Afternoon, ladies and gentlemen. Thank you for joining the Marimekko results webcast. We will first hear a presentation by our President and CEO, Tina Alahutta Kasko. And after that, Tina and our CFO, Erina Ankar, will take your questions. Tina, please.
Thank you very much, and good afternoon, everybody, and welcome to hear a little bit more about the past year 2019 and how Marameco did overall. So to start with the big picture, we had a very strong year. Our net sales grew in all market areas and our comparable operating profit then thereby improved significantly. Our net sales in total increased by 12%, both in the Finnish markets as well as in the international markets we saw the same level of growth. And in particular, the growth was driven by the retail sales in Finland, by the wholesale sales and licensing income in the Asia Pacific region, as well as our wholesale sales in EMEA region.
And obviously then the great improvement in the net sales impacted positively the comparable operating profit performance. Then when we look at the Q4 in 2019, we also saw really nice growth figures in the last quarter, our net sales growing 17% and thereby our comparable operating profit improving by a nice 87%. Again, there we saw a really nice sales trend from the domestic Finnish market retail sales, but also wholesale sales in Finland as well as our wholesale sales and licensing income increase in the Asia Pacific region. So our key market areas performed very strongly and was also boosted by the positively gone holiday sales. And as mentioned, the comparable operating profit grew very nicely in this quarter as well.
And what I was thinking to do next is to sort of deep dive more in-depth in these results. But overall, I can say that I think as Maremeco, we are in a very good position to start the new decade. We have got a nice swing, a positive direction in our net sales development. As you know, we have a long term international growth strategy and our ambition is to really seek markedly much stronger growth than and through that profitability than before. And at the same time, we have reached a really nice level in our profitability, also reflecting on our long term financial targets of over 10% annual net sales growth and a 15% operating profit margin.
So good in our way towards these long term financial goals ambitions. Then when we sort of deep dive first to Q4 net sales, I already mentioned the key drivers there the most important markets, the biggest market areas for Marimeco. But something that I would maybe in particular highlight here is the particularly strong retail sales in Finland, understanding that the market growth in general has not been in that level. Our like for like growth in retail in Finland was 21%. And at the same time, our wholesale sales also developed very nicely as we had informed before.
In the past year, we had substantially less nonrecurring promotional wholesale deliveries than the year before. But in Q4 well, Q4 was the quarter where the majority of these promotional deliveries sort of weighted. But what we can see in the domestic market figures is the strong position that we have in Finland. And because of that strong position, we can see that the long term development that we have done both in the areas of our collection development as well as in the modernization of our brand, we can see those impacts faster in our strong home market. But as mentioned, also really nice development in international sales.
And something that I could also highlight is that in almost all the other markets also our retail sales grew in the last quarter. Maybe something that would be good to take into account when looking at the last quarter numbers in the Asia Pacific region. There's a timing related factor there, meaning that the wholesale sales growth in the Asia Pacific region was partly due to the part of the region's Q4 2018 deliveries timing to 2019 Q1. So that's also something maybe good to take into account when reading the report. And then when we look at the big picture, 2019 figures not to repeat the main drivers, but saying that they came from our key market areas as well as then the wholesale sales in the EMEA region.
What makes me and Marlameco employees very happy is that we actually saw, as mentioned growth in all of our market areas and in particular from the most important markets. Also there the retail sales like for like in Finland 18% is a very strong result from our home market. And the wholesale sales more moderate development in Finland is really relating to these non recurring promotional deliveries
being on a substantially lower
level last year than the year. Something a factor that really impacted the net sales and also margin development positively this year. And I will talk about that later on. But something that we also saw in Q4 supporting our core business is this very visible Marimekko Uniqlo Japanese Global Apparel Brands Limited Edition Collaboration Collection that really supports us in driving the Mariveko brand awareness and hence traffic around the world. Then we look at the split between all market areas as well as our product lines.
Not so many big news there, but something that I would really highlight is the fact that we could see double digit, very strong growth rates both in fashion as well as bags and accessories, fashion growing by 20% in 2019 bags and accessories 17%. And this is really a reflection of the work that we have done within these categories and collections within the past years. So fashion and bags and accessories as according to our strategy, they form the communicational spearhead of the whole Maraneko lifestyle and the good development that we have done there already for the years preceding is starting to be visible also in these growth rates. So this is something that we would also expect to see. As to the global footprint, as already for some time, the majority of the Maranecua stores are already located outside our home market.
