Börsiteade

Pealkiri

BALTIKA'S FINANCIAL RESULTS, 6 MONTHS 2009

Teade

FINANCIAL HIGHLIGHTS                                                            
- Revenue for the first 6 months of 2009 435 million kroons (-21% yoy)          
- Retail sales 401 million kroons (-18% yoy)                                    
- Gross margin 46% (6 months 2008: 57%)                                         
- Operating loss 88.5 million kroons (6 months 2008: operating profit 15.2      
million kroons)                                                                 
- Q2 net loss 34.8 million kroons (Q2 2008: net profit 18.8 million kroons)     
- Net loss for 6 months 97.4 million kroons (6 months 2008: net profit 7.8      
million kroons)                                                                 
- Growth in sales area 18% yoy                                                  

In the first six months of 2009, Baltika focused on adapting to the rapid       
deterioration in its economic environment. Compared with the first half of 2008 
as well as the time when the investment and purchasing decisions for the        
reporting period were made (August-October 2008), all of the Group's retail     
markets had experienced a sharp economic downturn. Moreover, in 41% of the      
Group's retail markets national currencies had been devalued either to a greater
or lesser extent. In a situation where sales were over 20% weaker than a year   
before and around 40% below the target for which inventories had been planned,  
the main priority was to adjust inventories and operating expenses to the new,  
slump-time sales results. If in the first months of the year sales continued    
decreasing, then since March sales efficiency indicators (particularly          
comparable store revenues) have been stabilizing at -25% to -28%. According to  
management's conservative estimates, the second half of the year may still see a
certain slide but these are the assumptions used for setting the Group's        
inventory and operating expense targets. In the first six months, the Group's   
management adopted a number of decisions and initiated a series of activities   
whose preliminary effect is already reflected in the results of the second      
quarter but whose true impact should become visible in the second half of 2009  
and in 2010.                                                                    
                                                                                
Through major discounts and arrangements with suppliers, the Group was able to  
reduce inventories by 62.5 million kroons (4 million euros) compared with the   
beginning of the year; inventories per square metre of the retail system        
decreased by 18%. Although relations with the main suppliers were seriously     
tested by orders and, consequently, inventories that significantly exceeded the 
Group's actual sales needs, the supply chain built up over the years proved its 
resilience in the face of the taxing circumstances. In addition, during the     
reporting period the Group succeeded in reducing trade payables by 13 million   
kroons (0.8 million euros). The 40 million kroons (2.6 million euros) raised by 
the share issue performed in July will largely resolve the difficulties with    
on-time inventory financing that arose in the first half of the year. Purchases 
for the new season have already been made on the basis of conservative sales    
projections.                                                                    

Compared with the first half of 2008, consolidated operating expenses decreased 
by 23.4 million kroons (1.5 million euros) - distribution costs shrank by 18.8  
million kroons (1.2 million euros) and administrative and general expenses by   
4.6 million kroons (0.3 million euros), the respective declines for the second  
quarter being 12.9 million kroons (0.8 million euros) and 3.1 million kroons    
(0.2 million euros). Although in the second quarter, the Group's retail system  
was 18% larger than a year before, the stores' operating expenses per square    
metre and the markets' head office costs were 20% and 14% smaller respectively. 
The decisions made for reducing operating expenses will have their full impact  
in the second half of the year - in annual terms the markets' operating expenses
per square metre and the Group's general management expenses should decrease by 
26% and 15% respectively; altogether the Group's operating expenses are expected
to decline by 80 million kroons (5.1 million euros).                            
It has been decided that at least eight non-profitable stores will be closed in 
the third quarter and one of the Group's four factories will be closed at the   
year-end.                                                                       

In the first six months of the year, the number of staff decreased by 172 - from
1988 to 1816. The most affected by the downsizing were the manufacturing units  
whose staff on 1 July was 126 smaller than at the beginning of the year (a 16%  
cut). The number of head office and retail personnel decreased by 31 (14% down) 
and 15 (1.5%) respectively although the retail space operated by the Group grew 
by 8%.                                                                          
Expenses for the second half of the year may be further influenced by           
non-recurring restructuring costs and unpredictable movements in exchange rates.
In general, the Group's management intends to achieve a positive difference     
between revenue and expenses in its projections for 2010.                       

