Fiskars Oyj Abp

Hello and welcome to Fiskars Group's Q1 2026 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.

Good morning.

Let's look at the agenda for this call. Jyri will first go through the key takeaways of the quarter. After that Jussi will dive deeper into the numbers. Jyri will then continue with the business area highlights and looking ahead how is this year going to be like. After that we will have time for your questions and you can ask questions both through the phone lines and through the chat. You can type in your questions in the chat already during the presentations. Jyri, please go ahead.

Thank you, Essi. A warm welcome from my side also to our Q1. Q1 webcast summarizing a bit the quarter starting with group level topics where comparable net sales and free cash flow both increased. The comparable EBIT and that comparison does not contain the currency translation effect it declined But the impact really that broke that equation was from the US dollar translation. So if we would be using constant currencies, actually the comparable EBIT would have a small growth. Key in our BAs, it was the third consecutive growth quarter for our BA Viita. And this is of course not the biggest quarter and less important for Viita. While for BA Fiskars the garden load-ins in the first quarter is an important season and there was a very solid execution that we could see from the team and the numbers are testament to that. A lot of internal activities went into the technical and legal separation of our two business areas as subgroups, legal entities, and that was finalized according to the plans during the quarter. Around sustainability, we had actually already reached our 2030 targets or known some of our targets. And of course, that means that then you've raised the bar and that was validated by the SBTI. and also published as such. No change to the guidance, comparable a bit to improve from the 2025 level. But what's behind these statements? Numbers speak the language of business, Jussi.

Thank you, Jyri. Hello, everyone. Starting from the top line, as Jyri mentioned, we had a good top line growth there at constant FX. So constant currency is 2.3% up. At reported currency, it was down 3.1%. This explained by a quite significant US dollar weakening in Q1, roughly 10%. We had a solid growth in main countries, USA, Sweden, Finland, China, just to mention a few. Some of these big countries were even at double digit growth. EBIT 25 million, 1.8 million downwards last year at reported currencies. I'll get back to those changes on the next slide. Gross margin at the group level, we were down 70 basis points there, so that Vita was down and Fiscus was up. We go more specifically this in your representation. Free cash flow, slightly positive 0.9 million. Typically, Q1 is always negative when it comes to our free cash flow. Now it was more than 18 million better than last year at the same time. Comparable earnings per share, 16 cents, up one cent there. And if we take some of those lines below the EBIT there, net financial items were four million better than they were last year at the same time. That's the main. made this kind of below EBIT line improvement what we had. But jumping into these changes from last year's EBIT to this year's EBIT. As already mentioned, US dollar had a material negative translation impact now comparable EBIT. If I start here from right, where we have Fiscus BA EBIT bridge, you can see that at reported currencies Fiscus were able to improve EBIT by 300k 0.3 million. Excluding this negative translation impact there, Fiscus improved EBIT by 2.7 million. The biggest driver being gross margin improvement. which was only partially offset by these tariffs. Q1 this year was the last quarter where we did not have tariff impacts in the comparative numbers. Moving to the middle here, Vita, you can see a significant negative item there coming from gross margin. This continuation of those actions we have put in place in Vita, which are supply chain related, mainly our production related there. And the good thing is that, as said, these are coming from manufacturing side. We have succeeded to keep our sales prices. So none of these operating margin negative is coming from sales prices. At group level, you can see that we succeeded to continue improving EBIT by 0.5 million there at constant currencies, the biggest driving being volume growth and then some savings what we had in marketing expenses there. On cash flow, as I mentioned, we had slightly positive cash flow there of 900K. And you can see here the trend when it comes to our previous Q1s. So this is significantly better than what we typically have reported for Q1. Improvements came from all the main lines, i.e. from operations, from networking capital, changes, capex and cash taxes. So we were able to improve quite holistically our cash flow items now in Q1. When it comes to our NEDA DBDA, it was up from the year end 0.24 and then versus the Q1 last year, it was up 0.65. Always in Q1, our net debt is increasing on the year end, due to the seasonal pattern. This year, the increase was much less than what we have historically. One item to explain it is that typically, we have paid dividend in two installments, half in Q1, half in Q3. Now we are paying it in four installments, so only one fourth of dividends, we are now increasing our net debt here. The focused measures what we have put in place, especially in Viitta on the inventory levels, they are now bearing fruit here and improving to manage this net debt situation. Regarding the current highly volatile business environment, it's worthwhile now to remind our FX and commodity exposures what we have and how we have hedged them. On currency transaction, US dollar is our main currency, in which, together with Danish krona and Polish zloty, we have a short position, meaning that weaker the US dollar is, better it is for our transactions. Overall, we have hedged over half of our next 12 months flow in our main currencies. On translations, we do not have hedges in place. On commodities, especially when it comes to gold, silver and aluminium, we have hedged over two thirds of the expected next 12 months consumptions. Gold and silver are important for us, especially when it comes to the jewellery business and then aluminium overall, both in Vita and Fiscus. Then on energy, mainly electricity and gas, we have long term contracts in place, so we have hedged that in that way. When it comes to our climate ambitions, We have now new CO2 reduction targets validated by science based target initiative. So that CO2 for scope one and two, we were now at level of 62% down versus base year 2017. Target we lifted up from 60% now to 70%. On scope three, target is now up to 40% from 30% and we are now at 34%. Then when it comes to our important circularity target, what we have set for the company, i.e. by 2030, 50% of the net sales should come from circular products. Now we are at 29%. 2% is point up versus last year. Then on social targets, the important being this lost time accident frequency, LTAFF. We are now nicely down versus last year from 3.8 to 2.8. However, the target is there at zero level. So we are going to right directions, but not yet there where we should be. This was a snapshot of our financials. And now over to you, Jyri.

