Fiskars Corp. Financial Statement Release, February 13, 2009, at 08.30 a.m. FISKARS FULL-YEAR NET SALES UP, EBIT DOWN, AND CASH FLOW UP Highlights of the 2008 fiscal year: - Net sales increased by 8% to EUR 697.0 million (647.0) - Operating profit (EBIT) was EUR 70.9 million (106.9), including non-recurring costs of EUR 34.9 million - EBIT excluding non-recurring items, Wärtsilä, and the change in the fair value of standing timber was EUR 41.0 million (51.1) - Financial position continues to be strong: equity ratio 46% (46%), cash flow from operating activities EUR 97.0 million (82.0) - Earnings per share were EUR 0.64 (1.40) - The Board proposes a dividend of EUR 0.50 per Series A share and EUR 0.48 per Series K share Highlights of the fourth quarter of 2008: - Net sales decreased by 9% to EUR 174.9 million (192.2) - Operating profit (EBIT) was EUR -2.0 million (30.0), including non-recurring costs of EUR 31.8 million - EBIT excluding non-recurring items, Wärtsilä, and the change in the fair value of standing timber was EUR 8.3 million (13.7) The full-year figures stated in this bulletin are audited. KEY FIGURES EUR, million Q4/2008 Q4/2007 1-12/2008 1-12/2007 Net sales 174.9 192.2 697.0 647.0 EBIT excl. non-recurring items, Wärtsilä & standing timber 8.3 13.7 41.0 51.1 Share of profit from associated company Wärtsilä 24.6 16.7 70.5 43.3 Operating profit (EBIT) -2.0 30.0 70.9 106.9 Profit before taxes -8.2 33.3* 51.5 119.8** Profit for the period -6.5 31.7* 49.2 108.4** Earnings per share, EUR -0.08 0.41 0.64 1.40 cash flow from operating activities 17.2 29.8 97.0 82.0 * Includes a gain of EUR 6.9 million on the sale of Wärtsilä shares ** Includes a gain of EUR 23.7 million on the sale of Wärtsilä shares THE FOURTH QUARTER OF 2008 Financials Fiskars Corporation's net sales decreased by 9% to EUR 174.9 million (192.2) in the fourth quarter. The decrease totaled 9% at comparable currency rates as well. Cash flow from operating activities was EUR 17.2 million (29.8). Net sales in EMEA (Europe, Middle East, and Asia-Pacific) were 12% lower during the quarter at EUR 118.7 million (134.6). Homeware sales decreased due to lower consumer demand and reduced purchases by retailers. The Garden business area was impacted by slow sales of snow and construction tools. Sales of Outdoor products also fell, despite strong performance in Sweden. Net sales in the Americas increased 4% to EUR 54.5 million (52.4). In USD terms, however, sales decreased 5% to USD 71.8 million (75.7). Net sales in the Garden area were up due to stronger demand than in 2007. The depressed economic situation had a significant impact on sales of school, office, and craft (SOC) products. Outdoor Recreation net sales increased, both in the consumer and military sales areas. Net sales of Inha Works were down 39% to EUR 5.3 million (8.7). Net sales of Real Estate were EUR 1.6 million (1.7). The Corporation's operating profit (EBIT) was EUR -2.0 million (30.0), and includes non-recurring items of EUR -31.8 million (0.0) related to write-downs and provisions for restructuring costs. Share of profit from associated company Wärtsilä was EUR 24.6 million (16.7), and the change in the fair value of standing timber (i.e. biological assets) was EUR -3.1 million (-0.4). EBIT excluding non- recurring items, share of profits from Wärtsilä, and the change in the fair value of standing timber was EUR 8.3 million (13.7). In EMEA, the operating profit before non-recurring items was EUR 12.4 million (14.7), and EUR 1.3 million (3.4) in the Americas. The decrease in profits was mainly due to lower sales volumes in both segments. Operating profit before non-recurring items was EUR -3.4 million (-0.1) for Inha Works. Real Estate recorded an operating profit of EUR -2.9 (-0.1), due to a change in the fair value of standing timber. The total capital expenditure was EUR 6.5 million (16.0), and mainly consisted of new store openings and investments in logistics facilities in Homeware business area. Capital expenditure during the fourth quarter of 2007 included investments in Wärtsilä shares. Profit before taxes was EUR -8.2 million (33.3). This year the figure includes non-recurring items of EUR -31.8 million, and the comparison period includes a gain on the sale of Wärtsilä shares of EUR 6.9 million. Net financial costs were EUR 6.2 million (3.6). The profit for the fourth quarter of 2008 was EUR -6.5 million (31.7), and earnings per share were EUR -0.08 (0.41). Operating highlights Fiskars continued reorganizing and strengthening its operations during the fourth quarter of the year. The Garden and Craft businesses in the Americas were combined into one new business area, Garden & SOC (School, Office, and Craft). In EMEA, Garden business area management was moved from Belgium to Finland. Regional administration functions in both the Americas and EMEA were eliminated. The principles used for inventory valuation across the Group were also harmonized to meet the needs of a consumer-driven business model. The accounting estimate used for valuing biological assets (standing timber) was changed as from the beginning of December. The new estimate uses a three-year rolling average price of standing timber. Personnel redundancies and temporary lay-offs took place in several units across the organization. In December Fiskars Corporation's subsidiary Inha Works announced the reduction of 46 people in its business, and the Iittala Group announced it would start codetermination negotiations on redundancies and lay-offs in Finland. REPORT BY THE BOARD OF DIRECTORS 2008 2008 IN BRIEF Fiskars Corporation's net sales increased by 8% to EUR 697.0 million (647.0), driven by the acquisitions of Iittala Group and Leborgne in 2007. Cash flow from operations continued at a strong level, EUR 97.0 million (82.0). The operating profit (EBIT) was EUR 70.9 million (106.9) or 10% of