Stockmann Group’s Interim Report 1 January - 30 September 2013
Decline in operating profit in weak market, tax refund improved earnings per share
Helsinki, Finland, 2013-10-30 07:00 CET (GLOBE NEWSWIRE) --
STOCKMANN plc, Interim Report 30.10.2013 at 8.00 EET
July - September 2013:
Consolidated revenue was EUR 454.4 million (EUR 485.1 million), down 4.6 per cent excluding terminated franchising operations.
Operating profit was EUR 10.7 million (EUR 17.1 million).
January - September 2013:
Consolidated revenue was EUR 1 429.3 million (EUR 1 472.6 million), down 1.4 per cent excluding terminated franchising operations.
Operating profit was EUR 6.1 million (EUR 30.5 million).
Profit for the period was EUR 11.9 million (EUR 5.8 million).
Earnings per share came to EUR 0.16 (EUR 0.08).
Tax refund of EUR 25.1 million for Lindex increased earnings per share by EUR 0.35.
Full-year outlook revised: Stockmann Group’s revenue in 2013 is expected to be slightly down on 2012, excluding the terminated franchising operations. Even though most of Stockmann’s operating profit is generated during the fourth quarter of the year, operating profit for 2013 is not expected to reach the previous year’s level.
Stockmann previously estimated that its revenue would increase in 2013, excluding the terminated franchising operations. Operating profit was not expected to exceed the figure for 2012.
CEO Hannu Penttilä:
“The retail market environment in the third quarter of the year was very weak, particularly in Finland. Consumer confidence remained low and the warm weather affected sales of autumn merchandise. The weakened Russian, Swedish and Norwegian currencies also had a negative effect on Stockmann’s euro-denominated revenue. As a result, the revenue fell short of our target for the quarter.
Among the Stockmann Group’s businesses, Lindex performed best in the difficult market conditions. It gained market share in all main markets and its operating profit was up for the quarter. The Department Store Division’s operating profit was down on 2012. The weakened rouble, in particular, had a negative effect on the gross margin and operating profit. Seppälä, which is currently undergoing changes, also posted a lower operating profit than in 2012.
Our net profit was improved by the tax refund resulting from the Swedish and German tax authorities’ decision to eliminate Lindex’s double taxation in 1999-2005. Consequently, Stockmann’s earnings per share were up significantly.
The department stores’ Crazy Days campaign, which took place after the third quarter, reached a new sales record and revenue grew in all market areas. However, it is uncertain how consumers will behave during the rest of the final quarter, which is the most important for Stockmann’s full-year operating profit. The cost savings measures that were decided on in the spring will continue. Also it is of utmost importance that we implement structural changes to adapt our cost structure to the lower sales volumes.”
Outlook for 2013
The European economy is expected to perform poorly in the rest of 2013, and this will cause uncertainty in retail market performance. Declining purchasing power may further weaken consumer confidence and it seems probable that the market in Finland will experience a long period of low or no growth. The outlook for Sweden is expected to improve slightly towards the end of 2013.
The Russian rouble has weakened and GDP forecasts for the country have been lowered in recent months. As a consequence, the retail market outlook for Russia remains uncertain. The retail market in the Baltic countries has been relatively stable. Low consumer confidence may, however, affect consumers’ willingness to make purchases in all market areas.
Stockmann discontinued the Bestseller franchising in Russia and Zara franchising in Finland, which will slow revenue growth somewhat. In Russia, however, the discontinuation will improve operating profit. Attention will be given to improving cost efficiency particularly in Finland, where a cost savings programme has been initiated. The Group’s capital expenditure is estimated to be lower than depreciation in 2013 and to amount to approximately EUR 60 million for the year.
Stockmann has revised its full-year outlook. Stockmann Group’s revenue in 2013 is expected to be slightly down on 2012, excluding the terminated franchising operations. Even though most of Stockmann’s operating profit is generated during the fourth quarter of the year, operating profit for 2013 is not expected to reach the previous year’s level.
Earlier outlook (published on 16 April 2013): Stockmann expects the Group’s revenue to increase in 2013, excluding the terminated franchising operations. Operating profit is expected to not exceed the figure for 2012.
|Revenue, EUR mill.||454.4||485.1||1 429.3||1 472.6||2 116.4|
|Revenue growth, %||-6.3||5.2||-2.9||6.8||5.5|
|Relative gross margin, %||49.5||50.6||48.2||49.5||49.5|
|Operating profit, EUR mill.||10.7||17.1||6.1||30.5||87.3|
|Net financial costs, EUR mill.||4.1||7.5||18.6||23.8||32.4|
|Profit before tax, EUR mill.||6.5||9.6||-12.5||6.8||54.9|
|Profit for the period, EUR mill.||28.9||8.1||11.9||5.8||53.6|
|Earnings per share, undiluted, EUR||0.40||0.11||0.16||0.08||0.74|
|Equity per share, EUR||11.88||11.75||12.40|
|Cash flow from operating activities, EUR mill.||-47.9||-32.4||-57.8||-17.5||123.7|
|Capital expenditure, EUR mill.||15.3||17.6||43.7||40.9||60.3|
|Net gearing, %||111.5||111.0||90.9|
|Equity ratio, %||39.9||39.1||42.8|
|Number of shares, undiluted, weighted average, 1 000 pc||72 049||71 911||71 945|
Return on capital employed,
rolling 12 months
|Personnel, average||14 685||15 505||14 830||15 437||15 603|
This company announcement is a summary of the Stockmann's Interim Report for 1 January - 30 September 2013 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 30 October 2013 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 30 October 2013 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
OVK Q3 2013 ENG.pdf