2012-08-14 07:30:01 CEST
2012-08-14 07:30:11 CEST
REGULATED INFORMATION
Marimekko - Interim report (Q1 and Q3)
MARIMEKKO CORPORATION’S INTERIM REPORT, 1 JANUARY - 30 JUNE 2012
Marimekko Corporation, Interim Report, 14 August 2012 at 8.30 a.m.
During the January-June period of 2012, the Marimekko Group's net sales grew by
13 percent and international sales by 28 percent. 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 forecasts
for the full year 2012 remain unchanged.
January to June
-- Net sales grew by 13.1% to EUR 38.5 million (34.0).
-- International sales grew by 28.1% to EUR 16.0 million (12.5). Strong
growth in the Asia-Pacific region continued and sales rose by 35.7%.
Growth in North America amounted to 60.9%.
-- Sales in Finland rose by 4.4% with strong growth in retailing, reaching
EUR 22.5 million (21.6).
-- Operating result was EUR -1.5 million (-0.4). A drag on earnings was
exerted by a decrease in wholesale sales in Finland, North America and
Scandinavia, increased costs of the Helsinki head office and the country
organizations in the United States and Sweden, and a rise in depreciation.
-- Cash flow from operating activities was EUR -0.5 million (-2.3).
-- Investments were EUR 3.9 million (3.2).
-- Brand sales* grew by 4.2%, reaching EUR 83.2 million (79.8).
April to June
-- Net sales grew by 17.2% to EUR 19.7 million (16.8).
-- Operating result was EUR -0.5 million (-0.8).
-- Cash flow from operating activities was EUR 2.0 million (-0.4).
Market outlook and growth targets
The new stores opened during 2011 will, together with other significant
investments in the expansion of the distribution network, generate a
substantial increase in sales in 2012. In addition, the company aims to open
between 10 and 20 new stores during this year, about half of which would be
owned by Marimekko. Four stores were opened in the first half of the year; the
number of openings scheduled for the second half of the year has currently been
confirmed as 14. This total of 18 new Marimekko stores is divided as follows:
11 company-owned stores, four retailer-owned stores and three shop-in-shops.
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 will be generated entirely in the
second half of the year.
Key indicators
4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/
2012 2011 ,% 2012 2011 ,% 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 19,701 16,815 17.2 38,509 34,049 13.1 77,442
--------------------------------------------------------------------------------
proportion of 37.7 33.7 41.5 36.7 35.8
international
sales, %
--------------------------------------------------------------------------------
EBITDA, EUR 1,000 283 -302 119 478 -75.1 5,744
--------------------------------------------------------------------------------
Operating result, EUR -545 -798 31.7 -1,480 -438 3,528
1,000
--------------------------------------------------------------------------------
Operating result -2.8 -4.7 -3.8 -1.3 4.6
margin, %
--------------------------------------------------------------------------------
Result for the period, -214 -592 63.9 -1,034 -308 2,826
EUR 1,000
--------------------------------------------------------------------------------
Earnings per share, EUR -0.03 -0.07 -0.13 -0.04 0.35
--------------------------------------------------------------------------------
Cash flow from 1,988 -361 -530 -2,297 76.9 651
operating activities,
EUR 1,000
--------------------------------------------------------------------------------
Return on investment -2.6 1.0 -6.4 -2.5 11.4
(ROI), %
--------------------------------------------------------------------------------
Equity ratio, % 49.7 71.1 67.2
--------------------------------------------------------------------------------
Personnel at the end of 493 385 28.1 434
the period
--------------------------------------------------------------------------------
outside Finland 75 27 63
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brand sales*, EUR 1,000 40,689 40,942 -0.6 83,200 79,812 4.2 168,557
--------------------------------------------------------------------------------
proportion of 56.3 44.7 58.1 48.2 47.5
international
sales, %
--------------------------------------------------------------------------------
Number of retail stores 94 88 6.8 90
and 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. This key figure is not audited.
** Includes the company's own retail stores, retailer-owned Marimekko stores
and shop-in-shops with an area exceeding 30 sqm. The company's own retail
stores numbered 40 (28). Information on changes is available in the section
Internationalization and changes in the store network.
Mika Ihamuotila, President and CEO:
“I am pleased that our recent efforts are now showing up in the form of strong
growth in net sales even in the current, challenging state of the market. Our
internationalization has also proceeded rapidly. For the first time in the
company's history, the majority of brand sales of our products were generated
outside Finland. The strategic decision we made the year before last to invest
more in opening new, company-owned stores appears to have been correct.
