PERFORMANCE IN BRIEF
Baltika Group has successfully adapted to the changed economic environment.
Thanks to a strengthened financial position, the Group has been able to direct
its main resources at improving the efficiency of its core activity and
implementing its strategic development plans. The past two quarters' upward
trends in sales and efficiency indicators were maintained through October and
management expects them to persist also throughout the fourth quarter.
In the third quarter, sales in Baltika's retail markets continued reviving,
gross margins continued improving and the Group's financial position continued
strengthening. The largest sales growth was achieved in the Estonian market
where third quarter sales improved by 12% year-over-year. Compared with the
previous year, sales grew also in the Latvian, Russian and Ukrainian markets.
Sales recovery is best reflected in the comparable store sales figures (sales
per square metre). In the third quarter, the Group's comparable store sales
improved by a total of 8%, the Estonian and Russian markets posting a rise of
11% and 25% (in local currency: 11%) respectively. Better comparable store sales
(on a year-over-year basis) were achieved also in the Latvian, Ukrainian and
Polish markets. In the third quarter, total sales efficiency (total sales per
square metre) increased 14%.
Strong sales results in the Group's retail markets are attributable to the
brands' successful autumn collections. In terms of brands, comparable sales for
the third quarter grew as follows: Mosaic, Ivo Nikkolo and Monton 10%. In terms
of sales volume, the best performer was Ivo Nikkolo whose third quarter sales
expanded by 36%.
Baltika ended the third quarter of 2010 with revenue of 211.0 million kroons
(13.5 million euros), a 6% decrease year-over-year. The third quarter decline in
retail sales was the smallest of recent quarters - in the third quarter retail
sales dropped by 2% year-over-year in a situation where the average sales area
shrunk by 14% owing to the closure of loss-generating stores. Since the
beginning of the year, the Group has closed 11 and opened four stores. The
closure of loss-generating stores will continue also in the fourth quarter.
The Group's retail markets generated a profit for the second consecutive
quarter. Baltika's retail system ended the third quarter with a profit of 5.5
million kroons (0.35 million euros) while the third quarter of 2009 ended in a
loss of 12.4 million kroons (0.8 million euros).
Compared with the first nine months of 2009, the Group's operating expenses have
decreased by 46.7 million kroons (3.0 million euros)- distribution expenses have
dropped by 47.9 million kroons (3.1 million euros) and administrative expenses
by 1.1 million kroons (0.1 million euros).
The Group's net loss for the third quarter, excluding the effect of exchange
differences, was 24.1 million kroons (1.5 million euros). Third-quarter results
were adversely affected by a book exchange loss of 8.8 million kroons (0.6
million euros) triggered by fluctuations in the exchange rates of the Russian
rouble and the Ukrainian hryvna that occurred in July and September.
During the first nine months of the year, the Group's workforce decreased by 241
- from 1,697 to 1,456. Downsizing was the most extensive in retailing and
manufacturing where the Group was forced to release 133 and 102 people
respectively.
REVENUE
Revenue by segment
--------------------------------------------------------------------------------
| EEK, million | Q3 2010 | Q3 2009 | +/- | 9M 2010 | 9M 2009 | +/- |
--------------------------------------------------------------------------------
| Retail | 194.0 | 198.3 | -2.2% | 536.9 | 599.3 | -10.4% |
--------------------------------------------------------------------------------
| Wholesale | 14.8 | 25.8 | -42.6% | 38.1 | 59.4 | -35.9% |
--------------------------------------------------------------------------------
| Other | 2.2 | 1.0 | 120.0% | 5.9 | 1.5 | 293% |
--------------------------------------------------------------------------------
| Total | 211.0 | 225.1 | -6.3% | 580.9 | 660.2 | -12.0% |
--------------------------------------------------------------------------------
EUR 1 = EEK 15.6466
RETAIL
In the third quarter, the sales decline that had been slowing in the second
quarter was replaced by a rise. Strong results were achieved in the Baltic
region and Eastern Europe where sales grew by 0.5% and 2% respectively.
