Market announcement

Title

Unaudited consolidated interim accounts for the first quarter of 2022

Message

Segments (EURm)           Q1/22   Q1/21     yoy
----------------------------------------------------
  Selver supermarkets       139.5   133.9    4.2%

  Department stores          21.7    17.9    20.7%

  Car trade                  34.0    36.2    -6.1%

  Security segment            2.3     1.4    57.6%

  Real Estate                 1.5     1.2    18.5%
----------------------------------------------------
  Total sales               198.9   190.8    4.3%
----------------------------------------------------


  Selver supermarkets         2.3     1.5    54.1%

  Department stores          -1.7    -2.2   -25.1%

  Car trade                   2.1     1.2    75.6%

  Security segment            0.0    -0.1   -109.1%

  Real Estate                 2.6     2.5    3.9%

  IFRS 16                    -0.4    -0.7   -43.1%
----------------------------------------------------
  Total profit before tax     4.9     2.2   127.0%
----------------------------------------------------

In  the first quarter  of 2022, the consolidated  unaudited sales revenue of the
Group  was  198.9 million  euros.  Compared  to  the first quarter of 2021, when
comparable  sales revenue was 190.8 million euros,  the growth was 4.3%. The net
profit  for the reporting period was  0.4 million euros, which increased by 2.6
million euros compared to the first quarter of 2021. The pre-tax profit was 4.9
million  euros, which was  2.7 million euros more  than the comparable result of
the year before.

The  economic result of the  Group in the first  quarter of 2022 met the Group's
expectations.  Unlike the year before when  the stores of fashion and industrial
goods  were temporarily closed,  all stores of  the Group remained  open for the
entire  reporting period this  year. The expected  normalisation of the economic
environment  was shaken by  the unexpected and  frightening aggression of Russia
against  Ukraine which began in February resulting  in an increase in prices and
delivery  difficulties and  changed the  regular behaviour  of the consumers. In
spite  of the complicated situation, the Group  was able to increase its pre-tax
profit  or reduce the  loss in all  segments. In the  retail segments, the gross
profitability was improved, which in turn helped balance the increases in energy
prices  and labour  costs. Labour  costs grew  by 7.2% in  the first  quarter of
2022, while  the number of employees declined by 4.9%. The labour efficiency was
achieved  by merging the processes of the  Selver and ABC Supermarkets stores in
2021. The   wider  use  of  self-service  cash  registers,  which  are  becoming
increasingly popular among the customers, has also enabled optimising the labour
force.

In  the  Kaubamaja  department  store  segment,  the Tallinn department store of
Kaubamaja  completely  renovated  the  Naistemaailm  section  in  the  reporting
quarter.  Preparations were launched for the designing and construction of a new
Selver  store in  Tartu. The  construction of  a solar  park on  the roof of the
building  of the  Pirita Selver  has also  been launched.  In the first quarter,
investments  were made in updating the e-store platform of the Group, as well as
in  convenience applications  of the  loyalty programme.  Based on the strategic
decision  to terminate footwear  trade in separate  footwear stores, 11 ABC King
and SHU stores were closed in the first quarter.

Selver supermarkets

The  consolidated sales revenue of the supermarket business segment in the first
quarter of 2022 was 139.5 million euros, increasing by 4.2% 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 2022 was 0.40 thousand euros, increasing
by  6.0% compared to  the previous  period. In  terms of  comparable stores, the
sales  revenue of goods  per square metre  of sales area  was also 0.40 thousand
euros, growing by 4.3% compared to the reference period. In the first quarter of
2022, 10 million  purchases  were  made  from  Selver  stores, accounting for an
increase of 3% compared to the previous year.

The  consolidated pre-tax profit of the supermarket segment in the first quarter
of  was 2.3 million euros, which is 0.8 million  euros more than in the previous
year.  The consolidated  net profit  of the  supermarket segment was 0.1 million
euros,  which is 0.2 million  euros more than  last year. The difference between
the  net profit  and loss  before income  tax is  due to  the income tax paid on
dividends  - this year, the  income tax on dividends  was 0.6 million euros more
than  in the  year before.  The entire  revenue of  the supermarket  segment was
earned in Estonia.

