Fiskars Corporation
Half-year financial report
July 18, 2024 at 8:30 a.m. (EEST)
Fiskars Corporation Half-year Financial Report for January-June 2024
Another solid quarter in challenging market conditions - accelerating efficiency improvements
This release is a summary of the Fiskars Corporation's Half-year Financial Report for January-June 2024 published today. The complete Half-year Financial Report with tables is attached to this release as a pdf-file. It is also available at https://fiskarsgroup.com/investors/reports-and-presentations/annual-and-interim-reports/ and on the company website at www.fiskarsgroup.com. Investors should not rely on summaries of financial reports only, but should review the complete reports with tables.
April-June 2024 in brief:
- Comparable net sales1 decreased by 5.3% to EUR 252.9 million (Q2 2023: 267.3). Reported net sales increased by 4.9% to EUR 281.0 million (267.9).
- Comparable EBIT2 decreased to EUR 19.2 million (23.4), or 6.8% (8.7%) of net sales. EBIT decreased to EUR 0.3 million (22.2).
- Cash flow from operating activities before financial items and taxes increased to EUR 64.5 million (56.1).
- Free cash flow increased to EUR 49.3 million (41.6).
- Comparable earnings per share were EUR 0.10 (0.17). Earnings per share (EPS) were EUR -0.08 (0.16).
January-June 2024 in brief:
- Comparable net sales1 decreased by 5.5% to EUR 508.4 million (Q1-Q2 2023: 538.5). Reported net sales increased by 3.9% to EUR 564.0 million (542.8).
- Comparable EBIT2 decreased to EUR 44.2 million (54.7), or 7.8% (10.1%) of net sales. EBIT decreased to EUR 6.7 million (51.2).
- Cash flow from operating activities before financial items and taxes decreased to EUR 59.0 million (78.2).
- Free cash flow decreased to EUR 29.2 million (54.5).
- Comparable earnings per share were EUR 0.35 (0.44). Earnings per share (EPS) were EUR -0.05 (0.41).
1) Comparable net sales exclude 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, acquisition-related costs, and gains and losses from the sale of businesses. Comparable EBIT is not adjusted to exclude the EBIT contribution of acquisitions/divestments/disposals.
Guidance for 2024 (unchanged)
Fiskars Corporation expects comparable EBIT to be slightly above the 2023 level (2023: EUR 110.3 million).
Assumptions behind the guidance
The operating environment is expected to remain challenging and impact demand also in the second half of 2024. Visibility in the market remains limited, as uncertainties in the global economy persist.
The savings from the completed efficiency programs are expected to support EBIT, although they will be partially offset by wage inflation. Furthermore, Fiskars Group continues to drive forward a simplified way of operating, which enables further cost efficiency improvements.
As a result of the Georg Jensen acquisition, the Group's EBIT generation will shift even more toward the end of the year, highlighting the importance of the second half, and especially of the fourth quarter. During this period, the development of Business Area Vita's volumes will play a significant role.
President and CEO, Fiskars Group, Nathalie Ahlström:
"We delivered another solid quarter considering the challenging market conditions. Our comparable net sales decreased by 5% in the second quarter, whereas reported net sales, which include Georg Jensen, increased by 5%. We were able to protect profit with the Group's all-time high gross margin, which was driven by Vita, and savings from last year's cost efficiency programs. However, due to lower volumes, comparable EBIT declined to EUR 19 million. I was especially pleased to see free cash flow recover to a record high second quarter level after a soft start to the year.
We continue to rigorously drive forward a simplified way of operating, which is based on strong, transparent and end-to-end accountable Business Areas supported by a lean Group organization. Previously announced changes in the supply chain organization mark the final leg of our 2021-2025 transformation journey and result in significant efficiency improvements. The simplified way of operating provides a strong foundation for growth while continuing to drive systematic improvement and further cost savings.
We are maintaining our guidance for 2024 intact and expect comparable EBIT to be slightly above last year's EUR 110 million. As we have guided before, volume development in the second half and especially in the fourth quarter plays a large role in terms of the full-year EBIT generation.
Georg Jensen has now been part of Fiskars Group for three quarters, and the integration is nearly completed, with only IT integration ongoing. We are anticipating EUR 18 million in annual cost synergies from the acquisition, the majority of which is expected to be realized by the end of 2025. We are on track with approximately 75% of synergies now in implementation and already starting to deliver in the second quarter.
We measure the execution of our Growth Strategy through its four transformation levers: commercial excellence; direct-to-consumer (DTC); the U.S.; and China. Looking at the first half of the year, our gross margin, which is our key performance indicator for commercial excellence, increased by 210 bps to 48.7%. Comparable DTC sales decreased by 3%, mainly due to store closures as well as a slowdown of e-commerce in China in the second quarter. However, China's total comparable net sales increased by 10% in the first half of the year. In the U.S., comparable net sales decreased by 4% in the first half of the year, as retailers' cautiousness in taking inventories continued to affect demand.
During the second quarter, we invited our teams to enroll for the second plan period of Fiskars Group's employee share savings plan "MyFiskars". I am very pleased that at the moment over 10% of our employees are Fiskars Corporation shareholders. Our employees are the key to our success - it is important that they have a sense of ownership; as well as a feeling of being heard. In May, we conducted an employee engagement survey for all employees, with a 73% participation rate. The survey measures one of our key ESG key performance indicators, inclusion experience. The results showed that we have made good progress in this metric, improving from last year and coming closer to our target of being within the global top 10% of high performing companies.
