THE BOARD OF DIRECTORS OF STOCKMANN CONFIRMED LONG-TERM ECONOMIC OBJECTIVES
18.6.2008 at 9.50
THE BOARD OF DIRECTORS OF STOCKMANN CONFIRMED LONG-TERM ECONOMIC
The Board of Directors of the Stockmann Group has in its strategy meeting
confirmed the strategic guidelines and economic objectives for the next
five years. During the strategy period, the Group will continue its strong
profitable growth in Finland, as well as in the current and new market
areas outside Finland. The purchase of Lindex at the end of 2007 created a
strong new market area for the Group in Sweden and in Norway, at the same
time facilitating the rapid expansion of business operations of Lindex
into new market areas, especially in Russia. The integration of Lindex has
proceeded well. The Board of Directors estimates that the scale advantage
obtained from the integration of Lindex will increase to approximately 12-
15 million euros on an annual level within the next two to three years.
Majority of the advantage will be obtained as improved gross margins
within the whole Group by utilising the Far East purchasing office network
of Lindex for the needs of the whole Group.
The long-term goals of the Stockmann Group were last confirmed before the
purchase of Lindex. The objective of the renewed Group is to attain annual
growth in all its markets faster than the average growth rate of the
markets, and to obtain an operating profit margin of 12 per cent and a 20
per cent return on capital employed at the end of the strategy period in
2013. The return on capital employed during the initial phase of the
period will be lower than in the previous years due to the significant
investment programme of the Group.
The purchase of Lindex, which was in its entirety financed by debt
capital, significantly changed the capital structure of the Group. The
strategic goal is to increase the equity ratio of the Group to at least 40
percent. The Annual General Meeting of spring 2008 conferred the authority
upon the Board of Directors to increase the share capital of Stockmann in
total with no more than 15 million new shares during the next three years.
So far no decisions regarding the use of the authorisation have been made.
Despite the strong growth and investment programme, the dividend policy of
the company is kept unchanged. The objective is to distribute more than
half of the profit produced by the core business operations as dividends.
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