TIIMARI PLC Interim report 6 May 2010 at 08.30
INTERIM REPORT
THE POSITIVE REVENUE DEVELOPMENT CONTINUED
Highlights for the quarter
- Revenue grew by 5.2 % and was EUR 16.2 million (15.4)
- Gross margin was EUR 9.0 million (9.5) and 55.1 % (61.6)
- EBITDA was EUR -2.5 million (-2.5)
- Result for the period was EUR -3.2 million (-3.3)
- Profit before tax was EUR -3.7 million (-4.2)
- Earnings per share were EUR -0.22 (-0.37)
- Four out of five Tiimari shops in Sweden and two out of three
Gallerix shops in Finland were closed at the end of the period
COMMENTS OF THE MANAGING DIRECTOR
Managing Director of Tiimari, Hannu Krook:
”Tiimari Group sales grew by over 5 % during the first quarter, of which 2 % was
due to the appreciation of the Swedish krona. The growth was partly due to the
Easter sales occurring in March as a whole, but also the April comparable sales
being over three percent higher than last year. The reported gross margin % did
fall compared to last year. The gross margin during the beginning of the year
is negatively affected by the impairment policy compliant depreciation of the
2006 large purchases. Furthermore, the product mix and the appreciation of the
US dollar had a significant effect on gross margin. The decline in the Baltic
sales has stagnated and the executed cost saving measures have kept
profitability levels at forecasted levels.
We have successfully managed to execute the closure of our non-profitable
operations in Tiimari Poland and Sweden as well as Gallerix Finland during the
first quarter. As part of the domestic efficiency measures in Tiimari
cooperation negotiations were held, which resulted in further streamlining our
headquarter operations, optimisation of the shop working hours in relation to
the customer flows and initiation of the closure of domestic non-profitable
shops.
According to the company strategy the gradual distribution of the party concept
started from our biggest shops. During the coming year we will be spending a
large part of our investment budget for facelift investments in the profitable
core, the Tiimari shops in Finland. To emphasise the party concept, so called
balloon bars have been built into our 50 biggest shops. One can find a diverse
party supply offering for various occassions from all our shops.
In the future, we will focus on our core operations and the development of
these. We will sharpen the Tiimari concept in terms of both category management
as well as physical shop concepts and presentation. In the Gallerix operations
we will focus on developing our strengths in the product offering, but also in
the quest for new customers via the familiar and synergetic product areas from
Tiimari. The working capital related efficiency measures will continue
aggressively and the first signs of an improved turnover rate are already
visible.”
GROUP FINANCIAL RESULTS
The Group's revenue grew by 5.2 % and was EUR 16.2 million (15.4). The sales for
the significant Easter period occurred as a whole in the first quarter, in the
review period part of this period occurred in the beginning of April. The
appreciation of the Swedish krona increased revenue by 2.2 %-units.
The gross margin was EUR 9.0 million (9.5), that is 55.1 % (61.6). The
comparatively weaker gross margin was partly due to the closure of the shops in
Sweden, the extraordinarily large depreciations according to plan, the reduced
sales periods in January and the changes in the product mix. The gross margin %
for continuing operations was 55.3 % (60.6).
The operating profit for the Group increased somewhat compared to the review
period as was EUR -3.2 million (-3.3).
The net financing expenses decreased and were EUR 0.5 million (0.8).
The result for the period was EUR -3.7 million (-4.2).
The result for the review period includes EUR -0.1 million of result from
discontinued operations.
Earnings per share were EUR -0.22 (-0.37).
OPERATING SEGMENTS
TIIMARI
The Tiimari segment comprises all Tiimari concept compliant shops in Finland and
abroad. The revenue for the segment grew by 4.6 % and was EUR 13.0 million
(12.5). The development of the revenue was affected by the Easter period sales
accumulating as a whole in the first quarter. Tiimari has withdrawn from Poland,
Russia and Norway and no revenue has been reported during the current period.
Additionally, during the spring the operations of Tiimari Sweden were included
in the so called inactive markets, which revenue totalled EUR 0.4 million. The
revenue for the inactive markets in the review period was EUR 0.6 million. The
weak economic development in the Baltic markets still had a negative effect on
sales, which was EUR 0.7 million during the current period (0.8). There were 192
own shops at the end of the current period (206), of which 168 were in Finland
(168). At the end of the current period four out of five shops were closed in
Tiimari Sweden and the last shop will be closed later in the spring.
The withdrawal from certain markets, the extraordinarily large depreciations of
old products, the change in the product offering and the discounted sales
periods in January decresed gross margin, which allbeit was nearly at forecasted
levels.The gross margin was EUR 7.8 million (8.4)or 60 % (68). The gross margin
for continuing operations was EUR 7.6 million (8.0) or 60 % (67).
