Slide 1: Interim Report Q3 2017
INTERIM REPORT Q3 2017 Stockmann Group | 27 October 2017
Slide 2: Q3 2017 in brief
Q3 2017 IN BRIEF Group’s gross margin • Stockmann Group 56.2% – Continuously improved performance in Stockmann Retail and Real Estate – Impairment of EUR 150 million in Lindex goodwill – Investigation of the sale of Stockmann Delicatessen in Finland on-going in the (56.6) Competition and Consumer Au
Slide 3: Operating result during the strategy period
OPERATING RESULT DURING THE STRATEGY PERIOD Stockmann Group, rolling 12-month adjusted operating profit (EBIT) 40 30 20 10 0 -10 -20 1-12 4/2015- 7/2015- 10/2015- 1-12 4/2016- 7/2016- 10/2016- 2015 3/2016 6/2016 9/2016 2016 3/2017 6/2017 9/2017 STOCKMANN 27.10.2017 3
Slide 4: Stockmann Group, financial performance in Q3 2017
STOCKMANN GROUP, FINANCIAL PERFORMANCE* IN Q3 2017 • Revenue EUR 242.0 million (263.9) QUARTERLY REVENUE – Revenue on a par with the previous year in comparable businesses EUR mill. 400 • Gross margin 56.2% (56.6%) 300 – Up in Stockmann Retail due to the divestment of Hobby Hall and down in 200 Lind
Slide 5: Key figures
KEY FIGURES Q3/2017 Q3/2016 1-9/2017 1-9/2016 1–12/2016 Equity ratio % 41.9 45.4 48.3 Gearing % 95.0 80.8 68.3 Net financial items* EUR mill. -4.8 -5.0 -20.1** -14.0 -23.1 Result for the period* EUR mill. -158.0 -5.4 -186.0 -28.4 -7.5 Earnings per share* EUR -2.21 -0.09 -2.64 -0.45 -0.18 Net earning
Slide 6: Market environment and outlook for 2017
MARKET ENVIRONMENT AND OUTLOOK FOR 2017 • Market environment – In Finland, economy has begun to recover, but consumers’ purchasing power is not expected to increase and purchasing behaviour is changing – In Sweden, fashion market expected to decline in 2017 – In the Baltics, outlook better than for
Slide 7: Lindex
LINDEX STOCKMANN 27.10.2017 7
Slide 8: Lindex, highlights in Q3 2017
LINDEX, HIGHLIGHTS IN Q3 2017 • Total sales declined, though growth outside of the Nordic market • Short term actions initiated with focus to secure sales in Q4 • Efficiency analysis for improved profitability concluded • Successful launch of the Pants solution concept – easier than ever to find the
Slide 9: Lindex, financial performance in Q3 2017
LINDEX, FINANCIAL PERFORMANCE IN Q3 2017 • Revenue down 3.2% to EUR 151.1 million (156.1) QUARTERLY REVENUE – Comparable store sales -3.0% due to decrease in the Nordic countries and EUR mill. Estonia 200 • Gross margin 59.9% (63.7%) 150 – Higher markdowns than in the previous year 100 – Redefined t
Slide 10: International expansion
INTERNATIONAL EXPANSION • Store network on 30 September 2017 6 58 – 482 stores in 18 countries, 100 of which 45 franchising stores – 6 stores opened and 2 closed 210 10 in Q3 2017 9 – Two new franchising markets: 8 Tunisia and Qatar 3 2 – Launch of e-commerce in Iceland 27 10 7 5 • New stores & mark
Slide 11: Lindex profitability improvement programme
LINDEX PROFITABILITY IMPROVEMENT PROGRAMME INCREASING SALES IMPROVING PROFITABILITY • Improve collections • Increase gross profit – Adjust assortment strategy – Decrease clearance markdowns due to improvements – Shorten time from design to store in the offering – Secure the basic selection – Increas
Slide 12: Lindex way forward
LINDEX WAY FORWARD • Implementing the Profitability Improvement Program • Important Pink Ribbon Campaign for the fight against breast cancer – 15th year in a row • Launch of new Even Better Denim styles, more sustainable than ever • Securing the assortment and marketing to optimise Christmas sales •
Slide 13: Stockmann Retail
STOCKMANN RETAIL STOCKMANN 27.10.2017 13
Slide 14: Stockmann Retail, highlights in Q3 2017
STOCKMANN RETAIL, HIGHLIGHTS IN Q3 2017 • Revenue in comparable business up 4.6% – Revenue grew in all department stores – Strongest growth in Itis, Tallinn and Riga – Best performance in fashion merchandise area • Successful campaigns – Summer sale in July – Beauty Days and Back to Business in Augu
Slide 15: Stockmann Retail, financial performance in Q3 2017
STOCKMANN RETAIL, FINANCIAL PERFORMANCE* IN Q3 2017 • Revenue EUR 81.2 million (99.2) QUARTERLY REVENUE – Revenue in comparable businesses up 4.6% EUR mill. – Finland up 3.9% and Baltics up 6.9% 200 • Gross margin 44.2% (44.3 or 41.9 incl. Hobby Hall) 150 100 • Operating costs EUR 43.0 million (47.6
Slide 16: Increased fashion sales in Q3
INCREASED FASHION SALES IN Q3 STOCKMANN 27.10.2017 16
Slide 17: Crazy Days key facts
• Crazy Days key facts – Campaign held on 11-15 October 2017 in Finland, Estonia and Latvia – Eight department stores and the +25% 2 online store hullutpaivat.com Sales in the online store million • Campaign sales campaign products – Total sales: +2% – Finland: +1% 1.2 million in all markets – Talli
Slide 18: Real Estate
REAL ESTATE STOCKMANN 27.10.2017 18
Slide 19: Real Estate, highlights in Q3 2017
REAL ESTATE, HIGHLIGHTS IN Q3 2017 • Increased revenue and operating profit – Stable performance – Improvements particularly in Russia due to higher rental income from Nevsky Centre • Partners offer new experiences to customers in the stores – XS Toys to start as a new toy store tenant in Helsinki f
Slide 20: Real Estate, financial performance in Q3 2017
REAL ESTATE, FINANCIAL PERFORMANCE IN Q3 2017 • Occupancy rate of own properties 99.5% (98.9%) QUARTERLY REVENUE • Net operating income from own properties EUR 12.6 million (10.9) EUR mill. 20 – Average monthly rent EUR 36.6 per sqm (32.9) 15 – Net rental yield in January–September 5.4% (4.9%) 10 •
Slide 21: Real Estate, Stockmann-owned properties
REAL ESTATE, STOCKMANN-OWNED PROPERTIES Key figures Fair value of properties 30.9.2017 1.1.2017, EUR mill. Gross leasable area (GLA) 142 000 sqm, of which 42% in Finland Helsinki flagship building Book House, Helsinki 950.1 (1.1.2016: 918.2) Occupancy rate Occupancy rate 99.8 Occupancy rate 100.0 99
Slide 22: Thank you, Q&A
THANK YOU, Q&A STOCKMANN 27.10.2017 22