Retail sales by market
--------------------------------------------------------------------------------
| EEK million | Q3 2010 | Q3 2009 | +/- | 9m 2010 | 9m | +/- |
| | | | | | 2009 | |
--------------------------------------------------------------------------------
| Estonia | 51,6 | 46,2 | 12% | 140,6 | 136,6 | 3% |
--------------------------------------------------------------------------------
| Russia | 42,7 | 42,4 | 1% | 118,2 | 117,7 | 0% |
--------------------------------------------------------------------------------
| Lithuania | 39,7 | 46,0 | -14% | 110,6 | 141,7 | -22% |
--------------------------------------------------------------------------------
| Ukraine | 28,6 | 27,8 | 3% | 81,1 | 90,8 | -11% |
--------------------------------------------------------------------------------
| Latvia | 25,8 | 24,5 | 5% | 69,7 | 77,8 | -10% |
--------------------------------------------------------------------------------
| Poland | 5,6 | 7,8 | -28% | 16,7 | 23,3 | -28% |
--------------------------------------------------------------------------------
| Czech Republic | 0,0 | 3,6 | -100% | 0,0 | 11,4 | -100% |
--------------------------------------------------------------------------------
| Total | 194,0 | 198,3 | -2% | 536,9 | 599,3 | -10% |
--------------------------------------------------------------------------------
EUR 1 = EEK 15.6466
BRANDS
In terms of brands, the largest revenue contributor was Monton that accounted
for 52.5% i.e. 101.9 million kroons (6.5 million euros) of the Group's total
third quarter retail revenue. Although this is 6% less than in the previous
year, in terms of comparable store sales the brand achieved growth of 10%.
Mosaic's third quarter sales rose to the level of the previous year, amounting
to 64.4 million kroons (4.1 million euros) i.e. 33% of the Group's total retail
revenue. Comparable store sales for the third quarter grew by 10%
year-over-year. In terms of revenue contribution, the third position was claimed
by Ivo Nikkolo with 15.5 million kroons (1.0 million euros). In the third
quarter, total sales of Ivo Nikkolo grew by 36% and comparable store sales
improved by 10%. Ivo Nikkolo was the only brand that posted sales growth also
for the first nine months of the year. Sales of Baltman decreased in the third
quarter by 15% to 12.2 million kroons (0.8 million euros).
STORES AND SALES AREA
At the end of September 2010, Baltika Group had 123 stores with a total sales
area of 24,794 square metres, 15.3% down from a year ago. In the first nine
months, the Group closed 11 stores - five in Ukraine, four in Russia, one in
Lithuania, and one in Estonia, and opened four stores - one in Russia, one in
Latvia, and two in Estonia. Compared with the same period in 2009, the number of
stores operated by Baltika decreased by 18 and the average sales area shrank by
8%. Baltika will continue closing non-profitable stores also in the fourth
quarter of 2010.
Stores by market
--------------------------------------------------------------------------------
| | 30 Sept 2010 | 30 Sept 2009 |
--------------------------------------------------------------------------------
| Lithuania | 32 | 36 |
--------------------------------------------------------------------------------
| Estonia | 31 | 32 |
--------------------------------------------------------------------------------
| Russia | 22 | 30 |
--------------------------------------------------------------------------------
| Ukraine | 18 | 21 |
--------------------------------------------------------------------------------
| Latvia | 15 | 15 |
--------------------------------------------------------------------------------
| Poland | 5 | 5 |
--------------------------------------------------------------------------------
| Czech Republic | 0 | 2 |
--------------------------------------------------------------------------------
| Total number of stores | 123 | 141 |
--------------------------------------------------------------------------------
| Total sales area, m2 | 24,794 | 29,277 |
--------------------------------------------------------------------------------
WHOLESALE
Wholesale revenues for the first nine months of 2010 totalled 38.1 million
kroons (2.4 million euros), a 36% decrease year-over-year. The period's
wholesale figures were influenced mainly by the divestment of the manufacture
and operation of the MasCara and Herold in brands in April 2010; the impact of
the transaction on the third quarter sales decrease was in the region of 13.0
million kroons (0.8 million euros). Comparable wholesale revenues remained at
the level of the previous year.
EARNINGS AND MARGINS
The Group's performance in the third quarter of 2010 continued to be influenced
by the crisis-induced weakening in the consumers' purchasing power that began
showing the first signs of recovery, store closure expenses and the additional
effect of exchange rate fluctuations. Thanks to better discount planning and
inventory management, nine-month gross profit per square metre grew by 18%
year-over-year. The gross margin for the first nine months was 50.4% against 47%
for the same period in 2009.
The third quarter gross margin was influenced by growth in delivery charges. In
order to ensure a quality beginning for the new season and respond timely to
consumer needs, the Group increased the frequency of its scheduled deliveries.
