STOCKMANN plc
Quarterly report
24.4.2008 at 12.45
STOCKMANN plc INTERIM REPORT January 1 - March 31, 2008
FIRST-QUARTER EARNINGS DECREASE AS FORECAST
The Stockmann Group's sales grew by 34 per cent to EUR 497.5 million (EUR
371.7 million in 2007). Owing to the running of the Crazy Days campaign
entirely in April, the fewer days of sales than a year ago and to a non-
recurring imputed IFRS expense charge in connection with the Lindex
transaction, the operating result decreased as forecast and was a loss of
EUR 2.5 million (profit of EUR 8.2 million). Net financial expenses grew
clearly as a consequence of the Lindex transaction, pushing the result for
the period into a loss of EUR 11.6 million. Earnings per share were EUR
0.21 negative. The earnings estimate for 2008 is unchanged.
Key figures
Continuing operations 1-3/2008 1-3/2007 2007
Sales EUR mill. 497.5 371.7 1 668.3
Revenue EUR mill. 413.4 311.4 1 398.2
Operating profit EUR mill. -2.5 8.2 125.2
Profit (loss) before taxes EUR mill. -13.8 8.0 119.4
Earnings per share EUR -0.21 0.11 1.59
Group total
Equity per share EUR 9.07 9.14 10.66
Cash flow from operating EUR mill. -76.4 -38.6 119.9
activities
Gearing per cent 197.4 19.7 146.9
Equity ratio per cent 26.9 63.0 32.6
Weighted average number of thousands 55 724 55 353 55 606
shares
Return on capital employed, per cent 10.7 22.0 12.1
rolling 12 months
FINANCIAL REPORTING
Stockmann adopted International Financial Reporting Standards (IFRS) on
January 1, 2005. The quarterly report has been prepared in compliance with
IAS 34. The accounting policies and calculation methods applied are the
same as those in the 2007 financial statements. The figures are unaudited.
SALES AND RESULT
Stockmann's consolidated sales grew by 34 per cent to EUR 497.5 million
(EUR 371.7 million). The growth was attributable nearly entirely to
including Lindex's sales figures in the Stockmann Group's sales. The
Department Store Division's Crazy Days campaign was run in April in
Finland this year, whereas last year it was in March. This had a negative
effect on the sales trend in Finland during the report period. Easter fell
in March this year and in April last year. In Finland, there were three
fewer days of sales in March than last year, and this also had a
considerable impact on sales figures during the period. Because the above-
mentioned factors had a considerable impact on first-quarter sales and
earnings, Stockmann has decided to publish the preliminary sales growth at
the Group level during January 1 - April 23, 2008. The Group's sales
increased by 48 per cent compared with the same period of 2007 owing to
the acquisition of Lindex, a successful Crazy Days campaign in all
markets, and good sales development in April in all business divisions.
The Stockmann Group will approximately double its sales in April, compared
with the previous year.
January-March sales in Finland were down 6.4 per cent to EUR 263.5
million. The Group's sales abroad amounted to EUR 234.0 million, an
increase of 159 per cent. Excluding Lindex, sales abroad grew by 23 per
cent. International operations accounted for an increased share of
consolidated sales, rising from 24 per cent to 47 per cent.
The sale of an unbuilt plot generated EUR 3.8 million of other operating
income.
The Group's operating gross margin increased by EUR 62.6 million to EUR
182.4 million. The relative gross margin was 44.1 per cent (38.5 per
cent). The relative gross margin of the Department Store Division and
Seppälä improved, and the gross margin was also boosted by the inclusion
of Lindex's figures within the Group's consolidated accounts. Operating
expenses increased by EUR 71.1 million and depreciation by EUR 6.1
million. The Group's operating profit fell by EUR 10.7 million to a loss
of EUR 2.5 million. The decrease in operating profit was attributable to a
large extent to the fact that the Crazy Days campaign was run in Finland
in April, which is a divergence from the comparative period.
Net financial expenses grew by EUR 11.1 million and were EUR 11.3 million
(EUR 0.2 million). Net financial expenses were increased substantially by
the borrowed capital costs for the Lindex acquisition.
Profit before taxes was EUR 13.8 million negative, down EUR 21.8 million
on the figure a year earlier. On the basis of the loss-making result in
the report period, a tax asset of EUR 2.2 million was recorded. The effect
of taxes on the result was EUR 4.1 million smaller than it was a year
earlier. Earnings per share were EUR 0.21 negative (EUR 0.11) negative and
diluted for options they were EUR 0.21 negative (EUR 0.11). Equity per
share was EUR 9.07 (EUR 9.14).
SALES AND EARNINGS TREND BY BUSINESS SEGMENT
Department Store Division
The Department Store Division's sales were down 2 per cent to EUR 275.9
million. Sales in Finland were down 12 per cent. Running the Crazy Days
campaign in April caused a substantial drop in sales in Finland.
International Operations' sales were increased by the good like-for-like
retail performance by the department stores in Russia and the Baltic
countries as well as by the new Bestseller stores. Sales by International
Operations grew by 29 per cent and its share of the Group's sales was 33
per cent (25 per cent). The relative gross margin of the report period was
on the same level as in the previous year. The Department Store Division's
operating profit decreased by EUR 6.3 million to EUR 1.5 million (7.8
million).
Lindex
Lindex's sales in the report period amounted to EUR 138.3 million.