The operating profit for the segment increased slightly and was EUR -2.4 million
(-2.6). The share for the discontinued operations was EUR +0.0 million (-0.4).
From the transfer of the rental agreements in Sweden EUR 0.2 million was booked
as other operating profit. The operating profit was unhelpfully affected by the
weaker gross margin for the beginning of the year compared to the review period,
but the centralisation of operations has the opposite effect. In Finland, the
increase in the number of shops, salary increases and organisational
arrangements increased the personnel expenses from the review period. The
executed efficiency measures related to working hours limited the increase in
total labor costs. The closure of operations in non-profitable markets reduced
the level of fixed costs significantly.
The renewal of Tiimari's product offering and development of the party concept
product offering was continued. The full party offering was available in a few
of the biggest shops at the end of the current period and the renewal of the
offering and distribution of the concept into our shops will continue strongly
during the second quarter.
The capital expenditure for the segment during the current period was EUR 0.1
million (0.4) and they were allocated towards renewal of shops.
GALLERIX
The Gallerix segment comprises all Gallerix concept compliant shops in Sweden
and Finland. The revenue for the Gallerix segment grew by 7.8 % and was EUR 3.2
million (3.0). The increase in revenue was due to the appreciation of the
Swedish krona and there was a marginal decline in comparable revenue because own
shops were closed in Sweden and Finland. At the end of the current period only
one own shop was open in Finland (7) and in Sweden there were 11 own shops (14).
In Sweden, a major part of the operations are based on franchise agreements and
there were 76 (79)shops operating according to this agreement.
The gross margin was EUR 1.2 million (1.1) or 36.8 % (36.3). The gross margin
increased due to renewal of the product offering, although the reduction in own
shops had a unhelpful effect on the gross margin.
The operating profit increased slightly and was EUR -0.3 million (-0.4) or -8.2
% (-14.7).
The capital expenditure for the segment was EUR 0.0 million (0.2).
OTHERS
Common expenses and senior management are reported as other operations. The
operating profit was EUR -0.6 million (-0.3). During the current period no intra
group management fees have been invoiced (0.4) and expenses include dispute
related expenses and reserves totalling EUR 0.2 million (0.0).
PROFIT-IMPROVEMENT PROGRAMME
At the beginning of the financial year cooperation negotiations were initiated
in Finland and as a result personnel changes occured in group management,
several shops were closed in Finland and other markets and improved working hour
recommendations in the shops were implemented. The working hours will in the
future be guided primarily based on customer numbers. The savings in personnel
expenses relating to these measures will be recognised from the second quarter
onwards.
At the turn of the financial year we withdrew from the Polish markets, during
2009 withdrawals occurred from the Russian and Norwegian markets and during the
current period two Gallerix shops were closed in Finland and four Tiimari shops
in Sweden, according to the Group's focus strategy.
Capital expenditure during the current period was EUR 0.1 million (0.6). The
current assets were EUR 15.5 million and grew by EUR 0.5 million from the
beginning of the financial year, but was EUR 7.4 million less than the review
period (22.9).
FINANCING
Net working capital for the group was EUR 7.7 million. Net working capital at
the end of the comparison period was EUR 13.9 million and EUR 0.3 million at the
end of 2009. The net working capital is affected by the seasonal fluctuations in
the operations, so that there is an increase during the year and a reduction by
the end of the fiscal year. Current assets amounted to EUR 15.5 million (at the
end of review period 22.9). The current assets increased due to the party
concept offering by EUR 0.6 million. Short-term receivables increased during the
current period by EUR 0.3 million and was EUR 3.7 million (4.9). Short-term
non-interest bearing liabilities decreased by EUR 6.6 million from the beginning
of the year and was EUR 11.5 million (13.9). Both trade receivables and deferred
tax liabilities decreased from the beginning of the year. The turnover rate for
current assets increased to 2.3 (1.5) and efforts are made to increase this even
further. Non-current assets totalled EUR 54.1 million (57.8) and decreased by
EUR 0.4 million from the beginning of the year.
Interest-bearing liabilities totalled EUR 33.0 million (39.2), increasing by EUR
10.5 million from the beginning of the financial year. The equity ratio was 29.5
% (30.1 % at the end of review period and 34.7 at the end of 2009) and the
gearing ratio was 143.9 % (149.1 % at the end of review period and 85.6 % at the
end of 2009). Due to the seasonality of the business the level of net debt
increased. Sales during the fourth quarter have a decisive effect on the Group's
cash flow and financial position on an annual level. The Company agreed on
changes in the financing covenants related to gross margin during the current
period.
Shareholder's equity per share was EUR 1.39 (2.32).
The operative cash flow was EUR -10.4 million (-6.4). The cash flow was affected
by the reduction of the short-term non-interest bearing liabilities by EUR 7.1
million (2.6) and the loss for the period. The short-term liabilities decreased
due to payments of trade and other payables related to regular christmas sales,
the non-recurring decrease of trade payables related to the increase in
inventory turnover and the investments made in new product categories. The total
capital expenditure for the Group was EUR 0.1 million (0.6).
