Wulff Group Plc’s Interim Report for January 1

WULFF GROUP PLC

INTERIM REPORT August 6, 2013 at 9:00 A.M.

WULFF GROUP PLC’S INTERIM REPORT FOR JANUARY 1 – JUNE 30, 2013

Market Situation Remained Difficult, Net Sales and Operating Result below last year’s level

Net sales totalled EUR 43.5 million (EUR 45.4 million) in January-June and EUR 20.7 million (EUR 22.0 million) in the second quarter.
In January-June, EBITDA was EUR -0.08 million (EUR 0.84 million) being -0.2 percentages (1.9 %) of net sales. In the second quarter, EBITDA was EUR -0.49 million (EUR 0.36 million) being -2.3 percentages (1.7 %) of net sales.
In January-June, operating result (EBIT) was EUR -0.65 million (EUR 0.32 million) being -1.5 percentages (0.7 %) of net sales. In the second quarter, operating result (EBIT) was EUR -0.77 million (EUR 0.11 million).
Earnings per share (EPS) were EUR -0.11 (EUR 0.03) in January-June and EUR -0.12 (EUR 0.00) in the second quarter.
Equity-to-assets ratio was 42.6 percentages (December 31, 2012: 44.3 %).
Equity per share amounted to EUR 2.30 (December 31, 2012: EUR 2.51).
In spring 2013 Wulff established its fair service sales in the Swedish markets.

GROUP’S NET SALES AND RESULT PERFORMANCE

Net sales totalled EUR 43.5 million (EUR 45.4 million) in January-June and EUR 20.7 million (EUR 22.0 million) in the second quarter. Net sales decreased by four percentages from last year. In January-June, EBITDA was EUR -0.08 million (EUR 0.84 million) being -0.2 percentages (1.9 %) of net sales. In the second quarter, EBITDA was EUR -0.49 million (EUR 0.36 million) being -2.3 percentages (1.7 %) of net sales. In January-June, operating result (EBIT) was EUR -0.65 million (EUR 0.32 million) being -1.5 percentages (0.7 %) of net sales. In the second quarter, operating result (EBIT) was EUR -0.77 million (EUR 0.11 million). The general economic situation remained difficult which impacted the demand in the office supply markets. The Group continues to review its expense structure and optimise its operations to improve the profitability of its businesses.

Wulff Group’s CEO Heikki Vienola: “The difficult market situation has decreased the demand for our products and services. It is probable that we will not reach the operating profit level of year 2012. Large companies and groups adjust their operations with personnel layoffs and diminishing their operations, which has had a direct impact on our sales. It has been essential to react quickly to the market situation and we have adjusted our own operations and cost structure. Our organizational changes and cost saving programs will affect our result positively during the second half of the year. We strongly believe that focusing on key issues brings results. Following our strategy, we focus on constant improvement of Wulff’s competitiveness and the most cost-conscious operations. When the markets get more active we are in a good position as the industry pioneer and the most professional partner to serve the customers as broadly and versatile as possible. In the times of a weak general economy, the customers seek especially for partners with cost-saving solutions – and this is something Wulff can offer. For instance, our web shop Wulffinkulma.fi is a quick and cost-efficient purchasing channel of office products for small and mid-sized companies as well as consumers.”

In January-June the financial income and expenses totalled (net) EUR -0.29 million (EUR -0.04 million) including dividend income of EUR 0.01 million (EUR 0.02 million), interest expenses of EUR 0.09 million (EUR 0.13 million) and mainly currency-related other financial items (net) EUR -0.21 million (EUR +0.07 million). In the second quarter the financial income and expenses totalled (net) EUR -0.24 million (EUR -0.05 million).

The result before taxes was EUR -0.94 million (EUR 0.28 million) in January-June and EUR -1.01 million (EUR 0.06 million) in the second quarter. The net result after taxes was EUR -0.72 million (EUR 0.23 million) in January-June and EUR -0.77 million (EUR 0.05 million) in the second quarter. Earnings per share (EPS) were EUR -0.11 (EUR 0.03) in January-June and EUR -0.12 (EUR 0.00) in the second quarter.

