FINANCIAL
REVIEW
20
22
CONTENTS
Report by the Board of Directors
3
Key figures
21
Shares and share capital
26
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated income statement
28
Consolidated statement of comprehensive income
Consolidated statement of financial position
29
Consolidated cash flow statement
31
Consolidated statement of changes in equity
32
Notes to the consolidated financial statements
33
PARENT COMPANY FINANCIAL STATEMENTS
Parent company income statement
78
Parent company balance sheet
79
Parent company cash flow statement
81
Notes to the parent company
financial statements
82
Board proposal for disposal of
net result of the financial year
95
Auditor’s report
96
Auditor’s ESEF assurance report
101
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REPORT BY THE BOARD OF DIRECTORS
The Stockmann Group’s consolidated revenue in 2022 was EUR 981.7 million (899.0), up 9.2%. Gross margin was
57.9% (58.6). Operating result was EUR 154.9 million (82.1). The adjusted operating result was EUR 79.8 million (68.3).
Earnings per share were EUR 0.65 (0.42). Adjusted earnings per share were EUR 0.32 (0.35). The Board of Directors
will propose for the Annual General Meeting, that no dividend will be paid for the financial year 2022.
Guidance for 2023:
In 2023, Stockmann expects the Group’s revenue to be in the range of EUR 960–1 020 million and the Group’s adjusted
operating result to be EUR 60–80 million, subject to foreign exchange rate fluctuation. The guidance is based on the
assumption that the continuing high inflation will increase costs from 2022 and have an adverse impact on consumer
demand. At the same time, the Stockmann Group continues taking firm measures to minimise the impacts of cost
increases.
Market outlook for 2023:
The current challenging geopolitical situation and the high inflation level are expected to continue. However, inflation is
predicted to slow down compared to the latter part of the year 2022. This, together with high interest rates, is forecast to
have a negative impact on consumer confidence and purchasing power. The retail market is expected to remain
challenging due to lower consumer demand and increased purchasing prices and operating costs. The risk of potential
disruptions in the supply chains and international logistics cannot be excluded, either.
STRATEGY
The Stockmann Group consist of two business divisions: the Lindex fashion company and Stockmann, a multichannel
retail company with premium department stores. In addition to their brick-and-mortar stores, both companies have online
stores. The Stockmann Group’s strategy is based on shared strengths and opportunities with two divisional strategies.
The two divisions share an outlook characterised by the utmost strategic importance of customer centricity, an
omnichannel approach and strong brands to build future growth.
The Stockmann Group’s strategic priorities are the following;
- Providing the best customer experience and achieving the highest customer loyalty by successful development of the
omnichannel operating model
- Using the strong brands and offering to enhance customer loyalty
- Maintaining and developing a strong commitment to fair and responsible business models and practices
- Seeking growth and efficiency together with third parties in order to extend
our range of meaningful products and services as well as reach new customers groups
- Securing sustainable business by seeking growth in revenue, better cost-efficiency and efficient capital utilisation in
order to improve the Group’s profitability and financial stability.
According to the Lindex division’s long-term strategy, Lindex aims to be a global, brand-led, sustainable fashion
company. This means growth in digital revenue, both in its own online sales as well as in collaborations with global digital
fashion platforms, improved cost efficiency and also growth with new businesses, while meeting sustainability targets.
The Lindex division’s purpose is to empower and inspire women everywhere. This is done through actions as a company
and through a progressive fashion experience. The customers, co-workers and partners are all part of this ambition.
Lindex is digital first and powered by people. To fulfil the purpose and vision, Lindex has made a promise: to make a
difference for future generations. The purpose includes all dimensions of sustainability and is divided into three areas:
empower women, respect the planet and ensure human rights. A considerable part of Lindex’s affordable product range
is resilient to the economic downturn.
The Stockmann division’s purpose in all encounters with its customers, partners, co-workers and other stakeholders is to
make a new impression, every day. The division’s vision is to create a marketplace for a good life. Customer centricity –
in other words, the capability to understand customers and to serve them in the way they choose and to provide a unique
customer experience – is the core of the strategy. The Stockmann division provides a curated merchandise selection in
fashion, beauty, home and food combined with various services for customers in eight department stores as well as in
the online store. Products sold under the Stockmann division’s own brands are
considered to be resilient also during the
economic downturn. The Stockmann promise to customers is to create a feeling that lasts. The professional and service-
minded personnel delivers this promise.
CORPORATE RESTRUCTURING PROGRAMME
The restructuring programme is proceeding according to plan, which means that all Stockmann’s department store
properties have been sold and all interest-bearing debt has been paid except for the bond of EUR 67.5 million. The
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department store property in Tallinn was sold in December 2021 and the agreement for the sale of the Riga department
store property was signed in December 2021 with closure in January 2022. The department store property in Helsinki city
centre was sold in April 2022, and the last confirmed restructuring debt was paid.
Other measures and undertakings, as specified in Stockmann plc’s restructuring programme, were completed during
2021, and are explained in the 2021 annual report.
There are still disputed claims regarding the termination of lease agreements that must be settled before the
restructuring process can end. These claims are further explained under Business Continuity, Risks and Financing
Situation.
COVID-19
COVID-19 affected the Stockmann Group’s sales in 2020, when the number of visitors fell dramatically in physical stores.
During 2020, both divisions managed to increase digital sales, but this did not fully compensate for the decline in sales in
the physical stores. In 2021, physical traffic partly recovered again at various speeds in the sales markets. At the
beginning of 2022, there were still restrictions in some markets, which affected stores. Since April 2022, all restrictions
have been eased up and sales have recovered. Compared with pre-pandemic levels in 2019, merchandise sales during
the full year of 2022 increased by 15.1% in the Lindex division and decreased by 14.1% in the Stockmann division.
OPERATING ENVIRONMENT
Fashion sales in Finland grew by 5.1% in the whole year of 2022. Fashion sales decreased by 8.1% in 2022 compared to
the market situation before the COVID-19. Delivery delays and a shortage of goods had an impact on the fashion sales.
The popularity of online shopping declined during the year, as customers started to shop in brick-and-mortar stores more
frequently due to the end of the COVID-19 period. Despite this decline in the online shopping in 2022, the online fashion
sales still increased by 17.9% compared to 2019 (source: Fashion and Sports Commerce association).
In Sweden, fashion sales in January–December were up by 12.1%. Fashion sales in 2022 are now above the level in
2019, at 4.0% (source: Swedish Trade Federation, Stilindex).
In the Baltic countries, fashion sales have had a strong growth in 2022, being up by 13.8% in Estonia (source: Statistics
Estonia) and by 39.1% in Latvia (source: Central Statistical Bureau Republic of Latvia). The operating environment was
increasingly affected by the EU’s highest inflation levels, which has impacted the consumer confidence, reflected in
slowing revenue growth rates in the fourth quarter (source: Eurostat).
REVENUE AND EARNINGS
The Stockmann Group’s revenue for the accounting period increased to EUR 981.7 million (899.0). Revenue was up by
9.2%, due to higher number of visitors in the stores and increased value of average purchases. Lindex division’s revenue
increased by 8.8% in euros and 14.1% in Swedish krona. Stockmann division’s revenue increased by 10.0%.
Revenue in Finland increased by 8.9%, to EUR 321.1 million (294.9). In Sweden the revenue increased by 3.2%, to EUR
354.3 million (343.4), and in the other countries by 17.5%, to EUR 306.4 million (260.7). Revenue in all countries was
positively impacted by higher visitor numbers and increased value of average purchases.
Gross profit increased to EUR 568.3 million (527.0) due to better sales in both divisions.
The gross margin was 57.9% (58.6), explained by Lindex’s costs of goods sold being significantly impacted by
unfavourable currencies in the face of a historically high U.S. dollar, increased raw material prices and freight, mainly
during the second half of the year. To further strengthen the market position, these cost increases were not fully passed
on to end-customers, but instead partly mitigated by more efficient sourcing and more full-price sales. In the Stockmann
division, the gross margin improved due to higher sales of full-priced products as well as better clearance and full-price
sales margins.
Other operating income improved to EUR 99.6 million (31.9). The increase was related to a capital gain from the
divestment of the Riga and Helsinki city real estate during the first half of the year.
Operating costs were up by EUR 35.8 million, including EUR 20.1 million in adjustments related to corporate
restructuring, the prudential provision for the LähiTapiola Keskustakiinteistöt Ky arbitration case and other transformation
measures. Operating costs totalled EUR 409.8 million (374.0). The increase excluding the items affecting comparability
relates to a more normal business operation without pandemic-related effects or subsidies, together with higher strategic
investments within digitalisation and future growth costs for new brands within Lindex. During the latter part of the year,
macro-economic effects such as inflation, higher energy prices and other external supplier expenses have affected cost
levels. Both divisions are continuing with cost efficiency actions and rental negotiations which partly mitigate the effects.
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The adjusted operating result for the accounting period increased to EUR 79.8 million (68.3) due to a strong increase in
revenue and cost mitigation actions. The result for the Lindex division was an all time high of EUR 90.0 million (80.3).
The Stockmann division has improved the adjusted operating result from EUR -9.9 million to EUR -5.4 million. The
improved result for both divisions is explained by increased sales and cost mitigation actions.
The operating result for the accounting period was EUR 154.9 million (82.1) due to real estate divestments together with
a strong revenue increase and cost mitigation actions.
The interest impact of the sale-and-leaseback agreements of the Helsinki, Tallinn and Riga department store properties
increased the net financial expenses to EUR 25.7 million (16.9).
The net result for the accounting period improved to EUR 101.6 million (47.9). Earnings per share for the accounting
period were EUR 0.65 (0.42). Adjusted earnings per share were EUR 0.32 (0.35). Equity per share was EUR 2.15 (1.74).
ITEMS AFFECTING COMPARABILITY (IAC)
EUR million
1–12/2022
1–12/2021
Operating result (EBIT)
154.9
82.1
Adjustments to EBIT
Gain on sales of real estate
-95.4
-21.7
Costs for disputed, conditional and maximum
restructuring debt
18.1
Restructuring and transformation measures
2.0
10.9
Costs related to the war in Ukraine
0.5
Employee insurance refund
-0.3
-3.0
Adjusted operating result (EBIT)
79.8
68.3
CAPITAL EXPENDITURE
Capital expenditure totalled EUR 62.5 million (16.9) for the full year of 2022.
During the second quarter the Group made a decision to invest for a new omnichannel distribution centre for the Lindex
division to enable continued growth and improve efficiency. The new omnichannel warehouse will manage the supply of
goods to all the fashion company’s stores, as well as managing the strongly growing digital sales and the company’s
third-party collaborations with global fashion platforms. The investment is the largest in the Lindex division’s history and
amounts to approximately EUR 110 million between 2022 and 2025.
FINANCING AND CAPITAL EMPLOYED
Cash and cash equivalents totalled EUR 167.9 million (213.7) at the end of the accounting period.
Cash flow during the full year of 2022 was EUR -33.9 million (+64.1), due to the Lindex division’s repayment of EUR 40.0
million of VAT governmental loans and investments of EUR 24.2 million in Lindex new omnichannel distribution centre.
When excluding these items, cash flow from operations was positive, although partly decreased by higher inventories in
end of the year.
Total inventories were EUR 174.2 million (154.8) at the end of the accounting period. Inventories increased from the
previous year in both the Lindex and the Stockmann divisions, explained by increased sales, higher purchase prices and
longer lead times.
At the end of the accounting period, interest-bearing liabilities totalled EUR 622.3 million (784.7). These included a non-
current senior secured bond EUR 67.5 million (66.0) and lease liabilities due to IFRS 16 reporting of EUR 554.8 million
(337.2). The lease liabilities related to the Stockmann division were EUR 287.7 million (85.7) and to the Lindex division
EUR 267.1 million (251.5).
Excluding IFRS 16 reporting interest bearing net debt is positive with EUR 100.4 million (-233.8). The previous year’s
interest-bearing liabilities included the restructuring debt, which has been fully paid when divesting the real estates
(381.5).
Assets on the balance sheet totalled EUR 1 282.9 million (1 416.5) at the end of the accounting period.
The equity ratio was 26.2% (18.9) and net gearing was 135.4% (212.8) at the end of the accounting period. IFRS 16 has
a significant impact on the equity ratio and net gearing. Excluding IFRS 16, the equity ratio would have been 53.4% and
net gearing would have been -22.3%.
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The Group’s capital employed at the end of the accounting period was EUR 1 005.4 million, or EUR 634.3 million
excluding IFRS 16 items (1 059.2 or 728.9).
REVENUE AND EARNINGS BY DIVISION
The Stockmann Group’s reporting segments are the Lindex and Stockmann divisions. The segments are reported in
accordance with IFRS 8. Unallocated items include Corporate Management, Group Finance Management, Group
Treasury and Internal Audit.
THE LINDEX DIVISION
1–12/2022
1–12/2021
Revenue, EUR mill.
661.1
607.4
Gross Profit, EUR mill.
423.7
397.4
Gross margin, %
64.1
65.4
Adjusted operating result, EUR mill.
90.0
80.3
Operating result, EUR mill.
90.3
74.6
Capital expenditure, EUR mill.
55.3
12.0
Lindex division’s revenue increased by 8.8%, to EUR 661.1 million (607.4). In Swedish krona the revenue increased by
14.1%. The Lindex division’s sales thus exceeded SEK 7 billion, which is an important milestone in the company’s
history. Sales at the brick-and-mortar stores continued to increase and were up by 13.6% compared to the previous year.
Digital sales decreased by 0.7% and accounted for 18.5% (20.7) of total sales. The division’s sales increased in all
markets and business areas. During the year, Lindex succeeded in getting one million new customers and has today
close to 5.7 million registrered customers. Lindex entered the femtech market and successfully launched the new brand
Female Engineering.
Gross profit increased from EUR 397.4 million to EUR 423.7 million. The gross profit improved due to higher sales, but
was impacted by a lower gross margin.
The gross margin decreased to 64.1% (65.4). The Lindex division’s gross margin mainly decreased due to the
unfavourable exchange rate between the U.S. dollar and the Swedish krona, which together with higher prices of raw
material and freight, impacted the costs of purchased goods significantly. To maintain value-based pricing for customers,
the volatile currency increase, when it reached the highest levels, was not fully passed on in consumer end-prices. The
negative gross margin effect was, however, partly mitigated with lower markdowns and more efficent sourcing.
Operating costs increased by EUR 6.6 million, to EUR 260.8 million (254.2), where the currency effect from the Swedish
krona to the euro partly impacted positively. The cost increase is a result of a more normal business operations without
the pandemic-related effects or subsidies, together with higher strategic investments within digitalisation and future
growth costs for new brands. During the year, there has also been an implementation of a bonus programme for all
Lindex division employees together with the macro-economic effects of inflation and higher energy prices which have
affected costs mainly during the latter part of the year. The Lindex division is continuing with cost efficiency actions and
rental negotiations which are expected to mitigate the effects partly.
Lindex division’s adjusted operating result increased to EUR 90.0 million (80.3) due to higher sales and good cost
control. A lower gross margin as well as macro-economic costs were partly offset.
The operating result, including items affecting comparibility also increased to EUR 90.3 million (74.6).
Capital expenditure
was EUR 55.3 million (12.0) which is mainly related to the ongoing construction of the new
omnichannel distribution centre planned to be ready in 2024.
The Lindex division’s store network and online presence
The Lindex division had 436 stores in 18 countries in total at the end of the accounting period: 404 of its own stores and
32 franchise stores. The Lindex division opened four stores and closed nine stores during 2022. In addition to the Lindex
division’s own online store, it also sells its products on third parties’ digital fashion platforms.
The Lindex division sustainability
The Lindex division's business is growing in new ways. Circular business models and continued development of
customer offerings with new services are important parts of the fashion company's transformation into a more
sustainable business. The transformation affects all parts of the company and is a key focus. During the year, the fashion
company scaled up its second-hand offering to include all kidswear, opened a pop-up store and initiated a test pilot with
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second-hand baby clothes online. The test pilots give valuable insights into how the business model can be developed
and are an important enabler to ensure long-term scalability and profitability going forward. Lindex also takes new step in
its transformation to a more sustainable and circular assortment with a new viscose fibre based on OnceMore®, an
innovative process for large-scale textile recycling of blended materials.
Another focus area for Lindex and the fashion company’s sustainability promise is Empowering Women, in which Lindex
has made continued progress in its supply chain. Lindex’s sustainability report, which summarises the year 2022 in more
detail will be released in March 2023.
Lindex has, since 2003, supported the Pink Ribbon campaign promoting breast cancer awareness and supporting
fundraising for cancer research. Over the years, Lindex has together with its’ customers contributed with over EUR 19.3
million to cancer research. In 2022, Lindex succeeded thanks to the fantastic commitment of its’ employees and
customers, to collect EUR 1.7 million for this good cause.
THE STOCKMANN DIVISION
1–12/2022
1–12/2021
Revenue, EUR mill.
320.6
291.6
Gross Profit, EUR mill.
144.6
129.6
Gross margin, %
45.1
44.5
Adjusted operating result, EUR mill.
-5.4
-9.9
Operating result, EUR mill.
71.2
11.6
Capital expenditure, EUR mill.
7.2
4.9
The Stockmann division’s revenue grew by 10.0% and amounted to EUR 320.6 million (291.6). The increase was
derived from the brick-and-mortar sales due to higher number of visitors in the stores as well as the increased value of
average purchases. The Stockmann division made a great achievement with over 88 000 new loyal customers during the
year and good progress in customer experience when Emotional Value Index (EVI) improved from 49 to 58.
MyStockmann Loyalty application was also launched in the division’s Baltics markets.
During the year, Stockmann 160 year anniversary was celebrated with customer and employee events, unique brand
collaborations and special collections marking the important milestone. The division reported strong annual sales in
fashion, boosted with 70 new brand launches.
Sales at the brick-and-mortar stores increased by 14.6%. Online store shopping declined by 14.0%, accounting for
12.6% (16.1) of total sales.
Revenue in Finland increased by 8.3% and was EUR 245.5 million (226.7). Revenue in the department stores in the
Baltics was up by 15.9%, to EUR 75.1 million (64.8). Both Finland and Baltics had higher visitor numbers and an
increased value of average purchases.
The gross profit increased from the previous year to EUR 144.6 million (129.6) due to higher sales and gross margin.
The gross margin improved to 45.1% (44.5) due to a larger share of sales of full-priced products and as a result of both
better clearance and full-price sales margins. Sales margins increased as the rise in product purchase prices was fully
reflected in consumer end-prices, and due to improved seasonal and clearance sell-through.
Operating costs increased by EUR 21.4 million, to EUR 145.5 million (124.1). This was due to a provision of EUR 15.9
million for prudential reasons related to the LähiTapiola Keskustakiinteistöt Ky arbitration decision, recorded as an item
affecting comparability. It was also due to the effects of high inflation, especially high energy prices in all markets where
Stockmann is operating together with higher staffing costs. The increases in operating costs caused by inflation were
partly mitigated by cost-efficiency actions.
The adjusted operating result for the accounting period improved to EUR -5.4 million (-9.9) due to better sales and
improved gross margins.
The operating result for the accounting period increased to EUR 71.2 million (11.6) due to capital gain of real estate
sales during the first half of the year, stronger sales and improved gross margins.
The Stockmann division’s store network and online presence
The Stockmann division had eight department stores and one online store at the end of the accounting period. The
department stores are located in Helsinki (2), Vantaa, Espoo, Turku, Tampere, Riga and Tallinn. The Stockmann division
online store serves customers in Finland, Estonia and Latvia. In spring, the division made an interesting opening with
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Wolt, enabling a delivery service launch and successful expansion of it to all cities, where Stockmann’s department
stores are located.
Stockmann sustainability
The Stockmann division has renewed Stockmann Group’s CO2 emission calculation covering the Stockmann Group’s
scope 1, 2 and 3 emissions. This renewal has taken into account Science Based Target (SBT) requirements. The
division has executed the means to decrease energy consumption in order to respond not only to CO
2
but also to contribute to the general energy challenge related to the energy crisis in Europe. In the coming years,
Stockmann will invest even more strongly in product ranges and services that support the circular economy. Stockmann
has been selected for the Circular Design programme, which is part of the implementation of Finland's national circular
economy programme.
SHARES AND SHARE CAPITAL
The company has a single class of shares. Each share carries one (1) vote at a general meeting of shareholders.
At the end of the accounting period, Stockmann had a total of 155 880 206 shares. The number of votes conferred by the
shares was 155 880 206.
According to the Finnish Companies Act, distributions to shareholders during the three years following the registration of
the reduction of share capital in order to cover losses can only be made by following the creditor protection procedure.
According to the restructuring programme, the company may not distribute the company’s assets to shareholders during
the implementation of the repayment schedule under the restructuring programme.
At the end of the accounting period, the share capital was EUR 77.6 million and the market capitalisation stood at EUR
307.1 million (333.6).
The price of a STOCKA share was EUR 1.97 at the end of the accounting period 2022, compared with EUR 2.16 at the
end of December 2021.
A total of 94.8 million shares were traded on Nasdaq Helsinki during the the accounting period. This corresponds to
61.1% of the average number of shares.
The company does not hold any of its own shares, and the Board of Directors has no valid authorisations to purchase
company shares.
At the end of the accounting period, Stockmann had 44 289 shareholders, compared with 45 054 a year earlier.
BUSINESS CONTINUITY AND FINANCING SITUATION
The restructuring process is proceeding according to plan: all Stockmann’s department store properties have been sold
and both the secured restructuring debt and undisputed unsecured restructuring debt have been paid. Other measures
and undertakings, as specified in Stockmann plc’s restructuring programme, have already been completed during 2021
and are explained in the 2021 annual report.
The Group’s scope for arranging new financing is limited during the execution of the corporate restructuring programme,
which cannot end until all disputed claims are solved. This may have an effect on the sufficiency of liquidity and on the
financial position. The Stockmann Group prepares for the future by evaluating strategic options and financing for the
period after the corporate restructuring.
The uncertainties related to the COVID-19 pandemic may have an impact on Stockmann’s liquidity and financial position
and the value of its assets. Risks related to production and supply may arise from unusual situations such as an
escalation of the COVID-19 pandemic or a new epidemic leading to government-imposed restrictions, a lack of transport
capacity, strikes and political uncertainties.
The current geopolitical situation is causing a rise in inflation which may affect sales negatively due to the level of
consumer confidence, as well as increasing buying prices and operating costs. Further, it may cause delays in the supply
chains due to matters concerning in production and freight. The management and the Board of Directors regularly
assess the operational and strategic risks associated with the current situation.
In response to the Russian invasion of Ukraine, Stockmann removed products of Russian and Belarusian origin from
sale in February. As a result, about 200 products of Russian origin were removed from Stockmann’s selections.
Stockmann also discontinued selling merchandise to the Russian partner Debruss. The impact on Stockmann Group is
limited.
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DISPUTES RELATED TO THE RESTRUCTURING PROCESS AND TAX CASES
Stockmann has paid all undisputed external restructuring debt, but still has disputed claims and undisputed conditional or
maximum restructuring debt. At the end of the accounting period 2022, the amount from the disputed claims was EUR
61.3 million. The disputed claim amount is mainly related to the termination of long-term leases of premises. The
administrator of the restructuring programme has disputed the claims and considered it justified to pay 18 months’ rent
for the leases instead of rent for all the years remaining in the lease contract. At the end of September 2022, the disputed
claims amounted to EUR 45.4 million. Since then Stockmann has filed a claim in the District Court regarding the nullity
and the application for annulment regarding the decision given in the arbitration proceedings between LähiTapiola
Keskustakiinteistöt Ky and Stockmann. As a result, EUR 15.9 million is again seen as a disputed case. Two other
remaining claims will be settled in the District Court and one claim by arbitration proceedings. The amount of undisputed
conditional or maximum restructuring debt was EUR 8.8 million. Stockmann has made a provision of EUR 30.8 million,
which corresponds to the company’s estimate of the probable amount relating to both the disputed claims and the
undisputed conditional or maximum restructuring debt. The creditors of such restructuring debt will be entitled to convert
their receivables to shares and bonds after their respective receivables have been confirmed.
LähiTapiola Keskustakiinteistöt Ky, the landlord of Stockmann’s Tapiola department store, initiated arbitration
proceedings against Stockmann in which the company demanded up to EUR 43.4 million in compensation from
Stockmann in accordance with section 27, subsection 1 of the Restructuring Act. The administrator of the restructuring
proceedings disputed the demand of LähiTapiola Keskustakiinteistöt Ky in the restructuring programme to the extent that
it exceeds EUR 3.5 million. In connection with the same, LähiTapiola Keskustakiinteistöt Ky filed a claim against
Stockmann, Stockmann AS and the administrator and/or the supervisor at Helsinki District Court to leave the matter in
abeyance. On 31 August 2022, the Arbitration Court in its arbitration decision partially rejected the claims of LähiTapiola
Keskustakiinteistöt Ky and confirmed that the compensation to be paid to LähiTapiola Keskustakiinteistöt Ky is EUR 19.3
million, of which a previously agreed undisputed amount of EUR 3.4 million was converted to shares and paid. The
remaining compensation to be paid is recognised as a provision and will be re-classified as restructuring debt after the
confirmation of the Court. An arbitration procedure separate from Stockmann plc’s arbitration procedure is in progress
between LähiTapiola and Stockmann AS concerning the amount of compensation to be paid to LähiTapiola as part of the
restructuring proceedings, as well as a separate dispute in Helsinki District Court. In addition, concerning this same
amount of compensation, a dispute is in progress between the administrator and LähiTapiola. The supervisor deems
LähiTapiola’s receivable to be under dispute until the claims mentioned above have been finally resolved. The supervisor
has announced to the company and the Helsinki District Court that the supervisor will not request the district court to
amend the restructuring programme based on the arbitration decision while the receivable is under dispute. It is the
supervisor’s view that no payment based on the arbitration decision must be made to LähiTapiola while the amount of
the receivable is under dispute, because the company, the supervisor and Stockmann AS consider the arbitration
decision to be erroneous.
Nordika II SHQ Oy, the landlord of Stockmann’s Takomotie office space, has filed a claim with Helsinki District Court in
which the company demands compensation amounting to a maximum of EUR 14.5 million from Stockmann in
accordance with section 27, subsection 1 of the Restructuring Act. This claim has been disputed by the supervisor of the
restructuring programme to the extent that it exceeds EUR 1.3 million. The EUR 1.3 million was converted to shares and
paid in March 2022, but the difference is still a claim. In the same claim, Nordika II SHQ Oy has named the administrator
and Stockmann as respondents.
Mutual Insurance Fund Fennia, the lessor of the Tampere department store, has commenced arbitration proceedings
against Stockmann, in which the company demands up to EUR 11.9 million in compensation from Stockmann in
accordance with section 27, subsection 1 of the Restructuring Act. The administrator of the restructuring proceedings has
disputed the claim to the extent that it exceeds EUR 2.8 million. In addition, Mutual Insurance Fund Fennia has filed two
claims with Helsinki District Court regarding Stockmann, with the administrator and the supervisor as respondents in the
first claim and Stockmann as respondent in the other claim. In the claims to Helsinki District Court, Mutual Insurance
Fund Fennia requests the court to confirm that the damages payable to Fennia are the maximum amount of EUR 12
million.
Tampereen Seudun Osuuspankki, the second lessor of the Tampere department store, has initiated proceedings at
Pirkanmaa District Court in which the company demands up to EUR 20.3 million compensation from Stockmann in
accordance with section 27, subsection 1 of the Restructuring Act. In the restructuring programme, the supervisor has
disputed the claim presented by Tampereen Seudun Osuuspankki during the restructuring proceedings (at which time
the maximum amount of the claim was EUR 17.7 million) to the extent that it exceeds EUR 2.0 million.
Pirkanmaan Osuuskauppa, the former subtenant of the Tampere department store, has initiated arbitration proceedings
in which it demands up to EUR 5.4 million compensation from Stockmann in accordance with, among others, section 27,
subsection 1 of the Restructuring Act. The supervisor of the restructuring proceedings has disputed the claim for the
most part. Pirkanmaan Osuuskauppa has also appealed regarding the decision of Helsinki District Court on 9 February
2021 to certify the restructuring programme to the extent that Helsinki District Court viewed that the damages payable to
Pirkanmaan Osuuskauppa are restructuring debt instead of debt that has arisen after the application for restructuring
proceedings came into force pursuant to section 32 of the Restructuring Act. The Helsinki Court of Appeal rejected
Pirkanmaan Osuuskauppa’s appeal in its court decision on 4 November 2021. The Supreme Court granted Pirkanmaan
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Osuuskauppa leave to appeal to the extent that the appeal concerns the claim for damages arising from the termination
of the sublease agreement are restructuring debt or debt that has arisen during the corporate restructuring proceedings.
In its arbitration decision on 25 May 2022, the Arbitration Court mainly rejected the claims of Pirkanmaan Osuuskauppa
and ordered Stockmann to compensate Pirkanmaan Osuuskauppa with EUR 1.5 million in damages. According to the
Supreme Court's decision announced on 8 December 2022, Pirkanmaan Osuuskauppa's claim for damages, EUR 1.5
million, from Stockmann is a reconstructing restructuring debt to be taken into account in Stockmann's corporate
restructuring pursuant to section 27 subsection 1 and 4 of the Restructuring Act, and there is therefore no reason to
change the outcome of the Helsinki Court of Appeal previous decision.
Regarding the other disputed receivables mentioned in the restructuring programme, conciliation negotiations are
underway and some of them have already been settled amicably.
The Swedish tax authorities took a negative stance on the taxation of Stockmann’s subsidiary Stockmann Sverige AB
regarding its right to deduct interest expenses during the years 2013–2019 for a loan raised for the acquisition of AB
Lindex. The processing of the case continued in the Administrative Court of Appeal, from which a decision was received
in September 2022. According to the decision, the Administrative Court of Appeal overturned the previous court
decisions and approved Stockmann's appeal and confirmed that Stockmann Sverige AB was entitled to a deduction of
interest expenses corresponding to a lower tax cost of approximately EUR 17 million during the years 2013–2016.
