Market announcement

Title

AS EKSPRESS GRUPP: Consolidated Interim Report for the Third Quarter and 9 Months of 2014

Message

Tallinn, Estonia, 2014-10-31 15:15 CET (GLOBE NEWSWIRE) --


In the third quarter of 2014, at the revenue level of EUR 13.8 million, the
Group earned from ordinary business operations EBITDA of EUR 1.7 million and
the net profit EUR 0.6 million. In a year-on-year comparison, revenue growth
was 7%, EBITDA was higher by 27% and the net profit increased 42%. The result
notably exceeded our expectations. Year-to-date revenue amounted to EUR 44.6
million, EBITDA was EUR 6.1 million and net profit was EUR 3.0 million. In
comparison with the same period last year EBITDA increased 17% and net profit
was 21% higher. Third-quarter EBITDA margin was 12.5%, as compared to 10.5% a
year earlier, and year-to-date EBITDA margin was 13.7%, up from 12.5% a year
ago. 

The above figures include all our joint ventures (AS SL Õhtuleht, AS Ajakirjade
Kirjastus and AS Express Post) consolidated 50% line-by-line. Starting from
2014, in consolidated financial reports 50% joint ventures shall be recognised
under the equity method, in compliance with new international financial
reporting standards (IFRS). The change in this accounting policy does not
affect the net profit, but decreases the third-quarter sales revenue by
approximately EUR 2 million and the EBITDA by approximately EUR 0.25 million
(nine-month sales revenue was approximately EUR 6.3 million lower and EBITDA
was approximately EUR 0.64 million lower). In its monthly reports, the
management monitors the Group’s performance by continuing proportional
consolidation of joint ventures and the syndicated loan contract also
determines the calculation of loan covenants by proportional consolidation. For
purposes of clarity, the management report shows two sets of indicators: one
where joint ventures are consolidated line-by-line and the other where joint
ventures are recognised under the equity method and their result is presented
as financial income in one line. In Note 3 of the interim financial statements,
the impact of every joint venture on the respective line of the income
statement and balance sheet is described in more detail. 

The income statement for the third quarter includes financial income in amount
of EUR 1 million resulting from the acquisition of shares of AS Ajakirjade
Kirjastus and AS SL Õhtuleht from AS Eesti Meedia, their sale to OÜ Suits
Meedia and subsequent restructuring. In essence, joint ventures with AS Eesti
Meedia were sold and new joint ventures were acquired together with OÜ Suits
Meedia. In addition, as a result of the transactions, trademarks and goodwill
in the acquired joint ventures are now recognised at their fair value in the
Group’s balance sheet. 

For the first time, the Group’s total debt/EBITDA ratio fell below the level of
3, and was 2.69 at the end of the period. Over the last five years, we have
been significantly reducing our loan burden and increasing EBITDA, and have now
reached the level we have set as an internal target. This will open up new
opportunities for financing the company’s further development and enables us to
more aggressively consider potential investments for business growth. 

In the third quarter, all business segments of the Group showed strong growth
in both sales revenue and profit. The EBITDA of the media segment increased
over 200% in a year, amounting to EUR 323 thousand. Revenue of printing
services increased 6% and profit amounted to EUR 1 326 thousand. Starting from
the third quarter when the Lithuanian magazine publisher UAB Ekspress Leidyba
was merged with Delfi Lithuania, we no longer separate online media from
periodicals, and talk about one media segment which represents both online and
print media. The online revenue of Delfi Lithuania continues to be reported
separately. 

In the third quarter we were positively surprised by the strong performance of
the media segment, in particular our online businesses. As in the first
quarter, sales revenue is usually lower also in the third quarter, because of
the two summer months. Unlike in earlier years, the advertising market remained
active this summer and Delfi sales organisations were able to benefit from this
activity in all our markets. Revenue growth was attributable mainly to
successful launches of new topical portals, new advertising solutions, Delfi
TV, growing use of mobile applications and special projects. Revenue has
increased also because of the growing focus on direct customers and expansion
of the sales workforce. It is especially encouraging that Delfi Latvia managed
to offset the disappointing start of the year already from the first month of
the quarter. In the third quarter, Delfi Latvia increased sales revenue 28% as
compared to the year earlier, becoming the fastest-growing online business in
the Group. In addition, Delfi Latvia’s revenue increased also thanks to the
weakening impact of Latvia’s accession to the euro and the fact that in the
third quarter Delfi became the largest online environment in Latvia, overtaking
the local e-mail service provider Inbox, and managed to keep the leadership
position for two months in spite of the merger of two competing portals -
Apollo and Tvnet. 

While in earlier years, online media has struggled to remain positive in the
third quarter, this year Delfis of all three Baltic countries earned a total of
EUR 174 thousand in EBITDA. Growth in earnings is stemming from higher revenue,
better cost control and synergy created by the merger of Lithuanian
enterprises. 

Of the print media companies, AS SL Õhtuleht posted the strongest result,
increasing its EBITDA by 79%, mainly thanks to a notably more efficient
printing contract. AS Eesti Ajalehed also posted a better result than last
year, whereas the business environment of daily and weekly newspapers in the
company’s product portfolio remains challenging and achieving last year’s
revenue both in sales and advertising sales remain difficult. At the same time,
the development of digital products has been moving at the same aggressive pace
than a year earlier, with the number of digital subscribers increasing
approximately 80% and bringing the number of paid subscribers per publication
up to almost 9 thousand subscribers. In the fourth quarter, Eesti Päevaleht
will launch a new digital publication that will notably expand the
possibilities of increasing the number of potential users by making the
newspaper also accessible in smartphones, in addition to its currently popular
tablet version. 

The 25th anniversary of Eesti Ekspress included the production of the birthday
issue with the largest-ever circulation and the free distribution of 200
thousand newspapers all over Estonia. In the third quarter, tests with sale of
digital books to newspaper subscribers were started and this is exceeding
expectations. The focus is on increasing efficiency of production. In October,
Eesti Ekspress will be produced by using the new content management system and
there are plans to implement it also in the production of Maaleht. 

The third quarter result of AS Ajakirjade Kirjastus remained below last year’s
result mainly because of unexpectedly weak advertising sales in September. In
advertising sales, magazines directly depend on international advertisers. The
growing economic uncertainty in Europe as well as the Ukraine-Russia conflict
and its possible impact on Estonia have made international advertising brands
more cautious. 

AS Express Post that is included in the media segment increased its result 27%
as compared to last year, mainly because of growth in direct mail. 

We are also satisfied with the performance of Printall, provider of printing
services, whose third-quarter revenue and EBITDA exceeded last year’s result by
7%, despite the impact of the Ukraine conflict on exports to Russia. At
present, the biggest export markets for Printall are Sweden, Finland and
Norway. Single orders are being fulfilled for France and Holland. 

