Fiskars second quarter 2014: Sales and EBIT below expectations, good operational efficiency
Fiskars Corp. Interim Report August 1, 2014 at 8.30 am EET
Second quarter 2014 in brief:
- Net sales decreased by 8% to EUR 201.0 million (Q2 2013: 217.6)
- Currency-neutral sales decreased by 4%
- Operating profit (EBIT) decreased by 29% to EUR 18.5 million (26.1)
- Operating profit (EBIT) excluding non-recurring items decreased by 30% to EUR 19.4 million (27.8)
- Non-recurring costs related to the EMEA 2015 restructuring program totaled EUR 0.8 million (1.7)
- Earnings per share were EUR 0.26 (0.33)
- Cash flow from operating activities was EUR 6.4 million (15.4)
- Outlook for 2014 was changed in June 2014: full-year net sales and operating profit excl. non-recurring items are expected to be below 2013 levels (previously: net sales to reach 2013 levels and operating profit, excluding non-recurring items, to be at or slightly below 2013 levels)
Fiskars President and CEO, Kari Kauniskangas:
“In the second quarter of 2014, the challenges that affected Fiskars in the first quarter continued: currency changes had a EUR 7.9 million negative impact on sales, some availability issues lingered on in Europe, and the cold and rainy weather affected the start of the gardening season in North America. In addition, the retail environment in Finland continued to decline and sales in Finland – one of the main markets for our Home business – were clearly below expectations.
Despite these headwinds, the group’s comparable sales for the quarter came close to the previous year’s level and underlying performance strengthened as operational efficiency was good. Operating profit excluding non-recurring items was solid but clearly decreased compared to the second quarter of 2013, which was the strongest quarterly performance the company has ever reported. The decrease was due to a planned increase in spending on brands, product launches, and the sales organization, as well as increased depreciation and amortization related to our five-year investment program.
As a consequence of the market development in Finland, it became unlikely that Fiskars could regain sales lost over the early part of the year. Consequently, we updated our full-year outlook in June and now expect 2014 net sales and operating profit, excluding non-recurring items, to be below 2013 levels. This is naturally a disappointment for us, and we plan to actively drive up sales and adjust our cost levels.”
Group key figures
| EUR million | Q2 2014 | Q2 2013 | Change | Q1–Q2 2014 | Q1–Q2 2013 | Change | 2013 |
| Net sales | 201.0 | 217.6 | -8% | 385.2 | 408.0 | -6% | 798.6 |
| Operating profit (EBIT)* | 18.5 | 26.1 | -29% | 26.7 | 40.6 | -34% | 61.0 |
| Non-recurring items* | -0.9 | -1.7 | -47% | -5.5 | -3.8 | 43% | -12.8 |
| EBIT excl. non-recurring items (NRI)* | 19.4 | 27.8 | -30% | 32.1 | 44.4 | -28% | 73.8 |
| EBITDA** excl. NRI | 25.9 | 33.5 | -23% | 45.1 | 55.7 | -19% | 98.1 |
| Share of profit from associated company | 10.8 | 10.3 | 5% | 18.7 | 19.6 | -5% | 50.8 |
| Change in the fair value of biological assets | -0.1 | 0.3 | -0.2 | 0.6 | 0.7 | ||
| Profit before taxes* | 29.3 | 35.9 | -18% | 43.9 | 60.7 | -28% | 108.3 |
| Profit for the period* | 21.4 | 27.2 | -21% | 33.3 | 48.1 | -31% | 94.0 |
| Earnings per share, EUR | 0.26 | 0.33 | -22% | 0.40 | 0.59 | -31% | 1.14 |
| Equity per share, EUR | 7.46 | 7.28 | 2% | 7.71 | |||
| Cash flow from operating activities*** | 6.4 | 15.4 | -58% | 13.0 | 17.4 | -25% | 81.0 |
| Equity ratio, % | 58% | 57% | 61% | ||||
| Net gearing, % | 34% | 34% | 24% | ||||
| Capital expenditure | 6.6 | 10.2 | -35% | 12.1 | 20.3 | -40% | 37.2 |
| Personnel (FTE), average | 4,203 | 4,126 | 2% | 4,166 | 4,103 | 2% | 4,087 |
* Non-recurring charges in Q2 2014 related to the EMEA 2015 restructuring program and other restructuring
** Earnings before interest, tax, depreciation, amortization and impairment excl. NRI
*** Including a Wärtsilä dividend of EUR 26.9 million in Q1 2014 (25.6)
Full interim report
The full interim report is published as a pdf file attachment to this summary stock exchange release and is available on the company's web site at www.fiskarsgroup.com.
News conference:
An analyst and press conference on the second quarter results will be held on August 1, 2014, at 10:00 am 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
- Communications Director Anu Ilvonen, tel. +358 204395446
Fiskars 365 – 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 global supplier of consumer products for the home, garden and outdoors. Available in more than 60 countries, Fiskars products solve everyday problems, making daily home, garden and outdoor projects easier and more enjoyable through superior performance and design. Fiskars is listed on NASDAQ OMX Helsinki, and the company’s net sales were 799 million euro in 2013. The Group’s key international brands are Fiskars, Iittala and Gerber. www.fiskarsgroup.com/365