PERFORMANCE IN BRIEF The second quarter of 2010 was the first time in the past two years when Baltika Group succeeded in earning a positive EBITDA of 4.1 million kroons (0.3 million euros). The corresponding figure for the second quarter of 2009 was negative at 31.3 million kroons (2.0 million euros). The Group's retail system ended the second quarter with a profit of 16 million kroons (1.0 million euros) (Q2 2009: a loss of 5.0 million kroons/0.31 million euros). In the first half of 2010, Baltika continued facing up to the challenges brought about by the economic crisis, focusing mainly on achieving two main goals: - exploiting the crisis as an opportunity for streamlining the Group's business model and - strengthening its financial position that had been severely weakened by the crisis. Management believes that a successful implementation of the financial strengthening package will secure the Group with a sustainable financial position until the end of the economic crisis. Baltika's strategy for 2010-2014, developed in partnership with the international strategy consultancy Roland Berger, affirms the sustainability of the Group's business model, forecasting an average corporate growth rate of 9% per year until 2014. As part of the financial strengthening package, the Group has: - disposed of some non-core assets (in Q1 an industrial property at Ahtme, at the end of March a coat manufacturing operation in Rakvere, and in Q2 a manufacturing property in Rakvere and the MasCara and Herold brands); - conducted negotiations with suppliers for the grant of more favourable settlement terms and price concessions; - conducted negotiations with the banks in order to restructure the existing loan portfolio; - increased share capital by issuing additional shares. In June, the annual general meeting approved a share issue that increased share capital by 8,850,000 shares, raising 106.2 million kroons (6.8 million euros) for the Group. The second quarter brought a sales revival to several of Baltika's retail markets, improvements to the Group's gross margins and consolidation of the Group's financial position. Baltika ended the second quarter with the smallest sales decrease since the beginning of the crisis - revenue dropped by 8% year-over-year. The shortfall in sales has been diminishing on a quarterly basis: Q3 2009 -33%, Q4 2009 -28%, Q1 2010 -20% and Q2 2010 -8%. Moreover, since May several of Baltika's retail markets have shown signs of recovery. Within the last two months of the quarter, the Group's Estonian (domestic) and Russian sales grew by 9.5% and 10% respectively (on a cumulative basis) while in Latvia and Ukraine the level of the previous year was achieved. Baltika ended the second quarter of 2010 with revenue of 197.0 million kroons (12.6 million euros), an 8% decrease year-over-year. Second quarter retail sales dropped by 6.6% year-over-year. The gross margin for the second quarter was 56% (Q2 2009: 49%) against 46% for the first quarter. Profitability has improved thanks to better inventory management, more favourable purchasing margins and smaller discounts in all markets. Since the beginning of the year, the Group has closed nine and opened four stores. The retail space operated by the Group is, on average, 5% smaller than in the first half of 2009. In terms of brands, Monton continued to be the main source of retail revenue throughout the first half of 2010. The only brand that has been able to post growth during the economic crisis is Ivo Nikkolo whose retail sales for the first half of 2010 grew by 14% year-over-year. Compared with the first half of 2009, the Group's six-month operating expenses decreased by 40.5 million kroons (2.6 million euros) - distribution expenses dropping by 39.9 million kroons (2.6 million euros) and administrative expenses by 0.6 million kroons (0.04 million euros). The corresponding downshifts for the second quarter were 17.2 million kroons (1.1 million euros) and 0.3 million kroons (0.02 million euros). In the second quarter, the average retail space operated by Baltika was 8% smaller than in the same period in 2009. The Group's net loss for the second quarter was 13.8 million kroons (0.9 million euros), which is 21.0 million kroons (1.4 million euros) less than the loss incurred in the second quarter of 2009 and 18.1 million kroons (1.1 million euros) less than the loss for the first quarter. For the first time over the past two years, the Group's quarterly EBITDA was positive at 4.1 million kroons (0.3 million euros). In the first six months of 2010, headcount decreased by 177 - from 1697 to 1520 people. Downsizing was the most extensive in manufacturing and retailing where the Group was forced to release 95 and 81 people respectively. In conclusion, we believe that we have put our most challenging season behind us. We are confident that the decisions required for adapting have been made