One of the key events in the third quarter also included the final approval by
the Lithuanian Competition Authority of the acquisition of Adnet Media and the
legal closure of the transaction on 30 September 2014. Another significant
event was the appointment of Vytautas Benokraitis, former sales manager of
Delfi Lithuania, to the position of CEO of Delfi Lithuania. 

We remain cautious with regard to the fourth quarter, although the first 9
months have shown good results. In the fourth quarter, we expect consolidated
sales revenue growth 2-3% and EBITDA growth at around 20%. Annual sales revenue
growth should be in the range of 4-5% and EBITDA growth is excepted at least
15%. One factor behind improved results is the new printing contracts of SL
Õhtuleht and AS Ajakirjade Kirjastus that entered into force in the summer and
will give both companies significant savings in printing costs. New printing
contracts were concluded because of the change of ownership in both enterprises
that enabled the management of the companies, as a result of free market
competition, to negotiate notably better printing prices whereas both companies
will save in total approximately EUR 700 thousand a year. Since only the net
profit of our joint ventures is recognised in the Group’s income statement
prepared under new IFRS, the direct positive impact on consolidated results
will be smaller due to amortization of the trademarks and customer relations
which now appear in the balance sheet of the joint ventures. However the
positive impact is reflected in the EBITDA of the joint ventures themselves. 

We continue to look for new sources of growth that would help the Group to
expand its products and services. Currently we have started preparations for
several new projects to be launched next year. As our mission states, we
continue to offer new and interesting experiences both on paper and in digital
media, without ever compromising on news quality, choice of topics and
journalistic objectivity. 

FINANCIAL INDICATORS AND RATIOS – joint ventures consolidated 50% line-by-line

Performance indicators – joint ventures       Q3      Q3  Change      Q3      Q3
 consolidated  50% (EUR thousand)           2014    2013     %      2012    2011
--------------------------------------------------------------------------------
For the period                                                                  
-----------------------------------------                                -------
Sales                                     13 833  12 977      7%  13 278  12 969
--------------------------------------------------------------------------------
                                         --------------------------------       
EBITDA                                     1 732   1 359     27%   1 495   1 568
-----------------------------------------                                -------
EBITDA margin (%)                          12.5%   10.5%           11.3%   12.1%
--------------------------------------------------------------------------------
                                         --------------------------------       
Operating profit*                            872     718     21%     676     715
-----------------------------------------                                -------
Operating margin* (%)                       6.3%    5.5%            5.1%    5.5%
--------------------------------------------------------------------------------
Interest expenses                          (189)   (204)      7%   (301)   (554)
--------------------------------------------------------------------------------
                                         --------------------------------       
Profit /(loss) for the period*               644     455     42%     263     119
-----------------------------------------                                -------
Net margin* (%)                             4.7%    3.5%            2.0%    0.9%
--------------------------------------------------------------------------------
Net profit /(loss) for the period in the   1 599     455    251%     263     119
 financial statements (incl. impairments                                        
 and gain on change of ownership                                                
 interest)                                                                      
-----------------------------------------                                -------
Net margin (%)                             11.6%    3.5%            2.0%    0.9%
--------------------------------------------------------------------------------
                                         --------------------------------       
ROA (%)                                     2.0%    0.6%            0.3%    0.1%
-----------------------------------------                                -------
ROE (%)                                     3.5%    1.1%            0.7%    0.3%
--------------------------------------------------------------------------------
Earnings per share (EPS)                    0.05    0.02            0.01    0.00
--------------------------------------------------------------------------------







Performance indicators – joint ventures        9       9  Change       9       9
 consolidated 50% (EUR thousand)          months  months     %    months  months
                                            2014    2013            2012    2011
--------------------------------------------------------------------------------
For the period                                                                  
-----------------------------------------                                -------
Sales                                     44 606  41 901      6%  43 260  41 078
--------------------------------------------------------------------------------
                                         --------------------------------       
EBITDA                                     6 124   5 246     17%   5 634   4 988
-----------------------------------------                                -------
EBITDA margin (%)                          13.7%   12.5%           13.0%   12.1%
--------------------------------------------------------------------------------
                                         --------------------------------       
Operating profit*                          3 743   3 299     13%   3 102   2 407
-----------------------------------------                                -------
Operating margin* (%)                       8.4%    7.9%            7.2%    5.9%
--------------------------------------------------------------------------------
Interest expenses                          (546)   (578)      6%      (1      (1
                                                                    343)    689)
--------------------------------------------------------------------------------
                                         --------------------------------       
Profit /(loss) for the period*             3 005   2 490     21%   1 414     360
-----------------------------------------                                -------
Net margin* (%)                             6.7%    5.9%            3.3%    0.9%
--------------------------------------------------------------------------------
Net profit /(loss) for the period in the   3 960   2 490     59%   1 414   1 900
 financial statements (incl. impairments                                        
 and gain on change of ownership                                                
 interest)                                                                      
-----------------------------------------                                -------
Net margin (%)                              8.9%    5.9%            3.3%    4.6%
--------------------------------------------------------------------------------
                                         --------------------------------       
ROA (%)                                     5.1%    3.2%            1.8%    2.2%
-----------------------------------------                                -------
ROE (%)                                     9.0%    5.9%            3.6%    5.0%
--------------------------------------------------------------------------------
Earnings per share (EPS)                    0.13    0.08            0.05    0.06
--------------------------------------------------------------------------------



* The results exclude impairments and the net extraordinary gain in relation to
the acquisition of an additional 50% ownership interest in Eesti Päevalehe AS
in the 1st quarter 2011. 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. They also exclude a gain in the amount of EUR
1.0 million from the acquisition of the shares of AS Ajakirjade Kirjastus and
AS SL Õhtuleht from AS Eesti Media, their sale to OÜ Suits Media and further
restructuring in 2014 where essentially joint ventures with AS Eesti Media were
liquidated and new joint ventures with OÜ Suits Media were set up. 



