2012-02-10 07:30:00 CET
2012-02-10 07:30:13 CET
REGULATED INFORMATION
Marimekko - Financial Statement Release
MARIMEKKO CORPORATION'S FINANCIAL STATEMENT BULLETIN, 1 JANUARY - 31 DECEMBER 2011
Marimekko Corporation, Financial Statement Bulletin, 10 February 2012 at 8.30
a.m.
MARIMEKKO CORPORATION'S FINANCIAL STATEMENT BULLETIN, 1 JANUARY - 31 DECEMBER
2011
During 2011, the Marimekko Group's net sales grew by 6 per cent and
international sales by 26 per cent. Investments in expansion bore fruit during
the last quarter of the year. Year 2012 will be a time for considerable growth
and improved profitability.
Financial year 2011
-- Net sales grew by 5.7% to EUR 77.4 million (EUR 73.3 million).
-- International sales grew very strongly: net sales rose by 25.9% to EUR
27.7 million (EUR 22.0 million). The growth was driven by the Asia-Pacific region where sales rose by 49.3%.
Sales also grew vigorously in Central and Southern Europe as well as
North America.
The opening of new stores had a positive impact on sales in
Scandinavia.
-- Sales in Finland fell by 3.0% to EUR 49.7 million (EUR 51.3 million).
The decline was entirely due to changes made in the distribution network
in accordance with the company's distribution strategy and a significant
decrease in deliveries for promotions.
Comparable sales in company-owned retail stores grew by 4.1%.
-- Operating profit fell as expected and amounted to EUR 3.5 million (EUR 8.2
million).
The result was burdened by changes made in the distribution network in
accordance with the company's distribution strategy, a substantial decrease
in deliveries for promotions and considerable investments in
internationalisation. During the last quarter of the year, however, the
situation took a
noticeable
turn for the better.
-- Investments were substantial compared with the previous year, amounting to
EUR 9.2 million (EUR 1.5 million).
-- Brand sales* grew briskly, by 12.6%, and amounted to EUR 168.6 million (EUR
149.7 million).
-- The Board of Directors will propose to the Annual General Meeting that a
dividend of EUR 0.55 (EUR 0.55) per share be paid for 2011.
4Q of 2011
Net sales grew by 6.8% to EUR 23.6 million (EUR 22.1 million).
-- International sales rose by 36.7% to EUR 8.0 million (EUR 5.9 million).
Sales grew in all market areas.
The strongest growth was seen in North America - sales in the New York
store which opened during the quarter exceeded expectations.
-- Sales in Finland fell by 4.0% to EUR 15.6 million (EUR 16.2 million).
Retail sales rose by 19.9%, while wholesale sales declined by 26.2%.
-- Operating profit amounted to EUR 1.6 million (EUR 2.2 million). T
he trend in earnings took a
noticeable
turn for the better. The decline in earnings was entirely due to changes
made in the distribution network and a significant decrease in deliveries
for promotions.
Market outlook and growth targets
The negative effects of the structural problems of the international financial
markets on general economic trends dampen the outlook for retail sales and make
it difficult to predict consumers' purchasing behaviour.
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 2012, 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 Marimekko Group's net sales are estimated to grow by over 10% in 2012 and
operating profit is forecast to at least double.
Key performance indicators
1-12/2011 1-12/2010 Change, %
-------------------------------------------------------------------------------
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Net sales, EUR 1,000 77,442 73,297 5.7
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Operating profit, EUR 1,000 3,528 8,169 -56.8
-------------------------------------------------------------------------------
Profit for the financial year, EUR 1,000 2,826 6,072 -53.5
-------------------------------------------------------------------------------
Earnings per share, EUR 0.35 0.76 -53.9
-------------------------------------------------------------------------------
Cash flow from operating activities, EUR 1,000 651 4,559
-------------------------------------------------------------------------------
Return on investment (ROI), % 11.4 25.0
-------------------------------------------------------------------------------
Equity ratio, % 67.2 78.8
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Brand sales*, EUR 1,000 168,557 149,717 12.6
-------------------------------------------------------------------------------
Number of retail stores and shop-in-shops** 90 84 7.1
-------------------------------------------------------------------------------
* 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
(previously “concept stores”) and shop-in-shops with an area exceeding 30 sqm.
The company's own retail stores numbered 37 (28). Information is available in
the reviews by business unit on the changes per market area.
