Good morning. I'm Susanne Ehnbåge, CEO of Lindex Group, and welcome to our webcast where we will review the key highlights from Q4 and also the full year of 2025. Our CFO, Henrik Henriksson, is here with me. Let's move to the agenda. We will on the following page, please. We will, as usual, start with a highlight of Q4, business updates for our two divisions, Lindex and Stockmann, and then also look at the financials more closely. We will finish with an update on our way forward, and after our presentation, we will have time for your questions. We can now move on to the next page. We will begin the business update for Lindex Group as well as the Lindex and Stockmann divisions, but before that, we will look into the consumer confidence levels in our key markets on the following page.
Here you can track consumer confidence trends for 2025. Our core markets continue to show generally low levels of consumer sentiment. In Finland and Sweden, consumer confidence declined slightly towards year-end, and confidence in Norway rose somewhat but remains at a low level. Overall, both consumer and business confidence remain fragile. Now let's review our group's key messages for the quarter. We will also revisit these points later during the webcast with more details. During the fourth quarter, the Lindex Group's revenue and adjusted operating result improved. Both Lindex and Stockmann divisions overperformed the fashion market in our key markets, Sweden, Finland, and Norway. Even with market challenges, the Lindex division increased in both revenue and adjusted operating profit for the quarter. I'm also pleased to report that the Stockmann division showed continued progress in profit improvement, both for the quarter and year-to-date.
These gains are thanks to effective cost-saving measures. Development continued at the Lindex division's omnichannel distribution center throughout the quarter. The division also launched its first Lindex-owned store in Denmark, marking an important step in expanding Lindex's presence across the Nordics. In December, the Board of Directors announced that the evaluation of the strategic alternatives for the Stockmann department store business will continue and that the outcome of the strategic assessment will be communicated when appropriate. Additionally, I would like to remind that the Lindex Group restructuring program was completed in August. We can now move on to the Q4 development. Lindex Group's revenue for the fourth quarter totaled EUR 284.7 million. The revenue increased by 4% and 2.7% in local currencies. The Lindex division's revenue increased 7.6% and 5.3% in local currencies. The development was positively affected by improved product availability and a strong commercial offering.
The Stockmann division's revenue decreased by 1.6% due to the impact of Itis department store closure in June and also the transfer of the furniture assortment to the new partner, Vepsäläinen, in September. The revenue grew in comparable terms. The group's adjusted operating result increased by EUR 3.3 million to EUR 39.4 million. The Lindex division's adjusted operating result increased due to higher gross profit. The Stockmann division's adjusted operating result increased due to successful efficiency measures and revenue growth in comparable terms. For the full year on the next page. Lindex Group's revenue for 2025 totaled EUR 952.3 million. The revenue increased by 1.3% in euros and was on par in local currencies. The Lindex division's reported increased revenue compared to the previous year. Stockmann division's revenue declined, but again, the division's revenue in comparable terms was on par with the comparison period.
Lindex Group's adjusted operating result decreased to EUR 69.5 million. The decrease was mainly due to higher depreciations related to the omnichannel distribution centre. The Lindex division's adjusted operating result decreased to EUR 72.1 million, mainly due to higher costs for goods handling and also depreciations. The Stockmann division's adjusted operating result improved to EUR 1.2 million. This marks a first full year positive adjusted operating result after many years for the division. Successful operational and cost efficiency measures improved the profitability. Let's now take a look at the group's revenue split by division, markets, and also categories. The Lindex division contributes 2/3 of the total revenue, and we show a slight increase over last year. Sweden is the largest market, accounting for 35% of the revenue. The fashion is the main category, generating 80% of the group's revenue. Beauty follows at 8%.
