Stockmann Group’s Half year financial report, 1 January–30 June 2021
Stockmann Group improved the result in both divisions and updates its guidance
STOCKMANN plc, Half year financial report, 23.7.2021 at 8.00 EET
April–June 2021:
- Consolidated revenue was EUR 228.0 million (182.7), up 21.4% in comparable currency rates.
- Gross margin was 60.5% (54.1).
- Operating result was EUR 26.3 million (-0.4).
- The adjusted operating result was EUR 26.7 million (0.8).
- Earnings per share were EUR 0.25 (-0.20).
- Adjusted earnings per share were EUR 0.26 (-0.18).
January–June 2021:
- Consolidated revenue was EUR 383.7 million (351.1), up 6.5% in comparable currency rates.
- Gross margin was 58.8% (54.2).
- Operating result was EUR -1.4 million (-28.3).
- The adjusted operating result was EUR 5.6 million (-25.9).
- Earnings per share were EUR -0.14 (-0.70).
- Adjusted earnings per share were EUR -0.05 (-0.67).
Updated guidance for 2021:
Stockmann expects a clear increase to the Group revenue and the adjusted operating result to be clearly positive assuming that no major COVID-19 restrictions are imposed.
Previous guidance (published on 30.4.2021):
The prolonged COVID-19 pandemic gives rise to a lack of clarity in Stockmann’s business environment. As the outlook is unclear, Stockmann will provide a new guidance when the market visibility improves.
CEO Jari Latvanen:
Both divisions improved their results. The Group’s adjusted operating profit improved from EUR 0.8 million to EUR 26.7 million during Q2. Also the Group’s cash increased during Q2 and amounted to EUR 155 million at the end of June. During the first six months, lease liabilities decreased and net gearing improved. The restructuring debt conversions to equity and new bond, in accordance with the restructuring programme, were successfully completed in July, and they will further strengthen the financial position.
The market started to recover and it is very positive that Lindex is even above and Stockmann is in line with market growth. Visitor flows in brick-and-mortar stores intensified during the second quarter. Especially the fashion categories improved clearly during Q2.
Lindex had very strong performance with improved sales and result in all markets and business areas. The sales in both physical stores and online have increased. Together with better gross margin and continued cost savings, these made a good contribution to the positive result.
The positive development is also shown in Stockmann division's profitability, which is clearly improving. By adapting the combination of marketing measures, department store development and virtual events, Stockmann has been able to react quickly to fluctuation in the market. Stockmann’s online revenue increased by 82% compared to 2019 first half and decreased by 22% compared to 2020 first half. The lack of tourists is still visible in the brick-and-mortar stores.
KEY FIGURES
| 4–6/ 2021 |
4–6/ 2020 |
1–6/ 2021 |
1–6/ 2020 |
1–12/ 2020 |
|
| Revenue, EUR mill. | 228.0 | 182.7 | 383.7 | 351.1 | 790.7 |
| Gross margin, % | 60.5 | 54.1 | 58.8 | 54.2 | 56.1 |
| Operating result (EBIT), EUR mill. | 26.3 | -0.4 | -1.4 | -28.3 | -252.4 |
| Adjusted operating result (EBIT), EUR mill. | 26.7 | 0.8 | 5.6 | -25.9 | 4.9 |
| Result for the period, EUR mill. | 19.1 | -12.9 | -10.4 | -48.1 | -291.6 |
| Earnings per share, undiluted and diluted, EUR |
0.25 | -0.20 | -0.14 | -0.70 | -3.88 |
| Personnel, average | 5 637 | 5 738 | 5 484 | 6 168 | 5 991 |
| Cash flow from operating activities, EUR mill. | 51.6 | 108.3 | 34.7 | 85.9 | 147.4 |
| Capital expenditure, EUR mill. | 2.2 | 4.0 | 4.6 | 10.3 | 19.4 |
| Equity per share, EUR | 2.63 | 5.89 | 2.90 | ||
| Net gearing, % | 304.9 | 194.6 | 336.1 | ||
| Equity ratio, % | 14.3 | 24.8 | 14.6 |
Where applicable, figures have been adjusted to correspond the change in accounting policy.
