2009-10-23 07:32:41 CEST
2009-10-23 07:33:25 CEST
REGULATED INFORMATION
Stockmann - Interim report (Q1 and Q3)
CORRECTION: STOCKMANN plc INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2009
Date for key figures corrected.
STOCKMANN plc
Interim report
23.10.2009 at 8.00
STOCKMANN plc INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2009
PICK-UP IN STOCKMANN GROUP'S SALES NOT YET EVIDENT IN THIRD QUARTER, BUT
BETTER RESULTS ANTICIPATED FOR FOURTH QUARTER
The Stockmann Group's third-quarter sales showed a year-on-year drop of
11.5 per cent, falling to EUR 470.5 million (EUR 531.5 million). Third-
quarter operating profit was EUR 17.7 million (EUR 34.6 million) and
profit before taxes was EUR 8.9 million (EUR 21.8 million). The third-
quarter 2008 result was enhanced by the cancellation of a EUR 3.3 million
provision for the closing of the Smolenskaya department store. January-
September sales declined by 12.3 per cent to EUR 1 415.0 million (EUR 1
613.0 million). The drop in sales was a result of the general state of the
economy, the considerable weakening of several currencies, the high
figures for 2008 used for comparison, which also included sales from the
Smolenskaya department store that ceased operating in May 2008, and the
discontinuation of Hobby Hall's Baltic operations in stages up to the end
of August. The Group's operating profit for January-September declined to
EUR 24.3 million (EUR 63.5 million). The previous year's operating profit
included non-recurring capital gains of EUR 4.0 million, expenses of EUR
5.8 million arising from the closure of the Smolenskaya department store
and a EUR 4.9 million provision. Net financial expenses fell as expected,
to a total of EUR 18.8 million (EUR 37.4 million). The decrease in
deferred tax liability booked for the unrealized exchange rate loss on the
currency loan improved the result for the review period. The Group's
result for January-September was EUR 15.1 million (EUR 19.2 million).
Earnings per share were EUR 0.24 (EUR 0.33). In the third quarter,
Stockmann arranged a directed share issue and a rights offering, with
which it raised a total of EUR 140.9 million in capital.
Key figures
7-9/2009 7-9/2008 Index
Sales EUR mill. 470.5 531.5 89
Revenue EUR mill. 389.3 440.7 88
Operating profit EUR mill. 17,7 34.6 51
Profit before taxes EUR mill. 8.9 21.8 17
Profit EUR mill. 16.9 15.6 108
Earnings per share EUR 0.27 0.27 100
1-9/2009 1-9/2008 Index 2008
Sales EUR mill. 1 415.0 1 613.0 88 2 265.8
Revenue EUR mill. 1 172.2 1 337.4 88 1 878.7
Operating profit EUR mill. 24,3 63.5 38 121.9
Profit before taxes EUR mill. 5.5 26.1 21 71.7
Profit EUR mill. 15.1 19.2 79 39,1
Earnings per share EUR 0.24 0.33 73 0.67
Equity per share EUR 11.36 11.02 103 11.24
Cash flow from operating EUR mill. -8.1 38.1 170.1
activities
Key ratios
Net gearing per cent 94.0 130.7 107.4
Equity ratio per cent 43.4 36.2 39.0
Number of shares, thousands 63 005 57 693 58 609
weighted average,
diluted
Return on capital per cent 5.2 12.2 8.3
employed, rolling 12
months
SALES AND RESULT
The Stockmann Group's January-September sales were down by 12.3 per cent,
to EUR 1 415.0 million (EUR 1 613.0 million). The drop in sales was a
result of the general state of the economy, the considerable weakening of
the Swedish krona, the Norwegian krone and the Russian rouble, the high
figures for 2008 used for comparison, which also included sales from the
Smolenskaya department store that ceased operating in May 2008, and the
discontinuation of Hobby Hall's Baltic operations in stages up to the end
of August.
January-September sales in Finland were down by 9.6 per cent to EUR 770.7
million. The Group's sales abroad totalled EUR 644.3 million, a decline of
15.3 per cent. Without the changes in currency exchange rates the Group's
sales abroad would have decreased by 5 per cent. Sales abroad accounted
for 45.5 per cent (47.2 per cent) of the Group's sales.
Gains on the sale of shares generated EUR 0.3 million (EUR 4.0 million) in
other operating income during January-September.
The Group's gross operating margin decreased by EUR 85.3 million, to EUR
553.9 million. The relative gross margin was 47.3 per cent (47.8 per
cent). Lindex's relative gross margin improved, whereas that of the
Department Store Division, Hobby Hall and Seppälä decreased. The stock
level of all divisions was below that of a year earlier, and the Group's
stock level fell by EUR 21.3 million, to EUR 260.2 million. Operating
costs decreased by EUR 46.0 million and depreciation by EUR 3.9 million.
The company has already succeeded in meeting its original cost-savings
target of EUR 28 million for the whole year. Efficiency measures aimed at
achieving cost-savings will be continued.
Consolidated operating profit for the first nine months of 2009 amounted
to EUR 24.3 million, a year-on-year decline of EUR 39.2 million.
Net financial expenses decreased by EUR 18.6 million, to EUR 18.8 million
(EUR 37.4 million). This figure includes the reversal of EUR 2.8 million
in interest expenses capitalized during construction of the
Mannerheimintie car park.
Profit before taxes for the period was EUR 5.5 million, or EUR 20.6
million less than a year earlier. Taxes for the period, a total of EUR 9.7
million, included a decrease in deferred tax liability of EUR 10.8 million
booked for the unrealized exchange rate loss on the currency loan, and a
tax accrual of EUR 1.1 million. Boosted by the decrease in deferred tax
liability, the taxes figure improved the result for the period. The taxes
burdening the result for the same period a year earlier totalled EUR 6.9
million.
Third-quarter profit was up, amounting to EUR 16.9 million (EUR 15.6
million).
In August and September, the company arranged share issues, as a
consequence of which the number of shares increased by 9 390 617, or 15.2
per cent, and the equity by EUR 137 999 253.64, or 20.6 per cent. Earnings
per share for January-September amounted to EUR 0.24 (EUR 0.33) and,
diluted for options, EUR 0.24 (EUR 0.33). Equity per share was EUR 11.36
(EUR 11.02).