On the next page, you can see how the group's market position looks like in the Nordics and the Baltics, as well as global partnerships. In 2025, the number of Lindex stores was 442. During the year, Lindex opened nine new stores and closed nine stores. The Stockmann division has today seven department stores, as the Itis department store in Helsinki was closed in June 2025. Share of digital sales increased by 1 percentage point to 19%. In addition to the Lindex division's physical stores and owned digital store, the company also sells products on third -parties' digital fashion platforms like Zalando and Boozt and ASOS. Looking in then to the Lindex division on the next page. We achieved increased profitability and sales growth in both physical stores and digital channels in the fourth quarter. Our digital growth was 15%.
With a strong stock availability, we can see that our offering is very appreciated. Building on a strong commercial offering in all categories, lingerie continued to be our best-performing category for the period. During the quarter, we initiated the rollout of our new floor plan for the lingerie department in approximately 80 stores, with the remaining stores completed during this week. By organizing the assortment into categories basic, function, and fashion, and also doing better combinations, we present our wide assortment in a clearer and a more inspiring way that meets different buying needs and preferences across age groups. We continue to grow active customers during the quarter. The opening of our first store in Denmark in early October also symbolizes the beginning of our long-term commitment to grow in Denmark and also to strengthening our presence in the Nordics.
During the autumn, we also launched Lindex 's clarified higher purpose to drive a meaningful change for women. This reflects our long-term ambitions and commitment to create value for all stakeholders. Looking at the full year of 2025, we increased our revenue in a challenging market. The number of active customers increased for the full year too, which highlights the strength of our offer and strong loyalty base supporting our long-term revenue growth. The ramp-up of our new omnichannel distribution center has been a major focus for the organization during this year. We have made good progress. After resolving the technical issues experienced in the third quarter, operations have stabilized during the fourth quarter. During Q4, we continued transferring e-commerce orders to our new warehouse. We will conduct the final transition of our e-commerce during the first half of 2026.
We have expanded our presence in key European growth markets through new stores opening. We have also added to that, we have launched many key initiatives to strengthen our e-commerce experience and online growth. This includes, for example, a new website, an app, and also an optimized digital return solution. We have also strengthened our e-commerce capabilities by combining enhanced visual inspiration with increased efficiency in content production. As a result, we are driving stronger customer engagement, improved conversion, and a more scalable and future-ready e-commerce operation. We can also summarize a solid progress in our digital and circular transformation during the year. For example, we have continued our work on material transformation and to scale recycled fiber. We have also made great progress in product traceability and preparing for the Digital Product Passport.
As part of our commitment of full traceability throughout our entire supply chain, we are implementing a digital platform called TextileGenesis, which enables tracking of every product from fiber to finished garment. Another area of progress is our AI journey to transform our ways of working and operating. Let's continue with the Stockmann division. Stockmann achieved its seventh straight quarter of improved profits in Q4, driven by efficiency measures, higher comparable revenue, and a proactive inventory management. Stockmann's fashion category outperformed the market, confirming the strength of Stockmann's assortment, commercial tactics, and customer messaging. The number of Stockmann's active loyal customers increased significantly during the quarter, and the share of revenue from loyal customers also grew. At the Helsinki flagship, Stockmann introduced two large exterior digital out-of-home screens at one of the most visible premium locations in Finland, significantly enhancing brand visibility and driving retail media revenue going forward.
2025 marked Stockmann's first full year positive adjusted operating result after many years. This is, of course, an important milestone, and it reflects clear and disciplined strategic execution. Digital sales increased by 5%, with even greater growth observed in comparable categories, excluding the transferred furniture business. A continued focus on operational and organizational efficiency delivered a notable decline in operating costs. Several process and organizational changes contributed to lower cost levels while also improving commercial agility and competitiveness. Stockmann enhanced its offering with inspiring brand and concept launches, including NARS Beauty, the expansion of KIKO Milano to the Baltics, and successful influencer collaboration within own brands, K-Beauty department in Helsinki, and Vepsäläinen partnership in furniture category. A strategic focus on loyal customers resulted in a clear increase in new and active loyalty members, alongside a higher share of revenue from loyal customers.