net sales (17%). Non-recurring items totaling EUR -34.9 million (+1.4) were booked in 2008, of which EUR 31.8 million (0) were due to business reorganization. EBIT excluding non-recurring items, share of profit from associated company Wärtsilä, and changes in the fair value of standing timber totaled EUR 41.0 million (51.1) or 6% of net sales (8%). Earnings per share for the year were EUR 0.64 (1.40). REORGANIZATION OF THE BUSINESS Fiskars is shifting its focus from manufacturing to a consumer- and brand-driven business. As part of the transformation, several organizational changes were carried out during 2008. Mr. Kari Kauniskangas, M.Sc. (Econ.) started as President and CEO of the company at the beginning of the year. There were changes in the corporate management team, as new Chief Financial Officer, Vice President for Operations, and Chief Strategy Officer were appointed during the year. The new corporate management is taking an active part in the strategic management of all businesses. A new organizational structure and new operating segments were introduced in March 2008. As from the first interim report of 2008, Fiskars has reported its performance using the following operating segments: Americas, EMEA (Europe, Middle East, and Asia- Pacific), Wärtsilä (associated company), and Other, which consists of Inha Works and the Real Estate Group. The corporation's business areas were during 2008: Garden, Homeware, Outdoor Recreation, Craft, Real Estate, and Inha Works. Regional administrative functions were eliminated in November 2008 and the role of business area management was further strengthened. The Garden and Craft businesses in the Americas were combined into one new business area, Garden & SOC (School, Office, and Craft). In EMEA, Garden business area management was relocated from Belgium to Finland. All business area presidents report to Fiskars President and CEO. Following these changes in the organization, Fiskars' business areas as from the beginning of 2009 are Home, Garden, Outdoor, and Other. Sales of scissors and other school, office, and craft products will be reported in the business area Home, together with all homeware products. The Inha Works business area, which mainly consists of boat production, will be included in the Outdoor business area. Real Estate will be moved to the business area Other. GROUP FINANCIALS Fiskars' consolidated net sales in 2008 totaled EUR 697.0 million (647.0), an increase of 8% compared to 2007. The comparison period includes Iittala Group's reported figures from September 1, 2007 and Leborgne's from May 1, 2007 onwards. Pro forma net sales in 2007 totaled EUR 767.6 million. Compared with this, net sales in 2008 were down 6% at comparable currency rates. The Corporation's EBIT was EUR 70.9 million (106.9), and includes non-recurring items of EUR -34.9 million (+1.4), which were mainly due to restructuring costs booked in the last quarter of 2008. Fiskars' share of profit from associated company Wärtsilä was EUR 70.5 million (43.3). The change in the fair value of standing timber (i.e. biological assets) was EUR -5.6 million (11.1). EBIT excluding non-recurring items, Wärtsilä, and the change in the fair value of standing timber was EUR 41.0 million (51.1). Product development costs of the Corporation totaled EUR 8.4 million (7.4) or 1% of net sales (1%). The increase was mainly due to the acquisition of Iittala Group. Net financing costs were EUR 19.4 million (10.7). Interest costs increased due to the acquisitions made in 2007 that were financed by debt. Profit before taxes was EUR 51.5 million (119.8). In 2008, the figure includes non-recurring items of EUR -34.9 million, whereas the comparison period includes gains on the sale of Wärtsilä shares of EUR 23.7 million. Taxes for the fiscal year were EUR 2.3 million (11.4). The profit for the year was EUR 49.2 million (108.4), and earnings per share EUR 0.64 (1.40). EMEA Net sales in EMEA increased by 24% to EUR 454.7 million (365.9) in 2008. Compared with pro forma net sales in 2007, net sales decreased by 6%. Operating profit before non-recurring items was EUR 33.3 million (36.4). The operating environment changed significantly during the year. Consumer confidence and retailer purchasing in particular weakened towards the end of the year. The market was especially tough during the fourth quarter, which is of significant importance to the Homeware business. The decline of the British pound and the Swedish krona against the Euro also affected net sales. Lower sales volumes impacted operating profits. As part of the integration of the operations of Fiskars and the Iittala Group, sales companies in Norway and Denmark were merged, which brought synergy-related savings. To enhance profitability and streamline operations, the ceramics factory at Höganäs in Sweden was closed during 2008. Despite the challenging market, direct consumer sales in the Homeware business area developed satisfactorily. A total of seven new Iittala stores and three Iittala outlets were opened during the year, and year-on-year growth continued. The garden business developed favorably in Eastern Europe and Russia during the year, whereas performance in Western European markets did not reach sales levels of 2007. Unfavorable weather conditions, which reduced sales of both garden tools in the spring and snow tools in the last quarter of the year, were the main reason for this. Net sales of the Outdoor Recreation business area were lower from 2007, but the new category of wellness products succeeded well in the market. Capital expenditure during the year totaled EUR 21.8 million (181.5) and consisted mainly of new store openings and investments in production and logistics facilities. The comparison period includes the acquisitions of the Iittala Group and Leborgne. As of the end of the year, there were 3,042 people (3,228) employed in EMEA. AMERICAS Net sales for the Americas decreased by 14% to EUR 219.6 million (255.3) in 2008. In USD terms, net sales fell by 7% to USD 323.6 million (348.6). EBIT before non-recurring items was EUR 16.3 million (22.0). The downturn in the US economy affected consumer confidence and retailer sales to an even greater extent than in Europe. The decline in sales seen in the Americas was a result of reduced purchases by retailers, combined with consumers favoring lower- priced products. In addition to lower sales volumes, profits were affected by increased raw material prices and higher oil costs during the first half of the year. A weaker US dollar, particularly against the Chinese RMB, also impacted the cost of goods sold. Garden sales in the Americas increased, and particularly strong growth figures were seen in Canada. Economic turbulence had a significant impact on the school, office and craft (SOC) business, and their sales dropped. Outdoor Recreation sales were slightly down on year 2007. Capital expenditure in the Americas was EUR 3.0 million (3.2) in 2008 and was mainly related to investments in production facilities. As of the end of the year, 799 people (939) were employed in the Americas. INHA WORKS Fiskars' wholly-owned subsidiary Inha Works mainly produces Buster aluminum boats. Net sales decreased by 16% to EUR 35.2 million (42.1) in 2008. Operating profit (EBIT) before non-recurring items was EUR -3.3 million (3.3). General economic developments had a significant effect on the boat market in 2008. New boat registrations dropped in Inha Works' major markets, although Buster boats increased their market share. To improve the profitability of the business and meet the challenge of reduced market demand, the company started restructuring measures. These led to temporary lay-offs and reductions in personnel. Inha Works also terminated its hinge business during the last quarter of 2008. Capital expenditure totaled EUR 1.9 million (3.6) and was primarily focused on replacement investments in machinery. As of the end of the year, Inha Works employed 227 (306) people. REAL ESTATE The Real Estate Group manages the Corporation's forests, land and other real estate, and leases real estate to internal and external customers. Net sales for the Real Estate Group were EUR 5.9 million (5.6) in 2008. The operating profit (EBIT) was EUR -4.4 million (11.3). The change in the fair value of standing timber totaled EUR -5.6 million (11.1) during the year. The accounting estimate used for valuing biological assets (standing timber) was changed in 2008, and now uses a three-year rolling average price, reflecting the stable nature of the asset. Capital expenditure totaled EUR 1.8 million (1.8). The number of personnel as of the end of the year was 24 (24). ASSOCIATED COMPANY WÄRTSILÄ Wärtsilä Corporation, a leading provider of marine and power solutions, is an integral part of Fiskars as its associated company. Fiskars' share of profit from Wärtsilä was EUR 70.5 million (43.3) in 2008. As a result of a bonus share issue in March 2008, Fiskars' share of Wärtsilä equity increased by EUR 5.8 million and this is included in the share of profits. Fiskars received a total of EUR 67.2 million (27.7) in dividends from Wärtsilä during 2008. As of the end of the year, Fiskars' ownership in Wärtsilä was 17.1% of shares (16.5%) and 17.1% of votes (32.2%). The shares are owned by Fiskars' wholly owned subsidiary Avlis AB. The Annual General Meeting of Wärtsilä decided on 19 March 2008 to combine the two share series A and B. Although the voting rights of Fiskars in Wärtsilä decreased from 32.2% to below 20%, Fiskars continues to be the largest single shareholder, with more than 17% of votes. The Chairman of the Board of Fiskars, Mr. Kaj-Gustaf Bergh, and the President and CEO of Fiskars, Mr. Kari Kauniskangas, were elected to Wärtsilä's Board of Directors. Fiskars has assessed that it has a significant influence on Wärtsilä as defined in IAS 28 and accordingly continues to report Wärtsilä as an associated company. The book value of Fiskars' investment in Wärtsilä was EUR 263.5 million at the end of the year (278.3), and EUR 61.2 million (61.2) of this book value is goodwill. The market value of Wärtsilä shares owned by Fiskars was EUR 353.9 million (EUR 833.2) as of the end of the year with a share price of EUR 21.01. BALANCE SHEET, CASH FLOW, AND FINANCING Cash flow from operations during the year was EUR 97.0 million (82.0), and includes dividends paid by associated company Wärtsilä, which totaled EUR 67.2 million (27.7). Cash flow from investing activities was EUR -25.8 million (-183.4) and cash flow after investing activities was EUR 71.2 million (-101.4). Fiskars' net working capital was EUR 149.4 million at the end of 2008 (EUR 162.1 million). Non-current assets totaled EUR 680.6 million (713.1), of which EUR 131.0 million was intangible assets and EUR 99.2 million was goodwill. The Corporation's financial position continues to be strong. Shareholder's equity totaled EUR 446.7 million (478.3) at the end of the period. The Corporation's equity to assets ratio was 46% (46%) and net gearing 69% (67%). Cash and deposits at the end of the year were EUR 11.3 million (34.5). Net interest-bearing debt amounted to EUR 309.9 million, which was down EUR 9.1 million from year-end 2007. Short-term borrowings totaled EUR 183.7 million (228.9) and long-term borrowings EUR 137.5 million (124.6). Short-term borrowings are mainly commercial papers issued by the Corporation. In addition, the Corporation had EUR 405.0 million (425.0) in unused, binding long-term credit facilities, mainly with major Nordic banks. The financial market crisis has not significantly affected the Corporation's financing. CAPITAL EXPENDITURE Total capital expenditure during the year was EUR 29.8 million (220.6), and mainly comprised