On the whole, the Group's most challenging season seems to be over. We believe  
that the decisions required for adapting have been made and will be successfully
implemented. In the current period we will again focus on our core activity,    
creating strong apparel collections, enhancing customer service and streamlining
the business processes.                                                         

Baltika Group's second quarter revenue amounted to 214.0 million kroons (13.7   
million euros), a 24.7% decrease yoy. Retail revenue for the second quarter     
shrank by 21.0%. At constant exchange rates retail revenue contracted by 14%.   
The gross margin for the second quarter was 49% against 42.9% for the first     
quarter. In the first half of the year, Baltika opened 19 new stores and closed 
9, the total sales area growing by 18% yoy.                                     

REVENUE                                                                         
Revenue by business segment                                                     
--------------------------------------------------------------------------------
| EEK million    | Q2 2009 | Q2 2008 |     +/- |  6m 2009 |  6m 2008 |     +/- |
--------------------------------------------------------------------------------
| Retail         |   207.5 |   262.7 |  -21.0% |    401.0 |    488.3 |  -17.9% |
--------------------------------------------------------------------------------
| Wholesale      |     6.3 |    21.2 |  -70.1% |     33.6 |     61.3 |  -45.2% |
--------------------------------------------------------------------------------
| Other          |     0.3 |     0.6 |  -47.4% |      0.4 |      1.0 |    -61% |
--------------------------------------------------------------------------------
| Total          |   214.1 |   284.5 |  -24.7% |    435.0 |    550.6 |  -21.0% |
--------------------------------------------------------------------------------

EUR 1 = EEK 15.6466                                                             

RETAIL                                                                          
As a result of the overall economic recession and a decline in consumer         
spending, Baltika's half-year retail revenue from the Baltic region and Eastern 
Europe decreased by 19% and 18% yoy respectively. Western European retail sales 
grew by 1% yoy. Comparable store revenue for the first six months shrank by 23% 
yoy. Comparable store revenues in local currencies grew by 2% in Russia and 12% 
in Ukraine.                                                                     

Retail sales by market                                                          
--------------------------------------------------------------------------------
| EEK million        |    6m 2009 |    6m 2008 |       +/- |    Percentage, 6m |
|                    |            |            |           |              2009 |
--------------------------------------------------------------------------------
| Lithuania          |       95.7 |      110.6 |      -13% |               24% |
--------------------------------------------------------------------------------
| Estonia            |       90.4 |      114.0 |      -21% |               22% |
--------------------------------------------------------------------------------
| Russia             |       75.3 |       88.0 |      -14% |               19% |
--------------------------------------------------------------------------------
| Ukraine            |       63.0 |       81.4 |      -23% |               16% |
--------------------------------------------------------------------------------
| Latvia             |       53.3 |       71.2 |      -25% |               13% |
--------------------------------------------------------------------------------
| Poland             |       15.5 |       16.4 |       -5% |                4% |
--------------------------------------------------------------------------------
| Czech Republic     |        7.8 |        6.7 |       16% |                2% |
--------------------------------------------------------------------------------
| Total              |      401.0 |      488.3 |      -18% |              100% |
--------------------------------------------------------------------------------

EUR 1 = EEK 15.6466                                                             

In terms of brands, Monton accounted for 54% or 215 million kroons (13.7 million
euros) of the Group's six-month retail revenue, a 20% decrease yoy, and Mosaic  
contributed 35% or 139 million kroons (8.9 million euros), a 16% decline yoy.   
The hardest-hit by the economic crisis and the general deterioration in the     
retail sector was Baltman, whose six-month sales dropped by 29% to 27 million   
kroons (1.7 million kroons). The only brand that posted growth in the first     
half-year was Ivo Nikkolo (up 23%) whose sales rose to 19 million kroons (1.2   
million euros).                                                                 

STORES AND SALES AREA                                                           
At the end of June 2009, Baltika Group had 144 stores with a total sales area of
29,041 square metres. Compared with June 2008, the retail system grew by 18     
stores and over four thousand square metres; as a result the sales area operated
by the Group increased by 18% yoy.                                              

