2008-02-07 11:46:50 CET
2008-02-07 11:47:43 CET
REGULATED INFORMATION
Stockmann - Financial Statement Release
STOCKMANN'S FINANCIAL STATEMENT BULLETIN 2007
A MAJOR ACQUISITION SUPPORTS STOCKMANN'S GROWTH STRATEGY
The Stockmann Group's sales from continuing operations were up 13 per cent
in 2007 to EUR 1 668.3 million (EUR 1 477.8 million in 2006). Fourth-
quarter operating profit from continuing operations improved on last year
and was EUR 70.8 million (EUR 50.5 million). Profit before taxes from
continuing operations for the entire financial year was EUR 119.4 million
(EUR 99.4 million). In December, Stockmann acquired a 98% holding in
Lindex, one of Northern Europe's largest fashion chains. Stockmann's
earnings per share were EUR 1.59. The Board of Directors will propose the
payment of a dividend of EUR 1.35 per share.
Key figures
Continuing operations 1-12/2007 1-12/2006
Sales EUR mill. 1 668.3 1 477.8
Revenue EUR mill. 1 398.2 1 239.6
Operating profit EUR mill. 125.2 99.9
Profit before taxes EUR mill. 119.4 99.4
Earnings per share EUR 1.59 1.39
Group total
Equity per share EUR 10.66 10.34
Cash flow from operating EUR mill. 119,9 117.4
activities
Gearing per cent 146.9 -6.3
Equity ratio per cent 32.6 74.5
Weighted average number of thousands 55 606 54 310
shares
Return on capital employed, per cent 12.1 22.9
rolling 12 months
Financial reporting
Stockmann adopted International Financial Reporting Standards (IFRS) on
January 1, 2005. The financial statements have been prepared in compliance
with IAS 34. The accounting policies and calculation methods applied are
the same as those in the 2006 financial statements. In the financial
reporting for 2006, Stockmann Auto and the Zara business in Russia are
treated as discontinued operations in accordance with IFRS 5. The
acquisition of Lindex in 2007 has been treated as a business combination
in accordance with IFRS 3. The figures are unaudited.
Lindex becomes a Stockmann Group Company
In December, the branch office in Finland of Stockmann Sverige AB, a
Stockmann subsidiary, purchased 97.8 per cent of the shares in the Swedish
fashion chain AB Lindex (publ) through a public tender offer. Lindex is
one of the leading fashion chains in the Nordic countries. It has good
profitability and a strong market position, particularly in Sweden, Norway
and Finland. Furthermore, the company already has operations in all the
Baltic countries and, since 2007, also in the Czech Republic, with
purchasing offices in six countries. At the close of the financial year,
Lindex had 346 stores and a payroll of 4 644 employees.
Lindex is in a similar strategic position to Stockmann, because both
companies are seeking to achieve a large part of their growth outside
their domestic markets. Lindex rounds out the Stockmann Group's operations
and thereby improves the potential of all Stockmann's divisions to achieve
profitable growth rapidly, above all in the countries of Eastern Europe
and in Russia. Stockmann has set in motion a project to integrate Lindex
into the Stockmann Group. The project involves a thorough revision of all
functions to ensure that the best ways of operating and advantages of
scale can be utilized stage by stage across the entire Group.
The cost of acquiring Lindex's entire shares outstanding is EUR 850.9
million. Lindex's balance sheet items have been measured at fair value at
the time of the acquisition. According to preliminary calculations, the
balance sheet value of trademarks, customer and supplier agreements as
well as inventories was a total of EUR 89.1 million greater than the
carrying amount at the time of the purchase, EUR 91.0 million. EUR 721.7
million of the acquisition cost has been allocated to goodwill. The
acquisition cost is presented in the tabular section of the financial
statement bulletin in accordance with IFRS 3.
Lindex was included in Stockmann's consolidated financial statements as
from December 5, 2007. During the financial year, Lindex increased the
Stockmann Group's sales by EUR 68.1 million, revenue by EUR 54.7 million
and operating profit by EUR 15.0 million.
According to the pro forma calculation drawn up to illustrate the
situation, Lindex's sales from continuing operations during the calendar
year 2007 were EUR 704.9 million, revenue 566.2 million and operating
profit EUR 70.9 million. If Lindex had been consolidated within the
Stockmann Group from the beginning of the calendar year, the Group's sales
for the 2007 financial year, according to the pro forma calculation, would
have been EUR 2 305.1 million, revenue EUR 1 909.7 million and net profit
EUR 93,7 million.
Lindex's shares were delisted from the OMX Nordic Exchange Stockholm on
January 18, 2008. At the balance sheet date, 2.2 per cent of the shares in
Lindex were not owned by Stockmann. The acquisition cost of these shares
will be EUR 18.4 million, for which a corresponding non-current non-
interest bearing liability has been recorded in the balance sheet. In
January 2008, Stockmann acquired an additional 0.6 per cent of the shares
in Lindex. In order to obtain the remaining 1.6 per cent of the shares,
redemption proceedings have been initiated and on the basis of this Lindex
has been consolidated within the Stockmann Group as a wholly owned
subsidiary in accordance with IAS 32.
Sales and result
Consolidated operating profit from continuing operations in the fourth
quarter improved on the previous year and was EUR 70.8 million (EUR 50.5
million). The result includes Lindex's operating profit after the
acquisition date, EUR 15.0 million.
Operating profit from continuing operations for the financial year grew by
EUR 25.3 million to EUR 125.2 million (EUR 99.9 million). Operating profit
from continuing operations includes non-recurring capital gains of EUR 9.7
million, whereas these amounted to EUR 5.1 million a year ago. Earnings
improved in Finland and the Baltic countries and decreased in Russia.
Consolidated earnings were burdened by the costs of starting up a new
department store in Moscow as well as by the energetic establishment of
new Bestseller stores and Seppälä stores in Russia and the certificate
problems encountered in goods transports in the first part of the year.
The Stockmann Group's sales from continuing operations in 2007 grew to EUR
1 668.3 million, up 13 per cent. The Group's sales abroad amounted to EUR
496.8 million, an increase of 40 per cent. Sales from continuing
operations in Finland grew by 4 per cent to EUR 1 171.5 million.
International operations accounted for an increased share of consolidated
sales, rising from 24 per cent to 30 per cent. The Group's revenue was EUR
1 398.2 million, as against EUR 1 300.7 million in the comparative period.
Other operating income amounted to EUR 9.7 million. In the comparative
period, other operating income totalled EUR 34.4 million, consisting
mainly of capital gains on asset sales.
