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Pealkiri

BALTIKA'S UNAUDITED CONCOLIDATED FINANCIAL RESULTS, 2008

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FINANCIAL HIGHLIGHTS, 2008                                                      
- Revenue 1,194 million kroons, up 3.7% yoy                                     
- Retail sales 7.3% growth yoy                                                  
- Comparable store sales 2% growth yoy                                          
- Gross margin 53.1%                                                            
- Operating loss 5.7 million kroons                                             
- Net loss 18.9 million kroons                                                  
- Store openings 17                                                             
- Sales area 11% growth yoy                                                     

In 2008, consolidated sales revenue of Baltika Group grew by 3.7% while retail  
revenues improved by 7.3%. The period's gross margin was 53.1% against 55.3% in 
2007. The Group ended 2008 with a net loss of 18.9 million kroons (1.2 million  
euros). The loss was triggered by the consequences of the economic downturn and 
currency devaluations.                                                          

Consolidated sales revenue for the fourth quarter totalled 306.8 million kroons 
(19.6 million euros) and remained stable compared with a year ago. Q4 2008 gross
margin was 48.3% (Q4 2007: 58.1%). Consolidated net loss for the fourth quarter 
amounted to 40.4 million kroons (2.6 million euros).                            

REVENUE                                                                         
Revenue by business segment                                                     
--------------------------------------------------------------------------------
| EEK million    | Q4 2008 | Q4 2007 |     +/- |     2008 |     2007 |     +/- |
--------------------------------------------------------------------------------
| Retail         |   288.4 |   284.6 |    1.3% |  1,058.9 |    987.3 |    7.3% |
--------------------------------------------------------------------------------
| Wholesale      |    17.6 |    22.0 |  -19.9% |    133.2 |    144.7 |   -7.9% |
--------------------------------------------------------------------------------
| Subcontracting |       0 |     0.3 |   -100% |        0 |     14.4 |   -100% |
--------------------------------------------------------------------------------
| Other          |     0.8 |     0.6 |   37.9% |      2.2 |      5.1 |    -57% |
--------------------------------------------------------------------------------
| Total          |   306.8 |   307.4 |   -0.2% |  1,194.3 |  1,151.5 |    3.7% |
--------------------------------------------------------------------------------

EUR 1 = EEK 15.6466                                                             

RETAIL                                                                          
Baltika's retail revenue for 2008 was 1,058.9 million kroons (67.7 million      
euros), a 7.3% improvement on the prior year. Excluding the effect of foreign   
exchange differences, retail revenue grew by 9.0%. Comparable store revenues    
rose by 2%. Faster growth increased the proportion of retail revenue in the     
Group's revenue mix to 89% compared with 86% in 2007.                           

The Group's retail network continued expanding, although at a somewhat slower   
pace than in the two preceding years. The annual average sales area grew by 11% 
(2007: 50% and 2006: 30%). The period's focus was on streamlining the store     
portfolio and enhancing the stores' sales efficiency. Although in the second and
third quarters efficiency improved, the average annual sales efficiency (sales  
per square metre) decreased by 3%. This was caused by two dominant trends that  
weakened the Group's performance in 2008. On the one hand, emerging economic    
recession and contracting consumption triggered a downturn in the Group's Baltic
sales. On the other hand, the currencies of the Group's Eastern European        
markets, Russia and Ukraine, weakened against the Estonian kroon. Even though   
both the Ukrainian and Russian operations posted strong sales growth, including 
exceptional improvement in comparable store sales, the positive trend was       
undermined by the devaluation of the Ukrainian and Russian currencies.          

Retail sales for the fourth quarter totalled 288.4 million kroons (18.4 million 
euros), a 1.3% improvement on the fourth quarter of 2007. Excluding the effect  
of foreign exchange differences, Q4 2008 retail revenue grew by 3.3%.           

STORES AND SALES AREA                                                           
At the year-end, Baltika had 134 stores in seven countries and a total sales    
area of 27,068 square metres. During the year, 17 stores were opened, 11 were   
closed and five were relocated or enlarged. The net growth of the retail system 
was six stores and approximately 2,800 square metres, an 11% increase in the    
sales space operated by Baltika Group.                                          

In terms of markets, the largest number of stores was opened in Ukraine and     
Lithuania where five and four new stores were launched, respectively. Three     
stores were opened in Russia and two in Poland. One store was opened in Estonia,
Latvia and the Czech Republic each. Store closings took place in all the markets
except the Czech Republic.                                                      

Stores by market                                                                
--------------------------------------------------------------------------------
|                                   |         31.12.2008 |          31.12.2007 |
--------------------------------------------------------------------------------
| Lithuania                         |                 33 |                  30 |
--------------------------------------------------------------------------------
| Estonia                           |                 30 |                  30 |
--------------------------------------------------------------------------------
| Ukraine                           |                 24 |                  22 |
--------------------------------------------------------------------------------
| Russia                            |                 23 |                  24 |
--------------------------------------------------------------------------------
| Latvia                            |                 16 |                  16 |
--------------------------------------------------------------------------------
| Poland                            |                  6 |                   5 |
--------------------------------------------------------------------------------
| Czech Republic                    |                  2 |                   1 |
--------------------------------------------------------------------------------
| Total stores                      |                134 |                 128 |
--------------------------------------------------------------------------------
| Total sales area, sqm             |             27,068 |              24,290 |
--------------------------------------------------------------------------------

The largest number of stores was opened under the Monton brand - altogether 11  
stores. At the end of 2008, Baltika's retail network included 55 Monton, 53     
Mosaic, 15 Baltman, 8 Ivo Nikkolo and 3 factory outlet stores.                  

