Unaudited consolidated interim accounts for first quarter of 2012

The consolidated non-audited sales revenue of the Tallinna Kaubamaja Group for the first quarter of 2012 was 106.0 million euros, having grown by 10.3% compared to the results of the first quarter of 2011, when the sales revenue was 96.1 million euros. The sales revenue increased in all the segments of the Group, while the vehicle trade segment and the footwear segment indicated the greatest growth among the retail business segments. The profit of the reporting period was 3.2 million euros, which has doubled compared to the previous period. The profit in the first quarter of 2011 was 1.6 million euros.

The strong sales results were positively reflected in the Group’s profit earned in the first quarter. On the one hand, this was supported by the growth of domestic consumption in Estonia; on the other hand, the efforts of the Group in the previous years to improve the assortment of goods and keep fixed costs under control. In the first quarter, the greatest changes were made in the business segment of department stores – almost one third of the sales floor area in the Tallinn department store was partly or completely closed for renovation during almost two months. The women’s department of Tallinna Kaubamaja with its renewed brand portfolio and sales floor solution offering an integral and convenient purchasing environment was opened on 8 March. An intriguing and playful children’s department was opened on a sales space double its former size at the end of March. The modernised environment has an important role to play in increasing the competitiveness of the business segment of department stores.

The sales revenue of the department store business segment in the first three months of 2012 was 19.0 million euros, thus having increased by 12.6% compared to the same period of the previous year. The sales revenues were positively influenced by a successful end-of-the-season final campaign of winter goods, which was organised in January. The loss earned by the department stores in the first quarter of 2012 was 0.3 million euros, which is an improved result compared to the year-on-year 0.4 million euros. At the same time it should be kept in mind that the renovation works were carried out in the women’s department in Tallinna Kaubamaja from the middle of January until March, temporarily influencing the sales activities on 3,500 square meters. As a result the renovation works, the women’s department expanded by 1,000 square meters and was opened for the customers in its entirely renovated form on 8 March. Due to reconstruction works, 12.6% of the total sales floor area or 2,100 square meters was completely closed for two months; instead of the former sports and digital products department, the largest children’s department in Estonia was opened on that area on 22 March. In the first quarter of 2012, the sales revenue of OÜ TKM Beauty Eesti, which operates the I.L.U. beauty stores, was 0.8 million euros, having grown by 51.8% compared to the same period of the previous year. The net loss earned by the I.L.U. chain in the first quarter was 0.2 million euros, which is 0.03 million euros lower than in the same period of the previous year. Compared to the first quarter of last year, in April 2011 the I.L.U. chain also opened a fifth store in the Ülemiste Centre in Tallinn.

The consolidated sales revenue of the business segment of supermarkets in the 1st quarter of 2012 and the sales revenue in Estonia were 77.3 million euros, having increased by 7.1% compared to the period of a year earlier. The consolidated pre-tax profit and net profit of the supermarket segment was 1.9 million euros in the first quarter of 2012, showing a growth of 0.8 million euros or 77.7% compared to the same period of 2011. The pre-tax profit and net profit earned in Estonia was 2.4 million euros in the first quarter of 2012, up 0.8 million euros or 49.6% compared to the same period of the previous year. The increase in the sales revenue of the Selver stores in the 1st quarter has been promoted by successful sales campaigns and the fact that sales during the holiday season of the 1st quarter grew more than on average. In addition, the impact of the leap year was significant, as it added an extra selling day to the period under observation. Compared to the low reference base of the previous year, the sales revenue of industrial and convenience goods showed an improvement in the 1st quarter. The impact that the rise in prices had on the growth of the sales revenue of food products has started to reduce and the decrease of sales volumes has slowed down. Selver stores continue to focus on adapting the selection of goods to the changes in demand and on ensuring the availability of goods – the results are also becoming apparent in the improving sales results. Compared to the same period of the previous year, the increase in the sales revenue has been greatly affected by the tougher competition in the retail business market as well as the higher reference base on the account of the Soldino Selver, which was closed last year. The growth of profit in Estonia is primarily caused by the increased sales numbers and continued work with the assortment of goods and sales profitability. Thanks to that, the enterprise's gross profit margin has increased by 0.3 percentage points. In Selver stores, the focus is still on operational cost-efficiency and labour force efficiency. The creation of the bakers’ concept completed on 27 March and taking over the bakery stalls in the stores has temporarily increased the operating costs of 2012. Selver stores in Latvia have been closed down and no sales revenue of goods was earned in the 1st quarter of 2012 in Latvia. Similarly to last year, the sales revenue of the Latvian enterprise in the 1st quarter was 0.004 million euros. The pre-tax loss and net loss earned in Latvia was 0.6 million euros in the first quarter, decreasing by 0.9% compared to the first quarter of 2011. Economic activities in Latvia have been suspended.

The external sales revenue of the real estate business segment in the first quarter of 2012 increased by 6.1% compared to the same period of the previous year and totalled 0.7 million euros. The profit of the first quarter was 1.8 million euros. The profit increased by 8.3% compared to the first quarter of 2011, mainly due to the increased sales income.

The sales revenue of the vehicle segment in the 1st quarter of 2012 without inter-segment transactions was 6.1 million euros, thus exceeding the revenue of the same period of the previous year by 59.9%. The profit of the first three months doubled (0.4 million euros) compared to the first quarter of the previous year. The growth of profit was supported by the maintenance of cost-efficiency at good sales results.

The sales revenue of the footwear segment in the 1st quarter of 2012 was 2.9 million euros, indicating a growth of 13.9% compared to the same period of 2011. The considerable increase in sales was caused by the low reference base, favourable weather conditions (the sales of the 2010/2011 winter season remained in November-December of 2010, while in the 2011/2012 season, the majority of winter goods were sold in January and February), and the general boost in consumption, especially in the clothing and footwear sector. The loss earned in the first quarter was 0.5 million euros. The loss had decreased by 19.7% compared to the loss of the first quarter of 2011, which was 0.6 million euros. The main cause for the loss was the discounts at the end of the winter season, common in fashion trade.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

In thousands of euros

         Raul Puusepp
         Chairman of the Board
         Phone +372 731 5000