2024
Report of the
Board of Directors
and Financial
Statements
CONTENTS
REPORT OF
THE BOARD OF
DIRECTORS
FINANCIAL
STATEMENTS
118 Key figures
124 Shares and share capital
126 Consolidated Financial Statements
171 Parent Company Financial Statements
182 Auditor’s reports
Report of
the Board of
Directors
Report of the Board of Directors
4
Report of the Board
of Directors
The Lindex Group’s consolidated revenue in 2024
was EUR 940.1 (951.7) million. The revenue
decreased by 1.2%, and in local currencies by
1.3%. The Group’s gross margin was level with
the comparison period at 58.3% (58.2). The
Group’s adjusted operating result decreased to
EUR 74.9 (80.0) million. The Lindex division’s
adjusted operating result decreased to EUR 82.9
(90.3) million. The Stockmann division’s adjusted
operating result improved to EUR -3.9 (-6.3)
million. Operating result decreased to EUR 60.9
(76.5) million. Adjusted earnings per share, basic
and diluted, were EUR 0.15 (0.16). The Board
of Directors will propose for the Annual General
Meeting, that no dividend will be paid for the
financial year 2024. According to the terms of the
company’s restructuring programme, the company
is not allowed to distribute any dividends during
the implementation of the restructuring programme
repayment schedule.
Guidance for 2025:
In 2025, Lindex Group expects its revenue to increase by
0−4% in local currencies compared to 2024. 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 2025:
The macroeconomic situation on Lindex Group’s main
markets is estimated to remain challenging especially
during the first half of the year. Continuing geopolitical
uncertainty may have a negative impact on the economic
recovery. Despite the already lowered interest rates and
decreased inflation, the GDP (Gross Domestic Product)
growth forecasts for the first half of 2025 are moderate
due to relatively weak consumer confidence. Towards the
latter part of the year, economic growth might accelerate
as interest rates are expected to continue to decline and
inflation to remain stable. Increasing purchasing power
of households may gradually start supporting favourable
development of consumer demand. However, the situation
may vary between the Group’s markets. Disruptions in
supply chains and international logistics during the year
cannot be excluded.
Strategy and financial targets
Lindex Group’s two divisions, Lindex and Stockmann, have
their own strategies targeting sustainable and profitable
growth. The divisions share the view that customer
centricity, an omnichannel approach and strong brands are
key strategic factors in building future growth. Lindex Group
has ambitious sustainability targets, and sustainability is a
central part of the Group’s operations.
The Lindex division’s strategy
builds on Lindex’s purpose
of empowering and inspiring women everywhere. 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 are presented in the table below.
Financial targets for the Lindex division | 2024 | 2023 | 2022 |
3–5% annual local currency revenue growth in the mid-term and reaching an annual revenue of 10 billion by 2030, % | -0.9 | 2.7 | 10.9 |
30% digital share of revenue mid-term, % | 20.8 | 19.0 | 18.5 |
15% adjusted operating margin the long-term, % | 13.2 | 14.3 | 13.6 |
The Stockmann division’s
customer-centric strategy
builds on Stockmann’s purpose of being a marketplace
for a good life. The division has four strategic must-win
areas, which are to elevate offering by increasing focus
on premium and luxury, grow and leverage loyal customer
base, optimise omnichannel performance and improve
operational efficiency. The Stockmann division’s financial
targets and the outcomes are presented in the table below.
Financial the Stockmann division | 2024 | 2023 | 2022 |
Revenue growth in line with market* ) growth in the mid-term, | -2.2 | -0.6** ) | 10.0 |
Reaching a cash flow in the mid-term, EUR mill.*** ) | -19.4 | -12.0 | -20.9 |
5% adjusted operating margin in the mid-term, % | -1.3 | -2.0 | -1.7 |
*
)
Stockmann’s addressable market in Finland, Latvia and
Estonia, comprising of fashion, beauty and home categories.
Market growth was -1,5% in 2024, 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.
***
)
Operating free cash flow is calculated as EBITDA – items
affecting comparability - lease payments +/- changes in net
working capital - capital expenditure.
Report of the Board of Directors
5
Both divisions are committed to Lindex Group’s science-
based climate target to reduce greenhouse gas emissions
from its own operations and value chain by 42% by 2030
compared to the year 2022. The Science Based Targets
initiative (SBTi) has validated and approved the Group’s
climate target.
Strategic assessment
In September 2023, Lindex Group’s Board of Directors
initiated a strategic assessment aiming to crystallise
shareholder value by refocusing the Group’s business on
Lindex. As part of the investigation of strategic alternatives
for Stockmann’s department stores business, the Board
evaluates the best environment for developing the business
in the future. These options include increasing the business’
independence within the Group, considering possible
ownership changes or strategic partnerships, or continuing
under the current structure. As part of the assessment,
the Group changed the name of its parent company from
Stockmann plc to Lindex Group plc, as decided by the
Annual General Meeting on 21 March 2024.
In December 2024, Lindex Group announced that its
Board of Directors will continue to investigate strategic
alternatives for the Stockmann department store business.
The assessment is expected to be finalised during the
first half of 2025. The Group will provide an update on the
assessment if, and when, appropriate. Initially, the Board
expected the evaluation to be finalised during 2024.
Operating environment
The operating environment of Lindex Group continued to
be challenging throughout the year 2024. Geopolitical and
political tensions continued impacting the economies in
Europe and globally. The economies of the Group’s main
markets stagnated and reported weak GDP development
despite the fact that inflation eased up and declined in most
markets. The lowered inflation and interest rates started
to support the gradual economic recovery and strengthen
consumers’ purchasing power on some markets while
on some other markets, unemployment increased and
impacted consumer confidence.
The Economic Sentiment Indicator (ESI) and Employment
Expectations Indicator (EEI) declined in many EU countries,
but the retail trade confidence remained broadly stable.
Consumer confidence declined due to the notably more
pessimistic general economic situation in many EU
countries, negatively affecting consumers’ intentions to
make major purchases. By contrast, consumers’ views
about their households’ expected financial situation and
past financial situation remained largely unchanged.
However, economic situations and consumer sentiment vary
among the EU countries. (Source: The EU Commission’s
Business and Consumer Survey.) Towards the end of the
year, there were signs of gradual economic recovery as
several markets benefit from increasing spending power
among households, lower interest rates and gradual
demand growth.
In terms of the development of the fashion market, sales
in the Swedish fashion market showed a 8.2% decline
from January to December. (Source: Swedbank Pay &
Swedbank Makroanalys.) In Finland, the fashion market
sales declined by 3.4% in January–December. However,
the last two months of the year showed initial signs of a
potential recovery. (Source: Fashion and Sports Commerce
association.)
Revenue and earnings, Lindex Group
In January–December, Lindex Group’s revenue decreased
by 1.2% to EUR 940.1 (951.7) million. In local currencies,
the revenue decreased by 1.3%. The Lindex division’s
revenue decreased by 0.7% and by 0.9% in local
currencies, impacted by the continued volatility of the
fashion market as well as logistical challenges mainly in the
third quarter. The Stockmann division’s revenue decreased
by 2.2% due to an overall decline in the fashion market in
the division’s key markets.
Lindex Group’s gross profit decreased to EUR 547.9
(554.2) million. The Group’s gross margin remained at the
comparison period level, at 58.3% (58.2).
The comparable operating costs increased to EUR 392.5
(380.1) million mainly due to cost inflation and digital
development enabling future growth in the Lindex division.
The Group’s adjusted operating result decreased to EUR
74.9 (80.0) million. The decrease is explained by lower
gross profit and increased costs in the Lindex division. The
operating result decreased to EUR 60.9 (76.5) million and
included items affecting comparability of EUR 10.9 (2.6)
million related to the restructuring programme and other
disputes.
The Group’s net result for the full year decreased to 13.2
(51.7) million due to lower operating result and increased
tax expenses. The tax expenses in the comparison period
were impacted by a positive tax decision for Lindex Holding
AB (former Stockmann Sverige AB).
Report of the Board of Directors
6
Items affecting comparability (IAC)
EUR million
2024
2023
Operating result | 60.9 | 76.5 |
Adjustments to | ||
Costs related and other disputes | 10.9 | 2.6 |
Costs related to strategic and development | 7.5 | 2.3 |
Insurance claim settlement for to COVID-19 | -4.4 | |
Loss on disposal | 0.6 | |
Other operating income from modifications of sale-and-leaseback | -2.1 | |
Adjusted operating | 74.9 | 80.0 |
EUR million | 1–12 2024 | 1–12 2023 |
Net result for | 13.2 | 51.7 |
Adjustments to | 14.0 | 3.5 |
Adjustments to | -2.8 | -30.1 |
Adjusted net result | 24.4 | 25.1 |
Financing and cash flow
Cash and cash equivalents totalled EUR 114.7 (137.5)
million at the end of December. Investments affected the
operating free cash flow by EUR 13.3 (18.2) million.
At the end of December, total inventories were EUR 169.6
(162.9) million. The Lindex division’s inventories increased
mainly due to logistical challenges during the third quarter
and the beginning of the fourth quarter. The Stockmann
division’s inventories declined due to good inventory
management, including proactive adjustments of intake
levels.
At the end of December, the Group had an interest-bearing
liability of a non-current senior secured bond of EUR
73.1 (71.9) million. The increase in the bond liability is
explained by creditors choosing the bond as a payment for
restructuring debts. The lease liabilities under the IFRS 16
reporting standard totalled EUR 603.1 (587.2) million, where
the lease liabilities related to the Lindex division were EUR
272.9 (257.6) million. In the Stockmann division, the lease
liabilities were on par with the previous year at EUR 330.2
(329.5) million. Excluding the IFRS 16 lease liabilities, the
interest-bearing net debt was positive at EUR -31.8 (-65.6)
million. In 2023 the Group signed a loan agreement for a
revolving credit facility of EUR 40 million, which has not
been used during 2023 –2024.
The equity ratio was 30.0% (29.9) and net gearing 145.0%
(133.2) at the end of December. IFRS 16 items had a
significant impact on the equity ratio and net gearing.
Excluding the IFRS 16 items, the equity ratio was 61.9%
(60.6) and net gearing was -6.2% (-12.8).
The Group’s capital employed at the end of December
was EUR 1 080.0 (1 050.7) million and EUR 598.6 (587.6)
million excluding the IFRS 16 items.
Capital expenditure
In the fourth quarter, capital expenditure totalled EUR
20.5 (11.5) million. It was mainly used for The Lindex
omnichannel distribution centre is the division’s largest-
ever investment and it proceeded as planned. It will be an
important enabler for continued growth, improved efficiency
and addressing current capacity constraints. The investment
amounts to approximately EUR 110 million between 2022
and 2025. By the end of the year 2024, EUR 96.3 million
of the total investment sum has been used for the project.
Launch of the centre took place in November 2024, followed
by a ramp-up and transition phase that is estimated to
continue during the first half year of 2025. The new facility is
planned to be fully operational in 2025 and it will replace the
current warehouses of the Lindex division.
The Lindex division is driving digitalisation in its store
network with a digital store programme, which includes
various digitalisation initiatives such as implementing a
new mobile POS (Point of Sales) system, rolling out new
mobile devices to all stores and integrating RFID technology
to improve process efficiency and elevate the customer
experience.
The Stockmann division launched a new packing
automation system for e-commerce orders in the third
quarter, which improves omnichannel performance and
operational efficiency in its distribution centre. During the
year, Stockmann also continued to develop its department
stores into inspiring shopping destinations with renovations
in the Helsinki flagship store and the Tallinn department
store. In addition, implementation of RFID technology
was completed in all department stores within the fashion
category contributing to enhancing customer experience
and operational efficiency. A new data-driven staff planning
solution and HR system were also taken into use during the
year to enhance efficiency.
Revenue and earnings by division
Lindex 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.
Report of the Board of Directors
7
Lindex division
1–12
2024
1–12
2023
The Lindex division’s revenue was on par with the
comparison period at EUR 628.8 (633.1) million. In local
currencies, the revenue decreased by 0.9%, with stores
showing a decline of 3.0% and digital channels showing an
increase of 8.3%. The revenue was impacted by the fashion
market’s continued volatility throughout the year as well
as logistical challenges mainly in the third quarter. Digital
revenue accounted for 20.8% (19.0) of Lindex’s revenue.
The gross profit decreased and totalled EUR 409.1 (414.4)
million, and the gross margin was stable 65.1% (65.4). The
lower gross profit was explained by the decrease in revenue
combined with higher freight costs and higher share of
promotions.
Stockmann division
1–12
Revenue, EUR | 311.6 | 318.5 |
Revenue growth, | -2.2 | -0.6 |
Digital share | 12.7 | 12.4 |
Digital revenue | 0.2 | -2.2 |
Gross profit, EUR | 138.8 | 139.8 |
Gross margin, | 44.5 | 43.9 |
Adjusted operating | -3.9 | -6.3 |
Adjusted operating | -1.3 | -2.0 |
Operating result, | -14.2 | -5.6 |
Operating margin, | -4.6 | -1.7 |
Inventories, EUR | 55.8 | 62.6 |
Capital expenditure, | 5.8 | 7.2 |
2024
1–12
2023
REVENUE
|
By market
1–12/2024
SWEDEN
53%
NORWAY
20%
FINLAND
12%
OTHER
15%
REVENUE
|
By channel
1–12/2024
STORES
79%
DIGITAL CHANNELS
21%
The comparable operating costs increased to EUR 256.5
(251.8) million mainly due to cost inflation and digital
development projects enabling future growth.
Revenue, EUR | 628.8 | 633.1 |
Revenue growth, | -0.7 | -4.2 |
Local currency | -0.9 | 2.7 |
Digital share | 20.8 | 19.0 |
Digital revenue | 8.3 | 5.3 |
Gross profit, EUR | 409.1 | 414.4 |
Gross margin, | 65.1 | 65.4 |
Adjusted operating | 82.9 | 90.3 |
Adjusted operating | 13.2 | 14.3 |
Operating result, | 85.1 | 89.1 |
Operating margin, | 13.5 | 14.1 |
Inventories, EUR | 113.8 | 100.2 |
Capital expenditure, | 39.9 | 57.9 |
Stores | 442 | 439 |
The Lindex division’s adjusted operating result decreased
to EUR 82.9 (90.3) million due to the lower gross profit and
increased operating costs. The operating result for Lindex
was EUR 85.1 (89.1) million.
Capital expenditure was EUR 39.9 (57.9) million. The
comparison period included higher investments in the
Lindex omnichannel distribution centre.
In 2024, Lindex opened eleven new stores and closed eight
stores.
During the year, Lindex continued to attract both new
and active customers, and the number of registered
customers increased significantly from the comparison year.
Lindex also further expanded its markets presence with
partnerships reaching new markets and customers.
REVENUE
|
By market
1–12/2024
76%
24%
REVENUE
|
By channel
1–12/2024
77%
13%
SERVICE AND
10%
Report of the Board of Directors
8
The Stockmann division’s revenue decreased by 2.2% to
EUR 311.6 (318.5) million. The division’s revenue totalled
EUR 235.3 (242.8) million in Finland and EUR 76.3 (75.8)
million in the Baltics. The digital revenue increased by 0.2%
and accounted for 12.7% (12.4) of total revenue. The best
performing categories, beauty and food clearly exceeded
the sales of the comparison period. The revenue decline
derived mainly from the lower sales of the fashion category.
Stockmann’s fashion category sales developed in line with
overall fashion market performance, which was below the
previous year.
The number of new loyal customers increased significantly
and the share of revenue from loyal customers increased
from the previous year.
The gross profit was at the level of the comparison period,
at EUR 138.8 (139.8) million. The gross margin increased to
44.5% (43.9) due to enhanced inventory management and
more favourable sales mix with improved margins.
The comparable operating costs decreased to EUR 113.5
(118.1) million due to the systematic and successfully
implemented cost efficiency measures which also mitigated
the inflation impact.
The Stockmann division revised its organisational structure
to support the efficient strategy implementation. The
changes improving efficiency, simplifying management
structures as well as clarifying roles and responsibilities
affected part of the Stockmann division’s personnel in
all operating countries: Finland, Estonia and Latvia. The
changes are estimated to generate annual savings of EUR
2.7 million, materialising mainly from 2025 onwards.
The adjusted operating result improved to EUR -3.9 (-6.3)
million due to successful cost savings and improved gross
margin. The operating result declined to EUR -14.2 (-5.6)
million impacted by costs related to the restructuring
programme and other disputes.
Capital expenditure was EUR 5.8 (7.2) million and was
mainly related to investments in digital growth and
department store renovations.
Personnel
Lindex Group’s average number of personnel during the
the reporting period was 5 746 (5 801). In terms of full-time
equivalents, the average number of employees was 4 216
(4 283). At the end of December, Lindex Group’s personnel
numbered 5 995 (6 062), of whom 1 541 (1 547) were
working in Finland, 2 093 (2 071) in Sweden and 2 361
(2 444) in other countries. The Group’s wages and salaries
amounted to EUR 161.0 (163.5) million in 2024.
The Lindex division introduced a new operating model
in the third quarter to drive its transformation and secure
future growth and profitability, with sustainability at the core.
The new operating model encompasses the organisation’s
structure, processes, technology and people. Through
the change, Lindex seeks to enhance its organisational
efficiency across the value chain.
The Stockmann division’s revised organisational structure
was taken into use on 1 July 2024. The changes were
made to support efficient strategy implementation and are
estimated to generate annual savings of EUR 2.7 million,
materialising mainly from 2025 onwards.
Changes in management
On 26 April 2024, Lindex Group announced that its
Chief Financial Officer (CFO) and member of the Group
Management Team Annelie Forsberg would be leaving the
company to pursue new career opportunities outside the
company. She continued working at the Group until the end
of August 2024.
On 14 May 2024, Lindex Group announced that Chief
Operating Officer (COO) of the Stockmann division
and member of the Group Management Team Tove
Westermarck would be leaving the company to join a new
employer.
On 19 June 2024, Riku Lyly, M.Sc., was appointed as
interim Chief Operating Officer (COO) of Stockmann
division. He started in the position on 15 August 2024.
On 4 July 2024, Lindex Group appointed Henrik
Henriksson, M.B.A., Finance and General Management,
as the company’s new Chief Financial Officer (CFO) and
a member of the Group Management Team. In addition to
his role as Group CFO, Henriksson also acts as the Lindex
division’s CFO. He took up his new position on 1 September
2024.
On 6 November 2024, Riku Lyly, M.Sc., was appointed
Chief Operating Officer (COO) of the Stockmann division
and member of the Lindex Group Management Team. Prior
to the appointment, he held the same position as Interim
COO.
Annual General Meeting 2024
The Annual General Meeting (AGM), held on 21 March
2024, adopted the financial statements for the financial year
1 January–31 December 2023, granted discharge from
liability to the persons who had acted as members of the
Board of Directors and as CEO during the financial year
and resolved that no dividend be paid for the financial year
2023.
Report of the Board of Directors
9
The AGM resolved to change the company’s business name
from Stockmann plc to Lindex Group plc, and to change
Article 1 of the company’s Articles of Association as follows:
The company’s business name in English is Lindex Group
plc, in Finnish Lindex Group Oyj, in Swedish Lindex Group
Abp and it is domiciled in Helsinki. Furthermore, the AGM
decided to change the company’s Articles of Association to
enable the arrangement of a General Meeting as a virtual
meeting without a meeting venue as an alternative for a
physical meeting or a hybrid meeting.
The decisions by the AGM were published in full as a stock
exchange release on 21 March 2024.
Shares and share capital
At the end of December, Lindex Group plc had a total of
161 622 896 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 434.8
million (460.3). The price of a LINDEX share was EUR 2.69
(2.90) at the end of December 2024. In January –December,
the highest price of a LINDEX share was EUR 3.51 (3.03)
and the lowest price was EUR 2.39 (1.68). A total of 28.3
million shares were traded on Nasdaq Helsinki in January–
December. This corresponds to 17.6% 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, Lindex Group
had 41 055 (42 328) shareholders. Foreign ownership was
27.3% (24.1).
Business continuity, risks and near-term
uncertainties
Lindex Group operates in a dynamic and complex
environment that exposes the company to a range of risks
that may affect its financial performance, operations, and
reputation. These risks arise from macroeconomic factors,
seasonal variations, complex supply chains, information
security threats, and increasing sustainability risks,
among others. Below is an overview of the key risks and
uncertainties affecting the Group.
Macroeconomic situation
Inflation and interest rate levels may continue to pose
challenges for the Lindex Group despite the levels
decreasing throughout the year 2024. Inflation -related cost
increases impact the Group’s operational expenses while
also constraining customers’ purchasing power. These
pressures may continue to impact customer behaviour
and shift demand between different product categories.
Additionally, macroeconomic uncertainties may affect asset
valuations, and interest rate fluctuations may impact the
discount rates used in impairment testing.
Exchange rates
Lindex Group’s revenue, earnings, and balance sheet
are influenced by changes in exchange rates, particularly
between the euro (the Group’s reporting currency) and other
key currencies, such as the Swedish krona, Norwegian
krone, and the U.S. dollar. Since the Group’s operations
span multiple countries, currency fluctuations may affect
its financial performance. Due to the ongoing corporate
restructuring, the Group’s ability to fully hedge against
transactional currency risks is currently limited, leaving it
exposed to potential currency volatility.
Seasonality
Seasonal variations are an inherent characteristic of the
retail industry and significantly impact Lindex Group’s
revenue and profitability. Typically, revenue is lower in
the first quarter, while the second and fourth quarters
experience higher sales activity. Fashion, which accounts
for approximately 80% of the Group’s revenue, is
particularly sensitive to seasonal trends and weather
conditions. Additionally, the timing of the Stockmann
division’s ”Crazy Days” campaign has a significant
impact on quarterly revenue and operating results, as the
campaign drives a surge in consumer activity during the
period it is held.
Supply chain and logistics
The global value chain in the retail sector is inherently
complex, involving multiple stages from sourcing to final
delivery. Lindex Group faces risks related to labour rights,
environmental standards, and ethical business practices.
Unexpected disruptions in the supply chain, such as delays
in shipments or production stoppages, may increase
operational costs. Given the Group’s reliance on a global
supply network, unexpected logistics issues could lead
to higher freight costs and longer lead times, potentially
affecting inventory availability and customer satisfaction.
The Group is receiving market signals of possibly increasing
protectionism and potentially rising trade barriers, which
may present additional challenges for the global supply
chain and logistics operations.
Sustainability risks
Sustainability-related risks have become increasingly
significant for Lindex Group, with climate change specifically
identified as an economic risk for the company. These
risks concern the Group’s ability to manage environmental
impacts and adapt to changing regulations and expectations
regarding sustainability efforts and reporting.
Report of the Board of Directors
10
Information and cybersecurity
As professional cybercrime becomes increasingly
sophisticated, there is an elevated risk of cyberattacks
targeting Lindex Group’s information systems. Such attacks
could disrupt business continuity, compromise customer and
employee data privacy, and damage the Group’s reputation.
Protection against cyber threats requires continuous
investment in robust information security measures and
proactive risk management.
Employee turnover and retention risk
The risk of losing key personnel has been identified and
included as a critical component of the employee turnover
risk. Ensuring that key personnel remain within the
organization is vital for maintaining operational continuity
and successfully implementing strategic initiatives.
Restructuring programme
The restructuring programme of the Group is progressing.
The sale of all department store properties has been
completed, and interest -bearing debt has been reduced,
leaving only a EUR 73.1 million bond remaining. One
unresolved claim related to a terminated lease agreement
remains as a risk that must be addressed before the
restructuring process can be concluded. Successfully
resolving this claim is crucial for completing the
restructuring process. The ongoing restructuring programme
may have an impact on the near-term refinancing.
Disputes related to the restructuring
process
All confirmed undisputed debts have been duly paid. There
was still one disputed claim left at the end of December with
the total amount of EUR 15.9 million. By end of December
2023, the comparable disputed amount was EUR 43.7
million, which consisted of three disputed claims. The
remaining disputed claim is related to the termination of a
long-term lease of premises, where the creditor is claiming
payment for all remaining years in the terminated lease
contract. The supervisor of the restructuring programme
has disputed the claim and considers it justified to pay 18
months’ compensation for the lease.
Lindex Group plc has made a provision of EUR 15.9 million
for the full amount of the disputed claim and is having
ongoing discussions with the creditor and the supervisor of
the restructuring programme to solve the dispute. If it is not
solved with the creditor and the administrator, the dispute
will be settled in the Court of Appeal. After the claim has
been solved or settled, the creditor will be entitled to a cash
payment and to converting 20% of its receivable to shares.
LähiTapiola Keskustakiinteistöt Ky, the landlord of
Stockmann’s Tapiola department store, initiated arbitration
proceedings against Lindex Group plc in which the company
demanded up to EUR 43.4 million in compensation
from Lindex Group plc 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 Lindex Group plc, 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 3.5 million was converted to
shares and paid. Lindex Group plc 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 Lindex Group plc. As a result, EUR 15.9 million is seen
as a disputed case again. The remaining compensation
to be paid has been recognised as a provision and will be
re-classified as restructuring debt after the confirmation of
the Court. An arbitration procedure separate from Lindex
Group 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
appealed to the Helsinki District Court to amend Lindex
Group plc’s restructuring programme so that the amount
of the restructuring debt, based on the arbitration decision,
would be confirmed at EUR 19.3 million. Lindex Group
plc, 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 applied for leave to
appeal to the Supreme Court. The leave to appeal was not
granted. In October 2024, in a dispute between LähiTapiola
Keskustakiinteistöt Ky and Stockmann AS Helsinki, District
Court confirmed that the compensation to be paid to
LähiTapiola Keskustakiinteistöt Ky is compliant with the
restructuring programme and that the amount is EUR 3.5
million. LähiTapiola appealed the District Court’s decision
to the Court of Appeal. In November 2024, The District
Court of Western Uusimaa dismissed Lindex Group plc’s
claim regarding the nullity and the application for annulment
Report of the Board of Directors
11
regarding the decision given in the arbitration proceedings.
In December 2024, Lindex Group plc appealed the District
Court’s decision to the Court of Appeal.
Nordika II SHQ Oy, the landlord of Lindex Group plc’s former
Takomotie office space, had filed a claim with the Helsinki
District Court in which the company demanded compensation
amounting to a maximum of EUR 14.5 million from Lindex
Group plc in accordance with section 27, subsection 1 of the
Restructuring Act. This claim was 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 was still
a claim. In the same claim, Nordika II SHQ Oy had named
the supervisor and Lindex Group plc as respondents. In
April 2024, Lindex Group plc and disputed creditor Nordika
II SHQ Oy reached a settlement agreement, which ended
the disputed claims between the parties concerning the
restructuring programme. The Helsinki District Court
confirmed the amendment of the restructuring programme’s
payment programme on 6 June 2024 and the settlement
agreement was executed in August 2024.
Tampereen Seudun Osuuspankki, the second lessor of
the Tampere department store, had initiated proceedings
at the Pirkanmaa District Court in which the company
demands up to EUR 14.5 million compensation from Lindex
Group plc in accordance with section 27, subsection 1 of
the Restructuring Act. In the restructuring programme, the
supervisor had 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 exceeded EUR 2.0 million.
On 6 February 2024, Lindex Group plc and Tampereen
Seudun Osuuspankki reached a settlement agreement,
which ended the disputed claims between the parties
concerning the restructuring programme. The Helsinki
District Court confirmed the amendment of the restructuring
programme’s payment programme on 26 March 2024, and
the settlement agreement was executed in June 2024.
On 25 January 2024, 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 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 were confirmed to its final amount
by 9 November 2023. The new shares were registered with
the Finnish Trade Register on 26 January 2024.
On 25 January 2024, Lindex Group plc 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
amounts of such receivable had been confirmed. The
Subsequent Bonds duly subscribed for by the entitled
person in question amount to the aggregate principal
amount of EUR 1 120 000. The receivable of the entitled
person will be converted, by way of set-off, into Subsequent
Bonds. The Subsequent Bonds will be settled through
the clearance system of Euroclear Finland Ltd and will
be recorded in the book-entry accounts maintained by
Euroclear Finland Ltd as soon as practicably possible.
Lindex Group plc 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”.
On 19 June 2024, 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 2 599 852 new shares of the
company in deviation from the shareholders’ pre -emptive
subscription rights to creditors of the company whose
previously conditional or disputed restructuring debts under
the restructuring programme were confirmed to their final
amounts by 13 June 2024, and approved the subscriptions
made in the share issue. The new shares were registered
with the Finnish Trade Register on 24 June 2024.
Events after the financial year
Lindex Group plc announced on 7 February 2025 that the
rental agreement for the Stockmann Itis department store in
Helsinki will expire on 1 August 2025. The company plans to
close the department store and will start change negotiations
concerning the entire personnel of the Itis Stockmann
department store. The negotiations are estimated to take
approximately six weeks, and the company will announce
the outcome of the negotiations once the negotiations have
ended. If materialised, the planned closure would not have a
material impact on the profitability or financial position of the
Stockmann division or Lindex Group.
Financial releases in 2025
The Annual General Meeting is planned to be held on
2 April 2025.
Lindex Group will publish its financial reports in 2025 as
follows:
•
•
•
Helsinki, 6 March 2025
Lindex Group plc
Board of Directors
Sustainability
Statement
Report of the Board of Directors
13
GENERAL INFORMATION
ESRS 2
General
disclosures
BP–1
General basis for preparation of sustainability
statements
Lindex Group’s Sustainability Statement is prepared in
accordance with the European Sustainability Reporting
Standards (ESRS) as defined in the EU’s Corporate
Sustainability Reporting Directive (CSRD). The
Sustainability Statement covers Lindex Group plc and its
subsidiaries for the period of 1 January–31 December
2024. The Sustainability Statement has been prepared
on the same consolidated basis as the Group’s 2024
Financial Statements.
Lindex Group’s divisions are Lindex and Stockmann. Both
divisions have conducted their own double materiality
assessments, which address the impacts, risks and
opportunities throughout the value chain. Based on the
divisions’ double materiality assessments, materiality for
the Group has been decided. The extent to which Lindex
Group’s policies, actions, targets and metrics extend to
the value chain is described in connection with the topical
standards.
The Group has identified material impacts, risks, and
opportunities related to pollution, water, and biodiversity
across its value chain. However, due to limited access to
relevant data, the Group will not disclose entity-specific
metrics related to those material impacts, risks, and
opportunities across the value chain. Efforts are made in the
future to enhance data accessibility.
Lindex Group has not omitted information corresponding to
intellectual property, know-how or the results of innovation
from the Sustainability Statement. The Group has not
omitted disclosure of any impending developments or
matters that are currently in the course of negotiation.
BP–2
Disclosures in relation to specific circumstances
The Group has not deviated from the medium - or long-term
time horizons defined by ESRS. The Group has included
value chain data into its greenhouse gas calculations,
some of which are based on estimates. Metrics involving
estimated data are further detailed in
E1-6 Gross Scopes
1,2,3 and Total Greenhouse Gas Emissions.
Report of the Board of Directors
14
Sources of estimation and outcome uncertainty
Metric that is subject to a level of measurement uncertainty | Sources of measurement uncertainty | Assumptions, approximations judgements made in measurements |
E1-6 Scope 3 cat 7 Employee commuting | Employee commuting emission were only partly based on survey The majority is based on estimations both the distances and travel | Approximations have been survey result or of assessment of average distance to the workplace Generic approximations has been the result. |
E1-6 Scope 3 cat 9 Downstream transportation and distribution | Customers’ commuting emissions based on estimations of number customers traveling to the stores, distance they travel, and their transportation. | It is assumed that customers to stores located further from so called “stand-alone stores”. Number customers commuting is therefore by either stores, or number of receipts from (when number of customers are Transportation mode and part estimated according to Finnish Travel Survey published |
E1-6 Scope 3 Use of sold products | Emissions from use of sold products, number of appliances and number textile pieces sold, and their estimated weight were used. Energy used appliances or for washing and textiles have been estimated. | The emissions are estimated appliances and number of textile |
E1-6 Scope 3 cat 12 End-of-life treatment of sold products | For emissions from use of sold number of appliances and number textile pieces sold, and their estimated weight were used. Energy used appliances or for washing and textiles have been estimated. | Estimations were based on units recalculated to weight. Assumptions of waste are partly based on countries recycling rate published by European |
The most significant change in the preparation and
presentation of sustainability information is that previous
reports were prepared using GRI standards and were
not externally assured, whereas this report follows ESRS
standards and has been assured by a third party.
Compared to the previous reporting period, no material prior
errors have been identified.
The Sustainability Statement includes the EU Taxonomy
report, and the report is presented in the beginning of
E1
Climate Change
. Apart from the Taxonomy reporting, the
Group has not included information derived from other
legislation or generally accepted sustainability reporting
standards and frameworks in the Sustainability Statement.
Disclosure requirement | Incorporated by |
Disclosure requirement | Financial statements |
The material information to be disclosed has been
determined using the criteria outlined in
ESRS 1, Section
3.2: Material Matters and Materiality of Information
. No
specific thresholds were applied when identifying material
information for the sustainability statement. However, the
Group has used thresholds to assess whether a topic
is material. These thresholds have been applied to both
impact materiality and financial materiality. The thresholds
and the methodology used to determine materiality are
further detailed in
IRO-1: Description of the Processes
to Identify and Assess Material Impacts, Risks, and
Opportunities.
Report of the Board of Directors
15
GOV–1
The role of the administrative,
management and supervisory bodies
Lindex Group’s governance consist of the Board of
Directors, Audit Committee, People and Remuneration
Committee, and Group Management team.
Lindex Group’s Board of Directors has six members, of
which 50% are women and 50% are men. All members of
the Board are non-executive members and independent of
the company. Five members (83%) are also independent
of major shareholders. In addition, the Board has two
employee representatives who are entitled to attend and
speak at the meetings, however, they are not members of
the Board of Directors.
The Board of Directors oversees that the members of
Board committees and Group Management Team possess
the appropriate skills and expertise related sustainability
matters by ensuring that sustainability impacts, risks, and
opportunities are integrated into business processes. Both
divisions have a director responsible for sustainability
matters with specific expertise in their Management Team.
There are currently no individual responsibilities for impacts,
risks and opportunities outlined in the terms of reference, or
board mandates for the Board members.
The Board of Directors has an adequate level of
competence in environmental and social topics and in the
evaluation of the Group’s impacts, risks and opportunities.
The competence level was evaluated through an
engagement with the Board of Directors, during which
they conducted a self -assessment of their expertise on
environmental and social topics. However, the Board has
an ambition to further increase competence related to
sustainability and material impacts, risks, and opportunities.
The Board leverages internal experts from both divisions, as
well as external specialists, to address specific sustainability
topics as needed.
The Audit Committee has three members, of which 33%
are women and 67% are men. All members of the Audit
Committee are non-executive members, and independent
of the company and of major shareholders. There are
no employee representatives in the Audit Committee. All
members of the Audit Committee are also members of the
Board of Directors.
The People and Remuneration Committee has four
members, of which 75% are women and 25% are men. All
members are non-executive members, and independent of
the company. Three out of four members are independent of
major shareholders. There are no employee representatives
in the People and Remuneration Committee. All members of
the People and Remuneration Committee are also members
of the Board of Directors.
The Group Management Team has four members, of
which 25% are women and 75% are men. All of the Group
Management Team members are executive members.
There are no representatives of employees in the Group
Management Team.
The Group’s Board of Directors and Group Management
Team comprise individuals with diverse backgrounds. Their
expertise spans the Group’s operating sector, the specific
products it offers, and the geographical region of Europe in
which it operates.
The Board is ultimately responsible for overseeing business
conduct matters, while the day-to-day operations and
decisions are handled by the division management teams.
The Board of Directors is kept informed of business
conduct-related issues whenever necessary. The Board
of Directors, the Group Management Team, and the
division leadership teams comprise individuals with diverse
People and Remuneration Committee
of the Board of Directors
•
Oversees the remuneration process
•
Monitors the remuneration principles
and personnel principles
Group Management Team
Sustainability governance at Lindex Group
Board of Directors |
• Board of Directors • • business strategy • |
Audit Committee Board of Directors |
• Management (ERM) process • process and internal controls |
•
•
•
Divisions’ Leadership |
•
responsible for their performance
•
opportunities and integrates them to the strategy
•
with Group policies
backgrounds such as in finance, human resources, legal,
and sustainability, collectively providing comprehensive
expertise on business conduct matters.
Report of the Board of Directors
16
GOV–2
Information provided to, and sustainability
matters addressed by the undertaking’s
administrative, management and supervisory
bodies
Sustainability matters are discussed on a regular basis
in Lindex Group’s Board of Directors, Audit Committee
and Group Management Team to ensure that material
impacts, risks and opportunities are integrated into
business strategies and that appropriate due diligence
processes are in place. Currently, only the Lindex division
has implemented a Human Rights Due Diligence (HRDD)
process, while Stockmann division is expected to develop
one in the upcoming years.
The Board of Directors discusses sustainability topics
several times a year. The Lindex division’s Chief
Sustainability Officer addresses the Board of Directors with
various themes, such as group-level science -based targets
and sustainability-related impacts, risks and opportunities.
The Lindex division’s Chief Sustainability Officer gives an
update on the Group’s sustainability reporting process in
quarterly Audit Committee meetings. The Audit Committee
and the Board of Directors discusses the Enterprise Risk
Management (ERM) process annually, which is led by the
Chief Legal Officer and Chief Financial Officer.
The Board of Directors approves Group-level sustainability
policies and targets, such as the Environmental Policy,
human rights policies, and Science-based targets for
climate action. The target progress is monitored annually
in connection with the sustainability reporting process. The
Lindex division’s Chief Sustainability Officer is responsible
for including sustainability topics to the Group Management
Team’s agenda.
Sustainability matters are addressed monthly at the Lindex
division’s Leadership Team meetings and quarterly in the
Stockmann division’s Leadership Team meetings. The
leadership teams focus on integrating material impacts,
risks and opportunities into the divisions’ strategies, and
defining related actions, metrics and targets.
All the material impacts, risks and opportunities defined
in the double materiality assessment were addressed by
the division’s leadership teams as well as the Board of
Directors and the Audit Committee during the reporting
period. The list of material impacts, risks, and opportunities
is available in subchapter
SBM-3 Material impacts, risks
and opportunities and their interaction with strategy and
business model.
The impacts, risks, and opportunities
related to climate and circular transformation have been
discussed in depth with the Board, while other topics have
been covered more generally, primarily through the double
materiality assessment results.
GOV–3
Integration of sustainability-related performance
in incentive schemes
To guarantee the independence of the members of the
Board of Directors and the Audit Committee, they do not
have incentive schemes or remuneration policy linked to
sustainability.
Lindex Group has a science-based climate target to reduce
its absolute greenhouse gas (GHG) emissions by 42% in
its own operations and value chain (Scopes 1–3) by 2030
compared to 2022. The target is linked to and used as a
performance benchmark in the Group management team’s
as well as both divisions’ long-term incentive schemes.
Sustainability-related metrics in general are incorporated
into Group remuneration policy through both short - and
long-term incentives.
According to the Lindex division’s long-term incentive
schemes for 2022–2024 and 2023–2025, 10% of the
variable remuneration is dependent on achieving annual
climate target. Both divisions’ Leadership team’s long-term
incentive scheme for 2024-2026 includes 10% weight to
achieve climate targets.
The Group Management Team, including CEO’s, long-
term incentive scheme has a 50% weight on the divisions’
results, of which each division has the same weight.
Remuneration connected to climate targets is based on the
divisions’ long-term incentive schemes, giving a possible
remuneration connected to climate targets of 2.5% weight
for 2022–2024 and 2023 –2025 if Lindex division meets its
target, and 5% weight for 2024–2026 if both divisions meet
its targets.
The People and Remuneration Committee of the Board of
Directors prepares the incentive schemes. The Board of
Directors approves all the incentive schemes.
Report of the Board of Directors
17
GOV–4
Statement on sustainability due diligence
Elements of due diligence | Paragraphs in the sustainability statement |
Embedding due diligence in governance, strategy, and business model | GOV-1 The role SBM-3 Material impacts, risks, S1-1 Policies related to own workforce S2-1 Policies related to value S3-1 Policies related to affected S4-1 Policies |
Engaging with affected stakeholders in all key steps of due diligence | SBM-2 Interests IRO-1 Description of the process S1-2 Processes for engaging with S2-2 Processes for engaging with S3-2 Processes for engaging with S4-2 Processes |
Identifying and assessing adverse impacts | SBM-2 Interests IRO-1 Description |
Taking address impacts | S1-4 Taking pursuing material opportunities related S2-4 Taking pursuing material opportunities related S3-4 Taking and pursuing material opportunities S4-4 Taking risks and pursuing material opportunities actions |
Tracking the effectiveness of these efforts and communicating | S1-5 Targets material risks and opportunities S2-5 Targets material risks and opportunities S3-5 Targets material risks and opportunities S4-5 Targets material risks and opportunities |
Report of the Board of Directors
18
GOV–5
Risk management and internal controls over
sustainability reporting
Lindex Group integrates sustainability risks into its overall
risk management framework. This includes identifying,
assessing, and mitigating risks related to sustainability
reporting. The Board of Directors has approved the
company’s risk management principles, which apply to both
divisions of Lindex Group. The effectiveness of internal
control is monitored by the Internal Audit, which operates
independently and reports to the Board’s Audit Committee.
The Group Finance department determines the control
measures applied to the sustainability reporting process.
These control measures include various guidelines,
process descriptions, reconciliations, and analyses used for
ensuring the validity of the information used in the reporting
and the validity of the reporting itself.
A thorough risk assessment regarding sustainability
reporting will be conducted during 2025 according to Lindex
Group’s risk management framework.
Lindex Group’s sustainability reporting is exposed to the risk
of material misstatement due to human error or incomplete
data. To mitigate this risk, the emission figures, and other
quantitative sustainability data, are monitored and any
anomalies in comparison to the previous year’s figures are
analysed. Third party consultants are used to calculate
emission figures, and validate both emission figures, and
qualitative sustainability information. The qualitative data is
reported by both Lindex and Stockmann division’s subject
matter experts and validated by the Chief Sustainability
Officer/the Head of Sustainability.
The reporting process is monitored by the Audit Committee
in quarterly meetings. Information on the material topical
ESRS disclosures is collected via a dedicated sustainability
reporting software application. This process facilitates
data collection, provides transparency and traceability of
the data, and it enables collection of data based on the
accounting principles outlined by the ESRS, which further
facilitates compliance. Lindex Group’s external sustainability
auditor provides limited assurance on the Sustainability
Statement. More information available in the sustainability
auditor’s limited assurance statement.
Report of the Board of Directors
19
SBM–1
Strategy, business model and value chain
Lindex Group is an international fashion and retail group
with two divisions: Lindex and Stockmann. The Lindex
division is a global fashion company with a purpose to
empower and inspire women everywhere. The Stockmann
division 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. Lindex Group operates an
asset-light business model. Its own brand’ products are
designed in-house and manufacturing is outsourced to
independent suppliers.
EMPOWER
WOMEN
RESPECT
THE PLANET
ENSURE
HUMAN RIGHTS
The Lindex division’s
sustainability strategy
We promise to make a difference
for future generations
The Group’s operational activities include stores,
department stores, e-commerce, logistic centres and
production offices. The Lindex division’s main part of
revenue comes from selling its own brand products in three
major business areas: women’s fashion, lingerie and kids’
wear. The majority of the Stockmann division’s revenue
comes from the retail business, where it sells its own
brand’s products as well as procures products from other
companies. The Group has product categories in textiles,
cosmetics, home products and food.
The Lindex and Stockmann divisions have their own
strategies targeting sustainable and profitable growth.
The Lindex division’s three strategic must -win areas are to
accelerate growth, transform into a sustainable business,
and decouple cost from growth. The Stockmann division’s
four strategic must-win areas are to elevate offering by
increasing focus on premium and luxury, grow and leverage
the loyal customer base, optimise omnichannel performance
and improve operational efficiency.
In line with the business strategies, Lindex and Stockmann
have their own sustainability strategies, which address
climate, circularity and human rights. The Lindex division’s
Female health
and wellbeing
Investing and using our business
power to improve women’s health
and wellbeing in the markets and
communities where we operate.
Gender inclusive
workplaces
Taking the lead in strengthening
women’s positions and equal
rights across our entire value
chain, closing gender pay gaps
and making sure women have the
same opportunities to fulfil their
potential as men have.
Climate
Accelerating energy efficiency
and transitioning to renewable
energy, to reduce our climate
impact in line with science in our
entire value chain.
Circularity
Transforming our business
to create value and growth
while decreasing our climate
impact, minimising our use of
natural resources and impacting
consumer behaviour to reduce
overconsumption.
The sustainability strategy
promotes six UN Sustainable
Development Goals:
Natural resources
Minimising our impact on
ecosystems and biodiversity with
a responsible and regenerative
approach to natural resources.
Fair and decent work
Enabling safe and healthy
workplaces where labour rights
are respected and making
sure our whole value chain is
progressing within living wage.
Diversity, equity
and inclusion
Making sure our whole value
chain is free from discrimination
and has has an inclusive
environment, where all individuals
are treated fairly with respect
and have equal access to
opportunities and resources.
Report of the Board of Directors
20
sustainability promise is to make a difference for future
generations and the Stockmann division is aiming at resource-
wise retail business. Sustainability targets and indicators are
integrated into business operations, products, markets, and
they are aligned with stakeholder expectations and upcoming
legal frameworks. The sustainability development is regularly
monitored. The sustainability targets are related to all Lindex
Group’s products, services, significant markets and customer
groups.
In the industry, sustainability is a critical across all aspects of the
Group’s operations, including products and services, markets,
and customer groups. The industry is undergoing a significant
transformation, driven by upcoming legal frameworks, such as
Eco Design Directive and Extended Producer Responsibility
regulations. These initiatives will set stricter requirements for
sustainable production, durability, and recyclability, directly
influencing how products are designed, produced, and managed
throughout their lifecycle. The Group’s long-term sustainability
goals are closely tied to the transition to a circular business
model in accordance with the EU Textile strategy.
The Stockmann division’s
sustainability strategy
Towards
resourcewise retail
business
ENSURE
BETTER
WORKLIFE
PROFITABLE
AND
RESPONSIBLE
BUSINESS
We create sustainable
value for stakeholders by
responding to customers’
needs, complying with good
governance and requirements,
and communicating
transparently.
ACT FOR
THE PLANET
Additionally, the Group is implementing due diligence processes
in alignment with the Corporate Sustainability Due Diligence
Directive (CSDDD). These processes will help identify,
prevent, and mitigate adverse impacts on human rights and
the environment throughout the value chain. Through these
measures, the Group is positioning itself to meet the challenges
and opportunities ahead.
The Group has physical stores in 17 countries, eight Stockmann
department stores and 442 Lindex fashion stores including
franchising stores. Both divisions have their own online stores
and Lindex products are also sold in third-party online and
physical stores. Lindex Group’s key markets include Sweden
(35% of the revenue), Finland (33%) and Norway (14%). The
Group’s customers are mainly consumers in these countries.
There were no significant changes in the product groups or
markets during the reporting period.
Diversity, equity and
inclusion
We drive diversity, equity and
inclusion in our work community.
Fair and decent work
We strengthen ethical working
practices in our supply chain.
Climate
We reduce climate impacts in our
value chain in line with the Paris
Agreement and are committed to
the SBTi.
Circularity
The sustainability strategy
promotes five UN Sustainable
Development Goals:
We promote the circular economy
as a growing part of the product
range and services.
Report of the Board of Directors
21
The headcount of employees by country is presented in
S1-6 Characteristics of the undertaking’s employees
. Lindex
Group is not involved in any form of production of fossil
fuels, weapons, or tobacco. The company does not produce
chemicals but uses chemicals in the production process.
Lindex Group’s value chain
Lindex Group’s inputs include, for instance, raw materials,
human resources, energy and water resources, technology,
capital and data. The approach for gathering and securing
inputs such as raw materials, energy, and water resources
focuses on sourcing sustainable materials, as further
explained in chapters
E4 Biodiversity and ecosystems
and
E5 Resource use and circular economy
. The Group
is committed to ensuring human rights, and living wages,
supported by grievance mechanisms, further discussed in
chapters
S2 Workers in the value chain
and
S3 Affected
communities
. Additionally, the Group prioritises long-
term supplier relationships and conducts regular audits
in its value chain, further explained in
G1 Business
conduct
. In addition to these inputs, the Group relies
on the contributions of its own employees to support its
operations and meet customer needs, further details can
be found in chapter
S1 Own Workforce
. The approach to
developing inputs such as technology, capital and data
includes customising e-commerce platforms to provide
seamless customer experiences, analysing customer data
to understand preferences and evaluate feedback, and
driving sales growth. To secure these inputs, the Group
ensures platform scalability, maintains financial stability
through careful budgeting and risk management, and
collects diverse data to integrate into decision-making and
forecasting processes.
The Group’s outputs include high-quality, diverse, safe,
and accessible products for customers that support
diversity and empowerment. For investors, the main output
is financial returns. For other stakeholders, such as workers
in the value chain, the outputs include job opportunities
and mitigating actions to address climate impacts and
uphold human rights. Additionally, the Group provides job
opportunities within its own operations.
The main actors in the Group’s upstream value chain
are the suppliers that are manufacturing the Group’s
products. The relationship with the suppliers is described
in subchapter
G1-2 Management of relationships with
suppliers
. The main actors in the Group’s downstream
value chain include the Group’s own distribution channels,
such as its own retail stores, e-commerce platforms, and
distribution centres, all of which are essential to the Group’s
operations.
Product
manu-
facturing
Sales in own
shops, department
stores or online
stores
Lindex Group value chain
Lindex Group’s own operations
Raw
material
processing
Downstream
transportation
Distribution
centers
End
use
Raw material
extraction
Material
production
Upstream
transportation
Sales in
third party
channels
Lindex Group
own brands
Products
from other
brands
Supply chain
management,
procurement,
marketing, finance,
governance etc.
Report of the Board of Directors
22
SBM–2
Interests and views of stakeholders
Engaging with a diverse range of stakeholders is crucial to
Lindex Group’s ability to create value and ensure long-
term success. By engaging various stakeholders, Lindex
Group gains valuable insights into what topics should be
prioritised across its activities, products, supply chain, and
value chain. The table below provides a summary of Lindex
Group’s key stakeholders and how the Group responds
to their interests and views. The Group’s business model
or strategy is continuously revised due to stakeholder
engagement.
Lindex Group’s Board of Directors, Audit Committee
and Management Team are informed about the views
and interests of affected stakeholders with regard to the
Group’s sustainability -related impacts in connection with
the annual double materiality process. The interests and
views of different stakeholder groups during the materiality
assessment process is disclosed in connection with
ESRS
2 IRO-1 Description of the processes to identify and assess
material impacts, risks and opportunities
.
Additional information related to
own workforce
The interests, views and rights of the Group’s workforce
play a central role in shaping the company’s strategy
and business model. The Group’s strategy and business
model can play a role in creating positive impacts, and
causing and mitigating negative material impacts on
its own workforce. Both divisions gather insights about
employee well-being, employee engagement and workplace
experiences through an employee survey as well as
performance and development discussions. Feedback from
these help the divisions to identify areas for improvement
Lindex Group’s key stakeholders and engagement methods
Key stakeholders | Engagement and its purpose | Stakeholders’ interests and views | Responding to stakeholder expectations |
Customers | Interaction in stores and digital and at events, customer service, surveys, customer panels, marketing communications, loyal customer programmes, websites, social media. Understanding customers’ views is crucial in relevance for customers. | Customer service and satisfaction, materials and chemicals in products, climate impacts, labour practices and wages in supply chain. Fair marketing practices and inclusion in supply chain. | Lindex Group continued to develop its operations and offering to better customers’ expectations. |
Personnel | Performance and development discussions, Employees’ Councils, change negotiations, personnel events, intranet, engagement platforms Teams, Stockmann Staff Barometer platform) unions and worker Engagement with personnel enhances employee experience and talent | Employee well-being and safety, continuous learning, professional and career development, diversity, equity and inclusion, equal opportunities, work life balance | Personnel participated in the development of operations and strategy implementation in many ways as part of continuous dialogue and development projects. Development measures were made based on personnel surveys. |
Shareholders and investors | Stock exchange releases, press financial reviews, annual reporting, webcasts, investor meetings, Capital Markets Annual General Meeting, Group and social media channels. engagement, Lindex Group gives a transparent view of the company’s strategy, and financials. | Financial performance, strategy and corporate restructuring programme, strategic assessment, progress in sustainability. | Open and transparent communication in line with regulation provides a view of the company’s operations and financial situation. |
Suppliers and other business partners | Meetings, negotiations, cooperation collaboration platforms, factory visits audits, and supplier surveys. In biannual evaluation meetings, capacity building programmes and classroom training Lindex division. With all this, promotes sustainability in the supply | Implementing sustainability targets and initiatives in supply chain, sustainability topics such as climate, environment, human rights, materials, production processes, and transparency. | Lindex Group supported suppliers in sustainability topics, with focus on human rights, climate and Close dialogue related to fair purchasing practices. |
Authorities and non- governmental organisations (NGOs) | Collaboration, projects, understanding views of affected stakeholders, cooperation meetings, responding to surveys, work, website, and annual reporting. | Evolving regulation, environmental and human rights risks in the supply chain, supply chain management and transparency, climate compliance with regulations and guidelines. | Lindex Group responded to surveys, gave interviews, and continued dialogue with authorities and organisations, and participated in meetings and collaborative efforts to drive sustainability on an industry level. |
Report of the Board of Directors
23
and adapt the strategic direction regarding workforce needs
to address material impacts. At present, non-employees of
the Group have not been considered.