SALES AND EARNINGS TREND BY BUSINESS SEGMENT
Department Store Division
The Department Store Division's sales were down 15.3 per cent to EUR 717.2
million. Sales in Finland fell by 11.5 per cent. International sales
decreased by 24.5 per cent and accounted for 26.4 per cent (29.6 per cent)
of the division's sales. In addition to the general state of the economy,
the decline in the Department Store Division's sales was a result of the
considerable weakening of the Russian rouble, the very high figures for
2008 used for comparison, which included sales from the Smolenskaya
department store that ceased operating in May 2008, and the strong sales
growth in the Baltic department stores during 2008. The rouble-denominated
same-store sales by the department stores in Russia were on a par with the
previous year's figures. The relative gross margin for January-September
2009 declined as a result of price reduction campaigns. The stock level of
the Department Store Division decreased as planned, and was lower than the
previous year's level. The Department Store Division's operating result
was down by EUR 26.2 million, to EUR -7.2 million (EUR 19.0 million).
Third-quarter sales were down by 14.8 per cent to EUR 225.7 million. The
operating result was EUR -1.9 million, compared with EUR 13.5 million in
the same period a year earlier. The third-quarter 2008 result was improved
by the cancellation of a EUR 3.3 million provision for the closing of the
Smolenskaya department store, part of which also improved the previous
year's gross margin.
Lindex
Lindex's sales for January-September were up by 3 per cent in local
currencies, but due to the weakening of the Swedish krona and Norwegian
krone, the euro-denominated sales were down by 7.1 per cent to EUR 461.9
million (EUR 496.9 million). Sales in Finland grew by 2.6 per cent, but in
other countries sales declined by 8.3 per cent. The relative gross margin
improved. Lindex's stock level decreased as planned and was lower than in
the previous year. Lindex's operating profit for January-September was EUR
38.0 million (EUR 38.4 million). The weakening of the Swedish krona
against the euro reduced the January-September operating profit by an
imputed EUR 5.6 million. Lindex has been able to increase its market share
in all of its main markets.
Third-quarter sales were up by 5 per cent in local currencies, but due to
the weakening of the Swedish krona and Norwegian krone, the euro-
denominated sales were down by 2.9 per cent to EUR 169.7 million.
Operating profit increased, amounting to EUR 18.1 million, compared with
EUR 15.7 million in the same period a year earlier. The weakening of the
Swedish krona against the euro reduced third-quarter operating profit by
an imputed EUR 2.6 million. Lindex's operating profit in the third
quarter, when calculated in local currencies, was the highest in its
history.
Seppälä
Seppälä's sales in January-September were down by 7.2 per cent from the
same period in the previous year, totalling EUR 121.7 million (EUR 131.1
million). Sales in Finland fell by 4.8 per cent. Sales abroad were down by
11.6 per cent and accounted for 32.5 per cent (34.2 per cent) of Seppälä's
total sales. Rouble-denominated sales in Russia grew by 18 per cent. Sales
in the Baltic countries declined considerably despite price reduction
campaigns, and these campaigns weakened Seppälä's relative gross margin.
Fixed costs and depreciation increased due to the company's expansion.
Seppälä's stock level decreased as planned and was lower than in the
previous year. Seppälä's operating profit decreased by EUR 7.3 million, to
EUR 3.1 million (EUR 10.4 million).
In the third quarter, Seppälä's sales were down by 12.0 per cent to EUR
44.1 million. Operating profit amounted to EUR 2.9 million (EUR 5.9
million).
Hobby Hall
Hobby Hall's sales in January-September decreased by 16.9 per cent to EUR
114.1 million (EUR 137.3 million). Sales in Finland fell by 8.8 per cent,
and sales abroad declined by 53.2 per cent during the review period. Hobby
Hall discontinued its unprofitable operations in the Baltic countries in
stages up to the end of August. Hobby Hall also saw its relative gross
margin decline. Hobby Hall's stock level decreased as planned and was
clearly lower than the previous year's level. Hobby Hall's operating
result fell to EUR -3.5 million (EUR -0.8 million), mainly due to the
discontinuation of operations in the Baltic countries. Full-year operating
profit from operations in Finland are expected to be in the black.
In the third quarter, Hobby Hall's sales were down 25.6 per cent to EUR
30.9 million. The operating result amounted to EUR -0.9 million, compared
with an operating profit of EUR 0.7 million in the same period a year
earlier.
FINANCING AND CAPITAL EMPLOYED
Liquid assets totalled EUR 22.7 million at the end of September, as
against EUR 23.0 million a year earlier and EUR 35.2 million at the close
of 2008.
The programme to release capital announced earlier has been implemented by
means of sale and leaseback arrangements and divestment of non-strategic
assets, which has resulted in a decrease of EUR 84.4 million in non-
current assets. This includes the sale in September of the shares of the
newly opened Mannerheimintie car park in Helsinki, using a sale and
leaseback arrangement.
In the third quarter, Stockmann arranged a directed share issue and a
rights offering, with which it raised a total of EUR 140.9 million in
capital. The arrangement and underwriting fees for the issues came to a
total of EUR 4.0 million.
Funds raised through the issues were used for the advance repayment of
long-term debt. Interest-bearing liabilities were down EUR 125.2 million
on the figure at the end of September 2008 and, at the end of September
2009, stood at EUR 781.9 million (EUR 907.1 million), of which EUR 780.9
million (EUR 113.4 million) was long-term debt. Capital expenditure in
January-September amounted to EUR 105.0 million. Dividend payouts totalled
EUR 38.0 million. Net working capital amounted to EUR 200.3 million at the
end of September, as against EUR 216.0 million a year earlier and EUR
150.9 million at the close of 2008. At the close of 2008, interest-bearing
liabilities amounted to EUR 775.7 million, of which EUR 755.7 million was
long-term debt.
The equity ratio increased due to the issues and, at the end of September,
was 43.4 per cent (36.2 per cent). At the close of 2008, the equity ratio
was 39.0 per cent. Net gearing at the end of September was 94.0 per cent
(130.7 per cent). At the end of 2008, net gearing was 107.4 per cent.
