Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the fourth quarter and twelve months of 2019

Teade

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  Segments (EURm)           Q4/19   Q4/18     yoy     12m/19   12m/18    yoy
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  Supermarkets              123,0   122,5    0,4%      469,4    450,1    4,3%

  Department stores          32,0    31,6    1,4%      102,8    100,9    1,9%

  Cars                       33,5    24,2    38,2%     130,4    114,9   13,4%

  Footwear                    2,6     2,6    0,1%        8,9      9,8   -9,6%

  Real Estate                 1,5     1,4    3,8%        5,8      5,4    5,7%
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  Total sales               192,6   182,4    5,6%      717,2    681,2    5,3%
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  Supermarkets                5,6     5,8    -3,0%      18,1     18,6   -3,0%

  Department stores           2,4     2,8   -17,2%       3,5      3,8   -7,3%

  Cars                        0,2     0,6   -65,0%       4,0      4,4   -9,2%

  Footwear                   -0,2     0,0   -694,4%     -1,2     -0,4   202,6%

  Real Estate                 6,6     2,3   186,3%      14,7     10,2   43,3%

  IFRS 16                    -0,4     0,0      -        -1,5      0,0     -
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  Total profit before tax    14,1    11,6    22,1%      37,7     36,7    2,5%
-------------------------------------------------------------------------------

In  the  fourth  quarter  of  2019, the  unaudited consolidated sales revenue of
Tallinna  Kaubamaja Group was 192.6 million euros,  exceeding the results of the
previous  year by  5.6%. The sales  revenue of  twelve months  was 717.2 million
euros,  showing  a  growth  of  5.3% compared  to  the  result of 2018, when the
comparable  sales  revenue  was  681.2 million  euros.  In the fourth quarter of
2019, the  Group's  unaudited  consolidated  net  profit was 14.1 million euros,
which  was 22.0% higher than the profit of the comparable period in the previous
year.  The Group's  net profit  was 31.1 million  euros in  2019, which is 2.3%
higher  than the previous year.  The pre-tax profit earned  in twelve months was
37.7 million  euros,  showing  a  2.5% increase  compared  to last year. The net
profit  was influenced by a dividend payment,  on which income tax in the amount
of  6.3 million euros was  calculated in the  first quarter of 2019, compared to
the  income tax of  6.7 million euros calculated  a year earlier. Accounting for
leases  in compliance with IFRS 16 (Leases)  was first introduced in 2019, which
resulted in net profit reduction by 1.5 million euros.

The  sales revenue growth slightly accelerated compared to the annual average in
the last quarter of 2019. In the fourth quarter, the Group's car segment greatly
contributed  to the sales revenue (38.2%), driven by the sale of KIAs as well as
the  successful sale of  Peugeots. In November,  Verte Auto, the Latvian company
belonging to the car trade segment, opened a completely new and fully functional
showroom  in Riga and started  to sell Shkodas, a  suitable addition to the brand
selection  of the Group's car segment. The  continued strong growth of 40% of e-
stores  compared to 2018 gives a reason to  rejoice. In 2019, no new stores were
opened  in the supermarkets segment; however, two Selver stores were refurbished
in  the fourth quarter. Due to temporary closing of the stores for refurbishing,
the  quarterly growth number of supermarkets  was lower compared to the previous
quarters. One-off investments in developments intended to generate income in the
future  - the refurbishing of Selver stores in the supermarkets segment, opening
a  Shkoda showroom in the car segment, and the development of the cash collection
service  in Viking Security  in the department  store segment -  caused a slight
decrease  of the pre-tax profit in these  segments compared to the period a year
earlier.  In 2019, the supermarkets and the Kaubamaja department stores improved
their  gross  profit  margin,  although  redirecting  the business model to more
extensive  fleet sales in the car segment, which has a significant weight in the
Group's  business, also influenced the margin on the Group's consolidated level.
The labour costs of the Group increased by 8.0% in the year, keeping up with the
growth of the average wage in Estonia.

