Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the first quarter of 2024

Teade

Segments (EURm)           Q1/24   Q1/23    yoy
---------------------------------------------------
  Selver supermarkets       146.4   147.2   -0.5%

  Department stores          24.0    24.7   -2.9%

  Car trade                  44.8    41.7    7.5%

  Security segment            4.5     2.9   58.6%

  Real Estate                 1.7     1.6    8.2%
---------------------------------------------------
  Total sales               221.5   218.1    1.6%
---------------------------------------------------


  Selver supermarkets         1.0     1.7   -39.8%

  Department stores          -1.2    -0.8   53.2%

  Car trade                   2.3     3.0   -23.2%

  Security segment           -0.1     0.1     -

  Real Estate                 2.2     2.5   -11.0%

  IFRS 16                    -0.4    -0.5   -25.4%
---------------------------------------------------
  Total profit before tax     3.8     5.9   -35.6%
---------------------------------------------------

In  the first quarter  of 2024, the consolidated  unaudited sales revenue of the
Group was 221.5 million euros. Compared to the first quarter of 2023, the growth
was 1.6%. The net loss for the reporting period was 1.5 million euros, which was
2.1 million  euros lower compared to  the profit of the  first quarter of 2023,
including  income tax of 5.3 million euros (5.3 million euros in 2023). The pre-
tax  profit  was  3.8 million  euros,  and  it  also  decreased  compared to the
comparable result of the previous year by 2.1 million euros.

At  a time when the retail trade volume index has been in decline for almost two
years,  and in the first months of the  reporting year, the sales revenue of the
entire retail trade area was in decline, even in current prices, the Group still
managed to increase its sales revenue. The increase in turnover was supported by
the  successful sales  of the  Group's car  segment. The security segment, which
expanded  last year, also contributed with  high sales growth numbers. The first
quarter  of the year has traditionally had the weakest profit due to the special
nature of the Group's business operations. This year, the result was affected by
a  more restrained increase in  sales revenue than in  the previous year, and by
the  great  price  pressure  caused  by  the economic recession in all segments,
especially  in Group's  largest business  segments. The  car market  as a whole,
including  the  Group's  car  segment,  was  characterised by improved inventory
levels  and bigger discount campaigns. In the Supermarkets segment, margins were
affected  by  the  higher  share  of  discounted products in customers' shopping
baskets.  The continued  rise in  service prices  increased input costs, to cope
with which we are looking for even greater efficiency in all business processes.
Labour costs increased by 5.6% in the first quarter of 2024, while the number of
employees increased by 1.7%.

In  order to enhance  the shopping convenience  of our customers,  the Group has
invested  over a long period  in the development of  online stores. In the first
quarter  of 2024, the new online store of Kaubamaja, launched on a new platform,
featured,  among  other  enhancements,  an  AI-based  search engine, an advanced
filtering system, and an extensive range of inspirational modules throughout the
site.  Brands now have enhanced opportunities  to strengthen their image through
the online store's brand shops. In the near future, customers will also have the
option to order clothes from the online store to try on in the physical store.

To  ensure better  quality and  price, Selveri  Köök, its  private label  in the
supermarket  segment,  actively  continues  product  development with the aim of
offering  customers a  wide variety  of new  flavours. At  the same  time, great
attention  is paid to reducing the salt, sugar, and fat content in the products.
At  the beginning of the year, several new products were added to Selveri Köök's
selection  - chicken  puree soup  and minced  meat soup,  ready meals, and snack
platters. Among the desserts, a new addition to the range is the cheerful spring
Selveri Tibu (Selver Chick) cake, which has already received a warm welcome from
customers.

In order to streamline processes, the Group began developing a central logistics
centre  in Maardu last year. Large-scale  construction works for the centre took
place  in the first quarter. Completion of the logistics centre is scheduled for
autumn  2024. Work continued  to install  a total  of 49 new public electric car
chargers  in 17 Selver parking  lots. Almost half  of them, i.e., 25, are ultra-
fast  chargers, which allow charging the amount  of energy needed to travel 100
kilometres in just a few minutes.