The Group's nine-month distribution and administrative expenses decreased by
46.7 million kroons (3.0 million euros) i.e. 12.9% year-over-year while the
average sales area shrank by 8%. Average store operating expenses per square
metre decreased by 2% compared with the first nine months of 2009 - rental
expenses declined by 6% and personnel expenses remained stable.
The nine-month personnel expenses of the Group's Estonian production entities
decreased by 27% i.e. 13.5 million kroons (0.9 million euros) year-over-year.
Production expenses have decreased on account of downsizing and an ensuing
decline in personnel expenses.
If in the first six months exchange rate fluctuations had a positive impact on
the Group's performance, then in the third quarter movements in the exchange
rates of the rouble and the hryvna had an adverse effect on the Group's results.
In the third quarter, reporting-date exchange rates weakened as follows: the
Russian rouble -6.3% and the Ukrainian hryvna -7.5%. As a result, the total
negative non-monetary impact of movements in exchange rates on the results for
the third quarter was 8.8 million kroons (0.6 million euros). Since the average
exchange rates for the third quarter did not change significantly, the impact on
sales and operating expenses was minimal - a total of 0.5 million kroons (0.03
million euros).
The Group's retail operations posted a profit for the second consecutive
quarter. In the third quarter, Baltika's retail system generated a profit of 5.5
million kroons (0.35 million euros) compared with a loss of 12.4 million kroons
(0.8 million euros) in the third quarter of 2009.
The Group's operating loss for the third quarter of 2010 was 27.3 million kroons
(1.7 million euros), a 3.4 million kroon (0.2 million euro) increase
year-over-year.
Although the Group's interest-bearing liabilities have decreased, interest
expense for the first nine months grew by 31% year-over-year to 13.8 million
kroons (0.9 million euros) because of a rise in loan margins and growth in the
average loan balance. Interest expense for the third quarter decreased by 4%
year-over-year.
The Group's net loss for the third quarter amounted to 33.4 million kroons (2.1
million euros), an increase of 5.0 million kroons (0.3 million euros) on the
same period in 2009. Third quarter net loss before the effect of exchange rate
fluctuations was 24.1 million kroons (1.5 million euros). Baltika's net loss for
the first nine months of 2010 (after tax and the non-controlling interest)
amounted to 77.8 million kroons (5.0 million euros). In the same period in 2009,
the Group incurred a net loss of 125.7 million kroons (8.0 million euros).
FINANCIAL POSITION
In 2010 the Group has put a lot of effort in strengthening its financial
position and improving its liquidity.
As at 30 September 2010, Baltika's consolidated assets stood at 653.8 million
kroons (41.8 million euros), a 48.1 million kroon (3.1 million euro) decrease
compared with the end of the previous year.
At the end of September, inventories totalled 174.5 million kroons (11.2 million
euros), 7.3% (13.7 million kroons/0.9 million euros) down from the beginning of
the year. During the same period, the average retail space decreased by 8%. For
the most part, the funds raised through the additional share issue were used for
settling trade payables and securing timely delivery of goods for the autumn
season. Compared with the beginning of the year, trade and other payables
decreased by 38.7 million kroons (2.5 million euros) to 120.7 million kroons
(7.7 million euros). Through better management of its financial position and
liquidity, the Group has been able to secure better settlement terms from the
suppliers. This in combination with better management of the purchasing policy
has allowed achieving a more optimal structure and volume of inventories.
At the end of September, the Group's borrowings totalled 320.5 million kroons
(20.5 million euros), having decreased in the third quarter by 6.7 million
kroons (0.4 million euros). Bank loans totalled 308.9 million kroons (19.7
million euros) and finance lease liabilities amounted to 6.8 million kroons (0.4
million euros). Compared with the beginning of the year, the debt burden has
decreased by 35.5 million kroons (2.3 million euros).
The Group's net debt (interest-bearing liabilities less cash and bank balances)
to equity ratio has improved thanks to the additional funds raised through the
share issue and the disposal of assets not required for the core activity. At 30
September 2010, the ratio was 149% (31 December 2009: 183.1%).
CASH FLOWS
The Group has used the funds raised through investing and financing activities
for improving its financial position in order to ensure sustainable development
of its operating activities in a period of economic downturn.