Additional information related to
workers in the value chain
For the Lindex division, the interests, views and rights of
workers in its value chain are respected and integrated
in the strategy and business model through the division’s
Human Rights Due Diligence (HRDD) process. The process
continuously assesses risks and identifies areas where the
Lindex division’s operations or business decisions might
contribute to impacts, especially on vulnerable groups such
as women, children, and migrant workers. These identified
impacts inform the Group’s strategy and business model
and provide insights to develop the Group’s divisions’
sustainability strategies as well as the development of
action plans and targets for mitigating negative impacts.
By partnering with multi -stakeholder initiatives (MSIs) such
as the Ethical Trading Initiative (ETI) and organisations
like Supplier Ethical Data Exchange (SEDEX), the Lindex
division addresses worker rights and conducts Sedex
Members Ethical Trade Audit (SMETA) audits to gather
direct feedback on working conditions. The Stockmann
division regularly audits its commercial goods suppliers
through SMETA and amfori Business Social Compliance
Initiative (BSCi) to ensure that the human rights of value
chain workers are respected.
The Group’s strategy and business model can play a role
in contributing to and mitigating significant material impacts
on value chain workers. The Group’s business model, which
is based on outsourcing global supply chain operations,
increases the likelihood of human rights and labor rights
violations. The Group also acknowledges that the business
practices, such as production demands and supplier
relationships, have an impact on worker welfare. The
Group is adapting to address the material impacts through
various targets and actions, which are further explained
in subchapters
S2-4 Taking action on material impacts on
value chain workers, and approaches to managing material
risks and pursuing material opportunities related to value
chain workers, and effectiveness of those actions
and
S2-5
Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks
and opportunities.
Additional information related to
affected communities
The Lindex division integrates the views, interests, and
rights of affected communities into its strategy by partnering
with NGOs and participating in multi-stakeholder initiatives.
Due to the remoteness of its operations, Lindex division
works with local organisations to enable community voices
and the views, interests and rights are considered in the
division’s strategy and business model, including respect for
their human rights. This is conducted particularly through
social dialogue and grievance mechanisms.
The Group acknowledges that its division’s business
models and strategies depends on textile manufacturing
and cotton agriculture, which can lead to significant impacts
on affected communities. The impacts are directly linked to
the Group’s strategy and business model, as the Group’s
business model relies on textile production and cotton
farming in high-risk regions. The Group is adapting to
address the material impacts through various targets and
actions, which are further explained in subchapters
S3-4
Taking action on material impacts on affected communities,
and approaches to managing material risks and pursuing
material opportunities related to affected communities, and
effectiveness of those actions
and
S3-5 Targets related to
managing material negative impacts, advancing positive
impacts, and managing material risks and opportunities
.
Additional information related to
consumers and end-users
The interests, views, and rights of consumers and end-
users are considered in the Group’s strategy and business
model, with a commitment to respecting their human
rights. Both divisions actively engage with customers
through different channels to continuously improve their
products and services based on consumer input. The direct
engagement helps both divisions to manage actual and
potential impacts on consumers. The Group acknowledges
that its strategy and business model can play a role in
causing, contributing or mitigating significant material
impacts on consumers and end-users. As the primary target
audience for the Group’s products, consumers and end-
users are affected by factors such as marketing practices,
product safety, and inclusivity. The Group is adapting to
address the material impacts through various targets and
actions, which are further explained in subchapters
S4-4
Taking action on material impacts on consumers and end -
users, and approaches to managing material risks and
pursuing material opportunities related to consumers and
end- users, and effectiveness of those actions
and
S4-5
Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks
and opportunities
.
Report of the Board of Directors
24
SBM–3
Material impacts, risks and opportunities and their interaction with strategy and business model
Material impacts, risks, and opportunities for Lindex Group
Actual / Potential A / P | Positive / Negative - / + | Risk / Opportunity R / O | Location in value chain (x) | Time Horizon (x) | Physical/ Transition Risk P/T | ||||||||
Standard | Material topics | Impacts | Risks and opportunities | Up - stream | Own opera - tions | Down - stream | Short - term | Medium - term | Long - term | ||||
Climate Change E1 | Climate change adaptation | No material impacts | Decreased revenue due to supply chain disruptions caused by extreme weather events in areas particularly vulnerable to such events, such as South and East Asia. | R | X | X | X | X | P | ||||
Increased costs of raw materials due to global changes in weather conditions. | R | X | X | X | X | T & P | |||||||
Increased costs and loss of sales caused by product and production related legislation. Failure to live up to minimum standards may cause product removals and loss of sales. | R | X | X | X | X | T | |||||||
Failure to achieve climate goals could result in reputational damage, leading to potential losses in sales and investments due to heightened stakeholder concerns. | R | X | X | T | |||||||||
Increased stakeholder awareness of the climate crisis could to higher sales and investment, as customers may prefer products and services with a low climate impact. This shift presents opportunity for the Group. | O | X | X | ||||||||||
Transitioning to circular business models – optimizing volumes, designing for longevity and circularity, and recyclable materials – represents a key business opportunity for the Group. | O | X | X | X | X | ||||||||
Climate change mitigation | No material impacts | Reducing reliance resilience of build resilience in raw material sourcing. | O | X | X | X | |||||||
Transitioning to lower-emission technology may result in costs and investment risks for fashion retailers as they work decarbonize their value chains. | R | X | X | T | |||||||||
Report of the Board of Directors
25
Actual / Potential A / P | Positive / Negative - / + | Risk / Opportunity R / O | Location in value chain (x) | Time Horizon (x) | Physical/ Transition Risk P/T | |||||||||
Standard | Material topics | Impacts | Risks and opportunities | Up - stream | Own opera - tions | Down - stream | Short - term | Medium - term | Long - term | |||||
Climate Change E1 | Energy | Emissions High in production, particularly in Tier 2 dyeing and processing, which often rely on fossil fuels, leading to elevated greenhouse gas emissions and contributing to global warming. | A | - | X | X | ||||||||
Emissions in fibre production: Fiber-related emissions arise from both the extraction and energy- intensive production of petroleum-based synthetic fibers, as well as from agricultural practices that contribute to increased greenhouse gas emissions. | A | - | X | X | ||||||||||
Emissions in own operations: Energy consumption across the Group’s operations (stores, warehouses, offices) contributes to increased greenhouse gas emissions. | A | - | X | X | ||||||||||
Emissions in transportation: Transportation of products contributes to greenhouse gas emissions, as it often relies on fossil fuels. | A | - | X | X | ||||||||||
Emissions in the user-phase: Factors such as washing, drying, and the disposal of garments and textiles contribute to greenhouse gas emissions. | A | - | X | X | ||||||||||
Reduced costs and return of investment through efficiency measures: Investing in energy efficiency across stores, offices, and the supplier base would lower operational production costs, while also reducing emission intensity. | O | X | X | X | X | X | ||||||||
Report of the Board of Directors
26
Actual / Potential A / P | Positive / Negative - / + | Risk / Opportunity R / O | Location in value chain (x) | Time Horizon (x) | |||||||||
Standard | Material topics | Impacts | Risks and opportunities | Up - stream | Own opera - tions | Down - stream | Short - term | Medium - term | Long - term | ||||
Polluton E2 | Microplastics | Microplastic pollution from synthetic fibers: In the supply chain, wet processing and synthetic fibers such as polyester and polyamide contribute to microplastic pollution. | No material risks | ||||||||||
P | - | X | X | X | |||||||||
Pollution of soil | Soil pollution in agriculture: Soil degradation is primarily associated with cotton cultivation, where agricultural practices, including the use of pesticides, fertilizers, and GMOs, deplete the soil of its natural nutrients and organisms. | ||||||||||||
P | - | X | X | X | X | ||||||||
Pollution of water | Water pollution in the supply Wet processing during production can release polluted water containing chemicals and dyes into nearby | ||||||||||||
P | - | X | X | X | X | ||||||||
Water E3 | Water consuption | Water consumption in raw materials: Cotton is a highly water-intensive crop, requiring significant irrigation, particularly in regions with low rainfall. The heavy water use in raw material production can contribute to degradation in arid regions. | Operational risks from water scarcity: Risks stem from the limited availability of water needed for agriculture (e.g., cotton crops) and production processes (such as wet processing). shortages can impact the availability and cost of raw materials cause disruptions in production. | ||||||||||
A | - | X | X | X | |||||||||
Water consuption | Water consumption in wet Wet processing requires large volumes of water for dyeing fabrics, applying finishes, and removing excess chemicals and dyes. This consumes significant amounts of water contributing to a negative overall water footprint. | ||||||||||||
A | - | X | X | X | |||||||||
Water withdrawals | Water withdrawals in the supply chain: Cotton cultivation and garment wet processing are highly water-intensive, requiring significant withdrawals from nearby lakes, rivers, groundwater. This cancontribute to the depletion resources in several regions. | ||||||||||||
P | - | X | X | X | |||||||||
Water discharges | Water discharges in manufacturing: Water discharges from wet processing strains local water resources and contributes to water pollution. | P | - | X | X | X | |||||||
Water withdrawals | R | X | X | X | X | ||||||||
Water withdrawals | Reduced costs due to efficient water management: Opportunities lie in implementing sustainable water management practices, such as advanced technologies, water recycling, rainwater harvesting, and a shift to regenerative agriculture. These measures usage and create resilience against water shortages. | O | X | X | X | X | |||||||
Water withdrawals | Cost resilience Shifting to increases. | O | X | X | |||||||||
Report of the Board of Directors
27
Short
-
term
Actual
/
Potential
A / P
Positive
/
Negative
-
/
+
Risk
/
Opportunity
R
/
O
Up
-
stream
Own
opera
-
tions
Down
-
stream
Location in
value chain (x)
Time
Medium
-
term
Horizon (x)
Standard
Material
topics Impacts
Risks and opportunities
Bio-
diversity
and eco-
systems
E4
Direct impact
drivers of
biodiversity loss,
direct exploitation
Direct impact
drivers of
biodiversity loss,
land-use change
Direct impact
drivers of
biodiversity loss,
land-use change
Direct impact
Biodiversity loss and deforestation through raw material
production:
The cultivation of fibers requires significant land and
water use, often leading to deforestation, habitat destruction, and
depletion of freshwater resources in nearby areas. Monocultures
of wood-based or natural fibers, such as viscose, contribute to
biodiversity loss and deforestation.
Impact of using chemicals, fertilizers, and pesticides in
agricultural processes:
The use of these substances can lead
to soil degradation, negatively affecting biodiversity and the
pollination of crops.
Landscape alteration:
Cotton agriculture and textile production
can displace local communities, disrupting their access
to essential ecosystem services such as food, water, and
livelihoods. Large-scale agricultural practices and deforestation
can significantly alter landscapes.
P - X X
X
P - X X X
X
P - X
X
Cost and availability of raw materials:
Heavy reliance on land
drivers of
biodiversity loss,
climate change
Impacts on
the extent and
condition of
ecosystems, land
degradation
Land degradation:
Cotton agriculture contributes to land
degradation through intensive water use. Agricultural practices
can lead to soil erosion, loss of biodiversity, and reduced land
fertility over time.
and water for raw materials may lead to higher costs and reduced
availability in the future.
P -
R X X
X
Circular
economy
and
resource
use
E5
Resource inflows
Negative impact on natural resources:
The use of natural
resources, such as cotton and wood-based fibers, along with
water consumption in production, creates negative impacts in
the upstream value chain. This can lead to environmental stress,
reduced land availability, and limited access to freshwater.
Resource outflows
Post-consumer resource loss:
When products are not used
until worn out and textiles are not recycled into new materials,
valuable resources are lost.
A -
X | X | X | |||
X | X | ||||
R | X | X | X | ||
O | X | X | X | X | |
X | X | X | |||
O | X | X | X |
Cost and availability of raw materials:
Heavy reliance on land
and water for raw materials may lead to higher costs and reduced
availability in the future.
Circular business transformation:
Transitioning to circular
business models – optimizing product volumes, designing for
longevity and circularity, and using recycled and recyclable
materials – represents a key business opportunity for the group.
A -
Capturing valuable resource flows:
Scaling up reuse and
recycling efforts, while collaborating with innovators and solution
providers to improve recyclability, creates growth opportunities for
creating circuar business models and scaling up recommerce.
Long
-
term
Report of the Board of Directors
28
Actual / Potential A / P | Positive / Negative - / + | Risk / Opportunity R / O | Location in value chain (x) | Time Horizon (x) | |||||||||
Standard | Material topics | Impacts | Risks and opportunities | Up - stream | Own opera - tions | Down - stream | Short - term | Medium - term | Long - term | ||||
Circular | Waste | Waste creation at Products often result | |||||||||||
economy and | in waste post-purchase, wich many may end up in landfills, especially in countries lacking proper waste management | P | X | X | |||||||||
resource | systems. | ||||||||||||
use E5 | |||||||||||||
Packaging waste creation: Packaging used in products may end up as waste and not be properly recycled, causing harm to | P | X | X | ||||||||||
both the environment | |||||||||||||
Regulatory risks: The EU Textile | |||||||||||||
requirements on ERP systems and end-of-life treatment, which could pose operational risks and added costs per product | R | X | X | X | X | ||||||||
Group. | |||||||||||||
Own | Working | Restricted freedom of The group operates | |||||||||||
workforce | conditions, | countries where the right | |||||||||||
S1 | freedom of | bargaining may be | P | - | X | X | X | X | |||||
association | China, and reports suggest | ||||||||||||
might be compromised | |||||||||||||
Working | Work-life balance: The division's business | ||||||||||||
conditions, work- | distribution centers | ||||||||||||
life balance | related to temporary and part-time workers with irregular scheduling. These practices can negatively impact workers' | A | - | No material risks | X | X | X | X | |||||
mental health, hinder | |||||||||||||
their financial stability. | |||||||||||||
Working | Health and safety: Potential issues across | ||||||||||||
conditions, health | include fire safety | ||||||||||||
and safety | and ergonomic challenges. | P | - | X | X | X | X | ||||||
and healthy working conditions, | |||||||||||||
performance and increased | |||||||||||||
Equal treatment | Discrimination in Discrimination on various | ||||||||||||
and opportunities | grounds negatively | ||||||||||||
for all, measures against violence | group’s reputation as an employer. This hiring and occupational opportunities but also throughout the | P | - | X | X | X | X | ||||||
and harrasment in | employment relationship, | ||||||||||||
the workplace | pensions. | No material risks | |||||||||||
Equal treatment | Promoting diversity, Fostering | ||||||||||||
and opportunities | DEI in the workplace | ||||||||||||
for all, diversity | environment. By offering | P | + | X | X | ||||||||
significantly enhance | |||||||||||||
while also improving | |||||||||||||
-
-
Report of the Board of Directors
29
Actual / Potential A / P | Positive / Negative - / + | Risk / Opportunity R / O | Location in value chain (x) | Time Horizon (x) | |||||||||
Standard | Material topics | Impacts | Risks and opportunities | Up - stream | Own opera - tions | Down - stream | Short - term | Medium - term | Long - term | ||||
Workers in | Working | Inadequate wages in The lack of living | |||||||||||
the value | conditions, | wages has severe | |||||||||||
chain S2 | adequate wages | textile supply chain. Additionally, female, this wage | A | - | X | X | X | X | |||||
limits access to | |||||||||||||
outcomes for workers | |||||||||||||
Working | Restricted freedom of | ||||||||||||
conditions, | In many countries, freedom | ||||||||||||
freedom of | worker representation, | ||||||||||||
association | significant pressure. Industry efforts among garment | P | - | X | X | X | X | ||||||
production countries, compounded | |||||||||||||
support and insufficient collaboration between trade unions, NGOs, factories, and fashion brands. | No material risks | ||||||||||||
Working | Health and Safety: Workers in regions | ||||||||||||
conditions, health | China, India, Pakistan, and | ||||||||||||
and safety | fires, electrical hazards, | P | - | X | X | X | X | ||||||
violence – each of | |||||||||||||
problems. | |||||||||||||
Equal treatment | Diversity and discrimination: Women, who | ||||||||||||
and opportunities | the majority of garment | ||||||||||||
for all, measures against violence | discrimination, sexual harassment, career progression. | P | - | X | X | X | X | ||||||
and harassment in | emotional well-being, | ||||||||||||
the workplace | |||||||||||||
Equal treatment | Reputational risk related | ||||||||||||
and opportunities | in the supply The group faces | ||||||||||||
for all, measures against violence | risks in cases chain. These issues can | R | X | X | X | X | |||||||
and harassment in | situation and lead to | ||||||||||||
the workplace | |||||||||||||
Equal treatment | Brand recognition Promoting gender | ||||||||||||
and opportunities | equality and diversity | ||||||||||||
for all, diversity | brand reputation and | O | X | X | X | X | |||||||
management system aims | |||||||||||||
equal opportunities and | |||||||||||||
Other work-related | Child labour in the There is a risk | ||||||||||||
rights, child labour | in the supply chain, enforcement. This can | P | - | X | X | X | X | ||||||
education, and overall | No material risks | ||||||||||||
Other work-related | Forced labour in the There is a risk | ||||||||||||
rights, forced labour | labour in the regulatory enforcement. This | P | - | X | X | X | X | ||||||
worker's health, education, | |||||||||||||
Report of the Board of Directors
30
Actual / Potential A / P | Positive / Negative - / + | Risk / Opportunity R / O | Location in value chain (x) | Time Horizon (x) | |||||||||
Standard | Material topics | Impacts | Risks and opportunities | Up - stream | Own opera - tions | Down - stream | Short - term | Medium - term | Long - term | ||||
Affected | Communities' | Access to clean Many waterways in | |||||||||||
communi- | economic, social, | are being contaminated | |||||||||||
ties S3 | and cultural rights, water and | water, as well as farms. Lack of access | P | - | X | X | X | X | |||||
sanitation | women and girls, stealing | ||||||||||||
opportunities. | |||||||||||||
Communities' | Improving access to Lindex division's | ||||||||||||
economic, social, | with WaterAid has | ||||||||||||
and cultural | water and empowering women | P | + | X | X | X | X | ||||||
rights, water and | |||||||||||||
sanitation | No material risks | ||||||||||||
Communities' | Supply chain impacts Industrial | ||||||||||||
economic, social, | expansion for cotton | ||||||||||||
and cultural rights, | displace local communities, | P | - | X | X | X | X | ||||||
land-related | such as food and water, | ||||||||||||
impacts | ultimately undermining | ||||||||||||
Communities' | Impacts on communities The | ||||||||||||
economic, social, | group's products may | ||||||||||||
and cultural rights, land-related | the local economy and clothes entering the | P | - | X | X | X | X | ||||||
impacts | pollute waterways and | ||||||||||||
community. | |||||||||||||
Consum- | Personal safety of | Product safety and compliance: The group may | |||||||||||
ers and | consumers and/or | the safety of children’s | |||||||||||
end- | end-users, health | This can lead to | P | - | X | X | X | X | |||||
users | and safety | harmful chemicals, posing | |||||||||||
S4 | |||||||||||||
Social inclusion of | Inclusive assortment: Failing to offer | ||||||||||||
consumers and/ or end-users, non- | that represents diverse preferences can | P | - | X | X | X | X | ||||||
discrimination | and reinforce social | ||||||||||||
Social inclusion of | Responsible marketing The group | ||||||||||||
consumers and/ | of women globally | ||||||||||||
or end-users, | portrayals of women and | ||||||||||||
responsible | and fails to | P | - | X | X | X | X | ||||||
marketing | beauty standards or | ||||||||||||
practices | types and demographics | ||||||||||||
potentially harming | |||||||||||||
Social inclusion of | Inclusive design and Designing clothes for | ||||||||||||
consumers and/ | of body types and | ||||||||||||
or end-users, non- | marketing presents a | O | X | X | X | X | |||||||
discrimination | attract more customers | ||||||||||||
demonstrating commitment | |||||||||||||
Social inclusion of | Consumer backlash from | ||||||||||||
consumers and/ or end-users, non- | assortment: If the group and offer an inclusive | R | X | X | X | X | |||||||
discrimination | backlash and reputational | ||||||||||||
Report of the Board of Directors
31
Actual / Potential A / P | Positive / Negative - / + | Risk / Opportunity R / O | Location in value chain (x) | Time Horizon (x) | |||||||||
Standard | Material topics | Impacts | Risks and opportunities | Up - stream | Own opera - tions | Down - stream | Short - term | Medium - term | Long - term | ||||
Business conduct G1 | Corporate culture | Impact on consumers' purchasing decisions: By offering sustainable options in stores, the group passively influences consumer to change their purchasing habits in the future without further education. | |||||||||||
A | + | X | X | ||||||||||
Management of relationships with suppliers incl. payment practises | Inability to provide timely payments to suppliers: Timely payment to suppliers is crucial for the supply chain. Late payments can strain workers and create unequal power imbalances between suppliers and the Group. | P | - | X | X | ||||||||
Protection of whistleblowers | Not Poorly whistleblowing programs fail to meet risk management standards, making it harder to identify and mitigate risks like harassment, discrimination, corruption, or bribery. Directive (EU) 2019/1937 requires secure, accessible reporting channels and protects whistleblowers from retaliation. | ||||||||||||
P | - | X | X | X | X | X | X | ||||||
Corruption and bribery, prevention and detection including training | Corruption within supply chain and own According to in the textile supply chain. This undermines the Lindex division’s higher purpose of 'Inspiring and Empowering women everywhere'. Corruption ethical standards. To mitigate division's suppliers are required to sign a Supplier Code of Conduct, and for Stockmann division, sustainability themes are integrated into procurement contracts. | ||||||||||||
R | X | X | X | X | X | ||||||||
Report of the Board of Directors
32
The identified material impacts, risks, and opportunities
have current and anticipated effects on the Group’s
business model, value chain, strategy and decision -making.
However, there is no process in place for integrating the
material impacts, risks, and opportunities into the business
model, value chain, strategy and decision-making. The
impacts originate through the group’s own activities as well
as business relationships, such as suppliers. The impacts
originate from and are connected to the Group’s strategy
and business model. The Group operates a business model
centered on e-commerce, physical stores, and department
stores, with a primary focus on the sale of physical
products. Consequently, the Group’s activities generate
diverse social and environmental impacts, as described in
SBM-3 Material impacts, risks and opportunities for Lindex
Group
.
Material risks and opportunities may have financial
implications for the Group’s financial position, performance,
and cash flows. However, due to a current lack of financial
data and standardised methods for data collection linked
to material risks and opportunities, this information will not
be reported. Currently, there are no material risks that will
realise in the next annual reporting period. The Group has
conducted a resilience analysis of its strategy and business
model and its capacity to address material climate related
impacts, risks, and opportunities. No other resilience
analysis has been conducted.
The current material impacts, risks, and opportunities align
with the previous results of the materiality assessment.
However, there have been changes in the method used to
assess materiality. Details about the updated process can
be found in the subchapter
IRO-1 Description of the process
for identifying and assessing material impacts, risks, and
opportunities
.
E1 CLIMATE CHANGE
SBM-3 Material impacts, risks, and opportunities
and their interaction with strategy and business
model
In 2024, Lindex Group conducted a climate related scenario
analysis using the Task Force on Climate-related Financial
Disclosures (TCFD) guidelines. The methodology and
scope of the assessment, as well as the time horizons
considered for determining material physical and transition
risks, are described in
IRO-1 Description of the process
for identifying and assessing material impacts, risks,
and opportunities
. The financial risks and opportunities
connected to the different climate scenarios; such as
impact on growth, costs, investments, assets and sales;
with consideration taken to different time horizons, were
assessed on a low, medium or high impact and assessed
by likelihood and magnitude. The most material risks were
mapped to business strategies and roadmaps to identify
any possible gaps in the Group’s business resilience.
This initial analysis provides a high-level resilience
analysis of the strategy to climate change. The analysis
is qualitative, and no sensitivity analysis with numerical
data was included. Lindex Group plans to conduct a more
detailed and comprehensive assessment in the future to
ensure ongoing alignment with evolving climate scenarios
and regulatory requirements.
E4 BIODIVERSITY & ECOSYSTEMS
SBM-3 Material impacts, risks, and opportunities
and their interaction with strategy and business
model
The Lindex division has assessed the impact of biodiversity
using the WWF biodiversity risk filter and applied it across
the division’s value chain. The biggest impact in magnitude
and significance was identified in raw material sourcing
and wet processing, mainly related to cotton and viscose
sourcing with sites identified in India, in regions such as
Gujarat, Nagpur, and Odisha. The Stockmann division has
not assessed activities negatively affecting biodiversity-
sensitive areas. No operations that affect threatened
species have been assessed.
Material negative impacts related to land degradation have
been reported under
ESRS 2 – SBM-3 Material impacts,
risks and opportunities and their interaction with strategy
and business model
. However, the Group has not identified
any material negative impacts on desertification or soil
sealing.
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33
Resilience analysis result
Type of risk | Area | Risk description | Time horizon | Strategy and business model to mitigate risks and increase rescillience Climate related actions E1-3 Actions and resources . |
Transition Risks | Regulatory Risks MEDIUM | Failure to achieve climate goals could result in reputational investments due to heightened stakeholder concerns. Failure to deliver on our target may result in decreased stakeholder attraction from both customers and the financial sector. requirements of the EU Taxonomy goal in line with science, Group latest in 2028. | Short (<5 years) | Lindex Group has committed to Science Based Target. has developed a 2030 climate transition plan to fullfill the target implemented regular follow-ups and progress reporting. |
Regulatory Risks HIGH | Increased costs and loss of sales caused by product minimum standards may cause product removals and loss Product and production related legislation (i.e. ESPR, EUDR, DPP, can not be transferred to consumers. Failure to live up to minimum removals, loss of sales, fines and consumer compensation costs. impact cost. | Short (<5 years) | Lindex Group has set a circular business transformation strategy which includes circular products, cicular supply chain and circular businessmodels. Lindex Group has also set a strategy on tracebility transparency, | |
Technology Risks MEDIUM | Transitioning to lower-emission retailers as they work to decarbonize their value chains. Insufficient investments in renewable energy infrastructure and technology for electrification may fail the transition from | Short (<5 years) | Lindex division engages our production countries | |
Technology Risks MEDIUM | Transitioning to lower-emission retailers as they work to decarbonize their value chains. Fashion retailers may face increased costs and investments risk production countries. The transition to renewable energy means and will require countries to allocate resources for renewable | Short (<5 years) | Lindex division's actions, developing division has further engagement in technology matchmaking. | |
Market Risks HIGH | Increased costs Lindex Group dependent on natural resources such as water, production and agriculture in many regions. India, where the majority grown, is already at severe water shortage risk which will rawmaterial has reached its limit, affecting both availability | Medium (5–10 years) | Lindex Group has a water strategy that supports supply chain partners to adopt water efficient technologies in the areas by water shortages. Lindex Group has also set a material transformation strategy with clear targets materials to create rescilience. Lindex division is collaborating with recyclers such as Södra skogsägarna and Infinited fiber recycling. | |
Reputational Risks MEDIUM | Failure to and investments due to heightened stakeholder concerns. Awareness of company and industry on climate change is likely to cause changes in consumer increased interest in recommerce, a shift from synthetic fibers, | Short (<5 years) | Lindex Group has committed to a Science Based Target has developed a 2030 climate transition plan to fullfill the target. division has also set a circular business transformation strategy, includes models. | |
Reputational Risks MEDIUM | Failure to achieve climate goals could result in reputational investments due to heightened stakeholder concerns. Awareness of the company's and industry's on climate can cause reputational risks related to brand perception. Negative consumer behaviour but may also shy away investments from | Short (<5 years) | The Group’s strategies within the sustainability area will trust in its brands and offerings. Transparency communication connected to sustainability will help to build trust and increase customer loyalty. | |
Physical Risks | Acute Physical Risks MEDIUM | Decreased revenue due to supply chain disruptions caused by vulnerable to such events, such as South and Increased frequency and intensity of extreme weather events such as extreme heat, floods, hurricanes or tropical cyclones throughout the value chain such as raw materials agriculture, lead to increased operating cost, volatility in supply, | Short (<5 years) | Lindex Group has set a supply chain strategy, contingency plans and alternative transportation route planning. Group has also set a material transformation strategy with clear shift to recycled and regenerative materials. Lindex division with chemical recyclers such as Södra skogsägarna and Infinited |
Cronic Physical Risks HIGH | Increased costs Changing temperature, stress, water where and how garments and materials can be produced. This | Medium (5–10 years) | Lindex Group has set a supply chain strategy, contingency plans and alternative transportation route planning. Group has also set a material transformation strategy with clear shift to recycled and regenerative materials. Lindex division with chemical recyclers such as Södra skogsägarna and Infinited |
Report of the Board of Directors
34
Area | Opportunity description | Time horizon | Strategy and business |
Resource Efficiency MEDIUM | Reduced costs and return of investment through Investing in energy efficiency across stores, offices, and the supplier base would emission intensity. | Short (<5 years) | Lindex Group has set goals and action plans to reduce energy the value chain and are supporting its suppliers in setting developing action plans for energy efficiency aswell as the renewable sources. See E1 reporting for further details. |
Products & Services HIGH | Increased stakeholder awareness of the climate crisis could customers may prefer products and services with a low climate trust and that share their values. Based on Lindex Group’s sustainability strategies attract more customers and expand the current business-to-business transparent offering. Positive reputation impact both investments | Short (<5 years) | Delivering on Lindex Group’s strategy and meeting climate related customer expectations can lead to a bigger market share. and clear communication about sustainability can increase customer loyalty. |
Products & Services HIGH | Transitioning to circular business models circularity, and using recycled and Group. Increasing awareness to switch to new ways of enjoying fashion without the climate shift will reduce Lindex Group’s climate impact and offer traditional business model. | Short (<5 years) | Lindex Group is preparing to scale up recommerce and are continually testing and scaling new business models and new revenue streams, as wardrobe services, rental and repairs. See E5 reporting for further details. |
Products & Services HIGH | Transitioning to circular business models circularity, and using recycled and Group. Product volume optimisation, reducing the mark down clearance, and reduces absolute emissions but is also an important enabler to reduce the value of every product produced, better respond to consumer needs place and in the right amount. | Short (<5 years) | Lindex Group is adopting a Supply chain Strategy approach that includes nearshoring. The utilization of analytics to make data-driven decisions further improves forecasting and minimizes overproduction. The investments and development of the Lindex division’s distribution centre will streamline inventory across customer demands more efficiently. |
Rescilience HIGH | Reducing reliance help mitigate Scaling recycled to regenerative improve the climate resilience of both farmers and its business. | Short (<5 years) | Lindex Group is increasing the share of recycled materials and working to bridge technology, infrastructure, make commercial scaling of recycled fibres more feasible through industry collaborations and commitments. Lindex Group is investing collaborative projects in India, where most of its cotton is grown farmers transition to regenerative practices. |
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35
S1 OWN WORKFORCE
SBM-3 Material impacts, risks, and opportunities
and their interaction with strategy and business
model
The actual and potential impacts identified in
ESRS 2 IRO-1
Description of the process to identify and assess material
impacts, risks, and opportunities
– restricted freedom of
association, work-life balance challenges, health and safety
working conditions, workplace discrimination, and the
promotion of diversity, equity, and inclusion – are inherently
linked to the Group’s strategy and business model.
When identifying the actual and potential impacts on the
Group’s workforce, the Group has considered all employees
who could be materially affected, including those working
in the retail stores, offices, and warehouses, as well as
employees on permanent and fixed-term contracts. Some
impacts can be specific and limited to certain employees
due to the type of employment and location, such as store
employees, warehouse employees and production office
employees. In addition, the Group has considered non-
employees who work at the group’s premises. Based on the
double materiality assessment, the Group has not identified
any negative impacts related to child labor or forced
labor within its own operations. It does not consider any
operations at significant risk of such incidents.
Regarding material positive impacts, the Group’s efforts
to promote diversity, equity, and inclusion (DEI) can
positively affect all employees and non-employees by
enhancing their awareness and understanding, improving
workplace relationships, and fostering an increased sense
of belonging. Additionally, the Group has not identified any
material risks or opportunities related to its own workforce,
nor any material impacts arising from transition plans.
Report of the Board of Directors
36
Impact and its connection to strategy and business model, and how the strategy and business model is informed and adapted to the impact
Impact | Actual or potential (A/P) | Connection to strategy and business model | Informing and strategy and business |
Restricted freedom of association | P | Operating in countries where freedom of association and collective bargaining are restricted can be a consequence of local legal frameworks and political environments. These restrictions limit employees' ability to organise and negotiate effectively, resulting in a incidents, as it is experienced by a limited number of workers | Enhancing due diligence processes and embedding human rights policies as well as having |
Work-life balance | A | The Group’s operational model, which includes retail stores and distribution centres, depends on the flexibility of labour agreements to meet fluctuating demand. This creates irregular scheduling time and temporary employees, which might impact the employee’s outside work, and affecting their financial stability. of store staff employed by the Group. | Implementing predictable shift patterns and arrangements. |
Health and Safety | P | The physical demands of the warehouse and retail environment can pose a risk to employee safety. Additionally, the risks are enhanced during high-demand seasons in warehouses. Failure to ensure health and safety in working conditions can absenteeism due to illness or injury. The potential impacts can be either widespread or related to individual incidents. | Investments in safety training, better equipment, monitoring. |
Discrimination in the workplace | P | The Group’s business model, which operates across diverse regions, increases the potential for discrimination based on, for example, gender, origin, age, or being and the Group’s reputation as an employer. | Clear policies, such as Human Policy, and Offence and Harassment Diversity Plan and Equal Opportunities Plan. |
Promoting diversity, equity, and inclusion (DEI) | P | The Group can have a positive impact by promoting diversity, more inclusive and accepting working environment, which can significantly knowledge while improving their overall well-being. The potential impacts are usually related to individual incidents. | Conducting diversity and inclusion training sessions, participating in different networks, such as the Diversity Charter, and committing to transparent, fair recruitment processes. Actively monitoring and reviewing practices to ensure compliance with human rights standards improve workplace culture. |
S2 WORKERS IN THE VALUE CHAIN
SBM-3 Material impacts, risks, and opportunities
and their interaction with strategy and business
model
The actual and potential impacts identified in
ESRS 2 IRO-1
Description of the process to identify and assess material
impacts, risks, and opportunities
– inadequate wages in the
textile industry, restricted freedom of association for supply
chain workers, health and safety of working conditions,
diversity and discrimination, child labour in the supply chain
and forced labour in the supply chain – are inherently linked
to the Group’s strategy and business model.
The identified actual and potential impacts related to
diversity and discrimination are linked to the material risks
and opportunities highlighted in the double materiality
assessment. If the potential impact of discrimination in the
value chain materialises, or the Group fails to adequately
mitigate the impact, there is a risk to reputation and
credibility. This could negatively affect the Group’s financial
position and lead to potential loss of business partners.
Conversely, there is an opportunity to enhance brand
recognition by promoting gender equality and diversity
throughout the value chain.
When identifying the actual and potential impacts on the
workers in the value chain, the Group has considered
workers in the upstream garment supply chain. The scope
Report of the Board of Directors
37
does not include distribution in upstream value chain or
workers in the downstream value chain, such as those
involved in distribution, sales, and disposal.
The negative impacts are primarily in the upstream portion
of the value chain, where garment manufacturing, textile
production, and raw material sourcing occur, notably
in countries with weaker regulatory enforcement. The
Lindex division has identified the following workers to be
particularly vulnerable: women, migrant workers, young
workers, and trade union members. Women face a
heightened risk of negative impacts, such as gender -based
discrimination, harassment, unequal pay, and limited career
progression. Migrant workers face a heightened risk of
negative impacts due to language barriers, limited legal
protections, and exploitative recruitment practices. Young
workers face specific risks to their physical development
and safety, when tasked with repetitive activities or when
operating heavy machinery without adequate training.
Trade union members face a heightened risk of negative
impacts, such as retaliation, including intimidation and
dismissal. These particularly vulnerable groups have been
identified through the Lindex division’s Human Rights Due
Diligence (HRDD) process. The Stockmann division did not
specifically identify vulnerable groups but instead addressed
value chain workers at a general level.
The risk of child and forced labour is particularly high in
regions with weaker regulatory enforcement, and the risk
is most prevalent in agriculture, raw material production,
cotton farming, and textile production. The material negative
impacts on workers in the value chain are widespread
and systemic, particularly in regions with weak regulatory
enforcement such as Bangladesh, China, India, Pakistan,
and Turkey. Currently, the Group has not identified any
material positive impacts related to workers in the value
chain.
Impact and its connection to strategy and business model, and how the strategy
and business model is informed and adapted to the impact
Impact | Actual or potential (A/P) | Connection to strategy and business model | Informing and strategy and |
Inadequate wages in the textile industry | A | Wages in the textile manufacturing countries, are often living expenses. The impact on value chain workers is tied to the Group’s business model, these countries. | The Group commits to decent working conditions in its value chains and to cooperating with others where infringements on workers’ rights are identified. The Group believes that improving working conditions is a collaborative effort involving employers, employees, governments, unions, and workers’ organisations. The Group works closely with its commercial goods suppliers to create supportive environments where women have the same opportunities as men. The Lindex division these impacts through a due diligence process, transparency requirements, and comprehensive sustainability frameworks that includes purchasing practices, self- assessments, social auditing, living wage strategy, supplier transparency and supply chain traceability, and implementing policies to safeguard workers’ and prevent child labour and modern slavery as well as the We Women management programme. Currently, Stockmann division does not have a due diligence process place. |
Restricted freedom of association for supply chain workers | P | In countries where the Group sources materials or manufactures products, restrictions on unionisation can significantly limit workers’ conditions. This challenge can strategy in regions, which can | |
Health and Safety | P | The Group sources from regions India, Pakistan, and Turkey inadequate health and safety standards, including fire hazards, structural issues, and workplace violence. | |
Diversity and discrimination | P | The potential issue of gender-based harassment, and unequal pay especially for women garment workers, can be a consequence of the Group’s global supply chain. | |
Child labour in the supply chain | P | The risk of child labour in the supply chain, especially in regions with weak regulatory enforcement, the Group. Child labour is regions. | |
Forced labour in the supply chain | P | Forced labour, particularly vulnerable due to poor legal enforcement, can be a risk linked to the Group’s supply chain outsourcing global supply chain |
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38
S3 AFFECTED COMMUNITIES
Impact and its connection to strategy and business model, and how the strategy
and business model is informed and adapted to the impact
SBM-3 Material impacts, risks, and opportunities
Impact | Actual or potential (A/P) | Connection to strategy and business model | Informing and strategy and |
Access to clean water | P | Textile significant contamination of local waterways, communities’ access to clean water. This impact is linked to the Group’s business model, on textile production and cotton | The Lindex division’s partnership with WaterAid to improve access to clean water as well as empower women in RMG worker communities in Bangladesh. The programme benefits women by freeing up time for education, work, and community engagement, enhancing their confidence and health. The program the Group’s brand as a water responsible company and leader in women’s empowerment. |
Improving access to clean water | P | The Lindex division’s partnership access to clean water in worker communities positively impacts the company’s reputation The Group is committed to supporting empowering women in readymade communities. | |
Supply chain impacts on communities’ rights | P | The activities in the Group’s supply chain, particularly in areas of cotton agriculture and textile communities, disrupt access to resources like food and water, and contribute to environmental | The Lindex division mitigates these risks through the implementation of sustainable water management practices, eliminating the release of hazardous and toxic substances from its supply chain, waste management improvements, and collaboration with partners to protect ecosystems and communities. |
Impacts on communities where products are discarded | P | The Group’s products may landfills or are discarded in nearby environmental pollution. This can be a direct consequence of the Group’s business model. |
and their interaction with strategy and business
model
The potential impacts identified in
ESRS 2 IRO-1
Description of the process to identify and assess material
impacts, risks, and opportunities
– access to clean water,
improving access to clean water, supply chain impacts on
communities’ rights, and impacts on communities where
products are discarded – are inherently linked to the
Group’s strategy and business model.
When identifying the potential impacts on affected
communities, the Group has considered all communities
across its value chain that could be materially affected.
These include communities associated with the Group’s
upstream garment value chain, such as those involved in
raw material sourcing and production processes, as well
as those linked to the downstream value chain, particularly
around the waste disposal of used products.
The affected communities are the communities along
the Group’s upstream garment value chain and the
communities in downstream value chain linked to waste
disposal of used products. While indigenous people
were evaluated as part of the assessment, they were not
deemed material to the Group’s operations. The primary
potential negative impacts are considered widespread and
systemic within the upstream value chain. The Group has
not identified any material risks or opportunities related to
affected communities. The affected communities that are, or
could be, negatively affected or face a higher risk of harm
have been identified through the Lindex division’s Human
Rights Due Diligence (HRDD) process.
Report of the Board of Directors
39
S4 CONSUMERS AND END-USERS
SBM-3 Material impacts, risks, and opportunities
and their interaction with strategy and business
model
The potential impacts identified in
ESRS 2 IRO-1
Description of the process to identify and assess material
impacts, risks, and opportunities
– product and safety
compliance, inclusive assortment and responsible marketing
practices – are inherently linked to the Group’s strategy and
business model.
The identified potential impacts are linked to the material
risks and opportunities highlighted in the double materiality
assessment process. If any of the potential impacts
materialise, or if the Group fails to adequately mitigate
existing impacts, there is a risk of consumer backlash from
lack of inclusivity in marketing and assortment. Conversely,
there is an opportunity to enhance brand recognition
by designing clothes for a variety of body types and
showcasing diverse women and children in marketing. This
approach can attract more customers and build long-term
value by visibly demonstrating a commitment to diversity
and inclusion.
When identifying the potential impacts on consumers and
end-users, the Group has considered all groups likely to be
materially affected. This includes groups, such as women
and children, who may be particularly vulnerable to impacts
from marketing and sales strategies. The primary potential
negative impacts are related to specific incidents. The
Group has not identified material positive impacts related
to consumers and end-users. The Group has identified
its main types of consumers and end-users by analysing
the business model of its divisions, along with sales data,
purchase patterns, and customer engagement insights. This
includes consumers and end-users who may be negatively
impacted or face a higher risk of harm. The material risks
and opportunities arising from impacts on consumers
and end-users are particularly relevant to groups such as
Impact and its connection to strategy and business model, and how the strategy
and business model is informed and adapted to the impact
women and children.
Impact | Actual or potential (A/P) | Connection to strategy and business model | Informing and strategy and |
Product and safety compliance | P | The Group’s responsibility particularly children’s apparel, model. Failing to meet safety standards can lead to significant health and safety risks. | To mitigate connected to product safety, Lindex division has a restricted substances list in place, as well as product testing and children’s safety design guides and training for designers and quality controllers. |
Inclusive assortment | P | The Group’s ability to that represent diverse preferences is directly connected the best customer experience. Failing to provide an inclusive product range can harm the Group’s perpetuate negative stereotypes. | The Group has responsible marketing policies and guidelines in place. The Group has diverse representation in its advertising. The Lindex division’s higher purpose is to empower in women empowerment and inclusivity. The Lindex division offers employees relevant training to mitigate negative impacts. |
Responsible marketing practices | P | The Group’s marketing practices, of women and children, can significantly influence consumer perception and behaviour. responsible marketing, it can standards potentially harming mental health. |
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40
IRO–1
Description of the process to identify and assess
material impacts, risks and opportunities
In 2024, Lindex Group conducted a double materiality
assessment to identify and evaluate the Group’s impacts,
risks, and opportunities related to various sustainability
matters. The assessment was conducted in both divisions
and incorporated into a Group level assessment. The Group
has previously assessed its key business risks. Some risks
have been deemed less material in the double materiality
assessment, but the two assessments will be further aligned
in the coming years. The process described below has been
applied to identify impacts, risks, and opportunities across
various sustainability topics, including climate change,
pollution, water, biodiversity, resource use and circular
economy, own workforce, workers in the value chain,
affected communities, consumers and end-users, and
business conduct. This assessment has considered sub-
topics and sub-sub-topics within each sustainability topic.
The assessment was guided by third-party experts and was
carried out in four phases:
Research:
Lindex Group’s operational landscape
was analysed to identify initial impacts, potential risks,
and opportunities. A third -party expert conducted a
comprehensive analysis that pinpointed these impacts
in relation to a predefined list of sustainability matters to
be included in the assessment (AR 16). This phase also
involved researching the Group’s activities, services, and
business models.
Stakeholder engagement:
A comprehensive survey was
conducted with key stakeholder groups from both the
Lindex and Stockmann divisions. The stakeholders included
Board members, employees, customers, suppliers, and in
addition to the these, for the Lindex division, management,
NGOs, representatives of local communities, and store
managers. Through the survey, stakeholders were given an
opportunity to assess each sustainability matter’s impact
and financial implications over short-, medium-, and long-
term time horizons. Additionally, selected stakeholders were
interviewed to gather more in-depth input.
Analysis:
The survey data was processed, prioritised, and
evaluated across various sustainability topics by third-party
experts. The evaluation was based on weighted scores that
considered stakeholder importance and time horizons. The
analysis combined fractional scores, time horizon weights,
and stakeholder weights to determine the overall impact.
The results were then presented to the Leadership Teams
of both the Lindex and Stockmann divisions for validation.
For both divisions, the results from the stakeholder survey
and data analysis were subsequently entered into a
sustainability software’s double materiality assessment tool
for further evaluation, following its specific methodological
approach. The impacts, risks and opportunities were
assessed in collaboration with key personnel from the
Stockmann and Lindex division and third-party consultants.
Lastly, the division-level assessments were reviewed at the
Group level. The material topics for the Group were selected
considering the materiality scores and the significance for
the whole Group. Some topics that were material for the
Stockmann division only, were not considered material for the
Group.
Reporting:
The findings from both the stakeholder
engagement processes and LeadershipTeams’ workshops
were reported and presented to both divisions. The final
Group level results were presented to the Audit Committee
and the Board of Directors during 2024.
Impact identification process
For each identified impact, the following criteria were
analysed: whether the impact is actual or potential, negative
or positive, and direct (own operations) or indirect (as a
result of its business relationships). Impacts were identified
throughout the Group’s value chain, considering both the
effects of its own operations and those resulting from its
business relationships. When identifying impacts, the Group
considered specific activities, business relationships and
geographies that face a heightened risk of adverse impacts.
These included activities and business partners in the
upstream value chain, in geographical locations such as
India, Bangladesh, China, Pakistan, Turkey and Vietnam.
An impact score was determined based on the severity and
likelihood of negative impacts, and for positive impacts,
their scale, scope, and likelihood.
Negative impacts were scored based on severity – a
combination of scale, scope, and remediability – and
likelihood. Severity was prioritised over likelihood for
negative impacts on human rights. Positive impacts were
evaluated based on their scale, scope, and likelihood.
Scoring criteria:
The impacts were scored based on the
following criteria:
Scale – the severity of the impact:
1.
2.
mitigate
3.
reasonable means
4.
disruption and require immediate action
5.
long-term effects
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41
Scope – the extent of the impact and the number of
individuals affected:
1.
2.
affecting a minor share of customers
3.
roughly half of the customers
4.
5.
Remediability – the ability to reverse the impact:
1.
2.
3.
4.
5.
Likelihood – the probability of the impact occurring:
1.
2.
3.
4.
5.
6.
Thresholds used in determining impact and financial
materiality
The threshold for determining impact materiality both at
the Lindex and Stockmann division was set as follows: an
impact is considered material if its severity score is greater
than three, or if its likelihood score reaches four. However,
greater emphasis was placed on the severity of the impact
rather than its likelihood.
The threshold for determining financial materiality at both
the Lindex and Stockmann division was set as follows: an
impact is considered material if its magnitude of financial
effect score is greater than three, or if its likelihood score
reaches four. However, greater emphasis was placed on the
magnitude of the impact rather than its likelihood.
The risk and opportunity identification process
For each risk and opportunity identified, the following criteria
has been considered: the direct or indirect ownership of
the risk and/or opportunity and the negative or positive
financial effect of the risk or opportunity. When identifying
sustainability related risks and opportunities, the Lindex
Group’s value chain as a whole was considered. During
the risk and opportunity identification process, the Group
considered the connection of the impacts and dependencies
with the risks and opportunities that may arise from those
impacts and dependencies, such as for different textile raw
materials that may cause financial risks and opportunities.
Scoring criteria
The risks and opportunities were scored based on the
magnitude of financial effect and the likelihood of it
occurring.
Stockmann division
The magnitude of financial effect (in EBIT, following the
division’s internal risk assessment thresholds):
1.
2.
3.
4.
10,000,000)
5.
50,000,000)
Likelihood of financial effect:
1.
2.
3.
4.
5.
6.
Lindex division
The magnitude of financial effect (in EBIT, following the
division’s internal risk assessment thresholds):
1.
2.
(EUR 1,689,000–3,377,000)
3.
(EUR 3,377,000–6,755,000 )
4.
(EUR 6,755,000–13,509,000)
5.
Likelihood:
1.
2.
3.
4.
5.
6.
Internal controls, risk management and management
process
Key personnel from both divisions have been actively
involved in the decision -making process to identify impacts,
risks, and opportunities. As part of this process, each
division conducted two workshops to validate the results in
collaboration with their key teams, which included members
from the respective Leadership Team.
The double materiality assessment process for both
divisions involved individuals from several departments,
including Sustainability, Strategy, Finance, Communications,
and People and Culture.
Sustainability risks are identified and managed as part
of the Group’s overall risk management process, which
Report of the Board of Directors
42
includes oversight by the Board of Directors and its Audit
Committee. The Group’s Chief Legal Officer is responsible
for overseeing risk management across the organisation.
Sustainability opportunities are identified and managed as
part of the divisions’ annual strategy process.
When identifying and assessing impacts, risks, and
opportunities, the division’s Leadership Teams participate
in the assessment process. The results of the double
materiality assessment have been presented to the Board
of Directors, and the topic will be a key part of the Board
of Directors’ discussions in the future. Both divisions’
sustainability strategies, key focus areas, and risk
assessments are integral to the Board of Directors’ strategic
planning processes. Various sustainability -related risks are
also considered when evaluating the company’s overall risk
profile, as needed.
General information about assessment process on
impacts and risks
Input parameters used in the materiality assessment:
External sources, such as:
•
•
•
•
•
Internal sources, such as:
•
•
•
documents (Carbon Disclosure Project documents,
roadmaps, assessments)
•
Human Rights Policy, action plans related to child and
forced labour, Ethical Policy, Code of Conduct)
•
of the Lindex Group have regularly updated their
materiality assessments, typically aligning with their
two- to three-year strategy periods.
•
materiality assessment process
The key difference between the processes in 2021 and the
current approach is that, for the first time, the Group is now
considering its impacts on society and the environment,
alongside business risks and opportunities related to
various sustainability topics. Previously, there was no
framework to comprehensively assess materiality. Now,
the process follows the principle of double materiality, in
line with the guidelines set by the Corporate Sustainability
Reporting Directive (CSRD).
Given the emphasis on assessing double materiality both
quantitatively and qualitatively, both divisions will now
update their materiality assessments on an annual basis.
These updates will collectively inform the annual revision of
the Group’s overall materiality assessment.
The methodology follows the criteria set by the
Corporate Sustainability Reporting Directive (CSRD) for
determining materiality. The double materiality assessment
encompasses all sustainability matters outlined in the
European Sustainability Reporting Standards (ESRS).
Lindex Group analysed the impacts, risks, and opportunities
within the subtopics and sub-subtopics listed in ESRS 1
General Requirements, Appendix A (AR 16).
For each potential impact, risk, and opportunity, the Group
identified different time horizons for when these may
occur. The time horizons used in the double materiality
assessment are defined as follows:
•
•
to 5 years
•
The assessment also considered some of the affected
stakeholders when determining impacts, risks, and
opportunities. These affected stakeholders, such as the
division’s own employees and customers were engaged
through a stakeholder survey as part of the double
materiality assessment process. Additionally, users of
sustainability information were consulted through surveys
and interviews.
The Group’s value chain was considered for each identified
impact, risk, and opportunity. During the assessment, each
impact, risk, and opportunity was mapped across the value
chain stages (upstream, own operations, downstream) and
placed in their specific positions within the value chain.
Report of the Board of Directors
43
Description of the process to identify and
assess topical material impacts, risks, and
opportunities
Climate change
The climate-related impacts have been identified and
assessed using the same approach described in the
subchapter IRO-1Description of the process to identify
and assess material impacts, risks and opportunities. The
impacts on the Group’s greenhouse gas emissions have
been determined based on greenhouse gas calculation
results from previous years. The Group has identified and
assessed its climate -related risks and opportunities in
alignment with the Task Force on Climate-Related Financial
Disclosures (TCFD). Both transition and physical risks have
been examined, and opportunities have been identified
across areas such as resource efficiency, energy sources,
products and services, markets, and resilience, following
TCFD guidance.
The Group assessed chronic and acute climate -related
hazards across the value chain, from raw materials to
production, logistics, sales, and end-users. Both physical
and transition risks were evaluated over the short-term (less
than 5 years), medium -term (5–10 years), and long-term
(more than 10 years). The process included creating a list
of risks, defining scenarios, and establishing timelines.
These were reviewed and prioritised to form a summary
through internal, cross -departmental discussions. This is the
Group’s first climate assessment, and going forward, it will
be reviewed annually to support continuous improvement
and re-evaluation.
The Group has analysed risks using scenarios
from the International Energy Agency (IEA) and the
Intergovernmental Panel on Climate Change (IPCC),
focusing on RCP 2.6 and RCP 8.5, with the primary focus
to outline both the best -case and worst-case scenarios
to cover plausible transitional and physical risks and
uncertainties supported by research:
•
RCP 2.6
represents a low-emission scenario aimed at
limiting global warming to below 1.5–2°C above pre-
industrial levels. It assumes immediate and significant
reductions in greenhouse gas emissions, with a peak
around 2020 and a continued decline, thereafter,
eventually resulting in net negative emissions by the
end of the century. This scenario depends on a strong
regulatory landscape, advancements in supply chain
technology, and rapid shifts in consumer behaviour.
