Börsiteade

Pealkiri

Unaudited consolidated interim accounts for the fourth quarter and twelve months of 2021

Teade

Segments (EURm)              Q4/21 Q4/20  yoy   12m/21 12m/20   yoy
----------------------------------------------------------------------
 Supermarkets                 151,4 143,4  5,6%   569,0  524,4  8,5%

 Department stores             32,7  29,4 11,4%    93,4   88,8  5,2%

 Cars                          29,6  25,1 18,1%   145,8  117,6  24,0%

 Security segment               2,3   2,0 16,0%     8,2    6,0  35,9%

 Real Estate                    1,5   1,4  5,1%     5,3    5,1  3,1%
----------------------------------------------------------------------
 Total sales                  217,5 201,3  8,1%   821,6  741,9  10,7%
----------------------------------------------------------------------


 Supermarkets                   6,3   3,5 80,3%    20,5   15,5  31,9%

 Department stores              0,3   0,9 -69,0%   -0,7   -1,4 -50,4%

 Cars                           1,6   0,4 342,8%    7,4    2,2 242,7%

 Security segment              -0,1   0,0 100,0%    0,0    0,0 -217,6%

 Real Estate                    4,1   2,6 56,9%    12,1   10,1  19,9%

 IFRS 16                       -0,4  -0,8 -46,3%   -2,9   -2,4  17,8%
----------------------------------------------------------------------
 Total profit/loss before tax  11,9   6,6 78,9%    36,5   24,0  52,3%
----------------------------------------------------------------------

In  the fourth quarter of 2021, the  consolidated unaudited sales revenue of the
Group was 217.5 million euros, which was 8.1% more than the sales revenue of the
same  period in 2020. The sales revenue of 2021 was 821.6 million euros, showing
a  growth of 10.7% compared  to the result  of 2020, when the  sales revenue was
741.9 million  euros.  In  the  fourth  quarter  of  2021, the Group's unaudited
consolidated  net profit was 11.7 million euros, which was 46.6% higher than the
profit  of the comparable period in the previous year. The Group's net profit of
2021 was  32.0 million  euros,  which  was  64.2% higher  than the result of the
previous year. The pre-tax profit earned in 2021 was 36.5 million euros, showing
a 52.3% increase compared to last year.

The  sales revenue generated by commercial  establishments increased by a record
17.8% in Estonia in the first eleven months of 2021 and the increased confidence
to  consume could also be seen in the  fourth quarter. In spite of the fact that
the  sales  revenue  was  increased  most  by  the  fuel  and electronics retail
segments,  which the  Group is  not involved  in, the consumers' confidence also
boosted  the sales of the Group, increasing the sales figures in all segments of
the  Group over the year in total, as well as in the last quarter. The consumers
accustomed  to  visit  online  stores  safely  during the period of restrictions
continued  to visit the  online stores of  the Group in  the last quarter of the
year.  The  growth  of  the  profit  and  profitability  was  supported  by  the
integration  of the stores, which were added to the supermarket segment in 2020
and  modernising the production equipment in the central kitchen, as well as the
successful sales operations of the car trade segment. In the fourth quarter, the
Group's  profit was  put under  pressure by  the significantly  faster growth of
energy prices compared to the previous levels and the continued growth of labour
costs  due to  the labour  shortage. In  the real  estate segment,  the business
profit  of the fourth quarter of 2021 was influenced by the increase in the fair
values of investment property in the amount of 2.2 million euros. The net profit
of  the Group  decreased by  2.9 million euros  due to  calculated loss on lease
agreements  in accordance with IFRS 16 (in  2020, the respective figure was 2.4
million euros).

