Segments (EURm) Q4/21 Q4/20 yoy 12m/21 12m/20 yoy
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Supermarkets 151,4 143,4 5,6% 569,0 524,4 8,5%
Department stores 32,7 29,4 11,4% 93,4 88,8 5,2%
Cars 29,6 25,1 18,1% 145,8 117,6 24,0%
Security segment 2,3 2,0 16,0% 8,2 6,0 35,9%
Real Estate 1,5 1,4 5,1% 5,3 5,1 3,1%
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Total sales 217,5 201,3 8,1% 821,6 741,9 10,7%
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Supermarkets 6,3 3,5 80,3% 20,5 15,5 31,9%
Department stores 0,3 0,9 -69,0% -0,7 -1,4 -50,4%
Cars 1,6 0,4 342,8% 7,4 2,2 242,7%
Security segment -0,1 0,0 100,0% 0,0 0,0 -217,6%
Real Estate 4,1 2,6 56,9% 12,1 10,1 19,9%
IFRS 16 -0,4 -0,8 -46,3% -2,9 -2,4 17,8%
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Total profit/loss before tax 11,9 6,6 78,9% 36,5 24,0 52,3%
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In the fourth quarter of 2021, the consolidated unaudited sales revenue of the
Group was 217.5 million euros, which was 8.1% more than the sales revenue of the
same period in 2020. The sales revenue of 2021 was 821.6 million euros, showing
a growth of 10.7% compared to the result of 2020, when the sales revenue was
741.9 million euros. In the fourth quarter of 2021, the Group's unaudited
consolidated net profit was 11.7 million euros, which was 46.6% higher than the
profit of the comparable period in the previous year. The Group's net profit of
2021 was 32.0 million euros, which was 64.2% higher than the result of the
previous year. The pre-tax profit earned in 2021 was 36.5 million euros, showing
a 52.3% increase compared to last year.
The sales revenue generated by commercial establishments increased by a record
17.8% in Estonia in the first eleven months of 2021 and the increased confidence
to consume could also be seen in the fourth quarter. In spite of the fact that
the sales revenue was increased most by the fuel and electronics retail
segments, which the Group is not involved in, the consumers' confidence also
boosted the sales of the Group, increasing the sales figures in all segments of
the Group over the year in total, as well as in the last quarter. The consumers
accustomed to visit online stores safely during the period of restrictions
continued to visit the online stores of the Group in the last quarter of the
year. The growth of the profit and profitability was supported by the
integration of the stores, which were added to the supermarket segment in 2020
and modernising the production equipment in the central kitchen, as well as the
successful sales operations of the car trade segment. In the fourth quarter, the
Group's profit was put under pressure by the significantly faster growth of
energy prices compared to the previous levels and the continued growth of labour
costs due to the labour shortage. In the real estate segment, the business
profit of the fourth quarter of 2021 was influenced by the increase in the fair
values of investment property in the amount of 2.2 million euros. The net profit
of the Group decreased by 2.9 million euros due to calculated loss on lease
agreements in accordance with IFRS 16 (in 2020, the respective figure was 2.4
million euros).
The Valga Selver store was renovated during the reporting quarter. Prior to
that, Selver had also renovated the Jaamamõisa store in 2021. 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, which 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. One of the most important large-scale developments of the Group was
completed in the financial year: the construction of the new production building
of the central kitchen of Kulinaaria was completed, the existing factory
building was renovated, and the production buildings were connected, thereby
doubling the production area. Today, the production area covers more than 6,000
square metres. The new production building is the most modern in the Baltic
States in its sector. In the department store segment, the Ilumaailm (Beauty
department) and Toidumaailm (Food department) sections of the Tallinn department
store were renovated, with the Toidumaailm in Tallinn closed fully for the
renovation works for two months in the summer of 2021. In September 2021, 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 in 2022.
In December 2021, the Financial Supervision Authority issued a creditor's
activity licence to TKM Finants AS, subsidiary of the Group, which will allow
the company to provide consumer credit to customers. The various different
payment options provided by merchants are unavoidable in trade today and provide
to the consumer the advantages of speed and convenience, also to entry into a
contract directly with the merchant. Over a year ago, the Group started to issue
purchase limits for the Kuukaart (Monthly Card) loyalty card, which allows the
customers to pay for their purchases once a month based on an invoice. The
Monthly Card loyalty card has been well-received and the Group intends to offer
opportunities for paying in instalments to the customers as the next step.
Cooperation with a long-time partner of the Group, LHV Pank, will also continue,
with the bank continuing to issue the Partner Bank Card, which has a specific
target group and circle of users and is a different product than the options to
pay in instalments.
