Market announcement

Title

Unaudited consolidated interim accounts for the first quarter of 2023

Message

Segments (EURm)           Q1/23   Q1/22    yoy
---------------------------------------------------
  Selver supermarkets       147.2   139.5    5.5%

  Department stores          24.7    21.7   14.1%

  Car trade                  41.7    34.0   22.7%

  Security segment            2.9     2.3   25.6%

  Real Estate                 1.6     1.5    6.0%
---------------------------------------------------
  Total sales               218.1   198.9    9.6%
---------------------------------------------------


  Selver supermarkets         1.7     2.3   -26.0%

  Department stores          -0.8    -1.7   -54.3%

  Car trade                   3.0     2.1   42.1%

  Security segment            0.1     0.0     -

  Real Estate                 2.5     2.6   -6.3%

  IFRS 16                    -0.5    -0.4   20.8%
---------------------------------------------------
  Total profit before tax     5.9     4.9   20.5%
---------------------------------------------------


In  the first quarter  of 2023, the consolidated  unaudited sales revenue of the
Group was 218.1 million euros. Compared to the first quarter of 2022, the growth
was  9.6%. The net profit for the  reporting period was 0.6 million euros, which
increased  by 43.2% compared to the first  quarter of 2022, including income tax
of  5.3 million euros (4.5  million euros in  2022). The pre-tax profit was 5.9
million  euros, which was  1.0 million euros more  than the comparable result of
the year before.

In the difficult economic conditions of the first quarter of 2023, the Group was
able  to increase sales  revenue in all  segments, although the  increase in the
price  of products has been accompanied by  a decrease in consumption. The total
profit  of the Group also  increased. The profit was  improved by the department
store  segment  and  the  security  segment,  as  well as the car trade segment,
despite  the  continuing  supply  chain  challenges.  The  pre-tax profit of the
supermarket  segment was below the comparable profit of the previous year due to
the  increase in energy prices.  The pre-tax profit of  the real estate segment,
which  has  been  affected  by  interest  rate increases, was slightly below the
result  of  the  previous  year.  As  a  result of the large price increase, the
expectations  of employees for wages increases are high. The labour costs of the
Group  increased  by  15.7% in  the  first  quarter of 2023, while the number of
employees increased by 0.8%.

In  the reporting quarter,  the supermarket segment  renovated Ringtee Selver in
Tartu,  and in March began large-scale  renovations of Järve Selver, the largest
store  in  the  segment,  scheduled  to  be  completed  in  May.  This year, the
supermarket  segment plans to renovate  one more store in  the centre of Tallinn
and  open a new hypermarket by the Tallinn roundabout. Selveri Köök, the private
label of the supermarket segment, continued to expand its soup portfolio and new
products  were also  added to  the bakery  category. Oatmeal  porridge made with
plant-based milk was added to the 'Hea Päeva Algus' ('A good start to the day!')
breakfast  series. In  the department  store segment,  Ülemiste I.L.U. cosmetics
store  was renovated: the sales area was  increased by almost half to 460 square
metres.  The NYX make-up shop-in shop with a separate entrance was opened in the
Ülemiste I.L.U. cosmetics store. In the real estate segment, the construction of
a  solar park on the roof of Viimsi Centre continued, the completion of which is
planned   for   this  spring.  In  January,  WOW  Selver,  which  did  not  meet
expectations, was closed on Saaremaa.

Selver supermarkets

The  consolidated sales revenue of the supermarket business segment in the first
quarter of 2023 was 147.2 million euros, increasing by 5.5% compared to the same
period  of the previous year. The average monthly sales revenue per square metre
of  sales area in the first  quarter of 2023 was 0.42 thousand euros, increasing
by  7.0% compared to  the previous  period. In  terms of  comparable stores, the
sales  revenue of goods per square metre  of sales area was 0.43 thousand euros,
also  growing by 7.0% compared to the reference  period. In the first quarter of
2023, 9.5 million  purchases  were  made  from  Selver stores, accounting for an
increase of 4.4% compared to the previous year.

