Fiskars Corporation's Interim Report for January-September 2024
Fiskars Corporation
Interim report
October 24, 2024 at 8:30 a.m. (EEST)
Fiskars Corporation's Interim Report for January-September 2024
Another solid quarter - improved profitability despite lower volumes
This release is a summary of the Fiskars Corporation's Interim Report for January-September 2024 published today. The complete Interim 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.
July-September 2024 in brief:
- Comparable net sales[1] decreased by 7.3% to EUR 223.9 million (Q3 2023: 241.5). Reported net sales increased by 6.1% to EUR 255.9 million (241.3).
- Comparable EBIT[2] increased to EUR 24.3 million (17.9), or 9.5% (7.4%) of net sales. EBIT decreased to EUR -0.5 million (13.7).
- Cash flow from operating activities before financial items and taxes decreased to EUR -2.5 million (67.9).
- Free cash flow decreased to EUR -16.9 million (52.9).
- Comparable earnings per share were EUR 0.16 (0.15). Earnings per share (EPS) were EUR -0.07 (0.11).
- Comparable net sales[1] decreased by 6.1% to EUR 732.3 million (Q1-Q3 2023: 779.8). Reported net sales increased by 4.6% to EUR 819.9 million (784.0).
- Comparable EBIT[2] decreased to EUR 68.5 million (72.6), or 8.4% (9.3%) of net sales. EBIT decreased to EUR 6.2 million (64.9).
- Cash flow from operating activities before financial items and taxes decreased to EUR 56.5 million (146.1).
- Free cash flow decreased to EUR 12.3 million (107.4).
- Comparable earnings per share were EUR 0.47 (0.59). Earnings per share (EPS) were EUR -0.12 (0.52).
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 fourth quarter of 2024. Visibility in the market remains limited, as uncertainties in the global economy persist.
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, Business Area Vita's volumes are expected to play a significant role and reflect the seasonal pattern but are not assumed to exceed the previous year's levels.
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.
President and CEO, Fiskars Group, Nathalie Ahlström:
"We delivered another solid quarter considering the continued challenging market environment globally. Our comparable net sales decreased by 7%, and our reported net sales, which include Georg Jensen, increased by 6%.
We were able to deliver improved profitability despite lower volumes. In the third quarter, our comparable EBIT increased to EUR 24 million, driven by our ongoing SG&A savings and supply chain efficiency programs. I am happy to share that our gross margin reached 48.1%. This is an all-time high gross margin for a third quarter, increasing by 90 bps from last year.
The third quarter marked the first full year of Georg Jensen as part of Fiskars Group. We now operate on a business-as-usual basis and are well on track with cost synergy realization. The Georg Jensen acquisition is a great example of how we execute our M&A toolbox, and how we drive the brands. In January-September 2024, Georg Jensen already delivered significant profitability improvement compared to historical patterns.
Looking at our guidance for 2024, we are maintaining it intact and expect comparable EBIT to be slightly above last year's EUR 110 million. As a result of the Georg Jensen acquisition, our EBIT generation has shifted even more toward the end of the year, especially the fourth quarter. During this period, Business Area Vita's volumes are expected to play a significant role and reflect the seasonal pattern, but they are not assumed to exceed the previous year's levels. Savings from our completed efficiency enhancing programs are expected to support EBIT throughout 2024.
In line with our strategy, we continue building on growth fundamentals which will elevate us once the market environment improves. Our transformation levers - commercial excellence, Direct-to-Consumer (DTC), the U.S., and China, play an integral role in delivering our ambitions. Looking at the first three quarters of the year, our gross margin, which is our key performance indicator for commercial excellence, increased by 170 bps. Comparable DTC sales decreased by 3%, mainly due to store closures as well as the slowdown of e-commerce in China. Total comparable net sales in China increased by 3%, and we opened five new stores in the country - both good examples of our local teams' dedication in challenging market conditions. In the U.S., comparable net sales decreased by 8%, as retailers' cautiousness in taking inventories continued to affect demand.
As additional growth building blocks, we have launched several category expansion initiatives to surround the consumer. For instance, during the third quarter, Wedgwood introduced fine bone china pet bowls for the first time, Georg Jensen launched new home appliances and Moomin Arabia came out with a new textiles collection. These demonstrate the pioneering design spirit of our teams.
When it comes to sustainability, I am pleased to announce that we have reached our supplier engagement target ahead of schedule. We want to partner with the right suppliers who also have set science-based targets in order to reduce emissions throughout our value chain.
Although we are still not expecting any immediate improvement in the market conditions, our teams are fully focused on executing this upcoming end-of-year holiday season. I am confident that the actions we are taking support us going forward and continue to lay the foundation for stronger growth and performance in the future."
Group key figures
[][][][]
EUR million Q3 Q3 Change Q1-Q3 Q1-Q3 Change 2023
(unless otherwise 2024 2023 2024 2023
noted)
Net sales 255.9 241.3 6.1% 819.9 784.0 4.6% 1,129.8
Comparable net 223.9 241.5 -7.3% 732.3 779.8 -6.1% 1,071.5
sales[1)]
EBIT -0.5 13.7 6.2 64.9 -90.5% 98.9
Items affecting 24.8 4.2 62.4 7.7 11.4
comparability in
EBIT[2)]
Comparable 24.3 17.9 35.6% 68.5 72.6 -5.6% 110.3
EBIT[3)]
Comparable EBIT 9.5% 7.4% 8.4% 9.3% 9.8%
margin
EBITDA 20.1 29.9 -32.8% 68.0 111.0 -38.7% 164.9
Comparable 44.8 34.1 31.6% 130.3 118.2 10.3% 175.8
EBITDA[4)]
Profit before -4.3 11.8 -8.4 54.7 79.7
taxes
Profit for the -5.9 8.9 -9.4 42.1 70.0
period
Earnings per -0.07 0.11 -0.12 0.52 0.86
share, EUR
Comparable 0.16 0.15 6.1% 0.47 0.59 -20.6% 0.99
earnings per
share, EUR
Cash earnings per -0.01 0.75 0.50 1.57 -68.2% 2.68
share (CEPS),
EUR
Equity per share, 9.23 9.88 -6.6% 10.15
EUR
Cash flow from -2.5 67.9 56.5 146.1 -61.3% 247.5
operating
activities before
financial items
and taxes
Free cash flow -16.9 52.9 12.3 107.4 -88.5% 184.9
Free cash 130.5% 152.1% 231.0%
flow/comparable
net
profit (LTM), %
Net debt 528.8 336.3 57.2% 446.7
Net 2.81 2.07 36.1% 2.54
debt/comparable
EBITDA (LTM),
ratio
Equity ratio, % 46% 50% 47%
Net gearing, % 70% 42% 54%
Capital 13.4 12.1 11.0% 37.2 32.4 15.1% 50.8
expenditure
Personnel (FTE), 6,362 5,846 8.8% 6,474 5,939 9.0% 6,133
average
1. Comparable net sales exclude the impact of exchange rates, acquisitions and divestments.
2. In Q3 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 October 24, 2024 at 11:00 a.m. (EEST). It will be held in English and can be followed at https://fiskars.videosync.fi/q3-2024.
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:
Sanna Hellstedt, Director, Investor Relations (interim) and External Communications, tel. +358 40 553 3151
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