2013-05-07 07:30:00 CEST
2013-05-07 07:30:07 CEST
REGULATED INFORMATION
Marimekko - Interim report (Q1 and Q3)
INTERIM REPORT OF MARIMEKKO CORPORATION, 1 JANUARY – 31 MARCH 2013
Marimekko Corporation, Interim Report, 7 May 2013 at 8.30 a.m.
In the first quarter of 2013, the Marimekko Group's net sales grew by 10
percent relative to the same period last year. International sales rose by 19
percent, particularly due to the stores opened in North America and the
Asia-Pacific region in 2012. Operating result was weakened by the losses posted
by stores in the start-up phase in the United States, a decline in comparable
retail sales in Finland, costs related to business expansion, and a downturn in
wholesale sales in Finland, Scandinavia and the United States.
In order to secure business competitiveness, during the period under review
Marimekko initiated statutory employer-employee negotiations on potential
permanent staffing reductions concerning its production operations in Sulkava
and Kitee and the personnel of the adjacent outlets.
In 2013, Marimekko will continue to make moderate investments in growth,
concentrating on improving profitability, particularly by enhancing the
operations of the stores opened in 2012.
Key indicators
1-3/2013 1-3/2012 Change, % 1-12/2012
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Net sales, EUR million 20.7 18.8 10 88.5
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International sales, EUR million 10.2 8.6 19 36.1
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% of net sales 49 46 41
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EBITDA, EUR million -0.2 -0.2 -13 5.6
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Operating result, EUR million -1.3 -0.9 -38 2.0
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Operating result margin, % -6.2 -5.0 2.3
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Result for the period, EUR million -1.1 -0.8 -38 1.1
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Earnings per share, EUR -0.14 -0.10 -37 0.14
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Cash flow from operating activities, -2.3 -2.5 9 8.6
EUR million
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Return on investment (ROI), % -10.8 -9.0 4.1
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Equity ratio, % 53.8 57.8 54.6
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Gross investments, EUR million 0.8 2.2 -66 7.6
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Personnel at the end of the period 517 470 10 535
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outside Finland 96 70 37 103
------------------------------------------------------------------------------Brand sales*, EUR million 44.3 42.5 4 187.2
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outside Finland, EUR million 28.1 25.4 11 100.7
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proportion of international sales, % 63 60 54
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Number of stores** 108 91 19 108
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* Estimated sales of Marimekko products at consumer prices. Brand sales are
calculated by adding together the company's own retail sales and the estimated
retail value of Marimekko products sold by other retailers. The estimate, based
on Marimekko's actual wholesale sales to these retailers, is unofficial and
does not include VAT. The key figure is not audited.
** Includes the company's own retail stores, retailer-owned Marimekko stores
and shop-in-shops with an area exceeding 30 sqm. The company's own retail
stores numbered 47 at the end of March 2013 (38). Information on changes is
available in the section Internationalisation and changes in the store network.
Mika Ihamuotila, President and CEO:
”In spite of the continuing uncertainty in the global economy, our net sales
grew in the first quarter by 10 percent on the same period last year. As a
result of the investments in line with our growth strategy, our international
sales took a particularly favourable trend: net sales outside Finland grew
during the period under review by 19 percent, largely due to the stores opened
in North America and the Asia-Pacific region in 2012.
“Our trend in earnings is typically weak during the first quarter because net
sales are low relative to operating expenses for seasonal reasons. In recent
years, we have invested especially in opening company-owned stores, and a
growing proportion of our net sales is generated by retailing. This increases
the seasonal nature of our business and strongly shifts the accrual of net
sales and operating profit to the second half of the year. Our operating result
for the first quarter was EUR -1.3 million.
“It takes time to build an international design company and a profitable
network of company-owned stores, and I trust we are on the right track in this
work. In spite of the uncertainty of the global economy, we intend to continue
our long-term work aimed at international growth in line with our strategy, and
in order to attain our goals we must now pay particular attention to the
profitability and cost-effectiveness of our operations. As part of this work,
during the period under review we initiated statutory employer-employee
negotiations concerning our production operations in Sulkava and Kitee and the
employees of the adjacent outlets, with the aim of securing the competitiveness
of our business also in the future. This year, we are investing particularly in
developing the operations of our new stores and boosting their profitability.
The main thrust in our expansion will be more clearly than last year on
openings of retailer-owned stores and shop-in-shops in department stores. The
objective this year is to open 15 to 24 Marimekko stores and shop-in-shops, 4
to 6 of which would be Marimekko-owned.”
Market outlook and growth targets
The widespread uncertainty over the global economy is forecast to continue, and
this may influence consumers' purchasing behaviour in all of Marimekko's market
areas. The prospects for the economic trend in Europe have deteriorated, and
growth in the region will be slow. In the United States and Asia, economic
forecasts are markedly better than in Europe, but growth is fairly slow. Market
conditions in Finland are moderate, but the economic prospects for the business
community for the next few months are strikingly cautious. Economic conditions
are expected to remain weak, and retail sales are forecast to decline.
