| Segments (EURm) | Q3/16 | Q3/15 | yoy | 9m/16 | 9m/15 | yoy |
| Supermarkets | 99.4 | 97.1 | 2.4% | 291.1 | 279.3 | 4.2% |
| Department stores | 22.1 | 21.3 | 3.8% | 68.1 | 66.6 | 2.3% |
| Cars | 21.9 | 17.3 | 26.7% | 63.3 | 45.6 | 38.8% |
| Footwear | 3.5 | 3.2 | 9.6% | 9.3 | 8.5 | 9.3% |
| Real Estate | 1.2 | 1.0 | 28.3% | 3.7 | 2.6 | 43.6% |
| Total sales | 148.1 | 139.8 | 6.0% | 435.5 | 402.6 | 8.2% |
| Supermarkets | 4.4 | 3.3 | 34.9% | 10.5 | 6.3 | 64.7% |
| Department stores | 0.7 | 0.6 | 6.9% | 1.7 | 1.6 | 8.0% |
| Cars | 1.6 | 0.7 | 129.6% | 3.0 | 1.8 | 68.3% |
| Footwear | -0.3 | -0.3 | -5.2% | -0.8 | -1.2 | -34.0% |
| Real Estate | 3.0 | 2.3 | 25.9% | 8.6 | 6.7 | 27.4% |
| Total profit before tax | 9.4 | 6.7 | 40.7% | 23.0 | 15.3 | 50.3% |
Tallinna Kaubamaja Group’s consolidated unaudited sales revenue for the third quarter amounted to 148.1 million euros, thereby surpassing the earlier sales revenue of the year by 6.0%. The nine-month sales revenue amounted to 435.5 million euros, indicating a growth by 8.2% in comparison with the 402.6 million euro nine-month sales revenue of the year before. The Group’s consolidated unaudited net profit for the third quarter of 2016 was 9.4 million euros, which is a 40.7% increase in comparison with the same period of the previous year. The Group’s net profit for the first nine months of 2016 was 17.8 million euros, which is a 55.6% improvement in comparison with the year before. The profit before tax for the first nine months was 23.0 million euros, which is a 50.3% growth in comparison with the previous year. A dividend payment affected the net profit, on which 5.2 million euros of income tax was paid during the first quarter of 2016; the amount of income tax paid the year before was 3.9 million euros.
The Group continued with a strong increase in sales revenue and profit during the third quarter. All of the Group’s segments have increased their sales revenue and achieved a bigger net profit in the year-on-year perspective for several consecutive quarters. Similarly to the previous quarter, the vehicle segment displayed the biggest growth in the third quarter with car sales accelerating in Latvia and Lithuania in addition to Estonia. This was achieved through the increase of retail sales as well as major sales deals. Selver and Kaubamaja displayed a more moderate growth in sales revenue, but efficient stock management in raiding the gross margin and an increase in employee efficiency contributed to a great deal in the profit of either segment. The footwear segment, which got a new manager in May, focused on the organisation of stores and assortment, which manifested in an extensive growth in sales. The activities aimed to curb losses in the segment shall continue with the optimisation of store spaces and operational expenditure. The sales space, which has increased in comparison with the year before, has slightly increased the number of employees. The increase in average wages is in line with the Estonian average, and includes an increase of the basic wages as well as performance pay on the excellent economic results.