Mika Ihamuotila, President and CEO:
“I am very pleased with our progress in 2011: we took several bold steps on the
way to international growth. I am proud of our employees because all planned
measures, as substantial as they were considering the company's size - such as
opening numerous new stores and launching new products, starting e-commerce in
the United States and tripling our textile printing capacity in Finland - were
completed on schedule. In 2011, we created the prerequisites for considerable
sales growth and a significant improvement in earnings in 2012. "During 2011, the Marimekko Group's net sales grew by 6% and international
sales by 26%. The growth was driven by the Asia-Pacific region, where sales
grew by as much as 49%. We are convinced that this enormous market area has
plenty more business opportunities - this year we are going to the Chinese
market. In 2011, sales also grew well in North America as well as in Central
and Southern Europe. We were especially delighted with the enthusiastic
reception received by our flagship store in New York, whose sales clearly
exceeded our expectations. As a result, this year we will invest even more in
opening company-owned stores in the United States. "In Finland, our net sales decreased by 3% due to the changes we made in the
distribution network in accordance with our strategy and a reduction in our
participation in promotions. With these changes, we seek sales growth and
improved profitability. "Our operating profit fell as expected and amounted to EUR 3.5 million (EUR 8.2
million). The result was burdened by changes in the distribution network and a
decrease in deliveries for promotions as well as considerable investments in
internationalisation. During the last quarter of the year, however, the
situation took a noticeable turn for the better, although the changes made in
the distribution network and the decrease in deliveries for promotions
continued to burden profitability. Earnings for the last quarter were improved
by the significant increase in sales generated by the new company-owned stores
opened in Finland and abroad, especially in the United States, as well as
growth in comparable retail sales in Finland. Also, regardless of the rise in
raw material costs, sales margins both in wholesale sales and in our own retail
stores improved. "The clear upturn we saw during the last quarter of 2011 was not only
encouraging, but also a sign that our investments in growth have paid off. We
will continue those investments in 2012 and expect this year to be a time of
considerable growth and improved profitability for us. Our aim is to open 10 to
20 new stores, approximately half of which would be company-owned. That will
somewhat change the ratio between wholesale sales and retail sales and also
bind the company's equity and resources more than before. "Regardless of the difficult international economic situation, I am optimistic
about Marimekko's future prospects, because it is evident that the substantial
investments made in 2010 and 2011 are now starting to bear fruit.”
Briefing for the media and analysts
A briefing for the media and analysts will be held concerning this financial
statement bulletin today at 9 a.m. in Marimekko's flagship store in the Kämp
Galleria Shopping Mall, Pohjoisesplanadi 33, Helsinki. The presentation
material is available on the company's website at company.marimekko.com under
Releases/Interim reports and financial statements.
Corporate governance statement
Corporate governance statement 2011 is available on the company's website at
company.marimekko.com under Investors/Management/Corporate governance.
Annual summary 2011
A summary of Marimekko's stock exchange releases published during the 2011
financial year is available on the company's website at company.marimekko.com
under Releases /Annual summaries.
Financial calendar 2012
The Annual Report for 2011 will be published in week 12. The Annual General
Meeting will be held on 17 April 2012 at 2 p.m. The following interim reports
will be published in 2012: January to March, on Wednesday 9 May 2012 at 8:30
a.m.; January to June, on Tuesday 14 August 2012 at 8:30 a.m.; and January to
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
Group Communications
Piia Pakarinen
Tel. +358 9 758 7293
piia.pakarinen@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 430 people. The company's
share is quoted on NASDAQ OMX Helsinki Ltd. www.marimekko.com.
MARIMEKKO CORPORATION‘S FINANCIAL STATEMENT BULLETIN, 1 January - 31 December
2011
MARKET SITUATION
The overall uncertainty about the global economy continues in 2012. The serious
loan crisis in Europe is still the main threat that can cause the global
economy to take a downturn turn. Growth in the European economy is expected to
be close to zero. Even though the world economy is estimated to grow by nearly
3%, driven by growth in Asia, and the latest news on the US economy are
cautiously optimistic, the uncertainty may impact consumers' purchasing
behaviour in all markets,
The current economic situation in Finland is slightly weaker than average, and
there are no signs on the horizon of the economy taking a turn for the better.
The outlook for the next six months is downbeat, and the general economic
situation is expected to continue to weaken. Slow sales growth is anticipated
for retail trade. (Confederation of Finnish Industries EK: Business Tendency
Survey, February 2012) The Federation of Finnish Commerce estimates that retail
sales will grow by 0.5% (the Federation of Finnish Commerce, outlook for
2012-2013).
In 2011, the value of retail sales in Finland rose by 2.4% (Statistics Finland:
Turnover of trade 2011, December). Retail sales of clothing (excluding
sportswear) grew by 1.6% (Textile and Fashion Industries TMA). Sales of
womenswear rose by 1.5% and sales of menswear by 3.4%. Sales of childrenswear
fell by 0.7%. Sales of bags rose by 5.9%. In the January-November period of
2011, exports of clothing (SITC 84) rose by 20% and imports by 16%; exports of
textiles (SITC 65) grew by 5% and imports by 9% (National Board of Customs,
monthly review, November 2011).
NET SALES
Financial year 2011
In 2011, the Marimekko Group's net sales increased by 5.7% to EUR 77,442
thousand (EUR 73,297 thousand), thanks to growth in international sales.
