Marimekko Corporation INTERIM REPORT
21 August 2008 at 8.30 a.m.
MARIMEKKO CORPORATION'S INTERIM REPORT, 1 JANUARY - 30 JUNE 2008
NET SALES UP NEARLY 10%; EARNINGS IMPROVE NOTABLY
In the January-June period of 2008, the Marimekko Group's net sales rose by 9.5%
to EUR 37.1 million (EUR 33.9 million). Operating profit improved by 39.0% to
EUR 4.4 million (EUR 3.1 million). Profit after taxes for the period grew by
39.6% to EUR 3.2 million (EUR 2.3 million). Earnings per share rose to EUR 0.40
(EUR 0.29). Deliveries for individual promotions in Finland and one-off income
from sales of licensed products had a favourable impact on net sales growth and
earnings. The full-year estimate remains unchanged. In 2008, net sales growth
and the Group's relative profitability are expected to remain at the same level
as in 2007.
1-6/ 1-6/ Change, 1-12/
2008 2007 % 2007
Net sales, EUR 1,000 37,133 33,909 9.5 77,264
Exports and income from
international operations,
% of net sales 31.0 27.9 26.5
Operating profit, EUR 1,000 4,364 3,140 39.0 10,487
Profit before taxes,
EUR 1,000 4,378 3,136 39.6 10,442
Profit for the period,
EUR 1,000 3,237 2,319 39.6 7,717
Earnings per share, EUR 0.40 0.29 37.9 0.96
Equity per share, EUR 3.40 2.98 14.1 3.66
Return on equity (ROE), % 22.8 18.2 27.4
Return on investment (ROI), % 28.1 21.8 35.0
Equity ratio, % 67.2 62.9 72.7
Marimekko's President and CEO Mika Ihamuotila:
“Trends in Marimekko's business operations during the January-June period of
2008 were in line with estimates. Sales growth was seen in all key markets. In
Finland, net sales growth was wholly generated by deliveries for individual
promotions. Buoyant growth continued in exports. Growth was, however,
overshadowed by the slowdown of the world economy; its impact on consumption
demand was evident in several markets during the second quarter.
The Group's profitability remained at a good level throughout the review period.
Earnings for the period were improved by sales growth, one-off income from sales
of licensed products, and a reduction in marketing costs on the comparison
period. Earnings trends were, however, burdened by increased operating expenses.
Long-term development of the company's operations has started off well. The
results of this development work will be seen in a few years' time.
In spite of slowed economic growth, we are keeping our full-year estimate
unchanged. We forecast net sales growth and profitability to remain at the same
level as in 2007. Earnings trends and net sales growth for the remainder of 2008
will be supported by a substantial promotional delivery in Finland and the
opening of four new Marimekko concept stores in Japan.”
Marimekko's interim report for the January-September period of 2008 will be
published on Wednesday 5 November at 8:30 a.m.
All of Marimekko's stock exchange releases are available on the company's
website www.marimekko.com under Investors/Stock Exchange Releases.
For additional information, contact:
Mika Ihamuotila, President and CEO, tel. +358 9 758 71
Thomas Ekström, CFO, tel. +358 9 758 7261
MARIMEKKO CORPORATION
Group Communications
Marja Korkeela
Tel. +358 9 758 7238
Fax +358 9 759 1676
Email: marja.korkeela@marimekko.fi
DISTRIBUTION: OMX Nordic Exchange Helsinki
Principal media
Marimekko's website www.marimekko.com
Marimekko is a leading Finnish textile and clothing design company that was
established in 1951. The company designs, manufactures and markets high-quality
clothing, interior decoration textiles, bags and other accessories under the
Marimekko brand, both in Finland and abroad. Marimekko products are also
manufactured under license in various countries. In 2007, the company's net
sales amounted to EUR 77.3 million. Exports and income from international
operations accounted for 26.5% of the Group's net sales. The Group employs about
400 people. The company's share is quoted on the OMX Nordic Exchange Helsinki.