The  success of the Group's activities  and investment decisions is evidenced by
record  numbers  of  loyal  customers  joining  the Group's Partner Card loyalty
programme.  At the end  of the reporting  period, the number  of loyal customers
exceeded  731 thousand, marking a 3.7% growth  year-on-year. The Partner App has
been  downloaded by more than 220,000 Partner  Card clients. As an added feature
of  the Partner Card programme, the TKM Group's subsidiary TKM Finants AS offers
"pay  later" payment solutions to Partner Card customers. To promote responsible
lending  principles, TKM  Finants AS  joined the  Tax and Customs Board's X-Road
service for individual tax data at the end of March, enabling the lender to more
accurately  assess  customers'  creditworthiness  and  make  responsible  credit
decisions.

Selver supermarkets
The  consolidated sales revenue of the supermarket business segment in the first
quarter of 2024 was 146.4 million euros, decreasing by 0.5% 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 2024 was 0.40 thousand euros, decreasing
by  6.5% compared to  the previous  period. In  terms of  comparable stores, the
sales  revenue of goods per square metre  of sales area was 0.40 thousand euros,
decreasing  by 4.3% compared  to the  reference period.  In the first quarter of
2024, 9.3 million  purchases  were  made  from  Selver  stores, accounting for a
decrease of 2.5% compared to the previous year.

The consolidated pre-tax profit of the supermarkets segment in the first quarter
of 2024 was 1.0 million euros, 0.7 million euros less than in the previous year.
The  consolidated net profit  of the supermarket  segment was 0.6 million euros,
1.1 million euros less 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  0.5 million  euros higher than in the year
before.

Selver's  sales  results  have  been  affected  by  the  general downturn in the
Estonian retail environment. Retail trade volumes have seen a prolonged decline,
and  consumer confidence remains  low. The growth  of Selver's sales revenue has
slightly  lagged behind the segment due to a higher comparison base and a larger
proportion  of discounted products  in the shopping  basket. The comparison base
data is impacted by the closure of Järve Selver in March 2023 for renovation and
the preceding clearance sale of the largest store, the closure of WOW Selver ABC
in  January 2023, and the shutdown  of Punane Selver in  May 2023. The base data
excludes information from the Kurna Selver, which was opened in August 2023.

The economic outcomes for the first quarter of 2024 will be primarily influenced
by  reduced  sales  of  goods  and  a  decrease  in gross profit stemming from a
reduction  in gross  margin. To  mitigate the  effects of  diminished purchasing
power  and consumer  confidence, we  have increased  the discounts  offered and,
since  January,  have  initiated  the  permanently good standard prices project.
Within  this  framework,  we  consistently  offer  customers  approximately 650
products  at highly favourable prices. During the reporting period, the costs of
many  services  and  materials  have  risen,  leading  to  the  overall level of
operating  expenses, despite cost-saving efforts, being on par with the previous
year.  The ongoing  optimisation of  work processes  has allowed  us to maintain
labour costs at last year's level and achieve moderate wage growth.

Selver  plans to open two new stores this year - in Tallinn Rocca al Mare centre
and in Tartu, at Raadi. Both stores are slated for opening in the latter half of
the year. The focus remains on product assortment and process optimisation. As a
sustainability-oriented  company,  we  strive  to  base  all  our  activities on
conscious resource usage and contribute towards sustainable development. To this
end,  we  have  developed  a  sustainability  strategy  that  directs  our daily
operations.  As  a  company  valuing  openness  and  transparency,  we have also
published  our commitments  and objectives  on our  website. Our  emphasis is on
reducing  greenhouse  gas  emissions  from  direct  activities,  enhancing waste
recycling,  minimising  food  waste,  reducing  packaging use, shortening supply
chains, and developing fast and convenient digital solutions.

In  the Kulinaaria field,  active product development  continues with the aim of
offering  customers a wide variety of new  flavours, and great attention is paid
to reducing the salt, sugar, and fat content of products.

Department stores
The  sales revenue of the department stores segment in the first three months of
2024 was  24.0 million euros, 2.9% less than in  the same period of the previous
year.  The pre-tax loss of  the Kaubamaja department store  segment in the first
quarter of 2024 was 1.2 million euros. The pre-tax loss increased by 0.4 million
euros.

