Fiskars Oyj Abp — Earnings Release 2019

Feb 5, 2020

FISKARS FINANCIAL STATEMENT RELEASE 2019: Decrease in comparable net sales, comparable EBITA and cash flow

FISKARS FINANCIAL STATEMENT RELEASE 2019: Decrease in comparable net sales, comparable EBITA and cash flow

Fiskars Corporation
Financial Statement Release
February 5, 2020 at 8:30 a.m. EET

FISKARS FINANCIAL STATEMENT RELEASE 2019: Decrease in comparable net sales,
comparable EBITA and cash flow

This release is a summary of the Fiskars Corporation’s fourth quarter of 2019
and Financial Statement Release 2019 published today. The complete Financial
Statement Release 2019 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 financial
reports only, but should review the complete Financial Statement Release with
tables.

Fourth quarter 2019 in brief:

· Net sales decreased by 5.0% to EUR 308.0 million (Q4 2018: 324.1)
· Comparable net sales1) decreased by 5.6% to EUR 308.0 million (326.3)
· EBITA decreased by 26.5% to EUR 32.0 million (43.5)
· Comparable2) EBITA decreased by 28.1% to EUR 35.1 million (48.8)
· Cash flow from operating activities before financial items and taxes
decreased to EUR 84.7 million (92.2)
· Earnings per share (EPS) were EUR 0.26 (0.33)

January-December 2019 in brief:

· Net sales decreased by 2.5% to EUR 1,090.4 million (Q1-Q4 2018: 1,118.5)
· Comparable net sales1) decreased by 3.9% to EUR 1,086.6 million (1,130.1)
· EBITA decreased by 35.2% to EUR 72.9 million (112.5)
· Comparable2) EBITA decreased by 25.5% to EUR 90.6 million (121.7)
· Cash flow from operating activities before financial items and taxes
decreased to EUR 117.5 million (136.8)
· Earnings per share (EPS) were EUR 0.63 (1.00)

Proposal for distribution of dividend:

The Board of Directors proposes to the Annual General Meeting that a dividend of
EUR 0.56 per share shall be paid for the financial period that ended on December
31, 2019. The dividend shall be paid in two instalments of EUR 0.28 per share
each.

Outlook for 2020:

In 2020, Fiskars expects the comparable2 EBITA to increase from 2019.
Fluctuations in currency rates might have a considerable impact on comparable
EBITA.

Fiskars continues to invest in future growth and is focused on improving
profitability through the ongoing transformation programs, which are expected to
be completed by the end of 2021. Therefore, the company is not providing an
outlook for comparable net sales for 2020.

Furthermore, there are uncertainties in several key markets, such as potential
changes in tariffs or repercussions from the novel corona virus outbreak that
could have an impact on the full year development.

President and CEO, Fiskars Group, Jaana Tuominen:

“2019 was a challenging year for us. While several elements of our portfolio
developed positively during the important fourth quarter, the progress we are
making on our strategic priorities to achieve our long-term ambitions will
require some more time to make full impact. Consequently, comparable net sales
and comparable EBITA decreased during the quarter. While the comparison period
figures from Q4 2018 were high, we are not content with the development. At the
beginning of the quarter we experienced IT issues relating to an external
service provider, which disrupted our deliveries and adversely impacted our
financial performance during the quarter. On a positive note, in the fourth
quarter we delivered increased sales in the direct channel, particularly in e
-commerce, and improved our efficiencies.

I was pleased to see that net sales in gardening, which is the largest category
in Functional, increased across the markets in 2019, demonstrating the strength
of our global brand positioning. The fourth quarter was no exception to this.
While the net sales in Functional decreased due to challenges in the Outdoor
category, the profitability increased during the quarter. During the year, the
positive development was overshadowed by external factors impacting our
business. The tariffs on imports from China to the U.S. continued to have a
negative impact on profitability in the fourth quarter as well. However, going
forward the cost impact of the current tariffs is mitigated. Additionally, the
unusually rainy weather conditions in the U.S. impacted the watering category
during the year. As a result, the comparable net sales and comparable EBITA in
Functional decreased in 2019.

