Market announcement

Title

AS Ekspress Grupp Consolidated Interim Report for the Third Quarter and 9 months of 2012

Message

Tallinn, Estonia, 2012-11-02 17:25 CET (GLOBE NEWSWIRE) --


The following report presents the consolidated financial information of AS
Ekspress Grupp, the related market developments and management decisions. The
financial indicators and ratios show the outcome of the Group’s continuing
operations, i.e. they express the consolidated operating results of online
media, periodicals and printing services segments. 

Key financial indicators and financial ratios

Financial indicators                                  Q3 2012  Q3 2011  Change %
(EUR thousand)                                                                  
--------------------------------------------------------------------------------
For the reporting period                                                        
Sales                                                  13 278   12 969        2%
Gross profit                                            2 678    2 879       -7%
EBITDA*                                                 1 495    1 564       -4%
Operating profit*                                         676      715       -5%
Net profit/(loss) for the period*                         263      118      123%
--------------------------------------------------------------------------------
Extraordinary gain from the acquisition of Eesti            0        0        0%
 Päevalehe AS                                                                   
Net profit for the period in the interim financial        263      118      123%
 statements                                                                     
--------------------------------------------------------------------------------



Financial indicators                              9 months     9 months   Change
(EUR thousand)                                        2012         2011     %   
--------------------------------------------------------------------------------
For the reporting period                                                        
Sales                                               43 260       41 078       5%
Gross profit                                         9 273        8 884       4%
EBITDA*                                              5 636        4 982      13%
Operating profit*                                    3 101        2 406      29%
Net profit/(loss) for the period*                    1 413          361     291%
--------------------------------------------------------------------------------
Extraordinary gain from the acquisition of               0        1 540    -100%
 Eesti Päevalehe AS                                                             
Net profit for the period in the interim             1 413        1 901     -26%
 financial statements                                                           
--------------------------------------------------------------------------------

* excluding the net extraordinary gain in relation to the acquisition of Eesti
Päevalehe AS. In the 1st quarter of 2011, an additional 50% ownership interest
in Eesti Päevalehe AS was acquired. The transaction was accounted for in two
parts: firstly, as the sale of the current 50% ownership interest on which the
net extraordinary gain totalled EUR 1 540 thousand and secondly, as the
acquisition of the wholly-owned subsidiary (see Note 4 to the interim financial
statements). 



Profitability ratios (%)      Q3 2012  Q3 2011
----------------------------------------------
                             -----------------
Sales growth (%)               2.4%     9.7%  
Gross margin (%)               20.2%    22.2% 
EBITDA margin (%)*             11.3%    12.1% 
Operating margin (%)*          5.1%     5.5%  
Net margin (%) *               2.0%     0.9%  
ROA (%)                        0.3%     0.1%  
ROE (%)                        0.7%     0.3%  
----------------------------------------------
Earnings per share (EPS) EUR   0.01     0.00  
----------------------------------------------



Profitability ratios (%)      9 months 2012  9 months 2011
----------------------------------------------------------
                             -----------------------------
Sales growth (%)                   5.3%          11.2%    
Gross margin (%)                  21.4%          21.6%    
EBITDA margin (%)*                13.0%          12.1%    
Operating margin (%)*              7.2%           5.9%    
Net margin (%) *                   3.3%           0.9%    
ROA (%)                            1.8%           2.3%    
ROE (%)                            3.6%           5.0%    
----------------------------------------------------------
Earnings per share (EPS) EUR       0.05           0.06    
----------------------------------------------------------

* excluding the net extraordinary gain in relation to the acquisition of Eesti
Päevalehe AS (see above) 

Formulas used to calculate the financial ratios:

Sales growth (%)      (sales 2012 – sales 2011)/ sales 2011*100
Gross margin (%)      gross profit/sales*100                   
EBITDA margin (%)     EBITDA* /sales*100                       
Operating margin (%)  operating profit*/sales*100              
Net margin (%)        net profit*/sales*100                    
Earnings per share    net profit/average number of shares      
ROA (%)                      net profit/average assets *100    
ROE (%)                      net profit/average equity *100    
                                                               

* excluding the net extraordinary gain in relation to the acquisition of Eesti
Päevalehe AS. 



