2010-03-05 07:34:52 CET
2010-03-05 07:35:37 CET
REGULATED INFORMATION
Tiimari Oyj Abp - Financial Statement Release
Operative profitability improved towards the end of the year due to successfully implemented efficiency improvement program
Tiimari Plc Financial Statement Release 5 March 2010 at 08.30 OPERATIVE PROFITABILITY IMPROVED TOWARDS THE END OF THE YEAR DUE TO THE SUCCESSFULLY IMPLEMENTED EFFICIENCY IMPROVEMENT PROGRAM 2009 in brief - Revenue decreased 5 % and was EUR 80.1 million (84.6) - Gross margin % with comparable figures was 61 % (60) - EBITDA excluding non-recurring items was EUR 0.5 million (2.7), (see specification in key figures) - Operating profit excluding EUR 4.6 million (5.0) non-recurring items was EUR -2.9 million (-0.8) - Operating profit was EUR 7.5 million (-5.8) - Operating cash flow was EUR 3.8 million (1.9) and cash flow from investment activities was EUR -0.8 million (-4.2) - Net interest-bearing liabilities decreased and were EUR 22.6 million (32.0) and net gearing was 86 % (105) - Earnings per share were EUR -0.73 (-0.94) 4th quarter 2009 in brief - Revenue decreased 4 % and was EUR 31.9 million (33.4) - Gross margin % with comparable figures was 61% (63) - EBITDA excluding non-recurring items was EUR 6.8 million (5.8) - Operating profit excluding non-recurring items was EUR 5.9 million (4.7) - Operating profit was EUR 1.3 million (-0.3) - Operating cash flow was EUR 15.3 million (11.3) and cash flow from investment - activities was EUR 0.2 million (-2.3) - Earnings per share were EUR 0.05 (-0.19) Tiimari Managing Director Hannu Krook: “Tiimari's end of year sales developed better than the beginning of the year and the operating profit was clearly positive and significantly better than last year. The fourth quarter operative cash flow was over EUR 15.3 million and about EUR 4 million better than the review period. The whole of 2009 was for Tiimari exceptionally challenging when consumer demand turned into a decline. The cost savings from our profit improvement program were recognized according to plan, but the increase in gross margin did not because the sales had a more negative effect on the margin than the activities in reducing purchase costs and price increases for some products had a positive effect. The gross margin decreased additionally due to our reduced sales campaigns, by which we reduced the amount of stock units and inventory levels. The priority for 2009 was to strengthen the company balance sheet and increase cash flow. In May we strengthened our balance sheet and solidity with a EUR 6.1 million share emission. The optimization of our product offering started in the spring and the related aggressive reduction in stock keeping units as well as optimization of inventory levels played a central role in achieving the reduction targets in working capital. The number of units decreased from 37.000 in the beginning of the year to 7.000 by the end of the financial year. Our net debt decreased by EUR 9.4 million and our net gearing improved from 105 % to 86 %. The key issue in the improvement of the 2010 result is the abolishment of operations with negative profitability and cash flow. During 2009 we withdrew from Russia and Norway as well as initiated our withdrawal from Poland. In addition to these we integrated our Tiimari operations in Sweden into our Gallerix operations and by the end of March this year we have relieved ourselves from all Tiimari shops in Sweden. In Finland, we are focusing our improvement efforts in to the development of the Tiimari concept, hence we decided to cease the Gallerix operations in Finland - part of the Gallerix offering has been transferred into the Tiimari product offering. The focus of the operational development during the coming year is allocated to improve the efficiency of shop operations and cost structure. Our long-term goal is to reduce the share of personnel and rent expenses down below 40 % of revenue; about half of our shops achieved this level of cost efficiency during 2009. During 2009 personnel and rent expenses totalled 50 % of revenue. During 2010 we are critically examining and orderly reducing our shop network as well as attempting to optimise shop size. We will also continue the efficiency improving activities in relation to working capital turnover, to which the over 70 % reduction of stock units serves as strong foundation. We initiated the piloting of the party concept in February 2010 and during the spring our party concept will be launched across Finland. Tiimari will offer everything for party organising, from table settings to decorations and small surprises - also in the biggest shops gas inflated balloons. The party concept is expected to balance out our customer flows throughout the calendar year. During 2010 we will expand the product offering of the Gallerix segment in Sweden with products tangent to the concept.” The full year numbers presented in the financial statement release have been audited. KEY FIGURES -------------------------------------------------------------------------------- | | Q4/09 | Q4/08 | 2009 | 2008 | -------------------------------------------------------------------------------- | Revenue | 31 879 | 33 417 | 80 113 | 84 550 | -------------------------------------------------------------------------------- | Operating profit | 1 303 | -326 | -7 516 | -5 793 | -------------------------------------------------------------------------------- | Operating profit % | 4.1 % | -1.0 % | -9.4 % | -6.9 % | -------------------------------------------------------------------------------- | EBITDA | 3 787 | 5 801 | -2 513 | 2 722 | -------------------------------------------------------------------------------- | Non-recurring items | | | | | -------------------------------------------------------------------------------- | Write down of inventory, Tiimari | 2 818 | | 2 818 | | | Finland | | | | | -------------------------------------------------------------------------------- | Reorganisation costs related to | 535 | | 535 | | | closing of foreign subsidiaries | | | | | -------------------------------------------------------------------------------- | Income on sale of property | -480 | | -480 | | -------------------------------------------------------------------------------- | Change of Managing Director | 180 | | 180 | | -------------------------------------------------------------------------------- | Non-recurring EBITDA items total | 3 053 | | 3 053 | | -------------------------------------------------------------------------------- | Operative EBITDA | 6 840 | 5 801 | 540 | 2 722 | -------------------------------------------------------------------------------- | Impairments | 1 529 | 5 000 | 1 529 | 5 000 | -------------------------------------------------------------------------------- | Non-recurring costs total | 4 582 | 5 000 | 4 582 | 5 000 | -------------------------------------------------------------------------------- | Result for review period, cont. ops. | 1 024 | -1 909 | -10 116 | -9 824 | -------------------------------------------------------------------------------- | Result for review period | 938 | -2 142 | -10 789 | -9 929 | -------------------------------------------------------------------------------- | Earnings per share | 0.05 | -0.19 | -0.73 | -0.94 | -------------------------------------------------------------------------------- | Operative cash flow | 15 315 | 11 311 | 3 763 | 1 937 | -------------------------------------------------------------------------------- | Equity ratio | | | 34.7 % | 34.6 % | -------------------------------------------------------------------------------- | Net gearing | | | 85.6 % | 105.0 % | -------------------------------------------------------------------------------- | Total assets | | | 75 995 | 87 925 | -------------------------------------------------------------------------------- Further information: Managin Director Hannu Krook, tel: +358 3 812 911 Tiimari has today released a corporate governance statement for 2009. The statement can be found attached to this release and is also available on the company web site www.tiimari.com. FOURTH QUARTER The Group's result development The Groups revenue decreased in the fourth quarter by 4 % and was EUR 31.9 million (33.4). Operating profit excluding non-recurring items was EUR 5.9 million (4.7). As part of the improvements in the product offering and reduction of stock units, a EUR 3.0 million non-cash flow related impairment on inventory was booked at the end of the review period. After this there were 7.000 stock keeping units. In addition to the write down of inventory, a EUR 0.9 million non-cash flow related impairment booking was made on Tiimari Sweden's goodwill and a EUR 0.6 million on the total fixed assets in Poland. The operating profit was EUR 1.3 million (-0.3). Financing expenses were reduced and were EUR 0.7 million (1.6). The financing expenses for the comparison period included foreign exchange currency losses. The result for the gift merchandiser sold in the end of September is reported as discontinued operations and its result was EUR -0.1 million (-0.2). The net result for the review period increased significantly and was EUR 0.9 million (-2.1). Earnings per share were EUR 0.05 (-0.19). The capital expenditure amounted to EUR 0.3 million (2.5) and consisted mainly of capital expenditure related to efficiency measures. The cash flow for the fourth quarter was positive. SEGMENTS The revenue for the Tiimari segment during the fourth quarter was EUR 28.0 million (28.9). In the main market in Finland the revenue for the review period grew by EUR 0.3 million, but fell behind in all other markets: in the Baltic due to a decline in demand, in Poland due to developments in the currency exchange