Selver supermarkets
The consolidated sales revenue of the supermarket business segment in 2021 was
569.0 million euros, increasing by 8.5% compared to the previous year. The
consolidated sales revenue was 151.4 million euros in the fourth quarter,
increasing by 5.6% in comparison with the same period of last year. The average
monthly sales revenue per square metre of sales area in 2021 was 0.40 thousand
euros, exceeding the respective indicator in the year before by 2.6%. In the
fourth quarter, the respective indicator was 0.43 thousand euros, which is 5.2%
more than in the same period last year. The average sales revenue per square
metre of selling space of comparable stores was 0.42 thousand euros in 2021,
growing by 3.0% compared to the year before, and 0.45 thousand euros, on
average, in the fourth quarter, growing by 5.7%, respectively. In 2021, 42.4
million purchases were made from the stores, which was 4.1% higher than in the
reference year.
In the fourth quarter of 2021, the pre-tax consolidated profit was 6.3 million
euros, increasing by 2.8 million euros in comparison with the same period the
year before. The net profit of the same period was 5.7 million euros, which is
an increase of 1.7 million euros in comparison with the previous year. The pre-
tax profit of the supermarkets segment in 2021 was 20.5 million euros,
increasing by 5.0 million euros in comparison with the previous year. The net
profit of the year was 18.4 million euros, which is an increase of 4.4 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.
Like 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, which broke out in March 2020. These have led
to in challenges in operating with the goods and continuously increased the
expenses on the personal protective equipment for the customers and employees.
Selver's result was affected by the acquisition of ABC Supermarkets AS in the
second quarter of 2020, which increased the number of Selver stores by 19. In
February 2021, the sales activities of one of the stores were terminated and at
the end of the year, the sales activities will continue in the eighteen added
stores. Selver expanded the sales area of one of its stores in 2021 and
renovated two stores, including one in the fourth quarter. The store was closed
to customers for six weeks in the fourth quarter for the renovation. The
comparability of the results is also affected by the new Selver store, which was
opened in July 2020, and the renovation of three Selver stores in the reference
period, the expansion of the sales area of two of the stores, closing one store,
and the impact of the leap year. In 2021, 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 of bringing
the stores together under one brand and updating the IT software was accompanied
by closing the stores for a few days for replacing the equipment, as well as by
one-time expenses and investments. The work on the selection of the stores
operating under the Selver ABC trademark as well as on 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 were made in the popular SelveEkspress service in 2021.
The technological platform of SelveEkspress was updated, additional self-
checkout tills were added to the stores where the customers' interest in the
service has significantly increased, and the opening of the SelveEkspress
service in the Selver ABC stores began. Kulinaaria OÜ, which belongs to the
supermarket segment and is known to the customers under the Selveri Köök
trademark, completed the construction of an extension of its factory in 2021,
which doubled the size of the production area to over 6,000 square metres. The
new production building is the most modern in the Baltic States in its sector.
The turnover of Selveri Köök increased by 13% in 2021. The new production
equipment has allowed to optimise the production processes and reduce the amount
of manual labour, which has, in turn, enabled to lower the production costs.
Compared to the same period the year before, which already included the
significant increase in e-commerce, the number of orders received by e-Selver
has almost doubled during the year. Since the beginning of 2021, the service
area of e-Selver has been expanded in stages and, since June, it covers all of
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. The nationwide home delivery service
of e-Selver was recognized with the title of the 'Logistics Act of the Year' in
2021.
The formation of the profit for the year was impacted by the good turnover
results, especially in the warm summer period and in the product groups, which
were affected by the spread of COVID-19 the year before. The faster increase in
the labour costs and purchasing ABC Supermarkets and transferring it under the
trademark of Selver had a negative impact. The lack of manpower in the labour
market has resulted in wage pressure. A temporary increase in 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.
Department stores
In 2021, the Kaubamaja department stores business segment earned a sales revenue
of 93.4 million euros, which is 5.2% more than last year. In the fourth quarter,
the sales revenue of the Kaubamaja department store segment amounted to 32.7
million euros, which is 11.4% better than the result in the same period the year
before. The pre-tax loss of the segment in 2021 was 0.7 million euros. The loss
decreased by 0.7 million euros over the year. The pre-tax profit of the fourth
quarter of 2021 was 0.3 million euros, being 0.6 million euros lower than the
result of the same period of the year before.