According to a decision received in October 2022, the County Administrative Court in Gothenburg approved Stockmann's
appeal and confirmed that Stockmann Sverige AB was entitled to a deduction of interest expenses, which corresponds to
a lower tax cost of approximately EUR 13 million during the years 2017–2019. Based on the court decision from the
Administrative Court of Appeal Stockmann Sverige AB decreased its tax liability by reducing income taxes by EUR 2.1
million, which corresponds to the interest on the taxes. The capital of the taxes remained still as a tax liability. Both court
decisions were open for an appeal process at the end of the year. The Supreme Administrative Court in Sweden decided
on 27 January 2023 that it will not grant a leave to appeal to the Swedish Tax Agency for the decision made by the
Administrative Court of Appeal on Stockmann’s subsidiary Stockmann Sverige AB’s right to deduct interest expenses
during the years 2013-2016 for the loan it raised for the acquisition of AB Lindex. Consequently, on 3 February 2023 the
Administrative Court of Appeal stated that the Swedish Tax Agency withdrew their appeal against the decision made by
the County Administrative Court on the right to deduct interest expenses during the years 2017-2019. Based on the
decisions, Stockmann Sverige AB’s tax liability and income taxes will decrease by approx. EUR 30 million and no tax
liability for the years 2013-2019 will remain.
RISK FACTORS
Stockmann is exposed to risks that arise from the operating environment, risks related to the company’s own operations
and financial risks. The general economic situation and the COVID-19 pandemic affect consumers’ purchasing behaviour
and purchasing power in all of the Group’s market areas. Consumers’ purchasing behaviour is also influenced by
digitalisation, the growth of remote working and changing purchasing trends as well as by emerging inflationary
pressures. Rapid and unexpected movements in markets and the geopolitical situation may influence on the financial
markets, logistics and consumer behaviour. Uncertainties related to changes in purchasing behaviour are considered to
be the principal risk arising from the operating environment that could affect Stockmann also in the future. The
uncertainty in the operating environment may continue to affect the operations of Stockmann’s tenants and may
consequently have a negative impact on rental income.
Stockmann’s business is affected by normal seasonal fluctuations during the year. The revenue in the first quarter is
typically low and revenue in the fourth quarter is typically higher. Fashion accounts for approximately 80% of the Group’s
revenue. An inherent feature of the fashion trade is the short lifecycle of products and their dependence on trends, the
seasonality of sales and the susceptibility to abnormal changes in weather conditions. These factors may have an impact
on the Group’s revenue and gross margin.
In the retail sector, the value chain of products from raw material to customers often contains many stages and involves
risks related to the fulfilment of human rights, good working conditions, and environmental and other requirements set
out in Stockmann’s Code of Conduct and other policies. Responsible management of the supply chain and sustainable
use of natural resources are important for the Group’s brands in order to retain customer confidence in Stockmann.
Risks related to production and supply may arise from unusual situations such as an escalation of the COVID-19
pandemic or a new epidemic leading to governmental restrictions, strikes, political uncertainties or conflicts which may
stop or cause delays in production or supply of merchandise, and which in turn may affect business negatively. The
Group’s operations are based on flexible logistics and the efficient flow of goods and information. Delays and
disturbances in logistic and information systems, as well as uncertainties related to logistics partners, can have an
adverse effect on operations. Every effort is made to manage these operational risks by developing appropriate back-up
systems and alternative ways of operating, and by seeking to minimise disturbances to information systems.
The Group’s revenue, earnings and balance sheet are affected by changes in exchange rates between the Group’s
reporting currency, which is the euro, and the Swedish krona, the Norwegian krone and the US dollar and certain other
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currencies. Currency fluctuations may have an effect on the Group’s business operations. The Group is currently only
partly hedging the foreign exchange risks due to the corporate restructuring. Interest rate fluctuations may also have an
impact on goodwill impairment testing through discount rates.
The Group’s ability to arrange new financing are limited during the execution of the corporate restructuring programme.
This may have an effect on the sufficiency of liquidity and on the financial position. Failure to meet the requirements may
lead to the termination of the restructuring or bankruptcy.
DISCLOSURE OF NON-FINANCIAL INFORMATION
The Stockmann Group is a Finnish listed company engaging in the retail trade, whose business operations focus on
offering a comprehensive range of high-quality products and services in multi-channel department stores, fashion stores
and e-commerce. Stockmann is committed to a responsible business strategy and responsible business development in
all operations in both of its divisions. The product and service range is being developed in line with sustainable values, so
that customers can be provided with an increasing volume of sustainable options. It consists of fashion, beauty, home
and grocery products, as well as the supporting services. The company has eight department stores and 436 fashion
stores including franchising stores spread over 18 countries.
The daily operations are based on the Group’s strategy and values, Stockmann’s Code of Conduct, and the corporate
social responsibility (CSR) strategies of both of its divisions and in line with national and international sustainability
commitments. The CSR focus areas are identified through comprehensive materiality assessments and stakeholder
dialogue. CSR targets and indicators are then integrated into business operations, and their development is monitored
on a regular basis. In 2021, a stakeholder survey was conducted in all countries of operation in order to update the
Stockmann division’s CSR strategy, and a materiality assessment was carried out on the basis of its results. The views
of the Stockmann Group's various stakeholders and the Board of Directors were considered in the materiality
assessment process of the Stockmann division. The representatives of the Board have participated in the definition of
materiality based on the results of the Stockmann division's extensive online survey in in-depth interviews, where the
preliminary results have been discussed and deepened.
The Lindex division has also conducted a comprehensive
stakeholder survey to further develop its CSR work among Lindex employees and customers.
The Group’s continuous CSR development work is guided by the CSR strategies and promises of the Stockmann and
Lindex divisions. According to the CSR promises, Lindex focuses on empowering women and the Stockmann division
develops its operations towards more resource-wise retail business. According to the CSR strategies, Lindex commits to
empowering and inspiring women everywhere, while respecting the planet and defending human rights. The focus areas
of the Stockmann division’s CSR strategy are profitable and responsible business, environmental sustainability as well as
ethical responsibility and collaboration.
The Stockmann Group communicates openly about its CSR work and reports annually on its CSR focus areas, targets
and developments in the Group’s CSR Review, which is prepared according to Global Reporting Initiative (GRI)
standards. The CSR Review will be published in the week beginning 24 February 2023 at
year2022.stockmanngroup.com. Lindex will report on its sustainability in a separate report that will be available at
lindex.com.
Key commitments, codes of conduct and policies
Stockmann’s operations comply with international and national laws and regulations as they stand at the time in question
in its countries of operation. The Group’s operations are also guided by international treaties and recommendations, such
as the UN Universal Declaration of Human Rights, the UN Convention on the Rights of the Child, the ILO Declaration on
Fundamental Principles and Rights at Work, the OECD Guidelines for Multinational Enterprises, the UN Sustainable
Development Goals and the UN Guiding Principles on Business and Human Rights. In addition, Stockmann is committed
to the UN Global Compact initiative, and promotes human rights, labour rights, environmental protection and
anticorruption measures in accordance with the initiative. The Stockmann Group was among the first companies to sign
the new expanded International Accord for Health and Safety in the Textile and Garment Industry. The accord is a
successor to the so-called Bangladesh Accord on Fire and Building Safety, which was signed by Stockmann in 2013,
thus becoming the first company in Finland to do so. Further information about other international commitments is
provided in Stockmann’s CSR Report 2022 and on the Group’s website.
The Stockmann Group’s Code of Conduct and other Group policies determine the way in which all personnel and
partners operate. This Code and the related clarifications have been included in the Group’s Collaboration Agreements,
and Stockmann requires all of its suppliers and partners to commit to and comply with the Code of Conduct or to
demonstrate their commitment to equivalent principles. As part of responsibility management, the principles are
communicated to both internal and external stakeholders. The Code of Conduct covers compliance with laws and ethical
practices, free competition and consumer rights, employees and working conditions, the environment, and corruption and
conflicts of interest.
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By the end of 2022, 93% (89) of the Stockmann division’s personnel in Finland and 100% (100) of its personnel in Latvia
had completed online training on the Code of Conduct. During 2022 the Code of Conduct online training was also
implemented in Estonia. All new employees read through the instructions on their first day of work.
In Finland, 83% (90)
of the members of the management teams of Stockmann’s support functions and department stores have completed the
training. For Estonia and Latvia, the corresponding figure is 100%. Our target is for 100% of the Group’s personnel in all
countries to have completed the training.
Respecting human rights
Stockmann respects and promotes all human rights in accordance with its Code of Conduct and human rights policy. The
company is committed to ensuring that fundamental rights are respected, and that people are treated with dignity and
respect. We implement due diligence as required by the UN Guiding Principles on Business and Human Rights in order
to identify and prevent any negative human rights impacts caused by or resulting from our business operations.
Stockmann has recognised that the most significant human rights risks related to its business operations lie in the
product supply chains and concern working conditions. A significant portion of Stockmann’s own fashion brands, 96%
(94), and those of Lindex, 94% (98), are manufactured in areas classified as high-risk by amfori BSCI. The Stockmann
Group is aware that these countries involve a risk that the Code of Conduct might be violated, and therefore actively
strives to ensure compliance.
The Stockmann Group has been a member of amfori BSCI since 2005, and therefore is committed to systematically
improving the working conditions at its production facilities over the long term. In addition, Stockmann has been
committed to promoting fire and construction safety in Bangladesh through the Accord it signed in 2013. In 2020, Lindex
transferred from amfori BSCI to compliance with the SEDEX standard. As a member of SEDEX, Lindex applies the
SMETA (Sedex Members Ethical Trade Audit) method. Factories in all high-risk countries that manufacture Stockmann’s
and Lindex’s own-brand products undergo regular in-house audits by Stockmann Group’s local personnel, as well as
amfori BSCI, SEDEX or SA8000 audits conducted by a third party. To ensure transparency and traceability, both
Stockmann and Lindex publish a comprehensive list of their own brands’ suppliers and factories on their websites.
Product safety and responsible supply chain
Stockmann offers a wide range of safe and durable products and focuses on the responsibility and transparency of its
supply chain. In the Stockmann division’s department stores, the majority of the selection consists of international
branded products, complemented by a wide range of Stockmann’s own-brand products in the fashion and home
categories, designed by the Stockmann division’s own designers and leveraging the synergy created by a joint
procurement organisation with Lindex. Most of the Lindex selection consists of its own brands.
As part of responsible supply chain management, the Stockmann division’s own-brand suppliers and producers are
required to comply with Stockmann’s Supplier Code of Conduct. All manufacturers of Stockmann’s own products have
signed the Stockmann Supplier Code of Conduct, the amfori BSCI Code of Conduct or a similar commitment. The
Group’s purchasing offices have local personnel at five main production sites to monitor production quality and
compliance with the Code of Conduct. In addition, producers in high-risk countries are subject to third-party liability
audits. The long-term target is for 100% of Stockmann’s own-brand producers in high-risk countries to have undergone
an amfori BSCI or similar audit.
All suppliers and business partners supplying or acting on behalf of Lindex are required to sign the Lindex sustainability
commitment, code of ethics and Code of Conduct. Together, these outline the Lindex expectations for suppliers and
business partners. In 2022 Lindex worked with 97 suppliers and a total of 152 factories. One hundred per cent were
covered by the Code of Conduct. Lindex is a member of Sedex and uses the SMETA audit approach. SMETA stands for
Sedex Members Ethical Trade Audit, and Lindex selected this system because of the embedded focus on gender
equality.
The Stockmann Group is responsible for the safety of the products it sells, ensuring that they do not pose a risk to
customers’ health or property. Product safety is ensured in collaboration with suppliers. Product testing and quality
checks are carried out to ensure that the products fulfil all statutory quality and safety requirements and any stricter
requirements set by the company. During the reporting year, Stockmann and Lindex had no public product recalls.
Prevention of corruption and bribery
The Stockmann Group’s policies related to anti-corruption and anti-competitive practices are included in its Code of
Conduct and are further specified in the Group’s anti-corruption policy. The Stockmann Group has zero tolerance
towards all forms of bribery and corruption. The Stockmann Group’s employees and management are expected always
to perform their duties honestly and with integrity, in the best interests of the company, avoiding any conflicts of interest
and complying with local laws.
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The Stockmann Group uses a Group-wide whistleblowing channel operated by an external supplier, which can be used
anonymously by employees, partners and other stakeholders to report any suspected or detected violations of the Code
of Conduct or other Group guidelines. Stockmann’s employees can also report any suspicions to their supervisor, their
unit’s security manager, the Group management, the legal department or the Group’s Internal Audit. All whistleblowing
reports and discussions are taken seriously and handled confidentially. All incidents are reported to Internal Audit and to
the Director of Legal Affairs. In 2022, one incident was reported through the channel. The incident was not related to
corruption. It was investigated, and the necessary measures were carried out. Stockmann was not made aware of any
legal cases, proceedings or decisions concerning corruption, anti-competitive behaviour or anti-trust practices in 2022.
Customers
The Stockmann Group engages in continuous dialogue with its customers to maintain and improve customer satisfaction.
Efforts towards more effective customer dialogue include close cooperation with customers in service development,
customer pilots and testing, customer surveys and panels, and customer satisfaction measurements. In addition,
Stockmann actively uses social media and other feedback channels to understand customer needs and expectations
better. In 2021, the Stockmann division selected the Emotional Value Index (EVI), which measures emotional
experience, as its new customer experience performance indicator. The division-level EVI result for 2022 was 58 (49).
The EVI result was 65 (65) for the department stores, 22 (6) for customer service and 54 (48) for the online store.
Stockmann will continue to develop the customer experience systematically and purposefully in 2023.
To inspire and support its customers in making responsible choices, both the Stockmann Group’s divisions openly share
information about their CSR work, actively promote the sustainability of its selection and services, and regularly
participate in sustainability and charity projects. Sustainability aspects are part of customer satisfaction measurements. A
separate sustainability survey for the Stockmann division’s customers is carried out twice a year. The target score to be
achieved by the end of 2022 is 4 (on a scale of 1 to 5). The result for 2022 was 3.7
(3.7). Stockmann will continue to
make systematic efforts to improve sustainability.
In its operations, Stockmann complies with the current competition and privacy laws and promotes free competition in its
sector. There were no GDPR incidents in the Stockmann Group in 2022. Stockmann’s annual target is zero incidents of
customer privacy breaches.
Personnel
Highly motivated and committed personnel is the backbone of Stockmann’s business. The Stockmann Group’s Human
Resources (HR) policies are based on the company’s values, strategy and Code of Conduct, and the human rights policy
of the Stockmann Group. Ensuring a safe working environment, promoting equality and diversity, and supporting the
professional growth and wellbeing of employees are an essential part of Stockmann’s responsible HR practices. The
implementation of good HR policies is monitored through personnel surveys, performance appraisal discussions and
other feedback channels. Cooperation also takes place in local personnel committees and the Group’s employee council.
The coronavirus pandemic that broke out in the spring of 2020 still continued to pose some challenges for Stockmann’s
business operations. In 2022, the constraints resulting from the pandemic were addressed through country-specific
temporary adjustment measures. The year was demanding for our employees, as the company continued to adjust its
operations and cost levels to the changes in the operating environment caused by the high inflation and insecurity
affecting consumer behaviour in all the Stockmann Group’s countries of operation, and to some extent still caused by the
coronavirus pandemic. The company continued to implement cost-saving measures in both business divisions to
improve cost efficiency in the exceptional prevailing circumstances. At the same time, the company continued to
implement its revised strategies and process development to improve business performance and customer satisfaction.
Organisational changes to improve profitability continued in the Stockmann division. Major investments were also made
in further developing employees’ competence and work culture.
The Group’s average number of employees was 5 802 (5 649) in 2022. In terms of full-time equivalents, the average
number of employees was 4 332 (3 886). At the end of the year, the Group had 6 008 (5 833) employees, of whom 1 619
(1 512) were working in Finland. The number of employees working outside Finland was 4 389 (4 321), or 73.1% (74.1)
of the total number of personnel. Among the Stockmann Group’s employees, women represented 91% (91) and men 9%
(9).
The Group’s wages and salaries amounted to EUR 165.7 million in 2022, compared with EUR 149.3 million in 2021. The
total employee benefit expenses were EUR 212.1 million (194.6), or 21.6 % (21.6) of revenue.
The environment
The goal of Stockmann's responsibility management is to reduce and prevent the negative environmental impact of the
company's business by reducing emissions, improving energy efficiency and reducing water consumption, as well as by
sorting and recycling waste. To ensure continuous improvement, Stockmann monitors compliance with and development
of the environmental goals of the department stores' environmental system. All Stockmann’s operations in Finland have
an ISO 14001 environmental management system in place. The same operating methods have been adopted in the
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department stores in the Baltic countries.
Energy efficiency is one important part of Stockmann’s environmental work. The Group’s own energy consumption
mainly consists of electricity and district heating and cooling. Energy is consumed by the lighting, ventilation, heating and
cooling systems in the stores, distribution centres and offices, as well as by other equipment and machinery in these
facilities, such as lifts and escalators. As part of active environmental efforts to reduce climate impacts, employees’
environmental awareness is maintained through training and regular internal communications.
During 2022, the Group’s divisions continued to promote measures to reduce emissions. In keeping with its goal-oriented
work, in 2021 Stockmann Group made a commitment to set emission reduction targets in accordance with the criteria of
the Science Based Targets initiative (SBTi) in line with the Paris Agreement. The goal is to set science-based climate
targets to reduce greenhouse gas emissions in the Group’s own operations and value chain. Through the SBTi
commitment, Stockmann will enhance its climate action and further develop a low-carbon roadmap to cut emissions and
reduce climate risks. The Stockmann division has renewed Stockmann Group’s CO
2
Stockmann Group’s scope 1, 2 and 3 emissions. This renewal has considered Science Based Target (SBT)
requirements. The division has executed means to decrease energy consumption to respond not only to CO
2
targets but also to contribute to the general energy challenge related to the energy crisis in Europe.
Reporting on GHG emissions serves as a management tool in the Stockmann Group. Stockmann’s carbon footprint in
2022 covers the Stockmann and Lindex divisions in all countries of operation. The Group is reporting its 2022 CO
2
emissions in the SBT-eligible way. Stockmann reports annually on its carbon dioxide emissions in the Group’s CSR
Review and in the international Carbon Disclosure Project (CDP) climate change survey. In 2022, Stockmann’s CDP
result continued to be at the good level of B- (B-), similar to the three previous years. Stockmann’s rating is at the same
level as the global average (B-) and slightly lower than the regional average for Europe (B). The rating reveals that
Stockmann has taken coordinated action on climate issues.
The share of certified renewable energy purchased in the Stockmann Group in 2022 was 49%, total 107 515 MWh
(34 580), of which Stockmann's share is 56 % and Lindex's 44 %.
In 2022, the largest share of emissions, approximately 69% (67) of the Stockmann Group’s carbon footprint, resulted
from purchased goods and services, which included all the production emissions of inbound goods and also of
operational expenses (Scope 3, Category 1). The next largest emissions come from downstream transportation and
distribution (Scope 3, Category 9), with a share of 12% (10). The third largest emissions, 8% (9), come from the use of
sold products (Scope 3, Category 11).
In addition, the market-based purchased electricity and heat was in total 8 ktCO
2
e, 3% (9), where Lindex’s share was
21% (33) and the Stockmann division’s 79% (67), due to the fact that the Stockmann division has department stores
which consumed a significant amount of electricity and district heating.
At the time of publication of this report, the Lindex calculation was incomplete, but the impact on total emissions is minor.
Stockmann Group has identified the circular economy as one of the key themes in promoting sustainable business, and
thus seeks to act in line with the principles of the circular economy. Lindex is working within its own operations as well as
within the supply chain to transition to renewable fuel sources, push for innovative and resource-efficient processes,
eliminate hazardous chemical use, safeguard the waterways and extend the life of products. Lindex continues to make
progress towards its goals, which have been updated in 2022 to reflect the clear prioritisation of addressing the climate
crisis, transitioning the business to a circular model and protecting natural resources. The Stockmann division works on
the same principles as Lindex and aims to reduce the environmental impacts of own-brand products and to increase the
use of more sustainable materials in its own-brand products.
Lindex has launched a new recycled fibres goal and a roadmap for achieving it. The aim is that 70% of all products will
include a minimum of 15 per cent recycled content by 2026. As of the end of 2022, 27 per cent of the materials were
recycled, compared to 16 per cent in 2021. In addition, as part of the Lindex pilot with Södra and the commitment to
circularity, Lindex booked 250 tonnes of OnceMore® material made from post-consumer textile waste. This has been
integrated into our supply chain where it is being made into about a million garments that will be available in stores at the
end of 2022 and throughout 2023.
In 2022, 66% (60) of Stockmann’s own-brand garments were made from more sustainable materials, and 92% (88) of its
own brand knitwear was made from more sustainable cotton. Both indicators exceeded their target level. Stockmann’s
target was that, by 2021, 50% of its own-brand garments would be made from more sustainable materials, and that 80%
of its own brand knitwear would be made from more sustainable cotton. Since these goals have been achieved,
Stockmann has started work to re-evaluate and set new goals for the use of materials that support the circular economy
and sustainable development. Active collaboration and dialogue with goods suppliers will continue so that information on
the origin of products and sustainable materials can be made more available to customers in a transparent manner, for
both our own brands and our partners’ brands.
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CSR risks and risk management
The Stockmann Group's most significant CSR-related risks have been identified as concerning the supply chains of the
product selections. The well-known international and domestic branded products in Stockmann's department stores form
the majority of the department store's range. The suppliers of these products are expected to commit to the Stockmann
Code of Conduct or to demonstrate a similar commitment. In addition, Stockmann’s department stores have a wide
range of Stockmann’s own brands. The majority of the Lindex range consists of its own-brand products. A significant
proportion of the Group’s own-brand products are manufactured in regions classified as high-risk countries by amfori
BSCI. This proportion is 96% (93) for Stockmann and 94% (98) for Lindex. In the management of its own-brand supply
chains, the Group is exposed to various risks, such as the traceability and transparency of supply chains, the
implementation of human and labour rights, and the environmental impacts of production and raw materials.
Stockmann manages these risks through responsible purchasing practices and established policies and risk
management methods. The risks are monitored in accordance with the CSR strategy and good corporate governance as
part of business risk management. All suppliers of the Group’s own brands are required to comply with Stockmann’s
Supplier Code of Conduct, which is based on the 11 core labour rights of amfori BSCI, or on a similar commitment. The
Group’s purchasing offices have local staff at five main production sites and monitor the quality of production and
adherence to ethical principles. In addition, third-party sustainability audits are carried out for producers in high-risk
countries. All deviations are addressed immediately, and corrective measures are taken.
Other identified CSR-related risks regarding the Group’s business operations include risks related to the employees’
competence and wellbeing, product safety and environmental awareness. Failure to respond to risks within these areas
could have an impact on the Group’s business development, brand and reliability. Open dialogue and cooperation with
the Group’s stakeholders, as well as transparent CSR communication, are an essential part of Stockmann’s risk
management activities.
STOCKMANN’S ASSESSMENT OF EU TAXONOMY-ELIGIBLE AND -ALIGNED
ACTIVITIES
The EU taxonomy is a classification system establishing a list of environmentally sustainable economic activities. It aims
to help the EU to scale up sustainable investment and implement the European green deal. The EU taxonomy would
provide companies, investors and policymakers with appropriate definitions for which economic activities can be
considered environmentally sustainable. In this way, it should create security for investors, protect private investors from
greenwashing, help companies to become more climate-friendly, mitigate market fragmentation and help shift
investments where they are most needed.
The Taxonomy Regulation currently applies to listed companies with more than 500 employees that fall under the Non-
Financial Reporting Directive. Stockmann plc, which is listed on the stock exchange and employs more than 500 people,
must assess its EU taxonomy eligibility and alignment. The EU’s taxonomy does not define criteria that are specific to
Stockmann Group’s business in the retail sector. Currently, criteria exist for 13 different sectors, including energy
production, construction and real estate, transport and forestry. An economic activity is considered taxonomy-eligible if it
is listed in the EU taxonomy and can potentially contribute to at least one of the six environmental objectives: climate
mitigation, climate adaptation, sustainable use and protection of water and marine resources, transition to a circular
economy, pollution prevention and control, protection and restoration of biodiversity and ecosystems. In the 2022
assessment, the two environmental objectives that are defined by the EU and can be applied are climate change
mitigation and adaptations. The development of the EU taxonomy will be monitored, and internal understanding of the
possible impact of the EU taxonomy framework on the Stockmann Group’s business operations continue to be
enhanced.
Stockmann’s business in the retail sector
At the time of preparing this report, the Stockmann Group’s retail business is not included in the sectors that are within
the scope of the EU taxonomy. However, the retail sector may have a significant impact on the other environmental
objectives of the taxonomy, such as the circular economy, but applicable criteria have not yet been published. The
Stockmann Group has assessed the impacts of its business operations and has actively promoted the circular economy
by optimising the use of packaging materials, using high-quality and sustainable materials in products, making increasing
use of recyclable and recycled materials, enhancing the recycling of waste, increasing services that support sustainability
and attempting to promote sustainable consumption habits. The Stockmann Group has also systematically increased the
energy efficiency of its operations and disclosed its greenhouse gas emissions at the Group level for 10 years.
Stockmann Group has thus recognised the climate impact of its operations throughout the value chain, has carried out
measures and is committed to setting science-based SBT climate targets.
Stockmann’s real estate holdings
The EU taxonomy defines criteria for sustainable financial operations in the real estate business. Under the Taxonomy
Regulation, the acquisition and ownership of buildings (Activity 7.7 ‘Acquisition and ownership of buildings’) is classified
as a sector covered by the taxonomy. During the financial year 2022, Stockmann plc owned Riga and Helsinki
department store real estates in Q1 and paid real estate-related capital expenditure in April. After the completion of the
divestment of these real estates, the premises were leased-back and are treated in the Stockmann Group’s accounts as
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right-of-use assets in accordance with IFRS 16. The amounts of the right-of-use assets that the Group retains are
recorded in capital expenditure and thus included in the EU taxonomy assessment as eligible.
Stockmann’s assessment of other potential taxonomy-eligible activities
Another EU taxonomy category in which Stockmann Group’s operating activity could be assessed is transport by
motorbikes, passenger cars and light commercial vehicles (Activity 6.5. ‘Transport by motorbikes, passenger cars and
light commercial vehicles’). Currently the impact from owned and leased cars is below the Stockmann Group’s defined
materiality.
The Stockmann Group reported EU taxonomy eligibility in 2021, and 2022 is the first year to report EU taxonomy
alignment. Out of the six EU taxonomy environmental objectives, the company contributes to climate change mitigation.
In this report, Stockmann Group has assessed the EU taxonomy eligibility and alignment of its business activities in real
estate for turnover, capital expenditure and operating expenses as follows:
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18
19
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EVENTS AFTER THE REPORTING PERIOD
The Supreme Administrative Court in Sweden decided on 27 January 2023 that it will not grant a leave to appeal to the
Swedish Tax Agency for the decision made by Administrative Court of Appeal on Stockmann’s subsidiary Stockmann
Sverige AB’s right to deduct interest expenses during the years 2013-2016 for the loan it raised for the acquisition of AB
Lindex. On 31 January 2023, the Swedish Tax Agency also withdrew the appeal for the years 2017–2019. Consequently,
the decisions made by the Administrative Court of Appeal became legally valid and thus Stockmann Sverige AB is
entitled to deduct the interest expenses in taxation, which corresponds to a lower income tax of approximately EUR 30
million. The Stockmann Group will recognise a reversal of the related tax liability during the first quarter of 2023, which
will decrease the income taxes on the income statement and the tax liability on the statement of financial position.
ANNUAL REPORTING 2022
Stockmann Group’s Annual Report, Financial Review, Remuneration Report, Corporate Governance Report and
Corporate Responsibility Report for 2022 will be published during the week beginning 27 February 2023 (week 9).
Helsinki, 23 February 2023
STOCKMANN plc
Board of Directors
21
Key figures
2022
2021
2020
2019
2018
Revenue *)
EUR mill.
981,7
899,0
790,7
960,4
1 018,8
Gross profit *)
EUR mill.
568,3
527,0
443,7
540,9
580,1
Gross margin *)
%
57,9
58,6
56,1
56,3
56,9
EBITDA *)
EUR mill.
258,0
184,9
109,6
153,0
76,0
Adjustments to EBITDA *)
EUR mill.
75,1
13,8
-7,3
-15,6
-8,4
Adjusted EBITDA *)
EUR mill.
183,0
171,1
116,9
168,6
84,3
Operating result *)
EUR mill.
154,9
82,1
-269,6
24,1
-5,0
Share of revenue *)
%
15,8
9,1
-34,1
2,5
-0,5
Adjustments to operating result *)
EUR mill.
75,1
13,8
-257,3
-15,6
-33,4
Adjusted operating result *)
EUR mill.
79,8
68,3
-12,3
39,8
28,4
Net result for the period
EUR mill.
101,6
47,9
-291,8
-45,6
-45,2
Adjustments to net result for the period *)
EUR mill.
51,5
7,9
-255,8
-12,5
-31,7
Adjusted net result for the period *)
EUR mill.
50,2
40,0
-36,0
-33,1
-12,1
Share capital
EUR mill.
77,6
77,6
144,1
144,1
144,1
A share
EUR mill.
61,1
61,1
61,1
B share
EUR mill.
77,6
77,6
83,0
83,0
83,0
Return on equity
%
33,7
20,2
-86,7
-9,3
-5,2
Return on capital employed
%
15,7
8,0
-20,1
1,6
-0,4
Capital employed
EUR mill.
1 005,4
1 059,2
1 237,4
1 529,1
1 540,1
Capital turnover rate
1,0
0,8
0,6
0,6
0,7
Inventories turnover rate
2,4
2,4
2,6
2,9
3,1
Equity ratio
%
26,2
18,9
14,5
27,8
46,2
Net gearing
%
135,4
212,8
340,7
191,7
64,5
Capital expenditure
EUR mill.