The  sales revenue of the  Kaubamaja department store per  square metre of sales
area was 0.30 thousand euros per month in the first three months, which is 4.6%
less  than in the same period last  year. The cooling of the economic situation,
which  began towards the end of the  fourth quarter of last year, persisted into
the  first quarter  of this  year, resulting  in a  more robust  winter discount
campaign  compared  to  the  previous  year,  which also impacted the results of
Kaubamaja.  At the same  time, it's important  to remember that  the base of the
first  quarter of  last year  was very  strong, with  growth percentages  in the
double  digits.  The  performance  of  the  Kaubamaja  Tallinn  sales  house was
adversely  affected by the ongoing construction of the Vanasadama tramway in the
centre  of  Tallinn,  and  the  closure  of  the Viru Keskus bus terminal, which
significantly reduced foot traffic. On 29 February, Kaubamaja launched an online
store  on  a  new  platform,  where  customer  usability  has been significantly
enhanced,  and the  AI-based recommendation  engine sets  the stage for improved
sales outcomes. On the new platform, the online shop forms a unified entity with
physical stores, where the key concepts include pre-shopping, fast delivery, and
the option to order from the online store and pay in the physical store, or vice
versa.

In  the first quarter of  2024, the sales revenue of  OÜ TKM Beauty Eesti, which
operates  the I.L.U. cosmetics stores, was 2.0 million euros, 16.6% more than in
the  same  period  in  2023. In  the  first quarter, the profit was 0.04 million
euros, which, compared to the profit of the comparable period of 2023, decreased
by  EUR 0.01 million. The reference base  was affected by Ülemiste I.L.U.'s one-
month business interruption for repairs in the previous period. Despite the fall
in  consumer  confidence,  sales  results  met expectations thanks to successful
promotional campaigns.

Car trade
The  sales revenue  of the  car trade  segment in  the first quarter of 2024 was
44.8 million euros. The sales revenue increased by 7.5% compared to the previous
year.  The consolidated pre-tax  profit of the  segment was 2.3 million euros in
the first quarter, which is 0.7 million euros weaker than last year's result.

In  the Baltic car market, economic uncertainty has hindered the purchase of new
cars,  leading to a considerable decline across  the Baltics for the first three
months.  Despite the  market's uncertainty,  the Group's  car segment has sold a
total  of 1,349 new passenger cars in the  first three months of the year, which
is  3.6% more  than  last  year.  The  market  downturn  has  necessitated price
campaigns  and other  marketing activities  better suited  to the current market
situation but have pressured sales margins.

An  important event of the first quarter was the launch of the Shkoda showroom by
the   Group's  Lithuanian  car  company,  Motus  Auto  UAB,  in  Vilnius.  Shkoda
consistently  maintains one  of the  three leading  positions in  the Baltic car
market, and the addition of Shkoda to the Motus Auto UAB brand portfolio supports
the  significant  growth  potential  of  the  Group's car business in Lithuania.
However,  the initial  costs of  the Shkoda  showroom were  incurred in the first
quarter, negatively affecting profits.

In  the spring,  the KIA  range will  be expanded  with an  updated model of the
popular  SUV, the  KIA Sorento.  Shkoda's model  lineup will  be enhanced  by the
completely  renewed mid-class passenger car, the Shkoda Superb, which has enjoyed
great sales success in the past, and the updated SUV, the Shkoda Kodiaq.

Security segment

The sales revenue of the security segment outside the Group in the first quarter
of  2024 was 4.5 million euros, increasing by  58.6% 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, compared  to the  same period  last year, it was 0.2 million
euros weaker.

The  results of the first quarter were most affected by the costs related to the
merger of the companies at the end of 2023. The negative economic environment is
particularly  impacting the field  of security technology,  where there has been
greater pressure on profit margins, which also affected the results of the first
quarter.   The  turnovers  of  all  business  areas  increased,  with  the  most
significant growth in the volume of services in the control centre, which almost
doubled.

Real estate
The  sales revenue  of the  real estate  segment outside  the Group in the first
quarter of 2024 was 1.7 million euros, increasing by 8.2% in comparison with the
first  quarter of  the last  year. The  pre-tax profit  of the  segment was 2.2
million  euros  in  the  first  quarter.  The  profit  decreased by 11.0% in the
reference period.

The  growth  of  the  segment's  sales  revenue  was  primarily supported by the
revitalised  commercial space  rental market  in the  centres, with  new tenants
added  to  the  rental  spaces  of  Tallinna  Kaubamaja Gallery, Tartu Kaubamaja
Centre,  and Viimsi Centre.  Despite the general  uncertainty characterising the
economic landscape, the number of visitors to the centres continues to increase.
The  growth in  the segment's  sales income  was also  contributed to by the car
wash, built as an extension of the petrol station at Raudkivi tee 1, leased to a
non-group  entity, situated  in the  immediate vicinity  of Peetri Selver, which
commenced operations last summer.

