| Segments (EURm) | Q2/14 | Q2/13 | yoy | 6m/14 | 6m/13 | yoy |
| Supermarkets | 93.7 | 84.5 | 10.9% | 176.1 | 164.0 | 7.3% |
| Department stores | 22.6 | 21.4 | 5.9% | 43.2 | 41.4 | 4.6% |
| Cars | 16.1 | 13.0 | 23.9% | 28.6 | 22.1 | 29.5% |
| Footwear | 3.4 | 4.1 | -16.1% | 6.8 | 6.8 | 0.6% |
| Real Estate | 0.8 | 0.8 | 2.4% | 1.6 | 1.5 | 6.1% |
| Total sales | 136.7 | 123.8 | 10.5% | 256.4 | 235.8 | 8.7% |
| Supermarkets | 1.3 | 0.4 | 244.2% | 0.3 | -1.3 | -119.7% |
| Department stores | 1.2 | 1.0 | 29.4% | 0.8 | -0.5 | -259.4% |
| Cars | 0.7 | 0.8 | -10.4% | 0.2 | 1.0 | -79.5% |
| Footwear | -0.1 | 0.3 | -133.0% | -0.9 | -0.3 | 238.6% |
| Real Estate | 2.3 | 2.2 | 3.4% | 4.4 | 3.4 | 28.4% |
| Total net profit | 5.4 | 4.6 | 16.0% | 4.8 | 2.4 | 102.5% |
The consolidated unaudited sales revenue of Tallinna Kaubamaja Group was 136.7 million euros in the second quarter of 2014, exceeding the previous year’s sales revenue by 10.5%. The sales revenue was 256.4 million euros in the first half-year, showing a growth of 8.7% compared to the first half-year of 2013 when the sales revenue was 235.8 million euros. The Group`s consolidated unaudited net profit was 5.4 million euros in the second quarter of 2014, which is 16.0% higher on the year-on-year basis. The Group`s net profit for the first six months of 2014 was 4.8 million euros, which is twice as large as the profit of the same period in the previous year, when the profit was 2.4 million euros. The profit before taxes was 6.1 million euros in the first six months, remaining at the same level as the year before. The net profit improved due to a tax efficient dividend payment, on which an income tax in the amount of 1.3 million euros was paid in the first quarter of 2014, whereas a sum of 3.8 million euros was paid as income tax in the previous year.
The reasons behind the strong growth in the sales revenue are new Selver stores opened in 2013, a marketing campaign postponed to the second quarter, and national holidays, as well as improved assortment and successful marketing campaigns. All Group`s segments showed a growth in the sales revenue in the first half-year. In the second quarter, the footwear segment experienced a steep decrease. The SHU store in Viru Keskus was closed, because of expiration of lease contract and the ABC King store was relocated to a new site with less traffic, a move that returned the flagship store of the footwear segment to a start-up phase. The growth of labour costs of almost 15% caused by the increased number of employees (9%), because of a larger number of stores, as well as the growth in the average labour costs per an employee (5.8%), have had the strongest impact on the gross profit in the second quarter and in the first half-year. The Group`s gross margin decreased slightly due to an adjustment of the footwear segment assortment, caused by the termination of unsuitable inventory. Due to a larger share of fleet sales, the gross margin in the car trade segment has been slightly weaker in the first half-year. At the same time, introduction of the new commercial software introduced at the Selver stores in the beginning of the year has undergone as expected, and the margin has slightly improved in the supermarket and department store segments due to the assortment of products supported by appropriate pricing and successful marketing.
Selver supermarkets
The consolidated sales revenue of the supermarket business segment in the first half-year of 2014 was 176.1 million euros, a year-on-year growth of 7.3%. The consolidated sales revenue in the second quarter was 93.7 million euros, a year-on-year growth of 10.9%. The average monthly sales revenue per square metre of sales space of comparable stores was 0.35 thousand euros in the first half-year of 2014 and 0.37 thousand euros in the second quarter, showing a decrease of 1.8% and an increase of 2.1%, respectively. In the first half-year of 2014, 17.3 million purchases were made at the Selver stores, exceeding the number of purchases made in the previous period by 5.4%.