Balance sheet – joint ventures consolidated 50%  30.09.2014  31.12.2013   Change
 (EUR thousand)                                                             %   
--------------------------------------------------------------------------------
As of the end of the period                                                     
------------------------------------------------                        --------
Current assets                                       13 466      14 447      -7%
------------------------------------------------                        --------
Non-current assets                                   64 979      63 019       3%
------------------------------------------------                        --------
Total assets                                         78 445      77 466       1%
--------------------------------------------------------------------------------
                                                ------------------------        
incl. cash and bank                                   4 383       4 501      -3%
------------------------------------------------                        --------
incl. goodwill                                       40 339      40 052       1%
--------------------------------------------------------------------------------
                                                ------------------------        
Current liabilities                                  13 324      14 468      -8%
------------------------------------------------                        --------
Non-current liabilities                              19 110      20 673      -8%
------------------------------------------------                        --------
Total liabilities                                    32 434      35 141      -8%
--------------------------------------------------------------------------------
                                                ------------------------        
incl. borrowings                                     23 457      24 432      -4%
------------------------------------------------                        --------
Equity                                               46 011      42 325       9%
--------------------------------------------------------------------------------







Financial ratios (%) – joint ventures consolidated 50%    30.09.2014  31.12.2013
--------------------------------------------------------------------------------
Equity ratio (%)                                             59%         55%    
---------------------------------------------------------            -----------
Debt to equity ratio (%)                                     51%         58%    
---------------------------------------------------------            -----------
Debt to capital ratio (%)                                    31%         32%    
---------------------------------------------------------            -----------
Total debt/EBITDA ratio (adjusted as per syndicate           2.69        3.36   
 agreement)                                                                     
---------------------------------------------------------            -----------
Debt service coverage ratio                                  1.82        1.66   
---------------------------------------------------------            -----------
Liquidity ratio                                              1.01        1.00   
--------------------------------------------------------------------------------







Formulas used to calculate the financial ratios                                 
--------------------------------------------------------------------------------
- 
EBITDA margin (%)      EBITDA/sales x 100                                       
--------------------------------------------------------------------------------
Operating margin* (%)  Operating profit*/sales x100                             
--------------------------------------------------------------------------------
Net margin* (%)        Net profit*/sales x100                                   
--------------------------------------------------------------------------------
Net margin (%)         Net profit /sales x100                                   
--------------------------------------------------------------------------------
Earnings per share     Net profit / average number of shares                    
--------------------------------------------------------------------------------
Equity ratio (%)       Equity / (liabilities + equity) x100                     
--------------------------------------------------------------------------------
Debt to equity ratio   Interest bearing liabilities /equity x 100               
 (%)                                                                            
--------------------------------------------------------------------------------
Debt to capital ratio  Interest bearing liabilities – cash and cash equivalents 
 (%)                    (net debt) /(net debt +equity) x 100                    
--------------------------------------------------------------------------------
Total debt/EBITDA      Interest bearing liabilities – security deposit/EBITDA   
 ratio (adjusted)                                                               
--------------------------------------------------------------------------------
Debt service coverage  EBITDA/loan and interest payments for the period         
 ratio                                                                          
--------------------------------------------------------------------------------
Liquidity ratio        Current assets / current liabilities                     
--------------------------------------------------------------------------------
ROA (%)                Net profit /average assets x 100                         
--------------------------------------------------------------------------------
ROE (%)                Net profit /average equity x 100                         
--------------------------------------------------------------------------------

FINANCIAL INDICATORS AND RATIOS – joint ventures consolidated under the equity
method 

Performance indicators – joint ventures       Q3      Q3  Change      Q3      Q3
 under the equity method (EUR thousand)     2014    2013     %      2012    2011
--------------------------------------------------------------------------------
For the period                                                                  
-----------------------------------------                                -------
Sales (only subsidiaries)                 11 841  10 985      8%  11 377  11 046
--------------------------------------------------------------------------------
                                         --------------------------------       
EBITDA (only subsidiaries)                 1 487   1 164     28%   1 435   1 476
-----------------------------------------                                -------
EBITDA margin (%)                          12.6%   10.6%           12.6%   13.4%
--------------------------------------------------------------------------------
                                         --------------------------------       
Operating profit* (only subsidiaries)        783     544     44%     643     661
-----------------------------------------                                -------
Operating margin* (%)                       6.6%    5.0%            5.7%    6.0%
--------------------------------------------------------------------------------
                                         --------------------------------       
Interest expenses (only subsidiaries)      (175)   (204)     14%   (301)   (555)
-----------------------------------------                                -------
Profit of joint ventures by equity            87     174    -50%      33      53
 method                                                                         
--------------------------------------------------------------------------------
                                         --------------------------------       
Profit /(loss) for the period*               658     455     45%     263     119
-----------------------------------------                                -------
Net margin* (%)                             5.6%    4.1%            2.3%    1.1%
--------------------------------------------------------------------------------
Net profit /(loss) for the period in the   1 613     455    254%     263     119
 financial statements (incl. impairments                                        
 and gain on change of ownership                                                
 interest)                                                                      
-----------------------------------------                                -------
Net margin (%)                             13.6%    4.1%            2.3%    1.1%
--------------------------------------------------------------------------------
                                         --------------------------------       
ROA (%)                                     2.2%    0.6%            0.3%    0.1%
-----------------------------------------                                -------
ROE (%)                                     3.5%    1.1%            0.7%    0.3%
--------------------------------------------------------------------------------
Earnings per share (EPS)                    0.05    0.02            0.01    0.00
--------------------------------------------------------------------------------







Performance indicators – joint ventures        9       9  Change       9       9
 under the equity method (EUR thousand)   months  months       %  months  months
                                            2014    2013            2012    2011
--------------------------------------------------------------------------------
For the period                                                                  
-----------------------------------------                                -------
Sales (only subsidiaries)                 38 338  35 796      7%  37 125  35 032
--------------------------------------------------------------------------------
                                         --------------------------------       
EBITDA (only subsidiaries)                 5 481   4 777     15%   5 328   4 577
-----------------------------------------                                -------
EBITDA margin (%)                          14.3%   13.3%           14.4%   13.1%
--------------------------------------------------------------------------------
                                         --------------------------------       
Operating profit* (only subsidiaries)      3 313   2 897     14%   2 879   2 108
-----------------------------------------                                -------
Operating margin* (%)                       8.6%    8.1%            7.8%    6.0%
--------------------------------------------------------------------------------
                                         --------------------------------       
Interest expenses (only subsidiaries)      (531)   (578)      8%      (1      (1
                                                                    344)    695)
-----------------------------------------                                -------
Profit of joint ventures by equity           375     320     17%     137     212
 method                                                                         
--------------------------------------------------------------------------------
                                         --------------------------------       
Profit / (loss) for the period*            3 019   2 490     21%   1 414     360
-----------------------------------------                                -------
Net margin* (%)                             7.9%    7.0%            3.8%    1.0%
--------------------------------------------------------------------------------
Net profit / (loss) for the period in      3 974   2 490     60%   1 414   1 900
 the financial statements (incl.                                                
 impairments and gain on change of                                              
 ownership interest)                                                            
-----------------------------------------                                -------
Net margin (%)                             10.4%    7.0%            3.8%    5.4%
--------------------------------------------------------------------------------
                                         --------------------------------       
ROA (%)                                     5.3%    3.3%            1.8%    2.3%
-----------------------------------------                                -------
ROE (%)                                     9.0%    5.9%            3.6%    5.0%
--------------------------------------------------------------------------------
Earnings per share (EPS)                    0.13    0.08            0.05    0.06
--------------------------------------------------------------------------------



* The results exclude impairments and the net extraordinary gain in relation to
the acquisition of an additional 50% ownership interest in Eesti Päevalehe AS
in the 1st quarter 2011. 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. They also exclude a gain in the amount of EUR
1.0 million from the acquisition of the shares of AS Ajakirjade Kirjastus and
AS SL Õhtuleht from AS Eesti Media, their sale to OÜ Suits Media and further
restructuring in 2014 where essentially joint ventures with AS Eesti Media were
liquidated and new joint ventures with OÜ Suits Media were set up. 





