STOCKMANN plc INTERIM REPORT January 1 – September 30, 2005

STOCKMANN plc STOCK EXCHANGE RELEASE October 26, 2005, at 11.45

STOCKMANN plc INTERIM REPORT January 1 – September 30, 2005

The Stockmann Group’s profit before taxes improved by 46 per cent to EUR
20.4 million in the third quarter. In January – September Stockmann’s
consolidated sales grew by 5.1 per cent to EUR 1 280.8 million (EUR 1
219.2 million in 2004). The Department Store Division, Seppälä and Hobby
Hall all reported clear growth in operating profit. Stockmann Auto
recorded a decrease in operating profit. Consolidated profit before taxes
showed improvement of EUR 9.6 million, amounting to EUR 46.3 million (EUR
36.6 million). The return on capital employed was 16.7 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 during the report period were EUR 1 280.8
million, up EUR 61.6 million and 5.1 per cent on same-period sales. Net
turnover was EUR 1 066.9 million, increasing by EUR 51.5 million and
likewise by 5.1 per cent on the same period a year earlier. International
operations accounted for an increased share of consolidated sales, rising
from 13 per cent to 17 per cent.

The Group’s gross operating margin grew by EUR 31.2 million to EUR 361.7
million. The relative gross margin improved further and was 33.9 per cent
(32.5 per cent). The relative gross margin improved on the comparison
period in the Seppälä Division and Hobby Hall and it was at the level of
the comparison period in the Department Store Division and Stockmann Auto.
During the report period the Group had hedged against a weakening in the
value of the Russian rouble. When the rouble strengthened against all
expectations, hedging dampened the positive effect on earnings by around
EUR 3 million during the report period. 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.

There was no other operating income in the report period, as against EUR
2.3 million in the comparison period. Operating costs were up EUR 18.0
million. Third-quarter earnings were burdened by a provision amounting to
EUR 0.8 million booked for social security contributions for options still
in the possession of key employees. Depreciation increased by EUR 2.5
million.

Consolidated operating profit increased by EUR 8.3 million on the
comparison period to EUR 45.7 million, amounting to 4.3 per cent of net
turnover. The corresponding figure in the comparison period, not including
other operating income, was 3.5 per cent. Net financial income was up by
EUR 1.3 million on the same period a year earlier and totalled EUR 0.6
million. Gains totalling EUR 0.9 million on the sale of securities were
included in the net financial income for the report period, whereas there
were none in the comparison period. Profit before taxes rose by EUR 9.6
million to EUR 46.3 million (EUR 36.6 million). Growth in earnings
continued vigorously in the third quarter, when profit before taxes rose
by 46 per cent, amounting to EUR 20.4 million (EUR 13.9 million).

Direct taxes were EUR 11.8 million, an increase of EUR 4.7 million on the
previous year. Deferred 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 2005. 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 34.5 million, compared with EUR
29.6 million a year earlier.

Earnings per share were EUR 0.65 (EUR 0.55) and diluted for options they
were EUR 0.64 (EUR 0.55). The above-mentioned change in the deferred tax
liability improved earnings per share in 2004 by EUR 0.05. Equity per
share was EUR 8.51 (EUR 9.24).

Sales and earnings trend by division

The Department Store Division’s sales grew by 13 per cent to EUR 709.5
million. Sales in Finland were up 6 per cent, clearly outstripping growth
in the sector. Sales by International Operations were boosted by the new
department stores that were opened in Moscow in April and December 2004,
the new Zara and Bestseller stores as well as by good same-store sales
growth in all market areas. The Department Store Division’s sales abroad
grew by 42 per cent and their share of the division’s sales rose to 25 per
cent (20 per cent). The Department Store Division’s operating profit
increased by EUR 2.5 million to EUR 29.1 million (EUR 26.6 million). It
was burdened by the start-up costs for new department stores and other
stores abroad. When a new department store opens for business, the result
on operations during the first two years generally is clearly in the red.
Capital expenditures incurred in setting up smaller stores usually start
yielding earnings clearly more quickly than capital expenditures for a
department store. The division’s operating profit in the third quarter was
EUR 13.3 million, an increase of EUR 1.6 million on the figure a year
earlier.