The  Valga Selver  store was  renovated during  the reporting  quarter. Prior to
that, Selver had also renovated the Jaamamõisa store in 2021. The most extensive
innovation  in the first quarter was the  transfer of stores operating under the
Comarket  brand to the Selver ABC brand  and the integration of Comarket, Delice
stores,  and the Solaris Food Store with the Selver supply chain and IT systems.
Updating the software platform of the Selver online stores also commenced in the
first  quarter, which was fully completed by the end of the third quarter. As of
1 June 2021, the service area of the e-Selver online store service covers all of
Estonia.  With this  expansion, Selver  became the  only online grocery store in
Estonia,  which delivers goods to all counties of mainland Estonia in the entire
extent.  One of  the most  important large-scale  developments of  the Group was
completed in the financial year: the construction of the new production building
of  the  central  kitchen  of  Kulinaaria  was  completed,  the existing factory
building  was renovated,  and the  production buildings  were connected, thereby
doubling the production area. Today, the production area covers more than 6,000
square  metres. The  new production  building is  the most  modern in the Baltic
States  in its  sector. In  the department  store segment, the Ilumaailm (Beauty
department) and Toidumaailm (Food department) sections of the Tallinn department
store  were  renovated,  with  the  Toidumaailm  in Tallinn closed fully for the
renovation  works for two  months in the  summer of 2021. In September 2021, the
Group  notified  the  stock  exchange  of  the  strategic  decision to close the
footwear business and to gradually close all ABC KING and SHU stores in 2022.

In  December  2021, the  Financial  Supervision  Authority  issued  a creditor's
activity  licence to TKM Finants  AS, subsidiary of the  Group, which will allow
the  company  to  provide  consumer  credit  to customers. The various different
payment options provided by merchants are unavoidable in trade today and provide
to  the consumer the advantages  of speed and convenience,  also to entry into a
contract directly with the merchant. Over a year ago, the Group started to issue
purchase  limits for the Kuukaart (Monthly  Card) loyalty card, which allows the
customers  to pay  for their  purchases once  a month  based on  an invoice. The
Monthly  Card loyalty card has been well-received and the Group intends to offer
opportunities  for  paying  in  instalments  to  the customers as the next step.
Cooperation with a long-time partner of the Group, LHV Pank, will also continue,
with  the bank continuing to  issue the Partner Bank  Card, which has a specific
target  group and circle of users and is a different product than the options to
pay in instalments.

Selver supermarkets

The  consolidated sales revenue of the  supermarket business segment in 2021 was
569.0 million  euros,  increasing  by  8.5% compared  to  the previous year. The
consolidated  sales  revenue  was  151.4 million  euros  in  the fourth quarter,
increasing  by 5.6% in comparison with the same period of last year. The average
monthly  sales revenue per square metre  of sales area in 2021 was 0.40 thousand
euros,  exceeding the  respective indicator  in the  year before by 2.6%. In the
fourth quarter, the respective indicator was 0.43 thousand euros, which is 5.2%
more  than in the  same period last  year. The average  sales revenue per square
metre  of selling space  of comparable stores  was 0.42 thousand euros in 2021,
growing  by  3.0% compared  to  the  year  before,  and  0.45 thousand euros, on
average,  in the fourth  quarter, growing by  5.7%, respectively. In 2021, 42.4
million  purchases were made from the stores,  which was 4.1% higher than in the
reference year.

In  the fourth quarter of 2021, the  pre-tax consolidated profit was 6.3 million
euros,  increasing by 2.8 million  euros in comparison  with the same period the
year  before. The net profit of the  same period was 5.7 million euros, which is
an  increase of 1.7 million euros in comparison with the previous year. The pre-
tax   profit  of  the  supermarkets  segment  in  2021 was  20.5 million  euros,
increasing  by 5.0 million euros  in comparison with  the previous year. The net
profit  of the year was 18.4 million euros,  which is an increase of 4.4 million
euros  in comparison with the  previous year. As of  1 June 2020, the results of
the supermarket segment include the results of ABC Supermarkets.

Like  Estonian economy as a whole, the  supermarket segment was also impacted by
the changes in the purchase behaviour and consumption habits of the customers in
connection  with the coronavirus, which broke  out in March 2020. These have led
to  in challenges  in operating  with the  goods and  continuously increased the
expenses on the personal protective equipment for the customers and employees.

