2012-10-30 07:30:00 CET
2012-10-30 07:30:09 CET
REGULATED INFORMATION
Marimekko - Interim report (Q1 and Q3)
MARIMEKKO CORPORATION’S INTERIM REPORT, 1 JANUARY - 30 SEPTEMBER 2012
Marimekko Corporation, Interim Report, 30 October 2012 at 8.30 AM
During the January-September period of 2012, the Marimekko Group's net sales
grew by 17 per cent and international sales by no less than 32 per cent. The
trend was strong in the third quarter and profitability took a clear turn for
the better as forecast. In July-September 2012, operating profit grew by 50 per
cent. Cumulative growth in operating profit was 7 per cent. Net sales and
operating profit forecasts for the full year 2012 remain unchanged.
January to September
-- Net sales grew by 16.5% and were EUR 62.7 million (53.9).
-- International sales grew by 31.8% and were EUR 25.9 million (19.7). The
strongest growth in sales was in North America, 75.7%, and in
Asia-Pacific, 39.1%.
-- In Finland, the favourable trend in sales continued. Sales rose by 7.6%,
driven by good growth in retail sales, reaching EUR 36.8 million (34.2).
-- Operating profit grew by 6.5% and was EUR 2.0 million (1.9). Profitability
was boosted by growth in net sales and sales margins, but a drag was
exerted by increased costs related to business expansion and by a decline
in wholesale sales in Finland and the United States.
-- Cash flow from operating activities was EUR 2.5 million (-1.8).
-- Investments were EUR 5.6 million (5.5).
-- Brand sales* grew by 9.6%, reaching EUR 132.8 million (121.1).
July to September
-- Net sales grew by 22.2% and were EUR 24.2 million (19.8).
-- Operating profit grew by 50.2% and was EUR 3.5 million (2.3).
-- Cash flow from operating activities was EUR 3.1 million (0.5).
Market outlook and growth targets
The new stores opened during 2011 will, together with other significant
investments in the expansion of the distribution network, generate a
substantial increase in sales in 2012. The number of new stores to be opened
during this year has been confirmed as 19. One store was opened in the first
quarter, three in the second and eight in the third. Seven stores will be
opened in the final quarter of the year, two of them flagship stores. This
total of new Marimekko stores is divided as follows: 11 company-owned stores,
four retailer-owned stores and four shop-in-shops.
The planned total investments for 2012 of the Marimekko Group are estimated at
approximately EUR 7 million. The majority of investments will be directed at
building new store premises and purchasing new furniture.
Financial guidance
The forecast for the whole of 2012 remains unchanged: the Marimekko Group's net
sales are estimated to grow by over 10% and operating profit is forecast to at
least double. The increased share of retail sales adds to the seasonality of
the business, and thus the operating profit is generated entirely in the second
half of the year.
Key indicators
7-9/ 7-9/ Change 1-9/ 1-9/ Change 1-12/
2012 2011 ,% 2012 2011 ,% 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 24,214 19,812 22.2 62,723 53,861 16.5 77,442
--------------------------------------------------------------------------------
proportion of 41.0 36.3 41.3 36.5 35.8
international
sales, %
--------------------------------------------------------------------------------
EBITDA, EUR 1,000 4,416 2,855 54.7 4,535 3,333 36.1 5,744
--------------------------------------------------------------------------------
Operating profit, EUR 3,486 2,321 50.2 2,006 1,883 6.5 3,528
1,000
--------------------------------------------------------------------------------
Operating profit 14.4 11.7 3.2 3.5 4.6
margin, %
--------------------------------------------------------------------------------
Profit for the 2,473 1,723 43.5 1,439 1,415 1.7 2,826
period,
EUR 1,000
--------------------------------------------------------------------------------
Earnings per share, 0.31 0.21 0.18 0.18 0.35
EUR
--------------------------------------------------------------------------------
Cash flow from 3,069 481 2,539 -1,816 651
operating
activities, EUR
1,000
--------------------------------------------------------------------------------
Return on investment 28.9 27.1 6.0 7.2 11.4
(ROI), %
--------------------------------------------------------------------------------
Equity ratio, % 54.4 65.5 67.2
--------------------------------------------------------------------------------
Personnel at the end 482 405 19.0 434
of the period
--------------------------------------------------------------------------------
outside Finland 77 47 63.8 63
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brand sales*, EUR 49,569 41,337 19.9 132,768 121,149 9.6 168,557
1,000
--------------------------------------------------------------------------------
proportion of 55.2 49.8 57.0 48.8 47.5
international
sales, %
--------------------------------------------------------------------------------
Number of stores** 102 83 22.9 90
--------------------------------------------------------------------------------
* Estimated sales of Marimekko products at consumer prices. Brand sales are
calculated by adding together the company's own retail sales and the estimated
retail value of Marimekko products sold by other retailers. The estimate, based
on Marimekko's actual wholesale sales to these retailers, is unofficial and
does not include VAT. This key figure is not audited.
** Includes the company's own retail stores, retailer-owned Marimekko stores
and shop-in-shops with an area exceeding 30 sqm. The company's own retail
stores numbered 43 (30). Information on changes is available in the section
Internationalisation and changes in the store network.
Mika Ihamuotila, President and CEO:
“In spite of the difficulties in the global economy, Marimekko's net sales grew
dynamically. Recently the focus of our new store openings has been outside
economically troubled Europe. During the January-September period of 2012, our
net sales in Asia-Pacific rose by 39% and in North America by 76%. Growth in
Finland has also been strong. I am proud of Marimekko employees' ability to
build robust growth in such challenging market conditions. We have also
simultaneously succeeded in improving our profitability.
