Segments (EURm) Q3/20 Q3/19 yoy 9m/20 9m/19 yoy
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Supermarkets 134.5 117.6 14.4% 381.0 346.4 10.0%
Department stores 21.6 23.6 -8.3% 58.6 70.8 -17.3%
Cars 34.7 34.9 -0.5% 92.5 96.9 -4.5%
Footwear 1.9 2.2 -12.7% 4.8 6.3 -22.6%
Real Estate 1.4 1.5 -0.8% 3.7 4.3 -13.1%
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Total sales 194.2 179.7 8.1% 540.7 524.6 3.1%
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Supermarkets 4.4 6.5 -32.0% 12.0 12.5 -3.8%
Department stores 0.3 0.7 -63.1% -0.7 1.2 -160.1%
Cars 1.0 1.6 -36.3% 1.8 3.8 -52.6%
Footwear -0.4 -0.3 46.0% -1.6 -0.9 72.2%
Real Estate 2.9 2.7 5.8% 7.5 8.1 -7.6%
IFRS 16 -0.7 -0.4 92.6% -1.7 -1.1 49.2%
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Total profit before tax 7.4 10.9 -31.7% 17.3 23.5 -26.3%
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In the third quarter of 2020, the consolidated unaudited sales revenue of
Tallinna Kaubamaja Grupp was 194.2 million euros, which was 8.1% higher than the
sales revenue of the same period in 2019. The sales revenue in the first nine
months was 540.7 million euros, which was a 3.1% increase in comparison with the
result of the first nine months of 2019, when the sales revenue was 524.6
million euros. The Group's consolidated unaudited net profit of the third
quarter of 2020 was 7.4 million euros, which was about a third less than the
profit of the comparable period in 2019. The Group's net profit of the first
nine months of 2020 was 11.5 million euros, which was also about a third less
than the result of the previous comparable period. In the first nine months of
2020, pre-tax profit was 17.3 million euros, which is 26.3% less than the year
before. Net profit was affected by the dividend payment, from which 5.8 million
euros of income tax was calculated in the first quarter of 2020; 6.5 million
euros of income tax was calculated a year before.
Retail consumption in the last months of 2020 was characterised by a
surprisingly rapid recovery, where the sales revenue from Estonian retail trade
(except motor vehicles and motorcycles) in current prices has demonstrated a
slight growth after the decline in April and May. Thereat, the consumer
behaviour has changed significantly. The number of visits to city centres has
decreased and the consumption has moved more to rural areas. People attempt to
visit stores less frequently, but buy more at a time. Understandably, online
stores are also preferred more frequently. The Group's sales revenue of the
third quarter of 2020 grew faster than the average sales revenue for the
Estonian retail trade, primarily due to the sales revenue of ABC Supermarkets
AS, which was acquired and added to the supermarket segment in May 2020. The
business volumes of the car segment of the Group dropped, but the decline was
smaller than the decline of the car market in general. The fashion goods
segments of the Group were hit hardest by the crisis, as the demand for those
items has dropped due to the lower mobility. In addition to the expenses on
virus control supplies for retail stores, the profit has been put under pressure
by the one-off costs of numerous developments. Labour force expenses increased
by 11.8% in the third quarter, while the number of employees grew by 9.7% due to
expansions and the average wages grew by 2.0%.
The largest development projects in the third quarter included preparations for
transferring the stores of a new chain acquired at the end of May, which are
operating under the Comarket trademark, to under the trademark of Selver and the
opening of ABC KING and SHU e-stores. The adjustment of the new factory and the
renovation of an existing factory building of Kulinaaria is in progress.
Renovation will be completed in the beginning of 2021, after which Kulinaaria
will be carrying out its operations in both factories and is focusing on product
development in new as well as current food categories to expand its market share
and increase its production volumes. Several developments have already been
completed in the financial year. The Selver store in Võru was successfully moved
to the new location in the Kagukeskus shopping mall in March and it was the
latest Selver store to introduce the SelveEkspress service. Selver fully
renovated the Suurejõe Selver in Pärnu and extended the sales area at the
Rannarootsi Selver in Haapsalu. On 9 July, Selver opened a new store at the WOW
mall in Saaremaa, which is the 54th store in the Selver chain. In the last
quarter of the year, it is planned to renovate Mustakivi Selver in Tallinn and
launch the transfer of the Comarket stores to under the trademark of Selver ABC.
