STOCKMANN plc INTERIM REPORT January 1 – September 30, 2006

STOCKMANN plc STOCK EXCHANGE RELEASE October 25, 2006, at 12.00

STOCKMANN plc INTERIM REPORT January 1 – September 30, 2006

The Stockmann Group’s profit before taxes grew by 70 per cent, or EUR 32.6
million, to EUR 78.9 million (EUR 46.3 million in 2005). Profit from
continuing operations before taxes was EUR 49.3 million (EUR 41.9
million). Other operating income amounted to EUR 34.0 million. As a
consequence of disposals, aggregate sales decreased by 15 per cent to EUR
1 088.2 million (EUR 1 280.8 million in 2005). Sales from continuing
operations increased by 8 per cent. The return on capital employed was
24.6 per cent (16.7 per cent) and earnings per share were EUR 1.23 (EUR
0.65). The earnings estimate for 2006 is unchanged.

Changes in the Group structure

Stockmann sold the entire shares outstanding in its subsidiary Stockmann
Auto Oy Ab for a total debt-free price of EUR 67.9 million. The capital
gain on the transactions was a total of EUR 7.4 million. Concurrently,
Stockmann and Veho Group Oy Ab launched wide-ranging loyal customer
cooperation in the area of vehicle sales and services.

Stockmann sold its subsidiary that carries on the Zara business in Russia
to the owner of the Zara trademark, the Inditex Group of Spain, under an
agreement signed on January 30, 2006. Pursuant to the agreement that was
made, operations in Russia have been carried out for Inditex’s account as
from January 1, 2006. The State Antimonopoly Committee of the Russian
Federation approved the sale of shares in June, and the deal closed at the
end of June. The purchase price was EUR 41.5 million. The capital gain on
the sale of shares, EUR 21.9 million, has been booked to the second
quarter. Stockmann continues the Zara business in Finland.

Financial reporting

Stockmann adopted International Financial Reporting Standards (IFRS) on
January 1, 2005. The accounting policies and calculation methods applied
in the Interim Report are the same as those in the 2005 financial
statements. In the interim reports for 2006, Stockmann Auto and the Zara
business in Russia are treated as discontinued operations in accordance
with IFRS 5. Contrary to previous announcements, Stockmann will adopt the
accounting standard ‘IFRS 7 Financial Instruments: Disclosures’ in 2007.
The figures are unaudited.

Sales and result

The Stockmann Group’s sales from continuing operations grew by 8 per cent
to EUR 1 013.3 million. Sales from continuing operations grew by 3 per
cent in Finland and 28 per cent abroad. Sales generated by International
Operations grew, accounting for 24 per cent of sales from continuing
operations (20 per cent). As a consequence of disposals, the Group’s
aggregate sales decreased by 15 per cent to EUR 1 088.2 million (EUR 1
280.8 million). Similarly, consolidated revenue diminished by 15 per cent
to EUR 911.0 million (EUR 1 066.9 million).

The gross margin on continuing operations improved by EUR 28.2 million to
EUR 344.5 million. However, because the divested businesses were no longer
included in the gross margin, the Group’s aggregate gross margin decreased
by EUR 8.7 million and was EUR 353.0 million. The relative gross margin
was 38.7 per cent (33.9 per cent). The relative growth margin increased at
Hobby Hall and the Department Store Division, but was down slightly at
Seppälä. The change in the sales mix contributed to improving the Group’s
relative gross margin because the low-margin vehicle sales were
discontinued from the beginning of March. Operating costs were down EUR
6.7 million and depreciation decreased by EUR 1.2 million. Operating
profit was up EUR 33.3 million to EUR 79.0 million (EUR 45.7 million).
Operating profit from continuing operations grew by EUR 7.8 million to EUR
49.4 million.

Other operating income, EUR 34.0 million, came from the capital gains on
the disposals of Stockmann Auto and the Zara business in Russia as well as
from the capital gain on the unbuilt part of a plot of land in Tallinn.
The capital gain on the portion of the plot in Tallinn, EUR 4.7 million,
is included in continuing operations. In the comparison period there was
no other operating income.

Net financial income and expenses decreased by EUR 0.7 million and were
EUR 0.1 million negative (EUR 0.6 million). Capital gains of EUR 0.8
million on sales of shares were included in net financial income and
expenses, as against EUR 0.9 million a year earlier.

Profit before taxes was EUR 78.9 million, up EUR 32.6 million on the
figure a year earlier. Profit from continuing operations before taxes
increased by EUR 7.4 million to EUR 49.3 million. Third-quarter pre-tax
profit on continuing operations was up EUR 2.2 million to EUR 20.4 million
(EUR 18.2 million).

Direct taxes were EUR 12.0 million, an increase of EUR 0.2 million on the
previous year. The capital gains on the sale of the shares in Stockmann
Auto Oy Ab and in the company carrying on the Zara business in Russia, EUR
29.3 million, are tax-free income.

Net profit for the report period was EUR 66.9 million, compared with EUR
34.5 million a year earlier. Net profit for the report period from
continuing operations increased by EUR 5.1 million to EUR 37.4 million.

Earnings per share were EUR 1.23 (EUR 0.65) and diluted for options they
were EUR 1.22 (EUR 0.64). Earnings per share from continuing operations
were EUR 0.69 (EUR 0.59) and diluted for options they were EUR 0.68 (EUR
0.58). Equity per share was EUR 9.54 (EUR 8.51).