Thank you, Jussi. Quickly on our two BAs, Viitta. As I mentioned in the introduction, third consecutive growth quarter, the comparable EBIT didn't move the same way. And there are reasons for that. When we look at the growth, much driven by our two Danish brands, Georg Jensen and Royal Copenhagen, And nice tapping kind of to the opportunities through Roestrand having its 300 years birthday. It's actually our second oldest brand in our portfolio. Then on the EBIT, why is it moving down? Last year in the summer, we stated that cash flow is a priority and we have clearly two high inventories and started actions. And this is now something that last year maybe was then In the latter parts of the year, when we curtailed our production and got these inefficiencies expensed directly, now it was in line with our plans to continue the efforts to reduce our inventories. And that's where the comparable gross margin decrease is solely coming from, is the supply chain related, not that we would have lost the kind of price position in the marketplace. Besides Röströn 300 years there is always some good reason to celebrate and our iconic Alte Vase is actually celebrating its 90th birthday and now there are special editions so you can add to the standard colors and so forth now the all kinds of wooden mold and with bubbles etc. as you see in the picture. Royal Copenhagen, it's one of the older brands, 251, this year actually launched a new pastel flora tableware collection called Iris and again very positive reception by consumers with that new pattern. BA Fiskars' comparable net sales remain stable and the growth that we saw in the US also for the third consecutive quarter for the fiscus brand actually then was somewhat offset by mixed performance in other geographies and the European economies having been from a consumer cautiousness perspective maybe more cautious than the Americans have been. The EBIT margin was improving, cost management has been prudent, and we need to remember that, as Jussi pointed out, Liberation Day was on April 2 last year, so Q1 was still a comparison in the kind of old tariff regime, i.e., well, there were some tariffs, but nothing in the magnitude as we have seen then. Cross-margin increase, 220 basis points is of course a good performance and that's where the team has done also a good job. Not only with those new products that you have seen in the latter part of last year, but also now a new launch, the X-Series dual action cutting tools. So depending what you are working on, how thick branches you are working on in the garden, you can just optimize your own effort by having it turned either in the small or the large mode. So then you avoid extra work. guidance for this year and I believe have read some expectations from some market participants that we would be coming with a more specific guidance after Q1 and that potentially was also Our wish, what happened on the 28th of February, the Iran war broke out and that has of course not cleared the visibility more to the contrary. So these uncertainties in the global economy persist. Visibility is somewhat limited as one can guess. We know that the planned changes in BA Vita are expected to support our EBIT from H2 onwards. Why from H2 onwards? We have in the biggest markets completed the union negotiations, change negotiations as those are spelled under different jurisdictions. And those conclusions also have been taken, but they have until if it's about people who are departing the organization, it doesn't happen overnight. So consequently, that's why the H2 onwards is taking place there. Steady performance by BA Fiskars and why we added the following the typical seasonality of its business. The guidance is not to take Q1 and multiply it by four to arrive at a good guess for the year. This is the strongest season for the business, but we see from the performance how we have been able to also gain on distribution in some key markets been able to convince the distributors our customers through new offerings our performance also in the volatile environment that there are new doors or distribution points have opened to us and are opening to us We also have planned for this year that we continue on the kind of curtailing production in some categories really to work down and sweat down the excess or to elevate it inventory levels. And we know that will carry some negative impact also going forward during this year. But as you can see from Q1 numbers, I think that's a kind of under control type of a situation. Then comes the Unpaid advertising and commercial capital markets day will be held at our offices in Espoo on May the 12th and that will be also available for online and there's also a QR code you can sign up for for the CMD. So to summarize, on group level, top line, cash flow increased, breaking some historical patterns also on the cash flow, which is important. Comparably a bit, yes, it declined. Absence the translation, actually the situation would be looking better. Third consecutive quarter of growth for our BA Viitta and the Fiskars BA team has done a solid good job in tapping to the opportunities of the season. internal technical restructuring completed, finalized as planned and that means no hiccups in terms of costs or kind of functionalities etc. And we continue to focus on our sustainability topics and these climate ambitions have been raised. There was a good performance over the last years and We want to continue on that track. Guidance unchanged, comparably a bit to improve from the 2025 level.

