CONTENTS
Report by the Board of Directors
3
Key figures
17
Shares and share capital
22
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated income statement
24
Consolidated statement of comprehensive income
Consolidated statement of financial position
25
Consolidated cash flow statement
27
Consolidated statement of changes in equity
28
Notes to the consolidated financial statements
29
PARENT COMPANY FINANCIAL STATEMENTS
Parent company income statement
75
Parent company balance sheet
76
Parent company cash flow statement
78
Notes to the parent company
financial statements
79
Board proposal for disposal of distributable
funds and net result of the financial year
89
Auditor’s report
90
Auditor’s ESEF assurance report
94
3
REPORT BY THE BOARD OF DIRECTORS
The Stockmann Group’s consolidated revenue in 2023 was EUR 951.7 (981.7) million. The revenue decreased by
3.1% but increased by 1.6% in local currencies. Gross margin was 58.2% (57.9). The adjusted operating result was
EUR 80.0 million (79.8, and improved significantly in local currencies. Operating result was EUR 76.5 (154.9) million.
The comparison year result was impacted by the capital gain of EUR 95.4 million from selling the real estates in Helsinki
city centre and in Riga and a EUR 15.9 million provision related to the LähiTapiola Keskustakiinteistöt Ky arbitration
decision. Earnings per share were EUR 0.33 (0.65). Adjusted earnings per share were EUR 0.16 (0.24). The Board of
Directors will propose for the Annual General Meeting, that no dividend will be paid for the financial year 2023.
Guidance for 2024:
In 2024, the Stockmann Group expects its revenue to increase by 1-3% in local currencies compared to 2023.
The Group’s adjusted operating result is estimated to be EUR
70-90 million. Foreign exchange rate fluctuations
may have a significant effect on the adjusted operating result.
Market outlook for 2024:
The market environment in 2024 is expected to remain challenging. The macroeconomic situation in Europe remains
uncertain due to the continuing geopolitical instability. High interest rates and inflation are holding back economic growth,
and the retail sector may be affected by lower consumer demand. Forecasts are indicating a stagnant GDP (Gross
Domestic Product) development or slow growth in the company's key markets. Inflation is forecasted to continue
declining from high to targeted levels. The situation may vary between the Group’s markets. Disruptions in supply chains
and international logistics during the year cannot be excluded either.
STRATEGIES AND FINANCIAL TARGETS
The Stockmann Group’s two divisions, Lindex and Stockmann, have their own strategies. The divisions share the view
that customer centricity, an omnichannel approach, and strong brands are key strategic factors in building future growth.
On November 13, 2023, Stockmann Group published updated strategies and new financial targets for the Lindex and
Stockmann divisions.
The Lindex division’s
sustainable and profitable growth. The division’s three strategic must-win areas are to accelerate growth, transform into
a sustainable business, and decouple cost from growth. The Lindex division’s financial targets and outcomes for 2023
and 2022 are presented in the table below.
Financial targets for the Lindex division
2023
2022
3–5% annual local currency revenue growth in the mid-term and reaching an annual revenue
of SEK 10 billion by 2030, %
2.7
10.9
30% digital share of revenue in the mid-term, %
19.0
18.5
15% adjusted operating margin in the long-term, %
14.3
13.6
The Stockmann division’s
life and aims to achieve profitable and sustainable growth. The division’s three strategic must-win areas are to elevate
offering, grow and leverage the loyal customer base, and ensure a seamless omnichannel experience. The Stockmann
division’s financial targets and the outcomes for 2023 and 2022 are presented in the table below.
Financial targets for the Stockmann division
2023
2022
Revenue growth in line with market *) growth in the mid-term, %
-0.6**)
Reaching a positive free cash flow in the mid-term, EUR mill. ***)
-12.0
-20.9
5% adjusted operating margin in the mid-term, %
-2.0
-1.7
*) Stockmann addressable market in Finland, Latvia and Estonia, comprising of fashion, beauty and home categories.
Market growth was 2.7% in 2023 and 7.0% in 2022.
**) The Stockmann division’s revenue was negatively affected by the reduced size of the Stockmann Itis department
store.
***) Free cash flow is calculated as EBITDA - adjustments - lease payments +/- changes in net working capital - capital
expenditure.
The Stockmann Group
The Group aims to reduce the climate emissions from its own operations and its value chain by 42% by 2030 compared
to 2022. Stockmann signed the Science Based Targets initiative (SBTi) in autumn 2021 and submitted its climate target
4
to SBTi in October 2023. The Group expects SBTi to validate its climate target during 2024.
5
STRATEGIC ASSESSMENT
On 25 September 2023, Stockmann plc’s Board of Directors decided to initiate a strategic assessment to crystallise
shareholder value by refocusing the Group's business on Lindex. As part of the strategic assessment, Stockmann plc is
considering a name change to Lindex Group and will investigate strategic alternatives for the Stockmann department
stores business.
The possible name change would better reflect the Lindex division’s role in the Group’s business. Lindex represents over
two thirds of the Stockmann Group’s revenue and over the last years, Lindex has been the main profit contributor within
the Stockmann Group. This possible name change would not impact the Stockmann department stores, which would
continue to operate under the Stockmann brand.
As part of the investigation of strategic alternatives for Stockmann’s department stores business, the company will
evaluate the best environment for developing the business in the future. These options will include increasing
the business’ independence within the Group, considering possible ownership changes or strategic partnerships,
or continuing under the current structure. The strategic assessment will not have any immediate impact on the
Stockmann department stores’ brand or its daily business operations, which will continue with full commitment on
their ordinary course.
Decisions relating to a possible proposal on a name change, which would ultimately be subject to a decision by
Stockmann plc's general meeting, will be made at a later date. Stockmann expects the strategic assessment to be
finalised during 2024. Stockmann will provide an update on the strategic assessment if, and when, appropriate.
OPERATING ENVIRONMENT
The operating environment of the Stockmann Group continued to be challenging throughout the year in 2023.
Geopolitical tensions, high inflation and rising interest rates weakened both consumer confidence and purchasing power.
The development was seen in all markets of the Stockmann Group. However, towards the latter part of the year,
the inflation slowed down and was in some markets getting closer to the target levels. The global easing of supply chain
challenges, reduced input costs in some areas and declining energy costs supported the economies in bringing inflation
down.
The EU Commission's recent Business and Consumer Survey reported a slightly positive trend towards the year-end.
The Economic Sentiment Indicator (ESI) and Employment Expectations Indicator (EEI) improved in the EU area. Retail
trade confidence stabilised in December after a declining trend. Consumer confidence also increased due to improved
assessments of household finances, optimism about the general economic situation, and intentions to make major
purchases. However, there are variations in economic situations and consumer sentiment among different countries.
(Source: The EU Commission’s Business and Consumer Survey.)
In terms of the development of the fashion market, sales in the Swedish fashion market showed a 1.1% increase from
January to December. Although the market development was relatively flat throughout the year and partly even negative,
there was some improvement, particularly during the summer months. (Source: Swedbank Pay & Swedbank
Makroanalys.) In Finland, fashion sales declined by 0.4% in January–December. Despite higher sales at the beginning of
the year, there was a decrease during the second half of the year. (Source: Fashion and Sports Commerce association.)
Throughout the year, the Group was challenged by high inflation, which negatively impacted operating costs.
However, the impact was mitigated by cost-saving measures. Currency fluctuations played a significant role as the
all-time high USD against SEK adversely affected the purchasing prices of Lindex's raw materials and freights.
Furthermore, the weaker SEK and NOK compared to EUR had a substantial impact on the overall financials of
the Group.
REVENUE AND EARNINGS, STOCKMANN GROUP
In January–December,
the Stockmann Group’s revenue decreased to EUR 951.7 (981.7) million but increased in local
currencies by 1.6%. The Lindex division’s revenue decreased by 4.2% and increased by 2.7% in local currencies.
The Stockmann division’s revenue decreased slightly by 0.6%.
The Group’s gross profit declined to EUR 554.2 (568.3) million, which is explained by the currency impact on the Lindex
division’s gross profit, as well as lower sales and gross margin in the Stockmann division.
The Group’s gross margin improved to 58.2% (57.9). Lindex contributed to this improvement by enhancing its gross
margin through improved cost-efficiency in sourcing and supply chain as well as strategic price adjustments, helping to
offset the impact of the more expensive USD. The Stockmann division’s gross margin lowered as a result of the higher
share of price-driven campaigns and clearance sales.
Other operating income decreased to EUR 2.6 (99.6) million as the comparison year included the capital gain of selling
6
real estates in Riga and Helsinki, which amounted to EUR 95.4 million. The capital gain was treated as an item affecting
comparability. The comparison year also included retroactive governmental support of EUR 3.1 million for Lindex and
EUR 0.7 million for the Stockmann division.
Operating costs decreased to EUR 380.1 (409.8) million. The comparison period’s costs included the EUR 15.9 million
provision for the LähiTapiola arbitration decision. Inflation had an impact on the costs in both divisions, coupled with
costs for strategic investments in digitalisation and future growth. However, successful cost-saving actions and on-going
process automation helped to mitigate the cost increases. Additionally, the positive currency impact on the costs of the
Lindex division contributed to these efforts.
The adjusted operating result improved slightly to EUR 80.0 (79.8) million and improved significantly in local currencies.
The Lindex division’s adjusted operating result strengthened significantly in local currencies, driven by higher sales,
improved gross margins and effective cost-efficiency. However, the positive development was negatively impacted by
currency exchange rates. The Stockmann division’s adjusted operating result weakened due to the reduced size of
the Stockmann Itis department store, a higher share of price driven campaigns and clearance sales as well as higher
depreciations for leases. The Stockmann division implemented successful cost-efficiency measures, which mitigated
the decline in adjusted operating result.
The operating result declined to EUR 76.5 (154.9) million. The comparison year’s operating result includes the capital
gain of EUR 95.4 million from the sale of real estate in Riga and Helsinki as well as the EUR 15.9 million provision for
the LähiTapiola arbitration decision.
ITEMS AFFECTING COMPARABILITY (IAC)
EUR million
1–12/
2023
1–12/
2022
Operating result (EBIT)
76.5
154.9
Adjustments to EBIT
Gain on sales of real estate
-95.4
Gain on lease modifications of sale-and-leaseback items
-2.1
Costs for disputed, conditional and maximum restructuring debt
1.1
18.1
Corporate restructuring cost
1.6
1.6
Costs related to transformation of organisation
2.3
0.4
Loss on disposal of subsidiary shares
0.6
Costs related to the war in Ukraine
0.5
Employee insurance refund
-0.3
Adjusted operating result (EBIT)
80.0
79.8
FINANCING AND CASH FLOW
At the end of December, cash and cash equivalents totalled EUR 137.5 (167.9) million.
The Stockmann Group’s full year operating free cash flow excluding the investment in Lindex omnichannel distribution
centre strengthened significantly to EUR 70.8 (39.6) million with improvements in both divisions. The Lindex division’s
operating free cash flow excluding the omnichannel distribution centre investment totalled EUR 86.7 (65.3) million.
This was explained by both stronger sales in local currencies, improved gross margin and reduced inventories.
The Stockmann division also improved its operating free cash flow substantially to EUR -12.0 (-20.9) million, primarily
explained by lower net working capital.
For the full year, the total cash flow was EUR -30.3 (-45.8) million. The cash flow was positively affected by improved
business operations within both profitability and lower inventories, but negatively affected by higher tax payments.
The comparison year was impacted by a repayment of VAT loans of EUR 40 million for Lindex as well as Stockmann
plc’s restructuring process.
Investments affected the full-year cash flow by EUR 65.8 (62.7) million. The key investments were the Lindex division’s
omnichannel distribution centre amounting to EUR 43.0 (38.4) million and digitalisation investments for both the Lindex
and Stockmann divisions.
At the end of December, total inventories were EUR 162.9 (174.2) million. The Lindex division’s inventories decreased,
due to both good inventory management and less goods in transit. The Stockmann division’s inventories remained at
the comparison year level.
At the end of December, the Group had the interest-bearing liability of a non-current senior secured bond of EUR 71.9
7
(67.5) million. The increase in the bond liability is explained by some creditors choosing the bond as a payment of
undisputed restructuring debts. The lease liabilities under the IFRS 16 reporting standard totalled EUR 587.2 (554.8)
million, where the lease liabilities related to the Stockmann division were EUR 329.5 (287.7) million and to the Lindex
division EUR 257.6 (267.1) million. Excluding the IFRS 16 lease liabilities, the interest-bearing net debt was positive at
EUR 65.6 (100.4) million. In the third quarter, the Group signed a loan agreement for a revolving credit facility of EUR 40
million, which has not been used.
The equity ratio was 29.9% (26.2) and net gearing 133.2% (135.4) at the end of December. IFRS 16 lease liabilities has
a significant impact on the equity ratio and net gearing. Excluding IFRS 16 lease liabilities, the equity ratio was 60.6%
(53.4) and net gearing was -12.8% (-22.3).
The Group’s capital employed at the end of December was EUR 1 050.7 (957.9) million and EUR 587.6 (517.1) million
excluding IFRS 16 lease liabilities.
CAPITAL EXPENDITURE
Capital expenditure totalled EUR 65.1 million (62.5) in January–December. Most of the capital expenditure was used for
the Lindex division’s new omnichannel distribution centre (EUR 43.3 million), but also for the Lindex and the Stockmann
divisions’ digitalisation projects and omnichannel development (EUR 21.8 million).
The Lindex division’s new omnichannel distribution centre will be an important enabler for continued growth and
improved 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. Until the fourth quarter of 2023, EUR 82 million of the total investment sum had been
used for the project.
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, Internal Audit and Investor Relations.
LINDEX DIVISION
1–12/
2023
1–12/
2022
Revenue, EUR mill.
633.1
661.1
Gross profit, EUR mill.
414.4
423.7
Gross margin, %
65.4
64.1
Adjusted operating result, EUR mill.
90.3
90.0
Operating result, EUR mill.
89.1
90.3
Capital expenditure, EUR mill.
57.9
55.3
The Lindex division’s revenue decreased to EUR 633.1 (661.1) million, but in local currencies it increased by 2.7% with
growth both in physical stores and digital channels. The digital sales accounted for 19.0% (18.5) of total Lindex sales.
Sales improved in all main markets despite the challenging market situation and lingerie was the best performing
category.
The gross profit declined to EUR 414.4 (423.7) million, but increased in local currencies due to improved sales and a
stronger gross margin. The gross margin improved to 65.4% (64.1) due to improved cost-efficiency in sourcing and
supply chain. Certain adjustments to pricing have been implemented in response to rising procurement costs resulting
from the strengthened USD.
Operating costs decreased to EUR 253.6 (260.1) million explained by the currency effect. In local currencies, inflation
and strategic investments in digitalisation and future growth increased costs, but the raise was partly mitigated by
successful cost saving actions.
The Lindex division’s adjusted operating result strengthened slightly to EUR 90.3 (90.0) million and improved significantly
in local currencies by 6.3%. The key reasons for the improvement were increased sales and gross margin together with
strong cost focus. Lindex’s operating result was EUR 89.1 (90.3) million. The slight decline in the operating result was
related to the costs of organisational changes.
8
Capital expenditure
during the period was EUR 57.9 (55.3) million. It was mainly related to the ongoing construction of
the new omnichannel distribution centre, which is planned to be taken into operation in 2024.
In 2023, Lindex opened 8 new stores and closed 5 stores.
STOCKMANN DIVISION
1–12/
2023
1–12/
2022
Revenue, EUR mill.
318.5
320.6
Gross profit, EUR mill.
139.8
144.6
Gross margin, %
43.9
45.1
Adjusted operating result, EUR mill.
-6.3
-5.4
Operating result, EUR mill.
-5.6
71.2
Capital expenditure, EUR mill.
7.2
7.2
The Stockmann division’s revenue was EUR 318.5 (320.6) million. Revenue in Finland totalled EUR 242.8 (245.5) million
and in the Baltics EUR 75.8 (75.1) million. The digital sales accounted for 12.4% (12.6) of total sales. Excluding the
negative impact of the reduced size of the Stockmann Itis department store, the division would have increased its
revenue. The best performing categories were cosmetics and food while fashion sales remained at the comparison year
level.
The gross profit declined to EUR 139.8 (144.6) million due to lower gross margin. The gross margin decreased to 43.9%
(45.1) explained by the higher share of clearance sales and price-driven campaigns.
The Stockmann division’s operating costs, excluding depreciations, decreased to EUR 119.5 (143.1) million.
The division’s cost saving actions accounted for EUR 7.7 million of the decline, while the rest is explained by the
EUR 15.9 million provision related to the LähiTapiola Keskustakiinteistöt Ky arbitration decision.
The adjusted operating result declined to EUR -6.3 (-5.4) million due to lower sales, an increased share of price-driven
campaigns and clearance sales as well as higher depreciations for leases. However, the division successfully
implemented cost-efficiency measures that mitigated the decline in adjusted operating result. The operating result
weakened to EUR -5.6 (71.2) million. The comparison period’s result included a capital gain of EUR 95.4 million from
selling the real estates in Helsinki and Riga as well as the provision related to LähiTapiola.
Capital expenditure was EUR 7.2 (7.2) million, which is mainly related to the department store renewals in Helsinki and
Turku as well as the concept change in Itis but also to investments in digital growth and omnichannel capabilities.
SHARES AND SHARE CAPITAL
At the end of December, Stockmann had a total of 158 715 555 shares.
