Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the second quarter and first six months of 2022

Teade

Segments (EURm)           Q2/22   Q2/21   Change   6m/22   6m/21   Change
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  Supermarkets              143.8   141.2    1.8%    283.3   275.1    3.0%

  Department stores         26.8    20.8    28.7%    48.5    38.8     25.0%

  Cars                      38.6    41.8    -7.6%    72.6    78.0     -6.9%

  Security                   2.3     2.2     2.5%     4.5     3.7     24.2%

  Real Estate                1.5     1.2    30.8%     3.0     2.4     24.5%
-----------------------------------------------------------------------------
  Total sales               213.0   207.2    2.8%    411.9   398.0    3.5%
-----------------------------------------------------------------------------


  Supermarkets               3.1     4.9    -35.7%    5.4     6.3    -14.9%

  Department stores          2.2     1.3    61.9%     0.5    -0.9    -156.2%

  Cars                       3.1     2.2    44.0%     5.3     3.4     55.2%

  Security                   0.0     0.0    -37.5%    0.0     0.0    -600.0%

  Real Estate                2.8     2.4    14.7%     5.4     5.0     9.2%

  IFRS 16                   -0.6    -1.0    -37.9%   -1.0    -1.7    -40.1%
-----------------------------------------------------------------------------
  Total profit before tax   10.7     9.9     7.7%    15.6    12.1     29.0%
-----------------------------------------------------------------------------

In  the second quarter of 2022, the  consolidated unaudited sales revenue of the
Group was 213.0 million euros, which was 2.8% more than the sales revenue of the
same  period in 2021. The sales revenue in the first half of the year was 411.9
million euros, showing a growth of 3.5% compared to the result of the first half
of  2021, when the sales revenue was  398.0 million euros. In the second quarter
of  2022, the Group's unaudited consolidated  net profit was 10.7 million euros,
which  is 7.7% higher than the  profit of the comparable  period in the previous
year.  The Group's net profit  of the first six  months of 2022 was 11.1 million
euros, which was 43.4% higher than the result of the previous comparable period.
The  pre-tax profit earned in in the  first half of 2022 was 15.6 million euros,
showing  a 29.0% increase compared to last year.  Net profit was affected by the
dividend  payment, from which 4.5 million euros  of income tax was calculated in
the first quarter of 2022; 4.3 million euros of income tax was calculated a year
before.

Segments contributed quite differently to the growth of the sales revenue of the
Group  in the second quarter. The highest revenue growth (30.8%) was achieved by
the  real estate  segment that  was affected  by corona  restrictions in  in the
second quarter of 2021, which, however, has a small impact on the total sales of
the  Group. For the same  reason, the sales revenue  of the Kaubamaja department
store  segment grew strongly. The growth of the sales revenue of the supermarket
segment  slowed down  in the  second quarter  due to  the change in the purchase
behaviour  of customers due  to the startling  price increase. Sales  in the car
trade  segment of the Group, which was struggling with supply chain issues, fell
slightly.  At the end  of the quarter,  in addition to  supply chain issues, the
general  cooling of the car  market was evident. The  cost base of the Group was
affected  by fuel and electricity costs  with rapidly increasing prices and wage
costs  that increased under the pressure of  price growth. The Group was able to
maintain  a strong sales margin,  mainly thanks to the  car trade segment, where
the limited availability of cars allowed for more profitable pricing.

On 16 June, the new Priisle Selver with a total area of 1,500 m(2) was opened in
the  Lasnamäe district in Tallinn.  The Priisle Selver is  located on the ground
floor  of the ten-story new development Priisle Kodu. The format of the store is
a  supermarket, with an assortment of  approximately 10,000 articles of food and
consumer  goods. This  year, it  is planned  to open  another supermarket and to
renovate  one  store  as  well.  In  addition,  there  are  plans  to expand the
SelveEkspress self-service solution to all Selver ABC stores. The focus is still
on  updating the  platforms of  the e-stores,  for which  demand is growing, and
developing  services. Construction work is in the  final stages to built a solar
park  on the roof of  the Pirita Selver building,  where electricity is used for
own consumption. A similar park is planned to be built on the roof of the Viimsi
Centre  in the near  future. Design work  for a new  Selver store is underway in
Tartu. The Kulinaaria central kitchen, which was thoroughly updated and expanded
last  year, entered another new product segment - the breakfast category. At the
beginning  of the  reporting period,  an in-house  Bepco box  transport line was
launched  at the  Kulinaaria factory,  which allows  moving finished products in
boxes  along  the  conveyor  belt  directly  to the goods issuing warehouse. The
Kulinaaria  automation  project  in  cooperation  with TalTech, which started in
2019, will be continued from autumn. One of the major renovation projects of the
sales  space  of  the  first  half  of  2022 was  the  opening  of the renovated
Naistemaailm (Women's department) in the Kaubamaja Tallinn sales building in the
first  quarter, where both the physical  environment and the selection of brands
were updated. In accordance with the strategic decision to stop selling shoes in
stand-alone  shoe stores, all ABC King and SHU  stores were closed by the end of
the second quarter.

