Börsiteade

Pealkiri

Consolidated interim report for Q1 2010

Teade

Consolidated interim report for Q1 2010

Business results                                                                

Sales level in Q1 2010 was slightly above the management's expectations and the 
overall market situation confirmed the management's forecasts of the business   
recovery. Q1 2010 sales from continuing operations demonstrated a 20.6% increase
as compared to Q4 2009 and 25.8% increase as compared to the respective period  
in 2009.                                                                        

The demand in the Russian market is recovering after the recession. The         
Belarusian market, which was stable during 2009, has not shown signs of weakness
in Q1 2010, demonstrating slight growth. Major markets appear to be on their    
path to recovery. Situation remains difficult in the Baltic states and Ukraine  
where economies suffered most seriously in 2009. Russian rouble strengthened    
against EUR and USD in Q1 2010, contributing to the Group's earnings in EUR     
terms. The management believes that after a significant drop in 2008 the markets
have entered into the stabilization phase and that consumers have adjusted their
purchasing patterns to new market conditions. Based on Q1 2010 sales results and
orders collected for 2010, the management estimates the sales growth of 8-10% in
2010 as compared to 2009.                                                       

In Q1 2010 retail operations in Belarus demonstrated an increase of 32% in local
currency terms and of 18% in EUR terms as compared to Q1 2009. Lauma Lingerie's 
sales in the Baltic countries increased by 65% as compared to Q1 2009.          

At the end of the reporting period the Group and its franchising partners       
operated around 330 Milavitsa and other lingerie outlets, including 52 stores   
operated directly by the Group and the rest by franchising partners. The Group's
retail focus has been shifted towards the promotion and support of franchising  
in cooperation with existing and new partners.                                  

Financial performance                                                           

The Group's sales from continuing operations amounted to EEK 313,980 thousand   
(EUR 20,067 thousand) in Q1 2010, representing a 25.8% increase as compared to  
the respective period in the previous year. Overall wholesale sales from        
continuing operations increased by 41.5%, while retail sales from continuing    
operations presented a decrease of 16.1%. Decrease in retail sales is in line   
with management expectations and is the result of the restructuring decisions   
taken in 2009 when loss-making own retail operations in Russia were gradually   
discontinued. As the results, the proportion of retail sales in total sales     
decreased by 8.9% and came at 17.9% of total sales in Q1 2010.                  

The Group's gross margin from continuing operations in the 3 months' period     
decreased and was 40.9%, as compared to 41.6% in the respective period in the   
previous year. Slight decrease in gross margin is mainly explained by higher    
customs duties on materials imported by the Group from the EU after Belarus     
joining the Customs Union with Russia.                                          

The consolidated operating profit from continuing operations amounted to EEK    
44,515 thousand (EUR 2,845 thousand), compared to operating loss of EEK 1,127   
thousand (EUR 72 thousand) in Q1 2009. The consolidated operating margin from   
continuing operations was 14.2% (-0.5% in Q1 2009). The operating profit and the
operating margin in 2009 were adversely influenced by one-off expenses.         

Consolidated net profit from foreign exchange rate fluctuations amounted to EEK 
20,419 thousand (EUR 1,305 thousand) in Q1 2010. SP ZAO Milavitsa accrued a     
foreign exchange gain in the amount of EEK 6,333 thousand (EUR 405 thousand)    
that was mainly caused by sales denominated in Russian Rouble which appreciated 
against Belarusian Rouble in Q1 2010 by 8.1%. The remaining foreign exchange    
gain mainly related to the intercompany borrowings in EUR and USD.              

Corporate income tax from continuing operations amounted to EEK 17,274 thousand 
(EUR 1,104 thousand) against EEK 20,418 thousand (EUR 1,305 thousand) in Q1 2009
and effective tax rate for the Group improved significantly.                    
Consolidated net profit from continuing operations attributable to equity       
holders amounted to EEK 38,679 thousand (EUR 2,472 thousand) in Q1 2010,        
compared to net loss of EEK 30,354 thousand (EUR 1,940 thousand) in Q1 2009; net
margin from continuing operations attributable to equity holders was 12.3% (up  
from a negative margin of 12.2% in Q1 2009).                                    

In Q1 2010, the Group's return on equity amounted to 7.6% (-6.6% in Q1 2009) and
return on assets was 4.4% (-3.4% in Q1 2009).                                   