rate and in Sweden due to the biggest shop being transferred over to a franchisee. Russia and Norway had no sales during the fourth quarter, last year they sold EUR 0.2 million. The operating profit was EUR 0.9 million (1.0). The operating profit includes EUR 4.6 million of non-recurring items (5.0), of which the EUR 3.0 million write down of inventory and the impairments in Tiimari Sweden and Tiimari Poland on goodwill and fixed assets totalling EUR 1.5 million are the most significant. During the review period two shops were closed in Sweden and one in Finland. Three shops were opened in Finland and two in Poland during the review period. The opening of shops was based on previous commitments. The revenue for the Gallerix segment during the review period was EUR 4.0 million (4.7). The decline in revenue was affected especially by the development in the exchange rate for the Swedish currency, with comparable exchange rates the revenue would have grown by 1.6 %. The operating profit was EUR 0.5 million (0.2). In Finland one Gallerix shop was closed and negotiations were initiated to close the three remaining shops. Gallerix Finland's revenue for 2009 was EUR 0.8 million and operating profit EUR -0.6 million. KEY EVENTS The company started as part of its focus strategy to map non-profitable operations and investigate ways by which to cease the creation of losses. The investigation focused on the non-profitable Polish market as well as the non-profitable shops in Finland and Sweden. In order to improve the differentiation of the Tiimari business operations as well as balance out the seasonality of the business, a new product concept was developed, a party concept. To streamline the logistics, purchasing and product management, a decision was made to continue the cut-down on stock keeping units and during the end of the financial year the inventory value for removable items was written off. FINANCING The fourth quarter is significant for the company cash flow generation and financial position. The operative cash flow for the review period was strengthened and was EUR 15.3 million (11.3). The company's loan covenants included a working capital related so called clean-down clause, which the company complied with. REPORT BY THE BOARD OF DIRECTORS 2009 Financial year 2009 in brief The general economic development during the financial year was weak and the related decline in consumer demand decreased Tiimari's revenue, which was EUR 80.1 million (84.6). The company's profitability fell behind targets set. The revenue decreased and the profitability fell due to both the drop in revenue and the reduction in stock keeping units. Additionally, a rise in salaries and rent levels had a negative effect on profitability. In order to mend the cost structure the Group focused on the profitable core business segments and the main markets of Finland and Sweden. The product offering was also renewed, partly by reducing old stock units and partly by introducing new product categories. The operative EBITDA (EBITDA excluding non-recurring items) were EUR 0.5 million. The operating profit of EUR -7.5 million (-5.8) included non-recurring reorganisation costs and impairments of EUR 4.6 million (5.0). The operating profit excluding non-recurring items was EUR -2.9 million (-0.8). The operative cash flow grew to EUR 3.8 million (1.9). The reduction in inventory levels had a significant positive effect on the cash flow. The financial position of the Group was strengthened by a EUR 6.1 million share emission and a EUR 5.0 million convertible capital loan. GROUP KEY FIGURES -------------------------------------------------------------------------------- | | 2009 | 2008 | 2007 | -------------------------------------------------------------------------------- | Revenue | 80 113 | 84 550 | 74 570 | -------------------------------------------------------------------------------- | Operating profit | -7 516 | -5 793 | 4 329 | -------------------------------------------------------------------------------- | Operating profit % | -9.4 % | -6.9 % | 5.8 % | -------------------------------------------------------------------------------- | Operating EBITDA (excl. non-recurring | 540 | 2 722 | 6 732 | | items) | | | | -------------------------------------------------------------------------------- | Non-recurring items | -4 582 | -5 000 | 0 | -------------------------------------------------------------------------------- | Earnings per share | -0.73 | -0.94 | 0.32 | -------------------------------------------------------------------------------- | Return on equity | -38.0 % | -28.3 % | 8.4 % | -------------------------------------------------------------------------------- | Return on investments | -13.0 % | -8.3 % | 5.9 % | -------------------------------------------------------------------------------- | Equity ratio | 34.7 % | 34.6 % | 40.8 % | -------------------------------------------------------------------------------- | Net gearing | 85.6 % | 105.0 % | 78.5 % | -------------------------------------------------------------------------------- | Total assets | 75 995 | 87 925 | 97 365 | -------------------------------------------------------------------------------- | Personnel expenses | 21 765 | 19 154 | 15 708 | -------------------------------------------------------------------------------- | Average no. Personnel | 730 | 680 | 634 | -------------------------------------------------------------------------------- Additional key figures are presented in the notes to the financial statements Revenue development of the Group Tiimari's revenue fell by 5 % and was EUR 80.1 million (84.6). With comparable exchange rates the drop would have been 3 %. The gross margin was EUR 45.5 million (50.5), that is 56.8 % (59.7). The operative EBITDA before non-recurring items was EUR 0.5 million (2.7). EBITDA of EUR -2.5 million (2.7) included withdrawal related costs from Poland, Sweden, Norway and Russia totalling EUR 0.5 million, inventory write downs in Tiimari Finland totalling EUR 2.8 million, income on sales of property totalling EUR 0.5 million and costs related to the change of Managing Director totalling EUR 0.2 million. The write downs of inventory had a negative EUR -3.0 million or 3.8 % effect on gross margin. The Group's operating profit was EUR -7.5 million (-5.8). The operating profit included non-recurring items totalling EUR 4.6 million (5.0), of which EUR 1.5 million (5.0) related to impairment of fixed assets. Of the non-recurring items EUR 4.6 million had no effect on cash flow. Net financing expenses were EUR 3.1 million (4.1). The improvement in financial position and the decline in the general interest rates resulted in reduced interest expenses, but additional costs occurred due to reorganisation of financing during the financial year. The taxes for the financial year were EUR 0.5 million (0.1), mainly due to the reduction of deferred tax liabilities related to purchase price allocations. In the end of September the gift merchandiser reported under the Tiimore segment was sold and its result is reported as discontinued operations. The result for Tiimore segment was EUR -0.7 million (-0.1). The net profit was EUR -10.8 million (-9.9). Earnings per share were EUR -0.73 (-0.94). Profit improvement program In the beginning of the financial year a EUR 8.0 million profit improvement program was initiated. Nearly EUR 4.0 million cost savings were sought after from reductions in working hours, marketing expenses, in-sourcing of the financial management and other expenses. These programs were recognised according to plan. In Finland the reduction of 66 thousand working hours were executed and new shops increased the working hours by 35 thousand hours. The savings concentrated mainly on the utilisation of hired personnel and these costs were reduced significantly. These are reported as other operating expenses. Salary expenses were increased in Finland in May by 3.5 % due to the collective labour agreement and on an annual basis the collective agreement increased personnel expenses by 4.7 %. By streamlining operations in Gallerix and withdrawing from Russia and Norway a total of EUR 1 million savings in cost were sought after. Of these, the losses in Russia and Norway decreased by EUR 0.6 million. The impacts relating to the efficiency measures in Gallerix will be recognised in full during 2010. A EUR 3 million improvement in gross margin was sought after by reductions in purchasing cost for products and price increases for certain products. The general decline in consumer demand lead to a reduction in revenue and an intensifying competition and the gross margin targets were not achieved despite the executed measures. Even though the comparable gross margin percentage increased by one percent, we still fell clearly behind this particular target in the profit improvement program. The product offering was also expanded with new branded products, which gross margin is lower than the company average. Part of the program also included the strengthening of cash flows. Capital expenditure was restrained and even though the number of shops increased during the review period, the capital expenditure remained at EUR 1.3 million (5.2). The inventory levels were reduced during the financial year by EUR 8.5 million (2.8), of which EUR 3.0 million related to write downs. The turnover rate of inventory was raised by optimising purchases and by developing logistics management. The number of stock keeping units was reduced significantly during the financial year and product management was developed in order to raise the turnover rate of the inventory. SEGMENTS Organisational structure The Group comprises two business segments: Tiimari and Gallerix. The Tiimari segment consisted of shops