Compared with the pro forma statement for the corresponding period in
2007, sales were down 2 per cent. Calculated in local currencies, the
decline in sales was one per cent. Because Easter fell in March, the sales
trend in the main market areas declined, but sales growth in the Baltic
countries was strong. Lindex's operating result was a loss of EUR 1.2
million. The operating result was burdened by depreciation and
amortization connected with the Lindex acquisition and by a non-recurring
imputed IFRS expense charge for inventories, to a total amount of EUR 4.5
million. The pro forma operating profit was EUR 2.2 million in the
previous year.
Hobby Hall
Hobby Hall's sales decreased by 15 per cent to EUR 47.4 million (EUR 55.6
million). Sales diminished both in Finland and abroad, and Hobby Hall's
relative gross margin also fell. The new enterprise resource planning
(ERP) system that went into use in April 2007 continued to affect sales
figures during the report period. This meant that sales will be recorded
later than they were last year. The growth in telesales and in-store sales
was weakened above all by an early Easter that came in March. Hobby Hall's
operating result fell by EUR 3.6 million and was EUR a loss of 2.1 million
(profit of 1.5 million in Q1/07). The weakening in the operating result
was due to lower sales and to start-up costs for operations in Russia.
Seppälä
Seppälä's sales increased by 3 per cent on the same period of last year
and were EUR 35.7 million. Sales in Finland were down 8 per cent in the
wake of a poor sales trend in a year when Easter fell in March. By
contrast, sales grew strongly in Russia where they were lifted by the new
stores that were opened and the good trend in like-for-like sales. Sales
abroad were up 32 per cent, and their share of Seppälä's total sales rose
to 35 per cent (27 per cent). The relative gross margin improved, but
fixed costs and depreciation also increased because of the heavy
investments in opening new stores. Seppälä's operating result decreased by
EUR 1.4 million and was a loss of EUR 0.6 million (profit of EUR 0.8
million).
FINANCING AND CAPITAL EMPLOYED
Liquid assets totalled EUR 17.1 million at the end of March, as against
EUR 23.8 million a year earlier and EUR 33.2 million at the end of 2007.
Interest-bearing liabilities at the end of March were EUR 1 014.6 million
(124.1 million), of which EUR 865.6 million consisted of long-term debt
(43.4 million). At the end of 2007, interest-bearing liabilities totalled
EUR 905.6 million, of which EUR 855.4 million was long-term debt. Capital
expenditures during the report period amounted to EUR 35.7 million. Net
working capital stood at EUR 203.8 million at the end of March, as against
EUR 244.6 million a year earlier and EUR 193.9 million at the end of 2007.
The dividend for 2007 according to the resolution of the Annual General
Meeting on March 18, 2008, totalling EUR 75.2 million, was paid out on
April 2. In the Quarterly Report, the dividend is treated as a
distribution of profits and a liability to the company's shareholders.
Owing to the acquisition of Lindex, the equity ratio weakened against the
comparative period and was 26.9 per cent at the end of March (63.0 per
cent). The equity ratio at the end of 2007 was 32.6 per cent. Gearing was
197.4 per cent at the end of March (19.7 per cent). At the end of 2007,
gearing was 146.9 per cent.
The return on capital employed over the past 12 months was 10.7 per cent
(12.1 per cent at the end of 2007). The Group's capital employed increased
by EUR 886.4 million from March of the previous year and stood at EUR 1
520.0 million towards the end of the report period (EUR 1 499.4 million at
the end of 2007).
CHANGES IN THE ORGANIZATION
Following the resignation of Ms Raija Saari, Hobby Hall's managing
director and a member of the Stockmann Group's Management Committee, Ms
Tuija Pesonen, administrative director, was appointed Hobby Hall's acting
managing director as from March 26, 2008. Stockmann has started the search
for a new managing director for Hobby Hall.
CAPITAL EXPENDITURES
Capital expenditures during the report period totalled EUR 35.7 million
(EUR 33.2 million).
Department Store Division
The construction works for the major enlargement and transformation
project for the department store in the centre of Helsinki are continuing.
The project involves expanding the department store's commercial premises
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, servicing and customer carpark will be built. After
the enlargement, the Helsinki department store will have a total of about
50 000 square metres of retail space. The cost estimate for the
enlargement is about EUR 190 million. The works are estimated to be
completed phase by phase by autumn 2010. During the report period, the
project required an investment of about EUR 13.6 million. As the works
have progressed, the department store's retail space has already returned
to the level preceding the enlargement project, and in the months ahead,
new space will be made available stage by stage. Stockmann has succeeded
in carrying out the extensive project without disrupting the department
store's profitability.
In 2006, Stockmann purchased a 10 000-odd square metre commercial plot on
Nevsky Prospect, St Petersburg's high street. The plot is located next to
the Vosstaniya Square metro station, in the immediate vicinity of the
Moscow railway station. On this plot, Stockmann will erect Nevsky Centre,
a shopping centre with about 100 000 square metres of gross floor space,
of which about 50 000 square metres will be store and office space. A full-
scale Stockmann department store with about 20 000 square metres of retail
space has been planned for the shopping centre, along with other retail
stores, office premises and an underground carpark. The total investment
is estimated at about EUR 170 million. The final construction permit was
obtained at the beginning of March. According to the target schedule, the
building will be completed by the end of 2009. During the report period,
the project required an investment of about EUR 4.6 million.
Stockmann opened a new Nike store in Russia in March. Stockmann now has a
total of six Nike stores in Russia.
The Department Store Division's capital expenditures came to EUR 26.1
million.
