2012-05-09 07:30:00 CEST
2012-05-09 07:30:12 CEST
REGULATED INFORMATION
Marimekko - Interim report (Q1 and Q3)
MARIMEKKO CORPORATION’S INTERIM REPORT, 1 JANUARY - 31 MARCH 2012
Marimekko Corporation, Interim Report, 9 May 2012 at 8.30 a.m.
During the January-March period of 2012, the Marimekko Group's net sales grew
by 9 per cent and international sales by 26 per cent. Operating result was low,
as expected, due to seasonality, structural changes and increased costs related
to the expansion of business operations. Net sales and operating profit
guidance for the full year 2012 remains unchanged. The increased share of
retail sales adds to the seasonality of the business, and thus the operating
profit is expected to be generated entirely in the second half of the year.
1Q of 2012
-- Net sales grew by 9.1% to EUR 18.8 million (17.2).
-- International sales rose by 25.7% to EUR 8.6 million (6.8). Strong
growth in sales in the Asia-Pacific region continued; sales rose by
36.7%. Sales in North America grew by 82.5% from low levels
.
-- Sales in Finland fell by 1.7% to EUR 10.2 million (10.4) due to a
decline in wholesale sales.
-- Operating result amounted to EUR -0.9 million (0.4).
The decline in earnings was due to a decrease in wholesale sales in Finland
and Scandinavia as well as increased costs and depreciation.
-- Investments were EUR 2.2 million (1.6).
-- Brand sales* grew by 9.4% to EUR 42.5 million (38.9).
Market outlook and growth targets
The new stores opened during 2011 and other significant investments in the
expansion of the distribution network will generate a substantial sales
increase in 2012. In addition, the company aims to open 10 to 20 new stores
during this year, about half of which would be owned by Marimekko.
The planned total investments for 2012 of the Marimekko Group are estimated as
being in excess of EUR 6 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 expected to be generated
entirely in the second half of the year.
Key indicators
1-3/2012 1-3/2011 Change, % 1-12/2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 18,808 17,234 9.1 77,442
--------------------------------------------------------------------------------
proportion of international sales, % 45.6 39.6 35.8
--------------------------------------------------------------------------------
EBITDA -164 780 5,744
--------------------------------------------------------------------------------
Operating result, EUR 1,000 -935 360 3,528
--------------------------------------------------------------------------------
Operating result margin -5.0 2.1 4.6
--------------------------------------------------------------------------------
Result for the period, EUR 1,000 -820 284 2,826
--------------------------------------------------------------------------------
Earnings per share, EUR -0.10 0.04 0.35
--------------------------------------------------------------------------------
Cash flow from operating activities, -2,518 -1,936 651
EUR 1,000
--------------------------------------------------------------------------------
Return on investment (ROI), % -9.0 3.5 11.4
--------------------------------------------------------------------------------
Equity ratio, % 57.8 78.6 67.2
--------------------------------------------------------------------------------
Personnel at the end of the period 470 396 18.7 434
--------------------------------------------------------------------------------
outside Finland 70 27 63
--------------------------------------------------------------------------------
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Brand sales*, EUR 1,000 42,510 38,868 9.4 168,557
--------------------------------------------------------------------------------
proportion of international sales, % 59.8 51.9 47.5
--------------------------------------------------------------------------------
Number of retail stores and 91 85 7.1 90
shop-in-shops**
--------------------------------------------------------------------------------
* 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. The 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 38 (28). Information on changes is available in the section
Internationalisation and changes in the store network.
Mika Ihamuotila, President and CEO:
“The trend of the first quarter was very much in line with our expectations.
Net sales were up by 9% and international sales by 26%. In the United States,
the trend in retail sales was as we anticipated and we will step up our efforts
in opening new company-owned stores this year. The dynamic trend in sales that
prevailed throughout last year in the Asia-Pacific region continued. In our
view, this enormous market area still has plenty of business opportunities for
us. At the beginning of the year, we signed a partnership agreement with the
aim of opening 15 Marimekko stores in China by the end of 2016. The first of
these opened in Hong Kong a week ago. We also continue to invest in growth in
Northern Europe. During the period under review, we opened one company-owned
store in Finland. After the review period, we opened our third own store in
Stockholm in April and next week we will open a company-owned store in
Gothenburg, Sweden.
