Börsiteade

Pealkiri

AS Ekspress Grupp: Consolidated Interim Report for the Second Quarter and First Half-Year of 2018

Teade

While  the  first  quarter  passed  in  celebration  of the 100th anniversary of
Estonia  and Lithuania,  one of  the key  topics in  the second  quarter was the
reorganisation  of the joint venture Ajakirjade Kirjastus is Estonia. On 1 June,
one  part of  Estonia's largest  magazine publisher  was merged with the Group's
subsidiary  Ekspress Meedia and the other part was merged with the joint venture
SLÕhtuleht which bears the name Õhtuleht Kirjastus after the merger.

The  key objective  of the  change was  to find  a better  online output for the
content  of the printed  publications of Ajakirjade  Kirjastus and to foster the
publications' cooperation with the existing strong web platforms. In 2018, it is
not  reasonable to start setting  up a large new  web-centre, but to offer high-
quality  content to the readers in cooperation with the existing platforms, i.e.
 Delfi  and  Õhtuleht.  Due  to  a  thorough planning process, the transfers and
changes  were completed  without any  major incidents.  The accompanying one-off
expenses  related to these changes amounted to  ca EUR 200 thousand. We are able
to  state  today  that  the  content  created  by  the  companies  of the former
Ajakirjade  Kirjastus  has  received  greater  visibility and readability due to
large web portals.

After  very large-scale  events in  Lithuania in  the first  quarter such as the
conference  "The Idea for Lithuania"  and "The Day of  Best Classes" targeted at
school  children,  slightly  more  modest  but  not  less exciting projects were
implemented in all countries in the second quarter. Ekspress Meedia organised an
exclusive  rally day with Ott Tänak on Tallinn Song Festival Ground, there was a
concert  given by Stig  Rästa who performed  the hits of  Paul McCartney and the
Beatles.  Ajakirjade Kirjastus  organised another  Estonian Entertainment Awards
event. As a media partner, Delfi Latvia contributed to several local conferences
and  festivals. The debate festival called  Lampa is worth mentioning separately
where   one  of  the  key  speakers  was  President  Toomas  Hendrik  Ilves.  In
collaboration  with  the  Business  Management  Institute (BMI), Delfi Lithuania
launched  a new  educational programme  "Innovation and  Digital Transformation"
where  one of the lecturers will also be  the head of Delfi Lithuania. The joint
project  of Delfi Lithuania  and Google DNI  to fight fake  news is successfully
promoted  at an international level. Delfi  Lithuania was the main communication
partner at the largest innovation conference in the Baltic States - Login.

The  arrangement of events and activities under our different brands is becoming
an  increasingly important activity throughout the  entire group. This will lead
to  the  addition  of  a  new  revenue  type  and  create an opportunity to grow
advertising revenues which differ from the traditional approach.

Besides  all  of  the  above,  we  will  continue  producing strong journalistic
content,  and create the best and most reliable content for our readers. This is
evidenced  by the record number of  journalism prizes awarded to our journalists
by  the Estonian  Newspaper Association  in the  first quarter. We also received
several  awards  for  our  journalistic  activities  in Latvia. We are trying to
involve  more young people in our activities.  Eesti Ekspress has a summer youth
campaign  for the first time, the main  objective of which is to encourage young
people to make video and picture content, and introduce the Eesti Ekspress brand
to them.

We continue to invest in people and software solutions to enable new products to
enter  the  market  and  to  further  develop,  enhance  and upgrade our digital
platforms  and online  products. We  are looking  for synergies  between printed
products  and online  output. We  are launching  new verticals  and shut down or
reorganise the current ones.

We  are also expanding the direction of  the outdoor advertising. In addition to
the  company acquired  in Tartu  in January,  we are  also expanding our network
organically  in Estonia and  Latvia. The media  buyer is beginning to understand
the  advantages of  digital outdoor  advertising; therefore  the growth  in this
market as a whole is picking up.

The  acquisition of a  majority holding in  Adnet, a provider  of an advertising
network  and target  group-based advertising  sales solutions  last November has
together with Delfi companies significantly increased the Group's online revenue
and  its share in  total revenue. The  share of the  Group's digital revenue has
increased  to  37% of  total  revenue  by  the  end of June. Delfi Lithuania has
demonstrated  especially  strong  growth.  In  Latvia,  due to the local banking
crisis  and  a  change  in  the  pricing  policy  of a major media monopoly, the
advertising  market  is  still  stagnant.  However,  there  is  some  pick-up in
activities  over the last month and  an innovative approach to advertising sales
has been successful.

The  most complicated situation is  at the Group's printing  house that is under
strong  price pressures due to falling circulations. Our strength remains a very
good  service  and  quality  of  work  which  has made it possible to expand our
service to the rest of Europe, but which will take longer than expected to grow.
Paper  shortages  and  a  price  increase  have  also had a negative impact. The
decline  in circulation and higher labour costs are also significantly affecting
the results of our home delivery company.

The Group's revenue for the first half-year increased by 9% and totalled EUR 34
million. However, EBITDA decreased and amounted to EUR 2.3 million which is one-
third  less than in the same period last  year. The main reason for the decrease
in  EBITDA is the lower-than-expected result of printing services, the difficult
situation of the home delivery company and one-off reorganisation costs.

We  are expecting the printing services segment to pick up in the second half of
the  year. The  growth of  media companies  is forecasted  to be  modest and the
reorganisation  of the former Ajakirjade Kirjastus  is still underway leading to
stronger products that also have a future potential in the digital world.

In  the consolidated financial  reports 50% joint ventures  are recognised under
the   equity  method,  in  compliance  with  International  Financial  Reporting
Standards  (IFRS). In its  monthly reports, the  management monitors the Group's
performance on the basis of proportional consolidation of joint ventures and the
syndicated  loan contract also determines the calculation of some loan covenants
by proportional consolidation. For the purpose of clarity, the management report
shows two sets of indicators: one where joint ventures are consolidated line-by-
line  50% and the  other where  joint ventures  are recognised  under the equity
method and their net result is presented as financial income in one line.


