{"segments": [{"speakerId": "spk1", "sentences": [{"start": 0, "end": 4, "text": "Ladies and gentlemen, my name is Anna Dorman, and I'm the CIO of Marimekko."}, {"start": 4, "end": 10, "text": "It is my pleasure to welcome you to our webcast about our Q1 results this year."}, {"start": 10, "end": 18, "text": "First of all, I would like to remind you that if you would like to ask questions after the presentation, you can use the chat function on the platform."}, {"start": 18, "end": 23, "text": "We will first hear a presentation by our president and CEO, Dean Cosco."}, {"start": 23, "end": 27, "text": "And after that, we'll have a Q&A session with Dean and our CFO, Elina Anckar."}, {"start": 28, "end": 31, "text": "Without further ado, Dean, please go ahead."}]}, {"speakerId": "spk2", "sentences": [{"start": 31, "end": 34, "text": "Thank you, Anna, and good afternoon."}, {"start": 34, "end": 41, "text": "Also, from my behalf, it's my pleasure to walk you through our first quarter 2024 interim report."}, {"start": 41, "end": 42, "text": "But let's get started."}, {"start": 43, "end": 53, "text": "Q1 2024. We had a good start to the year of 2024, and especially an impressive one in terms of our brand communications."}, {"start": 53, "end": 70, "text": "This year, we're celebrating the 60th anniversary of our most iconic print of all time, Unikko, and that really supports our momentum to continue the determined work that we're doing to scale up our profitable growth despite the weaker general macro environment."}, {"start": 71, "end": 78, "text": "So in the first quarter, our net sales grew, in particular as a result of the timing of non-recurring promotional deliveries."}, {"start": 78, "end": 80, "text": "And our operating profit improved."}, {"start": 80, "end": 86, "text": "Our net sales increased in total by 7% and totaled €37.7 million."}, {"start": 86, "end": 98, "text": "And as mentioned, they were boosted in particular by the growth of wholesale sales in Finland, as the amount of non-recurring promotional deliveries falling in the first quarter was significantly higher than estimated."}, {"start": 98, "end": 100, "text": "So that's a timing issue."}, {"start": 100, "end": 106, "text": "The increase in net sales was, however, also driven by growth in international net sales."}, {"start": 107, "end": 143, "text": "And as it says, net sales in Finland grew by 8% and international sales grew by 6%, due to the good development of wholesale sales, especially in the Asia Pacific region and North America, and significant growth in licensing income. Then, especially due to the increased net sales as well as improved relative sales margin, our operating comparable operating profit increased by 36% to €5.2 million, equalling 13.8% of net sales."}, {"start": 143, "end": 161, "text": "And overall, our financial position continued to be strong and we can see that we're in a solid position after the first quarter to continue on this journey to scale up our growth, especially in international markets, despite the weaker general sentiment."}, {"start": 162, "end": 168, "text": "Then let's have a closer look into the different key drivers behind the result."}, {"start": 169, "end": 182, "text": "So as mentioned, the net sales increased by 7%, boosted especially by the growth of wholesale sales in Finland due to the amount of non-recurring promotional deliveries falling in the first quarter being significantly higher than estimated."}, {"start": 183, "end": 189, "text": "And as mentioned, the increase in net sales was also driven by the growth of international net sales."}, {"start": 189, "end": 199, "text": "The international net sales grew by 6%, thanks to the favorable development of wholesale sales in the Asia Pacific region and North America."}, {"start": 199, "end": 203, "text": "And then, of course, also licensing income grew significantly."}, {"start": 204, "end": 217, "text": "The continued challenging market environment in Finland, paired with the highly tactical business environment in Finland, impacted both retail and wholesale sales in the market."}, {"start": 217, "end": 224, "text": "However, the net sales in Finland grew by 8%, driven by these non-recurring promotional deliveries in wholesale."}, {"start": 224, "end": 245, "text": "But our omnichannel retail sales also increased and I must say that in this type of a weak general market situation, the 2% omnichannel retail sales increase in the domestic market is a really strong outcome and really reflects the continuous appeal and desirability of our brand."}, {"start": 246, "end": 258, "text": "Then when we look at our second biggest market area, our Asia-Pacific region, net sales increased by 22%, thanks to the good development of processes and licensing income."}, {"start": 259, "end": 266, "text": "When we look at our net sales development by market area and by product line, no major changes there."