“Our profitability in the first quarter of the year is typically weak as a
consequence of seasonally low net sales in relation to operating expenses and
especially profits from retail sales operations are generated predominantly in
the last quarter of the year. This trend is particularly pronounced this year
when the share of retail sales in our net sales is larger than before. Our
operating result for the first quarter was EUR -0.9 million (0.4).
“Although uncertainty continues in the international economic climate, I am
optimistic about Marimekko's prospects. Last year, we created a basis by which
we can expect strong sales growth and a clear improvement in profit this year.
Therefore the substantial investments in international growth in compliance
with our strategy will continue.”
Financial calendar 2012
The interim report for January-June will be issued on Tuesday, 14 August 2012
at 8.30 a.m., and for January-September on Tuesday, 30 October 2012 at 8.30
a.m.
For additional information, contact:
Mika Ihamuotila, President and CEO, tel. +358 9 758 71
Thomas Ekström, Chief Financial Officer, tel. +358 9 758 7261
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 - 31 March 2012
MARKET SITUATION
The overall uncertainty about the global economy continues, and this may impact
consumers' purchasing behaviour in all markets. The world economy is
anticipated to be driven by the growing Asian countries and the economic
forecasts for the US are better than in Europe. European states' severe loan
crisis is still the main threat, which may turn the global economic trend in a
distinctly worse direction. Recently, there have been fears of the debt crisis
coming to a head, particularly in Spain and Italy. The German economy is also
drifting into recession. The weak trend in Europe has a downward effect on
Sweden's growth figures too, and Finland's exports to Sweden have done poorly
recently. In Finland, the economy is forecast to recover in the period
2012-2013. Companies' profitability looks fairly good in spite of the difficult
economic conditions and, as a result of improved competitiveness and equity
ratios, companies in the domestic market are now less vulnerable to cyclic
variations. (Confederation of Finnish Industries EK: Economy Review, Climate,
17 April 2012)
In the year's internal trend between sectors, the retail trade maintained its
growth best. From January to March 2012, retail sales in Finland grew by 4.9%
(Statistics Finland: Turnover of Trade 2012, advance figures, March). In the
January-February period of 2012, clothing retail sales (excluding sportswear)
rose by 7.2% (Textile and Fashion Industries TMA). Sales of women's clothing
grew by 5.4%, menswear by 8.8% and children's clothing by 11.1%. Sales of bags
were up by 0.6%. From January to February 2012, clothing (SITC 84) exports grew
by 18% and imports by 6%; textile (SITC 65) exports grew by 10% and imports by
2% (National Board of Customs, monthly review, February 2012).
INTERNATIONALISATION AND CHANGES IN THE STORE NETWORK
Substantial investments in internationalisation continue this year. In the
Asia-Pacific region, the company is entering the Chinese market. The country's
long-lasting economic growth and the development of the consumer market so that
there is clearly room for new and interesting brands make the market
attractive. In January, Marimekko reported that it had signed a partnership
agreement with Hong Kong-based Sidefame Ltd. The aim of the partnership is for
15 Marimekko stores to be opened in China by the end of 2016.
In February, Marimekko reported that it was expanding its operations in all
main market areas and was aiming to open 10 to 20 new stores this year. Seven
of these have been confirmed. The time the others reach fruition will depend on
finding suitable retail premises, and the openings will largely be in the
second half of the year. On the basis of positive feedback from Northern Europe
and the United States, Marimekko will invest more in expanding its network of
company-owned stores. This will alter the relative proportions of wholesale and
retail sales to some extend and it will tie up more of the company's capital
and resources.
During the period under review, one company-owned store was opened at the Sello
mall in Espoo in the wider Helsinki area. After the end of the review period,
two stores were opened: a company-owned store in Stockholm in April and a
retailer-owned Marimekko store in Hong Kong in May. Also in May, a
company-owned store will open in Gothenburg, Sweden.
Number of retail stores and shop-in-shops 31 March 2012 31 Dec. 2011
----------------------------------------------------------------------
----------------------------------------------------------------------
Finland 43 42
----------------------------------------------------------------------
Own retail stores 27 26
----------------------------------------------------------------------
Scandinavia 10 10
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Own retail stores 5 5
----------------------------------------------------------------------
Central and Southern Europe 5 5
----------------------------------------------------------------------
Own retail stores 4 4
----------------------------------------------------------------------
North America 11 11
----------------------------------------------------------------------
Own retail stores 2 2
----------------------------------------------------------------------
Asia-Pacific 22 22
----------------------------------------------------------------------
Own retail stores - -
----------------------------------------------------------------------
----------------------------------------------------------------------
TOTAL 91 90
----------------------------------------------------------------------
Own retail stores 38 37
----------------------------------------------------------------------
NET SALES
In the January-March period of 2012, the Marimekko Group's net sales, fuelled
by growth in international sales, were up by 9.1% to EUR 18,808 thousand
(17,234).
