Market announcement

Title

Unaudited consolidated interim accounts for the first quarter of 2021

Message

Segments (EURm)           Q1/21   Q1/20    yoy
---------------------------------------------------
  Supermarkets              133.9   118.3   13.2%

  Department stores          18.4    21.1   -13.1%

  Cars                       36.2    33.1    9.5%

  Footwear                    1.0     1.6   -38.5%

  Real Estate                 1.2     1.3   -7.7%
---------------------------------------------------
  Total sales               190.8   175.5    8.7%
---------------------------------------------------


  Supermarkets                1.5     3.4   -56.4%

  Department stores          -1.7    -1.0   75.1%

  Cars                        1.2     0.3   344.1%

  Footwear                   -0.6    -0.9   -34.5%

  Real Estate                 2.5     2.7   -5.7%

  IFRS 16                    -0.7    -0.3   125.8%
---------------------------------------------------
  Total profit before tax     2.2     4.1   -47.1%
---------------------------------------------------

In  the  first  quarter  of  2021, the  consolidated  unaudited sales revenue of
Tallinna  Kaubamaja Grupp was 190.8 million euros. Compared to the first quarter
of 2020, when comparable sales revenue was 175.5 million euros, the increase was
8.7%. The  net  loss  for  the  reporting  period  was  2.2 million euros, which
increased  by 0.4 million euros compared to  the first quarter of 2020. The pre-
tax  profit was 2.2 million euros, which was  1.9 million euros less than a year
earlier.

Similarly to the previous year, the first quarter of 2021 ended with the closing
of  the  points  of  sale  of  the  footwear trade segment, the industrial goods
departments  of the Kaubamaja department store  segment, and I.L.U. stores. This
year,  the closure took place earlier - on 11 March. Last year, industrial goods
departments  were  closed  on  27 March,  so  this  year  gave a correspondingly
stronger  blow to the seasonal sales of fashion goods. This time, the Group's e-
shops  were better  prepared for  the sharp  increase in  the volume  of orders,
although the growth in e-shop sales did not compensate for the decrease in sales
revenue  due to  store closures.  The Group's  car trade  segment was  the least
affected  by the closures - the security of supply of the car brands sold by the
Group  made it possible to achieve good  sales and profit numbers. The profit in
the  supermarket  segment  was  most  affected  by the one-time expenses for the
integration of the store chain acquired last year into Selver's supply chain and
IT  systems. The  transfer was  accompanied by  a few  days of store closures to
change  the  equipment.  The  largest  one-off  costs  were labour costs for the
training  of staff in the transferred  stores. From March, the security services
business  acquired from P. DUSSMANN  EESTI OÜ at the  end of 2020 was integrated
into  the  composition  of  the  security  company  Viking Security AS, which is
reported  in the Group's Kaubamaja department store segment. Labour costs in the
Group  increased  by  a  total  of  14.3% in  the  first  quarter. The number of
employees  increased by 15.7%, i.e. by almost 700 people. The increase in assets
due  to  previous  investments  and  the  revaluation  of  material  assets  was
accompanied by an increase in depreciation of 1.9 million euros. The increase in
depreciation  due to the standard of  lease agreements accounted for almost half
of  this, mainly due  to the stores  added to the  Selver segment last year. The
total estimated negative impact of IFRS 16 on profit was 0.4 million euros.

In  the first quarter of  2021, one of the most  important major developments of
the  Group in recent  years was completed  - the new  production building of the
central  kitchen  of  Kulinaaria  OÜ,  the  renovation  of  the previous factory
building,  and  the  interconnection  were  completed. The most labour-intensive
innovation  was the transfer of stores operating under the Comarket brand to the
Selver ABC brand and the integration of Comarket, Delice stores, and the Solaris
Food  Store with the Selver  supply chain and IT  systems. The upgrade of the e-
shop  software platform was started in  the reporting quarter. This year, Selver
plans  to renovate or expand five stores  and continue to develop and expand the
service area of the e-shop service to be nationwide.

