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AS Tallink Grupp Unaudited Consolidated Interim Report Q1 2021

Teade

In the first quarter (1 January - 31 March) of the 2021 financial year, Tallink
Grupp AS and its subsidiaries (the Group) carried 267 224 passengers, which is
82.9% less than in the first quarter last year. The number of cargo units
transported decreased by 14.5% in the same comparison. The Group's unaudited
consolidated revenue decreased by 65.3% or EUR 101.2 million to a total of EUR
53.7 million. Unaudited EBITDA was EUR -6.3 million (EUR -1.3 million in Q1
2020) and unaudited net loss was EUR 34.4 million (net loss of EUR 30.2 million
in Q1 2020).

Operations during the quarter
Given the uncertainty regarding the duration of the crisis and the course of the
post-crisis recovery with progress of vaccinations, the business environment has
remained challenging.

In the current situation, the focus has remained on cost and cash flow
management to ensure the sustainability of the Group's core business.

Operations of Tallinn-Stockholm route vessels, Baltic Queen and Victoria I,
Latvia-Sweden route vessels, Romantika and Isabelle, and Helsinki-Stockholm
route vessels, Silja Serenade and Silja Symphony, were suspended. Operations of
Tallinn-Helsinki route cruise ferry Silja Europa were also suspended. Tallink
Hotel Riga has remained closed since October 2020. Tallink City hotel was
undergoing renovation. Tallink Spa & Conference Hotel and Tallink Express Hotel
operated in very limited capacity.

Estonia-Finland routes shuttle vessels Megastar and Star, cargo vessel Seawind,
Paldiski-Kapellskär route cargo vessels Regal Star and Sailor, and Turku-
Stockholm route cruise ferries Baltic Princess and Galaxy continued operating to
ensure international movement of cargo. Operations, particularly Estonia-Finland
route, were impacted negatively by additional traveling restrictions imposed by
Finnish Government concerning commuter traffic since late January.

Sales and segments
In the first quarter of 2021, the Group's total revenue decreased by EUR 101.2
million to EUR 53.7 million. Total revenue in the first quarter of 2020 and
2019 was EUR 154.9 million and EUR 178.9 million, respectively.

Revenue from route operations (core business) decreased by EUR 99.2 million to
EUR 44.5 million. The passenger operations and segment results on all routes
were significantly affected by the Covid-19 situation and imposed travel
restrictions.

The number of passengers carried on the Estonia-Finland routes decreased by
76.2% compared to last year. The number of transported cargo units decreased by
11.0%. Estonia-Finland routes' revenue decreased by EUR 34.4 million to EUR
24.8 million. The segment result decreased by EUR 8.2 million to EUR -4.9
million. The segment reflects operations of two shuttle vessels, a cargo vessel
and expenses of suspended cruise ferry Silja Europa.

The number of passengers carried on the Finland-Sweden routes' decreased by
88.1%. The number of transported cargo units decreased by 17.6%. The route's
revenue decreased by EUR 42.4 million to EUR 14.8 million and the segment result
decreased by 63.5% or EUR 5.2 million to EUR -13.3 million. The segment reflects
Turku-Stockholm operations and expenses of two suspended Helsinki-Stockholm
route cruise ferries. The results do not reflect EUR 4.9 million government
assistance related to operation of Turku-Stockholm route.

On Estonia-Sweden routes' the number of passengers carried decreased by 93.1%.
The number of transported cargo units decreased by 4.2%. Despite the decrease in
route's revenue by EUR 12.3 million to EUR 4.9 million, the segment result
increased by 32.0% to EUR -3.2 million. Estonia-Sweden route reflects operation
of two cargo vessel and expenses of two suspended cruise ferries.

The Latvia-Sweden route operations were suspended in the first quarter. The EUR
-3.5 million segment results reflects the expenses of the two suspended cruise
ferries.

Revenue from the segment other decreased by a total of EUR 3.2 million and
amounted to EUR 9.2 million. The decrease was mainly driven by significantly
lower accommodation sales and lower revenue from services provided at the
hotels. The segment revenue was positively impacted by an increase in online
shop sales, opening of Burger King restaurants and revenue from providing
mooring services at the Tallinn Old City Harbour.

