Stockmann Group’s adjusted operating profit improved in 2018 – an impairment of EUR 25 million recorded in goodwill
STOCKMANN plc, Stock Exchange Release 24.1.2019 at 16:45 EET
The Stockmann Group’s adjusted operating profit (EBIT) for 2018 was according to unaudited preliminary information approximately EUR 28 million (2017: 12.3). The operating profit improved from previous year in Lindex and Real Estate, but Stockmann Retail’s operating result was lower than in the previous year mainly due to the weak development in the last quarter. The Group’s revenue for the full year 2018 amounted to approximately EUR 1 019 million (2017: 1 055.9), down by 1% in comparable exchange rates.
Stockmann has concluded an impairment test for its goodwill when preparing its financial statements. As a result, Stockmann will recognise in its last-quarter consolidated income statement an impairment of EUR 25 million in Stockmann Retail’s remaining goodwill. The impairment is due to weakened long-term earnings expectations in Stockmann Retail’s business. The write-down will be reported as an adjustment, and it has no cash flow impact.
Revenue and adjusted operating profit are in line with the guidance published on 26 October 2018: Stockmann expects the Group’s revenue for 2018 to decline from the previous year. Adjusted operating profit is expected to improve in 2018.
Measures to improve profitability continue In 2019, Stockmann continues to improve its performance by streamlining and simplifying its operations in many ways. Stockmann is launching an initiative aimed at reducing the Group's cost level by EUR 20 million by the end of 2019. In addition, the goal is to improve gross margin and accelerate strategic development projects that will deliver visible results to customers during the year. Stockmann has already doubled its selection online and e-commerce will be in a strong focus in 2019 and onwards. Of these measures, EUR 15 million will be allocated to Stockmann's operations in Finland and the Baltic countries and EUR 5 million to Lindex, which will continue its profitability improvement programme. The progress of the initiative is regularly reported in the interim reports.
Stockmann will publish its financial statements bulletin on 14 February 2019.
Further information: Lauri Veijalainen, CEO +358 9 121 5062 Kai Laitinen, CFO, tel. +358 9 121 5800