STOCKMANN plc INTERIM REPORT January 1 – June 30, 2005

STOCKMANN plc STOCK EXCHANGE RELEASE August 11, 2005, at 12.15

STOCKMANN plc INTERIM REPORT January 1 – June 30, 2005

The Stockmann Group’s profit on ordinary operations improved by 52 per
cent in the second quarter. First-half sales were up 4.4 per cent to EUR
858.5 million (EUR 822.5 million in 2004). Seppälä more than doubled its
first-half operating profit to EUR 9.8 million. Hobby Hall and the
Department Store Division likewise reported improved operating profits.
Stockmann Auto’s operating profit decreased. Consolidated profit before
taxes was EUR 25.9 million. The corresponding figure a year earlier, EUR
22.7 million, included EUR 2.3 million of other operating income. The
return on capital employed was 16.0 per cent. The earnings estimate for
2005 is unchanged.

IFRS reporting

Stockmann adopted International Financial Reporting Standards (IFRS) on
January 1, 2005. The comparative information used in this Interim Report
is the 2004 figures according to IFRS, which were published at the annual
level on February 15, 2005, and at the quarterly level on April 18, 2005.
The accounting policies presented in the stock exchange release of April
18, 2005, have been observed in this Interim Report. The Interim Report is
unaudited.

Sales and result

Stockmann’s consolidated sales in the first half of 2005 were EUR 858.5
million, up EUR 36.0 million and 4.4 per cent on same-period sales. Net
turnover was EUR 715.0 million, increasing by EUR 30.2 million and
likewise by 4.4 per cent on the same period a year ago. International
operations accounted for an increased share of consolidated sales, rising
from 12 per cent to 16 per cent.

The Group’s gross operating margin grew by EUR 18.0 million to EUR 239.7
million. The relative gross margin improved further and was 33.5 per cent
(32.4 per cent). The relative gross margin improved on the comparison
period in the Seppälä division and weakened slightly in the other
divisions. The growth in the Group’s relative gross margin was also
attributable to the change in the sales mix: the proportion of low-margin
Stockmann Auto’s sales within consolidated sales decreased from the
comparison period. Operating costs were up EUR 10.7 million. Depreciation
increased by EUR 1.4 million. Operating profit on ordinary operations
improved by EUR 5.9 million, net financial expenses increased by EUR 0.4
million and consolidated profit on ordinary operations before taxes grew
by EUR 5.5 million. The growth in earnings was especially strong in the
second quarter, when operating profit on ordinary operations before taxes
rose by 52 per cent to EUR 24.2 million (EUR 15.9 million in 2004,
excluding other operating income).

There was no other operating income in the report period, as against EUR
2.3 million in the comparison period. Consolidated operating profit
increased by EUR 3.6 million on the comparison period, to EUR 26.2
million. Owing to the reduction in liquid assets, net financial expenses
increased by EUR 0.4 million from the same period a year earlier and
amounted to EUR 0.3 million. Profit before taxes rose by EUR 3.2 million
to EUR 25.9 million.

Direct taxes were EUR 6.8 million, an increase of EUR 3.7 million on the
previous year. The deferred taxes portion of taxes for the comparison
period diminished due to the lowering of Finland’s corporate tax rate from
29 per cent to 26 per cent from the beginning of 2004. The lowering of
the tax rate reduced the deferred tax liability for the comparison period
by EUR 2.6 million.

Net profit for the report period was EUR 19.1 million, compared with EUR
19.6 million a year earlier.

Earnings per share were EUR 0.36 (EUR 0.37) and diluted for options they
were EUR 0.35 (EUR 0.36). The above-mentioned change in the deferred tax
liability improved earnings per share in January-June 2004 by EUR 0.05.
Equity per share was EUR 8.14 (EUR 9.05).

Sales and earnings trend by business segment

The Department Store Division’s sales grew by 13 per cent to EUR 466.9
million. Sales in Finland were up 6 per cent. Sales by International
Operations were boosted principally by the new department stores that were
opened in Moscow in April and December 2004, the new Zara stores as well
as by good same-store sales growth in all market areas. The Department
Store Division’s sales outside Finland grew by 46 per cent and their share
of the division’s sales rose to 24 per cent (18 per cent). The Department
Store Division’s operating profit increased by EUR 0.9 million to EUR 15.8
million (EUR 14.9 million). It was burdened by the start-up costs for new
department stores and other stores abroad. The division’s operating profit
in the second quarter was EUR 15.2 million, an increase of EUR 3.7 million
on the figure a year earlier.