And today, we have around 150 Marameco stores around the world, e commerce stores in 32 markets. In the past year, 5 new stores or shopping shops were opened and 7 were closed. This is part of the normal business as we constantly evaluate locations and their attractiveness and sometimes leases might be also aging. So we need to constantly it's a constantly moving mix. But as you see from the total picture over there, our overall sales retail sales have increased quite nicely in the past year.
And it's good to remember that in the retail sales figures, we also have our own e commerce sales figures. And that's also where you see the productivity. So the improvements in the sales by square meters that we are very much also focusing on as a key growth lever. Maybe something worthwhile mentioning. As you know, we don't separate or open up separately our own e commerce sales figures because we really develop e commerce in a very integrated manner together with our retail sales.
We want to ensure a seamless experience. But what I would really like to highlight is that the long standing investments into the development of the digital business have really started to bear fruit. And again, in the past year, we saw very vigorous growth continuing in the digital e commerce for Marimeco. And that's obviously development that we intend to grow. Yes.
When we look at the brand sales, so Marameco sales measured through consumer prices, so really kind of measuring the reach of the brand regardless of the business model through which we operate. Our brand sales were approximately on the same level as last year and it's good I mean 2018. And it's maybe good to remember that in 2018 we had multiple bigger licensing agreements that also reflects in the comparison figures strength. Then when we deep dive into the comparable operating profit for Q4, as mentioned it grew significantly really boosted by the sales growth. The higher fixed costs especially investments in marketing sort of weakened the operating profit and overall the development was very strong compared to the previous period.
And looking at the full year also very positive development as mentioned. When you look at the operating profit figure for 2019, it's good to remember that in the comparison period, we actually had this non recurring taxable capital gain of €6,000,000 on the sale of our head office that sort of reflects in the strength of the 2018 comparison period. But looking at the comparable operating profit, it's a nice growth of 40%. And in addition to the growth in net sales, driven by the retail sales in Finland, increased wholesale sales and licensing income in Asia Pacific as well as the growth in wholesale sales in EMEA. Also another positive development that reflected in the comparable operating profit improving was the improved relative sales margin.
So this is something that we take very much pride in working hardly on. And this is due to the fact that we have increased regular price sales. We have had more moderate discount promotions. You can see also the impacts of the positive product portfolio optimization work that we have already done for many, many years as well as the increase in the licensing As you know, it's a very attractive business model for us to operate. And then maybe talking a little bit about the key events in 2019.
It was there were many of them, but just like highlighting some of the key ones. So I already mentioned, in short the limited edition collaboration collection with Uniqlo, the global apparel giant. And we had already done one limited edition collaboration collection with them in 2018 springtime, which led to be a very big success. And as a continuation of that, we joined our forces again for the holiday season and created a new limited edition capsule collection. So obviously the reasoning behind doing this from Marimekko's perspective has to do with the fact that these are amazing unique tools for us to increase our global brand awareness.
And obviously brand awareness is critical for us when we build our journey to internationalize and inject this even more ambitious growth than before. So they have proved to be a very good partner for us and this obviously supported very nicely our Q4 overall, but also long term brand awareness creation and introducing Marameco to new audiences that might not have heard about us before. Something that also was kind of an exciting novelty in the past year that you can also see supporting the positive growth, the 20% growth of the ready to wear line in the full year was the introduction of our first ever unisex streetwear collection called the Marinec Kokioski. And this was for the first time launched in the market in the early Q3 and it was received with exceptional excitement. We had the preliminary launch at the Dover Street Market store in Ginza, Tokyo, which is one of these influencer very reputable influencer doors regarded very highly in the world.
And the product will be sold out in a matter of hours and similar excitement we saw then when rolling out the launch across different market areas. So obviously, the logic in the Marameco Kioski collection is to take something that people know. So the most iconic Marameco prints from throughout the years, the most celebrated icons and combine that with something that is utterly surprising, meaning here from Malenika perspective, the streetwear. At the same time, we know that streetwear overall is enjoying a lot of hype around the world. It's sort of in the journey of kind of reshaping what the fashion industry sometimes in order to make a big impact, the best recipe is actually to take something that people know, but then really portray it in a completely surprising way.
And obviously, this is something that we are now continuing in the coming years. And this is really a segment that has been enabled us to reach also to the next generation, so the younger consumer segment. Another key kind of product area launch in the past year had to do with new the new leather bag line. So overall as kind of a key part of the collection modernization work has been that we have wanted to start building looks for customers to really kind of play around play with and have fun with. And in order to really round out the Marimekko style, bags and accessories really play a key role.
