STOCKMANN’S FINANCIAL STATEMENT BULLETIN 2004

STOCKMANN plc STOCK EXCHANGE RELEASE FEBRUARY 15, 2005, at 11.45

STOCKMANN’S FINANCIAL STATEMENT BULLETIN 2004

The Stockmann Group’s sales grew by 2.1 per cent to EUR 1 735.0 million
(EUR 1 698.6 million in 2004). Profit on ordinary operations improved by
EUR 17.4 million on the previous year. Both the Department Store Division
and Seppälä improved their operating profit substantially and turned in
their best-ever earnings. The Vehicle Division reported a decrease in
operating profit. Hobby Hall improved its operating result, though it was
still in the red. Profit before extraordinary items increased by EUR 5.1
million and was EUR 79.1 million. The corresponding figure a year earlier,
EUR 74.0 million, included EUR 15.4 million of other operating income.
Other operating income in 2004 amounted to EUR 3.1 million. Earnings per
share increased to EUR 1.11, as against EUR 1.01 a year ago. The Board of
Directors will propose the payment of a dividend of EUR 1.00 per share.

Sales up 2.1 per cent

The Stockmann Group’s sales grew by 2.1 per cent, or EUR 36.3 million, to
EUR 1 735.0 million. International operations accounted for an increased
share of consolidated sales, rising from 11 per cent to 14 per cent. Net
turnover was up 2.3 per cent to EUR 1 445.0 million. The net turnover
figures by division are shown in the accompanying table.

A big improvement in earnings

The Group’s operating gross margin increased by EUR 36.1 million to EUR
493.5 million. The relative gross margin improved and was 34.2 per cent
(32.4 per cent). The relative gross margin improved across all the
divisions. Operating costs increased by EUR 16.7 million. Depreciation
rose by EUR 1.4 million. Profit on ordinary operations improved by EUR
18.0 million. Net financial income decreased by EUR 0.5 million. These
factors improved the Group’s profit on ordinary operations before
extraordinary items by EUR 17.4 million.

Other operating income came from the consideration received from the sale
of the Volkswagen-Audi car dealership in Helsinki’s Herttoniemi district
as well as gains on the sale of securities and totalled EUR 3.1 million, a
decrease of EUR 12.3 million on the figure a year earlier. Consolidated
operating profit increased by EUR 5.7 million on the comparison period, to
EUR 71.4 million.

Net financial income decreased by EUR 0.5 million from the previous year
and was EUR 7.8 million.

Profit before extraordinary items grew by EUR 5.1 million and was EUR 79.1
million.

Direct taxes were EUR 20.9 million, decreasing by EUR 1.4 million on the
figure a year earlier. Taxes on earnings amounted to EUR 25.3 million
(EUR 20.4 million) and the change in the deferred tax liability was a
decrease of EUR 4.4 million. The change in the deferred tax liability
takes into account the lowering of Finland’s corporate tax rate from 29
per cent to 26 per cent as from the beginning of 2005.

Net profit for the financial year was EUR 58.2 million, compared with EUR
51.7 million a year earlier.

Earnings per share increased by EUR 0.10 and were EUR 1.11 (2003: EUR
1.01). Earnings per share adjusted for the effect of share options were
EUR 1.09 (EUR 1.00).

Capital employed diminished and was at the end of the year EUR 557.5
million (EUR 611.8 million). The trend in capital employed was
attributable to the decrease in cash assets according to plan. The return
on capital employed rose to 14.3 per cent, as against 13.2 per cent a year
ago. The return on equity rose to 11.2 per cent, as against 9.6 per cent a
year earlier. Equity per share was EUR 9.16, compared with EUR 10.36 a
year earlier.

Sales and profitability trend of the divisions

The Department Store Division’s sales grew by 10 per cent to EUR 938.9
million. Sales grew by 4 per cent in Finland and by 43 per cent abroad.
Sales growth in Finland was reduced by the divestment of the Academic
Bookstore magazine business in June 2003. International Operations
registered sales growth ahead of the market in all the countries where it
operates.

