Fiskars Group: A bumpy road smoothed out by a simple ‘I do’ - ABG

Q2 report due on July 28 We expect sales of EUR 309m and adj. EBIT of 33m Share trading at EV/EBITA of 8.9x-7.7x in ‘22-‘24e Wedding season could compensate lagging sales volumes Fiskars, like its peers, faces a bumpy Q2 characterised by tough comps, higher costs and declining consumer sentiment. In China, we expect that the market has been negatively affected by lockdowns, but that the effect has been mitigated by a re-opening displaying continued demand. Given the current market environment, as well as the cold weather in the start of Q2, we expect weakened consumer demand across all regions for the quarter. Nonetheless, we believe this will be slightly offset by a higher sell-through rate, mainly in Sweden and Finland. Given this, we estimate organic growth in Q2 of +1% and -5% for Terra and Crea, respectively, and y-o-y adj. EBIT margin contractions of -2.7pp. to 9% and -0.8pp. to 26%. For Vita, we expect sales to have been supported by a strong wedding season, particularly in the US, with purchases of high-ticket products resulting in org. sales growth of 5%. We expect this to lead to largely flat adj. EBIT margin development y-o-y to 10.5% in Vita for Q2. Estimates down on weaker consumer sentiment All in all, we expect sales in Q2 grow by 2% organically on tough comps to EUR 309m, and an adj. EBIT margin of 10.8% for adj. EBIT of EUR 33m. Based on a slow start to the quarter coupled with surging inflation and higher input costs we lower our FY’22-24e sales by 2%, with FX as an offsetting factor. Additionally, we lower margins and cut our FY’22-‘24e EBIT by 2-6%. While visibility regarding consumer sentiment, inflation and China is very low, we continue to view Fiskars’ FY’22 guidance of EBIT growth to be plausible, especially with the support from the two savings programmes. Value range lowered to EUR 19-30 (20-32) per share On our updated estimates, the share is trading at EV/EBITA of 8.9-7.7x in ’22-24e. Following our estimate revisions, we lower our value range ... Läs mer på ABG Sundal Collier