Marimekko Oyj New

Good afternoon. My name is Anna Tuominen. I'm the IRO of Marimekko, and it is my pleasure to welcome you to our Q1 results webcast. In a short while, Tiina will go through our latest results, and after that, we'll have time for your questions. You can ask your questions during the webcast using the chat function at the platform, either during the presentation or shortly after that, and we'll have Tiina and our CFO, Elina Anka, to answer those.

But without further ado,

Siina, please go ahead.

Thank you, Anna. And good afternoon, everyone. It is, again, my pleasure to walk you through our results now for the first quarter of 2026. So how did Marimekko's Q1 2026 go? It went well. Despite the continued challenging market situation, our net sales grew driven by growth in international sales and our operating profit improved. Our net sales in the first quarter increased in total by 5% and totaled 41.4 million euros. And the net sales were boosted, especially by the increased wholesale sales, both in Scandinavia and in Finland. Our international sales altogether increased by 9%, as retail sales grew in all and wholesale sales in nearly all international market areas. Our net sales in Finland were on par with the comparison period. Then as it comes to our profitability, our comparable operating profit improved by 19% and amounted to 5.3 million, equaling to 12.7% of net sales. And our operating profit was increased by improved relative sales margin and the growth of net sales. Also, our cash flow from operating activities improved and our financial position continued to be strong. Overall, the strong start for 2026 really demonstrates Mare Mekko's international competitiveness and puts us in a great position to continue investing in our long-term future, including investing in our brand awareness, in our digitalization, in our retail network and sustainability, among others, despite the uncertainties in the operating environment. But let's have a closer look to the drivers behind the Q1 net sales and results. So, as mentioned, the net sales altogether increased by 5%, boosted in particular by the increased wholesale sales in Scandinavia and in Finland. The uncertainty in the operating environment continues, and consumer confidence, for example, is weak in many countries. Nevertheless, the net sales in our home market in Finland were on par with the comparison period. The retail sales in Finland decreased as they were impacted by the challenging market conditions, but the domestic non-recurring promotional deliveries increased wholesale sales. In our second largest market area, the Asia-Pacific region, our net sales were on par with the comparison period as retail sales in the region grew by 13%, and as previously estimated, our wholesale sales decreased by 4% due to timing reasons. Overall, really nice growth in the international area. Our international sales grew by 9% altogether as retail sales grew by actually 20%, and wholesale sales decreased by 4%, which I think is an outcome that we can be very happy about. When it then comes to our net sales split by market area and by product line, no major changes here. In terms of the product line, the strongest growth was seen in the bags and accessories category. That grew 11%, and that therefore increased a little bit the share of bags and accessories out of our total net sales. Our omnichannel store network grew further, and today, as for a long time, the Asia-Pacific region has the greatest number of Maremekko stores, and the online store serves customers in 39 countries already. In total, today, there are 176 Maremekko stores all around the world, and 95 of them are located in the Asia-Pacific region. Our brand sales totaled 84.1 million euros, and in the first quarter, 67% of our brand sales came outside of our home market, Finland. As for our profitability, as mentioned, really nice growth in the comparable operating profit, 19% growth, and the comparable operating profit totaled 5.3 million, which is 12.7% of net sales. The improved relative sales margin and the growth of net sales increased the operating profit, while then, on the other hand, the increased fixed costs had a negative impact on the operating profit. The relative sales margin was improved by the unrealized exchange rate differences, while then, on the other hand, the relative sales margin was weakened by discounts being higher than in the comparison period. The fixed costs increase in particular due to higher marketing costs, but also due to increased personal expenses and the personal expense increases are related to these kind of general salary increases in different countries. Then moving on to key events in the first three months of 2026, a lot of activities, exciting activities in the start of the year. So we really kicked off the year 2026, which is Marimekko's 75th anniversary year, in a big way through our Winter 2026 Ready to Wear fashion show that we hosted here in our hometown in Helsinki. The event drew a large audience of our friends, influencers and media and really gave a nice start for the year. As already mentioned, our Omnishala Marameko store network continued in the first quarter, and four new stores and six pop-up stores were opened, primarily in Asia. Something exciting is also the fact that in the first quarter we announced future expansion plans in Southeast Asia, namely the launch into new markets for Mare Mekko, Indonesia and Philippines, where our plan is to open the first Mare Mekko shopping shops now in the summer of 2026. When the world outside looks grim, we believe that the right recipe is just to further inspire and energize our customers. And what better way to do that but in the Maremekko stores? So we hosted a lot of special activations in our stores in key cities. We brought a glimpse of the Maremekko print archive to Paris to the Matter and Shape Museum. design event, hosted an archive dress pop-up in our Paris flagship store, and actually launched an entirely new store event concept called Maremekko and Friends, and here on the slide you can see images from the first event with an artist playing in our flagship store window, and more to come in the later months this year. We also announced new brand collaborations. First