For further information, visit www.marimekko.com
MARIMEKKO CORPORATION'S INTERIM REPORT, 1 JANUARY - 30 JUNE 2008
ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance with IAS 34: Interim
Financial Reporting and applying the same accounting policy as for the 2007
financial statements. The information presented in this interim report has not
been audited.
NET SALES
April-June
In the April-June period of 2008, the Marimekko Group's net sales rose by 9.1%
to EUR 18,539 thousand (EUR 16,997 thousand). Net sales in Finland rose by 4.5%
to EUR 13,415 thousand (EUR 12,834 thousand). Exports and income from
international operations increased by 23.1% and totalled EUR 5,124 thousand (EUR
4,163 thousand).
January-June
In the January-June period of 2008, the Marimekko Group's net sales rose by 9.5%
to EUR 37,133 thousand (EUR 33,909 thousand). Net sales in Finland rose by 4.9%
to EUR 25,637 thousand (EUR 24,443 thousand). Exports and income from
international operations increased by 21.4% and totalled EUR 11,496 thousand
(EUR 9,466 thousand). Exports and income from international operations accounted
for 31.0% (27.9%) of the Group's net sales.
The breakdown of the Group's net sales by product line was as follows: clothing,
41.3%, interior decoration, 40.3%, and bags, 18.4%. Net sales by market area
were: Finland, 69.0%, the other Nordic countries, 14.1%, the rest of Europe,
6.6%, North America, 5.2%, and other countries (Japan and other regions outside
Europe and North America), 5.1%.
During the review period, sales in Marimekko's own retail stores in Finland rose
by 0.7% (2.1%). Sales to retailers in Finland fell by 0.8% (-5.8%).
MARKET SITUATION
The international economic outlook continued to weaken during the second quarter
of 2008. Increasing economic uncertainty was reflected in the United States as
well as in Europe. There was a notable decline in both companies' and consumers'
confidence in the development of the economy. The business climate outlook for
the Finnish textile and clothing industry weakened, and production costs
continued to rise sharply. (Confederation of Finnish Industries/Business cycle
barometer/August 2008). In the January-June period of 2008, the value of retail
sales in Finland was up 7.8% (Statistics Finland: Retail net sales index, June
2008).
According to data collected by the Textile and Fashion Industries TMA, retail
sales of clothing rose by 0.1%. Sales of womenswear were down 0.1% and menswear
0.9%, while sales of childrenswear grew by 1.5%. Sales of bags rose by 10.5% and
home textiles by 5.4%. In the January-May period of 2008, exports of clothing
(SITC 84) remained at the same level as in the previous year and imports rose by
3%. Exports of textiles (SITC 65) rose by 3%, while imports fell by 5% (National
Board of Customs, monthly review, May/2008).
REVIEWS BY BUSINESS UNIT
Clothing
In the January-June period of 2008, net sales of clothing rose by 1.6% to EUR
15,351 thousand (EUR 15,102 thousand). There was a clear fall in sales in
Finland. Trends in exports varied between markets. A sharp rise in sales was
seen in the market area referred to as “the other Nordic countries”, where
growth was boosted by one-off royalty income from licensing cooperation with H &
M Hennes & Mauritz AB. Buoyant growth continued in North America, while sales
fell in the market areas referred to as “the rest of Europe” and “other
countries”. Exports and income from international operations accounted for 29.6%
of net sales of clothing.
Interior decoration
Net sales of interior decoration products grew by 8.2% to EUR 14,965 thousand
(EUR 13,827 thousand). Sales rose both in Finland and abroad. The majority of
the growth seen in Finland was generated by deliveries for individual
promotions. Growth continued in all key export markets. The briskest growth was
seen in Japan, although solid growth also continued in the United States and the
market area referred to as “the other Nordic countries”. When compared to the
corresponding period of last year, a contraction in income from licensing
operations both in Finland and abroad had an unfavourable impact on growth in
sales of interior decoration products. Exports and income from international
operations accounted for 33.2% of net sales of interior decoration products.
Bags
Net sales of bags increased by 36.9% to EUR 6,817 thousand (EUR 4,980 thousand).