Net cash flow for the first nine months was positive at 1.8 million kroons,
including cash outflows from operating activities of -92.4 million kroons(0.12
million euros) and cash inflows from investing and financing activities of 21.8
million kroons (5.9 million euros) and 69.9 million kroons(4.5 million euros)
respectively. The Group's financial position was strengthened by the 106.2
million kroons (6.8 million euros) raised through an additional share issue,
24.6 million kroons (1.6 million euros) raised by the sale of real estate and a
decrease in operating loss. In the first nine months, loan repayments to banks
totalled 40.0 million kroons (9 months 2009: 53.4 million kroons).
INVESTMENT
In the first nine months of 2010 the Group made capital investments of 3.2
million kroons (0.2 million euros) (9 months 2009: 94.4 million kroons/6.0
million euros). Investments in the retail system totalled 1.7 million kroons
(0.1 million euros) and other investments amounted to 1.5 million kroons (0.1
million euros). In the second half-year, the main investments have been directed
at upgrading the Group's IT processes and adopting the euro.
PEOPLE
At the end of September 2010, Baltika Group employed 1,456 (30 September 2009:
1,757) people, 796 (966) of them in the retail system, 478 (603) in
manufacturing and 182 (188) at the head office. People employed outside Estonia
numbered 610 (768), accounting for 42% of the total workforce. Compared with the
beginning of the year, the headcount has decreased by 241. The period's average
number of staff was 1,560 (9 months 2009: 1,840).
The Group's employee remuneration expenses for the first nine months of 2010
totalled 124.8 million kroons/8.0 million euros (9 months 2009: 150.4 million
kroons/9.6 million euros), a 17% decrease year-over-year. Payroll expenses have
declined on account of a decrease in the number of staff and the average salary.
The remuneration of the members of the supervisory council and management board
amounted to 4.4 million kroons/0.3 million euros (9 months 2009: 3.0 million
kroons/0.2 million euros). The figure has grown because the membership of the
supervisory council has increased.
LISTING OF ADDITIONAL SHARES
The annual general meeting that convened on 21 June 2010 resolved to increase
the share capital of AS Baltika by issuing 8,850,000 additional registered
ordinary shares with a par value of 10 kroons at a premium of 2 kroons per
share. The 8,850,000 ordinary shares were listed in the main list of the NASDAQ
OMX Tallinn Stock Exchange on 20 September 2010.
KEY FIGURES OF THE GROUP (9 months 2010)
--------------------------------------------------------------------------------
| | 30.09.2010 | 30.09.2009 | +/- |
--------------------------------------------------------------------------------
| Revenue (EEK million) | 580,9 | 660,2 | -12,0% |
--------------------------------------------------------------------------------
| Retail sales (EEK million) | 536,9 | 599,3 | -10,4% |
--------------------------------------------------------------------------------
| Share of retail sales in revenue | 92% | 91% | |
--------------------------------------------------------------------------------
| Number of stores | 123 | 141 | -12,8% |
--------------------------------------------------------------------------------
| Sales area (sqm) | 24 794 | 29 277 | -15,3% |
--------------------------------------------------------------------------------
| Number of employees (end of | 1 456 | 1 757 | -17,1% |
| period) | | | |
--------------------------------------------------------------------------------
| Gross margin | 50,0% | 47,0% | |
--------------------------------------------------------------------------------
| Operating margin | -11,5% | -17,0% | |
--------------------------------------------------------------------------------
| EBT margin | -13,4% | -19,0% | |
--------------------------------------------------------------------------------
| Net margin | -13,6% | -19,1% | |
--------------------------------------------------------------------------------
| Current ratio | 1,1 | 1,0 | 10,0% |
--------------------------------------------------------------------------------
| Inventory turnover | 4,48 | 3,76 | 19,1% |
--------------------------------------------------------------------------------
| Debt to equity ratio | 149,0% | 178,9% | |
--------------------------------------------------------------------------------
| Return on equity | -61,7% | -78,7% | |
--------------------------------------------------------------------------------
| Return on assets | -16,5% | -25,7% | |
--------------------------------------------------------------------------------
EUR 1 = EEK 15.6466
Underlying formulas
Gross margin = (Revenue - Cost of sales)/ Revenue
Operating margin = Operating profit / Revenue
EBT margin = Profit before income tax / Revenue
Net margin = Net profit (attributable to the parent) / Revenue
Current ratio = Current assets / Current liabilities
Inventory turnover ratio = Revenue / Average inventories*
Debt to equity ratio = Interest-bearing liabilities / Equity
Return on equity = Net profit (attributable to the parent)/ Average equity*
Return on assets = Net profit (attributable to the parent)/ Average total
assets*
*12 months' average
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF COMPREHENSIVE | | | |
| INCOME | | | |
--------------------------------------------------------------------------------
| (unaudited, in EEK thousand) | | |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 2009 | 9m 2010 | 9m 2009 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | 211 003 | 225 132 | 580 857 | 660 181 |
--------------------------------------------------------------------------------
| Cost of goods sold | -108 191 | -111 460 | -287 920 | -350 140 |
--------------------------------------------------------------------------------
