Stock exchange release
November 10, 2006
FISKARS CORPORATION INTERIM REPORT JANUARY?SEPTEMBER 2006
FISKARS CORPORATION INTERIM REPORT JANUARYSEPTEMBER 2006 (Unaudited) Fiskars third quarter net sales are at the previous year's level; increased operating profit for wholly-owned operations - Fiskars net sales were EUR 119.4 million (118.8) - The operating profit of EUR 13.0 million (24.1) incorporates restructuring costs of EUR 1.4 million (35.2) and income from the associate Wärtsilä was EUR 6.9 million (4.8) - Swedish Silva Group consolidated from the beginning of September FISKARS CORPORATION IN BRIEF EUR million Q3/06 Q3/05 1-9/06 1-9/05 2005 Net sales 119.4 118.8 409.8 394.7 509.9 Income from associate Wärtsilä 6.9 4.8 40.8 16.9 28.6 Operating profit 13.0 -24.1 65.8 13.6 22.7 Profit before taxes 10.6 -25.0 58.1 58.5 65.4 Profit for the period 9.8 -25.3 72.5 52.7 62.1 EPS, continuing operations 0.10 -0.34 0.74 0.66 0.75 Earnings per share, total 0.13 -0.33 0.94 0.68 0.80 Cash flow from operations 30.5 22.9 72.0 44.2 58.6 FISKARS CORPORATION Third Quarter, JulySeptember 2006 Fiskars net sales for the third quarter were on the same level as the previous year at EUR 119.4 million (118.8). The Corporation's operating profit was EUR 13.0 million (-24.1). The operating profit before restructuring costs of EUR 1.4 million (35.2) for the Corporation's wholly- owned operations was EUR 7.5 million. The comparable result for the previous year was EUR 6.3 million. The Corporation's income from associate company Wärtsilä increased to EUR 6.9 million (4.8). Net financial items were EUR 2.3 million (0.9) in the third quarter and the pre-tax profit was EUR 10.6 million (-25.0). The profit for the third quarter was EUR 9.8 million (-25.3) JanuarySeptember 2006 review period Fiskars net sales during the review period increased by 4%, totaling EUR 409.8 million (394.7). European sales represented 47% of net sales (43), while 45% (50) of net sales were generated in the US. The operating profit was EUR 65.8 million (13.6). The operating profit for the Corporation's wholly-owned operations before restructuring costs of EUR 6.4 million (33.8) was EUR 31.4 million (30.5). Net financial items were EUR 7.6 million (4.9) and at EUR 58.1 million (58.5) the profit before taxes was at last year's level. Last year's net result included a gain of EUR 49.8 million on the sale of Wärtsilä shares. Taxes in the income statement are taxes on continuing operations; for the review period the taxes were EUR 0.5 million (7.7). The profit from continuing operations during the review period was EUR 57.6 million (50.8). The total profit for the period, including the accumulated result from discontinued operations and the net gain on sale of discontinued operations, was EUR 72.5 million (52.7). Fiskars' continuing operations employed 3,195 people at the end of the period (3,306). At the beginning of the fiscal year the number was 3,220. Structural changes during the review period The extensive restructuring program announced in the Fall of 2005 to streamline the production structure of Fiskars Brands, Inc. continued as planned in the US. The implementation of the restructuring program will be completed during the current financial year. At the end of June, Fiskars Brands divested its non-core Power Sentry division. The deal has now been closed and noopen items remain in relation to the sale of the division. A supplier of primarily home electronics accessories, Power Sentry operated solely in the US market and had no manufacturing of its own. With a personnel of 64, the division's net sales in 2005 were EUR 41 million. The gain from the sale of the division net of related tax, totaling EUR 12.7 million, is reported under profit from discontinued operations. Fiskars end-of-June acquisition of the Silva Group was closed on the last day of August. The annual net sales of the Silva Group is some EUR 30 million and Silva is