In the January-March period, the Marimekko Group's net sales rose by 5% to EUR
16.9 million (EUR 16.2 million). Operating profit increased by 3% to EUR 1.5
million (EUR 1.5 million). Profit after taxes for the period grew by 5% to EUR
1.1 million (EUR 1.1 million). Earnings per share rose to EUR 0.14 (EUR 0.13).
The estimate for the remainder of 2007 is unchanged. Full-year net sales growth
for 2007 is forecast to stay at the same level as in 2006. Profitability is
expected to remain good. The Group racks up its strongest earnings and net sales
growth in the last two quarters of the financial year.
MARKET SITUATION
Brisk growth in the world economy continued during the first quarter of 2007.
Economic trends were favourable in all of Marimekko's key markets. In Finland,
consumers' confidence in their own finances remained strong and maintained a
high level of consumption demand. In the January-February period of 2007, retail
sales in Finland were up 6.3% (Statistics Finland, Wholesale and retail sales,
February 2007). Retail sales of clothing increased by 2.7% (Association of
Textile and Footwear Importers and Wholesalers). Sales of womenswear rose by
2.6%, menswear by 4.7%, and childrenswear by 2.6%. Sales of bags increased by
8.0%. Exports of textile products (SITC 65) rose by 5%, while imports fell by
5%. Exports of clothing (SITC 84) increased by 2%, and imports declined by 3%
(National Board of Customs, monthly review, February/2007).
NET SALES
In the January-March period of 2007, the Marimekko Group's net sales rose by
4.6% to EUR 16,912 thousand (EUR 16,174 thousand). Net sales in Finland fell by
3.6% to EUR 11,609 thousand (EUR 12,044 thousand). The Group's exports and
income from international operations increased by 28.4% during the period under
review. Growth was good in all market areas. Exports and income from
international operations totalled EUR 5,303 thousand (EUR 4,130 thousand) and
accounted for an increased proportion of the Group's net sales at 31.4% (25.5%).
The breakdown of the Group's net sales by product line was as follows: clothing,
45.6%, interior decoration, 40.2%, and bags, 14.2%. Net sales by market area
were: Finland, 68.7%, the other Nordic countries, 12.2%, the rest of Europe,
9.2%, North America, 5.3%, and other countries (Japan and other regions outside
Europe and North America), 4.6%.
In the January-March period of 2007, sales in Marimekko's own retail shops in
Finland rose by 0.3% (6.9%). Sales to retailers in Finland fell by 7.0% (+7.8%).
This fall was primarily due to a reduction in retailers' promotional purchases
compared to the corresponding period of the previous year.
REVIEWS BY BUSINESS UNIT
Clothing
In the January-March period of 2007, net sales of clothing rose by 1.3% to EUR
7,708 thousand (EUR 7,606 thousand). Sales fell noticeably in Finland, but
clothing exports grew well in almost all markets. Particularly brisk growth was
seen in the United States and the market area referred to as "the rest of
Europe". Exports and income from international operations accounted for 29.0% of
net sales of clothing.
Interior decoration
Net sales of interior decoration products rose by 2.9% to EUR 6,798 thousand
(EUR 6,609 thousand). Sales in Finland declined, while buoyant growth continued
in export markets. The strongest increase in sales was seen in the market areas
referred to as “other Nordic countries” and “the rest of Europe”. Exports and
income from international operations accounted for 33.1% of net sales of
interior decoration products.
Bags
Net sales of bags increased by 22.8% to EUR 2,406 thousand (EUR 1,959 thousand).
Growth picked up significantly both in Finland and in export markets.
Particularly vigorous sales growth was seen in Japan, the United States and the
market area referred to as "the rest of Europe". Exports and income from
international operations accounted for 33.8% of net sales of bags.
Business gifts and contract sales
Sales of business gifts and contract sales fell by 7.4%.
Exports and international operations
In the January-March period of 2007, the Group's exports and income from
international operations rose by 28.4% to EUR 5,303 thousand (EUR 4,130
thousand). Buoyant growth was seen in all key market areas.
A good rate of growth was maintained in the market area referred to as "other
Nordic countries". Net sales rose by 16.2% to EUR 2,069 thousand (EUR 1,780
thousand). Growth was briskest in Norway and Denmark. The greatest increase was
seen in sales of interior decoration products and bags.
