Unaudited consolidated interim accounts for the first quarter of
2024
Segments (EURm) |
Q1/24 |
Q1/23 |
yoy |
Selver
supermarkets |
146.4 |
147.2 |
-0.5% |
Department
stores |
24.0 |
24.7 |
-2.9% |
Car trade |
44.8 |
41.7 |
7.5% |
Security
segment |
4.5 |
2.9 |
58.6% |
Real Estate |
1.7 |
1.6 |
8.2% |
Total sales |
221.5 |
218.1 |
1.6% |
|
|
|
|
Selver
supermarkets |
1.0 |
1.7 |
-39.8% |
Department
stores |
-1.2 |
-0.8 |
53.2% |
Car trade |
2.3 |
3.0 |
-23.2% |
Security
segment |
-0.1 |
0.1 |
- |
Real Estate |
2.2 |
2.5 |
-11.0% |
IFRS 16 |
-0.4 |
-0.5 |
-25.4% |
Total profit before tax |
3.8 |
5.9 |
-35.6% |
In the first quarter of 2024, the consolidated
unaudited sales revenue of the Group was 221.5 million euros.
Compared to the first quarter of 2023, the growth was 1.6%. The net
loss for the reporting period was 1.5 million euros, which was 2.1
million euros lower compared to the profit of the first quarter of
2023, including income tax of 5.3 million euros (5.3 million euros
in 2023). The pre-tax profit was 3.8 million euros, and it also
decreased compared to the comparable result of the previous year by
2.1 million euros.
At a time when the retail trade volume index has
been in decline for almost two years, and in the first months of
the reporting year, the sales revenue of the entire retail trade
area was in decline, even in current prices, the Group still
managed to increase its sales revenue. The increase in turnover was
supported by the successful sales of the Group’s car segment. The
security segment, which expanded last year, also contributed with
high sales growth numbers. The first quarter of the year has
traditionally had the weakest profit due to the special nature of
the Group’s business operations. This year, the result was affected
by a more restrained increase in sales revenue than in the previous
year, and by the great price pressure caused by the economic
recession in all segments, especially in Group's largest business
segments. The car market as a whole, including the Group’s car
segment, was characterised by improved inventory levels and bigger
discount campaigns. In the Supermarkets segment, margins were
affected by the higher share of discounted products in customers'
shopping baskets. The continued rise in service prices increased
input costs, to cope with which we are looking for even greater
efficiency in all business processes. Labour costs increased by
5.6% in the first quarter of 2024, while the number of employees
increased by 1.7%.
In order to enhance the shopping convenience of
our customers, the Group has invested over a long period in the
development of online stores. In the first quarter of 2024, the new
online store of Kaubamaja, launched on a new platform, featured,
among other enhancements, an AI-based search engine, an advanced
filtering system, and an extensive range of inspirational modules
throughout the site. Brands now have enhanced opportunities to
strengthen their image through the online store's brand shops. In
the near future, customers will also have the option to order
clothes from the online store to try on in the physical store.
To ensure better quality and price, Selveri
Köök, its private label in the supermarket segment, actively
continues product development with the aim of offering customers a
wide variety of new flavours. At the same time, great attention is
paid to reducing the salt, sugar, and fat content in the products.
At the beginning of the year, several new products were added to
Selveri Köök's selection - chicken puree soup and minced meat soup,
ready meals, and snack platters. Among the desserts, a new addition
to the range is the cheerful spring Selveri Tibu (Selver Chick)
cake, which has already received a warm welcome from customers.
In order to streamline processes, the Group
began developing a central logistics centre in Maardu last year.
Large-scale construction works for the centre took place in the
first quarter. Completion of the logistics centre is scheduled for
autumn 2024. Work continued to install a total of 49 new public
electric car chargers in 17 Selver parking lots. Almost half of
them, i.e., 25, are ultra-fast chargers, which allow charging the
amount of energy needed to travel 100 kilometres in just a few
minutes.
