TKM: Unaudited consolidated interim accounts for the first quarter of 2016
| Segments (EURm) | Q1/16 | Q1/15 | yoy |
| Supermarkets | 92.8 | 86.3 | 7.6% |
| Department stores | 22.2 | 21.8 | 1.6% |
| Cars | 18.2 | 12.3 | 47.9% |
| Footwear | 2.4 | 2.2 | 8.8% |
| Real Estate | 1.2 | 0.8 | 48.2% |
| Total sales | 136.9 | 123.5 | 10.8% |
| Supermarkets | 2.5 | 1.0 | 137.5% |
| Department stores | -0.2 | -0.2 | -22.3% |
| Cars | 0.5 | 0.5 | -0.4% |
| Footwear | -0.5 | -0.7 | -26.7% |
| Real Estate | 2.8 | 2.1 | 29.6% |
| Total profit before tax | 5.0 | 2.7 | 84.9% |
The total consolidated unaudited sales revenue of Tallinna Kaubamaja Group of the 1st quarter of 2016 amounted to 136.9 million euros. Compared to the 1st quarter of 2015, when the sales revenue was 123.5 million euros, the growth was 10.8%. The sales revenue increased in all segments of the Group. The net loss of the accounting period was 0.2 million euros due to income tax calculated from dividends in the amount of 5.2 million euros. The loss of the 1st quarter of 2015 was 1.2 million euros, including income tax in the amount of 3.9 million euros. The profit before tax was almost twice as high compared to the previous year, amounting to 5.0 million euros.
The 1st quarter results of this accounting year are successful in every aspect. Sales revenue grew across all segments, as did the EBITDA. The success was a result of carefully considered marketing campaigns, well-planned stock management and improving of the service quality. Sales was also supported by the economic environment with its favourable consumption dynamics and the specifics of the 2016 calendar – the leap year and the early Easter holidays. Viimsi Selver and e-Selver that were successfully launched in 2015 had a significant positive impact on sales revenue. Positive sales results in the footwear trade segment and reduced losses confirm right choices in footwear brand selection combined with changes in the type of service. The growth of profit before tax was supported by improved margin as a result of the optimisation of trade processes and the administrative expenses. The winter, which arrived at the beginning of the year, benefitted the sale of fashion goods by reducing the depth of the end of season discount campaign for fashion goods. Labour costs were increased by the extended stores network and implementing a remuneration system, based on good sales’ results.
Selver supermarkets
The consolidated sales revenue of the supermarket segment in the 1st quarter of 2016 and the sales revenue in Estonia were 92.8 million euros, increasing by 7.6% compared to the previous yearThe sales revenue of a subsidiary of Selver, Kulinaaria O?, increased in the 1st quarter of 2016 by 10.6% compared to the previous year. 8.2 million purchases were made from Selvers in the 1st quarter of 2016, remaining at the level of the previous year. The consolidated profit before tax of the supermarket segment was 2.5 million euros in the 1st quarter of, of which the profit earned in Estonia formed 3.0 million euros, increasing by 1.3 million euros compared to the previous year. The consolidated net loss of the supermarket segment was 0.1 million euros, the loss was 1.0 million euros smaller than the results of the previous year. The net profit earned in Estonia amounted to 0.4 million euros in the 1st quarter of 2016, exceeding the results of the previous year by 0.9 million euros. The difference between net profit and profit before tax arises from income tax paid from dividends – in 2016, the income tax from dividends was 0.4 million euros higher than in the previous year. The profit before tax and net profit earned in Latvia were 0.5 million euros in 2016. The loss decreased by 16.4% compared to the previous year. The business in Latvia has been frozen. The increase in the revenue from the sales of goods in the 1st quarter of 2016 has been supported by successful campaigns and holiday season sales. Improvement of the economic security of the consumers, an increase in the real income of the people and the activities undertaken to improve the selection offered to the customers have increased the value of the average shopping cart. The reference base of the 1st quarter of 2016 does not include Viimsi Selver (Viimsi Selver, the seventh hypermarket of the chain, was opened in August 2015) or the e-Selver opened in the end of the year. Compared to the base year, the 1st quarter of 2016 included one additional day due to the leap year and was affected by Easter holidays shifting from April to March. The number of purchases from the perspective of comparable Selvers has also increased, primarily led by the Selver stores opened in the last five years, which still remain in the above-the-average growth phase and gain new customers in the conditions of tight competition. The profit earned in Estonia was primarily affected by an increase in the gross profit from the sales of goods, which was above all achieved through changes in the operating principles of the sales of goods and by optimising the process of purchasing of goods. With respect to operational expenditure, the level of cost-efficiency has been improved compared to the previous year.