Financial position                                                              

As of 31 March 2010 consolidated assets amounted to EEK 908,239 thousand (EUR   
58,047 thousand) representing an increase of 6.8% as compared to the position as
of 31 December 2009.                                                            

Property, plant and intangibles balances decreased by EEK 4,788 thousand        
(EUR 306 thousand) as compared to 31 December 2009 mainly due to depreciation   
and amortisation charge for the period, while total investments in property,    
plant, equipment and intangibles amounted to EEK 3,099 thousand (EUR 198        
thousand).                                                                      

Trade receivables increased by EEK 63,041 thousand (EUR 4,029 thousand) as      
compared to 31 December 2009 and amounted to EEK 194,659 thousand (EUR 12,441   
thousand) as of 31 March 2010. Inventory balance increased by EEK 7,699 thousand
(EUR 492 thousand) and amounted to EEK 273,988 thousand (EUR 17,511 thousand) as
of 31 March 2010. Increase in trade debtors and stock balance was in line with  
the seasonality trend of the business.                                          

Foreign exchange fluctuations left a negative impact on the Group's equity, in  
the form of a negative change in currency translation reserve in the amount of  
EEK 4,490 thousand (EUR 287 thousand) for Q1 2010. On the overall basis, equity 
attributable to equity holders increased by EEK 34,189 thousand (EUR 2,185      
thousand) and amounted to EEK 524,045 thousand (EUR 33,493 thousand) as of 31   
March 2010.                                                                     

Current liabilities increased by EEK 15,507 thousand (EUR 991 thousand) in Q1   
2010, in line with management expectations.                                     

The liquidity position of the Group improved in Q1 2010 with respect to the     
total balance of borrowings and related maturities. Current and non-current     
loans and borrowings decreased by EEK 5,289 thousand (EUR 338 thousand) to EEK  
22,953 thousand (EUR 1,467 thousand) as of 31 March 2010. Loans received and    
loans repaid in Q1 2010 amounted to EEK 3,239 thousand (EUR 207 thousand) and   
EEK 8,606 thousand (EUR 550 thousand) respectively, including finance lease     
liabilities repaid in the amount of EEK 579 thousand (EUR 37 thousand).         
Subsequent to the end of the quarter the Group settled an overdraft facility of 
AS Lauma Lingerie that amounted to EEK 14,473 thousand (EUR 925 thousand) as of 
31 March 2010.                                                                  

In 2009 the Group divested its loss making apparel business line through sale of
shares in its 100% subsidiary PTA Group. At the date of disposal the Group had  
outstanding guarantees issued to Danske Bank A/S Estonian securing certain      
borrowings and guarantee limits of PTA Group. As of 31 March 2010 PTA's balance 
of borrowings and guarantees from Danske Bank A/S Estonian branch that were     
secured by a surety provided by SFG amounted respectively to EEK 20,810 thousand
(EUR 1,330 thousand) and EEK 4,006 thousand (EUR 256 thousand).                 

Tax liabilities and other payables, including payables to employees, amounted to
EEK 88,458 thousand (EUR 5,653 thousand). Provisions amounted to EEK 4,037      
thousand (EUR 258 thousand) as of 31 March 2010 and included provisions for the 
restructuring of Russian retail operations in the amount of EEK 1,752 thousand  
(EUR 112 thousand).                                                             

Sales                                                                           

Sales by business segments                                                      

--------------------------------------------------------------------------------
|       | Q1    | Q1    | Chang | Q1     | Q1     | Change | Q1 2010 | Q1 2009 |
|       | 2010  | 2009  | e EEK | 2010   | 2009   | EUR    | percent | percent |
|       | EEK   | EEK   | thous | EUR    | EUR    | thousa | age     | age     |
|       | thous | thous | and   | thousa | thousa | nd     | from    | from    |
|       | and   | and   |       | nd     | nd     |        | sales   | sales   |
--------------------------------------------------------------------------------
| Whole | 255,7 | 180,7 | 74,96 | 16,345 | 11,554 | 4,791  | 81.5%   | 72.4%   |
| sale  | 44    | 81    | 3     |        |        |        |         |         |
--------------------------------------------------------------------------------
| Retai | 56,21 | 67,01 | -10,7 | 3,593  | 4,283  | -690   | 17.9%   | 26.8%   |
| l     | 8     | 4     | 96    |        |        |        |         |         |
--------------------------------------------------------------------------------
| Other | 2,018 | 1,878 | 140   | 129    | 120    | 9      | 0.6%    | 0.8%    |
| opera |       |       |       |        |        |        |         |         |
| tions |       |       |       |        |        |        |         |         |
--------------------------------------------------------------------------------
| Total | 313,9 | 249,6 | 64,30 | 20,067 | 15,957 | 4,110  | 100.0%  | 100.0%  |
|       | 80    | 73    | 7     |        |        |        |         |         |
--------------------------------------------------------------------------------

Sales by markets                                                                

In Q1 2010, the Group focused mainly on the Baltic, Russian, Belarusian and     
Ukrainian markets.                                                              

