STOCKMANN'S FINANCIAL STATEMENT BULLETIN 2004
STOCKMANN plc STOCK EXCHANGE RELEASE FEBRUARY 15, 2005, at 11.45
STOCKMANN'S FINANCIAL STATEMENT BULLETIN 2004
The Stockmann Group's sales grew by 2.1 per cent to EUR 1 735.0 million (EUR 1 698.6 million in 2004). Profit on ordinary operations improved by EUR 17.4 million on the previous year. Both the Department Store Division and Seppälä improved their operating profit substantially and turned in their best-ever earnings. The Vehicle Division reported a decrease in operating profit. Hobby Hall improved its operating result, though it was still in the red. Profit before extraordinary items increased by EUR 5.1 million and was EUR 79.1 million. The corresponding figure a year earlier, EUR 74.0 million, included EUR 15.4 million of other operating income. Other operating income in 2004 amounted to EUR 3.1 million. Earnings per share increased to EUR 1.11, as against EUR 1.01 a year ago. The Board of Directors will propose the payment of a dividend of EUR 1.00 per share.
Sales up 2.1 per cent
The Stockmann Group's sales grew by 2.1 per cent, or EUR 36.3 million, to EUR 1 735.0 million. International operations accounted for an increased share of consolidated sales, rising from 11 per cent to 14 per cent. Net turnover was up 2.3 per cent to EUR 1 445.0 million. The net turnover figures by division are shown in the accompanying table.
A big improvement in earnings
The Group's operating gross margin increased by EUR 36.1 million to EUR 493.5 million. The relative gross margin improved and was 34.2 per cent (32.4 per cent). The relative gross margin improved across all the divisions. Operating costs increased by EUR 16.7 million. Depreciation rose by EUR 1.4 million. Profit on ordinary operations improved by EUR 18.0 million. Net financial income decreased by EUR 0.5 million. These factors improved the Group's profit on ordinary operations before extraordinary items by EUR 17.4 million.
Other operating income came from the consideration received from the sale of the Volkswagen-Audi car dealership in Helsinki's Herttoniemi district as well as gains on the sale of securities and totalled EUR 3.1 million, a decrease of EUR 12.3 million on the figure a year earlier. Consolidated operating profit increased by EUR 5.7 million on the comparison period, to EUR 71.4 million.
Net financial income decreased by EUR 0.5 million from the previous year and was EUR 7.8 million.
Profit before extraordinary items grew by EUR 5.1 million and was EUR 79.1 million.
Direct taxes were EUR 20.9 million, decreasing by EUR 1.4 million on the figure a year earlier. Taxes on earnings amounted to EUR 25.3 million (EUR 20.4 million) and the change in the deferred tax liability was a decrease of EUR 4.4 million. The change in the deferred tax liability takes into account the lowering of Finland's corporate tax rate from 29 per cent to 26 per cent as from the beginning of 2005.
Net profit for the financial year was EUR 58.2 million, compared with EUR 51.7 million a year earlier.
Earnings per share increased by EUR 0.10 and were EUR 1.11 (2003: EUR 1.01). Earnings per share adjusted for the effect of share options were EUR 1.09 (EUR 1.00).
Capital employed diminished and was at the end of the year EUR 557.5 million (EUR 611.8 million). The trend in capital employed was attributable to the decrease in cash assets according to plan. The return on capital employed rose to 14.3 per cent, as against 13.2 per cent a year ago. The return on equity rose to 11.2 per cent, as against 9.6 per cent a year earlier. Equity per share was EUR 9.16, compared with EUR 10.36 a year earlier.
Sales and profitability trend of the divisions
The Department Store Division's sales grew by 10 per cent to EUR 938.9 million. Sales grew by 4 per cent in Finland and by 43 per cent abroad. Sales growth in Finland was reduced by the divestment of the Academic Bookstore magazine business in June 2003. International Operations registered sales growth ahead of the market in all the countries where it operates.
In Russia, the Mega South department store was opened in Moscow in April, a Zara store in the Marina Roscha Shopping Centre in June and a department store and Zara store in the Mega North Shopping Centre in December. These new locations, together with the Riga department store that was opened in October 2003 boosted International Operations' sales growth. International Operations accounted for 21 per cent of the division's sales (16 per cent). The Department Store Division's operating profit increased by EUR 13.3 million compared with the same period a year ago, rising to EUR 53.0 million (EUR 39.7 million). Earnings were burdened by the costs of starting up the new department stores in Moscow and the department store in Riga. The return on capital employed was 23.7 per cent, as against 21.1 per cent a year earlier.