Thank you, Jyri and Jussi. And now we have time for your questions. Let's first check if we have any questions through the phone line.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Maria Wickstrom from SEB. Please go ahead.

Hi, this is Maria Wickstrom from SEB. I had a few questions, and I'd like to start on the Fiskars BA. and your profitability, which was on par with the last year level, which I think it was a bit surprising given there was no tariff impact in the comparison quarter. So can you a little bit walk us through that? How did you achieve such a good performance in the BAC scars? So did you actually raise prices more than the tariff would suggest? I mean, which would then be behind the good performance? Thank you.

Maria, this is very much operational efficiency improvement what we have made, especially when it comes to our own manufacturing, how we have succeeded there. So that's the main driver what we have had here to mitigate the tariff impacts. And now the actions what BA Fiscus team has put in place, they are now bearing fruit there. So very much that one. Pricing, we are following the market there. So this is not pricing related. This is more internal operations related.

Okay, perfect. And then my second question is on the consumer trends. But have you seen anything changes after the war broke in the Middle East? If we, I mean, take it separately on different market areas, America, Europe and Asia.

When we look at the consumer trends, and I know you all have access to all kinds of statistics and surveys, etc., I think the high-level takeaway is that European consumers are probably currently more cautious than the American one, especially when the stock exchange started to rebound after the war broke out. There was a big hit to the equity markets. And at least my experience is that the American consumer, when the portfolios are doing okay, then they are more shopping happy, happy as such. And that has been less of an impact. In the behavior pattern of our distributors, of course, this cautiousness is visible. So that instead of some big distributors taking maybe certain stuff in truckloads, they start with one truckload. And then once they see that it's sold out, then there is kind of a replenishment order taking place. And in this type of a chain, we know there is this whip effect in terms of the further down in the chain you get, the higher the volatility can get. But I'm proud of our team has actually been able to manage that pretty well, this increased volatility.

And then I wanted to ask on the inventory levels with the Q4 results. I mean, you said that, I mean, you saw that the inventory levels were too high. And actually, if we compare the inventory levels after the Q1, you are actually slightly, more or less on par, but slightly higher than Q4. So what do you think? I mean, are you happy with the current inventory level? And what are the action plans if you want to bring it down, I mean, throughout the year?

We are definitely not happy with the level. We are far from where we would like to be. That's clear when you compare Q4, end of Q4, and Q1, and take historical patterns, that's a seasonal increase, and Jussi has the number better in his mind, but I believe that we did a bit better than the historical pattern. Indeed.

For example, Q1, 8 million better than last year.

