Stockmann's outlook for 2017

Half year financial report 2017. 16.8.2017:

In the Stockmann Group’s largest operating country, Finland, the economy has begun to recover. GDP and the retail market are expected to grow in 2017. Consumers’ purchasing power is, however, not expected to increase and purchasing behaviour is changing due to digitalisation and increasing competition.

The Swedish economy remained stable in 2016 and the GDP growth estimate for 2017 remains on a higher level than in Finland. The steady growth in the fashion market stagnated in 2016, and the market is expected to decline in 2017.

In the Baltic countries, GDP growth is estimated to continue. The outlook for these countries is expected to be better than that for the Stockmann Group’s other market areas.

The Russian economy is expected to recover gradually, but the purchasing power of Russian consumers remains low.
Stockmann will continue improving the Group’s long-term competitiveness and profitability. The efficiency measures launched in summer 2016 will be fully visible in the 2017 operating costs. Improvements in the operating result in 2017 are estimated to come mainly from the Stockmann Retail division, which is still loss-making, while Real Estate is expected to continue its stable profitable performance. Lindex’s operating profit in 2017 will be clearly down on the previous year’s record-high earnings. The planned sale of the Delicatessen business in Finland is expected to improve the Group’s profitability from 2018 onwards.

Capital expenditure for 2017 is estimated to be approximately EUR 45-50 million, which is less than the estimated depreciation for the year.

Stockmann expects the Group’s revenue for 2017 to decline due to changes in the store network and product mix. Adjusted operating profit is expected to improve, compared with 2016.