The return on capital employed over the past 12 months was 5.2 per cent
(8.3 per cent at the close of 2008). Consolidated capital employed was up
by EUR 124.7 million from September of the previous year, amounting to a
total of EUR 1 591.3 million at the end of September 2009 (EUR 1 466.8
million at the close of 2008).
CAPITAL EXPENDITURE
Capital expenditure during January-September totalled EUR 105.0 million
(EUR 126.0 million). Net capital expenditure after the ongoing
implementation of the programme to release capital was EUR 20.6 million.
Department Store Division
On 13 February 2009, Stockmann opened a new department store in leased
premises in the Metropolis shopping centre near Moscow city centre. The
department store has a total area of about 8 000 square metres.
Stockmann's capital expenditure on the new location was approximately EUR
14.2 million, of which EUR 2.8 million was booked for 2009. The department
store's operations have started well.
A major enlargement and transformation project is under way at the
department store in the centre of Helsinki. 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 to this, the project has involved construction
of new goods handling and servicing facilities and a car park. The new car
park was opened in May and sold in September as a part of the programme to
release capital by means of a sale and leaseback arrangement. After the
enlargement, the Helsinki department store will have a total of about 50
000 square metres of retail space. With the sale of the car park, the
capital expenditure for the enlargement of the department store is
estimated to be about EUR 200 million, in addition to which significant
repair and renovation work has been and will be carried out in the old
property in the course of the project. The new and the renovated premises
are being opened in stages. The project is expected to be completed in
phases up to the end of 2010. During the first nine months of 2009, the
project required an investment of about EUR 32.4 million.
In 2006, Stockmann purchased a commercial plot of approximately 10 000
square metres on Nevsky Prospect, St Petersburg's high street. The plot is
located next to the Vosstaniya Square metro station and in the immediate
vicinity of the Moscow railway station. Stockmann's Nevsky Centre shopping
centre is being built on this plot and will have about 100 000 square
metres of gross floor space, of which about 50 000 square metres will be
for stores and offices. A Stockmann department store with about 20 000
square metres of retail space will be housed in the shopping centre, along
with other retail stores, office premises and an underground car park. The
total investment is estimated at about EUR 185 million. The construction
work for the project is under way and proceeding according to timetable.
The building is expected to be completed during the summer of 2010 and
commercial operations to start during the final quarter of 2010. The
leasing of premises to external operators is proceeding as planned. During
the first nine months of 2009, the project required an investment of about
EUR 32.3 million.
One Stockmann Beauty store was opened, and one was closed, in Finland
during January-September. In Russia, two Bestseller stores were closed.
An Outlet store was opened at the Rocca al Mare shopping centre in
Tallinn, while the Outlet store in Riga was closed.
The Department Store Division's capital expenditure totalled EUR 82.8
million.
Lindex
Lindex opened 18 stores during January-September, five of them in Sweden,
three each in Finland, Russia and Lithuania, and one each in Norway,
Latvia, the Czech Republic and Slovakia, the latter being a new market for
both Lindex and the entire Stockmann Group. One store was closed in
Finland and one closed in Latvia during the same period. Two stores have
been opened in Sweden since the end of September.
The company's franchising partner opened six new Lindex stores in Saudi
Arabia.
Lindex's capital expenditure totalled EUR 15.7 million.
Seppälä
Seppälä opened nine stores during January-September, two in each of
Finland, Russia, Latvia and Lithuania, and one in Ukraine. Two stores in
Finland and one in Russia were closed during the same period.
Seppälä's capital expenditure totalled EUR 3.3 million.
Hobby Hall
Hobby Hall's redesigned online store was opened in July.
Hobby Hall's capital expenditure totalled EUR 3.0 million.
Hobby Hall discontinued its unprofitable operations in the Baltic
countries in stages up to the end of August. The discontinuation of the
Baltic operations is part of the ongoing measures to revitalize Hobby
Hall's financial situation.
Other capital expenditure
The Group's other capital expenditure came to EUR 0.2 million.
NEW PROJECTS
Department Store Division
The fifth department store in Moscow will be opened in March 2010 in the
Rostokino shopping centre being built in north Moscow. Stockmann's capital
expenditure on the department store, which will have a total retail space
of about 10 000 square metres, will amount to approximately EUR 16
million.
The preliminary agreement concerning the Ekaterinburg department store has
been modified so that, initially, chain stores of the Stockmann Group will
be opened in the leased premises, with the objective of opening a full-
scale department store there in 2011. The preliminary agreement for
opening a department store in Vilnius, the Lithuanian capital, has been
cancelled.
Lindex
Lindex is continuing its expansion, expecting to open five new stores
towards the end of 2009. In addition, the number of franchising stores in
the Middle East is expected to increase by three.
Modernization of the Finnish stores, started in 2009, will continue.
Seppälä
Seppälä plans to open four new stores towards the end of 2009.
Hobby Hall
Hobby Hall will close its Hämeentie store in Helsinki by the end of the
year. Integration with the Department Store Division is proceeding
according to plan, with Hobby Hall becoming an integral part of the
Department Store Division as from the start of 2010.
SHARES AND SHARE CAPITAL
The company's market capitalization at the end of September was EUR 1
304.6 million (EUR 1 063.2 million). At the end of 2008 the corresponding
figure was EUR 611.6 million.
During January-September, Stockmann shares outperformed both the OMX
Helsinki index and the OMX Helsinki Cap index. At the end of September,
the price of the Series A shares was EUR 18.80, compared with EUR 10.10 at
the end of 2008, and the Series B shares were selling at EUR 18.01, as
against EUR 9.77 at the end of 2008.
In 2007, the Annual General Meeting authorized the Board of Directors to
decide on the transfer, in one or more lots, of the Series B shares held
by the company; the authorization is valid for a period of five years. On
3 June 2009, Stockmann sold the 336 528 Series B shares in its possession
in public trading arranged by NASDAQ OMX Helsinki Ltd to investors
procured by a securities broker as part of the aforementioned programme to
release capital. Following this transaction, the company no longer holds
any Stockmann shares. Stockmann's Board of Directors has no valid
authorization to purchase Stockmann shares.