Department stores
The sales revenue of Kaubamaja department stores’ business segment in the first 3 months of 2016 was 22.2 million euros, representing an increase of 1.6% compared to the same period of the previous year. The loss before tax of the department stores in the 1st quarter of 2016 was 0.2 million euros, which is 22.3% better compared to the results of the year before. The sales revenue of the department stores was affected by renovation works in the Ilu- ja Naistemaailm (Beauty and Women) department in Tartu, which interfered with business on the first floor of the building in Tartu The results of the department stores were positively influenced by well-led discount campaigns and the winter which had helped to increase the sale of winter goods. In the beginning of March, a Kaubamaja e-store was opened, with the number of products in the selection already amounting to 20,000 at the time of opening. The products sold at the e-store are photographed by using modern photo robots. The works on the renovated Ilu- ja Naistemaailm (Beauty and Women) department in the department store of Tartu were completed. Both the sales areas and the brand selection have been renewed. In addition to top brands, the selection was complemented with Estonian design from Tiina Talumees and August. The sales revenue of O? TKM Beauty Eesti, which operates the I.L.U. beauty stores, amount to 1.6 million euros in the 1st quarter of 2016, increasing by 3.1% compared to the same period of the previous year. The loss of the first quarter was 0.1 million euros, which is 3.9% lower than the loss of the comparable period of 2015. The result of the 1st quarter was positively impacted by successful sales campaigns and changes in the selections of the stores located outside of Tallinn.
Car Trade
The sales revenue of car trade segment of the 1st quarter of 2016 was 18.2 million euros. The sales revenue increased by 47.9% compared to the previous year, with the sales revenue of KIAs increasing by 39.4%. A total of 886 new vehicles were sold in the first three months of the year. The profit before tax of the segment of the 1st quarter of 2016 was 0.5 million euros, remaining at the same level with the profit of the comparable period of the previous year. In the 1st quarter, KIA’s popular core models KIA Optima and crossover SUV KIA Sportage were launched and the entire Baltic dealership network was supplied with demo and salon cars. A significant contribution in the growth of the sales revenue of the vehicle segment, although with a thinner margin than provided by regular sales, was gained from the increased sales of Forum Auto SIA as a result of winning a high-volume public procurement; wholesale selling to enterprises also grew in Latvia.
Footwear trade
The footwear trade segment sales revenue of the 1st quarter of 2016 was 2.4 million euros, increasing by 8.8% compared to the same period of the previous year. Sales revenue growth was achieved, regardless of the late spring, thanks to a better commodity composition, where the assortment of goods and the portfolio of brand products were moved closer to the expectations of the target customer. The company’s level of stocks and their age structure have been optimised. The positive change is also reflected in the financial results of the segment. The net loss of the quarter was 0.5 million euros, which is a better result than planned and 26.7% lower compared to the 1st quarter of 2015.
Real Estate
The external sales revenue of the real estate segment in the 1st quarter of 2016 was 1.2 million euros. The sales revenue increased by 48.2% compared to the previous year. The profit before tax of the real estate segment in the 1st quarter of 2016 was 2.8 million euros, which is 29.6% better compared to the results of the year before. The increase in the sales revenue was supported by the 14,000-square metre Viimsi Center opened in August 2015 and by renting the building in Rezekne Latvia to an external party.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
| 31.03.2016 | 31.12.2015 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 14,087 | 13,911 |
| Trade and other receivables | 12,801 | 20,191 |
| Inventories | 65,491 | 61,110 |
| Total current assets | 92,379 | 95,212 |
| Non-current assets | ||
| Long-term trade and other receivables | 293 | 293 |
| Investments in associates | 1,824 | 1,778 |
| Investment property | 44,981 | 44,963 |
| Property, plant and equipment | 196,749 | 196,691 |
| Intangible assets | 8,894 | 9,043 |
| Total non-current assets | 252,741 | 252,768 |
| TOTAL ASSETS | 345,120 | 347,980 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 34,366 | 33,377 |
| Trade and other payables | 73,438 | 77,066 |
| Total current liabilities | 107,804 | 110,443 |
| Non-current liabilities | ||
| Borrowings | 57,419 | 57,426 |
| Provisions for other liabilities and charges | 502 | 502 |
| Total non-current liabilities | 57,921 | 57,928 |
| TOTAL LIABILITIES | 165,725 | 168,371 |
| Equity | ||
| Share capital | 16,292 | 16,292 |
| Statutory reserve capital | 2,603 | 2,603 |
| Revaluation reserve | 65,337 | 65,701 |
| Currency translation differences | -255 | -255 |
| Retained earnings | 95,418 | 95,268 |
| TOTAL EQUITY | 179,395 | 179,609 |
| TOTAL LIABILITIES AND EQUITY | 345,120 | 347,980 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
| 3 months 2016 | 3 months 2015 | ||
| Revenue | 136,850 | 123,458 | |
| Other operating income | 267 | 231 | |
| Cost of sales | -102,848 | -93,401 | |
| Other operating expenses | -12,759 | -12,558 | |
| Staff costs | -13,298 | -11,716 | |
| Depreciation, amortisation and impairment losses | -2,806 | -2,849 | |
| Other expenses | -241 | -229 | |
| Operating profit | 5,165 | 2,936 | |
| Finance income | 2 | 8 | |
| Finance costs | -208 | -283 | |
| Finance income on shares of associates | 46 | 47 | |
| Profit before tax | 5,005 | 2,708 | |
| Income tax expense | -5,219 | -3,873 | |
| NET LOSS FOR THE FINANCIAL YEAR | -214 | -1,165 | |
| Other comprehensive income: | |||
| Items that may be subsequently reclassified to profit or loss | |||
| Currency translation differences | 0 | 0 | |
| Other comprehensive income for the financial year | 0 | 0 | |
| TOTAL COMPREHENSIVE LOSS FOR THE FINANCIAL YEAR | -214 | -1,165 | |
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