In the fourth quarter, Baltika opened ten stores and closed one. Among others,  
Baltika opened four stores in Panorama, the newest shopping and entertainment   
centre in the capital of Lithuania as a result of which Lithuania became        
Baltika's biggest market in terms of the number of stores.                      

MARKETS                                                                         
The global financial crisis and its worldwide economic implications have not    
left Baltika's markets unscathed. In 2008 economic growth in the Baltics        
continued decelerating - while the Lithuanian economy was still able to sustain 
growth (+3.2%), the Estonian and Latvian economies contracted by 3.6% and 3.3%  
respectively (according to preliminary estimates). The Group's other large      
markets Ukraine and Russia remained in the black, growing by 2.1% and 5.6%      
respectively (according to preliminary estimates).                              

The Baltic countries accounted for 59% of the Group's retail revenue (2007:     
63%), the Eastern European markets Russia and Ukraine for 36% (2007: 34%) and   
the Central European markets for 5% (2007: 3%).                                 

Lithuania became Baltika's largest retail market in 2008, dethroning the        
reigning leader Estonia. As expected, the fastest growth in 2008 was posted by  
the Czech Republic where the Group entered in the fourth quarter of 2007. The   
biggest growth was achieved in Ukraine and Russia. In local currencies the      
growth figures were even larger than in Estonian kroons: 26% for Ukraine and 17%
for Russia.                                                                     

Retail sales by market                                                          
--------------------------------------------------------------------------------
| EEK million        |       2008 |       2007 |       +/- |  Percentage, 2008 |
--------------------------------------------------------------------------------
| Lithuania          |      243.1 |      231.9 |        5% |               23% |
--------------------------------------------------------------------------------
| Estonia            |      238.6 |      247.7 |       -4% |               22% |
--------------------------------------------------------------------------------
| Russia             |      196.1 |      173.7 |       13% |               19% |
--------------------------------------------------------------------------------
| Ukraine            |      179.7 |      156.8 |       15% |               17% |
--------------------------------------------------------------------------------
| Latvia             |      149.7 |      144.7 |        3% |               14% |
--------------------------------------------------------------------------------
| Poland             |       34.5 |       29.8 |       16% |                3% |
--------------------------------------------------------------------------------
| Czech Republic     |       17.2 |        2.7 |      537% |                2% |
--------------------------------------------------------------------------------
| Total              |    1,058.9 |      987.3 |        7% |              100% |
--------------------------------------------------------------------------------

EUR 1 = EEK 15.6466                                                             

Although Baltika did not penetrate any new markets in 2008, it entered new      
cities in the existing ones: Kaliningrad in Russia, Narva in Estonia, Wroclaw in
Poland and Ostrava in the Czech Republic.                                       

Baltika is not planning to expand to any new retail markets in 2009 either.     
However, the Group is carefully analysing subsequent expansion opportunities.   
According to a report by the international real estate development and          
consulting firm Cushman & Wakefield, in 2008 new trading space in Europe grew by
a record 15 million square metres, the largest addition since 1965 when the firm
began conducting its surveys. Still, in 2009 the effects of the global financial
crisis will spread to the real economies of most European countries, triggering 
a suspension in ongoing development projects and a deferral of many planned     
developments into the indefinite future. Above all, leading real estate         
developers are attempting to complete launched projects in cities that have     
higher purchasing power and are less vulnerable to the crisis.                  

One of Baltika's priorities for 2009 is to improve the efficiency of its store  
portfolio - in a changing economic environment it is essential to measure the   
performance of the stores and promptly respond to changes in customer numbers   
and preferences. Although the economic situation in Baltika's main markets is   
volatile and there is a lot of uncertainty about future developments, it is     
clear that shopping centres with a clear concept, a strong tenant mix and an    
excellent location have the best potential. These are also the centres where    
Baltika would like its brands to be represented.                                

BRANDS                                                                          
In terms of brands, the largest revenue contributor is Monton that accounted for
55% of the Group's retail sales for 2008. Other major brands Mosaic and Baltman 
generated 33% and 7% of retail revenue respectively while Ivo Nikkolo that was  
acquired in September 2006 contributed 4%. The remainder was earned at factory  
outlets.                                                                        

Monton                                                                          
In 2008 retail revenue from Monton totalled 581 million kroons (37.2 million    
euros), a 7% increase compared with the previous year. The brand's retail       
portfolio was augmented with 11 new stores. Six stores were closed and at the   
year-end there were 55 Monton stores, reflecting a net growth of five stores.   

