Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the first quarter of 2018

Teade

Segments (EURm)           Q1/18   Q1/17     yoy
----------------------------------------------------
  Supermarkets              105,6    99,6    6,1%

  Department stores          22,8    23,0    -1,0%

  Cars                       27,6    24,2    14,0%

  Footwear                    2,2     2,6   -16,5%

  Real Estate                 1,3     1,2    7,6%
----------------------------------------------------
  Total sales               159,5   150,7    5,9%
----------------------------------------------------


  Supermarkets                3,1     2,8    12,6%

  Department stores          -0,4     0,1   -944,2%

  Cars                        0,9     1,2   -31,3%

  Footwear                   -0,3    -0,8   -60,6%

  Real Estate                 2,9     2,9    -0,4%
----------------------------------------------------
  Total profit before tax     6,1     6,1    -0,5%
----------------------------------------------------

In  the first quarter  of 2018, the unaudited  consolidated sales revenue of the
Tallinn  Kaubamaja Group was 159.5 million euros.  Compared to the first quarter
of  2017, when its sales  revenue was 150.7 million  euros, the growth accounted
for  5.9%. The net loss for the period  amounted to 0.2 million euros due to the
income  tax expense  on dividends  (6.2 million  euros). The  loss in  the first
quarter  of  2017 was  0.3 million  euros,  including  income tax of 6.4 million
euros. The pre-tax profit - 6.1 million euros - remained at the same level as in
the previous year.

The  beginning of 2018 was positive for the Group  - there was a growth in sales
revenue. The pre-tax profit remained at a solid level, comparable to that of the
previous  year. In terms of the important retail segments of the Group, a strong
sales  revenue growth was seen in supermarkets  and car trade segments. In spite
of  the  intensification  of  the  competitive  situation, the department stores
managed  to maintain the  same level of  sales revenue in  essence. In estimated
comparison with its direct competitors, based on the statistics published by the
Tax  and Customs Board,  the sales revenue  of the Group's  segment of Kaubamaja
stores  can be considered good under certain  market situation. The sales of the
footwear  segment decreased  mainly due  to reduced  selling space. In the first
quarter  of 2018, the largest, nearly 1.5 times sales growth was recorded in the
Group e-stores. The key to growth of Kaubamaja and Selver's e-stores is the fact
that  the e-shopping experience  offered is of  an equivalent quality with which
the  regular  customers  of  the  Group  are  accustomed  to in physical stores.
Investments  in the user-friendliness,  service and logistics  development of e-
stores  as well  as organizational  changes in  process reorganization have been
successful  and according to plan. Labour  costs increased by 11.5% in the first
quarter, including a 3.8% increase in the number of employees. Growth of 7.5% of
the  average wage per employee remained at the  same pace with the trends of the
wholesale and retail trade statistics of the Republic.

Selver supermarkets

In  the first quarter of 2018, the consolidated sales revenue of the supermarket
business  segment was 105.6 million  euros, being increased  by 6.1% compared to
the  previous period.  In the  first quarter  of 2018, the  consolidated pre-tax
profit  of the supermarket  segment was 3.1 million  euros. The profit earned in
Estonia  amounted to  3.2 million euros  of it,  remaining at  the level  of the
previous year (a decline of 0.1 million euros). The consolidated net loss of the
supermarket  segment was 0.9 million  euros, which accounted  for an increase of
0.1 million  euros compared the first quarter of the previous year. The net loss
in  Estonia in the  first quarter of  2018 was 0.8 million euros. The difference
between  net profit  and pre-tax  profit is  a result  of income  tax expense on
dividends - in 2018, the income tax on dividends was 0.4 million euros less than
in  the previous year. The pre-tax loss in  Latvia in the first quarter of 2018
was 0.1 million euros. The loss was reduced due to the expiration of intra-group
contracts. The business in Latvia is frozen.