PERSONNEL
The average number of group personnel in the current period was 602 (695). The
numbers have been altered to reflect the share of full-time employees, the
majority of the personnel are part-time employees. Tiimari Retail Ltd. is the
biggest employer in the group, employing 453 (413). The number of personnel
declined due to the withdrawal from the Russian, Norwegian and Polish markets
as well as the closure of own shops in Gallerix.
SHARES AND SHARE CAPITAL
Tiimari shares are listed on the NASDAQ OMX Helsinki plc stock exchange. As at
31 March 2010, the share price was EUR 1.22 (1.10) and the market value of the
company was EUR 20.1 million (12.4). The share capital of the company was EUR
7.686.200 at the end of the current period and the number of shares was
16,474,755. The Board has not excercised its right to issue shares nor the
purchase and sale authorisation of own shares during the current period. The
Company does not hold any treasury shares.
ANNUAL GENERAL MEETING - 30 MARCH 2010 (Stock Exchange Release 30 March 2010
www.tiimari.com)
The Annual General Meeting of Tiimari Plc approved the financial statements for
2009 and discharged the board members and the Managin Director from liability.
The Meeting decided, that the loss for the period -12.565.636,92 shall be booked
as retained earnings and no divided is to be distributed.
The board composition was decided as six members. Hannu Ryöppönen, Sven-Olof
Kulldorff, Juha Mikkonen, Markku Pelkonen, Alexander Rosenlew were re-elected
and Sissi Silván was elected as a new member.
KPMG Ltd. was elected to continue as Group Auditor and named Sixten Nyman APA as
auditor with main responsibility.
The Meeting authorised the Board to decide on purchasing a maximum of 500.000
treasury shares at market price to be used in a manner decided by the Board. The
authorisation can be utilised in potential corporate acquisitions or other
business development related arrangements, for execution of commitment or
incentive programs for management or other personnel or other purposes decided
by the Board.
ORGANISING OF THE BOARD OF DIRECTORS (Stock Exchange Release 30 March 2010
www.tiimari.com)
The Board elected Hannu Ryöppönen as its chairman and Juha Mikkonen as its
vice-chairman. The Board appointed Hannu Ryöppönen chairman of the Nomination
and Compensation Committee and Alexander Rosenlew and Juha Mikkonen as its other
members. The Board appointed Juha Mikkonen chairman of the Audit Committee and
Hannu Ryöppönen and Sissi Silván as its other members.
MANAGEMENT
M.Sc. Economics Veijo Heinonen was appointed member of Tiimari's management
board and commercial director 16th March. The other management board members are
Managing Director Hannu Krook, Gallerix Managing Director Dan Crewe, CFO Maija
Elenius, IT Director Tarja Nikkarikoski, Purchase and Logistics Director Anna
Seppälä. Director for shop operations Markku Breider, Marketing Director Anne
Söderholm and Development Director Jaakko Syrjänen departed the company in
conjunction with the reorganisation of group management.
SHORT-TERM RISKS AND UNCERTAINTIES
The Group's revenue and result development is affected by various business
related factors of uncertainty. The primary risks relate to the following:
- the development in the general consumer demand and its decline especially in
Finland and Sweden
- the management's success in business development and improvement in
profitability relating to initiated measures: renewal of product offering and
closure of non-profitable operations
- the accumulation of the seasonal operative cash flow and its effect on the
company's financial position and its loan covenants as well as the
predictability of cash flow and result.
- the effect of exchange rate developments on purchase prices for products
acquired outside of the European Union and the sales margin accumulated from
the sale of the former
- business location decisions in the long-term
- the availability of seasonal products and the operation of the supply chain
- the general development in salaries, rents and freight costs
- valuation of goodwill and balance sheet value of Tiimari and Gallerix brands
- general interest rate changes
- the company is a defendant and plaintiff in some property and rental
agreement related disputes and one contract termination related dispute.
The Company assessed its risks and prepared for these in the current
period interim report
The risks and uncertainties of the Company have been further elaborated in the
2009 financial statements and no significant changes have occurred since.
BACKGROUND FOR OUTLOOK
The Company has decided to focus on developing the profitable core operations.
Withdrawals were made from the non-profitable Russian and Norwegian markets
during 2009 and at the end of that financial year a decision was made to
withdraw from the non-profitable operations in Poland, Gallerix Finland and
Tiimari Sweden. In Finland, two out of three Gallerix shops have been closed
during the current period and four out of five Tiimari shops in Sweden were
closed at the end of the current period. The product offering for the new party
concept has been introduced in the biggest shops during the current period and
the project continues during the second quarter. The new offering had a positive
effect on sales development in these shops, especially due to an increase in an
individual purchase. The gross margin % is also expected to increase after the
first quarter.