•
RCP 8.5
is a high-emission scenario that assumes
minimal efforts to reduce emissions, leading
to continuous increases in greenhouse gas
concentrations over the century. This pathway
suggests severe warming, with potential temperature
increases of 4°C or more above pre-industrial levels
by 2100, posing substantial climate impacts and risks
to ecosystems and societies. Under this scenario, the
Group expects significant physical risks across the
value chain.
Transition risks:
The Group has evaluated risks associated
with transition scenarios, particularly under RCP 2.6. This
scenario poses significant near-term risks from factors
such as a stringent regulatory environment, required shifts
in supply chain technology, and changes in consumer
behaviour.
Physical risks:
The Group has assessed physical risks
under various scenarios, considering both acute and
chronic risks. Acute risks, such as extreme weather events,
already affect some areas of the value chain and are
expected to intensify in the short and medium term. Chronic
risks, including temperature changes and water availability,
are projected to impact the medium to long term. Tools such
as the Climate Impact Explorer, along with other national
and regional assessements like the Lindex division’s water
risk assessment (using the Aqueduct tool) and WWF’s
biodiversity risk assessment, support this analysis.
Pollution
The Lindex division has screened its site locations using
the Aqueduct Water Risk Atlas developed by the World
Resources Institute to understand pollution-related impacts,
risks, and opportunities in the value chain. The division has
also consulted various stakeholders related to impacts,
risks, and opportunities, including NGOs. However, the
division has not yet been able to consult directly with the
affected communities. The Lindex division did not include
the asset or business activities screening in the double
materiality assessment process. The identification of
material impacts, risks, and opportunities related to pollution
has followed a similar approach to that used in the general
process for impact, risk, and opportunity assessment.
The Aqueduct Water Risk Atlas is developed by the World
Resources Institute (WRI), following a methodology
comprising four steps: the first step involves combining
data from multiple sources, including hydrological models,
satellite observations and government statistics. The
second step includes an assessment of various indicators
that are used to evaluate water-related risks. The third step
includes hydrological modelling, where water availability
and demand are simulated under different scenarios. The
last step includes a risk assessment where water risks are
analysed by combining the indicators into a composite risk
score. Key assumptions include climate scenarios from
the Intergovernmental Panel on Climate Change (IPCC),
socio-economic scenarios addressing population growth,
economic development, and land-use changes, and
baseline conditions derived from historical data. Additionally,
pollution loads, including agricultural runoff, industrial
discharges, and urban wastewater, are assessed based on
existing data.
Report of the Board of Directors
44
In addition to the double materiality assessment process,
the Stockmann division has not screened its assets and
activities to identify its actual and potential pollution -related
impacts, risks and opportunities in its own operations and
its value chain. In addition to the stakeholder engagement
process in the double materiality assessment, the
Stockmann division has not conducted consultations with
affected communities.
Water
The Lindex division has screened its site locations using
the Aqueduct Water Risk Atlas developed by the World
Resources Institute to understand water-related impacts,
risks and opportunities in its value chain. The methodology
and assumptions used in the Aqueduct Water Risk Atlas are
outlined above in the Pollution section. The division has also
consulted various stakeholders related to impacts, risks and
opportunities, including NGOs such as Water Aid. However,
the division has not yet been able to consult directly with
the affected communities. The Lindex division did not
include the asset or activities screening in the double
materiality assessment process, and the identification of
material impacts, risks and opportunities related to water
has followed a similar approach to that used in the general
process for impact, risk and opportunity assessment. The
E3 Water
chapter outlines the geographical areas where
water is a material issue within the division’s value chain.
In addition to the double materiality assessment process,
the Stockmann division has not screened its assets and
activities to identify its actual and potential water -related
impacts, risks and opportunities in its own operations and
its value chain. In addition to the stakeholder engagement
process in the double materiality assessment, the
Stockmann division has not conducted consultations with
affected communities.
Biodiversity and ecosystems
The identification of material impacts, risks, and
opportunities related to biodiversity and ecosystem
matters has followed a similar approach to that used in
the general process for assessing impacts, risks, and
opportunities. Lindex Group does not have sites located in
or near biodiversity-sensitive areas, however, the Group
sources raw materials from countries such as India and
the wet processing of garments is conducted in countries
such as Bangladesh, India, and China. The sourcing of
raw materials and wet processing negatively affect the
biodiversity of these areas. The sourcing of raw materials
and wet processing are considered systemic risks due
to their impact on water scarcity and the depletion of
resources critical to the Group. The Group has concluded
that mitigation measures related to land and water
connected to these sites need to be investigated further.
Currently, the Group has not conducted an assessment of
transition and physical risks directly related to biodiversity
and ecosystems, however, transition and physical risks and
opportunities connected to land and water was assessed
in the Group’s TCFD analysis. In the general double
materiality assessment process, consultations directly with
affected communities were not conducted.
Resource use and circular economy
The identification of material impacts, risks, and
opportunities related to resource use and circular economy
matters has followed a similar approach to that used in
the general process for assessing impacts, risks and
opportunities. The Group has not screened its assets and
activities during the double materiality assessment process.
Dialogue related to resource use and circular economy
continues through memberships, partnerships, and ongoing
impact, risk and opportunity assessments, including
collaborations with organisations like Textile Exchange,
academia, multi-stakeholder dialogues, and research
projects. The stakeholder dialogue does not include direct
consultations with affected communities.
Business conduct
The identification of material impacts, risks and
opportunities related to business conduct matters has
followed a similar approach to that used in the general
process for assessing impacts, risks and opportunities.
Business conduct matters considered were the locations
and activities of both divisions, along with their respective
sectors and organisational structures.
Report of the Board of Directors
45
IRO–2
Disclosure Requirements in ESRS covered by the undertaking’s sustainability statements
Standard | Disclosure requirement | Name | Location in the report | Standard | Disclosure requirement | Name | Location in the report | |
ESRS 2 | BP-1 | General basis for sustainability statement: | General information (ESRS 2) | ESRS 2 | MDR-A | Actions and resources in relation sustainability matters | E1 Climate Change E2 Pollution E3 Water E4 Biodiversity and S1 Own workforce S2 Workers in S3 Affected communities S4 Consumers and end-users | |
ESRS 2 | BP-2 | Disclosures in relation to specific circumstances | General information (ESRS 2) | |||||
ESRS 2 | GOV-1 | The role of the administrative, management and supervisory bodies | General information (ESRS 2) | |||||
ESRS 2 | GOV-2 | Information provided to, and sustainability matters addressed by the undertaking’s administrative, management and bodies | General information (ESRS 2) | |||||
ESRS 2 | MDR-M | Metrics in relation matters | E1 Climate Change E2 Pollution E3 Water E4 Biodiversity and S1 Own workforce S2 Workers in S3 Affected communities S4 Consumers and end-users | |||||
ESRS 2 | GOV-3 | Integration of in incentive schemes | General information (ESRS 2) | |||||
ESRS 2 | GOV-4 | Statement on sustainability due diligence | General information (ESRS 2) | |||||
ESRS 2 | GOV-5 | Risk management and internal sustainability reporting | General information (ESRS 2) | ESRS 2 | MDR-T | Tracking effectiveness of policies and actions through targets | E1 Climate Change E2 Pollution E3 Water E4 Biodiversity and S1 Own workforce S2 Workers in S3 Affected communities S4 Consumers and end-users | |
ESRS 2 | SBM-1 | Strategy, business model and value chain | General information (ESRS 2) | |||||
ESRS 2 | SBM-2 | Interests and views of stakeholders | General information (ESRS 2) | |||||
ESRS 2 | SBM-3 | Material impacts, risks and their interaction with strategy and business model | General information (ESRS 2) | |||||
E1 | Disclosures pursuant to Regulation | Environmental information | ||||||
ESRS 2 | IRO-1 | Description of the process to identify and assess material impacts, risks and opportunities | General information (ESRS 2) | |||||
E1 | E1-1 | Transition plan for climate change mitigation | E1 Climate Change | |||||
ESRS 2 | IRO-2 | Disclosure Requirements in ESRS the undertaking’s sustainability | General information (ESRS 2) | E1 | E1-2 | Policies related to climate change mitigation and adaptation | E1 Climate Change | |
ESRS 2 | MDR-P | Policies adopted to sustainability matters | E1 Climate Change E2 Pollution E3 Water E4 Biodiversity and S1 Own workforce S2 Workers in S3 Affected communities S4 Consumers and end-users | E1 | E1-3 | Actions and resources in relation change policies | E1 Climate Change | |
E1 | E1-4 | Targets related to climate change mitigation and adaptation | E1 Climate Change | |||||
E1 | E1-5 | Energy consumption and mix | E1 Climate Change | |||||
E1 | E1-6 | Gross Scopes 1,2,3 emissions | E1 Climate Change | |||||
E1 | E1-7 | GHG removals and GHG financed through carbon credits | E1 Climate Change | |||||
Report of the Board of Directors
46
Standard | Disclosure requirement | Name | Location in the report | Standard | Disclosure requirement | Name | Location in the report | |
E1 | E1-8 | Internal carbon pricing | E1 Climate Change | S1 | S1-1 | Policies related to own workforce | S1 Own workforce | |
E2 | E2-1 | Policies related to pollution | E2 Pollution | S1 | S1-2 | Process for engaging with workers’ representatives about impacts | S1 Own workforce | |
E2 | E2-2 | Actions and resources related to pollution | E2 Pollution | |||||
S1 | S1-3 | Process to remediate negative impacts and channels for own workers to raise concerns | S1 Own workforce | |||||
E2 | E2-3 | Targets related to pollution | E2 Pollution | |||||
E2 | E2-4 | Metrics related to pollution | E2 Pollution | S1 | S1-4 | Taking action on material workforce, and approaches to mitigating material risks and pursuing material opportunities related to own effectiveness of those actions | S1 Own workforce | |
E3 | E3-1 | Policies related to water | E3 Water | |||||
E3 | E3-2 | Actions and resources related to marine resources | E3 Water | |||||
E3 | E3-3 | Targets related to water | E3 Water | S1 | S1-5 | Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and | S1 Own workforce | |
E3 | E3-4 | Metrics and water consumption | E3 Water | |||||
E4 | E4-1 | Transition plan and consideration of biodiversity and ecosystems in strategy and business | E4 Biodiversity and ecosystems | S1 | S1-6 | Characteristics of the undertaking's own employees | S1 Own workforce | |
E4 | E4-2 | Policies related to biodiversity and ecosystems | E4 Biodiversity and ecosystems | S1 | S1-7 | Characteristics of the undertaking's non- employee workers in own workforce | S1 Own workforce | |
E4 | E4-3 | Actions and resources related and ecosystems | E4 Biodiversity and ecosystems | S1 | S1-8 | Collective bargaining coverage dialogue | S1 Own workforce | |
E4 | E4-4 | Targets related to biodiversity and ecosystems | E4 Biodiversity and ecosystems | S1 | S1-9 | Diversity metrics | S1 Own workforce | |
E4 | E4-5 | Impact metrics related ecosystems | E4 Biodiversity and ecosystems | S1 | S1-10 | Adequate wages | S1 Own workforce | |
E5 | E5-1 | Policies related to resource use economy | E5 Resource use economy | S1 | S1-14 | Health and safety metrics | S1 Own workforce | |
S1 | S1-16 | Remuneration metrics (pay gap remuneration) | S1 Own workforce | |||||
E5 | E5-2 | Actions and resources related to and circular economy | E5 Resource use economy | |||||
S1 | S1-17 | Incidents, complaints and impacts | S1 Own workforce | |||||
E5 | E5-3 | Targets related to resource use economy | E5 Resource use economy | |||||
S2 | S2-1 | Policies related to value chain workers | S2 Workers in the value chain | |||||
E5 | E5-4 | Resource inflows | E5 Resource use economy | S2 | S2-2 | Processes for engaging with workers about impacts | S2 Workers in the value chain | |
E5 | E5-5 | Resource outflows | E5 Resource use economy | S2 | S2-3 | Processes to remediate negative impacts and channels for value chain concerns | S2 Workers in the value chain | |
S2 | S2-4 | Taking action on material impacts on workers, and approaches to mitigating material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions | S2 Workers in the value chain | |||||
Report of the Board of Directors
47
Standard | Disclosure requirement | Name | Location in the report | Standard | Disclosure requirement | Name | Location in the report | |
S2 | S2-5 | Targets related to managing material impacts, advancing positive impacts, and managing material risks and opportunities | S2 Workers in the value chain | G1 | G1-1 | Business conduct policies and corporate culture | G1 Business conduct | |
G1 | G1-2 | Management of relationships with suppliers | G1 Business conduct | |||||
S3 | S3-1 | Policies related to affected communities | S3 Affected communities | G1 | G1-3 | Prevention and detection of bribery: | G1 Business conduct | |
S3 | S3-2 | Processes for engaging communities about impacts | S3 Affected communities | |||||
G1 | G1-4 | Incidents of corruption or bribery | G1 Business conduct | |||||
S3 | S3-3 | Processes to remediate negative channels for affected communities to raise concerns | S3 Affected communities | G1 | G1-6 | Payment practices | G1 Business conduct | |
S3 | S3-4 | Taking action on material affected communities, and managing material risks and opportunities related to affected communities, and effectiveness of those actions | S3 Affected communities | |||||
S3 | S3-5 | Targets related to managing material impacts, advancing positive impacts, and managing material risks and opportunities | S3 Affected communities | |||||
S4 | S4-1 | Policies related to consumers and end-users | S4 Consumers and end-users | |||||
S4 | S4-2 | Processes for engaging with end-users about impacts | S4 Consumers and end-users | |||||
S4 | S4-3 | Processes to remediate negative channels for consumers to raise concerns | S4 Consumers and end-users | |||||
S4 | S4-4 | Taking action on material consumers and end-users, and mitigating material risks and pursuing material opportunities related to consumers and end- users, and effectiveness of those actions | S4 Consumers and end-users | |||||
S4 | S4-5 | Targets related to managing material impacts, advancing positive impacts, and managing material risks and opportunities | S4 Consumers and end-users | |||||
Report of the Board of Directors
48
List of datapoints in cross-cutting and topical standards that derive from other EU legislation
Disclosure requirement and related data point | SFDR(1) reference | Pillar 3(2) reference | Benchmark Regulation(3) reference | EU Climate Law (4) reference | Page number |
ESRS 2ESRS 2 paragraph 21 (d) | Indicator number 13 #1 of Annex 1 | Commission Delegated Regulation 2020/1816(5), Annex II | 15 | ||
ESRS 2 GOV-1 Percentage of board independent paragraph 21 (e) | Delegated Regulation (EU) 2020/1816, Annex II | 15 | |||
ESRS 2 GOV-4 Statement on due diligence paragraph 30 | Indicator number 10 Table #3 of Annex 1 | 17 | |||
ESRS 2 SBM-1 Involvement in activities related to fossil fuel activities paragraph 40 (d) i | Indicators number 4 Table #1 of Annex 1 | Article 449a Regulation (EU) No Implementing Regulation (EU) 2022/2453(6) Table Qualitative information on Environmental risk and Table 2: Qualitative information on Social risk | Delegated Regulation (EU) 2020/1816, Annex II | 19 | |
ESRS 2 SBM-1 Involvement in activities chemical production paragraph 40 (d) ii | Indicator number 9 Table #2 of Annex 1 | Delegated Regulation (EU) 2020/1816, Annex II | 19 | ||
ESRS 2 SBM-1 Involvement in activities controversial weapons paragraph 40 (d) iii | Indicator number 14 Table #1 of Annex 1 | Delegated Regulation (EU) 2020/1818(7), Article 12(1) Delegated Annex II | 19 | ||
ESRS 2 SBM-1 Involvement in activities related to cultivation and production of tobacco paragraph 40 iv | Delegated Regulation (EU) Delegated Regulation (EU) 2020/1816, Annex II | 19 | |||
ESRS E1-1 Transition plan to reach climate neutrality by 2050 paragraph 14 | Regulation (EU) 2021/1119, 2(1) | 67 | |||
ESRS E1-1 Undertakings excluded Benchmarks paragraph 16 (g) | Article 449a Regulation (EU) No Implementing Regulation (EU) 2022/2453 Template Banking book-Climate Change transition risk: Credit quality of exposures by sector, emissions maturity | Delegated Regulation (EU) Article12.1 (d) to (g), and Article 12.2 | 60 | ||
ESRS E1-4 GHG emission reduction targets paragraph 34 | Indicator number 4 Table #2 of Annex 1 | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template Banking book – Climate metrics | Delegated Regulation (EU) 2020/1818, Article | 64 | |
ESRS E1-5 Energy consumption from fossil disaggregated by sources (only sectors) paragraph 38 | Indicator number 5 Table and Indicator n. Annex 1 | 65 | |||
ESRS E1-5 Energy consumption and mix paragraph 37 | Indicator number 5 Table #1 of Annex 1 | 65 | |||
ESRS E1-5 Energy intensity associated with activities high climate impact sectors paragraphs 40 to 43 | Indicator number 6 Table #1 of Annex 1 | 65 |
Report of the Board of Directors
49
Disclosure requirement and related data point | SFDR(1) reference | Pillar 3(2) reference | Benchmark Regulation(3) reference | EU Climate Law (4) reference | Page number |
ESRS E1-6 Gross Scope 1, emissions paragraph 44 | Indicators number 1 and 2 Table #1 of Annex 1 | Article 449a; Regulation (EU) No Implementing Regulation (EU) 2022/2453 Template Banking book – Climate change transition risk: Credit quality of exposures by sector, emissions maturity | Delegated Regulation (EU) 6 and 8(1) | 66 | |
ESRS E1-6 Gross GHG emissions intensity paragraphs 53 to 55 | Indicators number 3 Table #1 of Annex 1 | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 Template Banking book – Climate metrics | Delegated Regulation (EU) 2020/1818, Article | 66 | |
ESRS E1-7 GHG removals and carbon credits paragraph 56 | Regulation (EU) 2021/1119, Article 2(1) | 69 | |||
ESRS E1-9 Exposure of the benchmark portfolio to climate-related physical risks paragraph 66 | Delegated Regulation (EU) Delegated Regulation (EU) 2020/1816, Annex II | Phased-in | |||
ESRS E1-9 Disaggregation of monetary amounts by acute and chronic physical risk paragraph 66 (a) ESRS E1-9 Location of significant assets at material risk paragraph 66 (c). | Article 449a Regulation (EU) No Implementing Regulation (EU) 2022/2453 paragraphs 46 and 47; Template 5: Banking physical risk: Exposures subject to physical risk. | Phased-in | |||
ESRS E1-9 Breakdown of the carrying value of its estate assets by 67 (c). | Article 449a Regulation (EU) No 575/2013; Commission Implementing Regulation (EU) 2022/2453 paragraph 34; Template 2:Banking book -Climate change transition Loans collateralised by immovable property - Energy efficiency of the collateral | Phased-in | |||
ESRS E1-9 Degree of exposure of climate- related opportunities paragraph 69 | Delegated Regulation (EU) 2020/1818, Annex II | Phased-in | |||
ESRS E2-4 Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant and Transfer Register) emitted to air, paragraph 28 | Indicator number 8 Table #1 of Annex 1 Indicator number 2 Table #2 of Annex 1 Indicator number 1 Table #2 of Annex 1 Indicator number 3 Table #2 of Annex 1 | Not material | |||
ESRS E3-1 Water and marine resources paragraph 9 | Indicator number 7 Table #2 of Annex 1 | 73 | |||
ESRS E3-1 Dedicated policy paragraph 13 | Indicator number 8 Table 2 of Annex 1 | 73 | |||
ESRS E3-1 Sustainable oceans and seas paragraph 14 | Indicator number 12 Table #2 of Annex 1 | Not material | |||
ESRS E3-4 Total water recycled and reused 28 (c) | Indicator number 6.2 Table #2 of Annex 1 | Not material | |||
ESRS E3-4 Total water consumption in m 3 per net revenue on own operations paragraph 29 | Indicator number 6.1 Table #2 of Annex 1 | Not material |
Report of the Board of Directors
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Disclosure requirement and related data point | SFDR(1) reference | Pillar 3(2) reference | Benchmark Regulation(3) reference | EU Climate Law (4) reference | Page number |
ESRS 2- SBM 3 - E4 paragraph 16 (a) i | Indicator number 7 Table #1 of Annex 1 | 32 | |||
ESRS 2-SBM 3 - E4 paragraph 16 (b) | Indicator number 10 Table #2 of Annex 1 | 32 | |||
ESRS 2- SBM 3 - E4 paragraph 16 (c) | Indicator number 14 Table #2 of Annex 1 | 32 | |||
ESRS E4-2 Sustainable land / agriculture policies paragraph 24 (b) | Indicator number 11 Table #2 of Annex 1 | 76 | |||
ESRS E4-2 Sustainable oceans / seas policies paragraph 24 (c) | Indicator number 12 Table #2 of Annex 1 | 76 | |||
ESRS E4-2 Policies to address 24 (d) | Indicator number 15 Table #2 of Annex 1 | 76 | |||
ESRS E5-5 Non-recycled waste paragraph 37 (d) | Indicator number 13 Table #2 of Annex 1 | Not material | |||
ESRS E5-5 Hazardous waste and radioactive waste paragraph 39 | Indicator number 9 Table #1 of Annex 1 | Not material | |||
ESRS 2- SBM3 - S1 Risk of paragraph 14 (f) | Indicator number 13 of Annex I | 35 | |||
ESRS 2- SBM3 - S1 Risk of paragraph 14 (g) | Indicator number 12 of Annex I | 35 | |||
ESRS S1-1 Human rights policy commitments paragraph 20 | Indicator number 9 Table and Indicator number #1 of Annex I | 89 | |||
ESRS S1-1 Due diligence policies on by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 21 | Delegated Regulation (EU) 2020/1816, Annex II | 89 | |||
ESRS S1-1 processes and measures trafficking in human beings paragraph 22 | Indicator number 11 Table #3 of Annex I | 89 | |||
ESRS S1-1 workplace accident prevention policy management system paragraph 23 | Indicator number 1 of Annex I | 89 | |||
ESRS S1-3 paragraph 32 (c) | Indicator number 5 of Annex I | 90 | |||
ESRS S1-14 Number of fatalities and number and work- | Indicator number 2 of Annex I | Delegated Regulation (EU) 2020/1816, Annex II | Phased-in | ||
ESRS S1-14 Number of days lost to fatalities or illness paragraph 88 (e) | Indicator number 3 of Annex I | Phased-in |
Report of the Board of Directors
51
Disclosure requirement and related data point | SFDR(1) reference | Pillar 3(2) reference | Benchmark Regulation(3) reference | EU Climate Law (4) reference | Page number |
ESRS S1-16 Unadjusted gender pay gap (a) | Indicator number 12 of Annex I | Delegated Regulation (EU) 2020/1816, Annex II | 94 | ||
ESRS S1-16 Excessive CEO pay ratio paragraph 97 (b) | Indicator number 8 of Annex I | 94 | |||
ESRS S1-17 Incidents of discrimination paragraph 103 (a) | Indicator number 7 of Annex I | 94 | |||
ESRS S1-17 Non-respect of UNGPs on Business and Human Rights and OECD Guidelines paragraph 104 | Indicator number 10 Table #1 and Indicator n. of Annex I | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818 Art | 94 | ||
ESRS 2- SBM3 – S2 Significant risk of forced labour in the value chain paragraph 11 (b) | Indicators number 12 13 Table #3 of Annex | 36 | |||
ESRS S2-1 Human rights policy commitments paragraph 17 | Indicator number 9 Table and Indicator n. Annex 1 | 97 | |||
ESRS S2-1 Policies related to value chain workers paragraph 18 | Indicator number 11 and n. 4 Table #3 of Annex 1 | 97 | |||
ESRS S2-1Non-respect of UNGPs on Business Human Rights principles and OECD guidelines paragraph 19 | ESRS S2-1Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines paragraph | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, | 97 | ||
ESRS S2-1 Due diligence policies on by the fundamental International Labor Organisation Conventions 1 to 8, paragraph 19 | Delegated Regulation (EU) 2020/1816, Annex II | 97 | |||
ESRS S2-4 Human rights issues and incidents connected to its upstream and downstream value paragraph 36 | Indicator number 14 Table #3 of Annex 1 | 99 | |||
ESRS S3-1 Human rights policy commitments paragraph 16 | Indicator number 9 Table #3 of Annex 1 and Indicator 11 Table | 103 | |||
ESRS S3-1 non-respect of UNGPs on Human Rights, ILO principles or OECD guidelines paragraph 17 | Indicator number 10 Table #1 Annex 1 | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, | 103 | ||
ESRS S3-4 Human rights issues and incidents paragraph 36 | Indicator number 14 Table #3 of Annex 1 | 104 | |||
ESRS S4-1 Policies related to consumers and end-users paragraph 16 | Indicator number 9 Table and Indicator number #1 of Annex 1 | 111 | |||
ESRS S4-1 Non-respect of UNGPs on Human Rights and OECD guidelines paragraph 17 | Indicator number 10 Table #1 of Annex 1 | Delegated Regulation (EU) 2020/1816, Annex II Delegated Regulation (EU) 2020/1818, | 111 |
Report of the Board of Directors
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Disclosure requirement and related data point | SFDR(1) reference | Pillar 3(2) reference | Benchmark Regulation(3) reference | EU Climate Law (4) reference | Page number |
ESRS S4-4 Human rights issues and incidents paragraph 35 | Indicator number 14 Table #3 of Annex 1 | 112 | |||
ESRS G1-1 United Corruption paragraph 10 (b) | Indicator number 15 Table #3 of Annex 1 | 114 | |||
ESRS G1-1 Protection of whistle- 10 (d) | Indicator number 6 Table #3 of Annex 1 | 114 | |||
ESRS G1-4 Fines for violation of anti- anti-bribery laws paragraph 24 (a) | Indicator number 17 Table #3 of Annex 1 | Delegated Regulation (EU) 2020/1816, Annex II) | 116 | ||
ESRS G1-4 Standards of anti- bribery paragraph 24 (b) | Indicator number 16 Table #3 of Annex 1 | 116 |
Report of the Board of Directors
53
ENVIRONMENTAL
INFORMATION
Disclosures pursuant
to Article 8 of
Taxonomy Regulation
EU Taxonomy-eligible and -aligned
activities
Background
The EU Taxonomy is the EU’s sustainable finance
classification system, which defines environmentally
sustainable economic activities. It aims to provide definitions
and transparent reporting to support increased finance
for activities that substantially contribute to solving the
climate and environmental crisis in line with the European
Green Deal objective. The EU Taxonomy is comprised
of the EU Taxonomy Regulation (2020/852/EU) and the
Commission Delegated Acts. The Regulation addresses six
key environmental objectives, which are (1) climate change
mitigation, (2) climate change adaptation, (3) the sustainable
use and protection of water, (4) the transition to a circular
economy, (5) pollution prevention and control and (6) the
protection and restoration of biodiversity and ecosystems,
to guide businesses in reporting their contributions to a
sustainable economy.
Lindex Group has carried out assessments to identify
activities within the scope of the Taxonomy Regulation for
both divisions: Stockmann and Lindex. The Group has
reported in line with the EU Taxonomy Regulation since
2021. Lindex 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, retail business as Lindex
Group’s primary field of operations 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
environmental objectives of the Taxonomy, such as the
circular economy, but applicable criteria have not yet been
published.
Assessment of Taxonomy -eligible economic activities
Taxonomy -eligible activities are those activities that are
described in the Taxonomy Delegated Acts and for which
technical screening criteria are available. The primary activity
relevant for Lindex Group which has been identified as
eligible in the Climate Delegated Act 2021/2139 is activity
7.7.
‘Acquisition and ownership of buildings (Renting and
operating of own or leased real estate)
’. Lindex Group has
also assessed other potentially applicable activities but has
determined them to be either not material or not relevant, as
explained further.
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 Lindex Group has defined and therefore
the activity has been categorised as non-eligible. Lindex
Group has also evaluated the economic activities in the
Environmental Delegated Act 2023/2486. While ‘
activity 3.2.
Renovation of existing buildings’
applies to Lindex 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 as the second-hand goods’ sales are
conducted by partners in the case of the Stockmann division
and not being material in the case of the Lindex division.
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’)
.
There are nine real estate properties in the Stockmann
division – eight department stores and a distribution centre.
The leases of the Stockmann division’s department stores
and the distribution centre are treated as right-of -use assets
in the Group’s accounts in accordance with IFRS 16.
Most of the premises of the Lindex division’s 411 stores
(excluding franchising) are right-of-use assets and reported
in accordance with IFRS 16. However, there are also some
operating leases based on the stores’ turnover that are not
reported as right-of-use assets and hence do not come
under the scope of Activity 7.7 Acquisition and ownership of
buildings. The Lindex division’s new omnichannel distribution
centre also comes under the scope of Activity 7.7 and is
included as being eligible for the EU Taxonomy assessment.
The agreements of right-of-use assets for Lindex division’s
two older distribution centres were terminated in the
beginning of 2024, however they are still in scope for
eligibility as of short -term rental operational expense.
Assessment of Taxonomy -aligned economic activities
In order for an eligible activity to be classified as aligned,
it should comply with technical screening criteria (TSC)
defined by the EU. According to the TSC, an activity should
‘substantially contribute’ to at least one environmental
objective and avoid causing ‘significant harm’ to any of the
other five objectives. Furthermore, the Group should comply
with the minimum safeguards.
Report of the Board of Directors
54
Lindex 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
the Taxonomy Regulation (EU) 2020/852. The Group has
focused on TSC for the climate change mitigation (CCM)
environmental objective.
Substantial contribution
The EU Taxonomy TSC for the Climate Delegated Act
establishes criteria to meet the climate change mitigation
objective for Activity
‘7.7 Acquisition and ownership of
buildings’
. The substantial contribution criteria require that
the building has at least an Energy Performance Certificate
(EPC) of class A. The criteria also require that large non-
residential buildings are efficiently operated through energy
performance monitoring and assessment.
Out of all properties operated by the Stockmann division, the
Jussla distribution centre has obtained an EPC of class A. It
has also fulfilled the requirements of the LEED green building
rating system certification and received the ‘Gold’ rating.
The Lindex division stores are mainly located in shopping
centers or large buildings and hence occupy only a small
proportion of the whole property. All new or renegotiated
leasing agreements during 2024 that are right-of-use assets
come under the scope of Activity
‘7.7 Acquisition and
ownership of buildings’
. As the amount of work involved in
collecting the evidence and information on properties where
the Lindex division stores are located and the number of
parties involved is very large, while the property area covered
by Lindex store is small, Lindex Group has not conducted
an in-depth assessment of compliance with the substantial
contribution for Lindex division stores.
The Lindex division’s omnichannel distribution centre also
comes under the scope of Activity ‘
7.7 Acquisition and
ownership of buildings’
. According to the TSC regarding
Activity 7.7., for buildings built after 31 December 2020,
the building needs to meet the TSC specified in Activity 7.1
Construction of new buildings. This is relevant for the Lindex
division’s new distribution centre. However, as it has only
recently been transferred to the division’s consolidation, it
has not been possible to collect all the required information
and documents to check against substantial contribution
criteria. This will be assessed during 2025.
Do no significant harm
According to the DNSH criteria for the
‘Acquisition and
ownership of buildings’
activity, a robust climate risk and
vulnerability assessment has to be performed and the
physical climate risks that are material to the activity have
to be identified and evaluated. So far, Lindex Group has
not conducted the identification of climate risks, including
physical climate risks in accordance with the DNHS criteria,
and will update its compliance with the DNSH criteria when
such climate risk and vulnerability assessment is performed.
Minimum safeguards
Lindex Group has reviewed the minimum safeguards with
respect to human rights, bribery and corruption, taxation and
fair competition, which are included in the EU Taxonomy
Regulation. Currently, Lindex division’s activities are aligned
with these minimum safeguards. Stockmann division is
aligned with the requirements on bribery and corruption,
taxation, and fair competition. However, the Stockmann
division has not yet implemented a Human Rights Due
Diligence (HRDD) process.
Lindex Group’s Code of Conduct, Human Rights Policy,
Anti-Corruption Policy and other related policies establish the
principles and standards expected of employees, suppliers,
distributors, and other business partners. The Group is
dedicated to upholding and promoting internationally
recognised labour and human rights standards.
During the reporting period, Lindex Group has not had any
breaches of labour law or human rights, and neither the
company nor senior management have been convicted of
corruption in court. The Group follows the taxation law, which
means that it has a tax governance in place, and there has
been no violation of tax laws. The Group follows the law
regarding fair competition, and senior management has not
been convicted of violating competition laws.
Lindex Group is working on strengthen its human rights’ due
diligence process to secure alignment with the UN Guiding
Principles on Business and Human Rights. Read more about
human rights, bribery and anti-corruption in chapter
G1
Business conduct of this report
.
Methodology to determine and calculate the
EU Taxonomy Key Performance Indicators
(KPIs)
Accounting policy
The definitions of Taxonomy KPIs are based on the
Disclosures Delegated Act, which supplements the Taxonomy
Regulation and follow requirements of the disclosures under
Article 8(2) of Regulation (EU) 2020/852. The Taxonomy
reporting scope covers both divisions of Lindex Group:
Stockmann and Lindex. The KPIs’ calculations follow general
materiality principles and are determined based on the
Group’s financial reporting information presented in the Notes
to the Consolidated Financial Statements in Lindex Group’s
Financial Review 2024 in accordance with IFRS.
There is no risk of double counting as the identification of
eligible KPIs was made based on the Group-level. Only
transactions with third parties have been considered. Turnover,
capital expenditure, and operating expenditure relate in full
only to the climate change mitigation environmental objective.
To determine the percentages, the taxonomy-eligible and
Report of the Board of Directors
55
taxonomy-aligned turnover, capital expenditure, and operating
expenditure are each set in relation to total turnover, total
capital expenditure, and total operating expenditure according
to the definitions of the EU Taxonomy.
The tables indicating the extent of eligibility and alignment as
required by the EU Taxonomy Regulation are shown at the
end of the chapter.
Turnover
Total turnover is determined as the revenue reported in the
Consolidated Income Statement as of 31 December 2024,
which amounted to EUR 940.1 million, see Note 2.2.1.1.
Lindex Group’s Taxonomy -eligible turnover is calculated
as turnover from sublease and concession agreements,
which for 2024 amounted to EUR 18.4 million. Only the
Stockmann division’s eight department stores have turnover
from sublease and concession agreements. The share of
the Lindex Group’s Taxonomy -eligible turnover is calculated
as turnover from sublease and concession agreements as a
proportion of Lindex Group’s total turnover.
Following the assessments for the technical screening
criteria for economic activities relevant for Lindex Group
as described above, the Group does not deem any of its
turnover as aligned.
Capital expenditures (CapEx)
Total CapEx as defined by the Taxonomy Regulation is
determined as additions to tangible and intangible assets
during the financial year considered before depreciation,
amortisation and any re-measurements, including those
resulting from revaluations and impairments for 2024 and
excluding fair value changes. Total CapEx for 2024 amounted
to EUR 139.9 million, see Notes 3.2, 3.3 and 3.5.
Lindex Group’s Taxonomy -eligible CapEx is calculated as
CapEx investments for right-of-use buildings and structures,
owned buildings, as well as advance payments and work in
progress, which as of 31 December 2024 was EUR 103.6
million. All of the eligible CapEx is considered for category
(a) CapEx related to assets or processes that are associated
with Taxonomy -eligible or Taxonomy -aligned economic
activities. The share of the Lindex Group’s Taxonomy -eligible
CapEx is calculated as CapEx as well as advance payments
and work in progress related to right-of-use and owned
buildings as a proportion of Lindex Group’s total CapEx as
defined by the EU Taxonomy.
Based on the technical screening criteria as described above,
the Group did not identify any aligned CapEx.
Operating expenses (OpEx)
According to the EU Taxonomy definition of the OpEx KPI,
the total OpEx includes research and development, 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 Lindex Group OpEx does not include ICT expenses
as it is not possible to separate ICT expenses related to
maintenance from other ICT expenses. For 2024, total OpEx
according to the Taxonomy definition amounted to EUR 41.4
million, see Note 2.6.
Lindex Group’s Taxonomy -eligible OpEx is determined as
OpEx related to real estate maintenance, which as of 31
December 2024 was EUR 4.2 million. The share of Lindex
Group’s Taxonomy -eligible OpEx is calculated as OpEx
related to real estate maintenance as a proportion of Lindex
Group’s total OpEx, according to the Taxonomy definition.
Based on the technical screening criteria as described above,
the Group did not identify any aligned OpEx.
Report of the Board of Directors
56
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024
Financial year | 2024 | Substantial contribution | DNSH criteria | ||||||||||||||||
Economic activities | Code(s) (2) | Turnover (3) | Proportion of turnover, year 2024 (4) | Climate Change Mitigation (5) | Climate Change Adaptation (6) | Water (7) | Pollution (8) | Circular Economy (9) | Biodiversity (10) | Climate Change Mitigation (11) | Climate Change Adaptation (12) | Water (13) | Pollution (14) | Circular Economy (15) | Biodiversity (16) | Minimum safeguards (17) | Proportion of Taxonomy - aligned (A.1.) or eligible (A.2.) turnover, year 2023 (18) | Category (enabling activity) (19) | Category (transitional activity) (20) |
EUR million | % 1 | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % 1 | E | T | ||
A. TAXONOMY -ELIGIBLE ACTIVITIES
A.1 Environmentally | (Taxonomy | -aligned | ) | ||||||||||||||||
Acquisition and ownership of buildings (Renting and operating of own or leased real | CCM 7.7 | 0.0 | 0.0% | 0.0% | |||||||||||||||
Turnover of environmentally activities (Taxonomy | 0.0 | 0.0% | 0.0% | ||||||||||||||||
Of which enabling | 0.0 | 0.0% | 0.0% | E | |||||||||||||||
Of which transitional | 0.0 | 0.0% | 0.0% | T | |||||||||||||||
A.2. Taxonomy | tally susta | inable | activities | (not Taxo | nomy- | aligned | activi | ties) | ||||
EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | |||||||
Acquisition and ownership of buildings (Renting and operating of own or leased real | CCM 7.7 | 18.4 | 2.0% | EL | N/EL | N/EL | N/EL | N/EL | N/EL | 1.9% | ||
Turnover from Taxonomy environmentally sustainable (not Taxonomy | 18.4 | 2.0% | 100% | N/EL | N/EL | N/EL | N/EL | N/EL | 1.9% | |||
A. Turnover of Taxonomy activities (A.1+A.2) | 18.4 | 2.0% | 100% | N/EL | N/EL | N/EL | N/EL | N/EL | 1.9% | |||
B. TAXONOMY | ||
Turnover of | 921.8 | 98.0% |
TOTAL (A+B) | 940.1 | 100.0% |
EL
– Taxonomy eligible activity for the relevant objective
N/EL
– Taxonomy non-eligible activity for the relevant objective
Y - Yes
– Taxonomy -eligible and Taxonomy -aligned activity with
the relevant environmental objective
N - No
– Taxonomy -eligible but not Taxonomy-aligned activity
with the relevant environmental objective
1)
All percentages relate to the Group’s sales revenue of Taxonomy -eligible and -non-eligible activities.
Of Lindex Group’s sales revenue of Taxonomy-eligible and -non-eligible activities in 2024, EUR 18.4 (18.3) million, or 2.0% (1.9%), was Taxonomy -eligible sales revenue.
Report of the Board of Directors
57
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024
Financial year | 2024 | Substantial contribution | DNSH criteria | ||||||||||||||||
Economic activities | Code(s) (2) | CapEx (3) | Proportion of CapEx, 2024 (4) | Climate Change Mitigation (5) | Climate Change Adaptation (6) | Water (7) | Pollution (8) | Circular Economy (9) | Biodiversity (10) | Climate Change Mitigation (11) | Climate Change Adaptation (12) | Water (13) | Pollution (14) | Circular Economy (15) | Biodiversity (16) | Minimum safeguards (17) | Proportion of Taxonomy - aligned (A.1.) or eligible (A.2.) CapEx, year 2023 (18) | Category (enabling activity) (19) | Category (transitional activity) (20) |
EUR million | % 1 | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % 1 | E | T | ||
A. TAXONOMY -ELIGIBLE ACTIVITIES
A.1 Environmentally | (Taxonomy | -aligned | ) | ||||||||||||||||
Acquisition and ownership of buildings (Renting and operating of own or leased real | CCM 7.7 | 0.0 | 0.0% | 0.0% | |||||||||||||||
CapEx of environmentally sustainable activities (Taxonomy | 0.0 | 0.0% | 0.0% | ||||||||||||||||
Of which enabling | 0.0 | 0.0% | 0.0% | E | |||||||||||||||
Of which transitional | 0.0 | 0.0% | 0.0% | T | |||||||||||||||
A.2. Taxonomy | tally susta | inable | activities | (not Taxo | nomy- | aligned | activi | ties) | ||||
EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | |||||||
Acquisition and ownership of buildings (Renting and operating of own or leased real | CCM 7.7 | 103.6 | 74.1% | EL | EL | N/EL | N/EL | N/EL | N/EL | 87.6% | ||
CapEx of Taxonomy environmentally sustainable (not Taxonomy | 103.6 | 74.1% | 100% | 0% | N/EL | N/EL | N/EL | N/EL | 87.6% | |||
A. CapEx of Taxonomy activities (A.1+A.2) | 103.6 | 74.1% | 100% | 0% | N/EL | N/EL | N/EL | N/EL | 87.6% | |||
B. TAXONOMY | ||
CapEx of Taxonomy-non-eligible activities (B) | 36.3 | 25.9% |
TOTAL (A+B) | 139.9 | 100.0% |
EL
– Taxonomy eligible activity for the relevant objective
N/EL
– Taxonomy non-eligible activity for the relevant objective
Y - Yes
– Taxonomy -eligible and Taxonomy -aligned activity with
the relevant environmental objective
N - No
– Taxonomy -eligible but not Taxonomy -aligned activity
with the relevant environmental objective
1)
All percentages relate to the Group’s capital expenditure of Taxonomy -eligible and -non-eligible activities.
Of Lindex Group’s capital expenditure of Taxonomy -eligible and -non-eligible activities in 2024, EUR 103.6 (152.7) million, or 74.1% (87.6%), was Taxonomy -eligible capital expenditure.
Report of the Board of Directors
58
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024
Financial year | 2024 | Substantial contribution | DNSH criteria | ||||||||||||||||
Economic activities | Code(s) (2) | OpEx (3) | Proportion of OpEx, year 2024 (4) | Climate Change Mitigation (5) | Climate Change Adaptation (6) | Water (7) | Pollution (8) | Circular Economy (9) | Biodiversity (10) | Climate Change Mitigation (11) | Climate Change Adaptation (12) | Water (13) | Pollution (14) | Circular Economy (15) | Biodiversity (16) | Minimum safeguards (17) | Proportion of Taxonomy - aligned (A.1.) or eligible (A.2.) OpEx, year 2023 (18) | Category (enabling activity) (19) | Category (transitional activity) (20) |
EUR million | % 1 | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y;N; N/EL | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % 1 | E | T | ||
A. TAXONOMY -ELIGIBLE ACTIVITIES
A.1 Environmentally | (Taxonomy | -aligned | ) | ||||||||||||||||
Acquisition and ownership of buildings (Renting and operating of own or leased real | CCM 7.7 | 0.0 | 0.0% | 0.0% | |||||||||||||||
OpEx of environmentally sustainable activities (Taxonomy | 0.0 | 0.0% | 0.0% | ||||||||||||||||
Of which enabling | 0.0 | 0.0% | 0.0% | E | |||||||||||||||
Of which transitional | 0.0 | 0.0% | 0.0% | T | |||||||||||||||
A.2. Taxonomy | tally susta | inable | activities | (not Taxo | nomy- | aligned | activi | ties) | ||||
EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | EL; N/EL | |||||||
Acquisition and ownership of buildings (Renting and operating of own or leased real | CCM 7.7 | 4.2 | 10.1% | EL | EL | N/EL | N/EL | N/EL | N/EL | 8.7% | ||
OpEx of Taxonomy environmentally sustainable (not Taxonomy | 4.2 | 10.1% | 100% | 0% | N/EL | N/EL | N/EL | N/EL | 8.7% | |||
A. OpEx of Taxonomy activities (A.1+A.2) | 4.2 | 10.1% | 100% | 0% | N/EL | N/EL | N/EL | N/EL | 8.7% | |||
B. TAXONOMY | ||
OpEx of | 37.2 | 89.9% |
TOTAL (A+B) | 41.4 | 100.0% |
EL
– Taxonomy eligible activity for the relevant objective
N/EL
– Taxonomy non-eligible activity for the relevant objective
Y - Yes
– Taxonomy -eligible and Taxonomy -aligned activity with
the relevant environmental objective
N - No
– Taxonomy -eligible but not Taxonomy -aligned activity
with the relevant environmental objective
1)
All percentages relate to the Group’s operating expenditure of Taxonomy-eligible and -non-eligible activities.
Of Lindex Group’s operating expenditure of Taxonomy -eligible and -non-eligible activities in 2024, EUR 4.2 (3.7) million, or 10.1% (8.7%), was Taxonomy -eligible operating expenditure.
Report of the Board of Directors
59
Nuclear energy and fossil gas related activities
With regard to nuclear energy and fossil gas related activities, Lindex Group did not carry out such activities in 2024, as shown in
the table below and required to disclose by Complementary Climate Delegated Act 2022/1214:
Nuclear energy | ||
1 | The undertaking carries out, funds deployment of innovative electricity minimal waste from the fuel cycle. | NO |
2 | The undertaking carries out, funds installations to produce electricity industrial processes such as hydrogen technologies. | NO |
3 | The undertaking carries out, funds produce electricity or process such as hydrogen production | NO |
Fossil gas related | ||
4 | The undertaking carries out, funds facilities that produce electricity | NO |
5 | The undertaking carries out, funds combined heat/cool and power | NO |
6 | The undertaking carries out, funds generation facilities that produce | NO |
Report of the Board of Directors
60
E1
Climate Change
E1–1
Transition plan for climate change mitigation
Lindex Group is committed to achieving a 42% absolute
reduction in CO
2
eq emissions across Scopes 1, 2 and
3 by 2030, using 2022 as the baseline year. This target
aligns with the Paris Agreement’s goal of limiting global
warming to 1.5°C and has been validated by the Science
Based Targets initiative (SBTi). The target is currently a
near-term reduction of 42% by 2030, although a climate
neutrality objective has not yet been established. The
target level was determined by assessing three climate
scenarios; baseline, middle and ambitious. Ultimately,
the ambitious level was selected. The reduction target
applies throughout the entire group; however, as of now,
only the Lindex division has developed a transition plan to
meet this target. The division’s transition plan is not fully
aligned with ESRS requirements. The major gaps are lack
of governance description, EU Taxonomy alignment, and
integration of biodiversity risks as well as a just transition. A
transition plan for Stockmann division will be drafted later in
2025. The Group is not excluded from the EU Paris-aligned
Benchmarks.
The targets in line with the Lindex division’s transition plan
are outlined in the subchapter,
E1-4 Targets Related to
Climate Change Mitigation and Adaptation
, while the actions
to achieve these targets are outlined in the subchapter,
E1-3 Actions Related to Climate Change Mitigation and
Adaptation
. The Lindex division recognises that achieving
its climate goals requires significant investment and
collaboration throughout its value chain. The division
has already invested in energy efficiency measures and
renewable electricity contracts throughout its operations.
Looking ahead, the Lindex division plans to continue
investing in low-carbon materials, renewable heating
sources and biofuels for transportation. To further accelerate
energy efficiency and secure access to renewable energy
in the production countries, the division needs to engage
in the development of new technologies. New technologies
are also key in shifting to low carbon materials and increase
postconsumer textile recycling.
The Lindex division is also working closely with commercial
goods suppliers, providing technical support and
consultancy to help them transition to energy-efficient,
renewable-based production processes. Additionally, Lindex
is engaging with policymakers, industry peers and NGOs
in key production countries to increase the availability of
renewable energy.
The Group recognises that its operations contribute
to locked-in greenhouse gas (GHG) emissions within
its operations and supply chain. These locked -in GHG
emissions could stem from material sourcing, manufacturing
processes, transportation and waste management
practices, among other factors. However, due to current
limitations in data availability and standardisation, the
Group is not yet calculating the related data.
The Lindex division’s climate targets are embedded in the
division’s overall business strategy and financial planning.
The division is focused on optimising product volumes to
reduce overproduction and emissions, while balancing
growth.
The division’s transition plan has been approved by the
Lindex division’s leadership team and the Board of Directors
ensuring alignment with long-term strategic goals.
Lindex division’s progress
•
Scope 1 & 2:
Since 2022, the Lindex division has
reduced Scope 1 emissions by 27%, primarily through
the adoption of electric and hybrid vehicles. In 2024,
Scope 1 & 2 increased 31% compared to 2022,
mainly due to increased total square meters across
all its facilities. Moving forward, the focus will be on
renewable sources to cover heating.
•
Scope 3:
In 2024, the emissions from production of
garments (Scope 3, cat 1) increased due to higher
intake volumes and changes in the assortment mix.
Going forward, Lindex division will carefully balance its
strategic growth plan with a clear focus on optimising
the value of each product. To minimise overproduction,
the company will focus on delivering the right product,
in the right place, and in the right quantity.
Report of the Board of Directors
61
E1–2
Policies related to climate change mitigation
and adaptation
Lindex Group has put in place an Environmental Policy
that addresses its material impacts, risks and opportunities
related to climate change mitigation and adaptation. This
policy outlines Lindex Group’s commitment to respecting
the environment and safeguarding a healthy and safe planet
through its own operations, its upstream and downstream
value chain, and its sourcing, production, logistics and sales
processes. The policy applies to all business partners,
ensuring that they also follow the same environmental
principles.
The policy focuses on the following material environmental
areas:
•
•
•
•
•
The policy is designed to actively identify, assess and
mitigate environmental impacts, while contributing positively
to communities across Lindex Group’s value chain. It
is aligned with international frameworks and addresses
climate-related risks and opportunities, particularly through
decarbonising the supply chain, shifting to low-carbon
materials, adopting renewable energy and energy efficiency
measures, and advancing the transition to a circular
business model.
Lindex Group’s Environmental Policy covers all aspects of
its operations and value chain, including:
•
procurement and logistics.
•
the Group operates, with a particular focus on major
sourcing countries.
•
including employees, business partners, suppliers and
customers.
Lindex Group is committed to reducing GHG emissions
across Scopes 1, 2 and 3, aiming for a 42% reduction
by 2030, in line with science-based targets and the Paris
Agreement’s 1.5°C goal. The policy includes:
•
GHG emissions, particularly in the supply chain using
renewable energy and low-carbon materials.
•
for resilience and adaptation within Lindex Group’s
business strategy and through broader industry
collaborations, advocating for transformational change
towards a circular economy.
The policy commits to transitioning Lindex Group’s
operations, including stores, transportation and the supply
chain, to renewable energy sources and improving energy
efficiency. Special emphasis is placed on decarbonising
textile processing and production and increasing the use of
low-carbon materials.
The Lindex Group Board of Directors holds the highest
level of responsibility for managing environmental risks,
impacts and opportunities. The Corporate Sustainability
Team formulates and reviews the policy, while the Group
Management Team, alongside business functions, is
responsible for its implementation across all departments.
Lindex Group’s Environmental Policy is aligned with key
international frameworks, including:
•
•
(UNFCCC)
•
•
•
•
Circular Economy
•
(GBF)
•
organic pollutants (POPs)
Stakeholder engagement is integral to the development
and execution of the policy. Lindex Group actively
consults various stakeholders, including suppliers, NGOs,
customers and industry partners, to incorporate their input
and maintain a dialogue on environmental issues. This
includes regular visits to commercial goods suppliers,
capacity-building projects, extensive industry collaboration
through memberships and platforms, as well as open
communication channels with customers via social media
and surveys.
Lindex Group prioritises transparent reporting, adhering
to the EU Corporate Sustainability Reporting Directive
and other legal obligations. The company also shares its
progress with industry peers and stakeholders, promoting
best practices in sustainability. The Environmental Policy
can be found on Lindex Group’s website.
Report of the Board of Directors
62
E1–3
Actions and resources in relation to climate
change policies
Lindex Group has developed and implemented key actions
in both divisions focused on addressing climate-related
risks and opportunities and to support global efforts in
mitigating and adapting to climate change. The actions aim
to decarbonise the Group’s operations and value chain
across Scopes 1, 2 and 3. These actions include measures
focused on transitioning to fossil-free and renewable energy
sources, enhancing energy efficiency, reducing emissions
from transportation, and making shifts in fibre sourcing and
supply chain processes.
Actions for Lindex division:
•
Scope 1 & 2 – company operations:
•
Current actions:
Lindex division is sourcing
renewable energy with guarantees of origin for all
electricity across its stores, offices and warehouses.
Energy efficiency improvements have been made by
transitioning to LED lighting in most stores worldwide.
As a result, electricity consumption in own facilities
decreased in 2024 by 11% compared to 2023, and
17% compared to 2022.
•
Future plans:
Lindex division aims to transition 80%
of its heating to renewable sources and reduce overall
energy consumption by 10% across its operations
by 2030, with base year 2022. The goal of reducing
energy consumption of 10% was met 2024. Mapping
of actual heating in stores is underway to ensure
accurate climate impact assessments.
•
Scope 3 – transportation:
•
Current actions
: Lindex division has reduced
emissions from transportation by shifting from air to
sea shipments and adopting DHL Global Forwarding’s
GoGreen Plus biofuels for its sea shipments.
Emissions from truck shipments have been reduced
through the use of hydrotreated vegetable oil (HVO)
biofuel and electricity.
•
Future plans:
By 2030, Lindex division aims to cut air
shipments by 50% compared to the 2022 baseline. The
division also plans to relocate production to markets
closer to its sales regions, reducing the reliance on
air transport. The focus will shift to replacing road
transport fuels with renewable sources.