The 2008 Annual General Meeting authorized the Board of Directors to
decide on the issuance of shares and of special rights entitling holders
to shares under chapter 10, section 1 of the Limited Liability Companies
Act, in one or more lots. The Board of Directors was authorized to decide
on the amount of Series A and Series B shares to be issued. However, the
aggregate number of shares issued on the basis of the authorization may
not exceed 15 000 000 shares. The issuance of shares and the special
rights entitling holders to shares may be carried out in accordance with
or deviating from the shareholders' pre-emptive rights (directed issue).
Under the authorization, the Board of Directors is entitled to decide on
all the terms and conditions regarding the issue of shares and concerning
the special rights referred to in chapter 10, section 1 of the Limited
Liability Companies Act. The authorization is valid for up to three years.
Based on the authorization granted by the Annual General Meeting in 2008,
Stockmann's Board of Directors arranged, on 14 August 2009, a directed
issue to HTT Holding Oy Ab, a company owned by the Hartwall family,
whereby a total of 2 433 537 new Series A shares and 3 215 293 new Series
B shares were issued. With this issue, the company raised EUR 96.0 million
in new capital. The new shares were registered with the Finnish Trade
Register on 18 August 2009, and became subject to public trading on NASDAQ
OMX Helsinki Ltd as from 19 August 2009.
Based on the authorization granted by the Annual General Meeting in 2008,
the company's Board of Directors also decided on 14 August 2009 to carry
out a rights offering between 31 August and 18 September 2009, whereby 1
611 977 new Series A shares and 2 129 810 new Series B shares, or a total
of 3 741 787 shares, were subscribed pursuant to the subscription rights.
With this issue, the company raised EUR 42.0 million in new capital after
deduction of expenses. The new shares were registered with the Finnish
Trade Register on 28 September 2009 and became subject to public trading
alongside the old shares on NASDAQ OMX Helsinki Ltd as from 29 September
2009.
Following the above-mentioned registrations, Stockmann's share capital
increased to EUR 142 187 906. On 30 September 2009, the number of
Stockmann Series A shares totalled 30 627 563 and Series B shares 40 466
390. After the completion of the above-mentioned share issues, the Board
authorization to issue shares has been fully utilized.
PERSONNEL
The number of personnel employed by the Group's established operations has
decreased throughout the year, compared with the same period a year
earlier. The number of working hours has been adapted to demand and
customer flows. The personnel strength has grown only in Lithuania, the
Czech Republic and Ukraine, thanks to the opening of new Lindex and
Seppälä stores. The Group also gained new employees with the opening of
Lindex's first store in Slovakia.
The average number of Stockmann Group personnel fell by 1 027 to a total
of 14 586. Stockmann plc's average number of employees, calculated as full-
time equivalents, decreased by 841, to 11 002.
The Group's personnel expenses amounted to EUR 236.6 million, compared
with EUR 257.6 million a year earlier. Personnel expenses accounted for a
higher proportion of revenue, at 20.2 per cent (19.3 per cent).
At the end of September 2009, Stockmann had 7 952 employees working
abroad. The corresponding total for the end of September the previous year
was 8 358 employees. The proportion of employees working abroad was 55 per
cent (54 per cent) of the total personnel.
RISK FACTORS
No change has occurred in the risk factors since the publication on 13
February 2009 of the review presented in the Board Report on Operations.
Particular risks in the short term concern the impact of the economic
downturn on consumer shopping habits in Stockmann's market areas.
AB Lindex (publ) has claimed through legal proceedings to be eligible to
deduct in Swedish taxation the losses of approximately EUR 70 million
incurred by Lindex Group's German subsidiary. The Administrative Court of
Appeal in Gothenburg overturned the favourable decisions that AB Lindex
had received in the County Administrative Court, and as a consequence
Lindex was obliged to refund to the tax authorities approximately EUR 23.8
million in taxes and interest. The taxes that were refunded had no effect
on the profit of the Stockmann Group, because Stockmann recorded the
refunded amount of tax and interest as a reduction in Lindex's equity in
the acquisition cost calculation. AB Lindex appealed against the decision
of the Administrative Court of Appeal to the Supreme Administrative Court
of Sweden, which in the summer of 2009 decided not to review the case. The
company's further measures in this case will depend on the result of the
legal process described below concerning the elimination of double
taxation between AB Lindex and Lindex GmbH.
AB Lindex (publ) and its German subsidiary, Lindex GmbH, have requested
the German and Swedish competent authorities to eliminate the double
taxation arising from intra-Group transactions in the fiscal years 1997-
2004 on the basis of the EC Arbitration Convention and the Tax Treaty
between Germany and Sweden. The double taxation resulted from the
presumptive income tax payable by Lindex GmbH, which meant that a total of
EUR 94 million was added to the taxable income of Lindex GmbH. Depending
on the decision of the authorities, AB Lindex may receive a partial or
full refund of the approximately EUR 26 million in taxes paid on the
aforementioned income. The tax effect of the claim has not been recorded
in the income statement.
In 2008, Stockmann initiated legal proceedings against the lessors of the
Smolenskaya department store in the International Commercial Arbitration
Court (ICAC) in Moscow, claiming damages of about USD 75 million due to
the unlawful closure of the department store. In its decision on 14 April
2009, the court of arbitration ruled in favour of Stockmann, though
reducing the amount of damages awarded to about USD 7 million, and ordered
the lessors to reimburse Stockmann for the legal expenses incurred. The
Stockmann Group has not recorded this damages sum in the income statement.
In order for the ruling to be enforced, it has to be confirmed by a
Russian court of general jurisdiction. In July 2009, the lessors filed a
claim with the court of first instance in Moscow, demanding that the court
overturn the decision of the International Commercial Arbitration Court.
OUTLOOK FOR THE REMAINDER OF 2009
The global economic downturn has continued strong. Consumer demand has
weakened in all of Stockmann's market areas, and it remains difficult to
forecast the future trend in consumer demand. However, there have been
positive signs in consumer confidence on the Nordic market. The sales
trend at the start of the fourth quarter has been better than the
declining trend of January-September 2009.