Overall in our industry, it's a known fact that for many, many fashion brands, our competitors, but also in the luxury segment, a key part or significant portion of this net sales actually come from bags and accessories. This is a product line that has for the past years already enjoying nice growth. And this year we really saw it continuing on a great growth map supported also by the leather bag launch that sort of enables us to position that segment into a more premium offering as well. Continuing on the brand collaboration side, in Q3 in the summertime, We were part of one of the kind of lead designer collaboration brands for the U. S.
Retailer Target's anniversary collection. So basically they celebrate their 20 years of doing designer collaborations and Maremeco was one of the brands whose part of the original collection was reissued to celebrate this birthday or anniversary. So again, the same message. These sort of initiatives obviously help us to really build awareness and knowledge of our brand in our key market areas. Well, something that we're really excited about, as you know, we've discussed that before, is also the personal share issue that we conducted in Finland in the past year.
And as I said, half of the portion of the ones who were entitled to subscribe took part in the share issue. And now a very big part of our employees also participate in creating our joint future also as shareholders. And I think that this is such a Marimekocultural thing to do because we have a company culture that is very much building this idea of entrepreneurship and a very passionate relationship towards our brand and the lifestyle journey that we're on. So I think it's a very exciting thing that our many of our employees also partake in this journey also in this way. In the springtime in the past year, we also piloted something new in the area of retail or omnichannel retail experience.
There's a lot of one of the biggest disruptions in our industry has to do with the disruption of physical retail and wholesale. And we believe at Marameco that disruption is always a huge opportunity. And in order for really to capture the value that is open up through this opportunity, it's really important to test and try new things and then inject these learnings to our way of working as fast as possible. So as one interesting pilot, during the Milan Design Week, which is the most important interior and home design event in the world with maybe over 300,000 people visiting Milan during the time in April, we actually set up an authentic Mareneco home in the heart of the city. So it was a fully curated Maremeco home experience where the shopping could be done digitally through an application.
So it was no inventory digital shopping, but paired with an extremely inspiring physical experience that really generates emotions and collections. So these learnings we will definitely now utilize as we have already started in early 2020 the creation of and planning of our future experimental omnichannel customer experience. Then talking about 2020, about our outlook. So if we take this invite, so starting from our strong home market Finland. As before Finland represents around half of our company's sales and we expect our sales in Finland to grow in 2020.
Also the domestic wholesales in 20 20 are will be boosted by non recurring promotional deliveries that will be in their value much higher substantially higher than last year. We also expect that the vast majority of the deliveries will take place in the second half of the year. So that's for Finland. Then talking about Asia Pacific, so our other main market area. So as we as you know, as according to our strategy, Asia Pacific is our 2nd biggest market and really represents an important role in our international growth strategy in the longer term.
And we also see that in the longer term there's even growing demand for a brand like Marimekko in the market. Japan is the single most important country in this region. And the other countries' combined share of the company's sales is still relatively small as the operations compared to Japan are still in a more earlier stage. As we know already know with the some 40 stores and e commerce and wholesale channels, the Japanese market for Marimekko is more mature in its status. There's already quite a network of points of sale.
But we constantly work together with our partner to support the sales by developing the operations of the stores, by increasing digital commerce and optimizing the product portfolio to be even further relevant for the local consumer and also help acquire new customers in the important market. However, as we've seen, there's been a lot of news lately about the impact of the coronavirus. And at the moment, as we know, the impacts concern in particular the Asia Pacific region. But overall, the final impacts are still very uncertain. But they may have a negative impact on the sales profitability as well as the operational reliability of the supply chain.
At the same time, it's good to keep in mind that of Maremeco's manufacturing only 15% of our products are manufactured in China. Most of them are manufactured actually in Europe. However, at the moment, we expect Marameco sales in 2020 to further grow in the Asia Pacific region according to our current estimates and expectations. Then also something to be noted is the fact that as mentioned last year, it had come to our attention that there had been great imports from Arameca products out there. And we have taken due measures and the controlling actions will have clearly kind of weakening impact on our net sales and earnings this starting year.
Also licensing income that grew substantially in the past year is expected to be markedly lower than the previous year. Then when we talk about the measures that we're taking this year to really kind of boost further our journey on our strategic road map. So we believe that now we have come to a stage where we've gotten kind of a good trend in our net sales development. Our companies from a financial point of view were very healthy. We have a good profitability level.