(Confederation of Finnish Industries EK: Business Tendency Survey, February
2013). The sluggish trend in Marimekko's own stores in Finland at the end of
2012 and a decline in comparable retail sales during the first quarter of 2013,
combined with poor consumer confidence, cast a shadow over prospects in Finland
for this year.
The stores opened in 2012 and the other considerable investments made in the
expansion of the distribution network will generate a marked increase in sales
in 2013. The main thrust in expansion during 2013 will be on openings of
retailer-owned Marimekko stores and shop-in-shops. Furthermore, the company
will invest in developing the business of the stores it opened in 2012. The aim
is to open 15 to 24 Marimekko stores and shop-in-shops this year, 4 to 6 of
which will be company-owned.
The planned total investments for 2013 of the Marimekko Group are estimated as
being in excess of EUR 3 million. The majority of investments will be directed
at building new store premises and purchasing new furniture.
Financial guidance
Due to the current market conditions and the change undergone by the company
recently, it is very difficult to forecast the financial result for 2013. The
financial guidance for the whole of 2013 remains unchanged: the Marimekko
Group's net sales are estimated to grow by over 5 percent and operating profit
is forecast to be, at the most, at the same level as in 2012. The increased
proportion of retail sales will further boost the seasonal nature of business,
so the major portion of operating profit will, as is typical, accrue in the
second half of the year.
For additional information, contact:
Mika Ihamuotila, President and CEO, tel. +358 9 758 71
Thomas Ekström, Chief Financial Officer, tel. +358 9 758 7261
MARIMEKKO CORPORATION
Corporate Communications
Merja Paulamäki
Tel. +358 9 758 7473
merja.paulamaki@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 2012, brand sales
of Marimekko products worldwide amounted to approximately EUR 187 million and
the company's net sales were EUR 88 million. The number of Marimekko stores
totalled 108 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
INTERIM REPORT OF MARIMEKKO CORPORATION, 1 JANUARY - 31 MARCH 2013
MARKET REVIEW
The widespread uncertainty over the global economy continued during the period
under review and consumers' purchasing behaviour remained cautious. In Europe,
the serious debt crisis of the EU states retreated somewhat, but the region's
economic growth continued to be weak. In the United States and Asia, the
situation was better, although growth was fairly slow. (Confederation of
Finnish Industries EK: Business Tendency Survey, February 2013).
In Finland, market conditions continued to be worse than the average and the
economic prospects remained cautious. Consumer confidence improved slightly
compared to the end of last year. In the first quarter of 2013, retail net
sales in Finland grew by 1.4 percent, but the quantity of sales - which
measures real growth in sales - rose only by 0.1 percent. (Statistics Finland:
Turnover of trade, retail trade flash estimate, April 2013). In January and
February 2013, retail sales of clothing (excluding sportswear) fell by 4.6
percent. Sales of women's clothing declined by 5.3 percent, menswear by 2.9
percent and children's clothing by 5.0 percent. Sales of bags fell by 2.2
percent. (Textile and Fashion Industries TMA). In the January-February period,
clothing (SITC 84) exports rose by 8 percent and imports fell by 2 percent;
exports of textiles (SITC 65) declined by 10 percent and imports by 6 percent
(National Board of Customs, monthly review, February 2013).
INTERNATIONALISATION AND CHANGES IN THE STORE NETWORK
In 2012, Marimekko invested more than before in expanding its network of
company-owned stores in Northern Europe and the United States in order to raise
its profile and to enhance prospects for the opening of retailer-owned
Marimekko stores and shop-in-shops. This changed the ratio of wholesale to
retail and tied up a larger proportion of the company's capital and resources
than before.
In 2013, the main thrust in Marimekko's expansion will be on openings of
retailer-owned Marimekko stores and shop-in-shops. The company will also invest
in enhancing the operations of the stores it opened in 2012. The objective this
year is to open 15 to 24 Marimekko stores and shop-in-shops, 4 to 6 of which
would be Marimekko-owned.
After the end of the period under review, Marimekko opened its first
company-owned retail store in Oulu and one of the company's two stores in
Tampere almost doubled its floor area in a remodelling. In April, Marimekko
announced in a release that the first Marimekko stores in mainland China were
to open in Beijing and Shanghai during the summer and that a second Marimekko
store would open in Hong Kong at the end of 2013.
Number of stores & shop-in-shops* 31.3.2013 31.3.2012 31.12.2012
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Finland 48 43 48
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Company-owned stores 28 27 28
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Scandinavia 12 10 12
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Company-owned stores 7 5 7
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Central and Southern Europe 5 5 5
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Company-owned stores 4 4 4
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North America 16 11 16
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Company-owned stores 6 2 6
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Asia-Pacific 27 22 27
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Company-owned stores 2 - 2
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Total 108 91 108
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Company-owned stores 47 38 47
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* Includes the company's own retail stores, retailer-owned Marimekko stores and
shop-in-shops with an area exceeding 30 sqm.
