INTERIM REPORT OF MARIMEKKO CORPORATION, 1 January–31 March 2022:
Marimekko’s net sales and result continued to grow in the first
quarter of 2022
Marimekko Corporation, Interim Report, 13 May 2022 at 8.00
a.m.
INTERIM REPORT OF MARIMEKKO CORPORATION, 1 January–31
March 2022:
Marimekko’s net sales and result continued to grow in the
first quarter of 2022
This release is a summary of Marimekko’s interim report for the
January-March period of 2022. The complete report is attached to
this release as a pdf file and it is also available on the
company’s website at company.marimekko.com under Releases &
publications.
The first quarter in brief
- Marimekko’s net sales grew by 24
percent to EUR 36.0 million (29.1). In Finland, net sales rose by
27 percent, while international net sales grew by 20 percent.
- Net sales were boosted both by a
favorable trend in wholesale and retail sales in Finland as well as
the good development of international net sales with sales growing
in all market areas.
- As in the comparison period, nearly
all of Marimekko’s own stores were open in the first quarter, and
the footfall in the stores grew clearly from the comparison period,
when the pandemic situation had a stronger impact on footfall.
- Operating profit improved to EUR 6.6
million (5.6). Comparable operating profit grew by 18 percent to
EUR 6.6 million (5.6) and was 18.4 percent of net sales
(19.3).
- Earnings were boosted especially by
increased net sales. On the other hand, an increase in fixed costs
as well as lower relative sales margin had a weakening impact on
result.
- The Annual General Meeting decided
to pay a regular dividend of EUR 1.60 per share and an
extraordinary dividend of EUR 2.00 per share for 2021. The dividend
was paid on 25 April 2022.
- In addition, the AGM decided on
issuance of shares without payment (split) to enhance the liquidity
of the company’s shares. New shares were issued to the shareholders
without payment in proportion to their holdings so that four (4)
new shares were issued for each share. The new shares were
registered in the trade register on 14 April 2022 and the trading
with the new shares began on 19 April 2022.
Financial guidance for 2022
The Marimekko Group's net sales for 2022 are expected to grow
from the previous year (2021: EUR 152.2 million). Comparable
operating profit margin is estimated to be approximately some 17–20
percent (2021: 20.5 percent). Global supply chain disruptions and
generally increased material and logistics costs in particular
cause volatility to the outlook for 2022.
Uncertainties related to the development of net sales and result
are described in more detail in the Major risks and factors of
uncertainty section of this Interim Report.
Key figures
(EUR million) |
1–3/ 2022 |
1–3/2021 |
Change,% |
1–12/2021 |
Net Sales |
36.0 |
29.1 |
24 |
152.2 |
International sales |
17.5 |
14.6 |
20 |
59.9 |
% of net sales |
49 |
50 |
|
39 |
EBITDA * |
9.1 |
8.6 |
6 |
43.1 |
Comparable EBITDA * |
9.1 |
8.6 |
6 |
43.1 |
Operating profit * |
6.6 |
5.6 |
18 |
31.2 |
Operating profit margin, % * |
18.4 |
19.3 |
|
20.5 |
Comparable operating profit * |
6.6 |
5.6 |
18 |
31.2 |
Comparable operating profit margin, % * |
18.4 |
19.3 |
|
20.5 |
Result for the period * |
5.0 |
4.4 |
14 |
24.4 |
Earnings per share, EUR *, ** |
0.12 |
0.11 |
14 |
0.60 |
Comparable earnings per share, EUR *, ** |
0.12 |
0.11 |
14 |
0.60 |
Cash flow from operating activities * |
-3.1 |
1.5 |
|
35.9 |
Return on investment (ROI), % * |
35.2 |
29.0 |
|
33.0 |
Equity ratio, % * |
57.2 |
46.8 |
|
53.3 |
Net debt / EBITDA (rolling 12 months) |
-0.31 |
0.08 |
|
-0.64 |
Gross investments * |
0.1 |
0.4 |
-61 |
0.2 |
Personnel at the end of the period |
409 |
416 |
-2 |
409 |
outside Finland |
74 |
79 |
-6 |
69 |
Brand sales 1 |
88.3 |
67.4 |
31 |
375.6 |
outside Finland |
61.8 |
46.8 |
32 |
247.6 |
proportion of international sales, % |
70 |
69 |
|
66 |
Number of stores |
147 |
154 |
-5 |
152 |
* The quarterly figures for comparable period have been restated
as the accounting principle changed in 2021 following the IFRS
Interpretations Committee agenda decision. Additional information
is presented in the accounting principles of this Interim
Report.
** Per-share key figures have been calculated and the figures
for the comparable period have been restated using the new total
number of shares following the issuance of shares without payment
(share split), in accordance with the decision made by the AGM on
12 April 2022.
The change percentages in the table were calculated on exact
figures before the amounts were rounded to millions of euros. The
figure for comparable earnings per share takes account of similar
items as comparable operating profit; tax effect included.