Stockmann Auto’s sales fell by 11 per cent to EUR 218.0 million. The
division’s operating profit was EUR 1.7 million, down EUR 4.0 million on
the comparison period (EUR 5.7 million). Profit on ordinary operations
decreased by EUR 1.7 million. Operating profit in the comparison period
includes EUR 2.3 million of compensation received from the sale of the VW-
Audi dealership in Helsinki’s Herttoniemi district, which was booked in
the second quarter. A major factor behind the drop in both sales and
profit on ordinary operations was the transfer of the VW-Audi dealership
in Herttoniemi to the importer as from 1 July 2004. Stockmann Auto’s
operating profit in the second quarter was EUR 1.5 million, representing
an increase in operating profit on ordinary operations of EUR 0.2 million.

Hobby Hall’s sales, EUR 103.2 million, were on a par with the comparison
period (EUR 103.6 million). Sales in Finland diminished by one per cent
owing to the cutback in the store network. Finland’s distance retailing
grew slightly and online sales continued their strong growth. Hobby Hall’s
sales in the Baltic countries grew by 3 per cent even though distance
sales in Lithuania were wound up during the first part of the year. Hobby
Hall’s operating result increased by EUR 2.5 million to EUR 0.9 million (a
loss of EUR 1.6 million). The division reported a second-quarter operating
profit of EUR 0.2 million, an improvement of EUR 1.1 million on the figure
a year earlier. Hobby Hall’s positive earnings trend was due to the
efficient carrying through of the programme aimed at improving cost-
effectiveness and the gross margin.

Seppälä’s sales increased by 13 per cent on the same period of last year
and were EUR 69.9 million. Sales grew buoyantly (52 per cent) abroad,
where they were lifted by the stores opened in Estonia, Latvia and Russia
in 2004 as well as the good trend in like-for-like sales. In Finland too
sales grew strongly, registering growth of 8 per cent. Thanks to higher
sales and an improved relative gross margin, Seppälä’s operating profit
rose by a hefty EUR 5.9 million to EUR 9.8 million (EUR 3.9 million).
Seppälä’s second-quarter operating profit was EUR 8.4 million, or EUR 4.0
million higher than a year ago.

Financing and invested capital

The amount of liquid assets has been lowered as planned. Liquid assets
amounted to EUR 14.4 million at the end of the report period, as against
EUR 45.7 million a year earlier and EUR 41.4 million at the end of 2004.

Loan repayments were not made during the report period, nor have new long-
term loans been drawn down. Interest-bearing liabilities at the end of
June were EUR 99.0 million (EUR 67.9 million), of which EUR 15.1 million
consisted of long-term liabilities. Share subscriptions made through the
exercise of Loyal Customer share options and the options for the year 2000
added EUR 4.2 million to shareholders’ equity. Capital expenditures
amounted to EUR 22.1 million. Net working capital totalled EUR 233.6
million and decreased by EUR 3.9 million on the comparison period. The
equity ratio was 61.3 per cent (67.6 per cent) in the report period. The
equity ratio at the end of 2004 was 62.5 per cent.

The Group’s capital employed diminished by EUR 12.1 million from June of
the previous year and stood at EUR 533.8 million towards the end of the
report period (EUR 535.9 million at the end of 2004). Over the past 12
months ROCE improved in line with higher earnings and the decrease in the
amount of capital employed and was 16.0 per cent (14.8 per cent at the end
of 2004).

New long-term financial targets

According to the Stockmann Board’s estimate, in 2005 the Group will
achieve the long-term financial targets that were set in 2001: a 15 per
cent return on capital employed and an operating profit margin of at least
5 per cent. Accordingly, in June the Board of Directors confirmed the
Group’s new financial targets up to 2010. The objective is for the Group’s
return on capital employed to reach 20 per cent in 2010, with an operating
profit margin of at least 8 per cent. The target for Group sales is to
outpace the market. The equity ratio target has been set at a level of at
least 50 per cent. The dividend policy will remain unchanged, the target
being to pay dividends of at least 50 per cent of the profit on ordinary
operations, nevertheless taking into account the financing required to
grow the business.

Organizational changes

On June 17, 2005, Stockmann’s Board of Directors appointed Seppälä Oy’s
managing director, Heikki Väänänen, B.Sc. (Econ.), as director of the
Department Store Division and Group executive vice president, effective 1
November 2005. Heikki Väänänen will also act as the alternate to Group CEO
Hannu Penttilä. The Department Store Division’s present director, Jukka
Hienonen, Stockmann’s executive vice president, will resign from
Stockmann’s employ to become president and CEO of Finnair.