•
Scope 3 – fibres:
•
Current actions:
Lindex division has made progress
in shifting key fibres such as cotton and man-made
cellulosic fibres (MMCF) to more sustainable options,
including organic cotton and EcoVero viscose. In the
synthetic fibre category, efforts have been made to
transition from fossil -based raw materials to recycled
options.
•
Future plans:
The largest reduction potential lies
in increasing the use of recycled materials, with a
focus on pre-consumer recycled fibres for polyamide
and polyester. Lindex division has also committed to
scaling up post-consumer recycled fibres for cotton
and MMCF. In total the group is aiming for a 10%
reduction in material waste across the supply chain by
2030.
•
Scope 3 – suppliers:
•
Current actions:
Lindex division’s Tier 1 suppliers,
responsible for 80% of the division’s volumes,
have been engaged in energy efficiency projects
and have begun transitioning to renewable energy
sources. However, most emissions reductions need
to occur further down the supply chain in Tier 2 and
3, particularly in energy-intensive production and wet
processing.
•
Future plans:
By 2030, Lindex division plans to
reduce emissions from Tier 1 suppliers by securing
that 90% of electricity used and 30% of the fuels used
comes from renewable sources. In 2024, the total
share of renewable electricity used by Tier 1 suppliers
was 26%, however share of renewable fuels used was
insignificant. For Tier 2 and 3 suppliers, the division
aims to replace 50% of electricity with renewable
sources and reduce energy from fossil fuels by 30%.
Lindex division recognises the challenges posed by
limited direct relationships with Tier 2 and 3 suppliers
and is working on improving transparency and data
collection.
With the Group’s commitment to the Science Based Targets
initiative (SBTi), Lindex division is adding new categories
to its climate balance, including indirect purchases, capital
expenditures (CapEx), employee commuting, franchise
operations and cosmetics. These categories are new to
the division, and their emission reduction potential will be
explored further with roadmaps set to be developed and
updated by 2030.
Report of the Board of Directors
63
Expected outcomes of Lindex division’s actions:
•
Lindex division’s own operations by 2030.
•
transportation emissions by 2030.
•
emissions by 2030.
•
from electricity use and a 28% reduction from fuels
used for thermal energy by 2030.
Lindex division aims to achieve these goals by 2030 as part
of its broader Climate Action Plan.
Dependency on resources and collaboration:
•
renewable heating sources and working with landlords
to enable this transition.
•
business partners are key to understanding the
transition to renewable fuels and the associated costs.
•
is critical for scaling up recycled and regenerative raw
materials.
•
supporting its commercial goods suppliers in their
energy transition through knowledge sharing,
education and policy dialogues to increase access to
renewable energy.
During 2024, Lindex division allocated EUR 0.43 million
in capital expenditures (CapEx) to transitioning to LED
lighting in stores. See note 3.3 to the consolidated financial
statements and Capital expenditures (CapEx) paragraph/
chapter in the Disclosures pursuant to Article 8 of Taxonomy
Regulation. EUR 0.77 million in operational expenditures
(OpEx) were allocated to personnel costs for initiatives
focused on sustainable materials, transparency, the
development of circular business models, and enhancing
strategic sustainability efforts. See note 2.5 to the
consolidated financial statements 2024.
The Stockmann division’s operations meet the requirements
of legislation and the authorities, and the department store
division in Finland has been operating under the ISO 14001
certified environmental management system since 2003.
The division’s department stores in Estonia and Latvia have
also adopted the operating methods and guidelines of the
management system. The system with its goals has been
updated in March 2024. The scope of the listed key actions
are the division’s own operations. The actions are ongoing,
following the strategic period set for 2022–2025. The ISO
14001 management system’s actions are updated every
spring.
Stockmann division’s material impacts, risks and
opportunities are related to both energy consumption
within its own operations (Scope 1 and 2) and to its
value chain, including emissions (Scope 3) and potential
production and supply chain disruptions as well as growing
stakeholder concern if the division is not able to deliver its
climate targets. The current actions align with the division’s
strategic sustainability priorities for 2022–2025. In 2025,
the division will further align its actions with the Group’s
reduction targets and address the material impacts, risks
and opportunities accordingly.
Actions for Stockmann division
•
practices: develop and monitor procurement process
(short- and long-term target)
•
2
requirements: covering Scope 1, 2, 3 and the essential
categories, and to achieve more effective emission
reduction solutions
•
develop and monitor emissions accounting to improve
the efficiency of sustainable solutions.
•
and reduce the related emissions within the division’s
operations.
•
the electricity purchased.
Expected outcomes of Stockmann division’s actions
•
practices: sourcing responsible goods, minimising
the environmental impact across the value chain.
Long-term, this would result in reduced resource
consumption, lower carbon emissions and improved
commercial goods supplier sustainability performance.
•
2
(SBT): improving accuracy and comprehensiveness
in tracking CO
2
emission reduction targets in line with the Group’s SBT
target.
•
reducing the division’s carbon emissions from
electricity usage and advancing progress toward
renewable energy procurement. In 2024, the
Stockmann division was able to source a larger
share of its electricity from certified renewable energy
sources.
•
within the division.
For Stockmann division, the current actions are ongoing,
and do not include achieved and expected GHG emission
reductions. These will be later explored and aligned with the
Group’s reduction target, when the division drafts its climate
transition plan in 2025.
While some operational (OpEx) and capital expenditures
(CapEx) are associated with implementing the division’s
actions, there is currently limited insight into the exact costs
due to a lack of standardisation in the financial data.
Report of the Board of Directors
64
E1–4
Targets related to climate change mitigation and adaptation
Lindex Group has set climate -related targets in line with its policies on climate change mitigation and adaptation.
Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex Group | Environmental policy: The climate-related target is directly linked to Lindex Group’s environmental policy on climate change mitigation and adaptation. | By 2030, the Group will have reduced absolute CO 2 e market-based emissions by 42% across Scope 1, and 3 against baseline. | The target is science- based, aligned to limit global warming to 1.5°C and validated by the Science Based Targets initiative (SBTi) in 2024. | Target includes the entire value chain (upstream, own operations and downstream). Scope 3 includes all categories except category 9 and 11. | 2022 | 12,429 tonne CO 2 eq for Scope 1 and 2 and 195,414 tonne CO 2 eq for Scope 3 | 13,753 tonne CO 2 eq for Scope 1 and (11% increase) and 158,573 tonne CO 2 eq for Scope 3 (19% decrease) | Internal stakeholders from both divisions participated in the working group, while external stakeholders, including consultants, were involved in setting the target. Science Based Targets approved the target during 2024. Currently, the accurately reflects the scope activities and external influences; while it may be adjusted if calculation methodologies change, is not revised based on the or external factors. |
Lindex Group | Environmental policy: The climate-related target is directly linked to Lindex Group’s environmental policy on climate change mitigation and adaptation. | By 2030 we have reduced landrelated FLAG (Forest, Land and Agriculture) emissions by 30.3%. | The target is the science-based, aligned to limit global warming to 1.5°C and validated by the Science Based Targets initiative (SBTi) in 2024. | Target upstream emissions in supply chain Tier 4. | 2022 | 45,803 tonne CO 2 e | 41,010 ton CO 2 e, (10% decrease) | Internal stakeholders from both divisions participated in the working group for setting the target, external stakeholders, including consultants, were involved in setting the target. Science Based Targets Initiative validated and approved target during 2024. This target is absolute and includes practices that preserve biodiversity, minimise land degradation and promote regenerative practices. |
Report of the Board of Directors
65
E1–5
Fuel consumption | 2024 |
Coal and coal | 0 |
Crude oil and | 18.11 |
Natural gas (MWh) | 1,933.52 |
Other fossil sources | 0 |
Purchased or acquired electricity, steam and cooling from fossil sources (MWh) | 43,984.26 |
Total fossil | 45,935.89 |
Share of fossil | 47.5% |
Total nuclear sources consumption (MWh) | 2 438.96 |
Share of nuclear | 2.5% |
Renewable sources, including (MWh) | 0 |
Renewable purchased or acquired electricity, heat, | 48,427.87 |
Self-generated non-fuel renewable (MWh) | 0 |
Total renewable (MWh) | 48,427.87 |
Share of renewable | 50.0% |
2024 | |
Total energy | 96,802.72 |
Total energy activities in high climate impact per net revenue (MWh/EUR) | 0.000103 |
Net revenue from activities climate impact sectors used calculate energy intensity rate (MEUR) | 940.1 |
Total net revenue (MEUR) | 940.1 |
Energy consumption and mix
Energy consumption data is derived from a mix of primary
data and estimates, covering both consumption and
sources. To ensure a conservative approach, fossil sources
are assumed when the source is not clearly defined. Most of
the Group’s energy consumption is purchased. Guarantees
of origin of renewable sources cover all of Lindex division’s
and part of Stockmann division’s electricity consumption.
Lindex Group operates in a high climate impact sectors
as both divisions’ main business operations are within
section G, Wholesale and Retail Trade, of the statistical
classification of economic activities in the European
Community, abbreviated as NACE. Stockmann division also
subleases its premises to tenants and receives sublease
and concession revenues which corresponds to section
L, Real estate activities. Since both sectors fall under the
definition of high impact climate sector, total net revenue
and revenue from activities in high climate impact sector
coincide. See Notes 2.2.1.1 and 2.2.1.2 in the Lindex
Group’s consolidated financial statements 2024.
Report of the Board of Directors
66
E1–6
Gross Scopes 1,2,3 and Total Greenhouse Gas emissions
Retrospective | Target | |||||
Base year (2022) | 2023 | 2024 | Change (2023–2024) % | 2030 | Annual % target/ base year | |
SCOPE 1 GHG | ||||||
Gross Scope 2 eq) | 223 | 573 | 533 | -7% | 129 | 5.25% |
% of Scope 1 GHG emissions trading schemes | 0% | 0% | 0% | - | - | - |
SCOPE 2 GHG | ||||||
Location-based 2 eq) | 10,234 | 15,124 | 9,080 | -40% | - | - |
Market-based (tCO 2 eq) | 12,206 | 20,648 | 13,220 | -36% | 7,079 | 5.25% |
SCOPE 3 GHG | ||||||
Total gross 2 eq) | 300,593 | 253,897 | 258,080 | 2% | 145,265* | 4.97% |
1 Purchased goods | 219,132 | 171,082 | 179,221 | 5% | - | - |
2 Capital goods | 7,179 | 10,811 | 6,682 | -38% | - | - |
3 Fuel and energy-related activities (not included in Scope 1 or 2) | 5,594 | 1,342 | 2,473 | 84% | - | - |
4 Upstream transportation | 4,175 | 3,383 | 2,987 | -12% | - | - |
5 Waste generated | 177 | 468 | 153 | -67% | - | - |
6 Business travel | 661 | 845 | 852 | 1% | - | - |
7 Employee commuting | 3,752 | 3,713 | 3,558 | -4% | - | - |
9 Downstream | 33,652 | 32,659 | 33,513 | 3% | - | - |
11 Use of | 24,438 | 27,446 | 26,436 | -4% | - | - |
12 End-of-life | 128 | 284 | 265 | -7% | - | - |
14 Franchises | 1,705 | 1,864 | 1,940 | 4% | - | - |
TOTAL GHG | ||||||
Total GHG 2 eq) | 311,050 | 269,594 | 267,693 | -1% | ||
Total GHG 2 eq) | 313,022 | 275,118 | 271,833 | -1% | 152,473* | 4.99% |
*Only outbound logistics and storage not owned or paid by Lindex Group are included from 3.9, and only energy used in the life cycle of household appliances are included from 3.11.
Report of the Board of Directors
67
GHG intensity based | 2023 | 2024 | Change (2023–2024) % |
Total GHG net revenue (tCO 2 eq/Monetary unit) | 0,000283 | 0,000285 | 1% |
Total GHG net revenue (tCO 2 eq/Monetary unit) | 0,000289 | 0,000289 | 0% |
Net revenue used to calculate GHG (MEUR) | 951.7 | 940.1 |
See notes 2.2.1.1 and 2.2.1.2 in the Lindex Group’s consolidated financial statements 2024 of the net revenue amounts.
Biogenic CO 2 | 2024 |
Scope 1 (direct | - |
Scope 2 (indirect emissions, market-based) | 27 |
Scope 3 (indirect | 11 883 |
Total | 11 910 |
Methodology for GHG emission calculations
Emission factors used are sourced from the sustainability
reporting software Position Green (https://www.
positiongreen.com/) or provided by experienced third-
party sustainability consultants. 2022 and 2023 years’
results have been updated based on new emission factors
available.
Scope 2
Actual electricity consumption data has been collected for
premises where available. For locations without real data,
consumption has been estimated based on the average
from available data, using the residual mix as the source. In
the Lindex division, guarantees of origin are purchased to
cover all electricity consumption across all facilities. In the
Stockmann division, guarantees of origin were purchased
and certificates from suppliers are obtained for renewable
energy for some of the facilities in Finland.
For Lindex division, heating is estimated based on square
meters. District heating is assumed as the primary source
in the Nordics, while an average energy mix is assumed
for all other countries. A small portion of the premises do
not use heating. The Stockmann division collects actual
heating consumption data for some of its facilities and
estimates the rest. For most properties, purchased energy
consumption was estimated based on square meters to
obtain Stockmann’s share of the total property energy
consumption.
For Stockmann division, primary data for cooling is collected.
Biogenic emissions from transports in scope 3, category 4
Upstream transportation and distribution
were unavailable
as the logistics partners provided calculated emissions.
Additionally, biogenic emission information for some
electricity and heating (Scope 2) and for Lindex division’s
own operated cars (Scope 1).
Scope 1
Own heat production is based on real data on gas and light
fuel oil consumption. Both emission factors used comes
from “Överenskommelse i värmemarknadskommitén
2021”, published by Energiföretagen. Emissions from
company cars are also based on actual fuel consumption
data, and emission factors used are from Department for
Environment, Food and Rural Affairs (DEFRA). Refrigerant
leakage is partially based on real data, while for premises
without the ability to report refrigerant leakages, estimates
are based on square meters. Intergovernmental Panel on
Climate Change (IPCC) is the source of emission factors on
refrigerant leakages.
Where real data is not available, it is estimated based on
square meters. For Lindex division, cooling is estimated to be
powered by electrical energy and is therefore considered in
the electricity consumption in Scope 2.
Of the 94,907 MWh energy consumed by the Group, 50%
comes from guarantees of origin or certificates of renewable
energy of which everything is unbundled.
The emission factors used have been sourced from
Vattenfall, Swedenergy and Association of Issuing Bodies
(AIB). Residual mix electricity factors have been used for
district heating.
Report of the Board of Directors
68
Scope 3
Cat. 1 Purchased goods and services:
Non-production
related procurement (OpEx) was calculated based on cost-
based financial data. Emission factors are derived from
Exiobase 3.8.2, provided by the European Environment
Agency.
In the Lindex division, emissions from production of
commercial goods were calculated using fabric weight and
composition, along with primary supplier data on energy
and water consumption, from the vast majority of production
suppliers. Data on packaging materials was collected
through the ERP.
The Stockmann division used the number of units
purchased by product type, with estimated weight and
material composition. Packaging materials were calculated
with a combination of invoice data and estimation.
Purchases between Lindex and Stockmann divisions were
excluded to avoid double counting. A number of sources of
emission factors has been used to calculate the emissions
from commercial goods; Food and Agriculture Organization
Statistics (FAOSTAT), DEFRA, Moberg et al and SBTI
FLAG Tool.
Cat. 2 Capital goods:
Emissions from CapEx were
calculated using financial cost-based data. Emission factors
are derived from Exiobase 3.8.2, provided by the European
Environment Agency.
Cat. 3 Fuel and energy related activities:
Emission
figures were calculated based on Scope 1 and Scope 2 data
and emission factor sources.
Cat. 4 Upstream transportation and distribution:
Transportation emissions data was received directly from
logistics partners in tCO
2
e. For partners where only partial
year data was available, figures were recalculated to
represent a full year.
Cat. 5 Waste:
Primary data was used where available.
Missing waste amounts were estimated using square
meters or the number of employees, combined with
estimations based on actual data or purchased volumes.
The level of recycling was, in some cases, estimated based
on the available recycling options in stores. The emission
factors used are sourced from DEFRA and Moberg et al.
Cat. 6: Business travel:
Emissions were calculated using
data collected from travel agencies, other passenger
transport companies, and kilometer allowances. Hotel stays
were measured in nights. Some emissions were calculated
using spend based data. DEFRA and Network for Transport
Measures (NMT) are the sources of emission factors used.
Cat. 7 Employee commuting:
Employee commuting
emissions were calculated based on the number of
employees, HR assessments, and assumptions about
employees’ modes of transport and average commuting
distance in each country. Part of the Lindex division’s
figures is based on insights from a survey sent out to all
employees. The emission factors used are sourced from
NMT.
Cat. 9 Downstream transportation and distribution:
This
category includes customer transportation to stores and
outbound warehousing not paid for by the company. It was
assumed that customers visiting stores outside city centers
needed to travel to the stores. The number of customers
was estimated based on visitor counts or, where visitor data
was unavailable, the number of receipts from these stores.
Customer travel distances and modes of transportation
were partly estimated using national statistics, specifically
the Finnish National Travel Survey published in 2024.
Emissions connected to outbound warehousing were
estimated based on third-part sales quantity, recalculated to
cubic meters. The emission factors used are sourced from
NMT.
Cat. 11 Use of sold products:
Emissions from the use
of sold products were estimated based on the number of
appliances and textile pieces sold, and their estimated
weight. Energy consumption for appliances and for washing
and drying textiles was also estimated. Purchases between
Lindex and Stockmann divisions were excluded to avoid
double counting. Emission factors used to calculate
emissions were sourced from AIB.
Cat. 12 End-of-life treatment of sold products:
Emission
calculations were based on the number of sold products,
recalculated to estimated weight, and packaging materials.
Emission factors were sourced from DEFRA. Purchases
between Lindex and Stockmann divisions were excluded to
avoid double counting.
Cat. 14 Franchise:
Only Lindex division has franchises.
Emissions were calculated based on collected data from
franchisees’ Scope 1 and Scope 2 emissions, and the
emission factors used are derived from International
Energy Agency (IEA) and AIB. When data was unavailable,
estimates were based figures from the previous year or this
year’s purchased goods data.
Report of the Board of Directors
69
E1–7
GHG removals and GHG mitigation projects
financed through carbon credits
The Group does not report its GHG removals and mitigation
projects financed through carbon credits, as no such
projects are currently in place. While the Group does
not currently engage in these initiatives, the potential for
incorporating them into the Group’s sustainability efforts will
be evaluated in the future.
E1–8
Internal carbon pricing
Currently, the Group does not apply internal carbon pricing
schemes.
Report of the Board of Directors
70
E2
Pollution
E2–1
Policies related to pollution
Lindex Group has implemented an Environmental Policy
that addresses the management of material impacts,
associated with pollution. The details of this policy are
further explained in chapter
E1 Climate Change
. This
chapter specifically focuses on the policy content related to
pollution.
The pollution content of the Environmental Policy
focuses on pollution of water and soil arising from textile
manufacturing processes and agricultural practices. The
general objectives of the policy are to reduce pollution,
eliminate hazardous substances, ensure supply chain
transparency, and prevent the release of microplastics.
The policy addresses the prevention, control and
mitigation of pollution by focusing on the elimination of
toxic substances throughout the value chain, sourcing
raw materials from certified sustainably managed
sources, and requiring effective waste and wastewater
management practices from all supply chain actors.
Within Lindex Group’s own brands, compliance with a
Restricted Substances List (RSL) for finished products
and a Manufacturing Restricted Substances List (MRSL)
during production ensures that hazardous chemicals
are minimised or eliminated, thereby protecting water
and soil. The restricted chemicals included in the lists
are harmful to the environment, allergenic, endocrine
disruptors or pose a significant health risks to workers and
consumers. Specifically, substances that meet the criteria
for classification as carcinogenic, mutagenic or toxic to
reproduction (CMRs), persistent, bio accumulative and toxic
or very persistent and very bio accumulative (PBTs/vPvBs),
and chemicals that pose an equivalent level of concern
like endocrine disruptors (EDs) and sensitisers according
to REACH Annex XIII, are banned for use. Through written
agreements with suppliers and regular testing of materials
and products, the policy ensures that hazardous substances
are avoided.
The policy also includes efforts to address microplastic
pollution, prioritising the reduction of fibre fragmentation
and collaborating with industry partners on innovative
solutions. The policy includes measures to secure access
to safe water and sanitation in connected communities,
with special attention to vulnerable groups. By reducing
pollution throughout the value chain, particularly in textile
manufacturing and agricultural practices, the policy aims to
protect the health and environment of local communities.
The Environmental Policy does not currently address the
prevention of incidents and emergency situations related
directly to pollution. However, the Group has an emergency
response strategy in place, where in case of an accident,
the strategy provides measures to limit impacts on people
and the environment, such as collaboration with third
parties on remediation efforts and prioritising sustainable
water and pollution management practices. Support for
communities, particularly vulnerable groups, is a key
element of the emergency response strategy. In addition,
the Group has a process in place that includes systematic
impact assessments and supplier engagement to identify
and address potential risks, as well as regular reviews of
the Environmental Policy.
E2–2
Actions and resources related to pollution
Lindex Group has taken actions to manage pollution,
focusing on chemical pollution throughout its value chain.
Actions for Lindex division
•
suppliers
•
assessments
•
requirements into suppliers’ environmental
management systems
•
providing training, workshops, and seminars on best
practices for chemical and wastewater management
•
management and phases out non-compliant suppliers,
guided by the Supplier Code of Conduct, sustainability
commitments and supplier environmental scorecard
•
and NGOs to advance sustainable chemical practices
in addressing microplastics. As a committed member
of the Microfibre Consortium, it actively engages
in fibre fragmentation testing. These initiatives are
designed to mitigate the environmental impact of fibre
fragmentation, with the ultimate goal of achieving zero
impact from these pollutants.
Report of the Board of Directors
71
Expected outcomes of Lindex division’s actions
•
•
throughout the supply chain
•
The actions are ongoing and accountability is enforced
by requiring commercial goods suppliers to adhere to the
Manufacturing Restricted Substances List (MRSL) and
maintain the Chemical Inventory List (CIL) to identify and
substitute non-compliant substances. If suppliers fail to
meet these requirements or if excessive levels of restricted
substances are found, they must take immediate corrective
actions, such as adjusting chemical inputs or modifying
processes to achieve compliance. Additionally, enhanced
transparency and accountability are further ensured through
regular reporting, audits, on-site inspections, finished
product testing, and feedback mechanisms. The use of
a digital chemical management tool has been expanded,
allowing more factories to upload their chemical inventories.
By engaging in research and development, Lindex division
aims to advance innovative solutions for reducing fibre
fragmentation.
The scope of these actions spans the entire value chain,
including Tier 1 suppliers (direct), Tier 2 (sub-suppliers),
and Tier 4 (raw material sources). The actions apply in
all markets where the division operates, covering key
markets such as Bangladesh, China, India, Pakistan, and
Turkey. The focus extends to sourcing certified sustainable
materials, such as those under the Organic Content
Standard (OCS), Global Organic Textile Standard (GOTS),
and Global Recycled Standard (GRS), while encouraging
next-generation practices like regenerative agriculture.
Suppliers are the primary affected stakeholders, with
internal stakeholders, customers, regulatory bodies, and
NGOs also playing roles in ensuring compliance and
reducing environmental impact.
Continuous training and assessments will take place
annually, with fibre fragmentation testing goals set for 2024.
Concrete pollution-related goals for 2026–2030 will be
established during 2025.
For Stockmann division, commercial goods supplier
contracts incorporate sustainability-related requirements,
such as compliance with EU and Finnish chemical
regulations. However, since pollution is a new sustainability
focus area for the division, other aspects of pollution have
not yet included in the agreements. Concrete actions to
address pollution will be defined at a later stage, along
with specific timeframes for implementation. Additionally,
a significant portion of the division’s own brand products
are sourced through Lindex division’s suppliers, ensuring
adherence to many of the same production standards.
The implementation of Lindex Group’s action plans does not
require significant operational or capital expenditures (OpEx
or CapEx).
Report of the Board of Directors
72
E2–3
Targets related to pollution
The Lindex Group has set general targets related to pollution of water and soil, but specific, measurable, and time-bound targets have not yet been established.
Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex division | Environmental policy: The target is directly linked to the policy objective to actively towards better land use management by using materials from certified sustainably managed sources with a approach to chemical use and pollution prevention. | By 2025, all commercial goods suppliers to eliminate the use of hazardous chemicals contributing to water and soil pollution by 2025, achieving a score of four in the Environmental Assessment tool. Looking towards 2030, division’s long-term goal is for suppliers to establish industry leadership in management, setting an with innovative textile industry, such as natural dyes and eco-friendly | The current targets related to chemical management Lindex division and fully aligned with EU regulations, including REACH/ ECHA (Registration, Evaluation, Authorisation, and Restriction Chemicals/European Agency) standards as well as the Group’s environmental policy. The targets are based on conclusive scientific evidence since REACH/ ECHA, AFIRM (Apparel and Footwear International RSL Management), ZDHC (Zero Discharge of Hazardous Chemicals), and ASTM (American Society for Testing and Materials) are scientifically proven data. | Target includes upstream supply chain Tier 1-2. | 2019 | 2019, the focus was to map chemicals First measured value was 79% in | 79% | The short term goal means that Lindex division’s suppliers have implemented a strong environmental management system, including chemical management, with at least 80% of their chemicals compliant with Lindex division’s MRSL (Manufacturing Restricted substances list), with a detailed, to reach 100% compliance. The assessment scale is from one to five, with a score of one indicating significant shortcomings in chemical a score of five indicating industry leadership in chemical management, with innovative practices that extend beyond the factory. score of four indicates that suppliers have a robust chemical management system in place to systematically evaluate hazards and risks before purchasing. The target is relative. The key stakeholders were engaged the targets; as the division consulted textile experts, NGOs, other fashion brands, and several of the leading suppliers, such as MAS Group. |
Lindex division | Environmental policy: The target is directly linked to the policy objective to actively towards better land use management by using materials from certified sustainably managed sources with a approach to chemical use and pollution prevention. | By 2026, 100% of Lindex’s materials are recycled sustainably sourced (through recognized certification schemes). | Target includes upstream supply chain Tier 4. | 2018 | 0% | 88% | The key stakeholders were engaged the targets; as the division consulted textile experts, NGOs and Textile target is relative. |
Report of the Board of Directors
73
To
track the effectiveness of its pollution-related policies,
the Group regularly evaluates commercial goods suppliers
through audits, such as Environmental Impact Assessments,
scoring them on sustainability and business performance.
The tool evaluates suppliers on a scale from one to five,
with one being the lowest and five being the highest score.
The Group conducts audits and environmental assessments
to ensure compliance with its environmental and chemical
requirements. A digital chemical management tool supports
continuous monitoring and reporting, allowing Lindex
division to track suppliers’ progress. Additionally, regular
product testing ensures compliance with pollution control
standards and helps reduce environmental risks.
For Stockmann division, the goal is to gain a broader
understanding of the impacts related to pollution and set
targets based on the findings. When targets are further
defined for both divisions, the relevant stakeholders will be
considered and engaged in the process.
E2–4
Metrics related to pollution
Lindex Group’s significant environmental impacts from
pollution primarily originate from its value chain rather
than its own operations. As a result, the Group does not
disclose the pollutants that it emits directly through its own
operations or the microplastics it generates or uses.
E3
Water
E3–1
Policies related to water
Lindex Group’s Environmental Policy addresses the
material impacts, risks and opportunities related to
water, such as reducing water consumption and pollution
throughout the Group’s value chain. The policy also
addresses promoting and adopting recycled, regenerative,
and organic practices to minimise water consumption in
collaboration with partners, as well as ensuring sustainable
water management practices and safe and affordable
water sanitation in the value chain. Further details of the
Environmental Policy are outlined in chapter
E1 Climate
Change
.
The policy’s primary objective is to ensure that Lindex
Group’s own operations, value chain and other partners
adhere to its environmental standards, including water
resource management. The policy specifically addresses
the risks related to water pollution, including the release
of hazardous chemicals and waste, and sets forth actions
for reducing the company’s impact on both water bodies
and surrounding ecosystems. The policy also addresses
fibre fragmentation, which is a key concern regarding the
pollution of water bodies, by setting goals to minimise
microplastic pollution and collaborating with industry
partners to develop innovative solutions.
The policy acknowledges the importance of reducing water
consumption in areas of high water-stress and applies to
operations located in water-scarce areas. It also extends to
business partners and suppliers, who are required to follow
the same principles. The policy directly impacts various
stakeholders, including local communities near production
sites, who may benefit from improved water management
practices, as well as employees and suppliers who are
responsible for implementing these initiatives.
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74
E3–2
Actions and resources related to water
Lindex Group has implemented actions to manage water
consumption and pollution, during the reporting year,
especially, in areas at high water risk. These high-risk areas
include Bangladesh, India, Pakistan and Vietnam.
Actions for Lindex division
•
suppliers improving water use, re-use, and efficiency
and audits of suppliers, setting criteria for water and
wastewater management, and providing training on
best practices
•
workshops, and incentives to reduce water use,
improve wastewater treatment, and adopt sustainable
practices
•
programme in Bangladesh to promote cleaner
production, and scaled water- and chemical-efficient
manufacturing processes with global suppliers.
Expected outcomes of Lindex division’s actions
•
water sources in key production regions.
The scope of the actions covers upstream suppliers, with
a focus on those in areas of high water-stress. To address
impacts, suppliers have reduced harmful chemicals
and improved water efficiency, ensuring compliance
with local discharge regulations. Regular wastewater
testing, alongside ongoing training in advanced chemical
technologies, supports continuous improvement.
Lindex division has implemented continuous monitoring,
transparent reporting and feedback mechanisms to
ensure progress. Over the next few years, the division will
support pilot projects, phase out non-compliant suppliers,
and expand its efforts to protect water resources while
advancing sustainability goals across its supply chain.
Actions for Stockmann division
Stockmann division has recently assessed its impacts, risks
and opportunities related to water. Its efforts are currently
focused on water consumption at department stores,
restaurants, kitchens and sanitary facilities. Stockmann
division has implemented measures to minimise water
consumption by instructing personnel and tenants on
efficient water use, preventing and repairing even minor
leaks, and procuring more efficient water fixtures to replace
older ones. However, these actions are primarily focused
on the division’s own operations. Given that the most
significant impacts, risks and opportunities are within the
value chain – particularly in water consumption during raw
material and product production – the division has not yet
adopted specific action plans for these areas but plans to do
so in the coming years.
The implementation of the planned actions for both divisions
does not require significant operational (OpEx) or capital
expenditures (CapEx).
E3–3
Targets related to water
Lindex Group has set measurable, time-bound targets
related to water management, with a particular focus on
areas at water risk.
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Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target base- line year | Target baseline value | Results 2024 | Additional information |
Lindex division | Environmental policy: The target is directly linked to the policy objective to reduce water usage across the value chain, with a particularly focus on water-intensive materials and production processes. | By 2025, 80% of commercial goods suppliers are expected to achieve optimal water efficiency, which includes reducing water intake, and recycling water within processes, and treating wastewater to meet environmental standards before discharge. | Key EU directives considered include Directive 2018/851/EU (amending the Waste Framework Directive), Regulation 2019/1021/ EU (POP Regulation), Directive 2008/98/EC (Waste Framework Directive), Directive 2010/75/EU (Industrial Emissions Directive - IED) and Directive 2000/60/EC (Water Framework Directive). Additionally, international standards such as ZDHC (Zero Discharge Chemicals), HiGG FEM (Facility Environmental Module) and BSR (Business for Social Responsibility) Wastewater Discharge Standards were also incorporated into the development of the tool. conclusive scientific evidence. | Target includes upstream supplychain Tier 1 vertical suppliers | 2019 | 2019, the focus was to map current situation First measured value was 79% in 2022 | 79% | This short-term relative goal has a direct and immediate impact on the water use of factories. Lindex division tracks the effectiveness of these actions its Environmental Assessment tool, which evaluates suppliers on a scale of one to five, with one being the lowest and five being highest score. A score of five means suppliers have action plans for 100% water efficiency and show significant progress, three reflects compliance with national water regulations and some progress on water efficiency, and scores one and two highlight major water management issues. Lindex division aims to phase out those scoring below three. Progress is measured both quantitatively, water use and increased recycling, and qualitatively, party wastewater testing. The target has not been validated by an external party and the targets are voluntary. with stakeholders, including NGOs in production countries, to and address specific water risks. Through these partnerships, work to understand the challenges and set targeted goals based the identified risks. |
Lindex division | Environmental policy: The target is directly linked to the policy objective to reduce water usage across the value chain, with a particularly focus on water-intensive materials and production processes. | By 2030, 80% of commercial goods suppliers should have comprehensive water stewardship principles in place. This long-term goal includes ecosystem restoration and improved basin-level water management, benefiting both suppliers and local communities. | Key EU directives considered include Directive 2018/851/EU (amending the Waste Framework Directive), Regulation 2019/1021/ EU (POP Regulation), Directive 2008/98/EC (Waste Framework Directive), Directive 2010/75/EU (Industrial Emissions Directive - IED) and Directive 2000/60/EC (Water Framework Directive). Additionally, international standards such as ZDHC (Zero Discharge Chemicals), HiGG FEM (Facility Environmental Module) and BSR (Business for Social Responsibility) Wastewater Discharge Standards were also incorporated into the development of the tool. conclusive scientific evidence. | Target includes upstream supplychain Tier 1 Vertical suppliers | 2019 | 2019, the focus was to map current situation First measured value was 79% in 2022 | 79% | Suppliers achieving in reducing water use EU regulations and international standards as well as the Group’s Environmental Policy. This long-term goal aims for a more widespread impact on water quality and availability at regional and global levels. Lindex division tracks the effectiveness of these actions its Environmental Assessment tool, which evaluates suppliers on a scale of one to five, with one being the lowest and five being highest score. A score of five means suppliers have action plans for 100% water efficiency and show significant progress, three reflects compliance with national water regulations and some progress on water efficiency, and scores one and two highlight major water management issues. Progress is measured both quantitatively, water use and increased recycling, and qualitatively, party wastewater testing. The target has not been validated by an external party and the targets are voluntary. with stakeholders, including NGOs in production countries, to and address specific water risks. Through these partnerships, work to understand the challenges and set targeted goals based the identified risks. |
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At present, Stockmann division monitors the water
consumption of its department stores; however, targets
related to material impacts, risks and opportunities or
processes to measure the effectiveness of policies and
actions have not yet been established.
E3–4
Metrics and water consumption
Lindex Group’s significant environmental impacts on water
primarily originate from its value chain rather than its
own operations. As a result, the Group does not disclose
information on its water consumption performance in its own
operations.
E4
Biodiversity
and ecosystems
E4–1
Transition plan and consideration of biodiversity
and ecosystems in strategy and business model
Lindex Group does not currently have a transition plan
specifically for biodiversity and ecosystems. However, the
Group intends to develop and adopt such a plan in 2026,
integrating biodiversity considerations more closely into its
strategy and business model.
E4–2
Policies related to biodiversity and ecosystems
The Group’s Environmental Policy addresses the material
impacts and risks related to biodiversity and ecosystems
and commits to preventing and reducing the impact of the
Group’s value chain on biodiversity and natural ecosystems.
The Group’s policy addresses factors contributing to
biodiversity loss, such as climate change, land-use change,
invasive alien species and pollution. Further details on the
Environmental Policy are outlined in chapter
E1 Climate
change
.
To align with the global goals and targets for land and
biodiversity, the Group’s first focus is to reduce dependency
on natural resources and land areas needed to produce
the Group’s products. In its own brand products, this is
achieved through increased use of recycled materials
as well as through the Group’s circular approach to
decouple growth from resource use. The Group commits
to zero deforestation and other transformation of natural
ecosystems and will increase the traceability of materials.
The Group’s focus is to improve ecosystem integrity through
better land-use management by using raw materials from
sustainably managed sources that minimise impact and
respect human rights.
Biodiversity is intricately linked to other environmental
impacts such as water, pollution and climate. To further
limit biodiversity loss, it is imperative to address all of
these areas. These are described in
E1 Climate Change,
E2 Pollution,
and
E3 Water
. The policy does not address
social consequences of biodiversity and ecosystems-related
impacts. However, the Group recognises the impact on the
communities in which it operates and the policy commits to
positively contributing to the communities along the value
chain and upholding their human rights.
E4–3
Actions and resources related to biodiversity
and ecosystems
Lindex division has currently implemented actions to
address its significant impacts, risks and opportunities
related to biodiversity and ecosystems. In its double
materiality assessment, Stockmann division identified
significant impacts, risks and opportunities within the
division’s value chain, specifically biodiversity loss,
deforestation from raw material production and GHG
emissions. Additionally, Stockmann division is currently
introducing products to the market that involve raw
materials subject to the EU Regulation on deforestation-
free products (EUDR). In order to align with the EUDR,
Stockmann division has assessed its readiness to meet the
forthcoming regulatory requirements. Over the following
years, Stockmann division will establish actions and set
targets to address key biodiversity issues.
Report of the Board of Directors
77
Actions for Lindex division
•
land use: Lindex division is reducing its environmental
impact by optimising product volumes, transitioning
to circular business models and increasing the use of
recycled fibres. This aligns with the SBTN framework
for minimising reliance on land and natural resources.
For more details, see the comprehensive strategy in
section
E5 Resource use and circular economy
.
•
land use management: Lindex division is to source
all materials from renewable or recycled sources
by 2026, guided by standards such as those of the
Textile Exchange that ensure responsible practices.
Additionally, Lindex is enhancing traceability by
forming direct partnerships with cotton farmers and
recycled fibre producers, ensuring accountability from
fibre production to finished garments.
•
Lindex division has begun sourcing cotton from farms
practising regenerative agriculture to enhance soil
health, capture carbon and promote biodiversity. The
division aims to source only regenerative and recycled
cotton by 2030, ensuring that cotton production
contributes positively to ecosystems and local
communities.
•
is reducing water use and maintaining water quality
throughout its operations and supply chain. Details on
these initiatives are outlined in sections
E2 Pollution
and
E3 Water
.
Expected outcomes of Lindex division’s actions:
•
use
•
•
farming practices
Through a strong presence in production countries, Lindex
division collaborates directly with local suppliers on water
management practices and partners with farm groups.
Additional feedback is gathered through its partnership with
Textile Exchange. This local engagement allows Lindex
division to integrate regional insights and nature -based
solutions in its biodiversity initiatives, ensuring that practices
are responsive to the specific needs of each area. This
engagement will be further strengthened going forward.
Lindex division does not currently use biodiversity offsets in
its action plans, as it focuses on direct impact reduction and
sustainable practices.
Each action plan is aligned with specific targets and
timelines, such as achieving 15% recycled fibre content
in 70% of all products by 2026, ensuring circular business
models make up 5% of revenue by 2030, and transitioning
to regenerative and recycled cotton by the same year.
The current action plans are expected to be implemented
without significant operational (OpEx) or capital
expenditures (CapEx).
E4–4
Targets related to biodiversity and ecosystems
Currently, Lindex division has set measurable, outcome-
oriented and time-bound targets related to biodiversity
and ecosystems. Stockmann division’s current target is to
comply with the EU Deforestation Regulation (EUDR). More
specific targets addressing the material impacts, risks and
opportunities will be established over the coming years.
Report of the Board of Directors
78
Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the objective | Target | Frameworks or conclusive evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex Group | Environmental policy: The target is directly linked to the policy objective to commit to zero deforestation or other transformation of natural ecosystems and secure traceability of all materials. | By 2030 we have reduced landrelated FLAG (Forest, Land and Agriculture) emissions by 30.3%. This target includes practices that preserve biodiversity, minimise land degradation and promote regenerative practices. | The target aligns with frameworks such as the Kunningham Montreal framework (GBF) and for Nature (SBTN). Target relates to the following SBTN targets: • • • | Target includes upstream emissions in supply chain Tier 4 | 2022 | 45.803 tonne CO 2 e | 41,010 ton CO 2 e, 10% decrease since 2022 | The WWF biodiversity risk filter was used to identify high-impact areas, focusing on cotton and MMCF production as well as water quality. No ecological thresholds offsets were used in setting this absolute targets. Feedback on target setting and possible gaps were provided by WWF in Acadamy's course “Kickstarting Biodiversity Program”. |
Lindex division | Environmental policy: The target is directly linked to the policy objective to commit to zero deforestation or other transformation of natural ecosystems and secure traceability of all materials. | By 2026, 100% of all cotton will through recognized certification schemes. | The target aligns with frameworks such as the Kunningham Montreal framework (GBF) and for Nature (SBTN). Target relates to the following SBTN targets: • • • | Target includes upstream supplychain Tier 4 | 2023 | 87% | 93% | The WWF biodiversity risk filter was used to identify high-impact areas, focusing on cotton and MMCF production as well as water quality. No ecological thresholds offsets were used in setting this relative targets. Feedback on target setting and possible gaps were provided by WWF in Acadamy's course “Kickstarting Biodiversity Program”. |
Lindex division | Environmental policy: The target is directly linked to the policy objective to commit to zero deforestation or other transformation of natural ecosystems and secure traceability of all materials. | By 2026, 100% of all Manmade cellulosic fibers will through recognized certification schemes. | The target aligns with frameworks such as the Kunningham Montreal framework (GBF) and for Nature (SBTN). Target relates to the following SBTN targets: • • • | Target includes upstream supplychain Tier 4 | 2023 | 97% | 99% | The WWF biodiversity risk filter was used to identify high-impact areas, focusing on cotton and MMCF production as well as water quality. No ecological thresholds offsets were used in setting this target. Target is relative. Feedback on target setting and possible gaps were provided by WWF in Acadamy's course “Kickstarting Biodiversity Program”. |
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Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the objective | Target | Frameworks or conclusive evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex division | Environmental policy: The target is directly linked to the policy objective to reduce dependency on natural resources and land area needed to produce our items. | By 2026, 70% of all products include a minimum of 15% recycled content | The target aligns with frameworks such as the Kunningham Montreal framework (GBF) and for Nature (SBTN). Target relates to the following SBTN targets: • • • | Target includes upstream supplychain Tier 4 | 2021 | 16% | 58% | The WWF biodiversity risk filter was used to identify high-impact areas, focusing on cotton and MMCF production as well as water quality. No ecological thresholds offsets were used in setting this target. Target is relative. Feedback on target setting and possible gaps were provided by WWF in Acadamy's course “Kickstarting Biodiversity Program”. |
Lindex division | Environmental policy: The target is directly linked to the policy objctive to improve ecosystem integrity through better land management by using raw materials from sustainably managed sources that minimize impact and respect human rights. | By 2026, 100% of Lindex’s materials are recycled and/or sustainably sourced (through recognized certification schemes) | The target aligns with frameworks such as the Kunningham Montreal framework (GBF) and for Nature (SBTN). Target relates to the following SBTN targets: • • • | Target includes upstream supplychain Tier 4 | 2018 | 0% | 88% | The WWF biodiversity risk filter was used to identify high-impact areas, focusing on cotton and MMCF production as well as water quality. No ecological thresholds offsets were used in setting this targets. Target is relative. Feedback on target setting and possible gaps were provided by WWF in Acadamy's course “Kickstarting Biodiversity Program”. |
Lindex division | Sustainability policy: The target is directly linked to the policy objectives to secure constant improvement and best practice, and actively engage in landscape improvements and next generation practices such as regenerative agriculture. | By 2030, 100% of Lindex virgin cotton will come with whom we are collaborating directly in order to secure the transition to organic and regenerative agriculture | The target aligns with frameworks such as the Kunningham Montreal framework (GBF) and for Nature (SBTN). Target relates to the following SBTN targets: • • | Target includes upstream supplychain Tier 4 | 2024 | 5% | 5% | Landrelated engagement target: Lindex will actively drive change in identifed riskareas for cotton agriculture by collaborating directly with farmers and secure the transition regenerative agriculture. No ecological thresholds or were used in setting this targets. Target relative. Feedback on target setting and possible gaps were provided by WWF in Acadamy's course“Kickstarting Biodiversity Program”. |
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80
E4–5
Impact metrics related to biodiversity and
ecosystems
Lindex Group does not have own sites located in or near
biodiversity-sensitive areas. However, the company has
identified material impacts across several areas: land -use
change, impacts on extent and condition of ecosystems
and freshwater-use change. Key risks are associated with
the use of raw materials, especially cotton and wood-
based fibres, and production processes, particularly
wet-processing units in the value chain. The Group does
not disclose impact metrics related to biodiversity, as the
material impacts, risks and opportunities are primarily driven
by its value chain rather than its own operations.
Report of the Board of Directors
81
E5
Resource use
and circular economy
E5 –1
Policies related to resource use and circular
economy
Lindex Group has implemented an Environmental Policy
that addresses key material impacts, risks and opportunities
related to resource use and the circular economy. Further
details of the policy are outlined in chapter
E1 Climate
Change
.
In the area of resource use and circular economy, Lindex
Group is committed to:
•
environmental impact and generate new business
opportunities.
•
MacArthur Foundation’s principles to ensure that
products and materials circulate at their highest value.
•
and eliminating waste and pollution.
•
by maximising product value, reducing overproduction,
and scaling circular business models and services.
•
using recycled or renewable materials.
•
uptake of recycled materials and available solutions.
•
keeps products and materials in circulation, is
resource-efficient and powered by renewable energy.
•
sourcing and resource-efficient processes powered by
renewable energy.
The Group also enhances product longevity through
care, repair and recommerce services, while promoting
sustainable consumption through transparent
communication. The company requires all business
partners to follow circular economy principles and ensure
transparency in waste prevention.
E5 –2
Actions and resources related to resource use
and circular economy
Lindex Group has developed and implemented key actions
in both divisions, which are focused on optimising resource
use and advancing circular economy practices. The actions
are in line with the Group’s sustainability objectives and
its Environmental Policy and they are designed to meet
the requirements of resource use, circularity and the
allocation of resources. The implementation of the actions
for both divisions does not require significant operational
expenditures (OpEx) or capital expenditures (CapEx).
Actions for Lindex division
•
overproduction since 2017, contributing significantly to
the reduction of Scope 3 emissions and resource use.
A clear plan has been developed through the 2030
Climate Roadmap to balance growth with sustainable
practices and to secure maximum value for every
product produced in terms of full-price sales, reduced
markdown clearance, and developing circular business
models.
•
circular design principles aimed at extending product
life and enhancing recyclability. These principles focus
on designing for durability, using recycled materials,
and aligning with recyclability standards. In 2024, the
focus has been on aligning these design principles with
forthcoming EU regulations.
•
and materials in circulation, Lindex division has made
progress in optimising supply chains, developing
partnerships, and implementing systems such as RFID
tagging and data-driven forecasting, and planning for
waste reduction and overproduction. Initiatives like the
new omnichannel distribution centre and collaborations
with partners such as Södra Skogsägarna and
Infinited Fiber aim to close the loop on textile waste
recycling and secure access to recycled fibre to further
create resilience and reduce dependence on natural
resources.
•
developing customer-oriented, profitable and scalable
circular business models and services in combination
with educating customers on sustainable habits.
•
applies circular principles to packaging, eliminating
all unnecessary packaging and using 98% recycled
plastic content. Plastic packaging recyclability is
estimated based on packaging guidelines, plastic
produced by nominated packaging suppliers and spot
checking. In-store garment collection programmes in
Sweden, Norway, Finland, and Lithuania aim to extend
product life through reuse and recycling initiatives with
partners like Fretex and Myrorna.
•
that achieving circularity requires collaboration across
the value chain. Partnerships with textile recyclers
like Södra Skogsägarna and Infinited Fiber are
key to scaling textile recycling efforts. Additionally,
participation in industry projects such as RISE’s
‘Framework for Circular Textiles’ contributes to the
development of standards for recycling and circular
materials.
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82
Expected outcomes of Lindex division’s actions
•
product by volume optimisation, reducing markdown
clearance and increasing full price sales and circular
business models.
•
recyclability that contribute to the division’s circular
business transformation and a circular economy.
•
energy-powered production processes with a focus on
reuse and recycling fit for circular business models.
•
longevity through care, repair, and recommerce
services.
Lindex division’s actions cover both upstream and
downstream value chains. Key milestones include achieving
circular design goals by 2025 and fulfilling climate action
and circular supply chain objectives by 2030.
Actions for Stockmann division
Stockmann division’s operations meet the requirements of
legislation and the authorities, and the division’s department
stores in Finland have been operating under the ISO 14001
certified environmental management system since 2003.
The division’s department stores in Estonia and Latvia have
also adopted the operating methods and guidelines of the
management system. The system with its goals has been
updated in March 2024.
•
for own brands.To achieve this action, Stockmann
division participated in the national Circular Design
programme and has implemented a Circular Design
Guide to help designers to understand how different
materials affect the carbon footprint of a product.
•
sourced materials in Stockmann division’s high-
quality offering. Currently, there is no quantifiable data
available, as Stockmann division does not track the
increase. However, the division prioritises suppliers
offering products made from recycled materials and
evaluates their brands’ sustainability scores on a scale
from one to four, where one indicates no consideration
for sustainability and four represents a fully sustainable
brand.
In addition to these, Stockmann division has invested in
partnerships that operate with circular business models,
such as Relove, which is a long-standing partner for
Stockmann division with operations in Helsinki and Tampere
department stores, and Nineyes and Luxury Helsinki, which
held a pop up at the Helsinki department store between
October 2023 to April 2024, as well as Barlume Vintage,
which held a pop up at the Helsinki department store in
the autumn of 2024. During 2024, the Helsinki department
store has also participated in VG-Port Recycling’s service
in which used coffee grounds are collected to be processed
for further use.
Stockmann division has ongoing activities related to
recycling in its own operations, linked to the ISO 14001
environmental system’s targets related to the circular
economy. These activities include donating products and
materials for reuse, recycling and charity, improving waste
sorting in own operations by providing clear property -
specific sorting guidelines, reducing the amount of plastic
in packaging materials, updating supplier guidelines for
own brand product packaging, providing guidance to staff
on the use of packaging materials, and providing recycling
information on packaging materials, for example.
The expected outcomes of Stockmann division’s actions
•
implementing circular design processes will extend the
life cycles of Stockmann division’s own brand products.
•
with circularity in mind will reduce waste generation
and resource depletion. To achieve this, Stockmann
division chooses materials in its own brand products
that are partly made from recycled fibres.
•
materials: Expanding the selection of products
containing recycled materials
•
marketing will educate customers about responsible
consumption practices, encouraging them to make
more informed purchasing decisions. During 2024, the
division created and uploaded textile care guidelines to
their website to educate consumers about washing and
taking care of their products to expand their life cycle.
The current actions are ongoing, following the strategic
period set for 2022–2025. The Stockmann-division will
update the action plan after the strategic period, and include
the material impacts, risks, and opportunities in the action
plans. The ISO 14001 management system’s actions
related to circular economy are updated annually. The
actions cover Stockmann division’s own operations in all
operating countries.
E5 –3
Targets related to resource use
and circular economy
Lindex Group has set targets to transition to a circular
business model and to achieve the objectives of the Group’s
Environmental Policy. These voluntary targets aim to
reduce environmental impact, improve resource efficiency,
and promote the use of recycled and responsibly sourced
materials.
