Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the first quarter of 2020

Teade

Segments (EURm)           Q1/20   Q1/19    yoy
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  Supermarkets              118.3   110.9    6.7%

  Department stores          21.1    22.9   -7.6%

  Cars                       33.1    26.4   25.5%

  Footwear                    1.6     1.9   -13.2%

  Real Estate                 1.3     1.4   -4.9%
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  Total sales               175.5   163.4    7.4%
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  Supermarkets                3.4     2.4   42.6%

  Department stores          -1.0    -0.5   110.9%

  Cars                        0.3     0.6   -51.6%

  Footwear                   -0.9    -0.5   98.1%

  Real Estate                 2.7     2.6    0.8%

  IFRS 16                    -0.3    -0.4   -11.8%
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  Total profit before tax     4.1     4.3   -4.4%
---------------------------------------------------

In  the  first  quarter  of  2020, the  unaudited  consolidated sales revenue of
Tallinna  Kaubamaja Group was 175.5 million  euros. The growth was 7.4% compared
to  the  first  quarter  of  2019, when  the comparable sales revenue was 163.4
million  euros.  The  net  loss  of  the reporting period was 1.7 million euros,
influenced  by the income  tax calculated on  dividends (5.8 million euros). The
loss  in the first quarter of  2019 was 2.2 million euros, including 6.5 million
euros  of income  tax. The  pre-tax profit  was 4.1 million  euros - 0.2 million
euros lower than the result of the previous year.

The  first quarter  of 2020, which  began positively  for the  Group, ended with
closing  the selling  spaces of  the footwear  segment, department store segment
manufactured  goods departments, and I.L.U. due to the restrictions arising from
the  coronavirus crisis. The jump in the sales of the supermarket segment, which
occurred  in the  middle of  March after  the emergency  situation was declared,
receded  quickly as the customers became more careful in visiting the stores and
the  maximum  capacity  of  the  e-store  was  reached.  Declaring the emergency
situation  also resulted in a significant change in the consumption behaviour of
the  customers  with  a  steep  decline  in  the consumption of manufactured and
fashion  products. The powerful  discounts in the  footwear segment in the first
months  of the year and stopping of the  trading in March, as well as decreasing
of  the margin  of the  car trade  segment of  the Group  in connection with the
increase  in sales volume  of large customers  all had a  negative effect on the
gross  margin. The sudden transfer of consumption to online channels resulted in
an  increase of the turnover of the e-stores  of the Group, where there is still
some  room for development to be able to  meet the demand of customers, in spite
of  the rapid  changes in  the organisation  of work.  Labour costs increased by
5.7% in the first quarter.

The  important development  activities which  continued in  the first quarter of
2020 included  the construction  of the  new production  building of the central
kitchen  of Kulinaaria, as  well as the  renovation of the  old factory building
according  to the plan. The  Selver store in Võru  was successfully moved to the
new  location in the Kagukeskus shopping mall in March and was the latest Selver
store  to introduce the SelveEkspress service.  The SelveEkspress service is now
available in all Selver stores. Selver is planning to expand one and renovate up
to  three stores  this year.  In the  beginning of  March, a  SHU store  with an
updated  concept was opened at Lasnamäe  Centrum, moving to a different location
in  the same shopping centre. The development of the Latvian car showroom of the
car segment of the Group will continue.

Selver supermarkets

The  consolidated sales revenue of the  supermarkets business segment was 118.3
million  euros in  the first  quarter of  2020, increasing by 6.7% in comparison
with  the same period  of last year.  9.3 million purchases were  made at Selver
supermarkets  in the first quarter of 2020, showing a drop of 1.5% year on year.
In   the   first  quarter  of  2020, the  consolidated  pre-tax  profit  of  the
supermarkets  segment was 3.4 million euros, which 1.0 million euros higher than
the result of the previous year. The consolidated net profit of the supermarkets
segment was 1.3 million euros, which is 2.8 million euros higher compared to the
same  period in  the previous  year. The  difference between  the net profit and
profit  before income tax  is due to  income tax paid  on dividends - income tax
paid  on  dividends  was  1.8 million  euros  lower in 2020 compared to the year
before.  Closing the Vilja Selver  in Võru in February  and opening the store in
the  new premises in the Kagukeskus shopping mall  in March had an impact on the
economic results of the Selver supermarkets in the first quarter. Closing of the
Suurejõe  Selver in Pärnu for renovation in March also had an impact. The Selver
store  in Ülemiste City  in Tallinn is  temporarily closed due  to the emergency
situation.

