Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the third quarter and first nine months of 2014

Teade

Segments (EURm)    Q3/14  Q3/13     yoy    9m/14  9m/13   yoy  
---------------------------------------------------------------
Supermarkets        92.9   87.0    6.8%    268.9  251.0   7.1% 
Department stores   20.9   21.2   -1.5%     64.2   62.6   2.5% 
Cars                15.2   11.9   28.1%     43.8   33.9   29.0%
Footwear             3.3    3.8   -13.2%    10.2   10.6   -4.4%
Real Estate          0.8    0.8    5.0%      2.5    2.3   5.7% 
Total sales        133.2  124.7    6.8%    389.5  360.5   8.0% 
---------------------------------------------------------------
                                                               
Supermarkets         3.1    2.4   25.5%      3.3    1.1  200.0%
Department stores   -0.3    0.9   -131.4%    0.5    0.4   17.7%
Cars                 0.9    0.5   67.9%      1.1    1.6  -29.3%
Footwear            -0.4    0.0  -1252.8%   -1.3   -0.2  471.0%
Real Estate          2.3    2.2    3.9%      6.7    5.7   18.8%
Total net profit     5.6    6.2   -9.8%     10.3    8.5   21.3%
---------------------------------------------------------------

The consolidated unaudited sales revenue of the Tallinn Kaubamaja group was
133.2 million euros during the third quarter of 2014; this exceeded the
previous year's sales revenue by 6.8%. The sales revenue of the first nine
months was 389.5 million euros; this result was better by 8.0% compared to the
first nine months of 2013, when the sales revenue was 360.5 million euros. The
consolidated unaudited net profit of the Group during the third quarter of 2014
was 5.6 million euros; due to income tax paid on the share capital payment,
this is 9.8% less than the profit of the same period in the previous year. In
the first nine months of 2014, the net profit of the Group was 10.3 million
euros that is 21.3% higher than the profit of the same period of the previous
year, when the profit was 8.5 million euros. Profit before taxes was 12.7
million euros during the first nine months, demonstrating a 3.1% increase as
compared to the same time previous year. 

The sales revenue of the group during the third quarter was as high as
expected, considering the new Selver stores and renewed selection; however,
this was supported by the improved real purchase power of consumers resulting
from increased wages and the decreased consumer prices, similarly to the
increase of retail sales in the entire Estonia. Overall, most of the group
segments demonstrated an increase in sales during the first nine months. Only
the turnover of footwear segment has decreased during the first nine months due
to reorganisation in key stores. According to Statistics Estonia, Estonia has
experienced an overall drop in the retail turnover of the retail segment of
department stores starting from February. The decrease was especially fast
during summer months. The turnover of the department store segment of the group
started to decrease slightly during the third quarter, but still demonstrated a
smaller-than-average decline in the country. Trade in the department stores of
the group was rendered difficult by the traffic restrictions that were
implemented because of the reconstruction of the streets in the centres of
Tallinn and Tartu that made access to the department stores complicated. The
net profit was higher by almost one fifth – this was achieved by optimising
dividends and payments of the share capital. The group achieved a 3.1% growth
of profit before taxes; despite this, the greatest challenge of the reporting
period is finding opportunities to increase efficiency, in order to compensate
for the increased labour expenses (the total increase was 14% in nine months).
Overall, the marginal has been pressured by the renewed selection in the
footwear segment during the first nine months. 

