Annual Report 2002 - Fiskars Corporation

PRESIDENT’ S REVIEW5trial production levels remained low and consumer confidence,which is critical for economy, declined, Fiskars’ businessactivities developed satisfactorily. The value of theUS dollar began sliding in late spring and by the year-end itwas nearly 20 per cent weaker than in the early part of theyear. This is eroding American consumers’ buying powerbut will in the long run improve Fiskars’ competitiveness,because a significant part of its production is in the UnitedStates. In 2002, however, the impact of the weaker dollarrate was mainly seen as a decrease in euro denominatednet sales.The European markets were stable and sales volumeslargely remained on the level of previous years. It appearsthat the retail sector is rapidly consolidating, and the purchaseorganizations of international retail chains enteringthe European market operate in an increasingly centralizedway. This means higher requirements on suppliers especiallywith regard to shipping volumes and on-time delivery.I believe that our long expertise as a reliable supplier toleading retail organizations will ensure our good competitiveposition when facing these challenges.During the year, Fiskars Brands, Inc. focused on its coreoperations and development of its infrastructure. The introductionof an extensive resource planning system, whichwill ensure the control and follow-up of the future growthand profitability, continues in the US operations. Marketingand customer service received special attention. An extensivebranding study, with consumer focus groups in severalmarkets, was conducted in order to better understand customersand their expectations on Fiskars and its products.The information from this study will be utilized in FiskarsBrands’ strategic planning.The efficiency improvement measures have continued.In the USA production has been consolidated and productrationalization is well under way. In Europe focus has mainlybeen on the UK and Germany. The factory at Bridgend,Wales, was closed down, and in Germany operations wereconsolidated. The discontinued product lines have beenreplaced by other Fiskars products or partly by products fromAsian sub-suppliers.For Inha Works, the year was satisfactory. The demandfor boats saw a moderate growth, and particularly thebiggest Buster models were enthusiastically received in themarketplace. Hinge sales remained unchanged from the previousyear, in spite of the recession in the building sector.Growing export activity and Fiskars patent-protected hingemodels strengthen our position as the leading hinge supplierto the Nordic market.Fiskars real estate assets were managed according tosuccessful long-term plans. Construction of a small hotelin Fiskars Village started in the fall in order to increasethe round-the-year utilization of the facilities availablein the area.Like in previous years, Fiskars’ long-term investmentsmainly consist of the holding in Wärtsilä Corporation, aswell as of placements in several international investmentfunds. These investments continued to yield good returns.Corporate governance has been a current topic throughoutthe world in 2002. Fiskars as a Group and Fiskars Brandshave since long followed the today generally recommendedprinciples of good governance.Although at this writing, the future outlook is veryuncertain I am confident that Fiskars today is a strongand flexible company, capable of responding to the futurechallenges even in highly varying operating conditions.I wish to thank our customers, cooperation partners,personnel and shareholders for the past year.Helsinki, February 2003