Financial indicators         30.09.2012  31.12.2011  Change %
(EUR thousand)                                               
-------------------------------------------------------------
As of the end of the period                                  
Current assets                   12 054      12 523       -4%
Non-current assets               66 923      68 986       -3%
Total assets                     78 977      81 509       -3%
-------------------------------------------------------------
-------------------------------------------------------------
Current liabilities              13 751      16 547      -17%
Non-current liabilities          25 247      26 574       -5%
Total liabilities                38 998      43 121      -10%
-------------------------------------------------------------
Equity                           39 979      38 388        4%
-------------------------------------------------------------



Financial position ratios (%)  30.09.2012  31.12.2011
-----------------------------------------------------
Equity ratio (%)                      51%         47%
Liquidity ratio                       0.9         0.8
Debt to equity ratio (%)              75%         83%
Debt to capital ratio (%)             41%         44%
-----------------------------------------------------

Formulas used to calculate the financial ratios:

Equity ratio (%)       equity / (liabilities+equity)* 100                       
Liquidity ratio        current assets/current liabilities                       
Debt to equity ratio   interest bearing liabilities /equity*100                 
 (%)                                                                            
Debt to capital ratio  interest bearing liabilities – cash and cash equivalents 
 (%)                    (net debt)/                                             
                       (net debt+equity)*100                                    

In the first nine months of the current year, the consolidated net profit of AS
Ekspress Grupp totalled EUR 1.4 million which almost fourfolded as compared to
last year. In a year, EBITDA increased by 13% and totalled EUR 5.6 million. In
the 3rd quarter, the Group’s net profit totalled EUR 263 thousand and EBITDA
totalled EUR 1.5 million. We were able to offset a few percentage point drop in
EBITDA by lower finance costs, as a result of which the net profit increased by
123% in the 3rd quarter as compared to the same period last year. 

Over the last nine months, almost all segments demonstrated profit (EBITDA)
growth. The ability of the printing services segment to generate profit growth
has essentially remained at the same level as last year after normalising the
result by a one-off extraordinary expense in the second quarter. The ability of
online media to generate a profit has improved by 63% in a year, and that of
periodicals by 21%. In the online media segment, Delfi Estonia has increased
its profit the most, i.e. by 350% in the first nine months of the year while
Delfi Latvia has stayed at the same level and Delfi Lithuania has increased its
profit by 132%. In the periodicals segment, AS Eesti Ajalehed and OÜ Hea Lugu
have been able to become profitable and earn a profit of EUR 398 thousand in
the first nine months of the year as compared to the previous loss of EUR 18
thousand. AS SL Õhtuleht has also increased its profit. Magazine publishers
both in Lithuania and Estonia have not reached previous year’s levels. 

In the online media segment, Delfi Lithuania managed to improve its EBITDA
result in the 3rd quarter as compared to last year while the reference base of
Delfi Latvia was impacted by election advertising which lifted sales last
September. The results of all companies in the online media segment have been
impacted by higher impairment losses related to overdue invoices. For Delfi
Estonia, the result has also been impacted by one-off redundancy compensations
which were related to the reorganisation of the Company’s finance function and
higher business trip expenses related to the coverage of the Olympic Games. For
Delfi Estonia, the EBITDA result is also impacted by the depreciation expense
which had previously been included among depreciation and amortisation cost.
However in conjunction with the relocation of the editorial staff and the
transfer of the related assets to the Daily news department in AS Eesti
Ajalehed depreciation charge now makes up a part of the content production
service of AS Eesti Ajalehed that is provided to AS Delfi. In collaboration
with the magazine publisher UAB Ekspress Leidyba, Delfi Lithuania successfully
launched two new online portals www.cosmopolitan.lt and www.moteris.lt. We are
very positive about the competitiveness of both of them. Despite relatively
weak September, we are cautiously optimistic about the last quarter and believe
that the weakness in the advertising market which prevailed in the online media
segment in the summer will not be carried forward to the last quarter of the
year. 

In the periodicals segment, Estonian and Lithuanian magazine publishers
incurred a loss in the third quarter. The advertising revenue of both companies
was lower than last year, the result of the Estonian publisher was also
impacted by higher book discounts. Retail and subscription sales of both
magazine publishers were also lower than last year. We are currently making
some rearrangements to our product portfolio in order to improve the operating
results of AS Ajakirjade Kirjastus. We combined two weekly magazines Kroonika
and Nädal. We will also discontinue the publishing of some smaller-scale
projects with a lower publication frequency. We have also started negotiations
to amend the lease agreement of offices in order to lower annual rental costs.
In addition to the effect from the combination of two magazines, we also hope
to improve the company’s operating results already in the last quarter of the
current year with the help of these steps. The management of the Lithuanian
magazine publisher also has the task of optimisation of the product portfolio. 

