Stockmann Group’s Interim Management Statement, 1 January – 30 September 2023
Continued strong performance for Lindex; Stockmann Group’s third quarter adjusted operating result decreased slightly
STOCKMANN plc, Interim report, 27.10.2023 at 8:00 EET
Stockmann Group’s Interim Management Statement, 1 January – 30 September 2023
Continued strong performance for Lindex; Stockmann Group’s third quarter adjusted operating result decreased slightly
July–September 2023:
- The Stockmann Group’s revenue was EUR 226.9 (244.0) million. The revenue decreased by 7.0%, and in local currencies the decrease was 1.7%.
- The Lindex division’s revenue decreased to EUR 162.3 (166.9) million, but grew in local currencies by 4.9%.
- The Stockmann division’s revenue decreased to EUR 64.7 (77.1) million, mainly due to the timing of the Crazy Days campaign. This Autumn, the Crazy Days was held in October at the beginning of the fourth quarter while in the comparison period, the campaign started in September. - The Group’s gross margin improved to 58.5% (56.8).
- The Group’s adjusted operating result decreased to EUR 20.6 (22.0) million, but improved slightly in local currencies.
- The Lindex division’s adjusted operating result strengthened to EUR 26.2 (22.5) million and improved significantly in local currencies.
- The Stockmann division’s adjusted operating result declined to EUR -4.8 (0.2) million, mainly due to the timing of the Crazy Days campaign. - Operating result was EUR 20.3 (6.0) million. In the comparison period, the operating result was impacted by the EUR 15.9 million provision related to the LähiTapiola Keskustakiinteistöt Ky arbitration decision.
- Net result amounted to EUR 8.7 (0.6) million.
- Earnings per share were EUR 0.05 (0.00).
January–September 2023:
- The Stockmann Group’s revenue was EUR 677.4 (709.1) million. The revenue decreased by 4.5%, but increased by 0.7% in local currencies.
- The Lindex division’s revenue decreased to EUR 464.9 (488.9) million, but grew in local currencies by 2.6 %.
- The Stockmann division’s revenue decreased by 3.5% to EUR 212.4 (220.2) million, due to the timing of the Crazy Days campaign. - Gross margin was on the comparison period’s level at 58.5% (58.1).
- Adjusted operating result was EUR 49.8 (53.7) million, but improved in local currencies.
- For the Lindex division, the adjusted operating result strengthened to EUR 68.0 (67.0) million and improved significantly in local currencies.
- For the Stockmann division, the adjusted operating result was EUR -15.3 (-8.7) million.
- Operating result was EUR 47.6 (130.3) million, where the comparison period was impacted by the capital gain of EUR 95.4 million from selling the real estates in Helsinki city centre and in Riga.
- Net result for the period amounted to EUR 42.0 (84.1) million.
- Earnings per share were EUR 0.27 (0.54). The comparison figure was impacted by the capital gain of EUR 95.4 from selling the real estate in Helsinki city centre and in Riga.
Guidance for 2023 (unchanged):
In 2023, Stockmann expects the Group’s revenue to be in the range of EUR 940–1 000 million and the Group’s adjusted operating result to be EUR 65–85 million, subject to foreign exchange rate fluctuation. The guidance is based on the assumption that the continuing high inflation will increase costs from 2022 and have an adverse impact on consumer demand. At the same time, the Stockmann Group continues taking firm measures to minimise the impacts of cost increases.
Market outlook for 2023:
The current challenging geopolitical situation and the high inflation level are expected to continue. However, inflation is predicted to slow down compared to the latter part of the year 2022. The inflation, together with high interest rates, is forecast to have a negative impact on consumer confidence and purchasing power. The retail market is expected to remain challenging due to lower consumer demand and increased purchasing prices and operating costs. The risk of potential disruptions in the supply chains and international logistics cannot be excluded, either.