On July 11, 2005, Stockmann’s Board of Directors appointed the sales
director of Stockmann’s Helsinki Department Store, Terhi Okkonen, eMBA, as
managing director of Seppälä Oy and a member of the Stockmann Group’s
Management Committee, effective November 1, 2005.

Capital expenditures

Capital expenditures during the report period totalled EUR 22.1 million
(EUR 27.9 million).

The biggest capital expenditure for the Department Store Division in 2005
is the department store that is to be opened in leased premises in the new
section of the Jumbo Shopping Centre in Vantaa. The department store will
have about 11 000 square metres of retail space and it will be opened in
October 2005. Stockmann’s share of the cost estimate for the project is
about EUR 8 million.

A large-scale project for enlargement and modification works on the
department store in the centre of Helsinki has got under way. The town
plan change required for it was approved by the Helsinki City Council in
June. 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
about 50 000 square metres of retail space. The total cost estimate for
the project is approximately EUR 115 million. The works are estimated to
be completed phase by phase by the end of 2009.

During the latter part of the year the fourth Zara store in Finland will
be opened at the Jumbo Shopping Centre in Vantaa and Stockmann Beauty
stores will be opened in Jyväskylä and at the Sello Shopping Centre in
Espoo. In early 2006, a Stockmann Beauty store will be opened in the
Kamppi shopping mall in Helsinki.

The first Bestseller store operating on the franchising principle was
opened in February at the Mega North Shopping Centre in Moscow. A further
six new Bestseller stores will be opened in Russia during 2005. Apart from
Moscow, Bestseller stores will also be opened in Kazan and St Petersburg.
The flagship Zara store in Russia was opened in the heart of Moscow at the
beginning of June. Russia’s fifth and sixth Zara stores will be opened in
Moscow in August.

The Department Store Division’s capital expenditures came to EUR 17.3
million.

Stockmann Auto’s capital expenditures amounted to EUR 2.5 million, of
which an outlay of EUR 1.6 million was made on vehicles included in
capital assets. Hobby Hall’s capital expenditures amounted to EUR 0.6
million.

Seppälä’s capital expenditures came to EUR 0.5 million. Seppälä opened its
first store in Lithuania in Vilnius at the beginning of April. Seppälä is
aiming to open new stores in Moscow and to expand its operations to St
Petersburg during 2005. In addition, Seppälä is moving to expand its
operations in both Latvia and Lithuania during 2005.

Other capital expenditures in the report period amounted to EUR 1.2
million.

Current projects

In May 2005 Stockmann made an agreement on building a department store and
shopping centre on Nevsky Prospekt in the heart of St Petersburg. The
approximately 10 000 square metre plot that will be obtained for this
purpose is located beside the Vosstaniya Square underground station and in
the immediate vicinity of the Moscow Station.

The shopping centre to be erected will have total floor space of at least
45 000 square metres and in addition to the Stockmann department store, it
will also feature other retail shops as well as a modern car park.

The department store and shopping centre investment will have a price tag
of about EUR 80-110 million, depending on the final floor space to be
built. Stockmann will carry out and finance the construction project
either independently or in cooperation with suitable investors. Plans call
for opening the department store and shopping centre in 2008.

Shares and shareholders

The company’s market capitalization at the end of June was EUR 1 588.5
million (EUR 1 030.9 million). At the end of 2004 the market
capitalization was EUR 1 140.8 million.

Stockmann’s shares outperformed both the HEX General Index and the HEX
Portfolio Index during the report period. At the end of June the stock
exchange price of the Series A share was EUR 29.50, compared with EUR
21.10 at the end of 2004, and the Series B share was likewise selling at
EUR 29.50, as against EUR 21.70 at the end of 2004.

The Helsinki Stock Exchange decided on reducing the trading lot for
Stockmann shares from 50 shares to 20 as from 1 July 2005.

The 4 900 Stockmann shares subscribed for in December 2004 with the share
options for 2000 were entered in the Trade Register on March 16, 2005 and
they were admitted for public trading on the Helsinki Stock Exchange
together with existing shares on March 17, 2005. As a consequence of the
subscriptions the share capital was increased by EUR 9 800.

In April, the Stockmann share options for the year 2000 were exercised to
subscribe for 48 000 Stockmann plc Series B shares with a par value of 2
euros and in May for 30 850 Series B shares. As a consequence of the
subscriptions the share capital was increased by a total of EUR 157 700.
Entries in the Trade Register were made for the 48 000 shares on May 20,
2005, and for the 30 850 shares on June 29, 2005. They were accepted for
public trading on the Helsinki Stock Exchange together with the existing
shares on May 23, 2005 and June 30, 2005.