The  decrease in the segment's profit was largely due to the rise in the cost of
borrowing, triggered by the swift increase in the euro area interest rate, which
began  at the end of 2022 and impacted the segment's interest expenses with some
delay.  The majority of the  Group's loan portfolio is  concentrated in the real
estate  segment. Interest expense  has almost doubled  compared to the benchmark
from a year ago.

In  the second half of last year, TKM Kinnisvara AS began developing a logistics
centre  in Maardu  to meet  the needs  of the  TKM Group.  The total area of the
centre  is 17,200 m²,  and the  construction will  cost approximately 20 million
euros.  The construction of  the logistics centre  is funded through the Group's
own  resources and a bank  loan. A solar energy  park will be constructed on the
roof  of  the  logistics  centre,  the  energy  production of which will cover a
significant  part of the  building's electricity consumption.  The completion of
the  logistics centre is scheduled for autumn 2024. At the end of last year, TKM
Kinnisvara  AS and Enefit Volt commenced a partnership to install a total of 49
new  public electric car chargers in 17 Selver  car parks. Almost half of these,
i.e., 25, are ultra-fast chargers, enabling the charging of the amount of energy
needed to travel 100 kilometres in just a few minutes.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

-------------------------------------------------------------------------
                                                 31.03.2024   31.12.2023
-------------------------------------------------------------------------
  ASSETS
-------------------------------------------------------------------------
  Current assets

  Cash and cash equivalents                          39,754       42,064

  Trade and other receivables                        24,572       25,568

  Inventories                                        94,880       98,254
-------------------------------------------------------------------------
  Total current assets                              159,206      165,886
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  Non-current assets

  Long-term receivables and prepayments                 245          243

  Investments in associates                           1,804        1,732

  Investment property                                64,971       64,971

  Property, plant and equipment                     431,191      433,306

  Intangible assets                                  24,951       25,370
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  Total non-current assets                          523,162      525,622
-------------------------------------------------------------------------
  TOTAL ASSETS                                      682,368      691,508
-------------------------------------------------------------------------

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

  Borrowings                                         38,842       48,820

  Trade and other payables                          138,448      114,573
-------------------------------------------------------------------------
  Total current liabilities                         177,290      163,393
-------------------------------------------------------------------------
  Non-current liabilities

  Borrowings                                        266,665      258,857

  Deferred tax liabilities                            5,356        5,356

  Provisions for other liabilities and charges          517          526
-------------------------------------------------------------------------
  Total non-current liabilities                     272,538      264,739
-------------------------------------------------------------------------
  TOTAL LIABILITIES                                 449,828      428,132
-------------------------------------------------------------------------
  Equity

  Share capital                                      16,292       16,292

  Statutory reserve capital                           2,603        2,603

  Revaluation reserve                               115,840      116,521

  Retained earnings                                  97,805      127,960
-------------------------------------------------------------------------
  TOTAL EQUITY                                      232,540      263,376
-------------------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY                      682,368      691,508
-------------------------------------------------------------------------

CONDENSED  CONSOLIDATED  STATEMENT  OF  PROFIT  OR  LOSS AND OTHER COMPREHENSIVE
INCOME

In thousands of euros

  -----------------------------------------------------------------------------
                                                         3 months
                                                             2024 3 months 2023
  -----------------------------------------------------------------------------


   Revenue                                                221,503       218,083

   Other operating income                                     209           332



   Cost of merchandise                                   -162,090      -158,573

   Services expenses                                      -15,262       -15,895

   Staff costs                                            -27,294       -25,852

   Depreciation, amortisation and impairment losses       -10,610       -10,066

   Other expenses                                            -332          -393
  -----------------------------------------------------------------------------
   Operating profit                                         6,124         7,636
  -----------------------------------------------------------------------------
   Finance income                                             253             1

   Finance costs                                           -2,648        -1,806

   Share  of net  profit of  associates accounted for
   using the equity method                                     72            69
  -----------------------------------------------------------------------------
   Profit before tax                                        3,801         5,900
  -----------------------------------------------------------------------------
   Income tax expense                                      -5,312        -5,300
  -----------------------------------------------------------------------------
   NET PROFIT FOR THE FINANCIAL YEAR                       -1,511           600
  -----------------------------------------------------------------------------
   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       -1,511           600
  -----------------------------------------------------------------------------
 Basic and diluted earnings per share (euros)               -0.04          0.01

Raul Puusepp
Chairman of the Board
Phone +372 731 5000