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”Stockmann’s turnaround back to profit has begun”

The changes at Stockmann is coming to life, but the first quarter reports declining revenues and close to 50 million EUR loss.

”Stockmann’s turnaround back to profit has begun and several strategic steps have already been taken,” says CEO Per Thelin.

Stockmann’s consolidated revenue was 380.4 million EUR (395.6 million), down 3.8 percent, or up 3.6 percent at comparable exchange rates.

Operating result was -49.9 million EUR ( -43.9 million).

As an important part of the turnaround, Stockmann launched an efficiency programme in February 2015 with an annual cost savings target of 50 million EUR. 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.

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.

”Four department stores, one in Oulu and three in Moscow, will be closed down. All 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.” says CEO Per Thelin.

”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,” says CEO Per Thelin.

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.”

Per Thelin also says Stockmann is now focusing on 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.

As of 1 January 2015 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.

Key figures

1-3/2015 1-3/2014 1-12/2014
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
-4.7 2.8 -4.9
Personnel, average 14 026 14 302 14 533


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