LHV Institutional Baltic Insight, October 14th, 2020
* Tallinna Kaubamaja Group (‘TKM’ or the ‘Group’) results for Q3 2020 came in broadly in line with our expectations in terms of total revenues, as better than anticipated car sales were offset by somewhat lower than expected revenues from other main operating segments. The Group managed to generate a bit larger EBITDA than predicted, but increasing depreciation charges and interest expenses led to net profits in line with our estimates.* TKM posted solid revenue growth, primarily driven by the acquisition of ABC Supermarkets (‘ABCS’) by TKM’s subsidiary Selver AS at the end of May 2020. ABCS managed a retail chain of 19 stores in Estonia and was consolidated under the supermarkets segment from 1st June 2020. The sales recovery of the car trade segment has been surprisingly fast in the latest quarter, while the performance of the department stores segment remained relatively sluggish, partly due to the substantial decline in tourist flows and lower foot-traffic in the city centres of Tallinn and Tartu during summer months.
* All-in-all, TKM’s total net sales advanced 8.1% y-o-y to EUR 194.2m in Q3 2020, comfortably falling into our estimated range of EUR 190-195m. Please also refer to the tables in the attachment.
Tallinna Kaubamaja is engaged in footwear trade, car trade and retail trade in supermarkets and real estate development in Latvia; and in car trade in Lithuania. Supermarkets focus on the sale of foodstuffs and convenience goods, the department stores on the sale of beauty and fashion products, the car trade on the sale of cars and spare parts to cars. In the car trade segment, cars are sold at wholesale prices to authorised car dealers. In the footwear trade segment, footwear is sold at wholesale prices to family markets. The real estate segment deals with the management and maintenance of real estate owned by Co., and with the rental of commercial premises.
LHV Bank is an independent pan-Baltic bank, based on Estonian capital. The company was founded in 1999 by two founders of Hansapank (today’s Swedbank in the Baltics) and has been offering a full range of investment services for 15 years. In May 2009, LHV received a credit institution licence allowing it to provide all banking services.
The head office is situated in Tallinn, Estonia. Cross-border services are offered in Vilnius, Lithuania and in Riga, Latvia. LHV provides brokerage (institutional and retail), asset management, banking and capital markets services. Compared to other banks, we are more innovative and have more solid experience in investment and entrepreneurship.
The Bank, together with the Group asset management company employs over 320 people. LHV Group shares are listed on Nasdaq Tallinn.
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