Satama Interactive Plc Stock Exchange Release August 29, 2007 at 7.
Satama Interactive Plc ("Satama"), Trainers' House Oy ("Trainers' House") and
all of the shareholders of Trainers' House have signed a Combination Agreement,
according to which Satama will purchase 45.0 per cent of shares in Trainers'
House and Trainers' House will merge into Satama approximately by the end of the
year 2007. Transaction in brief:
- The transaction creates a unique company providing growth management
services, delivering business critical sales and marketing systems and training
for its clients.
- The transaction will have a major impact on Satama's net sales, operating
profit and earnings per share.
- After the merger the name of the combined company will be Trainers' House
Plc.Satama and Trainers' House will remain as names and independent brands of
the business areas.
In 2006, the pro forma net sales of the combined company's was approximately
49,3 million Euros and operating profit approximately 2,6 million Euros,
including 3,0 million Euros of amortizations of intangible assets resulting
from the IFRS allocations of the purchase price. In the first half
of 2007, the combined company's pro forma net sales was approximately 28,6
million Euros and operating profit approximately 4,1 million Euros including
1,0 million Euros of amortizations of intangible assets resulting from the IFRS
allocations of the purchase price. In June 30, 2007 the total number
of personnel was 475.
The diluted pro forma earnings per share of the combined company's from the
period January 1 - June 30, 2007 is 0.038 Euros which is 42.5 per cent higher
than Satama's realized earnings per share during the same period. Excluding
amortizations of intangible assets resulting from the IFRS allocations of the
purchase price, the diluted earnings per share is 0.052 per cent which is 98.5
per cent higher in comparison to Satama's realized earnings per share in
comparable period. The merger is expected to significantly speed up the
possibility to use Satama's confirmed losses in taxation.
The transaction is subject to the approval of General Meetings of
both Satama and Trainers' House. The Board of Directors of both companies
unanimously recommend the approval of the transaction. Additionally, Satama's
shareholders and holders of forward trading contracts related to Satama shares,
who represent approximately 23.1 per cent through direct ownership and 19.4 per
cent through forward trading contracts and all of the shareholders in Trainers'
House have announced that they support the approval of the transaction at the
respective Extraordinary General Meetings.
Companies will organize a press and analyst conference on August 29, 2007
starting at 11.30am at Pörssisali, Fabianinkatu 14, Helsinki.
Press conference will be webcasted live and can be viewed at www.satama.com on
August 29, 2007 starting at 11:30.
Aarne Aktan, the Chairman of the Board of Satama comments on the merger:
"This merger is a turning point for Satama that will lead to stronger financial
and strategic development. The combination significantly improves Satama's
ability to generate profit, cash flow and earnings per share. I am convinced
that the transaction will create a strong foundation for both domestic and
international growth."
Jari Sarasvuo, the Chairman of the Board of Trainers' House comments on the
merger:
“Throughout the 21st century our customers have demanded growth management
systems. When combining training with the effects of marketing and management
systems, new level of results will lead to a compared to stand-alone
activities. The BLARP (Business Live Action Role-Play), created together with
Satama, has already received an enthusiastic response within our clientele. The
combined company will be an international company providing continuous
management services for growth. And our intention is that the company will
pay dividends in
the future.”
Grounds for the merger
The Boards of both Satama and Trainers' House see that the merger is in line
with the growth strategies of the both companies and that the merger is
justified from both financial and business perspectives. Satama is strong in
marketing, communications and in creating management systems related to those,
which fits well together with Trainers' House's marketing and training services.
The merger makes new and more comprehensive service offerings possible for
current and new customers.
The merger will create a strong foundation for new business that will have
sales and marketing management systems as its spearhead products. The first
product under continuous services business is the sales and marketing
management system BLARP, which has been developed together by Satama and
Trainers' House. BLARP combines Satama's competence in design and technology
and Trainers' House's competence in managing sales and marketing. In the future
the spearhead products of the combined company will comprise of management
systems focusing in customership, human and value creation processes.
The combined company will have a strong position in its field of business in
Finland and considerable domestic and international growth opportunities. The
combined company is expected to show strong cash flow and good profitability,
which creates premises to create shareholder value for the shareholders of the
combined company. The Transaction is not expected to generate substantial cost
savings.
