Financial Statements 2020

Renowned for
bold prints

Marimekko is a Finnish lifestyle design company

whose original prints and colors have brought joy
to people’s everyday lives for 70 years already. Our
product portfolio includes high-quality clothing, bags
and accessories as well as home décor items ranging
from textiles to tableware.
Since the very beginning, our operations and
design philosophy have been based on longevity:
we want to offer our customers timeless, functional
and durable products that give them long-lasting joy.
When Marimekko was founded in 1951, its
unparalleled printed fabrics gave it a strong and
unique identity. Today, our own printing factory in
Helsinki produces around a million meters of fabric
a year. Serving also as a test laboratory for our
creative community, the modern factory enables us
CONTENTS
to participate in various sustainability development
projects and thus move the entire industry forward 2 From the President and CEO
towards a more sustainable future. 4 2020 in a nutshell
In 2020, brand sales of our products worldwide 5 Financial targets
amounted to 285 million euros and our net sales were 6 Strategy
124 million euros. Globally, there are roughly 150 8 Sustainability
Marimekko stores, and online store serves customers 10 Report of the Board of Directors
in 34 countries. Our key markets are Northern Europe, 18 Proposal for the distribution of profit
the Asia-Pacific region and North America. 19 Key figures of the Group and formulas for the key figures
22 Share and shareholders
26 Financial statements for the financial year
1 January to 31 December 2020
26 Consolidated financial statements, IFRS
26 Consolidated income statement
27 Consolidated balance sheet
28 Consolidated cash flow statement
29 Consolidated statement of changes in shareholders’ equity
30 Notes to the consolidated financial statements
50 Parent company financial statements, FAS
50 Parent company income statement
51 Parent company balance sheet
This publication is not an xHTML document compliant with
the ESEF (European Single Electronic Format) regulation. 52 Parent company cash flow statement
The financial statements and the Board of Directors’ report 53 Notes to the parent company financial statements
2020 in accordance with the ESEF regulation are available
on the company website. 60 Signatures to the financial statements and
the report of the Board of Directors
© Marimekko Corporation 61 Auditor’s report
Puusepänkatu 4 64 Assurance report on ESEF financial statements
00880 Helsinki
Finland 67 Statement of non-financial information 2020
79 Corporate governance statement 2020
Tel. +358 9 758 71
marimekko.com
86 Remuneration report 2020
company.marimekko.com 92 Information for shareholders
2

From the President and CEO

In 2020, the global fashion industry speak to a broader global customer digital sales channels among customers
and specialty retail sector faced the base some years ago, and this work will influence our distribution channel
worst crisis in decades as a result of the supported us in these exceptional choices in the future as well, and the
coronavirus pandemic. Most Marimekko times. With the pandemic, consumers importance of online sales in our business
stores around the world were also became increasingly interested in home will grow even more.
temporarily closed in the first or second decoration, which resulted in robust The line between e-commerce and
quarter, and the pandemic noticeably growth in sales of our home products. physical stores is constantly blurring, and
reduced footfall during the second half The relaxed feel of our ready-to-wear in the post-pandemic reality, stores need
of the year as well. Nevertheless, our collection – now more evident than before to fulfill their new role even more strongly
long-term work to develop the Marimekko – also appealed to consumers in these in the eyes of consumers as meaningful
brand and our digital business, our unusual circumstances. In September, meeting places and experiential
comprehensive range of lifestyle products, the visionary Rebekka Bay took up the platforms for what a brand has to offer.
a diverse business and distribution post of Creative Director at Marimekko. Our flagship store, which expanded
channel model and our ability to adjust Her versatile international experience to Helsinki’s Pohjoisesplanadi in the
our operations rapidly are among the and knowledge of the Asian markets fall, is an excellent example of the new
factors which helped us successfully will support our creative community in role. During the year, our omnichannel
navigate in an extremely difficult operating developing the appeal of our collections network strengthened particularly in
environment. All Marimekko employees even further. the big Asian cities, when a total of nine
are to thank for this. Our teams around the During the past few years, we have new Marimekko stores were opened in
world have determinedly worked together determinedly invested in the development Japan, mainland China, Thailand, Hong
and made Marimekko one of the fewer of our digital business. The e-commerce Kong and South Korea and a webstore
and fewer success stories in an industry competitiveness we have achieved as a for Marimekko products was launched
undergoing an intense transformation. result of this was one of our strengths both in Thailand and in South Korea. We
Despite the challenging situation, our net during the exceptional year. When we will continue deepening our customer
sales in 2020, EUR 123.6 million, were temporarily closed our stores in the spring understanding and thereby further
almost on a par with the previous year. Our to safeguard the health of our personnel developing the customer experience and
comparable operating profit improved by and customers, we had the agility to our collections.
17.8 percent and was 16.3 percent of net move our sales and marketing promotions In addition to a product portfolio
sales. online. The online store was an important that appeals to a wide customer base,
We started to modernize our lifestyle retail sales channel for us in 2020, and its international growth requires building
brand and develop our collections to sales increased significantly. The shift to brand awareness. Brand collaborations
 3

offer us an opportunity to introduce a joy for generations to come, the products digital business, seamless omnichannel
large international audience to Marimekko of tomorrow leave no trace, and positive customer experience, sustainability and
while strengthening our core business. change through fairness and equality. brand awareness. It is also important to
In 2020, we launched two new limited- We believe that, in the future, timeless continuously develop the competences
edition collaboration collections with and sustainable products will be made in of our personnel to work in a rapidly
the Japanese apparel retailer Uniqlo. balance with the environment, in line with changing operating environment.
In addition, our value-based, inspiring the principles of the circular economy, and Combined with the work we have been
and inclusive content especially in with full transparency, starting with raw doing for years already, these investments
social media increased the Marimekko materials. Today, sustainability is essential provide us with an excellent stepping
community further. for ensuring a company’s longevity, but stone to the next phase of international
In line with our values, we see it as our we at Marimekko think that it also opens growth, targeting Asia in particular.
duty to strongly promote sustainability in up new value-creating opportunities for However, the pandemic situation that
our value chain and, through the power of our business. plagues our industry continues. We are
our example, to move the entire industry Our agility and success in the closely monitoring the development of the
forward towards a more sustainable pandemic year have further strengthened situation in each of our market areas and
future. In 2020, we among other things our trust in our international growth will adjust our plans as necessary.
worked to increase the proportion of more strategy. The pandemic has also Marimekko is celebrating its 70th
sustainable materials in our products as intensified the megatrends in our anniversary in 2021. The year will see,
well as to reduce carbon dioxide and other industry, such as digitization and changes among other things, the launch of
emissions. Our carbon dioxide emission in consumers’ values, especially the interesting special products that draw
were 47 percent smaller than in 2019. increased importance of sustainability. on the heart of the world of Marimekko
As a result of continuous development This contributes to making the value- prints as well as some entirely new
work and emission offsetting, our own based, timeless and sustainable kinds of collaborative projects. In these
operations, including our printing factory, Marimekko lifestyle brand more relevant unprecedented times, it is important to
our offices and the stores we operate than ever, thus supporting our growth find new ways to inspire people, and we
around the world, became carbon neutral objectives. We must have the courage would like to warmly welcome our entire
in 2020. to seize the opportunities available to community to celebrate with us.
Our new sustainability strategy, us and to invest in international growth.
published in December 2020, and our Therefore, our plans for 2021 include Tiina Alahuhta-Kasko
ambitious goals are built around three further strengthening the building blocks
guiding principles: timeless design brings of international growth by investing in
4

2020 in a nutshell

Despite the impacts of the coronavirus Net sales

123.6
pandemic, our net sales for 2020,
EUR 123.6 million, were almost on a Our key markets
par with the previous year. Due to the million euros (125.4)
Northern Europe, the Asia-Pacific
pandemic, most Marimekko stores around
Comparable region and North America
the world were temporarily closed in the
operating profit
first or second quarter, and the pandemic
noticeably reduced footfall during the
second half of the year as well. Net sales
20.2 Around 150 Marimekko stores
million euros (17.1) Flagship stores in Helsinki,
were weakened especially by a decline
in retail sales in Finland, North America Comparable operating
Stockholm, Tokyo, Sydney and
and Scandinavia as well as a decrease in profit margin New York
wholesale sales in the Asia-Pacific region.
Booming online sales, which reduced the 16.3 Online store
decline in retail sales, as well as a favorable % (13.6)
trend in wholesale sales in Finland,
reaches our customers in
Scandinavia and EMEA, on the other hand, Comparable 34 countries
had a positive impact on net sales. The EBITDA
increase in Finnish wholesale sales was
partly due to nonrecurring promotional
32.7 We employ
million euros (29.7) about 420 people
deliveries.
Thanks to adjustment measures swiftly Cash flow from
initiated early in the year, comparable
Our share is quoted on
operating activities
operating profit rose by 18 percent to Nasdaq Helsinki Ltd
EUR 20.2 million. 28.1
million euros (29.0)

Net sales by market area, 2020 Net sales by product line, 2020 Net sales by channel, e-commerce included
(2019) (2019)
EUR million Number of
stores

18% (20) 140 200

22% (25)
120
32% (37)
150
5% (7) 100 153 151 154
58% (57)
80
11% (10) 100
60
8% (7) 46% (38) 40
50
20
Finland Fashion
Scandinavia Home 0 0
EMEA Bags & Accessories 2018 2019 2020
North America Wholesale sales
Asia-Pacific Retail sales
Number of stores and shop-in-shops
 5

Financial targets

Long-term financial goals

Net sales Growth in net sales
EUR million % %
• Annual growth in net sales
140
125.4 123.6
100 14 over 10%
12.1
120 111.9 12
80
10 9.3 • Operating profit margin 15%
100
8
80 60 • Ratio of net debt to EBITDA
6
60 at year end max. 2
43 43 42 40 4
40
2 • The intention is to pay a
20 -1.0
20 0 yearly dividend; percentage
0 0 -2 of earnings per share
2018 2019 2020 2018 2019 2020
allocated to dividends
International sales,
% of net sales at least 50%

Comparable operating profit Dividend and earnings per share Net debt / EBITDA
EUR million % EUR

25 25 2.0 At the end of 2020, the ratio of

net debt to EBITDA was -0.10
1.70 1.70
20.2 1.61 (2019: 0.35).
20 20
17.1 1.5

1.25²
15 16.3 15
12.2 0.90
1.00¹
1.0
13.6
10 10.9
10

0.5
5 5 ¹ The Board of Directors proposes that the AGM authorize the
0.60
Board to decide on the payment of a maximum dividend of
EUR 1.00 per share in one or several instalments at a later
0 0 0.0 stage.
2018 2019 2020 2018 2019 2020
² The dividend for 2018 includes a regular dividend of EUR 0.60
Comparable operating Dividend per share and an additional dividend of EUR 1.25 per share.
The additional dividend was paid because the sale of
profit margin, % Additional dividend Marimekko’s head office in spring 2018 strengthened
EPS the company’s financial position.
6

Strategy

Our vision is to be the world’s most inspiring lifestyle design us successfully navigate in an extremely difficult operating
brand renowned for bold prints. environment in 2020. Despite the coronavirus pandemic, our
Marimekko has a long-term international growth strategy net sales were almost on a par with the previous year, and our
and its key markets are Northern Europe, the Asia-Pacific region comparable operating profit improved by 18 percent.
and North America. Our goal in the strategy period which began Our agility and success in the pandemic year have further
in 2018 and extends to 2022 is to achieve markedly stronger strengthened our trust in our international growth strategy. The
profitable growth than before through speaking to an increasingly pandemic has also intensified the megatrends in our industry,
broad customer base. such as digitization and changes in consumers’ values, especially
Our long-term work to develop the Marimekko brand and our the increased importance of sustainability. This contributes to
digital business, our comprehensive range of lifestyle products, a making the value-based, timeless and sustainable Marimekko
diverse business and distribution channel model and our ability to lifestyle brand more relevant than ever, thus supporting our
adjust our operations rapidly are among the factors which helped growth objectives.

Build Maximize Appeal to Approach Increase

sustainable lifestyle sales by boosting a broader global key markets awareness and
offering with fashion digital business and target audience through loyalty through
as spearhead building omnichannel key cities value-driven
ecosystems storytelling
 STRATEGY 7

We have successfully modernized our brand and developed

our collections to appeal to a broader global customer base for
some years already. The Marimekko Kioski streetwear collection,
targeted to a younger customer base, established itself in 2020.
Also, the relaxed feel of our ready-to-wear collection in general
– now more evident than before – appealed to consumers in
these unusual circumstances. In September, the internationally
recognized Rebekka Bay joined us as Creative Director in
strengthening our global growth story. Her visionary approach,
versatile international experience and knowledge of the Asian
markets will support our creative community in developing the
appeal of our collections even further.
Our long-term investment in seamless omnichannel
customer experience and developing our digital business
enabled us to quickly move our retail focus online. During the
year, we continued our development work and introduced
new, contactless digital services to our customers, including
click and reserve, and virtual and private shopping. We further
strengthened the omnichannel customer experience together
with our partners with the opening of new online stores for
Marimekko products in Asia.
In 2020, we launched two new limited-edition collaboration
collections with the Japanese global apparel retailer Uniqlo.
Brand collaborations offer us an opportunity to share
Marimekko’s design philosophy with a large global audience
while strengthening our core business through increased brand
awareness.
During the year, our omnichannel network in the key cities in
Asia strengthened as a total of nine new stores were opened in
Japan, mainland China, Thailand, Hong Kong and South Korea.
A webstore for Marimekko products was opened in Thailand and
South Korea, and in China, our online store in Tmall was selected
for the important 11/11 shopping festival.
Marimekko has a large, loyal community with whom we want
to have an active dialogue. Our important values of inclusivity
and equality were visible for example in our virtual summer
fashion show that reached millions of viewers as well as in our
other inspiring content. Our mission of bringing joy to people’s
everyday lives is now more meaningful than ever. Since the
beginning, timelessness and longevity have formed the basis
of our design philosophy. To guide our sustainability work, we
launched a new, even more ambitious sustainability strategy in
December 2020, and we will regularly report our progress to our
community.
8

At the forefront of
developing more sustainable
products and practices

Sustainability is part of Marimekko’s DNA and sustainability

considerations are part of our daily work at Marimekko.
Our design philosophy and our operations have always been based
on a sustainable approach: we want to provide our customers with
timeless, functional and durable products that bring them long-lasting
joy and that they will not want to throw away
but pass on to the next generation.

HIGHLIGHTS OF OUR SUSTAINABILITY WORK IN 2020

• 47 percent less carbon dioxide emissions than in 2019.
• Our own operations, i.e. our printing factory, offices and our own retail
stores, became carbon neutral through continuous development and
carbon offsetting.
• 82 percent of the cotton sourced by us was more sustainable Better
Cotton.
• The first-ever printed clothes made of Spinnova’s wood-based fiber
containing no harmful chemicals – the collaboration was chosen as a finalist
in Fast Company’s prestigious Innovation by Design Awards, which
recognizes people, teams and companies solving problems through design.
• The first fabrics printed with natural dyes in our printing factory, in
collaboration with Natural Indigo Finland.
• Around one million meters of fabric printed in our own printing factory.
• 60 percent of Marimekko products made within the EU.
• 100 percent of purchases from outside the EU covered by social audits.
• Aligning Marimekko’s supplier list, published since 2015, with the
Transparency Pledge’s requirements.
• Launching an even more comprehensive care guide to help consumers
extend the lifetime of our products.
• Collaborations with Helsinki Pride and Plan International as well as a
donation to the NAACP as part of our work to promote equality and inclusion.
• Launch of Marimekko’s sustainability strategy and targets for 2021–2025.

Read more about our sustainability

work and its progress on pages 67–77.
A comprehensive sustainability review will be
published on our website in summer 2021.
 SUSTAINABILITY 9

We want to be at the forefront of developing more sustainable in risk countries. By actively collaborating with other players in
products and practices. In December 2020, we published our new the industry, we can promote sustainable practices and drive
sustainability strategy for 2021–2025 and raised our sustainability positive change across the whole sector.
targets both for our own operations and for the entire value chain
to a new, markedly more ambitious level. The products of tomorrow leave no trace
Our road map towards a more sustainable future is built on We have launched several projects to significantly reduce
these three guiding principles: emissions in our entire value chain – it is our intention to align our
emissions-related targets with those of the Paris Agreement. We
Timeless design brings joy for generations to come commit ourselves to reduce the environmental footprint of our
We aim to continue creating new classics – high-quality products textile materials by 30 percent (measured in the Higg Material
that stand the test of time. Our objective is that, during their Sustainability Index) by the end of 2025 through using more
lifetime, Marimekko items bring joy to many different consumers, sustainable materials and to cut it further by 2030 by adopting
even generations, after which they are finally recycled into new new material solutions. We also aim at reducing emissions
products. from logistics by 50 percent by the end of 2025. As a result of
continuous development work and emission offsetting, our own
Positive change through fairness and equality operations became carbon neutral in 2020.
We want to promote the implementation of fairness and equality
in our value chain and see to it that our entire value chain is
built on these principles. We will continuously provide more
information about the origin of our products, ultimately aiming at
full transparency of our operations and supply chain, starting with Read more about our targets and
raw materials. We will also extend audits to second-tier suppliers key initiatives on our website.
10

Report of the Board

of Directors

2020 IN BRIEF the previous year, amounting to EUR 2021 authorize the Board to decide on
71,145 thousand (71,163; 63,537). Retail the payment of a maximum dividend
In 2020, the coronavirus pandemic sales in Finland fell by 12 percent and of EUR 1.00 per share in one or several
heavily impacted the fashion industry and comparable retail sales² by 6 percent due instalments at a later stage. The
specialty retail sector all over the world. to the temporary closure of stores and a authorization would be valid until the next
Despite the impacts of the pandemic, significant decline in customer numbers, AGM.
Marimekko’s net sales almost reached but wholesale sales grew by 32 percent.
the level of the previous year: net sales In the Asia-Pacific region, the company’s OPERATING ENVIRONMENT
only declined by 1 percent and were second-largest market, net sales declined
EUR 123,568 thousand (2019: 125,419; by 11 percent to EUR 22,114 thousand The following outlook information is based
2018: 111,879). Net sales were weakened (24,712; 20,811). Wholesale sales in the on materials published by Confederation
especially by a decline in retail sales in market area decreased by 12 percent of Finnish Industries EK and Statistics
Finland, North America and Scandinavia due to the impacts of the coronavirus Finland.
as well as a decrease in wholesale sales pandemic, although sales were back on The world economy is expected to
in the Asia-Pacific region. Booming online the growth track in the second half of the recover from the coronavirus pandemic
sales, which supported retail sales, as well year. Retail sales declined by 18 percent, at a rate of approximately five percent
as a favorable trend in wholesale sales in whereas licensing income was up by 26 in 2021. The recovery will take place at
Finland, Scandinavia and EMEA, on the percent. In total, international sales fell by highly differing rates around the world,
other hand, had a positive impact on net 3 percent and amounted to EUR 52,424 and it involves major uncertainties due
sales. The increase in Finnish wholesale thousand (54,256; 48,342). to virus mutations and the availability of
sales was partly due to nonrecurring In 2020, operating profit was EUR vaccines, among other things.
promotional deliveries. The coronavirus 19,345 thousand (17,117; 17,721). Operating The economic outlook for Finland has
situation and related restrictions and profit included EUR -827 thousand in improved slightly, but it still remains weak.
recommendations in Marimekko’s items affecting comparability, related to Differences between industries are high.
different markets affected store opening restructuring of operations (0; 5,522). The economy can be expected to recover
hours and customer numbers, and retail Comparable operating profit rose by 18 at a similar rate with the rest of the world,
sales fell by 13 percent. Wholesale sales, percent to EUR 20,173 thousand (17,117; but there is major uncertainty in Finland
on the other hand, grew by 13 percent. 12,199). as well, and any tightening of restrictions
Brand sales¹ of Marimekko products Earnings were boosted by a noticeable may have significant impacts on different
amounted to EUR 285,096 thousand decrease in fixed costs as a result industries. The confidence indicator for
(250,754; 248,437). of Marimekko’s prompt adjustment the retail trade increased in January
Net sales in Finland, Marimekko’s measures. A decline in relative sales and was above the long-term average.
largest market, remained on a par with margin, which was mainly due to higher However, sales expectations continue
logistics costs resulting from an increase to be weak, and sales are estimated to
in online sales, as well as reduced net decrease during the winter. The January
1
Brand sales are given as an alternative non- sales had a weakening impact on results. figures for consumer confidence were
IFRS key figure. Brand sales, consisting of
estimated sales of Marimekko products at
Net result for the period was EUR at the strongest level in more than two
consumer prices, are calculated by adding 13,765 thousand (13,018; 13,698) and years. Estimates of the current state of
together the company’s own retail net sales earnings per share were EUR 1.70 personal finances weakened slightly year
and the estimated retail value of Marimekko
(1.61; 1.70). on year, but expectations concerning
products sold by other retailers. The estimate,
based on Marimekko’s realized wholesale sales the trend in both personal and Finland’s
and licensing income, is unofficial and does not The Board of Directors’ proposal for economy improved.
include VAT. The key figure is not audited. the 2020 dividend (Confederation of Finnish Industries
2
Includes both bricks-and-mortar and online The Board of Directors proposes that EK: Business Tendency Survey, January
sales. the Annual General Meeting on 14 April 2021; Confidence Indicators, January
 REPORT OF THE BOARD OF DIRECTORS 11

2021. Statistics Finland: Consumer Net sales by market area

Confidence 2021, January).
Net sales of Finnish retail trade in (EUR 1,000) 2020 2019 Change, %
December grew by 1.3 percent on the Finland 71,145 71,163 0
previous year. Sales of daily consumer Retail sales 45,928 51,918 -12
goods, in particular, performed well. The Wholesale sales 25,058 19,012 32
cumulative working-day-adjusted turnover Licensing income 158 233 -32
of retail trade in 2020 rose by 3.8 percent
and the volume of sales was up by 3.7 Scandinavia 9,883 9,297 6
percent. (Statistics Finland: Turnover Retail sales 4,311 5,434 -21
of Trade, retail trade flash estimate, Wholesale sales 5,572 3,862 44
December 2020).
Licensing income - -

NET SALES
EMEA 13,961 11,992 16
Retail sales 2,160 1,568 38
In 2020, the Group’s net sales declined
Wholesale sales 11,400 9,980 14
by 1 percent to EUR 123,568 thousand
(125,419; 111,879). Although the Licensing income 401 443 -10
coronavirus pandemic had a heavy impact
on customer numbers and store opening North America 6,466 8,257 -22
hours all over the world, Marimekko’s Retail sales 3,952 5,798 -32
comprehensive range of lifestyle products Wholesale sales 2,268 1,987 14
and diverse business and distribution Licensing income 247 472 -48
channel model supported sales in the
challenging operating environment. Net Asia-Pacific 22,114 24,712 -11
sales were weakened especially by a Retail sales 3,609 4,378 -18
decline in retail sales in Finland, North Wholesale sales 16,495 18,733 -12
America and Scandinavia as well as a Licensing income 2,010 1,600 26
decrease in wholesale sales in the Asia-

Pacific region. Booming online sales
International sales, total 52,424 54,256 -3
reduced the decline in retail sales. Retail
Retail sales 14,032 17,178 -18
sales in total fell by 13 percent. Wholesale
Wholesale sales 35,734 34,562 3
sales, on the other hand, grew by 13
Licensing income 2,658 2,516 6
percent. Net sales in Finland remained on
a par with the previous year; international
sales decreased by 3 percent. Total 123,568 125,419 -1
The results of the company’s long- Retail sales 59,960 69,096 -13
term work to modernize its collections Wholesale sales 60,792 53,574 13
and the Marimekko brand are visible Licensing income 2,816 2,748 2
more rapidly in the strong domestic
market than in other market areas, and
despite the pandemic, net sales in Finland
Wholesale net sales are recognized according to the geographical location of the customer.
remained on a par with the previous year,
All figures in the table have been individually rounded to thousands of euros, so there may be rounding
amounting to EUR 71,145 thousand (71,163; differences in the totals. The change percentages have been calculated on exact figures before
63,537). Retail sales fell by 12 percent and rounding.
12 REPORT OF THE BOARD OF DIRECTORS

comparable retail sales by 6 percent due employee benefit expenses, marketing Operating profit margin for 2020 was
to the temporary closure of stores and a and store rents. The various subsidies 15.7 percent (13.6; 15.8) and comparable
significant decline in customer numbers. granted in several different markets to operating profit margin was 16.3 percent
However, robust growth in online sales mitigate the negative business impacts (13.6; 10.9).
supported retail sales. Wholesale sales of the coronavirus pandemic, totaling Net financial expenses were EUR
grew by 32 percent in spite of the EUR 1.4 million, also reduced fixed costs. 1,783 thousand (966; 168), or 1 percent
exceptional situation. The total value The decline in relative sales margin was of net sales (1; 0). Financial items include
of nonrecurring promotional deliveries, attributable, in particular, to increased exchange rate differences amounting to
which, among other things, contributed logistics costs due to substantial growth EUR -720 thousand (35; -64), of which
to the good trend in wholesale sales, was in online sales as well as to bigger EUR -385 thousand (117) were unrealized.
substantially higher than the year before. discounts. The pandemic has increased The impact of IFRS 16 on interest
In the company’s second-biggest surplus inventories in the industry, which expenses was EUR -773 thousand (-899).
market, the Asia-Pacific region, net sales combined with the recession created Result for 2020 before taxes was EUR
declined by 11 percent and amounted to by the pandemic, has made consumers 17,562 thousand (16,151; 17,552). Net result
EUR 22,114 thousand (24,712; 20,811). more price sensitive. However, good for the period was EUR 13,765 thousand
Wholesale sales in the market area margins per product, achieved through (13,018; 13,698) and earnings per share
decreased by 12 percent due to the product portfolio optimization, supported were EUR 1.70 (1.61; 1.70).
impacts of the coronavirus pandemic, Marimekko’s relative sales margin.
although sales were back on the growth Marketing expenses for the year 2020 BALANCE SHEET
track in the second half of the year. were EUR 5,274 thousand (7,379; 6,292),
Some of the wholesale deliveries for or 4 percent of the Group’s net sales The consolidated balance sheet total
the fourth quarter transferred to 2021. (6; 6). as at 31 December 2020 was EUR
An exceptional delivery pattern in the The Group’s depreciation amounted to 114,830 thousand (96,884; 57,114). Equity
comparison year also had an impact on EUR 12,556 thousand (12,543; 2,501), or attributable to the equity holders of the
the relative trend in wholesale sales in 10 percent of net sales (10; 2). Due to the parent company was EUR 52,781 thousand
the region: a part of wholesale deliveries adoption of IFRS 16, some figures for 2018 (38,925; 40,005), or EUR 6.51 per share
for the final quarter of 2018 took place are not comparable. (4.80; 4.96).
in the first quarter of 2019. Wholesale
sales to Japan fell by 16 percent. Retail
sales declined by 18 percent as some, Reconciliation of alternative key figures to IFRS
or at a certain point all, of Marimekko’s
own stores in Australia were temporarily (EUR million) 2020 2019 2018
closed in the second and third quarters. Items affecting comparability
Licensing income grew by 26 percent. Restructuring costs -0.8 - -0.5
Capital gains (head office) - - 6.0
FINANCIAL RESULT Items affecting comparability in operating profit -0.8 - 5.5