By exercising the A, B and C share options for 2000, which are quoted on
the Helsinki Stock Exchange, further subscriptions can be made for a total
of 2 246 100 new Series B shares with a par value of 2 euros. The
subscription price for shares to be subscribed for by exercising the A
options is now EUR 13.95, the price through exercise of the B options is
EUR 14.95 and the price through exercise of the C options is EUR 15.95.
The dividends payable annually are deducted from the subscription price.
The subscription period for shares to be subscribed for by exercising the
share options for 2000 ends on April 1, 2007.

A total of 343 902 Stockmann plc Series B shares with a par value of 2
euros were subscribed for with Stockmann Loyal Customer share options
during the subscription period from May 2, 2005 to May 31, 2005. The
subscription rights were exercised by 12 851 Stockmann Loyal Customers. As
a consequence of the subscriptions the share capital was increased by EUR
687 804. The subscription price was EUR 8.81 per share. The shares were
entered in the Trade Register on June 29, 2005, and they became available
for public trading, together with the existing shares, on the Helsinki
Stock Exchange on June 30, 2005. A total of 950 835 Stockmann Series B
shares have been subscribed for with Loyal Customer share options during
2001-2005. The subscription period ended on May 31, 2005.

Following the above-mentioned increases, the share capital is 107 695 424
euros and the total number of Series B shares is 29 283 469.

Stockmann held 396 876 of its own Series B shares (treasury shares) at the
end of June 2005, and they represented 0.7 per cent of all the shares
outstanding and 0.1 per cent of all the votes. Their acquisition cost was
a total of EUR 6.0 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.

Personnel strength

During the report period the Stockmann Group had an average payroll of 10
067 employees, or 1 042 more than in the comparison period. The growth in
the number of employees was attributable mainly to the new department
stores and other stores in Moscow. Converted to full-time staff, the
average number of employees increased by 817 and was 8 135.

At the end of June 2005 the number of staff working abroad was 3 217
people. At the end of June of last year Stockmann had 2 205 people working
abroad. The proportion of the total personnel who were working abroad
increased from 23 per cent in the comparison period to 31 per cent.

Full-year outlook

Retail sales excluding the motor trade are estimated to increase by about
3 per cent in Finland in 2005. The volume of new vehicle sales is
estimated to remain at the previous year’s level. The economies of Russia
and the Baltic countries are anticipated to continue growing at a faster
rate than the Finnish market. The Stockmann Group’s sales in 2005 are
expected to come in at about EUR 1.85 billion.

The Group’s third-quarter earnings are anticipated to improve on the
previous year’s figure.

The Department Store Division’s full-year operating profit is estimated to
improve, Hobby Hall’s result to move into the black and Seppälä’s
operating profit to be markedly higher than in the previous year.
Stockmann Auto’s operating profit will fall significantly short of the
figure reported last year. The Group’s earnings estimate for the full year
is unchanged. Stockmann’s target is to post even better earnings in 2005
than in 2004.

Helsinki, August 11, 2005

STOCKMANN plc

Balance sheet, Group EUR millions June 30, June 30, Dec. 31,
2005 2004 2004
ASSETS
Non-current assets
Intangible assets 25.6 30.5 24.4
Property, plant and equipment 272.9 248.7 268.4
Long-term investments 7.1 7.1 7.1
Long-term receivables, 6.4 4.5 8.5
interenst-bearing
Deferred tax assets 2.9 1.1 2.0
Total non-current assets 314.8 291.9 310.3
Current assets
Inventories 187.8 185.6 195.0
Interest-bearing receivables 103.7 101.5 108.1
Non interest-bearing 88.2 80.9 94.2
receivables
Available-for-sale investments 0.0 1.2 0.0
Securities held in current 1.6 29.8 28.7
assets
Cash and cash equivalents 12.7 15.9 12.7
Total current assets 394.1 414.9 438.7
Total assets 708.9 706.9 749.0
EQUITY AND LIABILITIES
Equity 434.9 478.0 467.9
Minority interest 0.0 0.0 0.0
Total equity 434.9 478.0 467.9
Long-term borrowings, 15.1 51.1 15.3
interest-bearing
Deferred tax liabilities 29.0 30.3 29.2
Current liabilities
Interest-bearing short-term debt 83.9 16.8 52.7
Non interest-bearing short-term 146.1 130.6 183.8
debt
Total current liabilities 230.0 147.4 236.6
Total equity and liabilities 708.9 706.9 749.0