In Finland, net sales fell by 1.7%. Retail sales were up by 21.2%, but
wholesale sales declined by 21.9%.
International sales grew by 25.7%. Retail sales were up by 89.8% and wholesale
sales by 15.9%.
NET SALES BY MARKET AREA
(EUR 1,000) 1-3/2012 1-3/2011 Change, % 1-12/2011
---------------------------------------------------------------------
---------------------------------------------------------------------
Finland 10,228 10,410* -1.7 49,807*
---------------------------------------------------------------------
Retail sales 5,816 4,798 21.2 28,267
---------------------------------------------------------------------
Wholesale sales 4,270 5,465 -21.9 20,584
---------------------------------------------------------------------Royalties 142 147 -3.4 956
---------------------------------------------------------------------
---------------------------------------------------------------------
Scandinavia 1,902 1,889* 0.7 7,518*
---------------------------------------------------------------------
Retail sales 536 414 29.5 2,241
---------------------------------------------------------------------
Wholesale sales 1,363 1,472 -7.4 5,269
---------------------------------------------------------------------
Royalties 3 3 0.0 8
---------------------------------------------------------------------
---------------------------------------------------------------------
Central and Southern Europe 2,048 1,778* 15.2 6,691*
---------------------------------------------------------------------
Retail sales 340 293 16.0 1,394
---------------------------------------------------------------------
Wholesale sales 1,680 1,457 15.3 5,183
---------------------------------------------------------------------
Royalties 28 28 0.0 114
---------------------------------------------------------------------
---------------------------------------------------------------------
North America 1,252 686* 82.5 4,960*
---------------------------------------------------------------------
Retail sales 466 - 972
---------------------------------------------------------------------
Wholesale sales 677 720 -6.0 3,430
---------------------------------------------------------------------
Royalties 109 -34 558
---------------------------------------------------------------------
---------------------------------------------------------------------
Asia-Pacific 3,378 2,471* 36.7 8,466*
---------------------------------------------------------------------
Retail sales - - -
---------------------------------------------------------------------
Wholesale sales 3,376 2,471 36.6 8,458
---------------------------------------------------------------------
Royalties 2 - 8
---------------------------------------------------------------------
---------------------------------------------------------------------
International sales, total 8,580 6,824* 25.7 27,635*
---------------------------------------------------------------------
Retail sales 1,342 707 89.8 4,607
---------------------------------------------------------------------
Wholesale sales 7,096 6,120 15.9 22,340
---------------------------------------------------------------------
Royalties 142 -3 688
---------------------------------------------------------------------
---------------------------------------------------------------------
TOTAL 18,808 17,234 9.1 77,442
---------------------------------------------------------------------
* Due to adjustments made in internal sales reporting structures, the
previously reported sales figures by market area have changed.
Finland
In the January-March period of 2012, sales in Finland fell by 1.7% to EUR
10,228 thousand. Retail sales were up by 21.2%. Sales were boosted by the three
stores opened in the last quarter of 2011 as well as by a new store opened
during the period under review. The comparable growth in sales by company-owned
stores was 9.7%. Wholesale sales fell by 21.9%. This was partly due to changes
effected in the distribution network in accordance with the company's
distribution strategy and differences in the timing of deliveries compared to
the same period last year.
Scandinavia
Sales in Scandinavia grew by 0.7% to EUR 1,902 thousand. Retail sales were up
by 29.5%. Three stores opened in 2011 boosted retail sales. The comparable
growth in sales by company-owned stores was -27.1%. Wholesale sales fell by
7.4%. Consumers' purchasing behaviour continued to be cautious in all countries
and especially in Sweden. A small improvement was in sight, as after a weak
trend lasting for a year, the Swedish fashion market bottomed out in March.