1 Brand sales are given as an alternative non-IFRS key figure,
representing the reach of the Marimekko brand through different
distribution channels. An unofficial estimate of sales of Marimekko
products at consumer prices, brand sales are calculated by adding
together the company’s own retail net sales and the estimated
retail value of Marimekko products sold by other retailers. The
estimated retail value is based on the company’s realized wholesale
sales and licensing income. Brand sales do not include VAT, and the
key figure is not audited. At the beginning of 2021, the
coefficients used to calculate brand sales were adjusted, and the
figures for the comparison year have been restated accordingly.
Some licensees provide exact retail figures, in which case these
figures are used in reporting brand sales. For other licensing
agreements, Marimekko’s own retail coefficients for different
markets are used.
Tiina Alahuhta-Kasko, President and CEO, in conjunction
with the report:
“Marimekko’s good development continued in the first quarter of
2022. Our net sales grew and our operating profit improved.
The strong development of our business is based on the
constantly growing desirability of our brand – which we develop
with a long-term approach – as well as collections that appeal to
our customers and the increasingly agile operating methods we have
adopted over the past few years, among other factors. Our
strengthened competitiveness and profitable growth are the result
of excellent work done by everyone at Marimekko.
In January–March, our net sales increased by 24 percent to EUR
36.0 million (29.1). Growth was driven both by higher wholesale and
retail sales in Finland as well as the positive development of
international net sales, with sales growing in every market area.
Our omnichannel retail sales grew by 22 percent, while wholesale
sales increased by 23 percent.
Our comparable operating profit, which rose to EUR 6.6 million
(5.6) in January–March, was boosted in particular by increased
sales. To reinforce our long-term international growth, during the
review period we invested in areas such as increasing Marimekko’s
brand awareness, digital business and IT systems, as well as
recruitments that support growth. As planned, this raised our fixed
costs in the first quarter. In addition to our investments in
growth, our costs in 2022 are also being increased by the general
rise in material and logistics costs as well as the global supply
chain disruptions that are still caused by the pandemic and made
worse by the war in Ukraine, which touches all of us on a human
level. Russia’s attack on Ukraine has deeply shocked all of us at
Marimekko, and our thoughts are with the people of Ukraine. We try
to help them with our small contribution.
In February, we presented our winter 2022 collection at
Copenhagen Fashion Week. The collection was designed with a focus
on combinability and layering. Improved combinability between
seasons and the new block fits and archetype silhouettes that draw
inspiration from our archives further strengthen the timelessness
and sustainability of Marimekko’s design. We also took our first
steps toward a value chain that is in line with the principles of
the circular economy when, at the beginning of the year, we started
a cooperation concerning the recycling of end-of-life textiles.
Rester Oy’s recycling facility in Paimio, Finland, makes new
textile fibers from the end-of-life-textiles of Marimekko’s own
production, i.e. from the textile printing factory and sewing shop
in Helsinki.
In March, we announced our third limited-edition collection with
adidas, a global leader in the sporting goods and apparel industry.
The collection, which launched in April, further increases
Marimekko’s brand awareness internationally and thereby supports
our international growth strategy. Furthermore, we joined forces in
the Chinese market with a local lifestyle brand, the Beast, to
launch a limited-edition collection of home products as well as
Marimekko’s first perfume. In addition to global brand partnerships
that provide us with extensive visibility, these types of targeted
local collaborations are an important way to introduce more and
more new audiences to Marimekko.
In 2022, we are continuing our efforts to accelerate our
long-term international growth. As our business model and strategy
of profitable growth do not tie up significant amounts of capital,
and because the company’s financial position is strong, the Annual
General Meeting held after the review period decided to distribute
an extraordinary dividend in addition to the regular dividend for
the financial year 2021. The AGM also resolved to carry out a share
issue without payment, directed to the company’s shareholders. The
number of shares increased fivefold as a result of the share issue.
The purpose of the share split is to enhance the liquidity of the
company’s shares.
After the review period, we have already announced upcoming
brand collaborations with IKEA and the modern luxury brand Mansur
Gabriel, for example. Marimekko is moving ahead systematically with
the execution of the company’s strategy of profitable growth. We
are pleased that our loyal long-term customers, the many new
friends of Marimekko and our growing group of shareholders have
decided to join us on this inspiring journey.”
