Marimekko Corporation FINANCIAL STATEMENT BULLETIN
3 February 2010 at 9 a.m.
MARIMEKKO CORPORATION'S FINANCIAL STATEMENT BULLETIN,
1 January - 31 December 2009
In 2009, the Marimekko Group's net sales fell by 10.7% to EUR 72.5 million
(EUR 81.1 million). Operating profit fell to EUR 6.3 million (EUR 10.0 million).
Operating profit without non-recurring items amounted to EUR 6.8 million
(EUR 10.0 million). Profit after taxes for the financial year was EUR 4.7
million (EUR 7.4 million) and earnings per share were EUR 0.59 (EUR 0.92). Cash
flow from operating activities was EUR 9.9 million (EUR 8.0 million). The Board
of Directors will propose to the Annual General Meeting that a dividend of
EUR 0.45 (EUR 0.55) per share be paid for 2009. The Marimekko Group's net sales
and operating profit for 2010 are expected to be approximately at the same level
as in 2009.
1-12/ 1-12/ Change,
2009 2008 %
Net sales, EUR 1,000 72,473 81,107 -10.7
Share of exports and international
operations, % of net sales 27.3 27.0
Operating profit, EUR 1,000 6,291 9,956 -36.8
Operating profit without
non-recurring items, EUR 1,000 6,803 9,956 -31.7
Profit before taxes, EUR 1,000 6,354 9,964 -36.2
Profit for the financial year,
EUR 1,000 4,701 7,378 -36.3
Earnings per share, EUR 0.59 0.92 -35.9
Equity per share, EUR 3.96 3.92 1.0
Return on equity (ROE), % 14.8 24.2
Return on investment (ROI), % 20.1 32.3
Equity ratio, % 77.7 78.7
Mika Ihamuotila, President and CEO:
“The year 2009 was exceptionally challenging for the industry and for Marimekko
as well. The sharp decline in consumer demand decreased our sales both in
Finland and abroad. However, we managed to achieve passable earnings and a
strong cash flow. In the last quarter of 2009, our operating result improved
clearly on the previous year. Full-year earnings were adversely affected by
non-recurring expenses related to personnel reductions and the fact that royalty
income and revenues from promotions were lower than the year before. We adjusted
our operations to the reduced demand, and the decrease in profitability slowed
down. We are confident that the implemented reorganisation of functions and
enhanced efficiency of operations will improve our chances for growth in the
coming years.
Despite the difficult market conditions, we purposefully guided the company
forward in the direction set by our long-term strategy. In 2009, six new
Marimekko concept stores opened abroad: five in Japan and one in Copenhagen,
Denmark. Marimekko acquired the ownership of the London concept store in April.
The Marimekko shops in Stockholm and the Helsinki-Vantaa airport were
refurbished and expanded, and one of the two Tampere shops moved to new
premises. We complemented our collections with new product categories, and
successfully launched new products where our own product design is combined with
Marimekko's renowned, powerful patterns.
Some weak signs of a turn for the better are visible, but we expect the market
conditions to remain challenging this year as well. Nevertheless, we will
continue our long-term input into product development and building international
growth. In geographical terms, we will mainly focus on countries where our brand
is already well-known. We are also planning to explore some new market areas. I
would like to thank our loyal customers for the support we have received and our
staff for doing an excellent job in extremely challenging market conditions.”
Financial calendar 2010
The Annual Report for 2009 will be published in week 12. The Annual General
Meeting will be held on Thursday, 15 April 2010 at 2 p.m. The following interim
reports will be published in 2010: January to March, on Thursday 6 May 2010 at
9 a.m.; January to June, on Thursday 12 August 2010 at 9 a.m.; and January to
September, on Thursday 4 November 2010 at 9 a.m.
Annual summary 2009 and releases
A summary of Marimekko's stock exchange releases and other significant releases
published during the financial year 2009 is available on the company's website
at www.marimekko.com, in the section Investors/Financial Releases/Summary of
Significant Releases. All of the company's stock exchange releases are available
in the section Investors/Releases.
For additional information, please contact:
Mika Ihamuotila, President and CEO, tel. +358 9 758 71
Thomas Ekström, CFO, tel. +358 9 758 7261
MARIMEKKO CORPORATION
Group Communications
Piia Pakarinen
Tel. +358 9 758 7293
Fax +358 9 755 3051
E-mail: piia.pakarinen@marimekko.fi
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Principal media
Marimekko's website www.marimekko.com
Marimekko, established in 1951, is a leading Finnish textile and clothing design
company renowned for its original prints and colours. The company designs and
manufactures high-quality clothing, interior textiles, bags and other
accessories. Marimekko products are sold in over 40 countries. Products with
Marimekko designs are also manufactured under licence in various countries. In
2009, the company's net sales amounted to EUR 72.5 million, of which exports and
international operations accounted for 27.3%. The Group employs about 370
people. The company's share is quoted on the NASDAQ OMX Helsinki Ltd.