In the Living segment the fourth quarter was challenging. Comparable net sales
decreased as a result of difficulties in several markets. Comparable EBITA also
decreased, weighed by lower volumes and a weakened product mix. As a whole, the
year 2019 was intense for the Living business. We have continued with our
strategic channel transformation and I am delighted that in the fourth quarter
net sales in the direct channel increased, particularly in e-commerce. As the
retail environment continues to change, we have taken action to reduce the
number of outlet stores and move away from less profitable channels. We have
also continued to increase efficiencies and are seeing good progress in our
focus areas. As we progress with our transformation, I believe the actions we
are taking will improve our performance.

In December, we announced the plan to renew our organizational structure and
simplify the organization, creating one Fiskars Group. We are strengthening our
competitiveness and focusing on the consumer by planning to remove overlaps and
simplify the organization. We see potential to improve our performance,
especially by working more closely together in the planned global sales function
and strengthening our commercial capabilities. The planning is proceeding, and
we intend to implement the new structure by the end of the first quarter of
2020.

I am confident in our ability to improve performance and create value for our
shareholders. The planned new structure will help us leverage the full potential
of our strong brands, further develop common ways of working and serve our
customers better. We will continue our investments in areas that we believe will
bring us sustainable value in the long-term as we drive further cost reductions
through the on-going programs.

In 2020, we expect the comparable EBITA to increase from 2019. Fluctuations in
currency rates might have a considerable impact on comparable EBITA. We continue
to invest in future growth and are focused on improving profitability through
the ongoing transformation programs, which are expected to be completed by the
end of 2021. Therefore, the company is not providing an outlook for comparable
net sales for 2020. Furthermore, there are uncertainties in several key markets,
such as potential changes in tariffs or repercussions from the novel corona
virus outbreak that could have an impact on our full year development. While we
do not give an outlook for comparable net sales in 2020, our long-term financial
targets remain unchanged."

1) Comparable net sales excludes the impact of exchange rates, acquisitions and
divestments
2) Items affecting comparability in EBITA includes items such as restructuring
costs, impairment or provisions charges and releases, integration-related costs,
and gain and loss from the sale of businesses

Group key figures

[][][][][]
+------------------------------------+-----+-----+------+-------+-------+------+
|EUR million | Q4| Q4|Change|  |  |Change|
+------------------------------------+-----+-----+------+-------+-------+------+
|  | 2019| 2018|  | 2019| 2018|  |
+------------------------------------+-----+-----+------+-------+-------+------+
|Net sales |308.0|324.1| -5.0%|1,090.4|1,118.5| -2.5%|
+------------------------------------+-----+-----+------+-------+-------+------+
|Comparable net sales[1)] |308.0|326.3| -5.6%|1,086.6|1,130.1| -3.9%|
+------------------------------------+-----+-----+------+-------+-------+------+
|EBITA | 32.0| 43.5|-26.0%| 72.9| 112.5|-35.2%|
+------------------------------------+-----+-----+------+-------+-------+------+
|Items affecting comparability in | -3.1| -5.2|-41.3%| -17.7| -9.2| 92.0%|
|EBITA[2)] | | | | | | |
+------------------------------------+-----+-----+------+-------+-------+------+
|Comparable EBITA | 35.1| 48.8|-28.1%| 90.6| 121.7|-25.5%|
+------------------------------------+-----+-----+------+-------+-------+------+
|Operating profit (EBIT) | 28.5| 32.5|-12.2%| 60.1| 91.6|-34.4%|
+------------------------------------+-----+-----+------+-------+-------+------+
|Profit before taxes  | 26.5| 29.9|  | 63.2| 103.0|  |
+------------------------------------+-----+-----+------+-------+-------+------+
|Profit for the period  | 21.3| 26.7|  | 52.4| 81.7|  |
+------------------------------------+-----+-----+------+-------+-------+------+
|Net change in the fair value of | 0.0|-94.5|  | -20.4| -118.8|  |
|investment portfolio | | | | | | |
+------------------------------------+-----+-----+------+-------+-------+------+
|Earnings/share, EUR | 0.26| 0.33|  | 0.63| 1.00|  |
+------------------------------------+-----+-----+------+-------+-------+------+
|Equity per share, EUR |  |  |  | 9.34| 14.80|-36.9%|
+------------------------------------+-----+-----+------+-------+-------+------+
|Cash flow from operating activities | 84.7| 92.2| -8.1%| 117.5| 136.8|-14.1%|
|before financial items and taxes[3)]| | | | | | |
+------------------------------------+-----+-----+------+-------+-------+------+
|Equity ratio, %[4)] |  |  |  | 56%| 70%|  |
+------------------------------------+-----+-----+------+-------+-------+------+
|Net gearing, %[4)] |  |  |  | 34%| 11%|  |
+------------------------------------+-----+-----+------+-------+-------+------+
|Capital expenditure | 12.6| 14.2|-11.4%| 40.0| 46.2|-13.5%|
+------------------------------------+-----+-----+------+-------+-------+------+
|Personnel (FTE), average |6,592|7,094| -7.1%| 6,840| 7,219| -5.3%|
+------------------------------------+-----+-----+------+-------+-------+------+

