Fiskars second quarter 2015: Steady sales performance, major step taken in growth strategy execution

Fiskars Corporation Interim Report July 29, 2015 at 8.30 a.m. EET Fiskars second quarter 2015: Steady sales performance, major step taken in growth strategy execution  This release is a summary of the Fiskars Corporation’s second quarter of 2015 and Interim Report January-June 2015 published today. The complete January–June 2015 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 our interim reports only, but should review the complete interim reports with tables. April–June 2015 in brief: Net sales increased by 26% to EUR 253.4 million (Q2 2014: 201.0) Comparable net sales (currency neutral and excluding the watering business acquired in 2014) increased by 2% Operating profit (EBIT) increased by 5% to EUR 19.4 million (18.5) Operating profit excluding non-recurring items increased by 8% to EUR 20.8 million (19.4) Change in fair value of investments and other financial income and expenses amounted to EUR 2.3 million (0.1) Cash flow from operating activities increased to EUR 11.6 million (6.4), mainly due to improved inventory management Earnings per share were EUR 0.17 (0.26) Operative earnings per share were EUR 0.08 (0.26) On May 10, 2015 Fiskars signed an agreement to acquire WWRD and their portfolio of iconic home and luxury brands. The acquisition was completed shortly after the second quarter, on July 1, 2015. Outlook for 2015 was updated on July 27, 2015: full-year net sales are expected to increase from 2014 levels and operating profit excluding non-recurring items to be at 2014 levels (previously: full-year net sales were expected to increase from 2014 levels and operating profit excluding non-recurring items to be below 2014 levels). Fiskars President and CEO, Kari Kauniskangas: ”Fiskars continued to grow steadily during the second quarter of 2015. The growth was primarily driven by the Functional Products and watering businesses in the Americas segment as well as a strong performance by the Living business in the Europe and Asia-Pacific segment. The Functional business in Europe and specifically in the Garden category suffered from a late spring resulting in a slow start to the second quarter. We continued to invest in the business in Asia, which was visible in the good sales performance in that region. Sales of the Outdoor business declined, however the improved product mix is starting to have a positive impact in the overall profitability in Outdoor. In May, we took a major step in the execution of the growth strategy. The company announced the acquisition of the WWRD group of companies, completed shortly after the second quarter ended. The transaction supports our goal of becoming a leading global branded consumer goods company in the luxury and premium home and lifestyle products market. WWRD is an excellent strategic fit, as the product offerings and geographical presence of Fiskars Living business and WWRD complement each other exceptionally well. Through the acquisition Fiskars adds strong, iconic brands, such as Wedgwood, Waterford, Royal Doulton and Royal Albert, to the brand portfolio, which was the key driver for the acquisition. On July 27, 2015 Fiskars updated its previous guidance. Full-year 2015 net sales are expected to increase from 2014 levels and operating profit excluding non-recurring items is now expected to be at 2014 levels, despite the increased costs related to investments into growth initiatives. Based on Fiskars’ evaluation, the market climate has slightly improved, allowing moderately better expectations for the full-year operating profit excluding non-recurring items. Fiskars has also done an initial evaluation of the impact of the WWRD business, and during the second half of 2015, WWRD is expected to improve its net sales compared to the corresponding period in previous year and generate a healthy operating profit, however the costs related to the acquisition dilute the impact on results in 2015. The acquisition of WWRD is estimated to have a neutral effect on Fiskars’ operating profit during the second half of 2015, and a positive effect on Fiskars’ operating profit during 2016.” Group key figures  EUR million Q2 2015 Q2 2014 Change Q1-Q2 2015 Q1-Q2 2014 Change  2014 Net sales 253.4 201.0 26% 483.4 385.2 26% 767.5 Operating profit (EBIT) 19.4 18.5 5% 35.1 26.7 32% 42.7 Non-recurring items 1) -1.4 -0.9 58% -2.7 -5.5 -50% -17.0 EBIT excl. non-recurring items 20.8 19.4 8% 37.8 32.1 18% 59.6 Share of profit from associated company   10.8     18.7   30.0 Net change in the fair value of investment portfolio 8.3     50.6     27.9 Profit before taxes 2) 21.7 29.3 -26% 119.3 43.9 172% 786.7 Profit for the period 2) 13.8 21.4 -35% 91.8 33.3 176% 773.3 Operative earnings/share, EUR3) 0.08   0.26 -67% 0.62 0.40 54% 0.76 Earnings/share, EUR 4) 0.17 0.26 -36% 1.12 0.40 175% 9.44 Equity per share, EUR       14.56 7.46 95% 14.06 Cash flow from oper. act.5) 11.6 6.4 81% -2.4 13.0   87.0 Equity ratio, %       66% 58%   73% Net gearing, %       -7% 34%   11% Capital expenditure 6.2 6.6 -6% 11.9 12.1 -1% 35.0 Personnel (FTE), average 4,478 4,203 7% 4,547 4,166 9% 4,243 1) In Q2 2015, the EMEA 2015 restructuring program and watering integration costs and in 2014, the EMEA 2015 restructuring program costs, write-downs and bargain purchase gain (badwill). 2) FY 2014 includes a non-recurring gain from the sale and revaluation of Wärtsilä shares of EUR 676.0 million on Oct 9, 2014. 3) Excl. the net change in the fair value of investment portfolio and in FY 2014, also the non-recurring gain from the sale and revaluation of Wärtsilä shares on Oct 9, 2014. 4) FY 2014 includes EUR 8.25 from the sale and revaluation of Wärtsilä shares on Oct 9, 2014. 5) Including a Wärtsilä dividend of EUR 11.4 million in Q1 2015 and EUR 26.9 million in Q1 2014. Analyst and press conference: An analyst and press conference will be held at 10 a.m. on July 29, 2015, at the company’s headquarters, Fiskars Campus, Hämeentie 135 A, Helsinki. Presentation material will be available at www.fiskarsgroup.com. FISKARS CORPORATION Kari Kauniskangas President and CEO Further information: – President and CEO Kari Kauniskangas, tel. +358 204 39 5500 – Head of Corporate Communications Maija Taimi, tel. +358 204 39 5031 Fiskars – celebrating centuries of pride, passion and design. Every day. Established in 1649 as an ironworks in a small Finnish village, Fiskars has grown to be a leading consumer goods company with globally recognized brands including Fiskars, Iittala, Gerber, Wedgwood and Waterford. With iconic products, strong brands and global ambitions, Fiskars’ mission is to enrich people’s lives in home, garden and outdoor. Fiskars’ products are available in more than 100 countries and the company employs around 8,600 people in 30 countries. Fiskars is listed on Nasdaq Helsinki. www.fiskarsgroup.com