Central and Southern Europe
In Central and Southern Europe, net sales rose to EUR 2,048 thousand, up by
15.2% on the previous year. Sales grew in all company-owned stores; retail
sales were up by 16.0%. The small company-owned store opened in London at the
end of 2011 also contributed to the sales growth. Wholesale sales rose by
15.3%. Sales were particularly brisk in Belgium and Germany. The weak economic
situation in Italy impacted consumer demand and sales took a downturn.
North America
Net sales in North America grew by 82.5% to EUR 1,252 thousand. Measured in the
invoicing currency (mostly the US dollar), growth was roughly 76%. A major
share of the growth was generated by the net sales of the flagship store in New
York. Wholesale sales were below expectations and declined by 6.0%.
The Asia-Pacific region
By far the most positive trends were recorded in the Asia-Pacific region. The
strong trend in sales seen last year continued into the first quarter of this
year. Sales grew by 36.7% to EUR 3,378 thousand. Sales were above expectations
in all countries. The majority of the growth came from Japan. Sales were also
boosted by the initial inventory purchases of the new store in Hong Kong.
Efforts were stepped up in Australia and, as a result, sales there also grew.
Strong growth in sales fuels confidence in growing interest in the company's
products in this market area.
FINANCIAL RESULT
The Group's financial result for the first quarter of the year is typically
weak as a consequence of seasonally low net sales in relation to operating
expenses and especially profits from retail sales operations are generated
predominantly in the last quarter of the year. This was emphasised during the
review period as the share of retail sales in net sales was larger than before.
In the January-March period of 2012, the Group's operating result was EUR -935
thousand (360). A decline in wholesale sales in Finland and Scandinavia also
had a negative impact on the result. The fall in wholesale sales in Finland was
partly due to changes made in the distribution network and differences in the
timing of deliveries compared to the same period last year. In addition, the
result was burdened by the increased costs of the country organisations in the
United States and Sweden and the design and service organisation at the
Helsinki head office.
Marketing expenses during the period were EUR 1,024 thousand (1,051), or 5.4%
(6.1) of the Group's net sales.
As a result of considerable investments, the Group's depreciation grew to EUR
771 thousand (420), which represented 4.1% (2.4) of net sales.
The operating result margin decreased to -5.0% (2.1).
Net financial expenses were EUR 205 thousand (23), or 1.1% (0.1) of net sales.
Result for the review period before taxes was EUR -1,140 thousand (337). Result
after taxes was EUR -820 thousand (284) and earnings per share were EUR -0.10
(0.04).
BALANCE SHEET
The consolidated balance sheet at 31 March 2012 amounted to EUR 54,849 thousand
(44,049). Total equity attributable to the equity holders of the parent company
was EUR 31,815 thousand (34,583), or EUR 3.96 per share (4.30).
Non-current assets were EUR 22,449 thousand (11,454 on 31 March 2011; 17,418 on
31 December 2011). The end-March tangible assets include the present value of
future lease payments for the new 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 March totalled EUR 20,805 thousand, which was
EUR 3,132 thousand more than a year ago and EUR 2,108 thousand more than at the
end of 2011.
CASH FLOW AND FINANCING
Cash flow from operating activities in the 1Q of 2012 was EUR -2,518 thousand
(-1,936), representing EUR -0.31 per share (-0.24). Cash flow before financing
activities was EUR -4,737 thousand (-3,536).
Financial liabilities were EUR 13,447 thousand at the end of the reporting
period compared to EUR 0 a year ago and EUR 4,944 thousand at the end of 2011.
Financial liabilities include the present value of future lease payments for
the new 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 1,944 thousand at the end of the first
quarter (6,131 on 31 March 2011; 1,620 on 31 December 2011). Additionally, the
Group had unused committed credit lines amounting to EUR 6,995 thousand
(4,000).
The Group's equity ratio was 57.8% at the end of the period (78.6 on 31 March
2011; 67.2 on 31 December 2011). Gearing was 36.2%, while it was -17.7% at the
end of the corresponding period of the previous year.
INVESTMENTS
The Group's gross investments amounted to EUR 2,219 thousand (1,600),
representing 11.8% (9.3) of net sales. Most of the investments were devoted to
building new stores and renovating the Herttoniemi property.
MANAGEMENT
A subsidiary, Marimekko PTY Ltd, was established in Australia in the review
period.
PERSONNEL
In the January-March period of 2012, the number of employees averaged 452
(395). At the end of the period, the Group employed 470 (396), of whom 70 (27)
worked outside Finland. The breakdown of the number of employees working abroad
by market area was as follows: Scandinavia 20 (14), Central and Southern Europe
13 (12), North America 35 (1) and Asia-Pacific 2 (0).