Balance sheet– joint ventures under equity        30.09.2014  31.12.2013  Change
 method (EUR thousand)                                                       %  
--------------------------------------------------------------------------------
As at the end of the period                                                     
-------------------------------------------------                        -------
Current assets                                        10 797      11 357     -5%
-------------------------------------------------                        -------
Non-current assets                                    63 343      63 898     -1%
-------------------------------------------------                        -------
Total assets                                          74 140      75 255     -1%
--------------------------------------------------------------------------------
                                                 ------------------------       
incl. cash and bank                                    2 415       2 209      9%
-------------------------------------------------                        -------
incl. goodwill                                        39 596      39 596      0%
--------------------------------------------------------------------------------
                                                 ------------------------       
Current liabilities                                   10 220      12 258    -17%
-------------------------------------------------                        -------
Non-current liabilities                               17 895      20 672    -13%
-------------------------------------------------                        -------
Total liabilities                                     28 115      32 930    -15%
--------------------------------------------------------------------------------
                                                 ------------------------       
incl. borrowings                                      21 857      24 432    -11%
-------------------------------------------------                        -------
Equity                                                46 025      42 325      9%
--------------------------------------------------------------------------------







Financial ratios (%) – joint ventures under the equity    30.09.2014  31.12.2013
 method                                                                         
--------------------------------------------------------------------------------
Equity ratio (%)                                             62%         56%    
---------------------------------------------------------            -----------
Debt to equity ratio (%)                                     47%         58%    
---------------------------------------------------------            -----------
Debt to capital ratio (%)                                    31%         34%    
---------------------------------------------------------            -----------
Total debt / EBITDA ratio                                    3.00        3.71   
---------------------------------------------------------            -----------
Debt service coverage ratio                                  1.63        1.50   
---------------------------------------------------------            -----------
Liquidity ratio                                              1.06        0.93   
--------------------------------------------------------------------------------







Formulas used to calculate the financial ratios                                 
--------------------------------------------------------------------------------
- 
EBITDA margin (%)   EBITDA/sales x 100                                          
--------------------------------------------------------------------------------
Operating margin*   Operating profit*/sales x100                                
 (%)                                                                            
--------------------------------------------------------------------------------
Net margin* (%)     Net profit*/sales x100                                      
--------------------------------------------------------------------------------
Net margin (%)      Net profit /sales x100                                      
--------------------------------------------------------------------------------
Earnings per share  Net profit / average number of shares                       
--------------------------------------------------------------------------------
Equity ratio (%)    Equity / (liabilities + equity) x100                        
--------------------------------------------------------------------------------
Debt to equity      Interest bearing liabilities /equity x 100                  
 ratio (%)                                                                      
--------------------------------------------------------------------------------
Debt to capital     Interest bearing liabilities – cash and cash equivalents    
 ratio (%)           (net debt) /(net debt +equity) x 100                       
--------------------------------------------------------------------------------
Total debt/EBITDA   Interest bearing borrowings /EBITDA                         
 ratio                                                                          
--------------------------------------------------------------------------------
Debt service        EBITDA/loan and interest payments for the period            
 coverage ratio                                                                 
--------------------------------------------------------------------------------
Liquidity ratio     Current assets / current liabilities                        
--------------------------------------------------------------------------------
ROA (%)             Net profit /average assets x 100                            
--------------------------------------------------------------------------------
ROE (%)             Net profit /average equity x 100                            
--------------------------------------------------------------------------------

SEGMENT OVERVIEW

From the third quarter of the current year when the Group’s Lithuanian
subsidiaries were merged, the Group’s activities are divided into the media
segment and the printing services segment. Previously, the entities of the
media segment were divided between – online media and publishing of
periodicals. 

Cyclicality

All operating areas of the Group are characterised by cyclicality and
fluctuation, related to the changes in the overall economic conditions and
consumer confidence. The Group’s revenue can be adversely affected by an
economic slowdown or recession. It can appear in lower advertising costs in
retail, preference of other advertising channels (e.g. preference of internet
rather than print media) and changes in consumption habits of retail consumers
(following current news in news portals versus reading printed newspapers,
preference of the younger generation to use mobile devices and other
communication channels, etc.). 

Seasonality

The revenue from the Group’s advertising sales as well as in the printing
services segment is impacted by major seasonal fluctuations. The level of both
types of revenue is the highest in the 2nd and 4th quarter of each year and the
lowest in the third quarter. Revenue is higher in the 4th quarter because of
higher consumer spending during the Christmas season, accompanied by the
increase in advertising expenditure. Advertising expenditure is usually the
lowest during the summer months, as well as during the first months of the year
following Christmas and New Year’s celebrations. Book sales are the strongest
in the last quarter of the year. 

Key financial data of the segments Q3 2011-2014



(EUR thousand)                                 Sales                 Sales      
--------------------------------------------------------------------------------
                                    Q3 2014  Q3 2013  Change %  Q3 2012  Q3 2011
--------------------------------------------------------------------------------
media segment (incl. online sales)    6 017    5 551        8%    5 841    5 501
-----------------------------------                  ----------         --------
incl. revenue from digital            2 918    2 479       18%    2 315    2 045
 channels                                                                       
-----------------------------------                  ----------         --------
printing services                     6 596    6 147        7%    6 263    6 126
-----------------------------------                  ----------         --------
corporate functions                     427      396        8%      268       64
-----------------------------------                  ----------         --------
intersegment eliminations           (1 200)  (1 109)       -8%    (995)    (643)
--------------------------------------------------------------------------------
TOTAL GROUP                          11 841   10 985        8%   11 377   11 046
by new accounting standards                                                     
--------------------------------------------------------------------------------







