FISKARS CORPORATION STOCK EXCHANGE RELEASE May 11, 2005 at 8.30 a.m. FISKARS CORPORATION INTERIM REPORT JANUARY-MARCH 2005 (This unaudited interim report complies with International Accounting Standards IAS 34.) FISKARS OPERATING PROFIT FROM INDUSTRIAL OPERATIONS AS INDICATED FOR FIRST QUARTER Highlights of first quarter, 2005 Net sales EUR 131.8 million (140.6) Operating profit EUR 8.9 million (12.8) Profit before taxes EUR 13.0 million (14.8) Operating profit from industrial operations EUR 9.5 million (13.3) Share of profits from the associated company Wärtsilä EUR 6.2 million (3.9) The School, Office and Craft product group in the US has been strengthened by the acquisition of a manufacturer of branded scissors. FISKARS CORPORATION IN BRIEF EUR million Q1/2005 Q1/2004 2004 Net sales 131.8 140.6 566.3 Operating profit 8.9 12.8 52.1 Operating profit, % 6.8 % 9.1 % 9.2 % Share of profits from associated company 6.2 3.9 26.7 Profit before taxes 13.0 14.8 75.0 Earnings per share (undiluted), EUR 0.13 0.16 0.71 Operational cash flow -17.4 5.7 76.4 The wholly-owned industrial operations of Fiskars Corporation continue to be concentrated in North America, where some 54% (56%) of the net sales for the first quarter was generated. A slow start in seasonal sales led to a decreased operating profit of EUR 9.5 million (13.3) from the corporation's industrial operations. Profits from the associated company Wärtsilä developed favorably and Fiskars' share was EUR 6.2 million (3.9). The earnings per share for the review period was EUR 0.13 (0.16). This interim report is the first report publised by Fiskars Corporation in accordance with International Financial Reporting Standards (IFRS) and IAS 34. As of January 1, 2005, Fiskars complies with the IAS 39 Financial Instruments standard. The effects of adopting this standard on the equity of the starting balance sheet have been presented in a separate statement of changes in consolidated equity. The effects of adoptation are minor as what comes to Fiskars' own operations. Previously reported figures and the IFRS-compliant figures for the first quarter are also reconciled in separate appendices. OPERATIONS FISKARS BRANDS, INC. Fiskars Brands net sales were at EUR 121.1 million (130.8), a decrease of some 7%. The operating profit was EUR 8.5 million or 7.0% of sales (12.3 and 9.4%). Most of the decrease in net sales was in the US, where sales was 12% lower compared to the corresponding quarter in 2004. In other markets sales matched last year's levels. Sales during the first quarter started generally more slowly than in the previous year and also later than usual as cold weather affected adversely sales of garden tools. Sales of outdoor recreation products didn't reach last year's levels. The development of operating profits was further influenced by increases in the cost of raw materials such as steel and resin. To ensure competitive prices for their products, Fiskars is using more subcontracting and streamlining production. For instance, the European manufacture of knives has been focused in Italy, while the production capacity for garden tools has been increased in Billnäs, Finland. Sales of the School, Office and Crafts products (FISKARS) were slightly less than for the first quarter last year. This product group now invests into its marketing and is developing the subcontracting of its production. At the beginning of 2005, its administration was centralized to the US headquarters of the company. In March, Fiskars Brands, Inc. bought the manufacture and marketing of GINGHER branded scissors. Overall, sales of the Garden and Outdoor Living products sold under the FISKARS brand were satisfactory but the slow start of the spring selling season especially affected flowerpots and floor mats included in this group and sold under other brand names. The results for the first quarter were weakened by the tough price competition in these products and the rapid rise in the cost of raw materials. The largest customer for the product group Outdoor Recreation (GERBER) changed their marketing strategy for campaign products, which led to a decrease in sales. Sales to different government purchase organizations in the United States, which increased rapidly last year, were