The loyalty program buy-now-pay-later Partner Kuukaart functionality has been on
the  market for almost two years now. With this functionality, the customer can,
immediately  after  opening  the  purchase  limit  in  self-service, pay for all
purchases  made in the Group's retail stores  and e-shops in the following month
with  one  invoice.  Nearly  16 thousand  loyal  customers  actively  used  this
functionality  as of the  end of the  reporting period. TKM  Finants AS, a 100%
subsidiary  of the  Group, has  been issued  a creditor's  licence. It  has been
decided  to consolidate the financial services  of the Group into one subsidiary
company,  TKM Finants AS. In this regard, in  August of this year, it is planned
to  transfer the facility related to  the Kuukaart service of Tallinna Kaubamaja
Grupp AS to TKM Finants AS. This change does not entail any changes in the terms
and conditions of the contracts concluded with Kuukaart customers. It is planned
to  expand the portfolio of financial services  offered by TKM Finants AS and to
start  offering payments  by instalments  to private  individuals in  the retail
segments of the Group.

Selver supermarkets

The  consolidated sales revenue  of the supermarket  business segment was 283.3
million  euros in the  first half of  the 2022, increasing by 3.0% in comparison
with  the same period  of last year.  The consolidated sales  revenue was 143.8
million  euros in the second quarter,  increasing by 1.8% in comparison with the
same  period of last year. In the first six months and during the second quarter
of  2022, the average sales revenue per square  metre of selling space was 0.40
thousand euros per month, which is respectively 3.1% and 0.3% higher than during
the  same periods last  year. From the  point of view  of comparable stores, the
revenue  from the  sale of  goods per  square metre  of selling  space was 0.41
thousand  euros in both  the first half  of the year  and in the second quarter,
increasing  by  2.8% and  1.3% respectively,  compared  to the reference period.
During  the first  six months  of 2022, 21 million  purchases were made from the
stores, which was 2.5% more than in the reference year.

In  the second quarter of 2022, both the pre-tax profit and net profit were 3.1
million euros, which is 1.7 million euros less than in the reference period. The
consolidated  pre-tax profit of the supermarkets segment in the first six months
was  5.4 million euros,  dropping by  0.9 million euros  in comparison  with the
previous  year. In the first  six months, the net  profit was 3.3 million euros,
which  signifies a decrease of 1.5 million euros in comparison with the previous
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
0.6 million  euros higher  than in  the year  before. The  entire revenue of the
supermarket segment was earned in Estonia.

The  financial  results  of  the  first  half  of  the year were affected by the
increased turnover of the new Priisle Selver store opened in Tallinn in June, as
well  as by the one-time costs and investments made for the opening. The results
of  the supermarket  segment have  been affected  by accelerated  inflation, the
Ukrainian crisis, COVID-19, and the changed consumption habits of customers. The
basis  for comparison for the first half  of 2021 is lower due to the short-term
closure  of stores that accompanied the rebranding process of Selver ABC stores.
The  basis for comparison is higher due  to one closed store and a significantly
higher  e-commerce and manufactured goods base  on the crest of the 2021 crisis.
In  the second  quarter, the  sales revenue  of e-commerce  and industrial goods
remained  below the level of  the previous year. The  non-group sales revenue of
the  Kulinaaria central  kitchen, which  is part  of the supermarket segment and
sells  more  than  90% of  its  production  to  store  chains  within the Group,
increased  by  39% in  the  second  quarter  compared  to the same period in the
previous  year. The  turnover growth  of the  Kulinaaria of the reporting period
still  reflects the decline in turnover due to the coronavirus restrictions that
were still in force in the comparison period. However, marketing campaigns aimed
at  new products  have contributed  to turnover  growth. The  party food segment
continues to grow rapidly towards pre-pandemic levels.

