Segments (EURm) Q3/21 Q3/20 yoy 9m/21 9m/20 yoy
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Supermarkets 142,5 134,5 5,9% 417,6 381,0 9,6%
Department stores 21,9 22,0 -0,4% 60,7 59,4 2,1%
Cars 38,2 34,7 10,2% 116,2 92,5 25,6%
Security segment 2,2 1,5 42,3% 5,8 4,0 45,9%
Real Estate 1,4 1,4 -2,9% 3,8 3,7 2,4%
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Total sales 206,2 194,2 6,2% 604,1 540,7 11,7%
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Supermarkets 7,8 4,4 77,4% 14,2 12,0 17,7%
Department stores -0,1 -0,2 -50,0% -1,0 -2,3 -57,8%
Cars 2,4 1,0 136,5% 5,8 1,8 222,8%
Security segment 0,1 0,0 140,6% 0,1 0,0 775,0%
Real Estate 3,1 2,9 7,2% 8,0 7,5 7,1%
IFRS 16 -0,8 -0,7 4,0% -2,5 -1,7 46,8%
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Total profit before tax 12,6 7,4 69,1% 24,6 17,3 42,2%
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In the third quarter of 2021, the consolidated unaudited sales revenue of the
Group was 206.2 million euros, which was 6.2% more than the sales revenue of the
same period in 2020. The sales revenue in the nine months was 604.1 million
euros, which was an 11.7% increase in comparison with the result of the first
nine months of 2020, when the sales revenue was 540.7 million euros. In the
third quarter of 2021, the Group's unaudited consolidated net profit was 12.6
million euros, which was 69.1% higher than the profit of the comparable period
in the previous year. The Group's net profit of the first nine months of 2021
was 20.3 million euros, which was 76.4% higher than the result of the comparable
period in the previous year. In the first nine months, the pre-tax profit was
24.6 million euros, increasing by 42.2% compared to the year before. Net profit
was affected by the dividend payment, from which 4.3 million euros of income tax
was calculated in the first quarter of 2021; 5.8 million euros of income tax was
calculated a year before.
The sales result of the third quarter of 2021 was probably affected most by the
favourable situation in the Estonian retail market. Those consumers, who had
stayed away from stores during the coronavirus restrictions in spring, returned,
and active use of the funds from the second pension pillar, which became
available due to the pension reform in Estonia, increased the sales of durable
goods explosively. The strong sales results of the Selver segment and the car
segment in the third quarter also accelerated the growth of the Group's sales
revenue. Fast-paced growth of the sales via online channels continued in the
Selver and Kaubamaja department store segments even after the restrictions on
movement were lifted. The major strategic investments made by the Group a year
earlier in the growth of the supermarket segment's store network and the
expansion of the central kitchen have paid off and enabled the successful growth
of supermarket segment sales and gross revenue and increased margins. In the
situation of a car deficit, the Group's car segment also managed to improve its
sales margin. Along with the growth of the store network, maintenance and data
communication costs increased at a comparable pace. Labour costs increased by
8.0% in the third quarter, while the number of employees increased by 3.1%.
The economic result of the first nine months of 2021 was affected by the
restrictions established to prevent the spread of the coronavirus in the second
quarter. Those mainly affected the stores of the Kaubamaja department store
segment, with most of those stores closed for seven weeks. The fashion and
industrial goods departments of the Kaubamaja department store segment, all
I.L.U. stores, as well as the ABC King and SHU shoe stores were closed for
visitors. Even though, based on an application submitted by the Group, the state
covered the employees' remuneration and, within the framework of the
entrepreneurship support package, the Group's operating expenditure in the
extent of 1.6 million euros in total (in the year before, the amount of national
aid for the operations reached 1.3 million euros), the Kaubamaja department
store segment is still earning a loss over the nine months in total.