The  actual  sales  results  and  the  reference base of the supermarket segment
include the impacts of COVID-19; the increase in prices and the Ukrainian crisis
have  also somewhat affected the consumption  habits of customers. The prices of
many  goods and services have increased in  the global market and the transition
of  those increases into final retail prices is impossible for the retail sector
to prevent. Several goods of Russian or Ukrainian origin have had to be replaced
with  alternative products  which are  somewhat more  expensive. The increase in
prices  has largely stemmed from an increase  in the prices of electricity, gas,
and  fuel,  which  has  significantly  increased  the  operating  expenditure of
businesses  and all this is  inevitably carried over to  the final prices of all
products  and services,  irrespective of  the field.  In order  to alleviate the
increase  in prices for the  customers, Selver is carrying  out a 'price freeze'
campaign  for the  third year  in a  row, fixing  the prices  of more  than 400
products. In order to counter-balance the price pressure, Selver has taken steps
to  increase  efficiency.  Investments  in  self-service  cash  registers and IT
solutions  have had a positive  effect on the labour  efficiency and on the main
process  of  handling  goods.  The  LIDL  store chain which entered the Estonian
market  with 8 stores in the  first quarter this year  has not yet had a clearly
measurable  impact on the sales activities of Selver stores in their first month
in operation.

The  fact that the Easter holiday was in the first quarter in the reference year
but   falls  in  the  second  quarter  this  year  should  also  be  taken  into
consideration  while comparing the  sales results. The  lower reference basis in
the  reference year due to the temporary  closing of stores within the framework
of the re-branding process of the Selver ABC stores also has an effect.

The sales revenue of the central kitchen of Kulinaaria, which is included in the
supermarket  segment, increased 21.4% in  the first quarter.  The pre-tax profit
decreased  by 6.5% in the  reference period, mainly  due to the depreciation and
financial  costs arising from the new production  building. On the one hand, the
remarkable growth in the turnover is based on the decline in the turnover due to
the  restrictions implemented in the  reference period, but successful marketing
campaigns  have also  supported the  growth. The  production capacity of the new
factory  has accelerated product development. The  central kitchen entered a new
segment  in the  category of  confectioneries -  the first  small torte based on
high-quality  ingredients was marketed  for the International  Women's Day under
the  trademark of  Selveri Köök  and more  is about  to come.  Various different
confectioneries,  desserts, and soups were also brought to the market. There are
plans  to start offering a breakfast selection  in the near future. The catering
segment has not recovered to the pre-pandemic level.

Selver  is planning  to open  two new  stores this  year and  renovate up to two
stores.  Development of  the e-store  service, for  which there is an increasing
demand,  remains  in  the  focus.  While  the SelveEkspress service is currently
available  to  the  customers  at  all  Selver  stores, there are plans to start
offering  the self-service solution at all Selver  ABC stores as well by the end
of the year.

Department stores

The  sales revenue of the Kaubamaja department stores segment in the first three
months  of 2022 was  21.7 million euros,  which was  20.7% 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 2022 was  1.7 million euros. The pre-tax loss
decreased  by 0.6 million euros. While there was a steep rise in the coronavirus
figures  in the first  quarter last year,  which resulted in  the closing of all
fashion  and industrial goods' stores on 11 March, all stores remained open this
year  and the customers' interest in visiting physical stores remained at a high
level,  supporting  an  increase  in  the  sales  revenues  of all stores of the
Kaubamaja department store segment.

The  sales revenue of the Kaubamaja department  stores per square metre of sales
area  was 0.26 thousand euros per month in the first three months, which is 18%
higher  than in the same period last year. Kaubamaja opened the spring season on
10 March  with a fully renewed Naistemaailm in  Tallinn and the 'Ilu Aeg' spring
campaign  was more successful  than ever before.  The campaigns in February were
affected  negatively by the full-scale war launched by Russia against Ukraine on
24 February.

