TIIMARI OYJ ABP STOCK EXCHANGE RELEASE 12 November 2007
TIIMARI OYJ ABP INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2007 at 9.00
Tiimari result as expected considering seasonality
KEY FIGURES OF THE CONTINUED OPERATIONS ON REVIEW PERIOD 1 JANUARY -
30 SEPTEMBER 2007:
- Turnover MEUR 43.3 (MEUR 2.8)
- EBITDA MEUR -0.7 (MEUR 0.3, result MEUR -4.0 (MEUR 0.3) both including a MEUR
1.4 acquisition cost depreciation of inventory
- Earnings per share MEUR -0.40 (MEUR 0.05)
- Signing of the lease for the first Russian store
- Leo Longlife Design Oy changed its name to Tiimore Oy and opened a web shop
STATEMENT OF THE MANAGING DIRECTOR
In the third quarter, Tiimari continued the development of both domestic and
foreign retail operations. In the beginning of the year, several stores were
renewed according to the introduced concept. The renewal process cut down the
sales of the group, several stores being closed during the renewal, but sales of
the stores reflecting the new concept evolved better than before, as was
expected. The modernisation of Tiimari Kaivopiha, the largest Tiimari store, is
one of the renewal projects started during the review period.
Tiimari continued its international expansion by signing the lease for opening
the first Tiimari store in St. Petersburg for the Christmas season and for
opening the fourth Polish store in Bialystok in November.
Business gift merchandiser Leo Longlife Design Oy, owned by Tiimari Plc, changed
its name to Tiimore Oy on 23 August 2007.
The change of name became actual after the product assortment and operations
model of the company were changed and expanded substantially. Previously
consisting mainly of Leo Longlife Design products, the assortment was expanded
by utilising the purchasing and logistics expertise of Tiimari Retail Oy. In
addition to using traditional sales representatives, a web shop was opened at
www.tiimore.com on 23 August.
The CRM and ordering systems were also modernised.
At the end of the review period, Tiimari had a total of 178 own stores, the
number of the equivalent period in 2006 being 182 stores.
30.9.2007 30.9.2006
Finland 156 156
Estonia 14 17
Latvia 4 4
Norway 1 2
Poland 3 2
Sweden 0 1
In addition, Tiimari had partnership stores and franchise stores as follows
30.9.2007 30.9.2006
Partnership stores 6 7
Franchise stores 10 9
At the end of the review period, the Tiimari retail chain consisted of a total
of 194 (198) stores.
A central part of Tiimari's strategy is to increase the number of stores and to
optimise their location and size in square metres.
FINANCIAL RESULT
The turnover of the Tiimari group in the review period was MEUR 43.3 (MEUR 2.8).
In the period of comparison from 1 January to 30 September 2006, the company
engaged exclusively in the sale of business gifts and related industrial
operations.
Turnover reached MEUR 14.8 (MEUR 1.5) in the third quarter. Earnings before
interest, taxes, depreciation and amortization (EBITDA) reached a total of MEUR
-0.7 (MEUR 0.3) in the review period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) reached
a total of MEUR -0.5 (MEUR -0.03) in the third quarter.
EBITDA of the third quarter includes MEUR 1.4 of inventory write-offs that are
related to the acquisition of Maritii Oy. After tax, the earnings of the review
period were MEUR 4.0 (MEUR 0.3).
The result of the financial period was MEUR -1.2 (MEUR 0.05) in the third
quarter. Earnings per share from continued operations were EUR -0.13 (EUR 0.00)
BALANCE, FINANCIAL SITUATION AND INVESTMENTS
On 30 September 2007, the total balance of Tiimari Plc was MEUR 83.6 (MEUR
21.1). The company has a solid financial situation. Interest-bearing net
liabilities accounted for MEUR 37.0 (MEUR -15.1), the solvency ratio was 36.4 %
(89.0 %) and the net gearing 121.6 % (-80.5 %). Seasonal fluctuations have a
considerable impact on the company's financial situation. Despite the seasonal
fluctuations, the company managed to reduce its stock as compared to the
beginning of the year, and an increased level of stock rotation is pursued in
the future as well.
During the review period, the central investments were made in the retail store
network, totalling at MEUR 0.6.
HUMAN RESOURCES
The number of people employed by the group on 30 September 2007 was 559 (40) and
on average 562 (40),of whom the most worked for Tiimari Retail Oyj. The parent
Company employed 1 (5) person, and Leo Longlife Design Oy employed 37 (35) and
on average 37 (35) persons.
