Market announcement

Title

AS Tallink Grupp Audited Annual Report of the 2022 Financial Year

Message

Dear shareholders

For the third year in a row, we are starting the review of the previous year
with the message "It was an unprecedented year in the history of our business."
While in 2021 this was due to the pandemic and its impacts, 2022 brought with it
a new kind of evil and different challenges with war breaking out in Europe,
which Tallink has not experienced in such proximity during its 33-year history.

Before 24 February 2022, pandemic restrictions were lifting for the first time
in nearly two years, borders were fully opening, passengers were returning to
our vessels and hotels, and hope was shining bright for the year ahead that was
going to see a rapid recovery of business. And recovery we did indeed see,
although it was somewhat dampened by the war, particularly in the first half of
the year, and the geopolitical and economic turbulence that echoed across the
globe as a result.

With the above in mind, the results of the Group's and all its employees'
efforts should be considered rather remarkable. The fact that despite
everything, we were still able to continue this path of recovery throughout the
year and cross the line back into the black with our financial result by the end
of the year, speaks volumes of the perseverance of the people who work for
Tallink, the loyalty of the customers who travel with Tallink and the faith of
the people who have continued to invest in Tallink. And for this, I thank you
all.

It is clear that in global history, the year 2022 will mostly be remembered for
the start of the war in Ukraine. For nearly a year already, Tallink has played
its part in the relief effort to support the millions of displaced Ukrainians,
both through free transport for refugees on our vessels and free transport of
essential humanitarian aid, but also through providing shelter to thousands of
Ukrainian refugees on two of our vessels, on Isabelle in Tallinn and on Victoria
I in Edinburgh. Since the start of the war in Ukraine, more than 5 000 Ukrainian
refugees had found temporary shelter on the vessel Isabelle. Tallink will
continue its support to the governments as long as it is needed with the
temporary accommodation, the contracts of which have undeniably also helped and
supported Tallink Grupp during the period when passenger numbers are still
recovering, and alternative work was necessary for our vessels not currently in
regular traffic.

The year, of course, was not all dark clouds and no silver linings. Passenger
numbers nearly doubled year on year to 5.5 million by the end of 2022, onboard
spending per passenger increased compared to previous years, there was
significant interest in our vessels for hire, which led to a number of charters
and charter extensions, and the icing on the cake, of course, was the arrival of
our newest fleet member and the most modern vessel on the Baltic sea - MyStar -
in December. All this has laid a strong foundation to build on in 2023.

The year ahead will see us continuing to focus on the rebuild and recovery of
our core routes between Estonia, Finland and Sweden, and ensuring an optimal
growth of these core routes in the future. We will pay close attention to the
passenger numbers and occupancy levels of the ships in regular traffic, and we
are not afraid to make changes in our operations if there is a clear need to do
so. We will also continue to monitor the need for short- and long-term vessel
chartering and, if the timing and opportunity are right, we will carry on with
the successful chartering projects, which have helped us keep our nose above
water during the COVID-19 years and thereafter.

We will certainly also keep our sights on the more distant future beyond 2023,
which will no doubt bring new opportunities and challenges. As we develop future
strategies, these will have a stronger focus than ever before on sustainability.
With new environmental regulations and directives, such as the Corporate
Sustainability Reporting Directive (CSRD) and amendments to the EU Emissions
Trading System (ETS) taking effect in the very near future, we are already today
reassessing the impact we have on the world around us and the impact the world
has on our business, and are taking the steps to reduce the negative impacts of
our operations. We are, in many ways, on the verge of a new tomorrow and making
sure we are ready for this, is essential for our long-term future.

Dear investors, customers, employees - I thank you once again for your faith,
loyalty and dedication to Tallink Grupp and everything we do and stand for. I
promise, on behalf of our Management Board and everyone within the Group, that
we will continue working hard in 2023 and beyond to ensure your faith, loyalty
and dedication to us is rewarded many times over in the years to come.

Yours sincerely,

Paavo Nõgene
Chairman of the Management Board


AS Tallink Grupp Audited Annual Report of the 2022 Financial Year

In the 2022 financial year (1 January - 31 December), AS Tallink Grupp and its
subsidiaries (the Group) carried 5.5 million passengers, which is 84.4% more
than in the financial year 2021. The number of cargo units transported increased
by 11.0% compared to the previous financial year.