lower this year. Sales of Consumer Electronics (POWER SENTRY and NEWPOINT) developed favorably. The company's products are mainly after-sales products to consumer electronics for domestic use, and the market is growing as home electronics become more varied and digital. New products have been successfully introduced in the marketplace and new distribution networks taken over. Fiskars net sales in Europe matched last year's levels. Sales of snow tools did not reach the levels anticipated for the Nordic countries, and cold weather delayed the start of the spring selling season in Central Europe. However, new products clearly increased net sales in the United Kingdom and France. Sales of flowerpots continued to fall in Germany. The markets for Housewares remained at last year's level, and new products have been launched to further develop the group. Apart from scissors, sales of School, Office and Craft products are limited in Europe. At the beginning of 2005 a push was begun to develop the European markets, using product and marketing concepts familiar from the US. INHA WORKS The Inha Works EUR 8.6 million (7.6) net sales showed a 12% increase over those for the first quarter last year. BUSTER boats had record-breaking volume of orders, and the increased production capacity is in full use. The midsize and large boat models are now painted both inside and out, and these new boats with their improved finish were well received on the market. The production line for painting the boats was inaugurated in February and is working as planned. The sales of forged products developed favorably. In the hinge market, price competition is getting tougher due to the availability of imports from low-cost countries. The operating profit of Inha Works was EUR 1.0 million (1.0). Inha Works is pushing to minimize the effects of increased raw material costs and other manufacturing costs by streamlining production and pressing up competition between suppliers. REAL ESTATE GROUP The net sales and profitability of the Real Estate operations reached the same levels as last year. Variations in price-level for standing timber affect the value of growing stock and thereby the results of the operations. Price-level for standing timber has risen slightly since the beginning of the year. WÄRTSILÄ Fiskars' share of this associated company's results for the first quarter was EUR 6.2 million (3.9). Fiskars share of Wärtsilä is 20.5% of shares and 28.1% of votes. At the end of March, the book value of the shares was EUR 238.3 million (187.6), with their market value being EUR 387 million. The dividend decided at the Wärtsilä Annual General Meeting held in March has been booked as short- term receivable and as dividend received from an associated company reducing the book value of the associated company. As at January 1, 2005 Wärtsilä complies with the IAS 39 Financial Instruments standard. The impact of IAS 39 on Wärtsilä's equity also bears on Fiskars' equity in proportion to the Fiskars' share in Wärtsilä. The effect on Fiskars' equity on the opening balance sheet as of January 1, 2005 was EUR 37.8 million and the effect on Fiskars' equity on March 31 was EUR 29.6 million. PERSONNEL At the end of the first quarter, the total number of corporate personnel was 3,559 (3,662). Since the beginning of the year, the number of employees has increased by 111. The increase in the period was evenly and geographically spread across the industrial operations, as production was increased in relation to seasonal demand. The number of employees in Finland increased from 915 at the end of 2004 to 947 at the end of March. CAPITAL EXPENDITURE The largest investment in the first months of 2005 was the acquisition of the Gingher scissors operations in the US. The purchase price was EUR 8.3 million. A further EUR 3.8 million was spent on other investments, mostly to maintain the company's production capacity. Total capital expenditure during the first quarter was EUR 12.3 million (4.7). RESULT AND TAXES Results for continuing operations during this year's first quarter were EUR 10.4 million (12.0). Taxes for the period have been calculated on the basis of accrued results and current tax rates. Taxes of EUR 2.7 million (2.8) have been calculated