TALENTUM JANUARY-MARCH 2007 (IFRS) January-March 2007 - Net sales: EUR 32.0 million (EUR 31.0 million) - Operating profit: EUR 4.3 million (EUR 2.3 million) - Cash flow from business operations: EUR 4.5 million (EUR 1.4 million) - Earnings per share EUR 0.07 (EUR 0.04) - Equity ratio 26.76% (30.28%) Consolidated net sales in January-March increased by 3.5% over the previous year, totalling EUR 32.0 million (EUR 31.0 million). Publishing's net sales went up by 12% to EUR 20.9 million (EUR 18.6 million). The operating profit increased to EUR 4.3 million (EUR 2.3 million). Of the increase in the operating profit EUR 0.5 million was result of the continuing strong growth by Publishing Sweden. Well over EUR 1 million of the increase in the operating profit was the result of cost savings compared with the corresponding period in the previous year. About EUR 0.4 million in non-recurring costs, which increased Group items in particular, were recorded on projects unrealized in the comparison year 2006 in the result for the first quarter of 2006. Further comparison of the quarterly results with the equivalent period in the 2006 must also take into account that the relative effect of the savings of EUR 2.5 million in personnel costs at the annual level will be the greatest in the first three quarters of the year because of seasonal variations. In comparing the equity ratio to the year end one must take into account the fact that the equity ratio is materially affected by the dividend of EUR 8.0 million on the record date, March 30, 2007 (EUR 0.18/share). CEO JUHA BLOMSTER ON THE INTERIM REPORT: MORE EFFICIENT COST STRUCTURE AND BETTER SALES BEHIND IMPROVED FINANCIAL PERFORMANCE "Talentum's net sales increased and operating profit showed a clear increase in the first quarter compared with the previous year. Publishing's operating profit was more than 15% of the net sales in the first quarter, which is extremely good for the first quarter of a year. One of the factors behind the good level of profitability is the more efficient cost structure. "The growth of the publishing business in Sweden continued to be strong and in Finland the increase in net sales that started right at the end of 2006 strengthened. The net sales of the publishing business in Finland went up by 6% in the first quarter compared with the previous year, whereas the growth in the previous quarter was around 3%. The operations in Sweden are growing by about 20%, and recruitment advertising continues to develop strongly in both Finland and Sweden. The circulation of Talentum's Ny Teknik showed an increase of 6.8%, Affärsvärlden 24.5% and Talouselämä 3.1%, which was far better than that of their competitors. The 12% growth in the whole of Talentum's publishing business and the 20% increase by Direct Marketing, which gives close support, in the first quarter compared with the equivalent period in the previous year were a good achievement. "The operating profit of the TV Content Production Group at 5% of net sales was the same as in the corresponding quarter a year earlier, even though net sales fell by a few per cent compared with that of the corresponding period. The measures taken to improve profitability at Premedia have continued in the opening months of the year. "The start to the new year has been good, especially for Publishing." IAS/IFRS REPORTING This interim report has been drawn up according to the IFRS recognition and valuation principles. The half-year interim report will show a table section for six months in accordance with IAS 34 Interim Financial Reporting; the interim reports for three and nine months will show a contracted table section. In drawing up this interim report, Talentum has applied the same accounting principles as in the financial statements for 2006, but in such a way that it has introduced from January 1, 2007 the following new/revised standards: IFRIC 11, IFRS Group and Treasury Share Transactions - IFRIC 10, Interim Financial Reporting and Impairment - IFRS 7 Financial Instruments: Disclosures - IAS 1 (Change) Presentation of Financial Statements - Information on capital presented in the financial statements. The changes have not material effect on Talentum' interim report. The interim report is unaudited. OUTLOOK FOR SECTOR AND TALENTUM IN 2007 An assessment of Talentum's prospects for 2007 must take into account the fact that non-recurring costs of about EUR 1.0 million recorded mainly in Group items were caused by unrealized projects in the comparative year 2006. Of these costs EUR 0.4 million were recorded in the first quarter of 2006. The profitability of the final quarter of 2006 was encumbered by a goodwill impairment of EUR 1.8 million included in Premedia's operations and costs of approximately EUR 1.6 million for personnel restructuring in the publishing business in Finland and the company's administration. The growth in media markets continued in the first quarter of 2007. The continued good trend in job advertising in particular in the first quarter of 2007 gives cause to assume that the reasonably favourable market situation will carry on during 2007 as well. This, combined with the reduction in personnel costs of EUR 2.5 million in the publishing business in Finland that was implemented in the final quarter of 2006, will improve profitability in 2007. CONSOLIDATED NET SALES AND GROUP TARGETS Consolidated net sales rose by 3.5% over the previous year to EUR 32.0 million (EUR 31.0 million). The effect of Easter on the first quarter's growth in consolidated net sales in relation to the previous year was comparable, as Easter with the