The year 2010 is productive for Marimekko
In 2010, the Marimekko Group's net sales increased slightly; operating profit improved significantly. Net sales rose by 1.1% to EUR 73.3 million (EUR 72.5 million). Operating profit grew by 29.9% to EUR 8.2 million (EUR 6.3 million). Operating profit for 2009 included a non-recurring expense of EUR 0.5 million related to personnel reductions.
Operating profit excluding non-recurring items stood at EUR 8.2 million (EUR 6.8 million). Profit after taxes for the financial year was EUR 6.1 million (EUR 4.7 million) and earnings per share were EUR 0.76 (EUR 0.59). The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.55 (EUR 0.45) per share be paid for 2010.
In 2011, Marimekko will continue its substantial investments in international growth. Net sales for 2011 are estimated to grow by roughly 5-10%, but operating profit is forecast to decline by some 40-60% compared with the previous year. The estimated decline in operating profit is due to the measures and considerable investments planned for 2011 in internationalisation, particularly in the United States, and in developing business operations and the distribution network.
With these measures and investments, of which many occur predominantly during this year, the structure of Marimekko's business is transformed and a more solid foundation for long term growth and improved profitability is laid. Moreover, increases in the costs of raw materials, higher overall cost levels, and fewer deliveries for promotions compared with the previous year are anticipated to have an adverse impact on earnings.
Mika Ihamuotila, President and CEO:
“The year 2010 was productive for Marimekko. Net sales grew slightly, by 1.1% to EUR 73.3 million. Profitability rose markedly: operating profit improved by 29.9% to EUR 8.2 million. The improvement in profitability was influenced by a distinct increase in average sales margin as well as growth in wholesale sales and royalty earnings. The rise in sales margin was partly due to the fact that we carried out considerably fewer price-led promotions in 2010 than in the previous year.
In the October-December period of 2010, net sales were up 6.5% on the same period in 2009, but operating profit fell from EUR 2.4 million to EUR 2.2 million. The difference relative to the comparison period is due partly to smaller deliveries for individual promotions. A drag was also exerted on the fourth quarter earnings by larger investments in growth, which had been started in the second quarter, and by higher marketing expenses for the period compared to the same period in 2009.
Marimekko has a long-term international growth strategy. Our internationalisation projects in 2010 were fulfilled according to plan. Four new shops opened outside Finland: a Marimekko shop-in-shop in the Crate and Barrel store in SoHo, New York City, a concept store in Seoul, and retail stores of our own in Berlin,Germany and Malmö, Sweden. Product development projects from previous years have also borne fruit, and new products, including ceramics and glassware, are very profitable.