Selver supermarkets

The  consolidated sales revenue of the supermarket business segment in the first
quarter  of 2021 was  133.9 million euros,  increasing by  13.2% compared to the
previous  year. The average monthly sales revenue per square metre of sales area
in  the  first  quarter  of  2021 was  0.38 thousand  euros, decreasing by 3.1%
compared  to the previous year. In terms of comparable stores, the sales revenue
of  goods per square metre  of sales area was  0.39 thousand euros, remaining at
the  level  of  the  previous  year.  In  the first quarter of 2021, 9.5 million
purchases  were  made  from  Selver  stores,  which  is  2.8% more  than  in the
comparable period a year earlier.

The  consolidated pre-tax profit of the supermarket segment in the first quarter
of  2021 was  1.5 million  euros,  which  is  1.9 million euros less than in the
previous  year. The consolidated loss of the supermarket segment was 0.1 million
euros,  which is 1.3 million euros weaker than last year. The difference between
the  loss and profit before income  tax is partly due to  the income tax paid on
dividends  - in  2021; the income  tax on  dividends was 0.6 million euros lower
than a year earlier.

From  1 June 2020, the results of the supermarket segment include the results of
ABC Supermarkets.

Selver's comparison base for the first quarter is affected by the acquisition of
the ABC Supermarkets store chain last year, which increased the number of Selver
stores  by  19. In  February  2021, the  sales  activities  of  one  store  were
terminated  and at the end of the quarter, the sales activities will continue in
the  eighteen added  stores. In  addition, the  comparability of  the results is
affected  by the new Selver store opened  in July 2020 and the renovation of one
Selver store in the first quarter of the previous year, as well as the fact that
last  year was a leap  year. Compared to the  previous year, the sales volume of
Selver's   e-channel  has  tripled.  The  service  area  of  e-Selver  has  been
significantly   expanded.  By  the  end  of  the  first  quarter,  e-Selver  was
represented  in 13 counties, meaning  that the e-Selver  service is available to
more  than one million Estonians. E-Selver is  the food and consumer goods chain
with the largest service area in Estonia.

In  the  first  quarter  of  this  year,  the  transfer of the stores of the ABC
Supermarkets  chain operating under  the Comarket brand  to the Selver ABC brand
was completed and IT software upgrades were made in the Delice store and Solaris
Food  Store. In  Delice stores  and Solaris,  the Delice  Express service is now
offered  to customers - previously, these stores had self-service checkouts, but
now  customers can in addition conveniently  make purchases with a scanner. This
process involved a few days of store closures to change the equipment as well as
one-off costs and investments.

The  development of  profit has  been affected  by the  faster growth  of labour
costs,  which is temporarily caused by  the integration of ABC Supermarket store
processes  into  the  Selver  solution,  higher  labour  needs in the e-commerce
segment,  where the provision of the service is more resource-intensive compared
to the physical store, and higher expenses to cover the increased sick leaves of
employees.

Like  the Estonian economy  as a whole,  the Supermarket segment  is affected by
changes in customers' purchasing behaviour and consumption habits related to the
coronavirus  that began last year, as well as continued increases in the cost of
personal protective equipment for customers and employees.

