Lindex Group: Solid profitability improvement in the fourth quarter, full-year financial performance impacted by challenging market environment
LINDEX GROUP plc, Financial Statement Release 7.2.2025 at 8.30 EET
Lindex Group's Financial Statements Bulletin 2024
Lindex Group: Solid profitability improvement in the fourth quarter, full-year financial performance impacted by challenging market environment
October-December 2024:
- Lindex Group's revenue was EUR 273.7 (274.3) million. The revenue increased by 0.8% in local currencies.
- The Lindex division's revenue was 169.1 (168.2) million. There was a significant revenue increase of 14.9% in the division's digital channels. In local currencies, the revenue increased by 2.3%.
- The Stockmann division's revenue decreased by 1.4% to EUR 104.6 (106.1) million due to lower sales in fashion category. - The Group's gross margin improved to 58.1% (57.5).
- The Group's adjusted operating result increased to EUR 36.1 (30.2) million.
- The Lindex division's adjusted operating result increased to EUR 26.8 (22.3) million due to increased gross profit and good cost control.
- The Stockmann division's adjusted operating result improved to EUR 10.5 (9.0) million due to successful cost efficiency measures. - Operating result increased to EUR 33.1 (28.9) million.
- Net result increased to EUR 19.8 (9.7) million.
- Basic and diluted earnings per share were EUR 0.12 (0.06).
January-December 2024:
- Lindex Group's revenue was EUR 940.1 (951.7) million. The revenue decreased by 1.2%, and in local currencies by 1.3%.
- The Lindex division's revenue was EUR 628.8 (633.1) million. In local currencies, the revenue decreased by 0.9%.
- The Stockmann division's revenue decreased by 2.2% to EUR 311.6 (318.5) million. - 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.
- Net result declined to EUR 13.2 (51.7) million, mainly due to increase in tax expenses and costs related to the restructuring programme. The tax expenses in the comparison period were impacted by a positive tax decision of EUR 28.9 million for Lindex Holding AB.
- Basic and diluted earnings per share were EUR 0.08 (0.33).
- Adjusted earnings per share, basic and diluted, were EUR 0.15 (0.16).
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.
CEO Susanne Ehnbåge:
In 2024, we continued our target-oriented work to build a solid, yet scalable foundation for the future of Lindex Group. In line with our strategy, we want to be fit for capturing new business opportunities, accelerating growth and enhancing value creation for our customers and shareholders. While focusing on serving and inspiring our customers with new collections and services, we made a good and concrete progress in the strategic focus areas of both Lindex and Stockmann division. During the year, we completed several strategic development projects enabling our future success.
We had a strong finish to the year despite the challenging market environment. In the fourth quarter, the Group's adjusted operating result increased to EUR 36.1 (30.2) million, driven by improved gross profit and good cost control. I am pleased with the excellent work done in both divisions that materialised in a significant improvement of the Lindex division's adjusted operating result and in an improvement of the Stockmann division's adjusted operating result. The Group's revenue was on par with the comparison period, reflecting the continued volatility in the fashion market throughout the year.
Regarding our full year performance, weaker purchasing power and low consumer confidence continued to affect the demand on our main markets and impacted the Group's revenue and result. In addition, the logistical challenges faced by the Lindex division mainly during the third quarter had an impact on the performance. Consequently, Lindex Group's adjusted operating result decreased to EUR 74.9 (80.0) million due to lower gross profit and continued investments in the Lindex division's future growth. The Lindex division's adjusted operating result decreased, while the Stockmann division's adjusted operating result improved. Both businesses reported slightly lower revenue compared to the previous year.
A successful launch of the Lindex division's highly automated omnichannel distribution centre took place in November and is now followed by a ramp-up and transition phase. The new facility is planned to be fully operational during 2025 and it will replace the current warehouses. Going forward, the new centre will quadruple Lindex's e-commerce capacity and supply all Lindex fashion stores and partners. We also implemented new digital solutions in both divisions' stores and supply chains, improving customer experience and operational efficiency.
In addition, our journey to reduce climate impact and drive circularity in our assortments continued. In June, the Science Based Targets initiative (SBTi) approved Lindex Group's emission reduction target, which is to reduce absolute greenhouse gas emissions from our own operations and value chain by 42% by 2030 compared to 2022.
I am delighted to see how the Lindex and the Stockmann brands, collections and services continue to resonate among our customers. The amount of new and active loyal customers increased during the year in both divisions. The year also marked the 70th anniversary of Lindex. I see that what once started as a small lingerie company in Alingsås in Sweden is today a growing brand-led international fashion company with a bright future.
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. In December 2024, we announced that our 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. As part of the strategic assessment, Stockmann plc changed its name to Lindex Group plc in March 2024. The restructuring programme of Lindex Group continued to progress during 2024, and all confirmed undisputed debts have now been paid. The restructuring programme has one disputed claim remaining.
I want to sincerely thank everyone at Lindex and Stockmann for their hard work and dedication towards our ambitious goals. I am excited to continue our journey together with our personnel, customers and partners, striving to strengthen our company, drive growth, and increase shareholder value.