In the 3rd quarter, AS Eesti Ajalehed demonstrated solid results despite the
weak situation in the advertising market in the summer. The company’s sales
were boosted by the DVD project of the book publishing company OÜ Hea Lugu and
Eesti Päevaleht concerning the best Estonian films, which has helped to cover
the shortfall in sales and profits related to advertising and newspaper sales.
However, when analysing the behavioural pattern of the Group’s entire portfolio
of periodicals, then despite the difficult market situation, we have managed to
limit the decline in advertising, newspaper and subscription sales to a few
percentage points in the segment as a whole as compared to the 3rd quarter last
year. 

In the printing services segment, the EBITDA of the printing company declined
by 8% in the 3rd quarter, but the result for the 9 months of the year
essentially remained at the same level as last year. The company’s client
structure has not significantly changed; however, the share of exports has
increased further, making up nearly 70% of sales. 

The key event in the 3rd quarter was appointment of the new Chairman of the
Management Board of  Delfi Estonia. The current chairman of the Management
Board has been offered to continue as the member of the Management Board of AS
Eesti Ajalehed responsible for the content production unit of the company. A
new Chairman of the Management Board also took office at the Group’s
book-publishing company OÜ Hea Lugu. 

In the 3rd quarter, the refinancing of all Group’s loans by the new syndicate
was completed. On 12 July 2012, Ekspress Grupp entered into a new syndicated
loan contract and refinanced all Group’s current loan and finance lease
obligations to banks and leasing companies. The refinancing transaction was
completed on 23 July 2012. The parties to the new syndicate are SEB Pank and
Nordea Bank Estonia. As a result of this transaction, the Group will have
significant savings of interest expenses and there will more cash available to
be used for new investments. 

Overview of the Group’s segments



Key financial data of the segments in Q3 2011/2012

                          --------------------------
     (EUR thousand)                  Sales          
--------------------------                          
                                Q3      Q3  Change %
                              2012    2011          
----------------------------------------------------
online media                 2 282   2 033       12%
periodicals                  5 729   5 608        2%
printing services            6 263   6 126        2%
central functions              268      64      319%
intersegment eliminations  (1 264)   (862)      -47%
----------------------------------------------------
TOTAL                       13 278  12 969        2%
----------------------------------------------------



                          -----------------------
     (EUR thousand)                EBITDA        
--------------------------                       
                              Q3     Q3  Change %
                            2012   2011          
-------------------------------------------------
online media                 208    232      -10%
periodicals                  182    190       -4%
printing services          1 310  1 417       -8%
central functions          (206)  (278)       26%
intersegment eliminations      1      3      -67%
-------------------------------------------------
TOTAL                      1 495  1 564       -4%
-------------------------------------------------



Key financial data of the segments for the first 9 months 2011/2012

                          ----------------------------------
     (EUR thousand)                      Sales              
--------------------------                                  
                           9 months  9 months 2011  Change %
                               2012                         
------------------------------------------------------------
online media                  7 381          6 390       16%
periodicals                  18 115         17 526        3%
printing services            21 121         19 593        8%
central functions               688            138      399%
intersegment eliminations   (4 045)        (2 569)      -57%
------------------------------------------------------------
TOTAL*                       43 260         41 078        5%
------------------------------------------------------------



                          ----------------------------------
     (EUR thousand)                     EBITDA              
--------------------------                                  
                           9 months 2012  9 months  Change %
                                              2011          
------------------------------------------------------------
online media                       1 190       729       63%
periodicals                          595       490       21%
printing services                  4 402     4 464       -1%
central functions                  (553)     (712)       22%
intersegment eliminations              2        11      -82%
------------------------------------------------------------
TOTAL*                             5 636     4 982       13%
------------------------------------------------------------

* excluding the net extraordinary gain in relation to the acquisition of Eesti
Päevalehe AS. 

                  -----------------
EBITDA margin      Q3 2012  Q3 2011
------------------                 
online media            9%      11%
periodicals             3%       3%
printing services      21%      23%
-----------------------------------



                  -----------------------------
EBITDA margin      9 months 2012  9 months 2011
------------------                             
online media                 16%            11%
periodicals                   3%             3%
printing services            21%            23%
-----------------------------------------------

The segments’ EBITDA does not include goodwill impairment. This is included
within the corporate function. Segment results also exclude intragroup
management fees. Volume-based and other fees payable to advertising agencies
have not been deducted from the advertising sales of segments, because the
Group’s management monitors the gross income of companies and segments.
Discounts and volume rebates are reported as a reduction of the Group’s sales
and are shown in the aggregate line of eliminations. 