In Finland, net sales declined by 3.0% to EUR 49,715 thousand (EUR 51,277
thousand). Retail sales grew by 6.5%; sales were boosted by new stores opened
during the year. Comparable retail sales grew by 4.1%. Wholesale sales fell by
16.0%. The decline in wholesale sales was attributable to changes in the
distribution network, made in accordance with the company's distribution
strategy, and a decrease in deliveries for promotions.
International sales grew very well, by 25.9% to EUR 27,727 thousand (EUR 22,020
thousand). Sales grew vigorously in the Asia-Pacific region (49.3%) and in
Central and Southern Europe (27.4%), mainly thanks to a favourable trend in
wholesale sales. New stores which opened at the end of 2010 and during 2011
also increased sales significantly in these market areas. Sales in North
America grew vigorously, by 24.6%, thanks to unexpectedly good sales in the New
York flagship store and the new Marimekko shop-in-shops opened by Crate and
Barrel. When measured in the invoicing currency (mainly the US dollar), sales
in North America showed growth of about 33%. Sales in Scandinavia grew by 6.6%.
International sales represented 35.8% (30.0%) of the Group's net sales. As for
brand sales, 47.5% of the sales came from abroad (44.9%). Net sales by market
area were: Finland 64.2%, Scandinavia 9.7%, Central and Southern Europe 8.6%,
North America 6.5% and Asia-Pacific 11.0%. The breakdown of the Group's net
sales by product line was as follows: clothing 36.6%, interior decoration 43.9%
and bags 19.5%.
4Q of 2011
In the October-December period of 2011, the Marimekko Group's net sales rose by
6.8% to EUR 23,581 thousand (EUR 22,074 thousand).
In Finland, net sales declined by 4.0% to EUR 15,561 thousand (EUR 16,205
thousand). Retail sales grew by 19.9%; sales were boosted significantly by new
company-owned stores opened during the quarter. Comparable sales by Marimekko's
own retail stores grew by 10.8%. Wholesale sales fell by 26.2%. The decline was
attributable to changes in the distribution network and a decrease in
deliveries for promotions.
International sales grew strongly, by 36.7% to EUR 8,020 thousand (EUR 5,869
thousand). The sales trend in Marimekko's own retail stores was convincing in
every market: sales rose in all stores and the new stores, especially the
flagship store in New York, contributed significantly to the sales growth.
Wholesale sales grew particularly well in North America.
REVIEWS BY BUSINESS UNIT
Finland
In 2011, sales in Finland decreased by 3.0% to EUR 49,715 thousand (EUR 51,277
thousand). Marimekko's retail sales, i.e. sales by Marimekko's own retail
stores in Finland, rose by 6.5%. Three new stores opened during 4Q contributed
to the rise in sales. Comparable sales in the company-owned retail stores grew
by 4.1%. Wholesale sales decreased by 16.0%. The decline was partly
attributable to changes in the distribution network, made in accordance with
the company's distribution strategy. Another factor behind the decline in
wholesale sales was the fact that the revenues generated from deliveries for
individual promotions were very low compared with the previous year. By cutting
down on price-led promotions, the company aims to further improve the average
sales margin and the brand's pricing power. The factors mentioned above
particularly affected sales of interior decoration products, which declined
somewhat. Sales of clothing and bags grew slightly.
Scandinavia
Sales in Scandinavia (previously “the other Nordic countries”) grew by 6.6% to
EUR 7,512 thousand (EUR 7,045 thousand). During 3Q, new company-owned retail
stores were opened in Copenhagen and Stockholm. Marimekko's first own retail
store in Oslo was opened in October. Consumers' purchasing behaviour was
cautious in all of the countries, but especially in Denmark, where general
distrust with regard to development of national economy and government
increased. Without the new stores, the trend in sales in Scandinavia would have
been considerably weaker. Sales of clothing and bags grew somewhat, while sales
of interior decoration products were at the same level as the year before.
Central and Southern Europe
In Central and Southern Europe (previously “the rest of Europe”), net sales
rose to EUR 6,687 thousand, up 27.4% on the previous year (EUR 5,248 thousand).
Sales growth was seen in all product lines. Sales were particularly brisk in
Germany, Belgium and the UK. The increase in sales was partly accounted for by
sales in the retail stores opened in Berlin at the end of 2010. Marimekko's
second company-owned retail store in London was opened at the beginning of
December. In France and Italy too, the sales trend was positive.
North America
Net sales in North America rose by 24.6% to EUR 5,008 thousand (EUR 4,020
thousand). When measured in the invoicing currency (mainly the US dollar),
sales in North America showed growth of about 33%. Very strong growth was seen
in bag sales. Sales of clothes and interior decoration products also grew well.
The new flagship store which opened in New York at the beginning of October
accounted for a significant proportion of the increase in net sales. Sales were
also boosted by seven shop-in-shops which opened in the United States at the
end of 2010 and in 2011. The latest opening was in October in the Miami area.
