Lindex Group Plc Class B · OMXHEX:LINDEX
Lindex Group Plc Class B — Stockmann Group — Investor Day (September 2011)
21 slides from Lindex Group Plc Class B's investor day presentation, Sep 7, 2011
Slide 1: The Stockmann Group's Strategy
The Stockmann Group’s Strategy Hannu Penttilä CEO
Slide 2: Background for the strategy 2012–2016: Earnings development weaker than expected after H1 2010
Background for the strategy 2012–2016: Earnings development weaker than expected after H1 2010 • First half of 2010 was a success for the Stockmann Group ‒ All divisions improved their relative gross margin and earnings. Positive development in the Department Store Division, all markets improved. A
Slide 3: Stockmann Group's operating profit 2010–2011
Stockmann Group’s operating profit 2010–2011 • First half of 2010: Operating profit up EUR 15.2 million • Second half of 2010: Operating profit down EUR 11.6 million • First half of 2011: Operating profit down EUR 26.0 million • Outlook: Operating profit for the second half of 2011, and especially i
Slide 4: Strategy 2012–2016: Heading for Profit
Strategy 2012–2016: Heading for Profit • The slow market development affects the strategy, but the core remains the same: profitable growth in present and new markets • Substantial investment program successfully completed • Utilizing the full potential of existing assets after the historical invest
Slide 5: Historical investment program successfully completed
Historical investment program succesfully completed • Lindex acquisition in 2007 ‒ Public tender offer in October 2007 for AB Lindex (publ) shareholders ‒ Lindex consolidated to the financial statements of the Stockmann Group as of 5 December 2007 ‒ Operates as an own division in the Stockmann Group
Slide 6: Enlargement and renovation of the Helsinki flagship department store in 2006–2010
Enlargement and renovation of the Helsinki flagship department store in 2006–2010 • 10,000 sqm new commercial premises ‒ Stockmann Delicatessen 4,500 sqm on one level ‒ New restaurant area on the 8th floor ‒ Commercial area now 50,000 sqm in total • New underground customer car park and goods handli
Slide 7: Building Nevsky Centre and the St Petersburg department store in 2006–2010
Building Nevsky Centre and the St Petersburg department store in 2006–2010 • 50,000 sqm store and office space • Property fully owned by Stockmann ‒ Commercial plot acquired in 2006 • Largest Stockmann department store in Russia • Lindex, Seppälä, and Bestseller (Vero Moda, Jack & Jones) stores • Ov
Slide 8: Financing the capital expenditure
Financing the capital expenditure 2006 2007 2008 2009 2010 2011 Helsinki department store enlargement, capex EUR 200 million Nevsky Centre in St Petersburg, capex EUR 185 million Lindex acquisition Capital releasing program EUR 850 million EUR 84 million Loyal During 2009 Customer Acquisition debt s
Slide 9: Key elements of financing today
Key elements of financing today • Bilateral long-term bank loans and committed overdrafts EUR 800 million ‒ No collateral ‒ One covenant related to the Group’s equity ratio ‒ EUR 50 million until 2013 ‒ EUR 700 million until 2015 ‒ EUR 50 million until 2016 • Pension loan with a fixed interest rate
Slide 10: Future investments
Future investments • After a major investment program the Stockmann Group’s capital expenditure will decrease in the coming years • Capital expenditure will be clearly below depreciation ‒ Taking place already in 2011: estimated capital expenditure approx. EUR 70 million ‒ In 2012–2014 capital expen
Slide 11: Long-term financial targets remain unchanged
Long-term financial targets remain unchanged • Targets were set in 2008 • Timetable for achieving the targets was shifted in 2010 by two years to 2015 • No changes during the 2011 strategy process but understanding the big challenges, if the present market development continues • Targets to be achie
Slide 12: Dividend distribution
Dividend distribution Dividend policy Minimum half of the earnings from the company's ordinary operations; financing required to grow operations taken into account Earnings per share and dividend per share 2006–2010 Earnings per share Dividend per share Dividend per earnings 67.4% 86.5% 94.7% 88.0%
Slide 13: Stockmann today
Stockmann today STOCKMANN
Slide 14: Revenue and operating profit in 2010
Revenue and operating profit in 2010 Revenue EUR 1 821.9 mil. Operating profit EUR 88.8 mil. (EUR 1 698.5 mil.), +7.3% (EUR 85.1 mil.), +4.4% Seppälä Department Seppälä Department EUR 143.2 mil. Store Division EUR 9.0 mill. Store Division EUR 1 099.9 mil. EUR 32.9 mil. 8% 9% 34% 60% 32% 57% Lindex E
Slide 15: Over 700 stores in 14 countries
Over 700 stores in 14 countries FINLAND LATVIA SLOVAKIA • 7 department stores • 1 department store • 4 Lindex stores • 7 Academic Bookstores • 7 Lindex stores • Hobby Hall mail order sales, • 11 Seppälä stores POLAND online store and 1 store • 3 Lindex stores FINLAND • 14 Stockmann Beauty stores LIT
Slide 16: First stores in Russia were opened in 1989
First stores in Russia were opened in 1989 Stockmann opened two stores in Moscow Opening of Stockmann grocery store in in 1989, GUM and Zazepsky Val (picture). St Petersburg in 1993. CMD 7.9.2011 16
Slide 17: Today 7 department stores and 83 stores in Russia – 16% of the total revenue
Today 7 department stores and 83 stores in Russia – 16% of the total revenue Revenue by market in Q2 2011 CMD 7.9.2011 17
Slide 18: Development of the operating profit in Russia
Development of the operating profit in Russia EUR mill. Selling Zara Third Mega 25 franchise department store in First depart- Two Mega 20 operations in Moscow ment store, department stores in Russia Smolenskaya, Moscow. Closing down 15 in Russia in First Seppälä store Smolenskaya 10 1998 in Russia.
Slide 19: Outlook for operations in Russia
Outlook for operations in Russia • Full-year 2011 will continue to be loss-making in Russia due to the weak first quarter of 2011 • The last quarter of 2011 will be clearly positive ‒ Positive development expected in all Russian department stores ‒ Nevsky Centre rental income • In 2012 the full-year
Slide 20: Preliminary revenue in August 2011
Preliminary revenue in August 2011 (Exclusive of VAT) Change Change 8/2011, 1–8/2011, % % Department Store Division, Finland 4.4 5.3 Department Store Division, international operations 33.5 42.1 Department Store Division, total 11.4 14.2 Lindex, Finland 7.5 2.9 Lindex, international operations 11.4
Slide 21: Key short term objectives
Key short term objectives • Focus on Q4/2011, which will be decisive for the full year operating profit • Good commercial campaigns and competitive collections in all divisions • No more capacity issues, autumn deliveries have arrived in time • Big investments (Helsinki, St Petersburg etc.) are read