TALENTUM JANUARY-JUNE 2007 (IFRS) January-June 2007 - Net sales: EUR 63.5 million (EUR 61.2 million) - Operating profit: EUR 5.5 million (EUR 3.0 million) - Cash flow from business operations: EUR 9.4 million (EUR 6.0 million) - Earnings per share: EUR 0.08 (EUR 0.05) - Equity ratio: 29.7% (34.7%) Talentum's consolidated net sales in January-June increased by 3.8% over the previous year, totalling EUR 63.5 million (EUR 61.2 million). Publishing's net sales went up by 11.2% to EUR 41.5 million (EUR 37.3 million). The operating profit increased to EUR 5.5 million in the first half of the year (EUR 3.0 million) despite a non-recurring cost of EUR 1.7 million incurred in the reorganization of the Premedia business area. Of the increase in the operating profit, EUR 1.6 million was caused by the continuing strong growth in Sweden in the second quarter. In the comparison year 2006, about EUR 1.0 million in non-recurring costs, which increased group items in particular, were recorded on unrealized projects in the result for January-June. CEO JUHA BLOMSTER: CONTINUING POSITIVE TREND FOR TALENTUM PUBLISHING ”Talentum's net sales continued to grow, and operating profit for the first half of the year was clearly better than that of the corresponding period in the previous year. This improvement was mostly due to an increase in publishing and enhanced efficiency in our cost structure. Publishing showed a good operating profit in the first half of the year, and the percentage of Publishing and the closely related Direct Marketing in Talentum net sales increased to 69%. ”Talentum is now focusing on growing Publishing further, making it international and improving its profitability. The acquisition of the Dagens Media magazine focusing on advertising, marketing and the media in Sweden and the sale of business from Reprostudio & Heku Oy to a private entrepreneur, both in June, both followed from this strategy. ”Net sales in Publishing grew by more than 11% in the first half of the year, thanks mostly to a positive development in Sweden. Recruitment ads in the Uratie supplement of Tekniikka & Talous and Tietoviikko in Finland and in Ny Teknik magazine in Sweden, supported by online services, was particularly strong. The operating profit of Publishing grew by 58% in Finland from the beginning of the year and almost tripled in Sweden. ”Talentum magazines competed well for readers, which is a cornerstone of business success. According to the TNS PäättäjäAtlas 2007 study, most of Talentum's Finnish magazines increased their readership among decision-makers. Affärsvärlden magazine in Sweden also performed better than its competitors, according to a comparable study (Oversto Näringsliv). The readership of the newly acquired Dagens Media among decision-makers grew by 33%. ”In June, Talentum merged its online business and IT administration in Finland and Sweden into a single organization with a view of pooling expertise and strengths and thus creating a sound basis for further development of the online business in the future. ”In the media market, advertiser clients react rapidly and are therefore unpredictable in their purchasing behaviour; however, it is expected that the favourable general economic climate will keep the recruitment and advertising market lively. Talentum magazines and online services have a well-established position as a recruitment medium in both Finland and Sweden. ”Talentum's financial performance developed favourably in the first half of the year, and the trend in Sweden is particularly satisfactory.” PROSPECTS FOR THE SECTOR AND TALENTUM FOR THE SECOND HALF OF 2007 The media market continued to grow in the second quarter of 2007. The favourable trend in job ads in the first and second quarters of 2007 in particular indicates that the market situation will continue to be favourable for the rest of the year. A significant portion of Talentum's growth comes from the business in Sweden, where a corporate acquisition finalized in June will further improve Talentum's position. The net sales of Talentum Sweden in January-June were EUR 14.3 million, compared with EUR 21.7 million for the whole of 2006. The reorganization of Publishing in Finland in the final quarter of 2006 will improve profitability in 2007. Investment in the online business towards the end of the year will add to costs, as the return on this investment will not be seen until coming years. Reorganization of non-core functions in Reprostudio & Heku Oy in the Premedia business area reduces the Group's operating profit by about EUR 1.7 million in June. Measures to improve profitability will be continued in non-core business areas in the second half of the year. 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 first half of the comparative year 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. If the market situation continues as at present, Talentum's operating profit excluding non-recurrent items will be better than in the previous year. CONSOLIDATED NET SALES AND GROUP TARGETS Consolidated net sales in the first half of the year were EUR 63.5 million (EUR 61.2 million), an increase over the previous year of EUR 2.4 million (EUR 12.0 million) or 3.8% (24.5%). Net sales increased by 4.2% in the second quarter, to EUR 31.5 million (EUR 30.2 million). Net sales in Publishing increased by 11.2% in the first half of the year. Closely linked Direct Marketing, which has increased its relative share of the consolidated net sales, increased its net sales by 14.3%; of this growth, 5.5% came from intra-group business. The net sales of TV Content Production fell by 1.0%. Premedia's slide in net sales continued to be steep (21.3%) as demand declined further. Publishing accounted for 65.3% (60.9%) of the consolidated net sales in the first half of the year, TV Content Production for 18.4% (19.4%), Premedia for 12.5% (16.5%) and Direct Marketing for 7.6% (6.9%). The percentage of Direct Marketing is 4.3% when intra-group business is eliminated from the figures. Intra-group business accounted for -3.8% (-3.8%) of the consolidated net sales. The trend in advertising sales is a significant variable in terms of Publishing's final performance. Advertising revenue in Talentum magazines grew by 11.9%, most significantly in job ads. 