The consolidated pre-tax profit of the supermarkets segment in the first quarter
of 2023 was 1.7 million euros, 0.6 million euros less than in the previous year.
The  consolidated net profit  of the supermarket  segment was 0.5 million euros,
0.4 million euros more than last year. The difference between the net profit and
profit before income tax is due to the income tax paid on dividends - this year,
the income tax on dividends was 1.0 million euros lower than in the year before.

The  financial results of the first quarter of 2023 are affected by the turnover
added  by the opening of Selver  supermarkets in Tallinn, Priisle, and Tabasalu,
and  the lost turnover due to the closure  of WOW Selver on Saaremaa in January.
Also  the temporary closure and  renovation of Ringtee Selver  in Tartu, and the
suspension  of  sales  of  Järve  Selver  (the  largest  Selver) in March due to
renovation works. The turnover results of the supermarket segment continue to be
affected  by accelerated inflation. The almost 26% increase in the price of food
products  has changed  the buying  behaviour of  customers and  keeps the volume
sales  of goods below the level of last year. The prices of energy carriers have
stabilised,  but  despite  the  implementation  of savings opportunities, energy
expenditures  are one-third higher than the  year before. High energy prices and
the  increase in  raw material  prices have  increased the  prices of almost all
expenses,  and price  increases, despite  the search  for and  implementation of
savings  opportunities, have  a significant  impact on  the economic result. The
increase in labour costs has been 14% in the supermarkets segment, exceeding the
increase  in sales  revenue. As  a counterweight,  opportunities to increase the
efficiency of work processes, reduce working hours and thereby increase employee
wages have been continuously sought.

In  the public survey organised by the Estonian E-Commerce Association, e-Selver
earned  two awards:  the title  of the  best e-store  in the category of food e-
stores and the title of the people's favourite e-store in general.

In addition to Ringtee and Järve Selver, Selver plans to renovate one more store
and  open at  least one  new store  this year.  In the  first quarter, 14 Selver
stores  started issuing identity documents issued by the Police and Border Guard
Board.  The  plan  is  to  start  providing this service in additional 27 Selver
stores by the end of the second quarter.

Department stores

The  sales revenue of the Kaubamaja department stores segment in the first three
months of 2023 was 24.7 million euros, 14.1% more than in the same period of the
previous year. The pre-tax loss of the Kaubamaja department store segment in the
first  quarter of 2023 was 0.8 million euros. The pre-tax loss decreased by 0.9
million euros.

The  sales revenue of the  department stores per square  metre of sales area was
0.31 thousand  euros per month in the  first three months, which is 20.9% higher
than  in the same  period last year.  Russia's full-scale war  in Ukraine, which
began  on February 24 last year, affected second-half sales in the first quarter
of last year. This spring, however, customer interest was high and the number of
visits  to stores  was much  higher than  last year.  In addition, the number of
customers  increased  both  in  terms  of  domestic  customers and tourists. The
discount  of winter season goods  was affected by a  warmer than average winter,
which  is why the discount percentages were  higher this year, but the increased
sales  volumes compensated  the lower  margin and  had a  positive effect on the
result.  The spring  season started  very successfully  and several  newly added
brands in the fashion and home design were of interest to customers. The Ilu Aeg
campaign once again broke the record for the highest sales numbers.

