ANNUAL REPORT
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Our staff welcomed the challenge of internationalisation and has shown genuine enthusiasm towards building something new.
BROMAN GROUP REVIEW BY THE CHAIRMAN OF THE BOARD OF DIRECTORS | p. 4 MOTONET MANAGING DIRECTOR’S REVIEW | p. 7 VARAOSAMAAILMA MANAGING DIRECTOR’S REVIEW | p. 8 BG VARASTO MANAGING DIRECTOR’S REVIEW | p. 9 INTERNATIONALISATION THE GROUP STARTED OPERATIONS IN ESTONIA | p. 10 FINANCIAL STATEMENTS BUSINESS INDICATORS – The Group 2015–2016 | p. 14 PROFIT AND LOSS ACCOUNT – The Group 2015–2016 | p. 15 BALANCE SHEET – The Group 2015–2016 | p. 16 BROMAN GROUP THE BOARD OF DIRECTORS | p. 18 GROUP ORGANISATION CHART AND OUTLETS | p. 19
EERO BROMAN BROMAN GROUP Review by the Chairman of the Board of Directors
Strong investment for the future and a good result Over the past year, we made the largest investments in the history of our company. We built new business premises and expanded our operations at a high speed. We invested a good 60 million euros in total in the investments and the inventories in the new business premises.
Over the period under review, we opened the first Motonet outlet in Tallinn, Estonia.
Our staff increased by 192 people. The result of the past financial period remained somewhat lower than last year, but it was still at a good level. Our turnover grew by 16.0 % to 304.0 million euros. Our operating profit remained at the same level as last year, being 36.0 million euros, and our equity ratio was 70.8 %. We expanded abroad and will tighten up cooperation Over the period under review, we opened the first Motonet outlet in Tallinn, Estonia. To accomplish the project, many Motonet staff members had to learn new skills and work hard to open the new shop. I believe that the experience we gained will help us in many ways in the future. We increased cooperation between AD VaraosaMaailma and Motonet, and the combined outlet concept, in particular, proved to be viable. Over the upcoming period, the cooperation will be even tighter, and the best qualities of both business chains will be strengthened. We would also like to tighten up cooperation with the Motonet repair shops run by private entrepreneurs operating in connection with Motonet shops. During the period under review, four new Motonet repair shops were opened. Over the upcoming period, the number of repair shops will continue to increase.
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I am proud of each positive customer feedback that I receive in various connections.
New Managing Director to head the business chains A significant change took place in the management of business operations of the Broman Group as of 1 October 2016, when Antti Tiitola started as the manager of Motonet, Varaosamaailma and BG Varasto. I am happy about our decision and I am sure that we will achieve a great deal together in the future. Antti is a true business professional, and he is off to a good start in his work. I wish Antti success in his new job. I will continue to work for the good of the company as a full-time Chairman of the Board of Directors of the Group, so we will see each other regularly in the future, as well. Changes also took place in the Group’s Board of Directors in early 2016. Sanna Suvanto-Harsaae and Peter Ahlström started as new members. The meetings of the Board of Directors have been inspiring, and we have achieved plenty of good decisions. I am proud of each positive customer feedback that I receive in various connections. A warm thank you to our staff for their excellent work contribution. I would also like to extend my thanks to our partners for their excellent cooperation over the past year. Let’s continue the good work for the benefit of our customers.
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EERO BROMAN BROMAN GROUP the Chairman of the Board of Directors
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A year of strong growth for Motonet
MOTONET OY Managing Director’s Review
We expanded our operations heavily during the past year. We opened five entirely new outlets in Finland and one in Tallinn, Estonia. In addition, we moved to new premises in Joensuu and Lahti. We have continued to develop both our product range and services. We want to continue to introduce new product combinations and the services linked to them to our customers. Our extensive product range, Finnish ownership base, and good price-quality ratio are the cornerstones for our success. The year was challenging for our organisation, but with good planning and cooperation, we succeeded very well in implementing our growth strategy. Our strong growth continued The year under review was a year of strong growth. Our turnover increased by 17.6 %, being 269.3 million euros. Our operating profit increased by 3.7 % to 35.2 million euros. Our profitability is excellent. We have continued to gain new customers, and the number of loyal customers has increased to over a million. Our investments in versatile marketing have supported our growth strategy. More services for our customers We continued to develop our Motomaatti testing and service station. Our customers have been very happy to get help for small check-ups and fitting jobs. The awareness of the Motomaatti service has clearly increased during the period under review. This is also evident in the number of customers using the service. We have placed more emphasis on the marketing of the service and the service itself. We also began to test car wash services in four localities. We would like to gain more experience about this for the future.