This year a total of 19 new Marimekko stores will be opened, 12 of them outside
Finland. The openings are clearly concentrated in the latter part of the year:
eight stores were opened during the third quarter and a further seven stores
will be opened in the last quarter. The stores opened during the first half of
the year have boosted growth in net sales, but wholesale and comparable sales
in company-owned stores also grew well. From January to September, our net
sales grew by 17% and international sales by 32%.
Due to the seasonality of our business, the bulk of net sales and profit
accumulation tends towards the second half of the year. During the third
quarter, there was a clear change for the better in our trend in earnings, as
had been expected. Our operating profit grew by 50% in July to September
despite the fact that increased expenses for expanding business operations in
particular continued to exert a drag on profits. I am pleased that our cash
flow was strong in the third quarter and that we succeeded at the same time in
reducing our stocks and improving our sales margins. In respect of the last
quarter, it must be borne in mind that retail and particularly Christmas sales
contribute a considerable proportion of sales.
This autumn, we have also taken important steps forward by appearing in
international fashion arenas on a considerably larger scale than before. For
the first time, we took part in New York Fashion Week. The purpose of our
fashion show was to support both our existing stores in New York, Boston and
Cambridge and the new ones in Beverly Hills and Palo Alto. Last week, we staged
an unprecedented show in Shanghai's People's Park. The show gave us valuable
visibility which we are seeking to use to support our growth strategy in China.
Our aim is to open 14 stores there by the end of 2016.”
Further information:
Mika Ihamuotila, President and CEO, tel. +358 9 758 71
Thomas Ekström, Chief Financial Officer, tel. +358 50 381 9751
MARIMEKKO CORPORATION
Corporate Communications
Piia Kumpulainen
Tel. +358 9 758 7293
piia.kumpulainen@marimekko.fi
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Key media
Marimekko is a Finnish textile and clothing design company renowned for its
original prints and colours. The company designs and manufactures high-quality
interior decoration items ranging from furnishing fabrics to tableware as well
as clothing, bags and other accessories. When Marimekko was founded in 1951,
its unparalleled printed fabrics gave it a strong and unique identity.
Marimekko products are sold in approximately 40 countries. In 2011, brand sales
of Marimekko products worldwide amounted to approximately EUR 170 million and
the company's net sales were EUR 77 million. The number of Marimekko stores
totalled 90 at the year end. The key markets are North America, Northern Europe
and the Asia-Pacific region. The Group employs around 500 people. The company's
share is quoted on NASDAQ OMX Helsinki Ltd. www.marimekko.com
MARIMEKKO CORPORATION‘S INTERIM REPORT, 1 January - 30 September 2012
MARKET SITUATION
Overall uncertainty continues in the global economy, and this may impact
consumers' purchasing behaviour in all markets. Forecasts of world economic
growth have held fairly steady, but the risks have increased. The world economy
is forecast to grow, driven by the developing markets, although China's
economic trend has flagged somewhat. The economic forecasts for the United
States are better than in Europe, but growth is fairly slow. All in all, the
outlook is fragmented and no end to the uncertainty can be seen (Confederation
of Finnish Industries EK: Business Tendency Survey, 8 August 2012). In the
latest international forecasts, the figures for this and next year have
deteriorated somewhat. EU states' severe loan crisis is still continuing. The
ECB's policy decision on purchasing bonds of indebted countries seems to have
bought peace on the market at least temporarily, but it will not solve the debt
crisis. This is still the main threat which could turn the global economic
trend in a distinctly worse direction. In Finland, the situation is moderate,
although public statistics indicate that the Finnish economy is headed towards
recession. Consumer confidence took a distinct downturn in the summer
(Confederation of Finnish Industries EK: Economic Review, 16 October 2012).
From January to September 2012, the value of Finnish retail sales rose by 4.8%,
but the volume of sales, indicating real growth in sales, grew only by 1.2%. In
September, the volume of sales fell by 0.9%. (Statistics Finland: Turnover of
Trade 2012, advance figures for retail, September). In January-August 2012,
clothing retail sales (excluding sportswear) rose by 1.6% (Textile and Fashion
Industries TMA). Sales of women's clothing grew by 0.1%, menswear by 2.6% and
children's clothing by 5.2%. Sales of bags were up by 3.5%. From January to
July 2012, clothing (SITC 84) exports grew by 14% and imports declined by 4%;
textile (SITC 65) exports and imports both declined by 2% (National Board of
Customs, monthly review, July 2012).
INTERNATIONALISATION AND CHANGES IN THE STORE NETWORK
On the basis of positive feedback in Northern Europe and the United States,
Marimekko is investing more than before in the expansion of its network of
company-owned stores. This will change the ratio of wholesale to retail sales
somewhat, and it will tie up more of the company's capital and resources.
In February, Marimekko reported it was expanding its operations in all its main
market areas and aiming to open 10 to 20 new stores this year. The number of
stores to be opened has been confirmed as 19.
Eight Marimekko stores were opened in the third quarter: in Finland a
company-owned store in Lappeenranta, a retailer-owned store in Kouvola and a
shop-in-shop in Tampere, in North America company-owned stores in Boston and
Manchester, Vermont and a shop-in-shop in Toronto, and in Asia-Pacific a
retailer-owned store and a shop-in-shop in Tokyo.
Since the end of the period, a company-owned store was opened at the end of
October in Palo Alto. In the final quarter of the year, another six stores will
be opened, two of them flagship stores. In Helsinki the store on Uudenmaankatu
will be closed at the same time as a new Marimekko store is opened in the heart
of the city.