holiday periods preceding and following it fell in April in both 2007 and 2006. The 12% growth by Publishing and the 20% growth by Direct Marketing, which gives close support, were much greater than the Group's average, which has increased their relative share of the consolidated net sales. The net sales of TV Content Production fell slightly (-2%). Premedia's slide in net sales continued to be steep (-25%). Publishing accounted for 63% (60%) of the consolidated net sales in the first quarter, TV Content Production for 17% (19%), Premedia for 12% (18%), Direct Marketing for 7% (7%) and intra-group business for 4% (4%). The trend in advertising sales is a significant variable in terms of Publishing's financial performance. Magazines and online activities account for about 85% of Publishing's net sales. Of this, advertising sales account for about 60% and content sales around 40%. Internet advertising accounts for a good 10% of the advertising net sales. Books and training bring in the remaining 15% of Publishing's net sales. Talentum has integrated its business operations portfolio with resolute development work and the implementation of synergy. Talentum's objective is to continue refining its business operations and synergy potential and to divest non-core assets and operations in a way that will create economic value added for the owners and support profitability and growth in the company's core business. GROUP FINANCIAL PERFORMANCE The consolidated operating profit for the first three months was EUR 4.3 million (EUR 2.3 million) i.e. 13.3% (7.3%) The profit for the period under review was EUR 3.0 million (EUR 1.7 million) i.e. 9.3% (5.5%). Publishing and Direct Market performed successfully, TV Content Production satisfactorily and Premedia unsatisfactorily. Changes in exchange rates had no material effect on the consolidated net sales or the financial performance. The currency risk for the Talentum Group is caused by foreign currency flows and, in the case of Talentum Sweden, risks involved with translating shareholders' equity denominated in foreign currency. The majority of the Group's direct income and costs are generated in the euro zone. The earnings per share were EUR 0.07 (EUR 0.04) for the first three months of the year. CASH FLOW, FINANCIAL POSITION AND BALANCE SHEET The cash flow from business operations in January-March was EUR 4.5 million (EUR 1.4 million). Net financial income in January-March came to EUR -0.2 million (EUR 0.0 million) i.e. -0.1% of net sales (-0.1%) The balance sheet total stood at EUR 101.0 million (EUR 105.0 million) on March 31, 2007, of which a total of EUR 27.3 million (EUR 33.0 million) was cash and cash equivalents. The dividend liability on the record date March 30, 2007 swells the balance sheet total by EUR 8.0 million and can be seen in the balance sheet in the increase in cash and cash equivalents and short-term liabilities. The Group's liquid assets have been invested primarily in financial instruments and a small amount in equities. The change in cash and cash equivalents in January-March was + EUR 6.8 million (+ EUR 10.3 million). The Talentum Group's financial position was good and the equity ratio was 26.8% (30.3%) at the end of the period under review. The equity ratio is materially affected by the dividend of EUR 8.0 million on the record date, March 30, 2007 (EUR 0.18/share). The Group's equity per share was EUR 0.56 (EUR 0.67) at the end of March. The consolidated interest-bearing liabilities at the end of the period under review amounted to EUR 29.2 million (EUR 29.0 million). Consolidated depreciation and impairment amounted to 3.0% (3.0%) of net sales i.e. EUR 0.8 million (EUR 0.9 million). Of this depreciation accounted for 3.0% of net sales (3.0%). which is EUR 0.8 million (EUR 0.9 million). INVESTMENT Gross investment in fixed assets in January-March totalled EUR 0.8 million (EUR 1.0 million), i.e. 2.6% (3.2%) of net sales. Gross investment comprised mainly normal replacement and maintenance investment, such as procuring equipment, software and fixtures. PERSONNEL The Group employed an average of 998 persons during January-March (1,050). Of the employees, 31.9% (28.3%) worked abroad. The average number of personnel broken down by business area was as follows: Publishing 369 TV Content Production 98 Premedia 165 Direct Marketing 354 Group Administration 12 MANAGEMENT No changes took place in the Group management during the first quarter. After the quarter came to an end Kaisa Kokkonen (44), M.Sc. (Econ.), was appointed Chief Financial Officer at Talentum Oyj. She will start on June 1, 2007 at the latest. She will also be a member of the Executive Management Team at Talentum. Kai Järvikare, Dr.Sc. (Econ.), who has been Chief Financial Officer and a member of the Executive Management Team since 2003, will resign on June 5, 2007 at the latest. No material structural changes took place within the Group in 2007 or in the comparative year 2006. BUSINESS OPERATIONS AND SEASONAL VARIATION IN THE MEDIA MARKET The general economic situation remained fairly good during the first three months of 2007. The effect of Easter on the first quarter's growth in net sales in relation to the previous year was comparable, as Easter with the holiday periods preceding and following it fell in April in both 2007 and 2006. There is a seasonal fluctuation in the media and media services markets, and business is at its briskest during the final quarter of the year. Not all Talentum's personnel resources are available during the summer holidays, and generally no magazines or books are put out in the