MARIMEKKO CORPORATION'S FINANCIAL STATEMENT BULLETIN,
1 January - 31 December 2009
MARKET SITUATION
The first signs of a change in the world economy were seen towards the end of
2009. In Finland, the outlook for the whole economy was still cautious, but an
end to the downtrend and an upward turn in retail sales were visible.
(Confederation of Finnish Industries EK: Business Tendency Survey, November
2009 and Economic Review, 21 January 2010). Consumers' confidence in the Finnish
economy was stronger than average in January, but people still felt insecure
about their own employment prospects. (Statistics Finland: Consumer Barometer,
January 2010). In 2009, the value of retail sales in Finland fell by 2.6%
(Statistics Finland: Retail trade quick estimate, December 2009). From January
to November 2009, retail sales of clothing (excluding sportswear) fell by 2.6%
(Textile and Fashion Industries TMA). Sales of womenswear fell by 1.8%, sales of
menswear by 5.0%, and sales of childrenswear by 1.2%. Sales of bags decreased by
10.0%. In the January-November period of 2009, exports of clothing (SITC 84)
fell by 17% and imports by 10%; exports of textiles (SITC 65) declined by 24%
and imports by 23% (National Board of Customs, monthly review, November 2009).
NET SALES
Financial year 2009
In 2009, the Marimekko Group's net sales decreased by 10.7% to EUR 72,473
thousand (EUR 81,107 thousand). Net sales in Finland fell by 10.9% to EUR 52,711
thousand (EUR 59,175 thousand). Exports and income from international operations
declined by 9.9%, totalling EUR 19,762 thousand (EUR 21,932 thousand). Exports
and income from international operations accounted for 27.3% (27.0%) of the
Group's net sales. The fall in net sales was largely due to a slowdown in demand
caused by weak market conditions. Wholesale sales both in Finland and abroad
were especially affected by the slowdown. The difference to the comparison
period was also increased by income from sales of licensed products and revenues
from individual promotions that were larger in 2008 than in the year under
review. The six new concept stores that opened during the year increased
wholesale sales abroad.
The breakdown of the Group's net sales by product line was as follows: clothing
37.9%, interior decoration 45.1%, and bags 17.0%. Net sales by market area were:
Finland 72.7%, the other Nordic countries 9.7%, the rest of Europe 6.7%, North
America 4.1%, and other countries (Japan and other regions outside Europe and
North America) 6.8%.
In 2009, sales by Marimekko's own retail shops in Finland fell by 1.4% compared
with 2008. Sales to retailers in Finland declined by 13.9%; the decrease was
partly attributable to significant deliveries for promotions in 2008, larger
than orders for promotions during the year under review.
4Q of 2009
In the October-December period of 2009, the Marimekko Group's net sales fell by
6.1% to EUR 20,719 thousand (EUR 22,061 thousand). In Finland, net sales
declined by 6.9% to EUR 16,538 thousand (EUR 17,762 thousand). Deliveries for
promotions were at the level of the previous year. Exports and income from
international operations fell by 2.7%, totalling EUR 4,181 thousand (EUR 4,299
thousand). The six new concept stores that opened during the year increased
foreign wholesale sales for the period.
REVIEWS BY BUSINESS UNIT
Clothing
In 2009, net sales of clothing decreased by 8.1% to EUR 27,466 thousand
(EUR 29,898 thousand). Japan showed vigorous growth, and sales also increased
slightly in the market area referred to as “the rest of Europe”. In Finland,
sales fell somewhat. Sales decreased notably in North America and in the market
area referred to as “the other Nordic countries”, where the fall was partly
attributable to the significant income from sales of licensed products that was
recognised in the second quarter of 2008. Exports and income from international
operations accounted for 23.1% of net sales of clothing.
Interior decoration
Net sales of interior decoration products fell by 13.4% to EUR 32,687 thousand
(EUR 37,747 thousand). Sales in Japan grew, while other export markets and
Finland registered a decline in sales. In Finland, the decrease was partly due
to the fact that revenues from individual promotions were larger in 2008 than in
the year under review. Exports and income from international operations
accounted for 29.5% of net sales of interior decoration products.
Bags
Net sales of bags fell by 8.5% to EUR 12,320 thousand (EUR 13,462 thousand).
Sales grew well in Japan and the market area referred to as “the rest of
Europe”. In North America and the market area referred to as “the other Nordic
countries”, sales declined substantially. Sales in Finland fell somewhat; the
decrease was almost entirely attributable to income from a significant promotion
in 2008. Exports and income from international operations accounted for 30.7% of
net sales of bags.