consistent with the Tiimari retail shop concept and purchasing, logistics and marketing support functions in Finland, the Baltic states, Poland, Sweden, Russia and Norway. The Gallerix segment consisted of franchising operations consistent with the Gallerix retail shop concept and own shops in Sweden and Finland. The reported number from the business segments also include income statement and balance sheet items caused by the purchase of the companies that is depreciation related to historical cost conventions, intangible assets and goodwill. The gift merchandiser sold 30th September 2009, which previously comprised the Tiimore segment, is reported as discontinued operations. Group Management belongs to other operations. Tiimari The revenue for the Tiimari segment fell by 5.9 % and was EUR 66.9 million (71.1). The revenue development was affected by the current economic climate, which deteriorated especially in the Baltic and Polish markets. The sales also decreased in Finland. Tiimari withdrew from the Russian market during the beginning of the financial year and from Norway during the summer. These comprised EUR 0.3 million of the sale drop or 0.4 %. The gross margin was EUR 40.4 million and 60.3 % (45.4 and 63.8 %). The gross margin fell by 4.5 % due to the EUR 3.0 million non-recurring inventory write-downs; by excluding the non-recurring items the gross margin would have been better than last year. The gross margin was also negatively affected by the reduced sales campaigns held in order to reduce the product offering. Tiimari put effort in renewing its product offering and old units with low inventory and sales levels were removed from the product offering during the end of the financial year. The number of active product titles fell by about 7.000 from the previous 37.000. Rent and personnel expenses were 50 % of revenue. Rents totalled EUR 14.9 million (13.0), the rise in expenses was mainly due to opening new shops and an increase in the rent level in Finland as well as opening new shops in Poland and Lithuania and Sweden included in the Group for a full financial year. The total personnel expenses resulting from own personnel and utilisation of hired personnel was EUR 18.5 million (18.1). The reduction in working hours netted of the increase in expenses caused by the collective labour agreement in Finland, but the increase was caused by Sweden being included in the Group for a full financial year. The share of expenses relating to own personnel increased because working hour reductions were primarily allocated towards hired personnel. The operating profit of Tiimari segment was EUR -4.9 million (-3.8). The operating profit includes non-recurring items totalling EUR 4.4 million (5.0). The non-recurring items comprise mainly of EUR 3.0 million inventory write downs and EUR 1.5 million impairments of fixed assets, of which EUR 0.9 million was impairment of goodwill in Tiimari Sweden. Additionally, EUR 0.3 million non-recurring items were booked relating to withdrawals from Poland, Russia and Norway. Last year an impairment booking on Tiimari's goodwill was executed. Operating profit before non-recurring items was EUR -0.6 million (1.2). Developments in the segment were targeted to reducing non-profitable operations and improving profitability in already profitable operations. The positive effect of these measures will be recognised during 2010. The reductions were allocated to geographical markets, individual shops as well as the product offering. During the end of the financial year a decision was made to withdraw from the Polish market and close Tiimari shops in Sweden or consolidate them with the operations of Gallerix franchisees. During the financial year two shops were closed in Sweden and after the end of the year agreements have been reached to sell the rental agreements for the rest of the shops. Furthermore, during the year withdrawals were made from the non-profitable markets in Norway and Russia. The share of the closed markets in Poland, Norway and Russia of Tiimari's revenue was EUR 1.1 million or 1.7 % and EUR -2.1 million of the operating profit (the numbers include non-recurring items). During the financial year 13 new shops were opened and 13 were closed. At the end of the financial year Tiimari had 208 shops (208) and during the financial year there were an average of 207 shops (191). NUMBER OF SHOPS -------------------------------------------------------------------------------- | Number of shops | 12/2009 | 12/2008 | -------------------------------------------------------------------------------- | Finland | 170 | 166 | -------------------------------------------------------------------------------- | Estonia | 16 | 16 | -------------------------------------------------------------------------------- | Latvia | 4 | 4 | -------------------------------------------------------------------------------- | Lithuania | 2 | 1 | -------------------------------------------------------------------------------- | Norway | 0 | 1 | -------------------------------------------------------------------------------- | Poland | 10 | 8 | -------------------------------------------------------------------------------- | Russia | 0 | 4 | -------------------------------------------------------------------------------- | Sweden | 6 | 8 | -------------------------------------------------------------------------------- | Total shops | 208 | 208 | -------------------------------------------------------------------------------- The assets of the segments were reduced significantly during the financial year and were at the end EUR 63.1 million (74.3). The reduction was due to capital expenditure being smaller than depreciation and the reduction in inventory levels. By optimising purchases and organising reduced sales for product titles that were to be excluded from the product offering, the inventory levels were reduced by about EUR 5 million. Furthermore, a write down of about EUR 3.0 million was booked on inventory. The capital expenditure for the financial period was EUR 1.0 million (4.2). The investments were made into new shops and the development of the inventory check system and logistics. The investment for the comparison year also included the purchase of Tiimari Sweden. The average number of personnel for the segment during the financial period was 648 (600). The average number of personnel is calculated based on normal working hours. Gallerix The revenue for the Gallerix segment was EUR 13.4 million (13.6). With unchanged currency rates Gallerix revenue grew by 7 %. The gross margin was EUR 4.9 million or 36.3 % (5.3 and 38.8). The operating profit fell and was EUR -0.8 million (-0.5). The operating profit include EUR 0.5 million (0.5) depreciation relating to purchase price allocations. The profitability was especially oppressed by the non-profitable operations of Gallerix Finland. Gallerix's rent and personnel expenses totalled 35 % of revenue. The cost structure and gross margin level of the franchising business differs from the ones in the Tiimari segment. Rent expenses were EUR 1.2 million (1.0) and personnel expenses EUR 3.2 million (3.0). The increase in expenses was due to the opening of new shops in Finland. Gallerix also initiated activities to focus on its core business and reduction of non-profitable shops and operations. The business administration was streamlined. During the end of the financial year Gallerix had 10 own shops in Sweden (13) and 3 shops in Finland (6). It was decided to cease the operations of Gallerix Finland in different shops as non-profitable and during the financial year 4 shops were closed. The revenue in Finland was EUR 0.8 million (0.4) and operating profit EUR -0.6 million (-0.3). In Sweden, the number of own shops was reduced by four. The chain included 79 franchise shops (79), all in Sweden. A profitability and payment problem relating to some franchisees had a negative effect on the segment's profitability because the franchisees were supported financially by granting marketing support or prolonging payment periods. In order to improve the profitability of the franchisees tools were developed to monitor profitability and quickly identify liquidity issues for the franchisees. The product offering was developed, old product titles were reduced and the Gallerix and Tiimari frame and card offering was unified. Gallerix services were expanded to include the construction of a painting from the customers own materials. In Luleå, a trial commenced with the local franchisee where the Gallerix and Tiimari shop were integrated under the same roof. The segment assets at the end of the financial year totalled EUR 8.8 million (9.0). Capital expenditure was EUR 0.2 million (0.7). The average number of personnel during the financial year was 66 (61). The increase in numbers was a result from the larger number of own shops during the financial year. Others The Group's gift merchandiser was sold 30th September 2009 to its operative management. Tiimari remained as a shareholder in Tiimari Promotion Ltd with a 10 % share. The sale did not have a significant impact on the Group result. The result reported as discontinued operations was EUR -0.7 million (-0.1). The other segment comprises Group Management. The segment revenue was EUR 0.4 million (1.2) and operating profit EUR -1.8 million (-1.5). The number of personnel at the end of the review period was 2 (17), the average number during the financial year was 10 (13). The capital expenditure of the segment was EUR 0.0 million (0.3). FINANCING The Group's net working capital decreased and was EUR 0.3 million (10.7). The inventory level by EUR 8.4 million and was EUR 15.0 million (23.4). The reduction was due to the optimisation of purchases and the intentional