Fiskars interim report January–March 2022
April 29, 2022 at 8:30 a.m. (EEST)
Fiskars interim report January–March 2022
Strong start to the year with solid momentum in our main markets
This release is a summary of the Fiskars Corporation’s January–March 2022 interim report published today. The complete interim report with tables is attached to this release as a pdf-file. It is also available at http://fiskarsgroup.com/investors/reports-presentations/interim-reports and on the company website at www.fiskarsgroup.com. Investors should not rely on summaries of the interim reports only, but should review the complete interim reports with tables.
First quarter 2022 in brief:
- Net sales increased by 10.1% to EUR 332.6 million (Q1 2021: 302.1)
- Comparable net sales1 increased by 13.5% to EUR 332.6 million (293.0)
- EBIT decreased to EUR 41.4 million (45.9)
- Comparable2 EBIT increased by 11.1% to EUR 51.8 million (46.6)
- Cash flow from operating activities before financial items and taxes decreased to EUR -55.9 million (10.7)
- Free cash flow was EUR -69.9 million (-2.8)
- Earnings per share (EPS) were EUR 0.38 (0.10)
Outlook for 2022 (unchanged):
Fiskars expects the comparable EBIT to increase from 2021 (2021: EUR 154.2 million).
There are ongoing challenges in global supply chains, as well as raw material and energy price inflation. While the company has managed to mitigate these factors, they continue to pose a risk for 2022 performance. The company also expects that there will be volatility between the quarters due to timing differences between cost inflation and respective mitigating actions.
President and CEO, Fiskars Group, Nathalie Ahlström:
We started the year with healthy demand and solid momentum in our main markets, and we delivered our eighth consecutive quarter of net sales growth. The organic, currency neutral growth of more than 13% was especially driven by our business area Terra, although both the Vita and Crea business areas also contributed to net sales growth. Growth was profitable, with a comparable EBIT margin of 15.6%.
We continued to execute our growth strategy, with a clear focus on our four transformation levers: commercial excellence; direct-to-consumer (DTC); the U.S.; and China. We started the execution of our growth strategy in 2021, and we have already been able to deliver tangible and sustainable results based on it. Our gross margin (excl. IAC) improved to 45.6%, our DTC sales grew 14% despite some short-term lockdowns in China due to Covid-19, and we grew in the U.S. and China, with a 16% and 53% increase in net sales, respectively.
We also continued to invest in our capabilities to ensure long-term competitiveness. Our strategic spending on digital acceleration and DTC growth was approx. EUR 5 million, and we continued recruiting critical capabilities, especially in e-commerce and in our own retail.
As of February, we have seen significant challenges in global supply chains and accelerated, broad-based input cost inflation, driven both by the war in Ukraine and Covid-19-related disruptions in China.
Although visibility on longer-term developments remains limited, we believe the actions we have either taken or are taking will enable us to mitigate the negative impacts of input cost inflation this year. However, we expect there will be volatility between the quarters due to timing differences between cost inflation and respective mitigating actions.
We have been able to serve our customers and avoid any major product availability challenges, which has been a competitive advantage for us. Our focus is now on ensuring the shipments for the rest of the year.
We made some structural changes in Q1. In February, we closed the divestment of our North American watering business. This transaction was announced in December 2021.
In March, we announced that we have decided to withdraw completely from the Russian market due to Russia’s attack on Ukraine, which we condemn in the strongest possible terms. The exit from the Russian market will not have a significant impact on our 2022 results, and the one-time impacts of the withdrawal are included in our Q1 Items Affecting Comparability.
We also took several important steps towards our circular economy target of having the majority of our net sales from circular products and services by 2030. In Q1 2022, 5% of our net sales were generated from product ranges made from recycled materials.
Consumers and third parties acknowledged our sustainability work. In Q1 2022, we received several external awards and recognitions including our listing on CDP’s 2021 Supplier Engagement Leaderboard, and a platinum level sustainability rating from Ecovadis. Also, our Fiskars brand was recognized in the Sustainable Brand Index 2022, which was published in March 2022. According to consumers, Fiskars is the most sustainable brand within the hobby and leisure category, and the 4th most sustainable brand overall in Finland.
We also made changes to our Fiskars Group leadership team to further support the implementation of our growth strategy. Charlene Patten Zappa was appointed Executive Vice President, Business Area Terra, and Anna Mindelöf was appointed Chief People Officer. Additionally, the Consumer Experience and Communications function was merged into the Business Areas and other functions to simplify the organization, accelerate business execution and improve accountability.
Although the business environment is getting more unpredictable and volatile, and not all impacts on our business can be foreseen, we continue to execute our growth strategy with confidence.
Based on the building blocks we have in place to execute our growth strategy, and the actions we are taking to mitigate current challenges in the business environment, we reiterate our full year 2022 guidance of improving comparable EBIT.
1) Comparable net sales excludes the impact of exchange rates, acquisitions and divestments
2) Items affecting comparability in EBIT include items such as restructuring costs, impairment or provisions charges and releases, integration-related costs, and gains and losses from the sale of businesses
Group key figures
|EUR million||Q1 2022||Q1 2021||Change||2021|
|Comparable net sales1)||332.6||293.0||13.5%||1,202.4|
|Items affecting comparability in EBIT2)||-10.3||-0.7||-11.5|
|Profit before taxes||42.6||41.9||1.7%||144.1|
|Profit for the period||31.4||8.1||87.5|
|Earnings per share, EUR3)||0.38||0.10||1.06|
|Equity per share, EUR||9.61||8.90||9.97|
|Cash flow from operating activities before financial items and taxes||-55.9||10.7||164.2|
|Free cash flow||-69.9||-2.8||95.3|
|Net Debt/EBITDA (LTM)||1.04||0.85||21.3%||0.71|
|Equity ratio, %||54%||54%||57%|
|Net gearing, %||26%||25%||18%|
|Personnel (FTE), average||6,164||5,908||4.3%||6,081|
1) Comparable net sales excludes the impact of exchange rates, acquisitions and divestments.
2) In Q1 2022, items affecting comparability were a capital gain from the sale of the North American Watering business, asset writedowns and provisions related to the decision to withdraw from the Russian market, and provisions related to changes in the Group leadership team.
3) In Q1 2021, earnings per share includes a negative impact of EUR 0.35 per share related to a tax reassessment case from year 2014 regarding forgiven intra-company loans from 2003, where company was obliged to pay 28,3 million in additional tax, interest and punitive increases.
President and CEO
A webcast on the first quarter will be held on April 29, 2022 at 11:00 a.m.(EEST). It will be held in English and can be followed at: https://fiskars.videosync.fi/q1-2022.
Presentation materials will be available at www.fiskarsgroup.com.
An on-demand version of the webcast will be available on the company website. Personal details gathered during the event will not be used for any other purpose.
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Fiskars Group in brief
Fiskars Group (FSKRS, Nasdaq Helsinki) is the global home of design-driven brands for indoor and outdoor living. Our brands include Fiskars, Gerber, Iittala, Royal Copenhagen, Moomin by Arabia, Waterford, and Wedgwood. Our brands are present in more than 100 countries and we have more than 350 own stores. We have 7,000 employees and our global net sales in 2021 were EUR 1.3 billion.
We are driven by our common purpose: Pioneering design to make the everyday extraordinary. Since 1649, we have designed products of timeless, purposeful, and functional beauty, while driving innovation and sustainable growth.
Read more: fiskarsgroup.com