Earnings
In the first quarter of 2021, the Group's gross profit decreased by EUR 19.8
million compared to the same period last year, amounting to EUR -20.0 million.
EBITDA decreased by EUR 5.1 million and amounted to EUR -6.3 million.

In 2020, the Group's main focus was on activities aimed at reducing the cost
base and increasing efficiency. As a result, the cost of sales declined by EUR
81.4 million or 52.5% compared to previous year. Sales, marketing and
administrative expenses declined by EUR 12.3 million or 45.1%. Management
expects improved efficiency also from the coming periods.

Excluding cost of goods sold and depreciation and amortisation, reduction in all
other operating expenses (including sales, marketing and administrative
expenses) was 53.8% or EUR 66.6 million.

During the quarter, there was an exemption from ships' fairway dues in Estonia
amounting to EUR 1.1 million. The exemption is valid until April 2021.

The Group used temporary salary support measures offered by Estonian government
which reduced personnel expenses by EUR 2.0 million. In addition, government
assistance from Group's other home markets amounted to EUR 5.0 million.

Amortisation and depreciation expense decreased by EUR 1.1 million to EUR 23.7
million compared to last year.

Net finance costs increased by EUR 0.6 million compared to the first quarter
last year. The change includes an increase of EUR 0.6 million in interest
expense.

The Group's unaudited net loss for the first quarter of 2021 was EUR 34.4
million or EUR 0.051 per share compared to a net loss of EUR 30.2 million or EUR
0.045 per share in 2020 and net loss of EUR 25.3 million or EUR 0.038 per share
in 2019.

Investments
The Group's investments in first quarter of 2021 amounted to EUR 4.2 million.

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

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

Dividends
Due to a deteriorated operating environment after the reporting date and
considering the Company's long-term interests, the Management Board has decided
to propose to the Supervisory Board not to pay dividends from net profit for
2020.

Financial position
In the first quarter, the Group's net debt increased by EUR 36.2 million to EUR
713.5 million.

In order to relieve the liquidity issues caused by the COVID-19 situation, Group
entities were allowed to postpone tax payments in 2020 and 2021 by home markets
tax boards. The postponed tax liabilities amounted to EUR 4.8 million at the end
of the quarter and have different settlement dates over the coming years.

At 31 March 2021, the Group's cash and cash equivalents amounted to EUR 14.8
million (EUR 16.5 million at 31 March 2020) and the Group had EUR 81.7 million
in unused credit lines (EUR 62.7 million at 31 March 2020). The total liquidity
buffer (cash, cash equivalents and unused credit facilities) amounted to EUR
96.4 million (EUR 79.2 million at 31 March 2020). At the reporting date, the
Group had undrawn part of EUR 90.0 million of the EUR 100.0 million working
capital loan from Nordic Investment Bank. At the same time, the current trade
and other payables amounted to EUR 61.9 million (EUR 100.7 million at 31 March
2020).

During the quarter, the Group was in negotiations with financial institutions to
agree on the amendment and the prolongation of the waivers of financial
covenants and the postponement of principal payments under existing loan
agreements.

Personnel
At 31 March 2021, the Group had 3 953 employees (6 819 at 31 March 2020). The
number of employees includes 258 employees on maternity leave.

Due to the Covid-19 situation the following changes regarding personnel were
effective in the first quarter of 2021:

  * the workload and remuneration of a part of Estonian and Latvian personnel
    reduced to 70%;
  * most of the Finnish personnel are on unpaid leave, except the staff on duty
    on vessels;
  * workload reduced to 20% for a large percentage of Swedish employees and up
    to 80% of salary remunerated by the Swedish Government.

In the first quarter of 2021, staff costs amounted to EUR 23.4 million (EUR
51.5 million in 2020), which is a 54.6% decrease compared to the same period
last year. The staff costs were impacted by salary support in a total amount of
EUR 2.0 million from the government of Estonia, paid directly to employees in
March. Salary support paid by the government of Sweden amounted to EUR 2.9
million and is recognised as other operating income. Effective reduction in
salary costs, including salary support measure in Sweden, amounts to EUR 31.0
million, which is a decrease of 60.2% compared to the first quarter last year.