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 6,976 (6,957) shareholders
at the end of the period. Of the shares, 12.7% (13.9) were registered in a
nominee's name and 15.9% (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 1,163,930 (1,168,940), representing 14.5%
(14.5) 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 31 March 2012:
Number of shares Percentage of holding
and votes and votes
--------------------------------------------------------------------------------
1. Muotitila Ltd 1,127,700 14.03
--------------------------------------------------------------------------------
2. Semerca Investment Ltd 850,377 10.58
--------------------------------------------------------------------------------
3. ODIN Finland 408,099 5.08
--------------------------------------------------------------------------------
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 220,000 2.74
Company
--------------------------------------------------------------------------------
7. KEVA 169,016 2.10
--------------------------------------------------------------------------------
8. Nordea Nordic Small Cap Fund 101,500 1.26
--------------------------------------------------------------------------------
9. Nordea Finland Small Cap Fund 70,897 0.88
--------------------------------------------------------------------------------
10. Mutual Fund Tapiola Finland 66,395 0.82
--------------------------------------------------------------------------------
Total 3,665,323 45.59
--------------------------------------------------------------------------------
Nominee-registered 1,023,701 12.73
--------------------------------------------------------------------------------
Others 3,350,976 41.68
--------------------------------------------------------------------------------
Total 8,040,000 100.00
--------------------------------------------------------------------------------
Authorisations
At the end of the period, the Board of Directors had no valid authorisations to
carry out share issues or issue convertible bonds or bonds with warrants, or to
acquire or surrender Marimekko shares.
Share trading and the company's market capitalisation
During the period, a total of 372,129 Marimekko shares were traded,
representing 4.6% of the shares outstanding. The total value of Marimekko's
share turnover was EUR 4,755,443. The lowest price of the Marimekko share was
EUR 9.92, the highest was EUR 14.33 and the average price was EUR 12.89. At the
end of the period, the closing price of the share was EUR 13.50. The company's
market capitalisation on 31 March 2012 was EUR 108,540,000 (112,962,000 on 31
March 2011; 79,435,200 on 31 December 2011).
MAJOR EVENTS AFTER THE CLOSE OF THE REVIEW PERIOD
Decisions of the Annual General Meeting
The Annual General Meeting of Marimekko Corporation on 17 April 2012 adopted
the financial statements for 2011 and discharged the members of the Board of
Directors, the CEO and the CEO's deputy from liability. The Annual General
Meeting approved the Board of Directors' proposal to pay a dividend of EUR 0.55
per share for the 2011 financial year, totalling EUR 4,422,000. The dividend
payment record date was 20 April 2012 and the dividend payment date was 3 May
2012.
The number of members of the Board of Directors was confirmed as six. Elina
Björklund, Arthur Engel, Ami Hasan, Mika Ihamuotila, Joakim Karske and Pekka
Lundmark were re-elected to the Board. Pekka Lundmark serves as chairman and
Mika Ihamuotila as deputy chairman. The term in office of the members of the
Board of Directors lasts until the closing of the Annual General Meeting
following the one at which they were elected. It was decided to pay the members
of the Board of Directors emoluments as follows: EUR 30,000 to the chairman and
EUR 20,000 to the other members.
The Annual General Meeting voted to re-elect PricewaterhouseCoopers Oy,
Authorised Public Accountants, as the company's auditor and that the auditor's
fee would be paid as per invoice. Kim Karhu, Authorised Public Accountant,
continues as chief auditor.
The Annual General Meeting authorised the Board of Directors to decide on adirected 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.
Personnel share offering
The Board of Directors has, pursuant to the authorisation granted by the Annual
General Meeting of Shareholders held on 17 April 2012, decided to arrange a
share issue in which new shares in the company are offered for subscription to
the personnel and to designers employed by the company on a freelance basis.
In the personnel share offering, a maximum total of 150,000 new shares in the
company will, in deviation from the shareholders' pre-emptive right, be offered
for subscription to the company's personnel and designers. Each employee will
be entitled to subscribe new shares at two different subscription prices. The
share subscription price for the first 50 shares to be subscribed will be the
prevailing quotation of the share on NASDAQ OMX Helsinki Ltd at that time,
determined by the Board of Directors, less 50%. The share subscription price
for shares to be subscribed after the first 50 shares will be the prevailing
quotation of the share on NASDAQ OMX Helsinki Ltd at that time, determined by
the Board of Directors, less 10%. The minimum subscription is 20 shares. The
intention is that, in the event of oversubscription, small subscriptions will
be prioritised over large individual subscriptions.