Business-to-business sales
Business-to-business sales fell by 51.2%. The decrease was partly due to
significant deliveries for promotions in 2008, larger than orders for promotions
during the year under review. In addition, the poor economic conditions in 2009
significantly reduced purchases by corporate customers.
Exports and international operations
Uncertain economic conditions prevailed in 2009. Consumer demand decreased, and
customers were cautious about making purchases. A slight recovery was
perceptible towards the end of the year, but the hoped-for turn for the better
was not realised. In 2009, Marimekko's exports and income from international
operations decreased by 9.9%, totalling EUR 19,762 thousand (EUR 21,932
thousand). Sales trends varied greatly by country. Japan showed vigorous growth,
while sales increased slightly in the market area referred to as “the rest of
Europe”. In other export markets, sales fell markedly. The major countries for
exports were Japan, Sweden, the United States, Denmark and Germany.
In the market area referred to as “the other Nordic countries”, sales in all
product lines decreased considerably. Net sales fell to EUR 7,042 thousand,
which was 25.3% less than the previous year (EUR 9,423 thousand). In addition to
a decrease in sales volumes, the weakening of the Swedish krona (by about 20%)
as well as significant income generated from sales of licensed products in the
second quarter of 2008 contributed to the fall in net sales.
In the market area referred to as “the rest of Europe”, net sales rose by 2.6%
to EUR 4,821 thousand (EUR 4,700 thousand). Sales of bags showed good growth;
clothing sales grew slightly. Sales of interior decoration products fell
somewhat. The growth in net sales was attributable to the transfer of the
Marimekko shop in London to Marimekko's ownership.
In North America, net sales fell by 24.8% to EUR 3,003 thousand (EUR 3,994
thousand). Bag and clothing sales declined very sharply; sales of interior
decoration products fell slightly.
In the market area referred to as “other countries”, net sales rose by 28.3% to
EUR 4,896 thousand (EUR 3,815 thousand). The growth was generated by Japan,
mainly by the five new concept stores opened during the year. Sales of clothing
and bags, in particular, grew extremely vigorously. At the end of the year,
there were a total of twenty Marimekko concept stores and shop-in-shops in
Japan.
Licensing
Royalty earnings from sales of licensed products fell considerably during 2009.
The fall was mainly due to significant income from licensing cooperation with H
& M Hennes & Mauritz AB, recognised in the second quarter of 2008. Royalty
earnings grew somewhat in Finland and fell slightly in the United States.
Production and sourcing
The output of the Herttoniemi textile printing factory decreased by 21% in 2009.
This was due to the reduction of inventories and a decrease in sales. After the
old printing machine was taken out of use in June, production capacity
diminished and was in full use. To ensure employment, subcontract manufacture of
some products was reduced and their production transferred to the Kitee and
Sulkava factories. The changes to the production structure and the personnel
reductions implemented during the last quarter of the year improved the
competitiveness of Marimekko's own production units and the profitability of
operations. In 2009, the production volume of the Sulkava factory was at the
same level as in the previous year; the output of the Kitee factory fell
slightly.
EARNINGS
Financial year 2009
In 2009, the Group's operating profit fell by 36.8% to EUR 6,291 thousand
(EUR 9,956 thousand). Operating profit as a percentage of net sales amounted to
8.7% (12.3%). Operating profit includes a non-recurring expense of EUR 512
thousand related to personnel reductions resulting from savings and efficiency
actions. Operating profit without non-recurring items stood at EUR 6,803
thousand (EUR 9,956 thousand).
Operating profit was decreased by a sharp decline in sales. The difference to
the comparison period was also increased by significant income from sales of
licensed products in the previous year and the fact that revenues from
individual promotions were larger in 2008 than in the year under review.
Furthermore, increased lease expenses from shops had a negative impact on
profitability. On the other hand, savings of about EUR 600 thousand in fixed
costs were achieved through efficiency enhancements and various savings actions.
The Group's marketing expenses for the year totalled EUR 3,137 thousand
(EUR 3,398 thousand), representing 4.3% (4.2%) of net sales.
The Group's depreciation amounted to EUR 1,394 thousand (EUR 1,324 thousand),
representing 1.9% (1.6%) of net sales. Net financial income totalled EUR 63
thousand (EUR 8 thousand), or 0.1% (0.0%) of net sales.
Profit after taxes for the financial year decreased by 36.3% to EUR 4,701
thousand (EUR 7,378 thousand), representing 6.5% (9.1%) of net sales. Earnings
per share were EUR 0.59 (EUR 0.92).