of all, continuation of our collaboration with Kalevala Jewelry. But then we also unveiled a new limited edition collaboration collection, this time with global tech and lifestyle accessories brand Casetify. After the review period in April, in the leading design event of the world, the Milan Design Week, we hosted the Osteria Fioridi Marimekko. This was a very warm and authentic Marimekko lifestyle experience, where we celebrated not only colorful Marimekko flowers and art of printmaking, but also togetherness through food and through budget tournaments. And again, this event received significant attention at this very important industry event, supporting our awareness. In the early part of the year, we have also kicked off our new sustainability strategy term, whereby we will continue our consistent work on products, people, and planets, throughout the value chain. The key focus areas of our sustainability work continue to include timeless and long-lasting design, advancing circular economy, developing supply chain transparency, and managing the social and environmental impacts of our business. Also, of course, the long-term development of the working environment and leadership culture are key parts of our sustainability efforts. Maramekko is a value-driven company, and we believe that when we feel well at work and when we enjoy work, that also transmits to our customers. So we measure employee well-being and gather feedback from our staff through a variety of ways. And according to the results of our most recent comprehensive annual employee survey conducted at the beginning of the year, the Maranekko overall employee satisfaction is at a good level and has further improved significantly. Our leadership skills are assessed as strong across the teams and organization. Willingness to recommend Maranekko as a workplace has increased and is at an excellent level. And something that I really want to highlight is the high response rate. So 90% of the Maranekko personnel responded to this survey. which, of course, overall gives us a great basis to further continue reinforcing our working community and culture as a key strength of Maranekko. Then moving on to the outlook of 2026. Of course, there are significant uncertainties related to the development of the global economy, such as the tensions related to geopolitics and trade relations and the war in Iran. The rapid changes in trade policies, as well as other uncertainties, are reflected in consumer confidence, purchasing power and behavior, and thus can have a weakening impact on modern economy. In addition, different disruptions in production and logistics chains as well as changes in these chains caused by these uncertainties may also have a negative impact. But, of course, as always, we keep monitoring very closely the situations and developments and adjust our operations and plans accordingly if necessary. Then a few words about seasonality. So, of course, due to the seasonal nature of our business, A major portion of our Euro-denominated net sales and operating results are traditionally generated during the second half of the year. Also good to remember that the timing between the quarters of the non-recurring promotional deliveries and finished wholesale sales and their size typically vary on an annual basis. And this year in 2026, licensing income is forecasted to be approximately at the level of the previous year. Moving on to the net sales development, So starting from Finland, our important home markets, despite of the weak market situation, net sales in Finland are expected to increase in 2026. The sales overall in Finland are impacted by the continued uncertain general economy and the low consumer confidence, as well as the development of purchasing power and behavior, and the operating environment indeed remains practical and price-sensitive. Something good to remember is also that in 2026, the non-recurring promotional deliveries in wholesale sales are expected to grow from the comparable year and to be weighted clearly in the second half of the year as in 2025. Then in the international front, the international sales, we estimate to grow in 2026. Also in the Asia-Pacific region, our second largest market area after Finland, we estimate our net sales to increase in 2026. Our aim in the started year is to open approximately 10 to 15 new Marameco stores and shopping shops. And most of these plans openings will be in Asia, similar to the previous years. When it comes to the growth investments and costs, fixed costs in 2026 are expected to be up on the previous year. Also, the marketing expenses are expected to increase significantly. Something to note is that due to timing reasons, the increase in fixed costs is expected to be significantly stronger in the second quarter of 26 than in the first quarter of the year. Then again, the early commitments to product orders from our partner suppliers may undermine our ability to optimize product orders and respond to rapid changes in demand and supply environment. And there are indeed uncertainties related to the global production and logistic chains which may, for example, increase costs or cause delays. The ongoing war in Iran, especially if prolonged, significantly may increase, in particular, the logistic costs. However, as always, we work actively in various ways to ensure our competitive and functioning supply and production logistic chains to mitigate the increased costs and other negative impacts to avoid delays and enhance inventory management. And today we reiterate our financial guidance for 2026. So we estimate our group's net sales for 2026 to grow from the previous year. And the comparable operating profit margin is estimated to be approximately some 16% to 19%. The development of consumer confidence and purchasing power in Marameco's main market in particular caused significant volatility to the outlook of 2026, and this development is strongly impacted by the rapid changes and uncertainty in geopolitics and global trade policy, among others. In addition, the different disruptions in the global supply chains can cause volatility to the outlook. But with these words, I would like to thank you and open up for the Q&A and invite also Anna and Elina here with me on stage.

