Market announcement

Title

AS Ekspress Grupp quarterly report for Q4 2008

Message

In 2008, the sales revenue of Ekspress Group increased by 15% and EBITDA        
increased by 13% as compared to last year. In the 4th quarter of 2008, the sales
revenue declined by 1% and EBITDA declined by 16% as compared to the same period
last year. The stalling of the sales revenue growth and the decline of EBITDA in
the fourth quarter was caused by the decline of advertising revenue related to  
the economic recession.                                                         

Key figures characterising the activities of Ekspress Group in 2008             
                                                                                
- 	Sales revenue EEK 1 323.4 million (EUR 84.6 million), annual growth 15%      
                                                                                
- 	Gross profit EEK 337.1 million (EUR 21.5 million), annual growth 11%         
                                                                                
- 	EBITDA EEK 175.8 million (EUR 11.2 million), annual growth 13%               
                                                                                
- 	EBIT EEK 114.3 million (EUR 7.3 million), annual change -2%                  
                                                                                
- 	Net profit EEK 49.5 million (3.2 million), annual change -46%                

Key figures characterising the activities of Ekspress Group in the 4th quarter  
of 2008                                                                         
- 	Sales revenue EEK 360.1 million (EUR 23.0 million), year-over-year change -1%
                                                                                
- 	Gross profit EEK 88.3 million (EUR 5.6 million), year-over-year change -1%   
                                                                                
- 	EBITDA EEK 40.2 million (EUR 2.6 million), year-over-year change -16%        
                                                                                
- 	EBIT EEK 26.2 million (EUR 1.6 million), year-over-year change -22%          
                                                                                
- 	Net profit EEK 5.8 million (0.4 million), year-over-year change -73%         

Key events of the 4th quarter of 2008                                           
-   launching of Delfi Infoliin 1184 (Delfi Information Line 1184) that replaced
the previous 1184 Numbriinfo.                                                   
-   launching of the upgraded web publication of the womens' magazine Moteris   
www.moteris.lt in Lithuania                                                     
-   launching of the video news portal Delfi.TV in Estonia and Latvia           
-   www.ekspresskinnisvara.ee became the second most popular real estate portal 
in Estonia at the end of October based on the number of visits                  
- opening of a bookstore in Rocca Al Mare shopping centre in Tallinn under the  
trademark of "Rahva Raamat”                                                     

Overview of the advertising market                                              
According to the data provided by media analyst Toomas Leito, the advertising   
revenue of magazines has fallen by 18% as compared to the previous year's level.
The decline of the advertising revenue of newspapers which is mostly impacted by
shrinkage of employment ads, real estate and automobile ads was 10%. In the     
fourth quarter, the decline of the Estonian market for printed ads continued,   
being considerably steeper as compared to previous quarters: the advertising    
revenue of newspapers fell by 22% and that of magazines fell by 17% as compared 
to the fourth quarter of 2007. At the same time, Internet advertising revenue   
stayed at the same level in the fourth quarter as in the same period last year. 
Web ads are not increasing as fast as in previous periods, but growth continues 
and the share of web ads in the total advertising market has accelerated. In    
light of the panic prevailing in the fourth quarter due to the crash of the     
financial markets and the overall economic recession, such results were to be   
expected.                                                                       


Overview of the segments                                                        
In the fourth quarter of 2008, Ekspress Group continued to focus on its five    
principal segments: online media, publishing, printing services, book sales and 
information services. From 2008, the online media segment also includes the web 
publications of AS Eesti Päevaleht, SL Õhtuleht AS and Eesti Ekspress Kirjastus 
AS as well as automobile, real estate and employment web environments of Eesti  
Ekspress Kirjastus AS which were previously included in the publishing segment. 
All web environments to be set up in the future are also included in the online 
media segment.                                                                  
In the fourth quarter of 2008, the largest revenue growth in absolute terms as  
compared to the same period in 2007 was attained in the segment of printed      
services where sales growth was attained through an increase of operating       
capacities related to the launching of the new printing press in October 2007.  
Book sales also increased as a result of the opening of new stores. In the      
fourth quarter, sales revenue declined the most in the publishing segment as a  
result of a major decline of the advertising market at the year-end.            
In the segment of online media Delfi continues to be the leading news portal in 
the Baltic States, the users of which grew in all markets as compared to the    
same period in 2007. A total of 2.5 million people in the Baltic States and the 
Ukraine use Delfi portals. According to the data by TNS Metrix, Delfi continued 
to be the largest news portal in Estonia in the third quarter with 549 000      
unique users per month, growing its user base by 28 000 unique users as compared
to the same period last year. Delfi's largest competitor www.postimees.ee had   
445 000 unique visitors during the same period. According to the data by Gemius 
Audience, Delfi had on average 924 000 unique visitors per month in Lithuania in
the fourth quarter and thereby continued to be the largest news portal there.   
The competing news portals www.lrytas.lt and www.alfa.lt had 665 000 and 527 000
unique visitors, respectively, in the same period.                              
According to the data by Gemius Audience, Delfi is also the largest news portal 
in Latvia with 589 000 unique users per month. Delfi's competing news portals in
Latvia, www.tvnet.lv had 420 000 and www.apollo.lv had 371 000 unique visitors. 
As of the balance sheet date, AS Delfi together with its Latvian, Lithuanian and
Ukraine subsidiaries manages the Estonian and Russian-language portals in       
Estonia, http://www.delfi.ee and rus.delfi.ee, the Latvian and Russian-language 
portals in Latvia http://www.delfi.lv and rus.delfi.lv, the Lithuanian and      
Russian-language portals in Lithuania http://www.delfi.lt, http://www.klubas.lt,
http://ru.delfi.lt) as well as the news portal in the Ukraine                   
http://www.delfi.ua.                                                            
The entertainment portal www.klubas.lt launched in Lithuania in the first       
quarter was the largest entertainment portal with its 253 000 unique users in   
the fourth quarter. The new web version www.panele.lt of the largest            
women-oriented monthly magazine “Panele” that was launched in Lithuania in the  
second quarter had 213 000 unique visitors per month in the fourth quarter,     
being a magazine's web version with the largest user base. In the fourth        
quarter, the womens' magazine Moteris introduced an upgraded website in         
Lithuania, www.moteris.lt, that on average was visited by 73 000 unique visitors
per month. The entertainment portal www.mango.lv. launched in Latvia in July    
strengthened its leadership position as the leading portal in its field, gaining
33 000 unique visitors per month in the fourth quarter. The entertainment portal
Publik.ee launched in Estonia in August by Delfi became fast the leading portal 
in its field, having on average 237 000 unique visitors per week.  The science  
and technology news environment Forte.ee launched in Estonian in September had  
89 000 unique visitors per week as of the end of the fourth quarter.            

