Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the fourth quarter and twelve months of 2011

Teade

The consolidated unaudited sales revenue of the Tallinna Kaubamaja Group,
generated in the year 2011, was 436.0 million euros; compared to the sales
revenue of 412.7 million euros a year back, the increase was 5.6%. In the 4th
quarter, the Group’s sales revenue was 119.5 million euros, which exceeded the
sales revenue of a year before by 6.3%. The reference base was influenced by
the sales tax, levied in Tallinn since June 2010 – it decreased the Group’s
sales revenue earned in 2011 by 2.1 million euros (by 1.2 million euros in
2010). On 1 January 2011, the calculating principles of the Group’s sales
revenue changed and the reference data from 2010 has been adjusted to the new
principles. Pursuant to that, an additional 9.9 million euros has been recorded
in the sales revenue in 2010. The Group’s consolidated unaudited net profit,
generated in 2011, was 21.5 million euros, having risen by 29.4% compared to
the net profit of the previous year, which was 16.6 million euros. The Group’s
net profit in the 4th quarter reached 8.7 million euros, thus exceeding the
profit of the comparable period of the previous year (when the figure was 7.4
million euros) by 17.7%. The pre-tax profit increased by 43.7% during the year,
making up 24.6 million euros. 

The livening of the retail market, which accompanied the improvement of
Estonian economy in 2011, had a positive impact on all the retail segments of
the Tallinna Kaubamaja Group. In addition to the great results of the
supermarket segment, both the department store segment and the footwear segment
showed strong growth figures in terms of sales as well as profitability, while
the car segment underwent a truly rapid increase. In the accounting year, the
Group focussed on restoring internal profitability by better commercial
management, the organisation of work processes, and the cost control.
Rearranging the Group’s management structures and the employees’ organisation
of work provided a solid basis for commercial development and helped to keep
labour costs under control despite the wage pressure. Improving commercial
management ensured the growth of sales revenue under new economic conditions,
in which the number of impulse purchases has dropped and people consume more
rationally. 

The 2011 sales revenue of the department store business segment was 80.5
million euros, which had increased by 7.9% compared to the same period of the
previous year. Of this, the sales revenue of the 4th quarter was 25.3 million
euros, which was 11.6% higher than the revenue of the 4th quarter of 2010. The
profit earned by department stores in 2011 was 2.8 million euros, which had
improved by 1.4 million euros compared to the year before. In the 4th quarter,
profit was earned in the amount of 2.3 million euros, which was 0.3 million
euros better than the result of the corresponding period of the previous year.
The operating profit of the department store segment had grown by 1.5 million
euros in a year (from 1.0 million euros in 2010 to 2.5 million euros in 2011).
The operating profit was influenced by the successful sales campaign Osturalli
and the closing campaign of the digital and sports departments that began in
the 4th quarter. The 2011 operating profit of the department store segment was
also boosted by the higher sales margin achieved thanks to successful purchases
and the improved management of stock. In 2012, the Group will aim at giving a
clear, comprehensive and wide-ranging content to the existing department store
format in order to maintain its market segment and competitiveness on the local
trade landscape. The 2011 sales revenue of OÜ TKM Beauty Eesti operating the
I.L.U. beauty stores was 3.2 million euros, which had increased by 43.2%
compared to the same period of the previous year. Of this, the sales revenue of
the 4th quarter was 1.2 million euros, which was higher than the revenue of the
corresponding period of 2010 by 45.7%. The net loss suffered by the I.L.U.
chain in 2011 was 0.5 million euros, which was 0.1 million euros greater than
in 2010 due to the costs of launching a new store. In the 4th quarter, the net
loss was 0.03 million euros, dropping by 0.04 million euros compared to the
loss of the year 2010. 