Sales and earnings trend by business segment

The Department Store Division’s sales grew by 11 per cent to EUR 755.6
million (EUR 679.8 million). Sales in Finland were up 6 per cent. Sales
were spurred by the new department store that was opened in the Jumbo
Shopping Centre in Vantaa in October 2005. The extensive enlargement and
renovation work in the Helsinki department store, causing about 2 000-3
000 square metres of retail space to be continuously out of use, has not
had a substantial effect on the main department store’s sales, though many
new shopping centres have been opened in Helsinki metropolitan area over
the same period. International operations’ sales were lifted by the good
like-for-like retail performance by the department stores in Russia and
the Baltic countries as well as by the new Bestseller stores that were
opened in Russia. Sales by International operations grew by 30 per cent
and its share of the division’s sales rose to 26 per cent (22 per cent).
The Department Store Division’s operating profit increased by EUR 7.6
million to EUR 35.2 million (EUR 27.6 million). Earnings in the report
period were burdened by the start-up costs for the department store that
was opened in the Jumbo Shopping Centre in Vantaa. Earnings from
international operations showed a very positive trend. In Riga and Moscow
in particular, the results of the department stores that were opened in
2003 and 2004 improved markedly. The Department Store Division’s result
was also buoyed by the EUR 4.7 million capital gain on the sale of the
unbuilt portion of the department store plot that was sold in Tallinn and
booked to earnings in the second quarter. The division’s operating profit
in the third quarter was EUR 13.1 million, an increase of EUR 1.0 million
on the figure a year earlier.

Because of a development programme aiming at improving profitability,
Hobby Hall’s sales were down 2 per cent to EUR 144.3 million (EUR 147.1
million). The decrease in sales came in the first quarter. In the second
and third quarters, sales grew by a total of 6 per cent. Sales abroad were
17 per cent of aggregate sales (17 per cent). Online sales continued their
robust growth, making up 47 per cent of Hobby Hall’s distance sales in
Finland (35 per cent) and 32 per cent of Hobby Hall’s distance sales in
Estonia (20 per cent). Thanks to effective cost management and the
increase in the relative gross margin that was achieved through a revamped
product assortment, Hobby Hall’s operating profit improved by EUR 1.9
million to EUR 3.7 million (EUR 1.8 million). The division reported a
third-quarter operating profit of EUR 2.1 million, up EUR 1.2 million on
the figure a year earlier. In autumn 2006, Hobby Hall conducted test
marketing for mail order sales in the Moscow area, during which it tested
factors such as how distance retailing logistics work in Russia. On the
basis of the test marketing, Hobby Hall will take a decision on follow-up
actions by the end of the year.

Seppälä’s sales rose by 2 per cent on the same period a year earlier and
were EUR 112.8 million (EUR 110.1 million). Sales grew strongly in the
Baltic countries and Russia, where they were boosted by the new stores
that were opened towards the end of 2005 and in 2006 as well as by the
good like-for-like sales trend. Seppälä’s sales abroad grew by 56 per cent
and its share of the division’s aggregate sales rose to 21 per cent (14
per cent). Sales in Finland fell by 6 per cent. Seppälä’s number of stores
in Finland was unchanged during a period when competition hotted up, with
new shopping centres and stores opening both in the Helsinki metropolitan
area and in the smaller regional centres. Furthermore, the exceptionally
warm weather in August-September hampered the start-up of launching the
autumn collections, particularly in Finland. Owing to the effect of larger
price discounts than a year ago, Seppälä’s relative gross margin decreased
slightly on the comparison period but remained at a high level on an
international yardstick. Due to the energetic establishment of new stores
in Russia and the Baltic countries, fixed costs rose more swiftly than
sales. Seppälä’s operating profit was EUR 13.8 million (EUR 16.6 million).
Seppälä’s third-quarter operating profit was EUR 5.4 million, compared
with EUR 6.9 million a year earlier.

Stockmann Auto’s sales in January-February were EUR 74.8 million and it
reported operating profit of EUR 7.7 million. The operating profit figure
includes the EUR 7.4 million capital gain on the disposal of the Stockmann
Auto businesses. Stockmann Auto was transferred to the new owners on March
1, 2006.

Financing and capital employed

Stockmann’s financial position remained strong. Interest-bearing
liabilities at the end of September were EUR 54.1 million (EUR 98.9
million), of which EUR 23.4 million consisted of long-term borrowings (EUR
13.4 million). EUR 10.0 million of new long-term borrowings was drawn down
during the report period. Liquid assets amounted to EUR 17.0 million at
the end of the report period, as against EUR 12.1 million a year earlier
and EUR 18.4 million at the end of 2005. Gross capital expenditures during
the report period came to EUR 90.1 million. The proceeds from disposals of
businesses and properties generated a total of EUR 101.7 million in cash.
Net working capital amounted to EUR 239.5 million at the end of September,
as against EUR 251.5 million a year earlier and EUR 237.9 million at the
end of 2005. Dividend payouts totalled EUR 59.5 million. Subscriptions
made by exercising the 2000 share options added EUR 5.8 million to
shareholders’ equity. The equity ratio increased on the comparison period
and was 71.7 per cent (59.6 per cent). The equity ratio at the end of 2005
was 66.4 per cent.

The return on capital employed over the past 12 months improved as a
result of the higher earnings and was 24.6 per cent (19.6 per cent at the
end of 2005). The Group’s capital employed increased by EUR 18.5 million
from September of the previous year and stood at EUR 573.4 million towards
the end of the report period (EUR 552.5 million at the end of 2005).

Capital expenditures and current projects

Capital expenditures during the report period totalled EUR 90.1 million
(EUR 39.1 million).

The construction works for the major enlargement and transformation
project for the department store in the centre of Helsinki got under way
in the early months of the year. The project involves expanding the
department store’s commercial premises 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, servicing and customer
parking areas will be built. After the enlargement the Helsinki department
store will have a total of about 50 000 square metres of retail space.
With the progress of the construction works, the cost estimate for the
project has been specified and is now about EUR 145 million. The works
will be carried out stage by stage and are estimated to reach completion
in 2010. During the report period, the project required an investment of
about EUR 31.2 million.