The video news portal Delfi.TV was launched in Estonia in October and in Latvia 
in November, enabling to watch an Internet-based video portal for the first time
on a TV screen at home.                                                         
In Estonia, AS Ekspress Kirjastus manages the automobile portal                 
www.ekspressauto.ee, the real estate portal www.ekspresskinnisvara.ee and the   
employment portal www.ekspressjob.ee. At the end of October,                    
www.ekspresskinnisvara.ee that had been launched at the beginning of the year   
became the second most visited real estate portal with 80 000 unique visitors   
per week according to the data by the website measurement system TNS Metrix in  
Estonia, surpassing such portals as kv.ee, soov.ee and kuldnebors.ee. This year,
ekspresskinnisvara.ee has been the fastest growing real estate portal, the      
factors behind this fast growth include a good technical solution and           
comprehensive cooperation with Delfi.                                           
The automobile portal ekspressauto.ee continued to secure its second place in   
the market, reaching an average of 26 000 unique visitors per week. The         
employment portal ekspressjob.ee launched in the second quarter, launched a     
column of employment news in Delfi in December which increased the user base of 
ekspressjob.ee to 30 000 unique visitors per week.                              
The goal of the Group's management is to strengthen the Group's market          
leadership position in the Internet markets of all Baltic States.               
In December, Delfi started to implement the restructuring project, and as its   
first stage, the subsidiary of AS Ekspress Group in Latvia under the name of SIA
Delfi Holding was registered on 23 December 2008. On 30 December 2008, a share  
purchase agreement was entered into between  Delfi AS (Estonia) and SIA Delfi   
Holding for the sale of 100% of the shares of Delfi AS (Latvia).                
The year-over-year sales revenue growth of Delfi Group in the fourth quarter of 
2008 was 9%. In the fourth quarter of 2008,  EBITDA made up 41% of the level of 
the same period in 2007.  The decline in EBITDA in the fourth quarter was       
related to the costs of launching Delfi Ukraina in the amount of EEK 1.4 million
(EUR 0.09 million), as well as additional development projects such as klubas.lt
in Lithuania in the amount of EEK 1.0 million (EUR 64 thousand), mango.lv in    
Latvia in the amount of EEK 0.7 million (EUR 45 thousand), publik.ee in Estonia 
in the amount of EEK 0.7 million (EUR 45 thousand) and forte.ee in Estonia in   
the amount of EEK 0.4 million (EUR 25 thousand). Fourth quarter's expenses were 
also impacted by the termination fees paid to employees. Excluding the costs    
related to the aforementioned development projects, EBITDA made up 73% of the   
level of the same period in 2007. The sales revenue growth of Delfi Group in    
2008 was 13% as compared to 2007 and EBITDA made up 79% of the level in 2007.   
Excluding the costs related to the aforementioned development projects, EBITDA  
declined by 4% in 2008.                                                         
As advertising revenue is extremely sensitive to the economic environment, the  
economic cool-down has led to a decline of advertising revenue in the publishing
segment. In the fourth quarter, the Group's advertising revenue in the          
publishing segment declined by 26%. The economic cool-down in the fourth quarter
has also had an impact on the single copy sales of periodicals, which decreased 
by 8% as compared to the fourth quarter of 2007. At the same time, the          
subscriptions decreased only by 1%. The stalling of the advertising revenue     
growth has a major impact on the profit in the publishing segment, because the  
gross margin of advertising revenue is significantly higher than that of        
subscriptions and single copy sales. EBITDA of the publishing sector fell by 13%
in the fourth quarter as compared to the same period in 2007. The subscription  
campaign of Eesti Päevaleht regarding the book series “Eesti Lugu” (Estonian    
Story) dealing with the history of Estonia ended successfully in the fourth     
quarter, helping Eesti Päevaleht to gain new subscribers as well as to increase 
its single copy sales. The programme “Värske Ekspress” which is shown on TV3 on 
Thursdays has helped to increase the reader base of  Eesti Ekspress in the      
fourth quarter.                                                                 
In the segment of printing services, the sales revenue growth of the printing   
company was a decent 9% in the fourth quarter of 2008 as compared to same period
in 2007. The addition of new contracts to better utilise the operating capacity 
of the printing machine taken into use in October 2007 enabled to increase the  
Company's exports by 73% in October 2008 and increase the total sales revenue of
the printing company to an almost record-breaking level. Similarly to           
publishing, printing services are also characterised by seasonality, with one   
peak being from March to May and the second, in October and November.           
On 15 December 2008, the printing company entered into a purchase and sales     
agreement regarding the sale of the 6859 m2 unimproved land plot in its         
possession in the amount EEK 9 million (EUR 0.6 million). The EBITDA growth of  
the printing company in the fourth quarter was 31%. The annual EBITDA growth of 
the printing company was 22%, excluding the proceeds from the sale of the land  
plot in the amount of EEK 6.6 million (EUR 0.4 million).                        

