Beltton Group's net sales continued to grow and amounted to EUR 16.9 million (EUR 14.8 million). Operating profit totalled EUR 0.17 million (EUR 0.24 million). Result for the period showed a loss of EUR 0.07 million (EUR 0.08 million). Earnings per share (EPS) fell to EUR -0.01 (EUR 0.01). NET SALES AND PROFIT DEVELOPMENT Beltton-Group Plc's net sales increased by 14.1% year-on-year, totalling EUR 16.9 million (EUR 14.8 million), and sales picked up in all business areas. Beltton-Group's operating profit was EUR 0.17 million (EUR 0.24 million), representing 1.0% (1.6%) of net sales. Profit before extraordinary items amounted to EUR 0.12 million (EUR 0.15 million). Earnings per share (EPS) dropped to EUR -0.01 from EUR 0.01 a year earlier. The Group made a loss of EUR 0.07 million in the first quarter compared with a profit of EUR 0.08 million a year earlier. Compared with Q1 in 2006, the company's sales grew while operating profit decreased. CEO Heikki Vienola: “Our marked sales growth can be attributed to successful recruitment for direct sales operations, winning new customers, and new contract customers. I am pleased with our market share increase. Cooperation in logistics with Itella offers us the resources for future growth in line with our strategy. The relocation of Wulff's logistics operations at the beginning of the year was also a major investment in competitiveness. This generated non-recurring costs of approximately EUR 250,000 in the first quarter. Without these costs the profit development would be positive.” Wulff Oy Ab, a company that sells office supplies and computer accessories and accounts for about 45% of Beltton-Group's net sales, managed to win a large number of new contract customers during the period. It also increased its market share. The objective of KB-Tuote Oy, a company selling business and advertising gifts, is to further broaden its contract customer base this year. The amount of contract customers grew according to expectations in the first quarter. KB-Tuote Oy provides major corporations with an outsourced business gift service whereby the customer can order products designed in line with the company brand through an electronic order system. Successful recruitment and new customers contributed to continued positive development in direct sales. Other focus areas in direct sales besides recruitment and winning new customers include sales personnel training. The administration and logistics operations of five Group companies will be relocated to the Beltton premises in Vantaa in May-June, since there is additional office and logistics space as a result of the relocation of Wulff's logistics operations. The purpose of the relocation of the five direct sales companies is to generate synergy benefits and improved cost efficiency, which in the short term will incur some costs arising from the combination of logistics and IT. Beltton's Scandinavian subsidiaries continued to perform well. Positive performance could be attributed to investments in recruitment as well as cost savings. Field sales performed particularly well in Sweden and telemarketing in Norway. FINANCING AND INVESTMENTS Cash flow from business operations amounted to EUR 0.71 million (EUR 0.60 million). The consolidated balance sheet total at the end of the period amounted to EUR 40.4 million (EUR 37.1 million) and the equity ratio was 45.1 % (48.0 %). The investments in fixed assets entered in the balance sheet amounted to EUR 0.30 million, or 1.8% (EUR 0.16 million, 1.1%) of net sales. PERSONNEL Beltton-Group Plc had 422 (435) employees at the end of the review period and an average of 417 (434) employees over the period. A total of 96 (77) employees worked in Sweden, Norway and Estonia. DECISIONS MADE BY THE ANNUAL GENERAL MEETING Beltton-Group Plc's Annual General Meeting held on 4 April 2007 unanimously adopted the financial statements for 2006 and discharged the members of the Board and the CEO from liability for the financial year. In accordance with the proposal of the Board of Directors the Annual General Meeting decided to pay a dividend of EUR 0.12 per share for the financial year 2006. The record date for the dividend payment was 11 April 2007, and the payment was made on 18 April 2007. The number of members of the Board was confirmed at six. The following members were re-elected: Ari Lahti, Ere Kariola, Ari Pikkarainen, Pentti Rantanen, Sakari Ropponen and Heikki Vienola. In its organising meeting held on 18 April 2007, the Board of Directors elected Ari Lahti as its Chairman. The Annual General Meeting adopted the Board's proposals concerning the authorisation to increase the share capital and to buy the company's own shares. OUTLOOK FOR 2007 Beltton expects the office product markets to grow moderately in 2007. Beltton believes that a successfully deployed contract customer operating policy will allow the company to outperform market growth. Beltton's outlook for 2007 is favourable. The successful completion of the Entre Marketing Oy acquisition and good organic growth give the company management reason to believe that net sales will increase from EUR 62 million last year to about EUR 80 million, and that the company's financial result will improve from the previous year. ACCOUNTING PRINCIPLES APPLIED IN THE INTERIM REPORT This interim report was prepared in compliance with the IFRS accounting and valuation principles. The report was not prepared in compliance with all the requirements set forth in IAS 34 Interim Reports. The figures in this interim report have not been audited. -------------------------------------------------------------------------------- | Beltton-Group PLC | | | (1000 euro) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED INCOME STATEMENT | 1-3/2007 | 1-3/2006 | 1-12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TURNOVER | | 16 925 | 14 832 | 62 045 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other operating income | 80 | 60 | 329 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Materials and services | 8 945 | 7 962 | 32 874 | -------------------------------------------------------------------------------- | Personnel expenses | | 4 175 | 3 736 | 15 347 | -------------------------------------------------------------------------------- | Depreciation | 299 | 283 | 1 214 | -------------------------------------------------------------------------------- | Other operating expenses | 3 413 | 2 670 | 10 519 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT | | 172 | 240 | 2 420 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial items | -51 | -87 | -203 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PROFIT BEFORE EXTRAORDINARY | | | | | ITEMS | | | | -------------------------------------------------------------------------------- | AND TAXES | 121 | 153 | 2 216 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Extraordinary items | | 0 | 0 | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PROFIT BEFORE TAXES | | 121 | 153 | 2 216 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income taxes | | 180 | 126 | 807 | -------------------------------------------------------------------------------- | Minority interest | | 11 | -54 | 113 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET PROFIT | | -70 | 81 | 1 296 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET | | | (1000 euro) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | 31.3.2007 | 31.3.2006 | 31.12.2006 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | FIXED ASSETS | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Intangible assets | 439 | 347 | 454 | -------------------------------------------------------------------------------- | Consolidation | | 4 903 | 4 542 | 4 903 | | goodwill | | | | | -------------------------------------------------------------------------------- | Tangible assets | 4 979 | 5 109 | 4 913 | -------------------------------------------------------------------------------- | Investments held for sale | 328 | 280 | 235 | -------------------------------------------------------------------------------- | Investments | | 148 | 149 | 149 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | TOTAL FIXED ASSETS | 10 797 | 10 428 | 10 654 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENT ASSETS | | | | | -------------------------------------------------------------------------------- | Inventories | | 10 726 | 9 646 | 10 590 | -------------------------------------------------------------------------------- | Sales receivables | | 7 826 | 6 653 | 8 933 | -------------------------------------------------------------------------------- | Other receivables | | 3 714 | 4 424 | 3 654 | -------------------------------------------------------------------------------- | Deferred tax assets | 1 026 | 1 201 | 972 | -------------------------------------------------------------------------------- | Cash and bank receivables | 6 311 | 4 796 | 5 876 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL CURRENT ASSETS | 29 602 | 26 721 | 30 025 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL ASSETS | | 40 400 | 37 148 | 40 679 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity and | | 31.3.2007 | 31.3.2006 | 31.12.2006 | | liabilities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY | | | | | -------------------------------------------------------------------------------- | Share capital | | 2 603 | 2 603 | 2 603 | -------------------------------------------------------------------------------- | Share issue | | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Share premium fund | | 7 662 | 7 662 | 7 662 | -------------------------------------------------------------------------------- | Retained earnings | 7 146 | 6 511 | 5 740 | -------------------------------------------------------------------------------- | Net profit | | -70 | 81 | 1 296 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL EQUITY | | 17 341 | 16 857 | 17 302 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minority interest | | 866 | 967 | 889 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES | | | | | -------------------------------------------------------------------------------- | Long-term | | 8 285 | 7 093 | 8 281 | | liabilities | | | | | -------------------------------------------------------------------------------- | Short-term | | 13 908 | 12 231 | 14 207 | | liabilities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL LIABILITIES | | 22 192 | 19 324 | 22 488 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL EQUITY AND LIABILITIES | 40 400 | 37 148 | 40 679 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY RATIOS | | | | (1000 euro) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | 1-3/2007 | 1-3/2006 | 1-12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Turnover | | 16 925 | 14 832 | 62 045 | -------------------------------------------------------------------------------- | Increase in | | 14.1 % | 0.0 % | 3.2 % | | turnover % | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | | 172 | 240 | 2 420 | -------------------------------------------------------------------------------- | % of turnover | | 1.0 % | 1.6 % | 3.9 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit before tax | | 121 | 153 | 2 216 | -------------------------------------------------------------------------------- | % of turnover | | 0.7 % | 1.0 % | 3.6 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net profit | | -70 | 81 | 1 296 | -------------------------------------------------------------------------------- | % of turnover | | -0.4 % | 0.5 % | 2.1 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity ratio % | | 45.1 % | 48.0 % | 45.0 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments in fixed assets | 301 | 156 | 1 122 | -------------------------------------------------------------------------------- | % of turnover | | 1.8 % | 1.1 % | 1.8 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Average number of employees | 417 | 434 | 423 | -------------------------------------------------------------------------------- | Number of employees