Growth picked up both in Finland and export markets. Sales in Finland were
boosted by a substantial delivery for a one-off promotional campaign. Brisk
growth was seen in all export markets except North America, which experienced a
distinct fall in sales. In relative terms, the highest increase in bag sales was
seen in the market areas referred to as “other countries” and “the other Nordic
countries”. Exports and income from international operations accounted for 29.3%
of net sales of bags.
Business-to-business sales
Business-to-business sales (previously “business gifts and contract sales”) rose
by 101.2%. This growth was generated by a delivery for an individual promotional
campaign.
Exports and international operations
Exports and income from international operations rose by 21.4% to EUR 11,496
thousand (EUR 9,466 thousand). Growth continued in all key markets. However,
growth rates slowed in several countries during the second quarter due to the
weaker economic outlook. The major export countries were Sweden, the United
States, Japan, Denmark, Norway and Germany.
In the market area referred to as “the other Nordic countries”, net sales rose
by 35.8% to EUR 5,248 thousand (EUR 3,865 thousand). Sales improved in all
product lines. The greatest relative growth was seen in sales of clothing and
bags. Sales of interior decoration products also grew well. One-off income from
licensing cooperation with H & M Hennes & Mauritz AB contributed to the
substantial growth in clothing sales during the second quarter.
Growth was sluggish in the market area referred to as “the rest of Europe”. Net
sales rose by 1.1% to EUR 2,451 thousand (EUR 2,424 thousand). Sales of bags
continued to grow well. Sales of interior decoration products rose slightly, but
clothing sales declined.
Growth continued in North America, albeit at a slower rate than in the previous
year. Net sales rose by 11.7% to EUR 1,913 thousand (EUR 1,713 thousand). The
greatest relative increase was seen in sales of interior decoration products.
Clothing sales also continued to grow well, but bags experienced a notable fall
in sales.
In the market area referred to as “other countries”, in which Japan is the major
export country, net sales rose by 28.7% to EUR 1,884 thousand (EUR 1,464
thousand). Growth was generated by sales of interior decoration products and
bags, while sales of clothing contracted slightly. At the end of the period,
there were a total of eleven Marimekko concept stores and shop-in-shops in
Japan. In February 2008, Marimekko's Japanese partner Look Inc. opened a
Marimekko concept store in Sapporo.
Licensing
Royalty earnings from sales of licensed products rose substantially during the
period. This growth was wholly generated during the second quarter through
one-off income from licensing cooperation with the Swedish company H & M Hennes
& Mauritz AB. In Finland and the United States, royalty earnings fell
significantly.
Production
During the review period, the production volume of the company's factories
remained at the same level as in the corresponding period of the previous year.
EARNINGS
April-June
In the April-June period, the Group's operating profit rose by 54.6% on the
comparison period to EUR 2,540 thousand (EUR 1,643 thousand). Earnings per share
rose to EUR 0.23 (EUR 0.15). In addition to growth in exports, earnings for the
period were improved by sales growth in Finland generated by individual
promotions, substantial one-off income from sales of licensed products, and
reduced marketing expenses. Earnings trends weakened by increased operating
expenses.
January-June
In the January-June period of 2008, the Group's operating profit improved by
39.0% to EUR 4,364 thousand (EUR 3,140 thousand). Operating profit as a
percentage of net sales was 11.8% (9.3%). The Group's marketing expenses for the
period totalled EUR 1,667 thousand (EUR 2,067 thousand), representing 4.5%
(6.1%) of net sales.
The Group's depreciation amounted to EUR 655 thousand (EUR 655 thousand), or
1.8% (1.9%) of net sales. Net financial income totalled EUR 14 thousand (net
financial expenses: EUR 4 thousand), representing 0.0% (0.0%) of net sales.
Profit for the period after taxes rose by 39.6% to EUR 3,237 thousand (EUR 2,319
thousand), or 8.7% (6.8%) of net sales. Earnings per share improved to EUR 0.40
(EUR 0.29).
In addition to growth in exports, earnings for the period were improved by sales
growth in Finland generated by individual promotions, substantial one-off income
from sales of licensed products, and reduced marketing expenses. Earnings trends
weakened by increased operating expenses.