With regard to book sales, 8% sales growth was attained in the fourth quarter.  
The growth of the retail sales of books was even 37%, achieved through the      
addition of new sales premises. In 2008, three new stores were opened, of which 
the store Rahva Raamat opened on 800m2 space in Rocca al Mare shopping centre on
1 October is the second largest bookstore in Estonia. Rahva Raamat will open    
another new store next year, in Pärnu Keskus located in Pärnu.                  
The sales revenue of information services increased by 6% in 2008 as compared to
2007; however, in the fourth quarter it declined somewhat, by 2% as compared to 
the same period in 2007. However, the sales of information services without the 
effect of periodisation of revenue increased by 17%. The decline of EBITDA in   
the fourth quarter of 2008 and in 2008 was related to losses incurred in Romania
and the write-off of doubtful receivables in Estonia. As of the balance sheet   
date,  Ekspress Group has exited its business of information services in        
Romania. The Company launched Delfi Infoliin 1184 (Delfi Information Line 1184) 
in cooperation with Delfi that will replace the previous 1184 Numbriinfo. In    
addition to the information available in the Internet environment www.ee.ee, the
new brand Delfi Infoliin 1184 also includes Delfi company search. Delfi Infoliin
1184 is a universal information telephone which provides information as desired 
in Estonian, English or Russian languages. We expect cooperation with Delfi to  
contribute to sales revenue growth of information services.                     
Profit                                                                          
Given the seasonal nature of the advertising business, the addition of AS       
Maaleht and Delfi Group has significantly increased the share of advertising    
revenue in the Group's sales revenue, therefore the impact of the seasonal      
nature on the Group's sales revenue and profit is larger than ever. The economic
cool-down which deepened in the fourth quarter had an impact on the Group's     
revenue and profit, manifested in a decline of advertising revenue of newspapers
and magazines as well as the related decline in profit.                         
As compared to the 1% decline of sales revenue, direct costs increased by 1% in 
the fourth quarter as a result of which the gross margin declined from 26.6% to 
24.5% in the fourth quarter. Besides appreciation of printing and distribution  
services, depreciation included in direct expenses has also increased.          
EBITDA totalled EEK 40.2 million (EUR 2.6 million) in the fourth quarter of     
2008, making up 84% of the result of the same period in 2007. In the fourth     
quarter, operating profit reached EEK 26.1 (EUR 1.7), being less than the level 
of 2007. In the fourth quarter, the operating margin was 7.3% (4th quarter of   
2007: 9.2%). The slowdown of EBIT is besides the decline of advertising revenue 
due to higher depreciation related to the intangible assets added in the        
acquisition of Delfi and Maaleht and other investments made into fixed assets in
2007.                                                                           
The marketing expenses of the Group have increased due to the addition of new   
companies (AS Maaleht, Delfi Group, TeleTell) in the Group in the second half of
2007 as well as the launching of new products and marketing campaigns such as   
the launching of automobile, real estate and employment web environments and the
new book project of Eesti Päevaleht. In addition to the aforementioned reasons, 
the marketing costs in the fourth quarter also increased as a result of the     
Hotline brand advertising campaign and the production costs of the TV programme 
Värske Ekspress.    Annual growth as compared to 2007 is 16%. However, marketing
costs decreased by 12% in the fourth quarter as compared to the same period in  
2007, attained through optimisation of marketing expenses.                      
Administrative expenses decreased by 14% in the fourth quarter as compared to   
the same period last year. Wages and salaries included in administrative        
expenses decreased by 20% as compared to the same period in 2007. The decline of
administrative expenses has been attained through implementation of cost-cutting
measures described below. The decline of wages and salaries has been attained   
through freezing of wage increases and laying off of employees.                 

Other operating income includes a gain of EEK 6.6 million (EUR 0.4 million) from
recognising the sale of the 6859 m2 unimproved land plot in Printall's          
possession pursuant to the purchase and sales agreement entered into on 15      
December 2008.                                                                  

The Group's financial expenses reached EEK 18.7 million (EUR 1.2 million) in the
fourth quarter. Financial expenses were mostly made up of interest expenses in  
the amount of EEK 16.4 million (EUR 1.0 million) (4th quarter of 2007: EEK 14.7 
million (EUR 0.9 million). Higher interest expenses are related to the loan in  
the amount of EEK 674.4 million (EUR 43.1 million) taken from the syndicate of  
SEB, Sampo Bank and Nordea Bank for the acquisition of Delfi and Maaleht in the 
fourth quarter of 2007. As of 31 December 2008, the outstanding loan balance is 
EEK 574.1 million (EUR 36.7 million).                                           

The net profit (after taxes and minority interest) of Ekspress Group totalled   
EEK 5.8 million (EUR 0.4 million) in the fourth quarter of 2008. As compared to 
the same period in 2007, the net profit decreased by 73%. In addition to the    
events impacting the operating profit, the stalling of the net profit growth is 
related to the increase of interest expenses in connection with the syndicate   
loan.                                                                           

Under the conditions of a deepening economic recession, we have continued in the
fourth quarter with the cost cutting programme introduced in the previous       
quarters. The main components of the programme include savings of paper and     
printing costs, savings of IT development costs and savings of payroll expenses.
Of general expenses, training, representation, parking, etc. other costs have   
been curbed in addition to the cost saving measures announced earlier. The      
biggest cost savings source is payroll expenses, which is mainly achieved       
through lay-offs of employees. As of the balance sheet date, 60 employees have  
been laid off. Lay-offs relate mostly to Ajakirjade Kirjastus, Ekspress         
Kirjastus, Eesti Päevaleht and Delfi. Due to the additional lay-offs of         
employees in the fourth quarter, termination benefits are also included in the  
payroll expenses of the fourth quarter. The effect of saving these payroll      
expenses will be achieved in the next year. The additional lay-offs in the      
fourth quarter were related to a major decline of advertising revenue as well as
combining of support functions necessary for increasing business effectiveness. 
The reduction in the number of employees and reduction of wages will continue in
2009.                                                                           