replacement investments and new store openings in the Homeware business area. Capital expenditure also includes EUR 3.1 million paid in the second quarter of 2008 for the minority shares representing 2.3% of the share capital of the Iittala Group Oy Ab. The capital expenditure in 2007 included the acquisitions of Iittala and Leborgne as well as investment in Wärtsilä Series A shares. PERSONNEL The company employed 4,119 people (4,515) as of the end of the year: 3,042 (3,228) people in EMEA, 799 (939) in the Americas, and 278 (348) in Other (Inha Works, Real Estate, and Corporate HQ). The Corporation employed 1,722 people in Finland (1,853) as of the end of the year. The reduction of personnel in the Americas was due to restructuring measures within Craft and Outdoor business areas. In EMEA, the closure of the Höganäs plant and other reorganization measures within Homeware production units reduced the number of personnel, while the opening of new Iittala stores and outlets have had an increasing effect on the personnel. The reduction in personnel in the Other segment was due to the down-sizing of operations at Inha Works. Wages, salaries, and benefits totaled EUR 186.8 million (146.1) in 2008. CHANGES IN MANAGEMENT Mr. Kari Kauniskangas, M.Sc. (Econ), took over as the President and CEO of Fiskars Corporation at the beginning of 2008. Hille Korhonen, Lic.Tech., was appointed Vice President, Operations of Fiskars Corporation in March 2008. Teemu Kangas-Kärki, M.Sc. (Econ.) was appointed CFO in April 2008, and assumed his duties in August 2008. Max Alfthan, M.Sc. (Econ.) was appointed Chief Strategy Officer in August 2008, and assumed his duties in November 2008. Korhonen, Kangas- Kärki, and Alfthan are all members of the Corporate Management Team. Ingmar Lindberg, Head of Real Estate and Executive Vice President of Fiskars Corporation, retired at the end of 2008. Tomas Landers, M.Sc. (Forester) was appointed Vice President, Real Estate as of December 1, 2008, and assumed responsibility for the Real Estate Group at the beginning of 2009. Three members of the Corporate Management Team, Maija Elenius (Vice President, Corporate Control), Juha Rauhala (Vice President, Corporate Finance), and Leena Kahila-Bergh (Vice President, Communications), left Fiskars during 2008. In November 2008, Fiskars appointed Paul Tonnesen President, Garden & SOC (School, Office & Craft), Americas, and Thomas Enckell President, Garden, EMEA. Tonnesen was previously responsible for Fiskars' Garden business in the Americas, and Enckell for the wholesale business of the Iittala Group. Jim Purdin (CEO of Fiskars Brands, Inc.), Francis Kint (President, Garden), Chad Vincent (President, Craft, Americas), Jerome Klein (CFO, Americas), and Elly Piccart (CFO, EMEA) have left the company. CORPORATE GOVERANCE Fiskars complies with the Finnish Corporate Governance Code issued by the Securities Market Association, which came into force on January 1, 2009. Fiskars also complies with the insider regulations of NASDAQ OMX Helsinki adopted on June 2, 2008, and internal insider guidelines adopted on August 5, 2008. RISKS AND BUSINESS UNCERTAINTIES Fiskars produces and sells goods targeted for consumers. The general market conditions and decline in consumer demand in Fiskars' significant market areas in Europe and North America could have a material adverse effect on the Corporation's net sales and profitability. Fiskars products are sold to wholesalers and retailers as well as directly to consumers through its own stores. The loss of some major customers, financial difficulties of them or a disruption in the activities of a specialized distribution channel could have an adverse effect on the Corporation's business and profits. Fiskars largest customer accounted for about 5% of sales in 2008 (about 6% in 2007). Fiskars uses increasingly external manufacturers and partners in its operations. The share of own production has decreased; the Corporation's dependency in supply chain has increased. This means management of the supply chain becomes both a management and availability risk Sudden fluctuations in raw material and energy prices may have an impact upon Corporation's result from operations. The most important raw materials for the Corporation are steel, aluminum, and plastic. Demand for some product groups can be affected by weather and seasonality, for example garden tools in the spring season. This means that weather conditions that do not concur with the statistical seasons could have a negative impact on sales of these products. The sales of Corporation's homeware products are heavily geared towards the last quarter of the year. Possible negative issues in product availability or demand during the quarter may significantly affect the full-year result. Fiskars owns a 17.1% share in an associated company, Wärtsilä Corporation. Major changes in Wärtsilä's profitability, or ability to pay a dividend would have a material impact on Fiskars profitability and cash flow. ENVIRONMENT Fiskars does not detail environmental costs, as they are part of on- going business activities and business development. No significant environmental investments were made during 2008. Production operations in the homeware business area are more energy-intensive than other areas of production. Most of Fiskars' industrial operations involve no significant environmental risks. Production facilities have up-to-date environmental permits that set clear limits on their operations. Changes in environmental directives can affect existing environmental permits. Adapting to such directives may require changes in existing production methods or investments in new equipment, and result in additional costs. SHARE Fiskars Corporation has two series of shares. Series A shares carry one vote per share, and Series K shares carry 20 votes per share. The dividend per share