It is clear that the economies in all of Stockmann's market areas will
post negative growth in 2009, especially those of the Baltic countries. In
Russia, the trend in the economy is to a large extent dependent on the
price of energy. The immediate downward pressure on the value of the
rouble has decreased. The value of the Swedish krona is not anticipated to
weaken significantly during the last part of the year, either.
According to current estimates, it is possible that in the fourth quarter
the Group will reach the previous year's sales figures and improve the
operating profit. Sales and operating profit for the full year will be
lower than in 2008.
Stockmann will continue the measures initiated earlier for improving the
efficiency of operations and preparing for a lengthy period of slow
growth. Financial expenses will be distinctly lower than in 2008. The
objective is to achieve a positive cash flow after net capital
expenditure.
ACCOUNTING POLICIES
This Interim Report has been prepared in compliance with IAS 34. The
accounting policies and calculation methods applied are the same as those
in the 2008 financial statements. As from 1 January 2009, the Stockmann
Group has applied the amended IAS 1 Presentation of Financial Statements
standard and the IFRS 8 Operating Segments standard. In this Interim
Report, a Statement of Comprehensive Income according to IAS 1 is
presented. The operating segments presented in the Interim Report, which
accord with IFRS 8, are the same as the business segments presented
earlier and described in the Group's financial statements for 2008. The
figures are unaudited.
Statement of financial position, EUR 30.9.2009 30.9.2008 31.12.2008
mill.
ASSETS
NON-CURRENT ASSETS
Intangible assets 109.7 121.0 112.1
Goodwill 686.8 717.4 646.5
Property, plant, equipment 577.8 550.4 587.5
Non-current revceivables 0.1 1.7 1.6
Available for sale investments 5.0 6.6 6.6
Deferred tax asset 5.2 6.0 4.5
NON-CURRENT ASSETS 1 384.7 1 403.1 1 358.8
CURRENT ASSETS
Inventories 260.2 281.4 220.3
Interest bearing receivables 99.7 51.2 52.2
Non-interest bearing receivables 95.4 108.5 98.4
Cash and cash equivalents 22.7 23.0 35.2
CURRENT ASSETS 478.0 464.1 406.2
ASSETS 1 862.7 1 867.3 1 765.0
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Equity attributable to equity holders of 807.9 676.2 689.1
the parent
Minority interest -0.0 -0.0 -0.0
SHAREHOLDERS' EQUITY 807.9 676.2 689.1
LONG-TERM LIABILITIES
Deferred tax liability 65.3 56.5 78.1
Long-term liabilities, interest-bearing 780.9 113.4 755.7
Provisions 1.5 2.5 2.0
NON-CURRENT LIABILITIES 847.6 172.3 835.7
CURRENT LIABILITIES
Short-term interest-bearing liabilities 1.0 793.7 20.0
Short term interest-free liabilities 206.1 225.1 220.1
CURRENT LIABILITIES 207.2 1,018.8 240.1
TOTAL EQUITY AND LIABILITIES 1 862.7 1 867.3 1 765.0
Key figures 30.9.2009 30.9.2008 31.12.2008
Equity ratio, per cent 43.4 36.2 39.0
Net gearing, per cent 94.0 130.7 107.4
Cash flow from operations per share, EUR -0.13 0.66 2.90
Interest-bearing net debt, EUR mill. 659.6 832.9 688.2
Number of shares in the end of the 71 094 61 703 61 703
period, thousands
Weighted average number of shares, 62 459 57 693 58 609
thousands
Weighted average number of shares, 63 005 57 693 58 609
diluted, thousands
Market capitalization, EUR mill. 1 304.6 1 063.2 611.6
STATEMENT OF CASH FLOWS, IFRS 09/2009 09/2008 12/2008
EUR millions
Cash flows from operating activities
Profit/loss for the period 15.1 19.2 39.1
Adjustments for:
Depreciation, amortisation & impairment 43.3 47.2 61.4
loss
Gains (-) and Losses (+) of disposals of -0.3 -4.0 -3.5
fixed assets and other non-current assets
Interest and other financial expenses 20.0 39.6 51.7
Interest income -1.2 -2.2 -1.6
Tax on income from operations -9.7 6.9 32.7
Other adjustments -0.6 3.3 -1.4
Working capital changes:
Increase (-) / decrease (+) in -35.6 -39.8 24.0
inventories
Increase (-) /decrease(+) in trade and 7.4 72.1 75.6
other receivables
Increase (+) / decrease (-) in short-term -28.0 -22.0 -12.7
interest-free liabilities
Interest and other financial expenses -23.5 -34.1 -47.7
paid
Interest received 1.6 0.6 0.8
Income taxes paid 3.2 -48.6 -48.3
Net cash from operating activities -8.1 38.1 170.1
Cash flows from investing activities
Purchase of tangible and intagible assets -110.1 -127.7 -181.1
Proceeds from sale of tangible and 27.5 5.0 6.1
intangible assets
Acquisition of subsidiaries, net of cash -18.9 -18.9
acquired
Disposal of subsidiaries, net of cash 5.6 0.0 0.0
disposed of
Purchase of investments -0.1
Proceeds from sale of investments 1.8 0.3 0.0
Dividends received 0.2 0.1 0.1
Net cash used in investing activities -75.0 -141.3 -193.7
Cash flows from financing activities
Proceeds from issue of share capital 138.0 135.4 135.2
Proceeds from sale of own shares 5.1
Proceeds from short-term borrowings 0.0 161.2 20.0
Repayment of short-term borrowings -19.3 -50.1 -33.3
Proceeds from long-term borrowings 200.0 49.5 152.2
Repayment of long-term borrowings -216.2 -129.7 -157.3
Dividends paid -38.0 -75.2 -75.2
Net cash used in financing activities 69.6 91.1 41.7
Net increase/decrease in cash and cash -13.5 -12.1 18.1
equivalents
Cash and cash equivalents at beginning of 35.2 33.2 33.2
the period
Cheque account with overdraft facility -0.7 -14.6 -14.6
Cash and cash equivalents at beginning of 34.5 18.6 18.6