Yeah. So this is going into the season and it's certain specific categories where that issue is more of an issue and very much under the loop and under actions. But it's a longer journey, as we have indicated already last year, that it doesn't happen in a couple of quarters. And that statement is still valid. In the Fiskars BA, we have these seasonal patterns and certain big seasons now it's gardening then in the summer it's the back to school season which are those that are driving also this type of inventory loadings first to our inventory then to the distributors or wholesalers i.e. our customers, and in there, given the forecasts of the available points of distribution, shops, stores, or doors, as we call it in the jargon internally, as there has been, and we expect a good trend to continue, that's also to be prepared when you have load-ins into new points of distribution, that we are available there. So that part is not at least keeping me up at night.

Maria comes to seasonality for this year and the biggest actions or major actions what we have in place are in Viitto and this visible reduction of the inventory it's more year-end loaded than the first half loaded so therefore you should not see big improvement until we are entering into second half.

Okay. And then my final question is that, I mean, do you anticipate, I mean, some availability challenges, what comes to some of the raw materials you are using and what kind of cost inflation you currently see in your raw material bill? And do you think, I mean, you will be able to compensate with price increases, I mean, if there are raw material pricing increases during this year?

There are two types of shortages. One can be logistical shortage. As we know, the kind of ocean freights and some of those routes are currently in big changes. So getting from Asia to Europe is a couple of weeks longer journey than it used to be when you could take the shortcut before the war. So that is an issue of its own. Freights, those go up pretty much overnight, so containers. shipping them across the world because of the fuel costs has increased. Jussi had a great slide in his deck on our hedges. It's not only currencies, but it's also some of the key commodities that we use. And hedges don't solve that problem. It just gives us time then to adjust on our market pricing, et cetera. And from that perspective, availability per se. I'm not aware of any of our key input materials that there would be problems currently with the physical kind of availability of the shade input material.

Maria, on that one, when we entered into this year, we assumed that tariffs will continue as they were end of the last year. Now we know that end of February, there were some changes there which are benefiting us. And of course, these kind of things are somewhat offsetting impacts, what Jyri just described, especially when it comes to logistics.

Perfect. Thank you. I have no further questions at this point. Thank you.

The next question comes from Joni Sandvall from Nordia. Please go ahead.

Yeah, thanks for the presentation. A couple of questions from my side. Do you have any extraordinary short-term savings in operating expenses in Q1, or should we just expect declining cost base from current levels when the actions are starting to kick in?

At group level, SG&A was pretty flat versus last year, so therefore follows that pattern what we had. The items or actions put in place in Viitta, as Jyri said, they will start contributing our SG&A levels, but they are also more second half loaded than the first half loaded. We continue running those efficiency programs what we have, but nothing like this kind of big one of positive there in our numbers at the moment.

Okay, thanks. Then going to BAV, you continue to see the positive comparable sales growth there. So with the current trajectory, could you give any indication when we should be expecting more normalized production levels?

Not yet. Not really as we said it will take some time and it's focused on a couple of product categories and manufacturing technologies mainly around the crystal crystal value chain where the inventory and consequently the curtailment of curtailing the production has been taking place and it doesn't touch unfortunately so to speak too much the brands that I mentioned that have been growing the most, Georg Jensen, Royal Copenhagen and restaurant, which are jewelry, other home decor, not in the glass category, so crystal categories much, and fine bone china type of categories. So work continues. Of course, getting inventories reduced has two parameters. One is the sell-out, and one is the input. The input we can control very much ourselves and have taken those measures and are biting, so to speak, the bitter bill by expensing some of those factory overheads now every day as we go when we don't utilize the capacities as they could be utilized. And then on the other side, the sellout that work also continues. So it's a journey that's not over shortly, but determined to get this done.

Okay, thanks. Then one question on the current tariff situation because there has been changes. Changes now in April, obviously a little bit related to Section 223 tariffs and those implications. So could you give any color, does this have any material impact on FISCAR's BA?

We have gone through the recent changes there, especially when it comes to steel tariffs and the likes, how they are calculated. Our current view is that those changes are benefiting us, so the tariffs will be less than what we had in our original plans for this year. We haven't disclosed and won't disclose any material numbers regarding this one, but we are benefiting from those.

Okay, thanks. Then lastly on the guidance, Jyri, you mentioned that maybe someone has been expecting more specific guidance, but should we still expect this maybe later towards the year, or are you sticking to current, let's say, a bit vague guidance?