Balance sheet and investments                                                   
As of 31 December 2008, the consolidated balance sheet total of Ekspress Group  
was EEK 1 706.5 million (EUR 109.0 million), decreasing by 2.6% year-over-year. 
As of 31 December 2008, current assets decreased by 6% year-over-year, reaching 
EEK 287.6 million (EUR 18.4 million). Current liabilities increased by 4%       
year-over-year, reaching EEK 457.6 million (EUR 29.2 million) at the year-end.  
Of current liabilities, borrowings decreased by 11.5% million, reaching EEK     
176.2 million (EUR 11.3) at the year-end.  At the same time, the payables to the
Group companies increased by 27% and to the suppliers, by  5%.                  
As of the end of December, the Group's long-term borrowings totalled EEK 628.0  
million (EUR 40.1 million), decreasing by EEK 113.8 million (EUR 7.3 million)   
year-over-year or 15%. Of the long-term borrowings, bank loans constitute EEK   
524.3 million (EUR 33.5 million) and the finance lease liability is EEK 103.5   
million (EUR 6.6 million). Of the long-term loans, the non-current portion of   
the loan taken by Ekspress Group from the syndicate of SEB, Sampo Bank and      
Nordea Bank in the amount of EEK 674.4 (EUR 43.1 million) in the third quarter  
of 2007 totals 476.9 million (EUR 30.5 million). The total outstanding balance  
of this loan as of 31 December 2008 was EEK 574.1 million (EUR 36.7 million).   
Property, plant and equipment stood at EEK 389.6 million (EUR 24.9 million) as  
of year-end, decreasing by 4% year-over-year. As of the year-end, intangible    
assets were EEK 1 013.4 million (EUR 64.7 million), decreasing by 1%            
year-over-year. Of intangible assets,  EEK 822.3 million (EUR 52.6 million) is  
related to the carrying value of trademarks, customer relations and software as 
well as goodwill which arose in the acquisition of Delfi Group. Investment      
property has increased due to the recognition of the 6859 m2 unimproved land    
plot of Printall as the investment property with the market value of EEK 9.0    
million (EUR 0.6 million) as of 31 December 2008.                               


Employees                                                                       
As of the end of December 2008 the Ekspress Group employed 2 393 people (As of  
31 December 2007: 2 292  people). The average number of employees in the twelve 
months of 2008 was 2 375 ( 12 months of 2007: 2 274). Over the twelve months of 
2008, wages and salaries paid to the employees of the Ekspress Group totalled   
EEK 309.3  million (EUR 19.8 million), (12 months of 2007: EEK  241.5 million   
(EUR 15.4  million))*.                                                          

*proportional part from joint ventures                                          

Selected financial indicators                                                   

--------------------------------------------------------------------------------
| Performance indicators (%) |    |      12 months 2008 |       12 months 2008 |
--------------------------------------------------------------------------------
| Sales growth (%)           |           15%            |         24%          |
--------------------------------------------------------------------------------
| Gross profit margin (%)    |           25%            |         26%          |
--------------------------------------------------------------------------------
| Net profit margin (%)      |            4%            |          8%          |
|                            |                          |                      |
--------------------------------------------------------------------------------
| Equity ratio (%)           |           36%            |         33%          |
--------------------------------------------------------------------------------
| ROA (%)                    |            3%            |          8%          |
--------------------------------------------------------------------------------
| ROE (%)                    |            8%            |         21%          |
--------------------------------------------------------------------------------
| Operating profit margin    |            9%            |         10%          |
| (%)                        |                          |                      |
--------------------------------------------------------------------------------
| Liquidity ratio            |           63%            |         69%          |
|                            |                          |                      |
--------------------------------------------------------------------------------
| Debt equity ratio (%)      |           139%           |         167%         |
--------------------------------------------------------------------------------
| Financial leverage (%)     |           55%            |         58%          |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|                  2,61                  |                5,00                 |
--------------------------------------------------------------------------------
|                  0,17                  |                0,32                 |
--------------------------------------------------------------------------------
| Earnings per share         |                                                 |
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--------------------------------------------------------------------------------
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| (sales 12 months 2008 -sales 12 months 2007) /                               |
| sales 12 months 2007*100                                                     |
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| gross profit/ sales*100                                                      |
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| net profit/ sales*100                                                        |
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| equity / (equity + debt) * 100                                               |
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| net profit/assets *100                                                       |
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| net profit/equity *100                                                       |
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| operating profit/ sales*100                                                  |
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| current assets/current liabilities                                           |
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| interest bearing liabilities/equity*100                                      |
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| interest bearing liabilities-cash and cash equivalents/interest bearing      |
| liabilities + equity *100                                                    |
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Consolidated interim balance sheet (unaudited)                                  
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|                                     EEK                                      |
--------------------------------------------------------------------------------
|                           31.12.2008 |                            31.12.2007 |
--------------------------------------------------------------------------------
| (thousand)                                  |                                |
--------------------------------------------------------------------------------
| ASSETS                                      |               |                |
--------------------------------------------------------------------------------
| Current assets                              |               |                |
--------------------------------------------------------------------------------
| Cash and cash equivalents                   |        46 388 |         68 970 |
--------------------------------------------------------------------------------
| Other financial assets at fair value        |         8 025 |          4 606 |
| through profit or loss                      |               |                |
--------------------------------------------------------------------------------
| Trade and other receivables                 |       166 844 |        165 828 |
--------------------------------------------------------------------------------
| Inventories                                 |        66 355 |         66 161 |
--------------------------------------------------------------------------------
| Total current assets                        |       287 612 |        305 565 |
--------------------------------------------------------------------------------
| Non-current assets                          |               |                |
--------------------------------------------------------------------------------
| Trade and other receivables                 |         3 270 |         13 671 |
--------------------------------------------------------------------------------
| Investments in associates                   |           302 |            964 |
--------------------------------------------------------------------------------
| Investment property                         |        12 341 |          3 732 |
--------------------------------------------------------------------------------
| Property, plant and equipment (note 4)      |       389 600 |        404 880 |
--------------------------------------------------------------------------------
| Intangible assets (note 4)                  |     1 013 379 |      1 023 419 |
--------------------------------------------------------------------------------
| Total non-current assets                    |     1 418 892 |      1 446 666 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                                |     1 706 504 |      1 752 231 |
--------------------------------------------------------------------------------
| SHAREHOLDERS EQUITY AND LIABILITIES         |               |                |
--------------------------------------------------------------------------------
| Liabilities                                 |               |                |
--------------------------------------------------------------------------------
| Current liabilities                         |               |                |
--------------------------------------------------------------------------------
| Borrowings (note 5)                         |       176 219 |        199 013 |
--------------------------------------------------------------------------------
| Trade and other payables                    |       281 416 |        240 703 |
--------------------------------------------------------------------------------
| Total current liabilities                   |       457 635 |        439 716 |
--------------------------------------------------------------------------------
| Non-current liabilities                     |               |                |
--------------------------------------------------------------------------------
| Borrowings (note 5)                         |       627 811 |        741 585 |
--------------------------------------------------------------------------------
| Other long term liabilities                 |           163 |             88 |
--------------------------------------------------------------------------------
| Total non-current liabilities               |       627 974 |        741 673 |
--------------------------------------------------------------------------------
| Total liabilities                           |     1 085 609 |      1 181 389 |
--------------------------------------------------------------------------------
| Equity                                      |               |                |
--------------------------------------------------------------------------------
| Capital and reserves attributable to equity |               |                |
| holders of the Parent company               |               |                |
--------------------------------------------------------------------------------
| Share capital                               |       189 711 |        189 711 |
--------------------------------------------------------------------------------
| Share premium                               |       183 495 |        183 495 |
--------------------------------------------------------------------------------
| Reserves                                    |        10 222 |         10 222 |
--------------------------------------------------------------------------------
| Retained earnings                           |       235 508 |        185 981 |
--------------------------------------------------------------------------------
| Currency translation reserve                |         1 671 |            480 |
--------------------------------------------------------------------------------
| Total capital and reserves attributable to  |       620 607 |        569 889 |
| equity holders of the Parent company        |               |                |
--------------------------------------------------------------------------------
| Minority interest                           |           288 |            953 |
--------------------------------------------------------------------------------
| Total equity                                |       620 895 |        570 842 |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES                |     1 706 504 |      1 752 231 |
--------------------------------------------------------------------------------