| Gross profit | 102 812 | 113 672 | 292 937 | 310 041 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution costs | -109 050 | -120 461 | -328 906 | -376 760 |
--------------------------------------------------------------------------------
| Administrative and general | -11 866 | -10 135 | -32 843 | -31 696 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other operating income | -7 618 | 607 | 6 224 | 642 |
--------------------------------------------------------------------------------
| Other operating expenses | -1 557 | -7 552 | -4 032 | -14 604 |
--------------------------------------------------------------------------------
| Operating profit (loss) | -27 279 | -23 869 | -66 620 | -112 377 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance income | -1 114 | 10 | 2 519 | 26 |
--------------------------------------------------------------------------------
| Finance costs | -4 420 | -4 457 | -13 787 | -13 335 |
--------------------------------------------------------------------------------
| Profit (loss) before income tax | -32 813 | -28 316 | -77 888 | -125 686 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income tax | -682 | -112 | -1 175 | -344 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit (loss) | -33 495 | -28 428 | -79 063 | -126 030 |
--------------------------------------------------------------------------------
| Profit (loss) attributable to: | | | | |
--------------------------------------------------------------------------------
| Net profit (loss) attributable | -33 487 | -28 778 | -79 257 | -126 162 |
| to equity holders of the parent | | | | |
| company | | | | |
--------------------------------------------------------------------------------
| Net profit (loss) attributable | -8 | 350 | 194 | 132 |
| to non-controlling interests | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income | | | | |
| (loss) | | | | |
--------------------------------------------------------------------------------
| Currency translation | -841 | 3 811 | -2 751 | -2 184 |
| differences | | | | |
--------------------------------------------------------------------------------
| Total comprehensive income | -34 336 | -24 617 | -81 814 | -128 214 |
| (loss) | | | | |
--------------------------------------------------------------------------------
| Comprehensive income (loss) | | | | |
| attributable to: | | | | |
--------------------------------------------------------------------------------
| Equity holders of the parent | -34 328 | -24 967 | -82 008 | -127 134 |
| company | | | | |
--------------------------------------------------------------------------------
| Non-controlling interests | -8 | 350 | 194 | -1 080 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic earnings per share, EEK | -1,22 | -1,54 | -3,62 | -6,77 |
--------------------------------------------------------------------------------
| Diluted earnings per share, EEK | -1,22 | -1,54 | -3,62 | -6,77 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF COMPREHENSIVE | | | |
| INCOME | | | |
--------------------------------------------------------------------------------
| (unaudited, in EUR thousand) | | |
--------------------------------------------------------------------------------
| | Q3 2010 | Q3 | 9m 2010 | 9m 2009 |
| | | 2009 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Revenue | 13 486 | 14 389 | 37 124 | 42 193 |
--------------------------------------------------------------------------------
| Cost of goods sold | -6 915 | -7 124 | -18 401 | -22 378 |
--------------------------------------------------------------------------------
| Gross profit | 6 571 | 7 265 | 18 722 | 19 815 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Distribution costs | -6 970 | -7 699 | -21 021 | -24 079 |
--------------------------------------------------------------------------------
| Administrative and general | -758 | -648 | -2 099 | -2 026 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Other operating income | -487 | 39 | 398 | 41 |
--------------------------------------------------------------------------------
| Other operating expenses | -100 | -483 | -258 | -933 |
--------------------------------------------------------------------------------
| Operating profit (loss) | -1 743 | -1 526 | -4 258 | -7 182 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance income | -71 | 1 | 161 | 2 |
--------------------------------------------------------------------------------
| Finance costs | -282 | -285 | -881 | -852 |
--------------------------------------------------------------------------------
| Profit (loss) before income | -2 097 | -1 810 | -4 978 | -8 033 |
| tax | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income tax | -44 | -7 | -75 | -22 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit (loss) | -2 141 | -1 817 | -5 053 | -8 055 |
--------------------------------------------------------------------------------
| Profit (loss) attributable | | | | |
| to: | | | | |
--------------------------------------------------------------------------------
| Net profit (loss) | -2 140 | -1 839 | -5 065 | -8 063 |
| attributable to equity | | | | |
| holders of the parent | | | | |
| company | | | | |
--------------------------------------------------------------------------------
| Net profit (loss) | -1 | 22 | 12 | 8 |
| attributable to | | | | |
| non-controlling interests | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income | | | | |
| (loss) | | | | |
--------------------------------------------------------------------------------
| Currency translation | -54 | 244 | -176 | -140 |
| differences | | | | |
--------------------------------------------------------------------------------
| Total comprehensive income | -2 194 | -1 573 | -5 229 | -8 194 |
| (loss) | | | | |
--------------------------------------------------------------------------------
| Comprehensive income (loss) | | | | |
| attributable to: | | | | |