In 2020, the Group’s operating profit EBITDA 31.9 29.7 20.2
was EUR 19,345 thousand (17,117; 17,721). Items affecting comparability 0.8 - 5.5
Operating profit included EUR -827 Comparable EBITDA 32.7 29.7 14.7
thousand in items affecting comparability,

related to restructuring of operations (0;
Operating profit 19.3 17.1 17.7
5,522). Comparable operating profit was
Items affecting comparability 0.8 - -5.5
EUR 20,173 thousand (17,117; 12,199).
Comparable operating profit 20.2 17.1 12.2
Earnings were boosted by a noticeable

decrease in fixed costs as a result of
Marimekko’s ambitious saving program. A Net sales 123.6 125.4 111.9
decline in relative sales margin as well as Operating profit margin, % 15.7 13.6 15.8
reduced net sales had a weakening impact Comparable operating profit margin, % 16.3 13.6 10.9
on results. When the coronavirus started
to spread early in the year, Marimekko
Items affecting comparability are exceptional transactions that are not related to the company’s
swiftly initiated adjustment measures.
regular business operations. These include, among other things, costs associated with restructuring
Fixed costs decreased noticeably, as of operations. The Group’s management exercises its discretion when making decisions regarding the
savings were achieved, for example, in classification of items affecting comparability.
 REPORT OF THE BOARD OF DIRECTORS 13

Non-current assets at the end of 2020 The ratio of net debt to 12-month rolling Marimekko products was opened both in
stood at EUR 43,222 thousand (41,555; EBITDA was -0.10 (0.35), i.e. well below Thailand and in South Korea.
4,910). Lease liabilities amounted to EUR the maximum of 2 which is the company’s In 2020, the coronavirus pandemic
37,155 thousand (36,153), and financial long-term goal. Due to the adoption of impacted the operations of Marimekko
liabilities were EUR 725 thousand (251;0). IFRS 16, no comparison figure for 2018 stores in all markets. The majority of all
In addition, the Group had unused was reported. Marimekko stores around the world were
committed credit lines of EUR 17,146 temporarily closed in the first or second
thousand (14,155; 13,000). INVESTMENTS quarter because of the pandemic. The
At the end of the year, net working greater part of Marimekko’s own stores
capital was EUR 7,869 thousand (9,285; The Group’s gross investments in 2020 were closed for most of the second
12,328). Inventories were EUR 22,436 were EUR 2,143 thousand (2,594; 1,280), quarter. With elevated health and safety
thousand (22,564; 22,114). Inventories or 2 percent of net sales (2; 1). Most measures in place, complying with local
rose in the first half of the year as demand of the investments were devoted to IT restrictions and recommendations and
fell suddenly, when the company’s own systems and improving energy efficiency offering new services to reduce close
retail stores were temporarily closed in at the company’s headquarters in contacts, Marimekko reopened most of its
the second quarter due to the coronavirus order to reduce the carbon footprint of own stores in stages in May and June, and
pandemic, but came down again in Marimekko’s own operations. The figures nearly all company-owned stores were
the latter half of the year. Marimekko’s for investments do not include the impact open in the second half of the year, partly
extensive chain of outlet stores and of IFRS 16. with limited hours. Some of the stores in
related promotions provide good Australia were again closed temporarily
opportunities for reducing inventories. STORE NETWORK due to regulations at the beginning of July
Due to the adoption of IFRS 16, some and were reopened at the end of October.
figures for 2018 are not comparable. Good store locations that cater for The partner-owned Marimekko stores in
its target audience are essential for Asia were open in the fourth quarter, but
CASH FLOW AND FINANCING Marimekko. The operations and efficiency after the pandemic situation worsened at
of the store network are continuously the beginning of 2021, opening hours have
In 2020, cash flow from operating assessed and developed. During 2020, been limited in various places.
activities was EUR 28,087 thousand one Marimekko store was opened in Marimekko has been investing in the
(28,992; 12,225), or EUR 3.46 per share Japan and one in mainland China; three development of its digital business for
(3.57; 1.51). Cash flow before cash flow stores opened in Thailand and two each in several years already and was therefore
from financing activities was EUR 25,241 Hong Kong and South Korea. In addition, able to quickly move its promotions online
thousand (27,423; 21,671). one shop-in-shop was opened in Estonia in the spring after temporarily closing its
The Group’s cash and cash equivalents and one in Finland. Marimekko stores own retail stores due to the coronavirus
at the end of 2020 amounted to EUR were closed in Frankfurt, Stockholm, pandemic. The online store was an
41,045 thousand (26,133; 23,174). The Copenhagen, Hong Kong, Shanghai and important retail channel for Marimekko in
increase in cash and cash equivalents Taiwan, and two shop-in-shops in Finland. 2020, and its sales increased significantly
was partly due to the decision to refrain In October, the company’s flagship in the fourth quarter as well. In addition
from paying dividends because of the store in Helsinki saw a major expansion. to its own online store, the company also
exceptional situation; the dividends paid in The revamped flagship represents has distribution through partner-operated
the comparison period totaled EUR 15,003 Marimekko's newest store concept that Marimekko webstores as well as other
thousand. The amount of interest-bearing aims to give customers a strong and online channels.
credit facilities drawn down was EUR 725 holistic experience of the Marimekko Digital service solutions are constantly
thousand (251; 0). In addition, the Group lifestyle. At the end of the year, there were increasing the integration of e-commerce
had unused committed credit lines of 154 Marimekko stores and shop-in-shops. and in-store retailing. For this reason,
EUR 17,146 thousand (14,155; 13,000). The The stores’ net sales in each market are Marimekko continues to report its own
company has also secured a long-term primarily generated from sales to local e-commerce net sales as part of retail
revolving credit facility of EUR 5 million, customers, although sales to tourists sales and sales through other online
which includes a covenant. Marimekko make up a significant portion of the sales channels as part of wholesale sales.
secured additional financing in spring of certain central stores especially during Marimekko focuses major efforts on
2020 in a situation of a very weak view of holiday seasons. Online store reached creating a seamless customer experience
the duration and impacts of the pandemic. customers in as many as 34 countries between different channels and develops
At the end of 2020, the Group’s equity after Marimekko’s partners in Asia its IT systems to strengthen its digital
ratio was 46.6 percent (40.2; 70.0). strengthened their omnichannel business business. Accelerated by the pandemic,
Gearing was -6.0 percent (27.0; -56.9). at the end of the year and a webstore for the importance of online sales in the
14 REPORT OF THE BOARD OF DIRECTORS

company’s business will grow even largest shareholders can be found on a maximum of 100,000 of the company’s
more, and the shift to digital sales the company’s website at own shares, in one or more instalments,
channels among customers will influence company.marimekko.com under to be used as a part of the company’s
Marimekko’s distribution channel choices Investors/Share informationShareholders. incentive compensation program, to
in the future. Further details of shareholdings are be transferred for other purposes or to
available on pages 22–25. be cancelled. The quantity represents
SHARE AND SHAREHOLDERS approximately 1.2 percent of the total
Share trading and the company’s number of the company’s shares at the
Share and share capital market capitalization time of the proposal. The shares would be
Marimekko Corporation’s share is quoted In 2020, a total of 3,344,494 Marimekko acquired with funds from the company’s
in the Consumer Discretionary sector of shares (2,137,688; 1,455,424) were traded non-restricted equity, which means
Nasdaq Helsinki Ltd. The company has on Nasdaq Helsinki, representing 41.1 that the acquisition would reduce funds
one series of shares, each conferring the percent of the shares outstanding (26.3; available for distribution. The shares
same voting rights to their holders. At 18.0). The total value of the share turnover would be acquired otherwise than in
the end of financial year, the company’s was EUR 106,484,058 (63,287,646; proportion to the shareholdings of the
fully paid-up share capital, as recorded 23,348,024). The lowest price of the shareholders through public trading on
in the Trade Register, amounted to EUR share was EUR 21.30 (20.80; 9.92), the Nasdaq Helsinki Ltd at the market price
8,040,000 and the number of shares highest was EUR 46.95 (39.00; 23.50) and prevailing at the time of acquisition and in
totaled 8,129,834. the average price was EUR 31.85 (29.61; accordance with the rules and regulations
16.04). At the end of the year, the closing of Nasdaq Helsinki Ltd. The authorization
Shareholdings price of the share was EUR 45.55 (35.80; was not used in 2020. The authorization is
According to the book-entry register, 20.80). valid until 8 October 2021.
Marimekko had 18,411 shareholders at The company’s market capitalization Furthermore, the AGM authorized
the end of the year (11,511; 8,335). Of on 31 December 2020 was EUR the Board of Directors to decide on the
the shares, 13.7 percent were owned 369,402,939, excluding the Marimekko issuance of new shares and the transfer of
by nominee-registered or non-Finnish shares held by the company (290,332,057; the company’s own shares in one or more
holders (11.6; 12.1). The breakdown of 167,847,888). instalments. The total number of shares
Finnish ownership by owner group was to be issued or transferred pursuant to
as follows: households 40.3 percent, Flagging announcements the authorization may not exceed 120,000
non-financial corporations and housing Moomin Characters Oy Ltd’s share of new or treasury shares, which represents
corporations 20.8 percent, general Marimekko Corporation’s shares and approximately 1.5 percent of the total
government 11.6 percent, financial and voting rights fell below the threshold of 5 number of the company’s shares at the
insurance corporations 12.8 percent, and percent on 17 August 2020 as its holding time of the proposal. Pursuant to the
non-profit institutions 0.8 percent. decreased to 378,740 shares which authorization, the Board may decide on
Marimekko Corporation held 20,000 equaled 4.66 percent of the total number a directed share issue in deviation from
of its own shares as at 31 December 2020. of shares in Marimekko Corporation. Later the shareholders’ pre-emptive right for
These shares accounted for 0.25 percent in August, Moomin Characters Oy Ltd sold a weighty financial reason. The share
of the total number of the company’s its remaining holding in Marimekko. issue may be subject to a charge or free.
shares. Marimekko shares held by the The subscription price of the new shares
company carry no voting rights and no Authorizations and the amount paid for the company’s
entitlement to dividends. The Annual General Meeting held on own shares would be recorded in the
At the end of the year, the number of 8 April 2020 authorized the Board of company’s reserve for invested non-
shares owned either directly or indirectly Directors to decide on the payment of a restricted equity. The Board of Directors
by members of the Board of Directors and maximum dividend of EUR 0.90 per share is authorized to decide on all of the other
the Management Group of the company in one or several instalments at a later terms and conditions of the share issue.
was 1,090,123, representing 13.4 percent stage. After the end of the financial year, The authorization was not used in 2020.
of the number and voting rights of the the Board made use of the authorization The authorization is valid until 8 October
company’s shares. and decided that a dividend of EUR 2021.
Marimekko has neither made nor is 0.90 per share be paid for 2019 in one At the end of the year, the Board of
aware of any shareholder agreements instalment. The dividend record date is Directors had no valid authorizations to
concerning the company’s shares or other 22 February 2021 and the dividend payout issue convertible bonds or bonds with
commitments agreeing on the company’s date is 1 March 2021. warrants.
ownership or the use of voting rights. The AGM also authorized the Board of
Monthly updated information on the Directors to decide on the acquisition of
 REPORT OF THE BOARD OF DIRECTORS 15

PERSONNEL job. The reorganization also affected financial information for 2020 separately
Marimekko’s organizations in Scandinavia, from the report of the Board of Directors.
In 2020, the number of employees, North America and Australia and led The statement is available on pages
expressed as full-time equivalents, locally to the restructuring of some 67–77.
averaged 434 (442; 433). At the end of jobs. The company estimates to achieve The company reports in greater
the year, the Group had 422 (450; 445) annual savings of around EUR 1.3 million detail on its sustainability work and
employees, of whom 84 (98; 102) worked in total through the reorganization and on issues of the environment, health
outside Finland. Salaries, wages and streamlining of cost structure. and safety in a separate sustainability
bonuses paid to personnel amounted to More information on personnel and the review issued annually. The report can
EUR 19,429 thousand (21,186; 19,989). In development of staff is available in the be read on the company's website at
2020, the turnover of employees leaving statement of non-financial information on company.marimekko.com under
was 11 percent (8; 11). pages 67–77. Sustainability/Sustainability review.
With the coronavirus pandemic The next review will be published in
escalating in different markets, Marimekko SUSTAINABILITY summer 2021.
decided in March to temporarily close
all of its own retail stores in Finland, Sustainability management at Marimekko RESEARCH AND DEVELOPMENT
Scandinavia, Germany, the United States is part of everyday leadership and
and Australia. As a result of consultative operational development. Among Marimekko’s product planning and
negotiations conducted in Finland and the principal themes of Marimekko’s development costs arise from the
corresponding processes in different sustainability strategy from 2016 to 2020 design of collections and collaboration
countries, almost the entire retail were sustainable and timeless design, on new, more sustainable materials and
organization was laid off temporarily. engagement of stakeholders and staff, manufacturing methods. Design costs are
Employees in Finland and other countries a responsible supply chain, resource recorded in expenses.
have been invited back to work in stages efficiency, and caring for the environment
as the company’s own stores have been and personnel. In 2020, the company’s MANAGEMENT
reopened with elevated health and safety activities included work to increase the
measures in place and complying with proportion of more sustainable materials Board of Directors, management and
local restrictions and recommendations, in its products as well as to reduce carbon auditors
but some of the layoffs still continue. dioxide and other emissions. Marimekko Corporation’s Board of
On 8 October 2020, Marimekko Marimekko wants to be at the Directors is elected by the Annual General
announced that its consultative forefront of continuously developing more Meeting. According to the Articles of
negotiations in Finland and the sustainable products and practices and Association, the Board of Directors
corresponding processes in its therefore raised its sustainability targets shall consist of four to seven ordinary
organizations in Scandinavia, North both for its own operations and for the members. Their term of office ends at
America and Australia, initiated in August, entire value chain to a new, markedly the conclusion of the next AGM. The
had been completed. The aim of the more ambitious level in its sustainability Board elects a Chairman from amongst its
negotiations and the corresponding strategy from 2021 to 2025, which was members.
processes was to reorganize and published in December. The new strategy The duties and responsibilities of
streamline the company’s operations is built on three guiding principles: the Board of Directors are determined
to better respond to the structural timeless design brings joy for generations primarily by the Articles of Association
changes in the fashion and specialty retail to come, the products of tomorrow leave and the Finnish Companies Act. The
sector and the dramatic transformation no trace, and positive change through Board deliberates on all matters that are
of consumers’ purchasing behavior, fairness and equality. significant to the Marimekko Group’s
accelerated by the coronavirus pandemic. The company has a Code of Conduct business operations. These include
The new organization based on the specifying the way of working for all approving strategic policies, budgets
consultation and the corresponding employees and management. Marimekko's and operating plans, and deciding on
processes will further strengthen supplier partners also have to commit significant investments, mergers and
Marimekko’s customer-centricity themselves to compliance with the acquisitions. The Articles of Association
and omnichannel approach in an guidelines drawn up for them, which do not provide the Board of Directors or
increasingly digital market. In Finland, among other things include a prohibition the President and CEO with any powers
the reorganization and streamlining of on child labor and forced labor. other than those that are customary.
operations led to the termination of 20 Decisions to amend the Articles of
employment contracts and 31 people were Statement of non-financial information Association or to increase the share
offered a new or a significantly modified Marimekko issues a statement of non- capital are made pursuant to the
16 REPORT OF THE BOARD OF DIRECTORS

provisions of the Finnish Companies Act and CEO is held by Tiina Alahuhta-Kasko. who are registered on the dividend
in force. The following changes in the payout record date of 22 February 2021
The AGM on 8 April 2020 appointed company’s management took place in in the company’s Shareholder Register
seven members to the company’s 2020. Rebekka Bay was appointed as held by Euroclear Finland Ltd on behalf
Board of Directors. Rebekka Bay, Elina Marimekko’s Creative Director and a of the Board of Directors of Marimekko
Björklund, Arthur Engel, Mika Ihamuotila, member of the Management Group as Corporation. The dividend payout date is
Mikko-Heikki Inkeroinen, Helle Priess and of 1 September 2020 and Sanna-Kaisa 1 March 2021.
Catharina Stackelberg-Hammarén were Niikko as Chief Marketing Officer (CMO)
re-elected. Rebekka Bay resigned her and a member of the Management Group MAJOR RISKS AND FACTORS OF
position as a member of the Board on as of 8 October 2020. Dan Trapp started UNCERTAINTY
2 June 2020, when she was appointed as Marimekko’s Chief Sales Officer (CSO)
Marimekko’s Creative Director. The Board and member of the Management Group Factors of uncertainty over the global
is chaired by Mika Ihamuotila and vice- on 2 November 2020. Morten Israelsen, economic trend affect the retail trade
chaired by Elina Björklund. Chief Sales Officer (CSO) and member of and consumer confidence in all of the
From among its members, the Board the Management Group, left his position company’s market areas. The coronavirus
of Directors elected Elina Björklund as on 16 October 2020. that spread rapidly all over the world
Chairman and Mikko-Heikki Inkeroinen At the end of 2020, the company’s during the first quarter of 2020 created
and Catharina Stackelberg-Hammarén as Management Group comprised Tiina the worst crisis experienced by the global
members of the Audit and Remuneration Alahuhta-Kasko as Chairman and Elina fashion industry and specialty retail sector
Committee. All members of the Audit Anckar (Chief Financial Officer), Rebekka in decades. The pandemic impacts the
and Remuneration Committee are Bay (Creative Director), Tina Broman global economic trend in many ways, and it
independent of the company and its (Chief Supply Chain and Product Officer), has taken uncertainty to a completely new
significant shareholders. Kari Härkönen (Chief Digital Officer), level. The coronavirus pandemic and other
The AGM resolved that the annual Sanna-Kaisa Niikko (Chief Marketing exceptional circumstances, especially if
remuneration payable to the members of Officer), Tanya Strohmayer (Human prolonged, can have significant impacts
the Board of Directors be as follows: EUR Resources Director), Dan Trapp (Chief on Marimekko’s sales, profitability, cash
48,000 to the Chairman, EUR 35,000 Sales Officer) and Riika Wikberg (Business flow and the operational reliability of the
to the Vice Chairman and EUR 26,000 Development and Transformation company’s value chain. They can have
to the other members of the Board. It Director) as members. both short-term and long-term impacts
was further resolved that a separate The AGM re-elected KPMG Oy Ab, on consumers’ preferences, purchasing
remuneration be paid for committee Authorized Public Accountants, as the behavior and buying power. Changes in
work to persons elected to a committee company’s auditor, with Virpi Halonen, these especially in Finland and Japan,
as follows: EUR 2,000 per meeting to Authorized Public Accountant, as the which are the company’s biggest single
Chairman and EUR 1,000 per meeting to auditor with principal responsibility. It was countries for business, pose considerable
members. According to the resolution by decided that the auditor’s fee will be paid strategic risks to the company. The
the AGM, approximately 40 percent of the as per invoice approved by the company. economic recession and a rise in
annual remuneration were to be paid in unemployment can affect the company’s
Marimekko Corporation’s shares acquired Corporate governance statement sales outlook and increase consumers’
from the market and the rest in cash. In The corporate governance statement for price sensitivity.
addition, the AGM resolved that in case a 2020 is issued separately from the report Other strategic risks include risks
member of the Board held the company’s of the Board of Directors. The statement related to changes in the company’s
shares worth more than EUR 1,000,000 is available on pages 79–85. design, product assortment and product
on the date of the Meeting, 8 April 2020, distribution and pricing. Digitization in
the remuneration would be paid entirely EVENTS AFTER THE END OF THE retail trade has gathered pace in the past
in cash. FINANCIAL YEAR few years and will further accelerate as
The Board of Directors elects the a result of the coronavirus pandemic,
company’s President and CEO and Dividend for 2019 which can have an impact on the
decides on the President and CEO’s salary After the end of the financial year, the company’s distribution channel solutions
and other remuneration on the basis of Board of Directors made use of the and choices, sales and profitability as
a proposal drawn up by the Audit and authorization granted to it by the Annual well as create new revenue generation
Remuneration Committee. The duties General Meeting on 8 April 2020 and models. The importance of omnichannel
of the President and CEO are set down decided that a dividend of EUR 0.90 per business in the retail trade is emphasized.
in the Finnish Companies Act. The post share be paid for 2019 in one instalment. International e-commerce increases the
of Marimekko Corporation’s President The dividend will be paid to shareholders options available to consumers and the
 REPORT OF THE BOARD OF DIRECTORS 17

significance of big e-commerce operators. to internationalization, digitization, and environmental aspects (for example
The coronavirus pandemic has also sustainability as well as the supply and production methods as well as raw
intensified the financial difficulties of logistics chain. As Marimekko is a small materials and chemicals used) as well as
many traditional wholesale customers in company, risks related to key personnel transparent communications on these
the fashion sector, such as department can also be significant. The coronavirus subjects are of growing significance to
stores and multi-brand retailers, which pandemic increases operational risks customers. These sustainability elements
may have an impact on Marimekko’s related especially to taking care of the apply to Marimekko’s own production and
business and distribution channel choices. health and safety of customers and sourcing as well as licensed products.
Maintaining competitiveness in a rapidly employees, production, supply and Compliance with sustainable business
changing operating environment being logistics chain reliability and efficiency, methods is important in maintaining
revolutionized by digitization demands inventory and product flow management customers’ confidence; any failures or
agility, efficiency, flexibility and the as well as cybersecurity and information errors in this area will involve reputation
constant re-evaluation of operations. The system reliability as the importance of risks. Any delays or disturbances in
company’s ability to design, develop and e-commerce is further emphasized. supply, or fluctuations in the quality of
commercialize new products that meet Early commitment to product orders products, may have a harmful impact on
consumers’ expectations while ensuring from subcontractors, which is typical of business. Business and reputation risks
effective, quickly reacting and sustainable the industry, weakens the company’s are prevented by taking care of product
production, sourcing and logistics also possibilities to respond to rapid changes safety as well as through continuous
has an impact on the company’s sales and in demand especially in exceptional quality control and sustainability work.
profitability. situations. For example, a rapid increase Climate change is expected to
The company’s growth in the longer in demand can pose challenges in the bring an increase in various extreme
term is based primarily on omnichannel availability of products. phenomena such as floods, typhoons
retail: on increasing e-commerce, on In normal circumstances, too, there are and hurricanes. Marimekko has stores in
partner-led retail in Asia, as well as on risks associated with information system areas in which such extreme phenomena
enhancing the sales per square meter reliability, dependability and compatibility. may occur, and if they damage stores
of existing stores in the company’s main With digitization, various risks related to or cause momentary changes in
market areas. The Asia-Pacific region is cybersecurity and personal data protection consumers’ purchasing behavior, it may
Marimekko’s second-biggest market, and have also increased. DoS attacks, result in lost sales as well as expenses.
it plays an important role in the company’s malfunctions in data communications or, Extreme phenomena may also affect
growth and internationalization. Major for example, in the company's own online the availability of products if they cause
partnership choices, partnering contracts store, may disrupt business or result in lost damage to the company’s suppliers’
and other collaboration agreements sales. Data leakage can lead to claims for factories. Furthermore, climate change
involve considerable risks. With the damages and reputation risks. or extreme weather may cause droughts,
company’s internationalization and the Operational risks related to soil depletion or other changes in growth
growing interest in its brand, risks related Marimekko’s supply chain are associated conditions, which could impact the
to gray exports have increased, which especially with procurement and logistics availability and price of Marimekko’s most
may have an impact on the company’s processes and their flexibility and used raw material, cotton.
sales and profitability. Store lease efficiency as well as price fluctuations Among the company’s financial risks,
agreements in Finland and abroad also for raw materials and procurements. those related to the structure of sales,
contain risks. As product distribution is expanded price trends for factors of production,
Intellectual property rights play a vital and operations are diversified, risks changes in cost structure, changes in
role in the company’s success, and the associated with inventory management exchange rates (particularly the US dollar,
company’s ability to manage and protect also grow. Substantial nonrecurring Swedish krona and Australian dollar),
these rights may have an impact on the promotions can also increase these risks. taxation, and customers’ liquidity may
value and reputation of the company. Enhancing sustainability is increasingly have an impact on the company’s financial
Agreements with freelance designers and important for competitiveness in the status. The coronavirus pandemic has
fees paid to designers based on these industry, which can have an impact on significantly increased risks related to
agreements are also an essential part of the company’s sales and profitability. The customers’ liquidity.
the management of intellectual property company primarily uses subcontractors
rights. As the company internationalizes, to manufacture its products. Of the MARKET OUTLOOK AND GROWTH
the risks of infringements of its intellectual sustainability elements of manufacturing, TARGETS FOR 2021
property rights may increase. especially social aspects related to the
Prominent among the company's supply chain (including human rights, The coronavirus pandemic has created
operational risks are those related working conditions and remuneration) the worst crisis experienced by the global
18 REPORT OF THE BOARD OF DIRECTORS

fashion industry and specialty retail sector development of the coronavirus situation FINANCIAL GUIDANCE FOR 2021
in decades, and it will heavily impact and possible tightening restrictions in
the sector in 2021 as well. It has taken different market areas as well as changes The Marimekko Group's net sales for
uncertainty over the global economy to in customer numbers in stores influence 2021 are expected to be higher than
a completely new level and is changing the outlook for both retail and wholesale, in the previous year. Comparable
consumers’ purchasing behavior. The including nonrecurring promotions. operating profit margin is estimated to be
exceptional circumstances can have an Rapid fluctuations in demand due to approximately on a par with the long-term
impact on Marimekko’s sales, profitability the pandemic can have an impact, for goal of 15 percent.
and cash flow. Furthermore, the global example, on the availability of products However, the instability caused by the
crisis may affect the operational reliability and consequently on net sales. Net sales coronavirus pandemic in Marimekko’s
of the company’s value chain. The and earnings also essentially depend on markets continues, and therefore there
duration of the pandemic, new infection maintaining the operational reliability of are significant uncertainties associated
waves and virus variants as well as the distribution centers and logistics in the with the trend in net sales and earnings.
way the crisis is handled by different exceptional situation. Marimekko will These uncertainties are described in the
countries influence the depth of the continue actions to control gray exports, Major risks and factors of uncertainty
economic recession in different markets. which will have a clear weakening impact section of this report.
Finland, Marimekko’s important on the company’s sales and earnings in
domestic market, traditionally represents 2021. Licensing income is forecast to be THE BOARD OF DIRECTORS’
about half of the company’s net sales. lower than in the previous year. PROPOSAL FOR DIVIDENDS
Sales in Finland are expected to Marimekko plans to accelerate
grow on the previous year. Domestic international growth in 2021 and to invest The parent company’s distributable
wholesale sales in 2021 will be boosted especially in digital business, seamless funds amounted to EUR 38,649,093.87;
by nonrecurring promotional deliveries, omnichannel customer experience, profit for the financial year was EUR
the total value of which is estimated to be sustainability and brand awareness. 15,934,625.49. Marimekko’s Board of
substantially higher than the year before. Fixed costs are expected to be up on the Directors proposes that the Annual
A vast majority of the deliveries will take previous year. In 2020, fixed costs were General Meeting on 14 April 2021
place in the second half of the year. reduced by partly temporary cost savings authorize the Board to decide on the
The Asia-Pacific region is Marimekko’s as well as subsidies granted in different payment of a maximum dividend of
second-largest market and it plays countries to mitigate the negative EUR 1.00 per share in one or several
a significant part in the company’s business impacts of the coronavirus instalments at a later stage. The
international growth. Japan is clearly the pandemic. Marketing expenses are authorization would be valid until the next
most important country in this region expected to grow (2020: EUR 5.3 million). Annual General Meeting.
to Marimekko and already has a very Total investments are also estimated to The Board’s proposal reflects the
comprehensive network of Marimekko increase (2020: EUR 2.1 million). Most uncertainty caused by the coronavirus
stores. The other Asian countries’ of the investments will be devoted to pandemic in general economic conditions.
combined share of the company’s IT systems in order to strengthen the The company will publish the possible
net sales is still noticeably smaller, company’s digital business. The estimated decision on dividend payment separately
but operations in these countries are effects of the long-term bonus system and, at the same time, confirm the
constantly growing. All Marimekko stores targeted at the company’s Management pertinent record and payment dates.
in Asia are partner-owned. Net sales Group will depend on the trend in the
in the Asia-Pacific region are expected price of the company’s share during the ANNUAL GENERAL MEETING
to increase in 2021. The aim is to open year.
approximately 5 to 10 new Marimekko The instability caused by the The Annual General Meeting of
stores and shop-in-shops in 2021, and coronavirus pandemic continues. Marimekko is scheduled to be held on
most of the planned openings will be in Marimekko is closely monitoring the Wednesday 14 April 2021 at 2.00 p.m.
Asia. development of the pandemic situation
Both the company’s own and its Asian in each of its market areas and will adjust Helsinki, 18 February 2021
partners’ omnichannel Marimekko retail its operations and plans according to the
is the key driver of Marimekko’s growth. situation. Marimekko Corporation
Nonrecurring promotional wholesale Because of the seasonal nature of Board of Directors
deliveries in Finland are also estimated Marimekko’s business, the major portion
to have a significant impact on the of the company’s net sales and earnings
company’s growth in 2021, and they can are generated during the last two quarters
increase Marimekko’s inventory risks. The of the year.
 19