The Group's audited consolidated revenue amounted to EUR 771.4 million (EUR
476.9 million in 2021), up by 61.7%. Revenue from route operations (core
business) increased by EUR 236.4 million to EUR 629.0 million compared to the
financial year 2021.

The audited EBITDA was EUR 135.8 million (EUR 58.3 million in 2021) and the
audited net profit for the period was EUR 13.9 million (net loss of EUR 56.6
million in the financial year 2021).

The following operational factors impacted the Group's revenue and operating
results in the financial year 2022:

  * In the beginning of the financial year, the Group's operations and operating
    results were continuously influenced by the COVID-19 in all home markets.
    The demand for travelling increased after the travel restrictions were
    lifted in February in Finland and Sweden, and in Estonia from mid-March.
  * The demand was negatively impacted by the strong COVID-19 related travel
    restriction imposed by Asian countries on outbound tourism as well as the
    war in Ukraine that Russia unleashed on 24 February 2022.
  * The Group operated 15 vessels - including 3 shuttle vessels, 2 cargo vessels
    and 4 cruise ferries as well as 6 vessels that were on charter (2 vessels on
    long-term and 4 vessels on short-term charter). In 2022, the Group sold
    cargo vessel Sea Wind in April and delivered the new shuttle vessel MyStar
    to the Tallinn-Helsinki route in mid-December.
  * The Group operated 3 hotels in Tallinn. The Riga Hotel that has remained
    closed since October 2020 will be re-opened in April 2023.
  * The planned maintenance works of vessels totalled to 138 days.
  * High global fuel prices impacted the Group's cost level throughout the year.
  * The Group continues to focus on cost efficiency through previously
    implemented measures and restoring profitable operations on its core routes.
  * The Group regularly monitors the developments on its core routes including
    the capacity of each route and continues to look for chartering options for
    vessels not used on the main routes.

Key figures

                                                   2022        2021        2020
-------------------------------------------------------------------------------
 Revenue (EUR million)                            771.4       476.9       442.9

 Gross profit/loss (EUR million)                  113.5        21.7       -43.5

 EBITDA¹ (EUR million)                            135.8        58.3           8

 EBIT¹ (EUR million)                               37.7         -37       -92.6

 Net profit/loss for the period (EUR
 million)                                          13.9       -56.6      -108.3



 Depreciation and amortisation¹ (EUR
 million)                                          98.1        95.3       100.7

 Capital expenditures¹ ²(EUR million)             203.3        20.2       100.1

 Weighted average number of ordinary shares
 outstanding                                743 569 064 694 444 381 669 882 040

 Earnings/loss per share¹ (EUR)                    0.02       -0.08       -0.16



 Number of passengers¹                        5 462 085   2 961 975   3 732 102

 Number of cargo units¹                         409 769     369 170     359 811

 Average number of employees¹                     5 023       4 360       6 104



 As at 31 December                                 2022        2021        2020
-------------------------------------------------------------------------------
 Total assets (EUR million)                    1 691.60    1 585.90    1 516.20

 Total liabilities (EUR million)                  984.7       893.4       801.9

 Interest-bearing liabilities¹ (EUR
 million)                                         853.5       779.9       705.1

 Net debt¹ (EUR million)                          738.6       652.4       677.3

 Net debt to EBITDA¹                                5.4        11.2        84.2

 Total equity (EUR million)                       706.9       692.5       714.3

 Equity ratio¹ (%)                               41.80%      43.70%      47.10%



 Number of ordinary shares outstanding      743 569 064 743 569 064 669 882 040

 Shareholders' equity per share (EUR)              0.95        0.93        1.07



 Ratios¹                                           2022        2021        2020
-------------------------------------------------------------------------------
 Gross margin (%)                                14.70%       4.50%      -9.80%

 EBITDA margin (%)                               17.60%      12.20%       1.80%

 EBIT margin (%)                                  4.90%      -7.80%     -20.90%

 Net profit/loss margin (%)                       1.80%     -11.90%     -24.50%



 ROA (%)                                          2.40%      -2.40%      -6.10%

 ROE (%)                                          2.10%      -8.20%     -14.10%

 ROCE (%)                                         3.10%      -2.80%      -7.20%

 Current ratio                                      0.7         0.6         0.4

¹ Alternative performance measures based on ESMA guidelines are disclosed in the
"Alternative performance measures" section of the report.
(2) Does not include additions to right-of-use assets.