In the third quarter of this year, Selver renovated the Jaamamõisa store. In the
Kaubamaja department store segment, the Beauty department and Food department of
the Tallinn department store were renovated, with the Food department in Tallinn
closed fully for the renovation works on 25 June and reopened in renovated form
on 26 August. Both of the renovated sections have been accepted well by the
customers. In September, the Group notified the stock exchange of the strategic
decision to close the footwear business and to gradually close all ABC KING and
SHU stores over the following year.
One of the most significant large-scale developments of the Group was finished
in the first nine months of 2021 - the completion of the new production building
of the central kitchen of Kulinaaria OÜ with the renovation of the previous
factory and the connection of the two production buildings. The most extensive
innovation in the first quarter was the transfer of stores operating under the
Comarket brand to the Selver ABC brand and the integration of Comarket, Delice
stores, and the Solaris Food Store with the Selver supply chain and IT systems.
Updating the software platform of the Selver online stores also commenced in the
first quarter and was fully completed by the end of the third quarter. As of 1
June 2021, the service area of the e-Selver online store service covers all of
Estonia. With this expansion, Selver became the only online grocery store in
Estonia which delivers goods to all counties of mainland Estonia in the entire
extent. Selver has been very actively contributing to the development of e-
commerce in the past six years to be a pioneer in online shopping. One update
allows the customers of e-Selver to track the journeys of their orders on the
map, which is updated at an interval of twenty seconds.
Selver supermarkets
The consolidated sales revenue of the supermarket business segment in the nine
months of 2021 was 417.6 million euros, increasing by 9.6% compared to the
previous year. The consolidated sales revenue was 142.5 million euros in the
third quarter of 2020, increasing by 5.9% in comparison with the same period of
last year. The average monthly sales revenue per square metre of sales area in
the nine months of 2021 was 0.39 thousand euros, exceeding the respective
indicator in the year before by 1.8%. In the third quarter, the respective
indicator was 0.41 thousand euros, which is 6.2% more than in the same period
last year. The average sales revenue per square metre of selling space of
comparable stores was 0.40 thousand euros in the first nine months and 0.41
thousand euros, on average, in the third quarter, growing by 2.1% and 4.6%,
respectively, compared to the year before. In the nine months of 2021, 31.7
million purchases were made from the stores, which was 13.0% more than in the
reference year.
In the third quarter of 2021, both the pre-tax profit and the net profit were
7.8 million euros, increasing by 3.4 million euros in comparison with the same
period the year before. The consolidated pre-tax profit of the supermarkets
segment in the nine months of 2021 was 14.2 million euros, increasing by 2.1
million euros in comparison with the previous year. The net profit of the nine
months was 12.6 million euros, which is an increase of 2.7 million euros in
comparison with the previous year. As of 1 June 2020, the results of the
supermarket segment include the results of ABC Supermarkets.
As Estonian economy as a whole, the supermarket segment was also impacted by the
changes in the purchase behaviour and consumption habits of the customers in
connection with the coronavirus broke out in March 2020, which has resulted in
challenges in operating with the goods and continuously increased the expenses
on the personal protective equipment for the customers and the employees.
Selver's result is affected by the acquisition of ABC Supermarkets in the second
quarter of last year, which increased the number of Selver stores by nineteen
new stores. In February 2021, the sales activities of one of the stores were
terminated and at the end of the half-year, the sales activities will continue
in the eighteen added stores. The comparability of the results is also affected
by the new Selver store opened in July 2020 and by the renovation of one of the
Selver stores in the reference period, the expansion of the sales area of two
stores, and the impact of the leap year. Selver has renovated one store in the
third quarter this year. The store was closed for customers for six weeks due to
the renovation works.
Compared to the same period the year before, which included the significant
increase in e-commerce, the number of orders received by e-Selver has almost
doubled in the nine months. The service area of e-Selver has been expanded in
several stages since the beginning of the year and since June, it covers the
entire mainland Estonia, as well as the largest islands. The service area of e-
Selver is the largest in Estonia and it was declared the most user-friendly
online store in the category of groceries in 2021.