This demonstrates both the strength of the Stockmann brand and the appreciation of the loyalty programme. If we move on to our guidance for 2026, we expect the revenue in local currencies to grow compared to 2025. The group's adjusted operating result is estimated to be between EUR 70 million- EUR 95 million. Of course, foreign exchange rate fluctuations may have a significant effect on the adjusted operating result. With that, I would like to hand over to Henrik, who will take us through the Q4 financials.
Thank you, Susanne. We can go to the next page, please. We're going to now spend some time to look more closely into the fourth quarter. Let's go to the next slide. On this slide, we're trying to visualize how the Lindex division's revenue and adjusted operating result for the fourth quarter developed.
For the Lindex division, the revenue increased by 7.6% and reached EUR 181.9 million. The revenue developed well due to improved product availability combined with a strong commercial offering in the quarter. We continued to increase our digital sales, and I'm really pleased with the increase of 15% in the Lindex division's digital channels for the quarter. Our share now of digital revenue accounted for 23.1% compared to 21.1% previous year. The best-performing categories, there were lingerie, followed by womenswear and kidswear, which together contributed the most to the revenue development. Looking into our gross margin, it increased to 66.4%, and this is mainly due to favorable currency impact during the quarter. Our comparable operating cost increased to EUR 71.7 million compared to EUR 70.1 million previous year, and this is mainly due to increased marketing activities and sales-related operating volume sorry, sales-volume-related operating costs.
And our adjusted operating result ended up at EUR 29.4 million versus EUR 26.8 million, and this is including items affecting comparability that are related to the additional cost arising from the omnichannel distribution center project. Then, please, let's jump to the next page. And on this page, we're trying to visualize how the Stockmann division's revenue and adjusted operating result for the fourth quarter performed. And as earlier stated, the Stockmann division's revenue decreased slightly by 1.6% and ended up at EUR 102.9 million compared to EUR 104.6 million previous year. Comparable revenue, excluding the impact of the Itis department store closure in June and the transfer of the furniture assortment to the Stockmann division's new partner, Vepsäläinen, in September, grew compared to the comparison period. The digital sales increased by 5% and accounted for 16.1% compared to 15% previous year of the total revenue.
Stockmann's revenue in the fashion category improved, and the division overperformed the fashion market during the quarter. Stockmann's gross margin increased to 46.1% due to improved regular and promotional sales margins throughout the quarter. The adjusted operating result slightly improved, mainly due to successful cost efficiency measures. This marked the seventh consecutive quarter of Stockmann's result improvement. With that, we go to the next page. Here we're trying to visualize how the division's impact the group's revenue and adjusted operating result during the fourth quarter. The left-hand side here shows the revenue, which ended up an increase compared to the comparison period on group level. Lindex contributed with EUR 12.8 million due to improved product availability and the strong commercial offering. Stockmann had a decrease of EUR 1.7 million.
And this is mainly due to the Itis department store closure, as well as the transfer of the furniture assortment in September, as we have already touched upon. Looking into our adjusted operating result. It increased by EUR 3.3 million on group level. The key reasons for this increase were good cost control and improved gross profit. Lindex division adjusted operating result contributed by EUR 2.7 million, and this is mainly due to improved gross profit. The Stockmann division adjusted operating result improved by EUR 0.3 million. This is due to successful efficiency measures and revenue growth in comparable terms contributed to this positive outcome. Let's jump to the next page. Here we're trying to visualize group key figures for the quarter. We can see that the revenue increased slightly to the comparison period. In local currency, the revenue increased by 2.7%.
Adjusted operating result increased to EUR 39.4 million. Operating result ended up at EUR 33.8 million, and net result improved to EUR 29.6 million. The net result was impacted by utilisation of tax losses carried forward. Our group's gross margin improved to 59.1% compared to 58.1% in the comparison period. Earnings per share increased to EUR 0.19 , and this is mainly explained by the stronger net result for the quarter. If we then jump to the next page, here we're trying to visualize how the profitability has developed over a longer period of time. Here we can see that, and we're quite happy to share with you that the Lindex division is increasing. Its 12-month rolling adjusted operating result compared to the previous quarters. If you look specifically at the operating result, it has more than doubled compared to the pre-pandemic levels.