Influenced by accelerated inflation, the volume sales of food products turned to
a  decline in  the second  quarter. 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 is largely due to the
increase  in the  price of  electricity, gas,  and fuel, which has significantly
increased  the  operating  costs  of  companies,  which, in turn, are inevitably
transferred  to the final prices of all products and services, regardless of the
field  of  activity.  In  order  to  alleviate the price increase for customers,
Selver  continues with a  frozen price campaign  for the third  year, within the
framework  of which the  prices of more  than 400 products have  been fixed. The
Lidl  store chain, which  entered the Estonian  market with eight  stores in the
first  quarter  of  this  year,  has  not  had a significant impact on the sales
results of Selver stores. In order to fight the price pressure, Selver has taken
actions  to increase efficiency. Investments  in self-checkouts and IT solutions
have  had  a  positive  impact  on  labour  efficiency  and the basic process of
handling  goods.  The  economic  results  are  also  affected by the significant
increase in the price of energy carriers, especially electricity, resulting in a
significant  increase in the operating costs  of the segment (adding 2.7 million
euros to the costs).

Selver  plans to open one new store and renovate one store in the second half of
this  year. The focus  is still on  the development of  the e-store service, for
which  there  is  an  increasing  demand.  While  the  SelveEkspress  service is
currently  available  to  customers  in  all  Selver  stores and some Selver ABC
stores,  the goal is to offer the self-service solution in all Selver ABC stores
by the end of this year.

Department stores

The  sales revenue  of the  Kaubamaja department  stores business segment in the
first six months of 2022 was 48.5 million euros, exceeding the sales of the same
period  last year by  25.0%. The sales revenue  of the second  quarter was 26.8
million  euros, which was 28.7% better than last year. The pre-tax profit of the
Kaubamaja  department stores  segment in  the first  six months of 2022 was 0.5
million  euros. Pre-tax  profit increased  by 1.4 million  euros compared to the
previous  year. In the second quarter, the pre-tax profit was 2.2 million euros,
which was 62.0% better than the comparable period last year.

The  six-month average sales  revenue of Kaubamaja  department stores per square
metre  of selling  space was  0.3 thousand euros  per month, which is 28% higher
than  in the  same period  last year.  The result  of the  department stores was
positively  affected by  the better  state of  the stocks,  which is why the big
discount  campaign was smaller  than last year,  when the department stores were
closed  for more than a month. One of  the biggest news for the customers of the
Kaubamaja  department stores in  the first half  of 2022 was the  opening of the
renovated  Naistemaailm in  the Kaubamaja  Tallinn sales  building in  the first
quarter,  where both the  physical environment and  the selection of brands were
updated.  A strong focus on the home and home goods continues to be reflected in
consumption  trends  and  in  the  behaviour  of  the customers of the Kaubamaja
department stores. The result of the Kodu Aeg campaign, which was carried out in
the  first quarter, has only been better once - last year. The renewed Ilumaailm
section  has  also  been  very  well  received  by  customers - good results are
evidenced  by daily sales and the results of the Ilu Aeg campaign in spring were
the best in the last five years.

In  the second quarter of 2022, the sales  revenue of OÜ TKM Beauty Eesti, which
operates the I.L.U. cosmetics stores, was 1.5 million euros, which is 49.0% more
than  in the second quarter of 2021. The profit for the second quarter was 0.04
million  euros, which was  0.02 million euros higher  compared to the comparable
period  of 2021. The  sales revenue  of the  first six  months of  2022 was 2.9
million  euros, which is 41.8% more than during  the same period of 2021. In the
first  six months of 2022, profit was 0.02 million euros, which was 0.05 million
euros more than during the comparable period in 2021.

The operation of stores compared to 2021 was normal and expected, as none of the
stores  had to be closed due to the virus and the restrictions overall were more
relaxed.  Sales revenue  in the  second quarter  was boosted by attractive sales
campaigns  and  a  significant  increase  in  the number of visitors to shopping
centres.  Ukrainian war refugees who  arrived in the country  also played a part
here.

