Fiskars Oyj Abp · OMXHEX:FSKRS

Fiskars Oyj Abp — Fiskars Group — Investor Day (November 2021)

49 slides from Fiskars Oyj Abp's investor day presentation, Nov 9, 2021

  1. Slide 1: Fiskars Group Capital Markets Day 2021

    Fiskars Group Capital Markets Day 2021

  2. Slide 2: Disclaimer

    Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although Fiskars Group believes that the expectations reflected in such forward-looking statements are reasonable, no as

  3. Slide 3: Agenda

    Agenda The Growth Strategy CEO Nathalie Ahlström Updated Financial Targets CFO Jussi Siitonen Q&A session ⓒ Fiskars Group

  4. Slide 4: We have a strong foundation with a clear growth path ahead

    We have a strong foundation with a clear growth path ahead • Fiskars Group has a strong foundation to build on • Recent solid performance only a first step in our growth journey • We will ensure long-term improvement through clear strategic focus and transformation levers • Our growth strategy addre

  5. Slide 5: Strong foundation to build on

    Strong foundation to build on ⓒ Fiskars Group Nov 9, 2021 5

  6. Slide 6: Fiskars Group has several strongholds to build on

    Fiskars Group has several strongholds to build on…. ~40% Strong and 4X of Group sales #1 profitable local brands in the #1 Net sales growth in from the U.S. Gardening brand brand in China in China last 3 years Nordic market in the U.S. its category 20min 1/3 Diverse global Sell out time of BA Vita t

  7. Slide 7: A unique portfolio of beloved brands and iconic products

    ...including a unique portfolio of beloved brands and iconic products ⓒ Fiskars Group Nov 9, 2021 7

  8. Slide 8: Our brands have shown strong momentum in the past quarters

    Our brands have shown strong momentum in the past quarters… VITA TERRA CREA BUSINESS AREAS & KEY CATEGORIES Tableware Drinkware Interior Gardening Outdoor Watering Scissors Cooking & creating KEY BRANDS LTM* NET SALES GROWTH +15.6% / +5.6% +4.7% / +16.3% +5.9% / +17.0% (YOY / vs. 2019) *LTM referrin

  9. Slide 9: Significant performance differences by brand

    …but there continues to be significant performance differences by brand BRANDS PAST PERFORMANCE • Solid profitability • Decent growth • Lack of growth • Profitability challenges; significant improvements achieved in the past 12 months ⓒ Fiskars Group Nov 9, 2021 9

  10. Slide 10: Muted total portfolio performance; growth a long-term issue

    The differences have resulted in muted total portfolio performance – While profitability has improved, growth has remained a long-term issue EURm % 1,400 20 Acquisition of English 1,205 1,186 1,215 1,200 & Crystal Brands 1,107 1,119 1,090 1,116 15 1,000 12.5% 799 768 716 743 748 800 8.8% 10 8.5% 8.3

  11. Slide 11: Favorable consumer and market dynamics

    We are ready to utilize the favorable consumer and market dynamics POWER OF DTC SUSTAINABILITY U.S. CHINA BRANDS Consumer Behavior Market Dynamics ⓒ Fiskars Group Nov 9, 2021 11

  12. Slide 12: Clear growth path ahead

    Clear growth path ahead ⓒ Fiskars Group Nov 9, 2021 12

  13. Slide 13: The Growth Strategy – clear strategic focus and transformation levers

    The Growth Strategy – clear strategic focus and transformation levers WE FOCUS ON WINNING: LOGIC Brands Channels Countries Commercial excellence Direct to consumer TRANSFORMATION LEVERS U.S. China ENABLERS INNOVATION PEOPLE DIGITAL SUSTAINABILITY & DESIGN ⓒ Fiskars Group Nov 9, 2021 13

  14. Slide 14: Winning brands with clear roles across our portfolio

    We focus on winning brands, enabled through clear roles across our portfolio WINNING BRANDS WINNING BRANDS TURNAROUND BRANDS ⓒ Fiskars Group Nov 9, 2021 14

  15. Slide 15: Driving Fiskars as our #1 brand

    Driving Fiskars as our #1 brand WINNING BRANDS • Global brand with strong recognition • Strong historical performance − 42% of Fiskars Group net sales LTM − 7% comp. net sales CAGR 2017-LTM • Further room to utilize brand stretch and surround the consumer *LTM referring to the period Q4 2020 – Q3 20