This year, the transfer of the stores operating under the Comarket brand to the
Selver ABC brand was completed and IT software upgrades were made in the Delice
store and Solaris Food Store. In the Delice and Solaris stores, the Delice
Express service is now offered to customers - previously, these stores had self-
service checkouts, but now, customers can make their purchases conveniently by
using barcode scanners. The process bringing the stores together under one brand
and the process of updating the IT software were accompanied by closing the
stores for a few days for replacing the equipment, as well as by one-time
expenses and investments. The work with the assortment of the stores operating
under the Selver ABC trademark, as well as increasing the efficiency of the work
processes including the entire Selver chain, has continued. In the third
quarter, four smaller Selver stores were rebranded under the Selver ABC
trademark. Investments have been made in the popular SelveEkspress service this
year. Additional self-checkout tills have been added to the stores where the
customers' interest in the service has significantly increased, and opening of
the SelveEkspress service in the Selver ABC stores has begun. Expansion of the
SelveEkspress service to the Selver ABC stores will also continue in the last
quarter of the year.
The profit has been significantly affected by the good revenue, especially in
the summer period, when the weather was warm, as well as the faster increase in
labour costs, and the costs of the acquisition of ABC Supermarkets and bringing
the stores under the Selver trademark. The lack of manpower in the labour market
has resulted in wage pressure. A temporary increase in the labour costs was also
caused by the integration of the processes of ABC Supermarket stores into the
Selver solution, higher labour needs in the e-commerce segment, where the
provision of the service is more resource-intensive compared to the physical
store, and higher expenses to cover the increased sick days of employees. The
profit has also been affected by the energy prices, which have occasionally
risen several times above the normal levels.
Selver also plans to renovate another Selver store this year and to further
develop the online store service to meet the persistently high demand. Active
preparations continue in connection with the new Selver stores to be opened in
2022.
Department stores
The sales revenue of the Kaubamaja department stores segment in the nine months
of 2021 was 60.7 million euros, which was 2.1% better than in the comparable
period of the previous year. The sales revenue of the third quarter was 21.9
million euros, which remained 0.4% below the level of the previous year. The
pre-tax loss of the Kaubamaja department store segment in the first nine months
of 2021 was 1.0 million euros, which was 1.3 million euros better than the
result of the previous year, when the loss amounted to 2.3 million euros. The
pre-tax loss of for the third quarter was 0.1 million euros, which is 0.1
million euros better than in the same period last year.
The average sales revenue of the Kaubamaja department stores per square metre of
selling space was 0.24 thousand euros per month in the nine months, which is
0.7% higher than in the same period last year. The sales result of the Kaubamaja
department stores for the nine months was affected by the strict restrictions in
spring, which resulted in the closure of all stores selling industrial goods. As
in the previous year, the Kaubamaja department stores closed all departments of
industrial goods in Tallinn and Tartu for seven weeks (in 2020, they were closed
for six weeks). Only the grocery stores remained open. The fact, that the
customers' demand for summer goods was, compared to the previous year, much
higher after the reopening of the stores, was evident from the discount campaign
in the summer, which proved very successful. The renovation of the Beauty
department and Food department of the Tallinn department store had a negative
impact on the operating profit of the Kaubamaja department store segment, with
the Food department in Tallinn closed fully for the renovation works on 25 June
and reopened in renovated form on 26 August. The opening campaign of the autumn
season and 'Ilu Aeg' (the Time of Beauty campaign) in early September were most
successful for a number of years, which shows, that the customers have accepted
the renovated sections well.