for the first quarter. The impact of the Syroco operations, divested in September 2004, was EUR 0.5 million on the results for last year's first quarter. BALANCE SHEET AND FINANCING The balance sheet total was EUR 763 million (735). Since the beginning of the 2005 financial year, the total has increased by EUR 80 million, around half of which due to seasonal fluctuations. During the first quarter, the company has prepared for the beginning of the sales season, and inventories have increased by EUR 15 million since the end of 2004. Also, as the season has begun, trade receivables have increased by EUR 23 million. Cash flow from operations was EUR -17.4 million (5.7) and EUR 11.6 million (6.2) was invested. The increased requirement of capital was financed through raising interest-bearing net debt, which increased by some EUR 38 million from the beginning of the financial period to a total of EUR 240 million (247). In accordance with international financial reporting standards, the EUR 45 million capital loan issued in December 2004 is included in long-term interest bearing debt. The dividend decided by the Annual General Meeting has been deducted from shareholders' equity and booked as a short-term non-interest bearing debt. The company's financial situation and liquidity were strong. The equity ratio was 46% at the end of the review period (49% at the turn of the financial year). Net gearing increased from 60% at year-end to 68%. The net financing costs were EUR 2.1 million (1.9). PURCHASE AND TRANSFER OF OWN SHARES The corporate Board of Directors is authorized to acquire the company's own shares. The Board did not exercise this authority during the first quarter. At March 31, 2005, the company held a total of 127,512 of its shares of series A and 420 shares of series K. ANNUAL GENERAL MEETING 2005 The Annual General Meeting of Fiskars Corporation held on March 23, 2005 decided on a dividend payment of EUR 0.30 per share for A-shares and EUR 0.28 per share for K- shares, in total EUR 22.8 million. The meeting determined that the number of Board members shall be seven. Mr. Göran J. Ehrnrooth, Mr. Mikael von Frenckell, Mr. Gustaf Gripenberg, Mr. Olli Riikkala, Mr. Paul Ehrnrooth, Ms. Ilona Ervasti-Vaintola and Mr. Alexander Ehrnrooth were elected members of the Board. Their term of membership will expire at the end of the Annual General Meeting in 2006. Convening after the Annual General Meeting, the Board elected Göran J. Ehrnrooth its chairman. KPMG Oy Ab was elected auditor. The Annual General Meeting decided to authorize the Board of Directors to acquire a maximum of 2,619,712 of the company's shares of series A and a maximum of 1,127,865 of series K within the period of one year from March 23, 2005. Within the same period, the Board was authorized to sell a maximum of 2,747,224 of the company's shares of series A and a maximum of 1,128,285 shares of series K. SHARE PRICES The price of Fiskars series A on the Helsinki Exchange at the end of March was EUR 9.25 per share (EUR 7.90 at the beginning of the year) and series K EUR 9.28 per share (7.90). The market capitalization of the company's shares at the end of March was EUR 718 million. OUTLOOK The wholly-owned industrial businesses of Fiskars Corporation are seasonal in nature and this year's spring season has not reached the level of the corresponding season last year. This means the year-end profits of the industrial operations are expected to remain somewhat below the results for last year. The results of the whole corporation are also strongly influenced by the profits of its associated company Wärtsilä and the results of the Real Estate Operations. Heikki Allonen President and CEO Appendix: 1. Figures for Interim Report 2. Accounting principles according to IFRS APPENDIX 1 CONSOLIDATED 1-3 1-3 chg 1-12 INCOME STATEMENT 2005 2004 % 2004 MEUR MEUR MEUR NET SALES 131.8 140.6 -6 566.3 Cost of goods sold -92.0 -96.2 -4 -388.8 GROSS PROFIT 39.8 44.4 -10 177.5 Other income 0.1 0.3 -74 3.6 Sales and marketing expenses -16.7 -16.1 4 -63.5 Administration expenses -12.8 -14.4 -11 -58.0 Other expenses -1.4 -1.4 2 -7.5 OPERATING PROFIT 8.9 12.8 -31 52.1 Share of assoc.comp.result 6.2 3.9 60 26.7 Financial income and expenses -2.1 -1.9 10 -3.8 