The Group's attention continues to be focused on developing e-commerce and
increasing the shopping convenience of customers.
Selver supermarkets
The consolidated sales revenue of the supermarkets business segment was 381.0
million euros in the first nine months of 2020, increasing by 10.0% in
comparison with the same period of last year. Excluding the added ABC
Supermarket stores, the segment grew by 4.5%. The consolidated sales revenue was
134.5 million euros in the third quarter of 2020, increasing by 14.4% in
comparison with the same period of last year. During the first nine months of
2020, 29.9 million purchases were made from the stores, which was 1.3% less than
the reference year. The decrease in the number of purchases is impacted by the
state of emergency which was announced in spring, during which the customers
visited the stores more rarely, but in turn, the average total sum of purchases
increased.
In the third quarter of 2020, both the pre-tax profit and net profit were 4.4
million euros, dropping by 2.1 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 2020 was 12.0 million euros, dropping by 0.5 million euros in
comparison with the previous year. The net profit of the nine months was 9.9
million euros, which is an increase of 1.4 million euros in comparison with
2019. The difference between the net profit and profit before income tax
compared to the results from a year earlier is due to income tax paid on
dividends - income tax paid on dividends was 1.8 million euros lower in 2020
compared to the year before. All supermarket profit is earned in Estonia. As of
1 June 2020, the results of the supermarkets segment include the results of ABC
Supermarkets.
The profit was earned thanks to the increased sales revenue, the investments
made in increasing the efficiency of daily processes, and the warmer weather in
the beginning of the year, which enabled saving on administrative expenses. The
SelveEkspress service was extended to all Selvers in the first quarter, which
has enabled keeping the labour efficiency at last year's level in the conditions
of wage pressure which were prevailing in the beginning of the year. The
economic results were impacted by the expenses made on the protection of the
customers and employees due to COVID-19. The impacts of COVID-19 were carried
over to the third quarter in a lesser extent, with the customers visiting the
stores less frequently, but buying more per purchase. In the second quarter,
Selver acquired the ABC Supermarkets chain, which will improve the availability
of Selver's service and increase the market share thanks to the wider network of
stores. On the other hand, the economic result of supermarkets is impacted by
the one-off costs related to the purchase of ABC Supermarkets. Selver has fully
renovated the Suurejõe Selver in Pärnu and the Merimetsa Selver in Tallinn this
year. Both stores were closed to customers during the renovation works. The
sales area of the Rannarootsi Selver in Haapsalu has been expanded. In Võru,
Selver moved to new premises at the Kagukeskus shopping mall. In July, Selver
opened a new store at the WOW mall in Saaremaa. Due to the state of emergency,
the Sepapaja Selver and the Puhvet café at the Kadaka Selver were temporarily
closed in the second quarter. Selver is planning to renovate the Mustakivi
Selver in Tallinn and launch the process of transferring the stores, which are
operating under the trademark of Comarket, to under the trademark of Selver ABC
this year. The result of the first nine months includes the costs of launching
the new factory of Kulinaaria. The assembly and delivery volumes of e-Selver
have been growing rapidly. The e-Selver service area includes all of Harju and
Tartu County, Hiiu County, Saare County, a large part of Pärnu County, and a
part of Lääne County. Development of the e-commerce remains one of the
priorities of the segment.
Department stores
In the nine months of 2020, the Kaubamaja department stores business segment
earned a sales revenue of 58.6 million euros, which is 17.3% less than in the
same period of last year. The pre-tax loss of the Kaubamaja department stores in
the first nine months of 2020 was 0.7 million euros, showing a decrease of 1.9
million euros in the year-on-year comparison. The sales revenue of Kaubamaja
department stores in the third quarter of 2020 was 21.6 million euros, which was
8.3% less than during the same period of 2019. The pre-tax profit of the
Kaubamaja department stores in the third quarter was 0.3 million euros, showing
a decrease of 0.5 million euros in the year-on-year comparison. The sales result
of the Kaubamaja department stores in the two last quarters was influenced by
the emergency situation declared by the Government of the Republic of Estonia
due to the COVID-19 virus, which resulted in a lower number of visitors to the
department stores from the middle of March. On 27 March, the Government of the
Republic of Estonia ordered the closing of all shopping malls and Kaubamaja also
closed all selling spaces of manufactured goods in Tallinn and Tartu, with only
the grocery stores remaining open. The department stores were reopened on 11
May. Some changes can be observed in the purchasing behaviour of customers. Even
more value is placed on quality and such products are sought and purchased.