consolidated in Fiskars Corporation from the beginning of September. The acquisition includes Silva Sweden AB, its US subsidiary The Brunton Company, Silva Group's European sales companies, and a 70% holding in a production plant in China. Silva is well known for its compasses, but the company is also an important supplier of other outdoor recreation products, such as headlamps and binoculars. Silva will strengthen the Fiskars Brands Outdoor Recreation division by broadening the company's line of outdoor recreation gear and its clientele as well as through diversifying its distribution network, particularly in Europe. FISKARS BRANDS Third Quarter, JulySeptember 2006 Fiskars Brands net sales were EUR 110.5 million (110.9). After restructuring costs of EUR 1.4 million (35.2), the operating profit was EUR 3.3 million (-29.8). In Europe, sales continued to develop well, though the third quarter was somewhat slower than the first half of the year. In the US markets, sales development was modest, partly because the production of floor mats and watering hoses was discontinued. The operating profit includes non-recurring marketing costs of some EUR 1.6 million to improve Fiskars Brands position in the US market for garden tools in the spring of 2007. New products are being developed in all of Fiskars Brands core product groups while outsourcing is increased. Continued investments in quality control, supply chain management and marketing were made in the US markets in particular. JanuarySeptember 2006 review period Fiskars Brands net sales increased by 3% during the review period and totaled EUR 376.9 million (364.4). The operating profit was EUR 21.1 million (-5.0). At EUR 27.5 million (28.8), the operating profit before restructuring costs and other non-recurring items was at last year's level. Exchange rate fluctuations had no significant impact. Some 49% (54) of net sales were generated in the US during the review period, while 43% (39) were generated in Europe. Investments during the review period totaled EUR 32.3 million (19.2). In addition to the acquisition of the Silva Group they were mainly focused on improving production and logistics. Personnel of Fiskars Brands numbered 2,851 employees at the end of the period (2,906 at the beginning of the year). The restructuring program announced in Fall 2005 and the increase of outsourcing continues, decreasing the number of personnel. In the US, the number of employees decreased by 267. At the end of the review period, personnel in Finland numbered 445 employees, which is a decrease of 84 since the beginning of the fiscal year. However, the consolidation of the Silva Group within Fiskars Corporation increased the number of employees by 247, mainly in Sweden, the US, and China. INHA WORKS During the review period, Inha Works net sales increased by 11% from last year, totaling EUR 28.1 million (25.2). The operating profit was EUR 2.9 million (3.2). The rise in the cost of aluminum and the raw materials for plastics influenced manufacturing costs. Demand for boats has continued to grow and the Inha Works plant has been operating at full capacity. Contract manufacturing of the smallest boat models has improved the company's ability to meet delivery demands. In September Inha Works launched a new boat model, the Buster X, which adds to the company's range of mid-sized boats, fitting as it does between the extremely popular models L and XL. The stronger competition and increase in the cost of raw materials has weakened the results of products other than boats manufactured by Inha Works, i.e. hinges and forged products. No significant investments were made at Inha Works during the review period. At the end of the period personnel comprised 292 employees, which is 21 more than at the beginning of the fiscal year. REAL ESTATE GROUP Net sales for the Real Estate Group were EUR 6.7 million (7.4). The operating profit was EUR 5.2 million (1.9). The price