Earnings call transcript: Fiskars Q2 2025 misses EPS forecast, shares fall

Fiskars Group, a $1.35 billion market cap company, reported a disappointing second quarter of 2025, with earnings per share (EPS) on a comparable basis coming in at -€0.05, missing the forecast of 0.052 USD. This earnings miss led to a 3.5% drop in the company’s stock price in pre-market trading. According to InvestingPro analysis, the stock appears overvalued at current levels, trading at a notably high P/E ratio of 101.2x. The company’s net sales declined by 6.8% on an FX-neutral basis, and comparable EBIT fell to €3 million. Despite these challenges, Fiskars remains optimistic about its second-half performance, citing strategic initiatives to mitigate tariff impacts and expand its direct-to-consumer business. The company maintains a strong dividend profile, with InvestingPro data showing a significant 5.65% dividend yield and an impressive 34-year track record of consistent dividend payments.

Key Takeaways

• Fiskars reported a comparable EPS of -€0.05, missing the forecast.
• Net sales declined by 6.8% on an FX-neutral basis.
• The stock price fell by 3.5% in pre-market trading.
• The company is focused on mitigating tariff impacts in the U.S. market.
• Growth in China and direct-to-consumer segments remain positive highlights.

Company Performance

Fiskars Group faced a challenging second quarter, with significant declines in key financial metrics. The company’s net sales dropped by 6.8% on an FX-neutral basis, and comparable EBIT decreased to €3 million. The U.S. market, which represents a substantial portion of Fiskars’ sales, was notably impacted by tariffs, contributing to the overall financial underperformance.

Financial Highlights

• Revenue: Not specified in the earnings call, but net sales declined by 6.8%.
• Earnings per share: -€0.05, compared to a forecast of 0.052 USD.
• Free cash flow: Decreased to €12 million from last year’s Q2 high.

Earnings vs. Forecast

Fiskars’ actual EPS of -€0.05 fell short of the forecasted 0.052 USD, marking a significant miss. This negative performance contrasts with the company’s previous quarter’s targets and expectations.

Market Reaction

Following the earnings announcement, Fiskars’ stock price dropped by 3.5% in pre-market trading, reflecting investor concerns over the company’s financial health and future outlook. The stock is trading closer to its 52-week low of $15.76, indicating a negative trend in investor sentiment. InvestingPro subscribers have access to 12 additional key insights about Fiskars, including detailed valuation metrics and growth indicators that could help inform investment decisions.

Outlook & Guidance

Despite the current challenges, Fiskars remains confident in its second-half performance, projecting a full-year comparable EBIT of €90-110 million. The company maintains a healthy gross profit margin of 45.66% and has demonstrated stable revenue growth with a 2.49% increase over the last twelve months. The company is focusing on mitigating tariff impacts and adjusting its sourcing and manufacturing strategies to improve future results.

Executive Commentary

CEO Yuri Lowemakoski emphasized the ongoing efforts to address the company’s challenges, stating, "Half of our transformation levers are working, half are not." CFO Jussi Siedone highlighted the company’s growth drivers, saying, "The fundamentals what we have in place... are driving the growth."

Risks and Challenges

• U.S. tariff uncertainties continue to impact financial performance.
• The Waterford brand is facing significant challenges.
• Wholesale distribution, particularly in brick-and-mortar retail, is under pressure.
• Seasonal volume fluctuations pose additional risks.

Q&A

During the earnings call, analysts focused on the impact of tariffs on the U.S. market and the performance of the Waterford brand. The company’s distribution network and e-commerce growth potential in the VITA segment were also discussed, highlighting areas of concern and opportunity.

Full transcript - Fiskars Oyj Abp (FSKRS) Q2 2025:

Nora Hottola, Investor Relations, Fiskars Group: Hello, and welcome to Fiskars Group’s Q2 results webcast. I’m Nora Hottola from Fiskars Group’s Investor Relations, and I’m here with our President and CEO, Yuri Lowemakoski.

Yuri Lowemakoski, President and CEO, Fiskars Group: Good morning.

Nora Hottola, Investor Relations, Fiskars Group: And CFO, Jussi Siedone.

Jussi Siedone, CFO, Fiskars Group: Good morning.

Nora Hottola, Investor Relations, Fiskars Group: So Yuri will first take you through the key takeaways of the quarter, after which, Jussi will talk about the financials. Juri will then tell you more about business area specific performance, after which Jussi goes through the tariff topic as well as our guidance for 2025. After the presentations, we will have time for your questions. We will take questions through the phone line as well as through the chat. You can already type in your questions in the chat during the presentations.

And with that, I hand over to you, Jurijn.