Forecasting consumer demand is challenging. The general economic climate is not
expected to recover quickly, but the consumer demand is forecasted to recover
slightly in Finland and Sweden during the ongoing financial year. No growth in
demand is expected in the Baltic market during the forecast period.
The most important goals for 2010 are profitability improvement, increasing
operational cash flow and reducing interest bearing net debt. The key measures
to achieve the aforementioned are focusing on the core profitable operations by
abolishing non-profitable ones, sharpening the appeal of the Tiimari and
Gallerix product offering their turnover rates as well as improving cost
efficiency in the shop network. The reduction in inventory items executed in
2009 serve as a strong foundation to renew the product offering in our shops.
OUTLOOK
The Board estimates, that by focusing on the profitable core operations and
imprving its product offering the Company has the capability to improve
operational profitability (EBITDA excluding non-recurring items) and achieve a
clearly positive operational cash flow (operative cash flow before financing
items and taxes) in 2010.
Board of Directors
Tiimari plc
Further information:
Managing Director, Hannu Krook
tel. +358 (0)3 812911,
email: hannu.krook@tiimari.fi
Distribution:
NASDAQ OMX Helsinki
Main source of information
www.tiimari.com
Tiimari Plc shares are listed at Nasdaq OMX Helsinki Plc. The Group comprises
two retail shop concepts, Tiimari and Gallerix. The concepts operate nearly 300
shops in five countries within the Baltic Sea region. Both concepts belong to
the forerunners within their business segments.
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| CONSOLIDATED INCOME STATEMENT | | | | |
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| eur 1 000 | 1-3/2010 | 1-3/2009| Change % | 1-12/2009 |
| | | | | |
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| SALES | 16 242 | 15 440 | 5 | 80 113 |
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| Cost of goods sold | -7 287 | -5 927 | 23 | -34 601 |
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| Gross profit | 8 955 | 9 513 | -6 | 45 512 |
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| Gross profit, % | 55 % | 62 % | -6 | 57 % |
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| Other operating income | 456 | 177 | 158 | 1 824 |
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| Employee | 0 | | | |
--------------------------------------------------------------------------------
| benefit costs | -5 207 | -5 212 | 0 | -21 765 |
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| Depreciation | -745 | -808 | -8 | -3 507 |
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| Goodwill impairment | 0 | 0 | 0 | -1 496 |
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| Other operating expenses | -6 701 | -6 979 | -4 | -28 084 |
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| OPERATING PROFIT | -3 240 | -3 308 | -2 | -7 516 |
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| Operating profit, % | -20 % | -21 % | 1 | -9 % |
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| Financial income | 99 | 95 | 4 | 47 |
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| Financial expenses | -594 | -942 | -37 | -3 181 |
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| Net financial income | -495 | -847 | -42 | -3 134 |
--------------------------------------------------------------------------------
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| INCOME BEFORE TAXES | -3 735 | -4 155 | -10 | -10 650 |
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| Taxes | 41 | 58 | -29 | 535 |
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| NET INCOME FOR THE PERIOD, | -3 694 | -4 097 | -10 | -10 115 |
| continuing operations | | | | |
--------------------------------------------------------------------------------
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| Net income for the period from | 0 | -113 | -100 | -674 |
| discontinuing operations | | | | |
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| NET INCOME FOR THE PERIOD | -3 694 | -4 210 | -12 | -10 789 |
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--------------------------------------------------------------------------------
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| Equity holders of the company | -3 694 | -4 211 | -12 | -10 789 |
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| Earnings per share | | | | |
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| for profit attributable | | | | |
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| to the equity holders of the Company | | | |
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| Basic earnings per share, EUR | | | | |
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| Continuing operations | -0,22 | -0,36 | -38 | -0,69 |
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| Discontinued operations | 0,00 | -0,01 | -100 | -0,05 |
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| Total | -0,22 | -0,37 | -40 | -0,73 |
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| CONSOLIDATED STATEMENT OF COMPREHENSIVE | | | |
| INCOME | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NET INCOME FOR THE PERIOD | -3 694 | -4 211 | -12 | -10 789 |
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| Translation diffrences | 270 | 40 | | 282 |
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| Other | 0 | 0 | | 0 |
--------------------------------------------------------------------------------
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| Comprehensive income for the | -3 424 | -4 171 | -18 | -10 507 |
| period net of tax | | | | |
--------------------------------------------------------------------------------
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| Comprehensive income for the period attributable to: | | |
--------------------------------------------------------------------------------
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| Equity holders of the company | -3 424 | -4 171 | | -10 507 |
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| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | | |
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| eur 1 000 | | | |
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| | 31.3.2010 | 31.3.2009 | 31.12.2009 |
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| ASSETS | | | |
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| Goodwill | 32 630 | 33 270 | 32 525 |
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| Other intangible assets | 16 611 | 18 627 | 16 876 |
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| Tangible assets | 4 709 | 5 739 | 4 904 |
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| Other financial assets | 104 | 105 | 104 |
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| Receivables | 37 | 29 | 35 |
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| Deferred tax assets | 29 | 1 | 29 |
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| Total non-current assets | 54 118 | 57 771 | 54 473 |
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| Inventories | 15 515 | 22 893 | 15 044 |
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| Trade and other receivables | 3 706 | 4 995 | 3 454 |
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| Cash and bank | 4 521 | 1 670 | 3 024 |
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| Total current assets | 23 742 | 29 558 | 21 522 |
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| TOTAL ASSETS | 77 860 | 87 329 | 75 995 |
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| SHAREHOLDERS' EQUITY AND LIABILITIES | | | |
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| Equity attributable to equity holders of parent company | |
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| Share capital | 7 686 | 7 686 | 7 686 |
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| Own shares | 0 | -55 | 0 |
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| Distributable equity fund | 23 010 | 16 921 | 23 018 |
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| Translation differences | -393 | -905 | -770 |
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| Retained earnings | -7 351 | 2 627 | -3 568 |
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| TOTAL SHAREHOLDERS' EQUITY | 22 952 | 26 273 | 26 366 |
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| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 5 848 | 6 234 | 5 834 |
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| Interest-bearing liabilities | 22 155 | 12 280 | 22 203 |
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| Provisions | 31 | 31 | 31 |
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| Total non-current liabilities | 28 034 | 18 545 | 28 068 |
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| Interest bearing liabilities | 15 395 | 28 555 | 3 398 |
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| Account payable and other payable | 11 479 | 13 957 | 18 163 |
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| Total current liabilities | 26 874 | 42 512 | 21 561 |
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| TOTAL LIABILITIES | 54 908 | 61 057 | 49 629 |
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| | | | |
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| TOTAL SHAREHOLDERS' EQUITY AND | 77 860 | 87 329 | 75 995 |
| LIABILITIES | | | |
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| Consolidated Statement of Cash Flows | | |
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| eur 1000 | | | |
| | | | |
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| | | 1-3/2010 | 1-3/2009 |
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| Cash flow from operations | | |
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| Profit/loss for financial period | -3 694 | -4 211 |
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| Adjustments: | | |
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| | Depreciation and impairment | 745 | 815 |
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| | Gain (+) and loss (-) on sale of | 1 | 0 |
| | fixed assets | | |
--------------------------------------------------------------------------------
| | Financial income and expenses | 497 | 844 |
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| | Taxes | -41 | -58 |
--------------------------------------------------------------------------------
| | Other adjustments | 0 | -38 |
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| Change in working capital: | | |
--------------------------------------------------------------------------------
| | Change in inventories | -377 | -756 |
--------------------------------------------------------------------------------
| | Change in short-term receivables | -216 | 541 |
--------------------------------------------------------------------------------
| | Change in short term liabilities | -7 090 | -2 570 |
--------------------------------------------------------------------------------
| Interest paid | -128 | -678 |
--------------------------------------------------------------------------------
| Interest income received | 6 | 1 |
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| Other financing expenses paid | -28 | -226 |
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| Taxes | | -53 | -64 |
| paid | | | |
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| Net cash flow from operations | -10 378 | -6 397 |
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| Cash flow from investment activities | | |
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| | Acquisition of subsidiary companies | |
--------------------------------------------------------------------------------
| | net cash of acquired | 0 | 0 |
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| | Investments in | | |
--------------------------------------------------------------------------------
| | tangible and intangible assets | -101 | -599 |
--------------------------------------------------------------------------------
| | Capital gains from tangible and intangible | 0 | 0 |
| | assets | | |
--------------------------------------------------------------------------------
| | Repayment of loan receivables | 0 | 0 |
--------------------------------------------------------------------------------