Financial Objectives of the Combined Company
Satama's Board of Directors has set new financial objectives for the combined
company. The combined company will target 15 per cent annual organic growth and
15 per cent operating profit. The company plans to pay 30 to 50 per cent of its
annual profit as a dividend.
Transaction in Brief
Satama and Trainers' House and all of the shareholders of Trainers' House have
on August 28, 2007 signed a combination agreement concerning the planned
combination of the two companies (“Combination Agreement”) and share purchase
agreements concerning the purchase of shares in Trainers' House (“Share Purchase
Agreements”). The entire transaction is conditional on the approvals and
prerequisite decisions of the General Meetings of both companies concerning e.g.
the issue of new shares in Satama and the required amendments to the articles of
association of Satama. The Board of Directors of Satama recommends unanimously
that the Extraordinary General Meeting of Satama, which will be convened with a
separate notice, approves the transaction. Satama's shareholders and entities
that hold forward trading contracts related to Satama share, whom represent
approximately 42.5 per cent of the shares, have committed to approving the
transaction in the Extraordinary General Meeting. If the transaction is approved
by the Extraordinary General Meetings of both companies, the merger will be
completed approximately by the end of the financial year 2007.
The Transaction comprises of two phases as follows:
- In the first phase Satama will purchase from the current shareholders of
Trainers' House approximately 45.0 per cent of shares in Trainers' House (”Share
Purchase”), which will be closed promptly after the General Meetings of both
Satama and Trainers' House have approved the transaction. In the Share Purchase
Mr. Jari Sarasvuo sells 10.934.975 shares and other owners of Trainers' House
will sell a total of 2.553.955 shares. The cash consideration is approximately
33,1 million Euros. The Share Purchase will be financed with bank loans. Satama
has a commitment letter concerning the financing of the Share Purchase.
- In the second phase, approximately at the end of the year 2007, Trainers'
House will be merged to Satama through absorption merger and the current
shareholders of Trainers' House will receive 33.340.567 new Satama shares for
consideration of the remaining 55 per cent of the shares in Trainers' House
(the “Merger”). The new Satama shares will have a right to dividend and other
shareholders' rights once the shares have been registered, approximately on
December 31, 2007. The purpose of Satama and Trainers' House is that the Satama
shares currently owned by Trainers' House, which represent approximately 17.5
per cent of the outstanding shares in Satama, will be invalidated with a
separate decision after the merger registration has entered into force.
- The transaction is conditional for the approval of the Extraordinary
General Meetings of both companies. Additionally, the Boards of
Directors of Satama and Trainers' House have, prior to the completion
of the merger, the right to terminate the transaction if
(i) there is a material adverse change in the significant financial condition of
one of the parties to the merger;
(ii) if new information is present that was not present that has a material
adverse effect to the value of one of the parties to the merger;
(iii) if a competent court or regulatory authority has issued a decision that
prevents the completion of the merger, and such decision is final, or before
this if the decision has a significant adverse effect to one of the parties;
(iv) if all of the required regulatory approvals or advance rulings essential
for Satama, Trainers' House or the current shareholders of Trainers' House have
not been issued or they do not remain in force;
(v) if the combination agreement has been terminated in accordance with its
terms and conditions; or
(vi) if the merger has not been completed by April 1, 2008.
(vii) within 48 hours after Satama's extraordinary general meeting if the
majority of the shareholders present at the meeting excluding Trainers' House
and Isildur Oy, have voted to reject the transaction
- Based on the closing price of Satama's share on August 28, 2008 1,19 Euros,
the value of all of the shares in Trainers' House will be approximately 72,8
million Euros, of which 33,1 million Euros will be paid as the cash
consideration of the Share Purchase and 39,7 million Euros will be paid with
new shares in Satama. The value of Trainers' House includes, based on the
company's balance sheet as of June 30, 2007, approximately 14,6 million Euros
of net cash, other liquid investments and shares in Satama.
- The Board of Directors of Satama unanimously recommends that the
Extraordinary General Meeting approves the transaction. Shareholders and
holders of forward trading contracts, who represent 42.5 per cent of the shares
in Satama have announced that they support the Board of Directors' proposals.
