Lindex Group’s Interim Report 1 January – 31 March 2024

Lindex Group had underlying revenue growth in the first quarter, but the result was impacted by the timing of Crazy Days and freight costs

LINDEX GROUP plc, Interim report 26.4.2024 at 8.30 EEST

Lindex Group’s Interim Report 1 January – 31 March 2024

Lindex Group had underlying revenue growth in the first quarter, but the result was impacted by the timing of Crazy Days and freight costs

January–March 2024:

• On 21 March 2024, the Annual General Meeting made the decision to change the name of the Group's parent company from Stockmann Oyj Abp to Lindex Group Oyj.
• Lindex Group’s revenue was EUR 192.8 (198.5) million. The revenue decreased by -2.8%, and in local currencies by -3.2%. The Group’s underlying revenue, meaning the revenue excluding the impact of the Crazy Days timing, increased.
  - The Lindex division’s revenue increased to EUR 130.6 (126.5) million. In local currencies, the revenue increased by 2.7% and sales grew in all main markets.
  - The Stockmann division’s revenue decreased to EUR 62.2 (72.0) million, mainly due to the timing of the Crazy Days campaign.
• The Group’s gross margin was level with the comparison period at 56.3% (56.4).
• The Group’s adjusted operating result declined to EUR -6.5 (-2.4) million, where currency rates didn’t have any material impact.
  - The Lindex division’s adjusted operating result declined to EUR 4.2 (5.6) million, mainly explained by higher freight costs due to unexpected logistic challenges in the Red Sea.
  - The Stockmann division’s adjusted operating result decreased to EUR -9.4 (-7.0) million, due to the timing of the Crazy Days campaign. In 2023, Crazy Days was partly ongoing in March, while in 2024, the campaign was held at the beginning of the second quarter in April.
• Operating result was EUR -7.6 (-2.9) million.
• Net result declined to EUR -15.4 (19.5) million mainly due to the positive impact of a tax decision for Stockmann Sverige AB in the comparison period.
• Earnings per share declined to EUR -0.10 (0.13).

Guidance for 2024 (unchanged):
In 2024, Lindex Group expects its revenue to increase by 1–3% in local currencies compared to 2023. The Group’s adjusted operating result is estimated to be EUR 70–90 million. Foreign exchange rate fluctuations may have a significant effect on the adjusted operating result.
 

Market outlook for 2024:
The market environment in 2024 is expected to remain challenging. The macroeconomic situation in Europe remains uncertain due to the continuing geopolitical instability. High interest rates and inflation are holding back economic growth, and the retail sector may be affected by lower consumer demand. Forecasts are indicating a stagnant GDP (Gross Domestic Product) development or slow growth in the company's key markets. Inflation is forecasted to continue declining from high to targeted levels. The situation may vary between the Group’s markets. Disruptions in supply chains and international logistics during the year cannot be excluded either.

CEO Susanne Ehnbåge:
During the first quarter, we progressed well with strategy implementation in both divisions. On 21 March 2024, our Annual General Meeting made the decision to change the parent company’s name from Stockmann plc to Lindex Group plc. The name change reflects the Lindex division’s strengthened role in the Group’s business and emphasises that the Group has moved on to a new strategic phase where it aims to further grow shareholder value.  

The parent company’s name change was part of a strategic assessment aiming to crystallise shareholder value by refocusing the Group’s business on Lindex. The Group continues to investigate strategic alternatives for the Stockmann department stores business, and we expect to finalise the assessment in 2024. We also aim to end our restructuring process as soon as possible. After the review period, we reached a settlement agreement with Nordika II SHQ Oy, which means that there is only one disputed claim left.

In January-March, the market environment remained challenging, with modest or negative market development in Lindex Group’s key markets. However, the Group’s underlying revenue increased, excluding the negative impact of the timing of the Crazy Days campaign. In addition, the Lindex division outperformed the market once again and continues its growth journey.

Lindex Group’s adjusted operating result declined to EUR -6.5 (-2.4) million. The key reasons for the decline were the timing of the Stockmann division’s Crazy Days campaign as well as increased  freight costs due to unexpected logistic challenges in the Red Sea affecting the Lindex division. The Lindex division increased revenue and strategically important share of digital revenue and continued to expand market presence with partnerships. The Stockmann division performed well, both in terms of revenue and adjusted operating result, when excluding the impacts of the timing of Crazy Days. The Stockmann division’s Crazy Days campaign was held after the review period, and it performed better than previous year. Furthermore, we have a solid action plan to improve profitability in the coming quarters.

