Stockmann - Financial Statement Release

Stockmann Group's Financial Statement Bulletin 2014

A difficult year behind us - new direction taken

Helsinki, Finland, 2015-02-13 07:00 CET (GLOBE NEWSWIRE) -- STOCKMANN plc,
Financial Statement Release 13.2.2015 at 8:00 EET 

October-December 2014:
Consolidated revenue was EUR 548.5 million (EUR 607.8 million), down by 9.7 per
cent, or down 4.7 per cent at comparable exchange rates. 
Operating result excluding non-recurring items (NRI) was EUR 12.2 million (EUR
48.3 million). 

January-December 2014:
Consolidated revenue was EUR 1 844.5 million (EUR 2 037.1 million), down by 9.5
per cent, or down 5.5 per cent at comparable exchange rates. 
Operating result excluding NRI was EUR -42.9 million (EUR 54.4 million).
Result for the period excluding NRI was EUR -63.4 million (EUR 22.1 million).
Earnings per share excluding NRI were EUR -0.88 (EUR 0.30).
Non-recurring items were EUR -39.3 million or EUR -36.4 million with tax impact
(EUR 26.3 million due to Lindex's tax refund) 
Reported earnings per share were EUR -1.39 (EUR 0.67) including NRI of EUR
-0.51 (EUR 0.37). 

The Board of Directors will propose to the Annual General Meeting that no
dividend be paid on the 2014 result. 

Outlook for 2015:
Due to planned structural changes, Stockmann expects the Group's revenue in
2015 to be down on 2014. Operating result excluding non-recurring items is
expected to improve, but to remain negative in 2015 due to the performance of
the Stockmann Retail division. Operating results for the Real Estate and
Fashion Chains divisions are expected to be positive. 

CEO Per Thelin:
Stockmann had a difficult year in 2014, especially in its main markets, Finland
and Russia. With the retail sector experiencing challenging times, our own
actions have not been sufficient to respond to the weak economy and changes in
the competitive environment. During the final quarter of 2014, the Russian
rouble's record-low exchange rate further weakened Stockmann's earnings. 

Now we are focusing on the future. During 2014, we started a major strategy
process with the aim of improving Stockmann's long-term competitiveness.
Structural measures are currently being taken in line with the new direction.
We are leasing out retail space to tenants, which will increase the value of
our properties and bring added value to the customer. The Stockmann Retail and
Real Estate divisions' strong cooperation will play a key role in this. I am
glad that we have found a committed owner for Seppälä, as this will enable the
fashion chain to continue to operate in its home markets. 

The past year proved that Stockmann's operations must be more agile, and we
must focus more on sales and customer service, both in the department stores
and online, in order to make good on our promise of offering a first-class
shopping experience. Carrying out this strategy will require us to make tough
choices on where to focus our efforts in the future. We are planning to close
down three department stores in Russia and the one in Oulu. Lindex is also
planning to withdraw from Russia. These plans are part of the efficiency
programme that we are launching, in order to be profitable again. 

The year 2015 will continue to be challenging, particularly in view of the many
changes to come. The planned actions will take us in the right direction,
although the turnaround will not happen overnight. Therefore we expect the
operating result, excluding non-recurring items, to improve, but to remain
negative in 2015. The effects of the new strategy will start to be reflected in
Stockmann's performance mostly beginning in 2016. 

Strategy process

Stockmann started to revise its strategy in summer 2014 in order to improve the
Group's long-term competitiveness. The strategic direction was set in late
2014, and actions are being taken in line with the new direction. 

A new operating structure under three divisions - Stockmann Retail, Real Estate
and Fashion Chains - was taken into use as of 1 January 2015. Stockmann will
start reporting the fair market value of the Group's real estate properties
from 2015 onwards. On 1 January 2015, the fair value of the properties in
Helsinki, St Petersburg, Tallinn and Riga totalled EUR 908.3 million.
Depreciation of the real estate will be calculated on the market value, and
therefore the Group's 2015 depreciation will increase compared to 2014. 

Stockmann's strategic goal is to change the company's legal structure in line
with the new operating structure. As a result, the Board of Directors has
decided to investigate the possibility to incorporate Stockmann's real estate
and retail operations into separate subsidiaries. 

Stockmann Retail will focus on the Stockmann department stores and
stockmann.com online store, with the goal of offering a first-class shopping
experience. Stockmann's future selection will have a stronger focus on fashion,
cosmetics, food in Stockmann Delicatessen and home products. The offering will
be aimed more closely at customers who value convenience, quality and
inspiration. 

Stockmann will gradually withdraw from its non-core businesses. A new owner is
being sought for the Hobby Hall distance retail business, as announced earlier.
In the Group's balance sheet at 31 December 2014, Hobby Hall's assets and
liabilities are classified as assets held for sale. The Stockmann Beauty
cosmetics stores will be closed down by the end of May. 