GROUP STRUCTURE
The Tiimari Plc group consists of parent company Tiimari Plc and directly
or indirectly entirely owned Maritii Oy (Helsinki), Tiimari Retail Oyj
(Lahti), Tiimari Sweden AB (Stockholm), Tiimari Baltic AS (Tallinn), Tiimari
Latvia SIA (Riga), Tiimari Polska SP Z.O.O (Warsaw), Tiimari Moscow Z.A.O.,
Tiimari St. Petersburg O.O.O., Tiimore Oy and Tuotesampo Oy (Tuotesampo Oy has
no operations). The group includes also Tiimari Norway AS (Oslo), of which the
group's share of ownership is 67.8% and the joint-stock property company
Osuuskunnantie 30, which is a 10% subsidiary of Tiimari Plc and a 90% subsidiary
of Tiimore Oy.
SHARE CAPITAL
At the end of the review period, the registered share capital of Tiimari Plc
totalled at EUR 7,686,200, representing an aggregate number of 9,847,750 voting
rights. The Company had a total of 2672 shareholders.
At the end of the review period, the number of own shares held by the company
was 11,850. The number of shares corresponds to that held at the beginning of
the period. The nominal value of shares held by the Company was MEUR 0.01 and
the proportion of share capital and voting rights was 0.12%.
DEVELOPMENTS AFTER THE REVIEW PERIOD
Tiimari group acquired the Swedish retail chain Gallerix under a transaction
signed on 1 November 2007. The Gallerix chain operates mainly on the franchising
principle. The primary purchase price of the entire share capital of Gallerix
International AB was MSEK 65.5 (approx. MEUR 7.1). In addition, a maximum
additional purchase price of MSEK 21.0 (approx. MEUR 2.3) was agreed on. The
amount of the additional price depends on Gallerix's financial development up to
the end of the year. Gallerix will be consolidated with Tiimari with effect from
1 November 2007.
Gallerix is the leading Swedish retail chain specialising in wall decoration
items, gift wrapping items and cards. The company has 92 stores in Sweden and
one store in Finland. The acquisition is estimated to create definite synergies,
the total annual value of which is projected to total at over MEUR 1. The
synergies are estimated to realise in full within the next two-year period.
During the period from 1 September 2006 to 31 August 2007, Gallerix
International AB turnover was MEUR 12.55 and the operating margin MEUR 0.9. The
total balance of the acquired company on 31 August 2007 was MEUR 4.6. Tiimari is
currently calculating the precise acquisition effects.
Tiimari will profit from Gallerix's measurable franchising expertise, solid
knowledge of the Swedish markets and the opportunity to establish a more
extensive clientele. The merger will boost domestic business growth. The
established company will be a more favourable partner to shopping centres and
other store facility leaseholders through the combined appeal of two vibrant
concepts. The combination of these strong concepts will strengthen the position
of the new company also when obtaining new business facilities in the Baltic
countries, Poland and in Russia.
The Gallerix retail concept fits the Finnish market well. In addition to
individual specialized stores, mainly home decoration departments of department
stores are currently focusing on the increasingly popular wall furnishing and
decoration trend in Finland. Tiimari Plc is planning to convert and open several
stores under the Gallerix concept within the next year.
Tiimari continued the launch of the new store concept by modernising the stores
located in Keskuskatu in Helsinki (12 October) and in Yliopistonkatu, Turku (25
October). During the transition, the store in Kemi was renewed (1 October). New
stores were opened in Ahjokatu in Jyväskylä (7 November), the Atomi shopping
centre in Riihimäki (1 November) and to the immediate vicinity of the new Prisma
supermarket in Viikki (8 November). In addition, Tiimari has signed a lease for
opening a store in the Revontuli shopping centre in Rovanienmi in December.
Tiimari continues its international expansion by opening a new store with a
floor space of 206 m2 in Bialystok, North-Eastern Poland in the beginning of
November. The store will be located in a new shopping centre, Galleria Podlaska,
which is being constructed around Carrefour. In addition to local Polish
consumers, the proximity of the trade centre to the border will attract
Byelorussian consumers as well.
Tarja Nikkarikoski, Student of Philosophy holding a vocational qualification in
Business information Technology, was appointed the Chief Information Officer of
Tiimari Plc and a member of the Management Group with effect from 15
October 2007.
