AS Ekspress Grupp has today concluded the contract of purchase and sale for the acquisition of 100% of Interinfo Baltic OÜ's shareholding. OÜ Interinfo Baltic is a holding company, its only substantial asset after restructuring being 100% of the shares of AS Delfi owning 100% of the shares of AS Delfi in the Republic of Latvia and 100% of the shares of UAB Delfi in the Republic of Lithuania. The sellers are Interinfo Holding SCA with 99.75% shareholding and Interinfo Finland OY with 0.25% shareholding. The purchase price of the shares is 54.05 million euros - approximately 846 million Estonian kroons to be transferred to the sellers in one payment after the Competition Board passes the corresponding decision. The transaction is financed by the Ekspress Group from the funds obtained in the course of the initial public share offering this spring and with a bank loan from the syndicate of SEB Ühispank, Sampo Pank and Nordea Pank. The transaction shall come into effect subject to the decision of the Competition Board allowing this concentration. The transaction also requires approval of the general meeting of the shareholders of AS Ekspress Grupp. AS Delfi and its subsidiaries operate 7 Internet portals: portals in Estonian/Latvian and Russian in Estonia and Latvia (www.delfi.ee, rus.delfi.ee, www.delfi.lv and rus.delfi.lv), two portals in Lithuania (www.delfi.lt and www.centras.lt) and a news portal in the Ukraine (www.delfi.ua). The sales revenue of the Delfi Group in 2006 was 89.3 million kroons. By the end of 2006 the number of Delfi users in the Baltic States reached 1.8 million while some 700,000 people visit Delfi's websites on a daily basis. According to Delfi, the group's portals hold 45-48% of the Baltic online advertising market. The Delfi portals operate as three local companies in the respective Baltic States. The forecasted turnover of the Delfi Group for this year is 118 million kroons, the estimated EBITDA - 42 million kroons. The company expects a 30% turnover increase for 2007 and a 35-40% EBITDA margin in the following years as well. This forecast is based on the assumption of continuing growth trend of the advertising market and the increasing market share of online advertising. The transaction will also facilitate additional profit of 1-2 million EUR resulting from the synergies with the existing activities of the Ekspress Group. After the share purchase the Ekspress Group will become the Baltic market leader in the most rapidly evolving sphere of business in Europe - online advertising - and will also enter the Ukrainian market. Also, in view of Delfi's substantially stronger position in Latvia and Lithuania, the Ekspress Group will thus have a more solid foundation for further expansion in those two other Baltic States. The existing websites of the Ekspress Group will get more readers and therefore a greater advertising turnover as well. The involvement of Delfi's professional team of Internet specialists in the Ekspress Group's human resources is important, too. The company is purchased based on the cash free/debt free principle, i.e. the company has no loan-related liabilities. The acquired company is not involved in any judicial or arbitration proceedings of substantial influence. There are no valid commercial contracts between the Ekspress Group and OÜ Interinfo Baltic or AS Delfi. Magnus Sonnorp is Member of the Management Board of OÜ Interinfo Baltic and he will be recalled when the transaction enters into force. This transaction is not a related party transaction in the meaning stipulated in the requirements of the Tallinn Stock Exchange for issuers. No material changes in the commercial activities of AS Delfi have occurred after 31.12.2006. Financial information: -------------------------------------------------------------------------------- | Delfi Group | 2004 | 2005 | 2006 | -------------------------------------------------------------------------------- | Sales revenue (thousands of | 34 364 | 60 421 | 89 308 | | kroons) | | | | -------------------------------------------------------------------------------- | Net profit or loss | -612 | 10 342 | 24 002 | | (thousands of kroons) | | | | -------------------------------------------------------------------------------- | Dividend per share (kroons) | - | - | - | -------------------------------------------------------------------------------- | Net profit per share | - | 3 446 | 7 998 | | (kroons) | | | | -------------------------------------------------------------------------------- Delfi Group Income statement (thousands of kroons) -------------------------------------------------------------------------------- | | | 2006 | | 2005 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sales revenue | | 89 308 | | 60 421 | -------------------------------------------------------------------------------- | Sold output (goods, services) | | -25 471 | | -19 669 | | expenditure | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross profit | | 63 837 | | 40 752 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Marketing costs | | -16 839 | | -9 616 | -------------------------------------------------------------------------------- | General administrative costs | | -16 628 | | -17 001 | -------------------------------------------------------------------------------- | Other business income | | 991 | | 250 | -------------------------------------------------------------------------------- | Other business costs | | -72 | | -224 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | | 31 289 | | 14 161 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Depreciation and impairment of fixed | | -3 155 | | -2 135 | | assets | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | | 28 134 | | 12 026 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial income and expenses | | | | | -------------------------------------------------------------------------------- | Interest income from long-term financial | | 141 | | 0 | | investments | | | | | -------------------------------------------------------------------------------- | Profit (loss) on foreign currency | | -163 | | -285 | | conversion | | | | | -------------------------------------------------------------------------------- | Other financial income and expenses | | -119 | | 14 | -------------------------------------------------------------------------------- | Total financial income and expenses | | -141 | | -271 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit before income tax | | 27 993 | | 11 755 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income tax | | -3 991 | | -1 413 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net profit for financial year | | 24 002 | | 10 342 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Delfi Group Balance Sheet (thousands of kroons) -------------------------------------------------------------------------------- | | | 31.12.2006 | | 31.12.2005 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and bank accounts | | 23 844 | | 15 370 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Receivables and prepayments | | 12 175 | | 12 220 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Stock | | 3 | | 292 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total current assets | | 36 022 | | 27 882 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fixed assets | | | | | -------------------------------------------------------------------------------- | Long-term financial investments | | 5 550 | | 0 | -------------------------------------------------------------------------------- | Tangible assets | | 6 778 | | 2 891 | -------------------------------------------------------------------------------- | Intangible fixed assets | | 3 348 | | 3 260 | -------------------------------------------------------------------------------- | Total fixed assets | | 15 676 | | 6 151 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | | 51 698 | | 34 033 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES AND OWNERS' EQUITY | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Payables and prepayments | | 13 323 | | 19 569 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Short-term provisions | | 279 | | 260 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total current liabilities | | 13 602 | | 19 829 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Owners' equity | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Owners' equity belonging to the owners | | 38 096 | | 14 204 | | of the parent company | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total owners' equity | | 38 096 | | 14 204 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total liabilities and owners' equity | | 51 698 | | 34 033 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 1 EUR = 15,6466 EEK Additional information: Priit Leito Manager AS Ekspress Grupp Tel: 6698080 E-mail: priit@egrupp.ee