The Real Estate division's aim is to increase the value of properties by
maximising cash flows from leasing operations, and to enhance the customer
experience with goods and services from attractive new retail tenants.
Stockmann has agreed to lease retail space in its department stores to Expert
ASA Oy. Expert will open its store in the Helsinki city centre store premises
in May 2015, in Turku by the end of June and in Tampere during the autumn. 

The Fashion Chains division currently includes the Lindex and Seppälä
businesses. Seppälä's operations are being downsized and focused on its key
markets, Finland and Estonia. On 2 February 2015, Stockmann signed a letter of
intent to sell the ownership of Seppälä to Seppälä's current CEO, Eveliina
Melentjeff, and her husband. The management buyout will take place on 1 April
2015 and will cover 82 Seppälä stores in Finland and 20 stores in Estonia. In
addition, 41 stores in Finland will be closed in 2015. Due to the lease
liabilities and other costs related to the store closures, Stockmann recorded
EUR 24.7 million as non-recurring expenses in its financial statements. 

By focusing on Lindex, Stockmann aims to give it the opportunity to grow into a
truly global fashion brand. Lindex will be developed independently, under the
governance of an operational Board of Directors, which has members representing
Stockmann and external members. 

Stockmann has decided to launch an efficiency programme including four planned
department store closures, and the closure of Lindex's operations in Russia,
with an annual cost savings target of EUR 50 million. Information on the
programme will be published in a separate stock exchange release on 13 February
2015. 

Key figures

                                                10-12/  10-12/    1-12/    1-12/
                                                  2014    2013     2014     2013
Revenue, EUR mill.                               548.5   607.8  1 844.5  2 037.1
Revenue growth, per cent                          -9.7    -5.6     -9.5     -3.7
Gross margin, per cent                            43.8    49.5     46.6     48.6
Operating result, EUR mill.                      -27.1    48.3    -82.2     54.4
Net financial costs, EUR mill.                     4.0     9.0     21.4     27.6
Result before tax, EUR mill.                     -31.1    39.3   -103.6     26.8
Result for the period, EUR mill.                 -38.1    36.5    -99.8     48.4
Earnings per share,                              -0.53    0.51    -1.39     0.67
undiluted, EUR                                                                  
Equity per share, EUR                                             10.55    12.42
Cash flow from operating activities, EUR mill.   116.9   183.2     29.6    125.4
Capital expenditure, EUR mill.                    11.1    13.1     53.8     56.8
Net gearing, per cent                                             105.4     87.3
Equity ratio, per cent                                             39.3     43.8
Number of shares, undiluted, weighted average,                   72 049   72 049
 1 000 pc                                                                       
Return on capital employed,                                        -4.9      3.4
rolling 12 months                                                               
Personnel, average                              14 620  15 362   14 533   14 963

This company announcement is a summary of the Stockmann Financial Statements
Bulletin 2014 and includes the most relevant information of the bulletin. The
complete bulletin is attached to this release as a pdf file and is also
available on the company's website at stockmanngroup.com. 

Annual General Meeting 2015
The Annual General Meeting of Stockmann plc will be held on Thursday 19 March
2015 at 2 p.m. at Finlandia Hall in Helsinki, Finland (address: Mannerheimintie
13). Notice of the Annual General Meeting which includes proposals to the
meeting is published as a separate stock exchange release on 13 February 2015. 

Financial releases in 2015
Stockmann will publish its financial statements, the report by the Board of
Directors and an electronic version of the Annual Report 2014 on the company's
website at stockmanngroup.com in the week starting on 23 February 2015. The
printed Annual Report will be available in the week starting on 9 March 2015. 

The 2015 interim reports will be released on 29 April 2015, 12 August 2015, and
28 October 2015. 

Press and analyst briefing
A press and analyst briefing in Finnish will be held today, on 13 February 2015
at 9:15 a.m. at the Fazer À la Carte restaurant on the 8th floor of Stockmann's
Helsinki city centre department store, Aleksanterinkatu 52. 

Conference call and webcast
CEO Per Thelin and CFO Pekka Vähähyyppä will host a conference call in English
on 13 February 2015, at 11:15 a.m. EET presenting the financial statements. To
participate in the conference call, please dial one of the numbers below 5-10
minutes before the call begins. The presentation can be followed by this linkor
on the address stockmanngroup.com. 

Finland: +358 9 6937 9590
Sweden: +46 8 5065 3937
United Kingdom: +44 20 3427 1915
Germany: +49 69 2222 10624
France: +33 1 76 77 22 26
United States of America: +1212 444 0481

Confirmation code: 3201296

Further information:
Per Thelin, CEO, tel. +358 9 121 5801
Pekka Vähähyyppä, CFO, tel. +358 9 121 3351
Nora Malin, Director, Corporate Communications, tel. +358 9 121 3558

www.stockmanngroup.com


STOCKMANN plc

Per Thelin
CEO


Distribution:
Nasdaq Helsinki
Principal media

Attachments:

OVK Q4 2014 ENG.pdf