| Segments (EURm) | Q1/23 | Q1/22 | yoy |
| Selver supermarkets | 147.2 | 139.5 | 5.5% |
| Department stores | 24.7 | 21.7 | 14.1% |
| Car trade | 41.7 | 34.0 | 22.7% |
| Security segment | 2.9 | 2.3 | 25.6% |
| Real Estate | 1.6 | 1.5 | 6.0% |
| Total sales | 218.1 | 198.9 | 9.6% |
| Selver supermarkets | 1.7 | 2.3 | -26.0% |
| Department stores | -0.8 | -1.7 | -54.3% |
| Car trade | 3.0 | 2.1 | 42.1% |
| Security segment | 0.1 | 0.0 | - |
| Real Estate | 2.5 | 2.6 | -6.3% |
| IFRS 16 | -0.5 | -0.4 | 20.8% |
| Total profit before tax | 5.9 | 4.9 | 20.5% |
In the first quarter of 2023, the consolidated unaudited sales revenue of the Group was 218.1 million euros. Compared to the first quarter of 2022, the growth was 9.6%. The net profit for the reporting period was 0.6 million euros, which increased by 43.2% compared to the first quarter of 2022, including income tax of 5.3 million euros (4.5 million euros in 2022). The pre-tax profit was 5.9 million euros, which was 1.0 million euros more than the comparable result of the year before.
In the difficult economic conditions of the first quarter of 2023, the Group was able to increase sales revenue in all segments, although the increase in the price of products has been accompanied by a decrease in consumption. The total profit of the Group also increased. The profit was improved by the department store segment and the security segment, as well as the car trade segment, despite the continuing supply chain challenges. The pre-tax profit of the supermarket segment was below the comparable profit of the previous year due to the increase in energy prices. The pre-tax profit of the real estate segment, which has been affected by interest rate increases, was slightly below the result of the previous year. As a result of the large price increase, the expectations of employees for wages increases are high. The labour costs of the Group increased by 15.7% in the first quarter of 2023, while the number of employees increased by 0.8%.
In the reporting quarter, the supermarket segment renovated Ringtee Selver in Tartu, and in March began large-scale renovations of Järve Selver, the largest store in the segment, scheduled to be completed in May. This year, the supermarket segment plans to renovate one more store in the centre of Tallinn and open a new hypermarket by the Tallinn roundabout. Selveri Köök, the private label of the supermarket segment, continued to expand its soup portfolio and new products were also added to the bakery category. Oatmeal porridge made with plant-based milk was added to the 'Hea Päeva Algus' ('A good start to the day!') breakfast series. In the department store segment, Ülemiste I.L.U. cosmetics store was renovated: the sales area was increased by almost half to 460 square metres. The NYX make-up shop-in shop with a separate entrance was opened in the Ülemiste I.L.U. cosmetics store. In the real estate segment, the construction of a solar park on the roof of Viimsi Centre continued, the completion of which is planned for this spring. In January, WOW Selver, which did not meet expectations, was closed on Saaremaa.
Selver supermarkets
The consolidated sales revenue of the supermarket business segment in the first quarter of 2023 was 147.2 million euros, increasing by 5.5% compared to the same period of the previous year. The average monthly sales revenue per square metre of sales area in the first quarter of 2023 was 0.42 thousand euros, increasing by 7.0% compared to the previous period. In terms of comparable stores, the sales revenue of goods per square metre of sales area was 0.43 thousand euros, also growing by 7.0% compared to the reference period. In the first quarter of 2023, 9.5 million purchases were made from Selver stores, accounting for an increase of 4.4% compared to the previous year.
The consolidated pre-tax profit of the supermarkets segment in the first quarter of 2023 was 1.7 million euros, 0.6 million euros less than in the previous year. The consolidated net profit of the supermarket segment was 0.5 million euros, 0.4 million euros more than last 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 1.0 million euros lower than in the year before.