Selver supermarkets
The consolidated sales revenue of the supermarket segment for the first 9 months of 2016 was 291.1 million euros, a year-on-year growth of 4.2%. The consolidated sales revenue of the third quarter was 99.4 million euros, amounting to a 2.4% increase in comparison with the same period of the year before. 27.0 million purchases were made in Selver supermarkets during the first 9 months of 2016, which is a 0.7% increase in comparison with the previous year. The consolidated profit before tax of the supermarkets segment for the first 9 months of 2016 was 10.5 million euros and the net profit 7.8 million euros, growing respectively by 4.1 million and 3.7 million euros in comparison with the year before. Therewith, the profit before tax earned in Estonia was 12.0 million euros and the net profit 9.4 million euros. The difference between net profit and profit before tax results in the income tax paid on dividends – the income tax paid on dividends in 2016 was 0.39 million euros bigger than the year before. Profit before tax and net profit of the third quarter were 4.4 million euros, which amounted to an increase by 1.1 million euros and of which 5.0 million euros was profit earned in Estonia. The nine-month loss earned in Latvia was 1.5 million euros, 0.5 million euros of which were earned during the third quarter. Loss earned in Latvia during the first nine months decreased by 0.3 million euros in comparison with the previous year. The increase in the revenue of the supermarkets segment during the third quarter was supported by the increase in the average value of the shopping cart resulting from the growth of real income. The opening of new Selver supermarkets has also increased the number of purchases from Selver, meaning that new customers have been won over. In comparison with 2015, new supermarkets include Kärberi Server opened in April 2016, Viimsi Selver opened in August 2015 and the e-Selver service launched in fall 2015. A negative impact on the growth of turnover was provided by the higher reference base due to the closing of Veeriku Selver in Tartu for six weeks of renovation works and the closing of Kerese Selver in February 2016. The sales results of the third quarter were influenced by a significantly cooler summer, resulting in the sales of several seasonal product groups falling below the results of the previous summer. A good crop year has reduced the percentage of fruit and vegetables in the customers’ shopping carts during the third quarter. When observed across supermarkets, the growth in sales revenue is led by the Selver supermarkets opened or renovated during recent years. The profit earned in Estonia has most of all been influenced by the increase of gross profit earned on the sale of goods, which has been achieved by altering the principles of the operations of the sale of goods and by optimising the buying-in process. With respect to operational expenditure, the level of cost-efficiency has been improved in comparison with the previous year. Pressure on the wage level is also apparent in the supermarkets segment. The Tallinn Administrative Court satisfied the claim for refund from the Tallinn City Enterprise Department for sales tax collected on excised goods. The one-off payment was included in the second quarter results. Loss earned in Latvia reduced due to the end of the lease contract of one store.
Department stores
The nine-month sales revenue of 2016 for the department stores business segment was 68.1 million euros, amounting to a year-on-year growth by 2.3%. Of this amount, the sales revenue of the third quarter amounted to 22.1 million euros, which is a 3.8% increase in comparison with the results of the third quarter 2015. The nine-month profit before tax in 2016 for the department stores segment was 1.7 million euros, which is an 8.0% improvement in comparison with the previous year. The third quarter profit before tax was 0.7 million euros, which indicates an improvement by 6.9% in comparison with the previous year. The nine-month sales revenue of the department stores segment was affected by different renovation projects which started already during the first quarter with the beauty and women’s departments of the Tartu department store and ended with the women’s footwear department and men’s department of the Tallinn department store during the third quarter. The products listed in the Kaubamaja e-shop launched in the beginning of March already reached 28,000 items by the end of the third quarter. The sales revenue of OÜ TKM Beauty Eesti that operates I.L.U. cosmetics stores was 1.1 million euros in the third quarter, amounting to a 3.0% year-on-year decrease. The loss of the third quarter was 0.1 million euros, equalling the loss of the same period from 2015. The nine-month sales revenue of 2016 was 3.4 million euros, amounting to year-on-year decrease of 0.9%. The nine-month loss in 2016 was 0.3 million euros, which is about equal to the loss of the same period of the previous year. The slower-than-expected launch of the Kvartal’s I.L.U. store in Tartu immediately before the summer season had a negative effect on sales and profit.
Car Trade
The 2016 nine-month sales revenue of the car trade segment was 63.3 million euros. The sales revenue topped the results of the same period from the previous year by 38.8%, whereas the sales revenue of KIAs grew by 36.5%. The sales revenue of 21.9 million euros earned in the third quarter exceeded the year-on-year results by 26.7%, including the sales revenue from KIA sales by 31.1%. During the first nine months, altogether 3,012 new vehicles were sold in the Group car trade segment, 1,003 vehicles were sold in the third quarter. The segment’s net profit for the first nine months of the year 2016 was 2.6 million euros, amounting to a 98.8% year-on-year growth. The segment’s profit before tax for the first nine months of 2016 was 3.0 million euros, topping the last year’s result from the same period by 68.3%. The net profit of the third quarter of 2016 was 1.6 million euros, which is a 129.6% improvement in comparison with the third quarter of 2015. All of the Group’s car trade enterprises indicated strong sales results during the first nine months of the year, whereas the strongest growth in sales was provided by the Latvian and Lithuanian salons. The KIA importer has done an excellent job in introducing the new models; the sale of the new KIA Sportage model has kicked off especially well. KIA’s reliability in the eyes of the customers is on constant increase. Intense work on corporate clients has also yielded great results. In addition, the Forum Auto car salon built two years ago has launched well and justified itself in every aspect. The new KIA models NIRO and Optima Wagon will be on sale soon. In Latvia, the Peugeot selection will be supplemented with the new Peugeot 3008 and Expert models.