The Group's operating gross margin increased by EUR 79.9 million to EUR
607.0 million during the financial year. The relative gross margin was
43.4 per cent (40.5 per cent). The relative gross margin on operations of
the Department Store Division, Hobby Hall and Seppälä improved. The
Group's relative gross margin was furthermore lifted by the acquisition of
Lindex and by the discontinuance of low-margin vehicle sales as from the
beginning of March 2006. Operating costs increased by EUR 54.8 million and
depreciation by EUR 4.8 million. Primarily owing to the impact of the EUR
34.4 million of other operating income during the comparative period,
consolidated operating profit was down by EUR 4.4 million to EUR 125.2
million. Net financial expenses grew by EUR 5.2 million and were EUR 5.7
million (EUR 0.6 million). The increase in net financial expenses was due
largely to the debt financing of the acquisition of Lindex shares.
Profit before taxes was EUR 119.4 million for the financial year, down EUR
9.5 million on the figure a year earlier. Direct taxes were EUR 31.1
million, increasing by EUR 6.8 million on the figure a year earlier. In
the comparative period, earnings included EUR 29.3 million of tax-free
capital gains. The Group's fourth-quarter net profit was EUR 48.6 million,
compared with EUR 37.8 million a year earlier. Earnings per share in the
financial year were EUR 1.59 (EUR 1.93) and diluted for options, earnings
were EUR 1.58 (EUR 1.90). Equity per share was EUR 10.66 (EUR 10.34).
Stockmann's Board of Directors set new long-term financial targets in
summer 2006. The targets are: to reach by 2011 a 10 per cent operating
profit on revenue, a 22 per cent return on capital employed and sales
growth that outpaces the market. The target set for the equity ratio was
50 per cent. During the financial year, the Group's operating profit
margin from continuing operations rose and was 9 per cent of revenue.
Owing to the acquisition of Lindex with debt financing, the equity ratio
declined and was 32.6 per cent. In line with this, the return on capital
employed diminished and was 12.1 per cent. During 2008, when the Lindex
acquisition has been completed, the Board of Directors will reassess the
long-term financial targets.
Sales and earnings trend by business segment
The Department Store Division's sales grew by 9 per cent to EUR 1 218.1
million in 2007. Sales in Finland were up 5 per cent. International
Operations' sales were increased by the good like-for-like retail
performance of the department stores in Russia and the Baltic countries, a
fourth department store that was opened in Moscow in mid-February as well
as the new Bestseller stores. In Russia, the problems encountered in
imports in the early months of the year led to a temporary shortfall of
merchandise, which slowed sales growth in the early months of the year.
The department stores in Estonia and Latvia reported an excellent sales
trend. Sales by International Operations grew by 21 per cent and its share
of the division's sales rose to 28 per cent (26 per cent). The relative
gross margin improved during the financial year. The Department Store
Division's operating profit improved substantially and was EUR 91.8
million (EUR 79.5 million). Net profit includes EUR 9.7 million of non-
recurring capital gains, compared with EUR 4.7 million of such gains
recorded in net profit a year earlier. Earnings generated by the
businesses in Finland and the Baltic countries improved clearly. Earnings
from International Operations were burdened by the start-up costs of the
department store that was opened in Moscow in February, the start-up costs
of the new Bestseller and Nike stores and the larger-than-normal discounts
in the second quarter due to delays in customs clearance at the start of
the year. The division's operating profit improved in the fourth quarter
and was EUR 46.9 million (EUR 44.3 million).
Lindex's figures are included in the Group's figures as from December 6,
2007. Three-week sales were EUR 68.1 million, and operating profit for the
same period amounted to EUR 15.0 million. According to the pro forma
calculation, Lindex's sales from continuing operations during the 2007
calendar year were EUR 704.9 million, and operating profit was EUR 70.9
million.
Hobby Hall reported sales growth of 3 per cent to EUR 206.5 million (EUR
199.8 million). Sales grew in both Finland and the Baltic countries.
Operations in Russia were started up in December. Hobby Hall's relative
gross margin increased. Online sales continued to grow strongly,
accounting for 66 per cent of Hobby Hall's distance retailing in Finland
(47 per cent). Online sales also grew in Estonia, accounting for 40 per
cent of Hobby Hall's distance retailing in Estonia (33 per cent). Hobby
Hall placed a new ERP system in operation in April. The commissioning
process burdened earnings in the report period by causing non-recurring
costs and problems in customer service. After the start-up phase, the new
ERP system will enhance Hobby Hall's operations and reporting as well as
improve customer service. Hobby Hall's operating profit in the financial
period was EUR 5.7 million (EUR 7.1 million). Fourth-quarter operating
profit decreased to EUR 2.7 million (EUR 3.4 million), mainly due to start-
up costs for the operations in Russia.
Seppälä's sales grew by 11 per cent to EUR 174.7 million. Sales grew
strongly in Russia and the Baltic countries, where they were boosted by
the new stores that were opened towards the end of 2006 and in 2007 as
well as by the good like-for-like sales trend. Sales abroad grew by 49 per
cent and their share of Seppälä's total sales rose to 30 per cent (22 per
cent). The relative gross margin improved, but fixed costs and
depreciation also increased because of the heavy investments in opening
new stores, especially in Russia. Seppälä's operating profit in the
financial year was EUR 20.7 million (EUR 21.1 million). Fourth-quarter
operating profit amounted to EUR 8.6 million (EUR 7.3 million).
Financing and capital employed
As a consequence of the acquisition of Lindex shares, Stockmann's
financial position and capital structure changed significantly. Interest-
bearing liabilities at the end of the year were EUR 905.6 million (EUR
23.4 million), of which EUR 855.4 million consisted of long-term
borrowings (EUR 23.4 million). Liquid assets totalled EUR 33.2 million at
the end of the year, compared with EUR 59.2 million a year earlier.
Capital expenditures amounted to EUR 977.4 million. Net working capital at
the end of the year was EUR 193.9 million, compared with EUR 194.5 million
a year earlier. Dividend payouts totalled EUR 72.1 million. Share
subscriptions made by exercising the 2000 share options added EUR 3.1
million to shareholders' equity. The equity ratio was 32.6 per cent (74.5
per cent) at the end of the year.
The return on capital employed was 12.1 per cent (22.9 per cent). The
Group's capital employed increased by EUR 909.7 million and was EUR 1
504.7 million (EUR 595.0 million) at the end of the year.
Dividends
For the financial year 2006, in accordance with the resolution of the
Annual General Meeting, a dividend of EUR 1.30 per share was paid, or a
total of EUR 72.1 million. The Board of Directors will propose to the
Annual General Meeting that a dividend of EUR 1,35 per share be paid for
the 2007 financial year. The proposed dividend is 84.9 per cent of
earnings per share.
Capital expenditures and current projects
Capital expenditures during 2007 totalled EUR 977.4 million (EUR 125.5
million).