summer. Customers typically make a considerable part of their purchases in the final quarter of the year. These characteristics of the business may cause considerable variation in Talentum's quarterly net sales and particularly in the profit: the figures are at their highest in the final quarter, and correspondingly lower in the third quarter than in the first and second quarters. As a result of the heavy seasonal fluctuation in publishing and particularly in the book business, the main part of net sales and an even greater part of the profit in publishing accrue in the latter half of the year. This is the most significant reason for most of Talentum's profit being made in the latter half of the year and the profit trend looking better towards the end of the year. The annual quarterly-based seasonal fluctuation in Publishing's operating profit has increased from earlier periods by the seasonal fluctuation in Sweden being greater than in Finland because of the one-dimensional structure of the operations and the predominance of magazines. The savings in personnel costs of EUR 2.5 million at the annual level that were implemented in the final quarter of 2006 in the publishing business in Finland act as a factor that will reduce the relative seasonal fluctuations in 2007. A goodwill impairment of EUR 1.8 million included in Premedia and recorded in the final quarter of the comparative year 2006 and expenses of about EUR 1.6 million for personnel restructuring in the publishing business in Finland and Group administration will be a factor bringing sharper contrast to the seasonal variation in the final quarter of 2007 in relation to the comparative year. In order to eliminate the effects of the seasonal variation Talentum is presenting an income statement for the last 12 months (rolling 12 months) and for comparison purposes the 12-month period preceding this in addition to the reporting periods required by the standard. ORDER BACKLOG The order backlog is not detailed here, since this information is not relevant due to the nature of the business of the Talentum Group. As none of the Talentum business areas have orders extending forward for further than about one month, an order backlog in the conventional sense does not really exist. While customers and the company have signed commercial agreements for periods of several years ahead, the company management does not consider that these agreements constitute an order backlog as such. BUSINESS RISKS Talentum takes controlled risks that are integrally linked with its corporate strategy and objectives. Risks relating to strategy and objectives are controlled and reduced in various ways. 40% of the consolidated net sales are linked with advertising, specifically with the b-to-b sector, which is susceptible to cyclical fluctuation. We try to control this market risk by increasing revenue from circulation sales and content-sales services. All our products and services aim at being market leaders in their own field, which makes it possible to succeed even during a low cycle. The company is not prepared to take risks that jeopardize the continuation of operations or are difficult to control and cause substantial harm to the company's operations. Risk management does not have a separate organization of its own; its responsibilities follow the division of responsibilities in business operations and the organization. The most important perceived risks are reported to the Board of Directors annually when operations are being planned, and the Board then analyses risks from the shareholder value perspective. In addition, internal auditing is outsourced by a Board decision to Tuokko Tilintarkastus Oy (PKF International), a professional and independent external service provider with sufficient resources. The aim of internal auditing is to promote and improve risk management in Talentum's various operating areas. Talentum keeps an active eye on the market situation in order to be able to prepare for changes in the competition situation in advance. Competition has remained unchanged for a long time, but it is possible that the major media companies will increase their input in Talentum's product areas significantly. The Talentum Group's currency risks comprise risks concerning foreign currency flows and, in the case of Talentum Sweden, risks involved with translating shareholders' equity denominated in foreign currency. The majority of the Group's direct income and costs are generated in the euro zone. The basic principle for controlling risks concerning foreign currency flows is by matching income and costs. The basic principle for risks associated with translating shareholders' equity is to try to hedge against large currency movements. Talentum tries to hedge against finance risks relating to its business operations by ensuring that stable financial conditions are created for developing them. Customers' payment behaviour is monitored constantly. Attempts are made to invest liquid funds in liquid money market instruments that have good credit standing. Liquid funds do not contain a major interest rate risk because of the short duration of the investments. Publishing Publishing performed successfully in the first quarter of the year. Net sales went up by 12% to EUR 20.9 million (EUR 18.6 million). Talentum Sweden accounted for EUR 1.4 million of the growth in net sales of EUR 2.3 million. Publishing's strong development in the first quarter in relation to the previous year is comparable as Easter with the holiday periods preceding and following it fell in April in both 2007 and 2006. The operating profit was EUR 