level of the standing timber increased during the period, having decreased during the corresponding period last year. The result was further improved by the growth of timber during the third quarter. No significant individual real estate deals were made during the period. Investments by the Real Estate Group totaled EUR 1.5 million (1.6). WÄRTSILÄ Profits for the period for the associated company Wärtsilä improved from last year, with Fiskars' income from associate totaling EUR 40.8 million (16.9). A significant part of the improved profits was due to the gain from Wärtsilä's sale of Assa Abloy shares. Fiskars share of Wärtsilä capital was 16.7%, decreasing by 0.1 percentage points from the beginning of the fiscal year as holders of Wärtsilä options had exercised their right to acquire shares. The book value of Fiskars' investment in the associate increased somewhat to EUR 241.4 million (231.9 at the beginning of the year), of which EUR 37.9 million was goodwill. The market value of Fiskars shares in Wärtsilä was EUR 503.1 million at the end of the period. The equity of Fiskars Corporation includes Fiskars' share of the fair value reserve calculated in accordance with the IAS 39 standard included in Wärtsilä's consolidated shareholders' equity. The value of the Corporation's share of this reserve was EUR 17.3 million at the end of the review period, having been EUR 24.7 million at the beginning of the year. PROFIT AND TAXES Financial income and expenses during the period increased somewhat from the previous year, totaling EUR 7.6 million (4.9). The increase is mainly due to this year's lower investment income in combination with exchange translation differences. Profit before taxes was EUR 58.1 million (58.5). The previous year's result incorporated a EUR 49.8 million gain from the sale of Wärtsilä shares. Taxes for the review period have been calculated on the basis of accumulated income by market and the respective enacted tax rates, while also taking into consideration the availability of deferred tax assets. Taxes of EUR 7.5 million relating to the gain from the sale of the Power Sentry assets are included in the profit from discontinued operations and correspondingly the taxes for the period are EUR 0.5 million (7.7). Profit for the period from continuing operations was EUR 57.6 million (50.8). The profit from discontinued operations, which includes both the gain from the sale of the Power Sentry division as well as its accumulated profit was EUR 14.9 million (1.9). The profit for the review period was EUR 72.5 million (52.7) and earnings per share were EUR 0.94 (0.68). BALANCE SHEET AND FINANCING Total assets were EUR 723.8 million (702.7 at the beginning of the fiscal year). Changes in balance sheet items were minor, inventories decreased and trade receivables are at year-end levels due to normal seasonal changes in operations. The sale of the Power Sentry division decreased current assets, whereas the acquisition of the Silva Group brought an increase in these assets. The Silva acquisition increased the total of non-current assets by EUR 25.7 million. The Corporation's interest-bearing net debt was reduced by EUR 34.6 million during the rewiev period to EUR 105.4 million. This sum includes the EUR 45.1 million capital loan issued to shareholders at the end of 2004. Net cash from operating activities was EUR 72.0 million (44.2). Cash from investing activities totaled EUR 5.8 million, whereas the previous year's investing activities net cash flow was EUR 75.1 million positive due to the sale of Wärtsilä shares. The equity ratio improved further, and was 60% (57% at the beginning of the year). Net gearing also improved and was down to 24% (35% at the beginning of the year). The Corporation's financial situation and liquidity remain strong. In addition to cash and cash equivalents, the Corporation has significant credit facilities available. PURCHASE AND TRANSFER OF OWN SHARES Until