FUTURE PROSPECTS
Tiimari Plc will open 7 new stores during November and December, 5 of which will
be located in Finland, one in Poland and one in Russia. The acquired Gallerix
retail chain will be consolidated with the Tiimari group with effect from 1
November.
The anticipated turnover of the entire year 2007, including the turnover of
Gallerix is approximately MEUR 77.0, the forecasted earnings before interest,
taxes, depreciation and amortization (EBITDA) being approximately MEUR 8.0 and
including yet for this year the MEUR 1.4 acquisition cost depreciation of
inventory for Maritii Oy but not the possible depreciation related to the
acquisition of Gallerix. This is based on the reported result of the final
quarter of the previous year, adjusted with the non-recurring inventory
write-off and acquisition cost depreciation and consolidated with the result of
1 January - 30 September 2007. The anticipated result of 2007 is clearly
positive. As last year, the majority of the earnings are entered as income
during the last quarter.
SHORT-TERM RISKS AND UNCERTAINTIES
The biggest challenges that Tiimari is faced with are the fluctuations in the
general
consumption, demand and the competition environment, as well as
the attainability of advantageous business locations in the international
market. Tiimari is currently concentrating heavily on developing its stores and
marketing activities. The company is seeking growth in the number of visitors
and the amount of purchases per visitor, as well as developing its international
operations. Managing the potential growth requires investments in
administration, new locations, internationalization and recruiting more staff.
Tiimari strives to prepare for changes in consumer demand and the competition
environment by knowing the consumer, constantly developing the Company concept,
and by implementing new and innovative business solutions.
ACCOUNTING PRINCIPLES
This Interim Report has been prepared according to the Recognition and
Measurement principles of the International Financial Reporting Standards
(IFRS). This Interim report is unaudited.
All the future estimates and forecasts made here are based on the company's
current vision of the market and economical developments. Actual events and
results may differ considerably. Due to the fact that Tiimari Plc had yet not
engaged in Tiimari Retail operations one year ago, the business operations
cannot, as such, be compared to the equivalent quarter of the previous year.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
EUR 1,000 2007 2006 2007 2006 2006
7-9 7-9 1-9 1-9 1-12
Continued operations
TURNOVER 14,804 1,556 43,278 2,779 32,819
Other operating income 9 8 171 8 346
Change in inventories 352 -211 -509 -80 -8,992
Materials and supplies -6,865 -1,059 -16,876 -1,201 -7,667
Work benefit and reward expenses -3,519 -177 -11,114 -727 -4,717
Depreciation -534 -33 -1,645 -102 -871
Other operating costs -5,161 -147 -15,615 -465 -4,900
Operating profit / loss -914 -63 -2,310 212 6,018
Financial income and expenses -634 128 -1,974 238 -793
Profit / loss before taxes -1,548 65 -4,284 450 5,225
Taxes 303 -17 303 -130 -396
Profit/loss for the review period
from continued operations -1,245 48 -3,981 320 4,829
Discontinued operations
Profit
from discontinued operations 0 183 0 1,465 1,460
Profit/loss for the financial year -1,245 231 -3,981 1,785 6,289
Parent company shareholders'
profit earnings
per share
Undiluted earnings per share
Continued operations -0.13 0.00 -0.40 0,05 0.70
Discontinued operations 0.03 0.22 0.21
The adjusted value with the dilution effect
earnings per share correspond to those of the
undiluted earnings per share
CONSOLIDATED BALANCE SHEETS
30.09.07 30.09.06 31.12.06
ASSETS
Business value 32,987 0 35,392
Other intangible assets 15,009 27 15,387
Tangible assets 3,408 423 9,890
Investment properties 0 0 0
Other financing resources 114 11 114
Receivables 79 8 134
Imputed tax credit 1,584 0 0
Total long-term assets 53,181 469 60,917
Current assets 24,934 2,480 25,206
Trade and other receivables 4,222 1,357 3,852
Liquid assets 1,273 15,170 8,323
Total current assets 30,429 19,007 37,381
Non-current assets
held for sale 0 1,647 830
TOTAL ASSETS 83,610 21,123 99 128
SHAREHOLDERS' EQUITY AND LIABILITIES
Parent Company's shareholders
equity
TOTAL SHAREHOLDERS' EQUITY 30,462 18,798 35,891
LIABILITIES
Imputed tax credit 5,642 0 6,552
Interest-bearing liabilities 24,602 30 20,835
Provisions 27 0 45
Total non-current liabilities 30,271 30 27,432
Interest-bearing liabilities 13,708 0 21,080
Provisions 22 0 0
Accounts payable and other payables 9,147 1,930 14,040
Current tax 0 365 165
Total current liabilities 22,877 2,295 35,285
Liabilities related to non-current
assets held for sale 0 0 520
TOTAL LIABILITIES 53,148 2,325 63,237
TOTAL SHAREHOLDERS' EQUITY 83,610 21,123 99,128
AND LIABILITIES
CALCULATION OF CHANGES TO THE GROUP'S SHAREHOLDERS' EQUITY
Parent Company's shareholders' equity
Calculation of changes to shareholders' equity 1.1.-30.9.2007
Invested
free
Own Current
Share equity Own value Accumulated
Own equity equity fund shares fund Transl. diff. profits Tot.
