FISKARS CORPORATION INTERIM REPORT JANUA

FISKARS CORPORATION INTERIM REPORT JANUARY-MARCH 2004
(Unaudited)

FISKARS OPERATING RESULT FROM INDUSTRIAL OPERATIONS IMPROVED,
WÄRTSILÄ CONSOLIDATED AS AN ASSOCIATED COMPANY

– Operating profit from industrial operations improved by 25%
– Product offering streamlined; volume unchanged from previous year
– Corporate net sales decreased by 10% due to 16% weaker dollar rate 16 %
– Wärtsilä became Fiskars’ associated company at the beginning of the year

Corporation, January-March
EUR million Q1/2004 Q1/2003 2003
Net sales 155.5 173.6 620.3
Operating profit 12.4 9.9 -51.9
Operating result % 8.0 5.7 -8.4
Share of associated Company result 3.2 – –
Other investment income 1.3 26.5 31.3
Profit before taxes 14.0 32.6 -30.0
Earnings per share 0.20 0.40 -0.23
Cash-flow from operations -1.6 10.7 83.6

FISKARS CORPORATION

The market trend in the United States in Fiskars product sectors
was in the first months of the year positive while the uneven
development in Europe continued. Corporate net sales totaled EUR
155.5 million (173.6). Denominated in local currencies, net sales
remained on the previous year’s level.
The geographical breakdown of net sales has changed largely due
to currency exchange rates. In 2002, 68% of corporate net sales
were generated in North America. In 2003, the corresponding figure
was 60% and in the first quarter of 2004 it was 57%. Another
factor contributing to the change besides the currency rates has
been the structural measures implemented in the Corporation mainly
focused on the US units.
Fiskars’ operating profit improved to EUR 12.4 million (9.9).
Wärtsilä’s result will be consolidated in the results as from
the beginning of 2004. The impact of the holding on the first
quarter’s results was EUR 3.2 million. Fiskars increased its
holding in Wärtsilä on April 1, 2004, which resulted in a
participation of 21.2% of Wärtsilä’s shares and 28.7% of its
votes.

OPERATIONAL RESULTS

Fiskars Brands, Inc.

Fiskars Brands’ net sales totaled EUR 146 million (165). In the
United States, the sales volume was unchanged from the previous
year and declined slightly in Europe. Fiskars Brands streamlined
its product range reducing it by more than 10% during the year.
Fiskars Brands’ dollar denominated operating profit improved by
35% to USD 14.9 million (11.0) and the operating profit to net
sales ratio improved to 8.2% (6.2).
The US market for School, Office and Craft (FISKARS(R)) products
was tight and sales declined from the previous year’s level.
Profitability continued to be good.
Sales by Garden Tools & Accessories (FISKARS(R)) increased by 7%.
Flower pots where the production today is increasingly often
outsourced, were integrated in the US Garden Tools & Accessories
operations after the review period.
Sales by Housewares (FISKARS(R)) developed well in Scandinavia,
and operations in the UK have got off to a good start.
Outdoor Recreation (GERBER(R)) products continued their extremely
strong growth in the United States and their sales increased by
60%. Gerber received a significant recognition from the world’s
leading retailer Wal-Mart that awarded Gerber the distinction of
öSupplier of the Year 2003ö in the sporting goods category. The
LED lighting business acquired in January has further strengthened
Gerber’s strong position as a significant supplier of equipment
for recreation and leisure.
Sales by Consumer Electronics declined to some extent. The
products are marketed in North America mainly with the
PowerSentry(R) brand.
Resin Furniture manufacturer Syroco(R) increased its sales in the
American market in spite of the extremely harsh competitive
situation, and its result developed positively.
The European markets saw a positive growth in Scandinavia and
Eastern Europe but the anticipated growth in the German market has
not yet materialized. Also in Italy the weakened economic trend
affects demand for Fiskars products. In other Central European
countries, demand remained flat on the previous year. Sales of
garden products suffered to some extent of the delayed growing
season.

