Fiskars Group - In for yet another strong quarter

Q2 results due on July 29 We expect sales of EUR 290m and adj. EBITA of 35m We raise our value range to EUR 13-22 (12-21) Positive trends to continue in Q2 After Fiskars’ guidance upgrade on 23 June, we know that the outlook for the company’s Q2 report looks bright. The strong numbers seen from both the DIY industry and HUSQ only strengthen this belief. In the second quarter, Husqvarna’s Gardena Division, which is a competitor to Fiskars’ Terra segment, posted flat y-o-y organic growth during Q2’21 on tough Q2’20 comps, pointing towards continued strong momentum for Fiskars as well.

Q2 numbers For Q2, we expect Sales to grow organically by 7% to EUR 290m and forecast adj. EBITA of 35m for a margin of 12%, up from 10% in Q2’20. The main reason for our margin expansion forecast is Vita, which was in the red last year.

For Terra and Crea, we have assumed organic growth rates of 1% and -5%, or 25 and 10% above 2019 levels, respectively. On the margin side, we expect y-o-y margins to contract from their extraordinary 2020 levels in both Terra and Crea, and forecast declines of c. 3pp in both segments.

As such, Vita is the main driver of margin expansion, where we expect organic growth of 25% y-o-y with margins rising from -10% to 6%. We expect the segment to be flat organically vs. 2019, compared to -1% in Q1’21.

Value range lifted to EUR 13-22 (12-21) per share After the 23 June guidance upgrade, we raise our adj. EBITA estimates by 4% in 2021 and 2% in ‘22e-‘23e. We remain cautious given tough H2 comps within the crafting segments, and continue to expect a margin decline for 2022-2023 despite support from the savings programmes coming into full effect in 2022.

On our updated estimates, the share is trading at a ‘21e-‘23e EV/EBITA adj. of 12x, corresponding to the Fiskars Group share trading 10% below our peer group.