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 December, the share capital was EUR 77.6 million and the market capitalisation stood at EUR 460.3 million
(307.1). The price of a STOCKA share was EUR 2.90 (1.97) at the end of December 2023. In January–December,
the highest price of a STOCKA share was 3.03 (3.26) and the lowest price was 1.68 (1.46). A total of 47.4 million shares
were traded on Nasdaq Helsinki in January–December. This corresponds to 30.1% 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 December, Stockmann had 42 328 (44 289) shareholders. Foreign ownership was 24.1%
(23.8).
BUSINESS CONTINUITY, RISKS AND UNCERTAINTIES
The Stockmann Group is exposed to risks that arise from the operating environment, risks related to the company’s own
operations and supply chain as well as financial risks.
Macroeconomic situation
High inflation and interest rates negatively impact the Stockmann Group’s cost structure and customers’ purchasing
power. The effect may also be seen in changing customer behaviour and shifts in demand in different product categories.
The future macroeconomic situation may have an impact on the asset valuation. Interest rate fluctuations may also have
9
an impact on goodwill impairment testing through discount rates.
Exchange rates
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
currencies. Currency fluctuations may have an effect on the financial performance of the Group’s business operations.
The Group is currently only partly hedging the transactional risks due to the corporate restructuring.
Seasonality
The Stockmann Group’s business is affected by normal seasonal fluctuations during the year. The revenue in the
first quarter is typically low and revenue in the second and fourth quarter are typically higher. Fashion accounts for
approximately 80% of the Group’s revenue, and fashion sales are affected by trends and weather conditions. In addition,
the timing of the Crazy Days campaign in the Stockmann division has a significant impact on the revenue and operating
result in the quarters when it is organised.
Supply chain and logistics
In the retail sector, the value chain of products contains many stages and involves risks related to ensuring human and
labour rights, environmental topics, and ethical business conduct. In addition, unexpected issues in the supply chain may
increase costs. As the Group’s supply chain is global,
unexpected logistics problems could increase freight costs and lead times.
Information and cyber security
Professional cybercrime has increased the risk of cyber-attacks, which could cause interruptions in the information
systems as well as affect the privacy of customer or personnel data.
Restructuring programme
The restructuring programme is proceeding according to plan, which means that all of Stockmann’s department store
properties have been sold and all interest-bearing debt has been paid except for a bond of EUR 71.9 million. There are
still disputed claims regarding the termination of lease agreements that must be settled before the restructuring process
can end.
DISPUTES RELATED TO THE RESTRUCTURING PROCESS
All confirmed undisputed debts have been duly paid. There were still three disputed claims left at the end of December
with the total amount of EUR 43.7 million. By end of December 2022, the comparable disputed amount was EUR 61.3
million. The remaining disputed claims are related to the termination of long-term leases of premises, where the creditors
claim payment for all remaining years in the terminated lease contracts. The supervisor of the restructuring programme
has disputed the claims and considered it justified to pay 18 months’ compensation for the leases.
Stockmann has made a provision of EUR 18.0 million for the disputed claims and has ongoing discussions with creditors
and the supervisor of the restructuring programme to solve the disputes. If they are not solved with the creditors and
the Administrator, the disputes will be settled in the District Court. After respective claims have been solved or settled,
the creditors will be entitled to convert their receivable to shares and bonds.
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 supervisor 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 supervisor at the 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.
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 seen as a disputed case again. 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
the Helsinki District Court. In addition, concerning this same amount of compensation, a dispute is in progress between
the supervisor 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. LähiTapiola has applied
to the Helsinki District Court to amend Stockmann's restructuring programme so that the amount of the restructuring
10
debt, based on the arbitration decision, would be confirmed at EUR 19.3 million. Stockmann, Stockmann AS and the
supervisor objected to the application because the claimed amount is still disputed. The District Court and Court of
Appeal have rejected LähiTapiola's application. LähiTapiola has applied for leave to appeal to the Supreme Court.
Nordika II SHQ Oy, the landlord of Stockmann’s former Takomotie office space, has filed a claim with the 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
supervisor and Stockmann as respondents.
Tampereen Seudun Osuuspankki, the second lessor of the Tampere department store, has initiated proceedings at
the Pirkanmaa District Court in which the company demands up to EUR 14.5 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. After the financial
year, Stockmann and Tampereen Seudun Osuuspankki reached a settlement agreement, which ends the disputed
claims between the parties concerning the restructuring programme. More information in the chapter ‘Events after
the financial year.
The company’s Board of Directors decided on 21 June 2023, in accordance with the restructuring programme and
pursuant to the authorisation granted by the Annual General Meeting, to issue 2 835 349 new shares of the company in
deviation from the shareholders’ pre-emptive subscription rights to such creditors of the company whose previously
conditional or disputed restructuring debts under the restructuring programme were confirmed to their final amounts by
24 May 2023. The new shares were registered with the Finnish Trade Register on 22 June 2023.
DISCLOSURE OF NON-FINANCIAL INFORMATION
The Stockmann Group is an international retail group with two divisions: Lindex and Stockmann. Lindex is a global
fashion company with a purpose to empower and inspire women everywhere. It is a market leader in lingerie in the
Nordics and has sustainability as a strategic focus area. Stockmann is a premium multi-brand retailer with department
stores in Finland, Estonia and Latvia. Its purpose is to be a marketplace for a good life. Fashion accounts for some 80%
of the Group’s revenue while the other categories include cosmetics, home and food. The Group has eight Stockmann
department stores and 439 Lindex fashion stores including franchising stores in over 18 countries. Both divisions have
their own online stores and Lindex products are also sold in third-party online stores. Stockmann plc’s shares are listed
on the Nasdaq Helsinki Ltd. in Finland.
Sustainability is embedded in the Stockmann Group’s business plans and strategies. The Lindex and Stockmann
divisions have their own sustainability strategies with climate, circularity and human rights as common themes.
The Lindex division’s sustainability promise is to make a difference for future generations and the Stockmann division is
aiming at resource-wise retail business. The sustainability focus areas for both divisions are identified through materiality
assessments and stakeholder dialogue. Sustainability targets and indicators are integrated into business operations, and
their development is regularly monitored.
In addition to this Disclosure on Non-Financial Information, the Stockmann Group publishes Sustainability Review in
accordance with the Global Reporting Initiative (GRI) standards. The Sustainability Review will be published in week 9 on
the Group’s website year2023.stockmanngroup.com. Lindex’s Sustainability Report will be published at the end of March
on lindex.com and on
www.stockmanngroup.com
.
Key commitments, codes of conduct and policies
The Stockmann Group Code of Conduct forms the foundation for the Group’s operating practices. The Code of Conduct
covers compliance with laws and ethical practices, free competition and consumer rights, employees and working
conditions, the environment, as well as corruption and conflicts of interest. The Code of Conduct is supplemented by
more detailed guidelines and policies, such as the Group’s Anti-corruption Policy and divisions’ policies on environment,
human rights and discrimination. The Group also requires its suppliers and other partners to follow the principles of
the divisions’ Supplier Code of Conducts.
By the end of 2023, 93 (93)% of the Stockmann division’s personnel had completed online training on the Code of
Conduct. Our target is for 100% of the Group’s personnel in all countries to have completed the training.
The Group complies with international and national laws and regulations in its countries of operation. The Group’s
operations are also guided by international agreements 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 Guiding Principles on Business and Human Rights
as well as the International Accord for Health and Safety in the Textile and Garment Industry (previously
the Bangladesh Accord on Fire and Building Safety).
11
Furthermore, the Stockmann Group is committed to the UN Global Compact initiative and with the sustainability
strategies of its divisions, the Group promotes the UN Sustainable Development Goals. The Group is also committed to
the Science Based Targets initiative (SBTi), which sets a clearly defined path to reducing climate emissions in line with
the Paris Agreement.
The environment
Respecting the environment is one of the key sustainability promises for the Stockmann Group. Targets to reduce
greenhouse gas emissions and promote circularity are included in the sustainability strategies of both divisions. In 2023,
the Group continued the work to reduce its climate impact across the value chain and supported the transition towards
circular economy by implementing circular design principles and by testing and scaling circular business models.
In line with its commitment to the Science Based Targets (SBTi) initiative, the Group submitted its climate target for
approval in October 2023 and expects the validation during 2024. The Stockmann Group commits to reduce greenhouse
gas emissions from its own operations and its value chain by 42% by 2030 compared to 2022. The target includes
Forest, Land and Agriculture (FLAG) emissions, which are greenhouse gas (GHG) emissions from land use and land
management related to the Group’s raw materials.
The Stockmann Group is continuously developing its climate roadmap to achieve its target. In 2023, the key measures
included energy efficiency measures throughout the value chain, increasing the use of renewable energy and choosing
transport solutions with less climate impacts. The Group’s greenhouse gas emissions for scopes 1–3 were 261
(296)
ktCO
2
e, of which 21
(12) ktCO
2
e were from the Group’s own operations (scopes 1–2). FLAG emissions account for 15%
of the Group’s total emissions.
The Stockmann Group participates annually in the CDP climate change survey. In 2023, Stockmann’s CDP result was
B- (B-), the same as in the previous three years. Stockmann’s rating is better than the global average (C) and slightly
below the European regional average (B).
Transforming the business towards circularity is a key sustainability theme for the Stockmann Group. In 2023, the Group
continued the transition in both divisions by guiding customers towards sustainable consumption and by optimising in-
house design and supply chain in line with the circular approach.
The Lindex division has set ambitious targets for its recycled and sustainably sourced materials: 100% of Lindex’s
product materials will be recycled or sustainably sourced by 2025 and 70% of all products will include a minimum of 15%
recycled content. At the end of 2023, 78% of the product materials were recycled or sustainably sourced, and 42% of
the products included a minimum of 15% recycled content. In addition, Lindex collaborates with partners such as Södra
Skogsägarna, Infinited Fiber and Rester to scale up recycling of postconsumer textile waste.
The Stockmann division participated in the Circular Design training programme that examined the principles and practical
solutions of circular design. In the Stockmann division’s own-brand garments, 33% of product materials were recycled or
sustainably sourced. Active collaboration and dialogue with suppliers continued to improve supply chain transparency
and traceability of materials, for both own and partners’ brands.
The Stockmann Group’s environmental management is based on continuous improvement. The Stockmann division’s
operations in Finland have ISO 14001 environmental management certificate and its principles have also been adopted
in the Baltic department stores.
Personnel
The Stockmann Group ensures a healthy and empowering working environment, promotes equality and diversity, and
supports the professional growth and wellbeing of its employees. The Group also strengthens ethical working practices in
the supply chain.
People and culture management is based on the Lindex and Stockmann divisions’ people policies, values, strategies and
the Group Code of Conduct. The HR management is monitored through employee surveys, performance appraisal
discussions and other feedback channels. Cooperation also takes place in local personnel committees and the Group’s
employee council.
Both divisions continued to drive diversity, equity and inclusion (DEI) at workplace through awareness trainings.
The Stockmann division also carried out a DEI survey among its employees to increase understanding of the current
situation and needed measures.
Leadership in the Lindex division was further developed by implementing Lindex’s principles on self-leadership and
leadership approach. Employee engagement was strengthened through an online engagement platform.
The Stockmann division continued to implement initiatives in several areas to improve operational and cost efficiency.
At the same time, the division continued to implement its revised customer centric growth strategy and related capability
building. The division continued its Merchant Mindset learning programme and developed the content of its learning
platform. The division’s employer brand was strengthened through a launch of new career website and introduction of
12
candidate listening and feedback processes. New site-specific wellbeing teams also began their work.
2023
2022
Personnel on average*
5 801
5 802
Personnel on average, full-time equivalents (FTE)
4 283
4 332
Personnel 31 Dec
6 062
6 008
1 547
1 619
2 071
2 185
2 444
2 204
Women / men, %
91 / 9
91 / 9
Wages and salaries, EUR mill.
163.5
165.7
Total employee benefit expenses, EUR mill.
212.5
212.1
Human rights and responsible supply chain
The Stockmann Group respects and promotes human rights in accordance with its Code of Conduct. In addition, Lindex
has a more detailed human rights policy. The Group is committed to ensuring that fundamental rights are respected, and
that people are treated with dignity and respect. It implements due diligence as required by the UN Guiding Principles on
Business and Human Rights to identify and prevent any negative human rights impacts caused by or resulting from our
business operations. The Lindex division performs due diligence in its production countries every other year or more
frequently based on current events and stakeholder recommendations.
The Stockmann Group has identified that the most significant human rights risks associated with its business are related
to product supply chains and working conditions. The Stockmann Group is aware of the risk of potential violations of
the Code of Conduct in its production countries, and therefore actively seeks to ensure compliance. The Group supports
and enables improved working conditions through its responsible purchasing practices and aim to build long-term
relationships with key suppliers.
All factories in high-risk countries that manufacture the Group’s own-brand products undergo regular in-house audits by
the Group’s local personnel, as well as third-party amfori BSCI, Sedex or SA8000 audits. All potential deviations are
addressed immediately, and corrective measures are taken. The Group’s purchasing offices have local personnel in
the five main production countries to monitor production quality and compliance with the Code of Conduct. In line with
stakeholder expectations and to ensure transparency, Lindex and Stockmann divisions publish a comprehensive list of
suppliers and factories for their own brands on their websites.
The Lindex division has set goals for promoting fair and decent work in the supply chain. By 2025, Lindex’s suppliers
who stand for 80% of the division’s production, must show total supply chain transparency and a commitment to
improving working conditions and actively work with a living wage programme. In 2023, 100% of Lindex’s top 30
suppliers calculated a living wage and conducted self-assessments. Lindex had also implemented digital wage
payments for 100% of its top 30 suppliers.
All suppliers and business partners supplying to 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 2023 Lindex worked with 104 suppliers and a total of 159 factories, and all of them 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 chose this system because of the embedded focus on gender equality.
All manufacturers of the Stockmann division’s own products have signed the Stockmann Supplier Code of Conduct,
the amfori BSCI Code of Conduct or a similar commitment. The Stockmann division is a member of amfori BSCI, and
therefore is committed to systematically improving the working conditions at its production facilities.
Prevention of corruption and bribery
The Stockmann Group’s policies related to anti-corruption and anti-competitive practices are included in the Group’s
Code of Conduct and are further specified in its anti-corruption policy. The Stockmann Group has zero tolerance towards
all forms of bribery and corruption. The Group’s employees and management are expected to always perform their duties
honestly and with integrity, in the best interests of the company, avoiding any conflicts of interest and complying with
local laws.
The Stockmann Group has a Group-wide whistleblowing channel operated by an external supplier. The channel 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. The whistleblowing service is available at
https://report.whistleb.com/en/Stockmann
. The Stockmann Group’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.
13
All whistleblowing reports and discussions are taken seriously and handled confidentially. All incidents are reported to
Internal Audit and the Director of Legal Affairs. In 2023, 1 (1) incident(s) was reported through the channel. It was
investigated, and appropriate measures were taken. Stockmann was not made aware of any legal cases, proceedings or
decisions concerning corruption, anti-competitive behaviour or anti-trust practices in 2023.
Sustainability risks and risk management
Sustainability risk assessment is included in the Stockmann Group’s strategy process. The Board of Directors and the
Group Management Team regularly assess the risk factors to which the business is exposed and the adequacy of risk
management actions. Risk management is supported by internal control systems and guidelines.
The Stockmann Group’s most significant sustainability risks are related to the supply chains, and concern traceability and
transparency of supply chains, ensuring human and labour rights, and the environmental impacts of production and raw
materials. The identified risks are managed through the divisions’ sustainability strategies.
Corruption and bribery risks associated with the Stockmann Group’s own activities are prevented and managed through
clearly defined approval processes, other internal control processes and personnel training. These risks are especially
related to the supply chain and procurement.
Climate change may pose risks to the Group in terms of changing consumer needs and consumption habits as well as
the cost and availability of raw materials. Climate change may also increase energy and freight costs. In line with its
climate roadmap, the Stockmann Group is reducing its climate impact across its value chain.
The Stockmann Group’s human resource risks relate to the availability of skilled and committed personnel, work safety
and the attractiveness of the Group as an employer. In addition, any legal or illegal strikes in the Group’s value chain and
in its operations may cause business risks. The risks are managed by improving cooperation and the competence and
wellbeing of employees.
EU TAXONOMY -ELIGIBLE AND -ALIGNED ACTIVITIES
EU Taxonomy is the EU's sustainable finance classification system, which defines environmentally sustainable economic
activities. The introduction of the Taxonomy regulation is proceeding in stages, starting with technical criteria for climate
change mitigation and adaptation in the sectors with the greatest climate impact. The Stockmann Group has reported
in line with the EU Taxonomy regulation since 2021 although the Taxonomy does not define criteria specifically for
the Group’s retail business. The Stockmann Group monitors the development of the EU Taxonomy and reports the
data in accordance with the EU Commission’s guidance.
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. 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
continued to reduce its climate impact and disclosed its greenhouse gas emissions for the entire value chain.
Real estate holdings
The EU Taxonomy defines criteria for sustainable financial activity in the real estate business buildings (Activity 7.7
‘Acquisition and ownership of buildings’). The leases of the Stockmann Group’s department stores are treated as right-of-
use assets in the Group’s accounts in accordance with IFRS 16. The amounts of right-of-use assets held by the Group
retains are recorded in capital expenditure and thus included as eligible for the EU Taxonomy assessment.
Assessment of other potential Taxonomy-eligible activities
Another EU Taxonomy category under which the 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 of owned and leased cars is below the Stockmann Group’s definition of
financial materiality.