Stores by market                                                                
--------------------------------------------------------------------------------
|                                |         30 June 2009 |         30 June 2008 |
--------------------------------------------------------------------------------
| Lithuania                      |                   35 |                   29 |
--------------------------------------------------------------------------------
| Estonia                        |                   33 |                   30 |
--------------------------------------------------------------------------------
| Russia                         |                   30 |                   22 |
--------------------------------------------------------------------------------
| Ukraine                        |                   22 |                   22 |
--------------------------------------------------------------------------------
| Latvia                         |                   16 |                   16 |
--------------------------------------------------------------------------------
| Poland                         |                    6 |                    5 |
--------------------------------------------------------------------------------
| Czech Republic                 |                    2 |                    2 |
--------------------------------------------------------------------------------
| Total stores                   |                  144 |                  126 |
--------------------------------------------------------------------------------
| Total sales area, sq m         |               29,041 |               24,661 |
--------------------------------------------------------------------------------

In the first half-year, Baltika opened 19 stores including seven taken over from
a Russian wholesale partner and closed nine. According to plan, in the second   
half-year five stores will be opened. Concurrently with store openings, up to   
ten loss-generating stores will be closed.                                      

In line with an agreement, in the second quarter Baltika took over the operation
of seven stores belonging to its Russian wholesale partner in the Ural region.  
The stores are located in Jekaterinburg, Ufa, Perm and Tjumen. The takeover is  
aligned with the Group's strategic decisions to mitigate the risks arising from 
reliance on the wholesale partner and to expand retail operations to the        
Siberia-Ural region in Russia.                                                  

WHOLESALE                                                                       
Wholesale revenues for the first six months of 2009 totalled 33.6 million kroons
(2.1 million euros), a 45% decrease yoy. The downturn results largely from the  
takeover of stores from the Russian wholesale partner as a result of which      
associated wholesale revenue was reclassified to retail revenue. Cooperation    
with one of the leading European department store chains Peek&Cloppenburg is    
continuing successfully - the Mosaic collection is being sold in 18 department  
stores across Germany, Austria and Poland. Orders for the second half-year are  
almost twice as large as in the first half-year.                                

EARNINGS AND MARGINS                                                            
The Group's performance in 2009 has been strongly influenced by the economic    
recession that has reduced sales and profit margins and triggered currency      
devaluations. The first quarter is typically characterized by the end-of-season 
discounts offered in January and February. Due to a deep sales slump and higher 
than anticipated inventory levels, the discounts provided in the first quarter  
of 2009 were larger than usual and extended over a longer period. The trend     
continued through the second quarter. Although inventory levels were already    
considerably lower, the unfavourable retail environment did not allow disposing 
of goods at expected margins. This had a marked impact on profitability - the   
Group's second quarter gross margin dropped to 49% (Q2 2008: 60.7%) and gross   
profit decreased by 39.3% yoy to 104.9 million kroons (6.7 million euros).      

Another reason for more aggressive discounting was the need to generate         
liquidity for purchasing merchandise for the new season. In addition, the       
Group's margins were adversely impacted by the devaluation of currencies that   
began in November 2008. According to the exchange rates quoted by the Bank of   
Estonia, compared with a year ago the average exchange rates for the first      
half-year weakened as follows: the Ukrainian hryvna 29%, the Polish zloty 21.5%,
the Russian rouble 16.8% and the Czech koruna 7.1%.                             

In the first half-year Baltika focused on reducing its inventories and operating
expenses and adjusting them to the lower revenue levels. This involved executing
a programme for cutting the Group's operating and management expenses and       
streamlining the business processes. The savings and rightsizing measures       
implemented in the first half-year will yield benefits mainly in the second     
half-year.                                                                      

An important step in cutting the costs of the retail system is the reduction of 
store operating expenses including rental charges. In this area, some success   
has already been achieved - compared with the first six months of 2008 the      
average store operating expenses per square metre have decreased by 17% - rental
costs have dropped by 16% and personnel expenses by 22%. The Group is continuing
negotiations with shopping centres regarding lease terms and is closing any     
inefficient retail outlets.                                                     