The construction works for the major enlargement and transformation
project for the department store in the centre of Helsinki are continuing.
The project involves expanding the department store's commercial premises
by about 10 000 square metres by converting existing premises to
commercial use and by building new retail space. In addition, completely
new goods handling, servicing and customer parking areas will be built.
After the enlargement, the Helsinki department store will have a total of
about 50 000 square metres of retail space. The revised cost estimate for
the enlargement is about EUR 190 million. The works are estimated to be
completed phase by phase by autumn 2010. The spaces that were temporarily
not available for retail sales whilst the construction works were under
way have again been placed in use, and the department store's retail floor
space is in the beginning of 2008 the same as it was before the project
started. Henceforth, new retail space will be placed in use when it
reaches completion. During 2007, the project required an investment of EUR
51.6 million. Stockmann has succeeded in carrying out the extensive
project without disrupting the department store's profitability. The
department store's sales grew in 2007.
In 2007, a Stockmann Beauty store was opened in Joensuu, Rovaniemi and
Lappeenranta. The Stockmann Beauty chain now has sixteen stores.
In February 2007, the Department Store Division opened a fourth department
store in Moscow, in the Mega shopping centre on the southeast side of
town. The department store has just over 10 000 square metres of retail
space. Stockmann's portion of the total costs of the department store,
which was built in leased premises, was EUR 16.5 million, of which EUR 5.8
million was an outlay in 2007. Operations have started up according to
plan.
Seven new Bestseller stores were opened in Russia during 2007: two in St
Petersburg and one store each in Moscow, Kazan, Samara, Rostov-on-Don and
Novosibirsk. Stockmann now has a total of 18 Bestseller stores in Russia.
The first two Stockmann Nike stores were opened in St Petersburg in
February. During 2007, Stockmann established yet a third store in St
Petersburg as well as stores in Nizhny Novgorod, Novosibirsk and Rostov-on-
Don.
In 2006, Stockmann purchased a 10 000-odd square metre commercial plot on
Nevsky Prospect, St Petersburg's high street. The plot is located next to
the Vosstaniya Square metro station, in the immediate vicinity of the
Moscow railway station. On this plot, Stockmann will erect Nevsky Centre,
a shopping centre with about 100 000 square metres of gross floor space,
of which about 50 000 square metres will be store and office space. A full-
scale Stockmann department store with about 20 000 square metres of retail
space has been planned for the shopping centre, along with other retail
stores, office premises and an underground carpark. The investment outlay
for the department store and shopping centre has grown in step with a rise
in construction costs, project delays and a change in the structure of the
contract agreement. The total investment is estimated to be about EUR 170
million. The foundation works for the building are under way. Stockmann's
objective is to open the department store and commercial centre by the end
of 2009. During 2007, the project required an investment of EUR 24.0
million.
Stockmann has signed a preliminary agreement on opening Moscow's fifth
Stockmann department store in leased premises in the Metropolis shopping
centre that is being built near the city's centre. The department store
will have a total of about 8 000 square metres of retail space, and
Stockmann's investment in the project will be about EUR 12 million.
Stockmann's objective is to open the department store by the end of 2008.
Stockmann has also made an agreement on opening a full-scale department
store in leased premises located in a shopping centre that is currently
being built in Ekaterinburg, Russia. The department store will have a
total of more than 8 000 square metres of retail space, and Stockmann's
investment in the project will be about EUR 12 million. According to
plans, the department store will be opened in 2009.
At the beginning of 2008, Stockmann signed a preliminary agreement on
opening a sixth Stockmann department store in Moscow in leased premises.
The department store, which will be located in the Rostokino shopping
centre that is under construction on the north side of Moscow, will have
about 10 000 square metres of retail space, and Stockmann's investment in
it will be about EUR 16 million. According to preliminary plans, the
shopping centre will be completed at the end of 2009.
The Department Store Division's capital expenditures came to EUR 111.5
million.
At the turn of the year, Lindex placed in use a new distribution centre
that is located in Gothenburg, Sweden. The facility will boost the
efficiency of the company's operations and will be fully operational in
the spring of 2008. Lindex has started a refurbishment program of stores
in Norway. The program will be completed in the following two years and
will improve competitiveness. Lindex aims to open business in Russia
during the second half of the year and continues expansion in other
markets. The objective is to open approximately 20-25 new stores in 2008.
Hobby Hall's capital expenditures amounted to EUR 3.5 million, which went
mainly for the upgrade of the ERP system. Hobby Hall launched distance
retailing in Lithuania in February and in Russia at the end of the year.
Hobby Hall is also starting up online sales in Sweden during 2008.
Seppälä's capital expenditures came to EUR 9.3 million. In 2007, Seppälä
opened a store in Tampere and Kerava, Finland, in Pärnu, Estonia, and in
the cities of Vilnius and Kaunas in Lithuania. Seppälä opened 11 stores in
Russia: four in St Petersburg as well as one each in Moscow, Samara,
Nizhny Novgorod, Yaroslavl, Voronezh, Rostov-on-Don and Novosibirsk. In
Finland and Estonia, a total of 15 stores were refurbished, some of them
having moved into new premises. During 2007, an upgrade of the cash
register system was carried out at the stores in Finland and Estonia, and
it was completed in October. Seppälä is continuing to explore the
possibility of starting up operations in Ukraine.
Other capital expenditures came to EUR 853.1 million, of which the
acquisition of the Lindex shares accounted for EUR 850.9 million.
Capital expenditures in 2008 are estimated to amount to about EUR 195
million. The biggest investment items are the enlargement and
transformation project for the department store in the centre of Helsinki
and the construction works on the department store and shopping centre in
St Petersburg.
On September 27, 2007, Stockmann made an agreement with Nordea on
transferring its financing of Loyal Customer accounts to Nordea. The
consideration paid for the transfer under the agreement contributed to
improving Stockmann's earnings. This transfer of accounts will lighten
Stockmann's balance sheet in 2008 by about EUR 65 million. The credit
facilities of Stockmann's credit line Loyal Customer Cards will converge
with those of the international MasterCard during 2008 in Finland, Estonia
and Latvia, where Stockmann has previously not offered a Loyal Customer
Card with a credit facility. In respect of Russia, Stockmann, acting in co-
operation with Citibank, has agreed on bringing to market a MasterCard
Loyal Customer Card with a credit facility in spring 2008.
Shares and shareholders
The company's market capitalization diminished by EUR 368.8 million during
the year and stood at EUR 1 659.8 million at the end of the year (EUR 2
028.6 million).
Stockmann's share price underperformed both the OMX Helsinki index and the
OMX Helsinki Cap index during the report period. At the end of the year,
the stock exchange price of the Series A share was EUR 29.50, compared
with EUR 36.40 at the end of 2006, and the Series B share was selling at
EUR 29.66, as against EUR 36.48 at the end of 2006.
