| Segments (EURm) | Q3/14 | Q3/13 | yoy | 9m/14 | 9m/13 | yoy |
| Supermarkets | 92.9 | 87.0 | 6.8% | 268.9 | 251.0 | 7.1% |
| Department stores | 20.9 | 21.2 | -1.5% | 64.2 | 62.6 | 2.5% |
| Cars | 15.2 | 11.9 | 28.1% | 43.8 | 33.9 | 29.0% |
| Footwear | 3.3 | 3.8 | -13.2% | 10.2 | 10.6 | -4.4% |
| Real Estate | 0.8 | 0.8 | 5.0% | 2.5 | 2.3 | 5.7% |
| Total sales | 133.2 | 124.7 | 6.8% | 389.5 | 360.5 | 8.0% |
| Supermarkets | 3.1 | 2.4 | 25.5% | 3.3 | 1.1 | 200.0% |
| Department stores | -0.3 | 0.9 | -131.4% | 0.5 | 0.4 | 17.7% |
| Cars | 0.9 | 0.5 | 67.9% | 1.1 | 1.6 | -29.3% |
| Footwear | -0.4 | 0.0 | -1252.8% | -1.3 | -0.2 | 471.0% |
| Real Estate | 2.3 | 2.2 | 3.9% | 6.7 | 5.7 | 18.8% |
| Total net profit | 5.6 | 6.2 | -9.8% | 10.3 | 8.5 | 21.3% |
The consolidated unaudited sales revenue of the Tallinn Kaubamaja group was 133.2 million euros during the third quarter of 2014; this exceeded the previous year's sales revenue by 6.8%. The sales revenue of the first nine months was 389.5 million euros; this result was better by 8.0% compared to the first nine months of 2013, when the sales revenue was 360.5 million euros. The consolidated unaudited net profit of the Group during the third quarter of 2014 was 5.6 million euros; due to income tax paid on the share capital payment, this is 9.8% less than the profit of the same period in the previous year. In the first nine months of 2014, the net profit of the Group was 10.3 million euros that is 21.3% higher than the profit of the same period of the previous year, when the profit was 8.5 million euros. Profit before taxes was 12.7 million euros during the first nine months, demonstrating a 3.1% increase as compared to the same time previous year.
The sales revenue of the group during the third quarter was as high as expected, considering the new Selver stores and renewed selection; however, this was supported by the improved real purchase power of consumers resulting from increased wages and the decreased consumer prices, similarly to the increase of retail sales in the entire Estonia. Overall, most of the group segments demonstrated an increase in sales during the first nine months. Only the turnover of footwear segment has decreased during the first nine months due to reorganisation in key stores. According to Statistics Estonia, Estonia has experienced an overall drop in the retail turnover of the retail segment of department stores starting from February. The decrease was especially fast during summer months. The turnover of the department store segment of the group started to decrease slightly during the third quarter, but still demonstrated a smaller-than-average decline in the country. Trade in the department stores of the group was rendered difficult by the traffic restrictions that were implemented because of the reconstruction of the streets in the centres of Tallinn and Tartu that made access to the department stores complicated. The net profit was higher by almost one fifth – this was achieved by optimising dividends and payments of the share capital. The group achieved a 3.1% growth of profit before taxes; despite this, the greatest challenge of the reporting period is finding opportunities to increase efficiency, in order to compensate for the increased labour expenses (the total increase was 14% in nine months). Overall, the marginal has been pressured by the renewed selection in the footwear segment during the first nine months.
