Fiskars Group: EBIT intact despite 10% miss on topline - ABG

Magnitude of soft year-end misunderstood
In mid-December, Fiskars communicated an expected FY'22 adj. EBIT of EUR 150m, down from the previous guidance of EUR 154m. Today's communicated FY'22 adj. EBIT of EUR 151m is hence slightly above guidance, beating ABGSCe by 7% and Factset cons. by 2%. Topline figures were softer than expected, however. At EUR 304m (-14% y-o-y), Fiskars' Q4'22e net sales were 10% below cons. and 11% below ABGSCe. Fiskars continues struggling with retailer demand, especially in the US, but both ourselves and cons. had misjudged the magnitude of previously communicated order cancellations as the retailer part of sales declined by 26% LFL in the quarter. The soft development in US-focused Terra and Crea means, however, that the EBIT decline is not as marked due to the segment mix it entails. We expect that the full print will point to a relative outperformance for Vita. Despite limited deviations on margins, we believe that the significantly lower volumes delivered points to a soft cash flow for Q4'22e on account of a larger inventory build-up than anticipated.