Return on investment (ROI) was -3.4 percentages (1.6 %) in January-June and -3.7 percentages (0.4 %) in the second quarter. Return on equity (ROE) was -4.2 percentages (1.3 %) in January-June and -4.5 percentages (0.3 %) in the second quarter.

CONTRACT CUSTOMERS DIVISION

The Contract Customers Division is the customer’s comprehensive partner in the field of office supplies, IT supplies, business and promotional gifts as well as international fair services. In January-June the division’s net sales totalled EUR 36.6 million (EUR 38.0 million) and operating result was EUR -0.03 (EUR 0.9 million). In the second quarter the net sales totalled EUR 17.1 million (EUR 18.4 million) and operating result was EUR -0.5 million (EUR 0.4 million). The general economic situation and the decrease in the products’ demand have led to the decrease in net sales.

International fair services are an even more significant part of Wulff’s business. In spring 2013 Wulff Entre established its fair service sales in the Swedish markets by opening its own operations in the Southern Sweden. Wulff Entre’s investments in sales and its development have resulted in both stronger customer relationships and an increase in clientele in Finland, Russia and Germany. Also in Sweden Wulff Entre has won new customers who have already given good feedback on Wulff Entre’s services and know-how. In 2013 Wulff Entre exports Finnish companies’ know-how to more than 30 countries. Wulff Entre is the market leader in its field in Finland and the customers have had a solid trust in Wulff Entre’s ability to find the right international venues for over 90 years already.

The net sales and profitability of Wulff’s Scandinavian operator Wulff Supplies AB have remained at a good level and the company has managed to attract new contract customers constantly. Today almost 50 percent of the Group’s net sales come from Scandinavia and Wulff’s position in the Scandinavian market continues to strengthen. Wulff Supplies serves the Group’s Scandinavian and pan-Nordic customers.

The Group’s webstore Wulffinkulma.fi has shown good growth and profit. According to the strategy, Wulff has developed the Wulff brand, its sales channels and its whole service range to be more versatile and ecological. Wulff stores serve locally small and mid-sized corporate customers, entrepreneurs and consumers. In summer 2013 Wulff Helsinki store moved to new premises in Konala, Helsinki. The new store is located along excellent traffic routes in a business centre which enables to attract plenty of new customers. This year for the first time, the stores exhibit the Group’s entire product range, Wulff’s Green products and recycling centres. The stores exhibit also seasonal business gifts.

Traditionally the Contract Customers Division’s result is affected by the cycles of the business and promotional gift market: the majority of the products are delivered and the majority of the annual profit is generated in the second and the last quarter of the year. The business and promotional gift markets have not recovered back to the previous years’ level. Wulff’s customers’ own cost-savings and efficiency improvement initiatives have impacted negatively the demand for the Group’s business and promotional gifts.

DIRECT SALES DIVISION

The Direct Sales Division aims to improve its customers’ daily operations with innovative products as well as the industry’s most professional personal and local service. In January-June the division’s net sales totalled EUR 6.9 million (EUR 7.4 million) and operating result was EUR -0.1 (EUR -0.1 million). In the second quarter the net sales totalled EUR 3.7 million (EUR 3.7 million) and operating result was EUR -0.04 (EUR 0.01 million).

The Division’s profitability is improved by concentrating on profitable product and service fields and by optimising the operations’ efficiency. Wulff invests strongly in the development of the product and service range and aims to increase the synergy of the purchasing operations by group-wide competitive bidding and cooperation. Unifying the sales support systems improve the sales operations.

Wulff’s sales growth is fuelled most importantly by the sales personnel. Successful recruiting affects especially the performance of Direct Sales. New sales personnel are being actively hunted by the recruitment professionals. Wulff’s own introduction and training programmes ensure that every sales person gets both a comprehensive starting training and further education on how to improve one’s own know-how. Wulff is prepared to employ even 100 new sales persons in Finland and in Scandinavia.

