2008-05-19 15:15:00 CEST
2008-05-19 15:15:01 CEST
REGULATED INFORMATION
Tiimari Oyj Abp - Interim report (Q1 and Q3)
Tiimari net sales improving and earnings developed as expected during the first quarter
Tiimari Plc STOCK EXCHANGE RELEASE 19 May 2008 at 16.15
TIIMARI OYJ ABP INTERIM REPORT 1 JANUARY - 31 MARCH 2008
(Unaudited)
TIIMARI NET SALES IMPROVING AND EARNINGS DEVELOPED AS EXPECTED DURING THE FIRST
QUARTER
KEY FIGURES OF OPERATIONS ON REVIEW PERIOD 1 JANUARY - 31 MARCH 2008:
- Net sales grew by 22% to MEUR 17.8 (MEUR 14.6)
- Earnings before interest, taxes, depreciation and amortization (EBITDA) fell
to MEUR -0.6 (MEUR 0.2)
- Earnings after tax MEUR -2.0 (MEUR -1.2)
- Earnings per share MEUR -0.20 (MEUR -0.12)
- Tiimari Retail net sales improving and earnings as planned
- Tiimore Oy earnings and net sales below expectations, the gains on the sale of
property and fixed assets had a positive profit effect
CEO'S REPORT
The business development of the first quarter of the current year was as
expected. Net sales grew by 22%. The modernisation of stores continued in
accordance with the concept that was implemented during the previous year. In
addition, the company continued to prospect for new business locations in select
markets to secure future growth.
Realisation of synergies estimated in connection with the acquisition of retail
chain Gallerix began as planned. The co-operative negotiations concerning the
reduction of workforce of the acquired company were concluded and the
integration of purchasing functions and utilisation of supplier relations were
set in motion as expected. The result of the first quarter was weighed down by
the overlapping expenses, which will have a similar impact on the second quarter
as well.
The second Finnish Gallerix store was opened in Tammisto in Vantaa. The first
store was opened in the Sello shopping centre last year. By the end of the
current year, the number of Gallerix stores will approximate ten in Finland.
During the period under review, the objectives and schedule of the previously
introduced program for rationalised disposal of assets were defined in order to
implement the plan. The release in working capital has a material impact on the
company's financial situation.
In the period under review, preparatory work began with regard to the transition
from an outsourced financial management system to an internal solution. The
financial management system was selected and the personnel recruitment process
launched.
After the review period, two financial management professionals commenced their
duties in addition to the chief accountant. All the new employees are experts in
the new financial management system. The reorganisation of the financial
management induces overlapping solution implementation expenses in the form of
personnel and IT expenses during the first half of the year.
The reorganisation is implemented with a view to a high-quality financial
management function with good cost-efficiency.
”Tiimari business is defensive in nature, meaning that economic fluctuations
have no material effect on the operations. We are confident in a positive future
development.""I would like to emphasise that Tiimari Group's business is strongly Q4-oriented
with most of the earnings being entered as income during the final quarter".
During the review period, the operations consisted of two primary business
segments, Tiimari Retail and Tiimore. The portrayed segments represent the
internal Group structure and internal financial reporting.
TIIMARI RETAIL
Net sales of the Tiimari Retail segment for the period 1 January - 31 March 2007
amounted to MEUR 17.6 and the earnings totalled MEUR -1.8. The comparable
consolidated net sales remained similar to the previous year.
MEUR 13.1 (MEUR 13) of the consolidated net sales were generated by the Finnish
Tiimari concept stores. The net sales of the international Tiimari concept units
grew by 16% to MEUR 1.3 (MEUR 1.1). The business of the international units
developed as expected except for Russia, where operations were launched later
than anticipated.
Operations under the Gallerix concept are included in the Tiimari Retail
segment. Net sales of the Gallerix concept totalled MEUR 3.2 for the review
period, of which the majority were generated in Sweden. Net sales of the
Gallerix concept in Finland amounted to TEUR 50 during the period under review.