(EUR thousand)                         EBITDA                 EBITDA     
-------------------------------------------------------------------------
                             Q3 2014  Q3 2013  Change %  Q3 2012  Q3 2011
-------------------------------------------------------------------------
media segment                    323      102      218%      330      334
----------------------------                  ----------         --------
printing services              1 326    1 245        6%    1 310    1 417
----------------------------                  ----------         --------
corporate functions            (162)    (183)       12%    (206)    (278)
----------------------------                  ----------         --------
intersegment eliminations        (0)        0     -100%        1        3
-------------------------------------------------------------------------
TOTAL GROUP                    1 487    1 164       28%    1 435    1 476
by new accounting standards                                              
-------------------------------------------------------------------------







EBITDA margin                Q3 2014  Q3 2013  Q3 2012  Q3 2011
---------------------------------------------------------------
media segment                     5%       2%       6%       6%
----------------------------                           --------
printing services                20%      20%      21%      23%
---------------------------------------------------------------
TOTAL GROUP                      13%      11%      13%      13%
by new accounting standards                                    
---------------------------------------------------------------





Key financial data of the segments 9 months 2011-2014



(EUR thousand)                          Sales                      Sales        
--------------------------------------------------------------------------------
                             9 months    9 months  Change   9 months    9 months
                                 2014        2013     %         2012        2011
--------------------------------------------------------------------------------
                          ------------------------        -----------           
media segment (incl.           19 923      18 225      9%     18 513      17 240
 online sales)                                                                  
--------------------------                        --------           -----------
incl. revenue from              9 434       8 206     15%      7 532       6 495
 digital channels                                                               
--------------------------                        --------           -----------
printing services              20 868      19 896      5%     21 121      19 593
--------------------------                        --------           -----------
corporate functions             1 271       1 137     12%        688         138
--------------------------                        --------           -----------
intersegment eliminations     (3 725)     (3 462)     -8%    (3 197)     (1 939)
--------------------------------------------------------------------------------
TOTAL GROUP                    38 338      35 796      7%     37 125      35 032
by new accounting                                                               
 standards                                                                      
--------------------------------------------------------------------------------







(EUR thousand)                      EBITDA                        EBITDA        
--------------------------------------------------------------------------------
                          9 months     9 months   Change    9 months    9 months
                              2014         2013     %           2012        2011
--------------------------------------------------------------------------------
media segment                1 922        1 109      73%       1 478         814
----------------------                          ---------            -----------
printing services            4 321        4 258       1%       4 402       4 464
----------------------                          ---------            -----------
corporate functions          (763)        (593)     -29%       (555)       (712)
----------------------                          ---------            -----------
intersegment                     0            2     -89%           2          11
 eliminations                                                                   
--------------------------------------------------------------------------------
TOTAL GROUP                  5 481        4 777      15%       5 328       4 577
by new accounting                                                               
 standards                                                                      
--------------------------------------------------------------------------------







EBITDA margin                 9 months      9 months      9 months      9 months
                                  2014          2013          2012          2011
--------------------------------------------------------------------------------
media segment                      10%            6%            8%            5%
-------------------------                                          -------------
printing services                  21%           21%           21%           23%
--------------------------------------------------------------------------------
TOTAL GROUP                        14%           13%           14%           13%
by new accounting                                                               
 standards                                                                      
--------------------------------------------------------------------------------



The segments’ EBITDA does not include intragroup management fees, and
impairment of goodwill and trademarks. Volume-based and other fees payable to
advertising agencies have not been deducted from the advertising sales of
segments, because the management monitors gross advertising sales. Discounts
and rebates are reduced from the Group’s sales and are included in the combined
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                                    
-----------------------------------------------------------------
Delfi Lithuania  www.delfi.lt  AS SL Õhtuleht     www.ohtuleht.ee
-----------------------------------------------------------------
                 ru.delfi.lt                                     
-----------------------------------------------------------------





Advertising portals owned by the Group



Owner            Portal       Owner              Portal             
--------------------------------------------------------------------
Delfi Lithuania  www.alio.lt  AS Eesti Ajalehed  www.ej.ee          
--------------------------------------------------------------------
                                                 www.ekspressauto.ee
--------------------------------------------------------------------





Media segment

The media segment includes Delfi operations in Estonia, Latvia and Lithuania as
well as the parent company Delfi Holding. Starting from 1 March 2014, the
operations of Delfi in Ukraine have been terminated. The nine-month EBITDA of
Delfi Ukraine also includes expenses related to the termination of operations.
The media segment also includes AS Eesti Ajalehed (publisher of Maaleht, Eesti
Ekspress and Eesti Päevaleht), AS SL Õhtuleht (publisher of Õhtuleht and
Linnaleht), book publisher OÜ Hea Lugu as well as magazine publishers AS
Ajakirjade Kirjastus in Estonia and UAB Ekspress Leidyba in Lithuania, the
latter having been merged into Delfi Lithuania on 1 July 2014. This segment
also includes AS Express Post, engaged in home delivery of periodicals. 





(EUR thousand)                                      Sales          
-------------------------------------------------------------------
                                         Q3 2014  Q3 2013  Change %
-------------------------------------------------------------------
Delfi Estonia                              1 089      877       24%
-------------------------------------------------         ---------
Delfi Latvia                                 635      498       28%
-------------------------------------------------         ---------
Delfi Lithuania (sh. Ekspress Leidyba)     1 768    1 643        8%
-------------------------------------------------         ---------
incl. online revenue of Delfi Lithuania    1 135    1 024       11%
-------------------------------------------------         ---------
Delfi Ukraine                                  0       11     -100%
-------------------------------------------------         ---------
AS Eesti Ajalehed                          2 487    2 484        0%
-------------------------------------------------         ---------
OÜ Hea Lugu                                   99      105       -6%
-------------------------------------------------         ---------
Other companies (Delfi Holding)                -        -         -
-------------------------------------------------         ---------
Intersegment eliminations                   (61)     (67)        9%
-------------------------------------------------         ---------
TOTAL (subsidiaries)                       6 017    5 551        8%
-------------------------------------------------------------------
                                                 ---------         
AS SL Õhtuleht*                              923      904        2%
-------------------------------------------------         ---------
AS Ajakirjade Kirjastus*                     939      952       -1%
-------------------------------------------------         ---------
AS Express Post*                             569      555        2%
-------------------------------------------------         ---------
Intersegment eliminations                  (246)    (239)       -3%
-------------------------------------------------------------------
TOTAL (joint ventures)                     2 185    2 173        1%
-------------------------------------------------------------------
TOTAL segment                              8 202    7 724        6%
-------------------------------------------------------------------







