Slide 1: Interim Report Q3 2015
STOCKMANN Interim Report Q3 2015 28 October 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 Focus on fashion, fo
Slide 4: Our strategy in brief
Our strategy in brief CUSTOMER EFFICIENCY ”Every day is a new opening” Effective support functions, – focus on providing a top-notch processes and IT systems enable shopping experience and sales personnel to concentrate on increasing sales the customer 28.10.2015 4
Slide 5: Enhanced customer experience: Inspiration, quality and convenience
Enhanced customer experience: Inspiration, quality and convenience Strategic actions continue to improve customer service, product selection and customer loyalty in all channels. 12.8.2015 5
Slide 6: Efficiency programme for a rationalised scope of operations
Efficiency programme for a rationalised scope of operations Annual cost savings of EUR 50 million targeted by the end of 2016 Releasing own store space and bringing in new tenants ‒ Approx. 12 000 sqm released during 2015 Withdrawing from certain product categories by the end of 2015 ‒ Electronics (
Slide 7: Stockmann Group
Stockmann Group
Slide 8: Retail market in brief
Retail market in brief Finland ROUBLE/EURO ‒ Retail market remained weak Exchange rate Jan 2014 – 15 Oct 2015 ‒ Fashion market down by 8.5% (TMA) during January-September Baltic countries ‒ Market environment remained relatively stable RUB average rate Q3 2015 ‒ Increased competition in Estonia and
Slide 9: Revenue in Q3 2015
Revenue in Q3 2015 Revenue EUR 350.9 million (EUR QUARTERLY REVENUE 405.0 million), down by 7.8% excluding Seppälä EUR mill. 700 ‒ Revenue* down by 2.9% at -14.0% 600 -10.9%* comparable exchange rates -13.4% -3.8% 500 -2.9%* ‒ Russian rouble continuously weak +3.1%* 400 Revenue* in Finland down by 1
Slide 10: Operating result in Q3 2015
Operating result in Q3 2015 Gross margin 50.1% (49.6%) QUARTERLY OPERATING RESULT ‒ Increase due to divestment of Seppälä Excluding non-recurring items Operating costs EUR 171.5 million EUR mill. (EUR 198.7 million) including NRI 50 40 Non-recurring costs EUR 3.2 million 30 ‒ Related to inventories
Slide 11: 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. 1–9/2015 1–9/2014 1-12/2014 Equity ratio % 43.8 39.0 39.3 Gearing % 89.9 114.3 105.4 Net financial costs EUR mill. 1
Slide 12: 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 13: Stockmann Retail
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Slide 14: Stockmann Retail in Q3 2015
Stockmann Retail in Q3 2015 New campaigns offering experiences and inspiration to customers ‒ BROOKLYNN campaign with seasonal products, pop-up stores and events ‒ 2/20 concept in Delicatessen in Helsinki and Tapiola for easy everyday cooking ‒ New brands in own selection e.g. Reiss, Malene Birger,
Slide 15: New digital solutions improve customer service
New digital solutions improve customer service Stockmann app launched in September ‒ E.g. Mobile coupons, other benefits to loyal customers, purchase history information ‒ New features to be introduced in stages Tablet tool for sales personnel in all Finnish department stores during autumn 2015 ‒ Im
Slide 16: New Distribution Centre to open in April 2016
New Distribution Centre to open in April 2016 Current warehouse operations in four locations in Finland to be centralised into one centre in Tuusula in 2016 ‒ Photo studio also to move to the centre ‒ Baltic warehouse in Latvia to be transferred in 2017 ‒ Hobby Hall warehouses remain as before Highl
Slide 17: Revenue in Q3 2015
Revenue in Q3 2015 Revenue down by 14.2%, to EUR QUARTERLY REVENUE 178.1 million (EUR 207.5 million) ‒ Revenue at comparable exchange EUR mill. rates down by 7.7% 350 -21.9% Revenue in Finland down by 10.6% 300 -19.2%* -1.1% ‒ Excluding electronics and Hobby Hall 250 +6.9%* -14.2% down by 3.5% -7.7%
Slide 18: Operating result in Q3 2015
Operating result in Q3 2015 Gross margin 37.6% (38.1%) QUARTERLY OPERATING RESULT ‒ In Finland gross margin up excluding Excluding non-recurring items books, or on a par including books EUR mill. ‒ In Russia down due to weak currency 0 exchange rate; new price increases 1-3 4-6 7-9 10-12 made in Sep