paid out on Series A shares shall, according to the Corporation's Articles of Association, be a minimum of two (2) percentage points higher than the dividend paid out on Series K share. The share capital and the number of shares were unchanged during the year. The Corporation had a total of 54,944,492 Series A shares (71% of shares and 11% of votes) and 22,565,708 Series K shares (29% and 89% respectively), in total 77,510,200 shares and 506,258,652 votes. The book counter-value for both series of shares is EUR 1.00. The share capital was EUR 77,510,200 as of the end of the year. A group of shareholders representing more than 5% but less than 10% of the votes of Fiskars shares approached the company's Board of Directors in October 2008 and requested that the Board should investigate the possibility of introducing equal voting rights for the company's listed share series. Based on the request the Board decided to investigate the matter. Purchase and sale of treasury shares Until the Annual General Meeting held on 25 March 2008, the Board of Directors had an authorization to acquire and convey treasury shares, provided that the amount of shares acquired did not exceed ten percent (10%) of the total share capital and votes in the company. The Annual General Meeting on 25 March 2008 authorized the Board to acquire and convey treasury shares provided that the total amount of shares acquired or conveyed is less than five percent (5%) of the total amount of shares of the Corporation. In January 2008 the Corporation sold a total of 15,397 A shares through the stock exchange to the President and CEO Kauniskangas at the market price (EUR 11.20 per share). The Corporation recorded a gain of EUR 0.1 million to equity. Since then, the Corporation has not used its authorization to acquire or convey treasury shares. As of the end of the year, Fiskars had 112,115 Series A treasury shares and 420 Series K shares, corresponding to 0.15% of the Corporation's shares and 0.02% of votes. Share prices Both series of shares are traded in the Large Cap segment of the NASDAQ OMX Helsinki Ltd. At the end of December, the price of one Fiskars Series A share was EUR 6.96 (EUR 13.30) and the price of one Series K share was EUR 11.15 (14.45). The market value of Fiskars' share capital was EUR 633 million, excluding treasury shares, as of the end of the year. The number of shares traded during the year was 5.1 million (12.7). Changes in ownership On November 18, 2008, Fiskars Corporation was informed that Virala Oy Ab had decreased its holdings to less than 1/5 (20%) of the voting rights in Fiskars Corporation. The new share of votes was 19.87% and share of shares 10.63%. The Corporation has not been informed of any other significant change among the largest shareholders during 2008. ANNUAL GENERAL MEETING 2008 The Annual General Meeting of Shareholders approved the financial statements for 2007 on March 25, 2008. It was decided to pay a dividend of EUR 0.80 per share for Series A shares, totaling EUR 43,865,901.60, and EUR 0.78 per share for Series K shares, totaling EUR 17,600,924.64. The record date for the dividend was March 28, 2008, and a dividend totaling EUR 61,466,826.24 was paid on April 4, 2008. Members of the Board and the President were discharged from liability for the 2007 financial year. It was decided that the number of Board members be nine. Mr. Kaj-Gustaf Bergh, Mr. Ralf Böer, Mr. Alexander Ehrnrooth, Mr. Paul Ehrnrooth, Ms. Ilona Ervasti-Vaintola, Mr. Gustaf Gripenberg, Mr. Karl Grotenfelt, Mr. Karsten Slotte, and Mr. Jukka Suominen were elected as Board members. The term of Board members will expire at the end of the Annual General Meeting in 2009. KPMG Oy Ab was elected auditor and they nominated Authorized Public Accountant Mr. Mauri Palvi as responsible auditor. The Annual General Meeting decided to authorize the Board to acquire treasury shares, with the Corporation's distributable equity, no more than 2,747,224 of Series A and no more than 1,128,285 of Series K shares. The share price shall be no higher than the highest price paid for the shares of Fiskars Corporation in public trading at the time of purchase. This authorization shall remain in force until the end of the next Annual General Meeting. The Annual General Meeting decided to authorize the Board to decide to convey treasury shares to a maximum of 2,747,224 of Series A shares and a maximum of 1,128,285 of Series K shares. The Board may decide on the conveyance of the shares otherwise than in proportion to the shareholders' pre-emptive subscription rights. This authorization shall remain in force until the end of the next Annual General Meeting. In addition, the Annual General Meeting decided to amend the Corporation's Articles of Association. The changes in the Articles of Association were entered into the Trade Register on April 21, 2008. Constitutive meeting of the Board of Directors Convening after the Annual General Meeting, the Board elected Kaj- Gustaf Bergh to be its Chairman and Alexander Ehrnrooth and Paul Ehrnrooth its Vice Chairmen. The Board appointed Gustaf Gripenberg to be chairman of the Audit Committee, and its other members to be Ilona Ervasti-Vaintola, Alexander Ehrnrooth, Paul Ehrnrooth, and Karsten Slotte. The Board appointed Kaj-Gustaf Bergh to be chairman of the Compensation Committee, and its other members to be Ralf Böer, Karl Grotenfelt, and Jukka Suominen. The Board appointed Kaj-Gustaf Bergh to be chairman of the Nomination Committee, and its other members to be Alexander Ehrnrooth and Paul Ehrnrooth. ANNUAL GENERAL MEETING 2009 Fiskars Corporation's Annual General Meeting (AGM) of Shareholders will be held at the Helsinki Fair Centre on Monday March 16, 2009 at 3.00 p.m. BOARD'S PROPOSAL FOR THE ANNUAL GENERAL MEETING The distributable equity of the Parent Company at the end of the 2008 fiscal year was EUR 