Equity ratio, per cent 61.3 67.6 62.5
Gearing, per cent 19.5 4.7 5.7
Cash flow from operations per 0.26 0.28 1.62
share, EUR
Interest-bearing net debt, -25.5 -83.8 -90.0
EUR mill.*
Number of shares at June 30, 2005, 53 848 53 247 53 420
thousands
Weighted average number of shares, 53 039 52 240 52 544
thousands
Weighted average number of shares, 53 927 52 776 53 509
diluted, thousands

*Interest-bearing liabilities less cash in hand and at banks less
securities held in current assets less interest-bearing debtors

Funds statement, Group 1-6/05 1-6/04 1-12/04
EUR millions
Cash flow from operations 14.0 14.8 86.4
Cash flow into and from
investments
Capital expenditures -23.3 -28.1 -57.1
Cash from non-current assets 0.2 0.5 2.4
Cash flow into and from -23.1 -27.5 -54.7
investments, total
Financial cash flow
Subscriptions with options 4.2 6.7 9.5
Dividend paid -53.3 -70.4 -123.0
Change in short-term loans, 31.2 0.8 1.8
increase (+), decrease (-)
Financial cash flow, total -17.9 -63.0 -111.7
Change in cash funds -27.0 -75.6 -79.9
Cash funds at start of the period 41.4 121.3 121.3
Cash funds at end of the period 14.4 45.7 41.4

Income statement, Group, EUR 1-6/05 1-6/04 Change 1-12/04
millions per cent
Revenue 715.0 684.8 4 1 445.0
Other operating income 2.3 -100 2.4
Materials and consumables -475.4 -463.1 3 -951.5
Salaries and employee -104.6 -99.0 6 -202.2
benefits
Depreciation -16.6 -15.2 9 -30.7
Other operating expenses -92.3 -87.2 6 -183.3
Operating profit 26.2 22.6 16 79.8
Finance income and costs -0.3 0.1 -0.9
Profit before tax 25.9 22.7 14 78.9
Income taxes* -6.8 -3.1 118 -19.6
Profit for the period 19.1 19.6 -2 59.3
Minority interest 0.0 0.0 -3 0.0
Net profit for the period 19.1 19.6 -2 59.3

* The effect of the reduction of tax rate in Finland on the deferred tax
liability in 2004 was EUR -2.6 million.

Earnings per share, EUR 0.36 0.37 -3 1.13
Earnings per share, diluted, 0.35 0.36 -3 1.11
EUR
Operating profit, per cent 3.7 3.3 11 5.5
Equity per share, EUR 8.14 9.05 -10 8.83
Return on equity, per cent, 12.9 * 12.2
moving 12 months
Return on capital employed, 16.0 * 14.8
per cent, moving 12 months
Average number of employees, 8 135 7 318 11 7 812
converted to full-time staff

* No information according to IFRS for the year 2003

SEGMENT INFORMATION

Segments
Sales, EUR millions
Department Store Division 466.9 412.1 13 938.8
Stockmann Auto 218.0 244.3 -11 437.1
Hobby Hall 103.2 103.6 0 214.4
Seppälä 69.9 62.1 13 143.7
Eliminations + shared 0.4 0.5 0.9
Group 858.5 822.5 4 1 735.0

Revenue, EUR millions
Department Store Division 392.3 346.2 13 789.3
Stockmann Auto 178.3 200.3 -11 358.0
Hobby Hall 85.7 86.3 -1 177.9
Seppälä 57.7 51.2 13 118.4
Eliminations + shared 1.1 0.9 1.5
Group 715.0 684.8 4 1 445.0

Operating profit, EUR
millions
Department Store Division 15.8 14.9 6 63.7
Stockmann Auto 1.7 5.7 -70 7.0
Hobby Hall 0.9 -1.6 -2.9
Seppälä 9.8 3.9 154 17.1
Eliminations 0.6 1.0 -1.7
Shared -2.6 -1.2 -3.5
Group 26.2 22.6 16 79.8

Investments, gross, EUR
millions
Department Store Division 17.3 22.6 -23 48.8
Stockmann Auto 2.5 2.6 -2 4.4
Hobby Hall 0.6 0.7 -16 1.2
Seppälä 0.5 0.6 -18 1.2
Shared 1.2 1.4 -14 3.3
Group 22.1 27.9 -21 58.9