  16. Slide 16: Building winning brands through new ways of thinking

    We are building winning brands through new ways of thinking WINNING BRANDS Case Moomin • Story telling translated into collectibles • Currently net sales over EUR 30 million • Fiskars Group minority shareholder in Rights & Brands since Sept ‘21 • Strategic partnership enables global growth beyond ou

  17. Slide 17: Strengthening our DTC for the modern consumer

    Strengthening our DTC to address the needs of the modern consumer WINNING CHANNELS • Win in the channel shift; focus on growing in the direct channel, incl. eCom and own stores • Invest significantly in digital organization and capabilities • Optimize store presence, incl. new store openings in Chin

  18. Slide 18: Commercial excellence drives performance across channels

    Commercial excellence drives our performance improvement across all channels WINNING CHANNELS Our Commercial Excellence, examples • Win with the Winners • Value-based pricing • In-store and online excellence • Distribution and product coverage ⓒ Fiskars Group Nov 9, 2021 18

  19. Slide 19: U.S. continues to deliver a majority of our growth

    U.S. continues to deliver a majority of our growth WINNING COUNTRIES • Favorable market dynamics − Demand driver for branded consumer products • Strong platform with scale in place − Fiskars leading gardening brand − Strong presence at key big-box retailers and e-tailers • Further improvement in sig

  20. Slide 20: Strong start in China with growth opportunities ahead

    We have a strong start in China with significant growth opportunities ahead WINNING COUNTRIES NET SALES IN CHINA (EURm) • Strong market demand • Solid foundation, impressive track-record 26 − Capable local team in place CAGR: − 50% net sales CAGR during past 4 years +50% − 40% of LTM net sales throu

  21. Slide 21: The Growth Strategy – clear strategic focus and transformation levers

    The Growth Strategy – clear strategic focus and transformation levers WE FOCUS ON WINNING: LOGIC Brands Channels Countries Commercial excellence Direct to consumer TRANSFORMATION LEVERS U.S. China INNOVATION ENABLERS PEOPLE DIGITAL SUSTAINABILITY & DESIGN ⓒ Fiskars Group Nov 9, 2021 21

  22. Slide 22: Our enablers for the future

    Our enablers for the future PEOPLE DIGITAL INNOVATION SUSTAINABILITY & DESIGN ⓒ Fiskars Group Nov 9, 2021 22

  23. Slide 23: Clear sustainability priorities to drive real impact

    We have clear sustainability priorities to drive real impact ⓒ Fiskars Group Nov 9, 2021 23

  24. Slide 24: Recap: strong foundation with a clear growth path ahead

    Recap: We have a strong foundation with a clear growth path ahead • Fiskars Group has a strong foundation to build on • Recent solid performance only a first step in our growth journey • We will ensure long-term improvement through clear strategic focus and transformation levers • Our growth strateg

  25. Slide 25: Agenda

    Agenda The Growth Strategy CEO Nathalie Ahlström Updated Financial Targets CFO Jussi Siitonen Q&A session ⓒ Fiskars Group

  26. Slide 26: Historical performance: solid rebound driven by COVID-19

    Historical performance Ι Solid rebound driven by COVID’19 Pandemic – focus on sustainable improvement NET SALES (EURm) GROSS MARGIN, OPEX % EBITA*%, EBIT*% +9% 1,214 43.4% 15.0% 42.2% 42.8% 1,119 1,090 1,116 1,111 GM 40.9% 41.3% 13.0% 12.3% 11.0% 10.9% 35.3% 34.0% 9.8% 9.8% 8.3% 31.9% 9.4% 30.6% 29.

  27. Slide 27: New financial targets

    New financial targets Ι Driving profitable, asset efficient growth KPI NEW TARGET WHAT CHANGES • Organic vs. organic + M&A NET SALES Organic, FX neutral Mid-Single-Digit growth • MSD range vs. ≥ 5% Mid-teen EBIT margin (excl. IAC) by end of • EBIT margin vs. EBITA Margin PROFIT 2025 • Timebound vs.