At Monton, the keynotes of the year were people and processes - all positions   
were reviewed to determine the consistency of duties and competencies with      
assigned responsibilities as well as the desired outcomes. Effective            
streamlining allowed upgrading the efficiency and quality of the product        
development process. Major improvements were made also to the purchasing and    
distribution processes. As a result, more attention is paid to the              
distinguishing features of each retail market, the range of product sizes has   
been extended, inventories are more easily replenished and the stores of smaller
regions are better supplied.                                                    
                                                                                
For Monton, the year was exciting and innovative, spinning off new ideas and    
projects also for the future. The highlight of the summer was the Beijing       
Olympic Games where both the Estonian and Latvian Olympic delegations wore      
ceremonial and recreational outfits created by Monton. In October Monton stores 
launched Monton Fusion, a special ladieswear collection created by Anu          
Samarüütel-Long, a fashion designer with an international background and        
training. In Lithuania the brand gained recognition with the project ”Think     
green, think fashion” that promoted ecological thinking in partnership with the 
local Moteris magazine. Textile bags with the slogan became a real sales hit. In
Russia, another Monton newsletter was published. The issue describes current and
coming trends and discusses fashion with the local celebrities. In Estonia, for 
the second consecutive year, cooperation continued with the Tallinn Black Nights
Film Festival. In the framework of the project, a special festival shirt was    
created and a fashion films programme presented to fashion lovers.              

In 2009 Monton will focus on implementing a faster and more flexible product    
development process, improving margins by tighter cooperation with the supply   
base and designing a development plan for the brand.                            

Mosaic                                                                          
The repositioning and collection development efforts made in 2007 yielded       
excellent Mosaic sales in 2008  in all retail markets - Estonia, Latvia,        
Lithuania, Ukraine and Russia. In 2008, retail revenue from Mosaic grew by 13%  
to 353 million kroons (22.5 million euros). The growth is all the more notable  
because it was mainly generated by existing stores and continued even when the  
Baltic markets were hit by the consequences of the global economic crisis.      

For Mosaic, 2008 was a year of achieving new quality. Only four new stores were 
opened, the most important one complete with a new retail concept in the        
Panorama Centre in Vilnius, Lithuania. Thanks to the brand's rapid development  
over the past few years it became necessary to create a suitable shopping       
environment that would correspond to the customer's needs and expectations. The 
new store environment allows visually discerning the collections aimed at men,  
women and children, creating a relaxed and convenient atmosphere.               

A significant accomplishment for Mosaic was the commencement of the wholesale of
its ladieswear collection to one of the leading European fashion department     
store chains Peek&Cloppenburg. To start with, the Mosaic collection will be     
offered in five countries and 13 department stores. The first orders were       
dispatched in November but a larger assortment was made available at the        
Peek&Cloppenburg department stores in January 2009. The year was one of         
qualitative improvement also for the Mosaic childrenswear collection launched in
2007: the product range was extended and both sales and profit figures improved.

In 2009 Mosaic will pursue its signature style - a collection aimed at the needs
of the target customer should ensure both sales and profit growth. Another      
priority for 2009 is enhancing relations with suppliers. In connection with     
expansion to the wholesale markets of Western Europe, extra attention has to be 
paid to the products' conformity with the relevant EU certificates.             

Baltman                                                                         
Baltman is Baltika's oldest brand that aims to offer men a wide range of quality
business attire along with personal service. Since 2008 the focus of the brand  
has been on Baltika's home market, i.e. the three Baltic countries Estonia,     
Latvia and Lithuania.                                                           

In 2008 Baltman continued adjusting its suits to different types of figure and  
extending the range for the younger customer. The well-received Travel and      
Klimeo lines that are distinguished by their innovative fabric and finishing    
were significantly expanded.                                                    

The period's retail revenue from Baltman amounted to 74 million kroons (4.7     
million euros), a 19% decrease compared with 2007. The decline in sales is      
attributable to the fact that Baltman is an upmarket Baltic-based menswear brand
that was hit hardest by the onset of the recession. In addition, the number of  
Baltman stores decreased by one to 15 at the year-end.                          

Ivo Nikkolo                                                                     
In 2008 the youngest member of Baltika's brand portfolio expanded to Latvia and 
is now represented in all three Baltic countries. Thanks to the international   
clout of its collection, retail revenue from Ivo Nikkolo grew by 53% to 39      
million kroons (2.5 million euros), rendering Ivo Nikkolo the Group's           
fastest-growing brand in the face of adverse economic conditions across the     
Baltics.                                                                        

In the reporting period, Baltika opened two new Ivo Nikkolo stores - one in     
Vilnius and one in Riga - increasing the total number of Ivo Nikkolo stores to  
eight. The first Ivo Nikkolo store opened in the Latvian capital Riga in autumn 
2008 was well received by the customers. Since establishing a presence in the   
Lithuanian market in 2007, the brand has also gained loyal customers among the  
Lithuanian businesswomen. Strong results indicate that the Ivo Nikkolo brand has
found its focus - meticulous investment in quality and fit translate into strong
sales figures.                                                                  

In 2008 Ivo Nikkolo enhanced its premium image by offering designer jewellery in
partnership with recognised Estonian jewellers. In the framework of the charity 
project “Estonian Women for Ivo Nikkolo” the First Lady of the Republic of      
Estonia, Evelin Ilves, designed a dress for Ivo Nikkolo.                        