Market outlook and growth targets for 2022
The coronavirus pandemic has been the worst crisis experienced
by the global fashion industry and specialty retail sector in
decades, and it will impact the sector in 2022 as well. The
development of the pandemic situation in different markets,
political tensions, and increased inflation impact the global
economic trend as well as consumers’ purchasing behavior and, as a
result, can have an impact on Marimekko’s business. The war in
Ukraine does not directly affect Marimekko’s business as
Marimekko’s products are not manufactured or sold in Russia,
Belarus or Ukraine and the company does not source raw materials
from these countries. However, the war in Ukraine causes
disturbances in global supply chains and contributes to the general
economic situation and consumers’ buying power and behavior. These
factors may affect company’s sales and profitability as well as
operational reliability and efficiency of the company’s value
chain.
Finland, Marimekko’s important domestic market, traditionally
represents about half of the company’s net sales. Sales in Finland
are expected to grow on the previous year. The total value of
nonrecurring promotional deliveries in wholesale in 2022 is
estimated to be substantially lower than the year before.
The Asia-Pacific region is Marimekko’s second-largest market and
it plays a significant part in the company’s international growth.
Japan is clearly the most important country in this region to
Marimekko and already has a very comprehensive network of Marimekko
stores. The other Asian countries’ combined share of the company’s
net sales is still smaller than in Japan, but operations in these
countries are constantly growing. All brick-and-mortar Marimekko
stores and most online stores in Asia are partner-owned. Net sales
in the Asia-Pacific region are expected to increase clearly in
2022. The aim is to open approximately 5 to 10 new Marimekko stores
and shop-in-shops in 2022, and most of the planned openings will be
in Asia.
Marimekko estimates that both retail and wholesale sales will
increase in 2022. Licensing income is also forecasted to be higher
than in the previous year. Marimekko will continue actions to
control gray exports, but these actions will have a significantly
lower weakening impact on the company’s sales and earnings in 2022
than in the previous year. Because of the seasonal nature of
Marimekko’s business, the major portion of the company’s
euro-denominated net sales and earnings are traditionally generated
during the second half of the year. In percentage terms, net sales
growth is expected to be stronger at the beginning of 2022 than in
the second half of the year. In 2021, the pandemic situation had a
negative impact on the footfall in Marimekko's own stores at the
beginning of the year and the net sales in the second half of the
year were supported, for example, by substantial nonrecurring
promotional deliveries in wholesale in Finland.
The coronavirus pandemic, related restrictions and the war in
Ukraine cause disruptions in global supply chains. These
disruptions have resulted in delivery delays, and thus can impact
Marimekko’s net sales and profitability. In addition, disruptions
in supply chain increase logistics costs, which have also grown
overall worldwide. Furthermore, net sales and earnings essentially
depend on maintaining the operational reliability and efficiency of
distribution centers and logistics in the exceptional situation.
Costs of raw and other materials have increased globally. Early
commitment to product orders, which is typical of the fashion and
design industry, means that changes in raw and other material
prices affect the company with a delay. In addition, the early
commitment to product orders, further emphasized in the pandemic
situation, undermines the company’s ability to optimize product
orders and respond to rapid fluctuations in demand, especially in
exceptional situations. Marimekko is actively working on mitigating
disruptions in supply chain and the negative effects of increased
costs.
Marimekko continues to accelerate its long-term international
growth. In 2022, it will invest especially in increasing brand
awareness, in digital and omnichannel business, in developing
sustainability, in recruitments supporting its growth as well as in
IT systems. Fixed costs are expected to be up on the previous year.
In 2021, fixed costs were still reduced by partly temporary cost
savings. Marketing expenses are expected to grow (2021: EUR 7.5
million).
Marimekko is closely monitoring the impacts of the war in
Ukraine and the coronavirus pandemic and will adjust its operations
and plans according to the situation.
Media and investor conference
A conference for media and institutional investors will be held
in English on 13 May 2022 at 2.00 p.m. EEST. A live webcast of the
conference can be followed at
https://marimekko.videosync.fi/2022-q1-results/register, and a
recording of the webcast will be available at the same address
later. Questions can be asked during the live webcast in
writing.
Further information:
Tiina Alahuhta-Kasko, President and CEO, tel. +358 9 758 71Elina
Anckar, CFO, tel. +358 9 758 7261
MARIMEKKO CORPORATIONCorporate Communications
Anna TuominenTel. +358 40 5846944anna.tuominen@marimekko.com
DISTRIBUTION:Nasdaq Helsinki LtdKey media
Marimekko is a Finnish lifestyle design company renowned for its
original prints and colors. The company’s product portfolio
includes high-quality clothing, bags and accessories as well as
home décor items ranging from textiles to tableware. When Marimekko
was founded in 1951, its unparalleled printed fabrics gave it a
strong and unique identity. In 2021, the company's net sales were
EUR 152 million and brand sales of the products worldwide amounted
to EUR 376 million. Globally, there are roughly 150 Marimekko
stores, and online store serves customers in 35 countries. The key
markets are Northern Europe, the Asia-Pacific region and North
America. The Group employs about 410 people. The company’s share is
quoted on Nasdaq Helsinki Ltd. www.marimekko.com
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