The Stockmann Group has assessed the eligibility and alignment of its real estate activities with the EU Taxonomy in
terms of turnover, capital expenditure and operating expenses as follows:
14
15
16
17
EVENTS AFTER THE FINANCIAL YEAR
On 25 January 2024, the Stockmann’s Board of Directors decided, in accordance with the Restructuring Programme
and pursuant to the authorization granted by the Annual General Meeting, to issue 307 489 new shares of the company
in deviation from the shareholders’ pre-emptive subscription rights to a creditor of the company whose previously
conditional or disputed restructuring debt under the Restructuring Programme has been confirmed to its final amount by
9 November 2023 and has 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.
The total of 307 489 Conversion Shares subscribed for in the Share Issue were registered in the trade register
maintained by the Finnish Patent and Registration Office on 26 January 2024. Following the registration of the
Conversion Shares, the total number of issued shares in the Company is 159 023 044.
On 25 January 2024, Stockmann announced that it had received and verified one subscription form from the creditor of
the company above whose previously conditional or disputed receivable subject to the payment programme of the
Restructuring Programme has been clarified and the final amounts of such receivable has been confirmed. The
Subsequent Bonds duly subscribed for by such creditor of the company amount to the aggregate principal amount of
EUR 1 120 000. The receivable of the creditor of the company will be converted, by way of set-off, into Subsequent
Bonds. The Subsequent Bonds are settled through the clearance system of Euroclear Finland Ltd and will be recorded
on the book-entry accounts maintained by Euroclear Finland Ltd as soon as practicably possible.
Stockmann also submitted an application for the issued Subsequent Bonds to be admitted to trading on the list of
Nasdaq Helsinki Ltd together with the already trading fungible Bonds under the trading code "STCJ001026".
After the financial year in February, Stockmann and disputed creditor Tampereen Seudun Osuuspankki reached a
settlement agreement, which ends the disputed claims between the parties concerning the restructuring programme.
Execution of the settlement agreement is subject to the court confirming the amendment of the payment programme of
the restructuring programme. Amendment application will be submitted to the Helsinki District Court. After this
agreement, there are still two disputed claims left with the total amount of EUR 29.1 million.
ANNUAL REPORTING 2023
Stockmann Group’s Business Review, Remuneration Report, Corporate Governance Statement and Sustainability
Review for 2023 are published as separate documents at the same time as the Report by the Board of Directors and
Financial Statements. All the reports are available at the company’s website
www.stockmanngroup.com
.
FINANCIAL RELEASES IN 2024
Stockmann Group will publish its financial reports in 2024 as follows:
- 26 April 2024, Interim Report for January–March
- 19 July 2024, Half year Financial Report for January–June
- 25 October 2024, Interim Report for January–September
Helsinki, 22 February 2024
STOCKMANN plc
Board of Directors
18
Key figures
2023
2022
2021
2020
2019
Revenue
EUR mill.
951.7
981.7
899.0
790.7
960.4
Gross profit
EUR mill.
554.2
568.3
527.0
443.7
540.9
Gross margin
%
58.2
57.9
58.6
56.1
56.3
EBITDA
EUR mill.
176.7
258.0
184.9
109.6
153.0
Adjustments to EBITDA
EUR mill.
-3.5
75.1
13.8
-7.3
-15.6
Adjusted EBITDA
EUR mill.
180.2
183.0
171.1
116.9
168.6
Operating result
EUR mill.
76.5
154.9
82.1
-269.6
24.1
Share of revenue
%
8.0
15.8
9.1
-34.1
2.5
Adjustments to operating result
EUR mill.
-3.5
75.1
13.8
-257.3
-15.6
Adjusted operating result
EUR mill.
80.0
79.8
68.3
-12.3
39.8
Net result for the period
EUR mill.
51.7
101.6
47.9
-291.8
-45.6
Adjustments to net result for the period *)
EUR mill.
26.6
64.0
7.9
-255.8
-12.5
Adjusted net result for the period *)
EUR mill.
25.1
37.6
40.0
-36.0
-33.1
Share capital
EUR mill.
77.6
77.6
77.6
144.1
144.1
A share
EUR mill.
61.1
61.1
B share
EUR mill.
77.6
77.6
77.6
83.0
83.0
Return on equity
%
14.2
33.7
20.2
-86.7
-9.3
Return on capital employed
%
8.1
15.7
8.0
-20.1
1.6
Capital employed
EUR mill.
1,004.3
1,005.4
1,059.2
1,237.4
1,529.1
Capital turnover rate
0.9
1.0
0.8
0.6
0.6
Inventories turnover rate
2.4
2.4
2.4
2.6
2.9
Equity ratio
%
29.9
26.2
18.9
14.5
27.8
Net gearing
%
133.2
135.4
212.8
340.7
191.7
Capital expenditure **)
EUR mill.
65.1
62.5
16.9
18.5
33.8
Share of revenue
%
6.8
6.4
1.9
2.3
3.5
Interest-bearing net debt ***)
EUR mill.
521.6
454.4
570.8
702.5
900.2
Interest-bearing net debt / EBITDA
EUR mill.
3.0
1.8
3.1
6.4
5.9
Total assets
EUR mill.
1,310.2
1,282.9
1,416.5
1,425.3
1,690.3
Staff expenses
EUR mill.
212.5
212.1
194.6
181.9
211.1
Personnel, average
persons
5,801
5,802
5,649
5,991
7,002
Average number of employees, converted
to full-time equivalents
persons
4,283
4,332
3,886
3,973
4,891
Revenue per person
EUR
thousands
164.1
169.2
159.1
132.0
137.2
*) 2022 restated due to change in definition of tax adjustments.
**) excluding right-of-use assets
***) 2022 revised with interest-bearing assets.
The definition of adjustments to net result was revised in 2023 to include changes in deferred taxes. The 2022 figures
have been restated accordingly.
Stockmann Group changed its accounting policy 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.
19
Key figures per share
2023
2022
2021
2020*)
2019*)
Earnings per share, undiluted and diluted
EUR
0.33
0.65
0.42
-3.89
-0.69
Adjusted Earnings per share, undiluted and
diluted **)
EUR
0.16
0.24
0.35
-0.48
-0.53
Cash flow from operating activities per share
EUR
0.65
0.35
1.32
2.03
1.42
Equity per share
EUR
2.47
2.15
1.74
2.86
6.52
P/E ratio of shares
A share
-0.3
-3.1
B share
8.8
3.0
5.1
-0.3
-2.9
Share quotation at 31.12.
EUR
A share
1.27
2.26
B share
2.90
1.97
2.16
1.16
2.06
Highest price during the period
EUR
A share
3.59
3.16
B share
3.03
3.26
2.44
3.22
2.74
Lowest price during the period
EUR
A share
0.88
1.90
B share
1.68
1.46
1.07
0.65
1.78
Average price during the period
EUR
A share
1.87
2.41
B share
2.13
2.19
1.61
1.45
2.12
Share turnover
thousands
A share
576
2,102
1,281
B share
47,442
94,830
90,210
30,258
13,127
Share turnover
%
A share
0.5
6.9
4.2
B share
29.9
60.8
79.1
72.9
31.6
Market capitalisation at 31.12.
EUR mill.
460.3
307.1
333.6
86.9
154.5
Number of shares at 31.12.
thousands
158,716
155,880
154,437
72,049
72,049
A share
30,531
30,531
B share
158,716
155,880
154,437
41,518
41,518
Weighted average number of shares, undiluted
thousands
157,379
155,189
114,009
75,102
75,102
Total number of shareholders at 31.12.
42,328
44,289
45,054
43,656
43,394
*) Key figures per share for years 2019-2020 were earlier adjusted for comparison purposes.
**) 2022 restated due to change in definition of tax adjustments.
20
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.
The adjusted operating result (adjusted EBIT) is calculated from the operating result excluding any adjustments related
to acquisitions and disposals, corporate restructuring, restructuring, impairment losses, litigation fees and settlements,
value adjustments to assets, pension fund rebates, losses related to the war in Ukraine as well as disputed, conditional
or maximum restructuring debt.
The adjusted net result is calculated from the net profit/loss for the period excluding any adjustments after the tax impact
related to acquisitions and disposals, corporate restructuring, restructuring, impairment losses, litigation fees and
settlements, value adjustments to assets, pension fund rebates, losses related to the war in Ukraine as well as disputed,
conditional or maximum restructuring debt. The tax impact is calculated on the transaction level and it includes changes
in deferred taxes. Moreover, the adjustments to net result include tax income and expenses resulting from settlements of
tax disputes.
EUR mill.
2023
2022
2021
2020
2019
EBITDA
176.7
258.0
184.9
109.6
153.0
Adjustments to EBITDA
Gain on sale of real estate
-95.4
-21.7
0.4
Gain on lease modifications of sale-and-
leaseback items
-2.1
Costs for disputed, conditional and maximum
restructuring debt
1.1
18.1
Corporate restructuring cost
1.6
1.6
2.0
5.3
Costs related to transformation of organisation
2.3
0.4
0.2
2.0
14.2
Income and costs related to termination of lease
agreements
8.7
1.0
Loss on disposal of subsidiary shares
0.6
Costs related to the war in Ukraine
0.5
Employee insurance refund
-0.3
-3.0
Adjustments total
3.5
-75.1
-13.8
7.3
15.6
Adjusted EBITDA
180.2
183.0
171.1
116.9
168.6
Operating result (EBIT)
76.5
154.9
82.1
-269.6
24.1
Adjustments to operating result (EBIT)
Goodwill impairment
250.0
Gain on sale of real estate
-95.4
-21.7
0.4
Gain on lease modifications of sale-and-
leaseback items
-2.1
Costs for disputed, conditional and maximum
restructuring debt
1.1
18.1
Corporate restructuring cost
1.6
1.6
2.0
5.3
Costs related to transformation of organisation
2.3
0.4
0.2
2.0
14.2
Income and costs related to termination of lease
agreements
8.7
1.0
Loss on disposal of subsidiary shares
0.6
Costs related to the war in Ukraine
0.5
Employee insurance refund
-0.3
-3.0
Adjustments total
3.5
-75.1
-13.8
257.3
15.6
Adjusted operating result (EBIT)
80.0
79.8
68.3
-12.3
39.8
21
EUR mill.
2023
2022
2021
2020
2019
Net result for the period
51.7
101.6
47.9
-291.8
-45.6
Adjustments to net profit/loss for the period
Goodwill impairment
250.0
Gain on sale of real estate
-95.4
-21.7
0.4
Gain on lease modifications of sale-and-
leaseback items
-2.1
Costs for disputed, conditional and maximum
restructuring debt
1.1
18.1
Corporate restructuring cost
1.6
1.6
2.0
5.3
Costs related to transformation of organisation
2.3
0.4
0.2
2.0
14.2
Income and costs related to termination of lease
agreements
8.7
1.0
Loss on disposal of subsidiary shares
0.6
Costs related to the war in Ukraine
0.5
Employee insurance refund
-0.3
-3.0
Income taxes
-30.1
23.6
5.9
-1.5
-3.2
Adjustments total
-26.6
-51.5
-7.9
255.8
12.4
Adjusted net result for the period
25.1
50.2
40.0
-36.0
-33.1
22
Definition of key figures
Performance measures according to IFRS
Earnings per share,
undiluted and diluted
(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 taxes
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
Free cash flow
EBITDA – items affecting comparability – lease payments +/- changes in net working
capital – capital expenditure
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 excluding 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
23
Shares and share capital
Stockmann plc has a single class of shares, all shares of which shall carry one (1) vote per share and have equal rights
also in other respects. 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 2023 was EUR 77 556 538 and number of shares was 158 715 555.
The number of registered shareholders was 42 328 (44 289 shareholders on 31 December 2022).
The company’s market capitalisation on 31 December 2023 was EUR 460.3 million (EUR 307.1 million on 31 December
2022).
Number of shares, 31 December 2023
Number
Shareholders %
Percentage of shares %
Percentage of votes %
1-100
26,465
62.5
0.6
0.6
101-1000
11,979
28.3
2.7
2.7
1001-10000
3,366
8.0
6.1
6.1
10001-100000
442
1.0
8.0
8.0
100001-1000000
62
0.1
10.2
10.2
1000001-
14
0.0
72.3
72.3
Total
42,328
100
100
100
Ownership structure, 31 December 2023
Number
Shareholders %
Percentage of shares %
Percentage of votes %
Households
41,158
97.2
19.0
19.0
Private and public
corporations
778
1.8
31.4
31.4
Nominee registrations (incl.
foreign shareholders)
187
0.4
24.1
24.1
Foundations and
associations
173
0.4
21.9
21.9
Financial and insurance
companies
32
0.1
3.6
3.6
Total
42,328
100
100
100
24
Major shareholders, 31 December 2023
Percentages of
shares %
Percentages of
shares %
1
Nordic Retail Partners Jv Ky
15.1
15.1
2
Varma Mutual Pension Insurance Company
8.4
8.4
3
Society of Swedish Literature in Finland
7.3
7.3
4
Etola Group
5.0
5.0
5
Hc Holding Oy Ab
4.1
4.1
6
Niemistö Kari Pertti Henrik
3.2
3.2
7
Samfundet Folkhälsan i Svenska Finland
1.7
1.7
8
eQ Nordic Small Cap Mutual Fund
1.6
1.6
9
Ilmarinen Mutual Pension Insurance Company
1.2
1.2
10
Jenny and Antti Wihuri Foundation
0.9
0.9
11
Sijoitusrahasto Eq Eurooppa Pienyhtiö
0.8
0.8
12
Kaloniemi Markku Petteri
0.5
0.5
13
Lahitapiola Keskustakiinteistot Ky
0.5
0.5
14
LähiTapiola Mutual Life Insurance Company
0.5
0.5
15
Mandatum Life Insurance Company Ltd.
0.5
0.5
16
Wilhelm och Else Stockmanns Stiftelse
0.4
0.4
17
Säästöpankki Small Cap Mutual Fund
0.4
0.4
18
Anmiil Oy
0.3
0.3
19
Helene och Walter Grönqvists Stiftelse
0.3
0.3
20
Proprius Partners Micro Finland (non-Ucits)
0.3
0.3
Other
47.0
47.0
from which Nominee registered shares
23.8
23.8
Total
100.0
100.0
25
Consolidated Financial Statements
Consolidated Income Statement
EUR mill.
Note
1.1.-31.12.2023
1.1.-31.12.2022
REVENUE
2.2
Other operating income
2.2
Materials and services
2.3
-397.5
-413.4
Employee benefit expenses
2.5, 5.5,
5.6
-212.5
-212.1
Depreciation, amortisation and impairment losses
3.1
-100.2
-103.2
Other operating expenses
2.6
-167.6
-197.7
Total expenses
-877.8
-926.4
OPERATING PROFIT/LOSS
2.1
Financial income
4.1
Financial expenses
4.1
-35.0
-28.3
Total financial income and expenses
-29.9
-25.7
PROFIT/LOSS BEFORE TAX
Income taxes
2.7
-27.5
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.-31.12.2023
1.1.-31.12.2022
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
Exchange differences on translating foreign operations, net of tax
2.7, 4.12
-33.3
Cash flow hedges, before tax
-0.8
-2.2
Cash flow hedges, net of tax
2.7, 4.12
-0.8
-2.2
Other comprehensive income for the period, net of tax
-35.6
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Total comprehensive income attributable to:
Equity holders of the parent company
26
Consolidated Statement of Financial Position
EUR mill.
Note
31.12.2023
31.12.2022
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
Land and water
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
ASSETS, TOTAL
27
Consolidated Statement of Financial Position
EUR mill.
Note
31.12.2023
31.12.2022
EQUITY AND LIABILITIES
EQUITY
Share capital
Invested unrestricted equity fund
Other funds
-1.6
-1.0
Translation reserve
-17.3
-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
4.5, 4.9,
4.10, 5.3
NON-CURRENT LIABILITIES, TOTAL
CURRENT LIABILITIES
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, TOTAL
EQUITY AND LIABILITIES, TOTAL
28
Consolidated Cash Flow Statement
EUR mill.
Note
1.1.-31.12.2023
1.1.-31.12.2022
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
-1.3
-95.2
Interest and other financial expenses
Interest income
-5.1
-2.6
Income taxes
-5.0
Other adjustments
Working capital changes:
Increase (-) /decrease (+) in inventories
-28.3
Increase (-) / decrease (+) in trade and other current receivables
-1.2
Increase (+) / decrease (-) in current liabilities
-7.1
-50.5
Interest expenses paid
-33.3
-29.0
Interest received from operating activities
Income taxes paid from operating activities
-49.7
-17.9
Net cash from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of tangible and intangible assets
Purchase of tangible and intangible assets
-65.4
-62.7
Security deposit
-0.1
-0.1
Investments in subsidiary shares
-0.2
Other investments
-0.2
Net cash used in investing activities
-65.9
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of current liabilities
-381.5
Payment of lease liabilities
-66.3
-73.8
Net cash used in financing activities
-66.3
-455.2
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS
-30.0
-33.9
Cash and cash equivalents at the beginning of the period
Net increase/decrease in cash and cash equivalents
-30.0
-33.9
Effects of exchange rate fluctuations on cash held
-0.3
-11.9
Cash and cash equivalents at the end of the period
4.4
In 2022 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 the sale of tangible assets and repayment of current liabilities.
29
Consolidated Statement of Changes in Equity
EUR mill.