Department stores

The  sales revenue of  the Kaubamaja department  stores segment in  the first 3
months  of 2021 was  18.4 million euros,  which was  13.1% less than in the same
period  of the previous  year. The sales  revenue of Kaubamaja department stores
per square metre of sales area was 0.22 thousand euros per month in the first 3
months, which is 15.6% lower than in the same period last year. The pre-tax loss
of  Kaubamaja department  stores in  the first  quarter of  2021 was 1.7 million
euros,  which was 0.7 million euros weaker than  a year ago. The sales result of
Kaubamaja  department  stores  in  the  first  quarter was affected by the sharp
increase  in  coronavirus  indicators  in  January,  which  is why the number of
visitors  in  both  Tallinn  and  Tartu  Kaubamaja  department stores decreased.
Despite  the modest sales of fashion goods,  the sales of household goods showed
success  at the beginning of the year, and the Kodu Aeg (Time for Home) campaign
at the beginning of February achieved the best results in recent years. Although
the Ilu Aeg (Time for Beauty) campaign at the beginning of March also had a good
start  and gave hope for record results as well, the strict restrictions imposed
by  the  Government  of  the  Republic  of  Estonia on 11 March, which meant the
closure  of all industrial goods  stores, had a profound  negative effect on the
campaign  and all of March. As in the previous year, Kaubamaja department stores
closed  all departments of industrial goods in Tallinn and Tartu on 11 March (in
2020, they were closed on 27 March) and only food departments remained open. The
Kaubamaja  e-shop  has  grown  strongly  throughout  the  crisis  period and has
increased  its results sixfold in terms of both turnover and number of visitors.
The  turnover of the Kaubamaja e-shop increased  by 158% in the first quarter of
2021.

In  the first quarter of  2021, the sales revenue of  OÜ TKM Beauty Eesti, which
operates the I.L.U. cosmetics stores, was 1.0 million euros, which was 9.7% less
than in the same period in 2020. In the first quarter, the loss was 0.06 million
euros,  which increased by 12.6% compared to  the comparable period of 2020. The
result  of the first quarter was  negatively affected by consumers' caution when
going to shopping centres due to the COVID-19 virus situation and the closure of
stores  in March.  In the  reporting quarter,  the main  focus in  marketing and
development  activities was on supporting the  e-shop, the results of which were
strong as expected.

Car trade

The  sales revenue  of the  car trade  segment in  the first quarter of 2021 was
36.2 million  euros. Sales  revenue increased  by 9.5% compared  to the previous
year.  In the first three months of the year, a total of 2,077 new vehicles were
sold.  In the first quarter of 2021, the  Baltic car market decreased by 17%. In
March,  however, there was a light recovery in the market. The pre-tax profit of
the  segment for the first quarter  of 2021 was 1.2 million euros, exceeding the
profit  for the comparable period of the previous year by 0.9 million euros. The
strong  result for the first quarter of  2021 can be attributed to the fact that
there were no major delivery difficulties among the brands sold by the car trade
segment  of  the  Group.  Profits  were  helped  by  the situation where new car
inventories  were not too high compared to market demand and there was no reason
for additional discount campaigns.

Footwear trade

The  sales revenue of  the footwear trade  segment was 1.0 million  euros in the
first  quarter of 2021, decreasing  by 38.5% compared to  the previous year. The
loss  for the  first quarter  was 0.6 million  euros, which is 0.3 million euros
better  result than  in the  same period  last year.  Sales revenue in the first
quarter  was affected by a significant decrease  in the number of store visitors
due  to declining consumer  demand and government's  recommendations to restrict
movement in the conditions of the spread of COVID-19. In March, at the beginning
of  the spring  season, all  stores were  closed. Only  the newly opened e-shops
remained operational, the results of which were as expected.

Real estate

The  sales revenue earned  in the real  estate segment outside  the Group in the
first  quarter of 2021 was  1.2 million euros. Sales  revenue decreased by 7.7%
compared  to the previous year. The pre-tax profit of the real estate segment in
the  first  quarter  of  2021 was  2.5 million  euros. Compared to the reference
period, profit decreased by 5.7%.