News portals owned by the Group

Owner            Portal        Owner              Portal         
-----------------------------------------------------------------
Delfi Estonia    www.delfi.ee  AS Eesti Ajalehed  www.ekspress.ee
-----------------------------------------------------------------
                 rus.delfi.ee                     www.maaleht.ee 
-----------------------------------------------------------------
Delfi Latvia     www.delfi.lv                     www.epl.ee     
-----------------------------------------------------------------
                 rus.delfi.lv  AS SL Õhtuleht     www.ohtuleht.ee
-----------------------------------------------------------------
Delfi Lithuania  www.delfi.lt                                    
-----------------------------------------------------------------
                 ru.delfi.lt                                     
-----------------------------------------------------------------
Delfi Ukraine    www.delfi.ua                                    
-----------------------------------------------------------------



Online media segment

The online media segment includes Delfi operations in Estonia, Latvia,
Lithuania and Ukraine as well as the Parent Company Delfi Holding. 



                          -----------------------
     (EUR thousand)                 Sales        
--------------------------                       
                              Q3     Q3  Change %
                            2012   2011          
-------------------------------------------------
Delfi Estonia                710    697        2%
Delfi Latvia                 547    468       17%
Delfi Lithuania            1 004    846       19%
Delfi Ukraine                 21     15       40%
other Delfi companies          0      7     -100%
intersegment eliminations      0      0         -
-------------------------------------------------
TOTAL                      2 282  2 033       12%
-------------------------------------------------



                          ---------------------
     (EUR thousand)               EBITDA       
--------------------------                     
                             Q3    Q3  Change %
                           2012  2011          
-----------------------------------------------
Delfi Estonia              (59)  (16)     -269%
Delfi Latvia                 27    50      -46%
Delfi Lithuania             222    98      127%
Delfi Ukraine              (66)  (55)      -20%
other Delfi companies        86   154      -44%
intersegment eliminations   (2)     1         -
-----------------------------------------------
TOTAL                       208   232      -10%
-----------------------------------------------



                          -----------------------------
     (EUR thousand)                   Sales            
--------------------------                             
                           9 months  9 months  Change %
                               2012      2011          
-------------------------------------------------------
Delfi Estonia                 2 518     2 263       11%
Delfi Latvia                  1 639     1 423       15%
Delfi Lithuania               3 162     2 649       19%
Delfi Ukraine                    57        39       46%
other Delfi companies             5        16      -69%
intersegment eliminations         0         0         -
-------------------------------------------------------
TOTAL                         7 381     6 390       16%
-------------------------------------------------------



                          -----------------------------
     (EUR thousand)                   EBITDA           
--------------------------                             
                           9 months  9 months  Change %
                               2012      2011          
-------------------------------------------------------
Delfi Estonia                   162        36      350%
Delfi Latvia                     94        95       -1%
Delfi Lithuania                 850       367      132%
Delfi Ukraine                 (201)     (197)       -2%
other Delfi companies           289       427      -32%
intersegment eliminations       (4)         1         -
-------------------------------------------------------
TOTAL                         1 190       729       63%
-------------------------------------------------------



Delfi Estonia

·         Delfi had  its highest number of users ever, i.e. almost  1 million
weekly users which represents ca. 80% of all Estonian Internet users. This
result reinforces Delfi’s position as the most popular website in Estonia while
also widening the gap with its closest competitors. 

·         The number of people who use Delfi via their mobile phones has
increased at a fast pace.  Successful coverage of the Olympic Games has
increased the number of people using Delfi via mobile phones to 100 000 users
per week. 

·         Delfi launched a new location-based weather forecast section, where
it is possible to view the weather forecast for more than 5 000 different
locations in Estonia. 

·         The weather forecast is now also available in Delfi’s mobile version

·         New  categories and subsites such as Eesti otsib superstaari (Estonia
is Searching for a Superstar), Tähed jääl (Stars on Ice), Spordimeditsiin
(Sports medicine, news feed to EOK page), Kuldne mask (Golden Mask), Puhka
Eestis (Visit Estonia), Purjetamine (Sailing), Kirev maailm (Colourful World),
Suvetüdruk (Summer Girl), Kuldrula (Golden Skateboard), Viru Folk, etc. 