Share capital
Reserve for un
-
restricted
equity
Hedging reserve
Other reserves
Translation differences
Retained
earnings
Equity attributable to
shareholders total
Total
EQUITY 1.1.2023
-1.1
-18.9
Profit/loss for the period
Exchange differences on translating foreign
operations *)
Cash flow hedges *)
-0.8
-0.8
-0.8
Total comprehensive income for the period,
net of tax
-0.8
Share issue to creditors for unsecured
restructuring debt
Share-based payments **)
Other changes
-0.1
Other changes in equity total
EQUITY 31.12.2023
-1.8
-17.3
*) Notes 2.7, 4.12
**) Note 5.6
EUR mill.
Share capital
Reserve for un
-
restricted
equity
Hedging reserve
Other reserves
Translation differences
Retained earnings
Equity attributable to
shareholders total
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
**) Note 5.6
30
Notes to the consolidated financial statements
1
Basis of preparation ................................................................ ................................................................ .................. 32
1.1
Corporate information ................................................................ ................................................................ ...... 32
1.2
General ................................................................ ................................................................ ............................ 32
1.3
New and amended standards and interpretations ........................................................................................... 32
1.4
Corporate restructuring programme ................................................................ ................................................. 33
1.5
Transactions resulting from the corporate restructuring programme ............................................................... 33
1.6
Accounting policies requiring management’s judgement and key sources of estimation uncertainty .............. 34
1.7
War in Ukraine ................................................................ ................................................................ ................. 34
1.8
Business continuity ................................................................ ................................................................ .......... 35
1.9
Principles of consolidation ................................................................................................ ............................... 35
1.10
Items denominated in foreign currency ................................................................ ............................................ 36
2
Key numbers ................................................................................................ ............................................................ 37
2.1
Segment information ................................................................ ................................................................ ........ 37
2.2
Operating income ................................................................................................ ............................................ 39
2.3
Gross margin ................................................................................................................................ ................... 42
2.4
Inventories ................................................................ ................................................................ ....................... 42
2.5
Employee benefits ................................................................................................................................ ........... 43
2.6
Other operating expenses ................................................................ ............................................................... 43
2.7
Income taxes ................................................................................................ ................................................... 45
2.8
Deferred tax assets and deferred tax liabilities ................................................................ ................................ 46
3
Intangible and tangible assets and leasing arrangements ................................................................ ........................ 50
3.1
Depreciation, amortisation and impairment losses .......................................................................................... 50
3.2
Goodwill and other intangible assets ............................................................................................................... 50
3.3
Property, plant and equipment ................................................................ ......................................................... 54
3.4
Investment property ................................................................ ................................................................ ......... 56
3.5
Leases ................................................................ ................................................................ ............................. 56
4
Capital structure ................................................................................................ ....................................................... 60
4.1
Financial income and expenses................................................................ ....................................................... 60
4.2
Financial instruments ................................................................ ................................................................ ....... 60
4.3
Current receivables ................................................................ ................................................................ .......... 61
4.4
Cash and cash equivalents ................................................................ .............................................................. 61
4.5
Non-current liabilities ................................................................................................ ....................................... 62
31
4.6
Current liabilities ................................................................................................................................ .............. 62
4.7
Reconciliation of liabilities arising from financing activities .............................................................................. 64
4.8
Financial risk management ................................................................ .............................................................. 64
4.9
Derivative contracts ................................................................................................ ......................................... 70
4.10
Financial assets and liabilities by measurement category and hierarchical classification of fair values ........... 71
4.11
Financial instruments subject to netting arrangements ................................................................ .................... 72
4.12
Shareholders’ equity ................................................................ ................................................................ ........ 72
4.13
Earnings per share ................................................................................................ .......................................... 74
5
Other notes ................................................................ ................................................................ ............................... 75
5.1
Group companies ................................................................................................ ............................................ 75
5.2
Joint arrangements ................................................................ ................................................................ .......... 75
5.3
Provisions ................................................................ ................................................................ ........................ 76
5.4
Contingent liabilities ................................................................ ................................................................ ......... 78
5.5
Related party disclosures ................................................................ ................................................................ 78
5.6
Share-based incentives ................................................................................................ ................................... 80
5.7
Climate-related matters ................................................................ ................................................................ ... 82
5.8
EU Taxonomy Key Performance Indicators ................................................................ ..................................... 83
5.9
Events after the reporting period ................................................................ ...................................................... 84
32
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 2023. 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 voluntarily issues a financial review in pdf format, which does not fulfil 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 22 February 2024.
1.3 New and amended standards and interpretations
On 1 January 2023, the Stockmann Group adopted the following amendments to the accounting standards issued by the
IASB and endorsed by the EU:
• Definition of Accounting Estimates – Amendments to IAS 8
• Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12
• International Tax Reform—Pillar Two Model Rules – Amendments to IAS 12
The amendments did not have a material impact on the Stockmann Group’s result, financial position, or presentation of
financial statements.
Stockmann Group has not carried out early adoption of any new and amended standards and interpretations that have
33
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.
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 71.9 million. There are
still disputed claims regarding the termination of lease agreements that must be settled before the restructuring process
can end.
The Company’s Board of Directors decided on 21 June 2023, in accordance with the restructuring programme and
pursuant to the authorisation granted by the Annual General Meeting, to issue 2,835,349 new shares of the Company in
deviation from the shareholders’ pre-emptive subscription rights to such creditors of the Company whose previously
conditional or disputed restructuring debts under the restructuring programme had been confirmed to their final amounts
by 24 May 2023. It also 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 2,835,349 shares to
a total of 158,715,555 shares.
On 21 June 2023, the Company announced that it had received and verified two 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 4,393,381. The receivables
of the entitled persons have been converted, by way of set-off, into subsequent bonds.
Under the restructuring programme, Stockmann plc has restructuring debt that is disputed, conditional or the maximum
amount 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. The conversion to shares will take place in accordance with the terms as stated in the chapter
14.5.2. of the restructuring programme with a subscription price of 0.9106 euro per share. The conversion to bonds will
take place according to the terms as stated in the chapter 14.5.4 of the restructuring programme on a euro-for-euro
basis.
Note 4.6 presents an itemisation of the restructuring debts and Note 4.8 presents the maturities of all the Group’s debts
on 31 December 2023.
1.5
Transactions resulting from the corporate restructuring programme
Stockmann plc has duly paid all confirmed undisputed external restructuring debt, but still has disputed claims and
undisputed conditional or maximum restructuring debt. During the reporting period, the confirmed undisputed
restructuring debt has been settled with conversion to Company’s shares (EUR 2.6 million), conversion to bonds (EUR
4.4 million) and cash payment of EUR 5.7 million.
At the end of the reporting period, the amount of the disputed claims was EUR 43.7 million. The claims are mainly related
34
to the termination of the long-term lease agreements 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 all the years left in the
terminated lease contracts. The claims will be settled in the District Court. The amount of confirmed undisputed
restructuring debt was EUR 1.4 million. Stockmann plc has decreased the provision for disputed claims from EUR 30.8
million to EUR 18.0 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 25.8 million, is
disclosed as a contingent liability.
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 could potentially 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 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 future macroeconomic situation may have an impact on the Group’s
valuation of the assets. The management and the Board of Directors regularly assess the operational and strategic risks
associated with the current situation.
The management considers climate-related matters, where appropriate. The assessment includes possible impacts on
the Group due to physical and transition risks. The management believes its business model and products will still be
viable in the future low-carbon economy, but climate-related matters increase the uncertainty in estimates and
assumptions related to some items in the financial statements. Even though climate-related risks might not currently
have a significant impact on measurement, the Group is closely monitoring relevant changes and developments, such as
climate-related legislation and changes in customer behaviour.
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 the management’s best knowledge on the Financial Statements date. On 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. Stockmann also discontinued selling merchandise to the Russian partner Debruss. The impact of the war on
Stockmann Group is limited.
35
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 impact 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. There are still disputed claims regarding the termination of lease
agreements that must be settled before the restructuring process can end.
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 its business, Stockmann Group’s revenues are divided to a 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
value at the date of acquisition. Goodwill is recognised as the amount by which the combined total of the consideration
transferred by 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
36
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
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 currencies 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 from 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 on the date of the
financial statements. The exchange rate difference from translating the income statement and other comprehensive
income at the average rate and the statement of financial position on the date of the financial statements 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.
37
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 the
management’s assessment of the profitability of the segments is based on the 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 439 stores in 18 countries and online sales 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 eight department
stores in three 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
2023
2022
Lindex
633.1
661.1
Stockmann
318.5
320.6
Group total
951.7
981.7
Operating profit/loss
2023
2022
Lindex
89.1
90.3
Stockmann
-5.6
71.2
Unallocated
-7.0
-6.7
Group total
76.5
154.9
Financial income
5.1
2.6
Financial expenses
-35.0
-28.3
Consolidated profit/loss before taxes
46.6
129.2
Depreciation, amortisation and impairment losses
2023
2022
Lindex
-72.2
-76.8
Stockmann
-28.0
-26.4
Group total
-100.2
-103.2
Includes depreciation of right-of-use assets
Capital expenditure
2023
2022
Lindex
113.4
154.6
Stockmann
61.6
129.9
Group, total
175.0
284.5
38
Includes investments in right-of-use assets
Assets
2023
2022
Lindex
935.7
935.0
Stockmann
374.1
344.8
Unallocated
0.4
3.1
Group, total
1,310.2
1,282.9
39
2.1.2
Information on market areas
In addition to Finland, the Group operates in three geographical regions: Sweden, Norway as well as the Baltics and
other countries.
EUR mill.
Revenue
2023
2022
Finland
322.0
321.1
Sweden*)
332.1
354.3
Norway
126.7
139.1
Baltics and other countries
170.8
167.3
Group total
951.7
981.7
Finland, %
33.8 %
32.7 %
International operations, %
66.2 %
67.3 %
Operating profit/loss
2023
2022
Finland
-14.0
50.9
Sweden*)
75.7
66.6
Norway
4.7
4.5
Baltics and other countries
10.2
32.8
Group total
76.5
154.9
Non-current assets
2023
2022
Finland
252.2
219.1
Sweden*)
587.8
556.5
Norway
43.7
46.5
Baltics and other countries
48.4
44.3
Group total
932.1
866.4
Finland, %
27.1 %
25.3 %
International operations, %
72.9 %
74.7 %
*) Includes the sales of goods and services to the franchising partners and third parties.
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 a store or the 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 a 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 the customer loyalty scheme the sales adjustment
items include customer loyalty award points. The amount corresponding to the estimated stand-alone selling price of
40
unused bonus points accumulated by customers is recognised as a deduction from revenue and short-term contract
liability. The liability is recognised in the same financial period as the related revenue. When a customer uses
accumulated points as payment in a store, the value of the points used is recognised as revenue and a 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 as 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 the actual revenue of the tenants.
41
2.2.1.1 Revenue
EUR mill.
2023
2022
Merchandise revenue
922.9
952.8
Rental income and service charges
28.8
28.9
Total
951.7
981.7
2.2.1.2 Disaggregated revenue information
1.1.-31.12.2023, EUR mill.
Lindex
Stockmann
Total
Revenue streams
Merchandise revenue
633.1
289.7
922.9
Rental income and service charges
28.8
28.8
Total
633.1
318.5
951.7
Market areas
Finland
79.3
242.8
322.0
Sweden
332.1
332.1
Norway
126.7
126.7
Baltics and other countries
95.1
75.8
170.8
Total
633.1
318.5
951.7
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
Baltics and other countries
92.2
75.1
167.3
Total
661.1
320.6
981.7
2.2.1.3 Contract balances
EUR mill.
2023
2022
Contract assets
0.7
0.7
Contract liabilities
6.2
5.6
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. In the previous period, the gain on sale-and-leaseback of the
department store properties deducted with the cost of sales was recognised as other operating income.
Grants from governments or other similar public entities that become receivable as compensation for expenses already
incurred are recognised as other operating income during 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.
EUR mill.
2023
2022
Gains on sales of non-current assets
2.1
95.5
COVID-19 support received
0.0
3.8
Refunds of health insurance premiums from years 2004-2008 in
Sweden
0.3
Electricity subsidies for companies
0.5
Total
2.6
99.6
2.3 Gross margin
EUR mill.
2023
2022
Revenue
951.7
981.7
Materials and services
397.5
413.4
Gross profit
554.2
568.3
Gross margin, % of revenue
58.2%
57.9%
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 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.
2023
2022
Materials and consumables
162.9
174.2
Total
162.9
174.2
The value of inventories has been written down by EUR 7.6 (7.2) million for obsolete assets.
43
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.
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. During the reporting period, the Group had no defined
benefit pension plans.
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 liability are recognised in the income statement.
EUR mill.
2023
2022
Wages and salaries
163.5
165.7
Share-based payments
0.8
0.1
Pension expenses, defined contribution plans
14.5
13.4
Other employee benefits expenses
33.8
32.9
Total
212.5
212.1
Information on the 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.
2023
2022
Site expenses
55.6
59.9
Marketing expenses
32.6
36.6
Goods handling expenses
24.7
27.0
ICT expenses
20.1
20.8
44
Professional services
8.3
9.2
Leased workforce
6.5
6.9
Bank and cash calculation expenses
5.3
5.0
Voluntary social security expenses
3.5
4.3
Credit losses
0.1
0.8
Other expenses *)
11.0
27.1
Total
167.6
197.7
*) 2022 corporate restructuring related expenses EUR 18.1 million.
Fees to the auditors
EUR mill.
2023
2022
Auditing/EY
0.6
0.5
Auditing/others
0.1
0.0
Tax advisory/EY
0.0
0.1
Other services/EY
0.1
0.1
Total
0.7
0.7
45
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, 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 cases when 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.
The Stockmann Group adopted International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12) upon their
release on 23 May 2023. The amendments provided a temporary mandatory exception to the requirements of IAS 12
under which a company does not recognise or disclose information about deferred tax assets and liabilities related to the
proposed OECD/G20 BEPS Pillar Two model rules and they were effective immediately. In addition, the amendments
provided requirements for new disclosures about the Pillar Two exposure. The mandatory exception applies
retrospectively.
EUR mill.
2023
2022
Income taxes for the financial period
-12.9
-50.5
Income taxes from previous financial periods
29.1
2.1
Change in deferred tax liability/assets
-11.1
20.9
Total
5.0
-27.5
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.
2023
2022
Profit before taxes
46.6
129.2
Income taxes at current tax rate
-9.3
-25.8
Income taxes from previous financial periods
29.1
2.1
46
Previous periods' confirmed losses
0.0
18.4
Tax -exempt income
0.2
1.0
Differing tax rates of foreign subsidiaries
-0.2
-0.5
Non-deductible expenses
-6.8
-3.2
Previous periods' confirmed losses for which deferred tax assets has
been booked
-12.4
Effect of deferred taxes not recognised
-1.0
-4.2
Changes in tax rates
-1.0
Deferred tax on results from previous financial periods
-5.9
Other taxes *)
-2.8
Income taxes in the income statement
5.0
-27.5
*) Other taxes consists of 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 made a decision in September 2022, in which it overturned the previous court
decisions and approved Stockmann’s appeal and confirmed that Stockmann Sverige AB was entitled to a deduction of
the interest expenses 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 during the years 2017–2019. Both decisions became legally valid after the
Supreme Administrative Court in Sweden decided on 27 January 2023 that it would not grant a leave to appeal to the
Swedish Tax Agency on the decision made by the Administrative Court of Appeal. As a consequence of the legally valid
decisions, Stockmann Sverige AB’s tax liability and income taxes have decreased by approx. EUR 30 million during the
period and no tax liability for the years 2013–2019 remains.
The Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates.
The legislation will be effective for the Group’s financial year beginning on 1 January 2024. The Group is in scope of the
enacted or substantively enacted legislation and has performed an assessment of the Group’s potential exposure to
Pillar Two income taxes. The assessment is based on the most recent tax filings, country-by-country reporting and
financial statements for the constituent entities in the Group. Based on the assessment, the Pillar Two effective tax rates
in most of the jurisdictions in which the Group operates are above 15%. However, there are a limited number of
jurisdictions where the transitional safe harbour relief does not apply. The Group does not expect a material exposure to
Pillar Two income taxes in those jurisdictions.
2.8
Deferred tax assets and deferred tax liabilities
Changes in deferred tax assets
Changes in deferred tax assets, EUR mill.
1.1.2023
Recognised in
income
statement
Translation
difference
31.12.2023
Difference between carrying amounts and tax bases of property, plant
and equipment
1.4
0.0
1.4
Lease liability
105.4
5.8
0.0
111.1
Other temporary differences
7.9
-2.7
-0.2
5.1
Deferred tax assets
114.7
3.1
-0.2
117.6
Netting of deferred taxes
-83.7
-87.3
Deferred tax assets, net
31.0
30.3
47
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
64.7
45.1
-4.4
105.4
Other temporary differences
5.2
2.9
-0.1
7.9
Deferred tax assets
83.8
35.5
-4.6
114.7
Netting of deferred taxes
-60.0
-83.7
Deferred tax assets, net
23.8
31.0
48
Changes in deferred tax liabilities
Changes in deferred tax liabilities, EUR mill.
1.1.2023
Recognised in
income statement
Translation difference
Liabilities related to
assets classified as
held for sale
31.12.2023
Cumulative depreciation differences
14.7
3.6
0.2
18.4
Difference between carrying amount and tax bases of prop., plant and
equip.