460.5 million (894.8). The Board of Directors proposes to the Annual General Meeting of Shareholders that a dividend of EUR 0.50 per Series A share and EUR 0.48 per Series K share would be paid for 2008. The number of shares entitling to a dividend totaled 77,397,665, of which 54,832,377 are Series A shares and 22,565,288 Series K shares. The proposed distribution of dividend would thus be as follows: Number of Dividend per Total, EUR shares share, EUR Series A shares 54,832,377 0.50 27,416,188.50 Series K shares 22,565,288 0.48 10,831,338.24 Total 77,397,665 38,247,526.74 This would leave EUR 422.3 million of unused profit funds at the Parent Company. No material changes have taken place in the financial position of the Company after the end of the fiscal year. The financial standing of the Company is good and according to the Board of Directors' assessment the proposed distribution of dividend will not compromise the Company's solvency. OUTLOOK FOR 2009 The market situation is expected to remain uncertain in 2009, and both the North American and European markets are likely to continue facing severe challenges. Consumer demand is expected to be weaker than in 2008, and this will have an impact on Fiskars' net sales. The Corporation has restructured its organization and is reducing its cost base to meet the projected consumer demand for 2009 and ensure Fiskars' competitiveness. A clear business focus on specialized business areas and brands, together with new product development will continue to be key success factors in a challenging market environment. Fiskars Corporation's full-year net sales in 2009 are expected to be below the 2008 sales. Operating profit is expected to be lower than in 2008, excluding non-recurring items, share of profit from associated company Wärtsilä, and the change in the fair value of standing timber. Associated company Wärtsilä will continue to have a major impact on the Corporation's profit and cash flow in 2009. Helsinki, February 12, 2009 FISKARS CORPORATION Board of Directors The Fiskars Annual Report 2008, including full financial statements for 2008, will be published during the week starting March 9, 2009 (week 11). CONSOLIDATED INCOME STATEMENT 10-12 10-12 change 1-12 1-12 change 2008 2007 % 2008 2007 % MEUR MEUR MEUR MEUR NET SALES 174.9 192.2 -9 697.0 647.0 8 Cost of goods sold -132.1 -128.3 3 -483.5 -439.2 10 GROSS PROFIT 42.8 63.9 -33 213.5 207.8 3 Other operating income 0.4 2.3 -85 2.9 5.8 -51 Change in fair value of biological assets -3.1 -0.4 614 -5.6 11.1 0 Sales and marketing expenses -34.3 -35.7 -4 -129.8 -100.2 30 Administration expenses -12.3 -10.9 13 -54.4 -49.3 10 Research and development costs -2.9 -2.4 21 -8.4 -7.4 14 Other operating expenses -17.1 -3.5 0 -17.8 -4.2 319 Share of profit from associate 24.6 16.7 48 70.5 43.3 63 OPERATING PROFIT (EBIT) -2.0 30.0 0 70.9 106.9 -34 Gain on sale of Wärtsilä shares 6.9 23.7 Other financial income and expenses -6.2 -3.6 -12 -19.4 -10.7 58 PROFIT BEFORE TAXES -8.2 33.3 0 51.5 119.8 -57 Income taxes 1.7 -1.6 0 -2.3 -11.4 -80 PROFIT FOR THE PERIOD -6.5 31.7 0 49.2 108.4 -55 Attributable to: Equity holders of the Company -6.5 31.4 0 49.3 108.0 -54 Minority interest -0.1 0.3 -0.1 0.3 -6.5 31.7 49.2 108.4 Earnings for Equity holders of the Company per share, euro (basic) -0.08 0.41 0.64 1.40 Earnings per share (diluted) -0.08 0.41 0.64 1.40 CONSOLIDATED STATEMENT OF 10-12 10-12 1-12 1-12 RECOGNIZED INCOME AND EXPENSES 2008 2007 2008 2007 MEUR MEUR MEUR MEUR Profit for the period -6.5 31.7 49.2 108.4 Translation differences -2.0 -4.2 -1.9 -10.4 Changes in associate recognized directly in equity -9.1 -1.5 -18.1 -0.2 Equity net investment hedges after tax 1.6 -1.9 0.7 2.5 Defined benefit plan, actuarial gains (losses), net of tax -0.1 0.6 -0.2 2.0 Other changes 0.0 0.0 0.2 0.1 Net income and expense recognized directly in equity -9.6 -7.1 -19.3 -5.9 Total recognized income and expense for the period -16.1 24.6 29.9 102.5 Attributable to: Equity holders of the Company -16.0 24.3 30.0 102.2 Minority interest -0.1 0.3 -0.1 0.3 -16.1 24.6 29.9 102.5 CONSOLIDATED BALANCE SHEET 12/200812/2007 change MEUR MEUR % ASSETS NON-CURRENT ASSETS Intangible assets 131.0 134.0 -2 Goodwill 99.2 99.8 -1 Property, plant & equipment 113.2 121.7 -7 Biological assets 39.3 44.9 -13 Investment property 7.7 8.4 -8 Investments in associates 263.5 278.3 -5 Financial assets Shares at fair value through profit and loss 2.9 3.0 -1 Other investments 2.2 2.3 -6 Deferred tax assets 21.7 20.6 5 NON-CURRENT ASSETS TOTAL 680.6 713.1 -5 CURRENT ASSETS TOTAL Inventories 159.8 173.7 -8 Trade and other receivables 109.6 119.8 -9 Income tax receivables 8.4 6.0 39 Cash and cash equivalents 11.3 34.5 -67 CURRENT ASSETS TOTAL 289.0 334.1 -13 ASSETS TOTAL 969.7 1047.1 -7 EQUITY AND LIABILITIES Equity attributable to the equity holders of the Company 446.7 477.8 -7 Minority interest 0.0 0.5 EQUITY TOTAL 446.7 478.3 -7 NON-CURRENT LIABILITIES Interest bearing debt 137.5 124.6 10 Other liabilities 1.4 4.7 -69 Deferred tax liabilities 49.3 51.7 -5 Pension liability 9.2 9.4 -2 Provisions 13.4 6.2 117 NON-CURRENT LIABILITIES TOTAL 210.8 196.7 7 CURRENT LIABILITIES Interest bearing debt 183.7 228.9 -20 Trade and other payables 121.9 139.4 -13 Income tax payable 6.6 3.8 74 CURRENT LIABILITIES TOTAL 312.2 372.1 -16 EQUITY AND LIABILITIES TOTAL 969.7 1047.1 -7 CONSOLIDATED STATEMENT 10-12 10-12 1-12 1-12 OF CASH FLOWS 2008 2007 2008 2007 MEUR MEUR MEUR MEUR CASH FLOW FROM OPERATING ACTIVITIES Net profit before taxes -8.2 33.3 51.5 119.8 Adjustments for Depreciation 12.8 7.0 32.9 23.2 Gain on sale of non-current assets 0.0 -26.1 0.0 -26.1 Share of profit from associate -24.6 -16.7 -70.5 -43.3 Investment income -1.1 15.4 -1.0 -3.0 Interest expense 7.4 4.9 20.4 13.7 Change in value of biological assets 3.1 0.7 5.6 -10.0 Other non-cash items 0.0 0.8 0.0 2.7 Cash