Economic Environment
The Group considers Finland, Sweden, Estonia and Latvia its home markets with
the most exposure to the economic developments in Finland. The Group has also
high exposure to the economic developments in Estonia and Sweden. In the first
quarter of 2021, the Group's economic environment was dominated by the Covid-19
pandemic and stricter restrictions related to international travelling.

The consumer confidence for Finnish consumers worsened by the end of the
quarter, mainly reflecting the rigid restrictions imposed by the Finnish
government. Despite the slow stabilisation of confidence of the Swedish
consumers the overall demand in passenger traffic remained low due to hindrances
in travelling. The international travel restrictions and reduced air traffic
also effectively meant the absence of demand from the customers from outside our
home markets and the state-level travelling and border-crossing restrictions
effectively allowed to offer only international cargo operations to and from
Sweden.

In the first quarter, the cargo market fared somewhat better relative to the
passenger business, supported by the recovering business confidence on all the
home markets. Yet the market conditions regarding price competition remained
challenging resulting in an overall decline both in the number of carried cargo
units and in the average revenue per unit.

Measured in euros the global fuel prices increased, on average, by 10% in the
first quarter of 2021 compared to last year. The Group's overall fuel cost
declined by 45% compared to the same period last year, the cost was mainly
affected by the changed operating schedule.

The European Union and the Group's home markets made strong progress with the
vaccination process late in the first quarter and at the reporting date it can
be said that the level of protection against COVID-19 among the adult population
in Estonia, Finland and Sweden has reached about 40% (either vaccinated or
recovered from COVID-19).

For the foreseeable future, the key risk has to do with global and regional
developments with the Covid-19 situation, progress of vaccinations and related
restrictions on travel and other economic activities, its economic damage and
its impact on local and international trade.

Events in Q1
Opening of Burger King restaurant in Latvia
In January 2021, second Burger King restaurant was opened in Latvia. By the end
of first quarter, the Group operated 9 Burger King restaurants.

Legal action against Port of Tallinn
In March 2021, AS Tallink Grupp filed an action against AS Tallinna Sadam with a
claim of EUR 15.4 million for the fees paid by the Group in 2017, 2018 and
2019. The compensation is demanded for unjust enrichment or alternatively for
damage caused by abusing the dominant position AS Tallinna Sadam has on the
market for provision of port services in Old City Harbour.

Events after the reporting period and outlook
Opening of Burger King restaurants
In June 2021, two Burger King restaurants are planned to be opened in Latvia.
The Group continues preparations for opening additional Burger King restaurants
later in 2021.

Completion of renovation and planned reopening of Tallink City Hotel
The renovation of Tallink City Hotel is estimated to be completed in late spring
of 2021. The planned reopening of Tallink City Hotel is expected in June 2021.

Short-term outlook of vaccination against COVID-19
According to the European Union (EU) vaccination program the Member States
should have vaccinated 70% of the entire adult population, expected to be
required for controlling a pandemic, by summer 2021. Depending on the pace of
vaccination and natural infections, the pandemic might be controlled by the end
2021 in Europe, according to EU. In Group's main markets - Finland and Estonia -
vaccination has progressed at a vigorous rate, providing a positive outlook for
a gradual recovery of traffic between Estonia and Finland.

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

Due to the ongoing COVID-19 situation the earnings outlook is uncertain and
continues to be strongly affected by external factors such as the progress of
vaccination, states' decisions regarding the timing of the lifting of travel
restrictions and allowing passenger traffic as well as the duration of the
recovery period. Management expects the passenger traffic between Estonia and
Finland to recover rapidly after the restrictions have been lifted.

