Fiskarsp Aktie

Hello, and welcome to Fiskars Group's Q2 Results Webcast. My name is Essi Lipponen, and I'm the Director of Investor Relations. I'm here with our President and CEO, Jyri Luomakoski; and our CFO, Jussi Siitonen.

Let's look at the agenda of this call. Jyri will first go through Q2 in brief, some highlights. After that, Jussi will go through the financials in more detail, after which Jussi will hand over to Jyri, who will cover business areas and our guidance for the year. After that, we will have plenty of time for your questions, and we welcome questions both through the chat and through the phone lines. Jyri, please go ahead.

Thank you, Essi. Good morning, and welcome also on my behalf. Brief summary of the quarter. It was actually the fourth consecutive growth quarter, much driven by our business area Vita. Comparable net sales 3% up and comparable EBIT improving from EUR 3-ish million to shy of EUR 8 million. So there was a clear way in the positive direction. Both sales growth and EBIT improvement really was driven by Vita for Fiskars BA, where the growth number, it's a black zero. So when you go to the decimals, you get to a positive. It's not rounded up to 0, but it's rounding down to 0 and some margin expansion, but pretty much stable in terms of the EBIT.

One of our focus points now since the year has been cash flow as a consequence of the balance sheet or the indebtedness that had gone above our limits, and we've been focusing on our cash flow. And there was a continuous improvement, significant actually to EUR 31 million on free cash flow, and that's net working capital driven and strict CapEx management has been key there. We introduced the new financial targets in our Capital Markets Day in May. And you can actually find those in the appendix of this presentation and in our releases. So that's something we will not dive deeper into today as such.

On our sustainability journey, pleased to report also that we regained the Platinum EcoVadis status or Medal and that's a result of our hard work. We need to remember that, that implies that we are in the top 1% of the companies assessed, and it's not the average companies that file for that. It's those who have sustainability already in their focus. We have not changed our guidance. It is as it has been since February, comparable EBIT to increase or expected to improve from last year's level. But that's the segue to the numbers, Jussi.

Thank you, Jyri. So as Jyri already mentioned, so after admittedly a quite long period of no growth, we have now succeeded to grow fourth quarter in a row. The growth has been very much driven by Vita, 5.5% now in Q2 and then flat Fiskars BA. The growth has been very broad-based. So when it comes to our top 4 countries, U.S.A., Sweden, Denmark and Finland now in Q2, which are more than 50% of our Q2 sales. All these 4 countries were growing. On top of that, we had a very robust growth in Japan. There are some behavioristic differences between countries. But overall, at the group level, these 4 countries were showing a very robust growth.

When it comes to our channels, so our own e-commerce was up 4% in Q2, our own retail, up 2% and then wholesale up 3%. And by the way, this Q2 was the first time in company history when Vita was already bigger than Fiskars. And now we know that the second half is very Vita dominated when it comes to top line. On EBIT, we were up quite significantly from admittedly low level last year, so from EUR 3 million to EUR 7.7 million. And I walk through more in detail, which were the driver behind this one. Also, our earnings per share adjusted was negative EUR 0.06, very close to last year same period, and I will go a bit deep on that one after a couple of slides.

So moving to EBIT bridge, and I start here from the middle where we have BA Vita. So BA Vita succeeded to improve EBIT by EUR 5 million versus last year. The main drivers being increased sales volumes, lower marketing spend and then very strict SG&A management there. SG&A management was partially reported already the benefits from this restructuring program we announced earlier this year, where we said a EUR 28 million program, out of which up to 1/3 should come in now in 2026, which is very much second half loaded, but already in Q2, we have some benefits coming from that program. As you can see, gross margin came down in BA Vita. That's very much driven of those actions we have put in place in our supply chain to manage the inventory level to manage the factory variances. On the right, BA Fiskars was flat at reported EBIT, then currency-neutral basis, we were slightly up versus last year.

In BA Fiskars, we continued improving gross margin. And as we said in the Capital Markets Day that in BA Fiskars, we are focusing on this flywheel where we are increasing media spend, where we are increasing R&D and get a momentum on our top line. That continued now in Q2. So all those benefits what we had there from gross margin improvement, we invested back in marketing and R&D. R&D was up over 20% now in Q2 versus last year.

Then the cash flow. As Jyri already mentioned, we had a very strong Q2 cash flow. Free cash flow, the way we define it now, we changed it in the Capital Markets Day so that our unlevered free cash flow now includes also those lease payments there. With this new definition, we were at EUR 30.4 million now in Q2, EUR 28 million better than last year, which is significant improvement there, mainly coming from change in net working capital. Net working capital came down over EUR 30 million, whilst last year, it was quite flat. Another positive driver what we had on cash flow is our CapEx. So CapEx in Q2 was EUR 7 million, which is less than half what we had last year same period. Even for the first half basis, in the first 6 months, CapEx was EUR 12 million, which is half of last year's 6 months CapEx. So this CapEx management is now one of the key drivers what we have here to manage our cash flow.

Then cash earnings per share almost doubled from EUR 0.29 to EUR 0.51, and I'll go through a bit more closely that on the next slide. As said, earnings per share was quite flattish there on adjusted basis, so from minus EUR 0.05 to minus EUR 0.06 there. Adjusted EBIT contributed improvement there by EUR 0.06 and then biological -- fair valuation of biological assets, i.e., our forest assets there and net financials took it slightly down. When it comes to our net financials there, the biggest single negative is fair valuation of our commodity hedges. Then taxes also took it down and taxes also include here those adjustments based on those items affecting comparability. On cash earnings per share, you can see significant improvement there coming from the net working capital change, and that has been the main driver for this improvement.

On net debt to EBITDA, net debt to EBITDA was now 3.42 at the end of Q2. Last year, it was 3.16. So it's increased versus Q2 last year, but versus Q1, so in this last quarter, we succeeded to improve it a bit. The main reason for this increasing net debt EBITDA versus last year is coming from EBITDA side. So rolling 12 months EBITDA was lower than it was in comparison period. The net debt itself came down versus last year. When it comes to our net debt overall, what we introduced or what we made now in Q2 was EUR 50 million tap issue to our existing EUR 200 million bond. And then we have also strengthened our liquidity. So total liquidity, what we have at the end of Q2 is EUR 420 million, consisting of EUR 300 million committed credit facilities, roughly EUR 40 million overdraft there and then roughly EUR 80 million cash. So liquidity is very strong now when we start the second half.

Then when it comes to our sustainability and on our sustainability targets, I would like to highlight the circularity, which is one of the key KPI what we are here following our environmental commitments. So now it's up to 30% versus last year 28%, and we continue driving it towards 50% by end of 2030. When it comes to emissions, Scope 1, Scope 2 and Scope 3, all are improving from last year. On social side, I would like to highlight this Lost Time Accident Frequency. So significant improvement from last year, 3.6 to 2.9. And whilst we are very happy with this improvement, we can't be happy with the current level until it's 0.

With that, handing over back to you, Jyri.

Thank you, Jussi. Looking at our 2 business areas, what's been happening at Vita. So as in the intro mentioned, fourth consecutive growth quarter for Vita, and we can clearly see signs of our turnaround that has been -- is critical, instrumental to the business. As such, growth is relevant, but also those measures that we took in the winter time, in the spring time in terms of restructuring, both reorganizing and as a consequence of that, that was leading also to reduction in our headcount, which you can see also now in the quarterly report when you look at the aggregate personnel, the FTEs average in the quarter, it's already down already quite kind of in a relevant number and materially in line with our plans.

So what was driving up the growth? So across D2C and wholesale on a broad base in terms of channels, we've seen growth. Georg Jensen, which is kind of the newest family member in the family of brands at Vita, acquired '23 has continued strong performance on the top line and as such, been a very wanted brand for the consumers. Then many of our regional leader brands, whether it's Rörstrand, which has celebrated its 300-year anniversary this spring and Moomin Arabia have continued growing. So when we look at the comparable EBIT, still this time of the year, the number is dismal and it's also unfortunately negative, but it has improved. And that's the important that the direction is right, and we are not sliding down on that side. So we can see both the effects of the volume growth and the effects, first signs or first kind of things ending up in the income statement, and we have a degree of confidence those ending up in H2, in Q3 and Q4 on our SG&A savings as a consequence of the program that was announced in early February.

And in Jussi's EBIT bridges, you saw that the gross margin, there was a negative variance or unfavorable move on the gross margin at Vita, but that's not because of pricing slippage. It is because of us continuing scaling down the production. So for many, many years, when we had a declining top line, we did not have the corresponding decline in the operations and ended up at significantly higher inventories than the business would actually necessarily need. And now we are in the kind of inverse process. We are scaling down production. We are ramping up sales, and that's the recipe to eat up the inventories. But as long as we are scaling down the production, that's eating up, as Jussi mentioned, in terms of the supply chain variances. So it's a lack of absorption of the fixed cost of factory facilities that is hitting the EBIT. But when we take the ruler, we can see that these lines will also meet each other at some point of time. And that's really behind the comparable gross margin decrease. And the good news is that we know what it comes from, and it's not from price erosion in the marketplace.

Many things have happened. As I mentioned, Rörstrand turned 300 years, and that's, of course, something that has been boosting. There is a good reason to activate. It's a Royal purveyor in the -- as a Royal Warrant from the Swedish court and attending also the 300-year anniversary, the Swedish National Museum is having an exhibition this summer on Rörstrand curated by the museum. So it's a bit similar like maybe in Iittala perceived as national property in terms of the heritage. Iittala, those who have been active and young in the '90s have been playing with Pokémon characters, et cetera, will recognize the limited edition collaboration with Pokémon, actually sold out in the first week.

More to come, but that's how desired brands are working. New jewelry series or collection at Georg Jensen left. And then many of our brands were visible at the 3daysofdesign in Copenhagen early June. 3daysofdesign is behind -- besides Milan, kind of the biggest, I think even globally biggest design event. And in the picture on the slide, you can see a 9-meter tall Aalto Vase so it's a bit bigger than 90 years ago when the vase was launched and brought to the market, and it's not made out of glass, but it was pulling a lot of attention in the marketplace. Good way to celebrate the 90-year celebration and anniversary.

At Fiskars, top line flat. On a currency-neutral base, half of the business is in the U.S. in U.S. dollars. So still the exchange is burdening us a bit less and less. The further we go to the year when we look at last year's euro-dollar exchange curve margin slightly expanded. And while we were growing in the U.S., which is very much driven by our distribution gains and our credibility in the marketplace as we handled the import duty or tariff crisis and availability kept the availability have been bringing new products, declines in Central Europe. That appears to be the corner.

Traditionally, it was the Finns, so we Finns have been the most cautious consumers if there is a kind of gun powder burning somewhere on this planet, as unfortunately, we currently can observe, Finns were immediately stopping spending. And currently, it seems that it's Germans and some other countries in the Central European markets where this consumer cautiousness is very visible. So stable EBIT and the gross margin, as Jussi's bridge showed was expanding, but we have had some good traction with our new products and want to continue on that track remaining relevant to the consumer and to the trade to grant us the shelf space.

And then on picture level here, the modular system, one-click tool system was introduced during the quarter. And then we gained a few Red Dot Awards and our new Power Tools range actually got the highest design award, best of the best distinction at the Red Dot Design Awards and our new Pet Care and DualAction head shears and pruners and so forth got the normal kind of Red Dot Design Award. So it's been recognized also not only by the functionality, excellent functionality, but also the design and optics and aesthetics. So what is expected to happen this year still half of the race is unfinished. We expect that our comparable EBIT is improving from last year's level.

I guess that some of the listeners or watchers of this webcast were hoping for some kind of range. That was something that we have been also hoping, but at the same time, we've been hoping that some of the wars would settle, and that hasn't been really the very recent trend, which means that the uncertainties in the global economy continue to persist and the visibility is somewhat limited. We know that our EBIT generation is much weighted to the second half of the year. And really, the improvement is primarily driven by business area Vita.

We see that the changes that Vita announced in February, the execution of those programs has progressed basically like the manuscript says. And hence, we have a high degree of confidence getting that benefit to the H2 and onwards also. We also know that we will still have kind of a savings mode and not full speed on some of our factories to eat up and consume the elevated inventories and that will, as a consequence, have a negative impact. But this -- from the historical H1, H2 pattern, obviously, when we acquired Georg Jensen, we also showed that it will actually make it even more extreme. But the good news is that the H2 heavy and Q4 heavy. Jensen has been one of our leading growth drivers in Vita. So that's helping us much in terms of our confidence behind our guidance. That takes us to the Q&A.

Yes. Thank you, Jyri and Jussi. We do have some questions already in the chat, but we will first check if there are any questions through the phone lines.

[Operator Instructions] The next question comes from Joni Sandvall from Nordea.

Starting maybe with Vita supply chain, you mentioned that in short term, this will still burden the margins. So are you expecting the -- let's say, the impact to be still fading away during H2? Or should we expect this only to happen in '27?

Not 100% sure, I can follow the impact what you imply with the impact that part of the question. Did you Jussi?

Yes, Joni, if you talk about delta versus last year, bearing in mind that those actions what we put in place last year, they started to impact second half 2025. So now when we are entering into second half 2026, they are already in our comparative numbers. So of course, then the delta when it comes to gross margin won't be the similar type of thing. It has been the first half this year.

Yes. That's okay.

Okay. I'm just thinking is it still -- is the drag increasing in H2? Or are you seeing easing pressure already from this side?

We have not specifically guided individual income statement lines. But as you can certainly recall last summer, we announced that the focus is on cash flow generation and deleveraging. And as a consequence, we started to curtail production about a year ago. So hence, the comps, as Jussi said, are easier in this aspect going forward in the H2.

Okay. Okay. Then going on to Fiskars BA, you have ramped up the marketing as mentioned, but the sales growth has remained muted. How confident are you actually on the growth side of the Fiskars BA?

The growth we see is much coming from the U.S. market and a couple of European, mainly the North European -- non-Central European market, so to speak. And there, we clearly see that both with the launches, our brand relevance with new product launches has been kind of -- we've maintained that both to the trade and to the consumers. The consumer confidence type of factor that we have seen like in the Central European markets certainly has been negative. And also on top of that, we had a year ago on the continent, some loyalty campaigns with some big retailers, which we have not been repeating. Those type of campaigns can drive up volume, not in the same proportion, the bottom line though. And from that perspective, it's visible in the top line development, but we are not regretting that too much when we live in the end from the profits.

Okay. That's clear. Then coming on the lower CapEx now in H1, should we expect this to be more structural? Or is it just near-term cash saving action what you have taken?

Joni, if we take our rolling 12 months CapEx there, which [ just ] say some kind of proxy for full year, we are a level of EUR 32 million there on a rolling 12-month basis. We do have some project going on in the second half. But therefore, the last year level is probably a bit too high for this year. So strict CapEx management will continue and the results should be quite visible for a full year basis, difficult to say that we continue spending the way we did second half last year. So approximately, we are coming down as we guided in Capital Markets Day also. So I would say that's a good proxy also for 2026.

And maybe filling in a bit, building on that. When I look at the CapEx, it's not that we've pushed on any panic button. There is no single initiative or CapEx program that I would have stopped kind of under the headline that we need to save CapEx. It's more the structural. It's new product related. tooling has been a big item, some IT related, but that's been more limited now as the separation of the -- to BA or on the ERP level is completed. So that was driving some part of the historical CapEx and so forth. So it's not that we wouldn't do the CapEx that's required to run the business. And in terms of the production, as you have seen, we've been curtailing production, which implies that we have at least enough capacity, even not somewhat too much. So hence, from that perspective, we haven't had any and don't foresee in the kind of near-term future structural needs for CapEx to increase to accommodate higher level of production as we have those capabilities in place.

Okay. Perfect. Last one on the visibility. You mentioned, Jyri, that it has -- it's limited, but maybe going back to Q1 from Q1 to Q2, did you say that visibility has improved or worsened when the summer has gone?

Well, when there was a ceasefire, we thought that it has improved. But as we know, that's kind of, again, history from the recent past that there was a ceasefire in around Iran and that war. So I wouldn't -- it's difficult, of course, to measure per se, but I wouldn't be able really to quantify. No material change maybe is a relevant way to spend it.

[Operator Instructions] The next question comes from Maria Wikstrom from SEB.

This is Maria Wikstrom from SEB. I wrote some of the questions on the chat, but decided to join in the telephone line, so you can discard those from the chat. And I was interested in your thoughts on the global consumer demand and maybe you need to split it by geographies. First of all, did you see any differences from different months during Q2? And what is your take that -- would you say that the consumer -- global consumer demand is currently improving? Or what is -- how would you describe the -- currently the consumer appetite given that you are like one of the few consumer companies reporting early the Q2 results?

Geographically, I think what we communicated around Fiskars is maybe something we can apply on a more broader base. The American consumer seems -- appears to be more spending happy than the European one. And while historically, we have been the most cautious one always, now it seems that it's more on the continent where the consumer worries are more visible. When we look at the pattern of the quarter, actually, the kind of towards the end of the quarter, the growth rate was higher than it was in the middle of the quarter. So from that type of a curvature perspective, it's consistent with those observations. The Asian consumers and for us, the big markets there are China and Japan, no material change really visible in those markets. So it's been pretty much going according to the manuscript that was made for this year.

Perfect. Then I had a second question relating to the inventory that if we look on the like first half basis, I think, I mean, your inventory is down some EUR 20 million, which in respect that, I mean, the inventory value at the end of Q2 was EUR 340 million is not that big number given that you have had these measures to take down the inventory level. So what do you say that -- I mean, is -- do you think that you need to take, I mean, further actions to write down the currently very high inventory level? Or do you still think that you are unable to move this inventory that you currently have in your balance sheet?

Maria, if I start with about the seasonality of our inventories and then Jyri can continue with this latter part of your question. So what we see is that, of course, second half as it's so much about Vita and the projected inventory decrease what we have for this year is very Vita driven. So therefore, it's year-end loaded where we should expect the inventories coming down. And year-end loaded here actually means that it's November, December when the big slots should come there when we talk about inventory reduction. So it's -- in that sense, we are confident with the plans what we have in place, but the numbers won't be visible until we reach the year-end. But then the other part of your question, Jyri, if you..

You referred to the write-offs. And we, of course, analyze the structure of our inventories on a monthly basis and at quarter end and especially half year-end, do even more thorough analysis, which also the auditors look carefully through. If, let's say, speculating if we would not be able to reduce the inventory volumes by year-end, that could then start to trigger some more provisioning. We do have anyhow already now provisions for excess and obsolete inventory, and it's much in the Vita area where we have some collections that we have discontinued, for example, end of last year, they are still sellable. They -- when you look at the Vita gross margins, and that's the gross margin that's much dominated by our sell-out through wholesale, et cetera, and events like Black Friday, et cetera, which are much about making good deals and clearances those are, of course, important for us in making sure that the provisions that we currently have also remain adequate end of the year.

Maria, as you can hear from our comments here, we are not talking about Fiskars here. So Fiskars inventory levels are in good order and the way we are producing and selling that goes well in line with plan. So this is very much Vita challenge what we have.

Yes. And then what are these extraordinary items during the Q2, are they related to the Vita cost saving plan or...

They are predominantly all about this Vita plan we introduced in February this year with a note that EUR 28 million EBIT improvement there, up to 1/3 will be already in 2026. And this program will result one-offs of roughly EUR 9 million. So those are now the ones what we have in Q2.

And that's all in the appendix to the release. There is a list of -- the laundry list of all the items this year and last year.

Yes, exactly.

And then finally, about your guidance. I mean you are currently, I mean, some EUR 3 million ahead from last year on comparable EBIT. And my thinking is here that how much is your guidance based on the underlying, I mean, improvement in consumer volumes and then on your like on your results from that? And how much for the Vita turnaround program that you are currently carrying out?

Given that the guidance is open-ended, your question is somewhat difficult to answer specifically, at least not in the level of detail you would like me to answer it per se. So if we are now EUR 3 million ahead, that's true. That kind of technically is being ahead or improving. We know that we get this SG&A benefit to Vita in H2 that we know because those actions have been carried out and people who had to leave the company have left the company and so forth. So that's well, it's not in the books, but that I would say it's in the bag per se.

And the continued good momentum with our brand relevance, charming the consumers every day is still there and still in force. Yes, it has a component that we can grow, and we have shown that we can grow also profitably in terms of no growth is not done by discounting prices. The gross margin reduction, as Jussi commented, comes solely from the supply chain, let's say, adjustment or rightsizing there. So it has a component, but kind of year-to-date on the savings and then momentum with our offering and the attraction to of it to the consumers is giving us the confidence that we can deliver in the end a decent year.

I did not have further questions at this point.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes. We still have some questions in the chat. Maybe starting from tariffs, Jyri, maybe if you want to take this one. What is the situation regarding the potential tariff refunds in the U.S.? Have you received any? Or are you expecting to receive something? And when could this happen?

That's an excellent question. Our imports are focusing on what the phasing system of this tariff refund is referring as Wave 2. And a couple of weeks ago, the system actually just opened for entering these refund claims or refund requests and how long that process then takes and what is kind of the approval rate. Rumors tell that customs is very kind of precise that no typos allowed, so to speak. But we know from other companies and have read releases from some U.S. public companies who have been in the wave 1 that they have already received papers now in the meanwhile, with stamps from the government, whether they have received any checks from the treasury, I'm not sure but they were several couple of months ahead of us in terms of the wave 1 starting when that system opened for it.

Fairly technical topic. And of course, we hope that we can complete on time the input to this system of the U.S. customs and border protection and then those get processed, but very difficult and early to assess in detail on that. But that's something that we, of course, obliged to communicate to the market when we know more. But currently, telling that we don't know is somewhat the only thing we can comment, but there is a, if not round-the-clock work, but pretty much that ongoing with our U.S. teams.

Yes. Exactly. And regarding our guidance for the sake of clarity, our guidance does not include any refunds from those potential tariffs.

True.

At the moment, we have one question, and let's see if any others come up, but I will ask the last question for the moment. And Jussi, maybe if you take this one, how did Vita's sales margin develop in Q2 versus last year?

Sales margin or gross margin.

That is the question, maybe it's gross margin.

I think it's gross margin, I think Jyri, you went it through already in your presentation, so came down, very much driven by the supply chain actions what we have in place and also what mentioned here in the call, we haven't taken out any decline there in gross margin due to the sales. So if you talk about sales margin only, it stays on the proper level. The decline is coming from supply chain.

Thank you. And it seems that we don't have any more questions. So thank you for your active participation, and I wish you a very nice summer.

Thank you.

Thank you very much.

Hello, and welcome to Fiskars Group's Capital Markets Day. My name is Essi Lipponen, and I'm the Director of Investor Relations. Today is an exciting day. We have just published our new financial targets for 2026 to 2030. So we have a lot to share with you. In addition, this is the first Capital Markets Day with operationally independent business areas. So that means that we will also have the business area CEOs on stage today. But let's look at the operating model.

After that, the group CFO, Jussi Siitonen, will continue with the new financial targets and will present them in more detail. Following group presentations, we will shift gears to the business areas, starting with Vita and its CEO, Daniel Lalonde. After that, we will have a short break of 10 minutes. When we return from the break, Dr. Steffen Hahn will present business area Fiskars and its priorities and growth model.

And finally, the group's CEO, Jyri Luomakoski, will present the key takeaways after which is it's time for a joint Q&A. I would also like to highlight that in addition to the Q&A, we have reserved some time after the business area presentations for your questions. And we will take questions both from the live audience as well as online, the other chat function. The official part and the webcast will end at 4 p.m. latest. I think now we are ready to get started with the presentation. So please go ahead, Jyri.

Thank you, Essi, and warm welcome from my side to our Capital Markets Day. To frame a bit the situation, we are not here giving a mid-quarter trading update. We are here not revisiting or changing or doing anything with our guidance, that was published after Q4 in February and reiterated over Q1 in late April. So now view and look is forward-looking and into our strategy period, '26 to 2030. Just as a quick reminder, you heard 2 BA CEO will be on stage. Steffen being in charge of the Fiskars part and Daniel having from the slide, a bit bigger part and also from the revenues and quite many brands under the umbrella of our data BA, but this is just a reminder, and you will hear way more about this later on today. Our footprint, we are quite well spread out. I don't like to call us global player because you see some quite big spots on the map where we are not present with our own people. own teams, definitely, there are consumers in many geograph in the lighter color using our products. Europe, still slightly above half of our revenues coming from Europe, 28% is the last 12 months from Q1 coming from Americas, dominated by the U.S. and then Asia Pacific, 20%.

But the splits are quite different when you get later on today to the Channel-wise, majority of our products in reaches the consumer through the indirect channel, i.e., distributors, retailers, wholesales. These players have many names depending on which side of the Atlantic, you kind of call them, et cetera, but shy 1/3 goes direct to consumer through our own stores, our own e-comm. And business area split of the revenues 46% Fiskars and 54% EBITDA. When you look at the 2 business areas, you might wonder what they are, as we saw so on the kind of ad hoc showroom as we built it here for you quite different, why are these together. We see different financial profiles, different levels of gross margin different levels of fixed cost in the operations, use will address that later.

When the DNA of Vita is in the global iconic desirable brands across the high end homeware categories and the fine branded jewelry, we have functional innovations in the gardening outdoor, seasons and creating and cooking categories in Fiskars. The channel route to market, we always need to win the consumer's heart, and that's what we do every day, but then how physically we reach the consumers' hands is quite different because the direct-to-consumer is a big part of the Vita business, while it has basically material role in the Fiskars business.

And then the balance between what we make ourselves, what we source, there are differences. So we have a kind of relevant presence in both BAs with our own manufacturing but also sourcing using third-party contract manufacturers, et cetera, has a big growth. And the geographical presence is quite much different. And then when you get to the seasonality of these businesses, 2/3 of Fiskars profits EBIT measured by EBIT are made in H1.

So H2 is kind of low season, and very much inverse even more extreme, more than 100% statistically of our annual profits in Vita is made in H2 and H1, we should be kind of turning the hearing off, et cetera, because the EBIT doesn't support it. But then jointly, together as a company, Frisco's Group 40-60. That's already something that I would call way more bankable and using these type of aspects of financial performance, how it's split into the seasons and into the quarters of the year.

And there is a very clear glue when we look at design excellence. Some of these are kind of aesthetically design items, beautiful objects that we do. We are many of us who also love the functional designs that we see in fiscals and design is a broad term. It's not only the stakes, but it's designed for functionality and creating the fun effect working with some of our tools. All of our brands have a deep heritage. Youngsters there are 2 bands that are founded in the 20th century, 1904, [indiscernible] and then [indiscernible] is in the 1930s, late 30s. And then dating back fiscal when the journey started with the Fiskars brand in the village of Fiskars. Second oldest brand, [indiscernible] celebrating now 300 years. So these are brands that have a deep heritage and they are authentic. It's not kind of AI generate interned design and then have a contract manufacturer doing some stuff and charm the consumer. These are real things. Consumer centres and the tool to get to the consumer is brand in both cases, Vita Fiskars.

We share our corporate purpose, our values, and we all are committed to sustainability in our business in whatever we do. because running a 377-year-old company, if you don't think about sustainability, how can you then plan to be in the game for the next 7 years. it's an existential topic for us. And it's an existential topic for all of us as human kind. We have strengthened our climate ambitions actually tightened or raise the bar. Safety, we strive for 0 harm in our own operations, 2.8 is the index per million workers of hours worked, but it has a commercial dimension.

So our distributors, there are many consumers who are aware they require that when they make a choice, they consume that they make the sustainable choice. It's been a bumpy ride. This is the period visible for the last long-term financial targets, and Jose will it deeper into the success rate, which is not great. We had the boom of Covid, the pandemic home nesting, then we had the hangover, then Russia attack to Ukraine. Commodity prices, consumer confidence, having it swings. So it's not been, as I said to someone somewhere lately, it's not been an only [indiscernible], but it's been a downhill slide when you look at the profitability curve. And that's something that we need to turn, extremely important. A few years ago, we were basically an integrated consumer company. Now we are a group with 2 operational independent business areas, which both you could say are each of them are integrated consumer goods companies. Viscose corporation, that's the stock you can buy at the [indiscernible]. NASDAQ [indiscernible] Exchange is the listed entity and provides some group functions, but the accountability for business performance lies within the BAs. What did -- why did we do all these changes? It's been -- so a lot of work actually getting the incorporations of the entities done and a lot of ours around IT changes that the invoices go from the right company to the right customer taxation-related topics. It's really the full business accountability. We want to increase speed. And I think we have a few proof points here.

For Vita, we've seen a rather significant cost-related transformation program launched in February and the speed, how that's been executed is so much easier when it's encapsulated EBITDA environment. Similarly, in April last year, Liberation Day, new tariff regime for the U.S. came into force. The speed of the BA Fiskars teams were able to find new bases, new sources, for example, outside of China with lower tariff regimes for the U.S. market and qualify those suppliers get the customers convinced that we have the right stuff, and it's as good as the previous one. This is when I talk about speed, what we want to achieve with this structure. Dedication, not too many years ago, we had mixed sales teams and a global kind of a matrix around sales, et cetera. did not prove to be that successful, maybe save some costs, but also saved us from growing the sales. Now we have 3 consecutive quarters of sales growth, like-for-like growth in EBITDA.

So there are some things happening as a consequence. You've seen maybe somewhere here in the back, some of our new viscose products, the cycle, how quickly from innovation to market, we've been able to get those and not only market to our showroom, but to the consumers, to our distributors, this is again a proof point that focusing on the right things increase is very much the likelihood of delivering on those things. Transparency, measurability. That's why we are here today. We have today published our long-term financial targets with some of those targets relevant to the BAs. And this is not a one size fits all because averaging everything doesn't make any sense as we saw somewhat different type of businesses. Certain commonalities, but when you get to the financial profile, definitely not. And with independent legal entities, so the Fiskars Corporation has 2 subsidiaries under which all of these both BAs basically are that gives also the structural optionality if we want to make any moves in any direction. What does the group to accept the range Capital Markets Day? And so to speak coffee here. We are the, as I said, listed parent company of the group here, when we manage performance, then strategy, establishing a strategy and the framework for reporting is certainly following also being a public company, setting the ambition level, pushing for improvements and challenging prioritization.

Portfolio, it's about allocating capital and shaping the portfolio, where to push on the brakes were to accelerate and where can we get the best return for the capital. Liquidity, long-term funding. So we had a question at the AGM from the audience. They now you have 2 different subgroups, so why aren't you listing those both to the stock exchange. We all know how costly it is to operate a public company and 500 million, 600 million businesses separately, are not really that attractive on the equity or debt capital markets. And when you look at some of these financial profile topics like seasonality, there is a risk mitigating complementing aspect coming from this business. And then we as a group have to ensure we are the listed entity. So there is enterprise risk management processes and many, many requirements. As we know, we get always new ones from the regulators to comply with. And that's not fun kind of free of charge, but now we have optimized that we paid those costs only once. What are our current priorities. So Daniel will talk more about EBITDA's turnaround, which has been openly flagged that there is a need, as you can also read from the numbers.

Fiskars has shown resilience and margins that are beating most of the peer companies in the categories where viscose operates. Growth is in that market has been a trend to us and supporting this pressure, returning to the growth trajectory is an important priority. Group functions here, we need to ensure that we are cost efficient and cost effective. And then when you look at our balance sheet, leverage numbers are off spec so to speak. So driving cash flow and reducing leverage is in our priority box.