At the end of the review period, Tiimari had a total of 182 own stores, the
number of the equivalent period in 2007 being 177 stores. In Finland, the store
in Rauma was closed down while a new store was opened in Kauniainen. A replacing
store will be opened in Rauma in spring 2008. In addition, Tiimari opened new
stores in Poznan, Poland and St. Petersburg, Russia. In 2008, Tiimari will open
five new stores in Poland. The company is actively exploring the possibilities
for opening new stores reflecting both concepts also in the other geographical
markets, such as in Russia.
Number of stores
31.3.2008 31.3.2007
Finland 157 156
Estonia 14 14
Latvia 4 4
Norway 1 1
Poland 5 2
Russia 1 0
Own stores 182 177
Franchise stores
Finland 4 6
Sweden 9 10
Tiimari stores, total 195 193
Gallerix stores
Finland 2
Sweden 5
Own stores 7
Franchise stores
Sweden 87
Gallerix stores, total 94
Tiimari Retail
stores, total 289 193
A central part of Tiimari's strategy is to increase the number of stores and to
optimise their location and size in square metres.
The acquisition of Gallerix in the second half of 2007 is still boosting the
domestic business growth potential. The Gallerix retail concept fits the Finnish
market well, as mainly individual specialised stores and home decoration
departments of department stores are currently focusing on the increasingly
popular wall furnishing and decoration trend. Tiimari is therefore planning to
convert and open several stores under the Gallerix concept during the current
year.
The group will become an increasingly favourable partner to shopping centres and
other store facility leaseholders through the combined appeal of two vibrant
concepts. The combination of these strong concepts will strengthen Tiimari's
position also when obtaining new business facilities in the Baltic countries,
Poland and in Russia.
Gallerix International AB concluded the co-operation negotiations concerning the
Group's overlapping purchasing and administrative functions on 18 February 2008.
The overlap pertained to 14 employees whose employments were terminated. This
streamlining is estimated to yield a benefit of TEUR 400 per year, of which
approximately TEUR 200 is projected to realise in 2008. The remaining TEUR 600
of the MEUR 1 in total synergies revealed at the time of acquisition will be
realised within two years from the acquisition through an increased contribution
margin, enabled by the integration of the purchasing function with that of
Maritii Oy.
TIIMORE
Net sales of the Tiimore segment for the period 1 January - 31 March 2008 were
MEUR 0.2 and the earnings totalled MEUR 0.4.
Tiimore Oy concluded the co-operation negotiations on the Kokkola unit on
19 February 2008 by deciding to close down the unit. The decision is in line
with the new business strategy and was made with a view to improved
profitability. The decision affected 11 employees whose employments were
terminated. The closing down of the factory will bring savings of approximately
TEUR 500 per year, of which approximately TEUR 180 is estimated to realise
during the current financial year.
On 13 March 2008, Tiimore Oy sold its factory property in Kokkola as well as all
the related fixed assets. The property was purchased by Kokkolan Terästalo Oy,
and the fixed assets by Fineweld Oy. The total purchase price of the property
and fixed assets was MEUR 1.1, which will yield a profit of approximately
TEUR 860.
FINANCIAL RESULT
The consolidated net sales of the Tiimari Group for the first quarter amounted
to MEUR 17.8 (MEUR 14.6). Earnings before interest, taxes, depreciation and
amortization (EBITDA) were MEUR -0.6 (MEUR 0.2). EBITDA of the first quarter of
the comparison year 2007 includes MEUR 0.5 of inventory write-offs related to
the acquisitions of the Tiimari business.
During the period under review, the company adopted a principle of depreciating
inventories older than 30 months. The depreciation principle is applied to all
Group concepts.
The impact of the acquisition of Gallerix on the earnings before interest,
taxes, depreciation and amortization (EBITDA) was MEUR -0.1. The result of the
review period included MEUR 0.1 in depreciation attributable to the acquisition
of Gallerix.
The result of the financial year after tax was MEUR -2.0 (MEUR -1.2) for the
period under review. Earnings per share totalled EUR -0.20 (‑0.12).
BALANCE, FINANCIAL SITUATION AND INVESTMENTS
On 31 March 2008, the consolidated balance sheet total was MEUR 96.3
(MEUR 91.0). The company has a solid financial situation. Interest-bearing net
liabilities accounted for MEUR 38.7 (MEUR 34.1), the solvency ratio was 39.1%
(38.2%) and the net gearing 102.7% (98.4%). The increase in interest-bearing net
liabilities as compared with the previous financial year was due to the
acquisition of Gallerix in November 2007. Seasonal fluctuations have a
considerable impact on the company's financial situation.