INVESTMENTS
The Group's gross investments amounted to EUR 368 thousand (EUR 1,024 thousand),
representing 1.0% (3.0%) of net sales. The major investments were made in
renovations to the Herttoniemi property, the acquisition of equipment and
information management systems, as well as in the construction of the Turku
store, which will open at the end of August 2008.
EQUITY RATIO AND FINANCING
Equity ratio was 67.2% at the end of the period (62.9% on 30 June 2007, 72.7% on
31 December 2007). The ratio of interest-bearing liabilities minus financial
assets to shareholders' equity (gearing) was 2.6%, while it was 9.9% at the same
time in the previous year (-15.2% on 31 December 2007).
At the end of the period, the Group's financial liabilities amounted to EUR
4,970 thousand (EUR 5,712 thousand). The Group's financing from operations was
EUR 3,893 thousand (EUR 2,974 thousand) and its financial assets amounted to EUR
4,251 thousand at period's end (EUR 3,343 thousand).
SHARES AND SHARE PRICE TREND
Share capital
At the end of the period, the company's fully paid-up share capital, as recorded
in the Trade Register, amounted to EUR 8,040,000 and the number of shares
totalled 8,040,000.
Shareholdings
According to the book-entry register, Marimekko had 5,877 (5,266) registered
shareholders at the end of the review period. 17.0% of the shares were
registered in a nominee's name and 14.8% were in foreign ownership. At the end
of the period, the number of shares owned either directly or indirectly by
members of the Board of Directors and the president of the company was
1,045,900, representing 13.0% of the total share capital and - taking into
account the voting authorisation granted by Workidea Oy to Muotitila Ltd on 31
October 2007 - 23.0% of the votes conferred by the company's shares.
Largest shareholders according to the book-entry register on 30 June 2008
Percentage of holding and votes
1. Muotitila Ltd 13.00 *)23.00
2. Fautor S.P.R.L. 10.58 10.58
3. Workidea Oy 10.00 *)0.00
4. ODIN Finland 4.14 4.14
5. Evli Select Fund 1.87 1.87
6. Varma Mutual Employment
Pension Insurance Company 1.34 1.34
7. Ilmarinen Mutual Pension Insurance Company 0.89 0.89
8. Foundation for Economic Education 0.62 0.62
9. Miettinen Kari 0.60 0.60
10. Scanmagnetics Oy 0.50 0.50
11. Fromond Elsa 0.40 0.40
12. Westerberg Olof 0.37 0.37
13. Karvonen Eero 0.35 0.35
14. Mäki Uolevi 0.34 0.34
15. Esr Eq Pikkujättiläiset 0.31 0.31
Nominee-registered 16.97 16.97
Others 37.72 37.72
Total 100.00 100.00
*)Taking into account the voting authorisation granted by Workidea Oy to
Muotitila Ltd on 31 October 2007. Detailed information on the authorisation was
given in the section “Share and Shareholders/Flagging notifications” in
Marimekko's 2007 Annual Report.
Flaggings
Morgan Stanley & Co Incorporated's share of Marimekko Corporation´s share
capital and voting rights rose to 5.44%, or 438,083 shares, as a result of a
transaction made on 7 April 2008; and then fell to 0.90%, or 73,083 shares, as a
result of a transaction made on 9 April 2008.
Authorisations
At the end of the review period, the Board of Directors had no valid
authorisations to carry out share issues or issue convertible bonds or bonds
with warrants, or to acquire or surrender Marimekko shares.
Share trading
During the review period, a total of 852,290 Marimekko shares were traded,
representing 10.6% of the shares outstanding. The total value of Marimekko's
share turnover was EUR 12,425,045. The lowest price of the Marimekko share was
EUR 13.35, the highest was EUR 18.20, and the average price was EUR 14.57. At
the end of the review period, the final price of the share was EUR 13.35. The
company's market capitalisation on 30 June 2008 was EUR 111,756,000 (EUR
118,188,000 on 30 June 2007, EUR 146,328,000 on 31 December 2007).
