The consolidated non-audited sales revenue of the Tallinna Kaubamaja Group was 6.3 billion kroons (402.8 million euros) in 2010. The sales revenue of the Group was 6.4 billion kroons (408.3 million euros) in 2009, which translates into a drop of 1.3% compared to the preceding year. The sales revenue of the fourth quarter was 1.7 billion kroons (109.8 million euros), which makes it higher by 5.2% year-on-year. The profit for the financial year was 260.5 million kroons (16.6 million euros). In the fourth quarter, the profit was 115.7 million kroons (7.4 million euros). The loss of the year 2009 was 196.7 million kroons (12.6 million euros), whereas the loss of the fourth quarter of the previous year was 173.7 million kroons (11.1 million euros).
Although the Group’s sales revenue was down by 1.3%, the continued growth of the market share in Estonia is good news. The Group’s sales revenue in Estonia was up by 1.0% and the retail trade market by 0.4%. The Group sales revenue decreased by 18.4 million kroons (1.2 million euros) due to the sales tax levied in Tallinn since June. In the second half of the year, the purchase prices of goods were under pressure because of the increasing prices of raw materials and labour on the global market that had a negative impact on the Group’s gross margin in the fourth quarter. In the annual outcome, improved inventory management has ensured a higher gross margin compared to 2009. In 2010, the Group’s internal efficiency continued to grow. Rearranging our processes led to saving on labour and operating costs. The depreciation costs have decreased due to the write-down of fixed assets in 2009. The amount of financial expenses has reduced due to lower interest rates. The impairment tests conducted on the Group’s assets at the end of the financial year increased the value of fixed assets in the total amount of 0.8 million kroons (0.1 million euros) as reported in the profit and loss statement.
The sales revenue of the department stores business segment was 1,153.2 million kroons (73.7 million euros) in 2010, down by 3.6% year-on-year. The sales revenue for the fourth quarter was 350.6 million kroons (22.4 million euros), an increase of 2.0% compared to the previous year. The net profit of department stores was 21.2 million kroons (1.4 million euros) in 2010, which is lower by 6.8 million kroons (0.4 million euros) compared to 2009 due to smaller financial income inside the Group. The operating profit of the department stores segment grew from 5.7 million kroons (0.4 million euros) in 2009 to 15.3 million kroons (1.0 million euros) in 2010. Much smaller discounts given compared to 2009 had a positive impact on operating profit, making it possible to earn a much higher gross profit from lower turnover. Improved management of inventory and margins also contributed to the growth of operating profit. Men’s, sports and digital products departments of Tartu Kaubamaja were renovated in the first quarter of 2010, having a negative effect on sales. 2010 was an anniversary year for Kaubamaja with 50 years from the opening of Tallinna Kaubamaja. The marketing campaigns of the anniversary increased marketing costs by 5.7% year-on-year. The year 2010 in Kaubamaja was the year of introducing a new management accounting system, which was taken into use from 1 January 2011. All in all, the total operating expenses of 2010 remained on the level of 2009. The sales revenue of OÜ TKM Beauty Eesti, which had so far been operating three I.L.U. cosmetics stores, was 34.6 million kroons (2.2 million euros) in 2010 and 12.7 million kroons (0.8 million euros) in the fourth quarter. The respective year-on-year sales revenues were 12.2 and 7.6 million kroons (0.8 and 0.5 million euros) in 2009. The net loss of the fourth quarter of 2010 was 1.2 million kroons (0.1 million euros), which was partly due to the one-time opening costs of the fourth store of the I.L.U. chain. The net loss of the financial year of the I.L.U. chain was 6.9 million kroons (0.4 million euros). In 2011, the focus will be on activities that help to grow the chain’s market share and increase the profitability of the stores.