Key figures
of the Group

Key financial figures

2020 2019 2018
Net sales, EUR 1,000 123,568 125,419 111,879
Change in net sales, % -1.0 12.1 9.3
Operating profit, EUR 1,000 19,345 17,117 17,721
% of net sales 15.7 13.6 15.8
Comparable operating profit, EUR 1,000 20,173 17,117 12,199
% of net sales 16.3 13.6 10.9
Financial income, EUR 1,000 592 462 178
Financial expenses, EUR 1,000 -2,375 -1,429 -346
Result before taxes, EUR 1,000 17,562 16,151 17,552
% of net sales 14.2 12.9 15.7
Taxes, EUR 1,000 3,798 3,133 3,855
Net result for the period, EUR 1,000 13,765 13,018 13,698
Balance sheet total, EUR 1,000 114,830 96,884 57,114
Net working capital, EUR 1,000 7,869 9,285 12,328
Interest-bearing liabilities, EUR 1,000 37,879 36,404 408
Shareholders’ equity, EUR 1,000 52,781 38,925 40,005
Net debt / EBITDA -0.10 0.35 -
Return on equity (ROE), % 30.0 33.0 38.8
Return on investment (ROI), % 22.5 17.9 47.6
Equity ratio, % 46.6 40.2 70.0
Gearing, % -6.0 27.0 -56.9
Gross investments, EUR 1,000 2,143 2,594 1,280
% of net sales 1.7 2.1 1.1
Employee salaries, wages and bonuses, EUR 1,000 19,429 21,186 19,989
Average personnel 434 442 433
Personnel at the end of the financial year 422 450 445

Return on equity (ROE) Return on investment (ROI)

% %

50 60

38.8 50 47.6
40
33.0
30.0 40
30
30
22.5
20
17.9
20

10
10

0 0 The adoption of IFRS 16 on 1 January 2019

2018 2019 2020 2018 2019 2020 has affected the comparability of key figures.
20 KEY FIGURES OF THE GROUP

Per-share key figures

2020 2019 2018
Earnings per share (EPS), EUR 1.70 1.61 1.70
Equity per share, EUR 6.51 4.80 4.96
Dividend per share, EUR 1.00¹ 0.90² 1.85³
Dividend per profit, % 58.8¹ 55.9² 108.8³
Effective dividend yield, % 2.2¹ 2.5² 8.9³
P/E ratio 26.8 22.2 12.2
Share issue adjusted average number of shares 8,109,834 8,100,246 8,080,095
Share issue adjusted number of shares at the end of the period 8,109,834 8,109,834 8,069,610

Earnings per share Dividend per share Effective dividend yield

EUR EUR %
2.0 2.0 10
8.9
1.70 1.70
1.61
8
1.5 1.5
1.25 6
1.00
1.0 0.90
1.0
4
2.5
2.2
0.5 0.5
2
0.60

0.0 0.0 0
2018 2019 2020 2018 3 2019 2 2020 1 2018³ 2019² 2020¹

P/E ratio

30
26.8
25
22.2
20

15 ¹ Board proposal of 18 February 2021: Marimekko’s Board of Directors proposes that the AGM on 14 April
12.2
2021 authorize the Board to decide on the payment of a maximum dividend of EUR 1.00 per share in one
10 or several instalments at a later stage. The authorization would be valid until the next AGM.
² The AGM held on 8 April 2020 authorized the Board of Directors to decide on the payment of a
5 maximum dividend of EUR 0.90 per share in one or several instalments at a later stage.
No dividends were paid in 2020. After the end of the financial year, the Board made use of the
authorization and decided that a dividend of EUR 0.90 per share be paid for 2019 in one instalment.
0
2018 2019 2020 ³ Regular dividend EUR 0.60 per share plus additional dividend EUR 1.25 per share.
 KEY FIGURES OF THE GROUP 21

Formulas for the key figures

COMPARABLE EBITDA, EUR Operating result – depreciation – impairments – items affecting comparability

COMPARABLE OPERATING RESULT, EUR Operating result – items affecting comparability in operating result

COMPARABLE OPERATING Operating result – items affecting comparability

x 100
RESULT MARGIN, % Net sales

RETURN ON EQUITY (ROE), % Rolling 12 months (Profit before taxes - income taxes)
x 100
Shareholders’ equity (average for the financial year)

RETURN ON INVESTMENT (ROI), % Rolling 12 months (Profit before taxes + interest and other financial expenses)
x 100
Balance sheet total – non-interest-bearing liabilities (average for the financial year)

EQUITY RATIO, % Shareholders’ equity

x 100
Balance sheet total – advances received

EARNINGS PER SHARE (EPS), EUR Profit before taxes – income taxes
Adjusted number of shares (average for the financial year)

EQUITY PER SHARE, EUR Shareholders’ equity

Number of shares, 31 Dec.

DIVIDEND PER SHARE, EUR Dividend paid for the financial year
Number of shares, 31 Dec.

DIVIDEND PER PROFIT, % Dividend per share x 100

x 100
Earnings per share (EPS), share issue adjusted

EFFECTIVE DIVIDEND YIELD, % Dividend per share x 100

x 100
Adjusted share price, 31 Dec.

P/E RATIO Adjusted share price, 31 Dec.

Earnings per share (EPS), share issue adjusted

NET WORKING CAPITAL, EUR Inventories + trade and other receivables + current tax assets
– tax liabilities – current provisions – trade and other payables

INTEREST-BEARING NET DEBT, EUR Interest-bearing liabilities – cash in hand and at banks – interest-bearing loan receivables

GEARING, % Interest-bearing net debt

x 100
Shareholders’ equity

Net debt / EBITDA Interest-bearing net debt

Comparable rolling 12-month EBITDA
22

Share and
shareholders

Share that the acquisition would reduce funds concerning the company’s shares or
Marimekko Corporation’s share is quoted available for distribution. The shares other commitments agreeing on the
in the Consumer Discretionary sector would be acquired otherwise than in company’s ownership or the use of
of Nasdaq Helsinki Ltd. Marimekko proportion to the shareholdings of the voting rights.
Corporation was listed on the I List of the shareholders through public trading on
Helsinki Stock Exchange in March 1999 Nasdaq Helsinki Ltd at the market price Dividend policy
and on the main list on 27 December prevailing at the time of acquisition and in Marimekko aims to pay a regular dividend
2002. accordance with the rules and regulations every year. The dividends to be paid
The company has one series of shares, of Nasdaq Helsinki Ltd. The authorization and their amount and the payout date
each conferring the same voting rights to was not used in 2020. The authorization is depend on the company’s financial result,
their holders. The company’s shares have valid until 8 October 2021. financial situation, equity ratio, need
been included in the book-entry register Furthermore, the AGM authorized for working capital and other factors.
since 17 February 1999. the Board of Directors to decide on the Marimekko intends to follow a stable
issuance of new shares and the transfer of and active dividends policy that by and
Share capital and number of shares the company’s own shares in one or more large reflects the company’s earnings
At the end of 2020, the company’s fully instalments. The total number of shares trend. Marimekko’s goal is to distribute
paid-up share capital, as recorded in to be issued or transferred pursuant to as dividends at least half of earnings per
the Trade Register, amounted to EUR the authorization may not exceed 120,000 share annually.
8,040,000 and the number of shares new or treasury shares, which represents
totaled 8,129,834. approximately 1.5 percent of the total Dividend for 2019
number of the company’s shares at the The AGM held on 8 April 2020 authorized
Authorizations time of the proposal. Pursuant to the the Board to decide on the payment of a
The Annual General Meeting held on authorization, the Board may decide on maximum dividend of EUR 0.90 per share
8 April 2020 authorized the Board of a directed share issue in deviation from in one or several instalments at a later
Directors to decide on the payment of a the shareholders’ pre-emptive right for stage. After the end of the financial year,
maximum dividend of EUR 0.90 per share a weighty financial reason. The share the Board made use of the authorization
in one or several instalments at a later issue may be subject to a charge or free. and decided that a dividend of EUR
stage. After the end of the financial year, The subscription price of the new shares 0.90 per share be paid for 2019 in one
the Board made use of the authorization and the amount paid for the company’s instalment. The dividend payout record
and decided that a dividend of own shares would be recorded in the date is 22 February 2021 and the dividend
EUR 0.90 per share be paid for 2019 company’s reserve for invested non- payout date is 1 March 2021.
in one instalment. restricted equity. The Board of Directors
The AGM also authorized the Board of is authorized to decide on all of the other Proposal for the 2020 dividend
Directors to decide on the acquisition of terms and conditions of the share issue. Marimekko’s Board of Directors proposes
a maximum of 100,000 of the company’s The authorization was not used in 2020. that the AGM on 14 April 2021 authorize
own shares, in one or more instalments, The authorization is valid until 8 October the Board to decide on the payment of a
to be used as a part of the company’s 2021. maximum dividend of EUR 1.00 per share
incentive compensation program, to At the end of the year, the Board of in one or several instalments at a later
be transferred for other purposes or to Directors had no valid authorizations to stage. The authorization would be valid
be cancelled. The quantity represents issue convertible bonds or bonds with until the next AGM.
approximately 1.2 percent of the total warrants. The Board’s proposal reflects the
number of the company’s shares at the uncertainty caused by the coronavirus
time of the proposal. The shares would be Shareholder agreements pandemic in general economic conditions.
acquired with funds from the company’s Marimekko has neither made nor is The company will publish the possible
non-restricted equity, which means aware of any shareholder agreements decision on dividend payment separately
 SHARE AND SHAREHOLDERS 23

Largest shareholders according to the book-entry register, 31 December 2020

Number of shares and votes Percentage of holding and votes
1. PowerBank Ventures Ltd (Mika Ihamuotila) 1,017,700 12.52
2. Ilmarinen Mutual Pension Insurance Company 395,419 4.86
3. Varma Mutual Pension Insurance Company 385,920 4.75
4. Ehrnrooth Anna Sophia 340,377 4.19
5. Evli Finnish Small Cap Fund 270,000 3.32
6. Nordea Nordic Small Cap Fund 199,885 2.46
7. Veritas Pension Insurance Company Ltd. 160,117 1.97
8. Sijoitusrahasto Taaleritehdas Mikro Markka 115,185 1.42
9. Oy Talcom Ab 101,000 1.24
10. Oy Etra Invest Ab 100,000 1.23
Total 3,085,603 37.95
Nominee-registered and non-Finnish holders 1,115,322 13.72
Others 3,928,909 48.33
Total 8,129,834 100.00

Marimekko shares owned directly or indirectly by members of the Board of Directors and the Management Group,
31 December 2020

Number of shares and votes Percentage of holding and votes

Mika Ihamuotila 1,017,700 12.52
Elina Björklund 12,382 0.15
Arthur Engel 13,862 0.17
Mikko-Heikki Inkeroinen 4,790 0.06
Helle Priess 2,304 0.03
Catharina Stackelberg-Hammarén 5,057 0.06
Tiina Alahuhta-Kasko 28,830 0.35
Elina Anckar 1,190 0.01
Rebekka Bay 2,304 0.03
Tina Broman 160 0.00
Kari Härkönen 500 0.01
Sanna-Kaisa Niikko 50 0.00
Tanya Strohmayer 724 0.01
Dan Trapp - -
Riika Wikberg 270 0.00
Total 1,090,123 13.41

and, at the same time, confirm the company carry no voting rights and no decreased to 378,740 shares which
pertinent record and payment dates. entitlement to dividends. equaled 4.66 percent of the total number
Monthly updated information on of shares in Marimekko Corporation. Later
Shareholders the largest shareholders can be in August, Moomin Characters Oy Ltd sold
According to the book-entry register, found on the company’s website at its remaining holding in Marimekko.
Marimekko had 18,411 shareholders (11,511) company.marimekko.com under
at the end of the 2020. Of the shares, 13.7 Investors/Share information/ Management’s shareholding
percent (11.6) were owned by nominee- Shareholders. At the end of the financial year, members
registered or non-Finnish holders. of the Board of Directors and the
Marimekko Corporation held 20,000 Flagging announcements Management Group of the company either
of its own shares as at 31 December 2020. Moomin Characters Oy Ltd’s share of directly or indirectly owned 1,090,123
These shares accounted for 0.25 percent Marimekko Corporation’s shares and shares, i.e. 13.41 percent of the number
of the total number of the company’s voting rights fell below the threshold of 5 and voting rights of the company’s shares.
shares. Marimekko shares held by the percent on 17 August 2020 as its holding
24 SHARE AND SHAREHOLDERS

Ownership by size of holding, 31 December 2020

Number of shares Percentage of
Number of shares Number of shareholders % and votes holding and votes
1–100 14,185 77.05 439,980 5.41
101–1 000 3,709 20.15 1,190,700 14.65
1 001–10 000 461 2.50 1,181,486 14.53
10 001–100 000 45 0.24 1,298,277 15.97
100 001–500 000 9 0.05 2,180,935 26.83
500 001– 2 0.01 1,838,456 22.61
Total 18,411 100.00 8,129,834 100.00

Breakdown of ownership by sector, 31 December 2020

Owner Number of shares and votes Percentage of holding and votes
Households 3,278,428 40.33
Financial and insurance corporations 1,041,999 12.82
Non-financial corporations and housing corporations 1,686,975 20.75
Non-profit institutions 64,230 0.79
General government 942,880 11.60
Nominee-registered and non-Finnish holders 1,115,322 13.72
Total 8,129,834 100.00

Breakdown of ownership by sector, 31 December 2020

Non-profit institutions 0.79%

General government 11.60%

Households 40.33%

Financial and insurance corporations 12.82%

Nominee-registered and
non-Finnish holders 13.72%

Non-financial corporations
and housing corporations 20.75%
 SHARE AND SHAREHOLDERS 25

Share price trend

EUR 1,000 shares

50 500

40 400

30 300

20 200

10 100

0 0
2016 2017 2018 2019 2020

Marimekko Corporation
Nasdaq Helsinki PI
Trading volume

Share price trend

(EUR) 2020 2019 2018
Low 21.30 20.80 9.92
High 46.95 39.00 23.50
Average 31.85 29.61 16.04
Closing price (31 Dec.) 45.55 35.80 20.80

Share turnover and market capitalization

2020 2019 2018
Share turnover, no. of shares 3,344,494 2,137,688 1,455,424
Share turnover, % 41.1 26.3 18.0
Market capitalization, EUR¹ 369,402,939 290,332,057 167,847,888

1
Market capitalization at the end of the financial year, excluding the Marimekko shares held by the company.

Share data

Exchange: Nasdaq Helsinki Ltd

Trading code: MEKKO
ISIN code: FI0009007660
List: Nordic List
Sector: Consumer Discretionary
Listing date: I list, 12 March 1999; main list, 27 December 2002
26

Consolidated financial
statements, IFRS

CONSOLIDATED INCOME STATEMENT

(EUR 1,000) Note 1 Jan.–31 Dec. 2020 1 Jan.–31 Dec. 2019

NET SALES 1. 123,568 125,419
Other operating income 2. 341 616
Change in inventories of finished goods and work in progress -361 444
Raw materials and consumables 3. -48,237 -45,391
Employee benefit expenses 4. -25,334 -27,780
Depreciation and impairments 5. -12,556 -12,543
Other operating expenses 6. -18,076 -23,647

OPERATING PROFIT 19,345 17,117

Financial income 7. 592 462
Financial expenses 8. -2,375 -1,429
-1,783 -966

RESULT BEFORE TAXES 17,562 16,151

Income taxes 9. -3,798 -3,133

NET RESULT FOR THE PERIOD 13,765 13,018

Distribution of net result to equity holders of the parent company 13,765 13,018

Basic and diluted earnings per share calculated on the result
attributable to equity holders of the parent company, EUR 10. 1.70 1.61

COMPREHENSIVE CONSOLIDATED INCOME STATEMENT

(EUR 1,000) 1 Jan.–31 Dec. 2020 1 Jan.–31 Dec. 2019

Net result for the period 13,765 13,018
Items that could be reclassified to profit or loss at a future point in time
Change in translation difference 92 -17

COMPREHENSIVE RESULT FOR THE PERIOD 13,857 13,001

Distribution of net result to equity holders of the parent company 13,857 13,001

The notes are an integral part of the financial statements.

 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 27

CONSOLIDATED BALANCE SHEET

(EUR 1,000) Note 31 Dec. 2020 31 Dec. 2019

ASSETS

NON-CURRENT ASSETS
Intangible assets 11.1 1,077 593
Tangible assets 11.2 41,269 40,431
Other financial assets 11.3, 17. 16 16
Deferred tax assets 14. 860 515
43,222 41,555

CURRENT ASSETS
Inventories 12.1 22,436 22,564
Trade and other receivables 12.2 8,126 6,632
Cash and cash equivalents 17. 41,045 26,133
71,607 55,329

ASSETS, TOTAL 114,830 96,884

(EUR 1,000) Note 31 Dec. 2020 31 Dec. 2019

SHAREHOLDERS’ EQUITY AND LIABILITIES

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT COMPANY
Share capital 13. 8,040 8,040
Reserve for invested non-restricted equity 1,228 1,228
Treasury shares -315 -315
Translation differences 26 -66
Retained earnings 43,802 30,037
Shareholders’ equity, total 52,781 38,925

NON-CURRENT LIABILITIES
Lease liabilities 15.1, 20. 26,996 25,950
Other non-current liabilities 4. 1,476 1,644
28,472 27,594

CURRENT LIABILITIES 16.
Trade and other payables 22,160 17,796
Current tax liabilities 534 2,115
Lease liabilities 15.2, 20. 10,158 10,203
Financial liabilities 15.2, 20. 725 251
33,577 30,366

Liabilities, total 62,048 57,960

SHAREHOLDERS’ EQUITY AND LIABILITIES, TOTAL 114,830 96,884

The notes are an integral part of the financial statements.

28 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

CONSOLIDATED CASH FLOW STATEMENT

(EUR 1,000) 1 Jan.–31 Dec. 2020 1 Jan.–31 Dec. 2019

CASH FLOW FROM OPERATING ACTIVITIES

Net result for the period 13,765 13,018
Adjustments
Depreciation and impairments 12,556 12,543
Financial income and expenses  1,783 966
Taxes 3,798 3,133
Cash flow before change in working capital 31,902 29,661

Change in working capital 3,310 2,887
Increase (-) / decrease (+) in current non-interest-bearing trade receivables -1,591 -117
Increase (-) / decrease (+) in inventories 65 -450
Increase (+) / decrease (-) in current non-interest-bearing liabilities 4,836 3,454
Cash flow from operating activities before financial items and taxes 35,212 32,548

Paid interest and payments on other financial expenses -1,463 -1,408
Interest received and payments on other financial income 78 404
Taxes paid -5,740 -2,552

CASH FLOW FROM OPERATING ACTIVITIES 28,087 28,992

CASH FLOW FROM INVESTING ACTIVITIES

Investments in tangible and intangible assets -2,846 -1,569

CASH FLOW FROM INVESTING ACTIVITIES -2,846 -1,569

CASH FLOW FROM FINANCING ACTIVITIES

Short-term loans drawn 6,488 251
Short-term loans repaid -6,000 -
Personnel share issue - 726
Payments of lease liabilities -10,729 -10,437
Dividends paid - -15,003

CASH FLOW FROM FINANCING ACTIVITIES -10,241 -24,463

Change in cash and cash equivalents 14,999 2,960

Cash and cash equivalents at the beginning of the period 26,133 23,174
Effects of exchange rate fluctuations -87 -
Cash and cash equivalents at the end of the period 41,045 26,133

The notes are an integral part of the financial statements.

 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 29

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Equity attributable to equity holders of the parent company

Reserve for
invested Shareholders’
non-restricted Treasury Translation Retained equity
(EUR 1,000) Share capital equity shares differences earnings total

Shareholders’ equity, 1 Jan. 2019 8,040 502 -315 -49 31,827 40,005

Comprehensive result
Net result for the period 13,018 13,018
Translation differences -17 -17
Total comprehensive result for the period -17 13,018 13,001

Transactions with owners
Dividends paid -15,003 -15,003
Personnel share issue 726 726
Share-based transactions, personnel share issue 195 195

Shareholders’ equity, 31 Dec. 2019 8,040 1,228 -315 -66 30,037 38,925

Shareholders’ equity, 1 Jan. 2020 8,040 1,228 -315 -66 30,037 38,925

Comprehensive result
Net result for the period 13,765 13,765
Translation differences 92 92
Total comprehensive result for the period 92 13,765 13,857

Shareholders’ equity, 31. Dec. 2020 8,040 1,228 -315 26 43,802 52,781

The notes are an integral part of the financial statements.