The consolidated sales revenue of the supermarket business segment in 2011 and
its sales revenue in Estonia were 317.9 million euros, which means an increase
of 2.9% compared to the period of a year before. The consolidated sales revenue
of the 4th quarter and the sales revenue in Estonia were 83.0 million euros,
having grown by 1.8% compared to the same period of the previous year. The
increase in Selver’s sales revenue is the result of continuously successful
sales campaigns, which meet the target customers’ expectations, and the good
sales of the holiday season in December. In addition, the constant work done to
adjust the selection of goods according to changes in demand, and to ensure the
availability of goods. The growth of the sales revenue of goods is influenced
by the general rise in the prices of food products in Estonia, which has
resulted in a decline of bulk sales. Since October, the increase in consumer
prices has slowed down and a growth in bulk sales can be detected. Compared to
last year, the increase in the sales revenue has been negatively influenced by
the continued intense competition on the retail business market and the sales
tax levied in Tallinn. In addition, the sales revenue was affected by the
closing of the now renovated stores for a period of repair works lasting 2–4
weeks. The consolidated pre-tax profit of the supermarket segment in 2011 was
14.1 million euros, which means a growth of 4.7 million euros, i.e. 50.7%
compared to 2010. The consolidated net profit in 2011 was 11.0 million euros,
thus displaying an increase of 2.1 million euros, i.e. 24.2% compared to the
period of a year before. The consolidated pre-tax and net profit in the 4th
quarter was 4.4 million euros, having increased by 1.0 million euros, i.e.
30.2% compared to the year before. The pre-tax profit earned in Estonia in the
year 2011 was 16.4 million euros, 5.0 million euros of which was generated in
the last quarter. Compared to last year’s periods, profits grew by 32.9% and
21.6%, respectively. The net profit generated by supermarkets in Estonia in
2011 was 13.4 million euros, which means the profit grew by 12.5% in a year.
The substantial difference between the growths of the pre-tax profit and net
profit was caused by the income tax paid on dividends. The increase in the
profit earned in Estonia was chiefly caused by the revision of the employees'
work processes and the implementation of a multifunctional work organisation –
as a result, labour efficiency was enhanced and labour costs decreased by 8.4%
in the view of the year. Throughout the year, constant attention has been paid
to the efficiency of operational expenditure. In addition, a drop in
depreciation costs had a significant impact on the profit formation. Due to the
closing of Latvian stores, no sales revenue from goods was generated in Latvia
in 2011. The total sales revenue of Selver in Latvia was 1.7 thousand euros in
2011 and 31.5 thousand euros in 2010. The loss sustained by SIA Selver Latvia
in 2011 was 2.3 million euros, having decreased by 0.7 million euros compared
to the previous year. The loss incurred in the 4th quarter was 0.6 million
euros, having decreased by 0.1 million euros compared to the same period of the
year before. Economic activities in Latvia have been brought to a halt. 

The external sales revenue of the real estate business segment for 2011 was 2.8
million euros, having increased by 1.1% compared to the previous year. The
sales revenue of the 4th quarter of the accounting year was 0.7 million euros,
exceeding the result of the 4th quarter of 2010 by 6.6%. The profit earned in
the segment in 2011 was 6.6 million euros, which remained on the same level as
in 2010. In the 4th quarter, the segment achieved a profit of 1.5 million
euros, which was 12.0% lower than the profit of the 4th quarter of the previous
year due to an increase in the intra-group financial costs at the end of the
year. 

In 2011, the car trade segment experienced substantial growth, although the
sales of new cars in the Baltics are yet to reach the pre-crisis level. The
segment’s sales revenue without inter-segment transactions was 20.8 million
euros, exceeding the sales revenue of the same period of the previous year by
60.9%. The sales revenue of the 4th quarter, which was 6.6 million euros, was
89.0% greater than the sales revenue of a year earlier. Thanks to strong sales
results, the 2011 profit of the car trade segment was 1.3 million euros, and
thus exceeded the result of a year before by nearly five times. In the 4th
quarter, the car segment earned a profit of 0.3 million euros. The profit of
the last quarter of 2010 was 0.1 million euros. 