The Asia-Pacific region
In the Asia-Pacific region (previously “other countries”), net sales grew
extremely well, by 49.3% to EUR 8,520 thousand (EUR 5,707 thousand). Strong
sales growth in all markets in the region builds faith in increasing interest
in the company's products in this market area. In 2011, the region replaced
Scandinavia as the second-largest market for the company. Sales of interior
decoration products rose markedly, and bag sales also grew somewhat. Growth was
particularly strong in clothing sales, thanks to the positive reception of new
collections. The increase in net sales was also partly attributable to the
initial inventory purchases by a new store in Japan as well as the purchases by
the store which opened in Seoul at the end of 2010.
Clothing
In 2011, net sales of clothing rose by 10.3% to EUR 28,351 thousand (EUR 25,703
thousand). Sales grew markedly in the Asia-Pacific region, partly due to
purchases by new stores and successful collections. Sales in other
international markets also grew well. Sales in Finland increased slightly.
International sales accounted for 30.7% of net sales of clothing.
Interior decoration
Net sales of interior decoration products were at the same level as in the
previous year, at EUR 34,003 thousand (EUR 34,028 thousand). Sales grew
strongly in the Asia-Pacific region. Sales also rose in North America and
Central and Southern Europe. Purchases by new stores contributed to the growth.
Sales in Scandinavia were at the same level as the year before. In Finland,
sales of interior decoration products declined somewhat due to changes in the
distribution network and a decrease in deliveries for promotions. International
sales accounted for 39.9% of net sales of interior decoration products.
Bags
Net sales of bags grew by 11.2% to EUR 15,088 thousand (EUR 13,566 thousand).
Sales rose in all market areas. Particularly strong growth was seen in North
America. Sales also grew well in Central and Southern Europe and the
Asia-Pacific region. International sales accounted for 36.0% of net sales of
bags.
Production
During 2011, the output of the Herttoniemi textile printing factory increased
by 28%. Increased staff resources, improved production processes and the fact
that some previously outsourced textile printing was re-insourced contributed
to the rise in output. In October, a new printing machine was introduced, which
tripled the output capacity of the printing factory. The added capacity will be
rolled out in stages. The production volume of the Sulkava factory was at the
same level as in the previous year. The output of the Kitee factory declined
substantially due to changes in the production structure.
EARNINGS
Financial year 2011
In 2011, the Group's operating profit decreased as expected and stood at EUR
3,528 thousand (EUR 8,169 thousand). Profit after taxes was EUR 2,826 thousand
(EUR 6,072 thousand) and earnings per share were EUR 0.35 (EUR 0.76).
Changes in the distribution network, made in accordance with the company's
distribution strategy, and a significant decrease in deliveries for promotions
contributed to the decline in operating profit. Considerable investments in
internationalisation, particularly in the United States, also weakened the
result. In addition, profitability was burdened by increased personnel and raw
material costs and a rise in marketing expenses and the general cost level. The
excellent trend in sales in the Asia-Pacific region had a positive impact on
the result. Growth in comparable retail sales in Finland and sales increase
generated by new stores opened in Finland and abroad also improved the result.
During 4Q, the trend in earnings took a noticeable turn for the better.
The Group's marketing expenses for the year totalled EUR 4,115 thousand (EUR
3,341 thousand), representing 5.3% (4.6%) of net sales. As a result of
considerable investments, the Group's depreciation grew to EUR 2,216 thousand
(EUR 1,478 thousand), representing 2.9% (2.0%) of net sales. Net financial
income totalled EUR 187 thousand (EUR 54 thousand), or 0.2% (0.1%) of net
sales.
4Q of 2011
In the October-December period of 2011, the Group's operating profit amounted
to EUR 1,645 thousand (EUR 2,188 thousand). The decline in operating profit was
entirely due to changes made in the distribution network and a significant
decrease in deliveries for promotions. Earnings were improved by the
substantial increase in sales generated by the new company-owned stores opened
in Finland and abroad, especially in the United States, as well as growth in
comparable retail sales in Finland. Regardless of the rise in raw material
costs, sales margins in both wholesale and retail sales improved. In addition,
marketing expenses fell during 4Q. The positive impact of these factors on the
result far exceeded the costs of the growing country organisation in the United
States.
INVESTMENTS
The Group's gross investments amounted to EUR 9.2 million (EUR 1.5 million),
representing 11.9% (2.1%) of net sales. This amount includes investments in a
new printing machine and renovations of printing facilities (some EUR 1.5
million), the company's e-commerce project (some EUR 1.0 million), building new
store premises and purchasing new furniture, and acquiring and improving
information systems. The total investments of the Group were estimated to stand
at approximately EUR 6.5 million. The estimate was exceeded due to
higher-than-anticipated building costs for some of the new stores,
earlier-than-planned implementation of some projects and renovation costs for
the Herttoniemi property.