In all, the new stores break down as follows: 11 company-owned, four
retailer-owned, and four shop-in-shops.
Number of stores & shop-in-shops 30 Sept. 2012 30 Dec. 2011
-------------------------------------------------------------
-------------------------------------------------------------
Finland 46 42
-------------------------------------------------------------
Own retail stores 28 26
-------------------------------------------------------------
Scandinavia 12 10
-------------------------------------------------------------
Own retail stores 7 5
-------------------------------------------------------------
Central and Southern Europe 5 5
-------------------------------------------------------------
Own retail stores 4 4
-------------------------------------------------------------
North America 14 11
-------------------------------------------------------------
Own retail stores 4 2
-------------------------------------------------------------
Asia-Pacific 25 22
-------------------------------------------------------------
Own retail stores - -
-------------------------------------------------------------
-------------------------------------------------------------
TOTAL 102 90
-------------------------------------------------------------
Own retail stores 43 37
-------------------------------------------------------------
NET SALES
January to September
In the January-September period of 2012, the Marimekko Group's net sales,
fuelled by growth in international sales, were up by 16.5% to EUR 62,723
thousand (53,861). Net sales in Finland grew by 7.6%, international sales by
31.8%.
July to September
In the July-September period of 2012, the Group's net sales grew by 22.2% to
EUR 24,214 thousand (19,812), driven by international sales. Net sales in
Finland rose by 13.1% and international sales by 38.3%.
NET SALES BY MARKET AREA
(EUR 1,000) 7-9/201 7-9/201 Change, 1-9/201 1-9/20 Change, 1-12/20
2 1 % 2 11 % 11
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Finland 14,278 12,628* 13.1 36,789 34,191 7.6 49,807*
*
--------------------------------------------------------------------------------
Retail sales 9,768 7,630 28.0 23,904 19,342 23.6 28,267
--------------------------------------------------------------------------------
Wholesale sales 4,350 4,817 -9.7 12,456 14,179 -12.2 20,584
--------------------------------------------------------------------------------
Royalties 160 181 -11.6 429 670 -36.0 956
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Scandinavia 2,066 1,967* 5.0 5,793 5,308* 9.1 7,518*
--------------------------------------------------------------------------------
Retail sales 946 581 62.8 2,355 1,446 62.9 2,241
--------------------------------------------------------------------------------
Wholesale sales 1,120 1,386 -19.2 3,435 3,857 -10.9 5,269
--------------------------------------------------------------------------------
Royalties - - 3 5 -40.0 8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Central and 2,167 1,694* 27.9 5,908 4,869* 21.3 6,691*
Southern Europe
--------------------------------------------------------------------------------
Retail sales 366 333 9.9 1,066 976 9.2 1,394
--------------------------------------------------------------------------------
Wholesale sales 1,777 1,333 33.3 4,763 3,807 25.1 5,183
--------------------------------------------------------------------------------
Royalties 24 28 -14.3 79 86 -8.1 114
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
North America 2,214 1,118* 98.0 4,934 2,808* 75.7 4,960*
--------------------------------------------------------------------------------
Retail sales 1,198 - 2,278 - 972
--------------------------------------------------------------------------------
Wholesale sales 915 996 -8.1 2,238 2,520 -11.2 3,430
--------------------------------------------------------------------------------
Royalties 101 122 -17.2 418 288 45.1 558
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Asia-Pacific 3,489 2,405* 45.1 9,299 6,685* 39.1 8,466*
--------------------------------------------------------------------------------
Retail sales - - - - -
--------------------------------------------------------------------------------
Wholesale sales 3,488 2,397 45.5 9,296 6,677 39.2 8,458
--------------------------------------------------------------------------------
Royalties 1 8 -87.5 3 8 -62.5 8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
International 9,936 7,184* 38.3 25,934 19,670 31.8 27,635*
sales, total *
--------------------------------------------------------------------------------
Retail sales 2,510 914 174.6 5,699 2,422 135.3 4,607
--------------------------------------------------------------------------------
Wholesale sales 7,300 6,112 19.4 19,732 16,861 17.0 22,340
--------------------------------------------------------------------------------
Royalties 126 158 -20.3 503 387 30.0 688
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL 24,214 19,812 22.2 62,723 53,861 16.5 77,442
--------------------------------------------------------------------------------
Retail sales 12,278 8,544 43.7 29,603 21,764 36.0 32,874
--------------------------------------------------------------------------------
Wholesale sales 11,650 10,929 6.6 32,188 31,040 3.7 42,924
--------------------------------------------------------------------------------
Royalties 286 339 -15.6 932 1,057 -11.8 1,644
--------------------------------------------------------------------------------
* Due to adjustments made in internal sales reporting structures, the
previously reported sales figures by market area have changed.
Finland
In the January-September period of 2012, sales in Finland rose by 7.6% to EUR
36,789 thousand. Retail sales were up by 23.6%. Sales were boosted by the three
stores opened in the last quarter of 2011 as well as two stores opened during
the period under review. The comparable growth in sales by company-owned stores
was 12.8%. Wholesale sales fell by 12.2%. This was partly due to changes
effected in the distribution network in accordance with the company's
distribution strategy.
Scandinavia
Sales in Scandinavia grew by 9.1% to EUR 5,793 thousand. Retail sales were up
by 62.9%. Three stores opened in 2011 boosted retail sales. Sales were also
stimulated by two stores opened in Sweden in the second quarter of this year.
The comparable trend in sales by company-owned stores was -11.1%. Wholesale
sales fell by 10.9%. Consumers' purchasing behaviour continued to be cautious
in all countries and especially in Sweden.