PERSONNEL
The number of Marimekko personnel increased by 1.7% in the January-June period
of 2008. During the period, the number of employees averaged 411 (402). At the
end of the period, the Group employed 407 (400) people, of whom 16 (17) worked
abroad.
CHANGES IN THE COMPANY'S MANAGEMENT
On 1 February 2008, Mika Ihamuotila, Ph.D. (Econ.), became the company's new
president. As of 1 February 2008, the company's management group comprises Mika
Ihamuotila as Chairman with members Thomas Ekström (Chief Financial Officer),
Marja Korkeela (Group communications and investor relations), Päivi Lonka
(exports and licensing sales), Sirpa Loukamo (clothing and accessories), Mervi
Metsänen-Kalliovaara (domestic wholesale, business-to-business sales, sales
development), Piia Rossi (company-owned retail stores), Kirsi Räikkönen (brand
and marketing communications) and Helinä Uotila (production, purchases, and
interior decoration). Sirpa Loukamo will retire on 1 September 2008. Her work
will be continued by Niina Nenonen, who joined the management group and assumed
responsibility for the company's clothing portfolio and its profitability on 1
August 2008.
RISK MANAGEMENT AND MAJOR RISKS
Marimekko's risk management policy and the major risks to the company's business
operations have been detailed in the 2007 Annual Report. No notable changes in
these risks occurred during the review period.
Research and development
The company's product planning and development costs arise from the design of
collections. Design costs are recorded in expenses.
ENVIRONMENT
Responsibility for the environment and nature is an integral aspect of
Marimekko's business. Cooperation agreements require Marimekko's subcontractors
and other partners to commit themselves to shouldering their environmental
responsibilities. In environmental matters, the company's business supervision
is largely based on legislation and other regulations. Marimekko's production
processes do not generate any waste that is classified as hazardous or
detrimental to health. The environmental impacts of production and other
business operations are monitored regularly by testing the materials used in the
products and developing production processes and methods. In late 2007, the
company launched a project to establish a social responsibility management
system for the entire Group. This project will be continued during the 2008
financial year.
DECISIONS OF THE ANNUAL GENERAL MEETING
Marimekko Corporation's Annual General Meeting, held on 3 April 2008, adopted
the company's accounts for 2007, discharged the President and members of the
Board from liability, and approved the Board of Directors' proposal for payment
of a dividend for 2007 of EUR 0.65 per share, totalling EUR 5,226,000.00. The
record date was 8 April 2008 and the dividend payout date 15 April 2008.
The Annual General Meeting resolved that the company's Board of Directors shall
have five (5) members. Tarja Pääkkönen was re-elected to the Board of Directors.
Ami Hasan, Mika Ihamuotila, Joakim Karske and Pekka Lundmark were elected as new
members. At its organisation meeting held after the Annual General Meeting, the
Board of Directors elected Pekka Lundmark as Chairman and Mika Ihamuotila as
Vice Chairman of the Board. The Board of Directors' term of office runs until
the end of the next Annual General Meeting.
The Annual General Meeting also resolved that the remuneration of the Chairman
of the Board will be EUR 20,000 per year and the remuneration of each other
Board member EUR 15,000 per year. The President of Marimekko Corporation will
not receive remuneration for being a member of the Board.
The Annual General Meeting elected PricewaterhouseCoopers Ltd, Authorised Public
Accountants, as the company's auditor, with Kim Karhu, Authorised Public
Accountant, as chief auditor. It was decided that the auditor's fee will be paid
as invoiced.
MAJOR EVENTS AFTER THE CLOSE OF THE REVIEW PERIOD
Disagreement concerning the Unikko trademark
In a stock exchange release dated 2 July 2008, Marimekko announced that Dolce &
Gabbana S.r.l. and Dolce & Gabbana Industria S.p.A. had submitted an application
to the Office for Harmonisation in the Internal Market (OHIM) for a declaration
of invalidity concerning Marimekko's red figure mark Unikko in classes 24
(Textiles and textile goods) and 25 (Clothing and headgear). Marimekko has the
right to respond to this application on or before 25 September 2008.