Thanks to cost-cutting, administrative and general expenses for the first six   
months decreased by 17.5% yoy and distribution costs declined despite a 6.7%    
increase in sales area. The personnel expenses of Baltika's Estonian            
manufacturing units contracted by 25% or 12 million kroons (0.8 million euros)  
yoy.                                                                            

Baltika ended the second quarter of 2009 with an operating loss of 33.4 million 
kroons (2.1 million euros), a 21.7 million-kroon (1.39 million-euro) improvement
on the first quarter. The second quarter of 2008 ended in an operating profit of
22.5 million kroons (1.4 million euros). In the first quarter of 2008, the Group
benefited from investment property revaluation gains of 11.25 million kroons    
(0.7 million euros) that were recognised as other operating income. In 2009,    
there has been no similar income.                                               

Financial expenses for the first half-year grew by 31.4% to 8.9 million kroons  
(0.6 million euros), mainly on account of 55.1% growth in foreign exchange      
losses. The growth in borrowings expanded interest expenses by 15% to 5.9       
million kroons (0.4 million euros) yoy.                                         

The Group ended the first six months of 2009 with a consolidated net loss (after
tax and minority interest) of 97.4 million kroons (6.2 million euros). For      
comparison, the first half of 2008 ended in a net profit of 7.8 million kroons  
(0.5 million euros). Consolidated net loss for the second quarter amounted to   
34.8 million kroons (2.2 million euros), a 27.8 million-kroon (1.8 million-euro)
decrease compared with the first quarter.                                       

BALANCE SHEET                                                                   
At 30 June 2009, Baltika's consolidated assets totalled 752 million kroons (48.1
million euros), 29.4 million kroons (1.9 million euros) down from the previous  
year-end.                                                                       

Compared with the end of 2008, the Group's trade and other receivables decreased
by 29.6 million kroons (1.9 million euros), amounting to 68.8 million kroons    
(4.4 million euros) as at the reporting date. Within the same period, trade and 
other payables decreased by 17.5 million kroons (1.2 million euros) to 190.4    
million kroons (12.1 million euros). At the end of June, inventories totalled   
226 million kroons (14.4 million euros), 22% down from the end of 2008 despite  
the period's 7% increase in retail space.                                       

At the end of the first half-year, the Group's borrowings totalled 364.3 million
kroons (23.3 million euros), comprising of bank loans of 355.7 million kroons   
(22.8 million euros) and finance lease liabilities of 8.6 million kroons (0.6   
million euros). Compared with the end of 2008, the debt burden has expanded by  
92 million kroons (5.9 million euros), 73.3 million kroons (4.7 million euros)  
of which represents an addition to existing construction loans. The growth in   
the Group's debt burden is largely attributable to the construction of a new    
office and business building, which was financed solely with bank loans. At the 
end of June, borrowings related to the construction of the office building      
amounted to 142.5 million kroons (9.1 million euros). At the end of June, the   
building was completed and the Group's head office moved to the new premises.   

Construction loans have increased the Group's net debt (interest-bearing        
liabilities less cash and bank balances) to equity ratio, which at the end of   
June 2009 stood at 183.8%. At the end of 2008 the corresponding figure was      
88.2%.                                                                          

INVESTMENT                                                                      
In the first six months of 2009, the Group's investments totalled 86.4 million  
kroons / 5.5 million euros (6m 2008: 56.3 million kroons /3.6 million euros).   
Investments in the new office and business building totalled 73.3 million kroons
(4.7 million euros), investments in the retail system amounted to 11.6 million  
kroons (0.7 million euros) and other investments totalled 1.5 million kroons    
(0.1 million euros).                                                            

PEOPLE                                                                          
At the end of June 2009, Baltika Group employed 1,816 (30 June 2008: 1,938)     
people, including 979 (954) in the retail system, 645 (766) in manufacturing and
192 (218) at the head office. The number of staff employed outside Estonia      
totalled 768 (755), i.e., 42% of all personnel. The period's average number of  
staff was 1,873 (6m 2008: 1,944).                                               

The Group's employee remuneration expenses for the first half of 2009 totalled  
104.2 million kroons / 6.7 million euros (6m 2008: 115.2 million kroons / 7.4   
million euros). The figure includes the remuneration of the members of the      
supervisory council and management board of 1.0 million kroons / 122 thousand   
euros (6m 2008: 2.0 million kroons / 126 thousand euros).                       