Vehicle sales in Finland tailed off following the spurt in sales in the wake of the lowered car tax. The Vehicle Division's sales were down 9 per cent to EUR 437.1 million. All in all, the decrease in sales was attributable to the transfer of the Volkswagen-Audi dealership in Helsinki's Herttoniemi district to a Kesko Corporation subsidiary as from July 1, 2004. The transferred car dealership had sales in 2003 accounting for about 22 per cent of the Stockmann Vehicle Division's entire sales. Unit sales of new vehicles fell by 17 per cent and those of used vehicles declined by 4 per cent. The division's operating profit diminished by EUR 1.4 million, mainly due to the sale of the Volkswagen-Audi dealership in Herttoniemi, and was EUR 4.2 million (EUR 5.6 million). The return on capital employed was 10.2 per cent, as against 13.2 per cent a year earlier. Stockmann is pushing ahead energetically with inputs into developing the vehicle trade and servicing operations in localities where it has a department store. Finland's first car dealership in line with the Audi car plant's recommendations was opened in Espoo's Suomenoja district at the beginning of July and will serve the Helsinki metropolitan area and its environs. The BMW-MINI Autotalo Jurvakainen Oy dealership was purchased in Oulu towards the end of October.
Sales by Hobby Hall diminished by 9 per cent on the previous year, to EUR 214.4 million. Sales in Finland were down 6 per cent on the previous year. The lower sales in Finland were due mainly to the effect of the stores closed at the end of 2003 and the start of 2004. Online shopping continued to enjoy strong growth and already accounted for 27 per cent of Hobby Hall's distance retailing in Finland. The division's sales abroad were down 22 per cent on the same period of 2003. This was attributable to tightened-up credit policy as well as the closing of one store in Estonia in autumn 2003. Hobby Hall stepped up its inventory management, and the level of stocks fell by 31 per cent during 2004. Hobby Hall's headcount decreased by 155 employees during 2004. Although sales fell short of the target, the improvement in the relative gross margin and cost savings lifted the division's operating result by EUR 0.3 million, ending in a loss of EUR 3.1 million. It was decided to wind up loss-making operations in Lithuania by the end of March 2005.
Seppälä's sales grew by 10 per cent on the previous year and were EUR 143.7 million. Sales grew both in Finland and abroad. Sales in the Baltic countries were increased by the four stores opened in Latvia towards the end of 2003 and the two stores opened there in 2004 as well as by the store that opened after a pause of one year in the refurbished Viru Centre in Tallinn, Estonia, in May. In addition, Seppälä opened its first store in Russia in Moscow in April 2004, with the next two store openings coming in November and December. Thanks to higher sales and an improved relative gross margin, Seppälä's operating profit increased by a hefty EUR 6.3 million and was EUR 16.4 million (EUR 10.1 million). The return on capital employed was 127.7 per cent, as against 58.5 per cent a year earlier.
Financing
Liquid assets at the end of 2004 totalled EUR 41.4 million, compared with EUR 121.3 million a year earlier.
Loan repayments were not made during the year, nor have new long-term loans been drawn down. The amount of long-term loans at the end of December was EUR 13.1 million. Capital expenditures came to a total of EUR 59.0 million. Dividend payouts totalled EUR 123.3 million. EUR 3.0 million was added to shareholders' equity through share subscriptions made on the basis of the 1997 and 2000 share options and EUR 6.5 million was added through the exercise of Loyal Customer share options. In addition, disposals of fixed assets generated a total of EUR 1.7 million.
The equity ratio was 65.5 per cent. The equity ratio at the end of 2003 was 68.3 per cent.
Contingent liabilities diminished by EUR 19.7 million from the end of 2003 and were EUR 41.1 million. Liabilities for lease agreements on business premises amounted to EUR 456.8 million, compared with EUR 471.1 million a year earlier.