In 2009 when the brand celebrates its 15th anniversary it will focus on         
sustaining expansion in the Baltics.                                            

WHOLESALE                                                                       
Wholesale of Baltika's collections accounted for 11% of the Group's consolidated
revenue for 2008, generating 133.2 million kroons (8.5 million euros), a 7.9%   
decrease compared with the previous year. The decline in wholesale revenue was  
planned, stemming from the application of more conservative sales policies in   
Russia. The main wholesale markets were the Baltic countries, Russia and        
Finland.                                                                        

In the wholesale business, cooperation with the Western European partners is a  
strategic priority. A significant milestone in this area was the wholesale      
contract signed with one of the leading European department store chains        
Peek&Cloppenburg. Peek&Cloppenburg owns over 80 department stores in Germany and
more than 100 department stores throughout Europe. Peek&Cloppenburg will carry  
the Mosaic ladieswear collection whose design was considered suitable for the   
product mix of the quality fashion department store. The year 2009 will be a    
trial period during which the sales success of the collection and product and   
supply quality will be carefully monitored. During the trial period the Mosaic  
collection will be offered in five countries and 13 department stores.          

The fourth quarter is traditionally slow in the wholesale business. Fourth      
quarter wholesale revenue amounted to 17.6 million kroons (1.1 million euros),  
accounting for only 6% of total revenue. Compared with the fourth quarter of    
2007, wholesale revenue shrank by 19.9%.                                        

EARNINGS AND MARGINS                                                            
In 2008 the Group remained focused on improving the efficiency of its retail    
system. This was accompanied by streamlining the store portfolio. Fewer new     
stores were opened and the sales area grew by 11%. An increase in sales         
efficiency was achieved in the second and third quarters. The rise was supported
by positive developments in the Eastern European markets where the gradual      
start-up of new stores was combined with strong growth in comparable store      
sales. Although the Baltics exerted counter-pressure - the economic recession   
and decline in consumer spending that emerged in the second half of 2007        
escalated in 2008, the Group ended the second and third quarters in a profit.   

However, in the fourth quarter the local currencies of Russia and Ukraine that  
contribute 36% of the Group's retail revenue were steeply devalued. According to
the daily exchange rates of the Estonian Central Bank, in the fourth quarter the
Ukrainian hryvnia and the Russian rouble weakened against the Estonian kroon by 
34% and 12% respectively. The developments had an adverse impact on both the    
Group's sales and its assets and liabilities. In annual terms, the Group's      
average sales efficiency (sales per square metre) decreased by 3% and the year  
ended in a loss, triggered by the consequences of the economic downturn and     
currency devaluations. Exchange losses on recognising the impairment of assets  
and liabilities totalled 18.8 million kroons (1.2 million euros). In addition,  
movements in exchange rates affected consolidated revenue and gross profit      
through negative translation differences of 14.0 million kroons (0.9 million    
euros). Owing to a decline in sales, year-end inventories were written down by  
5.0 million kroons (0.3 million euros). In addition, due to increased business  
risks in the Russian market, euro-denominated receivables from a wholesale      
partner were written down by 4.4 million kroons (0.3 million euros).            

The Group's gross margin for 2008 was 53.1% (2007: 55.3%) and consolidated gross
profit amounted to 633.8 million kroons (40.5 million euros) remaining almost   
stable compared with a year ago. Gross profit for the fourth quarter decreased  
by 17.1% yoy and gross margin was 48.3% (Q4 2007: 58.1%).                       

Administrative and general expenses for the year decreased by 17.1% yoy.        
Distribution costs grew by 12.6% on account of expansion in retail space.       

Baltika's operating loss for the fourth quarter was 34.3 million kroons (2.2    
million euros) and operating loss for the full year was 5.7 million kroons (0.4 
million euros). In 2007 the Group earned operating profit of 64.6 million kroons
(4.1 million euros).                                                            

Operating loss for 2008 includes gain of 17.8 million kroons (1.1 million euros)
on fair value adjustments to investment property, recognised in other operating 
income. In the fourth quarter, gain on the revaluation of investment property   
amounted to 6.5 million kroons (0.4 million euros). The figure comprises a      
write-down of 4.5 million kroons (0.3 million euros) recognised for land        
classified as investment property and a write-up of 11.0 million kroons (0.7    
million euros) recognised for an office building under construction. In 2007    
gains on the sale of non-current assets and the revaluation of investment       
property totalled 24.3 million kroons (1.6 million euros).                      

The Group's financial expenses for 2008 were 14.6 million kroons (0.9 million   
euros), a 26.9% increase yoy. The largest financial expense item was interest   
expense (11.4 million kroons/0.7 million euros) that grew by 25.8% yoy. The     
growth in financial expenses is also attributable to a rise in foreign exchange 
losses.                                                                         

Baltika ended the fourth quarter with a net loss of 40.4 million kroons (2.6    
million euros). Net loss for the full year was 18.9 million kroons (1.2 million 
euros). In 2007 Baltika earned a net profit of 40.8 million kroons (2.6 million 
euros).                                                                         

BALANCE SHEET                                                                   
At 31 December 2008, Baltika's consolidated assets amounted to 781 million      
kroons (49.9 million euros), a 19% increase yoy.                                

