Decisions by Stockmann’s Annual General Meeting

Helsinki, Finland, 2012-03-15 16:30 CET (GLOBE NEWSWIRE) —
STOCKMANN plc, Decisions of annual general meeting 15.3.2012 at 17:30 EET

The Annual General Meeting of Stockmann plc, held in Helsinki on 15 March 2012, adopted the financial statements for the financial year 1 January – 31 December 2011, granted discharge from liability to the responsible officers and resolved to pay a dividend of EUR 0.50 per share for 2011. The General Meeting decided on a share option programme for Stockmann’s loyal customers and amendments to the Articles of Association. The General Meeting decided also on the composition and remuneration of the Board of Directors and the selection and remuneration of the auditor in accordance with the proposals presented.

CEO’s review

In his review at the Annual General Meeting, CEO Hannu Penttilä went through development and structural changes in the company’s 150-year history.

The major capital expenditure projects in the period 2006 – 2010 improved Stockmann’s competitiveness in retail trade in the long run, though the international financial crisis taking place at the same time weakened earnings performance more than estimated in the past years. In 2011 operating profit reached the expected level only in the last quarter of the year. According to Penttilä, optimism in the market has during the last two months increased. In 2012 the Stockmann Group aims to increase both its revenue and operating profit, provided that market sentiment does not significantly worsen. Also the dividend to be paid for 2011, which is more than the earnings per share, reflects the company’s confidence in a positive development in the future.

In 2011 Stockmann’s capital expenditure was around EUR 100 million lower than in 2010. Capital expenditure will further decrease and is estimated to total approximately EUR 50 million in 2012. Capital expenditure projects in the Department Store Division focus in the next few years on renovation of department stores in Finland, namely in Itäkeskus, Tampere and Tapiola. Most part of the capital expenditure will be paid by the landlords of these properties.

Own real estate will continue to have a key position in the department store business both in Finland in the Helsinki city centre department store and abroad. In particular in Russia, the overheated retail rental market means that a tenant operating transparently cannot find a profitable business model for all locations. In St Petersburg the Stockmann-owned Nevsky Centre shopping centre is a good example of how Stockmann operates in a sound and profitable way in its own property. Rented premises for external tenants are also making good profit. In Estonia and Latvia the own real estate is a significant factor in the good earnings performance of the department stores. It is worth for Stockmann, in Penttilä’s assessment, to be prepared for similar projects also in the future.

A significant factor in the international expansion of Lindex is its franchising business which enables the fashion chain to expand to new market areas with low investments. All business divisions have well established their e-commerce businesses, and the online stores will play a very significant role in the Group’s strategy in the long run.

Payment of dividends

The Annual General Meeting resolved that a dividend of EUR 0.50 per share be paid for the 2011 financial year. The dividend will be paid on 25 April 2012 to those shareholders who on the record date for the dividend payout, 20 March 2012, are entered in the shareholder register kept by Euroclear Finland Ltd.

Composition and remuneration of the Board of Directors

The Annual General Meeting resolved, in accordance with the proposal of the Board’s Appointments and Compensation Committee, that eight members be elected to the Board of Directors. In accordance with the Committee’s proposal, Managing Director Kaj-Gustaf Bergh, Rector and Professor Eva Liljeblom, Managing Director Kari Niemistö, Charlotta Tallqvist-Cederberg, M.Sc. (Econ.), Christoffer Taxell, LL.M., and Carola Teir-Lehtinen, M.Sc., and Managing Director Dag Wallgren were re-elected as members of the Board of Directors. Following the announcement by Erkki Etola, a long-term member of the Board, that he will no longer be available as a member, Mr. Per Sjödell, Managing Director of Pocket Shop AB and previously Director with global responsibilities in H&M AB and Gant AB, was elected as a new member. The Board members’ term of office will continue until the end of the next Annual General Meeting.

It was resolved to keep the Board members’ remuneration unchanged, and the remuneration will continue to be paid mainly in shares.

Auditors

Jari Härmälä, Authorised Public Accountant, and Henrik Holmbom, Authorised Public Accountant, were re-elected as the regular auditors. KPMG Oy Ab, a firm of authorised public accountants, will continue as the deputy auditor. The auditor will be paid in accordance with a reasonable invoice approved by the Board of Directors.

Amendments of the Articles of Association

The Annual General Meeting decided on amending the Articles of Association as follows:
– section 4 of the Articles of Association concerning the record date was removed, and the numbering of the Articles of Association was changed correspondingly;
– the wording of section 7 (after the amendment section 6) was changed to correspond to the terminology of the Companies Act by replacing the references to signing for the company by references to representing the company;
– section 11 (after the amendment section 10) of the Articles of Association was amended to correspond to the Companies Act so that the notice convening an Annual General Meeting of Shareholders shall be published no more than three months before the record date for the Annual General Meeting of Shareholders referred to in chapter 4, section 2(2) of the Companies Act and no less than three weeks before the Annual General Meeting of Shareholders, however, at least nine days before the said record date. In addition, the section was amended so that the notice to convene the Annual General Meeting of Shareholder shall be published in a newspaper which is determined by the Board of Directors and comes out in the Helsinki area or on the Company’s website; and
– the wording relating to the business of the Annual General Meeting of section 14 (after the amendment section 13) was amended to correspond to the terminology of the Companies Act.

Loyal Customer share options 2012

The Annual General Meeting decided on a new share option programme to loyal customers of Stockmann. A maximum of 2.500.000 share options will be issued without payment, in deviation from the shareholders’ pre-emptive rights, to Stockmann’s loyal customers. There is a weighty financial reason for the issuance of share options because they are intended to be issued in order to offer loyal customers a benefit that rewards the purchase loyalty of the loyal customers while simultaneously strengthening the competitive position of Stockmann. Share options will be issued to loyal customers, whose purchases in companies belonging to the Stockmann Group together with purchases originating from parallel cards directed to the same account during the time period 1 January 2012 – 31 December 2013 amounts to a total of at least EUR 6.000. For purchases of at least EUR 6.000, the loyal customers shall without payment receive 20 share options. In addition, for every full EUR 500, by which the purchases exceed EUR 6.000, the loyal customer shall receive an additional two share options. Each share option entitles its holder to subscribe for one share of the Company’s Series B shares. The subscription price for the shares with the share options shall be the trading-volume weighted average price for the Company’s Series B shares on the Helsinki Exchanges during the time period of 1 February – 29 February 2012. The share subscription price of the share options shall be deducted as per the dividend record date by the amount of the dividend decided after the beginning of the period for determination of the share subscription price but before the share subscription. The exercise periods for the options shall be in May 2014 and in May 2015.

Organisational meeting of the Board of Directors

The Board of Directors, which convened after the Annual General Meeting, re-elected Christoffer Taxell, LL.M., as its Chairman and elected Managing Director Kari Niemistö as its Vice Chairman. The Board of Directors elected Christoffer Taxell as Chairman of the Appointments and Compensation Committee and Kari Niemistö, Charlotta Tallqvist-Cederberg and Dag Wallgren as the other members of the committee.

Further information:
Hannu Penttilä, CEO, tel. +358 9 121 5801

www.stockmanngroup.fi

STOCKMANN plc

Hannu Penttilä
CEO

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