1) Using comparable exchange rates and excluding Leborgne divestment.
2) In Q4 2019, items affecting comparability consisted mainly of items related
to the Living transformation program.
3) The IFRS 16 accounting change had a positive impact on the cash flow from
operating activities before financial items and taxes of EUR 6.4 million in Q4
2019 and of EUR 24.4 million in 2019.
4) Figures impacted by the application of the IFRS 16 accounting standard and
the distribution of the Wärtsilä share dividend. Excluding these, the equity
ratio in Q4 2019 would have been 71% and the net gearing 12%.

CHANGES IN FISKARS GROUP REPORTING IN 2019

On January 1, 2019, the Group adopted IFRS 16 Leases. All the lessees’ lease
agreements are booked as right-of-use assets and liabilities in the balance
sheet. Exceptions are short-term contracts with a duration of less than 12
months and lease contracts for which the underlying asset has low value. The
Group adopted the standard with a cumulative catch-up transition method, without
restating prior periods.

For the full year 2019, the positive impact to EBIT/EBITA amounted to EUR 1.4
million, resulting from the decrease of lease expenses and increase of
depreciation from the right-of-use assets. In addition, EBITDA was impacted by
the amount of depreciation, increasing by EUR 23.0 million. Interest expenses
increased by EUR 2.8 million. Total estimated impact to the profit for the
period amounted to EUR -1.4 million.

More information on reporting changes is provided in the accounting principles
section of this financial statement release.

FISKARS CORPORATION

Jaana Tuominen
President and CEO
Further information:

· President and CEO Jaana Tuominen, tel. +358 204 39 5500
· CFO Sari Pohjonen, tel. +358 204 39 5773
· Corporate Communications, tel. +358 204 39 5031, communications@fiskars.com

Analyst and media conference

A combined live webcast and presentation for analysts and media on the fourth
quarter and full year results will be held on February 5, 2020 at 11:00 a.m. at
the company’s headquarters, Fiskars Campus, Hämeentie 135 A, Helsinki.
Presentation materials will be available at www.fiskarsgroup.com.

The event will be held in English and can be followed as a live webcast at:
https://fiskars.videosync.fi/2019-q4-results

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:
Corporate Communications, tel. +358 204 39 5031, communications@fiskars.com

Making the everyday extraordinary
Fiskars Group’s purpose is to make the everyday extraordinary. With our family
of lifestyle brands including Fiskars, Gerber, Iittala, Royal Copenhagen,
Waterford, and Wedgwood, we want to create a positive, lasting impact on our
quality of life. Our products are available in more than 100 countries and we
employ around 7,000 people in 30 countries. Please visit us at
www.fiskarsgroup.com for more information.

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