This is the number of things you can base with one -- fingers of 1 hand, still count. So in a brief summary. So Viscose Group is acting as a as an effective portfolio and capital steward, developing its businesses and setting financial targets with a long-term perspective. The group's BAs who are closest to market and to the customers, to the consumers [indiscernible], build strategy, build runs, manage customer relationships and day-to-day operational performance. And this combination, we believe, with certain central oversight and empowered businesses is supporting our profitable growth, robust cash generation and creation of long-term shareholder value. With that introduction, please to call us to the stage. So I had a nice overview, but now you have the hard facts available. Jussi, please?

Thank you, Jyir and hello, everyone here at [indiscernible] and online. So in the next 20 minutes, I'll show you how we translate the strategy into new financial framework. The one we are committed to deliver, the 1 we are measured against. Three topics I will cover. First is that how we are resetting the framework what we have had in the past. Secondly, what are the new targets? ambition level what we have set now for the BAs.

And thirdly, how do we get there? And I will stay quite high level with the fundamentals behind because then Daniel and Stefan will walk you through more in detail. If that first, this is not refreshing the old target. This is reeling the new framework because the structure of the company and environment around it has changed. So the 3 forces behind this change. First of all, is that the last 5 years period concluded last year. So we owe you a new one. More importantly, the group structure has not changed. We have 2 independent BAs holding P&L accountability and then group acts as a portfolio and capital steward on top of these BAs. Then thirdly, operating reality. is now tougher than what we -- and admittedly, most of the consumer durable companies anticipate 5 years ago when we set the targets last time. So targets and ambition.

I'm presenting they set today to reflect the reality, not the aspirations we cannot deliver. Before start even talked about the new framework. Let's have [indiscernible]. So I walk through how we performed versus the old target. We had 4 targets out of which we delivered on cash flow conversion. Two, we missed top line growth for this full period of 20 to 125 has an average minus 1.6%. So last year, we were flat. And then on EBIT target being the mid-teens, we ended up at 6.7. both well below the targets. The fourth net debt to EBITDA, we managed to keep that at a targeted 2.5 MAX level until end of last year when it went up to 3.3.

Why? Two reasons, which are not excuses. So Yuri already explained, but the whole post-covid consumer sentiment declined in our core markets, core categories, especially when it comes to weather categories, were the ones which pushed down both the top line margins and then also wind up our net working capital, leading to this net debt to EBITDA increase there. Our response, we have productions in place already to restore profitability and unwind working capital growth. New targets we are now setting. They are reflecting that outcome. So that was the first out of those 3 reasons why we changed the target. The second one is the new structure. This chart shows what we have been operating with and it's actually best summary on why we are moving to BA level targets. If I start here first on the middle panel, which is BA Fiskars. As you can see, net sales started decline in 2023. And since that continued coming down. At the same time, we have succeeded to maintain decent low double-digit EBIT margin in that business. So that shows that Fiskars BA is resilient, asset-light, well-run business, what Steffen is now leading.

The left panel same period, very different picture. Sales declined sharply in 2023, 2024, and then at the same time, EBIT margin compressed from about 50% level to 4% level. That leads to the turnaround. Daniel is now leading. The right panel is a consolidated group level, flat to declining sales than margin compressing to mid-single digit. A single group level number, would high and ignore the strength that we have in Fiskars and the urgency what we have in BA Vita.

Jyri already covered that we have shifted from centralized matrix to operationally independent BAs. The structure is now complete. The financial framework will follow. The principles guiding the design, what we have had here is that when it comes to growth and profitability, the target are set at BA level. not hidden by a single group KPI. Having said that, when it comes to our official guidance, that will be kept at group level. So we do not start guiding BA level numbers.

When it comes to cash and leverage, bearing in mind the group role what we have here to maintain capital allocation take care of the funding those targets to stay at the group level. But with great BA level transparency, what are the drivers behind, especially when it comes to cash flow. And then with this model, both accountability and comparability of the business. is clear versus what it used to be. Tender new targets, a new framework, showing our ambition also for financial targets externally committed. On top of that, 5 regularly reported KPIs providing further transparency. Let me present the 4 targets 1 by one. Organic net sales growth only set at the BA level. Comparable EBIT margin set at BA level and the group is merely the outcome of those results. Cash flow now measured at free cash flow EBIT ratio. And then balance sheet targeted sales comparable EBITDA remained unchanged. The only change is that now it's measured at the year-end eliminating the quarterly volatility.

I will now walk you through more in detail each of the targets, start first with the top line. The chart here shows where we have been, as I already mentioned, it from minus 6% to plus 3% last year. Over 4% growth if we take rolling 12 months end of March and then 5% only in Q1. The growth target set for BAV is now in this period to deliver for the 6% top line growth annually. The drivers behind is repositioning our iconic brands, enhancing those brand desirability.

Then distribution expansion, both in channels as well as countries where we are underindexed. And then thirdly, optimizing channel mix and especially from a profitability perspective. Then on Fiskars BA. As you can see, we have been the mid-single-digit type of negative growth for a certain period of time. Now the growth target and ambition for BA Fiskars is in the range of 3% to 5% for this period. Basic is an investment case. We like to invest in acceleration of innovation pipeline because we already have a proof point that it works. We like to scale the core categories where we already have a leadership position in the market.

And thirdly, we like to invest in category expansions there, expansion in the new agencies. So 2 different approach here. This is very much where we're benefiting from the existing restructuring, what we have as well as ongoing plan, and Fiskars BA is very much an investment case. So that's about top line, moving then to profitability. On profitability, we have 3 levers for improvement. First of all, with the turnaround, Fiskars continuing resilience what we have in that business; and thirdly, more efficient group functions. So Vita, currently, there are a bit -- about 4% -- 4.2% EBIT margin target being at or about 12% by 2030.

The levers what we have behind for that one, the big 1 is the ongoing restructuring, delivering approximately EUR 28 million savings there. Most of those will be there in 2027, roughly 1/3 already this year. And then, as I already mentioned, profitability gains from improved product and channel mix. Then on BA Fiskars. The [indiscernible] being there at or about 14% by 2030. You can see that we are already now at 13% level, which shows the tax [indiscernible] someone might say that is this ambition enough. It is ambition enough because, as I said already, we will invest in top line growth in Invesco's BA. And therefore, we consider this EBIT target reflecting right, the investment need what we have there to deliver this top line. top line growth. When it comes to group functions target is to have this unallocated EBIT to approximately minus 1% of net sales. And I'll get back to that on the next slide.

When it comes to group target, delivering this at or about 12% by 2030. That's pure mathematics. It's a combination of those 2 BAs to get what we have. So we haven't layered up on top of that, everything is very much coming from BS plans. This slide is actually for all those [indiscernible] modelers we have in the room or online, showing how different those 2 BAs are. What we have here is be a P&L structure for Vita, for viscose and then for group.

Three observations. BA Vita has a stronger gross margin. We are a bit north of 53% there, but Vita also spend meaningfully more in marketing and sales, mainly because of the channel structure that we have. fiscals gross margin at lower level, mainly due to the big box distributions, what we have, but that is very OpEx-efficient distributions we have there. Also, in DA fiscals, we have simpler model in place, so it carries less G&A cost. Then on group level functions.

Unallocated EBIT being this minus EUR 18 million or minus 1.6% of net sales. mainly colisting of employee cost and depreciation, what we have there, partially offset what we get from the forest. Target there is to get it down to roughly 1% -- minus 1% of net sales. Those have been following the company for a longer period, might remember that we have said that when it comes to unallocated costs, it's typically EUR 1 million to EUR 1.5 million each month. Now the target is to be at the low end of that range. So key takeaway here is that the levers that we have are different in HBA and the framework we have put in place reflects that one. So that's about top line growth and profitability.

Let's move then to the cash. We are expecting cash flow to significantly improve with a stable free cash flow EBIT ratio. And I'll start explaining this first -- explaining the chart first. So what you can see here on the bottom right is our free cash flow, how it's now defined, i.e., unlevered free cash flow and lease payment included, which means that the free cash flow, how it's now determined is roughly EUR 40 million less than what we have reported in the past because those lease payments are now part of free cash flow. The top chart shows the expected cash flow convention ratio. Free cash flow over rolling 12 months EBIT there is expected to be at or above 75%. The new way to measure it is less volatile. You might remember the previous 1 was based on the net profit. So it was much more volatile in that sense. The drivers to improve our cash flow. On top of EBITDA, bearing in mind the top line growth, EBIT margin improvement. Obviously, EBITDA is 1 big driver there.

But on top of that, trade working capital efficiency is the single biggest -- single biggest unlock of our cash board we have. And then CapEx discipline, keep CapEx now at or below 4% of net sales and a the group unallocated CapEx to EUR 4 million. So with the targeted net sales growth with a targeted pliability improvement and with the target free cash flow EBIT ratio, we expect that free cash flow will double from that -- from [indiscernible] by 2030.

When I highlighted the importance of trade working capital here, let's spend a bit more time on that one. Again, it's better to explain to Slide 1 because moving to the content. What you can see here is our trade working capital and net working capital as a percentage of sales. The top chart shows that we have now up from pre-COVID levels, which were approximately 30% there. We are almost 10 percentage points up from that level, pretty much unchanged top line. The bottom chart here shows the same in absolute terms. And as you can see, where this biggest potential is in inventories. They are roughly EUR 100 million up versus the comparison period throughout, and that's mainly in it. So once we can unlock the cash what we have there is we have an impact also at the group level. Meaningful progress will happen in 2027.

So I'm also matching expectations here. This is not a short-term actions to get it back on track, but it goes to 2027. Then on CapEx here on the bottom right. As I said, we had -- or we have target to give it now roughly 4% or maximum 4% of net sales. Those peak here is there 2 to 4 pretty much digital and IT driven. The that cycle is now largely behind us. So the current level is a good proxy also for this '26 '30 period. Then net debt to EBITDA. And [indiscernible] I said in the beginning of my presentation that we succeeded to keep net EBITDA at targetable until 2025. So what happened in 2025, was not that we saw a big increase net debt. Actually, net debt increase was quite modest there in 2025. But when we saw almost 20% decline in EBITDA it took net debt-to-EBITDA up to 3.3x. In the new financial frame, what we have built, EBITDA growth does most of the work. net debt decline is expected to be rather modest for this period. Target, what we have is to get back to 2.5x levels within the next 2 years. And we do prioritize deleveraging of the balance sheet in our capital allocation. I get back to that in 2 slides.

So these were the 4 official financial target showing our ambition and where we are committed to. On top of that, I want to highlight 1 KPI. We will report more in detail from Q2 onwards. And that's return on capital employed. When I showed you earlier that it Band BA fiscals have quite different P&L structures. They do have it also when it comes to our capital employed. Let me first explain the group level numbers here. So as you can see, almost half of our capital employed is in non or slow-moving assets, be it goodwill fee trademark, be it other intangibles. And when we go to BA level, you can see that over 75% of our capital employed is in BA Vita.

And out of that BA Vita numbers, roughly 60% is in slow or nonmoving assets. Fiskars built organically throughout hundreds of years is asset-light. The capital employed what we have in BAs because it's mainly working capital related. And then what remains at the group level is mainly the forest assets what we have. So this puts together the target we have set for growth and profitability. For Vita, bearing in mind that with the assets are slow or not moving. For Vita, it's important to grow because that's the easiest way to improve asset turn, what we have there with nonmoving asset base. For Fiskars, Fiskars is already there. When it comes to returns, Fiskars is already there, I would say, satisfactory level with over 30% return on capital employed. Viscose is an investment case. We need to invest there for sustainable growth to deliver this targeted 3% to 5%.

So as I said, even though return on capital employed is not in our 4 core targets we are committed to. We will report this on a quarterly basis because this is the discipline we will apply also in our capital allocation. And that's a good segue then when it comes to capital allocation. If I start first with sources, and I have mainly covered them already earlier in my presentation, but the biggest potential we have to unlock to cash is in our working capital. Then all these cost takeout programs and efficiency improvements are the ones and then disciplined CapEx policy. So these are the sources of funds that we have. And how we are going to use these funds. First and foremost, to enable and secure organic growth, have enough spending power to R&D, have enough spending power to media there to boost the growth what we have, especially in Fiskars BA. Having said that, we keep also selective M&A or toolbox, bearing in mind the commitment what we have when it comes to deleveraging of the balance sheet. And then when it comes to our dividend policy, it will remain unchanged, i.e., stable over time increasing. In summary, the financial framework for 2030 is built on a tougher operating reality and DLL accountability. BA specific growth based on brand enhancement and resetting the channel in the VA Fiskars -- BA Vita, and then innovation at scale in at BA Fiskars.

EBIT improvement coming from 3 sources, Vita turnaround, continuing resilience there in Fiskars BA and then more efficient [indiscernible] functions. On cash flow and balance sheet, as I said, reaching the charges, what we have for top line growth, what we have for profitability improvement and cash conversion that indicates that free cash flow, nearly doubling during this period by 2030. And then we get the balance sheet back to 2.5x levels in the next 2 years' time. Then on capital allocation, organic growth prioritized followed by disciplined deleveraging. So these are the targets and priorities, including then also the additional KPIs we start reporting now from Q2 onwards. Having said that, handing it over to you, Daniel.

Thank you, Jussi, thanks a lot. Thank you. All right. Well, good afternoon, everyone. So I'm Daniel Lalonde, CEO of Vita. I think I met some of you after a month, I started last year in Copenhagen. So I have a year since that time period. What I wanted to present to you today is 3 things, just a point of departure, where we're at today. how we've begun to lay the foundation for profitable growth and then talk about some -- the path forward, some of the big levers that we've -- and the choices we've made to grow our business in a very profitable way. All right? So let me start.

This is our [indiscernible] debt because it's a little our mission of what we do at Vita. We build global iconic and desirable brands across high-end Homeware where we're the leader today. and find branded jewelry through [indiscernible], rooted in craftsmanship, material expertise in design, what we do at the core of our business, creating products people live with and collect Think about the women, mugs and many other examples and shaping everyday moments and lasting relevance.

So this is what we do. This is our mission. This is what we do every day when we go to work. We have 12 brands in our portfolio, and we've organized them into what we call 3 brand houses. And the brand houses are captured more from a design aesthetic point of view and the first house being the house of Danish design icons. Here, clearly, it's [indiscernible] Jensen and Royal Copenhagen, defined by timeless Danish design, refine, sculptural, everlasting, pure enduring. This is where this business unit is housed in Copenhagen. Then we have the house of Nordic design Living, which is here. with beautiful brands that you know, the 5 of them in this house.

And again, built on Nordic design DNA for everyday life, simple, warm, functional as all these brands do, and they're headed up by Head of Business unit here. And then last, the house of British and Irish design rooted in British and Irish design heritage character, craftsmanship ornamentation, contemporary renewal, et cetera. So these are design attributes and DNA codes that guide the development of these brands within these houses. So that's how we've organized ourselves. And it's also how we organized in the company today. So I have 3 business unit heads, each of these 3 houses.

At a glance, Vita, during presented some numbers. I'll go very fast because you probably know these numbers. If we look at LTM numbers to Q1 this year, so EUR 613 million in sales, comp growth, which is an organic growth of 4%, which is good, green shoots margin, which we'll talk about a and we're about 5,000 people in the world. If I dissect [indiscernible] by our company by brand. So Gary Jensen is our biggest brand, followed by Ral Copenhagen. Wedgewood tala Waterford, [indiscernible]. These are 6 core brands. So these brands represent roughly 88% of our business. So we've got to get the by category, I think it's the first time we show we're mainly centered. I've taken jewelry, which is Jensen, the only brand playing in high-end jewelry. If you spend out, our biggest categories are tableware home decor, drinkware and serve wear, which is the core of our business. We have other categories, but they're very, very small today.

By channel, again, as Jyri explained, we're mainly D2C-oriented about 53%. And interesting to note is the second biggest channel is e-com, which is also one of our most profitable channels and one of the fastest growing ones as well. And then by country, I think we've always given sales by region. So we've split it up a little bit more by country. So our #1 country in terms of sales is Denmark, followed by Japan, Finland, Sweden, China, U.S.A., Australia, U.K., and again, that's about 80% of our business, these top markets. So that's a little contextual of where -- what is Vita today, and I'll show you not an explicit detail like this of where we're going, but I think you can get a hunt of where we're focusing in the future. So our core brands, the 6 largest brands in our portfolio today are the following.

I won't take you through them all in detail. The key message here I wanted to say is that our 6 core brands play in all of the homeware, high-end homework categories. So we play in all those 4 or 5 categories that I explained earlier. We've also worked a lot in the last 6 months to sharpen positioning of each brand. For example, Garet Jensen, which we've defined and position as the definitive Innis design house founded on silver with collaboration at [indiscernible], finished design brand creating crafted statement pieces every day design icons and so on and so forth. So we've sharpened the positioning of all of our brands. In terms of presence, we're print in 80 countries worldwide, and we produced roughly 60% of what we sell. Through 9 different manufacturing sites that you can see plotted here. There are 2 of them of which are in Denmark. From a distribution number, not value, we have about just under 1,000 points of sale in our DTC channels, mainly in concessions, which are operated in department stores, large department stores, where we run the business, the inventory is ours and the sales associates are ours. freestanding stores and outlets about 80 of each, maybe of those stores. In wholesale, roughly, we try to count them every month. We have roughly 11,000 points of sale in wholesale globally, and that's for all brands, of which about 300 e-tailers, so just wholesale partners that just play on the online space. So that's our footprint today. Where do we play? I presented this chart, I think, last year.

We play in the high-end homeware category. Now this is a result of some framing of the market by Bain and [indiscernible] shows that the total luxury and high-end business worldwide roughly $1.5 trillion. Our category is pretty small within there. We're about a EUR 6 billion industry, high and homeware. And of that $6 billion, Vita brands, 12 brands together, we are the market leaders. We have a roughly 15% share of that market. I put in color as well the branded fine jewelry, which is a bigger sector, of which we're a niche player with Gara Jensen today. So how is this homeware business and homeware evolved over the past years? It was negative growth for many years from 2000 to above the mid 2015, '16. But from '19 to '25, it grew roughly 3% per year. The last 3 years have been relatively flat in growth. We have -- as we posted, as you've showed a little while ago, we posted a growth of roughly 3% last year on like-for-like sales.

So we clearly gained market share last year, which was which was very good, and we are very happy with that, and that we'll continue to do every year. So that's a little bit of the context who we are, where we play. I wanted to share with you now some of the work we've been doing to lay the foundation for this -- for the turnaround. So here again, just to sit into the context, you can see our sales trajectory historical over the years. The light blue here is the like-for-like sales and the dark blue is the addition of Gary Jensen.

So you can see it's been a negative trend in like-for-like sales since '23. Our EBIT you've seen before, I think it's important to stress by 2 things on the EBIT. We've had lower volumes than expected overall and that we have made conscious effort recently and at the end of last year is to produce less to produce less because we're very focused also on reducing our inventory, which is quite large and the number of days of inventory, and I'll show you a picture about that later. But we've had some green shoots, or some blue ones here that we're showing. Over the past 3 quarters, we've had like-for-like growth, like-for-like or comparable net sales growth. And it's been good growth. The quality of the growth has been through successful launches of line extensions to a lot of our key collections. It's been through a reallocation of assets and resources going to more profitable brands, more portable channels, rather than averaging everything out. We made some very deliberate choices and many other activities as well. So it's been high-quality growth. It's not selling obsolete, for example.

So we're very happy with this. And clearly, we have to continue for at least the next 4 years and then beyond. We've also announced in February, restructuring, reorganization to rightsize the business, that's on track. In fact, we're slightly ahead of plan this year. So we have a very new and simplified org structure, that's already into effect. And here, it consists of 3 business units, the heads of each of the houses and then 6 global markets -- it moved from us and 9 global markets to 3 and 6. We also rightsized and selected several manufacturing and distribution sites. In Denmark, we've consolidated some of our sites for [indiscernible] and Royal Copenhagen, the very hand of them. In the U.S., we're in the process of moving through a 3PL in terms of logistics. And our Crystal factories also, we've reduced some of the cost base as well. So we're not sitting idle. There's a lot of movement happening to make this happen. Let me go back. I have a funny cryptic on my slides, but that's okay. We're also a brand-led organization that super, super clear. We have incredible heritage brands. and the brands and the houses, the head of the Brand Houses are responsible for the future. They have antennas to the future on strategy, the product strategy, each customer experience the markets, execute the brand [indiscernible]. So it's a very clear matrix with very clear responsibilities. It's made us as Yuri pointed out, may able to go faster, more agile and to really hone in on the biggest opportunities. This is one of our biggest challenges because we have many brands, many markets, many channels, and it's about focusing on the big wins. We also have the plan that we announced in February about a restructuring plan.

Worth roughly $28 million of savings and the run rate will start at the -- we'll be there at the end of next year at a full run rate. We're not going to stop there, obviously, and these are people and also nonpeople costs. So one of prioritize issues that we have done recently is to prioritize our brands. Not all brands are equal. They're not all at the same level of their growth. And here, we've bucketed our brands into 3 categories: the global accelerators.

Three brands. [indiscernible] has just made it in recently. And these are brands that we feel are ready to scale. And here the access just so that you get familiar on the y-axis, you have the relative financial performance and through different criteria on the x-axis is the potential to scale. They have the right product, they have the right brand awareness, likability, distribution, we're ready to scale. So these are the 3 brands where we're investing in to grow and they've been performing very well as of late. We have regional leaders, very strong brands, but that operate in a few markets, 1 market or 2 or 3. And they're very profitable, as you can see. So this is great.

So there's a discipline -- an approach of disciplined local execution, look at Rostan, which is celebrating 300 years this year, it's having an incredible year. It's great. And it's where it should be. Then we have the brand resets, which are 5 brands, which need to do a few things to revitalize the brand and the desirability and also get to the right level of profit before I scale them. So we don't want to scale a brand that's not as profitable as others. So there are steps to get there. When they get there, we will scale, but not until they get there. And what we are doing with these brands, just a little more color on the brands and the brand reset. I've taken the bigger ones, Waterford and Wedgewood, is we're rationalizing the product offer into much fewer collections and SKUs. And I'm talking about like 50% less.

So we want to really focus the collections on the ones that our strongest to line extensions, activate them and make them successful. We're also developing a new price [indiscernible] to the Waterford line, which is an entry-level called Marquee. So there's a lot of working down the portfolio. on the product portfolio and number of SKUs. Markets, we're focusing on 2 or 3 priority markets for these brands, get the proof of concept and then extend. And last, and particularly for the Crystal factories that I know you know quite well is to align such capacity and capabilities with demand. And here, we're doing 2 things. We're optimizing I would say, the costs at the Crystal factories to date and also have very clear strategies to increase volumes into those factories, not only on Waterford or Marquee as the entry level to Waterford, but also on brands like Ragasa and brands like the B2B business from Ragasco as well. So there's very, very clear plans. It's a very clear strategy. It will not happen this year, overnight. It will be something that will probably have a clear multiyear plan, but probably in the next couple of years. to reset and then obviously then scale.

And the last point I wanted to talk about is inventory has been such a big issue for us. Here, we're plotting a chart on the days of inventory with a lot of history from 2020. So you see it has gone up. And we've only seen an inflection recently. Since Q2 last year, we're very, very, very focused to bring our inventory levels down and as a result of the days of inventory. All my leadership team have inventory and DOI as a big part of their bonus this year. So we're very, very focused on it and it's very material to all of us. What we've done is we've scaled down production to match demand. We've done that in Q1.

I think we explained that. We have programs in place to sell some of our obsolete inventory. And again, it's not an average. Some brands are very well, doing very well. Some brands don't have enough inventory. But the ones that do have too much, we're really focusing on that. And then obviously, we have to look upstream to reduce the complexity of the collections. So there's a lot of work going on on that, not only for Wedgwood and Waterford, but for the entire brands in our portfolio. So now if I project forward what's our path forward. There's a few trends that we see in our sector that I would call more tailwinds today. The first is -- and I go over these quite briefly is still this concept of cocooning. I think People are spending more time at home than they were 3 or 4 years ago. And that is a positive trend for us. There's the rise of expertly which is in and out of home, which our products are used for these experiences, either in the kitchen, in receiving guests at home, et cetera, et cetera, and in the B2B channels, too. What we've seen also is a lot of the luxury houses stepping into the home category.

And we think that's good. We think that's good because this -- we want to grow 2 things, right? We want to grow market share within the high-end here. but we'd like to grow the pie. They want to go to a pie and [indiscernible] of the pie. And this definitely helps grow the pie. And lastly, we see a big trend in gift giving at the high end and a lot of our brands are very proactively involved in creating gift-giving moments. It's more than 1/3 of our business. We estimate that is all about in gifting. So we have a house as we're in the high-end homeware category, I won't take you through all the details of the house. But we have 5 or 4 pillars to drive profitable growth that why differently to all our brands in our portfolio and the different houses. The first is about enhancing brand desirability. Without brand desirability, which is mainly driven by product, great desirable products and winning on social media, we need to start there. That's the essence of what we do. We have pillars and initiatives around building and expanding our distribution, about driving profitable channel mix and brandization. Brandization, I mean, mainly for the wholesale channel, when you go to our wholesale points of sale. We don't want to be displayed by category. We'd like to create shops-shops. So you feel are walking into a wholesale partner into a Royal Copenhagen environment into an ETLA environment.

That's super, super important for us in wholesale. And last, we want to lock high-value revenue streams, and we'll speak about that either on B2B and the gifting part. So these are the actual pillars of our house. If I had more time, I would take you through all of the sub pillars and the enablers, which are super, super important to us. What I thought I'd do is I just would give you an example today of a an activation that we do within each of the 4 pillars, okay? So it's not exhaustive. It's just a few examples to highlight what our teams are focusing on. So on brand desirability, One of the essence there is about creating desirable products for the future and icons. So how do we build icons. And this is where our focus is today. So we start off, for example, in Gyor Jensen with a beautiful piece designed by [indiscernible] 1938, a coffee picture. Beautiful. Great. But we're not going to let it stay there. So what we have done over many, many, many years, every year is we've built line extensions. We go to Candle stakeholders.

We go to Cutlery Bowls, tableware, glassware, coaster. I have a beautiful toaster at home and a kettle, beautiful products that was just in 2024. So every year, we activate it. We bring line extensions, make the franchise stronger we advertise it, we bring it into stores and create this space for [indiscernible]. It's really, really important. Now you can tell a [indiscernible] product, which we have some here, just by the shapes and the lines that you see. It's recognizable. And guess what? It's by far the largest collection within Homeware at Jensen and it's the fastest growing as well. So these are some of the approaches that our teams are working on. And we have many icons within our portfolio within all of the brands. I just gave you 2 pictures here. This one, you know all very well, celebrating a big anniversary this year, the [indiscernible] designed in 1775 as well as an icon, but they need to be enriched and the story needs to be told in many markets, they are discovering these icons as well. But not only important to work on and to build icons within our existing product offer, but we need to create new icons for the future, and this is what the teams are working on. The new Bernat for the future, the new Alto base for the future. And we have across our 6 core brands, 6 creative directors.

Their main job is to do this. So that on the product side. On the second pillar, which is our distribution. We have a very, very disciplined approach in the future that leverage the strengths of being a multi-brand portfolio. We are much stronger being 12 brands, then on brand, and I'll show you why. The first priority is prioritizing and focusing and selecting the key markets where we want to win. That means not selecting many others. At an aggregate level, for our group, we need to continue to win in the Nordics. I include Denmark in the Nordics. These are great markets, historical markets. We need to continue to grow there. We think there's a lot of potential for our brands and now in Japan and Korea. So these are priority markets. And we're resetting the growth model in the U.S. and China.

We've had -- we've invested a lot in those markets, but we're changing having an inflection point on the model. An example is in China, we had a very strong approach on D2C stores, stores, stores and Tmall as well. And we've changed that a little bit to stress more profitable growth. So perhaps less stores, more distribution on wholesale and reducing a little bit the investment that we do on Tmall. So there's been a reset in the growth model in those markets, and it's showing some very, very tangible results. We also are going to strengthen presence in what we call the priority cities. There's 20 of them that we've identified throughout the world. and make sure we make big statements in what we call cathedral doors.

Cathedral doors are [indiscernible] K because I'm in Finland, Stockman, all these doors that receive a lot of traffic and our consumers, we need to make a big presence there globally. Second is leveraging the portfolio. So here, there's 2 big ideas. The first one is about bringing a new brand to an existing market where we can do that. So Korea, for example, [indiscernible] is not present in Korea today. Roll Copenhagen is very strong in Korea today. We have all the distribution that we need, all the key influencers, et cetera.

So we can leverage the portfolio and bring Janssen to Korea, and we will. [indiscernible] to Denmark, the same thing. So there's many examples of how we're making this happen. And also because of our portfolio and our strength with our key partners, we're able to leach that into, I'd say, commercial advantages, which is about having better spaces and better conditions, let's say, to transact.

Last, there is -- there are white spaces out there. We're not going to tackle them in the short term. There's a lot to do now, but there's a lot of opportunities still existing in the Middle East, which is mainly the United Emirates, Saudi Arabia, not a great place right now, but we just had started before the crisis with Jensen and Royal Copenhagen to an incredible start in that region with the best partner. But there are other areas like Southern Europe, Southeast Asia. These are markets where we think there's a lot of potential, but we're not ready yet. So these are more midterm markets for us. Third pillar is about driving profitable channel mix and the brandization here, there's a different point of focus.

So we want to really emphasize and choose 2 markets or 2 channels, which we think we have most potential and which are the most profit accretive ones that we have. And that's wholesale, again, with the strategy of brandization that wholesale and e-commerce, which are great channels, e-commerce is our second channel after wholesale. We're also in the process of having a common platform, Shopify. We've already put 2 brands on Royal Dalton and women, and we have a plan before the end of the year at the beginning of next year. to bring all of our brands and markets on the Shopify platform, which will have some great, great, great synergies for all our brands. Physical retail is still important. We love physical stores.

I love physical stores. but we have a very strong ROI lens on them going forward, i.e., if they can't meet a certain profit target, 4-wall margin target, then I prefer not to invest in building the retail stores. So there will be some, but perhaps less than there has been in the past. And last example is about unlocking high-value revenue streams. Here's a lot about gifting. So we have an annual clock in each country with the key gifting moments. We're activating all of them. Part of it is to reach new consumers, more frequency and to a little bit deseasonalize as much as we can our business by having a lot of gift-giving moments at the beginning of the year.

We have a lot of examples here. I put one really fresh one. Royal Copenhagen fully did a Mother's Day or mother Mag, launched it 10 days ago, boom we sold out. We should have planned a lot more. So it's a massive success. So we're trying to get back into stock today. [indiscernible] has had some of the similar examples. So these are great examples of gift giving in the first half of the year with our beautiful brand portfolio. So how does this work? We tried to give a small example to say, how does this -- how do you put this strategy into action. And one of the examples we used here, I like to use here is about Jensen. As you know, we acquired Jensen in '23 around this period. What we have done since then and particularly in the last year, on product, a real strong focus on the big 4 franchises and collections of Jensen Home.

I talked about better not do, but we've done the same thing with COBRA, with Bloom and couple. So a very strong focus on enriching these collections. We've strengthened the priority markets, really high-quality doors, few markets, but we went in full steam in them. We've also changed the equation or redirected the equation in terms of channel mix with a strong focus on wholesale and e-commerce, and we have closed on profitable stores. If a store [indiscernible] profit target, and we have very specific product targets, our return on investment and 4-wall margin, we don't want to be there, simply put. So we've done that turnaround. And then the brand has created a lot of gifting moments, wine and bar is one example of a wide in bar set that was launched recently.