The 2021 sales results of the Kaubamaja was affected by the state of emergency
declared by the Government of the Republic of Estonia in the first quarter of
the year due to the pandemic, as a result of which Kaubamaja closed all its
industrial goods departments in Tallinn and Tartu for seven weeks. Only the
grocery stores remained open. The department stores reopened on 2 May. In 2020,
shopping centres were closed for six weeks. The demand for summer goods was high
in the reopened department stores and the discount campaigns in the summer were
successful. The renovation of the beauty and food sections of the Tallinn
department store in the summer months had a negative impact on the operating
profit of the Kaubamaja department store, with the food segment in Tallinn
closed for the renovation works on 25 June and reopened in a fully renovated
form on 26 August. Customers interest for the renovated sections was very high.
The autumn season campaigns, which started with 'Beauty Time' in September and
'Shopping Rally' in October and ended with the Christmas sales, were the most
successful ever. There are plans to fully renovate the women's fashion section
in Tallinn at the beginning of 2022; the section is expected to be reopened in
renovated form on 8 March. The development and planning of the concept for the
food section in Tartu will also begin in 2022. Concerning the online store,
Kaubamaja is planning to switch over to a new software solution, which should
improve the user convenience for the customers and add different
functionalities. The photo studio technology will be replaced as well. The
average sales revenue of the Kaubamaja department stores per square metre of
selling space was 0.3 thousand euros per month in the twelve months, which is
4.4% higher than in the same period last year.
In the fourth quarter of 2021, the sales revenue of OÜ TKM Beauty Eesti, which
operates I.L.U. cosmetics stores, was 2.1 million euros, which is 21.1% more
than in the same period of 2020. In the fourth quarter of 2021, the profit was
0.2 million euros, which was 0.1 million euros more than in the comparable
period in 2020. The sales revenue of 2021 was 5.5 million euros, which is 11.5%
more than in the 2020. The profit in 2021 was 0.2 million euros, which was 0.1
million euros more than in 2020. The sales revenue of the I.L.U. stores in the
fourth quarter was boosted by the successful Christmas sales, as well as a
general increase in consumer confidence and the favourable economic situation.
In 2022, the I.L.U. store concept upgrades and two stores are being renovated.
The online store assembly capacity will also be increased by expanding the
online store warehouse.
The sales revenue of the shoe stores of TKM King AS, which is being reported
under the department store segment as of 1 April 2021, was 6.1 million euros in
2021. The sales revenue decreased by 11.0% compared to the year before. In the
fourth quarter, the sales revenue of the segment was 1.6 million euros, which is
16.1% less than in the same period a year before. The loss in 2021 amounted to
2.8 million euros. Compared to the year before, the loss increased by 1.1
million euros. The loss of the fourth quarter was 1.9 million euros, increasing
by 1.7 million euros compared to the year before. Based on the strategic
decision made by the Group in September in the reporting year to close the
footwear business over 2022, the gradual realisation of the inventories began in
the fourth quarter and preparations were made for closing the stores. The
operating loss was increased due to forming reserves in connection with future
costs of closing the stores.
Car trade
The sales revenue of the car trade segment was 145.8 million euros in 2021,
which exceeded the sales revenue of the previous year by 24.0%. The sales
revenue of 29.6 million euros in the fourth quarter exceeded the sales revenue
of the same period in the previous year by 18.1%. During the twelve months, a
total of 5,884 new vehicles were sold, 1,147 of them in the fourth quarter. The
net profit of the segment in 2021 was 6.9 million euros, exceeding the profit of
the year before by 5.1 million euros. The pre-tax profit of the segment in 2021
was 7.4 million euros, which is 5.3 million euros more than the pre-tax profit
in 2020. The pre-tax profit of the fourth quarter of 2021 was 1.6 million euros,
which is 1.2 million euros more than the profit of the same period of the year
before.
The vehicle sales in the fourth quarter were dominated by the deficit and
availability of new vehicles arising from the deficit of car parts. Forward-
looking planning of the stocks allowed the car trade segment of the Group to
stand out and Kia to become the most-sold passenger car in Estonia in October.
The sales margin and the profitability of the entire segment also grew in the
conditions of increased demand.
Security segment
The sales revenue of the security segment outside the Group in the fourth
quarter of 2021 was 2.3 million euros, increasing by 16.0% in comparison with
the same period of last year. The section of cash transport continued to grow
fastest. The pre-tax loss earned in the segment was 0.1 million euros in the
fourth quarter. The loss increased by 0.03 million euros compared to the same
period last year. The sales revenue of the security segment in 2021 was 8.2
million euros, increasing by 35.9% compared to the previous year. The pre-tax
profit in 2021 remained at zero, which is similar to the previous result.
2021 as a whole was an intensive year of rapid changes for the security segment.