at end of | 422 | 435 | 412 | | period | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, euro | -0.01 | 0.01 | 0.20 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity per share, euro | 2.66 | 2.59 | 2.66 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH | | | | | | FLOW | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from operations: | | | | -------------------------------------------------------------------------------- | Payments received from sales | | 17 972 | 15 152 | -------------------------------------------------------------------------------- | Payments received from other operating income | 0 | 153 | -------------------------------------------------------------------------------- | Amounts paid for operating expenses | -17 169 | -14 558 | -------------------------------------------------------------------------------- | Cash flow from business operations | | | -------------------------------------------------------------------------------- | before financial items and taxes | 802 | 747 | -------------------------------------------------------------------------------- | Financial costs paid | -82 | -77 | -------------------------------------------------------------------------------- | Interests received from | | 31 | 18 | | operations | | | | -------------------------------------------------------------------------------- | Direct taxes paid | | -46 | -86 | -------------------------------------------------------------------------------- | Cash flow from operations | | 705 | 602 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from investment activities: | | | -------------------------------------------------------------------------------- | Investments in tangible and intangible assets | -290 | -156 | -------------------------------------------------------------------------------- | Sale of tangible and intangible assets | 42 | 0 | -------------------------------------------------------------------------------- | Acquisition of shares in subsidiaries | 0 | 0 | -------------------------------------------------------------------------------- | Sale of shares in subsidiaries | 0 | 0 | -------------------------------------------------------------------------------- | Sale of other investments | 179 | 0 | -------------------------------------------------------------------------------- | Cash flow from investment activities | -69 | -156 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from financing activities: | | | -------------------------------------------------------------------------------- | Share issue | | | 0 | -------------------------------------------------------------------------------- | Paid dividends | | | -40 | 0 | -------------------------------------------------------------------------------- | Received dividends | | | 140 | 53 | -------------------------------------------------------------------------------- | Short-term investments | -952 | -273 | -------------------------------------------------------------------------------- | Loss from the sale of short-term investments | -275 | -173 | -------------------------------------------------------------------------------- | Loan withdrawals | | | 0 | 0 | -------------------------------------------------------------------------------- | Loan repayments | | 0 | 0 | -------------------------------------------------------------------------------- | Cash flow from financing | | -1 127 | -393 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in liquid | | | -491 | 53 | | assets | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Jan 1st - Mar 31st | | | 2007 | | -------------------------------------------------------------------------------- | | | | | | (1000 euro) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | Retain- | | Minor- | | -------------------------------------------------------------------------------- | | | Share | ed | | ity | | -------------------------------------------------------------------------------- | | Share | premiu | earn- | | inte- | | | | | m | | | | | -------------------------------------------------------------------------------- | | capita | fund | ings | Total | rest | Total | | | l | | | | | | -------------------------------------------------------------------------------- | | | | | | | | -------------------------------------------------------------------------------- | Equity Jan 1st | 2 603 | 7 662 | 7 036 | 17 301 | 889 | 18 190 | | 2007 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net profit | | | -70 | | 11 | -59 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividends paid | | | 0 | | -34 | -34 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments available for | | | | | | -------------------------------------------------------------------------------- | sale: Valuation | | | | | | | | gains or | | | | | | | -------------------------------------------------------------------------------- | losses recognised | | | | | | | | under | | | | | | | -------------------------------------------------------------------------------- | shareholders' | | | 69 | | | 69 | | equity | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial instruments | | | | | | -------------------------------------------------------------------------------- | recognised under | | | | | | -------------------------------------------------------------------------------- | shareholders' | | | 34 | | | 34 | | equity | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Translation | | | 7 | | | 7 | | differences | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity Mar 31st | 2 603 | 7 662 | 7 076 | 17 341 | 866 | 18 207 | | 2007 | | | | | | | -------------------------------------------------------------------------------- BELTTON-GROUP PLC Further information: Heikki Vienola, CEO Tel. +358 9 5259 0050 or +358 50 65 110 e-mail: heikki.vienola@beltton.fi Sirpa Väisänen, IR Officer Tel. +358 9 5259 0050 or +358 400 943 243 e-mail: sirpa.vaisanen@beltton.fi www.beltton.com DISTRIBUTION The Helsinki Stock Exchange www.beltton.com Key media