Selver supermarkets

The consolidated sales revenue of the supermarket segment was 268.9 million
euros during the first nine months of 2014, which constituted a 7.1% growth on
the year-on-year basis. The consolidated sales revenue of the third quarter was
92.9 million euros, which was a 6.8% increase on the year-on-year basis. 26.7
million purchases were made in Selver stores during the first nine months of
2014, which was 5.9% more than the purchases made during the same period a year
before. The consolidated profit before taxes of the supermarket segment was 3.7
million euros during the first nine months of 2014; the net profit was 3.3
million euros. The consolidated profit before taxes and net profit were 3.1
million euros in the third quarter. Opening and putting into operation new
stores in 2012 and 2013, which made the basis for comparison lower during the
previous year, supported the increase in the turnover during the first nine
months of 2014. Low inflation, high consumer confidence and good indicators of
private consumption expenditure, as well as beautiful summer weather, supported
the turnover of the third quarter. The changing situation in competition had a
negative impact due to which the clients were redistributed between stores,
including the Selver stores. The foodstuffs segment leads the increase in the
turnover of the Selver stores; in this segment, the sales of fresh food groups
and gourmet products that are available in a wider assortment has increased
considerably. We have paid more attention to the selection, quality and price
of fruit and vegetable products; as a result, customers have included fresh and
healthy food products from the Selver selection in the representative basket of
products in a quantity that is higher by more than a third as compared to
earlier periods. On the other hand, changes on the labour market, due to which
the average wages have increased, have influenced the revenue of the entire
2014, leading to a growth in labour expenditure. The results of the first nine
months also include non-capitalised costs of one-time projects. This year,
bigger one-time projects have been as follows: on 1 January, Selver stores
implemented new commercial software; during Q1, the individual Gurmeekauplus
gourmet store was closed at the Solaris centre, and a gourmet product section
was opened in Pirita Selver; in June, a new Selver was opened at the Astri
centre in Narva. 

Department stores

The sales revenue of the department store segment was 64.2 million euros during
the first nine months of 2014, which was a 2.5% growth on the year-on-year
basis. Thereof, 20.9 million euros were sales revenue of the third quarter,
which is 1.5% less than during the third quarter of 2013. The profit before
taxes of the department stores was 1.9 million euros during the first nine
months of 2014, which was 19.5% better than a year before. During the third
quarter, the profit before taxes was 0.7 million euros, which was 22.5% less
than the profit in 2013. The result of sales of Kaubamaja was influenced by
difficult access to both stores during the third quarter – in Tallinn, the
tramways were repaired; in the centre of Tartu, the streets in the city centre
were closed for reconstruction. The results of department stores were
influenced by the September weather that was warmer than average and enabled
our customers to postpone purchasing decisions for clothes, mostly reflected in
the reduced sales of coats. The sales revenue of OÜ TKM Beauty Eesti that
operates I.L.U. cosmetics stores was 1.0 million euros during the third quarter
of 2014, which was a 1.6% decrease as compared to the same period in 2013. In
the third quarter, the loss was 0.1 million euros, which was a little less than
the loss of the same period in 2013. The sales revenue was 3.1 million euros
during the first nine months of 2014, which was a 0.6% growth on the
year-on-year basis. The loss of the first nine months of 2014 was 0.3 million
euros, which was 0.1 million euros less than the loss of the same period in
2013. The sales results of the I.L.U. store in Ülemiste were significantly
worse in summer due to the construction works in the Ülemiste centre. A new and
larger I.L.U. store is opened at Ülemiste on 23 October 2014. 

Car Trade

The sales revenue of car trade segment was 43.8 million euros during the first
nine months of 2014. The sales revenue exceeded the revenue of the same period
in the previous year by 29.0%; at that, the sales revenue of KIAs increased by
17.8%. In the third quarter, the sales revenue in the amount of 15.2 euros was
28.1% more than the sales revenue on the year-on-year basis; at that, the sales
revenue of KIAs increased by 33.5%. During the first nine months, a total of
2,356 vehicles were sold, whereof 825 vehicles were sold during the third
quarter. The net profit of the segment during the first nine months of 2014 was
1.1 million euros and the net profit of the third quarter was 0.9 million
euros. The profit before taxes of the segment during the first nine months of
2014 was 1.6 million euros, exceeding the profit of the first nine months of
2013 by 5.5%, The net profit of the third quarter of 2014 was 0.9 million euros
which is 67.9% more than the profit of the same period in the year before. 

Footwear trade

The sales revenue of footwear trade segment was 10.2 million euros during the
first nine months of 2014, which is 0.4 million euros less than the sales
revenue of the same period in the previous year. The sales revenue of the third
quarter was 3.3 million euros, which was a 13.2% decrease as compared to the
same period in 2013. The loss of the first nine months was 1.3 million euros.
The loss of the same period in 2013 was 0.2 million euros. The loss of the
third quarter was 0.4 million euros. A year earlier, the result in the third
quarter of 2013 was 0 euros. The sales revenue was influenced by moving the
flagship store of ABC King to the second floor of the Viru centre. The sales
revenue was also decreased due to unfavourable weather conditions: i.e. the
cold weather at the beginning of the summer. Due to this, the sales and gross
marginal were lower than planned. The loss of the third quarter is related to
the planned overhaul of the merchandise portfolio, which also reduces the gross
marginal temporarily. 