Similarly, our decision to be cautious in Central Europe and especially in
Southern Europe and instead to devote effort to growth in East Asia and the
United States in particular has also proved correct. Our growth in net sales in
these regions was very robust in the first half of the year; sales in the
Asia-Pacific region rose by 35.7% and in North America by 60.9%. The
challenging state of the economy has also made itself felt in the form of
cautious purchasing behavior among consumers in Scandinavia. However, we have
unwaveringly expanded our network of stores and we can already see that this is
bearing fruit. During the period under review, we opened two company-owned
stores in Sweden.
“Our operating result was, as expected, in the red during the first half of the
year. Our net sales were seasonally low in relation to operating expenses, as
profits from retail sales operations are generated predominantly in the last
quarter of the year. Since a larger share of our net sales is generated by
retail sales, this trend is likely to continue in the future. The
second-quarter operating result and particularly the cash flow from operating
activities were better than last year. I am also pleased that we were able in
the second quarter simultaneously to reduce our stocks and to improve the sales
margins of both wholesale and the company-owned stores.
“The Hong Kong store opened in May has been given an excellent reception and
this encourages us to continue our investments in growth in the Asia-Pacific
region. Our stores in the United States have also performed so well that we are
continuing to expand our network of company-owned stores in this market, which
is strategically important for us. Last week we opened a company-owned store in
Boston and we will also open new ones later this year in Beverly Hills (L.A.)
and Palo Alto in the heart of Silicon Valley. Our new products have been
enthusiastically received internationally, and we will launch more new products
and categories in the near future."
Financial calendar 2012
The interim report for January-September will be issued on Tuesday, 30 October
2012, at 8.30 a.m.
Further information:
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 colors. 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
totaled 90 at the year end. The key markets are North America, Northern Europe
and the Asia-Pacific region. The Group employs around 500 people. The company's
share is quoted on NASDAQ OMX Helsinki Ltd. www.marimekko.com.
MARIMEKKO CORPORATION‘S INTERIM REPORT, 1 January - 30 June 2012
MARKET SITUATION
The overall uncertainty about the global economy continues, and this may impact
consumers' purchasing behavior in all markets. Forecasts of world economic
growth have held fairly steady, but the risks have increased. The world economy
is forecast to grow, driven by the developing markets, although China's
economic trend has flagged somewhat. The economic forecasts for the U.S. are
better than in Europe, but growth is fairly slow. EU states' severe loan crisis
is still continuing and even worsened during the early summer. Europe is thus
stuck in recession and the debt crisis is still the main threat which could
turn the global economic trend in a distinctly worse direction. In Finland, the
situation is moderate, although prospects have deteriorated to some extent. At
best, very slow growth is forecast for the rest of the year. All in all, the
outlook is fragmented and no end to the uncertainty can be seen (Confederation
of Finnish Industries EK: Business Tendency Survey, 8 August 2012).
The current business conditions for retail trade are slightly worse than usual.
From January to June, retail sales in Finland grew by 2.1% (Statistics Finland:
Turnover of Trade 2012, advance figures, June). In the January-May period of
2012, clothing retail sales (excluding sportswear) rose by 3.4% (Textile and
Fashion Industries TMA). Sales of women's clothing grew by 2.3%, menswear by
4.6% and children's clothing by 5.3%. Sales of bags were up by 3.0%. According
to advance figures from customs, Finland's balance of trade in June was in
surplus for the first time in almost a year. From January to May 2012, clothing
(SITC 84) exports grew by 8% and imports declined by 3%; textile (SITC 65)
exports were on a par with last year and imports grew by 1% (National Board of
Customs, monthly review, May 2012).
INTERNATIONALIZATION AND CHANGES IN THE STORE NETWORK
On the basis of positive feedback in Northern Europe and the United States,
Marimekko is investing more than before in the expansion of its network of
company-owned stores. This will change the ratio of wholesale to retail sales
somewhat, and it will tie up more of the company's capital and resources.
In February, Marimekko reported it was expanding its operations in all its main
market areas and aiming to open 10 to 20 new stores this year. In the second
quarter of the year, three stores were opened: company-owned stores in
Stockholm and Gothenburg, and a retailer-owned store in Hong Kong.
Since the end of the period, a company-owned store has been opened in Boston.
Two more new company-owned stores will also be opened this year in the United
States: one in the Stanford Shopping Center in Palo Alto in September-October,
and one on Canon Drive in Beverly Hills toward the end of the year. Marimekko
is also expanding its distribution in Canada; it has signed a partnership
contract with the modern furniture company EQ3 with the aim of opening 10
Marimekko shop-in-shops by the end of 2014. The first of these will open in
September in Toronto.
Of the remaining openings planned for the second half of the year, 10 have so
far been confirmed. Five of these will be company-owned retail stores, three
retailer-owned Marimekko stores and two shop-in-shops. In addition, some store
premises are still under negotiation.
