Fiskars Oyj Abp · OMXHEX:FSKRS
Fiskars Oyj Abp — Fiskars Group — SEB Small & Mid Cap Day 2024
36 slides from Fiskars Oyj Abp's conference presentation, Sep 19, 2024
Slide 1: Fiskars Group at SEB Small and Mid Cap Day
Fiskars Group at SEB Small and Mid Cap Day NATHALIE AHLSTRÖM, PRESIDENT AND CEO SEPTEMBER 1 9, 2024
Slide 2: Pioneering design to make the everyday extraordinary
Pioneering design to make the everyday extraordinary – global home of design-driven brands for indoor and outdoor living SALES SPLIT BY BRAND* SALES SPLIT BY GEOGRAPHY AND BUSINESS AREA (BA) Asia-Pacific Georg Jensen 19% 12% 49% Europe Royal Copenhagen Fiskars 9% 32% 37% Americas 8% Wedgwood 7% SALE
Slide 3: In the final leg of our transformation journey
In the final leg of our transformation journey 2021 2025 Several strongholds Transforming the company amidst We are becoming sharper to build on a tough operating environment • Pioneering design • Managing tough market conditions; • Sharpened logic with active protecting profitability and cash portf
Slide 4: Long-term market dynamics are attractive
Long-term market dynamics are attractive POWERFUL BRANDS IMPORTANCE OF LUXURY IS SUSTAINABILITY THAT SURROUND DIRECT-TO- ATTRACTIVE IS KEY THE CONSUMER CONSUMER LONG-TERM 50% of consumers Integral to buyer’s 6-8% CAGR forecast 58% of consumers feel globally willing to journey – storytelling, for the
Slide 5: The transformation continues…
The transformation continues… WE FOCUS ON WINNING: LOGIC Transformation Brands Channels Countries levers making our foundation stronger Commercial excellence Direct-to-Consumer Sharpened portfolio TRANSFORMATION LEVERS logic – clear roles for U.S. each brand China Evolving our operating model toward
Slide 6: …and is laying the foundation for stronger future growth
…and is laying the foundation for stronger future growth GROSS MARGIN HAS SHARE OF DTC SALES HAS CHINA NET SALES HAVE MORE U.S. NET SALES DECLINED IMPROVED CLEARLY GROWN STEADILY THAN TRIPLED FROM 2020 IN 2023* EURm EURm CAGR -4% +6% -8% >49% >50% 404 CAGR +48% 375 374 47.8% 49% 361 47% 46.8% 56 57
Slide 7: Sharpened portfolio logic – clear roles for each brand
Sharpened portfolio logic – clear roles for each brand Maximise Accelerate INVESTMENTS AND RESOURCES potential ALLOCATED TO ENHANCE VALUE CREATION : Winning • Make the big brands bigger Three large • Surround the consumer through luxury brands category expansion • Command high-end positioning* Utili
Slide 8: Reshaping our portfolio inorganically: M&A – case Georg Jensen
Reshaping our portfolio inorganically: Systematic & disciplined approach to M&A – case Georg Jensen Fiskars Group M&A playbook Identify & Acquire Integrate Operate ▪ Confirmed strategic fit, ▪ Performance in line with business case • Strategy building on complementary strengths Case category expansi
Slide 9: Evolving our way of operating towards Business Area independence
Evolving our way of operating towards Business Area independence for increased speed and impact 2020: TODAY: BA DEDICATED EMPLOYEES: BAs as product owner, part of BAs as business owner, Group-wide matrix organization P&L accountable BA BA BA BA BA ~10% Terra Crea Vita Fiskars Vita Brand, marketing &
Slide 10: Growth fundamentals put in place one by one – case Moomin Arabia
Growth fundamentals put in place one by one – case Moomin Arabia Clear building blocks for growth… Category expansion – Surrounding the consumer with home textiles – In 2020, only ceramics → today approx. 20% textiles Channel expansion – Expanding DTC with 8 new brand stores this year Country expans
Slide 11: Strong ESG track record and commitment is key for growth
Strong ESG track record and commitment is key for growth ENVIRONMENTAL SOCIAL Target May 1-6/2024 Target 2024 2023 At the end 2.8 0 81 1-6/2024 1-6/2024 -46% * of 06/2024 77 24% -54% 58% Base year 2021 50% Base year 2017 -60% Base year 2018 -30% Target set 2020 60% in 2030 in 2030 in 2030 in 2024 Me
Slide 12: Thank you! Key messages