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It has been great to join a dynamic family company. We have an excellent opportunity to develop and grow our operations, both in Finland and abroad. 8
ANTTI TIITOLA MOTONET, AD VARAOSAMAAILMA, BG VARASTO Managing Director
Year 2017 – full of challenges On the first day of the current financial period, 1 October 2016, we opened a new department store in Mikkeli. In addition, we will open a new department store in Kokkola and move to new premises in Hämeenlinna and Lappeenranta. The active development of our network will also continue with the renewal of Motomaatti stations, the opening of new Motonet repair shops, and the development of car wash services. The development of services in outlets and support services, such as online shopping and telephone service, will be our key development areas in 2017. Our success is based on our staff, whom I wish to thank for their excellent work contribution. Let’s continue the joint development efforts in the year to come.
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We have continued to gain new customers, and the number of loyal customers has increased to over a million.
VARAOSAMAAILMA OY Managing Director’s Review
The car spare parts trade took a turn for the better
Efficient logistics for our customers’ needs
The almost three-year decline in sales turned into growth. The national sales in the business sector grew by over 7 %. The extremely cold weather in early January 2016, in particular, boosted the sales of several product groups for the entire year.
We inaugurated the new extension of our logistics centre on 1 February 2016. This 10.000 square metre extension enables even better logistics services for our own outlets and our partners.
The turnover of Varaosamaailma Oy for the financial period grew by 4.0%, being 33.3 million euros. The operating profit continued to grow, being 1.5 million euros (2015 1.0 mill. euros). Our combined outlet concept continued to expand During the period under review, our Savonlinna and Kajaani outlets moved to the same premises with a Motonet and focused on wholesale operations only. In addition, we opened a new outlet in Tornio, in the same building as a Motonet outlet. At the very beginning of the new financial period, we also moved the wholesale operations of our Mikkeli outlet into the same premises as a Motonet. Our chain of shops now comprises 22 outlets, of which 14 are MotVom combined outlets. Year 2017 We will continue to renew our outlet network in Joensuu and Lappeenranta, for example. We will place special emphasis on the development of our network and services in the Helsinki region. We will also continue to focus on the training and improvement of the professional skills of our staff. I would also like to take the opportunity to thank the entire staff of AD VaraosaMaailma for a job well done.
BG VARASTO OY Managing Director’s Review
The extension has enabled a better organisation of our logistics processes, which again has had a significant effect on the overall efficiency of the logistics. Significant growth in volume The turnover of BG Varasto increased by 26.5 %, being 91.4 million euros. Our operating profit was 2.9 million euros. The average number of personnel during the period reviewed was 78. In 2017, we will once again extend our logistics centre by 10,000 square metres. We have started to plan the extension. The building work will begin in early spring, and the new extension will be completed by the end of the year. The services of BG Varasto are produced by a committed staff, whom I wish to thank for their excellent work contribution.
SOME OF THE BRANDS WE REPRESENT
We will place special emphasis on the development of our network and services in the Helsinki region. We will also continue to focus on the training and improvement of the professional skills of our staff.
LOGISTICS CENTRE surface area 32 800 sq. m volume 324 000 cu. m pallet spaces 36 500 shelves for 36 km small items in addition , a storage room for flammable liquids
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The Group started operations in Estonia Over two years ago, the Board of Directors of Broman Group Oy decided to start business operations in Estonia. After the decision, a great deal of work has been carried out to implement the project. Motonet Estonia OĂœ (a subsidiary owned 100 % by Motonet Oy) opened its first outlet in the Lasnamäki district of Tallinn on 4 May 2016 in the past financial period.
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we employ an average of twenty people in our Estonia outlet.