The twelfth Stockmann Beauty store was opened in Helsinki in March. During
2006, four Bestseller stores were opened in Russia: two in St Petersburg
and one each in Kazan and Moscow. So far, a total of eight Bestseller
stores have been opened in Russia. Plans call for opening another five new
Bestseller stores in Russia during the last quarter of 2006.

In February 2007, the Department Store Division will open a fourth
department store in Moscow in the Mega Shopping Centre that is to be built
on the southeast side. The cost estimate for the department store – to be
built in leased premises – is about EUR 16 million for Stockmann’s part of
the investment.

Under an agreement signed in 2005, Stockmann purchased a 10 000-odd square
metre commercial plot on Nevsky Prospect, St Petersburg’s high street. The
plot is located next to the Vosstaniya Square underground station, in the
immediate vicinity of Moscow Station. On this plot, Stockmann will erect
the Nevsky Centre shopping centre that will have about 100 000 square
metres of gross floor space, of which about 50 000 square metres will be
store and office space. A full-scale Stockmann department store with about
20 000 square metres of retail space has been planned for the shopping
centre, along with other retail stores, office premises and an underground
car park. The department store and shopping centre investment will have a
price tag of about EUR 120 million. Demolition and other preparatory
construction works have already been carried out at the Nevsky Centre
site, and the main construction works will get started at the end of
October. An agreement on the general contract was signed at the beginning
of October. Stockmann’s objective is to open the department store and
commercial centre in autumn 2008. The purchase and development of the
property called for an outlay of EUR 31.0 million during the report
period.

At the beginning of August, Stockmann signed a preliminary agreement on
opening Moscow’s fifth Stockmann department store in leased premises in
the Metropolis Shopping Centre that is to be built in the vicinity of the
city’s centre. The department store will have a total of more than 8 000
square metres of retail space, and Stockmann’s investment in the project
will be about EUR 12 million. The objective is to open the department
store in 2008.

In August, Stockmann and Nike concluded a franchising agreement on
establishing Stockmann-operated Nike stores in Russia. The objective is to
achieve a substantial increase in sales of Nike sports products in the
area of the Russian Federation. Stockmann is planning to open a number of
new Nike stores in Russia every year. The first Stockmann-operated Nike
store will open in St Petersburg at the beginning of 2007, and agreements
have been signed on opening three other stores during 2007.

The Department Store Division’s capital expenditures totalled EUR 84.4
million.

Hobby Hall’s capital expenditures amounted to EUR 2.3 million. Hobby Hall
will begin distributing catalogues and launch online sales in the
Lithuanian market in early 2007. Online sales will get under way in Latvia
before the end of 2006.

Seppälä’s capital expenditures came to EUR 2.5 million. In Russia, Seppälä
opened two stores in St Petersburg during the report period and one in
Kazan as well as one store in Riga, Latvia. By the end of 2006, Seppälä
intends to open two stores in Finland and altogether eleven stores in
Russia and Lithuania.

Other capital expenditures in the report period amounted to EUR 0.9
million.

Shares and shareholders

The company’s market capitalization at the end of September was EUR 1
803.9 million (EUR 1 820.0 million). At the end of 2005 the market
capitalization was EUR 1 761.3 million.

Stockmann’s share prices underperformed both the OMX Helsinki index and
the OMX Helsinki Cap index during the report period. At the end of
September the stock exchange price of the Series A share was EUR 32.65,
compared with EUR 32.11 at the end of 2005, and the Series B share was
selling at EUR 33.13, as against EUR 32.53 at the end of 2005.

The 23 350 Stockmann shares subscribed for in December 2005 with the share
options for 2000 were entered in the Trade Register on February 28, 2006,
and they were admitted to public trading on the Helsinki Stock Exchange
together with existing shares on March 1, 2006.

In the report period, the Year 2000 Stockmann share options were exercised
to subscribe for a total of 404 500 Stockmann plc Series B shares with a
par value of 2 euros, of which 119 350 shares were subscribed for in the
third quarter. As a consequence of the subscriptions, the share capital
was increased by a total of EUR 809 000. Of the shares subscribed for in
the third quarter, 36 150 shares were entered in the Trade Register on
August 25, 2006 and 83 200 shares were entered on October 10, 2006. They
were admitted to public trading on the Helsinki Stock Exchange together
with the old shares on August 28, 2006, and October 11, 2006. Following
the increases the share capital is 109 775 084 euros and Stockmann had 24
564 243 Series A shares and 30 323 299 Series B shares. The Year 2000
share options can still be exercised to subscribe for a total of 1 206 270
Stockmann plc Series B shares.

The 2006 Annual General Meeting approved the Board of Directors’ proposal
on the granting of share options to Stockmann’s Loyal Customers. A total
maximum of 2 500 000 share options will be granted without consideration
to Stockmann’s Loyal Customers in disapplication of shareholders’ pre-
emptive subscription rights. The subscription rights are to be disapplied
because by granting the share options, Stockmann will offer Loyal
Customers a benefit that rewards them for their continued patronage and at
the same time improves Stockmann’s competitive position. The stock options
will be granted to Loyal Customers whose purchases during January 1, 2006
– December 31, 2007, together with purchases made on parallel cards for
the same account, are at least EUR 6 000 in total amount. For purchases of
at least EUR 6 000, a Loyal Customer will receive 20 share options without
consideration. In addition, for each full 500 euros by which the purchases
exceed EUR 6 000, the Loyal Customer will receive an additional two share
options. Each share option will entitle its holder to subscribe for one
Stockmann plc Series B share. The subscription price is the volume-
weighted average price of the Series B share on the Helsinki Stock
Exchange during the period February 1 – February 28, 2006, which is EUR
33.35. On the record date for each dividend payout, the subscription price
of a share subscribed for with the share options will be lowered by the
amount of the dividends that may be declared after March 21, 2006, and
prior to the share subscription. After the dividends paid in 2006, the
subscription price is EUR 32.25. The subscription periods for the shares
are May 2, 2008 – May 31, 2008, May 2, 2009 – May 31, 2009 and May 2, 2010
– May 31, 2010. As a consequence of the subscriptions, the company’s share
capital can be increased by a maximum of EUR 5 000 000.