Lindex
Lindex's capital expenditures were for store openings and modernizations
as well as for the new distribution centre in Gothenburg, which became
operational at the turn of the year. They amounted to EUR 7.4 million. The
distribution centre's operations have started up according to plan.
In March, Lindex opened its second store in the Czech Republic. It opened
one store in Norway as well.
After the report period, Lindex has opened a store in Lithuania.
Hobby Hall
Hobby Hall's capital expenditures totalled EUR 0.5 million.
Seppälä
In the report period, Seppälä opened a store in Russia and Lithuania in
February. In addition, three stores in Finland moved to better commercial
locations.
Seppälä's capital expenditures came to EUR 1.5 million.
In April, after the close of the report period, Seppälä has opened a store
in Estonia and refurbished its flagship store in Helsinki's Forum shopping
centre.
Other capital expenditures
The Group's other capital expenditures came to EUR 0.2 million.
NEW PROJECTS
Department Store Division
Stockmann has signed a preliminary agreement on opening Moscow's fifth
Stockmann department store in leased premises in the Metropolis shopping
centre that is being built near the city's centre. The department store
will have a total of about 8 000 square metres of retail space, and
Stockmann's investment in the project will be about EUR 12 million.
Stockmann's objective is to open the department store by the end of 2008.
Stockmann has also made an agreement on opening a full-scale department
store in leased premises located in a shopping centre that is currently
being built in Ekaterinburg, Russia. The department store will have a
total of more than 8 000 square metres of retail space, and Stockmann's
investment in the project will be about EUR 12 million. According to
plans, the department store will be opened in 2009.
At the beginning of 2008, Stockmann signed a preliminary agreement on
opening a sixth Stockmann department store in Moscow in leased premises.
The department store, which will be located in the Rostokino shopping
centre that is under construction on the north side of Moscow, will have
about 10 000 square metres of retail space, and Stockmann's investment in
it will be about EUR 16 million. According to preliminary plans, the
shopping centre will be completed at the end of 2009.
In March, Stockmann signed a preliminary agreement on leasing business
premises for a department store in a shopping centre that will be located
in a new multifunctional centre near the centre of Vilnius, Lithuania's
capital city. The shopping centre will be completed towards the end of
2010. The Stockmann department store, with a total floor area of about 13
000 square metres, will be one of the shopping centre's anchor tenants.
The Department Store Division is continuing to establish new Stockmann
Beauty stores in Finland and to build out the chain of Nike and Bestseller
stores in Russia.
Lindex
Lindex has entered into an agreement on opening a store in St Petersburg -
its first in Russia - in August 2008. The objective is to open more stores
in Russia in the latter part of the year. In addition, agreements have
been made on opening three stores in Norway towards the end of the year as
well as two stores in Finland and one store in Sweden. The aim is also to
open more stores in the Baltic countries this year.
Lindex plans to open 20-25 new stores a year during the next two years,
half of which are in the Nordic countries and half in the new market areas
in Russia, the Baltic countries and Central Europe.
Lindex has signed a preliminary agreement with Delta International
Establishment on expanding its chain of stores to the Middle East under a
franchising arrangement. The franchising partner will carry out the store
investments, hire the staff and be responsible for the entire retail sales
operations. The first store is to be opened in Saudi Arabia in September
2008, and by the end of the year, six more stores will be opened there.
Over a five-year period, Lindex plans to open a total of 50 stores in
Saudi Arabia, Kuwait, the United Arab Emirates and Egypt.
Hobby Hall
Hobby Hall's revamped online store will be tested during the summer, and
it will be up and running after the tests have been completed. In order to
improve service, the cash register systems and telephone system will be
upgraded during the summer.
In the early autumn, Hobby Hall's head office will move into leased
premises in a new office building in Helsinki's Käpylä district.
Hobby Hall has decided to defer the opening of an online store in Sweden
and to concentrate in 2008 on seeking growth and profitability in its
present market areas - with a special emphasis on the newest market areas
of Lithuania and Russia.
Seppälä
This year Seppälä is aiming to open 10-15 new stores in the countries
where it presently operates, and also to open its first store in Ukraine.
RESOLUTIONS OF THE ANNUAL GENERAL MEETING
Stockmann's Annual General Meeting was held in Helsinki on March 18, 2008.
Dividend
The Annual General Meeting resolved that the dividend to be paid for the
2007 financial year is EUR 1.35 per share, or a total of EUR 75.2 million.
Election of the members of the Board of Directors
The Annual General Meeting resolved, in accordance with the proposal of
the Board's Appointments and Compensation Committee, that seven members be
elected to seats on the Board and re-elected LL.M. Christoffer Taxell,
Managing Director Erkki Etola, Managing Director Kaj-Gustaf Bergh,
Professor Eva Liljeblom, Managing Director Kari Niemistö, Corporate Vice
President of Sustainable Development Carola Teir-Lehtinen, and Managing
Director Henry Wiklund, for a term of office up to the end of the next
Annual General Meeting.
At its organisation meeting on March 18, 2008, the Board of Directors re-
elected LL.M. Christoffer Taxell as its chairman and Managing Director
Erkki Etola as its vice chairman. The Board of Directors re-elected LL.M.
Christoffer Taxell chairman of the Appointments and Compensation Committee
and re-elected as the other members of the committee Managing Director
Erkki Etola, Professor Eva Liljeblom and Managing Director Henry Wiklund.
Election of the auditors
Re-elected as regular auditors were Jari Härmälä, Authorized Public
Accountant, and Henrik Holmbom, Authorized Public Accountant. KPMG Oy Ab,
a firm of independent public accountants, will continue as the deputy
auditor.