30 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

COMPANY PROFILE down in IAS Regulation (EC) 1606/2002 power to direct the activities of the entity.
of the European Parliament, and the The acquisition method of accounting
Marimekko Corporation is a Finnish interpretations of these standards. is used to eliminate inter-Group
clothing and textile design company. The notes to the consolidated financial shareholding. Subsidiaries are fully
Marimekko Corporation and its statements also comply with Finnish consolidated from the date on which
subsidiaries form a Group that designs, accounting and company legislation which control is transferred to the Group, or
sources, sells and markets clothing, bags complements IFRS regulations. from the date of establishment. They
and accessories, and interior decoration The financial statements have been are deconsolidated from the date that
products. In addition, the company prepared at historical cost. Financial control ceases. Intra-Group business
produces printed fabrics in its own textile statement information is presented in transactions, intra-Group profit margins
printing factory. thousands of euros. related to inventories and fixed assets,
Marimekko Corporation’s shares intra-Group receivables and liabilities and
are quoted on Nasdaq Helsinki Ltd. The Accounting estimates and judgments intra-Group distribution of profit have
company is domiciled in Helsinki, and its The preparation of financial statements been eliminated.
registered address is Puusepänkatu 4, in accordance with IFRS calls for the
00880 Helsinki, Finland. The financial year management to use estimates and Translation of items denominated in
of all Group companies is the calendar assumptions with regard to the future. foreign currency
year. The estimates and assumptions included The results and financial position of Group
Copies of the consolidated in the financial statements are based on units are measured in the currency used
financial statements are available at the best knowledge of the management in the primary business environment of
company.marimekko.com and the head as at the closing of the books. These the unit in question (functional currency).
office of the Group’s parent company at estimates and assumptions affect The consolidated financial statements
Puusepänkatu 4, 00880 Helsinki, Finland. the value of tangible and intangible are presented in euros, the functional
Marimekko Corporation’s Board assets in the balance sheet and the and presentation currency of the parent
of Directors approved these financial income and expenses for the year company.
statements for publication at its meeting in the income statement. Discretion Transactions in foreign currencies
on 18 February 2021. According to the also has to be exercised when the are recognized in the functional currency
Finnish Companies Act, shareholders accounting conventions for the financial at the exchange rate on the date of
have the right to accept or reject the statements are selected and applied, and transaction. The foreign-currency-
financial statements at the AGM held after estimates have to be made, for example, denominated receivables and liabilities
the publication. The AGM may also amend of depreciation periods for and any of the parent company and its Finnish
the financial statements. impairments of tangible and intangible subsidiary have been converted to
assets, exercising lease extension options euro amounts using the exchange
ACCOUNTING POLICY APPLIED IN or not exercising lease termination rates quoted by the European Central
THE CONSOLIDATED FINANCIAL options, valuation of inventories, income Bank on the closing date. The foreign-
STATEMENTS taxes, deferred tax assets and provisions. currency-denominated receivables and
The actual figures may deviate from these liabilities of foreign subsidiaries have
Accounting policy estimates. been converted at the exchange rate of
The financial statements have been the country in question on the closing
prepared in accordance with the Principles of consolidation date. Foreign exchange differences
International Financial Reporting Marimekko’s consolidated financial in business operations are booked in
Standards (IFRS), complying with the statements include the accounts of the the corresponding income statement
IAS and IFRS standards as well as the parent company Marimekko Corporation accounts above operating profit and
SIC and IFRIC interpretations in force and its subsidiaries. foreign exchange differences on financial
as at 31 December 2020. In the Finnish Subsidiaries are all entities over items in financial income and expenses.
Accounting Act and the provisions laid which the Group has control. The Group The foreign-currency-denominated
down pursuant to the Act, International controls an entity where it is exposed to, income statements of subsidiaries are
Financial Reporting Standards refer to or has rights to, variable returns from its converted to euro amounts using the
the standards approved for use in the EU involvement with the entity and has the average exchange rate for the financial
in accordance with the procedures laid ability to affect those returns through its year and the balance sheets at the
 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 31

exchange rate on the closing date. obtains control of the goods according to Otherwise they are recognized in financial
Differences arising from translation and the terms of delivery. items.
translation differences in shareholders’ License revenue is recognized in
equity are recorded as a separate item in accordance with the clauses of the Employee benefits
shareholders’ equity. agreement between Marimekko and the Pension commitments
licensee when the later of the following The pension security of the personnel
Revenue recognition and net sales events occurs: of the Group’s Finnish companies
The Group sells products in Marimekko’s (a) the subsequent sale or usage has been arranged under the Finnish
retail stores and online store, and through occurs, and statutory employee pension plan (TyEL)
wholesale channels in Finland and abroad. (b) the performance obligation to which through an external pension insurance
Most of the Group’s income is comprised some or all of the sales-based or usage- company. Foreign subsidiaries have
of wholesale and retail sales of products based royalty has been allocated has arranged pensions for their personnel
plus royalties. been fully or partially satisfied. in accordance with local legislation.
The goods are handed over to the The clauses in the licensing The Group’s pension cover is arranged
customer one item or several items at agreements provide for royalties payable wholly under defined contribution
a time in the stores or by a carrier. The to Marimekko for sales of products schemes. Under a defined contribution
customer can utilize each sold product covered by the agreement as percentage- arrangement, the Group pays
separately and the utilization of a single based royalties or lump sum payments contributions to publicly or privately
product is not dependent on other based on the fulfillment of performance- managed pension insurances. These
products sold by Marimekko. Revenue based obligations. Some licensees paying contributions are either compulsory,
is recognized when the buyer obtains percentage-based royalties are according based on an agreement or voluntary.
control of the product – that is when the to the agreement obligated to pay at least The Group does not have any payment
significant risks and rewards of ownership an annual minimum royalty. obligations other than these contributions.
have been transferred to the buyer. In The contributions are recognized as
wholesale, this is mainly the moment Other operating income employee benefit expenses at the time
when the goods are handed over to Other operating income includes, for when they become due. Any contributions
the customer as set forth in the agreed example, rental income from lease paid in advance are included in the assets
delivery clause. In wholesale and export agreements classified as other lease on the balance sheet, insofar as they are
trade, the terms of delivery determine the agreements, insurance payouts and sales recoverable as future refunds or future
point of time when the customer obtains proceeds of fixed assets. reductions of contributions.
control of the goods. In retail where
cash or a credit card is used as means of Operating profit Share-based payments
payment, the income is recognized at the IAS 1 Presentation of Financial The long-term bonus system granted to
time of sale. Statements does not contain a definition the Management Group by the Board of
Sales revenues are recognized at the of operating profit. The Group has defined Directors is valued at fair value at each
amount to which Marimekko expects to be this concept as follows: operating profit closing date and the change in fair value is
entitled in exchange for transferring the is the net amount of net sales and other recorded as an employee benefit expense
promised goods to the customer, except operating income less purchase expenses in the income statement to the extent the
for amounts collected on behalf of third adjusted with change in inventories of share-based payments have been vested.
parties, such as indirect taxes. Discounts finished goods and work in progress The bonus system is described in
granted are taken into account when and the expenses incurred due to greater detail in note 4 to the consolidated
determining the revenue to be recognized. production for own use, less employee financial statements.
The fulfillment of performance obligations benefit expenses, depreciation, possible
is verifiable from payment receipts or impairment loss and other operating Government grants
transportation documents. In compliance expenses. Any income statement items Government grants are recognized when
with IFRS 15, customer contributions are other than the above are presented below it is reasonably certain that the conditions
allocated to distinct goods and recognized the operating profit. Foreign exchange relating to them will be met and the
as revenue by the Group when the goods differences are included in the operating grants will be received. Investment aid is
are handed over to the customer in the profit, provided they are attributable to recognized as a reduction to investments
store or when a wholesale customer items related to business operations. and the aid recorded in the income
32 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

statement is booked as a reduction to Earnings per share • buildings and structures 3–30 years
costs. The basic earnings per share are • machinery and equipment 3–15 years.
The Group has recognized the public calculated by dividing the result for the The residual value and useful life of
grants received in 2020 due to the period attributable to equity holders of tangible assets are reviewed at the end
coronavirus pandemic to reduce fixed the parent company by the weighted of each financial year and if necessary
costs. The grants are not subject to unmet average of shares outstanding. The adjusted to reflect changes in the
conditions or other uncertainties. weighted average number of shares expectation of economic benefit.
used to calculate the diluted earnings If a tangible asset consists of several
Interest income per share takes into account the diluting parts with different useful lives, each part
Interest income is recognized on a time- effect of the conversion of potential is treated as a separate asset. Significant
proportion basis using the effective common shares into actual shares during cost of replacing a part is capitalized
interest method. the period. There are no potential shares when the company will derive economic
outstanding at the moment. benefit from the asset. Other expenses
Dividend income such as regular maintenance, repair and
Dividend income is recognized as income Intangible assets servicing costs are entered as expenses
when the right to dividends is established. Intangible assets with finite useful in the income statement when they are
lives are recognized in the balance incurred.
Income taxes sheet at original cost less depreciation.
Taxes on the Group companies’ financial Depreciation of intangible assets is Borrowing costs
results for the period, taxes from previous carried out on a straight-line basis over Borrowing costs are recognized as
periods and the change in deferred their estimated useful life. expenses during the financial year in
taxes are recorded as the Group’s taxes. The estimated useful lives are as which they were incurred. Borrowing
Taxes on the taxable income for the follows: costs have not been recognized as part of
period are calculated on taxable income • intangible rights 5 years the acquisition cost of assets.
in accordance with the tax rate in force • computer software 3–5 years.
in the country in question. Deferred The major intangible assets are Provisions and contingent liabilities
taxes are calculated on all temporary computer software. In addition, intangible A provision is recognized when the
differences between the book value and rights include trademarks. The Group Group has a present legal or constructive
the taxable value. However, a deferred has not had any such development obligation as a result of a past event, and
tax liability is not accounted for if it expenditure that should be recognized it is probable that an outflow of resources
arises from the initial recognition of an as assets under IAS 38 and recorded as will be required to settle the obligation
asset or liability in a transaction, other amortized expense over their useful life. and a reliable estimate of the amount of
than a business combination, that at the the obligation can be made.
time of the transaction affects neither Tangible assets A restructuring provision is recognized
accounting nor taxable income. Deferred Tangible assets consist of leased fixed when the Group has compiled a
tax is not recognized for non-tax- assets and owned fixed assets which detailed restructuring plan, launched its
deductible goodwill and deferred tax is mainly comprise buildings, machinery implementation or informed the parties
not recognized for distributable earnings and equipment. Tangible assets also concerned.
of subsidiaries where it is probable that include expenditures on conversions A contingent liability is a potential
the difference will not reverse in the and renovations of leased premises liability based on previous events. It
foreseeable future. Deferred taxes are comprising, for example, completion depends on the realization of an uncertain
calculated using the tax rates set by the work on business interiors in rented future event beyond the Group’s control.
closing date. Deferred tax assets are premises. Tangible assets are recorded Contingent liabilities also include
recognized to the extent that it is probable in the balance sheet at original cost less obligations which will most likely not lead
that future taxable profit, against which depreciation. Depreciation of tangible to a payment or the amount of which
the temporary difference can be utilized, assets is carried out on a straight-line cannot be reliably determined. Contingent
will be available. basis over their estimated useful life. liabilities are disclosed in the notes.
The estimated useful lives are as
follows:
 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 33

Impairment reasonably certain that the option will be Net realizable value is the estimated
On each closing date, asset items are exercised. selling price in the ordinary course of
assessed for indications of impairment. If The lease term for renewable leases business, less the estimated costs for
there are such indications, the recoverable is determined based on non-cancelable completion and selling expenses.
amount of said asset item is estimated. lease term of the contract. Further
The impairment recognized is the amount periods are included in the lease term Financial assets
by which the book value of the asset item to the extent that the management Financial assets are classified based on
exceeds its recoverable amount, which is considers that it is reasonably certain the Group’s financial asset management
the higher of its net selling price or value that the option to terminate the contract business model and their contractual cash
in use. Value in use is based on discounted is not exercised. flow characteristics into the following
future net cash flows as a rule. The Group has elected not to categories: measured at amortized cost
recognize right-of-use assets and and measured at fair value through profit
Lease agreements lease liabilities for short-term leases or loss.
In accordance with IFRS 16, the Group and leases of low-value assets. The Financial assets measured at
assesses at the inception of a contract Group recognizes the lease payments amortized cost consist of trade
whether the contract is, or contains, a associated with these leases as an receivables, other receivables and cash
lease. A contract is, or contains, a lease if expense on a straight-line basis over the and cash equivalents. They are initially
the contract conveys the right to control lease term. recognized at fair value and subsequently
the use of an identified asset for a period Marimekko is a lessee. Lease at amortized cost using the effective
of time in exchange for consideration. The contracts include headquarter and interest method.
Group has elected to separate non-lease printing facilities in Helsinki, retail stores For the estimation of expected credit
components from lease components at in Finland and other countries where losses on trade receivables, the so-called
the inception of a contract. Marimekko operates as well as company simplified approach permitted by IFRS 9 is
The Group recognizes a right-of-use housing and leasing cars. In general, used, according to which credit losses are
asset and a lease liability at the lease lease contracts vary from 1 year to 15 recorded at an amount equal to lifetime
commencement date. The right-of-use years. expected credit losses. Expected credit
asset is initially measured at cost, which Marimekko has applied an losses are estimated based on historical
comprises the initial amount of the lease amendment to IFRS 16 regarding the credit losses, and the model also takes
liability adjusted for any lease payments treatment of rent concessions. The into account the information available
made before the commencement date, amendment was issued on 28 May on future financial conditions at the time
incentives received, initial direct costs 2020 and approved for use in the of review. Expected credit losses are
incurred and an estimate of costs to EU on 12 October 2020. The Group recognized in other operating expenses in
restore the underlying asset. The right- has applied the practical expedient the income statement.
of-use asset is depreciated over the lease stipulated by the amendment to not A final impairment of trade receivables
term. treat rent concessions granted due to is recognized when there is objective
The lease liability is initially measured the coronavirus pandemic as changes in evidence that the Group will not receive
at the present value of the lease payments leases under IFRS 16. Leases that only all of the benefits on the original terms.
that are not paid at the commencement involved a rent exemption were treated Indications of the impairment of trade
date, discounted using the interest rate as negative variable rents in the income receivables include significant financial
implicit in the lease or, if that rate cannot statement. difficulties of the debtor, the likelihood
be readily determined, the Group’s of bankruptcy, failure to make payments,
incremental borrowing rate. The lease Inventories or a delay of over 90 days in paying.
liability is measured at amortized cost Inventories are presented at the Impairment loss is recognized under
using the effective interest method. Lease acquisition cost or at the lower probable other operating expenses in the income
payments included in the measurement net realization value. The acquisition statement.
of the lease liability comprise the cost of manufactured inventories Financial assets measured at fair value
following: fixed payments and variable includes not only purchase expenditure through profit or loss comprise shares and
lease payments that depend on an index on materials, direct labor and other they are included in noncurrent assets,
or a rate. An option to extend the lease direct costs, but also a share of the fixed unless it is intended that they will be held
term is included in the lease term if it is and variable general costs of production. for less than 12 months from the closing
34 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

date, in which case they are included in New standards and interpretations
current assets. The other financial assets These consolidated financial statements
comprise unlisted shares. have been prepared using the same
accounting principles as were applied
Cash and cash equivalents in the 2019 financial statements except
The Group’s cash and cash equivalents for an amendment to IFRS 16 regarding
include cash on hand and at banks. The the treatment of rent concessions. The
Group does not have any other items amendment was issued on 28 May 2020
classified as cash and cash equivalents. and approved for use in the EU on 12
October 2020. The Group has applied
Dividends, shareholders’ equity and the practical expedient stipulated by the
treasury shares amendment to not treat rent concessions
The Board of Directors’ proposal for granted due to the coronavirus pandemic
dividend distribution has not been as changes in leases under IFRS
recognized in the financial statements; 16. Leases that only involved a rent
dividends are only recognized on the basis exemption were treated as negative
of the AGM's approval. variable rents in the income statement.
Outstanding common shares are Other new standards, interpretations
presented as share capital. Costs related or amendments to existing standards
to the granting or acquisition of the have had no significant impact on the
company’s own equity instruments are consolidated financial statements.
presented as equity allowance. If the
company purchases its own shares, the Adoption of new and amended standards
price including direct costs is recognized in future financial years
as decrease in equity. The new and amended standards to
be applied in future financial years
Financial liabilities do not, according to the company's
Financial liabilities are initially recognized estimate, have a significant impact on
at fair value including transaction costs the company's consolidated financial
and subsequently at amortized cost using statements.
the effective interest method. Financial
liabilities are non-current, unless they
are repayable on demand or the Group
intends to repay them within the next 12
months.

Personnel share issue

The personnel share issue arranged
in 2019 has been accounted for in
accordance with IFRS 2. The subscription
price paid by the subscribers, totaling
EUR 726 thousand, has been recorded in
the reserve for invested non-restricted
equity, and the discount granted by the
company to the subscribers has been
recorded as expense and in retained
earnings. The amount recorded in
employee benefit expenses and in
retained earnings is EUR 195 thousand.
 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 35

1. SEGMENT INFORMATION AND DISTRIBUTION OF SALES

The Group’s business segment is the Marimekko business. The segment information presented by the Group is based on internal
reporting to the chief operational decision-maker. The President and CEO of the company acts as the chief operational decision-maker.

The total amount of assets in Finland was EUR 100,224 thousand (77,743), of which the amount of non-current assets excluding financial
instruments and deferred tax assets was EUR 35,706 thousand (30,988). The amount of assets in other countries was EUR 14,605
thousand (19,141), of which non-current assets accounted for EUR 6,656 thousand (10,052).

Marimekko has no individual customers representing 10 percent or more of the Group’s total income.

Net sales by market area

(EUR 1,000) 2020 2019
Finland
Retail sales 45,928 51,918
Wholesale sales 25,058 19,012
Licencing income 158 233
Total 71,145 71,163

Scandinavia 
Retail sales 4,311 5,434
Wholesale sales 5,572 3,862
Licencing income - -
Total 9,883 9,297

EMEA
Retail sales 2,160 1,568
Wholesale sales 11,400 9,980
Licencing income 401 443
Total 13,961 11,992

North America 
Retail sales 3,952 5,798
Wholesale sales 2,268 1,987
Licencing income 247 472
Total 6,466 8,257

Asia-Pacific 
Retail sales 3,609 4,378
Wholesale sales 16,495 18,733
Licencing income 2,010 1,600
Total 22,114 24,712

International sales in total
Retail sales 14,032 17,178
Wholesale sales 35,734 34,562
Licencing income 2,658 2,516
Total 52,424 54,256


Retail sales 59,960 69,096
Wholesale sales 60,792 53,574
Licencing income 2,816 2,748
Total 123,568 125,419
36 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

Net sales by product line

(EUR 1,000) 2020 2019
Fashion 39,740 46,746
Home 56,262 47,941
Bags and accessories 27,566 30,732
Total 123,568 125,419

Investments (excluding the impact of IFRS 16)

(EUR 1,000) 2020 2019
Finland 2,143 2,516
Other countries - 78
Total 2,143 2,594

2. OTHER OPERATING INCOME

(EUR 1,000) 2020 2019
Rental income 54 140
Other income 287 475
Total 341 616

3. RAW MATERIALS AND CONSUMABLES

(EUR 1,000) 2020 2019
Materials and supplies
Purchases during the financial year 29,279 28,532
Increase (-) / decrease (+) in inventories -296 -5
Total 28,983 28,526

External services 19,254 16,865
Total 48,237 45,391

Exchange rate differences included in raw materials and consumables

Exchange rate gains (-) / losses (+) on purchases -42 149

4. EMPLOYEE BENEFIT EXPENSES

(EUR 1,000) 2020 2019
Salaries, wages and bonuses 19,429 21,186
Share-based payments 1,487 1,229
Pension expenses – defined contribution plans 2,445 2,916
Other indirect social expenditure 1,973 2,449
Total 25,334 27,780

Wages and salaries include EUR 1,023 thousand in public grants received due to the coronavirus pandemic.

Average number of employees
2020 2019
Salaried employees 412 419
Production personnel 22 23
Total 434 442
 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 37

Share-based payments

During the financial year, the Marimekko Group had a long-term bonus system targeted at the Management Group.

On 14 February 2018, the Board of Directors of Marimekko Corporation agreed on establishing a long-term bonus system. The system is
composed of two earnings periods, which are 1 April 2018–30 September 2021 and 1 April 2018–31 January 2022. The possible bonus for
each earnings period is based on the total yield on Marimekko Corporation’s shares, including dividends. The bonus is planned to be paid
half in company shares and half in cash. The shares received as part of the bonus are subject to a two-year transfer restriction. Earning
the bonus requires that the person is still working for the company at the time of the payment. The annual maximum value of the bonus
paid to a member of the Management Group under the bonus system equals the approximate value of annual gross salary. The system
encompasses nine Management Group members, including the President and CEO. The company has the option of paying the bonus
entirely in cash by a decision of the Board of Directors.

The fair value of granted share-based payments has been determined using the binary cash-or-nothing call option valuation model. The
significant measurement parameters in the model are an initial share value of EUR 14.21, i.e. EUR 12.92, which is the weighted average
share price between 1 and 31 March 2018, plus 10 percent, and a volatility of 27 percent. The grant date of the share-based payments
is the date of the Board resolution. The fair value of the payments at the end of the grant month was EUR 1.76/option, so the total fair
value of the plan amounted to EUR 813 thousand. Granted share-based payments are subsequently valued at fair value at each closing
date and the change in fair value is recorded in the income statement to the extent the payments are vested. The bonus payable for an
earnings period is an amount equivalent to 1.5 months’ gross salary for each one (1) euro, with which the closing share price (inclusive of
dividends) exceeds the initial share value of EUR 14.21. Gross salary is defined for the purposes of the plan as the fixed monthly salary,
inclusive of fringe benefits, paid at the beginning of the earnings period. At the end of 2020, the fair value of the share-based payments
vested and booked as non-current liabilities was EUR 1,476 thousand (1,644). EUR 1,656 thousand (0), representing the first earnings
period, were booked as current liabilities.

The EUR 1,487 thousand (1,229) increase in fair value, calculated as described above, was booked in employee benefit expenses in the
2020 consolidated income statement.

5. DEPRECIATION AND IMPAIRMENTS

(EUR 1,000) 2020 2019
Intangible assets
Intangible rights 44 61
Computer software 367 468
Total 411 529

Tangible assets
Buildings and structures 549 646
Machinery and equipment 658 545
Right-of-use assets, buildings and structures 10,804 10,702
Right-of-use assets, machinery and equipment 134 122
Total 12,145 12,015

Total 12,556 12,543

6. OTHER OPERATING EXPENSES

(EUR 1,000) 2020 2019

Leases -517 1,539
Marketing 5,274 7,379
Management and maintenance of business premises 1,391 1,342
Administration 6,440 7,092
Other expenses 5,488 6,295
Total 18,076 23,647

Exchange rate differences included in other operating expenses

Exchange rate gains (-) / losses (+) on sales -221 2

38 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

Rents

(EUR 1,000) 2020 2019
Low-value rents 499 596
Short-term rents - 390
Variable rents¹ -1,016 553
Total -517 1,539

¹ The Group has applied the practical expedient stipulated by an amendment to IFRS 16 to not treat rent concessions granted due to the
coronavirus pandemic as changes in leases under IFRS 16. Hence, variable rents include EUR 1,284 thousand in rent relief recognized
directly in the income statement in accordance with the amendment to IFRS 16. Variable rents also include EUR 261 thousand in public
grants received in 2020 due to the coronavirus pandemic.

Government grants

The Group has recognized the public grants received in 2020 due to the coronavirus pandemic to reduce fixed costs.

(EUR 1,000) 2020 2019
Salaries, wages and bonuses 1,023 -
Rents 261 -
Other operating expenses 108 -
Total 1,392 -

Auditor’s fee

(EUR 1,000) 2020 2019
KPMG
Audit 97 94
Other services 29 56
Total 126 150

Others
Audit 5 5
Total 5 5

Remuneration to KPMG Oy Ab on other services to Marimekko Group companies: EUR 12 thousand (38).

7. FINANCIAL INCOME

(EUR 1,000) 2020 2019
Interest income on loans and other receivables 14 22
Exchange rate gains, realized 65 29
Exchange rate gains, unrealized 514 410
Total 592 462

8. FINANCIAL EXPENSES

(EUR 1,000) 2020 2019
Interest expenses on financial liabilities measured at amortized cost 230 118
Interest expenses on lease liabilities 773 898
Exchange rate losses, realized 400 112
Exchange rate losses, unrealized 898 293
Other financial expenses 74 8
Total 2,375 1,429
 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 39

9. INCOME TAXES

(EUR 1,000) 2020 2019
Taxes on taxable earnings for the financial year 4,043 3,566
Taxes from previous financial years 116 -33
Deferred taxes -361 -400
Total 3,798 3,133

Reconciliation statement of taxes calculated on the basis of tax expenses in the income statement and the Group’s Finnish tax rate
(20 percent in both 2020 and 2019)

Result before taxes 17,562 16,151

Taxes calculated at the Finnish tax rate 3,512 3,230
Different tax rates of foreign subsidiaries -19 -56
Non-recognized deferred tax assets on taxable losses 232 121
Taxes from previous financial years 116 -36
Non-deductible items -43 -126
Taxes in the income statement 3,798 3,133

10. EARNINGS PER SHARE

2020 2019
Net result for the period, EUR 1,000 13,765 13,018
Weighted average number of shares, 1,000 8,110 8,100
Basic and diluted earnings per share, EUR 1.70 1.61
40 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

11. NON-CURRENT ASSETS

11.1 Intangible assets

2020

Advance
payments and
Intangible Computer acquisitions in
(EUR 1,000) rights software progress Total
Acquisition cost, 1 Jan. 2020 2,410 8,014 29 10,453
Translation differences 2 -150 -148
Increases 48 330 378
Transfers between categories 541 -29 512
Acquisition cost, 31 Dec. 2020 2,460 8,736 11,196
Accumulated depreciation, 1 Jan. 2020 2,350 7,510 9,860
Translation differences -4 -149 -153
Depreciation during the financial year 44 367 411
Accumulated depreciation, 31 Dec. 2020 2,390 7,728 10,118
Book value, 31 Dec. 2020 70 1,007 1,077

Book value, 1 Jan. 2020 60 504 29 593
Book value, 31 Dec. 2020 70 1,007 1,077

2019

Advance
payments and
Intangible Computer acquisitions in
(EUR 1,000) rights software progress Total
Acquisition cost, 1 Jan. 2019 2,403 7,219 9,622
Translation differences 1 -111 -110
Increases 6 148 92 246
Classification adjustment 612 612
Transfers between categories 146 -63 83
Acquisition cost, 31 Dec. 2019 2,410 8,014 29 10,453
Accumulated depreciation, 1 Jan. 2019 2,290 6,990 9,280
Translation differences -1 52 51
Depreciation during the financial year 61 468 529
Accumulated depreciation, 31 Dec. 2019 2,350 7,510 9,860
Book value, 31 Dec. 2019 60 504 29 593

Book value, 1 Jan. 2019 113 229 342
Book value, 31 Dec. 2019 60 504 29 593

 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 41

11.2 Tangible assets

2020

Right-of-use Right-of-use Advance
Machinery assets, assets, payments and
Buildings and and buildings and machinery and acquisitions
(EUR 1,000) Land structures equipment structures equipment in progress Total
Acquisition cost, 1 Jan. 2020 55 5,032 22,049 46,253 345 1,074 74,808
Translation differences -47 -296 -426 -769
Increases 629 79 11,901 56 1,057 13,722
Transfers between categories 1,276 183 -1,971 -512
Acquisition cost, 31 Dec. 2020 55 6,890 22,015 57,727 402 160 87,249
Accumulated depreciation, 1 Jan. 2020 4,265 19,279 10,710 122 34,376
Translation differences -64 -269 -208 -541
Depreciation during the financial year 549 658 10,804 134 12,145
Accumulated depreciation, 31 Dec. 2020 4,750 19,668 21,306 256 45,981
Book value, 31 Dec. 2020 55 2,140 2,347 36,422 145 160 41,269

Book value, 1 Jan. 2020 55 767 2,770 35,543 223 1,074 40,431
Book value, 31 Dec. 2020 55 2,140 2,347 36,422 145 160 41,269

2019

Right-of-use Right-of-use Advance
Machinery assets, assets, payments and
Buildings and and buildings and machinery and acquisitions
(EUR 1,000) Land structures equipment structures equipment in progress Total
Acquisition cost, 1 Jan. 2019 55 5,433 22,259 83 27,830
Adoption of IFRS 16, 1 Jan. 2019 41,569 209 41,778
Translation differences -8 68 146 206
Increases 95 110 4,539 136 2,142 7,022
Decreases -1,332 -1,332
Classification adjustment -612 -612
Transfers between categories 124 944 -1,151 -83
Acquisition cost, 31 Dec. 2019 55 5,032 22,049 46,253 345 1,074 74,808
Accumulated depreciation, 1 Jan. 2019 3,885 19,506 23,392
Translation differences -266 159 8 -99
Accumulated depreciation of decreases -931 -931
Depreciation during the financial year 646 544 10,702 122 12,014
Accumulated depreciation, 31 Dec. 2019 4,265 19,279 10,710 122 34,376
Book value, 31 Dec. 2019 55 767 2,770 35,543 223 1,074 40,431

Book value, 1 Jan. 2019 55 1,548 2,752 83 4,438
Book value, 31 Dec. 2019 55 767 2,770 35,543 223 1,074 40,431

11.3 Other financial assets

(EUR 1,000) 2020 2019
Other financial assets 16 16

Other financial assets comprise unlisted shares, which are presented at cost, i.e. the management’s best estimate of fair value.