All of the shareholders of Trainers' House have committed to closing the
Transaction and voting to approve the necessary resolutions at the Trainers'
House's Extraordinary General Meeting. Danske Markets Corporate Finance has
issued a fairness opinion to the Board of Directors of Satama concerning the
transaction.
- After the transaction is closed, the current Satama shareholders (excluding
Trainers' House and Isildur Oy, a company controlled by Mr. Sarasvuo) own a
total of approximately 50.2 per cent of the outstanding shares and votes in the
combined company, and the current shareholders of Trainers' House own
approximately 49.8 per cent of the outstanding shares and votes in the combined
company. Mr. Jari Sarasvuo directly and Isildur Oy under Mr. Sarasvuo's command
will own approximately 35.9 per cent and other current shareholders of Trainers'
House approximately 13.9 per cent of the shares and votes of the combined
entity.
- The Finnish Financial Supervision Authority has granted an exemption to Jari
Sarasvuo and Isildur Oy regarding the obligation to present a mandatory
redemption offer concerning Satama. The terms and conditions of the exemption
require that the combined shareholding of Mr. Sarasvuo and Isildur Oy in Satama
will decline to 30 per cent or under within one (1) year from the date that the
new shares have been registered.
- As a part of the transaction Satama and the current shareholders of Trainers'
House have agreed upon lock-up arrangements concerning the new Satama shares, of
the working obligations of the current Trainers' House shareholders and of
regular non-solicitation and non-competition clauses. The lock-ups are a maximum
of five years so that one third (1/3) of the new shares will be released after
three years, one third (1/3) will be released after four years and the rest of
the shares will be released after five years. All of the time limits are
calculated from the date that the completion of merger is registered. The
shareholders in Trainers' House have committed to an employment for five (5)
years after the registration date of the completion of the merger.
- Satama and Trainers' House will continue to operate under their current
brands.The Board of Directors of Satama will propose to the Extraordinary
General Meeting that the trade name of the combined company will be changed to
Trainers'House Plc after the completion of the merger has been registered.
Board of Directors and Management of the Combined Company
After the Extraordinary General Meetings of the shareholders have approved the
merger, the Board of Directors of Satama will nominate Mr. Jari Sarasvuo as the
Chief Executive Officer of the combined entity as of the completion of the
merger. Simultaneously, Mr. Jari Sarasvuo will resign from his position as a
member of the Board of Directors. The Board of Directors of the combined company
will consist of the current members of the Satama Board of Directors and Mr. Kai
Seikku, the CEO of HKScan will be proposed as a new member of the Board of
Directors as of the completion of the merger. The current CEO of Satama, Mr.
Jarmo Lönnfors, will continue as the Senior Executive in charge of Satama
operations and the current CEO of Trainers' House, Mr. Vesa Honkanen, will
continue as the Senior Executive in charge of Trainers' House operations. The
current CFO of Trainers' House, Mirkka Vikström, will be the CFO of the combined
company following the registration date of the completion of the merger. The
management board of the combined entity will be formed by CEO Jari Sarasvuo,
Executive Vice Presidents Jarmo Lönnfors and Vesa Honkanen, CFO Mirkka Vikström
and General Counsel Antti Summa.
Prospectus and listing of the new shares
Satama will apply for listing of the new shares to be issued in the merger on
the Helsinki Exchange. The prospectus concerning the listing of the new shares
will be published before the Extraordinary General Meeting of Satama on a
separately announced date. Satama will confirm the merger after the merger has
been entered in to the register.
Preliminary timetable
The notice to convene the Extraordinary General Meeting of Satama will be
published approximately during week 38. The prospectus will be published
approximately in week 41 and the Extraordinary General Meeting of Satama will
take place approximately on October 15, 2007. The merger of Satama and Trainers'
House will be completed and registered approximately on December 31, 2007.
Advisers
HLP Corporate Finance Oy acts as the financial adviser of Satama and Hannes
Snellman attorneys at law as the legal adviser. Evli Pankki Oyj, Corporate
Finance acts as the financial adviser of Trainers' House and Fennica Oy,
attorneys at law as the legal adviser of Trainers' House.