EQUITY RATIO AND FINANCING
The Group's equity ratio was 67.2% at the end of the year (78.8% on 31 December
2010). The ratio of interest-bearing liabilities minus financial assets to
shareholders' equity (gearing) was 10.2%, while it was -28.2% at the end of the
previous year.
The Group's financial liabilities stood at EUR 4,944 thousand (EUR 0) at the
end of the financial year. The Group's financial assets at the end of the year
amounted to EUR 1,620 thousand (EUR 9,667 thousand).
SHARES AND SHARE PRICE TREND
Share capital
At the end of the year, 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 6,898 (6,673) shareholders
at the end of the year 2011. Of the shares, 13.6% (15.0%) 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 1,150,930 (1,086,440), representing 14.3%
(13.5%) 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 December
2011
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 406,087 5.05
--------------------------------------------------------------------------------
4. Varma Mutual Employment Pension 385,920 4.80
Insurance Company
--------------------------------------------------------------------------------
5. Keva 330,395 4.11
--------------------------------------------------------------------------------
6. Ilmarinen Mutual Pension 265,419 3.30
Insurance Company
--------------------------------------------------------------------------------
7. Veritas Pension Insurance 218,468 2.72
Company
--------------------------------------------------------------------------------
8. Mutual Fund Tapiola Finland 66,395 0.82
--------------------------------------------------------------------------------
9. Foundation for Economic 50,000 0.62
Education
--------------------------------------------------------------------------------
10. Investment Fund SEB Gyllenberg 50,000 0.62
Small Firm
--------------------------------------------------------------------------------
Total 3,750,761 46.65
--------------------------------------------------------------------------------
Nominee-registered 1,092,098 13.58
--------------------------------------------------------------------------------
Others 3,197,141 39.77
--------------------------------------------------------------------------------
Total 8,040,000 100.00
--------------------------------------------------------------------------------
Flaggings
SEB Asset Management S.A.'s share of Marimekko Corporation's share capital and
voting rights declined to 2.05%, or 164,560 shares, due to a stock loan on 19
April 2011, and reverted to 5.77%, or 464,152 shares at the termination of the
stock loan on 10 May 2011.
Authorisations
At the end of the financial year, 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
During 2011, a total of 1,103,125 Marimekko shares were traded, representing
13.7% of the shares outstanding. The total value of Marimekko's share turnover
was EUR 14,398,456. The lowest price of the Marimekko share was EUR 9.62, the
highest was EUR 15.90 and the average price was EUR 12.97. At the end of the
year, the final price of the share was EUR 9.88. The company's market
capitalisation on 31 December 2011 was EUR 79,435,200 (EUR 115,776,000 on 31
December 2010).
PERSONNEL
During 2011, the number of employees averaged 402 (376). At the end of the
year, the Group employed 434 (388), of whom 63 (26) worked outside Finland.
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. Trends in the world economy and factors of
uncertainty affect consumers' purchasing behaviour and buying power in all of
the company's market areas. In 2011, the severe problems of the international
financial markets dampened the outlook for retail sales as well as Marimekko's
growth and earnings outlook. Consumers' purchasing behaviour was 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, rental costs of
business premises and inventories. Important partnership agreements and
selection of partners in the company's key market areas also contain risks.
In 2011, several projects related to product development were carried out. 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.
RESEARCH AND DEVELOPMENT
Marimekko's product planning and development costs arise from the design of
collections. Design costs are recorded in expenses.
THE ENVIRONMENT, HEALTH AND SAFETY
Responsibility for the environment and nature is an integral aspect of
Marimekko's business. In environmental matters, the company's business
supervision is largely based on legislation and other regulations. The
Herttoniemi textile printing factory has a valid environmental permit and the
production operations comply with its terms. Marimekko's production processes
do not generate any waste that is classified as hazardous or detrimental to
health. In the interest of monitoring the environmental impact of production
and other business operations, the company develops its operating models and
conducts regular tests on the materials used in products. Cooperation
agreements require Marimekko's subcontractors and other partners to commit
themselves to shouldering their environmental responsibilities. The company
seeks to save energy by developing its production methods, investing in
energy-efficient machinery and equipment, and monitoring energy consumption.
Safety and well-being in the workplace are actively monitored and improved at
Marimekko, in collaboration with the workplace safety committee and
occupational healthcare.
In 2011, Marimekko continued the long-term development of a corporate social
responsibility management system. The company has chosen sourcing and design as
the key areas for the next few years. Marimekko's Annual Report contains a more
extensive report on environmental, health and safety issues. A summary is also
included in each interim report. The framework for reporting is provided by the
G3 guidelines of the Global Reporting Initiative (GRI).
MANAGEMENT GROUP'S LONG-TERM BONUS SYSTEM
The Board of Directors of Marimekko Corporation agreed on 7 February 2011 on
establishing a new long-term bonus system targeted at the company's Management
Group. The purpose of the bonus system is to encourage the Management Group to
operate with a business mentality and to add to the company's value in the long
term in particular. The aim is to combine the owners' and the Management
Group's targets in order to increase the company's value and to elicit the
Management Group's commitment to the company over the span of several years.