The  sales revenue of the  shoe stores operated by  TKM King AS, reported in the
department  stores segment from 1 April 2021, was 2.0 million euros in the first
half  of 2022. The  profit for  the first  half of  2022 was 0.02 million euros,
which  was 0.6 million  euros higher  compared to  the same  period in 2021. The
sales  revenue was 0.7 million euros in the second quarter of 2022, decreased by
57.3% compared  to the same period last year. Due to a more successful clearance
than  planned, the profit for  the second quarter was  0.4 million euros. At the
end  of the quarter, in accordance with the  strategy of the Group, all ABC KING
and  SHU stores were  closed, the lease  agreements with the centres terminated,
and  the employees of the stores laid off, meaning TKM King AS now only operates
in  the field of importing footwear. The merger  of Selver AS and TKM King AS is
planned  to  be  carried  out  in  2022, the  aim of which is to consolidate the
imports  of both  footwear and  other industrial  goods, mainly intended for the
supermarket segment, to Selver.

Car trade

The  sales revenue of the car trade segment for the first half of 2022 was 72.6
million  euros, decreasing  by 6.9% compared  to the  same period last year. The
sales  revenue of 38.6 million euros in  the second quarter was 7.6% weaker than
the  sales revenue of the  second quarter of 2021. During  the first six months,
2,638 new  vehicles  were  sold,  1,361 of  them  in the second quarter. The net
profit of the segment in the first half of 2022 was 4.8 million euros, exceeding
the  profit of the  same period of  the previous year  by 1.7 million euros. The
pre-tax  profit of the segment in the  first half of 2022 was 5.3 million euros,
exceeding  the profit for the first half  of 2021 by 1.9 million euros. The pre-
tax  profit of the second  quarter of 2022 was 3.1 million  euros, which is 1.0
million euros more than the profit of the same period of the year before.

The  ongoing supply chain crisis in the world  and the war in Ukraine, which has
made  the situation even worse, mean that  car warehouses are empty and there is
little hope of the situation getting better in the near future. The availability
of  KIAs imported by the Group to  the Baltic countries has been slightly better
than the availability of new vehicles from Peugeot and Shkoda, but the latter has
still  significantly slowed  down the  growth of  the car  sales revenues of the
Group.  Due to the volatile market situation,  the Group has decided to slightly
postpone  the construction of  new showrooms to  monitor and evaluate changes in
the global economy.

We  expect new electric cars to be added to  the model range, such as the Kia e-
Niro  and the KIA EV-6, which has received a lot of positive feedback around the
world.

Security segment

The  non-group sales revenue of the security  segment in the first half of 2022
was  4.5 million euros,  increasing by  24.2% compared to  the same  period last
year.  The pre-tax profit of the segment in the first half of the year was 0.03
million euros, increasing by 0.04 million euros compared to the same period last
year.  The non-group sales revenue of the segment in the second quarter of 2022
was 2.3 million euros, increasing by 2.5% compared to the same period last year.
The  pre-tax profit of the second quarter of the segment was 0.03 million euros,
decreasing by 0.02 million euros compared to the same period last year.

Cash  transport  and  control  centre  services  showed  faster growth. The only
decline  was in  the field  of technical  projects, where  turnover decreased by
nearly  a third due to delays in projects and supply chain issues. Profitability
continues  to be negatively affected by labour shortages and high energy prices.
The  increase in  fuel prices  reduced the  profit by  0.05 million euros in the
first half of the year.

Real estate

The  non-group sales revenue of the real estate segment was 3.0 million euros in
the  first six months of 2022. Sales  revenue increased by 24.5% compared to the
same  period last year. The non-group sales revenue of the segment in the second
quarter  was 1.5 million euros. Sales revenue increased by 30.8% compared to the
previous  year. The pre-tax profit of the  real estate segment in the first half
of  2022 was 5.4 million euros, the profit increased by 9.2%. The pre-tax profit
of  the  second  quarter  of  the  segment was 2.8 million euros. Pre-tax profit
increased by 14.7% in the comparison period.

The  noticeable increase  in the  sales revenue  and profit  of the  segment was
mostly  achieved thanks to the effect of the temporary rent discounts granted to
tenants  during the period of the restrictions  imposed to prevent the spread of
the  coronavirus,  but  the  opening  of  the  reconstructed  business centre in
Salaspils in Latvia also had a significant impact. In addition, new tenants have
been  added to the Tartu  Kaubamaja shopping centre. In  the second quarter, the
number  of visitors of  shopping centres almost  reached the pre-pandemic level.
The  behaviour of customers  shows that the  effect of online shopping resulting
from  the  coronavirus  restrictions  on  regular  trade  has  been shorter than
expected,  and customers  still highly  value high-quality face-to-face service.
The  number of visitors to  the Viimsi Centre was  affected by the repair of the
Randvere-Rohuneeme  roundabout and the road  section between Randvere and Aiandi
road at the end of the second quarter. During peak hours, a drop of up to 10% in
visitors can be observed.