Selver supermarkets
The consolidated sales revenue of the supermarket segment was 268.9 million euros during the first nine months of 2014, which constituted a 7.1% growth on the year-on-year basis. The consolidated sales revenue of the third quarter was 92.9 million euros, which was a 6.8% increase on the year-on-year basis. 26.7 million purchases were made in Selver stores during the first nine months of 2014, which was 5.9% more than the purchases made during the same period a year before. The consolidated profit before taxes of the supermarket segment was 3.7 million euros during the first nine months of 2014; the net profit was 3.3 million euros. The consolidated profit before taxes and net profit were 3.1 million euros in the third quarter. Opening and putting into operation new stores in 2012 and 2013, which made the basis for comparison lower during the previous year, supported the increase in the turnover during the first nine months of 2014. Low inflation, high consumer confidence and good indicators of private consumption expenditure, as well as beautiful summer weather, supported the turnover of the third quarter. The changing situation in competition had a negative impact due to which the clients were redistributed between stores, including the Selver stores. The foodstuffs segment leads the increase in the turnover of the Selver stores; in this segment, the sales of fresh food groups and gourmet products that are available in a wider assortment has increased considerably. We have paid more attention to the selection, quality and price of fruit and vegetable products; as a result, customers have included fresh and healthy food products from the Selver selection in the representative basket of products in a quantity that is higher by more than a third as compared to earlier periods. On the other hand, changes on the labour market, due to which the average wages have increased, have influenced the revenue of the entire 2014, leading to a growth in labour expenditure. The results of the first nine months also include non-capitalised costs of one-time projects. This year, bigger one-time projects have been as follows: on 1 January, Selver stores implemented new commercial software; during Q1, the individual Gurmeekauplus gourmet store was closed at the Solaris centre, and a gourmet product section was opened in Pirita Selver; in June, a new Selver was opened at the Astri centre in Narva.
Department stores
The sales revenue of the department store segment was 64.2 million euros during the first nine months of 2014, which was a 2.5% growth on the year-on-year basis. Thereof, 20.9 million euros were sales revenue of the third quarter, which is 1.5% less than during the third quarter of 2013. The profit before taxes of the department stores was 1.9 million euros during the first nine months of 2014, which was 19.5% better than a year before. During the third quarter, the profit before taxes was 0.7 million euros, which was 22.5% less than the profit in 2013. The result of sales of Kaubamaja was influenced by difficult access to both stores during the third quarter – in Tallinn, the tramways were repaired; in the centre of Tartu, the streets in the city centre were closed for reconstruction. The results of department stores were influenced by the September weather that was warmer than average and enabled our customers to postpone purchasing decisions for clothes, mostly reflected in the reduced sales of coats. The sales revenue of OÜ TKM Beauty Eesti that operates I.L.U. cosmetics stores was 1.0 million euros during the third quarter of 2014, which was a 1.6% decrease as compared to the same period in 2013. In the third quarter, the loss was 0.1 million euros, which was a little less than the loss of the same period in 2013. The sales revenue was 3.1 million euros during the first nine months of 2014, which was a 0.6% growth on the year-on-year basis. The loss of the first nine months of 2014 was 0.3 million euros, which was 0.1 million euros less than the loss of the same period in 2013. The sales results of the I.L.U. store in Ülemiste were significantly worse in summer due to the construction works in the Ülemiste centre. A new and larger I.L.U. store is opened at Ülemiste on 23 October 2014.
Car Trade
The sales revenue of car trade segment was 43.8 million euros during the first nine months of 2014. The sales revenue exceeded the revenue of the same period in the previous year by 29.0%; at that, the sales revenue of KIAs increased by 17.8%. In the third quarter, the sales revenue in the amount of 15.2 euros was 28.1% more than the sales revenue on the year-on-year basis; at that, the sales revenue of KIAs increased by 33.5%. During the first nine months, a total of 2,356 vehicles were sold, whereof 825 vehicles were sold during the third quarter. The net profit of the segment during the first nine months of 2014 was 1.1 million euros and the net profit of the third quarter was 0.9 million euros. The profit before taxes of the segment during the first nine months of 2014 was 1.6 million euros, exceeding the profit of the first nine months of 2013 by 5.5%, The net profit of the third quarter of 2014 was 0.9 million euros which is 67.9% more than the profit of the same period in the year before.
Footwear trade
The sales revenue of footwear trade segment was 10.2 million euros during the first nine months of 2014, which is 0.4 million euros less than the sales revenue of the same period in the previous year. The sales revenue of the third quarter was 3.3 million euros, which was a 13.2% decrease as compared to the same period in 2013. The loss of the first nine months was 1.3 million euros. The loss of the same period in 2013 was 0.2 million euros. The loss of the third quarter was 0.4 million euros. A year earlier, the result in the third quarter of 2013 was 0 euros. The sales revenue was influenced by moving the flagship store of ABC King to the second floor of the Viru centre. The sales revenue was also decreased due to unfavourable weather conditions: i.e. the cold weather at the beginning of the summer. Due to this, the sales and gross marginal were lower than planned. The loss of the third quarter is related to the planned overhaul of the merchandise portfolio, which also reduces the gross marginal temporarily.