The success of the Group’s activities and
investment decisions is evidenced by record numbers of loyal
customers joining the Group's Partner Card loyalty programme. At
the end of the reporting period, the number of loyal customers
exceeded 731 thousand, marking a 3.7% growth year-on-year. The
Partner App has been downloaded by more than 220,000 Partner Card
clients. As an added feature of the Partner Card programme, the TKM
Group's subsidiary TKM Finants AS offers "pay later" payment
solutions to Partner Card customers. To promote responsible lending
principles, TKM Finants AS joined the Tax and Customs Board's
X-Road service for individual tax data at the end of March,
enabling the lender to more accurately assess customers'
creditworthiness and make responsible credit decisions.
Selver supermarkets
The consolidated sales revenue of the supermarket business segment
in the first quarter of 2024 was 146.4 million euros, decreasing by
0.5% compared to the same period of the previous year. The average
monthly sales revenue per square metre of sales area in the first
quarter of 2024 was 0.40 thousand euros, decreasing by 6.5%
compared to the previous period. In terms of comparable stores, the
sales revenue of goods per square metre of sales area was 0.40
thousand euros, decreasing by 4.3% compared to the reference
period. In the first quarter of 2024, 9.3 million purchases were
made from Selver stores, accounting for a decrease of 2.5% compared
to the previous year.
The consolidated pre-tax profit of the
supermarkets segment in the first quarter of 2024 was 1.0 million
euros, 0.7 million euros less than in the previous year. The
consolidated net profit of the supermarket segment was 0.6 million
euros, 1.1 million euros less than last year. The difference
between the net profit and profit before income tax is due to the
income tax paid on dividends – this year, the income tax on
dividends was 0.5 million euros higher than in the year before.
Selver's sales results have been affected by the
general downturn in the Estonian retail environment. Retail trade
volumes have seen a prolonged decline, and consumer confidence
remains low. The growth of Selver's sales revenue has slightly
lagged behind the segment due to a higher comparison base and a
larger proportion of discounted products in the shopping basket.
The comparison base data is impacted by the closure of Järve Selver
in March 2023 for renovation and the preceding clearance sale of
the largest store, the closure of WOW Selver ABC in January 2023,
and the shutdown of Punane Selver in May 2023. The base data
excludes information from the Kurna Selver, which was opened in
August 2023.
The economic outcomes for the first quarter of
2024 will be primarily influenced by reduced sales of goods and a
decrease in gross profit stemming from a reduction in gross margin.
To mitigate the effects of diminished purchasing power and consumer
confidence, we have increased the discounts offered and, since
January, have initiated the permanently good standard prices
project. Within this framework, we consistently offer customers
approximately 650 products at highly favourable prices. During the
reporting period, the costs of many services and materials have
risen, leading to the overall level of operating expenses, despite
cost-saving efforts, being on par with the previous year. The
ongoing optimisation of work processes has allowed us to maintain
labour costs at last year's level and achieve moderate wage
growth.
Selver plans to open two new stores this year -
in Tallinn Rocca al Mare centre and in Tartu, at Raadi. Both stores
are slated for opening in the latter half of the year. The focus
remains on product assortment and process optimisation. As a
sustainability-oriented company, we strive to base all our
activities on conscious resource usage and contribute towards
sustainable development. To this end, we have developed a
sustainability strategy that directs our daily operations. As a
company valuing openness and transparency, we have also published
our commitments and objectives on our website. Our emphasis is on
reducing greenhouse gas emissions from direct activities, enhancing
waste recycling, minimising food waste, reducing packaging use,
shortening supply chains, and developing fast and convenient
digital solutions.
In the Kulinaaria field, active product
development continues with the aim of offering customers a wide
variety of new flavours, and great attention is paid to reducing
the salt, sugar, and fat content of products.
Department stores
The sales revenue of the department stores segment in the first
three months of 2024 was 24.0 million euros, 2.9% less than in the
same period of the previous year. The pre-tax loss of the Kaubamaja
department store segment in the first quarter of 2024 was 1.2
million euros. The pre-tax loss increased by 0.4 million euros.
