Lindex Group Plc Class B · OMXHEX:LINDEX
Lindex Group Plc Class B — Stockmann — Investor Day (September 2011)
50 slides from Lindex Group Plc Class B's investor day presentation, Sep 7, 2011
Slide 1: Multi-market, multi-channel Department Store Division
Multi-market, multi-channel Department Store Division Maisa Romanainen Executive Vice President, Director of Department Store Division
Slide 2: Department Store Division in brief
Department Store Division in brief Share of Stockmann’s revenue in 2010 EUR 1 099.9 million, 60% Share of Stockmann’s operating profit in 2010 EUR 32.9 million, 34% CMD 7.9.2011 2
Slide 3: Development of Department Store Division's revenue
Development of Department Store Division’s revenue EUR mill. 1200 +8% +9% ±0% 1000 +9% -12% 800 600 400 200 0 2006 2007 2008 2009 2010 CMD 7.9.2011 3
Slide 4: Development of relative gross margin
Development of relative gross margin CMD 7.9.2011 4
Slide 5: Development of operating profit
Development of operating profit EUR mill. % 100 15 80 12 60 9 40 6 20 3 0 0 2006 2007 2008 2009 2010 Operating profit Other operating income CMD 7.9.2011 % of revenue 5
Slide 6: A company with great history
A company with great history 1862 1880 1930 Stockmann was founded First Department Store The new Helsinki downtown department store was opened 1996 1998 2003 Stockmann’s opened its Stockmann’s first Stockmann opened a first department store department store in Russia department store in Riga, 1989 a
Slide 7: Many brands – many channels
Many brands – many channels FINLAND • 7 department stores • 7 Academic Bookstores • Hobby Hall mail order sales, online store and 1 store • 14 Stockmann Beauty stores • 4 Zara stores • 1 Outlet ESTONIA • 1 department store • 1 Outlet LATVIA • 1 department store RUSSIA • 7 department stores • 1 shopp
Slide 8: Market coverage
Revenue by market in 2010 Market coverage Finland St Petersburg Estonia Latvia Moscow Ekaterinburg CMD 7.9.2011 8
Slide 9: Business concept – More than I expected
Business concept – More than I expected Department store chain operating in Finland, Russia, and the Baltics, including distance retailing in Finland. Stockmann department stores offer one stop shopping experience with excellent quality and competitive prices for a wide customer group. Product selec
Slide 10: Among leading European department stores chains
Among leading European department stores chains CMD 7.9.2011 10
Slide 11: The Stockmann brand
The Stockmann brand More than I expected Wide and unique assortment of high quality Excellent and professional customer service Competitive price-quality ratio Inspiring shopping milieu Modern and international atmosphere CMD 7.9.2011 11
Slide 12: Wide and unique assortment
@ g Wide and unique assortment
Slide 13: Wide and unique assortment
Wide and unique assortment Over 1.5 million SKU’s – thousands of brands Fashion & Cosmetics 51% * Books sold only in Finland CMD 7.9.2011 13
Slide 14: Stockmann brands
Stockmann brands • Designed and sourced by Stockmann • Major part of sales in medium/lower medium price category in Fashion and Home • Mainly produced in tight co-operation with Stockmann’s own buying offices CMD 7.9.2011 14
Slide 15: Efficient buyer-planner chain organisation
Efficient buyer-planner chain organisation Tiina Railio Merchandise Director Pirjo Pyykkö-Tuominen Merchandise Director, Food Minna Pirttiaho-Timonen Satu Nylén Kirsti Manninen Pia Almi Merchandise Area Director Merchandise Area Director Merchandise Area Director Merchandise Planning Fashion Home Ow
Slide 16: Competitive price / quality ratio
Competitive price / quality ratio Price/quality ratio of all items in each price category must be competitive and reliable in all markets we operate. CMD 7.9.2011 16
Slide 17: Excellent and professional customer service
Excellent and professional customer service Customer Service Quality in Finland, Baltics and Russia 2008–2010 100 % 85 % 79 % 75 % 72 % 70 % FinBaRu 55 % 40 % 25 % 2008 2009 2010 • Over 40 million customers in 2010 with an average purchase of ~ €23 • ~7 000 sales persons CMD 7.9.2011 17
Slide 18: Over 2 million loyal customers