improvement in inventory turnover rate as well as the booking of non-recurring write downs. Short-term receivables totalled EUR 3.5 million (4.3) and fell by EUR 0.8 million. Short-term non-interest bearing liabilities totalled EUR 18.2 million (17.0). Long-term assets totalled EUR 54.5 million (58.1). In May the shareholder's equity of Tiimari Plc was strengthened by a EUR 6.1 million directed share emission. In October a EUR 5.0 million convertible capital loan was released. Equity ratio was 34.7 % (34.6) and net gearing improved and was 85.6 % (105.0). Quick ratio was 0.30 (0.17). Shareholder's equity per share was EUR 1.60 (2.69). The amount of interest bearing liabilities at the end of the financial year was EUR 25.6 million (34.2). Of these EUR 22.2 million (0) was long-term. Cash and bank totalled EUR 3.0 million (2.2) at the end of the financial year. The net operating cash flow was EUR 3.8 million (1.9) and cash flow from investment activities was EUR -0.8 million (-4.2). Investments in tangible assets were EUR 1.3 million (4.5) and business acquisitions were EUR 0.0 million (0.7). Sales of fixed assets totalled EUR 0.5 million (1.0). The debt financing includes loan covenants governing the company's financial position, cash flow, EBITDA and capital expenditure levels. EBITDA requirements are monitored on a quarterly basis. The Company rearranged its loan contracts during the financial year and before the end of the financial year due to EBITDA requirements. The Group operations are characterised by seasonality and the first quarters of the financial year have usually been non-profitable, the result and cash flow accumulating mostly during the last quarter. Therefore, the financial position is still strained and to balance this, a significant increase in operational profitability compared to 2009 is required as well as special attention to working capital turnover and capital expenditure. Considering the financing situation and the company's financial position, the Board has decided to propose to the Annual General Meeting that no dividend is to be paid for the financial year 2009. PERSONNEL The average number of personnel in the Group during the review period was 730 (690) and at the end of the financial year 894 (855). Of these 704 (576) were in Finland. The Group employs, typical to its operations, a large number of part-time employees. In addition to own personnel, in Finland hired personnel has especially been utilised due to the seasonality and during holiday periods. During the beginning of the financial year a cost savings program for working hours was initiated, as part of the profit improvement program. The reduction in working hours were recognised according to plan and were allocated primarily towards hired personnel. The opening of new shops increased the need for labour force during the financial year. CHANGES IN MANAGEMENT Hannu Krook was appointed Managing Director for Tiimari Plc 19th January 2009 and commenced in the position 7th April 2009. Kristiina Illi left Tiimari 7th April 2009. Markku Breider commenced as Director for Shop Operations and member of the Management Group 3rd June 2009. Ville Linna left the Management Group 30th September 2009 in conjunction with the sale of the gift merchandising operations. The ending of the employment for Jaakko Syrjänen, Director for International Operations was agreed 29th January 2010. CORPORATE GOVERNANCE Tiimari Plc complies with the Corporate Governance Code for Finnish listed companies coming into force 1st January 2009 published by the Securities Market Association. According to the Corporate Governance Code recommendation 51, a separate Corporate Governance Statement was released 5th March 2010. The Statement is available on the Group web site www.tiimari.com. Tiimari also complies with the updated guidelines for insiders published by Nasdaq OMX Helsinki Plc 9th October 2009 and the Company's own insider guidelines. BUSINESS RELATED RISKS AND UNCERTAINTIES The Group revenue and result development is affected by several uncertainties related to the business operations. The main risks relate to the following factors: - the development of the general consumer demand and its deterioration especially in Finland and Sweden - the management's success in operational development and profitability improvement in initiated activities: renewal of product offering and eradication of non-profitable operations - the periodisation of accumulation of the seasonal operative cash flow and its impact on the financial position, loan covenants as well as the predictability of both cash flow and result - the development of foreign exchange rates for goods purchases outside the euro currency area and the gross margin received from these goods - the choice of business premises in the long-term - the availability of seasonal products and the functionality of the supply chain - the general development of salaries, rents and transport expenses - the valuation of goodwill and Tiimari and Gallerix brands general changes in interest rate levels The Company is a defendant and a plaintiff in some ongoing property and rental agreement related disputes as well as in one other contract termination related dispute. The financial statements do not include any significant reservations for these because according to the management's assessment the Company does not have any compensation liabilities. The claims presented by the Company have neither been recognized in the financial statements. ENVIRONMENT The Tiimari Group does not have any manufacturing operations hence the operations are not subject to any significant environmental risks or impacts. The environmental impact of the supply chain is minimised by optimising delivery rates from external suppliers as well as to own shops. The cost related to managing and minimising environmental risks are related to standard business operations and are therefore not monitored separately. SHARES Tiimari's share capital at the end of the review period was EUR 7.686.200. The amount of shares and votes assigned to the former was 16.474.755. Further information on shares and share ownership has been reported in the notes of the parent company financial statements. The Board exercised their share emission empowerment 20th April 2009 and emitted a directed share emission to Finnish institutional and professional investors. The biggest subscribers were Atine Group Ltd. and Keskinäinen Työeläkevakuutusyhtiö Varma. 5.175.535 shares were subscribed in the emission and their exercise price was EUR 1.25 per share. The full subscription proceeds was EUR 6.1 million and was paid 29th April and it was booked in the distributable equity fund. The new shares were listed 25th May 2009. The Extraordinary General Meeting authorised the Board 19th October 2009 to decide on a maximum of 4.000.000 share emission and/or releasing special rights entitling to shares in accordance with Chapter 10 §1 of the Finnish Companies Act in one or several instalments. The authorisation is valid until 30th April 2013. The Board has not utilised its authorisation. CONVERTIBLE CAPITAL LOAN In accordance with the decision taken by the Extraordinary General Meeting 19th October 2009 the Company released a convertible capital loan. The loan amount was EUR 4.980.000. The loan was divided into EUR 60.000 loan obligations, its emission rate is 100 %, interest rate 8 % per annum and the loan is exchangeable at an approximate exchange rate of EUR 1.4746. The Company share amount could as a result of the conversion of the loan obligations increase by a maximum of 3.377.713 new shares. Conversion rate is the weighted average price of the share in trading Nasdaq OMX Helsinki Plc during 22nd September - 7th October 2009 increased by 5 percent. The year-end accumulated interest of the loan will be paid from the distributable funds of Tiimari Plc after the confirmation of the financial statements on 31st March 2010. No part of the loan has been converted into share during the financial year. OPTION ARRANGEMENTS The Board exercised its share emission authorisation, given by the Annual General Meeting, on 24th April 2009 by emitting option rights. A total of 480.000 option rights were emitted to the new board members chosen at the Annual General Meeting and the newly appointed Managing Director to commit and as incentives. The option rights are divided into five series and their exercise period is split between 1st June 2009 and 30th April 2014. The exercise prices are series specific and range from EUR 1.35 to 1.84. No options have been exercised during the financial year. OWN SHARES The Company annulled the 11.850 own shares 29th April 2009 that it possessed. The Company does not hold any own shares at the end of the financial year. The Board does not have authorisation to purchase or sell own shares. SHARE PRICES Tiimari's share is listed at Nasdaq OMX Helsinki Ltd. small cap list. Tiimari's share price at the end of the financial year was EUR 1.29 (31st December 2008 it was EUR 1.41). The market value was EUR 21.5 million (31st December 2008 it was 15.9). The number of shareholders at the end of the financial year was 2.818 (2.560). Other information related to shares, shareholders and share ownership can be found in the notes to the parent company financial statements. CHANGES IN OWNERSHIP During the financial year the Company was informed of the following changes in the share ownership of shareholders: - Primate Ltd. voting power and share ownership exceeded the flag limit of 1/20 on 27th April 2009 when the final allocation of the subscriptions of the share emission was decided 24th April 2009 - Virala Ltd. indirect voting power and share ownership exceeded the flag limit of 1/5 on 27th April 2009 when