FINANCING, INVESTMENTS AND FINANCIAL POSITION

The cash flow from operating activities was EUR -1.6 million (EUR 0.4 million) in January-June and EUR 0.3 million (EUR 0.7 million) in the second quarter. Typically in this industry the result and cash flow are generated in the last quarter. A total of EUR 0.8 million less working capital was tied in the inventories than a year ago.

For its fixed asset investments the Group paid a net of EUR 0.51 million (EUR 0.32 million) in January-June and EUR 0.07 million (EUR 0.16 million) in the second quarter. The parent company shareholders were paid dividends of EUR 0.52 million (EUR 0.46 million) and the subsidiaries’ non-controlling shareholders were paid dividends of EUR 0.11 million (EUR 0.07 million). The Group paid EUR 0.03 million for the acquisition of non-controlling interests in Wulff Supplies AB to the subsidiary’s key person. The Group raised loans of net EUR 1.11 million (EUR 0.53 million, net) in January-June. Loans of EUR 0.17 million net (EUR 0.64 million net) were paid back in the second quarter.

In general the Group’s cash balance decreased by EUR 1.7 million in January-June (EUR -1.0 million). The Group’s bank and cash funds totalled EUR 2.7 million in the beginning of the year and EUR 1.1 million in the end of the reporting period.

In the end of June 2013 the Group’s equity-to-assets ratio was 42.6 percentages (December 31, 2012:
44.3 %). Equity attributable to the equity holders of the parent company amounted to EUR 2.30 per share (December 31, 2012: EUR 2.51).

SHARES AND SHARE CAPITAL

Wulff Group Plc’s share is listed on NASDAQ OMX Helsinki in the Small Cap segment under the Industrials sector. The company’s trading code is WUF1V. In the end of the reporting period the share was valued at EUR 1.77 (EUR 1.90) and the market capitalization of the outstanding shares totalled EUR 11.6 million (EUR 12.4 million).

In January-June 2013 no own shares were reacquired. As a part of Wulff Group’s key personnel’s share-based incentive plan introduced in February 2011, the Board of Directors decided in May 2013 to grant 6,000 treasury shares without compensation to the Group’s key person who may not transfer the shares during a restriction period of two years. In the end of June 2013, the Group held 79,000 (June 30, 2012: 85,000) own shares representing 1.2 percentage (1.3 %) of the total number and voting rights of Wulff shares. According to the Annual General Meeting’s authorisation on April 10, 2013, the Board of Directors decided in its organizing meeting to continue the acquisition of its own shares, by acquiring a maximum of 300.000 own shares by April 30, 2014.

PERSONNEL

In January-June 2013 the Group’s personnel totalled 321 (333) employees on average. In the end of June the Group had 315 (321) employees of which 118 (121) persons were employed in Sweden, Norway, Denmark or Estonia.

The majority, approximately 60 percentages, of the Group’s personnel works in sales operations and approximately 40 percentages of the employees work in sales support, logistics and administration. The personnel consists approximately half-and-half of men and women.

Wulff’s themes for 2013 are “Professional care for customers and personnel alike” and “Becoming the masters in giving and utilizing feedback”. Wulff has received plenty of positive feedback on the renewing of its training and development programs. The coaching-style leadership and the ‘100-percent-responsibility’ working attitude have a significant role in building a well-being, developing and successful organization. Wulff’s culture means that everyone understands the significance of their own work: each and everyone at Wulff can influence a customer’s unique Wulff experience in a positive way.

RISKS AND UNCERTAINTIES IN THE NEAR FUTURE

The demand for office supplies is still affected by the organizations’ personnel lay-offs and cost-saving initiatives made during the economic downturn. The general uncertainty may still continue which will most likely affect the ordering behaviour of some corporate clients.