42 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

12. CURRENT ASSETS

12.1 Inventories

(EUR 1,000) 2020 2019
Raw materials and consumables 4,741 4,420
Finished products/goods 17,696 18,144
Total 22,436 22,564

Impairment of inventories -777 -526

12.2 Trade and other receivables

(EUR 1,000) 2020 2019
Trade receivables 6,661 5,402
Prepayments for inventory purchases 16 -
Other receivables 545 504
Prepaid expenses and accrued income 904 726
Total 8,126 6,632

Prepaid expenses and accrued income
Royalty receivables 237 227
Employee benefits 20 25
Other prepaid expenses and accrued income 646 474
Total 904 726

Analysis of trade receivables by age

(EUR 1,000) 2020 2019
Trade receivables not past due 4,932 3,909
Past due
less than 30 days 1,007 1,109
30–60 days 261 284
more than 60 days 461 100
Total 6,661 5,402

The amount of credit loss provisions recognized on trade receivables, EUR 0.6 million, reduces receivables in the balance sheet. The
expected credit loss risk is not material due to the Group's effective credit management policy, where the credit history of wholesale
customers is monitored regularly and prepayments, guarantees and letters of credit are used when needed.
 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 43

13. SHAREHOLDERS' EQUITY

Reserve
for invested
non-restricted Number of Treasury
Number of Share capital, equity, treasury shares, Total,
shares EUR EUR shares EUR EUR

1 Jan. 2019 8,069,610 8,040,000 501,969 20,000 -314,720 8,227,249
Personnel share issue 40,224 725,988 725,988
31 Dec. 2019 8,109,834 8,040,000 1,227,957 20,000 -314,720 8,953,237

1 Jan. 2020 8,109,834 8,040,000 1,227,957 20,000 -314,720 8,953,237
31 Dec. 2020 8,109,834 8,040,000 1,227,957 20,000 -314,720 8,953,237

Marimekko Corporation's Articles of Association do not specify maximum share capital. Marimekko Corporation has one series of shares;
the shares do not have a nominal value. All shares in issue have been paid in full. As at 31 December 2020, Marimekko Corporation held
20,000 treasury shares. The Group does not have any share option schemes.

Board proposal of 18 February 2021: Marimekko's Board of Directors proposes that the AGM on 14 April 2021 authorize the Board to
decide on the payment of a maximum dividend of EUR 1.00 per share in one or several instalments at a later stage. The authorization
would be valid until the next AGM.

The AGM held on 8 April 2020 authorized the Board of Directors to decide on the payment of a maximum dividend of EUR 0.90 per
share in one or several instalments at a later stage. No dividends were paid in 2020. After the end of the financial year, the Board made
use of the authorization and decided that a dividend of EUR 0.90 per share be paid for 2019 in one instalment.

The reserve for invested non-restricted equity contains other equity-like investments and the share subscription price to the extent that
this is not entered in share capital under a specific decision.

14. DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets and liabilities are offset against each other where the Group has a legally enforceable right to offset deferred tax
assets and liabilities based on taxable earnings for the period against each other and where they relate to income taxes levied by the
same taxation authority on the same taxpayer or different taxpayers and the intention is to settle on a net basis. The amounts offset
against each other are as follows:

Changes in deferred taxes in 2020

Recognized in the
(EUR 1,000) 1 Jan. 2020 income statement 31 Dec. 2020
Deferred tax assets
Internal margin of inventories 433 -32 401
Employee benefits 328 297 626
Lease liabilities 82 63 145
Other 9 -9 -
Total 853 319 1,172


Deferred tax liabilities
Accumulated depreciation difference -204 29 -175
Fixed costs included in inventories -134 -3 -138
Total -338 26 -312

Deferred tax asset, net 515 860

44 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

Changes in deferred taxes in 2019

Recognized in the
(EUR 1,000) 1 Jan. 2019 income statement 31 Dec. 2019
Deferred tax assets
Internal margin of inventories 369 64 433
Employee benefits 82 246 328
Lease liabilities 0 82 82
Other 9 - 9
Total 461 392 853


Deferred tax liabilities
Accumulated depreciation difference -214 10 -204
Fixed costs included in inventories -133 -1 -134
Total -347 9 -338

Deferred tax asset, net 114 515

Deferred tax assets are recognized for tax losses carried forward to the extent that the realization of the related tax benefit through
future taxable profits is probable. Deferred tax assets amounting to EUR 176 thousand (63) have not been recognized.

15. INTEREST-BEARING LIABILITIES

15.1 Non-current liabilities

(EUR 1,000) 2020 2019
Lease liabilities 26,996 25,950
Total 26,996 25,950

15.2 Current liabilities

(EUR 1,000) 2020 2019
Lease liabilities 10,158 10,203
Financial liabilities 725 251
Total 10,883 10,454

The interest rate varied between 1.5 and 4.5 percent (1.5–4.4).

16. OTHER CURRENT LIABILITIES

(EUR 1,000) 2020 2019
Trade payables and other current liabilities
Trade payables 8,398 7,835
Other payables 3,560 2,250
Accrued liabilities and deferred income 8,563 6,656
Advances received 1,639 1,055
Total 22,160 17,796

Accrued liabilities and deferred income
Employee benefits 5,738 4,321
Other accrued liabilities and deferred income 2,825 2,335
Total 8,563 6,656

 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 45

17. FINANCIAL ASSETS AND LIABILITIES

Financial assets measured at fair value through profit or loss

(EUR 1,000) 2020 2019
Other financial assets 16 16

Financial assets measured at fair value through profit or loss comprise unlisted shares. Their carrying amount equals their fair value.

Financial assets measured at amortized cost

Trade receivables 6,661 5,402
Other receivables 1,465 1,230
Cash and cash equivalents 41,045 26,133

Financial liabilities measured at amortized cost

Trade payables 8,398 7,835

Credit facilities drawn down 725 251
Other liabilities 13,762 9,961

The fair value of financial assets and financial liabilities measured at amortized cost equals their book value.

18. GUARANTEES, CONTINGENT LIABILITIES AND OTHER COMMITMENTS

(EUR 1,000) 2020 2019

Other own liabilities and commitments
Lease liabilities for machinery and equipment 662 617

Lease liabilities relate to low-value and short-term leases not recorded in the balance sheet.

19. RELATED PARTY TRANSACTIONS

The Group's related parties include the members of the Board of Directors and the Management Group as well as their controlled
entities, the Group's parent company and its subsidiaries.

The relationships of the Group's parent company and subsidiaries are as follows:

Parent company
Marimekko Corporation, Helsinki, Finland¹

Subsidiaries

Company and domicile Group's holding, % Share of voting rights, %
Marimekko Services Oy, Helsinki, Finland 100 100
Marimekko AB, Stockholm, Sweden² 100 100
Marimekko Australia PTY Ltd, Victoria, Australia 100 100
Marimekko GmbH, Frankfurt am Main, Germany 100 100
Marimekko North America LLC, Delaware, United States 100 100
Marimekko North America Retail LLC, Delaware, United States 100 100
Marimekko North America Holding Co, Delaware, United States 100 100
Marimekko Trading (Shanghai) Co., Ltd, Shanghai, China 100 100
Marimekko UK Ltd, London, United Kingdom 100 100

¹ Marimekko Corporation has branches in France and Belgium.
² Marimekko AB has branches in Norway and Denmark.
46 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

The following transactions were carried out with related parties:

Management's employee benefits

Remuneration of the President and CEO and other members of the Management Group

(EUR 1,000) 2020 2019
Mika Ihamuotila, Chairman of the Board 53 70
Tiina Alahuhta-Kasko, President and CEO 443 413
Other members of the Management Group 1,311 1,001
Total 1,807 1,484

In the personnel share issue arranged in spring 2019, the President and CEO subscribed for 21,865 shares and the other members of the
Management Group a total of 1,000 shares.

Remuneration to the Board of Directors

(EUR 1,000) 2020 2019

Rebekka Bay¹ 10 32
Elina Björklund 47 41
Arthur Engel² 26 32
Mika Ihamuotila 48 48
Mikko-Heikki Inkeroinen 32 29
Helle Priess³ 26 106
Catharina Stackelberg-Hammarén 32 29
Total 221 317

Management's employee benefits, total 2,028 1,801

¹ Member of the Management Group starting 1 September 2020. Board remuneration EUR 10 thousand (26) and payments for consulting
services EUR 0 thousand (6).
² Board remuneration EUR 26 thousand (26) and payments for consulting services EUR 0 thousand (6).
³ Board remuneration EUR 26 thousand (26) and payments for consulting services EUR 0 thousand (80).

The pension benefits include only statutory pension payments. The management does not have additional pension benefits.

Related parties are among beneficiaries of a share-based bonus system. The management's long-term bonus system is presented in
greater detail under note 4 to the financial statements.
 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 47

20. FINANCIAL RISK MANAGEMENT

During the normal course of its business operations, the Marimekko Group is exposed to financial risks. The principal financial risks are
liquidity risk, credit risk, foreign currency risk and interest rate risk.

The company's Board of Directors has confirmed the principles, responsibilities and organization of risk management for the Group. The
Board of Directors also monitors the success of risk management. According to its risk management principles, Marimekko classifies its
risks as strategic, operational, economic and accident risks. Economic risks include financial risks. Responsibility for the implementation
of risk management measures concerning financial risks lies with the Group's CFO. The main objective of financial risk management is
to ensure reasonably-priced financing in all circumstances, and thereby minimize the unfavorable effects, if any, on the Group's financial
performance. Marimekko has not used derivative instruments when hedging against risks.

Liquidity risk

The Group continuously seeks to assess and monitor the amount of funding required for business operations to ensure that sufficient
liquid funds are available for daily business and repayment of maturing debts. The assessment is based on monthly cash flow and
liquidity forecasts. The Group aims to maintain a high liquidity level at all times in order to eliminate liquidity risk. In order to minimize
liquidity risk, the Group's near-term and next few years' financing needs can be covered by liquid funds as well as committed long-term
or short-term credit facilities or credit facilities valid until further notice. At the end of the financial year, the Group had access to credit
facilities totaling EUR 17,146 thousand (14,155). The amount of credit facilities drawn down at the end of the year was EUR 725 thousand
(251). The company has also secured a long-term revolving credit facility of EUR 5 million, which includes covenants (net debt / EBITDA,
and equity ratio). The covenant conditions were met during the financial year.

Maturity analysis for the Group’s financial liabilities; the figures are not discounted, and they include both interest payments and capital
repayments:

31 Dec. 2020

(EUR 1,000) Less than 1 year 1–2 years 3–5 years Over 5 years
Lease liabilities 10,158 7,319 8,656 11,021
Credit facilities drawn down 725 - - -
Trade and other payables 22,160 - - -
Total 33,043 7,319 8,656 11,021

31 Dec. 2019

(EUR 1,000) Less than 1 year 1–2 years 3–5 years Over 5 years
Lease liabilities 10,203 7,757 8,820 9,373
Credit facilities drawn down 251 - - -
Trade and other payables 17,796 - - -
Total 28,250 7,757 8,820 9,373

Credit risk

The trade receivables generated in the Group’s wholesale operations are associated with a credit risk, which is reduced by the Group’s
broad and geographically diverse clientele. Marimekko continuously monitors the credit limits, credit history and financial situation of
its customers. The Group has a centralized process in place for this purpose. Responsibility for the credit monitoring process lies with
the Group’s CFO. The credit risk related to the wholesale business is also reduced by means of advance payments, bank guarantees and
letters of credit.

Retail customers pay for their purchases using cash or the most common debit/credit cards.

Note 12.2 (Trade and other receivables) to the consolidated financial statements includes an analysis of trade receivables by age.

Foreign currency risk

The Group’s currency risk consists of sales and purchases made in foreign currency as well as balance sheet items and foreign-currency-
denominated net investments in units abroad.

48 CONSOLIDATED FINANCIAL STATEMENTS, IFRS

Transaction risk

The Group’s transaction risk derives from currency flows connected with wholesale and retail sales as well as purchases and operating
expenses of the Group’s business units, and from loans and receivables denominated in foreign currency. The Group’s principal sales
currency is the euro. The other significant sales and invoicing currencies are the US dollar, Swedish krona, Danish krone, Norwegian
krone, Australian dollar and Canadian dollar. The principal currencies used for purchases are the euro and, to a lesser extent, the US
dollar. In 2020, foreign-currency-denominated sales accounted for approximately 17 percent (19) of the Group’s total sales and foreign-
currency-denominated purchases made up about 17 percent (19) of the Group’s purchases.

Marimekko protects itself against the transaction risk of sales by taking account of the estimated exchange rate changes at the time of
sale when carrying out wholesale and retail pricing of products. Foreign subsidiaries are financed primarily in local currency, so they do
not incur significant transaction risk.

The Group’s transaction exposure

Foreign-currency-denominated assets and liabilities (cash and cash equivalents, trade receivables and trade payables) converted to
euro amounts using the exchange rates quoted on the closing date

(EUR 1,000) 2020 2019

USD SEK AUD USD SEK AUD
Current assets 1,323 2,180 905 988 2,796 2,280
Current liabilities -535 -543 -552 -586 -509 -191
Foreign currency exposure in the balance sheet 787 1,637 354 402 2,287 2,089

Sensitivity analysis, effect on net result for the period

The strengthening or weakening of the euro against the US dollar, the Swedish krona or the Australian dollar would, given that all other
factors remain unchanged, impact the Group’s net result for the period as follows. The impact portrays the Group’s transaction risk.

2020 2019
USD SEK AUD USD SEK AUD
Strengthening of the euro by 10 percent
Effect on net result for the period, EUR 1,000 354 -380 -159 319 -244 -123

Translation risk

The Marimekko Group incurs translation risk when the financial statements of foreign subsidiaries are translated into euro amounts in
the consolidated financial statements. For foreign-currency-denominated net investments, the effects of changes in foreign exchange
rates appear as translation differences in the Group’s equity. Marimekko has so far not hedged against translation risk for equity, as the
subsidiary sales and net investments are small from the Group’s perspective.

Interest rate risk

The Group’s interest rate risk primarily results from changes in interest rates on cash and cash equivalents and on current and non-
current interest-bearing liabilities due to changes in market rates. Changes in the interest rates of these assets and liabilities have an
impact on the Group’s profit.

(EUR 1,000) 2020 2019

Cash and cash equivalents 41,045 26,133
Lease liabilities 37,155 36,153
Credit facilities drawn down 725 251
 CONSOLIDATED FINANCIAL STATEMENTS, IFRS 49

21. CAPITAL MANAGEMENT

The purpose of capital management is to maintain a capital structure that optimally supports the Group’s strategic objectives. Efficient
capital management measures ensure normal operating conditions for the business and increase the shareholder value in the long term.
The principal factors affecting the capital structure are profitability, dividend distribution and investments. The capital managed equals
the shareholders’ equity shown on the consolidated balance sheet. No external capital requirements are applied to the Group.

The Group continuously monitors its capital structure. The Group’s strategic objective is to keep the ratio of net debt to EBITDA at or
below 2 (one of the company’s long-term financial goals). At the end of 2020, the ratio of net debt to EBITDA was -0.10 (0.35), i.e. well
below the long-term goal level.

Net debt / EBITDA

(EUR 1,000) 2020 2019
Interest-bearing liabilities
Non-current lease liabilities 26,996 25,950
Current lease liabilities 10,158 10,203
Other current interest-bearing liabilities 725 251
Total 37,879 36,404

Cash and cash equivalents 41,045 26,133

Net debt -3,166 10,271

EBITDA 31,902 29,661

Net debt / EBITDA -0.10 0.35

22. EVENTS AFTER THE CLOSING DATE

After the end of the financial year, the Board of Directors made use of the authorization granted to it by the AGM on 8 April 2020 and
decided that a dividend of EUR 0.90 per share be paid for 2019 in one instalment. The management of the company is not aware of any
other significant events after the closing date.
50

Parent company financial

statements, FAS

PARENT COMPANY INCOME STATEMENT

(EUR 1,000) Note 1 Jan.–31 Dec. 2020 1 Jan.–31 Dec. 2019

NET SALES 1. 119,017 118,708
Other operating income 2. 288 604
Change in inventories of finished goods and work in progress -140 117
Materials and services 3. -47,587 -45,041
Personnel expenses 4. -18,589 -19,577
Depreciation and impairments 5. -1,416 -1,481
Other operating expenses 6. -30,926 -35,134

OPERATING PROFIT 20,647 18,196

Financial income and expenses 7. -731 113

RESULT BEFORE APPROPRIATIONS AND TAXES 19,916 18,309

Appropriations 8. 147 51
Income taxes 9. -4,129 -3,529

NET RESULT FOR THE PERIOD 15,935 14,831
 PARENT COMPANY FINANCIAL STATEMENTS, FAS 51

PARENT COMPANY BALANCE SHEET

(EUR 1,000) 31 Dec. 2020 31 Dec. 2019

Note

ASSETS

FIXED ASSETS 10.
Intangible assets 10.1 3,133 2,139
Tangible assets 10.2 2,290 2,557
Investments 10.3
Participations in Group companies 1,906 1,906
Other shares and participations 16 1,922 16 1,922

FIXED ASSETS, TOTAL 7,345 6,618

CURRENT ASSETS
Inventories 11. 19,750 19,633
Current receivables 12. 17,019 16,142
Cash on hand and at banks 38,513 23,511

CURRENT ASSETS, TOTAL 75,282 59,286

ASSETS, TOTAL 82,627 65,904


(EUR 1,000) 31 Dec. 2020 31 Dec. 2019

SHAREHOLDERS’ EQUITY AND LIABILITIES

SHAREHOLDERS’ EQUITY 13.
Share capital 8,040 8,040
Reserve for invested non-restricted equity 1,228 1,228
Treasury shares -315 -315
Retained earnings 29,600 14,769
Net result for the period 15,935 14,831

SHAREHOLDERS’ EQUITY, TOTAL 54,488 38,553

ACCUMULATED APPROPRIATIONS 14. 874 1,021

LIABILITIES 15.
Current liabilities 27,265 26,329

LIABILITIES, TOTAL 27,265 26,329

SHAREHOLDERS’ EQUITY AND LIABILITIES, TOTAL 82,627 65,904
52 PARENT COMPANY FINANCIAL STATEMENTS, FAS

PARENT COMPANY CASH FLOW STATEMENT

(EUR 1,000) 1 Jan.–31 Dec. 2020 1 Jan.–31 Dec. 2019

CASH FLOW FROM OPERATIONS

Net result for the period 15,935 14,831
Adjustments
Depreciation and impairments 1,416 1,481
Change in depreciation difference -147 -51
Financial income and expenses 731 -113
Taxes 4,129 3,529
Cash flow before change in working capital 22,064 19,677

Change in working capital
Increase (-) / decrease (+) in current non-interest-bearing trade receivables -1,483 -351
Increase (-) / decrease (+) in inventories -133 611
Increase (+) / decrease (-) in current non-interest-bearing liabilities 3,438 1,221
Cash flow from operations before financial items and taxes 23,886 21,157

Paid interest and payments on other financial expenses -530 -495
Interest received and payments on other financial income 191 529
Taxes paid -5,763 -2,385

CASH FLOW FROM OPERATIONS 17,784 18,807

CASH FLOW FROM INVESTMENTS

Investments in tangible and intangible assets -2,846 -1,478
Purchase of subsidiary shares - -200
Change in loan receivables 151 993

CASH FLOW FROM INVESTMENTS -2,696 -685

CASH FLOW FROM FINANCING

Personnel share issue - 726
Short-term loans drawn 6,000 -
Short-term loans repaid -6,000 -
Dividends paid - -15,003

CASH FLOW FROM FINANCING 0 -14 277

Change in cash and cash equivalents 15,089 3,845

Cash and cash equivalents at the beginning of the financial year 23,505 19,661
Effects of exchange rate fluctuations -80 -
Cash and cash equivalents at the end of the financial year 38,513 23,505
 PARENT COMPANY FINANCIAL STATEMENTS, FAS 53

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

ACCOUNTING POLICY Revenue recognition

Revenue is recognized when the buyer
Marimekko Corporation’s financial obtains control of the product – that is
statements have been prepared in when the significant risks and rewards
accordance with the legislation and of ownership have been transferred to
regulations that are in force in Finland. the buyer. In wholesale, this is mainly the
The financial year of the company is the moment when the goods are handed over
calendar year. to the customer as set forth in the agreed
delivery clause. In wholesale and export
Measurement of fixed assets trade, the terms of delivery determine the
Fixed assets are recorded in the balance point of time when the customer obtains
sheet at the original acquisition cost control of the goods. In retail where
less depreciation according to plan. cash or a credit card is used as means of
Depreciation according to plan has been payment, the income is recognized at the
calculated using straight-line depreciation time of sale.
on the estimated useful life of the fixed More information on revenue
assets. recognition can be found in the notes to
Periods of depreciation: the consolidated financial statements.
· intangible rights 5 years
· computer software 3–5 years Leasing
· other capitalized expenditure 3–15 years Leasing payments are treated as rental
· buildings 30 years expenditures.
· machinery and equipment 5–15 years.
Appropriations
Inventories Appropriations consist of depreciation
Inventories are presented at the differences due to differences between
acquisition cost or at the lower probable accounting and tax depreciation of
net realisation value. The value of tangible and intangible assets.
inventories does not include any share
of fixed purchasing and manufacturing Taxes
costs. Income taxes include income taxes
calculated on the result for the financial
Pension commitments year and taxes paid or refunded in
The pension security of the company’s previous financial years. Deferred
personnel has been arranged under the taxes are not recognized in the parent
statutory employee pension plan (TyEL) company’s income statement and balance
through a pension insurance company. sheet.

Items denominated in foreign currency Branches

The foreign-currency-denominated Branches have been consolidated into
receivables and liabilities of the company Marimekko Corporation’s accounts and
have been converted to euro amounts intercompany items have been eliminated.
using the exchange rate quoted by the
European Central Bank on the closing
date.
54 PARENT COMPANY FINANCIAL STATEMENTS, FAS

NOTES TO THE INCOME STATEMENT

1. NET SALES BY MARKET AREA

(EUR 1,000) 2020 2019
Finland 71,120 71,118
Other countries 47,897 47,590
Total 119,017 118,708

2. OTHER OPERATING INCOME

(EUR 1,000) 2020 2019
Rental income 54 140
Other income 234 463
Total 288 604

3. MATERIALS AND SERVICES

(EUR 1,000) 2020 2019
Materials and supplies
Purchases during the financial year 29,247 27,657
Increase (-) / decrease (+) in inventories -257 728
Total 28,990 28,386

External services 18,597 16,656
Total 47,587 45,041

4. PERSONNEL EXPENSES

(EUR 1,000) 2020 2019
Salaries, wages and bonuses 15,809 16,379
Pension and pension insurance payments 2,318 2,748
Other indirect social expenditure 462 451
Total 18,589 19,577

Salaries and bonuses for management
Members of the Board of Directors and the President and CEO 717 800
Itemized in the note 19 to the consolidated financial statements.

Average number of employees
2020 2019
Salaried employees 323 321
Production personnel 22 23
Total 345 344
 PARENT COMPANY FINANCIAL STATEMENTS, FAS 55

5. DEPRECIATION AND IMPAIRMENTS

(EUR 1,000) 2020 2019
Intangible assets
Intangible rights 40 57
Computer software 363 468
Other capitalized expenditure 453 409
Total 856 934

Tangible assets
Buildings and structures 7 12
Machinery and equipment 554 535
Total 560 547

Total 1,416 1,481

6. OTHER OPERATING EXPENSES

(EUR 1,000) 2020 2019
Leases 6,298 7,663
Marketing 10,429 12,732
Other expenses 14,198 14,739
Total 30,926 35,134

Auditor’s fee

(EUR 1,000) 2020 2019
KPMG
Audit 60 60
Other services 12 38
Total 72 98

7. FINANCIAL INCOME AND EXPENSES

(EUR 1,000) 2020 2019
Other interest and financial income
From Group companies 113 136
From others 13 21
Total 126 157

Interest and other financial expenses
To other than Group companies 857 44
Total 857 44

Financial income and expenses, total -731 113

Financial income and expenses include exchange rate differences (net)
Realized -190 -32
Unrealized -387 117
Total -577 85
56 PARENT COMPANY FINANCIAL STATEMENTS, FAS

8. APPROPRIATIONS

(EUR 1,000) 2020 2019
Change in depreciation difference 147 51

9. INCOME TAXES

(EUR 1,000) 2020 2019

Income taxes on operations 4,129 3,529

NOTES TO THE BALANCE SHEET

10. FIXED ASSETS

10.1 Intangible assets

2020

Advance
Other payments and
Intangible Computer capitalized acquisitions
(EUR 1,000) rights software expenditure in progress Total
Acquisition cost, 1 Jan. 2020 1,733 7,055 6,656 1,094 16,539
Increases 48 330 629 896 1,903
Transfers between categories 541 1,236 -1,830 -53
Acquisition cost, 31 Dec. 2020 1,781 7,927 8,520 160 18,389
Accumulated depreciation, 1 Jan. 2020 1,672 6,560 6,167 14,399
Depreciation during the financial year 40 363 453 856
Accumulated depreciation, 31 Dec. 2020 1,712 6,922 6,620 15,255
Book value, 31 Dec. 2020 69 1,005 1,899 160 3,133

2019

Advance
Other payments and
Intangible Computer capitalized acquisitions
(EUR 1,000) rights software expenditure in progress Total
Acquisition cost, 1 Jan. 2019 1,727 6,231 7,045 83 15,086
Increases 6 148 18 1,281 1,453
Transfers between categories 146 124 -269
Classification adjustment 531 -531
Acquisition cost, 31 Dec. 2019 1,733 7,055 6,656 1,094 16,539
Accumulated depreciation, 1 Jan. 2019 1,615 6,092 5,758 13,465
Depreciation during the financial year 57 468 409 934
Accumulated depreciation, 31 Dec. 2019 1,672 6,560 6,167 14,399
Book value, 31 Dec. 2019 61 496 488 1,094 2,139
 PARENT COMPANY FINANCIAL STATEMENTS, FAS 57

10.2 Tangible assets

2020

Advance
Machinery Other payments and
Land and Buildings and and tangible acquisitions
(EUR 1,000) water areas structures equipment assets in progress Total
Acquisition cost, 1 Jan. 2020 38 417 15,522 28 9 16,015
Increases 79 161 240
Transfers between categories 223 -170 53
Acquisition cost, 31 Dec. 2020 38 417 15,825 28 16,308
Accumulated depreciation, 1 Jan. 2020 331 13,127 13,458
Depreciation during the financial year 7 554 560
Accumulated depreciation, 31 Dec. 2020 338 13,681 14,019
Book value, 31 Dec. 2020 38 80 2,143 28 2,290

2019

Advance
Machinery Other payments and
Land and Buildings and and tangible acquisitions
(EUR 1,000) water areas structures equipment assets in progress Total
Acquisition cost, 1 Jan. 2019 38 417 14,468 28 14,952
Increases 110 953 1 063
Transfers between categories 944 -944
Acquisition cost, 31 Dec. 2019 38 417 15,522 28 9 16,015
Accumulated depreciation, 1 Jan. 2019 319 12,592 12,911
Depreciation during the financial year 12 535 547
Accumulated depreciation, 31 Dec. 2019 331 13,127 13,458
Book value, 31 Dec. 2019 38 86 2,395 28 9 2,557