The financial results of the first quarter of 2023 are affected by the turnover added by the opening of Selver supermarkets in Tallinn, Priisle, and Tabasalu, and the lost turnover due to the closure of WOW Selver on Saaremaa in January. Also the temporary closure and renovation of Ringtee Selver in Tartu, and the suspension of sales of Järve Selver (the largest Selver) in March due to renovation works. The turnover results of the supermarket segment continue to be affected by accelerated inflation. The almost 26% increase in the price of food products has changed the buying behaviour of customers and keeps the volume sales of goods below the level of last year. The prices of energy carriers have stabilised, but despite the implementation of savings opportunities, energy expenditures are one-third higher than the year before. High energy prices and the increase in raw material prices have increased the prices of almost all expenses, and price increases, despite the search for and implementation of savings opportunities, have a significant impact on the economic result. The increase in labour costs has been 14% in the supermarkets segment, exceeding the increase in sales revenue. As a counterweight, opportunities to increase the efficiency of work processes, reduce working hours and thereby increase employee wages have been continuously sought.
In the public survey organised by the Estonian E-Commerce Association, e-Selver earned two awards: the title of the best e-store in the category of food e-stores and the title of the people's favourite e-store in general.
In addition to Ringtee and Järve Selver, Selver plans to renovate one more store and open at least one new store this year. In the first quarter, 14 Selver stores started issuing identity documents issued by the Police and Border Guard Board. The plan is to start providing this service in additional 27 Selver stores by the end of the second quarter.
Department stores
The sales revenue of the Kaubamaja department stores segment in the first three months of 2023 was 24.7 million euros, 14.1% more than in the same period of the previous year. The pre-tax loss of the Kaubamaja department store segment in the first quarter of 2023 was 0.8 million euros. The pre-tax loss decreased by 0.9 million euros.
The sales revenue of the department stores per square metre of sales area was 0.31 thousand euros per month in the first three months, which is 20.9% higher than in the same period last year. Russia's full-scale war in Ukraine, which began on February 24 last year, affected second-half sales in the first quarter of last year. This spring, however, customer interest was high and the number of visits to stores was much higher than last year. In addition, the number of customers increased both in terms of domestic customers and tourists. The discount of winter season goods was affected by a warmer than average winter, which is why the discount percentages were higher this year, but the increased sales volumes compensated the lower margin and had a positive effect on the result. The spring season started very successfully and several newly added brands in the fashion and home design were of interest to customers. The Ilu Aeg campaign once again broke the record for the highest sales numbers.
In the first quarter of 2023, the sales revenue of OÜ TKM Beauty Eesti, which operates the I.L.U. cosmet-ics stores, was 1.7 million euros, 25.8% more than in the same period in 2022. In the first quarter, the profit was 0.04 million euros, which compared to the loss of the comparable period in 2022, improved by 0.06 million euros. The most important event of the first quarter was the renovation of the Ülemiste I.L.U. cosmetics store, where the sales area of the store increased by 48.8% to 460 square metres. In addition, the NYX make-up shop-in shop with a separate entrance was opened. Despite the business inter-ruption in the Ülemiste store lasting for more than a month, the sales result of the entire chain was posi-tive thanks to the concept innovations and successful campaigns that took place last year. In March, the pilot of environmental awareness raising campaign 'Ilupakend annab boonust' was launched, encouraging customers to return empty beauty product packages to the store by rewarding them with bonus points awarded to their Partnerkaart card. The campaign is organised in cooperation with Neular and Gravels, companies which recycle plastic and glass packaging.
Car trade
The sales revenue of the car trade segment in the first quarter of 2023 was 41.7 million euros. The sales revenue increased by 22.7% compared to the previous year. The consolidated pre-tax profit of the segment was 3.0 million euros in the first quarter, which is 0.9 million euros more than in the previous year.
In the first three months of the year, a total of 1,461 new passenger cars were sold, which is 14.4% more than in the previous year. Despite the still volatile supply of new cars, the car segment managed to achieve an excellent sales result. The problems with the availability of cars in recent years have helped to maintain a higher sales margin. In the Group's car segment, the sales volume of used cars increased by nearly a third in the first quarter. Customers have begun to increasingly value more environmentally friendly cars, which is why customers' interest in electric cars has increased. Unfortunately, the supply of electric cars in the Baltics has not yet caught up with the demand.
Security segment
The sales revenue of the security segment outside the Group in the first quarter of 2023 was 2.9 million euros, increasing by 25.6% in comparison with the same period of last year. The pre-tax profit of the segment in the first quarter was 0.1 million euros, increasing by 0.05 million euros compared to the same period last year.
Turnovers of all business areas increased in the first quarter and profitability also improved. Several important clients were added and the portfolio of services increased. We started offering a social security service to the elderly in the city of Tallinn in cooperation with Koduandur OÜ. Various input prices have increased and the pressure on costs is strong, but the company has been able to successfully cope with it through efficient operations and volume growth.
