During 2012, the Marimekko Group’s net sales grew by 14 per cent and international sales by 31 per cent due to openings of new stores. Profitability declined, but cash flow increased significantly. The trend in the closing quarter of the year fell well short of expectations. In 2013, Marimekko will continue moderate investments in growth, concentrating particularly on improving the profitability of the stores opened in 2012.
Year 2012
- Net sales grew by 14.2% to EUR 88.5 million (77.4).
International sales grew by 30.7% and were EUR 36.1 million (27.6). - The strongest growth was in North America at 56.1% and in the Asia-Pacific region at 50.5%, fuelled by the openings of new stores.
- In Finland, sales rose by 5.1% due to good growth in retail sales, reaching EUR 52.3 million (49.8).
- Operating profit fell by 42.8% and was EUR 2.0 million (3.5). A drag on operating profit was exerted by the loss posted by stores in Sweden and the United States at the launching stage, expenses related to expansion of business, and a decline in wholesale sales in Finland, Scandinavia and the United States. Operating profit was also substantially burdened by the high expenses and low cost-effectiveness of in-house manufacturing in Finland.
- Cash flow from operating activities was EUR 8.6 million (0.7).
- Investments were EUR 7.6 million (9.2).
- Brand sales grew by 11.1% and reached EUR 187.2 million (168.6).
The Board of Directors will propose to the Annual General Meeting that a dividend of EUR 0.25 per share be paid for 2012 (0.55).
Q4 of 2012
- Net sales grew by 9.2% to EUR 25.7 million (23.6).
- Operating profit fell by 99.2% to EUR 0.0 million (1.6).
- Cash flow from operating activities was EUR 5.9 million (2.5).
Market outlook and growth targets
The general uncertainty in the global economy is forecast to continue, and this may impact consumers’ purchasing behaviour in all of Marimekko’s market areas. The prospects for the European economic trend have deteriorated and growth is slow in the region. In the United States and Asia, economic forecasts are distinctly better than in Europe, but growth is fairly slow.
In Finland, market conditions are fair, but the economic prospects for trade and industry in Finland for the next few months have deteriorated markedly and retail sales are forecast to decline. (Confederation of Finnish Industries EK: Business Tendency Survey, November 2012, and Economic Review, December 2012). The weak trend in Marimekko’s own stores in Finland at the end of 2012 and lower consumer confidence overshadow prospects for this year in Finland.
The stores opened in 2012 and the other considerable investments made in the expansion of the distribution network will generate a marked increase in sales in 2013. The main thrust in expansion during 2013 will be on openings of retailer-owned Marimekko stores and shop-in-shops.
Furthermore, the company will invest in developing the business of the stores it opened in 2012. The aim is to open 15 to 24 Marimekko stores and shop-in-shops this year, 4 to 6 of which will be company-owned.
The planned total investments for 2013 of the Marimekko Group are estimated as being in excess of EUR 3 million. The majority of investments will be directed at building new store premises and purchasing new furniture.