Number of retail stores and shop-in-shops 30 June 2012 31 Dec. 2011
---------------------------------------------------------------------
---------------------------------------------------------------------
Finland 43 42
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Own retail stores 27 26
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Scandinavia 12 10
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Own retail stores 7 5
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Central and Southern Europe 5 5
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Own retail stores 4 4
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North America 11 11
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Own retail stores 2 2
---------------------------------------------------------------------
Asia-Pacific 23 22
---------------------------------------------------------------------
Own retail stores - -
---------------------------------------------------------------------
---------------------------------------------------------------------
TOTAL 94 90
---------------------------------------------------------------------
Own retail stores 40 37
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NET SALES
January to June
In the January-June period of 2012, the Marimekko Group's net sales, fuelled by
growth in international sales, were up by 13.1% to EUR 38,509 thousand
(34,049). Net sales in Finland grew by 4.4% and international sales by 28.1%.
April to June
In the April-June period of 2012, the Group's net sales grew by 17.2% to EUR
19,701 thousand (16,815), driven by international sales. Net sales in Finland
rose by 10.1% and international sales by 31.0%.
NET SALES BY MARKET AREA
(EUR 1,000) 4-6/201 4-6/201 Change, 1-6/201 1-6/20 Change, 1-12/20
2 1 % 2 11 % 11
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Finland 12,283 11,153* 10.1 22,511 21,563 4.4 49,807*
*
--------------------------------------------------------------------------------
Retail sales 8,320 6,914 20.3 14,136 11,712 20.7 28,267
--------------------------------------------------------------------------------
Wholesale sales 3,836 3,897 -1.6 8,106 9,362 -13.4 20,584
--------------------------------------------------------------------------------
Royalties 127 342 -62.9 269 489 -45.0 956
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Scandinavia 1,825 1,452* 25.7 3,727 3,341* 11.6 7,518*
--------------------------------------------------------------------------------
Retail sales 873 451 93.6 1,409 865 62.9 2,241
--------------------------------------------------------------------------------
Wholesale sales 952 999 -4.7 2,315 2,471 -6.3 5,269
--------------------------------------------------------------------------------
Royalties - 2 3 5 -40.0 8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Central and 1,693 1,397* 21.2 3,741 3,175* 17.8 6,691*
Southern Europe
--------------------------------------------------------------------------------
Retail sales 360 350 2.9 700 643 8.9 1,394
--------------------------------------------------------------------------------
Wholesale sales 1,306 1,017 28.3 2,986 2,474 20.7 5,183
--------------------------------------------------------------------------------
Royalties 27 30 -10.0 55 58 -5.2 114
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
North America 1,468 1,004* 46.2 2,720 1,690* 60.9 4,960*
--------------------------------------------------------------------------------
Retail sales 614 - 1,080 - 972
--------------------------------------------------------------------------------
Wholesale sales 646 804 -19.7 1,323 1,524 -13.2 3,430
--------------------------------------------------------------------------------
Royalties 208 200 4.0 317 166 91.0 558
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Asia-Pacific 2,432 1,809* 34.4 5,810 4,280* 35.7 8,466*
--------------------------------------------------------------------------------
Retail sales - - - - -
--------------------------------------------------------------------------------
Wholesale sales 2,432 1,809 34.4 5,808 4,280 35.7 8,458
--------------------------------------------------------------------------------
Royalties - - 2 - 8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
International 7,418 5,662* 31.0 15,998 12,486 28.1 27,635*
sales, total *
--------------------------------------------------------------------------------
Retail sales 1,847 801 130.6 3,189 1,508 111.5 4,607
--------------------------------------------------------------------------------
Wholesale sales 5,336 4,629 15.3 12,432 10,749 15.7 22,340
--------------------------------------------------------------------------------
Royalties 235 232 1.3 377 229 64.6 688
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL 19,701 16,815 17.2 38,509 34,049 13.1 77,442
--------------------------------------------------------------------------------
Retail sales 10,167 7,715 31.8 17,325 13,220 31.1 32,874
--------------------------------------------------------------------------------
Wholesale sales 9,172 8,526 7.6 20,538 20,111 2.1 42,924
--------------------------------------------------------------------------------
Royalties 362 574 -36.9 646 718 -10.0 1,644
--------------------------------------------------------------------------------
* Due to adjustments made in internal sales reporting structures, the
previously reported sales figures by market area have changed.
Finland
In the January-June period of 2012, sales in Finland rose by 4.4% to EUR 22,511
thousand. Retail sales were up by 20.7%. Sales were boosted by the three stores
opened in the last quarter of 2011 as well as one new store opened during the
first quarter of this year. The comparable growth in sales by company-owned
stores was 9.9%. Wholesale sales fell by 13.4%. 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 11.6% to EUR 3,727 thousand. Retail sales were up
by 62.9%. Three stores opened in 2011 boosted retail sales. Sales were also
stimulated by two stores opened in Sweden in the second quarter of this year.