PROFIT BEFORE TAXES 13.0 14.8 -12 75.0 Taxes -2.7 -2.8 -4 -15.2 PROFIT FROM CONTINUING OPERATIONS 10.4 12.0 -14 59.8 Profit from discontinued operations 0.5 -5.3 PROFIT FOR THE PERIOD 10.4 12.5 -17 54.6 Earnings per share, euro 0.13 0.16 0.71 continuing operations 0.13 0.16 0.77 discontinued operations 0.01 -0.07 Earnings per share is undiluted. The company has no open otion programs. CURRENCY RATES 1-3 1-3 chg 1-12 2005 2004 % 2004 USD average rate (I/S) 1.31 1.25 5 1.24 USD end-of-period (B/S) 1.30 1.22 6 1.36 CONSOLIDATED BALANCE SHEET 3/05 3/04 chg 12/04 MEUR MEUR % MEUR ASSETS Tangible assets 137.2 145.1 -5 133.1 Intangible assets 41.8 38.8 8 34.7 Biological assets 31.0 28.9 7 30.4 Shares in assoc.companies 238.3 187.6 27 219.1 Other investments 5.6 24.5 -77 4.4 Deferred tax assets 46.7 44.6 5 47.3 LONG-TERM TOTAL 500.6 469.4 7 469.0 Inventories 124.3 113.3 10 109.7 Financial assets 138.2 119.1 16 104.8 CURRENT TOTAL 262.4 232.4 13 214.5 Assets of a disposal group held for sale 33.5 ASSETS TOTAL 763.0 735.2 4 683.5 EQUITY AND LIABILITIES Equity 354.8 350.3 1 335.7 L/t interest bear.debt 157.8 144.6 9 146.5 Deferred tax liabilities 20.6 17.8 16 20.2 Other l/t non-int.bear.debt 19.3 19.9 -3 20.0 LONG-TERM TOTAL 197.8 182.3 9 186.7 S/t interest bear.debt 88.6 97.3 -9 71.1 S/t non-interest bear.debt 121.8 100.8 21 90.0 CURRENT TOTAL 210.4 198.1 6 161.1 Liabilities of a disposal group held for sale 4.6 EQUITY AND LIABILITIES TOTAL 763.0 735.2 4 683.5 KEYFIGURES 3/05 3/04 chg 12/04 % Equity/share, euro 4.59 4.53 1 4.34 Equity ratio 46% 48% 49% Net gearing 68% 70% 60% Equity, meur 354.8 350.3 1 335.7 Net interest-bear.debt, meur 240.0 246.6 -3 202.0 Average number of employees 3539 3652 -3 3567 STATEMENT OF CHANGES IN Share Other CONSOLIDATED EQUITY Sharepremium Own reser-Transl.Retain. capitalaccount shares vesadjustm earn. Total MEUR MEUR MEUR MEUR MEUR MEUR MEUR Jan.01,2004 55.4 21.3 -0.6 0.0 0.0 278.6 354.6 Translation differences 0.8 0.8 Dividends -16.8 -16.8 Own shares, change -0.3 -0.3 Other changes -0.6 -0.6 Net profit for the period 12.5 12.5 Mar.31,2004 55.4 21.3 -0.9 0.0 0.3 274.3 350.3 Dec.31,2004 77.5 0.0 -0.9 0.0 -10.4 269.5 335.7 Adoption of IAS 39 Fiskars corporation -0.3 0.4 0.1 Associated company Wärtsilä 37.8 37.8 Jan.01,2005 77.5 0.0 -0.9 37.5 -10.4 270.0 373.7 Translation differences 1.1 1.1 Dividends, booked as liability -22.8 -22.8 Change in fair value reserve 0.1 0.1 Other changes in assoc. company -7.7 -7.7 Net profit for the period 10.4 10.4 Mar.31,2005 77.5 0.0 -0.9 37.6 -9.3 249.9 354.8 CONSOLIDATED STATEMENT 1-3 1-3 1-12 OF CASH FLOWS 2005 2004 2004 MEUR MEUR MEUR From oper. activities -17.4 5.7 76.4 From investm. activities -11.6 -6.2 0.1 From financing 19.9 -1.2 -78.0 Currency transaction adjustm. -0.1 0.5 0.2 CHANGE IN CASH -9.2 -1.3 -1.3 Cash at beginning of period 15.6 16.8 16.8 CASH AT END OF PERIOD 6.4 15.5 15.5 SEGMENTINFORMATION 1-3 1-3 chg 1-12 NET SALES 2005 2004 % 2004 MEUR MEUR MEUR Fiskars Brands 121.1 130.8 -7 528.0 Inha Works 8.6 7.6 12 29.2 Real Estate 2.8 2.7 4 11.7 Eliminations -0.7 -0.5 40 -2.6 CORPORATE TOTAL 131.8 140.6 -6 566.3 Export from Finland 18.9 17.8 6 56.2 SEGMENTINFORMATION 1-3 1-3 1-12 RESULT 2005 2004 2004 MEUR MEUR MEUR Fiskars Brands 8.5 12.3 48.5 Inha Works 1.0 1.0 3.6 Real Estate 0.7 0.7 5.2 Eliminations and other oper. -1.2 -1.1 -5.2 OPERATING PROFIT 8.9 12.8 52.1 Share of net profit in Wärtsilä 6.2 3.9 26.7 Financial cost net -2.1 -1.9 -3.8 RESULT AFTER FINANCIAL ITEMS 13.0 14.8 75.0 SEGMENTINFORMATION 1-3 1-3 chg 1-12 DEPRECIATION AND AMORTIZATION 2005 2004 % 2004 ACCORDING TO PLAN MEUR MEUR MEUR Fiskars Brands 5.1 5.4 -5 22.7 Inha Works 0.2 0.2 9 0.8 Real Estate 0.3 0.3 9 1.3 Eliminations and other oper. 0.1 0.1 1 0.4 CORPORATE TOTAL 5.7 5.9 -4 25.1 SEGMENTINFORMATION 1-3 1-3 chg 1-12 INVESTMENTS 2005 2004 % 2004 MEUR MEUR MEUR Fiskars Brands 10.4 3.3 210 15.8 Inha Works 0.7 0.4 90 1.3 Real Estate 0.8 0.6 41 1.9 Assoc.comp.Wärtsilä 22.2 Other 0.3 0.4 -10 0.6 CORPORATE TOTAL 12.3 4.7 162 41.8 Short delivery times are a prerequisite in Fiskars' fields of operations. Therefore, the backlog of orders and changes in it are not of significant importance. CONTINGENCIES 3/05 3/04 12/04 MEUR MEUR MEUR FOR THE COMPANY'S OWN COMMITMENTS