We also received several ESG recognitions during the quarter. As a highlight, Fiskars Group was awarded the EcoVadis Platinum Medal, placing us among the top 1% of companies assessed within the same industry. In addition, we were included in ESG leaders' listings by both Time Magazine and the Financial Times.
Whilst we are not expecting any immediate improvement in the market conditions, the transformative actions we continue to take support us in reaching our ambitions in both the short and long term."
Group key figures
| EUR million (unless otherwise noted) | Q2 2024 | Q2 2023 | Change | Q1-Q2 2024 | Q1-Q2 2023 | Change | 2023 |
| Net sales | 281.0 | 267.9 | 4.9% | 564.0 | 542.8 | 3.9% | 1,129.8 |
| Comparable net sales1) | 252.9 | 267.3 | -5.3% | 508.4 | 538.5 | -5.5% | 1,071.5 |
| EBIT | 0.3 | 22.2 | -98.7% | 6.7 | 51.2 | -87.0% | 98.9 |
| Items affecting comparability in EBIT2) | 18.9 | 1.2 | 37.6 | 3.5 | 11.4 | ||
| Comparable EBIT3) | 19.2 | 23.4 | -18.2% | 44.2 | 54.7 | -19.1% | 110.3 |
| Comparable EBIT margin | 6.8% | 8.7% | 7.8% | 10.1% | 9.8% | ||
| EBITDA | 21.5 | 37.1 | -42.1% | 47.9 | 81.1 | -40.9% | 164.9 |
| Comparable EBITDA4) | 40.5 | 38.1 | 6.4% | 85.5 | 84.1 | 1.6% | 175.8 |
| Profit before taxes | -7.7 | 16.6 | -4.1 | 42.9 | 79.7 | ||
| Profit for the period | -6.0 | 12.6 | -3.6 | 33.1 | 70.0 | ||
| Earnings per share, EUR | -0.08 | 0.16 | -0.05 | 0.41 | 0.86 | ||
| Comparable earnings per share, EUR | 0.10 | 0.17 | -37.9% | 0.35 | 0.44 | -19.6% | 0.99 |
| Cash earnings per share (CEPS), EUR | 0.69 | 0.57 | 21.8% | 0.52 | 0.82 | -36.5% | 2.68 |
| Equity per share, EUR | 9.32 | 9.71 | -4.1% | 10.15 | |||
| Cash flow from operating activities before financial items and taxes | 64.5 | 56.1 | 15.1% | 59.0 | 78.2 | -24.5% | 247.5 |
| Free cash flow | 49.3 | 41.6 | 18.5% | 29.2 | 54.5 | -46.4% | 184.9 |
| Free cash flow/comparable net profit (LTM), % | 235.1% | 34.2% | 231.0% | ||||
| Net debt | 477.5 | 342.2 | 39.5% | 446.7 | |||
| Net debt/comparable EBITDA (LTM), ratio | 2.70 | 1.94 | 39.1% | 2.54 | |||
| Equity ratio, % | 45% | 53% | 47% | ||||
| Net gearing, % | 63% | 43% | 54% | ||||
| Capital expenditure | 13.0 | 10.2 | 27.7% | 23.8 | 20.3 | 17.5% | 50.8 |
| Personnel (FTE), average | 6,525 | 5,945 | 9.7% | 6,530 | 5,985 | 9.1% | 6,133 |
1) Comparable net sales exclude the impact of exchange rates, acquisitions and divestments.
2) In Q2 2024, items affecting comparability were mainly related to the acquisition of Georg Jensen and organizational changes.
3) EBIT excluding items affecting comparability. Comparable EBIT is not adjusted to exclude the EBIT contribution of acquisitions/divestments/disposals.
4) EBITDA excluding items affecting comparability. Comparable EBITDA is not adjusted to exclude the EBIT contribution of acquisitions/divestments/disposals.
In addition to the financial performance indicators defined by IFRS, Fiskars Group publishes certain Alternative Performance Measures to better reflect the operational business performance and to facilitate comparisons between financial periods. Calculation of these can be found on Fiskars Group's website, in the Investors section (Investors-> Financials-> Calculation of financial indicators).
FISKARS CORPORATION
Nathalie Ahlström
President and CEO
Webcast
A results webcast will be held on July 18, 2024 at 1:00 p.m. (EEST). It will be held in English and can be followed at https://fiskars.videosync.fi/q2-2024.
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.
Media and investor contacts:
Essi Lipponen, Director, Investor Relations, tel. +358 40 829 1192
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, Georg Jensen, Gerber, Iittala, Moomin Arabia, Royal Copenhagen, Waterford, and Wedgwood. Our brands are present in more than 100 countries and we have close to 450 own stores. We have approximately 7,000 employees and our global net sales in 2023 were EUR 1.1 billion.
We are driven by our common purpose: Pioneering design to make the everyday extraordinary. In 2024, we are celebrating our 375th anniversary. Since 1649, we have designed products of timeless, purposeful, and functional beauty, while driving innovation and sustainable growth.
Read more: fiskarsgroup.com