Sales in all product lines grew extremely vigorously in the market area referred
to as "the rest of Europe". Net sales rose by 63.0% to EUR 1,563 thousand (EUR
959 thousand). All countries showed a significant pickup in growth.
Sales growth strengthened noticeably in all product lines in North America. Net
sales rose by 40.7% to EUR 899 thousand (EUR 639 thousand). The greatest
increase was seen in sales of clothing and bags. Growth was boosted by the new
Marimekko concept stores opened in 2006.
Net sales rose by 2.7% to EUR 772 thousand (EUR 752 thousand) in the market area
referred to as "other countries", where Japan is the major export country. At
the beginning of March, Marimekko's Japanese distributor Look Inc. opened a
Marimekko concept store in Yokohama, bringing the total number of Marimekko
shops in Japan to eight.
Licensing
Royalty earnings from sales of licensed products were down on the corresponding
period of the previous year. Royalty earnings grew extremely well in Finland,
but fell noticeably in the United States. The termination of licensing
operations in Japan at the end of 2006 also influenced the decline in royalty
earnings.
Production
The production volume of the Herttoniemi textile printing factory increased by
6% on the comparison period. Production volumes at the factories in Kitee and
Sulkava remained at the same level as in the corresponding period of the
previous year.
EARNINGS
During the period under review, the Group's operating profit rose by 3.1% to EUR
1,497 thousand (EUR 1,452 thousand). Operating profit as a percentage of net
sales amounted to 8.9% (9.0%). The Group's marketing expenses for the period
totalled EUR 1,165 thousand (EUR 1,230 thousand), representing 6.9% (7.6%) of
net sales.
The Group's depreciation amounted to EUR 322 thousand (EUR 258 thousand), or
1.9% (1.6%) of net sales. Net financial income totalled EUR 16 thousand (net
financial expenses EUR 10 thousand), representing 0.1% (0.1%) of the Group's net
sales.
The Group's profit after taxes increased by 4.9% to EUR 1,124 thousand (EUR
1,071 thousand), or 6.6% (6.6%) of net sales. Earnings per share rose to EUR
0.14 (EUR 0.13).
INVESTMENTS
The Group's gross investments amounted to EUR 500 thousand (EUR 660 thousand),
representing 3.0% (4.1%) of net sales. The major investments focused on
production equipment renewal at the Herttoniemi textile printing factory and the
construction of new premises for Marimekko's Joensuu shop.
EQUITY RATIO AND FINANCING
Equity ratio was 73.3% at the end of the period (68.3% on 31 March 2006, 70.5%
on 31 December 2006). The ratio of interest-bearing liabilities minus financial
assets to shareholders' equity (gearing) was -4.5%, while it was -3.0% at the
same time in the previous year (-11.7% on 31 December 2006).
At the end of the period, the Group's interest-bearing liabilities amounted to
EUR 2,212 thousand (EUR 3,524 thousand). The Group's financing from operations
was EUR 1,446 thousand (EUR 1,329 thousand) and its financial assets amounted to
EUR 3,482 thousand (EUR 4,271 thousand).
SHARES AND SHARE PRICE TREND
At the end of the review 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. The accounting countervalue of a share is one (1)
euro.
According to the book-entry register, the company had 5,152 registered
shareholders at the end of the review period. 17.7% of the shares were
registered in a nominee's name and 2.3% were in foreign ownership. The number of
shares owned either directly or indirectly by members of the Board of Directors
and the president of the company was 1,657,500, representing 20.6% of the total
votes conferred by the company's shares.
At the end of the review period, the Board of Directors had no valid
authorisations to carry out a share issue or issue of convertible bonds or bonds
with warrants, or to acquire or dispose of the company's shares.
During the January-March period of 2007, a total of 654,557 Marimekko shares
were traded, representing 8.1% of the shares outstanding. The total value of
share turnover was EUR 10,624,887. In the review period, the lowest price of the
Marimekko share was EUR 14.60, the highest was EUR 16.98 and the average price
was EUR 16.23. At the end of the review period, the share price was EUR 16.79
and the company's market capitalisation EUR 134,991,600 (EUR 117,786,000 on 31
December 2006).
PERSONNEL
During the period under review, the number of Group personnel averaged 403
(388). At the end of the period, the Group employed 403 (391) people, of whom 17
(10) worked abroad. Kirsi Räikkönen was appointed the Group's marketing and
development director as of 16 April 2007, when she also became a member of the
management group.