In   the  fourth  quarter,  Pelgulinna  and  Jõhvi  Selver  underwent  extensive
renovations.  The SelveEkspress service was  made available in 52 Selver stores.
The  service area of e-Selver expanded twice in 2019 and by the end of 2019, the
service  covered the entire city of Tallinn  and Harju County, Rapla and part of
Rapla  County, and the city of Pärnu and its close proximity. From the beginning
of  2020, the e-Selver  service is  offered in  Tartu, which has turned e-Selver
into  the  e-store  with  the  largest  assortment of foodstuffs and the largest
service  area in Estonia.  In addition, the  aforementioned new fully functional
Shkoda  showroom  in  Riga  was  completed.  As  an  important development of the
reporting  period,  the  construction  works  of  the Kulinaaria central kitchen
production  building  in  Tallinn  are  in  progress.  The completion of the new
Kulinaaria  production plant  and the  exchange of  the business software of the
central  kitchen is planned for the first half of 2020. An additional plan is to
renovate  the older production building after the completion of the new building
and  the entire refurbished production complex should  be finished by the end of
2020. With  the extension of the production  area, new products in the ready-to-
eat  food  category  are  expected  to  be launched under the Estonians? beloved
Selveri  Köök trademark and  new interesting pastry  products under the Van Kook
trademark.  In 2019, the  business software  of real  estate management  and the
footwear  segment were  renewed and  the focus  was on  the improvement  of user
convenience  of e-stores and speed of delivery. In the footwear segment, the SHU
stores in Kristiine Keskus, Võru Kagukeskus, and Tartu Kaubamaja were renovated.
In  the first  half of  2019, rearrangement of  all the  Group's food stores was
undertaken  to  bring  them  into  compliance  with  the  amendment  of law that
restricted the visibility of displayed alcohol in stores.

More  attention is paid  to responsible and  sustainable behaviour and promotion
thereof  in the companies  of the Group.  Special attention was  paid in 2019 to
reducing  the use of  packaging, especially plastic  bags, in stores. During the
year,  more  than  1 million  less  plastic  bags  have been circulated from the
Group's stores than in 2018. In addition to reducing the amount of packaging, we
also  consider it important that the packaging in circulation is environmentally
friendly, also preferably made from recycled materials. In 2020, Selver plans to
replace  existing  food  boxes  with  new,  greener  ones made from recycled and
biodegradable materials in all 53 stores across Estonia.

From 1 January 2019, the Group has applied the new mandatory financial reporting
standard  IFRS 16 (Leases) in  lease cost accounting.  Pursuant to the standard,
leased assets and liabilities are recognised in the balance sheet at the present
value  of lease payments and the depreciation on the leased assets and estimated
interest  costs on lease liabilities in  the income statement. As at 31 December
2019, the  assets  leased  in  accordance  with  IFRS  16 were recognised in the
balance  sheet of the  Group in the  present value of  lease payments of 99,126
thousand  euros  and  corresponding  calculated  liabilities of 100,630 thousand
euros. The impact of IFRS 16 on the income statement is as follows:

-------------------------------------------------------------------------------
 in thousands of euros                         4(th) quarter 2019 12 month 2019
-------------------------------------------------------------------------------
 Decrease in other operating expenses                       4,261        17,001

 Increase in depreciation                                  -4,130       -16,474
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 Increase in operating profit                                 131           527
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 Calculated interest expense on lease
 liabilities                                                 -508        -2,031
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 Total decrease in the net profit                            -377        -1,504
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Selver supermarkets

The  consolidated sales  revenue of  the supermarkets  segment was 469.4 million
euros,  increasing by  4.3% in comparison  with the  same period  last year. The
consolidated  sales  revenue  of  the  fourth  quarter  was 123.0 million euros,
growing  by 0.4% compared  to the  same period  of the  previous year. At Selver
stores,  40.3 million purchases  were made  in 2019, exceeding  the year-on-year
result  by  3.8%. In  the  fourth  quarter  of  2019, the  pre-tax profit of the
supermarkets  segment was 5.6 million euros, which is 3.0% lower than the result
of  the  previous  year.  The  consolidated  pre-tax  profit of the supermarkets
segment  was 18.1 million euros in 2019, which  also marks a 3% decrease year on
year.  The net profit  was 14.1 million euros,  which is 0.4 million euros lower
than the result of the previous year. The difference between net profit and pre-
tax  profit is  due to  income tax  paid as  dividends, i.e.  income tax paid on
dividends  was 0.1 million euros lower in 2019 compared to the year earlier. The
lower  tax load on dividends is due  to the amendment regulating the taxation of
dividends,  which allows applying a  lower tax rate on  one third of last year's
dividends.