the Annual General Meeting on March 20, the Board of Directors had been authorized to purchase and sell the Corporation's shares provided that the total nominal value of such shares and the votes carried by them did not exceed five percent (5%) of the share capital and the total votes in the company. At the Annual General Meeting, the Board was authorized to purchase and sell the Corporation's shares provided that the total nominal value of such shares and the votes carried by them did not exceed ten percent (10%) of the share capital and the total votes in the company. The Board did not exercise its authorization during the review period. At September 30, 2006, the company held in total 127,512 of its own A-shares and 420 K-shares. The holding has not changed during the review period, and the number of shares equals 0.2% of the entire share capital of the company. SHARE PRICES At the end of September, the price of the Fiskars A-shares listed on the Nordic List on the Helsinki Stock Exchange was EUR 10.45 (9.60 at the beginning of the year) and of the K-shares EUR 10.79 (9.90). The market value of the Corporation's share capital was EUR 818 million at the end of the review period. ANNUAL GENERAL MEETING 2006 The Fiskars Corporation Annual General Meeting held on March 20, 2006 decided to pay a dividend of EUR 0.45 per share of Series A, totaling EUR 24,667,641, and EUR 0.43 per share of Series K, totaling EUR 9,703,073.84, for a total of EUR 34,370,714.84. It was decided that the number of Board members be seven. Mr. Kaj-Gustaf Bergh, Mr. Alexander Ehrnrooth, Mr. Paul Ehrnrooth, Ms. Ilona Ervasti-Vaintola, Mr. Gustaf Gripenberg, Mr. Karl Grotenfelt, and Mr. Olli Riikkala were re-elected. The term of the Board members will expire at the end of the Annual General Meeting in 2007. KPMG Oy Ab was elected auditor. The Annual General Meeting authorized the Board of Directors to acquire or divest a number of the company's own shares at the Helsinki Exchanges in a proportion deviating from the shareholders' existing proportionate holdings at share prices quoted on the Helsinki Exchanges at the time of such acquisition or divestment, provided that the total nominal value of such shares and the votes carried by them do not exceed ten percent (10%) of the share capital and the total votes in the company, whereby the authorization concerns a maximum of 5,494,449 of the company's own Series A shares and a maximum of 2,256,570 of Series K. The authorization is valid for a period of one year from March 20, 2006. Convening after the Annual General Meeting, the Board elected Olli Riikkala its Chairman, and Alexander Ehrnrooth and Paul Ehrnrooth as Vice Chairmen. The Board appointed Gustaf Gripenberg Chairman of the Audit Committee and Alexander Ehrnrooth, Paul Ehrnrooth and Ilona Ervasti-Vaintola as its other members. The Board appointed Olli Riikkala Chairman of the Compensation Committee and Kaj- Gustaf Bergh and Karl Grotenfelt as its other members. SUBSEQUENT EVENTS SINCE THE END OF THE QUARTER On October 4, the Chairman of the Board, Mr. Olli Riikkala, notified the company that he is on sick leave until the end of the year. The Board therefore at its meeting on October 5 elected Mr. Kaj-Gustaf Bergh as Chairman for the remainder of the period. Mr. Riikkala stays on as a member of the Board. OUTLOOK A significant part of the operating profit of the Corporation's wholly-owned industrial operations is generated during spring and summer. The operations of Fiskars Brands, Inc. are characterized by seasonal fluctuations and quick, even monthly, changes. The outlook for the Corporation's continuing operations are unchanged from the previous year. The markets are expected to continue to develop favorably in Europe, while the tense competition will continue in the US. The restucturing project continues according to plan. Fiskars' income from associate Wärtsilä will form a significant part of the