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
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).
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.
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.
|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,
|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, 1 000 pc||72 049||72 049|
Return on capital employed,
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 link or 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
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
OVK Q4 2014 ENG.pdf