Successful campaigns and a remarkable growth of e-commerce where the increase in
the sales revenue reached 65% have had a positive effect on the sales results of
the  first quarter. The additional  day of sales gained  thanks to the leap year
also  had an impact. Negative  impacts arise from closing  of the stores and the
restrictions  applied  to  trading  in  certain  locations  due to the emergency
situation.

Increased  sales revenue, the  investments made in  increasing the efficiency of
daily  processes, and the warmer winter,  which enabled saving on administrative
expenses,  have had an impact to the profit earned. The SelveEkspress service is
available  in all  Selvers, which  has enabled  keeping the labour efficiency at
last  year's level in the  conditions of wage pressure  which were prevailing in
the beginning of the year.

Selver  is planning to expand one and renovate  up to three stores this year. It
is planned to strongly develop the e-store service to satisfy the demand for the
service which increased considerably.

Department stores

In the first three months of 2020, the department stores business segment earned
a  sales revenue  of 21.1 million  euros, which  is 7.6% less  than in  the same
period  of last year. The pre-tax loss of the Kaubamaja department stores in the
first  quarter of 2020 was 1.0 million euros, showing an increase of 0.5 million
euros  in  the  year-on-year  comparison.  The  beginning  of the year was quite
successful  for  department  stores  -  the  seasonal  discount campaigns in the
beginning  of  the  year  worked  well  and  the  Kodu Aeg campaign organised in
February  was the most successful in the last nine years. Yet, conclusively, the
sales  result  of  the  Kaubamaja  department  stores  in  the first quarter was
influenced by the emergency situation declared by the Government of the Republic
of  Estonia  due  to  the  COVID-19 virus,  which  resulted in a lower number of
visitors  to the department  stores from the  middle of March.  On 27 March, the
Government  of the Republic of Estonia ordered the closing of all shopping malls
and  Kaubamaja also closed  all selling spaces  of manufactured goods in Tallinn
and  Tartu with only  the grocery stores  remaining open. At  the same time, the
Osturalli  campaign began in the e-store and lasted 17 days this year. The 7-day
turnover  of this year's Osturalli in the e-store exceeds the level of last year
by more than 50% and the amount of products sold was more than 80% higher.

In  the first quarter of  2020, the sales revenue of  OÜ TKM Beauty Eesti, which
operates  I.L.U. cosmetics stores,  was 1.1 million euros,  which is at the same
level  compared to the  same period in  2019. The loss in  the first quarter was
0.05 million euros, which was 49.2% lower than the loss in the comparable period
in  2019. Analysing and changing the  assortment were in the  focus in the first
quarter,  including expanding the  assortment of the  e-store. The result of the
quarter  remained stable thanks to the successful marketing campaigns in January
and  February. The result of the second half of March was negatively impacted by
declaration  of the emergency  situation in connection  with the outbreak of the
COVID-19 virus,  with all physical stores of  I.L.U. closed on 27 March and only
the e-store remaining open.

Car trade

The  sales revenue of the car trade  segment was 33.1 million euros in the first
quarter of 2020. The sales revenue increased by 25.5% year on year. In the first
three  months of the year, 1,348 new vehicles were sold altogether. In the first
quarter of 2020, the car market decreased in all Baltic States; according to the
data  of Statistics  Estonia, 3.0% fewer  new passenger  cars were registered in
Estonia  in the first two  months of 2020. The pre-tax  profit of the segment in
the  first quarter of 2020 was 0.3 million euros, showing a 0.3 million decrease
in  the year-on-year comparison. In spite of  the increase in the sales revenue,
the  reasons behind  the weaker  profitability results  in the  first quarter of
2020 were  the  start-up  costs  of  the  new  Shkoda  car showroom in Latvia and
increased sales to large customers, which have lower margins.