Although the business gifts are seen increasingly as a part of the corporate communications as a whole and they are utilized also in the off-season, some cost savings may be sought after by decreasing the investments in the brand promotion. The ongoing economic uncertainties impact especially the demand for business and promotional gifts. During the uncertain economic periods, the corporations may also minimize attending fairs.

Half of the Group’s net sales come from other than euro-currency countries. Fluctuation of the currencies affects the Group’s net result and financial position.

MARKET SITUATION AND FUTURE OUTLOOK

Wulff is the most significant Nordic player in its industry. Wulff’s mission is to help its corporate customers to succeed in their own business by providing them with leading-edge products and services in a way best suitable to them. The markets have been consolidating in the past few years and the Nordic markets are expected to consolidate in the future as well. Wulff is prepared to carry out new strategic acquisitions.

The markets have not improved as expected and the demand for Wulff’s products has decreased from last year. Based on the Group management’s outlook for 2013, it seems probable that the last year’s operating profit level will not be reached. The cost-efficiency improvement actions have been taken as planned and the Group concentrates on the internal actions with the strongest effect on profitability. The Group continues taking actions for enhancing profitability. The Group focuses on sales activities and the development of its sales operations. The Group expects to win new customers and gain growth especially along with Wulff Supplies AB in Scandinavia and with the webstore Wulffinkulma.fi in Finland. Typically in the industry, the annual profit is made in the last quarter of the year.

FINANCIAL REPORTING 2013

Wulff Group Plc will release its interim report for January-September 2013 on Tuesday November 5, 2013.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

INCOME STATEMENT	II	II	I-II	I-II	I-IV
EUR 1000	2013	2012	2013	2012	2012
Net sales	20 743	22 039	43 485	45 365	90 238
Other operating income	14	34	55	122	200
Materials and services	-13 800	-14 078	-28 452	-28 962	-58 260
Employee benefit expenses	-4 626	-4 867	-9 474	-9 939	-18 755
Other operating expenses	-2 817	-2 764	-5 692	-5 747	-11 155
EBITDA	-486	364	-79	840	2 269
Depreciation and amortization	-283	-258	-570	-519	-1 136
Operating profit/loss	-769	106	-649	321	1 132
Financial income	-44	28	64	126	272
Financial expenses	-191	-75	-356	-167	-413
Profit/Loss before taxes	-1 005	58	-941	281	990
Income taxes	240	-10	224	-54	-100
Net profit/loss for the period	-765	47	-717	227	890

Attributable to:
Equity holders of the parent company	-760	25	-731	198	717
Non-controlling interest	-5	23	14	28	173

Earnings per share for profit
attributable to the equity holders
of the parent company:
Earnings per share, EUR	-0,12	0,00	-0,11	0,03	0,11
(diluted = non-diluted)


STATEMENT OF COMPREHENSIVE INCOME	II	II	I-II	I-II	I-IV
EUR 1000	2013	2012	2013	2012	2012
Net profit/loss for the period	-765	47	-717	227	890
Other comprehensive income which may be reclassified to profit or loss subsequently (net of tax)
Change in translation differences	-222	22	-122	89	181
Fair value changes on available-for-sale investments	-17	-33	-31	-5	-22
Total other comprehensive income	-239	-11	-153	84	159
Total comprehensive income for the period	-1 003	37	-870	311	1 049

Total comprehensive income attributable to:
Equity holders of the parent company	-953	13	-857	252	839
Non-controlling interest	-50	24	-13	59	210

STATEMENT OF FINANCIAL POSITION	June 30	June 30	Dec 31
EUR 1000	2013	2012	2012
ASSETS
Non-current assets
Goodwill	9 491	9 500	9 546
Other intangible assets	1 343	1 218	1 308
Property, plant and equipment	1 757	2 137	1 890
Non-current financial assets
Interest-bearing financial assets	35	78	43
Non-interest-bearing financial assets	277	361	327
Deferred tax assets	2 358	1 835	1 972
Total non-current assets	15 260	15 129	15 085