and their implementation will succeed. In the new season, we shall again focus on our core business - creating strong collections, enhancing customer service and streamlining our business processes. To improve our business model, we involved in the strategic planning process the international strategy consultancy Roland Berger. According to Baltika's corporate strategy for 2010-2014, developed in cooperation with the consultants, the Group's average annual growth rate until 2014 will be 9% and by 2014 revenue should rise to 1.13 billion kroons. In addition to the customers' increasing purchasing power and growth in consumer spending, sales growth will be underpinned by our brands' increasing focus on the needs of their target customers. In order to improve profitability, Baltika will continue controlling its market and store portfolios and brand development. REVENUE Revenue by segment -------------------------------------------------------------------------------- | EEK million | Q2 2010 | Q2 2009 | +/- | 6m 2010 | 6m 2009 | +/- | -------------------------------------------------------------------------------- | Retail | 187,6 | 207,5 | -9,6% | 342,9 | 401,0 | -14,5% | -------------------------------------------------------------------------------- | Wholesale | 7,2 | 6,3 | 14,3% | 23,3 | 33,6 | -30,7% | -------------------------------------------------------------------------------- | Other | 2,2 | 0,3 | 633,3% | 3,7 | 0,4 | 825% | -------------------------------------------------------------------------------- | Total | 197,0 | 214,1 | -8,0% | 369,9 | 435,0 | -15,0% | -------------------------------------------------------------------------------- EUR 1 = EEK 15.6466 RETAIL Owing to the economic downturn and the ensuing shrinkage in consumption, in the first half of 2010 the Group's Baltic and Eastern European retail revenues decreased by 15% and 7% year-over-year respectively. However, in quarterly terms the situation has improved - in the second quarter the downward trend decelerated in both regions. In Eastern Europe, recovery was reinforced by the strengthening of the rouble and the hryvna, particularly in the second quarter. Retail sales by market -------------------------------------------------------------------------------- | EEK million | 6m 2010 | 6m 2009 | +/- | Percentage, 6m | | | | | | 2010 | -------------------------------------------------------------------------------- | Estonia | 89,0 | 90,4 | -2% | 26% | -------------------------------------------------------------------------------- | Russia | 75,5 | 75,3 | 0% | 22% | -------------------------------------------------------------------------------- | Lithuania | 70,9 | 95,7 | -26% | 21% | -------------------------------------------------------------------------------- | Ukraine | 52,5 | 63,0 | -17% | 15% | -------------------------------------------------------------------------------- | Latvia | 43,9 | 53,3 | -18% | 13% | -------------------------------------------------------------------------------- | Poland | 11,1 | 15,5 | -28% | 3% | -------------------------------------------------------------------------------- | Czech Republic | 0,0 | 7,8 | -100% | 0% | -------------------------------------------------------------------------------- | Total | 342,9 | 401,0 | -14% | 100% | -------------------------------------------------------------------------------- EUR 1 = EEK 15.6466 BRANDS In terms of brands, the main retail revenue contributor was Monton whose sales for the first six months of 2010 accounted for 52% i.e. 179 million kroons (11.4 million euros) of the Group's total retail revenue, a 17% decrease year-over-year. Mosaic contributed 34% of retail revenue with sales of 116 million kroons (7.4 million euros), a 16% decrease year-over-year. The performance of both brands was influenced by the closure of loss-generating stores, which is why the decline in sales efficiency (sales/sq m) was considerably smaller: Monton -7% and Mosaic -9%. The sales of Baltman dropped by 7% to 25 million kroons (1.6 million euros). The only brand that was able to achieve year-over-year sales growth in the first half-year was Ivo Nikkolo (+14%) whose contribution was 22 million kroons (1.4 million euros). STORES AND SALES AREA At the end of June 2010, Baltika Group had 128 stores with a total sales area of 25,730 square metres. In the first half-year, the Group closed nine stores - four in Russia, three in Ukraine, one in Lithuania, and one in Estonia, and opened four stores - one in Russia, one in Latvia, and two in Estonia. Compared with the same period in 2009, the number of stores operated by Baltika Group decreased by 16 and the average sales area shrank by 5%. Baltika will continue closing non-profitable stores also in the second half of 2010. Stores by market -------------------------------------------------------------------------------- | | 30.06.2010 | 30.06.2009 | -------------------------------------------------------------------------------- | Lithuania | 35 | 35 | -------------------------------------------------------------------------------- | Estonia | 31 | 33 | -------------------------------------------------------------------------------- | Russia | 22 | 30 | -------------------------------------------------------------------------------- | Ukraine | 20 | 22 | -------------------------------------------------------------------------------- | Latvia | 15 | 16 | -------------------------------------------------------------------------------- | Poland | 5 | 6 | -------------------------------------------------------------------------------- | Czech Republic | 0 | 2 | -------------------------------------------------------------------------------- | Total stores | 128 | 144 | -------------------------------------------------------------------------------- | Total sales area, sqm | 25 730 | 29 041 | -------------------------------------------------------------------------------- WHOLESALE Wholesale revenue for the first half of 2010 amounted to 23.3 million kroons (1.5 million euros), a 31% decrease compared with the same period in 2009. In the second quarter, wholesale revenue grew by 14%. Cooperation with Peek & Cloppenburg, one of the leading European department store chains, continues successfully. In the first half of the year our Mosaic collection was carried by 30 department stores and in the second half of the year the number of department stores carrying Mosaic products will rise to 44. The volume of additional orders placed is approximately twice as large as in the first half-year. EARNINGS AND MARGINS Although the Group's performance in the second quarter of 2010 continued to be influenced by the economic downturn that has weakened the consumers' purchasing power and sentiment, some of the Group's retail markets showed the first signs of recovery. Compared with the same period in 2009, the Group's revenue for the second quarter of 2010 decreased by 17.1 million kroons (1.1 million euros) i.e. 8%. In the first quarter, the year-over-year revenue decline was 48.2 million kroons (3.1 million euros) i.e. 22%. The Group's gross margins improved thanks to better discount planning and inventory management. In the second quarter, against the backdrop of smaller sales Baltika was able to increase its gross profit by 5.1 million kroons (0.3 million euros) year-over-year. Gross margin for the first six months was 51.4% against 46% for the same period in 2009. The Group's performance in the first six months of 2010 was positively influenced by exchange rate fluctuations that were favourable for the Group. According to the rates of the Bank of Estonia, compared with 2009 the average exchange rates for the first six months strengthened as follows: the Russian rouble 11%, the Polish zloty 8% and the Ukrainian hryvna 6%. The fluctuations affected both revenue and operating expenses. The positive impact on revenue was 8.6 million kroons (0.6 million euros). However, this was lessened by a 6.8 million kroon (0.4 million euro) increase in operating expenses. The Group's distribution and administrative expenses for the first six months decreased by 40.5 million kroons (1.1 million euros) i.e. 14.4% year-over-year while the average sales area declined by 5%. Average store operating expenses per square metre decreased by 7% year-over-year - rental expenses declining by 13% and personnel expenses by 4%. The Group continues negotiations with a view to achieving more favourable rental terms from shopping malls. Although in the first quarter the retail system (at the level of stores) incurred a moderate loss, the strong second-quarter results in the Baltic region and Ukraine allowed the retail system to post a profit of 3.2 million kroons (0.2 million euros).The Group's retail system ended the second quarter with a profit of 16 million kroons (1.0 million euros) (Q2 2009: a loss of 5.0 million kroons/0.31 million euros).In the first six months of 2009, the retail system incurred a loss of 40.5 million kroons (2.6 million euros). The personnel expenses of the Group's Estonian production entities decreased by 35% i.e. 12.6 million kroons (0.8 million euros) year-over-year. The decline is attributable to downsizing and a decrease in the workload. Baltika ended the second quarter of 2010 with an operating loss of 8.0 million kroons (0.5 million euros), which is 25.4 million kroons (1.6 million euros) less than in the same period in 2009. For the first time during the past two years, the quarterly EBITDA was again positive at 4.1 million kroons (0.3 million euros). Although the Group's interest-bearing liabilities have decreased, interest expense for the first six months of 2010 grew by 59% year-over-year to 9.3 million kroons (0.6 million euros) on account of a rise in loan margins and the average loan