The comparable trend in sales by company-owned stores was -12.9%. Wholesale
sales fell by 6.3%. Consumers' purchasing behavior continued to be cautious in
all countries and especially in Sweden. A small improvement was in sight, as
the Swedish fashion market bottomed out in March after a weak trend lasting for
a year.
Central and Southern Europe
In Central and Southern Europe, net sales rose to EUR 3,741 thousand, up by
17.8% on the previous year. Retail sales grew by 8.9%, which was attributable
to sales by the small company-owned store opened in London near the end of
2011. The comparable growth in sales by company-owned stores was 1.4%.
Wholesale sales were up by 20.7%. 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 60.9% to EUR 2,720 thousand. Measured in the
invoicing currency (mostly the US dollar), growth was roughly 48%. 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 13.2%.
Asia-Pacific
By far the most positive trend among all of Marimekko's market areas was
recorded in the Asia-Pacific region. The strong trend in sales seen last year
continued into the first half of this year. Sales grew by 35.7% to EUR 5,810
thousand. Sales were above expectations in all countries. A clear majority of
the growth came from Japan. Sales were also boosted by a new store in Hong Kong
which opened in the second quarter. Efforts deployed in Australia showed
results, and sales there also grew. Strong growth in sales fuels confidence in
growing interest in the company's products in this market area.
FINANCIAL RESULT
January to June
The Group's financial result for the first half 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 emphasized during the review period
as the share of retail sales in net sales was larger than before. In the
January-June period of 2012, the Group's operating result was EUR -1,480
thousand (-438). A decline in wholesale sales in Finland, North America 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
organizations in the United States and Sweden and the service organization at
the Helsinki head office. On the other hand, profitability was boosted by an
improvement in sales margins.
Marketing expenses during the period were EUR 1,998 thousand (2,543), or 5.2%
(7.5) of the Group's net sales.
As a result of considerable investments, the Group's depreciation grew to EUR
1,599 thousand (916), which represented 4.2% (2.7) of net sales.
The operating result margin decreased to -3.8% (-1.3).
Net financial income was EUR 5 thousand (net financial expenses 17), or 0.01%
(0.1) of net sales.
Result for the review period before taxes was EUR -1,475 thousand (-455).
Result after taxes was EUR -1,034 thousand (-308) and earnings per share were
EUR -0.13 (-0.04).
April to June
In the April-June period of 2012, the Group's operating result was EUR -545
thousand (-798). Operating result was improved by a 17 percent increase in net
sales which was mainly due to growth in comparable sales by company-owned
stores. Net sales were also boosted by new store opening. In addition, sales
margins increased markedly. On the other hand, profitability was eroded by
higher costs of the country organizations in the United States and Sweden as
well as those of the service organization at the Helsinki head office.
BALANCE SHEET
The consolidated balance sheet at 30 June 2012 amounted to EUR 54,687 thousand
(41,641). Total equity attributable to the equity holders of the parent company
was EUR 27,176 thousand (29,579), or EUR 3.38 per share (3.68).
Non-current assets were EUR 23,316 thousand (12,598 on 30 June 2011; 17,418 on
31 December 2011). As of March 2012, tangible assets include the present value
of future lease payments for the new 30-year land lease on the property of the
Helsinki head office and printing factory. The present value of the future
lease payments is EUR 3,460 thousand.
Net working capital at the end of the period totaled EUR 19,821 thousand, which
was EUR 1,984 thousand more than a year previously and EUR 607 thousand more
than at the end of 2011. Inventories were EUR 20,783 thousand, which was EUR
826 thousand more than a year previously but EUR 565 less than at the end of
2011.
CASH FLOW AND FINANCING
In the January-June period of 2012, cash flow from operating activities was EUR
-530 thousand (-2,297), representing EUR -0.07 per share (-0.29). Cash flow
before financing activities was EUR -4,420 thousand (-5,449).
In the April-June period of 2012, cash flow from operating activities was EUR
1,988 thousand (-361), representing EUR 0.25 per share (-0.04). Cash flow
before financing activities was EUR 317 thousand (-1,913).
The Group's financial liabilities were EUR 17,141 thousand at the end of the
reporting period, compared to EUR 2,391 a year ago and EUR 4,944 thousand at
the end of 2011. As of the end of March, financial liabilities include the
present value of future lease payments for the new 30-year land lease on the
property of the Helsinki head office and printing factory. The present value of
the future lease payments is EUR 3,460 thousand.
Cash and cash equivalents were EUR 1,548 thousand at the end of the period
under review (2,187 on 30 June 2011; 1,620 on 31 December 2011). Additionally,
the Group had unused committed credit lines amounting to EUR 6,286 thousand
(4,609).
The Group's equity ratio was 49.7% at the end of the period (71.1 on 30 June
2011; 67.2 on 31 December 2011). Gearing was 57.1%, while it was 0.7% at the
end of the corresponding period of the previous year.