NET SALES
In the first quarter, the Group's net sales, boosted by international sales,
rose by 10 percent to EUR 20,710 thousand (18,808). In Finland, net sales were
on a par with those of the same period last year. International sales grew by
19 percent.
Net sales by market area
(EUR 1,000) 1-3/2013 1-3/2012 Change, % 1-12/2012
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Finland 10,486 10,228 3 52,344
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Retail sales 6,296 5,816 8 34,000
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Wholesale sales 4,070 4,270 -5 17,546
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Royalties 120 142 -16 798
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Scandinavia 1,879 1,902 -1 7,856
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Retail sales 805 536 50 3,299
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Wholesale sales 1,074 1,363 -21 4,554
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Royalties - 3 -100 3
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Central and Southern Europe 2,001 2,048 -2 7,783
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Retail sales 284 340 -17 1,492
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Wholesale sales 1,692 1,680 1 6,185
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Royalties 25 28 -11 106
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North America 1,871 1,252 49 7,743
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Retail sales 1,103 466 137 4,020
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Wholesale sales 657 677 -3 3,193
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Royalties 111 109 2 530
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Asia-Pacific 4,473 3,378 32 12,745
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Retail sales 504 - 655
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Wholesale sales 3,969 3,376 18 12,087
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Royalties - 2 -100 3
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International sales, total 10,224 8,580 19 36,127
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Retail sales 2,696 1,342 101 9,466
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Wholesale sales 7,392 7,096 4 26,019
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Royalties 136 142 -4 642
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Total 20,710 18,808 10 88,471
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Retail sales 8,992 7,158 26 43,466
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Wholesale sales 11,462 11,366 1 43,565
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Royalties 256 284 -10 1,440
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Finland
In the first quarter, sales in Finland grew by 3 percent and reached EUR 10,486
thousand. Retail sales rose by 8 percent. Sales were boosted by three stores
opened in 2012. Comparable sales by company-owned stores fell by 3 percent.
Wholesale sales fell by 5 percent.
Scandinavia
In Scandinavia, sales were on a par with those of the previous year's first
quarter and amounted to EUR 1,879 thousand. Retail sales rose by 50 percent.
Retail sales were boosted by two company-owned stores opened in Sweden in 2012.
Comparable sales growth for company-owned stores was 21 percent. Most of the
growth was generated from the January sales. Wholesale sales fell by 21
percent. Consumers' purchasing behaviour continued to be cautious, particularly
in Sweden and Denmark.
Central and Southern Europe
In Central and Southern Europe, first-quarter net sales fell by 2 percent to
EUR 2,001 thousand. Retail sales declined by 16 percent. Wholesale sales were
on a par with the same period last year. Sales grew in France and Italy, but
fell in the UK and Germany.
North America
First-quarter net sales in North America grew by 49 percent and were EUR 1,871
thousand. In terms of the sales currency (mostly the US dollar), growth
amounted to roughly 48 percent. Comparable sales by company-owned stores fell
by 4 percent. Wholesale sales declined by 3 percent. The growth in net sales
came from the four company-owned stores opened in the United States in the
second half of 2012 and the shop-in-shop opened in Toronto, Canada.
Asia-Pacific region
Net sales in the Asia-Pacific region grew in the first quarter by 32 percent
and were EUR 4,473 thousand. Wholesale sales rose by 18 percent. Sales were
improved by the opening in 2012 of two new stores in Japan, a store opened in
Hong Kong, and investments in Australia. Net sales were also boosted by two
company-owned stores opened in Australia at the end of 2012.
FINANCIAL RESULT
The Group's financial result is typically weak during the first quarter because
net sales are low relative to operating expenses for seasonal reasons, in
addition to which profits from retail operations in particular are generated
predominantly in the second half of the year. This was emphasised during the
period under review, as a larger proportion of net sales than before came from
retail. In the first quarter of 2013, the Group's operating result was EUR
-1,290 thousand (-935). Operating result was weakened by the losses posted by
stores in the start-up phase in the United States, a decline in comparable
retail sales in Finland, costs related to business expansion, and a downturn in
wholesale sales in Finland, Scandinavia and the United States. Operating result
was improved by growth in retail sales in Finland boosted by the new stores
opened in 2012 and a rise in wholesale sales in the Asia-Pacific region.
Marketing expenses during the period under review were EUR 939 thousand
(1,024), or 5 percent of the Group's net sales (5).
The Group's depreciation grew due to considerable investments during the past
few years and stood at EUR 1,105 thousand (771), representing 5 percent of net
sales (4).
Operating result margin was -6.2 percent (-5.0).
Net financial income was EUR 35 thousand (-205), or 0 percent of net sales (1).
Result for the review period before taxes was EUR -1,255 thousand (-1,140).