The Board of Directors will decide on the final subscription price of the
shares to be offered, on the share subscription period, on payment of
subscriptions and on other detailed terms and conditions approximately in
August-September 2012. Flaggings
SEB Asset Management S.A.'s share of Marimekko Corporation's share capital and
voting rights declined to 1.64%, or 132,152 shares, due to a stock loan on 11
April 2012. The maturity date of the stock loan is not known to the company.
MAJOR RISKS AND FACTORS OF UNCERTAINTY
Key strategic risks assessed by Marimekko are associated with general economic
development 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 outlook 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, with an
emphasis on 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 the market areas,
which will exert a substantial drag on the cost-effectiveness of the company,
especially in the early stages. Moreover, expanding the network of
company-owned stores will raise the company's investments, lease liabilities of
store premises and inventories. From this follows that a larger portion of
Group net sales comes from sales by the company's own retail stores, which adds
to the seasonality of the business and thus shifts the weight of net sales and
profit accumulation to the last quarter and has a negative impact on the first
quarter profitability. Furthermore, growth through partnerships in some of the
company's key market areas also includes risks related to long-term partnership
commitments and the selection of partners.
The company's ability to develop and commercialise new products that meet
consumers' expectations whilst maintaining profitable and effective in-house
production has an impact on the company's sales and profitability.
Among the company's key operational risks are 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 introducing 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 and other significant investments in the
expansion of the distribution network will generate a substantial sales
increase in 2012. In addition, the company aims to open 10 to 20 new stores
during this year, about half of which would be owned by Marimekko.
The planned total investments for 2012 of the Marimekko Group are estimated as
being in excess of EUR 6 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 expected to be generated
entirely in the second half of the year.
Helsinki, 9 May 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, 31 March
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 - trade and other payables
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 1-3/2012 1-3/2011 Change, % 1-12/2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET SALES 18,808 17,234 9.1 77,442
--------------------------------------------------------------------------------
Other operating income 1 2 -50.0 2
--------------------------------------------------------------------------------
Increase or decrease in inventories of - -1,931 -2,353
completed and unfinished products
--------------------------------------------------------------------------------
Raw materials and consumables 7,063 8,116 -13.0 30,287
--------------------------------------------------------------------------------
Employee benefit expenses 5,703 4,668 22.2 20,030
--------------------------------------------------------------------------------
Depreciation 771 420 83.6 2,216
--------------------------------------------------------------------------------
Other operating expenses 6,207 5,603 10.8 23,736
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPERATING RESULT -935 360 3,528
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 6 13 246
--------------------------------------------------------------------------------
Financial expenses -211 -36 -59
--------------------------------------------------------------------------------
-205 -23 187
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RESULT BEFORE TAXES -1,140 337 3,715
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -320 53 889
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET RESULT FOR THE PERIOD -820 284 2,826
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net result to equity -820 284 2,826
holders of the parent company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Basic and diluted earnings per share -0.10 0.04 0.35
calculated on the result attributable
to
equity holders of the parent company,
EUR
--------------------------------------------------------------------------------
COMPREHENSIVE CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 1-3/2012 1-3/2011 1-12/2011
-------------------------------------------------------------------
-------------------------------------------------------------------
Net result for the period -820 284 2,826
-------------------------------------------------------------------
Other comprehensive income
-------------------------------------------------------------------
Change in translation difference -28 12 -28
-------------------------------------------------------------------
-------------------------------------------------------------------
COMPREHENSIVE RESULT FOR THE PERIOD -848 296 2,798
-------------------------------------------------------------------
-------------------------------------------------------------------
Distribution of net result to equity -848 296 2,798
holders of the parent company
-------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 31.3.2012 31.3.2011 31.12.2011
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
ASSETS
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
NON-CURRENT ASSETS
-----------------------------------------------------------------------------
Tangible assets 20,163 10,386 14,966
-----------------------------------------------------------------------------
Intangible assets 2,008 1,048 2,296
-----------------------------------------------------------------------------
Available-for-sale financial assets 16 20 16
-----------------------------------------------------------------------------
Deferred tax assets 262 - 140
-----------------------------------------------------------------------------