Sales and segments

In 2022, the Group's total revenue increased by EUR 294.5 million to EUR 771.4
million. Total revenue in 2021 was EUR 476.9 million.

Revenue from route operations (core business) increased by EUR 236.4 million to
EUR 629.0 million compared to the financial year 2021.

In 2022, the Group's ships carried a total of 3.1 million passengers on the
Estonia-Finland route, up by 76.9% year-on-year. The number of transported cargo
units increased by 19.0%. The revenue from the Estonia-Finland route increased
by EUR 93.3 million to EUR 277.8 million. The segment result improved by EUR
39.7 million to EUR 51.7 million. The segment reflects the operations of two
shuttle vessels, one cruise ferry, and one cargo vessel. Shuttle vessel MyStar
was added to the Estonia-Finland route in mid-December 2022. The cruise ferry
Silja Europa stopped operating on the Tallinn-Helsinki route in August 2022 due
to a charter agreement. The cargo vessel Sea Wind was sold at the end of April
2022. In the fourth quarter of 2022, the route was operated by two shuttle
vessels.

The number of passengers almost doubled on Finland-Sweden routes amounting to
1.9 million in 2022. The number of transported cargo units decreased by 9.9%.
The routes' revenue increased by EUR 115.6 million to EUR 274.3 million and the
segment result improved by EUR 14.6 million to a loss of EUR 1.0 million. The
segment reflects the operations of two cruise ferries on the Turku-Stockholm and
two cruise ferries on the Helsinki-Stockholm route. Starting from the fourth
quarter of 2022 the Turku-Kapellskär route was only operated by one cruise ferry
as the cruise ferry Galaxy stopped operating on the route from September 2022
due to a charter agreement.

On Estonia-Sweden routes the number of carried passengers almost doubled
compared to 2021 amounting to 0.5 million. The number of transported cargo units
remained at the same level as a year earlier. The revenue of Estonia-Sweden
routes increased by EUR 27.8 million to EUR 76.8 million and net loss increased
by EUR 4.0 million to EUR 11.0 million. Estonia-Sweden routes reflect the
operation of two cargo vessels and one cruise ferry as well as expenses related
to the suspended cruise ferry Victoria I until the ferry was chartered out.

Revenue from the segment other increased by a total of EUR 61.9 million and
amounted to EUR 147.4 million. The increase was mainly driven by chartering out
vessels, accommodation sales, opening of Burger King restaurants and to a lesser
extent by various retail activities. Additionally, items previously reported
under the geographical segment Latvia-Sweden routes are also included in the
segment other as the Latvia-Sweden route was not operated in 2022 and the
amounts are below the materiality threshold.

Restaurant and shop sales on board and on shore in the total amount of EUR
378.2 million (EUR 233.4 million in 2021) contributed almost half of total
revenue. Ticket sales amounted to EUR 191.9 million (EUR 99.1 million in 2021)
and sales of cargo transport to EUR 103.2 million (EUR 94.8 million in 2021).

Earnings

In 2022, the Group's gross profit grew more than four-fold compared to previous
financial year amounting to EUR 113.5 million. EBITDA increased by EUR 77.5
million and amounted to EUR 135.8 million.

The Group's profitability was mainly influenced by the following factors:

  * The demand for travelling picked up after the COVID-19 related restrictions
    were lifted in core markets in spring
  * Continued strong focus on cost control through previously implemented
    measures
  * Chartering out of 6 vessels including two on long-term charter and four on
    short-term charter
  * An increase in global fuel prices, which resulted in EUR 71.9 million higher
    fuel cost than in 2021

The Group's audited net profit for 2022 was EUR 13.9 million or EUR 0.019 per
share compared to a net loss of EUR 56.6 million or EUR 0.081 per share in 2021.

The cost of goods sold at shops and restaurants, which is the largest operating
cost item, amounted to EUR 160.6 million (EUR 110.5 million in 2021).

Fuel costs for 2022 amounted to EUR 144.1 million (EUR 72.2 million in 2021).
Fuel costs were impacted by an increase in global prices. As a result, annual
fuel costs increased by 99.5%. The Group makes continuous efforts to improve and
optimise its day-to-day operations and lower the fleet's fuel costs.