Current assets
Inventories	9 293	10 060	10 236
Current receivables
Interest-bearing receivables	20	52	16
Non-interest-bearing receivables	14 548	15 085	13 350
Financial assets recognised at fair value through profit/loss	3	60	78
Cash and cash equivalents	1 056	1 469	2 749
Total current assets	24 919	26 725	26 429

TOTAL ASSETS	40 179	41 854	41 513

EQUITY AND LIABILITIES
Equity
Equity attributable to the equity holders of the parent company:
Share capital	2 650	2 650	2 650
Share premium fund	7 662	7 662	7 662
Invested unrestricted equity fund	223	223	223
Retained earnings	4 476	5 257	5 849
Non-controlling interest	1 110	1 135	1 283
Total equity	16 121	16 928	17 667

Non-current liabilities
Interest-bearing liabilities	5 462	6 633	6 008
Deferred tax liabilities	92	121	102
Total non-current liabilities	5 554	6 754	6 109

Current liabilities
Interest-bearing liabilities	3 342	2 378	1 685
Non-interest-bearing liabilities	15 162	15 794	16 052
Total current liabilities	18 504	18 172	17 737

TOTAL EQUITY AND LIABILITIES	40 179	41 854	41 513

STATEMENT OF CASH FLOW	II	II	I-II	I-II	I-IV
EUR 1000	2013	2012	2013	2012	2012

Cash flow from operating activities:
Cash received from sales	20 800	22 918	42 293	46 369	93 018
Cash received from other operating income	20	6	65	22	65
Cash paid for operating expenses	-20 328	-22 189	-43 508	-45 563	-89 063
Cash flow from operating activities before financial items and income taxes	491	736	-1 150	827	4 020
Interest paid	-30	-6	-84	-81	-169
Interest received	11	1	19	32	39
Income taxes paid	-200	-55	-402	-415	-592
Cash flow from operating activities	273	676	-1 618	365	3 297

Cash flow from investing activities:
Investments in intangible and tangible assets	-76	-193	-566	-517	-946
Proceeds from sales of intangible and tangible assets	7	37	53	202	269
Disposal of other non-current investments					12
Loans granted	-3	-6	-6	-6	-13
Repayments of loans receivable		1	33	5	8
Cash flow from investing activities	-72	-160	-485	-316	-670

Cash flow from financing activities:
Dividends paid	-611	-491	-632	-531	-531
Dividends received			7	20	20
Payments for subsidiary share acquisitions		-2	-33	-129	-129
Payments received for subsidiary share disposals		81		81	81
Cash paid for (received from) short-term investments (net)	5	8	82	-3	-32
Withdrawals and repayments of short-term loans	129	-79	1 890	156	-254
Withdrawals of long-term loans				355	355
Repayments of long-term loans	-295	-557	-778	-1 044	-1 952
Cash flow from financing activities	-772	-1 039	536	-1 096	-2 443

Change in cash and cash equivalents	-571	-523	-1 566	-1 048	184
Cash and cash equivalents at the beginning of the period	1 747	1 973	2 749	2 464	2 464
Translation difference of cash	-120	18	-127	52	101
Cash and cash equivalents at the end of the period	1 056	1 469	1 056	1 469	2 749

STATEMENT OF CHANGES IN EQUITY

EUR 1000	Equity attributable to equity holders of the parent company
			Fund
			for in
			vested
			non		Trans	Re		Non
		Share	re		lation	tai		cont
		pre	strict		diffe	ned		rolling
* net of tax	Share	mium	ed	Own	ren	Earn		inte
	capital	fund	equity	shares	ces	ings	Total	rest	TOTAL
Equity on Jan 1, 2012	2 650	7 662	223	-283	-116	5 860	15 996	1 198	17 195
Net profit / loss for the period						198	198	28	227
Other comprehens. income*:
Change in translation diff					58		58	31	89
Fair value changes on available-for-sale inv.						-5	-5		-5
Comprehensive income *					58	194	252	59	311
Dividends paid						-457	-457	-74	-531
Treasury share disposal				11		-11	0		0
Share- based payments						1	1		1
Changes in ownership							0	-48	-48
Equity on June 30, 2012	2 650	7 662	223	-272	-58	5 587	15 793	1 135	16 928