}, {"start": 266, "end": 282, "text": "In the net sales by market area, we could see the share of Asia-Pacific net sales grow to 27%, and then a slight decrease of the EMEA region to 6% in the net sales."}, {"start": 282, "end": 287, "text": "By product line, fashion grew nicely by double digits."}, {"start": 288, "end": 296, "text": "And we can see that also in the increase in the fashion product line share that increased to 34%."}, {"start": 296, "end": 300, "text": "Home also increased as a category by 9%."}, {"start": 300, "end": 304, "text": "Namely in the first quarter, bags and accessories had a slight decrease."}, {"start": 304, "end": 311, "text": "But when we look at the totality of our lifestyle portfolio, no major changes in the split by product line."}, {"start": 312, "end": 323, "text": "And then when we look at our spread in terms of points of sale, today, the Asia-Pacific region has the greatest number of Marimekko stores in the world."}, {"start": 323, "end": 329, "text": "In the first quarter, our online sales continued to grow."}, {"start": 329, "end": 337, "text": "And during the period under review, we also expanded to a new platform in China."}, {"start": 337, "end": 343, "text": "Marimekko online stores also opened in markets like Vietnam and Malaysia."}, {"start": 343, "end": 349, "text": "And this means that today our online store serves customers in already 37 countries."}, {"start": 350, "end": 357, "text": "By the end of the period under review, there was a total of 162 Marimekko stores around the world."}, {"start": 357, "end": 372, "text": "Something good to note is that during the review period, we made a partner change in the Taiwanese market, which meant that during the first quarter, two stores and shop-in-shops were closed in the market."}, {"start": 372, "end": 382, "text": "But our new partner will plan to open five new stores and shop-in-shops during the year 2024."}, {"start": 384, "end": 394, "text": "When looking at our brand sales, we saw a good increase of 18% in brand development, landing then at €9.7 million."}, {"start": 395, "end": 408, "text": "And when we look at our profitability, the comparable operating profit increased, as mentioned, by 36% in the first quarter, landing at 5.2 million, representing 13.8% of net sales."}, {"start": 408, "end": 415, "text": "The operating profit, of course, was boosted especially by the increased net sales and improved relative sales margin."}, {"start": 415, "end": 419, "text": "Then a growth in fixed costs had a weakening impact on profit."}, {"start": 419, "end": 429, "text": "The fixed cost increase in the first quarter was planned due to increased personnel and marketing expenses, driven much by growth investments."}, {"start": 429, "end": 438, "text": "The relative sales margin, on the other hand, was supported by significantly increased licensing income as well as lower discounts than in the comparison period."}, {"start": 439, "end": 449, "text": "Then if we move to key events in the first quarter, as we know, for a brand to grow internationally."}, {"start": 449, "end": 453, "text": "International brand awareness is a key requirement."}, {"start": 453, "end": 471, "text": "Globally, top-level brand collaborations play a really important role for Marimekko in further increasing our brand awareness and also acquainting new customer audiences to our brand."}, {"start": 471, "end": 480, "text": "In the first quarter, we were happy to launch limited edition brand collaborations with leading brands like UNIQLO and Samsung."}, {"start": 480, "end": 492, "text": "And after the review period, we also announced a second global brand collaboration with UNIQLO and also a collaboration with the Finnish jewellery brand Oliver Okoro to celebrate the anniversary."}, {"start": 495, "end": 508, "text": "International Fashion Weeks play a big role in our industry to increase brand awareness, but also to cement the positioning of our brand in the global fashion industry."}, {"start": 509, "end": 518, "text": "In the first quarter, we were honored to be presenting as the first international brand at the Tokyo Rakuten Fashion Week."}, {"start": 518, "end": 522, "text": "There we presented our Fall Winter Collection 2024."}, {"start": 522, "end": 526, "text": "We presented the same collection also at Copenhagen Fashion Week."}, {"start": 527, "end": 537, "text": "And as mentioned, of course, the beginning of the year has been a strong start for the celebration of our most iconic print, the Unikko's 60th anniversary."}, {"start": 537, "end": 548, "text": "The anniversary year includes, of course, an array of special products throughout the entire year, but also various events and activations."}, {"start": 548, "end": 554, "text": "The year started with the spectacular light installation during the Lux Helsinki Light Festival."}, {"start": 554, "end": 568, "text": "It moved to Hong Kong, where our unique print delighted an iconic Hong Kong streetcar, then went on to fashion shows, for example in Bangkok."