4Q of 2009
In the October-December period of 2009, the Marimekko Group's operating profit
grew by 27.5% on the comparison period, amounting to EUR 2,353 thousand
(EUR 1,845 thousand). Revenues from promotions were at the same level as in the
previous year. As a result of efficiency enhancement actions and various savings
measures, costs declined from the corresponding period of 2008. Earnings were
also improved due to the fact that, in the last quarter of 2008, the rapid
decline in market conditions was already visible as a sharp fall in sales in
Finland and abroad. Earnings per share were EUR 0.22 (EUR 0.17).
INVESTMENTS
The Group's gross investments amounted to EUR 1,202 thousand (EUR 1,362
thousand), representing 1.7% (1.7%) of net sales. The majority of investments
were directed at the refurbishment of shops and the renovation of the
Herttoniemi facilities.
EQUITY RATIO AND FINANCING
The Group's equity ratio was 77.7% at the end of the period (78.7% on
31 December 2008). The ratio of interest-bearing liabilities minus financial
assets to shareholders' equity (gearing) was -32.2%, while it was -18.8% at the
end of the previous year.
At the end of the year, the Group's financial liabilities stood at EUR 0
(EUR 185 thousand). The Group's financial assets at the end of the financial
year amounted to EUR 10,245 thousand (EUR 6,112 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 6,716 (6,351) shareholders
at the end of the period. Of the shares, 13.8% were registered in a nominee's
name and 18.0% were in foreign ownership. At the end of 2009, the number of
shares owned either directly or indirectly by members of the Board of Directors
and the President of the company was 1,087,340, representing 13.5% of the total
share capital and of the votes conferred by the company's shares.
The largest shareholders according to the book-entry register on 31 December
2009
Number of Percentage of
shares and holding and
votes votes
1. Muotitila Ltd 1,045,200 13.00
2. Semerca Investment Ltd 850,377 10.58
3. ODIN Finland 406,284 5.05
4. Varma Mutual Employment
Pension Insurance Company 385,920 4.80
5. Ilmarinen Mutual
Pension Insurance Company 265,419 3.30
6. Veritas Pension Insurance Company 220,000 2.74
7. Nordea Nordenfonden 173,506 2.16
8. Sairanen Seppo 71,379 0.89
9. Nacawi Ab 60,300 0.75
10. Mutual Fund Tapiola Finland 57,455 0.71
11. Foundation for Economic Education 50,000 0.62
12. Scanmagnetics Oy 40,000 0.50
13. Nordea Nordic Small Cap Fund 38,904 0.48
14. Haapanala Auvo 33,000 0.41
15. Fromond Elsa 32,200 0.40
Total 3,729,944 46.39
Nominee-registered 1,105,593 13.75
Others 3,204,463 39.86
Total 8,040,000 100.00
Flaggings
The share of Workidea Oy, a company controlled by Kirsti Paakkanen, of Marimekko
Corporation's share capital and voting rights decreased to 0.00%, or 0 shares,
as a result of a transaction made on 8 January 2009.
As a result of a transaction made on 8 April 2009, Barclays Capital Securities
Limited's share of Marimekko Corporation's share capital and voting rights rose
to 6.09%, or 490,00 shares; and then fell to 0.00%, or 0 shares, as a result of
a transaction made on 14 April 2009.
Fautor S.P.R.L's share of Marimekko Corporation's share capital and voting
rights fell to 0.00%, or 0 shares, as a result of a transaction concluded on
18 June 2009. Semerca Investments S.A.'s share of Marimekko Corporation's share
capital and voting rights rose to 10.58%, or 850,377 shares, as a result of a
transaction concluded on 18 June 2009. According to Marimekko Corporation's
knowledge, Semerca Investments S.A. is the parent company of Fautor S.P.R.L.
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
In 2009, a total of 1,620,304 Marimekko shares were traded, representing 20.2%
of the shares outstanding. The total value of Marimekko's share turnover was
EUR 15,104,869. The lowest price of the Marimekko share was EUR 7.50, the
highest was EUR 11.44, and the average price was EUR 9.70. At the end of the
year, the final price of the share was EUR 10.30. The company's market
capitalisation on 31 December 2009 was EUR 82,812,000 (EUR 67,134,000 on
31 December 2008).
PERSONNEL
In 2009, the number of employees averaged 400 (411). At the end of the year, the
Group employed 370 (414) people, of whom 17 (16) worked abroad.
RISK MANAGEMENT AND MAJOR RISKS
Risk management is an integral element of the company's management and
decision-making process, covering all of the Group's functions. Risk
identification builds on Marimekko's strategic and operational objectives. The
company's Board of Directors has confirmed the principles, responsibilities and
organisation of risk management. The Board of Directors also monitors the
success of risk management. According to its risk management principles,
Marimekko classifies its risks as strategic, operational, economic and accident
risks. Risk reporting is part of the company's regular reporting.