--------------------------------------------------------------------------------
| Equity holders of the | -2 194 | -1 596 | -5 241 | -8 125 |
| parent company | | | | |
--------------------------------------------------------------------------------
| Non-controlling interests | -1 | 22 | 12 | -69 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic earnings per share, | -0,08 | -0,10 | -0,23 | -0,43 |
| EUR | | | | |
--------------------------------------------------------------------------------
| Diluted earnings per share, | -0,08 | -0,10 | -0,23 | -0,43 |
| EUR | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF | | | |
| FINANCIAL POSITION | | | |
--------------------------------------------------------------------------------
| (unaudited, in EEK thousand) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 30.09.2010 | 31.12.2009 | |
--------------------------------------------------------------------------------
| ASSETS | | | |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Cash and bank | 7 838 | 6 024 | |
--------------------------------------------------------------------------------
| Trade and other receivables | 65 047 | 54 932 | |
--------------------------------------------------------------------------------
| Inventories | 174 522 | 188 181 | |
--------------------------------------------------------------------------------
| Total current assets | 247 407 | 249 137 | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Deferred income tax asset | 16 488 | 16 488 | |
--------------------------------------------------------------------------------
| Other non-current assets | 15 079 | 7 728 | |
--------------------------------------------------------------------------------
| Investment property | 103 294 | 103 294 | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 209 863 | 263 165 | |
--------------------------------------------------------------------------------
| Intangible assets | 61 623 | 62 133 | |
--------------------------------------------------------------------------------
| Total non-current assets | 406 347 | 452 808 | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 653 754 | 701 945 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Borrowings | 128 861 | 122 942 | |
--------------------------------------------------------------------------------
| Trade and other payables | 120 660 | 159 375 | |
--------------------------------------------------------------------------------
| Total current liabilities | 249 521 | 282 317 | |
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Borrowings | 191 636 | 232 942 | |
--------------------------------------------------------------------------------
| Other liabilities | 590 | 114 | |
--------------------------------------------------------------------------------
| Deferred income tax liability | 0 | 0 | |
--------------------------------------------------------------------------------
| Total non-current liabilities | 192 226 | 233 056 | |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 441 747 | 515 373 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY | | | |
--------------------------------------------------------------------------------
| Share capital at par value | 314 949 | 226 449 | |
--------------------------------------------------------------------------------
| Share premium | 19 798 | 1 049 | |
--------------------------------------------------------------------------------
| Reserves | 43 567 | 43 567 | |
--------------------------------------------------------------------------------
| Retained earnings | -77 617 | 81 487 | |
--------------------------------------------------------------------------------
| Net profit (loss) for the period | -79 257 | -159 104 | |
--------------------------------------------------------------------------------
| Currency translation differences | -12 161 | -9 410 | |
--------------------------------------------------------------------------------
| Total equity attributable to | 209 279 | 184 038 | |
| equity holders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
| Non-controlling interest | 2 728 | 2 534 | |
--------------------------------------------------------------------------------
| TOTAL EQUITY | 212 007 | 186 572 | |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY | 653 754 | 701 945 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF FINANCIAL | | |
| POSITION | | |
--------------------------------------------------------------------------------
| (unaudited, in EUR thousand) | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 30.09.2010 | 31.12.2009 |
--------------------------------------------------------------------------------
| ASSETS | | |
--------------------------------------------------------------------------------
| Current assets | | |
--------------------------------------------------------------------------------
| Cash and bank | 501 | 385 |
--------------------------------------------------------------------------------
| Trade and other receivables | 4 157 | 3 511 |
--------------------------------------------------------------------------------
| Inventories | 11 154 | 12 027 |
--------------------------------------------------------------------------------
| Total current assets | 15 812 | 15 923 |
--------------------------------------------------------------------------------
| Non-current assets | | |
--------------------------------------------------------------------------------
| Deferred income tax asset | 1 054 | 1 054 |
--------------------------------------------------------------------------------
| Other non-current assets | 964 | 494 |
--------------------------------------------------------------------------------
| Investment property | 6 602 | 6 602 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 13 413 | 16 819 |
--------------------------------------------------------------------------------
| Intangible assets | 3 938 | 3 971 |