The consolidated profit before taxes of the supermarket segment in the first half-year of 2014 was 0.6 million euros, the net profit was 0.3 million euros. The consolidated profit before taxes in the second quarter and the net profit were 1.3 million euros. The net profit of the second quarter exceeded the net profit earned a year before by 0.9 million euros; the net profit of the first half-year exceeded the net profit of the previous year by 1.6 million euros. The profit before taxes and the net profit earned in Estonia were 1.9 million euros in the second quarter. The profit before taxes was 1.8 million euros in first half-year, the net profit was 1.5 million euros. The difference between the net profit and the profit before income tax is due to the income tax paid on dividends. The loss before taxes and the net loss earned in Latvia were 1.2 million euros in the first half-year, of which 0.6 million euros were earned in the second quarter. The amount of loss remained at the same level as in the year before.
The growth of turnover in the first half-year of 2014 was supported by the opening of new stores in 2012 and 2013, because the start-up phase of the first stores is almost over and the stores opened in 2013 give an additional volume compared to the basis. The constantly changing competition situation, including recently opened Selver stores that have caused a constant redistribution of clients between stores, as well as Selver stores, has had a negative effect on the results of comparable stores. The marketing campaign affecting the growth of turnover in the first quarter that was year earlier carried out in March was postponed to April this year, causing an expected growth of turnover in the second quarter. On the one hand, the continued cost-efficient operations have positively affected the amount of the profit earned in Estonia; on the other hand, the changes in the labour market have had their impact, causing a growth in the average salary. The data of the first half-year also include non-capitalised costs associated with one-time projects. The largest one-time projects in the current year have been following: new commercial software introduced in Selver on 1 January, a separate gourmet store was closed in the Solaris Centre in the first quarter and a gourmet store department was opened at the Pirita Selver, a new Selver at the Astri centre in Narva was opened in June.
Department stores
The sales revenue of the department store business segment was 43.2 million euros in the first 6 months of 2014, a year-on-year growth of 4.6%. 22.6 million euros of the sales revenue was earned in the second quarter, which exceeded the revenue in the second quarter of 2013 by 5.9%. The profit before taxes of department stores in the first half-year of 2014 was 1.2 million euros, a result that exceeds the result of the previous year by 75.7%. The profit before taxes was 1.2 million euros in the second quarter, which exceeded the profit earned in 2013 by 29.4% or 0.3 million euros. Successful marketing campaigns affected the sales results earned by the department stores in the second quarter in spite of cool weather in June. In spite of a warmer-than-average winter and cooler weather in early summer that discouraged consumers to buy seasonal goods, efficiently managed pricing and timely campaign offers had a positive impact on the result of the department stores. The sales revenue in the second quarter of 2014, earned by OÜ TKM Beauty Eesti that operates I.L.U. cosmetics stores, was 1.0 million euros, showing a year-on-year growth of 2.8%. In the second quarter, the loss was 0.1 million euros, which was 0.04 million euros lower than the loss in 2013. The sales revenue in the first half-year of 2014 was 2.1 million euros, which had increased by 1.7% compared to the same period in 2013. The loss in the first half-year of 2014 was 0.2 million euros, which was 0.1 million euros lower than the loss earned in the same period in 2013.
Car Trade
The sales revenue of the car trade segment was 28.6 million euros in first half-year of 2014. The sales revenue exceeded the revenue earned in the same period in the previous year by 29.5%, whereas the sales revenue from the sales of KIAs increased by 10.1%. The sales revenue of 16.1 million euros earned in the second quarter, exceeded the year-on-year sales revenue by 23.9%, including the sales revenue of KIAs by 9.1%. The net profit of the segment in the first half-year of 2014 was 0.2 million euros and the net profit for the second quarter was 0.7 million euros. In the first half-year of 2014, the profit before taxes of the segment was 0.7 million euros, being lower of the profit earned in the first half-year of 2013 by 27.1%. The net profit for the second quarter of 2014 was 0.7 million euros, which was by 10.4% lower of the profit earned in the same period in the previous year. In addition to the specific structure of sales of the first half-year causing the slight margin decline, the profit has been negatively affected by the start-up costs of a new car show room in Latvia opened at the end of 2013.
Footwear trade
The sales revenue of the footwear segment was 6.8 million euros in the first half-year of 2014, showing an annual growth of 0.6%. In the second quarter, the sales revenue was 3.4 million euros, a decrease of 16.1% compared to the same period in 2013. The loss of the first half-year was 0.9 million euros, which tripled, compared to the same period in the previous reporting year. The loss earned in the second quarter was 0.1 million euros and it was 0.4 million euros worse compared to the result of the second quarter in 2013. The decrease in the sales revenue is related to the reorganisation undertaken in the stores at the Viru Keskus. The SHU store at the Viru Keskus closed its doors due to expiry of the lease contract. The ABC King store was completely renovated, but due to the reorganisation at the centre, it was moved to a new location. This brought about a new start-up period to our flagship store of the footwear segment together with associated one-time expenses. The footwear segment is renewing its assortment portfolio, and this is why large sales of inventory goods from previous seasons were organised at the Tallinn Saku Suurhall (arena) and Tartu Lõunakeskus (shopping centre) that translated into a decrease in the gross margin.