62,5
16,9
18,5
33,8
29,3
Share of revenue *)
%
6,4
1,9
2,3
3,5
2,9
Interest-bearing net debt
EUR mill.
622,3
570,8
702,5
900,2
543,3
Interest-bearing net debt / EBITDA
EUR mill.
1,8
3,1
6,4
5,9
7,2
Total assets
EUR mill.
1 282,9
1 416,5
1 425,3
1 690,3
1 827,9
Staff expenses *)
EUR mill.
212,1
194,6
181,9
211,1
222,0
Personnel, average *)
persons
5 802
5 649
5 991
7 002
7 241
Average number of employees, converted
to full-time equivalents *)
persons
4 332
3 886
3 973
4 891
5 299
Revenue per person *)
EUR
thousands
169,2
159,1
132,0
137,2
140,7
*) continuing operations
Stockmann Group changed its accounting principle according to IFRIC agenda decisions on configuration or
customisation costs in a cloud computing arrangement (IAS 38) in the financial year 2021. Additionally, the costs related
to disputed landlords’ claims for terminated lease agreements in 2020 were reclassified from financial items to other
operating expenses.
Stockmann Group changed from its previous revaluation model to a cost model for its property, plant and equipment in
the financial year 2020. The change in accounting method was applied retrospectively as of 1 January 2019 according to
the IAS 8 standard. The change in the accounting policy had a remarkable impact on the comparability of certain key
figures.
IFRS 16 implementation in 2019 had a significant impact on the comparability of certain key figures.
Stockmann Delicatessen in Finland was reported as discontinued operation for financial year 2018.
22
Key figures per share
2022
2021
2020*)
2019*)
2018*)
Earnings per share, continuing operations
EUR
0,65
0,42
-3,89
-0,69
-0,65
Earnings per share, discontinued operations
EUR
-0,02
Earnings per share (undiluted and diluted)
EUR
0,65
0,42
-3,89
-0,69
-0,67
Adjusted Earnings per share (undiluted and
diluted)
EUR
0,32
0,35
-0,48
-0,53
-0,23
Cash flow from operating activities per share
EUR
0,35
1,32
2,03
1,42
1,15
Equity per share
EUR
2,15
1,74
2,86
6,52
11,71
Dividend per share
EUR
Dividend per earnings
%
P/E ratio of shares
A share
-0,3
-3,1
-2,9
B share
3,0
5,1
-0,3
-2,9
-2,7
Share quotation at 31.12.
EUR
A share
1,27
2,26
2,00
B share
1,97
2,16
1,16
2,06
1,92
Highest price during the period
EUR
A share
3,59
3,16
5,64
B share
3,26
2,44
3,22
2,74
5,13
Lowest price during the period
EUR
A share
0,88
1,90
1,84
B share
1,46
1,07
0,65
1,78
1,65
Average price during the period
EUR
A share
1,87
2,41
2,53
B share
2,19
1,61
1,45
2,12
3,31
Share turnover
thousands
A share
576
2 102
1 281
3 875
B share
94 830
90 210
30 258
13 127
13 952
Share turnover
%
A share
0,5
6,9
4,2
12,7
B share
60,8
79,1
72,9
31,6
33,6
Market capitalisation at 31.12.
EUR mill.
307,1
333,6
86,9
154,5
140,8
Number of shares at 31.12.
thousands
155 880
154 437
72 049
72 049
72 049
A share
30 531
30 531
30 531
B share
155 880
154 437
41 518
41 518
41 518
Weighted average number of shares, undiluted
thousands
155 189
114 009
75 102
75 102
75 102
Weighted average number of shares, diluted
thousands
155 347
114 009
75 102
75 102
75 102
Total number of shareholders at 31.12.
44 289
45 054
43 656
43 394
44 396
*) Key figures per share for years 2018-2020 are adjusted for comparison purposes.
23
Items affecting comparability
Stockmann uses Alternative Performance Measures according to the guidelines of the European Securities and Market
Authority (ESMA) to better reflect the operational business performance and to facilitate comparisons between financial
periods.
Adjusted operating result (adjusted EBIT) is calculated from operating result excluding any adjustments related to
acquisitions and disposals, restructuring, impairment losses, litigation fees and settlements, value adjustments to assets,
losses related to the war in Ukraine as well as disputed, conditional or maximum restructuring debt.
Adjusted net result is calculated from net profit/loss for the period excluding any adjustments after tax impact related to
acquisitions and disposals, restructuring, impairment losses, litigation fees and settlements, value adjustments to assets,
losses related to the war in Ukraine as well as disputed, conditional or maximum restructuring debt.
EUR mill.
2022
2021
2020
2019
2018
Adjusted EBITDA
183,0
171,1
116,9
168,6
84,3
Adjustments to EBITDA
Costs for disputed, conditional and maximum
restructuring debt
-18,1
Restructuring and transformation measures
-2,0
-10,9
-7,3
-15,2
-3,3
Gain on sale of real estate properties
95,4
21,7
-0,4
6,8
Value adjustment to assets held for sale
-11,9
War in Ukraine related losses
-0,5
Employee insurance refunds
0,3
3,0
Adjustments total
75,1
13,8
-7,3
-15,6
-8,4
EBITDA
258,0
184,9
109,6
153,0
76,0
Adjusted operating result (EBIT)
79,8
68,3
-12,3
39,8
28,4
Adjustments to EBIT
Goodwill impairment
-250,0
-25,0
Costs for disputed, conditional and maximum
restructuring debt
-18,1
Restructuring and transformation measures
-2,0
-10,9
-7,3
-15,2
-3,3
Gain on sale of properties
95,4
21,7
0,0
-0,4
6,8
Value adjustment to assets held for sale
-11,9
War in Ukraine related losses
-0,5
Employee insurance refunds
0,3
3,0
Adjustments total
75,1
13,8
-257,3
-15,6
-33,4
Operating result (EBIT)
154,9
82,1
-269,6
24,1
-5,0
24
EUR mill.
2022
2021
2020
2019
2018
Adjusted net result for the period *)
50,2
40,0
-36,0
-33,1
-12,1
Adjustments to net profit/loss for the period
Goodwill impairment
-250,0
-25,0
Costs for disputed, conditional and maximum
restructuring debt
-18,1
Restructuring and transformation measures
-2,0
-10,9
-7,3
-15,2
-3,3
Gain on sale of properties
95,4
21,7
0,0
-0,4
6,8
Value adjustment to assets held for sale
-11,9
War in Ukraine related losses
-0,5
Employee insurance refunds
0,3
3,0
Income taxes
-23,6
-5,9
1,5
3,2
1,7
Adjustments total
51,5
7,9
-255,8
-12,5
-31,7
Net result for the period *)
101,6
47,9
-291,8
-45,6
-43,7
*) Continuing operations
25
Definition of key figures
Performance measures according to IFRS
Earnings per share,
continuing operations
Result for the period attributable to the parent company’s shareholders from continuing
operations − tax-adjusted interest on hybrid bond / Average number of shares, adjusted
for share issue
Earnings per share,
discontinued operations
Result for the period attributable to the parent company’s shareholders from discontinued
operations − tax-adjusted interest on hybrid bond / Average number of shares, adjusted
for share issue
Earnings per share
Result for the period attributable to the parent company’s shareholders − tax-adjusted
interest on hybrid bond / Average number of shares, adjusted for share issue
Alternative performance measures
Gross profit
Revenue – materials and services
Gross margin
Gross profit / revenue x 100
EBITDA
Operating result + depreciation, amortisation and impairment losses
Adjusted EBITDA
EBITDA – adjustments, see items affecting comparability
Adjusted operating result
Operating result − adjustments, see items affecting comparability
Adjusted net result for the
period
Net profit/loss for the period – adjustments after tax impact, see items affecting
comparability
Adjusted earnings per share
Adjusted net result for the period attributable to the parent company’s shareholders – tax-
adjusted interest on hybrid bond / Average number of shares, adjusted for share issue
Return on equity, %
Result for the period / Equity total (average for the year) x 100
Return on capital employed,
%
Result before taxes + interest and other financial expenses /
Capital employed x 100
Capital employed
Total assets − deferred tax liability and other non-interest-bearing liabilities (average for
the year)
Capital turnover rate
Revenue / Total assets − deferred tax liability and other non-interest-bearing liabilities
(average for the year)
Inventories turnover rate
365 / Inventories turnover time
Equity ratio, %
Equity total / Total assets − advance payments received x 100
Net gearing, %
Interest-bearing liabilities − cash and cash equivalents
− interest-bearing receivables / Equity total x 100
Interest-bearing net debt
Interest-bearing liabilities − cash and cash equivalents
– interest-bearing receivables
Key figures per share
Equity per share
Equity attributable to the parent company’s shareholders /
Number of shares on the balance sheet date
Cash flow from operating
activities per share
Cash flow from operating activities / Average number of shares without the own shares
owned by the company
P/E ratio of shares
Share quotation on balance sheet date / Earnings per share
Share turnover
Number of shares traded during the period
Market capitalisation
Number of shares multiplied by the quotation for the respective share series on balance
sheet date
Stockmann Group’s management decided to disclose adjusted net result for the period and adjusted earnings per share
as additional alternative performance measures in 2022 for comparison purposes due to the sales of the real estates in
2021-2022.
26
Shares and share capital
Stockmann plc has one class of shares, the shares of which carry one (1) vote per share and otherwise similar rights.
The company’s share is listed on the Helsinki Stock Exchange and its trading code is STOCKA and ISIN number is
FI0009000251.
The company’s share capital on 31 December 2022 was EUR 77 556 538 and number of shares was 155 880 206.
The number of registered shareholders was 44 289 (45 054 shareholders 31 December 2021).
The company’s market capitalisation on 31 December 2022 was EUR 307,1 million (EUR 333,6 million on 31 December
2021).
Number of shares, 31 December 2022
Number
Shareholders %
Percentage of shares %
Percentage of votes %
1-100
27 194
61,4
0,6
0,6
101-1000
12 771
28,8
3,0
3,0
1001-10000
3 726
8,4
7,0
7,0
10001-100000
505
1,1
9,4
9,4
100001-1000000
77
0,2
12,6
12,6
1000001-
16
0,0
67,5
67,5
Total
44 289
100
100
100
Ownership structure, 31 December 2022
Number
Shareholders %
Percentage of shares %
Percentage of votes %
Households
43 007
97,1
21,3
21,3
Private and public
corporations
865
2,0
17,5
17,5
Nominee registrations (incl.
foreign shareholders)
192
0,4
23,8
23,8
Foundations and
associations
189
0,4
31,9
31,9
Financial and insurance
companies
36
0,1
5,5
5,5
Total
44 289
100
100
100
27
Major shareholders, 31 December 2022
Percentages of
shares %
Percentages of
shares %
1
Föreningen Konstsamfundet Grouping
10,4
10,4
2
Varma Mutual Pension Insurance Company
8,1
8,1
3
Society of Swedish Literature in Finland
7,5
7,5
4
Hc Holding Oy Ab
4,1
4,1
5
Etola Group
3,9
3,9
6
Niemistö Kari Pertti Henrik
3,3
3,3
7
eQ Nordic Small Cap Mutual Fund
2,0
2,0
8
Samfundet Folkhälsan i Svenska Finland
1,8
1,8
9
Ilmarinen Mutual Pension Insurance Company
1,3
1,3
10
OP-Henkivakuutus Ltd.
0,9
0,9
11
Jenny and Antti Wihuri Foundation
0,9
0,9
12
Coeus Invest Grit Erikoissijoitusyhtiö
0,7
0,7
13
Cumulant Capital Pohjois-Eurooppa
0,7
0,7
14
Mandatum Life Insurance Company Ltd.
0,6
0,6
15
Kaloniemi Markku Petteri
0,5
0,5
16
LähiTapiola Keskustakiinteistöt Ky
0,5
0,5
17
LähiTapiola Mutual Life Insurance Company
0,5
0,5
18
VISIO Allocator Fund
0,5
0,5
19
Wilhelm och Else Stockmanns Stiftelse
0,4
0,4
20
eQ Finland Investment Fund
0,4
0,4
Other
51,0
51,0
from which Nominee registered shares
22,9
22,9
Total
100,0
100,0
28
Consolidated Financial Statements
Consolidated Income Statement
EUR mill.
Note
1.1.-31.12.2022
1.1.-31.12.2021
REVENUE
2.2
Other operating income
2.2
Materials and services
2.3
-413,4
-372,0
Employee benefit expenses
2.5, 5.5
-212,1
-194,6
Depreciation, amortisation and impairment losses
3.1
-103,2
-102,9
Other operating expenses
2.6
-197,7
-179,4
Total expenses
-926,4
-848,9
OPERATING PROFIT/LOSS
2.1
Financial income
4.1
Financial expenses
4.1
-28,3
-19,6
Total financial income and expenses
-25,7
-16,9
PROFIT/LOSS BEFORE TAX
Income taxes
2.7
-27,5
-17,3
NET PROFIT/LOSS FOR THE PERIOD
Profit/loss for the period attributable to:
Equity holders of the parent company
Earnings per share, EUR:
4.13
From the period result (undiluted and diluted)
Consolidated Statement of Comprehensive Income
EUR mill.
Note
1.1.-31.12.2022
1.1.-31.12.2021
PROFIT/LOSS FOR THE PERIOD
Other comprehensive income:
Items that may be subsequently reclassified to profit and loss
Exchange differences on translating foreign operations, before tax
-33,3
-6,0
Exchange differences on translating foreign operations, net of tax
2.7, 4.12
-33,3
-6,0
Cash flow hedges, before tax
-2,2
Cash flow hedges, net of tax
2.7, 4.12
-2,2
Other comprehensive income for the period, net of tax
-35,6
-4,9
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Total comprehensive income attributable to:
Equity holders of the parent company
29
Consolidated Statement of Financial Position
EUR mill.
Note
31.12.2022
31.12.2021
ASSETS
NON-CURRENT ASSETS
Intangible assets
Goodwill
Trademark
Intangible rights
Other intangible assets
Advance payments and construction in progress
Intangible assets, total
3.2
Property, plant and equipment
Machinery and equipment
Modification and renovation expenses for leased premises
Right-of-use assets
3.5
Advance payments and construction in progress
Property, plant and equipment, total
3.3
Investment properties
3.4
Non-current receivables
4.10, 4.11
Other investments
4.10
Deferred tax assets
2.8
NON-CURRENT ASSETS, TOTAL
CURRENT ASSETS
Inventories
2.4
Current receivables
Income tax receivables
Non-interest-bearing receivables
Current receivables, total
4.3
Cash and cash equivalents
4.4
CURRENT ASSETS, TOTAL
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
5.1
ASSETS, TOTAL
30
Consolidated Statement of Financial Position
EUR mill.
Note
31.12.2022
31.12.2021
EQUITY AND LIABILITIES
EQUITY
Share capital
Invested unrestricted equity fund
Other funds
-1,0
Translation reserve
-18,9
Retained earnings
Equity attributable to equity holders of the parent company
4.12
EQUITY, TOTAL
NON-CURRENT LIABILITIES
Deferred tax liabilities
2.8
Non-current interest-bearing financing liabilities
4.5
Non-current lease liabilities
4.5
Non-current non-interest-bearing liabilities and provisions
4.9, 4.10,
5.3
NON-CURRENT LIABILITIES, TOTAL
CURRENT LIABILITIES
Current interest-bearing financing liabilities
4.6
Current lease liabilities
4.6
Trade payables and other current liabilities
4.6, 4.9
Income tax liabilities
4.6
Current provisions
5.3
Current non-interest-bearing liabilities, total
CURRENT LIABILITIES, TOTAL
LIABILITIES DIRECTLY ASSOCIATED WITH NON-CURRENT ASSETS
CLASSIFIED AS HELD FOR SALE
5.1
LIABILITIES, TOTAL
EQUITY AND LIABILITIES, TOTAL
31
Consolidated Cash Flow Statement
EUR mill.
Note
1.1.-31.12.2022
1.1.-31.12.2021
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/loss for the period
Adjustments for:
Depreciation, amortisation and impairment losses
Gains (-) and losses (+) of disposals of fixed assets and other non-
current assets
-95,2
-21,6
Interest and other financial expenses
Interest income
-2,6
-2,7
Income taxes
Other adjustments
Working capital changes:
Increase (-) /decrease (+) in inventories
-28,3
-21,5
Increase (-) / decrease (+) in trade and other current receivables
-1,2
-10,1
Increase (+) / decrease (-) in current liabilities
-50,5
Interest expenses paid
-29,0
-28,7
Interest received from operating activities
Income taxes paid from operating activities
-17,9
-2,0
Net cash from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of tangible and intangible assets
Purchase of tangible and intangible assets
-62,7
-17,0
Security deposit
-0,1
-2,3
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Loan conversion costs
-0,4
Repayment of current liabilities
-381,5
-48,5
Payment of lease liabilities
-73,8
-66,3
Net cash used in financing activities
-455,2
-115,2
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS
-33,9
Cash and cash equivalents at the beginning of the period
Net increase/decrease in cash and cash equivalents
-33,9
Effects of exchange rate fluctuations on cash held
-11,9
-2,7
Cash and cash equivalents at the end of the period
4.4
The proceeds from sales of real estate properties were paid directly to the secured creditors of the restructuring programme. The
transactions are presented as proceeds from sale of tangible assets and repayment of current liabilities.
32
Consolidated Statement of Changes in Equity
EUR mill.
Share capital
Share premium fund
Reserve for un
-
restricted
equity
Hedging reserve
Other reserves
Translation differences
Retained earnings
Equity attributable to
shareholders total
Hybrid bond
Total
EQUITY 1.1.2022
Profit/loss for the period
Exchange differences on translating foreign
operations *)
-33,3
-33,3
-33,3
Cash flow hedges *)
-2,2
-2,2
-2,2
Total comprehensive income for the period,
net of tax
-2,2
-33,3
Share issue to creditors for unsecured
restructuring debt
Share-based payments
Other changes in equity total
EQUITY 31.12.2022
-1,1
-18,9
*) Notes 2.7, 4.12
EUR mill.
Share capital
Share premium fund
Reserve for un
-
restricted
equity
Hedging reserve
Other reserves
Translation differences
Retained earnings
Equity attributable to
shareholders total
Hybrid bond
Total
EQUITY 1.1.2021
-544,4
Profit/loss for the period
Exchange differences on translating foreign
operations *)
-5,9
-0,1
-6,0
-6,0
Cash flow hedges *)
Total comprehensive income for the period,
net of tax
-5,9
Reduction of share capital to cover losses
-66,5
Usage of funds to cover losses
-186,1
-250,4
-43,7
Share issue to creditors for unsecured
restructuring debt
-53,1
Hybrid bond cut
-52,7
Other changes in equity total
-66,5
-186,1
-178,4
-43,7
-105,8
EQUITY 31.12.2021
*) Notes 2.7, 4.12
33
Notes to the consolidated financial statements
1
Basis of preparation ................................ ................................ ................................ ................................ ...........35
1.1
Corporate information ................................ ................................ ................................ ................................35
1.2
General ................................ ................................ ................................ ................................ .....................35
1.3
New and amended standards and interpretations ................................ ................................ ........................35
1.4
Corporate restructuring programme ................................ ................................ ................................ ............35
1.5
Transactions resulting from the corporate restructuring programme ................................ .............................36
1.6
Accounting policies requiring management’s judgement and key sources of estimation uncertainty ..............37
1.7
War in Ukraine ................................ ................................ ................................ ................................ ...........37
1.8
Business continuity ................................ ................................ ................................ ................................ ....37
1.9
Principles of consolidation ................................ ................................ ................................ ..........................38
1.10
Items denominated in foreign currency ................................ ................................ ................................ .......38
2
Key numbers ................................ ................................ ................................ ................................ ......................39
2.1
Segment information ................................ ................................ ................................ ................................ ..39
2.2
Operating income................................ ................................ ................................ ................................ .......40
2.3
Gross margin ................................ ................................ ................................ ................................ .............42
2.4
Inventories ................................ ................................ ................................ ................................ .................42
2.5
Employee benefits ................................ ................................ ................................ ................................ .....42
2.6
Other operating expenses ................................ ................................ ................................ ..........................43
2.7
Income taxes ................................ ................................ ................................ ................................ .............44
2.8
Deferred tax assets and deferred tax liabilities ................................ ................................ ............................45
3
Intangible and tangible assets and leasing arrangements ................................ ................................ ....................47
3.1
Depreciation, amortisation and impairment losses ................................ ................................ .......................47
3.2
Goodwill and other intangible assets ................................ ................................ ................................ ...........47
3.3
Property, plant and equipment ................................ ................................ ................................ ....................50
3.4
Investment property ................................ ................................ ................................ ................................ ...51
3.5
Leases ................................ ................................ ................................ ................................ ......................52
4
Capital structure ................................ ................................ ................................ ................................ .................55
4.1
Financial income and expenses ................................ ................................ ................................ ..................55
4.2
Financial instruments ................................ ................................ ................................ ................................ .55
4.3
Current receivables ................................ ................................ ................................ ................................ ....56
4.4
Cash and cash equivalents................................ ................................ ................................ .........................57
4.5
Non-current liabilities, interest-bearing ................................ ................................ ................................ ........57
4.6
Current liabilities ................................ ................................ ................................ ................................ ........57
4.7
Reconciliation of liabilities arising from financing activities ................................ ................................ ...........59
4.8
Financial risk management ................................ ................................ ................................ .........................59
4.9
Derivative contracts................................ ................................ ................................ ................................ ....65
4.10
Financial assets and liabilities by measurement category and hierarchical classification of fair values ...........66
4.11
Financial instruments subject to netting arrangements................................ ................................ .................67
4.12
Shareholders’ equity ................................ ................................ ................................ ................................ ..67
4.13
Earnings per share ................................ ................................ ................................ ................................ .....69
5
Other notes ................................ ................................ ................................ ................................ ........................70
5.1
Non-current assets classified as held for sale ................................ ................................ ..............................70
5.2
Joint arrangements ................................ ................................ ................................ ................................ ....70
34
5.3
Provisions ................................ ................................ ................................ ................................ ..................71
5.4
Contingent liabilities ................................ ................................ ................................ ................................ ...72
5.5
Related party transactions ................................ ................................ ................................ ..........................73
5.6
Share-based incentives ................................ ................................ ................................ ..............................75
5.7
EU Taxonomy Key Performance Indicators ................................ ................................ ................................ .76
5.8
Events after the reporting period ................................ ................................ ................................ .................77
35
1
Basis of preparation
1.1 Corporate information
Company name
Parent company
Ultimate parent of Group
Change in company name
Legal form
Domicile
Country of incorporation
Registered address
Primary field of business
Principal place of business
The parent company’s shares are listed on the Helsinki exchange (Nasdaq Helsinki Ltd). A copy of the consolidated
financial statements is available at www.stockmanngroup.com or from the parent company.
1.2
General
Stockmann Group’s consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS), complying with the IAS and IFRS standards and IFRIC and SIC interpretations in force on
31 December 2022. In the Finnish accounting legislation and the regulations issued pursuant to it, International Financial
Reporting Standards (IFRS) refer to the standards and their interpretations that have been approved for application in the
EU in accordance with the procedure stipulated in EU regulation (EC) No 1606/2002. The notes to the consolidated
financial statements are also in accordance with Finnish accounting and company legislation that supplements IFRS
regulations. The information in the financial statements is based on original acquisition costs, unless stated otherwise in
the accounting policies. The financial statements are presented in millions of euros.
Stockmann Group issues a financial review complying with the ESEF requirements on its website. In addition,
Stockmann Group issues voluntarily a financial review in pdf format, which does not fulfill the disclosure requirements set
in the Finnish Securities Markets Act, chapter 7, section 5.
Stockmann’s Board of Directors has approved these financial statements for disclosure on 23 February 2023.
1.3
New and amended standards and interpretations
On 1 January 2022, the Stockmann Group adopted the following amendments to the accounting standards issued by the
IASB and endorsed by the EU:
●
●
●
●
The amendments had no impact on Stockmann’s consolidated financial statements.
Stockmann Group has not early adopted any new and amended standards and interpretations that have been issued but
are not yet effective. The new and amended standards and interpretations issued by the IASB that are effective in future
periods are not expected to have a material impact on the consolidated financial statements of Stockmann when
adopted. Stockmann intends to adopt these new and amended standards and interpretations, if applicable, when they
become effective and are endorsed by the EU.
1.4
Corporate restructuring programme
In a decision on 9 February 2021, the Helsinki District Court approved Stockmann plc’s restructuring programme, and the
restructuring proceedings were ended. The restructuring programme is based on the continuation of Stockmann’s
department store operations, the sale and leaseback of the department store properties located in Helsinki, Tallinn and
Riga and the continuation of Lindex’s business operations as a fixed part of the Stockmann Group.
36
The restructuring process is proceeding according to plan, which means that all Stockmann’s department store
properties have been sold and both the secured restructuring debt and undisputed unsecured restructuring debt have
been paid. The department store property in Tallinn was sold in December 2021 and the agreement for the sale of the
Riga department store property was signed in December 2021 with closure in January 2022. The department store
property in Helsinki city centre was sold in April 2022 and the last confirmed restructuring debts have been paid. Other
measures and undertakings, as specified in Stockmann plc ́s restructuring programme, have already been completed
during 2021 and are explained in the Financial Review 2021.
On 27 January 2022, Stockmann announced that it had received and verified three subscription forms from Entitled
Persons whose previously conditional or disputed receivables
subject to the payment programme of the Restructuring
Programme had been clarified and the final amounts of such receivables had been confirmed. The Subsequent Bonds
duly subscribed for by such Entitled Persons amounted to the aggregate principal amount of EUR 94,333. The
receivables of the Entitled Persons were converted, by way of set-off, to Subsequent Bonds.
Stockmann’s Board of Directors decided on 27 January 2022, in accordance with the Restructuring Programme and
pursuant to the authorization granted by the Annual General Meeting, to issue 28,139 new shares of the Company in
deviation from the shareholders’ pre-emptive subscription rights to creditors whose previously conditional or disputed
restructuring debts under the Restructuring Programme had been confirmed to their final amounts by 1 December 2021
and approved the subscriptions made in the Share Issue. The subscription price in the Share Issue was EUR 0.9106 per
share, which has been paid by setting off restructuring debt in accordance with the Restructuring Programme.
Stockmann’s Board of Directors decided on 23 March 2022, in accordance with the Restructuring Programme and
pursuant to the authorization granted by the Annual General Meeting, to issue 284,337 new shares of the Company in
deviation from the shareholders’ pre-emptive subscription rights to a creditor whose previously conditional or disputed
restructuring debts under the Restructuring Programme had been confirmed to their final amounts by 21 January 2022
and approved the subscription made in the Share Issue. The subscription price in the Share Issue was EUR 0.9106 per
share, which has been paid by setting off restructuring debt in accordance with the Restructuring Programme.
Stockmann’s Board of Directors decided on 21 July 2022, in accordance with the Restructuring Programme and pursuant
to the authorization granted by the Annual General Meeting, to issue 1,130,786 new shares of the Company in deviation
from the shareholders’ pre-emptive subscription rights to creditors whose previously conditional or disputed restructuring
debts under the Restructuring Programme had been confirmed to their final amounts by 14 July 2022 and approved the
subscriptions made in the Share Issue. The subscription price in the Share Issue was EUR 0.9106 per share, which has
been paid by setting off restructuring debt in accordance with the Restructuring Programme. As a result of the Share
Issue, the total number of shares in the Company increased by 1,130,786 shares to a total of 155,880,206 shares.
On 21 July 2022 Stockmann announced that it had received and verified one subscription form from an Entitled Person
whose previously conditional receivable subject to the payment programme of the Restructuring Programme had been
clarified and the final amounts of such receivable had been confirmed. The aggregate principal amount by which the
Entitled Person had been entitled to subscribe for Subsequent Bonds amounted to EUR 1,385,878.70. The receivables
of the Entitled Person were converted, by way of set-off, into Subsequent Bonds.
Under the restructuring programme, Stockmann plc has restructuring debt that is conditional, the maximum amount or
disputed in respect of which the amount subject to the payment programme will be confirmed later and the creditors of
such restructuring debt will be entitled to convert their receivables to shares and bonds after their respective receivables
have been confirmed.
Note 4.6 presents an itemisation of the Stockmann Group’s secured and unsecured restructuring debts and note 4.8
presents the maturities of all the Group’s debts as on 31 December 2022.
1.5 Transactions resulting from the corporate restructuring programme
Stockmann plc. has paid all confirmed undisputed external restructuring debt, but still has disputed claims and
undisputed conditional or maximum restructuring debt. At the end of the reporting period, the amount of the disputed
claims was EUR 61.3 million. The claim amount is mainly related to termination of long-term premises lease agreements.
The administrator of the restructuring programme has disputed the claims and considered it justified to pay 18 months’
rent for the leases instead of all the years left in the terminated lease contracts. Three claims will be settled in District
Court and one claim by arbitration proceedings. The amount of undisputed conditional or maximum restructuring debt
was EUR 8.8 million. Stockmann plc has made a provision of EUR 30.8 million, which corresponds to the company’s
estimate of the probable amount relating to both the disputed claims and the undisputed conditional or maximum
restructuring debt. The amount and the time of realisation of the disputed claims are uncertain. Therefore, the disputed
amount exceeding the provision, EUR 40.7 million, is disclosed as a contingent liability.
Stockmann entered into sales agreements and long-term leaseback agreements with the new owner related to its
department store property in Riga in December 2021 with closure in January 2022. The department store property in
Helsinki city center was sold and leased back in April 2022. The proceeds from the sales were, in accordance with the
restructuring programme, used to pay both the secured and the undisputed unsecured restructuring debt. The sale-and-
leaseback transactions have been treated in the Consolidated Financial Statements by reducing the amount of assets
classified as held for sale, determining lease liabilities for the initial lease periods and amounts of the right-of-use asset
that Stockmann retains and recognising a gain on rights transferred. The transactions have reduced the amount of non-
current assets classified as held for sale by EUR 239.5 million, reduced the liabilities directly associated with non-current
37
assets classified as held for sale by EUR 15.7 million, increased the lease liabilities by EUR 209.5 million and increased
the amount of right-of-use assets by EUR 116.9 million. The net of gain on rights transferred and the cost related to sales
transaction of EUR 95.4 million has been recognised under other operating income in the income statement. The
secured restructuring debt of EUR 381.5 million has been paid and of the undisputed unsecured restructuring debt EUR
2.8 million has been converted to shares and bond and EUR 25.5 million has been paid.