the final allocation of the subscriptions of the share emission was decided 24th April 2009. The shares are owned by Atine Group Ltd. and Vimpu Intressenter Ab, subsidiaries of Virala Group - Virala Ltd. indirect voting power and share ownership fell below the flag limit of 1/5 on 23rd June 2009 - Virala Ltd. direct ownership exceeds 1/20 and indirect ownership exceeds 1/4 flag limit on 22nd October 2009. The limits are exceeded should the Virala Group exercise its right to convert the subscribed and to Virala allocated convertible capital in full. The conversion of the loan into shares is subject to the decision of the loan subscriber. ANNUAL GENERAL MEETING 7TH APRIL 2009 The Annual General Meeting of Tiimari Plc approved the financial statements for 2008 and discharged the Board and the Managing Director from liability. The Meeting decided that the loss for the period -1.585.287,88 is booked into retained earnings and that no dividend is paid. The Board was decided to include six members. Peter Seligson, Arja Hautanen, Sven-Olof Kulldorff, Juha Mikkonen, Alexander Rosenlew and Hannu Ryöppönen were elected as board members. The term of office will end at the end of the 2010 Annual General Meeting. KPMG Ltd was elected as Group Auditor, who named Sixten Nyman, APA, as auditor with main responsibility. The Annual General Meeting authorised the Board to decide on the emission and/or releasing special rights entitling to shares in accordance with Chapter 10, §1 of the Finnish Companies Act (including option rights) for a maximum of 5.655.535 shares in one or several instalments. The Board can decide on emitting new shares or potential own shares held by the Company. The maximum amount of the authorisation is equal to 50 % of all the company shares at the date of the notice to summon the Annual General Meeting. The authorisation could be exercised to potential business acquisitions or financing and execution of other arrangements, strengthening the balance sheet and financial position, execution of commitment and incentive programs for new board members, management and other personnel or other purposes decided by the Board. Within the bounds of commitment and incentive programs a maximum of 500.000 option rights could be granted to new board members and the new Managing Director. The authorisation revoked previous share emission authorisations and the authorisation will end by the next Annual General Meeting or by 30th June 2010 at the latest. The Board exercised its right during the financial year by emitting shares and granting share options. EXTRAORDINARY GENERAL MEETING 19TH OCTOBER 2009 The Extraordinary General Meeting decided on releasing a directed convertible capital loan for a maximum of 4.980.000 to a maximum of one hundred professional or institutional investors. The General Meeting authorised the Board to decide on a maximum 4.000.000 share emission and/or releasing special rights entitling to shares in accordance with Chapter 10, §1 of the Finnish Companies Act. The authorisation is valid until 30th April 2013. The Extraordinary General Meeting decided to increase the amount of board members to seven and elect Markku Pelkonen as a new member. BOARD AND BOARD COMMITTEES In the organising meeting held after the Annual General Meeting 7th April 2009 the Board elected Peter Seligson as its chairman and Hannu Ryöppönen as vice chairman. Peter Seligson was elected chairman of the nomination and compensation committee and Alexander Rosenlew and Arja Hautanen were elected members of this committee. Hannu Ryöppönen was elected chairman of the audit committee and Juha Mikkonen and Peter Seligson were elected members. In the organising meeting held after the Extraordinary General Meeting 19th October 2009 the Board elected Hannu Ryöppönen as its chairman and Peter Seligson as vice chairman. Hannu Ryöppönen was elected chairman of the nomination and compensation committee and Peter Seligson and Alexander Rosenlew were elected members of this committee. Juha Mikkonen was elected chairman of the audit committee and Hannu Ryöppönen and Peter Seligson were elected members. In the Extraordinary General Meeting 19th October 2009 Markku Pelkonen was elected as new member of the Board. Arja Hautanen resigned from the Board 2nd November 2009. EVENTS AFTER REVIEW PERIOD Cooperation negotiations were initiated in Finland for Tiimari Retail Ltd. and Gallerix Finland Ltd. on 20th January 2010. The negotiations concerned 25 positions as well as reducing the working hours in shops in Tiimari Retail by 7-8 %. The Company decide to cease its non-profitable operations in Poland, close or integrate Tiimari shops in Sweden with Gallerix operations and close individual Gallerix shops in Finland. ANNUAL GENERAL MEETING 2010 The Annual Generla Meeting for Tiimari Plc will be held on 30th March 2010 at 13.00 in Scandic Hotel Marski, Mannerheimintie 10, Helsinki. BOARD'S PROPOSITION TO THE GENERAL MEETING At the end of the financial year the parent company distributable shareholder's equity was EUR 15.479.392,30 (21.576.449,93). The Board proposes to the Annual General Meeting that the loss for the period 2009 12.564.191,24 is left as retained earnings and that no dividend is paid. BACKGROUND FOR OUTLOOK The Company has decided to focus on developing its profitable core business. The Company withdrew from the non-profitable markets in Russia and Norway during 2009 and at the end of the financial year decisions were taken to stop non-profitable operations in Poland, Gallerix in Finland and Tiimari in Sweden. The revenue for these markets in 2009 was EUR 4.0 million and operating profit EUR -4.1 million including the related non-recurring items of EUR 2 million. The product offering was honed during the financial year. During the autumn the product offering was expanded with new product categories and branded goods. The new party concept product offering will be introduced starting spring 2010. Forecasting the development of consumer demand is challenging. The general economic climate is not expected to revive quickly, but the consumer demand is expected to revive somewhat during the end of the coming financial year in the Swedish and Finnish markets. No growth in demand is expected in the Baltic markets during the forecasted period. The most important targets for 2010 are improving profitability, increasing operative cash flow and reducing the level of interest bearing net debt. The key measures in achieving the aforementioned targets are focusing on profitable core business operations by ending non-profitable operations, sharpening the attractiveness of the product offering of the Tiimari and Gallerix concepts, increasing inventory turnover and streamlining the cost structure of the shop network. The reduction of inventory product titles executed in 2009 serves as a good foundation in renewing the product offerings in the shops. OUTLOOK The Board estimates that by focusing on the profitable core business and by developing its product offering, the Company has potential for improvements in operational profitability (EBITDA excluding non-recurring items) and a clearly positive operative cash flow (operative cash flow before financing items and taxes) in 2010. Board of Directors Tiimari Plc BASIS OF PREPARATION This financial statement release has been prepared in accordance with IFRS accounting standards, following the same accounting policies and methods of computation as in the previous financial statements as well as applicable IFRS standards and interpretations introduced 1st January 2009. In the preparation all IAS 34 standard requirements have not been fulfilled. All figures in the accounts have been rounded and consequently the sum of individual figures may deviate from the presented total figure. The figures in the tables are presented in thousands of euro. The Group reported the gross margin and gross margin percentage from the beginning of 2009. Gross margin is a net sum, which arises when purchases for the period are deducted from the revenue and adjusted by the change in inventory. The purchases include the purchasing prices of products including freights and haulage, distribution cost to shops, rent expenses charged from the franchisees (charges are included in revenue), adjustment items related to purchases and change in inventory. Gross margin percentage is gross margin divided by revenue. The segment division for the Group has been changed starting 1st January 2009. The comparison numbers for 2008 have been adjusted to reflect the new reporting structure. Tiimari introduced the application of IFRS 8 (Operating segments) starting 1st January 2008. The Group has introduced the following new or updated IFRS standards and interpretations 1st January 2009: - Revised IAS 1 Presentation of Financial Statements - Amendments to IFRS 7 Financial Instruments: Disclosures - Improving Disclosures About Financial Instruments - IFRIC 13 Customer Loyalty Programmes - Improvements to IFRS (Annual Improvements) - IAS 23 (revised) Borrowing costs The renewed standards and interpretations did not have a significant impact on the reported result or financial position. Introduction of new IFRS standards and interpretations 1st January 2010: The below standards have been published, but the Group has not applied them before they come into effect. Tiimari applies them, when they come into effect or if they come into effect after the first day of the financial year, they will be applied from the beginning of the next financial year. - Revised IFRS 3 Business Combinations - Amended IAS 27 Consolidated and Separate Financial Statements - IFRS 9 Financial Instruments - Several other IFRS changes and interpretations are coming in 2010. The changes will not however have an impact