During the period under review, Tiimari made investments amounting to MEUR 0.6,
which were made mainly in the retail store network.
HUMAN RESOURCES
On 31 March 2008, the Group employed 575 (566) persons, the average personnel
count of the period being 611 (633) individuals. The majority of employees
worked for Tiimari Retail Oyj. On 31 March 2008, the parent company employed
12 (1) people, the average number of employees for the period being
12 (3) persons.
GROUP STRUCTURE
Tiimari Plc group consists of the parent company Tiimari Plc, directly or
indirectly entirely owned companies Gallerix International AB (Uppsala),
Gallerix Sverige AB (Uppsala), Oy Gallerix Finland Ab (Helsinki), Maritii Oy
(Helsinki), Tiimari Retail Oyj (Lahti), Tiimari Sweden AB (Stockholm), Tiimari
Baltic AS (Tallinn), Tiimari Latvia SIA (Riga), Tiimari Norway AS (Oslo),
Tiimari Polska SP Z.O.O (Warsaw), ooo Tiimari (Moscow), ooo Tiimari (St.
Petersburg), Tiimore Oy (Helsinki) and Tuotesampo Oy (Tuotesampo Oy has no
operations). The Group also includes the joint-stock property company
Osuuskunnantie 30 (Helsinki), which is a 10% subsidiary of Tiimari Plc and a 90%
subsidiary of Tiimore Oy. This joint-stock property company has sold its real
estate holdings and all on-site buildings.
SHARE CAPITAL
At the end of the review period, the registered share capital of Tiimari Plc
totalled EUR 7,686,200, representing an aggregate number of 10,311,070 voting
rights. The company had a total of 2,598 shareholders.
At the end of the review period, the number of own shares held by the company
was 11,850. The number of shares corresponds to that held at the beginning of
the period. The nominal value of shares held by the company was MEUR 0.01 and
the proportion of share capital and voting rights 0.11%.
BOARD OF DIRECTORS' AUTHORISATIONS
Under a decision by the Annual General Meeting held on 4 April 2008, the Board
of Directors was authorised to decide on assigning an aggregate maximum of
1,000,000 new shares in the form of a share issue or special rights (including
stock options) entitling to shares pursuant to Chapter 10, Section 1 of the
Finnish Companies Act in one or more tranches. The Board of Directors may decide
to issue either new shares or the company's own shares that may be in the
company's possession. The proposed maximum amount of the authorisation
represents approximately 9.7% of all company shares on the date on which the
invitation to the Annual General Meeting was published. The authorisation is
used for financing and implementing potential acquisitions or other
arrangements, consolidating the company's balance sheet and financial situation,
for implementing staff engagement and incentive compensation systems or for any
other purposes determined by the Board of Directors. The authorisation covers
the right of the Board of Directors to decide on any and all terms and
conditions of share issues and the issuing of special rights pursuant to Chapter
10, Sections 1 of the Finnish Companies Act, including the right to identify the
beneficiaries of shares or of special rights entitling to shares and to
determine the amount of consideration. The authorisation shall thus entitle the
Board of Directors to directed issues of shares or special rights i.e. to a
deviation from the shareholders' pre-emptive right subject to the provisions of
the applicable law. The authorisation revokes all previous unused authorisations
for share issues and remains in force until the next Annual General Meeting but
no later than 30 June 2009.
DEVELOPMENTS AFTER THE REVIEW PERIOD
Tiimari Plc Annual General Meeting held on 4 April 2008 approved the
2007 financial statements. The Annual General Meeting decided on the payment of
dividend of EUR 0.16 per share totalling MEUR 1.6. The reconciliation date for
dividend distribution was 9 April 2008, and the dividend was paid on
17 April 2008. The Annual General Meeting discharged the Board of Directors and
the CEO from liability for the financial year 2007.
It was decided that the Board of Directors shall consist of seven members, and
members elected to the Board are Arja Hautanen, Erik Helin, Kirsti Lindberg-Repo
and Peter Seligson with Alexander Rosenlew, Teppo Kauppila and Juha Mikkonen as
new members.