Total sales by markets                                                          

--------------------------------------------------------------------------------
|       | Q1    | Q1    | Chang | Q1     | Q1     | Change | Q1 2010 | Q1 2009 |
|       | 2010  | 2009  | e EEK | 2010   | 2009   | EUR    | percent | percent |
|       | EEK   | EEK   | thous | EUR    | EUR    | thousa | age     | age     |
|       | thous | thous | and   | thousa | thousa | nd     | from    | from    |
|       | and   | and   |       | nd     | nd     |        | sales   | sales   |
--------------------------------------------------------------------------------
| Russi | 188,7 | 142,1 | 46,69 | 12,066 | 9,082  | 2,984  | 60.1%   | 56.9%   |
| a     | 92    | 02    | 0     |        |        |        |         |         |
--------------------------------------------------------------------------------
| Belar | 76,40 | 70,72 | 5,679 | 4,883  | 4,520  | 363    | 24.3%   | 28.3%   |
| us    | 2     | 3     |       |        |        |        |         |         |
--------------------------------------------------------------------------------
| Balti | 22,62 | 13,70 | 8,919 | 1,446  | 876    | 570    | 7.2%    | 5.5%    |
| cs    | 5     | 6     |       |        |        |        |         |         |
--------------------------------------------------------------------------------
| Ukrai | 12,97 | 11,34 | 1,627 | 829    | 725    | 104    | 4.1%    | 4.5%    |
| ne    | 1     | 4     |       |        |        |        |         |         |
--------------------------------------------------------------------------------
| Other | 13,19 | 11,79 | 1,392 | 843    | 754    | 89     | 4.3%    | 4.8%    |
| marke | 0     | 8     |       |        |        |        |         |         |
| ts    |       |       |       |        |        |        |         |         |
--------------------------------------------------------------------------------
| Total | 313,9 | 249,6 | 64,30 | 20,067 | 15,957 | 4,110  | 100.0%  | 100.0%  |
|       | 80    | 73    | 7     |        |        |        |         |         |
--------------------------------------------------------------------------------

The majority of lingerie sales revenue in Q1 2010 in the amount of EEK 188,792  
thousand (EUR 12,066 thousand) was generated in the Russian market, accounting  
for 60.1% of all lingerie sales in Q1 2010 as compared to EEK 142,102 thousand  
(EUR 9,082 thousand) in Q1 2009. Sales in Russia comprise both retail sales and 
wholesale. The second largest region for lingerie sales was Belarus, where sales
reached EEK 76,402 thousand (EUR 4,883 thousand), contributing 24.3% of lingerie
sales (both retail and wholesale) as compared to EEK 70,723 thousand (EUR 4,520 
thousand) in Q1 2009.                                                           

Although still affected by the economic situation and the devaluation of the    
local currencies, sales in the major markets demonstrated a positive trend in   
terms of pieces sold in Q1 2010 as compared to the respective period in 2009.   

The most considerable sales growth took place on the Russian market, while      
Belarussian operations were relatively stable showing a slight increase. Overall
sales results in Q1 were slightly above management's expectations after a       
difficult Q4 2009.                                                              

Changes in the sales strategy introduced by Milavitsa in late 2009 were         
implemented in Q1 in Russia and Ukraine. The Group targets to increase control  
over its distribution and its organizational structure has been adjusted        
accordingly.                                                                    

A number of actions have been introduced by Milavitsa to the market including   
additional marketing activities in Belarus and Russia and supportive measures in
the opening of new franchised stores. Joint programs with dealers and           
distributors were introduced in marketing and franchising.                      

Lauma Lingerie experienced a sharp recovery in sales in their major markets     
after being affected by the crisis to a significant extent due to its high      
pricing positioning and inability of its distribution partners to meet current  
market conditions. A new sales and marketing manager with considerable          
experience in the industry has joined the company to meet challenges and        
opportunities of the market.                                                    

In terms of lingerie brands, the sales of “Milavitsa” core brand accounted for  
73.8% of total lingerie sales revenue in Q1 2010 (Q1 2009: 77.7%) and amounted  
to EEK 230,255 thousand (EUR 14,716 thousand). The sales of “Lauma Lingerie”    
core brand accounted for 9.1% of total lingerie sales (Q1 2009: 5.3%) and       
amounted to EEK 28,492 thousand (EUR 1,821 thousand). Other brands such as      
“Alisee”, “Aveline”, “Hidalgo” and “Laumelle” comprised 17.1% of total lingerie 
sales in Q1 2010 (Q1 2009: 17.0%), amounting to EEK 53,215 thousand (EUR 3,401  
thousand).                                                                      