Consolidated interim balance sheet (unaudited)                                  
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|                                     EUR                                      |
--------------------------------------------------------------------------------
|                          31.12.2008 |                             31.12.2007 |
--------------------------------------------------------------------------------
|  (thousand)                                    |                             |
--------------------------------------------------------------------------------
| ASSETS                                         |              |              |
--------------------------------------------------------------------------------
| Current assets                                 |              |              |
--------------------------------------------------------------------------------
| Cash and cash equivalents                      |        2 965 |        4 408 |
--------------------------------------------------------------------------------
| Other financial assets at fair value through   |          513 |          294 |
| profit or loss                                 |              |              |
--------------------------------------------------------------------------------
| Trade and other receivables                    |       10 663 |       10 598 |
--------------------------------------------------------------------------------
| Inventories                                    |        4 241 |        4 228 |
--------------------------------------------------------------------------------
| Total current assets                           |       18 382 |       19 528 |
--------------------------------------------------------------------------------
| Non-current assets                             |              |              |
--------------------------------------------------------------------------------
| Trade and other receivables                    |          207 |          874 |
--------------------------------------------------------------------------------
| Investments in associates                      |           19 |           62 |
--------------------------------------------------------------------------------
| Investment property                            |          789 |          239 |
--------------------------------------------------------------------------------
| Property, plant and equipment (note 4)         |       24 900 |       25 877 |
--------------------------------------------------------------------------------
| Intangible assets (note 4)                     |       64 767 |       65 408 |
--------------------------------------------------------------------------------
| Total non-current assets                       |       90 682 |       92 460 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                                   |      109 064 |      111 988 |
--------------------------------------------------------------------------------
| SHAREHOLDERS EQUITY AND LIABILITIES            |              |              |
--------------------------------------------------------------------------------
| Liabilities                                    |              |              |
--------------------------------------------------------------------------------
| Current liabilities                            |              |              |
--------------------------------------------------------------------------------
| Borrowings (note 5)                            |       11 262 |       12 719 |
--------------------------------------------------------------------------------
| Trade and other payables                       |       17 986 |       15 384 |
--------------------------------------------------------------------------------
| Total current liabilities                      |       29 248 |       28 103 |
--------------------------------------------------------------------------------
| Non-current liabilities                        |              |              |
--------------------------------------------------------------------------------
| Borrowings (note 5)                            |       40 124 |       47 396 |
--------------------------------------------------------------------------------
| Other long term liabilities                    |           10 |            6 |
--------------------------------------------------------------------------------
| Total non-current liabilities                  |       40 134 |       47 402 |
--------------------------------------------------------------------------------
| Total liabilities                              |       69 382 |       75 505 |
--------------------------------------------------------------------------------
| Equity                                         |              |              |
--------------------------------------------------------------------------------
| Capital and reserves attributable to equity    |              |              |
| holders of the Parent company                  |              |              |
--------------------------------------------------------------------------------
| Share capital                                  |       12 125 |       12 125 |
--------------------------------------------------------------------------------
| Share premium                                  |       11 727 |       11 727 |
--------------------------------------------------------------------------------
| Reserves                                       |          653 |          653 |
--------------------------------------------------------------------------------
| Retained earnings                              |       15 052 |       11 886 |
--------------------------------------------------------------------------------
| Currency translation reserve                   |          107 |           31 |
--------------------------------------------------------------------------------
| Total capital and reserves attributable to     |       39 664 |       36 422 |
| equity holders of the Parent company           |              |              |
--------------------------------------------------------------------------------
| Minority interest                              |           18 |           61 |
--------------------------------------------------------------------------------
| Total equity                                   |       39 682 |       36 483 |
--------------------------------------------------------------------------------
| TOTAL EQUITY AND LIABILITIES                   |      109 064 |      111 988 |
--------------------------------------------------------------------------------