22,449 11,454 17,418
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
CURRENT ASSETS
-----------------------------------------------------------------------------
Inventories 21,654 18,981 21,348
-----------------------------------------------------------------------------
Trade and other receivables 8,293 7,483 7,680
-----------------------------------------------------------------------------
Current tax assets 509 - 514
-----------------------------------------------------------------------------
Cash and cash equivalents 1,944 6,131 1,620
-----------------------------------------------------------------------------
32,400 32,595 31,162
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
ASSETS, TOTAL 54,849 44,049 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 -46 22 -18
-----------------------------------------------------------------------------
Retained earnings 23,821 26,521 24,641
-----------------------------------------------------------------------------
Shareholders' equity, total 31,815 34,583 32,663
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
NON-CURRENT LIABILITIES
-----------------------------------------------------------------------------
Deferred tax liabilities 430 645 630
-----------------------------------------------------------------------------
Financial liabilities 13,380 - 4,944
-----------------------------------------------------------------------------
13,810 645 5,574
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
CURRENT LIABILITIES
-----------------------------------------------------------------------------
Trade and other payables 9,142 8,791 10,328
-----------------------------------------------------------------------------
Current tax liabilities 15 30 15
-----------------------------------------------------------------------------
Financial liabilities 67 - -
-----------------------------------------------------------------------------
9,224 8,821 10,343
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Liabilities, total 23,034 9,466 15,917
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES, TOTAL 54,849 44,049 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) 1-3/2012 1-3/2011 1-12/2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net result for the period -820 284 2,826
--------------------------------------------------------------------------------
Adjustments
--------------------------------------------------------------------------------
Depreciation according to plan 771 420 2,216
--------------------------------------------------------------------------------
Unrealised exchange rate gains - - -416
--------------------------------------------------------------------------------
Financial income and expenses 205 23 -187
--------------------------------------------------------------------------------
Taxes -320 53 890
--------------------------------------------------------------------------------
Cash flow before change in working capital -164 780 5,329
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in working capital -2,097 -2,282 -3,454
--------------------------------------------------------------------------------
Increase (-) / decrease (+) in current -359 -688 -969
non-interest-bearing trade receivables
--------------------------------------------------------------------------------
Increase (-) / decrease (+) in inventories -307 -1,808 -4,175
--------------------------------------------------------------------------------
Increase (+) / decrease (-) in current -1,431 214 1,690
non-interest-bearing liabilities
--------------------------------------------------------------------------------
Cash flow from operating activities before -2,261 -1,502 1,875
financial items and taxes
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paid interest and payments on other -211 -36 129
financial expenses
--------------------------------------------------------------------------------
Interest received 6 13 66
--------------------------------------------------------------------------------
Taxes paid -52 -411 -1,419
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES -2,518 -1,936 651
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Investments in tangible and intangible assets -2,219 -1,600 -9,220
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES -2,219 -1,600 -9,220
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Long-term loans drawn 5,061 - 4,944
--------------------------------------------------------------------------------
Dividends paid - - -4,422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES 5,061 - 522
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in cash and cash equivalents 324 -3,536 -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 1,944 6,131 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 profit for the period 284 284
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Translation differences 12 12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive result for the 22 284 296
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid - -
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 31 March 2011 8,040 22 26,521 34,583
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 1 Jan. 2012 8,040 -18 24,641 32,663
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Comprehensive result
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net result for the period -820 -820
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Translation differences -28 -28
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive result for the -46 -820 -848
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid - -
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 31 March 2012 8,040 -46 23,821 31,815
--------------------------------------------------------------------------------
KEY FIGURES
1-3/2012 1-3/2011 Change, % 1-12/2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR -0.10 0.04 0.35
--------------------------------------------------------------------------------
Equity per share, EUR 3.96 4.30 -7.9 4.06
--------------------------------------------------------------------------------