| | Income on sale of investments | 0 | 0 |
--------------------------------------------------------------------------------
| Net cash flow from investments | -101 | -599 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities | | |
--------------------------------------------------------------------------------
| | Proceeds from share issue | 0 | 0 |
--------------------------------------------------------------------------------
| | Long-term loans, increase | 0 | 0 |
--------------------------------------------------------------------------------
| | Long-term loans, decrease | 0 | 0 |
--------------------------------------------------------------------------------
| | Short-term loans, net change | 12 000 | 6 590 |
--------------------------------------------------------------------------------
| | Payment of lease liabilities | -58 | -98 |
--------------------------------------------------------------------------------
| | Dividends paid | 0 | 0 |
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| Net cash flow from financing | 11 942 | 6 492 |
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| Change in liquid assets | 1 464 | -503 |
--------------------------------------------------------------------------------
| | Liquid assets, beginning of review perios | 3 024 | 2 188 |
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| | Effect of exchange rate changes on liquid | 33 | -15 |
| | assets | | |
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| | Liquid assets, end of review period | 4 521 | 1 670 |
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| CONSOLIDATED STATEMENT OF CHANGES IN | | | | |
| EQUITY | | | | |
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| eur 1 000 | | | | | | |
--------------------------------------------------------------------------------
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| Attributable to the equity holders of the company |
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| | Share | Distribut | Own | Translat | Retaine | Total |
| | capit | able | share | ion | d | |
| | al | equity | s | differen | earning | |
| | | fund | | ces | s | |
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| Shareholders' | 7 686 | 16 921 | -55 | -945 | 6 836 | 30 443 |
| equity 1.1.2009 | | | | | | |
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| Comprehensive | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| for the period | | | | 40 | -4 211 | -4 171 |
--------------------------------------------------------------------------------
| Dividends paid | | | | | 0 | 0 |
--------------------------------------------------------------------------------
| Share issue | | 0 | | | | 0 |
--------------------------------------------------------------------------------
| Equity on | 7 686 | 16 921 | -55 | -905 | 2 625 | 26 273 |
| 31.3.2009 | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 7 686 | 23 010 | 0 | -663 | -3 667 | 26 366 |
| equity 1.1.2010 | | | | | | |
--------------------------------------------------------------------------------
| Comprehensive | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| for the period | | | | 270 | -3 694 | -3 424 |
--------------------------------------------------------------------------------
| Dividends paid | | | | | 0 | 0 |
--------------------------------------------------------------------------------
| Equity portion of | | | | | 0 |
| convertible loan | | | | | |
--------------------------------------------------------------------------------
| Share based | | | | | 10 | 10 |
| payments | | | | | | |
--------------------------------------------------------------------------------
| Equity on | 7 686 | 23 010 | 0 | -393 | -7 351 | 22 952 |
| 31.3.2010 | | | | | | |
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BASIS OF PREPARATION
This Interim Report was prepared in accordance with the IFRS accounting
standards, but in the preparation all IAS 34 standard requirements have not been
fulfilled. The interim consolidated financial statements were prepared applying
the same accounting policies and methods of computation, as in the financial
statements for 2009. Financial figures presented in this document are not
audited.
All figures in the accounts have been rounded and consequently the sum of
individual figures may deviate from the presented total figure. The figures in
the tables are presented in thousands of euro.
The application of changed or new standards (IFRS) starting 1.1.2010:
- IAS 3R,Business combinations
- IAS 27, Consolidates and separate financial statements
- IAS 39, Financial instruments: recognition and measurement
The implemented standard changes did not have a significant impact on the
interim report.
Use of Estimates:
The preparation of financial statements in accordance with IFRS requires the
management to use estimates and assumptions that affect reported amounts of
assets and liabilities on the balance sheet, disclosure of contingent assets and
liabilities and the amount of income and expenses. Although the estimates are
based on the management's best knowledge of current events and actions, actual
results may ultimately differ from the estimates used.
The use of estimates affects the valuation of inventory, deferred tax assets,
depreciation times of non-current assets and valuation of receivables.
Additionally, the estimates affect the valuation of goodwill and brands.
Inventory valuation is based on regular devaluation as follows: 30 months 25%,
36 months 50 % and 42 months 100 % and specific write-offs as needed.
Tiimari's business is characterised by seasonality with the net sales being
generated largely during the final quarter. Regular goodwill impairment testing
is thus carried out at the end of the financial period. Goodwill shall be tested
earlier during the year in case of an indication of significant changes to the
expected cash flows of a cash-generating unit arising from occurrences in
business operations or in the operating environment.
Gross profit and gross profit margin %
Gross profit is revenue less cost of goods sold and franchise leases. During the
outsourced finance department the material and services included expenses from
hired staff and franchise leases were reported in other operating expenses.