Trade receivables decreased by 22 million kroons (1.4 million euros) yoy to 49  
million kroons (3.1 million euros). The decline results from a decrease in      
wholesale operations.                                                           

At the year-end, inventories totalled 288 million kroons (18.4 million euros),  
up 68 million kroons (4.3 million euros) or 31% yoy. Inventory balances         
increased due to growth in sales space, larger purchases of the spring/summer   
merchandise and higher year-end levels of the autumn/winter merchandise. In     
connection with the rise in inventories, trade payables grew by 77 million      
kroons (4.9 million euros) to 152 million kroons (9.7 million euros). The Group 
has also been able to agree longer settlement terms with suppliers.             
                                                                                
The Group's year-end borrowings totalled 272 million kroons (17.4 million       
euros), including bank loans of 262 million kroons (16.8 million euros) and     
finance lease liabilities of 10 million kroons (0.6 million euros). Compared    
with the previous year-end, the Group's debt burden has increased by 88 million 
kroons (5.6 million euros). Borrowings have grown mainly on account of the      
construction of a new office building that is being financed with a bank loan.  
At the end of 2008, construction-related borrowings totalled 70 million kroons  
(4.5 million euros).                                                            

The construction loan has increased the Group's net debt (interest-bearing      
liabilities less cash and bank balances), which at 31 December 2008 stood at 264
million kroons (16.9 million euros). The net debt to equity ratio was 88.2% (31 
December 2007: 45.1%).                                                          

In 2008, Baltika's equity decreased by 40 million kroons (2.6 million euros) to 
299 million kroons (19.1 million euros). This was caused by the loss incurred,  
unfavourable movements in exchange rates, and a decrease in minority interest.  

INVESTMENT                                                                      
In 2008, the Group's investments totalled 148.5 million kroons (9.5 million     
euros). The corresponding figure for 2007 was 102.9 million kroons (6.6 million 
euros).                                                                         

Investments in the retail system and information technology amounted to 53.7    
million kroons (3.4 million euros) and 10.1 million kroons (0.7 million euros)  
respectively while investments in manufacturing totalled 5.2 million kroons (0.3
million euros). Investments in real estate development (phase I of the Baltika  
Quarter) amounted to 79.5 million kroons (5.1 million euros).                   

PEOPLE                                                                          
At the end of 2008 Baltika Group employed 1,988 (31 December 2007: 1,983)       
people, including 994 (986) in the retail system, 771 (773) in manufacturing and
223 (224) at the head office. During the year, the number of employees grew by  
five. The number of staff increased in the retail system; in manufacturing and  
at the head office the figures remained stable. The Group's annual average      
number of employees was 1,950 (2007: 1,982).                                    

The Group's employee remuneration expenses for 2008 totalled 238.8 million      
kroons/15.3 million euros (2007: 200.1 million kroons/12.8 million euros). The  
remuneration of members of the supervisory council and management board amounted
to 4.6 million kroons/0.3 million euros (2007: 4.8 million kroons/0.3 million   
euros).                                                                         

SUMMARY OF CORPORATE STRATEGY FOR 2006-2008                                     
The implementation of Baltika's strategy for 2006-2008 was expected to ensure   
swift and profitable growth for 2008. At the beginning of 2006 the following    
targets were set for 2008:                                                      

- a two-fold increase on the sales of 2005, i.e. revenue of 1.36 billion kroons 
(87 million euros);                                                             
- 160 stores;                                                                   
- a gross margin of at least 52%;                                               
- at least a 30% return on equity.                                              

In the light of the economic climate of the last year of the strategy period,   
revenue growth was satisfactory - in 2008 Baltika's consolidated revenue reached
1.19 billion kroons (76 million euros). The same can be said about the sales    
area - although at the end of 2008 the Group had 134 stores, the retail space   
target was achieved thanks to the opening of stores with a larger format. The   
gross margin target was also achieved - the desired level was attained in 2006  
(54.5%) and improved in 2007 (55.3%). The gross margin for 2008 was 53.1%.      

In terms of the operating and net margins, however, the Group's profitability   
remained below target and hence the targeted return on equity was not achieved. 
This resulted from several inter-related factors. First, in Russia and Ukraine, 
where the Group expanded vigorously during the strategy period, the start-up    
periods of stores proved longer than expected. Secondly, profitability was      
adversely impacted by the onset of the economic slump in the Baltics and the    
weakening of national currencies in Eastern Europe. In 2006 the current         
developments in global economy could not be foreseen.                           

OUTLOOK FOR 2009                                                                
Although in the summer of 2008 Baltika began preparing for its next four-year   
strategy cycle (2009-2012), in the present economic environment it is more      
reasonable to continue on a year-at-a-time basis.                               

The keywords for 2009 will be adjustment and preparing for a new rise. In terms 
of half-years or seasons, this will mean that 2009/1 will be a season of        
determining new sales levels and corresponding sales and management expense and 
inventory levels. Since many of the preliminary plans for 2009/1 that were made 
in autumn 2008 have had to be significantly revised (for example, the initial   
sales plan has been reduced by approximately 20% and expenditures on new stores 
have been cut more than two-fold), the main targets will be lowering inventory  
levels, raising financing for purchases and reducing operating expenses in the  
light of the new sales forecast. The cost cutting programme foresees a more than
60-million kroon (3.8-million euro) cut in both management and operating        
expenses during the season. All business processes will be streamlined. Opening 
of new stores will continue at a smaller scale (14 openings have been planned). 
By the end of the season, the Group will have 137 stores and will be operating  
retail space of 29,000 square metres.                                           

According to action plans, by 2009/2 the Group will have adjusted and its       
operation should be ordinary. No investments will be made in the growth of the  
retail system and operating expenses and inventory levels will correspond to    
sales levels that are lower than before. The target will be reinforcing the     
Group's market positions by well-balanced collections, proactive sales offerings
and a dedicated sales process.                                                  

As preparation of accurate long-term sales plans is currently extremely         
complicated, Baltika forecasts for 2009 revenue of 1,083-1,125 million kroons   
(69-72 million euros) including 990-1,020 million kroons (63-65 million euros)  
generated by the retail business and 90-100 million kroons (5.8-6.4 million     
euros) generated by the wholesale business. Until the end of 2009, the number of
stores and the sales area should remain at the level of 2009/1.                 