In Russia, the Mega South department store was opened in Moscow in April,
a Zara store in the Marina Roscha Shopping Centre in June and a department
store and Zara store in the Mega North Shopping Centre in December. These
new locations, together with the Riga department store that was opened in
October 2003 boosted International Operations’ sales growth. International
Operations accounted for 21 per cent of the division’s sales (16 per
cent). The Department Store Division’s operating profit increased by EUR
13.3 million compared with the same period a year ago, rising to EUR 53.0
million (EUR 39.7 million). Earnings were burdened by the costs of
starting up the new department stores in Moscow and the department store
in Riga. The return on capital employed was 23.7 per cent, as against 21.1
per cent a year earlier.

Vehicle sales in Finland tailed off following the spurt in sales in the
wake of the lowered car tax. The Vehicle Division’s sales were down 9 per
cent to EUR 437.1 million. All in all, the decrease in sales was
attributable to the transfer of the Volkswagen-Audi dealership in
Helsinki’s Herttoniemi district to a Kesko Corporation subsidiary as from
July 1, 2004. The transferred car dealership had sales in 2003 accounting
for about 22 per cent of the Stockmann Vehicle Division’s entire sales.
Unit sales of new vehicles fell by 17 per cent and those of used vehicles
declined by 4 per cent. The division’s operating profit diminished by EUR
1.4 million, mainly due to the sale of the Volkswagen-Audi dealership in
Herttoniemi, and was EUR 4.2 million (EUR 5.6 million). The return on
capital employed was 10.2 per cent, as against 13.2 per cent a year
earlier. Stockmann is pushing ahead energetically with inputs into
developing the vehicle trade and servicing operations in localities where
it has a department store. Finland’s first car dealership in line with the
Audi car plant’s recommendations was opened in Espoo’s Suomenoja district
at the beginning of July and will serve the Helsinki metropolitan area and
its environs. The BMW-MINI Autotalo Jurvakainen Oy dealership was
purchased in Oulu towards the end of October.

Sales by Hobby Hall diminished by 9 per cent on the previous year, to EUR
214.4 million. Sales in Finland were down 6 per cent on the previous year.
The lower sales in Finland were due mainly to the effect of the stores
closed at the end of 2003 and the start of 2004. Online shopping continued
to enjoy strong growth and already accounted for 27 per cent of Hobby
Hall’s distance retailing in Finland. The division’s sales abroad were
down 22 per cent on the same period of 2003. This was attributable to
tightened-up credit policy as well as the closing of one store in Estonia
in autumn 2003. Hobby Hall stepped up its inventory management, and the
level of stocks fell by 31 per cent during 2004. Hobby Hall’s headcount
decreased by 155 employees during 2004. Although sales fell short of the
target, the improvement in the relative gross margin and cost savings
lifted the division’s operating result by EUR 0.3 million, ending in a
loss of EUR 3.1 million. It was decided to wind up loss-making operations
in Lithuania by the end of March 2005.

Seppälä’s sales grew by 10 per cent on the previous year and were EUR
143.7 million. Sales grew both in Finland and abroad. Sales in the Baltic
countries were increased by the four stores opened in Latvia towards the
end of 2003 and the two stores opened there in 2004 as well as by the
store that opened after a pause of one year in the refurbished Viru Centre
in Tallinn, Estonia, in May. In addition, Seppälä opened its first store
in Russia in Moscow in April 2004, with the next two store openings coming
in November and December. Thanks to higher sales and an improved relative
gross margin, Seppälä’s operating profit increased by a hefty EUR 6.3
million and was EUR 16.4 million (EUR 10.1 million). The return on capital
employed was 127.7 per cent, as against 58.5 per cent a year earlier.

Financing

Liquid assets at the end of 2004 totalled EUR 41.4 million, compared with
EUR 121.3 million a year earlier.

Loan repayments were not made during the year, nor have new long-term
loans been drawn down. The amount of long-term loans at the end of
December was EUR 13.1 million. Capital expenditures came to a total of EUR
59.0 million. Dividend payouts totalled EUR 123.3 million. EUR 3.0 million
was added to shareholders’ equity through share subscriptions made on the
basis of the 1997 and 2000 share options and EUR 6.5 million was added
through the exercise of Loyal Customer share options. In addition,
disposals of fixed assets generated a total of EUR 1.7 million.