Footwear trade

The  sales revenue of  the footwear trade  segment was 1.6 million  euros in the
first  quarter of 2020. The  loss of the  first quarter increased by 0.5 million
euros  compared to  the previous  year, remaining  at 0.9 million  euros. Strong
realisation of the inventories of previous seasons in January and February had a
negative  impact on the sales revenue of  the first quarter. In the beginning of
March,  a SHU  store with  an updated  concept was  opened at  Lasnamäe Centrum,
moving  to a different location in the  same shopping mall. The beginning of the
new season in March failed completely due to the emergency situation declared in
Estonia in connection with the COVID-19 virus. From 27 March 2020, all stores of
the  footwear trade segment of the Group are closed based on a Regulation of the
Government  of  the  Republic  of  Estonia  until the Government has revoked the
restriction.

Real estate

The  sales revenue earned in the real  estate segment outside the Group was 1.3
million  euros in the first quarter of  2020. The sales revenue dropped by 4.9%
compared  to the  first three  months of  2019. The pre-tax  profit of  the real
estate  segment in  the first  quarter of  2020 was 2.7 million  euros, which is
0.8% higher than the result earned in the same period last year. The drop in the
sales  revenue was caused by the  emergency situation declared by the Government
of  the Republic on 12 March 2020 and the restriction of the freedom of movement
implemented  on 27 March 2020, as  well as the  prohibition on visiting shopping
centres.  The real estate segment of the  Group has, as a responsible and caring
lessor,  lowered  the  rent  until  the  end  of the emergency situation, as the
emergency  situation  and  the  prohibition  on  visiting  the  centres  cause a
complicated  economic  situation  for  the  tenants.  The  profit of the segment
increased  slightly  in  spite  of  the  drop  in  the  sales revenue due to the
emergency  situation. The profit was increased by the new Shkoda car showroom and
the  showroom intended for used cars completed and leased for the car segment of
the  Group in Latvia at the  end of the year. This  year, the development of the
Latvian car centre of the car segment of the Group will continue.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

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                                                 31.03.2020   31.12.2018
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  ASSETS
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  Current assets

  Cash and cash equivalents                          52,220       40,629

  Trade and other receivables                        11,231       16,904

  Inventories                                        82,383       78,305
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  Total current assets                              145,834      135,838
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  Non-current assets

  Long-term receivables and prepayments                 114          114

  Investments in associates                           1,776        1,721

  Investment property                                60,541       60,458

  Property, plant and equipment                     345,545      319,192

  Intangible assets                                   5,002        4,990
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  Total non-current assets                          412,978      386,475
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  TOTAL ASSETS                                      558,812      522,313
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  LIABILITIES AND EQUITY
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  Current liabilities

  Borrowings                                         43,250       46,448

  Trade and other payables                          121,490       89,831
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  Total current liabilities                         164,740      136,279
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  Non-current liabilities

  Borrowings                                        197,389      157,876

  Provisions for other liabilities and charges          322          322
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  Total non-current liabilities                     197,711      158,198
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  TOTAL LIABILITIES                                 362,451      294,477
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  Equity

  Share capital                                      16,292       16,292

  Statutory reserve capital                           2,603        2,603

  Revaluation reserve                                92,973       93,496

  Currency translation differences                     -149         -149

  Retained earnings                                  84,642      115,594
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  TOTAL EQUITY                                      196,361      227,836
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  TOTAL LIABILITIES AND EQUITY                      558,812      522,313
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CONDENSED  CONSOLIDATED  STATEMENT  OF  PROFIT  OR  LOSS AND OTHER COMPREHENSIVE
INCOME

In thousands of euros

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                                                         3 months
                                                             2020 3 months 2019
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 Revenue                                                  175,496       163,445

 Other operating income                                       243           240



 Cost of sales                                           -134,030      -123,076

 Other operating expenses                                 -10,534       -10,552

 Staff costs                                              -18,233       -17,246

 Depreciation, amortisation and impairment losses          -7,991        -7,637

 Other expenses                                              -231          -251
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 Operating profit                                           4,720         4,923
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 Finance costs                                               -697          -714

 Finance income on shares of associates                        55            56
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 Profit before tax                                          4,078         4,265
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 Income tax expense                                        -5,821        -6,453
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 NET LOSS FOR THE FINANCIAL YEAR                           -1,743        -2,188
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 Other comprehensive income:

 Items that will not be subsequently reclassified to
 profit or loss
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 Other comprehensive income for the financial year              0             0
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 TOTAL COMPREHENSIVE LOSS FOR THE FINANCIAL YEAR           -1,743        -2,188
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Raul Puusepp

Chairman of the Board

Phone +372 731 5000