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Several years ago already, the Internet introduced international competition to Finnish retail traders. Online sales have been growing for us, as well as other traders, lately. At the same time, the transparency of prices has increased. All of this means lower prices for the consumers. In Estonia, the price level of products, in general, is lower than in Finland. By starting business operations in a market where the consumer prices are lower, we are forced to take a critical look at all of our operations. Starting operations in a new market area naturally requires learning and doing new things. Our staff welcomed the challenge of internationalisation and has shown genuine enthusiasm towards building something new. Department Store Manager Tomi Ranta is in charge of the operations in Estonia, and we employ an average of twenty people in our Estonia outlet. The outlet is situated in an excellent spot (between Prisma and Bauhaus) in premises measuring about 3,500 square metres. Naturally, Motonet is not as well known in Estonia as it is in Finland, but it is becoming better and better recognised. Our customer loyalty programme is in use in our Tallinn outlet, as well. The launching of business operations in Estonia has required heavy investments, but we are certain that the experience gained has strengthened us and has also prepared our Group for facing the ever-tightening competition in Finland, too.
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Starting operations in a new market area naturally requires learning and doing new things.
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Our operating profit remained at the same level as last year, being 36.0 million euros, and our equity ratio was 70.8 %. EERO BROMAN BROMAN GROUP the Chairman of the Board of Directors
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Business indicators
Consolidated profit and loss account
TURNOVER / €M
2011
179.4
2012 2013
216.8
2014
304.0
2016 50
75
100
125
150
175
200
304 035 314.93
262 005 785.97
2 020 289.32
2 499 449.39
-205 051 397.76
-162 976 084.44
24 642 466.59
7 803 311.70
-180 408 931.17
-155 172 772.74
-39 733 721.10
-33 367 504.13
Pension expenses
-7 175 837.18
-5 896 292.14
Other social security expenses
-2 363 135.26
-1 695 203.23
-9 538 972.44
-7 591 495.37
-49 272 693.54
-40 958 999.50
-7 810 468.17
-4 353 400.99
Other operating expenses
-32 531 678.88
-28 114 306.55
O P E R AT I N G P R O F I T
36 031 832.49
35 905 755.58
Other operating income
262.0
25
1.10.2014 – 30.9.2015
TURNOVER
235.2
2015
0
1.10.2015 – 30.9.2016
CO N S O L I DAT E D P R O F I T A N D L O S S ACCO U N T
204.5
225
250
275
Materials and services Materials, supplies and consumables Purchases during the financial period Change in inventories
300
Materials and services NUMBER OF PERSONNEL
Personnel expenses
2011
Wages, salaries and fees
783
2012
Social security expenses
880
2013
915
2014
Social security expenses
954
Personnel expenses
2015
1068
1260
2016 0
100
200
300
400
500
600
700
800
900
1000
1100
1200
Depreciation and reduction in value
Financial income and expenses
2011
2011
22.4
2012 2014 2015
0
36.0 10
20
30
40
75
71
2016 0
16
70
2015
35.9
2016
61
2014
32.2
Interest and other financial expenses Financial income and expenses
57
2013
25.2
Other interest and financial income
52
2012
26.9
2013
Income from other investments in non-current assets
EQUITY RATIO / %
OPERATING PROFIT / €M
10
20
30
40
50
60
70
P R O F I T B E F O R E A P P R O P R I AT I O N S A N D TA X E S
316.70
576.70
208 843.32
449 754.60
-592 945.90
-382 802.98
-383 785.88
67 528.32
35 648 046.61
35 973 283.90
-7 820 056.62
-7 303 919.74
4 011.92
-1 381.59
27 832 001.91
28 667 982.57
Income taxes Taxes for the financial year and previous financial years Imputed taxes R E S U LT O F T H E F I N A N C I A L P E R I O D
80