4.3
-0.0
0.0
4.3
Difference between carrying amounts and tax bases of investment
property
Measurement at fair value of intangible and tangible assets
13.6
0.0
13.7
Measurement at fair value of investment property
Unrealised exchange rate difference on the non-current foreign
currency loan
Right-of-use assets
83.7
3.8
-0.2
87.4
Other temporary differences
7.7
6.9
-0.0
14.6
Deferred tax liabilities
124.0
14.3
0.0
138.3
Netting of deferred taxes
-83.7
-87.3
Deferred tax liabilities, net
40.3
51.0
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
Difference between carrying amounts and tax bases of investment
property
Measurement at fair value of intangible and tangible assets
14.8
-1.2
13.6
Measurement at fair value of investment property
Unrealised exchange rate difference on the non-current foreign
currency loan
Right-of-use assets
60.0
27.9
-4.1
83.7
Other temporary differences
7.7
-2.9
0.0
2.9
7.7
Deferred tax liabilities
100.6
14.6
-6.5
15.3
124.0
Netting of deferred taxes
-60.0
-83.7
Deferred tax liabilities, net
40.6
40.3
The companies belonging to the group have tax losses of 77.7 million euros, which can be deducted if taxable income is
generated in the coming years. EUR 30.1 million of the tax losses can be used until 2033, and EUR 47.6 million can be
carried forward indefinitely.
No deferred tax assets have been recognised for the losses. The group records a deferred tax asset to the extent it is
probable that taxable profit is available to offset losses in the coming years or that it is possible to use them elsewhere in
the group.
In accordance with IAS 12 paragraph 52 A, deferred tax liabilities have not been recorded on the accumulated
49
distributable earnings of EUR 20.3 million (18.1) of the Estonian and Latvian subsidiaries.
At the end of the reporting period, the Stockmann Group recorded a deferred tax liability of EUR 5.9 million for the
undistributed accumulated distributable earnings of Stockmann Plc’s branch in Estonia. Currently, the taxes in Estonia
for the potential future profit sharing from the branch would not be deductible from the taxes payable in Finland.
50
3
Intangible and tangible assets and leasing arrangements
3.1
Depreciation, amortisation and impairment losses
EUR mill.
2023
2022
Intangible assets
10.5
11.3
Machinery and equipment
10.5
12.0
Modification and renovation expenses for leased premises
1.2
1.2
Right of use assets
78.0
78.7
Depreciation and amortisation, total
100.2
103.2
Depreciation, amortisation and impairment losses, total
100.2
103.2
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 provide 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.
51
Intangible assets, EUR mill. 2023
Goodwill
Trademark
Intangible rights
Other intangible assets
Advance payments and
construction in progress
Intangible assets, total
Acquisition cost 1.1.
632.7
82.0
94.2
4.1
4.2
817.2
Translation difference +/-
1.4
0.2
0.4
-0.1
-0.0
2.0
Increases during the period
10.3
0.1
1.8
12.2
Decreases during the period
-0.9
-6.7
-0.7
-0.0
-8.3
Transfers between items during the period
5.3
-5.3
0.0
Acquisition cost 31.12.
633.3
82.2
103.5
3.3
0.7
823.1
Accumulated amortisation 1.1.
-381.8
-0.3
-67.4
-3.4
-452.8
Translation difference +/-
-0.9
-0.0
-0.3
0.0
-1.1
Amortisation on reductions during the period
6.7
0.7
7.4
Amortisation and impairment losses during the period
-10.2
-0.3
-10.5
Accumulated amortisation 31.12.
-382.7
-0.3
-71.2
-3.0
-457.1
Carrying amount 1.1.
250.9
81.8
26.8
0.7
4.2
364.4
Carrying amount 31.12.
250.6
81.9
32.4
0.4
0.7
366.0
Intangible assets, EUR mill. 2022
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
Impairment testing
Accounting policies
The carrying amounts of asset items are regularly assessed to identify any potential impairment indicators. When such
indications arise, the recoverable amount of the asset is determined. Goodwill and the brand are allocated to cash-
generating units and undergo annual testing for impairment. If the value of an asset item or cash-generating unit on the
statement of financial position exceeds its recoverable amount, an impairment loss is recognised, and these losses are
reflected in the income statement.
For impairment losses on a cash-generating unit, the reduction is first allocated to the goodwill of the unit. Subsequently,
any remaining impairment loss is allocated proportionally to reduce the unit’s other asset items.
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 the value in use, the estimated future cash flows are discounted to their present value using
discount rates reflecting the average capital costs before taxes of the relevant cash generating unit. Climate-related risks,
both physical and transitional, are constantly monitored when measuring the recoverable amount. While the Group
believes its operations are not currently significantly exposed to physical risk, the value-in-use may be impacted by
transition risks, such as climate-related legislation, regulations and changes in demand for the Group’s products.
Impairment losses on property, plant and equipment, as well as other intangible assets (excluding goodwill), can be
reversed if there is a change in the estimates used to determine the recoverable amount. However, any reversal is
limited to the carrying amount of the asset if no impairment loss had been recognised in previous years.
Under IFRS 8, the Stockmann Group’s reportable segments are fashion chain Lindex and Stockmann for the department
store business, which are both considered as cash-generating units. The assets for these segments are tested for
52
impairment either during the preparation of the financial statements or when there are indications that assets may be
impaired.
Since 2019, Lindex has consistently achieved an annual revenue growth of approximately 4%, predominantly attributed
to its digital expansion efforts. The strategic plan is to maintain this growth momentum in the upcoming years, with
financial targets set at 3-5% yearly growth in the mid-term, aiming to reach SEK 10 billion in the long-term. Additionally,
the digital share is projected to increase from 19% in 2023 to 30% in the mid-term, indicating a substantial focus on
digital advancement.
To enhance both growth and profitability, Lindex will implement a new fully automated logistics center in 2024. This
strategic move is designed to bolster digital sales and explore new sales channels.
Regarding financial performance, the adjusted operating profit is expected to reach 15% in the long-term, while
approximately maintaining the existing levels in the mid-term. This dual focus on sustained growth and profitability
reflects Lindex’s commitment to a balanced and sustainable business strategy. The implementation of the new logistics
centre is anticipated to play a pivotal role in achieving these targets, providing a robust infrastructure for digital expansion
and diversification into new channels.
Despite the impact of inflation on consumer confidence in recent years, Lindex has predominantly grown internationally
acquiring new customers and revenue. While lower consumer confidence is anticipated to affect the retail market in the
coming years, Lindex aims to mitigate this impact, drawing from its experience in navigating similar challenges in the
past.
The Group has concluded that no single climate-related assumption is a key assumption for the 2023 test of goodwill.
Lindex has incorporated its expectations for the changing consumer needs and consumption habits, expected cost
increases due to stricter recycling requirements and more sustainably sourced materials as well as higher energy and
freight cost due to climate change in the cash-flow forecasts when assessing value-in-use amounts.
As of 31 December 2023, there are no indications for impairment. The goodwill of EUR 250.6 million is allocated to the
Lindex segment, and the Lindex trademark, valued at EUR 81.9 million, is entirely allocated to the Lindex segment. The
Lindex brand is considered to have an indefinite useful life due to high brand awareness. With a 70-year history, the
Group plans to continue utilising the brand both in existing markets and by introducing it to new markets through 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, future cash flows have been forecasted based on the organisation's strategy and financial
targets, and also considering potential climate related risks. Cash flows have been forecasted with a conservative
approach. These forecasts have received approval from the management team. This conservative methodology ensures
that financial projections are grounded in a realistic assessment, taking into account potential challenges and
uncertainties. The approval from management affirms the validity and careful consideration embedded in the forecasts
as the organisation navigates the dynamic business landscape.
Main variables used in the value-in-use calculation are:
53
1.
Revenue growth.
The forecasted revenue growth for Lindex is based on an estimation of sales expansion in
both physical stores and online platforms, covering a five-year period. Over the last four years, the average
yearly revenue growth rate has stood at approximately 4%. However, to adopt a more conservative stance, the
management has opted for a slightly lower growth rate, coupled with a terminal growth rate of 2.0%. These
revenue forecasts take into consideration a range of factors, including shifts in the economy, insights from
market research, expansion initiatives in physical stores, online channels and collaboration with third-party
platforms. A significant catalyst for growth is anticipated with the operationalisation of Lindex’s fully automated
logistics center by the end of 2024. This facility is expected to provide robust support for growth, particularly in
the realm of online channels. The strategic integration of these variables reflects a prudent approach by
management to ensure a realistic and attainable projection of revenue growth for the coming years.
2.
Gross margins and operating margins.
margins and operating margins. This improvement is attributed to various strategic actions implemented across
the supply chain, assortments, strategic pricing, cost efficiency measures, and digitalisation initiatives. Forecasts
for Lindex's gross margin and operating margin percentages extend over a 5-year period. The gross margin was
65.4% in 2023, and the adjusted operating margin was 14.3% in the same year.
To provide a conservative outlook, the management anticipates that factors such as increases in raw material
prices, a shift towards sustainable sourcing and changes in the sales mix may gradually decrease profitability
from the current level over the forecast period, being somewhat lower in the terminal period. The lower starting
margin, combined with an increased inflation, is planned to be effectively mitigated by continuously streamlining
operations through automation and digitalisation. This ensures that the long-term goal of achieving a 15%
adjusted operating result remains unchanged.
3.
, 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 and cost of debt and debt-to-equity ratio, which corresponds to the
capital structure in the retail industry. Lease liabilities have been taken into account in the calculation of the
discount rate and correspondingly the right-of-use assets are included in the value of assets.
The management has determined the 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 11.9% (11.2% in
2022).
Sensitivity in determining the recoverable amount
In the impairment testing the recoverable amount of Lindex is significantly 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 of 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:
-
reflecting the sales value of the terminal period,
-
also reflecting to the Gross Margin per cent value of the terminal period,
-
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
2023
54
5.6%
8.9%
5.2%
Based on the impairment testing carried out, there is headroom of more than EUR 300 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.
Straight-line depreciation is recognised on property, plant and equipment in accordance with each item’s useful life.
55
The depreciation periods for property, plant and equipment are:
●
●
●
●
The Group reviews the estimated residual values and expected useful lives of property, plant and equipment annually
and adjusts them prospectively, if appropriate. The review includes climate-related considerations, including physical and
transition risks. Especially, the Group determines if the climate-related legislation and regulations might impact either the
useful life or residual values of the assets. At balance sheet date the climate-related considerations had no impact on the
useful life or valuation of the assets.
Property, plant and equipment, EUR mill. 2023
Land and water
Machinery and equipment
Modification and renovation
expenses for leased premises
Right
-
of
-
use assets
Advance payments and
construction in progress
Property, plant and
equipment,
total
Acquisition cost 1.1.
244.0
9.4
636.7
37.1
927.1
Translation difference +/-
0.0
-2.9
1.8
1.5
0.4
Increases during the period
0.2
8.5
0.0
109.9
44.1
162.6
Decreases during the period
-4.0
-1.5
-32.6
-38.2
Transfers between items during the period
3.8
0.9
-4.8
-0.0
Acquisition cost 31.12.
0.2
249.3
8.8
715.7
77.9
1,051.9
Accumulated depreciation 1.1.
-206.4
-5.0
-217.5
-428.9
Translation difference +/-
2.9
-1.8
1.2
Depreciation on reductions during the period
4.0
1.5
22.1
27.5
Depreciation and impairment losses during the period
-10.5
-1.2
-78.0
-89.7
Accumulated depreciation 31.12.
-210.0
-4.6
-275.2
-489.8
Carrying amount 1.1.
37.6
4.4
419.2
37.1
498.2
Carrying amount 31.12.
0.2
39.3
4.2
440.5
77.9
562.1
Property, plant and equipment, EUR mill. 2022
Acquisition cost 1.1.
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.
244.0
9.4
636.7
37.1
927.1
Accumulated depreciation 1.1.
-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
-12.0
-1.2
-78.7
-91.9
Accumulated depreciation 31.12.
-206.4
-5.0
-217.5
-428.9
Carrying amount 1.1.
40.6
4.8
296.6
1.2
343.2
Carrying amount 31.12.
37.6
4.4
419.2
37.1
498.2
In 2023 and 2022 advance payments for property, plant and equipment and construction in progress relate mainly to the
ongoing construction of the new omnichannel distribution center in Lindex.
56
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 the income statement.
The Tapiolan Säästötammi property in Espoo, of which Stockmann owns 37.8%, was classified as an investment
property in accordance with IAS 40 on 31 December 2023.
EUR mill.
2023
2022
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 until 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 have not been
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 instead. 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 it is reasonably certain that the option to terminate will be exercised.
The lease liability is later measured at the 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 the index or if there is a change in
the estimate of the amount expected to be payable under the residual value guarantee or if there is a change in 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 recorded in profit or
57
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 that the option will be exercised. In the Stockmann Group, Lindex uses a
scoring system based on the operating profit to determine if prolongation of the original rental period is included in the
lease term. Operating profit is measured as a percentage of 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, and 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.
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 the 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.
Right-of use assets
2023, EUR mill.
Buildings
Machinery and
equipment
Total
Acquisition cost 1.1.
635.4
1.3
636.7
Translation difference +/-
1.8
0.0
1.8
Increases during the period
109.0
0.8
109.9
Decreases during the period
-31.9
-0.7
-32.6
Acquisition cost 31.12.
714.3
1.4
715.7
Accumulated depreciation and impairment losses 1.1.
-216.7
-0.8
-217.5
Translation difference +/-
-1.8
0.0
-1.8
Depreciation on reductions during the period
21.4
0.7
22.1
Depreciation, amortisation and impairment losses during
the period
-77.6
-0.4
-78.0
Accumulated depreciation and impairment losses 31.12.
-274.6
-0.6
-275.2
Carrying amount 1.1.
418.7
0.5
419.2
Carrying amount 31.12.
439.7
0.9
440.5
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
58
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
Increases of right-of use assets are mainly due to extensions to the contracts and price increases. Decreases mainly
relate to changes in terms of lease agreements for business premises.
59
Carrying amount 31.12. by operating segments
EUR mill.
2023
2022
Lindex
236.4
252.0
Stockmann
204.1
167.2
Total
440.5
419.2
Leases recognised in profit and loss
EUR mill.
2023
2022
Interest expenses on lease liabilities
-32.1
-24.7
Expenses relating to leases of low-value assets
-0.6
-0.1
Expense relating to variable lease payments not included in lease liabilities
-4.8
-5.7
Total
-37.6
-30.5
Total cash outflow for leases in 2023 was EUR 98.4 million (98.4).
Group as lessor
Accounting policies
When the Group acts as a lessor, for each lease it is determined at the lease inception whether it is a finance lease or an
operating lease. A lease is a finance lease if substantially all of the risks and rewards incidental to ownership of the
underlying asset are transferred to the lessee, otherwise it is an operating lease. All leases in which the Stockmann
Group acts as a lessor on 31 December 2023 and 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.
60
4 Capital structure
4.1
Financial income and expenses
Financial income
EUR mill.
2023
2022
Interest income on bank deposits and other investments
3.5
1.3
Other financial income
1.6
1.3
Total
5.1
2.6
Financial expenses
EUR mill.
2023
2022
Interest expenses on financial liabilities measured at amortised cost
-1.5
-2.8
Interest expenses from lease contracts
-32.1
-24.7
Foreign exchange differences
-1.4
-0.7
Total
-35.0
-28.3
EUR mill.
2023
2022
Financial income and expenses, total
-29.9
-25.7
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. 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 the 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 which 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
61
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. The realised foreign exchange rate gain on the hedge of a net
investment in a foreign operations and internal loans are included in the 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 the effectiveness of the hedge. 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 are as defined in IFRS 9.
4.3
Current receivables
EUR mill.
2023
2022
Non-interest-bearing trade receivables
14.5
15.1
Receivables based on derivative contracts
0.0
0.1
Other receivables
1.2
0.7
Prepayments and accrued income
26.3
27.3
Income tax receivables
5.3
0.2
Current receivables, total
47.3
43.5
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.
2023
2022
Prepaid rents
13.8
15.0
Merchandise prepayments
4.6
5.2
Periodised ICT expenses
2.9
2.5
Receivable from credit card co-operation
1.8
1.9
Periodised indirect employee expenses
1.2
1.3
Periodised restructuring expenses
0.1
Others
1.9
1.4
Total
26.3
27.3
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.
62
EUR mill.
2023
2022
Cash and cash equivalents
137.5
167.9
Total
137.5
167.9
Restricted cash on 31 December 2023 EUR 0.6 million (0.6).
4.5
Non-current liabilities
EUR mill.
Carrying amount 2023
Carrying amount 2022
Bond issues
72.0
67.6
Periodised loan arrangement expenses
-0.1
-0.1
Lease liabilities
505.6
477.5
Other non-interest bearing liabilities
0.3
0.7
Total
577.9
545.7
of which interest-bearing
577.6
545.0
The carrying amount of bond issues and other liabilities has 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 are 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. On 31 December 2022, the
receivables which had been converted to subsequent bonds amounted to EUR 67.5 million.
In June 2023, the Company announced that it had received and verified two 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 aggregate principal amount by
which the entitled persons were entitled to subscribe for subsequent bonds amounted to EUR 4.4 million. The
receivables of the entitled persons were converted, by way of set-off, into subsequent bonds. After the conversion, the
subsequent bonds amount to EUR 71.9 million.
During the reporting period, the Company entered into agreement according to which EUR 1.1 million of its current
restructuring debt will be converted into subsequent bonds by way of set-off. See Note 5.9.
The bonds are presented as non-current interest-bearing financing liabilities in the Consolidated Statement of Financial
Position.
4.6
Current liabilities
EUR mill.