As a single non-recurring project, in May 2009 a new office building will be    
completed as part of phase I of the Baltika Quarter. The new building and the   
old office building that will be vacated after Baltika's relocation to new      
premises will have more than 11,000 square metres of office and trading space   
that can be let. The anchor tenant of the new building will be Baltika Group    
with its head office and brand stores (over 5,500 square metres). Expenditures  
on phase I of the Baltika Quarter will total around 145 million kroons (9.3     
million euros).                                                                 

REPORTING CALENDAR IN 2009                                                      
In 2009, the consolidated financial results of Baltika will be published on the 
following dates:                                                                

2008 audited annual report  March 31                                            
2009 Q1 results             April 28 
2009 Q2 results             July 29 
2009 Q3 results             October 28 

In addition, in the beginning of every month the sales results of the preceding 
month will be published.                                                        

KEY FIGURES OF THE GROUP (2008)                                                 
--------------------------------------------------------------------------------
|                                    |  31.12.2008 |  31.12.2007 |         +/- |
--------------------------------------------------------------------------------
| Revenue (EEK million)              |     1,194.3 |     1,151.5 |        3.7% |
--------------------------------------------------------------------------------
| Retail sales (EEK million)         |     1,058.9 |       987.3 |        7.3% |
--------------------------------------------------------------------------------
| Share of retail sales in revenue   |         89% |         86% |             |
--------------------------------------------------------------------------------
| Number of stores                   |         134 |         128 |        4.7% |
--------------------------------------------------------------------------------
| Sales area (sqm)                   |      27,068 |      24,290 |       11.4% |
--------------------------------------------------------------------------------
| Number of employees (end of        |       1,988 |       1,983 |        0.3% |
| period)                            |             |             |             |
--------------------------------------------------------------------------------
| Gross margin                       |       53.1% |       55.3% |             |
--------------------------------------------------------------------------------
| Operating margin                   |       -0.5% |        5.6% |             |
--------------------------------------------------------------------------------
| EBT margin                         |       -1.7% |        4.6% |             |
--------------------------------------------------------------------------------
| Net margin                         |       -1.6% |        3.5% |             |
--------------------------------------------------------------------------------
| Current ratio                      |         1.3 |         1.6 |      -18.8% |
--------------------------------------------------------------------------------
| Inventory turnover                 |        4.55 |        5.30 |      -14.2% |
--------------------------------------------------------------------------------
| Debt to equity ratio               |       91.1% |       54.4% |             |
--------------------------------------------------------------------------------
| Return on equity                   |       -5.7% |       13.1% |             |
--------------------------------------------------------------------------------
| Return on assets                   |       -2.6% |        6.5% |             |
--------------------------------------------------------------------------------

EUR 1 = EEK 15.6466                                                             

Definitions of key ratios                                                       
Gross margin = (Revenue-Cost of goods sold)/Revenue                             
Operating margin = Operating profit/Revenue                                     
EBT margin = Profit before income tax/Revenue                                   
Net margin = Net profit (attributable to parent)/Revenue                        
Current ratio = Current assets/Current liabilities                              
Inventory turnover = Revenue/Average inventories*                               
Debt to equity ratio = Interest-bearing liabilities/Equity                      
Return on equity (ROE) = Net profit (attributable to parent)/Average equity*    
Return on assets (ROA) = Net profit (attributable to parent)/Average total      
assets*                                                                         
*Based on 12-month average                                                      



CONSOLIDATED INCOME STATEMENT                                                   
(unaudited, in EEK thousand)                                                    
--------------------------------------------------------------------------------
|                                 |  Q4 2008 |  Q4 2007 |     2008 |      2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue                         |  306,849 |  307,421 | 1,194,32 | 1,151,520 |
|                                 |          |          |        0 |           |
--------------------------------------------------------------------------------
| Cost of goods sold              | -158,793 | -128,816 | -560,486 |  -514,839 |
--------------------------------------------------------------------------------
| Gross profit                    |  148,056 |  178,605 |  633,834 |   636,681 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution costs              | -161,562 | -143,016 | -588,648 |  -522,620 |
--------------------------------------------------------------------------------
| Administrative and general      |  -13,284 |  -21,597 |  -50,506 |   -60,911 |
| expenses                        |          |          |          |           |
--------------------------------------------------------------------------------
| Other operating income          |    9,848 |    2,904 |   22,765 |    25,219 |
--------------------------------------------------------------------------------
| Other operating expenses        |  -17,351 |   -6,707 |  -23,109 |   -13,815 |
--------------------------------------------------------------------------------
| Operating profit (loss)         |  -34,293 |   10,189 |   -5,664 |    64,554 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income (expenses)     |   -6,311 |   -3,587 |  -14,625 |   -11,523 |
--------------------------------------------------------------------------------
| Interest expenses, net          |   -3,154 |   -2,579 |  -11,386 |    -9,049 |
--------------------------------------------------------------------------------
| Foreign exchange losses, net    |   -3,204 |   -1,000 |   -3,560 |    -2,389 |
--------------------------------------------------------------------------------
| Other financial income          |       47 |       -8 |      321 |       -85 |
| (expenses), net                 |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit (loss) before income tax |  -40,604 |    6,602 |  -20,289 |    53,031 |
--------------------------------------------------------------------------------
| Income tax                      |     -770 |   -4,277 |   -1,178 |    -9,189 |
--------------------------------------------------------------------------------
| Net profit (loss)               |  -41,374 |    2,325 |  -21,467 |    43,842 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit (loss) attributable  |  -40,382 |    1,643 |  -18,947 |    40,773 |
| to equity holders of the parent |          |          |          |           |
| company                         |          |          |          |           |
--------------------------------------------------------------------------------
| Net profit (loss) attributable  |     -992 |      682 |   -2,520 |     3,069 |
| to minority shareholders        |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic earnings per share, EEK   |    -2.17 |     0.09 |    -1.02 |      2.19 |
--------------------------------------------------------------------------------
| Diluted earnings per share, EEK |    -2.17 |     0.09 |    -1.02 |      2.19 |
--------------------------------------------------------------------------------