Stockmann Auto’s sales fell by 8 per cent to EUR 313.4 million. The
division’s operating profit was EUR 2.5 million, down EUR 4.1 million on
the comparison period (EUR 6.6 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 operating profit was the transfer of the VW-Audi dealership
in Herttoniemi to the importer as from July 1, 2004. In the third quarter
Stockmann Auto’s operating profit was EUR 0.8 million, on a par with the
comparison period.

Hobby Hall’s sales declined by 2 per cent on the same period a year
earlier and were EUR 147.1 million. Sales in Finland diminished by 3 per
cent owing to the cutback in the store network and the timing of the mail
order catalogues which differed from the previous year. Finland’s online
sales continued their robust growth. Hobby Hall’s sales in the Baltic
countries grew by 2 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 6.1 million. Operating profit was EUR 1.8 million (a loss
of EUR 4.3 million). The division reported a third-quarter operating
profit of EUR 0.9 million, an improvement of EUR 3.6 million on the figure
a year earlier. Hobby Hall’s operating profit has been in the black for
four consecutive quarters already. The positive earnings trend was due to
efficiently carrying through the programme aimed at improving cost-
effectiveness and the gross margin.

Seppälä’s sales increased by 10 per cent on the same period of last year
and were EUR 110.1 million. The growth was especially strong abroad, where
sales were lifted by the stores opened in the Baltic countries and Russia
in 2004 and 2005 as well as the good trend in like-for-like sales. The
number of stores in Finland remained unchanged and sales rose by 5 per
cent. Thanks to higher sales and an improved relative gross margin,
Seppälä’s operating profit increased by a hefty EUR 7.5 million and was
EUR 16.6 million (EUR 9.1 million). Seppälä’s third-quarter operating
profit was EUR 6.9 million, or EUR 1.6 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 12.1 million at the end of the report period, as against
EUR 53.2 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
September were EUR 98.9 million (EUR 67.8 million), of which EUR 13.4
million consisted of long-term borrowings. Share subscriptions made
through the exercise of Loyal Customer share options and the options for
the year 2000 added EUR 9.1 million to shareholders’ equity. Capital
expenditures amounted to EUR 39.1 million. Net working capital totalled
EUR 251.5 million and was up by EUR 17.4 million on the comparison period.
The equity ratio was 59.6 per cent (64.0 per cent) in the report period.
The equity ratio at the end of 2004 was 62.5 per cent.

Over the past 12 months the return on capital employed improved in line
with higher earnings and the decrease in the amount of capital employed
and was 16.7 per cent (14.8 per cent at the end of 2004). The Group’s ROCE
diminished by EUR 1.4 million from September of the previous year and
stood at EUR 554.9 million towards the end of the report period (EUR 535.9
million at the end of 2004).

New long-term financial targets

According to the estimate drawn up by Stockmann’s Board of Directors, 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.

Organisational 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
November 1, 2005. Mr Väänänen will also act as the alternate to Group CEO
Hannu Penttilä. The Department Store Division’s present head, Stockmann’s
executive vice president Jukka Hienonen will resign from Stockmann’s
employ to become president and CEO of Finnair.

On August 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 39.1 million
(EUR 40.4 million).

The single largest capital expenditure for the Department Store Division
in 2005 is the department store 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 open for
business at the end of October. Stockmann’s share of the total costs for
the project comes to about EUR 7.5 million.

A large-scale project for enlarging and modifying the department store in
the centre of Helsinki has got under way. The alterations to the town plan
necessitated by the project were approved by the Helsinki City Council in
June. According to the plan, the department store’s commercial premises
will be extended 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 about 50 000
square metres of retail space in all. The total cost estimate for the
project is approximately EUR 115 million. The work is estimated to be
completed in phases by the end of 2009.

New Stockmann Beauty stores have been opened in Jyväskylä and at the Sello
Shopping Centre in Espoo. Finland’s fourth Zara store opens for business
at the Jumbo Shopping Centre in Vantaa in October. 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 Moscow in February and a second store opened in September. A
further five Bestseller stores will be opened in Russia during 2005, in
Moscow, Kazan and St Petersburg. The flagship Zara store in Russia was
opened in the heart of Moscow in June, and two other Zara stores opened
for business in Moscow in August. A further new Zara store will be opened
in Moscow during 2005. This will mean that there are seven Zara stores
operating in Moscow.

The Department Store Division’s capital expenditures came to EUR 32.0
million.