flow before changes in working capital -10.6 19.3 39.0 77.0 Changes in working capital Change in current assets, non-interest bearing 14.5 2.4 10.9 -9.7 Change in inventories 15.5 14.1 10.6 -1.5 Change in current liabilities, non-interest bearing 1.5 4.5 -7.5 11.4 Cash flow from operating activities before financial items and taxes 20.8 40.2 53.0 77.2 Dividends from associate 0.0 0.0 67.2 27.7 Financial costs paid (net) -4.3 -5.7 -18.0 -11.8 Taxes paid 0.6 -4.7 -5.2 -11.2 CASH FLOW FROM OPERATING ACTIVITIES (A) 17.2 29.8 97.0 82.0 CASH FLOW FROM INVESTING ACTIVITIES Acquisitions 0.0 0.0 -3.1 -169.3 Capital expedinture on fixed assets -5.5 -7.7 -25.4 -20.5 Proceeds from sale of fixed assets 1.9 3.1 4.1 6.5 Cash flow from other investments -1.7 0.0 -1.4 0.0 CASH FLOW FROM INVESTING ACTIVITIES (B) -5.3 -4.7 -25.8 -183.4 CASH FLOW FROM FINANCING ACTIVITIES Sell of treasury shares 0.0 0.0 0.2 0.0 Borrowings of non-current debt 21.5 0.6 62.2 0.6 Repayment of non-current debt 0.0 0.4 -0.1 -0.1 Change in current debt -30.2 -0.4 -85.6 137.6 Payment of financial leases liabilities -0.8 0.4 -3.4 -1.8 Cash flow from other financing items -3.0 2.1 -3.5 0.9 Dividends paid 0.0 0.0 -61.5 -46.0 CASH FLOW FROM FINANCING ACTIVITIES (C) -12.5 3.0 -91.7 91.3 CHANGE IN CASH (A+B+C) -0.6 28.2 -20.5 -10.2 Cash at beginning of period 11.9 9.4 34.5 44.9 Translation difference 0.0 -3.2 -2.8 -0.3 Cash at end of period 11.3 34.5 11.3 34.5 STATEMENT OF CHANGES IN Equity attributable to shareholders Mino- Total CONSOLIDATED EQUITY of the company: rity Trea- Fair Cumul. interest Share sury valuetransl.Retain. capital shares res. diff. earn. MEUR MEUR MEUR MEUR MEUR MEUR MEUR Dec 31, 2006 77.5 -0.9 21.6 -1.5 325.0 0.0 421.8 Translation differences -10.4 0.0 -10.4 Changes in associates -0.2 -0.2 Equity net investment hedges after tax 2.5 2.5 Defined benefit plan, actuarial gains (losses), net of tax 2.0 2.0 Other changes 0.1 0.1 NET INCOME AND EXPENSE RECOGNIZED DIRECTLY IN EQUITY -0.2 -7.8 2.0 0.1 -5.9 Profit for the period 108.0 0.3 108.4 TOTAL RECOGNIZED INCOME AND EXPENSE FOR THE PERIOD -0.2 -7.8 110.0 0.5 102.5 Dividends paid -46.0 -46.0 Dec 31, 2007 77.5 -0.9 21.4 -9.3 389.1 0.5 478.3 Translation differences -1.9 0.0 -1.9 Changes in associates -12.8 -5.9 0.7 -18.1 Equity net investment hedges after tax 0.7 0.7 Defined benefit plan, actuarial gains (losses), net of tax -0.2 -0.2 Other changes 0.1 0.5 -0.5 0.2 NET INCOME AND EXPENSE RECOGNIZED DIRECTLY IN EQUITY 0.1 -12.8 -7.1 1.0 -0.4 -19.3 Profit for the period 49.3 -0.1 49.2 TOTAL RECOGNIZED INCOME AND EXPENSE FOR THE PERIOD 0.1 -12.8 -7.1 50.3 -0.5 29.9 Dividends paid -61.5 -61.5 Dec 31, 2008 77.5 -0.8 8.5 -16.5 377.9 0.0 446.7 The fair value reserve includes Fiskars share of associate Wärtsilä's fair value reserve and its changes. Equity net investment hedges have been re-classified to translation differences as of Jan 1, 2008. KEY FIGURES 12/2008 12/2007 change % Equity/share, euro 5.77 6.18 -7 Equity ratio 46% 46% Net gearing 69% 67% Equity, EUR million 446.7 478.3 -7 Net interest bearing debt, EUR million 309.9 319.0 -3 Average number of employees 4 325 3 517 23 Number of employees, end of period 4 119 4 515 -9 Number of shares outstanding end of period, in thousands A shares 54 832 54 817 K shares 22 565 22 565 CURRENCY RATES 1-12 1-12 change 2008 2007 % USD average rate 1.47 1.37 7 USD end-of-period 1.39 1.47 -5 NOTES TO THE FINANCIAL STATEMENT BULLETIN This financial statement bulletin is prepared in accordance with IAS 34 (Interim Financial Reporting) using the same accounting policies and methods of computation as in the annual financial statements. All figures in the accounts have been rounded and consequently the sum of individual figures can deviate from the presented sum figure. Fiskars Corporation has adopted IFRS 8 (Operating Segments) as of January 1, 2008. Until the end of third quarter of 2008 Fiskars has applied full recognition of actuarial gains and losses through Profit & Loss (P&L). In the fourth quarter of 2008, Fiskars changed the accounting for defined benefit pension liabilities to apply the amendment of IAS 19 allowing for immediate recognition of actuarial gains and losses in the equity. The previous periods' data has been restated accordingly. Due the change, EUR -2.7 million adjustment to the previous periods' operating profit (EBIT) and EUR -0.8 million to the last quarter have taken place. In the fourth quarter of 2008 Fiskars changed the accounting estimate used for valuing its biological assets (i.e. standing timber). Earlier Fiskars has used a one-month average price for measuring the fair value of standing timber. This was changed to a three-year rolling average price, reflecting the stable nature of the asset. Fiskars announced restructuring measures in December 2008 for reorganizing its business areas and strengthening its operations. The principles used for inventory valuation were also harmonized. The restructuring costs included in operating profit (EBIT) totaled EUR 31.8 million in 2008 (0.0). All restructuring costs were recorded during Q4 of 2008. The restructuring costs recorded in cost of goods sold amounted to EUR 13.7 million, whereof EUR 12.6 million resulted from the change in the inventory valuation policy. The rest of the restructuring costs were recorded to sales and marketing expenses, administration expenses and other operating expenses. Use of estimates: The preparation of the financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the valuation of the reported assets and liabilities and other information, such as contingent liabilities and the recognition of income and expenses in the income statement. Although the estimates are based on the management's best knowledge of current events and actions, actual results may differ from the estimates. From 2009 and 2010, the Group will implement the following