Dividends
In accordance with the resolution passed by the Annual General Meeting, in April Stockmann paid a basic dividend of EUR 0.90 per share and a bonus dividend of EUR 0.45 per share, or a total dividend payout of EUR 70.5 million. An extraordinary general meeting held on December 8, 2004, resolved to pay an extra dividend of EUR 1.00 per share on top of the EUR 1.35 dividend that was decided at the Annual General Meeting. The extra dividend totalling EUR 52.8 million was paid out in December. The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 1.00 per share be paid for the 2004 financial year. The proposed dividend is 90 per cent of earnings per share.
Fine-tuning strategy
In its discussion of strategy in June 2004, the Stockmann Group's Board of Directors confirmed the company's strategy, according to which the Group will grow energetically over the next few years, particularly in the Russian market. The objective is that by the end of 2008 about a third of sales and at least the same proportion of earnings will come from the markets in the Baltic countries and Russia.
Growth abroad will be spearheaded by the department stores, Seppälä and expansion of the franchising-based Zara chain in Russia. A new possibility that has been identified for augmenting business operations is to expand franchising activities also for international brands that have expressed interest in utilizing Stockmann's acquired knowledge of trading in Russia. As part of the implementation of this strategy, in October Stockmann signed a cooperation agreement with the Bestseller group of Denmark, on the basis of which Stockmann received exclusive rights to retail Bestseller's brands in Russia. The Bestseller brands include Vero Moda, Only, Jack & Jones, Exit and Selected. The first store selling Bestseller brands will be opened in the Mega North Shopping Centre in spring 2005.
Alternatives for developing Hobby Hall were examined during the autumn of 2004. As a result of this exploratory work, it was decided to continue improving Hobby Hall's performance as part of the Stockmann Group.
The vehicle business will be developed as part of Stockmann, with a special emphasis on exploiting the synergies arising via Loyal Customer marketing in concert with department store operations as well as the possibilities for business development offered by the amendment of the Block Exemption regulation. In accordance with the strategic policy adopted, in October Stockmann purchased the entire shares outstanding in Autotalo Jurvakainen Oy, a BMW-MINI dealership in Oulu. The business was transferred to Stockmann's ownership on November 1, 2004. Thanks to this deal, Stockmann will be able to serve its customers, in car sales too, in all its department store localities in Finland.
Organizational changes
Klaus Sundström, M.Sc. (Econ.), was appointed as the Vehicle Division's new director and a member of the Stockmann Group's Management Committee, effective April 2, 2004. The division's previous director, Esa Mäkinen, joined another company.
Raija Saari, M.Sc. (Econ.), was appointed as Hobby Hall's new managing director and a member of the Stockmann Group's Management Committee, effective November 15, 2004. As from the same date, Hobby Hall's previous managing director, Henri Bucht, a Stockmann Group executive vice president and the CEO's alternate, was assigned to special duties and will resign from the company's employ on June 30, 2005. Group Executive Vice President Jukka Hienonen, director of the Department Store Division, was appointed the CEO's alternate, effective November 15, 2004.
Developing the Group structure
With a view to streamlining Stockmann's Group structure and increasing operational transparency, the Board of Directors decided in October to spin off Stockmann's Vehicle Division through a transfer of operations to the parent company's wholly-owned subsidiary Stockmann Auto Oy Ab. The director of Stockmann's Vehicle Division, Klaus Sundström, was appointed as the new company's managing director. The spin-off went into effect as from January 1, 2005.
The Board of Directors furthermore decided to transfer the subsidiaries operating in Russia to the parent company's wholly-owned Finnish holding company Oy Stockmann Russia Holding Ab. Transfer of the shares to the new holding company was carried out in October. In addition, the Board of Directors decided to establish a Finnish finance company named Oy Stockmann Russia Finance Ab, which will be wholly-owned by the parent company and finance, among other things, purchases of fixed assets by Stockmann's subsidiaries in Russia. The company went into operation in December 2004.
Capital expenditures
Capital expenditures during 2004 totalled EUR 59.0 million (EUR 40.9 million).
The Department Store Division's capital expenditures came to EUR 39.6 million. The division's biggest investment items were the new Mega South and Mega North department stores in Moscow, which operate in premises leased from Ikea. The Mega South department store was opened in April and required an outlay during 2004 of EUR 12.3 million. The Mega North department store was opened in December and had an investment price tag during 2004 of EUR 16.2 million. Both department stores have about 10 000 square metres of retail space. Stockmann's total investments in these department stores amounted to EUR 31.2 million. Two Zara stores were also opened in Moscow: in the Marina Roscha Shopping Centre at the beginning of June and in the Mega North Shopping Centre in December. In Finland, two new stores belonging to the Stockmann Beauty cosmetics chain were opened in 2004, bringing the total number of stores to eight.