The  temporary closing  of two  stores, Jõhvi  Selver and Pelgulinna Selver, for
refurbishing influenced the results of the fourth quarter and the year 2019. The
comparison  basis of the fourth quarter is  partly lower by two stores that were
added  in the last quarter of 2018. The results of the sales of fresh foodstuffs
as  well as the more efficient management of stocks had a positive impact on the
sales revenue. In the last quarter, the fear of consumers of catching a Listeria
infection  from  fish  products  influenced  the  sales  of fish products, which
account  for a large portion of consumers?  basket of products, despite the fact
that Selver purchases products that meet health requirements and both Selver and
Kulinaaria constantly monitor the quality of goods on sale or moving through the
production. Profit earning is influenced by the growth of sales revenue and more
efficient  management  of  goods.  Investments  have a positive impact, allowing
cutting  administrative  costs  and  employees?  working  hours.  To balance the
decrease in the employees? working hours, their wages were adjusted. The results
of  the annual report were also influenced  by the amendment of the Alcohol Act,
due  to which  significant expenses  were incurred  during the  rearrangement of
sales floors, and one-time expenses made in the renovation of two stores.

E-commerce  shows good results - the sales  revenue grew by 34.7% in a year. The
service area of e-Selver expanded twice in 2019. By the end of 2019, the service
covered  the entire city  of Tallinn and  Harju County, Rapla  and part of Rapla
County,  and  the  city  of  Pärnu  and  its close proximity. In addition to the
assortment  of goods  offered in  regular Selver  stores, e-Selver offers larger
household appliances and other devices. From the beginning of 2020, the e-Selver
service  was introduced to cover Tartu and  its close proximity. e-Selver is the
e-store  with the largest  assortment of foods  and the largest  service area in
Estonia.

Department stores

The  Kaubamaja business segment earned a sales revenue of 102.8 million euros in
2019, which  is 1.9% more  than last  year in  the same  period. The  e-store of
Kaubamaja  grew by 41.5% in a year. The  pre-tax profit of the department stores
was  3.5 million euros in 2019, which was 7.3% lower year on year. In the fourth
quarter,  the pre-tax  profit of  the department  stores was  2.4 million euros,
which  result  is  17.2% lower  than  the  comparable period. In 2019, the sales
results  of  the  department  stores  were  influenced by very successful larger
campaigns.  The Osturalli campaigns organised in spring and autumn were the most
successful  of all time.  The Ilu Aeg  campaign carried out  in the beginning of
September  brought the best  results ever. Although  the beginning of the autumn
season  in  September  was  very  positive,  the expected winter weather did not
appear  in the  last quarter  and the  warmer-than-average winter had a negative
impact  on the result of the fourth quarter of Kaubamaja. Still, the stores were
better at managing inventories and growing the margin in 2019, which resulted in
a positive effect on the total annual profit.

In  the fourth quarter of 2019, the sales  revenue of OÜ TKM Beauty Eesti, which
operates the I.L.U. cosmetics stores, was 1.6 million euros, showing a growth of
4.5% compared  to the same period in  2018. The profit was 0.07 million euros in
the  fourth  quarter,  which  was  37.7% higher  than  the  result earned in the
comparable  period of  2018. The sales  revenue was  4.9 million euros in 2019,
growing  by 5.8% on  the year-on-year  basis. The  loss earned  was 0.13 million
euros  in 2019, which was 0.04 million  euros lower than the  loss earned in the
comparable  period of 2018. In 2019, the focus was  on the launch of the e-store
and  on digital marketing.  The brand identity  was refreshed in connection with
the 10(th) anniversary of I.L.U. stores.