Consolidated interim income statement (unaudited)                               
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|                                     EEK                                      |
--------------------------------------------------------------------------------
|                           Q IV  2008 |                            Q IV  2007 |
--------------------------------------------------------------------------------
| (thousand)                              |                                    |
--------------------------------------------------------------------------------
| Sales                                   |         360 096 |          365 316 |
--------------------------------------------------------------------------------
| Costs of sales                          |         271 821 |          275 682 |
--------------------------------------------------------------------------------
| Gross profit                            |          88 275 |           89 634 |
--------------------------------------------------------------------------------
| Marketing expenses                      |          20 896 |            9 716 |
--------------------------------------------------------------------------------
| Administrative expenses                 |          40 229 |           48 562 |
--------------------------------------------------------------------------------
| Other income                            |            (41) |            5 678 |
--------------------------------------------------------------------------------
| Other expenses                          |             943 |            3 354 |
--------------------------------------------------------------------------------
| Operating profit                        |          26 166 |           33 680 |
--------------------------------------------------------------------------------
| Interest income                         |             940 |            1 561 |
--------------------------------------------------------------------------------
| Interest expenses                       |        (16 397) |         (14 719) |
--------------------------------------------------------------------------------
| Currency exchange loss                  |           (963) |               94 |
--------------------------------------------------------------------------------
| Other financial income                  |              29 |            2 504 |
--------------------------------------------------------------------------------
| Other financial expenses                |         (1 315) |            (152) |
--------------------------------------------------------------------------------
| Financial income/expenses total         |        (17 706) |         (10 712) |
--------------------------------------------------------------------------------
| Share of profit (loss )of associates    |           (205) |            (388) |
--------------------------------------------------------------------------------
| Profit before income tax                |           8 255 |           22 580 |
--------------------------------------------------------------------------------
| Income tax expense                      |           2 500 |              963 |
--------------------------------------------------------------------------------
| PROFIT FOR THE YEAR                     |           5 755 |           21 617 |
--------------------------------------------------------------------------------
| Attributable to:                        |                 |                  |
--------------------------------------------------------------------------------
| Equity holders of the Parent company    |           5 755 |           21 517 |
--------------------------------------------------------------------------------
| Minority interest                       |               0 |              100 |
--------------------------------------------------------------------------------
| Basic and diluted earnings per share    |            0,30 |             1,13 |
| for profit attributable to the equity   |                 |                  |
| holders of the Company                  |                 |                  |
--------------------------------------------------------------------------------

Consolidated interim income statement (unaudited)                               
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|                                     EEK                                      |
--------------------------------------------------------------------------------
|                       12 months 2008 |                        12 months 2007 |
--------------------------------------------------------------------------------
| (thousand)                              |                                    |
--------------------------------------------------------------------------------
| Sales                                   |       1 323 376 |        1 149 962 |
--------------------------------------------------------------------------------
| Costs of sales                          |         986 268 |          854 414 |
--------------------------------------------------------------------------------
| Gross profit                            |         337 108 |          295 548 |
--------------------------------------------------------------------------------
| Marketing expenses                      |          67 105 |           48 733 |
--------------------------------------------------------------------------------
| Administrative expenses                 |         162 535 |          133 972 |
--------------------------------------------------------------------------------
| Other income                            |          13 793 |            9 025 |
--------------------------------------------------------------------------------
| Other expenses                          |           6 932 |            5 469 |
--------------------------------------------------------------------------------
| Operating profit                        |         114 329 |          116 399 |
--------------------------------------------------------------------------------
| Interest income                         |           2 705 |            6 524 |
--------------------------------------------------------------------------------
| Interest expenses                       |        (57 452) |         (24 569) |
--------------------------------------------------------------------------------
| Currency exchange loss                  |         (1 375) |               34 |
--------------------------------------------------------------------------------
| Other financial income                  |             295 |            3 552 |
--------------------------------------------------------------------------------
| Other financial expenses                |         (2 612) |          (3 653) |
--------------------------------------------------------------------------------
| Financial income/expenses total         |        (58 439) |         (18 112) |
--------------------------------------------------------------------------------
| Share of profit (loss )of associates    |           (627) |              996 |
--------------------------------------------------------------------------------
| Profit before income tax                |          55 263 |           99 283 |
--------------------------------------------------------------------------------
| Income tax expense                      |           5 717 |            7 174 |
--------------------------------------------------------------------------------
| PROFIT FOR THE YEAR                     |          49 546 |           92 109 |
--------------------------------------------------------------------------------
| Attributable to:                        |                 |                  |
--------------------------------------------------------------------------------
| Equity holders of the Parent company    |          49 527 |           91 670 |
--------------------------------------------------------------------------------
| Minority interest                       |              19 |              439 |
--------------------------------------------------------------------------------
| Basic and diluted earnings per share    |            2,61 |             5,00 |
| for profit attributable to the equity   |                 |                  |
| holders of the Company                  |                 |                  |
--------------------------------------------------------------------------------