Central and Southern Europe
In Central and Southern Europe, net sales rose to EUR 5,908 thousand, up by
21.3% on the previous year. Retail sales grew by 9.2% which was attributable to
sales by the small company-owned store opened in London near the end of 2011.
The comparable growth in sales by company-owned stores was 0.2%. Wholesale
sales were up by 25.1%. Sales were brisk in Belgium, Germany, the UK and
France. The weak economic situation in Italy impacted consumer demand and sales
took a downturn.
North America
Net sales in North America grew by 75.7% to EUR 4,934 thousand. Measured in the
invoicing currency (mostly the US dollar), growth was roughly 60%. A major
share of the growth was generated by the net sales of the flagship store in New
York. The opening in August of a store in Boston and an outlet in Manchester,
Vermont also increased net sales. Marimekko also expanded its distribution in
Canada: in September, a shop-in-shop was opened in EQ3's new flagship store in
Toronto. However, wholesale sales were below expectations and declined by
11.2%.
Asia-Pacific
The strong trend in wholesale sales seen in the Asia-Pacific region last year
continued throughout the period under review. Sales grew by 39.1% to EUR 9,299
thousand. Sales were above expectations in all countries, but a clear majority
of the growth came from Japan. A retailer-owned Marimekko store and a
shop-in-shop were opened in Tokyo in September. Sales were also boosted by a
new store in Hong Kong which opened in the second quarter. Efforts deployed in
Australia showed results, and sales there also grew.
FINANCIAL RESULT
January to September
In the January-September period of 2012, operating profit was EUR 2,006
thousand (1,883). Operating profit was boosted by 16.5 per cent growth in net
sales and a rise in sales margins. The average sales margin grew despite a
simultaneous reduction in inventory levels. On the other hand, business
expansion costs in the United States and Sweden and the increased costs of the
head office service organisation eroded profitability. Also, the decline in
wholesale sales in Finland and the United States impaired the result.
Marketing expenses during the period were EUR 3,657 thousand (3,476), or 5.8%
(6.5) of the Group's net sales.
As a result of considerable investments, the Group's depreciation grew to EUR
2,529 thousand (1,450), which represented 4.0% (2.7) of net sales.
The operating profit margin was 3.2% (3.5).
Net financial expenses were EUR 298 thousand (47), or 0.5% (0.1) of net sales.
Profit for the review period before taxes was EUR 1,708 thousand (1,836).
Profit after taxes was EUR 1,439 thousand (1,415) and earnings per share were
EUR 0.18 (0.18).
July to September
In the July-September period of 2012, the Group's operating profit was EUR
3,486 thousand (2,321). Operating profit was improved by a 22.2 per cent
increase in net sales and a rise in sales margins. The average sales margin
grew despite a simultaneous reduction in inventory levels. On the other hand,
business expansion costs in the United States and Sweden and the increased
costs of the head office service organisation eroded profitability. Also, the
decline in wholesale sales in Finland and the United States impaired the
result.
BALANCE SHEET
The consolidated balance sheet at 30 September 2012 amounted to EUR 54,536
thousand (47,710). Total equity attributable to the equity holders of the
parent company was EUR 29,689 thousand (31,235), or EUR 3.69 per share (3.88).
Non-current assets were EUR 24,228 thousand (14,551 on 30 September 2011;
17,418 on 31 December 2011). As of March 2012, tangible assets include the
present value of future lease payments for the new 30-year land lease on the
property of the Helsinki head office and printing factory. The present value of
the future lease payments is EUR 3,460 thousand.
Net working capital at the end of the period totalled EUR 20,209 thousand,
which was EUR 792 thousand more than a year previously and EUR 995 thousand
more than at the end of 2011. Inventories were EUR 19,777 thousand, which was
EUR 1,672 thousand less than a year previously and EUR 1,571 thousand less than
at the end of 2011.
CASH FLOW AND FINANCING
In the January-September period of 2012, cash flow from operating activities
was EUR 2,539 thousand (-1,816), representing EUR 0.32 per share (-0.23). Cash
flow before financing activities was EUR -3,070 thousand (-7,345).
In the July-September period of 2012, cash flow from operating activities was
EUR 3,069 thousand (481), representing EUR 0.38 per share (0.06). Cash flow
before financing activities was EUR 1,350 thousand (-1,896).
The Group's financial liabilities were EUR 16,498 thousand at the end of the
reporting period, compared to EUR 5,360 thousand a year ago and EUR 4,944
thousand at the end of 2011. As of the end of March, financial liabilities
include the present value of future lease payments for the new 30-year land
lease on the property of the Helsinki head office and printing factory. The
present value of the future lease payments is EUR 3,460 thousand.
Cash and cash equivalents were EUR 2,272 thousand at the end of the period
under review (3,260 on 30 September 2011; 1,620 on 31 December 2011).
Additionally, the Group had unused committed credit lines amounting to EUR
6,912 thousand (1,640).
The Group's equity ratio was 54.4% at the end of the period (65.5 on 30
September 2011; 67.2 on 31 December 2011). Gearing was 47.9%, while it was 6.7%
at the end of the corresponding period of the previous year.
INVESTMENTS
The Group's gross investments amounted to EUR 5,609 thousand (5,529),
representing 8.9% (10.3) of net sales. Most of the investments were devoted to
building new stores and renovating the Herttoniemi property.
PERSONNEL
In the January-September period of 2012, the number of employees averaged 481
(393). At the end of the period, the Group had 482 (405) employees, of whom 77
(47) worked outside Finland. The breakdown of the number of employees working
abroad by market area was as follows: Scandinavia 26 (19), Central and Southern
Europe 12 (12), North America 37 (16) and Asia-Pacific 2 (0). The personnel of
the company's own stores numbered 194 (158) at the end of the period.