Stockmann Group’s financial statements do not present or account for the consequences of the restructuring
programme, such as the realisable value of the Group’s assets or whether they are sufficient for covering all debts, the
amounts and seniority of the loans being restructured or other debts, or the impacts on the Consolidated Income
Statement of the changes that potentially could be made to the Group’s business because of the restructuring
programme.
1.6
Accounting policies requiring management’s judgement and key sources of
estimation uncertainty
The uncertainties related to the COVID-19 pandemic will have an impact on Stockmann Group’s liquidity, financial
position and the value of its assets. Risks related to production and supply may arise from unusual situations such as an
escalation in the COVID-19 pandemic or a new epidemic leading to government-imposed restrictions, a lack of transport
capacity, strikes and political uncertainties.
The current geopolitical situation is increasing inflation which can affect sales negatively due to the level of consumer
confidence, as well as increased buying prices and operating costs. Further it might cause delays in the supply chains
due to issues in production and freight. The management and the Board of Directors regularly assess the operational
and strategic risks associated with the current situation.
In preparing the consolidated Financial Statements in compliance with the recognition and valuation principles of IFRS, it
has been necessary to make forward-looking estimates and assumptions. The estimates and assumptions presented in
the financial statements are based on management’s best knowledge at the Financial Statements date. At the Financial
Statements date, the assumptions are related particularly to the basis for continuity, valuations of assets, exercising
lease options, contingent liabilities and provisions recognised. The principal assumptions concerning the future and the
main uncertainties relating to estimates at the end of the reporting period that constitute a significant risk of causing a
material change in the carrying amounts of assets and liabilities within the next financial year, concern the value of right-
of-use asset and lease liabilities, depreciation and leasing periods, demand for inventories and turnover rate as well as
the impairment testing of Lindex goodwill and the brand. More detailed information on these is provided in notes 2.4, 3
and 5.3.
1.7 War in Ukraine
In response to the war in Ukraine, Stockmann removed products of Russian and Belarusian origin from sale in February
2022. As a result, about 200 products were removed from Stockmann’s selections. Stockmann also discontinued selling
merchandise to the Russian partner Debruss.
The impact of the war on Stockmann Group is limited. War in Ukraine related losses are reported as other operating
expenses and more information on the losses is provided in the note 4.8 section credit and counterparty risk.
1.8
Business continuity
Stockmann Group’s Consolidated Financial Statements have been prepared based on the principle of business
continuity. The Group’s ability to continue its operations is dependent on the profitability of its business and the
implementation of the restructuring programme prepared for Stockmann plc. The profitability of the Group’s business is
dependent on future market conditions and the Group’s ability to execute its business plan successfully.
Helsinki District Court approved Stockmann plc´s restructuring programme in February 2021. The eight-year
restructuring programme is based on the continuation of the Company’s department store operations, the sale and lease
back of the department store properties in Helsinki, Tallinn and Riga and the continuation of Lindex business operations
under the ownership of the Stockmann Group.
The restructuring process is proceeding according to plan, which means that all Stockmann’s department store
properties have been sold and both the secured restructuring debt and undisputed unsecured restructuring debt have
been paid. Other measures and undertakings, as specified in Stockmann plc’s restructuring programme, have already
been completed during 2021 and are explained in the annual report 2021.
The Group’s scope for arranging new financing is limited during the execution of the corporate restructuring programme,
which can not end until all disputed claims are solved. This may have an effect on the sufficiency of liquidity and on the
financial position.
The uncertainties related to the COVID-19 pandemic may have an impact on Stockmann Group’s liquidity and financial
position and the value of its assets. Risks related to production and supply may arise from unusual situations such as an
escalation in the COVID-19 pandemic or a new epidemic leading to government-imposed restrictions, a lack of transport
capacity, strikes and political uncertainties.
38
The current geopolitical situation is increasing inflation which may affect sales negatively due to the level of consumer
confidence, as well as increased buying prices and operating costs. Further, it may cause delays in the supply chains
due to issues in production and freight. The management and the Board of Directors regularly assess the operational
and strategic risks associated with the current situation.
Stockmann Group does not currently have any legal disputes or claims not already reported in the financial statements
and there are no further indications of material threats for continuing operations or cash outflows.
Due to the nature of business, Stockmann Group’s revenues are divided to large number of customers and no single
customer poses a significant threat to the Group’s cash flows.
The Board of Directors of Stockmann has carefully analysed the company’s overall situation in connection with the
deployment of the corporate restructuring programme and with respect to the uncertainty due to changes in the general
economic situation, and its analysis confirms the adequacy of liquidity and financing for the following twelve months and
thus supports the preparation of this consolidated financial statements in accordance with the principle of business
continuity.
1.9
Principles of consolidation
The consolidated financial statements include the parent company, Stockmann plc, as well as all the companies in which
the parent company holds, either directly or indirectly, over 50 per cent of the number of votes conferred by the shares or
over which the parent company otherwise has control. The criteria for control are fulfilled when the Group is exposed, or
has rights, to variable returns from its involvement with an entity and could affect those returns through its power over the
entity.
Inter-company share ownership within the Group has been eliminated using the acquisition method, according to which
the consideration transferred, and all the identifiable assets and liabilities of an acquired company are measured at fair
values at the date of acquisition. Goodwill is recognised as the amount by which the combined total of the consideration
transferred the non-controlling interests in the acquisition and the previous ownership interest exceeds the fair value of
the acquired net assets. Intra-Group transactions, receivables, liabilities, unrealised margins and internal distribution of
profits are eliminated in the consolidated financial statements. The profit or the loss as well as the comprehensive
income for the financial period are distributed to the parent company’s owners and to non-controlling interests. Non-
controlling interests are presented as an individual item in the Group’s equity. Acquired subsidiaries are presented in the
consolidated financial statements from the moment that the Group gains control and divested subsidiaries up to the time
the control ends. Changes in the parent company’s ownership interest in a subsidiary, which do not lead to loss of
control, are dealt with as equity transactions.
Joint arrangements in which Stockmann and another party, based on an agreement or the Articles of Association, have
rights to the assets and obligations for the liabilities of the joint arrangement are dealt with as joint operations. The
shares in real estate companies that fulfil the criteria of being a joint operation in the Group have been dealt with as joint
operations in the consolidated financial statements. The consolidated financial statements include Stockmann’s share of
the joint operations’ income, expenses and items of other comprehensive income, and assets and liabilities, from the
date when joint control was obtained up to the date when it ends.
The Stockmann Group does not have any joint ventures or associates.
1.10
Items denominated in foreign currency
The consolidated financial statements are presented in euro, which is the functional and presentation currency of the
Group’s parent company.
Transactions in foreign currency are recognised in the amounts of each company’s functional currency, applying the
exchange rate of the date of the transaction. Receivables and liabilities at the financial statements date are translated at
the exchange rate of the financial statements date. Exchange differences arising on translation are recognised through
profit and loss.
The income statements and statements of other comprehensive income of foreign group companies are translated into
euro at the average rate during the financial period, and the statement of financial position at the rate at the financial
statements date. The exchange rate difference from translating the income statement and other comprehensive income
at the average rate and the statement of financial position at the financial statements date is recognised as a separate
item in other comprehensive income. The goodwill arising from the acquisition of foreign operations and the fair value
adjustments made in the carrying amounts of the assets and liabilities of such operations in connection with acquisition
of foreign operations are treated as assets and liabilities of foreign operations and converted into euro using the
exchange rates at the financial statements date. When a foreign subsidiary or joint arrangement is divested in whole or in
part, the cumulative translation difference is recognised in the income statement as part of the gain or loss on disposal.
39
2 Key numbers
2.1
Segment information
Accounting policies
The Stockmann Group’s reportable segments are Lindex which engages in the fashion trade and Stockmann which
engages in the department store trade. Segments are divisions of the Group that are managed and monitored as
separate units selling different products and services.
The segment information presented by the Group is based on the management’s internal reporting, in which
management’s assessment of the profitability of the segments is based on monitoring of the segments’ operating profits,
and in which the measurement principles for assets and liabilities accord with IFRS regulations. The highest level of
operational decision-making is vested in the Group’s CEO, who regularly examines the operational performance of the
divisions.
2.1.1 Operating segments
Lindex
Lindex is one of Europe’s leading fashion companies, with 436 stores in 18 countries and sales online worldwide through
third-party partnerships. Lindex offers inspiring and affordable fashion, and the assortment includes several different
concepts within womenswear, kidswear, lingerie and cosmetics.
Stockmann
Stockmann offers premium selections of brands, excellent customer service and experiences in its 8 department stores
in 3 countries and Stockmann online store. Stockmann’s selection is focused on fashion, beauty and home products and
in the Baltics also on the Stockmann Delicatessen. The offering is complemented by partners’ high-quality products and
services.
EUR mill.
Revenue
2022
2021
Lindex
661,1
607,4
Stockmann
320,6
291,6
Group total
981,7
899,0
Operating profit/loss
2022
2021
Lindex
90,3
74,6
Stockmann
71,2
11,6
Unallocated
-6,7
-4,1
Group total
154,9
82,1
Financial income
2,6
2,7
Financial expenses
-28,3
-19,6
Consolidated profit/loss before taxes
129,2
65,2
Depreciation, amortisation and impairment losses
2022
2021
Lindex
-76,8
-77,3
Stockmann
-26,4
-25,5
Group total
-103,2
-102,9
Capital expenditure
2022
2021
Lindex
154,6
54,9
Stockmann
129,9
9,9
Group, total
284,5
64,8
Assets
2022
2021
Lindex
935,0
941,0
Stockmann
344,8
460,1
Unallocated
3,1
15,3
Group, total
1 282,9
1 416,5
40
2.1.2
Information on market areas
In addition to Finland, the Group operates in three geographical regions: Sweden, Norway as well as Baltics and other
countries.
EUR mill.
Revenue
2022
2021
Finland
321,1
294,9
Sweden*)
354,3
343,4
Norway
139,1
122,7
Baltic countries and other countries
167,3
138,0
Group total
981,7
899,0
Finland, %
32,7 %
32,8 %
International operations, %
67,3 %
67,2 %
Operating profit/loss
2022
2021
Finland
50,9
-15,2
Sweden*)
66,6
64,9
Norway
4,5
3,7
Baltic countries and other countries
32,8
28,6
Group total
154,9
82,1
Non-current assets
2022
2021
Finland
219,1
352,9
Sweden*)
556,5
534,8
Norway
46,5
43,4
Baltic countries and other countries
44,3
47,0
Group total
866,4
978,1
Finland, %
25,3 %
36,1 %
International operations, %
74,7 %
63,9 %
*) Includes the sales of goods and services to the franchising partners.
2.2
Operating income
2.2.1
Revenue recognition
Accounting policies
Revenue is recognised, when a performance obligation is satisfied by transferring a promised good or service to a
customer and the customer obtains control of the good or service. Most of the Group’s operating income comes from the
retail sale of goods or services that are paid for with cash or credit card and revenue is recognised at the time of sale.
Online store sales and sales to franchising partners are recognised as revenue when all goods or services related to the
order are delivered to the customer or the franchising partner and the customer obtains control over the goods or
services.
When calculating revenue, indirect taxes and discounts granted have been deducted from the sales.
Customers have a right to return the products purchased from store or online store within a certain time frame. An
accrual for the returns is calculated as an experience-based percentage of sales, and it is recognised as deduction of
revenue and accrued liability. Cost of goods for anticipated returns are recognised as adjustment in materials and
services and inventory value.
Income from credit card co-operation is recognised as revenue. For customer loyalty scheme the sales adjustment items
include customer loyalty award points. An amount corresponding to estimated stand-alone selling price of unused bonus
points accumulated by customers is recognised as deduction from revenue and short-term contract liability. The liability
is recognised in the same financial period as the related revenue. When customer uses accumulated points as payment
in a store, the value of the points used is recognised as revenue and reduction of short-term contract liability. If bonus
points are not used by their expiry date, the value of unused points is recognised as revenue and a reduction of short-
term contract liability.
Lease income from lease and sublease agreements classified as operating leases are recognised as revenue in even
instalments over the lease term. Turnover based lease income is recognised based on actual revenue of the tenants.
41
2.2.1.1 Revenue
EUR mill.
2022
2021
Merchandise revenue
952,8
871,4
Rental income and service charges
28,9
27,6
Total
981,7
899,0
2.2.1.2 Disaggregated revenue information
1.1.-31.12.2022, EUR mill.
Lindex
Stockmann
Total
Revenue streams
Merchandise revenue
661,0
291,8
952,8
Rental income and service charges
0,1
28,8
28,9
Total
661,1
320,6
981,7
Market areas
Finland
75,5
245,5
321,1
Sweden
354,3
354,3
Norway
139,1
139,1
Baltic countries and other countries
92,2
75,1
167,3
Total
661,1
320,6
981,7
1.1.-31.12.2021, EUR mill.
Lindex
Stockmann
Total
Revenue streams
Merchandise revenue
607,2
264,2
871,4
Rental income and service charges
0,2
27,4
27,6
Total
607,4
291,6
899,0
Market areas
Finland
68,2
226,7
294,9
Sweden
343,4
343,4
Norway
122,7
122,7
Baltic countries and other countries
73,2
64,8
138,0
Total
607,4
291,6
899,0
2.2.1.3 Contract balances
EUR mill.
2022
2021
Receivables that are included in assets held for sale
0,0
0,1
Contract assets
0,7
0,6
Contract liabilities
5,6
7,1
No information is provided about remaining performance obligations that have an original expected duration of one
year or less, as allowed by IFRS 15.
42
2.2.2
Other operating income
Accounting policies
Among items included in other operating income are both sale and sale-and-leaseback of property, plant and equipment
as well as income received on the sale of a business. The gain on sale-and-leaseback of the department store properties
deducted with the cost of sales are recognised as other operating income.
Grants from the governments or other similar public entities that become receivable as compensation for expenses
already incurred are recognised as other operating income on the period on which the company complies with the
attached conditions. During the previous period, the Stockmann Group received in its various operating countries
government grants related to the COVID-19 situation.
The Helsinki District Court approved Stockmann Plc’s restructuring programme on 9 February 2021. Pursuant to the
programme the creditors of unsecured restructuring debt were entitled to convert 20 % of their receivables under the
payment programme to Stockmann shares. The remainder of that part of the confirmed restructuring debt which would
have been eligible for share conversion was cut in accordance with the restructuring programme. In previous period the
aforesaid restructuring debt cut was included in other operating income.
EUR mill.
2022
2021
Gains on sales of non-current assets, total
95,5
21,8
COVID-19 support received
3,8
4,5
Refunds of health insurance premiums from years 2004-2008 in
Sweden
0,3
3,0
Income from restructuring debt cut
2,6
Total
99,6
31,9
2.3 Gross margin
EUR mill.
2022
2021
Revenue
981,7
899,0
Materials and services
413,4
372,0
Gross profit
568,3
527,0
Gross margin, % of revenue
57,9%
58,6%
2.4
Inventories
Accounting policies
Inventories are measured at the lower of acquisition cost and net realisable value. In normal operations the net realisable
value is the estimated obtainable selling price less the estimated costs incurred in bringing the product to a finished
condition and the estimated necessary selling costs.
The inventories turnover rate and the potential decline of the net realisable value below the acquisition cost are
estimated regularly and if necessary, an impairment is recognised for inventories. Lindex recognises a provision for
obsolete inventories, which is based on consideration if the inventories are older than one year as well as parameters
depending on inventory levels and uncertainties in the environment. Stockmann recognises a provision for obsolete
inventories, which is a percentage of the acquisition price of the slow-moving goods in the central warehouse and
department stores.
The value of inventories is determined using the weighted average cost method and it includes all the direct costs of the
purchase.
EUR mill.
2022
2021
Materials and consumables
174,2
154,8
Total
174,2
154,8
The value of inventories has been written off by EUR 7.2 (6.4) million for obsolete assets.
2.5
Employee benefits
Accounting policies
Pension obligations
Pension plans are classified as defined benefit and defined contribution plans. In Stockmann Group’s countries of
operation, statutory and voluntary pension plans are defined contribution plans.
Payments for defined contribution plans are made to a pension insurance company. Payments made for defined
contribution plans are recognised as expenses in the income statement for the financial period to which the debit relates.
43
Defined benefit pension plans are based on the calculations of authorised actuaries. The pension expenditure based on
the work performance during the period and the net interest of the net debt of the defined benefit plan are recognised in
the income statement and presented as expenses arising from employee benefits. The net debt of the defined benefit
pension plan is entered in the statement of financial position. The Group had no defined benefit pension plans in the
financial year 2022.
Other long-term employee benefits
The Stockmann Group operates a length of service reward system, which comes under other long-term employee
benefits. Employees who complete the specified years of service are entitled to extra paid leave. The present value of
the obligation arising from this long-term employee benefit at the close of the reporting period is recognised as a liability
in the statement of financial position. Items arising from the definition of a liability are recognised in the income
statement.
EUR mill.
2022
2021
Wages and salaries
165,7
149,3
Share-based payments
0,1
0,0
Pension expenses, defined contribution plans
13,4
14,1
Other employee benefits expenses
32,9
31,2
Total
212,1
194,6
Information on management's employee benefits is given in notes 5.5 Related party transactions and 5.6 Share-based
incentives.
2.6
Other operating expenses
Accounting policies
Other operating expenses comprise expenses, which are not directly related to the actual sales of goods and services.
They include, for example, site expenses, marketing expenses, goods handling expenses, ICT expenses, expenses for
professional services and expenses for leased workforce. Also, expenses related to short-term leases, leases of low-
value assets and variable lease payments not included in the measurement of lease liabilities are recognised in other
operating expenses. In addition, sales losses of property, plant and equipment and valuation losses of assets classified
as held for sale are recognised in other operating expenses.
EUR mill.
2022
2021
Site expenses
59,9
63,5
Marketing expenses
36,6
31,7
Goods handling expenses
27,0
24,0
ICT expenses
20,8
20,2
Professional services
9,2
10,5
Leased workforce
6,9
10,3
Bank and cash calculation expenses
5,0
5,5
Voluntary social security expenses
4,3
3,0
Credit losses
0,8
-0,2
Other expenses *)
27,1
11,0
Total
197,7
179,4
*) 2022 corporate restructuring related expenses EUR 18.1 million.
Fees to the auditors
EUR mill.
2022
2021
Auditing/EY
0,5
0,4
Auditing/KPMG and others
0,0
0,3
Tax advisory/EY
0,1
0,0
Tax advisory/KPMG and others
0,0
0,2
Other services/EY
0,1
0,0
Other services/KPMG and others
0,0
0,1
Total
0,7
1,0
44
2.7
Income taxes
Accounting policies
Tax expenses in the income statement comprise taxes based on taxable income for the period and deferred taxes.
Taxes based on taxable income for the period are calculated on taxable income using the tax rate that is in force in the
country in which the particular Group company is based. The amount of tax is adjusted for any taxes concerning previous
periods. Income taxes are presented in the income statement unless the transaction relating to the taxes is presented
directly in equity or in the statement of comprehensive income, in which case the tax effect is also stated in equity or in
the statement of comprehensive income.
Deferred taxes are calculated on temporary differences between the carrying amount and the tax base. The largest
temporary differences arise from the differences between the carrying amounts and tax bases of property, plant and
equipment, unused tax losses and the fair value measurement of derivative contracts.
Deferred taxes are not recognised on goodwill impairment, which is non-deductible in taxation. Deferred taxes have been
calculated by applying the tax rates that are laid down by law or have been accepted in practice by the financial
statements date.
Deferred tax liabilities are recognised in full, except on the profit made by the Estonian and Latvian subsidiaries and
Stockmann plc’s branch in Estonia, because the Group is able to determine when a reversal of the temporary difference
will occur, and no such reversal is expected to occur in the foreseeable future. Deferred tax assets are recognised to the
extent that it is probable that taxable profit will arise in the future against which the deferred tax asset can be utilised.
The Group deducts deferred tax assets and liabilities from each other in the case it has a legally enforceable right to set
off tax assets against tax liabilities, which are based on taxable income for the period. Furthermore, such tax assets and
liabilities shall be associated with income taxes collected by the same tax authority, either from the same taxable entity or
a different taxable entity, which is going to set off the tax assets against liabilities based on taxable income for the period
or realise the receivables and pay the debts at the same time.
EUR mill.
2022
2021
Income taxes for the financial period
-50,5
-12,0
Income taxes from previous financial periods
2,1
2,1
Change in deferred tax liability/assets
20,9
-7,3
Total
-27,5
-17,3
Reconciliation between the income tax expense in the income
statement and the Group's tax expense at the Finnish tax rate of
20%
EUR mill.
2022
2021
Profit before taxes
129,2
65,2
Income taxes at current tax rate
-25,8
-13,0
Income taxes from previous financial periods
2,1
2,1
Previous periods' confirmed losses
18,4
Tax-exempt income
1,0
0,2
Differing tax rates of foreign subsidiaries
-0,5
-0,3
Non-deductible expenses
-3,2
-6,2
Previous periods' confirmed losses for which deferred tax assets has
been booked
-12,4
-0,0
Effect of deferred taxes not recognised
-4,2
Other taxes *)
-2,8
Income taxes in the income statement
-27,5
-17,3
*) Other taxes consist taxes not directly based on taxable income.
The Swedish tax authorities took a negative stance on the taxation of Stockmann’s subsidiary Stockmann Sverige AB
regarding its right to deduct interest expenses during the years 2013–2019 for a loan raised for the acquisition of AB
Lindex. The Administrative Court of Appeal in Gothenburg gave its decision in September 2022, according to which it
overturned the previous court decisions and approved Stockmann’s appeal. Stockmann Sverige AB was entitled to a
deduction of interest expenses, which corresponds to a lower tax cost of approximately EUR 19 million during the years
2013–2016. According to a decision received in October 2022, the County Administrative Court in Gothenburg approved
Stockmann’s appeal and confirmed that Stockmann Sverige AB was entitled to a deduction of interest expenses, which
corresponds to a lower tax cost of approximately EUR 13 million during the years 2017–2019. In November 2022, the
ruling from the Administrative Court of Appeal was appealed by the Swedish Tax Agency to the Supreme Administrative
45
Court. In November 2022, the Swedish Tax Agency also appealed the ruling of the County Administrative Court to the
Administrative Court of Appeal. See note 5.8 for further information.
The profits of Stockmann Plc’s Branch in Estonia have been included in the taxable income of the parent office in
Finland. The profits of the Branch will be income taxable in Estonia, at the time when the profits are distributed to the
parent office in Finland. According to the tax treaty between Estonia and Finland, the income tax which will be paid in
Estonia is deductible from the income tax in Finland under certain conditions. During the reporting period, it was resolved
to distribute profits of EUR 52.4 million from the Branch in Estonia to the parent office in Finland, which resulted in tax
payment of EUR 13.1 million in Estonia. According to the Finnish Tax Administration, EUR 2.8 million of the taxes
payable in Estonia are not deductible from the taxes payable in Finland, because Stockmann Plc did not have sufficient
taxable income in Finland during the fiscal years 2010-2016. Thus, the aforesaid amount would be double tax payment.
After the profit sharing, the untaxed retained earnings of the Branch in Estonia including the profit of the reporting period
are EUR 24.9 million and the calculated income tax in Estonia would be EUR 5.2 million.
2.8
Deferred tax assets and deferred tax liabilities
Changes in deferred tax assets
Changes in deferred tax assets, EUR mill.
1.1.2022
Recognised in
income
statement
Translation
difference
31.12.2022
Confirmed losses
12,4
-12,4
0,0
Difference between carrying amounts and tax bases of property, plant
and equipment
1,5
-0,1
1,4
Lease liability
4,7
17,2
-0,3
21,6
Other temporary differences
5,2
2,9
-0,1
7,9
Total
23,8
7,6
-0,5
31,0
Changes in deferred tax assets, EUR mill.
1.1.2021
Recognised in
income
statement
Translation
difference
31.12.2021
Confirmed losses
16,6
-4,2
12,4
Difference between carrying amounts and tax bases of property, plant
and equipment
1,6
-0,0
1,5
Lease liability
4,4
0,3
-0,1
4,7
Other temporary differences
5,2
0,1
-0,1
5,2
Total
27,8
-3,8
-0,2
23,8
More information on deferred tax assets is provided in note 1.5.
46
Changes in deferred tax liabilities
Changes in deferred tax liabilities, EUR mill.
1.1.2022
Recognised in
income statement
Translation difference
Liabilities related to
assets classified as
held for sale
31.12.2022
Cumulative depreciation differences
13,1
-10,0
-0,8
12,4
14,7
Difference between carrying amount and tax bases of prop., plant and
equip.
4,9
-0,3
-0,4
4,3
Measurement at fair value of intangible and tangible assets
14,8
-1,2
13,6
Other temporary differences
7,7
-2,9
0,0
2,9
7,7
Total
40,6
-13,2
-2,3
15,3
40,3
Changes in deferred tax liabilities, EUR mill.
1.1.2021
Recognised in income
statement
Translation difference
Liabilities related to
assets classified as
held for sale
31.12.2021
Cumulative depreciation differences
7,2
4,4
-0,2
1,7
13,1
Difference between carrying amount and tax bases of prop., plant and
equip.
5,1
-0,1
-0,1
4,9
Measurement at fair value of intangible and tangible assets
15,1
-0,3
14,8
Lease receivables
1,1
-1,1
Other temporary differences
7,4
0,3
0,0
7,7
Total
35,9
3,5
-0,6
1,7
40,6
In accordance with IAS 12 paragraph 52 A, deferred tax liabilities have not been recorded on the accumulated
distributable earnings, EUR 1.7 million (7.1), of the Estonian and Latvian subsidiaries. Neither has deferred tax liability
been recorded on the undistributed accumulated distributable earnings of Stockmann Plc’s branch in Estonia, which
amounted to EUR 24.9 million on 31 December 2022.
47
3
Intangible and tangible assets and leasing arrangements
3.1
Depreciation, amortisation and impairment losses
EUR mill.
2022
2021
Intangible assets
11,3
13,0
Machinery and equipment
12,0
13,3
Modification and renovation expenses for leased premises
1,2
1,6
Right of use assets
78,7
75,0
Depreciation and amortisation, total
103,2
102,9
Depreciation, amortisation and impairment losses, total
103,2
102,9
3.2
Goodwill and other intangible assets
Accounting policies
The Group’s goodwill is the difference between the consideration transferred, measured at fair value, and the identifiable
net assets acquired, measured at fair value. Neither goodwill nor the Lindex brand are amortised. The brand is deemed
to have an indefinite useful life due to high brand awareness. The goodwill and the brand are measured at original
acquisition cost less impairment losses.
Other intangible assets include intangible rights and software that are measured at original acquisition cost. Other
intangible assets are amortised on a straight-line basis over their estimated useful lives.
The amortisation periods of intangible assets are:
software 3–10 years
other intangible rights 5 years
Subsequent expenditure related to intangible assets is capitalised only if the economic benefits of the asset increase as
a result of such expenditure. Otherwise, the costs are recorded as operating expenses when they are incurred.
In cloud computing (Software-as-a-Service or SaaS) arrangements service contracts are providing the Group with the
right to access the cloud provider’s application software over the contract period. Implementation costs including costs to
configure or customise the cloud provider’s application software are recognised as operating expenses when the
services are received. Where the SaaS arrangement supplier provides both configuration and customisation services,
judgement is applied to determine whether each of these services are distinct or not from the underlying use of the SaaS
application software. Distinct configuration and customisation costs are expensed as incurred as the software is
configured or customised. Non-distinct configuration and customisation costs are expensed over the SaaS contract term.
48
Intangible assets, EUR mill. 2022
Goodwill
Trademark
Intangible rights
Other intangible assets
Advance payments and
construction in progress
Intangible assets, total
Acquisition cost 1.1.
685,5
89,0
98,2
4,8
2,1
879,6
Translation difference +/-
-53,8
-7,0
-5,1
-0,0
-65,9
Increases during the period
0,9
9,3
0,0
3,9
14,1
Decreases during the period
-9,9
-0,8
-10,7
Transfers between items during the period
1,8
0,0
-1,8
-0,0
Acquisition cost 31.12.
632,7
82,0
94,2
4,1
4,2
817,2
Accumulated amortisation 1.1.
-414,0
-0,3
-70,6
-3,7
-488,5
Translation difference +/-
32,2
0,0
4,1
-0,0
36,3
Amortisation on reductions during the period
9,9
0,8
10,7
Amortisation and impairment losses during the period
-10,8
-0,5
-11,3
Accumulated amortisation 31.12.
-381,8
-0,3
-67,4
-3,4
-452,8
Carrying amount 1.1.
271,5
88,7
27,6
1,1
2,1
391,1
Carrying amount 31.12.
250,9
81,8
26,8
0,7
4,2
364,4
Intangible assets, EUR mill. 2021
Acquisition cost 1.1.
700,3
90,9
90,7
10,6
1,6
894,1
Translation difference +/-
-14,8
-1,9
-1,3
0,0
-0,0
-18,0
Increases during the period
6,3
1,9
8,2
Decreases during the period
-4,8
-6,4
-0,0
-11,3
Transfers between items during the period
7,4
0,6
-1,4
6,6
Acquisition cost 31.12.
685,5
89,0
98,2
4,8
2,1
879,6
Accumulated amortisation 1.1.
