Market announcement

Title

AS Tallink Grupp Unaudited Consolidated Interim Report Q4 2021

Message

In the fourth quarter (1 October - 31 December) of the year, Tallink Grupp AS
and its subsidiaries (the Group) carried 1 122 892 passengers, which is 660
thousand passengers more than in the fourth quarter last year. The number of
cargo units transported increased by 24% in the same comparison. The Group's
unaudited consolidated revenue increased by 110.1% or EUR 87.3 million to a
total of EUR 166.6 million. Unaudited EBITDA was EUR 25.1 million (EUR 1.2
million in the fourth quarter 2020) and unaudited net loss was EUR 3.3 million
(net loss of EUR 26.9 million in the fourth quarter 2020). Net profit in the
second half of the year amounted to EUR 2.2 million (net loss of EUR 50.7
million in the second half of the year 2020).

The Group's operations and operating results were continuously strongly
influenced by the COVID-19 situation in the fourth quarter. In the beginning of
the quarter, particularly in October and November, the demand for travelling was
relatively strong due to moderate restrictions, which allowed the business to
start recovering and had positive effect on results. With the rise of new COVID-
19 variant, demand was negatively affected, and additional restrictions were put
in place by the end of the quarter in Group's home markets in Finland and
Sweden. The operational factors impacting results were following:

  * during the quarter 2 shuttle vessels, 3 cargo vessels, 6 cruise ferries and
    3 hotels were operating;
  * short-term charter of Silja Europa and Romantika;
  * significant increase in the global fuel prices;
  * cost savings from previously implemented measures.

To enhance travelling and contribute to resolving the COVID-19 crisis, the Group
offered the opportunity for passengers to perform COVID-19 antigen testing and
get vaccinated on board the Tallinn-Helsinki shuttle ferries since June 2021.

The results of the first half of the year were severely affected by limited
operations of vessels and low demand for travelling due to strict travel
restrictions imposed in Group's home markets. Despite of extensive travel
restrictions and continuous negative effect of COVID-19, lower impact from
support measures and government assistance, increasing fuel prices, the Group
managed to operate profitably in the second half of the year since the beginning
of the COVID-19 pandemic. In addition, reopening of Tallinn-Stockholm and
Helsinki-Stockholm routes in the second half of the year contributed to the
operating results of the Group. The earnings were supported by partial
alleviation of travel restrictions, cost savings from previously implemented
measures and short-term chartering of vessels.

Operations during the quarter
Given the uncertainty regarding the duration of the crisis and the course of the
post-crisis recovery with progress of vaccinations, the business environment has
remained challenging. In the current situation, the focus has remained on costs
and cash flow management to ensure the sustainability of the Group's core
business.

Cruise ferry Baltic Queen operated on the Tallinn-Stockholm route in the fourth
quarter. Cruise ferry Victoria I operated 3 return trips on the Tallinn-Helsinki
route replacing the cruise ferry Silja Europa. Cruise ferries Silja Europa and
Romantika were chartered out from mid-October to mid-November.

Operations of the Riga-Stockholm route were suspended during the quarter.

Tallink City Hotel, Tallink Spa & Conference Hotel and Tallink Express Hotel
were all operating during the fourth quarter. Tallink Hotel Riga has remained
closed since October 2020 and was not opened in 2021.

Estonia-Finland routes' shuttle vessels Megastar and Star, cargo vessel Sea
Wind, Paldiski-Kapellskär route cargo vessels Regal Star and Sailor, and the
four Finland-Sweden routes' cruise ferries continued their operations throughout
the quarter.

Sales and segments
In the fourth quarter of 2021, the Group's total revenue increased by EUR 87.3
million to EUR 166.6 million. Total revenue in the fourth quarter of 2020 and
2019 was EUR 79.3 million and EUR 226.4 million, respectively.

Revenue from route operations (core business) increased by EUR 71.4 million to
EUR 139.2 million. The passenger operations and segment results on all routes
were significantly affected by the COVID-19 situation and imposed travel
restrictions.