The Annual General Meeting also passed the Board of Directors’ proposal on
the granting of share options to key employees of the Stockmann Group. A
total of 1 500 000 share options will be granted to key employees
belonging to the senior and middle management of the Stockmann Group
and to a wholly-owned subsidiary of Stockmann in
disapplication of shareholders’ pre-emptive subscription rights. The
disapplication of the subscription right is made because the share options
are part of the Group’s incentive and commitment-building scheme for key
employees and are an important element in maintaining the company’s
competitiveness in the international recruitment market. Of the share
options, 375 000 will bear the marking 2006A, 375 000 the marking 2006B,
375 000 the marking 2006C, and 375 000 the marking 2006D. The subscription
period for shares with share option 2006A is March 1, 2008 – March 31,
2010; with share option 2006B, March 1, 2009 – March 31, 2011; with share
option 2006C, March 1, 2010 – March 31, 2012; and with share option 2006D,
March 1, 2011 – March 31, 2013. The subscription period for shares will
not, however, commence with the 2006B and 2006D share options unless the
Group’s financial targets criteria as determined separately by the Board
of Directors have been met. Those share options 2006B and 2006D in respect
of which the criteria determined separately by the Board of Directors have
not been met shall lapse in the manner decided by the Board of Directors.
Each share option will entitle its holder to subscribe for one Stockmann
plc Series B share, whereby a total maximum of 1 500 000 shares can be
subscribed for with the share options. The subscription price for each
share through the exercise of the 2006A and 2006B share options is the
volume-weighted average price of the company’s Series B share on the
Helsinki Stock Exchange during the period February 1 – February 28, 2006,
plus 10 per cent, amounting to EUR 36.69 per share. The subscription price
with the 2006C and 2006D share options is the volume-weighted average
price of the company’s Series B share on the Helsinki Stock Exchange
during the period February 1 – February 29, 2008, plus 10 per cent. On the
record date for each dividend payout, the subscription price of the shares
to be subscribed for with share options will be lowered by the amount of
dividends declared after the commencement of the period for determining
the subscription price and prior to the share subscription. As a
consequence of the subscriptions, the company’s share capital can be
increased by a maximum of EUR 3 000 000.

In accordance with the share option programme for key employees that was
passed as a resolution of the Annual General Meeting, Stockmann’s Board of
Directors granted 2006A and 2006B share options to key employees and to
Stockmann’s wholly-owned subsidiary. Under the terms and conditions of the
share options, Stockmann’s Board of Directors will decide on the
distribution of the C and D share options at a later date.

Stockmann held 382 903 of its own Series B shares (treasury shares) at the
end of September 2006. They comprised 0.7 per cent of all the shares
outstanding and 0.1 per cent of all the votes. The shares were bought back
at a total price of EUR 5.8 million.

The Annual General Meeting in 2006 granted to the Board of Directors one-
year authorizations to decide on the transfer of the company’s treasury
shares. The company’s Board of Directors does not have valid
authorizations to increase the share capital, to float issues of
convertible bonds or bonds with warrants, or to buy back its own shares.

Personnel strength

During the report period the Stockmann Group had an average payroll of 9
897 employees, or 296 less than in the comparison period. The department
store in the Jumbo Shopping Centre and the new Bestseller and Seppälä
stores brought an increase in the number of employees, but the personnel
strength was reduced by the disposals of the Zara business in Russia at
the beginning of 2006 and Stockmann Auto at the beginning of March. The
personnel of Zara in Russia and Stockmann Auto transferred to the new
owners’ employ under the terms of their current employment contracts.
Stockmann’s average number of employees, converted to full-time staff,
decreased by 322 and was 7 955.

At the end of September 2006 the number of staff working abroad was 3 155
employees. At the end of September of last year Stockmann had 3 533 people
working abroad. The proportion of the total personnel who were working
abroad was 33 per cent (34 per cent).

Full-year outlook

Retail sales excluding the motor trade are estimated to increase by 3-4
per cent in Finland in 2006. The markets in Russia and the Baltic
countries are set to continue growing faster than the Finnish market.
Because of the divestment of the vehicle business and the Zara business in
Russia, Stockmann’s sales in 2006 will be lower and are estimated to come
in at about EUR 1.6 billion. Sales from continuing operations are
estimated to grow.

In the fourth quarter, earnings from continuing operations are expected to
improve on the previous year. The Department Store Division’s and Hobby
Hall’s full-year operating profit is estimated to improve. Seppälä’s
operating profit, excluding non-recurring items, will fall slightly short
of the previous year’s figure but remains at a high level.

Stockmann’s target is for the Group to post markedly higher profit before
taxes in 2006 than it did in 2005.