Car trade

The  sales revenue of the car trade segment was 130.4 million euros in 2019. The
sales  revenue exceeded the revenue earned last year by 13.4%, wherein the sales
revenue generated by the sales of KIAs grew by 9.6% in a year. The sales revenue
of  33.5 million euros earned in  the fourth quarter exceeded  the result of the
previous year by 38.2%. The sales revenue of KIAs grew by 21.4% year on year and
the  sales of Peugeot cars increased almost by one third. In November, Shkoda was
added  to the product portfolio  as a new car  brand; 42 Shkoda cars were sold in
the  last two months  of the year.  In 2019, the Group's  car trade segment sold
5,704 new  vehicles, of which 1,353 were sold in the fourth quarter. The pre-tax
profit  of the car trade  segment was 4.0 million euros  in 2019, which is 9.2%
lower  than the profit earned  a year earlier. The  pre-tax profit of the fourth
quarter  of 2019 was 0.2 million  euros, which was  0.4 million euros lower than
the pre-tax profit earned in the fourth quarter of 2018.

In  summary, the share  of companies offering  full service and short-term lease
among  the  customers  of  new  cars  was clearly growing in 2019. This customer
segment is mostly responsible for the fleet and wholesale transactions. This, in
turn,  translates into the growth of the  number of vehicles sold, turnover, and
market  share; however, these sales decrease  profit margin, which is clear from
the  results of the Group's car trade segment. Furthermore, the sales results of
new Opel vehicles by Viking Motors in Tallinn worsened, showing a clear downward
trend  that has  become obvious  following the  change in  the importer  of Opel
vehicles.  The  changed  business  policy  and  strategy of the new importer has
caused  a continued decrease of the market share  of Opel cars in the region and
forced  the  Group's  car  segment  to  cease  the  sales  of Opel passenger and
commercial  cars in future  as an unprofitable  business. The follow-up services
for  Opel vehicles will be provided in future. The Group opened a completely new
and  fully functional Shkoda  showroom with another  showroom specially built for
the  sale of used  cars, which is  one of a  kind in Latvia,  by Verte Auto, the
Latvian  subsidiary  of  the  Group's  car  segment in the beginning of November
2019. The  popularity of Shkoda's vehicles among  the customers of Baltic regions
is  well  known  and  it  is  good  to  conclude  that  the  Group's car segment
successfully  replaced the Opel brand with the  Shkoda brand, which shows a great
potential.

Footwear trade

The  sales revenue of the footwear trade segment was 8.9 million euros in 2019,
showing  a decrease of 9.6% compared  to the previous year.  The pre-tax loss of
the  segment was 1.2 million euros in 2019, growing by 0.8 million euros year on
year. The sales revenue of the fourth quarter was 2.6 million euros, a growth of
0.1% compared  to the sales revenue of the same period last year, which, for the
first  time, has put a  stop on the declining  turnover of the past three years.
The  pre-tax loss  of the  fourth quarter  was 0.2 million  euros, which is 0.2
million euros weaker compared with the result of the same period of the previous
year.  The net loss of  the fourth quarter was  0.2 million euros. The result of
the footwear trade segment in 2019 was affected by store repositioning plans and
related  business decisions,  as well  as the  introduction of  renewed business
software  and logistics service. In the beginning  of 2019, a change was made in
the  company - the central warehouse was  closed and a new principle was applied
to  the logistics service. During the year,  the SHU stores in Kristiine Keskus,
Võru  Kagukeskus,  and  Tartu  Kaubamaja  were  renovated.  The  concepts of the
assortment  and sales environments of ABC KING  and SHU were refreshed and a new
visual  identity of  SHU was  developed. In  the second  half of the year, a new
business  software  system  was  introduced  and  the cash register systems were
replaced  in the stores. It is planned to continue with the renovation of stores
in  2020 and implement  the changes  in the  assortment and sales environment at
stores developed in 2019.