The number of passengers carried on the Estonia-Finland routes increased by
70.9% compared to last year. The number of transported cargo units increased by
19.6%. Estonia-Finland routes' revenue increased by EUR 18.1 million, or 48.3%,
to EUR 55.5 million. The segment result increased by EUR 7.4 million to EUR 6.6
million. The segment effectively reflects operations of two shuttle vessels, one
cruise ferry and one cargo vessel.

The number of passengers carried on the Finland-Sweden routes increased by
283.1%. The number of transported cargo units increased by 34.4%. The route's
revenue increased by EUR 42.4 million to EUR 64.2 million and the segment result
improved by EUR 20.2 million to EUR 2.9 million. The segment reflects the
operations of Turku-Stockholm and Helsinki-Stockholm routes.

On Estonia-Sweden routes' the number of passengers carried increased by 104
thousand compared to last year. The number of transported cargo units increased
by 40.8%. Estonia-Sweden routes' revenue increased by EUR 12.0 million to EUR
19.4 million and the segment result improved by EUR 3.7 million to EUR -1.1
million. Estonia-Sweden route reflects operation of two cargo vessels and one
cruise ferry as well as expenses related to the suspended cruise ferry Victoria
I.

The Latvia-Sweden route operations were suspended in the fourth quarter. The EUR
-3.6 million segment result reflects the expenses of the suspended cruise
ferries Isabelle as well as Romantika after conclusion of charter period.

Revenue from the segment other increased by a total of EUR 16.4 million and
amounted to EUR 27.9 million. The increase was mainly driven by charter revenue
and to a lesser extent by accommodation sales and various retail activities.

Earnings
In the fourth quarter of 2021, the Group's gross profit improved by EUR 38.4
million compared to the same period last year, amounting to EUR 20.0 million.
EBITDA increased by EUR 23.9 million and amounted to EUR 25.1 million.

In the fourth quarter, the net amount of government assistance from Group's home
markets was limited at EUR 1.4 million (EUR 14.7 million in fourth quarter of
2020). In addition, the reduction in fairway dues in Estonia amounted to EUR
0.6 million (EUR 1.1 million in fourth quarter of 2020).

Amortisation and depreciation expense decreased by EUR 1.1 million to EUR 24.2
million compared to last year.

As a result of increased interest-bearing liabilities, net finance costs
increased by EUR 0.9 million compared to the fourth quarter of last year.

The Group's unaudited net loss for the fourth quarter of 2021 was EUR 3.3
million or EUR 0.004 per share compared to a net loss of EUR 26.9 million or EUR
0.040 per share in 2020 and net profit of EUR 5.5 million or EUR 0.008 per share
in 2019.

Results of the 12 months of 2021
In the 2021 financial year (1 January - 31 December), the Group carried a total
of 2 961 975 passengers, which is 21% less compared to the 2020 financial year.
The number of cargo units transported increased by 2.6% compared to the previous
financial year.

The Group's unaudited consolidated revenue amounted to EUR 476.9 million (EUR
442.9 million in 2020). Unaudited EBITDA was EUR 58.3 million (EUR 8.0 million,
2020) and unaudited net loss for the financial year was EUR 56.6 million or EUR
0.08 per share (net loss of EUR 108.3 million or EUR 0.16 per share, 2020).

The financial result of the 2021 financial year was impacted by suspension of
operations of vessels and hotels due to the COVID-19 situation and travel
restrictions as well as increase in global fuel prices. The results of the first
half of the year were strongly impacted by low season and low demand for
travelling due to extensive travel restrictions and communication advising
against travelling. Despite the continuous impact of the pandemic, the reopening
of Tallinn-Stockholm and Helsinki-Stockholm routes in the second half of the
year and income from short-term charter agreements contributed to the operating
results, and the Group managed to earn net profit in the second half of the
year.

Investments
The Group's investments in fourth quarter of 2021 amounted to EUR 9.2 million.

Due to the changed economic environment and suspension of vessel operations,
ship-related investments were kept to minimum and only critical maintenance and
repair works were performed.

Investments were also made in the development of the online booking and sales
systems as well as other administrative systems and in relation to the opening
of Burger King restaurants.