Yuri Lowemakoski, President and CEO, Fiskars Group: Thank you, Nora, and good morning. The quarter as I would say is fortunately behind us. And in terms of the key takeaways as you certainly recall in the 2021 launch strategy and period ending end of this year, we’ve had four transformation levers in our strategy. And these topics have been kind of fifty-fifty when you look at what are working, what are not working. When you look at our comparable net sales that has been shrinking in the quarter And definitely, the big decline we’ve seen in The U.

S. Is the key driver to this. The comparable EBIT much driven by lower volumes and declining gross margin was down to only €3,000,000 And gross margin has been basically the KPI on our commercial excellence, this transformation lever. And there, we have had setbacks reasons Julesh will also soon address. Two, fortunately, are working.

So direct to consumer, our direct to consumer business, I. E. Ecom, our own stores, outlets, concessions, they grew in the quarter. And secondly, the transformation lever, the other geographical besides U. S.

Being China grew 12% in the quarter. So that’s clearly a mixed bag of lowlights and highlights. The guidance was updated in June and we issued a guidance for the EBIT as a range between 90,000,000 and €110,000,000 But Jussi will go deeper into the numbers and then I will return back with the business area kind of events and topics issues. Jussi?

Jussi Siedone, CFO, Fiskars Group: Thank you, Juri. So let’s start first top line. As mentioned already, net sales were down 6.8% here on FX neutral basis. It was very much driven by Fiscus BA and then USA. Juri will go through more in details, but being down 11% in Q2, Fiscus was the main driver of this one.

Net sales decline in USA, that decline accelerated actually towards the end of the quarter. So May and June both were down roughly mid teen percentages there. So it’s intensified towards end of the quarter. EBIT down a bit more than €16,000,000 €16,200,000 the other €3,000,000 It was mainly due to lower sales volumes and gross margin, which was also driven by tariff impacts. I’ll go back to that a bit more deeper after a couple of slides.

Also, bearing in mind that Q2 is low season for us, especially slow season in Witte. So at operational leverage, we have OpEx quite evenly split between four quarters and the top line coming down in this kind of low season, it will have a significant impact then on profitability and on EBIT. Gross margin was down two thirty basis points, of which we made a major part four ten basis points and Fiskars was down 150. When it comes to our free cash flow, bearing in mind that last year Q2 was the all time high Q2 cash flow for us. We were now down to a level of €12,000,000 there.

It was mainly inventory and payables driven. Earnings per share on comparable basis was down €0.15 to €05 negative. And then cash flow or cash earnings per share was €0.40 down, both obviously driven by this volume decline and then on cash earnings per share was very much net working capital driven. Then this bridge from last year €19,000,000 to this year 3,000,000 When I said that it’s very much driven by lower volumes, what you can see here is that lower sales volume was the biggest driver of this negative there. When we dive a bit deeper on this total gross margin impact there, you can find out that actually tariff was the main driver of this negative there.

Tariff impact of the 16,000,000 decline in Q2 was roughly one fourth on our EBIT. When it comes to OpEx fluidity there, we continue investing in demand creation and marketing there, but that investment was funded by lower SG and A, especially when it comes to general and admin costs. They were significantly downwards last year And that’s the way we were able to increase spending in marketing, keeping the total OpEx then unchanged. Overall, when we are comparing those two businesses and their P and L profiles now in the first half this year, bearing in mind that these are now first half numbers, not Q2, you can see that Fiske’s model is very cost efficient. There with 40% gross margin and then a bit more than 25% OpEx base there, we were able to deliver still mid teen EBIT margin there.

Whilst Vita, the D2C structure there, especially when it comes to cost side, somewhat heavy. And when we are in the low season, as first half is typically a low season for Witte, then the outcome is this negative 2.6% EBIT margin for the first half. Cash flow, I already mentioned, it was very much driven by increasing inventories worth of 25,000,000 That’s also more in Vita than in Fiscus BA. And then due to the fact that we do have lower volumes, the trade payables were also down. So therefore, the outcome for the first half, EUR12.4 million, is some €37,000,000 down versus last year.

Our last twelve months rolling cash flow is now level of €50,000,000 €48,000,000 specifically. And therefore, typically always, second half has been a stronger cash flow season for us. When it comes then to net debt to EBITDA, now we finished Q2 at level of 3.16 and it’s very much driven by lower last twelve months EBITDA. Net debt as such was pretty much unchanged from Q1, slightly down even there. And therefore, net debt EBITDA was 0.48x higher than what it used to be a year ago in the same period.

When it comes to our liquidity, that remains strong. Our cash of €72,000,000 and then all the credit facilities, what we have here, 300,000,000, of its committed level is $250,000,000 So the liquidity remains strong and that’s the way we like to continue with. Having said that, I hand it back to you, Yuri.

Yuri Lowemakoski, President and CEO, Fiskars Group: Thank you, Jussi. In terms of our business areas on VITA to start with, so big challenge there has been our performance for our brand Waterford. Waterford is crystal. Most of Waterford sales are in The U. S.