In the third quarter of 2021, the sales revenue of OÜ TKM Beauty Eesti, which
operates I.L.U. cosmetics stores, was 1.5 million euros, which is 17.4% more
than in the same period of 2020. In the third quarter of 2021, profit was 0.1
million euros, which was 0.05 million euros more than during the comparable
period in 2020. The sales revenue in the first nine months of 2021 was 3.5
million euros, which is 7.4% more than in the same period of 2020. In the first
nine months of 2021, profit was 0.1 million euros, which was 0.04 million euros
more than in the comparable period in 2020. The sales revenue in the third
quarter was increased by successful marketing campaigns, the expansion of the
sales areas of several stores at the expense of former hair studios, and the
consumers' preparedness to visit physical stores in the light of the
significantly improved pandemic situation. In the last month of the quarter,
thanks to the funds released from the second pension pillar, there was an
increase in more expensive impulse purchases.
The sales revenue of the shoe stores of TKM King AS, which is being reported
under the Kaubamaja department store segment as of 1 April 2021, was 3.5 million
euros in the nine months of 2021. In comparison with the previous year, the
sales revenue decreased by 28.0% in the same period. In the third quarter, the
sales revenue of the segment was 1.8 million euros, which is 7.3% less than
during the same period in the year before. The loss of the nine months of 2021
was 0.8 million euros, which is an improvement of 0.6 million euros compared to
the loss of the same period in 2020. The loss of the third quarter was 0.3
million euros, which is 0.1 million euros better than loss of the same period of
2020. In September, the Group notified the stock exchange of the strategic
decision to close its footwear business. The Group intends to gradually close
all ABC KING and SHU stores within the next year. Two ABC KING stores (Kristiine
Centre, Port Artur 2), two SHU stores (Ülemiste Centre, Port Artur 2), and the
outlet store in the Magistrali Centre were closed in the second quarter, which
also had an impact on the sales revenue for the reporting period.
Car trade
The sales revenue of the car trade segment was 116.2 million euros in the first
nine months of 2021. The sales revenue was 25.6% higher than the sales revenue
in the same period the year before. The 38.2-million-euro sales revenue of the
third quarter was 10.2% higher than the sales revenue in the third quarter of
2020. In the first nine months, a total of 4,887 new vehicles were sold, of
which 1,581 were sold in the third quarter. The net profit of the segment in the
first nine months of 2021 was 5.5 million euros, exceeding the profit for the
same period of the year before by 4.4 million euros. The pre-tax profit of the
segment for the first nine months of 2021 was 5.8 million euros, exceeding the
profit for the same period in 2020 by 4.0 million euros. The pre-tax profit of
the third quarter of 2021 was 2.4 million euros, which is 1.4 million euros more
than the profit of the same period of the year before.
The improved market environment in the third quarter supported the customers'
increasing interest in purchasing vehicles. The availability of the cars has
turned out to be the key component of the sales success, as the deficiency of
chips and other car components has been causing more or less severe delivery
difficulties for car manufacturers for quite a while. The competent planning of
the stocks in the car segment of the Group has enabled to continue to increase
the sales figures. The volumes of the car maintenance services have been growing
increasingly thanks to the increase in the number of car brands represented by
the Group's car segment. The increased demand has allowed to improve the sales
margin and thereby also the profitability of the segment.
Security segment
The sales revenue earned in the security segment outside the Group was 5.8
million euros in the first nine months of 2021. The sales revenue of the nine
months increased by 45.9% compared to the year before. The sales revenue in the
third quarter was 2.2 million euros, which is 42.3% more than in the same period
last year. The pre-tax profit of the security segment in the first nine months
of 2021 was 0.1 million euros, remaining approximately at the same level
compared to the previous year. The pre-tax profit of the segment in the third
quarter was 0.1 million euros, which is 140.6% higher than in the same period in
2020.
All business areas showed good growth numbers. Profitability has also improved
as a result of the investments and extensions in several areas of activity. The
area of cash transport and fire safety services grew the fastest. Important
emphasis will be placed on technological solutions and digitalisation in the
following quarters. The labour market situation, which has a negative impact on
both growth and margins, remains a major concern.