Equity on Jan 1, 2012	2 650	7 662	223	-283	-116	5 860	15 996	1 198	17 195
Net profit / loss for the period						717	717	173	890
Other comprehens. income*:
Change in translation diff					144		144	37	181
Fair value changes on available-for-sale investments						-22	-22		-22
Comprehensive income *					144	695	839	210	1 049
Dividends paid						-457	-457	-77	-534
Treasury share disposal				11		-11	0		0
Share- based payments						5	5		5
Changes in ownership							0	-48	-48
Equity on Dec 31, 2012	2 650	7 662	223	-272	28	6 093	16 384	1 283	17 667

Equity on Jan 1, 2013	2 650	7 662	223	-272	28	6 093	16 384	1 283	17 667
Net profit / loss for the period						-731	-731	14	-717
Other comprehens. income*:
Change in translation diff					-95		-95	-27	-122
Fair value changes on available-for-sale investments						-31	-31		-31
Comprehensive income *					-95	-762	-857	-13	-870
Dividends paid						-522	-522	-110	-632
Treasury share disposal				12		-12	0		0
Share- based payments						5	5		5
Changes in ownership							0	-49	-49
Equity on June 30, 2013	2 650	7 662	223	-260	-67	4 803	15 011	1 110	16 121

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION	II	II	I-II	I-II	I-IV
EUR 1000	2013	2012	2013	2012	2012

Net sales by operating segments
Contract Customers Division	17 124	18 380	36 611	37 953	76 250
Direct Sales Division	3 661	3 699	6 914	7 446	14 023
Group Services	192	295	394	588	1 079
Intersegment eliminations	-234	-335	-435	-622	-1 114
TOTAL NET SALES	20 743	22 039	43 485	45 365	90 238

Operating profit/loss by operating segments
Contract Customers Division	-492	350	-26	854	2 041
Direct Sales Division	-40	5	-127	-89	-38
Group Services and non-allocated items	-237	-250	-496	-444	-872
TOTAL OPERATING PROFIT/LOSS	-769	106	-649	321	1 132

KEY FIGURES	II	II	I-II	I-II	I-IV
EUR 1000	2013	2012	2013	2012	2012
Net sales	20 743	22 039	43 485	45 365	90 238
Change in net sales, %	-5,9 %	-9,6 %	-4,1 %	-8,6 %	-9,0 %
EBITDA	-486	364	-79	840	2 269
EBITDA margin, %	-2,3 %	1,7 %	-0,2 %	1,9 %	2,5 %
Operating profit/loss	-769	106	-649	321	1 132
Operating profit/loss margin, %	-3,7 %	0,5 %	-1,5 %	0,7 %	1,3 %
Profit/Loss before taxes	-1 005	58	-941	281	990
Profit/Loss before taxes margin, %	-4,8 %	0,3 %	-2,2 %	0,6 %	1,1 %
Net profit/loss for the period attributable to equity holders of the parent company	-760	25	-731	198	717
Net profit/loss for the period, %	-3,7 %	0,1 %	-1,7 %	0,4 %	0,8 %
Earnings per share, EUR (diluted = non-diluted)	-0,12	0,00	-0,11	0,03	0,11
Return on equity (ROE), %	-4,52 %	0,28 %	-4,24 %	1,33 %	5,11 %
Return on investment (ROI), %	-3,70 %	0,41 %	-3,37 %	1,55 %	4,67 %
Equity-to-assets ratio at the end of period, %	42,6 %	42,9 %	42,6 %	42,9 %	44,3 %
Debt-to-equity ratio at the end of period	47,7 %	43,8 %	47,7 %	43,8 %	27,6 %
Equity per share at the end of period, EUR *	2,30	2,42	2,30	2,42	2,51
Investments in non-current assets	70	209	535	519	972
Investments in non-current assets, % of net sales	0,3 %	0,9 %	1,2 %	1,1 %	1,1 %
Treasury shares held by the Group at the end of period	79 000	85 000	79 000	85 000	85 000
Treasury shares, % of total share capital and votes	1,2 %	1,3 %	1,2 %	1,3 %	1,3 %
Number of total issued shares at the end of period	6607628	6607628	6607628	6607628	6607628
Personnel on average during the period	320	333	321	333	343
Personnel at the end of period	315	321	315	321	326