And most of our U. S. Sales in WITA are coming from the Waterford brand. We’ve seen every coin has the flip side and the positive side here. We’ve seen growth in China and especially with MUMINARabia, which is a kind of birthday child as MUMI is celebrating its eightieth birthday.

What is the issue with Waterford? I think it’s important to recognize one fact, first of all, in the industrial logic. Crystal manufacturing, it is a process industry, while most of our businesses are actually operating, including the tableware, in a different industrial logic. And when volumes are dropping, suffering the cost absorption topics because of glass furnace, you have to keep it on and the machines on basically, that has created now in the slowest quarter with the volume drop a very big hit. So the negative operational leverage in that industrial logic is severe.

Clearly, on our agenda to make sure that we can a demand and supply that both balance with each other. That’s extremely important. At the same time, with Waterford in The U. S, we have read many news about distribution topics. And distribution topics relate basically to two fundamental topics.

One is the uncertainty that is driving distributors, I. E, in Beta’s case, department stores’ willingness to keep inventories is very low, they have actually as a priority to drive down inventories because they don’t know what the consumer will do. At the same time, there are some distributors and high profile cases. So when you read Bloomberg’s or Financial Times, etcetera, you will find out that there are a few big department store chains, which have apparently some financial issues. And consequently, we have also entered a mode that we are not funding some of our distributors by extending credit, and that has been effectively reducing our distribution on Waterford.

As I mentioned, very positive with MUM in Arabia, but also the other Nordic brands such as Arabia and Verstrand have grown performed well in the quarter and in the first half in aggregate Itala has done it. And that’s also a good segue in terms of the Waterford topic, maybe preempting a question that might come on the line later on. Itala, at some point of time, a couple of years ago, was also suffering in terms of some of the relevant topics to the consumers. And there was a high profile change of the brand identity and a bit shifting gears last year. And we have seen it bears fruit.

So I’m confident that we have the experience to carry out changes and make a brand which maybe in the eyes of some consumers is getting irrelevant again. Meta highlights in pictures. So China Q2 plus 12% and there is a new category on the water bottle side under various brands of ours, which have been performing well. And also Arabia, which has been maybe perceived historically more like a local Nordic brand, has actually gained some foothold and positive development in the Chinese market. And of course, we are celebrating every year the moving day and now it happens to be the eightieth year and that’s something we are happy to celebrate with the consumers.

In terms of BA Fiskars, we’ve seen the tariff topic severely. As we have reported also in the profit warning, about half of Business Area Fiskars business is coming from The U. S. And it’s coming predominantly from products that are sourced from Asia. And the tariff discussion has been hitting that supply clearly.

At the same time, the kraft side, there is one fairly high profile bankruptcy of one of our distributors, which has been also closing some of those distribution doors for us. Again, with the coin having the positive side, unfortunately, Germany, a big economy in Europe. We’ve continued a strong growth in Germany, which we think is on a sustainable basis. And for example, in Sweden, positive distribution gains have helped us to grow in the, let’s say, traditional neighbor country market where we haven’t been that relevant necessarily decades ago. So consequently, we’ve been suffering from the EBIT decrease as a mix from the low volumes and the negative tariff impacts you see just alluded to in the bridge of the EBIT one.

And in terms of the highlights pretty much mentioned, especially proud we are now you can start to get the sixth generation Fiskars Classic scissors from the stores. And even we thought that the previous generation was the best one available, but there is now an even better one available with the sixth generation. That leads actually on sustainability. We have definitely not dropped the ball and we remain committed to sustainability. And we’ve seen a good progress in circularity and in our emission targets.

There is also the third target on the environmental side, the supplier spend by kind of from vendors who have set science based targets has also progressed seriously well. It might be that there can be some setback short term now when we are looking at rebasing some of the sourcing for the U. S. BA Fisker’s business, and there will be a lag basically getting back until we or backwards until we get back to the current level. So that can happen, but that wouldn’t definitely in any way indicate that we have kind of lost the focus on sustainability.

On the social side, we have a zero harm goal and that’s any accident is too much. The absolute number is not very high. The number is marginally up from last quarter and last year, but each and every should be avoidable on the relative level towards peers. I don’t think we are that bad at all. Our inclusion experience is gradually approaching.

We’re at 77% versus a global benchmark of 80%. This is not that far. And the 80% benchmark refers to the top 10% of global high performing companies in terms of inclusion. But that takes us to the tariff topic back and guidance. Jussi, please.

Jussi Siedone, CFO, Fiskars Group: Thank you, Juri. So tariff as such, which has taken a major part of the management time now in the past few months, when it comes just reminding what U. S. Represents us. So U.

S. Is 30% of the whole Fiskars Group net sales. But when we are talking about Fiskars business area, Fiskars brand, it’s 50% of Fiskars brand net sales and Fiskars BA net sales. More focusing here on direct impact because those are measurable, those we can measure at high confidence, but also indirect impacts, particularly on retailer demand and inventory behavior, have materialized now more rapidly and negative than previously anticipated. I already mentioned that what we saw when it comes to our sellout numbers in The U.