Balance sheet, Group EUR millions 30.9.06 30.9.05 31.12.05
ASSETS
Non-current assets
Intangible assets 5.5 8.2 7.6
Property, plant and equipment 328.8 297.7 303.1
Available-for-sale investments 6.1 6.5 6.0
Non-current receivables, 4.9 4.3
interest-bearing
Deferred tax assets 3.4 2.8 3.5
Non-current assets, total 343.9 320.2 324.5
Current assets
Inventories 182.9 242.1 212.0
Receivables, interest-bearing 104.8 100.9 107.5
Receivables, non interest-bearing 75.6 89.2 99.2
Cash and cash equivalents 17.0 12.1 18.4
Current assets, total 380.3 444.3 437.0
Assets, total 724.2 764.5 761.5
EQUITY AND LIABILITIES
Equity 519.2 456.0 505.3
Minority interest 0.0 0.0 0.0
Equity, total 519.2 456.0 505.3
Non-current liabilities, interest-bearing 23.4 13.4 13.7
Deferred taxes liabilities 27.0 28.9 28.2
Current liabilities
Current liabilities, interest-bearing 30.7 85.5 33.6
Current liabilities, non interest-bearing 123.9 180.7 180.7
Current liabilities, total 154.6 266.2 214.3
Equity and liabilities, total 724.2 764.5 761.5

Equity ratio, per cent 71.7 59.6 66.4
Gearing, per cent 7.2 19.0 5.7
Cash flow from operations per share, EUR 0.61 0.41 1.53
Interest-bearing net debt, EUR mill. -67.7 -19.1 -83.3
Number of shares at September 30, 54 804 53 996 54 460
thousands
Weighted average number of shares, 54 208 53 017 53 350
thousands
Weighted average number of shares, 55 053 53 964 54 129
diluted, thousands

Cash flow statement, Group EUR millions 1-9/2006 1-9/2005 1-12/2005
Cash flows from operating activities
Net profit for the financial year 66.9 34.5 76.9
Adjustments:
Deprecation 24.2 26.1 35.8
Other operating income -34.0 -7.0
Interest paid and other financial 1.7 2.4 3.7
expenses
Interest received -1.6 -2.9 -2.8
Taxes paid 12.0 11.8 28.2
Changes in working capital:
Change in trade and other receivables -11.2 14.7 -2.6
Change in inventories -0.1 -47.2 -17.1
Change in trade payables and other -4.3 7.3 0.9
liabilities
Interest paid -1.7 -1.8 -3.9
Interest received 1.8 3.7 1.2
Taxes paid -20.9 -27.0 -31.3
Net cash from operating activities 32.8 21.5 81.9
Cash flows from investing activities
Investments in tangible and intangible -90.7 -40.7 -58.1
assets
Group companies divested 101.7 11.7
Capital expenditures on other investments -0.1 0.0
Cash from other investments 0.8 1.6 1.5
Dividends received 0.1 0.2 0.2
Net cash used in investing activities 11.8 -38.9 -44.7
Cash flows from financing activities
Proceeds from issue of share capital 5.8 9.1 13.9
Borrowings of long-term loans 10.0
Repayments of long-term loans -36.6
Change in short-term loans, increase (+), -2.5 32.3 15.8
decrease (-)
Dividends paid -59.3 -53.4 -53.3
Net cash used in financing activities -46.0 -12.0 -60.2
Change in cash and cash equivalents -1.4 -29.3 -23.0
Cash and cash equivalents at start of the 18.4 41.4 41.4
financial year
Cash and cash equivalents at end of the 17.0 12.1 18.4
financial year

Income statement, 1-9/2006
Group, EUR millions Continuing Discontinued Total
operations operations
Revenue 850.0 61.1 911.0
Other operating income 4.7 29.3 34.0
Materials and consumables -505.5 -52.5 -558.0
Wages, salaries and employee benefits -141.4 -5.4 -146.8
expenses
Depreciation -23.9 -0.3 -24.2
Other operating expenses -134.4 -2.6 -137.0
Operating profit 49.4 29.6 79.0
Finance income and expenses -0.1 0.0 -0.1
Profit before tax 49.3 29.6 78.9
Income taxes -11.9 -0.1 -12.0
Profit for the period 37.4 29.5 66.9

Earnings per share, EUR 0.69 0.54 1.23
Earnings per share, diluted, EUR 0.68 0.54 1.22
Operating profit, per cent 5.8 48.4 8.7
Equity per share, EUR 9.54
Return on equity, per cent, moving 12 22.4
months
Return on capital employed, per cent, 24.6
moving 12 months
Average number of employees, converted 7 803 152 7 955
to full-time staff
Investments 90.1 90.1

Income statement, 1-9/2005
Group, EUR millions Continuing Discontinued Total
operations operations
Revenue 785.5 281.4 1 066.9
Other operating income 0.0 0.0 0.0
Materials and consumables -469.2 -236.0 -705.2
Wages, salaries and employee -131.1 -22.1 -153.2
benefits expenses
Depreciation -21.2 -4.2 -25.4
Other operating expenses -122.4 -14.9 -137.3
Operating profit 41.7 4.0 45.7
Finance income and expenses 0.4 0.2 0.6
Profit before tax 41.9 4.4 46.3
Income taxes -10.6 -1.1 -11.8
Profit for the period 31.3 3.2 34.5

Earnings per share, EUR 0.59 0.06 0.65
Earnings per share, diluted, EUR 0.58 0.06 0.64
Operating profit, per cent 5.3 1.4 4.3
Equity per share, EUR 8.51
Return on equity, per cent, moving 13.6
12 months
Return on capital employed, per 16.7
cent, moving 12 months
Average number of employees, 7 175 1 102 8 277
converted to full-time staff
Investments 29.4 9.7 39.1

Income statement, 1-12/2005
Group, EUR millions Continuing Discontinued Total
operations operations
Revenue 1 164.9 377.7 1 542.6
Other operating income 7.0 0.0 7.0
Materials and consumables -683.6 -311.9 -995.5
Wages, salaries and employee -187.6 -30.4 -218.0
benefits expenses
Depreciation -29.9 -5.8 -35.8
Other operating expenses -175.2 -21.5 -196.7
Operating profit 95.6 8.1 103.7
Finance income and expenses -1.7 0.8 -0.9
Profit before tax 93.9 8.9 102.8
Income taxes -24.0 -2.0 -26.0
Profit for the period 69.9 6.9 76.9