If we look even further back, the improvement could have been even higher. Looking into the Stockmann division, they have also made significant improvements compared to earlier days, as for example, 2020 and 2021. 2025 marks the first full year positive adjusted operating result after several years. By that, we can go to the next page. Here we're trying to talk or not talk. We try to visualize how our cash flow development and our capital expenditures ended up for the full year. When it comes to the operating free cash flow, this is excluding the investment in our Lindex omnichannel distribution center, it ended up at EUR 55 million. This is a strong cash flow improvement, and it was supported by positive revenue development, good inventory control, and also network and capital management throughout the year.
If we look specifically at inventory, it decreased to EUR 163.8 million compared to last year, where it were at EUR 169.6 million. Lindex division saw improvements in its inventory levels due to strong commercial offerings and supply improvements related to the omnichannel distribution centre project. Stockmann division's inventories declined due to good inventory management, and the closure of Itis department store and the transfer of Stockmann's furniture assortment to Vepsäläinen also lowered the Stockmann's inventories for the full year. Looking into the fourth quarter, our CapEx capital expenditure ended up at EUR 6.6 million versus EUR 5.8 million. This is mainly related to investments in digital growth and department store innovations in Helsinki, Turku, and Riga. By the end of December, approximately EUR 103 million out of the total omnichannel centre investment of EUR 110 million has been paid.
We then take the next page, and we look into how our cash position has developed throughout the year. This graph presents the changes in the cash position per item from the beginning of the year to the end of December in relation to previous year. At the end of December 2025, cash and cash equivalence ended up at EUR 134.8 million compared to EUR 114.7 million previous year. This strong cash flow improvement was supported by positive revenue development, good inventory control, and net working capital management. Looking specifically at the fourth quarter, it generated a total cash flow of EUR 81.3 million compared to previous year EUR 48.8 million. We can then jump to the next page. Here we're trying to illustrate how the group's financial position has improved during the latest years, which it has and will enable our future growth.
You can see in the graph that our net debt has remained on a very good level. Excluding IFRS 16 items, the interest-bearing net debt was positive at EUR 52 million. Our equity ratio improved further and reached 64.8% excluding IFRS item and 33.3% including IFRS item. Looking into our lease liabilities under the IFRS 16 reporting standard, it ended up at EUR 594.4 million. Looking into the lease liabilities related to the Lindex division, they were at EUR 288.8 million compared to EUR 272.9 million last year.
The Stockmann division's lease liabilities ended up at EUR 305.5 million versus EUR 330.2 million previous year. Our interest-bearing liabilities stood at EUR 83.3 million. After the reporting period yesterday, 5th of February, we signed or the Lindex Group signed a EUR 50 million secured revolving credit facility agreement. This credit facility matures in May 27, and it's subject to a 15-month extension options.
We have also a pre-existing secured revolving credit facility corresponding to EUR 40 million, which will mature in July 2028. So in total, the group currently has secured revolving credit facility up to EUR 90 million currently not used. So let's have a look at the financial targets and the development. Looking at our performance in 2025, we can draw the following conclusions. Lindex has set a growth target aiming for an annual revenue increase of 3%-5% in the midterm, with a clear objective of reaching EUR 10 billion by the end of 2030. In 2025, Lindex achieved a growth rate of 1.3%. Looking back in 2023, we had a growth rate of 2.7% followed by a drop 2024 by 0.9%. Looking into our digital share revenue, we have a target to reach 30% in the midterm.