The  sales  revenue  growth  of  Selver  stores  in the first quarter, which was
somewhat  faster than the market segment, has  been achieved with the support of
new  stores. In terms of  comparable stores, Selver stores  have managed to keep
the  sales revenue at the level of  last year, despite the constantly increasing
number of competitors' stores and the re-distribution of loyal customers between
the stores of Selver. In the first quarter, both the number of purchases and the
average  purchase has increased. E-Selver is still  doing well: its sales in the
first  quarter, compared to the  first quarter of last  year, grew by 1.5 times.
The comparison basis of the year 2018 does not include the five new supermarkets
opened in Tallinn and the mobile store of Hiiumaa.

The  profits earned in Estonia were mostly  affected by revenue growth. In terms
of  operating expenses, the level of  cost-efficiency was better than last year.
As  expected, investments have had a positive  effect: they have enabled to save
on  administrative costs and efficiently manage labour costs in the pressurising
wage situation.

This year, Selver plans to open at least two stores and extend the SelveEkspress
service  to these two  stores, as well  as fourteen existing  stores. It is also
planned  to  introduce  electronic  price  tags  in Selver's fruit and vegetable
sections.  We will continue to develop  e-commerce to increase our capability to
serve  the rapidly increasing number of customers: it is also planned to install
the  first e-Selver  food lockers,  where customers  of our  e-store can pick up
their deliveries. On 1 April, the e-Selver service expanded to Pärnu.

Department stores

In  the first three months of 2018, the department store business segment earned
a  sales revenue of 22.8 million  euros, which is 1.0% less  than last year. The
pre-tax  loss of  the department  stores in  the first  quarter of 2018 was 0.4
million  euros, which  is 0.5 million  euros less  than last  year. In the first
quarter,  the sales results of the department store segment were affected by the
long  and cloudy winter, which had a negative impact on the sale of spring goods
at  the beginning of the new season. The  sale of discounted goods in the winter
weather conditions also negatively affected the marginal.In the first quarter of
2018, the  sales  revenue  of  OÜ  TKM  Beauty  Eesti, which operates the I.L.U.
cosmetics  stores, was 1.1 million  euros, which was  3.2% more than in the same
period  last year. The loss in the  first quarter of 2018 was 0.1 million euros,
which  is 12.5% more than last year. In February, the Kvartal store in Tartu was
closed  due to unsatisfactory results.  The final sale and  costs related to the
closing the store influenced the profitability of the I.L.U. chain.

Car Trade

In  the first quarter  of 2018, the sales  revenue of the  car trade segment was
27.6 million  euros. Sales revenue increased by  14.0% compared to last year and
the  sales revenue of KIAs decreased by 5.9%. A total of 1,229 new vehicles were
sold  in the first three months of the  year. The sales revenue and the increase
in the number of cars sold was supported by the rapid growth of the Estonian car
market,  which continued in the first quarter of 2018. The pre-tax profit of the
segment in the first quarter of 2018 was 0.9 million euros, which is 0.4 million
euros  less than in the same period last year. In January, Viking Motors AS, the
Estonian  retail  seller  in  car  trade  segment, started selling and servicing
Peugeot  cars  in  Tallinn  by  opening  a  new showroom. Until now, the Group's
Latvian  car company -Forum Auto SIA -  has successfully sold Peugeot cars. This
new  business  direction  has  shown  better  results than expected. The Latvian
subsidiary  Forum Auto SIA has also  shown great results, winning several public
procurements.  The decrease in  the car trade  segment's profit has,  on the one
hand,  been a result of the launch of  the new showroom in Tallinn. On the other
hand,  compared to the first  quarter of 2017, the higher  volume of fleet sales
has lowered the sales margin of cars.

Footwear trade

In the first quarter of 2018, the sales revenue of the footwear business segment
was  2.2 million euros, which accounted for  a decrease of 16.5% compared to the
same period of the previous year. Reason for the decrease compared to last year,
five footwear stores have been closed during the selling space optimization. The
loss  in  the  first  quarter  decreased  by  0.5 million  euros compared to the
previous  year, staying at a level of 0.3 million euros. The goal of the segment
in  2018 is to  increase profitability  through new  procurement channels and an
increase  in margins. In  2018, it is planned  to re-open the  ABC King store in
Kristiine  shopping centre, which  was closed in  2017, and to continue with the
activities  to  increase  the  profitability  of  selling space. We have started
working with the store concept innovations of ABC King.