the period
Net increase/decrease in cash and cash -13.5 -12.1 18.1
equivalents
Effects of exchange rate fluctuations on 0.7 0.2 -2.2
cash held
Cash and cash equivalents at the end of 22.7 23.0 35.2
the period
Cheque account with overdraft facility -1.0 -16.2 -0.7
Cash and cash equivalents at the end of 21.7 6.8 34.5
the period
Income statement, Group, EUR 1-9/2009 1-9/2008 Change 1-12/2008
millions %
REVENUE 1 172.2 1 337.4 -12 1 878.7
Other operating income 0.3 4.0 -93 4.2
Materials and consumables -618.3 -698.2 -11 -971.7
Wages, salaries and employee -236.6 -257.6 -8 -350.5
benefits expenses
Depreciation and amortisation -43.3 -47.2 -8 -61.4
Other operating expenses -250.0 -275.0 -9 -377.4
OPERATING PROFIT 24.3 63.5 -62 121.9
Finance income and expenses -18.8 -37.4 50 -50.1
PROFIT/LOSS BEFORE TAX 5.5 26.1 -79 71.7
Tax on income from operations 9.7 -6.9 -32.7
PROFIT/LOSS FOR THE PERIOD 15.1 19.2 -21 39.1
note
Other comprehensive income, 1-09/2009 1-09/2008 Change 1-12/2008
EUR mill. %
PROFIT/LOSS FOR THE PERIOD 15.1 19.2 -21 39.1
Other comprehensive income
Exchange differences on 0.6 0.1 -6.8
translating foreign
operations
Cash flow hedges -3.1 1.3 0.9
Other comprehensive income -2.5 1.5 -5.9
for the year net of tax
TOTAL COMPREHENSIVE INCOME 12.6 20.7 33.2
FOR THE YEAR
Total comprehensive income
attributable to:
Equity holders of the parent 12.6 20.7 33.2
Minority interest 0.0 -0.0 -0.0
Key figures 30.9.2009 30.9.2008 Change 31.12.2008
%
EPS undiluted (EUR), adjusted 0.24 0.33 -27 0.67
for share issue
EPS diluted (EUR), adjusted 0.24 0.33 -28 0.67
for share issue
Operating profit, per cent of 2.1 4.7 -56 6.5
turnover
Equity per share, EUR 11.36 11.02 3 11.24
Return on equity, per cent, 4.7 11.1 -58 6.1
moving 12 months
Return on capital employed, 5.2 12.2 -57 8.3
per cent, moving 12 months
Average number of employees, 11 002 11 843 -7 11 964
converted to full-time staff
Investments, EUR millions 105.0 126.0 -17 182.3
Segment
information, Group
EUR millions
Operating segments
Sales 1.1.-30.9.2009 1.1.-30.9.2008 Change 1.1.-31.12.2008
%
Department Store 717.2 847.1 -15 1 218.9
Division
Lindex 461.9 496.9 -7 672.5
Hobby Hall 114.1 137.3 -17 191.0
Seppälä 121.7 131.1 -7 182.6
Unallocated 0.1 0.6 -87 0.8
Group 1 415.0 1 613.0 -12 2 265.8
Revenue 1.1.-30.9.2009 1.1.-30.9.2008 Change 1.1.-31.12.2008
%
Department Store 602.8 713.0 -15 1 025.9
Division
Lindex 371.7 399.2 -7 540.2
Hobby Hall 95.2 114.7 -17 159.6
Seppälä 101.1 109.1 -7 151.9
Unallocated 1.5 1.4 2 1.1
Group 1 172.2 1 337.4 -12 1 878.7
Operating profit 1.1.-30.9.2009 1.1.-30.9.2008 Change 1.1.-31.12.2008
%
Department Store -7.2 19.0 54.0
Division
Lindex 38.0 38.4 58.7
Hobby Hall -3.5 -0.8 0.8
Seppälä 3.1 10.4 14.6
Unallocated -6.1 -2.8 -6.1
Eliminations 0.0 -0.8 0.0
Group 24.3 63.5 -62 121.9
Investments, gross 1.1.-30.9.2009 1.1.-30.9.2008 Change 1.1.-31.12.2008
%
Department Store 82.8 98.2 -16 146.0
Division
Lindex 15.7 20.5 -24 25.2
Hobby Hall 3.0 1.9 59 3.1
Seppälä 3.3 4.8 -30 7.2
Unallocated 0.2 0.7 -71 0.8
Group 105.0 126.0 -17 182.3
Assets 1.1.-30.9.2009 1.1.-30.9.2008 Change 1.1.-31.12.2008
%
Department Store 713.5 682.1 5 704.0
Division
Lindex 875.2 987.4 -11 806.0
Hobby Hall 67.9 96.5 -30 90.4
Seppälä 118.1 49.0 141 116.5
Unallocated 87.9 52.4 68 48.1
Group 1 862.6 1 867.3 0 1 765.0
Information from
market areas
Sales 1.1.-30.9.2009 1.1.-30.9.2008 Change 1.1.-31.12.2008
%
Finland 1) 770.7 852.3 -10 1 224.8
Sweden and Norway 385.1 426.1 -10 575.2
2)
Baltic states and 114.6 152.2 -25 211.7
Czech Republic 1)
Russia 1) 144.7 182.3 -21 254.1
Group 1 415.0 1 613.0 -12 2 265.8
Finland, % 54.5 52.8 0 54.1
International 45.5 47.2 0 45.9
operations, %
Revenue 1.1.-30.9.2009 1.1.-30.9.2008 Change 1.1.-31.12.2008
%
Finland 1) 644.0 711.4 -9 1 021.8
Sweden and Norway 308.5 340.9 -9 460.2
2)
Baltic states and 96.0 129.4 -26 179.8
Czech Republic 1)
Russia 1) 123.7 155.8 -21 217.0
Group 1 172.2 1 337.4 -12 1 878.7
Finland, % 54.9 53.2 0 54.4
International 45.1 46.8 0 45.6
operations, %
Operating profit 1.1.-30.9.2009 1.1.-30.9.2008 Change 1.1.-31.12.2008
%
Finland 1) 17.4 40.3 -57 71.1
Sweden and Norway 37.6 37.4 0 57.3
2)
Baltic states and -5.3 6.7 0 10.7
Czech Republic 1)
Russia 1) -25.4 -21.0 0 -17.3
Group 24.3 63.5 -62 121.9
Finland, % 71.6 63.5 0 58.4
International 28.4 36.5 0 41.6
operations, %
1) Department
store division,
Lindex, Hobby
Hall, Seppälä
2) Lindex
Statement of changes in equity, Group EUR Share Share Hedging
millions 1 - 09 / 2008 capital* premium reserve**
fund
BALANCE AT BEGINNING OF THE PERIOD 112.2 186.0 0.5
Changes in equity for
Dividend distribution
New share issue 11.2
Options exercised
Share premium
Transaction costs for equity
Total comprehensive income for the year 0.0 1.3
Other changes
Deferred taxes' share of period movements
Other changes
SHAREHOLDERS' EQUITY TOTAL 09 / 2008 123.4 186.0 1.8
Statement of changes in equity, Group EUR Share Share Hedging
millions 1 - 09 / 2009 capital* premium reserve**
fund
BALANCE AT BEGINNING OF THE PERIOD 123.4 186.1 1.4
Changes in equity for
Dividend distribution
New share issue 18.8
Options exercised
Share premium
Sale of own shares
Transaction costs for equity
Total comprehensive income for the year 0.0 -3.1
Other changes
Deferred taxes' share of period movements
Other changes
SHAREHOLDERS' EQUITY TOTAL 09 / 2009 142.2 186.1 -1.7
*Including share issue.