Authorization of the Board of Directors to pass a resolution on the
issuance of shares and special rights entitling holders to shares
The Annual General Meeting authorized the Board of Directors of the
company to decide on the issuance of shares and special rights entitling
holders to shares, as referred to in Chapter 10, Section 1, of the Limited
Liability Companies Act in one or more instalments as follows.
The Board of Directors was authorized to decide on the amount of A Series
and B Series shares to be issued. However, the aggregate number of shares
issued on the basis of the authorization may not exceed 15 000 000 shares.
Issuance of shares and special rights entitling holders to shares can be
carried out in accordance with or in disapplication of the shareholders'
pre-emptive rights (directed issue). The Board of Directors is authorized
to decide on all the terms and conditions concerning the issue of shares
and special rights referred to in Chapter 10, Section 1, of the Limited
Liability Companies Act.
The authorization is effective for a maximum of three years from the date
of the Annual General Meeting. The authorization does not cancel the
authorization given by the General Meeting on March 20, 2007, and entered
in the Trade Register on May 14, 2007 regarding the right to pass a
resolution on the transfer of own shares (treasury shares).
The purpose of the issuance of shares and/or the issuance of special
rights entitling holders to shares is to reinforce the company's capital
structure by amortizing the debt obtained for the acquisition of AB Lindex
(publ).
Issuing share options to the Loyal Customers of Stockmann
The Annual General Meeting decided that, in disapplication of the
shareholders' pre-emptive rights, a total maximum of 2 500 000 share
options be granted to Stockmann's Loyal Customers without consideration.
The purpose of granting the share options is to offer Loyal Customers a
benefit that rewards them for patronage and at the same time improves
Stockmann's competitive position. Share options will be issued to loyal
customers, whose purchases in companies belonging to the Stockmann Group
together with purchases originating from parallel cards directed to the
same account during the time period January 1, 2008 - December 31, 2009
amount to a total of at least EUR 6 000. For purchases of at least EUR 6
000, a Loyal Customer will receive 20 share options without consideration.
In addition, for each full 500 euros by which the purchases exceed EUR 6
000, the Loyal Customer will receive an additional two share options. Each
share option entitles its holder to subscribe for one of the company's
Series B shares. The subscription price is the volume-weighted average
price of the Series B share on the Helsinki Stock Exchange during the
period February 1 - February 29, 2008. The subscription price of a share
subscribed for with the share options will be lowered, by the amount of
the dividends that may be declared prior to the share subscription, on the
record date for each dividend payout. The subscription period for the
shares is in May in the years 2011 and 2012.
SHARES AND SHARE CAPITAL
The company's market capitalization at the end of March was EUR 1 756.5
million (1 826.7 million). At the end of 2007 the market capitalization
was EUR 1 659.8 million.
Stockmann's share prices outperformed both the OMX Helsinki index and the
OMX Helsinki CAP index during the report period. At the end of March the
stock exchange price of the Series A share was EUR 33.00, compared with
EUR 29.50 at the end of 2007, and the Series B share was selling at EUR
30.00, as against EUR 29.66 at the end of 2007.
At March 31, 2008, Stockmann had 24 564 243 Series A shares and 31 529 369
Series B shares.
Stockmann held 369 560 of its own Series B shares (treasury shares) at the
end of March 2008. They comprised 0.7 per cent of all the shares
outstanding and 0.1 per cent of all the votes. The shares were bought back
at a total price of EUR 5.6 million.
The Annual General Meeting in 2007 authorized the Board of Directors to
decide on the transfer of the company's own Series B shares in one or more
instalments. The authorization will be in force for five years. The
company's Board of Directors does not have valid authorizations to buy
back treasury shares.
NUMBER OF EMPLOYEES
During the report period, the Stockmann Group had an average payroll of
15 479 employees, or 5 171 more than in the comparison period. The number
of employees was increased by the acquisition of Lindex in December as
well as by the new Bestseller, Nike and Seppälä stores abroad. Stockmann's
average number of employees, converted to full-time staff, increased by
3 387 and was 11 646.
At the end of March 2008 the number of staff working outside Finland was
8 247 people. At the end of March 2007, Stockmann had 3 790 people working
outside Finland. The proportion of the total personnel who were working
abroad was 51 per cent (34 per cent).
RISK FACTORS
There has been no change in risk factors after the publication on February
7, 2008, of the discussion presented in the Board Report on Operations.
Notable near-term risks relate to pending legal proceedings.
AB Lindex (publ) is involved in ongoing legal proceedings concerning the
eligibility for deduction in Swedish taxation of losses of about EUR 70
million made by the Lindex Group's company in Germany. Lindex has won the
previous legal proceedings in the matter in 2004/2005 and 2005/2006, but
the Swedish tax authorities have appealed the decisions, and hearing of
the case is continuing. Lindex has recorded against the losses a tax
deduction of about EUR 21 million, including interest, which is recorded
in earnings.
Lindex has also demanded a rectification of an assessment on the basis of
the estimated earnings from operations in Germany during 2004-2006. This
rectification claim will come to about EUR 32 million. The tax effect of
this claim has not been recorded in earnings.
The Group is engaged in arbitration concerning the validity of the
leasehold on the Smolenskaya department store, which is located in the
centre of Moscow, after April 30, 2008. The litigation concerns exercise
of a 10-year continuation lease period under the lease agreement.
