Annual Report 1999 - Fiskarsgroup.com

President’s reviewStig StendahlAyear ago I expressed my hope that the problemsfaced by the Fiskars Consumer Products Group inlate 1998 would be of a passing nature and that1999 would bring about a return to positive development.After a relatively promising start in the new year it soonappeared, however, that the changes that had occurred,above all in the American market, would drastically affectour anticipated development. However, the overall resultof the Corporation was relatively good but a significantpart of it was this time generated by our long-term investments.The change in the buying behavior of consumers,particularly in the USA, became clearly visible during theyear while at the same time our large distributors adoptednew operating practices. This in turn significantlyincreased demands for shorter delivery times which led toa need to maintain higher inventories. Also imports fromChina and other South East Asian countries grew dramaticallycausing price pressures in all segments of the marketsfor consumer products.As a result of these factors, Fiskars has introducedstrong measures to defend its positions in this importantmarket, launching an extensive structural program toadapt operations to the prevailing competitive situation.The objective of this program, scheduled to continue fortwo years, is to better utilize the production and marketingresources built up in recent years by acquisitions. Anumber of smaller units have already now been integratedto reduce costs and coordinate operations.The plans also include integration of certain productionunits and moving production to low-cost countriesand increasing sub-contracted production for instance inChina. In pace with this trend towards fewer but moreefficient units, the structure of the Consumer ProductsGroup has been further finetuned by organizing operationsinto three product categories, i.e. Garden; Home, Office &6