CEO’s review

CEO Susanne Ehnbåge, Stockmann Group’s Financial Statements Bulletin 2023, published on 9 February 2024.

In 2023, the Stockmann Group focused on systematically building a solid and sustainable foundation for the future for both divisions, aiming to secure a long-term growth of shareholder value. Despite the challenging market environment marked by sustained high inflation, elevated interest rates and geopolitical uncertainties, the Group succeeded in enhancing its profitability. The keys to this improved performance include a strategic focus, prioritisation of key initiatives, and the team’s dedication to achieving the goals.

As a result, the Group’s 2023 adjusted operating result improved to EUR 80.0 (79.8) million. However, in local currencies the improvement was significant. The Lindex division outperformed the average market growth and reached an all-time record of EUR 90.3 (90.0) million adjusted operating result. In 2023, changes in foreign exchange rates had a negative impact of EUR 5.7 million on adjusted operating profit. The Stockmann division lagged slightly behind the comparison year, and its adjusted operating result totalled EUR -6.3 (-5.4) million. Without the negative impact of the reduced size of the Stockmann Itis department store, the division would have improved its performance. The Stockmann division improved its result during the second half of the year compared to the previous year.

Going forward, we have a clear plan to accelerate value creation. At our Capital Markets Day in November, we announced updated strategies and financial targets for the divisions. The Lindex division will continue to accelerate growth, transform into a sustainable business, and decouple cost from growth. The Stockmann division aims for growth and profitability improvement by elevating its offering towards luxury and premium segments, growing and leveraging the loyal customer base, and ensuring a seamless omnichannel experience. Additionally, there is a clear focus on operational efficiency and expanding revenue horizons.

The Stockmann Group’s underlying business is developing in the right direction, and our financial position improved further in terms of free cash-flow, financing and equity in 2023. The current financial position serves as a solid foundation for further development and investments in the areas such as process efficiency and digitalisation, enabling the growth we seek. The construction of Lindex’s new EUR 110 million omnichannel distribution centre is proceeding well, and we target it to be in operation in the autumn 2024.

In September, we announced that the Stockmann Group was commencing a strategic assessment to crystallise shareholder value by refocusing the Group’s business on Lindex. As part of the strategic assessment, Stockmann plc is considering a name change to Lindex Group and will investigate strategic alternatives for the Stockmann department stores business. The assessment is ongoing, and we expect it to be finalised in 2024. In 2023, we also saw good progress in the restructuring process, which we aim to end as soon as possible.

In October, the Stockmann Group took an important step in climate change mitigation. We submitted our new climate target to the Science Based Targets initiative (SBTi) and defined a roadmap for both divisions to reach the target. The Group’s target is to reduce climate emissions by 42% by 2030 compared to 2022. We expect to have validated science-based climate targets in 2024.

I would like to express my heartfelt gratitude to our team members at Lindex and Stockmann for their dedication and good work in 2023. I look forward to continuing our journey together with our partners and customers towards building a stronger, growing company and increasing shareholder value.

Stockmann group’s Financial statements bulletin 2023