FULL-YEAR OUTLOOK
Of late, uncertainty has increased greatly in the world economy as well as
in the financial and equity markets. In the Stockmann Group's market areas
in the Nordic countries, the Baltic area and Russia, this has nevertheless
not been reflected in consumer demand. According to estimates, there will
be further growth in consumption demand. The growth will be stronger in
the Baltic countries and Russia than in the Nordic countries.
Lindex will be part of the Stockmann Group for all of 2008. Because sales
by all the divisions are expected to be on a favourable trend, this means
a strong increase in the Group's sales. Consolidated sales are estimated
to be about EUR 2.4-2.5 billion in 2008.
The decrease in sales in the first quarter owing to the deferral of the
Crazy Days campaign and to Easter falling in March will be offset by
strong sales growth in the second quarter, especially in April. Second-
quarter operating profit will improve markedly on the figure a year
earlier.
Full-year operating profit from continuing operations is expected to
improve and all the divisions are set to generate higher operating profit.
Although the Group's financial expenses following the Lindex acquisition
will increase markedly, the objective is to post higher profit in 2008
than in the previous year.
Balance sheet, Group EUR millions 31.3.08 31.3.07 31.12.07
ASSETS
Non-current assets
Intangible assets (Ref. 1) 849.9 5.9 844.5
Property, plant and equipment (Ref.1) 494.2 376.4 476.8
Available-for-sale investments 6.6 6.5 6.5
Non-current receivables 1.7 1.7
Deferred tax assets 5.3 2.5 5.3
Non-current assets, total 1 357.8 391.4 1 334.8
Current assets
Inventories 286.2 181.3 244.4
Receivables, interest-bearing 95.5 100.8 98.8
Receivables, non interest-bearing 121.8 111.3 112.5
Cash and cash equivalents 17.1 23.8 33.2
Current assets, total 520.7 417.2 488.9
Assets, total 1 878.5 808.6 1 823.7
EQUITY AND LIABILITIES
Equity 505.4 509.5 593.8
Minority interest 0.0 0.0 0.0
Equity, total 505.4 509.5 593.8
Non-current liabilities, interest-bearing 865.6 43.4 855.4
Reserves 2.6 5.3
Non-current liabilities, total 868.2 43.4 860.7
Deferred taxes liabilities 56.2 26.2 57.3
Current liabilities
Current liabilities, interest-bearing 149.0 80.7 50.1
Current liabilities, non interest-bearing 299.7 148.8 261.7
Current liabilities, total 448.7 229.5 311.8
Equity and liabilities, total 1 878.5 808.6 1 823.7
Equity ratio, per cent 26.9 63.0 32.6
Gearing, per cent 197.4 19.7 146.9
Cash flow from operations per share, EUR -1.36 -0.69 2.16
Interest-bearing net debt, EUR mill. 901.9 -0.5 773.6
Number of shares at March 31, thousands 56 094 55 855 56 094
Weighted average number of shares, 55 724 55 353 55 606
thousands
Weighted average number of shares, 55 798 55 879 55 815
diluted, thousands
Market capitalization, EUR mill. 1 756.5 1 826.7 1 659.8
Equity ratio, per cent = 100 x (Equity + minority interest) / Total assets
less advance payments received
Gearing, per cent = 100 x Interest-bearing liabilities less cash and cash
equivalents / Equity total
Interest-bearing net debt = Interest-bearing liabilities less cash and
cash equivalents less interest-bearing liabilities
Market capitalization, EUR mill. = Number of shares multiplied by the
quotation for the respective share series on the balance sheet date
Cash flow statement, Group EUR millions 1-3/2008 1-3/2007 1-12/2007
Cash flows from operating activities
Net profit for the financial year -11.6 6.1 88.4
Adjustments:
Deprecation 15.2 9.1 36.9
Profit (-) and loss (+) from sales -3.8
of non-current assets
Financial expenses 11.6 0.6 7.0
Financial income -0.3 -0.4 -1.3
Taxes paid -2.2 1.9 31.1
Other adjustments -2.4 0.8 1.2
Changes in working capital:
Change in trade and other 7.9 -22.3 -11.0
receivables
Change in inventories -41.6 -26.3 -12.5
Change in trade payables and other -29.3 -2.0 8.8
liabilities
Interest paid -10.6 -0.2 -6.5
Interest received 0.2 0.4 1.3
Income taxes paid -9.6 -6.5 -23.5
Net cash from operating activities -76.4 -38.6 119.9
Cash flows from investing activities
Investments in tangible and intangible -38.9 -33.1 -113.2
assets
Acquisition of subsidiary net cash -5.9 -852.5