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Lindex division/ Stockmann division/ Group | Related policy and description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex division | Environmental policy: The target is directly linked to the policy objective to keep products and materials circulated at value, to extending product life cycles, optimising resource use and eliminating waste and pollution. | By 2030, circular business models and services as recommerce, rental, or repair services will comprise 5% of Lindex division’s total revenue. | Lindex division’s targets and they in accordance with recognised international standards, such as those of the Textile Exchange, and the of the EU waste hierarchy, as well as scientific research conducted by the Ellen McArthur foundation regarding circular business models. | Target includes the entire value chain (upstream, own oper- ations and downstream) | 2024 | 0,02% | 0,02% | Through collaboration with industry partners and stakeholders, Lindex division is committed innovation and achieving these targets as part of its circular economy initiatives. Progress is reviewed and monitored transparency and alignment with global sustainability goals. Result from circular business so far is based on Second hand, where sales can be categories. This is a part of the "budget hierarchy" in RMS. |
Lindex division | Environmental policy: The target is directly linked to the policy objective to keep products and materials circulated at value, to extending product life cycles, optimising resource use and eliminating waste and pollution. | By 2026, 100% of Lindex’s materials are recycled and/or sustainably sourced (through recognized certification schemes). | Lindex division’s sustainability targets are designed in accordance with recognised international standards, such as those of the Textile Exchange, and the of the EU waste hierarchy, as well as scientific research conducted by the Ellen McArthur foundation regarding circular business models. | Target includes upstream value chain Tier 4 | 2018 | 0% | 88% | ‘More sustainable materials’ refers to materials made from renewable or recycled sources and produced with methods that have a lower negative impact conventional alternatives. Through collaboration with industry partners and stakeholders, Lindex division is committed innovation and achieving these targets as part of its circular economy initiatives. Target Progress is reviewed and monitored transparency and alignment with global sustainability goals. |
Lindex division | Environmental policy: The target is directly linked to the policy objective to keep products and materials circulated at value, to extending product life cycles, optimising resource use and eliminating waste and pollution. | By 2026, products include a minimum of 15% recycled content. | Lindex division’s sustainability targets are designed in accordance with recognised international standards, such as those of the Textile Exchange, and the of the EU waste hierarchy, as well as scientific research conducted by the Ellen McArthur foundation regarding circular business models. | Target includes upstream value chain Tier 4 | 2021 | 16% | 58% | This target focuses on increasing the use of recycled fibres, reducing the division’s reliance on Lindex division works with industry partners, including Södra Skogsägarna and Infinited Fiber Oy, textile-to-textile recycling solutions and ensure access post-consumer recycled materials. Progress is reviewed and monitored transparency and alignment with global sustainability goals. Target is relative. |
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Lindex division/ Stockmann division/ Group | Related policy and description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex division | Environmental policy: The target is directly linked to the policy objective to keep products and materials circulated at value, to extending product life cycles, optimising resource use and eliminating waste and pollution | By 2025, all paper and plastic packaging follow our circular materials strategy | Lindex division’s sustainability targets are designed in accordance with recognised international standards, such as those of the Textile Exchange, and the of the EU waste hierarchy, as well as scientific research conducted by the Ellen McArthur foundation regarding circular business models. | Target includes own operations | 2020 | 0% | In 2024, 98% Lindex division’s plastic packaging was made with 100% recycled and recyclable content. | Through collaboration with industry partners and stakeholders, Lindex division is committed innovation and achieving these targets as part of its circular economy initiatives. Tracked result is estimated based on Lindex division’s packaging guidelines, nominated packaging suppliers and spot checking. Progress is reviewed regularly to ensure transparency and alignment with global sustainability goals. Target |
Lindex division | Environmental policy: The target is directly linked to the policy objective to keep products and materials circulated at value, to extending product life cycles, optimising resource use and eliminating waste and pollution | By 2025, all our own stores have functioning collection and systems for paper and plastic waste streams. | Lindex division’s sustainability targets are designed in accordance with recognised international standards, such as those of the Textile Exchange, and the of the EU waste hierarchy, as well as scientific research conducted by the Ellen McArthur foundation regarding circular business models. | Target includes own operations | 2020 | 89% | In 2024, 92% of all Lindex division’s stores could provide a functioning collection and recycling system with possibility to recycle both paper and plastic waste. 95% of the stores had the possibility to recycle plastic and 97% had the possability to recycle paper waste. | Through collaboration with industry partners and stakeholders, Lindex division is committed innovation and achieving these targets as part of its circular economy initiatives. Tracked result is estimated based on Lindex division’s packaging guidelines, nominated packaging spot checking. Progress is reviewed and monitored transparency and alignment with global sustainability goals. Target is absolute. |
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Lindex division/ Stockmann division/ Group | Related policy and description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Stockmann division | Environmental policy | The short-term targets for the circular economy are exploring possibilities for developing Stockmann division’s design processes towards circular business models, optimising the use of product packaging materials and increasing the use of recycled and certified material in own brand product developing the product selection based on circular business models, and increasing customer awareness of sustainable consumption and opportunities. | Target includes own operation | 2022 | These targets have been set in accordance with the division’s sustainability strategy and environmental programme, which is 2022–2025. The ISO 14001 mentions continuous improvement, assessment of risks and opportunities, as well as planning and management of activities. The system is reviewed and updated every spring. has not been validated by an external party. | |||
Stockmann division | Environmental policy | The long-term targets for the circular economy are to continuously develop design processes to find opportunities in the circular economy, to monitor and develop the product and service selection, to monitor and promote sustainability topics and to maintain active communication with customers and employees. | Target includes own operation | 2022 | These targets have been set in accordance with the division’s sustainability strategy and environmental programme, which is 2022–2025. The ISO 14001 mentions continuous improvement, assessment of risks and opportunities, as well as planning and management of activities. The system is reviewed and updated every spring. has not been validated by an external party. | |||
Stockmann division | Environmental policy | In accordance with the Stockmann division’s ISO 14001 environmental management system, the division has set a recycling rate target in the department stores as Finland and 50% in the Baltics. | Target includes own operation | 2022 | In 2024, recycling rate in 79% and in Baltics 52% | These target have been set in accordance with the division’s sustainability strategy and environmental programme, which is 2022–2025. The ISO 14001 mentions continuous improvement, assessment of risks and opportunities, as well as planning and management of activities. The system is reviewed and updated every spring. has not been validated by an external party. |
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86
E5 –4
Resource inflows
Main material inflows for Lindex division are connected
to the raw materials used for products and packaging.
For Stockmann division, material inflows include fashion
and home category textiles and home hardgoods. For
Stockmann division, the data is applicable for the division’s
own brand products.
In 2024, the Group’s products contain the following key
materials, share of total weight:
•
•
•
•
•
•
Other materials include materials such as leather, down,
glass, metal and in Stockmann division’s case, polyamide.
In addition to these materials, the Group also used paper,
plastic, and cardboard as packaging materials.
Materials used to manufacture
the Group’s products
The total weight of products technical and biological materials | 9,598.30 tonnes |
The percentage of sustainably sourced biological materials | 41.7% |
The absolute weight of secondary reused or recycled components | 4,626.51 tonnes |
Percentage of secondary reused recycled components | 48.2% |
The Group adheres to Textile Exhange standards and
certification schemes, as well as to the Organic Content
Standard (OCS), Global Recycling Standard (GRS),
In-Conversion Cotton (ICC) and Lenzing standards. These
standards apply to materials such as cotton and manmade
cellulosic fibres. For some packaging materials, such as
cardboard and paper, there is limited information available
regarding their sustainable sourcing. As a cascading
principle, the Group has set targets related to design
principles and the use of sustainably sourced materials.
However, no cascading principles have been established for
specific materials.These targets are detailed in
E5-3 Targets
related to resource use and circular economy
.
Calculation methodology for resource inflows
The data for textiles was collected from the weight of
ordered garments, excluding hard accessories and some
home hardgood items, such as clocks and Christmas
decorations, due to their complex structure. The data for
packaging was collected from the weight of materials of
sales packaging on commercial products, e-commerce
plastic bags, shopping bags, marketing materials, gift
boxes handed out in stores and transportation packaging.
There is no overlap between the data reported on reused
and recycled material. The Group is unable to report data
on resource inflows in part of the company: for Lindex
division, the focus is main composition in textile products,
not including all categories with cosmetics. Approach to this
will be evaluated later on, timeframe has not yet been set.
For Stockmann division, the data includes only Stockmann
division’s own brand products and excludes other brands.
Access to other brands’ data relies heavily on other brand’s
own reporting processes, and to prevent duplicate reporting,
the Stockmann division will not seek to access this data.
The data on resource inflows has not been validated by an
external body other than the assurance provider.
E5 –5
Resource outflows
The key products coming out of Lindex division’s production
process are women’s fashion, lingerie and underwear,
children’s clothing, cosmetics, and accessories. The
division has ten design principles in place, and the division
has focused on embedding these principles into systems
and ways of working. The design principles have been
introduced in
E5-2 Actions and resources related to
resource use and circular economy
. All of the division’s
products are in the scope of these design principles.
The key products coming out of Stockmann’s production
process are its own brand products, including textiles
related to fashion and home goods, as well as hard goods
such as tableware, wooden kitchen utensils, glass and
ceramics, baskets, photo and poster frames, as well
as other small decorative items. In addition to these,
Stockmann divison also sells products from other brands,
including cosmetics and food. However, these categories
are not part of Stockmann’s own production processes.
Stockmann has implemented a Circular Design Guide;
however, it has not been monitored to which extent the
designers of the own-brand products are using the guide
when designing products. As a result, Stockmann cannot
provide a list of key products that are designed according to
circular economy principles.
In terms of packaging, the Group is committed to eliminating
unnecessary materials and transitioning towards using
recycled content in packaging. The Lindex division has
worked to eliminate single-use plastics in transport
packaging, which constitutes the majority of the division’s
plastic volume. Single-use plastic is now reserved for
delicate and sensitive items. The Stockmann division is
actively working to reduce plastic usage in packaging and
Report of the Board of Directors
87
prioritises the use of cardboard in packaging. The division
also emphasises the use of durable materials and strives
to minimise packaging materials whenever possible from a
product perspective. The majority of packaging materials
used by both divisions are deployed in countries with
advanced recycling awareness and infrastructure, ensuring
better management of these resources.
The expected durability of the products introduced to the
market by the Group aligns with the industry average across
product categories such as women’s wear, kids’ wear,
lingerie, and home goods. While no formal assessment
on the durability compared to the industry average has
been conducted, this expectation is based on the Group’s
resource optimisation and circular design principles, which
are comparable to industry standards.
Currently, the Group does not have data on the repairability
of its own brand products. However, both divisions promote
proper care practices and offer opportunities for product
repair, such as providing care and repair guidelines readily
available on the division’s websites. Additionally, both
divisions actively support repairability by providing a wide
range of care and repair products to customers, including
mist sprays, slide-on zippers, knee patches, sewing kits,
replaceable elastic straps, and reflective bands.
To further extend the lifespan of cotton jersey garments,
Lindex division collaborates with the innovator ‘Biorestore’,
which restores colour and removes pilling in cotton jersey
fabrics. Biorestore is applied to the division’s second-hand
products and is also directly available to the customers. The
Stockmann division provides a repair service for damaged
products and allows customers to give feedback on product
repairability, directly influencing the design process. The
Group does not have an established rating system in place
for repairability.
Rate of recyclable content in products
Total weight products (kg) | 2,828,963 |
Total weight | 7,421,642 |
Rate of recyclable | 38.1 |
Rate of recyclable content in packaging
Total weight packaging (kg) | 417,194 |
Total weight | 427,082 |
Rate of recyclable | 97.7 |
Calculation methodology for product durability and
recyclability
For product durability, food and cosmetics are excluded,
as these products are not designed to be durable. The
calculation for textile products’ recyclability excludes
accessories and hard goods.
For textile products, the calculation is based on the weight
of ordered garments with below criteria:
•
95-100% = cotton
•
100% = polyester
•
100% = polyamide
•
= viscose
•
Plastic packaging recyclability is estimated based on
packaging guidelines, plastic produced by nominated
packaging suppliers and spot checking. No other significant
assumptions have been used. For Stockmann division, the
data includes only Stockmann division’s own brand products
and excludes other brands. Access to other brands’ data
relies heavily on other brand’s own reporting processes,
and to prevent duplicate reporting, the Stockmann division
will not seek to access this data. The data on product
durability and recyclability has not been validated by an
external body other than the assurance provider.
Waste
Hazardous waste | 14.19 |
For reuse | 1.42 |
For recycling | 4.37 |
For other recovery | 0 |
To incineration | 4.89 |
To landfill | 3.52 |
To other disposal | 0 |
Radioactive waste | 0 |
Non-hazardous waste | 4,490.31 |
For reuse | 35.85 |
For recycling | 3,269.18 |
For other recovery | 0.32 |
To incineration | 1,089.07 |
To landfill | 95.89 |
To other disposal | 0 |
Total amount | 4,504.50 |
Total | 1,193.36 |
Percentage of | 26.5% |
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88
The materials that are presented in the Group’s waste:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
(Category 3)
•
•
•
Waste streams relevant to the Group’s sector and activities:
•
•
•
•
•
•
•
•
Calculation methodology for waste
The Lindex Group adheres to national waste legislations,
which mandates disposal operations. Primary waste data
was used when available from contracted waste collectors.
For Lindex division, waste streams for plastic, cardboard,
and paper were derived from ERP systems and supplier
reports. Since complete figures for plastic, paper, and
cardboard waste are not always available – due to some
portions ending up in store or customer waste – estimates
were made based on purchased volumes. Data on IT waste
was sourced from supplier reports.
For Stockmann division, the missing waste amounts
were estimated using square meters and employee count
together with some actual waste amount data and some
data from previous years. Waste data was collected for 11
months (01–11/2024) The data for 12/2024 was estimated
using 12/2023 data. The sources for waste data were from
contracted waste collectors’ reports (in Finland and in
Latvia), whereas from invoices in Estonia. Key assumptions
in data were related to different waste categories and their
availability in the waste collectors’ reports. For instance, in
some department stores, cardboard, plastic, metal, energy
waste, mixed waste and packaged retail animal -based food
by-product were waste categories subject to estimations.
The data on waste has not been validated by an external
body other than the assurance provider. The Group is able
to report data on waste in all parts of the company.
Report of the Board of Directors
89
SOCIAL
INFORMATION
S1
Own workforce
S1–1
Policies related to own workforce
Lindex Group has adopted policies to address material
impacts, concerning its workforce. These include the
Human RightsPolicy, Anti-Discrimination Policy, Offence
and Harassment Policy, Salary Policy, Speak -Up Policy,
and Equal Opportunities Plan. Collectively, these policies
promote respect for human rights, diversity, inclusion, and
fair treatment of all employees. These policies cover all
Lindex Group’s employees.
The Group’s Human Rights Policy outlines its commitment
to respecting all internationally recognised human rights,
including labour rights, civil and political rights, and
economic, social and cultural rights. Core commitments
include:
•
(HRDD) to identify, prevent, mitigate, and remediate
human rights impacts.
•
women, minorities, migrant workers, and children.
•
management and operations.
Lindex Group aligns its Human Rights Policy with globally
recognised frameworks, including:
•
•
at Work and core conventions.
•
All Forms of Discrimination Against Women, on the
Rights of the Child, and on the Elimination of All Forms
of Racial Discrimination.
•
Global Compact.
•
•
Children’s Rights and Business Principles also guide
the policy.
The Group’s policies address discrimination and
harassment based on factors such as gender identity,
sexual orientation, race, nationality, ethnic or social origin,
disability, language, political opinion, religion and age.
To
commit to equal pay and eliminate gender pay gaps,
the Lindex division has a salary policy in place. In addition,
the Lindex division has an Equal Opportunities Plan as
part of its diversity strategy, which aims to ensure that all
employees are treated with respect, have equal access
to opportunities, and work in a positive environment. This
approach aligns with the division’s sustainability promise for
future generations. The Lindex division also has a Working
Environment Policy in place, with the primary goal of
preventing unhealthy working environments and accidents.
The Stockmann division has implemented an equality
and non-discrimination plan aimed at identifying structural
issues in the workplace and establishing improvement
targets for creating a more equal environment. The main
target of the plan is to create a non-discriminatory, tolerant,
and equal workplace. The Stockmann division has an
extensive workplace accident prevention policy in place.
Lindex Group rejects all forms of discrimination and
harassment. Its Anti -Discrimination and Offence and
Harassment Policies provide guidelines for maintaining an
inclusive and respectful workplace. The company’s efforts
include:
•
backgrounds, and experiences.
•
progression for all employees.
•
chain.
The Group’s Speak-Up Policy outlines the Group’s
commitment to ensuring that employees, suppliers, and
other stakeholders have access to a safe and effective
grievance mechanism. Protections against retaliation are
in place for all who report concerns. Reported incidents are
addressed through prompt investigations and corrective
actions. The Group also prohibits any form of harassment
or offensive behaviour, ensuring a workplace where
employees are treated with dignity and respect.
In 2024, Lindex Group updated its Human Rights Policy to
reflect feedback from stakeholders and ensure alignment
with the company’s salient human rights issues. The
Speak-Up Policy was also introduced to enhance the
speak-up portal’s functionality.
The Board of Directors holds ultimate responsibility for
managing these human rights policies, with the Corporate
Sustainability Team overseeing their formulation and
review. In addition to this, the Board of Directors of Lindex
Group holds accountability for managing impacts, risks and
opportunities related own workforce, workers in the value
chain, affected communities, and consumers and end-
users. The Group Management Team and the respective
business functions covering all departments, managers, and
employees are responsible for the implementation of these
policies.
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90
To ensure accessibility and understanding of its policies,
Lindex Group publishes the policies on its website in
three languages and provides employee with access to
these policies through its intranet. New employees receive
information on the policies as part of their onboarding,
while training is offered to stakeholders with specific
responsibilities.
S1–2
Processes for engaging with own workers and
workers’ representatives about impacts
The Lindex division engages with its workforce and
employee representatives through the Lindex Voice
personnel survey, supported by the Peakon Workday
survey tool. Regular surveys, carried out twice a year at
minimum, including focused engagement questions and
broader questions with DEI components, gather insights
on well-being, motivation, and alignment with the division’s
strategies. Results are benchmarked against industry
standards, and achieved an engagement score of 8.5 (out
of 10) and participation rates of 72–75% in recent rounds in
2024.
The Lindex division has trade union employee
representatives in Sweden, Norway, Finland, and duly
elected workers’ representatives in Lithuania and Estonia.
Employee representatives participate in 1–6 joint annual
meetings, depending on the country, to discuss collective
agreements including wages, working hours and other
employment conditions, workplace safety issues to protect
employees from the potential health and safety risks and
negative impacts, workplace procedures including conflict
resolution mechanisms, and training and development
opportunities for career growth. In the countries where the
Lindex division lacks employee representatives, the division
plans to strengthen alternative engagement methods. The
Lindex division conducts yearly performance dialogues with
all employees with regular follow-ups. The people leaders
at the Lindex division have an operative responsibility
to conduct performance dialogues with their teams. The
division’s Chief People & Communications Officer is
responsible for implementation.
The Chief People & Communications Officer oversees the
Lindex Voice survey and shares the survey findings with
management and the Board to guide priorities. Surveys
are translated into local languages to make sure they
include diverse perspectives, which ensures inclusivity and
responsiveness to employee needs.
The Stockmann division has personnel committees that
operate in every site in Finland and meet four times a year.
The key role of the personnel committees is to contribute
to the development of the work community and enhance
local well-being. In addition to the personnel committees,
employee representatives have monthly meetings with the
Chief Operating Officer, Chief People & Culture Officer, and
Chief Sales Officer to maintain an ongoing dialogue between
the top management and employees. The division has
success dialogues with its employees in every country, and
these dialogues are held two to four times per calendar year.
The Stockmann division engages with its workforce and
employee representatives through the Stockmann’s Staff
Barometer personnel survey. The personnel survey is the
main tool for generating an understanding of how employees
are feeling and helping to pinpoint topics that require
attention. The division has taken various improvement
actions based on previous survey results, such as enhancing
well-being, with an emphasis on learning and development
opportunities, as well as renewing employer brand and
recruitment practices. The survey is usually carried out two
times a year, but in 2024, the survey was carried out once
due to the implementation phase of organisational changes.
In addition, the Stockmann division carries out an annual DEI
survey to assess the current status of DEI.
The people leaders at the Stockmann division have an
operative responsibility to conduct success dialogues with
their teams. These dialogues are held with each employee
at least twice a year. Satisfaction with the processes is
measured in the personnel survey and reports are available
to the people leaders. The Head of Talent Attraction
and Development is responsible for the process and its
development. The division’s Chief People & Culture Officer
is responsible for the implementation and results of the
personnel survey, and Head of Legal, Employment & Data
Protection is responsible for implementing the DEI survey.
S1–3
Processes to remediate negative impacts and
channels for own workers to raise concerns
The Group has established processes to remediate
negative impacts on its employees, and has channels
for raising concerns or complaints, in alignment with the
Whistleblowing Directive (EU) 2019/1937. The Group’s
speak-up portal enables anonymous reporting of concerns.
The portal is provided by an external partner WhistleB,
Whistleblowing Centre.
The concerns are handled in accordance with the Group’s
Speak-Up Policy, which includes a due diligence process
to verify facts and identify remedies for adverse impacts.
Retaliation against individuals who report in good faith or
participate in investigations is prohibited and may result in
disciplinary actions, including termination of employment.
In addition to the speak -up portal, the employees of both
divisions can report issues directly to a team leader or a
manager, or a colleague from Human Resources, Security,
Sustainability, Legal or Internal Audit. All reports are treated
with the utmost sensitivity, and confidentiality is protected to
the greatest extent possible.
Report of the Board of Directors
91
Both divisions regularly review and monitor the
effectiveness of the grievance mechanisms, by tracking
employee trust through surveys. In the Lindex division’s
personnel survey, the question “If I experienced serious
misconduct at work, I’m confident Lindex would take action
to rectify the situation” helps assess awareness and trust in
these processes. The Stockmann division’s survey includes
questions about whether the employees feel they can voice
their complaints and resolve work-related disagreements.
The feedback is used to ensure continuous improvement
and to maintain an accessible and reliable system for
addressing employee concerns at both divisions.
S1–4
Taking action on material impacts on own
workforce, and approaches to mitigating
material risks and pursuing material
opportunities related to own workforce,
and effectiveness of those actions
The Group is dedicated to complying with local and
international laws to mitigate and remediate potential or
actual negative impacts arising from its business activities.
As the Group continues to develop its human rights due
diligence, the Group is also actively setting and reviewing
specific action plans and targets to address material
impacts such as work-life balance, health and safety, and
freedom of association.
To enhance work-life balance, the Group aims to establish
predictable shift schedules and offer flexible working
arrangements to promote the overall well-being of its
employees. Regarding health and safety, the Group
ensures compliance with local legislation, organises safety
training programmes, provides essential equipment, and
implements monitoring processes.
In terms of freedom of association, the Group is committed
to upholding employees’ rights to freely associate and
engage in collective bargaining.
The Lindex division identifies necessary actions to address
negative impacts on its workforce through a due diligence
process, including a human rights impact assessment
conducted in 2022 and an internal double materiality
assessment. These processes help identify potential risks
and impacts within the business and value chain, including
operations in countries with higher human rights risks and
specific operations (e.g., stores, warehouses). A continuous
dialogue with union and employee representatives and
employee engagement through the Lindex Voice survey
also supports the identification of potential issues.
Actions for Lindex division
•
rights expert to enhance strategy development and
due diligence linked to own operations.
•
on International Women’s Day, Menstrual Hygiene
Day and a pink event linked to the Breast Cancer
Awareness Month.
•
employees including DEI training.
•
incorporating human rights and ethical standards,
expected to launch in 2025.
•
development platform for human rights training.
•
as the Diversity Charter Sweden and Jobbsprånget to
enhance Lindex’s positive impact on the workforce.
Actions for Stockmann division
•
for offering additional work shifts was implemented
in 2023-2024 in Finland. These changes help the
Stockmann division offer additional work more
efficiently and fairly.
•
accidents and near-miss situations.
•
to well-being and ability to work. The training took
place in Helsinki and Tampere during 2024.
•
monitor, and continuously develop the DEI strategy
for the division. The working group created and
implemented instructions to prevent inappropriate
behaviour, including discrimination, and harassment.
•
•
quality and quantity of HR information.
The expected outcome of these actions is to enhance
the well-being, inclusivity and sense of belonging of the
division’s employees.
The actions cover all employees
in both divisions. Although more specific actions with
timeframes are yet to be set, the divisions track the
effectiveness of their actions through employee feedback
mechanisms, surveys, and performance reviews. The
actions at both divisions do not require significant
operational (OpEx) or capital (CapEx) expenditures.
The Group proactively addresses negative impacts such as
discrimination through policies such as the Discrimination
Policy and the Diversity Plan, and provides training on
diversity, equity and inclusion (DEI) for employees. These
initiatives aim to foster an inclusive environment and
promote equality.
To ensure remediation of material negative impacts, the
Group operates a Speak -Up Policy and whistleblowing
system that allows employees to report concerns
confidentially. The process is further elaborated in
S1-3
Processes to remediate negative impacts and channels for
own workers to raise concerns.
Report of the Board of Directors
92
S1–5
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
Lindex Group has set several targets to manage material
negative impacts, advance positive impacts, and address
risks related to its workforce, with a focus on employee
engagement, diversity, equity and inclusion (DEI), and
maintaining a zero-tolerance policy on discrimination and
harassment.
Lindex division/ Stockmann division/ Group | Related policy and description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target base- line year | Target baseline value | Results 2024 | Additional information |
Lindex division | The target is directly linked to the Group’s Human Rights Policy objective of fostering employee engagement and participation. | Employee & an engagement score of 8.6 (out of 10) participation rate in the Lindex Voice employee survey. | All own employees | 2021 | Both targets were met in 2024, engagement score of 8.6 and participation rates of 75% in March 72% in November. | Lindex division engaged with employees in setting these targets. Although the target concerning the employee engagement survey did not departments, it significantly engaged stakeholders within the People and Communications Department. Target is relative and has been consistent since 2021. | ||
Lindex division | The target is directly linked to the Human Rights Policy objective of creating a culture of equity, and inclusion. | DEI Awareness 100% of employees to participate in awareness training. | All own employees | 2022 | 0% | All employees are assumed to have received the training, which is incorporated into onboarding and provided to all when it was implemented. | Lindex division engaged with employees in setting these targets, especially for DEI, through interviews and analysis of survey data, ensuring align with workforce needs and the division’s goals. Tracking attendance is a challenge due to the lack of a formal system. Future progress will acquiring a digital learning and track completion. Target is absolute and 2022. While there have been no measurement methodologies, future efforts will focus on implementing a learning management system to track DEI training division’s ability to monitor performance. | |
Lindex division | The target is directly linked to the Human Rights Policy and discrimination policy objective of zero tolerance for discrimination and harassment. | Zero Discrimination and Harassment: Ensure that no discrimination and harassment occurs in Lindex’ division’s own operations, year by | All own employees and non- employees | 2021 | 1 | We identified one of harassment this year and took necessary actions to remediate it. Our commitment to a zero harassment policy remains unwavering as we continue to ensure a safe and respectful workplace for all employees. | Lindex division engaged with employees in setting these targets, especially for DEI, through interviews and analysis of survey data, ensuring align with workforce needs and the division’s goals. Target is absolute and has been consistent since 2021. |
Report of the Board of Directors
93
Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Stockmann division | The target is directly linked to the Human Rights Policy objective of fostering employee engagement and participation. | Long-term target: empowered, motivated, and healthy, self-steering teams that place well-being at the core every day. Modern and safe workplaces in all countries and locations. | All own employees | 2022 | The KPIs to are: • “Stockmann cared cares about my physical and mental health.” The result for 2024 was 37% favourability, -7% drop compared to 2023. • work setup helps me take my personal life.” The result for 2024 was 56% favourability, +11 increase compared to 2023. • • | The Stockmann division has goals for the period 2022–-2025 in line with division’s strategic priorities. The targets cover all own employees at the Stockmann division. The progress of the targets is measured with specified KPIs, but there are no specific target levels or baseline year for the KPIs. The division’s performance is evaluated annually using these KPIs. If the results highlight areas requiring attention, the division implements changes and improvements on a case-by- case basis. The current targets are qualitative. Specific targets related to own established in 2025. Employee representatives have not directly been involved in the target- setting process. | ||
Stockmann division | The target is linked the Group’s Human Rights Policy objective of fostering employee engagement and participation. | Short-term target: safe and responsible work environment for the Stockmann division’s team members and supporting team members in taking care of their well-being. | All own employees | 2022 | The KPIs to are: • “Stockmann cared cares about my physical and mental health.” The result for 2024 was 37% favourability, -7% drop compared to 2023. • work setup helps me take my personal life.” The result for 2024 was 56% favourability, +11 increase compared to 2023. • • | The Stockmann division has goals for the period 2022–-2025 in line with division’s strategic priorities. The targets cover all own employees at the Stockmann division. The progress of the targets is measured with specified KPIs, but there are no specific target levels or baseline year for the KPIs. The division’s performance is evaluated annually using these KPIs. If the results highlight areas requiring attention, the division implements changes and improvements on a case-by- case basis. The current targets are qualitative. Specific targets related to own established in 2025. Employee representatives have not directly been involved in the target- setting process. |
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S1–6 — S1–17
Metrics related to own workforce
Characteristics of the Group’s own employees
Gender | Number of employees (head count) |
Male | 531 |
Female | 5 435 |
Other | 0 |
Not reported | 0 |
Total employees | 5 966* |
* The figures differ from the Report of the Board of Directors
due to corrections made at a later stage in the reporting
process. 5 966 is the updated personnel figure.
Employees in countries where the Group has at
least 50 employees, representing at least 10% of its
total employees
Country | Number of employees (head count) |
Sweden | 2 093 |
Finland | 1 541 |
Norway | 943 |
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95
Characteristics of the Group’s own employees by contract type and gender
Female | Male | Other | Not disclosed | Total | |
Number of employees | 5 435 | 531 | 0 | 0 | 5 966 |
Number of | 4 434 | 504 | 0 | 0 | 4 938 |
Number of temporary | 618 | 26 | 0 | 0 | 644 |
Number of non-guaranteed hours (head count) | 383 | 1 | 0 | 0 | 384 |
Number of full | 1 691 | 416 | 0 | 0 | 2 107 |
Number of | 3 745 | 114 | 0 | 0 | 3 859 |
During the reporting year, 1 059 employees left the company, giving an employee turnover of 17.8%.
Collective bargaining coverage and social dialogue
Collective bargaining | Social dialogue | |
Coverage rate | Employees – EEA (for countries with representing >10% of total empl.) | Workplace representation with >50 empl. representing |
0–19% | ||
20–39% | ||
40–59% | ||
60–79% | ||
80–100% | Sweden, Norway, | Sweden, Norway, |
78.3% of Lindex Group’s employees are covered by collective bargaining agreements.
Diversity metrics top management
Female | Female % | Male | Male % | Other | Other % | Gender not disclosed | Gender not disclosed % | |
Top management | 9 | 50% | 9 | 50% | 0 | 0% | 0 | 0% |
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96
Diversity metrics employees
Health and safety management system coverage
Under 30 years | 30 to 50 years | Over 50 years | Total | |
Number | 2 149 | 2 294 | 1 523 | 5 966 |
Lindex division | Stockmann division | |
Workers covered by a health and safety management system (%) | 100 | 100 |
Adequate wages
All employees in the EU are paid an adequate wage in
line with EU Directive on Adequate Minimum Wages
(2022/2041). Wages in Sweden, Norway, and Finland are
set according to the collective bargaining agreements
specific to each country. These agreements are negotiated
between employers and trade unions, ensuring fair wages
and working conditions. Wages for employees in other
countries within EEA are aligned with the national minimum
wages as stipulated by the EU Directive on Adequate
Minimum Wages. This directive aims to ensure that workers
receive fair compensation across the European Economic
Area.
All employees outside the EEA are paid above the local
laws concerning the minimum wages. Wages are set in
accordance with the national minimum wage laws of each
country. Additionally, Lindex Group conducted a study to
confirm the living wage status across the operations in
and outside the EEA in 2024. HR representatives from the
production countries Turkey, Bangladesh, China, India, and
Hong Kong were provided with a detailed table outlining
the monthly and hourly minimum and living wages. They
were asked to confirm whether all their workers are paid
at least these amounts. The survey included 20 questions
covering various aspects such as the living wage, minimum
wage, collective bargaining, the number of employees, and
how salaries are set. The responses were then compiled
and analysed to determine compliance with both minimum
wage and living wage standards. Relevant benchmarks
from international organizations that conduct living wage
studies were used to ensure that wages meet or exceed the
cost-of-living standards. Lindex Group aims for wages to
be not only adequate, but fair, as well as to support better
living standards for all employees and workers across own
operations.
Significant Assumptions:
•
is that the EU Directive on Adequate Minimum Wages
provides a fair and adequate wage standard.
•
it is assumed that the living wage benchmarks provided
by international organizations accurately reflect the cost
of living and necessary wage levels.
The figures are estimated based on the fact that Lindex
Group adheres to local occupational safety and health
legislation.
Work-related injuries and work-related accidents
2024 | |
Number injuries | 0 |
Number | 191 |
Rate | 25.3 |
Fatalities as a result of other workers working | 0 |
Lindex Group does not separate between recordable and
non-recordable incidents.
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97
Remuneration metrics (pay gap and total
remuneration)
The gender pay gap percentage, defined as the difference
of average pay levels between female and male employees,
is 18.06%. In 2024, most of the males were working in the
offices, whereas the majority of the store personnel were
females. The average hourly salaries used to calculate
gender pay gap only include basic salary. No variable
components were included. Lindex division used salaries of
employees having an employment the last day of November
2024, Stockmann division used salaries of employees
employed last day of December 2024.
The annual total remuneration ratio, based on the
company’s highest paid individual divided by the median
of all other employees, amounts to 43.22.This calculation
is based on the total annual remuneration of all employees
having an employment the last day of the year. The salaries
of employees who started during the year have been
recalculated to represent a full year annual salary. No part-
time salaries were recalculated to full-time employment as
the vast majority of the employees working in the company
work part-time. The median salary used to calculate the
annual total remuneration ratio is a salary from a part-
time employment. When recalculating the annual total
remuneration ratio based on the recalculation of the median
to full-time salary, the new ratio is 32.77.
Incidents, complaints and severe human rights
impacts
Total | |
Incidents of | 0 |
Complaints filed | 6 |
The amount of fines, penalties, for damages as a result of incidents complaints | 0 |
Cases of severe | 0 |
In 2024, six concerns were raised through channels for
own workers to raise concerns. Of these, three were either
fully or partially substantiated, leading to remediation
and closure. Three cases are open in review or on-going
remediation.
Data has been gathered from the designated speak-up
portal (WhistleB) and the central and local functions of
Human Resource, Security and Sustainability.
S2
Workers in the
value chain
S2–1
Policies related to value chain workers
Lindex Group has adopted policies to manage its material
impacts concerning workers in its value chain. These
policies, Human Rights Policy and Speak-Up Policy, outline
Lindex Group’s commitments to responsible and ethical
sourcing, considering impacts on human rights. The general
descriptions of these policies can be found in chapter
S1-1
Policies related to own workforce
.
The Group’s Human Rights Policy outlines Lindex Group’s
commitment to respecting internationally recognised human
rights, including labour rights, and includes provisions for
safe workplaces, adequate wages, and the prohibition
of child labour, forced labour, and human trafficking. The
Group’s commitment encompasses the entire workforce
within its value chain. Special consideration is provided to
safeguarding the health and well-being of female workers
in the supply chain. In 2024, there was one identified case
of non-respect of UN Guiding Principles on Business and
Human Rights, ILO principles, or OECD Guidelines related
to value chain workers. Lindex division identified a human
rights breach involving one of its suppliers in Bangladesh. A
complaint was filed through the RSC grievance mechanism
in Bangladesh concerning verbal abuse by a supervisor.
The issue was addressed, and the complaint was resolved
and closed after the factory took corrective actions.
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98
Lindex Group actively communicates the commitments to
its suppliers. Lindex division has outlined the commitments
in its Supplier Code of Conduct and Sustainability
Commitment, integrated into the supplier purchasing
agreements. Compliance is regularly evaluated through pre-
assessments, regular audits and continuous evaluations,
using a business scorecard to recognise high-performing
commercial goods suppliers. Stockmann division has
integrated the commitments into supplier agreements. As
part of the agreements, the Stockmann division requires
its commercial suppliers to commit to the amfori BSCI
Code of Conduct, which includes eleven core labour rights
derived from international treaties, or to provide a document
outlining similar commitments. The compliance of non-EU
own brand suppliers is monitored with regular audits.
To clarify expectations and foster compliance with the
commitments, the Lindex division engages with suppliers,
especially in high-risk regions such as Bangladesh, China,
India, Pakistan and Turkey, through workshops and
consultations. Additionally, the division provides ongoing
role-specific training, including health and safety and gender
equality programmes, to support policy implementation
internally across the Lindex division and externally through
its partnerships. The Stockmann division does not directly
engage with supply chain workers but receives insights
through audits, described in chapter S2-2
Processes for
engaging with value chain workers about impacts
.
The Group provides an anonymous grievance mechanism,
outlined in the Speak -Up Policy, allowing all stakeholders,
including value chain workers, to report concerns
confidentially through an online speak-up portal. When
human rights violations are caused by third parties, the
Group strives to use its leverage to ensure remediation and
implement preventative measures.
S2–2
Processes for engaging with value chain
workers about impacts
Lindex Group engages actively with value chain workers
and their representatives to manage the impacts on workers
across its supply chain. By collaborating with legitimate
worker representatives and credible proxies, the Group
gathers valuable perspectives, especially those of the most
vulnerable groups, especially female workers, to guide its
decision-making.
Engagement with value chain workers typically occurs
during regular audits, described in subchapter S2-4
Taking
action on material impacts on value chain workers, and
approaches to managing material risks and pursuing
material opportunities related to value chain workers, and
effectiveness of those actions
, which include confidential
worker interviews to assess working conditions, grievance
mechanisms and awareness of rights among workers.
The audit data informs the Group’s decisions to improve
workplace standards.
As an active member of the Ethical Trading Initiative (ETI),
the Lindex division leverages this platform to engage
multiple stakeholders, including NGOs, academia, trade
unions, and governmental authorities, ensuring a broad -
based dialogue on workers’ rights and ethical practices.
In addition, the Lindex division engages with the value chain
workers through credible proxies with regular consultations
for feedback when developing or updating policies,
creating action plans, or implementing capacity -building
programmes. The Lindex division engages with suppliers,
especially in high-risk regions such as Bangladesh, China,
India, and Turkey through workshops and consultations.
The Lindex division has established a strong local presence
in high-risk countries through its own production offices,
where the Lindex division’s employees maintain a close
dialogue with suppliers to support workers’ well-being.
Additionally, the Lindex division is a signatory to the
International Accord for Health and Safety in the Textile
and Garment Industry, committing to safety inspections,
factory improvements, and worker empowerment, with the
involvement of global trade unions.
The Chief Sustainability Officer oversees this engagement
at the Lindex division, ensuring that worker insights
inform the division’s approach. At the Stockmann division,
the Chief Brand, Customer & Sustainability Officer and
the Chief Offering and Experience Officer share the
responsibility.
To assess the effectiveness of engagement, Lindex Group
monitors outcomes through audits, worker interviews, and
grievance mechanisms, adjusting its strategies as needed
to prioritise the concerns of vulnerable worker.
S2–3
Processes to remediate negative impacts and
channels for value chain workers to raise
concerns
Lindex Group has a structured approach to remedy which
it follows in situations where it identifies that it has caused
or contributed to a material negative impact on value chain
workers. When a negative impact is identified, Lindex Group
follows a process outlined in the Speak-Up Policy, which
includes a comprehensive investigation by the sustainability
team to assess the situation and engage with the value
chain workers or their representatives, to determine
appropriate actions.
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99
Lindex Group has in place a public, anonymous speak-up
portal, which ensures confidentiality and safety for anyone
reporting concerns. The channel is accessible for all
stakeholders, including value chain workers, via Lindex
Group’s website. The issues reported through the portal are
monitored through reports via internal systems managed
by the HR, Security, Sustainability, and Legal teams. To
ensure the effectiveness of the portal, the Speak -Up Policy
enforces strict anti-retaliation measures to create a secure
environment for individuals to report concerns.
Through its Supplier Code of Conduct, the Lindex division
mandates that suppliers establish safe, confidential
grievance channels, which are regularly monitored
through audits and worker interviews. The Stockmann
division’s suppliers commit to providing effective grievance
mechanisms and maintain accurate records in line with
UNGP Article 31, when committing to the amfori BCSI Code
of Conduct.
The suppliers’ grievance mechanisms are regularly
monitored through audits. The Sedex SMETA audits, for
example, include assessments of worker awareness and
the trustworthiness of grievance mechanisms through
interviews. This process includes strengthening grievance
management systems at factories and maintaining detailed
documentation on grievances and remedies.
Through audits, the Lindex division has identified
challenges linked to workers’ trust in suppliers’ internal
grievance channels and is continuously striving to ensure
that suppliers strengthen their internal channels. To further
support workers’ opportunities to raise their concerns the
Lindex division also partners with a third-party grievance
mechanism in its sourcing regions. In Bangladesh, the RSC
provides a transparent platform for reporting health and
safety issues, and complaints are made public to ensure
accountability. The Lindex division also supports a Women’s
Café in Bangladesh that provides a safe space for female
workers to address workplace issues. In Turkey, the Lindex
division partners with MUDEM to offer legal support and
grievance channels for garment workers.
S2–4
Taking action on material impacts on value chain
workers, and approaches to mitigating material
risks and pursuing material opportunities related
to value chain workers, and effectiveness of
those actions
The Group’s Human Rights Policy outlines the Group’s
commitment to responsible and ethical sourcing, which
means acquiring products and services from suppliers while
considering their potential impact on human rights and the
environment.
Lindex Group implements ongoing key actions to address
and mitigate the material negative impacts on workers in its
supply chain. The current focus of Lindex Group’s actions
is on workers of the Tier 1 suppliers, while the company
is in the process of strengthening its Human Rights Due
Diligence (HRDD) process to expand these actions further
in the supply chain. Transparency and traceability efforts
cover the full supply chain.
Actions for Lindex Group
•
Business Scorecard to evaluate supplier performance,
focusing on onboarding, evaluation, motivation,
and disengagement. The aim is to transform and
consolidate value chains, encouraging self-reliance
in business partners and promoting long-term human
rights standards. The Stockmann division uses supplier
selection criteria when selecting new suppliers. In
supplier collaboration, long-term supplier relationships
are preferred to build strong, efficient and compliant
supplier partnerships.
•
to Lindex Group’s standards. The Lindex division’s
supplier evaluations include internal Code of Conduct
audits and third-party Sedex SMETA audits. The
Stockmann division requires third-party audits, such as
amfori BSCI, Sedex SMETA and ICS, for all its non-EU
own brand suppliers. Suppliers are audited annually,
or biennially if they have received high results in many
consecutive audits. Audits focus on various topics,
including adequate wages, freedom of association,
health and safety, diversity, discrimination, child
labour and forced labour. An audit report, along with a
corrective action plan to address detected deficiencies,
is prepared after each audit. Each task outlined in the
corrective action plan is given a deadline, and progress
is actively monitored. In addition to audits, the Lindex
division promotes supplier ownership by training
suppliers in conducting self-assessments alongside
audits to encourage continuous improvement in factory
conditions and develop sustainable practices.
•
in its supply chain. The Lindex division participates in
the Fashion Transparency Index, with a current score
of 44%. By 2027, Lindex division aims for complete
supply chain transparency and traceability,and already
publishes supplier information on its website and Open
Supply Hub. The Stockmann division publishes lists of
Tier 1 suppliers and factories of its own brand fashion
and home products on its website.
•
safety risks by conducting external audits, ensuring
effective remediation through follow-ups on corrective
action plans. The Lindex division also implements a
self-assessment programme to help suppliers enhance
their management systems and staff competencies.
In addition, the Lindex division prioritises health and safety
through the International Accord on Fire and Building
Report of the Board of Directors
100
Safety, which it joined following the 2013 Rana Plaza
collapse. Through the International Accord, the Lindex
division has committed to improving safety in the garment
industry, particularly in Bangladesh and Pakistan. The
programme includes independent inspections, training, and
a complaint mechanism to ensure safe workplaces. This
legally binding agreement between brands and trade unions
aims to establish a robust, industry-wide compliance and
accountability system.
•
outsourced to independent suppliers, and worker
wages are not directly paid by the Group. The Group
is committed to adopting purchasing practices that
support fair wage payments in the supply chain and
using leverage to influence wage progression. The
commitment to fair wages is outlined in the Lindex
division’s Sustainability Commitment, and included in
the Stockmann division’s supplier agreements through
the amfori BSCI Code of Conduct commitments.
In addition, the Lindex division guides its suppliers to
periodically assess worker wages against locally calculated
living wages using the Anker & Anker methodology and
benchmark these against actual wages. To promote fair
compensation, suppliers are supported in implementing
wage management systems that classify jobs by skill
levels, ensuring workers are paid appropriately for their
competencies. Additionally, suppliers are encouraged
to transition from cash payments to digital methods,
such as bank transfers, to enhance wage reliability and
transparency. Also, the Lindex division’s purchasing
practices are designed to support fair wage payments while
avoiding practices that incentivise excessive overtime.
•
requirements communicated in the Lindex division’s
Supplier Code of Conduct and the Stockmann
division’s supplier agreement, require suppliers to
uphold workers’ rights to freedom of association.
Lindex Group closely monitors audit findings on worker
representation and addresses issues such as the
absence of elected representatives, lack of awareness
about their roles, irregular meetings with management,
and inadequate election system.
The Lindex division has also mapped its Tier 1 suppliers
and knows where there is unionisation. As a part of Lindex
Group’s ongoing work to strengthen its HRDD process, the
Lindex division is planning to develop a more detailed action
plan to further support the strengthening of workers’ rights
to freedom of association.
•
WE Women Management System, developed in
collaboration with GIZ (Deutsche Gesellschaft für
Internationale Zusammenarbeit), aims to strengthen
women’s position and equal rights, to reduce the
gender gap in management roles across its global
garment supply chain. The programme aims to provide
women with skills training, mentorship, and health
support while raising awareness among the suppliers’
management about gender issues, with a focus on
women’s health and closing the wage gap.
By implementing this system across its global supply chain
in countries such as Bangladesh, India, Turkey, and China,
the Lindex division promotes gender equality in career
progression, skills development, and workplace inclusivity.
The programme aims to foster equal opportunities for
women and safeguards them from discrimination and
harassment.
•
has zero tolerance of child and forced labour. Zero
tolerance cases are monitored by the Lindex division
during supplier onboarding, audits and ongoing
monitoring of WhistleB reports and external sources,
with set action plans and remediation processes to
address any issues if reported. The Lindex division
also has a Modern Slavery Act statement that defines
the division’s approach to prevent, identify and mitigate
the risk of modern slavery in its business and value
chains. The Stockmann division monitors the cases
through audits.
By implementing these actions, Lindex Group aims to
improve the supplier alignment with ethical standards,
leading to improved working conditions, better wage
transparency, increased worker representation, and
inclusive workplaces for women. The effectiveness of the
actions is assessed through audit results.
The actions taken on diversity and inclusion mitigate
potential negative impacts but also address the identified
risks and opportunities identified in the double materiality
assessment related to reputation.
The Lindex division uses a Human Rights Due Diligence
(HRDD) process to identify, prevent, and mitigate impacts,
focusing on vulnerable groups. The Stockmann division
is committed to developing a similar process. Currently,
its actions on supply chain are developed based on risk
assessments and active monitoring of the audit results.
No severe human rights issues or incidents connected to
value chain workers were reported in 2024.
Lindex Group provides remedy through a structured
process, including investigations, corrective measures, and
engagement with workers or representatives, described in
chapter
S2-3 Processes to remediate negative impacts and
channels for value chain workers to raise concerns.
Report of the Board of Directors
101
Lindex Group’s responsible purchasing practices include
fair price negotiations, realistic production forecasts, and
transparent communication. Subcontracting requires
adherence to ethical standards, and suppliers are given
notice in cases of disengagement to reduce worker impact.
The actions are ongoing, integrated into Lindex Group’s
regular operations, and no specific operational (OpEx)
or capital (CapEx) expenditures are allocated. However,
the Lindex division has allocated EUR 0.39 million in
the WE Women initiative, a Human Right strategist, and
membership fees for Sedex and Ethical trading initative,
during 2024. See note 2.5 and 2.6. to the consolidated
financial statements 2024.
S2–5
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
To promote the Lindex Group’s commitment to responsible
and ethical sourcing that promotes supply chain workers’
rights, outlined in the Group’s Human Rights Policy, the
Lindex division has established targets focusing on living
wages, working conditions, transparency, and women’s
empowerment. These targets are set to be achieved by
2025 and monitored annually.
Lindex division/ Stockmann division/ Group | Related policy and description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex division | Group’s Human Rights Policy. The target directly linked to the Human rights policy objective wages. | Living Wage Program: By 2025, Lindex division’s tier 1 for 80% of its production volume will participate in a living wage program. Lindex division suppliers to calculate living wages, identify wage gaps, and use digital payments. | Upstream supply chain, tier 1, covering 80% of Lindex division’s production volume. | 2019 | 0% | In 2024, who stand for 80% of Lindex division production volume are calculating a living wage suppliers who 95% of Lindex division production volume have adopted digital payments. | The target is relative, based on the proportion of total volume. The calculation method was adjusted in 2023 and now looks at the volume of tier 1 suppliers that have participated in a living wage program conditions / full Lindex division production volume. The target was developed by a from global production markets, incorporating insights from over 20 years of audit results, research reports, NGO surveys, stakeholder collaborations such as with Solidaridad. | |
Lindex division | Group’s Human Rights Policy. The target is directly linked to policy objective of working conditions including discrimination, health and safety, adequate wages, Freedom of association, forced labour, child labour and offense and harassment. | Working Conditions: By 2025, Lindex division’s tier 1 suppliers who stand for 80% of its production volume will demonstrate commitment to improving working conditions in areas such as health, safety, and anti-discrimination. | Upstream supply chain, tier 1, covering 80% of Lindex division’s production volume. | 2019 | 0% | In 2024, who stand for 78% of Lindex division production volume, showed commitment to improving working conditions. Self-assessment performance reached 72% by 2024. | The target is relative, measured through Lindex system, that evaluates suppliers annually on self-assessment capability and management improvements in working conditions. The calculation method was adjusted in 2023 and now production volume of tier 1 suppliers that to improve working conditions / full Lindex division production volume. The target was developed by a from global production markets, incorporating insights from over 20 years of audit results, research reports, NGO surveys, stakeholder collaborations such as with Solidaridad. |
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Lindex division/ Stockmann division/ Group | Related policy and description of relation to the policy objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex division | Groups Human rights policy. The target is directly linked to the objective of the Human rights policy. Transparency in supply chain is essential for upholding and human rights by greater accountability and addressing systemic issues effectively. | Supply Chain Transparency: By 2025, Lindex division’s tier 1 suppliers who stand for 80% of its production volume will be within the supply chain. | Upstream supply chain, tier 1, covering 80% of Lindex division’s production volume. | 2019 | 0% | Lindex division has published supplier information on both its website Supply Hub. | While big parts of the supply chain have already been mapped, currently the IT infrastructure needed to enable transparency and product traceability is still in development. Full is targeted for 2027. In accordance with Lindex commitment to the transparency pledge, Lindex publishes contact information to garment factories, processing units, and fabric suppliers on both our own websites as well as on open supply hubs. The target was developed by a from global production markets, incorporating insights from over 20 years of audit results, research reports, NGO surveys, stakeholder collaborations such as with Solidaridad. The target is relative. | |
Lindex division | Group’s Human Rights Policy. The target is directly linked to objective of women empowerment and gender equality. | Women’s Empowerment: By 2025, tier 1 suppliers who stand for 80% of its production volume will have completed and sustained the Women Empowerment (WE Women) program. | Upstream supply chain, tier 1, covering 80% of Lindex division’s production volume. | 2019 | 0% | In 2024, who stand for 53% of Lindex division production volume had completed program. | The target is relative and measured annually. method was adjusted in 2023 and now looks at the volume of tier 1 suppliers that have onboarded WE Women / production volume The target was developed by a from global production markets, incorporating insights from over 20 years of audit results, research reports, NGO surveys, stakeholder collaborations such as with Solidaridad. The target is relative. The Lindex division has successfully implemented project with the majority of its suppliers in Bangladesh and key suppliers in India. However, challenges like disruption have delayed the rollout in other markets. The exit from Myanmar, where the project has also affected the result. Although the Lindex division plans to expand the project to more suppliers in China in 2025, expected that the original target will not be met. learned will be used to shape the strategy beyond 2025. |
The Stockmann division has not yet set any targets related to supply chain workers.
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S3
Affected
communities
S3–1
Policies related to affected communities
Lindex Group has adopted policies to manage material
impacts related to affected communities living near to the
Group’s value chain activities. These policies, the Human
Rights Policy, Environmental Policy, and Speak-Up Policy,
outline Lindex Group’s approach to addressing impacts on
communities’ rights and access to clean water and impacts
from discarded products. The general descriptions of the
Human Rights Policy and Speak-Up Policy can be found
in subchapter
S1-1 Policies related to own workforce
, and
Environmental Policy in subchapter
E1-2 Policies related to
climate change mitigation and adaptation
.
The Human Rights Policy emphasises respect for affected
communities’ rights, especially access to clean water,
sanitation, and adequate housing, and includes measures
to minimise impacts on land and water resources. Lindex
Group commits to upholding civil, political, economic, social,
and labour rights across its value chain. Dialogue with
stakeholders, including NGOs and local representatives, is
integral to aligning operations with international standards,
ensuring respect for the rights of affected communities and
indigenous peoples. No cases of non-respect of the UN
Guiding Principles on Business and Human Rights, ILO
Declaration on Fundamental Principles and Rights at Work
or OECD Guidelines for Multinational Enterprises were
reported regarding affected communities.
The Environmental Policy draws from the guidance on the
principles for responsible business conduct and outlines
these commitments by targeting reductions in water use
and pollution, focusing on sustainable practices like water
recycling and rainwater harvesting, particularly in water -
intensive parts of the supply chain.
The Lindex division also uses its Supplier Code of Conduct
to engage with suppliers in high-risk regions, requiring them
to commit to similar sustainability commitments outlined in
the Group’s policies. Outreach efforts involve consultations,
workshops, and collaborations, fostering understanding of
the Lindex division’s standards in Bangladesh, China, India,
and Turkey.
The Stockmann division requires its suppliers to make
similar commitments, for example by signing the amfori
BSCI Code of Conduct, through which the suppliers commit
to respecting the right to healthy living conditions of local
communities, and to preventing, mitigating and remediating
adverse impacts on the surrounding communities, or by
demonstrating similar commitments in their own policies.
As outlined in its Speak-Up Policy, Lindex Group offers
a grievance mechanism to enable all of its stakeholders,
including affected communities, to report concerns
anonymously through an online speak-up portal. Lindex
Group’s suppliers are also mandated to establish safe,
confidential grievance channels, further described in
subchapter
S2-3 Processes to remediate negative impacts
and channels for value chain workers to raise concerns
.
When human rights violations are caused by third parties,
the Group strives to use its leverage to ensure remediation
and implement preventative measures.
S3–2
Processes for engaging with affected
communities about impacts
Lindex Group incorporates the perspectives of affected
communities in managing its impacts through partnerships
and collaborations, especially via NGOs and industry
initiatives, due to the remoteness of its operations, which
limits direct engagement. The Lindex division engages
with the affected communities at multiple stages, including
during policy development and mitigation planning, with
regular dialogues through partnerships and initiatives. The
Stockmann division does not have its own separate process
in place to engage with communities that are only affected
through the Stockmann division’s value chain.