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

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

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

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



Key figures

 For the period                                    Q1 2021     Q1 2020 Change %
-------------------------------------------------------------------------------
 Revenue (million euros)                              53.7       154.9   -65.3%

 Gross profit (million euros)                        -20.0        -0.2      -

 EBITDA¹ (million euros)                              -6.3        -1.3  -400.6%

 EBIT¹ (million euros)                               -30.0       -26.0   -15.2%

 Net profit/loss for the period (million
 euros)                                              -34.4       -30.2   -14.0%



 Depreciation and amortisation (million euros)        23.7        24.8    -4.5%

 Capital expenditures¹ ² (million euros)               4.2        27.1   -84.5%

 Weighted average number of ordinary shares
 outstanding                                   669,882,040 669,882,040     0.0%

 Earnings/loss per share¹                           -0.051      -0.045   -14.0%



 Number of passengers                              267,224   1,566,730   -82.9%

 Number of cargo units                              85,156      99,617   -14.5%

 Average number of employees                         3,986       7,066   -43.6%



 As at                                          31.03.2021  31.12.2020 Change %
-------------------------------------------------------------------------------
 Total assets (million euros)                      1,492.5     1,516.2    -1.6%

 Total liabilities (million euros)                   812.4       801.9     1.3%

 Interest-bearing liabilities (million euros)        728.3       705.1     3.3%

 Net debt¹ (million euros)                           713.5       677.3     5.4%

 Net debt to EBITDA¹                                 238.7        84.2   183.4%

 Total equity (million euros)                        680.1       714.3    -4.8%

 Equity ratio¹ (%)                                     46%         47%



 Number of ordinary shares outstanding         669,882,040 669,882,040     0.0%

 Equity per share¹                                    1.02        1.07    -4.8%



 Ratios¹                                           Q1 2021     Q1 2020
-------------------------------------------------------------------------------
 Gross margin (%)                                   -37.2%       -0.1%

 EBITDA margin (%)                                  -11.7%       -0.8%

 EBIT margin (%)                                    -55.8%      -16.8%

 Net profit/loss margin (%)                         -64.1%      -19.5%



 ROA (%)                                             -6.4%        4.5%

 ROE (%)                                            -15.2%        5.5%

 ROCE (%)                                            -7.6%        5.3%



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

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



Consolidated statement of profit or loss and other comprehensive income

 Unaudited, in thousands of EUR                                Q1 2021  Q1 2020
-------------------------------------------------------------------------------
 Revenue (Note 3)                                               53,746  154,930

 Cost of sales                                                 -73,721 -155,102
-------------------------------------------------------------------------------
 Gross loss /profit                                            -19,975     -172



 Sales and marketing expenses                                   -5,073  -13,948

 Administrative expenses                                        -9,956  -13,424

 Impairment loss on receivables

 Other operating income                                          5,038    1,532

 Other operating expenses                                          -13      -22
-------------------------------------------------------------------------------
 Result from operating activities                              -29,979  -26,034



 Finance income (Note 4)                                             5        1

 Finance costs (Note 4)                                         -4,677   -4,112

 Share of profit/loss of equity-accounted investees                  0        0
-------------------------------------------------------------------------------
 Loss before income tax                                        -34,651  -30,145



 Income tax                                                        220      -53



 Net loss for the period                                       -34,431  -30,198

 Net loss for the period attributable to equity holders of the
 Parent                                                        -34,431  -30,198



 Other comprehensive income

 Items that may be reclassified to profit or loss

 Exchange differences on translating foreign operations            174      585
-------------------------------------------------------------------------------
 Other comprehensive income for the period                         174      585



 Total comprehensive loss for the period                       -34,257  -29,613

 Total comprehensive loss for the period attributable to
 equity holders of the Parent                                  -34,257  -29,613



 Loss per share (in EUR, Note 5)                                -0.051   -0.045
-------------------------------------------------------------------------------



Consolidated statement of financial position

 Unaudited, in thousands of EUR                31.03.2021 31.03.2020 31.12.2020
-------------------------------------------------------------------------------
 ASSETS

 Cash and cash equivalents                         14,762     16,462     27,834

 Trade and other receivables                       25,680     31,112     25,463

 Prepayments                                       12,491     11,631      7,216

 Prepaid income tax                                    25          1          0

 Inventories                                       29,561     39,452     28,707
-------------------------------------------------------------------------------
 Current assets                                    82,519     98,658     89,220