on these financial statements. Use of estimates: The preparation of financial statements in accordance with IFRS requires the management to use estimates and assumptions that affect reported amounts of assets and liabilities on the balance sheet, disclosure of contingent assets and liabilities and the amount of income and expenses. Although the estimates are based on the management's best knowledge of current events and actions, actual results may ultimately differ from the estimates used. -------------------------------------------------------------------------------- | CONSOLIDATED INCOME STATEMENT | | | | | -------------------------------------------------------------------------------- | eur 1 000 | 10-12/09| 10-12/08| 1-12/09 | 1-12/08 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SALES | 31 879 | 33 417 | 80 113 | 84 550 | -------------------------------------------------------------------------------- | Cost of goods sold | -15 420 | -12 654 | -34 601 | -34 037 | -------------------------------------------------------------------------------- | Gross profit | 16 459 | 20 763 | 45 512 | 50 513 | -------------------------------------------------------------------------------- | Gross profit, % | 52 % | 62 % | 57 % | 60 % | -------------------------------------------------------------------------------- | Other operating income | 959 | 127 | 1 824 | 539 | -------------------------------------------------------------------------------- | Employee | | | | | -------------------------------------------------------------------------------- | benefit costs | -6 075 | -5 849 | -21 765 | -19 154 | -------------------------------------------------------------------------------- | Depreciation | -988 | -1 127 | -3 507 | -3 515 | -------------------------------------------------------------------------------- | Goodwill impairment | -1 496 | -5 000 | -1 496 | -5 000 | -------------------------------------------------------------------------------- | Other operating expenses | -7 556 | -9 240 | -28 084 | -29 176 | -------------------------------------------------------------------------------- | OPERATING PROFIT | 1 303 | -325 | -7 516 | -5 793 | -------------------------------------------------------------------------------- | Operating profit, % | 4 % | -1 % | -9 % | -7 % | -------------------------------------------------------------------------------- | Financial income | 1 | 91 | 47 | 154 | -------------------------------------------------------------------------------- | Financial expenses | -669 | -1 715 | -3 181 | -4 262 | -------------------------------------------------------------------------------- | Net financial income | -668 | -1 623 | -3 134 | -4 108 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INCOME BEFORE TAXES | 635 | -1 949 | -10 650 | -9 901 | -------------------------------------------------------------------------------- | Taxes | 391 | 41 | 535 | 77 | -------------------------------------------------------------------------------- | NET INCOME FOR THE PERIOD, | 1 025 | -1 908 | -10 116 | -9 824 | | continuing operations | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net income for the period from | -87 | -234 | -674 | -104 | | discontinuing operations | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET INCOME FOR THE PERIOD | 937 | -2 142 | -10 790 | -9 929 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity holders of the company | 937 | -2 143 | -10 790 | -9 929 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share | | | | | -------------------------------------------------------------------------------- | for profit attributable | | | | | -------------------------------------------------------------------------------- | to the equity holders of the Company | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Basic earnings per share, EUR | | | | | -------------------------------------------------------------------------------- | Continuing operations | 0,06 | -0,17 | -0,69 | -0,93 | -------------------------------------------------------------------------------- | Discontinued operations | -0,01 | -0,02 | -0,05 | -0,01 | -------------------------------------------------------------------------------- | Total | 0,05 | -0,19 | -0,73 | -0,94 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET INCOME FOR THE PERIOD | 937 | -2 143 | -10 790 | -9 929 | -------------------------------------------------------------------------------- | Translation diffrences | 301 | | 282 | -726 | -------------------------------------------------------------------------------- | Other | 0 | -8 | 0 | -21 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Comprehensive income for the | 1 238 | -2 928 | -10 508 | -10 676 | | period net of tax | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Comprehensive income for the period attributable to: | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity holders of the company | 1 238 | -2 928 | -10 508 | -10 676 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF FINANCIAL | | | | POSITION | | | -------------------------------------------------------------------------------- | eur 1 000 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 31.12.09 | 31.12.08 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Goodwill | 32 525 | 33 287 | | -------------------------------------------------------------------------------- | Other intangible assets | 16 876 | 18 950 | | -------------------------------------------------------------------------------- | Tangible assets | 4 904 | 5 616 | | -------------------------------------------------------------------------------- | Other financial assets | 104 | 105 | | -------------------------------------------------------------------------------- | Receivables | 35 | 114 | | -------------------------------------------------------------------------------- | Deferred tax assets | 29 | 1 | | -------------------------------------------------------------------------------- | Total non-current assets | 54 473 | 58 073 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Inventories | 15 044 | 23 409 | | -------------------------------------------------------------------------------- | Trade and other receivables | 3 454 | 4 255 | | -------------------------------------------------------------------------------- | Cash and bank | 3 024 | 2 188 | | -------------------------------------------------------------------------------- | Total current assets | 21 523 | 29 852 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL ASSETS | 75 995 | 87 925 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND | | | | | LIABILITIES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity attributable to parent company shareholders | | -------------------------------------------------------------------------------- | Share capital | 7 686 | 7 686 | | -------------------------------------------------------------------------------- | Own shares | 0 | -55 | | -------------------------------------------------------------------------------- | Distributable equity fund | 23 010 | 16 921 | | -------------------------------------------------------------------------------- | Translation differences | -663 | -945 | | -------------------------------------------------------------------------------- | Retained earnings | -3 667 | 6 836 | | -------------------------------------------------------------------------------- | TOTAL SHAREHOLDERS' EQUITY | 26 366 | 30 444 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 5 834 | 6 330 | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 22 203 | 12 297 | | -------------------------------------------------------------------------------- | Provisions | 32 | 31 | | -------------------------------------------------------------------------------- | Total non-current liabilities | 28 068 | 18 658 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest bearing liabilities | 3 398 | 21 864 | | -------------------------------------------------------------------------------- | Account payable and other | 18 163 | 16 960 | | | payable | | | | -------------------------------------------------------------------------------- | Total current liabilities | 21 561 | 38 824 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL LIABILITIES | 49 629 | 57 482 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL SHAREHOLDERS' EQUITY AND | 75 995 | 87 926 | | | LIABILITIES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- |Consolidated Statement of Cash Flows | | | |eur 1000 | | | | -------------------------------------------------------------------------------- | | | 1-12/2009 | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from operations | | | -------------------------------------------------------------------------------- | Profit/loss for financial period | -10 790 | -9 929 | -------------------------------------------------------------------------------- | Adjustments: | | | -------------------------------------------------------------------------------- | | Depreciation and impairment | 5003 | 8622 | -------------------------------------------------------------------------------- | | Gain (+) and loss (-) on sale of fixed | -542 | -690 | | | assets | | | -------------------------------------------------------------------------------- | | Financial income and expenses | 3135 | 4116 | -------------------------------------------------------------------------------- | | Taxes | -544 | -80 | -------------------------------------------------------------------------------- | | Other adjustments | 41 | 173 | -------------------------------------------------------------------------------- | Change in working capital: | | | -------------------------------------------------------------------------------- | | Change