3.9 million (EUR 2.1 million). Talentum Sweden accounts for EUR 0.5 million of the growth in the operating profit. Net sales by Publishing in Finland rose in the first quarter by 6% compared with the previous year, while the growth in the previous quarter was around 3%. Publishing Sweden is still growing by about 20%, and recruitment advertising continues to develop strongly in both Finland and Sweden. TV Content Production The net sales of Varesvuo Partners Oy, which concentrates on TV content production, increased by -2% (2%) and was EUR 5.8 million (EUR 5.9 million). The operating profit was 0.3 million (EUR 0.3 million). TV Content Production continued investing in the production of TV programmes. Premedia Premedia's net sales increased by -25% (5%) and were EUR 4.1 million (EUR 5.5 million). The operating profit was EUR 0.2 million (EUR 0.4 million). In comparing Premedia's first quarter with the second quarter, the relative profitability of the first quarter against that of the second quarter both this year and last is improved by the effect of Easter. Measures at Premedia to improve profitability have been continued in the opening months of the year. Direct Marketing Direct Marketing's net sales went up by 20% (24%) to EUR 2.5 million (EUR 2.1 million). The strong development in the first quarter by Direct Marketing is explained in both years by the falling of Easter with the holiday periods preceding and following it in the second quarter; the significance of the five working days is considerable because of the nature of the operations. The operating profit was EUR 0.4 million (EUR 0.3 million). The financial performance by Direct Marketing this year is still expected to be good. Talentum Oyj's Annual General Meeting was held on March 27, 2007. The meeting confirmed the financial statements for the period January 1 - December 31, 2006, and released the company's Board of Directors, the CEO and the managing directors from liability. The Annual General Meeting, in accordance with a proposal by the Board of Directors, decided to pay a dividend of EUR 0.18 per share. The payment date was April 11, 2007 and the record date March 30, 2007. Manne Airaksinen, Harri Kainulainen, Kai Mäkelä, Eero Lehti and Tuomo Saarinen were re-elected to the Board of Directors. Atte Palomäki was elected to the Board for the first time. Tuomo Saarinen was re-elected Chairman of the Board of Directors and Manne Airaksinen was re-elected Deputy Chairman. The Annual General Meeting re-elected Authorized Accounting Firm PricewaterhouseCoopers Oy auditors with APA Juha Wahlroos as the accountable auditor. The Annual General Meeting decided that the Board of Directors monthly fees would still be: Chairman EUR 4,000, Deputy Chairman 2,500 and members EUR 2,000. In accordance with a proposal by the Board of Directors, the Annual General Meeting decided to amend the Articles of Association. The Articles of Association were published in full in a stock exchange release on March 23, 2007 and can be read on the company's website. At the end of the period under review, Talentum Oyj's share capital totalled EUR 18,593,518.79, and the company has 44,220,817 fully paid-up shares. The shares are listed on the OMX Nordic List (on the Helsinki Stock Exchange Main List until October 2, 2006). At the end of the period under review, the company held 181,000 company shares, 0.41% of Talentum's total stock and votes. Shareholdings of the Board of Directors and CEO On March 31, 2007, the number of Talentum Oyj shares and options owned by members of the Board of Directors and the CEO personally and through companies in which they have a controlling interest was 4,470,162, representing 10.1% of the company's total shares and votes. Authorization of Board of Directors to decide on a share issue that includes assignment of the company's own shares and the issuing of special rights. On March 27, 2007 the Annual General Meeting authorized the Board of Directors to decide on a share issue, either liable to charge or free of charge, covering the issue of new shares and the transfer of the company's own shares that may be in the company's possession. The meeting authorized the Board of Directors to decide on an issue of option rights and other special rights which grant entitlement, against payment, to receipt of new shares or shares that may be in the company's possession. On the basis of the aforesaid authorizations regarding a share issue and/or the issue of special rights, either in one or in several instalments, a maximum of 3,500,000 new shares may be issued and/or the company's own shares possessed by the company may be transferred, which corresponds to approximately eight per cent of the shares issued by the company. The authorizations remain in force until June 30, 2008. The authorizations have not precluded the Board of Directors from the right to decide on a targeted share issue and the issue of special rights. Shareholders' pre-emptive subscription rights can be overruled providing that there is significant financial reason for the company to do so. As of March 31, 2007 the authorization was unused. Authorization of Board of Directors to decide on acquisition of the company's own shares On March 27, 2007 the Annual General Meeting authorized the Board of Directors to decide on the acquisition of the company's own shares. The shares may be acquired at a value decided by the Board of Directors and based on the fair value at the time of the acquisition formed in public trading. The company's own shares may be only acquired with non-restricted equity. Based on the authorization, either