The Group's total personnel expenses amounted to EUR 162.9 million (EUR 124.0
million in 2021). Staff costs related to administrative staff and sales and
marketing staff were EUR 23.3 million and EUR 19.6 million, respectively (EUR
21.2 million and EUR 16.8 million, respectively, in 2021). The staff costs
related to servicing and technical personnel amounted to EUR 120.0 million
compared to EUR 86.1 million in 2021. The average number of employees in 2022
was 5 023 (4 360 in 2021).

Marketing and administrative expenses for the period amounted to EUR 74.3
million (EUR 62.1 million in 2021). Excluding personnel, administrative expenses
for the period amounted to EUR 14.1 million and sales and marketing expenses to
EUR 17.3 million (EUR 13.5 million and EUR 10.5 million, respectively, in 2021).

Amortisation and depreciation expense increased by EUR 2.8 million to EUR 98.1
million compared to 2021. There were no impairment losses related to the Group's
property, plant and equipment and intangible assets.

As a result of growth in interest-bearing liabilities, net finance costs
increased by EUR 2.8 million year-on-year to EUR 24.7 million.

Liquidity and cash flow

The Group's net operating cash flow for 2022 was positive at EUR 144.3 million
(EUR 59.4 million in 2021).

Net cash used in investing activities was EUR 200.3 million (EUR 19.4 million in
2021).

In 2022, the Group's loan repayments totalled EUR 110.1 million (EUR 14.7
million in 2021). Interest payments were EUR 23.5 million (EUR 19.3 million in
2021). The payment of previously postponed principal payments under existing
loan agreements restarted in the second quarter of 2022.

At 31 December 2022, the Group's cash and cash equivalents totalled EUR 114.9
million (EUR 127.6 million on 31 December 2021). In addition, available unused
overdraft credit lines amounted to EUR 135.0 million (EUR 134.8 million in
2021). The total liquidity buffer (cash, cash equivalents and unused credit
facilities) amounted to EUR 249.9 million on 31 December 2022 (EUR 262.4 million
on 31 December 2021).

In December 2022, the Group drew a EUR 196.3 million loan from KfW IPEX-Bank
GmbH Ltd. to finance the purchase of the EUR 252 million shuttle vessel MyStar.
The long-term loan was drawn at the delivery of the shuttle vessel and the
maturity of the fixed interest rate loan is twelve years. In management's
opinion, the Group has sufficient liquidity to support its operations.

Consolidated statement of profit or loss and other comprehensive income

 For the year ended 31 December, in thousands of EUR              2022     2021
-------------------------------------------------------------------------------
 Revenue                                                       771 387  476 937

 Cost of sales                                                -657 917 -455 282
-------------------------------------------------------------------------------
 Gross profit/loss                                             113 470   21 655



 Sales and marketing expenses                                  -38 796  -29 262

 Administrative expenses                                       -47 555  -45 633

 Impairment loss on receivables                                   -153      -99

 Other operating income                                         10 871   16 336

 Other operating expenses                                         -164      -28
-------------------------------------------------------------------------------
 Result from operating activities                               37 673  -37 031



 Finance income                                                    215       34

 Finance costs                                                 -24 871  -21 921

 Share of profit/loss of equity-accounted investees                -90      -80
-------------------------------------------------------------------------------
 Profit/loss before income tax                                  12 927  -58 998



 Income tax                                                      1 008    2 422



 Net profit/loss                                                13 935  -56 576

 Net profit/loss attributable to equity holders of the Parent   13 935  -56 576



 Other compherensive income

 Items that may be reclassified to profit or loss

 Exchange differences on translating foreign operations            480      123
-------------------------------------------------------------------------------
 Other comprehensive income                                        480      123



 Total comprehensive income                                     14 415  -56 453

 Total comprehensive income attributable to equity holders of
 the Parent                                                     14 415  -56 453



 Basic and diluted loss per share (in EUR)                       0.019   -0.081
-------------------------------------------------------------------------------


Consolidated statement of financial position

  As at 31 December, in thousands of EUR                     2022        2021
------------------------------------------------------------------------------
  ASSETS