-422,8
-0,3
-63,1
-9,2
-495,4
Translation difference +/-
8,8
0,0
0,3
-0,0
9,1
Amortisation on reductions during the period
4,7
6,4
11,2
Transfers between items during the period
-0,4
-0,4
Amortisation and impairment losses during the period
-12,5
-0,5
-13,0
Accumulated amortisation 31.12.
-414,0
-0,3
-70,6
-3,7
-488,5
Carrying amount 1.1.
277,5
90,6
27,6
1,4
1,6
398,7
Carrying amount 31.12.
271,5
88,7
27,6
1,1
2,1
391,1
Impairment testing
Accounting policies
The carrying amounts of asset items are assessed regularly to determine whether there is any indication that an asset
may be impaired. If there are indications of impairment, the recoverable amount of the asset is determined. Goodwill and
the brand are allocated to cash-generating units, and they are tested annually to determine any impairment. An
impairment loss is recognised when the value of the asset item or cash-generating unit in the statement of financial
position is greater than its recoverable amount. Impairment losses are recognised in the income statement.
An impairment loss on a cash-generating unit is allocated first as a reduction to the goodwill of the cash generating unit
and thereafter it is allocated to reduce the unit’s other asset items on an equal percentage basis.
The recoverable amount of intangible and tangible assets is defined as the higher of its fair value less costs to sell and its
value in use. In determining value in use, the estimated future cash flows are discounted to their present value based on
discount rates that reflect the average capital costs before taxes of the cash generating unit in question.
An impairment loss on property, plant and equipment as well as other intangible assets, except for goodwill, is reversed if
a change has occurred in the estimates used in determining the recoverable amount of the asset item. An impairment
loss is not, however, reversed beyond what the carrying amount of the asset would have been if no impairment loss had
been recognised in previous years.
The Stockmann Group’s reportable segments under IFRS 8, fashion chain Lindex and Stockmann for department store
business, are cash-generating units. Their accumulated cash flows are largely independent of the cash flows
accumulated by the other classes or groups of assets. In Stockmann Group, asset items are tested for impairment when
preparing the financial statements or if there are indications that assets may be impaired.
49
There are less uncertainties in the forecast period related to COVID-19 than a year ago but increased uncertainties due
to high inflation and increase in interest rates. Impact of COVID-19 will still exist, but Stockmann assumes that no
restrictions would be applied. At the same time the impact of inflation has been affecting the consumer confidence and
we expect the lower consumer confidence to affect coming years revenue trend. As a result of consumer confidence
impact in the impairment test concluded for Lindex's goodwill in connection with the financial statements, has been
applied using lower growth assumptions for the revenue development than has been the revenue development in recent
years. In longer term we see growth driven by the online channels and growth will be strongly supported by the new fully
automated Lindex logistics center.
There are no indications for impairment need. On 31 December 2022 the goodwill of EUR 250.9 million is allocated to
the Lindex segment.
The Lindex trademark of EUR 81.8 million is allocated in its entirety to the Lindex segment. The Lindex brand is deemed
to have an indefinite useful life due to high brand awareness. The Lindex brand has existed more than 60 years and the
Group will continue to use the brand both in its present markets and when the Lindex product range and business model
are introduced into new markets with both online and physical store concepts.
Main assumptions and variables used in the calculation of the value-in-use of Lindex
In the impairment testing, the Revenue and Gross Margin per cent forecasts for Lindex are based on market-area
forecasts and are approved by management.
Main variables used in the value-in-use calculation are:
1.
Volume growth
, which is based on an estimate of the sales growth at existing stores and online store. The
revenue forecasts cover a five-year period with an average of 4.3 per cent growth and also have an effect on
the terminal period. In last 2 years the average yearly revenue growth rate has been higher than 13 per cent
yearly but management expects that due to high inflation and changes in consumer behavior similar growth rate
will not continue in coming years and therefore lower expectation of 4.3 per cent growth has been estimated by
the management. The long-term forecasts made by the management also take into account the changes in
economy, market research, expansion plans in stores, online channels and third-party platforms. Also,
introduction of new brand and business models have been taken into account with a conservative approach.
Lindex new fully automatic logistics center will be operational from end of 2024 and will support strongly the
growth, especially in the online channels. The Lindex’s revenues beyond this management-approved forecast
period were extrapolated using a steady 2.5 per cent growth rate which is a conservative view from the
management for the terminal growth.
2.
Gross profitability improvement
forecasts cover a 5-year period. The gross profit per cent was 64.1 in 2022 and the management forecasts that
due to increase in raw material prices and changes in the sales mix, it will gradually decrease from current level
over the forecast period ending at 58.0 per cent in the terminal period.
3.
Discount rate
, which is determined using the weighted average cost of capital, based on the optimal finance
structure or the average finance structure of industry peers (reflects the total cost of equity and debt). The
components of the discount rate are market-specific risk-free rate, market risk premium, business-specific beta,
country risk premium, size risk premium, cost of debt and debt-to-equity ratio, which corresponds to the capital
structure in retail industry. Lease liabilities have been taken into account in the calculation of the discount rate
and correspondingly the right-of-use asset is included in the value of asset.
Management has determined components of discount rate so that market-specific risk-free rate, market risk
premium, business-specific beta, country risk premium and size risk premium are consistent with external
sources of information and the cost of debt reflects the industry average.
The discount rate determined is a pre-tax rate. The discount rate of Lindex is based on the market interest rate
and country-specific risk pertaining to Sweden and Finland; the discount rate used for Lindex is 11.2% (11.5%
in 2021).
50
Sensitivity in determining the recoverable amount
In the impairment testing the recoverable amount of Lindex is approximately 51.7 per cent higher than the carrying
amount of the non-current assets and the working capital in the balance sheet. Due to the competition and general
economic situation affecting consumers’ purchasing behaviour and purchasing power, any changes in the variables used
can lead to a situation in which the recoverable amount Lindex would be less than the segment’s carrying amount which
leads to a need for impairment.
A
sensitivity analysis was carried out on Lindex using downside scenarios. The scenarios involved were:
- reducing the sales growth from the level given in the management’s estimates for the cash flow period also
reflecting to the sales value of the terminal period,
- reducing the Gross Margin per cent from the level given in the management estimates for the cash flow period
also reflecting to the Gross Margin per cent value of the terminal period,
- or raising the discount rate.
A change in an assumption that would cause the recoverable amount to equal the carrying amount is presented in the
table below.
Change, percentage points
2022
4.6%
7.8%
4.3 %
Based on the impairment testing carried out, there is headroom of EUR 362.0 million.
3.3
Property, plant and equipment
Accounting policies
Machinery and equipment comprise the bulk of property, plant and equipment. Property, plant and equipment also
includes modification and renovation costs of leased premises that are due, for example, to the finishing work on the
interiors of commercial premises located in leased buildings.
Property, plant and equipment are measured in the statement of financial position at their original acquisition cost less
accumulated depreciation and any impairment losses. The acquisition cost of self-constructed assets includes materials
and direct labour. If the item of property, plant and equipment is comprised of several components having useful lives of
differing length, the components are treated as separate items. Subsequent costs concerning the item are recognised as
a part of the acquisition cost when they increase the future useful life of the asset. Other costs, such as normal
maintenance and repair measures, are recognised in the income statement as operating expenses when they are
incurred.
On 9 February 2021, the District Court of Helsinki approved Stockmann plc’s restructuring programme. As a part of the
restructuring process, Stockmann was obliged to sell its real estate properties and negotiate leaseback arrangements.
Real estate properties of Helsinki and Riga were classified as assets held for sale in the consolidated financial
statements 31 December 2021.
Straight-line depreciation is recognised on property, plant and equipment in accordance with each item’s useful life.
The depreciation periods for property, plant and equipment are:
●
●
●
●
51
Tangible assets, EUR mill. 2022
Land and water
Buildings and constructions
Machinery and equipment
Modification and renovation
expenses for leased
premises
Right
-
of
-
use assets
Advance payments and
construction in progress
Tangible assets, total
Acquisition cost 1.1.
-0,0
252,4
9,2
468,6
1,2
731,3
Translation difference +/-
-12,5
-34,5
-1,7
-48,6
Increases during the period
8,1
0,0
222,0
40,3
270,4
Decreases during the period
-5,9
-0,7
-19,5
-26,0
Transfers between items during the period
1,9
0,8
-2,7
-0,0
Acquisition cost 31.12.
-0,0
244,0
9,4
636,7
37,1
927,1
Accumulated depreciation 1.1.
0,0
-211,8
-4,4
-172,0
-388,2
Translation difference +/-
11,6
14,4
26,0
Depreciation on reductions during the period
5,7
0,7
18,9
25,3
Depreciation and impairment losses during the
period
-0,0
-12,0
-1,2
-78,7
-91,9
Accumulated depreciation 31.12.
0,0
-206,4
-5,0
-217,5
-428,9
Carrying amount 1.1.
-0,0
40,6
4,8
296,6
1,2
343,2
Carrying amount 31.12.
-0,0
37,6
4,4
419,2
37,1
498,2
Tangible assets, EUR mill. 2021
Acquisition cost 1.1.
-0,0
-0,0
254,1
8,5
476,9
11,6
751,1
Translation difference +/-
-0,1
-8,3
-0,1
-8,5
Increases during the period
2,3
47,9
6,4
56,6
Decreases during the period
-16,1
-1,0
-47,9
-65,0
Transfers to non-current assets classified as held
for sale
0,0
0,0
-1,0
-0,7
-0,0
-1,7
Transfers between items during the period
13,3
2,3
-16,8
-1,2
Acquisition cost 31.12.
-0,0
-0,0
252,4
9,2
468,6
1,2
731,3
Accumulated depreciation 1.1.
0,0
-209,6
-4,4
-125,5
-339,5
Translation difference +/-
-0,4
2,9
2,5
Depreciation on reductions during the period
15,5
1,0
25,6
42,1
Accumulated depreciation on transfers to non-
current assets classified as held for sale
-0,0
0,9
0,6
1,5
Transfers between items during the period
-5,0
-5,0
Depreciation and impairment losses during the
period
0,0
-13,3
-1,6
-75,0
-89,8
Accumulated depreciation 31.12.
0,0
-211,8
-4,4
-172,0
-388,2
Carrying amount 1.1.
-0,0
0,0
44,5
4,1
351,4
11,6
411,7
Carrying amount 31.12.
-0,0
0,0
40,6
4,8
296,6
1,2
343,2
In 2022 and 2021 advance payments for plant, property and equipment and construction in progress included mainly
store furniture as well as modification and renovation costs for business and real estate premises.
3.4
Investment property
Accounting policies
When the Group holds a land area or building for lease income and appreciation in value rather than using it for its own
retail or administrative purposes, the property is classified as an investment property in accordance with IAS 40.
An investment property is initially valued at acquisition cost. The acquisition cost of a purchased investment property
comprises its purchase price and any directly attributable expenditure. Investment properties are not depreciated, but
any gains or losses due to changes in fair value are recognised through income statement for the period during which
they arise. Gains or losses arising from changes in the fair value of investment properties must be recognised separately
in income statement.
Tapiolan Säästötammi property in Espoo, of which Stockmann owns 37.8 per cent, was classified as an investment
property in accordance with IAS 40 on 31 December 2022.
52
EUR mill.
2022
2021
Fair value at 1.1.
0,5
0,5
Fair value at 31.12.
0,5
0,5
3.5
Leases
Group as lessee
Accounting policies
A right-of-use asset and a lease liability is recognised at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives
received. The right-of-use asset in the Stockmann Group is composed of leased business premises, warehouses, cars,
and other machinery and equipment.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
end of the lease term. If the lease transfers ownership of the underlying asset to the Group by the end of the lease term
or the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the right-of-use asset will be
depreciated over the useful life of the underlying asset. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for the amount of the remeasurement of the lease liability.
At the commencement date the lease liability is measured at the present value of the lease payments that are not paid at
that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined, the incremental borrowing rate is used. The incremental borrowing
rate is the average rate of interest that the Group would have to pay to borrow over a similar term, and with a similar
security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment.
Lease payments included in the measurement of the lease liability comprise the following:
- fixed lease payments
- variable lease payments that depend on an index, initially measured using the index as at the commencement date
- amounts expected to be payable under residual value guarantees
- the exercise price of a purchase option if it is reasonably certain that the option will be exercised
- payments of penalties for terminating the lease, if is reasonably certain that that option will be exercised
The lease liability is later measured at amortised cost using the effective interest method. The lease liability is
remeasured when there is a change in future lease payments arising from a change in an index or if there is a change in
the estimate of the amount expected to be payable under a residual value guarantee or if the assessment of whether
purchase, extension or termination option will be exercised. When the lease liability is remeasured, a corresponding
adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount
of the right-of-use asset has been reduced to zero.
The lease term is determined as the non-cancellable period of a lease, together with periods covered by an option to
extend the lease if it is reasonably certain to exercise that option. In the Stockmann Group Lindex uses a scoring system
based on the operating profit to determine if prolongation of original rental period is included in the lease term. Operating
profit is measured as a percentage compared to turnover and the higher the percentage the more likely the option to
extend will be exercised.
The Group presents right-of-use assets that do not meet the definition of investment property in property, plant and
equipment and lease liabilities in liabilities in the statement of financial position. When right-of-use assets are transferred
to the lessee under a sublease agreement and are classified as a finance lease the right-of-use assets are derecognised
and presented as a lease receivable in the balance sheet.
Based on the exemption provided by IFRS 16 the Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases and leases of low-value assets, including IT-systems and office equipment. The Group
recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Sale and leaseback
Accounting policies
The sale and leaseback agreement of Stockmann´s Riga department store property was signed on 29 December 2021
with the closure in January 2022. On 21 March 2022, Stockmann agreed on the sale of its department store property in
Helsinki city centre, the closing took place in April 2022. The department store property in Tallinn was sold on 29
December 2021. Department store operations continue with long-term leaseback agreements with the new owners.
53
According to the Group’s determination the transfers to the buyer-lessor are qualified as sales according to IFRS 15 and
consequently the sale and leaseback rules in IFRS 16 are applied. In sale and leaseback transactions Stockmann
measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset
that relates to the right-of-use retained by the Group. Accordingly, Stockmann recognises only the amount of any gain or
loss that relates to the rights transferred to the buyer-lessor.
The impact of the sales of department store properties on financial statements is described in note 1.5.
Right-of use assets
2022, EUR mill.
Buildings
Machinery and
equipment
Total
Acquisition cost 1.1.
466,7
1,8
468,6
Translation difference +/-
-34,4
0,0
-34,5
Increases during the period
104,8
0,3
105,1
Increase relating to sale and leaseback arrangements
116,9
116,9
Decreases during the period
-18,7
-0,8
-19,5
Acquisition cost 31.12.
635,4
1,3
636,7
Accumulated depreciation and impairment losses 1.1.
-170,9
-1,0
-172,0
Translation difference +/-
14,3
0,0
14,4
Depreciation on reductions during the period
18,2
0,6
18,9
Depreciation, amortisation and impairment losses during
the period
-78,3
-0,5
-78,7
Accumulated depreciation and impairment losses 31.12.
-216,7
-0,8
-217,5
Carrying amount 1.1.
295,8
0,8
296,6
Carrying amount 31.12.
418,7
0,5
419,2
Decreases of right-of use assets are mainly due to changes in terms of lease agreements for business premises.
2021, EUR mill.
Buildings
Machinery and
equipment
Total
Right-of-use assets 1.1.
475,0
1,9
476,9
Translation difference +/-
-8,2
0,0
-8,3
Increases during the period
43,7
0,6
44,2
Increase relating to sale and leaseback arrangement
3,6
3,6
Decreases during the period
-47,3
-0,6
-47,9
Acquisition cost at the end of the period
466,7
1,8
468,6
Accumulated depreciation and impairment losses at the
beginning of the period
-124,6
-0,9
-125,5
Translation difference +/-
2,9
0,0
2,9
Depreciation on reductions during the period
25,2
0,5
25,6
Depreciation, amortisation and impairment losses during
the period
-74,4
-0,6
-75,0
Accumulated depreciation and impairment losses at the end
of the period
-170,9
-1,0
-172,0
Carrying amount at the beginning of the period
350,5
1,0
351,4
Carrying amount at the end of the period
295,8
0,8
296,6
Carrying amount 31.12. by operating segments
EUR mill.
2022
2021
Lindex
252,0
236,7
Stockmann
167,2
60,0
Total
419,2
296,6
54
Leases recognised in profit and loss
EUR mill.
2022
2021
Interest expenses on lease liabilities
-24,7
-12,2
Expenses relating to leases of low-value assets
-0,1
-1,1
Expenses relating to short-term leases
-0,1
Expense relating to variable lease payments not included in lease liabilities
-5,7
-5,1
Total
-30,5
-18,5
Total cash outflow for leases in 2022 was EUR 98.4 million (78.5).
Group as lessor
Accounting policies
When the Group acts as a lessor, each lease is it determined at lease inception whether a finance lease or an operating
lease. The lease is a finance lease if substantially all of the risks and rewards incidental to ownership of the underlying
asset are transferred to lessee, if not, then it is an operating lease. All leases in which Stockmann Group acts as a lessor
on 31 December 2022 are operating leases. The Group recognises lease payments received under operating leases as
income on a straight-line basis over the lease term as part of revenue.
55
4 Capital structure
4.1
Financial income and expenses
Financial income
EUR mill.
2022
2021
Interest income on bank deposits, other investments and currency
derivatives
1,3
1,0
Other financial income
1,3
1,7
Total
2,6
2,7
Financial expenses
EUR mill.
2022
2021
Interest expenses on financial liabilities measured at amortised cost
derivatives
-2,8
-7,2
Interest expenses from lease contracts
-24,7
-12,2
Foreign exchange differences
-0,7
-0,2
Total
-28,3
-19,6
EUR mill.
2022
2021
Financial income and expenses, total
-25,7
-16,9
2021 includes EUR 1.7 mill. gain on the change in the lease agreements and EUR 0.9 mill. interest due to tax return.
4.2
Financial instruments
Accounting policies
Financial instruments are classified under IFRS 9 into the following groups: financial assets and liabilities at amortised
cost, at fair value through other comprehensive income and at fair value through profit or loss and other investments. The
classification is made at the time of the original acquisition based on the objective of the business model and the
characteristics of contractual cash flows of the investment
.
At reporting date, Stockmann Group did not hold any financial
assets classified at fair value through other comprehensive income.
Trade receivables and other receivables which are not derivatives are measured at amortised cost. They are included in
either current or non-current assets in the statement of financial position, as appropriate. Receivables are deemed non-
current assets if they mature after more than 12 months. Trade receivables are recognised at their fair value in the
statement of financial position on initial recognition. Stockmann Group applies the IFRS 9 simplified approach to
measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables, customer
contract assets and lease receivables. The amount of future credit losses is estimated on the basis of experience and
recognised in profit or loss as a percentage of all outstanding trade and lease receivables.
Other investments include the Group’s investments in shares, and they are measured at fair value through profit or loss.
The fair value of publicly quoted shares is the market price at the financial statements date. Unlisted shares are stated at
cost less any impairment loss, if their fair values cannot be measured reliably.
Purchases and sales of financial assets are recognised at the trade date, which is the day when the company made a
commitment to purchase or sell the asset item. An item belonging to financial assets is derecognised from the statement
of financial position when the company relinquishes the contractual rights to the item, the rights expire, or the company
loses control over the item.
Liabilities that are not derivatives are classified at amortised cost and are recognised at their fair value in the statement of
financial position on initial recognition. Transaction costs are included in the original carrying amount of interest-bearing
liabilities. Subsequently, interest-bearing liabilities are measured at amortised cost using the effective interest method.
Non-current liabilities fall due in 12 or more months and current liabilities have a maturity of less than 12 months.
Derivative financial instruments are classified as financial assets or liabilities at fair value through profit or loss, and
changes in their fair value are recognised through profit or loss, except for derivatives to which hedge accounting for
cash flow hedges or for hedges of net investments are applied and which meet the criteria for hedge accounting defined
in IFRS 9.
Hedge accounting is applied to certain currency derivatives that are used in hedging forecasted foreign currency
denominated sales and purchases and which meet the hedge accounting requirements of IFRS 9. The hedged cash flow
must be highly probable and ultimately affect profit or loss. Changes in the fair value of derivative contracts taken out to
hedge cash flows are recognised in the statement of comprehensive income and presented in the fair value reserve
under equity, and any ineffective component is recognised through profit or loss. Cumulative changes in fair value in
56
equity are recognised in items adjusting sales or purchases through profit or loss in the same period as that in which the
forecast transactions covered by hedge accounting are recognised in the income statement. If a hedged cash flow is no
longer expected to be realised, the related fair value change that has been recognised for the hedging instrument directly
to equity is transferred to the income statement.
Hedge accounting is also applied to certain currency derivatives that hedge foreign currency denominated net
investments in foreign operations. Changes in the fair value of the hedging instrument are recognised in the statement of
comprehensive income and presented in the translation difference in shareholders’ equity. Gains and losses from the
hedging of net investments that are recognised in translation differences are transferred to the income statement when
the net investment is disposed of in full or in part. Realised foreign exchange rate gain on the hedge of a net investment
in a foreign operations and internal loans are included in a cash flow from investment activities in the consolidated cash
flow statement.
The hedging relationship between the hedged item and the hedging instrument is documented at the inception of the
hedge. The documentation includes identification of the hedging instrument and the hedged item, the nature of the risk
being hedged, the objectives of risk management and calculations of hedge effectiveness. The hedging relationship must
be effective, and the effectiveness is reviewed both at the inception of the hedge and subsequently. Effectiveness testing
is carried out at each financial statements date.
The fair value of interest rate swaps is defined on the basis of the present value of future cash flows, applying market
prices at the financial statements date. Changes in the fair value of interest rate swaps are recognised in financial
income and expenses in the income statement. At the financial statements date, the Group did not have any outstanding
interest rate swaps.
The fair value of currency forwards and currency swaps is calculated by measuring them at their market prices at the
financial statements date. The fair value of currency options is calculated using the Black-Scholes model. The results of
the measurement of currency derivatives are recognised through profit or loss, except for currency derivatives to which
hedge accounting for cash flow hedges or hedges of net investments as defined in IFRS 9.
4.3
Current receivables
EUR mill.
2022
2021
Non-interest-bearing trade receivables
15,1
11,9
Receivables based on derivative contracts
0,1
1,6
Other receivables
0,7
2,4
Prepayments and accrued income
27,3
29,7
Income tax receivables
0,2
0,1
Current receivables, total
43,5
45,8
The carrying amount of trade receivables corresponds to their fair value. The maximum amount of the credit risk for trade
receivables and other current receivables is their carrying amount.
Prepayments and accrued income
EUR mill.
2022
2021
Prepaid rents
15,0
15,0
Merchandise prepayments
5,2
4,4
Periodised ICT expenses
2,5
2,7
Receivable from credit card co-operation
1,9
2,0
Periodised indirect employee expenses
1,3
0,2
Periodised restructuring expenses
0,1
1,9
Receivable from trademark co-operation
0,8
Others
1,4
2,8
Total
27,3
29,7
57
4.4
Cash and cash equivalents
Accounting policies
Cash and cash equivalents consist of cash on hand, current bank deposits as well as other current, highly liquid
investments with a maturity of no more than three months at the date of acquisition. The fair values of cash and cash
equivalents are assumed to approximate to their carrying amounts because of their short maturities.
EUR mill.
2022
2021
Cash and cash equivalents
167,9
213,7
Total
167,9
213,7
Restricted cash on 31 December 2022 EUR 0.6 million.
4.5
Non-current liabilities, interest-bearing
EUR mill.
Carrying amount 2022
Carrying amount 2021
Bond issues
67,6
66,1
Periodised loan arrangement expenses
-0,1
-0,2
Lease liabilities
477,5
264,3
Total
545,0
330,3
The carrying amount of bond issues and other liabilities have been calculated using the effective interest method, and
fair value has been defined using the discounted cash flow method by discounting at the market interest rate at the
reporting date.
In May 2021, Stockmann plc announced an offering of senior secured bonds to certain unsecured creditors of the issuer
under the restructuring programme. Pursuant to the restructuring programme, the unsecured creditors were entitled to
convert their receivables under the payment programme of the restructuring programme that have been confirmed to
unsecured debt, by way of set-off, to senior secured bonds on a euro-for-euro basis. The aggregate principal amount of
the bonds validly subscribed for by the unsecured creditors was EUR 66.1 million. Accordingly, Stockmann issued bonds
to the aggregate principal amount of EUR 66.1 million.
In January 2022, the Company announced that it had received and verified three subscription forms from entitled
persons whose previously conditional or disputed receivables subject to the payment programme of the Restructuring
Programme had been clarified and the final amounts of such receivables had been confirmed. The subsequent bonds
duly subscribed for by such Entitled Persons amounted to the aggregate principal amount of EUR 0.1 million. The
receivables of the entitled persons were converted, by way of set-off, to subsequent bonds.
In July 2022, the Company announced that it had received and verified one subscription form from an entitled person
whose previously conditional receivable subject to the payment programme of the restructuring programme had been
clarified and the final amounts of such receivable had been confirmed. The aggregate principal amount by which the
entitled person was entitled to subscribe for subsequent bonds amounted to EUR 1.4 million. The receivables of the
entitled person were converted, by way of set-off, into subsequent bonds.
The bonds are presented as non-current interest-bearing financing liabilities in the Consolidated Statement of Financial
Position on 31 December 2022.
4.6
Current liabilities
EUR mill.
Carrying amount 2022
Carrying amount 2021
Loans from financial institutions
0,0
381,5
Lease liabilities
77,3
72,9
Trade payables
67,0
61,8
Other current liabilities
32,5
77,7
Accruals and prepaid income
78,5
83,5
Derivative contract liabilities
1,2
0,1
Income tax liability
73,7
46,4
Current provisions
31,2
0,0
Total
361,3
724,0
of which interest-bearing
77,3
454,4
58
Restructuring debt
EUR mill.
31.12.2022
31.12.2021
Non-current non-interest-bearing restructuring debt, unsecured
0,0
19,8
Current interest-bearing restructuring debt, secured
0,0
381,5
Current non-interest-bearing restructuring debt, unsecured
0,2
2,0
Restructuring debt total
0,2
403,3
Restructuring debt related to non-current provisions
0,0
17,5
Restructuring debt related to current provisions
31,2
0,0
Provisions related to restructuring debt *)
31,2
17,5
Total
31,3
420,8
Additionally, Stockmann plc's intra-group restructuring liabilities amount to EUR 63.9 million.
*) Consists of conditional and maximum restructuring debt and disputed landlords' claims for terminated lease
agreements.
Accruals and prepaid income
EUR mill.
2022
2021
Personnel expenses
41,4
35,2
Periodised purchases
11,7
19,4
Customer loyalty programme MORE
5,6
7,1
Accrued site expenses
3,2
0,3
Reserve for returns and periodisation of sales
2,9
3,1
Accrued freight, customs and delivery expenses
1,3
Derivative liabilities
1,2
0,1
Accrued professional service expenses
0,7
0,9
Other accruals and prepaid income
10,3
16,6
Total
78,5
82,6
59
4.7
Reconciliation of liabilities arising from financing activities
EUR mill.
1.1.2022
Cash flows
from liabilities
Non
-
cash
changes from
liabilities
Non
-
cash
changes from
loans
31.12.2022
Changes in
leases
The effect of
changes in
foreign
exchange rates
Non-current liabilities, interest-
bearing
66,0
1,5
67,5
Current liabilities, interest-
bearing
381,5
-381,5
0,0
Lease liabilities
337,2
-73,8
312,7
576,2
Cheque account with overdraft
facility
0,0
-21,3
-21,3
Total liabilities from
financing activities
784,7
-455,2
312,7
-21,3
1,5
622,3
Loan arrangement expenses are included in cash flows from financing activities in the cash flow statement.
EUR mill.
1.1.2021
Cash flows from
liabilities
Non
-
cash
changes from
liabilities
Non
-
cash
chamges from
loan
arrangement
expenses
31.12.2021
Changes in
leases
The effect of
changes in
foreign
exchange rates
Non-current liabilities, interest-
bearing
-0,2
66,2
66,0
Current liabilities, interest-
bearing
488,1
-48,5
-58,2
381,5
Lease liabilities
371,2
-66,3
37,9
-5,6
337,2
Total liabilities from
financing activities
859,3
-114,9
37,9
-5,6
8,0
784,7
Loan arrangement expenses are included in cash flows from financing activities in the cash flow statement.
4.8
Financial risk management
The Group’s financing and the management of financial risks are handled on a centralised basis within Stockmann plc’s
Treasury function in accordance with the policy adopted by the Board of Directors.
The Board of Directors of Stockmann filed for corporate restructuring of the parent company Stockmann plc on 6 April
2020 and corporate restructuring proceedings were initiated on 8 April 2020. As a result of the filing for restructuring the
District Court of Helsinki ruled a temporary prohibition of collection for Stockmann plc and the company’s external debts
were subject to restructuring. The banks closed all derivative positions on 6 April 2020 and cancelled all hedging
facilities. In a decision on 9 February 2021, the Helsinki District Court approved Stockmann Plc’s restructuring
programme and the restructuring proceedings have ended. However, since the restructuring proceedings were initiated,
Stockmann has had limited possibilities to manage financial risks according to its financial policy. This note mainly
describes the management of financial risks in a situation where Stockmann has standard hedging instruments available.
The implications of the restructuring programme for financial risk management are described more in detail below.
60
The objective of financial risk management is to ensure reasonable financing for the Group in all circumstances and to
reduce the effects of market risks on the Group’s profit and balance sheet. Group Treasury, which reports to the Chief
Financial Officer of Stockmann plc, manages financial exposures and executes hedging strategies at Group level.
Treasury acts in accordance with more detailed guidelines setting out the principles of managing financial risks as well as
the management of liquidity and financing. In addition, the divisions may have additional instructions for hedging their
foreign exchange exposure.
The Group’s main financial risks are currency risk, interest rate risk, financing and liquidity risk, credit and counterparty
risk and electricity price risk.
Currency risk
The Group’s currency risk consists of sales and purchases made in foreign currency as well as balance sheet items and
also foreign-currency-denominated net investments in units abroad.