The H1 report and the Q3 reports are not written yet and the internal forecast processes have not been run and the visibility from July onwards or from October onwards is not yet there. So we recognize that, let's say, desire from the market to have more precise guidance At the same time, we recognize kind of the facts in our operating environment. It's been a bit blurry visibility into certain things. So stuff that we do, we have the confidence that we execute what we have planned and promised. But then what's happening outside will be smarter, hopefully, again, than in July on that topic, when we have seen where the world has taken us to.

okay thanks that's all from me the next question comes from rauli juva from india's please go ahead yeah hi rauli from india there's a couple of questions for me as well related to vita segment so first of all uh was there some some clear kind of campaigns or drive down inventories?

On those categories, which I refer to more being the crystal kind of our crystal glass type of value chain we've been actively looking at with somewhat dynamic pricing, but not big campaigns or that type of fire sale type of efforts have not taken place. It's still valuable brands in important geographies, big economies, and one needs to balance with the short-term benefit and the long-term sustainability and viability of the brand.

Yeah, sure. And then on the gross margin, if I understood right from the previous answers, you will basically continue the inventory reduction throughout the year. So would that imply that the gross margin in Viitta would remain around the levels of year one and the second half of last year, maybe throughout this year? Or is there some drivers to push it up beside the inventory production, which is eventually then improving the efficiency in production.

We don't guide gross margin specifically, not on a BA level. And there are seasonal patterns to the gross margin of the Vita business, which is heavily kind of gifting season loaded or back-end loaded in our calendar of the year. So from that perspective, unfortunately, unable to give an answer to your question. Yeah.

Rauli, on that, not commenting this year at all, but last year when we informed and announced those actions, what we were putting in place in Invita to get inventories down, of course, last year, especially second half, the gross margin started to come down. So therefore, at least we have lower comps in the second half this year versus normal.

Yeah, yeah, sure. That's clear. I was wondering if there's anything kind of since driving that up from the current absolute levels, if you will continue with the inventory reduction throughout this year. Can you comment anything on that, if there's price increases or some other levers to impact the gross margin?

Yeah, coming back to my comment that we don't guide the gross margin on the group level and not on a BA level.

Then one of the Fiskars division as well you mentioned in Q4 report you had pushed some spring launches due to the cold winter and then it eventually turned pretty springish in March so did that have some clear negative impact in the Q1 for Fiskars that kind of should be benefiting Q2 if the spring pushes more in Q2 this year?

Not in any material effect. I think we had some, if not scary moments, but time when we were nagging our nails because the winter was dragging and dragging and then suddenly it became spring more or less overnight in many geographies actually. And I recall in the winter when we had first loading orders in North America or in the US to some big distributors. Then came some blizzards and the authorities closed the roads for multiple days. That was fortunately not the end of the quarter. That was in February when we really had some stressful days that, hey, will we make the season or is spring canceled? But then spring was not canceled. That's the good news.

Yeah. Okay. That's all for me. Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Yes, we do have a couple of questions here in the chat, and these are topics that both have been already discussed, but maybe for transparency's sake, I will still read these. The first one was about the curtailments in Viitta, how many quarters, but as we said, it will continue. We haven't given any detailed guidance on that. Anything you want to add?

You said it well.

Great. Then we have a question about the gross margin improvement in Fisker's segment. Can you elaborate further? Why did it improve? Maybe Jussi, you already touched upon that topic.

Very much so. So already started last year when Fisker's PA put in place those actions to mitigate the tariffs there. So they are now yielding results. And as I said already earlier, this fiscal improvement is very much coming from internal efficiencies. Then the new categories we have launched, they are not yet visibly contributing to the gross margin, but they will in the future. But this is very much internal efficiencies what we have now delivered.

And maybe to build on Jussi's comment on the new categories, that's true. They are not visibly contributing because the baseline is still small, but they are not mathematically dilutive. Absolutely not. That's important. So launches have, from that perspective also, served their purpose.

That's correct.

Good. I think it seems that we do not have any further questions. So I think we are ready to close the call. And thank you for your active participation. And please remember the Capital Markets Day coming up quite soon. So you can register for that either on site or online.

Thank you for joining. Thank you.

Thank you.