Real estate mortgages 0 0 0 Pledged assets 1 0 1 Bills of exchange 0 1 0 Lease contingencies 29 41 33 Other contingencies 0 6 4 TOTAL CONTINGENCIES 30 48 38 NOMINAL VALUES OF DERIVATIVE INSTRUMENTS Forward exch. contracts 138 81 114 Interest rate swaps 23 87 22 FRA's 31 36 29 Nominal values also include closed contracts. RECONCILIATION OF NET PROFIT 1-3 1-12 2004 2004 MEUR MEUR NET PROFIT ACCORDING TO FAS 11.1 44.9 Change in biological assets 0.1 2.0 Revenue recognition -0.2 -0.2 Inventory valuation -0.3 -0.1 Employee benefits -0.1 3.1 Development costs 0.0 0.1 Goodwill amortization and 1.0 2.5 impairment 0.1 -0.5 Finance leases 0.0 0.0 Deferred tax effect 0.1 -2.8 Assoc. comp. Wärtsilä 0.6 5.8 Other adjustments 0.0 -0.2 NET PROFIT ACCORDING TO IFRS 12.5 54.6 RECONCILIATION OF EQUITY 1.1. 31.3. 31.12. 2004 2004 2004 MEUR MEUR MEUR EQUITY ACCORDING TO FAS 348.3 343.8 318.8 Biological assets 28.7 28.9 30.4 Cancellation of revaluations -9.8 -9.8 -9.8 Re-valuation of real estate 1.1 1.0 0.9 Revenue recognition -0.8 -0.9 -0.8 Inventory valuation -2.6 -3.4 -2.4 Employee benefits -9.7 -10.0 -6.6 Development costs 2.5 2.5 2.5 Goodwill amortization and impairment 0.0 1.0 3.5 Financial leasing 0.0 -0.1 -0.4 Deferred tax -2.9 -3.9 -6.0 Assoc. company Wärtsilä 0.0 1.2 5.3 Other adjustments 0.0 0.1 0.3 TOTAL IFRS RESTATEMENT 6.3 6.5 16.9 EQUITY ACCORDING TO IFRS 354.6 350.3 335.7 APPENDIX 2 Accounting principles Description of business Fiskars Oyj Abp is a Finnish public limited liability company listed in Finland with domicile in Pohja. Fiskars Group comprises several diverse business areas the largest one being Fiskars Brands that manufactures and markets branded consumer products globally. Other businesses include manufacturing and marketing of aluminum boats, real estate operations and a strategic shareholding in Wärtsilä Oyj Abp qualifying as an investment in an associate. Statement of compliance The consolidated financial statements of Fiskars Group ("Fiskars" or "the Group") are prepared in accordance with International Financial Reporting Standards (IFRS) and its Interpretations. The Group adopted the Standards as from 1 January 2005. Previously the consolidated financial statements were prepared in accordance with Finnish generally accepted accounting principles (Finnish GAAP). The Group has applied IFRS 1 First-time Adoption of International Financial Reporting Standards in the transition to IFRSs. The comparative information for the year ended 31 December 2004 and the opening IFRS balance sheet at 1 January 2004 have been adjusted as required under IFRSs. An explanation of the effects of the adjustments is set out in the Notes to the consolidated financial statements. Basis of presentation The financial statements are prepared in euro. They are prepared on the historical cost basis, except as disclosed in the accounting policies below. The (consolidated) financial statements are presented in millions of euros with one decimal. Use of Estimates The preparation of financial statements in conformity with IFRSs, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period. Such estimates and assumptions are based on historical experience and other justified assumptions that are believed to be reasonable under the circumstances at the balance sheet date. These estimates form the basis for judgments of the items in financial statements. Actual results could differ from those estimates. Such estimates mainly affect provisions for inventory obsolescence, restructuring plans, valuation of assets, the measurement of pension obligations and the probability of deferred tax assets being recovered against future taxable profits. Principles of consolidation The consolidated financial statements include the parent company, Fiskars Oyj Abp, and all companies in which it holds directly or indirectly over 50 % of voting rights or over which it has control. Acquired or established subsidiaries are included in the consolidated financial statements from their acquisition or establishment date up to the date that control ceases. Investments in associates (voting rights 20 %- 50 % and for which Fiskars has significant influence, but no control) are accounted for by the equity method. In accordance with the exemption