Result after taxes was EUR -1,129 thousand (-820) and earnings per share were
EUR -0.14 (-0.10).
BALANCE SHEET
The consolidated balance sheet total as at 31 March 2013 was EUR 53,686
thousand (54,849). Equity attributable to the equity holders of the parent
company was EUR 28,865 thousand (31,815), or EUR 3.57 per share (3.96).
Non-current assets at the end of March 2013 were EUR 24,681 thousand (22,449).
As of March 2012, tangible assets include a finance lease asset related to the
new, 30-year land lease on the property of the Helsinki head office and
printing factory. The book value of the finance lease asset at the end of the
review period was EUR 3,316 thousand.
At the end of the period under review, net working capital was EUR 16,950
thousand (21,299). Inventories were EUR 18,151 thousand (21,654).
CASH FLOW AND FINANCING
In the first quarter, cash flow from operating activities was EUR -2,296
thousand (-2,581), or EUR -0.28 per share (-0.31). Cash flow before cash flow
from financing activities was EUR -1,930 thousand (-4,737).
The Group's financial liabilities at the end of the period under review stood
at EUR 12,263 thousand (13,447). As of March 2012, non-current liabilities also
include a finance lease liability related to the new, 30-year land lease on the
property of the Helsinki head office and printing factory. The present value of
the finance lease liability at the end of the review period was EUR 3,376
thousand.
At the end of the period under review, the Group's cash and cash equivalents
amounted to EUR 2,926 thousand (1,944). In addition, the Group had unused
committed credit lines of EUR 7,807 thousand (6,995).
The Group's equity ratio at the end of the period was 53.8 percent (57.8).
Gearing was 43.8 percent (36.2).
INVESTMENTS
The Group's gross investments in the first quarter were EUR 761 thousand
(2,219) or 4 percent of net sales (12). Most of the investments were devoted to
building store premises and to refurbishing the property in Herttoniemi.
PERSONNEL
In the first quarter of 2013, the number of employees averaged 521 (452). At
the end of the period, the Group had 517 employees (470), of whom 96 worked
outside Finland (70). The number of employees working outside Finland was
broken down as follows: Scandinavia 27 (20), Central and Southern Europe 13
(13), North America 44 (35) and Asia-Pacific 12 (2). The personnel at
company-owned stores totalled 222 at the end of the period (185).
STATUTORY EMPLOYER-EMPLOYEE NEGOTIATIONS REGARDING MARIMEKKO'S OPERATIONS IN
SULKAVA AND KITEE
During the period, Marimekko initiated statutory employer-employee negotiations
on potential permanent staff reductions concerning the personnel of its
manufacturing operations located in Sulkava and Kitee, Finland as well as the
adjacent factory outlets. The negotiations relate to the possible closure of
Marimekko's production plants in Sulkava and Kitee. The personnel of
Marimekko's textile printing factory in Helsinki are not affected by the
negotiations. The closure of the production plants and factory outlets could
result in a permanent reduction of 60 employees at the most. The aim of these
planned actions is to secure the future competitiveness of the company's
business.
SHARES AND SHAREHOLDERS
Share capital and number of shares
At the end of March 2013, 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 8,089,610.
Shareholdings
According to the book-entry register, Marimekko had 7,486 shareholders at the
end of March 2013 (6,976). Of the shares, 20.9 percent were owned by
nominee-registered or non-Finnish holders (28.6). The number of shares owned
either directly or indirectly by members of the Board of Directors and the
President and CEO of the company was 1,338,930 (1,163,930), representing 16.6
percent of the number and voting rights of the company's shares (14.5).
The largest shareholders according to the book-entry register on 31 March 2013
Number of shares Percentage of shares
and votes and votes
--------------------------------------------------------------------------------
1. Muotitila Ltd 1,297,700 16.04
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2. Semerca Investments SA 850,377 10.51
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3. Varma Mutual Employment Pension 385,920 4.77
Insurance Company
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4. ODIN Finland 344,251 4.26
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5. Keva 245,845 3.04
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6. Veritas Pension Insurance Company 220,000 2.72
--------------------------------------------------------------------------------
7. Ilmarinen Mutual Pension 215,419 2.66
Insurance Company
--------------------------------------------------------------------------------
8. Danske Fund Finnish Small Cap 155,000 1.92
--------------------------------------------------------------------------------
9. OP-Finland Small Firm Fund 150,414 1.86
--------------------------------------------------------------------------------
10. Mutual Fund Tapiola Finland 111,395 1.38
--------------------------------------------------------------------------------
Total 3,976,321 49.15
--------------------------------------------------------------------------------
Nominee-registered and 1,692,933 20.93
non-Finnish holders
--------------------------------------------------------------------------------
Other 2,420,356 29.92
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Total 8,089,610 100.00
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Share trading and the company's market capitalisation
In the first quarter of 2013, a total of 206,845 Marimekko shares were traded,
representing 2.6 percent of the shares outstanding. The total value of
Marimekko's share turnover was EUR 2,672,343. The lowest price of the Marimekko
share was EUR 11.03, the highest was EUR 14.54 and the average price was EUR
12.92. At the end of March, the closing price of the share was EUR 11.24. The
company's market capitalisation on 31 March 2013 was EUR 90,927,216
(108,540,000).
