Q4 marks the seventh consecutive quarter of growth for Fiskars, with sales increasing by 13% y-o-y to EUR 353m (+8% vs ABGSCe EUR 327m). All business areas contributed in the quarter but Terra stood out with organic growth of 21% y-o-y, driven primarily by increased demand for gardening tools. In terms of profitability, adj. EBITA decreased by 28% y-o-y to EUR 36m (+5% vs ABGSCe EUR 34m) which is explained by higher costs related to several growth initiatives such as recruitment of key talent within IT as well as DTC investments. Considering the nature of the costs, we view the decline in adj. EBITA as reasonable as long as we continue seeing proof of growth into 2022e. In contrast with the adj. EBITA drop, we saw a strong gross margin of 43% (+1.4pp y-o-y), which we think provides evidence that Fiskars is successfully offsetting cost inflation through price hikes and increased operational efficiency.
Lean YE balance sheet allows for increased investments
Management states that it aims to grow comparable EBIT from its 2021 level. Note that the Group is shifting from adj. EBITA to adj. EBIT in its reporting, from Q1’22e. Although we do not expect ’22e to be as strong as ’21, we take a positive view towards Fiskars’ newly launched growth strategy and its ability to execute on it. We also note the Group’s YE ND/EBITDA ratio of 0.7x, which allows for e.g. increased M&A activity, leaving room to add to our estimates. We make minor estimate revisions, raising ’22e-’23e sales and adj. EBITA by 3%, due mainly to Q4 deviations but also due to some FX effects.
Share is trading at 13x-12x EV/EBITA adj. in ’22e-’23e
On our updated estimates the Fiskars share is trading at 13x-12x EV/EBITA adj. in ’22e-’23e. Moreover, we leave our fair value range unchanged at EUR 18-26 per share. In conjunction with the Q4
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