In  the first quarter of  2023, the sales revenue of  OÜ TKM Beauty Eesti, which
operates the I.L.U. cosmet-ics stores, was 1.7 million euros, 25.8% more than in
the  same  period  in  2022. In  the  first quarter, the profit was 0.04 million
euros,  which compared to the loss of the comparable period in 2022, improved by
0.06 million  euros.  The  most  important  event  of  the first quarter was the
renovation  of the Ülemiste I.L.U. cosmetics store,  where the sales area of the
store  increased by  48.8% to 460 square  metres. In  addition, the  NYX make-up
shop-in  shop with a  separate entrance was  opened. Despite the business inter-
ruption in the Ülemiste store lasting for more than a month, the sales result of
the  entire chain was posi-tive thanks to the concept innovations and successful
campaigns  that  took  place  last  year.  In  March, the pilot of environmental
awareness  raising campaign 'Ilupakend annab  boonust' was launched, encouraging
customers to return empty beauty product packages to the store by rewarding them
with  bonus points awarded to their Partnerkaart card. The campaign is organised
in  cooperation with  Neular and  Gravels, companies  which recycle  plastic and
glass packaging.

Car trade

The  sales revenue  of the  car trade  segment in  the first quarter of 2023 was
41.7 million  euros.  The  sales  revenue  increased  by  22.7% compared  to the
previous  year. The consolidated  pre-tax profit of  the segment was 3.0 million
euros in the first quarter, which is 0.9 million euros more than in the previous
year.

In  the first three months of the year, a total of 1,461 new passenger cars were
sold,  which is 14.4% more than in the previous year. Despite the still volatile
supply  of  new  cars,  the  car  segment  managed to achieve an excellent sales
result.  The problems with the availability of  cars in recent years have helped
to  maintain a higher sales margin. In the Group's car segment, the sales volume
of  used cars increased by  nearly a third in  the first quarter. Customers have
begun  to increasingly  value more  environmentally friendly  cars, which is why
customers' interest in electric cars has increased. Unfortunately, the supply of
electric cars in the Baltics has not yet caught up with the demand.

Security segment

The sales revenue of the security segment outside the Group in the first quarter
of  2023 was 2.9 million euros, increasing by  25.6% in comparison with the same
period  of last year. The pre-tax profit of the segment in the first quarter was
0.1 million  euros, increasing by 0.05 million euros compared to the same period
last year.

Turnovers of all business areas increased in the first quarter and profitability
also  improved.  Several  important  clients  were  added  and  the portfolio of
services increased. We started offering a social security service to the elderly
in  the city of Tallinn  in cooperation with Koduandur  OÜ. Various input prices
have  increased and the  pressure on costs  is strong, but  the company has been
able  to  successfully  cope  with  it  through  efficient operations and volume
growth.

In  February,  the  security  segment  acquired  the  security systems wholesale
company  AS  Walde,  which  creates  opportunities  to bring new products to the
market and develop security systems wholesale activities.

Real estate

The  sales revenue  of the  real estate  segment outside  the Group in the first
quarter of 2023 was 1.6 million euros, increasing by 6.0% in comparison with the
first  quarter of  the last  year. The  pre-tax profit  of the  segment was 2.5
million  euros  in  the  first  quarter.  The  profit  decreased  by 6.3% in the
reference period.

The  growth of  the sales  revenue of  the segment  is largely due to the rental
market   for   business  premises,  which  has  revived  after  the  coronavirus
restrictions.  New  tenants  have  been  added  to  the  rental premises of both
Tallinna  Kaubamaja  Gallery  and  Tartu  Kaubamaja  Centre. In the past year, a
commercial  building  in  Kuldiga,  Latvia,  was  leased  out.  The caution that
characterised  the economic environment at  the end of the  year, which was also
reflected in the number of visitors to the centres, has returned to growth since
the  beginning of the year and the number of  visits is on the rise. Most of the
loan  portfolio of  the Group  is concentrated  in the  real estate segment. The
increase  in the cost of loan money caused  by the increase in interest rates in
the  euro area, implemented  to tighten monetary  policy by the European Central
Bank,  led to a slight decrease in  profit for the segment. The interest expense
has multiplied compared to the reference base of a year ago.