Thank you! Key messages • We are in the final leg of transformation • Our profile is increasingly attractive • We evolve our operating model for speed & impact • Our growth fundamentals are starting to deliver 12 SEPTEMBER 2024 Ⓒ FISKARS GROUP
Slide 13: Gs —— ae
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Slide 14: Appendix
Appendix 14 SEPTEMBER 2024 Ⓒ FISKARS GROUP
Slide 15: Guidance for 2024 (unchanged)
Guidance for 2024 Assumptions and actions behind the guidance (unchanged) - The operating environment expected to + Savings from the completed efficiency remain challenging and programs expected to impact demand support EBIT Fiskars Corporation expects - Wage inflation to remain comparable EBIT to b
Slide 16: Challenging operating environment reflected in progress in sales and EBIT targets
Challenging operating environment reflected in progress in sales and EBIT targets FINANCIAL TARGETS TRACKING LTM LAST KPI TARGET 2021 2022 2023 Q2 2024 3 YEARS NET Organic, FX neutral Mid- CAGR. Single-Digit growth +14.2% +1.7% -9.7% -5.8% SALES -2.0% Mid-teen EBIT margin (excl. EBIT IAC) by end of
Slide 17: Net sales: Four brands expected to deliver solid growth
Net sales: Four brands (70% of net sales) are expected to deliver solid growth in the next two years NET SALES, FY 2023* ANNUAL GROWTH LAST 2YRS GROWTH RATIONALE FOR THE NEXT 2YRS • Over-invest to grow DTC first, Accelerate 31% Accelerate +6% across key cities & categories • Unlock Fiskars brand pot
Slide 18: Profitability: Further gross margin improvement
Profitability: Further gross margin improvement through investments in growth drivers and supply chain efficiency gains GM CONTRIBUTION (PP), LAST 2YRS ENHANCED GROSS MARGIN DRIVERS COST OF GOODS POTENTIAL FOR GROSS MARGIN IMPROVEMENT 100% • Warehouse footprint vs. Logistics & strategic channel mix
Slide 19: Profitability: Further SG&A leverage through the ongoing programs
Profitability: Further SG&A leverage through the ongoing programs SG&A STRUCTURE ONGOING PROGRAMS 2023 (%) Program Target and main levers Related one-offs Status January • Savings of EUR 30m, half of which in • EUR 6m • 100 roles reduced 2023 H2 2023. • Fully recorded in YTD • External services • Ne
Slide 20: Growth investments' share of CAPEX allocation will increase
Growth investments’ share of CAPEX allocation will increase COMMENT NEXT 2YRS FISKARS VITA • CAPEX 4-5% of • 60% Expansion Net Sales Retail 7% • 40% Renovation/maintenance (earlier approx. 4%) Functions 12% • Growth investments’ Product Development 12% share in Retail, Supply Chain and Digital will
Slide 21: Towards mid-teen EBIT% – balanced improvement
Towards mid-teen EBIT% – balanced improvement boosted through gross margin & announced cost efficiency programs • Gross margin improvement EBIT MARGIN BRIDGE 2021-2023-2025 (%) expected to continue 20 supported by the Georg Jensen acquisition +3.4% -0.8% Mid- -5.2% teen • SG&A efficiency mainly rang
Slide 22: Free cash flow (FCF) and net debt
Free cash flow (FCF) and net debt 231% FY FREE CASH FLOW, EURM AND FREE CASH FLOW / LTM NET PROFIT (EXCL. NET DEBT, EURM (31.12.) AND NET DEBT / LTM EBITDA (EXCL. IAC) IAC) 92% (L3yrs) Cash conversion rate 109% Negative 231% 0.71X 1.55X 2.54X 185 447 2.5X 325 95 1.3X (L3yrs) 296 Senior net debt Net
Slide 23: Strong balance sheet has enabled steady investments and shareholder returns
Strong balance sheet has enabled steady investments and increasing shareholder returns despite recent cash flow volatility NET DEBT / EQUITY AT QUARTER- CASH FLOW FROM OPERATIONS (CFO), CAPEX AND CASH RETURNS TO END AND LONG-TERM AVERAGE SHAREHOLDERS 80 236 (%) EURm 70 250 203 60 Net Debt / 50 Equit
Slide 24: Principles for capital allocation prioritization
Principles for capital allocation prioritization 2024 2025 Deleverage balance sheet back to the target level Priority Maintain Secure funding for organic growth investment Maintain Maintain Ensure stable, sustainably increasing cash dividend Priority Priority Maintain financial flexibility for futur
Slide 25: Solid history of returns to shareholders