Consolidated interim income statement (unaudited)                               
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|                                     EUR                                      |
--------------------------------------------------------------------------------
|                           Q IV  2008 |                            Q IV  2007 |
--------------------------------------------------------------------------------
|  (thousand)                             |                                    |
--------------------------------------------------------------------------------
| Sales                                   |          23 014 |           23 348 |
--------------------------------------------------------------------------------
| Costs of sales                          |          17 373 |           17 619 |
--------------------------------------------------------------------------------
| Gross profit                            |           5 641 |            5 729 |
--------------------------------------------------------------------------------
| Marketing expenses                      |           1 335 |              621 |
--------------------------------------------------------------------------------
| Administrative expenses                 |           2 571 |            3 104 |
--------------------------------------------------------------------------------
| Other income                            |             (3) |              363 |
--------------------------------------------------------------------------------
| Other expenses                          |              60 |              214 |
--------------------------------------------------------------------------------
| Operating profit                        |           1 672 |            2 153 |
--------------------------------------------------------------------------------
| Interest income                         |              60 |              100 |
--------------------------------------------------------------------------------
| Interest expenses                       |         (1 048) |            (941) |
--------------------------------------------------------------------------------
| Currency exchange loss                  |            (62) |                6 |
--------------------------------------------------------------------------------
| Other financial income                  |               2 |              160 |
--------------------------------------------------------------------------------
| Other financial expenses                |            (84) |             (10) |
--------------------------------------------------------------------------------
| Financial income/expenses total         |         (1 132) |            (685) |
--------------------------------------------------------------------------------
| Share of profit (loss )of associates    |            (13) |             (25) |
--------------------------------------------------------------------------------
| Profit before income tax                |             527 |            1 443 |
--------------------------------------------------------------------------------
| Income tax expense                      |             160 |               62 |
--------------------------------------------------------------------------------
| PROFIT FOR THE YEAR                     |             367 |            1 381 |
--------------------------------------------------------------------------------
| Attributable to:                        |                 |                  |
--------------------------------------------------------------------------------
| Equity holders of the Parent company    |             368 |            1 375 |
--------------------------------------------------------------------------------
| Minority interest                       |               0 |                6 |
--------------------------------------------------------------------------------
| Basic and diluted earnings per share    |            0,02 |             0,07 |
| for profit attributable to the equity   |                 |                  |
| holders of the Company                  |                 |                  |
--------------------------------------------------------------------------------

Consolidated interim income statement (unaudited)                               
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|                                     EUR                                      |
--------------------------------------------------------------------------------
|                       12 months 2008 |                        12 months 2007 |
--------------------------------------------------------------------------------
| (thousand)                              |                                    |
--------------------------------------------------------------------------------
| Sales                                   |          84 579 |           73 496 |
--------------------------------------------------------------------------------
| Costs of sales                          |          63 034 |           54 607 |
--------------------------------------------------------------------------------
| Gross profit                            |          21 545 |           18 889 |
--------------------------------------------------------------------------------
| Marketing expenses                      |           4 289 |            3 115 |
--------------------------------------------------------------------------------
| Administrative expenses                 |          10 388 |            8 562 |
--------------------------------------------------------------------------------
| Other income                            |             882 |              577 |
--------------------------------------------------------------------------------
| Other expenses                          |             443 |              350 |
--------------------------------------------------------------------------------
| Operating profit                        |           7 307 |            7 439 |
--------------------------------------------------------------------------------
| Interest income                         |             173 |              417 |
--------------------------------------------------------------------------------
| Interest expenses                       |         (3 672) |          (1 570) |
--------------------------------------------------------------------------------
| Currency exchange loss                  |            (88) |                2 |
--------------------------------------------------------------------------------
| Other financial income                  |              19 |              227 |
--------------------------------------------------------------------------------
| Other financial expenses                |           (167) |            (233) |
--------------------------------------------------------------------------------
| Financial income/expenses total         |         (3 735) |          (1 157) |
--------------------------------------------------------------------------------
| Share of profit (loss )of associates    |            (40) |               64 |
--------------------------------------------------------------------------------
| Profit before income tax                |           3 532 |            6 346 |
--------------------------------------------------------------------------------
| Income tax expense                      |             365 |              459 |
--------------------------------------------------------------------------------
| PROFIT FOR THE YEAR                     |           3 167 |            5 887 |
--------------------------------------------------------------------------------
| Attributable to:                        |                 |                  |
--------------------------------------------------------------------------------
| Equity holders of the Parent company    |           3 166 |            5 859 |
--------------------------------------------------------------------------------
| Minority interest                       |               1 |               28 |
--------------------------------------------------------------------------------
| Basic and diluted earnings per share    |            0,17 |             0,32 |
| for profit attributable to the equity   |                 |                  |
| holders of the Company                  |                 |                  |
--------------------------------------------------------------------------------