The risk factors described below may have a harmful impact on the company's
shareholder value, business, or financial standing. However, other risks which
Marimekko is currently not aware of or which are not currently considered major,
may become significant in the future.
Key strategic risks assessed by Marimekko are associated with the general
economic development and the consequent increased uncertainty in the operating
environment. Trends in the world economy affect consumers' purchasing behaviour
and buying power in all of the company's market areas. The decline in consumer
demand has affected sales trends, which has an adverse impact on the company's
growth and earnings outlook. Marimekko is going through a phase of intensive
change and the company has a number of development projects in progress. In
2009, the company's functions were reorganised and the efficiency of its
operations was enhanced. There were personnel changes in Marimekko's executive
management, as well as in areas of core expertise with key significance to the
company's business. The company's ability to develop and commercialise new
products that meet consumers' expectations has an impact on the company's sales
and profitability. The management and monitoring of change and ensuring
sufficient core expertise are emphasised in risk management.
Among the company's operational risks, the key factor is the operational
reliability of procurement and logistics processes. The share of in-house
production has diminished, and Marimekko uses subcontractors to an increasing
extent. Therefore, the company's dependence on the supply chain has increased.
Any delays or disturbances in supply may have a temporary harmful impact on
business. In 2009, the company conducted a procurement process risk analysis
aimed at identifying key risk areas from the perspective of the efficiency of
operations, the correctness of financial reporting, compliance with laws and
regulations, and prevention of malpractice. Control points and responsibilities
were determined in order to take notice of any realisation of risks and to take
preventive action. Risks are managed by improving the disturbance tolerance of
the procurement process and by training purchasing staff. The company is
continuously developing the availability of key products and alternative
procurement channels, the operational efficiency of procurement, the competence
of the purchasing staff and the comprehensiveness and functionality of
reporting.
Among the company's financial risks, those related to the structure of sales,
the price trends for factors of production, customers' liquidity and changes in
exchange rates may have an impact on the company's financial status. A number of
raw materials are used to manufacture Marimekko products, the most important
being cotton. Sudden changes in the prices of raw materials may have an impact
on the company's earnings. The company protects itself against credit risks
related to trade receivables by continuously monitoring its customers' credit
limits, credit history and financial situation. Credit risks are also reduced by
means of advance payments, bank guarantees and letters of credit. In 2009, no
significant changes took place in credit losses or the customers' payment
behaviour. The company's main invoicing and purchasing currency is the euro. The
other significant invoicing currencies are the Swedish krona and the US dollar.
Marimekko protects itself against foreign currency risks of sales by taking
exchange rate fluctuations into account when pricing its products. In 2009,
changes in exchange rates did not have any material effect on the company's
business. In 2009, Marimekko identified and assessed risk areas related to the
Group's financial reporting process, in particular. Control objectives and
Group-level control points were defined for the risks identified. In order to
avoid the realisation of risks, the company has enhanced the effectiveness of
business activity monitoring and especially that of cost management.
The company strives to minimise its accident risks by means of labour protection
and security training, as well as operating procedures concerning work and
working methods. Group companies have taken out policies to insure their
personnel, assets and operations. The scope, insurance value and excess amount
of the policies are reviewed annually with the insurance companies.
RESEARCH AND DEVELOPMENT
Marimekko's product planning and development costs arise from the design of
collections. Design costs are recorded in expenses.
THE ENVIRONMENT, HEALTH AND SAFETY
Responsibility for the environment and nature is an integral aspect of
Marimekko's business. In environmental matters, the company's business
supervision is largely based on legislation and other regulations. The
Herttoniemi textile printing factory has a valid environmental permit and the
production operations comply with its terms. Marimekko's production processes do
not generate any waste that is classified as hazardous or detrimental to health.
In the interest of monitoring the environmental impact of production and other
business operations, the company develops its operating models and conducts
regular tests on the materials used in the products. Cooperation agreements
require Marimekko's subcontractors and other partners to commit themselves to
shouldering their environmental responsibilities. The company seeks to save
energy by developing its production methods, investing in energy-efficient
machinery and equipment, and monitoring energy consumption.
In 2009, Marimekko continued the long-term development of a corporate social
responsibility management system. The company has chosen procurement, design,
production and quality control, warehousing, distribution and logistics as the
key areas for the next few years. Marimekko's Annual Report contains a more
extensive report on environmental, health and safety issues. A summary is also
included in each interim report. The Group applies the Global Reporting
Initiative (GRI) reporting framework's G3 guidelines.