Transaction risk
Stockmann’s transaction risk derives from the currency flows connected with sales and purchases of the Group’s
divisions as well as from loans and receivables denominated in foreign currency. The most important sales currencies
during 2022 were the euro, the Swedish krona, and the Norwegian krone. The primary purchasing currencies were the
United States dollar, the euro and the Swedish krona. In 2022, non-EUR sales accounted for 54 per cent of the Group’s
entire sales (2021: 56 per cent). Purchases with a transaction risk made up 56 per cent of the Group's purchases (2021:
53 per cent). In addition, the Group has purchases in foreign currency without a transaction risk, mainly local purchases
in Sweden. In 2022 these purchases accounted for 4 per cent of the Group’s total purchases (2021: 4 per cent).
The divisions are responsible for forecasting future net cash flows denominated in foreign currency and for managing the
currency risk connected with them. The management of currency risk related to operational cash flows is based on cash
flow forecasts for the coming 6 months. The hedging period is generally a maximum of 6 months and the degree of
hedging for individual currencies can vary in the range of 0–100%. Contracted cash flows can be hedged for longer
periods. During the restructuring proceedings, the Group had no possibilities to hedge its foreign exchange positions.
Lindex obtained hedging facilities in September 2021 and is now hedging its transaction exposure in accordance with the
treasury policy. Stockmann plc currently has no hedging facilities.
Currency derivatives that are used to hedge forecasted cash flows are classified as cash flow hedges. The main
transaction risks arise in Lindex. Stockmann division operates mainly in local currency and its transaction exposure is
limited. The outstanding cash flow hedges are hedging Lindex’s purchases in US-dollar and sales in Swedish Krona,
Norwegian Krona and euro and will mature during the first 6 months of 2023. The gain/loss of these hedge instruments
will affect the Group’s operating profit in the same period during which the forecasted hedged items affect profit, which is
on average 4 months after maturity. Information about the fair value of these hedges is provided in Note 4.9
.
The table
below shows the distribution of currency for outstanding derivatives hedging cash flows. For each derivative, the
amounts are shown for both the bought and the sold currency. No ineffectiveness arose on cash flow hedges during the
year 2022.
Foreign exchange derivatives hedging cash flows
EUR Mill.
2022
2021
USD
45,9
47,1
SEK
-18,1
-21,2
NOK
-16,2
-14,9
EUR
-12,5
-9,8
Sensitivity Analysis, cash flow hedges, effect on equity after tax
2022, EUR Mill.
USD
SEK
NOK
Change + 10 %
-3,3
-0,9
1,2
Change - 10 %
4,1
1,1
-1,4
2021, EUR Mill.
USD
SEK
NOK
Change + 10 %
-3,4
-0,7
1,1
Change - 10 %
4,2
0,9
-1,3
All outstanding derivatives hedging cash flows relate to Lindex. The functional currency of Lindex is the Swedish Krona.
At year-end, the outstanding cash flow hedges in US-dollars covered approximately 70 % of the Stockmann Group’s
estimated net USD flows for the coming 6 months.
61
Foreign subsidiaries are financed primarily in local currency, whereby the foreign subsidiary does not incur significant
transaction risk other than from sales and purchases in foreign currency. Group Treasury is managing the currency risk
of the foreign-currency-denominated receivables and liabilities in Stockmann’s balance sheet. The degree of hedging can
vary in the range of 0 – 100%.
The following table shows the Group’s transaction exposure including foreign-currency-denominated assets and liabilities
as well as outstanding derivatives hedging these items. Future forecasted cash flows and derivatives hedging forecasted
cash flows are not included.
The Group’s transaction exposure
2022, EUR Mill.
SEK
GBP
NOK
CZK
USD
Receivables
8,5
3,9
24,7
12,1
18,7
Trade payables and other current liabilities
-10,0
-14,1
-20,6
Foreign currency exposure in the balance sheet
-1,5
3,9
10,6
12,1
-1,9
Foreign exchange derivatives hedging balance sheet items
12,0
Net position in the balance sheet
-1,5
3,9
10,6
12,1
10,1
2021, EUR Mill.
SEK
GBP
NOK
CZK
USD
Receivables
12,9
4,8
23,9
9,2
6,7
Trade payables and other current liabilities
-9,5
0,0
-10,8
-0,5
-23,2
Foreign currency exposure in the balance sheet
3,4
4,7
13,2
8,7
-16,5
Foreign exchange derivatives hedging balance sheet items
22,8
Net position in the balance sheet
3,4
4,7
13,2
8,7
6,3
A 10 % strengthening or weakening of the euro against other currencies would create the following effect in profit after
tax. The sensitivity analysis is based on the exposures in the table above.
Sensitivity Analysis, effect on income statement after tax
2022, EUR Mill.
SEK
GBP
NOK
CZK
USD
Change + 10 %
0,1
-0,3
-0,8
-0,9
-0,7
Change - 10 %
-0,1
0,3
0,9
1,1
0,9
2021, EUR Mill.
SEK
GBP
NOK
CZK
USD
Change + 10 %
-0,2
-0,3
-1,0
-0,6
-0,4
Change - 10 %
0,3
0,4
1,2
0,8
0,5
Translation risk
The Stockmann Group incurs translation risk when the financial statements of foreign subsidiaries are translated into
euro amounts in the consolidated financial statements.
For foreign-currency-denominated net investments, the effects of changes in foreign exchange rates appear as the
translation difference in the Group’s equity. Under normal circumstances Stockmann hedges translation risk for net
investments selectively by means of loans in foreign currency or with derivatives. When making hedging decisions any
effect the hedging measure may have on the Group’s earnings, balance sheet and cash flows as well as hedging costs
are taken into account.
During 2018 Stockmann reclassified a major part of the Swedish krona denominated intra-group loan, granted for the
acquisition of the shares in Lindex, as part of its net investment to a foreign subsidiary. The net investment has been
designated in a net investment hedge and was hedged to 50% by currency derivatives until 6 April 2020 when
outstanding derivatives were closed by the banks. The degree of hedging can vary from 0 to 100% according to the
policy approved by the Board. The objective of the hedge is to reduce the effect of EUR/SEK currency rate changes to
translation difference. At the end of 2022 the translation risk was not hedged since Stockmann plc didn’t have any
hedging facilities.
The following table shows how a 10% change of the euro against the Group companies’ functional currencies would
affect the Group’s equity. The sensitivity analysis includes effects from the translation of foreign-currency-denominated
net investments into euro.
62
Sensitivity Analysis, effect on equity
2022, EUR Mill.
SEK
Change + 10 %
-52,7
Change - 10 %
64,4
2021, EUR Mill.
SEK
Change + 10 %
-49,0
Change - 10 %
59,8
Interest rate risk
Fluctuations in the level of interest rates affect the Group’s interest expenses and interest income. The objective of the
Group’s management of interest rate risk is to reduce the uncertainty to which Stockmann’s earnings may be subject due
to changes in the level of interest rates. The duration of the loan and investment portfolio is a maximum of five years.
Interest rate derivatives can be used in managing interest rate risk but were not in use at the end of 2022.
Interest-bearing liabilities consist of a five-year bullet bond (excl. IFRS16 leases) issued to certain unsecured creditors
who were entitled to convert their receivables to senior secured bonds. The bond matures in July 2026 and the interest of
the bond is 0,10 % per annum.
Interest-bearing receivables consist mainly of bank receivables in different currencies, with a maturity less than 1 month.
Interest terms of the Group's interest-bearing liabilities and bank receivables on 31 December 2022:
Interest rate adjustment, period, EUR mill
< 12 months
1–3 years
3–5 years
Total
Bond Issues
67,6
67,6
Total
0,0
0,0
67,6
67,6
Cash and bank receivables
-167,9
-167,9
Total
-167,9
0,0
67,6
-100,2
Interest terms of the Group's interest-bearing liabilities and bank receivables on 31 December 2021:
Interest rate adjustment, period, EUR mill
< 12 months
1–3 years
3–5 years
Total
Bond Issues
66,0
66,0
Loans from financial institutions
381,5
381,5
Total
381,5
0,0
66,0
447,5
Cash and bank receivables
-213,8
-213,8
Total
167,7
0,0
66,0
233,7
Electricity price risk
Stockmann Group normally hedges the price risk affecting future electricity procurements. In accordance with the
financial policy, the degree of hedging of future electricity prices is a maximum of 70 % for years 2022-2023, and a
maximum of 50 % for the following two years. Lindex continues to hedge for electricity price risk, but Stockmann division
has had no access to new hedges since first half of 2021, but from 2023 onwards 50% of expected consumption has
been hedged. Due to the increased electricity prices during 2022, this has meant an increase of electricity costs with
approx
.
EUR 3.6 million compared to 2021, which is equal to approx. 51% increase of prices from previous year. As both
divisions are now able to hedge the main part of their electricity consumption, Stockmann Group does not expect such
an increase in electricity costs as for 2022 compared to 2021, and therefore further electricity cost increases would not
have such high impact on the Group’s net result in 2023 as it had in the net result in 2022.
Financing and liquidity risk
Financing risk is defined as the risk of not being able to meet payment obligations as a result of insufficient liquid funds,
breaking the terms of the financing facilities or difficulties in finding financing. In order to minimise financing risk, the
Group's financing need for the coming years should be covered by long-term committed credit facilities. The Group also
has to maintain a sufficiently large liquidity reserve. The liquidity reserve must be at least an amount corresponding to an
average month's operational cash disbursements. Cash and cash equivalents as well as unused committed and
uncommitted credit facilities may be included in the liquidity reserve.
Stockmann plc’s restructuring programme was approved by the District Court on 9 February 2021, where the Company’s
confirmed debts were classified as secured restructuring debt or unsecured restructuring debt. The unsecured
restructuring debts were subject to 20% cut or 20% conversion to Stockmann plc’s shares. The remaining 80 % was
either converted to a secured 5-year bullet bond or subject to a repayment schedule during years 2022-2028. According
to the restructuring programme Stockmann would sell and lease back the real estate properties of Helsinki, Tallinn and
63
Riga department stores. Funds received from these sales would primarily be used for repayment of secured restructuring
debt.
In December 2021, the sale and leaseback transactions for Tallinn and Riga department store properties were signed,
where the proceeds from Tallinn transaction were used for secured debt repayment in December 2021, and the
proceeds from Riga in January 2022. In April 2022 the sale and leaseback transaction for Helsinki department store
property was signed, which meant that all secured and undisputed unsecured debt could be repaid.
There are still disputed claims regarding the termination of lease agreements that must be settled before the
restructuring process can end. These claims are further explained in notes 1.4 and 1.5.
Stockmann Group’s scope for arranging new financing is limited during the execution of the restructuring programme.
This may have an effect on the sufficiency of liquidity and on the financial position.
Stockmann Group does not expect to have any need to acquire new equity or interest-bearing debt during the
restructuring programme with the exception of possible need to take seasonal working capital and financing for a
significant investment for Lindex new Omnichannel Distribution Center. The investment is EUR 110 million and it will be
ready in 2024. Different financing possibilities for that investment are under investigation.
Stockmann plc has covered all new payment obligations that have arisen since the restructuring proceedings started.
Positive cash flows from operations and selling real estates have been used for investments and repaying debts.
At the end of the year Stockmann Group had EUR 167.9 million (EUR 213.8 million) in cash assets.
Cash flows based on agreements in financial liabilities, including financing costs, on 31 December 2022
EUR Mill.
Carrying
amount
2023
2024
2025
2026
2027-
Total
Current restructuring debts
0,2
-0,2
-0,2
Restructuring debts total
0,2
-0,2
0,0
0,0
0,0
0,0
-0,2
Non-current bond (5-y bullet)
67,5
-0,1
-0,1
-0,1
-67,7
-67,9
Current trade payables and other
current liabilities
99,3
-99,3
-99,3
Non-current lease liabilities
477,5
-92,8
-85,3
-77,3
-406,4
-661,8
Current lease liabilities
77,3
-96,8
-96,8
Lease liabilities, total
554,8
-96,8
-92,8
-85,3
-77,3
-406,4
-758,7
Total
721,8
-196,4
-92,9
-85,4
-145,0
-406,4
-926,0
Currency derivatives
1,2
Assets
36,6
36,6
Liabilities
-37,6
-37,6
Total
1,2
-1,1
0,0
0,0
0,0
0,0
-1,1
The cash flows presented are based on the restructuring programme approved on 9 February 2021 and they include financing
costs.
In July 2021 EUR 66.1 mill. of the restructuring debt was converted into a new bond, which will be repaid in 2026 and to which
annual interest of EUR 0.1 mill. will be paid. In 2022 more bonds were converted with 1,5 mill. euros. Remaining restructuring debt
0,2 mill. EUR will be paid according to the restructuring program. Provisions regarding disputed landlords' claims are not included in
the cash flows.
Carrying amount of lease liabilities is discounted in accordance with IFRS 16. Annual cash flows are presented in nominal values.
64
Cash flows based on agreements in financial liabilities, including financing costs, on 31 December 2021
EUR Mill.
Carrying
amount
2022
2023
2024
2025
2026-
Total
Non-current restructuring debts
-19,8
-2,0
-2,0
-2,0
-13,9
-19,8
Current restructuring debts
-383,5
-384,7
-384,7
Restructuring debts total
-403,3
-384,7
-2,0
-2,0
-2,0
-13,9
-404,5
Non-current bond (5-y bullet)
-66,1
-0,1
-0,1
-0,1
-0,1
-66,2
-66,5
Current trade payables and other
current liabilities
-137,9
-137,9
-137,9
Non-current lease liabilities
-264,3
-66,8
-57,3
-48,5
-121,4
-293,9
Current lease liabilities
-72,9
-74,0
-74,0
Lease liabilities, total
-337,2
-74,0
-66,8
-57,3
-48,5
-121,4
-368,0
Total
-944,6
-596,7
-68,8
-59,3
-50,5
-201,5
-976,9
Currency derivatives
0,1
Assets
14,1
14,1
Liabilities
-14,3
-14,3
Total
0,1
-0,1
0,0
0,0
0,0
0,0
-0,1
The cash flows presented are based on the restructuring programme approved on 9 February 2021 and they include financing
costs.
According to restructuring programme, the real estate properties will be realized and the secured restructuring debt will be paid by
the end of Q1 2022.
At the end of June 2021 Restructuring debts amounted to EUR 539.9 mill. In July 2021 EUR 66.1 mill. was converted into a new
bond, which will be repaid in 2026 and to which annual interest of EUR 0.1 mill. will be paid. EUR 19.1 mill. was converted into
equity in July 2021 and EUR 2.7 mill. was cut. EUR 381,5 mill. presented in current financing liabilities will be repaid during Q1 2022
together with interest. Secured restructuring debt was reduced in January 2022 by EUR 38,7 mill. with proceeds from sales of Riga
real estate. The remaining unsecured restructuring debt EUR 21.8 mill. will be paid according to restructuring programme during
2022-2028. Provisions regarding disputed landlords' claims are not included in the cash flows.
Credit and counterparty risk
Trade receivables as well as receivables based on investments and derivative contracts expose the Group to credit risk.
The counterparty risk associated with investments is managed by means of counterparty limits approved by the Board of
Directors. Derivative contracts are entered into only with counterparties that are judged to be highly creditworthy and
financially solid. Cash assets are invested in financial instruments that are judged to be liquid and to have a low risk. At
the balance sheet date, 31 December 2022, the Group's liquid assets consisted mainly of deposits in banks, with a very
short maturity. The Group does not incur major credit risk relating to commercial trade receivables because its
outstanding receivables consist of a large amount of small receivables, and customers are primarily private individuals
whose creditworthiness has been checked.
In response to the war in Ukraine Stockmann discontinued selling merchandise to the Russian partner Debruss. All
receivables from Debruss, EUR 0.5 million in total, have been written off.
Aging of trade and lease receivables
31.12.2022
EUR mill.
Gross carrying amount
Loss allowance
Trade receivables not due
13,9
0,1
Trade receivables fallen due in 1–30 days
0,9
0,0
Trade receivables fallen due in 31–60 days
0,1
-0,0
Trade receivables fallen due in 61–90 days
0,2
0,1
Trade receivables fallen due in 91–120 days
0,1
0,0
Trade receivables fallen due in over 120 days
0,8
0,7
Total
16,0
0,8
65
31.12.2021
EUR mill.
Gross carrying amount
Loss allowance
Trade receivables not due
10,6
0,0
Trade receivables fallen due in 1–30 days
0,7
Trade receivables fallen due in 31–60 days
0,3
0,0
Trade receivables fallen due in over 120 days
0,2
0,0
Total
11,9
0,0
Stockmann Group recognises impairment provisions based on lifetime expected credit losses from trade and lease
receivables in accordance with IFRS 9. Stockmann applies a simplified credit loss matrix for trade and lease receivables.
Accordingly, the credit loss allowance is measured at an amount equal to the lifetime expected credit losses. The
expected credit loss model is forward-looking and expected default rates are based on historical realised credit losses.
The lifetime expected credit loss allowance is calculated using the gross carrying amount of outstanding trade
receivables in each aging bucket and an expected default rate. The changes in expected credit losses are recognised in
other operating expenses.
4.9
Derivative contracts
Nominal values of derivative contracts
Derivative contracts, hedge accounting applied
EUR mill.
2022
2021
Cash flow hedges, currency forwards
46,9
45,9
Total
46,9
45,9
Derivative contracts, hedge accounting not applied
EUR mill.
2022
2021
Electricity forwards
1,1
Total
1,1
Fair value of derivative contracts 2022
Derivative contracts, hedge accounting applied
EUR mill.
Positive
Negative
Net
Cash flow hedges, currency forwards
0,1
-1,2
-1,1
Total
0,1
-1,2
-1,1
Fair value of derivative contracts 2021
Derivative contracts, hedge accounting applied
EUR mill.
Positive
Negative
Net
Cash flow hedges, currency forwards
1,3
-0,1
1,1
Total
1,3
-0,1
1,1
Derivative contracts, hedge accounting not applied
EUR mill.
Positive
Negative
Net
Electricity forwards
0,4
0,4
Total
0,4
0,4
Currency swaps and forwards have been measured at fair value using market prices on the balance sheet date.
Changes in the fair values of currency derivatives are recognised either in equity or in the profit and loss depending on
whether hedge accounting has been applied to them. Currency derivative contracts did not result in hedge accounting-
related ineffectiveness that was to be recorded through profit and loss in 2022. The fair values of electricity derivatives
are based on market prices on the balance sheet date and the changes in the fair values are recognised in the profit and
loss.
66
4.10 Financial assets and liabilities by measurement category and hierarchical
classification of fair values
The Group uses the following hierarchy of valuation techniques to determine and disclose the fair value of financial
instruments:
Level 1: Quoted (unadjusted) prices for identical assets or liabilities in active markets.
Level 2: The valuation techniques use as input data quoted market prices which are regularly available from stock
exchanges, brokers or pricing services. Level 2 financial instruments are: over-the-counter derivative contracts which are
classified either for recognition at fair value on the income statement or as hedging instruments.
Level 3: Techniques, which require most management’s judgment.
There were no transfers between the levels during the financial year.
Financial assets, EUR mill.
Level
Carrying
amount
2022
Fair value
2022
Carrying
amount
2021
Fair value
2021
Derivative contracts, hedge accounting applied
2
0,1
0,1
1,3
1,3
Financial assets at fair value through profit or
loss
Derivative contracts, hedge accounting not applied
Electricity derivatives
1
0,0
0,0
0,4
0,4
Financial assets at amortised cost
Non-current receivables
3,1
3,1
3,8
3,8
Current receivables, non-interest-bearing
43,1
43,1
44,1
44,1
Cash and cash equivalents
167,9
167,9
213,7
213,7
Other investments
3
0,2
0,2
0,2
0,2
Financial assets, total
214,4
214,4
263,4
263,4
Financial liabilities, EUR mill.
Level
Carrying
amount
2022
Fair value
2022
Carrying
amount
2021
Fair value
2021
Derivative contracts, hedge accounting applied
2
1,2
1,2
-0,1
-0,1
Financial liabilities at amortised cost
Non-current interest-bearing liabilities
2
67,5
55,8
66,0
55,1
Non-current lease liabilities
2
477,5
477,5
264,3
264,3
Non-current non-interest-bearing liabilities
0,7
0,7
20,3
20,3
Current liabilities, interest-bearing
2
0,0
0,0
381,5
381,5
Current lease liabilities
2
77,3
77,3
72,9
72,9
Current liabilities, non-interest-bearing
177,9
177,9
223,0
223,0
Financial liabilities, total
802,1
790,4
1 027,8
1 016,9
In the balance sheet, derivative contracts are included in the following categories: Non-current and current receivables,
non-interest-bearing and non-current and current liabilities, non-interest-bearing.
Financial assets on level 3 are investments to shares of unlisted companies. The fair value of the shares is determined
by techniques based on the managements’ judgment. Profits or losses from the investments are recorded to other
operating income or expenses in the income statement, because acquisition and divestment decisions on the
investments are made for business reasons. The following calculation illustrates changes in financial assets valuated at
fair value during the reporting period.
67
Change in fair value of other investments, EUR mill.
2022
2021
Carrying amount 1.1.
0,2
0,2
Carrying amount 31.12.
0,2
0,2
4.11
Financial instruments subject to netting arrangements
The Group has entered into derivative transactions under agreements that include a master netting arrangement. The
agreements stipulate that in certain circumstances, e.g., when a credit event such as a default occurs, all outstanding
transactions under the agreement are terminated and only a single net amount is payable in settlement of all
transactions.
The agreements do not meet the criteria for offsetting in the statement of financial position.
The following table sets out the amounts of recognised financial instruments that are subject to the above agreements.
31.12.2022
Financial assets, EUR mill.
Carrying amount
Items under netting
arrangements
Net
Currency derivatives, hedge accounting applied
0,1
-0,1
0,0
Financial assets, total
0,1
-0,1
0,0
Financial liabilities, EUR mill.
Currency derivatives, hedge accounting applied
-1,2
0,1
-1,1
Financial liabilities, total
-1,2
0,1
-1,1
31.12.2021
Financial assets, EUR mill.
Carrying amount
Items under netting
arrangements
Net
Currency derivatives, hedge accounting applied
1,3
-0,1
1,1
Electricity derivatives, hedge accounting not applied
0,4
0,4
Financial assets, total
1,6
-0,1
1,5
Financial liabilities, EUR mill.
Currency derivatives, hedge accounting applied
-0,1
0,1
0,0
Financial liabilities, total
-0,1
0,1
0,0
4.12 Shareholders’ equity
EUR mill.
Entered in
trade
register
Number of
shares, A
Number of
shares, B
Total
capital
Share
premium
fund
Invested
unrestricte
d equity
fund
Total
31.12.2020
30 530 868
41 517 815
72 048 683
144,1
186,1
250,4
580,6
Combination of
share classes
9.4.2021
-30 530 868
33 583 954
3 053 086
Share issue
6.7.2021
79 335 175
79 335 175
31.12.2021
0
154 436 944
154 436 944
77,6
0,0
72,0
149,6
Share issue
27.1.2022
28 139
28 139
Share issue
23.3.2022
284 337
284 337
Share issue
22.7.2022
1 130 786
1 130 786
31.12.2022
0
155 880 206
155 880 206
77,6
0,0
73,3
150,9
68
Share capital
On 7 April 2021 the Stockmann Plc’s Annual General Meeting approved the proposal by the Board of Directors to
combine the A and B share classes without increasing the share capital so that following the combination, the company
has only a single class of a shares, all shares of which carry one (1) vote per share and have equal rights also in all other
respects. In accordance with the AGM resolution, the company’s A and B series were combined as of 12 April 2021 so
that each one (1) A share was entitled to receive 1.1 B shares.
In connection with the combination of the share classes, the Annual General Meeting resolved to remove the provisions
concerning the maximum and minimum amount of share capital, the par value of the shares as well as the different share
classes, their associated voting rights and conversion procedures in the Articles of Association.
In May 2021, Stockmann Plc’s Board of Directors resolved, pursuant to the authorisation granted by the Annual General
Meeting, on a directed share issue of at most 100 000 000 new shares of the company to the unsecured and hybrid bond
creditors of the company’s restructuring debt, carried out in deviation from the shareholders’ pre-emptive subscription
rights. A total of 79 335 175 conversion shares were subscribed for in the share issue, and the total number of
Stockmann shares increased to a total of 154 436 944 shares. The subscription price was EUR 0.9106 per share and, as
a result, approximately EUR 72.2 million of Stockmann's unsecured restructuring debt and hybrid loan debt were
converted into Stockmann shares.
In January 2022, the Company’s Board of Directors decided, in accordance with the Restructuring Programme and
pursuant to the authorisation granted by the Annual General Meeting, to issue 28,139 new shares of the Company in
deviation from the shareholders’ pre-emptive subscription rights to creditors whose previously conditional or disputed
restructuring debts under the Restructuring Programme have been confirmed to their final amounts by 1 December 2021
and approved the subscriptions made in the Share Issue. The subscription price in the Share Issue was EUR 0.9106 per
share, which has been paid by setting off restructuring debt in accordance with the Restructuring Programme.
In March 2022, the Company’s Board of Directors, in accordance with the Restructuring Programme and pursuant to the
authorisation granted by the Annual General Meeting, to issue 284,337 new shares of the Company in deviation from the
shareholders’ pre-emptive subscription rights to a creditor whose previously conditional or disputed restructuring debts
under the Restructuring Programme have been confirmed to their final amounts by 21 January 2022 and approved the
subscription made in the Share Issue. The subscription price in the Share Issue was EUR 0.9106 per share, which has
been paid by setting off restructuring debt in accordance with the Restructuring Programme.
In July 2022, The Company’s Board of Directors decided, in accordance with the Restructuring Programme and pursuant
to the authorisation granted by the Annual General Meeting, to issue 1,130,786 new shares of the Company in deviation
from the shareholders’ pre-emptive subscription rights to creditors whose previously conditional or disputed restructuring
debts under the Restructuring Programme have been confirmed to their final amounts by 14 July 2022 and has approved
the subscriptions made in the Share Issue. The subscription price in the Share Issue was EUR 0.9106 per share, which
has been paid by setting off restructuring debt in accordance with the Restructuring Programme.
As a result of the Share Issues in January, March and July 2022, the total number of shares in the Company has
increased to a total of 155,880,206 shares.
On 31 December 2022 Stockmann Plc’s share capital was EUR 77.6 million. All the shares issued have been fully paid
in.
Redemption obligation
A shareholder whose proportion of all the company’s shares or the number of votes conferred by the shares either alone
or together with other shareholders reaches or exceeds 33 1/3 per cent or 50 per cent is liable, at the
demand of the other shareholders, to redeem their shares in the manner specified in the Articles of Association.
Share premium fund
On 31 December 2020 the share premium fund contained cash payments in excess of the nominal value that were
received from share subscriptions, less the transaction costs. During 2021, the fund was used to cover losses of the
previous years.
Invested unrestricted equity fund
The invested unrestricted equity fund contains other equity-like investments and the share subscription price, less
transaction costs, to the extent that this is not entered in share capital under a specific decision. The balance of the fund
reported on 31 December 2020 was used to cover losses. The previously mentioned share issues in 2021 and 2022
have been recognised as invested unrestricted equity fund.
Translation differences
The translation differences reserve comprises the translation differences on equity that have arisen in consolidating the
financial statements of foreign subsidiaries and translation differences arisen in consolidating net investment in foreign
currencies.
69
Other funds
EUR mill.
2022
2021
Reserve fund
0,1
0,1
Hedging reserve
-1,1
1,1
Total
-1,0
1,2
Other funds comprise:
- reserve fund, which contains an amount transferred from unrestricted shareholders’ equity based on local
regulations
- hedging reserve, which contains changes in fair value of derivatives that are used to hedge cash flows, less the
deferred tax liability.
Dividends
The dividend payout proposed by the Board of Directors has not been recognised in the financial statements. Dividends
are recognised on the basis of a resolution passed by a General Meeting of the shareholders.
According to the Finnish Companies Act, distributions to shareholders during the three years following the registration of
the reduction of share capital in order to cover losses can only be made by following the creditor protection procedure.
During the restructuring programme Stockman Plc is not allowed to distribute funds either.
4.13
Earnings per share
Undiluted earnings per share are calculated by dividing the profit for the period attributable to the parent company's
shareholders by the weighted average number of shares outstanding during the financial period. The outstanding shares
do not include treasury shares held by the Group. Diluted earnings per share are calculated by adjusting the weighted
average number of shares by the effect of potential diluting shares such as shares from share-based payments. As of 31
December 2022, the dilutive effect was not significant.
EUR mill.
2022
2021
Profit/loss for the period attributable to the equity holders of the parent
company
101,6
47,9
101,6
47,9
Share issue-adjusted number of outstanding shares, weighted average
155 189 297
114 008 608
From continuing operations (undiluted and diluted)
0,65
0,42
From the period result (undiluted and diluted)
0,65
0,42
70
5 Other notes
5.1
Non-current assets classified as held for sale
Accounting policies
Asset items under the heading ‘Non-current assets classified as held for sale’ are measured in accordance with IFRS 5
at the lower of their carrying amount and fair value less estimated selling costs. When an asset item is classified within
non-current assets as held for sale, it is not depreciated. A non-current asset held for sale is presented in the statement
of financial position separately from other asset items. Likewise, liabilities connected with an asset classified as held for
sale are presented as a separate item in the statement of financial position.
By a decision on 9 February 2021, the Helsinki District Court approved Stockmann plc’s restructuring programme. As
part of the restructuring process, Stockmann was obliged to sell its real estate properties and negotiate leaseback
arrangements. In December 2021 Stockmann entered into sales agreement regarding its department store properties in
Tallinn and Riga with long-term leaseback agreements made with the new owner. According to the terms of the
agreements, the sale-and-leaseback transaction for the Tallinn property was recognised in the reporting period, whereas
the corresponding transaction for the Riga property was realised in January 2022. In the consolidated financial
statements of 2021, the Helsinki and Riga department store properties were classified as assets held for sale.