INVESTMENTS
The Group's gross investments amounted to EUR 3,890 thousand (3,152),
representing 10.1% (9.3) of net sales. Most of the investments were devoted to
building new stores and renovating the Herttoniemi property.
PERSONNEL
In the January-June period of 2012, the number of employees averaged 475 (392).
At the end of the period, the Group had 493 (385) employees, of whom 75 (27)
worked outside Finland. The breakdown of the number of employees working abroad
by market area was as follows: Scandinavia 26 (14), Central and Southern Europe
12 (12), North America 35 (1) and Asia-Pacific 2 (0). The personnel of the
company's own stores numbered 203 (114) at the end of the period.
DECISIONS OF THE ANNUAL GENERAL MEETING
The decisions of Marimekko Corporation's Annual General Meeting were declared
in a stock exchange release on 17 April 2012 and in the interim report of 9 May
2012.
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 totaled 8,040,000.
Shareholdings
According to the book-entry register, Marimekko had 6,979 (6,900) shareholders
at the end of the period. Of the shares, 11.9% (13.4) 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 1,168,930 (1,150,930), representing 14.5%
(14.3) of the total share capital and of the votes conferred by the company's
shares.
The largest shareholders according to the book-entry register on 30 June 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. Keva 252,007 3.13
--------------------------------------------------------------------------------
7. Veritas Pension Insurance 220,000 2.74
Company
--------------------------------------------------------------------------------
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 3,748,314 46.62
--------------------------------------------------------------------------------
Nominee-registered 957,440 11.91
--------------------------------------------------------------------------------
Other 3,334,246 41.47
--------------------------------------------------------------------------------
Total 8,040,000 100.00
--------------------------------------------------------------------------------
Share trading and the company's market capitalization
During the period, a total of 544,467 Marimekko shares were traded,
representing 6.8% of the shares outstanding. The total value of Marimekko's
share turnover was EUR 7,038,897. The lowest price of the Marimekko share was
EUR 9.92, the highest was EUR 14.33 and the average price was EUR 13.01. At the
end of the period, the closing price of the share was EUR 12.90. The company's
market capitalization on 30 June 2012 was EUR 103,716,000 (104,520,000 on 30
June 2011; 79,435,200 on 31 December 2011).
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 and rose to 6.00%, or 482,752 shares, on the maturity date of the
stock loan on 22 May 2012.
Authorizations
The Annual General Meeting of 17 April 2012 authorized the Board of Directors
to decide on a directed offering of shares to the personnel, in deviation from
the shareholders' pre-emptive right, in one or more offerings. The total number
of new shares to be offered for subscription pursuant to the authorization may
not exceed 150,000 shares, representing approximately 1.9% of the total number
of the company's shares. The authorization includes the right of the Board of
Directors to decide on all the other terms of the share issue. The
authorization is in effect for two years from the date of the Annual General
Meeting's decision.
At the end of the period, the Board of Directors had no other valid
authorizations to carry out share issues or issue convertible bonds or bonds
with warrants, or to acquire or surrender Marimekko shares.
Personnel share offering
Marimekko Corporation's Board of Directors decided on 25 April 2012 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.
The personnel share offering is reported in more detail in the stock exchange
release of 26 April 2012 and in the interim report of 9 May 2012.
EVENTS AFTER THE CLOSE OF THE REVIEW PERIOD
Changes in management
Marimekko's Marketing Director and member of the Management Group Malin Groop
is to resign from the company as of 15 August 2012 and will serve the company
as a consultant for strategic projects related to brand development. Tiina
Alahuhta-Kasko, who served as Acting Marketing Director during Groop's
maternity leave, has been appointed as the Group's Marketing Director and
member of the Management Group as from 15 August 2012. Alahuhta-Kasko has been
in the company's employ since 2005.
MAJOR RISKS AND FACTORS OF UNCERTAINTY
The key strategic risks are associated with overall economic trends and the
consequent uncertainty in the operating environment as well as the management
of expansion. Factors of uncertainty and trends in the world economy affect
consumers' purchasing behavior and buying power in all of the company's market
areas. The severe problems of the international financial markets dampen the
prospects for retail sales as well as Marimekko's growth and earnings outlook.
Consumers' purchasing behavior has been cautious, especially in Scandinavia.
Marimekko is undergoing a phase of extensive internationalization and change.