RISK MANAGEMENT AND MAJOR RISKS
The major risks that may affect the company's business are presented in the
company's Annual Report 2006; no changes have occurred during the report period.
MAJOR EVENTS AFTER THE CLOSE OF THE PERIOD
ANNUAL GENERAL MEETING
Marimekko Corporation's Annual General Meeting, held on 12 April 2007, adopted
the company's accounts for 2006 and approved the Board of Directors' proposal
for payment of a dividend for 2006 of EUR 0.65 per share, totalling EUR
5,226,000.00. The record date was 17 April 2007 and the dividend payout date 24
April 2007.
The Annual General Meeting resolved that the Board of Directors shall consist of
three members. Mr Matti Kavetvuo, M.Sc. (Eng.), B.Sc. (Econ.), and Mrs Kirsti
Paakkanen, President, were re-elected and Mrs Tarja Pääkkönen, Ph.D. (Eng.,
Business Strategies), was elected as a new member of the Board of Directors
until the end of the next Annual General Meeting. At its organisation meeting
held after the Annual General Meeting, the Board of Directors elected Matti
Kavetvuo as Chairman of the Board.
The Annual General Meeting also decided that Nexia Tilintarkastus Oy, Authorised
Public Accountants, will continue as regular auditor, with Mr Seppo Tervo,
Authorised Public Accountant, as chief auditor, and Mr Matti Hartikainen,
Authorised Public Accountant, as deputy auditor of the company.
Flagging notifications
Morgan Stanley & Co International Plc's share of Marimekko Corporation's share
capital and voting rights rose to 5.08%, or 408,689 shares, as a result of a
transaction made on 12 April 2007; and then fell to 4.77%, or 383,689 shares, as
a result of a transaction made on 20 April 2007.
Largest shareholders according to the book-entry register
on 30 April 2007
Shareholder Percentage of holding and votes
1. Workidea Oy 20.00
2. Varma Mutual Employment Pension Insurance Company 4.34
3. ODIN Forvaltning AS 2.22
4. SEB Gyllenberg Small Firm 1.52
5. Säästöpankki Kotimaa 1.34
6. Nordea Nordic Small Cap Fund 1.33
7. Evli Select 1.30
8. Nordea Fennia Fund 1.14
9. Neste Oil Eläkesäätiö 1.12
10. Nordea Life Assurance Finland Ltd 1.10
11. Nordea Stable Return Fund 1.04
12. Evli Nordic Dividend 1.01
13. Nordea Pro Finland Fund 0.86
14. Ilmarinen Mutual Pension Insurance Company 0.70
15. Foundation for Economic Education 0.62
Total 39.64
Nominee-registered 17.84
Others 45.52
OUTLOOK FOR THE REMAINDER OF 2007
Strong growth in the world economy is forecast to continue throughout 2007
(ETLA, the Research Institute of the Finnish Economy, “Suhdanne” 1/2007). The
fastest growth will be seen in Asia. The growth outlook for the euro zone is
also favourable thanks to a revival in foreign trade and a pickup in domestic
demand. Growth in total output in the United States is forecast to slow due to
weakened private consumption. Growth in Finland during 2007 is also expected to
be slightly slower than in 2006. Based on the business climate outlook and the
market situation, growth in the Marimekko Group's net sales in 2007 is estimated
to remain at the same level as in 2006. The brisk growth in exports is expected
to continue and the Group's profitability is forecast to remain good. The Group
racks up its strongest earnings and net sales growth in the last two quarters of
the financial year.
Helsinki, 9 May 2007
MARIMEKKO CORPORATION
Board of Directors
The company's interim report for the January-June period of 2007 will be
published on 16 August and the interim report for the January-September period
on 31 October.
For additional information, contact:
Kirsti Paakkanen, President, tel. +358 9 758 71
Thomas Ekström, Chief Financial Officer, tel. +358 9 758 7261
MARIMEKKO CORPORATION
Corporate Communications
Marja Korkeela
Tel. +358 9 758 7238
Fax +358 9 759 1676
Email: marja.korkeela@marimekko.fi
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
Marimekko's stock exchange releases are available on the company's website at
www.marimekko.com under Investors/Stock Exchange Releases.
