Fiskars Group: Cutting up market headwinds - ABG

Q2 beat on sales and adj. EBIT FY’22 guidance kept intact We leave ’22-‘24e adj. EBIT unchanged Showing resilience towards failing consumer confidence

Fiskars came in with a strong Q2 despite tough comps, beating both ABGSCe and cons. expectations with sales of EUR 319m (+3% vs ABGSCe, +9% vs cons.) and adj. EBIT of EUR 36m (+9% vs ABGSCe, +17% vs cons.). At a top-line level, the company managed to grow for a ninth consecutive quarter with an organic growth of +8%. We look positively at the D2C investments that have started to bear fruit, especially in the Vita segment, which was a key growth driver in Q2. Vita grew sales by 7% organically, despite declining demand in the Nordics. For Terra, the generally strong market in the Americas was negatively impacted by cold weather but displayed double digit growth in Europe, resulting in a 6% org. growth. Crea, supported by a back-to-school season in the Americas, grew by an impressive 23% organically. The EBIT margin did, however, contract by ~2pp y-o-y following increased input costs coupled with continued investments into its D2C initiatives.

Operational actions expected to mitigate cost inflation Several initiatives have been taken to mitigate the falling consumer confidence, surging input costs and supply chain related problems. This includes investments into D2C, inventory build-up, and price hikes to be implemented in Q3. We continue to view management’s reiteration of the FY’22 guidance for EBIT above 2021’s level of EUR 154m as plausible. On the back of today’s beat, we make minor positive estimate revisions on sales (+1% for ’22e-‘24e) and leave adj. EBIT roughly unchanged. We also raise our expected net profit by 7-4% for ’22e-‘24e following a positive tax effect in Q2 and a slightly lower expected tax rate going forward.

Share trading at 10x-8x EV/EBIT adj. for ’22e-’24e The Fiskars share is down 19% YTD, and is currently trading at 10x-8x EV/EBIT adj. in ’22e-’24e. Considering our minor estimate revisions, we leave ... Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/fiskars-group/Equity-research/2022/7/fiskars-group---cutting-up-market-headwinds/