Wholesale                                                                       

In Q1 2010, wholesale revenue amounted to EEK 255,744 thousand (EUR 16,345      
thousand), representing 81.5% of the Group's total revenue (Q1 2009: 72.4%). The
main wholesale regions were Russia, Belarus, Ukraine and the Baltic States. The 
second half of 2009 demonstrated an increase in lingerie wholesale revenue of   
5.6% as compared to the first half of 2009 as many of the Milavitsa's Russian   
and Ukrainian wholesale partners had adjusted their working capital levels to   
the new market and trading circumstances caused by the crisis in 2008-2009.     
Gradual improvements in sales were observed already in Q1 2010 despite the      
expectations of the difficult start of the year.                                
Additional activities were introduced in the non-core markets targeting to      
diversify sales mainly in the western countries. Some markets will be approached
through sales agents, while others will be served by local dealers. The Group   
will also seek private label production opportunities where practical.          

Retail operations                                                               

Total lingerie retail sales of the Group in Q1 2010 amounted to EEK 56,218      
thousand (EUR 3,593 thousand), representing a 16.1% decrease as compared to Q1  
2009.                                                                           

Retail operations were conducted in Belarus, Russia and Latvia. At the end of Q1
2010 the Group operated 52 own retail outlets with a total area of 4,383 square 
meters. Additionally, as of 31 March 2010, there were 271 Milavitsa branded     
shops operated by Milavitsa trading partners in Russia, Belarus, Ukraine,       
Moldavia, Kazakhstan, Uzbekistan, Kirgizstan, Latvia, Azerbaijan, Armenia, and  
Cyprus, of which 24 shops were opened in Q1 2010.                               

In Q1 2010 4 new own lingerie stores were opened, including 1 under Milavitsa   
name in Belarus and 3 stores under Lauma Lingerie brand name in Latvia. Two     
underperforming stores were closed in Russia and 14 stores were transferred to  
Milavitsa's trading partners in the course of the strategy to shift focus from  
own retail chain towards the development of Milavitsa franchise network,        
terminating the loss making own retail operations in Russia. The remaining      
stores will be closed or transferred to Milavitsa's trading partners by the end 
of H1 2010.                                                                     

Number of own stores as at:                                                     

--------------------------------------------------------------------------------
|                          | 31.03.2010              | 31.12.2009              |
--------------------------------------------------------------------------------
| Latvia                   | 8                       | 5                       |
--------------------------------------------------------------------------------
| Belarus                  | 39                      | 38                      |
--------------------------------------------------------------------------------
| Russia                   | 5                       | 21                      |
--------------------------------------------------------------------------------
| Total stores             | 52                      | 64                      |
--------------------------------------------------------------------------------
| Total sales area, sq m   | 4,383                   | 5,523                   |
--------------------------------------------------------------------------------

A number of sales promotions were conducted in the Milavitsa retail chain in    
Belarus. Own retail operations in Belarus remain one of the key priorities for  
the Group's further sales development in the country. Sales per square meter in 
the like-for-like shops have slightly decreased due to a considerable number of 
Milavitsa shops opened in the same cities. At the same time in Q1 2010 overall  
retail operations in the country demonstrated a 32% growth in local currency    
terms and a 18% growth in EUR terms as compared to the same period in 2009.     

In the Baltics, retail sales decreased by 67.1% as compared to Q1 2009 and      
amounted to EEK 2,050 thousand (EUR 131 thousand). Decrease in sales in the     
Baltics is mainly explained by the divestment of Lithuanian retail operations in
November 2009.                                                                  

In respect of lingerie retail in Russia the strategic decision to shift focus   
from own retail chain towards the development of Milavitsa franchise network was
made in H2 2009 to terminate the loss making own retail operations in Russia. As
the result, the Group's own Oblicie stores were rebranded to Milavitsa and a    
transfer of stores to Milavitsa's trading partners commenced while              
non-performing stores are being closed. As of 31 March 2010 the restructuring   
was not yet completed and the Group operated 5 own retail stores in Russia. The 
management anticipates that the transfer of stores will be completed in Q2 2010.
Certain structural and management changes have been made in the Group's Russian 
operations (including the establishment of a separate franchise department) to  
implement the selected franchise development strategy.                          