These items have been corrected in the results of the review period according to
the instructions on the calculation of gross profit
--------------------------------------------------------------------------------
| SEGMENT INFORMATION | | | |
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| NET SALES | | | |
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| eur 1 000 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 1-12 |
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| Tiimari | 13 048 | 12 473 | 66 903 |
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| Gallerix | 3 198 | 2 967 | 13 396 |
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| Other operations | 82 | 400 | 400 |
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| Eliminations | -87 | -400 | -586 |
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| Group | 16 242 | 15 440 | 80 113 |
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| Active markets | 15 879 | 14 797 | 76 958 |
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| Inactive markets | 363 | 643 | 3 155 |
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| OPERATING PROFIT | | | |
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--------------------------------------------------------------------------------
| eur 1 000 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 1-12 |
--------------------------------------------------------------------------------
| Tiimari | -2 367 | -2 580 | -4 945 |
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| Gallerix | -261 | -435 | -755 |
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| Other operations | -613 | -294 | -1 816 |
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| Group | -3 240 | -3 308 | -7 516 |
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| Active markets | -3 283 | -2 925 | -5 095 |
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| Inactive markets | 43 | -383 | -2 421 |
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| DEPRECIATION AND GOODWILL IMPAIRMENT | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| eur 1 000 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 1-12 |
--------------------------------------------------------------------------------
| Tiimari | 539 | 608 | 4 111 |
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| Gallerix | 186 | 185 | 807 |
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| Other operations | 21 | 16 | 85 |
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| Group | 746 | 809 | 5 003 |
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| Active markets | 740 | 773 | 3 372 |
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| Inactive markets | 6 | 36 | 1 631 |
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| CAPITAL EXPENDITURE | | | |
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--------------------------------------------------------------------------------
| eur 1 000 | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 1-12 |
--------------------------------------------------------------------------------
| Tiimari | 101 | 428 | 1 076 |
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| Gallerix | 0 | 189 | 161 |
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| Other operations | 0 | 4 | 14 |
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| Group | 101 | 621 | 1 251 |
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--------------------------------------------------------------------------------
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| NET SALES BY GEOGRAPHICAL AREA | | |
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| eur 1 000 | 2010 | 2009 | 2009 |
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| | 1-3 | 1-3 | 1-12 |
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| Finland | 12 170 | 11 206 | 60 767 |
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| Sweden | 3 413 | 3 177 | 14 578 |
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| ROW | 659 | 1 057 | 4 768 |
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| Group | 16 242 | 15 440 | 80 113 |
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| Active markets | 15 879 | 14 797 | 76 958 |
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| Inactive markets | 363 | 643 | 3 155 |
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| INTANGIBLE ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| eur 1 000 | 31.3.2010 | 31.3.2009 | 31.12.2009 |
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| Book value at 1 January | 49 401 | 52 237 | 52 237 |
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| Changes in exchange rates | 343 | -74 | 310 |
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| Additions | 0 | 218 | 504 |
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| Depreciation and impairment | -503 | -491 | -3 550 |
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| Disposals and intra-balance | 0 | 0 | -100 |
| sheet transfer | | | |
--------------------------------------------------------------------------------
| Book value at the end of | 49 241 | 51 891 | 49 401 |
| period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TANGIBLE ASSETS | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| eur 1 000 | 31.3.2010 | 31.3.2009 | 31.12.2008 |
--------------------------------------------------------------------------------
| Book value at 1 January | 4 904 | 5 616 | 5 616 |
--------------------------------------------------------------------------------
| Changes in exchange rates | -48 | 80 | 14 |
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| Additions | 101 | 367 | 765 |
--------------------------------------------------------------------------------
| Depreciation and impairment | -248 | -324 | -1 480 |
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| Disposals and intra-balance | 0 | 0 | -12 |
| sheet transfer | | | |
--------------------------------------------------------------------------------
| Book value at the end of | 4 709 | 5 739 | 4 904 |
| period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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| KEY FINANCIAL FIGURES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 2010 | 2009 | 2009 |
--------------------------------------------------------------------------------
| | 1-3 | 1-3 | 1-12 |
--------------------------------------------------------------------------------
| Net sales | 16 242 | 15 440 | 80 113 |
--------------------------------------------------------------------------------
| EBITDA | -2 495 | -2 500 | -2 513 |
--------------------------------------------------------------------------------
| Operating profit | -3 240 | -3 308 | -7 516 |
--------------------------------------------------------------------------------
| Profit/loss for the | -3 694 | -4 097 | -10 115 |
| financial period | | | |
--------------------------------------------------------------------------------
| Profit/loss, discontinued | 0 | -113 | -674 |
| operations | | | |
--------------------------------------------------------------------------------