And we can see that the megatrends, meaning the overall trend regarding sustainability and changes in people's values, the overall women's empowerment movement, digitalization, all of these trends are supporting the further growth story of Maremeco. Hence, we believe that now is the right time for us to further increase our investments to enable our even more markedly stronger growth than before. And for that reason, the fixed costs are estimated to be increasing significantly relating or versus the previous year. So where will we be then investing? So we will be further strengthening our international business competencies needed for growth and we expect our personal expenses to be substantially higher than the year before.
Obviously, we will be boosting our investments in marketing. As we know, it's so critical to build awareness and we believe that now is the time for really for us to further increase our investments here to really speak to a wider global audience. I think good steps are already taken and it's really a matter of time for us to just amp up our efforts there. So we expect our marketing expenses to grow versus the previous year. Also we will be network as well as we will be investing more in further developing our digital business and IT systems in order to strengthen our overall international competitiveness.
So basically, as we know, for example, digital commerce is a key one of the key engines for our future growth. So we're really putting our investments in the areas that help us achieve in the long term the markedly stronger growth and profitability than before. Also something to be noted is that the estimated effects of the long term bonus system targeted at the company's management will depend on the trend in the price of our share during the year as it's connected to the share price movement. Then maybe just to recap on the key drivers of growth in 2020. So as before, the key drivers of our growth are e commerce, increasing sales by a square meter of the existing 150 Marameco stores around the world as well as partner led retail in Asia.
As mentioned before, in the domestic market, the non recurring promotional deliveries wholesale deliveries will have a significant impact on the company's growth. And in addition, we have an aim to open approximately 10 new Maramecua stores and shop in shops in 2020 with the main thrust being focusing on the retailer open Malameca stores. Then a few words about seasonality. So as typical or traditional in the line of our business, particularly large extent for the especially to a particularly large extent for the earnings due to the timing of these growth investments that I discussed in the previous slides. And obviously, in the final quarter of the year, we know in our business holiday sales are very important and hence the holiday sales make up a significant portion of the net sales in Q4.
Then looking at the financial guidance, we expect our net sales we forecast our net sales to be higher than the previous year and our comparable operating profit is estimated to be approximately at the same level or higher than the year before. Last but not least, the proposal on the 2019 dividend. As we know you know, we believe very much on the steady dividend policy and our aim is to pay an annual dividend and at least half of the earnings per share. And the Board of Directors of Marekka will propose to the AGM that a dividend of €0.90 per share will be paid in 2019. And here you can see the development in our dividends within the past years.
Maybe something to be noted is that in 2018 due to the sale of our headquarter building here, the financial position of Maremecco improved and thereby our Board of Directors felt or therefore, we actually paid out an extra dividend of EUR 1.25 last year on top of the regular €0.60 per share dividend. But I would say that that's maybe the story of the year 2019 for Marekko. As mentioned before, I think that we have a very solid ground now to continue in our long term international growth map seeking even more market growth than before and through that profitability. And obviously, in this journey, we will constantly keep an eye on these on the development of these particular exceptional circumstances like the coronavirus and the Hong Kong protests that we're seeing impacting. So I think I would just say that I'm very proud of the work that the Marimekka employees have done, and it's a great place for us to continue this journey.
And I think that we're ready for questions.
Thank you, Tina. Do we have any questions here at the Marimek House?
Yes.
And both here and over the phone, if you can first state your name for the
Yes. Anna Ryssellem from Evli Research. So have you gotten any sales figures from the Uniqlo collaboration? How well it was received, the autumn winter line?
So obviously, those are confidential. But I will say that on Marneco's behalf, we're very happy about the collaboration also in 20 19 with Uniqlo. And we can really see that collaboration with partners like Uniqlo with whom we share similar values and with whom we have complementary strengths, we can really create something of value for the global customers and at the same time, really significantly build the Maraneko global brand awareness that supports our core business, which is to do with the international expansion and growth.
Okay. And then do you have more specific estimate of the investments for 2020?
So we have said that compared to 2019, we the investment level significantly grow. And maybe we will go here. That was $2,600,000,000 yes. Yes. So basically the investments will be going into revamping and expanding the SOAR network as well as developing digital business and IT systems.
So basically fueling our future growth in the longer term.
Okay. Thank you.
Yes. Thank you.
Do we have any questions over the phone? There have been no audio questions. Okay. We have a few questions online. These are all related to outlook, okay?