The 192 865 Stockmann shares subscribed for in December 2006 with the
share options for the year 2000 were entered in the Trade Register on
February 28, 2007, and they were admitted to public trading on the OMX
Nordic Exchange Helsinki together with existing shares on March 1, 2007.
Share options for the year 2000 were exercised in March to subscribe for
238 709 shares. Of these, 18 000 shares were entered in the Trade Register
on April 10, 2007, and 220 709 shares on May 14, 2007. They were accepted
for public trading on the OMX Nordic Exchange Helsinki together with the
old shares on April 11, 2007 and May 15, 2007. As a consequence of the
subscriptions, the share capital was increased by EUR 477 418. Following
the increases the share capital is EUR 112 187 224.
A total of 2 500 000 new Series B shares were eligible for subscription on
the basis of the share options for 2000. During the subscription period, a
total of 2 499 800 Stockmann Series B shares were subscribed for with the
share options. The subscription period ended on April 1, 2007.
At December 31, 2007, Stockmann had 24 564 243 Series A shares and 31 529
369 Series B shares.
Stockmann held 369 560 of its own Series B shares (treasury shares) at the
end of 2007, and they represented 0.7 per cent of all the shares
outstanding and 0.1 per cent of all the votes. The shares were bought back
at a total price of EUR 5.6 million.
The Annual General Meeting in 2006 authorized the Board of Directors to
decide on the transfer of the company's own Series B shares in one or more
instalments. The authorization will be valid for five years. The company's
Board of Directors does not have valid authorizations to increase the
share capital, to float issues of convertible bonds or bonds with
warrants, or to buy back its own shares.
Board of Directors' proposals to the Annual General Meeting
The Board of Directors proposes to the Annual General Meeting that the
Board be authorized to resolve on the issuance of shares and/or of special
rights entitling holders to shares referred to in chapter 10, section 1 of
the Companies Act in one or more instalments. The Board will be authorized
to decide on the number of the Series A and Series B shares to be issued.
Under the authorization, the total number of shares to be issued may not
exceed the total maximum of 15 000 000 shares. The equity issue or the
issuance of special rights can be carried out either in line with the pre-
emptive subscription rights of existing shareholders, or in disapplication
of the pre-emptive rights (rights issue). Under the authorization, the
Board is entitled to decide on all terms and conditions of the equity
issue and the issuance of special rights pursuant to chapter 10, section 1
of the Limited Liability Companies Act. The authorization remains in force
for a maximum of three years as from the date of the Annual General
Meeting. The purpose of the equity issue and/or issuance of special rights
entitling to shares is to strengthen the company's capital structure by
repayment of the borrowed capital raised for the acquisition of Lindex.
Up to now, Stockmann has twice carried out a share option programme
directed at its Loyal Customers. They have proved beneficial, both from
the company's standpoint and for Loyal Customers. Accordingly, the Board
of Directors will propose to the Annual General Meeting that the programme
be continued by granting a total maximum of 2.5 million share options
without consideration to Stockmann's Loyal Customers in disapplication of
shareholders' pre-emptive subscription rights. The purpose of granting the
share options is to offer Loyal Customers a significant benefit that
rewards them for patronage and at the same time improves Stockmann's
competitive position. Share options will be granted to Loyal Customers
whose purchases during January 1, 2008 - December 31, 2009, together with
purchases made on parallel cards for the same account, are at least EUR 6
000 in total amount. For purchases of at least EUR 6 000, a Loyal Customer
will receive 20 share options without consideration. In addition, for each
full 500 euros by which the purchases exceed EUR 6 000, the Loyal Customer
will receive an additional two share options. Each share option entitles
its holder to subscribe for one of the company's Series B shares. It will
be proposed that the subscription price per share be the volume-weighted
average price of the Series B share on the OMX Nordic Exchange Helsinki
during the period February 1 - February 29, 2008.The subscription price of
a share subscribed for with the share options will be lowered, by the
amount of the dividends declared prior to the share subscription, on the
record date for each dividend payout. The subscription period for the
shares is in May in the years 2011-2012. As a consequence of the
subscriptions, the company's share capital can be increased by a maximum
of EUR 5.0 million.
Number of employees in 2007
The Group had an average payroll of 11 161 employees in 2007, or 1 092
more than in the comparative period (10 069 employees in 2006 and 10 558
in 2005). The increase in the number of employees was attributable to the
opening of a new department store in Russia, new Bestseller, Nike and
Seppälä stores abroad and the acquisition of Lindex in December. Converted
to full-time staff, Stockmann's average number of employees grew by 942
and was 8 979 employees (8 037 in 2006 and 8 537 in 2005). The Group's
total wages and salaries grew by EUR 14.0 million from the comparative
period and was EUR 181.9 million (EUR 167.9 million in 2006 and EUR 178.3
million in 2005).
At the end of December 2007, Stockmann had 8 294 employees working abroad.
At the end of December of last year Stockmann had 3 477 people working
abroad. The proportion of employees working abroad was 50 per cent of the
total personnel (32 per cent).
Corporate social responsibility
Corporate social responsibility is part of the company's normal long-term
operations. The focuses of Stockmann's corporate social responsibility are
our own staff, the environment and far-reaching integrity in overseas
sourcing.
Risk factors
With the acquisition of Lindex, the Stockmann Group's areas of operations
expanded. Whereas the Group previously had operations in Finland, Russia
and the Baltic countries, it now also operates in the well-established
markets of Sweden and Norway as well as in the Czech Republic, where
operations are in the start-up stage. The risk level of the business
environment in the Stockmann Group's areas of operations varies. The level
of business risk in the Baltic countries has diminished significantly
after these countries became members of the European Union, nor do the
risks, apart from the present risks of an overheating of the economy,
differ in any material respect from business risks in Finland.
Business risks in Russia are higher than in the Nordic countries and the
Baltic area, and the operating environment is less stable owing to factors
such as the business culture and the undeveloped state of the
infrastructure in the country concerned. The pervasiveness of the grey
economy, particularly in the importation of consumer goods, is still large
and plays a part in distorting properly functioning competition. Over the
past years, the operating environment and legislation pertaining to
business activities have nevertheless evolved favourably. The country's
economic growth has been robust thanks to the strong impetus from export
revenues in the energy sector. Stockmann has over 18 years of experience
of operating in Russia's continually changing operating environment.
Accordingly, even large changes in the operating environment in Russia are
not estimated to result in a material increase in the Group's business
risk.