--------------------------------------------------------------------------------
| Total non-current assets | 25 970 | 28 940 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 41 782 | 44 862 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | |
--------------------------------------------------------------------------------
| Current liabilities | | |
--------------------------------------------------------------------------------
| Borrowings | 8 236 | 7 857 |
--------------------------------------------------------------------------------
| Trade and other payables | 7 712 | 10 186 |
--------------------------------------------------------------------------------
| Total current liabilities | 15 947 | 18 043 |
--------------------------------------------------------------------------------
| Non-current liabilities | | |
--------------------------------------------------------------------------------
| Borrowings | 12 248 | 14 888 |
--------------------------------------------------------------------------------
| Other liabilities | 38 | 7 |
--------------------------------------------------------------------------------
| Deferred income tax liability | 0 | 0 |
--------------------------------------------------------------------------------
| Total non-current liabilities | 12 285 | 14 895 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 28 233 | 32 938 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY | | |
--------------------------------------------------------------------------------
| Share capital at par value | 20 129 | 14 473 |
--------------------------------------------------------------------------------
| Share premium | 1 265 | 67 |
--------------------------------------------------------------------------------
| Reserves | 2 784 | 2 784 |
--------------------------------------------------------------------------------
| Retained earnings | -4 961 | 5 208 |
--------------------------------------------------------------------------------
| Net profit (loss) for the period | -5 065 | -10 169 |
--------------------------------------------------------------------------------
| Currency translation differences | -777 | -601 |
--------------------------------------------------------------------------------
| Total equity attributable to equity holders | 13 375 | 11 762 |
| of the parent company | | |
--------------------------------------------------------------------------------
| Non-controlling interest | 174 | 162 |
--------------------------------------------------------------------------------
| TOTAL EQUITY | 13 550 | 11 924 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY | 41 782 | 44 862 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASF FLOW STATEMENT | | |
--------------------------------------------------------------------------------
| (unaudited, in EEK thousand) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 9m 2010 | 9m 2009 |
--------------------------------------------------------------------------------
| Operating activities | | |
--------------------------------------------------------------------------------
| Operating profit (loss) | -66 620 | -112 377 |
--------------------------------------------------------------------------------
| Adjustments: | | |
--------------------------------------------------------------------------------
| Depreciation, amortization and impairment of | 35 873 | 36 529 |
| PPE and intangibles | | |
--------------------------------------------------------------------------------
| Loss (gain) from disposal of PPE and investment | 1 147 | 717 |
| property | | |
--------------------------------------------------------------------------------
| Other non-monetary expenses | -5 122 | 1 474 |
--------------------------------------------------------------------------------
| Changes in working capital: | 0 | 0 |
--------------------------------------------------------------------------------
| Change in trade and other receivables | -19 826 | 13 656 |
--------------------------------------------------------------------------------
| Change in inventories | 13 659 | 73 282 |
--------------------------------------------------------------------------------
| Change in trade and other payables | -36 736 | -32 167 |
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| Interest paid | -13 937 | -10 577 |
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| Income tax paid | -840 | 1 276 |
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| Net cash generated from operating activities | -92 402 | -28 187 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investing activities | | |
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| Acquisition of property, plant and equipment, | -3 447 | -94 378 |
| intangibles, thereof | | |
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| Under the finance lease terms | 674 | 3 775 |
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| Proceeds from disposal of property, plant and | 24 592 | 713 |
| equipment | | |
--------------------------------------------------------------------------------
| Investments in subsidiaries | 0 | -2 |
--------------------------------------------------------------------------------
| Interest received | 8 | 14 |
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| Net cash used in investing activities | 21 827 | -89 878 |
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--------------------------------------------------------------------------------
| Financing activities | | |
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| Received borrowings | 10 508 | 135 266 |
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| Repayments of borrowings | -39 399 | -26 705 |
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| Change in bank overdraft | -639 | -26 778 |
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| Repayments of finance lease and other | -2 996 | -3 374 |
| liabilities | | |