The equity ratio was 65.5 per cent. The equity ratio at the end of 2003
was 68.3 per cent.

Contingent liabilities diminished by EUR 19.7 million from the end of 2003
and were EUR 41.1 million. Liabilities for lease agreements on business
premises amounted to EUR 456.8 million, compared with EUR 471.1 million a
year earlier.

Dividends

In accordance with the resolution passed by the Annual General Meeting, in
April Stockmann paid a basic dividend of EUR 0.90 per share and a bonus
dividend of EUR 0.45 per share, or a total dividend payout of EUR 70.5
million. An extraordinary general meeting held on December 8, 2004,
resolved to pay an extra dividend of EUR 1.00 per share on top of the EUR
1.35 dividend that was decided at the Annual General Meeting. The extra
dividend totalling EUR 52.8 million was paid out in December. The Board of
Directors will propose to the Annual General Meeting that a dividend of
EUR 1.00 per share be paid for the 2004 financial year. The proposed
dividend is 90 per cent of earnings per share.

Fine-tuning strategy

In its discussion of strategy in June 2004, the Stockmann Group’s Board of
Directors confirmed the company’s strategy, according to which the Group
will grow energetically over the next few years, particularly in the
Russian market. The objective is that by the end of 2008 about a third of
sales and at least the same proportion of earnings will come from the
markets in the Baltic countries and Russia.

Growth abroad will be spearheaded by the department stores, Seppälä and
expansion of the franchising-based Zara chain in Russia. A new possibility
that has been identified for augmenting business operations is to expand
franchising activities also for international brands that have expressed
interest in utilizing Stockmann’s acquired knowledge of trading in Russia.
As part of the implementation of this strategy, in October Stockmann
signed a cooperation agreement with the Bestseller group of Denmark, on
the basis of which Stockmann received exclusive rights to retail
Bestseller’s brands in Russia. The Bestseller brands include Vero Moda,
Only, Jack & Jones, Exit and Selected. The first store selling Bestseller
brands will be opened in the Mega North Shopping Centre in spring 2005.

Alternatives for developing Hobby Hall were examined during the autumn of
2004. As a result of this exploratory work, it was decided to continue
improving Hobby Hall’s performance as part of the Stockmann Group.

The vehicle business will be developed as part of Stockmann, with a
special emphasis on exploiting the synergies arising via Loyal Customer
marketing in concert with department store operations as well as the
possibilities for business development offered by the amendment of the
Block Exemption regulation. In accordance with the strategic policy
adopted, in October Stockmann purchased the entire shares outstanding in
Autotalo Jurvakainen Oy, a BMW-MINI dealership in Oulu. The business was
transferred to Stockmann’s ownership on November 1, 2004. Thanks to this
deal, Stockmann will be able to serve its customers, in car sales too, in
all its department store localities in Finland.

Organizational changes

Klaus Sundström, M.Sc. (Econ.), was appointed as the Vehicle Division’s
new director and a member of the Stockmann Group’s Management Committee,
effective April 2, 2004. The division’s previous director, Esa Mäkinen,
joined another company.

Raija Saari, M.Sc. (Econ.), was appointed as Hobby Hall’s new managing
director and a member of the Stockmann Group’s Management Committee,
effective November 15, 2004. As from the same date, Hobby Hall’s previous
managing director, Henri Bucht, a Stockmann Group executive vice president
and the CEO’s alternate, was assigned to special duties and will resign
from the company’s employ on June 30, 2005. Group Executive Vice President
Jukka Hienonen, director of the Department Store Division, was appointed
the CEO’s alternate, effective November 15, 2004.

Developing the Group structure

With a view to streamlining Stockmann’s Group structure and increasing
operational transparency, the Board of Directors decided in October to
spin off Stockmann’s Vehicle Division through a transfer of operations to
the parent company’s wholly-owned subsidiary Stockmann Auto Oy Ab. The
director of Stockmann’s Vehicle Division, Klaus Sundström, was appointed
as the new company’s managing director. The spin-off went into effect as
from January 1, 2005.

