due to the current volatile market conditions and depending on the development of the pandemic.
Demand for some of Fiskars Group’s products is dependent on the weather, particularly garden tools and watering products during the spring and snow tools during the winter. Unfavorable weather conditions such as cold and rainy spring and summer and/or snowless winter can have a negative impact on the sale of these products whereas favorable conditions can boost their sales.
Fiskars Group operates globally, with a considerable part of the business in the U.S. and several suppliers in Asia. Growing signs of rising protectionism and consumer concerns over products’ country of origin may impact Fiskars Group’s business and operations. Ongoing trade tensions between the U.S. and China may have a further negative impact on Fiskars Group’s business and on the comparable EBITA in 2021.
With a significant part of the business in the U.S. and in other countries outside of the Euro zone, Fiskars Group is exposed to fluctuations in foreign currency rates. A weakening of the U.S. dollar or other currencies relative to the euro may have a material impact on the reported financial figures as a result of the translation exposure. Less than 20% of Fiskars Group’s commercial cash flows are exposed to fluctuations in foreign exchange rates.
Fiskars Group entities are subject to tax audits in several countries. It is possible that tax audits may lead to reassessments of taxes.
Updated July 30, 2021