Real estate

The  sales revenue earned in the real  estate segment outside the Group was 5.8
million euros in 2019. The sales revenue grew by 5.7% compared to last year. The
sales  revenue of the segment outside of  the Group was 1.5 million euros in the
fourth  quarter, growing by 3.8% compared to the same period last year. The pre-
tax profit of the real estate segment was 14.7 million euros in 2019. The profit
grew  by 43.3% year on year.  The pre-tax profit of  the segment was 6.6 million
euros  in the fourth quarter, which exceeded  the result of the same period last
year  by  4.3 million  euros.  The  Latvian  real estate company that leased the
commercial  space to a party outside of the Group influenced the sales growth of
the  segment. Other companies of  the Group's real estate  segment also showed a
stable sales growth. The profit of the segment within the Group was increased by
the new Shkoda car showroom and the showroom intended for used cars completed and
taken  into use in Latvia at the end of  the year, the reduction of costs in the
Latvian  real  estate  company,  and  the  sales  income  from  the  sale of the
registered  immovable intended  for the  development of  residential property in
Tallinn.  At  the  end  of  the  year,  the annual revaluation of investments in
property  was conducted, which did not have any significant effect on the profit
of  the segment. The development of the  additional Latvian car showroom and the
store of Kaubamaja department store in Tallinn will continue in 2020.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros?

-------------------------------------------------------------------------
                                                 31.12.2019   31.12.2018
-------------------------------------------------------------------------
  ASSETS
-------------------------------------------------------------------------
  Current assets

  Cash and cash equivalents                          40,629       37,235

  Trade and other receivables                        16,904       16,093

  Inventories                                        78,305       78,212
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  Total current assets                              135,838      131,540
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  Non-current assets

  Long-term trade and other receivables                 114          113

  Investments in associates                           1,721        1,738

  Investment property                                60,458       59,866

  Property, plant and equipment                     319,192      212,687

  Intangible assets                                   4,990        5,133
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  Total non-current assets                          386,475      279,537
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  TOTAL ASSETS                                      522,313      411,077
-------------------------------------------------------------------------

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

  Borrowings                                         46,448       26,002

  Trade and other payables                           89,831       90,775
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  Total current liabilities                         136,279      116,777
-------------------------------------------------------------------------
  Non-current liabilities

  Borrowings                                        157,876       68,313

  Provisions for other liabilities and charges          322          370
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  Total non-current liabilities                     158,198       68,683
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  TOTAL LIABILITIES                                 294,477      185,460
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  Equity

  Share capital                                      16,292       16,292

  Statutory reserve capital                           2,603        2,603

  Revaluation reserve                                93,496       95,587

  Currency translation differences                     -149         -149

  Retained earnings                                 115,594      111,284
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  TOTAL EQUITY                                      227,836      225,617
-------------------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY                      522,313      411,077
-------------------------------------------------------------------------

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros

-------------------------------------------------------------------------------
                                       IV quarter    12 months
                      IV quarter 2019     2018          2019     12 months 2018
-------------------------------------------------------------------------------


 Revenue                      192,614       182,352      717,223        681,181

 Other      operating
 income                         4,431           982        5,113          2,175



 Cost of sales               -142,372      -132,830     -535,410       -507,182

 Other      operating
 expenses                     -11,435       -15,189      -41,917        -56,033

 Staff costs                  -20,448       -19,461      -73,113        -67,710

 Depreciation,
 amortisation     and
 impairment losses             -7,685        -3,227      -30,743        -13,426

 Other expenses                  -233          -844         -715         -1,673
-------------------------------------------------------------------------------
 Operating profit              14,872        11,783       40,438         37,332
-------------------------------------------------------------------------------
 Finance income                     0             0            1              1

 Finance costs                   -767          -237       -2,982           -810

 Finance   income  on
 shares of associates              29            27          203            214
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 Profit before tax             14,134        11,573       37,660         36,737
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 Income tax expense               -70           -49       -6,523         -6,299
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 NET PROFIT FOR THE
 FINANCIAL YEAR                14,064        11,524       31,137         30,438
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 Other  comprehensive
 income:

 Items  that will not
 be      subsequently
 reclassified      to
 profit or loss

 Revaluation of land
 and buildings                      0        15,266            0         15,266
-------------------------------------------------------------------------------
 Other comprehensive
 income for the
 financial year                     0        15,266            0         15,266
-------------------------------------------------------------------------------
 TOTAL COMPREHENSIVE
 INCOME FOR THE
 FINANCIAL YEAR                14,064        26,790       31,137         45,704
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Raul Puusepp

Chairman of the Board

Phone +372 731 5000