Cooperation with local NGOs and suppliers enables the
Lindex division to integrate community perspectives into
decision-making. Currently, the Lindex division conducts
projects only in Bangladesh. Key activities include
partnership projects, such as with WaterAid, aimed at
improving access to water, sanitation, and hygiene. These
efforts involve not only infrastructure development but
also community empowerment, particularly by training
women to be hygiene behaviour change agents, to
address community needs effectively. By involving local
communities, especially women, in project planning and
implementation, the Lindex division gains insight into the
perspectives of vulnerable and marginalised communities
and ensures that the projects reflect the perspectives of
those most affected.
Report of the Board of Directors
104
The operational responsibility for these engagements,
ensuring insights inform the company’s sustainability
approach, lies with the Chief Sustainability Officer. The
processes to assess the effectiveness of engagement have
not yet been put in place.
The Group has not identified material impacts related to
indigenous communities among the affected communities
and therefore, has not included a specific process to protect
the particular rights of indigenous peoples in its stakeholder
engagement approach.
S3–3
Processes to remediate negative impacts and
channels for affected communities to raise
concerns
Lindex Group has a structured approach to remedy,
outlined in its Speak-Up Policy, which it follows in situations
in which it identifies that it has caused or contributed
to a material negative impact on affected communities.
Lindex Group offers a grievance mechanism for affected
communities through its online speak-up portal, which
ensures anonymous and secure reporting. All reports are
treated confidentially and undergo a due diligence process.
This process includes a comprehensive investigation by the
sustainability team to assess the situation and engage with
affected communities or representatives, such as suppliers,
peers and NGOs, to determine appropriate actions. Verified
cases prompt corrective actions to address adverse
impacts.
To
ensure effective tracking of issues, Lindex Group
monitors reports via internal systems managed by HR,
Security, Sustainability, and Legal teams. Currently, no
formal assessment exists to determine whether affected
communities are aware of or trust these channels. However,
to ensure the effectiveness of the channel, the Speak -Up
Policy enforces strict anti-retaliation measures to create a
secure environment for individuals to report concerns.
Although Lindex Group does not currently support
grievance channels through its business relationships for
affected communities, it acknowledges their value and
intends to explore options for expanding such mechanisms.
An example of existing support along Lindex division’s value
chain includes the Women’s Café in Bangladesh, a locally
established channel where community members can raise
concerns.
S3–4
Taking action on material impacts on affected
communities, and approaches to managing
material risks and pursuing material
opportunities related to affected communities,
and effectiveness of those actions
Lindex Group takes ongoing actions to mitigate negative
impacts on affected communities, especially focusing on
water and land use in the Lindex division’s supply chain.
Actions for Lindex division
•
practices, rainwater harvesting, and responsible
wastewater treatment among suppliers, the Lindex
division aims to minimise freshwater reliance and
water contamination risks. The Lindex division partners
with WaterAid in Bangladesh to improve access to
water and sanitation for vulnerable communities, with a
focus on supporting women and girls.
•
division is committed to more sustainably sourced or
recycled material by sourcing certified materials (e.g.,
OCS, GOTS, GRS) and regenerative agriculture) to
reduce land degradation and enhance biodiversity.
•
division provides water conservation and hygiene
education to local communities, emphasising support
for women and girls. Through partnerships with NGOs,
it addresses displacement and resource challenges
in areas impacted by industrial and agricultural
operations. The effectiveness of this initiative has not
yet been assessed.
The Group also implements actions to mitigate impacts in
its downstream value chain:
•
waste reduction and recycling initiatives, aiming to
decrease landfill waste and environmental pollution. It
also promotes textile -to-textile recycling with partners.
The Group is also developing customer-facing services
that support circularity, for instance, a second-hand
offering.
Report of the Board of Directors
105
These actions, expected outcomes, and how to track
effectiveness are described in more detail in subchapters
E2-2 Actions
and resources related to pollution,
E3-2
Actions and resources related to water, E4-3 Actions and
resources related to biodiversity and ecosystems,
and
E5-2
Actions and resources related to resource use and circular
economy.
The Lindex division has identified the necessary actions
in response to actual or potential negative impacts on
affected communities through a structured Human Rights
Due Diligence (HRDD) process, as outlined in the Human
Rights Policy. This process pays special attention to
vulnerable groups such as women, migrant workers, and
local communities. The Stockmann division is committed to
developing its own process.
When negative impacts arise, Lindex Group follows a
process outlined in its Speak-Up Policy, as described in
subchapter
S3-3 Processes to remediate negative impacts
and channels for affected communities to raise concerns.
No severe human rights issues or incidents connected to
affected communities were reported in 2024.
To deliver positive impacts to communities, the Lindex
division collaborates with WaterAid to improve water and
sanitation facilities in garment worker communities in
Bangladesh, targeting over 8,700 people with initiatives
such as:
•
women and girls with awareness programmes on
menstrual hygiene.
•
factories to lessen groundwater dependency.
•
planning and financial aspects of facility construction,
with women and girls trained as hygiene change
agents.
Lindex division monitors the progress of these actions
through annual reports from WaterAid, with a set of key
performance indicators (KPIs) to assess access to clean
water, sanitation and hygiene awareness. The project,
budgeted at EUR 0.35 million, spans from July 2023 to June
2025.
S3–5
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
Lindex Group has not established specific targets for
managing impacts on affected communities; however, its
key initiatives focus on sustainable water management,
waste reduction, and ecosystem protection. These
initiatives are further described in chapters
E3 Water
,
E4
Biodiversity and ecosystems and E5 Resource use and
circular economy
.
Report of the Board of Directors
106
Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the objective | Target | Frameworks or conclusive scientific evidences the target is based on | Scope of the target | Target base- line year | Target baseline value | Results 2024 | Additional information |
Lindex division | Group’s Human Rights Policy. The target is directly linked to policy objective of communities and access to clean water and sanitation | By 2025 the aim is to secure 1200 people access to clean drinking water and improved sanitation facilities at RMG workers’ dwelling communities. | The initiative focuses on targeted group in Ready garment sector communities in Savar in Bangladesh. | 2023 | 0 people | 87 people | The target is absolute. The the project partner Water aid. Expected result on target is delayed due to political instability in Bangladesh during 2024, including protests and lockdowns, which have lead to limited access to the communities and factories. Expectation is still to deliver on the | |
Lindex division | Group’s Human Rights Policy. The target directly linked to policy objective of communities and access to clean water and sanitation | By 2025 the aim is to secure 8700 people access to handwashing facilities at factories and RMG workers’ dwelling communities | The initiative focuses on targeted group in Ready made garment sector communities in Savar Upazila in Bangladesh. | 2023 | 0 people | 2780 people | The target is absolute, The the project partner Water aid. Expected result on target is delayed due to political instability in Bangladesh during 2024, including protests and lockdowns, which have lead to limited access to the communities and factories. Expectation is still to deliver on the | |
Lindex division | Group’s Human Rights Policy. The target directly linked to policy objective of communities and access to clean water and sanitation | By 2025 the aim is to in awareness raising and improved hygiene behaviour of workers and their families | The initiative focuses on targeted group in Ready garment sector communities in Savar in Bangladesh. | 2023 | 0 people | 1423 people | The target is absolute. The the project partner Water aid. Expected result on target is delayed due to political instability in Bangladesh during 2024, including protests and lockdowns, which have lead to limited access to the communities and factories. Expectation is still to deliver on the |
Report of the Board of Directors
107
Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the objective | Target | Frameworks or conclusive scientific evidences the based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex division | Group’s Human Rights Policy. The target directly linked to objective of communities and access to clean water and minimise impact on land. | By 2025, all commercial goods suppliers to the use of hazardous chemicals contributing to water and soil pollution by 2025, achieving a score of four in the Environmental Assessment tool. Looking towards 2030, Lindex division’s long- term goal is for suppliers to establish industry leadership in chemical management, setting an example with innovativee approaches in the textile industry, such as natural dyes and eco-friendly colourants. | The current targets related to chemical management Lindex division are and fully aligned with EU regulations, including REACH/ ECHA (Registration, Evaluation, Authorisation, and Restriction Chemicals/European Chemicals Agency) standards as well as the Group’s environmental policy. The targets are conclusive scientific evidence REACH/ECHA, AFIRM (Apparel and Footwear International RSL Management), ZDHC (Zero Discharge of Chemicals), and ASTM Society for Testing and Materials) are grounded on scientifically proven data. | Target includes upstream supply chain Tier 1-2 | 2019 | 2019, the focus was to map chemicals First measured value was 79% in 2022 | 79% | The short term goal means that Lindex division’s suppliers implemented a strong environmental management system, including chemical management, with at least 80% of their chemicals compliant with Lindex division’s MRSL (Manufacturing Restricted substances list), with a detailed, verifiable plan 100% compliance. The assessment scale is from one to five, with a score indicating significant shortcomings in chemical management, and a score of five indicating industry leadership in chemical management, with innovative practices that extend beyond factory. A score of four indicates chemical management system in place to all chemical hazards and risks before purchasing. The target is relative. The key stakeholders were engaged in setting the targets; as division consulted textile experts, NGOs, other fashion brands, and several of the leading suppliers, such as MAS Group. |
Lindex division | Group’s Human Rights Policy. The target directly linked to objective of communities and access to clean water and minimise impact on land. | By 2025, 80% of commercial goods suppliers are expected to achieve optimal water efficiency, which includes reducing water intake, re-using and recycling water processes, and treating wastewater to meet environmental standards before discharge. | Key EU directives considered include Directive 2018/851/EU (amending the Directive), Regulation 2019/1021/ EU (POP Regulation), Directive 2008/98/EC (Waste Framework Directive), Directive 2010/75/EU (Industrial Emissions Directive - IED) and Directive 2000/60/ EC (Water Framework Directive). Additionally, international standards such as ZDHC (Zero Discharge of Hazardous Chemicals), HiGG FEM (Facility Environmental Module) and BSR (Business for Social Responsibility) Wastewater Discharge Standards were also incorporated into the development of the tool. scientific evidence. | Target includes upstream supplychain Tier 1 vertical suppliers | 2019 | 2019, the focus was to map current situation First measured value was 79% in 2022 | 79% | This short-term relative goal has a direct and immediate impact on the water use of factories. Lindex division tracks the effectiveness of these actions its Environmental Assessment tool, which evaluates suppliers on a scale of one to five, with one being the lowest and five the highest score. A score of five means suppliers have action plans for 100% water efficiency and show significant score of three reflects compliance with national water regulations and some progress on water efficiency, highlight major water management issues. Lindex division aims phase out those scoring below three. Progress is measured both quantitatively, in water use and increased third-party wastewater testing. The target has not by an external party and the targets are voluntary. collaborates with stakeholders, including NGOs in production countries, to identify and address specific water risks. these partnerships, they work to understand the challenges and set targeted goals based on the identified risks. |
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108
Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the objective | Target | Frameworks or conclusive scientific evidences the based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Group’s Human Rights Policy. The target directly linked to objective of communities and access to clean water and minimise impact on land. | By 2030, 80% of commercial goods suppliers should have water stewardship principles in place. This long-term goal includes ecosystem restoration and improved basin-level water management, benefiting both suppliers and local communities. | Key EU directives considered include Directive 2018/851/EU (amending the Directive), Regulation 2019/1021/ EU (POP Regulation), Directive 2008/98/EC (Waste Framework Directive), Directive 2010/75/EU (Industrial Emissions Directive - IED) and Directive 2000/60/ EC (Water Framework Directive). Additionally, international standards such as ZDHC (Zero Discharge of Hazardous Chemicals), HiGG FEM (Facility Environmental Module) and BSR (Business for Social Responsibility) Wastewater Discharge Standards were also incorporated into the development of the tool. scientific evidence. | Target includes upstream supplychain Tier 1 Vertical suppliers | 2019 | 2019, the focus was to map current situation First measured value was 79% in 2022 | 79% | Suppliers achieving this score must demonstrate in reducing water use and recycling wastewater, both EU regulations and international standards as well as Group’s Environmental Policy. This long-term goal aims for a significant, widespread impact on water quality and availability at regional and global levels. Lindex division tracks the effectiveness of these actions by using its Environmental Assessment tool, which evaluates suppliers on a scale of one to five, with one being the lowest and five the highest score. A score of five means suppliers have action plans for 100% water efficiency and show significant score of three reflects compliance with and some progress on water efficiency, highlight major water management issues. Progress is measured both quantitatively, in water use and increased third-party wastewater testing. The target has not by an external party and the targets are voluntary. collaborates with stakeholders, including NGOs in production countries, to identify and address specific water risks. these partnerships, they work to understand the challenges and set targeted goals based on the identified risks. | |
Lindex division | Group’s Human Rights Policy. The target directly linked to objective of communities and access to clean water and minimise impact on land. | By 2030, 100% of Lindex virgin cotton farmers with whom we are collaborating directly in order to secure the transition to organic and regenerative agriculture | The target aligns with frameworks such as the Global Biodiveristy framework (GBF) and the Science Based Targets for Nature (SBTN). Target relates to the SBTN targets: • • Transform | Target includes upstream supplychain Tier 4 | 2024 | 5% | 5% | Landrelated engagement target: Lindex will actively drive change in identifed riskareas for cotton agriculture with farmers and secure the transition to organic and regenerative agriculture No ecological thresholds or biodiversity offsets were used setting this targets. Target Feedback on target setting and possible gaps were WWF in Sustainable Fashion Acadamy's course Biodiversity Program" |
Lindex division | Group’s Human Rights Policy. The target directly linked to objective of communities and access to clean water and minimise impact on land. | By 2026, materials are recycled and/or sustainably sourced (through recognized certification schemes) | Target includes upstream supply chain Tier 4 | 2018 | 0% | 88% | The key stakeholders were engaged in setting the targets; as division consulted textile experts, NGOs and Textile The target is relative. | |
Report of the Board of Directors
109
Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the objective | Target | Frameworks or conclusive scientific evidences the based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex division | Group’s Human Rights Policy. The target directly linked to objective of communities and access to clean water and minimise impact on land. | By 2026, 70% of all products include a of 15% recycled content | Lindex division’s sustainability targets are designed with recognised international standards, such as those of the Textile Exchange, principles of the EU waste hierarchy, as well as scientific research conducted by McArthur foundation regarding circular business models. | Target includes upstream supplychain Tier 4 | 2021 | 16% | 58% | This target focuses on increasing the use of recycled fibres, reducing the division’s reliance on virgin materials. Lindex division works with industry partners, including Södra Skogsägarna and Infinited Fiber Oy, to scale textile-to-textile recycling solutions and ensure access to post-consumer recycled materials. Progress is reviewed and monitored regularly to ensure transparency and alignment with is relative. |
Lindex division | Group’s Human Rights Policy. The target directly linked to objective of communities and access to clean water and minimise impact on land. | By 2026, 100% will be traceable through recognized certification schemes. | The target aligns with frameworks such as the Global Biodiveristy framework (GBF) and the Science Based Targets for Nature (SBTN). Target relates to the SBTN targets: • ecosystems • • Reduce | Target includes upstream supplychain Tier 4 | 2023 | 87% | 93% | The WWF biodiversity risk filter was used to identify high-impact areas, focusing on cotton and MMCF production as well as use and quality. No ecological thresholds were used in setting this relative targets. Feedback on target setting and possible gaps were WWF in Sustainable Fashion Acadamy's course Biodiversity Program". |
Lindex division | Group’s Human Rights Policy. The target directly linked to objective of communities and minimise impact on water and land. | By 2026, 100% of all Manmade cellulosic fibers will be traceable through recognized certification schemes. | The target aligns with frameworks such as the Global Biodiveristy framework (GBF) and the Science Based Targets for Nature (SBTN). Target relates to the SBTN targets: • ecosystems • • Reduce | Target includes upstream supplychain Tier 4 | 2023 | 97% | 99% | The WWF biodiversity risk filter was used to identify high-impact areas, focusing on cotton and MMCF production as well as use and quality. No ecological thresholds were used in setting this target. Target Feedback on target setting and possible gaps were WWF in Sustainable Fashion Acadamy's course Biodiversity Program" |
Report of the Board of Directors
110
Lindex division/ Stockmann division/ Group | Related policy and brief description of relation to the objective | Target | Frameworks or conclusive scientific evidences the based on | Scope of the target | Target baseline year | Target baseline value | Results 2024 | Additional information |
Lindex division | Group’s Human Rights Policy. The target directly linked to objective of communities and access to clean water and minimise impact on land. | By 2030, circular business models and services such as recommerce, rental, or repair services will 5% of Lindex division’s total revenue. | Lindex division’s sustainability targets and they are designed in accordance with recognised international standards, such those of the Textile and the principles of hierarchy, as well as scientific research conducted by the Ellen McArthur foundation regarding circular business models. | Target includes the entire Valuechain (upstream, own oper- ations and down- stream) | 2024 | 0.02% | 0.02% | Through collaboration with industry partners and stakeholders, Lindex division is committed to driving innovation and these targets as part of its circular economy initiatives. Progress is reviewed and monitored regularly to ensure transparency and alignment with Result from circular business where sales can be followed besides sales of other This is a part of the "budget hierarchy" in RMS. |
The Stockmann division has not yet set targets related to affected communities, as the topic was newly identified during the 2024 double materiality assessment process, with plans to define
these targets further in the future.
Report of the Board of Directors
111
S4
Consumers and
end-users
S4–1
Policies related to consumers and end-users
Lindex Group has adopted policies to manage material
impacts, risks and opportunities related to consumers
and end-users. These policies, the Consumer and End-
User Policy, Human Rights Policy, and Speak-Up Policy,
outline Lindex Group’s approach to protecting consumer
rights and aligning with their values, supporting a positive
and loyal customer base. The general descriptions of the
Human Rights Policy and Speak-Up Policy can be found in
subchapter
S1-1 Policies related to own workforce.
Through the policy commitments, the Group is dedicated to
ensuring that the human rights of the consumers and end-
users are respected in every channel and market in which it
operates. While the policies cover many areas related to the
rights of the consumer, this chapter focuses on the topics
material to Lindex Group, which are the right to health and
safety, and the right to be free from discriminatory practices:
•
health and safety by ensuring the products meet or
exceed industry standards through safety checks and
chemical tests, particularly benefiting consumers such
as parents purchasing for their children.
•
supported by offering diverse and accessible products,
a commitment to inclusive marketing, and regular
adaptations based on customer feedback. The Group
is committed to ensuring that its marketing campaigns
and promotional materials reflect the diverse
communities it serves, and do not uphold stereotypes.
Efforts are also made to ensure the accessibility of the
Group’s websites and apps.
Lindex Group’s Consumer and End-User Policy aligns with
internationally recognised standards, including:
•
rights.
•
and World Federation of Advertisers’ global principles:
Focusing on ethical, inclusive, and accurate marketing.
•
children’s rights, product safety, and age-appropriate
marketing.
•
consumer data protection.
No cases of non-respect of the UN Guiding Principles
on Business and Human Rights, ILO Declaration on
Fundamental Principles and Rights at Work or OECD
Guidelines for Multinational Enterprises were reported in the
downstream value chain.
To
ensure responsiveness to customer needs, the Group
has put in place mechanisms such as surveys and customer
service channels, fostering a culture of improvement and
customer-centric innovation. The insights gathered from
these channels were considered when setting the Consumer
and End-User Policy. With a specific focus on the needs
of women and children, to enable remedy for human
rights impacts, there are dedicated channels like customer
service and a speak -up portal that reinforce Lindex Group’s
commitment to consumer rights.
S4–2
Processes for engaging with consumers and
end-users about impacts
Lindex Group engages directly with consumers and end-
users to consider their perspectives when making decisions
and developing activities aimed at managing actual and
potential impacts. As outlined in its Consumer and End-User
Policy, Lindex Group continually develops its offering to
meet the needs of its diverse customer base by considering
feedback from all customer demographics. The feedback
is used to improve existing products and develop new
ones that address specific needs or gaps in the market
that are relevant to the Group’s overall offering. The policy
highlights:
•
customers through customer service, social media,
and regular surveys, gathering and acting on feedback
to address their needs and concerns.
•
regulations, transparent data practices, and respect for
consumer data-sharing preferences are prioritised.
•
clearly about products and sustainable practices, and
provides consumers with accurate information.
•
enables resolution through repairs, replacements or
compensation as necessary.
•
to report misconduct or raise concerns via the Group’s
speak-up portal
Engagement is ongoing and occurs across several
stages, including during complaints of faulty goods,
suspected product-related damage, or other instances
when customers wish to share feedback. Engagement can
happen in-store, via customer service, or through other
channels at the time of purchase, pre-purchase, or post-
Report of the Board of Directors
112
purchase. The effectiveness of engagement is ensured
with frequent customer surveys to gather feedback and
measure customer experience, and mechanisms to process
and analyse complaints, described in subchapter
S4-3
Processes to remediate negative impacts and channels for
consumers and end-users to raise concerns.
At Stockmann division, the Chief Commercial Officer holds
operational responsibility for ensuring engagement with
consumers and that feedback informs company decisions
and improvements. At Lindex division, the Chief Brand and
Product Officer shares this responsibility with the Chief
Commercial Officer.
Risk assessment routines consider the needs of vulnerable
groups, such as children, focusing on factors like weight,
height, age-related abilities, physical and mental maturation,
and potential product misuse. This approach ensures
that product safety aligns with the specific needs and
characteristics of these consumers.
S4–3
Processes to remediate negative impacts and
channels for consumers to raise concerns
Lindex Group has established a process to address and
remediate negative impacts on consumers and end-users
resulting from its products, and this is outlined in the
Speak-Up Policy. This process includes multiple channels
through which customers can report complaints and
personal injuries directly to store staff, through an online
speak-up portal, or by contacting customer service via
letter, email, or telephone. Lindex Group’s speak-up portal
is available for all stakeholders to anonymously report
concerns.
Complaints are carefully assessed to determine their
nature and documented to ensure traceability. A range
of solutions is offered to resolve issues, including repair,
product exchange, price reduction, purchase cancellation,
or compensation for costs associated with medical visits,
medication, or any incurred personal or property damage.
The Group does not assess the effectiveness of remedy,
but its process enables dialogue with the individual raising
the concern, from the receipt of the report until the closure
of the case.
To
improve quality and safety, all complaints
and claims are logged to identify trends and patterns, and
regular analyses are conducted to enhance product safety
and quality standards. While Lindex Group’s policy does not
specifically extend these processes to business partners, it
emphasises direct consumer interaction as a primary focus.
To
assess whether customers are aware of and trust
these processes, the Group comprehensively documents
the complaints and implements frequent surveys to
gather feedback on consumer experience and trust in the
company’s processes for addressing concerns. Marketing
and communication materials aim to provide accurate and
transparent information about the processes available
to consumers, while transparent communication and
engagement on social media platforms further build trust
and awareness of these channels. Lindex Group prohibits
retaliation against individuals raising concerns, as described
in subchapter
G1-1 Corporate culture and business conduct
policies and corporate culture.
Employee training programmes for staff in product,
marketing, and sales roles ensure that they are well-
equipped to handle and respond to consumer needs,
further reinforcing customer confidence in Lindex Group’s
processes and channels for addressing issues.
S4–4
Taking action on material impacts on consumers
and end-users, and approaches to managing
material risks and pursuing material
opportunities related to consumers and end-
users, and effectiveness of those actions
The Lindex Group actively addresses material impacts
risks and opportunities related to consumers by focusing
on key actions for enhancing product safety and promoting
diversity and inclusivity within the brands and products. The
actions have been established to safeguard consumers
and mitigate the related risks to Group’s reputation. The
actions promoting inclusivity in product development and
communication are one of the Group’s ways to positively
contribute to consumers’ self-esteem, while increasing
customer loyalty, maintaining diverse representation, and
brand appeal across various consumer segments.
Lindex Group’s actions:
•
own brand products undergo thorough testing
to ensure they meet or exceed industry safety
standards, particularly regarding chemical content
and child safety, supported by third-party and internal
assessments. For other products at the Lindex
division, and for all products at the Stockmann
division, suppliers are responsible for ensuring the
quality and safety. Special attention is paid to ensuring
that children’s garments are safe to wear. Safety is
considered throughout the entire process from design
to the finished product, and the requirements are
laid out in specific product safety instructions. Lindex
Group’s children’s clothes follow the requirements in
the European standard regarding children’s safety,
and to ensure this, it has in place a regularly updated
Report of the Board of Directors
113
checklist throughout the entire production chain.
The Group’s internal quality and testing teams are
responsible for ensuring that the processes are being
followed.
•
inequities, Lindex Group’s campaigns avoid
stereotypes and reflect a wide range of consumer
experiences, supporting diversity and empowerment.
To ensure digital accessibility, Lindex Group’s websites
and apps are designed to be accessible for users with
disabilities, allowing all consumers to make informed
choices.
•
campaigns reflect a wide range of consumer
experiences, supporting diversity and empowerment.
The Lindex division’s products are designed to
support women through various life stages, such as
menstruation and menopause, and campaigns portray
a broad representation of beauty and diversity. Also,
the Stockmann division’s wide offering is curated to
meet diverse consumer needs.
•
respond to customer wishes about a more inclusive
selection. To include more body shapes, the Lindex
division has designed adjustable waists for both
children’s and women’s clothes and has taken actions
to expand the size ranges in its lingerie offering. In
2024, the Stockmann division developed its plus-size
clothing selection by launching a new collection based
on customer needs.
These actions are ongoing and regularly refined based
on consumer feedback and regulatory changes. The
work around inclusivity and customer engagement is
continually evolving in line with consumer needs and
social expectations. The Lindex division regularly carries
out surveys on consumers to find out their views of body
positivity and inclusivity, integrating their insights to refine its
approach. The Stockmann division has carried out research
in Finland to understand the dressing and shopping
behaviour of customers using the plus-size clothing
selection.
The presented actions do not require significant operational
(OpEx) or capital (CapEx) expenditures beyond the
company’s regular budget. Social inclusion campaigns are
part of the Lindex division’s standard marketing activities,
without the need for extra operational or capital expenses.
The Stockmann division’s work on inclusion is still under
development and does not yet require any additional
resources.
To address consumer feedback or potential concerns, and
track the effectiveness of related actions, Lindex Group
documents and analyses all complaints, noting patterns
and areas for improvement. Issues are evaluated in-depth,
with corrective actions aligned to the nature of each
case, ranging from repairs and exchanges to refunds or
compensations.
For cases where consumers experience harm, Lindex
Group responds through:
•
consumers, offering apologies and explanations.
•
appropriate, ensuring transparency and objectivity.
•
affected consumers as a gesture of goodwill.
Lindex Group maintains multiple channels for consumer
feedback, ensuring traceability and prompt response.
If a product poses any risk, a thorough root cause
analysis identifies required actions, which could include
a recall, product improvement, or corrective measures
for consumers. To prevent any consumer impact from the
company’s practices, rigorous quality checks and safety
controls are part of each production phase. Strict adherence
to regulatory standards and detailed risk assessments,
especially for children’s products, further reduce potential
risks. No severe human rights issues or incidents connected
to consumers have been reported in the year 2024.
The effectiveness of actions at the Lindex division is
monitored with customer feedback. The Lindex division’s
customer surveys show that among its competitors, it is
rated to be one of the most inclusive companies for all
women that also contributes to their higher self-esteem and
body positivity. At the Stockmann division, the effectiveness
of actions is not yet being tracked.
S4–5
Targets related to managing material negative
impacts, advancing positive impacts, and
managing material risks and opportunities
The Group has not yet set any measurable, outcome-
oriented targets to manage material impacts, risks and
opportunities related to consumers and end-users.
In the area of social inclusion, the development of targets
and KPIs is in progress, with an anticipated completion
by the end of 2025. The monitoring of the action’s
effectiveness is described in subchapter
S4-4 Taking
action on material impacts on consumers and end-users,
and approaches to managing material risks and pursuing
material opportunities related to consumers and end-users,
and effectiveness of those actions.
Report of the Board of Directors
114
GOVERNANCE
INFORMATION
G1
Business conduct
G1–1
Business conduct policies and corporate culture
Lindex Group’s business conduct is outlined in its Code
of Conduct. It defines the principles for compliance with
legislation, international treaties and recommendations, free
competition and consumer rights, employees and working
conditions, environment, and the prevention of corruption
and conflicts of interest. The higher purpose of the Lindex
division is to empower and inspire women everywhere,
which guides the division in its everyday work, from design
and decision-making to its sustainability strategy.
Lindex Group’s business conduct is further defined in
separate policies, such as Speak-Up, Environmental,
Human Rights, Consumer and End-user, Disclosure
and Anti-Corruption Policies. These policies support the
Group’s employees in making decisions aligned with ethical
standards. The general description of the Environmental
Policy can be found in sub-chapter
E1-2 Policies related
to climate change mitigation and adaptation,
the Human
Rights Policy and Speak -Up Policy in subchapter
S1-1
Policies related to own workforce,
and the Consumer and
End-User Policy in subchapter
S4-1 Policies related to
consumers and end-users.
At Lindex Group, Stockmann division offers training in its
business conduct by providing an e-learning module on
the Code of Conduct for new personnel when they enter
the division. The training module was launched at the end
of 2023. In 2024, 70% of the employees who entered the
division during the year in Finland and 100% in Latvia,
completed the learning module. The module is not in use in
Estonia. The division’s target is for 100% of its employees
in all countries to complete the module. The e-learning
module is mandatory for all new employees. Lindex division
does not currently provide training in the Group Code of
Conduct, however the process to update the Division Code
of Conduct is in place and includes an implementation and
training plan for the Lindex Division.
The Group develops and promotes its corporate culture
by actively leading and working in line with its values, as
the divisions’ purpose and values are the foundation of the
Group’s corporate culture. The Group’s corporate culture is
evaluated in frequent employee surveys and by monitoring
the reports submitted to the speak-up portal.
Lindex Group encourages all its employees, suppliers,
partners, public authorities, customers, and other
stakeholders to report any misconduct or raise concerns
through its speak-up portal, in line with its Speak-Up
Policy and in accordance with the EU whistleblowing
directive. The Speak -Up Policy outlines key principles that
guide whistleblowing reporting and investigation and the
protection of whistleblowers: confidentiality, non-retaliation
fair treatment and no malicious or false reports. The
Speak-Up Policy and speak-up portal are accessible for
all stakeholders on the Group’s website and intranet. The
online portal is provided by an external partner WhistleB,
Whistleblowing Centre, but the cases are handled by
the Group’s case handlers. To ensure anonymity, the
communication channel is encrypted, and password
protected. The Group does not currently provide training
about whistleblowing to its employees.
Lindex Group strictly prohibits retaliation against any
individual who makes a good-faith report of suspected
misconduct or participates in an investigation. Retaliation
against individuals raising concerns under the Speak-Up
Policy will not be tolerated and may result in disciplinary
action, up to and including termination of the employment
or contractual relationship. Measures to protect against
retaliation include clearly defined process for investigation
of concerns and anonymisation of documentation.
Reported concerns are handled by case handlers at
Lindex Group Security, HR, Sustainability, Legal and/or
Internal Audit. The case handlers also have a mandate
to initiate investigations independently, without the
involvement of management, and formulate conclusions
from the investigation. Upon receiving a reported concern,
investigations are conducted promptly, objectively, and
with respect for the rights of all parties involved. Access to
the reports and information relating to an investigation is
restricted to the individuals carrying out the investigation
and information may be communicated further only on
a strict need-to-know basis and only for the purpose of
carrying out the investigation and enforcement purposes.
Lindex Group’s Anti-Corruption Policy is consistent with the
United Nations Convention against Corruption. The Group
takes a zero-tolerance approach to all forms of bribery and
corruption.
Report of the Board of Directors
115
During 2025, Lindex Group plans to implement the updated
Lindex Group Anti-Corruption Policy and to systemise
anti-corruption measures across the organisation,
including implementation of anti-bribery and corruption
training programmes for functions deemed to be at higher
risk of corruption and bribery, e.g. finance, purchasing,
procurement and contracting.
G1–2
Management of relationships with suppliers
Lindex Group is committed to responsible and ethical
sourcing, which means acquiring products and services
from suppliers while considering their potential impacts
on human rights and the environment. The Group seeks
long-term partnerships with suppliers who share its vision
of sustainability and continuous improvement in terms
of sustainability. To promote fair practices, the company
has established clear internal guidelines on responsible
purchasing practices and pre-assessment processes
for supplier selection. Lindex division has a strong local
presence, with its own production offices and staff who
maintain close dialogue with suppliers and conduct frequent
factory visits, a practice that has been in place for many
years.
Lindex division has established internal guidelines on
responsible purchasing practices with the aim to ensure
that its business decisions do not negatively impact
the rights and well-being of workers in its supply chain.
As a member of the Ethical Trading Initiative (ETI),
the division is committed to the ‘Common Framework
for Responsible Purchasing Practices’, reinforcing its
dedication to fair and ethical sourcing. Another key area
of responsible procurement, that the division is working
by, is the prevention of late payments, including payments
to SMEs. The division’s responsible sourcing policy is still
in development. Stockmann division follows a policy for
making payments on time, regardless of the size of the
supplier. The division adheres to the following policies to
ensure that all suppliers, including SMEs, receive their
payments on time and without delays:
•
payment terms that are mutually accepted by both
parties.
•
automated systems to process and pay invoices,
reducing the risk of human error and speeding up
payment processes.
•
status of payments and ensures that all invoices are
processed and paid on time.
•
when necessary and informs them of any delays or
problems with payments.
To ensure alignment with the Group’s ethical and
environmental standards, including human rights
commitments, all Lindex division’s commercial goods
suppliers are required to sign the divisions’ sustainability
commitment and Supplier Code of Conduct, with zero-
tolerance issues including child labour, forced labour,
and environmental violations. Stockmann division’s new
commercial goods suppliers are required to sign the BSCI
Code of Conduct or provide a similar document outlining
their commitments. In accordance with its commitment to
the transparency pledge, Lindex division publishes contact
information of garment factories, processing units, and
fabric suppliers on both its own websites as well as on open
supply hubs.
Lindex division evaluates the performance of commercial
goods suppliers using a Business Scorecard, which
assesses quality, lead time, business performance, and
sustainability, in terms of human rights and environmental
performance. High-performing suppliers are rewarded,
and regular reviews ensure that suppliers remain aligned
with Lindex Group’s sustainability objectives. This focus on
responsible purchasing helps to support improved working
conditions at supplier facilities, with particular attention
given to key suppliers responsible for 80% of the division’s
production volume.
In addition, Lindex division conducts an ongoing and
dynamic Human Rights Due Diligence (HRDD) process
that extends across its supply chain. Stockmann division is
committed to developing its own process.
The Group conducts regular audits by using the SMETA
approach for Lindex’s suppliers and third-party audits,
such as amfori BSCI audits, for Stockmann’s suppliers.
Corrective action plans are prepared when necessary and
progress is actively monitored.
Lindex division has developed internal guidelines and
tools to support supplier planning and prevent excessive
overtime. These practices are incorporated into training
and induction programmes to ensure consistent behaviour
across the organisation.
Report of the Board of Directors
116
G1–3 — G1–4
Prevention and detection of corruption and
bribery
Lindex Group has processes in place to prevent, detect and
address allegations or incidents of corruption and bribery.
The Group has a zero-tolerance approach to bribery and
corruption, supported by its Anti-Corruption Policy, Code of
Conduct, ethical policies, Supplier Code of Conduct, and
sustainability commitments. The Anti-Corruption Policy as
well as the risk assessment was updated in 2024. Anti-
corruption policies are accessible on the Lindex Group
website and intranet. Stockmann division currently provides
training on anti-corruption and bribery as a part of its
employee onboarding process, but Lindex division does
not yet offer training on these topics. The Group’s Board
of Directors and Audit Committee have competence within
corruption and bribery, albeit no official training. The Group
is not currently able to report the percentage of functions-at-
risk covered by training programmes.
The Group’s employees, contractors and suppliers are
encouraged to report concerns through various channels,
including leaders, HR, Security, and an anonymous
speak-up portal. Lindex 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. Reports are handled with
confidentiality, investigated independently by designated
case handlers, and corrective actions are taken if
necessary.
Investigations are conducted independently by case
handlers from Security, HR, Sustainability, Legal, or Internal
Audit, without involvement from management. If the
investigation involves anyone from the investigation team,
these individuals are excluded from the process.
Findings are reported to relevant management levels based
on the concern, up to the Board of Directors when needed.
Additionally, the Audit Committee receives annual reports on
concerns raised through the speak-up and whistleblowing
system.
Lindex Group did not have any convictions or fines for
violation of anti-corruption and anti-bribery laws in 2024.
The Group was not made aware of any breaches in
procedures or standards of anti-corruption and anti-bribery.
G1–6
Payment practices
The average time Lindex division takes to pay an invoice,
from the date when the calculation of the contractual or
statutory term of payment starts, is 35.7 days. The average
time for Stockmann division is 32.9 days.
The percentage of payments of goods for sale suppliers
aligned with Lindex division’s standard payment terms of
60 days net is 97.4%. The percentage of payments aligned
to suppliers for overhead costs is 95.4%. Stockmann
division lacks standard payment terms but has based the
percentage of payments aligned with standard payment
terms on the average payment days deviation from the
payment term of each invoice. 93.5% of payments to goods
for sale suppliers is paid within the division’s standard
payment terms based on this logic, and 93.1% of payments
to suppliers for overhead costs.
Information has been compiled from financial ERP.
Deviations from standard terms occur regarding suppliers
for overhead costs due to variations in local standards, the
absence of agreements with suppliers, or the specific terms
of concluded agreements.
The Group has no outstanding legal proceedings for late
payments.
117
Financial
Statements
118
Key figures
2024 | 2023 | 2022 | 2021 | 2020 | ||
Revenue | EUR mill. | 940.1 | 951.7 | 981.7 | 899.0 | 790.7 |
Gross profit | EUR mill. | 547.9 | 554.2 | 568.3 | 527.0 | 443.7 |
Gross margin | % | 58.3 | 58.2 | 57.9 | 58.6 | 56.1 |
EBITDA | EUR mill. | 159.8 | 176.7 | 258.0 | 184.9 | 109.6 |
Adjustments to EBITDA | EUR mill. | -14.0 | -3.5 | 75.1 | 13.8 | -7.3 |
Adjusted EBITDA | EUR mill. | 173.8 | 180.2 | 183.0 | 171.1 | 116.9 |
Operating result | EUR mill. | 60.9 | 76.5 | 154.9 | 82.1 | -269.6 |
Operating margin | % | 6.5 | 8.0 | 15.8 | 9.1 | -34.1 |
Adjustments to operating result | EUR mill. | -14.0 | -3.5 | 75.1 | 13.8 | -257.3 |
Adjusted operating result | EUR mill. | 74.9 | 80.0 | 79.8 | 68.3 | -12.3 |
Net result for the period | EUR mill. | 13.2 | 51.7 | 101.6 | 47.9 | -291.8 |
Adjustments to net result for the | EUR mill. | -11.2 | 26.6 | 64.0 | 7.9 | -255.8 |
Adjusted net result for the period | EUR mill. | 24.4 | 25.1 | 37.6 | 40.0 | -36.0 |
Share capital | EUR mill. | 77.6 | 77.6 | 77.6 | 77.6 | 144.1 |
A share | EUR mill. | 61.1 | ||||
B share | EUR mill. | 77.6 | 77.6 | 77.6 | 77.6 | 83.0 |
Return on equity | % | 3.4 | 14.2 | 33.7 | 20.2 | -86.7 |
Return on capital employed | % | 6.2 | 8.1 | 15.7 | 8.0 | -20.1 |
Capital employed, average | EUR mill. | 1,065.3 | 1,004.3 | 1,005.4 | 1,059.2 | 1,237.4 |
Capital turnover rate | 0.9 | 0.9 | 1.0 | 0.8 | 0.6 | |
Inventories turnover rate | 2.3 | 2.4 | 2.4 | 2.4 | 2.6 | |
Equity ratio | % | 30.0 | 29.9 | 26.2 | 18.9 | 14.5 |
Equity ratio excluding IFRS 16 | % | 61.9 | 60.6 | 53.4 | 27.3 | 20.6 |
Net gearing | % | 145.0 | 133.2 | 135.4 | 212.8 | 340.7 |
Net gearing excluding IFRS 16 | % | -6.2 | -12.8 | -22.3 | 76.8 | 153.2 |
Capital expenditure *) | EUR mill. | 45.7 | 65.1 | 62.5 | 16.9 | 18.5 |
Share of revenue | % | 4.9 | 6.8 | 6.4 | 1.9 | 2.3 |
Interest-bearing net debt | EUR mill. | 571.4 | 521.6 | 454.4 | 570.8 | 702.5 |
Interest-bearing net debt / EBITDA | EUR mill. | 3.6 | 3.0 | 1.8 | 3.1 | 6.4 |
Interest-bearing net debt excluding | EUR mill. | -31.8 | -65.6 | -100.4 | 233.6 | 330.2 |
Total assets | EUR mill. | 1,315.7 | 1,310.2 | 1,282.9 | 1,416.5 | 1,425.3 |
Personnel expenses | EUR mill. | 208.4 | 212.5 | 212.1 | 194.6 | 181.9 |
Personnel, average | persons | 5,746 | 5,801 | 5,802 | 5,649 | 5,991 |
Average number of employees, | persons | 4,216 | 4,283 | 4,332 | 3,886 | 3,973 |
Revenue per person | EUR thousands | 163.6 | 164.1 | 169.2 | 159.1 | 132.0 |
*) excluding right-of-use assets |
Lindex 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.
119
Key figures per share
2024 | 2023 | 2022 | 2021 | 2020 | ||
Earnings per share, undiluted | EUR | 0.08 | 0.33 | 0.65 | 0.42 | -3.89 |
Adjusted Earnings per share, | EUR | 0.15 | 0.16 | 0.24 | 0.35 | -0.48 |
Cash flow from operating activities | EUR | 0.56 | 0.65 | 0.35 | 1.32 | 2.03 |
Equity per share | EUR | 2.44 | 2.47 | 2.15 | 1.74 | 2.86 |
P/E ratio of shares | ||||||
-0.3 | ||||||
32.6 | 8.8 | 3.0 | 5.1 | -0.3 | ||
Share quotation at 31.12. | EUR | |||||
1.27 | ||||||
2.69 | 2.90 | 1.97 | 2.16 | 1.16 | ||
Highest price during the period | EUR | |||||
3.59 | ||||||
3.51 | 3.03 | 3.26 | 2.44 | 3.22 | ||
Lowest price during the period | EUR | |||||
0.88 | ||||||
2.39 | 1.68 | 1.46 | 1.07 | 0.65 | ||
Average price during the | EUR | |||||
1.87 | ||||||
2.93 | 2.13 | 2.19 | 1.61 | 1.45 | ||
Share turnover | thousands | |||||
576 | 2,102 | |||||
28,294 | 47,442 | 94,830 | 90,210 | 30,258 | ||
Share turnover | % | |||||
0.5 | 6.9 | |||||
17.5 | 29.9 | 60.8 | 79.1 | 72.9 | ||
Market capitalisation at 31.12. | EUR mill. | 434.8 | 460.3 | 307.1 | 333.6 | 86.9 |
Number of shares at 31.12. | thousands | 161,623 | 158,716 | 155,880 | 154,437 | 72,049 |
30,531 | ||||||
161,623 | 158,716 | 155,880 | 154,437 | 41,518 | ||
Weighted average number | thousands | 160,359 | 157,379 | 155,189 | 114,009 | 75,102 |
Weighted diluted number of | thousands | 161,106 | 157,379 | 155,189 | 114,009 | 75,102 |
Total number | 41,055 | 42,328 | 44,289 | 45,054 | 43,656 |
120
Definition of key figures
Performance measures according to IFRS
Earnings per share, basic and diluted | Net result for the period ′ s shareholders−tax−adjusted Average number |
Alternative performance measures
Gross profit | Revenue – materials and | Capital turnover rate | Revenue Capital employed (average | |
Gross margin | Gross profit∗100 Revenue | Inventories turnover | 365 Inventories turnover | |
EBITDA | Operating result + depreciation, | Equity ratio, % | Equity total∗100 Total assets−advance | |
Adjusted EBITDA | EBITDA – adjustments, see | Equity ratio excluding IFRS 16 items, % | Equity excluding Total assets−right−of−use − advance payments | |
Adjusted operating result | Operating result – adjustments, | Interest-bearing net debt | Interest-bearing bearing receivables | |
Adjusted net result for the period | Net result for the period – comparability | Interest-bearing net debt excluding IFRS 16 items | Interest-bearing liabilities | |
Adjusted earnings per share | Adjusted net result for company ′ s shareholders−tax−adjusted Average number | Net gearing, % | Interest−bearing Equity total | |
Return on equity, | Net result for the Equity total (average | Net gearing excluding IFRS 16 items, % | Interest−bearing Equity excluding | |
Capital employed | Total assets – deferred liabilities | Operating free cash flow | Adjusted EBITDA – lease – capital expenditure | |
Return on capital employed, % | ( Result before taxes+interest ) ∗100 Capital employed (average |
121
Key figures per share
Equity per share | Equity attributable to the parent ′ s shareholders Number of shares on the | Share turnover | Number of shares traded | |
Cash flow from operating activities per share | Cash flow from operating Average number by the company | Market capitalisation | Number of shares multiplied by respective share series | |
P/E ratio of share | Share quotation on balance Earnings per share |
122
Items affecting comparability
Lindex Group 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 adjustments for items affecting comparability. These items include 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 adjustments for items affecting comparability after tax impact. These items include 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, and disputed, conditional, or maximum restructuring debt. The tax impact is calculated on the transaction level and includes changes in deferred taxes. Additionally, the
adjustments to the net result include tax income and expenses resulting from settlements of tax disputes.
123
EUR mill. | 2024 | 2023 | 2022 | 2021 | 2020 |
EBITDA | 159.8 | 176.7 | 258.0 | 184.9 | 109.6 |
Adjustments to EBITDA | |||||
Costs related to restructuring | 10.9 | 2.6 | 19.7 | 2.0 | 5.3 |
Costs related to strategic and | 7.5 | 2.3 | 0.4 | 0.2 | 2.0 |
Insurance claim settlement for | -4.4 | ||||
Loss on disposal of subsidiary | 0.6 | ||||
Other operating income from | -2.1 | ||||
Gain on sale of real estate | -95.4 | -21.7 | |||
Costs related to the war in Ukraine | 0.5 | ||||
Employee insurance refund | -0.3 | -3.0 | |||
Income and costs related to | 8.7 | ||||
Adjustments total | 14.0 | 3.5 | -75.1 | -13.8 | 7.3 |
Adjusted EBITDA | 173.8 | 180.2 | 183.0 | 171.1 | 116.9 |
Operating result (EBIT) | 60.9 | 76.5 | 154.9 | 82.1 | -269.6 |
Adjustments to operating result | |||||
Costs related to restructuring | 10.9 | 2.6 | 19.7 | 2.0 | 5.3 |
Costs related to strategic and | 7.5 | 2.3 | 0.4 | 0.2 | 2.0 |
Insurance claim settlement for | -4.4 | ||||
Loss on disposal of subsidiary | 0.6 | ||||
Other operating income from | -2.1 | ||||
Gain on sale of real estate | -95.4 | -21.7 | |||
Costs related to the war in Ukraine | 0.5 | ||||
Employee insurance refund | -0.3 | -3.0 | |||
Income and costs related to | 8.7 | ||||
Goodwill impairment | 250.0 | ||||
Adjustments total | 14.0 | 3.5 | -75.1 | -13.8 | 257.3 |
Adjusted operating result (EBIT) | 74.9 | 80.0 | 79.8 | 68.3 | -12.3 |
Net result for the period | 13.2 | 51.7 | 101.6 | 47.9 | -291.8 |
Adjustments to net profit/loss | |||||
Costs related to restructuring | 10.9 | 2.6 | 19.7 | 2.0 | 5.3 |
Costs related to strategic and | 7.5 | 2.3 | 0.4 | 0.2 | 2.0 |
Insurance claim settlement for | -4.4 | ||||
Loss on disposal of subsidiary | 0.6 | ||||
Other operating income from | -2.1 | ||||
Gain on sale of real estate | -95.4 | -21.7 | |||
Costs related to the war in Ukraine | 0.5 | ||||
Employee insurance refund | -0.3 | -3.0 | |||
Income and costs related to | 8.7 | ||||
Goodwill impairment | 250.0 | ||||
Income taxes | -2.8 | -30.1 | 23.6 | 5.9 | -1.5 |
Adjustments total | 11.2 | -26.6 | -51.5 | -7.9 | 255.8 |
Adjusted net result for the period | 24.4 | 25.1 | 50.2 | 40.0 | -36.0 |
124
Shares and share capital
Lindex Group 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 LINDEX and ISIN number is FI0009000251.
The company’s share capital on 31 December 2024 was EUR 77 556 538 and number of shares was 161 622 896.
The number of registered shareholders was 41 055 (42 328 shareholders on 31 December 2023).
The company’s market capitali sation on 31 December 2024 was EUR 434.8 million (EUR 460.3 million on 31 December 2023).