in one or in several instalments, a maximum of 3,500,000 of the company's own shares may be acquired, which corresponds to approximately eight per cent of the shares issued. The authorization is in force until June 30, 2008. The Board of Directors is otherwise authorized to decide on all the conditions regarding the acquisition of the company's own shares including the manner of the acquisition of the shares. The authorization has not precluded the Board of Directors from the right to decide on a targeted acquisition of the company's own shares providing that there is significant financial reason for the company to do so. As of March 31, 2007 the authorization was unused. Management incentive scheme The Board of Directors of Talentum Oyj has decided to set up a new share-based incentive scheme for the Group Management. The scheme includes three earning periods lasting a minimum of one financial year and a maximum of three financial years. The first earning period began on January 1, 2007 and will end on December 31, 2007. The total length of the scheme is 5 years. The rewards will be paid partly in the Company's shares and partly in cash payment after the end of each earning period. The proportion to be paid in cash will cover taxes and tax-related costs arising from the reward. The shares earned for the earning period 2007 include a prohibition on their transfer within two years from the end of the earning period. Even after this, the CEO of the company must own 50% of the shares earned on the basis of the scheme as long as the service of the CEO continues and one year after the end of the service. The Board of Directors will later decide on the following earning periods and transfer restrictions concerning shares earned on the basis of those earning periods. The potential yield from the scheme for the earning period 2007 will be based on the Group's net sales and operating profit as well as on the total return on Talentum's shares. The incentive scheme is directed at approximately 10 key employees during the earning period 2007. If the targets of the scheme are reached in full, the rewards to be paid on the basis of the scheme will correspond to the gross value (including also the cash payment) of approximately 1,000,000 Talentum Oyj shares. Notifications Morgan Stanley and Co. International Limited notified Talentum Oyj on March 29, 2007 that its holdings of the voting rights and share capital in Talentum Oyj had exceeded one twentieth (1/20) as a result of a share transaction concluded on March 26, 2007, and was 5.58%. Morgan Stanley & Co International Limited notified Talentum Oyj on March 29 that its holdings of the voting rights and share capital in Talentum Oyj had fallen below one twentieth (1/20) as a result of a share transaction concluded on March 28, 2007, and was 4.56%. Liquidity providing agreement An agreement with Nordea Securities Oyj on liquidity providing for Talentum Oyj shares became effective on June 21, 2004. Under the agreement, Nordea Securities will submit a purchase and sale offer so that the maximum permitted differential between them is 3% of the purchase offer. The offers will include a minimum of 2,500 shares. Shareholder agreements The company is not aware of any mutual shareholder agreements between its shareholders relating to the operations or ownership of the company. There were no important events subsequent to the review period. The forecasts and estimates presented here are based on the management's current view of the trend in the economy, and the actual results may significantly differ from what is expected at the moment. This interim report has been drawn up according to the IFRS recognition and valuation principles. In drawing up this interim report, Talentum has applied the same accounting principles as in the financial statements for 2006, where the principles are described. -------------------------------------------------------------------------------- | INCOME STATEMENT | 1-3/ 2007 | 1-3/ | 1-12/ 2006 | | | | 2006 | | -------------------------------------------------------------------------------- | 1000 EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 32 014 | 30 925 | 121 062 | -------------------------------------------------------------------------------- | Operating profit (adjusted) | 4 272 | 2 256 | 4 275 | -------------------------------------------------------------------------------- | Financial income and expenses | -200 | -46 | -524 | -------------------------------------------------------------------------------- | Share of profit of associates | 74 | 54 | 464 | -------------------------------------------------------------------------------- | Profit before tax | 4 146 | 2 264 | 4 216 | -------------------------------------------------------------------------------- | Income tax expense | -1 159 | -550 | -1 497 | -------------------------------------------------------------------------------- | Profit for the period | 2 987 | 1 713 | 2 718 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | 2 959 | 1 533 | 2 179 | -------------------------------------------------------------------------------- | Minority interest | 28 | 181 | 539 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (EUR) | 0.07 | 0.04 | 0.05 | -------------------------------------------------------------------------------- Tax on the profit for the period under review is calculated according to Group's estimated average tax rate for 2007 -------------------------------------------------------------------------------- | BALANCE SHEET | 31.3.2007 | 31.3.2006 | 31.12.2006 | -------------------------------------------------------------------------------- | 1000 EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Intangible assets | 12 337 | 12 001 | 12 196 | -------------------------------------------------------------------------------- | Goodwill | 23 314 | 24 943 | 23 686 | -------------------------------------------------------------------------------- | Tangible assets | 7 368 | 7 514 | 7 854 | -------------------------------------------------------------------------------- | Investments in associates | 2 824 | 1 255 | 2 750 | -------------------------------------------------------------------------------- | Deferred income taxes | 3 399 | 3 517 | 3 514 | -------------------------------------------------------------------------------- | Other long term receivables and | 1 364 | 1 430 | 1 445 | | investments | | | | -------------------------------------------------------------------------------- | Total non-current assets | 50 607 | 50 659 | 51 444 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 3 791 | 3 099 | 3 326 | -------------------------------------------------------------------------------- | Trade receivables and other | 19 285 | 18 275 | 14 448 | | receivables | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | 27 277 | 32 956 | 20 468 | -------------------------------------------------------------------------------- | Total current assets | 50 352 | 54 330 | 38 242 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL ASSETS | 100 959 | 104 989 | 89 686 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND | | | | | LIABILITIES | | | | -------------------------------------------------------------------------------- | Shareholders' equity | | | | -------------------------------------------------------------------------------- | Share capital | 18 594 | 18 594 | 18 594 | -------------------------------------------------------------------------------- | Share premium reserve | 5 896 | 5 896 | 5 896 | -------------------------------------------------------------------------------- | Own shares | -1 314 | -1 314 | -1 314 | -------------------------------------------------------------------------------- | Fair value reserve and other | 4 | 4 | 4 | | reserves | | | | -------------------------------------------------------------------------------- | Exchange differences | -52 | -124 | 543 | -------------------------------------------------------------------------------- | Retained earnings | -1 219 | 4 759 | 4 562 | -------------------------------------------------------------------------------- | Net income | 2 959 | 1 533 | 2 179 | -------------------------------------------------------------------------------- | Total | 24 868 | 29 348 | 30 464 | -------------------------------------------------------------------------------- | Minority interest | 1 674 | 2 014 | 1 689 | -------------------------------------------------------------------------------- | Total equity | 26 542 | 31 362 | 32 153 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Long term debt | 7 772 | 8 733 | 8 224 | -------------------------------------------------------------------------------- | Short term debt | 66 645 | 64 893 | 49 310 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND | 100 959 | 104 989 | 89 686 | | LIABILITIES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest bearing debt | 29 224 | 29 043 | 25 529 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH FLOW STATEMENT | 1-3/2007 | 1-3/2006 | 1-12/2006 | -------------------------------------------------------------------------------- | 1000 EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 2 987 | 1 713 | 2 718 | -------------------------------------------------------------------------------- | Adjustments | 2 317 | 1 499 | 6 893 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in working capital | 134 | -1 476 | 999 | -------------------------------------------------------------------------------- | Net financial items and taxes | -936 | -335 | -1 537 | -------------------------------------------------------------------------------- | Net cash from operating activities | 4 502 | 1 402 | 9 073 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Acquisitions of subsidiaries and | 0 | -2 370 | -3 907 | | associates | | | | -------------------------------------------------------------------------------- | Purchase of other non-current | -292 | -803 | -3 615 | | assets | | | | -------------------------------------------------------------------------------- | Other investments | -933 | -1 105 | -29 | -------------------------------------------------------------------------------- | Sales of other non-current assets | 19 | 52 | 541 | -------------------------------------------------------------------------------- | Net cash used in investing | -1 206 | -4 226 | -7 010 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in short term loans | 4 000 | 14 000 | 12 000 | -------------------------------------------------------------------------------- | Change in long term loans | -239 | -590 | -1 815 | -------------------------------------------------------------------------------- | Payment of finance lease | -17 | -46 | -127 | | liabilities | | | | -------------------------------------------------------------------------------- | Dividends paid | -116 | -96 | -13 734 | -------------------------------------------------------------------------------- | Other financing items | -115 | -163 | -596 | -------------------------------------------------------------------------------- | Net cash used in financing | 3 513 | 13 105 | -4 272 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net change in cash and cash | 6 809 | 10 280 | -2 209 | | equivalents | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at | 20 468 | 22 677 | 22 677 | | beginning of period | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at end of | 27 277 | 32 956 | 20 468 | | period | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INVESTMENTS | 1-3/2007 | 1-3/2006 | 1-12/2006 | -------------------------------------------------------------------------------- | 1000 EUR | | | | -------------------------------------------------------------------------------- | Investments in non-current | 834 | 1 000 | 5 087 | | assets | | | | -------------------------------------------------------------------------------- | % of net sales | 2.6 | 3.2 | 4.