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


 Performance indicators -
 joint ventures consolidated
 50%
 (EUR thousand)                Q2 2018 Q2 2017 Change % Q2 2016 Q2 2015 Q2 2014
-------------------------------------------------------------------------------
 For the period
-------------------------------------------------------------------------------
 Sales                         17 659  16 382  8%       16 545  15 998  16 007
-------------------------------------------------------------------------------
 EBITDA                        1 676   2 184   -23%     2 332   1 488   2 935
-------------------------------------------------------------------------------
 EBITDA margin (%)             9.5%    13.3%            14.1%   9.3%    18.3%
-------------------------------------------------------------------------------
 Operating profit              854     1 403   -39%     1 546   745     2 180
-------------------------------------------------------------------------------
 Operating margin (%)          4.8%    8.6%             9.3%    4.7%    13.6%
-------------------------------------------------------------------------------
 Interest expenses             (102)   (106)   3%       (134)   (146)   (181)
-------------------------------------------------------------------------------
 Net profit/(loss) for the
 period                        893     1 221   -27%     1 324   481     1 858
-------------------------------------------------------------------------------
 Net margin (%)                5.1%    7.5%             8.0%    3.0%    11.6%
-------------------------------------------------------------------------------
 Return on assets ROA (%)      1.1%    1.6%             1.7%    0.6%    2.4%
-------------------------------------------------------------------------------
 Return on equity ROE (%)      1.7%    2.4%             2.7%    1.0%    4.2%
-------------------------------------------------------------------------------
 Earnings per share (EPS)      0.03    0.04             0.05    0.02    0.06
-------------------------------------------------------------------------------


 Performance
 indicators -
 joint ventures                                   1(st)     1(st)     1(st)
 consolidated 50%  1(st) Half 1(st) Half          Half year Half year Half year
 (EUR thousand)    year 2018  year 2017  Change % 2016      2015      2014
-------------------------------------------------------------------------------
 For the period
-------------------------------------------------------------------------------
 Sales             34 010     31 079     9%       30 947    30 179    30 773
-------------------------------------------------------------------------------
 EBITDA            2 344      3 427      -32%     3 574     3 005     4 389
-------------------------------------------------------------------------------
 EBITDA margin (%) 6.9%       11.0%               11.5%     10.0%     14.3%
-------------------------------------------------------------------------------
 Operating profit  695        1 891      -63%     2 022     1 507     2 871
-------------------------------------------------------------------------------
 Operating margin
 (%)               2.0%       6.1%                6.5%      5.0%      9.3%
-------------------------------------------------------------------------------
 Interest expenses (205)      (222)      7%       (269)     (320)     (357)
-------------------------------------------------------------------------------
 Net profit/(loss)
 for the period    653        1 631      -60%     1 636     1 037     2 361
-------------------------------------------------------------------------------
 Net margin (%)    1.9%       5.2%                5.3%      3.4%      7.7%
-------------------------------------------------------------------------------
 Return on assets
 ROA (%)           0.8%       2.1%                2.1%      1.3%      3.1%
-------------------------------------------------------------------------------
 Return on equity
 ROE (%)           1.2%       3.2%                3.4%      2.2%      5.5%
-------------------------------------------------------------------------------
 Earnings per
 share (EPS)       0.02       0.05                0.06      0.03      0.08
-------------------------------------------------------------------------------


 Balance sheet - joint ventures consolidated 50%
 (EUR thousand)                                  30.06.2018 31.12.2017 Change %
-------------------------------------------------------------------------------
 As of the end of the period
-------------------------------------------------------------------------------
 Current assets                                  16 703     16 725     0%
-------------------------------------------------------------------------------
 Non-current assets                              62 946     62 597     1%
-------------------------------------------------------------------------------
 Total assets                                    79 649     79 322     0%
-------------------------------------------------------------------------------
   incl. cash and bank                           1 391      2 818      -51%
-------------------------------------------------------------------------------
   incl. goodwill                                39 685     39 920     -1%
-------------------------------------------------------------------------------
 Current liabilities                             13 325     11 081     20%
-------------------------------------------------------------------------------
 Non-current liabilities                         15 262     15 747     -3%
-------------------------------------------------------------------------------
 Total liabilities                               28 587     26 828     7%
-------------------------------------------------------------------------------
   incl. borrowings                              15 366     15 791     -3%
-------------------------------------------------------------------------------
 Equity                                          51 062     52 494     -3%
-------------------------------------------------------------------------------


 Financial ratios (%) - joint ventures consolidated 50% 30.06.2018 31.12.2017
-----------------------------------------------------------------------------
 Equity ratio (%)                                       64%        66%
-----------------------------------------------------------------------------
 Debt to equity ratio (%)                               30%        30%
-----------------------------------------------------------------------------
 Debt to capital ratio (%)                              21%        20%
-----------------------------------------------------------------------------
 Total debt/EBITDA ratio                                2.73       2.35
-----------------------------------------------------------------------------
 Liquidity ratio                                        1.25       1.51
-----------------------------------------------------------------------------


FINANCIAL INDICATORS AND RATIOS - joint ventures recognised under the equity
method