S. A. With viscose brand, the first four months, especially the first three months, a pretty solid development there, then somewhat stabilized in April, but then it hit hard in May and June, both month being down roughly 15% to 20% there. So that was the impact came and then also triggered the profit warning we gave a month ago. When it comes to direct impacts there, we still expect that we can largely mitigate the adverse impacts there.

And I’ll show on the next slide there how we are succeeded already partially do it in Q2. And then it’s just timing difference what we have. The actions put in place will have an impact more on the second half whilst the immediate impact already now in our Q2 numbers. We continue prioritizing our market share. So the big customers, especially in The U.

A, is the priority there. We are ready to prioritize that one as well as the cash flow, which means that high focus is on inventories when it comes to this business. When I said that we have succeeded partially mitigated, I start first here on the right where we have Fiskars BA EBIT bridge now for Q2. So even though we came down this roughly €8,000,000 there, you can see that tariff impact as such is one big item there, of course, on top of the volumes. But then this underlying gross margin improvement, mainly driven by pricing here, was able to offset already part of the impact in Q2.

On the left, we have the same for Wita PA. Are focusing on this tariff impact. You can see that that’s a minor driver of this EBIT drop what we have in Vita, more coming from to items Yuri already explained. Then on tariffs, on guidance based on the current visibility on the tariffs, we remain with our newly updated guidance, I. E.

Full year comparable EBIT will be in the range of 90,000,000 to €110,000,000 there. And when it comes to tariffs, the situation is highly dynamic. In fiscal, the actions are in place or will be in place now supporting our second half and that’s behind this guidance. But I would like to highlight that this is very tactical topic at the moment. We go, if not daily basis, on a weekly basis, through the plans what we have in place to mitigate the impacts.

That’s very shortly about guidance and tariffs. And now for the final key takeaways, Yuri.

Yuri Lowemakoski, President and CEO, Fiskars Group: Thank you, Jussi. So again, half of our transformation levers, which I have to remind were set in 2021 for the strategy period up to 2025. So we are on the last kind of lapse of that race, half of them working, half of them not working. So not everything is doom and gloom even though some of the numbers would indicate to that guidance, which was updated about a month ago or a bit more than a month ago. And it reiterated now, of course, we are leaving as we say in the guidance, visibility is limited.

We are leaving now mid July. So we already at this stage have some view how July will evolve, especially on the distribution business with the direct to consumer. We don’t know whether it’s raining or sunny next weekend and whether people will come to the shops, but there is nothing that would have come to our attention, which would be contrary to the plans that support our guidance and that is keeping us confident in terms of things in the pipeline, older programs that we have carried out, which will also have a favorable impact on the cost side, etcetera, in the second half of the year. And you’ll see actually here the other day calculated for me over the last five years, have in four out of five, we have succeeded to do H2, which was strong enough to be true to our guidance and knowing that platforms and bases have been improved continuously with many efforts that gives us the confidence to reiterate the guidance which was issued on the June 12.

Nora Hottola, Investor Relations, Fiskars Group: Thank you, Yuri and Gulse. We now have time for your questions. And we already have some questions here in the chat, but do keep them coming as well. And let’s first take questions through the phone line. So let’s see if we have any questions through the phone.

Conference Operator: The next question comes from Maria Wickstrom from SEB. Please go ahead.

Maria Wickstrom, Analyst, SEB: Yes. Hello. This is Maria Wittstrom from SEB. Can you hear me?

Yuri Lowemakoski, President and CEO, Fiskars Group: Yes. Yes.

Maria Wickstrom, Analyst, SEB: Perfect. Firstly, I wanted to come back, I mean, to the full year guidance, given that you are currently €40,000,000 short of last year, which would if we would assume a flat H2 would leave you to €96,000,000 And I think you mentioned earlier that these the tariff adjustments will be more towards the year end? And then I also be happy to hear more about the Waterford issues because typically if you’re going to make an investment in the brand, it will take a bit more time, I mean, to actually show the concrete on the top line as well as the bottom line. So if you I mean, give a little bit more color like what makes you so confident that you will end up in the range? And has July orders, I mean, from your distributors, I mean, been more on a normalized level, which makes you confident that you could reach the full year guidance?

Yuri Lowemakoski, President and CEO, Fiskars Group: I start, first, terms of the tariff topics. Obviously, the fiscal year’s BA, especially in The U. S, has two main seasons. One is in the early of the year, the garden season and now we are soon through the back to school season, which are kind of the big seasons. At the same time and the tariff situation is definitely a fluid one.