DISTRIBUTION: Helsinki Stock Exchange
Principal media
Marimekko's web site www.marimekko.com
--------------------
APPENDICES
This interim report has been prepared in accordance with IAS 34: Interim
Financial Reporting. The same accounting policy has been applied as in the 2006
financial statements. In addition, the following new or amended standards and
interpretations have been adopted as from 1 January 2007:
IFRS 7 Financial Instruments: Disclosures. The Group estimates that the adoption
of this standard primarily affects the scope of the notes to the annual
financial statements.
IAS 1 (amended) Presentation of Financial Statements: Capital Disclosures. The
amendment does not affect this interim report.
IFRIC 9 Reassessment of Embedded Derivatives. The application of the
interpretation does not affect this interim report.
IFRIC 10 Interim Financial Reporting and Impairment. The application of the
interpretation does not affect this interim report.
The information presented in this interim report has not been audited.
CONSOLIDATED INCOME STATEMENT
1.1.-31.3. 1.1.-31.3. Change, 1.1.-31.12.
(EUR 1,000) 2007 2006 % 2006
NET SALES 16,912 16,174 4.6 71,424
Other operating income 18 18 0.0 60
Increase or decrease in
inventories of completed
and unfinished products 857 1,535 -44.2 -33
Raw materials and
consumables 4,972 5,568 -10.7 27,868
Employee benefit
expenses 4,046 3,796 6.6 15,407
Depreciation
and impairment 322 258 24.8 1,158
Other operating
expenses 6,950 6,653 4.5 16,154
OPERATING PROFIT 1,497 1,452 3.1 10,864
Financial income 46 30 53.3 124
Financial expenses -30 -40 -25.0 -192
16 -10 -260.0 -68
PROFIT BEFORE TAXES 1,513 1,442 4.9 10,796
Income taxes 389 371 4.9 2,806
NET PROFIT FOR
THE PERIOD 1,124 1,071 4.9 7,990
Distribution
To equity holders of
the parent company 1,124 1,071 7,990
Earnings per share
calculated on the profit
attributable to equity
holders of the parent
company, EUR 0.14 0.13 7.7 1.00
CONSOLIDATED BALANCE SHEET
(EUR 1,000) 31.3.2007 31.3.2006 31.12.2006
ASSETS
NON-CURRENT ASSETS
Tangible assets 10,204 9,116 9,992
Intangible assets 314 329 348
Available-for-sale
investments 20 20 20
10,538 9,465 10,360
CURRENT ASSETS
Inventories 16,767 16,537 16,304
Trade and other receivables 7,457 6,627 5,717
Cash and cash equivalents 3,482 4,271 5,789
27,706 27,435 27,810
ASSETS, TOTAL 38,244 36,900 38,170
SHAREHOLDERS' EQUITY
AND LIABILITIES
EQUITY ATTRIBUTABLE
TO EQUITY HOLDERS
OF THE PARENT COMPANY
Share capital 8,040 8,040 8,040
Retained earnings 19,992 17,175 18,861
Shareholders' equity, total 28,032 25,215 26,901
NON-CURRENT LIABILITIES
Deferred tax liabilities 638 563 614
Interest-bearing liabilities 841 1,842 841
1,479 2,405 1,455
CURRENT LIABILITIES
Trade and other payables 7,152 7,240 7,803
Tax liabilities 210 358 210
Interest-bearing liabilities 1,371 1,682 1,801
8,733 9,280 9,814
Liabilities, total 10,212 11,685 11,269
SHAREHOLDERS' EQUITY AND
LIABILITIES, TOTAL 38,244 36,900 38,170
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) 1.1.-31.3. 1.1.-31.3. 1.1.-31.12.
