Fiskars Group - Upbeat 2021 guidance

Q4 in line with pre-announced figures ‘21e guidance: declining EBITA but EUR 110m Raised value range to 10-18 (9-16) Q4 in line with pre-announced figures As expected after the company’s pre-announced figures on 15 January, sales came in at EUR 313.3m (ABGSCe 319m) alongside adj. EBITA of EUR 50m (ABGSCe 54m), in line with the pre-announced results. Sales in the Vita segment were above our expectations at EUR 171.7m (ABGSCe 165m), while Terra sales were lower at EUR 97.8m (ABGSCe 109m). In total, net sales grew by 1.7% (ABGSCe 3.6%) for a margin of 15.9% (ABGSCe 17.0%), corresponding to adj.

EBITA growth of 42.2%. ‘21 guidance points to lower short-term savings than feared Fiskar’s 2021 guidance was more upbeat than we anticipated. The company expects adj.

EBITA to be lower than in 2020, but above EUR 110m. In context, our 2021e adj. EBITA was EUR 109m.

Fiskars states that visibility is low due to COVID-19 and guides for a challenging 2021 in comparison to 2020. The guidance for declining EBITA was expected, as we have seen margins expand significantly on both short and long-term savings. The company has been clear that the short-term savings (e.g.

selling expenses) would be reversed at some point, which we expect to see in 2021. However, the surprise was the upbeat bottom guidance. This implies that the company’s restructuring programme has produced larger savings faster than we initially expected, implying that short-term savings have not been as important as we feared.

On the back of this, going into 2021-2022, we raise our adj. EBITA estimates by c. 3-2% Increased fair value range to EUR 10-18 per share On our updated estimates, the Fiskars share is trading at a ’21-22e EV/EBITA adj.

of 11.1x-9.5x, at 27% below our peer group. During the last three months, our peer group has seen a multiple expansion of c. 11%.

On the back of our increased estimates, rollover effects as well as higher peer multiples, we increase our fair value range to EUR 10-18 per ....