The Vehicle Division's capital expenditures amounted to EUR 2.3 million. They went mainly for expanding operations.
Hobby Hall's capital expenditures totalled EUR 1.2 million. They went mainly for the development of information systems.
Seppälä invested a total of EUR 1.2 million. Seppälä opened its first store in Russia at the Stockmann department store in Moscow's Mega South Shopping Centre in April. Seppälä opened its second store in Russia in the Marino Shopping Centre on the southeast side of Moscow in November 2004, and a third store at the Stockmann department store in Moscow's Mega North Shopping Centre in December. In addition, Seppälä opened a new store in Liepaja, Latvia, in November.
Property investments totalled EUR 13.6 million, of which EUR 1.7 million was for the Audi car dealership in Espoo's Suomenoja district and EUR 7.6 million for the preparatory works for the enlargement of the Helsinki department store as well as for upgrading escalators and lifts.
Other capital expenditures came to EUR 1.1 million.
Current projects
Stockmann will open a department store with about 11 000 square metres of retail space in leased premises in the newly built section of the Jumbo Shopping Centre in Vantaa in autumn 2005. Stockmann's share of the cost estimate for the project is about EUR 10 million.
A large-scale project for enlargement and modification works on the department store in the centre of Helsinki is pending. Implementation of the project will call for modifying the town plan, which has already been initiated. According to the plan, the department store's commercial premises will be expanded by about 10 000 square metres by converting existing premises to commercial use and by building new retail space. In addition, completely new goods handling and maintenance areas will be built for the department store as well as access passages to the new customer car park. After the enlargement the Helsinki department store will have a total of 50 000 square metres of retail space. The cost estimate for the project is a total of about EUR 115 million. The works are estimated to be completed phase by phase by the end of 2009.
A lease agreement on opening, in spring 2005, a flagship Zara store in a centrally located business site right in the heart of Moscow was signed in October. Furthermore, agreements have been signed on opening three new Zara stores in Moscow in 2005. In addition, 2-3 Bestseller stores will be opened in Moscow, the first of which will be in the Mega North Shopping Centre in spring 2005.
Seppälä is aiming to open new stores in Moscow and to expand its operations to St Petersburg. Furthermore, Seppälä will begin operations in Lithuania in spring 2005.
Transition to IFRS
As from the beginning of 2005, Stockmann changed over from Finnish Accounting Standards (FAS) to International Financial Reporting Standards (IFRS) in its consolidated reporting. The company has drafted an opening balance sheet for the time of transition to IFRS, January 1, 2004. A separate bulletin on the IFRS transition will be released on February 15, 2005. The first IFRS Interim Report will be published on April 21, 2005. The major effects of Stockmann's transition to IFRS are related to the depreciation of revaluations of fixed assets, the treatment of own shares, the treatment of certain leasing and hire purchase agreements in the motor trade, the recording of financial instruments and segmental reporting.
The enclosed table presents the changes to some of the Group's key figures under IFRS.
In 2004, the balance sheet total was virtually the same under IFRS as in the FAS balance sheet. The equity ratio in the IFRS annual accounts was 62.3 per cent, or 3.2 percentage points lower than the equity ratio in the FAS annual accounts. This is mainly due to the recording of accumulated depreciation of revaluations in shareholders' equity and the deferred tax liabilities related to IFRS adjustments. The growth in net profit for the period and earnings per share in the IFRS annual accounts is primarily due to the reduction in deferred tax liabilities. The transition to IFRS in the annual accounts has no effect on the Group's cash flow.
Upon the transition to IFRS, the segmental division used in current reporting was changed such that the property unit, whose income primarily comprised intra-Group rental income, was eliminated. Under IFRS, the properties owned by the Group have been divided between business segments such that they are included in the assets of the segments.
In the segments' profit and loss accounts, the previously used internal rent will be replaced by depreciation on buildings and other expenses. Under IFRS, other operating income has been allocated to the segments, whereas they were previously reported only at the Group level.