CEO Susanne Ehnbåge:
The Stockmann Group’s priorities are to improve profitability to create a solid and sustainable foundation for the future as well as to accelerate the growth of Lindex. In the third quarter, the Group’s adjusted operating result improved slightly in local currencies, but in EUR it was below the comparison period.
The Stockmann Group’s underlying business is developing in the right direction. The Group’s financial situation has improved during the latest months, both regarding financing and equity, and we will continue the work to create longlasting shareholder value and better profitability for both divisions. Lindex has improved its profitability significantly in the past years and will continue to grow by entering new markets and sales channels, whereas the Stockmann division will continue its repositioning towards luxury and affordable luxury. Both divisions are making considerable investments in improving their overall digitalisation to meet customer expectations and improve process and cost efficiency. The ongoing construction of the Lindex division’s new EUR 110 million omnichannel distribution centre is proceeding well, and it is planned to be taken into operation in Autumn 2024.
In the third quarter, the Stockmann Group’s revenue decreased due to currency impacts and the timing of the Stockmann division’s Crazy Days campaign. In local currencies, the Lindex division’s revenue continued to increase despite challenging market conditions and weakened consumer confidence. The growth was supported by meeting the customer needs with inspiring collections and value for money as well as expanded distribution thanks to new partners on new markets. The key reason for the Stockmann division's revenue decrease was the timing of the Crazy Days, which was held in October at the beginning of the fourth quarter. In addition, the reduced size of the Itis department store had a negative impact on the revenue. The Stockmann division proceeded with the work within its strategic focus areas, such as customer loyalty and omnichannel approach. After the review period, the Stockmann division’s Crazy Days campaign was held. The campaign performed well both in the department stores and digital.
On 25 September, we announced that Stockmann was commencing a strategic assessment to crystallise shareholder value by refocusing the Group's business on Lindex. As part of the strategic assessment, Stockmann plc is considering a name change to Lindex Group and will investigate strategic alternatives for the Stockmann department stores business. We expect the strategic assessment to be finalised during 2024. The Stockmann Group also aims to end the restructuring programme as soon as possible.
For the Stockmann Group, one of the key sustainability priorities is respecting the planet and environment. During the third quarter, we prepared our climate targets in line with our commitment to the Science Based Targets initiative (SBTi). We expect to have validated science-based climate targets during 2024.
I would like to thank all the fantastic team members at Lindex and Stockmann for their dedicated work towards our goals. I would also like to thank our loyal customers, partners and other stakeholders who are supporting our journey. I would like to warmly welcome investors, analysts and media representatives to Stockmann’s Capital Markets Day on 16 November 2023. We look forward to continuing our good dialogue.
KEY FIGURES
|
|
7–9/ |
7–9/ |
1–9/ |
1–9/ |
1–12/ |
|
Revenue, EUR mill. |
226.9 |
244.0 |
677.4 |
709.1 |
981.7 |
|
Gross profit, EUR mill. |
132.9 |
138.7 |
396.4 |
411.8 |
568.3 |
|
Gross margin, % |
58.5 |
56.8 |
58.5 |
58.1 |
57.9 |
|
Operating result (EBIT), EUR mill. |
20.3 |
6.0 |
47.6 |
130.3 |
154.9 |
|
Adjusted operating result (EBIT), EUR mill. |
20.6 |
22.0 |
49.8 |
53.7 |
79.8 |
|
Net result for the period, EUR mill. |
8.7 |
0.6 |
42.0 |
84.1 |
101.6 |
|
Adjusted earnings per share, EUR *) |
0.06 |
0.09 |
0.09 |
0.12 |
0.24 |
|
Earnings per share, EUR **) |
0.05 |
0.00 |
0.27 |
0.54 |
0.65 |
|
Cash flow total, EUR mill. |
-24.7 |
-44.4 |
-59.8 |
-73.5 |
-45.8 |
|
Capital expenditure, EUR mill. |
24.0 |
30.2 |
53.6 |
41.9 |
62.5 |
|
Equity per share, EUR |
|
|
2.30 |
2.10 |
2.15 |
|
Equity ratio, % |
|
|
29.1 |
25.7 |
26.2 |
|
Equity ratio excl. IFRS 16, % |
|
|
58.8 |
53.0 |
53.4 |
*) Adjusted earnings per share is calculated based on adjusted net result, in which the tax impact of adjustments in the operating result is included. The tax impact is calculated on transaction level and it has been revised to also include changes in deferred taxes. Comparison figures have been restated.