 Performance indicators -
 joint ventures under equity
 method
 (EUR thousand)                Q2 2018 Q2 2017 Change % Q2 2016 Q2 2015 Q2 2014
-------------------------------------------------------------------------------
 For the period
-------------------------------------------------------------------------------
 Sales                         15 304  13 923  10%      14 120  13 765  13 763
-------------------------------------------------------------------------------
 EBITDA                        1 626   1 944   -16%     1 962   1 113   2 664
-------------------------------------------------------------------------------
 EBITDA margin (%)             10.6%   14.0%            13.9%   8.1%    19.4%
-------------------------------------------------------------------------------
 Operating profit              897     1 253   -28%     1 249   429     1 936
-------------------------------------------------------------------------------
 Operating margin (%)          5.9%    9.0%             8.8%    3.1%    14.1%
-------------------------------------------------------------------------------
 Interest expenses             (99)    (99)    0%       (121)   (130)   (181)
-------------------------------------------------------------------------------
 Profit /(loss) of joint
 ventures under equity method  152     141     8%       224     225     190
-------------------------------------------------------------------------------
 Net profit/(loss) for the
 period                        893     1 221   -27%     1 324   481     1 858
-------------------------------------------------------------------------------
 Net margin (%)                5.8%    8.8%             9.4%    3.5%    13.5%
-------------------------------------------------------------------------------
 Return on assets ROA (%)      1.2%    1.6%             1.8%    0.6%    2.5%
-------------------------------------------------------------------------------
 Return on equity ROE (%)      1.7%    2.4%             2.7%    1.0%    4.2%
-------------------------------------------------------------------------------
 Earnings per share (EPS)      0.03    0.04             0.05    0.02    0.06
-------------------------------------------------------------------------------


 Performance
 indicators -
 joint ventures
 under equity                                     1(st)     1(st)     1(st)
 method            1(st) Half 1(st) Half          Half year Half year Half year
 (EUR thousand)    year 2018  year 2017  Change % 2016      2015      2014
-------------------------------------------------------------------------------
 For the period
-------------------------------------------------------------------------------
 Sales             29 321     26 332     11%      26 375    25 858    26 498
-------------------------------------------------------------------------------
 EBITDA            2 248      3 018      -26%     2 987     2 351     3 993
-------------------------------------------------------------------------------
 EBITDA margin (%) 7.7%       11.5%               11.3%     9.1%      15.1%
-------------------------------------------------------------------------------
 Operating profit  790        1 661      -52%     1 573     972       2 529
-------------------------------------------------------------------------------
 Operating margin
 (%)               2.7%       6.3%                6.0%      3.8%      9.5%
-------------------------------------------------------------------------------
 Interest expenses (196)      (208)      6%       (241)     (285)     (357)
-------------------------------------------------------------------------------
 Profit /(loss) of
 joint ventures
 under equity
 method            91         210        -57%     356       419       288
-------------------------------------------------------------------------------
 Net profit/(loss)
 for the period    653        1 631      -60%     1 636     1 037     2 361
-------------------------------------------------------------------------------
 Net margin (%)    2.2%       6.2%                6.2%      4.0%      8.9%
-------------------------------------------------------------------------------
 Return on assets
 ROA (%)           0.9%       2.2%                2.2%      1.4%      3.2%
-------------------------------------------------------------------------------
 Return on equity
 ROE (%)           1.2%       3.2%                3.4%      2.2%      5.5%
-------------------------------------------------------------------------------
 Earnings per
 share (EPS)       0.02       0.05                0.06      0.03      0.08
-------------------------------------------------------------------------------


 Balance sheet - joint ventures under equity
 method
 (EUR thousand)                                  30.06.2018 31.12.2017 Change %
-------------------------------------------------------------------------------
 As of the end of the period
-------------------------------------------------------------------------------
 Current assets                                  14 975     13 827     8%
-------------------------------------------------------------------------------
 Non-current assets                              62 488     62 130     1%
-------------------------------------------------------------------------------
 Total assets                                    77 464     75 957     2%
-------------------------------------------------------------------------------
   incl. cash and bank                           595        1 073      -45%
-------------------------------------------------------------------------------
   incl. goodwill                                37 969     37 969     0%
-------------------------------------------------------------------------------
 Current liabilities                             11 347     8 372      36%
-------------------------------------------------------------------------------
 Non-current liabilities                         15 054     15 091     0%
-------------------------------------------------------------------------------
 Total liabilities                               26 401     23 463     13%
-------------------------------------------------------------------------------
   incl. borrowings                              15 128     15 257     -1%
-------------------------------------------------------------------------------
 Equity                                          51 062     52 494     -3%
-------------------------------------------------------------------------------


  Financial ratios  (%) -
  joint ventures consolidated under equity method   30.06.2018   31.12.2017
----------------------------------------------------------------------------
  Equity ratio (%)                                  66%          69%
----------------------------------------------------------------------------
  Debt to equity ratio (%)                          30%          29%
----------------------------------------------------------------------------
  Debt to capital ratio (%)                         22%          21%
----------------------------------------------------------------------------
  Total debt/EBITDA ratio                           2.75         2.44
----------------------------------------------------------------------------
  Liquidity ratio                                   1.32         1.65
----------------------------------------------------------------------------


-------------------------------------------------------------------------------
 Formulas used to calculate the financial ratios
-------------------------------------------------------------------------------
                             Earnings before interest, tax, depreciation and
                             amortization. EBITDA does not include any
                             impairment losses recognized during the period or
 EBITDA                      result from restructuring.
-------------------------------------------------------------------------------
 EBITDA margin (%)            EBITDA/sales x 100
-------------------------------------------------------------------------------
 Operating margin (%)         Operating profit/sales x100
-------------------------------------------------------------------------------
 Net margin (%)               Net margin in financial statements/sales x100
-------------------------------------------------------------------------------
 Earnings per share           Net profit / average number of shares
-------------------------------------------------------------------------------
 Equity ratio (%)            Equity/ (liabilities + equity) x100
-------------------------------------------------------------------------------
 Debt to equity ratio (%)    Interest bearing liabilities /equity x 100
-------------------------------------------------------------------------------
                             Interest bearing liabilities - cash and cash
 Debt to capital ratio (%)   equivalents (net debt) /(net debt +equity) x 100
-------------------------------------------------------------------------------
 Total debt/EBITDA ratio     Interest bearing borrowings /EBITDA
-------------------------------------------------------------------------------
 Debt service coverage ratio EBITDA/loan and interest payments for the period
-------------------------------------------------------------------------------
 Liquidity ratio             Current assets / current liabilities
-------------------------------------------------------------------------------
 Return on assets ROA (%)    Net profit /average assets x 100
-------------------------------------------------------------------------------
 Return on equity ROE (%)    Net profit /average equity x 100
-------------------------------------------------------------------------------