The decline in the segment's sales revenue and profit was again brought about by
the restrictions imposed by the Government of the Republic to prevent the spread
of  the coronavirus, which meant the closure of shopping centres as of 11 March.
Pharmacies,  grocery stores,  optician shops,  pet stores,  and sales  points of
telecommunications  enterprises remained open in  the centres. Service companies
may   continue  to  operate,  ensuring  a  25% occupancy  requirement.  Catering
establishments  are only  open for  selling food  for takeaway. The restrictions
have  most affected  the Tartu  Kaubamaja department  store, where the number of
visitors  to has decreased by  almost 30% in the first  quarter. The decrease in
the  number of visitors to Viimsi Shopping Centre was less than 20%. In addition
to  the decrease in sales  revenue, the decrease in  the segment's profit in the
first  quarter was caused by the increase in depreciation due to the revaluation
of assets at the end of last year.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

-------------------------------------------------------------------------
                                                 31.03.2021   31.12.2020
-------------------------------------------------------------------------
  ASSETS
-------------------------------------------------------------------------
  Current assets

  Cash and cash equivalents                          26,072       32,757

  Trade and other receivables                        15,774       15,894

  Inventories                                        84,992       77,334
-------------------------------------------------------------------------
  Total current assets                              126,838      125,985
-------------------------------------------------------------------------
  Non-current assets

  Long-term receivables and prepayments                 323          335

  Investments in associates                           1,760        1,712

  Investment property                                60,408       60,347

  Property, plant and equipment                     388,462      388,757

  Intangible assets                                  20,276       20,148
-------------------------------------------------------------------------
  Total non-current assets                          471,229      471,299
-------------------------------------------------------------------------
  TOTAL ASSETS                                      598,067      597,284
-------------------------------------------------------------------------

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

  Borrowings                                         51,657       49,402

  Trade and other payables                          122,936      102,841
-------------------------------------------------------------------------
  Total current liabilities                         174,593      152,243
-------------------------------------------------------------------------
  Non-current liabilities

  Borrowings                                        222,394      217,349

  Deferred tax liabilities                            4,408        4,408

  Provisions for other liabilities and charges          277          277
-------------------------------------------------------------------------
  Total non-current liabilities                     227,079      222,034
-------------------------------------------------------------------------
  TOTAL LIABILITIES                                 401,672      374,277
-------------------------------------------------------------------------
  Equity

  Share capital                                      16,292       16,292

  Statutory reserve capital                           2,603        2,603

  Revaluation reserve                               102,037      102,630

  Currency translation differences                     -149         -149

  Retained earnings                                  75,612      101,631
-------------------------------------------------------------------------
  TOTAL EQUITY                                      196,395      223,007
-------------------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY                      598,067      597,284
-------------------------------------------------------------------------


CONDENSED  CONSOLIDATED  STATEMENT  OF  PROFIT  OR  LOSS AND OTHER COMPREHENSIVE
INCOME

In thousands of euros

  -----------------------------------------------------------------------------
                                                         3 months
                                                             2021 3 months 2020
  -----------------------------------------------------------------------------


   Revenue                                                190,766       175,496

   Other operating income                                     205           243



   Cost of merchandise                                   -145,316      -134,030

   Services expenses                                      -11,526       -10,534

   Staff costs                                            -20,837       -18,233

   Depreciation, amortisation and impairment losses        -9,857        -7,991

   Other expenses                                            -250          -231
  -----------------------------------------------------------------------------
   Operating profit                                         3,185         4,720
  -----------------------------------------------------------------------------
   Finance income                                               1

   Finance costs                                           -1,076          -697

   Share  of net  profit of  associates accounted for
   using the equity method                                     48            55
  -----------------------------------------------------------------------------
   Profit before tax                                        2,158         4,078
  -----------------------------------------------------------------------------
   Income tax expense                                      -4,333        -5,821
  -----------------------------------------------------------------------------
   NET LOSS FOR THE FINANCIAL YEAR                         -2,175        -1,743
  -----------------------------------------------------------------------------
   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 LOSS FOR THE FINANCIAL YEAR         -2,175        -1,743
  -----------------------------------------------------------------------------
 Basic and diluted earnings per share (euros)               -0.05         -0.04



Raul Puusepp

Chairman of the Board

Phone +372 731 5000