So all of these actions together has led to some pretty incredible results in the past quarters. It's our fastest-growing brand today, which is great. It's also our biggest brand. So that's how we put our strategy, our 4 pillars into action. So as us presented his chart at group level, our sources where we're going to get the investor on the money from to redeploy into areas that we want to grow SG&A is a big one. We talked about the savings program of $28 million it's people and non-people cost. This is a very, very important initiative for us. Again, that we're slightly ahead on the channel and product mix. So we're shifting our energy and our attention to higher profit channels and categories. And that's a very important part. We also think that's where there's most upside revenue as well. And last, turning around the reset brands that I showed to you before, will give us source of funding to redeploy into what, into building brand awareness and desirability, which is our most important pillar to fund also the journey of the acceleration, the global acceleration brands. and last to drive growth in the priority markets, but also to fund midterm the white space markets where we think there's a lot of potential.

So what does it look like on the top line growth over the next 4 years? Again, this is maybe a simple way to look at it in a simplistic way. But from a brand point of view, a lot of the growth will come from our global accelerators. It will come also from the Nordics and Japan, could have added Korea there, and it will come from wholesale. Not exclusively, but those are the big chunks that heritage codes DNA, our foundation story, and we are the leader in high and homeware.

We also have a very beautiful niche position in jewelry. We've made some choices in our plans for the future. Some important choices to go through focused collection priority markets and channels and brand choices. Not all brands are at the same level of their path for growth. And the turnaround is underway. As mentioned, it's early good signs of sales recovery, 3 quarters of like-for-like growth. which is good and expect it to continue for the future. And then all the restructuring efforts that we've made, we expect to see some meaningful results starting from H2 this year.

There you go. I hope I didn't pass too much of my time, I see.

No. Thank you, Daniel. You're okay on time. So no worries. Now we have time for some questions. And just to remind you, we have the joint Q&A in the end, but we can take some questions already now. [Operator Instructions] At least Maria over there.

Maria Wikstrom. Thank you very much for the presentation, Daniel. We indeed met a year ago, and then you've been 1 month in the business. And I mean, I know that you're a fast learner, so I could have asked the questions then, but I think I hold myself at that time, but now I would like to ask you that what has I mean with your experience on multiple consumer brands, what has surprised you, I mean, positively or negatively when you joined Vita?

Okay. Well, that's a good question. That's not Well, a lot of things. I think what surprised me positively is the depth of each of the brands. If I turn them all over, they've just an incredible, incredible heritage story DNA and that their perception from our consumers are still very positive, which is great. So none of the brands I thought I discovered were affected, I had a bad into or bad likability. They were all there. What they need to do is to renovate, innovate, become more modern, I need to bring in new designers to inspire from the past to make products for the future. So some of them needed to be revitalized for sure.

But that the that I was working with that we are all working with were great brands. So we just need a rejuvenation. So that was good. That was really the positive thing. The negative. Okay, I have to be a little careful here. I think it was we're already complex, right? We have 12 brands, 80-plus markets. We play in all channels. The brands are out live of a different level of their growth.

We have 9 factories. So all that for EUR 613 million. Wow, it's easier for one, right? One brand, 1 channel that level of sales. So I thought the complexity, we also had a lot of internal complexity, I thought as well on how we went to the market through organizations, through structure through ways of working, et cetera, I thought it was already a complex mix that we have, so we have to make choices, but we -- I found a complex working environment, which again, didn't give like what we want, just speed, clarity, agility who's on first, who's responsible here, who's setting the tone and making this matrix work because I think we're set up as a matrix is the way to go because we have so many markets, so many channels and brands that are almost global.

We just have to make -- take the benefit of making a beautiful matrix work in a very agile way. So that was probably the -- I don't know if it's negative, but it was -- we complexified our ways of working in an already complex situation.

And then I had a second question on the profitability and the profitability target as such because I think you were given much tougher job, I mean, compared to Steffen.

Thank you very much for saying that. Yes.

Leave the profitability. My question is that, I mean, would you reach the profitability target by disposing, I mean, some of the brands from the portfolio.

That's -- Yes. maybe -- I guess I can answer that this way, that all not surprise to you, the P&L of all brands and the EBIT of all brands are very different very different. So yes, to a certain extent, if there was some -- that didn't impact the overall overall profit, the way it is, perhaps, but today, that's not my focus. That's not our focus. So my mandate is to turn around these brands accelerate these and the regional leaders maybe add 1 or 2 countries. We'll get there through a lot of initiatives, but the key ones are the $28 million program that we talked about earlier.

We're not stopping there. We can't stop there. So that's just now and then we'll come up with a lot of other initiatives going forward. And I see -- we see with my team where those cost savings are as well. That's one thing. And the second one is the choices we make. It's super important to make the right choices. So we're choosing not to add new categories, for example. That was something we had done in the past. It's very meaningless in terms of top line. It was not margin accretive. And it took a lot of time from my teams, my creative teams to add new categories when instead better to build on what we have and make the core much stronger. So that's a profit that's a positive on profit. The channels as well. We had a very strong focus in D2C. My most profitable channels are wholesale and e-comm. And guess what, my customers are there as well. So there's a big shift in channel mix as well.

And then brands chosen which ones we fund, which ones we fund less. But every -- they're almost all funded equally in the past, not from a euro point of view but percentage of sales. et cetera. So it's about, I think, making also all those choices for what we think is good top line growth, but also more profitable top line growth. So I think we get there that way. and thanks for saying what you said at the beginning. Sorry, Steffen.

Do we have other questions? I think, yes, at least there in the back.

[indiscernible] Hacke from D. Carnegie. I'd like to also touch on the same profitability topic for the business. So the matter is improving top line and fixed costs as the gross margins are already at a quite high level. So now you expect the significant restructuring savings by 2027. But the growth strategy, as I understand, is presumably also on the spending on the marketing based on your actions to make the brand more desirable, optimize the channel mix and being more selective distribution. So my question is that how much of these savings will actually improve EBIT versus being reinvested. And if the revenue growth is weaker than you expect, is there a limit on how much you are willing to put more as on the SG&A side?

Okay. To put more watt on the SG&A on the last...

More spend, more ammo on the SG&A. .

Yes. I think our spend today on marketing overall, if I take marketing, but there's some CapEx but a few stores. not much. It's already a decent level on aggregate. If I compare to luxury industry, we're maybe a little lower if I compare it to more accessible luxury and other high-end industry work in the right zone. So what we're doing is we're just investing those differently, putting a lot more on the bigger accelerator brands, less on the reset brands. So there's some of that. I think the SG&A plan we have in place is strange because I had the question from my team saying we're producing, I don't know, personnel costs by x. So my team has to do much more with fewer people, and my answer is no, I've taken a lot of the friction out of the system to simplify things. So there's less decision makers. You know who's responsible for all different items of your business, the decision makers, et cetera.

So I think it's healthy anyways on the SG&A journey that we're going on is a healthy 1 that I would have done anyway because I think it makes us faster and more agile. And it's also -- it makes the teams focus on what the thing -- on the must wins, what we need to do rather than doing a whole bunch of things. So I would have done that. Now if there's a point in time, and I'll have to talk to Erie and you usually at 1 point in time where we're continuing to accelerate, again, 1 or 2 brands, and we see we can even go faster. Clearly, we will make that happen. I will ask for more investment, but after we have proof of concept in it. But I think we're able to do that over the plan. And I feel like some of these brands on the global accelerators are already showing some really, really great signs. So last thing we want to do is limit their growth. We want to keep feeding them because they can become much larger. So I think it will be a very dynamic process in the future. But the SG&A would do anyways because I think it helped -- it's going to help our company focus and create less friction than we may have had in the past.

Okay. I think we still have time for at least 1 question. We have one. There.

[indiscernible] from Danske. I wanted to ask you on the market growth on high-end home wear. Do you mention that there was a 15-year period of negative growth. from Millennium onwards. Then a little bit of growth, I guess, driven by corona Boom, I guess, and now 0 growth for the past couple of years. What are the main drivers for that historic and what do you see for the future? And how that tallies up with your own growth ambitions in the market?

Yes, that's a good point. SP1 I think a lot of industries and a lot of sectors in the high end over the past years have experienced tougher growth in the industry. If you look at the luxury industry, look at the beauty industry, I think there's been a lot of deceleration in the past couple of years with a spike just post COVID. And the growth of the 3% that I was citing was from '19 to '25, okay? So it was a bit a wider period. I think part of our challenge as an industry. Here, I'm going to say that as an industry, how do we make the pie bigger is that we need to innovate more and create incredible products for a younger generation. millennials, younger people love to collect. We think also in the categories because it's not each category will not grow equally, the ones that we feel has the most potential is the home decor category. Frame spaces, all kinds of objects for decorating throughout the home. We think that has the most legs going further.

But I think it's been a little bit of the supply, the demand is more of the supply, I think we need to all be much more creative as an industry and put incredible product proposals to our customers and aim for a younger customer. With some of the tailwinds and the trends coming up, we feel -- I feel very strongly that the pie will grow. And obviously, we need to make ours a little larger. I see what some of the other brands in our industry are doing. There are some good things happening. And again, the fact that luxury brands are doing table were now or doing glassware -- some of them call us to help them. I can't say who they are. I think it's a good sign because I think about it like the luxury shoe industry. I don't know if you have any of you followed that.

But when the luxury brand started and high-end brand started to enter also the luxury shoe industry, the whole thing blossom and they created a much, much larger category. There's been many examples of that in other industries. And I think that's about what's going to happen to ours.

Good. And just to remind you that we can take more questions than in the end of the event. And any questions in the chat that are related to other presentations, don't worry, we will take those in the joint Q&A. But now it's time to take a short break. And I think now we have time for a 15-minute break. So we will be back at 223 finish time. Thank you.

[Break]

Hi, and welcome back to Fiskars Group's Capital Markets Day. Now let's continue with the agenda of today, and welcome Dr. Steffen Hahn, the CEO of Business Area Fiskars on stage. Go ahead, Steffen.

Thank you, Essi. So good afternoon. Good morning to the West, also online. Good evening to the East -- my name is Jeff Han, and I'm the CEO of the fiscals business area. In the next 20 to 30 minutes, I'll talk you through the plans we put in place to drive our business back to profitable growth ahead of inflation. I will cover 3 areas. I'll first give you an overview of our business structure. Then I'll talk you through our growth model and then about how we plan to scale our plans to drive sales, profit and cash upwards. So let's look at the first area. We have a world diversified footprint. We are present in various subcategories. Gardening is about half of our business, crafting a fifth, what you see on the screen outdoor, that's the sixth that is our GABA brand. and then cooking attend. We have all year around relevance, we are skewed towards spring, but we have all year relevance with gardening and spring back to school and summer, access and fall and snow tools and winter. When you look at our channel mix, we have a decisive wholesale model. 95% of our sales we generate with our partners, retailers and distributors. The DTC part that you see on the screen, the 5%, that is 2 specific channels.

One is gabagear.com. That's our online channel for the GABA brand in the U.S. The other is through our sister business area, Vita, our cooking and crafting some of our cooking and crafting business that we sell through the Vida stores online and off-line. When you look at our country footprint, we have a very balanced distribution between both sides of the Atlantic. The other side down to the Pacific. So we have about 50% of our business in North America and the other 50% is in Europe and Asia Pacific.

On the screen, you see 25% rest of world. What's in there is also mostly developed markets. However, we do have an expert organization with a relatively wide reach into export markets as well. I just had the privilege this morning to meet 25 of our distributors that happen to be here today that are also representing a large part of other countries. We're reaching more than 40 countries with that organization included. So this is our business, but now I have a question to you.

Who of you -- first of all, those that are online, please follow along, but those of you who are in the room, please show hands. So who of you is somewhat passionate about cooking not eating, cooking. Who of you is passionate about gardening. Okay. That's the majority of our business guys come on. Who is passionate about wood splitting? You're using the at least on okay? Interesting gender bias here.

And then lastly, who view is passionate about crafting, decorating, quilting, tailoring, Okay, so quite a bit. So I want you also online to think back to that 1 moment where you did the perfect cut. Now if you're cooking an onion, that last one, we just cut all the way perfectly symmetric, no flipping over pruning in the garden. You had the thick branch that you could barely fit between the blades. And then we did it all the way through that kind of superherosensation, performance, gratification or when you use in X, there are quite a few that user, that big log, lots of branches, you hit it and it just splits on the first strike on crafting, when you have think material like leather or cardboard or like wobbly piece of clout, and you're very concentrated, you don't want to mess it up, and it cuts perfectly all the way to the tip.

Net sensation of performance and satisfaction that is what we work for in the viscose business area. And that is what unites us Gerber and Fiskars our cutting competence. That's what we are about. So now let's look at the service network that we have to bring the sensation to our consumers. We have a factory in the U.S. in Portland for Gaba, where we produce predominantly knives, and we have 2 warehouses, 1 in Canada and 1 in the U.S. In Europe, we have 2 factories in Finland. One in [indiscernible], where we produce our cooking equipment and on bills scissors and Access. And then we have a factory in Poland and Slupsk where we produce primarily gardening towards. We have also 2 warehouses in Europe, 1 in Finland, 1 in Poland. And then if we look to the Asia Pacific region, we have a warehouse in Australia.

And we have contract manufacturing in Southeast Asia and China, where we complement the amount of products that we produce ourselves from countries like China, Vietnam, Cambodia. On the next slide, I'm highlighting a few strongholds that we have Garden cutting Prunas, Lopes, 3 pruners we invented -- Fiskars invented the current form. Then we have adult and kid sisters and crafting tools. We are a market leader in this space. And then for GABA, Knifes, Kaba is 1 of the companies in the Mecca of knife in Portland. But half of -- about half of the business of Cerba is also in multi tools, nice and multi-tools, that's a stronghold for us.

And of course, I should add our X business because we have a number of consumers that's not me saying it, legal disclaimer. We have a number of consumers that do say or tell us that they believe we have the best access in the world, and we are very proud of them. When I started, beginning of '24, and you saw some of the numbers from our earlier, I made it my mission. After this development made my mission to improve the structure of our P&L. The green line is our EBIT margin. The orange line is our sales in absolute. I made my mission to structure the P&L so that we free up resources to invest more in innovation and in media to tell people about the wonderful fronts we have while delivering good profitability. And while the orange line tells you that it's not sufficient, we've actually made good progress.

In quarter 1, '25, we grew 3% organically. Unfortunately, 2 days after the quarter was finished, tariff hit us, and that was a double-digit million hit for the fiscal PA. In quarter 1, 26, you saw the results recently. We defended that sales level despite the rand was starting on February 28. And that what I dare to say, is pretty spectacular. EBIT margin. We have successfully moved resources from cost to invest. And at the same time, we were able to deliver strong profitability and cash. And we will continue to flow through. This will fuel our growth model. which you see on the next slide. So the growth model. Our growth model is very simple. Innovation, distribution and media, or differently said, we want to bring more products, a wider range of products to people that they can buy in more places where they shop. And we want to increase the audience we tell about that over time, more products in more places and telling more peer about it.

This model has started to deliver benefits. We have an upgraded status with our customers, they see supporting. We have increasing interest in our products from consumers, which we can measure in such volume and click-through rate as an example. And as a result, I'll come back to that a little later. We have gotten some great feedback on pretty much all the things we launched in the last 12 months, which is an effect that we've been working on since the beginning of '24. So let's look at this model and its components a little more closely. Innovation is our lifeblood. When I started January 24, within 20 days, not even 20 years up to 19 days a global leadership team here because it was very obvious we need to do more in this area.

And so I had a 2-day workshop with them to discuss how are we getting more innovation out the door and on the street to support net sales growth. And now in '26, we start seeing the benefits. If you look at the net sales value of the innovation we are launching, which is, of course, a bit overcast by the external environment that has more than doubled in the last 24 months. And we have pipeline built that we are now continuing to execute against to again double that.

Here, it says 3 years, but our ambition is to be in the next 2 to 3 years. Net sales value from innovation, it's early but have our recent launches been successful. Yes, what we're seeing is very positive feedback from the consumers. You see some of the rates here. But it's very exciting to see to hear the consumers talk about our products and also our customers, what we get in terms of feedback. In a moment, I'll come back to power tools and show you the video that we'll have there, but that will in about a minute and before that I cover a bit of the other sessions the other launches as well.

So we've gotten very good consumer feedback, and we're also able to build distribution. The one thing I would wish is that we are able to build distribution faster. You all know about the macroeconomic environment, which understandably drives our retail partners to very conservative behavior. Retailers are very focused on minimizing working capital and they're also very focused on trying to keep costs down. For example, expensive shelf rebuild I try to avoid. Given that we have seen the results of our launches and that we now have data evidence that moves that they are successful. I'm, however, optimistic that we can accelerate that buildup in the future, particularly as we have fast follow-up.

So you see on the very right side of the slide, you see that all the spaces we went into, we now have a follow-up to further build and expand so that we have a launch and leverage model similar to what Dan shared with the [indiscernible] example.

So we have plans -- we have plans in place to continuously scale our innovation pipeline and to accelerate our distribution based on data evidence we have in the market that what we've launched has been working. Retailers that did support us with the distribution sellout above our expectations. It's probably interesting for you to know. So let's look at one example, the power tools. It's very exciting. We now have 5 SKUs in this space. For products, on battery. You see the battery here. That is also powerbank currently charging my phone has a USBC port. It's a unique feature in our industry, and it's only 1 battery that fits in all our products. So we are the only one that can truly say we have only 1 battery now and for the foreseeable future. So let's look at what consumers have seen ever since we launched these products in spring.

[Presentation]

Thank you. So that's what we had Liver a while. And I think this is a showcase of what I believe truly sets us in our industry peer group apart. Our capability to do product design that is intuitive, high-performance highly economic, which for professionals is very relevant. Economics lead to less health issues when you're excessively using the products during the day. And also esthetically pleasing. Our product design team is highly decorated. The Red Dot Award is the largest design award in the world, and our team has been awarded 67 times to date. This year alone, we won 3 awards, amongst others, the highest distinction, best of the best for new power products. We are doing this for the first time. There are other players in the industry that have done this quite a bit. And it's quite remarkable what kilo of a product we were able to launch in this space. I'm very proud of my product team. So that was innovation.

The second point I said earlier is that we want to bring more products to more places where people shop. We build presence where the shoppers are. We focus on driving conversion by improving our shopability online, off-line, and we take responsibility for traffic which our retailers look for, particularly when the consumer sentiment is low. This is reaping us benefits. We have a wide range of solutions for our retailers.

And because they acknowledge that, in turn, we were able to build net distribution points. So the number of doors and the number of SKUs per door is net increasing for us. in a market environment that is rather suppressed. And we get a higher status with our -- as a supply with our retailers. Retailers have classifications internally of how important you are to the current business and also for the future. And these upgrades give us more bandwidth with our retail partners to further fuel momentum and build our joint business together.

The last element of the growth model, I said is media. So brand management, marketing and then putting our assets out with media. What you see on the screen is some of the results. We've overhauled our brand management and media organization and our approach to it in the last 18 months. On the right side to you, you see the results on what's here, which is called a view through a 65 [indiscernible] is when you're on YouTube and you have the option to skip the video because you know that just that, how many people do that.

The benchmark says that above 40 is excellent. All our 4 last launches have achieved levels above 60%, which is extraordinarily good. We talk with the guys from YouTube and Google. They were checking the numbers if that can be true. For us, that means 2 things: a, we are in cats that are emotionally engaging. So people have an interest in b, we, with our advertising, are striking enough for the consumers. So they find what we show relevant intriguing so that they hang on. That's the quality of our advertising and what we put out there.

On the left side, you see the quantity. I said that we are here to build scale, reach a broader audience. This spring, in a number of markets and categories, we've achieved the highest search volume as far as we can go back higher than the covered peak. And as far as we can go back in most cases means under 2004, 22 years, highest level of search volume. That isn't sales, but of course, consumer interest is preceding sales, and I find that a very encouraging result. That was our growth model. So let's now look at how we are planning to scale for profitable growth and to further drive cash.

Our future launches are lined up to get to subcategories where we see intrinsically growing demand. So in-build tailwind, if you want. And I selected now 6 trends that provides ample of opportunity for fiscals. The most defining is probably the battery electrification of cutting tools, reducing physically demanding task, the effort for physically demanding task, particularly in the context of an aging population. The second is emotionalization and visualization. [indiscernible] active digital detox. We see, as an example, for these trends, a resurgence of crafting in the U.S., the crafting market is growing. So people try to actively engage and occupations that have nothing to do with screen time. And for GABA in the U.S., we see this fascinating hybrid of glamping and bush craft at the same occasion that we have a portfolio that we can expand and to cater for these trends.

The third trend is the growing professional market. So gardening services are on the rise. That means in turn that landscapers are an increasingly attractive target group because they are growing as a consumer for our business. And our current entry and presence amongst this group is underdeveloped, which gives us a great opportunity. The fourth trend, pet ownership I think, particularly for the analysts to 1 here is well understood. There are some interesting businesses in the space, focused primarily on petcare urbanization. You all know about this. even if it's currently paused, in general, there is an inflation in real estate prices, which makes people buy smaller properties. And you have the trend to more dense populated areas, which then further reduces the space available. And we cater for these, for example, with our [indiscernible] tools.

And then lastly, sustainability. There sometimes this question is sustainability really something that the consumers are interested in and willing to pay for. And I would say, yes, but the sustainability that the consumers are looking for, I would call, levis sustainability. Yes, people want lower carbon emissions. They want sell materials, they want compostability. And ideally, they would want to have things that leave no trace, but without compromise. Consumers want also more performance and more experience and fun and if you take the analogy of the car industry, electric or were really interesting when they had a faster acceleration.

You felt that you have electricity, which is better for the environment all in not going into details, but when it was the faster accelerating cost than the combustion engine, that's where it really became interesting. And for me, this is the trend that is also interesting for us. Leverage not frugal, sustainability. As I say, these trends create a lot of opportunity for us.

And we will increasingly add new subcategories to our portfolio to grow. Having said this, we're not talking our plans until 20230 for the foreseeable future, our base business will be the lion's share of our revenue. So we must not lose focus on that. And we are actively bringing leverage innovation to our existing categories. You've seen this with our new generation of original scissors with our Ultra access with dual action. So while we expand into categories, we will provide fuel to our existing footprint because we know that due to the scale, the lion's share also until 2030, this will be the primary source for us to generate profit from growth. How are we going after these categories and how we're commercializing them.So when it comes to new categories, we're looking for 4 [indiscernible] actually, 3 on the screen. Is the subcategory growing? - is it structurally profitable? One thing that's not mentioned here itself in this is it big enough to engage. And then is it also a natural fit with our brand equity. So we are looking for categories. And when you think back, pet care, ultra access, we look for things that build our P&L but they also need to help build our brand, what we intuitively stand for so that we have that [indiscernible] effect.

For existing categories, we are primarily looking for next-generation improved versions of our products. that provide a superior value proposition for the consumers in use for the retailers, category value and for us, financial value. All of this category we bring to market with a disciplined approach.

With a specific priority by market, and by customer that is broadly shared in our organization and everybody knows what's must win, what's Rocket, what's foundation, which is the internal classification we use. So how do we pay for this? As I said, I made it my mission to restructure or to structure to improve the structure of our P&L. So we have shifted cost to invest, and we'll continue on this path. And so what you see here on marketing, innovation, we want to double the impact we have in the market, double the impact from innovation, which we measure as net sales value of what we're launching and double the impact on the consumer, which means doubling the reach and the impact we have on the audience that we address.

We are funding this from 3 sources, gross margin. So all the categories we launched need to be gross margin accretive and all the things you've recently seen, we have launched just that. So every new launch that we had is margin accretive to the mix. We continue our COGS discipline, so bringing costs down. We look at our footprint. We've moved our warehouse from Poland to -- sorry, from Netherlands to Poland to shorten transportation ways, reduce costs. We are constantly reviewing our make-or-buy choices. So bringing our landed cost down is the second element, and then SG&A. Of course, there is labor inflation and other areas that we have seen.

But we have -- in the recent past, the '25 brought our SG&A down. And now we are in the effort to first tie it and then again reduce it as a percent of net sales. And the whole logic is that we basically find number of points at the gross margin and then give 1 point to the bottom line and the into innovation and media and then whatever else we can find in SG&A to accelerate our growth. So on cash, we are in a good position on cash. We have consistent profitability. We have a lean and disciplined approach to manage our working capital and our CapEx. Having said this, I see substantial opportunity to further improve.

On one hand, on our portfolio productivity, SKU productivity. The amount of sales and profit margin we generate on average per [indiscernible] which, by the way, is not only interesting for us. It is also very relevant for our retailers. They're looking for faster turn rate and for more SK productivity, too. So this is a complementary target where our customers and we have the same objective. And it also is beneficial for the shopper because if you have a tighter portfolio, it's easier to navigate and easier to shop for the consumer which means, on average, you actually see your conversion rate going up because it's not as intense to find a product that fits for you. That's one thing. So SKU or productivity.

The second area is terms. Supplier and rebook terms, supplier longer, retailer shorter. We're putting a comprehensive package in place now for the upcoming negotiations in fall, that will make it a win-win for us and our partners because otherwise, you might wonder why should they say yes to that, if it's a win, lose. We think we have a package that makes it attractive, for suppliers and for retailers to work with us on this topic, and we expect some benefits for the fiscal BA. And then the third area I already alluded to it a little earlier, is reviewing our footprint. We have already done things to shorten the conversion and transportation time.

I was just talking about the warehouse. We have also reviewed make or buy decisions. Some products are better done by others, not by ourselves. And in general, we are looking at how we are reducing our conversion time on one side, but also the quite substantial transportation time we have, particularly when we think about Asia to Europe and Asia to the U.S. So we've talked a lot about what we want to do with the business, but I also want to talk with you or I also want to share with you how we're developing our organization. And I've picked 3 topics as an update. The first 1 is that we want to increase the reflection of the market we serve in our own organization. the number of nationalities we have here in Health and in our headquarters in North America, close to Chicago for fiscus and in Portland for GABA because we believe it is of utmost importance that we reflect the markets we serve in our own organization to be able to deliver value propositions that resonates with the markets we serve.

The second area is younger colleagues. We've recruited younger colleagues before, but we did have quite a focus on experienced hires, and we're now shifting that focus slightly more to credits and young professionals. Digital native just have a more self-evident access to artificial intelligence and media than the average of the presenters today. And then lastly, women in leadership position. Our objective is that we reflect our workforce. We have 45% female colleagues and we want to see that number also at the top of the leadership. In the last 12 months, we had 1 point progress, and we are now at 39%.

So there's some room to go, but we are taking this very serious because we think, as I said, with the cultural diversity then the diversity is an important source of sometimes friction, but it makes us better because we consolidate various viewpoints in the offers we make to the market. So if we conclude and sum it all up we have a healthy cash and structural P&L., where we successfully shifted from cost to graph to fuel profitable growth, and that's a path we will continue. We've started to prove our growth model, successfully scaling the quantity and the quality of our innovation our distribution and our media. And we have evidence that we're able to attract additional consumer interest and retail space.

And lastly, we have a clear, simple, disciplined way forward, how we are scaling our model with a highly capable team to win with our most success defining stakeholders, our consumers and our customers. Thank you.

Thank you, Steffen. And now we have time again for some questions, and we will have the joint Q&A still in the end. But let's take questions for Steffen. So do we have any questions here in the audience? All clear. Go ahead, Maria?

I'm actually curious on your views because, I mean, as it's quite evident to see that you have managed this U.S. tariff situation very well what comes to the profitability. And I think me and I think quite a few of my colleagues were surprised on Fiskars BU profitability in the first quarter. So can you walk us through that? I mean, what has been the key factors for that success?

It is -- I'll probably repeat what I had in the presentation. We are just very aware that growth cost money. Return sales comes after the investment. And so from day 1, I said I need to make room in my P&L to be able to afford that. A classic mistakes that you do an annual plan, you start from a desired net sales result and then you do the math all the way through the P&L. You say, based on that, this is what I can afford. You start the year the first quarter fall short because you haven't done the investment yet, so you can't expect the return and then you end the catch-up mode. We haven't done that. We work with a target picture where we have a realistic assumption of what we can get before that investment happens and then we cut everything in place. And when we had the tariffs, it took us a week to say what is the likely expectation on our P&L. And then we basically went back to the war room and said, how do we need to cut the different elements and plays to make it. And that -- the benefit of that is that we can invest before needing the return because it anyways won't come in the same year. and that's the model we just continue. I have to admit that, of course, last year, April 2, and now this year, February 28, isn't exactly helpful. because now you look at the commodities and you know that's going to hit. So you constantly every time we feel we can play offense, something externally happens to push us back on the defense. But my mission and the discussion I have with my team is forget the market.

The market is what it is. We need to focus on how we can grow this business because there's ample of consumer interest out there, and our job is to mine that whether the market grows or not. So how do we expand our portfolio so that we attract more people to grow even if the markets don't.

And then my second question is on your sourcing model and the countries where you source. I mean do you think you are currently optimally positioned or would you think you need to review still your sourcing model going forward?

On the question, are we optimal? I think on July 24, we will know again, if we are not, yes, with the current tariff regime expires then. And then we expect Section 301 tariffs to kick in. which then might change the landscape of optimal means. But we will have a review of a footprint in quarter 3. We are looking for various reasons, cost is one thing, quality is another, but also sustainable competitive advantage. There's a number of categories that I wouldn't want to be done by a contract manufacturer because I think we can build proprietary knowledge about how to produce certain things. that are strategically important for us for the future and those we want to make in-house. So yes, there is a review coming in quarter 3 internally. And yes, we will consider the tariff regime change that are likely to happen on July 24. To the optimal right now, I think we are in a pretty good shape, but the shape is depending on what shape you have -- so I expect that to change in quarter 3.

Any other questions for Steffen, at this point. Okay. Thank you, Steffen. And then it's time for Jyri to present the key takeaways of today before we head to the joint Q&A. So go ahead, Jyri.

Thank you, Now, I'm now between now and the interesting part when we get to the Q&A. So I'll be very focused and brief. So a few key takeaways that I hope kind of sticks with you today after this multiple presentations and deep dives into our BAs. So the role of the group as an effective portfolio and capital steward, which is enabler an enabler of value creation in the BAs -- the new targets, which I think is put nicely in the slide, as a reminder, it's not touching our guidance this year. They are reset from what Somebody with perfect hindsight now can call was maybe discounted hopes and dreams of course, in the boom of the post-covid home nesting period that was maybe extrapolating some of the graphs that one could draw from the past years, but really recognizing the reality we live in. Steffen referred to July when there will be, for sure, a change in the tariff regime. Let's see what comes there, but we've tried to kind of take those things, we can recognize that in our current environment or in a way, announced to be hitting when we work through what are the long-term financial targets for the company.

I think Daniel covered well, why and how a turnaround is needed with Vita. It's been kicked off. It's again something that's already ongoing, and we know some proof points that things are happening. It's, again, not PowerPoints and excellence and plans. And at the same time, with BA Fiskars where we have our robust foundation when you look at the margin, EBIT margin, despite all the swings despite the tariffs hitting us, et cetera, but really rebuilding the sales growth momentum through innovation, distribution and the brand relevance.

So fairly condensed message for this, but important in my book is that when we look to the future, it's not just planning with a kind of a broad brush of some creating kind of the scenery, but it's based on 3 quarters. So things are happening. So we are not doing the 1 single data point extrapolation, but we have already multiple data lines where we kind of protect the extrapolation for us. But that is really the essence of our message today. So 2030, of course, is the time when the verdict will fall. How did we do with the 2630 targets. Of course, that's kind of the ultimate test to this. But I'm shutting up here. indiscernible]

Yes, please hold for a while, while we arrange the stage for the Q&A. And if I can have all the presenters on the stage. And just as a reminder, you can type in your questions in the chat if you're following the event online. Okay. But maybe we start with any potential questions here in the audience, and I can see at least Maria has her hand up. So if Nora can bring the microphone.