Inha Works

Inha Works’ net sales increased moderately in the first quarter
and amounted to EUR 7.6 million (7.5). Thanks to the excellent
reception of new Buster(R) models, the volume of current boat orders
grew. The sales and result of hinges developed positively; sales
of forged products remained unchanged from the previous year.
Inha Works’ operating profit was unchanged at EUR 1.0 million
(1.0).

Real Estate Operations

Real Estate Operations’ steady sales and profitability trend
continued.

Wärtsilä and other investment operations

Fiskars’ share of Wärtsilä’s result was EUR 3.2 million, and
income from other long-term investments amounted to EUR 1.3
million (26.5).
PERSONNEL

At the end of the review period, the total number of corporate
personnel was 4,043 (4,385); 883 (938) of these worked in Finland
and 2,191 (2,469) in North America. Fiskars Brands’ workforce
decreased both in the United States and Finland. Attritions in
Finland mainly related to fixed-period contracts.

WÄRTSILÄ BECOMES ASSOCIATED COMPANY

Wärtsilä is consolidated as an associated company in Fiskars’
financial statements in accordance with the equity method from the
beginning of 2004. The result for the first quarter includes a
share of Wärtsilä’s result based on a holding of 19.2%.
The difference between the portion of Wärtsilä’s equity held by
Fiskars and the cost of Wärtsilä shares acquired by Fiskars is
booked as consolidated goodwill according to the Finnish
Accounting Standards (FAS).
Fiskars’ share of Wärtsilä’s result for the review period was
EUR 13.6 million. This result included profits from the sale of
Assa Abloy shares; EUR 10.1 million of these were eliminated
against the corresponding share of equity. The result booked in
the income statement was EUR 3.2 million after goodwill
depreciation of EUR 0.2 million.
The acquisition cost of Wärtsilä shares in Fiskars’ balance
sheet at January 1, 2004 was EUR 192 million (EUR 16.72/share).
The portion of shareholders’ equity was EUR 176 million and
consolidated goodwill was at 16 million.
The total cost of the acquired Wärtsilä shares in the balance
sheet at March 31, 2004 was EUR 186 million (EUR 16.25/share). The
portion of shareholders’ equity was EUR 171 million and
consolidated goodwill was unchanged at EUR 16 million.
Fiskars is Wärtsilä’s principal shareholder. According to its
long-term investment strategy Fiskars increased its Wärtsilä
holding after the review period on April 1, 2004. At the beginning
of April, Fiskars held 21.2% of Wärtsilä’s shares and 28.7% of its
votes. The total price of the transactions was approximately EUR
22 million.

CAPITAL EXPENDITURE

The Corporation’s industrial investments during the review period
amounted to EUR 4 million (7). One of the biggest items relates to
Inha’s extension that will be completed in summer 2004. Other
investments were the acquisition of LED lighting operations and an
investment in maintenance and improvement of production.

INVESTMENT OPERATIONS

In addition to a holding in the associated company Wärtsilä,
Fiskars has made long-term fund investments whose value at the end
of the period was EUR 20.8 million. The proceeds from these
investments amounted to EUR 1.3 million. The total investment
income of EUR 26.5 million for the first quarter of 2003 includes
dividend income from Wärtsilä including avoir fiscal tax credit.

BALANCE SHEET AND FINANCING

The balance sheet total of the Group was EUR 706 million (824).
The reduction in the balance sheet total is mainly attributable to
the weaker dollar rate and impairments booked at the end of the
previous financial year.
Cash flow from operations was negative at EUR -1.6 million
(10.7) due to Wärtsilä’s dividend payments and the cyclical nature
of operations. Net cash flow from investments was EUR -1.1 million
(-14.7). Liquidity remained good.
After dividend payments, the shareholders’ equity has decreased
slightly since the year-end. Equity ratio was 49% (51% at the end
of December 2003). Gearing stayed on a good level at 66% (57%).