The biggest shareholders of the combined company after the completion of the
Transaction:
Share of capital
and votes,(%)
Name
Jari Sarasvuo and Isildur Oy 35,9 %
Nordea Pankki Suomi Oyj 13,0%
Quartal Oy 3,1%
Varma 2,9 %
Ilmarinen 2,8%
The pro forma financial information of the combined company (unaudited)
The pro forma financial information is completed in accordance with the
international financial reporting standards (IFRS) followed by Satama. The
historic financial information of Trainers' House has been adjusted to in all
relevant ways to comply with the accounting standards followed by Satama. Pro
forma income statement have been calculated as if the acquisition had taken
place on January 1, 2006, and the pro forma balance sheet as if the merger would
have taken place on June 30, 2007.
--------------------------------------------------------------------------------
| PRO FORMA COSOLIDATED INCOME STATEMENT OF THE | | |
| COMBINED COMPANY IFRS (1000 €) | | |
| (unaudited) | | |
--------------------------------------------------------------------------------
| | 1-6/07 | 1-12/06 |
--------------------------------------------------------------------------------
| NET SALES | 28 587 | 49 304 |
--------------------------------------------------------------------------------
| Other operating income | 8 | 175 |
--------------------------------------------------------------------------------
| Materials and services | 3 313 | 6 009 |
--------------------------------------------------------------------------------
| Costs resulting from employee benefits | 14 919 | 26 620 |
--------------------------------------------------------------------------------
| Depreciation | 1 584 | 4 135 |
--------------------------------------------------------------------------------
| Other operating expenses | 4 637 | 10 113 |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 4 142 | 2 603 |
--------------------------------------------------------------------------------
| % of net sales | 14,5 | 5,3 |
--------------------------------------------------------------------------------
| Financial Income | 230 | 354 |
--------------------------------------------------------------------------------
| Financial Expenses | 921 | 2 051 |
--------------------------------------------------------------------------------
| Share of profit/loss in associated company | - | -4 |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES | 3 451 | 901 |
--------------------------------------------------------------------------------
| % of net sales | 12,1 | 1,8 |
--------------------------------------------------------------------------------
| Income taxes | 918 | 305 |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 2 533 | 596 |
--------------------------------------------------------------------------------
| % of net sales | 8,9 | 1,2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PRO FORMA CONSOLIDATED BALANCE SHEET, IFRS | | |
| (1000 €) 30.6.2007 | | |
| (UNAUDITED) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | | |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | |
--------------------------------------------------------------------------------
| Fixed assets | 1 962 | |
--------------------------------------------------------------------------------
| Goodwill | 54 050 | |
--------------------------------------------------------------------------------
| Other intangible assets | 20 367 | |
--------------------------------------------------------------------------------
| Financial assets | 346 | |
--------------------------------------------------------------------------------
| Receivables | 204 | |
--------------------------------------------------------------------------------
| Deferred tax receivables | 5 600 | |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS | 82 529 | |
--------------------------------------------------------------------------------
| CURRENT ASSETS | | |
--------------------------------------------------------------------------------
| Inventories | 15 | |
--------------------------------------------------------------------------------
| Accounts receivables and other receivables | 15 493 | |
--------------------------------------------------------------------------------
| Cash equivalent | 3 622 | |
--------------------------------------------------------------------------------
| Cash | 3 950 | |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS | 23 081 | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 105 610 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY | | |
| AND LIABILITIES | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY | | |
| ATTRIBUTABLE TO SHAREHOLDERS' | | |
| OF THE PARENT COMPANY | | |
--------------------------------------------------------------------------------
| Capital stock | 867 | |
--------------------------------------------------------------------------------
| Other funds | 39 008 | |
--------------------------------------------------------------------------------
| Premium fund | 13 228 | |
--------------------------------------------------------------------------------
| Translation difference | -1 | |
--------------------------------------------------------------------------------
| Retained earnings | -628 | |
--------------------------------------------------------------------------------