acquired
Capital expenditures on other -0.1
investments
Dividends received 0.0 0.0 0.1
Net cash used in investing activities -44.8 -33.1 -965.6
Cash flows from financing activities
Proceeds from issue of share capital 3.8 5.8
Change in short-term loans, increase 81.4 80.7 35.5
(+), decrease (-)
Long-term loans, increase (+), 6.1 20.0 835.6
decrease (-)
Dividends paid 0.0 -68.2 -72.1
Net cash used in financing activities 87.5 36.3 804.8
Change in cash and cash equivalents -33.7 -35.3 -40.9
Cash and cash equivalents at start of 33.2 59.2 59.2
the period
Translation differences in cash and cash 0.1 0.4
equivalents
Cheque account on credit -14.6
Cash and cash equivalents 17.1 59.2 33.2
Cheque account on credit -32.1 -14.6
Cash and cash equivalents at end of the -15.0 23.8 18.6
period
Income statement, Change
Group, EUR millions 1-3/2008 1-3/2007 per cent 1-12/2007
Revenue 413.4 311.4 33 1 398.2
Other operating income 3.8 9.7
Materials and consumables -231.0 -191.6 21 -791.2
Wages, salaries and employee -85.1 -50.8 68 -224.1
benefits expenses
Depreciation -15.2 -9.1 67 -36.9
Other operating expenses -88.5 -51.7 71 -230.6
Operating profit (loss) -2.5 8.2 -131 125.2
Finance income and expenses -11.3 -0.2 -5.7
Profit (loss) before tax -13.8 8.0 -272 119.4
Income taxes 2.2 -1.9 -31.1
Profit (loss) for the period -11.6 6.1 -289 88.4
Earnings per share, EUR -0.21 0.11 1.59
Earnings per share, diluted, -0.21 0.11 1.58
EUR
Operating profit, per cent -0.6 2.6 9.0
Equity per share, EUR 9.07 9.14 -1 10.66
Return on equity, per cent, 13.9 21.2 -34 15.2
moving 12 months
Return on capital employed, 10.7 22.0 -51 12.1
per cent, moving 12 months
Average number of employees, 11 646 8 259 41 8 979
converted to full-time staff
Investments 35.7 33.2 8 977.4
Earnings per share, EUR = (Profit before taxes - minority interest -
income taxes) / Average number of shares, adjusted for share issues
Return on equity, per cent, moving 12 months = 100 x Profit for the period
(12 months) / (Equity + minority interest) (average over 12 months)
Return on capital employed, per cent, moving 12 months = 100 x (Profit
before taxes + interest and other financial expenses) (12 months) /
Capital employed (average over 12 months)
SEGMENT INFORMATION
Segments
Sales, EUR millions 1-3/2008 1-3/2007 Change 1-12/2007
per cent
Department Store Division 275.9 281.2 -2 1 218.1
Lindex 138.3 68.1
Hobby Hall 47.4 55.6 -15 206.5
Seppälä 35.7 34.6 3 174.7
Shared 0.2 0.2 -7 0.8
Group 497.5 371.7 34 1 668.3
Revenue, EUR millions 1-3/2008 1-3/2007 Change 1-12/2007
per cent
Department Store Division 232.7 236.3 -2 1 025.0
Lindex 111.0 54.7
Hobby Hall 39.7 46.2 -14 171.7
Seppälä 29.7 28.7 3 145.1
Shared 0.4 0.1 1.7
Group 413.4 311.4 33 1 398.2
Operating profit, EUR 1-3/2008 1-3/2007 Change 1-12/2007
millions per cent
Department Store Division 1.5 7.8 -81 91.8
Lindex -1.2 15.0
Hobby Hall -2.1 1.5 -244 5.7
Seppälä -0.6 0.8 -180 20.7
Shared 0.2 -1.8 -111 -7.5
Eliminations -0.3 0.0 -0.7
Group -2.5 8.2 -130 125.2
Investments,
gross, EUR millions 31.3.2008 31.3.2007 Change 31.12.2007
per cent
Department Store Division 26.1 30.4 -14 111.5
Lindex 7.4 853.1
Hobby Hall 0.5 0.6 -5 3.5
Seppälä 1.5 2.0 -23 9.3
Shared 0.2 0.2 -2
Group 35.7 33.2 8 977.4
Assets, EUR millions 31.3.2008 31.3.2007 Change 31.12.2007
per cent
Department Store Division 693.0 633.2 9 652.4
Lindex 1 000.2 992.9
Hobby Hall 106.1 111.6 -5 102.7
Seppälä 42.0 36.3 16 44.7
Shared 37.1 27.5 35 30.9
Group 1 878.5 808.6 132 1 823.7
Non-interest-bearing 31.3.2008 31.3.2007 Change 31.12.2007
liabilities, EUR millions per cent
Department Store Division 116.8 116.3 0 125.9
Lindex 85.9 100.8
Hobby Hall 16.8 20.0 -16 14.5
Seppälä 5.1 5.3 -5 11.5
Shared 134.0 33.4 71.7
Group 358.5 175.0 105 324.3
Market areas
Change
Sales, EUR millions 1-3/2008 1-3/2007 per cent 1-12/2007
Finland 1) 263.5 281.4 -6 1 171.5
Sweden and Norway 2) 119.4 59.5
Baltic states and Czech 49.7 43.0 16 194.1
Republic 1)
Russia 3) 64.9 47.3 37 243.2
Group 497.5 371.7 34 1 668.3
Finland, per cent 53.0 75.7 70.2
International operations, 47.0 24.3 29.8
per cent
Muutos
Revenue, EUR millions 1-3/2008 1-3/2007 prosenttia 1-12/2007