 Investments in equity-accounted investees            245        403        245

 Other financial assets and prepayments               508      1,847      2,233

 Deferred income tax assets                        20,270     18,674     20,270

 Investment property                                  300        300        300

 Property, plant and equipment (Note 6)         1,349,398  1,353,868  1,363,485

 Intangible assets (Note 7)                        39,267     44,023     40,448
-------------------------------------------------------------------------------
 Non-current assets                             1,409,988  1,419,115  1,426,981

 TOTAL ASSETS                                   1,492,507  1,517,773  1,516,201



 LIABILITIES AND EQUITY

 Interest-bearing loans and borrowings (Note
 8)                                               149,511    100,784    111,601

 Trade and other payables                          61,886    100,679     73,477

 Derivatives                                            0          0          0

 Payables to owners                                     6          6          6

 Income tax liability                                  10          0         10

 Deferred income                                   22,238     32,867     23,253
-------------------------------------------------------------------------------
 Current liabilities                              233,651    234,336    208,347



 Interest-bearing loans and borrowings (Note
 8)                                               578,777    490,213    593,518
-------------------------------------------------------------------------------
 Derivatives                                            0          0          0

 Other liabilities                                      0          0          0
-------------------------------------------------------------------------------
 Non-current liabilities                          578,777    490,213    593,518
-------------------------------------------------------------------------------
 Total liabilities                                812,428    724,549    801,865



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

 Share premium                                        663        663        663

 Reserves                                          69,516     69,681     69,854

 Retained earnings                                295,056    408,036    328,975
-------------------------------------------------------------------------------
 Equity attributable to equity holders of the
 Parent                                           680,079    793,224    714,336

 Total equity                                     680,079    793,224    714,336
-------------------------------------------------------------------------------
 TOTAL LIABILITIES AND EQUITY                   1,492,507  1,517,773  1,516,201



Consolidated statement of cash flows

 Unaudited, in thousands of EUR                                 Q1 2021 Q1 2020
-------------------------------------------------------------------------------


 CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss for the period                                        -34,431 -30,198

 Adjustments                                                     28,223  29,387

 Changes in:

 Receivables and prepayments related to operating activities     -3,307   1,645

 Inventories                                                       -854  -2,197

 Liabilities related to operating activities                    -11,814   2,237
-------------------------------------------------------------------------------
 Changes in assets and liabilities                              -15,975   1,685

 Cash generated from operating activities                       -22,183     874

 Income tax repaid/paid                                             -39      13
-------------------------------------------------------------------------------
 NET CASH FROM OPERATING ACTIVITIES                             -22,222     887



 CASH FLOWS FROM INVESTING ACTIVITIES

 Purchase of property, plant, equipment and intangible assets
 (Notes 6, 7)                                                    -4,201 -27,070

 Proceeds from disposals of property, plant, equipment                7      44

 Proceeds from other financial assets                                 0       0

 Interest received                                                    0       1
-------------------------------------------------------------------------------
 NET CASH USED IN INVESTING ACTIVITIES                           -4,194 -27,025



 CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from loans received (Note 8)                                0  15,000

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

 Repayment of bonds (Note 8)                                          0       0

 Change in overdraft (Note 8)                                    37,581  12,258

 Payments for settlement of derivatives                               0       0

 Payment of lease liabilities (Note 8)                           -4,225  -3,915

 Interest paid                                                   -5,144  -4,748

 Payment of transaction costs related to loans                     -201    -205
-------------------------------------------------------------------------------
 Dividends paid (Note 10)                                             0       0

 Reduction of share capital                                           0       0

 Income tax on dividends paid                                         0       0
-------------------------------------------------------------------------------
 NET CASH FROM/USED IN FINANCING ACTIVITIES                      13,344   3,723



 TOTAL NET CASH FLOW                                            -13,072 -22,415
-------------------------------------------------------------------------------


 Cash and cash equivalents at the beginning of period            27,834  38,877

 Change in cash and cash equivalents                            -13,072 -22,415
-------------------------------------------------------------------------------
 Cash and cash equivalents at the end of period                  14,762  16,462



Joonas Joost
Financial director

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