Own stores by concept                                                           

--------------------------------------------------------------------------------
| Market       | Milavitsa    | Lauma         | Total         | Sales area, sq |
|              | stores       | Lingerie      |               | m              |
|              |              | stores        |               |                |
--------------------------------------------------------------------------------
| Belarus      | 39           | 0             | 39            | 3,485          |
--------------------------------------------------------------------------------
| Russia       | 5            | 0             | 5             | 408            |
--------------------------------------------------------------------------------
| Latvia       | 0            | 8             | 8             | 490            |
--------------------------------------------------------------------------------
| Total        | 44           | 8             | 52            | 4,383          |
--------------------------------------------------------------------------------

Discontinued operations                                                         

Discontinued operations' reported results in Q1 2009 include operations of PTA  
(apparel business line) for Q1 2009. Results of PTA operations are presented in 
the consolidated income statement as a single line item under ‘Loss from        
discontinued operations'.                                                       

Production, sourcing, purchasing and logistics                                  

Due to the increased demand in the market in Q1 2010 the Group's manufacturing  
companies increased their production and purchasing volumes.                    

The total volume of production in SP ZAO Milavitsa amounted to 4,250 thousand   
pieces in Q1 2010, representing a 11% increase as compared to the respective    
period in the previous year. The total production volume in Lauma Lingerie      
amounted to 436 thousand pieces in Q1 2010, showing an increase of 77.4% as     
compared to the respective period in the previous year. The utilization of      
production capacities in SP ZAO Milavitsa in Q1 2010 increased by 4.9% compared 
to Q4 2009 in order to prepare for increased production volumes in 2010.        

In respect of logistics, the implementation of supply chain management system on
IFS software application basis is in process and is planned to be finalised in  
H1 2010.                                                                        

Investment                                                                      

In Q1 2010, the Group's investments totalled EEK 3,099 thousand (EUR 198        
thousand) with investments into retail amounting to EEK 1,314 thousand (EUR 84  
thousand). Other investments were made in equipment and facilities to maintain  
effective production.                                                           

Personnel                                                                       

As of 31 March 2010, the Group employed 3,103 employees including 419 in retail 
and 2,004 in production. The rest were employed in wholesale, administration and
support operations. The average number of employees in Q1 2010 was 3,065.       

Total salaries and wages in Q1 2010 amounted to EEK 74,932 thousand (EUR 4,789  
thousand). The remuneration of the members of the Management Board totalled EEK 
2,691 thousand (EUR 172 thousand). The members of the Management Board also     
serve as executives for the Group's subsidiaries.                               

Key Events in Q1 2010                                                           

Changes in the Supervisory Board structure                                      

The extraordinary general meeting of shareholders of AS Silvano Fashion Group   
was held on 5 March 2010, in Tallinn. The meeting resolved to recall members of 
the Supervisory Board of SFG Mr. Indrek Rahumaa and Mr. Priit Põldoja and to    
elect Mr. Risto Mägi, Mr. Stephan Balkin, Mr. Otto Tamme and Mr. Sven Kunsing to
the Supervisory Board.                                                          

Resignation of a Member of the Supervisory Board                                

On 24 March 2010 a member of the Supervisory Board Mr. Sven Kunsing presented to
SFG an application for his resignation from the position of a supervisory board 
member, and requested that the application would be provided to the next        
ordinary general meeting of SFG.                                                

Selected financial data                                                         

The Group's operating results are summarised in the following figures and       
ratios:                                                                         

--------------------------------------------------------------------------------
| Key figures and ratios             | 31.03.2010  | 31.03.2009  | Change      |
--------------------------------------------------------------------------------
| Net sales from continuing          | 313,980     | 249,673     | 64,307      |
| operations (EEK thousand)          |             |             |             |
--------------------------------------------------------------------------------
| Net profit from continuing         | 38,679      | -30,354     | 69,033      |
| operations, attributable to owners |             |             |             |
| of the Company (EEK thousand)      |             |             |             |
--------------------------------------------------------------------------------
| Earnings before interest, taxes    | 51,508      | 8,309       | 43,199      |
| and depreciation (EBITDA) from     |             |             |             |
| continuing operations (EEK         |             |             |             |
| thousand)                          |             |             |             |
--------------------------------------------------------------------------------
| Earnings before interest and taxes | 44,515      | -1,127      | 45,642      |
| (EBIT) from continuing operations  |             |             |             |
| (EEK thousand)                     |             |             |             |
--------------------------------------------------------------------------------
| Net sales from continuing          | 20,067      | 15,957      | 4,110       |
| operations (EUR thousand)          |             |             |             |
--------------------------------------------------------------------------------
| Net profit from continuing         | 2,472       | -1,940      | 4,412       |
| operations, attributable to owners |             |             |             |
| of the Company (EUR thousand)      |             |             |             |
--------------------------------------------------------------------------------
| Earnings before interest, taxes    | 3,292       | 531         | 2,761       |
| and depreciation (EBITDA) from     |             |             |             |
| continuing operations (EUR         |             |             |             |
| thousand)                          |             |             |             |
--------------------------------------------------------------------------------
| Earnings before interest and taxes | 2,845       | -72         | 2,917       |
| (EBIT) from continuing operations  |             |             |             |
| (EUR thousand)                     |             |             |             |
--------------------------------------------------------------------------------
| Operating margin from continuing   | 14.2%       | -0.5%       | -           |
| operations, %                      |             |             |             |
--------------------------------------------------------------------------------
| Net margin from continuing         | 12.3%       | -12.2%      | -           |
| operations attributable to owners  |             |             |             |
| of the Company, %                  |             |             |             |
--------------------------------------------------------------------------------
| ROA, %                             | 4.4%        | -3.4%       | -           |
--------------------------------------------------------------------------------
| ROE, %                             | 7.6%        | -6.6%       | -           |
--------------------------------------------------------------------------------
| Earnings per share (EPS), in EEK   | 0.98        | -0.98       | -           |
--------------------------------------------------------------------------------
| Earnings per share (EPS), in EUR   | 0.06        | -0.06       | -           |
--------------------------------------------------------------------------------
| Current ratio                      | 2.9         | 2.0         | -           |
--------------------------------------------------------------------------------
| Quick ratio                        | 1.7         | 1.0         | -           |
--------------------------------------------------------------------------------