Fashion items are purchased somewhat more modestly, but the sales of household
goods have been quite successful. The Kodumaailm (Home department) at Tallinna
Kaubamaja was redesigned for autumn, which has also had a positive impact on the
sales figures. On the other hand, due to its central location, Tallinna
Kaubamaja has been strongly affected by the drop in the number of tourists and
the lower number of people working in the offices in the city centre, as well as
the general decline in the visitation of the city centre, especially in the
summer period, which has had a negative impact on the sales result of the third
quarter. The turnovers of the Kaubamaja online store have multiplied after the
crisis, but this has failed to compensate for the decline in the sales of the
physical department stores.
In the third quarter of 2020, the sales revenue of OÜ TKM Beauty Eesti, which
operates I.L.U. cosmetics stores, was 1.3 million euros, which is 12.3% more
than in the third quarter of 2019. In the third quarter of 2020, profit was
0.03 million euros, which was 0.05 million euros more than during the comparable
period in 2019. The result of the third quarter was impacted positively by the
continued increase in the sales revenue of the online store, the refreshment of
the selection, which was welcomed by the customers, and the successful changes
in the marketing campaigns. The sales revenue of the first nine months of 2020
was 3.3 million euros, which is 1.0% less than during the same period of 2019.
In the first nine months of 2020, profit was 0.02 million euros, which was 0.22
million euros more than during the comparable period in 2019.
Car trade
The sales revenue of the car trade segment was 92.5 million euros in the first
nine months of 2020, which was 4.5% less than the sales revenue of the same
period in 2019. The sales revenue for KIAs decreased by 29.1%. The sales revenue
of 34.7 million euros of the third quarter of 2020 was 0.5% less than the sales
revenue of the same period in 2019, whereas the sales revenue for KIAs decreased
by 27.3%. During the first nine months, a total of 3,895 new vehicles were sold,
1,482 vehicles of them in the third quarter. The net profit of the segment in
the first nine months of 2020 was 1.2 million euros, which was 2.0 million euros
less than the profit of the same period a year before. The pre-tax profit of the
segment in the first nine months of 2020 was 1.8 million euros, which is 2.0
million euros less than the profit of the first nine months of 2019. The pre-tax
profit of the third quarter of 2020 was 1.0 million euros, which is 0.6 million
euros less than the profit of the same period a year before.
In the third quarter, sales revenue and business profit decreased mainly due to
the delivery problems of suppliers, which were caused by the coronavirus crisis.
The importer of the brands sold by the car segment of the Group experienced
issues with the delivery of new cars and the limited stocks. On the other hand,
there were also less buyers; thus, the demand and supply were balanced. All
showrooms were opened and worked under normal conditions. A change in the
consumer behaviour can be observed in the sales of new cars, with the regular
customers and small customers having been replaced with large customers and
public procurements and with the operations of the car segment of the Group
proving quite successful. The volumes of after-sale services have not declined
significantly. The new Shkoda car showroom of Verte Auto in Riga is still in the
launching phase and is showing a monthly growth trend.
Footwear trade
The sales revenue of the footwear trade segment was 4.8 million euros in the
first nine months of 2020. In comparison with 2019, the sales revenue of the
same period decreased by 22.6%. In the third quarter, the sales revenue of the
segment was 1.9 million euros, which is 12.7% less than during the same period
in 2019. The loss of the first nine months of 2020 was 1.6 million euros. The
loss of the comparable period in 2019 was 0.9 million euros. The loss of the
third quarter was 0.4 million euros, which is 0.1 million euros weaker than
during the same period of 2019. The sales revenue of the third quarter was
impacted by the continuing deep discounts in the realisation of the stocks of
the spring season, which were left due to state of emergency announced and
closing of the shopping centres in connection the spread of COVID-19. The SHU
store in Haapsalu was closed in September, while the SHU store in Jõhvi was
moved to another location at the recently renovated Jewe centre, which has more
perspective. Taking into consideration the changes in the consumer behaviour and
the development of e-commerce, online stores of ABC KING and SHU were developed
and opened to customers in the middle of September.
Real estate
The sales revenue earned in the real estate segment outside the Group was 3.7
million euros in the first nine months of 2020. Sales revenue decreased by
13.1% in comparison with the previous year. The sales revenue earned in the
segment outside the Group was 1.4 million euros in the third quarter of 2020.
