Published: 2012-02-15 12:00:00 CET
Tallinna Kaubamaja Grupp
Quarterly report

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

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
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
Total current assets 74,228 67,847
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
Total fixed assets 188,238 192,364
TOTAL ASSETS 262,466 260,211
     
LIABILITIES AND EQUITY , ,
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
Total current liabilities 67,342 67,468
Long-term liabilities    
Borrowings 55,591 63,844
Provisions 73 88
Total long-term liabilities 55,664 63,932
TOTAL LIABILITIES 123,006 131,400
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
TOTAL EQUITY 139,460 128,811
TOTAL LIABILITIES AND EQUITY 262,466 260,211

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros

  12 months 2011 12 months 2010 4th quarter 2011 4th
quarter 2010
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
Operating profit 26,073 18,601 9,154 7,778
Financial income 247 298 66 78
Financial costs -1,897 -2,008 -531 -522
Financial income on shares of associates 150 205 17 62
Profit before income tax 24,573 17,096 8,706 7,396
Income tax -3,035 -450 -4 0
Net profit for the reporting period 21,538 16,646 8,702 7,396
Other comprehensive income        
Revaluation of land and buildings 0 10,771 0 10 771
Exchange differences 515 -80 442 -20
Other comprehensive income for the reporting period 515 10,691 442 10,751
TOTAL COMPREHENSIVE INCOME FOR THE REPORTING PERIOD 22,053 27,337 9,144 18,147

 

         Raul Puusepp
         Chairman of the Board
         Phone +372 731 5000


Bors_Kaubamaja_4Q2011_eng.pdf