Assets, EUR millions 30.6.05 30.6.04 Change 31.12.04
per cent
Department Store Division 429.9 414.8 4 443.1
Stockmann Auto 109.1 94.9 15 113.1
Hobby Hall 97.4 102.1 -5 102.2
Seppälä 27.2 28.1 -4 29.2
Shared 45.3 67.0 -32 61.3
Group 708.9 706.9 0 749.0

Non-interest-bearing
liabilities, EUR millions
Department Store Division 80.5 71.0 13 96.5
Stockmann Auto 39.4 36.3 9 45.1
Hobby Hall 10.4 11.6 -10 17.0
Seppälä 7.2 5.8 25 10.4
Shared 37.4 36.2 3 44.1
Group 175.1 160.9 9 213.1

Market areas Change
1-6/05 1-6/04 per cent 1-12/04
Sales, EUR millions
Finland 1) 717.7 720.8 0 1 492.9
Baltic states 2) 63.4 53.3 19 119.5
Russia 3) 77.4 48.4 60 122.5
Group 858.5 822.5 4 1 735.0
Finland, per cent 83.6 87.6 86.0
International operations, 16.4 12.4 14.0
per cent

Revenue, EUR millions
Finland 1) 595.0 597.6 0 1 237.9
Baltic states 2) 53.9 45.7 18 102.0
Russia 3) 66.1 41.5 59 105.1
Group 715.0 684.8 4 1 445.0
Finland, per cent 83.2 87.3 85.7
International operations, 16.8 12.7 14.3
per cent

Operating profit,
EUR millions
Finland 1) 29.3 25.1 17 76.9
Baltic states 2) 0.9 -2.2 -140 0.2
Russia 3) -3.9 -0.3 2.7
Group 26.2 22.6 16 79.8

Investments, gross,
million euros
Finland 1) 13.7 9.5 45 22.3
Baltic states 2) 0.6 2.1 -71 3.1
Russia 3) 7.8 16.3 -52 33.5
Group 22.1 27.9 -21 58.9
Finland, per cent 62.0 33.9 37.8
International operations, 38.0 66.1 62.2
per cent

Assets, EUR millions Change
30.6.05 30.6.04 per cent 31.12.04
Finland 1) 557.8 574.2 -3 602.2
Baltic states 2) 69.0 75.7 -9 70.9
Russia 3) 82.1 57.0 44 75.9
Group 708.9 706.9 0 749.0
Finland, per cent 78.7 81.2 80.4
International operations, 21.3 18.8 19.6
per cent

1) Department Store Divisions, Stockmann Auto, Hobby Hall and Seppälä
2) Department Store Divisions, Stockmann Auto, Hobby Hall and Seppälä
3) Department Store Divisions and Seppälä

Statement of changes in
equity Share Treasury
premium share Legal Other
Group, EUR millions Equity fund fund reserve funds*
Equity December 31, 2003 105.3 147.1 6.2 0.2 43.7
Translation differences
Deferred tax
liabilities/assets
Depreciation
Own shares -6.2
Financial instruments 0.3
Adjusted equity 105.3 147.1 0.0 0.2 44.1
January 1, 2004
Options exercised 1.2 5.5
Transfer to other funds -0.2 0.1
Cash flow hedges -0.3
Financial instruments 0.4
Dividends
Translation differences
Profit for the period
Equity June 30, 2004 106.5 152.4 0.0 0.2 44.2
Equity December 31, 2004 106.8 154.8 0.0 0.2 44.4
Options exercised 0.8 3.4
Transfer to other funds 0.0 0.0
Cash flow hedges -3.5
Dividends
Translation differences
Profit for the period
Equity June 30, 2005 107.7 158.1 0.0 0.2 40.9

* Excluding deferred tax liability

Statement of changes in equity
Trans-
Minority lation Retained
Group, EUR millions interest reserve earnings Total
Equity December 31, 2003 0.0 -0.1 244.7 547.1
Translation differences 0.1 -0.1 0.0
Deferred tax liabilities/assets -7.5 -7.5
Depreciation -10.8 -10.8
Own shares -6.2
Financial instruments -0.9 -0.6
Adjusted equity January 1, 2004 0.0 0.0 225.4 522.0
Options exercised 6.7
Transfer to other funds 0.0 -0.1
Cash flow hedges -0.3
Financial instruments 0.4
Dividends -70.5 -70.5
Translation differences 0.1 0.1
Profit for the period 0.0 19.6 19.6
Equity June 30, 2004 0.0 0.1 174.6 478.0
Equity December 31, 2004 0.0 -0.1 161.9 467.9
Options exercised 4.2
Transfer to other funds 0.1 0.1
Cash flow hedges -3.5
Dividends -53.0 -53.0
Translation differences 0.0 0.0
Profit for the period 0.0 19.1 19.1
Equity June 30, 2005 0.0 -0.1 128.1 434.9