In 2025, the digital sales grew and ended up at 22.1% as a share of revenue. Comparing to 2024, where we were at 20.8%. That's also an improvement from 2023, where we were at 19%. For Lindex, the target is to reach 15% in adjusted operating margin in the long -term. In 2025, we reached an operating margin of 11.2%, while we in 2024 had an operating margin of 13.2% and compared to 14.3% in 2023. Overall, Lindex is progressing towards its financial targets. The financial targets we have, they were announced in November 2023 for both divisions, and we'll continue to progress and track these targets annually. If we jump then and look how Stockmann division is performing compared to their targets. The revenue target for Stockmann division is, of course, to focus in the midterm is achieving growth aligned with the market.
By market, we refer to the addressable market in Finland, Latvia, and Estonia, comprising fashion, beauty, and home categories. Market statistics showed a decline of 0.6% in 2025, while the Stockmann division reported a decline of 1.5%. In comparable terms, Stockmann was on par with previous while the market declined. Regarding the cash flow, the goal is to achieve positive free cash flow in the midterm. This objective will be, of course, supported by the target of improving profitability to a 5% adjusted operating margin in the midterm. The Stockmann division positive free cash flow was -EUR 19.4 million in 2025. Profitability was positively affected by significant cost savings in 2025, and we ended up at 0.4% in adjusted operating margin.
So if we then summarize the financial highlights for the Q4 on the next page, we can see result improvements for both divisions, and it was accomplished in a continued, quite challenging market environment. The Stockmann division's first positive full year adjusted operating result after several years is without a highlight for us. And with that, I would like to hand over to Susanne, who will pave our way forward. Thank you so much for listening.
Thanks, Henrik. Looking then at our way forward and starting with the Lindex division, aligned with our strategy, we have big ambitions focusing on accelerating our growth while continuing our transformation into a more sustainable business and also improve scalability and efficiency in our business. We look specifically at 2026 on the next page. For the Lindex division, we are well -positioned to accelerate our growth by leveraging the important investments that we have done now during the recent years, and accelerating our new omnichannel warehouse with full operation, and also leveraging the benefits from our highly automated facility will mark an important milestone for us. As I mentioned earlier, we are now approaching the final steps of our e-commerce ramp-up plan. I am truly looking forward to seeing the full benefits this will bring.
It will also allow the organization to focus entirely on profitable growth moving forward. To drive growth, we need to continue placing the customer at center and further develop our offers in lingerie, women's wear, kids' wear, and beauty. To drive our international expansion further, we will continue our focus on multi-channel excellence. We will continue expanding our presence and growth in Denmark, and we will open our second store in Odense during the spring. We will also launch in several additional locations in Denmark with our partner Magasin du Nord during the first quarter. Digitalization is also one of the key enablers for accelerating our scalable growth and enhanced efficiency. We will continue to advance our digital transformation in our business to support this. We will also drive sustainability transformation with a focus on circularity, climate, and human rights.
Our 2025 targets have guided our sustainability work to date, and we are proud of the progress we have made. The results will be communicated in our coming CSRD report. Building on our learnings and our solid progress made and to continue to drive change in the fashion industry while creating resilience and positive impact, we are now finalizing the new sustainability targets for 2030. Looking at the Stockmann division's strategy, our key target is to improve the financial sustainability and competitiveness of the division. At the heart of this is operational efficiency, which is a key to boosting profitability and enabling also future investments. We are committed to offering a premium curated assortment featuring both exclusive brands and our own unique selections to set us apart in the market.
We also want to strengthen our relationship with loyal customers by providing more personalized content and making our MyStockmann programme even more beneficial and engaging. Enhancing omnichannel performance is another priority, so our customers will enjoy a seamless, high-quality experience, whether they are shopping online or in-store. And if we go to the next page, we can see that in 2026, Stockmann continues the disciplined execution of its strategy with a strong focus on profitability and competitiveness. Systematic work on cost and operational efficiency remains central. Stockmann also continues to develop the organization to ensure both agile and efficient commercial operations. The goal is to enhance agility between marketing, offering, and sales to stay highly competitive in the volatile market environment. The digital channel plays a critical role not only in driving growth and competitiveness, but also in strengthening the Stockmann's competitiveness in an increasingly digital retail landscape.