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 10.7% of the advertising net sales. Books and training bring in the remaining 15% of Publishing's net sales. 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 half of the year was EUR 5.5 million (EUR 3.0 million), or 8.6% (4.9%) of net sales. The profit for the period under review was EUR 3.6 million (EUR 2.4 million), or 5.7% (3.9%) of net sales. The consolidated operating profit for the second quarter was EUR 1.2 million (EUR 0.7 million), or 3.8% (2.3%) of net sales. The profit for the period under review was EUR 0.6 million (EUR 0.7 million), or 2.1% (2.2%). Publishing and Direct Marketing performed very well, 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 majority of the Group's direct income and costs are generated in the euro zone. The earnings per share were EUR 0.08 (EUR 0.05) for the first half of the year. CASH FLOW, FINANCIAL POSITION AND BALANCE SHEET The cash flow from business operations was EUR 9.4 million (EUR 6.0 million) in January-June and EUR 4.9 million (EUR 4.6 million) in April-June. Net financial income in January-June was EUR -0.3 million (EUR -0.2 million), or -0.1% (0.0%) of net sales. The total asset stood at EUR 94.8 million (EUR 93.8 million) on June 30, 2007, of which a total of EUR 22.7 million (EUR 22.6 million) was cash and cash equivalents. 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-June was EUR 2.1 million (EUR -0.0 million). The Talentum Group's financial position was good, and the equity ratio was 29.7% (34.7%) at the end of the period under review. The Group's equity per share was EUR 0.58 (EUR 0.69) at the end of June. The consolidated interest-bearing liabilities at the end of the period under review amounted to EUR 30.6 million (EUR 30.5 million). DEPRECIATIONS AND IMPAIRMENT Consolidated depreciation and impairment amounted to 3.0% (2.8%) of net sales, i.e. EUR 1.7 million (EUR 1.7 million). Of this, depreciation accounted for EUR 1.7 million (EUR 1.7 million). INVESTMENT Gross investment in fixed assets in January-June totalled EUR 5.1 million (EUR 3.9 million), i.e. 8.1% (6.4%) of net sales. Gross investment for replacement and maintenance, such as procuring equipment, software and fixtures, totalled EUR 1.7 million (EUR 2.5 million), while investment in shareholdings under fixed assets totalled EUR 3.5 million (EUR 1.4 million). PERSONNEL The Group employed an average of 991 persons (1,061 persons) in January-June. Because of the reorganization of the Publishing business area in Finland and the streamlining of Group functions, 25 employees were given notice at the end of 2006 as a result of the codetermination negotiations, in addition to which 18 further employees left the company. Of the employees, 31.6% (27.5%) worked abroad. The average number of personnel broken down by business area was as follows: -------------------------------------------------------------------------------- | Publishing | 370 | -------------------------------------------------------------------------------- | TV Content Production | 99 | -------------------------------------------------------------------------------- | Premedia | 160 | -------------------------------------------------------------------------------- | Direct Marketing | 350 | -------------------------------------------------------------------------------- | Group Administration | 12 | -------------------------------------------------------------------------------- MANAGEMENT Kaisa Kokkonen M.Sc. (Econ.) was appointed Chief Financial Officer at Talentum Oyj. She took up her post on May 28, 2007. She is also a member of the Management Group at Talentum. Kai Järvikare D.Sc. (Econ.), who had been Chief Financial Management Officer and a member of the Management Group since 2003, resigned on June 5, 2007. STRUCTURAL CHANGES Talentum's Swedish subsidiary bought the capital stock of Dagens Media Sverige AB in a transaction agreed on June 12, 2007. The company was included in the consolidated financial statements as of that date. The company has an annual turnover of about EUR 2 million and runs at a profit. Dagens Media employs 13 persons. The repro business of Reprostudio & Heku Oy in the Premedia business area was sold in a transaction which was agreed on June 13, 2007 and which also involved the transfer of 45 employees. The sold business has an annual turnover of about EUR 5 million. BUSINESS OPERATIONS AND SEASONAL VARIATION IN THE MEDIA MARKET The general economic situation remained fairly good during the first six months of 2007. There is seasonal fluctuation in the media and media services market, 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. 