Cyclicality

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

Seasonality

The  revenue  from  the  Group's  advertising  sales  as well as in the printing
services  segment is impacted by major  seasonal fluctuations. The level of both
types  of revenue is the highest in the 2nd and 4th quarter of each year and the
lowest  in  the  3rd quarter.  Revenue  is  higher in the 4th quarter because of
higher  consumer  spending  during  the  Christmas  season,  accompanied  by the
increase  in  advertising  expenditure.  Advertising  expenditure is usually the
lowest  during the summer months, as well as during the first months of the year
following Christmas and New Year's celebrations. Book sales are the strongest in
the  last quarter of the year. Subscriptions  and retail sales of periodicals do
not  fluctuate  as  much  as  advertising  revenue. However the summer period is
always  more quiet and at the beginning of the school year in September there is
an  increase in subscriptions and retail sale which usually continues until next
summer holiday period.


SEGMENT OVERVIEW

The  Group's activities are divided into two  large segments - media segment and
printing services segment.

The  segments' EBITDA does not include intragroup management fees, impairment of
goodwill  and  trademarks.  Volume-based  and  other fees payable to advertising
agencies  have not been deducted from the advertising sales of segments, because
the  management  monitors  gross  advertising  sales.  Discounts and rebates are
reduced  from  the  Group's  sales  and  are  included  in  the combined line of
eliminations.


Key financial data of the segments Q2 2014-2018


  (EUR thousand)               Sales                    Sales

                               Q2 2018 Q2 2017 Change % Q2 2016 Q2 2015 Q2 2014
-------------------------------------------------------------------------------
 media segment (under equity
 method)                       9 889   8 621   15%      8 511   7 984   7 492
-------------------------------------------------------------------------------
   incl. revenue from all
 digital and online channels   6 492   5 117   27%      4 740   4 116   3 730
-------------------------------------------------------------------------------
 printing services segment     6 355   6 199   3%       6 663   6 386   7 210
-------------------------------------------------------------------------------
 entertainment segment         -       -       -        -       392     -
-------------------------------------------------------------------------------
 corporate functions           697     592     18%      593     488     422
-------------------------------------------------------------------------------
 intersegment eliminations     (1 637) (1 490)          (1 648) (1 485) (1 361)
-------------------------------------------------------------------------------
 TOTAL GROUP under equity
 method                        15 304  13 923  10%      14 120  13 765  13 763
-------------------------------------------------------------------------------
 media segment (by
 proportional consolidation)   12 527  11 410  10%      11 232  10 506  9 950
-------------------------------------------------------------------------------
   incl. revenue from all
 digital and online channels   6 870   5 422   27%      4 903   4 258   3 848
-------------------------------------------------------------------------------
 printing services segment     6 355   6 199   3%       6 663   6 386   7 210
-------------------------------------------------------------------------------
 entertainment segment         -       -       -        -       392     -
-------------------------------------------------------------------------------
 corporate functions           697     592     18%      593     488     422
-------------------------------------------------------------------------------
 intersegment eliminations     (1 920) (1 819)          (1 944) (1 774) (1 575)
-------------------------------------------------------------------------------
 TOTAL GROUP by proportional
 consolidation                 17 659  16 382  8%       16 545  15 998  16 007
-------------------------------------------------------------------------------


 (EUR thousand)                EBITDA                   EBITDA

                               Q2 2018 Q2 2017 Change % Q2 2016 Q2 2015 Q2 2014
-------------------------------------------------------------------------------
 media segment (under equity
 method)                       1 151   1 189   -3%      1 059   1 256   1 261
-------------------------------------------------------------------------------
 media segment (by
 proportional consolidation)   1 202   1 430   -16%     1 430   1 631   1 532
-------------------------------------------------------------------------------
 printing services segment     783     1 024   -24%     1 148   1 271   1 537
-------------------------------------------------------------------------------
 entertainment segment         -       -       -        -       (1 129) -
-------------------------------------------------------------------------------
 corporate functions           (309)   (270)   -15%     (246)   (285)   (134)
-------------------------------------------------------------------------------
 TOTAL GROUP under equity
 method                        1 626   1 944   -16%     1 962   1 113   2 664
-------------------------------------------------------------------------------
 TOTAL GROUP by proportional
 consolidation                 1 676   2 184   -23%     2 332   1 488   2 935
-------------------------------------------------------------------------------


 EBITDA margin                          Q2 2018 Q2 2017 Q2 2016 Q2 2015 Q2 2014
-------------------------------------------------------------------------------
 media segment (under equity method)    12%     14%     12%     16%     17%
-------------------------------------------------------------------------------
 media segment (by proportional
 consolidation)                         10%     13%     13%     16%     15%
-------------------------------------------------------------------------------
 printing services segment              12%     17%     17%     20%     21%
-------------------------------------------------------------------------------
 TOTAL GROUP under equity method        11%     14%     14%     8%      19%
-------------------------------------------------------------------------------
 TOTAL GROUP by proportional
 consolidation                          9%      13%     14%     9%      18%
-------------------------------------------------------------------------------