·         Functionality to share the news in social networks in
Russian-language Delfi. 

In the 3nd quarter of 2012, there were no major changes in the Estonian
Internet market. The user trend follows a pattern of growth similarly to last
year. Two media portals - Delfi and Postimees – dominate the market.  Delfi.ee
continues to be the online environment with the highest number of users in
Estonia. The online version of Eesti Päevaleht www.epl.ee is steadily
increasing its number of users, which is about to exceed 200 thousand users on
a weekly basis. 

Delfi Latvia

·         Fast and widespread coverage of summer events in Delfi attracted many
new readers. The coverage of Positivus Festival in Delfi was especially popular
among readers. 

·         Launch of a renewed version of Delfi Easy page.

·         Content and functional development of subsections (Auto, Woman,
Technology). 

·         Reorganisation of the editorial staff to ensure better news coverage
on weekends. 

·         Delfi launched a new location-based weather forecast section.

  -- The weather forecast is now also available in Delfi’s mobile version.

After the statistical reduction of the total number of Latvian internet users
in April, the total number of Latvian internet users has grown modestly. The
most popular websites among the Latvian internet users continue to be the
e-mail environment Inbox and the social network Draugiem. Delfi Latvia
(Delfi.lv) continues to be the most popular news portal. In the 3rd quarter,
the number of readers of apollo.lv grew at the fastest pace. 

Delfi Lithuania

·         In collaboration with Ekspress Leidyba, a Cosmopolitan portal
www.cosmopolitan.lt was launched at the beginning of August and the portal
www.moteris.lt was launched in October. 

·         Preparations are underway to launch the portal www.panele.lt.

·         Delfi launched a new location-based weather forecast section.

·         The weather forecast is now also available in Delfi’s mobile version.

Delfi continues to be the uncontested market leader among Lithuanian internet
users with more than one million unique users. Similarly to Latvia, the total
statistical number of internet users was restated in the summer of 2012, which
reduced the number of users of all internet portals. Thereafter, Delfi has
increased its number of users in September to the highest level this year.
Despite aggressive expansion of Schibsted in Lithuania, the gap between Delfi
and 15min has increased over the last few months for the benefit of Delfi and
in September 2012, Delfi.lt had almost 200 thousand users more than 15min.lt. 

Delfi Ukraine

·         Marketing actions in social media and collaboration projects with
radio and TV channels to improve Delfi’s visibility in the market. 

·         Delfi.ua has increased production of women oriented news content due
to the profile of portal readers. 



For the moment there is no usership data available for September – the graph
for September is based on august data. 

In Ukraine the internet portals are still looking for the right business model.
The biggest portals are changing their strategies and have been rejecting
traffic buying from each other. It has been also affected their usership
figures and in Q3 main portals have lost mentionable amount of users. Delfi.ua
has not using this king of methods and in opposite growing it’s userbase
organically. 



Periodicals segment

The periodicals segment includes the publishers of newspapers, magazines and
books. This segment also includes AS Express Post, engaged in home delivery of
periodicals. 

On 1 October 2011, Eesti Päevalehe AS and AS Eesti Ajalehed were merged. At the
same date, the book publishing department of the merged company was spun off as
a separate legal entity under the name of OÜ Hea Lugu that remained as the
subsidiary of AS Eesti Ajalehed. On 1 November 2011, the joint ventures AS SL
Õhtuleht and AS Linnaleht were merged, and from 1 January 2012, Uniservice OÜ
and AS Ajakirjade Kirjastus were merged. 



--------------------------                           
     (EUR thousand)                   Sales          
                          ---------------------------
                           Q3 2012  Q3 2011  Change %
-----------------------------------------------------
AS Eesti Ajalehed**          3 038    2 884        5%
AS SL Õhtuleht*                879      816        8%
AS Ajakirjade Kirjastus*       916      949       -3%
UAB Ekspress Leidyba           632      646       -2%
AS Express Post*               532      559       -5%
Uniservice OÜ*                   0        1     -100%
intersegment eliminations    (268)    (247)       -9%
TOTAL                        5 729    5 608        2%
-----------------------------------------------------



                          ---------------------------
     (EUR thousand)                  EBITDA          
--------------------------                           
                           Q3 2012  Q3 2011  Change %
-----------------------------------------------------
AS Eesti Ajalehed**            159      138       15%
AS SL Õhtuleht*                 58       28      107%
AS Ajakirjade Kirjastus*      (41)        1    -4200%
UAB Ekspress Leidyba          (38)        0         -
AS Express Post*                44       59      -25%
Uniservice OÜ*                   0        5     -100%
intersegment eliminations        0     (41)         -
TOTAL                          182      190       -4%
-----------------------------------------------------