Stockmann Auto’s capital expenditures amounted to EUR 2.8 million, of
which an outlay of EUR 1.8 million was made on vehicles included in
capital assets. Stockmann Auto expanded its operations at its current
premises in Tampere in October with the launch of a Ford dealership there.
Apart from the Helsinki metropolitan area and Turku, branching out Ford
sales to Tampere became timely when the location-limiting clause in the
Block Exemption decree that regulates vehicle sales at EU level was
removed as from October 1, 2005.

Hobby Hall’s capital expenditures amounted to EUR 0.8 million.

Seppälä’s capital expenditures came to EUR 1.7 million. Seppälä opened its
first store in Vilnius, Lithuania, in April and its first store in St
Petersburg in September. Two Seppälä stores were opened in Latvia during
the report period. Seppälä will open further stores in Moscow and St
Petersburg during 2005, so there will be seven stores operating in Russia
by year’s end. Furthermore, a total of three new stores will be opening in
Latvia and Lithuania by the end of the year.

Other capital expenditures in the report period amounted to EUR 1.8
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 planned shopping centre will have total floor space of at least 45 000
square metres and in addition to the full-scale Stockmann department
store, plans include other retail shops, a hotel and underground parking
facilities.

The department store and shopping centre investment will have a price tag
of about EUR 80-110 million, depending on the final amount of floor space.
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 at the end of 2008.

Shares and shareholders

The company’s market capitalization at the end of September was EUR 1
820.0 million (EUR 1 073.8 million). At the end of 2004 the market
capitalization was EUR 1 140.8 million.

Stockmann’s shares outperformed both the OMX Helsinki Index (the former
HEX General Index) and the OMX Helsinki Cap Index (the former HEX
Portfolio Index) during the report period. At the end of September the
stock exchange price of the Series A share was EUR 33.70, compared with
EUR 21.10 at the end of 2004, and the Series B share was selling at EUR
33.71, 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 July 1, 2005.

The 4 900 Stockmann plc Series B shares with a par value of 2 euros
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.

In the report period, the Stockmann share options for the year 2000 were
exercised to subscribe for 410 930 Stockmann plc Series B shares with a
par value of 2 euros, of which 332 080 shares were subscribed for in the
third quarter. As a consequence of the subscriptions the share capital was
increased by a total of EUR 821 860. Of the shares subscribed for in the
third quarter 148 780 shares were entered in the Trade Register on August
26, 2005 and 183 300 shares were entered on October 6, 2005. They were
accepted for public trading on the Helsinki Stock Exchange together with
the existing shares on August 29, 2005 and October 7, 2005, respectively.

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 1 914 020 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 were 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 108 359 584
euros and the total number of Series B shares is 29 615 549.

Stockmann held 396 876 of its own Series B shares (treasury shares) at the
end of September 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 authorisations 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
191 employees, or 908 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 as well as to the new department store
at the Jumbo Shopping Centre in Vantaa. Converted to full-time staff, the
average number of employees increased by 716 and was 8 275.

At the end of September 2005 the number of staff working abroad was 3 533
people. At the end of September last year Stockmann had 2 463 people
working abroad. The proportion of the total personnel who were working
abroad increased from 27 per cent in the comparison period to 35 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-car sales is estimated to
increase on the previous year. 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 fourth-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 operating profit is estimated to pick up and to be
clearly in the black. Seppälä’s operating profit will be significantly up
on the previous year. Stockmann Auto’s operating profit will fall short of
the figure reported last year. The Group’s earnings estimate for the full
year is unchanged: Stockmann will post even better earnings in 2005 than
in 2004.

Helsinki, October 26, 2005

STOCKMANN plc

Balance sheet, Group EUR millions 30.9.05 30.9.04 31.12.04
ASSETS
Non-current assets
Intangible assets 27.8 36.3 24.4
Property, plant and equipment 278.1 247.3 268.4
Long-term investments 6.5 7.1 7.1
Long-term receivables, 4.9 6.3 8.5
interenst-bearing
Deferred tax assets 2.8 1.1 2.0
Total non-current assets 320.2 298.0 310.3
Current assets
Inventories 242.1 237.1 195.0
Interest-bearing receivables 100.9 98.2 108.1
Non interest-bearing 89.2 75.3 94.2
receivables
Available-for-sale investments 0.0 1.3 0.0
Securities held in current 1.4 39.7 28.7
assets
Cash and cash equivalents 10.7 13.5 12.7
Total current assets 444.3 465.1 438.7
Total assets 764.5 763.1 749.0
EQUITY AND LIABILITIES
Equity 456.0 488.5 467.8
Minority interest 0.0 0.0 0.0
Total equity 456.0 488.5 467.9
Long-term borrowings, 13.4 50.9 15.3
interest-bearing
Deferred tax liabilities 28.9 30.3 29.2
Current liabilities
Interest-bearing short-term debt 85.5 16.9 52.7
Non interest-bearing short-term 180.7 176.5 183.8
debt
Total current liabilities 266.2 193.5 236.6
Total equity and liabilities 764.5 763.1 749.0