Key financial data of the segments in the first-half year 2014-2018


  (EUR thousand)    Sales                         Sales

                               1(st)              1(st)     1(st)     1(st)
                    1(st) Half Half year          Half year Half year Half year
                    year 2018  2017      Change % 2016      2015      2014
-------------------------------------------------------------------------------
 media segment
 (under equity
 method)            18 419     16 049    15%      15 282    14 565    13 906
-------------------------------------------------------------------------------
   incl. revenue
 from all digital
 and online
 channels           11 913     9 317     28%      8 298     7 466     6 517
-------------------------------------------------------------------------------
 printing services
 segment            12 576     11 966    5%       13 004    12 704    14 272
-------------------------------------------------------------------------------
 entertainment
 segment            -          -         -        -         453       -
-------------------------------------------------------------------------------
 corporate
 functions          1 388      1 167     19%      1 132     960       844
-------------------------------------------------------------------------------
 intersegment
 eliminations       (3 062)    (2 849)            (3 043)   (2 823)   (2 524)
-------------------------------------------------------------------------------
 TOTAL GROUP under
 equity method      29 321     26 332    11%      26 375    25 858    26 498
-------------------------------------------------------------------------------
 media segment (by
 proportional
 consolidation)     23 688     21 436    11%      20 428    19 468    18 587
-------------------------------------------------------------------------------
   incl. revenue
 from all digital
 and online
 channels           12 597     9 875     28%      8 602     7 716     6 735
-------------------------------------------------------------------------------
 printing services
 segment            12 576     11 966    5%       13 004    12 704    14 272
-------------------------------------------------------------------------------
 entertainment
 segment            -          -         -        -         453       -
-------------------------------------------------------------------------------
 corporate
 functions          1 388      1 167     19%      1 132     960       844
-------------------------------------------------------------------------------
 intersegment
 eliminations       (3 643)    (3 489)            (3 618)   (3 406)   (2 930)
-------------------------------------------------------------------------------
 TOTAL GROUP by
 proportional
 consolidation      34 010     31 079    9%       30 947    30 179    30 773
-------------------------------------------------------------------------------


 (EUR thousand)     EBITDA                        EBITDA

                               1(st)              1(st)     1(st)     1(st)
                    1(st) Half Half year          Half year Half year Half year
                    year 2018  2017      Change % 2016      2015      2014
-------------------------------------------------------------------------------
 media segment
 (under equity
 method)            1 397      1 543     -9%      1 094     1 535     1 600
-------------------------------------------------------------------------------
 media segment (by
 proportional
 consolidation)     1 492      1 951     -24%     1 681     2 189     1 995
-------------------------------------------------------------------------------
 printing services
 segment            1 484      1 922     -23%     2 330     2 432     2 995
-------------------------------------------------------------------------------
 entertainment
 segment            -          -         -        (1)       (1 105)   -
-------------------------------------------------------------------------------
 corporate
 functions          (633)      (446)     -42%     (436)     (511)     (601)
-------------------------------------------------------------------------------
 TOTAL GROUP under
 equity method      2 248      3 018     -26%     2 987     2 351     3 993
-------------------------------------------------------------------------------
 TOTAL GROUP by
 proportional
 consolidation      2 344      3 427     -32%     3 574     3 005     4 389
-------------------------------------------------------------------------------


                     1(st) Half  1(st) Half  1(st) Half  1(st) Half  1(st) Half
 EBITDA margin       year 2018   year 2017   year 2016   year 2015   year 2014
-------------------------------------------------------------------------------
 media segment
 (under equity
 method)             8%          10%         7%          11%         12%
-------------------------------------------------------------------------------
 media segment (by
 proportional
 consolidation)      6%          9%          8%          11%         11%
-------------------------------------------------------------------------------
 printing services
 segment             12%         16%         18%         19%         21%
-------------------------------------------------------------------------------
 TOTAL GROUP under
 equity method       8%          11%         11%         9%          15%
-------------------------------------------------------------------------------
 TOTAL GROUP by
 proportional
 consolidation       7%          11%         12%         10%         14%
-------------------------------------------------------------------------------


MEDIA SEGMENT

The  media  segment  includes  the  Group's  activities  in  Estonia, Latvia and
Lithuania. It comprises the operations of online portal Delfi, several different
news portal providing online advertising network and programmatic sales, outdoor
digital  screen advertising  in Estonia  and Latvia,  publishing of the Estonian
weekly newspapers Maaleht, Eesti Ekspress and LP, the daily newspaper Päevaleht,
tabloid  Õhtuleht,  freesheet  Linnaleht,  publishing  of books and magazines in
Estonia,  publishing of magazines in Lithuania until December 2017 and providing
home delivery services.

We  acquired the  Latvian digital  screen company  ACM LV  in the 3rd quarter of
2017 and  a 100% ownership in Adnet Media  in the 4th quarter of 2017. On 1 June
2018, the  joint venture Ajakirjade  Kirjastus was organised.  The publishing of
primarily  monthly magazines was moved to Ekspress Meedia and that of the weekly
magazines  to Õhtuleht Kirjastus (former name  SL Õhtuleht). From the same date,
Ajakirjade  Kirjastus and SL Õhtuleht are considered  as merged and it now bears
the  name of  Õhtuleht Kirjastus.  The figures  of Ajakirjade Kirjastus for June
include  the revenue  and EBITDA  earned until  the end  of May. The revenue and
expenses  of the  magazines moved  to Ekspress  Meedia are  100% included in the
figures  of  AS  Ekspress  Meedia.  The  figures  of magazines moved to Õhtuleht
Kirjastus for June are included in the income statement of Õhtuleht Kirjastus.