The distribution of products is being expanded in all key market areas,
particularly North America and the Asia-Pacific region. Unlike before, the
focus of growth lies increasingly in opening company-owned stores outside
Finland. This calls for larger or brand-new country organizations in these
market areas, which will exert a substantial drag on the cost-effectiveness of
the company, especially in the early stages of expansion. Moreover, expanding
the network of company-owned stores will increase the company's investments,
lease liabilities of store premises, and inventories. It follows from this that
a larger portion of Group net sales will come from sales by the company's own
retail stores, which will add to the seasonality of the business and shift the
bulk of net sales and profit accumulation to the last quarter, thus having a
negative impact on profitability in the first half of the year. Furthermore,
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 commercialize new products that meet
consumers' expectations whilst maintaining profitable and effective in-house
production has an impact on the company's sales and profitability.
The company's key operational risks prominently include those related to the
management of expansion projects, the operational reliability of procurement
and logistics processes, and changes in cost of raw materials and other
procurement items. As a result of 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 behavior in
different market areas.
The new stores opened during 2011 will, together with other significant
investments in the expansion of the distribution network, generate a
substantial increase in sales in 2012. In addition, the company aims to open
between 10 and 20 new stores during this year, about half of which would be
owned by Marimekko. Four stores were opened in the first half of the year; the
number of openings scheduled for the second half of the year has currently been
confirmed as 14. This total of 18 new Marimekko stores is divided as follows:
11 company-owned stores, four retailer-owned stores and three shop-in-shops.
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 will be generated entirely in the
second half of the year.
Helsinki, 14 August 2012
MARIMEKKO CORPORATION
Board of Directors
Information presented in the interim report has not been audited.
APPENDICES
Accounting principles
Formulas for the key figures
Consolidated income statement and comprehensive consolidated income statement
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in shareholders' equity
Key figures
Segment information
Quarterly trend in net sales by market area
Net sales by product line
Quarterly trend in net sales and earnings
ACCOUNTING PRINCIPLES
This interim report was prepared in accordance with IAS 34: Interim Financial
Reporting. The same accounting principles were applied as in the 2011 financial
statements.
FORMULAS FOR THE KEY FIGURES
Earnings per share (EPS), EUR:
(Profit before taxes - income taxes) / Number of shares (average for the
financial period)
Equity per share, EUR:
Shareholders' equity / Number of shares, 30 June
Return on equity (ROE), %:
(Profit before taxes - income taxes) X 100 / Shareholders' equity (average for
the financial period)
Return on investment (ROI), %:
(Profit before taxes + interest and other financial expenses) X 100 / (Balance
sheet total - non-interest-bearing liabilities (average for the financial
period))
Equity ratio, %:
Shareholders' equity X 100 / (Balance sheet total - advances received)
Gearing, %:
Interest-bearing net debt X 100 / Shareholders' equity
Net working capital:
Inventories + trade and other receivables + current tax assets - trade and
other payables
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 4-6/20 4-6/20 1-6/20 1-6/20 1-12/2
12 11 12 11 011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET SALES 19,701 16,815 38,509 34,049 77,442
--------------------------------------------------------------------------------
Other operating income 8 - 9 2 2
--------------------------------------------------------------------------------
Increase or decrease in inventories of 475 -50 475 -1,981 -2,353
completed and unfinished products
--------------------------------------------------------------------------------
Raw materials and consumables 6,179 6,301 13,242 14,417 30,287
--------------------------------------------------------------------------------
Employee benefit expenses 5,918 4,947 11,621 9,615 20,030
--------------------------------------------------------------------------------
Depreciation 828 496 1,599 916 2,216
--------------------------------------------------------------------------------
Other operating expenses 6,854 5,919 13,061 11,522 23,736
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPERATING RESULT -545 -798 -1,480 -438 3,528
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 132 28 138 41 246
--------------------------------------------------------------------------------
Financial expenses 78 -22 -133 -58 -59
--------------------------------------------------------------------------------
210 6 5 -17 187
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RESULT BEFORE TAXES -335 -792 -1,475 -455 3,715
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -121 -200 -441 -147 889
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET RESULT FOR THE PERIOD -214 -592 -1,034 -308 2,826
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net result to equity -214 -592 -1,034 -308 2,826
holders of the parent company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Basic and diluted earnings per share -0.03 -0.07 -0.13 -0.04 0.35
calculated on the result attributable
to equity holders of the parent
company, EUR
--------------------------------------------------------------------------------
COMPREHENSIVE CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 4-6/20 4-6/20 1-6/20 1-6/20 1-12/2
12 11 12 11 011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net result for the period -214 -592 -1,034 -308 2,826
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
Change in translation difference -3 10 -31 22 -28
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPREHENSIVE RESULT FOR THE PERIOD -217 -582 -1,065 -286 2,798
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net result to equity -217 -582 -1,065 -286 2,798
holders of the parent company
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 30.6.2012 30.6.2011 31.12.2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NON-CURRENT ASSETS
--------------------------------------------------------------------------------
Tangible assets 21,336 10,841 14,966
--------------------------------------------------------------------------------