1.1.2007
Own equity 7,686 11,558 -55 0 -27 16,729 35,891
Transl. difference conversion 16 16
Profit/loss for the financial period -3,981 -3,981
Total recognised profit
and loss 16 -3,981 -3,965
Distribution of dividend -1,477 -1,477
Equity-settled
share-based payments 13 13
Own equity 7,686 11,558 -55 0 -11 11,284 30,462
30.9.2007
Calculation of changes to shareholders' equity 1.1.-30.90.2006
Invested
free
Own Current
Share equity Own value Accumulated
Own equity equity fund shares fund Transl. diff. profits Tot.
1.1.2006
Own equity 6,600 0 -119 -6 0 13,773 20,248
Profit/loss for the financial period 1,785 1,785
Total recognised profit
and loss for the
period 1,785 1,785
Issue
of own shares 64 64
Distribution of dividend -3,300 -3,300
Other items 1 1
Own equity 6,600 0 -55 -6 0 12,259 18,798
30.9.2006
CASH FLOW STATEMENT
1-9/07 1-9/06 1-12/06
Consolidated statements of cash flows
Cash flows from operations
Profit/loss for financial period -3,981 1,784 6,289
Adjustments:
Depreciation and decrease in value 1,644 102 871
Financial income and expenses 1,973 -238 793
Taxes -303 169 435
Other adjustments -135 0 -361
Change in working capital:
Change in short-term receivables -190 -1,115 -102
Change in inventories 271 734 9,308
Change in short-term liabilities -4,858 -346 -1,180
Interests paid -1,962 0 -3,548
Interest income received 66 8 305
Taxes paid -227 -155 -145
Net cash flow from operations -7,702 943 12,665
Cash flows from investment activities
Investments in tangible and intangible
assets -811 7 -51
Acquisitions of subsidiary companies
net of cash acquired 0 0 -22,325
Capital gains from
tangible and intangible assets 6,680 0 1,494
Repayment on other receivables 0 0 0
Repayment on loan receivables 55 4 2
Additional purchase price -1,500 0 0
Net cash flow from investments 4,424 11 -20,880
Cash flows from financing activities
Share issue 0 0 12,644
Long-term loans, increase 0 0 13,859
Long-term loans, decrease -2,975 0 -34,836
Purchase and issue of own shares 0 64 64
Long-term loans, increase 3,174 0 32,974
Long-term loans, decrease -5,014 0 -20,617
Short-term loans, decrease -3,980 0 0
Dividends paid -1,477 -1,584 -3,286
Net cash flow from financing -3,772 -1,520 802
Change in financial resources -7,050 -566 -7,413
Liquid assets January 1, 2007 8,323 15,736 15,736
Liquid assets September 30, 2007 1,273 15,170 8,323
SEGMENT-SPECIFIC FIGURES
The Company's continued operations form two primary
Business segments: Tiimari Retail Oyj and Tiimore Oy.