Contingent liabilities, Group 30.6.05 30.6.04 31.12.04
EUR millions
Mortgages on land and buildings 1.7 1.7 1.7
Pledges 0.1 0.2 0.2
Other commitments 27.2 44.1 24.4
Total 28.9 46.0 26.3

Lease agreements on business
premises, EUR millions
Minimum rents payable on the
basis of binding lease
agreements on business premises
Within one year 59.5 58.5 59.3
After one year 346.9 379.0 397.5
Total 406.3 437.5 456.8

Derivative instruments
Nominal value
Foreign exchange derivatives 127.3 64.7 86.9
Interest rate derivatives 35.0 35.0 35.0

Exchange rates
Country Currency 30.6.05 30.6.04 31.12.04

Russia RUB 34.6370 35.3290 37.7570
Estonia EEK 15.6466 15.6466 15.6466
Latvia LVL 0.6961 0.6570 0.6979
Lithuania LTL 3.4528 3.4529 3.4528

Income statement, Group,
EUR millions Q2/05 Q1/05 Q4/04 Q3/04 Q2/04 Q1/04
quarterly, EUR millions
Revenue 380.9 334.1 429.7 330.6 348.8 336.0
Other operating income 0.0 0.0 0.1 0.0 2.3 0.0
Materials and -247.3 -228.1 -266.6 -221.8 -230.2 -232.9
consumables
Salaries and employee -53.6 -51.0 -58.9 -44.2 -51.2 -47.8
benefits
Depreciation -8.0 -8.5 -7.8 -7.7 -7.7 -7.5
Other operating expenses -47.3 -45.0 -54.0 -42.1 -43.3 -43.9
Operating profit 24.6 1.6 42.4 14.8 18.6 4.0
Finance income and costs -0.5 0.1 -0.1 -0.8 -0.4 0.5
Profit before tax 24.2 1.7 42.2 13.9 18.2 4.5
Income taxes* -6.3 -0.5 -12.6 -3.9 -1.9 -1.2
Profit for the period 17.9 1.2 29.7 10.0 16.4 3.2
Minority interest 0.0 0.0 0.0 0.0 0.0 0.0
Net profit for the 17.9 1.2 29.7 10.0 16.4 3.2
period
* The effect of the
reduction of tax rate in
Finland on the deferred
tax liability in the
second quarter 2004 was
EUR -2.6 million.

Earnings per share, EUR
Basic 0.34 0.02 0.58 0.18 0.32 0.05
Diluted 0.33 0.02 0.56 0.19 0.31 0.05

Sales, EUR millions
Department Store 253.5 213.4 310.2 216.6 212.4 199.6
Division
Stockmann Auto 121.6 96.5 97.3 95.5 126.4 117.9
Hobby Hall 42.7 60.5 64.6 46.2 47.0 56.6
Seppälä 39.9 30.0 43.5 38.1 33.5 28.6
Eliminations + shared 0.2 0.2 0.2 0.2 0.3 0.2
Group 457.9 400.6 515.8 396.7 419.6 402.9

Revenue, EUR millions
Department Store 212.5 179.8 260.8 182.4 178.4 167.8
Division
Stockmann Auto 99.2 79.1 79.5 78.2 103.4 96.8
Hobby Hall 35.5 50.2 53.4 38.3 38.9 47.3
Seppälä 32.9 24.8 35.8 31.4 27.6 23.6
Eliminations + shared 0.8 0.2 0.2 0.4 0.5 0.5
Group 380.9 334.1 429.7 330.6 348.8 336.0

Operating profit,
EUR millions
Department Store 15.2 0.6 37.1 11.7 11.5 3.4
Division
Stockmann Auto 1.5 0.2 0.5 0.9 3.6 2.1
Hobby Hall 0.2 0.7 1.5 -2.7 -0.9 -0.7
Seppälä 8.4 1.3 8.0 5.3 4.4 -0.6
Eliminations 0.7 -0.1 -3.5 0.7 0.5 0.5
Shared -1.5 -1.1 -1.2 -1.1 -0.4 -0.8
Group 24.6 1.6 42.4 14.8 18.6 4.0

This Interim Report is unaudited.