A SUBSIDIARY AND A COMPANY-OWNED SHOP IN GREAT BRITAIN
The business of the Marimekko shop in London was acquired from Skandium Ltd on
1 April 2009. The shop's operations are managed by Marimekko UK Ltd, a
subsidiary established in the United Kingdom at the end of March 2009.
DECISIONS OF THE ANNUAL GENERAL MEETING
Marimekko Corporation's Annual General Meeting, held on 8 April 2009, adopted
the company's financial statements for 2008 and discharged the President and
members of the Board from liability. The Annual General Meeting approved the
Board of Directors' proposal for a dividend payment of EUR 0.55 per share for
the 2008 financial year, totalling EUR 4,422,000.00. The dividend payout record
date was 15 April 2009, and the dividend payout date 22 April 2009.
The Annual General Meeting confirmed that the company's Board of Directors shall
have five (5) members. Ami Hasan, Mika Ihamuotila, Joakim Karske, Pekka
Lundmark, and Tarja Pääkkönen were re-elected as members of the Board of
Directors. The term of office for the Board of Directors runs until the end of
the next Annual General Meeting. 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 Annual General Meeting re-elected PricewaterhouseCoopers Oy, Authorised
Public Accountants, as the company's regular auditor, with Kim Karhu, Authorised
Public Accountant, as chief auditor. It was decided that the auditor's fee would
be paid as per invoice.
Amendment of the Articles of Association
The Annual General Meeting approved the Board of Directors' proposal to amend
the Articles 3, 4, 5, 6, 8, 9, 11, 12 and 13 of Marimekko Corporation's Articles
of Association. The amendments have been detailed in the Notice of the Annual
General Meeting published on 16 March 2009. The Articles of Association approved
at the Annual General Meeting are appended to the stock exchange release dated 8
April 2009.
CHANGES IN THE COMPANY'S MANAGEMENT
Malin Groop, Marimekko's Marketing Manager, was appointed as the Group's
Marketing Director and member of the Management Group as of 1 August 2009. Marja
Korkeela, Head of Group Communications and Investor Relations and member of the
Management Group, left the company on 31 August 2009. Mervi
Metsänen-Kalliovaara, Marimekko's Sales Director and member of the Management
Group, left the company on 7 October 2009. As of 7 October 2009, the Marimekko
Group's Management Group comprised Mika Ihamuotila as Chairman and Thomas
Ekström (finance, administration and investor relations), Malin Groop
(marketing), Päivi Lonka (international sales), Niina Nenonen (clothing, bags
and accessories), Piia Rossi (company-owned retail shops in Finland), and Helinä
Uotila (production, purchases and interior decoration) as members.
EFFICIENCY ENHANCEMENT AND STATUTORY EMPLOYER-EMPLOYEE NEGOTIATIONS REGARDING
OPERATIONS IN FINLAND
On 13 August 2009, Marimekko announced the start of Group-wide statutory
employer-employee negotiations regarding possible temporary lay-offs and a
permanent reduction in the number of employees in Finland. The maximum number of
permanent reductions was not expected to exceed 35 employees. The aim of the
negotiations was to adapt the company's cost structure to the rapidly
deteriorating market situation and improve the company's ability to develop its
operations as well as safeguard the conditions for the stable development of the
company.
On 7 October 2009, Marimekko announced that its Group-wide statutory
employer-employee negotiations had been completed. The company stated that
reorganisation of functions and rationalisation of operations would result in
the elimination of 35 positions. In addition, the company announced a need to
fill eight new positions; as far as possible, these positions would be filled by
internal transfers. The annual costs of the new positions were estimated at
about EUR 0.4 million. Temporary layoffs were rejected for the rest of 2009, but
the decision was made to prepare for them in certain functions until 31 May
2010. Subsequently, temporary lay-offs were also rejected for the spring of
2010. The personnel cutbacks and other measures to be taken are expected to
bring annual cost savings of approximately EUR 1.5 million in total. In
connection with the personnel reductions, the company recognised a non-recurring
cost provision of EUR 0.5 million in the third quarter of 2009.
THE BOARD OF DIRECTORS' PROPOSAL FOR THE DIVIDEND FOR THE 2009 FINANCIAL YEAR
A dividend of EUR 0.55 per share was paid for 2008 to a total of EUR 4,422,000.
The Board of Directors will propose to the Annual General Meeting that a
dividend of EUR 0.45 per share be paid for 2009. The proposed dividends
represent 76.3% of the Group's earnings per share for the financial year. On
31 December 2009, the parent company's distributable funds amounted to
EUR 19,982,129. The Board will propose 20 April 2010 as the dividend record
date, and 27 April 2010 as the dividend payout date.