The Board of Directors furthermore decided to transfer the subsidiaries
operating in Russia to the parent company’s wholly-owned Finnish holding
company Oy Stockmann Russia Holding Ab. Transfer of the shares to the new
holding company was carried out in October. In addition, the Board of
Directors decided to establish a Finnish finance company named Oy
Stockmann Russia Finance Ab, which will be wholly-owned by the parent
company and finance, among other things, purchases of fixed assets by
Stockmann’s subsidiaries in Russia. The company went into operation in
December 2004.

Capital expenditures

Capital expenditures during 2004 totalled EUR 59.0 million (EUR 40.9
million).

The Department Store Division’s capital expenditures came to EUR 39.6
million. The division’s biggest investment items were the new Mega South
and Mega North department stores in Moscow, which operate in premises
leased from Ikea. The Mega South department store was opened in April and
required an outlay during 2004 of EUR 12.3 million. The Mega North
department store was opened in December and had an investment price tag
during 2004 of EUR 16.2 million. Both department stores have about 10 000
square metres of retail space. Stockmann’s total investments in these
department stores amounted to EUR 31.2 million. Two Zara stores were also
opened in Moscow: in the Marina Roscha Shopping Centre at the beginning of
June and in the Mega North Shopping Centre in December. In Finland, two
new stores belonging to the Stockmann Beauty cosmetics chain were opened
in 2004, bringing the total number of stores to eight.

The Vehicle Division’s capital expenditures amounted to EUR 2.3 million.
They went mainly for expanding operations.

Hobby Hall’s capital expenditures totalled EUR 1.2 million. They went
mainly for the development of information systems.

Seppälä invested a total of EUR 1.2 million. Seppälä opened its first
store in Russia at the Stockmann department store in Moscow’s Mega South
Shopping Centre in April. Seppälä opened its second store in Russia in the
Marino Shopping Centre on the southeast side of Moscow in November 2004,
and a third store at the Stockmann department store in Moscow’s Mega North
Shopping Centre in December. In addition, Seppälä opened a new store in
Liepaja, Latvia, in November.

Property investments totalled EUR 13.6 million, of which EUR 1.7 million
was for the Audi car dealership in Espoo’s Suomenoja district and EUR 7.6
million for the preparatory works for the enlargement of the Helsinki
department store as well as for upgrading escalators and lifts.

Other capital expenditures came to EUR 1.1 million.

Current projects

Stockmann will open a department store with about 11 000 square metres of
retail space in leased premises in the newly built section of the Jumbo
Shopping Centre in Vantaa in autumn 2005. Stockmann’s share of the cost
estimate for the project is about EUR 10 million.

A large-scale project for enlargement and modification works on the
department store in the centre of Helsinki is pending. Implementation of
the project will call for modifying the town plan, which has already been
initiated. According to the plan, the department store’s commercial
premises will be expanded by about 10 000 square metres by converting
existing premises to commercial use and by building new retail space. In
addition, completely new goods handling and maintenance areas will be
built for the department store as well as access passages to the new
customer car park. After the enlargement the Helsinki department store
will have a total of 50 000 square metres of retail space. The cost
estimate for the project is a total of about EUR 115 million. The works
are estimated to be completed phase by phase by the end of 2009.

A lease agreement on opening, in spring 2005, a flagship Zara store in a
centrally located business site right in the heart of Moscow was signed in
October. Furthermore, agreements have been signed on opening three new
Zara stores in Moscow in 2005. In addition, 2-3 Bestseller stores will be
opened in Moscow, the first of which will be in the Mega North Shopping
Centre in spring 2005.

Seppälä is aiming to open new stores in Moscow and to expand its
operations to St Petersburg. Furthermore, Seppälä will begin operations in
Lithuania in spring 2005.

Transition to IFRS

As from the beginning of 2005, Stockmann changed over from Finnish
Accounting Standards (FAS) to International Financial Reporting Standards
(IFRS) in its consolidated reporting. The company has drafted an opening
balance sheet for the time of transition to IFRS, January 1, 2004. A
separate bulletin on the IFRS transition will be released on February 15,
2005. The first IFRS Interim Report will be published on April 21, 2005.
The major effects of Stockmann’s transition to IFRS are related to the
depreciation of revaluations of fixed assets, the treatment of own shares,
the treatment of certain leasing and hire purchase agreements in the motor
trade, the recording of financial instruments and segmental reporting.