 News portals owned by the Group

 Owner           Portal                   Owner              Portal
-------------------------------------------------------------------------------
                                                             www.ekspress.ee
                 www.delfi.ee                                (http://www.ekspre
 Ekspress Meedia (http://www.delfi.ee/)   Ekspress Meedia    ss.ee/)
-------------------------------------------------------------------------------
                                                             www.maaleht.ee
                                                             (http://www.maaleh
                 rus.delfi.ee                                t.ee/)
-------------------------------------------------------------------------------
                                                             www.epl.ee
                 www.delfi.lv                                (http://www.epl.ee
 Delfi Latvia    (http://www.delfi.lv/)                      /)
-------------------------------------------------------------------------------
                 rus.delfi.lv
-------------------------------------------------------------------------------
                                                             www.ohtuleht.ee
                 www.delfi.lt                                (http://www.ohtule
 Delfi Lithuania (http://www.delfi.lt/)   Õhtuleht Kirjastus ht.ee/)
-------------------------------------------------------------------------------
                                                             www.vecherka.ee
                                                             (http://www.vecher
                 ru.delfi.lt                                 ka.ee)
-------------------------------------------------------------------------------


 (EUR thousand)               Sales                    EBITDA

                              Q2 2018 Q2 2017 Change % Q2 2018 Q2 2017 Change %
-------------------------------------------------------------------------------
 Ekspress Meedia              5 476   5 065   8%       416     424     -2%
-------------------------------------------------------------------------------
   incl. online advertising
 revenue                      1 946   1 903   2%
-------------------------------------------------------------------------------
 Delfi Latvia                 1 028   1 007   2%       146     131     11%
-------------------------------------------------------------------------------
 Delfi Lithuania              2 497   2 461   1%       590     645     -8%
-------------------------------------------------------------------------------
   incl. online advertising
 revenue                      2 469   1 993   24%
-------------------------------------------------------------------------------
 Adnet                        1 003   -       -        57      -       -
-------------------------------------------------------------------------------
 Hea Lugu                     145     90      60%      (9)     (10)    5%
-------------------------------------------------------------------------------
 ACM LV                       45      -       -        (54)    -       -
-------------------------------------------------------------------------------
 Other companies              -       -       -        5       (1)     657%
-------------------------------------------------------------------------------
 Intersegment eliminations    (304)   (2)              0       0
-------------------------------------------------------------------------------
 TOTAL subsidiaries           9 889   8 621   15%      1 151   1 189   -3%
-------------------------------------------------------------------------------
 Õhtuleht Kirjastus*          1 413   1 181   20%      103     161     -36%
-------------------------------------------------------------------------------
 Ajakirjade Kirjastus (until
 May 2018)*                   809     1 161   -30%     15      53      -72%
-------------------------------------------------------------------------------
 Express Post*                516     601     -14%     (105)   (0)     -29445%
-------------------------------------------------------------------------------
 Linna Ekraanid*              144     101     42%      38      27      43%
-------------------------------------------------------------------------------
 Intersegment eliminations    (244)   (256)            0       0
-------------------------------------------------------------------------------
 TOTAL subsidiaries           2 638   2 789   -5%      51      241     -79%
-------------------------------------------------------------------------------
 TOTAL segment by
 proportional consolidation   12 527  11 410  10%      1 202   1 430   -16%
-------------------------------------------------------------------------------


 (EUR thousand)    Sales                          EBITDA

                                                             1(st)
                   1(st) Half 1(st) Half          1(st) Half Half year
                   year 2018  year 2017  Change % year 2018  2017      Change %
-------------------------------------------------------------------------------
 Ekspress Meedia   10 330     9 560      8%       549        645       -15%
-------------------------------------------------------------------------------
   incl. online
 advertising
 revenue           3 553      3 439      3%
-------------------------------------------------------------------------------
 Delfi Latvia      1 868      1 862      0%       133        218       -39%
-------------------------------------------------------------------------------
 Delfi Lithuania   4 545      4 444      2%       708        696       2%
-------------------------------------------------------------------------------
   incl. online
 advertising
 revenue           4 495      3 611      24%
-------------------------------------------------------------------------------
 Adnet             1 927      -          -        105        -         -
-------------------------------------------------------------------------------
 Hea Lugu          304        186        63%      (10)       (15)      29%
-------------------------------------------------------------------------------
 ACM LV            88         -          -        (93)       -         -
-------------------------------------------------------------------------------
 Other entities    -          -          -        5          (1)       508%
-------------------------------------------------------------------------------
 Intersegment
 eliminations      (644)      (3)                 0          0
-------------------------------------------------------------------------------
 TOTAL
 subsidiaries      18 419     16 049     15%      1 397      1 543     -9%
-------------------------------------------------------------------------------
 Õhtuleht
 Kirjastus*        2 585      2 278      13%      172        258       -33%
-------------------------------------------------------------------------------
 Ajakirjade
 Kirjastus (until
 May 2018)*        1 862      2 292      -19%     59         137       -57%
-------------------------------------------------------------------------------
 Express Post*     1 080      1 187      -9%      (180)      (25)      -608%
-------------------------------------------------------------------------------
 Linna Ekraanid*   240        174        38%      45         39        15%
-------------------------------------------------------------------------------
 Intersegment
 eliminations      (497)      (544)               0          0
-------------------------------------------------------------------------------
 TOTAL
 subsidiaries      5 269      5 387      -2%      96         408       -77%
-------------------------------------------------------------------------------
 TOTAL segment by
 proportional
 consolidation     23 688     21 436     11%      1 492      1 951     -24%
-------------------------------------------------------------------------------

* Proportional share of joint ventures


ONLINE MEEDIA

Estonian online readership

In  the  quarter  ended,  Ekspress  Meedia  launched  new online outputs for all
magazines:   www.eestinaine.ee   (http://www.eestinaine.ee);  www.tervispluss.ee
(http://www.tervispluss.ee);     www.omamaitse.ee     (http://www.omamaitse.ee);
www.kroonika.ee            (http://www.kroonika.ee);            www.annestiil.ee
(http://www.annestiil.ee);  www.perejakodu.ee  (http://www.perejakodu.ee). Delfi
IOS    app    was    updated,   the   interior   design   channel   www.dekor.ee
(http://www.dekor.ee) was launched for the Russian population. Popular coverages
worth  mentioning include  the WRC  series and  Anett Kontaveit  games. Õhtuleht
Kirjastus  launched new websites: www.linnaleht.ee (http://www.linnaleht.ee) and
www.ohtulehtkirjastus.ee (http://www.ohtulehtkirjastus.ee).

