From the President & CEO

Half-year Financial Report, 9 August 2018

“Our net sales grew by 24 percent and our international sales by 17 percent in the second quarter of 2018. Our comparable operating profit improved markedly. I think we can be quite pleased with the positive trend in our net sales, which was also partly strengthened by timing-related factors.

“In the April-June period of 2018, our net sales rose to EUR 28.2 million (22.8). Growth in retail and wholesale sales in Finland and a favourable trend in wholesale sales in the Asia-Pacific region were key factors behind the strong quarter. Our operating profit grew to EUR 9.1 million (0.7), which included a EUR 6.0 million nonrecurring taxable capital gain from the sale of our head office. Our comparable operating profit was EUR 3.1 million (0.7). We reported in April that we had sold our head office to a fund of OP Financial Group. As a result of this transaction, our expenses will grow by roughly EUR 1 million and depreciation will decline by about EUR 0.5 million annually. The sale of the head office strengthened our financial position, and in the autumn the Board of Directors will examine various options to use the funds obtained from the transaction.

“In the January-June period of 2018, our net sales grew by 16 percent and our operating profit rose to EUR 10.3 million (1.6) with the capital gain from the sale of our head office. Our comparable operating profit was EUR 4.3 million (1.8). All in all, the first half of the year was strong and our net sales grew in all market areas. In Finland, the general recovery in retailing continued. Our retail sales grew by 11 percent, and I think it is excellent that this growth was faster than the overall trend in the sector. Our wholesale sales in Finland were positively affected by nonrecurring promotional deliveries. Of the full-year promotional deliveries, roughly half took place in the second quarter and the remainder is spread fairly evenly throughout the rest of the year. Wholesale sales in the Asia-Pacific region also showed gratifying growth. Part of the growth was due to the fact that deliveries for the third quarter were transferred to the preceding quarter.

“In the first half of the year, signs were visible that the new direction for our collections and our brand was working well. This encourages us to continue the long-term work by which we seek clearly stronger growth than before. Our core objective is for our products to appeal to a wider customer base. The key drivers of our growth are e-commerce, partner-led retail in Asia, and boosting sales per square metre in Marimekko stores. I am pleased that we have taken steps in the right direction in all these areas. The worldwide launch of the limited-edition collaboration collections with the clothing brand Uniqlo and the cosmetics brand Clinique has this year increased our international visibility and brand sales to an exceptional degree.

“Towards the end of the year, we will enhance our own investment in marketing and raising our brand profile in China. Our aim is to start online selling of Marimekko products so that we can, together with our local partner, offer our customers an omnichannel experience in this market as well. For this reason, we set up a subsidiary in China in July. China is one of the world’s most advanced and rapidly developing online marketplaces. Launching online sales there will give us a real vantage point and provide valuable lessons for all our online operations in the future development of digital business.”

Tiina Alahuhta-Kasko