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 accrued 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. In order to eliminate the effects of seasonal variation, Talentum is presenting an income statement for the business areas 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 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 to 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. 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. BUSINESS AREAS Publishing Publishing performed well in the first half of the year, with net sales of EUR 41.5 million (EUR 37.3 million), showing an increase of 10.3% in the second quarter. The EUR 1.9 million increase in turnover in the second quarter came mainly from Talentum Sweden, which accounted for EUR 3.4 million out of the EUR 4.2 million increase in net sales in the first half of the year. Publishing net sales in January-June were EUR 35.3 million (EUR 31.6 million), of which online services accounted for about EUR 2.4 million (EUR 2.0 million). Book publishing net sales were EUR 4.9 million (EUR 4.5 million), and training net sales were EUR 1.2 million (EUR 1.1 million). Publishing operating profit in January-June was EUR 6.8 million (EUR 3.6 million), or 16.5% (9.6%) of turnover, while the latter figure for the second quarter was 14.0% (8.1%). Talentum Sweden contributed EUR 1.1 million to the increase in operating profit in the second quarter and EUR 1.6 million in the first half of the year. Talentum magazines' circulation increased, boosting circulation revenue by 8.9%, and advertising revenue by 11.9%. The business in Sweden is still showing a 20% growth rate, and recruitment ads are growing stronger in both Finland and Sweden. TV Content Production The net sales of Varesvuo Partners Oy, which concentrates on TV content production, increased in January-June by -1.0% (4.3%) to EUR 11.7 million (EUR 11.9 million). Operating profit was EUR 0.6 million (EUR 0.8 million). Net sales for advertising films fell by 13.8% to EUR 4.0 million (EUR 4.6 million). Net sales for TV programme production grew by 4.6% to EUR 6.1 million (EUR 5.8 million). Premedia Premedia net sales fell in January-June by 21.2% (7.3%) to EUR 8.0 million (EUR 10.1 million). Operating profit was EUR -1.2 million (EUR 0.1 million). In the Premedia business area, the repro business was sold, while the digital material management functions were merged into a single unit. The reorganization of the repro business caused a non-recurring cost of EUR 1.7 million. Direct Marketing Direct Marketing net sales grew in January-June by 14.3% (17.1%) to EUR 4.8 million (EUR 4.2 million). Operating profit was EUR 0.7 million (EUR 0.6 million). 43.2% of the net sales of Direct Marketing derives from intra-group business, which was increased at the beginning of the year by the transfer of the Finnish subscriber service of the Publishing business area to the Direct Marketing business area. The operating profit developed as expected. SHARES AND SHARE CAPITAL 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. 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 June 30, 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. Board of Directors authorizations Authorization of the 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 June 30, 2007 the authorization was unused. Authorization of the 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 June 30, 2007 the authorization was unused. Management incentive scheme The Talentum Oyj Group Management has a share-based incentive scheme. 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 9 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 There were no notifications in April-June. Market guarantee An agreement with Nordea Securities Oyj on a market guarantee 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. IMPORTANT EVENTS SUBSEQUENT TO THE REVIEW PERIOD There were no important events subsequent to the review period. GENERAL STATEMENT 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. IAS/IFRS REPORTING This interim report has been drawn up according to the IFRS recognition and valuation principles. The half-year interim report shows a table section for six months in accordance with IAS 34 Interim Financial Reporting; the interim reports for three and nine months 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 2 Group and Treasury Share Transactions - IFRIC 10, Interim Financial Reporting and Impairment - IFRS 7 Financial Instruments: Disclosures - IAS 1 (Change) Presentation of Financial Statements - Capital Disclosures. The changes have no material effect on Talentum's interim report. -------------------------------------------------------------------------------- | INCOME STATEMENT | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | 1000 EUR | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 31 506 | 30 245 | 63 520 | 61 170 | 121 062 | -------------------------------------------------------------------------------- | Operating profit | 1 211 | 711 | 5 483 | 2 967 | 4 275 | -------------------------------------------------------------------------------- | Financial income and | -135 | -165 | -335 | -211 | -524 | | expenses | | | | | | -------------------------------------------------------------------------------- | Share of profit of | 64 | 135 | 138 | 188 | 464 | | associates | | | | | | -------------------------------------------------------------------------------- | Profit before tax | 1 140 | 680 | 5 286 | 2 944 | 4 216 | -------------------------------------------------------------------------------- | Income