Stockmann - Interim report (Q1 and Q3)

Stockmann Group’s Interim Report 1 January - 30 September 2013

Decline in operating profit in weak market, tax refund improved earnings per
share 

Helsinki, Finland, 2013-10-30 07:00 CET (GLOBE NEWSWIRE) -- STOCKMANN plc,
Interim Report 30.10.2013 at 8.00 EET 

July - September 2013:
Consolidated revenue was EUR 454.4 million (EUR 485.1 million), down 4.6 per
cent excluding terminated franchising operations. 
Operating profit was EUR 10.7 million (EUR 17.1 million).

January - September 2013:
Consolidated revenue was EUR 1 429.3 million (EUR 1 472.6 million), down 1.4
per cent excluding terminated franchising operations. 
Operating profit was EUR 6.1 million (EUR 30.5 million).
Profit for the period was EUR 11.9 million (EUR 5.8 million).
Earnings per share came to EUR 0.16 (EUR 0.08).
Tax refund of EUR 25.1 million for Lindex increased earnings per share by EUR
0.35. 

Full-year outlook revised: Stockmann Group's revenue in 2013 is expected to be
slightly down on 2012, excluding the terminated franchising operations. Even
though most of Stockmann's operating profit is generated during the fourth
quarter of the year, operating profit for 2013 is not expected to reach the
previous year's level. 

Stockmann previously estimated that its revenue would increase in 2013,
excluding the terminated franchising operations. Operating profit was not
expected to exceed the figure for 2012. 

CEO Hannu Penttilä:
“The retail market environment in the third quarter of the year was very weak,
particularly in Finland. Consumer confidence remained low and the warm weather
affected sales of autumn merchandise. The weakened Russian, Swedish and
Norwegian currencies also had a negative effect on Stockmann's euro-denominated
revenue. As a result, the revenue fell short of our target for the quarter. 

Among the Stockmann Group's businesses, Lindex performed best in the difficult
market conditions. It gained market share in all main markets and its operating
profit was up for the quarter. The Department Store Division's operating profit
was down on 2012. The weakened rouble, in particular, had a negative effect on
the gross margin and operating profit. Seppälä, which is currently undergoing
changes, also posted a lower operating profit than in 2012. 

Our net profit was improved by the tax refund resulting from the Swedish and
German tax authorities' decision to eliminate Lindex's double taxation in
1999-2005. Consequently, Stockmann's earnings per share were up significantly. 

The department stores' Crazy Days campaign, which took place after the third
quarter, reached a new sales record and revenue grew in all market areas.
However, it is uncertain how consumers will behave during the rest of the finalquarter, which is the most important for Stockmann's full-year operating
profit. The cost savings measures that were decided on in the spring will
continue. Also it is of utmost importance that we implement structural changes
to adapt our cost structure to the lower sales volumes.” 

Outlook for 2013
The European economy is expected to perform poorly in the rest of 2013, and
this will cause uncertainty in retail market performance. Declining purchasing
power may further weaken consumer confidence and it seems probable that the
market in Finland will experience a long period of low or no growth. The
outlook for Sweden is expected to improve slightly towards the end of 2013. 

The Russian rouble has weakened and GDP forecasts for the country have been
lowered in recent months. As a consequence, the retail market outlook for
Russia remains uncertain. The retail market in the Baltic countries has been
relatively stable. Low consumer confidence may, however, affect consumers'
willingness to make purchases in all market areas. 

Stockmann discontinued the Bestseller franchising in Russia and Zara
franchising in Finland, which will slow revenue growth somewhat. In Russia,
however, the discontinuation will improve operating profit. Attention will be
given to improving cost efficiency particularly in Finland, where a cost
savings programme has been initiated. The Group's capital expenditure is
estimated to be lower than depreciation in 2013 and to amount to approximately
EUR 60 million for the year. 

Stockmann has revised its full-year outlook. Stockmann Group's revenue in 2013
is expected to be slightly down on 2012, excluding the terminated franchising
operations. Even though most of Stockmann's operating profit is generated
during the fourth quarter of the year, operating profit for 2013 is not
expected to reach the previous year's level. 

Earlier outlook (published on 16 April 2013): Stockmann expects the Group's
revenue to increase in 2013, excluding the terminated franchising operations.
Operating profit is expected to not exceed the figure for 2012. 

Key figures

                                         7-9/20  7-9/20  1-9/20  1-9/20  1-12/20
                                             13      12      13      12       12
Revenue, EUR mill.                        454.4   485.1       1       1  2 116.4
                                                          429.3   472.6         
Revenue growth, %                          -6.3     5.2    -2.9     6.8      5.5
Relative gross margin, %                   49.5    50.6    48.2    49.5     49.5
Operating profit, EUR mill.                10.7    17.1     6.1    30.5     87.3
Net financial costs, EUR mill.              4.1     7.5    18.6    23.8     32.4
Profit before tax, EUR mill.                6.5     9.6   -12.5     6.8     54.9
Profit for the period, EUR mill.           28.9     8.1    11.9     5.8     53.6
Earnings per share, undiluted, EUR         0.40    0.11    0.16    0.08     0.74
Equity per share, EUR                                     11.88   11.75    12.40
Cash flow from operating activities,      -47.9   -32.4   -57.8   -17.5    123.7
 EUR mill.                                                                      
Capital expenditure, EUR mill.             15.3    17.6    43.7    40.9     60.3
Net gearing, %                                            111.5   111.0     90.9
Equity ratio, %                                            39.9    39.1     42.8
Number of shares, undiluted, weighted                    72 049  71 911   71 945
 average, 1 000 pc                                                              
Return on capital employed,                                 3.6     5.1      5.1
rolling 12 months                                                               
Personnel, average                       14 685  15 505  14 830  15 437   15 603


This company announcement is a summary of the Stockmann's Interim Report for 1
January - 30 September 2013 and includes the most relevant information of the
report. The complete report is attached to this release as a pdf file and is
also available on the company's website at www.stockmanngroup.com. 

Press and analyst briefing and conference call
A press and analyst briefing in Finnish will be held today, on 30 October 2013
at 9.15 a.m. at the F8 Tema restaurant on the 8th floor of Stockmann's Helsinki
city centre department store, Aleksanterinkatu 52. 

A conference call in English will be held today, on 30 October 2013 at 11.15
a.m. EET. To participate the conference call, please dial +358 9 8864 8511 and,
when requested, key in the meeting room number *657899* including the
asterisks. The presentation material will be available for downloading on the
company's website from 9.15 a.m. EET onwards. 
Further information:
Hannu Penttilä, CEO, tel. +358 9 121 5801
Pekka Vähähyyppä, CFO, tel. +358 9 121 3351

www.stockmanngroup.com


STOCKMANN plc

Hannu Penttilä
CEO


Distribution:
NASDAQ OMX
Principal media

Attachments:

OVK Q3 2013 ENG.pdf