Real estate
The sales revenue earned in the real estate segment outside the Group was 3.8
million euros in the first nine months of 2021. The sales revenue increased by
2.4% compared to the same period last year. The sales revenue earned in the
segment outside the Group was 1.4 million euros in the third quarter. During the
reference period, sales revenue decreased by 2.9%. The pre-tax profit in the
real estate segment outside the Group was 8.0 million euros in the first nine
months of 2021. Compared to the reference period, the profit increased by 7.1%.
The pre-tax profit earned in the segment was 3.1 million euros in the third
quarter. The pre-tax profit increased by 7.2% in the reference period.
The drop in the sales revenue of the segment in the third quarter reflects with
a delay the impact of the one-time lowering of the rent, which was granted to
the tenants during the period of the restriction on visiting shopping centres in
spring. The restrictions have had a more significant impact on the rental
premises in central Tallinn. The Tartu Kaubamaja centre has recovered quickly
from the restrictions, which were implemented to prevent the spread of the
virus. The same applies to the Viimsi Centre, which was affected most by the
restrictions imposed on leisure centres in the beginning of the year. The
increase in the sales revenue and profit of the segment in the nine months were
supported by renting commercial premises to an external party by the Latvian
real estate company and by the sale of a registered immovable in Saare County.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
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30.09.2021 31.12.2020
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ASSETS
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Current assets
Cash and cash equivalents 12,205 32,757
Trade and other receivables 16,613 15,894
Inventories 73,378 77,334
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Total current assets 102,196 125,985
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Non-current assets
Long-term receivables and prepayments 373 335
Investments in associates 1,868 1,712
Investment property 60,550 60,347
Property, plant and equipment 412,993 388,757
Intangible assets 20,169 20,148
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Total non-current assets 495,953 471,299
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TOTAL ASSETS 598,149 597,284
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LIABILITIES AND EQUITY ,
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Current liabilities
Borrowings 23,324 49,402
Trade and other payables 92,663 102,841
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Total current liabilities 115,987 152,243
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Non-current liabilities
Borrowings 258,601 217,349
Deferred tax liabilities 4,408 4,408
Provisions for other liabilities and charges 278 277
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Total non-current liabilities 263,287 222,034
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TOTAL LIABILITIES 379,274 374,277
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Equity
Share capital 16,292 16,292
Statutory reserve capital 2,603 2,603
Revaluation reserve 100,852 102,630
Currency translation differences -149 -149
Retained earnings 99,277 101,631
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TOTAL EQUITY 218,875 223,007
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TOTAL LIABILITIES AND EQUITY 598,149 597,284
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
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III quarter III quarter 9 months
2021 2020 9 months 2021 2020
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Revenue 206,150 194,181 604,103 540,685
Other operating
income 637 316 1,993 976
Cost of merchandise -150,841 -146,012 -451,143 -409,104
Service expenses -11,687 -11,216 -34,550 -31,362
Staff costs -20,662 -19,139 -62,799 -55,285
Depreciation,
amortisation and
impairment losses -9,559 -9,387 -29,031 -25,249
Other expenses -158 -157 -467 -534
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Operating profit 13,880 8,586 28,106 20,127
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Finance income 0 1 2 1
Finance costs -1,361 -1,204 -3,626 -2,967
Finance income on
shares of associates
accounted for using
the equity method 59 57 156 171
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Profit before tax 12,578 7,440 24,638 17,332
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Income tax expense 0 -1 -4,333 -5,823
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NET PROFIT FOR THE
FINANCIAL YEAR 12,578 7,439 20,305 11,509
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Other comprehensive
income:
Items that will not
be subsequently
reclassified to
profit or loss
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Other comprehensive
income for the
financial year 0 0 0 0
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TOTAL COMPREHENSIVE
INCOME FOR THE
FINANCIAL YEAR 12,578 7,439 20,305 11,509
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Basic and diluted
earnings per share
(euros) 0.31 0.18 0.50 0.28
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
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