During the reporting period, real estate companies have made investments to more
accurately  measure and control the energy consumption of technical systems; for
example,  the  ventilation  system  in  the  Tartu  Kaubamaja shopping centre is
controlled using CO(2) meters. Construction work is in the final stages to build
a  solar park on  the roof of  the Pirita Selver  building, where electricity is
used  for own consumption. A similar park is  planned to be built on the roof of
the  Viimsi Centre  in the  near future.  Design work  for a new Selver store is
underway in Tartu.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

-------------------------------------------------------------------------
                                                 30.06.2022   31.12.2021
-------------------------------------------------------------------------
  ASSETS
-------------------------------------------------------------------------
  Current assets

  Cash and cash equivalents                          13,546       29,981

  Trade and other receivables                        19,011       20,673

  Inventories                                        71,484       68,369
-------------------------------------------------------------------------
  Total current assets                              104,041      119,023
-------------------------------------------------------------------------
  Non-current assets

  Long-term receivables and prepayments                 304          304

  Investments in associates                           1,747        1,745

  Investment property                                62,773       62,690

  Property, plant and equipment                     424,066      431,263

  Intangible assets                                  20,713       20,284
-------------------------------------------------------------------------
  Total non-current assets                          509,603      516,286
-------------------------------------------------------------------------
  TOTAL ASSETS                                      613,644      635,309
-------------------------------------------------------------------------

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

  Borrowings                                         35,450       40,646

  Trade and other payables                           93,383      111,345
-------------------------------------------------------------------------
  Total current liabilities                         128,833      151,991
-------------------------------------------------------------------------
  Non-current liabilities

  Borrowings                                        256,712      238,705

  Deferred tax liabilities                            4,476        4,476

  Provisions for other liabilities and charges          369          267
-------------------------------------------------------------------------
  Total non-current liabilities                     261,557      243,448
-------------------------------------------------------------------------
  TOTAL LIABILITIES                                 390,390      395,439
-------------------------------------------------------------------------
  Equity

  Share capital                                      16,292       16,292

  Statutory reserve capital                           2,603        2,603

  Revaluation reserve                               108,231      109,543

  Retained earnings                                  96,128      111,432
-------------------------------------------------------------------------
  TOTAL EQUITY                                      223,254      239,870
-------------------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY                      613,644      635,309
-------------------------------------------------------------------------

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros

  -----------------------------------------------------------------------------
                                           II quarter    6 months    6 months
                          II quarter 2022     2021         2022        2021
  -----------------------------------------------------------------------------


   Revenue                        212,996       207,187     411,919     397,953

   Other operating income             535         1,151         862       1,356



   Cost of merchandise           -153,471      -154,986    -299,784    -300,302

   Service expenses               -14,377       -11,337     -29,014     -22,863

   Staff costs                    -23,881       -21,300     -46,228     -42,137

   Depreciation,
   amortisation       and
   impairment losses               -9,779        -9,615     -19,421     -19,472

   Other expenses                    -174           -59        -487        -309
  -----------------------------------------------------------------------------
   Operating profit                11,849        11,041      17,847      14,226
  -----------------------------------------------------------------------------
   Finance income                       1             1           2           2

   Finance costs                   -1,232        -1,189      -2,391      -2,265

   Finance    income   on
   shares  of  associates
   accounted   for  using
   the equity method                   44            49         102          97
  -----------------------------------------------------------------------------
   Profit before tax               10,662         9,902      15,560      12,060
  -----------------------------------------------------------------------------
   Income tax expense                  -1             0      -4,480      -4,333
  -----------------------------------------------------------------------------
   NET PROFIT FOR THE
   FINANCIAL YEAR                  10,661         9,902      11,080       7,727
  -----------------------------------------------------------------------------
   Other    comprehensive
   income:

   Items that will not be
   subsequently
   reclassified to profit
   or loss
  -----------------------------------------------------------------------------
   Other comprehensive
   income for the
   financial year                       0             0           0           0
  -----------------------------------------------------------------------------
   TOTAL COMPREHENSIVE
   INCOME FOR THE
   FINANCIAL YEAR                  10,661         9,902      11,080       7,727
  -----------------------------------------------------------------------------
 Basic     and    diluted
 earnings    per    share
 (euros)                             0.26          0.24        0.27 0.19



Raul Puusepp

Chairman of the Board

Phone +372 731 5000