PURCHASE AND TRANSFER OF OWN SHARES

The Board of Directors has had an authorization to acquire shares
of the company. At the turn of the financial year, the Board had
exercised its authority and acquired 62,219 A-shares and 300 K-
shares for treasury at an aggregate price of EUR 615,007. In
addition, the company’s own A-shares acquired during 2 – 6 January
2004 on the basis of the same authorization numbered 30,281 at an
aggregate price of EUR 301.110. At March 31, 2004, the company
held 92,500 of its A-shares and 300 of its K-shares.

ANNUAL GENERAL MEETING 2004

The Annual General Meeting of Fiskars Corporation held on March
16, 2004 decided on a dividend payment of EUR 0.31/share on A-
shares and EUR 0.29/share on K-shares, in total EUR 16.8 million.
The Meeting determined that the number of Board members shall be
seven and the number of deputy members one.
Board members Mr. Göran J. Ehrnrooth, Mr. Mikael von Frenckell,
Mr. Gustaf Gripenberg, Mr. Olli Riikkala and Dr. Thomas Tallberg
were reelected, Mr. Paul Ehrnrooth and Ms. Ilona Ervasti-Vaintola
were elected as new members and Mr. Alexander Ehrnrooth was
elected deputy member. The term of the Board members and of the
deputy member expires at the Annual General Meeting 2005.
KPMG Wideri Oy Ab was elected auditor.
The Annual General Meeting authorized the Board of Directors to
decide during one year starting from March 16, 2004 on the
purchase and transfer of not more than 1,869,803 A-shares and not
more than 805,618 K-shares.

SHARE PRICES

The price of Fiskars Series A share on the Helsinki Exchanges at
the end of March was EUR 10.05 (EUR 9.40 at the end of 2003) and
the price of Series K share EUR 10.15 (10.45). The market
capitalization of the Company’s shares increased by 4% to EUR 558
million (537).

IFRS

Fiskars will according to its earlier announcement introduce IFRS
as the standard for its accounting practice at the beginning of
2005.

OUTLOOK

At the publication of this report, the selling season most
critical for Fiskars products is in its most active phase. The
first quarter met expectations and strengthened anticipations of
recovering economy and consumer demand particularly in the United
States. For Fiskars products, the sales trend of the early year
prevails also in April.
Changes in currency exchange rates will continue to have a
significant influence on Fiskars’ net sales and result for the
year.
It is estimated that an upturn in profitability has started, and
the result from the Corporation’s industrial operations is
expected to improve.

NEXT INTERIM REPORT

Fiskars will publish its next interim report on Monday August 9,
2004, differently from the previously announced Friday August 6,
2004.

Heikki Allonen
President and CEO

CONSOLIDATED 1-3 1-3 change 1-12
INCOME STATEMENT 2004 2003 % 2003
MEUR MEUR MEUR

NET SALES 155.5 173.6 -10 620.3

Cost of goods sold -109.4 -124.0 -12 -448.3
GROSS PROFIT 46.1 49.6 -7 172.0

Other operating costs -33.7 -36.7 -8 -139.6
Restructuring cost 0.0 -3.0 -100 -84.2
OPERATING PROFIT 12.4 9.9 25 -51.9

Share of assoc.comp.result 3.2 0.0 0.0
Income from investments 1.3 26.5 -95 31.3
Other financial income 0.0 0.1 -65 2.1
Financial expense -2.9 -3.9 -26 -11.5
PROFIT BEFORE TAXES 14.0 32.6 -57 -30.0

Taxes for the period -2.9 -10.2 -72 17.2
PROFIT (LOSS) FOR THE PERIOD 11.1 22.4 -51 -12.8

Earnings per share, euro 0.20 0.40 -0.23

CONSOLIDATED BALANCE SHEET 3/04 3/03 change 12/03
MEUR MEUR % MEUR
ASSETS

Fixed assets 190.2 269.5 -29 173.6
Long-term investments 194.6 219.5 -11 215.9
Inventories 124.4 151.8 -18 124.4
Financial assets 196.3 183.3 7 164.6
TOTAL 705.5 824.2 -14 678.4