KPMG Oy Ab was selected as the company auditor, which in turn appointed the
Authorised Public Accountant Sixten Nyman as the principal auditor.
In its organisation meeting, the Board of Directors elected Peter Seligson as
the Chairman. Juha Mikkonen was elected as the chairman of the Audit Committee
with Teppo Kauppila and Peter Seligson as committee members. The Board of
Directors elected Peter Seligson to chair the Nominating and Compensation
committee and appointed Alexander Rosenlew and Arja Hautanen as committee
members.
On 28 April 2008, Tiimari signed a letter of intent to acquire franchise
business activities under the Tiimari concept in Sweden from Roponen
Detaljisthandel AB. The letter of intent includes all Tiimari concept shops in
Sweden, the net sales of which totalled approximately MEUR 3 in 2007. Upon
realization of the letter, the purchase price is settled against the sales
receivables of Roponen Detaljisthandel AB. The transaction is expected to have
no material impact on the 2008 result.
FUTURE PROSPECTS
The company's net sales for the second quarter have developed as planned. With
regard to the international markets, new business locations will be opened in
Poland and Russia this year. The modernisation of the Finnish retail store
network to reflect the renewed visual concept will continue according to plan.
The company envisions growth in the 2008 net sales. Earnings before taxes are
expected to improve compared to the 2007 figures. As last year, the majority of
the earnings are entered as income during the final quarter.
SHORT-TERM RISKS AND UNCERTAINTIES
The most significant challenges to Tiimari business operations are caused by
changes in the overall consumer demand and in the competitive environment and,
with regard to international markets, the availability of good business
locations. Tiimari continues to focus heavily on developing both its stores and
marketing activities. The company is seeking growth in the number of visitors
and the amount of purchases per visitor, as well as developing its international
operations.
Managing the potential growth requires investments in administration, new
locations, internationalization and recruiting more staff. Tiimari strives to
prepare for changes in consumer demand and the competition environment by
knowing the consumer, constantly developing the company concept, and by
implementing new and innovative business solutions.
This Interim Report release is prepared in accordance with the principles of the
International Financial Reporting Standards (IFRS) but not in full compliance
with IAS 34. This Interim Report release is prepared according to the same
principles as Tiimari's 2007 Annual Financial Statements.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
EUR 1,000 2008 2007 2007
1-3 1-3 1-12
NET SALES 17,776 14,571 74,570
Other operating income 936 229 347
Change in inventories 593 -481 -1,269
Materials and supplies -7,981 -4,996 -28,206
Employee benefit costs -4,547 -3,949 -15,708
Depreciation -670 -594 -2,402
Other operating expenses -7,404 -5,215 -23,003
Operating profit/loss -1,297 -435 4,329
Financial income and expenses -759 -672 -2,747
Profit/loss before taxes -2,056 -1,107 1,582
Taxes 7 -120 1,580
Profit/loss for the review period -2,049 -1,227 3,162
Profit/loss for the financial period -2,049 -1,227 3,162
Parent company's shareholders'
profit, earnings
per share
Undiluted earnings per share -0.20 -0.12 0.32
Adjusted diluted
earnings per share correspond to the
undiluted earnings
CONSOLIDATED BALANCE SHEET
31.3.2008 31.3.07 31.12.07
ASSETS
Goodwill 37,493 35,456 37,385
Other intangible assets 19,351 15,173 19,760
Tangible assets 4,785 3,460 4,650
Other financial assets 114 114 114
Receivables 81 83 100
Deferred tax assets 32 0 30
Total non-current assets 61,856 54,286 62,039
Inventories 26,160 24,797 25,473
Trade and other receivables 5,853 3,953 6,877
Liquid assets 2,480 7,969 2,852
Total current assets 4,493 36,719 35,202
Non-current assets
available for sale 0 0 124
TOTAL ASSETS 96,349 91,005 97,365
SHAREHOLDERS' EQUITY AND LIABILITIES
Parent company's shareholders'
equity
TOTAL SHAREHOLDERS' EQUITY 7,643 34,708 39,667
LIABILITIES
Deferred tax liabilities 6,681 5,382 6,692
Interest-bearing liabilities 28,080 20,700 28,220
Provisions 23 53 23
Total non-current liabilities 34,784 26,135 34,935
Interest-bearing liabilities 13,056 21,417 5,787
Provisions 8 0 8
Accounts payable and other payables 10,858 7,507 16,968
Tax liabilities 0 1,238 0
Total current liabilities 23,922 30,162 22,763
TOTAL LIABILITIES 58,706 56,297 57,698
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 96,349 91,005 97,365
CALCULATION OF CHANGES TO THE GROUP'S SHAREHOLDERS' EQUITY
Parent company's shareholders' equity
Calculation of changes to shareholders' equity 1.1.-31.3.2008
Invested
free Fair
Share equity Own value Accumulated
SH equity capital fund shares fund Transl. diff. profits Tot.