10.3 Investments

2020

Shares in Group Other shares and
(EUR 1,000) companies participations Total
Acquisition cost, 1 Jan. 2020 2,196 16 2,212
Acquisition cost, 31 Dec. 2020 2,196 16 2,212
Accumulated depreciation, 31 Dec. 2020 290 290
Book value, 31 Dec. 2020 1,906 16 1,922

2019

Shares in Group Other shares and
(EUR 1,000) companies participations Total
Acquisition cost, 1 Jan. 2019 1,996 16 2,012
Increases 200 200
Acquisition cost, 31 Dec. 2019 2,196 16 2,212
Accumulated depreciation, 31 Dec. 2019 290 290
Book value, 31 Dec. 2019 1,906 16 1,922

11. INVENTORIES

(EUR 1,000) 2020 2019
Raw materials and consumables 4,581 4,323
Finished products/goods 15,170 15,310
Total 19,750 19,633
58 PARENT COMPANY FINANCIAL STATEMENTS, FAS

12. CURRENT RECEIVABLES

(EUR 1,000) 2020 2019
Trade receivables 6,463 5,206
Receivables from Group companies
Trade receivables 4,654 4,597
Loan receivables 5,061 5,498
Prepaid expenses and accrued income - 20
Total 9,715 10,114
Other receivables 81 37
Prepaid expenses and accrued income 759 784
Total 17,019 16,142

Prepaid expenses and accrued income
Royalty receivables 237 227
Other prepaid expenses and accrued income 522 557
Total 759 784

13. SHAREHOLDERS' EQUITY

(EUR 1,000) 2020 2019
Share capital, 1 Jan. 8,040 8,040
Share capital, 31 Dec. 8,040 8,040

Reserve for invested non-restricted equity, 1 Jan. 1,228 502
Personnel share issue - 726
Reserve for invested non-restricted equity, 31 Dec. 1,228 1,228

Treasury shares, 1 Jan. -315 -315
Treasury shares, 31 Dec. -315 -315

Retained earnings, 1 Jan. 29,600 29,773
Dividends paid - -15 003
Retained earnings, 31 Dec. 29,600 14,769

Net result for the period 15,935 14,831

Shareholders' equity, total 54,488 38,553

Calculation of distributable funds

(EUR 1,000) 2020 2019
Retained earnings 29,600 14,769
Net result for the period 15,935 14,831
Treasury shares -315 -315
Reserve for invested non-restricted equity 1,228 1,228
Dividends paid for 2019¹ -7,299 -
Business cost support by the Finnish State Treasury -500 -
Total 38,649 30,513

¹ After the end of the financial year, the Board of Directors made use of the authorization granted to it by the AGM on 8 April 2020 and
decided that a dividend of EUR 0.90 per share be paid for 2019 in one instalment.
 PARENT COMPANY FINANCIAL STATEMENTS, FAS 59

14. ACCUMULATED APPROPRIATIONS

(EUR 1,000) 2020 2019
Accumulated depreciation difference
Intangible rights 16 19
Other capitalized expenditure 318 444
Machinery and equipment 403 419
Buildings and structures 138 140
Total 874 1,021

15. LIABILITIES

Current liabilities

(EUR 1,000) 2020 2019
Advances received 1,587 1,006
Trade payables 7,535 7,405
Debts to Group companies
Trade payables 683 441
Accrued liabilities and deferred income 7,241 7,339
Other current liabilities 3,444 1,948
Accrued liabilities and deferred income 6,775 8,189
Total 27,265 26,329

Accrued liabilities and deferred income
Wages and salaries with social security contributions 3,781 3,995
Accrued income tax liabilities 559 2,335
Other accrued liabilities and deferred income 2,435 1,860
Total 6,775 8,189

16. GUARANTEES, CONTINGENT LIABILITIES AND OTHER COMMITMENTS

(EUR 1,000) 2020 2019
Leasing liabilities
Payments due in the following financial year 430 447
Payments due later 397 429
Total 827 876

Liabilities related to lease agreements
Payments due in the following financial year 6,260 6,393
Payments due later 27,042 29,593
Total 33,302 35,986

Guarantees on behalt of subsidiaries 3,059 4,855
Indirect liability for rent and other guarantees 3,048 2,193
60

Signatures to the financial

statements and the report of
the Board of Directors

Helsinki, 18 February 2021

Mika Ihamuotila Elina Björklund Arthur Engel

Chairman of the Board Vice Chairman of the Board Member of the Board

Mikko-Heikki Inkeroinen Helle Priess Catharina Stackelberg-Hammarén

Member of the Board Member of the Board Member of the Board

Tiina Alahuhta-Kasko
President and CEO

THE AUDITOR’S NOTE

A report on the audit performed has been issued today.

Helsinki, 18 February 2021

KPMG Oy Ab

Virpi Halonen
Authorized Public Accountant
 61

This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.

Auditor’s report
TO THE ANNUAL GENERAL MEETING OF MARIMEKKO CORPORATION

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion
We have audited the financial statements of Marimekko Corporation (business identity code 0111316-2) for the year ended 31 December
2020. The financial statements comprise the consolidated balance sheet, income statement, statement of comprehensive income,
statement of changes in equity, statement of cash flows and notes, including a summary of significant accounting policies, as well as the
parent company’s balance sheet, income statement, statement of cash flows and notes.
In our opinion
• the consolidated financial statements give a true and fair view of the group’s financial position, financial performance and cash flows
in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU
• the financial statements give a true and fair view of the parent company’s financial performance and financial position in accordance
with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit and Remuneration Committee.

Basis for Opinion

We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable
in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent company and group companies
are in compliance with laws and regulations applicable in Finland regarding these services, and we have not provided any prohibited non-
audit services referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed
in note 6 to the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Materiality
The scope of our audit was influenced by our application of materiality. The materiality is determined based on our professional judgement
and is used to determine the nature, timing and extent of our audit procedures and to evaluate the effect of identified misstatements
on the financial statements as a whole. The level of materiality we set is based on our assessment of the magnitude of misstatements
that, individually or in aggregate, could reasonably be expected to have influence on the economic decisions of the users of the financial
statements. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for qualitative
reasons for the users of the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters. The significant risks of material misstatement referred to in
the EU Regulation No 537/2014 point (c) of Article 10(2) are included in the description of key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of whether there was evidence
of management bias that represented a risk of material misstatement due to fraud.
62 AUDITOR’S REPORT

THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT

Revenue recognition (“Revenue recognition and net sales” in the consolidated accounting principles and note 1)

Marimekko Group’s revenue is generated from wholesale and retail In our audit of different revenue streams, we have tested company’s
sales of clothes, bags and accessories, and interior decoration key controls related to sales and performed substantive audit
products as well as licensing income. Group’s net sales, EUR 123.6 procedures, among others with data-analytics methods.
million, is a significant item in the financial statements consisting of • We have formed an understanding of accounting principles
a large number of transactions from different revenue streams as and practices in different revenue streams and evaluated the
well as diverse sales contracts and terms with customers. appropriateness of the revenue recognition principles in relation
Wholesale contracts include several different delivery terms and to IFRS.
might contain right of return, which determine when the ownership • We have tested revenue, discounts, campaign discounts and
of the product is transferred to the customer. Retail sales mainly margins in both wholesale and retail sales with data-analytics
consists of small transactions paid by cash or payment cards and methods.
the revenue is recognized when the product is sold to the customer. • For wholesale we have selected a sample of sales transactions
Revenue from licensing is recognized in accordance with the terms comparing them to sales invoices, contracts, delivery notes and
of the contract. payments received.
Revenue recognition is a key audit matter due to a large number • For retail sales we have reviewed sales processes and
of transactions as well as for a risk that revenue is recognized in an reconciliation routines for cash and payment card transactions
incorrect period. in selected retail stores.
• We have tested that the revenue has been recognized in the right
financial period by comparing sales transactions, invoices and
delivery terms to actual deliveries as well as by testing possible
return provisions and a sample of credit invoices made in 2021.
• We have also compared selected accounts receivables to the
confirmations received from counterparties.
• We have reviewed the most significant licensing contracts and
that the revenue has been recognized in accordance with the
contract terms.

Valuation and existence of inventory (“Inventories” in the consolidated accounting principles and note 12.1)

In our audit of valuation and existence of inventories we have

Marimekko purchases, manufactures and sells consumer goods and
tested the company’s key controls and performed substantive audit
is subject to changing consumer demands. Inventory consists of
procedures, among others with data-analytics methods.
fabrics and other raw materials as well as half-finished and finished
• We have attended physical stock takings in selected inventory
goods including clothes, bags, accessories and interior decoration
locations. We have analyzed company’s own results of
products.
stocktaking differences and how they have been resolved.
Inventories are valued at the lower of acquisition cost or probable
• We have compared the value of selected inventory items to the
net realizable value. Manufactured inventories include directly
latest purchase prices.
attributable fixed and variable overhead costs.
• We have tested slow-moving inventory items as well as
Inventory value EUR 22.4 million is a significant item in
exceptional values in inventory accounting with data analytics
Marimekko’s balance sheet and inventories are in several locations.
methods.
Inventory accounting includes manual processes in valuation and
• We have compared the unit prices of selected inventory items
compiling the inventory balances and it increases, therefore the risk
to their sales prices.
for human errors. In addition, inventory may include management’s
judgement on probable net realizable value.

Responsibilities of the Board of Directors and the President and CEO for the Financial Statements
The Board of Directors and the President and CEO are responsible for the preparation of consolidated financial statements that give a
true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and of financial statements
that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and
comply with statutory requirements. The Board of Directors and the President and CEO are also responsible for such internal control as
they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Board of Directors and the President and CEO are responsible for assessing the parent
company’s and the group’s ability to continue as going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an
intention to liquidate the parent company or the group or cease operations, or there is no realistic alternative but to do so.
 AUDITOR’S REPORT 63

Auditor’s Responsibilities for the Audit of Financial Statements

Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the parent company’s or the group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of the Board of Directors’ and the President and CEO’s use of the going concern basis of accounting
and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the parent company or the group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events so that the financial statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group
to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of
the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.

OTHER REPORTING REQUIREMENTS

Information on our audit engagement

We were first appointed as auditors by the Annual General Meeting on 12 April 2018.

Other Information
The Board of Directors and the President and CEO are responsible for the other information. The other information comprises the report
of the Board of Directors and the information included in the Annual Report, but does not include the financial statements and our auditor’s
report thereon. We have obtained the report of the Board of Directors prior to the date of this auditor’s report, and the Annual Report is
expected to be made available to us after that date. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes
considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and
the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Helsinki, 18 February 2021

KPMG Oy Ab

Virpi Halonen
Authorized Public Accountant
64

This document is an English translation of the Finnish independent auditor's reasonable assurance report.
Only the Finnish version of the report is legally binding.

Independent auditor’s reasonable

assurance report on Marimekko
Corporation’s ESEF financial statements
TO THE BOARD OF DIRECTORS OF MARIMEKKO CORPORATION

We have undertaken a reasonable assurance engagement on the iXBRL marking up of the consolidated financial statements for the
year ended 31 December 2020 included in Marimekko Corporation’s digital files 74370053IOY42B9YJ350-2020-12-31_en.zip prepared in
accordance with the requirements of Article 4 of EU Delegated Regulation 2018/815 (ESEF RTS).

The Responsibility of the Board of Directors and the President and CEO
The Board of Directors and the President and CEO are responsible for preparing the report of the Board of Directors and financial statements
(ESEF financial statements) that comply with the requirements of ESEF RTS. This responsibility includes:
• preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF RTS
• marking up the consolidated financial statements included in the ESEF financial statements with iXBRL tags in accordance with Article
4 of the ESEF RTS; and
• ensuring consistency between ESEF financial statements and audited financial statements.
The Board of Directors and the President and CEO are also responsible for such internal control as they deem necessary to prepare
the ESEF financial statements in accordance with the requirements of the ESEF RTS.

Auditor’s Independence and Quality Control

We are independent of the company in accordance with the ethical requirements applicable in Finland, which apply to the engagement
we have performed, and we have fulfilled our other ethical obligations in accordance with these requirements.
The auditor applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control
including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable
legal and regulatory requirements.

Auditor’s Responsibility
In accordance with the engagement letter our responsibility is to express an opinion on whether the marking up of the consolidated financial
statements included in the ESEF financial statements comply in all material respects with the Article 4 of the ESEF RTS. We conducted
our reasonable assurance engagement in accordance with International Standard on Assurance Engagements 3000.
The engagement involves procedures to obtain evidence whether;
• the consolidated financial statements included in the ESEF financial statements are, in all material respects, marked up with iXBRL
tags in accordance with Article 4 of the ESEF RTS, and;
• the ESEF financial statements and the audited financial statements are consistent with each other.
The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes the assessment of the
risks of material departures from the requirements set out in the ESEF RTS, whether due to fraud or error.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion
In our opinion, the consolidated financial statements included in the ESEF financial statements of Marimekko Corporation identified as
74370053IOY42B9YJ350-2020-12-31_en.zip for the year ended 31 December 2020 are marked up, in all material respects, in compliance
with the ESEF Regulatory Technical Standard.
Our audit opinion relating to the consolidated financial statements of Marimekko Corporation for the year ended 31 December 2020
is set out in our auditor’s report. In this report, we do not express an audit opinion, review conclusion or any other assurance conclusion
on the consolidated financial statements.

Helsinki, 19 March 2021

KPMG Oy Ab

Virpi Halonen
Authorized Public Accountant
65
66
 67

Statement of non-financial
information 2020

MARIMEKKO’S BUSINESS MODEL AND transformative megatrends impacting responsible practices throughout the
APPROACH TO SUSTAINABILITY the fashion and textile industry and an supply chain; being resource efficient and
increasingly important consideration in the caring for the environment; and offering
Marimekko is a Finnish lifestyle design choices of consumers. The coronavirus an inspiring and responsible workplace.
company renowned for its original prints pandemic further accelerated this trend In December 2020, Marimekko
and colors. The company designs, in 2020. Marimekko’s operations and published its new, even more ambitious
produces, sources, markets and sells design philosophy have always been based sustainability strategy for 2021–2025. It
clothing, bags and accessories, as on a sustainable approach: Marimekko is built on three guiding principles with
well as home décor items ranging from wants to offer its customers timeless, defined goals and projects. The three
textiles to tableware. Marimekko’s functional and durable products that principles deployed throughout the value
business model is based on a variety of bring them long-lasting joy and that they chain are timeless design brings joy for
distribution channels including company- will not want to throw away. Marimekko generations to come, the products of
owned Marimekko stores, outlet stores believes that determined efforts to tomorrow leave no trace, and positive
and e-commerce (retail), partner-owned improve sustainability strongly support the change through fairness and equality.
Marimekko stores, shop-in-shops and company’s long-term success. Possibilities The new sustainability strategy is
e-commerce, wholesale customers such to improve the sustainability of operations presented in more detail on page 9 of
as department stores and multi-brand have been identified both in Marimekko’s the Financial Statements 2020 and
stores as well as e-tailers (wholesale), and own operations (e.g. design, material on the company website at
licensing. The company’s key markets are choices and material, energy and water company.marimekko.com/en/sustainability/.
Northern Europe, the Asia-Pacific region efficiency in the in-house printing factory) Marimekko has defined a governance
and North America. The design, product and in the company’s value chain. In model for developing and managing non-
development, merchandising, marketing, addition, Marimekko engages with various financial matters:
omnichannel sales, and supply chain industry networks (Better Cotton Initiative, • The Board of Directors approves
related activities are led globally from the amfori BSCI, Responsible Sourcing the sustainability strategy, including
headquarters in Helsinki. A large part of Network, local industry associations, related key targets, as well as annual
Marimekko’s printed fabrics, used across among others), as collaboration between sustainability reviews.
its product lines, is produced in Helsinki different actors is believed to be the most • The Management Group sets targets
in the company’s own textile printing effective way to promote sustainable and follows the progress on at least a
factory, which also acts as an innovation practices in the industry. bi-annual basis. Risks related to non-
hub for Marimekko’s key differentiator, The focus areas for Marimekko’s financial matters are addressed as part
its art of print making, and enables active sustainability work have been determined of the consolidated risk management
participation in research and development based on the Marimekko brand and the and presented as part of the report of
projects focused on improving the company’s vision and values paired with the Board of Directors.
sustainability of operations. Furthermore, analyses looking at megatrends affecting • Each business unit and function is
good and competent suppliers play a the fashion and textile industry, consumer responsible for the actions relating to
major role in Marimekko’s competitiveness trends and insight, studies on sustainability their own areas in order to reach the
and the company strives to build long- factors in the whole value chain and shared targets.
term partnerships with its suppliers. benchmarking of industry practices, • The business development and
Marimekko’s core values and Code stakeholder dialogue and input from transformation team coordinates the
of Conduct guide the daily work. The employees. Marimekko’s sustainability design and piloting of new business
requirements for suppliers are included actions cover the product life cycle from models supporting Marimekko’s
in the Supplier Code of Conduct, which materials to end use. sustainability philosophy. The team is
is based on the amfori BSCI Code of Material themes in Marimekko’s also responsible for the execution of
Conduct. In addition, more specific sustainability strategy 2016–2020 the company’s transformation program.
policies and guidelines exist for each of were designing timeless, long-lasting Sustainability work is supported and
the areas covered by this statement. and functional products; inspiring and coordinated by the Sustainability
Sustainability is one of the most engaging customers and staff; promoting Manager.
68

Sustainable and
timeless design

Marimekko’s design philosophy is based in 2020 was recorded in the monitoring company has processes in place in its own
on timeless and durable products that system only in 2021 and Marimekko printing factory and regularly checks the
give people long-lasting joy. A long-lasting increased its use of recycled cotton. quality of the products manufactured by
product is a key component in improving Marimekko’s own printing factory partner suppliers both through in-house
sustainability in the fashion industry, as, offers unique possibilities for testing new, tests and through third-party production
for example, wearing items twice as long more sustainable fabrics and dyestuffs checks.
can reduce the industry’s emissions by up in the printing process and Marimekko By providing information on its
to 44 percent.¹ actively participates in these testing products, their proper care, and ways
The work that Marimekko does to projects. In early 2020, Marimekko to prolong product life, Marimekko can
extend the life cycle of its products introduced the first demo products inspire and engage its customers to
is multifold. The company strives to produced together with the Finnish fiber contribute to maximizing product life
offer esthetically timeless designs technology company Spinnova. The first- cycles. In 2020, Marimekko continued its
and materials that withstand use, and ever printed clothes made of Spinnova’s Q&A sessions in social media, entitled
sustainability considerations are part of fiber were printed by Marimekko at Behind the Patterns, to increase dialogue
the design and product development, the end of 2019. In 2020, Marimekko with end users. Six session were held
relating for example to the material continued testing a new, plant-based during the year, and each session had
choices used and how print designs are indigo dye and printed fabrics with the an average of 23,300 unique viewers.
placed to minimize any leftover fabric. dye for its 2021 collections. At the beginning of 2020, Marimekko
Marimekko is committed to increasing Furthermore, the company finalized published a new, more comprehensive
the share of sustainable cotton and its new material strategy which will care guide for its products. The guide
other more sustainable materials in provide the foundation for the material was regularly featured on the company’s
its products. For sourcing sustainable choices and development projects going social media channels, and in November,
cotton, Marimekko has so far chosen to forward. Marimekko aims at reducing product care was demonstrated for
use mainly Better Cotton. Marimekko is the environmental footprint of its textile customers in the Helsinki flagship store
a member of the Better Cotton Initiative materials by 30 percent (calculated using in collaboration with Arkive Atelier. In
(BCI). The goal of the BCI is to make the Higg Material Sustainability Index) by addition to prolonging product life, proper
global cotton production better for the the end of 2025 through increasing the care helps to reduce the environmental
people who produce it, better for the use of various more sustainable materials. impacts of products during their use.
environment it grows in and better for the The material choices based on the new The company also promotes the reuse
sector’s future. At the end of 2020, the strategy will begin in 2021 and will be of its products for example through
share of Better Cotton was 82 percent visible for consumers in Marimekko’s a continued collaboration in Finland
(96)² of all cotton sourced by Marimekko. coming collections. with Vestis, a retailer of secondhand
The share of Better Cotton decreased Marimekko also aims to increase the clothing and accessories. The garment
as some of the Better Cotton sourced share of more sustainable materials in collecting events planned for 2020 had
its packaging. All packaging materials to be cancelled due to the coronavirus
are already recyclable. In the future, the pandemic. The events will continue when
1
Ellen MacArthur Foundation, A new textiles
economy: Redesigning fashion’s future (2017,
company intends, for example, to reduce the situation is better. Furthermore,
http://www.ellenmacarthurfoundation.org/ the use of plastic and increase the use of Marimekko will pilot resale services
publications). recycled materials. in 2021.
2
The Better Cotton Initiative changed their
calculating guidelines in 2020. The comparison To ensure that Marimekko products
figure for 2019 has been adjusted accordingly. are durable and of high quality, the
 STATEMENT OF NON-FINANCIAL INFORMATION 2020 69

Sustainable and timeless design

KEY TARGETS BY THE END OF 2020

• Offering durable, high-quality and functional products

• Increasing the share of sustainable cotton in products
• Increasing the share of other more sustainable raw materials used in products
and packaging
• Contributing to the circular economy with related projects and services
• Offering more information about products, their proper care, and ways to
prolong product life

KEY PERFORMANCE INDICATORS

Share of products subject to claims, Share of Better Cotton of

target not more than 0.5% of total cotton sourcing,
products sold target to increase the share

% %

1.0 100 96

82
0.8 80
64³
0.6 60

0.4
0.4 40
0.3 0.3

0.2 20

0.0 0
2018 2019 2020 2018 2019 2020

Projects related to developing new, more sustainable materials

• Cooperation with Spinnova to develop new sustainable materials

• Cooperation with Natural Indigo on the use of natural dyes

Projects supporting the circular economy

• Analysis of business models for resale services and planning of a pilot

project

Actions to increase the amount of product-related information shared with or

available to customers

• New, more extensive care guide for products

• Collaboration with Arkive Atelier in Finland on product care
• “Behind the Patterns” Q&A sessions in social media

3
Due to a change in the Better Cotton Initiative calculating guidelines, the figure for 2018 is not
comparable with those for 2019 and 2020.
The share decreased in 2020 as some of the Better Cotton sourced in 2020 was recorded in the
monitoring system only in 2021 and Marimekko increased its use of recycled cotton.
70

Sustainable
supply chain

Marimekko’s wide range of products are Code of Conduct details, among other the Xinjiang Uyghur Autonomous Region
manufactured by a global network of things, the respect for human rights, in China for cotton. The due diligence
around 70 suppliers and 100 factories. including strict principles against child process is developed continuously.
The company’s objective is to always labor and forced labor, and for the right During 2020, 20 (13) amfori BSCI
find the best manufacturing place for for the workers to organize and the right audits were conducted at Marimekko’s
each product category. 60 percent of to equal treatment. The company is a partner suppliers’ facilities. None of
the products are made in EU countries member of the European amfori BSCI the audits carried out during the year
and the rest in other European countries initiative, which promotes the monitoring identified any zero-tolerance findings,
and Asia. Supply chains in the textile and improvement of working conditions such as indications of child labor or
industry are complex and involve many in global supply chains. Purchasing forced labor, or imminent and significant
players – thus, enhancing sustainability agreements signed with suppliers bind the risks to workers’ health. Most of the
in the supply chain from raw materials supplier to comply with the International findings in the audits concerned health
to the stores demands patient work. Labour Organization Conventions and the and safety (2020: 35 percent; 2019: 43),
At Marimekko, sustainability topics amfori BSCI Code of Conduct. management systems (18 percent; 17),
addressed in the supply chain cover Marimekko’s due diligence process for and worker involvement and protection
social, environmental and governance human rights consists of careful supplier (14 percent; 10). Corrective action plans
issues. selection and assessment, contractual were put in place where necessary.
Marimekko has strong values, of which obligations, questionnaires to suppliers Despite the coronavirus pandemic,
one – fairness to everyone and everything (for example regarding the origin of third-party audits in the factories were
– crystalizes the company’s sustainability materials used), independent third-party mostly carried out according to the
thinking and extends to its personnel, audits conducted mainly in factories normal schedule. However, due to travel
customers and partners around the world. located outside Europe (in countries restrictions, Marimekko employees’
Marimekko is committed to respecting considered higher risk), monitoring visits to the factories were not possible.
human rights in all its operations. The through factory visits by Marimekko The corrective actions were monitored
company’s approach to human rights employees, follow-up of corrective in dialogue with the suppliers. Based on
is based on the United Nations Guiding actions, training for Marimekko’s sourcing the reported human rights violations,
Principles on Business and Human Rights department, external assessments and Marimekko forbade its suppliers to
(UNGPs). studying external reports, as well as use cotton or subcontractors from the
Marimekko’s sourcing is guided by collaboration in industry organizations. Xinjiang Uyghur Autonomous Region in
principles of responsible sourcing and Marimekko has also excluded sourcing China for the manufacture of Marimekko
its Supplier Code of Conduct, which all from certain very high-risk countries, products.
partner suppliers must sign. The Supplier particularly Uzbekistan, Turkmenistan and
 STATEMENT OF NON-FINANCIAL INFORMATION 2020 71

Sustainable supply chain

KEY TARGETS BY THE END OF 2020

• Building transparency towards raw materials

• Selecting suppliers carefully, taking human rights and environmental protection
into account
• Promoting human rights, a living wage, worker empowerment and safe working
conditions in the supply chain through dialogue, audits and training

KEY PERFORMANCE INDICATORS

Share of manufacturing in the EU / Share of purchases from audited Number of audits and
outside the EU suppliers in non-EU countries audit results4

% %
98 98 100
100 100 25
21
20
80 80 20
66 64 60
60 60 15 13

40 40 10

20 34 36 40 20 5

0 0 0
2018 2019 2020 2018 2019 2020 2018 2019 2020

EU countries Outstanding (A)

Non-EU countries Good (B)

Acceptable (C)

Insufficient (D)

Actions to enhance transparency

• Public supplier list since 2015, updated in 2020 according to the requirements of
the Transparency Pledge
• Upstream supply chain (incl. fabric suppliers) mapped and recorded in internal
systems
• Questionnaires about raw material origin
• Participation in Fashion Revolution campaign
• “Behind the Patterns” Q&A sessions in social media

4
The number of audits varies year by year, based on frequency of audits (the audit cycle is 1 or 2
years depending on the result) and changes in the supplier base (for example, a new factory may have
another audit than amfori BSCI).
72