Earnings per share, EUR 1.31 0.13 1.44
Earnings per share, diluted, EUR 1.29 0.13 1.42
Operating profit, per cent 8.2 2.2 6.7
Equity per share, EUR 9.34
Return on equity, per cent, moving 15.8
12 months
Return on capital employed, per 19.6
cent, moving 12 months
Average number of employees, 7 503 1 034 8 537
converted to full-time staff
Investments 54.3 2.7 57.0

SEGMENT INFORMATION

Segments
Sales, EUR millions 1-9/2006 1-9/2005 Change 1-12/2005
per cent
Department Store Division 755.6 679.8 11 1 024.1
Hobby Hall 144.3 147.1 -2 210.5
Seppälä 112.8 110.1 2 155.2
Shared 0.7 0.7 2 0.9
Continuing operations, total 1 013.3 937.6 8 1 390.7
Discontinued operations 74.8 343.2 -78 460.6
Group 1 088.2 1 280.8 -15 1 851.3

Revenue, EUR millions 1-9/2006 1-9/2005 Change 1-12/2005
per cent
Department Store Division 635.7 571.0 11 860.0
Hobby Hall 119.8 122.1 -2 174.7
Seppälä 93.3 90.8 3 128.1
Shared 1.1 1.6 -30 2.1
Continuing operations, total 850.0 785.6 8 1 164.9
Discontinued operations 61.1 281.3 -78 377.7
Group 911.0 1 066.9 -15 1 542.6

Operating profit, EUR 1-9/2006 1-9/2005 Change 1-12/2005
millions per cent
Department Store Division 35.2 27.6 28 65.4
Hobby Hall 3.7 1.8 107 6.1
Seppälä 13.8 16.6 -17 31.1
Shared -4.2 -4.0 -7.3
Eliminations 0.9 -0.3 0.3
Continuing operations, total 49.4 41.7 19 95.6
Discontinued operations 29.6 4.0 8.1
Group 79.0 45.7 73 103.7

Investments,
gross, EUR millions 30.9.06 30.9.05 Change 31.12.05
per cent
Department Store Division 84.4 25.1 237 42.1
Hobby Hall 2.3 0.8 177 1.3
Seppälä 2.5 1.7 48 3.4
Shared 0.9 1.8 -49 2.3
Continuing operations, total 90.1 29.4 207 49.1
Discontinued operations 9.7 7.9
Group 90.1 39.1 131 57.0

Assets, EUR millions 30.9.06 30.9.05 Change 31.12.05
per cent
Department Store Division 481.9 460.8 5 463.7
Hobby Hall 107.0 104.1 3 106.3
Seppälä 31.7 28.5 11 31.2
Shared 103.6 55.6 87 39.3
Continuing operations, total 724.2 649.0 12 640.5
Discontinued operations 115.5 121.1
Group 724.2 764.5 -5 761.5

Non-interest-bearing 30.9.06 30.9.05 Change 31.12.05
liabilities, EUR millions per cent
Department Store Division 97.9 100.5 -3 110.4
Hobby Hall 17.8 19.1 -7 15.3
Seppälä 7.6 8.9 -15 10.9
Shared 27.5 41.0 -33 32.9
Continuing operations, total 150.9 169.5 -11 169.4
Discontinued operations 40.1 39.6
Group 150.9 209.6 -28 209.0

Market areas 1-9/2006
Continuing Discontinued Total
Sales, EUR millions operations operations
Finland 1) 770.7 74.8 845.5
Baltic states 2) 114.2 114.2
Russia 3) 128.5 128.5
Group 1 013.3 74.8 1 088.2
Finland, per cent 76.1 77.7
International operations, per cent 23.9 22.3

Continuing Discontinued Total
Revenue, EUR millions operations operations
Finland 1) 642.8 61.1 703.9
Baltic states 2) 97.1 97.1
Russia 3) 110.1 110.1
Group 850.0 61.1 911.0
Finland, per cent 75.6 77.3
International operations, per cent 24.4 22.7

Continuing Discontinued Total
Operating profit, EUR millions operations operations
Finland 1) 35.5 7.7 43.2
Baltic states 2) 13.4 13.4
Russia 3) 0.6 21.9 22.5
Group 49.4 29.6 79.0
Finland, per cent 71.8 54.7
International operations, per cent 28.2 45.3

Investments, 30.9.2006
gross, EUR millions Continuing Discontinued Total
operations operations
Finland 1) 44.6 44.6
Baltic states 2) 0.8 0.8
Russia 3) 44.7 44.7
Group 90.1 90.1
Finland, per cent 49.5 49.5
International operations, per cent 50.5 50.5

Continuing Discontinued Total
Assets, EUR millions operations operations
Finland 1) 561.9 561.9
Baltic states 2) 71.6 71.6
Russia 3) 90.7 90.7
Group 724.2 724.2
Finland, per cent 77.6 77.6
International operations, per cent 22.4 22.4
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

Market areas 1-9/2005
Continuing Discontinued Total
Sales, EUR millions operations operations
Finland 1) 747.6 313.4 1 061.1
Baltic states 2) 95.8 95.8
Russia 3) 94.2 29.7 123.9
Group 937.6 343.2 1 280.8
Finland, per cent 79.7 91.3 82.8
International operations, per cent 20.3 8.7 17.2

Continuing Discontinued Total
Revenue, EUR millions operations operations
Finland 1) 623.7 256.1 879.8
Baltic states 2) 81.5 81.5
Russia 3) 80.4 25.2 105.7
Group 785.6 281.3 1 066.9
Finland, per cent 79.4 91.0 82.5
International operations, per cent 20.6 9.0 17.5

Continuing Discontinued Total
Operating profit, EUR millions operations operations
Finland 1) 44.9 2.5 47.3
Baltic states 2) 3.0 3.0
Russia 3) -6.2 1.6 -4.6
Group 41.7 4.0 45.7
Finland, per cent 107.7 60.7 103.6
International operations, per cent -7.7 39.3 -3.6