Fashion accounts for about 53 per cent of the Group's sales. An inherent
aspect of the fashion trade is the short life cycle of products and their
dependence on trends, the seasonality of sales and their susceptibility to
abnormal weather conditions. The Group responds to these factors as part
of its day-to-day management of operations. Except for significant
exceptional situations, these factors are not estimated to have a material
effect on the Group's sales or earnings.
The Group's operations are based on flexibly run logistics and efficient
goods flows. Delays or disturbances in flows of goods and information can
have a temporarily detrimental effect on operations. Every effort is made
to control these operational risks by developing appropriate back-up
systems and alternative ways of operating as well as by investing in
information systems that run in a snag-free manner. Operational risks are
also met by taking out insurance cover. Operational risks are not
estimated to have a material impact on Stockmann's business activities.
The Group's revenue and earnings are affected by changes in foreign
exchange rates between the Group's reporting currency, the euro, and the
Swedish krona, the Norwegian krone, the Russian rouble, the United States
dollar as well as certain other currencies. Financial risks, including
risks arising from interest rate fluctuations, are managed in accordance
with the risk policy confirmed by the Board of Directors, and they are not
estimated to have a material effect on the Group's business operations.
AB Lindex is involved in ongoing legal proceedings concerning the
eligibility for deduction in Swedish taxation of losses of about EUR 70
million made by the Lindex Group's company in Germany. Lindex has won the
previous legal proceedings in the matter in 2004/2005 and 2005/2006, but
the Swedish tax authorities have appealed the decisions, and hearing of
the case is continuing. Lindex has recorded against the losses a tax
deduction of about EUR 21 million, including interest, which is recorded
in earnings.
Lindex has also demanded a rectification of an assessment on the basis of
the estimated earnings from operations in Germany during 2004-2006. The
value of this rectification demand is about EUR 32 million, which has not
been recorded in earnings.
The Group is engaged in legal proceedings concerning the validity of the
leasehold on the Smolenskaya department store, which is located in the
centre of Moscow, after April 1, 2008. The litigation concerns exercise of
a 10-year continuation lease period under the lease agreement.
The Stockmann Group is not involved in other major pending litigation.
Full-year outlook
Of late, uncertainty has increased greatly in the world economy as well as
in the financial and equity markets. In the Stockmann Group's market areas
in the Nordic countries, the Baltic area and Russia, this has nevertheless
not been reflected in consumer demand. According to estimates, there will
be further growth in consumption demand. The growth will be stronger in
the Baltic countries and Russia than in the Nordic countries.
Lindex will be part of the Stockmann Group for all of 2008. Because sales
by all the divisions are expected to be on a favourable trend, this means
a strong increase in the Group's sales. Stockmann's consolidated sales are
estimated to come in at approximately EUR 2.4 - 2.5 billion in 2008.
Operating profit from continuing operations is expected to improve and all
the divisions are set to generate higher operating profit. The operating
result for the first quarter of 2008 will be lower than in the previous
year and in the red owing to the timing of a campaign and a non-recurring
imputed IFRS expense item recorded on the Lindex transaction.
Correspondingly, second-quarter earnings will improve substantially on the
figure a year earlier. Although the Group's financial expenses following
the Lindex acquisition will increase clearly, the objective is to post
higher profit in 2008 than in the previous year.
Balance sheet, Group EUR millions 31.12.07 31.12.06
ASSETS
Non-current assets
Intangible assets 844.5 6.3
Property, plant and equipment 476.8 352.2
Available-for-sale investments 6.5 6.5
Non-current receivables 1.7
Deferred tax assets 5.3 2.5
Non-current assets, total 1 334.8 367.5
Current assets
Inventories 244.4 155.0
Receivables, interest-bearing 98.8 98.9
Receivables, non interest-bearing 112.5 87.0
Cash and cash equivalents 33.2 59.2
Current assets, total 488.9 400.1
Assets, total 1 823.7 767.6
EQUITY AND LIABILITIES
Equity 593.8 571.6
Minority interest 0.0 0.0
Equity, total 593.8 571.6
Non-current liabilities, interest-bearing 855.4
Reserves 5.3
Non-current liabilities, total 860.7 23.4
Deferred taxes liabilities 57.3 26.2
Current liabilities
Current liabilities, interest-bearing 50.1
Current liabilities, non interest-bearing 261.7 146.4
Current liabilities, total 311.8 146.4
Equity and liabilities, total 1 823.7 767.6
Equity ratio, per cent 32.6 74.5
Gearing, per cent 146.9 -6.3
Cash flow from operations per share, EUR 2.16 2.15
Interest-bearing net debt, EUR mill. 773.6 -134.7
Number of shares at September 30, 56 094 55 662
thousands
Weighted average number of shares, 55 606 54 310
thousands
Weighted average number of shares, 55 815 55 178
diluted, thousands
Market capitalization, EUR mill. 1 659.8 2 028.6
Equity ratio, per cent = 100 x (Equity + minority interest) / Total assets
less advance payments received
Gearing, per cent = 100 x Interest-bearing liabilities less cash and cash
equivalents / Equity total
Interest-bearing net debt = Interest-bearing liabilities less cash and
cash equivalents less interest-bearing liabilities