under IFRS 1 the investment in Wärtsilä is measured at the carrying amount on the date of transition to IFRSs. All inter-company transactions, distribution of profits, receivables, liabilities and unrealised margins are eliminated in the consolidation. Acquisitions of subsidiaries are accounted under the purchase method of accounting. Identifiable assets and liabilities are measured at their fair values at the acquisition date, the excess of the cost of acquisition over the fair value of the net assets acquired is recorded as goodwill. In accordance with the exemption under IFRS 1, acquisitions prior to the IFRS transition date have not been restated but the goodwill is recognised in the balance sheet at carrying amount consistent with previous GAAP since the estimated recoverable amounts did not indicate any impairment losses as of December, 31.2003. Under IFRSs, goodwill shall not be amortized but its recoverable amount and the possible need for impairment are tested annually. Foreign operations / subsidiaries In the consolidated accounts all items in the income statement accounts of foreign operations / Group companies are translated into euro at the average foreign exchange rates for the period and the balance sheet items at foreign exchange rates ruling at the balance sheet date. Foreign exchange differences arising on retranslation are recognised in consolidated equity. All translation differences arising after the date of transition to IFRSs are presented as a separate component of equity. Pre- transition translation differences have been debited to the retained earnings as allowed by the exemption under IFRS 1. Exchange rate differences resulting from the translation of income statement items at the average rate and the balance sheet items at the closing rate are recognised as a separate item in equity. Transactions in foreign currencies Foreign currency transactions are translated into euros using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities are translated using the exchange rate prevailing at the balance sheet date. Foreign exchange differences arising from translation are recognised in the income statement. Foreign exchange gains and losses associated with financing are included under financial income and expenses. Derivatives Derivative financial instruments are recognised initially at cost. Subsequent to initial recognition, derivative financial instruments are stated at fair value at the balance sheet date. The Group does not apply hedge accounting under IAS 39, therefore changes in fair value are recognised immediately in the income statement. Fair values of interest rate swaps, the futures and forwards are measured by using discounted cash flow analyses. Fair values of currency forwards are based on quoted market prices at the balance sheet date. Net sales and revenue recognition principles Net sales is de?ned as invoiced sales amount less indirect taxes, rebates and exchange rate adjustments on sales denominated in foreign currency. Revenue from the sale of goods is recognised in the income statement when the significant risks and rewards incidental to the ownership have been transferred to the buyer, i.e. when a product has been delivered to the client in accordance with the terms of delivery. There are no such long-term deliveries in the Group for which the revenue would be recognised using the percentage-of-completion (POC) method. The change in value of biological assets resulting from the net increase of standing timber and the change in the fair value are recognised in turnover. The cash flows from the sales of standing timber reduce the carrying value of biological assets and the net increase of standing timber. Research and Development Research and development costs are expensed as they are incurred, except for significant development projects for which the Group can reliably demonstrate that they will generate probable future economic benefits meeting the criteria in IAS 38. Capitalised development costs are recognized as intangible assets. Pensions The Group companies have various pension plans in accordance with local conditions and practises in the countries in which they operate. The plans are classified as either a defined contribution plan or a