The 2011 sales revenue of the footwear trade segment was 14.0 million euros,
thus having grown by 3.9% in a year. In the 4th quarter, the sales revenue was
4.0 million euros – less by 2.7% than in 2010. The sales results of the
footwear segment in the 4th quarter were influenced by the closing of
ineffective stores (compared to the 4th quarter of 2010, leaving the number of
stores smaller by 3; the sales of comparable stores increased by 2.5%), the
closing of the store located in the Pärnu Kaubamajaka centre in connection with
the concept renewal, and the weather, which hindered the sales of winter
footwear in October and November. The net loss of 2011 was 0.2 million euros,
while the loss of 2010 was 0.5 million euros; thus, losses decreased by 63.0%.
In the 4th quarter, footwear stores achieved a profit of 0.2 million euros,
with the profit of the 4th quarter of 2010 also being 0.2 million euros. The
drop in the annual loss was caused by the closing of ineffective stores and a
higher gross margin, which was achieved thanks to improved stock management. 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

                                  31.12.2011  31.12.2010
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ASSETS                                                  
Current assets                                          
Cash and bank                         11,948      15,734
Trade receivables                      9,976       8,987
Other short-term receivables           9,372       2,644
Prepaid and refundable taxes              79         349
Other prepayments                        880         748
Inventories                           41,973      39,385
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Total current assets                  74,228      67,847
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Fixed assets                                            
Prepaid expenses                         985       1,272
Investments in associates              1,550       1,504
Other long-term receivables               56         141
Investment property                    3,566       3,566
Tangible fixed assets                172,272     175,638
Intangible fixed assets                3,099       3,533
Goodwill                               6,710       6,710
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Total fixed assets                   188,238     192,364
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TOTAL ASSETS                         262,466     260,211
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LIABILITIES AND EQUITY                 ,           ,    
--------------------------------------------------------
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Current liabilities                                     
Borrowings                            11,261      17,635
Prepayments received                     207         573
Trade payables                        46,419      40,377
Tax liabilities                        5,038       4,677
Other current  liabilities             4,282       4,079
Provisions                               135         127
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Total current liabilities             67,342      67,468
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Long-term liabilities                                   
Borrowings                            55,591      63,844
Provisions                                73          88
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Total long-term liabilities           55,664      63,932
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TOTAL LIABILITIES                    123,006     131,400
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Equity                                                  
Share capital                         24,438      26,031
Statutory reserve capital              2,603       2,603
Revaluation reserve                   52,197      53,308
Retained earnings                     60,333      47,495
Currency translation differences        -111        -626
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TOTAL EQUITY                         139,460     128,811
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TOTAL LIABILITIES AND EQUITY         262,466     260,211
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros

                                    12 months   12 months     4th         4th   
                                      2011        2010      quarter     quarter 
                                                              2011        2010  
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Revenue                               435,977     412,663     119,510    112,393
Other operating income                    420         695         142         72
                                                                                
Materials and consumables used       -321,503    -304,918     -86,977    -81,803
Other operating expenses              -44,353     -43,842     -11,545    -11,448
Staff costs                           -34,145     -34,764      -9,302     -8,699
Depreciation and amortisation          -9,976     -10,482      -2,544     -2,465
Impairment losses                           0          50           0         50
Other expenses                           -347        -801        -130       -322
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Operating profit                       26,073      18,601       9,154      7,778
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Financial income                          247         298          66         78
Financial costs                        -1,897      -2,008        -531       -522
Financial income on shares of             150         205          17         62
 associates                                                                     
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Profit before income tax               24,573      17,096       8,706      7,396
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Income tax                             -3,035        -450          -4          0
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Net profit for the reporting           21,538      16,646       8,702      7,396
 period                                                                         
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Other comprehensive income                                                      
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Revaluation of land and buildings           0      10,771           0     10 771
Exchange differences                      515         -80         442        -20
Other comprehensive income for            515      10,691         442     10,751
 the reporting period                                                           
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TOTAL COMPREHENSIVE INCOME FOR         22,053      27,337       9,144     18,147
 THE REPORTING PERIOD                                                           
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         Raul Puusepp
         Chairman of the Board
         Phone +372 731 5000