Fiskars Oyj Abp

Hello and welcome to Fiskars Group's Q4 and full year 2025 results webcast. My name is Essi Lipponen and I'm the Director of Investor Relations. I'm here with our President and CEO Jyri Luomakoski and our CFO Jussi Siitonen. Let's look at the agenda for this webcast. Jyri will start with the key takeaways of the quarter and the year. After that, Jussi will continue with the financials. Then back to Jyri, who will go through business area development and also talk a bit about how this year looks like. After that, we will have plenty of time for your questions, and we will welcome questions both through the phone lines and through the chat. You can type in your questions in the chat already during the presentation. Please go ahead, Jyri.

Thank you, Essi, and good morning. Just briefly before we dive into the numbers and what's been happening in our two businesses. Key takeaways, there are some highlights, some lowlights, as always in life. What we think was really important that our Viitta business area actually had both Q3 and Q4, two consecutive quarters, growing and that brought also the group numbers to a what I would call a green or black zero in terms of top line. This we need to bring into the context of Viitta having had before these two growth quarters more than 10 quarters of negative growth or flat top line. And of course, as we started in the summer focusing on cash flow, that those efforts were bearing fruit and the cash flow in the fourth quarter was also quite strong. And Jussi will go deeper into how strong and record-breaking that was. But of course the low light is that our comparable EBIT declined and that was impacted by our own actions predominantly, i.e. curtailing our production to manage the inventories, to manage cash and this had a price tag consequently on the EBIT. This morning we also announced our plans to turn around on BA Viitas performance and also we'll address that a bit more in depth in a few minutes. The board made their proposal to the AGM and that is to maintain a stable dividend as our policy is saying, stable or growing, 84 cents per share to be paid in four installments. And 26, we expect our comparable EBIT to improve from the 25 level. But that was the key kind of highlights, key takeaways as an intro, and happy to hand over to Jussi, please.

Thank you, Jyri, and hello everyone. Let's start first with Q4 and then go to the full year here. When it comes to net sales there, as Jyri mentioned, We were able to report positive growth now in Q4, 1.3% at constant currencies. It was very much driven by Vita. The good thing also is that this growth was very broad-based. When we take our top 10 countries at group level, seven out of top 10 countries were growing, including USA. Sweden, Japan, China, Australia being the ones which were at this kind of mid, even to high single digit type of growth. On EBIT, we came down 10 million versus last year. Out of this approximately 10 million, a bit more than 4 million was VETA-related. The remaining part was quite evenly split between Fiscus BA and other operations. Gross margin came down 200 basis point to 47.4. Roughly 150 of this 200 basis point was tariff-related. And as Jyri mentioned, the focus what we have had in second half, especially now in Q4, was there on the cash flow. And we are able to report now all time high Q4 free cash flow. And actually this Q4 was the second best quarterly cash flow overall in the recent history of this company. Moving then to full year results. So here we came out with a flat top line. And despite this flat top line, we had countries with solid full year, high single digit, even double digit growth, like Sweden, Japan and China. On EBIT, we were down 35 million versus last year at 76.4. There were three main reasons for this drop that we had in EBIT. The big one and the main one is low production volumes and negative variances relating to that one, that especially in Viitta. Then we had more investment in demand creation, especially in marketing. That's one topic there. And tariffs, which we were then thought able to partially mitigate, but that was the third big reason. When it comes to full-year gross margin of 47.1 there, which was 170 points down versus last year, roughly 100 basis points out of that 170 was tariff related. And despite the strong second half, especially Q4, free cash flow, our first half cash flow was rather challenging until for the full year, we were short roughly 5 million versus last year. Let's dive a bit deeper at these changes that we had in full year when it comes to EBIT. And let's start here on the right, BA Fiskos. So BA Fiscus, as you can see here, the tariff impact that we had, BA Fiscus was able to fully practically mitigate the negative tariff impacts, mainly through the OPEX efficiency improvement, but also the underlying gross margin, excluding the direct tariff impacts, improved in 2025. Then Vita, here in the middle, you can see this gross margin and negative impact there coming from those low production volumes. What I would like to highlight here that is very production volume related, not sales volumes. Therefore, this kind of promotional sales, what we have had, they have mainly been there for those categories which are end of the line anyhow. So the big decline is very much production volumes. Moving then to the cash flow, as I mentioned, we were able to deliver strong Q4 cash flow of 91.5 million here, 22 million better than last year in Q4. That's mainly driven by changing inventories. So we were able to take inventories down in Q4 by 35 million approximately, which is almost the same amount, more than what we had last year in the same period. Also, the tight capex control that we put in place, we were able to cut capex by 6 million versus last year's same period. And then on a full year basis, however, the inventories continued increasing by 11 million on a full year basis. There also, the capex was partially compensating, or reduced capex was partially compensating this one, but the full year cash flow of 76.3 million is some 5.5 million behind the last year. Then on balance sheet, so net debt to EBITDA, we came down in Q4 from 3.7x to 3.3x in one period. Net debt came down 92 million in Q4. And out of this 92 million, roughly 20 million is relating to lease terminations, and the rest, roughly 70 million, is pure cash flow driven improvement, what we had there. Of course, this 3.3 is not what we have given as a target of 2.5, but important is that we are now able to demonstrate a declining trend there when it comes down at the DPDA. Then the last but not least, when it comes to our sustainability targets there, if we start first with focus more here on those environmental targets, we were able to improve slightly our circularity targets being 50% by 2030, by 50% of our products and services are coming from circulated materials, so now it's 27%, so we are well up to speed to this 50% target by 2030. Of course, all these kind of, I would say, low-hanging ones are already implemented, so getting the target is getting challenging and challenging as we speak. When it comes to emission, both scope one and two, we were able to improve. Now it's 62%, target being 60% by 2030. So it seems that we are already there. However, this is very volume related and volume driven. And now when the volume have been a bit down, also this percentage is improving. Once the volume are increasing, the 60% remains to be a good target. The only environmental target where we are behind last year relates to scope 3i emissions for transportation. Now it was 18%. The main reason is both sea and road freight in USA, partially because of higher volumes, partially also because of the way our carriers defined these emissions. That's very shortly where we are with the numbers and now giving it back to you, Jyri.