I can add one question for Jussi. I think I mean you're probably the best person to answer this, that I was a bit surprised to see how you define cash conversion that you chose to have the -- it's a denominator where you had EBIT excluding extraordinary items, I would have thought that I mean you would do EBITDA, which is something closer to cash that you got?

That's a very good point. So actually, we have been working with these financial targets almost, I would say, last half year making quite wide benchmarks with some of the advisers also. So what's the most common way to report this. The reason why we gave up this free cash flow net profit was that we had a lot of volatility there when it comes to changes in deferred taxes and that kind of thing. So we lifted it up. And it seems that, that seems to be the way. One thing to highlight here, the EBIT, what we are using there is then EBIT less the lease interest that we have.

So it is right comparable. Also the new cash flow, how is defined by unlevered free cash flow less these payments. So that's the way we have done it. We are not the only one. So when we make benchmark, we found out that, that's not so uncommon way to report it. And we believe that it's now more less volatile than our previous KPI.

And if I continue very briefly on that, while the targets are under the current gap. So we know that there are changes coming to IFRS, IFRS 17 being now the number, but that will also highlight operating profit, which in other circles is called EBIT is something that will become a mandatory measure in the template of an income statement. So maybe there was some foresight in terms of preparing to the new world where you can't go around the operating profit also known as a bit.

Yes. And still not going too much into the details here when it comes to KPI, but using EBITDA there, then we should adjust it also with IFRS amortizations, which is made even more complex to be played.

Steffen, then I still had one more question directed to Daniel, given that, I mean, you have been given this turnaround job and is this something that, I mean, you have done before that you have like a certain like turnaround plan in your toolbox and now you are just executing it for Vita? Or is this something that, I mean, you kind of needed to come up with the scratch how to improve the profitability or almost double the profitability, I mean, for the business, actually more than just double, yes.

Yes. Yes. Well, thanks again for the question. Thanks for your other question at the beginning at the end of my presentation. I guess is this in my toolbox. I think I have done over my experience, some turnarounds and especially some scaling up I've had the chance in a couple of roles under private equity ownership to scale businesses from $400 million to $1.2 million in the spend of 4 years. So the top line helped necessarily. But I think along the path as well, clearly had an eye for a return on investment and obviously not growing the SG&A as fast as top line. So I think this is -- there's some similarities to some of my past experience as to what we're going to go through here because again, as I mentioned, there's a lot of different buckets of choices we've meant towards price accretive channels, brands, markets and the skill sets to bring the global accelerators up. I feel obviously super comfortable. I think I've done that for almost my entire career, that helps a lot. That helps a lot. If we can get them to a certain trajectory. They're already profitable today as you can see. So that helps a lot the economic equation.

So yes, I feel super comfortable I have to pull back from some of my past toolbox. One of the most important things is going to be making sure that brands in our portfolio today are are desirable. I keep using the word desirable. I replaced the word desirability in our company, not replace, replace the word luxury with desirability, kind of was leading on a different path. And I think the more desirable our brands are, we'll certainly make it. It's just a have to have different paths of growth for the different brands. So yes, very comfortable. I have also made sure that the teams in each of the brand houses and in the markets reflect the skill set that I'm looking for, in those either brands or those market resets as well.

So I'm trying to iterate to obviously, the leadership team to the challenges we have, and that's super important. We're almost there as well with making that happen.

Good. I see one question over here.

One for Jussi as well. The net working capital and the inventory drawdown of roughly EUR 100 million that you mentioned. You also mentioned that it's not going to be short-term target. It's going to take some while to get there. Just Curious if you could walk us through the kind of your thoughts about the timetable, when do you expect to be in the goal? And if the current environment higher oil prices, et cetera, is impacting or has impacted in some way of your thoughts about that target.

That's a very good point. First of all, if I start first on net debt to EBITDA when we said that the target is to get it now to 2.5 in the next 2 years' time. That's heavily linked to working capital reductions, what we have in place. So they go hand in hand. On that one, we see some development already this year. It's very year-end buyers to end loaded. And ofcourse, it's better to say that it takes to '27 when we start seeing some visible changes there. One thing is, of course, the current environment. Are there more this kind of black sports coming. .

The good thing is that when we talk about working capital overall, there is also a supply sourcing side, which is very much in our own hand. And we can have -- we have these kind of levers that we can pull to manage to get it down. So I would say we have high conviction case in place to get it now done as planned. Of course, big part that is in Vita and already Daniel explained the ways we are getting it done.

Maybe a follow-up. Do you see any risk that those moves could restrict your growth short term in any way? Or is that completely separate issue?

Asset, of course, we do need growth there to get inventories down. That goes without saying. But then as said, we have a lot of own manufacturing. We have a big sourcing organization. So those are the ones where we have only rest of pool, but we do need top line. Do we need the top line this mid-single-digit growth or less actually plans what we have in place short term are now based .

[Audio Gap]

Situation is not exactly the same across all the brands and the brand houses. So there are different, which then again, as you mentioned, some basis we should or could have even more inventory to be able to sell more. So the good news is address that.

I think we could take one question on the online viewers. At this point, Jussi, I think you could take this one. persist and consumer confidence doesn't pick up as expected, leading to continued subdued profitability development. In this scenario, would you be willing to relax on your dividend target in order to drive down net debt and leverage. A long question.

Yes, long questions and this is a long answer the future. So we have proof points and therefore, conviction cases in place to deliver the cash flow, which is ultimately the 1 big lever there to get this back to 2.5. So that's one conviction case in place. Then dividend won't be the first lever to pull if something needs to be done. We do have working capital we have have CapEx, we continue driving cost out actions and the likes. So therefore, that -- that's one thing.

It's not the first thing to start figuring out. And the third one is that it's a policy not carving stone. Having said that, of course, dividend ultimately is about owner's choice management is tasked to deliver the plan we have now put in place to deliver the stable dividend what we have now guided as a policy.

Are there any other questions here in the live audience. Yes, Rauli, please.

Yes. Rauli from Inderes, one from Daniel. I think looking at the brand position at least Waterford and maybe some other brands of the [indiscernible] acquisition, has been kind of in the turnaround category for the whole 10 years that fiscals has owned them. So there has been quite a few people, I guess, trying to do the turnaround already. So what can you do and will do differently to actually make it happen?

Okay. Good question. I don't know exactly what all of my predecessors have done. I'm sure they might have tried different recipes and so on and so forth. I guess my conviction is I'm spending as much time as I can with the teams in Barsten and Waterford. The first one is really about collections.

There's too many collections. So we have to make it much, much more simple along the lines of rooting out the icons and doing things -- making them [indiscernible]. That's really important. There's a number of collections. I think we have a plan to reduce by more than 50%, the number of collections and SKUs that go along with it. We just had too much complexity. And I guess I'm getting a little bit granular here, but we may have had a mindset in the past to produce what the markets would like.

And I want to stop that. we need to produce and develop collections that reflect the DNA of the brand, the values of the brand and that have appeal globally rather than just serve different markets. That's very dangerous. So that's a big big change. The team is getting there. I think we're almost there on the collection, on the merchandising, on the future collections, which one they've chosen. These are the top 7.

We're going to build on those and create global icons. So I think that's an important one. Also, within Waterford, we have resurrected Marquee, which was the entry level. And I think that's an interesting play that can go to a different channel than necessarily Waterford. So that's 1 of the, I guess, solutions there. Selective markets, but I want to expand on that because I think it's fairly clear. The biggest market for [indiscernible] is the U.S. double down on there. Wedgewood was China as well. So it is going to change the model and not just do D2C only. So those things we're doing. And then it's the industrial footprint that you know. So here is probably we have a plan in action. It's a challenging one granted and you probably know it.

Just on making sure that the investments and trying to optimize the costs that we have running the factories, maybe the Crystal factories. And we need to bring more volume to those factors. We have plans in place to do that. We let go some of the volumes over the last 3 years, and there's a very specific plan to build that up again. And that will be very helpful, obviously, on the gross margin. So this is 1 of the bigger challenges. So I don't know if that's very different from the past, probably not the last two,-- but I think the first 1 is just a big key for me to success.

I would actually like to build on what you said that, because this question that you just asked was one that I asked myself very intensely before I started. Now I've been here a bit more than 2 years, but I also want to share some of the reflection of the themes that I think I'll comment. -- when I started, I consider myself the fourth leader on that business in a very short sequence. You've those that followed a long a bit longer, we know that there was quite some changes. And so I ask myself, how do we make sure that I'm not just the fourth in further changes. What will I do different. And so there was one conclusion for myself, which was I don't need to hostile now my 5-year vision.

The people have heard this 3 different versions of it in the last 2 years. If I now come and so, no, we are going there, nobody will believe me, nobody will follow because they go like I've heard this every 12 months. there's no point. And I think the common theme you hear there, and I think the differences in the execution is a simplification. You have done a talk a lot about that. You've heard me talk a lot about that.

I think it's clarity of direction, we are not avoiding the trade-offs we're making them and we're also asserting them into our organization and say, we don't want you to try to do it all. We want you to focus on a few priorities and make those things exceptionally well. And I think the third thing I have the privilege to be on one of the sessions that Daniel did when he announced his restructuring. And what you did there and what I think what I have done with my organization is that we make more effort to bring the organization along. When this turmoil happens, a lot of employees are, of course, concerned. They have seen the results they have seen our profit warning. So the first thing is my job in jeopardy, what is happening? Where are we taking this business?

So we have introduced a measure on a monthly basis in overtones to ask our people, do you understand our direction and do you agree with that, monthly poll quantified, can see how the data goes up. And the second is, are you clear? Or do you need to contribute to this direction. And again, we can see the measures. We started when I started, we were about 3.1, we're not 4.3 consistently. And what we've seen at the early time is every time when something happens, it immediately dropped and now we have basically resilience. If 1 was started, no change in policy because people feel our direction is robust. And so bringing the organization along -- I think is what I'm seeing what you're doing is an effort.

And I would also considering after I've spoken to my previous asserts, by the way, My sense is that this is truly a difference even if the concept as such, you might have a feel you have heard before.

And just -- sorry, I'll build one last thing I could add to that. So I agree. Obviously, we'll add staff as Dan is saying, and sometimes simplifying is much more powerful for sure. One of the things also in these in addition to rationalizing but meaningfully, I'm talking like from many, many collections to very few is the customer at heart, and we have to modernize, and that's what we're bringing new talents, new design talents to both brands. to create products that are desirable for younger consumers, millennials, because we don't want to all our customers just say, I inherited this from my grandmother or that's not good. I don't like hearing that. It's great because they're passed on and they had value and time.

But no, I want the cool 35-, 40-year olds to say, "I can afford it now. I love this brand. I love this design with a great designer, world-class designer and to pick up that way too. So that's a big focus of ours as well, not just on rationalization a lot, but who designs to appeal to a younger consumer.

Okay. Great. Very comprehensive answer. I have another one hopefully a bit shorter [indiscernible]. On [indiscernible] since it's now in the global accelerator, which sounds glamorous for it, which was maybe known for more of a regional Nordic and I guess, Japan brands. So are you planning to accelerate that in a new geographical regions or mostly the current ones.

No. That's a good question. So I would say Italo just made it into the beginning of the global Accelerator. So it's a junior global like South Korea today, but it's picked up. We had a good year last year. The profit picked up, et cetera. So we brought it to that category. Because of all of our brands, it's one of the ones that, I would say, the highest likability also from an icon point of view, has a lot of incredible icons like the Alto [indiscernible] and many others as well. Very strong appeal in the Asian markets, Japan, Korea is a big opportunity, and we think China is well one day. So we just think that the brand has the right portfolio today, very -- they play many categories, but there's a good degree of likability.

People recognize a little bit the brand globally because of the -- mainly the the Alto [indiscernible], to be honest and a few other icons. We thought it was just ready to scale it out. The countries, we're not going to go -- I will not scale as much as I plan to with Jensen. Jensen could be a really, really large brand, and it's ready for many markets. [ Italia ] is going to be step-by-step, mainly pointing to the Asian markets.

Japan is our largest market outside of the Nordics Cora were not big yet, but we think we have a big opportunity there. As I mentioned, China are key markets. The U.S. is more midterm. I want to make sure that we build on strength on strength, first before attacking or before launching in the U.S. We have the U.S. more earmarked as a midterm plan, but we think there's potential there as well. So there's a lot of great things. We're working on a brand-new collection and 1.5 years, which will be multi-category with a big designer worldwide as well. So there's a lot of great initiatives on the brand.

And we think it's just at the beginning of its scaling today, but it won't be the same as Janssen and Royal Copenhagen yet. Yes. So those will be the countries we're looking at. Online 2, online, it's our second biggest channel for [indiscernible]. And so we're going to try to obviously boost that as well.

Okay. I think we have a question here.

Joni from Nordea. Maybe as Fiskars has a long heritage, so maybe a question a little bit further to the future. So I think historically, you have been speaking that maybe Vita has higher margin potential compared to Fiskars. But given you're now maybe focusing more on the wholesale. So is there some structural change that could have changed this picture so that maybe Vita's long-term margin potential is not as high as before?

I'll take this. Here, when you look at the extrapolation from the COVID, post-COVID home nesting, that was something that was directing upwards. You recall in some of these strategic pillars, we had certain markets, but then we had gross D2C and gross margin as, kind of, key performance indicators for the business. And in the belief, if that trajectory would have been, kind of, staying, holding, then the consequent EBIT margins that were projected at that time would have been potentially quite realistic.

We know that the consumers are not living on that curve after the COVID where people stayed home. And they made also some of their critical purchases and some of tableware stuff, you actually can have over generations. Maybe some other kitchen utensils and the frying pans, they wear out and so forth. There are new technologies, which require people then to renew those.

So I think it's kind of the reality check to the economic realities and consumers' spending patterns. But growth, as you can see also on the target setting on the organic FX adjusted net sales growth, there, we see more opportunity and kind of more potential from the category perspective and our geographical footprint and the reach out with multiple brands. There are some geographies on this planet where gardening is not a big business, and there are some geographies where you are not allowed to be dealing much with sharp objects like knives, et cetera. So there are that type of restrictions when I compare kind of the 2 businesses from my perspective.

Okay. I think we could take a question from the online viewers, and this is for Daniel. In your presentation, you said that closing some brands that are losing money could improve margin. You also said that, that is not on the agenda. When will it be on the agenda?

It's not on my agenda right now. That's not the mandate that I have. Today, I said it because mathematically, yes, it just -- it would be the case. So listen, I think, today, what our teams have built a long-term plan. We're in the process of finalizing our -- also our long-term plan soon. We've had the lens of improving each brand at the right time, the right pace with the right levers.

I don't know. I would just say, just like on the M&A side, we didn't really talk about that. I think if there is -- a couple of things. Organically, if we want to scale further a brand today, we see the potential, I think the group will get behind it. So I think that would be good. On the other side, listen, I think I can just say again, my mandate is to build -- to improve the performance of all our brands today. But we're very attentive to things that could happen as well along the way, stay agile, but that's not the current mandate.

Any questions here? Okay. We have one on the front row. If you wait for the microphone.

Yes, Martin from Ilmarinen. So what would be the magnitude of the Vita loss-making businesses if there are such, like, in terms of, let's say, the free cash flow? Would it be like EUR 20 million that you could spare for your business? Or what would be the magnitude just to get it right because it's easier to cut than grow?

It's easier to cut than grow, especially when you are making the world's greatest cutting tools. That's, of course, the recipe is from that perspective. We have not disclosed brand profitabilities. We have actually, today, disclosed the volumes of some of our key brands in the revenues. But easily, when you look at the chart, you can see that some are performing less good than some others are, but we have not gone into that detail of disclosure.

And that's -- I know for your and many others' Excel models in this room might be an interesting data point, but that doesn't help when the guys are visiting our customers and distributors showing that, "Hey, here we make this much money." I know exactly what that would lead then as a discussion that how much of that actually belongs to the wholesalers or distributors, retailers, how much better terms they need to do because we are doing so fine with a certain brand. They don't actually have any concern if there is a brand that's, kind of, feeling bad or even bleeding, you won't get that type of a support from distributors.

There's also -- maybe just a little added point on that. There's also -- as we were mentioning, each brand has their own path, their own trajectory, and that's what we're guiding towards. There are some brands that can have a more tactical business model as well. Some of the smaller brands on the reset, for example, can have a different model, i.e., exclusives by country with a partner or more of a partner model that could be more beneficial for us as well and for the partners. So there's also that, that can be part of the way forward as well.

There is a follow-up on the brand question I asked Daniel. And now I need to ask it from Jyri or that's the guidance from the viewer online. How patient, Jyri, are you with the small brands or the ones that are not there high above in profitability?

If they are really small, then that correlates somehow inversely to the patience. Of course, it's always the big stones you put to the jar and then the sand and then the water. And if it's, kind of, on the water category that fills the last spots, then the impact.

It's about capital allocation. It's how much bang we get for the buck. So if we invest in some of our global accelerators and get a return here and then we have a small brand by fixing it somehow, there might be a cost associated with that. How much does it move the needle? So we need to choose our battles because you'll see it's not promising from the petty cash unlimited budgets for everything.

On that one, actually, releasing the cash as such is not only the brand issue. You have also different type of supply chain models you have in place. And I know that you have been already attacking or have attacked already on those ones. So it's not only brand side, it's also supply chain side where we can release a lot.

I see that we still have at least 2 questions here in the chat. Are there any questions here at the audience? Maria?

The compensation report, I think you can look, I mean, what are the CEO compensation based on, like, what metrics. I'm not really sure that if that's going to be included, I mean, for Daniel and Steffen going forward. But maybe a bit more elaboration that, I mean, what would be the priorities? I mean, if we think about growth, profitability, return on capital employed. So how Jyri and you will compensate for your 2 leaders sitting besides you?

It's compensating...

On my behalf, Maria.

This is a paid question apparently. So the variable parts of these 2 gentlemen sitting next to me are related to top line growth, not with a huge weight because there are some fundamentals in the turnaround that need to be done. EBIT being a big one and quite equal weight with cash flow.

And historically, how we could measure and how still the budgets for this year and the plans for this year were made. We didn't have the legal structure. So cash flow is a partial cash flow, which is the operating cash flow, including the CapEx element and the inventory change, but we were not technically able to separate accounts payable and accounts receivable because we had in most countries where we have both businesses, one legal entity and even certain distributors were dealing with both products. Starting next year, that will be then a more total kind of net working capital performance. But now inventories is definitely something that this gentleman can control in their domain.

Good. I think we're soon running out of time. So maybe short answers on the last questions. And for Jussi, this one is for you. How do you see cost volatility affecting your ambition achieved?

Cost volatility on long term, i.e., for '26-2030 period or it's not...

It's not. No, no.

You were asking for a short answer, yes. So of course, the main components, what we have seen in the prices when it comes to logistics and that kind of things which are oil related. Those are the ones, especially, Steffen, you have been successfully mitigated so far. So those are the ones what we have.

Then the main raw materials, be it aluminum, in smaller scale, also gold and silver, what you have, those we have hedged. So that's well in line. When we have planned our 2026-2030 period, of course, we have assumed a standard inflation in, therefore. Having said that already earlier, if there are this kind of black swans to come, which actually are picking up then in cost side or dropping out the revenues, then we need to go back to those levers what we have to pull.

We can run cost-out programs. We can scale down some of the operations if so needed there. So instead of having a very detailed plans, how the cost volatility will impact, we are more focusing on that toolbox what we have to mitigate different type of ups and downs.

Thank you, Jussi. And then a final one from the online viewers. And Jyri, this one is for you. It's a big theme, digitalization. How is that seen as an enabler to achieving your ambitions for the group -- for the group and the BAs?

It's a very broad topic. Digitalization, it has to do with our own efficiencies where we always have potential to improve, and that's what we are, every day, working on. And fortunately, there are many other companies around the world helping us with their work, contributing with new tools and to improve there.

In Daniel's presentation, the e-com topic was addressed. And when you look at the CapEx numbers, historical CapEx numbers in Jussi's presentation, you can see that there was a period where we invested a lot into digitalization. That was a lot into the e-com but different platforms. And then through acquisitions, we inherited different platforms. That's now all going under one SaaS type of a model where we are not taking kind of the role to develop the platform.

And you mentioned Shopify, which probably is the largest of its kind in the e-commerce industry. Then to ride with those developments and their budgets are slightly bigger than our revenues just to develop the platform. So that's one of those elements.

When we talk and read the newspapers, there is always AI mentioned in every places. I have a hard time figuring out how AI would change the fundamental utility function of our products, meaning if you are a law firm and you are selling legal advice, it might be easier that some of the simpler stuff, you might get through a dialogue with AI solved.

But still your roses in the garden won't be cut. And when you eat and drink, because we won't be -- our nutrition won't be kind of -- we don't plug into AI ourselves, and we want to enjoy the nice moment with good food and then have the beautiful tableware and the glassware in front of us to enjoy, make that moment perfect, that's where digitalization is likely to have a very small role in our situation.

But on the access to the market, getting the consumers' awareness, Steffen showed only one nice video, but there are many on the -- on track split and so forth that people, consumers are watching through way more than any advertising of sports cars or anything like that. And that describes that it's a channel topic, but I don't see it as a threat to us as a business.

Good. I think maybe it's good to end on those words and wrap up this Capital Markets Day. So thank you all for participating, and have a nice rest of the week...

Hello, and welcome to Fiskars Group's Q1 2026 Results Webcast. My name is Essi Lipponen, and I'm the Director of Investor Relations. I'm here with our President and CEO, Jyri Luomakoski; and our CFO, Jussi Siitonen.

Let's look at the agenda for this call. Jyri will first go through the key takeaways of the quarter. After that, Jussi will dive deeper into the numbers. Jyri will then continue with the business area highlights and looking ahead, how is this year going to be like.

After that, we will have time for your questions, and you can ask questions both through the phone lines and through the chat. And you can type in your questions in the chat already during the presentation.

Jyri, please go ahead.

Thank you, Essi, and a warm welcome from my side also to our Q1 webcast. Summarizing a bit the quarter, starting with group level topics, our comparable net sales and free cash flow both increased. The comparable EBIT and that comparison does not contain the currency translation effect, it declined, but the impact really were that broke, that equation was from the U.S. dollar translation.

So if we would be using constant currencies, actually the comparable EBIT would have a small growth. Key in our BAs, it was the third consecutive growth quarter for our BA Vita and this is, of course, not the biggest quarter and less important for Vita. While for BA Fiskars, the garden load-ins in the first quarter is an important season, and there was a very solid execution that we could see from the team and the numbers are testament to that.

A lot of internal activities went into the technical and legal separation of our two business areas as subgroups, legal entities, and that was finalized according to the plans during the quarter. Around sustainability, we had actually already reached our 2030 targets on some of our targets. And of course, that means that then you raise the bar, and that was validated by the SBTi and also published as such. No change to guidance, comparable EBIT to improve from the 2025 level. But what's behind these statements numbers speak the language of business, Jussi.

Thank you, Jyri, and hello, everyone. So starting on the top line, as Jyri mentioned, we had a good top line growth there at constant FX. So constant currency is 2.3% up. And reported currency, it was down 3.1%. This is explained by a quite significant U.S. dollar weakening in Q1, roughly 10%. We had a solid growth in main countries, U.S.A., Sweden, Finland, China, just to mention a few.

Some of these big countries were even at double-digit growth. EBIT, EUR 25 million, EUR 1.8 million down versus last year at constant -- at reported currencies. I'll get back to those changes on the next slide. Gross margin at the group level, we were down 70 basis points there, so that Vita was down and Fiskars was up. We go more specific to this in Jyri's presentation. Free cash flow, slightly positive EUR 0.9 million. Typically, Q1 is always negative when it comes to our free cash flow.

Now it was more than EUR 18 million better than last year at the same time. Comparable earnings per share, EUR 0.16, up EUR 0.01 there. And if we take some of those lines below the EBIT there, net financial items there EUR 4 million better than they were last year at the same time. That's the main kind of below EBIT line improvement what we had. But jumping into this -- as already mentioned, U.S. dollar had a material negative translation impact on our comparable EBIT.

If I start here from right, where we have Fiskars BA EBIT bridge, you can see that at reported currencies, Fiskars were able to improve EBIT by EUR 300,000 or EUR 0.3 million. Excluding this translation -- negative translation impact there, Fiskars improved EBIT by EUR 2.7 million. The biggest driver being gross margin improvement, which was only partially offset by these tariffs. Q1 this year was the last quarter where we did not have tariff impacts in the comparative numbers.

Moving to the middle here, Vita. You can see a significant negative item there coming from gross margin. This is a continuation of those actions we have put in place in Vita, which are supply chain related, mainly our production related there. And the good thing is that, as I said, these are coming from manufacturing side, we have succeeded to keep our sales prices. So none of this operating margin negative is coming from sales prices.

At group level, you can see that we succeeded to continue improving EBIT by EUR 0.5 million there at constant currencies, the biggest driver being volume growth and then some savings what we had in marketing expenses there. On cash flow, as I mentioned, we had slightly positive cash flow there of EUR 900,000. And you can see here the trend when it comes to our previous Q1s. So this is significantly better than what we typically have reported for Q1. Improvements came from all the main lines, i.e., from operations, from net working capital changes, CapEx and cash taxes. So we were able to improve quite holistically our cash flow items now in Q1.

When it comes to our net debt to EBITDA, it was up from the year-end 0.24. And then versus the Q1 last year, it was up 0.65. Always in Q1, our net debt is increasing on the year-end due to the seasonal pattern. This year, the increase was much less than what we have historically. One item to explain it is that typically, we had paid dividend in two installments, half in Q1, half in Q3. Now we are paying it in four installments.

So only 1/4 of dividends were now decreasing our net debt here or increasing our net debt here. The focus measures what we have put in place, especially in Vita on the inventory levels, they are now bearing fruit here and improving to manage this net debt situation. Regarding the current highly volatile business environment, it's worthwhile now to remind our FX and commodity exposures, what we have and how we have hedged them.

On currency transaction, U.S. dollar is our main currency in which together with Danish kroner and Polish zloty, we have a short position, meaning that weaker the U.S. dollar is, better it is for our transactions. Overall, we have hedged over half of our next 12 months flow in our main currencies. On translations, we do not have hedges in place. On commodities, especially when it comes to gold, silver and aluminum, we have hedged over 2/3 of the expected next 12 months consumptions.

Gold and silver are important for us, especially when it comes to jewelry business and then aluminum overall both in Vita and Fiskars. Then on energy, mainly electricity and gas, we have long-term contracts in place. So we have hedged that in that way. When it comes to our climate ambitions, we have now new CO2 reduction targets validated by science-based target initiative, so that CO2 for Scope 1 and 2, we were now at a level of 62% down versus base year 2017. Target were lifted up from 60% now to 70%.

On Scope 3 target is now up to 40% from 30%, and we are now at 34%. Then when it comes to our important circularity target, what we have set for the company, i.e., by 2030, 50% of the net sales should come from circular products. Now we are at 29%, 2 percentage points up versus last year.

Then on social targets, the important thing is lost time accident frequency, LTAF. We are now nicely down versus last year from 3.8% to 2.8%. However, the target is there at 0 level. So we are going to the right directions, but not yet there where we should be. This was a snapshot of our financials. And now over to you, Jyri.

Thank you, Jussi. Quickly on our two BAs, Vita. As I mentioned in the introduction, third consecutive growth quarter. The comparable EBIT didn't move the same way and there are reasons for that. When we look at the growth, much driven by our two Danish brands, Georg Jensen and Royal Copenhagen and nice tapping kind of to the opportunities through Rörstrand having its 300 years birthday.

It's actually our second oldest brand in our portfolio. Then on the EBIT, why is it moving down? Last year in the summer, we stated that cash flow is a priority, and we have clearly too high inventories and started actions. And this is now something that last year maybe was then in the latter parts of the year when we curtailed our production and got these inefficiencies expensed directly.

Now it was in line with our plans to continue the efforts to reduce our inventories. And that's where the comparable gross margin decrease is solely coming from is the supply chain related, not that we would have less -- lost the kind of price position in the marketplace. Besides Rörstrand 300 years, there is always some good reason to celebrate and our iconic Aalto vase is actually celebrating its 90th birthday.

And now there are special editions. So you can add to the standard colors and so forth, now the all kinds of wood and mold and with bubbles, et cetera, as you see in the picture. Royal Copenhagen, it's one of the older brands, 251 this year, actually launched a new pastel flora tableware collection called Iris. And again, very positive reception by consumers with that new pattern.

BA Fiskars comparable net sales remained stable and the growth that we saw in the U.S. also for the third consecutive quarter for the Fiskars brand actually then was somewhat offset by mixed performance in other geographies, the European economies having been from a consumer cautiousness perspective, maybe more cautious than the Americans have been. The EBIT margin was improving. Cost management has been prudent.

And we need to remember that, as Jussi pointed out, Liberation Day was on April 2 last year. So Q1 was still a comparison in the kind of old tariff regime, i.e., well, there were some tariffs, but nothing in the magnitude as we have seen then. Gross margin increased 220 basis points is, of course, a good performance, and that's where the team has done also a good job not only with those new products that you have seen in the latter part of last year, but also now a new launch, the X-Series DualAction cutting tools.

So depending on what you are working on, how thick branches you are working on in the garden, you can just optimize your own effort by having it turned either in the small or the large mode. So then you avoid extra work. Guidance for this year, and I believe, I have read some expectations from some market participants that we would be coming with a more specific guidance after Q1, and that potentially was also our wish what happened on the 28th of February, the Iran war broke out, and that has, of course, not cleared the visibility more to the contrary.

So these uncertainties in the global economy persist. Our visibility is somewhat limited as one can guess. We know that the planned changes in BA Vita are expected to support our EBIT from H2 onwards. Why from H2 onwards? We have in the biggest markets completed the union negotiations, change negotiations as those are spelled under different jurisdictions. And those conclusions also have been taken, but they have until if it's about people who are departing the organization, it doesn't happen overnight.

So consequently, that's why the H2 onwards it's taking place there. Steady performance by BA Fiskars and why we added following the typical seasonality of its business, the guidance is not to take Q1 and multiply it by 4, to arrive at a good guess for the year. This is the strongest season for the business, but we see from the performance, how we have been able to also gain on distribution in some key markets, being able to convince the distributors, our customers through new offerings, our performance also in the volatile environment that there are new doors or distribution points have opened to us and are opening to us.

We also have planned for this year that we continue on the kind of curtailing production in some categories, we need to work down and sweat down the excess or too elevated inventory levels, and we know that will carry some negative impact also going forward during this year. But as you can see from the Q1 numbers, I think that's a kind of under control type of a situation. Then comes the unpaid advertising and commercial Capital Markets Day will be held at our offices in Espoo on May 12, and that will be also available for online.

And there is also a QR code you can sign up for the CMD. So to summarize, on group level, top line cash flow increased, breaking some historical patterns also on the cash flow, which is important. Comparable EBIT, yes, it declined, absence the translation, actually, the situation would be looking better. Third consecutive quarter of growth for our BA Vita and the Fiskars BA team has done a solid good job in tapping to the opportunities of the season.

Internal technical restructuring completed, finalized as planned, and that means no hiccups in terms of costs or kind of functionalities, et cetera. And we continue to focus on our sustainability topics and the climate ambitions have been raised. There was a good performance over the last years, and we want to continue on that track. Guidance unchanged, comparable EBIT to improve from the 2025 level.