** Adjusted with deferred tax liability.
Statement of changes in equity, Group Reserve for Other Trans-
EUR millions 1 - 09 / 2008 invested reserves lation
unrestricted diffe-
equity rences
BALANCE AT BEGINNING OF THE PERIOD 0.0 44.1 0.0
Changes in equity for
Dividend distribution
New share issue
Options exercised
Share premium 126.2
Transaction costs for equity -2.0
Total comprehensive income for the year 0.0 0.1
Other changes
Deferred taxes' share of period
movements
Other changes
SHAREHOLDERS' EQUITY TOTAL 09 / 2008 124.2 44.1 0.1
Statement of changes in equity, Group Reserve for Other Trans-
EUR millions 1 - 09 / 2009 invested reserves lation
unrestricted diffe-
equity rences
BALANCE AT BEGINNING OF THE PERIOD 124.1 44.1 -6.8
Changes in equity for
Dividend distribution
New share issue
Options exercised
Share premium 122.2
Sale of own shares
Transaction costs for equity -2.9
Total comprehensive income for the year 0.0 0.6
Other changes
Deferred taxes' share of period
movements
Other changes
SHAREHOLDERS' EQUITY TOTAL 09 / 2009 243.3 44.1 -6.2
Statement of changes in Retained Total Minority Total
equity, Group EUR millions earnings interest
1 - 09 / 2008
BALANCE AT BEGINNING OF THE 250.9 593.8 0.0 593.8
PERIOD
Changes in equity for
Dividend distribution -75.2 -75.2 -75.2
New share issue 11.2 11.2
Options exercised 1.5 1.5 1.5
Share premium 126.2 126.2
Transaction costs for equity -2.0 -2.0
Total comprehensive income 19.2 20.7 20.7
for the year
Other changes
Deferred taxes' share of
period movements
Other changes 0.0 0.0 0.0
SHAREHOLDERS' EQUITY TOTAL 09 196.5 676.2 0.0 676.2
/ 2008
Statement of changes in Retained Total Minority Total
equity, Group EUR millions 1 earnings interest
- 09 / 2009
BALANCE AT BEGINNING OF THE 216.9 689.1 0.0 689.1
PERIOD
Changes in equity for
Dividend distribution -38.0 -38.0 -38.0
New share issue 18.8 18.8
Options exercised 1.0 1.0 1.0
Share premium 122.2 122.2
Sale of own shares 5.1 5.1 5.1
Transaction costs for equity -2.9 -2.9
Total comprehensive income 15.1 12.6 0.0 12.6
for the year
Other changes Deferred taxes' share of
period movements
Other changes 0.0 0.0 0.0
SHAREHOLDERS' EQUITY TOTAL 09 200.2 807.9 807.9
/ 2009
Contingent liabilites, Group 30.9.2009 30.9.2008 31.12.2008
EUR millions
Mortages on land and 201.7 1.7 1.7
buildings
Pledges 1.0 0.2 1.0
Liabilities of adjustments of 30.8 29.2
VAT deductions made on
investments to immovable
property
Total 233.5 1.9 31.9
Lease agreements on business
premises, EUR millions
Minimum rents payable on the
basis of binding lease
agreements on business
premises
Within one year 145.7 85.5 143.2
After one year 581.4 455.7 478.9
Total 727.0 541.2 622.1
Lease payments, EUR millions
Within one year 7.3 1.3 1.1
After one year 19.7 1.1 0.9
Total 27.0 2.4 2.0
Derivate contracts, EUR
millions
Nominal value
Currency derivatives 315.6 224.4 204.4
Electricity derivates 3.5 3.0 2.5
Total 319.1 227.4 206.9
Exchange rates
Country
Russia RUB 43.9800 36.4095 41.2830
Estonia EEK 15.6466 15.6466 15.6466
Latvia LVL 0.7079 0.7086 0.7083
Lithuania LTL 3.4528 3.4528 3.4528
Norway NOK 8.4600 8.3330 9.7500
Sweden SEK 10.2320 9.7943 10.8700
Income statement,
Group, EUR millions Q3 Q2 Q1 Q4
quarterly, EUR millions 2009 2009 2009 2008
Revenue 389.3 429.7 353.2 541.3
Other operating income 0.0 0.3 0.1
Materials and consumables -201.0 -220.1 -197.2 -273.5
Wages, salaries and employee -74.3 -82.6 -79.7 -92.9
benefits expenses
Depreciation and amortisation -14.0 -14.7 -14.6 -14.2
Other operating expenses -82.3 -84.0 -83.7 -102.4
Operating profit (loss) 17.7 28.6 -22.0 58.4
Finance income and expenses -8.8 -5.1 -4.8 -12.7
Profit (loss) before tax 8.9 23.5 -26.9 45.7
Income taxes 8.0 -1.4 3.1 -25.8
Profit for the period 16.9 22.0 -23.8 19.9
Earnings per share, EUR
Basic 0.27 0.36 -0.39 0.34
Diluted 0.27 0.36 -0.39 0.34
Q3 Q2 Q1 Q4
Sales, EUR millions 2009 2009 2009 2008
Department Store Division 225.7 267.0 224.5 371.8
Lindex 169.7 169.6 122.6 175.6
Hobby Hall 30.9 40.2 43.1 53.7
Seppälä 44.1 42.9 34.7 51.5
Unallocated 0.0 0.0 0.0 0.2
Group 470.5 519.7 424.8 652.8
Revenue, EUR millions
Department Store Division 189.8 224.0 189.0 312.9
Lindex 136.5 136.5 98.6 141.0
Hobby Hall 25.8 33.5 35.9 44.9
Seppälä 36.7 35.6 28.8 42.8
Unallocated 0.6 0.1 0.8 -0.3
Group 389.3 429.7 353.2 541.3
Operating profit (loss), EUR
millions
Department Store Division -1.9 9.2 -14.5 34.9
Lindex 18.1 19.7 0.2 20.3
Hobby Hall -0.9 -0.8 -1.7 1.6
Seppälä 2.9 3.0 -2.8 4.2
Unallocated -1.2 -3.2 -1.8 -3.3
Eliminations 0.7 0.6 -1.4 0.8
Group 17.7 28.6 -22.0 58.4
This Interim Report is
unaudited.