1.1.2008 7,686 13,828 -55 0 -240 18,448 39,667
Transl. difference conversion 38 38
Profit/loss for the financial period -2,049 -2,049
Total recognised profit
and loss for the period 38 -2,049 -2,011
Other items -13 -13
Shareholders' equity
31.03.2008 7,686 13,828 -55 0 -202 16,386 37,643
Calculation of changes to shareholders' equity 1.1.-31.3.2007
Invested
free Fair
Share equity Own value Accumulated
SH equity capital fund shares fund Transl. diff. profits Tot.
1.1.2007 7,686 11,558 -55 0 -27 16,729 35,891
Transl. difference conversion 44 44
Profit/loss for the financial period -1,227 -1,227
Total recognised profit
and loss for the
period 44 -1,227 -1,183
Other items 0 0
Shareholders' equity
31.03.2007 7,686 11,558 -55 0 17 15,502 34,708
CASH FLOW STATEMENT
1-3/08 1-3/07 1-12/07
Consolidated statement of cash flows
Cash flows from operations
Profit/loss for financial period -2,049 -1,227 3,162
Adjustments:
Depreciation and impairment 670 594 2,402
Financial income and expenses 759 670 2,747
Taxes -7 120 -1,580
Other adjustments -893 139 1,757
Change in working capital:
Change in short-term receivables 1,150 -288 -2,540
Change in inventories -687 408 164
Change in short-term liabilities -6,716 -6,662 1,888
Interests paid -174 -562 -3,079
Interest income received 24 20 193
Taxes paid -142 -50 173
Net cash flow from operations -8,065 -6,838 5,287
Cash flows from investment activities
Investments in tangible and intangible
assets -565 -176 -2,697
Acquisitions of subsidiary companies
net of cash acquired 0 0 -4,645
Capital gains from
tangible and intangible assets 1,100 6,410 6,818
Repayment of loan receivables 19 50 -650
Additional purchase price paid 0 0 -1 500
Net cash flow from investments 554 6,284 -2,674
Cash flows from financing activities
Share issue 0 0 0
Long-term loans, increase 0 0 12,229
Long-term loans, decrease -160 -147 -5,098
Short-term loans, increase 7,295 2,962 7,060
Short-term loans, decrease 0 -2,616 -20,792
Dividends paid 0 0 -1,477
Net cash flow from financing 7,135 199 -8,078
Change in liquid assets -376 -355 -5 465
Liquid assets, beginning of review period 2,852 8,323 8,323
Effects of exchange rate changes on liquid assets 4 0 -6
Liquid assets, end of review period 2,480 7,968 2,852
SEGMENT-SPECIFIC FIGURES
The primary segment-specific reporting of Tiimari Group is according to business
segments. The portrayed segments represent the internal Group structure and
internal financial reporting. The segments of the group are Tiimari and Tiimore
businesses.