The enclosed table presents the changes to some of the Group’s key figures
under IFRS.

In 2004, the balance sheet total was virtually the same under IFRS as in
the FAS balance sheet. The equity ratio in the IFRS annual accounts was
62.3 per cent, or 3.2 percentage points lower than the equity ratio in the
FAS annual accounts. This is mainly due to the recording of accumulated
depreciation of revaluations in shareholders’ equity and the deferred tax
liabilities related to IFRS adjustments. The growth in net profit for the
period and earnings per share in the IFRS annual accounts is primarily due
to the reduction in deferred tax liabilities. The transition to IFRS in
the annual accounts has no effect on the Group’s cash flow.

Upon the transition to IFRS, the segmental division used in current
reporting was changed such that the property unit, whose income primarily
comprised intra-Group rental income, was eliminated. Under IFRS, the
properties owned by the Group have been divided between business segments
such that they are included in the assets of the segments.

In the segments’ profit and loss accounts, the previously used internal
rent will be replaced by depreciation on buildings and other expenses.
Under IFRS, other operating income has been allocated to the segments,
whereas they were previously reported only at the Group level.

The segmental division is based on the Group’s organization and internal
reporting. The primary segments are the Department Store Division,
Stockmann Auto, Hobby Hall and Seppälä. The secondary segments are
Finland, the Baltic countries and Russia.

Share capital and shares

The company’s market capitalization grew by 19 per cent, or by EUR 185.2
million from the previous year and was EUR 1 140.8 million at the end of
December.

Stockmann’s shares outperformed both the HEX All-Share Index and the HEX
Portfolio Index during the year. At the end of December the stock exchange
price of the Series A share was EUR 21.10, compared with EUR 18.00 at the
end of 2003, and the Series B share was selling at EUR 21.70, as against
EUR 18.30 at the end of 2003.

The 1997 Stockmann share options were exercised to subscribe for a total
of 20 300 Stockmann plc Series B shares with a par value of 2 euros in
January 2004. As a consequence of the subscriptions the share capital was
increased by EUR 40 600. The shares were entered in the Trade Register on
February 20, 2004, and they became available for public trading, together
with the existing shares, on the Helsinki Stock Exchange on April 5, 2004.

At its meetings held on February 12, 2004 and November 15, 2004, Stockmann
plc’s Board of Directors approved shareholders’ requests to convert 174
650 of the company’s shares from Series A into Series B shares in
accordance with Article 3 of Stockmann’s Articles of Association. Share
conversions of 163 000 shares were entered in the Trade Register on
February 20, 2004, and conversions of 11 650 shares on December 21, 2004.

A total of 600 269 Stockmann plc Series B shares with a par value of 2
euros were subscribed for with Stockmann Loyal Customer share options in
May. As a consequence of the subscriptions the share capital was increased
by EUR 1 200 538. Of the shares, 597 118 were entered in the Trade
Register on June 30, 2004, and 3 151 shares were entered on August 30,
2004, and became available for public trading, together with the existing
shares, on the Helsinki Stock Exchange on July 1, 2004, and August 31,
2004, respectively.

In December, the 2000 Stockmann share options were exercised to subscribe
for a total of 170 150 Stockmann plc Series B shares with a par value of 2
euros. As a consequence of the subscriptions the share capital was
increased by EUR 340 300. The shares were entered in the Trade Register on
December 30, 2004, and they became available for public trading, together
with the existing shares, on the Helsinki Stock Exchange on January 3,
2005.

Following share subscriptions made on the basis of share conversions and
share options, the total number of Series A shares at December 31, 2004,
was 24 564 243 and the total number of Series B shares was 28 855 817.

At the end of December, the 2000 Stockmann share options were exercised to
subscribe for another 4 900 Stockmann plc Series B shares with a par value
of 2 euros. As a consequence of the subscriptions the share capital was
increased by EUR 9 800. Stockmann’s Board of Directors approved the
subscriptions in its meeting held on February 15, 2005.

