Fiskars Oyj Abp

Hello, and welcome to Fiskars Group's Q1 results webcast. I'm Noora Huttula from Fiskars Group's Investor Relations, and I'm here with our president and CEO, Nathalie Ahlström, and CFO Jussi Siitonen. So to kick things off, Nathalie will first take you through the key highlights of the quarter, after which Jussi will go through the financials. Natali will then tell more about business area performance, after which both Jussi and Natali will spend some time to discuss the impact of tariffs, as well as our guidance for 2025. After the presentations, we will have time for your questions. As usual, you will be able to already type in your questions in the chat during the presentations. And this time, we also have the possibility to take your questions through the telephone line. So if you wish to do so, you can find instructions in our results release published earlier today. But with this, I hand over to you, Nathalie.

Thank you, Nora. And from my side, welcome to this Q1 announcement. I'm really proud to stand here and talk about Q1 because we really come from a position of strength. We had in Q4, we had the all-time high Q4 in terms of EBIT. And now we go into Q1 with also having a very strong Q1. This is the first time we've grown. since the mid-2022, after the Ukraine war started. It's been a lot of actions, and I'll talk about that later, that we have done to really start to drive this organic growth. And we also saw the EBIT growing. A true joy is also that our own channels, our D2C, so our own retail and our own e-com is growing at 9%. That's a healthy growth. And that really shows the strength of our brands, that they are growing so much in our own channels. The business separation that we announced in end of October, that is already online. End of January, we started operationally to drive the company as in two legal own entities, Fiskars and Vita. Now, to fulfill the separation of the business areas, we are still setting up the legal entities. But operationally, we are already working like this. And then finally, on the guidance, we keep the guidance for 2025 intact, despite the headwinds of tariffs that we are seeing. And as Nora was saying, we have a section later in this presentation where we are going to talk about our guidance and the impact of tariffs and what we are doing to mitigate it. So we are seeing our guidance for the year to stay. We expect the EBIT to be improving from last year's level. And with that, I'll hand over to Jussi.

Thank you, Natalie. First, some highlights on our financials here. As Natalie mentioned, we had a good start for the year. Net sales up 1.7% on currency-neutral basis, 3.2% in reporting currencies. Both PAs were growing, and that's something that we haven't seen since Q2 2022. EBIT up 1.7 million, and EBIT margin up 300 basis point here. One thing what we have, and I get back to that more in detail, is that gross margin went down 80 paces point here. Cash flow, free cash flow was negative as practically always is in Q1. Now it was 2.7 million better versus a year ago. Earnings per share on comparable basis was four cents down versus last year. This is mainly due to our financing items, especially when it comes to FX changes. However, cash earnings per share was up four cents. When we informed about this BA split and had a more independent role of our BAs, at the same time we promised that we are increasing transparency, how we are reporting these BAs. This is the first time we are now reporting business area specific gross margins. So what you can see here, the green line represents quarterly gross margin, what we have. Potent Vita on the left and then Fiscus on the right. And orange line is our rolling 12 months basis. As I said, Viitta gross margin up 90 basis point here, mainly driven by channel mix changes. So strong growth in D2C, 9% up, e-commerce 10% and retail 9% there. But also within D2C, we were able to increase gross margins. So that's the main driver of this 90 basis point improvement, what we had in Viitta. Fiscus was down 160 basis points versus Q1 2024. I would say that this is more from unsustainable high level what we had in Q1 2024. On longer term, this is very much in line with what we typically have had gross margin in Q1 quarters there in Fiscus. On longer term, if we take this rolling 12 months trend, what we had in the last three years, we have succeeded to improve gross margin is Vita by 230 basis point and almost 400 basis point in Fiscus. So this being the driver of our further profitability, I would say it's coming from very sustainable sources. Then on Q1 EBIT, as I mentioned, it was up 1.7 million. And it's a good mix of further investments. When we came out with our Q4, we said that this year we are committing invest in demand creation, mainly in marketing there to support new categories, new product launches, new innovations. We continued that now or started that now in Q1. so marketing expenses were up almost 5 million there. And the good thing is that we were able to fund these investments organically. Volume growth, what we had, as well as further efficiencies there when it comes to SG&A, they contributed so that we were able to invest back. If you wonder what is this other income increase there, that's those realized effect hedges what we had now in Q1. On cash flow, as I said, it's following our typical historical pattern, what we had Q1, typically negative here. Now, the big changes versus last year Q1 is networking capital. It went upwards last year by 17 million, the main driver being inventories. Long-term, if we take our last 12 months cash flow, what we have, it remains flat at roughly 85 million. On net debt EBITDA as well, following the historical trend or seasonal trend what we have, net debt EBITDA was 2.90, now in Q1, slightly downwards last year, same period. Also an increase what we have from year end was slightly less than a year ago, what we had in the same period. As said, this is following our seasonal trend, so typically we are peaking up at the beginning of the year, and then when our strong cash flow quarters like Q4, and also partially Q3 are coming in, then we are getting back to a more normalized level, closer to our target of 2.5. With that, I'll get back to you, Natalie.