(EUR thousand)                                     EBITDA          
-------------------------------------------------------------------
                                         Q3 2014  Q3 2013  Change %
-------------------------------------------------------------------
Delfi Estonia                                 19     (28)      168%
----------------------------------------                  ---------
Delfi Latvia                                  20     (33)      161%
----------------------------------------                  ---------
Delfi Lithuania (sh. Ekspress Leidyba)       135       99       36%
----------------------------------------                  ---------
incl. online revenue of Delfi Lithuania                            
----------------------------------------                  ---------
Delfi Ukraine                                  0     (48)      100%
----------------------------------------                  ---------
AS Eesti Ajalehed                             52       35       49%
----------------------------------------                  ---------
OÜ Hea Lugu                                  (5)     (10)       50%
----------------------------------------                  ---------
Other companies (Delfi Holding)              102       90       13%
----------------------------------------                  ---------
Intersegment eliminations                      0      (3)         -
----------------------------------------                  ---------
TOTAL (subsidiaries)                         323      102      217%
-------------------------------------------------------------------
                                        ------------------         
AS SL Õhtuleht*                              115       64       79%
----------------------------------------                  ---------
AS Ajakirjade Kirjastus*                      55       75      -26%
----------------------------------------                  ---------
AS Express Post*                              75       59       27%
----------------------------------------                  ---------
Intersegment eliminations                    (1)      (3)       70%
-------------------------------------------------------------------
TOTAL (joint ventures)                       244      195       26%
-------------------------------------------------------------------
TOTAL segment                                567      297       91%
-------------------------------------------------------------------







(EUR thousand)                                             Sales                
--------------------------------------------------------------------------------
                                          9 months 2014  9 months 2013  Change %
--------------------------------------------------------------------------------
Delfi Estonia                                     3 560          2 884       23%
--------------------------------------------------------               ---------
Delfi Latvia                                      1 776          1 696        5%
--------------------------------------------------------               ---------
Delfi Lithuania (incl. Ekspress Leidyba)          5 797          5 354        8%
--------------------------------------------------------               ---------
incl. online revenues of Delfi Lithuania          3 878          3 390       14%
--------------------------------------------------------               ---------
Delfi Ukraine                                         2             36      -94%
--------------------------------------------------------               ---------
AS Eesti Ajalehed                                 8 425          7 948        6%
--------------------------------------------------------               ---------
OÜ Hea Lugu                                         590            556        6%
--------------------------------------------------------               ---------
Other companies                                       -              -         -
--------------------------------------------------------               ---------
Intersegment eliminations                         (227)          (249)        9%
--------------------------------------------------------               ---------
TOTAL (subsidiaries)                             19 923         18 225        9%
--------------------------------------------------------------------------------
                                                        ---------------         
AS SL Õhtuleht*                                   2 887          2 769        4%
--------------------------------------------------------               ---------
AS Ajakirjade Kirjastus*                          3 019          2 900        4%
--------------------------------------------------------               ---------
AS Express Post*                                  1 761          1 747        1%
--------------------------------------------------------               ---------
Additional eliminations                           (801)          (729)      -10%
--------------------------------------------------------------------------------
TOTAL (joint ventures)                            6 865          6 687        3%
--------------------------------------------------------------------------------
TOTAL segment                                    26 788         24 912        8%
--------------------------------------------------------------------------------







(EUR thousand)                                            EBITDA                
--------------------------------------------------------------------------------
                                          9 months 2014  9 months 2013  Change %
--------------------------------------------------------------------------------
Delfi Estonia                                       345            121      185%
-----------------------------------------                              ---------
Delfi Latvia                                        (6)             36     -117%
-----------------------------------------                              ---------
Delfi Lithuania (incl. Ekspress Leidyba)            835            592       41%
-----------------------------------------                              ---------
incl. online revenues of Delfi Lithuania                                        
-----------------------------------------                              ---------
Delfi Ukraine                                      (51)          (156)       67%
-----------------------------------------                              ---------
AS Eesti Ajalehed                                   390            185      111%
-----------------------------------------                              ---------
OÜ Hea Lugu                                          71             35      103%
-----------------------------------------                              ---------
Other companies                                     334            299       12%
-----------------------------------------                              ---------
Intersegment eliminations                             4            (3)         -
-----------------------------------------                              ---------
TOTAL (subsidiaries)                              1 922          1 109       73%
--------------------------------------------------------------------------------
                                         ------------------------------         
AS SL Õhtuleht*                                     229            169       36%
-----------------------------------------                              ---------
AS Ajakirjade Kirjastus*                            153             97       57%
-----------------------------------------                              ---------
AS Express Post*                                    258            207       25%
-----------------------------------------                              ---------
Additional eliminations                               2            (3)      138%
--------------------------------------------------------------------------------
TOTAL (joint ventures)                              643            470       37%
--------------------------------------------------------------------------------
TOTAL segment                                     2 565          1 579       62%
--------------------------------------------------------------------------------



*Proportional share of joint ventures



Delfi Estonia

  -- Further development of Delfi TV on a standalone and new platform and the
     increasing number of live webcasts under the Delfi TV brand including FIBA
     World Cup, Song and Dance Festival, visit of US President Barack Obama in
     Estonia, etc.
  -- Starting from September, basketball webcasts from games of 5 different
     leagues.
  -- Marketing actions in connection with Delfi’s 15th anniversary.

Estonian online readership 2013-2014

In the third quarter 2014, TNS Emor changed the methodology of its TNS Metric
survey, which explains the sharp increase in the number of users. The main
essence of the change is more accurate measurement and separate reporting of
the number of mobile users. As a result of this change, Delfi remains the
largest news portal in Estonia. This applies both to the number of PC and
mobile users who visit the news portals. The third quarter was the all-time
best also for the www.ohtuleht.ee portal. 



Delfi Latvia

  -- In July and August, Delfi was the largest online portal in Latvia.
  -- Production of streams from various events through Delfi TV on a new
     platform continued.
  -- New topical verticals for women (www.vina.lv) and politics in the Russian
     language (www.spektr.lv) were launched.
  -- Separate topical sites for basketball, Positivus, 25th anniversary of the
     Baltic Chain, etc. were launched.

  -- The number of followers of Delfi Latvia in Facebook, Twitter and Draugiemis
     continues to grow, totalling approximately 200 thousand.
  -- Cooperation projects:
     -- Media partner for Positivus Festival,
     -- Media partner for Baltic Pearl Film Festival,
     -- Media partner of the Latvian national ice-hockey team.



Latvian online readership 2013-2014

In July and August 2014, Delfi.lv became Latvia’s largest online portal for the
first time, exceeding the readership of inbox.lv. In September, however,
Inbox.lv had again more users than Delfi.lv. In spite of the merger of tvnet.lv
and apollo.lv in the 2nd quarter, their readership has not exceeded that of
Delfi. In addition, the first available data on the number of users of mobile
equipment are very favourable for Delfi.lv and Delfi is exceeding Latvian
competitors in terms of mobile equipment by more than 20%. 