CHANGES IN MANAGEMENT
Marimekko's Marketing Director and member of the Management Group Malin Groop
resigned from the company on 15 August 2012 and she has since served the
company as a consultant for strategic projects related to brand development.
Tiina Alahuhta-Kasko was appointed as the Group's Marketing Director and member
of the Management Group as from 15 August 2012. Alahuhta-Kasko has been in the
company's employ since 2005.
SHARES AND SHAREHOLDERS
Share capital
At the end of the review period, the company's fully paid-up share capital, as
recorded in the Trade Register, amounted to EUR 8,040,000 and the number of
shares totalled 8,040,000.
Shareholdings
According to the book-entry register, Marimekko had 6,999 (6,858) shareholders
at the end of the period. Of the shares, 12.0% (13.6) were registered in a
nominee's name and 5.3% (15.9) were in foreign ownership. The number of shares
owned either directly or indirectly by members of the Board of Directors and
the President of the company was 1,168,930 (1,150,930), representing 14.5%
(14.3) of the total share capital and of the votes conferred by the company's
shares.
The largest shareholders according to the book-entry register on 30 September
2012
Number of shares Percentage of holding
and votes and votes
--------------------------------------------------------------------------------
1. Muotitila Ltd 1,127,700 14.03
--------------------------------------------------------------------------------
2. Semerca Investments SA 850,377 10.58
--------------------------------------------------------------------------------
3. ODIN Finland 407,899 5.07
--------------------------------------------------------------------------------
4. Varma Mutual Employment Pension 385,920 4.80
Insurance Company
--------------------------------------------------------------------------------
5. Ilmarinen Mutual Pension 265,419 3.30
Insurance Company
--------------------------------------------------------------------------------
6. Veritas Pension Insurance 217,804 2.71
Company
--------------------------------------------------------------------------------
7. Keva 127,033 1.58
--------------------------------------------------------------------------------
8. Danske Fund Finnish Small Cap 105,000 1.31
--------------------------------------------------------------------------------
9. Nordea Nordic Small Cap Fund 101,500 1.26
--------------------------------------------------------------------------------
10. Nordea Finland Small Cap Fund 70,897 0.88
--------------------------------------------------------------------------------
Total 3,659,549 45.52
--------------------------------------------------------------------------------
Nominee-registered 961,843 11.96
--------------------------------------------------------------------------------
Other 3,418,608 42.52
--------------------------------------------------------------------------------
Total 8,040,000 100.00
--------------------------------------------------------------------------------
Share trading and the company's market capitalisation
During the period, a total of 826,986 Marimekko shares were traded,
representing 10.3% of the shares outstanding. The total value of Marimekko's
share turnover was EUR 11,005,638. The lowest price of the Marimekko share was
EUR 9.92, the highest was EUR 15.04 and the average price was EUR 13.41. At the
end of the period, the closing price of the share was EUR 14.13. The company's
market capitalisation on 30 September 2012 was EUR 113,605,200 (86,028,000 on
30 September 2011; 79,435,200 on 31 December 2011).
Authorisations
The Annual General Meeting of 17 April 2012 authorised the Board of Directors
to decide on a directed offering of shares to the personnel, in deviation from
the shareholders' pre-emptive right, in one or more offerings. The total number
of new shares to be offered for subscription pursuant to the authorisation may
not exceed 150,000 shares, representing approximately 1.9% of the total number
of the company's shares. The authorisation includes the right of the Board of
Directors to decide on all the other terms of the share issue. The
authorisation is in effect for two years from the date of the Annual General
Meeting's decision.
At the end of the period, the Board of Directors had no other valid
authorisations to carry out share issues or issue convertible bonds or bonds
with warrants, or to acquire or surrender Marimekko shares.
Personnel share offering
Marimekko Corporation's Board of Directors decided on 13 August 2012 on the
terms of a personnel share offering. In the personnel share offering, a total
of 150,000 new shares in the company were offered, in deviation from the
shareholders' pre-emptive right, to the personnel and designers for
subscription in Finland. The terms of the personnel share offering are
described in more detail in the stock exchange release dated 14 August 2012.
EVENTS AFTER THE CLOSE OF THE REVIEW PERIOD
Implementing the personnel share offering
Marimekko declared in its stock exchange release of 4 October 2012 that the
company's Board of Directors had given its approval in the personnel share
offering to subscriptions for a total of 49,610 new shares in the company with
a total subscription price of EUR 501,449. The approved subscriptions were
payable no later than 26 October 2012.
The shares subscribed for in the share issue represent in total 0.62 per cent
of the company's existing shares and the voting rights carried by the existing
shares before the share issue and 0.61 per cent of the company's existing
shares and new shares and the voting rights carried by the existing and new
shares after the share issue. The majority of those entitled to subscribe took
part in the share issue. Subscriptions were placed by 308 company employees and
freelance designers out of a total of 510 who were entitled.
E-commerce
Marimekko began building its e-commerce in the United States last year. The
second stage of this is now complete, and online retailing in Finland started
on 24 October 2012. International e-commerce augments Marimekko's other
distribution channels and is part of the company's long-term growth strategy.
The intention is to expand the operation to other countries in stages over the
next few years.
MAJOR RISKS AND FACTORS OF UNCERTAINTY
The key strategic risks are associated with overall economic trends and the
consequent uncertainty in the operating environment as well as the management
of expansion. Factors of uncertainty and trends in the world economy affect
consumers' purchasing behaviour and buying power in all of the company's market
areas. The severe problems of the international financial markets dampen the
prospects for retail sales as well as Marimekko's growth and earnings outlook.