Carrying amount 2023
Carrying amount 2022
Lease liabilities
81.6
77.3
Trade payables
63.9
67.0
Other current liabilities
33.2
32.5
Accruals and prepaid income
79.4
78.5
Derivative contract liabilities
1.9
1.2
Income tax liability
11.7
73.7
Current provisions
18.0
31.2
Total
289.8
361.3
of which interest-bearing
81.6
77.3
63
Restructuring debt
EUR mill.
31.12.2023
31.12.2022
Current non-interest-bearing restructuring debt, unsecured
1.4
0.2
Restructuring debt total
1.4
0.2
Restructuring debt related to current provisions
18.0
31.2
Provisions related to restructuring debt *)
18.0
31.2
Total
19.4
31.3
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.
2023
2022
Personnel expenses
40.7
41.4
Periodised purchases
16.0
11.7
Customer loyalty programme MORE
6.2
5.6
Reserve for returns and periodisation of sales
4.3
2.9
Derivative liabilities
1.9
1.2
Other accruals and prepaid income
10.4
15.5
Total
79.4
78.5
64
4.7
Reconciliation of liabilities arising from financing activities
EUR mill.
1.1.2023
Cash
flows
from liabilities
Non
-
cash
changes from
liabilities
Non
-
cash
changes from
loans
31.12.2023
Changes in
leases
The effect of
changes in
foreign
exchange rates
Non-current liabilities, interest-
bearing
67.5
4.4
71.9
Lease liabilities
554.8
-66.3
98.4
0.3
587.2
Total liabilities from
financing activities
622.3
-66.3
98.4
0.3
4.4
659.1
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
-21.3
554.8
Total liabilities from
financing activities
784.7
-455.2
312.7
-21.3
1.5
622.3
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 in more detail below.
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. The Group Treasury, which reports to the
Chief Financial Officer of Stockmann plc, manages financial exposures and executes hedging strategies at Group level.
The 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.
65
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
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 2023 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 2023, non-euro sales accounted for 52 % of the Group’s entire
sales (2022: 54 %). Purchases with a transaction risk made up 48 % of the Group's purchases (2022: 56 %). In addition,
the Group has purchases in foreign currency without a transaction risk, mainly local purchases in Sweden. In 2023 these
purchases accounted for 4 %of the Group’s total purchases (2022: 4 %).
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 six months. The hedging period is generally a maximum of six 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. The Stockmann division operates mainly in its 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 six months of 2024. 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 usually 4-6 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 2023.
Foreign exchange derivatives hedging cash flows
EUR Mill.
2023
2022
USD
45.2
45.9
SEK
-29.3
-18.1
NOK
-12.1
-16.2
EUR
-5.5
-12.5
Sensitivity Analysis, cash flow hedges, effect on equity after tax
2023, EUR Mill.
USD
SEK
NOK
Change + 10 %
-3.3
-0.4
0.9
Change - 10 %
4.0
0.5
-1.1
2022, EUR Mill.
USD
SEK
NOK
Change + 10 %
-3.3
-0.9
1.2
Change - 10 %
4.1
1.1
-1.4
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 72 % of the Stockmann Group’s
estimated net USD flows for the coming six months.
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. The 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%.
66
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
2023, EUR Mill.
SEK
GBP
NOK
CZK
USD
Receivables
5.2
1.2
30.5
14.2
4.2
Trade payables and other current liabilities
-29.2
-17.2
-18.8
Foreign currency exposure in the balance sheet
-24.0
1.2
13.3
14.2
-14.6
Foreign exchange derivatives hedging balance sheet items
14.7
Foreign currency loans hedging the net investment
Net position in the balance sheet
-24.0
1.2
13.3
14.2
0.1
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
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
2023, EUR Mill.
SEK
GBP
NOK
CZK
USD
Change + 10 %
1.8
-0.1
-1.0
-1.0
-0.3
Change - 10 %
-2.1
0.1
1.2
1.2
0.3
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
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 considered.
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 zero 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 on
translation difference. At the end of 2023 the translation risk was not hedged since Stockmann plc didn’t have any
hedging facilities.
The following table shows how a 10% change in 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 euros.
67
Sensitivity Analysis, effect on equity
2023, EUR Mill.
SEK
Change + 10 %
-57.6
Change - 10 %
70.4
2022, EUR Mill.
SEK
Change + 10 %
-52.7
Change - 10 %
64.4
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 2023.
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 2023:
Interest rate adjustment, period, EUR mill
< 12 months
1–3 years
3–5 years
Total
Bond Issues
72.0
72.0
Total
0.0
72.0
0.0
72.0
Cash and bank receivables
-137.5
-137.5
Total
-137.5
72.0
0.0
-65.5
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
Electricity price risk
Stockmann Group normally has electricity price commitments to reduce the price risk affecting future electricity
procurements. In accordance with the financial policy, the degree of commitments of future electricity prices is 50 % for
years 2024-2025. As both divisions are having energy price commitments for the main part of their electricity
consumption, Stockmann Group does not expect an increase in electricity costs for 2024, and therefore electricity cost
would not have high impact on the Group’s net result in 2024 as it had in the net results in previous years.
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 a 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 the years 2022-2028.
According to the restructuring programme, Stockmann sold and leased back the real estate properties of the Helsinki,
Tallinn and Riga department stores in 2021-2022. Funds received from these sales were primarily used for repayment of
secured restructuring debt and undisputed unsecured restructuring debt.
68
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.
In July 2023, Stockmann signed for a committed secured revolving credit facility of EUR 40 million, which will mature in
July 2028. The credit facility has not been used as of 31 December 2023.
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 a possible need to take seasonal working capital and financing for a
significant investment for Lindex’s new Omnichannel Distribution Centre. The investment is EUR 110 million and it will be
ready in 2024.
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 137.5 million (EUR 167.9 million) in cash assets.
Liquid assets and unused committed credit facilities
EUR Mill.
2023
2022
Cash and cash equivalents
137.5
167.9
Credit facility
40.0
Total
177.5
167.9
Cash flows based on agreements in financial liabilities, including financing costs, on 31
December 2023
EUR Mill.
Carrying
amount
2024
2025
2026
2027
2028-
Total
Current restructuring debts
1.4
-1.4
-1.4
Restructuring debts total
1.4
-1.4
0.0
0.0
0.0
0.0
-1.4
Non-current bond (5-y bullet)
71.9
-0.1
-0.1
-72.1
-72.2
Current trade payables and other
current liabilities
95.7
-95.7
-95.7
Non-current lease liabilities
505.6
-96.1
-86.2
-77.5
-419.3
-679.1
Current lease liabilities
81.6
-100.1
-100.1
Lease liabilities, total
587.2
-100.1
-96.1
-86.2
-77.5
-419.3
-779.2
Total
756.3
-197.3
-96.2
-158.3
-77.5
-419.3
-948.6
Currency derivatives
1.9
Assets
41.6
41.6
Liabilities
-43.4
-43.4
Total
1.9
-1.8
0.0
0.0
0.0
0.0
-1.8
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 and in June 2023 with 4.4 mill.
euros. 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.
69
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.
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 2023, 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 number 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 have been written off.
Ageing of trade and lease receivables
31.12.2023
EUR mill.
Gross carrying amount
Loss allowance
Trade receivables not due
12.6
0.0
Trade receivables fallen due in 1–30 days
0.8
-0.0
Trade receivables fallen due in 31–60 days
0.2
0.0
Trade receivables fallen due in 61–90 days
0.2
0.0
Trade receivables fallen due in 91–120 days
0.2
0.0
Trade receivables fallen due in over 120 days
1.2
0.7
Total
15.3
0.7
70
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
The Stockmann Group recognises impairment provisions based on lifetime expected credit losses from trade and lease
receivables in accordance with IFRS 9. The Group 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 the 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 ageing bucket and the 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.
2023
2022
Cash flow hedges, currency forwards
47.0
46.9
Total
47.0
46.9
Fair value of derivative contracts 2023
Derivative contracts, hedge accounting applied
EUR mill.
Positive
Negative
Net
Cash flow hedges, currency forwards
0.0
-1.9
-1.8
Total
0.0
-1.9
-1.8
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
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 2023.
71
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 management’s judgment.
There were no transfers between the levels during the financial year.
Financial assets, EUR mill.
Level
Carrying
amount
2023
Fair value
2023
Carrying
amount
2022
Fair value
2022
Derivative contracts, hedge accounting applied
2
0.0
0.0
0.1
0.1
Financial assets at fair value through profit or
loss
Derivative contracts, hedge accounting not applied
Financial assets at amortised cost
Non-current receivables
3.2
3.2
3.1
3.1
Current receivables, non-interest-bearing
42.0
42.0
43.1
43.1
Cash and cash equivalents
137.5
137.5
167.9
167.9
Other investments
3
0.4
0.4
0.2
0.2
Financial assets, total
183.2
183.2
214.4
214.4
Financial liabilities, EUR mill.
Level
Carrying
amount
2023
Fair value
2023
Carrying
amount
2022
Fair value
2022
Derivative contracts, hedge accounting applied
2
1.9
1.9
1.2
1.2
Financial liabilities at amortised cost
Non-current interest-bearing liabilities
2
71.9
62.5
67.5
55.8
Non-current lease liabilities
505.6
505.6
477.5
477.5
Non-current non-interest-bearing liabilities
0.3
0.3
0.7
0.7
Current lease liabilities
81.6
81.6
77.3
77.3
Current liabilities, non-interest-bearing
176.6
176.6
177.9
177.9
Financial liabilities, total
837.9
828.5
802.1
790.4
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 in 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.
Change in fair value of other investments, EUR mill.
2023
2022
Carrying amount 1.1.
0.2
0.2
Increases during the period
0.2
Carrying amount 31.12.
0.4
0.2
72
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.
31.12.2023
Financial assets, EUR mill.
Carrying amount
Items under netting
arrangements
Net
Currency derivatives, hedge accounting applied
0.0
0.0
0.0
Financial assets, total
0.0
0.0
0.0
Financial liabilities, EUR mill.
Currency derivatives, hedge accounting applied
-1.9
0.0
-1.8
Financial liabilities, total
-1.9
0.0
-1.8
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
4.12
Shareholders’ equity
EUR mill.
Entered in
trade
register
Number of
shares, B
Total
capital
Invested
unrestricte
d equity
fund
Total
31.12.2021
154,436,944
154,436,944
77.6
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
155,880,206
155,880,206
77.6
73.3
150.9
Share issue
22.6.2023
2,835,349
2,835,349
31.12.2023
158,715,555
158,715,555
77.6
75.9
153.5
Share capital and number of shares
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. As of 31 December 2022, a total of 80,778,437 conversion shares had been subscribed for in the share issue, and
the total number of Stockmann shares had increased to a total of 155,880,206 shares.
In June 2023, 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 2,835,349 new shares of the Company in deviation
73
from the shareholders’ pre-emptive subscription rights to such creditors of the Company whose previously conditional or
disputed restructuring debts under the restructuring programme had been confirmed to their final amounts by 24 May
2023 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 to a total of 158,715,555 shares.
During the reporting period, the Company entered into an agreement on payments of an additional EUR 280,000 of the
Company’s restructuring debt by setting off with subscriptions of shares. The subscription price in the share issue will be
EUR 0.9106 per share. As a result of the share issue, the number of shares in the Company will increase by 307,489
shares. See Note 5.9
On 31 December 2023 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% or 50% is liable, at the demand of the other
shareholders, to redeem their shares in the manner specified in the Articles of Association.
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 into share capital under a specific decision. The previously
mentioned share issues in 2021-2023 have been recognised as additions in the 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.
Other funds
EUR mill.
2023
2022
Hedging reserve
-1.8
-1.1
Reserve fund
0.2
0.1
Total
-1.6
-1.0
Other funds comprise:
-
regulations
-
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.
On 9 April 2021, the Trade Register registered a reduction of the Company’s share capital to cover accumulated losses.
According to the Finnish Companies Act, distributions to shareholders during the three years following the registration of
the reduction of share capital 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.
74
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. On 31
December 2023 and 31 December 2022, there was no dilutive effect.
EUR mill.
2023
2022
Profit/loss for the period attributable to the equity holders of the parent
company
51.7
101.6
Share issue-adjusted number of outstanding shares, weighted average
157,379,445
155,189,297
From the period result (undiluted and diluted)
0.33
0.65
75
5 Other notes
5.1
Group companies
31.12.2023
Shareholding %
Voting rights %
Parent company holdings
Stockmann AS, Tallinn
100
100
SIA Stockmann, Riga
100
100
Stockmann Security Services Oy Ab, Helsinki
100
100
Stockmann Sverige AB, Stockholm
100
100
Subsidiaries' holdings
TOV Stockmann, Kiev *)
100
100
AB Lindex, Gothenburg
100
100
Lindex Sverige AB, Gothenburg
100
100
Lindex AS, Oslo
100
100
Lindex Oy, Helsinki
100
100
Oü Lindex 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, Gothenburg *)
100
100
Lindex H.K. Ltd, Hong Kong
100
100
Shanghai Lindex Consulting Company Ltd, Shanghai
100
100
Lindex India Private Ltd, New Delhi
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
Lindex Fastighets AB, Gothenburg
100
100
Closely AB, Gothenburg
100
100
*) dormant companies
Disposals
In May 2023 the Group divested its ownership in Spacerpad AB, where AB Lindex previously owned 50,1%. After the
sale Lindex still has a license to use the Spacerpad innovation, for which Lindex has future income expectations.
The goodwill associated with the disposal of Spacerpad AB’s shares is measured based on the relative values of the
disposed operation and the portion of the unit retained.
The impact of the disposal on the result for the financial period is EUR -0.7 million.
5.2
Joint arrangements
Joint operations
The Stockmann Group has a 37.8% shareholding in Kiinteistö Oy Tapiolan Säästötammi Fastighets Ab. The real estate
76
company is based in Espoo, Finland. The joint operation is not essential for Stockmann.
The Group recognises its share of the joint operation in its statement of financial position as an investment property
(more information in Note 3.4). The Group does not recognise the income and expenses of the joint operation, as the
joint operation is not essential for the Stockmann Group.
Assets and liabilities of joint operations
EUR mill.
2023
2022
Non-current assets
1.3
1.3
Current assets
0.5
0.6
Current liabilities
0.0
0.1
Income and expenses of joint operations
EUR mill.
2023
2022
Income
0.0
2.6
Expenses
0.1
1.4
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. A 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.
2023
2022
Carrying amount 1.1.
0.0
17.5
Transfer between items
-17.5
Carrying amount 31.12.
0.0
0.0
Non-current provisions total
0.0
0.0
Current provisions
Restructuring provision
EUR mill.
2023
2022
Carrying amount 1.1.
0.1
Increase in provisions
0.1
Used provisions
-0.1
-0.0
Carrying amount 31.12.
0.0
0.1
Other provisions
EUR mill.
2023
2022
Carrying amount 1.1.
31.2
0.0
77
Transfer between items
17.5
Increase in provisions
19.0
Used provisions
-12.8
-4.5
Reversal of unused provisions
-0.4
-0.7
Carrying amount 31.12.
18.0
31.2
Current provisions total
18.0
31.2
Provision for landlords' claims related to terminated lease contracts amounted to EUR 18.0 million (EUR 30.8 million in
2022).
78
5.4
Contingent liabilities
Collaterals given for own liabilities
EUR mill.
2023
2022
Guarantees
0.1
0.1
Electricity commitments
1.5
2.7
Total
1.5
2.8
Contingent liabilities
EUR mill.
2023
2022
Pledged subsidiary shares *)
303.4
303.4
Pledged loan receivables **)
378.6
373.5
Guarantees
0.1
0.1
Electricity commitments
1.5
2.7
Total
683.5
679.8
*) Book-value of subsidiary shares
**) Book-value of subsidiary loan receivables
Electricity commitments relate to agreements to buy electricity for certain prices in the years 2024–2026.
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 25.8 million
(EUR 40.7 million), is presented as a contingent liability. More information on the claims is provided in Note 1.4.
Lease commitments
Lease agreements on the Group's business premises
EUR mill.
2023
2022
Within one year
4.8
3.1
After one year
15.3
9.3
Total
20.1
12.4
Group's lease payments
EUR mill.
2023
2022
Within one year
0.1
0.2
After one year
0.3
0.3
Total
0.4
0.4
5.5
Related party disclosures
The Group’s related parties include its management (the Board of Directors, CEO and the Group Management Team)
and the companies controlled by them, their family members and companies controlled by the family members,
Stockmann’s subsidiaries and joint operations.
The relationships between the parent company and subsidiaries are shown in Note 5.1.
79
The following transactions were carried out with related parties:
Management's employee benefits
Remunerations
Employee benefits of the Chief Executive Officer
and other members of the Group Management Team
2023, EUR
Chief Executive
Officer *)
Other members of
the Group
Management
Team
Total
Short-term employee benefits
984,466
1,138,787
2,123,254
Other long-term employee benefits
68,268
214,945
283,213
Severance payments
360,000
360,000
Share-based payments
156,988
252,887
409,876
Employee benefits total
1,569,723
1,606,620
3,176,343
Remunerations to the Board of Directors 2023, EUR
Fixed annual
remuneration **)
Remuneration
based on
participation
Total
Pohjonen Sari
90,000
24,200
114,200
Neuwald Roland
65,000
18,300
83,300
Björkman Stefan
42,500
12,800
55,300
Karppinen Timo
52,500
16,700
69,200
Kuittinen Anne ***)
600
600
Stone Tracy
42,500
13,200
55,700
Williams Harriet
42,500
12,600
55,100
Remunerations to the Board of Directors total
335,000
98,400
433,400
Fees and remunerations to key personnel total, EUR
3,609,743
*) CEO Jari Latvanen until 12 May 2023 and CEO Susanne Ehnbåge as from 12 May 2023
**) paid in 60,088 company shares and cash
***) until 22 March 2023
Employee benefits of the Chief Executive Officer
and other members of the Group Management Team
2022, EUR
Chief Executive
Officer
Other members of
the Group
Management
Team
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
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
**) as from 23 March 2022
***) until 23 March 2022
80
Management’s share-based incentives
Information on the management’s share-based incentive plan is disclosed in Note 5.6.