Thank you, Jyri and Jussi. And now we have time for your questions. Let's first check if we have any questions through the phone line.

[Operator Instructions] The next question comes from Maria Wikstrom from SEB.

This is Maria Wikstrom from SEB. I had a few questions. And I'd like to start on the Fiskars BA and your profitability, which was on par with the last year level, which I think was a bit surprising given there were no tariff impact in the comparison quarter.

So can you a little bit walk us through that how did you achieve such a good performance in the BA Fiskars. So did you actually raise prices more than the tariff would suggest? I mean, which would then be behind the good performance?

Yes. Maria, this is very much operational efficiency improvement, what we have made, especially when it comes to our own manufacturing, how we have succeeded there. So that's the main driver what we have had here to mitigate the tariff impacts.

And now the actions what BA Fiskars team has put in place, they are now bearing fruit there. So very much that one. Pricing, we are following the market there. So this is not pricing related. It's more internal operations related.

Okay. Perfect. And then my second question is on the consumer trends. But have you seen anything changes after the war broke in the Middle East, if we -- I mean, take it separately on different market areas, Americas, Europe and Asia.

When we look at the consumer trends, and I know you all have access to all kinds of statistics and surveys, et cetera. I think the high-level takeaway is that European consumers are probably currently more cautious than the American one, especially when the stock exchange started to rebound after the war broke out.

There was a big hit to the equity markets. And at least my experience is that the American consumer, when the portfolios are doing okay, then they are more shopping-happy or such, and that has been less of an impact.

In the behavioral pattern of our distributors, of course, this cautiousness is visible. So that instead of some big distributors taking maybe certain stuff in truckloads, they start with one truckload. And then once they see that it's sold out, then there is kind of a replenishment order taking place.

And in this type of a chain, we know there is this whip effect in terms of the further down in the chain you get, the higher the volatility -- can get. But I'm proud of our team has actually been able to manage that pretty well this increased volatility.

And then I wanted to ask on the inventory levels as with the Q4 results. I mean you said that, I mean, you saw that the inventory levels were too high. And actually, if we compare the inventory levels after the Q1, you are actually slightly more or less on par, but slightly higher than Q4.

So what do you think -- I mean, are you happy with the current inventory level? And what are your action plans if you want to bring it down, I mean, throughout the year?

We are definitely not happy with the level. We are far from where we would like to be. That's clear. When you compare Q4 -- end of Q4 and Q1 and take historical patterns, that's seasonal. -- increase and Jussi has the number better in his mind, but I believe that we -- a bit did better than the historical pattern.

We did. For example, Q1, EUR 8 million better than last year.

Yes. So this is going into the season. And it's certain specific categories where that issue is more of an issue and very much under the loop and under actions. But it's a longer journey as we have indicated already last year that it doesn't happen in a couple of quarters, and that statement is still valid.

In the Fiskars BA, we have the seasonal patterns and certain big seasons. Now it's gardening then in the summer, it's the back-to-school season, which are those that are driving also this type of inventory load-ins first to our inventory, then to the distributors or wholesalers i.e., our customers and in there, given the forecast of the available points of distribution shops, stores or doors as we call it in the jargon internally as there has been.

And we expect a good trend to continue that's also to be prepared when you have load-ins into new points of distribution that we are available there. So that part is not at least keeping me up at night.

Maria, when it comes to seasonality for this year and the biggest actions or major actions what we have in place are in Vita. And this visible reduction of the inventory, it's more year-end loaded than the first half loaded. So therefore, you should not see big improvement until we are entering into second half.

Okay. And then my final question is that, I mean, do you anticipate, I mean, some availability challenges when it comes to some of the raw materials you are using? And what kind of cost inflation you currently see in your raw material bill? And do you think you will be able to compensate with price increases, I mean, if there are raw material pricing increases during this year?

There are two types of shortages. One can be logistical shortage as we know the kind of ocean freights and some of those routes are currently in big changes. So getting from Asia to Europe is a couple of weeks longer journey than it used to be when you could take the shortcut before the war.

So that is an issue of its own. Freight, those go up pretty much overnight. So containers shipping them across the world because of the fuel costs has increased. Jussi had a great slide in his deck on our hedges. It's not only currencies, but it's also some of the key commodities that we use. And hedges don't solve that problem. It just gives us time then to adjust on our market pricing, et cetera.

And from that perspective, availability per se, I'm not aware of any of our key input materials that there would be problems currently with the physical kind of availability of the same input material.

Maria, on that one, when we entered into this year, we assumed that tariffs will continue as they were end of the last year. Now we know that end of February, there were some changes there, which are benefiting us. And of course, these kind of things are somewhat offsetting impacts what Jyri just described, especially when it comes to logistics.

The next question comes from Joni Sandvall from Nordea.

A couple of questions from my side. Did you have any extraordinary short-term savings in operating expenses in Q1? Or should we just expect declining cost base from current levels when the actions are starting to kick in?

At the group level, SG&A was pretty flat versus last year. So therefore, follows that pattern what we had. The items or actions put in place in Vita, as Jyri said, they will start contributing our SG&A levels, but they are also more second half loaded than the first half loaded. We continue running those efficiency programs what we have, but nothing like this kind of big one-off positive there in our numbers at the moment.

Okay. Okay. Then going to BA Vita, you continue to see the positive comparable sales growth there. So with the current trajectory, could you give any indication when we should be expecting more normalized production levels?

Not really. As we said, it will take some time, and it's focused on a couple of product categories and manufacturing technologies, mainly around the crystal value chain where the inventory and consequently, the curtailment of -- curtailing the production has been taking place. And that doesn't touch, unfortunately, so to speak, too much the brands that I mentioned that have been growing the most.

Georg Jensen, Royal Copenhagen and Rörstrand, which is -- which are jewelry, other home decor, not in the glass category, so crystal categories much and fine bone china type of categories. So work continues. Of course, getting inventories reduced has two parameters. One is the sellout and one is the input.

The input we can control very much ourselves and have taken those measures and are biting, so to speak, the bitter pill by expensing some of those factory overheads now every day as we go when we don't utilize the capacities as they could be utilized. And then on the other side, the sellout that work also continues. So it's a journey that's not over shortly, but determined to get this done.

Okay. Okay. Then one question on the current tariff situation because there has been changes now in April, obviously, a little bit related to Section 223 tariffs and those implications. So could you give any color, does this have any material impact on Fiskars BA?

We have gone through the recent changes there, especially when it comes to steel tariffs and the likes, how they are calculated. Our current view is that those changes are benefiting us. So the tariff will be less than what we had in our original plans for this year. We haven't disclosed and won't disclose any material numbers regarding this one, but we are benefiting from those.

Okay. Yes. Then lastly, on the guidance, Jyri, you mentioned that maybe someone has been expecting more specific guidance, but should we still expect this maybe later towards the year? Or are you sticking to current, let's say, a bit vague guidance?

The H1 report and the Q3 reports are not written yet and the forecast -- internal forecast processes have not been run -- run and the visibility from July onwards, so from October onwards is not yet there.

So we recognize that, let's say, desire from the market to have more precise guidance. At the same time, we recognize kind of the facts in our operating environment. It's been a bit blurry visibility into certain things. So stuff that we do, we have the confidence that we execute what we have planned and promised. But then what's happening outside we'll be smarter, hopefully, again then in July on that topic when we have seen where the world has taken us to.

The next question comes from Rauli Juva from Inderes.

A couple of questions from me as well related to the Vita Segment. So first of all, was there some clear kind of campaigns or discounts in Q1 related to the efforts to drive down inventories?

On those categories, which I referred to more being the crystal -- kind of our crystal glass type of value chain, we've been actively looking at with somewhat dynamic pricing, but not big campaigns or that type of fire sale type of efforts have not taken place. It's still valuable brands in important geographies, big economies. And one needs to balance with the short-term benefit and the long-term sustainability and viability of the brand.

Yes. And then on the gross margin, if I understood right from the previous answers, you will basically continue the inventory reduction throughout the year. So would that imply that the gross margin in Vita would remain around the levels of Q1 and the second half of last year, maybe throughout this year? Or is there some drivers to push it up kind of besides the inventory reduction, which is eventually then improving the efficiency in production?

We don't guide gross margin specifically, not on a BA level. And there are seasonal patterns to the gross margin of the Vita business, which is heavily kind of gifting season loaded or back-end loaded in our calendar of the year. So from that perspective, unfortunately, unable to give an answer to your question.

Rauli on that, not commenting this year at all. But last year, when we informed and announced those actions, what we were putting in place in Vita to get inventories down, of course, last year's second half, the gross margin started to come down. So therefore, at least we have lower COGS in the second half this year versus normal.

Yes, sure. That's clear. I was wondering if there's anything kind of driving that up from the current absolute levels if you will continue with the inventory reduction throughout this year. Can you comment anything on that if there's price increases or some other kind of levers to impact the gross margin?

Yes. Coming back to my comment that we don't guide the gross margin on the group level and not on a BA level.

All right. All right. All right. Then one on the Fiskars division as well. You mentioned in Q4 report that you had pushed some spring launches due to the cold winter and then it eventually turned pretty spring-ish in March. So did that have some clear negative impact in the Q1 for Fiskars and kind of should be benefiting Q2 if the spring pushes more in Q2 this year?

Not in any material effect. I think we had some -- it's not scary moments, but time when we were biting our nails because the winter was dragging and dragging and then suddenly, it became spring more or less overnight in many geographies actually. And I recall in the winter when we had first loading orders in North America or in the U.S. to some big distributors, then came some blizzards and the authorities closed the roads for multiple days.

And that was fortunately not the end of the quarter, that was in February when we really had some stressful days that, hey, will we make the season there? Is spring canceled? But then spring was not canceled. That's the good news.

There are no more questions at this time. So I'll hand the conference back to the speakers for any closing comments.

Yes, we do have a couple of questions here in the chat, and these are topics that both have been already discussed, but maybe for transparency's sake, I will still read this. The first one was about the curtailments in Vita, how many quarters. But as we said, it will continue. We haven't given any detailed guidance on that. Anything you want to add or...

You're saying well...

Great. Then we have a question about the gross margin improvement in the Fiskars segment. Can you elaborate further why did it improve? Maybe Jussi, you already touched upon that topic.

Very much so. So already started last year when Fiskars BA put in place those actions to mitigate the tariffs there. So they are now yielding results. And as I said already earlier, this Fiskars improvement is very much coming from internal efficiencies. Then the new categories we have launched, they are not yet visibly contributing to gross margin, but they will in the future. But this is very much internal efficiencies what we have now delivered.

And maybe to build on Jussi's comment on the new categories, that's true. They are not visibly contributing because the baseline is still small, but they are not mathematically dilutive that's important. So launches have, from that perspective, also served their purpose.

That's correct.

Good. I think it seems that we do not have any further questions. So I think we are ready to close the call, and thank you for your active participation. And please remember the Capital Markets Day coming up quite soon. So you can register for that either on site or online.

Thank you for joining.

Thank you.

Thank you.

Hello, and welcome to Fiskars Group's Q4 and Full Year 2025 Results Webcast. My name is Essi Lipponen, and I'm the Director of Investor Relations. I'm here with our President and CEO, Jyri Luomakoski; and our CFO, Jussi Siitonen. Let's look at the agenda for this webcast.

Jyri will start with the key takeaways of the quarter and the year. After that, Jussi will continue with the financials. Then back to Jyri, who will go through business area development and also talk a bit about how this year looks like. After that, we will have plenty of time for your questions, and we will welcome questions both through the phone lines and through the chat. You can type in your questions in the chat already during the presentation.

Please go ahead, Jyri.

Thank you, Essi, and good morning. Just briefly before we dive into the numbers and what's been happening in our two businesses. Key takeaways, there are some highlights, some lowlights as always in life.

What we think was really important that our Vita business area actually had both Q3 and Q4, two consecutive quarters growing and that brought also the group numbers to a what I would call a green or black zero in terms of top line. This we need to bring into the context of Vita having had before these two growth quarters, more than 10 quarters of negative growth or flat top line. And of course, as we started in the summer, focusing on cash flow that those efforts were bearing fruit and the cash flow in the fourth quarter was also quite strong, and Jussi will go deeper into how strong and record-breaking that was. But of course, the lowlight is that our comparable EBIT declined, and that was impacted by our own actions predominantly, i.e., curtailing our production to manage the inventories to manage cash, and this had a price tag consequently on the EBIT.

This morning, we also announced our plans to turn around on BA Vita's performance and also, we'll address that a bit more in depth in a few minutes. The Board made their proposal to the AGM, and that is to maintain a stable dividend as our policy is saying, stable or growing, EUR 0.84 per share to be paid in four installments. And '26, we expect our comparable EBIT to improve from the '25 level. But that was the key kind of highlights, key takeaways as an intro and I'm happy to hand over to Jussi, please.

Thank you, Jyri, and hello, everyone. Let's start first with Q4 and then go to the full year here. When it comes to net sales there, as Jyri mentioned, we were able to report positive growth now in Q4, 1.3% at constant currencies. It was very much driven by Vita. The good thing also is that this growth was very broad-based. When we take our top 10 countries at group level, 7 out of top 10 countries were growing, including USA, Sweden, Japan, China, Australia being the ones which were at this kind of mid even to high single-digit type of growth.

On EBIT, we came down EUR 10 million versus last year. Out of this approximately EUR 10 million, a bit more than EUR 4 million was Vita related. The remaining part was quite evenly split between Fiskars BA and other operations. Gross margin came down 200 basis points to 47.4%. Roughly 150 of this 200 basis points was tariff related. And as Jyri mentioned, the focus what we have had in second half, especially now in Q4, was there on the cash flow. And we are able to report now all-time high Q4 free cash flow. And actually, this Q4 was the second best quarterly cash flow overall in the recent history of this company.

Moving then to full year results. So here, we came out with a flat top line. And despite this flat top line, we had countries with solid full year, high single-digit, even double-digit growth like Sweden, Japan and China. On EBIT, we were down EUR 35 million versus last year at EUR 76.4 million. There were three main reasons for this drop what we had in EBIT. The big one and the main one is low production volumes and negative variances that one that especially in Vita. Then we had more investment in demand creation, especially in marketing. That's on one topic there and tariffs, which we were then able to partially mitigate, but that was the third big reason.

When it comes to full year gross margin of 47.1% there, which was 170 points down versus last year, roughly 100 basis points out of that 170 was tariff related. And despite the strong second half, especially Q4 free cash flow, our first half cash flow was rather challenging. And there, for the full year, we were short roughly EUR 5 million versus last year.

Let's dive a bit deeper at these changes what we had in full year when it comes to EBIT. And let's start here on the right, BA Fiskars. So, BA Fiskars, as you can see here, the tariff impact what we had, BA Fiskars was able to fully practically mitigate the negative tariff impacts there, mainly through the OpEx efficiency improvement, but also the underlying gross margin, excluding the direct tariff impact improved in 2025. Then Vita here in the middle, you can see this gross margin negative impact there coming from those low production volumes. What I would like to highlight here that it's very production volume related, not sales volumes, therefore, this kind of promotional sales, what we have had, they have mainly been there for those categories which are end of the line anyhow. So, the big decline is very much production volumes.

Moving then to the cash flow. As I mentioned, we were able to deliver strong Q4 cash flow of EUR 91.5 million here, EUR 22 million better than last year in Q4. That's mainly driven by change in inventory. So, we were able to take inventories down in Q4 by EUR 35 million approximately, which is almost the same amount more than what we had last year in the same period.

Also, the tight CapEx control what we put in place, we were able to cut CapEx by EUR 6 million versus last year same period. And then on a full year basis, however, the inventories continued increasing by EUR 11 million on a full year basis. There also the CapEx was partially compensating or reduced CapEx was partially compensating this one, but the full year cash flow of EUR 76.3 million is some EUR 5.5 million behind the last year.

Then on balance sheet. So net debt to EBITDA, we came down in Q4 from 3.7x to 3.3x in one period. Net debt came down EUR 92 million in Q4. And out of this EUR 92 million, roughly EUR 20 million is relating to lease terminations and the rest, roughly EUR 70 million is pure cash flow driven improvement what we had there. Of course, this 3.3 is not what we have given as a target of 2.5, but important is that we are now able to demonstrate a declining trend there when it comes to our net debt EBITDA. 

Then the last but not least, when it comes to our sustainability targets there, if we start first with focus more here on those environmental targets, we were able to improve slightly our circularity targets being 50% by 2030, 50% of our products and services are coming from circulated materials. So now it's 27%. So we are well up to speed to this 50% target by 2030. Of course, all these kind of, I would say, low-hanging ones are already implemented, so getting the target is getting challenging and challenging as we speak. 

When it comes to emissions, both Scope 1 and 2, we were able to improve. Now it's 62%, target being 60% by 2030. So, it seems that we are already there. However, this is very volume related and volume driven. And now when the volume has been a bit down, also this percent is improving. Once the volume are increasing, the 60% remains to be a good target. 

The only environmental target where we are behind last year related to Scope 3 emissions for transportation. Now it was 18%. The main reason is both sea and road freights in U.S.A., partially because of higher volumes, partially also because of the way our carriers defined these emissions. That's very shortly where we are with the numbers. And now giving it back to you, Jyri .

Thank you, Jussi. what's been up in our businesses, Vita. Net sales growth that we mentioned and also the comparable EBIT decline and what was the key driver there. So 4.6% top line growth in Q4 and 3% for the full year. And this is, of course, a prerequisite that we have growth helps turning the business around. When we look at sources of growth, D2C sales performance was good and both Danish brands, Georg Jensen, Royal Copenhagen performed nicely as did Momin Arabia. Of these 2 celebrated also big birthdays, Royal Copenhagen got 250 years last year and Moomin as a character filled 80. 

And when we look at the drivers behind the top line, Jussi already mentioned and we've been reading in many reports around our company that the decline in profitability would be relating to the inventory actions in terms of sellout but that's not really the case. It is really the scale down of production. And as a consequence, when you start to curtail production, you have still fixed costs that are not absorbed by the inventory, and they are expensed immediately. So it's been very active and deliberate actions that we've been doing. 

This morning's announcement, big changes planned for Vita. And clearly, we want to reset the brand with a structure that it's meeting our ambitions, building global iconic desirable brands and scale for profitable growth. It involves also structural changes in terms of some business unit combinations, which are not impacting the kind of sales end necessarily, but more the back office and the overhead structures within Vita. And that's extremely important. 

We also mentioned a few moves already that are now kicked off in terms of manufacturing in Denmark, moving our distribution center from the U.S. East Coast to more kind of e-com optimized location and at the same time, outsourcing it. So, creating a more of a variable cost structure there. So these are the key kind of actions. But then what do we expect as a result out of here? We expect a net reduction of approximately 310 roles when the program is completed. That means then upon completion, we will then have annual savings of around EUR 28 million.

And of these, in H2, as we have now announced the program and the plans, this triggers employee and union rep consultations in different geographies, they take their time, then having after those processes conclusions and taking then the actions that those consultations have arrived to means that the economic benefits of the planned program start to trigger in the second half.

So approximately 1/3 of the EUR 28 million is expected to be income statement effective and impact our profitability in this '26 in this year, but that happening really in the second half of the year. And then of the rest, there will be some tails flowing into '28, but the majority of the rest in '27.

Our estimates of the one-off costs, which would be recorded then as items affecting comparability is in the magnitude of about EUR 9 million.

Some highlights in the business. I mentioned for Copenhagen's 250 years anniversary, a big event in Copenhagen at our flagship stores, which is attracting a lot of people is the Christmas tables settings, and that's really drawing crowds and keeping the interest up in the brand.

Moomin Arabia launched the -- actually the largest collection, festive moments and that was subject to pretty high demand because the MAX was sold out during December. That's what the desirable brand is.

Collaboration between a fashion brand, JW Anderson and Wedgwood also delivered good engagement and commercial traction.

And for New Year's Eve, if you happen to spend it at Times Square in New York, you would have noticed the Waterford crystal ball coming down, and that's also now visible in the shop-in-shop at Macy's flagship in New York at Herald Square. So, market kind of being more active and visible in the market. And as we see from the growth numbers, these things also bear fruit, which is extremely important.

Moving to BA Fiskars, decline in the top line and tariffs, we were pretty much in the epicenter of the tariff topic as a business with our significant exposure to the U.S. market. So comparable net sales declined 7% in Q4, snow came a bit late for the fourth quarter in Europe and in the Nordics, which is a big kind of a seasonal market for snow tools in those years where there is a lot of snow and 4.6% for the full year.

And tariff uncertainties, recall last spring when the tariffs kicked in, that was a big situation where consumers were confused and trade was confused, what's going to happen, et cetera. Excellent mitigation work by our teams and things started to stabilize. And Jussi mentioned in the U.S., actually, at the end, our business was growing.

And this tariff mitigation has been an important achievement and extremely critical for having what I would call still having seen some of our competitors and peer companies reports, I think we can be proud about the margins we've been able to sustain also despite the top line decline.

Some highlights, already in November, we arranged a get to know BA Fiskars event for investors and those materials have been available to the public pet care line has been well received by the market. That's important. It's about minus 10 centigrade in Helsinki, a lot of snow and many other European geographies are also freezing.

So, Fiskars Power, which is now the first products have been shipped actually to stores. It's not yet the high season for these products. I don't know where I would use it, even though I'm definitely myself also personally going to buy one. But this is a type of a sample.

The slide was not wide enough to bring the entire innovation fireworks to the slide, but many, many good and nice things that have gained shelf space and traction in the market are coming from our Fiskars business area.

With the financial statements release, the Board also announced their proposal to the Annual General Meeting of maintaining the dividend at EUR 0.84. This is when you look at the payout ratio to EPS, indicating a very high payout ratio.

We need to remember that these items also include our EPS some write-offs and so forth. But then on cash earnings per share, about 2/3 is in line with the proposal to be paid out.

The change to earlier practice where we have been paying dividends in 2 installments, one in the spring, one in the autumn is actually to get into payout per quarter, so March, June, September, December payout, also matching our cash flow pattern in our normal business seasonality better. Guidance.

So we are expecting our comparable EBIT to improve from the '25 level, '25 level was 76.4%. And what's behind that thinking? We recognize that the uncertainties in the global economy will persist also in '26.

We clearly count for the EBIT support from the planned changes in BA Vita in the second half of the year. Our active tariff mitigation efforts have been successful last year. And based on that performance, we have a confidence that we will be also successful in '26.

The flip side is that the inventories, even though we had a significant decline in our inventories, we want to further improve that net working capital item, and it will have some negative impact, and at the same time, we also know that the U.S. tariffs, remembering that liberation day was in April '25.

So after -- right after the first quarter. steel tariffs came into force in August, if I recall the date correct, and those impacts then annualize into '26.

We do not give quarterly guidance, but I think it's important to remember these key aspects, Liberation Day, April, so Q1 last year's comps are pretty good. 

Second half impact from the Vita changes and steel tariffs started in the third quarter last year. So just to keep those in mind when you are modeling how the year would look like. And this is maybe prophylactically addressing if there is a criticism that this is a Fluffy guidance, yes, it is to some extent admittedly. 

But if we have started this morning in the first countries, change negotiations and similar consultation process with our employees on the Vita program, they take their time and then to implement then the conclusions and the decisions as a consequence of those negotiations are topics that we thought that it's better to be coming out now with this type of guidance. 

And then when things advance and we know more on the precise kind of timing of certain actions and so forth, it always leaves us some room to clarify and specify more in depth the guidance. Some of our teams have been very active over also the last weekend advancing the technical part of our separation of BAs into subsidiaries. So those splits into entities in some major countries have also now taken place. 

So, we think that we are well on schedule with our Q1 deadline having the legal structure behind the BAs also implemented, which then will also help us in terms of the transparency measurability, for example, to the exact capital employed in each of the businesses. So, this is moving ahead as planned. And that's maybe the good segue to the paid commercial, so to speak. 

We are planning to arrange our Capital Markets Day on May 12 in Espoo, Finland, which would be then for institutional investors, analysts and then, of course, online attendance open on a broad basis, and this is now the plan a bit after we have completed the incorporation of the BAs and have more transparency also to shed some light into those aspects in May. Look forward to meeting you there. 

So, in summary, key takeaways. top line growth in EBITDA, where that was not the routine and practice over the last prior 10 or 11 quarters, now 2 consecutive ones is giving, of course, also forward-looking us confidence that we can grow. We know the elements for that cash flow, important for managing our balance sheet and capital structure. 

EBIT decline last year, really driven in a big way by our own actions to focus on cash flow. So that's the other side of that coin. Definitely, the beta plans now going into negotiation and thereafter to execution, dividend staying stable, moving to a quarterly payout on the dividend and then guidance growing or improving the comparable EBIT from last year. That takes us to Q&A.

[Operator Instructions] Yes. Thank you, Juss and Jyri. Let's first see if we have any questions through the phone lines. 

The next question comes from Maria Wikstrom from SEB.

Yes. This is Maria from SEB. I have 3 questions, and I would like to take them one by one. So I'd like to start with the top line growth in Vita. So if you could discuss a little bit more specifically, I mean, which markets you see performing better than the other markets. So which markets or geographies were behind the growth in the fourth quarter?

Yes. So as I said, the growth was very, very broad-based on what we had in Q4. And bearing in mind that actually Vita came down and Vita was the one growing. So if I'm right, exactly, 9 out of 10 top countries for Vita were growing. So it was broad-based, big countries covering 90% of the business. At the same time also when it comes to channels we were able to demonstrate a good growth. Also when it comes to consumer, 80% pulled up and with an E-commercial only 12% up in Q4. Without going to each of the countries, is where broad-based [indiscernible].

So what would make you confident this time around that, I mean, making this large cost saving effort that you will actually record the savings on the EBIT line?

And for me, having joined this role as an interim in April, it's easy to say we haven't, I fully agree, we haven't been perfect in executing. Some of the old programs where it's been -- yes, I've seen at that time as a Board member that, yes, a lot of people have departed, but kind of gradually, there's been some type of a revolving door filling back some of the positions. And that happens quite easily when you look at different businesses and these type of programs.

What I think is the key differentiator here is that there are structural changes, combining some of our business units, changing really the org structure and clarifying the accountabilities, but those structural changes drive then reductions in certain overhead functions and so forth in the marketplace. So that clearly drives the confidence that these are there to stick and it's on a very frequent loop by group management, by our Board and definitely every quarter by the market that we are executing what we have promised.

Maria, on that one. So you're absolutely right, bottom line matters. At the same time, what we have seen is quite, I would say, even dramatic top line drop what we have had. So therefore, loosing the volumes at the same time driving fixed cost saving actions there. Many of those actions are just there to mitigate the volume drop.

And then my final question is on the gearing as I think it surprised me and I think part of the market that you the Board of Directors decided to keep the dividend flat compared to last year, even that, I mean, the gearing is down, but we are still much above the target level at 3.3%. So when do you expect, I mean, to reach the targeted gearing level at 2.5? And what makes you so confident to pay out the last year's dividends with the current gearing level?

So, you refer, I think, to the leverage here and where we have set a target to be at maximum 2.5 and that target is still valid. Important is that we move towards that one. And of course, when the Board considers the dividend proposal to the AGM, they inquire management and look at our long-term plans and the capital needs and also the confidence in our plans to further reduce inventories or improve our net working capital performance. And that's typically then having set many years in the Board on the other side of the table, so to speak, to drive the confidence what is something that's good and the right balance of rewarding shareholders but at the same time, being true to the targets that the company has set and the needs of the business. And from that perspective, that has been basically the process.

Yes. As I said, it was very encouraging what we did in Q4, getting net debt down by EUR 92 million out of EUR 70 million something was really cash flow driven, the remaining being those lease terminations. On that one, we have been also quite openly said that the potential what we have there in trade working capital, no matter what are the measures, what are the KPIs you are using and benchmarks there based on our previous performance pre-COVID time, we do have roughly EUR 100 million potential in our net working capital. The actions announced today are also targeting this excess inventories, excess working capital, what we have. So we do have sources available for internal funding.

At this point. The next question comes from Joni Sandvall from Nordea.

Maybe continuing still with the cost savings program. Can you give any more color on the rightsizing of the business? I mean, are you expecting to exit some production site out of the Nordics? Or how should we view this? And what is your actual target for own production levels in Fiskars.

The announcement does not lift any exits per se, but rationalization, what we do and where that's one of the key parameters here. And the aim is, of course, to right size the production, the supply to match the demand and the fact that we still have inventories, as Jussi alluded to, that net working capital has some room to improve, and that's driving those. But they are now subject to the negotiations in different sites. And consequently, after those negotiations before I start to put dots to the map. And then after that, we can give a bit more flavor and update on the, say, geographic coordinates.

Then maybe a question on Fiskars BA. There has been strong mitigation of the tariffs. But how confident are you now entering into '26? And how we should view the net impact from current steel tariffs and mitigation actions for '26?

Yes. Joni, as I said, the impacts what we had in 2025 and how they were mitigated mainly through OpEx savings so that the underlying gross margin improved. The toolbox is pretty much the same. The impact -- the incremental impact of the tariffs, of course, is the whole Q1 when it comes to those liberation-based tariffs and then impacts from the steel tariff from August onwards. The plans for Fiskars BA has in place are still targeting to mitigate these impacts there. What's the magnitude there? It's a bit -- I would say it's a bit less than what it was in 2025, but we are still talking about a significant amount we are now mitigating through those very resilient plans what Fiskars BA has put in place, including also this production re-foot printing.

And maybe a question also, you have now the new categories, the first batches sent to the retailers. So could you give any indication of what level of sales should we expect from these categories in '26?

We have not quantified sales by product or product category per se. As I said, on pet care, the initial feedback has been very positive when that was launched in the first market, our Ultra Axis, which was not on the slide, but one of the key launches doing a kind of a rebasing on the a wood prep category have had a very positive feedback and demand and restocked many times to key distributors also outside of Finland. So people are doing wood prep work also outside of the Nordics, as we have seen. So reception and feedback from the market have been very positive. And some of these, like power, it's a completely new category for us. 

Yes, we've been doing poppers, pruners, but all kinds of hand-operated, and now we are getting the help of power and electrical drives to do that. There, we don't yet have a baseline. But after the gardening season of this year, we are also happy to comment a bit more on the success and the reception, here at minus 10. I don't think too many people think about guiding tools. And in some geographies, we actually postponed the media launches just a few weeks to allow some type of spring thoughts coming into people's minds.

Okay. And maybe to Jussi, a couple of technical questions, if you can give any comment of the timing of one-off items for '26?

As Jyri mentioned, the negotiations started just today. And therefore, it depends there. So most likely, most of that will be in the first half, but we get back more, let's say, a precise comment on that one once we are proceeding with the negotiations.

Okay. And finally, on the CapEx split for '26, you mentioned tight CapEx discipline now in Q4. So what should we expect from '26?

As you saw, we came down EUR 9 million in 2025 versus 2024, out of which EUR 6 million was in Q4. The full year level, what we currently have for 2026 is pretty well in line with what we had full year 2025.

There are no more questions at this time. So I hand the conference back to the speakers.

Thank you for your questions. And we do have questions in the chat as well. So let's continue with those. First, related to Vita's program. Jyri, maybe if you take this one. Do you expect any negative sales impact arising from these plants?

Not really. When I look at the plans and the structures, where do we want to tackle our cost position? This is something that doesn't lead to, at least in my view would have direct sales impact.

Thank you. Then Jyri, if you continue, when do you expect the production to roughly match your sales volumes in Vita...