--------------------------------------------------------------------------------
| Receipts from share issue | 106 200 | 40 000 |
--------------------------------------------------------------------------------
| Transaction costs of issuing preference shares | 0 | -865 |
--------------------------------------------------------------------------------
| Dividend paid for preference shares | -3 793 | 0 |
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| Dividend paid | -3 | 0 |
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| Bonds transactions | 0 | 185 |
--------------------------------------------------------------------------------
| Net cash generated from financing activities | 69 878 | 117 729 |
--------------------------------------------------------------------------------
| Effect of exchange gains (losses) on cash and | 2 511 | -2 837 |
| cash equivalents | | |
--------------------------------------------------------------------------------
| Total cash flows | 1 814 | -3 173 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at the beginning of | 6 024 | 8 671 |
| the period | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end of the | 7 838 | 5 498 |
| period | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | 1 814 | -3 173 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT | | |
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| (unaudited, in EUR thousand) | | |
--------------------------------------------------------------------------------
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| | 9m 2010 | 9m 2009 |
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| Operating activities | | |
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| Operating profit (loss) | -4 258 | -7 182 |
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| Adjustments: | | |
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| Depreciation, amortization and impairment of | 2 293 | 2 335 |
| PPE and intangibles | | |
--------------------------------------------------------------------------------
| Loss (gain) from disposal of PPE and investment | 73 | 46 |
| property | | |
--------------------------------------------------------------------------------
| Other non-monetary expenses | -327 | 94 |
--------------------------------------------------------------------------------
| Changes in working capital: | | |
--------------------------------------------------------------------------------
| Change in trade and other receivables | -1 267 | 873 |
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| Change in inventories | 873 | 4 684 |
--------------------------------------------------------------------------------
| Change in trade and other payables | -2 348 | -2 056 |
--------------------------------------------------------------------------------
| Interest paid | -891 | -676 |
--------------------------------------------------------------------------------
| Income tax paid | -54 | 82 |
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| Net cash generated from operating activities | -5 906 | -1 801 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investing activities | | |
--------------------------------------------------------------------------------
| Acquisition of property, plant and equipment, | -220 | -6 032 |
| intangibles, thereof | | |
--------------------------------------------------------------------------------
| Under the finance lease terms | 43 | 241 |
--------------------------------------------------------------------------------
| Proceeds from disposal of property, plant and | 1 572 | 46 |
| equipment | | |
--------------------------------------------------------------------------------
| Investments in subsidiaries | 0 | -0,1 |
--------------------------------------------------------------------------------
| Interest received | 1 | 1 |
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| Net cash used in investing activities | 1 395 | -5 743 |
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| Financing activities | | |
--------------------------------------------------------------------------------
| Received borrowings | 672 | 8 645 |
--------------------------------------------------------------------------------
| Repayments of borrowings | -2 518 | -1 707 |
--------------------------------------------------------------------------------
| Change in bank overdraft | -41 | -1 711 |
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| Repayments of finance lease and other | -191 | -216 |
| liabilities | | |
--------------------------------------------------------------------------------
| Receipts from share issue | 6 787 | 2 556 |
--------------------------------------------------------------------------------
| Transaction costs of issuing preference shares | 0 | -55 |
--------------------------------------------------------------------------------
| Dividend paid for preference shares | -242 | 0 |
--------------------------------------------------------------------------------
| Dividend paid | -0,2 | 0 |
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| Bonds transactions | 0 | 12 |
--------------------------------------------------------------------------------
| Net cash generated from financing activities | 4 466 | 7 524 |
--------------------------------------------------------------------------------
| Effect of exchange gains (losses) on cash and | 160 | -181 |
| cash equivalents | | |
--------------------------------------------------------------------------------
| Total cash flows | 116 | -203 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at the beginning of | 385 | 554 |
| the period | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end of the | 501 | 351 |
| period | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | 116 | -203 |
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Ülle Järv
Finantsdirektor, Juhatuse liige
+372 630 2731