Fiskars’ year 2015: Strong growth in net sales; increased operating profit

Fiskars Corporation
Financial Statement Release
February 9, 2016 at 8:30 a.m. EET

Fiskars’ year 2015: Strong growth in net sales; increased operating profit

This release is a summary of the Fiskars Corporation’s fourth quarter of 2015 and Financial Statement Release 2015 published today. The complete Financial Statement Release 2015 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 2015 highlights:

• Net sales increased by 63% to EUR 332.8 million (Q4 2014: 203.9).
• Using comparable exchange rates and excluding the acquired watering and English & Crystal Living (WWRD) businesses, net sales increased by 2.9%.
• Operating profit increased to EUR 13.0 million (2.3).  
• Operating profit excluding non-recurring items increased by 57% to EUR 16.8 million (10.7). The English & Crystal Living (WWRD) business had a net positive impact of EUR 4.5 million, despite purchase price allocation charges and other acquisition related costs, which impact the result in 2015 only.
• Operative earnings per share were EUR 0.05 (0.09). Reported earnings per share (EPS), which includes changes in the fair value of the investment portfolio, amounted to EUR 0.76 (8.77). 

2015 in brief:

• Net sales increased by 44% to EUR 1,105.0 million (2014: 767.5).
• Using comparable exchange rates and excluding the acquired watering and English & Crystal Living (WWRD) businesses, net sales increased by 3.7%.
• Operating profit increased to EUR 46.5 million (42.7).  
• Operating profit excluding non-recurring items increased by 9% to EUR 65.1 million (59.6). The English & Crystal Living (WWRD) business had a net negative impact of EUR 6.5 million, mainly due to purchase price allocation charges and other acquisition related costs, which impact the result in 2015 only.
• Operative earnings per share were EUR 0.35 (0.76). Reported earnings per share (EPS), which includes changes in the fair value of the investment portfolio, amounted to EUR 1.04 (9.44).
• Fiskars completed the acquisition of the English & Crystal Living (WWRD) business on July 1, 2015 and extended its portfolio with iconic luxury home and lifestyle brands. Net sales of the acquired business have been reported as part of the Living products business unit as of July 1, 2015.
• The Board proposes a dividend of EUR 0.70 per share (EUR 0.68).
• Outlook for 2016: Fiskars expects the Group’s 2016 net sales and adjusted operating profit to increase from the previous year. The majority of the increase is expected from the addition of the English & Crystal Living business, which is now a part of Fiskars for the full-year 2016. The adjusted operating profit excludes restructuring costs, impairment charges and integration related costs.   

President and CEO, Fiskars, Kari Kauniskangas:

“Fiskars continued its transformation journey during 2015. We sharpened our focus in our core businesses  Functional, Living and Outdoor, each a leader in their field. We strengthened our position significantly by acquiring WWRD, recognized for luxury home and lifestyle products, and expanded our portfolio with iconic brands, such as Waterford and Wedgwood. Supported by the acquisition, we became the global leader in the premium living products category. 

During 2015, Fiskars delivered a significant increase in net sales, exceeding one billion euros. Yearly net sales grew by 44%, supported by a solid fourth quarter. While the majority of the increase comes from the new watering and English & Crystal Living businesses, I am proud of the fact that Fiskars’ underlying and currency-neutral growth was 3.7%, demonstrating solid progress, even when faced with a challenging economic climate in some of our key markets, particularly in Finland and Japan. The growth was driven to a large extent by our Scandinavian Living business, which had an outstanding year. 

While growing our topline, Fiskars continued to improve its business operations throughout the year, increasing efficiency and flexibility. As part of our strategy to operate as an integrated consumer goods company, we agreed to sell our boats business allowing us to better focus on our three core businesses. In early 2016 we also sold our container gardening business in the U.S. 

Our operating profit excluding non-recurring items increased to EUR 65.1 million. This achievement validates our capability to deliver results even in tough economic conditions and despite on-going integration projects with the watering and English & Crystal Living businesses.

During the fourth quarter, the English & Crystal Living (WWRD) business had a net positive impact of EUR 4.5 million, despite purchase price allocation charges and other acquisition related costs. However, the performance of the business was softer than expected during the fourth quarter, impacted primarily by reduced volumes with a major customer in the U.S. The rest of the business in English & Crystal Living performed according to our expectations. The integration and turnaround of the watering business will continue and we expect the business to reduce its losses during 2016.   

We expect the Group’s 2016 net sales and adjusted operating profit to increase from the previous year, despite the divested businesses, continued economic uncertainty particularly in some of our key markets and the increased costs due to unfavorable exchange rates in 2016. The majority of the increase in net sales and adjusted operating profit  is expected from the addition of the English & Crystal Living business, which is now a part of Fiskars for the full-year 2016. We continue to seek growth through targeted investments in brands and new product development as well as sharpen our focus on core businesses.”

The full-year figures stated in this release are audited.

Group key figures 

1) In FY 2015, mainly related to the Supply Chain 2017 program, goodwill impairment related to the container gardening business in the Americas, integration of the watering business and EMEA restructuring. In 2014, the EMEA 2015 restructuring program costs, write-downs and bargain purchase gain (badwill) related to the acquisition of the watering business.
2) FY 2014 includes a non-recurring gain from the sale and revaluation of Wärtsilä shares of EUR 676.0 million on October 9, 2014.
3) Excluding net change in the fair value of the investment portfolio and dividends received. In FY 2014, excluding also the non-recurring gain from the sale and revaluation of Wärtsilä shares on October 9, 2014.
4) FY 2014 includes EUR 8.25 from the sale and revaluation of Wärtsilä shares on October 9, 2014.
5) Including Wärtsilä dividend of EUR 26.9 million in Q1 2014.
 

FISKARS CORPORATION

Kari Kauniskangas
President and CEO


Analysts and media conference:
An analysts and media conference will be held at 10 a.m. on February 9, 2016, at the company’s headquarters, Fiskars Campus, Hämeentie 135 A, Helsinki. Presentation material will be available after the conference at www.fiskarsgroup.com
  

Further information:

• President and CEO Kari Kauniskangas, tel. +358 204 39 5500
• COO and CFO Teemu Kangas-Kärki, tel. +358 204 39 5703
• Corporate Communications, tel. +358 204 39 5031, communications@fiskars.com

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 9,000 people in 30 countries. Fiskars is listed on Nasdaq Helsinki. www.fiskarsgroup.com