Slide 1: Interim Report Q2 2015
STOCKMANN Interim Report Q2 2015 12 August 2015
Slide 2: New operating structure as of 1 January 2015
New operating structure as of 1 January 2015: Stockmann Retail, Real Estate, Fashion Chains STOCKMANN GROUP GROUP’S SHARED FUNCTIONS STOCKMANN RETAIL REAL ESTATE FASHION CHAINS 16 department stores Properties in in 4 countries, Helsinki, Tallinn, Stockmann.com store Riga and St Petersburg Includes H
Slide 3: Stockmann Group's strategic path: Focusing on the key businesses
Stockmann Group’s strategic path: Focusing on the key businesses Stockmann Retail and Real Estate: Developing strong partnership Lindex independently Withdrawing from non-core businesses Strategic direction Efficiency programme chosen, New markets, new corporate exit from Russia structure Focus on f
Slide 4: Enhanced customer focus, rationalised scope of operations
Enhanced customer focus, rationalised scope of operations Efficiency programme Improving performance ▪ Annual cost savings of EUR 50 ▪ Enhanced shopping experience million targeted by end of 2016 ▪ Focus on fashion, food, ▪ Releasing store space from cosmetics and home Stockmann Retail and bringing
Slide 5: Stockmann's Q2 2015 in brief
Stockmann’s Q2 2015 in brief New strategy well under way Revenue improved towards the end of the quarter Group’s operating profit excluding non-recurring items up Gross margin improved with growth in Stockmann Retail Operating costs declined due to Seppälä’s divestment and cost savings measures in a
Slide 6: Academic Bookstore business to be sold to Bonnier Books
Academic Bookstore business to be sold to the Swedish media company Bonnier Books A letter of intent regarding the sale signed; transaction estimated to take place by 1 October Transaction includes 6 bookstores (Helsinki, Tapiola, Turku, Tampere, Itis and Jumbo), online store, direct support functio
Slide 7: Hamleys to open in the Helsinki flagship department store
World famous toy shop Hamleys to open in the Helsinki flagship department store Letter of intent signed in July The first shop in Finland to be opened in November 2015 ‒ 6th floor in the Helsinki flagship department store Cooperation planned in other department stores in Finland from 2016 onwards Ha
Slide 8: Sales in July 2015: Group-level growth for the first time since May 2013
Sales in July 2015: Group-level growth for the first time since May 2013 Preliminary sales development, exclusive VAT Change,% Stockmann Retail Department stores, excluding electronics, EUR +2.1 Retail, total, EUR -3.0 Retail, total, comparable currencies +3.8 Lindex, total, EUR +6.0 Lindex, total,
Slide 9: Stockmann Group
Stockmann Group
Slide 10: Retail market in brief
Retail market in brief Finland ROUBLE/EURO ‒ Retail market remained weak Exchange rate Jan 2014 – Aug 2015 ‒ Fashion market down 9.4% (TMA) during January-June Baltic countries ‒ Market environment remained relatively stable ‒ Increased competition in Estonia and Latvia Sweden RUB average rate Q2 20
Slide 11: Revenue in Q2 2015
Revenue* in Q2 2015 Revenue down 14.0%, to EUR QUARTERLY REVENUE 405.8 million (EUR 471.4 million) EUR mill. ‒ Revenue down 10.9% at comparable 700 exchange rates 600 -14.0% ‒ Russian rouble continuously weak -3.8% -10.9%* 500 +3.1%* Revenue in Finland down 22.6% 400 ‒ Timing of Crazy Days 300 ‒ Wit
Slide 12: Operating result in Q2 2015
Operating result in Q2 2015 Gross margin 51.2% (48.1%) QUARTERLY OPERATING RESULT ‒ Growth in Stockmann Retail Excluding non-recurring items Operating costs EUR 190.9 million EUR mill. (EUR 216.7 million) incl. NRI 50 40 ‒ Down 7.4% excluding non-recurring 30 items, due to decreased personnel costs
Slide 13: Key figures
Key figures As of 1 January 2015, real estate properties have been measured at fair values, which impacts several key figures. The revaluation is not applied retrospectively for 2014. 1–6/2015 1–6/2014 1-12/2014 Equity ratio % 44.6 41.1 39.3 Gearing % 85.3 104.3 105.4 Net financial costs EUR mill. 1
Slide 14: Outlook for 2015 remains unchanged
Outlook for 2015 remains unchanged Outlook for retail market in Russia remains very uncertain: all-time-low rouble, weak economy and purchasing power, which will also decrease the number of Russian shoppers in Finland and in the Baltic countries No growth is expected in the retail market in Finland
Slide 15: Stockmann Retail
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Slide 16: Stockmann Retail in Q2 2015