Selver's  result was affected by  the acquisition of ABC  Supermarkets AS in the
second  quarter of 2020, which  increased the number  of Selver stores by 19. In
February  2021, the sales activities of one of the stores were terminated and at
the  end of the year,  the sales activities will  continue in the eighteen added
stores.  Selver  expanded  the  sales  area  of  one  of  its stores in 2021 and
renovated  two stores, including one in the fourth quarter. The store was closed
to  customers  for  six  weeks  in  the  fourth  quarter for the renovation. The
comparability of the results is also affected by the new Selver store, which was
opened  in July 2020, and the renovation of three Selver stores in the reference
period, the expansion of the sales area of two of the stores, closing one store,
and  the impact of the leap year.  In 2021, the transfer of the stores operating
under  the Comarket brand to the Selver  ABC brand was completed and IT software
upgrades were made in the Delice store and Solaris Food Store. In the Delice and
Solaris  stores,  the  Delice  Express  service  is  now  offered to customers -
previously, these stores had self-service checkouts, but now, customers can make
their  purchases conveniently by using barcode scanners. The process of bringing
the stores together under one brand and updating the IT software was accompanied
by  closing the stores for a few days for replacing the equipment, as well as by
one-time  expenses  and  investments.  The  work  on the selection of the stores
operating under the Selver ABC trademark as well as on increasing the efficiency
of  the work processes including  the entire Selver chain  has continued. In the
third  quarter, four smaller  Selver stores were  rebranded under the Selver ABC
trademark.  Investments were made in the popular SelveEkspress service in 2021.
The  technological  platform  of  SelveEkspress  was  updated,  additional self-
checkout  tills were added  to the stores  where the customers'  interest in the
service  has  significantly  increased,  and  the  opening  of the SelveEkspress
service  in the  Selver ABC  stores began.  Kulinaaria OÜ,  which belongs to the
supermarket  segment  and  is  known  to  the  customers  under the Selveri Köök
trademark,  completed the construction of an  extension of its factory in 2021,
which  doubled the size of the production  area to over 6,000 square metres. The
new  production building is the most modern  in the Baltic States in its sector.
The  turnover  of  Selveri  Köök  increased  by  13% in 2021. The new production
equipment has allowed to optimise the production processes and reduce the amount
of manual labour, which has, in turn, enabled to lower the production costs.

Compared  to  the  same  period  the  year  before,  which  already included the
significant  increase in e-commerce,  the number of  orders received by e-Selver
has  almost doubled  during the  year. Since  the beginning of 2021, the service
area  of e-Selver has been expanded in stages  and, since June, it covers all of
mainland  Estonia, as well as the largest  islands. The service area of e-Selver
is  the largest  in Estonia  and it  was declared  the most user-friendly online
store in the category of groceries in 2021. The nationwide home delivery service
of  e-Selver was recognized with the title of the 'Logistics Act of the Year' in
2021.

The  formation of  the profit  for the  year was  impacted by  the good turnover
results,  especially in the warm summer period  and in the product groups, which
were  affected by the spread of COVID-19 the year before. The faster increase in
the  labour costs and purchasing ABC  Supermarkets and transferring it under the
trademark  of Selver had a  negative impact. The lack  of manpower in the labour
market  has resulted in wage pressure. A  temporary increase in labour costs was
also  caused by the integration of the  processes of ABC Supermarket stores into
the  Selver solution, higher  labour needs in  the e-commerce segment, where the
provision  of the  service is  more resource-intensive  compared to the physical
store,  and higher expenses to  cover the increased sick  days of employees. The
profit  has also  been affected  by the  energy prices,  which have occasionally
risen several times above the normal levels.