Real Estate

The sales revenue of the real estate business segment outside the Group was 2.5
million euros in the first nine months of 2014, which is 0.1 million or 5.7%
more than during the same period in the previous year. The sales revenue
outside the Group was 0.8 million euros in the third quarter, which is 0.04
million or 5% more than during the same period in the previous year. The
increase in sales revenue of the third quarter is due to reorganising leased
spaces in 2013, when the spaces that were previously used by the Group were
leased to persons outside the Group. The profit before taxes of the real estate
segment was 6.7 million euros in the first nine months of 2014 (in 2013, it was
6.5 million euros), which is 0.2 million or 3.5% more than during the same
period in the previous economic year. The profit before taxes of the third
quarter was 2.3 million euros (in the third quarter of 2013, the profit before
taxes was 2.2 million euros), which is 0.1 million or 3.9% more than during the
same period in the previous economic year. The increase in profits was caused
by space leased to other segments of the Group that was added in 2013. 



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

                                      30.09.2014  31.12.2013
------------------------------------------------------------
ASSETS                                                      
------------------------------------------------------------
Current assets                                              
Cash and bank                              5,513      14,766
Trade receivables and prepayments         21,239      15,991
Inventories                               56,863      51,937
Total current assets                      83,615      82,694
------------------------------------------------------------
Non-current assets                                          
Receivables and prepayments                  312         313
Investments in associates                  1,859       1,711
Investment property                        3,035       3,035
Property, plant and equipment            227,194     229,406
Intangible assets                         10,447      10,636
Total non-current assets                 242,847     245,101
------------------------------------------------------------
TOTAL ASSETS                             326,462     327,795
------------------------------------------------------------
                                                            
LIABILITIES AND EQUITY                                      
------------------------------------------------------------
Current liabilities                                         
Borrowings                                 8,734      14,300
Trade payables and other liabilities      70,225      67,725
Total current liabilities                 78,959      82,025
------------------------------------------------------------
Non-current liabilities                                     
Borrowings                                82,736      77,104
Provisions and prepayments                   888         878
------------------------------------------------------------
Total non-current liabilities             83,624      77,982
TOTAL LIABILITIES                        162,583     160,007
------------------------------------------------------------
Equity                                                      
Share capital                             16,292      24,438
Statutory reserve capital                  2,603       2,603
Revaluation reserve                       67,524      68,617
Currency translation differences            -255        -257
Retained earnings                         77,715      72,387
TOTAL EQUITY                             163,879     167,788
------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY             326,462     327,795
------------------------------------------------------------



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros



                                         III         III      9 months  9 months
                                       quarter     quarter      2014      2013  
                                         2014        2013                       
--------------------------------------------------------------------------------
Revenue                                  133,173     124,735   389,533   360,516
Other operating income                       156         152       520       567
                                                                                
Materials, consumables used and         -100,574     -93,599  -295,841  -272,208
 services                                                                       
Other operating expenses                 -12,145     -12,231   -37,963   -37,480
Staff costs                              -10,813      -9,720   -33,894   -29,728
Depreciation, amortisation and            -2,734      -2,726    -8,126    -8,221
 impairment losses                                                              
Other expenses                              -150        -148      -587      -362
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Operating profit                           6,913       6,463    13,642    13,084
--------------------------------------------------------------------------------
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Finance income                                 8           7        19        24
Finance costs                               -392        -350    -1,127      -944
Finance income on shares of                   51          48       148       134
 associates                                                                     
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Profit before tax                          6,580       6,168    12,682    12,298
--------------------------------------------------------------------------------
Income tax                                -1,014           0    -2,338    -3,770
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NET PROFIT FOR THE FINANCIAL YEAR          5,566       6,168    10,344     8,528
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Other comprehensive income:                                                     
Items that will be reclassified                                                 
 subsequently to  profit or loss                                                
Currency translation differences               0         -15         2      -243
--------------------------------------------------------------------------------
Other comprehensive income/loss for            0         -15         2      -243
 the financial year                                                             
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TOTAL COMPREHENSIVE INCOME FOR THE         5,566       6,153    10,346     8,285
 FINANCIAL YEAR                                                                 
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         Raul Puusepp
         Chairman of the Board
         Phone +372 731 5000