And the first question is whether we could a bit talk more about the gray export issue. What is going on there? And what are the impacts might be?
Yes. So I think that overall, one could say that the gray for any company that operates in a global market, these are not unusual phenomenon that come across. And we have a selective distribution kind of strategy. And basically our partners manage these selective distribution systems in different markets. And it has come to our attention that in some markets there have emerged goods that have not been part of the selective distribution system.
And hence, Marameco has started to really in the past year deep dive into this topic to understand where do these unauthorized sort of deliveries come from, and we have taken due action.
Petrik Kayani from Indes would also like to know if we would like to talk more about the 2020 sales outlook in other markets, Scandinavia, North America and EMEA? Because here, we talked about Finland and Asia Pacific.
Yes. So we have sort of approached the outlook from the point of view that we give more kind of in-depth view on the 2 major markets, so Finland and the Asia Pacific. And as said, for Finland, we expect the Finnish market to grow in 2020. And with the current knowledge that we have, we also expect the Asia Pacific market to further grow in 2020. At the same time, we need to keep constantly monitoring the impacts of especially the coronavirus and the Hong Kong protests.
So we will keep an eye on that.
There's also a specific question about the coronavirus and whether it will affect our Q1
sales? So obviously, what we I mean, we all read this in the news that I mean, especially in China, there have been malls closed, people have been asked to stay in their homes, and now there are more restricted opening hours. But obviously, if very understandably people are not moving and going about in the malls. So obviously, we that is there and we're not immune to that either. It remains to be seen what the impacts are and how long the coronavirus kind of keeps developing and expanding.
So I would say that it's very uncertain for us. When it comes to the supply chain side, I would say that it's good to know that 15% of our manufacturing comes from China and the most, I would say, roughly 70% of our manufacturing is from Europe. So it's still a relatively small share of the production. But as we know, the world is very global, so there might be some interlinkages. But at the moment, the situation is very uncertain, I would say.
There's one final question related to outlook, and that's about personnel expenses. What functions, new people are planned to be hired? Or what kind of increases in salaries are we looking at?
Yes. Good question. So basically, when we talk about the investment in the international business talent needed for growth, Then we look at, for example, recruiting people with, let's say, one of our key market areas specific market specific competences where the people might have a certain distribution channel related specific competences or they might relate for example to the roles within our product portfolio and design to ensure the increased relevance of our collections to the international marketplace. So basically what these new recruitments or new roles will be about they will be relating very much to the strategic development areas that we have identified in order for us to view our future growth and be even more competitive.
There's questions about the Uniqlo partnership. These questions, maybe some of them are more related to Uniqlo than us, but an investor would like to know whether we had any impact on volume or pricing as many of the objects sold out in just some hours. And would you if we would do another partnership with Uniqlo, would we change something?
So when it comes to the partnership with Uniqlo, actually in November, when we announced the Uniqlo, actually in November when we announced the Uniqlo collaboration for the holiday season. We also mentioned that the agreement or the agreement is connected to the agreement that we had said that we had tied in the summer in licensing in the Asia Pacific region. So obviously, it means that Maremeko's contribution has to do with really the design aspect and Uniqlo is in charge of the whole kind of distribution of the product. And then when it comes to the other question, whether we would do something differently, I have to say, I mean, speaking from myself and Maraneco's point of view, we're very happy of the collection and the collaboration. And we see that through the increased brand awareness in our key market areas and also new market areas for Maremeco, it really supports the core business of Maremeco that really focuses on creating kind of omni channel ecosystems and direct to consumer.
There's a follow-up question related to that. Did Parimekka see any improvement in brand awareness from the second collaboration collection compared to the first one? And also could Uniqlo become a recurring partner going forward?
So we those kind of studies are yet to be kind of finished from our end. As we know brand awareness is a thing that it develops gradually and it's something that we also monitor gradually and not maybe month on month so much. Obviously, something that where the kind of visibility of these sort of brand collaborations impact is seen is also the effects on the traffic also to Marimeco's own channels. And the other question was about
Could Uniqlo become a recurring partner?
So at the moment, we have now done these 2 limited edition collaboration capsules. And about the future, I will not be able to say more, but we're very happy about the partnership that we've had with them with these 2 collaboration capsules, and we feel that they have really added value in our journey of our long term growth strategy.
Thanks. Do we have, at this point, any questions over the phone? No. What about here? No.
There isn't any more questions online either. So I would just like to thank everybody for participating, and we hope to see you in our next events as well.