Consolidated statement of financial position                                    

Unaudited                                                                       

--------------------------------------------------------------------------------
|                | 31.03.2 | 31.12.2 | 31.03.2 | 31.03.2 | 31.12.20 | 31.03.20 |
|                | 010 EEK | 009 EEK | 009 EEK | 010 EUR | 09 EUR   | 09 EUR   |
|                | thousan | thousan | thousan | thousan | thousand | thousand |
|                | d       | d       | d       | d       |          |          |
--------------------------------------------------------------------------------
| ASSETS         |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Non-current    |         |         |         |         |          |          |
| assets         |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Property,      | 163,789 | 168,248 | 246,168 | 10,468  | 10,753   | 15,733   |
| plant and      |         |         |         |         |          |          |
| equipment      |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Intangible     | 8,590   | 8,919   | 11,469  | 549     | 570      | 733      |
| assets         |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Investment     | 20,388  | 20,090  | 21,060  | 1,303   | 1,284    | 1,346    |
| property       |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Investments in | 1,001   | 2,175   | 720     | 64      | 139      | 46       |
| equity         |         |         |         |         |          |          |
| accounted      |         |         |         |         |          |          |
| investees      |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Available-for- | 5,711   | 5,664   | 7,182   | 365     | 362      | 459      |
| sale financial |         |         |         |         |          |          |
| assets         |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Deferred tax   | 20,059  | 18,119  | 0       | 1,282   | 1,158    | 0        |
| asset          |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Other          | 9,967   | 9,920   | 954     | 637     | 634      | 61       |
| receivables    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Total          | 229,505 | 233,135 | 287,553 | 14,668  | 14,900   | 18,378   |
| non-current    |         |         |         |         |          |          |
| assets         |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Current assets |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Inventories    | 273,988 | 266,289 | 393,262 | 17,511  | 17,019   | 25,134   |
--------------------------------------------------------------------------------
| Corporate      | 5,617   | 7,260   | 13,972  | 359     | 464      | 893      |
| income tax     |         |         |         |         |          |          |
| asset          |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Other tax      | 13,174  | 22,875  | 29,447  | 842     | 1,462    | 1,882    |
| receivables    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Trade          | 194,659 | 131,618 | 170,579 | 12,441  | 8,412    | 10,902   |
| receivables    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Other          | 21,593  | 18,260  | 58,581  | 1,380   | 1,167    | 3,744    |
| receivables    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Prepayments    | 10,984  | 9,529   | 37,348  | 702     | 609      | 2,387    |
--------------------------------------------------------------------------------
| Cash and cash  | 157,092 | 153,931 | 72,585  | 10,040  | 9,838    | 4,639    |
| equivalents    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Assets         | 1,627   | 7,526   | 0       | 104     | 481      | 0        |
| classified as  |         |         |         |         |          |          |
| held for sale  |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Total current  | 678,734 | 617,288 | 775,774 | 43,379  | 39,452   | 49,581   |
| assets         |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| TOTAL ASSETS   | 908,239 | 850,423 | 1,063,3 | 58,047  | 54,352   | 67,959   |
|                |         |         | 27      |         |          |          |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| LIABILITIES    |         |         |         |         |          |          |
| AND EQUITY     |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Equity         |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Share capital  | 400,000 | 400,000 | 400,000 | 25,565  | 25,565   | 25,565   |
| at per value   |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Share premium  | 223,293 | 223,293 | 223,293 | 14,271  | 14,271   | 14,271   |