tax expense | -494 | -7 | -1 653 | -557 | -1 497 | -------------------------------------------------------------------------------- | Profit for the period | 647 | 673 | 3 634 | 2 387 | 2 718 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | | -------------------------------------------------------------------------------- | Equity holders of the | 599 | 428 | 3 558 | 1 961 | 2 179 | | parent | | | | | | -------------------------------------------------------------------------------- | Minority interest | 48 | 245 | 75 | 426 | 539 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share(EUR) | 0.01 | 0.01 | 0.08 | 0.05 | 0.05 | -------------------------------------------------------------------------------- Tax on the profit for the period under review is calculated as a share of the whole year estimated taxes for 2007. -------------------------------------------------------------------------------- | BALANCE SHEET | 30.6.2007 | 30.6.2006 | 31.12.2006 | -------------------------------------------------------------------------------- | 1000 EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Intangible assets | 12 174 | 12 120 | 12 196 | -------------------------------------------------------------------------------- | Goodwill | 26 902 | 25 267 | 23 686 | -------------------------------------------------------------------------------- | Tangible assets | 6 968 | 8 389 | 7 854 | -------------------------------------------------------------------------------- | Investments in associates | 2 811 | 2 731 | 2 750 | -------------------------------------------------------------------------------- | Deferred income taxes | 3 577 | 3 727 | 3 514 | -------------------------------------------------------------------------------- | Other long term receivables and | 1 447 | 1 195 | 1 445 | | investments | | | | -------------------------------------------------------------------------------- | Total non-current assets | 53 878 | 53 429 | 51 444 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 5 170 | 2 991 | 3 326 | -------------------------------------------------------------------------------- | Trade receivables and other | 13 043 | 14 808 | 14 448 | | receivables | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | 22 664 | 22 590 | 20 468 | -------------------------------------------------------------------------------- | Total current assets | 40 877 | 40 389 | 38 242 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL ASSETS | 94 756 | 93 818 | 89 686 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND | | | | | LIABILITIES | | | | -------------------------------------------------------------------------------- | Shareholders' equity | | | | -------------------------------------------------------------------------------- | Share capital | 18 594 | 18 594 | 18 594 | -------------------------------------------------------------------------------- | Share premium reserve | 5 893 | 5 896 | 5 896 | -------------------------------------------------------------------------------- | Own shares | -1 314 | -1 314 | -1 314 | -------------------------------------------------------------------------------- | Fair value reserve and other | 4 | 4 | 4 | | reserves | | | | -------------------------------------------------------------------------------- | Exchange differences | 126 | 241 | 543 | -------------------------------------------------------------------------------- | Retained earnings | -1 114 | 4 845 | 4 562 | -------------------------------------------------------------------------------- | Net income | 3 558 | 1 961 | 2 179 | -------------------------------------------------------------------------------- | Total | 25 747 | 30 227 | 30 464 | -------------------------------------------------------------------------------- | Minority interest | 1 576 | 1 964 | 1 689 | -------------------------------------------------------------------------------- | Total equity | 27 323 | 32 192 | 32 153 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Long term debt | 8 335 | 8 087 | 8 224 | -------------------------------------------------------------------------------- | Short term debt | 59 098 | 53 540 | 49 310 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND | 94 756 | 93 818 | 89 686 | | LIABILITIES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest bearing debt | 30 642 | 30 547 | 25 529 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH FLOW STATEMENT | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | 1000 EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 3 634 | 2 387 | 2 718 | -------------------------------------------------------------------------------- | Adjustments | 4 141 | 2 292 | 6 893 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in working capital | 2 610 | 2 473 | 999 | -------------------------------------------------------------------------------- | Net financial items and taxes | -961 | -1 136 | -1 537 | -------------------------------------------------------------------------------- | Net cash from operating activities | 9 424 | 6 016 | 9 073 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Acquisitions of subsidiaries and | -3 245 | -3 765 | -3 907 | | associates | | | | -------------------------------------------------------------------------------- | Purchase of other non-current assets | -1 146 | -2 482 | -3 615 | -------------------------------------------------------------------------------- | Other investments | -58 | -1 434 | -29 | -------------------------------------------------------------------------------- | Sales of subsidiaries | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Sales of other non-current assets | 349 | 306 | 541 | -------------------------------------------------------------------------------- | Net cash used in investing activities | -4 100 | -7 375 | -7 010 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in short term loans | 6 000 | 16 000 | 12 000 | -------------------------------------------------------------------------------- | Change in long term loans | -931 | -1 197 | -1 815 | -------------------------------------------------------------------------------- | Payment of finance lease liabilities | -36 | -92 | -127 | -------------------------------------------------------------------------------- | Dividends paid and equivalents | -8 183 | -13 431 | -13 734 | -------------------------------------------------------------------------------- | Other financing items | 22 | -8 | -596 | -------------------------------------------------------------------------------- | Share repurchases | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Net cash used in financing activities | -3 128 | 1 272 | -4 272 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net change in cash and cash | 2 196 | -87 | -2 209 | | equivalents | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at beginning | 20 468 | 22 677 | 22 677 | | of period | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at end of | 22 664 | 22 590 | 20 468 | | period | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INVESTMENTS | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | 1000 EUR | | | | -------------------------------------------------------------------------------- | Investments in non current assets | 5 146 | 3 933 | 5 087 | -------------------------------------------------------------------------------- | % of net sales | 8.1 | 6.4 | 4.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | AVERAGE NUMBER OF EMPLOYEES | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | Talentum Group | 692 | 777 | 767 | -------------------------------------------------------------------------------- | Part-time telemarketing staff | 299 | 284 | 297 | -------------------------------------------------------------------------------- | Total | 991 | 1 061 | 1 064 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONTINGENT LIABILITIES | 30.6.2007 | 30.6.2006 | 31.12.2006 | -------------------------------------------------------------------------------- | 1000 EUR | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Given as security | 5 903 | 5 903 | 5 903 | -------------------------------------------------------------------------------- | loans with securities as | 2 760 | 3 454 | 3 107 | | collateral | | | | -------------------------------------------------------------------------------- | Rental and other commitments | 14 070 | 17 365 | 17 083 | -------------------------------------------------------------------------------- | Leasing commitments | 3 027 | 2 776 | 3 344 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NUMBER OF SHARES | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | Adjusted average number | 44039817 | 42720075 | 44039817 | -------------------------------------------------------------------------------- | Number at the end of period | 44039817 | 44039817 | 44039817 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FIGURES | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | Earnings per share, adjusted (EUR) | 0.08 | 0.05 | 0.05 | -------------------------------------------------------------------------------- | Earnings per share (EUR) | 0.08 | 0.05 | 0.05 | -------------------------------------------------------------------------------- | Equity per share (EUR) | 0.58 | 0.69 | 0.69 | -------------------------------------------------------------------------------- | Equity ratio, % | 29.71 | 34.69 | 36.07 | -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN EQUITY -------------------------------------------------------------------------------- | 1000 EUR | Equit | Share | Fair | Exchang | Retaine | Minorit | Total | | | y | premiu | value | e | d | y | equity | | | | m | reserve | differ | earning | interes | | | | | reserv | and | ences | s | t | | | | | e | other | | | | | | | | | reserve | | | | | | | | | s | | | | | -------------------------------------------------------------------------------- | Equity | 18594 | 5896 | 4 | -44 | 16808 | 2043 | 43302 | | 1.1.2006 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Exchange | | | | 285 | | | 285 | | differenc | | | | | | | | | es | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net | | | | | -64 | | -64 | | income | | | | | | | | | recognize | | | | | | | | | d | | | | | | | | | directly | | | | | | | | | in equity | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit | | | | | 1961 | 426 | 2387 | | for the | | | | | | | | | period | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividends | | | | | -13212 | -219 | -13431 | | paid | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | -286 | -286 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | 18594 | 5896 | 4 | 241 | 5493 | 1964 | 32192 | | 30.6.2006 | | | | | | | | -------------------------------------------------------------------------------- | Equity | 18594 | 5896 | 4 | 543 | 5427 | 1689 | 32153 | | 1.1.2007 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Exchange | | -3 | | -417 | -72 | | -489 | | differenc | | | | | | | | | es | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share | | | | | 135 | | 135 | | based | | | | | | | | | incentive | | | | | | | | | plan | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net | | | | | 5 | | 5 | | income | | | | | | | | | recognize | | | | | | | | | d | | | | | | | | | directly | | | | | | | | | in equity | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit | | | | | 3558 | 75 | 3634 | | for the | | | | | | | | | period | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividends | | | | | -7927 | -256 | -8183 | | paid | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | 68 | 68 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | 18594 | 5893 | 4 | 126 | 1126 | 1576 | 27323 | | 30.6.2007 | | | | | | | | -------------------------------------------------------------------------------- TALENTUM GROUP / SUB-SEGMENTS -------------------------------------------------------------------------------- | 1000 EUR | | | | | | 12 | 12 | | | | | | | | rolling | rolling | -------------------------------------------------------------------------------- | | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ | 7/06-6/0 | 7/05-6/ | | | 2007 | 2006 | 2007 | 2006 | 2006 | 7 | 06 | -------------------------------------------------------------------------------- | Net sales | | | | | | | | -------------------------------------------------------------------------------- | Publishing | 20579 | 18659 | 41450 | 37263 | 74674 | 78861 | 69351 | -------------------------------------------------------------------------------- | TV content | 5907 | 5931 | 11706 | 11872 | 24641 | 24475 | 21989 | | production | | | | | | | | -------------------------------------------------------------------------------- | Premedia | 3854 | 4642 | 7961 | 10113 | 18021 | 15869 | 20183 | -------------------------------------------------------------------------------- | Direct | 2351 | 2154 | 4838 | 4233 | 8177 | 8782 | 7780 | | marketing | | | | | | | | -------------------------------------------------------------------------------- | Internet | 0 | 0 | 0 | 0 | 0 | 0 | 6 591 | | consulting*) | | | | | | | | -------------------------------------------------------------------------------- | Sales within | -1186 | -1142 | -2436 | -2312 | -4451 | -4576 | -4084 | | group | | | | | | | | -------------------------------------------------------------------------------- | Total | 31506 | 30245 | 63520 | 61170 | 121062 | 123412 | 121811 | -------------------------------------------------------------------------------- | -Discontinue | 0 | 0 | 0 | 0 | 0 | 0 | -6591 | | d operations | | | | | | | | -------------------------------------------------------------------------------- | Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 102 | | and | | | | | | | | | eliminations | | | | | | | | -------------------------------------------------------------------------------- | Total | 31506 | 30245 | 63520 | 61170 | 121062 | 123412 | 115321 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating | | | | | | | | | profit | | | | | | | | -------------------------------------------------------------------------------- | Publishing | 2877 | 1513 | 6821 | 3567 | 7143 | 10397 | 9428 | -------------------------------------------------------------------------------- | TV content | 296 | 549 | 572 | 845 | 1769 | 1496 | 1256 | | production | | | | | | | | -------------------------------------------------------------------------------- | Premedia | -1388 | -240 | -1234 | 118 | -2510 | -3862 | -249 | -------------------------------------------------------------------------------- | Direct | 266 | 275 | 663 | 605 | 1122 | 1180 | 1135 | | marketing | | | | | | | | -------------------------------------------------------------------------------- | Internet | 0 | 0 | 0 | 0 | 0 | 0 | 271 | | consulting*) | | | | | | | | -------------------------------------------------------------------------------- | Parent | -841 | -1386 | -1340 | -2168 | -3249 | -2421 | -3504 | | company and | | | | | | | | | group items | | | | | | | | -------------------------------------------------------------------------------- | Capital gain | 0 | 0 | 0 | | | 0 | 10488 | | on | | | | | | | | | discontinued | | | | | | | | | operations | | | | | | | | -------------------------------------------------------------------------------- | Total | 1211 | 711 | 5483 | 2967 | 4275 | 6791 | 18824 | -------------------------------------------------------------------------------- *) Discontinued operations, gross -------------------------------------------------------------------------------- | PUBLISHING BY | | | | | | | GEOGRAPHICAL AREA | | | | | | -------------------------------------------------------------------------------- | 1000 EUR | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | Net sales | | | | | | -------------------------------------------------------------------------------- | Finland | 12 792 | 12 844 | 26 994 | 26 117 | 52 645 | -------------------------------------------------------------------------------- | Other | 7 787 | 5 815 | 14 456 | 11 146 | 22 029 | -------------------------------------------------------------------------------- | Total | 20 579 | 18 659 | 41 450 | 37 263 | 74 674 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | | | | | | -------------------------------------------------------------------------------- | Finland | 1 384 | 1 069 | 4 635 | 2 940 | 5 525 | -------------------------------------------------------------------------------- | Other | 1 493 | 444 | 2 186 | 627 | 1 618 | -------------------------------------------------------------------------------- | Total | 2 877 | 1 513 | 6 821 | 3 567 | 7 143 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | AVERAGE NUMBER OF EMPLOYEES | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Publishing | 370 | 399 | 405 | -------------------------------------------------------------------------------- | TV content production | 99 | 96 | 98 | -------------------------------------------------------------------------------- | Premedia | 160 | 217 | 199 | -------------------------------------------------------------------------------- | Direct marketing | 350 | 333 | 346 | -------------------------------------------------------------------------------- | Group administration | 12 | 16 | 16 | -------------------------------------------------------------------------------- | Total | 991 | 1 061 | 1 064 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | RELATED PARTY TRANSACTIONS | | | | -------------------------------------------------------------------------------- | Transactions with associates | | | | -------------------------------------------------------------------------------- | 1000 EUR | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Sales | 37 | 62 | 111 | -------------------------------------------------------------------------------- | Purchases | 293 | 355 | 726 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current receivables | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Loan receivables | 9 | 317 | 126 | -------------------------------------------------------------------------------- | Trade receivables | 154 | 0 | 77 | -------------------------------------------------------------------------------- Transactions with joint ventures Group has 50 % ownership in joint venture Oy Mediuutiset Ab. It has been consolidated row by row by applying relative pooling method. Group financial statements include Group's proportion of revenues and expenses, assets and liabilities and cash flow of joint venture. -------------------------------------------------------------------------------- | 1000 EUR | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | 11 | 15 | 14 | -------------------------------------------------------------------------------- | Current assets | 470 | 790 | 544 | -------------------------------------------------------------------------------- | Long term debt | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Short term debt | -158 | -419 | -175 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net assets | 323 | 386 | 383 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income | 611 | 701 | 1 157 | -------------------------------------------------------------------------------- | Expenses | -519 | -547 | -1 005 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 91 | 154 | 152 | -------------------------------------------------------------------------------- Specification of internal group items consolidated by group's proportion -------------------------------------------------------------------------------- | Sales | 22 | 31 | 98 | -------------------------------------------------------------------------------- | Purchases | 0 | 0 | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current receivables | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Trade receivables | 1 | 116 | 18 | -------------------------------------------------------------------------------- | Other receivables | 2 | 686 | 463 | -------------------------------------------------------------------------------- Transactions with CEO and group management A new share-based incentive scheme for the Group Management is described in the section "Management incentive scheme" of the Interim Report. -------------------------------------------------------------------------------- | TANGIBLE ASSETS | | | | -------------------------------------------------------------------------------- | 1000 EUR | 1-6/ | 1-6/ | 1-12/ | | | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | Carrying amount at 1.1. | 7 854 | 7 754 | 7 754 | -------------------------------------------------------------------------------- | Additions | 838 | 2 516 | 3 388 | -------------------------------------------------------------------------------- | Acquisitions through business combinations | 10 | | | -------------------------------------------------------------------------------- | Disposals/transfers | -403 | -490 | -516 | -------------------------------------------------------------------------------- | Depreciation | -1 323 | -1 391 | -2 786 | -------------------------------------------------------------------------------- | Exchange differences | -8 | | 14 | -------------------------------------------------------------------------------- | Carrying amount at the end of the period | 6 968 | 8 389 | 7 854 | -------------------------------------------------------------------------------- The interim report is unaudited. Talentum will be publishing an interim report for January-September on October 26, 2007. TALENTUM OYJ Board of Directors FURTHER INFORMATION Juha Blomster, CEO, tel +358 (0)20 442 4444 Kaisa Kokkonen, CFO, tel +358 (0)40 342 4212 www.talentum.com COPIES TO Helsinki Stock Exchange Key Media BRIEFING A briefing for analysts and the media will be held today, July 20, 2007 at 10.00 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 Kaisa Kokkonen will also be present.