Management's pension commitments
CEO Susanne Ehnbåge is eligible to take retirement upon reaching the age of 65 years. The CEO’s pension will accrue
based on an individual pension scheme according to the local practice.
The retirement age of the Group Management Team members is 65 years or individual based on the statutory retirement
age.
In 2023, CEO Susanne Ehnbåge’s pension scheme was determined according to a defined contribution-based system,
partly under the local ITP1 plan and partly of an extra pension provision for 30 % of income above the ITP1 income cap.
The pension cost for her as the CEO was EUR 68 268. The total cost for the defined occupational contribution pension
insurances taken by the company for the Group Management Team was EUR 283 213 (EUR 303 670 in 2022).
Other related party transactions
The Board members were paid no other compensations in 2023.
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 are 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 the 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 1.1.2023 – 31.12.2023
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 on the performance criteria, the
number of people 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 interests 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
81
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.
The Board of Director's approved the commencement of the second performance period (PSP 2023-2025) and decided
on the performance criteria in January 2023. The performance criteria include total shareholder return, revenue, EBIT
and climate neutrality. The potential reward will be paid during H1 2026, depending on the achievement of the
performance criteria and the service condition. Any reward earned for the PSP 2023-2025 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.
82
Performance period
2023-2025
2022-2024
Initial amount, pcs *)
2,000,000
2,000,000
Initial allocation date
6.7.2023
23.11.2022
Vesting date
30.4.2026
30.4.2025
Maximum contractual life, years
2.8
2.4
Remaining contractual life, years
2.3
1.3
Number of participants in the plan
18
18
Payment method
Equity and cash, net
settlement
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
Performance period
2023-2025
2022-2024
Total
Outstanding number of shares 1.1.
0
1,478,000
1,478,000
Granted during the year
1,238,000
18,000
1,256,000
Forfeited during the year
53,000
318,000
371,000
Outstanding number of shares 31.12.
1,185,000
1,178,000
2,363,000
Fair value determination
The fair value of share-based incentives has been determined at the 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:
Valuation parameters for instruments
granted during period 2023
Performance period 2023-2025
Performance period 2022-2024
Share price at grant, EUR
2.07
2.07
Share price at the end of the period, EUR
2.90
2.90
Expected volatility, % *)
41.52%
46.12%
Maturity, years
2.5
1.5
Risk-free interest rate, %
3.24%
3.39%
Expected dividends, EUR
0.08
0.00
Valuation model
Monte Carlo
Monte Carlo
Fair value per share, EUR
0.9357
0.8156
*) 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.
2023
2022
Expenses for the financial year, share-based payments
1.0
0.1
Expenses for the financial year, share-based payments, equity-settled
0.8
0.1
Liabilities arising from share-based payments 31.12.
0.3
0.0
Estimated future cash payment related to withholding taxes
2.1
0.6
5.7
Climate-related matters
Accounting policies
The Stockmann Group considers climate-related matters in estimates and assumptions, where appropriate. The
assessment includes possible impacts on the Group due to physical and transition risks. The Group believes its business
model and products will be still viable in the future low-carbon economy, but climate-related matters increase the
83
uncertainty in estimates and assumptions related to some items in the financial statements. Even though climate-related
risks might not currently have a significant impact on measurement, the Group is closely monitoring relevant changes
and developments, such as climate-related legislation and changes in customer behaviour. The items and considerations
which are recognised as most directly impacted by climate-related matters are:
- Impairment of goodwill. The value-in-use may be impacted in different ways by transition risk, such as climate-
related legislation and changes in demand for the Group’s products. The Group has concluded that no single
climate-related assumption is a key assumption for the 2023 test of goodwill. Nevertheless, the Group has
incorporated its expectations for the changing consumer needs and consumption habits, expected cost increases
due to stricter recycling requirements and more sustainably sourced materials as well as higher energy and freight
cost due to climate change in the cash-flow forecasts when assessing value-in-use amounts. See Note 3.2.
- Useful life of property, plant and equipment. When reviewing the residual values and expected useful lives of assets,
the Group considers climate-related matters, such as climate-related legislation and regulations which may restrict
the use of assets. See Note 3.3.
5.8 EU Taxonomy Key Performance Indicators
The Stockmann Group’s accounting policies for Taxonomy-eligibility and Taxonomy-alignment calculations are based on
our best interpretation of the EU Taxonomy Regulation, the 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 the Stockmann
Group is activity 7.7 ‘Acquisition and ownership of buildings (Renting and operating of own or leased real estate)’.
Financial figures associated with the Taxonomy activity 6.5 ‘Transport by motorbikes, passenger cars and light
commercial vehicles’ are currently below certain materiality thresholds that the Stockmann Group has defined and
therefore the activity has been categorised as non-eligible. The Stockmann Group has also evaluated the new economic
activities in the Commission Delegated Regulation 2023/2486. While activity 3.2. ‘Renovation of existing buildings’
applies to the Stockmann Group, the amounts associated with it have not reached the predefined materiality. Activity 5.4.
‘Sale of second-hand goods’ is not relevant to the Group due to second-hand goods’ sales being conducted by partners.
Taxonomy-aligned activities
The EU Taxonomy Regulation establishes the basis for the EU Taxonomy by setting conditions that an economic activity
must meet to qualify as environmentally sustainable.
The 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 the Council. In the assessment the Stockmann Group has determined whether its Taxonomy-eligible economic
activities fulfill the ‘substantial contribution’, ‘do no significant harm’ and the minimum social safeguards criteria in the EU
Taxonomy Regulation. Taxonomy-eligible economic activity which meets all criteria is recognised as environmentally
sustainable and thus Taxonomy -aligned.
Taxonomy-aligned turnover
The share of the 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 the 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 the 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 the 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 the Stockmann Group’s total OPEX that
is a part of ‘Other operating expenses’, see Note 2.6. According to the EU Taxonomy definition of the 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 the Stockmann Group
OPEX does not include ICT expenses as it is not possible to separate ICT expenses related to maintenance from other
ICT expenses.
The EU Taxonomy Key Performance Indicators are disclosed as part of the non-financial information in Stockmann’s
Financial Review.
84
5.9
Events after the reporting period
Stockmann’s Board of Directors decided on 25 January 2024, in accordance with the restructuring programme and
pursuant to the authorization granted by the Annual General Meeting, to issue 307,489 new shares of the Company in
deviation from the shareholders’ pre-emptive subscription rights to a creditor of the Company whose previously
conditional or disputed restructuring debt under the restructuring programme had been confirmed to its final amount by
9 November 2023 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. As a result of the share issue, the total number of shares in the Company increased by 307,489 shares to a
total of 159,023,044 shares.
On 25 January 2024, Stockmann announced that it had received and verified one subscription form from an entitled
person whose previously conditional or disputed receivable subject to the payment programme of the restructuring
programme had been clarified and the final amount of such receivable had been confirmed. The subsequent bonds duly
subscribed for by such entitled person amounted to the aggregate principal amount of EUR 1,120,000. The receivable of
the entitled person has been converted, by way of set-off, into subsequent bonds.
After the reporting period in February, Stockmann and disputed creditor Tampereen Seudun Osuuspankki reached a
settlement agreement, which ends the disputed claims between the parties concerning the restructuring programme.
Execution of the settlement agreement is subject to the court confirming the amendment of the payment programme of
the restructuring programme. Amendment application will be submitted to the Helsinki District Court. After this
agreement, there are still two disputed claims left with the total amount of EUR 29.1 million.
.
85
Stockmann plc
Income Statement, FAS
EUR
Note
1.1.-31.12.2023
% of Rev.
1.1.-31.12.2022
% of Rev.
REVENUE
242,282,545.39
100.0
245,095,279.40
100.0
Other operating income
2
6,954,344.40
2.9
192,697,041.91
78.6
Materials and services
Materials and consumables:
Purchases during the financial year
-132,003,315.53
-139,508,885.07
Change in inventories, increase (+), decrease (-)
737,389.38
9,593,840.51
Materials and services, total
-131,265,926.15
54.2
-129,915,044.56
53.0
Wages, salaries and employee benefits
3
-45,349,176.68
18.7
-45,178,701.91
18.4
Depreciation, amortisation and impairment losses
4
-9,420,195.21
3.9
-12,100,924.31
4.9
Other operating expenses
5
-90,580,357.65
37.4
-107,449,439.60
43.8
-276,615,655.69
114.2
-294,644,110.38
120.2
OPERATING PROFIT (LOSS)
-27,378,765.90
-11.3
143,148,210.93
58.4
Financial income and expenses
6
49,897,331.61
20.6
42,275,552.43
17.2
PROFIT (LOSS) BEFORE
APPROPRIATIONS AND TAXES
22,518,565.71
9.3
185,423,763.36
75.7
Appropriations
7
3,827,929.29
1.6
35,255,625.83
14.4
Income taxes
8
-8,350,053.11
-3.4
-46,842,369.66
-19.1
PROFIT (LOSS) FOR THE PERIOD
17,996,441.89
7.4
173,837,019.53
70.9
86
Stockmann plc
Balance sheet, FAS
EUR
Note
31.12.2023
31.12.2022
ASSETS
NON-CURRENT ASSETS
Intangible assets
9
Intangible rights
7,344,061.20
5,827,390.87
Other intangible assets
70,884.14
Advance payments and construction in progress
700,346.73
3,945,813.28
Intangible assets, total
8,044,407.93
9,844,088.29
Property, plant, equipment
10
Machinery and equipment
18,686,683.43
18,717,395.94
Modification and renovation expenses for leased
premises
2,960,902.71
3,027,478.91
Other tangible assets
54,601.65
54,601.65
Advance payments and construction in progress
300,227.73
1,192,370.67
Property, plant, equipment, total
22,002,415.52
22,991,847.17
Investments
11
Shares in Group companies
311,436,627.98
309,936,627.98
Other shares and participations
748,761.86
748,761.86
Investments, total
312,185,389.84
310,685,389.84
NON-CURRENT ASSETS, TOTAL
342,232,213.29
343,521,325.30
CURRENT ASSETS
Inventories
Materials and consumables
53,400,438.96
52,663,049.58
Inventories, total
53,400,438.96
52,663,049.58
Non-current receivables
Loan receivables from Group companies
210,707,596.22
208,567,698.92
Other receivables
4,099,608.31
6,718,529.28
Non-current receivables, total
214,807,204.53
215,286,228.20
Current receivables
12
Trade receivables
4,044,287.40
2,495,382.50
Receivables from Group companies
9,360,003.70
8,805,716.71
Other receivables
317,478.13
507,318.28
Prepayments and accrued income
12,732,884.33
9,577,997.87
Current receivables, total
26,454,653.56
21,386,415.36
Cash in hand and at banks
13
23,393,007.01
35,084,492.56
CURRENT ASSETS, TOTAL
318,055,304.06
324,420,185.70
ASSETS, TOTAL
660,287,517.35
667,941,511.00
87
Stockmann plc
Balance sheet, FAS
EUR
Note
31.12.2023
31.12.2022
EQUITY AND LIABILITIES
EQUITY
Share capital
14-15
77,556,538.26
77,556,538.26
Invested unrestricted equity fund
76,138,713.65
73,556,844.86
Retained earnings
219,326,940.89
45,489,921.36
Net profit (loss) for the financial year
17,996,441.89
173,837,019.53
EQUITY, TOTAL
391,018,634.69
370,440,324.01
ACCUMULATED APPROPRIATIONS
16
19,131,454.66
21,019,383.95
PROVISIONS
17
18,033,041.57
31,225,567.27
LIABILITIES
Non-current liabilities
18
Bonds
72,022,624.00
67,629,243.00
Other payables
9,097,953.00
Liabilities to Group companies
96,316,419.01
66,674,746.33
Non-current liabilities, total
177,436,996.01
134,303,989.33
Current liabilities
19
Advances received
818,584.06
807,740.31
Trade payables
16,998,516.29
16,717,966.13
Liabilities to Group companies
1,995,278.90
27,959,627.24
Other payables
14,533,430.28
12,025,930.75
Accrued expenses and prepaid income
20
20,321,580.89
53,440,982.01
Current liabilities, total
54,667,390.42
110,952,246.44
LIABILITIES, TOTAL
232,104,386.43
245,256,235.77
EQUITY AND LIABILITIES, TOTAL
660,287,517.35
667,941,511.00
88
Stockmann plc
Cash flow statement
EUR
1.1.-31.12.2023
1.1.-31.12.2022
CASH FLOW FROM OPERATING ACTIVITIES
Profit (loss) for the financial year
17,996,441.89
173,837,019.53
Adjustments for:
Depreciation and amortisation according to plan
9,420,195.21
12,100,924.31
Gains of disposals of fixed assets
-11,653.21
-185,437,307.11
Other non-cash income and expenses
-8,455,895.22
14,392,734.19
Financial income and expenses
-49,897,332.11
-42,252,335.98
Appropriations
-3,827,929.29
-35,255,625.83
Taxes
-166,820.86
37,174,545.93
Deferred taxes
8,516,873.97
9,667,823.73
Changes in working capital:
Increase (-) / decrease (+) of current receivables
3,143,057.15
-1,790,504.94
Increase (-) / decrease (+) of inventories
-737,389.38
-9,593,840.51
Increase (+) / decrease (-) of non-interest-bearing liabilities
11,454,484.89
-16,165,579.23
Interest and other financial expenses paid from operating
activities
-2,071,754.13
-4,339,424.28
Interest received from operating activities
505,977.16
2,939,031.70
Taxes
-39,789,191.33
-1,165,363.47
CASH FLOW FROM OPERATING ACTIVITIES
-53,920,935.26
-45,887,901.96
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure on tangible and intangible assets
-6,917,323.51
-6,923,098.07
Proceeds from disposal of tangible and intangible assets
11,653.21
390,632,479.61
Proceeds from disposal of subsidiary shares
38,419,875.94
Increase (-)/decrease (+) of loan receivables
-92,855.98
Additions to holdings in Group companies
-1,500,000.00
Dividends received/return of equity
3,514,999.06
90.00
NET CASH FROM INVESTING ACTIVITIES
-4,890,671.24
422,036,491.50
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (+)/ repayments of (-) current liabilities
-381,490,180.00
Proceeds from non-current liabilities
48,120,120.95
Repayments of non-current liabilities
-1,000,000.00
NET CASH FROM FINANCING ACTIVITIES
47,120,120.95
-381,490,180.00
Change in cash in hand and at banks, increase (+) /
decrease (-)
-11,691,485.55
-5,341,590.46
Cash in hand and at banks in the beginning of the financial
year
35,084,492.56
40,426,083.02
Cash in hand and at banks at the end of the financial year
23,393,007.01
35,084,492.56
In 2022 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.
89
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 1.4., 1.5. 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.
Income taxes
The direct taxes entered into 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 assets have 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. The untaxed retained earnings of the
Branch in Estonia including the profit of the reporting period are EUR 26.8 million. The calculated income tax in Estonia
would be EUR 5.9 million, which is recognised as deferred tax liability. This amount of tax will be most likely not
deductible from the income tax in Finland.
During 2022 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 were 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 was double tax payment.
Intangible and tangible assets
Tangible and intangible assets are valued according to the original cost less accumulated depreciation according to plan.
Depreciation according to plan is based on the original cost and the estimated useful life of intangible and tangible assets
as follows:
Intangible assets
90
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.
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.
91
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.
In accordance with the restructuring programme, the unsecured creditors have been 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 72.022.624.
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
2023
2022
Capital gain of the real estates and shares
185,584,784.11
Compensation for services to Group companies
6,903,384.00
7,222,583.43
Other operating income
50,960.40
37,151.37
Total
6,954,344.40
192,844,518.91
3. Wages, salaries and employee benefits expenses
EUR
2023
2022
Salaries and remuneration paid to the CEO *)
1,403,828.00
604,315.00
Salaries and remuneration paid to the Board of Directors
433,400.00
410,300.00
Other wages and salaries
35,145,502.13
36,046,866.24
Wages during sick leave
1,539,297.69
1,754,352.28
Pension expenses
5,351,129.72
4,422,366.02
Other employee benefits expenses
1,476,019.14
1,940,502.37
Total
45,349,176.68
45,178,701.91
Personnel, average
1,001
1,048
*) CEO Jari Latvanen until 12 May 2023 and CEO Susanne Ehnbåge as from 12 May 2023.
Management pension liabilities
The retirement age of the Management Team members is 65 years or individual based on the statutory retirement age.
CEO Susanne Ehnbåge is eligible to take retirement upon reaching the age of 65 years. The CEO’s pension will accrue
based on an individual pension scheme according to the local practice. The costs of the insurance are recorded as
expenses in AB Lindex.