CONSOLIDATED INCOME STATEMENT                                                   
(unaudited, in EUR thousand)                                                    
--------------------------------------------------------------------------------
|                                 |  Q4 2008 |  Q4 2007 |     2008 |      2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue                         |   19,611 |   19,648 |   76,331 |    73,596 |
--------------------------------------------------------------------------------
| Cost of goods sold              |  -10,149 |   -8,233 |  -35,822 |   -32,904 |
--------------------------------------------------------------------------------
| Gross profit                    |    9,463 |   11,415 |   40,509 |    40,691 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution costs              |  -10,326 |   -9,140 |  -37,621 |   -33,402 |
--------------------------------------------------------------------------------
| Administrative and general      |     -849 |   -1,380 |   -3,228 |    -3,893 |
| expenses                        |          |          |          |           |
--------------------------------------------------------------------------------
| Other operating income          |      629 |      186 |    1,455 |     1,612 |
--------------------------------------------------------------------------------
| Other operating expenses        |   -1,109 |     -429 |   -1,477 |      -883 |
--------------------------------------------------------------------------------
| Operating profit (loss)         |   -2,192 |      651 |     -362 |     4,126 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial income (expenses)     |     -403 |     -229 |     -935 |      -736 |
--------------------------------------------------------------------------------
| Interest expenses, net          |     -202 |     -165 |     -728 |      -578 |
--------------------------------------------------------------------------------
| Foreign exchange losses, net    |     -205 |      -64 |     -228 |      -153 |
--------------------------------------------------------------------------------
| Other financial income          |        3 |       -1 |       21 |        -5 |
| (expenses), net                 |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit (loss) before income tax |   -2,595 |      422 |   -1,297 |     3,389 |
--------------------------------------------------------------------------------
| Income tax                      |      -49 |     -273 |      -75 |      -587 |
--------------------------------------------------------------------------------
| Net profit (loss)               |   -2,644 |      149 |   -1,372 |     2,802 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit (loss) attributable  |   -2,581 |      106 |   -1,211 |     2,606 |
| to equity holders of the parent |          |          |          |           |
| company                         |          |          |          |           |
--------------------------------------------------------------------------------
| Net profit (loss) attributable  |      -63 |       43 |     -161 |       196 |
| to minority shareholders        |          |          |          |           |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic earnings per share, EUR   |    -0.14 |     0.01 |    -0.06 |      0.14 |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR |    -0.14 |     0.01 |    -0.06 |      0.14 |
--------------------------------------------------------------------------------