Slide 19: Crazy Days in October 2015
Crazy Days in October 2015 Campaign held in the department stores and online store on 7–11 October Total sales up 4.0% at comparable exchange rates, excluding withdrawn product categories REVENUE Strong sales in Finland Autumn 2015 vs. 2014 ‒ Both in online and department stores Finland 1.1% ‒ Fashi
Slide 20: Outlook for the rest of 2015
Outlook for the rest of 2015 Continued focus on key product categories: fashion, cosmetics, home and food, which made over 85% of sales in 2014 Key investment: new highly automated distribution centre in Tuusula opening in April 2016 Strong Christmas campaign: Christmas wrapped up in its best ‒ High
Slide 21: Real Estate
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Slide 22: Real Estate in Q3 2015
Real Estate in Q3 2015 Five properties in four countries, with a gross leasable area of 144 000 sqm ‒ Fair value of properties EUR 888.8 million at the end of the quarter New tenants during Q3 ‒ Tampere: Expert, Pharmacy Syke ‒ Tallinn: Euronics ‒ Riga: Euronics, Costa Coffee ‒ Lease agreement signe
Slide 23: Revenue in Q3 2015
Revenue in Q3 2015 Revenue EUR 15.0 million QUARTERLY REVENUE (EUR 14.8 million) EUR mill. Net operating income* from own 20 properties EUR 11.7 million +0.2% +1.6% (EUR 11.0 million) 15 -2.1% Net rental yield 5.3 per cent Average rent EUR 33.42 per sqm 10 Occupancy rate 98.7 per cent at the 5 end o
Slide 24: Operating profit in Q3 2015
Operating profit in Q3 2015 Operating profit EUR 4.5 million QUARTERLY OPERATING RESULT (EUR 3.6 million) EUR mill. ‒ Lower operating costs than in 2014 6 ‒ Depreciation up due to fair valuation of properties 5 Capital expenditure EUR 1.9 4 million from the beginning of the year (EUR 1.2 million) 3
Slide 25: Outlook for the rest of 2015
Outlook for the rest of 2015 Bringing in new tenants to the department stores in all markets ‒ Bonnier/Academic Bookstore started on 1 October in Helsinki Book Building, Tampere, Itis and Jumbo stores; in Turku and Tapiola lease agreements transferred to Bonnier ‒ Hamleys, Halti, Musti ja Mirri and
Slide 26: Lindex
Lindex
Slide 27: Lindex in Q3 2015
Lindex in Q3 2015 Good quarter with increase in sales in local currencies ‒ Strong sales in July and September ‒ August challenging due to exceptionally warm weather ‒ Strongest sales increase in children’s wear ‒ Successful 'Autumn hitlist' campaign with famous model and focus on fashion products &
Slide 28: Revenue in Q3 2015
Revenue in Q3 2015 Revenue up 0.1%, to EUR 166.2 QUARTERLY REVENUE million (EUR 166.0 million) EUR mill. -1.9% ‒ Moderate increase due to the weak 200 +0.2%* +0.1% +3.2%* Swedish krona and Norwegian krone -4.3% Revenue at comparable exchange 150 +2.4%* rates up 3.2% ‒ Growth in all countries except
Slide 29: Operating profit in Q3 2015
Operating profit in Q3 2015 Gross margin 61.6% (62.0%) QUARTERLY OPERATING RESULT Operating costs down EUR mill. ‒ Marketing costs down; in 2014 25 exceptionally high marketing costs due to Jean Paul Gaultier 20 campaign and Lindex 60th 15 anniversary 10 ‒ Lower store and office expenses 5 due to co
Slide 30: International expansion
International expansion Lindex opened 3 stores and closed 7 stores during the third quarter 2015 Store network on 30 Sept. 2015 ‒ 488 stores in 18 countries, of which 38 franchising stores In Russia, all stores will be closed down during 2015–2016 ‒ Six stores closed in Q3 2015 Total number of store
Slide 31: Outlook for the rest of 2015
Outlook for the rest of 2015 Positive sales expectations for all markets Strong growth in the online store expected to continue Second store opening in London Westfield in UK New store opening in Mall of Scandinavia in Stockholm Actions for cost reductions continue according to plan Important Christ
Slide 32: Wrap-up
Wrap-up
Slide 33: Stockmann's Q3 2015 in brief
Stockmann’s Q3 2015 in brief New strategy well under way – we are at the beginning of building a new Stockmann Improved performance despite decline in revenue Group’s gross margin up Operating costs declined due to cost savings measures in all divisions and divestment of Seppälä Group’s operating re