Equity ratio, per cent 59.6 64.0 62.5
Gearing, per cent 19.0 3.0 5.7
Cash flow from operations per 0.41 0.60 1.62
share, EUR
Interest-bearing net debt, -19.1 -89.9 -90.0
EUR mill.*
Number of shares at September 30, 53.996 53.250 53.420
2005, thousands
Weighted average number of shares, 53.017 52.442 52.544
thousands
Weighted average number of shares, 53.964 52.999 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 1-9/05 1-9/04 1-12/04
EUR millions
Cash flow from operations 21.5 31.9 86.4
Cash flow into and from
investments
Capital expenditures -40.7 -40.2 -57.1
Cash from non-current assets 1.8 2.8 2.4
Cash flow into and from -38.9 -37.4 -54.7
investments, total
Financial cash flow
Subscriptions with options 9.1 6.7 9.5
Dividend paid -53.4 -70.4 -123.0
Change in short-term loans, 32.3 1.1 1.8
increase (+), decrease (-)
Financial cash flow, total -12.0 -62.7 -111.7
Change in cash funds -29.3 -68.1 -79.9
Cash funds at start of the period 41.4 121.3 121.3
Cash funds at end of the period 12.1 53.2 41.4

Income statement, Group, EUR 1-9/05 1-9/04 Change 1-12/04
millions per cent
Revenue 1 066.9 1 015.4 5 1 445.0
Other operating income 2.3 -100 2.4
Materials and consumables -705.2 -684.9 3 -951.5
Salaries and employee -153.2 -143.2 7 -202.2
benefits
Depreciation -25.4 -22.9 11 -30.7
Other operating expenses -137.3 -129.3 6 -183.3
Operating profit 45.7 37.4 22 79.8
Finance income and costs 0.6 -0.7 -0.9
Profit before tax 46.3 36.6 26 78.9
Income taxes* -11.8 -7.0 67 -19.6
Profit for the period 34.5 29.6 17 59.3
Minority interest 0.0 0.0 -1 0.0
Net profit for the period 34.5 29.6 17 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 0.65 0.55 18 1.13
Earnings per share, diluted, 0.64 0.55 16 1.11
EUR
Operating profit, per cent 4.3 3.7 16 5.5
Equity per share, EUR 8.51 9.24 -8 8.83
Return on equity, per cent, 13.6 * 12.2
moving 12 months
Return on capital employed, 16.7 * 14.8
per cent, moving 12 months
Average number of employees, 8 277 7.559 9 7 812
converted to full-time staff

* No information according to IFRS for the year 2003

SEGMENT INFORMATION

Segments 1-9/05 1-9/04 Change 1-12/04
per cent
Sales, EUR millions
Department Store Division 709.5 628.7 13 938.8
Stockmann Auto 313.4 339.8 -8 437.1
Hobby Hall 147.1 149.8 -2 214.4
Seppälä 110.1 100.2 10 143.7
Eliminations + shared 0.7 0.7 0.9
Group 1 280.8 1 219.2 5 1 735.0

Revenue, EUR millions
Department Store Division 596.2 528.5 13 789.3
Stockmann Auto 256.1 278.4 -8 358.0
Hobby Hall 122.1 124.5 -2 177.9
Seppälä 90.8 82.6 10 118.4
Eliminations + shared 1.6 1.3 1.5
Group 1 066.9 1 015.4 5 1 445.0

Operating profit, EUR
millions
Department Store Division 29.1 26.6 10 63.7
Stockmann Auto 2.5 6.6 -62 7.0
Hobby Hall 1.8 -4.3 -2.9
Seppälä 16.6 9.1 82 17.1
Eliminations -0.3 0.7 -1.7
Shared -4.0 -1.3 -3.5
Group 45.7 37.4 22 79.8