As part of the regular monitoring and protection of its intellectual property
rights, Marimekko had already reacted to the use of a flower pattern in certain
Dolce & Gabbana products during spring and summer 2008. Marimekko has not
authorised the set use, and the company has taken action in Germany to terminate
such use. On the basis of Marimekko's application, the District Court of Hamburg
has imposed a sales and marketing injunction on certain Dolce & Gabbana products
in Germany. Marimekko is now considering further action.
Marimekko currently estimates that there are no grounds for Dolce & Gabbana's
application for a declaration of invalidity and that this issue does not affect
either Marimekko's operations or the company's assessment of the outlook for the
remainder of 2008. Marimekko will continue to monitor and protect its
intellectual property rights and will respond to the application within the set
time limit. The company will report on any developments primarily within regular
disclosure obligations and will publish separate releases only as required under
the applicable rules.
OUTLOOK FOR THE REMAINDER OF 2008
The international economic outlook has continued to weaken and economic growth
is forecast to slow even further in the coming months. Marimekko operates in an
industry in which changes in the business climate are reflected in consumption
demand. In recent years, exports have increasingly been driving net sales
growth.
Earnings trends and net sales growth for the remainder of 2008 will be supported
by a substantial promotional delivery in Finland and the opening of four new
Marimekko concept stores in Japan. Based on the business climate outlook and
Marimekko's business estimates, the Group's net sales growth and relative
profitability for the 2008 financial year are forecast to remain at 2007 levels.
Deliveries for individual promotions in Finland and one-off income from sales of
licensed products will have a significant impact on full-year net sales growth
and earnings. Earnings trends are burdened by increased operating expenses.
Helsinki, 21 August 2008
MARIMEKKO CORPORATION
Board of Directors
GENERAL CLAUSE
This interim report contains forward-looking statements that are based on the
factors and assumptions currently available to Marimekko's management as well as
on the company's current decisions and plans. Forward-looking statements contain
assumptions that are subject to uncertainties. Actual results may therefore
deviate substantially from these assumptions. Uncertainty factors include
changes in general economic trends, the market situation, competition, currency
exchange rates and the company's own business operations.
APPENDICES TO THE INTERIM REPORT
Consolidated income statement
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in shareholders' equity
Key indicators
Consolidated net sales by market area and product line
Segment information
Quarterly trend in net sales and earnings
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 4-6/ 4-6/ 1-6/ 1-6/ 1-12/
2008 2007 2008 2007 2007
NET SALES 18,539 16,997 37,133 33,909 77,264
Other operating
income 14 17 24 35 74
Increase or decrease
in inventories of
completed and
unfinished products 703 67 2,564 924 642
Raw materials and
consumables 7,534 6,793 16,751 14,045 31,626
Employee benefit
expenses 4,786 4,194 9,208 8,240 16,799
Depreciation 326 333 655 655 1,338
Other operating
expenses 4,070 4,118 8,743 8,788 17,730
OPERATING PROFIT 2,540 1,643 4,364 3,140 10,487
Financial income 48 36 101 82 153
Financial expenses -57 -56 -87 -86 -198
-9 -20 14 -4 -45
PROFIT BEFORE TAXES 2,531 1,623 4,378 3,136 10,442
Income taxes 669 428 1,141 817 2,725
NET PROFIT FOR
THE PERIOD 1,862 1,195 3,237 2,319 7,717
Distribution
To equity holders of
the parent company 1,862 1,195 3,237 2,319 7,717
Basic and diluted
earnings per share
calculated on the
profit attributable
to equity holders of
the parent
company, EUR 0.23 0.15 0.40 0.29 0.96
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 30.6.2008 30.6.2007 31.12.2007
ASSETS
NON-CURRENT ASSETS
Tangible assets 9,691 10,402 9,956
Intangible assets 389 306 411
Available-for-sale
investments 20 20 20
10,100 10,728 10,387
CURRENT ASSETS
Inventories 20,274 17,422 18,281
Trade and other
receivables 5,755 6,022 5,533
Current tax assets 501 627 220
Cash and cash equivalents 4,251 3,343 6,269
30,781 27,414 30,303
ASSETS, TOTAL 40,881 38,142 40,690
SHAREHOLDERS' EQUITY
AND LIABILITIES
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT COMPANY
Share capital 8,040 8,040 8,040
Translation differences 6 4 3
Retained earnings 19,363 15,954 21,352
Shareholders' equity, total 27,409 23,998 29,395
NON-CURRENT LIABILITIES
Deferred tax liabilities 721 637 676
Financial liabilities 185 841 185
906 1,478 861
CURRENT LIABILITIES
Trade and other payables 7,781 7,795 8,810
Current tax liabilities - - 18
Financial liabilities 4,785 4,871 1,606
12,566 12,666 10,434
Liabilities, total 13,472 14,144 11,295
SHAREHOLDERS' EQUITY AND
LIABILITIES, TOTAL 40,881 38,142 40,690
The Group has no liabilities resulting from derivative contracts, and there are
no outstanding guarantees or any other contingent liabilities which have been
granted on behalf of the management of the company or its shareholders.