Market capitalization, EUR mill. = Number of shares multiplied by the
quotation for the respective share series on the balance sheet date
Cash flow statement, Group EUR millions 1-12/2007 1-12/2006
Cash flows from operating activities
Net profit for the financial year 88.4 104.7
Adjustments:
Deprecation 36.9 32.1
Profit (-) and loss (+) from sales -34.4
of non-current assets
Financial expenses 7.0 2.3
Financial income -1.3 -1.8
Taxes paid 31.1 24.3
Other adjustments 1.2 1.7
Changes in working capital:
Change in trade and other receivables -11.0 1.7
Change in inventories -12.5 5.2
Change in trade payables and other 8.8 11.2
liabilities
Interest paid -6.5 -2.5
Interest received 1.3 1.1
Taxes paid -23.5 -28.2
Net cash from operating activities 119.9 117.4
Cash flows from investing activities
Investments in tangible and intangible -113.2 -112.2
assets
Acquisition of subsidiary net cash -852.5 -12.7
acquired
Disposal of subsidiaries less cash at 105.0
date of disposal
Capital expenditures on other investments -0.5
Cash from tangible assets 8.4
Cash from other investments 0.9
Dividends received 0.1 0.1
Net cash used in investing activities -965.6 -11.0
Cash flows from financing activities
Proceeds from issue of share capital 5.8 17.2
Change in short-term loans, increase (+), 35.5 -33.3
decrease (-)
Long-term loans, increase (+), decrease (- 835.6 10.0
)
Dividends paid -72.1 -59.5
Net cash used in financing activities 804.8 -65.6
Change in cash and cash equivalents -40.9 40.8
Translation differences in cash and cash 0.4
equivalents
Cash and cash equivalents at start of the 59.2 18.4
period
Cash and cash equivalents 33.2 59.2
Cheque account on credit -14.6
Cash and cash equivalents at end of the 18.6 59.2
period
Income statement, 1-12/2007
Group, EUR millions Continuing Discontinued Total
operations operations
Revenue 1 398.2 1 398.2
Other operating income 9.683 9.7
Materials and consumables -791.2 -791.2
Wages, salaries and employee benefits -224.1 -224.1
expenses
Depreciation -36.9 -36.9
Other operating expenses -230.6 -230.6
Operating profit 125.2 125.2
Finance income and expenses -5.7 -5.7
Profit before tax 119.4 119.4
Income taxes -31.1 -31.1
Profit for the period 88.4 88.4
Earnings per share, EUR 1.59 1.59
Earnings per share, diluted, EUR 1.58 1.58
Operating profit, per cent 9.0 9.0
Equity per share, EUR 10.66
Return on equity, per cent, moving 12 15.2
months
Return on capital employed, per cent, 12.1
moving 12 months
Average number of employees, converted 8.979 8.979
to full-time staff
Investments 977.4 977.4
Income statement, 1-12/2006
Group, EUR millions Continuing Discontinued Total
operations operations
Revenue 1 239.6 61.1 1 300.7
Other operating income 5.1 29.3 34.4
Materials and consumables -721.1 -52.5 -773.6
Wages, salaries and employee -199.3 -5.4 -204.7
benefits expenses
Depreciation -31.8 -0.3 -32.1
Other operating expenses -192.6 -2.6 -195.1
Operating profit 99.9 29.6 129.5
Finance income and expenses -0.5 0.0 -0.6
Profit before tax 99.4 29.6 128.9
Income taxes -24.2 -0.1 -24.3
Profit for the period 75.2 29.5 104.7
Earnings per share, EUR 1.39 0.54 1.93
Earnings per share, diluted, EUR 1.37 0.53 1.90
Operating profit, per cent 8.1 48.4 10.0
Equity per share, EUR 10.34
Return on equity, per cent, moving 19.4
12 months
Return on capital employed, per 22.9
cent, moving 12 months
Average number of employees, 7.923 114 8.037
converted to full-time staff
Investments 125.5 125.5
Earnings per share, EUR = (Profit before taxes - minority interest -
income taxes) / Average number of shares, adjusted for share issues
Return on equity, per cent, moving 12 months = 100 x Profit for the period
(12 months) / (Equity + minority interest) (average over 12 months)
Return on capital employed, per cent, moving 12 months = 100 x (Profit
before taxes + interest and other financial expenses) (12 months) /
Capital employed (average over 12 months)
SEGMENT INFORMATION
Segments
Sales, EUR millions 1-12/2007 1-12/2006 Change
per cent
Department Store Division 1 218.1 1 119.0 9
Lindex 68.1
Hobby Hall 206.5 199.8 3
Seppälä 174.7 158.1 11
Shared 0.8 0.9 -12
Continuing operations, total 1 668.3 1 477.8 13
Discontinued operations 74.8
Group 1 668.3 1 552.6 7
Revenue, EUR millions 1-12/2007 1-12/2006 Change
per cent
Department Store Division 1 025.0 941.3 9
Lindex 54.7
Hobby Hall 171.7 165.9 4
Seppälä 145.1 130.8 11
Shared 1.7 1.7 4
Continuing operations, total 1 398.2 1 239.6 13
Discontinued operations 61.1
Group 1 398.2 1 300.7 7
Operating profit, EUR 1-12/2007 1-12/2006 Change
millions per cent
Department Store Division 91.8 79.5 16
Lindex 15.0
Hobby Hall 5.7 7.1 -19
Seppälä 20.7 21.1 -2
Shared -7.5 -8.0 -7
Eliminations -0.7 0.2
Continuing operations, total 125.2 99.9 25
Discontinued operations 29.6
Group 125.2 129.5 -3
Investments,
gross, EUR millions 31.12.07 31.12.06 Change
per cent
Department Store Division 111.5 115.3 -3
Lindex 853.1
Hobby Hall 3.5 3.2 7
Seppälä 9.3 6.1 52
Shared 0.9 -100
Continuing operations, total 977.4 125.5 679
Discontinued operations
Group 977.4 125.5 679
Assets, EUR millions 31.12.07 31.12/06 Change
per cent
Department Store Division 652.4 557.9 17
Lindex 992.9
Hobby Hall 102.7 104.0 -1
Seppälä 44.7 38.0 18
Shared 30.9 67.7 -54
Continuing operations, total 1 823.7 767.6 138
Discontinued operations
Group 1 823.7 767.6 138
Non-interest-bearing 31.12.07 31.12.06 Change
liabilities, EUR millions per cent
Department Store Division 125.9 122.0 3
Lindex 100.8
Hobby Hall 14.5 13.9 5
Seppälä 11.5 10.9 5
Shared 71.7 25.8 178
Continuing operations, total 324.3 172.6 88
Discontinued operations
Group 324.3 172.6 88
Market areas 1-12/2007
Continuing Discontinued Total
Sales, EUR millions operations operations