Our teams have done plan A, B, C and D depending on a bit on where the tariff landscape will land. So we have been working really 20 fourseven or the teams locally and our sourcing teams to set up that we have structures for quite many alternatives in terms of that play or game that is currently happening in the global trade and tariff markets. And first of all, the existence of all of these plans is giving, on the one hand, the confidence that once the situation settles, we have a plan. It’s a destroyer, are many of them with those plans. That’s one side.

As I commented, nothing has come to our attention by this morning when we issued the interim or half year report that would be contrary to the plans that we have currently for the second half with respect to the distributors ordering patterns, etcetera. We don’t comment those deeper as any mid quarter type of statements are not typically issued by us. In terms of the Waterford topic, as you said, yes, there are certain things which will take longer. But then again, this issue around the process industry logic of a glass factory and the fact that we’ve been now on the lowest volume quarter, which has been hit further than the hit has been really like taking the bigger acts from the fixed cost assortment and hitting your leg that has been hitting our income statement. But you’ll see if you want to

Jussi Siedone, CFO, Fiskars Group: Yes, exactly. You said, what also needs to remember is the different dynamics what we have in the first and second half here. So first half, predominantly viscous BA business and now we are entering into VITA here. When it comes to viscous BA plans for the second half to deliver the targets what we have set for the business for full year, The good thing is that it’s very much based on the actions already in place or are getting in place as we speak. So we are not betting on any top line growth type of topics, which are not fully in our hands.

So I’m pretty confident with that plan what the team has executed or are executing there in fiscal year. In Vita, as said now, we are entering the Vita era there and where typically we have seen growth and margin improvement in the second half. So that’s also something giving us confidence to deliver the guidance what we have.

Maria Wickstrom, Analyst, SEB: Okay. Perfect. Thank you. And then Q2 showed a nice growth in China. Can you a little bit, I mean, split the growth, I mean, between the brands?

And how much of the growth is coming from these like new products like water bottles that you introduced in the market? And do you think this kind of growth in China is sustainable also for the second half?

Jussi Siedone, CFO, Fiskars Group: Yes. Maria, you might remember when we started the year, Q1 was down, if I remember correctly, 7%. And now we were catching it up. So on a year to date basis, we are up 4% there for China. And at the same time, we see that our Danish brands, so the Gergensen and Reykjerbenheken are also growing, so China is contributing that growth.

What are the categories which are driving the growth? That we haven’t disclosed. And how sustainable the growth is? That’s also partially relating to market. But the fundamentals what we have in place, when it comes to distribution expansion, when it comes to category expansions what we have, they are driving the growth.

So at least from our side, I see that fundamentals we have in place, the more sustainable growth, but of course, the overall demand is the one who which ultimate proves the case.

Yuri Lowemakoski, President and CEO, Fiskars Group: Maybe to fill in. And as you know, I’ve been now in this role for a bit more than two months, but I spent the last nine years in the Board of the company. And we have historically been maybe somewhat shy in terms of category expansion. And now we have so many proofs and so many puddings that our brands can cover and carry on certain category expansions. And that’s of course very pleasant to see that whether it’s witch wood or Arabia kind of patterned water bottle, for example, if it’s fitting well with some nice handbags and so forth to people’s picture.

I think we are currently not anymore shy in terms of using that as one of the growth levers and growing our business.

Maria Wickstrom, Analyst, SEB: Yes. Thank you. I think I don’t have further questions at this point. So thank you very much for this and wish you a very nice summer holidays when you get there.

Jussi Siedone, CFO, Fiskars Group: Thank you, Marie. Thank you.

Conference Operator: The next question comes from Kaia Loykanen from Danske Bank. Please go ahead.

Kalle Loykanen, Analyst, Danske Bank: Hello, hello. This is Kalle from Danske Bank. I have few questions. Maybe we’ll take them one by one. First coming back to the guidance or the lowered guidance.

So you lowered the guidance in mid June. Did you already then know that VITA and Waterford is challenging? Or did the kind of challenges with Waterford come late in June? Or what was the timing of all of this?

Jussi Siedone, CFO, Fiskars Group: Yes. Maybe I start and then Jure please jump in. Then as I said, how we see these first six months this year and then when we said that this was very much U. S. Driven and therefore the first three months strong solid growth in U.

S. A. Stabilized in April and then hit hard in May and June, which then triggered this revised guidance in mid June. So that was the background for this one. What we have seen particularly throughout the year is the challenge in VITA wholesale model in The U.

S. A. It has nothing to do with tariff specifically, but we have seen it. Bearing in mind that U. S.

Is roughly 10% of total VITA, so it has not been so significant impact there at the beginning of the year. Now when we are entering into low volume season, everything counts. And therefore, it probably came through slightly bigger than actually we originally thought.

Yuri Lowemakoski, President and CEO, Fiskars Group: And we run a monthly forecasting process in connection with the monthly closings. All of our businesses prepare forecasts and it was after the May closing, the one which was then hitting the red button and triggered this. And The U. S. Crystal volumes, e, Waterford volumes, they impact effectively two of our production sites in Europe and those effects kind of the whiplash comes slightly delayed.