Starting from January 2014, the method of the Gemius online survey has changed.
The readership in 2014 includes only results for computer users (PC) and
excludes all mobile equipment. Separate statistics on mobile equipment will be
created during 2014. 



Delfi Lithuania

  -- Production of live webcasts ad streams through Delfi TV on a new platform
     continued.
  -- A special co-site dedicated to auto fans in a partnership with Top Gear
     magazine.
  -- Special project with Lithuanian entertainment guide Kur.lt. Content
     oriented to young city audience.
  -- A special food order platform lekste.lt was integrated into Delfi recipes
     vertical 1000receptu.lt.
  -- In September, great attention was allocated to FIBA World Cup. Big special
     project with interactive widgets, modern design and big marketing campaign
     was launched.
  -- The organisations of Lithuanian magazine publisher Ekspress Leidyba and
     Delfi were merged into one media house.
  -- Delfi image campaign was launched in TV, Outdoor, Radio and Internet which
     involved famous Lithuanian athletes, public and political celebrities.



Lithuanian online readership 2013-2014

Delfi continues to be the largest online portal in Lithuania. In the third
quarter, there were no major changes in preferences of Internet users in
Lithuania, with the exception of lrytas.lt that has been losing more readers
than other portals. The initial data about the users of mobile equipment shows
that the competition in this segment in Lithuania is very tough and other
portals are closer to Delfi in readership than in computer users (PC). Starting
from January 2014, the method of the Gemius online survey has changed. The
readership in 2014 includes only results for computer users (PC) and excludes
all mobile equipment. Separate statistics on mobile equipment will be created
during 2014. 



Estonian newspaper circulation 2013-2014

Circulations of Estonian newspapers have remained stable or are falling
moderately. The circulation of daily newspapers is falling faster than that of
weekly newspapers. As of the third quarter 2014, there has also been a
significant development in the market – Õhtuleht has been the newspaper with
the largest circulation in Estonia for three consecutive months. Other Group
publications also performed well in the third quarter, with both Maaleht and
Eesti Ekspress increasing circulation. Only the circulation of Eesti Päevaleht
has decreased. One also needs to add to these figures the number of subscribers
of digital newspapers which totalled approximately 9 thousand for both Eesti
Ekspress and Eesti Päevaleht, as of the end of the third quarter. 

Estonian newspaper readership 2013-2014

Over the recent two years, newspaper readership has been fairly stable. The
majority of measurable publications have increased their readership slightly as
compared to the same period a year earlier. The number of readers of digital
newspapers of Ekspress Group is not included in the above figures and the
number of readers of all publications of Ekspress Group is higher than shown in
the graph above. 



Printing services segment



All printing services of the Group 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 2014  Q3 2013  Change %
------------------------------------------
AS Printall       6 596    6 147        7%
------------------------------------------







(EUR thousand)            EBITDA          
------------------------------------------
                Q3 2014  Q3 2013  Change %
------------------------------------------
AS Printall       1 326    1 245        7%
------------------------------------------







(EUR thousand)                   Sales                
------------------------------------------------------
                9 months 2014  9 months 2013  Change %
------------------------------------------------------
AS Printall            20 868         19 896        5%
------------------------------------------------------







(EUR thousand)                  EBITDA                
------------------------------------------------------
                9 months 2014  9 months 2013  Change %
------------------------------------------------------
AS Printall             4 321          4 258        1%
------------------------------------------------------





In the third  quarter, the revenue of AS Printall from printing services
increased 7.4%, including 8.5% for sale of paper and 6.3% for sale of pure
printing services. In the third quarter, exports increased 10%. There have been
changes in the structure of export markets and the share of Russia continues to
decrease. 

In June, AS Printall signed a contract for the acquisition of a new sheetfed
printing machine. The machine will be used for printing magazine covers,
small-circulation magazines and advertising products. The estimated time of
starting production is the 1st quarter of 2015. Approximately 2/3 of the
acquisition cost is financed with a long-term loan. 

Printing services and the environment

In addition to its very strong financial position, Printall also focuses on
environmentally conscious production. In 2012, Printall was granted ISO 9001
management and ISO 14001 environmental certificates. 

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

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

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

 Consolidated balance sheet (unaudited)

(EUR thousand)                                  30.09.2014  31.12.2013
----------------------------------------------------------------------
                                               ------------           
ASSETS                                                                
-----------------------------------------------            -----------
Current assets                                                        
-----------------------------------------------            -----------
Cash and cash equivalents                              810       2 111
-----------------------------------------------            -----------
Term deposit                                             5          98
-----------------------------------------------            -----------
Trade and other receivables                          7 854       6 819
-----------------------------------------------            -----------
Inventories                                          2 128       2 329
-----------------------------------------------            -----------
Total current assets                                10 797      11 357
----------------------------------------------------------------------
                                               ------------           
Non-current assets                                                    
-----------------------------------------------            -----------
Term deposit                                         1 600           0
-----------------------------------------------            -----------
Trade and other receivables                            401         399
-----------------------------------------------            -----------
Investments in joint ventures and subsidiaries         454       1 543
-----------------------------------------------            -----------
Property, plant and equipment                       13 064      13 595
-----------------------------------------------            -----------
Intangible assets                                   47 824      48 361
-----------------------------------------------            -----------
Total non-current assets                            63 343      63 898
-----------------------------------------------            -----------
TOTAL ASSETS                                        74 140      75 255
----------------------------------------------------------------------
                                               ------------           
LIABILITIES                                                           
-----------------------------------------------            -----------
Current liabilities                                                   
-----------------------------------------------            -----------
Borrowings                                           4 068       3 760
-----------------------------------------------            -----------
Trade and other payables                             6 152       8 498
-----------------------------------------------            -----------
Total current liabilities                           10 220      12 258
-----------------------------------------------            -----------
Non-current liabilities                                               
-----------------------------------------------            -----------
Long-term borrowings                                17 789      20 672
-----------------------------------------------            -----------
Other long-term payables                               106           0
-----------------------------------------------            -----------
Total non-current liabilities                       17 895      20 672
-----------------------------------------------            -----------
TOTAL LIABILITIES                                   28 115      32 930
----------------------------------------------------------------------
                                               ------------           
EQUITY                                                                
-----------------------------------------------            -----------
Share capital                                       17 878      17 878
-----------------------------------------------            -----------
Share premium                                       14 277      14 277
-----------------------------------------------            -----------
Treasury shares                                       (44)           0
-----------------------------------------------            -----------
Reserves                                             1 406       1 250
-----------------------------------------------            -----------
Retained earnings                                   12 470       8 848
-----------------------------------------------            -----------
Currency translation reserve                            38          72
-----------------------------------------------            -----------
TOTAL EQUITY                                        46 025      42 325
-----------------------------------------------            -----------
TOTAL LIABILITIES AND EQUITY                        74 140      75 255
----------------------------------------------------------------------