The sales revenue of the Kaubamaja department
store per square metre of sales area was 0.30 thousand euros per
month in the first three months, which is 4.6% less than in the
same period last year. The cooling of the economic situation, which
began towards the end of the fourth quarter of last year, persisted
into the first quarter of this year, resulting in a more robust
winter discount campaign compared to the previous year, which also
impacted the results of Kaubamaja. At the same time, it's important
to remember that the base of the first quarter of last year was
very strong, with growth percentages in the double digits. The
performance of the Kaubamaja Tallinn sales house was adversely
affected by the ongoing construction of the Vanasadama tramway in
the centre of Tallinn, and the closure of the Viru Keskus bus
terminal, which significantly reduced foot traffic. On 29 February,
Kaubamaja launched an online store on a new platform, where
customer usability has been significantly enhanced, and the
AI-based recommendation engine sets the stage for improved sales
outcomes. On the new platform, the online shop forms a unified
entity with physical stores, where the key concepts include
pre-shopping, fast delivery, and the option to order from the
online store and pay in the physical store, or vice versa.
In the first quarter of 2024, the sales revenue
of OÜ TKM Beauty Eesti, which operates the I.L.U. cosmetics stores,
was 2.0 million euros, 16.6% more than in the same period in 2023.
In the first quarter, the profit was 0.04 million euros, which,
compared to the profit of the comparable period of 2023, decreased
by EUR 0.01 million. The reference base was affected by Ülemiste
I.L.U.'s one-month business interruption for repairs in the
previous period. Despite the fall in consumer confidence, sales
results met expectations thanks to successful promotional
campaigns.
Car trade
The sales revenue of the car trade segment in the first quarter of
2024 was 44.8 million euros. The sales revenue increased by 7.5%
compared to the previous year. The consolidated pre-tax profit of
the segment was 2.3 million euros in the first quarter, which is
0.7 million euros weaker than last year's result.
In the Baltic car market, economic uncertainty
has hindered the purchase of new cars, leading to a considerable
decline across the Baltics for the first three months. Despite the
market's uncertainty, the Group's car segment has sold a total of
1,349 new passenger cars in the first three months of the year,
which is 3.6% more than last year. The market downturn has
necessitated price campaigns and other marketing activities better
suited to the current market situation but have pressured sales
margins.
An important event of the first quarter was the
launch of the Škoda showroom by the Group's Lithuanian car company,
Motus Auto UAB, in Vilnius. Škoda consistently maintains one of the
three leading positions in the Baltic car market, and the addition
of Škoda to the Motus Auto UAB brand portfolio supports the
significant growth potential of the Group's car business in
Lithuania. However, the initial costs of the Škoda showroom were
incurred in the first quarter, negatively affecting profits.
In the spring, the KIA range will be expanded
with an updated model of the popular SUV, the KIA Sorento. Škoda's
model lineup will be enhanced by the completely renewed mid-class
passenger car, the Škoda Superb, which has enjoyed great sales
success in the past, and the updated SUV, the Škoda Kodiaq.
Security segment
The sales revenue of the security segment
outside the Group in the first quarter of 2024 was 4.5 million
euros, increasing by 58.6% in comparison with the same period of
last year. The pre-tax profit of the segment in the first quarter
was 0.1 million euros, compared to the same period last year, it
was 0.2 million euros weaker.
The results of the first quarter were most
affected by the costs related to the merger of the companies at the
end of 2023. The negative economic environment is particularly
impacting the field of security technology, where there has been
greater pressure on profit margins, which also affected the results
of the first quarter. The turnovers of all business areas
increased, with the most significant growth in the volume of
services in the control centre, which almost doubled.
Real estate
The sales revenue of the real estate segment outside the Group in
the first quarter of 2024 was 1.7 million euros, increasing by 8.2%
in comparison with the first quarter of the last year. The pre-tax
profit of the segment was 2.2 million euros in the first quarter.
The profit decreased by 11.0% in the reference period.
The growth of the segment's sales revenue was
primarily supported by the revitalised commercial space rental
market in the centres, with new tenants added to the rental spaces
of Tallinna Kaubamaja Gallery, Tartu Kaubamaja Centre, and Viimsi
Centre. Despite the general uncertainty characterising the economic
landscape, the number of visitors to the centres continues to
increase. The growth in the segment's sales income was also
contributed to by the car wash, built as an extension of the petrol
station at Raudkivi tee 1, leased to a non-group entity, situated
in the immediate vicinity of Peetri Selver, which commenced
operations last summer.
