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2020-08-13

HALF-YEAR FINANCIAL REPORT OF MARIMEKKO CORPORATION, 1 January – 30 June 2020: Good performance despite a decline in net sales due to the coronavirus pandemic

Marimekko Corporation, Half-year Financial Report, 13 August 2020 at 8.00 a.m.

HALF-YEAR FINANCIAL REPORT OF MARIMEKKO CORPORATION, 1 January – 30 June 2020: Good performance despite a decline in net sales due to the coronavirus pandemic

This release is a summary of Marimekko’s half-year financial report for the January-June period of 2020. 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 second quarter in brief

  • As a result of the coronavirus pandemic, the global fashion industry and specialty retail sector faced the worst crisis in decades, and the majority of the Marimekko stores around the world were temporarily closed during the period under review. Marimekko was able to quickly adjust its operations in the exceptional circumstances and promptly implemented an extensive cost-saving program. 
  • Net sales fell by 20 percent to EUR 23.3 million (Q2/2019: 29.1). Net sales were weakened especially by a decline in retail sales in Finland, North America and Scandinavia as well as a decrease in wholesale sales in the Asia-Pacific region. On the other hand, increased licensing income in the Asia-Pacific boosted net sales.
  • Continued strong growth in demand in the online store posed challenges to logistics, and approximately EUR 0.7 million in retail sales were left unrecognized as revenue for the second quarter. 
  • Thanks to prompt adjustment measures, operating profit only decreased by 28 percent and was EUR 2.7 million (3.7); comparable operating profit was also EUR 2.7 million (3.7).
  • Reduced net sales and a decline in relative sales margin had a weakening impact on results. Earnings were boosted by a noticeable decrease in fixed costs as a result of Marimekko’s ambitious saving program. The decline in relative sales margin was attributable, in particular, to increased logistics costs due to substantial growth in online sales and bigger discounts than in the comparison period, whereas higher licensing income and good margins per product, achieved through product portfolio optimization, supported the relative sales margin.

January-June in brief

  • Due to the impacts of the coronavirus pandemic, net sales fell by 14 percent to EUR 48.2 million (1–6/2019: 56.3). Net sales were weakened especially by a decline in retail sales in Finland, North America and Scandinavia as well as a decrease in wholesale sales in the Asia-Pacific region and EMEA. On the other hand, increased licensing income in the Asia-Pacific and growth in wholesale sales in Finland boosted net sales.
  • Operating profit amounted to EUR 3.9 million (6.3), and comparable operating profit was also EUR 3.9 million (6.3). Reduced net sales and a decline in relative sales margin had a weakening impact on results, while earnings were boosted by a noticeable decrease in fixed costs due to a prompt adjustment of operations. 

Financial guidance for 2020

On 25 March 2020, Marimekko withdrew its earlier financial guidance for 2020 solely due to the estimated impacts of the coronavirus pandemic. As Marimekko stated on 14 May 2020 in its interim report, the coronavirus pandemic will have a significant negative impact on Marimekko’s net sales and profitability in 2020. As the situation is changing rapidly, it is still not possible to give any precise estimate of the impacts of the pandemic on business.

Risks and uncertainties related to the coronavirus pandemic are described in the Major risks and factors of uncertainty section of this half-year report.    

Key figures

(EUR million)4–6/
2020
4–6/
2019
Change,
%
1–6/
2020
1–6/
2019
Change,
%
1–12/
2019
Net sales 23.3 29.1 -20 48.2 56.3 -14 125.4
International sales 11.9 12.4 -3 23.2 26.7 -13 54.3
  % of net sales 51 42   48 47   43
EBITDA 5.8 6.8 -15 10.2 12.5 -19 29.7

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