In February, the security segment acquired the security systems wholesale company AS Walde, which creates opportunities to bring new products to the market and develop security systems wholesale activities.
Real estate
The sales revenue of the real estate segment outside the Group in the first quarter of 2023 was 1.6 million euros, increasing by 6.0% in comparison with the first quarter of the last year. The pre-tax profit of the segment was 2.5 million euros in the first quarter. The profit decreased by 6.3% in the reference period.
The growth of the sales revenue of the segment is largely due to the rental market for business premises, which has revived after the coronavirus restrictions. New tenants have been added to the rental premises of both Tallinna Kaubamaja Gallery and Tartu Kaubamaja Centre. In the past year, a commercial building in Kuldiga, Latvia, was leased out. The caution that characterised the economic environment at the end of the year, which was also reflected in the number of visitors to the centres, has returned to growth since the beginning of the year and the number of visits is on the rise. Most of the loan portfolio of the Group is concentrated in the real estate segment. The increase in the cost of loan money caused by the increase in interest rates in the euro area, implemented to tighten monetary policy by the European Central Bank, led to a slight decrease in profit for the segment. The interest expense has multiplied compared to the reference base of a year ago.
At the end of last year, the construction of a solar park on the roof of the Viimsi Centre began. The completion of the park is planned for spring. This is the second building in the row with an energy production plant installed on its roof. The produced electricity is mainly used for the building itself. It is planned to open a newly built car wash in the immediate vicinity of Peetri Selver in May, which will be operated by a party outside the Group. The Group continues to pay great attention to improving the energy efficiency of buildings.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In thousands of euros
| 31.03.2023 | 31.12.2022 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 31,017 | 22,436 |
| Trade and other receivables | 21,641 | 27,200 |
| Inventories | 90,758 | 89,194 |
| Total current assets | 143,416 | 138,830 |
| Non-current assets | ||
| Long-term receivables and prepayments | 292 | 299 |
| Investments in associates | 1,791 | 1,722 |
| Investment property | 63,635 | 63,623 |
| Property, plant and equipment | 421,760 | 420,600 |
| Intangible assets | 22,069 | 21,723 |
| Total non-current assets | 509,547 | 507,967 |
| TOTAL ASSETS | 652,963 | 646,797 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Borrowings | 94,715 | 97,107 |
| Trade and other payables | 128,693 | 111,449 |
| Total current liabilities | 223,408 | 208,556 |
| Non-current liabilities | ||
| Borrowings | 209,165 | 190,825 |
| Deferred tax liabilities | 5,299 | 5,299 |
| Provisions for other liabilities and charges | 528 | 458 |
| Total non-current liabilities | 214,992 | 196,582 |
| TOTAL LIABILITIES | 438,400 | 405,138 |
| Equity | ||
| Share capital | 16,292 | 16,292 |
| Statutory reserve capital | 2,603 | 2,603 |
| Revaluation reserve | 106,362 | 106,981 |
| Retained earnings | 89,306 | 115,783 |
| TOTAL EQUITY | 214,563 | 241,659 |
| TOTAL LIABILITIES AND EQUITY | 652,963 | 646,797 |
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
In thousands of euros
| 3 months 2023 | 3 months 2022 | |||
| Revenue | 218,083 | 198,923 | ||
| Other operating income | 332 | 327 | ||
| Cost of merchandise | -158,573 | -146,313 | ||
| Services expenses | -15,895 | -14,637 | ||
| Staff costs | -25,852 | -22,347 | ||
| Depreciation, amortisation and impairment losses | -10,066 | -9,642 | ||
| Other expenses | -393 | -313 | ||
| Operating profit | 7,636 | 5,998 | ||
| Finance income | 1 | 1 | ||
| Finance costs | -1,806 | -1,159 | ||
| Share of net profit of associates accounted for using the equity method | 69 | 58 | ||
| Profit before tax | 5,900 | 4,898 | ||
| Income tax expense | -5,300 | -4,479 | ||
| NET PROFIT FOR THE FINANCIAL YEAR | 600 | 419 | ||
| 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 PROFIT FOR THE FINANCIAL YEAR | 600 | 419 | ||
| Basic and diluted earnings per share (euros) | 0.01 | 0.01 | ||
Raul Puusepp
Chairman of the Board
Phone +372 731 5000