Authorisations
At the end of the period, Marimekko's Board of Directors had an authorisation,
granted by the Annual General Meeting of 17 April 2012, 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 authorisation may not exceed
150,000 shares. The authorisation is in effect for two years from the date of
the Annual General Meeting's resolution. Marimekko arranged a personnel share
offering in 2012, in which a total of 49,610 new shares were subscribed for.
EVENTS AFTER THE END OF THE PERIOD UNDER REVIEW
Resolutions of the Annual General Meeting
The Annual General Meeting of Marimekko Corporation on 23 April 2013 adopted
the financial statements for 2012 and discharged the members of the Board of
Directors and the President and CEOfrom liability. The Annual General Meeting
approved the Board of Directors' proposal to pay a dividend of EUR 0.25 per
share for the 2012 financial year, totalling EUR 2,022,403. The dividend
payment record date was 26 April 2013 and the dividend payment date is 7 May
2013.
The number of members of the Board of Directors was confirmed as six. Elina
Björklund, Arthur Engel, Ami Hasan, Mika Ihamuotila, Joakim Karske and Pekka
Lundmark were re-elected to the Board. Pekka Lundmark serves as chairman and
Mika Ihamuotila as deputy chairman. The term in office of the members of the
Board of Directors lasts until the closing of the Annual General Meeting
following the one at which they were elected.
It was decided that the annual remuneration payable to the members of the Board
would remain unchanged from the previous year and be as follows: EUR 30,000 to
the chairman and EUR 20,000 to the other members. According to the resolution
by the Annual General Meeting, approximately 40 percent of the annual
remuneration will be paid in Marimekko Corporation's shares acquired from the
market and the remainder in cash. The shares will be acquired directly on
behalf of the Board members within two weeks from the release of the interim
report for January 1 - March 31, 2013 or, if this is not possible due to
insider regulations, on the first possible date thereafter. It was also
resolved that the President and CEO of the company will not receive any
remuneration for membership of the Board of Directors.
The Annual General Meeting voted to re-elect PricewaterhouseCoopers Oy,
Authorised Public Accountants, as the company's auditor and that the auditor's
fee would be paid as per invoice. Kim Karhu, Authorised Public Accountant,
continues as chief auditor.
MAJOR RISKS AND FACTORS OF UNCERTAINTY
The key strategic risks for the near future are associated with overall
economic trends and the consequent uncertainty in the operating environment as
well as the management of the company's expansion. The global economic cycle
and factors of uncertainty affect consumers' purchasing behaviour and buying
power in all of the company's market areas. The severe problems of the
international financial markets dampen the prospects for retail sales as well
as Marimekko's growth and earnings outlook.
Marimekko is undergoing a phase of extensive internationalisation and change.
The distribution of products is being expanded in all key market areas. Unlike
before, the focus of growth has increasingly been on opening company-owned
stores outside Finland. This calls for larger or brand-new country
organisations in these market areas, which will exert a 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, inventories, and
the company's fixed costs. 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, partnerships and the
choice of partners in the company's key market areas also involve risks.
The company's ability to develop and commercialise new products that meet
consumers' expectations while 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 new products, the share of in-house
production has diminished, and the company uses subcontractors for its
manufacturing 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, changes in cost
structure, customers' liquidity, and changes in exchange rates may have an
impact on the company's financial status.
MARKET OUTLOOK AND GROWTH TARGETS
The widespread uncertainty over the global economy is forecast to continue, and
this may influence consumers' purchasing behaviour in all of Marimekko's market
areas. The prospects for the economic trend in Europe have deteriorated, and
growth in the region will be slow. In the United States and Asia, economic
forecasts are markedly better than in Europe, but growth is fairly slow. Market
conditions in Finland are moderate, but the economic prospects for the business
community for the next few months are strikingly cautious. Economic conditions
are expected to remain weak, and retail sales are forecast to decline.
(Confederation of Finnish Industries EK: Business Tendency Survey, February
2013). The sluggish trend in Marimekko's own stores in Finland at the end of
2012 and a decline in comparable retail sales during the first quarter of 2013,
combined with poor consumer confidence, cast a shadow over prospects in Finland
for this year.
The stores opened in 2012 and the other considerable investments made in the
expansion of the distribution network will generate a marked increase in sales
in 2013. The main thrust in expansion during 2013 will be on openings of
retailer-owned Marimekko stores and shop-in-shops. Furthermore, the company
will invest in developing the business of the stores it opened in 2012. The aim
is to open 15 to 24 Marimekko stores and shop-in-shops this year, 4 to 6 of
which will be company-owned.