ITEMS AFFECTING COMPARABILITY
| EUR million | 4–6/ 2021 |
4–6/ 2020 |
1–6/ 2021 |
1–6/ 2020 |
1–12/ 2020 |
| Operating result (EBIT) | 26.3 | -0.4 | -1.4 | -28.3 | -252.4 |
| Adjustments to EBIT | |||||
| Lindex goodwill impairment | 250.0 | ||||
| Restructuring and transformation measures | 0.4 | 1.3 | 7.0 | 2.4 | 7.3 |
| Adjusted operating result (EBIT) | 26.7 | 0.8 | 5.6 | -25.9 | 4.9 |
CORPORATE RESTRUCTURING PROCEEDINGS
By a decision on 9 February 2021, the Helsinki District Court approved Stockmann plc’s restructuring programme, and the restructuring proceedings have ended. The restructuring programme is based on the continuation of Stockmann’s department store operations, the sale and lease-back of the department store properties located in Helsinki, Tallinn and Riga and the continuation of Lindex’s business operations as a fixed part of the Stockmann Group. The properties’ sale and lease-back projects are progressing in accordance with the restructuring programme.
On account of the combination of the A and B share classes of Stockmann plc a total of 3,053,086 new shares issued to holders of A shares in a directed share issue without payment have been
registered with the Trade Register on 9 April 2021, in accordance with the resolution made by the Annual General Meeting on 7 April 2021. Following the combination, the company has only a single class of shares, all shares of which shall carry one (1) vote per share and have equal rights also in all other respects. (Stock Exchange Release 9.4.2021)
Half of the hybrid bond was cut during Q1 2021 and the other half will be converted to equity. 20% of the other restructuring debt will be converted into equity or cut. (Interim Management Statement 30.4.2021)
Stockmanns's Board of Director's resolved on a share issue of at most 100,000,000 new shares in the company to the Creditors Eligible for Conversion. (Stock Exchange Release 18.5.2021)
Stockmann plc announced an offering of senior secured bonds to certain unsecured creditors of the issuer under the restructuring programme approved by Helsinki District Court on 9 February 2021. (Stock Exchange Release 18.5.2021)
COVID-19
The COVID-19 pandemic is still having impact on Stockmann Group’s operating environment and customer volumes. During the second quarter in 2021, the pandemic continued to have a negative impact on business, especially in customer volumes in the brick-and-mortar stores. The online sales were not able to fully compensate for the decline despite the strong increase in e-commerce.
During the second quarter, other operating income came to EUR 1.5 million as a result of public funding related to the COVID-19 situation received mainly by Lindex in various countries.
UPDATED GUIDANCE FOR 2021
Stockmann expects a clear increase to the Group revenue and the adjusted operating result to be clearly positive assuming that no major COVID-19 restrictions are imposed.
Previous guidance (published on 30.4.2021):
The prolonged COVID-19 pandemic gives rise to a lack of clarity in Stockmann’s business environment. As the outlook is unclear, Stockmann will provide a new guidance when the market visibility improves.
MARKET OUTLOOK FOR 2021
Uncertainty in the global economy is expected to persist throughout 2021, and the COVID-19 pandemic will continue to have a significant impact on the economy across the world, until the coronavirus situation is under better control. The retail market is expected to remain challenging due to changes in consumer behaviour and confidence, which are also affected by the coronavirus situation.
The Stockmann division will continue to execute the restructuring programme and Lindex to drive efficiencies and explore new growth opportunities.
Half year financial report
This company announcement is a summary of Stockmann's Half year financial report for January – June 2021 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 at stockmanngroup.com.
Webcast
The press and analyst briefing will be held on 23 July 2021 at 10:00 as a live webcast, that can be followed by this link or on the address stockmanngroup.com. The recording and presentation material are available on the company's website after the event.
Further information:
Jari Latvanen, CEO, tel. +358 9 121 5606
Pekka Vähähyyppä, CFO, puh. +358 9 121 3351
Henna Tuominen, Director, Communications, CSR and IR, tel. +358 50 5705080
STOCKMANN plc
Jari Latvanen
CEO
Distribution:
Nasdaq Helsinki
Principal media