balance. The Group's net loss for the second quarter was 13.8 million kroons (0.9 million euros), which was 21.0 million kroons (1.3 million euros) less than in the same period in 2009 and 18.1 million kroons (1.2 million euros) less than in the first quarter of 2010. Altogether, Baltika's net loss for the first six months of 2010 (after tax and the non-controlling interest) amounted to 45.8 million kroons (2.9 million euros). In the same period in 2009, the Group incurred a net loss of 97.4 million kroons (6.2 million euros). FINANCIAL POSITION One of the main targets of 2010 is to strengthen the Group's financial position and liquidity. The package for strengthening the Group's financial position consists of four components: - disposing of assets not directly related to the core business (in Q1 the Group divested an industrial property at Ahtme, at the end of March the Group sold the coat manufacturing operation in Rakvere and in Q2 the Group divested a manufacturing property in Rakvere and the MasCara and Herold brands); - negotiating better settlement terms and price concessions from the suppliers; - restructuring the existing loan portfolio through negotiations with banks (in progress); - increasing the share capital through a share issue. In June, the annual general meeting approved an additional share issue that increased share capital by 8,850,000 shares, raising 106.2 million kroons (6.8 million euros) for the Group. Management believes that the implementation of the above package will ensure the sustainability of Baltika's financial position until the end of the economic crisis. As at 30 June 2010, Baltika's consolidated assets totalled 685.7 million kroons (43.8 million euros), a 16.3 million kroon (1.0 million euro) decrease compared with the end of the previous year. Compared with 31 December 2009, trade and other receivables increased by 17.0 million kroons (1.1 million euros) to 71.9 million kroons (4.6 million euros). At 30 June, inventories totalled 168.9 million kroons (10.8 million euros), 10.3% (19.3 million kroons/1.2 million euros) down from the beginning of the year. At the same time, the average retail space declined by 5%. For the most part, the funds raised through the additional share issue were and will be used for settling trade payables and securing timely delivery of goods for the autumn season. Compared with the beginning of the year, trade and other payables decreased by 46.6 million kroons (3.0 million euros) to 112.8 million kroons (7.2 million euros). At the end of the first half-year, the Group's borrowings totalled 327.2 million kroons (20.9 million euros), including bank loans of 312.2 million kroons (20.0 million euros) and finance lease liabilities of 7.9 million kroons (0.5 million euros). Compared with the beginning of the year, the debt burden has decreased by 11.1 million kroons (0.7 million euros). The Group's net debt (interest-bearing liabilities less cash and bank balances) to equity ratio has improved thanks to the additional funds raised through the share issue and the disposal of some non-core assets. At 30 June 2010, the ratio was 117.8% (31 December 2009: 183.1%). INVESTMENT In the first six months of 2010, the Group made capital investments of 1.8 million kroons (0.12 million euros) (6 months 2009: 86.4 million kroons/5.5 million euros). Investments in the retail system totalled 1.5 million kroons (0.1 million euros) and other investments amounted to 0.3 million kroons (0.02 million euros). The main investments of the second half-year will be directed at the upgrade of the Group's IT processes and the implementation of the euro. PEOPLE At the end of June 2010, Baltika Group employed 1,520 (30 June 2009: 1,816) people, 848 (979) of them in the retail system, 485 (645) in manufacturing and 187 (192) at the head office. People employed outside Estonia accounted for 649 (768) i.e. 42% of the total number of staff. Compared with the beginning of the year, the headcount has decreased by 177. The period's average number of staff was 1,602 (6 months 2009: 1,873). The Group's employee remuneration expenses for the first half of 2010 totalled 82.0 million kroons/5.3 million euros (6 months 2009: 104.2 million kroons/6.7 million euros). The remuneration of the members of the supervisory council and management board amounted to 2.0 million kroons/128 thousand euros (6 months 2009: 1.9 million kroons/121 thousand euros). ANNUAL GENERAL MEETING The annual general meeting of Baltika's shareholders that convened on 21 June 2010 approved the company's annual report for 2009 as well as management's proposal for covering the loss. The general meeting resolved that the company's net loss for the year ended 31 December 2009 of 159,104 thousand kroons (10,169 thousand euros) should be covered with retained earnings. In addition, the general meeting resolved that the holders of preferred shares should