All sections of the company increased their business volumes and adjusted
successfully in the unstable conditions. The increase in energy prices and the
labour shortage, which significantly increased the labour costs in the last few
months of the year, had the greatest negative impact on profitability.
Real estate
The sales revenue earned in the real estate segment outside the Group was 5.3
million euros in 2021. Sales revenue increased by 3.1% compared to the previous
year. The sales revenue earned in the segment outside the Group was 1.5 million
euros in the fourth quarter. During the reference period, sales revenue
increased by 5.1%. The pre-tax profit earned in the real estate segment was
12.1 million euros in 2021. The profit increased by 19.9% compared to the year
before. The pre-tax profit earned in the segment was 4.1 million euros in the
fourth quarter. The pre-tax profit increased by 56.9% in the reference period.
The profit of the segment in the fourth quarter was affected by the annual
evaluation of the fair value of the real estate investments, as a result of
which the profit of the quarter increased by 2.2 million euros.
The coronavirus pandemic affected the sales revenue of the segment throughout
2021. The restrictions had the greatest impact on the rental premises and
catering and entertainment establishments in central Tallinn. The Tartu
Kaubamaja centre has recovered quickly from the restrictions, which were
implemented to prevent the spread of the virus, compared to the year before. The
growth in the sales revenue and profit in the segment in the second half of the
year were supported by the commercial premises rented to external parties by the
Latvian real estate undertaking. In the third quarter, the immovable property in
Saare County was sold. The immovable property of the Laulasmaa Selver and
commercial land in Harju County were acquired in 2021.
The transfer to green energy from 1 September was a landmark event for the real
estate segment in 2021. This means that the electricity consumed on the
commercial premises owned by the Group is 100% generated from renewable sources.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
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31.12.2021 31.12.2020
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ASSETS
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Current assets
Cash and cash equivalents 29,981 32,757
Trade and other receivables 20,673 15,894
Inventories 68,369 77,334
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Total current assets 119,023 125,985
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Non-current assets
Long-term receivables and prepayments 304 335
Investments in associates 1,745 1,712
Investment property 62,690 60,347
Property, plant and equipment 431,263 388,757
Intangible assets 20,284 20,148
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Total non-current assets 516,286 471,299
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TOTAL ASSETS 635,309 597,284
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LIABILITIES AND EQUITY ,
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Current liabilities
Borrowings 40,646 49,402
Trade and other payables 111,345 102,841
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Total current liabilities 151,991 152,243
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Non-current liabilities
Borrowings 238,705 217,349
Deferred tax liabilities 4,476 4,408
Provisions for other liabilities and charges 267 277
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Total non-current liabilities 243,448 222,034
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TOTAL LIABILITIES 395,439 374,277
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Equity
Share capital 16,292 16,292
Statutory reserve capital 2,603 2,603
Revaluation reserve 109,543 102,630
Currency translation differences 0 -149
Retained earnings 111,432 101,631
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TOTAL EQUITY 239,870 223,007
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TOTAL LIABILITIES AND EQUITY 635,309 597,284
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
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IV quarter IV quarter 12 months 12 months
2021 2020 2021 2020
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Revenue 217,545 201,253 821,648 741,938
Other operating income 2,339 309 4,332 1,285
Cost of merchandise -156,096 -147,608 -607,239 -556,712
Service expenses -14,324 -12,647 -48,874 -44,009
Staff costs -25,956 -23,016 -88,755 -78,301
Depreciation,
amortisation and
impairment losses -9,932 -9,888 -38,963 -35,137
Other expenses -464 -523 -931 -1,057
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Operating profit 13,112 7,880 41,218 28,007
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Finance income 2 1 4 2
Finance costs -1,283 -1,272 -4,909 -4,239
Finance income on
shares of associates
accounted for using
the equity method 27 20 183 191
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Profit before tax 11,858 6,629 36,496 23,961
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Income tax expense -147 1,361 -4,480 -4,462
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NET PROFIT FOR THE
FINANCIAL YEAR 11,711 7,990 32,016 19,499
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Other comprehensive
income:
Items that will not be
subsequently
reclassified to profit
or loss
Revaluation of land
and buildings 9,284 11,225 9,284 11,225
Currency translation
differences -149 0 -149 0
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Other comprehensive
income for the
financial year 9,135 11,225 9,135 11,225
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TOTAL COMPREHENSIVE
INCOME FOR THE
FINANCIAL YEAR 20,846 19,215 41,151 30,724
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Basic and diluted
earnings per share
(euros) 0.29 0.20 0.79 0.48
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
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