in inventories | 8 476 | 2 799 | -------------------------------------------------------------------------------- | | Change in short-term receivables | 772 | 2 732 | -------------------------------------------------------------------------------- | | Change in short term liabilities | 1 002 | -2 026 | -------------------------------------------------------------------------------- | Interest paid | -2191 | -3104 | -------------------------------------------------------------------------------- | Interest income received | 22 | 58 | -------------------------------------------------------------------------------- | Other financing expenses paid | -706 | -347 | -------------------------------------------------------------------------------- | Taxes | | 85 | -387 | | paid | | | | -------------------------------------------------------------------------------- | Net cash flow from operations | 3 764 | 1 937 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from investment activities | | | -------------------------------------------------------------------------------- | | Acquisition of subsidiary companies | | -------------------------------------------------------------------------------- | | net cash of acquired | 0 | -736 | -------------------------------------------------------------------------------- | | Investments in | | | -------------------------------------------------------------------------------- | | tangible and intangible assets | -1251 | -4505 | -------------------------------------------------------------------------------- | | Capital gains from tangible and | 520 | 985 | | | intangible assets | | | -------------------------------------------------------------------------------- | | Repayment of loan receivables | -52 | 65 | -------------------------------------------------------------------------------- | | Income on sale of investments | 1 | 0 | -------------------------------------------------------------------------------- | Net cash flow from investments | -782 | -4191 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from financing activities | | | -------------------------------------------------------------------------------- | | Proceeds from share issue | 6089 | 3100 | -------------------------------------------------------------------------------- | | Long-term loans, increase | 8480 | 0 | -------------------------------------------------------------------------------- | | Long-term loans, decrease | -1000 | -2000 | -------------------------------------------------------------------------------- | | Short-term loans, net change | -15 342 | 2 722 | -------------------------------------------------------------------------------- | | Financial lease loans, decrease | -421 | -397 | -------------------------------------------------------------------------------- | | Dividends paid | 0 | -1648 | -------------------------------------------------------------------------------- | Net cash flow from financing | -2 193 | 1 777 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in liquid assets | 789 | -477 | -------------------------------------------------------------------------------- | | Liquid assets, beginning of review | 2 188 | 2 852 | | | perios | | | -------------------------------------------------------------------------------- | | Effect of exchange rate changes on | 48 | -187 | | | liquid assets | | | -------------------------------------------------------------------------------- | | Liquid assets, end of review period | 3 024 | 2 188 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN | | | | | | EQUITY | | | | | -------------------------------------------------------------------------------- | eur 1 000 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to the equity holders of the company | -------------------------------------------------------------------------------- | | Share | Distribu | Own | Translat | Retain | Total | | | capital | table | share | ion | ed | | | | | equity | s | differen | earnin | | | | | fund | | ces | gs | | -------------------------------------------------------------------------------- | Shareholders' | 7 686 | 13 821 | -55 | -219 | 18 434 | 39 667 | | equity 1.1.2008 | | | | | | | -------------------------------------------------------------------------------- | Comprehensive | | | | | | | | income | | | | | | | -------------------------------------------------------------------------------- | for the period | | | | -726 | -9 929 |-10 655 | | | | | | | | | -------------------------------------------------------------------------------- | Dividends paid | | | | | -1 648 | -1 648 | -------------------------------------------------------------------------------- | Share issue | | 3 100 | | | | 3 100 | -------------------------------------------------------------------------------- | Other items | | | | | -21 | -21 | -------------------------------------------------------------------------------- | Equity on | 7 686 | 16 921 | -55 | -945 | 6 836 | 30 443 | | 31.12.2008 | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | -------------------------------------------------------------------------------- | Shareholders' | 7 686 | 16 921 | -55 | -945 | 6 836 | 30 443 | | equity 1.1.2009 | | | | | | | -------------------------------------------------------------------------------- | Comprehensive | | | | | | | | income | | | | | | | -------------------------------------------------------------------------------- | for the period | | | | 282 |-10 790 |-10 508 | | | | | | | | | -------------------------------------------------------------------------------- | Anullment of own | | | 55 | | -55| 0 | | shares | | | | | | | -------------------------------------------------------------------------------- | Share based | | | | | 41 | 41 | | benefits | | | | | | | -------------------------------------------------------------------------------- | Share issue | | 6 089 | | | | 6 089 | -------------------------------------------------------------------------------- | Conveertible loan, equity | | | | | 292 | | share | | | | | | -------------------------------------------------------------------------------- | Other items | | | | | 9 | 9 | -------------------------------------------------------------------------------- | Equity on 31.12.2009 | 7 686 | 23 010 | 0 | -663 | -3 667 | 26 366 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SEGMENT INFORMATION | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | eur 1 000 | 2009 | 2008 | 2009 | -------------------------------------------------------------------------------- | | 10-12 | 10-12 | 1-12 | -------------------------------------------------------------------------------- | Tiimari | 27 958 | 28 921 | 66 903 | -------------------------------------------------------------------------------- | Gallerix | 3 970 | 4 671 | 13 396 | -------------------------------------------------------------------------------- | Tiimore | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Other operations | 0 | -1 800 | 400 | -------------------------------------------------------------------------------- | Eliminations | -50 | 1 625 | -586 | -------------------------------------------------------------------------------- | Group | 31 878 | 33 417 | 80 113 | -------------------------------------------------------------------------------- | | | 0 | | -------------------------------------------------------------------------------- | OPERATING PROFIT | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | eur 1 000 | 2009 | 2008 | 2009 | -------------------------------------------------------------------------------- | | 10-12 | 10-12 | 1-12 | -------------------------------------------------------------------------------- | Tiimari | 910 | 994 | -4 945 | -------------------------------------------------------------------------------- | Gallerix | 458 | 188 | -755 | -------------------------------------------------------------------------------- | Tiimore | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Other operations | -65 | -1 508 | -1 816 | -------------------------------------------------------------------------------- | Group | 1 303 | -327 | -7 516 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | DEPRECIATION AND GOODWILL IMPAIRMENT | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | eur 1 000 | 2009 | 2008 | 2009 | -------------------------------------------------------------------------------- | | 10-12 | 10-12 | 1-12 | -------------------------------------------------------------------------------- | Tiimari | 2 266 | 5 876 | 4 111 | -------------------------------------------------------------------------------- | Gallerix | 196 | 216 | 807 | -------------------------------------------------------------------------------- | Tiimore | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Other operations | 22 | 35 | 85 | -------------------------------------------------------------------------------- | Group | 2 484 | 6 127 | 5 003 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CAPITAL EXPENDITURE | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | eur 1 000 | 2009 | 2008 | 2009 | -------------------------------------------------------------------------------- | | 10-12 | 10-12 | 1-12 | -------------------------------------------------------------------------------- | Tiimari | 355 | 3 161 | 1 076 | -------------------------------------------------------------------------------- | Gallerix | -45 | 386 | 161 | -------------------------------------------------------------------------------- | Tiimore | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Other operations | 0 | 42 | 14 | -------------------------------------------------------------------------------- | Group | 310 | 3 589 | 1 251 