Dividends
Due to a deteriorated operating environment and considering the Group's long-
term interests, the shareholders' annual general meeting decided not to
distribute dividends for 2020.

Financial position
In order to relieve the liquidity issues caused by the COVID-19 situation, Group
entities were allowed to postpone tax payments in 2020 and 2021 by home markets
tax boards. The postponed tax liabilities amounted to EUR 1.8 million at the end
of the quarter and have different settlement dates over the coming years.

At the end of the second quarter, the Group agreed with financial institutions
on the amendment and the prolongation of the waivers of financial covenants and
the postponement of principal payments under existing loan agreements. From the
second quarter of 2021 until the end of first quarter of 2022 repayments in the
total amount of EUR 82.1 million are deferred and added to the last payment of
each respective loan facility. The deferrals for the 2021 financial year amount
to EUR 67.4 million.

At the end of the fourth quarter 2021, the Group's net debt had decreased by EUR
24.9 million to EUR 652.4 million compared to the end of the fourth quarter
2020.

As at 31 December 2021, the Group's cash and cash equivalents amounted to EUR
127.6 million (EUR 27.8 million at 31 December 2020) and the Group had EUR
134.8 million in unused credit lines (EUR 119.3 million at 31 December 2020).
The total liquidity buffer (cash, cash equivalents and unused credit facilities)
amounted to EUR 262.4 million (EUR 147.1 million at 31 December 2020). The
current trade and other payables amounted to EUR 91.7 million (EUR 73.5 million
at 31 December 2020).

Economic Environment
The Group considers Finland, Sweden, Estonia and Latvia its home markets with
the most exposure to the economic and travel restriction developments in
Finland. The Group has also high exposure to the economic and travel restriction
developments in Estonia and Sweden. In the fourth quarter of 2021, the Group's
economic environment was still dominated by the ongoing COVID-19 pandemic and
restrictions related to international travel, although to a lesser extent
compared to previous periods.

Despite some decline during the quarter, the confidence of Finnish, Swedish and
Estonian consumers remained relatively high. The overall demand in passenger
traffic remained negatively affected by the COVID-19 related considerations,
particularly in the end of the quarter on Finnish and Swedish markets.

In the fourth quarter, the cargo business remained solid supported by the
continuously robust business confidence on all home markets. The market
conditions regarding the price competition remained challenging.

Measured in euros and weighted with the Group's consumption volumes, the global
fuel prices increased, on average, by 138% in the fourth quarter of 2021
compared to last year. Increase in the fuel prices was the main cause of the
Group's overall fuel cost increase by 132% compared to the same period last
year.

High levels of vaccination in Finland and Sweden contributed to consumer
confidence to travel, which was evident in the first months of the fourth
quarter. The developments with the new COVID-19 variant affected negatively the
demand in December. By the end of the quarter, infection rates grew rapidly in
all home markets and additional restrictions were put in place in Finland and
Sweden, effectively resulting in lower demand for travelling. The vaccination
pace in Latvia and particularly in Estonia unfortunately lagged and the lower
than average level of vaccination rate contributed to the countries rapid growth
in infections and hospitalisations per capita compared to other home markets.

For the foreseeable future, the key risk has to do with global and regional
developments of the COVID-19 situation, progress of national vaccination efforts
and related restrictions on travel and other economic activities, the economic
damage it may cause and its impact on local and international trade.

Events in Q4
Short-term chartering of cruise ferries Silja Europa and Romantika
Cruise ferries Silja Europa and Romantika were chartered out from mid-October to
mid-November to provide accommodation for the COP26 event in Glasgow, Scotland.

Opening of Burger King restaurants
In December 2021, three new Burger King restaurants were opened in Lithuania. By
the end of the year, the Group operated 14 Burger King restaurants in the
Baltics.

Events after the reporting period and outlook
Opening of Burger King restaurants
In January 2022, one new Burger King restaurant was opened in Latvia. The Group
continues preparations for opening additional Burger King restaurants in 2022.

Easing of travel restrictions in Group's home markets
Starting from February 2022, travel restrictions were lifted in Group's home
markets in Finland and Sweden, which contributed to the increase in number of
bookings.