Reconciliation of Balance Sheet in the comparative period

Balance Sheet, IFRS June 30, 2004, FAS Adjust- IFRS
Group, EUR millions ments
ASSETS
Non-current assets
Intangible assets 30.5 30.5
Property, plant and equipment 242.7 6.0 248.7
Long-term investments 28.6 -21.5 7.1
Long-term receivables, interest-bearing 0.9 3.7 4.5
Deferred tax assets 0.8 0.2 1.1
Total non-current assets 303.5 -11.6 291.9
Current assets
Inventories 185.6 185.6
Interest-bearing receivables 98.8 2.8 101.5
Non interest-bearing receivables 80.9 80.9
Available-for-sale investments 1.2 1.2
Securities held in current assets 29.8 29.8
Cash and cash equivalents 15.9 15.9
Total current assets 411.0 3.9 414.9
Total assets 714.5 -7.7 706.9
EQUITY AND LIABILITIES
Equity 502.2 -24.2 478.0
Minority interest 0.0 0.0
Total equity 502.2 -24.2 478.0
Long-term borrowings, interest-bearing 48.9 2.2 51.1
Deferred tax liabilities 23.4 6.9 30.3
Current liabilities
Interest-bearing short-term debt 16.8 16.8
Non interest-bearing short-term debt 123.2 7.4 130.6
Total current liabilities 140.0 7.4 147.4
Total equity and liabilities 714.5 -7.7 706.9

Raconciliation of income statement in the comparative period

Income statement, Group, EUR millions FAS Adjust- IFRS
Income statement January 1 – June 30, 2004 1-6/04 ments 1-6/04
Revenue 684.8 684.8
Other operating income 2.3 2.3
Materials and consumables -463.1 0.0 -463.1
Salaries and employee benefits -99.0 -99.0
Depreciation -14.9 -0.3 -15.2
Other operating expenses -92.4 5.3 -87.2
Operating profit 17.6 5.0 22.6
Finance income and costs 5.1 -5.0 0.1
Profit before tax 22.7 0.0 22.7
Income taxes -4.0 0.9 -3.1
Profit for the period 18.7 0.8 19.6
Minority interest 0.0 0.0
Net profit for the period 18.7 0.8 19.6

Raconciliation of income statement in the comparative period

Income statement, Group, EUR millions FAS Adjust- IFRS
Income statement January 1 – June 30, 2004 4-6/04 ments 4-6/04
Revenue 348.8 348.8
Other operating income 2.3 2.3
Materials and consumables -230.2 0.0 -230.2
Salaries and employee benefits -51.2 -51.2
Depreciation -7.6 -0.1 -7.7
Other operating expenses -46.1 2.8 -43.3
Operating profit 15.9 2.7 18.6
Finance income and costs 2.0 -2.4 -0.4
Profit before tax 17.9 0.3 18.2
Income taxes -2.6 0.7 -1.9
Profit for the period 15.4 1.0 16.4
Minority interest 0.0 0.0
Net profit for the period 15.4 1.0 16.4

Reconciliation of net profit in the comparative period

EUR millions 4-6/04 1-6/04 1-12/04
Net profit for the period before minority 15,4 18,7 58,2
interest according to FAS
Effects of adopting IFRS
Depreciation -0.1 -0.3 -0.5
Costs of share issue 0.2 0.2 0.2
Finance income -0.1 -0.1 -0.3
Financial instuments 0.3 0.2 0.4
Income taxes 0.7 0.9 1.3
IFRS adjustments, total 1.0 0.8 1.1

Net profit for the period acoording to IFRS 16.4 19.6 59.3

Attributable to
To equity holders of the parent 16.4 19.6 59.3
To minority interest 0.0 0.0 0.0

Reconciliation of shareholders’ equity in the comparative period

EUR millions 1.1.04 30.6.04 31.12.04
Total equity according to FAS 547.1 502.2 491.7
Effects of adopting IFRS
Depreciation -10.8 -11.0 -11.3
Finance income 0.0 -0.1 -0.3
Financial instuments -0.6 -0.3 0.2
Income taxes -7.5 -6.6 -6.2
Fund for own shares -6.2 -6.1 -6.1
IFRS adjustments, total -25.1 -24.3 -23.7

Total equity according to IFRS 522.0 478.0 467.9

Attributable to
Equity holders of the parent 522.0 478.0 467.9
Minority interest 0.0 0.0 0.0

STOCKMANN plc

Hannu Penttilä
CEO

DISTRIBUTION
Helsinki Stock Exchange
Principal media

A press and analyst conference will be held today, August 11, 2005, at
14.00 at the World Trade Center, Aleksanterinkatu 17, Helsinki.