Real Estate

In  the first  quarter of  2018, the sales  revenue in  the real  estate segment
outside  the  Group  was  1.3 million  euros.  Sales  revenue increased by 7.6%
compared  to last  year. The  pre-tax profit  of the  real estate segment in the
first  quarter of 2018 was 2.9 million euros, which is 0.4% less than last year.
The  growth in the  segment's sales revenue  was positively affected  by the gas
station  and store, completed  in January 2018 for  a partner outside the Group,
which  is located in Rae  municipality, in the immediate  vicinity of the Selver
store  in  Peetri.  Tartu  Kaubamaja  Centre  and Viimsi Centre are showing good
results  and contributing to the segment's  sales growth. The decrease in profit
was  affected  by  previous  contracts  concluded  inside  the Group, related to
Latvian  real estate, which have ended by now. At the end of 2018, it is planned
to  open Kolde Selver, which is currently under construction. It is also planned
to  continue with the development works  of the Estonian, Latvian and Lithuanian
car centres, a new sales building of department store in Tallinn and the central
kitchen of Kulinaaria.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

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                                                 31.03.2018   31.12.2017
-------------------------------------------------------------------------
  ASSETS
-------------------------------------------------------------------------
  Current assets

  Cash and cash equivalents                          40,529       33,662

  Trade and other receivables                        14,101       16,127

  Inventories                                        79,760       75,816
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  Total current assets                              134,390      125,605
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  Non-current assets

  Long-term receivables and prepayments                 115          114

  Investments in associates                           1,776        1,724

  Investment property                                49,889       49,902

  Property, plant and equipment                     204,573      214,475

  Intangible assets                                   5,543        5,675
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  Total non-current assets                          261,896      271,890
-------------------------------------------------------------------------
  TOTAL ASSETS                                      396,286      397,495
-------------------------------------------------------------------------

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

  Borrowings                                         52,895       54,818

  Trade and other payables                          114,493       85,569
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  Total current liabilities                         167,388      140,387
-------------------------------------------------------------------------
  Non-current liabilities

  Borrowings                                         48,729       48,732

  Provisions for other liabilities and charges          420          360
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  Total non-current liabilities                      49,149       49,092
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  TOTAL LIABILITIES                                 216,537      189,479
-------------------------------------------------------------------------
  Equity

  Share capital                                      16,292       16,292

  Statutory reserve capital                           2,603        2,603

  Revaluation reserve                                81,672       82,124

  Currency translation differences                     -255         -255

  Retained earnings                                  79,437      107,252
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  TOTAL EQUITY                                      179,749      208,016
-------------------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY                      396,286      397,495
-------------------------------------------------------------------------

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME

In thousands of euros

-------------------------------------------------------------------------------
                                                         3 months
                                                             2018 3 months 2017
-------------------------------------------------------------------------------


 Revenue                                                  159,547       150,688

 Other operating income                                       713           482



 Cost of sales                                           -120,687      -113,666

 Other operating expenses                                 -13,837       -13,494

 Staff costs                                              -15,788       -14,155

 Depreciation, amortisation and impairment losses          -3,437        -3,281

 Other expenses                                              -308          -329
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 Operating profit                                           6,203         6,245
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 Finance income                                                 0             0

 Finance costs                                               -170          -183

 Finance income on shares of associates                        52            51
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 Profit before tax                                          6,085         6,113
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 Income tax expense                                        -6,249        -6,371
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 NET LOSS FOR THE FINANCIAL YEAR                             -164          -258
-------------------------------------------------------------------------------
 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             -164          -258
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Raul Puusepp

Chairman of the Board

Phone +372 731 5000

Attachment

  * Börs_Kaubamaja_1Q2018_eng (https://prlibrary-
    eu.nasdaq.com/Resource/Download/fbc21f49-85df-465c-84a9-6d82908fddc3)