Finland 1) 220.3 234.3 -6 977.6
Sweden and Norway 2) 95.5 47.5
Baltic states and Czech 42.3 36.6 16 165.0
Republic 1)
Russia 3) 55.4 40.5 37 208.0
Group 413.4 311.4 33 1 398.2
Finland, per cent 53.3 75.2 69.9
International operations, 46.7 24.8 30.1
per cent
Change
Operating profit (loss), EUR 1-3/2008 1-3/2007 per cent 1-12/2007
millions
Finland 1) 2.9 10.8 -73 96.3
Sweden and Norway 2) 0.6 14.4
Baltic states and Czech 0.2 2.5 -90 21.1
Republic 1)
Russia 3) -6.3 -5.2 21 -6.6
Group -2.5 8.2 -130 125.2
Investments, Change
gross, EUR millions 31.3.2008 31.3.2007 per cent 31.12.2007
Finland 1) 21.6 14.3 51 80.2
Sweden and Norway 2) 5.9 847.0
Baltic states and Czech 1.4 0.6 144 5.1
Republic 1)
Russia 3) 6.8 18.3 -63 45.0
Group 35.7 33.2 8 977.4
Finland, per cent 60.5 43.1 8.2
International operations, 39.5 56.9 91.8
per cent
Change
Assets, EUR millions 31.3.2008 31.3.2007 per cent 31.12.2007
Finland 1) 630.5 567.3 11 585.2
Sweden and Norway 2) 981.3 975.7
Baltic states and Czech 76.7 74.1 4 75.8
Republic 1)
Russia 3) 190.0 167.3 14 187.0
Group 1 878.5 808.6 132 1 823.7
Finland, per cent 33.6 70.2 32.1
International operations, 66.4 29.8 67.9
per cent
1) Department Store
Division, Lindex, Hobby Hall
and Seppälä
2) Lindex
3) Department Store
Division, Hobby Hall and
Seppälä
Statement of changes Share
in equity premium Other
Group, EUR millions Equity* fund funds
Equity December 31, 2006 111.7 183.4 44.1
Options exercised 0.5 2.6
Share bonus 0.2
Transfer to other funds 0.0
Cost of share issue
Dividends
Profit for the period
Equity March 31, 2007
Equity December 31, 2007 112.2 186.2 44.1
Cash flow hedges 112.2 186.0 44.1
Cost of share issue
Dividends
Financial instruments
Translation differences
Profit for the period
Equity March 31, 2008 112.2 186.0 44.1
* including share issue
Statement of changes Fair Trans-
in equity value lation Retained
Group, EUR millions reserve** reserve earnings
Equity December 31, 2006 0.0 232.3
Options exercised
Share bonus 0.1
Transfer to other funds
Cost of share issue 0.5
Dividends -72.1
Profit for the period 0.0 0.0
Equity March 31, 2007 6.1
Equity December 31, 2007 0.0 166.9
Cash flow hedges 0.5 0.0 250.9
Cost of share issue -2.0
Dividends 0.3
Financial instruments -75.2
Translation differences 0.0 0.1 0.0
Profit for the period -11.6
Equity March 31, 2008 -1.5 0.1 164.4
** excluding deferred tax liability
Statement of changes
in equity Minority
Group, EUR millions Total interest Total
Equity December 31, 2006 571.6 0.0 571.6
Options exercised 3.1 3.1
Share bonus 0.3 0.3
Transfer to other funds 0.0 0.0
Cost of share issue 0.5 0.5
Dividends -72.1 -72.1
Profit for the period 0.0 0.0
Equity March 31, 2007 6.1 0.0 6.1
Equity December 31, 2007 509.5 0.0 509.5
Cash flow hedges 593.8 0.0 593.8
Cost of share issue -2.0 -2.0
Dividends 0.3 0.3
Financial instruments -75.2 -75.2
Translation differences 0.1 0.1
Profit for the period -11.6 0.0 -11.6
Equity March 31, 2008 505.4 0.0 505.4
Contingent liabilities, 31.3.2008 31.3.2007 31.12.2007
Group EUR millions
Mortgages on land and 1.7 1.7 1.7
buildings
Guarantees 1.5
Pledges 0.1 0.1
Total 1.7 3.3 1.8
Lease agreements on 31.3.2008 31.3.2007 31.12.2007
business premises, EUR
millions
Minimum rents payable on
the basis of binding lease
agreements on business
premises
Within one year 124.0 69.9 124.6
After one year 469.5 342.9 449.3
Total 593.4 412.8 573.8
Lease payments 31.3.2008 31.3.2007 31.12.2007
Within one year 1.1 1.0 1.4
After one year 0.8 0.9 1.3
Total 1.9 1.9 2.8
Derivative instruments 31.3.2008 31.3.2007 31.12.2007
Nominal value
Interest rate derivatives 53.3 69.3
Exchange rates
Country Currency 31.3.2008 31.3.2007 31.12.2007
Russia RUB 37.1130 34.6580 35.9860
Estonia EEK 15.6466 15.6466 15.6466
Latvia LVL 0.6982 0.7097 0.6964
Lithuania LTL 3.4528 3.4528 3.4528
Sweden SEK 9.3970 9.0404 9.4415
Income statement
quarterly, Q1 Q4 Q3 Q2
Group, EUR millions 2008 2007 2007 2007
Continuing operations
Revenue 413.4 483.9 308.6 294.2
Other operating income 3.8 0.0 9.7
Materials and consumables -231.0 -255.8 -179.8 -164.0
Wages, salaries and -85.1 -73.2 -47.6 -52.6
employee benefits expenses
Depreciation -15.2 -10.5 -8.9 -8.4
