CEO Lauri Veijalainen, Financial Statements 2018 (14.2.2019):
The Stockmann Group’s adjusted operating result improved by EUR 16 million compared to 2017. The improvement was mainly due to Lindex’s successful turnaround. Real Estate continued its steady performance.
Lindex managed to grow its market share in its main markets, and its online sales continued to grow well throughout the year. Lindex’s adjusted operating profit almost doubled, due to growth in sales, a better gross margin and cost savings.
Real Estate proceeded with its planned projects on real estate divestments. In May, Stockmann sold its Book House property in the centre of Helsinki. The strategy of withdrawal from Russia was fulfilled in October, when we signed an agreement for the sale of the Nevsky Centre shopping centre in St Petersburg. The transaction was completed in January 2019. The Group’s net debt decreased by nearly EUR 200 million during the year mainly due to the divestment of the Book House and decrease in working capital. The sales proceeds from Nevsky Centre were also used for repaying a bank loan in January 2019.
Stockmann Retail did not achieve a positive result, despite our efforts. Full-year sales in 2018 fell short of our target, to our true disappointment. The operating result weakened mostly in the last quarter of the year, despite good growth in online sales in the quarter. In early 2019, we launched a project aiming at reducing the Group’s expenses by EUR 20 million by the end of the year. The majority of these measures will affect the Retail division.
In 2019, we will continue the implementation of our strategic projects, seek to secure sales and improve the gross margin. We will also accelerate our renewal measures including our digital journey, the effects of which will become visible for our customers during the year.