ANNUAL GENERAL MEETING                                                          
The annual general meeting that convened on 18 June 2009 approved the company's 
annual report and the board's profit allocation recommendation for 2008. The    
general meeting resolved that the net loss for the year ended 31 December 2008  
of 18,947 thousand kroons (1,210 thousand euros) should be charged to retained  
earnings.                                                                       

The annual general meeting appointed AS PricewaterhouseCoopers as the auditor of
the company's annual financial statements for 2009 and Lauri Kustaa Äima as a   
member of the management board.                                                 

In addition, the annual general meeting decided to increase the company's share 
capital by 4 million preference shares. Share capital was increased by arranging
a direct placement to professional investors. The subscription price was 10     
kroons (0.64 euros) per share and the total issue size was 40 million kroons    
(2.6 million euros).                                                            

The general meeting decided that 1,850,000 convertible bonds with a par value of
0.1 kroons (0.0064 euros) should be issued within the framework of the Group's  
management incentive program. Each bond entitles the holder to subscribe for one
share in the company. The shares may be subscribed for from 1 July to 31        
December 2012 and the issue price of a share is 12 kroons (0.77 euros).         

The general meeting also amended the company's Articles of Association to       
reflect changes in legislation and motions passed.                              

KEY FIGURES OF THE GROUP (6 months 2009)                                        
--------------------------------------------------------------------------------
|                                    |  30.06.2009 |  30.06.2008 |         +/- |
--------------------------------------------------------------------------------
| Revenue (EEK million)              |       435,0 |       550,6 |      -21,0% |
--------------------------------------------------------------------------------
| Retail sales (EEK million)         |       401,0 |       488,3 |      -17,9% |
--------------------------------------------------------------------------------
| Share of retail sales in revenue   |         92% |         89% |             |
--------------------------------------------------------------------------------
| Number of stores                   |         144 |         126 |       14,3% |
--------------------------------------------------------------------------------
| Sales area (sqm)                   |      29 041 |      24 661 |       17,8% |
--------------------------------------------------------------------------------
| Number of employees (end of        |       1 816 |       1 938 |       -6,3% |
| period)                            |             |             |             |
--------------------------------------------------------------------------------
| Gross margin                       |       46,0% |       56,5% |             |
--------------------------------------------------------------------------------
| Operating margin                   |      -20,3% |        2,8% |             |
--------------------------------------------------------------------------------
| EBT margin                         |      -22,4% |        1,5% |             |
--------------------------------------------------------------------------------
| Net margin                         |      -22,4% |        1,4% |             |
--------------------------------------------------------------------------------
| Current ratio                      |         0,9 |         1,6 |      -43,8% |
--------------------------------------------------------------------------------
| Inventory turnover                 |        3,95 |        5,04 |      -21,6% |
--------------------------------------------------------------------------------
| Debt to equity ratio               |      186,6% |       61,8% |             |
--------------------------------------------------------------------------------
| Return on equity                   |      -54,7% |        5,7% |             |
--------------------------------------------------------------------------------
| Return on assets                   |      -20,1% |        2,8% |             |
--------------------------------------------------------------------------------

EUR 1 = EEK 15.6466                                                             

Underlying formulas                                                             
Gross margin = (Revenue - Cost of sales)/ Revenue                               
Operating margin = Operating profit / Revenue                                   
EBT margin = Profit before income tax / Revenue                                 
Net margin = Net profit (attributable to the parent) / Revenue                  
Current ratio = Current assets / Current liabilities                            
Inventory turnover = Revenue / Average inventories*                             
Debt to equity ratio = Interest-bearing liabilities / Equity                    
Return on equity = Net profit (attributable to the parent)/ Average equity*     
Return on assets = Net profit (attributable to the parent)/ Average total       
assets*                                                                         
*12 months' average                                                             