  28. Slide 28: Net Sales: winning brands, countries and channels contribute to MSD growth

    Net Sales Ι Winning brands, countries and channels are significantly contributing to MSD growth target LTM* NET SALES BY WINNING BRANDS, AND THEIR CONTRIBUTION TO COUNTRIES AND CHANNELS THE MSD GROWTH TARGET 100% MSD Retail E-comm 80% Fiskars USA USA DTC & China 60% China Winning brands Iittala RC 4

  29. Slide 29: Profitability: future P&L structure, increasing gross margin

    Profitability Ι Future P&L structure – emphasis on increasing Gross Margin AVERAGE 2025 2016–19 FY 2020 LTM* SEP’21 TARGET GROSS MARGIN 42.9% 40.5% 42.8% 46–47% MARKETING 4.4% 3.3% 3.6% 4–5% SG&A 30.3% 27.3% 26.0% 27–28% EBIT** 8.4% 9.8% 13.0% Mid-teen *LTM referring to the period Q4 2020 – Q3 2021

  30. Slide 30: Gross margin: transformation levers contributing to improvement

    Profitability – Gross Margin Ι Transformation levers contributing to the Gross Margin improvement TRANSFORMATION LEVERS CONTRIBUTING TO THE FROM TO GROSS MARGIN IMPROVEMENT Commercial Vita DTC USA China Excellence Vita Crea Vita Group Crea Group Terra Terra Terra Crea Gross Margin Gross Margin LTM*

  31. Slide 31: Profitability – OPEX: investments in growth building blocks

    Profitability - OPEX Ι Investments in growth building blocks are funded thru fluidity and Gross Profit improvement. Contingencies in place to protect the bottom line OPEX COMPONENTS (% OF NET SALES) OPEX LOGIC % Growth • Sales expenses (incl. DTC) 40 driven • Expected to follow topline growth • Sale

  32. Slide 32: OPEX investments enabling sustainable growth from 2022

    Profitability- OPEX Investments Ι Enabling sustainable growth from 2022 onwards Commercial DTC Digital Excellence TARGET SUSTAINABLE, PROFITABLE ACCELERATE GROWTH ENABLE GROWTH, DRIVE GROWTH FROM Q1-22 EFFICIENCY ONWARDS IMPACT • Stable, sustainable Net Sales • Growth acceleration • Enabling growth

  33. Slide 33: Free Cash Flow remains solid

    Free Cash Flow Ι Free Cash Flow remains solid 2018 2019 2020 LTM* Sep’2021 TARGET 137 137 118 118 224 224 232 232 • Increased profit drives up 30 33 cash flow from operations 46 40 20 31 • NWC growth expected to 23 be slightly below the 18 178 topline growth (=NWC 124 26 114 efficiency improvement)

  34. Slide 34: Capital Expenditure: DTC and Digital share to increase

    Capital Expenditure Ι Fund allocation follows the strategic acceleration – DTC and Digital share of CAPEX to increase CAPEX Development 2018 – LTM* Sep’21 TARGET 4.1 % of 3.7 % of 2.6 % of 2.6 % of ~4% of Net Sales Net Sales Net Sales Net Sales Net Sales 20% 31% 30% 25% 15% 26% Supply Chain 13% 24%

  35. Slide 35: Strong balance sheet enables growth

    Balance Sheet Ι Strong balance sheet enables growth NET DEBT / LTM* EBITDA Q4/2017 – Q3/2021 NET DEBT 31.12.2017 – 30.9.2021 261 3.0X 2.5X Target to remain below 2.5x 111 2.0X 148 144 135 136 1.5X 95 87 1.0X 150 0.5X 49 49 0.0X Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 31.12. 31.12. 31.12. 31.

  36. Slide 36: Dividend Policy: stable, over time increasing dividend

    Dividend Policy Ι No change – stable, over time increasing dividend, to be paid biannually DIVIDEND PER SHARE (DPS) HISTORY 2009–2020 Wärtsilä share EUR distribution 1.30 2.60 5.31 1,00 0,90 0,80 0.75 0.70 0.71 0.72 0.68 0,70 0.65 0.67 0.62 0.60 0.60 0,60 0.36 0.54 0.56 0.52 0,50 0.30 0,40 0.35 0.27

  37. Slide 37: Value Creation: growth strategy addresses all value creation levers

    Value Creation Ι Growth strategy addresses all value creation levers TSR drivers • We secure profit growth through increased focus on Gross Margin improvement PROFIT • OPEX fluidity to ensure funding of the strategic growth investments GROWTH • We manage both short- and long-term profit improvement