It continues to support the omnichannel performance by showcasing the full assortment, providing ongoing inspiration, facilitating seamless customer experience between the channels. Stockmann will activate customers through exclusive brand launches, anniversary campaigns, and seasonal inspiration. Just yesterday, Stockmann launched the hyped women's underwear and leisure brand SKIMS exclusively in Finland in the Helsinki flagship and online in Finland and Baltics, with many more exciting brands in the pipeline. This year also marks the 40th anniversary of the beloved Crazy Days, which we are happy to celebrate with our customers far and near. Stockmann continues to enhance the value of its loyalty program by introducing new and tailored benefits based on customer data. This will include early access to campaigns, exclusive events, and new partnerships designed to increase relevance and loyalty. With that, we now open up for questions from you. Let's see. Do we have any questions?
I'm not sure if you seem to have a technical issue, but I unfortunately cannot hear any questions.
Let's then start by questions. We have received plenty of them, and we will start with Susanne. Can you give your view on the fashion market outlook for 2026, and how do you see your revenue development in relation to market development?
Yes, of course. As I described earlier, the fashion market has remained pretty volatile, with only limited improvement in Q4 and not across all markets. I would say despite this, both divisions outperform the main markets. And looking ahead, improving consumer confidence and also purchasing power may gradually support demand, although difference might, of course, be between markets as well. However, with that said also, I think we have strong levers of our own in the company.
With the Lindex division's omnichannel distribution centre soon fully operational, we expect a smoother and more efficient logistic flow that will support our growth ambitions. After a year with a strong focus on bringing the distribution centre fully online and completing the group's restructuring program, I really look forward to shifting more attention towards accelerating growth. This includes further expansion in Denmark, as I mentioned, strengthening our assortment and in-store presentation, including lingerie, the product that we have been doing now at Lindex, and adding the right new and inspiring brands to Stockmann, such as the launch that we did yesterday with the brand SKIMS. Yes.
Thank you, Susanne. Then we have a question to Henrik. We have actually got two questions related to items affecting comparability. So you had high items affecting comparability during fourth quarter. What was the reason for this, and what kind of development do you foresee in this area for the coming months, Henrik?
I think it's an excellent question. And let me put it or let me phrase it like this. I mean, the items affecting comparability in Q4, they were driven by project delays and technical disturbances that we encountered during the Omnichannel Distribution Center project, the OCDC. And this happened early autumn, and it required corrective action as the year progressed. These are extraordinary, and they are non-recurring costs. They are related to restoring stable operations. It's about management of temporary capacity constraints. It was about delivery delays that took place during this transition period of the new warehouses. We took these measures to reduce the risk of disturbances going into the important festive season here in Q4. And we do not foresee this development to continue at this magnitude now going into spring 2026.
Thank you, Henrik. Then we have a question related to the expansion in Denmark. So this would then go maybe to you, Susanne. You have opened your first own store in Denmark. What potential do you see in the Danish market?
We are super excited to strengthen our presence in Denmark, and we see that that market offers a strong potential for the Lindex offering as well. It is an important market for us, and we continue with that also to strengthen our presence in the Nordics. We will, as I said, also open up our second store here during the spring and also add several locations with a physical presence with our partnership, Magasin du Nord. But also planning more stores for the coming months as well.
Thank you. We have a question regarding gross margin development. Henrik, could you please comment on our gross margin development?
Yes, for sure. In Q4, the group's gross margin improved to 59.1% versus 58.1% last year. If you look at Lindex division, it increased mainly due to favorable currency impact. The Stockmann's division's gross margin increased for Q4 and also full year due to good inventory and offering management as well as commercial tactics. Looking into the group's gross margin for the full year, it was on par with previous year. Going forward, we maintain a stable gross margin outlook, broadly in line with the last couple of years. For the Lindex division, approximately 80% of the products are purchased in U.S. dollars, and it meaning that FX movements and also, of course, global freight cost development remain a very important margin driver for Lindex. Of course, possible favorable development in this area may support improved gross margin going forward. Yes.