Investments, gross, EUR
millions
Department Store Division 32.0 33.1 -3 48.8
Stockmann Auto 2.8 3.5 -20 4.4
Hobby Hall 0.8 0.9 -10 1.2
Seppälä 1.7 1.0 76 1.2
Shared 1.8 1.9 -4 3.3
Group 39.1 40.4 -3 58.9

Assets, EUR millions 30.9.05 30.9.04 Change 31.12.04
per cent
Department Store Division 480.4 453.7 6 443.1
Stockmann Auto 96.0 97.7 -2 113.1
Hobby Hall 104.1 98.9 5 102.2
Seppälä 28.5 28.2 1 29.2
Shared 55.6 84.6 -34 61.3
Group 764.5 763.1 0 749.0

Non-interest-bearing 30.9.05 30.9.04 Change 31.12.04
liabilities, EUR millions per cent
Department Store Division 108.6 89.3 22 96.5
Stockmann Auto 31.9 44.3 -28 45.1
Hobby Hall 19.1 18.4 4 17.0
Seppälä 8.9 7.4 20 10.4
Shared 41.0 47.4 -14 44.1
Group 209.6 206.8 1 213.1

Market areas Change
1-9/05 1-9/04 per cent 1-12/04
Sales, EUR millions
Finland 1) 1 061.1 1 058.2 0 1 492.9
Baltic states 2) 95.8 82.0 17 119.5
Russia 3) 123.9 79.0 57 122.5
Group 1 280.8 1 219.2 5 1 735.0
Finland, per cent 82.8 86.8 86.0
International operations, 17.2 13.2 14.0
per cent

Revenue, EUR millions
Finland 1) 879.8 877.7 0 1.237.9
Baltic states 2) 81.5 70.0 16 102.0
Russia 3) 105.7 67.8 56 105.1
Group 1 066.9 1 015.4 5 1 445.0
Finland, per cent 82.5 86.4 85.7
International operations, 17.5 13.6 14.3
per cent

Operating profit,
EUR millions
Finland 1) 47.3 39.9 19 76.9
Baltic states 2) 3.0 -2.6 0.2
Russia 3) -4.6 0.1 2.7
Group 45.7 37.4 22 79.8

Investments, gross,
million euros
Finland 1) 22.7 14.4 58 22.3
Baltic states 2) 1.0 2.4 -55 3.1
Russia 3) 15.4 23.6 -35 33.5
Group 39.1 40.4 -3 58.9
Finland, per cent 58.0 35.7 37.8
International operations, 42.0 64.3 62.2
per cent

Assets, EUR millions Change
30.9.05 30.9.04 per cent 31.12.04
Finland 1) 592.3 615.1 -4 602.2
Baltic states 2) 72.9 75.6 -4 70.9
Russia 3) 99.3 72.4 37 75.9
Group 764.5 763.1 0 749.0
Finland, per cent 77.5 80.6 80.4
International operations, 22.5 19.4 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
Cash flow hedges
Financial instruments 0.5
Dividends
Translation differences
Profit for the period
Equity September 30, 2004 106.5 152.4 0.0 0.2 44.6
Equity December 31, 2004 106.8 154.8 0.0 0.2 44.4
Options exercised 3.9 5.2
Transfer to other funds 0.1 0.1
Cash flow hedges -2.8
Dividends
Translation differences
Profit for the period
Equity September 30, 2005 110.7 160.1 0.0 0.2 41.7

* 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 6.8
Transfer to other funds 0.2 0.0
Cash flow hedges 0.0
Financial instruments 0.5
Dividends -70.5 -70.5
Translation differences 0.0 0.0
Profit for the period 0.0 29.6 29.6
Equity September 30, 2004 0.0 0.0 184.7 488.5
Equity December 31, 2004 0.0 -0.1 161.9 467.9
Options exercised 9.1
Transfer to other funds 0.0 0.2
Cash flow hedges -2.8
Dividends -53.0 -53.0
Translation differences 0.0 0.0
Profit for the period 0.0 34.5 34.5
Equity September 30, 2005 0.0 -0.1 143.4 456.0

Contingent liabilities, Group 30.9.05 30.9.04 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 21.0 44.1 24.4
Total 22.8 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 48.4 69.2 59.3
After one year 351.6 363.5 397.5
Total 400.0 432.6 456.8