The segmental division is based on the Group's organization and internal reporting. The primary segments are the Department Store Division, Stockmann Auto, Hobby Hall and Seppälä. The secondary segments are Finland, the Baltic countries and Russia.
Share capital and shares
The company's market capitalization grew by 19 per cent, or by EUR 185.2 million from the previous year and was EUR 1 140.8 million at the end of December.
Stockmann's shares outperformed both the HEX All-Share Index and the HEX Portfolio Index during the year. At the end of December the stock exchange price of the Series A share was EUR 21.10, compared with EUR 18.00 at the end of 2003, and the Series B share was selling at EUR 21.70, as against EUR 18.30 at the end of 2003.
The 1997 Stockmann share options were exercised to subscribe for a total of 20 300 Stockmann plc Series B shares with a par value of 2 euros in January 2004. As a consequence of the subscriptions the share capital was increased by EUR 40 600. The shares were entered in the Trade Register on February 20, 2004, and they became available for public trading, together with the existing shares, on the Helsinki Stock Exchange on April 5, 2004.
At its meetings held on February 12, 2004 and November 15, 2004, Stockmann plc's Board of Directors approved shareholders' requests to convert 174 650 of the company's shares from Series A into Series B shares in accordance with Article 3 of Stockmann's Articles of Association. Share conversions of 163 000 shares were entered in the Trade Register on February 20, 2004, and conversions of 11 650 shares on December 21, 2004.
A total of 600 269 Stockmann plc Series B shares with a par value of 2 euros were subscribed for with Stockmann Loyal Customer share options in May. As a consequence of the subscriptions the share capital was increased by EUR 1 200 538. Of the shares, 597 118 were entered in the Trade Register on June 30, 2004, and 3 151 shares were entered on August 30, 2004, and became available for public trading, together with the existing shares, on the Helsinki Stock Exchange on July 1, 2004, and August 31, 2004, respectively.
In December, the 2000 Stockmann share options were exercised to subscribe for a total of 170 150 Stockmann plc Series B shares with a par value of 2 euros. As a consequence of the subscriptions the share capital was increased by EUR 340 300. The shares were entered in the Trade Register on December 30, 2004, and they became available for public trading, together with the existing shares, on the Helsinki Stock Exchange on January 3, 2005.
Following share subscriptions made on the basis of share conversions and share options, the total number of Series A shares at December 31, 2004, was 24 564 243 and the total number of Series B shares was 28 855 817.
At the end of December, the 2000 Stockmann share options were exercised to subscribe for another 4 900 Stockmann plc Series B shares with a par value of 2 euros. As a consequence of the subscriptions the share capital was increased by EUR 9 800. Stockmann's Board of Directors approved the subscriptions in its meeting held on February 15, 2005.
Stockmann held 406 939 of its own Series B shares (treasury shares) at the end of December 2004. The par value of these shares is a total of EUR 813 878, and they represent 0.8 per cent of all the shares outstanding as well as 0.1 per cent of the total votes. The shares were bought back at a total price of EUR 6.1 million.
The company's Board of Directors does not have valid authorizations to increase the share capital or to float issues of convertible bonds or bonds with warrants or to buy back own shares. The Board of Directors has valid authorizations to transfer 406 939 company-owned Series B treasury shares up to March 30, 2005.
Personnel strength
The Stockmann Group had an average payroll of 9 589 employees, or 844 more than in the previous year. The growth in the number of employees was attributable mainly to the new department stores in Moscow. Converted to a full-time basis, the average number of personnel increased by 744 employees and was 7 812.
At the end of December 2004, Stockmann had 3 391 employees working abroad. At the end of December of last year Stockmann had 1 946 people working abroad. The proportion of the total personnel who were working abroad increased from 20 per cent to 31 per cent.
Outlook for 2005
Retail sales, excluding the motor trade, are estimated to increase by about 2 - 3 per cent in Finland in 2005. The volume of new vehicle sales is expected to decrease compared with 2004. It is estimated that the markets in Russia and the Baltic countries will continue growing faster than the Finnish market. Sales in 2005 are expected to come in at about EUR 1.9 billion.
The operating profit generated by the Department Store Division and Seppälä is estimated to improve further on the level reported for 2004. The operating profit reported by Stockmann Auto is expected to diminish somewhat. Hobby Hall's result is expected to improve significantly and to return to the black. Stockmann's target is to post even better earnings in 2005 than in 2004.