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | AVERAGE NUMBER OF EMPLOYEES | 1-3/2007 | 1-3/2006 | 1-12/2006 | -------------------------------------------------------------------------------- | Talentum Group | 694 | 767 | 767 | -------------------------------------------------------------------------------- | Part-time telemarketing staff | 304 | 283 | 297 | -------------------------------------------------------------------------------- | Total | 998 | 1 050 | 1 064 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONTINGENT LIABILITIES | 31.3.2007 | 31.3.2006 | 31.12.2006 | -------------------------------------------------------------------------------- | 1000 EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Given as security | 5 903 | 5 903 | 5 903 | -------------------------------------------------------------------------------- | Loans with securities as | 2 934 | 3 628 | 3 107 | | collateral | | | | -------------------------------------------------------------------------------- | Rental and other commitments | 16 092 | 17 532 | 17 083 | -------------------------------------------------------------------------------- | Leasing commitments | 3 136 | 2 518 | 3 344 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NUMBER OF SHARES | | | | -------------------------------------------------------------------------------- | Adjusted average number | 44039817 | 42720075 | 44039817 | -------------------------------------------------------------------------------- | Number at the end of period | 44039817 | 44039817 | 44039817 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FIGURES | | | | -------------------------------------------------------------------------------- | Earnings per share, adjusted | 0.07 | 0.04 | 0.05 | | (EUR) | | | | -------------------------------------------------------------------------------- | Earnings per share (EUR) | 0.07 | 0.04 | 0.05 | -------------------------------------------------------------------------------- | Equity per share (EUR) | 0.56 | 0.67 | 0.69 | -------------------------------------------------------------------------------- | Equity ratio, % | 26.76 | 30.28 | 36.07 | -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN EQUITY -------------------------------------------------------------------------------- | 1000 EUR | Equit | Share | Fair | Exchange | Retaine | Minori | Total | | | y | premiu | value | differen | d | ty | equity | | | | mreser | reserve | ces | earning | intere | | | | | ve | and | | s | st | | | | | | other | | | | | | | | | reserve | | | | | | | | | s | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | 18594 | 5896 | 4 | -44 | 16808 | 2043 | 43302 | | 1.1.2006 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Exchange | | | | -80 | | | -80 | | differenc | | | | | | | | | es | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net | | | | | -153 | | -153 | | income | | | | | | | | | recognize | | | | | | | | | d | | | | | | | | | directly | | | | | | | | | in equity | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit | | | | | 1533 | 181 | 1713 | | for the | | | | | | | | | period | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividends | | | | | -13212 | -129 | -13341 | | paid | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | -81 | -81 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | 18594 | 5896 | 4 | -124 | 4978 | 2014 | 31362 | | 31.3.2006 | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18594 | 5896 | 4 | 543 | 5427 | 1689 | 32153 | | 1.1.2007 | | | | | | | | -------------------------------------------------------------------------------- | Exchange | | | | -595 | -103 | | -698 | | differenc | | | | | | | | | es | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share | | | | | 63 | | 63 | | based | | | | | | | | | incentive | | | | | | | | | plan | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net | | | | | 7 | | 7 | | income | | | | | | | | | recognize | | | | | | | | | d | | | | | | | | | directly | | | | | | | | | in equity | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit | | | | | 2959 | 28 | 2987 | | for the | | | | | | | | | period | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividends | | | | | -7927 | -116 | -8043 | | paid | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | 73 | 73 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | 18594 | 5896 | 4 | -52 | 426 | 1674 | 26542 | | 31.3.2007 | | | | | | | | -------------------------------------------------------------------------------- TALENTUM GROUP / SUB-SEGMENTS -------------------------------------------------------------------------------- | 1000 EUR | | | | 12 | 12 | | | | | | rolling | rolling | -------------------------------------------------------------------------------- | | 1-3/ 2007 | 1-3/ | 1-12/ | 4/06-03/0 | 4/05- | | | | 2006 | 2006 | 