--------------------------------------------------------------------------------
| Own shares     | -7,041  | -7,041  | -7,041  | -450    | -450     | -450     |
--------------------------------------------------------------------------------
| Statutory      | 1,046   | 1,046   | 1,046   | 67      | 67       | 67       |
| capital        |         |         |         |         |          |          |
| reserve        |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Translation    | -191,02 | -186,53 | -138,57 | -12,209 | -11,922  | -8,857   |
| reserve        | 9       | 9       | 5       |         |          |          |
--------------------------------------------------------------------------------
| Retained       | 97,776  | 59,097  | 58,753  | 6,249   | 3,777    | 3,755    |
| earnings       |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Total equity   | 524,045 | 489,856 | 537,476 | 33,493  | 31,308   | 34,351   |
| attributable   |         |         |         |         |          |          |
| to equity      |         |         |         |         |          |          |
| holders of the |         |         |         |         |          |          |
| Company        |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Non-controllin | 145,717 | 136,141 | 122,106 | 9,313   | 8,701    | 7,804    |
| g interest     |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Total equity   | 669,762 | 625,997 | 659,582 | 42,806  | 40,009   | 42,155   |
--------------------------------------------------------------------------------
| Non-current    |         |         |         |         |          |          |
| liabilities    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Loans and      | 4,021   | 4,052   | 13,081  | 257     | 259      | 836      |
| borrowings     |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Deferred tax   | 0       | 0       | 203     | 0       | 0        | 13       |
| liabilities    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Other          | 31      | 1,455   | 4,600   | 2       | 93       | 294      |
| liabilities    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Provisions     | 0       | 0       | 125     | 0       | 0        | 8        |
--------------------------------------------------------------------------------
| Total          | 4,052   | 5,507   | 18,009  | 259     | 352      | 1,151    |
| non-current    |         |         |         |         |          |          |
| liabilities    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Current        |         |         |         |         |          |          |
| liabilities    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Loans and      | 18,932  | 24,190  | 129,585 | 1,210   | 1,546    | 8,282    |
| borrowings     |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Trade payables | 123,030 | 123,999 | 147,423 | 7,863   | 7,925    | 9,422    |
--------------------------------------------------------------------------------
| Corporate      | 14,911  | 3,552   | 7,135   | 953     | 227      | 456      |
| income tax     |         |         |         |         |          |          |
| payable        |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Other tax      | 33,452  | 24,831  | 32,373  | 2,138   | 1,587    | 2,069    |
| payable        |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Other payables | 15,944  | 14,270  | 32,670  | 1,019   | 912      | 2,088    |
--------------------------------------------------------------------------------
| Provisions     | 4,037   | 3,395   | 20,997  | 258     | 217      | 1,342    |
--------------------------------------------------------------------------------
| Accrued        | 23,611  | 24,033  | 15,553  | 1,509   | 1,536    | 994      |
| expenses       |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Deferred       | 509     | 649     | 0       | 32      | 41       | 0        |
| income         |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Total current  | 234,426 | 218,919 | 385,736 | 14,982  | 13,991   | 24,653   |
| liabilities    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| Total          | 238,477 | 224,426 | 403,745 | 15,241  | 14,343   | 25,804   |
| liabilities    |         |         |         |         |          |          |
--------------------------------------------------------------------------------
| TOTAL          | 908,239 | 850,423 | 1,063,3 | 58,047  | 54,352   | 67,959   |
| LIABILITIES    |         |         | 27      |         |          |          |
| AND EQUITY     |         |         |         |         |          |          |
--------------------------------------------------------------------------------