The decrease in the segment's profit was largely
due to the rise in the cost of borrowing, triggered by the swift
increase in the euro area interest rate, which began at the end of
2022 and impacted the segment's interest expenses with some delay.
The majority of the Group's loan portfolio is concentrated in the
real estate segment. Interest expense has almost doubled compared
to the benchmark from a year ago.
In the second half of last year, TKM Kinnisvara
AS began developing a logistics centre in Maardu to meet the needs
of the TKM Group. The total area of the centre is 17,200 m², and
the construction will cost approximately 20 million euros. The
construction of the logistics centre is funded through the Group's
own resources and a bank loan. A solar energy park will be
constructed on the roof of the logistics centre, the energy
production of which will cover a significant part of the building's
electricity consumption. The completion of the logistics centre is
scheduled for autumn 2024. At the end of last year, TKM Kinnisvara
AS and Enefit Volt commenced a partnership to install a total of 49
new public electric car chargers in 17 Selver car parks. Almost
half of these, i.e., 25, are ultra-fast chargers, enabling the
charging of the amount of energy needed to travel 100 kilometres in
just a few minutes.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
In thousands of euros
|
31.03.2024 |
31.12.2023 |
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
39,754 |
42,064 |
Trade and other receivables |
24,572 |
25,568 |
Inventories |
94,880 |
98,254 |
Total current assets |
159,206 |
165,886 |
Non-current assets |
|
|
Long-term receivables and
prepayments |
245 |
243 |
Investments in associates |
1,804 |
1,732 |
Investment property |
64,971 |
64,971 |
Property, plant and equipment |
431,191 |
433,306 |
Intangible assets |
24,951 |
25,370 |
Total non-current assets |
523,162 |
525,622 |
TOTAL ASSETS |
682,368 |
691,508 |
|
|
|
LIABILITIES AND EQUITY |
|
|
Current liabilities |
|
|
Borrowings |
38,842 |
48,820 |
Trade
and other payables |
138,448 |
114,573 |
Total current liabilities |
177,290 |
163,393 |
Non-current liabilities |
|
|
Borrowings |
266,665 |
258,857 |
Deferred tax liabilities |
5,356 |
5,356 |
Provisions for other liabilities and charges |
517 |
526 |
Total non-current liabilities |
272,538 |
264,739 |
TOTAL LIABILITIES |
449,828 |
428,132 |
Equity |
|
|
Share capital |
16,292 |
16,292 |
Statutory reserve capital |
2,603 |
2,603 |
Revaluation reserve |
115,840 |
116,521 |
Retained earnings |
97,805 |
127,960 |
TOTAL EQUITY |
232,540 |
263,376 |
TOTAL LIABILITIES AND EQUITY |
682,368 |
691,508 |
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
In thousands of euros
|
|
3 months 2024 |
3 months 2023 |
|
|
|
|
|
Revenue |
221,503 |
218,083 |
|
Other operating income |
209 |
332 |
|
|
|
|
|
Cost of
merchandise |
-162,090 |
-158,573 |
|
Services expenses |
-15,262 |
-15,895 |
|
Staff costs |
-27,294 |
-25,852 |
|
Depreciation, amortisation and impairment losses |
-10,610 |
-10,066 |
|
Other expenses |
-332 |
-393 |
|
Operating profit |
6,124 |
7,636 |
|
Finance income |
253 |
1 |
|
Finance costs |
-2,648 |
-1,806 |
|
Share of net profit of associates accounted for using the equity
method |
72 |
69 |
|
Profit before tax |
3,801 |
5,900 |
|
Income tax expense |
-5,312 |
-5,300 |
|
NET PROFIT FOR THE FINANCIAL YEAR |
-1,511 |
600 |
|
Other comprehensive income: |
|
|
|
Items that
will not be subsequently reclassified to profit or loss |
|
|
|
Other comprehensive income for the financial year |
0 |
0 |
|
TOTAL COMPREHENSIVE PROFIT FOR THE FINANCIAL YEAR |
-1,511 |
600 |
Basic and diluted earnings per share (euros) |
-0.04 |
0.01 |
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
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