Consolidated statement of comprehensive income (unaudited)

(EUR thousand)                                    Q3      Q3  9 months  9 months
                                                2014    2013      2014      2013
--------------------------------------------------------------------------------
                                             --------                           
Sales revenue                                 11 841  10 985    38 338    35 796
---------------------------------------------        ---------------------------
Cost of sales                                     (9      (9  (29 906)  (28 343)
                                                545)    048)                    
---------------------------------------------        ---------------------------
Gross profit                                   2 296   1 937     8 432     7 453
---------------------------------------------        ---------------------------
Other income                                     116     156       338       341
---------------------------------------------        ---------------------------
Marketing expenses                             (446)   (406)   (1 411)   (1 242)
---------------------------------------------        ---------------------------
Administrative expenses                           (1      (1   (3 943)   (3 583)
                                                164)    121)                    
---------------------------------------------        ---------------------------
Other expenses                                  (19)    (22)     (103)      (72)
--------------------------------------------------------------------------------
Gain from change in ownership interest in        955       0       955         0
 joint ventures                                                                 
--------------------------------------------------------------------------------
Operating profit                               1 738     544     4 268     2 897
--------------------------------------------------------------------------------
                                             --------                           
Interest income                                    2       1         5         4
---------------------------------------------        ---------------------------
Interest expense                               (175)   (204)     (531)     (578)
---------------------------------------------        ---------------------------
Foreign exchange gains/(losses)                    0    (30)        35      (26)
---------------------------------------------        ---------------------------
Other finance costs                             (15)    (17)      (48)      (43)
---------------------------------------------        ---------------------------
Total finance income/costs                     (188)   (250)     (539)     (643)
---------------------------------------------        ---------------------------
Profit (loss) on shares of joint ventures         87     174       375       320
---------------------------------------------        ---------------------------
Profit (loss) on shares of associates            (7)       4      (16)         0
---------------------------------------------        ---------------------------
Profit before income tax                       1 630     472     4 088     2 574
---------------------------------------------        ---------------------------
Income tax expense                              (17)    (17)     (114)      (84)
--------------------------------------------------------------------------------
Net profit for the reporting period            1 613     455     3 974     2 490
--------------------------------------------------------------------------------
                                             --------                           
Net profit for the reporting period                                             
 attributable to:                                                               
---------------------------------------------        ---------------------------
Equity holders of the parent company           1 613     455     3 974     2 490
---------------------------------------------        ---------------------------
Other comprehensive income (expense) that                                       
 may be subsequently reclassified to profit                                     
 or loss                                                                        
---------------------------------------------        ---------------------------
Currency translation differences                   0      24      (34)        14
---------------------------------------------        ---------------------------
Total other comprehensive income                   0      24      (34)        14
---------------------------------------------        ---------------------------
Comprehensive income for the reporting         1 613     479     3 940     2 504
 period                                                                         
---------------------------------------------        ---------------------------
Attributable to equity holders of the parent   1 613     479     3 940     2 504
 company                                                                        
---------------------------------------------        ---------------------------
Basic and diluted earnings per share            0.05    0.02      0.13      0.08
--------------------------------------------------------------------------------

Consolidated cash flow statement (unaudited)

(EUR thousand)                                            9 months      9 months
                                                              2014          2013
--------------------------------------------------------------------------------
Cash flows from operating activities                                            
--------------------------------------------------------------------------------
Operating profit for the reporting period                    4 268         2 897
--------------------------------------------------------------------------------
                                                     --------------             
Adjustments:                                                                    
-----------------------------------------------------              -------------
Depreciation, amortisation and impairment                    2 168         1 859
-----------------------------------------------------              -------------
Gain from change in ownership interest in joint              (955)             0
 ventures                                                                       
-----------------------------------------------------              -------------
Loss on sale and write-down of property, plant and             (8)           (2)
 equipment                                                                      
-----------------------------------------------------              -------------
Change in value of share option                                102             0
-----------------------------------------------------              -------------
Cash flows from operating activities:                                           
-----------------------------------------------------              -------------
Trade and other receivables                                    603           359
-----------------------------------------------------              -------------
Inventories                                                    201           432
-----------------------------------------------------              -------------
Trade and other payables                                   (2 600)         (956)
-----------------------------------------------------              -------------
Cash generated from operations                               3 779         4 589
-----------------------------------------------------              -------------
Income tax paid                                              (150)         (174)
-----------------------------------------------------              -------------
Interest paid                                                (531)         (578)
--------------------------------------------------------------------------------
Net cash generated from operating activities                 3 098         3 837
--------------------------------------------------------------------------------
                                                     --------------             
Cash flows from investing activities                                            
-----------------------------------------------------              -------------
Term deposit (placement)/release                           (1 600)             0
-----------------------------------------------------              -------------
Received on restructuring of joint ventures                    820             0
-----------------------------------------------------              -------------
Investments in joint ventures                                  (3)             0
-----------------------------------------------------              -------------
Acquisition of associate                                      (80)             0
-----------------------------------------------------              -------------
Acquisition of subsidiary                                        0         (349)
-----------------------------------------------------              -------------
Interest received                                                5             4
-----------------------------------------------------              -------------
Purchase of  property, plant and equipment                 (1 107)         (671)
-----------------------------------------------------              -------------
Proceeds from sale of property, plant and equipment             11            18
-----------------------------------------------------              -------------
Loans granted                                                 (22)           (3)
-----------------------------------------------------              -------------
Loan repayments received                                         4             5
--------------------------------------------------------------------------------
Net cash generated from investing activities               (1 972)         (996)
--------------------------------------------------------------------------------
                                                     --------------             
Cash flows from financing activities                                            
-----------------------------------------------------              -------------
Dividend received                                              203           312
-----------------------------------------------------              -------------
Finance lease repayments made                                 (56)          (10)
-----------------------------------------------------              -------------
Change in use of overdraft                                     228         (745)
-----------------------------------------------------              -------------
Repayments of borrowings                                   (2 758)       (2 691)
-----------------------------------------------------              -------------
Purchase of treasury shares                                   (44)             0
--------------------------------------------------------------------------------
Net cash used in financing activities                      (2 427)       (3 134)
--------------------------------------------------------------------------------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS       (1 301)         (293)
--------------------------------------------------------------------------------
                                                     --------------             
Cash and cash equivalents at the beginning of the            2 111         1 193
 period                                                                         
-----------------------------------------------------              -------------
Cash and cash equivalents at the end of the period             810           899
--------------------------------------------------------------------------------




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