The consolidated sales revenue of the business segment of supermarkets was 4.7 billion kroons (300.2 million euros) in 2010, a year-on-year fall of 1.4%. The sales revenue for the fourth quarter was 1.2 billion kroons (79.2 million euros), a growth of 2.7% compared to the previous year. The consolidated profit before taxes of the supermarket segment was 146.1 million kroons (9.3 million euros) in 2010, showing a growth of 176.7 million kroons (11.3 million euros) compared to 2009. The consolidated pre tax profit of the fourth quarter was 53.0 million kroons (3.4 million euros), a year-on-year growth of 74.9 million kroons (4.8 million euros). The consolidated net profit was 139.0 million kroons (8.9 million euros) in 2010, growing by 174.0 million kroons (11.1 million euros) compared to the previous year.
The sales revenue of the supermarket segment in Estonia was 4.7 billion kroons (300.2 million euros) in 2010, exceeding the sales revenue earned in 2009 by 1.7%. The sales revenue of the fourth quarter was 1.2 billion kroons (79.2 million euros), exceeding the year-on-year sales revenue by 4.6%. In 2010, 33.3 million purchases were made in Selver stores in Estonia, exceeding the number of purchases by 0.8% year-on-year. The pre tax profit earned in Estonia was 193.1 million kroons (12.3 million euros) in 2010, of which 64.2 million kroons (4.1 million euros) were earned in the fourth quarter. Compared to the previous year, the profits grew by 77.4 million kroons (4.9 million euros) and 12.0 million kroons (0.8 million euros), respectively. The net profit earned in supermarkets in Estonia was 186.0 million kroons (11.9 million euros) in 2010, which gives an annual growth of 167.1%, or 74.7 million kroons (4.8 million euros).
Successful marketing activities that helped to grow the number of customers and the average size of a shopping basket had a positive effect on the annual sales figures. The overall growth in consumer confidence as well as the rise in food prices in Estonia also had their effect. The tightening of competition in some regions, different value added tax rates of the financial and reference years and the sales tax in Tallinn effective from June also had a negative impact on the sales revenue. In 2010, the main focus was on increasing profitability in Selver. While the net profit margin of Selver was 2.4% in 2009, the respective indicator was already 4.0% in 2010, growing by 1.5% points in a year. A remarkable efficiency was achieved in labour costs that have fallen by 7.8% regardless of the higher turnover and larger number of purchases. As for operating expenses, additional agreements were made to reduce fixed costs and the opportunities to save on variable costs were reviewed. The amount of stock carried at stores was optimised and the synergy created by the companies belonging to the Group has been taken advantage of.
Selver did not earn any sales revenue in the fourth quarter in Latvia due to the closing of Latvian stores. The sales revenue in Latvia was 0.2 million kroons (10.0 thousand euros) in 2010 compared to 150.8 million kroons (9.6 million euros) earned on the same period of the previous year. The loss before taxes and net loss of SIA Selver Latvia was 47.0 million kroons (3.0 million euros) in 2010, decreasing by 99.3 million kroons (6.3 million euros) year-on-year. The net loss earned in the fourth quarter was 11.2 million kroons (0.7 million euros), decreasing by 62.9 million kroons (4.0 million euros) year-on-year. All economic activities have been frozen and monthly costs have been reduced to minimum in Latvia.
On December 23rd, A-Selver AS, the parent company, increased the share capital of SIA Selver Latvia with non-cash contributions in the amount of 220.5 million kroons (14.1 million euros), necessary to ensure the continued operations of the company.
The non-Group sales revenue of the real estate segment was 38.8 million kroons (2.5 million euros) in 2010, a year-on-year reduction of 9.0% due to the decline in rental activities in Latvia. The non-Group sales revenue of the segment was 9.5 million kroons (0.6 million euros) in the fourth quarter, which is a drop by 7.5% year-on-year. The segment’s profit was 104.6 million kroons (6.7 million euros), of which, 27.4 million kroons (1.8 million euros) was earned in the fourth quarter. In 2009, the segment suffered a loss in the amount of 115.6 million kroons (7.4 million euros) due to the large-scale write-down of assets.