Depends a bit on the category, product category, and technology. In some areas, it is likely to be this year. In some areas, it is more likely that it won't be yet this year, and we will be running the whole year with a kind of curtailed production, really to make sure that we get to our targeted net working capital structure. That's the prime focus here.

And on the same topic, but maybe I will give this one to Jussi. Is Vita's 2024 gross margin, which was about 56.5, according to at least the one who asked the question. I don't have the number right here. Is that a relevant benchmark going forward once the production rates normalize? Or is there a permanent negative impact on the GM from some factors?

As we mentioned, the decline that we have had there, 240 basis points in 2025 versus 2024 in Vita, that's very much production volume related, not sales price volume related, but coming production. So, then, assumingly, the logic is correct without commenting on any numbers here. So once we get volumes up, of course, then this fixed cost absorption will improve.

Then, about the Fiskars segment, I will hand this over to Jyri. The first half of 2025 was challenging for the Fiskars segment, especially in the U.S. market. What is your expectation for H1 this year?

Well, as I said, we don't guide quarters. We don't even guide the halves. I don't see any when we had the turmoil of the tariffs in H1 last year. And after that, things have been more normalizing, and the American consumer has also been happy to shop if we leave the winter storms and those types of 1-week disturbances out of the picture. I wouldn't identify any change in the pattern that has started in H2, that New Year City would have changed that pattern in any direction. But as I said, quarterly or half-year guidance is not available, unfortunately.

Yes. Then we have already discussed the leverage, but maybe if Jyri can discuss what the focused measures are aiming to reduce leverage, given that it has remained above your target for 2 years already.

Three elements, I would say, when basically taking the cash flow statement, we are also guiding for improved profits to make more profits. And we need to remember leverage that's net debt to EBITDA. So it improves automatically even in the absence of net debt, not changing when the EBITDA increases. So that's key. 

Then, having the net debt element addressed definitely 2 key drivers. We've had some big-ticket CapEx items over the last couple of years, also partly relating to sustainability and kind of decarbonizing some of our production. And now, definitely the new launches, for example, at Fiskars, there are some tooling investments, et cetera, coming, but they are directly supporting business and the business growth, and keeping the brands relevant. 

But net working capital, as Jussi addressed, we have still clearly as our target to look at the net working capital turnover ratios that we had pre-COVID, then the roller coasters, a boom, and then some doom times out of that. And hence, the last few years are not a kind of acceptable benchmark for us. We set our targets higher and continue that work on the front. So EBITDA up and debt down. That's effectively what the formula also spells out.

Thank you, Jyri. And one for Jussi about the higher silver and gold prices. What is the impact on the Vita or Georg Jensen margin?

This is very much Georg Jensen, both when it comes to gold and silver. So both metals, we have hedged. We have good hedges in place. You can imagine they are well into money at the moment because the hedge rates are coming from last year. Therefore, no immediate negative impact coming from those ones.

Thank you. At this moment, we have only one question. Let's see if we get any more. We have a question about the dividend. Maybe we can give a recap on the proposal for this year, and maybe about our policy. The question is, is the dividend going to stay at EUR 0.84 a year? Or will it change? Jyri, if you still want to give a recap on that.

The Board's proposal concerns the dividend payable out of last year, payable in 4 installments, EUR 0.21 each in the second half of the last month of every quarter, if I kind of remember the precise dates correctly. So from 2 to 4 installments in aggregate, the annual dividend, EUR 0.84. We are not taking any stance on dividends beyond those that are payable in '26. And the rationale relates to the policy, stable or growing dividend, our cash earnings, which are about 1.5x the proposed dividend, and that's basically the rationale in the tree. 

The Board considers always when making those proposals, the needs of the business, CapEx needs, and what is the outlook and confidence in the outlook. And I think that indicates also a certain level of confidence in the actions that we are taking and in the projections that we have for '26.

Great. Thank you, Jyri. And it seems that we don't have any questions at this point. So thank you for your active participation. And I wish you a nice end of the week. And still, before we end the call, I would like to...

Hello, and a warm welcome to the Get to Know Business Area Fiskars event. My name is Essi Lipponen, and I'm the Director of Investor Relations here at Fiskars Group. As you all know, Fiskars Group consists of 2 strong business areas, business area Fiskars and Business area Vita. This spring, we already hosted a similar kind of event for business area Vita. And today, the focus is on business area Fiskars.

Here are today's speakers, Jyri Luomakoski, Fiskars Group's President and CEO; Jussi Siitonen, Fiskars Group's CFO; and Dr. Steffen Hahn, the CEO of Business Area Fiskars.

And here is the detailed agenda for this afternoon. First, we will hear from Jyri Luomakoski, who will open the event. After that, Jussi Siitonen will talk about business area Fiskars from a financials perspective. And after that, we will get more deeper into the business area Fiskars with Steffen. After these presentations, we will have a joint Q&A, and we will take questions both online and from the live audience here in Espoo.

The webcast ends by 4:00. And after that, the audience here in Espoo will have a chance to see some exciting new launches by Fiskars on the fourth floor. But without further ado, Jyri, please go ahead.

Thank you, Essi. And from my side also, a warm welcome, both to you here in the Fiskars Campus premises as well as online. We are excited to have you today here with us. We had an event in May in Copenhagen, where we presented our Vita business area with -- at that time, very fresh CEO of the BA, Daniel Lalonde. And this is a logical kind of continuation of those series. And as we have a lot of exciting things to tell and show today, happy to see all of you here as well as online.

What is the focus of today? As Essi pointed out, we are split into 2 business areas. The one we discussed in May, Vita, it's home decoration, tabletop, some jewelry at Georg Jensen, many, many brands. And that's something that we started to build effectively with the acquisition of Littala back in 2007. And the last move on that side was the acquisition of Georg Jensen in '23.

A bit longer heritage here on the business area, Fiskars, effectively 2 brands. And today, we will be concentrating on the brand, i.e., Fiskars, a bit longer heritage, 376 years and a couple of weeks on top of that or soon 2 weeks on top of that. Gerber is also a part. Steffen will address a bit also on our footprint and presence, Gerber, but focus will be more on the Fiskars brand within the Fiskars BA. Geographically, as a group, we are fairly well spread with equal -- of course, a big overhang in our position in Europe and then North America and APAC, both being important geographies for us. For BA Fiskars, as we will soon learn, North America is, of course, of bigger relevance than for Vita. But it's not only a European and North American business. So if you go to some of the prime do-it-yourself stores in Australia, you can't avoid coming across Fiskars products.

And now comparing our 2 businesses here, quickly addressing Vita, which is from a distribution perspective, about half and half, direct-to-consumer, both our about 500 stores and e-com presence, and the other half through distributors, so indirect sales. Geographically, Vita has a fairly big European position, not that big Americas position. And then, again, Asia Pacific, led by Japan and China are the big geographies. But today's focus, indirect distribution model, dominating clearly the business model for BA Fiskars. There is effectively for Gerber, an own e-com presence, and that's where this 3% comes from. Half of the business is in Americas. Not exactly the half -- other half in Europe. So the APAC presence, effectively Australia and New Zealand, accounts for the 4%.

And another distinction also here is that the BA Fiskars is more of sourced products, especially focusing on our North American offering and presence in Europe, actually, most of our offering is manufactured by ourselves. And at Vita, we see here that 60% of what we sell is made in our own factories, both ceramic, so porcelain and glassware factories.

We have undergone a fairly big change in the organizational structure. And personally, I was in the Board from 2016 until not too many weeks ago. And 2020, when the pandemic hit us, we had a matrix that, at least, I had a difficulty to draw all the dimensions of that matrix actually. And that was simplified over the time. And now, since February 1 of this year, we have had a rather simple corporate structure. We have on group roles, about 1% of our people, group business services, that's basically financials, shared services, and IT as both businesses are sharing the same ERP backbone, about 3% of our people. And today, we talk about Fiskars BA, with about 20% of the total headcount or personnel of Fiskars Group being employed at BA Fiskars.

Vita has a significantly higher share. From a revenue perspective, it's slightly bigger. But as you can imagine, if you are selling a lot of hand-painted porcelain plates, you need quite many hands to do that. And that's explaining effectively. Not to mention the 500 stores. Every store employs multiple people. And consequently, it's way more personnel-intensive as a business as the Fiskars BA is.

Why did we do the split? That's a question. I understand there's been a lot of speculation, and it's been on the lips of many people. Obviously, with full accountability, we think that we can reach better results. My personal philosophy is that while we have a lot of smart people also working out of these premises, the group headquarters, but I can't claim that we know best what the Australian or the American consumer needs, how can we charm those consumers in different places that we would have that knowledge necessarily in some -- from many perspectives, remote location, of course, when you are located in Espoo from a very central location as we would say it in that context. But this improves our speed, our agility, closer to the market.

Transparency, measurability, even in the times of the AI, I firmly believe that what gets measured gets done, and that's something we are living here with our division or business areas divided into their -- soon into their even legal subgroups under the holding company, Fiskars Corporation. We can allocate our capital smarter, more correct in a better way that yields the best results for our shareholders. We can set the targets properly. And when we get to the independent legal entities, on the lower left-hand corner, this is one of those topics operationally, since last winter, we've been in this structure. Till the end of Q1, we expect to have the legal part of the restructuring also done, which means that there is a legal subgroup under Fiskars Corporation that is the Fiskars business, and the other is the Vita business.

Through that, we have the entire balance sheet available, also intend to increase our disclosures towards the financial markets for full transparency, but it's also giving us transparency. There might be currently in a country distributors who sell both Fiskars' products. They could be selling some of our nice glassware and the snow shovels and the access, and a few other things. And we have trade receivables from third party. Currently, we can't in the structure as we speak, separate those. So we don't have a full balance sheet, consequently, measuring and even then, in the end, basically rewarding on items that are outside of the income statement, which we have had split for years. This is opening, again, new avenues to be more relevant, kind of sharper focus to the right things.

With this also looking at these 2 businesses, having been now in the operative role basically myself since May, Vita with about 12 brands or if you count all of them, it's probably 100, but 12 active and relevant brands, how to manage that business and then the big Fiskars brand business, different channels, different routes to market, a bit different arguments, how to charm the consumer. This offers us now divided Impera. So the dedication that we can do the right things also within the businesses, and not have a fruit salad from that perspective.

This is a good segue, handing over to Jussi, how Fiskars's business area has managed to get to a resilient business model and also a very efficient capital structure. Jussi, please.

Thank you, Jyri, and hello, everyone. So what is the Fiskars BA financial role within our portfolio? Fiskars BA contributes 3 key strengths to our portfolio: a lean cost structure, an asset-light balance sheet; and thirdly, a very resilient business model what we have there. Let's start first with this lean cost structure.

Presented here, you can find Fiskars BA, Vita BA, and then the overall group P&L structure, rolling 12 months at the end of September. So Fiskars BA is dilutive to our gross margin. That's due to the business model what we have in Fiskars BA. Roughly half of net sales, what we have there is in U.S.A. So Fiskars BA operates in U.S.A., mainly through the big retailers. And typically, in U.S. retailers, the gross margins are lower than what they are with the European peers.

Having said that, at the same time, that distribution is very cost-efficient. So once you get a door open for one big retailer, you have a platform available for nationwide distribution in one go. Of course, you need to prove that product is working, product is selling true, but at least the platform exists, and therefore, the distribution is very efficient.

Another thing on top of the efficient distributions, what we have in Fiskars BA is also when it comes to our general admin cost, bearing in mind what Jyri said that only 20% of our employees are in Fiskars BA. The organization is very flat, very efficient there, and that you can see in the numbers. So even though net sales were down this 3.7% now on rolling 12-month basis, we have been able to maintain stable double-digit profitability. And that shows the resilience what we have in the Fiskars BA business. So that's about this lean cost structure.

Then an asset-light balance sheet. Jyri said that we have a thorough, very detailed balance sheet by BAs once we get this legal entity split completed, but we already have directionally right numbers available. So what you can see here is, first of all, Fiskars BA, that has been built organically. And it follows this kind of CapEx-light approach. CapEx-light approach, meaning here that almost -- whilst almost half of the net sales is coming from Fiskars BA, Fiskars BA is only 1/3 of our CapEx, what we have. And that results in, I would say, relatively high capital turnover, what we can enjoy in Fiskars BA. High capital turnover combined with stable double-digit profitability results in very robust return of invested capital for Fiskars BA. So that was the second topic there.

The third one is this resilient business model. And the best way to illustrate the resilient business model is to walk through Q3 EBIT bridge, what we have there. So as you most likely well -- it's quite well known that actually Fiskars BA is in the epicenter of these tariff discussions and tariff pressures what we currently have there. Despite that, the underlying gross margin, the gross margin improvement, what you can see here based on our own operational efficiency improvement as well as strategic pricing. We have succeeded to improve underlying gross margin more than what we have received negative items there from direct tariffs. So net-net, we were able to improve gross margins in Fiskars BA in Q3. That's only one thing.

The second thing is that so-called OpEx fluidity what Fiskars BA is executing is yielding results. So all the savings what we have had there in admin cost in general cost overall, we have invested back in those top line fundamentals, i.e. marketing, R&D, and the likes. So we are in this self-funding model with Fiskars BA. We are able to continue investing back. And of course, the negative on what we have in tariffs there, we can mitigate, but preferably, we would like to invest that also in the growth. But nevertheless, the model currently works so that we can mitigate the negative ones from tariffs. And this resilience is truly needed. So from April when the tariffs were imposed on top of those April tariffs, the steel tariffs, which were introduced late August, they are impacting on our results. Of course, this year, when they didn't start from the January 1, we have some impacts already on our P&L. We see that next year, we will have the full impact. So we are not off the hook from the tariffs after 2025. They will continue also in 2026.

In the business where 50% of net sales is in U.S.A. and most of that -- most of those products we are selling in the U.S.A., they are sourced outside U.S.A., mainly from Asia. So that's what I meant with being epicenter of these tariff challenges what we have. The current actions put in place already what we witnessed in Q3 and year-to-date September there strategic pricing efficiency improvement. We continue mitigating the direct impacts of the tariff. The challenging part is those indirect impacts. So what is the sentiment there when it comes to U.S. consumer? We know that U.S. consumer sentiment is somewhat declining. How we will be able to mitigate that one?

Our focus is very much to maintain competitive position, securing our market share, and prioritizing our market share and then the cash flow, because that's something we can control. The own actions we have put in place and are putting in place as we speak is mainly when it comes to our sourcing refootprinting. What is the best place to source sustainably so that we can still avoid those highest tariffs there, and that's what we are focusing. How long-term planning can we have? Well, that's challenging at the moment because this tariff environment is very volatile, let's say so. We don't know what will happen tomorrow. But all the plans what we have put in place are now targeting to mitigate the direct impact.

So that's very much when it comes to financial part of Fiskars BA in Fiskars Group. Now Jyri and I will walk through how we see Fiskars BA from a group perspective, what's their role in our portfolio. Bearing in mind from a financial perspective, lean cost structure, asset-efficient balance sheet and resilient business model.

So then I'm now handing over to Steffen to talk more about what is Fiskars' business as such and giving you a better insight on that one. Steffen, please.

Thank you, Jussi. So welcome also from my side. My name is Steffen Hahn, and I lead the Fiskars business area, which is the brands, Fiskars and Gerber. I would like to cover 4 things with you. The first thing is where we are. The second thing is who we are, what we do, and what hopefully, is particularly exciting for you, what we do next. So if we start by looking where we are, a bit of an overview, and I start on the right side of the slide. So you see our country footprint. Today, we are an international brand. We are present in more than 40 markets from North America, over Europe, down to Australia and New Zealand. So we are an international brand, but still with potential to grow in other markets. Well diversified, being present about 50-50 on both sides of the Atlantic, of course, always gives us a nice hedge depending on how the economics go on either side.

If you look at the middle part of the slide, this is our retailer landscape. So for the Fiskars business area, we have decided that we focus on what we are good at, product design, so engineering, design, and brand building. We trust our partners to bigger retailers. So we don't do our own retailing. We don't do DTC for the Fiskars business area. So we are working a lot with big boxes. And of course, that begs the question, how exposed are we? Is there 1 or 2, or 3 retailers that really make the bulk of our sales? And many of you probably know the answer, that's not the case. So even our biggest customers stand for less than 5% of our net sales. And so again, we have a very well-diversified retailer customer base that gives us resilience when things go bad in a certain country or in a certain geography because we have other partners in other areas that wouldn't be as exposed to that.

And then lastly, when you look at our product categories, we have a seasonal business. But the business happens to be fragmented into subparts that have different seasonality. So we have garden cutting in spring. We have back-to-school in summer. We have in fall, the axe business that is very pronounced there. And then we have -- as we run up now to Christmas, the Gerber business, the cooking business, and our snow tools, depending on how the weather goes. So we have -- each of our subcategories has a different geographical profile, which again makes us relatively resilient with the different seasons on our business. So overall, we are very well diversified as a business, geographically, customer base, category base.

Yet we have one uniting factor. That's a key competence that we believe we can do better than anybody else. And that's cutting. Cutting is something that consumers care about, clean cuts, and they are willing to pay a premium for that because they acknowledge that there are tools that are better than others. And so we can command the price premium quite a bit when you look at our scissors in the cutting area. So what you will see later is that also as we think about how do we expand our portfolio to cover more consumer needs that we're always looking for what do we -- how do we have a right to win as we enter new categories so that we stay true to our core.

Our brand has good penetration. In the high season and after summer in the U.S., during back-to-school, we sell 100 scissors per minute, statistically, if you do the math. The amount of stick tools we sell in the Nordic countries, so Scandinavia, Finland, amounts up to that we mathematically sell basically stick to every 10th person in the population every year in the Nordics. And when you look at the amount of products we sell in Australia, we should be in about half of all Australian households. So we have a foot in the door. And as we now expand our portfolio, we have fantastic opportunities to sell across and to sell up. And we are following that path, which you will see a little later.

When you think about the penetration and the foot in the door, we have one business that is -- that we're very proud of and that is very attractive for us, access, where we have major upside. So our market shares, when you look at value is about 25%, give or take, depending on where we are in the market. But on the unit side of things, we're only selling about 10% of our units in the space.

So when you think about the axe category, we are now -- we are shifting focus and say, how do we convert classic wood shaft axe users into our type of axes. That is very attractive for us, volume, economies of scale, premiumization, and it is very attractive for our retail customers because we create category value in a category that not necessarily is growing on its own. It's beneficial for the consumer because when consumers use our access, they realize how good of a product it is. And it doesn't necessarily tell itself that on the shelf because the shape is similar to what you're used to, but the functionality is really one of a kind. So there's a massive opportunity that I wanted to highlight of how we are using our initial penetration in these countries to now try to more deliberately expand our business, and how we can surround consumers with more of our products.

We are serving our customers with what we think is a world-class supply chain. So we have warehouses in North America, in Canada and in the U.S., in Europe, in Finland and Poland, and we have a warehouse in Australia to serve our customers. And that is fueled -- that supply chain is fueled by 4 own manufacturing sites that we have. So in the U.S., we have a manufacturing site in Portland on the West Coast, which is the Mecca of knife making. So our Gerber business is producing our premium knives there. We produce axes and scissors in Billnäs, not far from here. And then a little further, but still not far. In Sorsakoski, we produce our cooking equipment. And then in Słupsk in Poland, we are producing a number of our gardening tools. So rakes, spades, the weeder, a product we are famous for, and some of our Puna.

This was where we are. Now let's look at the who we are. Some of you have heard this before. And so I try to give a bit of a different take on who we are because it's very difficult to actually grasp what 376 years of heritage are. Early in my career, I used to live and work in Switzerland in Geneva, which some of you enthusiasts might know is the cradle of watchmaking. And amongst others, the oldest watchmaker in the world is based in Geneva, Vacheron Constantin. And when I lived there, they had a very intriguing campaign. They would depict historical events. And then they would say how old Vacheron Constantin was at that time already, to showcase how old they are.

So when Napoleon was born, Vacheron Constantin was 14 years old. And when the U.S. signed their independent Declaration, Vacheron Constantin was already 21 years old. When Vacheron Constantin was founded, Fiskars was 106 years old. So Fiskars is 106 years older than the oldest watchmaker in the world. That's pretty mind-boggling, I find when you think about it. So Fiskars was founded in 1649. Franz Mozart was born in 1649, which was the great-grandfather of Wolfgang Amadeus Mozart. And in 1649, the Maryland Toleration Act was signed, which allowed all people on what today is the U.S. on the -- today's U.S. territory. So it was more than 130 years later to worship any kind of religion. Is that interesting?

So in 1649, Fiskars was founded. We believe the Fiskars brand is much bigger than its current sales. And my team and I, we are determined to change that. So sales up that is. And we believe that Fiskars is really not only a brand or a very old company, it really is a part of cultural heritage of Finland and of cultural heritage of all. So I feel incredibly privileged to lead this incredible business. So 1649, more than 99% of all companies that -- or businesses that existed in 1649 have gone extinct. There must be something very unique about Fiskars to have survived so long. Survival of the fittest. Obviously, something very unique in our DNA. And I believe that is our ability to adapt. You might know Charles Navin said, it's not the strongest or the most intelligent species that survives, but the most adaptable. And so I think 376 years speak for themselves. We were able to adapt with changing consumer needs.

So on the very right side, we were Dyson before Dyson with a head dryer. Fiskars had a microwave oven 20 years before they broke through in the market space on the left side of the screen. Fiskars did plates and cups and plastic trailers, Fiskars did excavators, Fiskars did traffic lights. So Fiskars has done a lot of things. And we've constantly moved with the consumer with changing needs and solved problems they had so that we would stay relevant, and we were able to make a profitable business. A few examples.

So Fiskers invented a number of things that we still have today. So we have basically fundamental innovations that or inventions that we did and that we then could continuously innovate to make things better. And here are a couple of the examples. They are relevant still today and, as you will later see, also beyond. So the plastic handled scissors. Scissors used to be made out of complete steel, fully steel, which was very expensive. And so Fiskars actually invented these plastic handled scissors, which made them more affordable to consumers. And then we innovated. So we just recently launched our sixth generation. People are more well set today than they were in the '60s, which makes hands on average thicker. So you need -- you have a different anatomy as a result, and we adjusted the scissors to go with that so that they are comfortable use. If you today use on average the scissors from '67, they would feel pretty tight.

So -- then the power gear mechanism on the very right, 1996. There is a physical limit of how big of a branch you can cut. And Fiskars came up with this gear mechanism so that you're basically up to 3x the force that you have naturally, you can apply to a branch, so you can cut thicker branches. And those of you who do gardening, you know how it feels when you have this branch. You can't cut the bugger. So that is a thing of the past with our power mechanism. And we built on that, you'll see later on an innovation that we have that is taking that to the next level, because there are downsides with the gear as well that we're solving. So we continuously make the products better in innovation steps based on what we originally came up with in '96. -- the ropeless pre-pruner. Again, if you're using these tools, you get stuck with the rope.

If you have one, I inherited one from my father with a rope, and it's not particularly convenient. Fiskars solved that problem. And then with the rope internalized, Fiskars could also come up with a gear mechanism, so you could cut ticker branches, which makes it incredibly productive because you don't have to climb up in the tree with a ladder or even get a landscaper who does it for you, and it's pretty costly. So again, an original invention from '97 that we have innovated. And again, you will see later of how we're taking this forward.

The claw weed puller. So it actually, if you have velines, it tears out the whole plant, including roots, so they don't regrow, and you don't need to go down. If you do work, you have pretty quickly saw back. And so we solved it because you lift it up, it is stuck to the tool, and then you can unload it. So a number of things. It's not mind-blowing invention, but it makes a task of a consumer so much better that they see the benefit and want this tool over everything else that's available in the market. And so we do this about a broader range. This is a few examples.

Now what's nice about Fiskars is we're not only good at solving functional problems, we also add emotional value, as evidenced in many of the wins we have in the design space, Red Dot as an example. What does that mean actually designed? For us, it means we have ergonomics that are truly based on insights of how our tools are used. We'll showcase that a little later about how much of a difference things can make to the handling, to the balancing to the weight when you really understand how the tool is used in practical terms and how you design for that.

So economics lead to health benefits, you have professional landscapes that use these tools 8, 9 hours a day. That makes a huge difference. We also offer aesthetical benefits. Some of our tools are used in what you would call demonstrative consumption situations. Other people see you having it or using it. It's part of your interior. So you want it on the event, it's on display, you want it to look nice. You spend a fortune on your interior design. You don't want to have outdoor tools that are just functional. You want them to look nice too. That is a value that people are ready to pay for.

And we have really, I think, mastered that art. We have -- and we are intentionally investing into it. We have the Chief Design Officer. We have more than 10 industrial design engineers. And what you see here, the quote on the chart shows you that we are amongst the top of the companies when it comes to industrial design. And the top of the companies means we are amongst the likes of Apple, Pininfarina, Porsche Design, Dyson, which you wouldn't necessarily expect from a company of our size. So really at the top end of design capability as judged by others. So -- and then when you think about sustainability, which is always a topic, Finland happens to be a relatively sparsely populated country. And that luckily makes nature present pretty much everywhere. It's always present.

That's very nice because it's a good reminder of our obligation to protect it. So for us, care about the environment and making sure that we reduce our impact on the environment is who we are. That's really in our values. It's not just an annual report. And so we have 3 main pillars how we cater for that. The first is we make tools to last, durability, which goes very nicely hand-in-hand with the quality expectation and perception that consumers have about our tools. The second pillar is circularity. You know we have publicly committed to a target. We want our viscose products to be by 2030 made out of 50% circular materials. We have a milestone in '25, 30% on our path to get there, and we've just surpassed that. We have about 32% of all of our material we use in our products to be circular. And in some areas, we have really pushed it to what's technically feasible. So when you look at our cooking equipment, you cannot -- for process reasons, you cannot go to 100% of circular material, but you can go beyond 90%, and we've done that on stainless steel and on aluminum in our cost factory. So we are really on the cutting edge of what's technically feasible when it comes to the amount of circular materials.

And then lastly, repairability. Of course, it's much better for the environment if you don't have to replace a whole product, but only parts of it. And that happens to coincide with a very attractive spare parts business financially. So again, ecology and economy go nicely hand-in-hand on the repairability front. And so this is what we have on sustainability. And if you then look at what does that lead to? So we are focused on solving functional problems. We are focused on adding emotional value, and we are focused on doing so in the least environmentally impacting way. And that has earned us a leadership position in garden cutting. Pruners, tree pruners, axes, you have an edge here, spades. So we're a leader in garden cutting.

Given that we invented the plastic handle scissors and then continuously developed our portfolio there, we also earned a leadership position in scissors, both in adult scissors and in kids scissors and related crafting tools. In kids, there is now an interesting trend emerging, which is away from screen time back to crafting. So parents more and more look for activities they can give to their kids that sometimes earns themselves an hour free time where they're busy, but they develop their motoric skills. They don't look at an iPad, but they get active. And we have an expanding portfolio to cater for that. The same is true for adults. More and more people look for what they call digital detox. And so we internally call this grandma hobbies are on the rise again. [ Corse ] is growing more than 200% in the U.S. So there are things that are coming back, and we have a portfolio to capture these consumers in our offer.

Now you could think there's a lot of offers in the scissor space, and that is true. But the Fiskars orange-handled scissors really is a recognized icon in the marketplace. This is -- you see here the CNN-style article. We've sold more than 1 billion pieces, which, of course, means we have a lot of experience of how to do these things right. And we know without being able to disclose names here, but we know that a lot of people use in their professional purposes, our orange-handled scissors when they really want to get the best possible result. Tailors and companies, automotive customization to cut leather and things like that, architects to build models. So our scissors is found in the offices of people that really care about the results globally. So we've now talked about product. I want to wrap it up with a part of our portfolio that is cooking.

Cooking is about 10% of our business, profitable. And again, you see here our nod to our cutting competence, knives, scissors is interesting. I've just been to Korea in Korea, a lot of food in the kitchen and on the table is cut with a regular scissor instead of what we would cut here in Europe with a knife. And then Gerber. Gerber is about 6 of our business. You saw it earlier on the category mix when I talked about where we are. And within the Gerber brand, more than 80% of sales is in cutting tools or cutting-related tools, so knives and multi-tools.

So if we move from product, the physical product now to the brand, our brand is present and highly regarded. So the National Collegiate Athletic Association, so college basketball, they have a custom that when a team wins a major title in the U.S., they would cut the net from the game and keep it as a memory for that title win. They have an officially appointed scissor for that, Fiskars. In the U.S., we are also on the teachers' list. So every year, when school kids, they get a list of equipment they need, Fiskars is on that list. And then if we go to the other side of the Atlantic, in Finland, in '25, Taloustutkimus named us as the #2 most reputable brand in Finland. We've done a number of changes to our brand management organization, which I'll cover in a second. And this is a testament to that what we're doing is working.

We were 8 the year before. So we're up from 8 to 2 in Finland. And we're winning consumer tests in other areas, too. Test factor in Sweden, an important market for us, in Germany, in Poland. So our brand has a reputation for quality and design and is acknowledged by the people in the marketplace. Brand management will have an even more important role in our future. So we are very good with product and design, and we want to up it even on our systematic brand management. And so I talk a bit about the numbers and the quantity, but then also the quality. Before I do that, I want to talk about how we handle cost.

So when I came in, in January, we looked at what are our strategic priorities. You saw we have a relatively diversified portfolio, but of course, that always lends the risk that you try to do too many things in too many places. So we've defined a narrow set of priorities. What are the priorities we really have to double down on because this is where we have an overproportionate return for our effort and investment? So we defined our strategic priorities, and then we looked at our organization. Post-COVID, there was a contraction of businesses, not only for us, but for the market in general. Of course, that created a lot of turmoil, organizational changes.

And so we said we need to streamline our organization to be able to perfectly set up to execute what we've now defined as priorities. We implemented this multiple ways. And as a result, we have lower costs, but happier people. So we measure every month in our town hall if people -- our own internal people, it's a global town hall, if they agree with the direction -- if they agree with the direction we are taking, and if they know what their contribution is to it. It's on a 5-point scale. And since we started this in January '24, we've improved it by almost 1 point on a 5-point scale. So our people are clearer. They agree with the direction, they know how to contribute. And our employee engagement score also is up. So we aligned our organization.

The saving out of that gave us the freedom to do 2 things in parallel that are usually conflicting. We were able to defend our profitability with everything that's going on right now, and we were still able to invest more, what Jussi alluded to earlier, into our future. And so when you look at the quarter 1 '24 as a base, we are now 50% higher media invest than then. So since I'm here, we've increased our media investment by 50%, admittedly from a relatively low base, but you all know what happens if we have great products and we tell more people about it. So we are very excited once the tide turns to see what that then unleashes when we also have a bit -- just a neutral market. We're not even asking for a tailwind when we just enter from a negative to a neutral market, and hopefully, at some point in time, also a bit of tailwind.

Yes. So what does this do now if we look at our EBIT numbers? So if I focus first on the green line, that's our EBIT. profitability, so in percent. You see on the screen that we are substantially above pre-COVID times and that we actually -- it depends on how you want to read it. I want to read it that it's slightly up, but we are actually able to defend our profitability in a market that is not exactly helping. We have pressure on the top line. We have pressure on the cost and yet we were able to protect our profitability, which means that we -- while we were investing in our future, more media, also more R&D, you will see it in a second, we were able to defend our position in the top of our peer group when it comes to profitability in these difficult times. And while as you can see on the orange graph, our sales were under pressure.