Corporation's operating profit. In July, Wärtsilä divested its share in Ovako and the transaction will be booked before the end of the year, after approval by the competition authorities, and will improve Fiskars net profit for the last quarter. Helsinki, November 10, 2006 Heikki Allonen President and CEO NOTES TO THE INTERIM REPORT This interim report has been prepared in accordance with International Accounting Standard 34 (IAS 34) Interim Financial Reporting. Use of estimates Complying with the IFRS standards in preparing financial statements requires the management to make estimates and assumptions. Such estimates affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the amounts of revenues and expenses. Although these estimates are based on the management's best knowledge of current events and actions, actual results may differ from these estimates. Income from associate The Fiskars Corporation participation in the associate Wärtsilä is one of the Corporation's reported business segments. The income from the associate is included in the operating profits as of January 1, 2006 and the figures for the corresponding periods have been adjusted accordingly. Discontinued operations The divestment of Power Sentry division is classified as discontinued operations. The gain on sale and the result from the operations during the beginning of the period less taxes are reported under discontinued operations in the Income Statement. The figures for the corresponding periods have been adjusted accordingly. As of January 1, 2006, Fiskars complies with the following amended and new IFRS standards: IAS 39 Financial instruments: Recognition and Measurement: Amendments after March 31, 2004: - Cash flow hedges of forecast intragroup transactions, issued April 14, 2005; effective from January 1, 2006 - Financial guarantee contracts; issued August 18, 2005; effective from January 1, 2006 The adoption of these amendments has not had any significant impact on the Corporation's quarterly financial statements. IAS 19 Employee benefits: amendment of actuarial gains and losses, group plans and disclosures; issued December 16, 2004; effective from January 1, 2006. - The amendment introduces an alternative option regarding the recognition of actuarial gains and losses for defined benefit pension plans and also adds new disclosure requirements. As the Corporation does not intend to change the accounting policy adopted for recognition of actuarial gains and losses, adoption of this amendment will only impact the format and extent of disclosures presented in the annual financial statements. IFRIC 4 interpretation: Determining whether an arrangement contains a lease; issued December 2, 2004; effective from January 1, 2006. - The adoption of this interpretation has no significant impact on the Corporation's quarterly financial statements. CONSOLIDATED INCOME STATEMENT 7-9 7-9 chg 1-9 1-9 chg 1-12 2006 2005 % 2006 2005 % 2005 MEUR MEUR MEUR MEUR MEUR NET SALES 119.4 118.8 1 409.8 394.7 4 509.9 Cost of goods sold -84.8 -89.0 -5 -288.0 -281.3 2 -364.2 GROSS PROFIT 34.6 29.8 16 121.8 113.4 7 145.6 Other operating income 0.6 0.9 -31 2.1 2.1 1 2.3 Sales and marketing expenses -16.7 -16.8 0 -53.9 -49.8 8 -65.9 Administration expenses -9.9 -9.3 6 -34.1 -34.7 -2 -45.3 Research and development costs -1.5 -1.2 19 -4.3 -3.8 14 -5.3 Other operating expenses -1.1 -32.2 -97 -6.6 -30.6 -78 -37.4 Income from associate 6.9 4.8 44 40.8 16.9 141 28.6 OPERATING PROFIT 13.0 -24.1 65.8 13.6 22.7 Gain on sale of Wärtsilä shares 49.8 49.8 Financial income and expenses -2.3 -0.9 153 -7.6 -4.9 57 -7.1 PROFIT BEFORE TAXES 10.6 -25.0 58.1 58.5 -1 65.4 Taxes -2.7 -1.5 78 -0.5 -7.7 -94 -7.3 PROFIT FROM CONTINUING OPERATIONS 7.9 -26.6 57.6 50.8 13 58.2 Profit from discontinued oper. 1.8 1.3 42 14.9 1.9 3.9 PROFIT (LOSS) FOR THE PERIOD 9.8 -25.3 72.5 52.7 38 62.1 Minority share 0.0 0.0 PROFIT FOR ORDINARY SHAREHOLDERS 9.8 -25.3 72.5 52.7 38 62.1 