In  the first quarter of  2022, the sales revenue of  OÜ TKM Beauty Eesti, which
operates  the I.L.U. cosmetics  stores, was 1.3 million  euros, which was 34.5%
more  than in the same period in 2021. In  the first quarter, the loss was 0.02
million  euros, which decreased by 0.04 million euros compared to the comparable
period  of 2021. Both the 'Eesti Kuu'  campaign of Estonian products in February
and  the Women's Day campaign in March proved successful. Several new trademarks
were  added  to  the  portfolio.  A  social  campaign  was  launched in March in
cooperation  with the Red Cross  to collect donations for  the people of Ukraine
who have suffered in the war.

The  sales revenue of the  shoe stores of TKM  King AS, which are being reported
under the Kaubamaja department store segment as of 1 April 2021, was 1.3 million
euros  in the  first quarter  of 2022, increasing  by 24.1% compared to the same
period last year. The loss for the first quarter was 0.4 million euros, which is
0.2 million  euros  better  than  in  the  same  period  last year. Based on the
strategic  decision  to  terminate  footwear  trade in separate footwear stores,
eleven  ABC King  and SHU  stores were  closed in  the first  quarter, which was
accompanied by a significant sale of the stocks.

Car trade

The  sales revenue  of the  car trade  segment in  the first quarter of 2022 was
34.0 million euros. The sales revenue decreased by 6.1% compared to the previous
year.  The segment's consolidated  pre-tax profit in  the first quarter was 2.1
million euros, which is 0.9 million euros more than in the previous year. In the
first  three months of the year, a  total of 1,277 new passenger cars were sold.
The  turnover of the  car trade segment  dropped primarily due  to the continued
shortage  of new cars. The new vehicles  of Peugeot and Shkoda were most affected
by  delivery problems of the brands represented by the Group. In connection with
the reduced availability of new cars, the possibilities for switching an old car
for a new one also shrunk, which in turn reduced the stocks of used cars and the
respective  growth in sales. From the positive perspective, the car shortage has
alleviated the price pressure, which has had a positive effect on profitability.
Follow-up  services are being  provided in the  normal rhythm and are fulfilling
the expectations. The launch of the new KIA Sportage SUV has been successful and
the sales have progressed as expected. The new Peugeot 308, the KIA EV6 electric
car, and Shkoda Fabia have also been added to the selection of models.

Security segment

The sales revenue of the security segment outside the Group in the first quarter
of  2022 was 2.3 million euros, increasing by  57.6% in comparison with the same
period  of  last  year.  The  segment  broke  even in the first quarter, thereby
improving  the pre-tax profit by 0.1 million  euros. The areas of cash transport
and control centre services exhibited the fastest growth. The turnover decreased
in  the area of technology  projects, partly due to  deliberate reduction of the
risks  in a complicated environment, but  partly also due to delayed deliveries.
New  customers were  gained in  all areas  in the  course of the quarter and the
general  demand  for  the  services  was  at  a good level. The biggest negative
factors  affecting  the  profitability  are  still  the  labour shortage and the
increase  in energy prices.  The chance of  the technology projects being halted
due  to issues in  the general construction  sector has arisen  as an additional
risk.

Real estate

The  sales revenue  of the  real estate  segment outside  the Group in the first
quarter  of 2022 was 1.5 million  euros, increasing by  18.5% in comparison with
the  first quarter of the last year. The  pre-tax profit of the segment was 2.6
million  euros  in  the  first  quarter.  The  profit  increased  by 3.9% in the
reference period.

The significant increase in the sales revenue of the segment partly stemmed from
the  impact of the temporary  rent discounts provided to  the tenants during the
restrictions  imposed by the Government of the Republic to prevent the spread of
COVID-19 in  the reference period.  The increased sales  revenue and profit this
year  was supported by the new tenants  added to the Tartu Kaubamaja centre last
year,  as well as the opening of the reconstructed business centre in Salaspils,
Latvia.  The profit has also been affected by a significantly faster increase in
energy  prices compared  to the  previous levels.  The well-planned and tasteful
marketing campaigns became important keywords of the shopping centres managed by
the  real estate segment in the beginning of the year. The image campaign of the
people  of Viimsi in which the local people of Viimsi were used as models in the
campaign of the Viimsi Keskus centre was redesigned and became very popular.