-----------------------------                                       
       (EUR thousand)                          Sales                
                             ---------------------------------------
                              9 months 2012  9 months 2011  Change %
--------------------------------------------------------------------
AS Eesti Ajalehed**                   9 471          9 431        0%
AS SL Õhtuleht*                       2 754          2 517        9%
AS Ajakirjade Kirjastus*              3 010          2 984        1%
UAB Ekspress Leidyba                  1 987          2 074       -4%
AS Express Post*                      1 712          1 767       -3%
Uniservice OÜ*                            0              9     -100%
intersegment eliminations***          (819)        (1 256)       35%
TOTAL                                18 115         17 526        3%
--------------------------------------------------------------------



                             ---------------------------------------
       (EUR thousand)                         EBITDA                
-----------------------------                                       
                              9 months 2012  9 months 2011  Change %
--------------------------------------------------------------------
AS Eesti Ajalehed**                     398           (18)     2311%
AS SL Õhtuleht*                         193            141       37%
AS Ajakirjade Kirjastus*               (57)             62     -192%
UAB Ekspress Leidyba                  (110)              2    -5600%
AS Express Post*                        173            207      -16%
Uniservice OÜ*                            0              1     -100%
intersegment eliminations***            (2)             95         -
TOTAL                                   595            490       21%
--------------------------------------------------------------------

*Proportionate share of joint ventures

** For the purpose of comparability, AS Eesti Ajalehed combines the data for AS
Eesti Ajalehed, Eesti Päevalehe AS (100% in both years) with that of OÜ Hea
Lugu. 

*** Intra-segment eliminations in sales and EBITDA for the first half of 2011
include the elimination of the 50% ownership interest in Eesti Päevalehe AS in
January and February. 

Despite a poor summer, the revenue of the periodicals segment increased by 2%
in the 3rd quarter of 2012. However, EBITDA failed to grow as compared to last
year. Higher sales were still attributable to additional sales from Linnaleht
and a successful DVD series of Estonian film classics. 

Estonian newspaper circulation 2011-2012

In the 3rd quarter of 2012, no major changes occurred in the circulation of
newspapers. In the 3rd quarter, the market of daily newspapers experienced a
decline in circulation which is characteristic of summer months. Eesti
Päevaleht demonstrated the best results, increasing its circulation by 1600 as
compared to August 2012. As compared to the same period last year, the
circulation of all publications has fallen -  that of Eesti Päevaleht the least
(-300 copies) and that of Postimees the most (-1200 copies). As a long-term
trend, the circulation of newspapers continues to fall slightly similarly to
other countries. 

Estonian newspaper readership 2011-2012

Due to the selection of a new partner for printed newspaper readership surveys,
it is not statistically correct to compare the data for 2011 and 2012 in
absolute terms but for the purpose of comparability, they are shown in the same
chart. The readership of daily newspapers of all publications has significantly
fluctuated throughout the year. However, the readership of weekly newspapers
(Maaleht, Eesti Ekspress)  has remained stable and in terms of Maaleht, is
steadily increasing. The Group continues to focus on development of digital
versions of its newspapers, the readers of which are not included in the table
above. 

Printing services segment

All printing services of AS Ekspress Grupp are provided by AS Printall which is
one of the largest printing companies in Estonia. Printall is able to print
both newspapers (coldset) and magazines (heatset). 



---------------                           
(EUR thousand)             Sales          
               ---------------------------
                Q3 2012  Q3 2011  Change %
------------------------------------------
AS Printall       6 263    6 126        2%
------------------------------------------



               ---------------------------
(EUR thousand)            EBITDA          
---------------                           
                Q3 2012  Q3 2011  Change %
------------------------------------------
AS Printall       1 310    1 417       -8%
------------------------------------------



---------------                                       
(EUR thousand)                   Sales                
               ---------------------------------------
                9 months 2012  9 months 2011  Change %
------------------------------------------------------
AS Printall            21 121         19 593        8%
------------------------------------------------------



               ---------------------------------------
(EUR thousand)                  EBITDA                
---------------                                       
                9 months 2012  9 months 2011  Change %
------------------------------------------------------
AS Printall             4 402          4 464       -1%
------------------------------------------------------



Due to reaching maximum production capacity in the peak months, the printing
company finds it increasingly difficult to maintain its growth as compared to
last years. Ongoing increase of the prices of  input has impacted EBITDA, but
the margin continues to be high. The reference base in the 3rd quarter of 2011
was high due to recognition of income from the client’s long-term paper
savings. Growth has primarily come from exports. In the 3rd quarter, Printall
was granted ISO 9001 management certificate and ISO 14001 environmental
certificate. 