Going forward, Lindex Group has a clear target: sustainable and profitable growth. I am happy to see our team’s dedication to implementing the strategy and their commitment to our financial and sustainability goals. The Group’s improved financial position serves as a solid foundation for further development and investments in areas such as process efficiency and digitalisation in order to enable the planned growth. The construction of Lindex’s new EUR 110 million omnichannel distribution centre is proceeding well, and we target it to be operational in the Autumn 2024.

I am personally impressed by the hard work our team members have invested in implementing our divisions’ strategies. I am confident that the decisions that have been made are supporting our journey towards an even stronger Lindex Group.

KEY FIGURES

*) The net result for the period declined due to lower operating result and increased tax expenses. In the comparison period, the tax expenses were impacted by a positive tax decision for Stockmann Sverige AB.
**) Earnings per share declined to EUR -0.10 (0.13) due to the lower net result as explained above and an increased number of shares compared to the previous period.
 

ITEMS AFFECTING COMPARABILITY (IAC)

STRATEGY

Lindex Group’s two divisions, Lindex and Stockmann, have their own strategies targeting sustainable and profitable growth. The Lindex division’s strategy builds on Lindex's purpose of empowering and inspiring women everywhere. The division’s three strategic must-win areas are to accelerate growth, transform into a sustainable business, and decouple cost from growth. The Stockmann division’s customer-centric strategy builds on Stockmann's purpose of being a marketplace for a good life. The division’s three strategic must-win areas are to elevate offering, grow and leverage the loyal customer base, and ensure a seamless omnichannel experience. Additionally, the Group has a clear focus on operational efficiency.

Both divisions are committed to Lindex Group’s science-based climate target to reduce greenhouse gas emissions from its own operations and its value chain by 42% by 2030 compared to 2022. Lindex Group expects the Science Based Targets initiative (SBTi) to validate its climate target during 2024.

In September 2023, Lindex Group initiated a strategic assessment aiming to crystallise shareholder value by refocusing the Group's business on Lindex. As part of the assessment, the Group changed its parent company name from Stockmann plc to Lindex Group plc, as decided by the Annual General Meeting on 21 March 2024. The Group continues to investigate strategic alternatives for the Stockmann department stores business. Lindex Group expects the strategic assessment to be finalised during 2024 and will provide an update on the assessment if, and when, appropriate.  

Interim Report
This company announcement is a summary of the Lindex Group’s Interim Report 1 January – 31 March 2024 and includes the most relevant information of the report. The complete report is attached to this release as a pdf file and is also available on the company's website lindex-group.com.

Financial releases in 2024
Lindex Group will publish its financial reports in 2024 as follows:
- 19 July 2024, Half year Financial Report for January–June
- 25 October 2024, Interim Report for January–September

Webcast for analysts and the media
A media and analyst briefing will be held in English as a live webcast today, on 26 April 2024 at 10:00 a.m. EEST. The event can be followed via this link. The recording and presentation material will be available on the company's website after the event.

LINDEX GROUP plc

Susanne Ehnbåge
CEO

Further information:
Susanne Ehnbåge, CEO
Annelie Forsberg, CFO
Contact via Lindex Group’s MediaDesk info@stockmann.com, tel. +358 50 389 0011
Marja-Leena Dahlskog, Head of Communications & IR, tel. + 358 50 502 0060

Distribution:
Nasdaq Helsinki
Principal media

Lindex Group plc is an international multichannel retail group with two divisions: Lindex and Stockmann. Lindex is a global fashion company with a purpose to empower and inspire women everywhere. Its three strong categories include women’s and kids’ wear as well as lingerie, where it is a market leader in the Nordics. Stockmann is a premium multi-brand retailer with department stores in Finland and the Baltics. Its purpose is to be a marketplace for a good life. In 2023, the Lindex Group’s revenue was EUR 952 million and it had some 5 800 employees. The Group’s roots lie in the Stockmann company founded in 1862 and its shares are listed on the Nasdaq Helsinki Ltd. in Finland. www.lindex-group.com