In April 2022, Stockmann sold its department store property in Helsinki city center and made a long leaseback
agreement with the new owner.
Assets classified as held for sale and the relating liabilities
EUR mill.
2022
2021
Intangible assets and property, plant and equipment
0,0
239,3
Other receivables
0,0
0,1
Cash and cash equivalents
0,0
0,1
Deferred tax liabilities
0,0
15,3
Other liabilities
0,0
0,4
Net assets
0,0
223,8
5.2
Joint arrangements
Joint operations
The Group has a 37.8% shareholding in Kiinteistö Oy Tapiolan Säästötammi Fastighets Ab. The real estate company is
based in Espoo, Finland. The joint operation is not essential for Stockmann.
In 2021, the Group had a 63% shareholding in real estate company SIA Stockmann Centrs, which entitled the company
to 63% control of the real estate company’s premises, so the Group had a 63% involvement in the joint operation. SIA
Stockmann Centrs owns a shopping center property in Latvia. Stockmann’s share of the joint operation covered the
commercial premises of Stockmann’s department store in Riga, Latvia. The joint operation was essential for Stockmann.
On 29 December 2021 Stockmann entered into sales agreement to sell its ownership of SIA Stockmann Centrs with a
long-term leaseback agreement with the new owner. According to the terms of the sale agreement the ownership of the
shares was transferred to the buyer in January 2022.
The share corresponding to the Group’s ownership of both the assets and liabilities and income and expenses of the joint
operation is included in the Group’s consolidated financial statements
.
Assets and liabilities of joint operations
EUR mill.
2022
2021
Non-current assets
1,3
13,2
Current assets
0,6
0,6
Current liabilities
0,1
0,2
Income and expenses of joint operations
EUR mill.
2022
2021
Income
0,5
2,6
Expenses
0,2
1,4
71
5.3
Provisions
Accounting policies
A provision is recognised when the Group has a legal or factual obligation as a result of a past event and it is probable
that a payment obligation will be realised and the amount of the obligation can be estimated reliably. Provision for
onerous contract is recognised, when the unavoidable costs under the contract exceed the expected economic benefits.
A restructuring provision is recognised if the Group is committed to a sale or a termination of the significant line of
business or a closure of business in a geographical area. Provision amounts are reviewed on each balance sheet date
and adjusted to reflect the current management’s estimate. Changes in provisions are recorded in the income statement
in the same item in which the provision was originally recognised.
Non-current provisions
Other provisions
EUR mill.
2022
2021
Carrying amount 1.1.
17,5
Transfer between items
-17,5
17,0
Increase in provisions
1,4
Used provisions
-1,0
Carrying amount 31.12.
0,0
17,5
Non-current provisions total
0,0
17,5
Current provisions
Restructuring provision
EUR mill.
2022
2021
Increase in provisions
0,1
Carrying amount 31.12.
0,1
0,0
Other provisions
EUR mill.
2022
2021
Carrying amount 1.1.
0,0
17,0
Transfer between items
17,5
-17,0
Increase in provisions
19,0
Used provisions
-4,5
Reversal of unused provisions
-0,7
Carrying amount 31.12.
31,2
0,0
Current provisions total
31,2
0,0
Provision for landlords' claims related to terminated lease contracts amounted to EUR 30.8 million.
72
5.4
Contingent liabilities
Mortgages given as collateral for liabilities and commitments
2022
2021
EUR mill.
Debt at the year
end
Collaterals
Book value of
the assets *)
Debt at the
year
end
Collaterals
Book value of the
assets *)
Loans from credit institutions
381,5
1 500,0
Other commitments
1,7
Total
0,0
0,0
0,0
381,5
1 501,7
238,9
*) Cost method applied
Other collaterals given for own liabilities
EUR mill.
2022
2021
Guarantees
0,1
0,1
Electricity commitments
2,7
0,3
Liabilities of adjustments of VAT deductions made on investments to
immovable property
2,5
Total
2,8
2,9
Contingent liabilities, total
EUR mill.
2022
2021
Mortgages
1 501,7
Guarantees
0,1
0,1
Electricity commitments
2,7
0,3
Liabilities of adjustments of VAT deductions made on investments to
immovable property
2,5
Total
2,8
1 504,6
Electricity commitments relate to agreements to buy electricity for certain price in years 2023-2024.
Investments in real estate
After Stockmann sold its department store properties, the responsibility for checking the VAT on real estate
investments was transferred to the buyer in 2022.
Landlords' disputed claims
Some landlords have presented Stockmann Plc with claims for damages related to termination of long-term lease
agreements. Stockmann has recognised a provision for the claims corresponding to 18 months’ rents, which is in
accordance with the restructuring programme. The amount of the claims exceeding the provision, EUR 41 million (EUR
85 million in 2021), is presented as a contingent liability. More information on the claims is provided in note 1.4.
73
5.5
Related party transactions
Members of the Board of Directors and Management Team belong to the Group’s related party, as well as
the parent company, subsidiaries and joint operations.
Members of the Board of Directors and Management Team belonging to the Group’s related party during
financial year 2022:
●
●
23 March 2022
●
●
●
●
23 March 2022
●
●
●
●
●
●
●
●
●
Members of the Board of Directors and Management Team belonging to the Group’s related party during
financial year 2021:
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
The relationships between the company's parent company and subsidiaries are shown in notes to the parent
company's financial statements, under the header "Shares and participation”.
The following transactions were carried out with related parties:
Management's employee benefits
Emoluments
Employee benefits of the Chief Executive Officer
and other members of the Management Committee
2022, EUR
Chief Executive
Officer
Other members of
the Management
Committee
Total
Short-term employee benefits
604 315
1 935 140
2 539 455
Other long-term employee benefits
303 670
303 670
Share-based payments
11 067
23 909
34 976
Employee benefits total
615 382
2 262 719
2 878 101
74
Remunerations to the Board of Directors 2022, EUR
Fixed annual
remuneration *)
Remuneration
based on
participation
Total
Neuwald Roland
80 000
16 000
96 000
Björkman Stefan
50 000
12 200
62 200
Karppinen Timo
40 000
10 400
50 400
Kuittinen Anne
40 000
7 800
47 800
Lager Esa **)
2 900
2 900
Niemistö Leena **)
3 800
3 800
Pohjonen Sari
40 000
11 000
51 000
Stone Tracy
40 000
7 200
47 200
Williams Harriet
40 000
9 000
49 000
Remunerations to the Board of Directors total
330 000
80 300
410 300
Fees and remunerations to key personnel total, EUR
3 288 401
*) paid in 60 134 company shares and cash
**) resigned from the Board of Directors on 23 March 2022
Employee benefits of the Chief Executive Officer
and other members of the Management Committee
2021, EUR
Chief Executive
Officer
Other members of
the Management
Committee
Total
Short-term employee benefits
604 252
1 607 896
2 212 148
Other long-term employee benefits
160 912
160 912
Employee benefits total
604 252
1 768 808
2 373 060
Remunerations to the Board of Directors 2021, EUR
Fixed annual
remuneration *)
Remuneration
based on
participation
Total
Neuwald Roland
80 000
16 100
96 100
Niemistö Leena
50 000
16 400
66 400
Björkman Stefan
40 000
17 200
57 200
Kuittinen Anne
40 000
7 800
47 800
Lager Esa
40 000
17 400
57 400
Ratia Lauri **)
6 100
6 100
Stone Tracy
40 000
10 200
50 200
Wallgren Dag **)
4 600
4 600
Williams Harriet
40 000
7 800
47 800
Remunerations to the Board of Directors total
330 000
103 600
433 600
Fees and remunerations to key personnel total, EUR
2 806 660
*) paid in 91 791 company shares and cash
**) resigned from the Board of Directors on 7 April 2021
Management’s share-based incentives
Information of management’s share-based incentive plan is disclosed in note 5.6.
Management's pension commitments
The CEO Jari Latvanen’s retirement age is determined in accordance with Finnish employment pension legislation. The
CEO’s pension will accrue on the basis of the Employees’ Pensions Act. A separate voluntary pension is not paid.
The retirement age of the Management Team members is 63 or 65, depending on the particular executive agreement in
question. In 2022 two of the Management Team members had voluntary defined contribution pension insurance taken by
the company. The costs of the insurances in 2022 amounted to EUR 303 670 (EUR 160 912 in 2021).
Other related party transactions
In 2022 the Board members were paid no other compensations.
75
5.6
Share-based incentives
Accounting policies
Stockmann group offers performance shares as a long-term equity-settled share-based incentive plan for key
employees.
Employee services received and the corresponding increase in equity are measured by reference to the fair value of the
equity instruments as of the grant date, excluding the impact of any non-market vesting conditions. Non-market vesting
conditions attached to the performance shares are included in assumptions about the number of shares that the
employee will ultimately receive.
Stockmann reviews the assumptions made on a regular basis and, where necessary, revises its estimates of the number
of performance shares that are expected to be settled. Share-based compensation is recognised as an expense in the
consolidated income statement over the vesting and commitment period of the plan on a straight-line basis and an
increase corresponding to the expensed amount is recorded in equity. Social security expenses related to the share-
based compensation is recognised as an expense in the consolidated income statement over the vesting and
commitment period of the plan based on the actual share price at the end of reporting period and an increase
corresponding to the expensed amount is recorded as a liability in the consolidated statement of financial position.
Share-based incentives during the period 1.1.2022 – 31.12.2022
During the financial year 2022 Stockmann Plc's Board of Directors decided on the establishment of a share-based long-
term incentive scheme for the company's management and key personnel. The Performance Share Plan (PSP) consists
of three individual performance periods. The Board of Directors decides separately the performance criteria, persons
authorised to participate and the amount of the threshold, target and maximum reward for each performance period. The
objective of the Performance Share Plan is to support the implementation of the Company's strategy, to align the interest
of the key personnel with those of the Company's shareholders and to retain management and key personnel. The Board
of Director's approved the commencement of the first performance period (PSP 2022-2024) and decided on the
performance criteria in 2022. The performance criteria include total shareholder return, revenue, EBIT and climate
neutrality. The potential reward will be paid during H1 2025, depending on the achievement of the performance criteria
and the service condition. Any reward earned for the PSP 2022-2024 will be paid partly in company shares and partly in
cash. The purpose of the cash contribution is to cover taxes and tax-like payments incurred by the management and key
personnel from the remuneration.
Performance period 2022-2024
Initial amount, pcs *)
1 478 000
Initial allocation date
23.11.2022
Vesting date
30.04.2025
Maximum contractual life, years
2,4
Remaining contractual life, years
2,3
Number of participants in the plan
21
Payment method
Equity and cash, net settlement
*) The amounts are presented in gross terms, i.e. the share reward figures both the reward paid in share and a
number of shares corresponding to the amount of the reward paid in cash.
Changes in Share awards during the financial year
Number of shares
Performance period 2022-2024
Granted during the year
1 478 000
Outstanding 31.12.
1 478 000
Fair value determination
The fair value of share-based incentives has been determined at grant date and the fair value is expensed until vesting.
Market condition, in this case total shareholder return has been taken into account when determining the fair value at
grant and it will not be changed during the plan. The pricing of the share-based incentives granted during the period was
determined by the following inputs and had the following effect:
76
Valuation parameters for instruments granted during period 2022
Performance period 2022-2024
Share price at grant, EUR
1,93
Share price at the end of the period, EUR
1,97
Expected volatility, % *)
53,40%
Maturity, years
2,1
Risk-free interest rate, %
2,13%
Expected dividends, EUR
Valuation model
Monte Carlo
Fair value per share, EUR
0,8769
*) Expected volatility was determined by calculating the historical volatility of Stockmann's share using monthly
observations over corresponding maturity.
Effect of Share-based Incentives on the result and financial
position
EUR mill.
2022
Expenses for the financial year, share-based payments
0,1
Expenses for the financial year, share-based payments, equity-settled
0,1
Estimated future cash payment related to withholding taxes
0,6
5.7 EU Taxonomy Key Performance Indicators
Stockmann Group’s accounting policies for taxonomy-eligible and taxonomy-alignment calculations are based on our
best interpretation of the EU Taxonomy Regulation and delegated acts and the currently available guidelines from the
European Commission.
Taxonomy-eligible and non-eligible activities
The primary activity which has been identified as eligible in the taxonomy that is currently relevant for Stockmann Group
is activity 7.7 Acquisition and ownership of buildings (Renting and operating of own or leased real estate). Financial
numbers associated to taxonomy activity 6.5 transport by motorbikes, passenger cars and light commercial vehicles are
currently below certain materiality thresholds that Stockmann Group has defined and therefore the activity has been
categorized as non-eligible.
Taxonomy-aligned activities
The EU Taxonomy Regulation establishes the basis for the EU taxonomy by setting out conditions that an economic
activity must meet to qualify as environmentally sustainable.
Stockmann Group has assessed how and to what extent its activities are associated with economic activities that qualify
as environmentally sustainable under Articles 3 and 9 of Regulation (EU) 2020/852 of the European Parliament and of
the Council. In the assessment, Stockmann Group has determined, whether its taxonomy-eligible economic activities
fulfill the substantial contribution criteria, do no significant harm criteria and minimum social safeguards criteria in the EU
Taxonomy Regulation. Taxonomy-eligible economic activity which meets all criteria is recognised as environmentally
sustainable and Taxonomy-aligned.
Taxonomy-aligned turnover
The share of Stockmann Group’s taxonomy-aligned turnover is calculated as turnover from sublease and concession
agreements associated with economic activities that qualify as environmentally sustainable as a proportion of Stockmann
Group’s total revenue, see note 2.2.1.1.
Taxonomy-aligned CAPEX
The share of Stockmann Group’s taxonomy-aligned CAPEX is calculated as the CAPEX related to assets associated
with economic activities that qualify as environmentally sustainable as a proportion of Stockmann Group’s total CAPEX
that is accounted for based on IFRS 16 (53: 8h)) and IAS 16 (73: (e) (i)) and thereby included in Increases during the
period, see notes 3.3 and 3.5.
Taxonomy-aligned OPEX
The share of Stockmann Group’s taxonomy-aligned OPEX is calculated as OPEX related to assets associated with
economic activities that qualify as environmentally sustainable as a proportion of Stockmann Group’s total OPEX that is
a part of ‘Other operating expenses’, see note 2.6. According to EU taxonomy definition of OPEX KPI, the total OPEX
includes building renovation measures, short-term lease, maintenance and repair, and any other direct expenditures
relating to the day-to-day servicing of assets of property, plant and equipment. For Stockmann Group OPEX does not
include ICT expenses as it is not possible to separate ICT expenses related to maintenance from other ICT expenses.
77
The EU taxonomy Key Performance Indicators are disclosed as part of the non-financial information in Stockmann’s
Financial Review.
5.8
Events after the reporting period
The Supreme Administrative Court in Sweden decided on 27 January 2023 that it does not grant a leave to appeal to the
Swedish Tax Agency for the decision made by Administrative Court of Appeal on Stockmann’s subsidiary Stockmann
Sverige AB’s right to deduct interest expenses during the years 2013-2016 for the loan it raised for the acquisition of AB
Lindex. Consequently, on 3 February 2023 the Administrative Court of Appeal informed that the Swedish Tax Agency
withdrew their appeal against the decision made by the County Administrative Court on the right to deduct interest
expenses during the years 2017-2019. Based on the decisions, Stockmann Group will recognise a decrease of approx.
EUR 30 million in tax liability on statement of financial position and income taxes in the income statement during the first
quarter of 2023.
78
Stockmann plc
Income Statement, FAS
EUR
Note
1.1.-31.12.2022
% of Rev.
1.1.-31.12.2021
% of Rev.
REVENUE
245 095 279,40
100,0
230 776 429,50
100,0
Other operating income
2
192 697 041,91
78,6
106 329 155,56
46,1
Materials and services
Materials and consumables:
Purchases during the financial year
-139 508 885,07
-125 323 282,22
Change in inventories, increase (+), decrease (-)
9 593 840,51
3 854 681,68
Materials and services, total
-129 915 044,56
53,0
-121 468 600,54
52,6
Wages, salaries and employee benefits
3
-45 178 701,91
18,4
-43 906 349,86
19,0
Depreciation, amortisation and impairment losses
4
-12 100 924,31
4,9
-20 932 572,46
9,1
Other operating expenses
5
-107 449 439,60
43,8
-73 504 984,89
31,9
-294 644 110,38
120,2
-259 812 507,75
112,6
OPERATING PROFIT (LOSS)
143 148 210,93
58,4
77 293 077,31
33,5
Financial income and expenses
6
42 275 552,43
17,2
12 839 440,12
5,6
PROFIT (LOSS) BEFORE
APPROPRIATIONS AND TAXES
185 423 763,36
75,7
90 132 517,43
39,1
Appropriations
7
35 255 625,83
14,4
-11 800 629,46
-5,1
Income taxes
8
-46 842 369,66
-19,1
-2 094 785,69
-0,9
PROFIT (LOSS) FOR THE PERIOD
173 837 019,53
70,9
76 237 102,28
33,0
79
Stockmann plc
Balance sheet, FAS
EUR
Note
31.12.2022
31.12.2021
ASSETS
NON-CURRENT ASSETS
Intangible assets
9
Intangible rights
5 827 390,87
9 558 379,05
Other intangible assets
70 884,14
141 460,91
Advance payments and construction in progress
3 945 813,28
1 896 103,53
Intangible assets, total
9 844 088,29
11 595 943,49
Property, plant, equipment
10
Land and water
9 214 458,59
Buildings and constructions
226 796 621,18
Machinery and equipment
18 717 395,94
21 993 784,40
Modification and renovation expenses for leased
premises
3 027 478,91
3 602 672,26
Other tangible assets
54 601,65
54 601,65
Advance payments and construction in progress
1 192 370,67
138 155,89
Property, plant, equipment, total
22 991 847,17
261 800 293,97
Investments
11
Shares in Group companies
309 936 627,98
286 641 335,62
Other shares and participations
748 761,86
748 761,86
Investments, total
310 685 389,84
287 390 097,48
NON-CURRENT ASSETS, TOTAL
343 521 325,30
560 786 334,94
CURRENT ASSETS
Inventories
Materials and consumables
52 663 049,58
43 069 209,07
Inventories, total
52 663 049,58
43 069 209,07
Non-current receivables
Loan receivables from Group companies
208 567 698,92
226 499 865,68
Other receivables
6 718 529,28
16 289 254,72
Non-current receivables, total
215 286 228,20
242 789 120,40
Current receivables
12
Trade receivables
2 495 382,50
1 593 227,75
Receivables from Group companies
8 805 716,71
6 325 525,93
Other receivables
507 318,28
453 199,05
Prepayments and accrued income
9 577 997,87
13 478 058,43
Current receivables, total
21 386 415,36
21 850 011,16
Cash in hand and at banks
13
35 084 492,56
40 426 083,02
CURRENT ASSETS, TOTAL
324 420 185,70
348 134 423,65
ASSETS, TOTAL
667 941 511,00
908 920 758,59
80
Stockmann plc
Balance sheet, FAS
EUR
Note
31.12.2022
31.12.2021
EQUITY AND LIABILITIES
EQUITY
Share capital
14-15
77 556 538,26
77 556 538,26
Invested unrestricted equity fund
73 556 844,86
72 242 609,96
Retained earnings
45 489 921,36
Net profit (loss) for the financial year
173 837 019,53
76 237 102,28
EQUITY, TOTAL
370 440 324,01
226 036 250,50
ACCUMULATED APPROPRIATIONS
16
21 019 383,95
82 475 009,78
PROVISIONS
17
31 225 567,27
17 487 554,57
LIABILITIES
Non-current liabilities
18
Bonds
67 629 243,00
66 149 032,00
Trade payables
19 790 499,18
Liabilities to Group companies
66 674 746,33
66 674 746,33
Non-current liabilities, total
134 303 989,33
152 614 277,51
Current liabilities
19
Loans from credit institutions
381 490 180,00
Advances received
807 740,31
892 626,94
Trade payables
16 717 966,13
18 332 408,96
Liabilities to Group companies
27 959 627,24
1 493 926,81
Other payables
12 025 930,75
11 922 078,00
Accrued expenses and prepaid income
20
53 440 982,01
16 176 445,52
Current liabilities, total
110 952 246,44
430 307 666,23
LIABILITIES, TOTAL
245 256 235,77
582 921 943,74
EQUITY AND LIABILITIES, TOTAL
667 941 511,00
908 920 758,59
81
Stockmann plc
Cash flow statement
EUR
2022
2021
CASH FLOW FROM OPERATING ACTIVITIES
Profit (loss) for the financial year
173 837 019,53
76 237 102,28
Adjustments for:
Depreciation and amortisation according to plan
12 100 924,31
20 932 572,46
Gains of disposals of fixed assets
-185 437 307,11
Other non-cash income and expenses
14 392 734,19
-99 265 308,09
Financial income and expenses
-42 252 335,98
-12 638 312,99
Appropriations
-35 255 625,83
11 800 629,46
Taxes
37 174 545,93
-2 014 028,19
Deferred taxes
9 667 823,73
4 108 813,88
Changes in working capital:
Increase (-) / decrease (+) of current receivables
-1 790 504,94
-6 401 002,39
Increase (-) / decrease (+) of inventories
-9 593 840,51
-3 854 681,68
Increase (+) / decrease (-) of non-interest-bearing liabilities
-16 165 579,23
12 016 301,92
Interest and other financial expenses paid from operating
activities
-4 339 424,28
-16 291 225,65
Interest received from operating activities
2 939 031,70
981 047,54
Taxes
-1 165 363,47
2 014 028,19
CASH FLOW FROM OPERATING ACTIVITIES
-45 887 901,96
-12 374 063,26
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure on tangible and intangible assets
-6 923 098,07
-2 663 824,80
Proceeds from disposal of tangible and intangible assets
390 632 479,61
48 182 874,02
Proceeds from disposal of subsidiary shares
38 419 875,94
Increase (-)/decrease (+) of loan receivables
-92 855,98
-2 513 397,66
Dividends received/return of equity
90,00
2 553 690,00
NET CASH FROM INVESTING ACTIVITIES
422 036 491,50
45 559 341,56
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (+)/ repayments of (-) current liabilities
-381 490 180,00
-48 509 820,00
Loan conversion costs
-400 763,56
NET CASH FROM FINANCING ACTIVITIES
-381 490 180,00
-48 910 583,56
Change in cash in hand and at banks, increase (+) /
decrease (-)
-5 341 590,46
-15 725 305,26
Cash in hand and at banks in the beginning of the financial
year
40 426 083,02
56 151 388,28
Cash in hand and at banks at the end of the financial year
35 084 492,56
40 426 083,02
The proceeds from sales of real estate properties and subsidiary shares were paid directly to the secured creditors of the
restructuring programme. The transactions are presented as proceeds from disposal of tangible assets and subsidiary
shares, and repayment of current liabilities.
82
Notes to the parent company financial statements
1. Accounting principles
The financial statements of Stockmann Oyj have been prepared according to Finnish Accounting Standards (FAS).
Corporate restructuring proceedings
District Court of Helsinki has approved Stockmann plc’s restructuring programme on 9 February 2021. The key content
of the restructuring programme and its effects on financial statements are described as notes to consolidated financial
statements, note 1.3., 1.4. and 4.6.
Transactions in foreign currencies
Transactions in foreign currencies are recorded at the rates prevailing on the transaction date.
Gains and losses on foreign exchange in financial operations are entered as net amounts under other financial income or
other financial expenses.
Revenue
Revenue comprises sales income excluding indirect taxes, discounts granted and foreign exchange rate differences.
Other operating income
The items stated as other operating income are capital gains on the sale of non-current assets connected with business
operations, compensation obtained from the sale of businesses and charges for services rendered to subsidiaries.
The cut of the restructuring debt in 2021 was presented as other operating income.
Other operating income included in 2021 Covid-19 cost support received.
Income taxes
The direct taxes entered in the profit and loss account are the taxes corresponding to net profit for the financial year as
well as taxes payable for prior periods or tax refunds. Deferred tax asset has been recognised for the expenses
deductible in taxation in the future periods.
The profits of Stockmann Plc’s Branch in Estonia have been included in the taxable income of the parent office in
Finland. The profits of the Branch will be income taxable in Estonia, at the time when the profits are distributed to the
parent office in Finland. According to the tax treaty between Estonia and Finland, the income tax which will be paid in
Estonia is deductible from the income tax in Finland under certain conditions. During the reporting period, it was resolved
to distribute profits of EUR 52.4 million from the Branch in Estonia to the parent office in Finland, which resulted in tax
payment of EUR 13.1 million in Estonia. According to the Finnish Tax Administration, EUR 2.8 million of the taxes
payable in Estonia are not deductible from the taxes payable in Finland, because Stockmann Plc did not have sufficient
taxable income in Finland during the fiscal years 2010-2016. Thus, the aforesaid amount would be double tax payment.
After the profit sharing, the untaxed retained earnings of the Branch in Estonia including the profit of the reporting period
are EUR 24.9 million and the calculated income tax in Estonia would be EUR 5.2 million.
Intangible and tangible assets
Tangible and intangible assets are valued according to the original cost less accumulated depreciation according to plan.
The balance sheet values in 2021 included revaluations of land areas and buildings. These revaluations have been
demolished while the sales of real-estate in 2022. The revaluations had been made during the period from 1950 to 1984
and were based on the estimates of real estate valuers at the time. Revaluations were not depreciated.
Depreciation according to plan is based on the original cost and the estimated useful life of intangible and tangible assets
as follows:
Intangible assets
Buildings
20 – 50 years
Machinery and equipment
Modification and renovation expenses of leased premises
Investments in non-current assets
Securities included in non-current assets are valued at acquisition cost or, if their fair value is lower, at this lower value.
Based on impairment testing on the valuation of Lindex there has not been recognised a reason for impairments.
Principles of impairment testing are described as notes to consolidated financial statements.
83
Inventories
In the valuation of inventories, the principle of lowest value has been used, i.e., the inventories have been entered in the
balance sheet at the lowest of acquisition cost or a lower repurchase price or the probable market price. The value of
inventories is determined using the weighted average cost method and it includes all the direct costs of the purchase.
Non-current liabilities
Loans payable are recognised at nominal value. Transaction costs are initially recognised as accruals and amortized
over the life of the instrument. Transaction cost and loan interest are recognised in the income statement as financial
expenses over the life of the instrument.
Based on the restructuring programme half of the hybrid bond was converted to a bond in 2021.
In accordance with the restructuring programme, the unsecured creditors were entitled to convert their receivables under
the payment programme of the restructuring programme that have been confirmed to unsecured debt, by way of set-off,
to senior secured bonds on a euro-for-euro basis. The aggregate principal amount of the bonds validly subscribed for by
the unsecured creditors was EUR 67 629 243.
Interest bearing liabilities included in restructuring debt are as total classified as current liability.
Appropriations
The difference between total and planned depreciation is shown as accumulated appropriations in the balance sheet and
the change during the financial year in the income statement. Appropriations contain also given and received group
contributions.
Provisions
A provision is recognised when the company has a legal or factual obligation as a result of a past event and it is
probable that a payment obligation will be realised and the amount of the obligation can be estimated reliably.
As provision has been recognised conditional debts, which are mainly based on the early termination of the agreements
with landlords. Early terminated agreements have raised claims for damages which are considerable.
2. Other operating income
EUR
2022
2021
Cut of the hybrid bond
55 027 997,12
Cut of the restructuring debt
2 660 303,98
Capital gain of the real estates and shares
185 584 784,11
40 955 157,09
Compensation for services to Group companies
7 222 583,43
6 110 601,00
Covid-19 cost support
1 000 000,00
Merger profit
575 096,37
Other operating income
37 151,37
Total
192 844 518,91
106 329 155,56
3. Wages, salaries and employee benefits expenses
EUR
2022
2021
Salaries and remuneration paid to the CEO
604 315,00
604 252,00
Salaries and remuneration paid to the Board of Directors
410 300,00
433 600,00
Other wages and salaries
36 046 866,24
34 333 525,56
Wages during sick leave
1 754 352,28
1 143 365,43
Pension expenses
4 422 366,02
6 182 173,39
Other employee benefits expenses
1 940 502,37
1 209 433,48
Total
45 178 701,91
43 906 349,86
Personnel, average
1 048
1 060
84
Management pension liabilities
CEO Jari Latvanen’s retirement age is determined in accordance with Finnish employment pension legislation. The
CEO's pension will accrue on the basis of the Employees’ Pensions Act. A separate voluntary pension is not paid. The
retirement age of the Management Team members is 63 or 65, depending on the particular executive agreement in
question. In 2021 two of the Management Team members had voluntary defined contribution pension insurance taken by
the company. The costs of the insurances in 2022 amounted to EUR 303 670 (EUR 160 912 in 2021).
4. Depreciation, amortisation and impairment losses
EUR
2022
2021
Intangible rights
5 497 574,18
6 744 911,43
Buildings and constructions
2 029 393,14
8 867 195,76
Machinery and equipment
3 490 110,12
3 821 710,00
Modification and renovation expenses for leased premises
1 083 846,87
1 498 755,27
Total
12 100 924,31
20 932 572,46
5. Other operating expenses
EUR
2022
2021
Site expenses
41 559 290,89
28 773 810,11
ICT expenses
14 417 157,88
14 468 081,71
Marketing expenses
8 170 983,53
8 120 619,32
Staff leasing expenses
5 109 060,33
3 456 207,27
Goods handling expenses
4 583 260,51
4 437 122,14
Professional services expenses
4 353 232,17
3 881 913,23
Voluntary indirect employee expenses
1 616 227,06
839 922,27
Rental expenses
683 674,94
733 457,31
Credit losses
654 721,48
-86 728,78
Other expenses *)
26 301 830,81
8 880 580,31
Total
107 449 439,60
73 504 984,89
*) 2022 corporate restructuring related expenses EUR 18.1 million.