So as Jossi said, on June 12, the whole magnitude of that whiplash was not exactly identified, but the full year forecast, which in case of Weta, we need to remember that most of the EBIT comes from the last quarter. And this is an off season that was then realized now with the in full extent in the June closing.

Kalle Loykanen, Analyst, Danske Bank: Okay. Okay. And so for Wita, is it true that June was then the weakest or the worst quarter for Vita in terms of EBIT? Or was it May or

Jussi Siedone, CFO, Fiskars Group: You mean what was the month? Of course, as I said, all these kind of things, they were accelerating towards the end of the quarter. So I’m not going to specific which specific month was it. But towards the end of the quarter, these things became more visible.

Kalle Loykanen, Analyst, Danske Bank: Okay. Okay. That’s clear. And then I was wondering about the I mean, mentioned the or actually discussed quite a lot the tariffs and the actions that you have done to mitigate these direct impacts of the tariffs. Is it I mean, sort of actions have you done?

Is it only about raising prices to your customers? Or what have you done? Because I was just wondering that do you already have the prices for the second half agreed with your customers? Or is it are you 100% sure that the price increases will go through and so on? So can you a bit open up more of the kind of the concrete actions on these mitigating actions?

Jussi Siedone, CFO, Fiskars Group: Gal, I’ll now specifically talk to you about fiscal second half here. So when it comes to those mitigation actions there, as you saw in Q2, we got some uplift there on the underlying gross margin through pricing. The good thing is that the plans in the second half, especially the ones which are pricing related, those are already informed to market. They are already in there and they start impacting now in the second half. Therefore, it’s pricing specific part.

We are pretty confident that, that will materialize now in the second half. Then our own actions when it comes to sourcing, when it comes to how we are running our own factories, how we are then further, let’s say, right size our investments on OpEx base and the likes, those are the things we have in place. When I mentioned it OpEx rightsizing, you might remember that when we started the year, we said that this is the year we are, I would say, heavily invest in demand creation. In our terms, it means that actually we had plans significantly increase marketing spend here to promote those new categories for fiscal year further loans later this year. Of course, now we need to stabilize some of those investments.

I’m not saying that we put all the investment in hold, but we are somewhat stabilized them to balance the short term and midterm.

Maria Wickstrom, Analyst, SEB: Okay.

Kalle Loykanen, Analyst, Danske Bank: That’s helpful. And then lastly, lastly on my part, I was wondering about the Waterford, the manufacturing capacity and you explained it quite well that it’s a different type of process or manufacturing process. But I was just wondering that what can you do to adjust this either manufacturing capacity or then the way you produce? How can you increase the flexibility in Waterford? Because I’m sure that there will be hiccups in the markets in the coming years as well.

So I was just wondering what can you do about this manufacturing? And here, I’m not talking about the I mean, I’m more talking looking at the long term rather than the next couple of quarters.

Yuri Lowemakoski, President and CEO, Fiskars Group: That’s very much now in the works. I have personally spent in my prior career a quarter of a century in a process industry logic operated industry where you either are on a on or off modus. It’s a bit similar like a pulp mill or an oil refinery that the capacity utilization, if it goes low, it’s a miserable business. And if it’s high, it’s a great business. And this is now really the task for our teams to find a way.

And there are many, many kind of ideas, but too early to go into those details, really to make sure that we have a setup that’s fit for not only H2’s demand, not only 26 demand, but a longer term solution in here. But that’s something we hopefully can be more transparent in our Q3 release.

Kalle Loykanen, Analyst, Danske Bank: Okay. Fair enough. Fair enough. Thank you. That’s all for me as of now.

Thank you.

Jussi Siedone, CFO, Fiskars Group: Thanks, Balaj. The

Conference Operator: next question comes from Joni Sandvohl from Nordea. Please go ahead.

Joni Sandvohl, Analyst, Nordea: Thanks. Yuri Anjos, it’s Joni from Nordea. Maybe couple of questions also left for me. Maybe still coming back on this tariff issue. Does the market condition actually allow these mitigation actions to be implemented fully?

I mean, you are speaking about pricing adjustment and productivity increases, but how this actually combine with defending market shares and cash flows?

Jussi Siedone, CFO, Fiskars Group: Defending market share, of course, we call it true or I would say prioritizing market share rather than defending prioritizing market share there. It’s category and customer by customer specific topics what we have on the table. As said, we see that it pays back short term to be mindful and commercial agile with those topics to secure the long term. So therefore, there definitely we prefer to have it as long term good partnerships there with the big customers. And I’m talking about U.