Stockmann held 406 939 of its own Series B shares (treasury shares) at the
end of December 2004. The par value of these shares is a total of EUR 813
878, and they represent 0.8 per cent of all the shares outstanding as well
as 0.1 per cent of the total votes. The shares were bought back at a total
price of EUR 6.1 million.

The company’s Board of Directors does not have valid authorizations to
increase the share capital or to float issues of convertible bonds or
bonds with warrants or to buy back own shares. The Board of Directors has
valid authorizations to transfer 406 939 company-owned Series B treasury
shares up to March 30, 2005.

Personnel strength

The Stockmann Group had an average payroll of 9 589 employees, or 844 more
than in the previous year. The growth in the number of employees was
attributable mainly to the new department stores in Moscow. Converted to a
full-time basis, the average number of personnel increased by 744
employees and was 7 812.

At the end of December 2004, Stockmann had 3 391 employees working abroad.
At the end of December of last year Stockmann had 1 946 people working
abroad. The proportion of the total personnel who were working abroad
increased from 20 per cent to 31 per cent.

Outlook for 2005

Retail sales, excluding the motor trade, are estimated to increase by
about 2 – 3 per cent in Finland in 2005. The volume of new vehicle sales
is expected to decrease compared with 2004. It is estimated that the
markets in Russia and the Baltic countries will continue growing faster
than the Finnish market. Sales in 2005 are expected to come in at about
EUR 1.9 billion.

The operating profit generated by the Department Store Division and
Seppälä is estimated to improve further on the level reported for 2004.
The operating profit reported by Stockmann Auto is expected to diminish
somewhat. Hobby Hall’s result is expected to improve significantly and to
return to the black. Stockmann’s target is to post even better earnings in
2005 than in 2004.

Helsinki, February 15, 2005

Stockmann plc
BOARD OF DIRECTORS

Net turnover

1-12/04 1-12/03 Change Change
EUR mill. EUR mill. % EUR mill.

Department Store Division, 624.5 602.2 22.3 3.7
Finland
Department Store Division, 164.8 111.0 53.8 48.5
international operations
Department Store Division, 789.3 713.2 76.1 10.7
total
Vehicle Division 358.0 394.5 -36.5 -9.3
Hobby Hall Division, 148.6 158.5 -9.9 -6.2
Finland
Hobby Hall Division, 29.3 38.8 -9.5 -24.4
international operations
Hobby Hall Division, total 177.9 197.3 -19.3 -9.8
Seppälä Division, Finland 105.3 98.8 6.5 6.6
Seppälä Division, 13.0 8.5 4.6 54.0
international operations
Seppälä Division, total 118.4 107.3 11.1 10.4
Real Estate + others 21.7 21.0 0.7 3.2
Eliminations -20.2 -20.5 0.3
Operations in Finland, 1 237.9 1 254.6 -16.6 -1.3
total
International operations, 207.1 158.2 48.9 30.9
total
Group 1 445.0 1 412.7 32.3 2.3

Profit and loss account

1-12/04 1-12/03
EUR mill. EUR mill.

Net turnover 1 445.0 1 412.7
Other operating income 3.1 15.4
Raw materials and services 951.5 955.3
Staff expenses 202.2 194.9
Depreciation and reduction in value 30.2 28.8
Other operating expenses 192.9 183.4
Operating profit 71.4 65.7
Financial income and expenses 7.8 8.3
Profit before extraordinary items 79.1 74.0
Extraordinary items
Profit before taxes 79.1 74.0
Income taxes, total 20.9 22.3
Minority interest 0.0 0.0
Profit for the financial year 58.2 51.7

Gross investments 59.0 40.9
Per cent of net turnover 4.1 2.9

Profit and loss account, Group quarterly, EUR mill.