defined benefit plan. Most of these schemes are defined contribution plans and contributions are charged to the income statement in the period to which the contributions relate. In some countries where the Group operates pension schemes are classified as defined benefit plans. The costs of these plans are calculated and recognised under the terms of the plan based on actuarial calculations. The pension obligation is measured as the present value of the estimated future cash outflows deducted by the fair value of plan assets at the balance sheet date. All cumulative actuarial gains and losses are recognized at the date of transition to IFRSs in accordance with the exemption permitted in IFRS 1. All actuarial gains and losses (after the transition date) are recognised in profit or loss. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if applicable. Revaluations included to the land areas in accordance with Finnish GAAP, amounting to e 9,8 million, have been reversed in the transition to IFRSs. The land areas have been re-measured applying the exemption allowed under IFRS 1, i.e. the value of forest areas only comprises the soil and some of revaluations previously made to fair value has been allocated to zoned sites. These values represent the deemed cost for the land areas under IFRS 1. Property, plant and equipment of acquired subsidiaries are measured at their fair values at the time of acquisition. Depreciation is recorded on a straight-line basis over the expected useful lives of the assets as follows: Buildings 20-40 years Property, plant and equipment 3 -10 years Land areas are not depreciated. Leases In accordance with the criteria for finance leases in IAS 17, lease contracts in terms of which the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are recognized in the balance sheet as assets at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The associated obligations are included in interest bearing liabilities. Lease payments under an operating lease are recognized as an expense as incurred. Investment Property The properties that are not owner-occupied are classified as investment property. Part of the revaluation that was allocated to land according to the prior GAAP is assigned to assets classified as investment property. Land has been revaluated when applying the exemption of IFRS 1 and to the zoned sites have been allocated some previously made revaluations based on the fair values. These values will be taken as deemed cost for land complying with IFRS. The properties are carried at their cost less accumulated depreciations and accumulated impairment losses. Investment property is depreciated within 20-40 years. The fair value of investment property is disclosed in the notes. The real estate in Fiskars Village is deemed to be unique and therefore the fair value cannot be determined reliably. Goodwill and other intangible assets The excess of the acquisition cost over fair value of the net assets acquired is allocated to goodwill. Goodwill has been allocated to cash-generating units and the unit´s recoverable amount is compared annually with its carrying amount to determine potential impairment loss. Goodwill related to the associated companies is included in the carrying amount of the investment in the associate. Other intangible assets are: patents, capitalized development costs, software and other intangible assets acquired in a business combination. Intangible assets are amortised on a straight-line basis over the period of their known or expected useful lives as follows: Development costs 3-6 years Software 3-6 years Other 3-10 years Intangible assets with an indefinite useful life are not amortised but they are tested systematically for impairment in annual bases. Securities and other investments The publicly traded shares of Fiskars Oyj Abp are classified as financial assets and recognized at fair value through profit or loss. Changes in fair value are reported in the profit or loss account as financial income or expenses and will be applied when calculating changes in deferred tax liabilities. Unlisted shares are carried at lower of cost or net realisable value because their fair values cannot be measured reliable. Biological assets Biological assets consist of wood