S. Customers in this specific topic. Those price increases what we have implemented, as said there, we have been very mindful that the challenge what we have with the tariffs is not only to be mitigated by price increases, but also our own actions, which of course are then easier to implement and faster to implement. So it’s a balance of both. But so far, what we have seen, those price increases, what we have introduced, implemented already, as you saw in our Q2 underlying gross margin then, Fiskars BA, those we are confident that they will materialize.

Yuri Lowemakoski, President and CEO, Fiskars Group: And maybe to add to that, that in most of our key categories, really the competition comes from similar geographies than our products. So there are no alternatives which would be immune to the tariff situation, which then leads to a clearly higher acceptance rate of price adjustments in the marketplace.

Joni Sandvohl, Analyst, Nordea: Okay. Okay. That’s clear. Maybe also one longer term question beyond the ’25. I mean, quite a lot of speaking now about the wholesale.

So what’s your view of your current distributor network? And what can be done here to improve And do you need some changes maybe in the operating model, mean, especially in The U. S?

Yuri Lowemakoski, President and CEO, Fiskars Group: I think we will guide 26% in February 26% and the more strategic topics in a bit different context. But it’s clearly identified. And of course, the first and best cure is always to relevant kind of remain relevant to the consumer. So as long as the distributors are live and kicking, so to speak, then they want to take our products if we are relevant to the consumers, if there is a pull that we need to pay, make sure that we are creating. Then of course, these type of events, as we mentioned, like in the case of BASF Huskers U.

S. When one of our distributors went bankrupt and doors were closed, those are always some type of points of discontinuance. And we need to watch out in that area that we remain not only relevant to the consumer but also accessible to the consumer. That’s the key.

Jussi Siedone, CFO, Fiskars Group: Yes. Jani, the model actually what we have and Fiskars PA leadership has put in place where it’s a combination of new innovations, new categories there. Later this year, we are coming out with many times more new categories versus our historical pattern there. That’s combined with investment in demand creation. We see that the fundamentals, at least on our side, are in place to continue growing wholesale channel in The U.

Joni Sandvohl, Analyst, Nordea: The

Conference Operator: next question comes from Maria Wickstrom from SEB. Please go ahead. Maria Wickstrom, SEB, your line is now unmuted. Please go ahead.

Maria Wickstrom, Analyst, SEB: Hi, this is Maria again. I had one follow-up question. I think you touched upon the subject with Jani’s question as well relating to the distribution in The U. S. And especially for the Visa categories and saying that some of the distributors are having tough time.

Is this isolated to the Visa segment and more maybe to the brick and mortar retail compared to the e commerce? Or do you see it broadly across retailers in The U. S?

Yuri Lowemakoski, President and CEO, Fiskars Group: Answering your question in a very short way, yes, it is focused on the brick and mortar and focused on the VITA distributors where actually e com has taken more off the market. And as we have seen, those who follow some of the bigger department store chains in The U. S, you have seen over the last years how many hundreds or thousands of doors they’ve been closing and shrinking. And that’s not because of poor demand to the Fiskars Vita products, but overall traffic getting kind of online.

Maria Wickstrom, Analyst, SEB: And can you then remind me on the e comm strategy, I mean, for what you have for Visa in The U. S? Is it just through the partners? Or would there be a possibility also to enter or increase the own distribution in the ecom side, I mean, for Visa in The U. S?

Jussi Siedone, CFO, Fiskars Group: The current what we have as said, half of VITA business is not into consumer and this half, roughly onethree is e commerce. What we see that e commerce growth profitable growth in e commerce is one of those key drivers what we have in VITA. How specific in U. A? That’s I would leave it until we have a clear new VITA strategy under the new leadership there in place.

Maria Wickstrom, Analyst, SEB: Yes. Thank you very much. I have no further questions.

Conference Operator: There are no more questions at this time. So I hand the conference back to the speakers.

Nora Hottola, Investor Relations, Fiskars Group: All right. Thank you. So we do have some questions also in the chat. Perhaps we start with some VIDA topics. And this has been touched slightly, but can you please elaborate further why did VIDA’s comparable EBIT declined by over €9,000,000 even though comparable sales declined only by around 3%?

Why did VITAS comparable gross margin declined by over four percentage points? Perhaps Jure, if you start and you’ll see.

Jussi Siedone, CFO, Fiskars Group: Okay. I think Jure, you passed the answer.

Yuri Lowemakoski, President and CEO, Fiskars Group: I addressed that well, but there were many numbers and percentages.

Jussi Siedone, CFO, Fiskars Group: Yes. So when we are talking about season where we have low volumes and when we do have own manufacturing there, which we keep up and running, the nature of the manufacturing setup what we have that hit hard then of course on gross margin through negative production variances and the likes. So that’s simply the reason.

Nora Hottola, Investor Relations, Fiskars Group: All right. And maybe continuing on that. On Wittos GM, is there any meaningful difference in H1 versus H2?