Compromise for termination of dispute with AS Tallinna Sadam
On 11 February 2022, AS Tallink Grupp and AS Tallinna Sadam concluded a
settlement upon approval of which by the court, the court dispute between the
parties concerning the fees of port services provided to passenger vessels at
Old City Harbour is terminated, AS Tallink Grupp waives all the claims filed in
the matter and AS Tallinna Sadam will amend the port fees applied to passenger
vessels visiting the Old City Harbour.

Completion of the new LNG-based shuttle vessel MyStar
The new LNG-based shuttle vessel built in Rauma Shipyard is expected to be
delivered during spring 2022. MyStar is estimated to start operating on the
Tallinn-Helsinki route from June 2022.

Earnings
The Group's earnings are not generated evenly throughout the year. The summer
period is the high season in the Group's operations. In management's opinion and
based on prior experience most of the Group's earnings are generated during the
summer (June-August). However, this year, dependent on situation with the
vaccinations and cross-border travelling, the period extended to autumn.

Due to the ongoing COVID-19 situation the earnings outlook is uncertain and
continues to be strongly affected by external factors such as the progress of
vaccination and situation with new COVID-19 variants, states' decisions
regarding the timing of the lifting or imposing of travel restrictions and
allowing passenger traffic, passengers' willingness to travel as well as the
duration of the recovery period. Management expects the passenger traffic
between Estonia and Finland to recover more rapidly from the second quarter of
2022, when greater immunity is expected to be reached for most of the population
on Group's home markets and hospitalisation rates are decreasing.

Research and development projects
The Group does not have any substantial ongoing research and development
projects. The Group is continuously seeking opportunities for expanding its
operations in order to improve its results.

The Group is continuously looking for innovative ways to upgrade the ships and
passenger area technology to improve its overall performance through modern
solutions. The most recent technical projects are focusing on the solutions for
reduction of the ships CO2 footprint.

Risks
The Group's business, financial position and operating results could be
materially affected by various risks. These risks are not the only ones we face.
Additional risks and uncertainties not presently known to us, or that we
currently believe are immaterial or unlikely, could also impair our business.
The order of presentation of the risk factors below is not intended to be an
indication of the probability of their occurrence or of their potential effect
on our business.

  * COVID-19 situation and developments
  * Governmental restrictions on business activities
  * Accidents, disasters
  * Macroeconomic and labour market developments
  * Changes in laws and regulations
  * Relations with trade unions
  * Increase in the fuel prices and interest rates
  * Market and customer behaviour



Key figures

 For the period                                    Q4 2021     Q4 2020 Change %
-------------------------------------------------------------------------------
 Revenue (million euros)                             166.6        79.3   110.1%

 Gross profit/loss (million euros)                    20.0       -18.4   209.1%

 EBITDA¹ (million euros)                              25.1         1.2  2019.3%

 EBIT¹ (million euros)                                 0.9       -24.2   103.6%

 Net loss for the period (million euros)              -3.3       -26.9    87.6%



 Depreciation and amortisation (million euros)        24.2        25.4    -4.5%

 Capital expenditures¹ ²(million euros)                9.2         4.8    91.0%

 Weighted average number of ordinary shares
 outstanding                                   743,569,064 669,882,040    11.0%

 Earnings/loss per share¹                           -0.004      -0.040    88.8%



 Number of passengers                            1,122,892     462,859   142.6%

 Number of cargo units                             101,486      81,861    24.0%

 Average number of employees                         4,743       4,707     0.8%



 As at                                          31.12.2021  30.09.2021 Change %
-------------------------------------------------------------------------------
 Total assets (million euros)                      1,585.9     1,616.7    -1.9%

 Total liabilities (million euros)                   893.4       920.8    -3.0%

 Interest-bearing liabilities (million euros)        779.9       802.8    -2.8%

 Net debt¹ (million euros)                           652.4       659.7    -1.1%

 Net debt to EBITDA¹                                  11.2        19.2   -41.7%

 Total equity (million euros)                        692.5       695.9    -0.5%

 Equity ratio¹ (%)                                     44%         43%



 Number of ordinary shares outstanding         743,569,064 743,569,064     0.0%

 Equity per share¹                                    0.93        0.94    -0.5%



 Ratios¹                                           Q4 2021     Q4 2020
-------------------------------------------------------------------------------
 Gross margin (%)                                    12.0%      -23.2%