KEY FIGURES
10-12 | 10-12 | 1-12 | 1-12 | |
Revenue, EUR mill. | 273.7 | 274.3 | 940.1 | 951.7 |
Revenue growth, % | -0.2 | 0.6 | -1.2 | -3.1 |
Local currency revenue growth, % | 0.8 | 3.9 | -1.3 | 1.6 |
Digital share of revenue, % | 18.9 | 17.3 | 18.1 | 16.8 |
Digital revenue growth in local currencies, % | 8.7 | 5.2 | 6.3 | 3.3 |
Gross profit, EUR mill. | 159.1 | 157.8 | 547.9 | 554.2 |
Gross margin, % | 58.1 | 57.5 | 58.3 | 58.2 |
Adjusted operating result, EUR mill. | 36.1 | 30.2 | 74.9 | 80.0 |
Adjusted operating margin, % | 13.2 | 11.0 | 8.0 | 8.4 |
Operating result, EUR mill. | 33.1 | 28.9 | 60.9 | 76.5 |
Operating margin, % | 12.1 | 10.5 | 6.5 | 8.0 |
Net result for the period, EUR mill. *) | 19.8 | 9.7 | 13.2 | 51.7 |
Net debt excluding IFRS 16 items, EUR mill. | -31.8 | -65.6 | ||
Equity ratio, % | 30.0 | 29.9 | ||
Equity ratio (excluding IFRS 16 items), % | 61.9 | 60.6 | ||
Inventories, EUR mill. | 169.6 | 162.9 | ||
Operating free cash flow, EUR mill. | 60.8 | 67.9 | 20.3 | 70.8 |
Capital expenditure, EUR mill. | 20.5 | 11.5 | 45.7 | 65.1 |
EPS, basic and diluted, EUR **) | 0.12 | 0.06 | 0.08 | 0.33 |
Adjusted EPS, basic and diluted, EUR | 0.14 | 0.07 | 0.15 | 0.16 |
Number of employees, average | 5 746 | 5 801 |
*) The net result for the fourth quarter improved due to higher operating result and decreased tax expenses. The net result for the full year decreased due to lower operating result and increased tax expenses.
**) Earnings per share decreased to EUR 0.08 (0.33) due to the lower net result as explained above and an increased number of shares compared to the previous period (1-12 2023).
ITEMS AFFECTING COMPARABILITY (IAC)
EUR million | 10-12 | 10-12 2023 | 1-12 | 1-12 |
Operating result | 33.1 | 28.9 | 60.9 | 76.5 |
Adjustments to operating result | ||||
Costs related to restructuring programme and other disputes | 0.3 | 1.8 | 10.9 | 2.6 |
Costs related to strategic and organisational development | 2.7 | 1.6 | 7.5 | 2.3 |
Insurance claim settlement for losses related to COVID-19 | 0.0 | -4.4 | ||
Loss on disposal of subsidiary shares | 0.0 | 0.6 | ||
Other operating income from lease modifications of sale-and-leaseback items | -2.1 | -2.1 | ||
Adjusted operating result | 36.1 | 30.2 | 74.9 | 80.0 |
EUR million | 10-12 | 10-12 2023 | 1-12 | 1-12 |
Net result for the period | 19.8 | 9.7 | 13.2 | 51.7 |
Adjustments to operating result | 2.9 | 1.3 | 14.0 | 3.5 |
Adjustments to taxes | -0.6 | -0.7 | -2.8 | -30.1 |
Adjusted net result for the period | 22.1 | 10.3 | 24.4 | 25.1 |
STRATEGY
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 SEK 10 billion by 2030, % | -0.9 | 2.7 | 10.9 |
30% digital share of revenue in the mid-term, % | 20.8 | 19.0 | 18.5 |
15% adjusted operating margin in 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 targets for 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 positive operating free 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.
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.
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 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 Statements Bulletin 2024
This company announcement is a summary of the Lindex Group's Financial Statements Bulletin 2024 and includes the most relevant information of the report. The complete report is attached to this release as a pdf file and is also available on the company's website lindex-group.com.
Annual reporting 2024
Lindex Group's Annual Report, which includes Business review, Financial Review, the Report of the Board of Directors and Sustainability Statement, Remuneration Report and Corporate Governance Statement will be published during the week beginning of 10 March 2025 (week 11).
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:
- Interim Report, January-March: 29 April 2025
- Half Year Financial Report, January-June: 18 July 2025
- Interim Report, January-September: 24 October 2025
Webcast for analysts and the media
A media and analyst briefing will be held in English as a live webcast today, on 7 February 2025 at 10:00 a.m. EET. The event can be followed via this link. The recording and presentation material will be available on the company's website after the event.
LINDEX GROUP plc
Susanne Ehnbåge
CEO
Further information:
Susanne Ehnbåge, CEO
Henrik Henriksson, CFO
Contact via Lindex Group's MediaDesk info@stockmann.com, tel. +358 50 389 0011
Marja-Leena Dahlskog, Head of Communications & IR, tel. + 358 50 502 0060
Distribution:
Nasdaq Helsinki
Principal media
Lindex Group plc is an international multichannel retail group with two divisions: Lindex and Stockmann. Lindex is a global fashion company with a purpose to empower and inspire women everywhere. Its three strong categories include women's and kids' wear as well as lingerie, where it is a market leader in the Nordics. Stockmann is a premium multi-brand retailer with department stores in Finland and the Baltics. Its purpose is to be a marketplace for a good life. In 2024, the Lindex Group's revenue was EUR 940 million and it had some 5 750 employees. The Group's roots lie in the Stockmann company founded in 1862 and its shares are listed on the Nasdaq Helsinki Ltd. in Finland. www.lindex-group.com