Over 2 million loyal customers • ~70% of revenue from loyal customers • Co-branded program; in Russia with Citibank, in Finland and Baltics with Nordea Loyal Customers in 2010 53% 47% Finland Abroad CMD 7.9.2011 18
Slide 19: Monthly loyal customer marketing
Monthly loyal customer marketing
Slide 20: Inspiring shopping milieu
Inspiring shopping milieu LARGE UNITS • Flagship 50 000 m2+ Helsinki • Category A 15 000 m2+ St Petersburg • Category B 10 000 m2+ Tapiola, Tampere, Turku, Jumbo, Itäkeskus, Tallinn, Riga, Mega South, Mega East, Mega North, Rostokino • Category C 8 000 m2+ Metropolis, Ekaterinburg TOTAL SALES AREA ~
Slide 21: Helsinki Flagship Store
Helsinki Flagship Store • Opened originally in 1930 • Largest department store in the Nordic Countries • Among the five largest department stores in Europe • Approx. 50 000 m2 of retail space, of which ~7 000 m2 rented out • 12 million customers annually • Delicatessen totalling 500 m2 on one floor
Slide 22: Helsinki Flagship Store
Helsinki Flagship Store CMD 7.9.2011 22
Slide 23: Academic Bookstore in Helsinki
Academic Bookstore in Helsinki CMD 7.9.2011 23
Slide 24: Inspiring shopping milieu – Helsinki
Inspiring shopping milieu – Helsinki
Slide 25: Nevsky Centre and St Petersburg department store in brief
Inspiring shopping milieu Nevsky Centre and St Petersburg department store in brief • Opened in November 2010 • Property fully owned by Stockmann; commercial plot acquired in 2006 • Total investment approx. €185 million • 98 000 m2 of floor space, retail space 50 000 m2 • Russia’s largest Stockmann
Slide 26: Inspiring shopping milieu – St. Petersburg
Inspiring shopping milieu – St. Petersburg
Slide 27: Inspiring shopping milieu – Ekaterinburg
Inspiring shopping milieu – Ekaterinburg • Opened in March 2011 • Commercial area 7 750 m2 • Employees 270 • Investment 14 M€
Slide 28: Upcoming enlargements and facelifts
Inspiring milieu – upcoming enlargements and facelifts • Tapiola department store has currently approx. 11 500 m2 of retail space and is Stockmann’s second largest department store in Finland. • Target is to open the store in new leased premises in 2016 with the Tapiola Group. • Tampere department s
Slide 29: Creating a Buzz – Crazy Days
Creating a Buzz – Crazy Days • Crazy Days – the most powerful retail promotion in the Baltic Sea area • Crazy Days is a registered trademark of Stockmann REVENUE IND s11/s10 Finland ind 105 Baltics ind 118 Sales of Smolenskaya dpt store A/07 Russia ind 170 CMD 7.9.2011 DSD total ind 118
Slide 30: Creating a buzz – Crazy Days
Creating a buzz – Crazy Days CMD 7.9.2011 30
Slide 31: Creating a buzz
Creating a buzz Stockmann in Facebook CMD 7.9.2011 31
Slide 32: Creating a buzz
Creating a buzz – Stockmann 150 years in 2012 CMD 7.9.2011 32
Slide 33: Stockmann – multichannel retailer with 3 web stores
Stockmann – multichannel retailer with 3 web stores CMD 7.9.2011 33
Slide 34: Hobby Hall – leading distance retailer in Finland
Hobby Hall – leading distance retailer in Finland • 50 years in 2012 – founded in 1962 • Acquired by Stockmann in 1985 • Online launch in 2000 • Part of the Stockmann Department Store Division as of 2010 • The most convenient way of shopping with flexible payment methods • Modern, easy collection of
Slide 35: Stockmann.com
Stockmann.com • Launched in October 2010 • ~30 000 items • Hundreds of international and Finnish brands in Fashion, Home and Leisure • Stockmann department store at your home • Tightly integrated to department store processes • Popular click and collect delivery CMD 7.9.2011 35
Slide 36: Department Stores in Russia
Department Stores in Russia STOCKMANN
Slide 37: DSD Russia investments and openings
DSD Russia investments and openings Mega South Mega East Rostokino Mega North Nevsky Centre 100 000 Metropolis Nevsky DS 90 000 Ekaterinburg 80 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 2004 2005 2006 2007 2008 2009 2010 2011FC CMD 7.9.2011 37 Nevsky Centre and Department Store investme
Slide 38: Department stores in Russia today
Department stores in Russia today MEGA SOUTH MEGA NORTH MEGA EAST METROPOLIS Opened 4/2004 Opened 12/2004 Opened 2/2007 Opened 2/2009 ROSTOKINO NEVSKY CENTRE EKATERINBURG Opened 3/2010 Opened 11/2010 Opened 3/2011 38 CMD 7.9.2011
Slide 39: It takes several years...