Auditors' fees
EUR
2022
2021
Auditing/EY
272 613,10
167 000,00
TTL 1.1,2 § services/EY
4 580,00
18 600,00
Auditing/KPMG
132 100,00
Tax advisory /EY
17 576,00
16 460,00
Tax advisory /KPMG
16 388,00
Other services/EY
19 726,00
96 840,00
Total
314 495,10
447 388,00
85
6. Financial income and expenses
EUR
2022
2021
Capital gain of Group company shares
38 304 298,16
Interest income from Group companies
24 947 961,16
22 217 357,10
Dividend from Group companies
2 551 500,00
Other dividend income
90,00
2 190,00
Interest income from parties outside the Group
29 417,09
1 006 649,72
Interest expenses to Group companies
-2 950 418,96
-65 913,23
Interest and other financial expenses to parties outside the
Group
-1 429 657,65
-7 249 897,12
Foreign exchange gains and losses (net)
-16 626 137,37
-5 622 446,35
Total
42 275 552,43
12 839 440,12
7. Appropriations
EUR
2022
2021
Difference between depreciation according to plan and
depreciation in taxation
61 455 625,80
-12 130 629,46
Received Group contributions
330 000,00
Given Group contributions
-26 200 000,00
Total
35 255 625,83
-11 800 629,46
8. Income taxes
EUR
2022
2021
Income tax for period
-37 174 545,93
Taxes for previous financial years
2 014 028,19
Change in deferred taxes
-9 667 823,73
-4 108 813,88
Total
-46 842 369,66
-2 094 785,69
Non-current assets
9. Intangible assets
Intangible rights
EUR
2022
2021
Acquisition cost 1 January
38 127 692,35
40 653 424,39
40 800,00
1 725 786,00
1 224 475,54
-9 870 270,75
-3 750 207,58
Acquisition cost 31 December
30 024 007,60
38 127 692,35
Accumulated amortisation 1 January
28 569 313,30
25 574 609,45
-9 870 270,75
-3 750 207,58
5 497 574,18
6 744 911,43
Accumulated amortisation 31 December
24 196 616,73
28 569 313,30
Book value 31 December
5 827 390,87
9 558 379,05
86
Other intangible assets
EUR
2022
2021
Acquisition cost 1 January
705 768,85
705 768,85
Acquisition cost 31 December
705 768,85
705 768,85
Accumulated amortisation 1 January
564 307,94
493 731,01
Amortisation for the financial year
70 576,77
70 576,93
Accumulated amortisation 31 December
634 884,71
564 307,94
Book value 31 December
70 884,14
141 460,91
Advance payments and construction in progress
EUR
2022
2021
Acquisition cost 1 January
1 896 103,53
1 567 190,38
Increases
3 775 495,75
1 553 388,69
Transfers between items
-1 725 786,00
-1 224 475,54
Acquisition cost 31 December
3 945 813,28
1 896 103,53
Book value 31 December
3 945 813,28
1 896 103,53
Intangible assets, total
9 844 088,29
11 595 943,49
10. Tangible assets
Land and water
EUR
2022
2021
Acquisition cost 1 January
3 316 108,01
6 334 259,12
-3 316 108,01
-3 018 151,11
Acquisition cost 31 December
3 316 108,01
Revaluations 1 January
5 898 350,58
5 898 350,58
-5 898 350,58
Revaluations 31 December
5 898 350,58
Book value 31 December
9 214 458,59
Buildings and constructions
EUR
2022
2021
Acquisition cost 1 January
322 568 904,82
336 804 294,86
Transfers between items
53 946,00
387 035,99
Decreases
-322 622 850,82
-14 622 426,03
Acquisition cost 31 December
322 568 904,82
Accumulated depreciation 1 January
120 621 113,98
122 486 120,22
Accumulated depreciation on decreases
-122 650 507,12
-10 732 202,00
Depreciation for the financial year
2 029 393,14
8 867 195,76
Accumulated depreciation 31 December
120 621 113,98
Revaluations 1 January
24 848 830,34
24 848 830,34
-24 848 830,34
Revaluations 31 December
24 848 830,34
Book value 31 December
226 796 621,18
87
Machinery and equipment
EUR
2022
2021
Acquisition cost 1 January
36 539 814,61
40 298 291,50
Increases
63 463,00
22 686,00
Transfers between items
593 010,16
3 127 264,40
Decreases
-2 053 446,68
-6 908 427,29
Acquisition cost 31 December
35 142 841,09
36 539 814,61
Accumulated depreciation 1 January
14 546 030,21
17 313 405,71
Accumulated depreciation on decreases
-1 610 695,18
-6 589 085,50
Depreciation for the financial year
3 490 110,12
3 821 710,00
Accumulated depreciation 31 December
16 425 445,15
14 546 030,21
Book value 31 December
18 717 395,94
21 993 784,40
Modification and renovation expenses for leased premises
EUR
2022
2021
Acquisition cost 1 January
7 239 266,30
6 185 021,93
Transfers between items
438 076,75
2 009 245,39
Decreases
-666 763,04
-955 001,02
Acquisition cost 31 December
7 010 580,01
7 239 266,30
Accumulated depreciation 1 January
3 636 594,04
3 163 416,72
Accumulated depreciation on decreases
-666 763,04
-955 001,02
Depreciation for the financial year
1 013 270,10
1 428 178,34
Accumulated depreciation 31 December
3 983 101,10
3 636 594,04
Book value 31 December
3 027 478,91
3 602 672,26
Other tangible assets
EUR
2022
2021
Acquisition cost 1 January
54 601,65
54 601,65
Acquisition cost 31 December
54 601,65
54 601,65
Book value 31 December
54 601,65
54 601,65
Advance payments and construction in progress
EUR
2022
2021
Acquisition cost 1 January
138 155,89
5 263 215,54
Increases
2 139 247,69
398 486,13
Transfers between items
-1 085 032,91
-5 523 545,78
Acquisition cost 31 December
1 192 370,67
138 155,89
Book value 31 December
1 192 370,67
138 155,89
Tangible assets, total
22 991 847,17
261 800 293,97
Revaluations included in balance sheet values
EUR
2022
2021
Land and water
5 898 350,58
Buildings
24 848 830,34
Total
30 747 180,92
Revaluations of real-estate properties have been made during the period from 1950 to 1984 and are based on the
estimates of real estate valuers at that time.
Revaluations have been demolished while the sales of real estate in 2022.
88
11. Investments
Investments in Group companies
EUR
2022
2021
Acquisition cost 1 January
286 641 335,62
20 663 112,18
Increases *)
23 410 870,14
280 000 000,00
Impairments **)
-115 577,78
-14 021 776,56
Book value 31 December
309 936 627,98
286 641 335,62
Other shares and participations
EUR
2022
2021
Acquisition cost 1 January
748 761,86
748 761,86
Book value 31 December
748 761,86
748 761,86
Investments, total
310 685 389,84
287 390 097,48
12. Current receivables
Trade receivables
EUR
2022
2021
Interest-bearing trade receivables
40 845,69
33 176,63
Non-interest-bearing trade receivables
2 454 536,81
1 560 051,12
Total
2 495 382,50
1 593 227,75
Receivables from Group companies
EUR
2022
2021
Group contribution receivables
1 710 000,00
1 710 000,00
Trade receivables
5 888 919,71
4 584 789,93
Prepayments and accrued income
206 797,00
30 736,00
Other current receivables
1 000 000,00
Total
8 805 716,71
6 325 525,93
Other receivables
EUR
2022
2021
Other receivables
507 318,28
453 199,05
Total
507 318,28
453 199,05
89
Prepayments and accrued income
EUR
2022
2021
Periodised ICT expenses
2 463 208,25
2 665 366,98
Receivables from suppliers
2 003 984,56
4 671 338,29
Receivable from credit card co-operation
1 900 627,84
1 957 522,24
Periodised indirect employee expenses
1 339 098,00
233 166,00
Periodised restructuring expenses
100 000,00
1 894 458,50
Receivable from trademark co-operation
750 000,00
Periodised rental and leasing expenses
658 296,77
725 971,55
Periodised rental income
222 234,67
Taxes and customs duties receivable
180 350,00
180 350,00
Periodised loan arrangement expenses
137 283,81
175 595,49
Other prepayments and accrued income
572 913,97
224 289,38
Total
9 577 997,87
13 478 058,43
13. Cash in hand and at banks
Cash in hand and at banks comprise bank deposits and cash in hand.
14. Changes in equity
On 7 April 2021 the Stockmann Plc’s Annual General Meeting approved the proposal by the Board of Directors to
combine the A and B share classes without increasing the share capital so that following the combination, the company
has only a single class of a shares, all shares of which carry one (1) vote per share and have equal rights also in all other
respects. In accordance with the AGM resolution, the company’s A and B series were combined as of 12 April 2021 so
that each one (1) A share was entitled to receive 1.1 B shares.
In connection with the combination of the share classes, the Annual General Meeting resolved to remove the provisions
concerning the maximum and minimum amount of share capital, the par value of the shares as well as the different share
classes, their associated voting rights and conversion procedures in the Articles of Association.
In May 2021, Stockmann Plc’s Board of Directors resolved, pursuant to the authorisation granted by the Annual General
Meeting, on a directed share issue of at most 100 000 000 new shares of the company to the unsecured and hybrid bond
creditors of the company’s restructuring debt, carried out in deviation from the shareholders’ pre-emptive subscription
rights. A total of 79 335 175 conversion shares were subscribed for in the share issue, and the total number of
Stockmann shares increased to a total of 154 436 944 shares. The subscription price was EUR 0.9106 per share and, as
a result, approximately EUR 72.2 million of Stockmann's unsecured restructuring debt and hybrid loan debt were
converted into Stockmann shares.
In January 2022, the Company’s Board of Directors decided, in accordance with the Restructuring Programme and
pursuant to the authorisation granted by the Annual General Meeting, to issue 28,139 new shares of the Company in
deviation from the shareholders’ pre-emptive subscription rights to creditors whose previously conditional or disputed
restructuring debts under the Restructuring Programme have been confirmed to their final amounts by 1 December 2021
and approved the subscriptions made in the Share Issue. The subscription price in the Share Issue was EUR 0.9106 per
share, which has been paid by setting off restructuring debt in accordance with the Restructuring Programme.
In March 2022, the Company’s Board of Directors, in accordance with the Restructuring Programme and pursuant to the
authorisation granted by the Annual General Meeting, to issue 284,337 new shares of the Company in deviation from the
shareholders’ pre-emptive subscription rights to a creditor whose previously conditional or disputed restructuring debts
under the Restructuring Programme have been confirmed to their final amounts by 21 January 2022 and approved the
subscription made in the Share Issue. The subscription price in the Share Issue was EUR 0.9106 per share, which has
been paid by setting off restructuring debt in accordance with the Restructuring Programme.
In July 2022, The Company’s Board of Directors decided, in accordance with the Restructuring Programme and pursuant
to the authorisation granted by the Annual General Meeting, to issue 1,130,786 new shares of the Company in deviation
from the shareholders’ pre-emptive subscription rights to creditors whose previously conditional or disputed restructuring
debts under the Restructuring Programme have been confirmed to their final amounts by 14 July 2022 and has approved
the subscriptions made in the Share Issue. The subscription price in the Share Issue was EUR 0.9106 per share, which
has been paid by setting off restructuring debt in accordance with the Restructuring Programme.
As a result of the Share Issues in January, March and July 2022, the total number of shares in the Company has
increased to a total of 155,880,206 shares.
On 31 December 2022 Stockmann Plc’s share capital was EUR 77.6 million. All the shares issued have been fully paid
in.
90
Share capital
EUR
2022
2021
Series A shares 1 January
61 061 736,00
-61 061 736,00
Series A shares 31 December
Series B shares 1 January
77 556 538,26
83 035 630,00
61 061 736,00
-66 540 827,74
Series B shares 31 December
77 556 538,26
77 556 538,26
Share capital, total
77 556 538,26
77 556 538,26
Share premium fund 1 January
186 346 445,72
-186 346 445,72
Share premium fund 31 December
Reserve for invested unrestricted equity 1 January
72 242 609,96
255 735 789,28
-255 735 789,28
1 314 234,90
72 242 609,96
Reserve for invested unrestricted equity 31 December
73 556 844,86
72 242 609,96
Other funds 1 January
43 728 921,17
-43 728 921,17
Other funds 31 December
Retained earnings 1 January
76 237 102,28
-552 351 983,91
-30 747 180,92
485 811 156,17
66 540 827,74
Retained earnings 31 December
45 489 921,36
Net profit (loss) for the financial year
173 837 019,53
76 237 102,28
Equity, total
370 440 324,01
226 036 250,50
Breakdown of distributable funds 31 December
EUR
2022
2021
Funds
73 556 844,86
72 242 609,96
Retained earnings
45 489 921,36
Net profit (loss) for the financial year
173 837 019,53
76 237 102,28
Covid-19 cost support
-1 000 000,00
Total
292 883 785,75
147 479 712,24
During the restructuring programme Stockmann Oyj is not allowed to distribute funds.
91
15. Parent company's shares
shares
2022
2021
Series B shares (1 vote each)
155 880 206
154 436 944
Total
155 880 206
154 436 944
16. Accumulated appropriations
The accumulated appropriations comprise accumulated depreciation difference.
17. Provisions
Other provisions
EUR
2022
2021
Business restructuring cost
69 000,00
15 000,00
Provision on the claims on rental agreements
31 156 567,27
17 472 554,57
as part of company restructuring debt
31 156 567,27
17 472 554,57
Total
31 225 567,27
17 487 554,57
Under the restructuring programme, Stockmann also has restructuring debt that is conditional, the maximum amount or
disputed in respect of which the amount subject to the payment programme will be confirmed later. The administrator of
the restructuring programme has disputed the claims and considered it justified to pay 18 months’ rent for the leases
instead of all the years left in the terminated lease contracts. If the claims would materialise to their maximum amount,
the amount of the Company’s unsecured restructuring rent related debts on claims would increase up to total EUR 61,3
mill.
18. Non-current liabilities
EUR
2022
2021
Bonds
67 629 243,00
66 149 032,00
Trade payables
19 790 499,18
part of company restructuring debt
19 790 499,18
Liabilities to Group companies
66 674 746,33
66 674 746,33
part of company restructuring debt
63 900 534,46
63 900 534,46
Non-current liabilities, total
134 303 989,33
152 614 277,51
92
19. Current liabilities
EUR
2022
2021
Interest-bearing liabilities
381 490 180,00
part of company restructuring debt
381 490 180,00
Non-interest-bearing liabilities
110 952 246,44
48 817 486,23
part of company restructuring debt
154 535,27
2 030 751,95
Current liabilities, total
110 952 246,44
430 307 666,23
Restructuring debt
EUR
2022
2021
Non-Current non-interest-bearing restructuring debt
Unsecured
19 790 499,18
Non-Current non-interest-bearing restructuring debt total
19 790 499,18
Current interest-bearing restructuring debt
Secured
381 490 180,00
Current interest-bearing restructuring debt total
381 490 180,00
Current non-interest-bearing restructuring debt
Unsecured
154 535,27
2 030 751,95
Current non-interest-bearing restructuring debt total
154 535,27
2 030 751,95
Restructuring debt related to provisions
31 156 567,27
17 472 554,01
Restructuring debt to group companies
Trade payable to group companies
17 398,07
17 398,07
Liabilities to group companies
63 883 136,39
63 883 136,39
Restructuring debt to group companies total
63 900 534,46
63 900 534,46
Restructuring debt total
95 211 637,00
484 684 519,60
Liabilities to Group companies
EUR
2022
2021
Trade payables
1 688 539,54
1 199 961,74
Other liabilities, non-interest-bearing
26 200 000,00
Accrued liabilities
71 087,70
293 965,07
Total
27 959 627,24
1 493 926,81
20. Accruals and prepaid income, current
EUR
2022
2021
Accrued income taxes
36 009 182,46
Accrued personnel expenses
10 660 935,38
9 678 716,49
Periodised purchases of stock items
4 022 813,28
3 500 565,35
Reserve for returns and accrued income
1 294 447,00
1 324 223,00
Accrued professional expenses
615 227,18
862 110,52
Accrued site expenses
369 569,00
254 032,46
Accrued interest and other financial expenses
145 246,06
188 561,41
Other accrued expenses and prepaid income
323 561,68
368 236,32
Total
53 440 982,04
16 176 445,55
93
21. Contingent liabilities
Mortgages given as collateral for liabilities and commitments
EUR
2022
2021
Loans from credit institutions
381 490 180,00
Mortgages given
1 501 681 800,00
Book value of the assets
236 126 657,55
Security pledged on behalf of the company, total
1 501 681 800,00
Security pledged on behalf of Group companies
EUR
2022
2021
Rent guarantees
1 604 617,91
2 974 679,09
Other guarantees
67 690,29
7 927 764,39
Total
1 672 308,20
10 902 443,48
Security pledged, total
EUR
2022
2021
Mortgages
1 501 681 800,00
Guarantees
1 672 308,20
10 902 443,48
Total
1 672 308,20
1 512 584 243,48
22. Liability engagements and other commitments
EUR
2022
2021
Rental commitments
402 134 487,00
73 588 689,82
Electricity commitments
944 904,00
301 825,80
Leasing commitments
316 122,55
541 038,50
Total
403 395 513,55
74 431 554,12
Investments in real estate
After Stockmann sold its department store properties, the responsibility for checking the VAT on real estate investments
was transferred to the buyer in 2022.
Pension liabilities
The pension liabilities of the parent company are insured with outside pension insurance companies. The pension
liabilities are fully covered.
94
23. Shares and participations
Group companies
Parent company holdings
Shareholding %
Voting rights %
Stockmann AS, Tallinn
100
100
SIA Stockmann, Riga
100
100
Stockmann Security Services Oy Ab, Helsinki
100
100
Stockmann Sverige AB, Stockholm
100
100
Holdings of subsidiaries
Shareholding %
Voting rights %
TOV Stockmann, Kiev
100
100
AB Lindex, Gothenburg
100
100
AB Lindex holdings of subsidiaries
Lindex Sverige AB, Gothenburg
100
100
Lindex AS, Oslo
100
100
Lindex Oy, Helsinki
100
100
Lindex Oü Eesti, Tallinn
100
100
SIA Lindex Latvia, Riga
100
100
UAB Lindex Lithuania, Vilnius
100
100
Lindex s.r.o., Prague
100
100
AB Espevik, Alingsas
100
100
Lindex H.K. Ltd, Hong Kong
99
99
Shanghai Lindex Consulting Company Ltd, Shanghai
100
100
Lindex Financial Services AB, Gothenburg
100
100
Lindex India Private Ltd, New Delhi
100
100
It will be fit AB, Gothenburg
100
100
Lindex GmbH, Dusseldorf
100
100
Lindex Slovakia s.r.o., Bratislava
100
100
Lindex UK Fashion Ltd, London
100
100
Lindex Commercial (Shanghai) Co.Ltd., Shanghai
100
100
Spacerpad AB, Gothenburg
50,1
50,1
Lindex Fastighet Aktiebolag, Gothenburg
100
100
Bälinge Logistikfastighet Aktiebolag, Gothenburg
100
100
Closely AB, Gothenburg
75
100
Joint operations
Shareholding %
Kiinteistö Oy Tapiolan Säästötammi Fastighets Ab, Espoo
37,8
The shares of joint operations are presented in consolidated accounts so that instead of shares, assets and liabilities of
joint operations are consolidated in proportion to the Group's interest in the companies.
Other companies
Parent company holdings
Shareholding %
Kiinteistö Oy Tapiolan Säästötammi Fastighets Ab, Espoo
37,8
Others
n/a
24. Events after the reporting period
No significant events after the balance sheet date.
95
Board proposal for disposal of net result of the financial year
During the restructuring programme parent company is not allowed to distribute funds.
The Board of Directors proposes that the net result of the financial year 2022 will be carried further in the retained
earnings.
Helsinki, 23 February 2023
Signatures of the Board of Directors and the CEO to the Board report on operations and the financial statements:
BOARD OF DIRECTORS
Roland Neuwald
Stefan Björkman
Timo Karppinen
Anne Kuittinen
Sari Pohjonen
Tracy Stone
CEO
Jari Latvanen
The Auditor’s Note
A report on the audit performed has been issued today.
Helsinki, 23 February 2023
Ernst & Young Oy
Authorised Public Accountant Firm
Terhi Mäkinen
Authorised Public Accountant
96
AUDITOR’S REPORT (Translation of the Finnish original)
To the Annual General Meeting of Stockmann plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Stockmann plc (business identity code 0114162-2) for the year ended
31 December, 2022. The financial statements comprise the consolidated balance sheet, income statement,
statement of comprehensive income, statement of changes in equity, statement of cash flows and notes, including
a summary of significant accounting policies, as well as the parent company’s balance sheet, income statement,
statement of cash flows and notes.
In our opinion
●
its financial performance and its cash flows in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU.
●
financial position in accordance with the laws and regulations governing the preparation of financial
statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good
auditing practice are further described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report.
We are independent of the parent company and of the group companies in accordance with the ethical
requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent company
and group companies are in compliance with laws and regulations applicable in Finland regarding these services,
and we have not provided any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014.
The non-audit services that we have provided have been disclosed in note 2.6 to the
consolidated financial
statements and note 5 to the parent company financial statements
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
We have fulfilled the responsibilities described in the
Auditor’s Responsibilities for the Audit of the Financial
Statements
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
financial statements. The results of our audit procedures, including the procedures performed to address the
matters below, provide the basis for our audit opinion on the accompanying financial statements.
We have also addressed the risk of management override of internal controls. This includes consideration of
whether there was evidence of management bias that represented a risk of material misstatement due to fraud.
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Key Audit Matter
How our audit addressed the Key Audit Matter
Valuation of Goodwill and trademark
We refer to the Group’s accounting policies and the
note 3.2
At the balance sheet date 31 December 2022, the
value of goodwill amounted to EUR 250,9 million
and the trademark to EUR 81,8 million representing
26 % of total assets and 99 % of total equity (2021:
goodwill EUR 271,5 million and trademark EUR
88,7 million representing 25 % of total assets and
134 % of total equity). The goodwill and trademark
are related to the Lindex acquisition.
The valuation of goodwill and trademark was a key
audit matter as:
●
complex and involves judgments;
●
and economical assumptions;
●
significant.
The cash flows of the cash generating units are
based on the value in use. Changes in the
assumptions used can significantly impact the value
in use. The value in use is dependent on several
assumptions such as the revenue growth and
discount rate used. Changes in these assumptions
can lead to an impairment in goodwill or trademark.
Our audit procedures included, among others,
●
us in evaluating the assumptions and
methodologies used by the group including
those related to forecasted revenue and the
weighted average cost of capital used in
discounting the cash flows;
●
headroom by cash generating unit and focused
on whether any reasonably possible change in
assumptions could cause the carrying amount
to exceed its recoverable amount;
●
group with actual outcome and comparing
forecasts to the latest budgets approved by the
board;
●
underlying calculations and benchmarking the
value in use of Lindex with peer company
information;
●
the groups’ disclosures related to
impairment tests in note 3.2 in the financial
statements with presentation requirements in
applicable accounting standards and we
reviewed the information provided on sensitivity
analysis.
Revenue Recognition
We refer to the Group’s accounting policies and the
note 2.2
Revenue is generated from sales of products and
services in retail stores and in online platforms as
well as from sales to franchise stores.
Revenue is recognized upon delivery of the goods
or when the service has been performed.
The group focuses on revenue as a key
performance measure which could create an
incentive for revenue to be recognized before the
control of goods or services has transferred to the
customer. Revenue recognition was a key audit
matter due to the high volume of transactions,
different kind of delivery methods and the
management judgement involved in accounting for
right of return and loyalty bonus.
Revenue recognition was also a significant risk of
material misstatement referred to in EU Regulation
No 537/2014, point (c) of Article 10(2).
To address the risk of material misstatement
regarding revenue recognition our audit procedures
included among others:
●
revenue recognition, including principles
relating to right of return accounting and loyalty
bonuses in relation to applicable accounting
standards;
●
payments received;
●
with data analytics;
●
●
online sales based on delivery lead times; and
●
assessing the Group’s disclosures in respect of
revenues.
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Valuation of inventories
We refer to the Group’s accounting policies and the
note 2.4
.
At the balance sheet date 31 December 2022, the
value of inventory amounted to EUR 174,2 million
representing 14 % of total assets and 52 % of total
equity (2021: EUR 154,8 million representing 11 %
of total assets and 58 % of total equity).
In accordance with the accounting policies the
inventories are valued at the lower of cost or net
realizable value. Inventories are presented net of
impairment loss recognized for obsolete and slow-
moving inventories.
Valuation of inventories was a key audit matter
because the carrying value of inventories is material
to the financial statements and because valuation of
inventories and the level of allowance for obsolete
and slow-moving inventories requires management
judgment.
Our audit procedures included, among others:
●
regarding inventories with applicable accounting
standards;
●
items to latest purchase invoices and to sales
prices;
●
by management with respect to slow moving
and obsolete stock and to the expected sales
and net realizable value;
●
accounting with data analytics and
●
assessing the Group’s disclosures in respect of
inventory.
Sale and lease back of the department store
properties
We refer to the Group’s accounting policies and the
notes 1.5 and 3.5
The Group sold in January 2022 the department
store property in Riga and in April 2022 the
department store property in Helsinki.
The department store properties were leased back
and in connection with the lease back, right of use
assets and lease liabilities were determined.
The sale and lease back transactions resulted in a
gain of EUR 95,4 million.
The sale and lease back transactions have been
considered as a key audit matter because the sale
and lease back transactions had a significant impact
on the group consolidated financial statements.
In addition, the sale and lease back accounting
treatment of the department store properties
requires management judgement.
Our audit procedures included, among others:
●
the group related to the sale and lease back
transactions of the department store properties;
●
assessing the information presented in the
financial statements.
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial
statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as
adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and
regulations governing the preparation of financial statements in Finland and comply with statutory requirements.
The Board of Directors and the Managing Director are also responsible for such internal control as they determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director are responsible for
assessing the parent company’s and the group’s ability to continue as going concern, disclosing, as applicable,
99
matters relating to going concern and using the going concern basis of accounting. The financial statements are
prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company
or the group or cease operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
●
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
●
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the parent company’s or the group’s internal control.
●
estimates and related disclosures made by management.
●
going concern basis of accounting and based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the parent
company’s or the group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause the parent company or the group to cease to continue as a going concern.
●
disclosures, and whether the financial statements represent the underlying transactions and events so
that the financial statements give a true and fair view.
●
business activities within the group to express an opinion on the consolidated financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
100
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the
Annual General Meeting on 7.4.2021, and our appointment represents
a total period of uninterrupted engagement of 2 years.
Other information
The Board of Directors and the Managing Director are responsible for the other information. The other information
comprises the report of the Board of Directors and the information included in the Annual Report, but does not
include the financial statements and our auditor’s report thereon. We have obtained the report of the Board of
Directors prior to the date of this auditor’s report, and the Annual Report is expected to be made available to us
after that date.
Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect
to report of the Board of Directors, our responsibility also includes considering whether the report of the Board of
Directors has been prepared in accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the information in the
financial statements and the report of the Board of Directors has been prepared in accordance with the applicable
laws and regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Helsinki 23.2.2023
Ernst & Young Oy
Authorized Public Accountant Firm
Terhi Mäkinen
Authorized Public Accountant
101
Independent Auditor’s Report on Stockmann Oyj Abp’s ESEF-Consolidated
Financial Statements (Translation of the Finnish original)
To the Board of Directors of Stockmann Oyj Abp
We have performed a reasonable assurance engagement on the iXBRL tagging of the consolidated financial
statements included in the digital files 743700IFQI6W89M1IY95-2022-12-31-fi.zip of Stockmann Oyj Abp for
the financial year 1.1.-31.12.2022 to ensure that the financial statements are marked/tagged with iXBRL in
accordance with the requirements of Article 4 of EU Commission Delegated Regulation (EU) 2018/815
(ESEF RTS).
Responsibilities of the Board of Directors and Managing Director
The Board of Directors and Managing Director are responsible for the preparation of the Report of Board of
Directors and financial statements (ESEF financial statements) that comply with the ESESF RTS. This
responsibility includes:
●
●
using the iXBRL mark ups in accordance with Article 4 of ESEF RTS
●
The Board of Directors and Managing Director are also responsible for such internal control as they
determine is necessary to enable the preparation of ESEF financial statements in accordance with the
requirements of ESEF RTS.
Auditor’s Independence and Quality Control
We are independent of the company in accordance with the ethical requirements that are applicable in
Finland and are relevant to the engagement we have performed, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
The auditor applies International Standard on Quality Control (ISQC) 1 and therefore maintains a
comprehensive quality control system including documented policies and procedures regarding compliance
with ethical requirements, professional standards and applicable legal and regulatory requirements.
Auditor’s Responsibilities
In accordance with the Engagement Letter we will express an opinion on whether the electronic tagging of
the consolidated financial statements complies in all material respects with the Article 4 of ESEF RTS. We
have conducted a reasonable assurance engagement in accordance with International Standard on
Assurance Engagements ISAE 3000.
The engagement includes procedures to obtain evidence on:
●
complies in all material respects with Article 4 of the ESEF RTS
●
consolidated financial statements complies in all material respects with Article 4 of the ESEF RTS
●
The nature, timing and extent of the procedures selected depend on the auditor’s judgement including the
assessment of risk of material departures from requirements sets out in the ESEF RTS, whether due to fraud
or error.
102
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
statement.
Opinion
In our opinion the tagging of the consolidated financial statement included in the ESEF financial statement of
Stockmann Oyj Abp for the year ended 31.12.2022 complies in all material respects with the requirements of
ESEF RTS.
Our audit opinion on the consolidated financial statements of Stockmann Oyj Abp for the year ended
31.12.2022 is included in our Independent Auditor’s Report dated 23.2.2023. In this report, we do not
express an audit opinion any other assurance on the consolidated financial statements.
Helsinki 27.2.2023
Ernst & Young Oy
Authorized Public Accountant Firm
Terhi Mäkinen
Authorized Public Accountant