The planned total investments for 2013 of the Marimekko Group are estimated as
being in excess of EUR 3 million. The majority of investments will be directed
at building new store premises and purchasing new furniture.
FINANCIAL GUIDANCE
Due to the current market conditions and the change undergone by the company
recently, it is very difficult to forecast the financial result for 2013. The
financial guidance for the whole of 2013 remains unchanged: the Marimekko
Group's net sales are estimated to grow by over 5 percent and operating profit
is forecast to be, at the most, at the same level as in 2012. The increased
proportion of retail sales will further boost the seasonal nature of business,
so the major portion of operating profit will, as is typical, accrue in the
second half of the year.
Helsinki, 7 May 2013
MARIMEKKO CORPORATION
Board of Directors
INTERIM REPORT 1 JANUARY - 31 MARCH 2013, TABLE SECTION
The information presented in the interim report has not been audited. There may
be differences in totals due to rounding to the nearest thousand euros.
APPENDICES
Accounting principles
Formulas for 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
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. The same accounting
principles were applied as in the 2012 financial statements , although at the
start of the financial year the company adopted certain new and amended IFRS
standards as described in the financial statements for 2012. The adoption of
new and updated standards has had no effect on the figures stated during the
period under review.
FORMULAS FOR KEY FIGURES
Earnings per share (EPS), EUR:
(Profit before taxes - income taxes) / Number of shares (average for the
financial year)
Equity per share, EUR:
Shareholders' equity / Number of shares, 31 March
Return on equity (ROE), %:
(Profit before taxes - income taxes) X 100 / Shareholders' equity (average for
the financial year)
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
year))
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 - current tax liability
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 1-3/20 1-3/20 Change 1-12/2
13 12 , % 012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET SALES 20,710 18,808 10 88,471
--------------------------------------------------------------------------------
Other operating income 56 1 97
--------------------------------------------------------------------------------
Increase or decrease in inventories of completed 416 - 2,192
and unfinished products
--------------------------------------------------------------------------------
Raw materials and consumables 8,590 7,063 22 29,515
--------------------------------------------------------------------------------
Employee benefit expenses 6,193 5,703 9 24,384
--------------------------------------------------------------------------------
Depreciation 1,105 771 43 3,550
--------------------------------------------------------------------------------
Other operating expenses 6,583 6,207 6 26,908
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OPERATING RESULT -1,290 -935 -38 2,019
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 72 6 48
--------------------------------------------------------------------------------
Financial expenses -38 -211 -82 -654
--------------------------------------------------------------------------------
35 -205 -117 606
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RESULT BEFORE TAXES -1,255 -1,140 -10 1,413
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -126 -320 -61 313
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET RESULT FOR THE PERIOD -1,129 -820 -38 1,100
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net result to equity holders of -1,129 -820 -38 1,100
the parent company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Basic and diluted earnings per share calculated -0.14 -0.10 -37 0.14
on the result attributable to equity holders of
the parent company, EUR
--------------------------------------------------------------------------------
COMPREHENSIVE CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 1-3/20 1-3/20 Change 1-12/2
13 12 , % 012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net result for the period -1,129 -820 -38 1,100
--------------------------------------------------------------------------------
Items that could be reclassified to profit or
loss at a future point in time
--------------------------------------------------------------------------------
Translation differences -2 -28 -93 10
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMPREHENSIVE RESULT FOR THE PERIOD -1,131 -848 -33 1,110
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net result to equity holders of -1,131 -848 -33 1,110
the parent company
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 31.3.2013 31.3.2012 31.12.2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NON-CURRENT ASSETS
--------------------------------------------------------------------------------
Intangible assets 2,535 2,008 2,663
--------------------------------------------------------------------------------
Tangible assets 21,759 20,163 21,976
--------------------------------------------------------------------------------
Available-for-sale financial assets 16 16 16
--------------------------------------------------------------------------------
Deferred tax assets 371 262 322
--------------------------------------------------------------------------------
24,681 22,449 24,977
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CURRENT ASSETS
--------------------------------------------------------------------------------
Inventories 18,151 21,654 18,947
--------------------------------------------------------------------------------
Trade and other receivables 7,694 8,293 6,571
--------------------------------------------------------------------------------
Current tax assets 234 509 1,360
--------------------------------------------------------------------------------
Cash and cash equivalents 2,926 1,944 3,106
--------------------------------------------------------------------------------
29,005 32,400 29,984
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSETS, TOTAL 53,686 54,849 54,961
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT COMPANY
--------------------------------------------------------------------------------
Share capital 8,040 8,040 8,040
--------------------------------------------------------------------------------
Invested non-restricted equity reserve 502 - 502
--------------------------------------------------------------------------------
Translation differences -10 -46 -8
--------------------------------------------------------------------------------
Retained earnings 20,333 23,821 21,462
--------------------------------------------------------------------------------
Shareholders' equity, total 28,865 31,815 29,996
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NON-CURRENT LIABILITIES
--------------------------------------------------------------------------------
Deferred tax liabilities 163 430 480
--------------------------------------------------------------------------------
Financial liabilities 12,193 13,380 9,317
--------------------------------------------------------------------------------
Finance lease liabilities 3,306 - 3,324
--------------------------------------------------------------------------------
15,662 13,810 13,121
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CURRENT LIABILITIES
--------------------------------------------------------------------------------
Trade and other payables 9,089 9,142 11,775
--------------------------------------------------------------------------------
Finance lease liabilities 70 67 69
--------------------------------------------------------------------------------
Current tax liabilities - 15 -
--------------------------------------------------------------------------------
9,159 9,224 11,844
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities, total 24,821 23,034 24,965
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES, TOTAL 53,686 54,849 54,961
--------------------------------------------------------------------------------
The Group has no liabilities resulting from derivative contracts, and there are
no outstanding guarantees or any other contingent liabilities which have been
granted on behalf of the management of the company or its shareholders.