Thank you, Tiina.

Thank you.

I would just like to remind you to use the chat function if you have a question that you would like to present to Tiina or Elina. We have a few questions here. First, a question related to the European sales. The retail sales in Europe in Q1 increased by 32% and overall European net sales increased by 11%. Can you comment if the Paris flagship store was already visible in these numbers? It was opened at the end of October.

So, as Anne, you mentioned, the Paris flagship store was opened at the end of October. So, yes, the Paris store is indeed in the retail numbers. The retail numbers are, of course, omniscient retail numbers, so they also include our online sales. And something good to remember is that actually last year we also opened two new language versions of our online store, so namely the French-speaking online store and the German-speaking online store to support our sales development also on the online front in Europe.

A lot of new things in Europe. Yes. A couple of questions related to guidance or the market outlook. You mentioned the importance of consumer confidence and purchasing power, especially to Finnish markets. And the statistics at the beginning of the year have been quite gloomy. But in just recent days, we've seen some positive signs. Can you comment on the importance of the Finnish market or the outlook for that?

Yeah, so of course, like looking at the Finnish market, so as Anna, you just mentioned, so Overall, when it comes to the consumer confidence, those numbers have continued to be very weak in the domestic market. However, there have been some glimpses of more positive news in the outlooks of Finnish companies. Of course, we hope to see an uptick in the consumer behavior, but it's something that we keep monitoring, and it's still important to remember that, overall, there is a lot of uncertainty in the marketplace, and the consumer confidence is still on a weak level, according to the statistics.

This time in the market outlook, that there was a rate added to the fixed cost. So from the start of the year, the estimate has been that the fixed cost will increase, but now it was, also estimated that the cost increase in Q2 will be significantly stronger than in Q1. Does this mean that the Marimekas adjusted EBIT could be lower year on year?

So as I just mentioned, we reiterate our financial guidance. So on the profitability part, we estimate that our comparable operating profit margin in 2026 will be approximately some 16% to 19%. So no changes? No changes there.

Then last question related to the scale strategy and the end-to-end digitalization, namely the AI. So what kind of strategic leverage will AI provide for Marimekko going further, and how is it being currently utilized?

So, of course, at Marenekko, understanding that in our scale strategy, the letter E, as you mentioned very well, equals to end-to-end digitality, meaning that we are excited to adopt and leverage the opportunities of new technologies and data and overall digitalization and utilize them to boost and support our sales as well as improve our efficiency. So maybe a few words when it comes to the use of AI. So again, AI, we use both to support and boost and accelerate our sales, as well as improve our profitability. So some concrete examples on the kind of sales boosting front is, for example, the personalization of our Online store, also the same when it comes to our marketing content. Then some concrete examples when it comes to boosting efficiencies. For example, the increased use of automation is a very concrete example. But there are abundant opportunities that we're excited to adopt.

Thank you, Tina. That was all the questions we had this time. Thank you for taking the time to be with us today. And we hope to see you in August with the Q2 results. Thank you.