OUTLOOK FOR 2010
Marimekko Corporation operates in a field where economic trends affect its
business activities. In the last quarter of 2009, some positive signs were
visible in the trend in Marimekko's sales. However, challenging market
conditions are anticipated to continue in 2010.
The majority of the Group's net sales are generated in Finland. In recent years,
however, exports have increasingly been driving Marimekko's net sales growth. In
2009, a clearly positive sales trend was seen only in Japan, where a significant
part of growth was based on new concept store openings. In 2010, Marimekko's
exports are estimated to grow slightly. In 2009, the Group's net sales and
earnings included significant revenues generated from individual promotions. In
2010, similar revenues that increase net sales and improve earnings are
estimated to be lower.
The Marimekko Group's net sales and operating profit for 2010 are expected to be
approximately at the same level as in 2009.
Helsinki, 3 February 2010
MARIMEKKO CORPORATION
Board of Directors
Information presented in the financial statement bulletin is unaudited.
APPENDICES
Accounting principles
Consolidated income statement and comprehensive 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
Accounting principles
This financial statement bulletin has been prepared in accordance with IAS 34:
Interim Financial Reporting and applying the same accounting policy as for the
2008 financial statements. In addition, on 1 January 2009 the Group adopted the
following new or amended standards published by the IASB in 2008:
IAS 1 standard (amended)
In accordance with the amended IAS 1 standard, Marimekko Corporation presents
both the consolidated and comprehensive consolidated income statements.
IFRS 8
The operational segment reported by the Marimekko Group is the Marimekko
business.
FORMULAS FOR THE KEY FIGURES
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, 31 December
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
CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 10-12/ 10-12/ 1-12/ 1-12/
2009 2008 2009 2008
NET SALES 20,719 22,061 72,473 81,107
Other operating income 6 203 41 244
Increase or decrease in
inventories of completed
and unfinished products 739 -1,851 2,135 185
Raw materials and consumables 7,678 8,097 26,890 33,597
Employee benefit expenses 4,660 5,133 18,202 18,287
Depreciation 363 341 1,394 1,324
Other operating expenses 4,932 4,997 17,602 18,372
OPERATING PROFIT 2,353 1,845 6,291 9,956
Financial income 26 52 86 205
Financial expenses -10 -57 -23 -197
16 -5 63 8
PROFIT BEFORE TAXES 2,369 1,840 6,354 9,964
Income taxes 630 474 1,653 2,586
NET INCOME FOR THE PERIOD 1,739 1,366 4,701 7,378
Distribution of net income to
equity holders of the parent
company 1,739 1,366 4,701 7,378
Basic and diluted earnings
per share calculated on the
profit attributable to equity
holders of the parent
company, EUR 0.22 0.17 0.59 0.92
COMPREHENSIVE CONSOLIDATED INCOME STATEMENT
(EUR 1,000) 10-12/ 10-12/ 1-12/ 1-12/
2009 2008 2009 2008
Net income for the period 1,739 1,366 4,701 7,378
Other comprehensive income
Change in translation
difference 13 -19 4 -5
TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD 1,752 1,347 4,705 7,373
Distribution of net income
to equity holders of
the parent company 1,752 1,347 4,705 7,373
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 31.12.2009 31.12.2008
ASSETS
NON-CURRENT ASSETS
Tangible assets 9,805 9,948
Intangible assets 409 458
Available-for-sale financial assets 20 20
10,234 10,426
CURRENT ASSETS
Inventories 15,229 17,286
Trade and other receivables 5,241 6,109
Current tax assets 18 268
Cash and cash equivalents 10,245 6,112
30,733 29,775
ASSETS, TOTAL 40,967 40,201
SHAREHOLDERS' EQUITY AND LIABILITIES
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT COMPANY
Share capital 8,040 8,040
Translation differences 2 -2
Retained earnings 23,783 23,504
Shareholders' equity, total 31,825 31,542
NON-CURRENT LIABILITIES
Deferred tax liabilities 683 705
Financial liabilities - -
683 705
CURRENT LIABILITIES
Trade and other payables 7,874 7,751
Current tax liabilities 585 18