CONSOLIDATED BALANCE SHEET                                                      
(unaudited, in EEK thousand)                                                    
--------------------------------------------------------------------------------
|                                             |    31.12.2008 |     31.12.2007 |
--------------------------------------------------------------------------------
| ASSETS                                      |               |                |
--------------------------------------------------------------------------------
| Current assets                              |               |                |
--------------------------------------------------------------------------------
| Cash and bank                               |         8,671 |         31,494 |
--------------------------------------------------------------------------------
| Trade and other receivables                 |        98,369 |        113,563 |
--------------------------------------------------------------------------------
| Inventories                                 |       288,431 |        220,698 |
--------------------------------------------------------------------------------
| Non-current assets held for sale            |             0 |            500 |
--------------------------------------------------------------------------------
| Total current assets                        |       395,471 |        366,255 |
--------------------------------------------------------------------------------
| Non-current assets                          |               |                |
--------------------------------------------------------------------------------
| Deferred income tax asset                   |         5,547 |          5,897 |
--------------------------------------------------------------------------------
| Other non-current assets                    |         6,103 |         11,448 |
--------------------------------------------------------------------------------
| Investment property                         |       134,098 |         11,250 |
--------------------------------------------------------------------------------
| Property, plant and equipment               |       180,580 |        203,098 |
--------------------------------------------------------------------------------
| Intangible assets                           |        59,604 |         58,409 |
--------------------------------------------------------------------------------
| Total non-current assets                    |       385,932 |        290,102 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                                |       781,403 |        656,357 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES                      |               |                |
--------------------------------------------------------------------------------
| Current liabilities                         |               |                |
--------------------------------------------------------------------------------
| Borrowings                                  |       104,025 |        100,167 |
--------------------------------------------------------------------------------
| Trade and other payables                    |       207,888 |        129,364 |
--------------------------------------------------------------------------------
| Total current liabilities                   |       311,913 |        229,531 |
--------------------------------------------------------------------------------
| Non-current liabilities                     |               |                |
--------------------------------------------------------------------------------
| Borrowings                                  |       168,388 |         84,319 |
--------------------------------------------------------------------------------
| Other liabilities                           |             0 |          1,086 |
--------------------------------------------------------------------------------
| Deferred income tax liability               |         2,196 |          2,075 |
--------------------------------------------------------------------------------
| Total non-current liabilities               |       170,584 |         87,480 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES                           |       482,497 |        317,011 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY                                      |               |                |
--------------------------------------------------------------------------------
| Share capital at par value                  |       186,449 |        186,449 |
--------------------------------------------------------------------------------
| Reserves                                    |        26,133 |         26,133 |
--------------------------------------------------------------------------------
| Retained earnings                           |       108,722 |         67,949 |
--------------------------------------------------------------------------------
| Net profit (loss) for the period            |       -18,947 |         40,773 |
--------------------------------------------------------------------------------
| Currency translation differences            |        -7,165 |          8,131 |
--------------------------------------------------------------------------------
| Total equity attributable to equity holders |       295,192 |        329,435 |
| of the parent company                       |               |                |
--------------------------------------------------------------------------------
| Minority interest                           |         3,714 |          9,911 |
--------------------------------------------------------------------------------
| TOTAL EQUITY                                |       298,906 |        339,346 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY                |       781,403 |        656,357 |
--------------------------------------------------------------------------------


CONSOLIDATED BALANCE SHEET                                                      
(unaudited, in EUR thousand)                                                    
--------------------------------------------------------------------------------
|                                             |    31.12.2008 |     31.12.2007 |
--------------------------------------------------------------------------------
| ASSETS                                      |               |                |
--------------------------------------------------------------------------------
| Current assets                              |               |                |
--------------------------------------------------------------------------------
| Cash and bank                               |           554 |          2,013 |
--------------------------------------------------------------------------------
| Trade and other receivables                 |         6,287 |          7,258 |
--------------------------------------------------------------------------------
| Inventories                                 |        18,434 |         14,105 |
--------------------------------------------------------------------------------
| Non-current assets held for sale            |             0 |             32 |
--------------------------------------------------------------------------------
| Total current assets                        |        25,275 |         23,408 |
--------------------------------------------------------------------------------
| Non-current assets                          |               |                |
--------------------------------------------------------------------------------
| Deferred income tax asset                   |           355 |            377 |
--------------------------------------------------------------------------------
| Other non-current assets                    |           390 |            732 |
--------------------------------------------------------------------------------
| Investment property                         |         8,570 |            719 |
--------------------------------------------------------------------------------
| Property, plant and equipment               |        11,541 |         12,980 |
--------------------------------------------------------------------------------
| Intangible assets                           |         3,809 |          3,733 |
--------------------------------------------------------------------------------
| Total non-current assets                    |        24,666 |         18,541 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                                |        49,941 |         41,949 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES                      |               |                |
--------------------------------------------------------------------------------
| Current liabilities                         |               |                |
--------------------------------------------------------------------------------
| Borrowings                                  |         6,648 |          6,402 |
--------------------------------------------------------------------------------
| Trade and other payables                    |        13,286 |          8,268 |
--------------------------------------------------------------------------------
| Total current liabilities                   |        19,935 |         14,670 |
--------------------------------------------------------------------------------
| Non-current liabilities                     |               |                |
--------------------------------------------------------------------------------
| Borrowings                                  |        10,762 |          5,389 |
--------------------------------------------------------------------------------
| Other liabilities                           |             0 |             69 |
--------------------------------------------------------------------------------
| Deferred income tax liability               |           140 |            133 |
--------------------------------------------------------------------------------
| Total non-current liabilities               |        10,902 |          5,591 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES                           |        30,837 |         20,261 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY                                      |               |                |
--------------------------------------------------------------------------------
| Share capital at par value                  |        11,916 |         11,916 |
--------------------------------------------------------------------------------
| Reserves                                    |         1,670 |          1,670 |
--------------------------------------------------------------------------------
| Retained earnings                           |         6,949 |          4,343 |
--------------------------------------------------------------------------------
| Net profit (loss) for the period            |        -1,211 |          2,606 |
--------------------------------------------------------------------------------
| Currency translation differences            |          -458 |            520 |
--------------------------------------------------------------------------------
| Total equity attributable to equity holders |        18,866 |         21,055 |
| of the parent company                       |               |                |
--------------------------------------------------------------------------------
| Minority interest                           |           237 |            633 |
--------------------------------------------------------------------------------
| TOTAL EQUITY                                |        19,104 |         21,688 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY                |        49,941 |         41,949 |
--------------------------------------------------------------------------------



Ülle Järv                                                                       
CFO, Member of the Management Board                                             
+372 630 2741                                                                   

Further information:                                                            
Triin Palge                                                                     
Head of Investor Relations                                                      
+372 630 2886                                                                   
triin.palge@baltikagroup.com