  Cash and cash equivalents                               114 935     127 556

  Trade and other receivables                              31 380      29 298

  Prepayments                                               9 379      11 924

  Prepaid income tax                                           37           0

  Inventories                                              39 965      34 631
------------------------------------------------------------------------------
  Current assets                                          195 696     203 409



  Investments in equity-accounted investees                    75         165

  Other financial assets and prepayments                    3 622         555

  Deferred income tax assets                               21 840      21 840

  Investment property                                         300         300

  Property, plant and equipment                         1 438 286   1 323 353

  Intangible assets                                        31 823      36 293
------------------------------------------------------------------------------
  Non-current assets                                    1 495 946   1 382 506

  TOTAL ASSETS                                          1 691 642   1 585 915



  LIABILITIES AND EQUITY

  Interest-bearing loans and borrowings                   165 049     244 436

  Trade and other payables                                 86 934      91 687

  Payables to owners                                            6           6

  Income tax liability                                         35          47

  Deferred income                                          44 222      21 734
------------------------------------------------------------------------------
  Current liabilities                                     296 246     357 910



  Interest-bearing loans and borrowings                   688 465     535 489
------------------------------------------------------------------------------
  Non-current liabilities                                 688 465     535 489
------------------------------------------------------------------------------
  Total liabilities                                       984 711     893 399



  Share capital                                           349 477     349 477

  Share Premium                                               663         663

  Reserves                                                 66 363      67 930

  Retained earnings                                       290 428     274 446
------------------------------------------------------------------------------
  Equity attributable to equity holders of the Parent     706 931     692 516

  Total equity                                            706 931     692 516
------------------------------------------------------------------------------
  TOTAL LIABILITIES AND EQUITY                          1 691 642   1 585 915


Consolidated statement of cash flows

 For the year ended 31 December, in thousands of EUR               2022    2021
-------------------------------------------------------------------------------


 CASH FLOWS FROM OPERATING ACTIVITIES

 Net profit/loss for the period                                  13 935 -56 576

 Adjustments for:

 Depreciation and amortisation                                   98 136  95 313

 Net gain/loss on disposals of property, plant and equipment        -34    -494

 Net interest expense                                            24 622  21 843

 Loss from equity-accounted investees                                90      80

 Net unrealised foreign exchange gain/loss                          341     118

 Loss from investments                                                0      75

 Income tax                                                      -1 008    -852
-------------------------------------------------------------------------------
 Adjustments                                                    122 147 116 083

 Changes in:

 Receivables related to operating activities                     -2 036  -3 918

 Prepayments related to operating activities                     -1 602  -3 007

 Inventories                                                     -5 334  -6 513

 Liabilities related to operating activities                     17 415  13 447
-------------------------------------------------------------------------------
 Changes in assets and liabilities                                8 443       9

 Cash generated from operating activities                       144 525  59 516

 Income tax paid                                                   -227    -137
-------------------------------------------------------------------------------
 NET CASH FROM/USED IN OPERATING ACTIVITIES                     144 298  59 379



 CASH FLOWS FROM INVESTING ACTIVITIES

 Purchase of property, plant and equipment and intangible
 assets                                                        -203 322 -20 192

 Proceeds from disposals of property, plant and equipment         2 768     816

 Interest received                                                  215       3
-------------------------------------------------------------------------------
 NET CASH USED IN INVESTING ACTIVITIES                         -200 339 -19 373



 CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from loans received                                   196 290  90 000

 Repayment of loans received                                   -110 055 -14 667

 Change in overdraft                                               -165 -15 556

 Payment of lease liabilities                                   -17 157 -14 903

 Interest paid                                                  -23 516 -19 296

 Payment of transaction costs related to loans                   -1 977    -495

 Issue of shares                                                      0  34 633
-------------------------------------------------------------------------------
 NET CASH FROM FINANCING ACTIVITIES                              43 420  59 716



 TOTAL NET CASH FLOW                                            -12 621  99 722
-------------------------------------------------------------------------------


 Cash and cash equivalents at the beginning of period           127 556  27 834

 Change in cash and cash equivalents                            -12 621  99 722
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end of period                 114 935 127 556


Anneli Simm
Investor Relations Coordinator

AS Tallink Grupp
Sadama 5
10111 Tallinn
E-mail [email protected]