Intangible assets 1,620 1,654 2,296
--------------------------------------------------------------------------------
Available-for-sale financial assets 16 16 16
--------------------------------------------------------------------------------
Deferred tax assets 344 87 140
--------------------------------------------------------------------------------
23,316 12,598 17,418
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CURRENT ASSETS
--------------------------------------------------------------------------------
Inventories 20,783 19,957 21,348
--------------------------------------------------------------------------------
Trade and other receivables 8,032 6,003 7,680
--------------------------------------------------------------------------------
Current tax assets 1,008 896 514
--------------------------------------------------------------------------------
Cash and cash equivalents 1,548 2,187 1,620
--------------------------------------------------------------------------------
31,371 29,043 31,162
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSETS, TOTAL 54,687 41,641 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 -49 32 -18
--------------------------------------------------------------------------------
Retained earnings 19,185 21,507 24,641
--------------------------------------------------------------------------------
Shareholders' equity, total 27,176 29,579 32,663
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NON-CURRENT LIABILITIES
--------------------------------------------------------------------------------
Deferred tax liabilities 368 652 630
--------------------------------------------------------------------------------
Financial liabilities 17,073 2,391 4,944
--------------------------------------------------------------------------------
17,441 3,043 5,574
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CURRENT LIABILITIES
--------------------------------------------------------------------------------
Trade and other payables 10,002 9,019 10,328
--------------------------------------------------------------------------------
Current tax liabilities - - 15
--------------------------------------------------------------------------------
Financial liabilities 68 - -
--------------------------------------------------------------------------------
10,070 9,019 10,343
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities, total 27,511 12,062 15,917
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES, TOTAL 54,687 41,641 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) 1-6/2012 1-6/2011 1-12/2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net result for the period -1,034 -308 2,826
--------------------------------------------------------------------------------
Adjustments
--------------------------------------------------------------------------------
Depreciation according to plan 1,599 916 2,216
--------------------------------------------------------------------------------
Unrealized exchange rate gains - - -416
--------------------------------------------------------------------------------
Financial income and expenses -5 17 -187
--------------------------------------------------------------------------------
Taxes -441 -148 890
--------------------------------------------------------------------------------
Cash flow before change in working capital 119 477 5,329
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in working capital -1,086 -1,980 -3,454
--------------------------------------------------------------------------------
Increase (-) / decrease (+) in current -1,034 345 -969
non-interest-bearing trade receivables
--------------------------------------------------------------------------------
Increase (-) / decrease (+) in inventories 564 -2,784 -4,175
--------------------------------------------------------------------------------
Increase (+) / decrease (-) in current -616 459 1,690
non-interest-bearing liabilities
--------------------------------------------------------------------------------
Cash flow from operating activities before -967 -1,503 1,875
financial items and taxes
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paid interest and payments on other -112 -58 129
financial expenses
--------------------------------------------------------------------------------
Interest received 138 42 66
--------------------------------------------------------------------------------
Taxes paid 411 -778 -1,419
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES -530 -2,297 651
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Investments in tangible and intangible assets -3,890 -3,152 -9,220
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES -3,890 -3,152 -9,220
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Long-term loans drawn 8,770 2,391 -
--------------------------------------------------------------------------------
Long-term loans repaid - - 4,944
--------------------------------------------------------------------------------
Dividends paid -4,422 -4,422 -4,422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES 4,348 -2,031 522
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in cash and cash equivalents -72 -7,480 -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 1,548 2,187 1,620
period
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(EUR 1,000) Equity attributable to equity holders of the
parent company
--------------------------------------------------------------------------------
Share Translatio Retaine Shareholde
capital n d rs'
difference earning equity,
s s total
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 1 Jan. 2011 8,040 10 26,237 34,287
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Comprehensive result
--------------------------------------------------------------------------------
Net result for the period -308 -308
--------------------------------------------------------------------------------
Translation differences 22 22
--------------------------------------------------------------------------------
Total comprehensive result for the 32 -308 -286
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividends paid -4,422 -4,422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 30 June 2011 8,040 32 21,507 29,579
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 1 Jan. 2012 8,040 -18 24,641 32,663
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Comprehensive result
--------------------------------------------------------------------------------
Net result for the period -1,034 -1,034
--------------------------------------------------------------------------------
Translation differences -31 -31
