Stockmann Group’s Interim Report, 1 January - 30 June 2012
Operating profit continued to improve in the second quarter
Helsinki, Finland, 2012-08-10 07:00 CEST (GLOBE NEWSWIRE) --
STOCKMANN plc, Interim Report 10.8.2012 at 8:00 EET
April - June 2012:
Consolidated revenue was up 5.3 per cent to EUR 537.2 million (EUR 510.2 million).
Operating profit was up 16.0 per cent to EUR 29.7 million (EUR 25.6 million).
January - June 2012:
Consolidated revenue was up 7.6 per cent to EUR 987.5 million (EUR 917.9 million).
Operating profit was EUR 13.4 million (EUR -4.4 million).
Result for the period was EUR -2.3 million (EUR -20.1 million).
Earnings per share came to EUR -0.03 (EUR -0.28).
Full-year outlook unchanged: Revenue and operating profit expected to be above the previous year's figures, provided that the market sentiment does not significantly worsen.
CEO Hannu Penttilä:
The Stockmann Group’s revenue continued to grow in the second quarter of 2012. In the Department Store Division the growth was boosted by the successful Crazy Days campaign and the continued good performance in the newest department stores in Russia. Lindex improved its revenue and gained market share in all markets.
We improved operating profit by EUR 4.1 million in the quarter and thus continued the strong performance started earlier this year. Operating profit improved significantly in Russia, despite the loss-making Bestseller operations which will be closed during 2012. Lindex benefitted from successful summer collections and made a clear improvement in its earnings in the quarter. Seppälä’s performance has been weaker than expected. We established a common Fashion Chain Division which aims at accelerating growth and benefiting from synergies in both the Lindex and Seppälä fashion chains.
Market outlook for the second half of the year remains uncertain due to the unresolved European debt crisis. We are, however, well positioned to achieve the targeted revenue and operating profit growth for the full year, provided that the market sentiment does not significantly worsen.
LONG-TERM FINANCIAL TARGETS
The Stockmann Group’s long-term financial targets are: a minimum of 20 per cent return on capital employed, a minimum of 12 per cent operating profit margin, sales growth above the industry average, and an equity ratio of a minimum of 40 per cent. The Board of Directors decided in June 2010 to set the timetable for achieving the long-term targets at 2015.
Due to the continuing economic uncertainty and the unresolved European debt crisis, the Board has now stated that the long-term financial targets will remain as they are, but achieving the targets in the set timetable will not be realistic in the current market environment.
OUTLOOK FOR THE REST OF 2012
The unstable state of the world economy and the unresolved European debt crisis create a challenging basis for assessing the future outlook, especially the long-term retail market development. There are indications of weakening consumer behaviour in particular in Finland where consumers’ confidence in their own economy has declined.
The Russian market is likely to continue to perform better than the Nordic countries, provided mainly that the price of oil does not drop significantly from its current level. The growth of consumer markets in the Baltic countries is expected to continue. However, high uncertainty and weakening consumers’ confidence may continue to affect consumers’ willingness to purchase in all markets.
The market for affordable fashion developed poorly in 2011, particularly in Sweden. The slow performance continued in the first half of 2012. The market is expected to improve in the autumn, compared with the weak second half of 2011.
Stockmann’s decision to discontinue the loss-making Bestseller franchising operation during 2012 will have a minor impact on revenue in Russia, but will improve operating profit from 2013 onwards. Stockmann’s target is to achieve a positive operating profit, excluding Bestseller operations, in Russia in 2012.
During 2012, Stockmann will concentrate on gaining the full benefit of its recently completed capital expenditure projects as well as on the efficient use of capital. Additionally, attention will be given to improving cost efficiency in all units. The Group’s capital expenditure is estimated to be clearly lower than depreciation, and to amount to approximately EUR 50 million in 2012.
Stockmann expects the Group’s revenue and operating profit to be above the figures for 2011, provided that the market sentiment does not significantly worsen.
|Revenue, EUR mill.||537.2||510.2||987.5||917.9||2 005.3|
|Revenue growth, %||5.3||13.0||7.6||11.4||10.1|
|Relative gross margin, %||49.7||49.5||48.9||48.6||48.7|
Net financial costs,
Profit before tax,
Profit for the period,
|Earnings per share, undiluted, EUR||0.26||0.21||-0.03||-0.28||0.43|
|Equity per share, EUR||11.60||11.31||12.11|
|Cash flow from operating activities, EUR mill.||88.2||70.9||14.9||-74.6||66.2|
|Net gearing, %||104.1||114.9||95.3|
|Equity ratio, %||41.0||39.1||42.2|
|Number of shares, undiluted, weighted average, 1 000 pc||71 842||71 150||71 496|
|Return on capital employed, rolling 12 months||5.1||3.9||4.1|
|Personnel, average||15 749||16 072||15 403||15 812||15 964|
This company announcement is a summary of Stockmann’s Interim Report Q2 2012 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 10 August 2012 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 10 August 2012 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.
Hannu Penttilä, CEO, tel. +358 9 121 5801
Pekka Vähähyyppä, CFO, tel. +358 9 121 3351
Q2 2012 ENG.pdf