92
4. Depreciation, amortisation and impairment losses
EUR
2023
2022
Intangible rights
4,740,194.32
5,497,574.18
Buildings and constructions
2,029,393.14
Machinery and equipment
3,629,410.83
3,490,110.12
Modification and renovation expenses for leased premises
1,050,590.06
1,083,846.87
Total
9,420,195.21
12,100,924.31
93
5. Other operating expenses
EUR
2023
2022
Site expenses
44,451,512.80
41,559,290.89
ICT expenses
12,957,121.36
14,417,157.88
Marketing expenses
8,267,447.70
8,170,983.53
Professional services expenses
4,947,784.85
4,353,232.17
Staff leasing expenses
4,758,976.25
5,109,060.33
Goods handling expenses
3,796,669.45
4,583,260.51
Voluntary indirect employee expenses
1,102,798.23
1,616,227.06
Rental expenses
624,311.49
683,674.94
Credit losses
137,222.70
654,721.48
Other expenses *)
9,536,512.82
26,301,830.81
Total
90,580,357.65
107,449,439.60
*) 2023 corporate restructuring related expenses EUR 1.4 million (2022 EUR 18.1 million).
Auditors' fees
EUR
2023
2022
Auditing
319,813.00
272,613.10
Certificates and statements *)
4,580.00
Tax advisory
21,987.00
17,576.00
Other services
27,165.76
19,726.00
Total
368,965.76
314,495.10
*) Auditing Act chapter 1, section 1:2
6. Financial income and expenses
EUR
2023
2022
Capital gain of Group company shares
38,304,298.16
Interest income from Group companies
31,226,758.96
24,947,961.16
Dividend from Group companies
21,967,400.38
Other dividend income
215.00
90.00
Interest income from parties outside the Group
215,365.05
29,417.09
Interest expenses to Group companies
-1,023,780.14
-2,950,418.96
Interest and other financial expenses to parties outside the
Group
-1,182,513.54
-1,429,657.65
Foreign exchange gains and losses (net)
-1,306,114.10
-16,626,137.37
Total
49,897,331.61
42,275,552.43
7. Appropriations
EUR
2023
2022
Difference between depreciation according to plan and
depreciation in taxation
1,887,929.29
61,455,625.83
Received Group contributions
1,940,000.00
Granted Group contributions
-26,200,000.00
Total
3,827,929.29
35,255,625.83
8. Income taxes
EUR
2023
2022
Income tax for period
-37,174,545.93
Taxes for previous financial years
166,820.86
Change in deferred taxes *)
-8,516,873.97
-9,667,823.73
Total
-8,350,053.11
-46,842,369.66
94
*) 2023 includes def.tax liability change for Estonian Branch EUR 5,897,953.00
95
Non-current assets
9. Intangible assets
Intangible rights
EUR
2023
2022
Acquisition cost 1.1.
30,024,007.60
38,127,692.35
1,338,698.50
40,800.00
4,918,166.15
1,725,786.00
-6,380,649.24
-9,870,270.75
Acquisition cost 31.12.
29,900,223.01
30,024,007.60
Accumulated amortisation 1.1.
24,196,616.73
28,569,313.30
-6,380,649.24
-9,870,270.75
4,740,194.32
5,497,574.18
Accumulated amortisation 31.12.
22,556,161.81
24,196,616.73
Carrying amount 31.12.
7,344,061.20
5,827,390.87
Other intangible assets
EUR
2023
2022
Acquisition cost 1.1.
705,768.85
705,768.85
Acquisition cost 31.12.
12,287.00
705,768.85
Accumulated amortisation 1.1.
634,884.71
564,307.94
Amortisation for the financial year
70,884.14
70,576.77
Accumulated amortisation 31.12.
12,287.00
634,884.71
Carrying amount 31.12.
0.00
70,884.14
Advance payments and construction in progress
EUR
2023
2022
Acquisition cost 1.1.
3,945,813.28
1,896,103.53
Increases
1,672,699.60
3,775,495.75
Transfers between items
-4,918,166.15
-1,725,786.00
Acquisition cost 31.12.
700,346.73
3,945,813.28
Carrying amount 31.12.
700,346.73
3,945,813.28
Intangible assets, total
8,044,407.93
9,844,088.29
10. Tangible assets
Land and water
EUR
2023
2022
Acquisition cost 1.1.
3,316,108.01
-3,316,108.01
Acquisition cost 31.12.
Revaluations 1.1.
5,898,350.58
-5,898,350.58
Revaluations 31.12.
Carrying amount 31.12.
1.00
0.00
96
Buildings and constructions
EUR
2023
2022
Acquisition cost 1.1.
322,568,904.82
Transfers between items
53,946.00
Decreases
-322,622,850.82
Acquisition cost 31.12.
Accumulated depreciation 1.1.
120,621,113.98
Accumulated depreciation on decreases
-122,650,507.12
Depreciation for the financial year
2,029,393.14
Revaluations 1.1.
24,848,830.34
-24,848,830.34
Revaluations 31.12.
Carrying amount 31.12.
0.00
Machinery and equipment
EUR
2023
2022
Acquisition cost 1.1.
35,142,841.09
36,539,814.61
Increases
276,983.14
63,463.00
Transfers between items
3,321,715.18
593,010.16
Decreases
-1,520,365.81
-2,053,446.68
Acquisition cost 31.12.
37,221,173.60
35,142,841.09
Accumulated depreciation 1.1.
16,425,445.15
14,546,030.21
Accumulated depreciation on decreases
-1,520,365.81
-1,610,695.18
Depreciation for the financial year
3,629,410.83
3,490,110.12
Accumulated depreciation 31.12.
18,534,490.17
16,425,445.15
Carrying amount 31.12.
18,686,683.43
18,717,395.94
Modification and renovation expenses for leased premises
EUR
2023
2022
Acquisition cost 1.1.
7,010,580.01
7,239,266.30
Transfers between items
913,129.72
438,076.75
Decreases
-1,527,047.68
-666,763.04
Acquisition cost 31.12.
6,396,662.05
7,010,580.01
Accumulated depreciation 1.1.
3,983,101.10
3,636,594.04
Accumulated depreciation on decreases
-1,527,047.68
-666,763.04
Depreciation for the financial year
979,705.92
1,013,270.10
Accumulated depreciation 31.12.
3,435,759.34
3,983,101.10
Carrying amount 31.12.
2,960,902.71
3,027,478.91
Other tangible assets
EUR
2023
2022
Acquisition cost 1.1.
54,601.65
54,601.65
Acquisition cost 31.12.
54,601.65
54,601.65
Carrying amount 31.12.
54,601.65
54,601.65
Advance payments and construction in progress
EUR
2023
2022
Acquisition cost 1.1.
1,192,370.67
138,155.89
Increases
3,342,701.96
2,139,247.69
Transfers between items
-4,234,844.90
-1,085,032.91
Acquisition cost 31.12.
300,227.73
1,192,370.67
Carrying amount 31.12.
300,227.73
1,192,370.67
Tangible assets, total
22,002,415.52
22,991,847.17
97
11. Investments
Investments in Group companies
EUR
2023
2022
Acquisition cost 1.1.
309,936,627.98
286,641,335.62
Increases *)
1,500,000.00
23,410,870.14
Impairments **)
-115,577.78
Carrying amount 31.12.
311,436,627.98
309,936,627.98
related to the loan taken for the acquisition of AB Lindex
Other shares and participations
EUR
2023
2022
Acquisition cost 1.1.
748,761.86
748,761.86
Carrying amount 31.12.
748,761.86
748,761.86
Investments, total
312,185,389.84
310,685,389.84
12. Current receivables
Trade receivables
EUR
2023
2022
Interest-bearing trade receivables
40,845.69
Non-interest-bearing trade receivables
4,044,287.40
2,454,536.81
Total
4,044,287.40
2,495,382.50
Receivables from Group companies
EUR
2023
2022
Group contribution receivables
3,650,000.00
1,710,000.00
Trade receivables
5,708,423.71
5,888,919.71
Prepayments and accrued income
1,579.99
206,797.00
Other current receivables
1,000,000.00
Total
9,360,003.70
8,805,716.71
Other receivables
EUR
2023
2022
Other receivables
317,478.13
507,318.28
Total
317,478.13
507,318.28
Prepayments and accrued income
EUR
2023
2022
Taxes and customs duties receivable
4,127,179.73
180,350.00
Periodised ICT expenses
2,903,066.88
2,463,208.25
Receivable from credit card co-operation
1,849,128.00
1,900,627.84
Periodised indirect employee expenses
1,227,285.00
1,339,098.00
Receivables from suppliers
1,096,698.49
2,003,984.56
Other prepayments and accrued income
1,529,526.23
1,690,729.22
Total
12,732,884.33
9,577,997.87
13. Cash in hand and at banks
Cash in hand and at banks comprise bank deposits and cash in hand.
98
14. Changes in equity
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.
In June 2023, 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 2 835 349 new shares of the Company in
deviation from the shareholders’ pre-emptive subscription rights to such creditors of the Company whose previously
conditional or disputed restructuring debts under the Restructuring Programme had been confirmed to their final amounts
by 24 May 2023 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 to a total of
158 715 555 shares.
On 31 December 2023 Stockmann Plc’s share capital was EUR 77.6 million. All the shares issued have been fully paid
in.
Share capital
EUR
2023
2022
Shares 1.1. and 31.12.
77,556,538.26
77,556,538.26
Share capital, total
77,556,538.26
77,556,538.26
Reserve for invested unrestricted equity 1.1.
73,556,844.86
72,242,609.96
2,581,868.79
1,314,234.90
Reserve for invested unrestricted equity 31.12.
76,138,713.65
73,556,844.86
Retained earnings 1.1.
219,326,940.89
76,237,102.28
-30,747,180.92
Retained earnings 31.12.
219,326,940.89
45,489,921.36
Net profit (loss) for the financial year
17,996,441.89
173,837,019.53
Equity, total
391,018,634.69
370,440,324.01
Breakdown of distributable funds 31.12.
EUR
2023
2022
Funds
76,138,713.65
73,556,844.86
Retained earnings
219,326,940.89
45,489,921.36
Net profit (loss) for the financial year
17,996,441.89
173,837,019.53
Total
313,462,096.43
292,883,785.75
During the restructuring programme Stockmann Oyj is not allowed to distribute funds.
99
15. Parent company's shares
pcs.
2023
2022
Shares (1 vote each)
158,715,555
155,880,206
Total
158,715,555
155,880,206
16. Accumulated appropriations
The accumulated appropriations comprise accumulated depreciation difference.
17. Provisions
Other provisions
EUR
2023
2022
Business restructuring cost
69,000.00
Provision on the claims on rental agreements
18,033,041.57
31,156,567.27
as part of company restructuring debt
18,033,041.57
31,156,567.27
Total
18,033,041.57
31,225,567.27
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 43,7
mill.
18. Non-current liabilities
EUR
2023
2022
Bonds
72,022,624.00
67,629,243.00
Deferred tax liabilities
5,897,953.00
Other payables
3,200,000.00
Liabilities to Group companies
96,316,419.01
66,674,746.33
part of company restructuring debt
63,900,534.46
63,900,534.46
Non-current liabilities, total
177,436,996.01
134,303,989.33
19. Current liabilities
EUR
2023
2022
Non-interest-bearing liabilities
52,973,310.75
110,952,246.44
part of company restructuring debt
1,415,338.30
154,535.27
Current liabilities, total
54,667,390.42
110,952,246.44
Restructuring debt
EUR
2023
2022
Current non-interest-bearing restructuring debt
Unsecured
1,415,338.30
154,535.27
Current non-interest-bearing restructuring debt total
1,415,338.30
154,535.27
Restructuring debt related to provisions
18,033,041.57
31,156,567.27
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
83,348,914.33
95,211,637.00
100
Liabilities to Group companies
EUR
2023
2022
Trade payables
1,736,801.00
1,688,539.54
Accrued liabilities
258,477.90
71,087.70
Total
1,995,278.90
27,959,627.24
20. Accruals and prepaid income, current
EUR
2023
2022
Accrued income taxes
36,009,182.46
Accrued personnel expenses
10,000,613.41
10,660,935.38
Periodised purchases of stock items
7,796,107.02
4,022,813.28
Reserve for returns and accrued income
1,279,578.00
1,294,447.00
Other accrued expenses and prepaid income
1,245,282.46
1,453,603.92
Total
20,321,580.89
53,440,982.04
21. Contingent liabilities
Security pledged on behalf of Group companies
EUR
2023
2022
Rent guarantees
1,248,447.46
1,604,617.91
Other guarantees
69,040.91
67,690.29
Total
1,317,488.37
1,672,308.20
Security pledged, total
EUR
2023
2022
Guarantees
1,317,488.37
1,672,308.20
Total
1,317,488.37
1,672,308.20
22. Liability engagements and other commitments
EUR
2023
2022
Rental commitments
448,696,183.00
402,134,487.00
Electricity commitments
1,129,609.80
944,904.00
Leasing commitments
406,198.05
316,122.55
Total
450,231,990.85
403,395,513.55
Pension liabilities
The pension liabilities of the parent company are insured with outside pension insurance companies. The pension
liabilities are fully covered.
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
Other companies
Parent company holdings
Shareholding %
Kiinteistö Oy Tapiolan Säästötammi Fastighets Ab, Espoo
37.8
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24. Events after the reporting period
Stockmann’s Board of Directors decided on 25 January 2024, in accordance with the restructuring programme and
pursuant to the authorization granted by the Annual General Meeting, to issue 307,489 new shares of the Company in
deviation from the shareholders’ pre-emptive subscription rights to a creditor of the Company whose previously
conditional or disputed restructuring debt under the restructuring programme had been confirmed to its final amount by
9 November 2023 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. As a result of the share issue, the total number of shares in the Company increased by 307,489 shares to a
total of 159,023,044 shares.
On 25 January 2024, Stockmann announced that it had received and verified one subscription form from an entitled
person whose previously conditional or disputed receivable subject to the payment programme of the restructuring
programme had been clarified and the final amount of such receivable had been confirmed. The subsequent bonds duly
subscribed for by such entitled person amounted to the aggregate principal amount of EUR 1,120,000. The receivable of
the entitled person has been converted, by way of set-off, into subsequent bonds.
After the reporting period in February, Stockmann and disputed creditor Tampereen Seudun Osuuspankki reached a
settlement agreement, which ends the disputed claims between the parties concerning the restructuring programme.
Execution of the settlement agreement is subject to the court confirming the amendment of the payment programme of
the restructuring programme. Amendment application will be submitted to the Helsinki District Court. After this
agreement, there are still two disputed claims left with the total amount of EUR 29.1 million.
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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 2023 will be carried further in the retained
earnings.
Helsinki, 22 February 2024
Signatures of the Board of Directors and the CEO to the Board report on operations and the financial statements:
BOARD OF DIRECTORS
Sari Pohjonen
Stefan Björkman Timo Karppinen Roland Neuwald
Tracy Stone Harriet Williams
CEO
Susanne Ehnbåge
The Auditor’s Note
A report on the audit performed has been issued today.
Helsinki, 22 February 2024
Ernst & Young Oy
Authorised Public Accountant Firm
103
Terhi Mäkinen
Authorised Public Accountant
104
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, 2023. 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 material accounting
policy information, as well as the parent company’s balance sheet, income statement, statement of cash flows and notes.
In our opinion
●
performance and cash flows in accordance with IFRS Accounting Standards as adopted by the EU.
●
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
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
105
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
section of our report, including in relation to these matters. Accordingly, our audit included the 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.
106
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 2023, the
value of goodwill amounted to EUR 250,6 million and
the trademark to EUR 81,9 million representing 25 %
of total assets and 85 % of total equity (2022: goodwill
EUR 250,9 million and trademark EUR 81,8 million
representing 26 % of total assets and 99 % 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;
●
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,
●
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;
●
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;
●
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 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;
●
data analytics;
●
●
online sales based on delivery lead times; and
●
revenues.
107
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).
108
Valuation of inventories
We refer to the Group’s accounting policies and the
note 2.4
At the balance sheet date 31 December 2023, the
value of inventory amounted to EUR 162,9 million
representing 12 % of total assets and 42 % of total
equity (2022: EUR 174,2 million representing 14 % of
total assets and 52 % 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;
●
to latest purchase invoices and to sales prices;
●
management with respect to slow moving and
obsolete stock and to the expected sales and net
realizable value;
●
accounting with data analytics and
●
inventory.
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 IFRS Accounting Standards 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, 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
109
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:
●
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.
●
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.
●
and related disclosures made by management.
●
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.
●
and whether the financial statements represent the underlying transactions and events so that the financial
statements give a true and fair view.
●
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.
110
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 3 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 22.2.2024
Ernst & Young Oy
Authorized Public Accountant Firm
Terhi Mäkinen
Authorized Public Accountant
111
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 743700IFQI6W89M1IY95-2023-12-31-fi.zip of Stockmann Oyj Abp (business identity code:
0114162-2) for the financial year 1.1.-31.12.2023 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:
●
●
the consolidated financial statements included within the ESEF-financial statements by 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 the requirements of ESEF RTS.
Auditor’s Independence and Quality Management
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 firm applies International Standard on Quality Management (ISQM) 1, which requires the firm to design, implement
and operate a system of quality management including policies or 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:
●
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.
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 primary financial statements, notes to the financial statements and the entity identifier
information in the consolidated financial statements included in the ESEF financial statements 743700IFQI6W89M1IY95-
2023-12-31-fi.zip of Stockmann Oyj Abp for the year ended 1.1.-31.12.2023 complies in all material respects with the
requirements of ESEF RTS.
112
Our audit opinion on the consolidated financial statements of Stockmann Oyj Abp for the year ended 1.1.-31.12.2023 is
included in our Independent Auditor’s Report dated 22.2.2024. In this report, we do not express an audit opinion any
other assurance on the consolidated financial statements.
Helsinki 26.2.2024
Ernst & Young Oy
Authorized Public Accountant Firm
Terhi Mäkinen
Authorized Public Accountant