Jussi Siedone, CFO, Fiskars Group: Well, H2, of course, having high volumes there, having higher direct to consumer volumes also in the second half are sweetening the margin mix and therefore coming from that perspective. So when we talk about sales gross margin, either channels where the gross margin are coming in, they are coming now from higher gross margin versus the first half because of higher volumes.

Nora Hottola, Investor Relations, Fiskars Group: Great. Thank you. And then perhaps moving to U. S. Topics.

Given the sharp drop in sales in U. S. In May, June, how is the beginning of Q3 looking? The

Yuri Lowemakoski, President and CEO, Fiskars Group: only comment I made and that will be the only comment I will make on the current trading is that nothing has come to our attention. So far being in the July, that would be contradicting our plans for H2, which is of course the plans that are compatible with our guidance.

Nora Hottola, Investor Relations, Fiskars Group: Thank you. Perhaps some more specific financial questions. On one offs, first, is there still some one off costs expected for H2 from announced cost cutting measures? And then secondly, why was there a one off from the old watering business divestment in this quarter?

Jussi Siedone, CFO, Fiskars Group: If I start first this U. S. Watering business there, we had positive one off there as you probably have seen in the notes. But the background for that is that when we sold the business in very early twenty twenty two, nothing regarding the transaction as such, but then we had long term service agreement in place for the buyer. And therefore, now they succeeded to finalize the deal what we have regarding these service related topics what we had.

We had written down some of those receivables earlier, recorded that as an items affecting comparability. And now this reversal of write down was also recorded as items affecting comparability, but that’s positive side. When it comes to this longer term items affecting comparability, HQ level programs have been closed already last year. That’s I think we reported was Q3 or Q4 that those big programs are over. We have some BA specific programs going on.

You might remember that we announced this €10,000,000 savings plan in Wita earlier this year and the likes. So there we have some tails still left, which will be recorded as non recurring items as communicated earlier.

Nora Hottola, Investor Relations, Fiskars Group: Thank you. And then can you discuss a bit more on your leverage in relation to the target level? Any plans regarding more rapid deleveraging?

Jussi Siedone, CFO, Fiskars Group: Yes. As I mentioned, we finished Q2 at a net debt EBITDA 3.16, which admittedly is much more than our long term or target of 2.5 there. Typically, have said already, second half is stronger cash flow season for us versus the first half. And then we do have plans regarding this manufacturing adjustment, what Juri also mentioned there, take down the inventories to promote our second half cash flow. So following the historical pattern, we are typically coming down in our net debt to EBITDA towards the year end.

What’s then the ultimate level at the December that I can’t comment yet.

Nora Hottola, Investor Relations, Fiskars Group: Okay. Great. More for Jussi. In H1, financial items increased significantly. Could you elaborate on the key drivers behind this increase, particularly the impact of foreign exchange differences and other financial expenses?

Will this trend continue in H2?

Jussi Siedone, CFO, Fiskars Group: I’ll try to provide some high level reply here because it’s also quite technical. Overall, our first half financial items net was €21,000,000 Last year, they were €12,000,000 plus. So there’s increase of €9,000,000 in the first half. But if you take a look of our cash interest there, actually cash interest was down versus last year. So €21,000,000 on P and L, 5,000,000 on cash flow.

So you can see that the difference there is very much coming from valuation items, the biggest one being FX there. We have hedged FX, U. S. Dollar being the biggest currency what we have. You might remember that we are net buyer of U.

S. Dollar and we have hedged that now at level of 70%. However, we are not in hedge accounting and therefore all these valuation difference are through our P and L on a monthly basis. So that’s the main reason there. When it comes to true interest expenses there, they are pretty much the same level with last year.

Nora Hottola, Investor Relations, Fiskars Group: Thank you. And just one more question to go, but please if you have any more questions, now is your chance to type them in. Perhaps we have already touched on this topic, but could you provide more detail on the time line, cost implications and expected margin impact of your sourcing rebasing efforts regarding The U. S. Tariff situation?

Yuri Lowemakoski, President and CEO, Fiskars Group: As I indicated earlier, we have multiple alternatives a bit depending where the tariff letters land on different capitals, typically in Asia or sometimes in other geographies. And from that perspective, to quantify these topics is rather difficult. It is clear that, as I indicated also earlier, this is something impacting the entire market, not only Fiskars, but all of our competitors, the situation, which then will be leading to price adjustments if that is relevant depending how that landscape kind of in the end settles down. But there are good number

Maria Wickstrom, Analyst, SEB: of

Yuri Lowemakoski, President and CEO, Fiskars Group: plans and let’s now keep fingers crossed that there will be some kind of a peace and calm that we can start executing those plans.

Nora Hottola, Investor Relations, Fiskars Group: Great. Thank you. Well, we don’t have any further questions. So with that, I thank you all for listening in and participating. And we wish you a good summer day.

Yuri Lowemakoski, President and CEO, Fiskars Group: Thank you very much for joining. Thank you.

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