 Geographical break-down of printing services

                       Q3 2012  Q3 2011  Change %
-------------------------------------------------
                      ---------------------------
Exports                  4 228    4 061        4%
Finland                    749      593       26%
Sweden                   1 099    1 022        8%
Norway                     746      714        4%
Russia                     670      910      -26%
Denmark                    171      130       32%
Lithuania                  162      179       -9%
other exports              631      513       23%
Estonia                  2 035    2 065       -1%
Total sales              6 263    6 126        2%
-------------------------------------------------
-------------------------------------------------
incl. group sales          870      921       -6%
incl. non-group sales    5 393    5 205        4%
-------------------------------------------------



                       9 months 2012  9 months 2011  Change %
-------------------------------------------------------------
                      ---------------------------------------
Exports                       14 574         13 061       12%
Finland                        2 207          1 560       41%
Sweden                         4 410          3 566       24%
Norway                         2 079          2 167       -4%
Russia                         2 689          3 077      -13%
Denmark                          486            559      -13%
Lithuania                        536            551       -3%
other exports                  2 167          1 581       37%
Estonia                        6 547          6 532        0%
Total sales                   21 121         19 593        8%
-------------------------------------------------------------
-------------------------------------------------------------
incl. group sales              2 870          2 959       -3%
incl. non-group sales         18 251         16 634       10%
-------------------------------------------------------------



Printing services and the environment

In addition to its very strong financial position, Printall AS also focuses on
environmentally conscious production. 

The Minister of the Environment of the Republic of Estonia and the waste
managing company AS Ragn-Sells have awarded Printall with the title of the Top
Recycler of the Year, because the company send 95% of its waste to recycling. 

The Nordic Council of Ministers has awarded Printall with the environmental
label “The Nordic Ecolabel”, used to acknowledge the companies in the Nordic
countries that produce environmentally efficiently. 

Printall also has FSC and PEFC Chain of Custody (COC) certificates, which the
company uses to promote a green way of thinking in the printing industry. 

Both of those certificates indicates compliance with monitoring and product
production process requirements which is issued to businesses that comply with
the requirements established by FSC (Forest Stewardship Council) and PEFC
(Programme for the Endorsement of Forest Certification). A business that is
issued those certificates helps to support the environmentally friendly,
socially fair and economically viable management of the world’s forests. 

Printall AS cares about the environment and uses green energy. The POWERED BY
GREEN certificate is a proof that the company buys electricity which has been
70% generated by renewable sources of energy. 



Consolidated balance sheet (unaudited)

(EUR thousand)                    30.09.2012  31.12.2011
--------------------------------------------------------
--------------------------------------------------------
ASSETS                                                  
Current assets                                          
Cash and cash equivalents           2 742          2 729
Trade and other receivables         6 848          6 921
Inventories                         2 424          2 833
Total                              12 014         12 483
Non-current assets held for sale       40             40
Total current assets               12 054         12 523
--------------------------------------------------------
--------------------------------------------------------
Non-current assets                                      
Term deposit                           98             98
Trade and other receivables           123            167
Property, plant and equipment      15 437         16 751
Intangible assets                  51 265         51 970
Total non-current assets           66 923         68 986
--------------------------------------------------------
TOTAL ASSETS                       78 977         81 509
--------------------------------------------------------
                                 -----------------------
LIABILITIES                                             
Current liabilities                                     
Borrowings                          4 955          5 436
Trade and other payables            8 796         11 111
Total current liabilities          13 751         16 547
--------------------------------------------------------
--------------------------------------------------------
Non-current liabilities                                 
Long-term borrowings               25 126         26 397
Other long-term liabilities           121              1
Derivate instruments                    0            176
Total non-current liabilities      25 247         26 574
--------------------------------------------------------
Total liabilities                  38 998         43 121
--------------------------------------------------------
--------------------------------------------------------
EQUITY                                                  
Share capital                      17 878         17 878
Share premium                      14 277         14 277
Reserves                              740            480
Retained earnings                   7 078          5 749
Currency translation reserve            6              4
Total equity                       39 979         38 388
--------------------------------------------------------
TOTAL LIABILITIES AND EQUITY       78 977         81 509
--------------------------------------------------------
                                                        