Thank you, Henrik. Then we have a quite wide question to Susanne to elaborate on. How would you sum up the year for the group? What would be the key highlights that you would take up?
I think as many retailers, when we entered this year, we expected an improvement in the consumer confidence and also related to fashion market growth. However, due to slower than expected economic growth, that tailwind did not really materialize in 2025. At the same time, the year has been demanding due to the execution of the omnichannel distribution center project, which has required significant resources and management focus. However, it is a critical and a strategic investment for the group and also for our future expansion. Encouragingly, towards the end of the year, we have started to see positive effects of this project. In addition, we were also able to complete the restructuring program. The Lindex division delivered growth throughout the year, particularly very strong growth in the fourth quarter. The Stockmann division achieved a positive adjusted full year result.
And the group continues to grow its loyal customer base, which I think is a very strong ingredient to drive future growth as well. So I think throughout the year, we have made and we will continue to make important investments for the future. And this will be super important for us to secure a sustainable growth and long-term profitability. And by that saying, I'm really proud of what we have been achieving, and especially giving my thanks to the employees at Stockmann and Lindex.
Thank you, Susanne. Then we have a question regarding the strategic assessment. Are you still at the starting point when it comes to the department stores, or has there been any progress so far? And if yes, what kind of progress? And Susanne, we have just got also another question, which relates then to the strategic assessment that as the Stockmann division starts to be positive, are you seriously considering to divest it from the Lindex Group? So first of all, has there been progress? If so, what kind? And does now the Stockmann's improved performance impact the assessment?
Yes. First of all, I'm very pleased with the Stockmann division's improvement and happy that we have been able to now really do the execution and start seeing good results of that one. Regarding the assessment, it is a very extensive process. I cannot, however, comment on any details regarding that process and the progress of it. This is something that is owned by the board. The Lindex Group will communicate the outcome of this work when appropriate.
Thank you. Then we go over to the Lindex division. And there we have a question related to the weather impact. Some peers have commented on Q4 impact from weather as winter arrived late in Sweden. Did you at Lindex experience something similar? And I guess mainly in women's fashion and kids' wear. And are you in general impacted by seasonal or temperature fluctuations in the Lindex division?
I think I would say that the weather always has some impact on the customer behavior and needs, and therefore also on our revenue development. What we can see from the fourth quarter is that all the bigger categories-and then I'm talking about the women's wear, kids' wear, and lingerie-they all delivered good growth during the quarter. I think this confirms that we have had a well-balanced assortment and also a very positive and good customer response. Despite having maybe not the cold weather that we were anticipating or maybe wanted in some cases, I think we have been able to mitigate that. Now it seems to be pretty cold. I mean, the cold also came at the later part of December as well.
Thank you. Then we continue with you, Susanne. We have two questions that relate to the Lindex division's market expansion. The first question relates to Denmark: that can you give some soft values or indications you have received from Denmark so far? Then there is a second question that if you are currently considering new entry areas on top of Denmark. First indications, and then if there are thoughts for other countries to be entered.
Yes. Our approach and starting focusing on Denmark has been to open with our e-com setup first to get a better understanding of where we are finding the first customers that really want to buy Lindex garments and products. After that, we are entering with collaborations. We have had a collaboration also before digitally. Now we also have physical presence then with Magasin du Nord since some time back. First store then opened here during the autumn with good progress. We definitely see that we have the potential to open more stores in Denmark. We will have the second one here during the spring. We're also looking at more locations. But of course, you need to be careful and find the right locations for future stores as well.
I think the second part of the questions were more related to maybe extending our presence outside of Denmark. This is not something that we have communicated at this point, so that I cannot say something about at this time.
Thank you, Susanne. Then we go over to Henrik. And operating margins of the Lindex division. What has driven the reduced operating margins in the Lindex division?
In Q4, the operating margin, they decreased. It was mainly due to increased operating costs and higher depreciation. That's, of course, also driven from the OCDC investments project that we have started to depreciate during the year.