Earnings for ordinary shareholders per share, euro 0.13 -0.33 0.94 0.68 0.80 continuing operations 0.10 -0.34 0.74 0.66 0.75 discontinued operations 0.02 0.02 0.19 0.02 0.05 Earnings per share is undiluted. The company has no open option programs. CURRENCY RATES 1-9 1-9 chg 1-12 2006 2005 % 2005 USD average rate (I/S) 1.24 1.26 -2 1.24 USD end-of-period (B/S) 1.27 1.20 5 1.18 CONSOLIDATED BALANCE SHEET 9/06 9/05 chg 12/05 MEUR MEUR % MEUR ASSETS Intangible assets 20.0 11.7 71 13.5 Goodwill 22.1 12.7 74 12.8 Tangible assets 104.3 115.1 -9 110.9 Biological assets 32.8 30.3 8 29.9 Investment property 9.0 12.2 -27 9.4 Investments in associates 241.4 194.6 24 231.9 Other shares 4.8 4.9 -3 4.8 Other investments 1.5 1.4 9 1.3 Avoir fiscal tax receivables 7.6 8.1 -7 9.0 Deferred tax assets 30.7 39.2 -22 35.0 LONG-TERM TOTAL 474.1 430.2 10 458.5 Inventories 112.8 128.8 -12 129.3 Trade receivables 90.8 99.1 -8 86.9 Other receivables 2.4 5.3 -54 6.4 Cash in hand and at bank 43.6 45.2 -4 21.7 CURRENT TOTAL 249.7 278.3 -10 244.2 ASSETS TOTAL 723.8 708.5 2 702.7 EQUITY AND LIABILITIES Shareholders' equity 431.8 388.6 11 402.7 L/t interest bear.debt 125.6 130.2 -4 124.5 L/t non-interest bear.debt 2.6 4.5 -41 2.7 Deferred tax liabilities 21.1 20.8 1 17.6 Pension liability 14.8 13.1 13 15.5 Provisions 5.0 3.3 52 2.9 LONG-TERM LIABILITY TOTAL 169.1 171.9 -2 163.1 S/t interest bear.debt 23.4 40.6 -42 37.2 Trade payable and other non-interest bearing debt 93.6 99.2 -6 94.6 Income tax payable 5.8 8.3 -30 5.1 CURRENT LIABILITY TOTAL 122.9 148.1 -17 136.9 EQUITY AND LIABILITIES TOTAL 723.8 708.5 2 702.7 CONSOLIDATED STATEMENT 1-9 1-9 1-12 OF CASH FLOW 2006 2005 2005 MEUR MEUR MEUR CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxes 58.1 58.5 65.4 Adjustments for Depreciation 18.6 50.0 58.5 Income from associate -40.8 -16.9 -28.6 Investment income (net) -0.3 -52.1 -52.3 Interest expense (net) 7.9 7.1 9.5 Chg in value of biological assets -2.9 0.1 0.5 Dividends from associates 23.7 17.1 17.1 Dividends received, other 3.6 0.1 0.1 Financial costs paid (net) -6.5 -7.1 -8.2 Taxes paid -2.5 -4.4 -6.7 Change in interest free assets -9.2 -5.9 8.1 Change in inventories 12.3 -11.0 -7.8 Change in interest free liabilities 9.9 8.6 3.0 NET CASH FROM OPERATING ACTIVITIES(A) 72.0 44.2 58.6 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions -25.5 -11.9 Transact. in assoc. comp. shares 45.6 74.4 Capital expenditure -12.2 -23.9 -18.8 Proceeds from sale of fixed assets 2.5 0.6 2.9 Sale of other l/t investments 1.8 103.7 1.7 Purchase of other l/t investments -5.2 -52.8 -0.2 Cash flow from discontinued operations 32.9 1.9 3.9 NET CASH USED IN INVESTING ACTIVITIES(B) -5.8 75.1 52.0 CASH FLOWS FROM FINANCING ACTIVITIES New long-term loans 14.3 5.0 Amortization of l/t loans -3.1 -27.5 -32.8 Changes in short-term loans -22.7 -37.4 -39.8 Financial leases, payments -2.2 -1.3 -3.7 Other financing items -1.3 -3.1 Dividends paid -34.4 -22.8 -22.8 NET CASH FLOW FROM FINANC. ACTIVITIES(C) -48.0 -85.1 -102.3 Translation difference (D) 3.6 -4.5 -2.3 CHANGE IN CASH (A+B+C+D) 21.9 29.6 6.1 Cash at beginning of period 21.7 15.6 15.6 Cash at end of period 43.5 45.2 21.7 STATEMENT OF CHANGES IN EQUITY Equity holders of the parent companMinorit Total Other interest Share Own reser-Transl.Retain. capital shares vesadjustm earn. MEUR MEUR MEUR MEUR MEUR MEUR MEUR Dec.31,2004 IFRS 77.5 -0.9 0.0 -1.4 260.5 0.0 335.8 Adoption of IAS 39 Fiskars Corporation -0.4 0.4 0.1 Associate Wärtsilä 37.8 37.8 Jan.1,2005 IFRS 77.5 -0.9 37.5 -1.4 261.0 0.0 373.7 Translation differences 1.2 1.2 Change in fair value reserve 0.4 0.4 Chg in investment in associate -6.9 -6.9 Other changes in associate -10.3 0.6 0.0 -9.7 NET INCOME RECOGNISED DIRECTLY IN EQUITY -16.7 1.8 0.0 0.0 -15.0 Net profit for the period 52.7 52.7 TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD -16.7 1.8 52.7 0.0 37.7 Dividend distribution -22.8 -22.8 Sep.30,2005 IFRS 77.5 -0.9 