Real Estate
The sales revenue of the real estate business segment outside the Group was 2.5 million euros in the first nine months of 2014, which is 0.1 million or 5.7% more than during the same period in the previous year. The sales revenue outside the Group was 0.8 million euros in the third quarter, which is 0.04 million or 5% more than during the same period in the previous year. The increase in sales revenue of the third quarter is due to reorganising leased spaces in 2013, when the spaces that were previously used by the Group were leased to persons outside the Group. The profit before taxes of the real estate segment was 6.7 million euros in the first nine months of 2014 (in 2013, it was 6.5 million euros), which is 0.2 million or 3.5% more than during the same period in the previous economic year. The profit before taxes of the third quarter was 2.3 million euros (in the third quarter of 2013, the profit before taxes was 2.2 million euros), which is 0.1 million or 3.9% more than during the same period in the previous economic year. The increase in profits was caused by space leased to other segments of the Group that was added in 2013.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
| 30.09.2014 | 31.12.2013 | |
| ASSETS | ||
| Current assets | ||
| Cash and bank | 5,513 | 14,766 |
| Trade receivables and prepayments | 21,239 | 15,991 |
| Inventories | 56,863 | 51,937 |
| Total current assets | 83,615 | 82,694 |
| Non-current assets | ||
| Receivables and prepayments | 312 | 313 |
| Investments in associates | 1,859 | 1,711 |
| Investment property | 3,035 | 3,035 |
| Property, plant and equipment | 227,194 | 229,406 |
| Intangible assets | 10,447 | 10,636 |
| Total non-current assets | 242,847 | 245,101 |
| TOTAL ASSETS | 326,462 | 327,795 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 8,734 | 14,300 |
| Trade payables and other liabilities | 70,225 | 67,725 |
| Total current liabilities | 78,959 | 82,025 |
| Non-current liabilities | ||
| Borrowings | 82,736 | 77,104 |
| Provisions and prepayments | 888 | 878 |
| Total non-current liabilities | 83,624 | 77,982 |
| TOTAL LIABILITIES | 162,583 | 160,007 |
| Equity | ||
| Share capital | 16,292 | 24,438 |
| Statutory reserve capital | 2,603 | 2,603 |
| Revaluation reserve | 67,524 | 68,617 |
| Currency translation differences | -255 | -257 |
| Retained earnings | 77,715 | 72,387 |
| TOTAL EQUITY | 163,879 | 167,788 |
| TOTAL LIABILITIES AND EQUITY | 326,462 | 327,795 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
| III quarter 2014 | III quarter 2013 | 9 months 2014 | 9 months 2013 | |
| Revenue | 133,173 | 124,735 | 389,533 | 360,516 |
| Other operating income | 156 | 152 | 520 | 567 |
| Materials, consumables used and services | -100,574 | -93,599 | -295,841 | -272,208 |
| Other operating expenses | -12,145 | -12,231 | -37,963 | -37,480 |
| Staff costs | -10,813 | -9,720 | -33,894 | -29,728 |
| Depreciation, amortisation and impairment losses | -2,734 | -2,726 | -8,126 | -8,221 |
| Other expenses | -150 | -148 | -587 | -362 |
| Operating profit | 6,913 | 6,463 | 13,642 | 13,084 |
| Finance income | 8 | 7 | 19 | 24 |
| Finance costs | -392 | -350 | -1,127 | -944 |
| Finance income on shares of associates | 51 | 48 | 148 | 134 |
| Profit before tax | 6,580 | 6,168 | 12,682 | 12,298 |
| Income tax | -1,014 | 0 | -2,338 | -3,770 |
| NET PROFIT FOR THE FINANCIAL YEAR | 5,566 | 6,168 | 10,344 | 8,528 |
| Other comprehensive income: | ||||
| Items that will be reclassified subsequently to profit or loss | ||||
| Currency translation differences | 0 | -15 | 2 | -243 |
| Other comprehensive income/loss for the financial year | 0 | -15 | 2 | -243 |
| TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR | 5,566 | 6,153 | 10,346 | 8,285 |
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