Helsinki, February 15, 2005
Stockmann plc BOARD OF DIRECTORS
Net turnover
| 1-12/04 | 1-12/03 | Change | Change | |
| EUR mill. | EUR mill. | % | EUR mill. | |
| Department Store Division, | 624.5 | 602.2 | 22.3 | 3.7 |
| Vehicle Division | 358.0 | 394.5 | -36.5 | -9.3 |
| Hobby Hall Division, | 148.6 | 158.5 | -9.9 | -6.2 |
| Hobby Hall Division, total | 177.9 | 197.3 | -19.3 | -9.8 |
| Seppälä Division, Finland | 105.3 | 98.8 | 6.5 | 6.6 |
| Seppälä Division, | 13.0 | 8.5 | 4.6 | 54.0 |
| Seppälä Division, total | 118.4 | 107.3 | 11.1 | 10.4 |
| Real Estate + others | 21.7 | 21.0 | 0.7 | 3.2 |
| Eliminations | -20.2 | -20.5 | 0.3 | |
| Operations in Finland, | 1 237.9 | 1 254.6 | -16.6 | -1.3 |
Profit and loss account
| 1-12/04 | 1-12/03 | |
| EUR mill. | EUR mill. | |
| Net turnover | 1 445.0 | 1 412.7 |
| Other operating income | 3.1 | 15.4 |
| Raw materials and services | 951.5 | 955.3 |
| Staff expenses | 202.2 | 194.9 |
| Depreciation and reduction in value | 30.2 | 28.8 |
| Other operating expenses | 192.9 | 183.4 |
| Operating profit | 71.4 | 65.7 |
| Financial income and expenses | 7.8 | 8.3 |
| Profit before extraordinary items | 79.1 | 74.0 |
| Extraordinary items | ||
| Profit before taxes | 79.1 | 74.0 |
| Income taxes, total | 20.9 | 22.3 |
| Minority interest | 0.0 | 0.0 |
| Profit for the financial year | 58.2 | 51.7 |
| Gross investments | 59.0 | 40.9 |
| Per cent of net turnover | 4.1 | 2.9 |
Q4/04 Q3/04 Q2/04 Q1/04
| Net turnover | 429.7 | 330.6 | 348.8 | 336.0 |
| Other operating income | 0.8 | 0.0 | 2.3 | 0.0 |
| Raw materials and services | 266.6 | 221.8 | 230.2 | 232.9 |
| Staff expenses | 58.9 | 44.2 | 51.2 | 47.8 |
| Depreciation | 7.7 | 7.6 | 7.6 | 7.3 |
| Other operating expenses | 56.2 | 44.3 | 46.1 | 46.3 |
| Operating profit | 41.1 | 12.7 | 15.9 | 1.6 |
| Financial income and expenses, | 1.3 | 1.3 | 2.0 | 3.1 |
| Profit before extraordinary items | 42.4 | 14.0 | 17.9 | 4.8 |
| Extraordinary items | 0.0 | 0.0 | 0.0 | 0.0 |
| Profit before taxes | 42.4 | 14.0 | 17.9 | 4.8 |
| Direct taxes (corresponding to | 12.9 | 4.1 | 2.6 | 1.4 |
| Minority interest | 0.0 | 0.0 | 0.0 | 0.0 |
| Profit for the period | 29.5 | 10.0 | 15.4 | 3.4 |
| 1-12/04 | 1-12/03 | Change | ROCE % | ROCE % | |
| EUR mill. | EUR mill. | EUR mill. | 2004 | 2003 | |
| Department Store | 53.0 | 39.7 | 13.2 | 23.7 | 21.1 |
| Vehicle Division | 4.2 | 5.6 | -1.4 | 10.2 | 13.2 |
| Hobby Hall Division | -3.1 | -3.4 | 0.3 | -3.5 | -3.4 |
| Seppälä Division | 16.4 | 10.1 | 6.3 | 127.7 | 58.5 |
| Real-estate | 13.8 | 14.5 | -0.8 | 10.4 | 11.4 |
| Other operating | 3.1 | 15.4 | -12.3 |
The operating profit figures of the commercial units are presented according to management accounting. A good financial position Security pledged, contingent liabilities and other commitments
| Group | Parent company | |||
| 2004 | 2003 | 2004 | 2003 | |
| Security pledged | ||||
| Security pledged on behalf |
| Mortgages given | 1.7 | 1.7 | 1.7 | 1.7 |
| Securities pledged | 0.2 | 0.1 | 0.2 | 0.1 |