At  the end of last  year, the construction of  a solar park on  the roof of the
Viimsi  Centre began. The completion of the  park is planned for spring. This is
the  second building in the row with an energy production plant installed on its
roof.  The produced electricity  is mainly used  for the building  itself. It is
planned  to open  a newly  built car  wash in  the immediate  vicinity of Peetri
Selver  in May, which will  be operated by a  party outside the Group. The Group
continues  to  pay  great  attention  to  improving  the  energy  efficiency  of
buildings.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

-------------------------------------------------------------------------
                                                 31.03.2023   31.12.2022
-------------------------------------------------------------------------
  ASSETS
-------------------------------------------------------------------------
  Current assets

  Cash and cash equivalents                          31,017       22,436

  Trade and other receivables                        21,641       27,200

  Inventories                                        90,758       89,194
-------------------------------------------------------------------------
  Total current assets                              143,416      138,830
-------------------------------------------------------------------------
  Non-current assets

  Long-term receivables and prepayments                 292          299

  Investments in associates                           1,791        1,722

  Investment property                                63,635       63,623

  Property, plant and equipment                     421,760      420,600

  Intangible assets                                  22,069       21,723
-------------------------------------------------------------------------
  Total non-current assets                          509,547      507,967
-------------------------------------------------------------------------
  TOTAL ASSETS                                      652,963      646,797
-------------------------------------------------------------------------

-------------------------------------------------------------------------
  LIABILITIES AND EQUITY
-------------------------------------------------------------------------
  Current liabilities

  Borrowings                                         94,715       97,107

  Trade and other payables                          128,693      111,449
-------------------------------------------------------------------------
  Total current liabilities                         223,408      208,556
-------------------------------------------------------------------------
  Non-current liabilities

  Borrowings                                        209,165      190,825

  Deferred tax liabilities                            5,299        5,299

  Provisions for other liabilities and charges          528          458
-------------------------------------------------------------------------
  Total non-current liabilities                     214,992      196,582
-------------------------------------------------------------------------
  TOTAL LIABILITIES                                 438,400      405,138
-------------------------------------------------------------------------
  Equity

  Share capital                                      16,292       16,292

  Statutory reserve capital                           2,603        2,603

  Revaluation reserve                               106,362      106,981

  Retained earnings                                  89,306      115,783
-------------------------------------------------------------------------
  TOTAL EQUITY                                      214,563      241,659
-------------------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY                      652,963      646,797
-------------------------------------------------------------------------


CONDENSED  CONSOLIDATED  STATEMENT  OF  PROFIT  OR  LOSS AND OTHER COMPREHENSIVE
INCOME

In thousands of euros

  -----------------------------------------------------------------------------
                                                         3 months
                                                             2023 3 months 2022
  -----------------------------------------------------------------------------


   Revenue                                                218,083       198,923

   Other operating income                                     332           327



   Cost of merchandise                                   -158,573      -146,313

   Services expenses                                      -15,895       -14,637

   Staff costs                                            -25,852       -22,347

   Depreciation, amortisation and impairment losses       -10,066        -9,642

   Other expenses                                            -393          -313
  -----------------------------------------------------------------------------
   Operating profit                                         7,636         5,998
  -----------------------------------------------------------------------------
   Finance income                                               1             1

   Finance costs                                           -1,806        -1,159

   Share  of net  profit of  associates accounted for
   using the equity method                                     69            58
  -----------------------------------------------------------------------------
   Profit before tax                                        5,900         4,898
  -----------------------------------------------------------------------------
   Income tax expense                                      -5,300        -4,479
  -----------------------------------------------------------------------------
   NET PROFIT FOR THE FINANCIAL YEAR                          600           419
  -----------------------------------------------------------------------------
   Other comprehensive income:

   Items that will not be subsequently reclassified
   to profit or loss
  -----------------------------------------------------------------------------
   Other comprehensive income for the financial year            0             0
  -----------------------------------------------------------------------------
   TOTAL COMPREHENSIVE PROFIT FOR THE FINANCIAL YEAR          600           419
  -----------------------------------------------------------------------------
 Basic and diluted earnings per share (euros)                0.01          0.01



Raul Puusepp

Chairman of the Board

Phone +372 731 5000