Department stores

In 2021, the Kaubamaja department stores business segment earned a sales revenue
of 93.4 million euros, which is 5.2% more than last year. In the fourth quarter,
the  sales revenue of  the Kaubamaja department  store segment amounted to 32.7
million euros, which is 11.4% better than the result in the same period the year
before.  The pre-tax loss of the segment in 2021 was 0.7 million euros. The loss
decreased  by 0.7 million euros over the year.  The pre-tax profit of the fourth
quarter  of 2021 was 0.3 million  euros, being 0.6 million  euros lower than the
result of the same period of the year before.

The  2021 sales results of the Kaubamaja was  affected by the state of emergency
declared  by the Government of  the Republic of Estonia  in the first quarter of
the  year due  to the  pandemic, as  a result  of which Kaubamaja closed all its
industrial  goods departments  in Tallinn  and Tartu  for seven  weeks. Only the
grocery stores remained open. The department stores reopened on 2 May. In 2020,
shopping centres were closed for six weeks. The demand for summer goods was high
in  the reopened department stores and the discount campaigns in the summer were
successful.  The  renovation  of  the  beauty  and  food sections of the Tallinn
department  store in the  summer months had  a negative impact  on the operating
profit  of  the  Kaubamaja  department  store,  with the food segment in Tallinn
closed  for the renovation  works on 25 June  and reopened in  a fully renovated
form  on 26 August. Customers interest for the renovated sections was very high.
The  autumn season campaigns, which started  with 'Beauty Time' in September and
'Shopping  Rally' in October and  ended with the Christmas  sales, were the most
successful  ever. There are plans to  fully renovate the women's fashion section
in  Tallinn at the beginning of 2022; the  section is expected to be reopened in
renovated  form on 8 March. The development and  planning of the concept for the
food  section in  Tartu will  also begin  in 2022. Concerning  the online store,
Kaubamaja  is planning to switch  over to a new  software solution, which should
improve   the   user   convenience   for   the   customers   and  add  different
functionalities.  The  photo  studio  technology  will  be replaced as well. The
average  sales revenue  of the  Kaubamaja department  stores per square metre of
selling  space was 0.3 thousand euros  per month in the  twelve months, which is
4.4% higher than in the same period last year.

In  the fourth quarter of 2021, the sales  revenue of OÜ TKM Beauty Eesti, which
operates  I.L.U. cosmetics  stores, was  2.1 million euros,  which is 21.1% more
than  in the same period of 2020. In  the fourth quarter of 2021, the profit was
0.2 million  euros,  which  was  0.1 million  euros  more than in the comparable
period in 2020. The sales revenue of 2021 was 5.5 million euros, which is 11.5%
more  than in the 2020. The profit in 2021 was 0.2 million euros, which was 0.1
million  euros more than in 2020. The sales  revenue of the I.L.U. stores in the
fourth  quarter was  boosted by  the successful  Christmas sales,  as well  as a
general  increase in consumer confidence  and the favourable economic situation.
In  2022, the I.L.U. store concept upgrades  and two stores are being renovated.
The  online  store  assembly  capacity  will  also be increased by expanding the
online store warehouse.

The  sales revenue of  the shoe stores  of TKM King  AS, which is being reported
under  the department store segment as of 1 April 2021, was 6.1 million euros in
2021. The  sales revenue decreased by 11.0% compared  to the year before. In the
fourth quarter, the sales revenue of the segment was 1.6 million euros, which is
16.1% less  than in the same period a  year before. The loss in 2021 amounted to
2.8 million  euros.  Compared  to  the  year  before, the loss increased by 1.1
million  euros. The loss of the fourth quarter was 1.9 million euros, increasing
by  1.7 million  euros  compared  to  the  year  before.  Based on the strategic
decision  made by  the Group  in September  in the  reporting year  to close the
footwear business over 2022, the gradual realisation of the inventories began in
the  fourth  quarter  and  preparations  were  made  for closing the stores. The
operating  loss was increased due to  forming reserves in connection with future
costs of closing the stores.