Return on equity (ROE), % -10.2 3.3 8.4
--------------------------------------------------------------------------------
Return on investment (ROI), % -9.0 3.5 11.4
--------------------------------------------------------------------------------
Equity ratio, % 57.8 78.6 67.2
--------------------------------------------------------------------------------
Gearing, % 36.2 -17.7 10.2
--------------------------------------------------------------------------------
Gross investments, EUR 1,000 2,219 1,600 38.7 9,220
--------------------------------------------------------------------------------
Gross investments, % of net sales 11.8 9.3 11.9
--------------------------------------------------------------------------------
Contingent liabilities, EUR 1,000 26,971 19,592 27,610
--------------------------------------------------------------------------------
Average personnel 452 395 14.4 402
--------------------------------------------------------------------------------
Personnel at the end of the period 470 396 18.7 434
--------------------------------------------------------------------------------
Number of shares at the end of the 8,040 8,040 8,040
period
(1,000)
--------------------------------------------------------------------------------
Number of shares outstanding, average 8,040 8,040 8,040
(1,000)
--------------------------------------------------------------------------------
SEGMENT INFORMATION
(EUR 1,000) 1-3/2012 1-3/2011 Change, % 1-12/2011
------------------------------------------------------------
------------------------------------------------------------
Marimekko business
------------------------------------------------------------
Net sales 18,808 17,234 9.1 77,442
------------------------------------------------------------
Operating result -935 360 3,528
------------------------------------------------------------
Assets 54,849 44,049 24.5 48,580
------------------------------------------------------------
QUARTERLY TREND IN NET SALES BY MARKET AREA
(EUR 1,000) 1-3/2012 10-12/2011 7-9/2011 4-6/2011 1-3/2011
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Finland 10,228 15,617* 12,628* 11,153* 10,410*
-------------------------------------------------------------------------------
Retail sales 5,816 8,926 7,630 6,914 4,798
-------------------------------------------------------------------------------
Wholesale sales 4,270 6,405 4,817 3,897 5,465
-------------------------------------------------------------------------------
Royalties 142 286 181 342 147
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Scandinavia 1,902 2,210* 1,967* 1,452* 1,889*
-------------------------------------------------------------------------------
Retail sales 536 795 581 999 414
-------------------------------------------------------------------------------
Wholesale sales 1,363 1,412 1,386 451 1,472
-------------------------------------------------------------------------------
Royalties 3 3 - 2 3
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Central and Southern Europe 2,048 1,821* 1,694* 1,398* 1,778*
-------------------------------------------------------------------------------
Retail sales 340 418 333 1,018 293
-------------------------------------------------------------------------------
Wholesale sales 1,680 1,375 1,333 350 1,457
-------------------------------------------------------------------------------
Royalties 28 28 28 30 28
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
North America 1,252 2,152* 1,118* 1,004* 686*
-------------------------------------------------------------------------------
Retail sales 466 972 - 804 -
-------------------------------------------------------------------------------
Wholesale sales 677 910 996 - 720
-------------------------------------------------------------------------------
Royalties 109 270 122 200 -34
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Asia-Pacific 3,378 1,781* 2,405* 1,809* 2,471*
-------------------------------------------------------------------------------
Retail sales - - - - -
-------------------------------------------------------------------------------
Wholesale sales 3,376 1,781 2,397 1,809 2,471
-------------------------------------------------------------------------------
Royalties 2 - 8 - -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TOTAL 18,808 23,581 19,812 16,815 17,234
-------------------------------------------------------------------------------
* 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) 1-3/2012 1-3/2011* Change, % 1-12/2011
--------------------------------------------------------------
--------------------------------------------------------------
Clothing 6,978 7,091 -1.6 28,351
--------------------------------------------------------------
Interior decoration 7,833 6,918 13.2 34,003
--------------------------------------------------------------
Bags 3,997 3,225 23.9 15,088
--------------------------------------------------------------
TOTAL 18,808 17,234 9.1 77,442
--------------------------------------------------------------
* Due to adjustments made in internal sales reporting structures, the
previously reported sales figures by product line have changed.
QUARTERLY TREND IN NET SALES AND EARNINGS
(EUR 1,000) 1-3/2012 10-12/2011 7-9/2011 4-6/2011
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 18,808 23,581 19,812 16,815
-----------------------------------------------------------------
Operating result -935 1,645 2,321 -798
-----------------------------------------------------------------
Earnings per share, EUR -0.10 0.18 0.21 -0.07
-----------------------------------------------------------------
-----------------------------------------------------------------
(EUR 1,000) 1-3/2011 10-12/2010 7-9/2010 4-6/2010
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 17,234 22,074 19,468 15,747
-----------------------------------------------------------------
Operating result 360 2,188 4,170 588
-----------------------------------------------------------------
Earnings per share, EUR 0.04 0.21 0.38 0.05
-----------------------------------------------------------------
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