Net sales by segment
EUR 1,000 2008 2007 2007
1-3 1-3 1-12
Tiimari
External 17,574 14,101 72,570
Total 17,574 14,101 72,570
TiiMore
External 202 470 2,000
Internal 21 20 40
Total 223 490 2,040
Other operations
Internal 1,521 97 1,403
Total 1,521 97 1,403
Elimination -1,542 -117 -1,443
Group 17,776 14,571 74,570
Operating profit/loss
Tiimari business operations -1,768 -310 2,951
Tiimore business operations 430 -62 -572
Other operations 41 -63 1,950
Total -1,297 -435 4,329
CONTINGENT LIABILITIES 31.3.2008 31.3.2007 31.12.2007
Financial institution loans against
the following securities 27,815 24,963 20,527
Real estate mortgages 1,000 2,361 2,361
Corporate mortgages 31,137 31,137 31,137
Pledged shares 1,476 1,476 1,476
Other own liabilities:
Bank guarantees 1,645 975 1,927
Other liabilities 413 13 413
Leasing liabilities
Due within one year 30 21 30
Due after one year 10 30 21
OTHER RENT LIABILITIES
Due within one year 11,904 10,638 12,108
Due after one year 16,822 5,530 17,814
GROUP INVESTMENTS AND DEPRECIATIONS EUR 1,000
2008 2007 2007
1-3 1-3 1-12
Gross investments 565 177 10,803
Depreciation 241 3,051 7,329
CHANGES TO GROUP'S FINANCIAL INSTITUTION LOANS
2008 2007 2007
1-3 1-3 1-12
Increase 7,295 2,962 19,288
Decrease -160 -2,763 -27,389
Total changes 7,135 199 -8,101
KEY FINANCIAL FIGURES
1-3/08 1-3/07 1-12/07
Net sales 17,776 14,571 74,570
Operating profit / loss -1,297 -435 4,329
Profit/loss for the financial period -2,049 -1,227 3,162
Earnings per share, EUR -0.20 -0.12 0.32
Shareholders' equity per share, EUR 3.65 3.53 3.85
Shareholders' equity per share (diluted), EUR 3.65 3.53 3.85
Solvency ratio 39.07% 38.14% 40.75%
Gearing 102.69% 98.39% 78.54%
Balance sheet total 96,349 91,005 97,365
Average number of shares (pcs) 10,311,070 9,847,750 9,908,680
Interest-bearing net liabilities 38,656 34,148 31,155
CALCULATION OF KEY FINANCIAL FIGURES
Earnings per share (EPS), EUR=
(Earnings before taxes - taxes) / Adjusted average number of shares
Shareholders' equity per share, EUR=
Shareholders' equity / Number of shares at the end of the review period
Solvency ratio-%=
(Shareholders' equity*100)/(Balance sheet total - advances received)
Gearing=
(Interest-bearing liabilities - cash in hand and at bank) * 100/Shareholders'
equity
Interest-bearing net liabilities
Interest-bearing liabilities - cash in hand and at bank
SHAREHOLDERS
On 31 March 2008, Tiimari Plc had a total of 2,598 (2,789) shareholders.
Major shareholders, 31.3.2008
% of shares
Shares and voting
rights
Atine Group Oyj 2,134,664 20.7
Assetman Oy 1,100,000 10.7
Baltiska Handels Ab 480,949 4.7
Cumasa Oy 407,625 4.0
Varma Mutual Pension Insurance Company 375,000 3.6
Ilmarinen Mutual Pension Insurance Company 351,781 3.4
Nordea Bank Finland Oyj, administrative reg. 343,880 3,3
Troll Capital Oy 185,000 1.8
Edgar Holding Ab 154,440 1.5
Pohjola Non-Life Insurance Company 145,000 1.4
Suomen Kauppayhtiöt Oy 125,000 1.2
Nordea Bank Finland Plc 122,100 1.2
AB Arapten 3858 110,314 1,1
Sonesson Thomas 110,314 1.1
Tapiola Suomi Mutual Fund 103,602 1.0
Arvo Finland Value Mutual Fund 100,000 1.0
Moneda Consulting Oy 87,500 0.9
Syrjänen Jaakko 61,875 0.6
Turpeinen Urho 50,000 0.5
AB Arapten 3861 44,126 0.4
Sonesson Peter 44,126 0.4
Illi Kristina 35,787 0.4
Jyväsjärvi Juha 35,000 0.3
Lamy Oy 32,625 0.3
Mäki Raimo 31,800 0.3
Kristina Illi
CEO
Distribution: Helsinki Stock Exchange
Key media
www.tiimari.com
Further information: CEO Kristina Illi, tel. +358 (0)400 408 889
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