Car trade

The  sales revenue of  the car trade  segment was 145.8 million  euros in 2021,
which  exceeded  the  sales  revenue  of  the  previous year by 24.0%. The sales
revenue  of 29.6 million euros in the  fourth quarter exceeded the sales revenue
of  the same period in  the previous year by  18.1%. During the twelve months, a
total  of 5,884 new vehicles were sold, 1,147 of them in the fourth quarter. The
net profit of the segment in 2021 was 6.9 million euros, exceeding the profit of
the year before by 5.1 million euros. The pre-tax profit of the segment in 2021
was  7.4 million euros, which is 5.3 million  euros more than the pre-tax profit
in 2020. The pre-tax profit of the fourth quarter of 2021 was 1.6 million euros,
which  is 1.2 million euros more than the profit  of the same period of the year
before.

The  vehicle  sales  in  the  fourth  quarter  were dominated by the deficit and
availability  of new  vehicles arising  from the  deficit of car parts. Forward-
looking  planning of the  stocks allowed the  car trade segment  of the Group to
stand  out and Kia to become the  most-sold passenger car in Estonia in October.
The  sales margin and the  profitability of the entire  segment also grew in the
conditions of increased demand.

Security segment

The  sales  revenue  of  the  security  segment  outside the Group in the fourth
quarter  of 2021 was 2.3 million  euros, increasing by  16.0% in comparison with
the  same period of last  year. The section of  cash transport continued to grow
fastest.  The pre-tax loss  earned in the  segment was 0.1 million  euros in the
fourth  quarter. The loss  increased by 0.03 million  euros compared to the same
period  last year. The  sales revenue of  the security segment  in 2021 was 8.2
million  euros, increasing by  35.9% compared to the  previous year. The pre-tax
profit in 2021 remained at zero, which is similar to the previous result.

2021 as a whole was an intensive year of rapid changes for the security segment.
All  sections  of  the  company  increased  their  business volumes and adjusted
successfully  in the unstable conditions. The  increase in energy prices and the
labour  shortage, which significantly increased the labour costs in the last few
months of the year, had the greatest negative impact on profitability.

Real estate

The  sales revenue earned in the real  estate segment outside the Group was 5.3
million  euros in 2021. Sales revenue increased by 3.1% compared to the previous
year.  The sales revenue earned in the segment outside the Group was 1.5 million
euros  in  the  fourth  quarter.  During  the  reference  period,  sales revenue
increased  by 5.1%. The  pre-tax profit  earned in  the real  estate segment was
12.1 million  euros in 2021. The profit increased  by 19.9% compared to the year
before.  The pre-tax profit earned  in the segment was  4.1 million euros in the
fourth  quarter. The pre-tax profit increased  by 56.9% in the reference period.
The  profit of  the segment  in the  fourth quarter  was affected  by the annual
evaluation  of the  fair value  of the  real estate  investments, as a result of
which the profit of the quarter increased by 2.2 million euros.

The  coronavirus pandemic affected  the sales revenue  of the segment throughout
2021. The  restrictions  had  the  greatest  impact  on  the rental premises and
catering   and  entertainment  establishments  in  central  Tallinn.  The  Tartu
Kaubamaja  centre  has  recovered  quickly  from  the  restrictions,  which were
implemented to prevent the spread of the virus, compared to the year before. The
growth  in the sales revenue and profit in the segment in the second half of the
year were supported by the commercial premises rented to external parties by the
Latvian real estate undertaking. In the third quarter, the immovable property in
Saare  County  was  sold.  The  immovable  property  of the Laulasmaa Selver and
commercial land in Harju County were acquired in 2021.