Preparations  have been launched this year for the designing and construction of
a new Selver store in Tartu. The construction of a solar park on the roof of the
building  of the  Pirita Selver  has begun.  The electricity  to be generated by
using  the solar panels will be used for  the own consumption of the building. A
detailed  plan is being drawn up for  increasing the building rights on the plot
of the Laulasmaa Selver.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

-------------------------------------------------------------------------
                                                 31.03.2022   31.12.2021
-------------------------------------------------------------------------
  ASSETS
-------------------------------------------------------------------------
  Current assets

  Cash and cash equivalents                          33,001       29,981

  Trade and other receivables                        19,299       20,673

  Inventories                                        71,181       68,369
-------------------------------------------------------------------------
  Total current assets                              123,481      119,023
-------------------------------------------------------------------------
  Non-current assets

  Long-term receivables and prepayments                 304          304

  Investments in associates                           1,803        1,745

  Investment property                                62,757       62,690

  Property, plant and equipment                     424,537      431,263

  Intangible assets                                  20,490       20,284
-------------------------------------------------------------------------
  Total non-current assets                          509,891      516,286
-------------------------------------------------------------------------
  TOTAL ASSETS                                      633,372      635,309
-------------------------------------------------------------------------

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

  Borrowings                                         41,949       40,646

  Trade and other payables                          130,739      111,345
-------------------------------------------------------------------------
  Total current liabilities                         172,688      151,991
-------------------------------------------------------------------------
  Non-current liabilities

  Borrowings                                        243,304      238,705

  Deferred tax liabilities                            4,476        4,476

  Provisions for other liabilities and charges          311          267
-------------------------------------------------------------------------
  Total non-current liabilities                     248,091      243,448
-------------------------------------------------------------------------
  TOTAL LIABILITIES                                 420,779      395,439
-------------------------------------------------------------------------
  Equity

  Share capital                                      16,292       16,292

  Statutory reserve capital                           2,603        2,603

  Revaluation reserve                               108,887      109,543

  Retained earnings                                  84,811      111,432
-------------------------------------------------------------------------
  TOTAL EQUITY                                      212,593      239,870
-------------------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY                      633,372      635,309
-------------------------------------------------------------------------

CONDENSED  CONSOLIDATED  STATEMENT  OF  PROFIT  OR  LOSS AND OTHER COMPREHENSIVE
INCOME

In thousands of euros

  -----------------------------------------------------------------------------
                                                         3 months
                                                             2022 3 months 2021
  -----------------------------------------------------------------------------


   Revenue                                                198,923       190,766

   Other operating income                                     327           205



   Cost of merchandise                                   -146,313      -145,316

   Services expenses                                      -14,637       -11,526

   Staff costs                                            -22,347       -20,837

   Depreciation, amortisation and impairment losses        -9,642        -9,857

   Other expenses                                            -313          -250
  -----------------------------------------------------------------------------
   Operating profit                                         5,998         3,185
  -----------------------------------------------------------------------------
   Finance income                                               1             1

   Finance costs                                           -1,159        -1,076

   Share  of net  profit of  associates accounted for
   using the equity method                                     58            48
  -----------------------------------------------------------------------------
   Profit before tax                                        4,898         2,158
  -----------------------------------------------------------------------------
   Income tax expense                                      -4,479        -4,333
  -----------------------------------------------------------------------------
   NET LOSS FOR THE FINANCIAL YEAR                            419        -2,175
  -----------------------------------------------------------------------------
   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            419        -2,175
  -----------------------------------------------------------------------------
 Basic and diluted earnings per share (euros)                0.01         -0.05

Raul Puusepp

Chairman of the Board

Phone +372 731 5000