| Total | 1.9 | 1.7 | 1.9 | 1.7 |
| Security pledged on behalf |
| Rent guarantees | 17.8 | 16.4 | ||
| Other guarantees | 19.3 | 17.4 | ||
| Total | 37.1 | 33.8 | ||
| Leasing commitments | ||||
| Payable during the 2005 | 3.0 | 2.9 | 5.6 | 4.8 |
| Payable at a later date | 0.8 | 0.9 | 12.4 | 11.9 |
| Total | 3.9 | 3.8 | 18.0 | 16.7 |
| Other own commitments | ||||
| Repurchase commitments | 35.4 | 55.3 | 35.4 | 55.3 |
| Mortgages | 1.7 | 1.7 | 1.7 | 1.7 |
| Pledges | 0.2 | 0.1 | 0.2 | 0.1 |
| Guarantees | 37.1 | 33.8 | ||
| Other commitments | 39.2 | 59.1 | 53.4 | 72.0 |
| Total | 41.1 | 60.8 | 92.4 | 107.5 |
| Dec.31, 2004 | Dec.31, 2003 | |
| EUR mill. | EUR mill. | |
| Me | Me | |
| Nominal value | ||
| Foreign exchange derivatives | 86.9 | 11.7 |
| Interest rate derivatives | 35.0 | 35.0 |
| Fair value | ||
| Foreign exchange derivatives | 1.0 | -0.1 |
| Interest rate derivatives | -0.5 | -0.9 |
1-12/04 1-12/03 Change
| Department Store Division | 5 601 | 4 782 | 819 |
| Vehicle Division | 740 | 776 | -36 |
| Hobby Hall Division | 608 | 704 | -96 |
| Seppälä Division | 759 | 709 | 50 |
| Management and administration | 104 | 97 | 7 |
| Group | 7 812 | 7 068 | 744 |
| BALANCE SHEET | Dec.31,2004 | Dec.31,2003 |
| ASSETS | EUR mill. | EUR mill. |
| NON-CURRENT ASSETS | ||
| Intangible assets | ||
| Intangible rights | 9.1 | 10.3 |
| Goodwill arising on consolidation | 0.5 | |
| Goodwill | 0.0 | 0.0 |
| Other capitalized long-term expenses | 13.7 | 14.7 |
| Advance payments and projects in progress | 1.2 | 5.4 |
| Intangible assets, total | 24.4 | 30.5 |
| Tangible assets | ||
| Land and water | 17.8 | 17.8 |
| Buildings and constructions | 143.7 | 133.0 |
| Machinery and equipment | 57.8 | 59.8 |
| Other tangible assets | 36.3 | 10.0 |
| Advance payments and construction in progress | 7.0 | 9.5 |
| Tangible assets, total | 262.7 | 230.0 |
| Investments | ||
| Own shares | 6.1 | 6.2 |
| Other shares and participations | 21.9 | 22.4 |
| Investments, total | 28.0 | 28.7 |
| NON-CURRENT ASSETS, TOTAL | 315.2 | 289.2 |
| CURRENT ASSETS | ||
| Stocks | ||
| Raw materials and consumables | 195.0 | 191.3 |
| Stocks, total | 195.0 | 191.3 |
| Non-current debtors | ||
| Trade debtors | 0.1 | 0.2 |
| Loan receivables | 0.0 | 0.1 |
| Other debtors | 1.0 | 0.5 |
| Non-current debtors, total | 1.1 | 0.9 |
| Deferred tax assets | 1.8 | 0.8 |
| Current debtors | ||
| Trade debtors | 169.6 | 177.7 |
| Other debtors | 15.7 | 6.5 |
| Prepayments and accrued income | 10.7 | 13.1 |
| Current debtors, total | 196.0 | 197.3 |
| Debtors, total | 198.9 | 199.0 |
| Securities held in current assets | 28.7 | 101.8 |
| Cash in hand and at banks | 12.7 | 19.5 |
| CURRENT ASSETS, TOTAL | 435.2 | 511.6 |
| TOTAL | 750.4 | 800.8 |
| BALANCE SHEET | Dec.31,2004 | Dec.31,2003 |
| LIABILITIES | EUR mill. | EUR mill. |
| CAPITAL AND RESERVES | ||
| Share capital | 106.8 | 105.3 |
| Premium fund | 155.0 | 147.1 |
| Fund for own shares | 6.1 | 6.2 |
| Reserve fund | 0.2 | 0.2 |