Q4/04 Q3/04 Q2/04 Q1/04

Net turnover 429.7 330.6 348.8 336.0
Other operating income 0.8 0.0 2.3 0.0
Raw materials and services 266.6 221.8 230.2 232.9
Staff expenses 58.9 44.2 51.2 47.8
Depreciation 7.7 7.6 7.6 7.3
Other operating expenses 56.2 44.3 46.1 46.3
Operating profit 41.1 12.7 15.9 1.6
Financial income and expenses, 1.3 1.3 2.0 3.1
total
Profit before extraordinary items 42.4 14.0 17.9 4.8
Extraordinary items 0.0 0.0 0.0 0.0
Profit before taxes 42.4 14.0 17.9 4.8
Direct taxes (corresponding to 12.9 4.1 2.6 1.4
profit before taxes)
Minority interest 0.0 0.0 0.0 0.0
Profit for the period 29.5 10.0 15.4 3.4
Earnings trend of the divisions
Operating profit

1-12/04 1-12/03 Change ROCE % ROCE %
EUR mill. EUR mill. EUR mill. 2004 2003

Department Store 53.0 39.7 13.2 23.7 21.1
Division
Vehicle Division 4.2 5.6 -1.4 10.2 13.2
Hobby Hall Division -3.1 -3.4 0.3 -3.5 -3.4
Seppälä Division 16.4 10.1 6.3 127.7 58.5
Real-estate 13.8 14.5 -0.8 10.4 11.4
Other operating 3.1 15.4 -12.3
income
Eliminations + -15.9 -16.1 0.2
others
Group 71.4 65.7 5.7 14.3 13.2

The operating profit figures of the commercial units are presented
according to management accounting.
A good financial position
Security pledged, contingent liabilities and other commitments

Group Parent company
2004 2003 2004 2003

Security pledged
Security pledged on behalf
of Group undertakings
Mortgages given 1.7 1.7 1.7 1.7
Securities pledged 0.2 0.1 0.2 0.1
Total 1.9 1.7 1.9 1.7
Security pledged on behalf
of Group undertakings
Guarantees
Rent guarantees 17.8 16.4
Other guarantees 19.3 17.4
Total 37.1 33.8
Leasing commitments
Payable during the 2005 3.0 2.9 5.6 4.8
financial year
Payable at a later date 0.8 0.9 12.4 11.9
Total 3.9 3.8 18.0 16.7
Other own commitments
Repurchase commitments 35.4 55.3 35.4 55.3
for transferred leasing
and hire purchase
agreements
Total 35.4 55.3 35.4 55.3
Commitments, total
Mortgages 1.7 1.7 1.7 1.7
Pledges 0.2 0.1 0.2 0.1
Guarantees 37.1 33.8
Other commitments 39.2 59.1 53.4 72.0
Total 41.1 60.8 92.4 107.5

Derivative instruments of the Group

Dec.31, 2004 Dec.31, 2003
EUR mill. EUR mill.
Me Me

Nominal value
Foreign exchange derivatives 86.9 11.7
Interest rate derivatives 35.0 35.0
Fair value
Foreign exchange derivatives 1.0 -0.1
Interest rate derivatives -0.5 -0.9

Average number of employees, converted to full-time staff

1-12/04 1-12/03 Change

Department Store Division 5 601 4 782 819
Vehicle Division 740 776 -36
Hobby Hall Division 608 704 -96
Seppälä Division 759 709 50
Management and administration 104 97 7
Group 7 812 7 068 744

BALANCE SHEET Dec.31,2004 Dec.31,2003
ASSETS EUR mill. EUR mill.

NON-CURRENT ASSETS
Intangible assets
Intangible rights 9.1 10.3
Goodwill arising on consolidation 0.5
Goodwill 0.0 0.0
Other capitalized long-term expenses 13.7 14.7
Advance payments and projects in progress 1.2 5.4
Intangible assets, total 24.4 30.5
Tangible assets
Land and water 17.8 17.8
Buildings and constructions 143.7 133.0
Machinery and equipment 57.8 59.8
Other tangible assets 36.3 10.0
Advance payments and construction in progress 7.0 9.5
Tangible assets, total 262.7 230.0
Investments
Own shares 6.1 6.2
Other shares and participations 21.9 22.4
Investments, total 28.0 28.7
NON-CURRENT ASSETS, TOTAL 315.2 289.2

