Fiskars
Fiskars Group - Strong Q2 beat driven by COVID-19 (ABG Sundal Collier)
2020-07-31 09:28
Sales 20% above ABGSCe (EUR 280m vs. 234m)
Terra & Crea drive beat with y-o-y growth of 23% & 16%
Sales and margins pandemic-driven, hard to extrapolate
‘21e-‘22e sales and EBIT raised by 1-2%Fiskars Group’s Q2 was exceptionally strong, beating our expectations in essentially every aspect. However, we do not deem the results to be a large, long-term estimate mover. The segments driving the beat were Terra & Crea. These have seen exceptional circumstances in weather, limited lockdowns as well as a pandemic-driven crafting demand increase. Adding to this, short-term savings have boosted margins. We make smaller positive revisions of 1-2% for ‘21e-‘22e to Sales and EBIT on the back of the report. Looking at Q3, which is the smallest quarter of the year for Fiskars, we are somewhat cautious due to the importance of the “back-to-school” period in the Crea segment, which is likely to be somewhat soft due to distance education. The focus will lie on Q4, however, due to the FY importance of the gifting season in Vita (30% of Group EBITA in ’19). The firm still has poor visibility for orders, which is why no ’20 guidance has been given. We estimate a 6.5% y-o-y Vita Q4 sales decline, resulting in a flat FY Group adj. EBITA y-o-y ’19-‘20e.
Q2 details
Sales came in at EUR 280m (+20% vs. ABGSCe of 234m). Adj. EBITA was EUR 28.6m (ABGSCe 11m) and adj. EBIT was EUR 21.9m (ABGSCe 8m). The firm recorded NRIs of EUR -1.1m (ABGSCe -7m) resulting in a reported EBIT of EUR 20.8m (ABGSCe 1m). Gov’t support reportedly did not have a significant impact on the cost base, leaving the profitability beat (adj. EBITA margin of 10.2% vs ABGSCe 4.8%) explained by scale and other savings, including ongoing cost initiatives.
Adj. EBITA ‘20e-22e 14x-10x, value range EUR 8-14 reiterated
On our updated estimates, the Fiskars share is trading at an adj. EV/EBITA in ‘20e-‘22e of 14x-10x and an adj. EV/EBIT of 16x-11x. On the back of our small revisions, we keep our value range of EUR 8-14 per share.
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