Consumers' purchasing behaviour has been cautious, especially in Scandinavia.
Marimekko is undergoing a phase of extensive internationalisation and change.
The distribution of products is being expanded in all key market areas,
particularly North America and the Asia-Pacific region. Unlike before, the
focus of growth lies increasingly in opening company-owned stores outside
Finland. This calls for larger or brand-new country organisations in these
market areas, which will exert a substantial drag on the cost-effectiveness of
the company, especially in the early stages of expansion. Moreover, expanding
the network of company-owned stores will increase the company's investments,
lease liabilities of store premises, and inventories, and it will raise the
company's fixed costs. It follows from this that a larger portion of Group net
sales will come from sales by the company's own retail stores, which will add
to the seasonality of the business and shift the bulk of net sales and profit
accumulation to the last quarter, thus having a negative impact on
profitability in the first half of the year. Furthermore, partnerships and the
choice of partners in the company's key market areas also involve risks.
The company's ability to develop and commercialise new products that meet
consumers' expectations while maintaining profitable and effective in-house
production has an impact on the company's sales and profitability.
The company's key operational risks prominently include those related to the
management of expansion projects, the operational reliability of procurement
and logistics processes, and changes in cost of raw materials and other
procurement items. As a result of new products, the share of in-house
production has diminished, and Marimekko uses subcontractors to an increasing
extent. Therefore, the company's dependence on the supply chain has increased.
Any delays or disturbances in supply or fluctuations in the quality of products
may have a temporary harmful impact on business. As the operations are being
expanded and diversified, risks related to the management of inventories also
increase.
Among the company's economic risks, those related to the structure of sales,
increased investments, price trends for factors of production, customers'
liquidity, and changes in exchange rates may have an impact on the company's
financial status.
MARKET OUTLOOK AND GROWTH TARGETS
The negative effects of the structural problems of the international financial
markets on general economic trends continue to dampen the outlook for retail
sales and make it difficult to predict consumers' purchasing behaviour in
different market areas.
The new stores opened during 2011 will, together with other significant
investments in the expansion of the distribution network, generate a
substantial increase in sales in 2012. The number of new stores to be opened
this year has been confirmed as 19. One store was opened in the first quarter,
three in the second and eight in the third. In the last quarter of this year,
seven stores will be opened, two of which will be flagship stores. This total
of new Marimekko stores is divided as follows: 11 company-owned stores, four
retailer-owned stores and four shop-in-shops.
The planned total investments for 2012 of the Marimekko Group are estimated at
approximately EUR 7 million. The majority of investments will be directed at
building new store premises and purchasing new furniture.
FINANCIAL GUIDANCE
The forecast for the whole of 2012 remains unchanged: the Marimekko Group's net
sales are estimated to grow by over 10% and operating profit is forecast at
least to double. The increased share of retail sales adds to the seasonality of
the business, and thus the operating profit is generated entirely in the second
half of the year.
Helsinki, 30 October 2012
MARIMEKKO CORPORATION
Board of Directors
Information presented in the interim report has not been audited.
APPENDICES
Accounting principles
Formulas for the key figures
Consolidated income statement and comprehensive consolidated income statement
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in shareholders' equity
Key figures
Segment information
Quarterly trend in net sales by market area
Net sales by product line
Quarterly trend in net sales and earnings
ACCOUNTING PRINCIPLES
This interim report was prepared in accordance with IAS 34: Interim Financial
Reporting. The same accounting principles were applied as in the 2011 financial
statements.
FORMULAS FOR THE KEY FIGURES
Earnings per share (EPS), EUR:
(Profit before taxes - income taxes) / Number of shares (average for the
financial period)
Equity per share, EUR:
Shareholders' equity / Number of shares, 30 September
Return on equity (ROE), %:
(Profit before taxes - income taxes) X 100 / Shareholders' equity (average for
the financial period)
Return on investment (ROI), %:
(Profit before taxes + interest and other financial expenses) X 100 / (Balance
sheet total - non-interest-bearing liabilities (average for the financial
period))
Equity ratio, %:
Shareholders' equity X 100 / (Balance sheet total - advances received)
Gearing, %:
Interest-bearing net debt X 100 / Shareholders' equity
Net working capital:
Inventories + trade and other receivables + current tax assets - trade and
other payables
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 7-9/20 7-9/20 1-9/20 1-9/20 1-12/2
12 11 12 11 011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET SALES 24,214 19,812 62,723 53,861 77,442
--------------------------------------------------------------------------------
Other operating income 33 - 42 2 2
--------------------------------------------------------------------------------
Increase or decrease in inventories of 977 -1,181 1,452 -3,162 -2,353
completed and unfinished products
--------------------------------------------------------------------------------
Raw materials and consumables 7,522 8,392 20,764 22,809 30,287
--------------------------------------------------------------------------------
Employee benefit expenses 5,443 4,530 17,064 14,145 20,030
--------------------------------------------------------------------------------
Depreciation 930 534 2,529 1,450 2,216
--------------------------------------------------------------------------------
Other operating expenses 5,889 5,216 18,950 16,738 23,736
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPERATING PROFIT 3,486 2,321 2,006 1,883 3,528
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income -107 2 31 43 246
--------------------------------------------------------------------------------
Financial expenses -196 -32 -329 -90 -59
--------------------------------------------------------------------------------
-303 -30 -298 -47 187
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROFIT BEFORE TAXES 3,183 2,291 1,708 1,836 3,715
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes 710 568 269 421 889
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET PROFIT FOR THE PERIOD 2,473 1,723 1,439 1,415 2,826
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net result to equity 2,473 1,723 1,439 1,415 2,826
holders of the parent company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Basic and diluted earnings per share 0.31 0.21 0.18 0.18 0.35
calculated on the profit attributable
to equity holders of the parent
company, EUR
--------------------------------------------------------------------------------
COMPREHENSIVE CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 7-9/20 7-9/20 1-9/20 1-9/20 1-12/2