be paid a dividend from retailed earnings in accordance with the terms and conditions provided in the articles of association. The annual general meeting appointed AS PricewaterhouseCoopers as the auditor of the company's financial statements for 2010 and Edoardo Miroglio and Jaakko Sakari Mikael Salmelini as new members of the company's management board. The annual general meeting also resolved to increase the share capital of AS Baltika by issuing 8,850,000 additional registered ordinary shares with a par value of 10 kroons each at a premium of 2 kroons per share. It was decided that the shares would be issued for the following investors in conformity with Section 12 Subsection 2 Clause 3 of the Securities Market Act: DCF Fund (II) Baltic states 3,250,000 ordinary shares E.Miroglio S.A. 3,000,000 ordinary shares East Capital Baltic Fund 2,600,000 ordinary shares TOTAL 8,850,000 ordinary shares The share capital of AS Baltika was increased by 88,500,000 kroons (5,656,181 euros) to 314,948,500 kroons (20,128,878 euros). The shares were subscribed for on 21 June 2010. The shares were paid for with monetary contributions of 70,200,000 kroons (4,486,598 euros). E.Miroglio S.A. paid for 3,000,000 ordinary shares with a non-monetary contribution consisting of a receivable of 36,000,000 kroons (2,300,819 euros) arising from a loan agreement signed between E.Miroglio S.A. and the company on 3 May 2010. E.Miroglio S.A. paid for 3,000,000 ordinary shares by offsetting a loan receivable of 36,000,000 (2,300,819 euros) on 21 June 2010. The company's management board measured the value of the non-monetary contribution in accordance with Article 4.4.3 of the articles of association and the valuation was checked by the company's auditors from AS PricewaterhouseCoopers. The shareholders waived their pre-emptive right to subscribe for the new shares. The new shares entitle the holder to a dividend from the financial year in which the share capital was increased. -------------------------------------------------------------------------------- | KEY FIGURES OF THE GROUP (6 months | | | | | 2010) | | | | -------------------------------------------------------------------------------- | | 30.06.2010 | 30.06.2009 | +/- | -------------------------------------------------------------------------------- | Revenue (EEK million) | 369,9 | 435,0 | -15,0% | -------------------------------------------------------------------------------- | Retail sales (EEK million) | 342,9 | 401,0 | -14,5% | -------------------------------------------------------------------------------- | Share of retail sales in revenue | 93% | 92% | | -------------------------------------------------------------------------------- | Number of stores | 128 | 144 | -11,1% | -------------------------------------------------------------------------------- | Sales area (sqm) | 25 730 | 29 041 | -11,4% | -------------------------------------------------------------------------------- | Number of employees (end of | 1 520 | 1 816 | -16,3% | | period) | | | | -------------------------------------------------------------------------------- | Gross margin | 51,0% | 46,0% | | -------------------------------------------------------------------------------- | Operating margin | -10,6% | -20,3% | | -------------------------------------------------------------------------------- | EBT margin | -12,2% | -22,4% | | -------------------------------------------------------------------------------- | Net margin | -12,3% | -22,4% | | -------------------------------------------------------------------------------- | Current ratio | 1,1 | 0,9 | 22,2% | -------------------------------------------------------------------------------- | Inventory turnover | 4,25 | 3,95 | 7,6% | -------------------------------------------------------------------------------- | Debt to equity ratio | 130,5% | 186,6% | | -------------------------------------------------------------------------------- | Return on equity | -60,8% | -54,7% | | -------------------------------------------------------------------------------- | Return on assets | -15,3% | -20,1% | | -------------------------------------------------------------------------------- EUR 1 = EEK 15.6466 Underlying formulas Gross margin = (Revenue - Cost of sales)/ Revenue Operating margin = Operating profit / Revenue EBT margin = Profit before income tax / Revenue Net margin = Net profit (attributable to the parent) / Revenue Current ratio = Current assets / Current liabilities Inventory turnover ratio = Revenue / Average inventories* Debt to equity ratio = Interest-bearing liabilities / Equity Return on equity = Net profit (attributable to the parent)/ Average equity* Return on assets = Net profit (attributable to the parent)/ Average total assets* *12 months' average -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF COMPREHENSIVE | | | | | INCOME | | | | -------------------------------------------------------------------------------- | (unaudited, in EEK thousand) | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Q2 2010 | Q2 2009 | 6m 2010 | 6m 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Revenue | 197 004 | 214 032 | 369 854 | 435 049 | -------------------------------------------------------------------------------- | Cost of goods sold | -87 056 | -109 153 | -179 729 | -235 244 | -------------------------------------------------------------------------------- | Gross profit | 109 948 | 104 879 | 190 125 | 199 805 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Distribution costs | -111 135 | -128 353 | -219 856 | -259 735 | -------------------------------------------------------------------------------- | Administrative and general | -9 924 | -10 227 | -20 977 | -21 561 | | expenses | | | | | -------------------------------------------------------------------------------- | Other operating income | 4 665 | 24 | 13 842 | 35 | -------------------------------------------------------------------------------- | Other operating expenses | -1 543 | 267 | -2 475 | -7 052 | -------------------------------------------------------------------------------- | Operating profit (loss) | -7 989 | -33 410 | -39 341 | -88 508 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finance income | 342 | 10 | 3 633 | 16 | -------------------------------------------------------------------------------- | Finance costs | -5 767 | -1 579 | -9 367 | -8 878 | -------------------------------------------------------------------------------- | Profit (loss) before income tax | -13 414 | -34 979 | -45 075 | -97 370 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income tax | -441 | -81 | -493 | -232 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net profit (loss) | -13 855 | -35 060 | -45 568 | -97 602 | -------------------------------------------------------------------------------- | Profit (loss) attributable to: | | | | | -------------------------------------------------------------------------------- | Net profit (loss) attributable | -13 815 | -34 821 | -45 770 | -97 384 | | to equity holders of the parent | | | | | | company | | | | | -------------------------------------------------------------------------------- | Net profit (loss) attributable | -40 | -239 | 202 | -218 | | to non-controlling interests | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other comprehensive income | | | | | | (loss) | | | | | -------------------------------------------------------------------------------- | Currency translation | -2 364 | 1 150 | -1 910 | -5 995 | | differences | | | | | -------------------------------------------------------------------------------- | Total comprehensive income | -16 219 | -33 910 | -47 478 | -103 597 | | (loss) | | | | | -------------------------------------------------------------------------------- | Comprehensive income (loss) | | | | | | attributable to: | | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | -16 179 | -33 670 | -47 680 | -102 167 | | company | | | | | -------------------------------------------------------------------------------- | Non-controlling interests | -40 | -240 | 202 | -1 430 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Basic earnings per share, EEK | -0,74 | -1,87 | -2,45 | -5,22 | -------------------------------------------------------------------------------- | Diluted earnings per share, EEK | -0,74 | -1,87 | -2,45 | -5,22 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF COMPREHENSIVE | | | | | INCOME | | | | -------------------------------------------------------------------------------- | (unaudited, in EUR thousand) | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Q2 2010 | Q2 2009 | 6m 2010 | 6m 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Revenue | 12 591 | 13 679 | 23 638 | 27 805 | -------------------------------------------------------------------------------- | Cost of goods sold | -5 564 | -6 976 | -11 487 | -15 035 | -------------------------------------------------------------------------------- | Gross profit | 7 027 | 6 703 | 12 151 | 12 770 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Distribution costs | -7 103 | -8 203 | -14 051 | -16 600 | -------------------------------------------------------------------------------- | Administrative and general | -634 | -654 | -1 341 | -1 378 | | expenses | | | | | -------------------------------------------------------------------------------- | Other operating income | 298 | 2 | 885 | 2 | -------------------------------------------------------------------------------- | Other operating expenses | -99 | 17 | -158 | -451 | -------------------------------------------------------------------------------- | Operating profit (loss) | -511 | -2 135 | -2 514 | -5 657 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finance income | 22 | 1 | 