Stockmann posts reasonable results in difficult market conditions

16 Mar '09

5 min read

Stockmann's sales in the fourth quarter were up 13 per cent to EUR 652.8 million (EUR 578.8 million in 2007). Fourth-quarter operating profit fell to EUR 58.4 million (EUR 70.8 million). Full-year sales grew by 36 per cent, totalling EUR 2 265.8 million (EUR 1 668.3 million). Consolidated operating profit declined during the financial year to EUR 121.9 million (EUR 125.2 million).

Net financing expensesgrew as planned as a result of the Lindex acquisition, and with the weakening of the Swedish krona a deferred tax liability of EUR 27.2 million, which nevertheless has no effect on cash flow, was recognized on the basis of the unrealized exchange gain on the foreign currency loan. For these reasons, net profit for the financial year declined from the previous year, amounting to EUR 39.1 million. Earnings per share were EUR 0.67 (EUR 1.59).

Without the increase in deferred tax liability due to the weakening of the Swedish krona, the earnings per share would have been EUR 1.13. The Board of Directors will propose the payment of a dividend of EUR 0.62 per share. The Board also proposes that it be authorised to decide at its discretion, by 31 December 2009, on the payment of a dividend of no more than EUR 0.38 per share, the company's financial standing permitting, in addition to the above-mentioned dividend decided by the Annual General Meeting.

The Stockmann Group's sales in 2008 grew by 36 per cent, totalling EUR 2 265.8 million (EUR 1 668.3 million). The strong growth came as a result of Lindex joining the Group in December 2007. Seppälä's sales were up, the Department Store Division's sales were on a par with the previous year's level, and Hobby Hall's sales were down on the 2007 figure.

Sales in Finland were up 5 per cent to EUR 1 224.8 million. Consolidated sales abroad totalled EUR 1 041.0 million, a growth of 110 per cent. Without Lindex, the corresponding figure would have been 2 per cent. Growth in sales abroad was adversely affected by the closure of the department store in the Smolensky Passage shopping centre in Moscow in May due to the unlawful activities of its lessors, as well as the weakening of the Swedish krona, Norwegian krone and Russian rouble against the euro. International operations accounted for an increased share of consolidated sales, rising from 30 per cent to 46 per cent.

Other operating income on the sale of an unbuilt plot and certain equities totalled EUR 4.2 million (EUR 9.7 million the previous year).

The Group's operating gross margin increased by EUR 300.1 million to EUR 907.0 million, and its relative gross margin was 48.3 per cent (43.4 per cent). The improvement in the Group's relative gross margin was mainly due to the inclusion of Lindex in the consolidated figures. Lindex's relative gross margin was at an all-time high. Hobby Hall's relative gross margin improved, Seppälä's relative gross margin was at the previous year's level and the Department Store Division's relative gross margin decreased slightly. Operating costs increased by EUR 273.2 million and depreciation by EUR 24.5 million.

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