Footwear trade
The 2016 nine-month sales revenue of the footwear trade segment was 9.3 million euros, which is a 9.3% year-on-year improvement. The third quarter sales revenue was 3.5 million euros, increasing by 9.6% in comparison with the same period of the previous year. The company’s third quarter net loss was 0.3 million euros, which amount to a 5.2% year-on-year decrease. An increased proportion of children’s goods and mass brands have helped to grow sales revenue. The reduction of end-of-season leftovers has improved the age structure of stock, first and foremost in the ABC King store chain. To improve the efficiency the company will continue to improve the efficiency of merchandise processes in addition to store space optimisation and cutting current expenditure.
Real estate
The sales revenue of the real estate business earned outside the Group in the first 9 months of 2016 was 3.7 million euros. The sales revenue increased by 43.6%, i.e. by 1.1 million euros in comparison with the previous year. The Group’s external sales revenue for the third quarter was 1.2 million euros, which is an increase of 28.3% or by 0.3 million euros in comparison with the same period of the previous year. The profit before tax of the real estate segment for the first nine months of 2016 was 8.6 million euros, which is a year-on-year increase of 27.4% or 1.8 million euros. The third quarter profit before tax was 3.0 million euros, amounting to a 25.9% year-on-year growth. The growth of sales revenue and profit was supported by the shopping and recreation centre opened in Viimsi in August 2015 and the rental of the Rézekne building in Latvia to an external party. The renovation works at the Tartu Kaubamaja Shopping Centre during which the whole shopping environment was modernised were concluded in March 2016.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
| 30.09.2016 | 31.12.2015 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 13,602 | 13,911 |
| Trade and other receivables | 10,454 | 20,191 |
| Inventories | 66,815 | 61,110 |
| Total current assets | 90,871 | 95,212 |
| Non-current assets | ||
| Long-term trade and other receivables | 294 | 293 |
| Investments in associates | 1,802 | 1,778 |
| Investment property | 46,956 | 44,963 |
| Property, plant and equipment | 195,159 | 196,691 |
| Intangible assets | 8,660 | 9,043 |
| Total non-current assets | 252,871 | 252,768 |
| TOTAL ASSETS | 343,742 | 347,980 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 12,300 | 33,377 |
| Trade and other payables | 70,021 | 77,066 |
| Total current liabilities | 82,321 | 110,443 |
| Non-current liabilities | ||
| Borrowings | 84,704 | 57,426 |
| Provisions for other liabilities and charges | 502 | 502 |
| Total non-current liabilities | 85,206 | 57,928 |
| TOTAL LIABILITIES | 167,527 | 168,371 |
| Equity | ||
| Share capital | 16,292 | 16,292 |
| Statutory reserve capital | 2,603 | 2,603 |
| Revaluation reserve | 64,608 | 65,701 |
| Currency translation differences | -255 | -255 |
| Retained earnings | 92,967 | 95,268 |
| TOTAL EQUITY | 176,215 | 179,609 |
| TOTAL LIABILITIES AND EQUITY | 343,742 | 347,980 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of euros
| III quarter 2016 | III quarter 2015 | 9 months 2016 | 9 months 2015 | |||
| Revenue | 148,099 | 139,759 | 435,483 | 402,559 | ||
| Other operating income | 308 | 213 | 1,259 | 604 | ||
| Cost of sales | -110,131 | -105,414 | -325,627 | -303,062 | ||
| Other operating expenses | -12,512 | -12,831 | -38,078 | -38,777 | ||
| Staff costs | -13,019 | -11,768 | -40,281 | -36,221 | ||
| Depreciation, amortisation and impairment losses | -3,006 | -2,919 | -8,687 | -8,620 | ||
| Other expenses | -159 | -127 | -548 | -457 | ||
| Operating profit | 9,580 | 6,913 | 23,521 | 16,026 | ||
| Finance income | 1 | 1 | 3 | 11 | ||
| Finance costs | -213 | -283 | -644 | -864 | ||
| Finance income on shares of associates | 27 | 45 | 124 | 133 | ||
| Profit before tax | 9,395 | 6,676 | 23,004 | 15,306 | ||
| Income tax expense | 0 | 0 | -5,219 | -3,873 | ||
| NET PROFIT FOR THE FINANCIAL YEAR | 9,395 | 6,676 | 17,785 | 11,433 | ||
| Other comprehensive income: | ||||||
| Items that may be subsequently reclassified to profit or loss | ||||||
| Currency translation differences | 0 | 0 | 0 | 0 | ||
| Other comprehensive income for the financial year | 0 | 0 | 0 | 0 | ||
| TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR | 9,395 | 6,676 | 17,785 | 11,433 | ||
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