 EBITDA margin (%)                                   15.1%        1.5%

 EBIT margin (%)                                      0.5%      -30.5%

 Net profit/loss margin (%)                          -2.0%      -33.9%



 ROA (%)                                             -2.4%       -6.1%

 ROE (%)                                             -8.2%      -14.1%

 ROCE (%)                                            -2.8%       -7.2%

(1) Alternative performance measures based on ESMA guidelines are disclosed in
the Alternative Performance Measures section of this Interim Report.
(2) Does not include additions to right-of-use assets.

EBITDA: result from operating activities before net financial items, share of
profit of equity-accounted investees, taxes, depreciation and amortization
EBIT: result from operating activities
Earnings per share: net profit or loss/ weighted average number of shares
outstanding
Equity ratio: total equity / total assets
Shareholder's equity per share: shareholder's equity / number of shares
outstanding
Gross margin: gross profit / net sales
EBITDA margin: EBITDA / net sales
EBIT margin: EBIT / net sales
Net profit margin: net profit or loss / net sales
Capital expenditure: additions to property, plant and equipment - additions to
right-of-use assets + additions to intangible assets
ROA: earnings before net financial items, taxes 12-months trailing / average
total assets
ROE: net profit 12-months trailing / average shareholders' equity
ROCE: earnings before net financial items, taxes 12-months trailing / (total
assets - current liabilities (average for the period))
Net debt: interest-bearing liabilities less cash and cash equivalents
Net debt to EBITDA: net debt / EBITDA 12-months trailing



Consolidated statement of profit or loss and other comprehensive income

                                                               Jan-Dec  Jan-Dec
 Unaudited, in thousands of EUR               Q4 2021 Q4 2020     2021     2020
-------------------------------------------------------------------------------
 Revenue (Note 3)                             166,618  79,295  476,937  442,934

 Cost of sales                               -146,593 -97,658 -455,282 -486,388
-------------------------------------------------------------------------------
 Gross loss/profit                             20,025 -18,363   21,655  -43,454



 Sales and marketing expenses                  -9,008  -7,289  -29,262  -37,817

 Administrative expenses                      -13,460 -13,301  -45,732  -48,391

 Other operating income                         3,334  14,974   16,336   37,339

 Other operating expenses                         -11    -205      -28     -298
-------------------------------------------------------------------------------
 Result from operating activities                 880 -24,184  -37,031  -92,621



 Finance income (Note 4)                          -37       0       34        1

 Finance costs (Note 4)                        -5,867  -4,983  -21,921  -17,843

 Share of profit/loss of equity-accounted
 investees                                        -80    -158      -80     -158

 Loss before income tax                        -5,104 -29,325  -58,998 -110,621



 Income tax                                     1,766   2,474    2,422    2,313



 Net loss for the period                       -3,338 -26,851  -56,576 -108,308

 Net loss for the period attributable to
 equity holders of the Parent                  -3,338 -26,851  -56,576 -108,308



 Other comprehensive income

 Items that may be reclassified to profit or
 loss

 Exchange differences on translating foreign
 operations                                       -13    -320      123     -193
-------------------------------------------------------------------------------
 Other comprehensive income for the period        -13    -320      123     -193



 Total comprehensive loss for the period       -3,351 -27,171  -56,453 -108,501

 Total comprehensive loss for the period
 attributable to equity holders of the
 Parent                                        -3,351 -27,171  -56,453 -108,501



 Loss per share (in EUR, Note 5)               -0.004  -0.040   -0.081   -0.162
-------------------------------------------------------------------------------


Consolidated statement of financial position

 Unaudited, in thousands of EUR                      31.12.2021 31.12.2020
--------------------------------------------------------------------------
 ASSETS

