Fiskars Group - 2021 to be another strong year

Starting 2021 where it left off Adj. EBITA in line with Q4, record Q1 Value range up to EUR 12-21 (10-18) Strongest Q1 ever Fiskars Group continued to deliver record results in its Q1 report, which was pre-announced on 19 April. Sales grew by 23% organically, to EUR 302m. We note strong performances in all three business areas, where Crea and Terra continued their double-digit growth, and Vita started to pick up on soft comps.

Given the guidance upgrade on 19 April, we conclude the company is likely to have good enough visibility into the start of Q2. Home improvement looks like it will remain strong, forcing a significant increase to our 2021 sales estimates of 8%. With the pandemic continuing to greatly affect consumers’ everyday lives, 2021 is looking like another strong year for the category.

However, we are cautious about extrapolating the current trend completely, as there continues to be low visibility into demand as the pandemic wears off. Outstanding profitability aided by cost programs The company had excellent profitability, with an adj. EBITA margin of 16.5%.

All segments posted strong margin expansion, with Vita’s margins improving the most, from -4% in Q1’20 to 12%. This is a particularly high figure compared to the segment’s history, as it is usually in low single-digits in Q1. Management said that short-term savings are starting to wear off, with the saving programs (in combination with volume growth) driving the margin expansion.

With sales holding up and the long-term savings programs having an effect faster than expected, we raise adj. EBITA by 25% for 2020e, but only 5% for ‘22-‘23e, as the full savings were already in our 2022 estimates. Raising value range to EUR 12-21 on revisions & peers On our updated estimates, the share is trading at a 13x-12x EV/EBIT and 11-11x EV/EBITA on ‘21e-‘23e.

This corresponds to the share trading 14% below peers on 2022e EBITA. With our estimate changes, greater confidence in the margin expansion as w....