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1,000) 1-3/201 1-3/201 1-12/201
3 2 2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net result for the period -1,129 -820 1,100
--------------------------------------------------------------------------------
Adjustments
--------------------------------------------------------------------------------
Depreciation according to plan 1,105 771 3,550
--------------------------------------------------------------------------------
Other non-cash transactions 143
--------------------------------------------------------------------------------
Financial income and expenses -35 205 606
--------------------------------------------------------------------------------
Taxes -126 -320 313
--------------------------------------------------------------------------------
Cash flow before change in working capital -185 -164 5,712
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in working capital -1,838 -2,097 4,674
--------------------------------------------------------------------------------
Increase (-) / decrease (+) in current 315 -359 930
non-interest-bearing trade receivables
--------------------------------------------------------------------------------
Increase (-) / decrease (+) in inventories 796 -307 2,401
--------------------------------------------------------------------------------
Increase (+) / decrease (-) in current -2,949 -1,431 1,343
non-interest-bearing liabilities
--------------------------------------------------------------------------------
Cash flow from operating activities before financial -2,023 -2,261 10,386
items and taxes
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Paid interest and payments on other financial -64 -211 -650
expenses
--------------------------------------------------------------------------------
Interest received 24 6 47
--------------------------------------------------------------------------------
Taxes paid -234 -52 -1,178
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES -2,296 -2,518 8,605
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Investments in tangible and intangible assets -761 -2,219 -7,572
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES -761 -2,219 -7,572
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Proceeds from share issue - - 502
--------------------------------------------------------------------------------
Long-term loans drawn 2,876 5,061 4,373
--------------------------------------------------------------------------------
Finance lease drawn 1 - -
--------------------------------------------------------------------------------
Dividends paid - - -4,422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES 2,877 5,061 453
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in cash and cash equivalents -180 324 1,486
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the 3,106 1,620 1,620
period
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 2,926 1,944 3,106
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(EUR 1,000) Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
Share Invested Translation Retained Shareholde
capita non-restricted differences earnings rs'
l equity reserve equity,
total
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' 8,040 -18 24,641 32,663
equity
1 January 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Comprehensive
result
--------------------------------------------------------------------------------
Net result for the -820 -820
period
--------------------------------------------------------------------------------
Translation -28 -28
differences
--------------------------------------------------------------------------------
Total -46 -820 -848
comprehensive
result for the
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with
owners
--------------------------------------------------------------------------------
Dividends paid
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' 8,040 -46 23,821 31,815
equity
31 March 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' 8,040 502 -8 21,462 29,996
equity
1 January 2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Comprehensive
result
--------------------------------------------------------------------------------
Net result for the -1,129 -1,129
period
--------------------------------------------------------------------------------
Translation -2 -2
differences
--------------------------------------------------------------------------------
Total -2 -1,129 -1,131
comprehensive
result for the
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Transactions with
owners
--------------------------------------------------------------------------------
Dividends paid
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' 8,040 502 -10 20,333 28,865
equity
31 March 2013
--------------------------------------------------------------------------------
KEY FIGURES
1-3/2013 1-3/2012 Change, % 1-12/2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR -0.14 -0.10 -37 0.14
--------------------------------------------------------------------------------
Equity per share, EUR 3.57 3.96 -10 3.71
--------------------------------------------------------------------------------
Return on equity (ROE), % -15.3 -10.2 3.5
--------------------------------------------------------------------------------
Return on investment (ROI), % -10.8 -9.0 4.1
--------------------------------------------------------------------------------
Equity ratio, % 53.8 57.8 54.6
--------------------------------------------------------------------------------
Gearing, % 43.8 36.2 32.0
--------------------------------------------------------------------------------
Gross investments, EUR 1,000 761 2,219 -66 7,582
--------------------------------------------------------------------------------
Gross investments, % of net sales 4 12 9
--------------------------------------------------------------------------------
Contingent liabilities, EUR 1,000 41,276 26,971 53 39,986
--------------------------------------------------------------------------------
Average personnel 521 452 15 497