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                                  
(unaudited, in EEK thousand)                                                    
--------------------------------------------------------------------------------
|                                 |  Q2 2009 |  Q2 2008 |  6m 2009 |   6m 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue                         |  214 032 |  284 520 |  435 049 |   550 575 |
--------------------------------------------------------------------------------
| Cost of goods sold              | -109 153 | -111 687 | -235 244 |  -239 317 |
--------------------------------------------------------------------------------
| Gross profit                    |  104 879 |  172 833 |  199 805 |   311 258 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution costs              | -128 353 | -141 260 | -259 735 |  -278 576 |
--------------------------------------------------------------------------------
| Administrative and general      |  -10 227 |  -13 285 |  -21 561 |   -26 147 |
| expenses                        |          |          |          |           |
--------------------------------------------------------------------------------
| Other operating income          |       24 |    4 988 |       35 |    12 229 |
--------------------------------------------------------------------------------
| Other operating expenses        |      267 |     -780 |   -7 052 |    -3 541 |
--------------------------------------------------------------------------------
| Operating profit (loss)         |  -33 410 |   22 496 |  -88 508 |    15 223 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income (expenses)     |   -1 569 |   -2 970 |   -8 862 |    -6 748 |
--------------------------------------------------------------------------------
| Interest expenses, net          |   -2 726 |   -2 616 |   -5 848 |    -5 089 |
--------------------------------------------------------------------------------
| Foreign exchange losses, net    |    1 157 |     -328 |   -3 009 |    -1 940 |
--------------------------------------------------------------------------------
| Other financial income          |        0 |      -26 |       -5 |       281 |
| (expenses), net                 |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit (loss) before income tax |  -34 979 |   19 526 |  -97 370 |     8 475 |
--------------------------------------------------------------------------------
| Income tax                      |      -81 |     -655 |     -232 |    -1 098 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit (loss)               |  -35 060 |   18 871 |  -97 602 |     7 377 |
--------------------------------------------------------------------------------
| Net profit (loss) attributable  |  -34 821 |   18 834 |  -97 384 |     7 811 |
| to equity holders of the parent |          |          |          |           |
| company                         |          |          |          |           |
--------------------------------------------------------------------------------
| Net profit (loss) attributable  |          |          |          |           |
| to minority shareholders        |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income      |          |          |          |           |
--------------------------------------------------------------------------------
| Currency translation            |    1 150 |   -1 490 |   -5 995 |     1 126 |
| differences                     |          |          |          |           |
--------------------------------------------------------------------------------
| Total comprehensive  income     |  -33 910 |   17 381 | -103 597 |     8 503 |
--------------------------------------------------------------------------------
| Comprehensive  income           |  -33 670 |   17 083 | -102 167 |     8 979 |
| attributable to equity holders  |          |          |          |           |
| of the parent company           |          |          |          |           |
--------------------------------------------------------------------------------
| Comprehensive  income           |     -240 |      298 |   -1 430 |      -476 |
| attributable to minority        |          |          |          |           |
| shareholders                    |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic earnings (loss) per       |    -1,87 |     1,01 |    -5,22 |      0,42 |
| share, EEK                      |          |          |          |           |
--------------------------------------------------------------------------------
| Diluted earnings (loss) per     |    -1,87 |     1,01 |    -5,22 |      0,42 |
| share, EEK                      |          |          |          |           |
--------------------------------------------------------------------------------