| Profit for the period | 1 088 | |
--------------------------------------------------------------------------------
| TOTAL SHAREHOLDERS' EQUITY | 53 561 | |
--------------------------------------------------------------------------------
| LONG TERM LIABILITIES | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 5 767 | |
--------------------------------------------------------------------------------
| Interest bearing debt | 34 662 | |
--------------------------------------------------------------------------------
| Other liabilities | 75 | |
--------------------------------------------------------------------------------
| SHORT-TERM LIABILITIES | | |
--------------------------------------------------------------------------------
| Provisions | 100 | |
--------------------------------------------------------------------------------
| Interest bearing debt | 86 | |
--------------------------------------------------------------------------------
| Accounts payable and other liabilities | 11 358 | |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 52 048 | |
--------------------------------------------------------------------------------
| TOTAL SHAREHOLDERS' EQUITY AND | 105 610 | |
| LIABILITIES | | |
--------------------------------------------------------------------------------
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| KEY FIGURES | | |
--------------------------------------------------------------------------------
| | 1-6/07 | 1-12/06 |
--------------------------------------------------------------------------------
| Earnings per share, undiluted, € | 0,04 | 0,01 |
| Undiluted number | | |
--------------------------------------------------------------------------------
| of shares | 67 295 977 | 66 509 258 |
--------------------------------------------------------------------------------
| Earnings per share, diluted, € | 0,04 | 0,01 |
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| Diluted number of shares | 67 313 677 | 66 732 573 |
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The share price of Satama used in the consolidation and pro forma calculations
is 1,17 Euros, which was the closing price in the Helsinki Stock Exchange on
August 23, 2007. In the final combination the price at the time of change of
control is used. The change in the share price effects the goodwill on
combination: if the share price rises the rise increases the amount of goodwill
on consolidation and if the share price declines it reduces the amount of
goodwill on consolidation. Respectively, the amount of equity at the completion
of the purchase effects to the final amount of goodwill on consolidation.
The preliminary purchase consideration to be allocated in the Pro Forma
calculations totals 58,7 million Euros. 9,6 million Euros of the amount is
attributable to trademark, 5,8 million to customer relationships and customer
lists, 3,4 million to non-compete agreements and other contracts and 1,1 million
to order backlog. The goodwill generated in the transaction is approximately 44
million Euros. According to IFRS standards, amounts allocated in the goodwill
and trademark are not subject to annual amortizations but are subject to regular
impairment testing. The annual depreciation of 2,0 million Euros is based on the
expected time of financial impact of customerships, customer lists, non-compete
agreements and other contracts, which is approximately 5 years. 1,1 million
Euros allocated to order backlog will be amortized during one year, since the
duration of the projects of Trainers' House is less than one year.
Satama in brief
Satama is a marketing technology services company. Satama's strength is in
combining marketing, information work and technology. Satama's services are
divided under three strongly complementing business areas: Marketing,
Productivity and Mobility. Satama's net sales in 2006 was approximately 34,5
million Euros and operating profit approximately 0.2 million Euros. The group
employed 379 persons on June 30, 2007.
Satama has offices in Helsinki, Tampere, Turku, Amsterdam, Düsseldorf and
Stockholm.
Trainers' House in brief
Trainers' House is the leading marketing and training company in Finland.
Besides of the parent company, Trainers' House Group consists of Ignis Oy.
Trainers' House has grown strongly in the past years. The company has been
constantly very profitable. Trainers' House's net sales in 2006 was
approximately 15,1 million Euros and operating profit approximately 5,4 million
Euros. The group employed 96 persons on June 30, 2007. Trainers' House is owned
by Jari Sarasvuo (76 %) and other key employees of the company (24 %).
The unaudited financial statements under IFRS from 1-6/2007 and full year 2006
are presented in the enclosure 1 to this release.
Enclosures
Enclosure 1. Trainers' House Oy's financial statements (IFRS) from 1-6/2007 and
full year 2006.
In Helsinki, August 29, 2007
Satama Interactive Plc
The Board of Directors
Additional information:
Aarne Aktan, Satama Interactive Plc, Chairman of the Board, tel +358 40 774 0204
Jarmo Lönnfors, Satama Interactive Plc, CEO, tel. +358 500 405 178
Jari Sarasvuo, Trainers' House Oy, Chairman of the Board, tel. +358 500 665 666
Vesa Honkanen, Trainers' House Oy, CEO, tel. +358 500 432 993
Distribution:
Helsinki Stock Exchange
Prominent media
ENCLOSURE 1.