Resource efficiency and

the environment

Marimekko’s goal is to constantly environment, as detailed in the standard footprint of the printing factory and
reduce the environmental impacts of criteria. headquarter operations was further
its operations. The main environmental For its suppliers, Marimekko has defined. In addition, the CO2 footprint
impacts of the company’s own operations environmental requirements set in the of Marimekko’s other offices and the
are related to the in-house textile Supplier Code of Conduct and in product stores it operates globally as well the
printing factory in Helsinki. In addition, policies related to responsible material environmental footprint of the textile
environmental impacts occur in the sourcing. The company’s sourcing teams materials used were evaluated. As a
upstream and downstream value chain, regularly gather and assess information result of continuous development work
for example during the production of about environmental impacts in the supply and emission offsetting, Marimekko’s
materials, during logistics as well as when chain. Marimekko also has chemical own operations, i.e. the printing factory,
the products are used. management principles in place, detailed offices and stores operated by the
In the Marimekko printing factory, in contracts and the company’s Restricted company globally, became carbon neutral
the goal is to continuously reduce the Substances List and monitored by random in 2020. Furthermore, Marimekko set new
environmental impacts by improving testing based on risk assessment. emissions reduction targets by the end
material, water and energy efficiency In 2020, Marimekko increased the of 2025 as part of its new sustainability
and minimizing waste in the factory's use of more environmentally friendly strategy.
own operations. The factory has its substances and chemicals. For example,
own environmental and chemicals the company’s printing factory began
management processes and 83 percent using natural dyes and colors mixed from
(86) of the fabrics printed at the factory dyes left over from earlier production
are certified according to the STANDARD runs.
100 by OEKO-TEX®. The certificate Marimekko continued studies to
guarantees that the materials contain calculate the CO2 footprint of its
no substances harmful to people or the operations. During the year, the
 STATEMENT OF NON-FINANCIAL INFORMATION 2020 73

Resource efficiency and the environment

KEY TARGETS BY THE END OF 2020

• Continuously reducing the carbon footprint of operations

• Continuously improving material, energy and water efficiency of in-house
operations
• No landfill waste generated by in-house operations
• Looking for environmentally friendlier alternatives to chemicals (greener
chemistry in the in-house printing factory, and phaseout of PFCs and PVC,
which was completed in 2019)

KEY PERFORMANCE INDICATORS

Biogas consumption Share of renewable energy of the Water consumption,

energy produced and purchased6 target to reduce by 20% from the 2010
baseline of 31 l / meter produced

kWh / meter produced % l / meter produced

5 100 40
4.4 5 87
3.6 3.8 78 29 8 29 7,8
4 80
71 30

3 60
20
20
2 40

10
1 20

0 0 0
2018 2019 2020 2018 2019 2020 2018 2019 2020

Carbon dioxide emissions Percentage of waste generated Share of materials certified

(scope 1 and 2), being reused in energy production according to the STANDARD 100
target to reduce by 50% from the or as recycled material, by OEKO-TEX® in the in-house
2010 baseline of 1,399 tonnes target 100% printing factory

t % %
96 97 100
800 100 100
86
80 83 11
80 80
600

60 60
400 350
306 9
40 40
162 10
200
20 20

0 0 0
2018 2019 2020 2018 2019 2020 2018 2019 2020

5
Consumption grew mainly as a result of introducing a higher heat of 8
Water consumption increased due to a second wash introduced for some
combustion for biogas as of 1 January 2020. Calculated using the previous fabrics to enhance color fastness. The washes were continued in 2020.
heat of combustion, the consumption per meter would have been 4.0 kWh. 9
The figure for 2019 has been restated using the 2019 emission factor.
6
Covers the fabric printing factory and head office operations in Helsinki 10
The figure for 2020 has been calculated using the 2019 emission factor.
and for electricity consumption also the facilities in Kitee and Sulkava. 11
The decrease in the share of certified materials is attributable to
7
Marimekko has increased the share of linen as its material. Linen fabrics the increased use of linen; linen fabrics are currently not included in
must be washed before printing, which increases water consumption per Marimekko’s OEKO-TEX® certification.
meter.
74

An inspiring and
responsible workplace

Marimekko’s success rests on strong staff close cooperation between occupational Maripeople process enhances employee
commitment and the ability to utilize every healthcare, human resources, managers well-being and engagement by linking
employee’s skills and creativity in daily and the occupational safety organization. the contribution of each Marimekko
work. The company believes in fairness, Marimekko uses an early support model, employee to the company’s strategy. The
courage and cooperation, and fosters aimed at improving coping at work, Marimeter employee engagement survey
an open, low-hierarchical corporate working ability and workplace well-being. has previously been conducted every
culture that is based on creativity and The objective is to increase dialogue one or two years. The functionality of
entrepreneurship. The Marimekko Spirit, between the manager and employees the Marimeter concept will be evaluated
incorporating the company’s values, in particular in matters related to the during the first half of 2021. In addition,
forms the backbone of how people work and working ability, to improve Marimekko uses leadership surveys
work together at Marimekko. The UN’s the working conditions, and prevent to monitor and develop the quality of
Universal Declaration of Human Rights prolonged absenteeism and disability leadership.
and Marimekko’s Code of Conduct retirements. As preemptive measures of During 2020, Marimekko continued
provide the principles for managing occupational safety, hazards and risks to further develop leadership and
the social issues of the company’s own involved in the work are recognized and management skills across the
operations. evaluated. Employees report their safety organization as good leadership enhances
Marimekko’s culture and working observations through a joint notification employees’ well-being, commitment
environment are founded on equality, system. In Finland, reported safety and performance. The importance of
valuing diversity, and inclusion. No observations and occupational accidents developing leadership and management
discrimination is tolerated at Marimekko. are monitored regularly, and corrective skills was further emphasized in the
The company wants to provide a safe, actions needed are taken based on them. exceptional circumstances caused by
caring, communal and respectful working Marimekko supports its employees’ the pandemic. To support the growth of
environment for all of its employees. personal and professional development. the line managers, Marimekko organized
Any issues relating to inappropriate The Group-wide Maripeople performance training sessions. The Maripeople
behavior are investigated according to management model, including goals performance management process was
set processes. The company promotes related both to work tasks and to ways further developed. Occupational health
equality based on an equality plan, of working, is the backbone of individual and safety is another main development
provides training for its managers, and performance management and evaluation focus area, and new tools and processes
measures success with its employee at Marimekko. Through the annual related to it were taken into use in
engagement surveys. Maripeople process, employees get to Finland. In addition, Marimekko organized
At Marimekko, personnel well-being is know what is expected of them, and training in for example inclusivity and
enhanced by promoting employees’ health have an opportunity to discuss their work diversity. During the year, new internal
and working and functional capacity, and the skills required for growth with communication tools, such as company-
as well as by ensuring an empowering their line manager as well as to give and wide virtual events and regular open Q&A
working atmosphere. This work is done in receive feedback. A well-implemented sessions, were introduced.
 STATEMENT OF NON-FINANCIAL INFORMATION 2020 75

An inspiring and responsible workplace

KEY TARGETS BY THE END OF 2020

• Supporting the personal and professional growth of employees by training and

competence development
• Fostering the Marimekko Spirit

KEY PERFORMANCE INDICATORS

Diversity at Marimekko

All employees Management Group Board of Directors Employee age distribution

%
100

80
57 57 50
60 93 92 92 71 71 78

40

20 43 43 50
29 29 22
7 8 8 <20 years: 1%
0
2018 2019 2020 2018 2019 2020 2018 2019 2020 20–29 years: 22%

Women 30–39 years: 29%

Men 40–49 years: 26%

50–59 years: 16%

> 60 years: 6%

Employee engagement score Number of accidents13 Sick leave absences13

%
100 20 5
74.9 74.1
(AA+) (AA+)
80 4
15
2.9 2.7
60 11 11 3
10 2.3

40 7 2

5
20 1

0 0 0
2018 2019 2020¹² 2018 2019 2020 2018 2019 2020

12
No survey in 2020 as the previous study was conducted at the turn of 2019 and 2020.
The functionality of the concept for Marimeter will be evaluated during the first half of 2021.
13
Covers employees in Finland.
76

Ethical business
behavior

Marimekko wants to work according revised its on-boarding practices at the

to the same principles around the end of 2019. In 2020, the Code of Conduct
world, complying with local laws and and other policies were a closer-knit and
the Marimekko values and following more systematic part of on-boarding for
responsible and ethical business new employees. Several training sessions
practices. The key principles for ethical on antitrust and insider matters were
business practices are included in the also organized for managers and key
Marimekko Code of Conduct and the employees during 2020.
Supplier Code of Conduct and more
specific instructions are given in the
Antitrust Guidelines, Insider Policy and
in instructions in regard to privacy. Anti-
corruption and anti-bribery matters are
addressed in contracts with partners
such as suppliers and distributors.
Marimekko has an anonymous
whistle-blowing channel for its
employees, which is maintained by an
independent third-party service provider.
Audits at partner suppliers also cover
ethical business behavior, in accordance
with the amfori BSCI Code of Conduct.
Marimekko has a Code of Conduct
e-training, which all employees are
required to complete. Marimekko
 STATEMENT OF NON-FINANCIAL INFORMATION 2020 77

Ethical business behavior

KEY TARGETS BY THE END OF 2020

• Committing to responsible and ethical business practices

KEY PERFORMANCE INDICATORS

Share of employees who have participated in training in responsible and

ethical business practices

%
93 14 96
100
91
82 82
78 79 76
80
70

60

40

20

0
2018 2019 2020

Employees who have participated in e-training in the Code of Conduct

Managers and employees having regular access to unpublished financial information

who have participated in training in insider matters
Employees working in wholesale and other selected groups who have participated
in training in antitrust matters
EU-based employees and employees based outside the EU having access to EU personal
data who have participated in e-training in the GDPR

14
In 2020, the training was targeted at wholesale staff; not fully comparable with the 2019 figure.

ABOUT THE STATEMENT

This statement has been prepared in accordance with the Finnish

Accounting Act, Chapter 3 a, and the EU Directive 2014/95/EU.
The statement covers the financial year from 1 January to
31 December 2020 and the whole Marimekko Group, except
where otherwise mentioned. In addition, Marimekko annually
prepares a more detailed Sustainability Review, published on the
company website during the second quarter of the year.

Helsinki, 18 February 2021

Marimekko Corporation

Board of Directors President and CEO

78
 79

Corporate governance
statement 2020

INTRODUCTION Directors and the President and CEO. from different perspectives. The most
Marimekko Corporation does not have a important factors for the company are the
Marimekko Corporation applies the Supervisory Board. At the Annual General directors’ mutually complementary know-
Finnish Companies Act, other regulations Meeting, the shareholders approve the how, education and experience in different
concerning public listed companies, financial statements, decide on the fields and different geographic areas
Marimekko Corporation’s Articles of distribution of profits, elect the members significant for the company business
Association as well as the rules and of the Board of Directors and the auditor as well as their personal attributes. The
regulations of Nasdaq Helsinki Ltd. and determine their remuneration, as well diversity of the Board is promoted in
Marimekko Corporation also complies as decide on amendments to the Articles particular by the gender and age diversity
with the recommendations of the of Association if necessary. of the directors. Marimekko aims to
Finnish Corporate Governance Code, Marimekko Corporation’s General have both genders equally represented
effective as of 1 January 2020, according Meeting is convened by the Board of in the Board, and to have directors with
to the comply-or-explain principle Directors. According to the Articles of experience from different geographical
without deviating from individual Association, the Annual General Meeting areas. Diversity in the Board is considered
recommendations. shall be held within six months of the close central to the customer- and consumer-
The corporate governance statement of the financial year on a date decided by orientated approach of the company.
has been drawn up in accordance with the the Board of Directors. The progress in achieving the objectives
Corporate Governance Code effective Due to the coronavirus pandemic, the is reviewed regularly. A director elected
as of 1 January 2020. The statement has AGM held on 8 April 2020 was organized to the Board shall have the required
been issued as a separate report and the with exceptional arrangements in place competence for the position, and a
Audit and Remuneration Committee of for safety reasons. sufficient amount of time for attending
Marimekko Corporation has reviewed it. Marimekko shares are quoted on to the duties of the position. Also taken
The statement has been published on Nasdaq Helsinki Ltd. into account in the composition of the
the company’s website at Board are the long-term objectives of the
company.marimekko.com. The Finnish Composition and shareholding of the company as well as succession planning.
Corporate Governance Code is publicly Board of Directors There is no particular order governing the
available on the website of the Securities The members of the Board of Directors appointment of Board members.
Market Association at are elected at the AGM. The proposal The AGM on 8 April 2020 elected
www.cgfinland.fi/en/. for the composition of the Board is the following members to Marimekko
KPMG Oy Ab, Authorized Public prepared by the major shareholders of the Corporation’s Board of Directors:
Accountants, as the company’s auditor company. The AGM has not established a
has checked that the statement has been shareholders’ nomination board. Mika Ihamuotila,
issued and that the description of the When preparing the proposal for the Chairman of the Board
main features of the internal control and composition of the Board of Directors, • Born 1964
risk management systems related to the the major shareholders take account of • Ph.D. (Econ.)
financial reporting process is consistent the company’s business requirements • Principal occupation: Chairman of
with the financial statements. and development as well as the strategy the Board of Marimekko Corporation,
of the company. The main objective is 2016– (full-time Chairman of the Board
DESCRIPTIONS CONCERNING to ensure that the composition of the and CEO of Marimekko Corporation,
CORPORATE GOVERNANCE Board supports the company’s business 2015–2016)
operations, strategy and customer- • Ownership of shares and share-based
Marimekko Corporation’s administrative orientated approach in an optimal manner. rights in the company at the end of
bodies and officers with the greatest Diversity in the Board of Directors helps the financial year 2020: 0. Shares and
decision-making power are the General to ensure that this objective is achieved. share-based rights in the company
Meeting of Shareholders, the Board of The diversity of the Board is reviewed owned by a corporation over which the
80 CORPORATE GOVERNANCE STATEMENT 2020

director exercises control, PowerBank • Ownership of shares and share-based Board of Directors since 17 April 2019
Ventures Ltd, at the end of the rights in the company at the end of pursuant to a separate service agreement
financial year 2020: 1,017,700 shares. the financial year 2020: 4,790 shares. governing his half-time chairmanship (from
Shares or share-based rights in Group Shares and share-based rights in the 11 April 2016 to 16 April 2019, he acted
companies at the end of the financial company owned by a corporation over as full-time Chairman of the Board). The
year 2020: 0. which the director exercises control, Audit and Remuneration Committee of the
and ownership of shares and share- company handles and prepares matters
Elina Björklund, based rights in Group companies at the related to the service agreement’s terms
Vice Chairman of the Board end of the financial year 2020: 0. and Mika Ihamuotila’s remuneration. These
• Born 1970 roles as well as his previous position as the
• M.Sc. (Econ.), IDBM Pro Helle Priess President and CEO of the company have
• Principal occupation: CEO of Reima • Born 1976 been taken into account in the evaluation of
Ltd, 2012– • BA (Chinese studies) Ihamuotila’s independence.
• Ownership of shares and share-based • Principal occupation: owner & CEO of
rights in the company at the end of Priess Ltd., 2009– Description of the operations of the Board
the financial year 2020: 12,382 shares. • Ownership of shares and share-based of Directors
Shares and share-based rights in the rights in the company at the end of The Finnish Companies Act sets the
company owned by a corporation over the financial year 2020: 2,304 shares. ground for the duties of the Board of
which the director exercises control, Shares and share-based rights in the Directors. According to the Act, the Board
and ownership of shares and share- company owned by a corporation over is responsible for the proper organization
based rights in Group companies at which the director exercises control, of the company’s administration and
the end of the financial year 2020: 0. and ownership of shares and share- operations. The President and CEO
based rights in Group companies at the is responsible for the day-to-day
Rebekka Bay, until 2 June 2020 end of the financial year 2020: 0. management and development of
• Born 1969 the company in accordance with the
• BA (Hons) in Fashion Catharina Stackelberg-Hammarén instructions and orders of the Board of
• Principal occupation: Creative Director • Born 1970 Directors.
of Uniqlo Global Innovation Center Inc., • M.Sc. (Econ.) The principal duties of Marimekko
2017–2020 • Principal occupation: founder and Corporation’s Board of Directors are
• Ownership of shares and share-based Executive Chairman of the Board of defined in the written rules of procedure
rights in the company on 2 June 2020: Marketing Clinic, 2019– confirmed by the Board. The rules of
2,304 shares. Shares and share-based • Ownership of shares and share-based procedure are reviewed and confirmed
rights in the company owned by a rights in the company at the end of annually at the Board’s constitutive
corporation over which the director the financial year 2020: 5,057 shares. meeting, held following the AGM. The
exercises control, and ownership Shares and share-based rights in the Board reviews all matters that are
of shares and share-based rights in company owned by a corporation over significant to or have long-term effects on
Group companies on 2 June 2020: 0. which the director exercises control, Marimekko’s business operations.
and ownership of shares and share- According to the rules of procedure,
Arthur Engel based rights in Group companies at the the Board addresses matters such as the
• Born 1967 end of the financial year 2020: 0. following:
• Economics degree • specifying and confirming strategic
• Principal occupation: non-executive The Board evaluates the independence objectives and guidelines for the Group
board member; independent advisor of its members annually in accordance and the various business areas
and investor at Hilaritas AB, 2013– with the Finnish Corporate Governance • reviewing and confirming operating
• Ownership of shares and share-based Code recommendations. Among the plans and budgets for the Group and the
rights in the company at the end of members of Marimekko’s Board of various business areas
the financial year 2020: 13,862 shares. Directors, Elina Björklund, Rebekka Bay, • reviewing and approving interim
Shares and share-based rights in the Arthur Engel, Mikko-Heikki Inkeroinen, reports, half-year financial reports, the
company owned by a corporation over Helle Priess and Catharina Stackelberg- consolidated financial statements and the
which the director exercises control, Hammarén are independent of the report of the Board of Directors
and ownership of shares and share- company and its significant shareholders. • expanding and downsizing business
based rights in Group companies at Mika Ihamuotila is not independent of the operations
the end of the financial year 2020: 0. company nor its significant shareholders • considering mergers, acquisitions
due to his indirect shareholding through and demergers and restructuring
Mikko-Heikki Inkeroinen PowerBank Ventures Ltd, equaling 12.5 arrangements
• Born 1987 percent of the shares and votes in the • deciding on investments and the
• M.Soc.Sc. company. acquisition and sale of assets that
• Principal occupation: Chief Digital Mika Ihamuotila has acted as half-time are either strategically or financially
Officer of Kamux Corporation, 2018– Chairman of Marimekko Corporation’s significant
 CORPORATE GOVERNANCE STATEMENT 2020 81

• deciding on financial policy and • reviewing and confirming operating According to the rules of procedure
contingent liabilities related to financing plans and budgets confirmed by the Board of Directors,
arrangements • assessing the impacts of the the Audit and Remuneration Committee
• approving the Group’s reporting, risk coronavirus pandemic on the company’s handles and prepares matters related
management and internal control operations in the short term and on the to the terms and remuneration of the
procedures, and audit and control strategy in the long term company’s executive management as well
systems • strengthening market position in Asia, as other tasks and supervision typically
• approving the audit plan especially in China. assigned to audit and remuneration
• monitoring and assessing how related In 2020, the Board of Directors held committees. These include, for example,
party transactions are part of the nine meetings. The Board members’ the following:
company’s ordinary course of business attendance rate at meetings was • monitoring the reporting process of
and according to market terms 100 percent. The Board evaluated its financial statements
• appointing the company’s President operations and working methods in 2020 • supervising the financial reporting
and CEO and the members of the through internal self-evaluation. process
Management Group and deciding on The company has ensured that • monitoring the efficiency of the
their remuneration all directors have received sufficient company’s internal control and
• providing instructions to the President information on the company’s business internal audit, if applicable, and risk
and CEO. operations, operating environment and management systems
In 2020, the Board focused, among financial position and that any new • reviewing the description of the main
other things, on the following subjects: directors have been properly introduced features of the internal control and risk
• development of Marimekko’s strategy as to the operations of the company. management systems pertaining to
well as confirming strategic objectives the financial reporting process, which
for the various business areas Board committees is included in the company’s corporate
• strategic development of the The Board of Directors elected by the governance statement
international expansion of the store AGM on 8 April 2020 appointed an Audit • monitoring the statutory audit of the
network and e-commerce and Remuneration Committee from financial statements and consolidated
• development of Marimekko’s among its members. Elina Björklund was financial statements
sustainability strategy elected as Chairman and Mikko-Heikki • evaluating the independence of the
• strategic development of the product Inkeroinen and Catharina Stackelberg- statutory auditor or audit firm and
portfolio as well as measures to Hammarén as members of the Audit and especially the additional services
increase productivity in the medium Remuneration Committee. offered to the company as well as
term The Board of Directors or the AGM has preparing the proposal for resolution on
• reviewing the design and brand strategy not established any other committees. the election of the auditor

BOARD OF DIRECTORS
Board Independent of the
member company and its significant
Position since shareholders Attendance
Mika Ihamuotila Chairman since 2015 2008 No 9/9
Elina Björklund Vice Chairman since 2015 2011 Yes 9/9
Rebekka Bay Member 2017 Yes 5/5¹
Arthur Engel Member 2011 Yes 9/9
Mikko-Heikki Inkeroinen Member 2015 Yes 9/9
Helle Priess Member 2017 Yes 9/9
Catharina Stackelberg-Hammarén Member 2014 Yes 9/9

¹ Resigned from the Board on 2 June 2020.

AUDIT AND REMUNERATION COMMITTEE

Committee Independent of the
member company and its significant
Position since shareholders Attendance
Elina Björklund Chairman since 2015 2015 Yes 5/5
Mikko-Heikki Inkeroinen Member 2017 Yes 5/5
Catharina Stackelberg-Hammarén Member 2015 Yes 5/5
82 CORPORATE GOVERNANCE STATEMENT 2020

• monitoring and assessing how related and CEO. The Management Group has financial year 2020: 500 shares. Shares
party transactions are part of the no authority based on law or the Articles and share-based rights in the company
company’s ordinary course of business of Association. The Management Group owned by a corporation over which the
and according to market terms reviews business operational matters and director exercises control, and ownership
• reviewing, overseeing and verifying procedures affecting the entire Group. of shares and share-based rights in Group
outcomes of management The Management Group also reviews the companies at the end of the financial year
compensation plans and programs. operating plans of the different business 2020: 0.
The Chairman of the Audit and areas and the development of business
Remuneration Committee approves a operations. Sanna-Kaisa Niikko, Chief Marketing Officer,
budget for travel and entertainment from 8 October 2020
expenses of the Chairman of the Board Elina Anckar, Chief Financial Officer, • Born 1986
and monitors the expenses. from 11 December 2015 • BA (English)
In 2020, the Audit and Remuneration • Born 1968 • Ownership of shares and share-based
Committee held five meetings. The • M.Sc. (Econ.) rights in the company at the end of the
Committee members’ attendance rate at • Ownership of shares and share-based financial year 2020: 50 shares. Shares and
meetings was 100 percent. rights in the company at the end of share-based rights in the company owned
the financial year 2020: 1,190 shares. by a corporation over which the director
President and CEO Shares and share-based rights in the exercises control, and ownership of shares
The Board of Directors elects the company owned by a corporation over and share-based rights in Group companies
President and CEO and decides on which the director exercises control, at the end of the financial year 2020: 0.
the terms of the President and CEO’s and ownership of shares and share-
employment. The terms are specified in based rights in Group companies at the Morten Israelsen, Chief Sales Officer,
a written contract which is approved by end of the financial year 2020: 0. until 16 October 2020
the Board of Directors. The President • Born 1973
and CEO is responsible for the day-to- Rebekka Bay, Creative Director, • M.Sc. (Econ.)
day management and development of from 1 September 2020 • Ownership of shares and share-based
the company in accordance with the • Born 1969 rights in the company on 16 October 2020:
instructions and orders of the Board of • BA (Hons) in Fashion 0. Shares and share-based rights in the
Directors. The President and CEO is also • Ownership of shares and share-based company owned by a corporation over
responsible for keeping the Board up to rights in the company at the end of which the director exercises control, and
date with regard to the development of the financial year 2020: 2,304 shares. ownership of shares and share-based rights
the company’s business operations and Shares and share-based rights in the in Group companies on 16 October 2020: 0.
financial situation. company owned by a corporation over
which the director exercises control, Tanya Strohmayer, Human Resources
Tiina Alahuhta-Kasko, President since and ownership of shares and share- Director, from 10 February 2017
9 April 2015, President and CEO since based rights in Group companies at the • Born 1970
11 April 2016 end of the financial year 2020: 0. • BBA (Political Science, International
• Born 1981 Business)
• M.Sc. (Econ.), CEMS MIM Tina Broman, Chief Supply Chain and • Ownership of shares and share-based
• Ownership of shares and share-based Product Officer, from 2 October 2017 rights in the company at the end of the
rights in the company at the end of the • Born 1969 financial year 2020: 724 shares. Shares and
financial year 2020: 28,830 shares. • Degree in women’s tailoring and textile share-based rights in the company owned
Shares and share-based rights in the art by a corporation over which the director
company owned by a corporation over • Ownership of shares and share-based exercises control, and ownership of shares
which the director exercises control, rights in the company at the end of the and share-based rights in Group companies
and ownership of shares and share- financial year 2020: 160 shares. Shares at the end of the financial year 2020: 0.
based rights in Group companies at the and share-based rights in the company
end of the financial year 2020: 0. owned by a corporation over which Dan Trapp, Chief Sales Officer,
the director exercises control, and from 2 November 2020
The Board of Directors has not ownership of shares and share-based • Born 1975
appointed a deputy to the President and rights in Group companies at the end of • Ownership of shares and share-based
CEO. the financial year 2020: 0. rights in the company at the end of the
financial year 2020: 0. Shares and share-
Management Group Kari Härkönen, Chief Digital Officer, based rights in the company owned by
The company’s business operations have from 14 December 2017 a corporation over which the director
been divided into different responsibility • Born 1981 exercises control, and ownership of shares
areas. The directors of the different • M.Sc., MBA and share-based rights in Group companies
areas form the company’s Management • Ownership of shares and share-based at the end of the financial year 2020: 0.
Group which is chaired by the President rights in the company at the end of the
 CORPORATE GOVERNANCE STATEMENT 2020 83