232 | 1 | -------------------------------------------------------------------------------- | Finance costs | -369 | -101 | -599 | -567 | -------------------------------------------------------------------------------- | Profit (loss) before income | -857 | -2 236 | -2 881 | -6 223 | | tax | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income tax | -28 | -5 | -32 | -15 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net profit (loss) | -885 | -2 241 | -2 912 | -6 238 | -------------------------------------------------------------------------------- | Profit (loss) attributable to: | | | | | -------------------------------------------------------------------------------- | Net profit (loss) attributable | -883 | -2 225 | -2 925 | -6 224 | | to equity holders of the | | | | | | parent company | | | | | -------------------------------------------------------------------------------- | Net profit (loss) attributable | -3 | -15 | 13 | -14 | | to non-controlling interests | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other comprehensive income | | | | | | (loss) | | | | | -------------------------------------------------------------------------------- | Currency translation | -151 | 73 | -122 | -383 | | differences | | | | | -------------------------------------------------------------------------------- | Total comprehensive income | -1 037 | -2 167 | -3 034 | -6 621 | | (loss) | | | | | -------------------------------------------------------------------------------- | Comprehensive income (loss) | | | | | | attributable to: | | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | -1 034 | -2 152 | -3 047 | -6 530 | | company | | | | | -------------------------------------------------------------------------------- | Non-controlling interests | -3 | -15 | 13 | -91 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Basic earnings per share, EUR | -0,05 | -0,12 | -0,16 | -0,33 | -------------------------------------------------------------------------------- | Diluted earnings per share, | -0,05 | -0,12 | -0,16 | -0,33 | | EUR | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF FINANCIAL | | | | POSITION | | | -------------------------------------------------------------------------------- | (unaudited, in EEK thousand) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 30.06.2010 | 31.12.2009 | -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Cash and bank | 31 208 | 6 024 | -------------------------------------------------------------------------------- | Trade and other receivables | 71 899 | 54 932 | -------------------------------------------------------------------------------- | Inventories | 168 854 | 188 181 | -------------------------------------------------------------------------------- | Total current assets | 271 961 | 249 137 | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Deferred income tax asset | 16 488 | 16 488 | -------------------------------------------------------------------------------- | Other non-current assets | 7 479 | 7 728 | -------------------------------------------------------------------------------- | Investment property | 103 294 | 103 294 | -------------------------------------------------------------------------------- | Property, plant and equipment | 223 401 | 263 165 | -------------------------------------------------------------------------------- | Intangible assets | 63 056 | 62 133 | -------------------------------------------------------------------------------- | Total non-current assets | 413 718 | 452 808 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 685 679 | 701 945 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Borrowings | 126 955 | 122 942 | -------------------------------------------------------------------------------- | Trade and other payables | 112 768 | 159 375 | -------------------------------------------------------------------------------- | Total current liabilities | 239 723 | 282 317 | -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Borrowings | 200 252 | 232 942 | -------------------------------------------------------------------------------- | Other liabilities | 411 | 114 | -------------------------------------------------------------------------------- | Deferred income tax liability | 0 | 0 | -------------------------------------------------------------------------------- | Total non-current liabilities | 200 663 | 233 056 | -------------------------------------------------------------------------------- | TOTAL LIABILITIES | 440 386 | 515 373 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY | | | -------------------------------------------------------------------------------- | Share capital at par value | 314 949 | 226 449 | -------------------------------------------------------------------------------- | Share premium | 18 748 | 1 049 | -------------------------------------------------------------------------------- | Reserves | 43 567 | 43 567 | -------------------------------------------------------------------------------- | Retained earnings | -77 617 | 81 487 | -------------------------------------------------------------------------------- | Net profit (loss) for the period | -45 770 | -159 104 | -------------------------------------------------------------------------------- | Currency translation differences | -11 320 | -9 410 | -------------------------------------------------------------------------------- | Total equity attributable to equity holders | 242 557 | 184 038 | | of the parent company | | | -------------------------------------------------------------------------------- | Non-controlling interest | 2 736 | 2 534 | -------------------------------------------------------------------------------- | TOTAL EQUITY | 245 293 | 186 572 | -------------------------------------------------------------------------------- | TOTAL LIABILITIES AND EQUITY | 685 679 | 701 945 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF FINANCIAL | | | | POSITION | | | -------------------------------------------------------------------------------- | (unaudited, in EUR thousand) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 30.06.2010 | 31.12.2009 | -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Cash and bank | 1 995 | 385 | -------------------------------------------------------------------------------- | Trade and other receivables | 4 595 | 3 511 | -------------------------------------------------------------------------------- | Inventories | 10 792 | 12 027 | -------------------------------------------------------------------------------- | Total current assets | 17 381 | 15 923 | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Deferred income tax asset | 1 054 | 1 054 | -------------------------------------------------------------------------------- | Other non-current assets | 478 | 494 | -------------------------------------------------------------------------------- | Investment property | 6 602 | 6 602 | -------------------------------------------------------------------------------- | Property, plant and equipment | 14 278 | 16 819 | -------------------------------------------------------------------------------- | Intangible assets | 4 030 | 3 971 | -------------------------------------------------------------------------------- | Total non-current assets | 26 441 | 28 940 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 43 823 | 44 862 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Borrowings | 8 114 | 7 857 | -------------------------------------------------------------------------------- | Trade and other payables | 7 207 | 10 186 | -------------------------------------------------------------------------------- | Total current liabilities | 15 321 | 18 043 | -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Borrowings | 12 798 | 14 888 | -------------------------------------------------------------------------------- | Other liabilities | 26 | 7 | -------------------------------------------------------------------------------- | Deferred income tax liability | 0 | 0 | -------------------------------------------------------------------------------- | Total non-current liabilities | 12 825 | 14 895 | -------------------------------------------------------------------------------- | TOTAL LIABILITIES | 28 146 | 32 938 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY | | | -------------------------------------------------------------------------------- | Share capital at par value | 20 129 | 14 473 | -------------------------------------------------------------------------------- | Share premium | 1 198 | 67 | -------------------------------------------------------------------------------- | Reserves | 2 784 | 2 784 | -------------------------------------------------------------------------------- | Retained earnings | -4 961 | 5 208 | -------------------------------------------------------------------------------- | Net profit (loss) for the period | -2 925 | -10 169 | -------------------------------------------------------------------------------- | Currency translation differences | -723 | -601 | -------------------------------------------------------------------------------- | Total equity attributable to equity holders | 15 502 | 11 762 | | of the parent company | | | -------------------------------------------------------------------------------- | Non-controlling interest | 175 | 162 | -------------------------------------------------------------------------------- | TOTAL EQUITY | 15 677 | 11 924 | -------------------------------------------------------------------------------- | TOTAL LIABILITIES AND EQUITY | 43 823 | 44 862 | -------------------------------------------------------------------------------- Ülle Järv CFO, Member of the Management Board +372 630 2731