Trainers' House Oy's financial statements (unaudited)
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| TRAINERS' HOUSE, CONSOLIDATED | | | | |
| INCOME STATEMENT, IFRS (1000 €) | | | | |
| (unaudited) | | | | |
--------------------------------------------------------------------------------
| | 1-6/07 | | | 1-12/06 |
--------------------------------------------------------------------------------
| NET SALES | 9 563 | | | 15 105 |
--------------------------------------------------------------------------------
| Other income from operations | 0 | | | 0 |
--------------------------------------------------------------------------------
| Materials and services | 540 | | | 1 180 |
--------------------------------------------------------------------------------
| Costs resulting from employee | 3 309 | | | 5 011 |
| benefits | | | | |
--------------------------------------------------------------------------------
| Depreciation | 152 | | | 274 |
--------------------------------------------------------------------------------
| Other operating expenses | 1 895 | | | 3 195 |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 3 666 | | | 5 446 |
--------------------------------------------------------------------------------
| % net sales | 38,3 | | | 36,1 |
--------------------------------------------------------------------------------
| Financial income | 1277 | | | 967 |
| Financial expenses | 15 | | | 50 |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES | 4 928 | | | 6 364 |
--------------------------------------------------------------------------------
| % net sales | 51,5 | | | 42,1 |
--------------------------------------------------------------------------------
| Income taxes | 1 297 | | | 1 652 |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 3 631 | | | 4 712 |
--------------------------------------------------------------------------------
| % net sales | 38,0 | | | 31,2 |
--------------------------------------------------------------------------------
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| TRAINERS' HOUSE, CONSOLIDATED | | | | |
| BALANCE SHEET, IFRS (1000 €) | | | | |
| 30.6.2007 | | | | |
| (unaudited) | | | | |
--------------------------------------------------------------------------------
| | 30.6.2007 | | | |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | | | |
--------------------------------------------------------------------------------
| Fixed assets | 422 | | | |
--------------------------------------------------------------------------------
| Other intangible assets | 47 | | | |
--------------------------------------------------------------------------------
| Financial assets | 8 663 | | | |
--------------------------------------------------------------------------------
| Receivables | 103 | | | |
--------------------------------------------------------------------------------
| Deferred tax receivables | 294 | | | |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS | 9 529 | | | |
--------------------------------------------------------------------------------
| CURRENT ASSETS | | | | |
--------------------------------------------------------------------------------
| Inventories | 15 | | | |
--------------------------------------------------------------------------------
| Accounts receivables and other | 3 007 | | | |
| receivables | | | | |
--------------------------------------------------------------------------------
| Cash equivalents | 3622 | | | |
| Cash | 3416 | | | |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS | 10 060 | | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 19 589 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND | | | | |
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS EQUITY ATTRIBUTABLE | | | | |
| TO SHAREHOLDERS' OF THE PARENT | | | | |
| COMPANY | | | | |
--------------------------------------------------------------------------------
| Capital stock | 10 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Retained earnings | 11 245 | | | |
--------------------------------------------------------------------------------
| Profit for the period | 3 631 | | | |
--------------------------------------------------------------------------------
| TOTAL SHAREHOLDERS' EQUITY | 14 886 | | | |
--------------------------------------------------------------------------------
| LONG-TERM LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 597 | | | |
--------------------------------------------------------------------------------
| Interest bearing debt | 1004 | | | |
--------------------------------------------------------------------------------
| SHORT-TERM LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Interest bearing debt | 86 | | | |
--------------------------------------------------------------------------------
| Provisions | | | | |
--------------------------------------------------------------------------------
| Accounts payable and other | 3 016 | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 4 703 | | | |
--------------------------------------------------------------------------------
| TOTAL SHAREHOLDERS' EQUITY AND | 19 589 | | | |
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
According to Finnish Accounting Standards (FAS), the net sales of Trainers'
House during the first six months of 2007 were 9,8 million Euros (7,7). Net
sales grew by 28.3 per cent in comparison to same period in 2006. Operating
profit according to FAS was 4,0 million Euros (2,5) during the first six months
of 2007, which is 40.9 per cent (33.1 per cent) of net sales.