Finland 1) 1 171.5 1 171.5
Sweden and Norway 2) 59.5 59.5
Baltic states and Czech Republic 3) 194.1 194.1
Russia 4) 243.2 243.2
Group 1 668.3 1 668.3
Finland, per cent 70.2 70.2
International operations, per cent 29.8 29.8
Continuing Discontinued Total
Revenue, EUR millions operations operations
Finland 1) 977.6 977.6
Sweden and Norway 2) 47.5 47.5
Baltic states and Czech Republic 3) 165.0 165.0
Russia 4) 208.0 208.0
Group 1 398.2 1 398.2
Finland, per cent 69.9 69.9
International operations, per cent 30.1 30.1 Continuing Discontinued Total
Operating profit, EUR millions operations operations
Finland 1) 96.8 96.8
Sweden and Norway 2) 13.9 13.9
Baltic states and Czech Republic 3) 21.1 21.1
Russia 4) -6.6 -6.6
Group 125.2 125.2
Finland, per cent 77.3 77.3
International operations, per cent 22.7 22.7
Investments, 31.12.2007
gross, EUR millions Continuing Discontinued Total
operations operations
Finland 1) 80.2 80.2
Sweden and Norway 2) 847.0 847.0
Baltic states and Czech Republic 3) 5.1 5.1
Russia 4) 45.0 45.0
Group 977.4 977.4
Finland, per cent 8.2 8.2
International operations, per cent 91.8 91.8
Continuing Discontinued Total
Assets, EUR millions operations operations
Finland 1) 585.2 585.2
Sweden and Norway 2) 975.7 975.7
Baltic states and Czech Republic 3) 75.8 75.8
Russia 4) 187.0 187.0
Group 1 823.7 1 823.7
Finland, per cent 32.1 32.1
International operations, per cent 67.9 67.9
1) Department Store Division, Lindex,
Hobby Hall and Seppälä
2) Department Store Division, Lindex,
Hobby Hall and Seppälä
3) Department Store Division, Hobby
Hall and Seppälä
Market areas 1-12/2006
Continuing Discontinued Total
Sales, EUR millions operations operations
Finland 1) 1 123.7 74.8 1 198.6
Sweden and Norway 2)
Baltic states and Czech Republic 3) 165.3 165.3
Russia 4) 188.8 188.8
Group 1 477.8 74.8 1 552.6
Finland, per cent 76.0 100.0 77.2
International operations, per cent 24.0 22.8
Continuing Discontinued Total
Revenue, EUR millions operations operations
Finland 1) 937.5 61.1 998.5
Sweden and Norway 2)
Baltic states and Czech Republic 3) 140.6 140.6
Russia 4) 161.6 161.6
Group 1 239.6 61.1 1 300.7
Finland, per cent 75.6 100.0 76.8
International operations, per cent 24.4 23.2
Continuing Discontinued Total
Operating profit, EUR millions operations operations
Finland 1) 75.2 7.7 82.9
Sweden and Norway 2)
Baltic states and Czech Republic 3) 21.0 21.0
Russia 4) 3.8 21.9 25.6
Group 99.9 29.6 129.5
Finland, per cent 75.2 26.0 64.0
International operations, per cent 24.8 74.0 36.0
Investments, 31.12.2006
gross, EUR millions Continuing Discontinued Total
operations operations
Finland 1) 64.0 64.0
Sweden and Norway 2)
Baltic states and Czech Republic 3) 1.8 1.8
Russia 4) 59.7 59.7
Group 125.5 125.5
Finland, per cent 51.0 51.0
International operations, per cent 49.0 49.0
Continuing Discontinued Total
Assets, EUR millions operations operations
Finland 1) 594.8 594.8
Sweden and Norway 2)
Baltic states and Czech Republic 3) 69.7 69.7
Russia 4) 103.1 103.1
Group 767.6 767.6
Finland, per cent 77.5 77.5
International operations, per cent 22.5 22.5
1) Department Store Division, Lindex,
Hobby Hall and Seppälä
2) Department Store Division, Lindex,
Hobby Hall and Seppälä
3) Department Store Division, Hobby
Hall and Seppälä
Statement of changes Share
in equity premium Other
Group, EUR millions Equity* fund funds
Equity December 31, 2005 109.0 166.5 44.1
Options exercised 2.7 16.7
Share bonus 0.2
Transfer to other funds 0.0
Dividends
Translation differences
Profit for the period
Equity December 31, 2006 111.7 183.4 44.1
Options exercised 0.5 2.6
Share bonus
Transfer to other funds 0.0
Cash flow hedges
Cost of share issue
Dividends
Translation differences
Profit for the period
Equity December 31, 2007 112.2 186.0 44.1
* including share issue
Statement of changes Trans-
in equity Fair value lation Retained
Group, EUR millions reserve** reserve earnings
Equity December 31, 2005 0.0 185.7
Options exercised
Share bonus 0.2
Transfer to other funds 1.3
Dividends -59.5
Translation differences 0.0 0.0
Profit for the period 104.7
Equity December 31, 2006 0.0 232.3
Options exercised
Share bonus 0.4
Transfer to other funds
Cahs flow hedges 0.5
Cost of share issue 1.9
Dividends -72.1
Translation differences 0.0 0.0
Profit for the period 88.4
Equity December 31, 2007 0.5 0.0 250.9
** excluding deferred tax liability
Statement of changes
in equity Minority
Group, EUR millions Total interest Total
Equity December 31, 2005 505.3 0.0 505.3
Options exercised 19.5 19.5
Share bonus 0.4 0.4
Transfer to other funds 1.3 1.3
Dividends -59.5 -59.5
Translation differences 0.0 0.0
Profit for the period 104.7 0.0 104.7
Equity December 31, 2006 571.6 0.0 571.6
Options exercised 3.1 3.1
Share bonus 0.4 0.4
Transfer to other funds 0.0 0.0
Cash flow hedges 0.5 0.5
Cost of share issue 1.9 1.9
Dividends -72.1 -72.1
Translation differences 0.0 0.0
Profit for the period 88.4 0.0 88.4
Equity December 31, 2007 593.8 0.0 593.8
Contingent liabilities, 31.12.07 31.12.06
Group EUR millions
Mortgages on land and 1.7 1.7
buildings
Guarantees 1.5
Pledges 0.1 0.1
Total 1.8 3.2
Lease agreements on business
premises, EUR millions
Minimum rents payable on the
basis of binding lease
agreements on business
premises
Within one year 124.6 69.6
After one year 449.3 351.5
Total 573.8 421.1
Lease payments
Within one year 1.4 1.1
After one year 1.3 0.9
Total 2.8 2.0
Derivative instruments
Nominal value
Interest rate derivatives 7.4
Exchange rates
Country Currency 31.12.07 31.12.06
Russia RUB 35.9860 34.6800
Estonia EEK 15.6466 15.6466
Latvia LVL 0.6964 0.6972
Lithuania LTL 3.4528 3.4528
Sweden SEK 9.4415 9.0404
Income statement
quarterly, Q4 Q3 Q2 Q1
Group, EUR millions 2007 2007 2007 2007