Consolidated income statement                                                   

Unaudited                                                                       

--------------------------------------------------------------------------------
|                         | Q1 2010    | Q1 2009    | Q1 2010    | Q1 2009 EUR |
|                         | EEK        | EEK        | EUR        | thousand    |
|                         | thousand   | thousand   | thousand   |             |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Continuing operations   |            |            |            |             |
--------------------------------------------------------------------------------
| Revenue                 |            |            |            |             |
--------------------------------------------------------------------------------
| Sales revenue           | 313,980    | 249,673    | 20,067     | 15,957      |
--------------------------------------------------------------------------------
| Costs of goods sold     | -185,678   | -145,748   | -11,867    | -9,315      |
--------------------------------------------------------------------------------
| Gross Profit            | 128,302    | 103,925    | 8,200      | 6,642       |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other operating income  | 2,597      | 11,500     | 166        | 735         |
--------------------------------------------------------------------------------
| Distribution costs      | -37,301    | -46,048    | -2,384     | -2,943      |
--------------------------------------------------------------------------------
| Administrative expenses | -35,549    | -43,263    | -2,272     | -2,765      |
--------------------------------------------------------------------------------
| Other operating         | -13,534    | -27,241    | -865       | -1,741      |
| expenses                |            |            |            |             |
--------------------------------------------------------------------------------
| Operating profit / loss | 44,515     | -1,127     | 2,845      | -72         |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance income and      |            |            |            |             |
| finance costs           |            |            |            |             |
--------------------------------------------------------------------------------
| Interest expenses       | -657       | -2,613     | -42        | -167        |
--------------------------------------------------------------------------------
| Gains/losses on         | 20,419     | -829       | 1,305      | -53         |
| conversion of foreign   |            |            |            |             |
| currencies              |            |            |            |             |
--------------------------------------------------------------------------------
| Other financial income  | 2,863      | 892        | 183        | 57          |
| / expenses              |            |            |            |             |
--------------------------------------------------------------------------------
| Net finance income/     | 22,625     | -2,550     | 1,446      | -163        |
| (costs)                 |            |            |            |             |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share of profit of      | -1,205     | -1,831     | -77        | -117        |
| equity accounted        |            |            |            |             |
| investees               |            |            |            |             |
--------------------------------------------------------------------------------
| Profit before tax       | 65,935     | -5,508     | 4,214      | -352        |
--------------------------------------------------------------------------------
| Income tax expense      | -17,274    | -20,418    | -1,104     | -1,305      |
--------------------------------------------------------------------------------
| Profit / (loss) from    | 48,661     | -25,926    | 3,110      | -1,657      |
| continuing operations   |            |            |            |             |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Discontinued operations |            |            |            |             |
--------------------------------------------------------------------------------
| Loss from discontinued  | 0          | -8,606     | 0          | -550        |
| operations (net of      |            |            |            |             |
| income tax)             |            |            |            |             |
--------------------------------------------------------------------------------
| Profit / (loss) for the | 48,661     | -34,532    | 3,110      | -2,207      |
| period                  |            |            |            |             |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to         |            |            |            |             |
--------------------------------------------------------------------------------
| Owners of the Company   | 38,679     | -38,960    | 2,472      | -2,490      |
--------------------------------------------------------------------------------
| Non-controlling         | 9,982      | 4,428      | 638        | 283         |
| interest                |            |            |            |             |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share      |            |            |            |             |
--------------------------------------------------------------------------------
| Basic earnings per      | 0.98       | -0.98      | 0.06       | -0.06       |
| share (EEK/EUR)         |            |            |            |             |
--------------------------------------------------------------------------------
| Diluted earnings per    | 0.98       | -0.98      | 0.06       | -0.06       |
| share (EEK/EUR)         |            |            |            |             |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Continuing operations   |            |            |            |             |
--------------------------------------------------------------------------------
| Basic earnings per      | 0.98       | -0.77      | 0.06       | -0.05       |
| share (EEK/EUR)         |            |            |            |             |
--------------------------------------------------------------------------------
| Diluted earnings per    | 0.98       | -0.77      | 0.06       | -0.05       |
| share (EEK/EUR)         |            |            |            |             |
--------------------------------------------------------------------------------


Consolidated statement of comprehensive income                                  

Unaudited                                                                       

--------------------------------------------------------------------------------
|                         | Q1 2010    | Q1 2009    | Q1 2010    | Q1 2009 EUR |
|                         | EEK        | EEK        | EUR        | thousand    |
|                         | thousand   | thousand   | thousand   |             |
--------------------------------------------------------------------------------
| Profit/ (loss) for the  | 48,661     | -34,532    | 3,110      | -2,207      |
| period                  |            |            |            |             |
--------------------------------------------------------------------------------
| Other comprehensive     |            |            |            |             |
| income                  |            |            |            |             |
--------------------------------------------------------------------------------
| Foreign currency        | -2,831     | -104,898   | -181       | -6,704      |
| translation differences |            |            |            |             |
| for foreign operations  |            |            |            |             |
--------------------------------------------------------------------------------
| Other comprehensive     | -2,831     | -104,898   | -181       | -6,704      |
| income for the period   |            |            |            |             |
--------------------------------------------------------------------------------
| Total comprehensive     | 45,830     | -139,430   | 2,929      | -8,911      |
| income                  |            |            |            |             |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive     | 34,189     | -119,449   | 2,185      | -7,634      |
| income attributable to: |            |            |            |             |
| Owners of the Company   |            |            |            |             |
--------------------------------------------------------------------------------
| Non-controlling         | 11,641     | -19,981    | 744        | -1,277      |
| interest                |            |            |            |             |
--------------------------------------------------------------------------------
| Total comprehensive     | 45,830     | -139,430   | 2,929      | -8,911      |
| income                  |            |            |            |             |
--------------------------------------------------------------------------------


Dmitry Ditchkovsky                                                              
Chairman of the Management Board                                                
17 May 2010