STOCKMANN'S ANNUAL GENERAL MEETING, 16 MARCH 2010
STOCKMANN plc Decisions of annual general meeting 16.3.2010 at 18.30
STOCKMANN'S ANNUAL GENERAL MEETING, 16 MARCH 2010
STOCKMANN'S LARGEST INVESTMENTS ARE NEARING COMPLETION
The Annual General Meeting of Stockmann plc, held in Helsinki on 16 March 2010, adopted the financial statements for the financial year 1 January - 31 December 2009, granted release from liability to the responsible officers and resolved to pay a dividend of EUR 0.72 per share for 2009. The Board of Directors' proposals to the Annual General Meeting were approved without changes.
In his review at Stockmann's Annual General Meeting in Helsinki on 16 March 2010, CEO Hannu Penttilä stated that the global economic downturn which began in the latter half of 2008 had left a strong mark on the Stockmann Group's operations during 2009. Demand declined in all markets, in addition to which the values of the key currencies for Stockmann, namely the Russian rouble, the Swedish krona and the Norwegian krone, fell sharply. After brisk growth, the markets of the Baltic countries went into free fall.
Stockmann initiated strong counter measures, and thanks to the success of these, the company survived an extraordinarily challenging year with fairly minor setbacks. The relative gross margin declined by just 0.2 percentage points to 48.1 per cent, consolidated expenses decreased by EUR 53.7 million from the previous year, EUR 84.4 million of capital was released and equity ratio exceeded the target of 40 per cent, reaching 44.1 per cent at the close of the year. Gearing was at the acceptable level of 72 per cent.
Lindex's profit-earning capacity exceeded even Stockmann's own expectations, noted Penttilä. In extremely difficult market conditions, Lindex managed to expand its market share in all of its main markets and to generate the highest operating profit in its history, when calculated in local currencies. In Sweden, Lindex was chosen as the best fashion chain of 2009 and received an award for the best store interior concept. Lindex might well have been a factor, thought Penttilä, in the Stockmann Group's selection as best company of 2009 in the ‘international expansion' category in a competition arranged by the Finnish magazine Suomen Kuvalehti.
During the final quarter of 2009, all of Stockmann's divisions improved their operating profit excluding non-recurring items. With the global economy gradually recovering in 2010, Stockmann expects sales to slowly start growing and the new store openings to accelerate sales towards the end of the year. Operating profit is still expected to be up both during the first quarter and for the full year.
Stockmann has been experiencing the largest investment phase in its history. The year 2010 is the last of four years during which the Group's annual capital expenditure has exceeded EUR 150 million. Once the projects have been completed, Stockmann will move to a stage, starting in 2011, during which the level of annual capital expenditure will drop by about EUR 90-100 million. 2011 will be the first full year of operation for Stockmann's largest investments, which means cash flow will improve considerably.
In the enlargement of the Helsinki department store, the most important new commercial space constructed during the project will be fully operating in November. The renovation works being carried out on the adjacent Keskuskatu in Helsinki will also be completed by the autumn, resulting in a pedestrian zone. The fifth department store in Moscow was opened in March. November will see the opening of the Nevsky Centre, a shopping centre and department store property in St Petersburg with a commercial floor space of five hectares. The Nevsky Centre will house Stockmann's flagship department store in Russia (becoming the second largest Stockmann department store in the entire chain), stores belonging to Stockmann's own fashion chains and stores of renowned chains from outside the Group.
In the autumn, as part of the Stockmann department stores' multichannel strategy, the company will launch the stockmann.com online store alongside Hobby Hall, which is Finland's largest distance retailing store and owned by Stockmann.
In 2011, the Stockmann department store in Ekaterinburg, Russia will be opened following a two-year postponement due to the financial crisis.
Lindex continued its growth last year by opening 34 new stores in existing and new market areas, the latest of which is Slovakia. Lindex's expansion plan for this year includes the opening of about 40 new stores, some by the company itself and some by franchising partners. Franchising stores will be opened in Egypt, Dubai and Bosnia and Herzegovina, which are completely new market areas. In addition to this, Lindex will expand its online store to include Finland. It already expanded its online store from Sweden into Denmark last year. Seppälä will also continue its expansion, opening 5-8 new stores this year.
Payment of dividends
The Annual General Meeting resolved that a dividend of EUR 0.72 per share, or 87.8 per cent of earnings per share, be paid for the 2009 financial year. The dividend will be paid on 7 April 2010 to those shareholders who on the record date for the dividend payout, 19 March 2010, are entered in the shareholder register kept by Euroclear Finland Ltd.
Election of the members of the Board of Directors
The Annual General Meeting resolved, in accordance with the proposal of the Board's Appointments and Compensation Committee, that eight members be elected to seats on the Board. In accordance with the Committee's proposal, the Annual General Meeting re-elected Christoffer Taxell, LL.M., Managing Director Erkki Etola, Managing Director Kaj-Gustaf Bergh, Professor Eva Liljeblom, Managing Director Kari Niemistö, Vice President, Sustainability Carola Teir-Lehtinen and Henry Wiklund, M.Sc. (Econ.), for a term of office valid until the end of the next Annual General Meeting. In addition, Managing Director Charlotta Tallqvist-Cederberg was elected as a new member for the same term.
At its organisational meeting on 16 March 2010, the Board of Directors re-elected Christoffer Taxell as its Chairman and Erkki Etola as its Vice Chairman. The Board of Directors elected Christoffer Taxell Chairman of the Appointments and Compensation Committee and elected Erkki Etola, Charlotta Tallqvist-Cederberg and Henry Wiklund as the other members of the committee.
Jari Härmälä, Authorised Public Accountant, and Henrik Holmbom, Authorised Public Accountant, were re-elected as the auditors. KPMG Oy Ab, a firm of authorised public accountants, will continue as the deputy auditor.
Share option scheme for key personnel
In accordance with the proposal of the Board, the Annual General Meeting resolved that, in deviation from shareholders' pre-emptive rights, the key personnel of Stockmann and its subsidiaries be granted 1 500 000 share options. The deviation from the shareholders' pre-emptive rights is proposed because the share options are part of the incentive and commitment scheme for the Group's key personnel and constitutes an important element in maintaining the Company's competitive advantage on the international recruitment market. Of these share options, 500 000 will be classified as share options 2010A, 500 000 as share options 2010B and 500 000 as share options 2010C. The subscription period for the share options 2010A will be 1 March 2013 - 31 March 2015, for the share options 2010B 1 March 2014 - 31 March 2016 and for the share options 2010C 1 March 2015 - 31 March 2017. Each share option entitles its owner to subscribe for one (1) Stockmann plc Series B share, which means the share options entitle their owners to subscribe a maximum total of 1 500 000 shares. The subscription price for the share option 2010A will be the trade volume weighted average quotation of the company's Series B shares on the Helsinki stock exchange during the period 1 February - 28 February 2010 increased by a minimum of 10 per cent, for the share option 2010B the trade volume weighted average quotation of the company's Series B shares on the Helsinki stock exchange during the period 1 February - 28 February 2011 increased by a minimum of 10 per cent, and for the share option 2010C the trade volume weighted average quotation of the company's Series B shares on the Helsinki stock exchange during the period 1 February - 29 February 2012 increased by a minimum of 10 per cent. The share subscription price of the share optionswill be decreased on each record date for dividend distribution by the amount of dividend decidedafter the beginning of the subscription price determination period but before the share subscription. As a result of the share subscriptions, the company's share capital may increase by a maximum of EUR 3 000 000.
Hannu Penttilä CEO
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