CONSOLIDATED CASH FLOW STATEMENT
(EUR 1,000) 1-6/2008 1-6/2007 1-12/2007
CASH FLOW FROM OPERATING
ACTIVITIES
Net profit for the period 3,237 2,319 7,717
Adjustments
Depreciation according to plan 655 655 1,338
Financial income and expenses -14 4 45
Taxes 1,141 817 2,725
Cash flow before change
in working capital 5,019 3,795 11,825
Change in working capital -3,219 -1,123 -598
Cash flow from operating
activities before
financial items and taxes 1,800 2,672 11,227
Paid interest and payments
on other financial expenses -78 -83 -207
Interest received 96 79 150
Taxes paid -1,422 -1,934 -3,094
CASH FLOW FROM
OPERATING ACTIVITIES 396 734 8,076
CASH FLOW FROM
INVESTING ACTIVITIES
Investments in tangible
and intangible assets -368 -1,024 -1,519
CASH FLOW FROM
INVESTING ACTIVITIES -368 -1,024 -1,519
CASH FLOW FROM
FINANCING ACTIVITIES
Short-term loans drawn 4,600 4,000 4,150
Short-term loans repaid -950 -400 -4,000
Long-term loans repaid -470 -470 -941
Finance leasing debts paid - -60 -60
Dividends paid -5,226 -5,226 -5,226
CASH FLOW FROM
FINANCING ACTIVITIES -2,046 -2,156 -6,077
Change in cash and
cash equivalents -2,018 -2,446 480
Cash and cash equivalents
at the beginning of the period 6,269 5,789 5,789
Cash and cash equivalents
at the end of the period 4,251 3,343 6,269
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Equity attributable to equity holders of the parent company
(EUR 1,000) Shareholders'
Share Translation Retained equity,
capital differences earnings total
Shareholders'
equity
1 Jan. 2007 8,040 18,861 26,901
Translation
differences 4 4
Net profit for
the period 2,319 2,319
Dividends paid -5,226 -5,226
Shareholders'
equity
30 June 2007 8,040 4 15,954 23,998
Shareholders'
equity
1 Jan. 2008 8,040 3 21,352 29,395
Translation
differences 3 3
Net profit for
the period 3,237 3,237
Dividends paid -5,226 -5,226
Shareholders'
equity
30 June 2008 8,040 6 19,363 27,409
KEY INDICATORS
1-6/ 1-6/ Change, % 1-12/
2008 2007 2007
Earnings per
share, EUR 0.40 0.29 37.9 0.96
Equity per share, EUR 3.40 2.98 14.1 3.66
Share of exports and
international operations,
% of net sales 31.0 27.9 26.5
Return on equity
(ROE), % 22.8 18.2 27.4
Return on
investment (ROI), % 28.1 21.8 35.0
Equity ratio, % 67.2 62.9 72.7
Gross investments,
EUR 1,000 368 1,024 -64.0 1,365
Gross investments,
% of net sales 1.0 3.0 1.8
Contingent liabilities,
EUR 1,000 17,382 14,990 16.0 18,710
Average personnel 411 402 2.2 405
Personnel at the end
of the period 407 400 1.7 411
Number of shares
at the end of
the period (1,000) 8,040 8,040 8,040
Number of shares
outstanding,
average (1,000) 8,040 8,040 8,040