| Earnings per share | -0,22 | -0,36 | -0,69 |
| continuing operations, EUR | | | |
--------------------------------------------------------------------------------
| Earnings per share | 0,00 | -0,01 | -0,05 |
| discontinued operations, EUR | | | |
--------------------------------------------------------------------------------
| Earnings per share total, | 0,05 | -0,37 | -0,73 |
| EUR | | | |
--------------------------------------------------------------------------------
| Shareholders' equity per | 1,39 | 2,32 | 1,39 |
| share, EUR | | | |
--------------------------------------------------------------------------------
| Solvency ratio | 29,5 % | 30,1 % | 34,7 % |
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| Gearing | 143,9 % | 149,1 % | 85,6 % |
--------------------------------------------------------------------------------
| Net working capital | 7 742 | 13 931 | 335 |
--------------------------------------------------------------------------------
| Operating cash flow | -10 279 | -5 884 | 6 486 |
--------------------------------------------------------------------------------
| Net Interest-bearing | 33 029 | 39 165 | 22 577 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Balance sheet total | 77 860 | 87 329 | 75 995 |
--------------------------------------------------------------------------------
| Average number of shares | 16 475 | 11 311 | 14 749 |
| (pcs) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONTINGENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| | 31.3.2010 | 31.3.2009 | 31.12.2009 |
--------------------------------------------------------------------------------
| Loans from financial institutions | | | |
--------------------------------------------------------------------------------
| against the following securities | 21 500 | 28 767 | 9 500 |
--------------------------------------------------------------------------------
| Real estate mortgages | 0 | 1 000 | 0 |
--------------------------------------------------------------------------------
| Corporate mortgages | 31 137 | 31 137 | 31 137 |
--------------------------------------------------------------------------------
| Pledged shares | 1 476 | 1 476 | 1 476 |
--------------------------------------------------------------------------------
| Other own liabilities | | | |
--------------------------------------------------------------------------------
| Bank quarantees | 2 843 | 2 114 | 2 821 |
--------------------------------------------------------------------------------
| Other liabilities | 5 | 8 | 5 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Leasing liabilities | | | |
--------------------------------------------------------------------------------
| Due within one year | 45 | 88 | 133 |
--------------------------------------------------------------------------------
| Due after one year | 58 | 127 | 115 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| OTHER RENT LIABILITIES | | | |
--------------------------------------------------------------------------------
| Due within one year | 14 041 | 12 630 | 12 147 |
--------------------------------------------------------------------------------
| Due after one year | 24 353 | 11 505 | 13 687 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| RELATED PARTY TRANSACTIONS (EUR 1000) | Q1 2010 | Q1 2009 | 1-12 2009 |
| | | | |
--------------------------------------------------------------------------------
| Managing Director remuneration | 56 | 56 | 162 |
--------------------------------------------------------------------------------
| Board remuneration | 26 | 29 | 112 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest paid on capital loan (paid 31 March for period 26 Oct 09 - 31 Mar |
| 10 |
--------------------------------------------------------------------------------
| Hannu Krook | 3 | | |
--------------------------------------------------------------------------------
| Hannu Ryöppönen | 3 | | |
--------------------------------------------------------------------------------
| Sven-Olof Kulldorff | 3 | | |
--------------------------------------------------------------------------------
| Virala Oy Ab (Atine Group Oy parent | 103 | | |
| company) | | | |
--------------------------------------------------------------------------------
| Assetman Oy | 18 | | |
--------------------------------------------------------------------------------
| Baltiska Handels A.B. | 9 | | |
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| Total | 138 | | |
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--------------------------------------------------------------------------------
| MAJOR SHAREHOLDERS | Shares | Shares % |
--------------------------------------------------------------------------------
| Major shareholders 31.3.2010 | | |
--------------------------------------------------------------------------------
| Atine Group Oy | 3 292 198 | 19,98 |
--------------------------------------------------------------------------------
| Assetman Oy | 1 740 645 | 10,57 |
--------------------------------------------------------------------------------
| Varma Mutual Pension Insurance Company | 828 912 | 5,03 |
--------------------------------------------------------------------------------
| Primate Oy | 825 000 | 5,01 |
--------------------------------------------------------------------------------
| Ilmarinen Mutual Pension Insurance Company | 789 221 | 4,79 |
--------------------------------------------------------------------------------
| Baltiska Handels A.B. | 716 483 | 4,35 |
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| Aktia Capital Fund | 600 000 | 3,64 |
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| Cumasa Oy | 407 625 | 2,47 |
--------------------------------------------------------------------------------
| Arvo Finland Value Fund | 300 000 | 1,82 |
--------------------------------------------------------------------------------
| Etera Mutual Pension Insurance Company | 210 000 | 1,27 |
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CALCULATION OF KEY FINANCIAL RATIOS
Gross margin = Revenue + materials and supplies
EBITDA = Operating profit + depreciation and amortisation
Earnings/share (EPS), EUR =
Earnings before tax - income taxes / issue-adjusted average number of shares for
the fiscal year
Shareholders' equity / share, EUR = equity attributable to the equity holders of
the parent company / issue-adjusted number of shares at the end of the fiscal
year
Equity ratio % =
Shareholders' equity * 100 / Total assets - prepayments received
Gearing ratio % =
Interest-bearing liabilities - cash and cash equivalents * 100 / Shareholders'
equity
Interest-bearing net liabilities = Interest-bearing liabilities - cash and cash
equivalents
Net working capital = inventory + short-term non-interest-bearing receivables -
short-term non-interest-bearing liabilities
Operating cashflow = EBITDA - increase in net working capital - capital
expenditure
Further information:
Managing Director, Hannu Krook
tel. +358 (0)3 812911,
email: hannu.krook@tiimari.fi