Other operating expenses -88.5 -73.7 -50.0 -55.1
Operating profit (loss) -2.5 70.8 32.1 14.1
Finance income and expenses -11.3 -4.3 -0.5 -0.8
Profit (loss) before tax -13.8 66.5 31.6 13.3
Income taxes 2.2 -17.9 -8.1 -3.2
Profit (loss) for the -11.6 48.6 23.5 10.2
period, continuing
operations
Discontinued operations
Profit (loss) for the
period, discontinued
operations
Profit (loss) for the -11.6 48.6 23.5 10.2
period
Earnings per share,
continuing operations, EUR
Basic -0.21 0.87 0.43 0.18
Diluted -0.21 0.87 0.42 0.18
Earnings per share,
discontinued operations,
EUR
Basic
Diluted
Earnings per share, total,
EUR
Basic -0.21 0.87 0.43 0.18
Diluted -0.21 0.87 0.42 0.18
Q1 Q4 Q3 Q2
Sales, EUR millions 2008 2007 2007 2007
Department Store Division 275.9 400.4 275.5 261.0
Lindex 138.3 68.1
Hobby Hall 47.4 58.9 45.9 46.0
Seppälä 35.7 51.2 45.4 43.5
Shared 0.2 0.2 0.2 0.2
Group 497.5 578.8 367.0 350.7
Revenue, EUR millions
Department Store Division 232.7 336.9 232.2 219.6
Lindex 111.0 54.7
Hobby Hall 39.7 49.2 38.2 38.1
Seppälä 29.7 42.5 37.8 36.1
Shared 0.4 0.7 0.5 0.4
Group 413.4 483.9 308.6 294.2
Operating profit, EUR
millions
Department Store Division 1.5 46.9 25.7 11.5
Lindex -1.2 15.0
Hobby Hall -2.1 2.7 2.5 -0.9
Seppälä -0.6 8.6 5.5 5.8
Shared 0.2 -2.4 -1.1 -2.1
Eliminations -0.3 0.0 -0.5 -0.1
Group -2.5 70.8 32.1 14.1
Income statement
quarterly, Q1 Q4 Q3 Q2
Group, EUR millions 2007 2006 2006 2006
Continuing operations
Revenue 311.4 389.6 281.1 299.5
Other operating income 0.4 0.0 4.7
Materials and consumables -191.6 -215.6 -166.1 -170.8
Wages, salaries and -50.8 -57.9 -44.2 -48.9
employee benefits expenses
Depreciation -9.1 -7.9 -7.9 -8.1
Other operating expenses -51.7 -58.1 -43.0 -47.7
Operating profit (loss) 8.2 50.5 19.8 28.7
Finance income and expenses -0.2 -0.5 0.5 -0.9
Profit (loss) before tax 8.0 50.1 20.4 27.9
Income taxes -1.9 -12.3 -5.0 -6.6
Profit (loss) for the 6.1 37.8 15.4 21.2
period, continuing
operations
Discontinued operations
Profit (loss) for the 21.9
period, discontinued
operations
Profit (loss) for the 6.1 37.8 15.4 43.1
period
Earnings per share,
continuing operations, EUR
Basic 0.11 0.70 0.29 0.39
Diluted 0.11 0.69 0.28 0.39
Earnings per share,
discontinued operations,
EUR
Basic -0.01 0.41
Diluted -0.01 0.40
Earnings per share, total,
EUR
Basic 0.11 0.70 0.28 0.80
Diluted 0.11 0.68 0.28 0.79
Q1 Q4 Q3 Q2
Sales, EUR millions 2007 2006 2006 2006
Department Store Division 281.2 363.4 249.0 270.8
Lindex
Hobby Hall 55.6 55.5 45.5 46.2
Seppälä 34.6 45.3 40.2 40.2
Shared 0.2 0.2 0.2 0.3
Group 371.7 464.4 334.9 357.6
Revenue, EUR millions
Lindex 236.3 305.5 209.8 227.4
Department Store Division
Hobby Hall 46.2 46.1 37.8 38.4
Seppälä 28.7 37.5 33.2 33.3
Shared 0.1 0.5 0.2 0.4
Group 311.4 389.6 281.1 299.5
Operating profit, EUR
millions
Department Store Division 7.8 44.3 13.1 22.2
Lindex
Hobby Hall 1.5 3.4 2.1 0.6
Seppälä 0.8 7.3 5.4 7.6
Shared -1.8 -3.8 -0.9 -1.9
Eliminations 0.0 -0.6 0.1 0.2
Group 8.2 50.6 19.8 50.6
ASSETS
EUR mill. 31.3.2008 31.3.2007 31.12.2007
Acquisition cost Jan. 1 813.8 551.7 551.7
Translation difference +/- 0.7 0.0 0.0
Aquisitions through business 154.7
combinations (investment) (+)
Translation difference +/- -0.2
Increases Jan. 1-March. 31 35.4 33.5 125.9
Decreases Jan. 1-March. 31 -1.8 -0.4 -18.4
Acquisition cost March 31/Dec. 31 848.1 584.8 813.8
Accumulated depreciation Jan. 1 212.5 193.2 193.2
Depreciation on reductions -0.1 -17.6
Depreciation for the financial year 15.2 9.1 36.9
Accumulated depreciation 227.6 202.4 212.5
March 31/Dec. 31
Book value Jan. 1 601.3 358.5 358.5
Book value March 31/Dec. 31 620.5 382.4 601.3
Goodwill
EUR mill. 31.3.2008 31.3.2007 31.12.2007
Acquisition cost Jan. 1 720.0
Aquisitions through business 721.7
combinations (investment) (+)
Translation difference +/- 3.6 -1.7
Increases Jan.1-March 31 0.2
Acquisition cost March 31/Dec. 31 723.6 720.0
Book value Jan 1. 720.0
Book value March 31/Dec. 31 723.6 720.0
Total 1 344.1 382.4 1 321.3
STOCKMANN plc
Hannu Penttilä
CEO
DISTRIBUTION
OMX Nordic Exchange Helsinki
Principal media
A press and analyst conference will be held today, April 24, 2008, at
14.00 at the World Trade Center, Aleksanterinkatu 17, Helsinki.