Number of shares, 31 December 2024 | |||
Number | Shareholders % | Percentages of shares and votes | |
1-100 | 25,804 | 62.9 | 0.6 |
101-1000 | 11,597 | 28.3 | 2.6 |
1001-10000 | 3,160 | 7.7 | 5.6 |
10001-100000 | 420 | 1.0 | 7.3 |
100001-1000000 | 58 | 0.1 | 9.7 |
1000001- | 16 | 0.0 | 74.2 |
Total | 41,055 | 100 | 100 |
Ownership structure, 31 December 2024 | |||
Number | Shareholders % | Percentages of shares and votes | |
Households | 39,982 | 97.4 | 17.8 |
Private and public corporations | 697 | 1.7 | 30.2 |
Nominee registrations (incl. foreign | 189 | 0.5 | 27.3 |
Foundations and associations | 152 | 0.4 | 21.5 |
Financial and insurance companies | 35 | 0.1 | 3.2 |
Total | 41,055 | 100 | 100 |
125
Major shareholders, 31 December 2024 | ||
Percentages of shares and votes | ||
1 | Nordic Retail Partners Jv Ky | 14.8 |
2 | Varma Mutual | 8.2 |
3 | Society of Swedish Literature in | 7.2 |
4 | Etola Group | 4.9 |
5 | Hc Holding Oy Ab | 4.0 |
6 | Niemistö Kari Pertti Henrik | 3.1 |
7 | Samfundet Folkhälsan i Svenska | 1.7 |
8 | Ilmarinen Mutual Pension Insurance | 1.2 |
9 | eQ Nordic Small Cap Mutual | 1.1 |
10 | Nordika Ii Shq Oy | 1.0 |
11 | Jenny and Antti Wihuri Foundation | 0.9 |
12 | Kaloniemi Markku | 0.5 |
13 | Lahitapiola Keskustakiinteistot Ky | 0.5 |
14 | Elo Mutual Pension Insurance Company | 0.5 |
15 | LähiTapiola | 0.4 |
16 | Sijoitusrahasto Eq Eurooppa Pienyhtiö | 0.4 |
17 | Mandatum Life Insurance Company | 0.4 |
18 | Säästöpankki Small Cap Mutual | 0.4 |
19 | Wilhelm och Else Stockmanns | 0.3 |
20 | Proprius Partners Micro Finland | 0.2 |
Other | 48.3 | |
from which Nominee registered shares | 27.1 | |
Total | 100.0 | |
126
Consolidated Financial Statements
Consolidated Income Statement | |||
EUR mill. | Note | 1.1.-31.12.2024 | 1.1.-31.12.2023 |
REVENUE | 2.2 | ||
Other operating income | 2.2 | ||
Materials and services | 2.3 | - | - |
Employee benefit expenses | 2.5, 5.5, 5.6 | - | - |
Depreciation, amortisation and impairment losses | 3.1 | - | - |
Other operating expenses | 2.6 | - | - |
Total expenses | - | - | |
OPERATING | 2.1 | ||
Financial income | 4.1 | ||
Financial expenses | 4.1 | - | - |
Total financial | - | - | |
PROFIT/LOSS BEFORE TAX | |||
Income taxes | 2.7 | - | |
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, basic | |||
From the period result, diluted | |||
Consolidated Statement of Comprehensive Income | |||
EUR mill. | Note | 1.1.-31.12.2024 | 1.1.-31.12.2023 |
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 | - | ||
Exchange differences on translating foreign operations, net of tax | 2.7, 4.12 | - | |
Cash flow hedges, before tax | - | ||
Cash flow hedges, net of tax | 2.7, 4.12 | - | |
Other comprehensive income period, net of tax | - | ||
TOTAL FOR THE PERIOD | - | ||
Total comprehensive attributable to: | |||
Equity holders of the parent company | - | ||
127
Consolidated Statement of Financial Position
EUR mill. | Note | 31.12.2024 | 31.12.2023 |
ASSETS | |||
NON-CURRENT ASSETS | |||
Intangible assets | |||
Goodwill | |||
Trademark | |||
Intangible rights | |||
Other intangible assets | |||
Advance payments and construction progress | |||
Intangible assets, total | 3.2 | ||
Property, plant | |||
Land and water | |||
Machinery and equipment | |||
Modification and renovation expenses for leased premises | |||
Right-of-use assets | 3.5 | ||
Advance payments and construction progress | |||
Property, plant | 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 |
EUR mill. | Note | 31.12.2024 | 31.12.2023 |
EQUITY AND LIABILITIES | |||
EQUITY | |||
Share capital | |||
Invested unrestricted equity fund | |||
Other funds | - | ||
Translation reserve | - | - | |
Retained earnings | |||
Equity attributable to equity holders of the parent company | 4.12 | ||
EQUITY, | |||
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, | |||
CURRENT LIABILITIES | |||
Current interest-bearing financing liabilities | 4.6 | ||
Current lease liabilities | 4.6 | ||
Trade payables and other 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 | |||
128
Consolidated Cash Flow Statement
EUR mill. | Note | 1.1.-31.12.2024 | 1.1.-31.12.2023 |
CASH FLOWS FROM OPERATING | |||
Profit/loss for the period | |||
Adjustments for: | |||
Depreciation, amortisation and | |||
Gains (-) and losses (+) of disposals | - | ||
Interest and other financial expenses | |||
Interest income | - | - | |
Income taxes | - | ||
Other adjustments | |||
Working capital changes: | |||
Increase (-) /decrease (+) in | - | ||
Increase (-) / decrease (+) in | - | ||
Increase (+) / decrease (-) | - | - | |
Interest expenses paid | - | - | |
Interest received from operating | |||
Income taxes paid from operating | - | - | |
Net cash from operating activities | |||
CASH FLOWS FROM INVESTING | |||
Purchase of tangible and intangible | - | - | |
Security deposit | - | - | |
Investments in subsidiary shares | - | ||
Other investments | - | ||
Net cash used in investing | - | - | |
CASH FLOWS FROM FINANCING | |||
Proceeds from non-current liabilities | |||
Payment of lease liabilities | - | - | |
Net cash used in financing | - | - | |
NET INCREASE/DECREASE IN | - | - | |
Cash and cash equivalents | |||
Net increase/decrease in cash | - | - | |
Effects of exchange rate fluctuations | - | - | |
Cash and cash equivalents | 4.4 |
129
Consolidated Statement of Changes in Equity
EUR mill. | Share capital | Invested unrestricted equity fund | Hedging reserve | Other reserves | Translation differences | Retained earnings | Equity attributable to shareholders total | Total |
EQUITY 1.1.2024 | - | - | ||||||
Profit/loss for the period | ||||||||
Exchange differences on translating operations *) | - | - | - | |||||
Cash flow hedges *) | ||||||||
Total comprehensive net of tax | - | - | - | |||||
Share issue to creditors for unsecured restructuring debt | ||||||||
Share-based payments **) | ||||||||
Other changes in equity total | ||||||||
EQUITY 31.12.2024 | - | |||||||
*) Notes 2.7, 4.12 | ||||||||
**) Note 5.6 |
EUR mill. | Share capital | Invested unrestricted equity fund | Hedging reserve | Other reserves | Translation differences | Retained earnings | Equity attributable to total | Total |
EQUITY 1.1.2023 | - | - | ||||||
Profit/loss for the period | ||||||||
Exchange differences on translating operations *) | ||||||||
Cash flow hedges *) | - | - | - | |||||
Total comprehensive net of tax | - | |||||||
Share issue to creditors for unsecured restructuring debt | ||||||||
Share-based payments **) | ||||||||
Other changes | - | |||||||
Other changes in equity total | ||||||||
EQUITY 31.12.2023 | - | - | ||||||
*) Notes 2.7, 4.12 | ||||||||
**) Note 5.6 |
130
Notes to the consolidated financial statements
1 Basis of preparation ................................ ................................ ................................ ................................ ................................ ................................ ......................... 132
1.1 Corporate information ................................ ................................ ................................ ................................ ................................ ................................ ............. 132
1.2 General ................................ ................................ ................................ ................................ ................................ ................................ ................................ .... 132
1.3 New and amended standards and interpretations ................................ ................................ ................................ ................................ ................................ .... 132
1.4 Corporate restructuring programme................................ ................................ ................................ ................................ ................................ ......................... 132
1.5 Transactions resulting from the corporate restructuring programme ................................ ................................ ................................ ................................ ....... 133
1.6 Accounting judgements, estimates and assumptions ................................ ................................ ................................ ................................ ................................ 133
1.7 Geopolitical uncertainty ................................ ................................ ................................ ................................ ................................ ................................ ........... 134
1.8 Business continuity ................................ ................................ ................................ ................................ ................................ ................................ ................... 134
1.9 Principles of consolidation ................................ ................................ ................................ ................................ ................................ ................................ ........ 135
1.10 Items denominated in foreign currency ................................ ................................ ................................ ................................ ................................ .................... 135
2 Key numbers ................................ ................................ ................................ ................................ ................................ ................................ ................................ .... 136
2.1 Segment information................................ ................................ ................................ ................................ ................................ ................................ ................ 136
2.2 Operating income ................................ ................................ ................................ ................................ ................................ ................................ ..................... 137
2.3 Gross margin ................................ ................................ ................................ ................................ ................................ ................................ ............................ 138
2.4 Inventories ................................ ................................ ................................ ................................ ................................ ................................ ............................... 139
2.5 Employee benefits ................................ ................................ ................................ ................................ ................................ ................................ .................... 139
2.6 Other operating expenses ................................ ................................ ................................ ................................ ................................ ................................ ........ 140
2.7 Income taxes ................................ ................................ ................................ ................................ ................................ ................................ ............................ 140
2.8 Deferred tax assets and deferred tax liabilities ................................ ................................ ................................ ................................ ................................ ......... 142
3 Intangible and tangible assets and leasing arrangements ................................ ................................ ................................ ................................ ................................ . 144
3.1 Depreciation, amortisation and impairment losses ................................ ................................ ................................ ................................ ................................ ... 144
3.2 Goodwill and other intangible assets ................................ ................................ ................................ ................................ ................................ ........................ 144
3.3 Property, plant and equipment................................ ................................ ................................ ................................ ................................ ................................ . 148
3.4 Investment property ................................ ................................ ................................ ................................ ................................ ................................ ................ 150
3.5 Leases ................................ ................................ ................................ ................................ ................................ ................................ ................................ ...... 150
4 Capital structure ................................ ................................ ................................ ................................ ................................ ................................ .............................. 153
4.1 Financial income and expenses ................................ ................................ ................................ ................................ ................................ ................................ . 153
4.2 Financial instruments ................................ ................................ ................................ ................................ ................................ ................................ ............... 153
4.3 Current receivables ................................ ................................ ................................ ................................ ................................ ................................ .................. 154
4.4 Cash and cash equivalents ................................ ................................ ................................ ................................ ................................ ................................ ........ 154
4.5 Non-current liabilities ................................ ................................ ................................ ................................ ................................ ................................ ............... 155
131
4.6 Current liabilities ................................ ................................ ................................ ................................ ................................ ................................ ...................... 155
4.7 Reconciliation of liabilities arising from financing activities ................................ ................................ ................................ ................................ ....................... 156
4.8 Financial risk management ................................ ................................ ................................ ................................ ................................ ................................ ....... 156
4.9 Derivative contracts ................................ ................................ ................................ ................................ ................................ ................................ ................. 161
4.10 Financial assets and liabilities by measurement category and hierarchical classification of fair values ................................ ................................ ...................... 162
4.11 Financial instruments subject to netting arrangements ................................ ................................ ................................ ................................ ............................ 163
4.12 Shareholders’ equity ................................ ................................ ................................ ................................ ................................ ................................ ................ 163
4.13 Earnings per share ................................ ................................ ................................ ................................ ................................ ................................ .................... 164
5 Other notes................................ ................................ ................................ ................................ ................................ ................................ ................................ ...... 165
5.1 Group companies ................................ ................................ ................................ ................................ ................................ ................................ ..................... 165
5.2 Joint arrangements................................ ................................ ................................ ................................ ................................ ................................ ................... 166
5.3 Provisions ................................ ................................ ................................ ................................ ................................ ................................ ................................ . 166
5.4 Contingent liabilities ................................ ................................ ................................ ................................ ................................ ................................ ................. 167
5.5 Related party disclosures ................................ ................................ ................................ ................................ ................................ ................................ .......... 167
5.6 Share-based incentives ................................ ................................ ................................ ................................ ................................ ................................ ............. 168
5.7 Climate-related matters ................................ ................................ ................................ ................................ ................................ ................................ ........... 170
5.8 Events after the reporting period ................................ ................................ ................................ ................................ ................................ ............................. 170
132
1 Basis of preparation
1.1
Corporate information
The consolidated financial statements of
(collectively Lindex Group or the Group) for the year ended 31 December 2024 were
authorised for issue in accordance with a resolution of the Board of Directors on 6 March
2025.
Lindex Group.
.
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.lindex -group.com or
from the parent company.
1.2 General
Lindex Group’s consolidated financial statements have been prepared in accordance with
IFRS Accounting Standards, complying with the IAS and IFRS standards and IFRIC and
SIC interpretations in force on 31 December 2024. In the Finnish accounting legislation
and the regulations issued pursuant to it, IFRS Accounting Standards 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.
millions of euros.
Lindex Group issues a financial review complying with the ESEF requirements on its
website. In addition, Lindex 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.
1.3
New and amended standards and interpretations
On 1 January 2024, Lindex Group adopted the following amendments to the accounting
standards issued by the IASB and endorsed by the EU:
• Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback
• Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
• Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7
The amendments did not have a material impact on Lindex Group’s financial statements.
The Group has not early adopted any other standard, interpretation or amendment that
has been issued but is not yet effective:
●
●
●
The Group intends to adopt th e new and amended standards and interpretations, if
applicable, when they become effective and endorsed by the EU. The adoption of IFRS
18 may have an impact on the Group’s financial statements in future periods. The
Amendment to IAS 21 and the new standard IFRS 19 are not expected to have an impact
on the Group’s financial statements when adopted.
1.4
Corporate restructuring programme
In a decision on 9 February 2021, the Helsinki District Court approved Lindex Group plc’s
restructuring programme, and the restructuring proceedings were ended. The
restructuring programme is based on the continuation of Stockmann department store
operations, the sale and leaseback of the department store properties located in Helsinki,
133
Tallinn and Riga and the continuation of Lindex’s business operations as a fixed part of
the Lindex 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 a bond of EUR 73.1 million. At the end of December 2024, there
was one remaining disputed claim regarding the
termination of a lease agreement that
must be settled before the restructuring process can end.
The Company’s Board of Directors decided on 25 January 2024, in accordance with the
restructuring programme and pursuant to the authorisation 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, the Company 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.
The Company’s Board of Directors decided on 19 June 2024, in accordance with the
restructuring programme and pursuant to the authori sation granted by the Annual General
Meeting, to issue 2,599,852 new shares of the Company in deviation from the
shareholders’ pre-emptive subscription rights to creditors of the Company whose
previously conditional or disputed restructuring debts under the restructuring programme
had been confirmed to their final amounts by 13 June 2024 and approved the
subscriptions made in the share issue. The subscription price in the share issue was EUR
0.9106 per share, which has been paid by setting off restructuring debt in accordance
with the restructuring programme. As a result of the share issue, the total number of
shares in the Company increased by 2,599,852 shares to a total of 161,622,896 shares.
Under the restructuring programme, Lindex Group 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 2024.
1.5
Transactions resulting from the corporate restructuring
programme
Lindex Group plc has paid all confirmed undisputed external restructuring debt, but still
has one disputed claim and undisputed conditional or maximum restructuring debt. During
the reporting period, the confirmed undisputed restructuring debt of EUR 13.2 million has
been settled with conversion to Company’s shares (EUR 2.6 million), conversion to bonds
(EUR 1.1 million) and cash payment of EUR 9.5 million.
As of the end of the reporting period, there was one remaining disputed claim amounting
to EUR 15.9 million related to the termination of a long-term lease agreement. The
administrator of the restructuring programme has disputed the claim, considering it
justified to pay 18 months’ rent for the lease instead of all the years left in the terminated
lease contract. The claim will be settled in the Court of Appeal, and the amount and the
time of realisation of the claim remain uncertain. The provision for the disputed claim
corresponds to the full amount of the remaining claim, with no contingent liability
exceeding this provision. Consequently, the contingent liability for the disputed amount
exceeding the provision has decreased from EUR 25.8 million to zero.
The Group’s financial statements reflect the implications of the restructuring programme.
All confirmed undisputed restructuring debt has been settled through conversions to
shares and bonds, as well as cash payments.
1.6
Accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the accompanying disclosures, and the
disclosure of contingent liabilities. Uncertainty about these assumptions and estimates
134
could result in outcomes that require a material adjustment to the carrying amount of
assets or liabilities affected in future periods.
In the process of applying the Group’s accounting policies, management has made
various judgements. The Group has based its assumptions and estimates on parameters
available when the consolidated financial statements were prepared. Existing
circumstances and assumptions about future developments, however, may change due to
market changes or circumstances arising that are beyond the control of the Group. Such
changes are reflected in the assumptions when they occur.
Management has assessed that the most significant effects on the amounts recognised in
the consolidated financial statements are particularly related to business continuity,
valuations of assets, exercising lease options, contingent liabilities, and provisions
recognised. Management has also exercised judgement in the consolidation of structured
entities, particularly in determining control and assessing the impact on the consolidated
financial statements. The principal assumptions concerning the future and the main
uncertainties relating to estimates at the end of the reporting period, which constitute a
significant risk of causing a material change in the carrying amounts of assets and
liabilities within the next financial year, include the value of right-of-use assets and lease
liabilities, depreciation and leasing periods, demand for inventories and inventory turnover
rate, as well as the impairment testing of Lindex segment’s goodwill and the brand. More
detailed information on these is provided in Notes 2.4, 3, and 5.3.
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.
1.7
Geopolitical uncertainty
In response to the war in Ukraine, Lindex Group removed products of Russian and
Belarusian origin from sale in February 2022. The Group also discontinued selling
merchandise to its Russian licensee, Debruss. The impact of the war in Ukraine on the
Group has been limited.
1.8
Business continuity
Lindex 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 Lindex Group 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 Lindex Group 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 Group. The restructuring process is proceeding
according to plan, which means that all Stockmann department store properties have
been sold and both the secured restructuring debt and undisputed unsecured
restructuring debt have been paid. There is still one disputed claim regarding the
termination of a lease agreement that must be settled before the restructuring process
can end.
Lindex Group operates in a dynamic and complex environment that exposes the company
to a range of risks that may affect its financial performance, operations and reputation.
The Group’s key risks are related to macroeconomic factors, such as their possible
negative effects on customer behaviour and currency exchange rates. Additionally,
unexpected disruptions in the supply chain, such as delays in shipments or production
stoppages, may increase operational costs. Given the Group’s reliance on a global supply
network, unexpected logistics issues could lead to higher freight costs and longer lead
times. To manage these challenges, the management and the Board of Directors
regularly assess the operational and strategic risks associated with the current situation.
Lindex 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, Lindex 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 Lindex Group 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
135
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, Lindex Group 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.
Intercompany 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. Acquired subsidiaries are presented in the consolidated financial statements from
the moment that the Group gains control and divested subsidiaries up to the time the
control ends. Changes in the parent company’s ownership interest in a subsidiary, which
do not lead to loss of control, are dealt with as equity transactions.
A structured entity is one that has been set up so that voting rights or similar rights are
not the dominant factor in deciding who controls the entity. A structured entity, which is
designed to achieve a specific business purpose, is consolidated when the substance of
the relationship between Lindex Group and the structured entity indicates that the
structured entity is controlled by Lindex Group. Management uses judgement when
determining the accounting treatment of a structured entity. In addition to the voting rights
or similar rights, management considers other factors such as the nature of the
arrangement, contractual arrangements and level of influence with the structured entity.
A joint arrangement in which Lindex Group 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 is treated as a joint operation. The consolidated financial
statements include the Group’s share of its joint operation in its statement of financial
position as an investment property. Lindex Group does not recognise the income and
expenses of the joint operation, as it is not considered essential for the Group.
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.
136
2 Key numbers
2.1
Segment information
Accounting policies
Lindex 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 442 stores in 17 countries,
online store in 32 countries and global presence via partnerships . Lindex offers inspiring
and affordable fashion for women and children. Lindex’s range includes women’s wear,
kids’ wear, lingerie and cosmetics.
Stockmann
Stockmann is a multichannel retail company that offers a diverse and high-quality range
of fashion, cosmetics and home products. Stockmann has eight department stores in
three countries, complemented by an own online store. In the Baltics, Stockmann’s range
also includes high-quality food and beverage products.
Unallocated
Unallocated items include functions that serve the entire Lindex Group. They encompass
Corporate Management, Group Finance Management, Group Treasury, Internal Audit,
and Investor Relations.
EUR mill. | ||
Revenue | 2024 | 2023 |
Lindex | 628.8 | 633.1 |
Stockmann | 311.6 | 318.5 |
Unallocated and eliminations | -0.2 | |
Group total | 940.1 | 951.7 |
Operating profit/loss | 2024 | 2023 |
Lindex | 85.1 | 89.1 |
Stockmann | -14.2 | -5.6 |
Unallocated and eliminations | -10.0 | -7.0 |
Group total | 60.9 | 76.5 |
Financial income | 5.2 | 5.1 |
Financial expenses | -37.6 | -35.0 |
Consolidated profit/loss before | 28.6 | 46.6 |
Depreciation, amortisation and impairment | 2024 | 2023 |
Lindex | -69.7 | -72.2 |
Stockmann | -29.2 | -28.0 |
Group total | -99.0 | -100.2 |
Includes depreciation of right-of-use | ||
Capital expenditure | 2024 | 2023 |
Lindex | 114.4 | 113.4 |
Stockmann | 25.5 | 61.6 |
Group, total | 139.9 | 175.0 |
Includes investments in right-of-use | ||
Assets | 2024 | 2023 |
Lindex | 959.4 | 935.7 |
Stockmann | 356.0 | 374.1 |
Unallocated | 0.3 | 0.4 |
Group, total | 1,315.7 | 1,310.2 |
137
2.1.2
Information on market areas
The Group reports revenue, operating results, and non -current assets geographically
divided into Finland, Sweden, Norway, and other countries.
EUR mill. | ||
Revenue | 2024 | 2023 |
Finland | 313.6 | 322.0 |
Sweden*) | 329.9 | 332.1 |
Norway | 126.2 | 126.7 |
Other countries | 170.4 | 170.8 |
Group total | 940.1 | 951.7 |
Finland, % | 33.4 % | 33.8 % |
International operations, % | 66.6 % | 66.2 % |
Operating profit/loss | 2024 | 2023 |
Finland | -22.7 | -14.0 |
Sweden*) | 67.4 | 75.7 |
Norway | 6.2 | 4.7 |
Other countries | 10.0 | 10.2 |
Group total | 60.9 | 76.5 |
Non-current assets | 2024 | 2023 |
Finland | 246.2 | 252.2 |
Sweden*) | 595.6 | 587.8 |
Norway | 58.4 | 43.7 |
Other countries | 58.0 | 48.4 |
Group total | 958.2 | 932.1 |
Finland, % | 25.7 % | 27.1 % |
International operations, % | 74.3 % | 72.9 % |
*) Includes the sales of goods | ||
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 th e good or
service. Most of the Group’s operating income comes from the retail sales of goods or
services that are paid for with cash or credit card and revenue is recognised at the time of
sales. When calculating revenue, indirect taxes and discounts granted have been
deducted from the sales.
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.
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 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 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.
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2.2.1.1
Revenue
EUR mill. | 2024 | 2023 |
Merchandise revenue | 911.5 | 922.9 |
Rental income and service charges | 28.6 | 28.8 |
Total | 940.1 | 951.7 |
2.2.1.2
Disaggregated revenue information
1.1.-31.12.2024, EUR mill. | Lindex | Stockmann | Total |
Revenue streams | |||
Merchandise revenue | 628.8 | 282.9 | 911.7 |
Rental income and service charges | 28.6 | 28.6 | |
Eliminations | -0.2 | -0.2 | |
Total | 628.6 | 311.6 | 940.1 |
Market areas | |||
Finland | 78.3 | 235.3 | 313.6 |
Sweden | 329.9 | 329.9 | |
Norway | 126.2 | 126.2 | |
Other countries | 94.1 | 76.3 | 170.4 |
Total | 628.6 | 311.6 | 940.1 |
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 | |
Other countries | 95.1 | 75.8 | 170.8 |
Total | 633.1 | 318.5 | 951.7 |
2.2.1.3
Contract balances
EUR mill. | 2024 | 2023 |
Contract assets | 0.7 | 0.7 |
Contract liabilities | 5.8 | 6.2 |
No information is provided about duration of one year or less, |
2.2.2
Other operating income
Accounting policies
Among the items included in other operating income are both sale of property, plant and
equipment, and income received from the sale of a business.
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 in which the company complies with the attached conditions.
EUR mill. | 2024 | 2023 |
Insurance claim settlement for COVID-19 | 4.4 | |
Gains on sales of non-current | 2.1 | |
Electricity subsidies for companies | 0.5 | |
Total | 4.5 | 2.6 |
2.3
Gross margin
EUR mill. | 2024 | 2023 |
Revenue | 940.1 | 951.7 |
Materials and services | 392.3 | 397.5 |
Gross profit | 547.9 | 554.2 |
Gross margin, % of revenue | 58.3% | 58.2% |
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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 inventory 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 based on whether 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. | 2024 | 2023 |
Materials and consumables | 169.6 | 162.9 |
Total | 169.6 | 162.9 |
The value of inventories has |
2.5
Employee benefits
Accounting policies
Pension obligations
Pension plans are classified as defined benefit and defined contribution plans. In the
Lindex Group countries of operation, statutory and voluntary pension plans are all defined
contribution plans.
Payments for defined contribution plans are made to pension insurance companies.
Payments made for defined contribution plans are recognised as expenses in the income
statement for the financial period to which they relate.
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.
Other long-term employee benefits
Lindex Group operates a length -of-service reward system 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. | 2024 | 2023 |
Salaries and fees | 161.0 | 163.5 |
Share-based payments | 0.3 | 0.8 |
Pension expenses, defined contribution | 14.9 | 14.5 |
Other employee benefits expenses | 32.2 | 33.8 |
Total | 208.4 | 212.5 |
Information on the management's and 5.6 Share-based incentives. |
140
2.6
Other operating expenses
Accounting policies
Other operating expenses comprise expenses that are not directly related to the actual
sales of goods and services. These include, for example, site expenses, marketing
expenses, goods handling expenses, ICT expenses, expenses for professional services
and expenses for leased workforce. Additionally, 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. Furthermore, sales losses
of property, plant and equipment, as well as valuation losses of assets classified as held
for sale, are recognised in other operating expenses.
EUR mill. | 2024 | 2023 |
Site expenses | 54.2 | 55.6 |
Marketing expenses | 32.2 | 32.6 |
Goods handling expenses | 26.0 | 24.7 |
ICT expenses | 22.0 | 20.1 |
Professional services | 12.9 | 8.3 |
Leased workforce | 7.8 | 6.5 |
Bank and cash calculation expenses | 5.5 | 5.3 |
Voluntary social security | 4.4 | 3.5 |
Credit losses | 0.8 | 0.1 |
Other expenses *) | 18.5 | 11.0 |
Total | 184.1 | 167.6 |
*) Corporate restructuring related |
Fees to the auditors | ||
EUR mill. | 2024 | 2023 |
Auditing/EY | 0.5 | 0.6 |
Auditing/others | 0.0 | 0.1 |
Other assurance services based requirements/EY | 0.2 | |
Tax advisory/EY | 0.0 | 0.0 |
Other services/EY | 0.0 | 0.1 |
Total | 0.7 | 0.7 |
2.7
Income taxes
Accounting policies
Tax expenses in the income statement comprise taxes based on taxable income for the
period and deferred taxes. The tax rates and tax laws used to compute the tax amounts
are those that are enacted or substantively enacted at the reporting date in the countries
where the Group operates and generates taxable income.
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 tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting
date. Deferred taxes are not recognised on goodwill impairment, which is non-deductible
in taxation.
Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply in the year when the asset is realised or the liability is settled, based on tax rates
and tax laws that have been enacted or substantively enacted at the reporting date.
Deferred tax liabilities are recognised in full, except for the profits of the Estonian and
Latvian subsidiaries, as the Group can determine when the temporary difference will
reverse, and no such reversal is expected 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. Deferred tax assets from unused tax
losses are recognised only to the extent that the Group company has sufficient taxable
temporary differences or other convincing evidence that sufficient taxable income will be
generated against which the unused tax losses or tax credits can be utilised.
The Group offsets deferred tax assets and deferred tax liabilities only if it has a legally
enforceable right to set off current tax assets and current tax liabilities 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 Group applies the temporary mandatory exception under IAS 12.4A, which stipulates
that a company does not recognise or disclose information about deferred tax assets and
liabilities related to the OECD/G20 BEPS Pillar Two model rules. Group companies
141
recognise income tax expenses and the top-up tax related to the Pillar Two model in the
period in which the liabilities arise. However, Estonian and Latvian subsidiaries are
exceptions to this rule, as they recognise income tax expenses and liabilities upon
dividend distribution. For distribution tax regimes, such as those in Estonia and Latvia, the
top-up tax liability in the absence of dividend distribution during the fiscal year is not
recognised if a deemed distribution tax election for the fiscal year has been made.
EUR mill. | 2024 | 2023 |
Income taxes for the financial | -11.6 | -12.9 |
Income taxes from previous financial | -1.9 | 29.1 |
Change in deferred tax liability/assets | -1.8 | -11.1 |
Total | -15.3 | 5.0 |
Reconciliation between the income expense at the Finnish tax rate | ||
EUR mill. | 2024 | 2023 |
Profit before taxes | 28.6 | 46.6 |
Income taxes at current tax rate | -5.7 | -9.3 |
Income taxes from previous financial | -1.9 | 29.1 |
Tax-exempt | 1.3 | 0.2 |
Differing tax rates of foreign | 0.1 | -0.2 |
Non-deductible expenses | -7.0 | -6.8 |
Effect of deferred taxes not | -2.1 | -1.0 |
Changes in tax rates | -1.0 | |
Deferred tax on results from | -5.9 | |
Income taxes in the income | -15.3 | 5.0 |
The Pillar Two model rules were adopted in Finland at the end of 2023 and are applicable
starting from 1 January 2024. According to these rules, the Group is considered a
multinational enterprise to which the Pillar Two rules apply. Concurrently, Pillar Two
legislation has been enacted or substantively enacted in several other jurisdictions where
the Group operates, effective for the financial year beginning 1 January 2024.
The Group has assessed its potential exposure to Pillar Two income taxes based on the
2023 country-by-country reporting and 2024 financial information for its constituent
entities. The assessment indicates that the Pillar Two effective tax rates in most
jurisdictions where the Group operates are above 15%. However, the Group has identified
a Pillar Two income tax exposure of EUR 0.1 million in Estonia, which is not covered by
the transitional safe harbour relief. This exposure arises due to the Estonian distribution
tax regime. During the fiscal year, the Group made a deemed distribution tax election for
its Estonian subsidiaries, resulting in an effective tax rate of 15% for Pillar Two purposes
in 2024. The income tax has been recognised in the Group's financial statements as a
deferred tax liability. The tax will be paid upon dividend distribution, no later than in 2028.
142
2.8
Deferred tax assets and deferred tax liabilities
Changes in deferred tax assets | ||||
EUR mill. | 1.1.2024 | Recognised in income statement | Translation difference | 31.12.2024 |
Difference between carrying property, plant | 1.4 | -0.0 | 1.4 | |
Lease liability | 111.1 | 5.7 | -1.7 | 115.2 |
Other temporary differences | 5.1 | -0.4 | -0.1 | 4.5 |
Deferred tax assets | 117.6 | 5.3 | -1.8 | 121.1 |
Netting of deferred taxes | -87.3 | -90.5 | ||
Deferred tax assets, net | 30.3 | 30.6 | ||
EUR mill. | 1.1.2023 | Recognised in income statement | Translation difference | 31.12.2023 |
Difference between carrying property, plant | 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 | ||
143
Changes in deferred tax liabilities | ||||
EUR mill. | 1.1.2024 | Recognised in income statement | Translation difference | 31.12.2024 |
Cumulative depreciation differences | 18.4 | 1.9 | -0.5 | 19.8 |
Difference between carrying plant and equip. | 4.3 | -0.1 | 4.1 | |
Measurement at fair value of | 13.7 | -0.4 | 13.2 | |
Right-of-use assets | 87.4 | 4.7 | -1.6 | 90.5 |
Other temporary differences | 14.6 | 0.5 | 0.0 | 15.1 |
Deferred tax liabilities | 138.3 | 7.1 | -2.6 | 142.8 |
Netting of deferred taxes | -87.3 | -90.5 | ||
Deferred tax liabilities, net | 51.0 | 52.3 | ||
EUR mill. | 1.1.2023 | Recognised in income statement | Translation difference | 31.12.2023 |
Cumulative depreciation differences | 14.7 | 3.6 | 0.2 | 18.4 |
Difference between carrying plant and equip. | 4.3 | -0.0 | 0.0 | 4.3 |
Measurement at fair value of | 13.6 | 0.0 | 13.7 | |
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 |
The companies belonging to the group have tax losses of 61.6
million euros, which can be deducted if taxable income is generated in the coming years. EUR 8.4
million of the tax losses
can be used until 2033,
EUR 13.3 million until 2034, and EUR 40.0
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 distributable earnings of EUR 21.1 million (20.3) of the Estonian and
Latvian subsidiaries.
Lindex Group has recorded a deferred tax liability of EUR 6.4 million (5.9) for the undistributed accumulated distributable earnings of Lindex Group 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.
144
3
Intangible and tangible assets and leasing arrangements
3.1
Depreciation, amortisation and impairment losses
EUR mill. | 2024 | 2023 |
Intangible assets | 9.1 | 10.5 |
Machinery and equipment | 11.4 | 10.5 |
Modification and renovation expenses premises | 1.1 | 1.2 |
Right-of-use assets | 77.4 | 78.0 |
Depreciation and amortisation, total | 99.0 | 100.2 |
Depreciation, amortisation and impairment total | 99.0 | 100.2 |
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 it increases the
economic benefits of the asset. Otherwise, the costs are recorded as operating expenses
when 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 those for configuring or customising
the cloud provider’s application software, are recognised as operating expenses when the
services are received. When the SaaS arrangement supplier provides both configuration
and customisation services, judgement is applied to determine whether these services are
distinct from the underlying use of the SaaS application software. Distinct configuration
and customisation costs are expensed as incurred, while non-distinct costs are expensed
over the SaaS contract term.
145
Intangible assets, EUR mill. | Goodwill | Trademark | Intangible rights | Other intangible assets | Advance payments and construction in progress | Intangible assets, total |
Acquisition cost 1.1. | 633.3 | 82.2 | 103.5 | 3.3 | 0.7 | 823.1 |
Translation difference | -20.1 | -2.6 | -2.3 | 0.0 | 0.0 | -25.0 |
Increases during the period | 9.8 | 1.2 | 11.0 | |||
Decreases during the period | -20.4 | -20.4 | ||||
Transfers between items | 0.9 | -0.0 | -0.9 | -0.0 | ||
Acquisition cost 31.12. | 613.2 | 79.6 | 91.5 | 3.3 | 1.0 | 788.7 |
Accumulated amortisation 1.1. | -382.7 | -0.3 | -71.2 | -3.0 | -457.1 | |
Translation difference | 12.0 | 0.0 | 1.6 | -0.0 | 13.6 | |
Amortisation on reductions during | 20.4 | 20.4 | ||||
Amortisation and impairment losses | -8.9 | -0.2 | -9.1 | |||
Accumulated amortisation 31.12. | -370.7 | -0.3 | -58.2 | -3.1 | -432.3 | |
Carrying amount 1.1. | 250.6 | 81.9 | 32.4 | 0.4 | 0.7 | 366.0 |
Carrying amount 31.12. | 242.6 | 79.3 | 33.3 | 0.2 | 1.0 | 356.4 |
Intangible assets, EUR mill. | ||||||
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 | 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 | 6.7 | 0.7 | 7.4 | |||
Amortisation and impairment losses | -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 |
146
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 transition al, 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, Lindex Group’s reportable segments are fashion chain Lindex and
Stockmann for the department store business, which are both considered as cash-
generating units. The asset s for these segments are tested for impairment either during
the preparation of the financial statements or when there are indications that assets may
be impaired.
Since 2019, Lindex has achieved revenue growth of approximately 3-4% CAGR
(Compound Annual Growth Rate), predominantly attributed to its digital expansion efforts.
The strategic plan is to maintain this growth momentum in the coming years, with financial
targets set at 3-5% annual growth in the mid-term, aiming to reach EUR 875 million (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 2025. This strategic move is designed to bolster digital sales and
explore new sales channels.
Regarding financial performance, the adjusted operating margin 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. 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 2024 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 2024, there are no indications for impairment. The goodwill of EUR
242.6 (250.6) million is allocated to the Lindex segment, and the Lindex trademark,
valued at EUR 79.3 (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
147
forecasts have received approval from the Group 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:
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 past five years, the revenue growth rate,
measured as the Compound Annual Growth Rate (CAGR), has been
approximately 3-4%. The management has considered the mid-term financial
targets, coupled with a terminal growth rate of 2.0% (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, which is set to become fully operational in 2025. This facility is
expected to provide robust support for growth, particularly in the realm of online
channels.
2.
Gross margins and operating margins.
increase or stability in both gross margins and operating margins. This is
attributed to various strategic actions implemented across the supply chain,
assortments, strategic pricing, cost-efficiency measures, and digitalization
initiatives. Despite temporary annual fluctuations, the aggregated improvements
are sustained over time, providing confidence in the future outlook. Forecasts for
Lindex's gross margin and operating margin percentages extend over a 5-year
period. In 2024, the gross margin was 65.1% (65.4%), and the adjusted operating
margin was 13.2% (14.3%).
Management anticipates that factors such as macroeconomic turmoil, increases
in raw material prices, a shift towards sustainable sourcing, and changes in the
sales mix, in combination with continual investments to future-proof the business,
may decrease profitability in the short term, but profitability is expected to
gradually improve. The lower starting margin is planned to be effectively mitigated
by continuously streamlining operations through increased automation and
digitali
sation. This ensures that the long-term goal of achieving a 15% adjusted
operating result remains unchanged.
3.
Discount rate
, which is determined using the weighted average cost of capital,
based on the optimal finance structure or the average finance structure of industry
peers (reflects the total cost of equity and debt). The components of the discount
rate are market-specific risk -free rate, market risk premium, business-specific
beta, country risk premium, size risk premium 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 12.1% (11.9%).
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, a major change in the variables used could 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:
-
for the cash flow period also reflecting the sales value of the terminal period,
-
estimates for the cash flow period also reflecting to the Gross Margin per cent
value of the terminal period,
-
148
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 | 2024 |
Discount rate increase | >4% |
Decline in sales growth | >7% |
Decline in Gross Margin | >4% |
Based on the impairment testing carried out, there is headroom of more than EUR 300
(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
such as 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 an item
of property, plant and equipment is comprised of several components with differing useful
lives, the components are treated as separate items. Subsequent costs related to 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 incurred.
Straight-line depreciation is recognised on property, plant and equipment in accordance
with each item’s useful life.
The depreciation periods for property, plant and equipment are:
●
●
●
●
●
●
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. As of the balance sheet date, climate-
related considerations had no impact on the useful life or valuation of the assets.
149
Property, plant | 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 equipment, total |
Acquisition cost 1.1. | 0.2 | 249.3 | 8.8 | 715.7 | 77.9 | 1,051.9 |
Translation difference | -0.0 | -6.9 | -14.9 | -2.5 | -24.3 | |
Increases during the period | 0.0 | 19.2 | 94.2 | 15.5 | 128.9 | |
Decreases during the period | -4.7 | -0.2 | -18.0 | -22.9 | ||
Transfers between items | 2.0 | 0.5 | -2.6 | |||
Acquisition cost 31.12. | 0.2 | 259.0 | 9.2 | 777.0 | 88.3 | 1,133.7 |
Accumulated depreciation 1.1. | -210.0 | -4.6 | -275.2 | -489.8 | ||
Translation difference | 6.4 | 7.4 | 13.8 | |||
Depreciation on reductions during | 4.6 | 0.2 | 24.9 | 29.7 | ||
Depreciation and impairment losses | -11.4 | -1.1 | -77.4 | -89.8 | ||
Accumulated depreciation 31.12. | -210.4 | -5.5 | -320.3 | -536.2 | ||
Carrying amount 1.1. | 0.2 | 39.3 | 4.2 | 440.5 | 77.9 | 562.1 |
Carrying amount 31.12. | 0.2 | 48.6 | 3.6 | 456.8 | 88.3 | 597.5 |
Property, plant | ||||||
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 | 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 | 4.0 | 1.5 | 22.1 | 27.5 | ||
Depreciation and impairment losses | -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 |
In 2024 and 2023 advance payments during 2025. No impairment has |
150
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, which includes its purchase
price and any directly attributable expenditure. Investment properties are not
depreciated; instead, any gains or losses due to changes in fair value are recognised in
the income statement for the period during which they arise. These gains or losses are
recognised separately in the income statement.
The Tapiolan Säästötammi property in Espoo, of which the Group owns 37.8%, is
classified as an investment property in accordance with IAS 40.
EUR mill. | 2024 | 2023 |
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 assets in Lindex Group are
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 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. Lindex division 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 lease liability is later measured at the amortised cost using the effective interest
method. The lease liability is reassessed 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 loss if the carrying amount of the
right-of-use asset has been reduced to zero.
Lease modifications, where the original terms of a lease agreement such as change in the
scope of a lease, its contractual duration, or the consideration for a lease, are accounted
for either as a new lease or an adjustment to the existing lease. If the modification
increases the scope of the lease by adding new assets, and the consideration increases
commensurately, it is treated as a separate lease.
151
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
In sale and leaseback transactions, where Lindex Group sells and then leases back
assets, the right-of-use asset arising from the leaseback is measured at the proportion of
the previous carrying amount of the asset that relates to the right-of-use retained by the
Group. Accordingly, Lindex Group recognises only the amount of any gain or loss that
relates to the rights transferred to the buyer-lessor.
Department store properties in Helsinki, Tallinn and Riga were sold and leased back in
2021 and 2022.
Right-of-use assets | |||
2024, EUR mill. | Buildings | Machinery and equipment | Total |
Acquisition cost 1.1. | 714.3 | 1.4 | 715.7 |
Translation difference | -14.9 | -0.0 | -14.9 |
Increases during the period | 92.8 | 1.4 | 94.2 |
Decreases during the period | -17.6 | -0.5 | -18.0 |
Acquisition cost 31.12. | 774.7 | 2.3 | 777.0 |
Accumulated depreciation and 1.1. | -274.6 | -0.6 | -275.2 |
Translation difference | 7.4 | 0.0 | 7.4 |
Depreciation on reductions during | 24.5 | 0.4 | 24.9 |
Depreciation, amortisation and during the period | -76.8 | -0.6 | -77.4 |
Accumulated depreciation and 31.12. | -319.5 | -0.7 | -320.3 |
Carrying amount 1.1. | 439.7 | 0.9 | 440.5 |
Carrying amount 31.12. | 455.2 | 1.6 | 456.8 |
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 1.1. | -216.7 | -0.8 | -217.5 |
Translation difference | -1.8 | 0.0 | -1.8 |
Depreciation on reductions during | 21.4 | 0.7 | 22.1 |
Depreciation, amortisation and during the period | -77.6 | -0.4 | -78.0 |
Accumulated depreciation and 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 |
In 2024 and 2023 increases of increases and new Lindex store agreements for business premises. |
152
Carrying amount 31.12. by operating | ||
EUR mill. | 2024 | 2023 |
Lindex | 252.4 | 236.4 |
Stockmann | 204.4 | 204.1 |
Total | 456.8 | 440.5 |
Leases recognised in profit and loss | ||
EUR mill. | 2024 | 2023 |
Interest expenses on lease liabilities | -36.0 | -32.1 |
Expenses relating to leases of | -1.5 | -0.6 |
Expense relating to variable included in lease liabilities | -2.9 | -4.8 |
Total | -40.4 | -37.6 |
Total cash |
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 Lindex
Group acts as a lessor on 31 December 2024 and 31 December 2023 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.
Minumum lease payments on | ||
EUR mill. | 2024 | 2023 |
Within one year | 5.8 | 10.6 |
Between one and five years | 12.1 | 17.2 |
Total | 17.9 | 27.8 |
153
4 Capital structure
4.1
Financial income and expenses
Financial income | ||
EUR mill. | 2024 | 2023 |
Dividend income from other investments | 0.1 | 0.0 |
Interest income on bank deposits investments | 3.4 | 3.5 |
Other financial income | 0.4 | 1.6 |
Foreign exchange differences | 1.4 | |
Total | 5.2 | 5.1 |
Financial expenses | ||
EUR mill. | 2024 | 2023 |
Interest expenses on financial amortised cost | -1.6 | -1.5 |
Interest expenses from lease contracts | -36.0 | -32.1 |
Foreign exchange differences | 0.0 | -1.4 |
Total | -37.6 | -35.0 |
EUR mill. | 2024 | 2023 |
Financial income and expenses, | -32.3 | -29.9 |
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
.
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.
Lindex 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 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
154
the income statement. If a hedged cash flow is no longer expected to be reali sed, 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 th e 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.
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. | 2024 | 2023 |
Non-interest-bearing trade receivables | 16.0 | 14.5 |
Receivables based on derivative | 1.5 | 0.0 |
Other receivables | 1.0 | 1.2 |
Prepayments and accrued income | 23.7 | 26.3 |
Income tax receivables | 0.4 | 5.3 |
Current receivables, total | 42.7 | 47.3 |
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. | 2024 | 2023 |
Prepaid rents | 11.9 | 13.8 |
Merchandise prepayments | 4.4 | 4.6 |
Periodised ICT expenses | 3.1 | 2.9 |
Receivable from credit card co | 1.8 | 1.8 |
Periodised indirect employee | 1.1 | 1.2 |
Others | 1.4 | 1.9 |
Total | 23.7 | 26.3 |
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.
EUR mill. | 2024 | 2023 |
Cash and cash equivalents | 114.7 | 137.5 |
Total | 114.7 | 137.5 |
Restricted cash on 31 December |
155
4.5
Non-current liabilities
EUR mill. | 2024 | 2023 |
Bond issues | 73.1 | 72.0 |
Periodised loan arrangement | -0.1 | -0.1 |
Lease liabilities | 512.9 | 505.6 |
Other interest-bearing financing | 3.0 | |
Other non-interest bearing liabilities | 0.4 | 0.3 |
Total | 589.3 | 577.9 |
of which interest-bearing | 589.0 | 577.6 |
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 2023, the receivables which had been converted to subsequent bonds
amounted to EUR 71.9 million.
In January 2024, the Company 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 amount to the aggregate principal
amount of EUR 1.1 million. The receivable of the entitled person was converted, by way
of set-off, into subsequent bonds. After the conversion, the subsequent bonds amount to
EUR 73.1 million.
The bonds are presented as non-current interest-bearing financing liabilities in the
Consolidated Statement of Financial Position.
Other interest-bearing financing liabilities comprise financing of the building of the Lindex
omnichannel distribution center through the Group’s consolidated structured entity,
Bälinge Logistikfastighet AB (see note 5.1).
4.6
Current liabilities
EUR mill. | 2024 | 2023 |
Lease liabilities | 90.3 | 81.6 |
Other interest bearing financing | 6.8 | 0.0 |
Trade payables | 57.7 | 63.9 |
Other current liabilities | 33.6 | 33.2 |
Accruals and prepaid income | 72.8 | 79.4 |
Derivative contract liabilities | 1.9 | |
Income tax liability | 3.1 | 11.7 |
Current provisions | 15.9 | 18.0 |
Total | 280.1 | 289.8 |
of which interest-bearing | 97.1 | 81.6 |
Restructuring debt | ||
EUR mill. | 31.12.2024 | 31.12.2023 |
Current non-interest-bearing restructuring unsecured | 0.0 | 1.4 |
Restructuring debt total | 0.0 | 1.4 |
Restructuring debt related to current | 15.9 | 18.0 |
Provisions related to restructuring | 15.9 | 18.0 |
Total | 15.9 | 19.4 |
Additionally, | ||
*) Consists of conditional and terminated lease agreements. |
Accruals and prepaid income | ||
EUR mill. | 2024 | 2023 |
Personnel expenses | 40.9 | 40.7 |
Periodised purchases | 13.8 | 16.0 |
Customer loyalty programme MORE | 5.8 | 6.2 |
Reserve for returns and periodisation | 4.8 | 4.3 |
Derivative liabilities | 1.9 | |
Other accruals and prepaid | 7.5 | 10.4 |
Total | 72.8 | 79.4 |
156
4.7
Reconciliation of liabilities arising from financing activities
EUR mill. | 1.1.2024 | Cash flows from liabilities | Non-cash changes from liabilities | Non-cash changes from loans | 31.12.2024 | |
Changes in leases | The effect of changes in foreign exchange rates | |||||
Non-current liabilities, interest-bearing | 71.9 | 3.0 | -0.0 | 1.2 | 76.1 | |
Current liabilities, interest-bearing | -0.0 | 6.8 | 6.8 | |||
Lease liabilities | 587.2 | -73.9 | 98.0 | -8.2 | 603.1 | |
Total liabilities from financing activities | 659.1 | -70.8 | 98.0 | -8.3 | 8.0 | 686.0 |
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 |
4.8
Financial risk management
The Group’s financing and the management of financial risks are handled on a centralised
basis within Lindex Group plc’s Treasury function in accordance with the policy adopted
by the Board of Directors.
The Board of Directors of Lindex Group filed for corporate restructuring of the parent
company Lindex Group 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 Lindex Group 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 Lindex Group plc’s restructuring programme
and the restructuring proceedings have ended. However, since the restructuring
proceedings were initiated, Lindex Group 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 Lindex Group 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
Lindex Group 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.
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.
157
Transaction risk
Lindex Group’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 2024 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 2024, non-euro sales accounted
for 53 % of the Group’s entire sales (2023: 52 %). Purchases with a transaction risk made
up 52 % of the Group's purchases (2023: 48 %). In addition, the Group has purchases in
foreign currency without a transaction risk, mainly local purchases in Sweden. In 2024
these purchases accounted for 4 % of the Group’s total purchases (2023: 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. AB Lindex obtained
hedging facilities in September 2021 and is now hedging its transaction exposure in
accordance with the treasury policy. Lindex Group 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 the Lindex division. The Stockmann
division operates mainly in its local currency and its transaction exposure is limited. The
outstanding cash flow hedges are hedging the Lindex division ’s purchases in US -dollar
and sales in Swedish Krona, Norwegian Krona, euro and Czech Koruna, and will mature
during the first five months of 2025. 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 4-5 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 2024.
Foreign exchange derivatives hedging cash flows | ||
EUR Mill. | 2024 | 2023 |
USD | 47.2 | 45.2 |
SEK | -21.5 | -29.3 |
NOK | -11.2 | -12.1 |
EUR | -10.1 | -5.5 |
CZK | -2.8 |
Sensitivity Analysis, cash flow hedges, effect on equity after | |||
2024, EUR Mill. | USD | SEK | NOK |
Change + 10 % | -3.4 | -0.7 | 0.8 |
Change - 10 % | 4.2 | 0.9 | -1.0 |
2023, EUR Mill. | USD | SEK | NOK |
Change + 10 % | -3.3 | -0.4 | 0.9 |
Change - 10 % | 4.0 | 0.5 | -1.1 |
All outstanding derivatives hedging cash flows relate to the Lindex division. The functional
currency of the Lindex division is the Swedish Krona. At year-end, the outstanding cash
flow hedges in US-dollars covered approximately 71 % of the Lindex 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 Lindex Group’s balance sheet. The
degree of hedging can vary in the range of 0 – 100%.
The following table shows the Group’s transaction exposure including foreign -currency-
denominated assets and liabilities as well as outstanding derivatives hedging these items.
Future forecasted cash flows and derivatives hedging forecasted cash flows are not
included.
158
The Group’s transaction exposure | |||||
2024, EUR Mill. | SEK | GBP | NOK | CZK | USD |
Receivables | 3.0 | 2.5 | 12.5 | 8.1 | 6.3 |
Trade payables and other | -34.1 | -7.3 | 0.0 | -23.4 | |
Foreign currency exposure in the | -31.2 | 2.5 | 5.3 | 8.1 | -17.2 |
Foreign exchange derivatives hedging | 21.8 | ||||
Net position in the balance sheet | -31.2 | 2.5 | 5.3 | 8.1 | 4.6 |
2023, EUR Mill. | SEK | GBP | NOK | CZK | USD |
Receivables | 5.2 | 1.2 | 30.5 | 14.2 | 4.2 |
Trade payables and other | -29.2 | -17.2 | -18.8 | ||
Foreign currency exposure in the | -24.0 | 1.2 | 13.3 | 14.2 | -14.6 |
Foreign exchange derivatives hedging | 14.7 | ||||
Net position in the balance sheet | -24.0 | 1.2 | 13.3 | 14.2 | 0.1 |
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 | |||||
2024, EUR Mill. | SEK | GBP | NOK | CZK | USD |
Change + 10 % | 2.3 | -0.2 | -0.4 | -0.6 | -0.7 |
Change - 10 % | -2.8 | 0.2 | 0.5 | 0.7 | 0.9 |
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 |
Translation risk
The Lindex 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 Lindex Group 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 Lindex Group reclassified a major part of the Swedish krona denominated
intra-group loan, granted for the acquisition of the shares in AB 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 2024 the translation risk was not hedged since Lindex Group 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.
Sensitivity Analysis, effect on equity | |
2024, EUR Mill. | SEK |
Change + 10 % | -58.4 |
Change - 10 % | 71.4 |
2023, EUR Mill. | SEK |
Change + 10 % | -57.6 |
Change - 10 % | 70.4 |
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 Lindex Group’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 2024.
Interest-bearing liabilities consist of a five -year bullet bond (exc l. 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.
159
Interest terms of the Group's receivables on 31 December 2024: | ||||
Interest rate adjustment, period, EUR mill | < 12 months | 1–3 years | 3–5 years | Total |
Bond Issues | 73.1 | 73.1 | ||
Other interest-bearing liabilities | 6.8 | 3.0 | 9.8 | |
Total | 6.8 | 76.2 | 0.0 | 82.9 |
Cash and bank receivables | -114.7 | -114.7 | ||
Total | -107.9 | 76.2 | 0.0 | -31.7 |
Interest terms of the Group's interest-bearing 31 December 2023: | ||||
Interest rate adjustment, period, 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 |
Electricity price risk
Lindex Group has entered into electricity price commitments to mitigate the risk
associated with future electricity procurement. According to the financial policy, the
commitment level for future electricity prices is set between 50% and 80% for the years
2025-2026. Since both divisions have secured energy price commitments for the majority
of their electricity consumption, a 20 percentage point fluctuation in the market price of
electricity would not have a material impact on the Group’s net result and equity.
Additionally, the solar panels installed on top of Lindex's omnichannel distribution center
somewhat reduce the Group's dependence on external electricity purchases.
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.
Lindex Group 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 Linde x Group plc’s shares. The
remaining 80 % was either converted to a secured 5-year bullet bond or it will be paid
according to the payment programme during the years 2022-2028. According to the
restructuring programme, Lindex Group 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.
There is still one disputed claim regarding the termination of a lease agreement that must
be settled before the restructuring process can end. The claim is further explained in
Notes 1.4 and 1.5.
The Group has a committed secured revolving credit facility of EUR 40 million, which will
mature in July 2028. The credit facility has not been used in 2023-2024 .
The 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 .
Lindex Group plc has covered all new payment obligations that have arisen since the
restructuring proceedings started. Positive cash flows from selling the real estate
properties and from Group internal financing have been used for investments and
repaying debts.
At the end of the year, Lindex Group had EUR 114,7 million (EUR 137.5 million) in cash
assets.
Liquid assets and unused committed credit facilities | ||
EUR Mill. | 2024 | 2023 |
Cash and cash equivalents | 114.7 | 137.5 |
Credit facility | 40.0 | 40.0 |
Total | 154.7 | 177.5 |
160
Cash flows based on agreements in financial liabilities, including | |||||||
EUR Mill. | Carrying amount | 2025 | 2026 | 2027 | 2028 | 2029- | Total |
Non-current bond (5-y bullet) | 73.1 | -0.1 | -73.2 | -73.3 | |||
Non-current liabilities | 3.0 | -3.0 | -3.0 | ||||
Current trade payables and other current | 91.3 | -91.3 | -91.3 | ||||
Current liabilities | 6.8 | -6.8 | -6.8 | ||||
Non-current lease liabilities | 512.9 | -102.6 | -92.1 | -79.9 | -407.1 | -681.7 | |
Current lease liabilities | 90.3 | -109.8 | -109.8 | ||||
Lease liabilities, total | 603.1 | -109.8 | -102.6 | -92.1 | -79.9 | -407.1 | -791.4 |
Total | 777.3 | -207.9 | -178.8 | -92.1 | -79.9 | -407.1 | -965.8 |
The cash flows presented are | |||||||
In July 2021 EUR 66.1 mill. EUR 1.5 mill., in 2023 with EUR | |||||||
Carrying amount of lease liabilities |
Cash flows based on agreements in financial liabilities, including | |||||||
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 | 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 | |||||||
In July 2021 EUR 66.1 mill. 1.5 mill. euros and in June |
161
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
2024, the Group's liquid assets consisted mainly of deposits in banks, with a very short
maturity. The Group does not incur major credit risk related to commercial trade
receivables because its outstanding receivables consist of a large number of small
amounts, and the creditworthiness of customers is assessed when making the credit
decision.
Ageing of trade and lease receivables | ||
31 December 2024 | ||
EUR mill. | Gross carrying amount | Loss allowance |
Trade receivables not due | 15.1 | 0.0 |
Trade receivables fallen | 0.6 | 0.0 |
Trade receivables fallen | 0.1 | 0.0 |
Trade receivables fallen | 0.1 | 0.0 |
Trade receivables fallen | 0.1 | 0.0 |
Trade receivables fallen | 1.2 | 1.2 |
Total | 17.2 | 1.2 |
31 December 2023 | ||
EUR mill. | Gross carrying amount | Loss allowance |
Trade receivables not due | 12.6 | 0.0 |
Trade receivables fallen | 0.8 | -0.0 |
Trade receivables fallen | 0.2 | 0.0 |
Trade receivables fallen | 0.2 | 0.0 |
Trade receivables fallen | 0.2 | 0.0 |
Trade receivables fallen | 1.2 | 0.7 |
Total | 15.3 | 0.7 |
Lindex 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. | 2024 | 2023 |
Cash flow hedges, currency | 45.6 | 47.0 |
Total | 45.6 | 47.0 |
Fair value of derivative contracts 2024 | |||
Derivative contracts, hedge | |||
EUR mill. | Positive | Negative | Net |
Cash flow hedges, currency | 1.5 | 1.5 | |
Total | 1.5 | 1.5 |
Fair value of derivative contracts 2023 | |||
Derivative contracts, hedge | |||
EUR mill. | Positive | Negative | Net |
Cash flow hedges, currency | 0.0 | -1.9 | -1.8 |
Total | 0.0 | -1.9 | -1.8 |
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 202 4.