Stockmann Retail in Q2 2015 Strategic actions to improve customer service, product selection and customer loyalty are continuing ‒ More events and inspiration ‒ New brands and pop-up stores ‒ Digital dressing room helpers ‒ New concepts in Delicatessen All stores improved their revenue towards the e
Slide 17: Revenue in Q2 2015
Revenue in Q2 2015 Revenue down 21.9%, to EUR 224.0 QUARTERLY REVENUE million (EUR 287.0 million) ‒ Revenue at comparable exchange EUR mill. rates down 19.2% 350 -21.9% Revenue in Finland down 25.1% 300 -19.2%* -1.1% ‒ Timing of the Crazy Days campaign 250 +6.9%* ‒ Withdrawal from own electronics sa
Slide 18: Operating result in Q2 2015
Operating result in Q2 2015 Gross margin 40.5% (36.7%) QUARTERLY OPERATING RESULT ‒ Timing of the Crazy Days campaign Excluding non-recurring items ‒ Fewer price-driven sales campaigns EUR mill. ‒ Reduced food waste due to the 0 efficiency programme 1-3 4-6 7-9 10-12 -5 ‒ Currency adjustments in Rus
Slide 19: Outlook for the rest of 2015
Outlook for the rest of 2015 Revenue for 2015 will be down on 2014 mainly due to the weak Russian rouble and withdrawing from electronics and books ‒ Electronics and books account for approx. 10% of Retail’s total sales Continued focus on key product categories: fashion, cosmetics, home and food Act
Slide 20: Real Estate
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Slide 21: Real Estate in Q2 2015
Real Estate in Q2 2015 Five properties in four countries, with a gross leasable area of 144 000 sqm ‒ Fair value of properties EUR 895.1 million at the end of the quarter New tenant Expert opened its electronics stores in Stockmann’s premises ‒ Helsinki on 15 May ‒ Turku on 23 June ‒ Tampere will fo
Slide 22: Revenue in Q2 2015
Revenue in Q2 2015 Revenue EUR 15.2 million QUARTERLY REVENUE (EUR 15.2 million) EUR mill. Net operating income* from own 20 properties EUR 12.7 million (EUR +0.2% 11.8 million) 15 -2.1% Net rental yield 5.4 per cent Average rent EUR 33.84 per sqm 10 Occupancy rate 99.2 per cent at the 5 end of quar
Slide 23: Operating profit in Q2 2015
Operating profit in Q2 2015 Operating profit EUR 5.5 million QUARTERLY OPERATING RESULT (EUR 4.4 million) EUR mill. ‒ Operating costs down, 6 depreciation up Capital expenditure EUR 0.9 5 million (EUR 0.8 million) 4 ‒ Property maintenance and refurbishments for new tenants 3 2 1 0 1-3 4-6 7-9 10-12
Slide 24: Outlook for the rest of 2015
Outlook for the rest of 2015 Implementing the strategy by bringing new tenants to the department stores in all markets ‒ Hamleys, flagship store for Halti and Espresso House in Helsinki city centre department store ‒ Bonnier/Academic Bookstore in 6 stores in Finland, including the Book Building in H
Slide 25: Fashion Chains
Fashion Chains
Slide 26: Lindex in Q2 2015
Lindex in Q2 2015 Sales close to the 2014 level ‒ Weak sales in May ‒ Positive development (+6.6% at comparable currencies) in June Successful launch of the own cosmetics label Lindex Beauty Bra-volution Forever campaign with Lindex employees Operations in Russia closing down according to plan Impro
Slide 27: Lindex sales development 2014–2015
Lindex sales development 2014–2015 Change-% 10 +6% 5 0 1/2014 1/2015 7/2015 -5 -10 -15 * Monthly change-% of euro-denominated sales 12.8.2015 27
Slide 28: Revenue in Q2 2015
Revenue in Q2 2015 Revenue down 1.9%, to EUR 174.6 QUARTERLY REVENUE million (EUR 178.0 million) EUR mill. ‒ Decline due to the weak 200 -1.9% +0.2%* Swedish krona vs. euro -4.3% Revenue at comparable exchange 150 +2.4%* rates down 0.2% ‒ Growth in the Baltic countries and 100 eastern Central Europe
Slide 29: Operating profit in Q2 2015
Operating profit in Q2 2015 Gross margin 62.9% (63.0%) QUARTERLY OPERATING RESULT Operating costs on a par with Q2 2014 in Swedish krona but euro- EUR mill. denominated costs down 25 20 Operating profit EUR 18.6 million (EUR 18.7 million) 15 ‒ Good cost control compensated 10 the decline in revenue
Slide 30: International expansion
International expansion Lindex opened 2 stores and closed 4 stores during the second quarter Store network on 30 June 2015 ‒ 492 stores in 18 countries, of which 37 franchising stores Lindex continues to open new stores in 2015, including franchising stores In Russia, all stores will be closed down
Slide 31: Outlook for the rest of 2015
Outlook for the rest of 2015 Increased focus on customers, sales and commercial offering Strong autumn campaigns ‒ Focus on product & price ‒ Continued support for Pink Ribbon Launch of a sustainable denim collection Second store opening in London Westfield in UK New franchising market: Albania Proc