Financial liabilities - 185
8,459 7,954
Liabilities, total 9,142 8,659
SHAREHOLDERS' EQUITY AND LIABILITIES, TOTAL 40,967 40,201
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) 2009 2008
CASH FLOW FROM OPERATING ACTIVITIES
Net profit for the period 4,701 7,378
Adjustments
Depreciation according to plan 1,394 1,324
Financial income and expenses -63 -8
Taxes 1,653 2,586
Cash flow before change in working capital 7,685 11,280
Change in working capital
Increase (-) / decrease (+) in current
non-interest-bearing trade receivables 834 -574
Increase (-) / decrease (+) in inventories 2,055 995
Increase (-) / decrease in current
non-interest-bearing liabilities 108 -1,050
Cash flow from operating activities before
financial items and taxes 10,682 10,651
Paid interest and payments
on other operational financial expenses -24 -200
Interest received 120 201
Taxes paid -837 -2,616
CASH FLOW FROM OPERATING ACTIVITIES 9,941 8,036
CASH FLOW FROM INVESTING ACTIVITIES
Investments in tangible
and intangible assets -1,202 -1,362
CASH FLOW FROM INVESTING ACTIVITIES -1,202 -1,362
CASH FLOW FROM FINANCING ACTIVITIES
Short-term loans drawn - 4,600
Short-term loans repaid -185 -5,550
Long-term loans repaid - -655
Dividends paid -4,422 -5,226
CASH FLOW FROM FINANCING ACTIVITIES -4,607 -6,831
Change in cash and cash equivalents 4,133 -157
Cash and cash equivalents
at the beginning of the period 6,112
6,269
Cash and cash equivalents
at the end of the period 10,245
6,112
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(EUR 1,000)
Equity attributable to equity holders of the parent company
Shareholders'
Share Translation Retained equity,
capital differences earnings total
Shareholders'
equity
1 Jan. 2008 8,040 3 21,352 29,395
Comprehensive
income for the
period -5 7,378 7,373
Dividends paid -5,226 -5,226
Shareholders'
equity
31 Dec. 2008 8,040 -2 23,504 31,542
Shareholders'
equity
1 Jan. 2009 8,040 -2 23,504 31,542
Comprehensive
income for the
period 4 4,701 4,705
Dividends paid -4,422 -4,422
Shareholders'
equity
31 Dec. 2009 8,040 2 23,783 31,825
KEY INDICATORS
2009 2008 Change, %
Earnings per share, EUR 0.59 0.92 -35.9
Equity per share, EUR 3.96 3.92 1.0
Share of exports and income from
international operations,
% of net sales 27.3 27.0
Return on equity (ROE), % 14.8 24.2
Return on investment (ROI), % 20.1 32.3
Equity ratio, % 77.7 78.7
Gearing, % -32.2 -18.8
Gross investments, EUR 1,000 1,202 1,362 -11.8
Gross investments, % of net sales 1.7 1.7
Contingent liabilities, EUR 1,000 11,819 17,861 -33.8
Average personnel 400 411 -2.7
Personnel at the end of the period 370 414 -10.6
Number of shares at the end
of the period (1,000) 8,040 8,040
Number of shares outstanding,
average (1,000) 8,040 8,040
NET SALES BY MARKET AREA
(EUR 1,000) 10-12/ 10-12/ Change, 1-12/ 1-12/ Change,
2009 2008 % 2009 2008 %
Finland 16,538 17,762 -6.9 52,711 59,175 -10.9
Other Nordic
countries 1,725 1,614 6.9 7,042 9,423 -25.3
Rest of Europe 978 933 4.8 4,821 4,700 2.6
North America 694 1,117 -37.9 3,003 3,994 -24.8
Other countries 784 635 23.5 4,896 3,815 28.3
TOTAL 20,719 22,061 -6.1 72,473 81,107 -10.7
NET SALES BY PRODUCT LINE
(EUR 1,000) 10-12/ 10-12/ Change, 1-12/ 1-12/ Change,
2009 2008 % 2009 2008 %
Clothing 6,213 6,531 -4.9 27,466 29,898 -8.1
Interior
decoration 11,658 12,935 -9.9 32,687 37,747 -13.4
Bags 2,848 2,595 9.7 12,320 13,462 -8.5
TOTAL 20,719 22,061 -6.1 72,473 81,107 -10.7
SEGMENT INFORMATION
(EUR 1,000) 2009 2008 Change, %
Marimekko business
Net sales 72,473 81,107 -10.7
Operating result 6,291 9,956 -36.8
Assets 40,967 40,201 1.9
QUARTERLY TREND IN NET SALES AND EARNINGS
(EUR 1,000) 10-12/ 7-9/ 4-6/ 1-3/
2009 2009 2009 2009
Net sales 20,719 19,492 15,999 16,263
Operating result 2,353 2,901 1,058 -21
Earnings per share, EUR 0.22 0.27 0.10 0.00
(EUR 1,000) 10-12/ 7-9/ 4-6/ 1-3/
2008 2008 2008 2008
Net sales 22,061 21,913 18,539 18,594
Operating result 1,845 3,747 2,540 1,824
Earnings per share, EUR 0.17 0.35 0.23 0.17
MARIMEKKO CORPORATION'S FINANCIAL STATEMENT BULLETIN, 1 January - 31 December 2009
| Source: Marimekko Oyj
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