Stockmann Group’s Interim Report 1 January - 31 March 2017

Operating result continued to improve

STOCKMANN plc, Interim report 28.4.2017 at 8:00 EET


- Consolidated revenue was EUR 242.7 million (273.1).
- Revenue in comparable businesses was down by 2.9%.
- Gross margin was 51.1% (50.2%).
- Operating result was EUR -27.8 million (-30.3).
- Earnings per share were EUR -0.43 (-0.46).

- Due to normal seasonal variation, the first-quarter operating result is typically negative.
- Guidance for 2017 remains unchanged: Stockmann expects the Group’s revenue for 2017 to decline due to changes in the store network and product mix. Adjusted operating profit is expected to improve, compared with 2016.


Our turnaround journey continued in the first quarter with improved performance in both Stockmann Retail and Real Estate. In Sweden, the fashion market declined during the first quarter, which affected the Lindex result negatively. As a whole, the Group’s operating result improved slightly.

In Stockmann Retail, improvements in the selection, customer service and shopping environment are starting to be visible for our customers. In the first quarter, non-food sales in our department stores were already on the previous year’s level. The good progress in efficiency measures continued, and the cost savings are clearly visible in Retail’s comparable operating result, which is up by over EUR 6 million.

Real Estate continued to perform well during the quarter thanks to increased rental income particularly in the Nevsky Centre shopping centre. The centre also acquired several new tenants during the quarter. An investigation into the possible sale of the property is progressing, and we have reclassified the property as an asset held for sale.

Lindex’s revenue increased in all other markets except Sweden and Norway. The result in these main markets was lower than expected, and actions are already being taken to improve the performance going forward.

In the Crazy Days campaign, which took place in Stockmann stores after the first quarter, sales were close to the previous year’s level. The campaign got off to a strong start on Wednesday and the online store was very successful during the entire campaign. Now we will put our efforts into achieving strong performance during the rest of the second quarter. Further measures to stabilise and boost sales will be carried out in all the divisions.


Revenue, EUR mill. 242.7 273.1 1 303.2
Gross margin, % 51.1 50.2 53.4
EBITDA, EUR mill. -12.5 -16.2 76.8
Adjusted EBITDA*, EUR mill. -12.5 -16.2 79.4
Operating result (EBIT), EUR mill. -27.8 -30.3 17.6
Adjusted operating result (EBIT)*, EUR mill. -27.8 -30.3 20.2
Net financial items, EUR mill. -4.6 -4.3 -23.1
Result before tax, EUR mill. -32.4 -34.6 -5.5
Result for the period, EUR mill. -29.6 -31.6 -18.2
Earnings per share, undiluted and diluted, EUR -0.43 -0.46 -0.33
Personnel, average 7 929 9 299 9 006
Net earnings per share, undiluted and diluted, EUR -0.43 -0.31 -0.12
Cash flow from operating activities, EUR mill. -78.1 -75.3 41.5
Capital expenditure, EUR mill. 7.8 5.9 44.2
Equity per share, EUR 14.46 14.20 14.99
Net gearing, % 79.9 81.6 68.3
Equity ratio, % 46.1 44.8 48.3
Number of shares, undiluted and diluted, weighted average, 1 000 pc 72 049 72 049 72 049
Return on capital employed, rolling 12 months, % 1.3 -5.3 1.8

* There were no adjustments made in the first quarter in 2017 or 2016. For full-year 2016, adjustments affecting operating result were EUR 2.6 million and they were mostly related to ICT outsourcing.
** Includes department store operations in Russia which were discontinued in the first quarter of 2016.

Stockmann uses Alternative Performance Measures according to the guidelines of the European Securities and Market Authority (ESMA) to better reflect the operational business performance and to facilitate comparisons between financial periods. Gross profit is calculated by deducting the costs of goods sold from the revenue, and gross margin is calculated by dividing gross profit by the revenue as a percentage. EBITDA is calculated from operating result excluding depreciation. Adjusted EBITDA and adjusted operating result (EBIT) are measures, which exclude non-recurring items affecting comparability from the reported EBITDA and reported operating result (EBIT). Stockmann also uses the term “revenue in comparable businesses” which refers to revenue excluding Hobby Hall, which was divested on 31 December 2016, the Oulu department store, which was closed on 31 January 2017, and the Lindex stores in Russia, which were closed in 2016.


In the Stockmann Group’s largest operating country, Finland, the economy has slowly begun to recover. GDP and the retail market are expected to grow slightly in 2017. Consumers’ purchasing power is, however, not expected to increase and purchasing behaviour is changing due to digitalisation and increasing competition.

The Swedish economy remained stable in 2016 and the GDP growth estimate for 2017 remains on a higher level than in Finland. The steady growth in the fashion market stagnated in 2016, and the market is expected to decline in 2017.

In the Baltic countries, GDP growth is estimated to continue. The outlook for these countries is expected to be better than that for the Stockmann Group’s other market areas.

The Russian economy is expected to recover gradually, but the purchasing power of Russian consumers remains low.

Stockmann will continue improving the Group’s long-term competitiveness and profitability. The efficiency measures launched in summer 2016 will be fully visible in the 2017 operating costs. Improvements in the operating result in 2017 are estimated to come mainly from the Stockmann Retail division, which is still loss-making, while Lindex and Real Estate are expected to continue their profitable performance.


Stockmann expects the Group’s revenue for 2017 to decline due to changes in the store network and product mix. Adjusted operating profit is expected to improve, compared with 2016.

Press and analyst briefing
A press and analyst briefing will be held today, on 28 April 2017 at 9:15 a.m. EET in the Fazer À la Carte restaurant on the 8th floor of Stockmann’s Helsinki city centre department store, Aleksanterinkatu 52 B.

CEO Lauri Veijalainen will host a webcast in English today, on 28 April 2017, 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 webcast begins. The presentation can be followed by this link or on the address The recording and presentation material are available on the company's website after the event.

Finland: +358 (0)9 7479 0361
Sweden: +46 (0)8 5033 6574
United Kingdom: +44 (0)330 336 9105
United States of America: +1 719 457 2086

Confirmation code: 2243000

Further information:
Lauri Veijalainen, CFO, tel. +358 9 121 5062
Nora Malin, Director, Corporate Communications, tel. +358 9 121 3558


Lauri Veijalainen

Nasdaq Helsinki
Principal media

Stockmann Q1 2017 ENG.pdf.pdf