Stockmann.com

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Financing and capital employed

The Group’s financing and the management of financial risks are handled on a centralized basis within Stockmann plc’s Treasury function in accordance with the policy adopted by the Board of Directors. 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’s main financial risks are currency risk, interest rate risk, liquidity risk, financing risk and counterparty risk.

Liquid assets totalled EUR 176.4 million at the close of the year 2009. The programme to release capital has been implemented by means of sale and leaseback arrangements and divestment of non-strategic assets, which has altogether released EUR 84.4 million in capital from non-current assets. This includes the sale of the shares of the Mannerheimintie car park, which was opened during the financial year 2009, in September 2009 using a sale and leaseback arrangement.

In 2009, Stockmann arranged a directed share issue and a rights offering, with which it raised a total of EUR 140.9 million in capital. A total of EUR 4.0 million was paid in arrangement and underwriting fees for the issues. Funds raised through the issues were used for the advance repayment of long-term debt. Interest-bearing liabilities at the end of the year were EUR 789.2 million, of which EUR 786.9 million consisted of long-term debt. Capital expenditure in the financial year amounted to EUR 152.8 million.

Net working capital amounted to EUR 110.6 million at the close of the year 2009. The equity ratio increased due to the issues and, at the end of 2009, was 44.1 per cent. Net gearing was 72.1 per cent. The return on capital employed was 5.8 per cent. The Group’s capital employed increased by EUR 174.0 million and stood at EUR 1 640.9 million at the end of the financial year 2009.