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Consolidated balance sheet CO N S O L I DAT E D B A L A N C E S H E E T
30.9.2016
30.9.2015
Consolidated balance sheet CO N S O L I DAT E D B A L A N C E S H E E T
30.9.2016
30.9.2015
ASSETS
LIABILITIES
NON-CURRENT ASSETS Intangible assets Intangible rights Business value Other long-term expenses Intangible assets in total
SHAREHOLDER’S EQUITY Share capital Retained profit/loss Net profit for the financial year
360 000.00 126 151 183.48 27 832 001.91
360 000.00 101 712 449.00 28 667 982.57
S H A R E H O L D E R ’ S E Q U I T Y I N T O TA L
154 343 185.39
130 740 431.57
LIABILITIES Non-current Loans from credit institutions Pension loans Advances received Imputed tax liability Non-current liabilities in total
12 862 620.00 13 000 000.00 10 000.00 21 610.34 25 894 230.34
3 538 449.85 0.00 10 744.00 25 622.25 3 574 816.10
Current Loans from credit institutions Pension loans Trade payables Other liabilities Accruals and deferred income Current liabilities in total
4 1 19 5 6 37
399.85 000.00 214.24 944.51 045.33 603.93
10 008 932.53 0.00 20 372 376.11 4 545 737.47 5 321 461.13 40 248 507.24
L I A B I L I T I E S I N T O TA L
63 689 834.27
43 823 323.34
L I A B I L I T I E S I N T O TA L
218 033 019.66
174 563 754.91
18 23 4 682 4 724
Tangible assets Land and water areas Buildings and constructions Machinery and equipment Other tangible assets Prepayments and purchases in progress Tangible assets in total Investments Holdings in Group companies Other shares and participations Other investments Investments in total N O N - C U R R E N T A S S E T S I N T O TA L CURRENT ASSETS Inventories Goods Inventories Receivables Non-current Receivables from Group companies Loans receivable Other receivables Current Trade receivables Receivables from Group companies Loans receivable Other receivables Prepayments and accrued income Total receivables Marketable securities included in current assets Other shares and participations
633.04 000.00 797.43 430.47
550.08 46 000.00 1 937 854.60 1 984 404.68
16 538 763.96 67 890 574.07 2 496 951.10 31 406.49 1 593 927.39 88 551 623.01
14 094 211.26 36 020 761.60 1 871 726.98 0.00 8 152 456.75 60 139 156.59
178 358 168 705
435.18 480.13 285.21 200.52
178 364 168 711
435.18 939.41 285.21 659.80
93 981 254.00
62 835 221.07
105 249 108.41 105 249 108.41
80 392 556.12 80 392 556.12
140 000.00 4 235 000.00 35 600.00
0.00 5 230 000.00 0.00
2 955 10 7 987 5 336 13 707
220.71 869.45 282.70 105.71 069.62 148.19
2 838 210 31 836 3 388 12 535
015.56 869.45 957.20 579.41 300.69 722.31
100 000.00
11 545 622.00
4 995 509.06
7 254 633.41
C U R R E N T A S S E T S I N T O TA L
124 051 765.66
111 728 533.84
A S S E T S I N T O TA L
218 033 019.66
174 563 754.91
Cash in hand and at banks
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604 500 184 627 879 795
Board of Directors
FROM LEFT HARRI BROMAN, SANNA SUVANTO-HARSAAE, ANTTI TIITOLA, EERO BROMAN, VÄINÖ H. BROMAN, PETER AHLSTRÖM
Group Organisation Chart BROMAN GROUP OY KOY Joensuun Jukolankatu 20
MOTONET OY
VARAOSAMAAILMA OY
BG VARASTO OY
KOY Joensuun Teollisuus-Kansa BG-liikekiinteistöt Oy KOY Helsingin Putkitie 3
MOTONET OÜ
AD FIN OY
(Estonia)
(share of ownership 51. 5%)
Outlets Our network now includes 51 outlets: 29 Motonet and 22 AD VaraosaMaailma outlets, as well as a Motonet online shop. MOTONET 29 OUTLETS AD VARAOSAMAAILMA 22 OUTLETS LOGISTICS CENTRE
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The meetings of the Board of Directors have been inspiring, and we have achieved plenty of good decisions. EERO BROMAN BROMAN GROUP the Chairman of the Board of Directors
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BROMAN GROUP HEADQUARTERS MOTONET HEADQUARTERS
KOY Kouvolan Tommolankatu 18
BROMAN GROUP OY POSTAL ADDRESS: P.O. BOX 169, FI-80101 JOENSUU VISITING ADDRESS: TULLIPORTINKATU 55, FI-80130 JOENSUU TEL: +358 44 700 7800, FAX: +358 13 254 4199 WWW.BROMANGROUP.FI