7 | 03/06 | -------------------------------------------------------------------------------- | Net sales | | | | | | -------------------------------------------------------------------------------- | Publishing | 20 871 | 18 604 | 74 674 | 76 941 | 63 827 | -------------------------------------------------------------------------------- | TV content | 5 799 | 5 941 | 24 641 | 24 499 | 21 603 | | production | | | | | | -------------------------------------------------------------------------------- | Premedia | 4 107 | 5 471 | 18 021 | 16 657 | 21 256 | -------------------------------------------------------------------------------- | Direct marketing | 2 487 | 2 079 | 8 177 | 8 585 | 7 570 | -------------------------------------------------------------------------------- | Internet | 0 | 0 | 0 | 0 | 13 908 | | consulting*) | | | | | | -------------------------------------------------------------------------------- | Sales within group | -1 250 | -1 170 | -4 451 | -4 531 | -4 195 | -------------------------------------------------------------------------------- | Total | 32 014 | 30 925 | 121 062 | 122 151 | 123 968 | -------------------------------------------------------------------------------- | -Discontinued | 0 | 0 | 0 | 0 | -13 908 | | operations | | | | | | -------------------------------------------------------------------------------- | Adjustments and | 0 | 0 | 0 | 0 | 187 | | eliminations | | | | | | -------------------------------------------------------------------------------- | Total | 32 014 | 30 925 | 121 062 | 122 151 | 110 247 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | | | | | | -------------------------------------------------------------------------------- | Publishing | 3 944 | 2 054 | 7 143 | 9 033 | 9 872 | -------------------------------------------------------------------------------- | TV content | 276 | 296 | 1 769 | 1 749 | 820 | | production | | | | | | -------------------------------------------------------------------------------- | Premedia | 154 | 358 | -2 510 | -2 714 | 128 | -------------------------------------------------------------------------------- | Direct marketing | 397 | 330 | 1 122 | 1 189 | 1 209 | -------------------------------------------------------------------------------- | Internet consulting | 0 | 0 | 0 | 0 | 1 022 | | *) | | | | | | -------------------------------------------------------------------------------- | Parent company and | -499 | -782 | -3 249 | -2 966 | -2 731 | | group items | | | | | | -------------------------------------------------------------------------------- | Capital gain on | 0 | 0 | | 0 | 10 488 | | discontinued | | | | | | | operations | | | | | | -------------------------------------------------------------------------------- | Total | 4 272 | 2 256 | 4 275 | 6 291 | 20 808 | -------------------------------------------------------------------------------- *) Discontinued operations, gross PUBLISHING BY GEOGRAPHICAL AREA -------------------------------------------------------------------------------- | 1000 EUR | 1-3/2007 | 1-3/2006 | 1-12/2006 | -------------------------------------------------------------------------------- | Net sales | | | | -------------------------------------------------------------------------------- | Finland | 14 202 | 13 274 | 52 645 | -------------------------------------------------------------------------------- | Other | 6 669 | 5 330 | 22 029 | -------------------------------------------------------------------------------- | Total | 20 871 | 18 604 | 74 674 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | | | | -------------------------------------------------------------------------------- | Finland | 3 251 | 1 871 | 5 525 | -------------------------------------------------------------------------------- | Other | 693 | 183 | 1 618 | -------------------------------------------------------------------------------- | Total | 3 944 | 2 054 | 7 143 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | AVERAGE NUMBER OF | 1-3/2007 | 1-3/2006 | 1-12/2006 | | EMPLOYEES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Publishing | 369 | 393 | 405 | -------------------------------------------------------------------------------- | TV content production | 98 | 95 | 98 | -------------------------------------------------------------------------------- | Premedia | 165 | 213 | 199 | -------------------------------------------------------------------------------- | Direct marketing | 354 | 331 | 346 | -------------------------------------------------------------------------------- | Group administration | 12 | 18 | 16 | -------------------------------------------------------------------------------- | Total | 998 | 1 050 | 1 064 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- This interim report is unaudited Talentum will be publishing an interim report for January-June on July 20 and for January-September on October 26, 2007. TALENTUM OYJ Juha Blomster CEO FURTHER INFORMATION Juha Blomster, CEO, tel +358 (0)20 442 4444 Kai Järvikare, CFO, tel +358 (0)40 342 4210 www.talentum.com COPIES TO Helsinki Stock Exchange Key Media BRIEFING A briefing for analysts and the media will be held on April 27, 2007 at 9.30 a.m. at the Talentum head office in Annankatu 34-36 B, Kamppi, Helsinki. The interim report will be presented by CEO Juha Blomster and CFO Kai Järvikare will also be present. This interim report is published in Finnish and English. In case of doubt, the Finnish report is authoritative.
TALENTUM'S NET SALES AND OPERATING PROFIT FOR JANUARY-MARCH EXCEED PREVIOUS YEAR'S EQUIVALENT
| Source: Talentum Oyj