| Other funds | 43.8 | 43.7 |
| Retained earnings | 121.5 | 192.9 |
| Net profit for the financial year | 58.2 | 51.7 |
| CAPITAL AND RESERVES, TOTAL | 491.7 | 547.1 |
| Minority interest | 0.0 | 0.0 |
| CREDITORS | ||
| Deferred tax liability | 22.6 | 26.0 |
| Non-current creditors | ||
| Loans from credit institutions | 13.1 | 48.6 |
| Non-current creditors, total | 13.1 | 48.6 |
| Current creditors | ||
| Loans from credit institutions | 35.0 | |
| Trade creditors | 93.8 | 92.2 |
| Other Creditors | 46.0 | 40.5 |
| Accruals and prepaid income | 48.2 | 46.4 |
| Current creditors, total | 223.0 | 179.0 |
| CREDITORS, TOTAL | 258.7 | 253.7 |
| TOTAL | 750.4 | 800.8 |
| 2004 | 2003 | |
| EUR | Eur | |
| mill. | mill. | |
| CASH FLOW FROM OPERATIONS | ||
| Payments from sales | 1 420.5 | 1 416.9 |
| Payments from other operating income | 2.5 | 2.3 |
| Payments for operating expenses | -1 319.7 | -1 333.2 |
| Cash flow from operations before financial items and | 103.3 | 85.9 |
| Interest received from operations | 11.8 | 11.0 |
| Direct taxes paid | -23.9 | -20.9 |
| Cash flow before extraordinary items | 86.4 | 72.2 |
| CASH FLOW FROM OPERATIONS (A) | 86.4 | 72.2 |
| CASH FLOW INTO AND FROM INVESTMENTS | ||
| Capital expenditures on tangible and intangible | -57.1 | -41.0 |
| Cash from tangible and intangible assets | 0.5 | 36.6 |
| Capital expenditures on other investments | 0.0 | 0.0 |
| Cash from other investments | 1.2 | 0.4 |
| Dividends from investments | 0.6 | 0.3 |
| CASH FLOW INTO AND FROM INVESTMENTS (B) | -54.7 | -3.8 |
| FINANCIAL CASH FLOW | ||
| Change in loans granted, increase (-), decrease (+) | 0.1 | 0.1 |
| Subscriptions with options | 9.5 | 16.4 |
| Change in short-term loans, increase (+), | 1.7 | -0.9 |
| Long-term loans drawn down | 13.6 | |
| Repayments of long-term loans | -1.0 | |
| Dividend paid and other distribution of profits | -123.0 | -45.8 |
| FINANCIAL CASH FLOW (C) | -111.7 | -17.6 |
| Change in cash funds (A+B+C) increase (+), | -79.9 | 50.8 |
| Cash funds at start of the financial year | 121.3 | 70.5 |
| Cash funds at end of the financial year | 41.4 | 121.3 |
| Group key financial ratios 2004 | FAS 2004 | Effect of | IFRS |
| transition to | 2004 | ||
| IFRS | |||
| Operating profit | 71.4 | (1.0) | 70.4 |
| Net profit for the period, EUR million | 58.2 | 1.1 | 59.3 |
| Earnings per share, undiluted EUR | 1.11 | 0.02 | 1.13 |
| Earnings per share, diluted EUR | 1.09 | 0.02 | 1.11 |
| Total assets EUR million | 750.4 | (1.4) | 749.0 |
| Return on capital employed, per cent | 14.3 | 0.5 | 14.8 |
| Return on shareholders' equity, per cent | 11.2 | 1.0 | 12.2 |
| Equity ratio, per cent | 65.5 | (3.2) | 62.3 |
Helsinki, February 15, 2005
Stockmann plc
Hannu Penttilä CEO
Distribution Helsinki Exchanges Principal media
A press and analysts conference will be held today, February 15, 2005, at 14.30 at the World Trade Center, Aleksanterinkatu 17, Helsinki.
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