The  transfer to green energy from 1 September was a landmark event for the real
estate  segment  in  2021. This  means  that  the  electricity  consumed  on the
commercial premises owned by the Group is 100% generated from renewable sources.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In thousands of euros

-------------------------------------------------------------------------
                                                 31.12.2021   31.12.2020
-------------------------------------------------------------------------
  ASSETS
-------------------------------------------------------------------------
  Current assets

  Cash and cash equivalents                          29,981       32,757

  Trade and other receivables                        20,673       15,894

  Inventories                                        68,369       77,334
-------------------------------------------------------------------------
  Total current assets                              119,023      125,985
-------------------------------------------------------------------------
  Non-current assets

  Long-term receivables and prepayments                 304          335

  Investments in associates                           1,745        1,712

  Investment property                                62,690       60,347

  Property, plant and equipment                     431,263      388,757

  Intangible assets                                  20,284       20,148
-------------------------------------------------------------------------
  Total non-current assets                          516,286      471,299
-------------------------------------------------------------------------
  TOTAL ASSETS                                      635,309      597,284
-------------------------------------------------------------------------

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

  Borrowings                                         40,646       49,402

  Trade and other payables                          111,345      102,841
-------------------------------------------------------------------------
  Total current liabilities                         151,991      152,243
-------------------------------------------------------------------------
  Non-current liabilities

  Borrowings                                        238,705      217,349

  Deferred tax liabilities                            4,476        4,408

  Provisions for other liabilities and charges          267          277
-------------------------------------------------------------------------
  Total non-current liabilities                     243,448      222,034
-------------------------------------------------------------------------
  TOTAL LIABILITIES                                 395,439      374,277
-------------------------------------------------------------------------
  Equity

  Share capital                                      16,292       16,292

  Statutory reserve capital                           2,603        2,603

  Revaluation reserve                               109,543      102,630

  Currency translation differences                        0         -149

  Retained earnings                                 111,432      101,631
-------------------------------------------------------------------------
  TOTAL EQUITY                                      239,870      223,007
-------------------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY                      635,309      597,284
-------------------------------------------------------------------------


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros

  -----------------------------------------------------------------------------
                           IV quarter    IV quarter    12 months    12 months
                              2021          2020          2021         2020
  -----------------------------------------------------------------------------


   Revenue                      217,545       201,253      821,648      741,938

   Other operating income         2,339           309        4,332        1,285



   Cost of merchandise         -156,096      -147,608     -607,239     -556,712

   Service expenses             -14,324       -12,647      -48,874      -44,009

   Staff costs                  -25,956       -23,016      -88,755      -78,301

   Depreciation,
   amortisation and
   impairment losses             -9,932        -9,888      -38,963      -35,137

   Other expenses                  -464          -523         -931       -1,057
  -----------------------------------------------------------------------------
   Operating profit              13,112         7,880       41,218       28,007
  -----------------------------------------------------------------------------
   Finance income                     2             1            4            2

   Finance costs                 -1,283        -1,272       -4,909       -4,239

   Finance income on
   shares of associates
   accounted for using
   the equity method                 27            20          183          191
  -----------------------------------------------------------------------------
   Profit before tax             11,858         6,629       36,496       23,961
  -----------------------------------------------------------------------------
   Income tax expense              -147         1,361       -4,480       -4,462
  -----------------------------------------------------------------------------
   NET PROFIT FOR THE
   FINANCIAL YEAR                11,711         7,990       32,016       19,499
  -----------------------------------------------------------------------------
   Other comprehensive
   income:

   Items that will not be
   subsequently
   reclassified to profit
   or loss

   Revaluation of land
   and buildings                  9,284        11,225        9,284       11,225

   Currency translation
   differences                     -149             0         -149            0
  -----------------------------------------------------------------------------
   Other comprehensive
   income for the
   financial year                 9,135        11,225        9,135       11,225
  -----------------------------------------------------------------------------
   TOTAL COMPREHENSIVE
   INCOME FOR THE
   FINANCIAL YEAR                20,846        19,215       41,151       30,724
  -----------------------------------------------------------------------------
 Basic and diluted
 earnings per share
 (euros)                  0.29       0.20          0.79         0.48



Raul Puusepp
Chairman of the Board
Phone +372 731 5000