Stockmann - Interim report (Q1 and Q3)

Stockmann Group’s Interim Report 1 January - 31 March 2015

Many strategic steps taken - comparable revenue up, earnings still down on 2014

Helsinki, Finland, 2015-04-29 07:00 CEST (GLOBE NEWSWIRE) -- STOCKMANN plc,
Interim Report 29.4.2015 at 8:00 EET 

January-March 2015:
Consolidated revenue was EUR 380.4 million (EUR 395.6 million), down 3.8 per
cent, or up 3.6 per cent at comparable exchange rates. 
Operating result before depreciation (EBITDA) was EUR -29.5 million (EUR -25.7
million). 
Operating result was EUR -49.9 million (EUR -43.9 million).
Result for the period was EUR -56.2 million (EUR -40.1 million).
Earnings per share came to EUR -0.78 (EUR -0.56).

As of 1 January 2015, Stockmann's real estate properties have been measured at
their fair values, which increases e.g. the Group's non-current assets and
equity in the balance sheet, depreciation and equity ratio. The revaluation is
not applied retrospectively for 2014. 

The outlook for 2015 remains unchanged: Due to planned structural changes,
Stockmann expects the Group's revenue in 2015 to be down on 2014. The operating
result excluding non-recurring items is expected to improve, but to remain
negative in 2015 due to the performance of the Stockmann Retail division.
Operating results for the Real Estate and Fashion Chains divisions are expected
to be positive. 

CEO Per Thelin:
Stockmann's turnaround back to profit has begun and several strategic steps
have already been taken. Achieving our targets will take time, but there are
signs that we are moving in the right direction. Stockmann's revenue at
comparable exchange rates was up in the first quarter, and our department
stores gained market share in our biggest product area, fashion. In Finland we
achieved a good result in the Crazy Days campaign with sales growth in all of
our focus areas; fashion, cosmetics, food and home. We have also received
positive customer feedback on the improved service and new activities in the
department stores. 

Stockmann's new Real Estate division quickly got down to work. The first
electronics store run by a tenant, Expert, will open in less than a month in
the Helsinki flagship department store. We are working on introducing other new
tenants to our store premises, in order to bring added value to the customer.
Real Estate's first-quarter operating result was positive and up on 2014. 

Seppälä's divestment took place on 1 April, and we are now focusing on our
other fashion chain, Lindex. An important milestone for Lindex to be a truly
international fashion brand was achieved in March when the first Lindex store
opened in London, UK. Overall, Lindex continued its stable performance during
the first quarter. 

Many structural measures and cost savings are being planned and taken. Four
department stores, one in Oulu and three in Moscow, will be closed down. We
have launched an efficiency programme which targets annual cost savings of EUR
50 million. All these measures are needed, as the Group's first-quarter
operating result was still down on the previous year. The decline was partly
due to increased depreciation. The very weak Russian rouble also continued to
negatively affect our operations. Despite this, I am confident that we are on
the right track and that the effects of the new strategy will gradually start
to show in our performance. 

Key figures

                                                   1-3/2015  1-3/2014  1-12/2014
Revenue, EUR mill.                                    380.4     395.6    1 844.5
Revenue growth, per cent                               -3.8      -8.3       -9.5
Gross margin, per cent                                 45.1      45.5       46.6
Operating result, EUR mill.                           -49.9     -43.9      -82.2
Net financial costs, EUR mill.                          5.3       5.5       21.4
Result before tax, EUR mill.                          -55.1     -49.3     -103.6
Result for the period, EUR mill.                      -56.2     -40.1      -99.8
Earnings per share, undiluted, EUR                    -0.78     -0.56      -1.39
Equity per share, EUR                                 14.65     11.44      10.55
Cash flow from operating activities, EUR mill.        -65.2    -112.9       29.6
Capital expenditure, EUR mill.                         16.5       9.4       53.8
Net gearing, per cent                                  84.3     107.8      105.4
Equity ratio, per cent                                 43.9      39.9       39.3
Number of shares, undiluted, weighted average, 1     72 049    72 049     72 049
 000 pc                                                                         
Return on capital employed,                            -4.7       2.8       -4.9
rolling 12 months, per cent                                                     
Personnel, average                                   14 026    14 302     14 533