Consolidated interim cash flow statement (unaudited)                            
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|                                     EEK                                      |
--------------------------------------------------------------------------------
|                       12 months 2008 |                        12 months 2007 |
--------------------------------------------------------------------------------
| (thousand)                               |                                   |
--------------------------------------------------------------------------------
| Cash flows from operating activities     |                 |                 |
--------------------------------------------------------------------------------
| Operating profit for the period          |         114 329 |         116 399 |
--------------------------------------------------------------------------------
| Adjustments for:                         |                 |                 |
--------------------------------------------------------------------------------
| Depreciation, amortization and           |          61 466 |          39 814 |
| impairment of property, plant and        |                 |                 |
| equipment and intangibles                |                 |                 |
--------------------------------------------------------------------------------
| Profit (loss) on sale of property, plant |             289 |         (4 169) |
| and equipment                            |                 |                 |
--------------------------------------------------------------------------------
| Changes in working capital:              |                 |                 |
--------------------------------------------------------------------------------
| Trade and other receivables              |           1 351 |        (29 023) |
--------------------------------------------------------------------------------
| Inventories                              |           (194) |        (21 304) |
--------------------------------------------------------------------------------
| Trade and other payables                 |           7 374 |          30 929 |
--------------------------------------------------------------------------------
| Cash generated from operations           |         184 615 |         132 646 |
--------------------------------------------------------------------------------
| Income tax paid                          |         (5 717) |         (6 302) |
--------------------------------------------------------------------------------
| Interest paid                            |        (57 468) |        (28 735) |
--------------------------------------------------------------------------------
| Net cash generated from operating        |         121 430 |          97 609 |
| activities                               |                 |                 |
--------------------------------------------------------------------------------
| Cash flows from investing activities     |                 |                 |
--------------------------------------------------------------------------------
| Investments in business combinations     |           (445) |       (887 645) |
--------------------------------------------------------------------------------
| Proceeds from financial assets           |           7 500 |             113 |
--------------------------------------------------------------------------------
| Interest received                        |           1 165 |           7 166 |
--------------------------------------------------------------------------------
| Purchase of  property, plant and         |        (41 194) |        (57 130) |
| equipment                                |                 |                 |
--------------------------------------------------------------------------------
| Proceeds from sale of property, plant    |             895 |           1 294 |
| and equipment                            |                 |                 |
--------------------------------------------------------------------------------
| Loans granted                            |         (4 182) |        (70 828) |
--------------------------------------------------------------------------------
| Loan repayments received                 |             236 |          80 861 |
--------------------------------------------------------------------------------
| Net cash used in investing activities    |        (36 025) |       (926 169) |
--------------------------------------------------------------------------------
| Cash flows from financing activities     |                 |                 |
--------------------------------------------------------------------------------
| Share issue                              |               0 |         219 081 |
--------------------------------------------------------------------------------
| Finance lease payments made              |        (35 043) |        (22 513) |
--------------------------------------------------------------------------------
| Change in overdraft used                 |        (46 988) |          12 852 |
--------------------------------------------------------------------------------
| Proceeds from borrowings                 |          42 521 |         749 568 |
--------------------------------------------------------------------------------
| Repayments of borrowings                 |        (68 477) |       (112 559) |
--------------------------------------------------------------------------------
| Net cash generated from financing        |       (107 987) |         846 429 |
| activities                               |                 |                 |
--------------------------------------------------------------------------------
| NET (DECREASE)/INCREASE IN CASH AND CASH |        (22 582) |          17 869 |
| EQUIVALENTS                              |                 |                 |
--------------------------------------------------------------------------------
|                                          |                 |                 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the         |          68 970 |          51 101 |
| beginning of the period                  |                 |                 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end of  |          46 388 |          68 970 |
| the period                               |                 |                 |
--------------------------------------------------------------------------------


Consolidated interim cash flow statement (unaudited)                            
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|                                     EUR                                      |
--------------------------------------------------------------------------------
|                       12 months 2008 |                        12 months 2007 |
--------------------------------------------------------------------------------
| (thousand)                               |                                   |
--------------------------------------------------------------------------------
| Cash flows from operating activities     |                 |                 |
--------------------------------------------------------------------------------
| Operating profit for the period          |           7 307 |           7 439 |
--------------------------------------------------------------------------------
| Adjustments for:                         |                 |                 |
--------------------------------------------------------------------------------
| Depreciation, amortization and           |           3 928 |           2 545 |
| impairment of property, plant and        |                 |                 |
| equipment and intangibles                |                 |                 |
--------------------------------------------------------------------------------
| Profit (loss) on sale of property, plant |              18 |           (266) |
| and equipment                            |                 |                 |
--------------------------------------------------------------------------------
| Changes in working capital:              |                 |                 |
--------------------------------------------------------------------------------
| Trade and other receivables              |              86 |         (1 855) |
--------------------------------------------------------------------------------
| Inventories                              |            (12) |         (1 362) |
--------------------------------------------------------------------------------
| Trade and other payables                 |             471 |           1 977 |
--------------------------------------------------------------------------------
| Cash generated from operations           |          11 799 |           8 478 |
--------------------------------------------------------------------------------
| Income tax paid                          |           (365) |           (403) |
--------------------------------------------------------------------------------
| Interest paid                            |               0 |               0 |
--------------------------------------------------------------------------------
| Net cash generated from operating        |           7 761 |           6 238 |
| activities                               |                 |                 |
--------------------------------------------------------------------------------
| Cash flows from investing activities     |                 |                 |
--------------------------------------------------------------------------------
| Investments in business combinations     |           (123) |        (56 676) |
--------------------------------------------------------------------------------
| Proceeds from financial assets           |              96 |               1 |
--------------------------------------------------------------------------------
| Interest received                        |             113 |             317 |
--------------------------------------------------------------------------------
| Purchase of  property, plant and         |         (1 779) |         (2 502) |
| equipment                                |                 |                 |
--------------------------------------------------------------------------------
| Proceeds from sale of property, plant    |              53 |              18 |
| and equipment                            |                 |                 |
--------------------------------------------------------------------------------
| Loans granted                            |           (264) |         (3 893) |
--------------------------------------------------------------------------------
| Loan repayments received                 |               7 |           4 495 |
--------------------------------------------------------------------------------
| Net cash used in investing activities    |         (1 898) |        (58 239) |
--------------------------------------------------------------------------------
| Cash flows from financing activities     |                 |                 |
--------------------------------------------------------------------------------
| Share issue                              |               0 |          14 002 |
--------------------------------------------------------------------------------
| Finance lease payments made              |         (2 240) |         (1 439) |
--------------------------------------------------------------------------------
| Change in overdraft used                 |         (3 003) |             821 |
--------------------------------------------------------------------------------
| Proceeds from borrowings                 |           2 718 |          47 906 |
--------------------------------------------------------------------------------
| Repayments of borrowings                 |         (4 376) |         (7 194) |
--------------------------------------------------------------------------------
| Net cash generated from financing        |         (6 902) |          54 097 |
| activities                               |                 |                 |
--------------------------------------------------------------------------------
| NET (DECREASE)/INCREASE IN CASH AND CASH |         (1 443) |           1 142 |
| EQUIVALENTS                              |                 |                 |
--------------------------------------------------------------------------------
|                                          |                 |                 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the         |           4 408 |           3 266 |
| beginning of the period                  |                 |                 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end of  |           2 965 |           4 408 |
| the period                               |                 |                 |
--------------------------------------------------------------------------------

Anne Kallas                                                                
Member of the board                                                             
AS Ekspress Grupp 
Tel:(+372) 669 8080                
e-mail: anne.kallas@egrupp.ee