12 11 12 11 011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net result for the period 2,473 1,723 1,439 1,415 2,826
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Change in translation difference 40 -67 9 -45 -28
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPREHENSIVE RESULT FOR THE PERIOD 2,513 1,656 1,448 1,370 2,798
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net result to equity 2,513 1,656 1,448 1,370 2,798
holders of the parent companyt
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 30.9.2012 30.9.2011 31.12.2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NON-CURRENT ASSETS
--------------------------------------------------------------------------------
Tangible assets 21,202 11,798 14,966
--------------------------------------------------------------------------------
Intangible assets 2,515 2,540 2,296
--------------------------------------------------------------------------------
Available-for-sale financial assets 16 16 16
--------------------------------------------------------------------------------
Deferred tax assets 495 197 140
--------------------------------------------------------------------------------
24,228 14,551 17,418
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CURRENT ASSETS
--------------------------------------------------------------------------------
Inventories 19,777 21,449 21,348
--------------------------------------------------------------------------------
Trade and other receivables 7,480 7,884 7,680
--------------------------------------------------------------------------------
Current tax assets 779 566 514
--------------------------------------------------------------------------------
Cash and cash equivalents 2,272 3,260 1,620
--------------------------------------------------------------------------------
30,308 33,159 31,162
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSETS, TOTAL 54,536 47,710 48,580
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT COMPANY
--------------------------------------------------------------------------------
Share capital 8,040 8,040 8,040
--------------------------------------------------------------------------------
Translation differences -9 -35 -18
--------------------------------------------------------------------------------
Retained earnings 21,658 23,230 24,641
--------------------------------------------------------------------------------
Shareholders' equity, total 29,689 31,235 32,663
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NON-CURRENT LIABILITIES
--------------------------------------------------------------------------------
Deferred tax liabilities 522 633 630
--------------------------------------------------------------------------------
Financial liabilities 16,435 5,360 4,944
--------------------------------------------------------------------------------
16,957 5,993 5,574
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CURRENT LIABILITIES
--------------------------------------------------------------------------------
Trade and other payables 7,827 10,482 10,328
--------------------------------------------------------------------------------
Current tax liabilities - - 15
--------------------------------------------------------------------------------
Financial liabilities 63 - -
--------------------------------------------------------------------------------
7,890 10,482 10,343
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities, total 24,847 16,475 15,917
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES, TOTAL 54,536 47,710 48,580
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Group has no liabilities resulting from derivative contracts, and there are
no outstanding guarantees or any other contingent liabilities which have been
granted on behalf of the management of the company or its shareholders.
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1,000) 1-9/2012 1-9/2011 1-12/2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net profit for the period 1,439 1,415 2,826
--------------------------------------------------------------------------------
Adjustments
--------------------------------------------------------------------------------
Depreciation according to plan 2,529 1,450 2,216
--------------------------------------------------------------------------------
Unrealised exchange rate gains - - -416
--------------------------------------------------------------------------------
Financial income and expenses 298 47 -187
--------------------------------------------------------------------------------
Taxes 269 421 890
--------------------------------------------------------------------------------
Cash flow before change in working capital 4,535 3,333 5,329
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in working capital -210 -4,086 -3,454
--------------------------------------------------------------------------------
Increase (-) / decrease (+) in current 688 -1,646 -969
non-interest-bearing trade receivables
--------------------------------------------------------------------------------
Increase (-) / decrease (+) in inventories 1,571 -4,276 -4,175
--------------------------------------------------------------------------------
Increase (+) / decrease (-) in current -2,469 1,836 1,690
non-interest-bearing liabilities
--------------------------------------------------------------------------------
Cash flow from operating activities before 4,325 -753 1,875
financial items and taxes
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paid interest and payments on other -188 -90 129
financial expenses
--------------------------------------------------------------------------------
Interest received -93 44 66
--------------------------------------------------------------------------------
Taxes paid -1,505 -1,017 -1,419
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES 2,539 -1,816 651
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Investments in tangible and intangible assets -5,609 -5,529 -9,220
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES -5,609 -5,529 -9,220
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Long-term loans drawn 8,144 5,360 4,944
--------------------------------------------------------------------------------
Dividends paid -4,422 -4,422 -4,422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES 3,722 938 522
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in cash and cash equivalents 652 -6,407 -8,047
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the 1,620 9,667 9,667
period
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the 2,272 3,260 1,620
period
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(EUR 1,000) Equity attributable to equity holders of the
parent company
-------------------------------------------------------------------------------- Share Translatio Retaine Shareholde
capital n d rs'
difference earning equity,
s s total
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 1 Jan. 2011 8,040 10 26,237 34,287
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Comprehensive result
--------------------------------------------------------------------------------
Net result for the period 1,415 1,415
--------------------------------------------------------------------------------
Translation differences -45 -45
--------------------------------------------------------------------------------
Total comprehensive result for the -45 1,415 1,370