Earnings per share (EPS), EUR:
(Profit before extraordinary items - taxes (excl. of taxes on extraordinary
items)) / Number of shares (average for the financial period)
Equity per share, EUR:
Shareholders' equity / Number of shares, 30 June
Return on equity (ROE), %:
(Profit before extraordinary items - taxes (excl. of taxes on extraordinary
items)) X 100 / Shareholders' equity (average for the financial period)
Return on investment (ROI), %:
(Profit before extraordinary items + interest and other financial expenses) X
100 / (Balance sheet total - non-interest-bearing liabilities (average for the
financial period))
Equity ratio, %:
Shareholders' equity X 100 / (Balance sheet total - advances received)
Gearing, %:
Interest-bearing net debt X 100 / Shareholders' equity
NET SALES BY MARKET AREA AND PRODUCT LINE
BY MARKET AREA, APRIL-JUNE
(EUR 1,000) 4-6/2008 4-6/2007 Change, % 1-12/2007
Finland 13,415 12,834 4.5 56,826
Other Nordic countries 2,594 1,796 44.4 8,581
Rest of Europe 889 861 3.2 4,725
North America 815 814 0.1 4,067
Other countries 826 692 19.3 3,065
TOTAL 18,539 16,997 9.1 77,264
BY PRODUCT LINE, APRIL-JUNE
(EUR 1,000) 4-6/2008 4-6/2007 Change, % 1-12/2007
Clothing 7,513 7,395 1.6 30,036
Interior decoration 7,377 7,029 5.0 35,813
Bags 3,649 2,574 41.8 11,415
TOTAL 18,539 16,997 9.1 77,264
BY MARKET AREA, JANUARY-JUNE
(EUR 1,000) 1-6/2008 1-6/2007 Change, % 1-12/2007
Finland 25,637 24,443 4.9 56,826
Other Nordic countries 5,248 3,865 35.8 8,581
Rest of Europe 2,451 2,424 1.1 4,725
North America 1,913 1,713 11.7 4,067
Other countries 1,884 1,464 28.7 3,065
TOTAL 37,133 33,909 9.5 77,264
BY PRODUCT LINE, JANUARY-JUNE
(EUR 1,000) 1-6/2008 1-6/2007 Change, % 1-12/2007
Clothing 15,351 15,102 1.6 30,036
Interior decoration 14,965 13,827 8.2 35,813
Bags 6,817 4,980 36.9 11,415
TOTAL 37,133 33,909 9.5 77,264
SEGMENT INFORMATION
(EUR 1,000) 1-6/2008 1-6/2007 Change, % 1-12/2007
Net sales
Finland 25,637 24,443 4.9 56,826
Other countries 11,496 9,466 21.4 20,438
Total 37,133 33,909 9.5 77,264
Assets
Finland 40,340 37,962 39,094
Other countries 2,086 1,663 2,469
Eliminations -1,545 -1,483 -873
Total 40,881 38,142 40,690
Investments
Finland 368 972 1,303
Other countries 0 52 62
Total 368 1,024 1,365
QUARTERLY TREND IN NET SALES AND EARNINGS
(EUR 1,000) 4-6/ 1-3/ 10-12/ 7-9/
2008 2008 2007 2007
Net sales 18,539 18,594 22,656 20,699
Operating profit 2,540 1,824 3,382 3,965
Earnings per share, EUR 0.23 0.17 0.31 0.36
(EUR 1,000) 4-6/ 1-3/ 10-12/ 7-9/
2007 2007 2006 2006
Net sales 16,997 16,912 20,142 18,357
Operating profit 1,643 1,497 3,776 3,492
Earnings per share, EUR 0.15 0.14 0.35 0.32
