Fiskars: Starts employee consultations in Finland - Nordea

Fiskars initiates employee consultations in its Iittala glass factory and retail network in Finland. Owing to high inventories, Fiskars is aiming to temporarily adjust Iittala glass factory production through furloughs due to high inventories. We note that the company was building up inventories in 2022 owing to supply chain uncertainties. In addition, Fiskars is planning to re-organise and optimize its retail network in Finland. The planned measures are expected to lead to the possible closure of three stores in Finland. In total, consultations in Iittala factory and retail network concern around 200 employees (around 3% of the total workforce) of which 26 are within retail network. We believe consultations relate to the strategy acceleration program (launched in January) which aims to EUR 30m annual cost savings, of which around half are expected to be realized during H2 2023. We have anticipated challenging H1 due to high inventories and low consumer confidence. For Q1, we model 16% y/y sales decline and 37% y/y decline in adjusted EBIT. We are 4% below Refinitiv consensus on sales and in line on adjusted EBIT for Q1. We note that possible furloughs and network optimisations relate to Vita segment, while earlier furloughs were related to Crea segment. For Vita, H2 is seasonally more important, while proactive measures could bring inventories to more healthier levels going into H2. This is likely to have positive impact on gross margins, we believe. We have a fair value range of EUR 17.6-21.7 per Fiskars share.