DECISIONS OF THE ANNUAL GENERAL MEETING
The decisions of Marimekko Corporation's Annual General Meeting are reported in
the stock exchange release dated 19 April 2011 as well as in the interim report
dated 3 May 2011.
MARIMEKKO TUOTANTO OY'S STATUTORY EMPLOYER-EMPLOYEE NEGOTIATIONS
In spring 2011, Marimekko Corporation's subsidiary Marimekko Tuotanto Oy
conducted statutory employer-employee negotiations concerning the
reorganisation of its warehousing operations in the Herttoniemi district of
Helsinki. Enhancing the efficiency of the warehousing operations and their
consolidation in a single location resulted in the elimination of 11 positions.
MERGER OF SUBSIDIARIES
Marimekko Corporation's fully-owned subsidiaries Marimekko Tuotanto Oy,
Marimekko Kitee Oy and Decembre Oy were merged into the parent company on 31
December 2011.
THE BOARD OF DIRECTORS' PROPOSAL FOR THE DIVIDEND FOR THE 2011 FINANCIAL YEAR
A dividend of EUR 0.55 per share was paid for 2010 to a total of EUR 4,422,000.
The Board of Directors will propose to the Annual General Meeting that a
dividend of EUR 0.55 per share be paid for 2011. The proposed dividends
represent 157.1% of the Group's earnings per share for the financial year. On
31 December 2011, the parent company's distributable funds amounted to EUR
22,014,358.16. The Board will propose 20 April 2012 as the dividend record
date, and 3 May 2012 as the dividend payout date.
MAJOR EVENTS AFTER THE CLOSE OF THE REVIEW PERIOD
Several new stores in China
On 30 January 2012, Marimekko announced a partnership agreement with Hong
Kong-based Sidefame Ltd who specialises in retailing a range of fashion and
lifestyle brands. The aim of the partnership is to open 15 Marimekko stores in
China and Hong Kong by the end of 2016. The first store will be opened in Hong
Kong this year and the next in Shanghai as soon as suitable store premises are
found. According to the agreement, Sidefame will have exclusive rights to
import and retail Marimekko products in China and Hong Kong. Marimekko will,
however, retain rights to e-commerce. Marimekko has had excellent experience
with a similar business model in Japan and South Korea, where there are
currently 22 stores in all.
MARKET OUTLOOK AND GROWTH TARGETS
The negative effects of the structural problems of the international financial
markets on general economic trends dampen the outlook for retail sales and make
it difficult to predict consumers' purchasing behaviour.
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 2012, 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 Marimekko Group's net sales are estimated to grow by over 10% in 2012 and
operating profit is forecast to at least double.
Helsinki, 10 February 2012
MARIMEKKO CORPORATION
Board of Directors
Information presented in the financial statement bulletin has not been audited.
APPENDICES
Accounting principles
Consolidated income statement and comprehensive consolidated income statement
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in shareholders' equity
Key figures
Consolidated net sales by market area and product line
Segment information
Quarterly trend in net sales and earnings
Accounting principles
This financial statement bulletin was prepared in accordance with IAS 34:
Interim Financial Reporting. The same accounting principles were applied as in
the 2010 financial statement. The new or amended standards and interpretations
that have become effective in 2011 and whose contents are presented in the
financial statements for 2010 have had no effect on the information in the
financial statement bulletin.
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 December
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
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 10-12/ 10-12/ 1-12/ 1-12/
2011 2010 2011 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET SALES 23,581 22,074 77,442 73,297
--------------------------------------------------------------------------------
Other operating income - 3 2 16
--------------------------------------------------------------------------------
Increase or decrease in inventories of completed 809 -101 -2,353 -1,173
and unfinished products
--------------------------------------------------------------------------------
Raw materials and consumables 7,478 8,636 30,287 28,496
--------------------------------------------------------------------------------
Employee benefit expenses 5,885 4,852 20,030 17,311
--------------------------------------------------------------------------------
Depreciation 766 370 2,216 1,478
--------------------------------------------------------------------------------
Other operating expenses 6,998 6,132 23,736 19,032
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPERATING PROFIT 1,645 2,188 3,528 8,169
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 203 74 246 83
--------------------------------------------------------------------------------
Financial expenses 31 -8 -59 -29
--------------------------------------------------------------------------------
234 66 187 54
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROFIT BEFORE TAXES 1,879 2,254 3,715 8,223
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes 468 603 889 2,151
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET PROFIT FOR THE PERIOD 1,411 1,651 2,826 6,072
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net profit to equity holders of 1,411 1,651 2,826 6,072
the parent company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Basic and diluted earnings per share calculated 0,18 0.21 0.35 0.76
on the profit attributable to equity holders of
the parent company, EUR
--------------------------------------------------------------------------------
COMPREHENSIVE CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 10-12/ 10-12/ 1-12/ 1-12/
2011 2010 2011 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net result for the period 1,411 1,651 2,826 6,072
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Change in translation difference 17 13 -28 8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPREHENSIVE RESULT FOR THE PERIOD 1,428 1,664 2,798 6,080
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net result to equity holders of 1,428 1,664 2,798 6,080
the parent company
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 30.12.2011 31.12.2010
-------------------------------------------------------------------
-------------------------------------------------------------------
ASSETS
-------------------------------------------------------------------
-------------------------------------------------------------------