--------------------------------------------------------------------------------
Personnel at the end of the period 517 470 10 535
--------------------------------------------------------------------------------
Number of shares at the end of the 8,089,610 8,040,000 8,089,610
period
--------------------------------------------------------------------------------
Number of shares outstanding, 8,089,610 8,040,000 8,046,252
average
--------------------------------------------------------------------------------
SEGMENT INFORMATION
(EUR 1,000) 1-3/2013 1-3/2012 Change, % 1-12/2012
------------------------------------------------------------
------------------------------------------------------------
Marimekko business
------------------------------------------------------------
Net sales 20,710 18,808 10 88,471
------------------------------------------------------------
Operating result -1,290 -935 -38 2,019
------------------------------------------------------------
Assets 53,686 54,849 -2 54,961
------------------------------------------------------------
NET SALES BY MARKET AREA
(EUR 1,000) 1-3/2013 1-3/2012 Change, % 1-12/2012
---------------------------------------------------------------------
Finland 10,486 10,228 3 52,344
---------------------------------------------------------------------
Retail sales 6,296 5,816 8 34,000
---------------------------------------------------------------------
Wholesale sales 4,070 4,270 -5 17,546
---------------------------------------------------------------------
Royalties 120 142 -16 798
---------------------------------------------------------------------
---------------------------------------------------------------------
Scandinavia 1,879 1,902 -1 7,856
---------------------------------------------------------------------
Retail sales 805 536 50 3,299
---------------------------------------------------------------------
Wholesale sales 1,074 1,363 -21 4,554
---------------------------------------------------------------------
Royalties - 3 -100 3
---------------------------------------------------------------------
---------------------------------------------------------------------
Central and Southern Europe 2,001 2,048 -2 7,783
---------------------------------------------------------------------
Retail sales 284 340 -17 1,492
---------------------------------------------------------------------
Wholesale sales 1,692 1,680 1 6,185
---------------------------------------------------------------------
Royalties 25 28 -11 106
---------------------------------------------------------------------
---------------------------------------------------------------------
North America 1,871 1,252 49 7,743
---------------------------------------------------------------------
Retail sales 1,103 466 137 4,020
---------------------------------------------------------------------
Wholesale sales 657 677 -3 3,193
---------------------------------------------------------------------
Royalties 111 109 2 530
---------------------------------------------------------------------
---------------------------------------------------------------------
Asia-Pacific 4,473 3,378 32 12,745
---------------------------------------------------------------------
Retail sales 504 - 655
---------------------------------------------------------------------
Wholesale sales 3,969 3,376 18 12,087
---------------------------------------------------------------------
Royalties - 2 -100 3
---------------------------------------------------------------------
---------------------------------------------------------------------
International sales, total 10,224 8,580 19 36,127
---------------------------------------------------------------------
Retail sales 2,696 1,342 101 9,466
---------------------------------------------------------------------
Wholesale sales 7,392 7,096 4 26,019
---------------------------------------------------------------------
Royalties 136 142 -4 642
---------------------------------------------------------------------
---------------------------------------------------------------------
TOTAL 20,710 18,808 10 88,471
---------------------------------------------------------------------
Retail sales 8,992 7,158 26 43,466
---------------------------------------------------------------------
Wholesale sales 11,462 11,366 1 43,565
---------------------------------------------------------------------
Royalties 256 284 -10 1,440
---------------------------------------------------------------------
NET SALES BY PRODUCT LINE
(EUR 1,000) 1-3/2013 1-3/2012 Change, % 1-12/2012
-------------------------------------------------------------
-------------------------------------------------------------
Clothing 8,025 6,978 15 30,936
-------------------------------------------------------------
Interior decoration 8,187 7,833 5 38,122
-------------------------------------------------------------
Bags 4,498 3,997 13 19,413
-------------------------------------------------------------
TOTAL 20,710 18,808 10 88,471
-------------------------------------------------------------
QUARTERLY TREND IN NET SALES AND EARNINGS
(EUR 1,000) 1-3/2013 10-12/2012 7-9/2012 4-6/2012
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 20,710 25,748 24,214 19,701
-----------------------------------------------------------------
Operating result -1,290 13 3,486 -545
-----------------------------------------------------------------
Earnings per share, EUR -0.14 -0.04 0.31 -0.03
-----------------------------------------------------------------
-----------------------------------------------------------------
(EUR 1,000) 1-3/2012 10-12/2011 7-9/2011 4-6/2011
-----------------------------------------------------------------
-----------------------------------------------------------------
Net sales 18,808 23,581 19,812 16,815
-----------------------------------------------------------------
Operating result -935 1,645 2,321 -798
-----------------------------------------------------------------
Earnings per share, EUR -0.10 0.18 0.21 -0.07
-----------------------------------------------------------------
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