Turnover by segment
EUR 1000 2007 2006 2007 2006 2006
7-9 7-9 1-9 1-9 1-12
Turnover
Tiimari business operations 14,592 0 41,916 0 27,478
Tiimore business operations 212 213 1,362 979 1,622
Other operations 0 1,343 0 1,800 3,719
Total 14,804 1,556 43,278 2,779 32,819
Profit / loss
Tiimari business operations -703 0 -1,958 0 6,717
Tiimore business operations -269 -185 -326 -183 -385
Other operations 58 122 -26 395 -314
Total -914 -63 -2,310 212 6,018
Assets and liabilities by segment 30.09.2007 30.09.2006 31.12.06
Assets by segment EUR 1 000
Tiimari business operations 80,610 0 88,716
Tiimore business operations 3,967 1,136 3,660
Unaligned assets 4,100 19,987 11,584
Elimination -5,067 0 -4,832
Total 83,610 21,123 99,128
Liabilities by segment EUR 1 000
Tiimari business operations 8,219 0 15,101
Tiimore business operations 596 172 357
Unaligned liabilities 49,973 2,153 53,224
Elimination -5,640 0 -5,445
Total 53,148 2,325 63,237
CONTINGENT LIABILITIES 30.09.2007 30.09.2006 31.12.06
Financial institution loans against
the following securities 25,193 0 24,617
Real estate mortgages 2,361 0 8,029
Corporate mortgages 31,137 0 31,137
Pledged shares 1,476 0 1,476
Other own liabilities:
Irrevocable letters of credit 0 0 292
Other liabilities 13 13 13
OTHER TENANCY LIABILITIES
Due within one year 10,057 0 10,577
Due after one year 6,079 0 2,619
GROUP INVESTMENTS AND DEPRECIATIONS EUR 1,000
2007 2006 2006
1-9 1-9 1-12
Gross investments 931 8 150
Depreciations 7,228 2,000 859
CHANGES TO GROUP'S FINANCIAL INSTITUTION LOANS
30.09.07 30.09.06 31.12.06
Increase 9,674 0 46,833
Decrease -7,989 0 -55,451
Loan repayments -3 980 0 0
Total of changes -2,295 0 -8,618
KEY INDICATORS
1-9/07 1-9/06 1-12/06
Turnover 43,278 2,779 32,819
Operating profit / loss -2,310 212 6,018
Result of the financial period -3,981 319 4,829
Earnings / share, EUR -0.40 0.22 0.91
Earnings / share, from continued oper, EUR -0.40 0.05 0.70
SH equity / share, EUR 3.09 2.85 3.64
SH equity / share (diluted), EUR 3.09 2.85 3.64
Solvency ratio 36.43 % 88.99 % 36.20 %
Gearing (level of indebtedness) 121.58 % -80.54 % 95.05 %
Balance sheet total 83,610 21,123 99,128
Number of shares (average) 9,847,750 6,600,000 6,864,386
Interest-bearing net liabilities 37,037 -15,140 33,593
CALCULATION OF KEY INDICATORS
Earnings/share (EPS), EUR=
(Earnings before extraordinary items - taxes) / Avg. number of shares adjusted
for the share issue.
Shareholders' equity/share, EUR=
Shareholders' equity / Number of shares at the end of the preview period
Solvency ratio-%=
(Shareholders' equity*100)/(Balance sheet total-advance payments received)
Level of indebtedness (gearing)=
(Interest-bearing liabilities-cash at bank) * 100/SH equity
Interest-bearing net liabilities
Interest-bearing liabilities - cash at bank
SHAREHOLDERS
On 30.09.2007, Tiimari Plc had a total of 2672 shareholders.
Major shareholders, 30.09.2007
% of shares
Shares and voting rights
Atine Group Oy 2,081,216 21.1
Assetman Oy 1,000,000 10.2
Baltiska Handels A.B. 455,224 4.6
Cumasa Oy 407,625 4.1
Varma Mutual Pension Insurance Company 375,000 3.8
Ilmarinen Mutual Pension Insurance Company 351,781 3.6
Nordea Bank Finland Oyj, administrative reg. 339,409 3.4
Pohjola Non-Life Insurance Company 202,092 2.1
Troll Capital Oy 127,000 1.3
Suomen Kauppayhtiöt Oy 125,000 1.3
Tapiola Suomi Mutual Fund 103,602 1.1
Arvo Finland Value Mutual Fund 100,000 1.0
Moneda Consulting Oy 87,500 0.9
Syrjänen Jaakko 61,875 0.6
Illi Kristina 60,000 0.6
EQ Pankki Oy 50,000 0.5
Nordea Bank Finland Plc 50,000 0.5
Turpeinen Urho 50,000 0.5
Jyväsjärvi Juha 35,000 0.4
Lamy Oy 32,625 0.3
Mezera Oy 31,250 0.3
Mäki Raimo 30,500 0.3
Potrykus Yvonne 30,000 0.3
Kallio Mika 29,687 0.3
Brade Jouko 28,750 0.3
Kristina Illi
Managing Director
Distribution: Helsinki Stock Exchange
Key media
www.tiimari.com
Further information: Managing Director Kristina Illi, tel. +358 (0)400 408 889