Latvian online readership

Delfi  has maintained its  stable position as  the news portal  with the largest
user  base  in  Latvia.  In  the  quarter  ended,  several  major  projects were
implemented,  e.g. a special  China-themed page, coverage  of the song and dance
festival.  Hockey and soccer themed special pages  were launched and a new video
studio  was opened. Since June, an updated methodology of Gemius audience survey
is used in Latvia.

Lithuanian online readership

Delfi.lt  remains the largest  online portal in  Lithuania and has a significant
impact on the society. In the first quarter of 2018, DELFI's innovative solution
"Hot  spots" and an interactive map of the places around the world with the most
news  coverage  were  launched,  and  Delfi  TV  https://www.delfi.lt/video/ was
revamped.  From April, an updated methodology of Gemius audience survey was used
in  Lithuania. As a result, since April we  have used the average daily users as
the basis for comparing the number of readers in Lithuania.


PRINT MEDIA

Estonian newspaper circulation

Õhtuleht   continues   to   be  the  largest  daily  newspaper  by  circulation.
Traditionally, Maaleht was the largest newspaper in January and last December.


PRINTING SERVICES SEGMENT

All  printing services of the Group are provided  by AS Printall which is one of
the  largest printing  companies in  Estonia. We  are able to print high-quality
magazines,  newspapers, advertising  materials, product  and service catalogues,
paperback books and other publications in our printing plant.

  (EUR thousand)   Sales                          EBITDA

                   Q2 2018   Q2 2017   Change %   Q2 2018   Q2 2017   Change %
-------------------------------------------------------------------------------
  Printall         6 355     6 199     3%         783       1 024     -24%
-------------------------------------------------------------------------------


 (EUR thousand) Sales                            EBITDA

                1(st) Half  1(st) Half           1(st) Half 1(st) Half
                year 2018   year 2017   Change % year 2018  year 2017  Change %
-------------------------------------------------------------------------------
 Printall       12 576      11 966      5%       1 484      1 922      -23%
-------------------------------------------------------------------------------

For several years already, the printing services segment has been under pressure
due  to  continued  digitalisation  of  regular  journalism  and  the increasing
popularity  of Internet as  compared to printed  products. The price pressure is
very  strong both in  Scandinavia and Estonia,  because other Baltic States also
have  very competitive services. A sheet-fed  printing press purchased two years
ago  has  helped  us  expand  the  product  range also outside the regular media
sector.   We  are  also  engaged  in  active  sales  activities  outside  Nordic
countries.


Consolidated balance sheet (unaudited)

 (EUR thousand)                                           30.06.2018 31.12.2017
-------------------------------------------------------------------------------
 ASSETS
-------------------------------------------------------------------------------
 Current assets
-------------------------------------------------------------------------------
 Cash and cash equivalents                                       595      1 073
-------------------------------------------------------------------------------
 Trade and other receivables                                  10 587      9 917
-------------------------------------------------------------------------------
 Corporate income tax prepayment                                 148          4
-------------------------------------------------------------------------------
 Inventories                                                   3 646      2 832
-------------------------------------------------------------------------------
 Total current assets                                         14 975     13 827
-------------------------------------------------------------------------------
 Non-current assets
-------------------------------------------------------------------------------
 Trade and other receivables                                   1 241      1 750
-------------------------------------------------------------------------------
 Deferred tax asset                                               47         47
-------------------------------------------------------------------------------
 Investments in joint ventures                                 2 504      2 372
-------------------------------------------------------------------------------
 Investments in associates                                       354        354
-------------------------------------------------------------------------------
 Property, plant and equipment                                12 079     12 189
-------------------------------------------------------------------------------
 Intangible assets                                            46 264     45 419
-------------------------------------------------------------------------------
 Total non-current assets                                     62 488     62 130
-------------------------------------------------------------------------------
 TOTAL ASSETS                                                 77 464     75 957
-------------------------------------------------------------------------------
 LIABILITIES
-------------------------------------------------------------------------------
 Current liabilities
-------------------------------------------------------------------------------
 Borrowings                                                       74        166
-------------------------------------------------------------------------------
 Trade and other payables                                     11 177      8 095
-------------------------------------------------------------------------------
 Corporate income tax payable                                     96        111
-------------------------------------------------------------------------------
 Total current liabilities                                    11 347      8 372
-------------------------------------------------------------------------------
 Non-current liabilities
-------------------------------------------------------------------------------
 Long-term borrowings                                         15 054     15 091
-------------------------------------------------------------------------------
 Total non-current liabilities                                15 054     15 091
-------------------------------------------------------------------------------
 TOTAL LIABILITIES                                            26 401     23 463
-------------------------------------------------------------------------------
 EQUITY
-------------------------------------------------------------------------------
 Minority shareholding                                            67         68
-------------------------------------------------------------------------------
 Capital and reserves attributable to equity holders of
 parent company:
-------------------------------------------------------------------------------
 Share capital                                                17 878     17 878
-------------------------------------------------------------------------------
 Share premium                                                14 277     14 277
-------------------------------------------------------------------------------
 Treasury shares                                                (22)       (22)
-------------------------------------------------------------------------------
 Reserves                                                      1 688      1 531
-------------------------------------------------------------------------------
 Retained earnings                                            17 174     18 762
-------------------------------------------------------------------------------
 Total capital and reserves attributable to equity
 holders of parent company                                    50 996     52 426
-------------------------------------------------------------------------------
 TOTAL EQUITY                                                 51 062     52 494
-------------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                                 77 464     75 957
-------------------------------------------------------------------------------



Consolidated statement of comprehensive income (unaudited)