2007 2006 2006
CASH FLOW FROM OPERATING
ACTIVITIES
Net profit for the period 1,124 1,071 7,990
Adjustments
Depreciation and impairment 322 258 1,158
Financial income and expenses +16 -10 68
Income taxes 389 371 2,806
Cash flow before change
in working capital 1,819 1,710 12,022
Change in working capital -2,517 -3,499 -2,069
Cash flow from operating
activities before
financial items and taxes -698 -1,738 9,953
Paid interest and payments
on other financial expenses -14 -21 -194
Interest received 70 33 101
Taxes paid -734 -644 -2,958
CASH FLOW FROM
OPERATING ACTIVITIES -1,377 -2,370 6,902
CASH FLOW FROM
INVESTING ACTIVITIES
Investments in tangible
and intangible assets -500 -660 -2,301
CASH FLOW FROM
INVESTING ACTIVITIES -500 -660 -2,301
CASH FLOW FROM FINANCING
ACTIVITIES
Short-term loans drawn - - 3,000
Short-term loans repaid -400 -200 -3,100
Long-term loans repaid - - -946
Finance leasing debts paid -30 -14 -55
Dividends paid - - -5,226
CASH FLOW FROM
FINANCING ACTIVITIES -430 -214 -6,327
Change in cash and
cash equivalents -2,307 -3,244 -1,726
Cash and cash equivalents
at the beginning
of the period 5,789 7,515 7,515
Cash and cash equivalents
at the end of the period 3,482 4,271 5,789
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Equity attributable to equity holders of the parent company
(EUR 1,000)
Share Transla- Fair value Retained Share-
capital tion and other earnings holders'
differ- reserves equity,
ences total
Adjusted share-
holders' equity
1 Jan. 2006 8,040 16,097 24,137
Net profit for
the period 1,071
Shareholders'
equity
31 March 2006 8,040 7 17,168 25,215
Equity attributable to equity holders of the parent company
(EUR 1,000)
Share Transla- Fair value Retained Share-
capital tion and other earnings holders'
differ- reserves equity,
ences total
Adjusted share-
holders' equity
1 Jan. 2007 8,040 18,861 26,901
Net profit for
the period 1,124
Shareholders'
equity
31 March 2007 8,040 7 19,985 28,032
KEY INDICATORS
1.1.-31.3. 1.1.-31.3. Change, 1.1.-31.12.
2007 2006 % 2006
Earnings
per share, EUR 0.14 0.13 7.7 1.00
Equity per share, EUR 3.49 3.14 3.35
Share of exports and,
international operations,
% of net sales 31.4 25.5 24.6
Return on equity (ROE), % 16.4 17.4 31.3
Return on investment
(ROI), % 20.7 20.9 38.2
Equity ratio, % 73.3 68.3 70.5
Gross investments,
EUR 1,000 500 660 -24.3 2,455
Gross investments,
% of net sales 3.0 4.1 3.4
Contingent liabilities,
EUR 1,000 15,032 15,885 5.4 14,513
Average personnel 403 388 3.9 393
Personnel at the end
of the period 403 391 3.1 396
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
NET SALES BY MARKET AREA AND PRODUCT LINE
BY MARKET AREA
(EUR 1,000) 1.1.-31.3. 1.1.-31.3. Change, 1.1.-31.12.
2007 2006 % 2006
Finland 11,609 12,044 -3.6 53,826
Other Nordic countries 2,069 1,780 16.2 7,373
Rest of Europe 1,563 959 63.0 3,655
North America 899 639 40.7 3,410
Other countries 772 752 2.7 3,160
TOTAL 16,912 16,174 4.6 71,424
BY PRODUCT LINE
(EUR 1,000) 1.1.-31.3. 1.1.-31.3. Change, 1.1.-31.12.
2007 2006 % 2006
Clothing 7,708 7,606 1.3 30,309
Interior decoration 6,798 6,609 2.9 30,716
Bags 2,406 1,959 22.8 10,399
TOTAL 16,912 16,174 4.6 71,424
SEGMENT INFORMATION
1.1.-31.3. 1.1.-31.3. 1.1.-31.12.
2007 2006 2006
Net sales
Finland 11,609 12,044 53,826
Other countries 5,303 4,130 17,598
Total 16,912 16,174 71,424
Assets
Finland 37,912 35,999 36,662
Other countries 1,609 1,341 2,228
Eliminations -1,277 -855 -720
Total 38,244 36,900 38,170
Investments
Finland 482 660 2,365
Other countries 18 - 90
Total 500 660 2,455
QUATERLY TREND IN NET SALES AND EARNINGS
(EUR 1,000) I/2007 IV/2006 III/2006 II/2006 I/2006
Net sales 16,912 20,142 18,357 16,751 16,174
Operating profit 1,497 3,776 3,492 2,144 1,452
Earnings
per share, EUR 0.14 0.35 0.32 0.20 0.13
MARIMEKKO CORPORATION'S INTERIM REPORT, 1 JANUARY - 31 MARCH 2007 BRISK GROWTH IN EXPORTS CONTINUES
| Source: Marimekko Oyj
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