162
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 2024 | Fair value 2024 | Carrying amount 2023 | Fair value 2023 |
Derivative contracts, hedge accounting applied | 2 | 1.5 | 1.5 | 0.0 | 0.0 |
Financial assets at amortised cost | |||||
Non-current receivables | 3.3 | 3.3 | 3.2 | 3.2 | |
Current receivables, non- interest-bearing | 40.8 | 40.8 | 42.0 | 42.0 | |
Cash and cash equivalents | 114.7 | 114.7 | 137.5 | 137.5 | |
Other investments | 3 | 0.4 | 0.4 | 0.4 | 0.4 |
Financial assets, total | 160.7 | 160.7 | 183.2 | 183.2 |
Financial liabilities, EUR mill. | Level | Carrying amount 2024 | Fair value 2024 | Carrying amount 2023 | Fair value 2023 |
Derivative contracts, hedge accounting applied | 2 | 0.0 | 0.0 | 1.9 | 1.9 |
Financial liabilities at amortised cost | |||||
Non-current interest-bearing liabilities | 2 | 76.1 | 71.2 | 71.9 | 62.5 |
Non-current lease liabilities | 512.9 | 512.9 | 505.6 | 505.6 | |
Non-current non-interest- bearing liabilities | 0.4 | 0.4 | 0.3 | 0.3 | |
Current liabilities, interest- bearing | 2 | 6.8 | 6.8 | 0.0 | 0.0 |
Current lease liabilities | 90.3 | 90.3 | 81.6 | 81.6 | |
Current liabilities, non-interest- bearing | 164.1 | 164.1 | 176.6 | 176.6 | |
Financial liabilities, total | 850.5 | 845.6 | 837.9 | 828.5 | |
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 mill. | 2024 | 2023 |
Carrying amount 1.1. | 0.4 | 0.2 |
Increases during the period | 0.2 | |
Carrying amount 31.12. | 0.4 | 0.4 |
163
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.
31.12.2024 | |||
Financial assets, EUR mill. | Carrying amount | Items under netting arrangements | Net |
Currency derivatives, hedge accounting applied | 1.5 | 0.0 | 1.5 |
Financial assets, total | 1.5 | 0.0 | 1.5 |
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 | |||
Currency derivatives, hedge accounting applied | -1.9 | 0.0 | -1.8 |
Financial liabilities, total | -1.9 | 0.0 | -1.8 |
4.12
Shareholders’ equity
EUR mill. | Entered in trade register | Number of shares, B | Invested unrestricted equity fund | Total | |
31.12.2022 | 155,880,206 | 77.6 | 73.3 | 150.9 | |
Share issue | 22.6.2023 | 2,835,349 | |||
31.12.2023 | 158,715,555 | 77.6 | 75.9 | 153.5 | |
Share issue | 26.1.2024 | 307,489 | |||
Share issue | 24.6.2024 | 2,599,852 | |||
31.12.2024 | 161,622,896 | 77.6 | 78.6 | 156.1 |
Share capital and number of shares
In May 2021, Lindex Group 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 2023, a total of 83,613,786 conversion
shares had been subscribed for in the share issue, and the total number of Stockmann
shares had increased to a total of 158,715,555 shares.
In January 2024, 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 307,489 new shares of the Company in deviation from the shareholders’
pre-emptive subscription rights to such creditor of the Company whose previously
conditional or disputed restructuring debt under the restructuring programme had been
confirmed to their final amounts by 9 November 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.
In June 2024, 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 2,599,852 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 debt s under the restructuring programme
had been confirmed to their final amounts by 13 June 2024 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.
164
As a result of the share issues in January and June 2024, the total number of shares in
the Company has increased to a total of 161,622,896 shares.
On 31 December 2024 Lindex Group 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 2021-2024
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. | 2024 | 2023 |
Hedging reserve | 1.5 | -1.8 |
Reserve fund | 0.2 | 0.2 |
Total | 1.8 | -1.6 |
Other funds comprise:
-
shareholders’ equity based on local regulations
-
used to hedge cash flows, less the deferred tax liability.
Dividends
The dividend payout proposed by the Board of Directors is not recognised in the financial
statements. Dividends are recognised based on 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 would have been allowed only by following the creditor protection
procedure. During the restructuring programme, Lindex Group plc has not been allowed
to distribute funds either.
4.13
Earnings per share
Basic earnings per share is 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 is calculated by adjusting the weighted average number of
shares by the effect of potential diluting shares such as shares from share-based
payments. Lindex Group has long-term incentive schemes, which can be settled in
company shares. These contingently issuable shares are issuable when certain pre-
defined conditions in the incentive programmes are met during a timeframe set in the
incentive programmes’ conditions. If the settlement would happen at the reporting date, it
would result in issuing 747.162
shares.
EUR mill. | 2024 | 2023 |
Profit/loss for the period attributable holders of the parent company | 13.2 | 51.7 |
Weighted average number | 160,358,794 | 157,379,445 |
Weighted diluted number of | 161,105,956 | 157,379,445 |
Basic earnings per share, EUR | 0.08 | 0.33 |
Diluted earnings per share, EUR | 0.08 | 0.33 |
165
5 Other notes
5.1
Group companies
31.12.2024 | Shareholding % | Voting rights % |
Parent company holdings | ||
Stockmann AS, Tallinn | 100.0 | 100.0 |
SIA Stockmann, Riga | 100.0 | 100.0 |
Stockmann Security Services | 100.0 | 100.0 |
Lindex Holding AB, Stockholm | 100.0 | 100.0 |
Subsidiaries' holdings | ||
TOV Stockmann, Kiev *) | 100.0 | 100.0 |
AB Lindex, Gothenburg | 100.0 | 100.0 |
Lindex Sverige AB, Gothenburg | 100.0 | 100.0 |
Lindex AS, Oslo | 100.0 | 100.0 |
Lindex Oy, Helsinki | 100.0 | 100.0 |
Oü Lindex Eesti, Tallinn | 100.0 | 100.0 |
SIA Lindex Latvia, Riga | 100.0 | 100.0 |
UAB Lindex Lithuania, Vilnius | 100.0 | 100.0 |
Lindex s.r.o., Prague | 100.0 | 100.0 |
AB Espevik, Gothenburg *) | 100.0 | 100.0 |
Lindex H.K. Ltd, Hong Kong | 100.0 | 100.0 |
Shanghai Lindex Consulting Company | 100.0 | 100.0 |
Lindex India Private Ltd, New | 100.0 | 100.0 |
Lindex Slovakia s.r.o., | 100.0 | 100.0 |
Lindex UK Fashion Ltd, London | 100.0 | 100.0 |
Lindex Commercial (Shanghai) | 100.0 | 100.0 |
Lindex Fastighets AB, Gothenburg | 100.0 | 100.0 |
Closely AB, Gothenburg | 100.0 | 100.0 |
*) dormant companies |
Unconsolidated structured entities
There were no unconsolidated structured entities in Lindex Group.
Consolidated structured entities
In 2022, Lindex Group plc announced plans to invest in a highly automated omnichannel
distribution centre located in Alingsås, part of the greater Gothenburg area in Sweden.
The distribution centre was officially launched at the end of November 2024, with full
operational capacity expected to be achieved during 2025.
Lindex has entered into several agreements regarding Bälinge Logistikfastighet AB,
covering among other things, the financing of the land acquisition and the construction of
the building. Based on the contractual terms the Group assessed that the voting rights in
Bälinge Logistikfastighet AB are not the dominant factor in deciding who controls the
entity. Therefore, the Group concluded that Bälinge Logistikfastighet AB is a structured
entity under IFRS 10 Consolidated Financial Statements with a non-controlling interest.
Disposals
In 2024 there were no disposals in the group.
In 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 was 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 was EUR -0.7 million.
166
5.2
Joint arrangements
Joint operations
Lindex Group has a 37.8% shareholding in Kiinteistö Oy Tapiolan Säästötammi
Fastighets Ab. The real estate company is based in Espoo, Finland. 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). Lindex Group does not recognise the
income and expenses of the joint operation, as the joint operation is not essential for the
Group.
Assets and liabilities of joint operations | ||
Milj. euroa | 2024 | 2023 |
Non-current assets | 1.3 | 1.3 |
Current assets | 0.4 | 0.5 |
Current liabilities | 0.0 | 0.0 |
Income and expenses of joint | ||
EUR mill. | 2024 | 2023 |
Expenses | 0.1 | 0.1 |
5.3
Provisions
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 an 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, termination of a
significant line of business , or 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.
Current provisions | ||
Restructuring provision | ||
EUR mill. | 2024 | 2023 |
Carrying amount 1.1. | 0.1 | |
Used provisions | -0.1 | |
Carrying amount 31.12. | ||
Other provisions | ||
EUR mill. | 2024 | 2023 |
Carrying amount 1.1. | 18.0 | 31.2 |
Used provisions | -2.1 | -12.8 |
Reversal of unused provisions | -0.0 | -0.4 |
Carrying amount 31.12. | 15.9 | 18.0 |
Current provisions total | 15.9 | 18.0 |
Provision for landlords' claims related (EUR 18.0 million). |
167
5.4
Contingent liabilities
Collaterals given for own liabilities | ||
EUR mill. | 2024 | 2023 |
Rental guarantees | 10.1 | 9.3 |
Total | 10.1 | 9.3 |
Contingent liabilities | ||
EUR mill. | 2024 | 2023 |
Pledged subsidiary shares *) | 303.4 | 303.4 |
Pledged loan receivables **) | 398.5 | 378.6 |
Guarantees | 0.1 | 0.1 |
Electricity commitments | 0.5 | 1.5 |
Total | 702.5 | 683.5 |
*) Book-value of subsidiary shares | ||
**) Book-value of subsidiary loan | ||
Electricity commitments relate to 2027. | ||
Landlords' disputed claims | ||
Some landlords have presented of long-term lease agreements. equivalent to 18 months’ rents, December 2024, one disputed this outstanding claim. At the million, were reported as a contingent |
Lease commitments | ||
Lease agreements on the Group's | ||
EUR mill. | 2024 | 2023 |
Within one year | 6.1 | 4.8 |
After one year | 12.4 | 15.3 |
Total | 18.5 | 20.1 |
Group's lease payments | ||
EUR mill. | 2024 | 2023 |
Within one year | 0.1 | 0.1 |
After one year | 0.2 | 0.3 |
Total | 0.3 | 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, Lindex Group’s subsidiaries and joint
operations. The relationships between the parent company and subsidiaries are shown in
Note 5.1.
Related party transactions
Except for compensation for the key management, there have not been any material
transactions between Lindex Group and its related parties.
Compensation for the key management
Employee benefits of | |||
EUR | Chief Executive Officer | Other members of the Group Management Team | Total |
Short-term employee benefits | 485,770 | 1,028,611 | 1,514,381 |
Other long-term employee benefits | 278,157 | 123,162 | 401,319 |
Share-based payments | 216,766 | -105,180 | 111,586 |
Employee benefits total | 980,692 | 1,046,594 | 2,027,286 |
Remuneration to the Board | |||
EUR | Fixed annual remuneration | Remuneration based on participation | Total |
Pohjonen Sari | 90,000 | 33,600 | 123,600 |
Neuwald Roland | 65,000 | 19,800 | 84,800 |
Björkman Stefan | 42,500 | 15,000 | 57,500 |
Karppinen Timo | 52,500 | 21,000 | 73,500 |
Stone Tracy | 42,500 | 19,800 | 62,300 |
Williams Harriet | 42,500 | 15,000 | 57,500 |
Remuneration to the Board of Directors total | 335,000 | 124,200 | 459,200 |
Fees and remuneration to key personnel total | 2,486,486 |
168
Employee benefits of | |||
EUR | Chief Executive Officer*) | Other members of the Group Management Team | Total |
Short-term employee benefits | 984,466 | 1,138,787 | 2,123,253 |
Other long-term employee benefits | 68,268 | 214,945 | 283,214 |
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 |
Remuneration to the Board | |||
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 |
Remuneration to the Board of Directors total | 335,000 | 98,400 | 433,400 |
Fees and remuneration to key personnel total, EUR | 3,609,743 | ||
*) CEO Jari Latvanen until 12 | |||
**) until 22 March 2023 |
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 2024, 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 total cost for the
defined occupational contribution pension insurances taken by the company for the Group
Management Team was EUR 401,319 (283,213).
5.6
Share-based incentives
Accounting policies
Lindex 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 at 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.
The Group 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 January to 31 December 2024
During the financial year 2022 Lindex Group 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 authori sed 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,
169
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 target. The potential
reward will be paid during H1 2025, depending on the achievement of the performance
criteria and the service condition. Any reward earned for the PSP 2022-2024 will be paid
partly in company shares and partly in cash. The purpose of the cash contribution is to
cover taxes and tax-like payments incurred by the management and key personnel from
the remuneration.
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 target.
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.
The Board of Director's approved the commencement of the third performance period
(PSP 2024-2026) and decided on the performance criteria in February 2024. The
performance criteria include total shareholder return, revenue, EBIT and climate target.
The potential reward will be paid during H1 2027, depending on the achievement of the
performance criteria and the service condition. Any reward earned for the PSP 2024-2026
will be paid partly in company shares and partly in cash. The purpose of the cash
contribution is to cover taxes and tax-like payments incurred by the management
and key
personnel from the remuneration.
Performance period | 2024-2026 | 2023-2025 | 2022-2024 |
Initial amount, pcs *) | 1,430,500 | 2,000,000 | 2,000,000 |
Initial allocation date | 18.3.2024 | 6.7.2023 | 23.11.2022 |
Vesting date | 30.4.2027 | 30.4.2026 | 30.4.2025 |
Maximum contractual life, years | 3.1 | 2.8 | 2.4 |
Remaining contractual life, years | 2.3 | 1.3 | 0.3 |
Number of participants in the plan | 17 | 14 | 14 |
Payment method | Equity and cash, net settlement | Equity and cash, net settlement | Equity and cash, net settlement |
*) The amounts are presented in share and a number of shares |
Changes in share awards | ||||
Performance period | 2024-2026 | 2023-2025 | 2022-2024 | Total |
Outstanding number of shares | 1,185,000 | 1,178,000 | 2,363,000 | |
Granted during the year | 1,422,200 | 1,422,200 | ||
Forfeited during the year | 288,500 | 334,000 | 334,000 | 956,500 |
Outstanding number of shares 31.12. | 1,133,700 | 851,000 | 844,000 | 2,828,700 |
170
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 during period 2024 | Performance period 2024- 2026 | Performance period 2023- 2025 | Performance period 2022- 2024 |
Share price at grant, EUR | 2.93 | 2.07 | 2.07 |
Share price at the end of the period, | 2.69 | 2.90 | 2.90 |
Expected volatility, | 45.00% | 41.52% | 46.12% |
Maturity, years | 2.75 | 2.5 | 1.5 |
Risk-free interest rate, % | 2.87% | 3.24% | 3.39% |
Valuation model | Monte Carlo | Monte Carlo | Monte Carlo |
Fair value per share, EUR | 1.5668 | 0.9357 | 0.8156 |
*) Expected volatility was determined Group plc's share using monthly | |||
Effect of share-based Incentives | ||
EUR mill. | 2024 | 2023 |
Expenses for the financial year, payments | 0.4 | 1.0 |
Expenses for the financial year, payments, equity-settled | 0.3 | 0.8 |
Liabilities arising from share-based | 0.3 | 0.3 |
Estimated future cash payment taxes | 0.9 | 2.1 |
5.7
Climate-related matters
Accounting policies
Lindex 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 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 estimates
and assumptions, 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 goodwill
impairment test in 2024. 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
Events after the reporting period
Lindex Group plc announced on 7 February 2025 that the rental agreement for the
Stockmann Itis department store in Helsinki will expire on 1 August 2025. The company
plans to close the department store. If materialised, the planned closure would not have a
material impact on the profitability or financial position of the Stockmann segment or
Lindex Group.
171
Lindex Group plc | |||
Income Statement, FAS | |||
EUR | Note | 1.1.-31.12.2024 | 1.1.-31.12.2023 |
REVENUE | 234,761,334.39 | 242,282,545.39 | |
Other operating income | 2 | 6,699,421.66 | 6,954,344.40 |
Materials and services | |||
Materials and consumables: | |||
Purchases during the financial | -118,671,613.96 | -132,003,315.53 | |
Change in inventories, increase (+), | -6,527,056.06 | 737,389.38 | |
Materials and services, total | -125,198,670.02 | -131,265,926.15 | |
Employee benefits | 3 | -43,149,636.63 | -45,349,176.68 |
Depreciation, amortisation and | 4 | -8,494,327.78 | -9,420,195.21 |
Other operating expenses | 5 | -104,390,638.54 | -90,580,357.65 |
-281,233,272.97 | -276,615,655.69 | ||
OPERATING | -39,772,516.92 | -27,378,765.90 | |
Financial income and expenses | 6 | 52,019,847.15 | 49,897,331.61 |
PROFIT (LOSS) BEFORE APPROPRIATIONS | 12,247,330.23 | 22,518,565.71 | |
Appropriations | 7 | 5,140,632.00 | 3,827,929.29 |
Income taxes | 8 | -907,012.21 | -8,350,053.11 |
PROFIT (LOSS) FOR THE PERIOD | 16,480,950.02 | 17,996,441.89 |
172
Lindex Group plc
Balance sheet, FAS
EUR | Note | 31.12.2024 | 31.12.2023 |
ASSETS | |||
NON-CURRENT ASSETS | |||
Intangible assets | 9 | ||
Intangible rights | 5,319,295.22 | 7,344,061.20 | |
Advance payments and construction progress | 1,038,042.12 | 700,346.73 | |
Intangible assets, total | 6,357,337.34 | 8,044,407.93 | |
Property, plant, | 10 | ||
Machinery and equipment | 16,557,956.62 | 18,686,683.43 | |
Modification and renovation expenses leased premises | 2,594,426.25 | 2,960,902.71 | |
Other tangible assets | 5,827.15 | 54,601.65 | |
Advance payments and construction progress | 1,185,224.20 | 300,227.73 | |
Property, plant, | 20,343,434.22 | 22,002,415.52 | |
Investments | 11 | ||
Shares in Group companies | 308,636,627.98 | 311,436,627.98 | |
Other shares and participations | 744,633.86 | 748,761.86 | |
Investments, total | 309,381,261.84 | 312,185,389.84 | |
NON-CURRENT ASSETS, TOTAL | 336,082,033.40 | 342,232,213.29 | |
CURRENT ASSETS | |||
Inventories | |||
Materials and consumables | 46,873,382.90 | 53,400,438.96 | |
Inventories, total | 46,873,382.90 | 53,400,438.96 | |
Non-current receivables | |||
Loan receivables from Group companies | 235,952,762.35 | 210,707,596.22 | |
Other receivables | 3,675,367.31 | 4,099,608.31 | |
Non-current receivables, total | 239,628,129.66 | 214,807,204.53 | |
Current receivables | 12 | ||
Trade receivables | 3,074,475.09 | 4,044,287.40 | |
Receivables from Group companies | 10,120,756.67 | 9,360,003.70 | |
Other receivables | 226,394.85 | 317,478.13 | |
Prepayments and accrued income | 8,264,382.00 | 12,732,884.33 | |
Current receivables, total | 21,686,008.61 | 26,454,653.56 | |
Cash in hand and at banks | 13 | 21,705,786.04 | 23,393,007.01 |
CURRENT ASSETS, TOTAL | 329,893,307.21 | 318,055,304.06 | |
ASSETS, TOTAL | 665,975,340.61 | 660,287,517.35 |
EUR | Note | 31.12.2024 | 31.12.2023 |
EQUITY AND LIABILITIES | |||
EQUITY | |||
Share capital | 14-15 | 77,556,538.26 | 77,556,538.26 |
Invested unrestricted equity fund | 78,786,138.36 | 76,138,713.65 | |
Retained earnings | 237,323,382.78 | 219,326,940.89 | |
Net profit (loss) for the financial year | 16,480,950.02 | 17,996,441.89 | |
EQUITY, | 410,147,009.42 | 391,018,634.69 | |
ACCUMULATED | 16 | 16,330,822.66 | 19,131,454.66 |
PROVISIONS | 17 | 15,911,836.57 | 18,033,041.57 |
LIABILITIES | |||
Non-current liabilities | 18 | ||
Bonds | 73,142,624.00 | 72,022,624.00 | |
Other payables | 7,980,724.21 | 9,097,953.00 | |
Liabilities to Group companies | 97,091,100.30 | 96,316,419.01 | |
Non-current liabilities, total | 178,214,448.51 | 177,436,996.01 | |
Current liabilities | 19 | ||
Advances received | 872,337.88 | 818,584.06 | |
Trade payables | 12,065,064.32 | 16,998,516.29 | |
Liabilities to Group companies | 1,861,837.85 | 1,995,278.90 | |
Other payables | 14,533,950.31 | 14,533,430.28 | |
Accrued expenses and prepaid | 20 | 16,038,033.09 | 20,321,580.89 |
Current liabilities, total | 45,371,223.45 | 54,667,390.42 | |
LIABILITIES, TOTAL | 223,585,671.96 | 232,104,386.43 | |
EQUITY AND LIABILITIES, TOTAL | 665,975,340.61 | 660,287,517.35 | |
173
Lindex Group plc | ||
Cash flow statement | ||
EUR | 1.1.-31.12.2024 | 1.1.-31.12.2023 |
CASH FLOW FROM OPERATING | ||
Profit (loss) for the financial year | 16,480,950.02 | 17,996,441.89 |
Adjustments for: | ||
Depreciation and amortisation | 8,494,327.78 | 9,420,195.21 |
Gains of disposals of fixed assets | -11,653.21 | |
Impairment losses | 3,400,000.00 | |
Other non-cash income and | 240,057.74 | -8,455,895.22 |
Financial income and expenses | -55,419,847.15 | -49,897,332.11 |
Appropriations | -5,140,632.00 | -3,827,929.29 |
Taxes | -166,820.86 | |
Deferred taxes | 907,012.21 | 8,516,873.97 |
Changes in working capital: | ||
Increase (-) / decrease (+) of | 1,386,753.65 | 3,143,057.15 |
Increase (-) / decrease (+) of | 6,527,056.06 | -737,389.38 |
Increase (+) / decrease (-) | -9,579,175.32 | 11,454,484.89 |
Interest and other financial expenses | -3,385,012.12 | -2,071,754.13 |
Interest received from operating | 821,994.08 | 505,977.16 |
Taxes | 3,946,829.73 | -39,789,191.33 |
CASH FLOW FROM OPERATING | -31,319,685.32 | -53,920,935.26 |
CASH FLOW FROM INVESTING | ||
Capital expenditure on tangible | -4,969,881.15 | -6,917,323.51 |
Proceeds from disposal of tangible | 25,000.00 | 11,653.21 |
Additions to holdings in Group companies | -600,000.00 | -1,500,000.00 |
Dividends received/return of equity | 2,975.00 | 3,514,999.06 |
NET CASH FROM INVESTING | -5,541,906.15 | -4,890,671.24 |
CASH FLOWS FROM FINANCING | ||
Proceeds from non-current liabilities | 45,033,237.24 | 48,120,120.95 |
Repayments of non-current liabilities | -11,358,866.74 | -1,000,000.00 |
Received and paid group contributions | 1,500,000.00 | |
NET CASH FROM FINANCING ACTIVITIES | 35,174,370.50 | 47,120,120.95 |
Change in cash in hand and at | -1,687,220.97 | -11,691,485.55 |
Cash in hand and at banks | 23,393,007.01 | 35,084,492.56 |
Cash in hand and at banks | 21,705,786.04 | 23,393,007.01 |
174
Notes to the parent company financial statements
1. Accounting principles
The financial statements of Lindex Group plc have been prepared according to Finnish
Accounting Standards (FAS). Company name change is described as notes to
consolidated financial statements, note 1.1.
Corporate restructuring proceedings
District Court of Helsinki has approved Lindex Group 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 Lindex Group 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 29.0 (26.8) million. The calculated income tax in Estonia would be EUR
6.4 (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.
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 | |
Machinery and equipment | |
Modification and renovation 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 of the subsidiary shares, an impairment loss of EUR 3.4
million has been recognised for the shares of SIA Stockmann in Latvia. 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.
Non-current liabilities
Loans payable are recognised at nominal value. Transaction costs are initially recogni sed
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.
175
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 73.142.624.
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 | 2024 | 2023 |
Compensation for services to Group | 6,619,569.87 | 6,903,384.00 |
Other operating income | 79,851.79 | 50,960.40 |
Total | 6,699,421.66 | 6,954,344.40 |
3. Employee benefits | ||
EUR | 2024 | 2023 |
Salaries and remuneration paid | 347,611.52 | 1,403,828.00 |
Salaries and remuneration paid | 459,200.00 | 433,400.00 |
Other wages and salaries | 34,676,436.22 | 35,145,502.13 |
Wages during sick leave | 1,477,326.34 | 1,539,297.69 |
Pension expenses | 5,242,040.51 | 5,351,129.72 |
Other employee benefits expenses | 947,022.04 | 1,476,019.14 |
Total | 43,149,636.63 | 45,349,176.68 |
Personnel, average | 954 | 1,001 |
*) CEO Jari Latvanen until 12 |
Management pension liabilities
The retirement age of the Group 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.
4. Depreciation, amortisation and impairment losses | ||
EUR | 2024 | 2023 |
Intangible rights | 3,493,204.76 | 4,740,194.32 |
Machinery and equipment | 4,129,580.67 | 3,629,410.83 |
Modification and renovation expenses premises | 871,542.35 | 1,050,590.06 |
Total | 8,494,327.78 | 9,420,195.21 |
5. Other operating expenses | ||
EUR | 2024 | 2023 |
Site expenses | 47,253,458.70 | 44,451,512.80 |
ICT expenses | 12,546,397.12 | 12,957,121.36 |
Professional services expenses | 8,355,011.52 | 4,947,784.85 |
Marketing expenses | 7,015,664.24 | 8,267,447.70 |
Staff leasing expenses | 5,199,410.47 | 4,758,976.25 |
Goods handling expenses | 3,554,448.64 | 3,796,669.45 |
Voluntary indirect employee | 1,169,549.23 | 1,102,798.23 |
Rental expenses | 753,212.00 | 624,311.49 |
Credit losses | 236,749.89 | 137,222.70 |
Other expenses *) | 18,306,736.73 | 9,536,512.82 |
Total | 104,390,638.54 | 90,580,357.65 |
*) 2024 corporate restructuring related |
Auditors' fees | ||
EUR | 2024 | 2023 |
Auditing | 222,490.00 | 319,813.00 |
Tax advisory | 21,987.00 | |
Other Assurance services based | 169,100.00 | |
Other services | 27,165.76 | |
Total | 391,590.00 | 368,965.76 |
176
6. Financial income and expenses | ||
EUR | 2024 | 2023 |
Interest income from Group companies | 31,919,994.41 | 31,226,758.96 |
Dividend from Group companies | 31,416,284.13 | 21,967,400.38 |
Other dividend income | 58,975.00 | 215.00 |
Interest income from parties outside | 821,994.25 | 215,365.05 |
Interest expenses to Group companies | -2,489,627.92 | -1,023,780.14 |
Interest and other financial expenses the Group | -1,092,558.11 | -1,182,513.54 |
Impairment of loan receivables | -3,400,000.00 | |
Foreign exchange gains and losses | -5,215,214.61 | -1,306,114.10 |
Total | 52,019,847.15 | 49,897,331.61 |
7. Appropriations | ||
EUR | 2024 | 2023 |
Difference between depreciation depreciation in taxation | 2,800,632.00 | 1,887,929.29 |
Received Group contributions | 2,340,000.00 | 1,940,000.00 |
Total | 5,140,632.00 | 3,827,929.29 |
8. Income taxes | ||
EUR | 2024 | 2023 |
Taxes for | 166,820.86 | |
Change in deferred taxes *) | -907,012.21 | -8,516,873.97 |
Total | -907,012.21 | -8,350,053.11 |
*) Includes def.tax liability change |
Non-current assets | ||
9. Intangible assets | ||
Intangible rights | ||
EUR | 2024 | 2023 |
Acquisition cost 1.1. | 29,900,223.01 | 30,024,007.60 |
602,346.18 | 1,338,698.50 | |
868,867.70 | 4,918,166.15 | |
-20,356,628.90 | -6,380,649.24 | |
Acquisition cost 31.12. | 11,014,807.99 | 29,900,223.01 |
Accumulated amortisation 1.1. | 22,556,161.81 | 24,196,616.73 |
-20,353,853.80 | -6,380,649.24 | |
3,493,204.76 | 4,740,194.32 | |
Accumulated amortisation 31.12. | 5,695,512.77 | 22,556,161.81 |
Carrying amount 31.12. | 5,319,295.22 | 7,344,061.20 |
Other intangible assets | ||
EUR | 2024 | 2023 |
Acquisition cost 1.1. | 705,768.85 | |
Acquisition cost 31.12. | 12,287.00 | |
Accumulated amortisation 1.1. | 634,884.71 | |
Amortisation for the financial year | 70,884.14 | |
Accumulated amortisation 31.12. | 12,287.00 |
Advance payments and construction | ||
EUR | 2024 | 2023 |
Acquisition cost 1.1. | 700,346.73 | 3,945,813.28 |
Increases | 1,206,563.09 | 1,672,699.60 |
Transfers between items | -868,867.70 | -4,918,166.15 |
Acquisition cost 31.12. | 1,038,042.12 | 700,346.73 |
Carrying amount 31.12. | 1,038,042.12 | 700,346.73 |
Intangible assets, total | 6,357,337.34 | 8,044,407.93 |
177
10. Tangible assets | ||
Machinery and equipment | ||
EUR | 2024 | 2023 |
Acquisition cost 1.1. | 37,221,173.60 | 35,142,841.09 |
Increases | 563,342.38 | 276,983.14 |
Transfers between items | 1,437,511.48 | 3,321,715.18 |
Decreases | -1,071,503.92 | -1,520,365.81 |
Acquisition cost 31.12. | 38,150,523.54 | 37,221,173.60 |
Accumulated depreciation 1.1. | 18,534,490.17 | 16,425,445.15 |
Accumulated depreciation on | -1,071,503.92 | -1,520,365.81 |
Depreciation for the financial year | 4,129,580.67 | 3,629,410.83 |
Accumulated depreciation 31.12. | 21,592,566.92 | 18,534,490.17 |
Carrying amount 31.12. | 16,557,956.62 | 18,686,683.43 |
Modification and renovation expenses | ||
EUR | 2024 | 2023 |
Acquisition cost 1.1. | 6,396,662.05 | 7,010,580.01 |
Transfers between items | 505,065.89 | 913,129.72 |
Decreases | -157,779.40 | -1,527,047.68 |
Acquisition cost 31.12. | 6,743,948.54 | 6,396,662.05 |
Accumulated depreciation 1.1. | 3,435,759.34 | 3,983,101.10 |
Accumulated depreciation on | -157,779.40 | -1,527,047.68 |
Depreciation for the financial year | 871,542.35 | 979,705.92 |
Accumulated depreciation 31.12. | 4,149,522.29 | 3,435,759.34 |
Carrying amount 31.12. | 2,594,426.25 | 2,960,902.71 |
Other tangible assets | ||
EUR | 2024 | 2023 |
Acquisition cost 1.1. | 54,601.65 | 54,601.65 |
Decreases | -48,774.50 | |
Acquisition cost 31.12. | 5,827.15 | 54,601.65 |
Carrying amount 31.12. | 5,827.15 | 54,601.65 |
Advance payments and construction | ||
EUR | 2024 | 2023 |
Acquisition cost 1.1. | 300,227.73 | 1,192,370.67 |
Increases | 2,827,573.84 | 3,342,701.96 |
Transfers between items | -1,942,577.37 | -4,234,844.90 |
Acquisition cost 31.12. | 1,185,224.20 | 300,227.73 |
Carrying amount 31.12. | 1,185,224.20 | 300,227.73 |
Tangible assets, | 20,343,434.22 | 22,002,415.52 |
11. Investments | ||
Investments in Group companies | ||
EUR | 2024 | 2023 |
Acquisition cost 1.1. | 311,436,627.98 | 309,936,627.98 |
Increases *) | 600,000.00 | 1,500,000.00 |
Impairments **) | -3,400,000.00 | |
Carrying amount 31.12. | 308,636,627.98 | 311,436,627.98 |
Other shares and participations | ||
EUR | 2024 | 2023 |
Acquisition cost 1.1. | 748,761.86 | 748,761.86 |
Decreases | -4,128.00 | |
Carrying amount 31.12. | 744,633.86 | 748,761.86 |
Investments, total | 309,381,261.84 | 312,185,389.84 |
12. Current receivables | ||
Trade receivables | ||
EUR | 2024 | 2023 |
Non-interest-bearing trade receivables | 3,074,475.09 | 4,044,287.40 |
Total | 3,074,475.09 | 4,044,287.40 |
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Receivables from Group companies | ||
EUR | 2024 | 2023 |
Group contribution receivables | 4,490,000.00 | 3,650,000.00 |
Trade receivables | 5,564,349.67 | 5,708,423.71 |
Prepayments and accrued income | 66,407.00 | 1,579.99 |
Total | 10,120,756.67 | 9,360,003.70 |
Other receivables | ||
EUR | 2024 | 2023 |
Other receivables | 226,394.85 | 317,478.13 |
Total | 226,394.85 | 317,478.13 |
Prepayments and accrued income | ||
EUR | 2024 | 2023 |
Taxes | 4,127,179.73 | |
Periodised ICT expenses | 3,137,742.55 | 2,903,066.88 |
Receivable from credit card co | 1,785,325.78 | 1,849,128.00 |
Periodised indirect employee | 1,092,483.00 | 1,227,285.00 |
Receivables from suppliers | 1,055,240.79 | 1,096,698.49 |
Other prepayments and accrued | 1,193,589.88 | 1,529,526.23 |
Total | 8,264,382.00 | 12,732,884.33 |
13. Cash in hand and at banks |
Cash in hand and at banks |
14. Changes in equity
As of 31 December 2023, a total number of shares was 158,715,555.
In January 2024, 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 307,489 new shares of the Company in deviation from the shareholders’
pre-emptive subscription rights to such creditor of the Company whose previously
conditional or disputed restructuring debt under the restructuring programme had been
confirmed to their final amounts by 9 November 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.
In June 2024, 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 2,599,852 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 13 June 2024 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 issues in January and June 2024, the total number of shares in
the Company has increased to a total of 161,622,896 shares.
On 31 December 2024 Lindex Group plc’s share capital was EUR 77.6 million. All the
shares issued have been fully paid in.
Share capital | ||
EUR | 2024 | 2023 |
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 | 76,138,713.65 | 73,556,844.86 |
2,647,424.71 | 2,581,868.79 | |
Reserve for invested unrestricted | 78,786,138.36 | 76,138,713.65 |
Retained earnings 1.1. | 237,323,382.78 | 219,326,940.89 |
Retained earnings 31.12. | 237,323,382.78 | 219,326,940.89 |
Net profit (loss) for the financial year | 16,480,950.02 | 17,996,441.89 |
Equity, total | 410,147,009.42 | 391,018,634.69 |
Breakdown of distributable funds 31.12. | ||
EUR | 2024 | 2023 |
Funds | 78,786,138.36 | 76,138,713.65 |
Retained earnings | 237,323,382.78 | 219,326,940.89 |
Net profit (loss) for the financial year | 16,480,950.02 | 17,996,441.89 |
Total | 332,590,471.16 | 313,462,096.43 |
During the restructuring programme |
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15. Parent company's shares | ||
pcs. | 2024 | 2023 |
Shares (1 vote each) | 161,622,896 | 158,715,555 |
Total | 161,622,896 | 158,715,555 |
16. Accumulated appropriations |
The accumulated appropriations |
17. Provisions | ||
Other provisions | ||
EUR | 2024 | 2023 |
Provision on the claims on rental | 15,911,836.57 | 18,033,041.57 |
as part of company restructuring | 15,911,836.57 | 18,033,041.57 |
Total | 15,911,836.57 | 18,033,041.57 |
As of the end of the reporting period, there was one remaining disputed claim amounting
to EUR 15.9 million related to the termination of a long-term lease agreement. The
administrator of the restructuring programme has disputed the claim, considering it
justified to pay 18 months’ rent for the lease instead of all the years left in the terminated
lease contract. The claim will be settled in the Court of Appeal, and the amount and the
time of realisation of the claim remain uncertain. The provision for disputed claim
corresponds to the full amount of the remaining claim.
18. Non-current liabilities | ||
EUR | 2024 | 2023 |
Bonds | 73,142,624.00 | 72,022,624.00 |
Deferred tax liabilities | 6,380,724.21 | 5,897,953.00 |
Other payables | 1,600,000.00 | 3,200,000.00 |
Liabilities to Group companies | 97,091,100.30 | 96,316,419.01 |
part of company restructuring | 63,900,534.46 | 63,900,534.46 |
Non-current liabilities, total | 178,214,448.51 | 177,436,996.01 |
19. Current liabilities | ||
EUR | 2024 | 2023 |
Interest-bearing liabilities | 1,725,387.09 | 1,694,079.67 |
Non-interest-bearing liabilities | 43,645,836.36 | 52,973,310.75 |
part of company restructuring | 1,415,338.30 | |
Total | 45,371,223.45 | 54,667,390.42 |
Restructuring debt | ||
EUR | 2024 | 2023 |
Current non-interest-bearing restructuring | ||
Unsecured | 1,415,338.30 | |
Current non-interest-bearing restructuring | 1,415,338.30 | |
Restructuring debt related to provisions | 15,911,836.57 | 18,033,041.57 |
Restructuring debt to group | ||
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 | 63,900,534.46 | 63,900,534.46 |
Restructuring debt total | 79,812,371.03 | 83,348,914.33 |
Liabilities to Group companies | ||
EUR | 2024 | 2023 |
Trade payables | 1,786,249.02 | 1,736,801.00 |
Accrued liabilities | 75,588.83 | 258,477.90 |
Total | 1,861,837.85 | 1,995,278.90 |
20. Accruals and prepaid income, current | ||
EUR | 2024 | 2023 |
Accrued personnel expenses | 9,047,877.26 | 10,000,613.41 |
Periodised purchases of stock | 2,683,272.59 | 7,796,107.02 |
Reserve for returns and accrued | 1,369,636.00 | 1,279,578.00 |
Accrued professional expenses | 1,791,546.00 | 198,967.00 |
Other accrued expenses and | 1,145,701.24 | 1,046,315.46 |
Total | 16,038,033.09 | 20,321,580.89 |
180
21. Contingent liabilities | ||
Security pledged on behalf | ||
EUR | 2024 | 2023 |
Rent guarantees *) | 10,095,080.60 | 9,295,597.78 |
Other guarantees | 69,040.91 | |
Total | 10,095,080.60 | 9,364,638.69 |
*) 2023 corrected guarantees on |
22. Liability engagements and other commitments | ||
EUR | 2024 | 2023 |
Rental commitments | 460,167,532.00 | 448,696,183.00 |
Electricity commitments | 662,256.00 | 1,129,609.80 |
Leasing commitments | 434,016.55 | 406,198.05 |
Total | 461,263,804.55 | 450,231,990.85 |
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 | 100 | 100 |
Lindex Holding AB, Stockholm | 100 | 100 |
Other companies | |
Parent company holdings | Shareholding % |
Kiinteistö Oy Tapiolan | 37.8 |
24. Events after the reporting period
Lindex Group plc announced on 7 February 2025 that the rental agreement for the
Stockmann Itis department store in Helsinki will expire on 1 August 2025. The company
plans to close the department store. If materialised, the planned closure would not have a
material impact on the profitability or financial position of the company.
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Board proposal for disposal of net result of the financial year
During the restructuring programme, the parent company is not allowed to distribute funds.
The Board of Directors proposes to the Annual General Meeting that the net result of the
financial year 2024 will be carried further in the retained earnings.
Signatures on the financial statements and the report of the Board of
Directors
The financial statements, prepared in accordance with applicable accounting regulations,
give true and fair view of the assets, liabilities, financial position, and profit or loss of the
company and the group of companies included in its consolidated financial statements.
The report of the Board of Directors contains a truthful description of the development and
result of the business operations of both the company and the group of companies included
in its consolidated financial statements, as well as a description of the most significant risks
and uncertainties and other aspects of the company's condition.
The sustainability report included in the report of the Board of Directors has been prepared in
accordance with the reporting standards referred to in Chapter 7 of the Finnish Accounting
Act and Article 8 of the Taxonomy Regulation.
Helsinki, 6 March 2025
Sari Pohjonen Stefan Björkman Timo Karppinen
Roland Neuwald Tracy Stone Harriet Williams
Susanne Ehnbåge
CEO
The Auditor’s Note
A report of the audit performed has been issued today.
Helsinki, 6 March 2025
Ernst & Young Oy
Authorised Public Accountant Firm
Terhi Mäkinen
Authorised Public Accountant
182
AUDITOR’S REPORT (Translation of the Finnish original)
To the Annual General Meeting of Lindex Group plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Lindex Group plc (business identity code 0114162-2) (former Stockmann plc) for the year ended 31 December, 2024. 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
●
the consolidated financial statements give a true and fair view of the group’s financial position, financial performance and cash flows in accordance with IFRS Accounting
Standards as adopted by the EU.
●
the financial statements give a true and fair view of the parent company’s financial performance and financial position in accordance with the laws and regulations governing
the preparation of financial statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the
Auditor’s Responsibilities for
the Audit of the Financial Statements
We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent company and group companies are in compliance with laws and regulations
applicable in Finland regarding these services, and we have not provided any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services
that we have provided have been disclosed in note 2.6 to the
consolidated financial statements and note 5 to the parent company financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have fulfilled the responsibilities described in the
Auditor’s Responsibilities for the Audit of the Financial Statements
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.
183
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.
ey Audit Matter | How our audit addressed the Key |
Valuation of Goodwill We refer to the Group’s At the balance sheet date EUR 242,6 million and the trademark assets and 82 % of total equity EUR 81,9 million representing goodwill and trademark are related The valuation of goodwill ● ● ● The cash flows of the cash in the assumptions used can significantly is dependent on several assumptions used. Changes in these assumptions trademark. | Our audit procedures ● 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. ● focused on whether any reasonably possible change in assumptions could cause the carrying amount to exceed its recoverable amount. ● comparing forecasts to the latest budgets approved by the board. ● benchmarking the value in use of Lindex with peer company information. ● the groups’ disclosures related to impairment tests in note 3.2 in the financial statements with presentation requirements in applicable accounting standards and we reviewed the information provided on sensitivity analysis. |
Revenue Recognition We refer to the Group’s Revenue is generated from sales online platforms as well Revenue is recognized upon delivery performed. The group focuses on revenue as | To audit procedures included ● principles relating to applicable accounting standards; ● ● ● ● |
184
an incentive for revenue to be recognized before the control of goods or services
has transferred to the customer. Revenue recognition was a key audit matter due to
the high volume of transactions, different kind of delivery methods and the
management judgement involved in accounting for right of return and loyalty bonus.
Revenue recognition was also a significant risk of material misstatement referred to
in EU Regulation No 537/2014, point (c) of Article 10(2).
lead times; and
●
Valuation of inventories
We refer to the Group’s accounting policies and the note 2.4
At the balance sheet date 31 December 2024, the value of inventory amounted to
EUR 169,6 million representing 13 % of total assets and 43 % of total equity (2023:
EUR 162,9 million representing 12 % of total assets and 42 % 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:
●
accounting standards.
●
and to sales prices.
●
slow moving and obsolete stock and to the expected sales and net realizable
value.
●
●
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
185
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
●
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
●
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the parent company’s or the group’s internal control.
●
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
●
Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern basis of accounting and based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the parent company or the group to cease to continue as a going concern.
●
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying
transactions and events so that the financial statements give a true and fair view.
●
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis
for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes 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.
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 4 years.
186
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 compliance with the applicable provisions, excluding the
sustainability report information on which there are provisions in Chapter 7 of the Accounting Act and in the sustainability reporting standards.
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 compliance with the applicable provisions. Our opinion does not cover the sustainability report information on which there are provisions
in Chapter 7 of the Accounting Act
and in the sustainability reporting standards.
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 6.3.2025
Ernst & Young Oy
Authorized Public Accountant Firm
Terhi Mäkinen
Authorized Public Accountant
187
(Translation of the Finnish original)
Independent Auditor’s Report on the ESEF Consolidated Financial
Statements of Lindex Group Plc
To the Board of Directors of Lindex Group Plc
We have performed a reasonable assurance engagement on the financial statements
743700IFQI6W89M1IY95-2024-12-31-0-fi.zip of Lindex Group Plc (y-identifier : 0114162-
2) that have been prepared in accordance with the Commission’s regulatory technical
standard for the financial year ended 31.12.2024.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the preparation of
the company’s report of Board of Directors and financial statements (the ESEF financial
statements) in such a way that they comply with the requirements of the Commission’s
regulatory technical standard. This responsibility includes:
●
Article 3 of the Commission’s regulatory technical standard
●
in the consolidated financial statements that are included in the ESEF financial
statements with iXBRL tags in accordance with Article 4 of the Commission’s
regulatory technical standard and
●
financial statements.
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 ESEF financial
statements in accordance the requirements of the Commission’s regulatory technical
standard.
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 requirement s.
Auditor’s Responsibilities
Our responsibility is to, in accordance with Chapter 7, Section 8 of the Securities Market s
Act, provide assurance on the financial statements that have been prepared in
accordance with the Commission’s technical regulatory standard. We express an opinion
on whether the consolidated financial statements that are included in the ESEF financial
statements have been tagged, in all material respects, in accordance with the
requirements of Article 4 of the Commission's regulatory technical standard.
Our responsibility is to indicate in our opinion to what extent the assurance has been
provided. We conducted a reasonable assurance engagement in accordance with
International Standard on Assurance Engagements (ISAE) 3000.
The engagement includes procedures to obtain evidence on:
●
that are included in the ESEF financial statements have been tagged, in all
material respects, with iXBRL tags in accordance with the requirements of Article
4 of the Commission's regulatory technical standard
●
statements that are included in the ESEF financial statements have been tagged,
in all material respects, with iXBRL tags in accordance with the requirements of
Article 4 of the Commission's regulatory technical standard and
●
audited financial statements.
The nature, timing and extent of the selected procedures depend on the auditor’s
judgement. This includes an assessment of the risk of material deviations due to fraud or
error from the requirements of the Commission’s technical regulatory standard.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
188
Opinion
Our opinion pursuant to Chapter 7, Section 8 of the Securities Markets Act is that the
primary financial statements, notes and company's identification data in the consolidated
financial statements that are included in the ESEF financial statements of Lindex Group
Plc 743700IFQI6W89M1IY95-2024-12-31 -0-fi.zip for the financial year ended 31.12.2024
have been tagged, in all material respects, in accordance with the requirements of the
Commission's regulatory technical standard.
Our opinion on the audit of the consolidated financial statements of Lindex Group Plc for
the financial year ended 31.12.2024 has been expressed in our auditor's report 6.3.2025.
With this report we do not express an opinion on the audit of the consolidated financial
statements nor express another assurance conclusion.
Helsinki 7.3.2025
Ernst & Young Oy
Authorized Public Accountant Firm
Terhi Mäkinen
Authorized Public Accountant
189
ASSURANCE REPORT ON THE SUSTAINABILITY STATEMENT
(Translation of the Finnish original)
To the Annual General Meeting of Lindex Group plc
We have performed a limited assurance engagement on the group sustainability statement of
Lindex Group plc (0114162 -2) that is referred to in Chapter 7 of the Accounting Act and that is
included in the report of the Board of Directors for the financial year 1.1.–31.12.2024.
Opinion
Based on the procedures we have performed and the evidence we have obtained, nothing has
come to our attention that causes us to believe that the group sustainability statement does
not comply, in all material respects, with
1)
the requirements laid down in Chapter 7 of the Accounting Act and the sustainability
reporting standards (ESRS);
2)
the requirements laid down in Article 8 of the Regulation (EU) 2020/852 of the
European Parliament and of the Council on the establishment of a framework to
facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (EU
Taxonomy).
Point 1 above also contains the process in which Lindex Group plc has identified the
information for reporting in accordance with the sustainability reporting standards (double
materiality assessment) and the tagging of information as referred to in Chapter 7, Section 22
of the Accounting Act.
Our opinion does not cover the tagging of the group sustainability statement with digital XBRL
sustainability tags in accordance with Chapter 7, Section 22, Subsection 1(2), of the
Accounting Act, because sustainability reporting companies have not had the possibility to
comply with that provision in the absence of the ESEF regulation or other European Union
legislation.
Basis for Opinion
We performed the assurance of the group sustainability statement as a limited assurance
engagement in compliance with good assurance practice in Finland and with the International
Standard on Assurance Engagements (ISAE) 3000 (Revised)
Assurance Engagements Other
than Audits or Reviews of Historical Financial Information
.
Our responsibilities under this standard are further described in the
Responsibilities of the
Group Sustainability Auditor
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Other Matter
We draw attention to the fact that the group sustainability statement of Lindex Group plc that is
referred to in Chapter 7 of the Accounting Act has been prepared and assurance has been
provided for it for the first time for the financial year 1.1.–31.12.20 24. Our opinion does not
cover the comparative information that has been presented in the group sustainability
statement. Our opinion is not modified in respect of this matter.
Group sustainability auditor's Independence and Quality Management
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 engagement,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
The group sustainability auditor applies International Standard on Quality Management ISQM
1, which requires the sustainability audit 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.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director of Lindex Group plc are responsible for:
●
the group sustainability statement and for its preparation and presentation in
accordance with the provisions of Chapter 7 of the Accounting Act, including the
process that has been defined in the sustainability reporting standards and in which
the information for reporting in accordance with the sustainability reporting standards
190
has been identified as well as the tagging of information as referred to in Chapter 7,
Section 22 of the Accounting Act and
●
the compliance of the group sustainability statement with the requirements laid down
in Article 8 of the Regulation (EU) 2020/852 of the European Parliament and of the
Council on the establishment of a framework to facilitate sustainable investment, and
amending Regulation (EU) 2019/2088;
●
such internal control as the Board of Directors and the Managing Director determine
is necessary to enable the preparation of a group sustainability statement that is free
from material misstatement, whether due to fraud or error.
Inherent Limitations in the Preparation of a Sustainability Statement
The preparation of the group sustainability statement requires a materiality assessment from
the company in order to identify relevant disclosures. This significantly involves management
judgment and choices. Group Sustainability reporting is also characterized by estimates and
assumptions, as well as measurement and estimation uncertainty.
The determination of greenhouse gases is subject to inherent uncertainty due to the
incomplete scientific data used to determine the emission factors and the numerical values
needed to combine emissions of different gases.
In addition, when reporting forward-looking information, the company must make assumptions
about possible future events and disclose the company's possible future actions in relation to
these events. The actual outcome may be different because predicted events do not always
occur as expected.
Responsibilities of the Group Sustainability Auditor
Our responsibility is to perform an assurance engagement to obtain limited assurance about
whether the group sustainability statement is free from material misstatement, whether due to
fraud or error, and to issue a limited assurance report that includes our opinion. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the decisions of users taken on the basis of
the group sustainability statement.
Compliance with the International Standard on Assurance Engagements (ISAE) 3000
(Revised) requires that we exercise professional judgment and maintain professional
skepticism throughout the engagement. We also:
●
Identify and assess the risks of material misstatement of the group sustainability
statement, whether due to fraud or error, and obtain an understanding of internal
control relevant to the engagement in order to design assurance procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the parent company’s or the group’s internal control.
●
Design and perform assurance procedures responsive to those risks to obtain
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.
Description of the Procedures That Have Been Performed
The procedures performed in a limited assurance engagement vary in nature and timing from,
and are less in extent than for, a reasonable assurance engagement. The nature, timing and
extent of assurance procedures selected depend on professional judgment, including the
assessment of risks of material misstatement, whether due to fraud or error. Consequently,
the level of assurance obtained in a limited assurance engagement is substantially lower than
the assurance that would have been obtained had a reasonable assurance engagement been
performed.
Our procedures included e.g. the following:
●
We have interviewed the key persons responsible for collecting and reporting the
information included in the group sustainability statement.
●
Through interviews, we gained an understanding of the group’s control environment
related to the group sustainability reporting process.
●
We evaluated the implementation of the company's double materiality assessment
process against the requirements of ESRS standards and the compliance of the
information provided for the double materiality assessment with ESRS standards.
191
●
We assessed whether the group sustainability statement in material respect meets
the requirements of ESRS standards for material sustainability topics:
-
We have tested the accuracy of the information presented in the group
sustainability statement by comparing the information on a sample basis with
supporting company documentation.
-
We have on a sample basis performed analytical assurance procedures and
related inquiries, recalculation and inspected documentation, as well as
tested data aggregation to assess the accuracy of the group sustainability
statement.
●
We gained an understanding of the process by which a company has defined
taxonomy-eligible and taxonomy-aligned economic activities and evaluate the
regulatory compliance of the information provided.
Helsinki 6.3.2025
Ernst & Young Oy
Authorized Sustainability Audit Firm
Terhi Mäkinen
Authorized Sustainability Auditor