Derivative instruments
Nominal value
Foreign exchange derivatives 80.2 75.3 86.9
Interest rate derivatives 35.0 35.0 35.0

Exchange rates
Country Currency 30.9.05 30.9.04 31.12.04

Russia RUB 34,3340 36,2540 37,7570
Estonia EEK 15,6466 15,6466 15,666
Latvia LVL 0,6960 0,6677 0,6979
Lithuania LTL 3,4528 3,4528 3,4528

Income statement, Group, EUR millions
Q3/05 Q2/05 Q1/05
quarterly, EUR millions
Revenue 351.8 380.9 334.1
Other operating income 0.0 0.0 0.0
Materials and consumables -229.9 -247.3 -228.1
Salaries and employee benefits -48.6 -53.6 -51.0
Depreciation -8.9 -8.0 -8.5
Other operating expenses -45.0 -47.3 -45.0
Operating profit 19.5 24.6 1.6
Finance income and costs 0.9 -0.5 0.1
Profit before tax 20.4 24.2 1.7
Income taxes* -5.0 -6.3 -0.5
Profit for the period 15.4 17.9 1.2
Minority interest 0.0 0.0 0.0
Net profit for the period 15.4 17.9 1.2
* 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 0.29 0.34 0.02
Diluted 0.29 0.33 0.02

Sales, EUR millions
Department Store Division 242.6 253.5 213.4
Stockmann Auto 95.4 121.6 96.5
Hobby Hall 43.9 42.7 60.5
Seppälä 40.1 39.9 30.0
Eliminations + shared 0.2 0.2 0.2
Group 422.3 457.9 400.6

Revenue, EUR millions
Department Store Division 204.0 212.5 179.8
Stockmann Auto 77.8 99.2 79.1
Hobby Hall 36.4 35.5 50.2
Seppälä 33.1 32.9 24.8
Eliminations + shared 0.6 0.8 0.2
Group 351.9 380.9 334.1

Operating profit,
EUR millions
Department Store Division 13.3 15.2 0.6
Stockmann Auto 0.8 1.5 0.2
Hobby Hall 0.9 0.2 0.7
Seppälä 6.9 8.4 1.3
Eliminations -0.9 0.7 -0.1
Shared -1.4 -1.5 -1.1
Group 19.5 24.6 1.6

Income statement, Group, EUR millions
Q4/04 Q3/04 Q2/04 Q1/04
quarterly, EUR millions
Revenue 429.7 330.6 348.8 336.0
Other operating income 0.1 0.0 2.3 0.0
Materials and consumables -266.6 -221.8 -230.2 -232.9
Salaries and employee benefits -58.9 -44.2 -51.2 -47.8
Depreciation -7.8 -7.7 -7.7 -7.5
Other operating expenses -54.0 -42.1 -43.3 -43.9
Operating profit 42.4 14.8 18.6 4.0
Finance income and costs -0.1 -0.8 -0.4 0.5
Profit before tax 42.2 13.9 18.2 4.5
Income taxes* -12.6 -3.9 -1.9 -1.2
Profit for the period 29.7 10.0 16.4 3.2
Minority interest 0.0 0.0 0.0 0.0
Net profit for the period 29.7 10.0 16.4 3.2
* 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 0.58 0.18 0.32 0.05
Diluted 0.56 0.19 0.31 0.05

Sales, EUR millions
Department Store Division 310.2 216.6 212.4 199.6
Stockmann Auto 97.3 95.5 126.4 117.9
Hobby Hall 64.6 46.2 47.0 56.6
Seppälä 43.5 38.1 33.5 28.6
Eliminations + shared 0.2 0.2 0.3 0.2
Group 515.8 396.7 419.6 402.9

Revenue, EUR millions
Department Store Division 260.8 182.4 178.4 167.8
Stockmann Auto 79.5 78.2 103.4 96.8
Hobby Hall 53.4 38.3 38.9 47.3
Seppälä 35.8 31.4 27.6 23.6
Eliminations + shared 0.2 0.4 0.5 0.5
Group 429.7 330.6 348.8 336.0

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

This Interim Report is unaudited.