Investments, 30.9.2005
gross, EUR millions Continuing Discontinued Total
operations operations
Finland 1) 19.9 2.8 22.7
Baltic states 2) 1.0 1.0
Russia 3) 8.5 6.9 15.4
Group 29.4 9.7 39.1
Finland, per cent 67.7 29.0 58.0
International operations, per cent 32.3 71.0 42.0

Continuing Discontinued Total
Assets, EUR millions operations operations Total
Finland 1) 496.4 96.0 592.3
Baltic states 2) 72.9 72.9
Russia 3) 79.7 19.6 99.3
Group 649.0 115.5 764.5
Finland, per cent 76.5 83.1 77.5
International operations, per cent 23.5 16.9 22.5
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

Market areas 1-12/2005
Continuing Discontinued Total
Sales, EUR millions operations operations
Finland 1) 1 106.8 414.1 1 520.9
Baltic states 2) 140.8 140.8
Russia 3) 143.1 46.5 189.6
Group 1 390.7 460.6 1 851.3
Finland, per cent 79.6 89.9 82.2
International operations, per cent 20.4 10.1 17.8

Continuing Discontinued Total
Revenue, EUR millions operations operations
Finland 1) 923.2 338.3 1 261.5
Baltic states 2) 119.7 119.7
Russia 3) 122.0 39.4 161.4
Group 1 164.9 377.7 1 542.6
Finland, per cent 79.3 89.6 81.8
International operations, per cent 20.7 10.4 18.2

Continuing Discontinued Total
Operating profit, EUR millions operations operations
Finland 1) 92.2 3.1 95.4
Baltic states 2) 7.3 7.3
Russia 3) -4.0 5.0 1.0
Group 95.6 8.1 103.7
Finland, per cent 96.5 38.6 92.0
International operations, per cent 3.5 61.4 8.0

Investments, 31.12.2005
gross, EUR millions Continuing Discontinued Total
operations operations
Finland 1) 31.8 2.7 34.6
Baltic states 2) 1.7 1.7
Russia 3) 15.6 5.1 20.7
Group 49.1 7.9 57.0
Finland, per cent 64.8 34.9 60.7
International operations, per cent 35.2 65.1 39.3

Continuing Discontinued Total
Assets, EUR millions operations operations
Finland 1) 489.3 98.2 587.4
Baltic states 2) 72.2 72.2
Russia 3) 79.0 22.9 101.9
Group 640.5 121.1 761.5
Finland, per cent 76.4 81.1 77.1
International operations, per cent 23.6 18.9 22.9
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 Share Treasury
in equity premium share
Group, EUR millions Equity fund fund
Equity December 31, 2004 106.8 154.8 0.0
Options exercised 3.9 5.2
Transfer to other funds 0.1
Cash flow hedges
Dividends
Translation differences
Profit for the period
Equity September 30, 2005 110.7 160.1 0.0
Equity Dec. 31, 2005 109.0 166.5 0.0
Options exercised 1.8 3.9
Share bonus 0.2
Cost of share issue
Dividends
Translation differences
Profit for the period
Equity September 30, 2006 110.8 170.6 0.0
* excluding deferred tax liability

Statement of changes Trans-
in equity Legal Other lation
Group, EUR millions reserve funds* reserve
Equity December 31, 2004 0.2 44.4 -0.1
Options exercised
Transfer to other funds 0.1
Cash flow hedges -2.8
Dividends
Translation differences 0.0
Profit for the period
Equity September 30, 2005 0.2 41.7 -0.1
Equity Dec. 31, 2005 0.2 43.9 0.0
Options exercised
Share bonus
Cost of share issue 0.0
Dividends
Translation differences 0.0
Profit for the period
Equity September 30, 2006 0.2 43.9 0.0
* excluding deferred tax liability

Statement of changes
in equity Retained Minority
Group, EUR millions earnings Total interest Total
Equity December 31, 2004 161.9 467.9 0.0 467.9
Options exercised 9.1 9.1
Transfer to other funds 0.0 0.2 0.2
Cash flow hedges -2.8 -2.8
Dividends -53.0 -53.0 -53.0
Translation differences 0.0 0.0
Profit for the period 34.5 34.5 0.0 34.5
Equity September 30, 2005 143.4 456.0 0.0 456.0
Equity Dec. 31, 2005 185.7 505.3 0.0 505.3
Options exercised 5.8 5.8
Share bonus 0.5 0.7 0.7
Cost of share issue 0.0 0.0
Dividends -59.5 -59.5 -59.5
Translation differences 0.0 0.0
Profit for the period 66.9 66.9 0.0 66.9
Equity September 30, 2006 193.6 519.2 0.0 519.2
* excluding deferred tax
liability

Contingent liabilities, 30.9.06 30.9.05 31.12.05
Group EUR millions
Mortgages on land and 1.7 1.7 1.7
buildings
Pledges 0.1 0.1 0.1
Other commitments 2.0 21.0 15.5
Total 3.7 22.8 17.3

Lease agreements on business
premises, EUR millions
Minimum rents payable on the
basis of binding lease
agreements on business
premises
Within one year 63.9 48.4 66.0
After one year 329.2 351.6 383.4
Total 393.0 400.0 449.5

Derivative instruments
Nominal value
Foreign exchange derivatives 5.3 80.2 10.4
Interest rate derivatives 35.0

Exchange rates
Country Currency 30.9.06 30.9.05 31.12.05

Russia RUB 33.9420 34.3340 33.9200
Estonia EEK 15.6466 15.6466 15.6466
Latvia LVL 0.6960 0.6960 0.6962
Lithuania LTL 3.4528 3.4528 3.4528