Continuing operations
Revenue 483.9 308.6 294.2 311.4
Other operating income 0.0 9.7
Materials and consumables -255.8 -179.8 -164.0 -191.6
Wages, salaries and -73.2 -47.6 -52.6 -50.8
employee benefits expenses
Depreciation -10.5 -8.9 -8.4 -9.1
Other operating expenses -73.7 -50.0 -55.1 -51.7
Operating profit 70.8 32.1 14.1 8.2
Finance income and expenses -4.3 -0.5 -0.8 -0.2
Profit before tax 66.5 31.6 13.3 8.0
Income taxes -17.9 -8.1 -3.2 -1.9
Profit for the period, 48.6 23.5 10.2 6.1
continuing operations
Discontinued operations
Profit for the period,
discontinued operations
Profit for the period 48.6 23.5 10.2 6.1
Earnings per share,
continuing operations, EUR
Basic 0.87 0.43 0.18 0.11
Diluted 0.87 0.42 0.18 0.11
Earnings per share,
discontinued operations,
EUR
Basic
Diluted
Earnings per share, total,
EUR
Basic 0.87 0.43 0.18 0.11
Diluted 0.87 0.42 0.18 0.11
Q4 Q3 Q2 Q1
Sales, EUR millions 2007 2007 2007 2007
Department Store Division 400.4 275.5 261.0 281.2
Lindex 68.1
Hobby Hall 58.9 45.9 46.0 55.6
Seppälä 51.2 45.4 43.5 34.6
Shared 0.2 0.2 0.2 0.2
Continuing operations, 578.8 367.0 350.7 371.7
total
Discontinued operations
Group 578.8 367.0 350.7 371.7
Revenue, EUR millions
Department Store Division 336.9 232.2 219.6 236.3
Lindex 54.7
Hobby Hall 49.2 38.2 38.1 46.2
Seppälä 42.5 37.8 36.1 28.7
Shared 0.7 0.5 0.4 0.1
Continuing operations, 483.9 308.6 294.2 311.4
total
Discontinued operations
Group 483.9 308.6 294.2 311.4
Operating profit, EUR
millions
Department Store Division 46.9 25.7 11.5 7.8
Lindex 15.0
Hobby Hall 2.7 2.5 -0.9 1.5
Seppälä 8.6 5.5 5.8 0.8
Shared -2.4 -1.1 -2.1 -1.8
Eliminations 0.0 -0.5 -0.1 0.0
Continuing operations, 70.8 32.1 14.1 8.2
total
Discontinued operations
Group 70.8 32.1 14.1 8.2
Income statement
quarterly, Q4 Q3 Q2 Q1
Group, EUR millions 2006 2006 2006 2006
Continuing operations
Revenue 389.6 281.1 299.5 269.4
Other operating income 0.4 0.0 4.7
Materials and consumables -215.6 -166.1 -170.8 -168.7
Wages, salaries and -57.9 -44.2 -48.9 -48.3
employee benefits expenses
Depreciation -7.9 -7.9 -8.1 -8.0
Other operating expenses -58.1 -43.0 -47.7 -43.7
Operating profit 50.5 19.8 28.7 0.8
Finance income and expenses -0.5 0.5 -0.9 0.2
Profit before tax 50.1 20.4 27.9 1.1
Income taxes -12.3 -5.0 -6.6 -0.3
Profit for the period, 37.8 15.4 21.2 0.8
continuing operations
Discontinued operations
Profit for the period, 21.9 7.6
discontinued operations
Profit for the period 37.8 15.4 43.1 8.4
Earnings per share,
continuing operations, EUR
Basic 0.70 0.29 0.39 0.01
Diluted 0.69 0.28 0.39 0.01
Earnings per share,
discontinued operations,
EUR
Basic -0.01 0.41 0.14
Diluted -0.01 0.40 0.14
Earnings per share, total,
EUR
Basic 0.70 0.28 0.15
Diluted 0.68 0.28 0.79 0.15
Q4 Q3 Q2 Q1
Sales, EUR millions 2006 2006 2006 2006
Department Store Division 363.4 249.0 270.8 235.8
Lindex
Hobby Hall 55.5 45.5 46.2 52.6
Seppälä 45.3 40.2 40.2 32.4
Shared 0.2 0.2 0.3 0.2
Continuing operations, 464.4 334.9 357.6 320.9
total
Discontinued operations 74.8
Group 464.4 334.9 357.6 395.7
Revenue, EUR millions
Lindex 305.5 209.8 227.4 198.5
Department Store Division
Hobby Hall 46.1 37.8 38.4 43.6
Seppälä 37.5 33.2 33.3 26.8
Shared 0.5 0.2 0.4 0.5
Continuing operations, 389.6 281.1 299.5 269.4
total
Discontinued operations 61.1
Group 389.6 281.1 299.5 330.5
Operating profit, EUR
millions
Department Store Division 44.3 13.1 22.2 -0.1
Lindex
Hobby Hall 3.4 2.1 0.6 1.0
Seppälä 7.3 5.4 7.6 0.8
Shared -3.8 -0.9 -1.9 -1.4
Eliminations -0.6 0.1 0.2 0.6
Continuing operations, 50.6 19.8 28.7 0.8
total
Discontinued operations 21.9 7.7
Group 50.6 19.8 50.6 8.5
ASSETS
EUR mill. 2007 2006
Acquisition cost Jan. 1 551.7 500.4
Aquisitions through 154.7
business combinations
(investment) (+)
Translation difference +/- -0.2 0.0
Increases Jan. 1-Dec. 31 125.9 124.3
Decreases Jan. 1-Dec. 31 -18.4 -72.9
Acquisition cost Dec. 31 813.8 551.7
Accumulated depreciation 193.2 190.2
Jan. 1
Depreciation on reductions -17.6 -29.1
Depreciation for the 36.9 32.1
financial year
Accumulated depreciation 218.5 193.2
Dec. 31
Book value Jan. 1 310.2 358.5
Book value Dec. 31 601.4 310.2
Goodwill
EUR mill. 2007 2006
Acquisition cost Jan. 1 0.5
Aquisitions through 721.7
business combinations
(investment) (+)
Translation difference +/- -1.7 -0.5
Acquisition cost Dec. 31 720.0
Book value Jan 1. 0.5
Book value Dec. 31 720.0
Total 1 321.3 358.5
ACQUIRED OPERATIONS 2007
Carrying Fair values Carrying
Acquired companies amounts recorded amounts
before in after
business business business
EUR mill. combination combination combination
Intangible assets
Trademarks 18.4 78.2 96.6
Leasehold interest 0.0 0.0
Customer agreements 2.4 2.4
Supplier agreements 4.3 4.3
EDP software 10.3 10.3
Goodwill 7.6 -7.6 0.0
Property, plant and equipment 41.1 41.1
Other fiancial assets 2.6 2.6
Tax assets 3.0 3.0
Inventories 72.6 4.2 76.8
Trade and other receivables 14.6 14.6
Nettovarat
Cash and cash equivalents 9.0 9.0
Assets, total 179.2 81.5 260.8
Deferred taxes 1.7 25.0 26.7
Pension liabilities (defined 3.4 3.4
benefit)
Other provisions 2.5 2.5
Current account with overdraft 29.0 29.0
facility
Other liabilities 69.9 69.9
Liabilities, total 106.5 25.0 131.5
Net assets 72.7 56.6 129.3
Acquisition cost 850.9
Goodwill 721.7 721.7
Purchase price paid in cash 832.5
Unpaid part of purchase price 18.4
Cash assets of subsidiary acquired 20.0
+Current account with overdraft
facility
Cash flow effect 852.5
STOCKMANN plc
Hannu Penttilä
CEO
DISTRIBUTION
OMX Nordic Exchange Helsinki
Principal media
A press and analyst conference will be held today, February 7, 2008, at
14.00 at the World Trade Center, Aleksanterinkatu 17, Helsinki.
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