The sales revenue of 2010 without the intersegment transactions was 202.0 million kroons (12.9 million euros), lower by 2.8% of the year-on-year revenues; whereas the sales revenue of the fourth quarter was 54.2 million kroons (3.5 million euros), which was 86.3% higher compared to the period a year ago. The net profit of the car trade segment was 3.4 million kroons (0.2 million euros) in 2010, including 1.0 million kroons (0.1 million euros) in the fourth quarter. In 2009, the car trade segment suffered a loss of 23.0 million kroons (1.5 million euros), including 4.7 million kroons (0.3 million euros) in the fourth quarter. The market share of KIA vehicles in the Baltic countries was 2.9% in 2010, with an annual growth of 30%. The growth continued in the fourth quarter. The improved market situation, low cost base and better margins explain the better economic results of 2010.
The consolidated sales revenue of the footwear business segment was 211.0 million kroons (13.5 million euros) in 2010, growing by 17.4% compared to 2009. The sales revenue was 64.0 million kroons (4.1 million euros) in the fourth quarter, growing by 46.9% compared to 2009. The profit of the fourth quarter was 3.8 million kroons (0.2 million euro). The total loss in footwear trade in the fourth quarter of 2009 was 11.5 million kroons (0.7 million euros). The total loss suffered in 2010 was 7.8 million kroons (0.5 million euros), including the loss of Latvian companies in the sum of 1.2 million kroons (0.1 million euros), a drop of 84.8% compared to 2009. The decreased loss is mainly due to the higher sales revenue, better margin and significant reduction in operating costs as well as closing non-profitable stores. The successful sale of winter goods and the rapid expansion of the SHU footwear chain accounted for a significant portion of the growth in turnover.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of
| EEK | EUR | |||
| 31.12.2010 | 31.12.2009 | 31.12.2010 | 31.12.2009 | |
| ASSETS | ||||
| Current assets | ||||
| Cash and bank | 246,176 | 223,691 | 15,734 | 14,296 |
| Trade receivables | 95,168 | 75,655 | 6,082 | 4,835 |
| Other short-term receivables | 86,825 | 82,032 | 5,549 | 5,242 |
| Prepaid and refundable taxes | 5,455 | 8,820 | 349 | 564 |
| Other prepayments | 11,711 | 12,404 | 748 | 793 |
| Inventories | 616,234 | 616,554 | 39,385 | 39,405 |
| Total current assets | 1,061,569 | 1,019,156 | 67,847 | 65,135 |
| Fixed assets | ||||
| Prepaid expenses | 19,904 | 25,499 | 1,272 | 1,630 |
| Shares in affiliated companies | 23,527 | 20,323 | 1,504 | 1,299 |
| Other long-term receivables | 2,207 | 3,613 | 141 | 231 |
| Investment property | 55,800 | 55,800 | 3,566 | 3,566 |
| Tangible fixed assets | 2,748,134 | 2,689,639 | 175,638 | 171,900 |
| Intangible fixed assets | 55,288 | 62,018 | 3,533 | 3,964 |
| Goodwill | 104,993 | 104,993 | 6,710 | 6,710 |
| Total fixed assets | 3,009,853 | 2,961,885 | 192,364 | 189,300 |
| TOTAL ASSETS | 4,071,422 | 3,981,041 | 260,211 | 254,435 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities | ||||
| Borrowings | 275,926 | 254,524 | 17,635 | 16,267 |
| Prepayments received | 8,964 | 2,983 | 573 | 190 |
| Trade payables | 631,765 | 713,855 | 40,377 | 45,623 |
| Tax liabilities | 73,174 | 63,490 | 4,677 | 4,058 |
| Other current liabilities | 63,828 | 62,720 | 4,079 | 4,009 |
| Provisions | 1,982 | 445 | 127 | 28 |
| Total current liabilities | 1,055,639 | 1,098,017 | 67,468 | 70,175 |
| Long-term liabilities | ||||