* Equity attributable to the equity holders of the parent company / Number of shares excluding the acquired own shares

QUARTERLY KEY FIGURES	II	I	IV	III	II	I
EUR 1000	2013	2013	2012	2012	2012	2012
Net sales	20 743	22 742	25 105	19 768	22 039	23 326
EBITDA	-486	407	959	470	364	476
Operating profit/loss	-769	120	637	174	106	216
Profit/Loss before taxes	-1 005	64	525	184	58	223
Net profit/loss for the period attributable to the equity holders of the parent company	-760	29	369	150	25	174
Earnings per share, EUR (diluted = non-diluted)	-0,12	0,00	0,06	0,02	0,00	0,03

RELATED PARTY TRANSACTIONS	II	II	I-II	I-II	I-IV
EUR 1000	2013	2012	2013	2012	2012
Sales to related parties	46	37	108	91	203
Purchases from related parties	8	4	58	9	80
Current non-interest-bearing receivables from related parties	21	0	21	0	0
Non-current interest-bearing receivables from related parties	0	68	0	68	33
Current non-interest-bearing liabilities to related parties	0	0	0	0	0
COMMITMENTS			June 30	June 30	Dec 31
EUR 1000			2013	2012	2012
Mortgages and guarantees on own behalf
Business mortgage for the Group's loan liabilities			7 550	7 550	7 550
Real estate pledge for the Group's loan liabilities			900	900	900
Subsidiary shares pledged as security for group companies' liabilities			4 018	4 018	4 018
Other listed shares pledged as security for group companies' liabilities			145	209	187
Current receivables pledged as security for group companies' liabilities			254	265	272
Pledges and guarantees given for the group companies' off-balance sheet commitments			219	227	232
Guarantees given on behalf of third parties			81	145	114
Minimum future operating lease payments			5 451	5 966	6 033

Accounting principles applied in the condensed consolidated financial statements

These condensed consolidated financial statements are unaudited. This report has been prepared in accordance with IAS 34 following the valuation and accounting methods guided by IFRS principles. The accounting principles used in the preparation of this report are consistent with those described in the previous year’s Financial Statement taking into account also the possible new, revised and amended standards and interpretations. Income tax is the amount corresponding to the actual effective rate based on year-to-date actual tax calculation.

The IFRS principles require the management to make estimates and assumptions when preparing financial statements. Although these estimates and assumptions are based on the management’s best knowledge of today, the final outcome may differ from the estimated values presented in the financial statements.

A part of the Group’s loan agreements include covenants, according to which the equity ratio shall be 35 percentages at minimum and the interest-bearing debt/EBITDA ratio shall be 3.5 at maximum in the end of each financial year. On December 31, 2012 the covenants were reached successfully. The equity ratio of 44.3 % exceeded the required level and the interest-bearing debt/EBITDA ratio was below 3.5 in accordance with the covenants. According to the loan agreements, the covenants are tested next time at year end December 31, 2013.

The Group has no knowledge of any significant events after the end of the financial period that would have had a material impact on this report in any other way that has been already discussed in the review by the Board of Directors.

In Vantaa on August 5, 2013

WULFF GROUP PLC

BOARD OF DIRECTORS

Further information:

CEO Heikki Vienola

tel. +358 9 5259 0050 or mobile: +358 50 65 110

e-mail: heikki.vienola@wulff.fi

DISTRIBUTION

NASDAQ OMX Helsinki Oy

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