Thank you, Henrik. Then we go over to a question related to cash flow. Henrik, are you thinking about cash flow allocation, dividends, or buybacks, and where the remaining cash is put in use?
Oh. I mean, from the company perspective, we are very committed to deliver upon our financial targets. We're also very committed to what Susanne talked about when it was our strategy going forward. These combined will continue to support our cash generation that was very positive during 2025. We definitely believe that we have a very good cash generation. We have a very big chance to continue generating cash. Then I think it's not up to the company to decide on the other topics. So we will be focusing on the financial targets that we are committed to deliver and the strategy that we have set for ourselves going forward for the division.
Thank you, Henrik. We have a question related to Stockmann's personal costs. Despite the efficiency measures highlighted in the 2024 annual report, inflation and wage developments in 2025 have likely offset these gains. 2025 financial statements show that the monetary value of personal expenses didn't drop in a linear fashion with the headcount. This suggests that the cost per remaining employee has risen. Is there an efficiency paradox in the Stockmann division?
I'm trying not to follow the question, but I believe it's like this. Of course, we have inflation and salary increases that impact us and all other companies as well. The work that we have been doing here at Stockmann is, of course, to limit the impact of that and try even to have an improvement on the cost level versus previous year. This you can see both in terms of the personnel cost, but also related to other areas. For example, systems and so on that we have been focusing on during the last two years, I would say. We'll continue to focus on going forward.
Thank you, Susanne. We stay in the Stockmann division. There is a question related to fixed costs. Also regarding the Stockmann division and fixed costs, in 2025, results show that the cost structure remains too rigid. If sales drop, the operating profit falls disproportionately more, what concrete structural changes, not just incremental savings, have been planned to lower the fixed cost base for 2026?
What we are focusing, as said earlier, on doing investments that would then support a lower cost base going forward. We have, for example, within the IT setup, that is one of those areas that we're looking into, as well as logistics, for example. But this is something that we can come back to when we also can explain more about that progress as well.
Thank you. Henrik, can you give us some update on the resolvement of the 2026 bond and how it possibly relates to the new credit facility? What is your expected total impact on the interest paid on debt going forward?
I mean, first of all, I would like to state that we're very pleased with securing the additional RCF instrument. So we have now EUR 90 million available. That enables, of course, among other things, possibly refinancing of the outstanding senior bond that we have during summer to address. It is an option. And we're working determinedly to make sure that we handle that maturity in the best possible way. And at the current stage, we do not speculate or share due to the fact that we haven't made our final decision how to address that topic when that comes in the summer.
Thank you. We stay in the same area. Are the cash at hand and revolving credit facilities enough to repay your bond, or are you planning new financing instruments regarding the refinancing of the bond?
With our current plan, we have sufficient financial headrooms to handle 2026 with the solutions we have at hand.
Thank you, Henrik. A question regarding current cash flow generation. Do you, Henrik, expect the current cash flow generation to be stable, or will this likely unwind through working capital in the future?
Well, I mean, I think we anticipate that our liquidity position will remain solid. It will be supported by continued working capital discipline and, of course, also a more normalised investment level going forward. The expected benefits that we have from our projects, including the OCDC project, will support our cash generation. And as soon as that stabilizes, we do foresee broader project-driven investments, including also OneStock efficiencies, better allocation, improved logistic complexity or reduced, and a more scalable fulfilment platform. And of course, all these benefits are expected to strengthen our cash generation over time. And it will provide us even greater financial flexibility as we progress on our strategic plan that we have set for ourselves going forward.
Thank you, Henrik and Susanne. These were the questions that we have received, so we are ready to end this Q&A session.
Super. Thanks, Marja. We have been able to keep it below an hour here. Good. Thank you all for your good questions. Please be in touch with our investor relations via email if something comes up later. We will publish our Q1 result on April 28th. See you in April at the latest. I would like to thank you all, and I wish you all a nice day going forward. Thanks.
Thank you.