  38. Slide 38: ⓒ Fiskars Group Nov 9, 2021

    ⓒ Fiskars Group Nov 9, 2021 38

  39. Slide 39: Cost of Goods: raw material and logistic costs inflation eliminated

    Cost of Goods Ι Raw material and logistic costs inflation eliminated COGS Total Own Production Direct Material Key Takeaways 100% 100% 100% • Full year cost inflation Logistics expected to be approx. EUR Plastics 35m from inbound logistics Inbound (sea freights), raw materials 75% 75% Direct Materia

  40. Slide 40: Seasonality: group seasonality balanced by portfolio

    Seasonality Ι Group seasonality balanced by portfolio NET SALES AND EBIT – QUARTERLY SPLIT SEASONAL FEATURES BY BUSINESS AREA 0% 25% 50% 75% 100% Vita Vita • Highest season in year-end holiday period • Seasonal pre-orders approx. one-third of the business; the NET SALES Terra rest from replenishment

  41. Slide 41: Agenda

    Agenda The Growth Strategy CEO Nathalie Ahlström Updated Financial Targets CFO Jussi Siitonen Q&A session ⓒ Fiskars Group

  42. Slide 42: Appendices

    Appendices ⓒ Fiskars Group Nov 9, 2021 42

  43. Slide 43: The direct channel (DTC) increasingly important

    The direct channel (DTC) increasingly important GROUP NET SALES BY CHANNEL (LTM*) NUMBER OF STORES INCREASING IN ASIA-PACIFIC Direct, e-commerce Direct, stores Indirect, e-commerce Total number of stores: 362 (by end of Q3) 5% 13% 9% Store Europe Outlet 13% 21% 32% 67% 2% Americas 66% 73% Asia-Pacif

  44. Slide 44: Business Area details – Vita LTM sales splits

    Business Area details – Vita LTM* sales splits SALES SPLIT BY BRAND SALES SPLIT BY CHANNEL SALES SPLIT BY GEOGRAPHY Iittala Asia-Pacific Others 21% 22% Direct 31% Europe 38% Moomin 7% 54% 21% Indirect 62% 13% 15% Waterford Royal Copenhagen 16% Americas Wedgwood ⓒ Fiskars Group *LTM referring to the

  45. Slide 45: Business Area details – Terra LTM sales splits

    Business Area details – Terra LTM* sales splits SALES SPLIT BY CATEGORY SALES SPLIT BY CHANNEL SALES SPLIT BY GEOGRAPHY Direct Asia-Pacific Watering 1% 3% Europe 17% 39% Outdoor 17% 66% 58% Americas 99% Gardening Indirect ⓒ Fiskars Group *LTM referring to the period Q4 2020 – Q3 2021 Nov 9, 2021 45

  46. Slide 46: Business Area details – Crea LTM sales splits

    Business Area details – Crea LTM* sales splits SALES SPLIT BY CATEGORY SALES SPLIT BY CHANNEL SALES SPLIT BY GEOGRAPHY Direct Asia-Pacific 2% 6% Cooking 37% 48% 50% 63% 94% Scissors & Creating Indirect Americas Europe ⓒ Fiskars Group *LTM referring to the period Q4 2020 – Q3 2021 Nov 9, 2021 46

  47. Slide 47: Ongoing programs to be completed by end of year

    The ongoing programs to be completed by the end of the year – expected savings to materialize with lower costs TARGETED COST SAVINGS WILL BE REALIZED COSTS WILL BE SIGNIFICANTLY LOWER THAN ORIGINALLY ANTICIPATED • Transformation program app. EUR 17 million • Originally anticipated to be a total of E

  48. Slide 48: Calculation of financial indicators

    Calculation of financial indicators INDICATOR DEFINITION EBITDA EBIT + depreciation and amortization EBITDA + change in provisions + non-cash adjustments – capital expenditure +/- change Free Cash Flow in inventories, trade receivables and trade payables – cash taxes Cash conversion Free cash flow /

  49. Slide 49: Fiskars Group Capital Markets Day 2021

    Fiskars Group Capital Markets Day 2021

Fiskars Group — Investor Day (November 2021) on 6ix