 Cash and cash equivalents                              127,556     27,834

 Trade and other receivables                             29,298     25,463

 Prepayments                                             11,924      7,216

 Inventories                                             34,631     28,707
--------------------------------------------------------------------------
 Current assets                                         203,409     89,220



 Investments in equity-accounted investees                  165        245

 Other financial assets and prepayments                     555      2,233

 Deferred income tax assets                              21,840     20,270

 Investment property                                        300        300

 Property, plant and equipment (Note 6)               1,323,353  1,363,485

 Intangible assets (Note 7)                              36,293     40,448
--------------------------------------------------------------------------
 Non-current assets                                   1,382,506  1,426,981

 TOTAL ASSETS                                         1,585,915  1,516,201



 LIABILITIES AND EQUITY

 Interest-bearing loans and borrowings (Note 8)         244,436    111,601

 Trade and other payables                                91,687     73,477

 Payables to owners                                           6          6

 Income tax liability                                        47         10

 Deferred income                                         21,734     23,253
--------------------------------------------------------------------------
 Current liabilities                                    357,910    208,347



 Interest-bearing loans and borrowings (Note 8)         535,489    593,518

 Non-current liabilities                                535,489    593,518
--------------------------------------------------------------------------
 Total liabilities                                      893,399    801,865



 Share capital (Note 9)                                 349,477    314,844

 Share premium                                              663        663

 Reserves                                                67,930     69,854

 Retained earnings                                      274,446    328,975
--------------------------------------------------------------------------
 Equity attributable to equity holders of the Parent    692,516    714,336

 Total equity                                           692,516    714,336
--------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                         1,585,915  1,516,201



Consolidated statement of cash flows

                                                               Jan-Dec  Jan-Dec
 Unaudited, in thousands of EUR                Q4 2021 Q4 2020    2021     2020
-------------------------------------------------------------------------------


 CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss for the period                        -3,338 -26,851 -56,576 -108,308

 Adjustments                                    29,973  29,188 116,083  117,305

 Changes in:

 Receivables and prepayments related to
 operating activities                            6,446   2,950  -6,925   10,822

 Inventories                                       560   3,799  -6,513    8,548

 Liabilities related to operating activities    -6,045 -21,343  13,447  -35,307
-------------------------------------------------------------------------------
 Changes in assets and liabilities                 961 -14,594       9  -15,937

 Cash generated from operating activities       27,596 -12,257  59,516   -6,940

 Income tax repaid/paid                            -20     -21    -137     -107
-------------------------------------------------------------------------------
 NET CASH FROM OPERATING ACTIVITIES             27,576 -12,278  59,379   -7,047



 CASH FLOWS FROM INVESTING ACTIVITIES

 Purchase of property, plant, equipment and
 intangible assets (Notes 6, 7)                 -9,191 -17,163 -20,192 -100,024

 Proceeds from disposals of property, plant,
 equipment                                          26      37     816      115

 Interest received                                   1       0       3        1
-------------------------------------------------------------------------------
 NET CASH USED IN INVESTING ACTIVITIES          -9,164 -17,126 -19,373  -99,908



 CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from loans received (Note 8)               0  70,000  90,000  125,000

 Repayment of loans received (Note 8)                0       0 -14,667  -14,667

 Change in overdraft (Note 8)                  -25,482 -34,937 -15,556   15,736

 Payment of lease liabilities (Note 8)          -4,159  -3,704 -14,903  -12,565

 Interest paid                                  -4,328  -4,122 -19,296  -16,290

 Payment of transaction costs related to loans       0    -670    -495   -1,302

 Increase of share capital (Note 9)                  0       0  34,633        0

 NET CASH FROM/USED IN FINANCING ACTIVITIES    -33,969  26,567  59,716   95,912



 TOTAL NET CASH FLOW                           -15,557  -2,837  99,722  -11,043
-------------------------------------------------------------------------------


 Cash and cash equivalents at the beginning of
 period                                        143,113  30,671  27,834   38,877

 Change in cash and cash equivalents           -15,557  -2,837  99,722  -11,043
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end of
 period                                        127,556  27,834 127,556   27,834




Joonas Joost
Financial director

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