new or amended IASB standards and interpretations: - IFRS 1 and IAS 27 (amended) Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate - IAS 1 (revised) Presentation of Financial Statements - IFRS 2 (amended) Share based Payments - IFRS 3 (revised) Business combinations - IAS 23 (revised) Borrowing costs - IAS 27 (revised) Consolidated and separate financial statements - IAS 32 and IAS 1 (amended) Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation - IAS 39 (amended) Eligible Hedged Items - IFRIC 13 Customer Loyalty Programmes - IFRIC 15 Agreements for the Construction of Real Estate - IFRIC 16 Hedges of a Net Investment in a Foreign Operation - Improvements to International Financial Reporting Standards 2008 Corporation estimates that the amendment to IAS 1 influences the presentation of the Consolidated Income Statement and Statement of Changes in Consolidated Equity. Following the change in accounting policy for defined pension benefits, Fiskars has presented Consolidated Statement of Recognized Income and Expenses. Considering the other amendments and interpretations, the Corporation estimates that the changes will not impact its Consolidated Financial Statements significantly. SEGMENT INFORMATION 10-12 10-12 change 1-12 1-12 change NET SALES 2008 2007 % 2008 2007 % MEUR MEUR MEUR MEUR EMEA *) 118.7 134.6 -12 454.7 365.9 24 Americas *) 54.5 52.4 4 219.6 255.3 -14 Other 6.4 10.0 -36 40.4 45.9 -12 Inter-segment sales EMEA -3.1 -3.0 -11.9 -10.3 Americas -1.1 -1.7 -5.1 -8.5 Other -0.4 -0.1 -0.7 -1.2 NET SALES TOTAL 174.9 192.2 -9 697.0 647.0 8 SEGMENT INFORMATION 10-12 10-12 1-12 1-12 OPERATING PROFIT (EBIT) 2008 2007 2008 2007 MEUR MEUR MEUR MEUR EMEA *) 5.2 14.7 25.1 36.4 Americas *) -17.9 3.4 -3.9 22.0 Other -6.7 -0.1 -8.0 14.6 Associate Wärtsilä 24.6 16.7 70.5 43.3 Unallocated and eliminations -7.2 -4.7 -12.7 -9.4 OPERATING PROFIT TOTAL -2.0 30.0 70.9 106.9 SEGMENT INFORMATION 10-12 1-12 OPERATING PROFIT (EBIT) BEFORE 2008 2008 RESTRUCTURING COSTS AND CHANGE MEUR MEUR IN FAIR VALUE OF BIOLOGICAL ASSETS EMEA *) 12.4 32.1 Americas *) 1.3 15.4 Other -3.2 -2.0 Associate Wärtsilä 24.6 70.5 Unallocated and eliminations -2.2 -7.7 OPERATING PROFIT TOTAL 32.8 108.3 SEGMENT INFORMATION 10-12 10-12 1-12 1-12 DEPRECIATIONS 2008 2007 2008 2007 MEUR MEUR MEUR MEUR EMEA *) 3.5 3.8 15.9 10.8 Americas *) 7.6 2.3 12.8 9.3 Other 1.6 0.6 3.9 2.7 Unallocated and eliminations 0.1 0.2 0.3 0.4 DEPRECIATIONS TOTAL 12.8 7.0 32.9 23.2 SEGMENT INFORMATION 10-12 10-12 1-12 1-12 CAPITAL EXPENDITURE 2008 2007 2008 2007 MEUR MEUR MEUR MEUR EMEA *) 4.3 5.0 21.8 181.5 Americas *) 0.4 0.9 3.0 3.2 Other 0.5 1.4 3.7 5.3 Associate Wärtsilä 8.3 28.9 Unallocated and eliminations 1.3 0.4 1.3 1.6 CAPITAL EXPENDITURE TOTAL 6.5 16.0 29.8 220.6 *) In a Stock Exchange Release on March 20, 2008, Fiskars published the comparative figures for 2007 according to the new reporting structure. Since the publication of the Stock Exchange Release, Australia has operationally been moved from the Americas to the EMEA segment and the comparative figures changed accordingly. 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. SEGMENT INFORMATION 10-12 10-12 change 1-12 1-12 change NET SALES BY BUSINESS AREAS 2008 2007 % 2008 2007 % MEUR MEUR MEUR MEUR Garden 38.3 41.5 -8 231.2 240.3 -4 Homeware 78.2 87.1 -10 242.6 142.2 71 Craft 16.2 19.7 -18 74.1 97.5 -24 Outdoor Recreation 35.9 33.3 8 110.0 122.4 -10 Inha Works 5.3 8.7 -39 35.2 42.1 -16 Real Estate 1.6 1.7 -6 5.9 5.6 5 Others 0.0 0.0 0.3 0.0 Inter-segment sales -0.6 0.2 -2.3 -3.1 NET SALES TOTAL 174.9 192.2 -9 697.0 647.0 8 INTANGIBLE ASSETS AND GOODWILL 12/200812/2007 MEUR MEUR Book value, Jan. 1 233.8 41.6 Currency translation adjustment 2.8 -4.4 Acquisitions 197.3 Additions 1.4 1.9 Amortization -6.0 -4.2 Decreases and transfers -1.9 1.7 BOOK VALUE AT END OF PERIOD 230.2 233.8 TANGIBLE ASSETS AND INVESTMENT PROPERTY 12/200812/2007 MEUR MEUR Book value, Jan. 1 130.2 107.4 Currency translation adjustment -1.2 -4.2 Acquisitions 27.5 Additions 24.0 18.6 Depreciation and impairment -26.5 -19.0 Decreases and transfers -5.5 0.0 BOOK VALUE AT END OF PERIOD 120.9 130.2 CONTINGENCIES AND PLEDGED ASSETS 12/200812/2007 MEUR MEUR AS SECURITY FOR OWN COMMITMENTS Guarantees 1 1 Lease commitments 64 53 Other contingencies 5 7 TOTAL 71 62 GUARANTEES AS SECURITY FOR THIRD-PARTY COMMITMENTS Real estate mortgages 2 2 AS SECURITY FOR SUBSIDIARIES' COMMITMENTS Guarantees 16 13 TOTAL CONTINGENCIES AND PLEDGED ASSETS 89 76 NOMINAL AMOUNTS OF DERIVATIVES Forward exchange contracts 171 186 Interest rate swaps 16 16 Forward interest rate agreements 60 Electricity forward agreements 2 1 MARKET VALUE VS. NOMINAL AMOUNTS OF DERIVATIVES Forward exchange contracts 2 0 Interest rate swaps 0 0 Forward interest rate agreements 0 Electricity forward agreements 0 0 Forward exchange contracts have been valued at market in the financial statements. RELATED PARTY TRANSACTIONS The dividend from Wärtsilä EUR 67.2 million is reported as Dividends from associate in the Consolidated Statement of Cash Flows. The dividend was received in Q2/2008. FISKARS CORPORATION Kari Kauniskangas Further information: President and CEO Kari Kauniskangas, tel. +358 9 6188 6222 CFO Teemu Kangas-Kärki, tel. +358 9 6188 6231 Fiskars is a leading global supplier of consumer products for the home, garden and outdoors. The group has a strong portfolio of trusted international brands including Fiskars, Iittala, Gerber, Silva, and Buster. Associated company, Wärtsilä Corporation, is also an important part of the group, and forms one of Fiskars' operating segments, together with the Americas, EMEA, and Other. Founded in 1649 and listed on NASDAQ OMX Helsinki, Fiskars is Finland's oldest company. Fiskars recorded net sales of 697 million in 2008, and employs some 4,100 people. www.fiskars.fi
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.