20.7 0.4 290.9 0.0 388.6 Translation differences 0.2 0.2 Other changes in associate 4.0 0.6 -0.1 4.5 NET INCOME RECOGNISED DIRECTLY IN EQUITY 4.0 0.8 -0.1 0.0 4.7 Net profit for the period 9.5 9.5 TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD 4.0 0.8 9.4 0.0 14.2 Dec.31,2005 IFRS 77.5 -0.9 24.7 1.2 300.3 0.0 402.7 Translation differences -1.4 -1.4 Change in fair value reserve, associate -7.4 -7.4 Other changes in associate -0.2 0.0 -0.2 NET INCOME RECOGNISED DIRECTLY IN EQUITY -7.4 -1.7 0.0 0.0 -9.1 Net profit for the period 72.5 0.0 72.5 TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD -7.4 -1.7 72.5 0.0 63.5 Dividend distribution -34.4 -34.4 Sep.30,2006 IFRS 77.5 -0.9 17.3 -0.5 338.4 0.0 431.8 Fiskars shares of associated company Wärtsilä's fair value reserve and its changes are specified in the other reserves above. KEY FIGURES 9/06 9/05 chg 12/05 % Equity/share, euro 5.58 5.02 11 5.20 Equity ratio 60% 55% 57% Net gearing 24% 32% 35% Equity, meur 431.8 388.6 11 402.7 Net interest bear.debt, meur 105.4 125.6 -16 140.0 Average number of employees 3200 3489 -8 3426 SEGMENT INFORMATION 7-9 7-9 chg 1-9 1-9 chg 1-12 NET SALES 2006 2005 % 2006 2005 % 2005 MEUR MEUR MEUR MEUR MEUR Fiskars Brands 110.5 110.9 0 376.9 364.4 3 472.0 Inha Works 5.6 5.8 -4 28.1 25.2 11 32.4 Real Estate 3.9 3.1 28 6.7 7.4 -10 8.9 Unallocated and eliminations -0.5 -0.9 -39 -1.8 -2.3 -21 -3.5 CORPORATE TOTAL 119.4 118.8 1 409.8 394.7 4 509.9 Export from Finland 10.0 9.0 11 43.2 43.1 0 55.5 SEGMENT INFORMATION 7-9 7-9 1-9 1-9 1-12 RESULT 2006 2005 2006 2005 2005 MEUR MEUR MEUR MEUR MEUR Fiskars Brands 3.3 -29.8 21.1 -5.0 -5.6 Inha Works 0.2 0.6 2.9 3.2 3.5 Real Estate 3.2 1.3 5.2 1.9 2.0 Associate Wärtsilä 6.9 4.8 40.8 16.9 28.6 Unallocated and eliminations -0.7 -1.1 -4.2 -3.5 -5.8 OPERATING PROFIT 13.0 -24.1 65.8 13.6 22.7 SEGMENT INFORMATION 7-9 7-9 1-9 1-9 1-12 DEPRECIATIONS 2006 2005 2006 2005 2005 MEUR MEUR MEUR MEUR MEUR Fiskars Brands 5.4 37.6 16.6 48.2 55.7 Inha Works 0.3 0.2 0.9 0.7 1.0 Real Estate 0.3 0.3 1.0 0.9 1.3 Unallocated and eliminations 0.0 0.1 0.1 0.2 0.5 CORPORATE TOTAL 6.0 38.3 18.6 50.0 58.5 SEGMENT INFORMATION 7-9 7-9 1-9 1-9 1-12 CAPITAL EXPENDITURE 2006 2005 2006 2005 2005 MEUR MEUR MEUR MEUR MEUR Fiskars Brands 26.3 4.6 32.3 19.2 24.1 Inha Works 0.0 0.9 0.6 2.9 3.4 Real Estate 0.2 0.3 1.5 1.6 2.9 Associate Wärtsilä 6.0 9.2 30.2 Unallocated and eliminations 0.0 0.1 0.0 0.4 0.4 CORPORATE TOTAL 26.6 11.9 34.5 33.3 60.9 GEOGRAPHICAL SEGMENT 7-9 7-9 chg 1-9 1-9 chg 1-12 NET SALES BASED ON CUSTOMER 2006 2005 % 2006 2005 % 2005 LOCATION MEUR MEUR MEUR MEUR MEUR Europe 51.8 44.7 16 191.8 170.1 13 219.3 USA 58.1 65.2 -11 185.4 197.3 -6 253.3 Rest of the world 9.5 8.9 6 32.7 27.3 20 37.3 CORPORATE TOTAL 119.4 118.8 1 409.8 394.7 4 509.9 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. IMPACT OF ACQUISITIONS ON THE CONSOLIDATED BALANCE SHEET During the reporting period Fiskars has acquired Silva Sweden AB with its subsidiaries and Superknife assets in US 9/06 MEUR Preliminary specification of Silva acquisition costs Acquisition costs 25.6 Acquired assets -14.9 GOODWILL 10.7 Specification of acquired assets: Tangible and intangible assets 10.8 Inventories 8.8 Receivables 5.2 Cash and cash equivalents 0.2 Minority interest 0.0 Non-current liabilities -4.2 Current liabilities -5.9 TOTAL 14.9 CONTINGENCIES 9/06 9/05 12/05 MEUR MEUR MEUR FOR THE COMPANY'S OWN COMMITMENTS Bills of exchange 0 0 0 Lease contingencies 20 23 23 Other contingencies 9 1 1 TOTAL 29 24 24 GUARANTEES AS SECURITY FOR OTHER PARTIES' COMMITMENTS Real estate mortgages 2 2 2 TOTAL CONTINGENCIES 31 25 26 NOMINAL AMOUNTS OF DERIVATIVES Forward exch. contracts 46 140 145 Currency options 4 4 Interest rate swaps 17 FRA's 66 59 MARKET VALUE VS. NOMINAL AMOUNTS OF DERIVATIVES Forward exch. contracts 0 -3 -2 Currency options 0 FRA's 0 0 Forward exchange contracts have been valued at market in the financial statements.