During the reference period, sales revenue decreased by 0.8%. The pre-tax profit
in the real estate segment was 7.5 million euros in the first nine months of
2020. Compared to the reference period, profit decreased by 7.6%. The pre-tax
profit of the segment in the third quarter was 2.9 million euros, which is 5.8%
more than during the same period in 2019.
The segment's sales revenue and profit of the third quarter recovered quickly.
The drop in the sales result of the real estate segment in the first nine months
reflects the impact of the rent discounts during the state of emergency
announced by the Government of the Republic and the closing of department
stores. The Tartu Kaubamaja department store and Viimsi Keskus shopping mall
were largely closed until 10 May. Grocery stores, telecommunication stores, and
stores with a separate entrance were open at the malls. Catering enterprises
were open only for take-away. The restriction on movement affected Tartu
Kaubamaja department store the hardest - the attendance of the mall decreased by
more than 80% during the period that shopping malls were closed. During the same
period, the attendance of the Viimsi Keskus shopping mall decreased by nearly
40%. Viimsi Keskus has recovered from the impacts of the state of emergency
quicker than Tartu Kaubamaja. Within the segment, the Latvian real estate
company improved its results most, having gained a new Shkoda and used cars
showroom in Riga in the end of last year. The aftershocks of the coronavirus
epidemic will continue to affect the results of the retail rental market for the
whole of 2020. As the economic impact of the epidemic is not yet clear, the
volumes of and schedule for future developments will be adjusted as and when
needed.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros?
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30.09.2020 31.12.2019
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ASSETS
-------------------------------------------------------------------------
Current assets
Cash and cash equivalents 22,700 40,629
Trade and other receivables 14,955 16,904
Inventories 76,197 78,305
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Total current assets 113,852 135,838
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Non-current assets
Long-term trade and other receivables 275 114
Investments in associates 1,892 1,721
Investment property 60,641 60,458
Property, plant and equipment 378,636 319,192
Intangible assets 21,235 4,990
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Total non-current assets 462,679 386,475
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TOTAL ASSETS 576,531 522,313
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LIABILITIES AND EQUITY
-------------------------------------------------------------------------
Current liabilities
Borrowings 23,465 46,448
Trade and other payables 90,995 89,831
-------------------------------------------------------------------------
Total current liabilities 114,460 136,279
-------------------------------------------------------------------------
Non-current liabilities
Borrowings 252,096 157,876
Provisions for other liabilities and charges 362 322
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Total non-current liabilities 252,458 158,198
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TOTAL LIABILITIES 366,918 294,477
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Equity
Share capital 16,292 16,292
Statutory reserve capital 2,603 2,603
Revaluation reserve 91,927 93,496
Currency translation differences -149 -149
Retained earnings 98,940 115,594
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TOTAL EQUITY 209,613 227,836
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TOTAL LIABILITIES AND EQUITY 576,531 522,313
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
-------------------------------------------------------------------------------
III quarter III quarter 9 months
2020 2019 2020 9 months 2019
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Revenue 194,181 179,683 540,685 524,609
Other operating
income 316 285 976 682
Cost of sales -146,012 -133,804 -409,104 -393,038
Other operating
expenses -11,216 -9,657 -31,362 -30,482
Staff costs -19,139 -17,120 -55,285 -52,665
Depreciation,
amortisation and
impairment losses -9,387 -7,728 -25,249 -23,058
Other expenses -157 -71 -534 -482
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Operating profit 8,586 11,588 20,127 25,566
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Finance income 1 1 1 1
Finance costs -1,204 -749 -2,967 -2,215
Finance income on
shares of associates 57 60 171 174
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Profit before tax 7,440 10,900 17,332 23,526
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Income tax expense -1 0 -5,823 -6,453
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NET PROFIT FOR THE
FINANCIAL YEAR 7,439 10,900 11,509 17,073
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Other comprehensive
income:
Items that will not
be subsequently
reclassified to
profit or loss
-------------------------------------------------------------------------------
Other comprehensive
income for the
financial year 0 0 0 0
-------------------------------------------------------------------------------
TOTAL COMPREHENSIVE
INCOME FOR THE
FINANCIAL YEAR 7,439 10,900 11,509 17,073
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Raul Puusepp
Chairman of the Board
Phone +372 731 5000
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