resources in Finland. These assets are recognised at fair value less estimated selling costs. Measurement is based on the price for standing timber at the balance sheet date, on wood species-specific quantitative and qualitative information included in the forestry plans as well as on realised point-of-sale costs. The change in fair value of standing timber resulting from growth, felling and fluctuation of prices and expenses is included in operating profit. Inventories Inventories are stated at the lower of cost or net realisable value. The cost of inventories comprise direct costs of purchase, costs of conversion and related production overheads. The cost is determined by FIFO-method. Trade and other receivables Trade and other receivables are carried at the original invoice amount. The estimates made for doubtful receivables is based on the risks of single items and they are recorded at highest to their propable value. Non-current assets held for sale and discontinued operations The assets and liabilities of major operations sold, classified as held for sale or classified to be discontinued are presented separately in the balance sheet. The operating profit of such operations as well as the net result arising from their sale or discontinuation, are presented in the income statement separately from the profit for the period from continuing operations. Non- current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell. Impairment The Group operations have been divided into cash-generating units (CGU) that are smaller than segments. The carrying amounts of the assets relating to these CGUs are regularly reviewed. To determine a potential impairment the capital employed by a CGU is compared against the discounted future cash flows expected to be derived from that CGU or against the net disposal price. An impairment loss is recognised for an asset when its carrying amount exceeds its recoverable amount. An impairment loss previously recognised for items of property, plant and equipment as well as for intangible assets other than goodwill is reversed, if there has been a change in the estimates used to determine the asset's recoverable amount. An impairment loss is reversed only to the amount not exceeding the carrying amount that would have been determined, net of amortisation or depreciation, had no impairment loss been recognised for the asset in prior years. An impairment loss recognized for goodwill is not reversed. Provisions A provision is recognized in the balance sheet if the entity has committed to the probable future obligations, the counterparty is aware of the commitment and the reliable estimate can be made of the amount of the obligation. For example restructuring costs may fall under the provisions. A provision for restructuring is recognised when the detailed formal plan has been established and when there is a valid expectation that the plan will be carried out. Income Taxes The Group income taxes include Group companies current taxes based on taxable profit for the financial period according to local tax regulations, adjustments to prior year taxes and deferred taxes. Deferred tax liability or asset are determined on temporary differences arising between the tax bases and their carrying amounts using tax rates enacted at the balance sheet date. Deferred tax liabilities are provided for in full and deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the unused tax losses can be utilised. Dividends Dividends proposed by the Board of Directors are not recorded in the financial statements until they have been approved by the shareholders at the Annual General Meeting. Cash and cash equivalents Bank and cash in the balance sheet consist of cash at bank and in hand. Cash equivalents comprise liquid available-for-sale investments with maturity of three months or less. Bank overdrafts are included in short-term borrowings under current liabilities. Borrowing costs Borrowing costs are expensed in the period in which they are incurred.
Press and stock exchange releases from Fiskars Corporation, dating from 1997 have been gathered onto this page. Additional financial data related to interim reports and the annual reports stock exchange releases can be retrieved from 2000 onwards.