Consolidated statement of comprehensive income (unaudited)

(EUR thousand)                                  Q3      Q3   9 months   9 months
                                              2012    2011       2012       2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Sales                                       13 278  12 969     43 260     41 078
Cost of sales                                  (10     (10   (33 987)   (32 194)
                                              600)    090)                      
Gross profit                                 2 678   2 879      9 273      8 884
Marketing expenses                           (559)   (499)    (1 610)    (1 449)
Administrative expenses                         (1      (1    (4 837)    (5 153)
                                              537)    740)                      
Other expenses                                (28)    (45)      (130)      (198)
Other income                                   122     120        405        322
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gain from sale of ownership interest in          0       0          0      1 540
 joint venture                                                                  
Operating profit                               676     715      3 101      3 946
--------------------------------------------------------------------------------
                                           -------------------------------------
Interest income                                  0      13          5         34
Interest expense                             (301)   (554)    (1 343)    (1 689)
Foreign exchange gains (losses)               (16)      73        (2)       (29)
Other finance costs                           (59)    (34)      (103)      (106)
Net finance cost                             (376)   (502)    (1 443)    (1 790)
Profit/(loss) from investments in              (3)    (33)       (34)       (43)
 associates                                                                     
Profit (loss) before income tax                297     180      1 624      2 113
Income tax expense                            (34)    (62)      (211)      (212)
--------------------------------------------------------------------------------
Profit (loss) for the reporting period         263     118      1 413      1 901
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net profit (loss) for the reporting period                                      
 attributable to:                                                               
equity holders of the Parent Company           263     118      1 413      1 901
non-controlling interest                         0       0          0          0
Other comprehensive income (expense)                                            
Currency translation differences                15    (73)          2         35
Hedging reserve change                          46      42        176        371
Total other comprehensive income (expense)      61    (31)        178        406
 for the period                                                                 
Comprehensive income (expense) for the         324      87      1 591      2 307
 reporting period attributable to:                                              
equity holders of the Parent Company           324      87      1 591      2 307
non-controlling interest                         0       0          0          0
--------------------------------------------------------------------------------
Basic and diluted earnings per share          0.01    0.00       0.05       0.06
--------------------------------------------------------------------------------

Consolidated cash flow statement (unaudited)

(EUR thousand)                                             9 months     9 months
                                                               2012         2011
--------------------------------------------------------------------------------
Cash flows from operating activities                                            
--------------------------------------------------------------------------------
Operating profit (loss) for the period                        3 101        3 946
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adjustments for:                                                                
Depreciation, amortisation and impairment                     2 534        2 576
Gain from sale of ownership interest in joint venture             0      (1 540)
Profit (loss) on sale and write-downs of property,               27         (12)
 plant and equipment                                                            
Changes in working capital:                                                     
Trade and other receivables                                    (76)        (332)
Inventories                                                     409          267
Trade and other payables                                    (2 272)      (1 705)
Cash generated from operations                                3 723        3 200
Income tax paid                                                (90)         (98)
Interest paid                                               (1 343)      (1 800)
                                                       -------------------------
Net cash used in operating activities                         2 290        1 302
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities                                            
Investments in subsidiaries and joint ventures                    0         (26)
Purchase of other financial investments                        (15)            0
Interest received                                                 5           34
Purchase of property, plant and equipment                     (584)        (575)
Proceeds from sale of property, plant and equipment              37           43
Loans granted                                                   (1)         (25)
Loan repayments received                                        182          124
                                                       -------------------------
Net cash used in investing activities                         (376)        (425)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from financing activities                                            
Finance lease repayments made                                 (390)        (921)
Change in overdraft used                                      1 347        1 131
Proceeds from borrowings (incl. factoring)                        0          170
Repayments of borrowings                                    (2 857)      (2 417)
                                                       -------------------------
Net cash used in financing activities                       (1 900)      (2 037)
--------------------------------------------------------------------------------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS             14      (1 160)
--------------------------------------------------------------------------------
                                                       -------------------------
Cash and cash equivalents at the beginning of the             2 729        2 767
 period                                                                         
Cash and cash equivalents at the end of the period            2 742        1 607
--------------------------------------------------------------------------------




         Additional information:
         Gunnar Kobin
         Chairman of the Management Board
         GSM: +372 5188111
         e-mail: [email protected]