And so if I draw a quick interim summary before we move on, so we managed to take cost out and still have happier people that are clear where we go and what they need to contribute, and we were able to defend our profitability on sales decline while investing more in R&D and media. These things are usually conflicting, and I'm pretty proud of my team what they were able to pull off in the time we've worked together. So let's now look at what's next.

To drive towards profitable growth, which is our ultimate aim, we have a very simple model, 3 pieces essentially. We want to continue focus on innovation, expand our portfolio. We want to be present in more retailers. So broader distribution, deeper distribution, better quality of distribution. And we want to drive awareness with media, with advertising. So in other words, we want to serve consumers with more products they can buy from us in more places and let more people know about it. And if we double-click on the first part of that, so innovation, over the last 20 months, we were able to more than double our innovation pipeline. We will show you 4 examples in the following, but we start with a little video.

So that's our new top-of-the-line product, the Fiskars Ultra Axe. I used it this weekend. I can still feel it. If you have an old woodshaft axe in the olhack and you buy this and use this, I guarantee you it will be a revelation. This product is incredible. And so this is our new top-of-the-line range. And as you probably saw in the advertising, we are using this to give people an argument why they should buy this instead of woodshaft axe. You saw the demo. It truly is sharper. It truly -- you can truly drive with the tank actually over it. It flexes back. You can not separate the head. And I have myself had a woodshaft axe, an old one that dried, the wood dried. I was using it, and the head flew away, and on the other side where my kids were playing. You appreciate that this head cannot be removed from the shaft once you had such an event.

Now I hope not everybody has that experience and then buys our axe. I hope they buy before that. But this is really one of the products that we have that we think will really make a difference in our axe category and start harvesting the 90% of the market that's still out there for us to capture. So it is -- you can tell I'm convinced this is a great product. It actually has an innovation, which comes to the coating. When you want to split wood, a common problem is that you get stuck in the lock. If you don't split it, this doesn't get stuck. So there's a coating on it. So it either glides through or it kind of stops at the top, but it doesn't get stuck, which makes it far more convenient to split locks. And the coating makes it more slippery, so it's easier to do these on a stack.

So I was talking about the revelation and that's the technology. There are coatings. Our coating lasts more than 5x longer. So you can use it for a long time. It doesn't rub off. So you have this slippery effect for much longer than you usually have.

If we go to the next example, urban gardening. Urban gardening is on the rise, rooftop gardening, growing your own herbs. If you're on Instagram, you see all these advertisings for tools that with lighting and everything. This is really a trend. And so we are looking for subcategories where we have a right to win, where there's in-build tailwind. Urban gardening is one of them. We've launched a number of products in this area. And so from retailers in the U.S., you see here some of the star ratings. Usually, if you're a brand manager of 4.3 is what you're looking for, we're getting 4.9 and 5s by a number of consumers.

So we really got this one right. And as it is on display, I talked earlier about demonstrated consumption, you want these tools to look good because you see them, you don't put them away. And so this is where we really can apply our gardening knowledge, but also our design capability to deliver consumers something they want to have.

The next example is pet care. Those of you who have a pet know this is a very emotional category. It is also a growing category. And one of the key concerns pet owners have is that when, for example, they cut their clause on the nail is that they hurt the pet. And there's an effect that some of you might know is if you want to cut and the tool that you have isn't sharp, you basically squeeze the nail. And so the pet starts trying to pull the p away if you have a dog. Our cools don't do that. They do a clean cut, and so you haven't actually experienced that this product is what you're looking for. We've launched now -- or we're in the process of launching 18 products. They're hitting the stores as we speak. Here, those of you who are based in Finland, which I understand is pretty much everybody. If you go to the retailers, you will be able to see it in the next days if you haven't seen it already. So it's rolling out as we speak. And we have very positive feedback from everybody who's used the product about its quality.

So and then I want to go last but certainly not least, what is particularly exciting for us is our entry into power. The world is motorizing. If you think about a car today, the seat is electric, the windows are electric, the hood is electric, the trunk is -- everything is electric. And that is also true in all categories. Everything is motorizing. And so we are now going into this space, too. There are players already out there. And so of course, one of the questions that you have in mind probably is, okay, so why us now? Why now? And how do we think we win this? And I believe that we actually have an advantage that we were able to see what everybody else did because we could spot all the issues. And I believe that there is no player in the space today that either has the garden cutting inside we have, as evidenced on our manual business and/or the focus.

There's a lot of players that basically have a product in our space, but they are construction-focused. They don't really know how you do gardening because they're mostly about carpeting and building drywalls and construction business, or you have more technology-based companies, people that had a battery, particularly the Asian suppliers, they have a battery or motor, and so they're coming more from the tech side, but not from the gardening inside. So I think we have an area where we double down now, where we have a unique competence to cover. And I want to cover 3 aspects how I think this is evidenced.

The first thing is, of course, we've compared our product to the competition out there, and we are delivering the top-end cutting performance that you would expect, both in terms of force but also in terms of duration. You will see this later, those of you who are on the product show, we have you can basically use the battery without charging for a whole day, which is when you have a professional landscaper, a pretty compelling argument.

The handling, a lot of the tools that we see in the market out there are not really based on the inside of how you handle tools. Particularly when they get long, weight balance is very important. And we see a number of competitors that basically scrapped a pruner to a pole, and you have all the way at the head. But now imagine when you're reaching out 2 or 3, you just can't hold it. Like from a physics point of view, it's very impractical. And so we have a very different approach to that, and we think that is superior is our belief.

Then there's a question about battery system. We don't have a battery. We have a power bank. So we have a power bank that happens to double as a battery for power tools. So all the other players have a battery that they can only use for these tools. That means probably 350 out of 365 days, these batteries sit somewhere not used. And they're not exactly cheap. And so ours, you can use daily. You can charge your phone, you can charge your laptop, you can use it when you're gardening in your gardening tool. And then you also don't need a bulky charger. One common problem is that you have one battery charged, you forget about the other one. And when you want to use it, you basically uncharged. All you need for ours is your phone charger.

In USBC, you plug it in, you charge the battery. If you happen to have more than 1 charger, I have 5 or so, you can charge 5 batteries at the same time because you can use your standard USB-C charger. And given this is no European standard, we can be fairly certain that this is standing the test of time, which is nice because 5 years ago, that wasn't the case. So us coming now gives us the advantage that we see where the -- where everything has landed, and to now do what we think is an offer that is really distinctive and relevant in this market space. We watch another video.

So this covered the first part of the 3-part model, innovation.

Let's now look at POS. I said before that we are looking to expand our retail presence. more doors, broader portfolio in each of the retail outlets, and higher quality. Our fundamental approach is that we want to be where the shoppers are. And that means not only off-line but also online, of course, but it also means at different price points. So we're looking at are we offering good, better, and best. And the Ultra Axe is an example of how we added a new best, and now we have, with our A-Series and X-Series, and Ultra, we're offering good, better, best.

So different price points and then also different use cases. Some people are just not doing so much pruning than others. So we're covering occasional usage products at a cheaper price and then also heavy-duty products that we know will last for a very long time in adverse conditions. We talked about the number of doors that we want to expand and the breadth. What I want to double-click on is the quality of distribution because we know that brand building isn't just an advertising task, it's also primarily actually a POS task. So at point of sale, you need to get the perception that this brand is offering good value for money.

So delivering the quality for the price and also clarity of why should I trade up if you have multiple things on offer. So we are very much focused on improving the quality of our POS presence. We have something that's called the ambassador fixture. So it's basically a shop-in-shop offer for our customers that we have installed in a number of places in Europe. So if you go to DIY retailers here in Finland, you would see them most often with very good POS in Finland. We're rolling this out, and we have now basically made a change in the U.S. where we didn't have any of those. We have partnered with one retailer where we're now rolling out the shop-in-shop. They have national distribution in the U.S., and we have now more than 200 installed, and we keep counting.

So POS quality to bring to life what I tried to explain here earlier in terms of our points of difference and why you should pick a certain product from Fiskars, and why Fiskars in the first place is a key priority when we look at the second bucket of our 3-part model, which is POS, online, offline. So we have a physical model for brick-and-mortar retailers, but we also have a virtual shop-in-shop, if you want, for -- to tag along with the retailer websites on. I should probably mention here that 100% of the traffic we generate goes to our retail partners. As I said earlier, we don't do DTC. So we are really driving traffic to our retailers, and they noticed that I'll cover that in a second.

So I'll cover that in a second. It's pretty much now media, the third part of our model. We have great products, but we have an opportunity to tell even more people about it, which is why you saw we've increased our media investment. We've changed our structure. We've brought in additional capability in the media space, for example, we in-house that. We have now an own media team. We call it the media town.

We've overhauled our media mix. We know which media channels give us the best return on investment or on advertising spend. We've changed our brand management organization, and we're in the process of also altering our agency network. We have now implemented a number of changes; more to come. But we can also see the results. So I earlier talked about our most reputable brand score here #2 in Finland. But what's very encouraging is when you look at the middle of the slide, this is sales change versus last year. So the -- in brackets, we indicate in which country this was. So this was retail results on products we supported. And you know the macroeconomics. So in general, sales are rather down. And these are some of the numbers where we supported certain items with our approach. And the retailers feed us back that they don't really know what we're doing, but it's working.

In an environment, where they don't see this from anybody else in our peer group, because everybody, because of the macroeconomic situation, is, of course, a bit in consolidation mode. And because I think we generally did our homework, we're able to invest against the trend, as you've seen in the numbers before. And we are now -- that's why I'm, by the way, excited about the current situation because it gives us a possibility to shake the tree. Nothing is worse if everything is settled and stable, because then you can't really move. And we now have this catalyst of change to show retailers why we're the partner to play more within the future because we're investing, because we have innovation, because we're doing all the things they are looking for desperately for their own needs.

And so they feel us like across Europe and in the U.S., we're doing the same thing, as you can see here, they say it's really working. And so they get excited, and they want to give us more space. And this is how we then want to get the whole wheel spinning, a virtuous circle. We have more innovation. We get more space in retail. We're telling more consumers about that we are there and that they should buy us, which they then do because it works. We get more innovation, we get more space, and the whole thing starts spinning, and we're back to a profitable growth model. That's really our approach that we are currently pursuing.

Now what have we covered? So we are a brand of a long heritage with a reputation for functional quality, aesthetical value, and design. We think we have industry-leading capability when it comes to innovation, not the least evidenced in our very long survival in the marketplace. We've adjusted our commercial model to serve our consumers. So both the shoppers at point of sale and the in use, the actual user, which is not always necessarily the same person. And we are doing so by creating retailer value, category value. So it's not only attractive for us, it's actually also very attractive for our retail partners. So we have synergistic goals when it comes to developing the Fiskars business.

While doing that, we were able to do our homework on the cost side and on the cash flow side. So we've delivered robust financials in the current environment with proven control of cost and risk. And that, I believe, gives us a position that we are very well set up for growth in the future, profitable growth in the future from more innovation. We'll give you a glimpse in a moment. From more distribution, higher quality distribution at POS, and from telling more consumers that we exist and what differentiates us to buy us instead of the alternatives out there.

That's what I wanted to cover. Thank you. And with that, back to Essi.

Thank you, Stefan. [Operator Instructions]. We already have some here. But maybe if we start from the live audience, and let's just wait that everybody gets settled here. Are there any questions here in the room?

Very interesting presentation. I'm just curious because I'm not actually sure that in which country you are located.

In Stockholm and Sweden.

In Sweden. Okay. But then a little bit given that, I mean, U.S. is 50% of your business, where is current, like if you think about like how you divide your time between the different geographies, I mean, how is that done? And then maybe as everybody is very interested about the -- like the consumer environment.

And I think, I mean, now reading quite a lot the transcript of consumer companies, I think people are saying that especially in the U.S., it's very diverse that I mean low-income classes are suffering, and then the higher income classes, I mean, they probably spent more prudently, but still have money to spend. So if you could a little bit give a color on the consumer outlook in different geographies as well.

Yes. So on the first part of your question, I literally spent myself 50-50 between the U.S. and Europe. I'm also there very frequently. And that means that covers actually both Gerber on the West Coast and not on the East Coast, but to Chicago, our fiscus business. So -- and I'm building an organization that represents that too. In the past, we had set up so we try to manage the U.S. out of Finland or try to manage Europe out of the U.S. And we are now really working on a system on an organizational setup that is double legged. So we have R&D on both sides. We have brand management on both sides. I internally call my 2 brand managers on both sides, half a CMO each that need to align on where we are taking the brand. So we really -- we're not running one or the other side. We're really trying to treat it as a global brand, but we are low for differentiation to be locally relevant. That's really the driving force.

When it comes to the environment, I think we all are a bit surprised how well it actually goes in the U.S. is what we expected after the early days of the tariff regime in April. We have a lot of leading indicators we look at, consumer sentiment, spending data, interest rates, everything you could possibly look at. So we're following the market very closely. We get real-time data, particularly from the U.S. when it comes to sell-out numbers. So we have our ear on the track. And I think we have a very good read of where the business is going. What we, of course, don't know is how the policies change, given that they haven't been particularly consistent recently. But we take it as a sportsman. It creates an opportunity for us, never waste a good crisis. Every disruption creates an opportunity if you're ready to grab it. And so when the tariffs were announced back then, we -- within 48 hours, we basically moved half of our organization of the U.S. from other tasks to a task force to refootprint our supply chain, which is one of the reasons why you saw these robust financials.

So by now, we've solved more than 99% of our portfolio that was sourced originally from China. And we are getting actually additional distribution from our U.S. customers because they feel our plan really is sound and they can rely that we can ensure supply also if circumstances would change again. So I think we are well set.

And you had this 12% growth from the U.S. in Q3. Was that I mean, attributable, I mean, to be successful, I mean, back-to-school campaign? Or do you think that is a sustainable level?

So we will not be double-digit growing on a going basis in the U.S. There's, of course, always a lot of underlying factors. Inventory, everybody had a bit of a post-COVID reflex on the first announcement of tariffs immediately, all the retailers were like we need to be tight on inventory. So that's now in the base. We don't expect it to go worse or better. But I think the -- we are looking for moderate growth, low to mid-double digit on a continuous basis. So I wouldn't read too much into a quarterly result. But I think we're on a good path in the U.S. to get to our target rather short term.

And then, I mean, given that you had a headwind from the tariffs in the U.S. And I think, I mean, if I look at your numbers, you've been able to increase the prices. I mean to match at least I mean some of the tariff pressure. But still, I mean, you read the statements from the Walmarts and like saying that I mean tariffs won't impact their pricing. So I mean, how should I read this?

Yes. So I think the -- we have -- you saw in our innovation pipeline, we are trying to move our footprint to categories that have intrinsic growth, tailwind even if we do nothing. And we expect that to offset some of the headwinds that we have in other areas. So of course, there's a lot of things written about what pricing or pricing is not happening in the U.S. I can't comment on that for the reasons. But I think we are able to, as you saw in quarter 3, manage our gross margin to where we need it to be, and we continue to work on that.

And then my final question is that, I mean, Uureausses, building this organized, I mean, legal structure, I mean, for the both of the divisions. So what do you think is the biggest benefits for Fiskars to actually have the legal structure in place to be like your, I mean, own business?

This is actually a passion topic for me because what -- there is this theory about if you centralize things, you have more synergies. The truth is there's also cost of complexity. And what I feel and what I believe is that what we are now doing is we're getting actually to the sweet spot. There's still a couple of things we do on a group level that make perfect sense. But at the same time, we are creating the speedboat and the agility and the nimbleness to quickly react to market changes in areas where we don't need to have a long internal alignment process. I think we're just moving closer to the sweet spot between synergy and independence, and my team feels that too.

We have another question here.

Joni Sandvall from Nordea. Maybe a question on the gardening power tool market. What is the size of the market? And what kind of shares you are maybe looking in coming years? And is there a risk for cannibalization on your, let's say, manual tools?

I take it in reverse order. There is a risk, but if a prune is EUR 20 and the power pruner is EUR 200, we are very happy with cannibalization because 1 for 10x the revenue, that's pretty attractive. So we can -- there is no limit of how much we are ready to cannibalize ourselves because it is financially attractive. When it comes to the tool market, so there is no official statistics on it. When you look at the power -- the big power tool companies together, they are probably eating a cake in the size of EUR 50 billion a year. If and when we have developed our power business to EUR 100 million, it's not noticeable to them. So we don't think that anybody will react to our entry because they have bigger fish to fry, all of them. And we believe that we have a competence in an area that they can't match because they're not focused, what I said earlier. So I think for us, we can generate significant growth while everybody else in the market will not feel the need to react to us because for them, it's just not big enough, which is a pretty attractive position actually to be in when you think about it.

Then you went through about your -- how you are aiming to increase point of sales and stuff like this on this front. Are you also -- how -- let's ask like this, how far you are with your investments within the retailers currently in the U.S.? You said 200 and growing. What's the target level?

Yes. So our first milestone we're now going for is 500 versus the 200 plus we now have. It's not really -- we don't have a target. You can always do payers better. And we -- I consider this to be now the ignition of a new journey, we want to keep doing. And when you look at other companies in the power place, there are some that have pulled this off for 10, 15 years consecutively. So we are not really -- this is not a one-trick pony or like a temporary thing. We want to now get on a new trajectory that we then fuel. That's really our model, the virtuous cycle.

And last question from my side. If the market remains as soft as it has been this year. What needs to be done in '26?

So first of all, our base assumption is that it stays soft. We don't expect it to go worse, but we also don't expect significant improvement. We are focused on what we can control. And of course, there is a bit of shift in dynamic. When people expect the economy to grow, they trade up. When they expect the economy to be difficult, they have a tendency to trade down. We are working with our partners to capture these consumers regardless of where they're going.

There's a question in the back.

Rauli from Inderes. Just one question from me on the financials. As Jussi showed, Fiskars' division is doing quite good margins and returns on capital already. So what's kind of your priority in terms of growth and profitability? Are you basically aiming to maximize growth at this profitability or returns level? Or how do you approach that?

So we have 3 targets. We want to sustain cash. We want to defend EBIT, and we want to fuel growth. We believe that in the midterm, the only way for us forward is profitable growth. And so we are determined to do that. But of course, we want to sustain cash and defend that. That's our current priority.

Calle Loikkanen from Danske Bank. Perhaps continuing a bit on that, I was wondering about the kind of the margin development, sounded based on the previous answer, that you prefer growth or margins at the moment. Is that the correct or incorrect assumption?

We prefer a profitably growing business, and in some cases, volume due to the cost structure that you have might trump unit margin. And in some other cases, it might be the opposite. So we don't have a one-size-fits-all answer. We're really looking at the subcategory by category. We're supporting categories individually also with advertising. So it's really a case-by-case and the answer will be different depending on the category.

So if you now kind of try to -- with new innovations and everything, try to push up volumes and sales, over, let's say, the next 2 years. Do you think that the margin -- EBIT margin would then -- should we expect kind of unchanged margin levels going forward? Or how do you view that side?

Yes. So I think we're not getting into guiding territory. We have obviously not guided beyond end of this year, February '26, we will issue the guidance for '26, and that will kind of move us step by step forward. As Steffen indicated, for example, with power, the unit cost, unit price per solving a consumer's problem, i.e., cutting trees, for example, is way higher. And from that perspective, when we do development, we do not development that's not intended to dilute our business economically to the contrary.

And then perhaps just on the final question on the profitability side. Would kind of the improvement in profitability or margins come mostly from sales growth, volume growth? Or is it like gross margin expansion? Or kind of what's the main driver for -- I mean, I'm not talking about next year or this year, but next 3 to 5 years.

Yes. So the general direction is that we want to improve our gross margin. We want to have a structure that makes more room for investment into R&D, into media, and we want to defend our EBIT margin, which means, in general, we are looking to expand our gross margin. When it comes to future categories, we expect every category to at least pull its weight, if not more. So every category we go into has to be internally competitive when it comes to the financial structure. We will not go into categories that are dilutive to our gross margin mix, if you want.

And then finally, I mean, could there be any new kind of product categories that you could be interested in like your strong outdoors? Could it be something that's not related to cutting, but related to outdoors?

So we could. But when you look at -- we have a funnel that obviously goes beyond '26. We're actually now looking up until 2030 in terms of innovation pipeline. And there are so many areas where we still can reap significant benefits for the business with entries that we're today not covering that we don't see a benefit to get outside of our core competence before we've done these things. because we're really looking for do we have a right to win and are we able to really bring something that is differentiated versus competition to make sure that we are -- whatever we launch is successful. So we just don't need it at this stage.

We have a question here.

A private investor. I was wondering about marketing. Could you expand a little on that? Have you found which channels work best for you? And are you putting more money into them? Are you doing marketing on social media or traditional media, which works best for this customer?

So yes, yes, yes, and yes. So we have first of all, one of the main drivers for return on advertising spending is that you don't have what a media person would call media breaks. So if you do a print advertising and you have to remember it and then later in the story, remember, you've seen it, that is a killer usually for return on advertising spend. So 100% of our spending is online and sends to an online website where you can buy, so that there is no break, so you don't have attrition in the funnel, if you want.

We have what I'd call the media tower. It really is like an air control tower. So we are looking at all the data in all the countries in one central team. The -- it's a virtual team. So they are in the U.S. and in Europe in different places. But they are one team, one virtual team, and they literally on a daily basis, look at how these assets performing, and we change them in real time. So all the way from the number of sessions we create at the very beginning of the funnel, click-through rate, or the conversion to raws. And this changes actually over time. So we have a true real-time approach to media management, where we see the best return. We have now -- we just started the Ultra Access a couple of days ago. It's 50% better than the previous one. So we see that we quantitatively can prove that this model works.

And I believe hands down that we have one of the best media management approaches there are in the market because it's a lot of money. And so we want to make them sure that every dollar we spend or every euro we spend is getting us a return.

Tommy from DNB. Carnegie. The other division, Vita a lot of M&As in the past. But what about Fiskars? I mean, could you consider expanding your offering by doing an acquisition within consumer goods and then convert or stretch the Fiskars brand into new products?

Historically, on the Fiskars side, there have been just a couple of acquisitions. Obviously, it's pretty much a monobrand business, and the brand is not capitalized on our balance sheet. It's hopefully capitalized in our market cap visible there contrary to the Vita ones, which are acquired brands. Historically, even the U.S. garden cutting business, we had scissor business, and that was actually the garden cutting competence to the local market was acquired to the group, but that's a couple of decades ago. Since then, there have been a few disposing off. There were pottery things relating to gardening. We had watering, which was acquired, was it 2015 or so and divested here. a couple of years ago, really pruning our portfolio. But of course, as such, while it's not a high priority for the Fiskars business area, we always keep our eyes open and look at are there places.

And given the monobrand structure of the business, it's more technology-driven or market access, going out and buying a brand like adding to the House of Brands as we call Vita another brand is way simpler than integrating into the branded house as we would call BA Fiskars. Well, it's a different type of logic in terms of acquisitive growth for that business.

But haven't you converted some of the Vita business like Hackman into the Fiskars brand, some of the kitchen--

So we're still running Hackman, literally as we speak.

Yes. But Hackman came with the Itala acquisition back in 2007, and the, say, functional part of that portfolio because it included both the Littala Glass and Arabia tableware, all that stuff, but it included also things that are somewhat Fiskarized. So Hackman brand exists for cutlery and it exists for some of the pan and pot category and the premium offering is Fiskarized, but it actually comes from the factory, as Steffen alluded to, Sorsakoski, which was part of the Littala Group is part of our group. It's part of BA Fiskars as we now speak. So that split basically took place subsequent to the acquisition of Littala business soon. 2 decades ago.

And maybe just to build on what you said, Jyri, you're right, there is a Hackman brand. So maybe it's a little oversimplified to only talk about Fiskars or GAA, but we -- as I said at the very beginning of the presentation, we have clear priorities. Hackman is not an investment priority. We're not looking to expand it. So acquisitions, as Jyri said, if anything, we would be looking for capability or access, we're not looking to buy scale with a different brand that you then would have to rebrand, which would destroy a lot of value. We all know that organic growth is the most value-creating growth, and we have so many opportunities out there that we are focusing there. Then there's a question of debt capacity, which you also know where we stand. So for the near term, we're looking at how do we expand our own offer. And for the midterm, we'll be looking at are there capabilities that we don't have that are cheaper to buy than make. So that's the strategic answer to -- or the strategic addition to what you talked about.

Joni from Nordea. One follow-up question. On the distribution model, you pretty straightforward said that you are going through the distributors. But back in the days, you still had some own direct-to-consumer in Fiskars also. So is it now purely distributor? Nothing in -- I understand in the U.S., but also in Europe, you are sticking to. So we had 3 places --

When I started where we still did a tiny direct-to-consumer business. We looked at what does it cost us to run this versus what does it deliver? Was dilutive, we closed it. And we said let's focus on the things we're really good at. But when we are talking about Fiskars BA, of course, we have the consumer G brand in the U.S. That's actually good addition. Yes. So Fiskars brand, no. Gerber, absolutely, yes in the U.S.

Any other questions here from the live audience? Or should we take one from the online viewers? Okay, maybe online, and we can then continue here if there are additional questions. Maybe one for Jussi about tariffs. I know we've discussed a lot about tariffs, but would you say that the worst is behind you when it comes to negative tariff impacts? Or can you remind what is the magnitude in 2026? And Steffen, of course, you can.

Well, we are not off the hook when it comes to tariff, that's for sure. The new one introduced late August, still tariffs there. They will have an impact next year. So we continue mitigating. And that's the good thing what we have. So Fiskars' business area model is so that we have enough firepower to mitigate the direct impacts and still continue driving those innovation and investments Stefan talked about. But yes, we continue having this uphill battle next year also when it comes to tariff.

Yes. Maybe just to drive a little more specification from the BA perspective. I would say operationally, the worst is behind us if what is currently in place holds. Now of course, we've watched the Supreme Court hearings. And so maybe that changes. But if everything that is in place now holds, then operationally what is behind us, financially not. So we've had inventories. So we have a little less than half year impact in '25, and we have a little more than half year impact in '26.

Here's one for Jyri, a bit more general. What are your first observations as the CEO? And how do you see the group role going forward?

First of all, first impressions, I spent more than 9 years in the boardroom of this company. And of course, the engine room looks a bit different than the view from the boardroom. That's very clear. But the boardroom has visibility kind of to the top-level talent. And one of those important things is that now having had the visibility and having everyday visibility to a very broad-based talent. Steffen mentioned our industrial designers. And those, of course, the Board has seen the Chief Design Officer. But it's not, again, a one-man show or one-person show, seeing the breadth of many of these competencies and the passion for the business. So it's not only Steffen who is having the passion for the brand. We have in our Vita brands, we see that, and we have in the deep ranks of our Fiskars brand, where we see the passion for the brands.

And I believe that the combination of strong brands and engaged people, that's the recipe for success. The brands alone are not making any money, but that money-making is facilitated then by engaged people who are driving to the common goals. That's important. So that hopefully answers the first impressions starting 2016, and then next phase started in May when I took over as interim, and now a few weeks into the non-interim role in the company. And what changed? Well, I don't have my card here, but now I can also go to the R&D lab, and kind of that's when you have extra 15 minutes after lunch, you walk up there and chat with the people, hey, what cool stuff is now in the making. And there is a lot of cool stuff. And that's exciting. That's definitely exciting.

And the group role.

The group role, obviously, as we had printed also on some of the slides, the parent company, Fiskars Corporation, is de facto a holding company. It has also some of the shared service functions that are relevant like us driving a common ERP platform. So multiplying those kind of resources and that talent and managing the cybersecurity environment, et cetera, wouldn't make any sense that we split that in bits and pieces. But then the group role is really on the capital allocation. There is a lot of experience of businesses and of consumer business within the group. And I think we have a very clear split in the roles with Steffen and with Daniel, who runs Vita, that we are not dancing kind of in their sandpit or doing anything else there. and then capital allocation. When we have a lot of potential opportunities where to allocate capital, then it's a healthy competition, may the best bid win, and that's what we are executing. And now when we get all the tools in -- after Q1 with the legal structure complete setup, it's, of course, making our job at least those decisions based on real data and complete data, and hopefully then more informed decisions from that perspective.

Thank you. Then we have one that maybe, Jussi, you can take. Jussi shared some of the financial metrics for both BAs, for example, return on invested capital. Will those also become the financial targets when you launch the new strategy?

When we came out with our Q3 results, we announced that we will have capital markets in the first half next year. Exact timing is still to be confirmed. And most likely, you can assume that then we are coming out with financial targets. The BAs are very different from each other. One is somewhat capital-heavy, one is very lean when it comes to balance sheet structure. One should be a fast-growing, one is more on the modest growth type of type of role there. So not yet indicating what are the financial targets there. We have been very transparent now when we start splitting the company.

First, we introduced a specific gross margin. Now we have been talking more about return of invested capital for each of the business. What are the final ones that to be confirmed. But of course, internally, we have a long list of metrics what we are now following.

And maybe to build on that, you mentioned Capital Markets Day H1 '26. There were maybe some pencil markings in the calendar for this autumn. Last spring, when I took over as interim CEO, I just said that I don't think it's fair that as interim CEO, I go out with the team and make promises to the market and somebody else has to bail out those promises. No, it's a completely different ball game, as we have the team that will also build out for the promises that are to be made. At the same time, this incorporation, it sounds kind of as a trivial thing that, yes, we have CEOs for the 2 businesses. And so what's needed more, but that we have the solid data and decision points in terms of what are the relevant value drivers that we want to basically put our heads or Steffen and Daniel's head at least into the rope kind of and have them be accountable for those externally communicated long-term financial targets, and that's what drove to the decision that it will not be November '25. And now when we have this clarity, it's very clear that it's due next year in the first half of the year.

Yes. We have one question here.

Yes, Joni from Nordea. Still one question. This could be a bit early, but it seems that Steffen's capital allocation is pretty clear what you are going to do. But on the group level, what are the priorities when you are considering now capital allocation going into '26 and onwards?

I like to start. Okay. So first of all, when it comes to capital allocations, we are -- well, our CapEx is roughly 4%, 4.5% of our net sales. We assume that, that stays flat. We still have a couple of this kind of group-level investment platform type of investments, both BAs will benefit from. And of course, we need to continue executing those. Otherwise, we have -- and we are now establishing clear metrics, clear KPIs, what are the principles there for capital allocation. Businesses, as I said, are quite different from each other. And then the businesses are directly responsible for their P&L, from top line always down to EBIT. What they can spend money there for marketing, for R&D, it's pretty much there. So our capital control is more than the CapEx side, which is, as I said, not excessive numbers as such. But there typically, the best return will get the most money.

Good. I can see that we have still at least one question here in the chat. This is for you, Steffen. How do you see the competitive landscape evolving in your core categories? And what do you think differentiates Fiskars from the other players?

Yes, very good. So I think in general, I hope I brought this to life a little during the presentation. We have insights in a very specific area cutting in multiple applications that we think gives us unparalleled capability. And we are now rolling this capability out to other categories that are adjacent, like pet care, like urban gardening, like power. And so the -- it's a very dynamic landscape with the competition. There's a lot of innovation happening, particularly when it comes to the modernization of tools as we talked earlier. But there's, of course, due to the macroeconomic, a lot of people are thrown off their track. And I see this as an opportunity. So we are not in a worse position than anybody else, but I hope we have done our homework early and better than some of the others, which we can kind of get like feedback from -- as feedback from the retailers that we are able to do things that others aren't or aren't yet.

