Revenue continued to grow, operating result yet below last year

Helsinki, Finland, 2011-08-10 07:00 CEST (GLOBE NEWSWIRE) -- STOCKMANN plc, Interim Report 10.8.2011 at 8:00 EET

April - June 2011:
Consolidated revenue grew by 13.0 per cent to EUR 510.2 million (EUR 451.7 million).
Operating profit was EUR 25.6 million (EUR 30.9 million).

January - June 2011:
Consolidated revenue grew by 11.4 per cent to EUR 917.9 million (EUR 824.3 million).
Operating result was EUR -4.4 million (EUR 21.8 million).
Result for the period was EUR -20.1 million (EUR 27.9 million).
Earnings per share came to EUR -0.28 (EUR 0.39).

CEO Hannu Penttilä:
“The Stockmann Group continued increasing its revenue in the second quarter of 2011. The good level of consumer confidence, combined with our recently opened new department stores in St Petersburg and Ekaterinburg, boosted growth in the Department Store Division. In Finland the department stores gained market share in fashion in particular. 

The market for affordable fashion is still weak and resulted in lower than anticipated revenue for our fashion chains, Lindex and Seppälä. Despite this, Lindex was able to gain market share in its main markets of Sweden, Norway, and Finland.

Our Q2 operating profit fell below that of last year as revenue growth was not sufficient to cover increased depreciation and the costs of expansion and accelerating inflation, nor the lower relative gross margin. The earnings trend has turned in a positive direction, however. We expect the second half of 2011, and especially the last quarter, to outperform the previous year. Despite the weak first half-year, the Group is still targeting a full-year operating profit that is above the previous year’s figure. This is a challenging target, however, and can only be realized if there is no significant slowdown in economic growth for the rest of 2011.”

Outlook for the rest of 2011

World economic growth has continued to stay relatively well on track, but concerns over the debt crises in the euro zone and the USA have made it more challenging to forecast how the markets will develop. This uncertainty can affect the purchasing behaviour of consumers, even though there is still a good level of consumer confidence in their own household economy within the Stockmann Group’s main markets. When finance has been available, the focus of private consumption over the last six months has been particularly on the acquisition of large consumer durables such as apartments and cars. The grocery trade has also developed favourably, partly due to strong cost inflation.

The Russian markets are expected to continue to grow faster than those in the Nordic countries, while the positive growth of the consumer markets in the Baltic countries is also expected to continue. However, higher inflation will affect consumers’ purchasing power in all markets.

The market for affordable fashion started more slowly in 2011 compared to the strong first quarter of 2010. Demand is expected to improve in the rest of the year, and to outperform the weak growth of the final months of 2010. The production capacity problems of the Far East procurement markets have eased, which means that the autumn deliveries have taken place on time and the Group’s companies will not face the same kind of delivery delays as in autumn 2010. Price rise pressures have also decreased recently.

The capital expenditure projects of Stockmann’s Department Store Division, completed in autumn 2010 and early 2011, will positively affect revenue for 2011. Several of the department stores in Russia are still in their start-up phase, however. The effect of these investments on the division’s operating profit will only become visible from the last quarter of 2011 onwards.

The Stockmann Group expects its revenue to continue to grow for the rest of the year. In 2010, the Group’s earnings improved substantially in the first half-year and particularly in the first quarter, whereas the earnings trend for the final months was unsatisfactory. Stockmann estimates that operating profit for the second half of 2011, and especially for its final quarter, will outperform the previous year.

The Group is still targeting an operating profit for 2011 that is up on the previous year. Its achievement will be challenging due to the weak earnings realized in the first half of the year and requires that there will be no significant slowdown in economic growth for the rest of 2011. 

The Group’s total capital expenditure in 2011 is estimated to be approximately EUR 70 million (EUR 165.4 million in 2010) and to remain below the estimated depreciation for the full year.

Key figures

Revenue, EUR mill. 510.2 451.7 917.9 824.3 1 821.9
Revenue growth, % 13.0 5.1 11.4 5.3 7.3
Relative gross margin, % 49.5 51.3 48.6 50.1 49.9
Operating profit, EUR mill. 25.6 30.9 -4.4 21.8 88.8
Net financial costs, EUR mill. 9.2 3.2 17.5 3.8 14.6
Profit before tax, EUR mill. 16.4 27.8 -21.9 18.0 74.2
Profit for the period, EUR mill. 14.7 25.7 -20.1 27.9 78.3
Earnings per share, undiluted, EUR 0.21 0.36 -0.28 0.39 1.10
Equity per share, EUR     11.31 11,71 12,45
Cash flow from operating activities, EUR mill. 70.9 57.8 -74.6 -16.1 91.8
Capital expenditure, EUR mill. 15.2 34.1 39.0 72.7 165.4
Net gearing, %     114.9 93.1 87.7
Equity ratio, %     39.1 43.3 43.1
Number of shares, undiluted, weighted average, 1 000 pc     71 150 71 094 71 120
Return on capital employed,
rolling 12 months
    3.8 6.7 5.8
Personnel, average 16 072 15 104 15 812 14 607 15 164

Disclosure of financial reviews

Stockmann has adopted the new disclosure procedure enabled by Standard 5.2b which is published by the Finnish Financial Supervision Authority. This company announcement is a summary of the Stockmann Group’s Interim Report for January-June 2011 and includes the most relevant information of the report. The complete report is attached to this release as a pdf file and is also available on the company's website at

Press and analyst briefing and conference call

A press and analyst briefing in Finnish will be held today, on 10 August 2011 at 9.15 a.m. at the F8 Easy restaurant on the 8th floor of Stockmann's Helsinki city centre department store, Aleksanterinkatu 52.

A conference call in English will be held today, on 10 August 2011 at 11.15 a.m. EET. To participate the conference call, please dial +358 9 8864 8511 and, when requested, key in the meeting room number *657899* including the asterisks. The presentation material will be available for downloading on the company's website from 9.15 a.m. EET onwards.

Further information:
Hannu Penttilä, CEO, tel. +358 9 121 5801
Pekka Vähähyyppä, CFO, tel. +358 9 121 3351


Hannu Penttilä

Principal media


Q2 2011 Interim Report ENG.pdf