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividends paid -4,422 -4,422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 30 Sept. 2011 8,040 -35 23,230 31,235
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 1 Jan. 2012 8,040 -18 24,641 32,663
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Comprehensive result
--------------------------------------------------------------------------------
Net result for the period 1,439 1,439
--------------------------------------------------------------------------------
Translation differences 9 9
--------------------------------------------------------------------------------
Total comprehensive result for the 9 1,439 1,448
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividends paid -4,422 -4,422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 30 Sept. 2012 8,040 -9 21,658 29,689
--------------------------------------------------------------------------------
KEY FIGURES
1-9/201 1-9/201 Change, 1-12/201
2 1 % 1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.18 0.18 - 0.35
--------------------------------------------------------------------------------
Equity per share, EUR 3.69 3.88 -4.9 4.06
--------------------------------------------------------------------------------
Return on equity (ROE), % 6.2 5.8 8.4
--------------------------------------------------------------------------------
Return on investment (ROI), % 6.0 7.2 11.4
--------------------------------------------------------------------------------
Equity ratio, % 54.4 65.5 67.2
--------------------------------------------------------------------------------
Gearing, % 47.9 6.7 10.2
--------------------------------------------------------------------------------
Gross investments, EUR 1,000 5,609 5,529 1.4 9,220
--------------------------------------------------------------------------------
Gross investments, % of net sales 8.9 10.3 11.9
--------------------------------------------------------------------------------
Contingent liabilities, EUR 1,000 37,321 19,555 90.9 27,610
--------------------------------------------------------------------------------
Average personnel 481 393 22.4 402
--------------------------------------------------------------------------------
Personnel at the end of the period 482 405 19.0 434
--------------------------------------------------------------------------------
Number of shares at the end of the period 8,040 8,040 8,040
(1,000)
--------------------------------------------------------------------------------
Number of shares outstanding, average 8,040 8,040 8,040
(1,000)
--------------------------------------------------------------------------------
SEGMENT INFORMATION
(EUR 1,000) 1-9/2012 1-9/2011 Change, % 1-12/2011
------------------------------------------------------------
------------------------------------------------------------
Marimekko business
------------------------------------------------------------
Net sales 62,723 53,861 16.5 77,442
------------------------------------------------------------
Operating result 2,006 1,883 6.5 3,528
------------------------------------------------------------
Assets 54,536 47,710 14.3 48,580
------------------------------------------------------------
QUARTERLY TREND IN NET SALES BY MARKET AREA
(EUR 1,000) 7-9/2012 4-6/2012 1-3/2012 10-12/2011 7-9/2011
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Finland 14,278 12,283 10,228 15,617* 12,628*
-------------------------------------------------------------------------------
Retail sales 9,768 8,320 5,816 8,926 7,630
-------------------------------------------------------------------------------
Wholesale sales 4,350 3,836 4,270 6,405 4,817
-------------------------------------------------------------------------------
Royalties 160 127 142 286 181
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Scandinavia 2,066 1,825 1,902 2,210* 1,967*
-------------------------------------------------------------------------------
Retail sales 946 873 536 795 581
-------------------------------------------------------------------------------
Wholesale sales 1,120 952 1,363 1,412 1,386
-------------------------------------------------------------------------------
Royalties - - 3 3 -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Central and Southern Europe 2,167 1,693 2,048 1,821* 1,694*
-------------------------------------------------------------------------------
Retail sales 366 360 340 418 333
-------------------------------------------------------------------------------
Wholesale sales 1,777 1,306 1,680 1,375 1,333
-------------------------------------------------------------------------------
Royalties 24 27 28 28 28
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
North America 2,214 1,468 1,252 2,152* 1,118*
-------------------------------------------------------------------------------
Retail sales 1,198 614 466 972 -
-------------------------------------------------------------------------------
Wholesale sales 915 646 677 910 996
-------------------------------------------------------------------------------
Royalties 101 208 109 270 122
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Asia-Pacific 3,489 2,432 3,378 1,781* 2,405*
-------------------------------------------------------------------------------
Retail sales - - - - -
-------------------------------------------------------------------------------
Wholesale sales 3,488 2,432 3,376 1,781 2,397
-------------------------------------------------------------------------------
Royalties 1 - 2 - 8
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TOTAL 24,214 19,701 18,808 23,581 19,812
-------------------------------------------------------------------------------
* Due to adjustments made in internal sales reporting structures, the
previously reported sales figures by market area have changed.
NET SALES BY PRODUCT LINE
(EUR 1,000) 7-9/ 7-9/ Change, % 1-9/ 1-9/ Change, % 1-12/
2012 2011 2012 2011 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Clothing 9,189 7,571 21.4 23,125 20,534 12.6 28,351
--------------------------------------------------------------------------------
Interior 9,146 7,782 17.5 25,422 22,289 14.1 34,003
decoration
--------------------------------------------------------------------------------
Bags 5,879 4,459 31.8 14,176 11,038 28.4 15,088
--------------------------------------------------------------------------------
TOTAL 24,214 19,812 22.2 62,723 53,861 16.5 77,442
--------------------------------------------------------------------------------
QUARTERLY TREND IN NET SALES AND EARNINGS
(EUR 1,000) 7-9/2012 4-6/2012 1-3/2012 10-12/2011
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 24,214 19,701 18,808 23,581
-----------------------------------------------------------------
Operating result 3,486 -545 -935 1,645
-----------------------------------------------------------------
Earnings per share, EUR 0.31 -0.03 -0.10 0.18
-----------------------------------------------------------------
-----------------------------------------------------------------
(EUR 1,000) 7-9/2011 4-6/2011 1-3/2011 10-12/2010
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 19,812 16,815 17,234 22,074
-----------------------------------------------------------------
Operating result 2,321 -798 360 2,188
-----------------------------------------------------------------
Earnings per share, EUR 0.21 -0.07 0.04 0.21
-----------------------------------------------------------------
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