And so we try to shamously exploit the situation, gain share of shelf, gain in-store presence, again, quality of presence, and be the partner of choice. We want to be the preferred supplier to our retail partners, which we have a symbiotic relationship with. And exiting out of DTC, by the way, gave proof to that in the markets where we had DTC on the Fiskars brand, because they saw, okay, we are really committing to this relationship. And that alone already gave us goodwill and also some practical wins on the distribution side. So it is -- business is always tough, but I think I see the glass half full, and we are now really trying to use the opportunity to make a difference to our in-store presence, to the consumers, and serve the market, serve our retail partners with value-creating initiatives that set us apart. On the technical side, I hope you saw more than enough evidence today that we really know what we're doing and that we actually do deliver products that are noticeably different versus the other offers out there, and I hope the consumers conclude that they are superior.

Good. Thanks. Do we have any more questions here from the live audience? It seems that we don't have any more questions. So we are ready to close the webcast. And I would like to thank everybody who has been watching online, and we continue here with the product showcases with the live audience. Thank you very much on my behalf.

Thank you for joining. Thank you. Thank you.

Hello, and welcome to Fiskars Group's Q3 Results Webcast. My name is Essi Lipponen, and I'm the Director of Investor Relations. I'm here with our President and CEO, Jyri Luomakoski; and our CFO, Jussi Siitonen.

Hello.

Here is our agenda for this webcast. Jyri will start with key takeaways of the quarter. After that, Jussi will walk us through the financials and then back to Jyri for business area specific performance and guidance.

After the presentation, we will have plenty of time for your questions. We will take questions both through the phone line and through the chat. You can type in your questions in the chat already during the presentation.

Before diving deeper into Q3, I still wanted to highlight the news that we shared last week. Jyri Luomakoski has been appointed as the President and CEO of Fiskars Corporation following his interim role in the same position. But with this piece of information, I will hand over to you, Jyri.

Thank you, Essi. It's a pleasure being here. If the numbers would be better, the pleasure would be even bigger. But let's go into the quarter.

Key takeaways, some things went well and some clearly less good. And if we start with the positive ones, our net sales turned to growth, and this was very much driven by several of our Vita brands, actually, most of our Vita brands. And Vita grew in Q3 in the magnitude of 8%.

The other positive thing is that we had actually a solid growth in the U.S. The market, which has been in some kind of a turmoil as a consequence of the tariffs, consumers becoming uncertain what's happening there, it seems that our value proposition to the consumers has been such that it's continued to appeal and we've had good development there.

What didn't go well is certainly the decline of our comparable EBIT in the quarter. And this is much driven by our additional costs in the supply chain and many of them are self-inflicted. Why?

Last year, the inventories started to grow, and that was still happening in the beginning of this year in our BA Vita. And we started very determined actions to take down the inventory levels by curtailing production.

As a consequence, when you curtail production, your supply chain costs are partly fixed and there is less volume to absorb those costs. So it was a kind of a premeditated action from our side to prefer cash flow and go into '26 without too much of excess baggage from the inventories.

What I will soon come back when we get to the BA updates, but in our Fiskars business area, the innovation pipeline actually over the last 1.5 years or so has been more than doubled. And that's very important to stay relevant to the consumers, but soon getting back to that.

And then as a consequence of this, we specified actually our guidance. Comparable EBIT range was narrowed to EUR 90 million to EUR 100 million from the EUR 90 million to EUR 110 million. And currently, as we see the market picture, that is pointing us to the lower end of that range for the comparable EBIT for 2025.

Turning over to Jussi, please.

Thank you, Jyri, and hello, everyone. So I continue with this positive news what we had in Q3, i.e., top line growth, solid 4.1% growth, so that Vita was up 8.2%, then Fiskars BA came down slightly, 0.9% negative there.

Actually, this is the first quarter since Q2 2022 that we were able to deliver this kind of mid-single digit solid growth. There are a couple of good news also where this growth is coming.

So the fundamentals are in place. It was very broad-based. If we take our top 15 countries, which represent more than 90% of our sales, 12 out of 15 countries were growing in Q3. Also same for brands. If we take our top 12 brands, 97% of sales, 10 out of 12 brands were also growing in Q3. So it was very broad-based.

EBIT, EUR 13.9 million came down EUR 10.4 million from last year for 2 main reasons. Jyri already mentioned the supply chain issue, what we have there of under-absorption of fixed cost when it comes to our production volumes.

Another one is our SG&A cost. When it comes to SG&A part, it's mainly phasing between Q3 and Q4.

On gross margin, EUR 46.7 million. It was down 140 basis points from last year, so that Vita was down 380 basis points, 3.8 percentage points there. And Fiskars BA was actually up 110 basis points.

On cash flow and I will go a bit deeper to that after a couple of slides, it was up from last year, around EUR 7 million, but still negative of EUR 10 million.

If we dive a bit deeper about this EBIT bridge here and where the difference versus last year were coming from. So as said, group was down this EUR 10.4 million, so that Vita was down EUR 7.5 million and Fiskars was down EUR 1 million. The rest is from other operations there.

Focusing first, what we have here on the right, i.e., Fiskars BA. So you can see that underlying gross margin was quite significantly up there and only partially offset by tariffs. For the actions we have put in place there, as we said after Q2, are now impacting positive results there and are mitigating the tariff impacts in Fiskars BA.

Same what I mentioned already about SG&A, you can see here. So Fiskars BA, SG&A slightly up versus last year, but that's also mainly phasing.

On the middle, you can see Vita bridge, which is down to EUR 7.5 million, as I said. Here, you can see the impact of the supply chain challenge, what Jyri explained. So that was one biggest -- big driver there.

And also in Vita, it's mainly SG&A phasing what we have there, showing quite strong negative numbers in Q3, but we assume based on what we have seen that that will be somewhat offset in Q4. Overall, when we are talking about SG&A here, I would say that year-to-date SG&A, which is flat versus last year, it's a better proxy for full year than just looking our Q3 numbers.

And then, of course, the group as a summary of those 2 BAs down this EUR 10.4 million so that even at the group level, our underlying gross margin was improving. But then as a total, it was more than offset by those tariffs.

Moving then to cash flow. As I said, cash flow was negative EUR 10.2 million here. Even though it improved from last year, it was still negative. And of course, this is the topic we are not very happy with.

The actions we have been put in place or already put in place or Jyri also explained here are the ones we are focusing now also for the rest of the year 2026 to get cash flow back on track. Here, you can see the impact. I would focus more on year-to-date cash flow here to avoid this kind of seasonal volatility. The challenge what we have is well illustrated here.

Inventory is up some EUR 46 million, whilst last year for the same first 9 months period, it was down similar type of number. So we had significant delta, negative delta there when it comes to our inventory situation.

And then quite naturally being a component of net debt and EBITDA, the net debt continued increasing due to this negative cash flow as a main single reason there and then that we are behind last year with EBITDA.

The fact is that net debt EBITDA went up from last year being now 3.7x. Our target maximum 2.5x is still valid and we remain committed to this target. And therefore, this is one example why we have initiated those actions to mitigate inventory inflow and make sure that actually we get back on track with this net debt EBITDA.

But with that, giving back to you, Jyri, on BAs.

Thank you, Jussi. And briefly on our 2 business areas, starting with Vita, which is approaching its annual high season, which is the fourth quarter. And here, we've seen, as earlier mentioned, a broad-based net sales growth.

So if 10 out of the 12 top brands are growing, that I think we can call a broad-based and geographically also broad-based. It's not just one market which is booming and the others not performing.

And the inventory-related actions, we've touched quite much upon. And when we look at the growth, and Jussi mentioned, it's several years back when the group was reporting this magnitude of growth numbers and I think it's over 2 years you need to look back till you saw a growth quarter in Vita.

And this is extremely important for us driving our performance that we have the underlying growth, have used the kind of a comparison or parallel to steer a ship that does not have any propulsion is very difficult. And the same applies to company growth being kind of the propulsion for the business too.

Actions that we started to look upon in the summer already recognizing the inventory levels that the only way to solve the 2 big inventory issue is really to curtail the inflow and, of course, start to boost the outflow.

When you look at the comparable EBIT margin, really the big delta is coming from the supply chain aspect and the phasing-related SG&A. The underlying -- preempting maybe a very logical question that would be arising out of the numbers, the underlying gross margin or in terms of pricing, we do not see anything that would be alarming us, and that's extremely important.

So when we have the propulsion, i.e., growth and the brands are loved by the consumers, then I think we have the ingredients to improve our position. And that's what the guidance also implies.

A few highlights, leveraging our assets -- production assets in the more complicated glass production, which economically industrial logic is more of a process industry logic. Royal Copenhagen, one of our biggest brands, very successful brand has now actually next to the hand-painted porcelain launched also high-end glassware with crystal and mouthblown glass.

And those are manufactured in our crystal factory in Rogaska in Slovenia and in our Iittala factory in Finland. So good both for the supply and complementing the offering towards our consumers to have a complete Royal Copenhagen tableware and glassware set.

Iittala has expanded now to the scented candles. And when you look at those before you even light them up, you see a form or shape that we all can recognize. So it's the Aalto silhouette.

And this is something that appeals as a decoration item and now getting into the darker, less light time of the year, what is then nicer to than have a beautiful scented candle lighted up and you can enjoy all the effects. And actually, the fire is bringing one of those, it's the elements of glass that are the 3 scents, water and sand and air that are in this offering.

When we talk about desirable brands, you might recall that historically and I still read in many reports about luxury. We have actively dropped the word luxury. We recognize that to be luxury, there are certain characteristics that many of our brands actually would fulfill, but not all of them.

But our brands are very desirable. And one of the kind of manifests to that desirability, Moomin Day in the early August time frame. It was a few days -- a few hours online. We actually sold out the Moomin Day celebration mug. When the sales started, there were about 50,000 people queuing online.

And interesting, when I bypassed our store at the Helsinki Airport at the Schengen side, the store opens at 5:00 a.m. Normally, our stores open at 9:00. And at 5:00 a.m., according to our colleagues there, actually there was a queue outside of that.

So there were some happy ones who got 4 hours before others their Moomin Day mug. So I think that's a clear manifest to the desirability of a brand, but describes what we have in many of our brands.

Moving over to Fiskars business area, relatively stable top line. And as you saw in the bridges, EBIT bridges Jussi just showed, the gross margin improvement and the tariff cost, the incremental tariff costs have been pretty well matching each other, which is a remarkable achievement by the team in terms of managing the situation, which is complicated.

It's still fluid situation, as we know. Tariff announcements are still in the air and how those -- some of them will settle, we don't know yet. But a decrease of 0.9%.

And when I look at many peer companies who have recently published their numbers, I think we've been weathering this storm extremely well and implicitly indicates -- and I don't have the proof in any formal statistics, but indicates that we've been actually able to capture some market share and have remained definitely relevant to our consumers.

In terms of how to capture the market share, there are a few keys, but one of them is also continued distribution gains, which we also see that we still have a clear pipeline of distribution gains coming for this business.

Looking at the highlights, many know Fiskars as either the scissor or the axe, or the garden business. Now here highlighting the latest generation, the Fiskars Ultra axe range, which is, again, how the world's best axes have been made even better.

And there is a established heritage and know-how and this is a product family now we all are proud of having been able to launch it.

Innovation focus. As I mentioned earlier, our Fiskars business area has more than doubled its innovation pipeline in the last 20 months. And this is not only nice picture and promises on November 11, actually, we are arranging for institutional investors and analysts an investor event that will be then broadcast or webcasted, get to know business area, Fiskars.

Last spring, we had a similar event in Copenhagen for our BA Vita and the feedback from analysts covering us, some fund managers attending that was very positive that we really show what we are doing, who is doing it, and we are proud to show what will be there available soon also in the stores coming out of the innovation pipeline.

So it's not only talk, but there will be a chance to get a look and feel and the touch of these new products that are coming partly later this year, partly in the coming year.

Our sustainability targets, we take them extremely serious and continue our commitment there. And when we look at certain environmental criteria, circular products and services, we've been able to grow the share by 300 basis points from last year's September level of last year's first 9 months, but there is still a way to go towards our 2030 target that half of our sales comes from circular products and services.

What might not look too ambitious currently is when we have reached minus 61% on our Scope 1 and 2 emissions from our own operations, 7 percentage points improvement year-on-year. The target was 60. So it looks quite favorable that we are reaching -- actually have now reached that target.

Then how to tackle our -- the fact that our Scope 3 emissions is defined by us as a percentage of suppliers spend, how many percent have spent to vendors who have committed to science-based targets. And there we've been moving sideways and still have some way to go towards our target.

So we are currently at 65%. And in our H1 reporting, in that context, we also flagged out that the rebasing of some of the sourcing for our U.S. business might actually take us a small step back short term before the new vendors can be qualified and submit their science-based targets. But it's not a target that we want to give away.

On the social side, the zero harm target remains in force. We have 3.5 as our lost time accident frequency per million hours worked. It is a notch up from a number of a year ago, which is very unfortunate, but the work continues. Health and safety of our people is extremely important to us.

And then finally, inclusion experience. We have a target in a comparison with global high-performing companies of 80 and we are currently kind of moving sideways, just shy of that 80 at 77. So not yet there.

The split of our businesses, our BA, so separation into subsidiaries is advancing. The legal entity structure will be in our current assessment, finalized by the end of first quarter '26.

The operational structure has been in force since last spring, but that's kind of the relatively easy part of it. We are operating in about 30 countries, have had more than 30 legal entities and then having those split and put under basically subgroups for the Fiskars BA and for the Vita BA under the holding company, which is Fiskars Corporation, i.e., the parent company.

So that work is ongoing. We had the first wave of a number of countries that went well because that has to do also with IP things, et cetera. The next one is beginning of November. And this step by step, we will get there by the end of the first quarter.

What do we want to achieve with this separation? Of course, full business accountability. So we have 2 colleagues who are running these 2 business areas and they have operational end-to-end accountability for their business.

So there is no scapegoat of a group supply chain. They could say that, yes, we would have sold, but the factories didn't deliver, et cetera. So it's all under one hat, which improves flexibility. It improves the speed of decision-making. The closer to the consumer we are making decisions, I think the more relevant they are and more timely they are.

The independent legal entities as subgroups under the holding company, that's very self-evident. Then when we talk about the transparency and measurability, once this is completed, we have already committed to the financial markets that we can provide and we will provide more transparency into the numbers. Currently, we have the income statement pretty well already covered by BA, but not the entire balance sheet. So there is potential.

And by transparency, we hope that these individual businesses are also getting with their different type of characteristics in terms of financial dynamics and asset utilization, et cetera, the fair valuation, which then is reflected into the aggregate, basically some of the parts as Fiskars Group's valuation.

And when we have this structure, there is definitely a different level of dedication and this is to accelerate, of course, to tap to the growth opportunities into which these 2 businesses have available to them.

In terms of the guidance, already addressed it in the very beginning, we narrowed down the range. And also openly pointed out that we have the most important quarter of the year ahead of us and the current visibility indicates more towards the lower end of the range.

I know that many analysts have calculated what does it imply in terms of growth in the fourth quarter that is needed to achieve these numbers. And I'm happy to share that while we do not share regularly kind of mid-quarter or monthly business updates or anything like that, but as of today, having the visibility, how sales has progressed also in October, i.e., the fourth quarter has started, that has been well consistent with the expectations and projections that are needed to get there.

Consumers make the decision. And actually, it will be after New Year's Eve when we close the stores, when we actually will, in the end, know how the fourth quarter been. Our D2C share increased a notch in the third quarter.

And traditionally, the fourth quarter is more direct-to-consumer heavy. So both our own e-com and our stores play a relatively seen bigger role, which means that the visibility is really at the point of sale that takes place.

We have in the background, certain assumptions and definitely actions also and those relate to the supply chain variances, which we have addressed.

Those 2 published factory curtailments or mothballing as somebody would call them, are both related to 90 days furloughs and that means that they will span also into the fourth quarter. The tariff impacts, direct tariff impacts are way easier to calculate.

Of course, the indirect impacts on demand is very much then visible again on the point of sale. And we expect this Vita's positive net sales trend to continue in the fourth quarter. And as I mentioned, we are on track on that. And the tariff mitigation efforts continue as some parts of the tariff landscape are still effectively open.

So in brief summary, what is really delightful here is that we've returned back to growth. Especially the Vita part and this is the year -- time of the year where that growth is relevant and super-needed.

And the U.S., where we've had certainly many aches and pains with the very volatile tariff situation, we've remained relevant and been able to remain relevant also to our customers, i.e., the distribution and gain some more traction on that side.

The actions to reduce inventories, they continue. It is not acceptable from my perspective to see inventory numbers as we currently have and that's something we need to fix.

Innovation pipeline, more on that in a few weeks and guidance I already touched. And relating to a guidance longer-term topic, last spring when I took over as interim CEO, there was a date penciled into the calendar in this autumn for a Capital Markets Day.

We all know that our long-term financial targets are basically expiring end of this year. That's clearly recognized. But at that time, I personally felt that it would not be right to go out and make promises about the future and then somebody else might be then bailing out those promises. That's not the style we want to kind of enforce in our company.

In H1 '26, we will arrange a Capital Markets Day. The timing is still open. And in that connection, we also plan to issue then our new long-term financial targets.

So this as a promise and now being able to bail out those promises, it feels way better to be standing here and announcing this and we will be back on the timing of this.

That concludes my part of the presentation. So thank you for your attention so far and we are shifting to the Q&A session, I guess.

Yes. And let's first take questions through the phone line. But if you want to ask questions through the chat, just please write your questions in and we will take them afterwards. But let's see if we have any questions through the phone line.

[Operator Instructions] The next question comes from Calle Loikkanen from Danske Bank.

And first off, congrats, Jyri, on the new appointment. Then starting on few questions, if I take them one by one. First, in Vita, the inventory-related actions and the scaling down of production, for how long will this continue to impact profitability?

As I said, the current announced furloughs are 90 days furloughs. And with regards to Barlaston, that's a 90-day block kind of a mono block, I would say.

And with respect to Iittala, it's phased and part of that is in '25 and part of that will be in the winter season of '26. And we are, of course, continuously looking at do we see the development. We had a notch of inventory reduction now in Vita already in Q3 with the bigger demand anticipated in Q4.

Of course, we expect more. And it is very much a steering where we want to clear the baggage from the past, have a clear slate forward for the business and manage the cash flow and implicitly through that also the indebtedness or the net debt position. So timing, difficult to say, but it's not ending in Q4 already based on what we have announced with respect to Iittala.

Okay. But you're not expecting a similar kind of impact on EBIT anymore from these actions as we saw in Q3?

Into our guidance, we have certainly factored in what we know for the actions for this current year. And at this stage, we are not yet going to guide any income statement or any other element of '26.

So we are managing that situation diligently and carefully balancing between the cash flow optimization. And of course, we are in the business of making profits and delivering profits and that's even our legal obligation to do that and manage the situation between these 2 aspects.

Yes. Okay. Got it. And then secondly, I mean, now looking at year-to-date adjusted EBIT, EUR 46 million roughly. So you need about EUR 44 million in Q4 to reach the lower end of the guidance.

And last year, you did EUR 43 million of EBIT in Q4. So in practice, you need EUR 3 million more now in Q4. And so I was just wondering, I mean, you mentioned that you expect Vita to continue to grow top line in Q4, which should, of course, help.

And -- but I was wondering, I mean, if you have these -- still these kind of inventory-related actions ongoing, probably a bit of negative EBIT coming in from those then or at least negative impact on EBIT. So can you elaborate a bit perhaps more in details on what levers there are for you to grow EBIT in Q4 to really reach the guidance?

Two critical aspects. Of course, the top line growth, as indicated, is vital for that. That's the prerequisite. With respect to the cost side, SG&A, where we had a uplift in Q3, which relates to phasing relates to some accruals.

So they were accrued last year comparing year-on-year and some accruals when like with respect to variable compensation, short-term incentives, et cetera, apparently, and I was not there in this role, but as a former audit committee chair, you remember some of the facts from the history when the visibility went a bit sour last year, some of those were reversed, creating a benefit into last year's Q3, which makes the current comparison also somewhat unfair in terms of the Vita Q3 EBIT performance and that type of a ugly comparison doesn't reoccur in Q4.

So that's -- so it's revenues and costs, which I know sounds like a very simplistic answer, but there are very targeted items. And of course, we are careful and very cautious in terms of other costs and expenditures in the fourth quarter.

Okay. That's very helpful. And then lastly, before handing over to others. And I know there's still plenty to do this year, but what sort of initial thoughts do you have for 2026? Anything that you kind of are looking forward to or expecting from next year?

Next year, we hope that there will be a kind of stabilization of the tariff situation because now it's been waking up in the morning and checking the social media, what is the new situation, and that's been keeping our organization extremely busy.

That's also time off the consumers and customers. It's time that has been spent in rebasing our sourcing and relates now to the U.S. Fiskars business predominantly. The team has done a tremendous job in terms of finding new sources, qualifying them, testing them and negotiating that we can move and base our sourcing into already settled down tariff environments and so forth.

So that's the only part actually, given that we will issue our '26 guidance in early February in connection with our Q4 full year reporting that I can share at this stage. But that remains like a wish that we could concentrate on some more productive or progressive topics instead of fighting the situation here.

The next question comes from Maria Wikstrom from SEB.

Yes. Maybe continue a bit with the soft topic that Calle raised as well. So I mean, just getting a little bit of more color, I mean, as Q4, I mean your guidance, I mean, reaching the low end of the range indicates that you need to record some 8% growth in the EBIT, which in light of, I mean, today's results, I mean, something needs to change.

But I mean, is the thinking right that, I mean, given that it seems that in the Fiskars BA, I mean, you have been able to get these price increases through and the EBIT is stabilizing -- more stabilizing year-over-year so the lift that we are going to see -- we would need to see is coming from the Vita segment?

And then here, I mean, you think that the Q3 was somewhat extraordinary, so it should be better in the high season. Is that, I mean, rightly summed up?

So Calle's math worked well. So if you take our year-to-date numbers here, you can see that we are EUR 25 million behind last year when it comes to EBIT on the first 9 months, making our guidance, we need to be roughly EUR 5 million better than last year in Q4.

What I said in my part here is that we have some technical tailwind there coming from SG&A phasing. So therefore, I would say year-to-date change in EBITDA would be better proxy to give direction there for full year SG&A.

So you can figure out how much upside we -- technical upside we are expecting there. And then exactly like Jyri said here, we do need demand, which as of today looks pretty good there for Vita that we are following the plans what we had in place.

And then when we are prioritizing the cash flow here, so the decisions are very much ours here, what to do with production to ensure that we can continue improving cash flow. So these are the items what we have in place.

This time, Q4 is a bit different from last year. So you might remember last year, we were struggling with demand when it comes to Q4. I would say, at the very moment, we have one problem less versus last year. And then we have this kind of technical tailwinds. But as said, all this needs to work very much with in plans what we currently have to make a guidance.

And your analysis on BA Fiskars' role in the fourth quarter is also correct. It's not really the gardening season. Yes, some craft things happen for the holiday season.

And of course, from our perspective, we wish a lot of snow to the Nordic countries. The snow season is always something we are cheering while the traffic in the cities is kind of not happy about snow.

Perfect. This is very helpful. And then wanted to touch upon -- on the geographical sales development as it seems that, I mean, the demand is better in Americas as well as in the Asia segment versus, I mean, Europe is still lagging behind.

Is there any like lead indicators or some bright spots, which would indicate that Europe would join the crowd what comes to the demand? Or do you see that Europe is likely to remain muted also for the last quarter?

Of world economy, Europe does not currently have a big contributing factor to world economic growth and consumers in Europe are typically more cautious than in many other geographies.

In the Nordics, we've had good tailwinds with our Vita business. So when we commented broad-based, both brands and market-wise. So Nordics, we have been able to remain very relevant and very much a desired way to bring some joy and making the everyday extraordinary with our products. But your analysis is correct that it's both North America, U.S., especially and Asia where the consumers are more happy to consume.

And then finally, touching upon the tariff situation and your mitigating actions. I mean, personally, I was very surprised, I mean, how well, I mean, you were able to, I mean, to get the price increases through for the Fiskars segment, I mean, during the Q3. So would you say that, I mean, the tariff risk has now winded down? Or is there still, I mean, many unknowns that we should consider as a risk going forward?

Yes, we are very pleased with the Fiskars BA team here, how they have succeeded to mitigate those tariffs. As you might remember, we got some extra burden there late August when those steel tariffs came in and we are still -- we are still mitigating also those there.

We are now leaving the last 2 weeks, if I'm right, this last 90-day extensions, which is given to Chinese tariff. So let's see where it goes after 8th of November there. So no one knows at the moment. So we are, as Jyri mentioned, following on a daily basis what's the current mood when it comes to tariffs and trying to tackle it.

More fundamental-based, the actions we have put in place, price increases are only part of the story, mainly focusing on our own footprint, what we have in sourcing there to find alternatives for those high tariff countries, how we are able to make some re-footprinting in that sense.

So can't promise that we have tackled all the problems because we don't know them. But as the ones we know at the very moment, we are very pleased with our BA Fiskars execution capability.

And with respect to the re-footprinting that implies basically products that we have historically sourced out of China, we have qualified suppliers, brought tooling into some of the neighboring countries, which already have settled down tariff deals with the United States. And those tariffs are clearly at a lower level than the current China tariffs are and gives a kind of a planning horizon for us going forward.

And then I had one more question in mind, which reflects to the Gerber division as I recall that Gerber was the one that had faced some difficulties or faced lower demand during the summer period. So what are currently the trends you are specifically seeing for the Gerber brand in the U.S.?

Gerber has been hit in some geographies by restrictions, whether you can advertise knives or multitools, which are then qualified also as knives because they are in some jurisdictions like weapons.

And from that perspective, the push towards the consumers has been a more difficult struggle. Our efforts, and I visited in the summer Portland and the Gerber team, similarly as in the rest of Fiskars BA, innovation and remaining relevant to the consumer is extremely important.

And I think it's fair to say that we have neglected that. It's been a few years where we haven't had too much of innovation flow, new products and happy to see that that pipeline is also well equipped with new ways to charm the consumer, to have the outdoor people, the fishermen and the women and the hunters and campers and all those with new need stuff equipped and that is the key to tackle this issue.

So what we can't advertise in public or what needs to go beyond a locked cabinet in a outdoor store in some states in the U.S., we have now other ways in the pipeline to make us relevant and again, wanted.

Yes. Maria, when I said that 10 out of 12 brands were growing in Q3, Gerber was one of the growing ones there in Q3.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes, we do have questions in the chat. Thank you, Calle and Maria, for the questions through the phone. But maybe if we start with the question related to top line. And Jyri, if you take this one.

Was there any impact of timing between quarters supporting the top line development in Q3?

Not that I'm aware. We have potentially between Q2 and Q3, we have the load-ins for the back-to-school season in North America. That's traditionally been something that either happens last week of June or first weeks of July and then you get big swings.

But we are not here in that type of phasing the holiday season load-ins, which holiday season as reminding for Vita, less than half of our sales is through distribution, more than half, clearly more than half is through our D2C channels. Those load-ins are happening now in October anyhow. So those have not been moved forward to September. No signs of that.

Great. Let's see what we have next. Related to production, maybe Jyri, if you can continue.

Given the current demand situation and production curtailments, how do you view the current production footprint, especially in Vita? Are you considering any adjustments?

A prudent and careful manager of a business always considers adjustments. I know this is kind of a rounded answer, but that's our obligation to see how we can best perform and serve our customers and in the end, make money for the company.

Those always being in the background, but now here in terms of some concrete that there is a site that we would need to kind of permanently mothball or so, such plans are currently not on the table. And of course, demand situation is dictating. We are here for the customers, for the consumers. That's dictating in the end the footprint, how we are set up and how we operate that.

Thank you. Maybe, Jussi, related to working capital and inventories.

How large working capital release are you expecting in Q4? Have you considered other actions than reducing inventories?

Yes. Well, following our historical pattern, what we typically have had in Q4 is that working capital is coming down. And typically, cash flow has been improving versus Q3 and Q4 is happening now, we can't confirm it yet.

The actions we have put in place at the moment are exactly ones Jyri already explained there with a high priority target of continue reducing inventories. This inventory challenge is very much on Vita side, less on Fiskars side.

Yes. And maybe to both of you, but maybe if Jyri starts.

When comparing Q4 and Q3, are you expecting higher under-absorption of fixed costs in Vita related to the inventory?

We have implicitly guided for Q4, the EBIT or comparable EBIT number, not individual line items and not individual line items within our cost of goods sold where the supply chain variances would be ending. Certainly, we have our plans how and we will operate our different production sites during the fourth quarter. And based on that calculated and factored in into the mathematics, how we have arrived at our forecast, which are supportive of our guidance.

Great. Then about tariffs. And Jussi, if you start.

Given the U.S. tariffs and additional steel tariffs, how much headwind are you expecting for 2026? And how much of these have you been able to mitigate as of now?

Yes. Steel tariffs, as said, is something new there started or announced in late August. So there the steel tariff impact is mainly in 2026, whilst the other tariffs what we have for country-specific, they have been already since April this year.

So there, this kind of year-on-year change is not expected to be significant. So it's mainly the new one, i.e., steel tariffs impacting more in 2026 than in 2025.

We haven't announced any specific numbers how much they are impacting, what's the direct impact of tariffs on our gross margin, only say that when it comes to direct impacts there, we do have toolbox to mitigate them, including this re-footprinting what we are referring prices and the likes.

And of course, we are now looking for category expansions there when it comes to offering what we have, which will also help to create new demand and therefore, tackling it not only by cutting costs, but also expanding our portfolio and top line there. So toolbox is quite broad. How much still left for 2026, that we haven't yet commented.

Yes. We still have a couple of questions and let's see if there are any new ones coming. It might be that we have already covered this, but maybe just to remind, how quickly can inventory levels in Vita be normalized? If you want to comment on that?

It is not a sprint. It consists of 2 factors. One is the one which is more really in our control, and that's curtailing the supply or the input into the inventories, both relating to sourced items and own manufacturing. And those we can tackle and those we have started to tackle very clearly.

At the same time, the output from inventories, so clearance sales type of topics, that's also needed. Now we are heading to the seasons where you have, as we know, the Black Fridays of this world, they are, to some extent, also created for clearing some inventories and -- but it's definitely not done in the fourth quarter of this year. It's -- if not a marathon, but it's still long distance activity that we have there.

So working on both ends, input and the output. And as we progress, the output, of course, requires always the willing purchaser, consumer or distributor. And once we have more to share on that front too, not only those actions that are under our control, we will, of course, be back and updating on those.

Thank you. And then maybe the final question for Jussi.

With net debt at over EUR 600 million and leverage at 3.7x, what is the deleveraging plan for 2026?

Very good point. First of all, it's just an outcome, what Jyri just explained. So that's the main driver there what we have on short term and then I'm moving to 2026.

Typically, historically, we have come down when it comes to net EBITDA towards the end of the year after Q3. So that's our historical pattern there. More important than how much we are now coming down is to turn the trend.

So we need to get a declining trend there when it comes to our net debt EBITDA and then impacting on both components there, net debt and then improving our EBITDA.

I'm not expecting any rapid overnight improvement there. As I said, more important is now to have fundamentals in place to turn the trend, getting it on the lowering trend there.

And then what we said that this max 2.5x net debt to EBITDA remains our target. It might take a bit more time than probably someone might expect to get it there, but it clearly remains our target.

And we work in a very determined way on both elements of this EBITDA --

Yes. Yes.

-- and the net debt where really the main lever is inventories.

Yes.

Thank you. It seems that we are out of questions. So thank you for the active participation, and I wish you all a nice end of the week.

Thank you very much for joining, and happy shopping in the year-end holiday and gifting season.

Thank you.