Stockmann Group’s Interim Report 1 January - 31 March 2015
Many strategic steps taken - comparable revenue up, earnings still down on 2014
Helsinki, Finland, 2015-04-29 07:00 CEST (GLOBE NEWSWIRE) --
STOCKMANN plc, Interim Report 29.4.2015 at 8:00 EET
Consolidated revenue was EUR 380.4 million (EUR 395.6 million), down 3.8 per cent, or up 3.6 per cent at comparable exchange rates.
Operating result before depreciation (EBITDA) was EUR -29.5 million (EUR -25.7 million).
Operating result was EUR -49.9 million (EUR -43.9 million).
Result for the period was EUR -56.2 million (EUR -40.1 million).
Earnings per share came to EUR -0.78 (EUR -0.56).
As of 1 January 2015, Stockmann’s real estate properties have been measured at their fair values, which increases e.g. the Group’s non-current assets and equity in the balance sheet, depreciation and equity ratio. The revaluation is not applied retrospectively for 2014.
The outlook for 2015 remains unchanged: Due to planned structural changes, Stockmann expects the Group’s revenue in 2015 to be down on 2014. The operating result excluding non-recurring items is expected to improve, but to remain negative in 2015 due to the performance of the Stockmann Retail division. Operating results for the Real Estate and Fashion Chains divisions are expected to be positive.
CEO Per Thelin:
Stockmann’s turnaround back to profit has begun and several strategic steps have already been taken. Achieving our targets will take time, but there are signs that we are moving in the right direction. Stockmann’s revenue at comparable exchange rates was up in the first quarter, and our department stores gained market share in our biggest product area, fashion. In Finland we achieved a good result in the Crazy Days campaign with sales growth in all of our focus areas; fashion, cosmetics, food and home. We have also received positive customer feedback on the improved service and new activities in the department stores.
Stockmann’s new Real Estate division quickly got down to work. The first electronics store run by a tenant, Expert, will open in less than a month in the Helsinki flagship department store. We are working on introducing other new tenants to our store premises, in order to bring added value to the customer. Real Estate’s first-quarter operating result was positive and up on 2014.
Seppälä’s divestment took place on 1 April, and we are now focusing on our other fashion chain, Lindex. An important milestone for Lindex to be a truly international fashion brand was achieved in March when the first Lindex store opened in London, UK. Overall, Lindex continued its stable performance during the first quarter.
Many structural measures and cost savings are being planned and taken. Four department stores, one in Oulu and three in Moscow, will be closed down. We have launched an efficiency programme which targets annual cost savings of EUR 50 million. All these measures are needed, as the Group’s first-quarter operating result was still down on the previous year. The decline was partly due to increased depreciation. The very weak Russian rouble also continued to negatively affect our operations. Despite this, I am confident that we are on the right track and that the effects of the new strategy will gradually start to show in our performance.
|Revenue, EUR mill.||380.4||395.6||1 844.5|
|Revenue growth, per cent||-3.8||-8.3||-9.5|
|Gross margin, per cent||45.1||45.5||46.6|
|Operating result, EUR mill.||-49.9||-43.9||-82.2|
|Net financial costs, EUR mill.||5.3||5.5||21.4|
|Result before tax, EUR mill.||-55.1||-49.3||-103.6|
|Result for the period, EUR mill.||-56.2||-40.1||-99.8|
|Earnings per share, undiluted, EUR||-0.78||-0.56||-1.39|
|Equity per share, EUR||14.65||11.44||10.55|
|Cash flow from operating activities, EUR mill.||-65.2||-112.9||29.6|
|Capital expenditure, EUR mill.||16.5||9.4||53.8|
|Net gearing, per cent||84.3||107.8||105.4|
|Equity ratio, per cent||43.9||39.9||39.3|
|Number of shares, undiluted, weighted average, 1 000 pc||72 049||72 049||72 049|
Return on capital employed,
rolling 12 months, per cent
|Personnel, average||14 026||14 302||14 533|
Stockmann continues the comprehensive turnaround of its business according to the strategic direction set in late 2014. As of 1 January 2015, Stockmann has been using a new reporting structure in order to better reflect the different business logics in the retail and real estate businesses. The new reporting segments are Stockmann Retail, Real Estate and Fashion Chains. Stockmann’s goal is to change the company’s legal structure in line with the new operating structure, and therefore the possibility of incorporating real estate and retail operations into separate subsidiaries is being investigated.
Stockmann Retail consists of the Stockmann department stores, the Academic Bookstore, Hobby Hall and their online stores. The division has an omnichannel focus on the Stockmann department stores and the stockmann.com online store, while a new owner is being sought for the Hobby Hall distance retail business. The future selection of the Stockmann department stores and the online store will have a stronger focus on fashion, cosmetics, home products and food in Stockmann Delicatessen. To enhance the customer experience, the offering will be complemented with attractive goods and services from tenants.
As an important part of the turnaround, Stockmann launched an efficiency programme in February 2015 with an annual cost savings target of EUR 50 million. The programme includes various measures to improve the profitability and competitiveness of Stockmann’s core businesses. A significant share of the cost savings is expected to be achieved through personnel reductions which may affect up to 420 people in support functions in 2015 and 2016. In Finland, codetermination negotiations have been started on the potential reduction of at most 260 people in 2015. In Russia, 70 positions will be reduced during 2015. As a part of the programme, Stockmann decided in April to close down its department store in Oulu, Finland, at the latest in early 2017 and three department stores in the Mega shopping centres in Moscow by the end of 2016.
The Real Estate division comprises the Group’s real estate holdings in Helsinki, St Petersburg, Tallinn and Riga which are used by the Stockmann department stores and external tenants. Stockmann has decided to withdraw from its own electronics offering and to lease retail space in its department stores to Expert ASA Oy. Expert will open its store in the Helsinki city centre store in May, in Turku in June and in Tampere in September 2015.
The Fashion Chains division comprises Lindex and until 1 April 2015 also Seppälä, which was sold to Seppälä’s CEO and her husband. The transaction was completed on 1 April 2015 according to the memorandum of understanding signed on 2 February 2015. Lindex’s operations will be developed independently of the rest of the Stockmann Group, under its own Board of Directors.
Press and analyst briefing
A press and analyst briefing in Finnish will be held today, on 29 April 2015 at 9:15 a.m. at the Fazer À la Carte restaurant on the 8th floor of Stockmann's Helsinki city centre department store, Aleksanterinkatu 52.
CEO Per Thelin and CFO Pekka Vähähyyppä will host a webcast in English on 29 April 2015, at 11:15 a.m. EET presenting the Interim Report. To participate in the webcast, please dial one of the numbers below 5–10 minutes before the call begins. The presentation can be followed by this link or on the address stockmanngroup.com.
Finland: +358 9 2310 1619
Sweden: +46 8 5065 3935
United Kingdom: +44 20 3427 1921
Germany: +49 69 2222 10635
France: +33 1 76 77 22 32
United States of America: +1646 254 3371
Confirmation code: 8765076
Per Thelin, CEO, tel. +358 9 121 5801
Pekka Vähähyyppä, CFO, tel. +358 9 121 3351
Nora Malin, Director, Corporate Communications, tel. +358 9 121 3558
OVK Q1 2015 ENG.pdf