NON-CURRENT ASSETS
-------------------------------------------------------------------
Tangible assets 14,966 9,390
-------------------------------------------------------------------
Intangible assets 2,296 869
-------------------------------------------------------------------
Available-for-sale financial assets 16 16
-------------------------------------------------------------------
Deferred tax assets 140 -
-------------------------------------------------------------------
17,418 10,275
-------------------------------------------------------------------
-------------------------------------------------------------------
CURRENT ASSETS
-------------------------------------------------------------------
Inventories 21,348 17,172
-------------------------------------------------------------------
Trade and other receivables 7,680 6,437
-------------------------------------------------------------------
Current tax assets 514 -
-------------------------------------------------------------------
Cash and cash equivalents 1,620 9,667
-------------------------------------------------------------------
31,162 33,276
-------------------------------------------------------------------
-------------------------------------------------------------------
ASSETS, TOTAL 48,580 43,551
-------------------------------------------------------------------
-------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
-------------------------------------------------------------------
-------------------------------------------------------------------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF
THE PARENT COMPANY
-------------------------------------------------------------------
Share capital 8,040 8,040
-------------------------------------------------------------------
Translation differences -18 10
-------------------------------------------------------------------
Retained earnings 24,641 26,237
-------------------------------------------------------------------
Shareholders' equity, total 32,663 34,287
-------------------------------------------------------------------
-------------------------------------------------------------------
NON-CURRENT LIABILITIES
-------------------------------------------------------------------
Deferred tax liabilities 630 651
-------------------------------------------------------------------
Financial liabilities 4,994 -
-------------------------------------------------------------------
5,574 651
-------------------------------------------------------------------
-------------------------------------------------------------------
CURRENT LIABILITIES
-------------------------------------------------------------------
Trade and other payables 10,328 8,583
-------------------------------------------------------------------
Current tax liabilities 15 30
-------------------------------------------------------------------
10,343 8,613
-------------------------------------------------------------------
-------------------------------------------------------------------
Liabilities, total 15,917 9,264
-------------------------------------------------------------------
-------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES, TOTAL 48,580 43,551
-------------------------------------------------------------------
-------------------------------------------------------------------
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) 2011 2010
------------------------------------------------------------------------
------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
------------------------------------------------------------------------
------------------------------------------------------------------------
Net profit for the period 2,826 6,072
------------------------------------------------------------------------
Adjustments
------------------------------------------------------------------------
Depreciation according to plan 2,216 1,478
------------------------------------------------------------------------
Unrealised exchange rate gains -416 -
------------------------------------------------------------------------
Financial income and expenses -187 -54
------------------------------------------------------------------------
Taxes 890 2,151
------------------------------------------------------------------------
Cash flow before change in working capital 5,329 9,647
------------------------------------------------------------------------
------------------------------------------------------------------------
Change in working capital -3,454 -2,452
------------------------------------------------------------------------
Increase (-) / decrease (+) in current -969 -1,193
non-interest-bearing trade receivables
------------------------------------------------------------------------
Increase (-) / decrease (+) in inventories -4,175 -1,943
------------------------------------------------------------------------
Increase (-) / decrease (+) in current 1,690 684
non-interest-bearing liabilities
------------------------------------------------------------------------
Cash flow from operating activities before 1,875 7,195
financial items and taxes
------------------------------------------------------------------------
------------------------------------------------------------------------
Paid interest and payments on other 129 -30
financial expenses
------------------------------------------------------------------------
Interest received 66 81
------------------------------------------------------------------------
Taxes paid -1,419 -2,687
------------------------------------------------------------------------
------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES 651 4,559
------------------------------------------------------------------------
------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
------------------------------------------------------------------------
------------------------------------------------------------------------
Investments in tangible and intangible assets -9,220 -1,519
------------------------------------------------------------------------
------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES -9,220 -1,519
------------------------------------------------------------------------
------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
------------------------------------------------------------------------
------------------------------------------------------------------------
Long-term loans drawn 4,944 -
------------------------------------------------------------------------
Dividends paid -4,422 -3,618