**) The key figure is impacted by a positive tax decision of EUR 28.9 million for Stockmann Sverige AB during the first quarter of 2023. The comparison figures were impacted by the capital gain from selling the real estate in Helsinki during the second quarter of 2022 (after tax impact EUR 66.2 mill.) and the capital gain from selling the real estate in Riga during the first quarter of 2022 (after tax impact EUR 14.1 million).
STRATEGIC ASSESSMENT
On 25 September 2023, Stockmann plc’s Board of Directors decided to initiate a strategic assessment to crystallise shareholder value by refocusing the Group's business on Lindex. As part of the strategic assessment, Stockmann plc is considering a name change to Lindex Group and will investigate strategic alternatives for the Stockmann department stores business.
The possible name change would better reflect Lindex division’s role in the Group’s business. In 2022, with a revenue of EUR 661 million, Lindex represented over two thirds of Stockmann Group’s revenues and, with an operating profit of EUR 90 million, Lindex was the main profit contributor within the Stockmann Group. This possible name change would not impact the Stockmann department stores, which would continue to operate under the Stockmann brand.
As part of the investigation of strategic alternatives for Stockmann’s department stores business, the company will evaluate the best environment for developing the business in the future. These options will include increasing the business’ independence within the Group, considering possible ownership changes or strategic partnerships, or continuing under the current structure. The strategic assessment will not have any immediate impact on the Stockmann department stores’ brand or its daily business operations, which will continue with full commitment in their ordinary course.
Decisions relating to a possible proposal on a name change, which would ultimately be subject to a decision by Stockmann plc's general meeting, will be made at a later date. Stockmann expects the strategic assessment to be finalised during 2024. Stockmann will provide an update on the strategic assessment if, and when, appropriate.
CAPITAL MARKETS DAY 2023
Stockmann Group invites investors, analysts and media representatives to its Capital Markets Day (CMD). The event will be held as a hybrid event in English on Thursday 16 November 2023 at 13:00−16:30 EET at Allas Sea Pool at Katajanokanlaituri 2 A in Helsinki, Finland. A live webcast of the event can be followed via this link: https://stockmann.videosync.fi/cmd-2023.
Susanne Ehnbåge, CEO of the Stockmann Group, and other members of Stockmann’s management will host the event. During the event, Stockmann’s management will focus on the company's strategy, business operations, and other topical themes.
We ask everyone attending the event at Allas Sea Pool to sign up by 9 November 2023 by contacting [email protected].
The full agenda as well as the webcast details will be available closer to the event date on the company’s website www.stockmanngroup.com. Recordings and presentation materials will be available on Stockmann’s website after the event.
Interim Management Statement
This company announcement is a summary of the Stockmann's Interim Management Statement for 1 January – 30 September 2023 and includes the most relevant information of the report. The complete report is attached to this release as a pdf file and is also available on the company's website at stockmanngroup.com.
Webcast for analysts and the media
A press and analyst briefing will be held in English as a live webcast today, on 27 October 2023 at 10:00 a.m. The event can be followed via this link. The recording and presentation material will be available on the company's website after the event.
Further information:
Susanne Ehnbåge, CEO
Annelie Forsberg, CFO
Contact via Stockmann Group’s media desk [email protected], tel. +358 50 389 0011
Marja-Leena Dahlskog, Head of Communications & IR, tel. + 358 50 502 0060
[email protected]
STOCKMANN plc
Susanne Ehnbåge
CEO
Distribution:
Nasdaq Helsinki
Principal media