Solid history of returns to shareholders: a foundation for resilient and sustainably growing dividends 10.0% EPS, EPS excl IAC and DPS 2019-2023 EPS, EPS excl IAC and DPS 2019-2023 Dividend CAGR 2019-2023 1.37 1.21 67% 1.15 1.06 2.68 0.99 2.46 0.93 0.86 Payout Ratio on EPS excl. 0.81 0.83 0.80 0.82
Slide 26: Q2 2024
Q2 2024 26 SEPTEMBER 2024 Ⓒ FISKARS GROUP
Slide 27: Highlights
Highlights ANOTHER SOLID DELIVERING GUIDANCE FOR GEORG JENSEN QUARTER IN A SAVINGS FROM 2024 INTACT: I N T E G R A TI ON CHALLENGING COMPLETED NEARLY MARKET: EFFICIENCY C O M P A R A BL E E B I T COMPLETED – PROGRAMS EXPECTED TO BE ALL-TIME HIGH SLIGHTLY ABOVE ON TRACK WITH • GM% DRIVEN SIMPLIFIED W
Slide 28: Q2 2024 Group key figures
Q2 2024 Group key figures GROSS MARGIN % 49.1 Q2/2023: 46.8 REPORTED NET SALES, EU Rm COMPARABLE EBIT (EUR m) AND COMPARABLE EBIT MARGIN, % FREE CASH FLOW EURm 49.3 EURm % +4.9% 50 15 *-5.3% 13.5% 350 307 319 41.4 36.3 Q2/2023: 41.6 300 280 281 40 11.4% 268 250 10 COMPARABLE EPS 8.7% 30 7.8% EUR 200
Slide 29: Q2 reported net sales increased through the acquisition of Georg Jensen
Q2 reported net sales increased through the acquisition of Georg Jensen, comparable net sales declined in a challenging market Q2 2024 NET SALES BRIDGE, EURm Q2 2024 COMPARABLE NET SALES BY BUSINESS AREA, EURm 290 +4.9% BA Fiskars 150.1 -2.7% +28.1 281.0 280 BA Vita (Org) 101.8 -8.7% -5.3% 270 267.9
Slide 30: Q2 EBIT EUR -4.2m from previous year – savings partially offset negative volume
Q2 EBIT EUR -4.2m (EUR -7.8m excl. Georg Jensen) from previous year – savings partially offset the negative volume impact Q2 2024 EBIT EXCL. IAC BRIDGE, EURm EURm -4.2 25 -7.8 23.4 -0.1 23.3 20 +3.7 19.2 15.5 15 Emp loyee cost s S G &A 10 CO G S 5 0 Q2-2023 FX Q2-2023 Sales/ Topline Marketing D&A Em
Slide 31: BA Vita Q2: All-time high gross margin
BA Vita Q2: All-time high gross margin, improving both organically and driven by Georg Jensen REPORTED NET SALES, EUR m COMPARABLE EBIT (EURm) AND COMPARABLE EBIT MARGIN, % • Reported net sales increased +14.3% through the acquisition of Georg -8.7%* EURm % Jensen 140 15 14.4 15 127 130 12.2 11.4% 1
Slide 32: BA Fiskars Q2: Softness in sell-out partially offset by strong spring season
BA Fiskars Q2: Softness in sell-out partially offset by strong spring season in the Nordics and Gerber’s good growth REPORTED NET SALES, EUR m COMPARABLE EBIT (EURm) AND • Comparable net sales decreased COMPARABLE EBIT MARGIN, % due to both the U.S. and EURm 37.7 % Continental Europe 198 200 191 191
Slide 33: All-Time-High Q2 Free cash flow driven by Net Working Capital Reduction
All-Time-High Q2 Free cash flow driven by Net Working Capital Reduction QUARTERLY FREE CASH FLOW, EURm Q2 FREE CASH FLOW, EURm EURm EURm +8 Q2-24 vs. LY 100 250 EBITDA 21.5 - 15.6 78 Change in provisions -2.6 - 16.2 75 200 Non-cash adjustments -0.0 + 0.1 53 49 150 50 42 Cash Flow from operations 18.
Slide 34: Asset efficiency decreased temporarily due to the Georg Jensen acquisition
Asset efficiency decreased temporarily due to the Georg Jensen acquisition CAPITAL EMPLOYED EURm FINANCING, EURm June-24 Jun-23 Dec-23 June-24 Jun-23 Dec-23 GW and other intangible 596 502 592 Equity 758 789 824 PPE and biological assets 216 196 214 Interest-bearing debt 414 251 423 Capitalised leas
Slide 35: Net Debt gradually declining post Georg Jensen acquisition
Net Debt gradually declining post Georg Jensen acquisition - Net Debt/ LTM EBITDA (excl. IAC) down to 2.7x NET DEBT (EURm) AND NET DEBT / LTM EBITDA (EXCL IAC) EURm Multiple 600 3.0x • Net Debt / EBITDA is 510 500 Max Target 2.5x expected to decline 478 447 towards the end of the year, provided the
Slide 36: Quarterly development – last 3 years
Quarterly development – last 3 years NET SALES, EUR MILLION COMPARABLE EBIT (EUR MILLION) AND EBIT MARGIN (%) 400 60 18 353 346 52 16 333 319 50 307 304 14 300 292 293 275 268 283 281 41 40 38 12 241 36 34 33 32 31 10 30 200 30 25 8 23 20 19 6 18 100 4 10 2 0 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1