EQUITY AND LIABILITIES

EQUITY
Share capital 55.4 55.4 0 55.4
Other equity 288.4 355.8 -19 293.0

PROVISIONS 7.4 7.0 6 8.9
LIABILITIES
Long-term 130.8 146.7 -11 123.4
Short-term 223.5 259.4 -14 197.8
TOTAL 705.5 824.2 -14 678.4

Equity/share, euro 6.21 7.43 -16 6.29
Equity ratio 49% 50% -2 51%
Net gearing 66% 68% -4 57%

GROSS INVESTMENTS 4.6 17.3 -73 37.8
AVERAGE NUMBER OF EMPLOYEES 4060 4127 -2 3633

1-3 1-3 change 1-12
2004 2003 % 2003
Currency rates:
USD average rate (I/S) 1.25 1.07 17 1.13
USD end-of-period (B/S) 1.22 1.09 12 1.26

CONSOLIDATED STATEMENT 1-3 1-3 1-12
OF CASH FLOWS 2004 2003 2003
MEUR MEUR MEUR
From oper. activities -1.6 10.7 83.6
From investm. activities -1.1 -14.7 -22.4
From financing 1.2 1.3 -63.8
CHANGE IN CASH -1.5 -2.7 -2.6
Cash at beginning of period 16.9 19.5 19.5
Currency transaction adjustm 0.2 -0.3 -0.1
CASH AT END OF PERIOD 15.6 16.5 16.9

NET SALES BY BUSINESS AREA 1-3 1-3 change 1-12
2004 2003 % 2003
MEUR MEUR MEUR
Fiskars Brands 146 165 -11 589
Inha Works 8 8 1 24
INDUSTRY TOTAL 154 172 -11 613
Corporate & real estate 2 2 9 10
Eliminations -1 -1 2 -3

CORPORATE TOTAL 156 174 -10 620

RESULT BY BUSINESS SEGMENT 1-3 1-3 change 1-12
2004 2003 % 2003
MEUR MEUR MEUR
Fiskars Brands 12.0 10.2 17 -51.4
Inha Works 1.0 1.0 1 2.5
INDUSTRY TOTAL 12.9 11.2 16 -48.9
Corporate & real estate -0.6 -1.3 55 -3.0

OPERATING PROFIT 12.4 9.9 25 -51.9
Share of assoc.comp.result 3.2 0.0 0.0
Income from investments 1.3 26.5 -95 31.3
CONSOLIDATED SEGMENTAL RESUL 16.9 36.4 -54 -20.6

NET SALES BY MARKET AREA 1-3 1-3 change 1-12
2004 2003 % 2003
MEUR MEUR MEUR
Finland 11 11 4 38
Scandinavia 16 16 -3 57
Other Europe 35 37 -6 119
North America 89 105 -16 389
Other 5 4 12 18
CORPORATE TOTAL 156 174 -10 620

Export from Finland 18 18 -2 53

Short delivery times are a prerequisite in Fiskars' fields
of operations. Therefore, the backlog of orders and changes
in it are not of significant importance.

CONTINGENCIES 3/04 3/03 12/03
MEUR MEUR MEUR
FOR THE COMPANY'S OWN
COMMITMENTS
Real estate mortgages 0 1 1
Pledged assets 0 0 0
Bills of exchange 1 0 1
Lease contingencies 53 61 54
Other contingencies 6 1 8
TOTAL CONTINGENCIES 60 63 64

NOMINAL VALUES OF DERIVATIVE
INSTRUMENTS

Forward exch. contracts 81 193 91
Interest rate swaps 87 92 87
FRA's 36 46 36

MARKET VALUES OF DERIVATIVE INSTRUMENTS
COMPARED TO NOMINAL VALUES

Interest rate swaps -4 -9 -5
FRA's 0 0 0

Nominal values also include closed contracts.