FISKARS INTERIM REPORT JANUARY–SEPTEMBER 2016: Improved operating profit and cash flow from operating activities

Fiskars Corporation
Interim report
November 2, 2016 at 8.30 a.m. EET

FISKARS INTERIM REPORT JANUARY–SEPTEMBER 2016: Improved operating profit and cash flow from operating activities

This release is a summary of the Fiskars Corporation’s third quarter of 2016 and interim report January–September 2016 published today. The complete interim 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 report with tables.

Third quarter 2016 in brief:

• Net sales decreased by 3% to EUR 280.8 million (Q3 2015: 289.7)
• Net sales increased by 0.2% on a comparable basis¹⁾
• Operating profit increased to EUR 20.1 million (-1.6)
• Adjusted operating profit²⁾ increased by 107% to EUR 21.6 million (10.4)
• Costs related to the acquisition of the English & Crystal Living business impacted the operating profit and the adjusted operating profit in Q3 2015
• Cash flow from operating activities before financial items and taxes increased to EUR 40.3 million (4.9.)
• Earnings per share (EPS) were EUR 0.52 (-0.83). Operative earnings per share³⁾ amounted to EUR 0.15 (-0.18).
• Outlook for 2016 unchanged: Fiskars expects the Group’s 2016 net sales and adjusted operating profit to increase from the previous year

January 1–September 30, 2016 in brief:

• Net sales increased by 13% to EUR 870.5 million (Q1–Q3 2015: 773.3)
• Net sales remained at the same level on a comparable basis⁴⁾
• Operating profit increased to EUR 58.6 million (33.5)
• Adjusted operating profit²⁾ increased by 26% to EUR 60.8 million (48.3)
• Cash flow from operating activities before financial items and taxes increased to EUR 43.2 million (-14.5)
• Earnings per share (EPS) were EUR 0.27 (0.28). Operative earnings per share³⁾ amounted to EUR 0.33 (0.12)

1) Using comparable exchange rates, excluding the divested boats business and the U.S. container gardening business
2) Adjustments include items such as restructuring costs, impairment charges, integration related costs, and profit impact from the sale of businesses
3) Operative earnings per share do not include net changes in the fair value of the investment portfolio and dividends received
4⁾ Using comparable exchange rates, excluding the divested boats business and the U.S. container gardening business and the acquired English & Crystal Living business in the first half of 2016

President and CEO, Fiskars, Kari Kauniskangas:

“Fiskars improved its operating profit and cash flow from operating activities during the third quarter of 2016. I was pleased to see the improvements, which are a result of our focus on core products and brands as well as operational efficiency.  

The sales of the English & Crystal Living business increased, both in the Americas and Europe & Asia-Pacific segments, which was a solid achievement in a tough business environment. During the quarter, we introduced a partnership with Royal Doulton and the world renowned television host and entrepreneur Ellen DeGeneres. The partnership and the new tableware collection, which will be launched in select countries during Q4 and globally in Q1 2017, are expected to support Royal Doulton’s brand awareness and brand positioning. 

In the Functional business, we again saw record sales in the School, Office and Craft category in the Americas segment during the Back to School season. A new Fiskars-branded Hard Face cookware series was launched in the Nordic countries during the quarter, with a positive initial response from our customers and consumers.  

We made progress in our transformation into an integrated consumer goods company with a family of iconic lifestyle brands. With the divestment of two non-core businesses in Europe and Americas, we further simplify our structure and increase our focus on core businesses and brands. We will continue the transformation and are determined to move fast to create value for our different stakeholders.  

We are entering the gifting season during the fourth quarter, which is even more important for us now since the acquisition of the English & Crystal Living business. Fiskars is well prepared to succeed in the market place, add value for our customers, and provide great consumer experiences. Fiskars continues to place the consumer and our key brands – Fiskars, Gerber, Iittala, Royal Copenhagen, Waterford, and Wedgwood – firmly at the center of our actions. Building on our renewed mission to create a family of the most iconic lifestyle brands, Fiskars’ vision is to create a positive, lasting impact on the quality of life we live – making the everyday extraordinary.”

Group key figures

1) In Q3 2016, adjustments include a gain from the sale of Spring USA, provisions related to the divestment of the Ebertsankey container gardening business, costs related to the Supply Chain 2017 program and integration activities. In Q3 2015, mainly goodwill impairment related to the planned rationalization of a non-core product range in America and items related to the Supply Chain 2017 program.
2) Excluding net change in the fair value of the investment portfolio and dividends received. The comparison period has been restated to also exclude the exchange rate gains related to the investment portfolio

IMPACT OF NEW ESMA GUIDELINES

In accordance with the new guidelines on alternative performance measures issued by the European Securities and Markets Authority (ESMA) Fiskars Corporation has revised the terminology used in its financial reporting. Alternative Performance Measures (APM) are used to better reflect the operational business performance and to facilitate comparisons between financial periods. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS. As of Q1 2016, the term “non-recurring items” (NRI) has been changed to the term “adjustments to operating profit”, however the definition remains the same. As before, adjustments are transactions that are not related to recurring business operations, such as restructuring costs, impairment charges, integration related costs, and profit impact from the sale of businesses. Correspondingly, “adjusted EBITA” is calculated from adjusted EBIT by adding back amortization. The adjustments are listed in a table on page 16 of this interim report. Fiskars also uses the APM “operative EPS”, which is earnings per share (EPS) excluding the effects of the dividends from and the change in the fair value of the investment portfolio.

Analysts and media conference:
An analysts and media conference will be held at 10 a.m. on November 2, 2016, 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
• COO and CFO Teemu Kangas-Kärki, tel. +358 204 39 5703
• Corporate Communications, tel. +358 204 39 5031, communications@fiskars.com

Fiskars – Making the everyday extraordinary
Fiskars serves consumers and customers around the world with a brand portfolio of globally recognized brands including Fiskars, Gerber, Iittala, Royal Copenhagen, Waterford, and Wedgwood. Building on our mission to create a family of iconic lifestyle brands, Fiskars’ vision is to create a positive, lasting impact on our quality of life. Please visit www.fiskarsgroup.com for more information.