}, {"start": 568, "end": 581, "text": "So this year really offers us a special opportunity and platform through the anniversary year to further widen our customer audience around the world and deepen the relationship with our existing customers."}, {"start": 581, "end": 586, "text": "This way, all supporting our scaling up of business."}, {"start": 588, "end": 592, "text": "In the first quarter, of course, the omnichannel store network developed."}, {"start": 593, "end": 611, "text": "And so they did in the Asia-Pacific region, in addition to the new digital sales channels that I already mentioned, two new Marimekko stores were opened in Japan, as well as two pop-up stores that delighted our customers in Australia direct to consumer."}, {"start": 611, "end": 616, "text": "So omnichannel retail really represents the core of our distribution strategy."}, {"start": 616, "end": 636, "text": "And overall, we can see that the internationally growing Marimekko brand awareness, developing a store network, and these impactful communal experiences around the brand all support the scaling up of our business and our plan is to use this recipe to further fuel our growth journey."}, {"start": 636, "end": 642, "text": "Also going ahead. Then moving on to the outlook for 2024."}, {"start": 642, "end": 644, "text": "So just a few words in general."}, {"start": 644, "end": 660, "text": "So of course, the uncertainties related to the development of the global economy and the general cost inflation influence consumer confidence, purchasing power, and behavior, and as a result can have an impact on our business, especially in our important home market of Finland."}, {"start": 661, "end": 674, "text": "Then also different exceptional situations may impact our company's sales, profitability, and cash flow as they may cause significant disruptions in production and logistics chains."}, {"start": 674, "end": 683, "text": "But of course, we're closely monitoring all these situations and will adjust our operations and plans according to the circumstances if and when needed."}, {"start": 685, "end": 687, "text": "Then a few words about seasonality."}, {"start": 687, "end": 697, "text": "Because of the seasonal nature of our business, the major portion of our company's euro denominated net sales and operating result are traditionally generated during the second half of the year."}, {"start": 698, "end": 719, "text": "What is also good to note is that the timing between the quarters of the non-recurring promotional deliveries in the Finnish wholesale sales and their size typically vary on an annual basis, and when it comes to the licensing income in 2024, our licensing income is estimated to be approximately at the previous year's record level."}, {"start": 721, "end": 725, "text": "Then moving on to net sales development in 2024."}, {"start": 725, "end": 729, "text": "First of all, starting from Finland, our important home market."}, {"start": 729, "end": 738, "text": "So despite the weak market situation, net sales in our home market of Finland are expected to be approximately at the level of the previous year."}, {"start": 738, "end": 748, "text": "What is, of course, good to remember is that sales in Finland are impacted by the weak general economy and low consumer confidence, as well as the development of purchasing power and behavior."}, {"start": 748, "end": 753, "text": "And the tactical operating environment also has an impact on the business."}, {"start": 753, "end": 768, "text": "Also good to note that in 2024, the non-recurring promotional deliveries in wholesale sales are expected to be significantly lower than in the comparable year and weighted clearly in the first half of the year."}, {"start": 768, "end": 786, "text": "So this is good to note as of course, now in the first quarter, our net sales were boosted in particular by the growth of wholesalers in Finland, as the amount of non-recurring promotional deliveries falling in the first quarter was significantly higher than estimated."}, {"start": 787, "end": 791, "text": "Then when we look at the international sales, they are estimated to grow in 2024."}, {"start": 791, "end": 801, "text": "Then when looking at the Asia-Pacific region, our second largest market area, we also are expecting there to see sales growth in 2024."}, {"start": 801, "end": 807, "text": "And this year, our aim is to open around 10 to 15 new stores and shop-in-shops."}, {"start": 807, "end": 812, "text": "And most of the planned openings will be in Asia, just like in past years."}, {"start": 813, "end": 816, "text": "A few words still about growth, investments, and costs."}, {"start": 816, "end": 823, "text": "So of course we develop our business with a long-term view, and our aim is to scale our profitable growth in the upcoming years."}, {"start": 823, "end": 827, "text": "It means that also our fixed costs are expected to be up on the previous year."}, {"start": 827, "end": 832, "text": "The general cost inflation does continue to affect Marimekko in 2024."}, {"start": 832, "end": 837, "text": "Our marketing expenses are also expected to increase in 2024."