Risk management

Principal uncertainties

The overall objective of risk management is to identify, evaluate, and manage risks that may threaten the achievement of the Company’s business goals. The aim is to secure personnel and assets, ensure the uninterrupted delivery of products to customers, and protect the Company’s reputation, brands, and shareholder value from developments or damage that may undermine the Company’s profitability or adversely affect its assets.

In relation to financial reporting, the task of risk management is to identify potential threats affecting the financial reporting process that, if they were to become reality, could lead to a situation in which management lacked the up-to-date, sufficient, and essentially accurate information needed to manage the Company and in which financial reports published by the Company did not provide an essentially accurate picture of the Company’s financial position.

The principles observed in risk management are included in the risk management policy approved by the Board of Directors. The Board’s Audit Committee oversees the efficiency of risk management systems. Responsibility for identifying, evaluating, and also, to large extent, managing Fiskars risks is delegated to business units and support functions. The Group Treasury is responsible for developing and maintaining the methods, tools, and reporting associated with risk management. In addition, it carries out regular risk assessments together with business units and support functions and assists in the preparation of action plans based on the results of these assessments.

Fiskars has taken out extensive insurance to provide cover for the Group’s main assets, business interruptions, transportation, and liabilities. Insurance matters, with the exception of certain types of local insurance, are managed centrally by the Group Treasury. The Group Treasury manages financial risks in accordance with principles approved by the Board of Directors.

Fiskars manages the risks associated with its financial reporting process in a number of ways including the following:

  • Maintaining and resourcing an appropriate financial management organization.
  • Limiting the rights and responsibilities of individual members of staff appropriately.
  • Managing the user rights that give access to the Group’s reporting system centrally.
  • Issuing guidelines on accounting and reporting.
  • Maintaining a common Group chart of accounts.
  • Making effective use of IT tools.
  • Providing ongoing training for personnel.
  • Validating the accuracy of information that is reported as part of the reporting process.

The Company is currently unifying its financial processes and implementing modern IT tools as part of its five-year development program in the EMEA region. With regards to risk management, the objectives are to increase the number of internal checks and controls and to improve the transparency and quality of information used in management decision-making.

Risk management framework



Principal uncertainties

Customer relationships and distribution

As Fiskars produces and sells consumer products, general market conditions and a decline in consumer demand in key market areas in Europe and North America could have a material adverse effect on the Company’s net sales and profitability.

Fiskars products are primarily sold to wholesalers, retailers, and directly to consumers through its own stores. Sales to large individual customers are significant in some businesses, but none of the customers account for more than 10% of the total net sales of the Group. As some major customers decide on their product range and suppliers only once annually, failure to meet customer needs may result in Fiskars losing customers, and the loss of even a small number of major customers or disruption in the activities of a specialized distribution channel could have an adverse effect on Fiskars business and profits.

Supply chain

A significant proportion of the products sold by Fiskars are manufactured by external suppliers and, in addition, the Company purchases components and raw materials from several suppliers. By making greater use of outsourcing the Company is increasingly exposed to risks related to its outsourced supply chain. In addition, the company is consolidating its supplier base and its dependency on certain key suppliers is increasing. Most of the suppliers are located in Asia, which is far from the Company’s key markets, and disturbances at the source of supply or in the logistics chain could prevent the orderly delivery of products to customers.

Fiskars is also increasingly exposed to legal, economic, political, and regulatory risks related to the countries of its suppliers. When selecting its suppliers, the Company emphasizes delivery performance, suppliers’ ability to react to changes in demand, quality, and ethical aspects of suppliers’ operations. Fiskars requires its partners to commit to principles covering labor and human rights, health and safety, the environment, and business ethics. Suppliers are required to follow Fiskars Supplier Code of Conduct, and audits are carried out to verify compliance.

The importance of a seamlessly functioning supply chain continues to increase and Fiskars is continuously strengthening its global sourcing operations. The Company currently runs regional sourcing offices in Shanghai, Bangkok, and Helsinki and focuses on value creation by harmonizing sourcing processes and supplier-base management principles on a global scale.

Raw materials and components

The most important raw materials used in Fiskars products are steel, aluminum, and plastics. Sudden fluctuations in raw material, component, and energy prices or availability can have an impact on the Company’s profitability. Fiskars uses long-term contracts with some of its raw material suppliers to manage price risks, and derivatives are used to hedge the price of electricity for production plants in Finland.

Currency rates

A significant proportion of the Group’s operations is located outside of the eurozone. Consolidated financials are reported in euros and changes in foreign exchange rates may have an adverse impact on the reported net sales of the Group, its operating results, and balance sheet. Changes in foreign exchange rates may also impact Fiskars competitiveness negatively. The Company aims to manage currency risks related to commercial cash flows primarily through business means. Acquisition of production inputs and sale of products are primarily denominated in the local currencies of the Group companies. Most of the estimated exports and imports in foreign currencies are hedged up to 12 months in advance.

Brands and corporate reputation

Fiskars has a number of global, regional, and local brands in its portfolio. Any adverse event affecting consumer confidence towards Fiskars or its brands could have a detrimental impact on its business. Fiskars monitors its corporate reputation and the performance of its leading brands closely, and is committed to taking appropriate action to mitigate any threat to brand value or corporate reputation.

Product offering

It is essential for the Company to offer products appealing to consumers. Failing to meet evolving consumer preferences or adverse changes in the competitive landscape would impact the financial performance of the Company. Fiskars manages these risks by constantly renewing its products and services to meet the needs of consumers and trade customers.

Fiskars offers a wide variety of products to be used in the home, the garden, and outdoors. Most products are sold in several geographical markets. A severe manufacturing or design defect may require corrective actions which can negatively impact the Company’s sales and profitability. Fiskars manages the risk by applying systematic new product development process and strict quality assurance controls.

Weather and seasonal dependence

Some product groups, particularly garden tools during the spring and snow tools during the winter, can be affected by the weather. Unexpected weather conditions can have a negative impact on sales of these products. Sales of homeware products are heavily geared towards the last quarter of the year, and any negative issues related to product availability or demand during this quarter could affect the full-year result of this business significantly.

Investment and restructuring programs in the EMEA region

In December 2010, Fiskars launched a five-year development program in the EMEA region with an investment of approximately EUR 65 million. This program was launched to ensure competitiveness through well-functioning processes and systems which enable shared functions and structures. In June 2013, the company announced a restructuring program entitled “EMEA 2015” to optimize operations and sales units in the EMEA region. The total cost of the program is estimated be around EUR 25–30 million in 2013 and 2014.The programs may be delayed or the planned objectives may not be achieved if the Company fails to execute the programs as planned. Dedicated project teams, also including external advisors, have been established to implement the programs. The corporate management team monitors the progress of the programs and their status is regularly reported to the Board of Directors.


Despite a careful due diligence process, all acquisitions include risks. Fiskars mitigates these risks by planning the integration of acquired businesses in advance, by establishing Fiskars corporate governance principles immediately after the takeover, by setting up a joint integration team and by following the integration and the development of the new company intensively within its corresponding management team, the Executive Board and the Board of Directors of Fiskars.

Associated company

Fiskars has a substantial investment in an associated company, Wärtsilä Corporation. Major changes in Wärtsilä’s share price, profitability, or dividend would have a material impact on Fiskars.