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                                  
(unaudited, in EUR thousand)                                                    
--------------------------------------------------------------------------------
|                                 |  Q2 2009 |  Q2 2008 |  6m 2009 |   6m 2008 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue                         |   13 679 |   18 184 |   27 805 |    35 188 |
--------------------------------------------------------------------------------
| Cost of goods sold              |   -6 976 |   -7 138 |  -15 035 |   -15 295 |
--------------------------------------------------------------------------------
| Gross profit                    |    6 703 |   11 046 |   12 770 |    19 893 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution costs              |   -8 203 |   -9 028 |  -16 600 |   -17 804 |
--------------------------------------------------------------------------------
| Administrative and general      |     -654 |     -849 |   -1 378 |    -1 671 |
| expenses                        |          |          |          |           |
--------------------------------------------------------------------------------
| Other operating income          |        2 |      319 |        2 |       782 |
--------------------------------------------------------------------------------
| Other operating expenses        |       17 |      -50 |     -451 |      -226 |
--------------------------------------------------------------------------------
| Operating profit (loss)         |   -2 135 |    1 438 |   -5 657 |       973 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income (expenses)     |     -100 |     -190 |     -566 |      -431 |
--------------------------------------------------------------------------------
| Interest expenses, net          |     -174 |     -167 |     -374 |      -325 |
--------------------------------------------------------------------------------
| Foreign exchange losses, net    |       74 |      -21 |     -192 |      -124 |
--------------------------------------------------------------------------------
| Other financial income          |        0 |       -2 |        0 |        18 |
| (expenses), net                 |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit (loss) before income tax |   -2 236 |    1 248 |   -6 223 |       542 |
--------------------------------------------------------------------------------
| Income tax                      |       -5 |      -42 |      -15 |       -70 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit (loss)               |   -2 241 |    1 206 |   -6 238 |       471 |
--------------------------------------------------------------------------------
| Net profit (loss) attributable  |   -2 225 |    1 204 |   -6 224 |       499 |
| to equity holders of the parent |          |          |          |           |
| company                         |          |          |          |           |
--------------------------------------------------------------------------------
| Net profit (loss) attributable  |      -15 |        2 |      -14 |       -28 |
| to minority shareholders        |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income      |          |          |          |           |
--------------------------------------------------------------------------------
| Currency translation            |       73 |      -95 |     -383 |        72 |
| differences                     |          |          |          |           |
--------------------------------------------------------------------------------
| Total comprehensive  income     |   -2 167 |    1 111 |   -6 621 |       543 |
--------------------------------------------------------------------------------
| Comprehensive  income           |   -2 152 |    1 092 |   -6 530 |       574 |
| attributable to equity holders  |          |          |          |           |
| of the parent company           |          |          |          |           |
--------------------------------------------------------------------------------
| Comprehensive  income           |      -15 |       19 |      -91 |       -30 |
| attributable to minority        |          |          |          |           |
| shareholders                    |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic earnings (loss) per       |    -0,12 |     0,06 |    -0,32 |      0,03 |
| share, EUR                      |          |          |          |           |
--------------------------------------------------------------------------------
| Diluted earnings (loss) per     |    -0,12 |     0,06 |    -0,32 |      0,03 |
| share, EUR                      |          |          |          |           |
--------------------------------------------------------------------------------