Income statement
quarterly, Q3 Q2 Q1 Q4
Group, EUR millions 2006 2006 2006 2005
Continuing operations
Revenue 281.1 299.5 269.4 379.3
Other operating income 0.0 4.7 0.0 7.0
Materials and consumables -166.1 -170.8 -168.7 -214.3
Wages, salaries and -44.2 -48.9 -48.3 -56.5
employee benefits expenses
Depreciation -7.9 -8.1 -8.0 -8.7
Other operating expenses -43.0 -47.7 -43.7 -52.8
Operating profit 19.8 28.7 0.8 53.9
Finance income and expenses 0.5 -0.9 0.2 -2.0
Profit before tax 20.4 27.9 1.1 52.0
Income taxes -5.0 -6.6 -0.3 -14.4
Profit for the period, 15.4 21.2 0.8 37.6
continuing operations
Discontinued operations
Profit for the period, 0.0 21.9 7.6 4.8
discontinued operations
Profit for the period 15.4 43.1 8.4 42.4

Earnings per share,
continuing operations, EUR
Basic 0.29 0.39 0.01 0.70
Diluted 0.28 0.39 0.01 0.69

Earnings per share,
discontinued operations,
EUR
Basic -0.01 0.41 0.14 0.09
Diluted 0.00 0.40 0.14 0.09

Earnings per share, total,
EUR
Basic 0.28 0.80 0.15 0.79
Diluted 0.28 0.79 0.15 0.78

Q3 Q2 Q1 Q4
Sales, EUR millions 2006 2006 2006 2005
Department Store Division 249.0 270.8 235.8 344.3
Hobby Hall 45.5 46.2 52.6 63.4
Seppälä 40.2 40.2 32.4 45.1
Shared 0.2 0.3 0.2 0.2
Continuing operations, 334.9 357.6 320.9 453.1
total
Discontinued operations 74.8 117.4
Group 334.9 357.6 395.7 570.5

Revenue, EUR millions
Department Store Division 209.8 227.4 198.5 289.0
Hobby Hall 37.8 38.4 43.6 52.6
Seppälä 33.2 33.3 26.8 37.3
Shared 0.2 0.4 0.5 0.5
Continuing operations, 281.1 299.5 269.4 379.3
total
Discontinued operations 61.1 96.4
Group 281.1 299.5 330.5 475.7

Operating profit, EUR
millions
Department Store Division 13.1 22.2 -0.1 37.8
Hobby Hall 2.1 0.6 1.0 4.3
Seppälä 5.4 7.6 0.8 14.5
Shared -0.9 -1.9 -1.4 -3.3
Eliminations 0.1 0.2 0.6 0.6
Continuing operations, 19.8 28.7 0.8 53.9
total
Discontinued operations 21.9 7.7 4.1
Group 19.8 50.6 8.5 58.0

Income statement
quarterly, Q3 Q2 Q1 Q4
Group, EUR millions 2005 2005 2005 2004
Continuing operations
Revenue 262.0 274.0 249.5 344.2
Other operating income 0.0 0.0 0.0 0.1
Materials and consumables -155.7 -156.6 -157.0 -192.5
Wages, salaries and -41.8 -45.6 -43.6 -53.9
employee benefits expenses
Depreciation -6.7 -7.3 -7.3 -7.8
Other operating expenses -40.2 -41.7 -40.6 -48.7
Operating profit 17.5 23.1 1.0 41.3
Finance income and expenses 0.6 -0.5 0.2 -0.2
Profit before tax 18.2 22.5 1.3 41.1
Income taxes -4.7 -5.6 -0.4 -12.4
Profit for the period, 13.5 16.9 0.9 28.8
continuing operations
Discontinued operations
Profit for the period, 2.0 1.0 0.3 1.0
discontinued operations
Profit for the period 15.4 17.9 1.2 29.7

Earnings per share,
continuing operations, EUR
Basic 0.25 0.32 0.02 0.56
Diluted 0.25 0.31 0.02 0.54

Earnings per share,
discontinued operations,
EUR
Basic 0.04 0.02 0.00 0.02
Diluted 0.04 0.02 0.00 0.02

Earnings per share, total,
EUR
Basic 0.29 0.34 0.02 0.58
Diluted 0.29 0.33 0.02 0.56

Q3 Q2 Q1 Q4
Sales, EUR millions 2005 2005 2005 2004
Department Store Division 228.4 244.4 207.0 303.1
Hobby Hall 43.9 42.7 60.5 64.6
Seppälä 40.1 39.9 30.0 43.5
Shared 0.2 0.2 0.2 0.2
Continuing operations, 312.6 327.3 297.7 411.4
total
Discontinued operations 109.6 130.6 102.9 104.3
Group 422.3 457.9 400.6 515.8

Revenue, EUR millions
Department Store Division 191.9 204.8 174.3 254.8
Hobby Hall 36.4 35.5 50.2 53.4
Seppälä 33.1 32.9 24.8 35.8
Shared 0.6 0.8 0.2 0.2
Continuing operations, 262.0 274.0 249.5 344.2
total
Discontinued operations 89.9 106.8 84.6 85.5
Group 351.9 380.9 334.1 429.7

Operating profit, EUR
millions
Department Store Division 12.1 15.2 0.2 36.5
Hobby Hall 0.9 0.2 0.7 1.5
Seppälä 6.9 8.4 1.3 8.0
Shared -1.4 -1.5 -1.1 -1.2
Eliminations -0.9 0.7 -0.1 -3.5
Continuing operations, 17.5 23.1 1.0 41.3
total
Discontinued operations 1.9 1.5 0.6 1.1
Group 19.5 24.6 1.6 42.4

STOCKMANN plc

Hannu Penttilä
CEO

DISTRIBUTION
Helsinki Stock Exchange
Principal media

A press and analyst conference will be held today, October 25, 2006, at
14.00 at the World Trade Center, Aleksanterinkatu 17, Helsinki.