}, {"start": 837, "end": 845, "text": "We are celebrating this special anniversary year, which is providing us a great opportunity to accelerate our international awareness."}, {"start": 845, "end": 861, "text": "And then finally, of course, we work very actively to ensure a functioning production and logistics chain, to avoid delays and to mitigate negative impacts of the generally increased costs and to enhance inventory management."}, {"start": 861, "end": 867, "text": "And then finally, we reiterate our financial guidance for 2024."}, {"start": 867, "end": 871, "text": "So we estimate our net sales to grow from the previous year."}, {"start": 871, "end": 877, "text": "And our comparable operating profit margin is estimated to be approximately 16 to 19%."}, {"start": 877, "end": 890, "text": "Good to note that the development of consumer confidence and purchasing power, particularly in Finland, global supply chain disruptions, and the general inflation development caused volatility in the outlook of 2024."}, {"start": 891, "end": 894, "text": "But with these words, I would like to open for questions."}]}, {"speakerId": "spk1", "sentences": [{"start": 895, "end": 900, "text": "Thank you, Tiina. And maybe we could have Elina here as well."}, {"start": 900, "end": 902, "text": "Yes, some of the questions."}, {"start": 902, "end": 907, "text": "You can still type in your questions using the chat function while we answer the first one."}, {"start": 907, "end": 914, "text": "Some of the questions related to costs or non-recurring promotional deliveries were already discussed during the presentation."}, {"start": 914, "end": 919, "text": "So let's start with a question related to sales in Scandinavia and ML."}, {"start": 919, "end": 922, "text": "Uh, the operating environment there, of course, has been, uh, flattish."}, {"start": 922, "end": 926, "text": "And that's what the statistics are expecting."}, {"start": 926, "end": 929, "text": "But how did our sales develop in those countries?"}]}, {"speakerId": "spk2", "sentences": [{"start": 929, "end": 944, "text": "Yes. So when we look at Scandinavia and EMEA, first of all, in Scandinavia, during the H2 of last year, we completely revamped our Stockholm flagship store and opened an entirely new flagship store in Copenhagen."}, {"start": 944, "end": 955, "text": "Uh, and in totality, when we look at our omnichannel retail development in Scandinavia, we saw growth as well as we did see growth in our EMEA retail sales."}, {"start": 955, "end": 961, "text": "Then it's good to remember that Scandinavia and EMEA are both wholesale sales dominated markets."}, {"start": 961, "end": 973, "text": "And with that also comes the fact that sometimes there might be also quite a lot of, even a lot of seasonal fluctuations in the sales accumulation between quarters."}, {"start": 973, "end": 976, "text": "And this was the case, uh, in this particular quarter."}]}, {"speakerId": "spk1", "sentences": [{"start": 976, "end": 985, "text": "Thank you. Uh, Elina, Tiina already mentioned about the partner change in Taiwan, but are these stores included in the estimate for 2024?"}]}, {"speakerId": "spk3", "sentences": [{"start": 985, "end": 991, "text": "For the Taiwanese store changes, it is more like a technical matter."}, {"start": 991, "end": 999, "text": "So overall, our estimate is to open 10 to 15 stores during 2024, with the majority in the Asia-Pacific area."}]}, {"speakerId": "spk1", "sentences": [{"start": 999, "end": 1003, "text": "Thank you. We actually this time don't have any further questions."}, {"start": 1003, "end": 1008, "text": "Okay, so I was thinking I might take this opportunity for a small advertisement."}, {"start": 1008, "end": 1010, "text": "Uh, we are celebrating Chanukah this week."}, {"start": 1010, "end": 1015, "text": "Uh, so we'll have a fashion show or actually four fashion shows here in Helsinki on Friday."}, {"start": 1015, "end": 1018, "text": "Uh, and also shows in Tokyo on Saturday."}, {"start": 1018, "end": 1022, "text": "So if you're in those cities, please stop by to see our amazing collections."}, {"start": 1022, "end": 1027, "text": "And if you're somewhere else, you can follow those shows on our Instagram accounts."}]}, {"speakerId": "spk2", "sentences": [{"start": 1027, "end": 1031, "text": "And these shows are open to the public."}, {"start": 1031, "end": 1032, "text": "So I hope to see you there."}, {"start": 1032, "end": 1033, "text": "Welcome."}]}, {"speakerId": "spk1", "sentences": [{"start": 1034, "end": 1035, "text": "Thank you."}]}], "speakers": [{"speakerId": "spk1", "name": "Anna Dorman"}, {"speakerId": "spk2", "name": "Dean Cosco"}, {"speakerId": "spk3", "name": "Elina Anckar"}], "id": "66449e40b3885761ba49286b", "createdAt": "2024-05-15T11:36:32.447Z", "updatedAt": "2024-05-15T11:36:32.447Z", "langCode": "en", "transcriptType": "ENHANCED", "amberscriptJobId": null, "speechmaticsJobId": null, "eventId": "65f4167cf775db7a6e16eb55"}