                                               1(st) Half year  1(st) Half year
 (EUR thousand)             Q2 2018  Q2 2017              2018             2017
-------------------------------------------------------------------------------
 Sales                       15 304   13 923            29 321           26 332
-------------------------------------------------------------------------------
 Cost of sales             (12 027) (10 725)          (23 591)         (20 800)
-------------------------------------------------------------------------------
 Gross profit                 3 278    3 198             5 731            5 532
-------------------------------------------------------------------------------
 Other income                   121      270               160              448
-------------------------------------------------------------------------------
 Marketing expenses           (718)    (798)           (1 485)          (1 514)
-------------------------------------------------------------------------------
 Administrative expenses    (1 766)  (1 400)           (3 582)          (2 762)
-------------------------------------------------------------------------------
 Other expenses                (18)     (18)              (34)             (42)
-------------------------------------------------------------------------------
 Operating profit               897    1 253               790            1 661
-------------------------------------------------------------------------------
 Interest income                 44       55                87              114
-------------------------------------------------------------------------------
 Interest expenses             (99)     (99)             (196)            (208)
-------------------------------------------------------------------------------
 Other finance income and
 costs                         (15)     (18)              (34)             (34)
-------------------------------------------------------------------------------
 Net finance cost              (70)     (63)             (142)            (127)
-------------------------------------------------------------------------------
 Profit (loss) on shares
 of joint ventures              152      141                91              210
-------------------------------------------------------------------------------
 Profit (loss) on shares
 of associates                    0     (21)                 0             (23)
-------------------------------------------------------------------------------
 Profit before income tax       979    1 310               740            1 721
-------------------------------------------------------------------------------
 Income tax expense            (86)     (89)              (86)             (90)
-------------------------------------------------------------------------------
 Net profit  for the
 reporting period               893    1 221               653            1 631
-------------------------------------------------------------------------------
 Net profit for the
 reporting period
 attributable to
-------------------------------------------------------------------------------
 Equity holders of the
 parent company                 894    1 221               654            1 631
-------------------------------------------------------------------------------
 Minority shareholders          (1)        0               (1)                0
-------------------------------------------------------------------------------
 Other comprehensive
 income                           0        0                 0                0
-------------------------------------------------------------------------------
 Total comprehensive
 income                         893    1 221               653            1 631
-------------------------------------------------------------------------------
 Comprehensive income for
 the reporting period
 attributable to
-------------------------------------------------------------------------------
 Equity holders of the
 parent company                 894    1 221               654            1 631
-------------------------------------------------------------------------------
 Minority shareholders          (1)       0                (1)                0
-------------------------------------------------------------------------------
 Basic and diluted
 earnings per share            0.03     0.04              0.02             0.05
-------------------------------------------------------------------------------


Consolidated cash flow statement (unaudited)

 (EUR thousand)                       1(st) Half year 2018 1(st) Half year 2017
-------------------------------------------------------------------------------
 Cash flows from operating activities
-------------------------------------------------------------------------------
 Operating profit for the reporting
 year                                                  790                1 661
-------------------------------------------------------------------------------
 Adjustments for:
-------------------------------------------------------------------------------
 Depreciation, amortisation and
 impairment                                          1 458                1 357
-------------------------------------------------------------------------------
 (Gain)/loss on sale and write-down
 of property, plant and equipment                      (7)                  (3)
-------------------------------------------------------------------------------
 Cash flows from operating
 activities:
-------------------------------------------------------------------------------
 Trade and other receivables                         (274)                   80
-------------------------------------------------------------------------------
 Inventories                                         (814)                   78
-------------------------------------------------------------------------------
 Trade and other payables                              960                (487)
-------------------------------------------------------------------------------
 Cash generated from operations                      2 113                2 686
-------------------------------------------------------------------------------
 Income tax paid                                     (245)                (231)
-------------------------------------------------------------------------------
 Interest paid                                       (196)                (208)
-------------------------------------------------------------------------------
 Net cash generated from operating
 activities                                          1 672                2 247
-------------------------------------------------------------------------------
 Cash flows from investing activities
-------------------------------------------------------------------------------
 Interest received                                      67                  102
-------------------------------------------------------------------------------
 Purchase of other investments                     (1 000)                 (35)
-------------------------------------------------------------------------------
 Purchase of  property, plant and
 equipment                                         (1 212)                (814)
-------------------------------------------------------------------------------
 Proceeds from sale of property,
 plant and equipment                                    25                   13
-------------------------------------------------------------------------------
 Loans granted                                       (476)              (2 025)
-------------------------------------------------------------------------------
 Loan repayments received                              574                1 028
-------------------------------------------------------------------------------
 Net cash used in investing
 activities                                        (2 022)              (1 732)
-------------------------------------------------------------------------------
 Cash flows from financing activities
-------------------------------------------------------------------------------
 Dividends received                                      0                   56
-------------------------------------------------------------------------------
 Finance lease payments made                          (37)                 (35)
-------------------------------------------------------------------------------
 Change in overdraft                                  (92)                    0
-------------------------------------------------------------------------------
 Repayments of bank loans                                0                (552)
-------------------------------------------------------------------------------
 Net cash used in financing
 activities                                          (129)                (531)
-------------------------------------------------------------------------------
 NET (DECREASE)/INCREASE IN CASH AND
 CASH EQUIVALENTS                                    (479)                 (15)
-------------------------------------------------------------------------------
 Cash and cash equivalents at the
 beginning of the year                               1 073                2 856
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end
 of the year                                           595                2 842
-------------------------------------------------------------------------------



Additional information:

         Mari-Liis Rüütsalu
         Chairman of the Management Board
         GSM: +372 512 2591
                           e-mail:                   [email protected]
(mailto:[email protected])


Attachment

  * EG_II_kvartal_2018_ENG (https://prlibrary-
    eu.nasdaq.com/Resource/Download/ac5dea7f-d9ea-4188-977d-53283e84876e)