Strategy process

Stockmann continues the comprehensive turnaround of its business according to
the strategic direction set in late 2014. As of 1 January 2015, Stockmann has
been using a new reporting structure in order to better reflect the different
business logics in the retail and real estate businesses. The new reporting
segments are Stockmann Retail, Real Estate and Fashion Chains. Stockmann's goal
is to change the company's legal structure in line with the new operating
structure, and therefore the possibility of incorporating real estate and
retail operations into separate subsidiaries is being investigated. 

Stockmann Retail consists of the Stockmann department stores, the Academic
Bookstore, Hobby Hall and their online stores. The division has an omnichannel
focus on the Stockmann department stores and the stockmann.com online store,
while a new owner is being sought for the Hobby Hall distance retail business.
The future selection of the Stockmann department stores and the online store
will have a stronger focus on fashion, cosmetics, home products and food in
Stockmann Delicatessen. To enhance the customer experience, the offering will
be complemented with attractive goods and services from tenants. 

As an important part of the turnaround, Stockmann launched an efficiency
programme in February 2015 with an annual cost savings target of EUR 50
million. The programme includes various measures to improve the profitability
and competitiveness of Stockmann's core businesses. A significant share of the
cost savings is expected to be achieved through personnel reductions which may
affect up to 420 people in support functions in 2015 and 2016. In Finland,
codetermination negotiations have been started on the potential reduction of at
most 260 people in 2015. In Russia, 70 positions will be reduced during 2015.
As a part of the programme, Stockmann decided in April to close down its
department store in Oulu, Finland, at the latest in early 2017 and three
department stores in the Mega shopping centres in Moscow by the end of 2016. 

The Real Estate division comprises the Group's real estate holdings in
Helsinki, St Petersburg, Tallinn and Riga which are used by the Stockmann
department stores and external tenants. Stockmann has decided to withdraw from
its own electronics offering and to lease retail space in its department stores
to Expert ASA Oy. Expert will open its store in the Helsinki city centre store
in May, in Turku in June and in Tampere in September 2015. 

The Fashion Chains division comprises Lindex and until 1 April 2015 also
Seppälä, which was sold to Seppälä's CEO and her husband. The transaction was
completed on 1 April 2015 according to the memorandum of understanding signed
on 2 February 2015. Lindex's operations will be developed independently of the
rest of the Stockmann Group, under its own Board of Directors. 

Press and analyst briefing
A press and analyst briefing in Finnish will be held today, on 29 April 2015 at
9:15 a.m. at the Fazer À la Carte restaurant on the 8th floor of Stockmann's
Helsinki city centre department store, Aleksanterinkatu 52. 

Webcast
CEO Per Thelin and CFO Pekka Vähähyyppä will host a webcast in English on 29
April 2015, at 11:15 a.m. EET presenting the Interim Report. To participate in
the webcast, please dial one of the numbers below 5-10 minutes before the call
begins. The presentation can be followed by this linkor on the address
stockmanngroup.com. 

Finland: +358 9 2310 1619
Sweden: +46 8 5065 3935
United Kingdom: +44 20 3427 1921
Germany: +49 69 2222 10635
France: +33 1 76 77 22 32
United States of America: +1646 254 3371

Confirmation code: 8765076

Further information:
Per Thelin, CEO, tel. +358 9 121 5801
Pekka Vähähyyppä, CFO, tel. +358 9 121 3351
Nora Malin, Director, Corporate Communications, tel. +358 9 121 3558

www.stockmanngroup.com


STOCKMANN plc

Per Thelin
CEO


Distribution:
Nasdaq Helsinki
Principal media

Attachments:

OVK Q1 2015 ENG.pdf