Reconciliation of Balance Sheet in the comparative period

Balance Sheet, IFRS September 30, 2004, FAS Adjust- IFRS
Group, EUR millions ments
ASSETS
Non-current assets
Intangible assets 36.3 36.3
Property, plant and equipment 241.5 5.8 247.3
Long-term investments 28.6 -21.5 7.1
Long-term receivables, interest-bearing 0.8 5.5 6.3
Deferred tax assets 0.8 0.2 1.1
Total non-current assets 308.0 -9.9 298.0
Current assets
Inventories 237.1 237.1
Interest-bearing receivables 97.8 0.4 98.2
Non interest-bearing receivables 71.3 4.1 75.3
Available-for-sale investments 1.3 1.3
Securities held in current assets 39.7 39.7
Cash and cash equivalents 13.5 13.5
Total current assets 459.3 5.7 465.1
Total assets 767.3 -4.2 763.1
EQUITY AND LIABILITIES
Equity 512.2 -23.7 488.5
Minority interest 0.0 0.0
Total equity 512.2 -23.7 488.5
Long-term borrowings, interest-bearing 48.7 2.2 50.9
Deferred tax liabilities 23.4 6.8 30.3
Current liabilities
Interest-bearing short-term debt 16.9 16.9
Non interest-bearing short-term debt 166.1 10.5 176.5
Total current liabilities 183.0 10.5 193.5
Total equity and liabilities 767,3 -4,2 763,1

Raconciliation of income statement in the comparative period

Income statement, Group, EUR millions FAS Adjust- IFRS
Income statement January 1 – September 30, 1-9/04 ments 1-9/04
2004
Revenue 1 015.4 1 015.4
Other operating income 2.3 2.3
Materials and consumables -684.9 0.0 -684.9
Salaries and employee benefits -143.2 -143.2
Depreciation -22.5 -0.4 -22.9
Other operating expenses -136.7 7.5 -129.3
Operating profit 30.3 7.1 37.4
Finance income and costs 6.4 -7.2 -0.7
Profit before tax 36.7 -0.1 36.6
Income taxes -8.0 1.0 -7.0
Profit for the period 28.7 0.9 29.6
Minority interest 0.0 0.0
Net profit for the period 28.7 0.9 29.6

Raconciliation of income statement in the comparative period

Income statement, Group, EUR millions FAS Adjust- IFRS
Income statement January 1 – September 30, 7-9/04 ments 7-9/04
2004
Revenue 330.6 330.6
Other operating income 0.0 0.0
Materials and consumables -221.8 0.0 -221.8
Salaries and employee benefits -44.2 -44.2
Depreciation -7.6 -0.1 -7.7
Other operating expenses -44.3 2.2 -42.1
Operating profit 12.7 2.1 14.8
Finance income and costs 1.3 -2.1 -0.8
Profit before tax 14.0 -0.1 13.9
Income taxes -4.1 0.2 -3.9
Profit for the period 10.0 0.1 10.0
Minority interest 0.0 0.0
Net profit for the period 10.0 0.1 10.0

Reconciliation of net profit in the comparative period

EUR millions 7-9/04 1-9/04 1-12/04
Net profit for the period before minority 10.0 28.7 58.2
interest according to FAS
Effects of adopting IFRS
Depreciation -0.1 -0.4 -0.5
Costs of share issue 0.0 0.2 0.2
Finance income -0.1 -0.2 -0.3
Financial instuments 0.1 0.3 0.4
Income taxes 0.2 1.0 1.3
IFRS adjustments, total 0.0 0.9 1.1

Net profit for the period acoording to IFRS 10.0 29.6 59.3

Attributable to
To equity holders of the parent 10.0 29.6 59.3
To minority interest 0.0 0.0 0.0

Reconciliation of shareholders’ equity in the comparative period

EUR millions 1.1.04 30.9.04 31.12.04
Total equity according to FAS 547.1 512.2 491.7
Effects of adopting IFRS
Depreciation -10.8 -11.2 -11.3
Finance income 0.0 -0.2 -0.3
Financial instuments -0.6 0.3 0.2
Income taxes -7.5 -6.5 -6.2
Fund for own shares -6.2 -6.0 -6.1
IFRS adjustments, total -25.1 -23.7 -23.7

Total equity according to IFRS 522.0 488.5 467.9

Attributable to
Equity holders of the parent 522.0 488.5 467.9
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, October 26, 2005, at
14.00 at the World Trade Center, Aleksanterinkatu 17, Helsinki.