| Borrowings | 998,948 | 1,267,096 | 63,844 | 80,982 |
| Provisions | 1,382 | 1,736 | 88 | 111 |
| Total long-term liabilities | 1,000,330 | 1,268,832 | 63,932 | 81,093 |
| TOTAL LIABILITIES | 2,055,969 | 2,366,849 | 131,400 | 151,268 |
| Equity | ||||
| Share capital | 407,292 | 407,292 | 26,031 | 26,031 |
| Statutory reserve capital | 40,729 | 40,729 | 2,603 | 2,603 |
| Revaluation reserve | 834,085 | 673,976 | 53,308 | 43,075 |
| Retained earnings | 743,141 | 500,730 | 47,495 | 32,004 |
| Currency translation differences | -9,794 | -8,535 | -626 | -546 |
| TOTAL EQUITY | 2,015,453 | 1,614,192 | 128,811 | 103,167 |
| TOTAL LIABILITIES AND EQUITY | 4,071,422 | 3,981,041 | 260,211 | 254,435 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In thousands of
| EEK | EUR | |||
| 12 months 2010 | 12 months 2009 | 12 months 2010 | 12 months 2009 | |
| Revenue | 6,302,023 | 6,388,127 | 402,773 | 408 276 |
| Other operating income | 205,216 | 217,898 | 13,116 | 13 926 |
| Materials and consumables used | -4,802,729 | -4,966,417 | -306,951 | -317 412 |
| Other operating expenses | -693,167 | -727,064 | -44,301 | -46 468 |
| Staff costs | -543,931 | -614,084 | -34,764 | -39 247 |
| Depreciation and amortisation | -164,013 | -179,055 | -10,482 | -11 444 |
| Impairment losses | 778 | -239,461 | 50 | -15 304 |
| Other expenses | -13,141 | -34,339 | -840 | -2 195 |
| Operating profit | 291,036 | -154,395 | 18,601 | -9 868 |
| Financial income | 4,669 | 5,565 | 298 | 356 |
| Financial costs | -31,417 | -46,406 | -2,008 | -2 966 |
| Financial income on shares of associates | 3,204 | 2,818 | 205 | 180 |
| Profit/(loss) before income tax | 267,492 | -192,418 | 17,096 | -12 298 |
| Income tax | -7,037 | -4,331 | -450 | -277 |
| Net profit (loss) for the reporting period | 260,455 | -196,749 | 16,646 | -12 575 |
| Other comprehensive income/(loss) | ||||
| Exchange differences | -1,259 | -8,120 | -80 | -519 |
| Other comprehensive income for the reporting period | -1,259 | -8,120 | -80 | -519 |
| TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE REPORTING PERIOD | 259,196 | -204,869 | 16,566 | -13,094 |
In thousands of
| EEK | EUR | |||
| 4th quarter 2010 | 4th quarter 2009 | 4th quarter 2010 | 4th quarter 2009 | |
| Revenue | 1,717,725 | 1,633,135 | 109,783 | 104,377 |
| Other operating income | 62,879 | 77,943 | 4,019 | 4,981 |
| Materials and consumables used | -1,296,492 | -1,246,487 | -82,861 | -79,666 |
| Other operating expenses | -183,488 | -186,583 | -11,727 | -11,924 |
| Staff costs | -136,113 | -138,997 | -8,699 | -8,883 |
| Depreciation and amortisation | -38,564 | -35,851 | -2,465 | -2,292 |
| Impairment losses | 778 | -239,461 | 50 | -15,304 |
| Other expenses | -5,031 | -24,602 | -322 | -1,573 |
| Operating profit | 121,694 | -160,903 | 7,778 | -10,284 |
| Financial income | 1,227 | 1,427 | 78 | 92 |
| Financial costs | -8,164 | -14,982 | -522 | -958 |
| Financial income on shares of associates | 968 | 746 | 62 | 48 |
| Profit/(loss) before income tax | 115,725 | -173,712 | 7,396 | -11,102 |
| Income tax | 0 | 0 | 0 | 0 |
| Net profit (loss) for the reporting period | 115,725 | -173,712 | 7,396 | -11,102 |
| Other comprehensive income/(loss) | ||||
| Exchange differences | -330 | -8,447 | -20 | -540 |
| Other comprehensive income for the reporting period | -330 | -8,447 | -20 | -540 |
| TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE REPORTING PERIOD | 115,395 | -182,159 | 7,376 | -11,642 |
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