--------------------------------------------------------------------------------
Total comprehensive result for the -49 -1,034 -1,065
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividends paid -4,422 -4,422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity 30 June 2012 8,040 -49 19,185 27,176
--------------------------------------------------------------------------------
KEY FIGURES
1-6/201 1-6/201 Change, 1-12/201
2 1 % 1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR -0.13 -0.04 0.35
--------------------------------------------------------------------------------
Equity per share, EUR 3.38 3.68 -8.2 4.06
--------------------------------------------------------------------------------
Return on equity (ROE), % -6.9 -1.9 8.4
--------------------------------------------------------------------------------
Return on investment (ROI), % -6.4 -2.5 11.4
--------------------------------------------------------------------------------
Equity ratio, % 49.7 71.1 67.2
--------------------------------------------------------------------------------
Gearing, % 57.1 0.7 10.2
--------------------------------------------------------------------------------
Gross investments, EUR 1,000 3,890 3,152 23.4 9,220
--------------------------------------------------------------------------------
Gross investments, % of net sales 10.1 9.3 11.9
--------------------------------------------------------------------------------
Contingent liabilities, EUR 1,000 26,029 18,569 40.2 27,610
--------------------------------------------------------------------------------
Average personnel 475 392 21.2 402
--------------------------------------------------------------------------------
Personnel at the end of the period 493 385 28.1 434
--------------------------------------------------------------------------------
Number of shares at the end of the period 8,040 8,040 8,040
(1,000)
--------------------------------------------------------------------------------
Number of shares outstanding, average 8,040 8,040 8,040
(1,000)
--------------------------------------------------------------------------------
SEGMENT INFORMATION
(EUR 1,000) 1-6/2012 1-6/2011 Change, % 1-12/2011
------------------------------------------------------------
------------------------------------------------------------
Marimekko business
------------------------------------------------------------
Net sales 38,509 34,049 13.1 77,442
------------------------------------------------------------
Operating result -1,480 -438 3,528
------------------------------------------------------------
Assets 54,687 41,641 31.3 48,580
------------------------------------------------------------
QUARTERLY TREND IN NET SALES BY MARKET AREA
(EUR 1,000) 4-6/2012 1-3/2012 10-12/2011 7-9/2011 4-6/2011
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Finland 12,283 10,228 15,617* 12,628* 11,153*
-------------------------------------------------------------------------------
Retail sales 8,320 5,816 8,926 7,630 6,914
-------------------------------------------------------------------------------
Wholesale sales 3,836 4,270 6,405 4,817 3,897
-------------------------------------------------------------------------------
Royalties 127 142 286 181 342
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Scandinavia 1,825 1,902 2,210* 1,967* 1,452*
-------------------------------------------------------------------------------
Retail sales 873 536 795 581 451
-------------------------------------------------------------------------------
Wholesale sales 952 1,363 1,412 1,386 999
-------------------------------------------------------------------------------
Royalties - 3 3 - 2
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Central and Southern Europe 1,693 2,048 1,821* 1,694* 1,397*
-------------------------------------------------------------------------------
Retail sales 360 340 418 333 350
-------------------------------------------------------------------------------
Wholesale sales 1,306 1,680 1,375 1,333 1,017
-------------------------------------------------------------------------------
Royalties 27 28 28 28 30
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
North America 1,468 1,252 2,152* 1,118* 1,004*
-------------------------------------------------------------------------------
Retail sales 614 466 972 - -
-------------------------------------------------------------------------------
Wholesale sales 646 677 910 996 804
-------------------------------------------------------------------------------
Royalties 208 109 270 122 200
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Asia-Pacific 2,432 3,378 1,781* 2,405* 1,809*
-------------------------------------------------------------------------------
Retail sales - - - - -
-------------------------------------------------------------------------------
Wholesale sales 2,432 3,376 1,781 2,397 1,809
-------------------------------------------------------------------------------
Royalties - 2 - 8 -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TOTAL 19,701 18,808 23,581 19,812 16,815
-------------------------------------------------------------------------------
* 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) 4-6/ 4-6/ Change, % 1-6/ 1-6/ Change, % 1-12/
2012 2011* 2012 2011* 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Clothing 6,958 5,872 18.5 13,936 12,963 7.5 28,351
--------------------------------------------------------------------------------
Interior 8,443 7,589 11.3 16,276 14,507 12.2 34,003
decoration
--------------------------------------------------------------------------------
Bags 4,300 3,354 28.2 8,297 6,579 26.1 15,088
--------------------------------------------------------------------------------
TOTAL 19,701 16,815 17.2 38,509 34,049 13.1 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) 4-6/2012 1-3/2012 10-12/2011 7-9/2011
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 19,701 18,808 23,581 19,812
-----------------------------------------------------------------
Operating result -545 -935 1,645 2,321
-----------------------------------------------------------------
Earnings per share, EUR -0.03 -0.10 0.18 0.21
-----------------------------------------------------------------
-----------------------------------------------------------------
(EUR 1,000) 4-6/2011 1-3/2011 10-12/2010 7-9/2010
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 16,815 17,234 22,074 19,468
-----------------------------------------------------------------
Operating result -798 360 2,188 4,170
-----------------------------------------------------------------
Earnings per share, EUR -0.07 0.04 0.21 0.38
-----------------------------------------------------------------
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