------------------------------------------------------------------------
------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES 522 -3,618
------------------------------------------------------------------------
------------------------------------------------------------------------
Change in cash and cash equivalents -8,047 -578
------------------------------------------------------------------------
------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 9,667 10,245
------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 1,620 9,667
------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(EUR 1,000) Equity attributable to equity holders of the
parent company
--------------------------------------------------------------------------------
Share Translatio Retained Shareholder
capital n earnings s'
difference equity,
s total
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 1 Jan. 8,040 2 23,783 31,825
2010
--------------------------------------------------------------------------------
Comprehensive result for the 8 6,072 6,080
period
--------------------------------------------------------------------------------
Dividends paid -3,618 -3,618
--------------------------------------------------------------------------------
Shareholders' equity 8,040 10 26,237 34,287
31 Dec. 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 1 Jan. 8,040 10 26,237 34,287
2011
--------------------------------------------------------------------------------
Comprehensive result for the -28 2,826 2,798
period
--------------------------------------------------------------------------------
Dividends paid -4,422 -4,422
--------------------------------------------------------------------------------
Shareholders' equity 8,040 -18 24,641 32,663
31 Dec. 2011
--------------------------------------------------------------------------------
KEY FIGURES
1-12/2011 1-12/2010 Change, %
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Earnings per share, EUR 0.35 0.76 -53.9
--------------------------------------------------------------------------
Equity per share, EUR 4.06 4.26 -4.7
--------------------------------------------------------------------------
Return on equity (ROE), % 8.4 18.4
--------------------------------------------------------------------------
Return on investment (ROI), % 11.4 25.0
--------------------------------------------------------------------------
Equity ratio, % 67.2 78.8
--------------------------------------------------------------------------
Gearing, % 10.2 -28.2
--------------------------------------------------------------------------
Gross investments, EUR 1,000 9,220 1,519
--------------------------------------------------------------------------
Gross investments, % of net sales 11.9 2.1
--------------------------------------------------------------------------
Contingent liabilities, EUR 1,000 27,610 11,147 147.7
--------------------------------------------------------------------------
Average personnel 402 375 6.9
--------------------------------------------------------------------------
Personnel at the end of the period 434 388 11.9
--------------------------------------------------------------------------
Number of shares at the end of the period 8,040 8,040
(1,000)
--------------------------------------------------------------------------
Number of shares outstanding, average 8,040 8,040
(1,000)
--------------------------------------------------------------------------
NET SALES BY MARKET AREA
(EUR 1,000) 10-12/ 10-12/ Change, % 1-12/ 1-12/ Change, %
2011 2010* 2011 2010*
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Finland 15,561 16,205 -4.0 49,715 51,277 -3.0
--------------------------------------------------------------------------------
Scandinavia 2,218 1,761 26.0 7,512 7,045 6.6
--------------------------------------------------------------------------------
Central and Southern 1,821 1,421 28.1 6,687 5,248 27.4
Europe
--------------------------------------------------------------------------------
North America 2,173 1,341 62.0 5,008 4,020 24.6
--------------------------------------------------------------------------------
Asia-Pacific 1,808 1,346 34.3 8,520 5,707 49.3
--------------------------------------------------------------------------------
TOTAL 23,581 22,074 6.8 77,442 73,297 5.7
--------------------------------------------------------------------------------
* Due to adjustments made in the review period in internal sales reporting
structures, the previously reported sales figures by market area have changed.
NET SALES BY PRODUCT LINE
(EUR 1,000) 10-12/ 10-12/ Change, % 1-12/ 1-12/ Change, %
2011 2010* 2011 2010*
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Clothing 7,817 6,316 23.8 28,351 25,703 10.3
-------------------------------------------------------------------------
Interior decoration 11,714 12,109 -3.3 34,003 34,028 -0.1
-------------------------------------------------------------------------
Bags 4,050 3,649 11.0 15,088 13,566 11.2
-------------------------------------------------------------------------
TOTAL 23,581 22,074 6.8 77,442 73,297 5.7
-------------------------------------------------------------------------
* Due to adjustments made in the review period in internal sales reporting
structures, the previously reported sales figures by product line have changed.
SEGMENT INFORMATION
(EUR 1,000) 2011 2010
----------------------------------
----------------------------------
Marimekko business
----------------------------------
Net sales 77,442 73,297
----------------------------------
Operating profit 3,528 8,169
----------------------------------
Assets 48,580 43,551
----------------------------------
QUARTERLY TREND IN NET SALES AND EARNINGS
(EUR 1,000) 10-12/2011 7-9/2011 4-6/2011 1-3/2011
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 23,581 19,812 16,815 17,234
-----------------------------------------------------------------
Operating result 1,645 2,321 -798 360
-----------------------------------------------------------------
Earnings per share, EUR 0.18 0.21 -0.07 0.04
-----------------------------------------------------------------
-----------------------------------------------------------------
(EUR 1,000) 10-12/2010 7-9/2010 4-6/2010 1-3/2010
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 22,074 19,468 15,747 16,008
-----------------------------------------------------------------
Operating result 2,188 4,170 588 1,223
-----------------------------------------------------------------
Earnings per share, EUR 0.21 0.38 0.05 0.12
-----------------------------------------------------------------
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