Real Estate
In the first half-year of 2014, the sales revenue of the real estate business segment outside the Group was 1.6 million euros, which is 0.1 million euros or 6,1% more than in the same period last year. The sales revenue outside the Group in the second quarter was 0.8 million euros, which is higher by 0.02 million euros or 2.4% compared to the same period last year. The growth in the sales revenue in the second quarter is related to the reorganisation of leased spaces in 2013, when the spaces formerly used by the group itself were leased to persons outside the Group. The profit before taxes of the real estate segment in the first half-year of 2014 was 4.4 million euros, which is higher by 0.14 million euro or 3,3% compared to the same period in the previous economic year, when the profit before taxes was 4.3 million euros. The profit before taxes for the second quarter was 2.3 million euros (the profit before taxes was 2.2 million euros in the second quarter of 2013), which has increased by 0.08 million euros or 3.4% compared to the same period of the previous economic year. The growth in the profit is caused by added space leased to other segments of the group in 2013.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
| 30.06.2014 | 31.12.2013 | |
| ASSETS | ||
| Current assets | ||
| Cash and bank | 14,814 | 14,766 |
| Trade receivables and prepayments | 15,024 | 15,991 |
| Inventories | 53,871 | 51,937 |
| Total current assets | 83,709 | 82,694 |
| Non-current assets | ||
| Receivables and prepayments | 314 | 313 |
| Investments in associates | 1,808 | 1,711 |
| Investment property | 3,035 | 3,035 |
| Property, plant and equipment | 228,494 | 229,406 |
| Intangible assets | 10,406 | 10,636 |
| Total non-current assets | 244,057 | 245,101 |
| TOTAL ASSETS | 327,766 | 327,795 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 11,464 | 14,300 |
| Trade payables and other liabilities | 66,979 | 67,725 |
| Total current liabilities | 78,443 | 82,025 |
| Non-current liabilities | ||
| Borrowings | 81,975 | 77,104 |
| Provisions and prepayments | 889 | 878 |
| Total non-current liabilities | 82,864 | 77,982 |
| TOTAL LIABILITIES | 161,307 | 160,007 |
| Equity | ||
| Share capital | 24,438 | 24,438 |
| Statutory reserve capital | 2,603 | 2,603 |
| Revaluation reserve | 67,888 | 68,617 |
| Currency translation differences | -255 | -257 |
| Retained earnings | 71,785 | 72,387 |
| TOTAL EQUITY | 166,459 | 167,788 |
| TOTAL LIABILITIES AND EQUITY | 327,766 | 327,795 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
| II quarter 2014 | II quarter 2013 | 6 months 2014 | 6 months 2013 | |||
| Revenue | 136,709 | 123,771 | 256,360 | 235,781 | ||
| Other operating income | 216 | 201 | 364 | 415 | ||
| Materials, consumables used and services | -103,742 | -93,041 | -195,267 | -178,609 | ||
| Other operating expenses | -12,758 | -12,839 | -25,818 | -25,249 | ||
| Staff costs | -11,830 | -10,298 | -23,081 | -20,008 | ||
| Depreciation, amortisation and impairment losses | -2,682 | -2,744 | -5 392 | -5,495 | ||
| Other expenses | -173 | -123 | -437 | -214 | ||
| Operating profit | 5,740 | 4,927 | 6,729 | 6,621 | ||
| Finance income | 6 | 9 | 11 | 17 | ||
| Finance costs | -402 | -335 | -735 | -594 | ||
| Finance income on shares of associates | 51 | 46 | 97 | 86 | ||
| Profit before tax | 5,395 | 4,647 | 6,102 | 6,130 | ||
| Income tax | 0 | 2 | -1,324 | -3,770 | ||
| NET PROFIT FOR THE FINANCIAL YEAR | 5,395 | 4,649 | 4,778 | 2,360 | ||
| Other comprehensive income: | ||||||
| Items that will be reclassified subsequently to profit or loss | ||||||
| Currency translation differences | 0 | -33 | 2 | -228 | ||
| Other comprehensive income/loss for the financial year | 0 | -33 | 2 | -228 | ||
| TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR | 5,395 | 4,616 | 4,780 | 2,132 | ||
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