Income statement,
Group, EUR millions Q3 Q2 Q1 Q4
quarterly, EUR millions 2008 2008 2008 2007
Revenue 440.8 483.3 413.4 483.9
Other operating income 0.3 -0.1 3.8 0.0
Materials and consumables -224.7 -242.6 -231.0 -255.8
Wages, salaries and employee -82.3 -90.2 -85.1 -73.2
benefits expenses
Depreciation and amortisation -13.2 -18.7 -15.2 -10.5
Other operating expenses -86.2 -100.3 -88.5 -73.7
Operating profit (loss) 34.6 31.4 -2.5 70.8
Finance income and expenses -12.8 -13.3 -11.3 -4.3
Profit (loss) before tax 21.8 18.1 -13.8 66.5
Income taxes -6.2 -2.9 2.2 -17.9
Profit for the period 15.6 15.2 -11.6 48.6
Earnings per share, EUR
Basic 0.27 0.27 -0.21 0.87
Diluted 0.27 0.27 -0.21 0.87
Q3 Q2 Q1 Q4
Sales, EUR millions 2008 2008 2008 2007
Department Store Division 264.8 306.4 275.9 400.4
Lindex 174.9 183.8 138.3 68.1
Hobby Hall 41.6 48.3 47.4 58.9
Seppälä 50.1 45.2 35.7 51.2
Unallocated 0.2 0.2 0.2 0.2
Group 531.5 583.9 497.5 578.8
Revenue, EUR millions
Department Store Division 223.1 257.3 232.7 336.9
Lindex 140.6 147.6 111.0 54.7
Hobby Hall 34.7 40.4 39.7 49.2
Seppälä 41.7 37.6 29.7 42.5
Unallocated 0.6 0.4 0.4 0.7
Group 440.7 483.3 413.4 483.9
Operating profit (loss), EUR
millions
Department Store Division 13.5 4.1 1.5 46.9
Lindex 15.7 23.8 -1.2 15.0
Hobby Hall 0.7 0.7 -2.1 2.7
Seppälä 5.9 5.1 -0.6 8.6
Unallocated -0.7 -2.2 0.2 -2.4
Eliminations -0.5 0.0 -0.3 0.0
Group 34.6 31.4 -2.5 70.8
This Interim Report is
unaudited.
1. ASSETS
EUR mill. 30.09.2009 30.9.2008 31.12.2008
Acquisition cost Jan. 1 945.3 813.8 813.8
Translation difference +/- 11.7 -6.1 -21.0
Increases Jan. 1-Sep. 30 105.0 124.9 181.6
Decreases Jan. 1-Sep. 30 -115.9 -6.8 -29.0
Acquisition cost Sep. 30 / Dec. 31 946.1 925.7 945.4
Accumulated depreciation Jan. 1 -245.7 212.5 212.5
Translation difference +/- -2.9 -0.8 -2.6
Depreciation on reductions 33.3 -4.5 -25.5
Depreciation for the financial year -43.3 47.2 61.4
Accumulated depreciation Sep. 30 / Dec. -258.7 254.3 245.7
31
Book value Jan. 1 699.6 601.3 601.3
Book value Sep. 30 / Dec. 31 687.5 671.4 699.6
Goodwill
EUR mill. 30.09.2009 30.9.2008 31.12.2008
Acquisition cost Jan. 1 646.5 720.0 720.0
Translation difference +/- 40.3 -25.9 -94.6
Increases Jan. 1-Sep. 30 23.3 23.8
Translation difference +/- -2.8
Acquisition cost Sep. 30 / Dec. 31 686.8 717.4 646.5
Book value Jan. 1 646.5 720.0 720.0
Book value Sep. 30 / Dec. 31 686.8 717.4 646.5
Total 1,374.3 1,388.8 1,346.1
Definitions to key figures:
Equity ratio, per cent = 100 x (Equity + minority interest) / Total assets
less advance payments received
Net gearing, per cent = 100 x Interest-bearing net financial liabilities /
Equity total
Interest-bearing net debt = Interest-bearing liabilities less cash and
cash equivalents less interest-bearing receivables
Market capitalization = Number of shares multiplied by the quotation for
the respective share series on the balance sheet date
Earnings per share, adjusted for share issues = (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)
STOCKMANN plc
Hannu Penttilä
CEO
DISTRIBUTION
NASDAQ OMX
Principal media
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