lt takes several years... STOCKMANN
Slide 40: Typical development after opening
Typical development after opening Revenue Costs + Depreciation Gross Margin % 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 1st year 2nd year 3rd year 4th year CMD 7.9.2011 40
Slide 41: Starting phase / Revenue
Starting phase / Revenue Annual revenue development during the first 3–5 years is normally substantial. However, it takes even more time to reach the full potential of the location and square meters. • Fashion is bought in advance – We are now buying Spring 2012 and planning Autumn 2012. These are t
Slide 42: Starting phase / Gross margin
Starting phase / Gross margin Gross margin development is directly related to revenue development – and it takes a few years to reach average levels. In the first year the relative gross margin depends greatly on the opening month – St Petersburg had two sale periods during the first 10 months of tr
Slide 43: Starting phase / Costs
Starting phase / Costs The majority of costs related to running a store come from real estate and personnel. • Real estate costs remain typically on a relatively stable level, not depending on revenue. • Personnel costs vary – but not to an extent that it would cover the revenue differences. A new s
Slide 44: Right Now
Right Now STOCKMANN
Slide 45: Main strategic aims
Main strategic aims 1. Taking full potential out of investments – especially in Helsinki and St Petersburg 2. Clear brand position as the leading department store in each operating market 3. Improved profitability of total operation 4. Considerably less investments 5. Strengthening competitiveness i
Slide 46: Market development
Market development Fashion trade: Monthly sales growth in 2011 in Finland RUSSIA 2009 2010 2011F 2012F 2013F Retail sales, change % -4,9 4,4 3,8 4,5 5,3 Source: Ministry of Economic Development in Russia CMD 7.9.2011 46
Slide 47: Quarterly revenue, Department Store Division
Quarterly revenue, Department Store Division EUR mill. 400 350 +15% 300 +13% 250 200 150 100 50 0 1-3 4-6 7-9 10-12 2009 2010 2011 Hobby Hall has been integrated into the Department Store Division since 1 January 2010. The Department Store Division’s figures and indexes include Hobby Hall (exclusive
Slide 48: Quarterly operating profit, Department Store Division
Quarterly operating profit, Department Store Division EUR mill. 40 35 30 25 20 15 10 5 0 1-3 4-6 7-9 10-12 -5 -10 -15 2009 2010 2011 CMD 7.9.2011 48
Slide 49: Bestseller franchising in Russia to end in 2012
Bestseller franchising in Russia to end in 2012 • Stockmann and the Danish fashion company Bestseller A/S have agreed on ending the franchising co-operation in Russia by 31 December 2012 • Bestseller will be responsible for running the store operations in Russia when the franchising agreement ends •
Slide 50: Activities and outlook for the rest of 2011
Activities and outlook for the rest of 2011 • The important autumn season opened with a store-wide Berlin theme campaign in all markets • 5-day Crazy Days campaign in October – for the first time in Ekaterinburg • Tapiola department store to celebrate its 30-year and Oulu its 10-year anniversary • C