CURRENT ASSETS
Stocks
Raw materials and consumables 195.0 191.3
Stocks, total 195.0 191.3
Non-current debtors
Trade debtors 0.1 0.2
Loan receivables 0.0 0.1
Other debtors 1.0 0.5
Non-current debtors, total 1.1 0.9
Deferred tax assets 1.8 0.8
Current debtors
Trade debtors 169.6 177.7
Other debtors 15.7 6.5
Prepayments and accrued income 10.7 13.1
Current debtors, total 196.0 197.3
Debtors, total 198.9 199.0
Securities held in current assets 28.7 101.8
Cash in hand and at banks 12.7 19.5
CURRENT ASSETS, TOTAL 435.2 511.6
TOTAL 750.4 800.8

BALANCE SHEET Dec.31,2004 Dec.31,2003
LIABILITIES EUR mill. EUR mill.

CAPITAL AND RESERVES
Share capital 106.8 105.3
Premium fund 155.0 147.1
Fund for own shares 6.1 6.2
Reserve fund 0.2 0.2
Other funds 43.8 43.7
Retained earnings 121.5 192.9
Net profit for the financial year 58.2 51.7
CAPITAL AND RESERVES, TOTAL 491.7 547.1

Minority interest 0.0 0.0

CREDITORS
Deferred tax liability 22.6 26.0
Non-current creditors
Loans from credit institutions 13.1 48.6
Non-current creditors, total 13.1 48.6
Current creditors
Loans from credit institutions 35.0
Trade creditors 93.8 92.2
Other Creditors 46.0 40.5
Accruals and prepaid income 48.2 46.4
Current creditors, total 223.0 179.0
CREDITORS, TOTAL 258.7 253.7
TOTAL 750.4 800.8

Funds statement, Group

2004 2003
EUR Eur
mill. mill.

CASH FLOW FROM OPERATIONS
Payments from sales 1 420.5 1 416.9
Payments from other operating income 2.5 2.3
Payments for operating expenses -1 319.7 -1 333.2
Cash flow from operations before financial items and 103.3 85.9
taxes

Paid interest and payments for other operating -4.7 -3.8
financial expenses
Interest received from operations 11.8 11.0
Direct taxes paid -23.9 -20.9
Cash flow before extraordinary items 86.4 72.2

CASH FLOW FROM OPERATIONS (A) 86.4 72.2

CASH FLOW INTO AND FROM INVESTMENTS
Capital expenditures on tangible and intangible -57.1 -41.0
assets
Cash from tangible and intangible assets 0.5 36.6
Capital expenditures on other investments 0.0 0.0
Cash from other investments 1.2 0.4
Dividends from investments 0.6 0.3
CASH FLOW INTO AND FROM INVESTMENTS (B) -54.7 -3.8

FINANCIAL CASH FLOW
Change in loans granted, increase (-), decrease (+) 0.1 0.1
Subscriptions with options 9.5 16.4
Change in short-term loans, increase (+), 1.7 -0.9
decrease (-)
Long-term loans drawn down 13.6
Repayments of long-term loans -1.0
Dividend paid and other distribution of profits -123.0 -45.8
FINANCIAL CASH FLOW (C) -111.7 -17.6

Change in cash funds (A+B+C) increase (+), -79.9 50.8
decrease (-)

Cash funds at start of the financial year 121.3 70.5
Cash funds at end of the financial year 41.4 121.3

The table below shows the effect of the adoption of IFRS on some Group key
financial ratios:

Group key financial ratios 2004 FAS 2004 Effect of IFRS
transition to 2004
IFRS
Operating profit 71.4 (1.0) 70.4
Net profit for the period, EUR million 58.2 1.1 59.3
Earnings per share, undiluted EUR 1.11 0.02 1.13
Earnings per share, diluted EUR 1.09 0.02 1.11
Total assets EUR million 750.4 (1.4) 749.0
Return on capital employed, per cent 14.3 0.5 14.8
Return on shareholders’ equity, per cent 11.2 1.0 12.2
Equity ratio, per cent 65.5 (3.2) 62.3

Helsinki, February 15, 2005

Stockmann plc

Hannu Penttilä
CEO

Distribution
Helsinki Exchanges
Principal media

A press and analysts conference will be held today, February 15, 2005, at
14.30 at the World Trade Center, Aleksanterinkatu 17, Helsinki.