CONSOLIDATED STATEMENT OF FINANCIAL POSITION                                    
(unaudited, in EEK thousand)                                                    
--------------------------------------------------------------------------------
|                                             |    30.06.2009 |     31.12.2008 |
--------------------------------------------------------------------------------
| ASSETS                                      |               |                |
--------------------------------------------------------------------------------
| Current assets                              |               |                |
--------------------------------------------------------------------------------
| Cash and bank                               |         5 501 |          8 671 |
--------------------------------------------------------------------------------
| Trade and other receivables                 |        68 764 |         98 369 |
--------------------------------------------------------------------------------
| Inventories                                 |       225 924 |        288 431 |
--------------------------------------------------------------------------------
| Total current assets                        |       300 189 |        395 471 |
--------------------------------------------------------------------------------
| Non-current assets                          |               |                |
--------------------------------------------------------------------------------
| Deferred income tax asset                   |         5 547 |          5 547 |
--------------------------------------------------------------------------------
| Other non-current assets                    |         8 397 |          6 103 |
--------------------------------------------------------------------------------
| Investment property                         |       207 391 |        134 098 |
--------------------------------------------------------------------------------
| Property, plant and equipment               |       168 535 |        180 580 |
--------------------------------------------------------------------------------
| Intangible assets                           |        62 205 |         59 604 |
--------------------------------------------------------------------------------
| Total non-current assets                    |       452 075 |        385 932 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                                |       752 264 |        781 403 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES                      |               |                |
--------------------------------------------------------------------------------
| Current liabilities                         |               |                |
--------------------------------------------------------------------------------
| Borrowings                                  |       153 641 |        103 967 |
--------------------------------------------------------------------------------
| Trade and other payables                    |       190 420 |        207 946 |
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| Total current liabilities                   |       344 061 |        311 913 |
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| Non-current liabilities                     |               |                |
--------------------------------------------------------------------------------
| Borrowings                                  |       210 674 |        168 388 |
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| Other liabilities                           |            26 |              0 |
--------------------------------------------------------------------------------
| Deferred income tax liability               |         2 196 |          2 196 |
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| Total non-current liabilities               |       212 896 |        170 584 |
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| TOTAL LIABILITIES                           |       556 957 |        482 497 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY                                      |               |                |
--------------------------------------------------------------------------------
| Share capital at par value                  |       186 449 |        186 449 |
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| Reserves                                    |        26 133 |         26 133 |
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| Retained earnings                           |        89 775 |        108 722 |
--------------------------------------------------------------------------------
| Net profit (loss) for the period            |       -97 384 |        -18 947 |
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| Currency translation differences            |       -11 948 |         -7 165 |
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| Total equity attributable to equity holders |       193 025 |        295 192 |
| of the parent company                       |               |                |
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| Minority interest                           |         2 282 |          3 714 |
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| TOTAL EQUITY                                |       195 307 |        298 906 |
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| TOTAL LIABILITIES AND EQUITY                |       752 264 |        781 403 |
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION                                    
(unaudited, in EUR thousand)                                                    
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|                                             |    30.06.2009 |     31.12.2008 |
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| ASSETS                                      |               |                |
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| Current assets                              |               |                |
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| Cash and bank                               |           352 |            554 |
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| Trade and other receivables                 |         4 395 |          6 287 |
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| Inventories                                 |        14 439 |         18 434 |
--------------------------------------------------------------------------------
| Total current assets                        |        19 186 |         25 275 |
--------------------------------------------------------------------------------
| Non-current assets                          |               |                |
--------------------------------------------------------------------------------
| Deferred income tax asset                   |           355 |            355 |
--------------------------------------------------------------------------------
| Other non-current assets                    |           537 |            390 |
--------------------------------------------------------------------------------
| Investment property                         |        13 255 |          8 570 |
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| Property, plant and equipment               |        10 771 |         11 541 |
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| Intangible assets                           |         3 976 |          3 809 |
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| Total non-current assets                    |        28 893 |         24 666 |
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| TOTAL ASSETS                                |        48 078 |         49 941 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES                      |               |                |
--------------------------------------------------------------------------------
| Current liabilities                         |               |                |
--------------------------------------------------------------------------------
| Borrowings                                  |         9 819 |          6 645 |
--------------------------------------------------------------------------------
| Trade and other payables                    |        12 170 |         13 290 |
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| Total current liabilities                   |        21 990 |         19 935 |
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| Non-current liabilities                     |               |                |
--------------------------------------------------------------------------------
| Borrowings                                  |        13 465 |         10 762 |
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| Other liabilities                           |             2 |              0 |
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| Deferred income tax liability               |           140 |            140 |
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| Total non-current liabilities               |        13 607 |         10 902 |
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| TOTAL LIABILITIES                           |        35 596 |         30 837 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY                                      |               |                |
--------------------------------------------------------------------------------
| Share capital at par value                  |        11 916 |         11 916 |
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| Reserves                                    |         1 670 |          1 670 |
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| Retained earnings                           |         5 738 |          6 949 |
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| Net profit (loss) for the period            |        -6 224 |         -1 211 |
--------------------------------------------------------------------------------
| Currency translation differences            |          -764 |           -458 |
--------------------------------------------------------------------------------
| Total equity attributable to equity holders |        12 337 |         18 866 |
| of the parent company                       |               |                |
--------------------------------------------------------------------------------
| Minority interest                           |           146 |            237 |
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| TOTAL EQUITY                                |        12 482 |         19 104 |
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| TOTAL LIABILITIES AND EQUITY                |        48 078 |         49 941 |
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Ülle Järv                                                                       
CFO, Member of the Management Board                                             
+372 630 2731