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES BY GEOGRAPHICAL AREA | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | eur 1 000 | 2009 | 2008 | 2009 | -------------------------------------------------------------------------------- | | 10-12 | 10-12 | 1-12 | -------------------------------------------------------------------------------- | Finland | 25 917 | 25 483 | 60 767 | -------------------------------------------------------------------------------- | Sweden | 4 400 | 5 381 | 14 578 | -------------------------------------------------------------------------------- | ROW | 1 561 | 2 554 | 4 768 | -------------------------------------------------------------------------------- | Group | 31 878 | 33 417 | 80 113 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EXPORT FROM FINLAND | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | 2009 | 2008 | -------------------------------------------------------------------------------- | | | 1-12 | 1-12 | -------------------------------------------------------------------------------- | Export | | 1 683 | 2 185 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INTANGIBLE ASSETS | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | eur 1 000 | | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | Book value at 1 January | | 52 237 | 57 145 | -------------------------------------------------------------------------------- | Changes in exchange rates | | 310 | -294 | -------------------------------------------------------------------------------- | Additions | | 504 | 2 000 | -------------------------------------------------------------------------------- | Depreciation and impairment | | -3 550 | -6 598 | -------------------------------------------------------------------------------- | Disposals and intra-balance | | -100 | -16 | | sheet transfer | | | | -------------------------------------------------------------------------------- | Book value at the end of | | 49 401 | 52 237 | | period | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TANGIBLE ASSETS | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | eur 1 000 | | 31.12.2009 | 30.9.2008 | -------------------------------------------------------------------------------- | Book value at 1 January | | 5 616 | 4 650 | -------------------------------------------------------------------------------- | Changes in exchange rates | | 14 | -56 | -------------------------------------------------------------------------------- | Additions | | 765 | 3 677 | -------------------------------------------------------------------------------- | Depreciation and impairment | | -1 480 | -2 024 | -------------------------------------------------------------------------------- | Disposals and intra-balance | | -12 | -631 | | sheet transfer | | | | -------------------------------------------------------------------------------- | Book value at the end of | | 4 904 | 5 616 | | period | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FINANCIAL FIGURES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 2009 | 2008 | 2009 | -------------------------------------------------------------------------------- | | 10-12 | 10-12 | 1-12 | -------------------------------------------------------------------------------- | Net sales | 31 879 | 33 417 | 80 113 | -------------------------------------------------------------------------------- | EBITDA | 3 787 | 5 802 | -2 513 | -------------------------------------------------------------------------------- | Operating profit | 1 303 | -325 | -7 516 | -------------------------------------------------------------------------------- | Profit/loss for the financial | 1 025 | -1 908 | -10 116 | | period | | | | -------------------------------------------------------------------------------- | Profit/loss, discontinued | -87 | -234 | -674 | | operations | | | | -------------------------------------------------------------------------------- | Earnings per share continuing | 0,06 | -0,17 | -0,69 | | operations, EUR | | | | -------------------------------------------------------------------------------- | Earnings per share | -0,01 | -0,02 | -0,05 | | discontinued operations, EUR | | | | -------------------------------------------------------------------------------- | Earnings per share total, EUR | 0,05 | -0,19 | -0,73 | -------------------------------------------------------------------------------- | Shareholders' equity per | | | 1,60 | | share, EUR | | | | -------------------------------------------------------------------------------- | Solvency ratio | | | 34,7 % | -------------------------------------------------------------------------------- | Gearing | | | 85,6 % | -------------------------------------------------------------------------------- | Net working capital | | | 335 | -------------------------------------------------------------------------------- | Operating cash flow | | | 6 486 | -------------------------------------------------------------------------------- | Net Interest-bearing | | | 22 577 | | liabilities | | | | -------------------------------------------------------------------------------- | Balance sheet total | | | 75 995 | -------------------------------------------------------------------------------- | Average number of shares | 16 475 | 11 299 | 14 749 | | (pcs) | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONTINGENT LIABILITIES | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | Loans from financial institutions | | | -------------------------------------------------------------------------------- | against the following securities | 8 333 | 14 724 | -------------------------------------------------------------------------------- | Real estate mortgages | 0 | 1 062 | -------------------------------------------------------------------------------- | Corporate mortgages | 31 137 | 31 137 | -------------------------------------------------------------------------------- | Pledged shares | 1 476 | 1 476 | -------------------------------------------------------------------------------- | Other own liabilities | | | -------------------------------------------------------------------------------- | Bank quarantees | 2 821 | 1 914 | -------------------------------------------------------------------------------- | Othet liabilities | 5 | 405 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Leasing liabilities | | | -------------------------------------------------------------------------------- | Due within one year | 133 | 90 | -------------------------------------------------------------------------------- | Due after one year | 115 | 131 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | OTHER RENT LIABILITIES | | | -------------------------------------------------------------------------------- | Due within one year | 12 147 | 9 858 | -------------------------------------------------------------------------------- | Due after one year | 13 687 | 14 380 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | RELATED PARTY TRANSACTIONS (EUR 1 000) | 2009 | 2008 | -------------------------------------------------------------------------------- | | 1-12 | 1-12 | -------------------------------------------------------------------------------- | CEO salaries and benefits *) | 444 | 225 | -------------------------------------------------------------------------------- | Board of directors fees and benefits | 112 | 117 | -------------------------------------------------------------------------------- CEO salaries include benefits paid to both Hannu Krook (7th April 2009 onwards) and Kristiina Illi during 2009. Kristiina Illi was the Managing Director until 7th April; total benefits were EUR 218 thousand during 2009. The Managing Director and new members of the Board of Directors Ryöppönen and Kulldorff have received option rights in the Company. The Board members and the Managing Director subscribed shares in the directed emission in April, personally or via the companies where they exercise control. The major shareholder of the Company, Atine Group Ltd subscribed shares in the share emission and subscribed to the convertible capital loan. -------------------------------------------------------------------------------- | MAJOR SHAREHOLDERS | Shares | Shares % | -------------------------------------------------------------------------------- | Major shareholders 31.12.2009 | | | -------------------------------------------------------------------------------- | Atine Group Oy | 3 292 198 | 19,98 | -------------------------------------------------------------------------------- | Assetman Oy | 1 740 645 | 10,57 | -------------------------------------------------------------------------------- | Varma Mutual Pension Insurance Company | 828 912 | 5,03 | -------------------------------------------------------------------------------- | Primate Oy | 825 000 | 5,01 | -------------------------------------------------------------------------------- | Ilmarinen Mutual Pension Insurance Company | 789 221 | 4,79 | -------------------------------------------------------------------------------- | Baltiska Handels A.B. | 716 483 | 4,35 | -------------------------------------------------------------------------------- | Aktia Capital Fund | 600 000 | 3,64 | -------------------------------------------------------------------------------- | Cumasa Oy | 407 625 | 2,47 | -------------------------------------------------------------------------------- | Arvo Finland Value Fund | 300 000 | 1,82 | -------------------------------------------------------------------------------- | Nordea Pankki Suomi Oyj (Administrative reg.) | 295 129 | 1,79 | --------------------------------------------------------------------------------
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