Riika Wikberg, Business Development by the Board of Directors, which defines in which they control business operations.
and Transformation Director, from the company’s risk management The President and CEO is responsible
15 February 2018 principles, objectives and responsibilities for the day-to-day management of
• Born 1981 as well as the organization and monitoring the company in accordance with the
• M.Sc. (Econ.), CEMS MIM of the risk management process. instructions and orders given by the Board
• Ownership of shares and share-based Marimekko’s risk management aims of Directors. The President and CEO shall
rights in the company at the end of the to safeguard the smooth continuity of see to it that the accounts of the company
financial year 2020: 270 shares. Shares business operations and ensure stable are in compliance with the law and that its
and share-based rights in the company profit development for the company. financial affairs are arranged in a reliable
owned by a corporation over which Comprehensive risk management is manner.
the director exercises control, and an ongoing, systematic process which The duty of the Management Group
ownership of shares and share-based involves identifying and evaluating key members is to define internal control
rights in Group companies at the end of risks associated with the company’s instructions and operating principles
the financial year 2020: 0. operations and operating environment. related to their area of responsibility and
The key risks comprise risks which could to communicate them to the personnel.
INTERNAL CONTROL AND RISK prevent the company from exploiting The financial and business control
MANAGEMENT IN THE MARIMEKKO business opportunities or jeopardize or functions support the development of
GROUP prevent the achievement of the strategic operational controls and monitor the
objectives of the Group or a Group adequacy and efficiency of the controls.
Internal control company, or the continuity of operations They are also responsible for the
Marimekko applies internal control or would otherwise have significant accuracy, timeliness and compliance with
principles and an operating plan to consequences for the company, applicable laws and regulations of external
support the execution and monitoring of its personnel or stakeholders. Risk reporting.
internal control. In the Marimekko Group, management is an integral element of the
internal control is a process, for which the company’s management and decision- Internal control and risk management
Board of Directors and the President and making process, covering all of the related to the financial reporting process
CEO are responsible. The objective of Group’s functions. Internal control related to the financial
internal control is to provide reasonable Risk reporting is an integral element of reporting process is part of Marimekko’s
assurance that: Marimekko’s annual business planning and overall internal control and risk
• operations are effective and aligned strategy process. Internal risk reporting management framework. The objective
with strategy is part of regular, continuous business of internal control and risk management
• financial and operational reporting is reporting, short-term business planning related to the financial reporting process
reliable and the decision-making process. The is to ensure
• the Group is in compliance with company reports its key risks and risk • reliable financial reporting that supports
applicable laws and regulations management measures annually in internal decision-making and serves the
• the Code of Conduct and ethical values the report of the Board of Directors needs of the shareholders
are established. and quarterly in interim reports, and in • compliance with laws and regulations,
The Board of Directors focuses compliance with corporate governance and the company’s internal policies.
on increasing shareholder value and, principles, laws and regulations. Individual The consolidated financial statements
in accordance with good corporate reports may also be published whenever of the Group are prepared in accordance
governance, ensures that principles of necessary. with the International Financial Reporting
internal control exist within the company. Standards (IFRS). The notes to the
The Audit and Remuneration Committee is Roles and responsibilities consolidated financial statements also
responsible for monitoring the efficiency The Board of Directors is ultimately comply with the Finnish Accounting Act
of internal control and risk management. responsible for the administration of the and Companies Act. Any adjustments are
The system of internal control of company and the appropriate organization made in accordance with the notes to the
Marimekko Corporation is based on the of its operations. The Board approves the financial statements.
Committee of Sponsoring Organizations’ internal control, risk management and The development of the company’s
(COSO) framework, which consists of five corporate governance policies. business and achievement of financial
key components: control environment, risk The Audit and Remuneration goals are monitored through a Group-wide
assessment, control activities, information Committee is responsible for the financial reporting process. Sales reports
and communication, and monitoring. The appropriate arrangement of the control of are prepared daily, weekly or monthly, as
components and their relation to control the company accounts and finances and applicable. Consolidated profit and loss
over financial reporting are presented in monitors the efficiency of internal control and balance sheet reports are prepared
more detail later in this statement. and risk management systems. monthly. The President and CEO reports
The President and CEO sets monthly, quarterly and annual financial
Risk Management the ground for the internal control statements as well as other items
Marimekko’s risk management is guided environment by instructing the specified in the Board’s rules of procedure
by the risk management policy approved management and monitoring the manner to the Board of Directors.
84 CORPORATE GOVERNANCE STATEMENT 2020

The Group discloses information on Control activities Information and communication

its business development and financial Control activities are the policies, The communication of controls and
situation in quarterly interim reports, the systems and other procedures that control procedures is an essential part
half-year financial report and the financial help Marimekko’s management to of internal control related to the financial
statements bulletin. ensure the effectiveness, efficiency and reporting process at Marimekko.
reliability of the company’s operations. The people responsible for financial
Control environment Controls also help to ensure that the reporting in subsidiaries and the parent
An internal control environment is the risks threatening the achievement of company are involved in the assessment
foundation of Marimekko’s internal the company’s objectives are managed of risks associated with financial
control. It influences the control appropriately. reporting and the defining of controls.
consciousness of the organization The control points defined in the risk The Group’s common control points
and forms the basis for other internal assessment for the financial reporting have been communicated to all involved
control components. process are in place at all levels of the in the reporting process. The parent
The internal control environment Group to ensure that applicable laws, company’s financial function supports
encompasses the ethical values, internal procedures and ethical values the implementation of the controls in the
competence and development of the are adhered to. Directors of the various subsidiaries through regular guidance
company’s personnel, the management’s functions are responsible for following and monitoring.
operating style and way of assigning developments in legislation in their The Group has instructions for
authority and responsibility, as well as the respective areas and communicating financial reporting and the instructions
guidelines and approval policy set by the changes to the organization. The are updated regularly. Accounting
Board of Directors. directors are also responsible for principles and reporting instructions are
The internal control environment of setting up adequate compliance communicated to all people involved.
Marimekko’s financial reporting process controls and organizing related training
encompasses the instructions that in their functions. Moreover, process Monitoring
the company has prepared in order to controls have been defined for the Monitoring of controls is a way to assess
harmonize processes and procedures. most significant business and reporting the efficiency and effectiveness of
To ensure consistency of accounting processes. control activities on an ongoing basis.
practices of subsidiaries, a common Marimekko’s consolidated financial Monitoring can be done continuously as
chart of accounts is in use in the Group. statements include the accounts of the part of day-to-day work or as separate
Moreover, Group-wide accounting parent company Marimekko Corporation evaluations.
principles are applied in the financial and its subsidiaries. Marimekko The Board’s Audit and Remuneration
statements, and the Board of Directors Corporation’s subsidiaries report to the Committee carries out its supervisory
approves the accounting principles to be parent company monthly and quarterly duties by monitoring the reporting
applied. and during the preparation of the process of interim reports and financial
consolidated financial statements. The statements and by evaluating the
Risk assessment financial statements of the subsidiaries adequacy and appropriateness of
At Marimekko, risks are identified are prepared in accordance with local internal control and risk management
as part of the annual strategy and accounting standards; the subsidiaries related to the financial reporting
operational planning. Risk management do not apply IFRS in their financial process. Managers are responsible for
actions, responsible persons and an statements. The adjustments required continuously monitoring the internal
implementation schedule are determined under IFRS are made at the Group level. control system for the financial
for the identified and monetized risks. Risk The company’s financial function reporting process as part of operational
identification is updated quarterly when is responsible for preparing the monitoring. Monitoring can also be
preparing the interim reports. consolidated financial statements conducted by the parent company’s
Marimekko’s strategic and operational based on the financial statements of the financial function. Ongoing monitoring
objectives form the basis for risk subsidiaries. The Chief Financial Officer includes regular management activities
identification. The aim is to identify risks and the business control function review and other tasks carried out by the
threatening the achievement of the the figures of the parent company and personnel while performing their duties.
company’s objectives. Risk analyses the subsidiaries and analyze the reasons The scope and frequency of separate
and assessments are conducted as for any deviations in order to assure evaluations depend primarily on risk
self-assessments. the reliability of financial reporting. assessments and the effectiveness
Control objectives and common In addition, the company’s financial of ongoing monitoring procedures.
control points have been defined for function reviews the income statement The detected deficiencies in internal
the identified risks associated with the and the balance sheet before submitting control of financial reporting process
Group’s financial reporting process. them to the Board of Directors. are reported upwards; the most serious
Examples of control points are internal The Board of Directors approves the deficiencies are reported to the top
policies and authorization practices, interim reports, the half-year financial management and the Board of Directors.
reconciliations, verifications and report, the financial statements bulletin, Other Group monitoring activities
segregation of duties. and the financial statements. include administrative and legal
 CORPORATE GOVERNANCE STATEMENT 2020 85

guidance, defining responsibilities company’s financial statements. Material are required to notify the company
and authorities as well as monitoring related party transactions are disclosed and the Finnish Financial Supervisory
and analyzing the achievement of the in accordance with the Securities Market Authority of every transaction conducted
organization’s objectives. Moreover, the Act. on their own account relating to the
effectiveness of the risk management financial instruments of Marimekko. The
system is controlled as part of Group Insider administration company publishes the information it
monitoring activities. Marimekko Corporation’s insider policy, has received in a stock exchange release
based on the Guidelines for Insiders promptly after receipt of the notification.
OTHER INFORMATION TO BE of Nasdaq Helsinki Ltd and the Market Each manager shall identify the persons
PROVIDED IN THE CORPORATE Abuse Regulation, describes the main closely associated with them and notify
GOVERNANCE STATEMENT obligations of insiders in the company as the company in writing of the names
well as the trade reporting of managers of such persons and other required
Internal audit and their closely associated persons, and information. The respective obligations
Considering the nature and extent of other related regulations and guidance also apply to persons closely associated
the company’s business, Marimekko under the Market Abuse Regulation. The with the managers.
has not found it necessary to establish Board of Directors confirms the insider Marimekko applies a closed period of
a separate internal audit function. The policy. 30 days before the publishing of annual
Audit and Remuneration Committee The company draws up and maintains and interim results. During the closed
monitors and evaluates the level of a list of all persons who have access to period, the members of the Board of
internal control and reports this to inside information and who work for the Directors and Management Group are
the Board of Directors at least once a company under a contract of employment, prohibited from trading in Marimekko
year. The Board confirms the level of or otherwise perform tasks through which shares or other financial instruments
the company’s internal control. Where they have access to inside information. linked to the company. The closed period
necessary, the Board may purchase Marimekko has decided not to maintain a also applies to persons participating in
internal audit services from an external list of permanent insiders. Consequently, the preparation of interim reports and
service provider. all persons having inside information financial statements and to persons
are entered in a project-specific insider determined by the company to have,
Related party transactions list established and maintained for all based on their position or access rights,
The company adheres to the projects that involve inside information. regular access to unpublished financial
responsibilities set out in the Finnish The decision to establish a project- information.
Companies Act and the Corporate specific insider list is taken simultaneously The General Counsel of the company
Governance Code when monitoring with the decision to delay disclosure is responsible for insider administration.
and evaluating related party of inside information. Project-specific The company’s employees may report
transactions. The rules of procedure insider lists are not public. The company’s actual or potential infringements of
for the Board of Directors and the insider administration is responsible for the insider policy or financial market
Audit and Remuneration Committee maintaining the insider lists. Persons regulation in accordance with the internal,
of the company describe the duties entered in a project-specific insider list of anonymous procedure of the company.
and responsibilities connected with Marimekko are not allowed to trade in the
related party transactions. The Board company’s financial instruments during Auditing
of Directors evaluates and monitors the term of the project. KPMG Oy Ab, Authorized Public
transactions concluded between the Preparation of periodic disclosure Accountants, has acted as the company’s
company and its related parties and (interim reports, half-year financial auditor, with Virpi Halonen, Authorized
ensures that any conflicts of interest report, financial statements bulletin) or Public Accountant, as the auditor with
are taken into account appropriately in regular access to unpublished financial principal responsibility, since 12 April 2018.
the decision-making of the company. information is not regarded as an insider In 2020, the remuneration paid for audit
The company keeps a list of the related project, nor does the company resolve to services amounted to EUR 97 thousand.
parties. Related party transactions delay disclosure of information in relation The remuneration paid to the auditor for
that are not concluded in the ordinary thereto. However, due to the sensitive non-audit services in 2020 totaled EUR 29
course of business or on customary nature of unpublished information on the thousand.
commercial terms are subject to company’s financial results, the company
approval by the Board of Directors. The maintains a list of persons who have Helsinki, 18 February 2021
company’s financial function monitors authorized access to unpublished financial
related party transactions as part of the information and a closed period before Marimekko Corporation
normal quarterly control and reporting the publishing of annual and interim Board of Directors
procedure and reports related party results. Trading in the company’s financial
transactions to the company’s Audit instruments is always prohibited when a
and Remuneration Committee. Related person holds inside information. The members of the Board of Directors
party transactions are disclosed as The members of the Board of Directors and Management Group are presented
required annually in the notes to the and the Management Group of Marimekko in detail on the company's website.
86

Remuneration
report 2020

This remuneration report states how digital business, a comprehensive lifestyle The President and CEO’s earning
Marimekko Corporation has implemented product portfolio, a diverse business and opportunities are based to a considerable
its remuneration policy in the financial distribution channel model, and the ability extent on long-term bonus plans.
year 2020. The report includes to quickly adapt operations are among In the financial year 2020, the
information concerning remuneration of the factors that enabled the company to company’s decision-making in regard
the Board of Directors and the President successfully navigate in a very difficult to remuneration was compliant with the
and CEO of Marimekko between 1 January operating environment. processes defined in the remuneration
2020 and 31 December 2020. The Despite the impacts of the pandemic, policy. The Board has not deviated from
remuneration report has been prepared Marimekko’s net sales almost reached the remuneration policy temporarily
in accordance with the requirements of the level of the previous year: net sales during 2020 and has not identified a need
the Shareholders’ Rights Directive (EU only declined by 1 percent and were EUR to apply clawback provisions to variable
2017/828). In Finland, the requirements 123.6 million (2019: 125.4). Net sales remuneration paid.
of the directive have mainly been were weakened especially by a decline In 2020, Marimekko had short-term
implemented in the Limited Liability in retail sales in Finland, North America and long-term bonus systems in place
Companies Act (624/2006, as amended), and Scandinavia as well as a decrease in for the President and CEO. Under the
the Securities Markets Act (746/2012, wholesale sales in the Asia-Pacific region. long-term bonus system, the earnings
as amended), the Decree of the Ministry Booming online sales, which supported periods 1 April 2018–30 September 2021
of Finance (608/2019) and the Finnish retail sales, as well as a favorable trend in and 1 April 2018–31 January 2022 were
Corporate Governance Code 2020. wholesale sales in Finland, Scandinavia in place during the financial year 2020.
The remuneration report has been and EMEA, on the other hand, had a For both periods, the bonus is based
prepared for review by the company’s positive impact on net sales. The increase on the company’s total shareholder
Audit and Remuneration Committee, and in Finnish wholesale sales was partly due return including dividends. The purpose
the Board has approved it for submission to nonrecurring promotional deliveries. of the short-term bonus is to promote
to the General Meeting. The shareholders Comparable operating profit rose the company’s strategy through the
will make an advisory decision on the to EUR 20.2 million (17.1), and reported achievement of annual targets. In 2020,
approval of the remuneration report at the operating profit was EUR 19.3 million the performance criteria were based
2021 Annual General Meeting. (17.1). Earnings were boosted by a on the company's net sales growth and
noticeable decrease in fixed costs as a improvement in operational result. In
INTRODUCTION result of Marimekko’s prompt adjustment addition, the President and CEO had
measures. A decline in relative sales personal targets relating to the company's
Overview of remuneration in the margin, which was mainly due to higher strategic projects, which also included
financial year 2020 logistics costs resulting from an increase sustainability-related metrics. Due to the
The remuneration of Marimekko’s in online sales, as well as reduced net coronavirus pandemic, the performance
governing bodies is based on the sales had a weakening impact on results. criteria were adjusted by increasing the
company’s remuneration policy that The remuneration applied in weighting of operational result compared
was presented for an advisory decision accordance with the current remuneration to net sales growth and by removing the
at the AGM held on 8 April 2020. The policy in 2020 has supported the strategic objectives, because the Board
remuneration policy will be applied until company’s financial and strategy-based wanted to encourage the President
the 2024 AGM, unless the Board decides targets and goals. The remuneration and CEO to safeguard the company's
to bring a revised policy for an advisory has established a strong link between profitability in the exceptional situation
decision at an earlier General Meeting. the President and CEO and shareholder caused by the pandemic as well as to
In 2020, the coronavirus pandemic interests by tying a significant portion focus on managing the crisis created
caused the global fashion industry and of the President and CEO's total earning by the pandemic and on mitigating its
specialty retail sector the worst crisis opportunity to performance-based effects. The targets set by the Board
in decades. Long-term work to develop incentives derived from the company's and adjusted due to the coronavirus
the Marimekko brand and the company’s financial targets and operational metrics. pandemic were achieved at a rate of
 REMUNERATION REPORT 2020 87

around 93 percent. Application of performance criteria and the long-term bonus system are described in
more detail in section Remuneration of the President and CEO in this report.
The total remuneration paid to the President and CEO in the financial year 2020 was EUR 442,796
(413,434).

Development of financial performance and remuneration at Marimekko

Development of financial performance in 2016–2020
Over the past five years, the company has, in accordance with its strategy, developed its brand and
collections in order to appeal to a broader customer base and continued its international growth strategy.
This has been approached through major cities with a focus on Asian partner markets and omnichannel
operations. Commercial concepts and marketing have been developed consistently, with sustainability
playing a more central role year by year. The systematic implementation of the international growth
strategy is reflected in the trend in the company’s financial performance.

Net sales Comparable operating profit

EUR million EUR million

140 25
125.4 123.6
111.9 20.2
120
102.3 20
99.6 17.1
100
15
80 12.2

60 8.6
10
40 6.1
5
20

0 0
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

Return on equity Share price trend 2016–2020

% EUR
50 50

38.8
40 40
33.0
30.0
30 30

19.2
20 20
14.5

10 10

0 0
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
88 REMUNERATION REPORT 2020

Development of remuneration in 2016–2020

Remuneration of the President and CEO

(EUR 1,000) 2016 2017 2018 2019 2020
Fixed salary + benefits 232 252 292 321 341
Short-term bonus - 63 38 92 101
Long-term bonus - - 73 - -
Total remuneration 232 316 403 413 443

Change from the previous year, %
Fixed salary + benefits 9 16 10 6
Total remuneration 38 28 2 7

Tiina Alahuhta-Kasko served as President until 11 April 2016; since 11 April 2016, she has served as President and CEO. In 2016,
Mika Ihamuotila was paid a monthly fee until 11 April under a separate CEO agreement, totaling EUR 90 thousand.

Annual remuneration of Board members

(EUR 1,000) 2016 2017 2018 2019 2020
Remuneration of Chairman¹, EUR 40 40 40 48 48
Change from the previous year, % 0 0 20 0

Remuneration of Vice Chairman, EUR 30 30 30 35 35
Change from the previous year, % 0 0 17 0

Remuneration of other members, EUR 22 22 22 26 26

Change from the previous year, % 0 0 18 0

¹ In addition to the annual remuneration, in 2016–2018, Mika Ihamuotila was paid a fee under a separate service agreement based on the
Chairman’s full-time duty; since 2019, the duty has been on a half-time basis.

Average remuneration of employees

2016 2017 2018 2019 2020
Change in average annual remuneration, % 1.6 0.6 4.0 1.7 4.8

The change in an employee’s average remuneration is based on the average of the remuneration of employees receiving monthly salaries
and that of employees receiving hourly wages, taking account of the number of persons in these employee categories.

Remuneration of the President and CEO by element

EUR 1,000

500

400

300

200

100

0
2016 2017 2018 2019 2020

Fixed salary
Short-term bonus
Long-term bonus
 REMUNERATION REPORT 2020 89

REMUNERATION OF THE BOARD fees. As a rule, the Board receives no 4,400 has been paid to Mika Ihamuotila
IN 2020 other financial benefits besides the fixed for half-time duty pursuant to a separate
annual fee. Marimekko has not granted service agreement. No other fees
On 8 April 2020, the AGM decided any loans or guarantees to the Board besides the annual remuneration of the
that approximately 40 percent of the members, or other contingent liabilities on Chairman of the Board and the monthly
2020 annual remuneration of the Board their behalf. fee paid under a separate service
members be paid in Marimekko shares The 2020 AGM decided on the annual agreement have been paid to Mika
acquired from the market and the rest fees to be paid to the Board members as Ihamuotila. The pension benefits are
in cash. The remuneration was paid follows: EUR 48,000 to the Chairman, determined by the Employees’ Pensions
entirely in cash if a Board member on the EUR 35,000 to the Vice Chairman and Act (TyEL). The company’s Audit and
date of the AGM, 8 April 2020, held the EUR 26,000 to the other members of the Remuneration Committee considers and
company's shares worth more than EUR Board. No additional fee is paid to the prepares matters related to the terms
1,000,000. According to the decision Board members for participating in Board and conditions of the separate service
of the AGM, the shares were acquired meetings. The AGM also decided on a agreement and to the remuneration.
directly on behalf of the Board members separate fee to be paid for committee
within two weeks following the release of work as follows: EUR 2,000 per meeting
the interim report for the period 1 January to Chairman and EUR 1,000 per meeting
to 31 March 2020, or, if this was not to members.
possible due to insider rules, as soon as In addition to the annual remuneration
possible thereafter. There are no specific of the Chairman of the Board decided
rules for owning shares received as Board on by the AGM, a monthly fee of EUR

Fees paid to the Board members in the financial year 2020

Number of shares
Role/ Annual received as part
Committee remuneration, of annual Committee Other Total,
Board member membership EUR remuneration fees, EUR fees, EUR EUR
Rebekka Bay² 10,385.15 458 - - 10,385.15
Elina Björklund Vice Chairman
of the Board,
Chairman of the Audit
and Remuneration
Committee 35,000 617 12,000 - 47,000
Arthur Engel 26,000 458 - - 26,000
Mika Ihamuotila Chairman of the Board 48,000 - - 53,040³ 101,040
Mikko-Heikki Inkeroinen Member of the Audit and
Remuneration Committee 26,000 458 6,000 - 32,000
Helle Priess 26,000 458 - - 26,000
Catharina Stackelberg- Member of the Audit and
Hammarén Remuneration Committee 26,000 458 6,000 - 32,000

² The Board membership of Rebekka Bay ended on 2 June 2020. In September 2020, she started as the company’s Creative Director
and member of the Management Group. Her remuneration for Board membership was paid entirely in shares; she did not receive any
remuneration in cash.
³ Fee paid to Mika Ihamuotila for half-time duty pursuant to a separate service agreement.
90 REMUNERATION REPORT 2020

REMUNERATION OF THE PRESIDENT Under the long-term bonus system, approximately to the value of her fixed
AND CEO IN 2020 the earnings periods 1 April 2018–30 gross annual salary. Potential bonuses will
September 2021 and 1 April 2018–31 be paid in fall 2021 and spring 2022.
Application of performance criteria January 2022 were in place during the The performance criteria for the
and bonuses earned in the financial financial year 2020. For both periods, the short-term bonus in 2020 were based
year 2020 bonus is based on the company’s total on operational result and net sales
In 2020, Marimekko had performance- shareholder return including dividends. The development metrics adjusted due to the
based short-term and long-term bonus bonus is planned to be paid half in company coronavirus pandemic. The President and
systems in place for the President and shares and half in cash. The shares CEO’s maximum bonus under the short-
CEO. The objective of the long-term received as part of the bonus are subject to term bonus system corresponds to her
bonus system is to align the interests a two-year transfer restriction. Receiving fixed gross salary for four months. The
of the President and CEO and the the bonus requires that the President and targets set by the Board were achieved
shareholders in the long term. The CEO’s employment agreement is in force at a rate of around 93 percent, and the
purpose of the short-term bonus is to at the time of the payment. The President President and CEO’s bonus earned in the
promote the company’s strategy through and CEO’s maximum annual bonus for financial year 2020 was EUR 100,241. The
the achievement of annual targets. both earnings periods corresponds bonus will be paid in spring 2021.

Long-term bonus system in place in the financial year 2020

Share price Criteria Number
Board on decision outcome (out of shares Payment Share price
Earnings decision date, Earnings (of maximum received in in cash, Payment on payment
period date EUR criteria level) payment EUR date date, EUR
1 Apr. 2018– 14 Feb. 2018 10.10 Total To be - - In fall -
30 Sept. 2021 shareholder confirmed 2021
return incl. in fall 2021
dividends

1 Apr. 2018– 14 Feb. 2018 10.10 Total To be - - In spring -
31 Jan. 2022 shareholder confirmed 2022
return incl. in spring 2022
dividends

Remuneration paid to the President and CEO in the financial year 2020

Fixed salary + Short-term Long-term Additional
benefits bonus4 bonus5 pension Other fees Total remuneration
341,462.27 101,333.32 - - - 442,795.59

4
Earned based on performance in the financial year 2019, paid in 2020.
5
No long-term bonus earning periods with payments due in 2020.

Structure of the remuneration paid to

the President and CEO in 2020

23%

77%

Fixed salary
Short-term bonus
91
92

Information for
shareholders

Annual General Meeting Dividend for 2020

The Annual General Meeting of The Board of Directors proposes that the
Schedule for financial reporting
Marimekko Corporation will be held on AGM on 14 April 2021 authorize the Board
in 2021
Wednesday 14 April 2021 at 2.00 p.m. to decide on the payment of a maximum
(EEST). The meeting will be organized dividend of EUR 1.00 per share in one
• financial statements bulletin 2020,
at the headquarters of Marimekko at or several instalments at a later stage.
Thursday 18 February 2021
Puusepänkatu 4, 00880 Helsinki, Finland The authorization would be valid until the
by virtue of extraordinary meeting next AGM. The company will publish the
• financial statements 2020,
procedures without shareholders’ or their possible decision on dividend payment
week 12 at the latest
proxy representatives’ presence. separately and, at the same time, confirm
It will not be possible to attend the the pertinent record and payment dates.
• interim reports and half-year
meeting on site. To reduce the spread
financial report
of the coronavirus, the company has Financial reports
• January–March,
resolved to implement measures enabled Marimekko Corporation’s financial
Thursday 20 May 2021
by a temporary legislative act (677/2020) statements as well as interim reports and
• January–June,
in order for the AGM to be convened half-year financial report are published
Thursday 19 August 2021
in a foreseeable manner taking into in Finnish and English. Printed financial
• January–September,
consideration the health and safety of the statements are sent upon request to
Wednesday 3 November 2021.
shareholders, the company’s employees the address provided by the subscriber.
and other stakeholders. Shareholders Financial information is posted on the
Silent period
and their proxy representatives can only company’s website under Releases and
participate in the AGM and exercise the publications.
Marimekko has a four-week silent
shareholder’s rights by voting in advance
period before the publication of
as well as by submitting counterproposals Contacts
earnings reports.
and asking questions in advance in Marimekko Corporation
accordance with the instructions available Corporate Communications
in the notice of the meeting. Tel. +358 9 758 71
Shareholders who on the record company.marimekko.com/contacts
date for the AGM, 31 March 2021, are
registered in the shareholders’ register of
the company, held by Euroclear Finland
Oy, have the right to participate in the
AGM. A shareholder whose shares are
registered on their personal Finnish
book-entry account is registered in the
shareholders’ register of the company.
A shareholder who is registered in the
shareholders’ register of the company and
wishes to participate in the AGM by voting
in advance shall register for the meeting
and vote in advance on Wednesday
7 April 2021 before 4.00 p.m. (EEST) at
the latest as stipulated in the notice of
the AGM. Registration without submitting
advance votes will not be considered as
participation in the AGM.
marimekko.com